Good morning, and welcome to the WESCO Fourth Quarter and Full Year 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Leslie Hunziker. Please go ahead.

Thank you, and good morning, everyone. Before we get started, I want to remind you that certain statements made on this call contain forward-looking information. Forward-looking statements are not guarantees the performance and by their nature are subject to inherent uncertainties. Actual results may differ materially. Please see our webcast slides as well as the company's SEC filings for additional risk factors and disclosures. Any forward looking information relayed on this call speaks only as of this date, and the company undertakes no obligation to update the information to reflect change circumstances. Today we'll use certain non-GAAP financial measures. Required information about these non-GAAP measures is available on our webcast slides and in our press release, both of which are posted on our website at wesco.com. On this call, this morning we have John Engel, our CEO; and Dave Schulz, WESCO's Chief Financial Officer. Now, I'll turn the call over to John.

Well, thank you, Leslie. And a warm welcome to WESCO, it's great to have you on the team.

Thank you.

Good morning, everyone. And I hope that all of you have been staying safe and healthy. I'll start out with a summary of 2020 and some of our most notable accomplishments. Dave will take you through at that point an update on our rapid progress that we're making on integrating Anixter. And I'll take you through our fourth quarter and full year results, and then give you an overview of our outlook for 2021. After that, I'll offer a quick recap before we open the line for questions. So starting up, 2020 was an extraordinary year for WESCO. We completed a transformational acquisition of Anixter, doubling our size of the company and changing our trajectory for years to come. We're off to an excellent start, and I'm more bullish than ever on delivering against our substantial value creation potential. In addition, I'm inspired by and we'd like to thank all of our associates for their dedication, commitment, resilience and extraordinary effort in serving customers during the global pandemic. As most of you know, we announced our agreement to acquire Anixter International last January. And we were very pleased to close the transaction a little more than five months later. The first six months of the integration have gone exceptionally well. Our synergy capture exceeded our expectations, both in terms of size of the opportunities, as well as the rapid pace of our execution. You'll recall, last quarter we increased our three year post merger cost synergy target from $200 million to $250 million. In addition, the highly complementary nature of WESCO and Anixter, and our substantially larger scale has enabled us to build a cross sell pipeline that's starting to show up in our top-line results, and this is very encouraging. At the same time that we're working towards closing…

Thank you, John. Before getting into the results for the fourth quarter, I'd like to address where we are with cost synergies from the integration with Anixter. When we announced the merger with Anixter back in January of 2020, we anticipated a mid-2020 close and provided investors with our view on synergies for the first three years post close. On Slide 7, you'll see that we've converted our synergy timeline to align with our fiscal year-end. This chart on the left side of the slide shows the cumulative realized cost synergies that we expect to generate by fiscal year. Realized synergies are those that are reflected in our income statement. In the first six months post close, we have realized $39 million of cost synergies, $15 million in Q3, and $24 million in Q4. In 2021, we expect to realize an additional $90 million of synergies, bringing our total to $130 million by the end of the year. Consistent with the expectation we provided on our last earnings call, we still anticipate realizing $100 million of cost synergies in the first 12-months of the merger, through June of 2021, with a cumulative cost synergies of $130 million by December. In addition to the cumulative cost synergies, we have shown the cumulative onetime operating expenses to achieve the synergies below the bar chart. As you can see, we have spent $37 million in onetime operating costs in the first six months, and expect to spend an incremental $78 million on onetime operating expenses to generate the incremental $90 million of synergies in 2021. By June of 2023, we expect to generate $250 million of realized cost synergies on a trailing 12-month basis. In total, this $250 million target is comprised of initiatives that are approximately 20% related to cost of goods…

Thanks, Dave. We covered a lot of material this morning. Before opening your call to questions I'd like to walk you through a quick summary. Again, 2020 was a transformational year for WESCO and highlighted many of the company's strengths. First, we respond with quick and decisive actions as I mentioned earlier, the cause to the global COVID-19 pandemic and delivered excellent performance through the downturn. Number two, our integration with Anixter is off to an excellent start and it is accelerating. We made substantial progress on the integration in just the first six months, and we're very pleased to be able to increase our synergy targets. Our new leadership team is the strongest management team in our history, and is driving our high performance culture. We have launched our cross sell programs in all three of our business units, and are already seeing positive results. And three and most importantly, the business is uniquely well-positioned to capitalize on the highlighted secular growth trends that will drive demand for our full spectrum of end-to-end solutions for years to come. 2020 marked a watershed year and the beginning of a new era for WESCO. As the industry leader, we are now larger and more diversified with differentiated scale and capabilities, in what remains a highly fragmented industry. We're exceptionally well-positioned and intent to lead not only a digital transformation of our business, but also of our industry. So with that, I'd like to open the call for questions.

We will now begin the question-and-answer session. [Operator instructions] The first question comes from Sam Darkatsh with Raymond James. Please go ahead.

Good morning, John. Good morning, Dave. How are you?

Good morning, Sam.

Two questions if I may. The first you're calling out, I guess if my math holds about $150 million of resumed costs in fiscal '21 from COVID restoration, incentive comp benefits, and so on. We knew about the $50 million in specific to COVID. The $100 million of incentive comp and benefits, at least to me was a surprise in its scale. To the extent that it doesn't look like you're going to be levering the $500 million to $1 billion dollars in incremental sales on an organic basis. First off, I think my math holds, but why not lever that type of incremental sales, especially knowing that price and price cost and presumably building margins are going to be favorable for you this year?

Yes. Sam, good morning. Thank you for the question. We were very clear that we had $50 million on the legacy WESCO business that was COVID-related actions that we took in 2020. Obviously, that's being restored as we entered 2021. We also mentioned on several of our earnings calls that, our results were well below our expectations coming into 2020. And as such, we have not paid out or accrued for full incentive compensation and sales commissions here in 2020. You see that in our results. So, similar to what we've done in previous years, our intent is to include 100% target payouts, not only on the incentive compensation, but also our sales commissions. We also do have a couple of other volume related increases to SG&A, including some higher benefits costs that we've included in that outlook of a 90 basis point drag for 2021.

Okay. My second question, if I may, pardon me. You had $24 million in synergies that you realized in the fourth quarter, and it looks like you're guiding the $28 million in the first quarter. I would have thought that the synergy recognition would have been a step function higher, meaningful step function higher in the first quarter over the fourth quarter because of the timing of vendor supply agreements and then rolling over and therefore your benefits to purchasing. Is there an offset to that? Or what am I missing in terms of thinking about sequential synergies Q1 over Q4?

Yes. Sam, a lot of the benefit that we're expecting to see in the first quarter particularly will really be more on the SG&A side. You are correct that we are continuing to focus on some of our supplier agreements and getting the alignment between the two legacy programs, obviously we've included some of that in our expectations for the adjusted EBITDA margin. But right now, at this point, we don't expect there to be considerable cost of good synergies, at least in the front half of the year for 2021.

And Sam, let me just make a comment, because I think both your two questions get at this, which is, what I want to be very clear, that we have high confidence on our upside. And the upside is sales, sales growth, cost synergies, margin expansion and free cash flow generation. Our confidence is the highest it's ever been. As we've gone through the first six months plus post close, our confidence has increased, quite frankly. But we did not and appropriately, we believe, did not build that into our 2021 guide.

Very helpful. Thank you, gentlemen.

The next question comes from Deane Dray with RBC Capital Markets. Please go ahead.

Thank you. Good morning, everyone.

Good morning, Deane.

Hey, I'd like to pick up where Sam left off there. In terms of the roll back of the temporary cost, it looks like it hit the electrical segment disproportionately, just in terms of like the margin hit. And I know you've given for 2021 you size it at 90 basis points. What was it for electrical? Maybe for the three segments in the fourth quarter, because it just feels like, there wasn't a feathering back of these costs, but it was more just a full reversion there. So just, take us through the size that maybe that'll help us calibrate the impact?

Yes, certainly. So, going back to what we talked about in the third quarter, on our COVID-related cost actions, again, this was really on just a legacy WESCO business. And obviously we've done quite a bit of work to begin the integration. But, as we highlighted that COVID-related costs reduction of $50 million as part of our Q1 earnings call, as you see, that we had $28 million of benefit from that program in the third quarter that basically came back in the fourth quarter as we restored those activities. If you take a look at the composition of our strategic business units, there are more sales from the legacy WESCO business within the EES, SBU and therefore they took a higher portion of that recovery of COVID-related actions within the fourth quarter relative to the other two SBUs. So that's really what's driving that margin degradation in EES relative to the sequential numbers from Q3.

That is actually very helpful. We're just looking at the context of having higher WESCO legacy sales in the electrical segment. That's a good input there. And then…

And Deane, on that again, it was temporary salary reduction, which then the benefits came with that 401k match. It was a very as you know, and we’ve articulated very aggressive set of actions and so that mix effect is what you're seeing as Dave highlighted.

All right. So that color is helpful. And then second question on Page 7, the whole cost synergies, the timeline. Just as a reminder, these are net synergies. And are you seeing any sort of lost sales and branch consolidations, sales force reductions or any of the revenues walking out the door?

So I'll answer the second part, and Dave may want to tag on the first. The very encouraging answer to this is, we have not, Deane. We feel very good about our momentum in the marketplace. And we're not seeing -- first of all, we have structurally addressed the combination of two companies with structural cost takeout. And we highlighted that we had over 650 full time equivalent that have left the business. So we've been working that, we've not seen unplanned or unwanted attrition, point one. Point two, we are not seeing any share leakage. So we're very encouraged by the results thus far.

That's helpful. Thank you.

And Deane, let me address your question on Slide 7 of our deck. What we're showing here are essentially the gross cost synergies that we expect to achieve, which would be a structural takeout versus our 2019 pro forma. And we were showing you separately the cost to achieve which would be onetime in nature.

Got it. Thank you.

The next question comes from David Manthey with Baird. Please go ahead.

Thank you. Good morning, everyone. First question, you don't mentioned price in the sales outlook, but with copper and other industrial commodities being up as much as they are. How are you thinking about price increases in 2021? And related to that, we talked about the 50 to 80 basis points of EBITDA improvement for mix, share and leverage. How much of that is mix alone? Are you assuming gross margins higher in 2021?

So Dave, for our outlook, we have not specifically called out the inflationary benefits that we would expect to see as commodity prices increase. It's always extremely difficult for us to project what that would look like for the full year. So clearly, we have seen what's going on within the current market, we know what's volatile. And our expectation is that as we see those costs increases, we will continue to pass them through to our customers. But inherently we have not built that into our outlook for 2021.

And Dave, I will comment on gross margin. We're not guiding gross margins, but I'll give you some indication of how we're thinking about it. Because clearly, we're now seeing I would say for first quarter of this year, if you look at supplier price increases that we are aware of been informed of, and we also have obviously have knowledge of what we -- suppliers are intending on doing to some degree before everything is fully rolled through. We work with them in conjunction. The number and overall average increases of those price increases has increased. So clearly above a year ago, we're seeing that momentum build. Net-net, that'll be a good thing and it will be a positive support for our margin expansion. We absolutely intend and are very focused on getting core gross margin expansion this year. We're just not guiding to that level of you know. And what we've done and we've talked about in the last two quarterly earnings calls, Anixter did I think an outstanding job of with their multiyear margin improvement program. We've taken that program, and there were some other refinements they wanted to make. So we incorporated those improvements and that is being deployed enterprise wide. So the refined version for Anixter has been deployed, enterprise is being deployed. And then across WESCO, and we do fully intend and expect to see core gross margin expansion. I mean, Anixter has delivered 2.5 plus years of gross margin expansion looking back every quarter, which is absolutely terrific in the environment that we collectively faced. That environment is going to get a bit better here with inflation increasing. And then finally, we've got unmatched supply chain capabilities. If you look at the two together and this is more of the strategic benefit. I was addressing earlier, more of that kind of initiatives and tactical benefits. But strategically, we've doubled the size of the company and we've got unmatched supply chain capabilities. And we are in the process now of going through our category review. So we're going category by category by category, and looking at the complete supplier line-up. And it's part of that process underneath the drivers of the integration management office, fully dedicated staff driving execution is to drive business through to our preferred supplier partners. And that inherently will result in a larger more strategic relationship with them. Net-net, together we will be able to provide even better value, and I think that will be margin accretive as well. Does that help?

It does. Thank you very much, John.

The next question comes from Christopher Glynn with Oppenheimer. Please go ahead.

Thanks. Good morning, John, Dave. You guided adjusted EBITDA margins for the segments, for the DNA, in order to kind of bridge to the adjusted earnings on the P&L. Is the 4Q represent a good annualized run rate for the segments in total? What are you expecting for DNA?

It's a good proxy for what we're expecting for DNA in 2021. I mean, with the fourth quarter, you can see how our DNA came down slightly versus Q3, that's a good starting point, as you're thinking about 2021.

Okay. And back to Slide 7, in cumulative onetime off that we can tell the incremental amount, I believe that gets adjusted out within the merger cost buckets each quarter, just want to verify that?

That is correct.

Okay. And then in terms of the restoration of costs, that $150 million for Sam's accurate math there, how much of that run rate would you say was realized or restored in the fourth quarter, maybe on a percentage basis?

The only thing that really hit us in the fourth quarter, Chris, was that restoration of the COVID actions. And so, relative to Q3, we restored a little over $28 million of COVID-related cost actions here in the fourth quarter. The balance is really what we're expecting in terms of primarily target payouts, and the impact of inflation on some of our benefits programs for 2021 that have not impacted 2020 in our numbers.

Okay. Thank you.

The next question comes from Nigel Coe with Wolfe Research. Please go ahead.

Thanks. Good morning.

Good morning, Nigel.

Good morning. I hope as well. Just wanted to just dig a little bit deeper into Slide 14. Now in your adjusted EBITDA margin targets that exclude stock based comp but stock based comp hits. So I just wanted to size that. I think it's $35 million in 2020. Just wondering what that is? And then interest costs below the line, what should we dive into that?

Certainly. So the stock-based compensation, you should assume approximately $35 million for a 2021 impact. And again, as you mentioned, we do exclude that when we talk about our adjusted EBITDA, but that impact is included in the adjusted EPS numbers.

And then interest?

For interest expense, you're probably looking at somewhere in the range of $67 million to $70 million per quarter in 2021, that's taking into account what you saw here in Q4. But then we also do have the benefit of the 2021 notes being called. And we'll also be obviously managing our facilities down aggressively.

Okay. So $67 million to $71 [ph] million per quarter. My broader question is that when I put all these inputs into my model, I was struck against your EPS guidance range. So I'm wondering, if there's some conservatism or hedge baked into that range over and above all the inputs you've given us? Thank very much.

Yes. Again, we've given you a fairly clear view of our expectations throughout the income statement. We've also provided you with our view of what you should expect in terms of the free cash flow generation. Again, we know that there's some volatility in the end markets. We're laser focused on not only meeting the expectations we set on delivering the synergies, but exceeding them. And so, I'll let you draw your own conclusion in terms of how we put together the guide, I mean, obviously, you've done the math. Again, we believe that we are just starting to see the true benefit of those strategic combination of WESCO and Anixter coming together in 2021, in terms of top-line and our ability to drive cost synergies.

And Nigel as I mentioned earlier, again, very high confidence we have substantial upside, completely down the P&L and with cash generation. Again, look at our cash generation in 2020, look at it, a little under $600 million, which is the three year target that we have set. And again, we did not build that into the guide and we think appropriately so. I mean, let's keep in mind that, there is a lot of positive indicators around overall market recovery. We feel very good about our trajectory, because we think we're accelerating and doing better than market. But we're not fully recovered yet. "And there's still many, many customers have not returned to work." And so that's what also informs what we think is an appropriate guide.

Great. Thanks, guys. I appreciate that.

The next question comes from Tommy Moll with Stephens. Please go ahead.

Good morning, and thanks for taking my questions.

Good morning.

Good morning.

I wanted to start on your outlook for revenue this year. If I'm interpreting correctly, I think we're looking at up 3% to 6% year-on-year across all three segments. But could you give us any insight, maybe a rank ordering of segments which might skew toward the higher end of that range or the lower? Or relatedly any kind of specific end market color you could give would be helpful? Thanks.

Sure. The three businesses, I'll start with the one that is the most global, the second largest is CSS, Communications and Security Solutions. So, when you take a look at our materials, Tommy and you look at the secular growth trends we called out, almost all of those directly impact that business. It's the most global business, it's been enjoying a multiyear run a very strong growth, that's the legacy Anixter NSS business and the legacy WESCO Datacom business. But mix wise, it's substantially driven by the legacy Anixter NSS business. And so the secular growth trends really weigh in heavily there of the three businesses, that's the one that has -- in terms of end markets, and performance against the end markets, the highest growth opportunity. So, you put that at the higher end of the range on a relative basis. UBS is next, Utility and Broadband Systems. Utility market is very stable. We've got a tremendous franchise business with pulling together the legacy, what used to be HD supplied and Anixter bought, and the legacy WESCO utility business, is really strong, broad service oriented business, we feel very good about utility. There's pent up demand for investment, we've talked about this at length in prior calls that we clearly see that in the future. And broadband is also part of that business unit that faces an exceptional set of growth opportunities, driven by a 5G build out. And so feel very, very good about that. I put that one, kind of mid to higher end of the range in a comparative sense for in terms of where that ranks growth wise, both market and performance. And income ESS it's our largest business, and that's predominantly the legacy WESCO electrical business plus Anixter wiring cable, just to remind everyone.…

That's all very helpful and very much appreciated. I'll shift to one follow up question here to drill down a bit more on the first quarter. So we don't have official guidance in terms of the outlook here. But I would ask for any kind of color you could give us on margin expectations. It sounds like there are some crosscurrents with some incremental synergy capture, and then with the offset of some of the incremental costs. And I think specifically, you called out we broke up the 150 for the full year and 50 COVID-related that's already in Q4, but a 100 on an annualized that has yet to hit. And so presumably some of that will offset in Q1. So anything you could frame for us there in terms of the incremental possibilities or maybe even just a margin bridge first quarter year-on-year, or maybe first quarter sequential, anything to just calibrate our expectations would be helpful. Thanks.

Yes. Tommy, it's Dave Schulz. I appreciate the question. The one thing that I would call out is, if you look historically at the WESCO business, the Q1 is primarily our lowest adjusted EBITDA margin quarter of the year. Also in Q1 of 2020, we did not have the COVID-related cost actions, so that will create a little bit of a different comparison versus Q3 and Q4 going forward.

And Q2.

And Q2.

Literally Q2.

Thank you. I'll turn it back.

The next question comes from Steve Barger with KeyBanc Capital Markets. Please go ahead.

Hey, good morning, guys.

Good morning.

John, you said this is the strongest management team in WESCO’s history. And you also said you have high confidence in upside to sales margin and free cash flow. But you decided not to build that into the 2021 guide. I just want to make sure I understand the message. If your confidence is that high, why not push the organization to accomplish that via stated goals?

Internally, we've got targets that well above our external target. I've already said that. We've been very clear. Let's think back on how the last 13 months have unfolded. I mean, it was literally just a year ago, January, that we struck the deal to and got an extra board approval. They approved the WESCO bid for Anixter. It was only a few months later, well before it closed, that we put out three year target. We put a three year targets on cost synergies, on margin expansion, EPS growth, as well as free cash flow generation. We closed the acquisition on June 22. We report our second quarter results, that includes a nine day stub period. We're well into the integration because we had started aggressively integrating plant integration planning pre-close. And then we shot out of the integration. We had a flawless, we use this term flawless day one close. Look at our third quarter results, very, very strong, versus what our expectations were. We beat our own expectations. Remember, we're driving the higher targets internally. And what we did was we were realizing the capture to on track with higher target levels. One quarter, first full quarter under our belt, we raised our guide around the synergies, and we raised them substantially. We went from $68 million year one to a $100 million, we went from $200 million in year three, to $250 million, substantial raise. Here we go through Q4, we absolutely delivered what we said. If you look our -- Q4 actually came in a bit stronger than what we had signaled. We did have guide out there. But everything we signalled came in stronger than we thought. We never thought we would have backlog build that strongly. We have the sales came in stronger, margins were solid. We have a record backlog and we had exceptional free cash flow. We are close to $600 million of free cash flow little under in our first full year. It didn't even include fourth quarter of Anixter yet, it included two quarters of Anixter. So that gives us the confidence that we're coming into 2021. What we don't control is the macro. So it's a winded line up to say what is out there that is out of control. We don't control is the macro. So, there's still enough uncertainty around that. We reinstate as a guide, we put a guide out there, and we think this is an appropriate guide. And we have continued to drive the internal targets that are above our external commitments with substantial margin. And that's what gives me the core the fundamental confidence.

So the key take away from that being that if the macro comes in the way you may expect internally, then you would expect to significantly outperform the guidance that you've put out today to start the year, is that fair?

You're trying to get me to guide to guide. I'm just going to tell you that which I'm not going to do, because we just put a guide out there. But I think I will tell you that, again, we're driving internal targets well above our external commitments, I said well above. The organization is lined up for that. We're super excited about this trend of combination. We feel great about it. And it's our intent to deliver upside. With that said, we think we set the appropriate guide, given all the considerations, most importantly macro.

Okay. And it's the streets job to make best guesses on macro conditions and whatever company info is out there. And we'll never get it right, exactly, of course. But, this time, there was obviously a sizable disconnect between expectations and how WESCO is looking at earnings power. Any thoughts on how we can improve the messaging so we don't have this kind of one day volatility going forward?

Look, you asked me directly, if we were -- we didn't have a guide out there in 2020, like most companies. We didn't guide Q4, but we were very clear on the temporary cost actions coming back in. And so I think that alone, plus we were also very clear about all the other aggressive actions we were taking on the cost structure. And so, I think that my message is that, versus what we expected and what we said, we absolutely exceeded our expectations in Q4. We didn't have a guide for 2020, we didn't have any signaling whatsoever. And I think just that kind of SG&A, if it wasn't separate for Q4, in the absence of a guide, it gets extrapolated into 2021, I understand that. I think this is important to -- we are working aggressively to be as transparent as possible. We've got multiyear targets out there around the transformation. And we're going to continue to be report our progress against that very clearly. We think we're improving in that regard. Give us that feedback. We'd love to hear it. If you've got some other suggestions on how we could even be more clear about how we're performing against our expectations, we'd love to get those inputs. We've got Leslie on board leading IR for us now. She's an outstanding addition, and look forward to continuing to improve in that area. We're all focused on continuous improvement, lean as part of our culture as you all know.

Thanks for the time.

The next question comes from Chris Dankert with Longbow Research. Please go ahead.

Hey, morning, guys. Thanks for taking my question. I guess coming at this a bit of another way, thinking about the first quarter SG&A. I mean, looking at that step up from the fourth quarter. I mean, if we were to kind of baseline the first quarter SG&A in the $630 million range, is that in the right ballpark? Just trying to sight [ph] how that $100 million rolls on and obviously, it's got to be first half weighted, correct?

Yes, Chris. The way to think about it is, we called out very specifically the $50 million, that's primarily a Q2 and Q3 comparable. But obviously, we are not -- given the results of the company and after we integrated with Anixter, one of the other issues is that we do have this issue about the restoration of bonuses, sales commission and the like including some benefits and other inflation that is going to be consistent throughout 2021. And so I think as you're thinking about how to frame that within the quarter, again, I think that you're going to see outside of that $50 million in Q2 and Q3, relatively consistently spread across the quarters.

Okay. Well, I guess, the $100 million beyond the COVID-related $50 million. I mean, does that actually a make hole for incentive comp last year? Am I understanding that correctly?

That is correct. And so when you take a look at -- we did not meet our board approved plan. And because of that we did not accrue nor are we planning to pay out at target compensation levels for 2020. Now, that's been rolled into our numbers, we did speak to that in some of our earnings calls. And again, this is consistent with what we've done historically, particularly coming through the industrial recession, where, we're not hitting our targets, we're not paying the incentive compensation, our sales force is not getting, their bonus payments consistent with previous years. We built that all in back at target 100% payout for 2021.

Okay, okay. Thank you for the clarification. And I guess a more optimistic note. In the slides, you guys highlighted re-shoring as a positive driver. Is there anything tangible to offer on that dynamic? I mean, are we seeing actual projects coming through at this point? And thanks for the color there?

I will say that we're having a lot of discussions, obviously, it's virtual. A lot of discussions with customers, they're evaluating their operations. They're evaluating their supply chains in particular. And I’ve spoken about this at length really, over the last couple years. But this has really been a real catalyst, this global pandemic. We're looking to, obviously, streamline, get efficiency, get supply chain cost out of the supply chain, let's say. But they're also looking at inherently supply chain risk and that's what's driving them to look at re-shoring. I don't I don't want to call out any specific examples, per se, we are having those discussions with customers. They're sharing their plans and views with us. There's been a few examples. But again, I'd have to get specific, which I can't do on this call. But do I think that there's a potential for a broader trend there, and kind of something that could be a meaningful driver of incremental growth opportunities in North America? I do. I do. Net-net I do. I think, if one thing the global pandemic did, it put a spotlight actually a microscope on the global extended supply chain, and the fragility that was inherent in some of those. I'm talking the whole supply chain. And so just thinking about supply chain risk and integrity, it's a big driver. And if those supply chains can be shortened, and which really is the impetus behind potentially re-shoring it changes their risk profile of the supply chain.

Understood. Thanks for the time, guys.

This concludes our question-and-answer session. I would now like to turn the conference back over to John Engel for any closing remarks.

Well, thank you all for your time today and your support. We have numerous follow-up calls that have already been scheduled. Dave and now Leslie and Will are available for your follow-up discussions. Have a good day and please stay safe and healthy. Thank you.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.