Good morning, everyone, and welcome to the Distribution Solutions Group Q2 2022 earnings call. As a reminder, this conference call is being recorded. Now I'd like to turn the call over to Sandra Martin, Three Part Advisors, to provide instructions to read the Safe Harbor statement. Please go ahead. Good morning, ladies and gentlemen, and welcome to the Distribution Solutions Group Q2 2022 earnings call. In conjunction with today's call, we have provided a Q2 earnings presentation that has been posted on the company's IR website at investor.distributionsolutionsgroup.com. Joining me on the prepared remarks for today's call will be Bryan King, DSG's Chief Executive Officer and Chairman, and Ron Knutson, DSG's Executive Vice President and Chief Financial Officer. During the call, they will be providing an update on the business from an operational and financial perspective. Additionally, Brad Wallace, Partner and DSG Advisor, LKCM Headwater Investments, as well as operating company CEOs Cesar Lanuza, Russ Frazee, and Bob Connors will join the call for the Q&A session. Please note that statements on this call and in the press release contain forward-looking statements concerning goals, beliefs, expectations, strategies, plans, future operating results and underlying assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those described. In addition, statements made during this call are based on the company's views as of today. The company anticipates that future developments may cause those views to change. Please consider the information presented in that light. The company may, at some point, elect to update the forward-looking statements made today, but disclaims any obligation to do so. Management will also refer to non-GAAP measures, including adjusted EBITDA, adjusted operating income and adjusted diluted EPS. Reconciliations to the nearest GAAP measures can be found at the end of our earnings release. The earnings press release issued earlier today is posted on the investor relations section of our website. A copy of the release has also been included in the current report on Form 8-K filed with the SEC. This call is being audio webcast on the Internet via the Distribution Solutions Group investor relations page on the company's website. A replay of this teleconference will be available through 23 August 2022. I will now turn the call over to Bryan King. Bryan? Thank you, Sandy, and good morning, everyone. I'm excited to share with you our results of the combined Distribution Solutions Group organization. As Sandy mentioned, please refer to the slide deck that we have provided on our website to follow along with our commentary today. As you'll recall, we completed the merger effective 1 April 2022, by strategically bringing together three high-touch, value-added specialty distribution companies. First, I'd like to quickly summarize each of the operating companies under Distribution Solutions Group for any of our new listeners. Lawson Products is a leader in MRO distribution of Class C parts, offering vendor managed inventory services through its over 1,000 sales reps. Gexpro Services is a provider of supply chain solutions of largely C parts, specializing in developing and implementing VMI and kitting programs to high specification manufacturing customers. TestEquity is a leading distributor of specialized test and measurement equipment and solutions, electronic production supplies, and customized toolkits from leading manufacturing partners. In a moment, Ron will cover the financial details for the quarter. Let me start by pointing out a few of the highlights from the Q2 and also comment on some operational initiatives within each of the companies. For the combined companies, sales grew 34% to $321 million from both acquisitions and organic growth. Organic sales grew nearly 12% versus a year-ago quarter. On an apples-to-apples basis, this organic growth demonstrates the strength of the core businesses before taking into consideration our acquisition revenues. We reported solid organic growth across all three of the operating companies or segments. We generated almost $32 million of adjusted EBITDA for the quarter, which translates to 9.9% of sales. We are encouraged by these results as all three operating companies are performing at or above their expectations. While DSG does not provide formal guidance, we expect 2022 adjusted EBITDA margins to exit the year above 10%, as previously communicated. All three operating companies are experiencing an improvement in both adjusted EBITDA dollars and margins, which we remain strategically focused on. Each of the operating companies made significant progress that give us further confidence in our overall strategy and teams leading those businesses. The company's acquisition strategy continues to be a large part of our growth initiatives. During 2022, Gexpro Services closed on the Resolux and Frontier acquisitions, and TestEquity closed on the TEquipment and National Test Equipment companies. They also provide important complementary elements to adding incremental customer and supplier relationships. Looking at our pipeline, we are evaluating acquisition opportunities continuously for each of the businesses, and the funnel remains full. We've structured the M&A team to support each of the operating businesses to identify, diligence and close transactions that meet our criteria. As I mentioned, acquisitions are a significant part of our ongoing strategy. Additionally, the leaders at our three operating companies are collaborating to expand relationships with existing customers, and they are working together and with our teams and theirs to identify cost synergies where it makes sense. During our recent operating company leadership summit in Chicago, we identified specific work streams with near-term timelines for each of the three companies. The teams left those meetings with specific action items and accountability, meaning that specific leaders or owners are responsible for both delivering sales, synergies, and cost takeout opportunities. We are seeing near-term evidence of success, and I am confident that these teams will create significant and meaningful results to further drive DSG sales and earnings growth, accelerating value creation and sustainability of earnings growth for all shareholders. Before I turn it over to Ron, let me comment on a few operational initiatives at each of the three companies. First, Lawson Products. Lawson has done a nice job in growing and expanding its strategic customer relationships. This is a great area of opportunity for the organization, which we continue to invest in. Gross margins are on an uptrend, given many of the actions taken by the company. Under Cesar's leadership, there is new focus on protecting and expanding our margins, and we are diligently reviewing the best way to deliver high-touch service to our customers the way they want it while driving operating leverage across our resources. Additionally, Lawson continues to expand its distribution capabilities with upgrading its conveyor systems at the Suwanee, Georgia, DC location, doubling the size of its Calgary DC earlier this year, and changing processes within their network to better fulfill customer demand and drive efficiencies. Cesar is an inspiring leader, and he's putting in place a strong accountability and customer-centric sales culture with aggressive strategic growth initiatives and improved profitability objectives. Second, Gexpro Services. Gexpro Services is continuing to drive significant services segment growth with the acquisitions of Frontier, Resolux, and SIS. The renewables and technology verticals are well positioned for growth, especially with this Inflation Reduction Act. Gexpro Services completed price increases based on current supply markets impacted by increases in raw materials, labor, and freight indexes and inflation, and the teams have been able to maintain gross margin percentage throughout a tough inflationary environment. Finally, the Gexpro Services team continues to improve supplier rebates and extend payment terms via acquisition synergies. Finally, TestEquity. The process of integrating the TEquipment acquisition into the business is going well. We're seeing sales of combined product offerings gaining traction in the TEquipment business. Supply chain challenges are still affecting sales and delivery of the test and measurement product lines. The chip shortage has caused lumpy delivery from our suppliers and continued swelling of our backlog. Projections are that lumpiness in our inventory flowing from key manufacturers will continue into 2023. Inflation has had a positive effect on sales numbers as price increases from suppliers are passed on to customers in a timely manner. Customers are tending to push purchases ahead of price increases, which has helped us develop an increase in our customer backlog of orders. The outsourcing of the Test Chambers project is hitting its stride, and we are now starting to reduce our backlog while focusing on delivering products timely to our customers. A secondary production facility was brought online in July and will be shipping product in August. Soon, we also hope to start proactively growing demand versus just reacting to a replenishing backlog from organic demand. The electronic production supply of the business has shown continued growth for the third month in a row. We're seeing consistent demand growth in key areas on that side of the business. Our operating company leaders are keenly focused on improving their operations. We're excited to continue to share these activities with investors and also share our long-term strategic vision and plans as we work diligently to create long-term shareholder return. Now, I'd like to turn the call over to Ron to dive into the financials. Ron? Thank you, Bryan, and good morning, everyone. We're excited this morning to share with you the Q2 results of Distribution Solutions Group. While this represents our Q2 results, it is our initial quarter of presenting consolidated financial results of the three operating companies, Lawson Products, Gexpro Services, and TestEquity. Given that this is the initial reporting quarter of the combined company, let me comment on the required GAAP accounting presentation before we discuss our results. Please turn to page three of the Q2 2022 financial results presentation that we posted on our IR website of DSG. As you may recall, and that was disclosed in the proxy filed earlier this year, the combination of the three operating companies is required to be treated under GAAP as a reverse merger. Given the common ownership control of Gexpro Services and TestEquity by LKCM on a combined basis, they were deemed to be the accounting acquirer of Lawson Products. A few items to keep in mind as we review the Q2 results. The Q2 2022 results include all three companies for the full quarter. The comparative GAAP information for 2021 only includes Gexpro Services and TestEquity as the predecessor company of the accounting acquirer. The year-to-date GAAP information for 2022 includes Gexpro Services and TestEquity for the first six months, and given the merger date of 1 April, only includes Lawson Products from 1 April through June 30. For ease of comparing the results, the slides that we will be utilizing for the conversation this morning are adjusted for the pre-merger activity of Lawson Products. Now turning to slide five. Let me summarize the Q2 results. On a combined basis, we reported strong top line and bottom line results across the three principal operating companies. As Bryan mentioned, we reported combined organic sales growth of nearly 12%. To date, in 2022, we have closed on four acquisitions for a total of $180 million of acquired annual revenues. Broadly, the product demand remains strong with increasing customer backlog within TestEquity that will help in the future. We have also made good progress on realizing cost savings and cross-selling among the three operating companies with early wins on new customer business. Finally, our performance in all three operating companies was at or above expected levels. Turning to slide six, let me first discuss DSG on a combined basis. Consolidated sales were $321 million. Although not necessarily meaningful, this represents an increase of 139% on a GAAP basis, driven by the inclusion of Lawson Products commencing in the Q2 of 2022. Organic growth of the business and acquisitions made by Gexpro Services and TestEquity in both 2021 and 2022. On a like-for-like basis, with the inclusion of Lawson from a comparative basis, sales increased nearly 34% or $80.6 million over the Q2 of 2021, with $52.3 million coming from acquisitions and organic growth of nearly 12%. Second, reported GAAP operating income was $4.1 million compared to $5.5 million a year ago quarter. The Q2 2022 results were negatively impacted by the one-time merger related costs, higher stock-based compensation, and higher intangible amortization expense related to the fair value opening balance sheet of Lawson Products. On an adjusted basis, taking into account these items, adjusted EBITDA improved by $11.7 million to 31.7 million or 9.9% of sales. Operating income of approximately $5.7 million from acquisitions made in 2021 and 2022 drove about one half of that increase. Now moving on to slide seven. From a balance sheet perspective, we ended the quarter with $17.9 million of cash on hand and available liquidity of $85.9 million under our existing credit facility. We also reported approximately $406 million of outstanding debt, primarily as a result of consolidating the existing debt at the time of the merger, as well as acquisitions made by Gexpro Services and TestEquity during the first half of 2022. We ended the quarter with net debt leverage ratio of 3.6 x, in line with our expectations, given the acquisitions made during the quarter. As previously communicated, we intend to manage our net debt to trailing twelve months adjusted EBITDA leverage in the 3 to 4 times range. Let me now comment on each of the three individual operating companies. Within the 10-Q, we have broken down our segment reporting based upon the three operating companies. Let me first start with Lawson Products on slide nine. Please remember that since Lawson is the accounting acquiree, it is not in the GAAP reported numbers for the Q1 of 2022 or for the comparative GAAP numbers in 2021. Lawson Product sales were $107.3 million for the Q2. Please note that this excludes Bolt Supply as they are now included in the all other reporting segment. However, as a side note, Bolt Supply had a great quarter. Sales were up nearly 40% and adjusted EBITDA was 13.6% of sales. The Lawson segment sales grew 13.1% in organic sales over the Q2 of 2021 on an adjusted basis and 2.3% increased sequentially over the Q1 of 2022. The increase over a year ago was driven by strong performance within the strategic business, up 23%, Kent Automotive, up 30%, and the core business, up 11%, partially offset by government being down 8%. Of the 13% increase versus a year ago quarter, approximately 10 percentage points were driven by price. All of Lawson's growth during the quarter was organic growth through increased share of wallet with existing customers and new customer relationships, in particular within strategic or large accounts. Lawson realized an expansion of gross margins to 58.6% in the quarter before the reclassification of certain selling expenses into margin. Excluding the fair value step-up for the opening balance sheet amortization, adjusted gross margin was 60.1%, up from 58.2% a year ago quarter, and also up versus 58.2% realized in the Q1 of 2022. The improvement in gross margin is primarily being driven by price adjustments put in place in late 2021 and in the first half of 2022, as well as lower inventory reserves in the Q2 of 2022. Lawson’s GAAP reported operating loss was $2.6 million for the Q2, net of the non-recurring items previously mentioned. Excluding these items as well as for the previous quarters, Lawson's adjusted EBITDA improved to $9.4 million compared to adjusted EBITDA of $7.8 million a year-ago quarter and $8 million in the Q1 of 2022, primarily driven by the sales and gross margin improvements. Turning to Gexpro Services on slide 10. Total sales were $99.8 million for the Q2 of 2022. Of that increase, approximately $29.5 million was driven by acquisitions in 2021 and 2022. In 2021, Gexpro Services closed on the Omni, NEF, and SIS transactions. So far in 2022, Gexpro Services closed on the Resolux transaction earlier in the year and on Frontier on 31 March. Excluding the impact of these acquisitions on the Q2, organic sales grew by 6%. All of the end markets that Gexpro Services operates in are expanding, with the exception of some headwinds in renewables. The increase in aggregate sales was primarily driven by new customers, the expansion of existing customer relationships, and price. Reported gross margin for the quarter was 29.2%, unchanged from a year-ago quarter. Gross margins continue to be managed by the Gexpro Services team through strategic sourcing improvements, new supplier development, and the movement toward longer-term supplier agreements. These efforts have been partially offset by slightly lower gross margins of the recently acquired businesses. Gexpro Services adjusted EBITDA expanded to $11.9 million or 11.9% of sales as compared to $7.5 million or 11.3% for the year-ago quarter. Acquisitions drove approximately $3.7 million of the earnings increase. Lastly, I'll turn to TestEquity on slide 11, which also had a strong quarter. Sales for the quarter grew $30 million or over 44%. During the Q2, TestEquity closed on two acquisitions, TEquipment and National Test Equipment. Combined 2021 and 2022 acquisitions added $22.8 million of sales growth to the Q2, with organic sales increasing 10.6%, both in their test and measurement business as well as the electronic production supplies business. We anticipate that sales in the test and measurement business will be lumpy for the remainder of 2022, given some of this chamber supply chain challenges. Backlog has increased 2x from where we ended 2021. Thus, we have the customer orders and are able to ship product quickly upon the receipt of the product. However, vendor delivery has been inconsistent due to ongoing supply chain issues. Having this level of back orders will result in positive momentum as we move into the second half of 2022 and into 2023. On an adjusted EBITDA basis, the Q2 ended at 8.8% of sales or $8.6 million, representing an increase of nearly $5 million over a year-ago quarter. Of that $5 million increase, approximately $2 million of earnings was driven from 2021 and 2022 acquisitions that i previously mentioned. Before I turn the call back to Bryan for some closing remarks, let me just emphasize the strength of the Q2. With this being our initial quarter of reporting our combined results, we are very pleased with our progress and believe that we are on a strong path as exhibited by our sales growth and our adjusted EBITDA of $31.7 million for the quarter or 9.9% of sales. DSG realized solid double-digit organic growth across the platform, complemented by the strategic acquisitions. I'll now turn the call back over to Bryan. Thank you, Ron. I'll direct you to page 12. This page really speaks for itself, and I would echo Ron's comments that we have gotten off to a great start in our initial quarter of our combined companies. Q2 results demonstrated our ability to report strong growth, both by acquisition and organically, and to drive substantial adjusted EBITDA. We remain confident about the opportunities to scale the business and believe that while supply chain stabilize, customers are gonna continue to look for ways to streamline their businesses and leverage their operating results. Our businesses, through Lawson Products, Gexpro Services, and TestEquity, are well-positioned to partner with those customers to accomplish their goals. We're expanding wallet share and partnering with our customers to support them with comprehensive supply chain solutions. With that, I would like to open up the line for questions. Operator? Certainly. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We do ask, though, while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Please hold while we poll for questions. Your first question is coming from Kevin Steinke from Barrington Research. Your line is live. Good morning. Good morning, Kevin. I wanted to ask about you mentioned progress on cross-selling among the operating companies. When we think about cross-selling, and you have conversations with your customers about maybe bringing services of one of the operating companies into them that they hadn't been using before, is that something typically they haven't been outsourcing before when you're able to cross-sell, or are you displacing a competitor? I'm just wondering how that dynamic typically works or if it's just kind of, you know, all different situations, I assume maybe depending on the customer. Yeah. This is a great one to let Bob tee up on, as he and Cesar have been working closely on those two businesses collaborating on some customers. Bob, why don't you hit it? Yeah. Thank you, Bryan. It's actually a great question. I can tell you know, for Gexpro Services, we're there at the, you know, blue chip OEMs every day, managing their production line, bringing our value-added services, VMI, supermarkets, Kanban systems. You know, I've been doing this over 30 years, and customers continue to come to myself and Ray Herzog, who's our Chief Commercial Officer, asking us to expand their service capabilities and include MRO. For us to do that independently, it would be significant investment, not just in terms of trade working capital, brick-and-mortar, and subject matter expertise. It's just natural for us to tap Lawson, who has best-in-class VMI capabilities to supplement our service offering. What's surprising to us is we did expect the customers to be well-received in terms of seeing the total platform. What shocked us is how many quick conversions we got right off the bat. Now we're literally going through the top 100 accounts and looking at the opportunities with Lawson and Gexpro Services as well as TestEquity to pull the full complete platform together. Customers, mostly what they're looking for, it's not just supplier rationalization, but they're looking for total cost of ownership improvement. When you can bring packages together of production line services and MRO, as well as test and equipment, which, you know, their strength is on test and R&D, you basically put together a package service offering of products and services that can really enhance the value proposition, not just of the business, but the TCO to the customer. All right, great. That's a lot of helpful color. You know, I guess, I didn't get on immediately at the beginning of the call, but I don't know if it doesn't seem like it, but have you seen anything indicating that economic uncertainty or economic slowdown is impacting any of your businesses at this point? Yeah. Good morning, Kevin. It's Ron Knutson. I'll comment on this, and then certainly the other three CEOs can jump in as well and i would say really across the businesses, we've really not seen a slowdown in terms of unit volume being shipped out of the service centers and the distribution centers. You know, it's interesting as we look at our internal metrics. We're not seeing really much indication of a slowdown currently i n fact, even the increase in the customer backlog that we referenced on the prepared remarks for TestEquity is an indicator that there's still strong customer demand that is out there. We're not seeing anything here on the surface that would indicate a slowdown, but certainly are conscious of commentary that's out there, and we're keeping close tabs on it a s we sit here today, we've not seen anything indicating a slowdown for us. All right. Understood. You know, when we think about inflation, and you talked about this with regard to Lawson Products, your price increases are being realized there to offset inflation. Where do you stand, I guess, within not only Lawson, but across all of your operating segments in terms of your ability to keep pace with inflation or, you know, your view that it might be necessary to implement more price increases going forward? Yeah. Yeah, Kevin, this is Ron again. Really, all three companies have been able to to pass along price increases really to offset some of the supply, the supplier cost increases as well as, you know, the freight and the labor piece of it. You know, on an organic basis, we grew nearly 12% on a combined basis for all three companies combined. If we look at that, you know, on a combined basis as well across all three companies, about 7% of that 12% is price related. We have been able to, you know, to pass the price increases along. Generally, I would say that they're being accepted by the customers. You know, it's not always an easy task to get the customer to accept the increases. For the most part, I would say across the three businesses, our end customers have been understanding and open to those increases, realizing that we're effectively, you know, passing along the cost that we're seeing go up on our side. All right. That's good to hear. When we think about margin expansion, can you just talk a little bit more about the factors that, you know, drove margin expansion, adjusted EBITDA margin expansion year-over-year, you know, I guess, in terms of the adjusted results, including loss in last year. Just, you know, your confidence or what gives you confidence that you're gonna exit the year at that, you know, 10%+ margin? Yeah, I'll take that one, Kevin. You know, as both Bryan and i mentioned in our prepared remarks, we ended the quarter at 9.9%. You know, if you look at where we were a year ago, really nice expansion as well as the Q1 expansion as well. You know, I would say there's a few items that are driving that confidence. One is kind of goes back to your earlier question around some of the sales opportunities across all three organizations working together. You know, that gives us a lot of confidence that the teams are working really well together to identify those opportunities. As Bob mentioned, you know, we've got the top 100 accounts already identified in terms of trying to expand those relationships. That certainly is a piece of it. You know, the fact that we're seeing you know, strong demand just from a unit perspective, you know, gives us some additional confidence as well. You know, we are looking at, you know, we didn't bring the three companies together from a cost perspective t hat wasn't the strategy. However, there certainly are costs that we can take out across the platform on a combined basis that we're focusing on as well. I would say those couple of areas being the revenue synergies and the cost, you know, from a combined basis. As Bryan commented on, a lot of initiatives going on within each of the three individual operating companies, and we're seeing that margin expansion, you know, take place on an individual company basis as well and f actoring in the additional sales and cost opportunities is really, you know, in my mind, what's building our confidence as we move throughout the rest of 2022 and into 2023. Okay. Thank Thank you. Yeah, I would also just add, Kevin. I'd also add that, you know, we're still in the early stages of integrating the acquisitions that TestEquity and Gexpro have folded into their business units. There's, you know, while we didn't bring the three companies together to try and leverage too much of the cost or in any way that would disrupt the relationship with the customers. We have just come out of a summit in Chicago where all the, you know, significant amount of the leadership teams and functional team leaders of each of the three companies were together with our operations team that works just with our portfolio companies and then our investment team. They came out of that with a lot of very specific objectives that they are gonna focus on trying to work through. A lot of energy, a lot of enthusiasm, but also a lot of opportunities for efficiency gains, as well as selling, cross-selling opportunities, going back to your earlier question. When you drill down into the acquisitions that we've made inside of Gexpro and TestEquity recently, there's opportunities that we're still working through to capture synergies there. All right, great. Lastly, I just wanna ask about the acquisition pipeline y ou mentioned it remains strong. Can you just give us, I guess, any more flavor on, you know, the types of opportunities you're seeing in terms of size? Is it across all three of your operating companies? And, you know, what valuations look like right now? This is a great opportunity. We have a great team, Kevin, and we were able to bring back Matt Boyce, who helped us significantly on Industrial Distribution Group, if you remember that one, when we bought it back in 2008, and more than quintupled the EBITDA there. Matt had been over at Carlisle, the public company, leading acquisitions. He worked there before we recruited him for IDG and then went back there after we sold IDG to Sonepar. He's working closely with Brad Wallace on our team, who's really leading a lot of the operational dialogues with the management teams as well as the conversations from our team with the M&A effort inside of the business t here's three M&A professionals that are a team now inside of DSG. One of them had worked with us years ago and then moved over to work with Bob and has been leading the efforts there. We brought in Matt to kind of lead the whole effort, and then he brought in a colleague. Brad, if you've got any color there, why don't you fill in details for Kevin? Yeah. Kevin, I would say that it's pretty spread out. I would say it's a robust pipeline now. We've got activity going on across all three of the platforms. I'd say valuations are pretty much in line with where we've been seeing them y ou know, we're targeting, you know, seven, you know, potentially up to eight times on the acquisition multiples. We've historically cheapened those back a couple multiple turns after, you know, realizing some of the cost savings that Bryan alluded to earlier. You know, market conditions now are obviously a little bit different than they were six months ago. We're happy with the acquisitions that we have done. Bob and Cesar and Russ are, you know, they're all working on, you know, both combining, integrating the businesses that they've acquired, as well as working diligently on, you know, continuing to fill that pipeline i would say it is a robust pipeline now that we're excited about and super excited about having, you know, really a dedicated team out focused on M&A. Brad, you know, just to add to that, Kevin. You know, the way that we kind of think about EBITDA multiples historically for the size of acquisitions that we're focused on is a six to eight range with a seven being the mode. You know, we think that there may be opportunities to see that in the current environment, to see opportunities that may be towards the lower end of that range versus the higher end. The better quality businesses or the ones that are more strategically appropriate for what we're trying to accomplish with the platform, you know, may require us to cheapen them back, meaning kind of if they cost us eight times, you know, while each of these acquisitions we're working on are largely directly sourced, I'm not sure that the sellers are ready to take a lower multiple. The end markets still remain on the industrial side. At least what we're seeing in markets that we're playing in, other than renewables, which we're about to get a shot in the arm on, and government, which we think is also gonna improve, you know, we're still seeing really robust demand. Business performance on the businesses that we're looking at is largely consistent with, you know, pre-COVID years. Okay. That's really helpful color. Just I'll sneak in one last one here. You mentioned the renewables. In the presentation, you mentioned that it's kind of like an isolated area where there's some headwinds y ou know, what's going on there? And I guess you're referring to the, you know, the spending package working its way through Congress t hat could be a shot in the arm. Is that the way you're thinking about it? Bob can't wait to talk about renewables. Bob, why don't you? A couple things. One, we're really excited about the Inflation Reduction Act and the investment forthcoming for wind solar as well as electric vehicle. For us, we saw the Senate vote t hat's positive i t's going through the House next. We think that, as Bryan said, it's gonna be a good shot in the arm and renewables down, you know, for services, 28%. And it's one of our largest and most profitable businesses. To see a 10 year commitment going forward, that gives us a lot of confidence that the business will continue to sustain and improve. I'll also go back to the technology segment, you know, with the CHIPS and Science Act, $50 billion investment. That's, again, you know, strong tailwinds for the business going forward. All right. Well, thanks for all the insight. That's all I had t hanks for taking the questions. Appreciate it. Thanks, Kevin. Thanks, Kevin. Thank you. Your next question is coming from Ken Newman from KeyBanc Capital Markets. Your line is live. Morning, Ken. Yeah, it's Ken Newman from KeyBanc. Hey, Ken. Hey. Morning. You know, just for my first question, I'm curious if you could provide a little color just on order trends through August for each of the business segments. You know, really I'm just for the revenue cadence for some of these businesses from a seasonality perspective, just since we don't have the prior year quarter restatements. Any sense on how we should think about the typical seasonality for each of these? As we move from Q2 to Q3 and then into the last quarter as well. Yeah, Ken, I'll take this. This is Ron Knutson. Typically what we would see is that generally across really all three of the businesses the second and Q3 are generally stronger quarters. Quite honestly, some of it just comes down to number of selling days. When we look at the calendar here for 2022, we have 64 selling days in the Q2, 64 in Q3, and 60 days in Q4. We'll naturally see a little bit of a slowdown as we enter into the Q4 just based upon the selling days. I think that, you know, the Q2, you know, results that we posted is a really good indication of how strong the quarter was. You know, when we look at how the Q3 has started and, you know, we don't provide formal guidance as you're aware, but, I would say that what we've seen so far, you know, the first, call it five weeks into the quarter, is that really a consistent mode in terms of what we saw in the Q2 as well. You know, nice increases over a year ago, and I would say really in the same, call it kind of in the same range, maybe even a little bit greater than what we saw here in the Q2 from what we posted. You know, the trends that we saw have continued so far here early in the quarter. Understood. You know, just on price, you know, it sounds like, you know, 10% pricing in Lawson Products seems like a really good solid improvement, I think 7% consolidated. When I think about that in the context of the orders that you're taking, do you think price contributions here have likely peaked in the Q2? or that ramps further in coming quarters? You know, what we've seen is that the cost increases from many of our suppliers have not slowed down dramatically from what we saw in the Q2. You know, we're continuing. All three companies are monitoring margins very closely and in monitoring those increases from our supplier base. You know, it's a little tough to forecast this out. You know, we're not seeing any great slowdown, I would say, and we'll stay on top of it from an individual company perspective. I suspect that we'll continue to see price actions as we move throughout the rest of 2022. Right. You know, in terms of the TestEquity backlog, you know, I understand that supply chain remains pretty challenging here, but just any sense or color if there was some delivery slippage that impacted revenues in that segment this quarter? If so, maybe give us a little bit more color how much the backlog increase is a push out versus order growth? Russ? Yeah, I can take that. Would you like to talk about that? Yes. Thanks. I can take that. We've seen, you know, a continuous slippage in the orders coming from our suppliers over the past couple of years since COVID started with the chip shortage. We haven't seen it increase it 's been maintained about the same. We get lumpy deliveries from our suppliers and, you know, we can turn that very quickly when we get it back in. I don't see that changing much over the next 12 months, but I don't see it increasing. Our suppliers are working toward allocating their chips in the proper way to help fill the backlog. Our backlog is at its peak right now than it's ever been, but we're comfortable that we'll be working through that over the next 12 to 24 months. Yeah. When I think about the chip shortages within that segment, I mean, maybe how should I think about the types of chips that are going into some of the test and equipment, you know, products? Is it more of the trailing edge chips, you know, the older chips versus some of the new leading edge chips that are kind of being built for the newer processes? You know, it's a mix. There's a lot of the older chips that are still, there's quite a backlog for. The newer chips, they're not going into production as quickly as they normally would. It's a combination of both. Okay. Just one more for me. You know, just I didn't hear a mention of cash flow or cash generation in the quarter. Maybe just help us understand where that ended and how do we think about or if there's been a change to, you know, the outlook for cash generation and working capital build into the back half? Yeah, Ken, this is Ron. Go ahead, Ron. Yeah, I can start r ight i can jump in on that. You know, for the first, well, I say for the Q1, for our initial quarter, you know, on a combined basis, our cash flow or our, I would say even our debt level was pretty well flat with where we opened the transaction as of 1 April. However, keep in mind that this initial quarter, you know, had, you know, quite a few what I would call, you know, one-off items in terms of some of the merger-related costs still coming through. We did enter into the merger transaction with, I would say, probably higher payables than what we would normally run at t hose cleared through here in the quarter as well. Certainly as we get into the Q3 and Q4s, we anticipate that cash flow generation will be, you know, back to the normalized levels. You know, this Q1 was, I would say, really, you know, impacted by some of these one-off items and letting the trade payables clear through. Again, we manage working capital very tightly within all the individual operating companies. You know, we have a comprehensive process we go through around managing CapEx as well. You know, we're comfortable that, you know, we'll be back to our normalized levels here in the latter half of the year. Can you just remind me, I mean, how would you define normalized cash flow generation for the consolidated businesses? Is it, I mean, is it fair to think that free cash could be 100% of net income or in excess of that in the out year if things start to normalize here from a supply chain perspective? Yeah. Let me answer that. A couple of data points. You know, we from a CapEx perspective would anticipate on an annual basis that we'll be in the kind of $15 to 20 million range on CapEx this year. And then the other piece that you know that I'll comment on is really just the working capital needs in terms of the expansion of the business in terms of organic sales. You know, historically, if you look back, and there's certainly you know some opportunities here, but historically, if you look back, all three companies on a combined basis would operate at about 20% working capital as a percent of sales. You can probably kinda do the math on that in terms of what that means in terms of, you know, free cash flow on a go-forward basis. Those are probably the two largest pieces of uses of cash. We have the funding or the, you know, the service of the debt as well in terms of interest and the principal payments. Understood. Good color. Thanks. Thank you. Thank you. Once again, ladies and gentlemen, if you have any questions or comments, please press star then one on your phone at this time. Your next question is coming from Brad Hathaway from Far View. Your line is live. Hi, everyone. Hi, Brad. Congrats on an incredible quarter. I mean, both the growth and the profitability is really great. Thanks, Brad. It was positive to hear the commentary on kind of the confidence on the EBITDA for this year. I guess I'm curious, based on kind of what you're seeing from the summit and all the kind of discussion among the teams, I mean, how do you feel about the EBITDA progression as we look into the medium term and kind of that path towards the teens that you talked about previously? I mean, how has your confidence changed on that? Well, first of all, it was nice just to get through the first one, right? I mean, it's been, you know, really 15, 16 months since we made the proposal in May or wrote the letter in May of 2021. To get one under the belt, to get out of the gate, you know, more than straight, and to feel really good about how everyone's working together and the opportunities that we're continuing to uncover, which are larger than the opportunities that we underwrote to when we first thought about bringing the businesses together. Both in terms of how they could work collaboratively on cross-selling some of the abilities to leverage the platform to be more efficient and then obviously the, you know, how we are thinking about using the free cash flow and the scale benefits to continue to add acquisition revenue and thoughtfully the right, you know, strategic acquisitions for you know, kind of bringing together a better business, not just to grow EBITDA. I think as we're looking at it, you know, that this is the progression is gonna be up into the right in terms of operating margins, EBITDA margins over the next several years. The other thing that's nice, Brad, is that, you know, each of the three teams have done a great job managing the inflationary pressures on inventory or purchasing and passing that through to the, you know, be it in order to sustain their margins and actually improve their visibility on margins through their price actions. I think that that's, you know, that's helpful i mean, in an inflationary environment, the last thing you wanna do is lose ground on that. It's hard to recapture if you don't get after it on day one. We're still seeing some of that flow through the model, some of the price actions that we've taken. I think our confidence is, you know. A big part of that comes from the three CEOs and Ron who are on the phone, and how well they and their teams are culturally working well together. We see a lot of progress in front of us. Excellent t hat's great t hat's really helpful. I guess just, yeah, it seems like all three teams are operating great, so once again, thank you all for all that effort. I guess just one other small question on the M&A pipeline. If memory serves, there was a Gexpro deal that was kind of you know, somewhat in the proxy, something that was kind of at least in process. Is there any update you can provide on that one? Brad, do you or Bob wanna talk about where we are on that company? Yeah. Brad- [crosstalk] Delicate link. I would say, it is still in process. You know, I think that, you know, M&A, you know, certain transactions take a life of their own, and this would qualify as that. We are in the later innings than we were before, but we're not yet to the ninetee n-ning. It is still on the hook and still in process. Got it. Has TestEquity completed all the transactions from the proxy, the ones that they've had? Are those all done? Yes, they have. Got it. Okay. Yes. It's just this one, Gexpro one from the proxy that's not in there yet. Yeah. Referencing back to the proxy, that is correct. There, as I mentioned earlier, there's others that we are working that are in the pipeline that were not included in the proxy as they were, they weren't as far along as those that were in the proxy. No, 100%. I understand the pipeline is very different i was just curious about the ones specifically noted in that. Great w ell, I would say that, you know, not only have you come out straight, but I think you guys have come out with a really great Q1 t hank you all for the effort, and look forward to seeing you develop from there. Brad, thank you. We appreciate your engagement. Thanks, Brad. Thank you. That concludes our Q&A session. I will now hand the conference back to Bryan King for closing remarks. Please go ahead. Well, thank you. Thank you everyone for listening today. We appreciate the support of the investors that have been with us along this journey, and we welcome those that are new to our, you know, new to our business. We're really proud of the management teams of these three business units and how they've continued to work together and collaborate and, you know, the lot of work that Ron and his team's done in order to, you know, work through the challenges of, you know, effectively a double reverse merger and one of the more complicated accounting, GAAP accounting exercises that we've been involved in. Lots of hard effort, hard work over the last six months, nine months to get to where we are today. We're enthusiastic about what we're seeing in the marketplace right now in the last couple months for the businesses and the way that the teams are working together to be able to unlock more value for the shareholders. The business is gonna present at the Midwest IDEAS Investor Conference in Chicago, which is held on 24 August and 25 August. We welcome anyone that is gonna be there to meet with us in person. Obviously, if anyone has any questions as follow-ups or would like to have a call with us, please reach out to Three Part Advisors or to Ron, and let's get on the calendar to have a conversation. Thank you for your interest, and have a great rest of the summer and hope to see you soon. Thank you, ladies and gentlemen. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.