Hello, and welcome to WESCO's Second Quarter Earnings Call. [Operator Instructions] Please note that this event is being recorded. I would now hand the call over to Scott Gaffner, Senior Vice President of Investor Relations to begin.

Thank you, and good morning, everyone. Before we get started, I wanted to remind you that certain statements made on this call contain forward-looking information. Forward-looking statements are not guarantees of 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 related on this call speaks only as of this date, and the company undertakes no obligation to update the information to reflect the changed circumstances. Additionally, today, we will use certain non-GAAP financial measures. Required information about these non-GAAP measures is available in 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, WESCO's Chairman, President and Chief Executive Officer; and Dave Schulz, Executive Vice President and Chief Financial Officer. And now I'll turn it over to John.

Thank you, Scott. Good morning, everyone. It's a pleasure to be with you today. As you saw from the earnings release earlier this morning, the beat goes on in terms of the value creation of WESCO's good new business model as we passed the second anniversary of our transformational combination with Anixter. Our second quarter results were exceptional. We once again set new company records for sales, backlog, margin and profitability. Importantly, leverage is now back within our target range, and it's a full year earlier than what we guided the market to expect after we completed the Anixter merger in June 2020. Our momentum continues to build as we outperform the market and deliver superior value to our customers. The power of our newfound scale, expanded portfolio and industry-leading positions is made clear each and every quarter. Strong demand in our end markets continues. Each of our 3 strategic business units again delivered double-digit sales and profit growth in the quarter, driven by the ongoing success of our enterprise-wide cross-selling and gross margin improvement programs. Overall, we delivered impressive organic sales growth of 21%. Record profitability of 8-plus percent adjusted EBITDA margin, which is the first for WESCO now to deliver above 8%, a very important month and adjusted EPS growth of 59% versus the prior year. You will recall that we substantially raised our outlook for the year after our excellent first quarter results. As a result of our outstanding second quarter results and the strong execution across our business, we are [indiscernible] raising our outlook for 2022. Among this raise, I want to highlight that our increased profitability continues to fuel our investment in advanced digital capabilities, which is expected to result in an even higher level of performance, operating efficiency and customer loyalty. Dave will review…

Thanks, John, and good morning, everyone. Thank you for joining our call. I'll start on Slide 8 with a summary of our second quarter results compared to the prior year. As John mentioned, second quarter sales were a record and cross-sell in the quarter exceeded our expectations. Our ability to cross-sell WESCO and Anixter products and services contributed more than $200 million of sales in the quarter and we continue to benefit from price. On a reported basis, sales were up 19% over the prior year. On an organic basis, sales were up 21% as differences in foreign exchange rates represented a 160 basis point headwind in the quarter. We estimate pricing added approximately 8 points to sales growth, in line with the first quarter with the benefit primarily in our EES and UBS businesses. The CSS business saw a low single-digit benefit from price and improved sequentially. Supply chain challenges have continued to impact certain pockets of our business. We estimate that the lack of availability of certain products from our suppliers reduced sales by approximately the same amount as in the first quarter of the year. We continue to strategically invest in inventory in the quarter to address these challenges as well as support our strong backlog of future sales growth opportunities. Backlog reached another record level this quarter and was up more than 10% sequentially from March and up more than 80% from the prior year. Each business unit posted backlog increases of more than 60% above the prior year. As we start the third quarter, demand has continued to be strong. Preliminary July results are encouraging, with sales up approximately 17% year-over-year. Gross margin was our highest ever at 21.7% in the quarter, up 70 basis points versus the prior year and up 40 basis points…

Ladies and gentlemen, please hold the call will resume momentarily. You may resume.

Good morning, everyone. It's Dave Schulz. We apologize. There was some technical difficulties with our service providers. So I'm going to point you back towards Slide 11 of our webcast deck. So turning to Slide 11. Sales in our CSS segment were up 12% versus the prior year on an organic basis. We saw a strong growth in both Network Infrastructure and Security Solutions operating groups driven by growth with security integrators, cloud applications and wireless as well as data center and hyperscale projects. While pleased with these results, CSS sales growth was not as robust as EES and UBS primarily due to ongoing supply chain constraints in certain pockets of the industry that we discussed last quarter. We are helping our customers effectively navigate these challenges. And additionally, pricing in CSS with a low single-digit benefit versus the prior year but did improve sequentially. Backlog in CSS increased 7% sequentially from March to another record level, reflecting continued strong demand driven by the secular growth trends in our end markets. Profitability was also strong with adjusted EBITDA of 9.4% of sales in the quarter, 40 basis points higher than the prior year, driven by operating leverage, integration cost synergies and the execution of our margin improvement program. Turning to Slide 12. Organic sales in our UBS segment were exceptionally strong, up 29% versus the prior year on an organic basis. Utility demand has remained consistently strong as both our investor-owned utility and public power customers continue to invest in grid hardening and modernization. Sales growth in our broadband business was also strong again this quarter, driven by continued demand for data and high-speed connectivity, including requirements for home-based applications. We continue to benefit from sales activity related to the federal government's Rural Digital Opportunity Fund. Backlog in UBS was…

[Operator Instructions] Our first question today comes from Deane Dray of RBC Capital Markets.

First of all, I think your service provider might need to be eligible for that broadband upgrade with the rural digital opportunity fund.

I love your sales lead, Deane.

And then secondly, a big welcome to Scott. Scott and I have a lot of history together. I've seen them in action. I'm confident you'll be successful. So congrats, Scott.

Thanks, Dave.

John, maybe just to start off, there's such anxiety right now about a slowing going on in -- because all the financial markets are swearing it's happening. But if you look at any of the metrics you're putting up, you're not seeing any sign of a slowdown as well as that Page 6 slide tells you all these long-term drivers that you benefit. And it's not just a post-COVID burst of activity, but there's just -- we see a long ramp here. Take us through at the margin kind of real time what's going on in terms of product availability, project delays, anything that you're seeing of the daily stock and flow business? Any kind of real-time color would be helpful.

It's a great question, Deane. We are not seeing any indication in any of the array of leading indicators and KPIs we use in terms of slowdown occurring with respect to the new WESCO. WESCO Anixter combination, you look at our backlog. If you look at our opportunity pipeline, that's comprised of large degree of cross-sell synergies. You look at our daily sales and margin momentum you look at it sequentially, there's normal seasonality. We are just everything -- the 1 word I would use, I use this to [describe] Q1. It's true for Q2, accelerating. So it's not even -- we're just seeing an acceleration. This is the strongest quarter that WESCO has ever delivered. I send that in Q1, we delivered at encore in Q2. At the sales [forward] to July, preliminary sales number that Dave outlined is still exceptionally strong. Our book-to-bill ratio is above 1.0. So again, and that's the latest set of data. We're seeing [indiscernible] few days in August, that's July results. I know Fastenal just reported this morning, and their daily sales results represented a sequential uptick in July versus June. So I just -- we are seeing, again, just very strong I'll call it momentum, and it's really the power of the combination. In terms of your supply chain question and stock in flow specifically, I would say we still have an array of supply chain challenges we're managing through. I'm very proud of how the team is doing that. In a few areas, it's gotten incrementally better, but I would say, and I know your words in it was kind of at the margin, not material yet, but we're starting to see some improvement in a few select categories that were more challenged as a result of supply chain constraints. And that's a bit encouraging. With that said, as Dave outlined in his commentary earlier, we still saw a couple of points, consistent with Q1 of supply chain throttling our top line, so it would have been that much better. And so that's kind of what I would signal. I just -- the supply chain is healing, but it's -- and I did share this in the last few quarters, we thought it would take a protractive period for that healing to occur. I mean it's -- and demand is still outstripping supply from our perspective. So hopefully, I addressed your question, Deane.

Absolutely. That's great. Really good to hear. And then just as a follow-up for Dave on free cash flow. And look, we are this everywhere across the industrials in order to fill this big demand, you got 80% backlog up. You've got to take on more inventory. We get that and then higher sales, higher payables. So 2 questions. One is anything in the payables that is unusual, like past due or anything like this some assurances there. And then secondly, on the inventory. There's some misperception as once you put this to res that somehow WESCO is a bit like target that you put inventory on the shelves and you hope customers come. You're project-based. And the inventory that has been committed to by the customers for these projects, the customers are on the hook for that. You're not adding speculative inventory. Maybe just address that in terms of the certainty of that inventory that you're carrying?

Yes. Thanks, Deane. Let me address your second question there on inventory. You're absolutely right. So we have been taking in inventory given the strong backlog, which are committed to orders, and we do have terms and conditions. So that inventory will be shipped to a customer. We have not seen any cancellations in the backlog. So we're very confident in the quality of the inventory. Going back to your first question about the quality of our net working capital, including payables, we actually improved about half a day versus the prior year quarter. We've not seen any degradation in the quality of the payables. We run our consistent process. So again, nothing out of the ordinary in terms of our net working capital or the quality of our net working capital again, our free cash flow guide coming down, specifically for the accounts receivable impact that we expect going forward and the strong sales that we expect in the second half of the year.

Great. We call that a high-quality problem.

The next question comes from David Manthey of Baird.

You noted 8% inflation and there are some differences in how different companies measure the price benefit to revenues. Could you -- first of all, could you tell us, Dave, what is your methodology. And then second, could you talk about which product lines where you're seeing the most inflation? You mentioned CSS is seeing the least. But is it right to think you're seeing it mostly in the heavy gauge wire and steel conduit and less in finished goods and switch gear general supplies, that sort of thing?

Yes, Dave, let me start with the calculation. I mean, we essentially looked at changes to the pricing and what we've been able to pass through to our customers to calculate that 8%. So it really does start with what are the suppliers passing on to us. We then, again, take a look at that and how do we pass that through to ensure that we're appropriately getting paid for not only the product, but the services attached to the product that we're delivering to our customers. In terms of the overall inflation, we have seen spikes over the last, call it, 12 months that are pure commodity related. But I would tell you that a lot of the price increases that we're seeing are relatively consistent across all product categories primarily given the inflation that our suppliers are seeing outside of just the commodities. So very clearly, on some of the more commodity based, that's going to move with the market. And all of our suppliers are also passing through the increases that they're seeing on labor, increases they're seeing on logistics, transportation and their ability to service the orders to us. So I would tell you that it's across all the product categories. The one area that we called out was we're not seeing the same level of inflation in some of the suppliers to our CSS business. We did start to see that pick up in late in Q1, and we did get a sequential benefit. We do anticipate that, that will continue to be volatile. But for the most part, we're seeing broad-based inflation across the board being passed through to us from the suppliers.

Okay. And just to be clear, Dave, are you saying that you look at specific SKUs this year versus last year? Is it just the same SKU, same SKU, same product? I mean there's different methodologies people use. I'm just trying to understand how to read that 8% number.

Yes. We're looking at it by product category because we don't always sell the same SKU consistently from quarter-to-quarter year-over-year. So we're looking at the group of product categories within SKU family in order to calculate that 8% number this quarter.

The next question comes from Sam Darkatsh from Raymond James.

Two broad topics, if I could. The first would be about the new $1 billion repo authorization. I don't recall it being in your prepared remarks or at least certainly wasn't accentuated. First, can we infer from this that you find that your own equity is considerably more attractive than any prospective M&A opportunities? And then secondly, rightly or wrongly, the market generally perceives 3 turns of debt leverage, I guess, the point at which the stock becomes high beta. And knowing this and knowing the broad concerns of an industrial slowdown, are you really looking to do more substantial repo when you get under 3 turns? Or will your repo plans be more based on simply the absolute value of the equity?

Sam, it's Dave. So I appreciate the question. And as you mentioned, we do take a look at multiple factors when we make decisions. We did not purchase any shares in the second quarter. We do have the authorization that was approved by the Board back during our May Board meeting. In terms of how we're thinking about this right now, we just got under the target leverage range. So we're at 3.4 turns. We actually increased our borrowings against our facilities to support that net working capital and the strong sales growth. So right now, we're still focused on being able to drive down that leverage in the near-term. Over the long term, we'd expect our leverage to be closer to the middle of that 2 to 3.5 turn range. And so again, we want to continue to focus on that. In the immediate term, we always are looking at the equity value against other uses of our capital. And right now, we have been focused on making sure that we get that leverage down within the target range. And then from there, we'll continue to evaluate those opportunities and what we believe will drive most value for our shareholders.

My second question topic is kind of piggyback on what Deane was getting at with respect to the inventory. I mean ultimately you -- as virtually all of your peers are going to be indicating that you're going to be working your inventories lower. You may not have inventory risk per se, but that drawdown is going to pressure your vendors volumes, it's going to pressure their pricing, it's going to pressure your rebates and so on and so forth. So at what point do you believe that your gross margin expansion will end? And how do you manage price cost if you lose the air cover of no longer seeing announced price increases from your suppliers going forward?

Sam, we've been through numerous cycles. We've got a very seasoned management team. And if you look at the operating leaders of the 3 businesses myself and Dave, we've been through numerous cycles. I think we know how to manage this company through all stages of the cycle. We have exceptionally high confidence in the cash generation characteristics of our model through all phases of the cycle. And just to touch on that earlier point, if you look at all the working capital growth, through the first half, it's really all sitting in accounts receivable that we are confident will collect from customers. Relative to margin, we have an enterprise-wide gross margin improvement program that's underway. If you look several years leading up to the merger close, Anixter posted consistently across a 9 to 10 quarters gross margin expansion against the backdrop that was very challenging in terms of getting margin. When you look at the other publicly-traded distributors, they were facing margin compression. And that's continued. And we took that enterprise-wide gross margin program that was a top priority in the first 6 months post-merger close. If we wanted to make some refinements we looked across WESCO. We made some additional refinements, and we now have been executing that enterprise wide. And that's been in place, and for the better part of 2021, it's so far here in 2022. If you take a look at our gross margins, we're building very strong momentum on the gross margins. And so we've got confidence that there's a lot -- there's a long runway left in terms of gross margin expansion. We don't guide on that anymore, but we clearly see strong combinatorial contributions of gross margin expansion plus operating cost leverage, both of those were focused on -- laser focused on…

So to paraphrase. Gross margins in the back half continue on its favorable trajectory despite the inventory drawdowns?

We're not seeing any issue in our margins. Dave mentioned it, I'll amplify it. Our margins in July, the beat goes on. Very consistent with how we ran through the second quarter. So what is -- as I mentioned earlier, Sam, and you'll recall this specifically. We made some core changes as part of the gross margin improvement for this enterprise one in terms of profit statements for the sales force. So this -- the additional [indiscernible] for performance there, I think is very significant fruit. And they're myopically focused on selling the value and benefiting from continuing to drive the margin expansion.

Terrific to hear and a terrific performance in the quarter. Onward and upward.

The next question comes from Nigel Coe of Wolfe Research.

So yes, I just had a question, just maybe sum off on the [indiscernible] company accruals. I just want to make sure I understand how this works. So obviously, you've topped up the full year payout. So you have a catch-up for 1Q and 2Q, and then third quarter, fourth quarter would then be a run rate, but 2Q would be a catch-up for 1Q. Is that right, Dave?

Yes. Nigel, in 2022, we trued up incentive comp above target payouts in Q1 as well as in Q2. So there's only a slight increase sequentially on that short-term incentive plan accrual.

Okay. And can you help us where is that in dollar terms now running for the full year compared to where we were back in January?

Yes. So back in January, when we provided our initial guide, we called out that if we pay at target, for 2022 against 2021, where we did pay out above target, that it was roughly a 30 basis point tailwind. Well, that tailwind has essentially going away. I mean, we are performing much better. Therefore, we are accruing appropriately for that short-term incentive compensation. The dollars year-over-year are not materially different than what we experienced in 2021.

Okay. But as [indiscernible] in 2023 is more back on target. We've got a 30 basis point tailwind into 2023. And that's sort of my real question is, as you go into FY '23, assuming that the volumes are positive in '23, that's obviously a big if, but based on the backlog doesn't seem unreasonable. Is there a scenario where margins could be down in '23? And I'm thinking here about maybe some price cost headwinds. I don't know what else, but is that a scenario that's even on the table?

Well, I would tell you, Nigel, similar to what John said before, I mean we've been through these cycles in the past. We know how to operate. There's always things that are going to be impacting the overall margin. As we've said in previous years, we're going to be looking at market inflation rates on our people cost. So we've got to have enough top line growth to offset that and hold the margin. So clearly, in a volatile economic environment, if one was to take place, we would have to pull the appropriate levers in order to protect our margins going forward. We've done it before. We're focused on making sure that we continue to drive value long-term for the shareholder. But again, we think that we've got a good setup for 2023 as you mentioned. The incentive compensation would be adjusted back to target as we think about our plan for next year.

I would add to Dave's point. I would say the setup for 2023 is excellent as we sit here in the early part of the second half. We just substantially raised our full year guidance for the second time for 2022. We have very strong momentum. We raised the sales synergy target substantially again at $1.2 billion. Our sales synergies in the second quarter of $200 million exceed our original targets that premerger close. This is the breakout growth opportunity. I think that is really showing itself as we establish this track record of success over the last 8 quarters. Our backlog continued without any normal seasonality and is in a new all-time record level to sequentially, which is a great setup, not just for 2022, but in particular for 2023. Our opportunity pipeline is evidence by raising the cross-sell target is the largest we've ever seen, continues to grow. We think we're outperforming the market significantly. We're the market leader, undisputed market leader in our core markets and to the extent that the cycle gets a bit more challenging, customers will want to double down even more with their strongest supplier partners, supply chain integrity and resilience, demand is still outstripping supply. And it's a really important point. And look, I don't -- I think inflation continues. I think inflation continues at a meaningful level through 2023 because the sources of inflation is demand outstripping supply first and former. Secondly, everyone's missing that labor is a constraint. It's not just the materials in the supply chain. It's labor as well. I think you have public infrastructure spending with plan that will stoke demand even further. And we've seen none of that in our numbers yet. So I did want to touch upon this. It's really important. Take a look at where we are in our full year guide, our full year guide for 2022 now is above current analyst consensus for 2023 on the top line third point. Second point, we expect to grow in 2023. That's the answer.

The next question comes from Tommy Moll of Stephens Inc.

John, I wanted to start on the big data theme. You've given some transparency into the digital and IT investment recently. So I'm curious what inning we're in for that investment cycle. And then on the flip side, when you start to monetize and unlock some of the revenue and margin benefits from these investments. Have you even started to see some of those benefits yet? Or when do you anticipate that those would show up in a meaningful way where we'll see it in the P&L?

Yes, thanks for that question. It's outstanding. We are in the baseball analogy. We're in the very, very early innings of seeing the benefits. I'll start with the benefits. We've highlighted a few areas where we've apply digital for our business in terms of digital products. We buy some applications over the last couple of quarters. I will tell you that we plan on kind of be more expressive with respect to our total digital transformation at our upcoming Investor Day in early September. We're very excited about that. That will be our first Investor Day since Anixter and WESCO team together and since -- onset of pandemic. But back to digital. We announced a 3-year integration program where we brought these 2 strong leading companies together to form the new WESCO back in June 2020. And we also said we're in the midst of a digital transformation that we have parked upon. And this was quite frankly the catalyst and the ability to put these 2 large companies together gave us the opportunity to invest in the digital transformation like either individual -- either company could individually. That is a longer to, and that is roughly a 5-year process. And so we're 2 years into the 3-year integration period. We're 2 years into the 5-year digital transformation period. The investments are laid out. Dave spotlighted again in his commentary what we're investing and showing them both in capital spending on a different areas of the P&L statement. But it is our synergies and top line results that allows us to fuel these investments. I am incredibly bullish on --or long-term, mid- to long-term growth prospects and the transformative nature of what we're doing in digital, what it will do for us and our ability to serve customers. more efficiently, more effectively unlock other avenues of growth and other areas of monetization that forms the basis of new business model as we increasingly tap our big data. Super excited about it. here's the great news. It's not in our results yet. The investments are in our results, but the results in terms of meaningful sales growth and margin expansion are not in our results yet and improved. A dramatic acceleration of working capital. That's not in our results yet. So stay tuned Please at Investor Day, join us. and you'll get a much better sense of our 5-year digital transformation journey. This as strong as the story has been thus far. And I think it's been exceptional, the late quarter since we came together. We're in the 2 years, the 3-year integration period of point, and the results are exceptional with a series of increases along the way. The digital transformation story in a whole higher -- another order of magnitude, and that futures that are exceptionally exciting.

I appreciate that. As a follow-up, I just wanted to ask on CSS. Organic sales trended quite -- the trend was quite strong in the quarter, although it was well below the other 2 segments. You called out supply chain as one headwind there. So I wonder if you could comment on that. Was that the primary delta in that segment's growth rate versus the others? Or would there be --

Yes, another great question. Let's look at the [indiscernible] over really, let's say, the last 4 to 6 quarters versus the other 2 businesses. I think outstanding secular growth trends, leading value proposition, global footprint and only outstanding business, it's a franchise. It's terrific. It has been supply chain constraints. It has been supply chain constraints. My comments and Dave's comments have been very positive and bullish on the middle and long-term prospects of that business. That's unchanged. I'm as bullish as ever. In terms of the applications that we have access to in our total solution offering. Specifically with respect to the momentum vectors, I couldn't be more pleased with how CSS picked up. Everything is relative in light of business. I'd ask you to look at this sequentially. We've seen momentum building in CSF. The backlog growth is exceptional. It's at a higher rate than EES, not quite the UBS backlog growth rate, but it's exceptional. And now the sales and margin is beginning to accelerate as the supply chain continues to heal. So that is the story here. And again, it is an accelerating vector that we're on with CSS and I'm very pleased with the pickup again now delivering 12% growth in the quarter.

And the final question of today's Q&A session will come from the line of Ken Newman of KeyBanc.

John, I think you touched on it briefly in a prior question, but regarding the increase in the cross-sell and share gain synergy capture for 2022, do you have a sense of just how much of those benefits have already been realized within the current guidance? I'm just trying to get a sense of how conservative that portion of the sales guide increase is? Just where do you see the momentum for those synergies coming up even further?

I'll let Dave handle that.

Yes. So when we think about the bridge in our sales outlook from our previous quarter call, the success that we're seeing in share gain and cross-sell, we called it out as 3% to 4% of the growth previously. It's now approximately 5%. And I think that as we look at Q2, we're confident that we increased share. So we believe that we are taking share, but really the benefit of the cross-sell. And we're now expecting that to be combined approximately 5 points of the growth within our outlook for 2022. So again, really pleased with the results. As we mentioned earlier, it exceeded our expectations in the second quarter. We're also very diligent about looking at not just the pipeline, but the backlog of the cross-sell, which is one of the reasons we had confidence in taking the number up for the target this quarter.

Understood. And then just for my follow-up here. You talked about the balance between share repurchases and working capital needs and keeping the balance sheet and that target leverage, but I'm curious if you have any comments on just how you look at the priorities between repurchasing the preferred shares and the common shares, understanding that there are some caveats and how much you can repurchase from that preferred bucket.

Yes, very clearly, there are some constraints on repurchasing the preferred. It will come back down to best value. And if we take a look at where the preferred is trading and the premium that would be required to buy back those shares, there are some make-whole provisions on that. We take a look at that just from the pure economic perspective, whether it would make more sense to buy back common stock or preferred and we are able to buy back both classes within the authorization. It purely will come down to the economics at the time.

I think what's important to also understand, and I know we foreshadowed this earlier in the year, and I want to foreshadow it again. We think we have a new company we've created clearly. That's fundamentally different characteristics. It's mix shifted to higher growth markets, the execution, it's showing up in the execution and the results thus far and we think we just did fundamentally shifted this company and a different value creation trajectory, let's say, than either prior company ever was on in their history. In terms of cash utilization, cash generation capability over the mid- to long-term and cash utilization priorities. That's something that we've not outlined was a longer-term view since we put these 2 great companies together, and that is something we are going to absolutely address at our upcoming Investor Day. We foreshadowed that earlier, and we will do that. And I think it's important. Getting the authorization in place for the share repurchase was vital because we did not have an approved authorization in place. And we got -- we put that in place ahead of being back within our target range. And we did that purposely. We will always need to make sure we have an ongoing share repurchase authorization in place. That's the bottom line. The cash generation of this new WESCO is exceptional. I'm not going to address it in this earnings call, but you've got to take a look at when we outlined this at the Investor Day, the optionality in terms of the value creation levers we have going forward is unlike anything either company had in the past, and I represent a kind of a breakout opportunity for us, which we'll share with you next month.

I understand. Looking forward to it.

Okay. With that, I think we did go a little bit longer. I'm going to wrap it because we had, again, a technical difficulty where we lost connection here for a few minutes. That's why we went a few minutes over. I'll bring the call to a close. Thank you for all your support. Very much appreciated. As I just mentioned, we look forward to speaking with many of you in the coming days as well as at our upcoming Investor Day. That date has been set. It's September 7 in New York City. And as I mentioned earlier, this will be our first Investor Day since closing the Anixter merger, and it will be an excellent opportunity to learn more about our combined business and get to know our entire senior management team better. I hope all of you will be able to join us hopefully in person or at least virtually. Additionally, we're going to be participating in the Raymond James Diversified Industrials Conference in August and both the RBC Global Industrials and Morgan Stanley conferences in September. So with that, we've got many calls scheduled this afternoon and tomorrow, bringing you to a wrap. Have a great day. Thank you again.

That concludes the conference call. Thank you for your participation. You may now disconnect your lines.