Greetings, and welcome to the Distribution Solutions Group third quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode, and a question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Sandy Martin, at Three Part Advisors. Ma'am, you may begin. Good morning, everyone, and welcome to the Distribution Solutions Group third quarter 2023 earnings call. Joining me on today's call are DSG's Chairman and Chief Executive Officer, Bryan King, and Executive Vice President and Chief Financial Officer, Ron Knutson. In conjunction with today's call, we have provided a Q3 earnings presentation that has been posted on the company's IR website at investor.distributionsolutionsgroup.com. 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, and we may elect to update the forward-looking statements made today, but disclaim any obligation to do so. Management will also refer to the non-GAAP measures, and reconciliations to the nearest GAAP measures can be found at the end of our earnings release. The earnings press release issued earlier today was posted on the investor relations section of our website. A copy of the release has also been included in a current report on Form 8-K filed with the SEC. Lastly, this call is being 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 November 16, 2023. I will now turn the call over to Bryan King. Bryan? Thanks, Sandy, and thank you all for joining us to review our third quarter results. In September, we hosted our first ever DSG Investor Day, which allowed our team to demonstrate the company's strong market positions in key vertical channels that offer broad and differentiated specialty distribution solutions. We also introduced our deep leadership bench and explored how customers rely on us to provide high touch, value-added distribution solutions for their MRO, OEM, and industrial technology needs in our large addressable market of over $60 billion. It was constructive and valuable to meet and take questions from new and existing investors and sell-side analysts. We appreciate many of you joining us in Fort Worth and those that joined virtually. We encourage you to review the Investor Day deck on the investor relations section of our website, where we shared our strategic plans for further top-line growth, margin expansion, and free cash flow generation, as well as walking through our capital allocation priorities and plans to create long-term shareholder value. Now, beginning on slide four, we reported total third quarter sales of $439 million, up over 26% from the prior year. And excluding the impact of Hisco, we increased EBITDA margin 70 basis points. As we discussed last quarter and highlighted during Investor Day, we generated strong double-digit organic sales results in last year's third quarter, creating difficult comparisons. For the 2023 third quarter, total organic growth declined by 4%. This pressure was isolated to softness in technology-oriented markets, including semiconductor manufacturing, renewables, and test and measurement capital equipment sales. These markets have strong secular tailwinds, and we purposely added differentiated capabilities to serve these important end markets. Softness in these important end markets was partially offset by organic growth within the Lawson vertical. The capital equipment softness further highlights the importance of adding Hisco as part of the industrial technology platform moving forward, given the more recurring nature of that business. We will provide updates on the integration milestones and progress later. DSG delivered strong quarterly growth and profitability despite pockets of choppy demand. Our teams continued to focus on what we can control within the businesses as we march operating margins towards the long-term goals outlined during Investor Day. We worked hard this quarter to execute strategic operational initiatives that improve sales productivity and grow market share in each of our three verticals. For the third quarter, we reported Adjusted EBITDA of $44 million, or 10% of sales, and adjusted earnings per share of $0.17 per share. As we signaled last quarter, and at the time of the acquisition, Hisco's results will initially pressure our EBITDA margins. Excluding Hisco, our Adjusted EBITDA margin would have been 10.7% for the third quarter, up from 10% in the prior year's quarter. We generated significant cash from operations of $74 million year to date, which speaks to the power of our model and the discipline of our working capital management.... Our teams continue to perform well, and our sales transformation efforts resulted in further field rep productivity improvements. Additionally, we continue to invest in technology and remain resilient and flexible in operating the business. Moving to Slide five, let me briefly provide business updates and important sales and cost initiatives for our MRO, OEM, and industrial technologies-focused verticals. Lawson Products continues to be a leader in the MRO distribution of C-parts, offering vendor-managed inventory services. During the third quarter, Lawson grew organic sales by 6.3% on a same-day basis, and we also realized a strong double-digit EBITDA margin, which increased significantly over the prior year quarter and expanded sequentially over the second quarter. This was achieved while concurrently accelerating Lawson's sales transformation initiative, which we elaborated on during Investor Day. We continue to identify wallet share expansion opportunities with current customers, as well as see strong market share expansion opportunities with new customers. Our lift in sales has largely been seen by lift in engagement with large strategic accounts, as well as growth in select business verticals. We are enjoying a robust and growing strategic accounts pipeline and an accelerating sales cycle, significantly enhanced through the collaborative cross-selling efforts focused on strongly embedded customer relationships of Gexpro Services, and importantly, now, Hisco. We continue to see mild customer-level activity softness, consistent with the third quarter, in our core street business at Lawson. It's not unusual for Lawson's customer order frequency to be unpredictable during the holidays. I'm pleased that the Lawson team drove nice organic growth through market and wallet share expansion. Also, we are confident that our sales transformation initiatives will better position Lawson to boost growth and customer engagement over the long term. We're finalizing our mobile-enabled CRM tool at Lawson, which will be fully rolled out during the first quarter of 2024. The leadership team at Lawson continues to support our sales reps to improve productivity, allowing them to make more money, better serve customers, and expand cross-sale opportunities. During the third quarter, our sales rep productivity increased by 18%, which represents success building on success this year. Over the last two years, we have set up a more disciplined operating structure to invest in additional growth resources, to constantly evaluate how to better serve our customers, to enhance our customer experience while becoming more differentiated in our solutions for them. In reflecting on each of our divisions and our shared but often competing objectives of driving high-quality revenue growth, while also committing across DSG greater discipline and operating efficiency to unlock structurally higher EBITDA and margins, we pore over the initiatives, balancing the tensions and timing around investing in additional growth resources and customer experience enhancements, while also optimizing our spend to unlock accelerating current profitability. While the timing of income statement investments is not always perfect and linear, the discipline and commitment from our management team to the shareholders is. Across our leadership team, we are perfectly aligned with our shareholders, and I am convinced we are doing great work, and I thank our teams for us regularly. At the end of our remarks, I'll talk about our capital allocation framework for reinvesting our collective cash flow and balance sheet, but the more nuanced and often less talked about framework, but equally as critical, is how we are investing more on the income statement and initiatives across DSG to drive growth, while also balancing those investments with initiatives to unlock more near-term earnings and cash flow. The sales productivity lift at Lawson is in what we consider the early innings of a broader commitment to our sales force to help them grow their revenue engagements with resources in which we have been investing and to drive their compensation. As I reflect on a series of decisions over the last two years of coming together and the benefits of being a part of one larger DSG company, Lawson's MRO business has grown its third quarter revenue over third quarter 2021, prior to the merger, by 22%, and its EBITDA by 112%, taking EBITDA margins from 8.4% to 14.5% in less than two years. This is based on a collection of partially executed initiatives structured around being a part of the larger DSG family, and we are just now beginning to see the capability and cross-selling benefits accrue to Lawson and other businesses. Turning to Gexpro Services, which continues to be a leader in the supply chain solutions of largely C-parts, specializing in vendor-managed inventory programs for high-spec OEM customers. For the quarter, our sales were essentially flat over the prior year's quarter. Our largest end market remains renewables, which combines electrical, mechanical, and hardware product offerings with kitting supply chain services and domestic manufacturing, of which government-funded programs support many. We are seeing green shoots in the renewables markets. Given the rapidly changing geopolitical environment, we anticipate momentum to continue in aerospace and defense, with secular tailwinds for some time. We also see strength in the industrial power markets this quarter and this year. While our programs are still intact and being renewed, we have seen the largest softness this year in our highest margin business, which addresses the technology end market, as activity in pulling our product through our customer facilities is down 45% this year versus last year, creating a $6.1 million EBITDA headwind we largely made up elsewhere. That said, our pipeline across our verticals for new programs with our suite of capabilities is excellent, and although we have working quotes, timelines have slowed, likely due to the higher cost of capital environment. We continue to see growth in the retrofit and upgrade cycle for the installed base, like in renewables. Gexpro Services is creating value from synergistic acquisitions, expanding kitting and project services, the successful launch of our e-commerce platform this year, and continuing to refine how we offer our expanded core products and vendor-managed inventory capabilities with the addition of Lawson's MRO and now Hisco's product leadership in key categories. We continue to emphasize embedding our products and services into new OEM programs and becoming more sticky as the provider of choice. Our customer-centric approach, combined with the breadth and scale of our strategic acquisitions, has materially expanded our resources, products, footprint, and collective expertise across the platform. Using the same two-year lens as I did with Lawson, we track the success we've enjoyed, both growing and transforming the profitability of our acquisitions as they are folded into their vertical and, more broadly, our DSG network. We've committed to our investors that we are not buying EBITDA unless it supports our broader strategic objectives. In reviewing the five acquisitions we've added to the Gexpro Services vertical over the last two years, they have an average increase in their organic revenue of 49%, and together, have more than doubled their EBITDA as their value-added capabilities are leveraged more broadly across our network, allowing our offerings to our collective customers to be more uniquely differentiated. During this same period, our core Gexpro Services organic revenue has grown 10% and our EBITDA has been largely flat. Challenges are referenced by a significant mix shift away from our most profitable, and we believe, secularly attractive technology end market, which is currently in a tough part of their industry cycle, and where we have visibility that our offerings will continue to secure us more programs and market share. Lastly, moving to Industrial Technologies to discuss TestEquity, along with our initiatives to integrate Hisco. With each day, we are even more confident with our decision that Hisco is key to our broader DSG strategy and our focus on rebalancing TestEquity's consumable supplies versus capital mix to support the full electronic cycle. Our major work streams associated with integrating Hisco into TestEquity continue to progress on schedule. We are pleased to report that TestEquity's inventory is now available for sale on the Hisco e-commerce website, which is a win for us and for our customers. During the third quarter, TestEquity was under pressure from a sales standpoint, with comparable sales down in the mid-teens range, largely from pressure within test and measurement and some of the capital assets that complement an environment supporting test and measurement equipment, like in a laboratory. We saw downward pressure on outlays in the technology and R&D sectors due to capital spending deferrals, and we've seen some excess products try to get pulled through the channel, especially in the second half of 2023. A year-ago, it was a product supply issue, and now that has flipped to excess market supply on lower industry demand. Our customers are telling us that higher capital costs continue to drive capital expenditure delays, and our vendors continue to reiterate our market-leading distribution position within these categories. In conjunction with our work streams to integrate Hisco and rebalancing the collective cost structure, we identified and recently commenced action on over $10 million of annual run rate cost savings that will improve the overall margin profile going forward in the Industrial Technologies vertical. The earn-out period has passed, and we are implementing these initiatives, along with the sales team's collaboration and other mission-critical activities. Our vendor-managed inventory, or VMI solutions, continue to show sustained growth and are on track to show their highest profitability to date. Our chambers business continues to perform well, and we anticipate accelerating product line growth as well as gross margin expansion in this business. We have rebaselined operating expense spend across the Industrial Technology vertical to better position us heading into 2024, as we focus on driving profitability of this vertical to our stated goal of exiting 2024 at a 10% or higher EBITDA margin. We continue to capture cost synergies and production efficiencies, resulting in improved delivery times and lower shipping costs. As we discussed at Investor Day, we're accelerating work streams to build a higher structural margin business that benefits from expanded engagement around cross-selling through our other verticals and businesses. Looking back across the last two years of acquisition performance in our Industrial Technology vertical, four of the five are structurally more profitable, with higher earnings, although 3 of them have been challenged at some level of revenue softness from the current capital spending pressure TestEquity has also faced. Our enthusiasm continues to build as we continue uncovering all the capabilities and levers in how Hisco will significantly transform this vertical and the broader revenue and profitability opportunity across the DSG platform, bringing leadership and expertise in key product categories, embedded strategic customer relationships, expanded industry engagement, value-added services, and a prominent presence in Latin America for the other verticals to draft. With that, I would like to turn the call over to Ron to walk through the financials. Ron? Thank you, Bryan, and good morning, everyone. Turning to Slide seven, let me summarize Q3 results. Consolidated revenue for Q3 was $438.9 million, up $91.8 million, or 26.4%. Although acquisition revenue in 2022 and 2023 resulted in incremental sales of $106.3 million, organic sales declined by 4.2%. If we look at this from a cumulative two-year basis, organic sales were up approximately 11% versus 2021, through a combination of strategic price and volume expansion. Third quarter results reflect strong growth in margin dollars. We reported a $9 million improvement in Adjusted EBITDA, growing to $43.7 million or 10% of sales, and an increase of 25.9% versus last year's Adjusted EBITDA of $34.7 million. As Bryan mentioned, excluding Hisco, our Adjusted EBITDA would have been 10.7% for the quarter. Reported operating income was $12.8 million compared to $22 million a year-ago quarter. Excluding non-recurring merger-related costs, acquisition costs, stock-based compensation, severance, and other non-recurring items, operating income would have been $26.7 million, up from $25.7 million in the year-ago quarter. We reported GAAP diluted loss per share of $0.03 for the third quarter, compared to earnings per share of $0.42 a year-ago. On an adjusted basis, adjusted diluted EPS was $0.17 for the quarter versus $0.32 for a year-ago quarter. This reflects the impact of acquisition-related D&A expenses and higher share count compared to the prior year period. We continue to show strong cash flow generation from operations and good working capital management, with $47 million of the $74 million of cash generated from operations that Bryan mentioned being realized in the third quarter. We ended the quarter with unrestricted and restricted cash of over $100 million. Turning to Slide eight, let me now comment briefly on each of the businesses. Starting with Lawson, sales were $114.5 million, up 4.6% for the quarter and representing a 6.3% increase on a same-day basis. The increase over a year-ago was driven by strong performance within the strategic business, Kent Automotive and Government Military. As Bryan mentioned, the core street business was somewhat softer, which continues into the fourth quarter. Similar to the second quarter, Lawson's growth in Q3 was achieved through increased wallet share with existing customers and new customers in both our strategic accounts and our Kent Automotive businesses. As we discussed at our Investor Day, Lawson's initiatives to transform the sales team were executed this past summer, which resulted in an 18% lift in sales rep productivity this quarter. Lawson's Adjusted EBITDA improved to $16.7 million, compared to Adjusted EBITDA of $9.7 million a year-ago quarter. This increase was primarily driven by the sales increase and gross margin improvements, partially offset by increased compensation on higher sales levels and channel investments to better position Lawson on a longer-term basis. Lawson's Adjusted EBITDA, as a percent of sales, was 14.6% in the quarter versus 8.8% a year-ago quarter and improved sequentially from 13.5% in the second quarter of 2023. Turning to Gexpro Services on slide nine. Total sales were $103.2 million for the third quarter, essentially flat versus $103.7 million in a year-ago period. Like last quarter, Gexpro saw a decline in sales in their highest margin technology end market, offset by growth in aerospace and defense and industrial power markets. The leadership team is reallocating resources to better align with demand to maintain profitability and margin goals set for the business for this year. Gexpro Services' largest vertical is renewables, which are expected to have secular strength over the next several quarters and years. We are reinvesting in growing the business and being cautious about weaker markets or ones, more sensitive to current macroeconomic issues.... At Gexpro Services, we are focused on existing relationships in market share gains from new customers through our value creation offerings, including kitting, project services, and the ability to deliver world-class support to the OEM production cycle. Gexpro Services Adjusted EBITDA was $11.6 million, or 11.2% of sales, versus $12.5 million, or 12% of sales for the year-ago quarter, with much of the decrease being a shift driven by sales mix. Realigning our costs to align with our sales and improving gross margins will benefit us yet this year and, and beyond. Lastly, I will turn to TestEquity, including Hisco, on slide ten. Q3 sales grew to $207.7 million, primarily due to $106.3 million of acquired revenue, offset by a decrease of 13.2% in organic sales. Given the strong third quarter organic growth from last year, on a cumulative two-year basis, TestEquity is still up approximately 3.7% compared to 2021 sales levels. As Bryan mentioned, test and measurement sales were soft, and our Q3 key supplier shipments through the entire channel were down even more dramatically than the TestEquity results might suggest. In other words, TestEquity performed well in Q3, especially given the market dynamics in this space. While we continue to see choppiness in capital spending, the bright spots in the quarter were the continued growth in the chambers business, enhancements within our VMI offering, and progress within digital and our own brand offering. Although not a big part of the business, we do value our own brands as a way of improving the mix of higher-margin business over time. TestEquity's Adjusted EBITDA for the third quarter was $14.3 million, or 6.9% of sales. In EBITDA dollars, this was an increase of $4.2 million, or 42% over the same period a year-ago, of which approximately $8.3 million was generated from the acquired businesses. Although we are actively making progress to optimize the expense structure through the TestEquity and Hisco integration, we are working on operating expense rebaselining to align with sales volumes for TestEquity, which includes Hisco. While this is a work in progress, we've made good progress this year, which collectively should exceed $10 million on an annualized basis. Moving on to slide 11. We ended the quarter with $279 million of liquidity, including $80.5 million of unrestricted cash and cash equivalents, and $198.3 million under our existing credit facility. Our amended credit facility was expanded earlier this year from $500 million to $805 million. Over the last 18 months, we've reduced our net debt leverage from 3.6 times at the close of the merger on April 1, 2022, down to 2.9x, all while acquiring four businesses. We continue to focus on deleveraging the balance sheet through operating and working capital improvements, with our target leverage ratio remaining in the 3x-4x range. Although we continue to support a robust working capital investment portfolio, we are carefully managing inventories, accounts receivables, and accounts payables, as evidenced by our ability to generate cash flows from operations of $47 million for the quarter. Net capital expenditures, including rental equipment, were $14.7 million for the first nine months of the fiscal year, and we expect full year CapEx to be in the range of $16 million-$20 million or approximately 1% of revenue. With that, I would now like to turn it back over to Bryan. Thank you, Ron. Let's turn to slide 12 to recap our capital allocation framework. DSG is focused on a prudent balance of organic and acquisitive growth, where we use a disciplined approach to track working capital intensity, leverage, and periodic discussions and decisions to invest in our own stock. Our goals at DSG are to scale our business even further while improving the return profile of our specialty distribution platform. Benefit from our fortified competitive moat in our verticals with unique and well-positioned products and solutions. Serve our customers with high-touch, value-added specialty products, services, and solutions. Maintain our asset light capital structure with planned growth through sustainable working capital investments, as well as highly strategic acquisitions that expand our offerings and improve our unique and highly differentiated value proposition for our customers. Finally, all creating long-term shareholder value by elevating our earnings structure and generating significant cash flow per share. Turn to slide 13. Third quarter results demonstrated our ability to benefit from our diverse end markets to achieve a 10% EBITDA margin, or 10.7%, excluding our recent Hisco acquisition. As your partners and as the leaders of the business, we are excited shareholders as we see significant levers, some of which are outlined on slide 13, available to us to unlock significantly higher earnings over the coming years, regardless of how the current economic cycle unfolds. We are committed to work hard on the elements of the business that we control, like the current focus on improving the sales force productivity, sharing best practices, and reducing costs across DSG, where scale and we're pulling together businesses with redundant capabilities, is allowing us to continue to uncover spending we can eliminate, which continues to be an everyday opportunity, where the management teams are collaborating and finding new opportunities. Additionally, constructive collaboration is a key part of our cross-selling initiatives, which are a priority and are both growing and paying off. We are finding better and different ways to increase sales through long-standing relationships with our best customers. Enhancing our offering and value to our customers is adding to our management team's enthusiasm as they see an expanded opportunity complementing the DSG platform we are building with the Hisco acquisition, and the role it plays in accelerating differentiated revenue growth initiatives. We also identified more cost reduction benefits and margin improvement opportunities as Hisco becomes more integrated with TestEquity and our industrial technologies vertical. We are committed to driving our elevated margin objectives in that business and that vertical over the next several quarters, similar to what we've done in the other verticals. We continue to engage in numerous discussions around strategic assets to buy, and we have accelerated interest from businesses that see the value in, and want to be a part of the differentiated specialty distribution business we are building with DSG. Several of them, we would like very much to add to our business, and we expect we will get the opportunity to. But we have a high bar and a disciplined framework and commercial logic that must exist for us to add businesses to our fold, and then expect a lot of profitability growth as we optimize them for the benefit of each of our verticals, consistent with the financial success on our last 10 acquisitions like we've outlined today. All of our management teams have to be supportive and committed that an acquisition is key to their success, and own that accountability for us to bring an acquisition on board and for it to enjoy similar success to what we've enjoyed. With that, operator, we would like to take questions from analysts and investors. Thank you. At this time, we will be conducting our question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question is coming from Kevin Steinke with Barrington Research. Your line is live. Hey, good morning. Morning, Kevin. Morning, Kevin. Hey, I want to start off just by asking about, you know, you mentioned some of the, the pockets of choppy demand or demand softness related to the technology vertical, you know, renewables and test and measurement equipment. What do you think that's an environment that, you know, is something that persists as long as the cost of capital is higher? You know, any insight from your customers as to when maybe some of those areas start to turn around or pick up again? Just, you know, I know you're bullish on those areas over the longer term, but just kind of wondering what your thoughts are, you know, in the current environment over the next couple of quarters. Kevin, I, you know, it's a really fair question, and I was actually asked it yesterday in a different context. Your renewables, we thought that the renewables end market would start accelerating after the Inflation Reduction Act or the Production Tax Credit was renewed. There were a lot of projects in the queue that we were, you know, aware of, and our market share there is very high, so we were gonna get to enjoy those. As interest rates rose and cost of capital went up, it fought some of the economic benefits to the Production Tax Credit, because those projects are largely, you know, project financed. And so there's been certainly some delays associated with those projects, but there's a lot of pressure to get them, you know, to get them started. And so we're kind of in a holding pattern there, where we've seen a lot more interest, and we expect to see an acceleration in demand on the renewable side, has been on the retrofit. Which some of our tuck-in acquisitions that we did on Gexpro were really done to allow us to have some additional capabilities to address electrical, mechanical, and kitting, so that we could be, you know, a key supplier to the long-term cycle of retrofitting all the existing installed base. which is more of a maintenance side of, you know, it's a multiyear cycle of maintaining renewable infrastructure that's already in place. And those projects we expect will get released, but it's really in the early cycle of, for us, seeing those projects take off. On the test and measurement side, well, then on the semiconductor and the technology side, we've seen kind of a real challenging backdrop, particularly for Gexpro Services there, as I alluded to it in the call. That was our most profitable, and has been historically, in market. You know, while secularly, we think that space in North America is gonna benefit with the CHIPS Act, there's definitely been a slowness in the pull-through from our customers of our products. Those cycles on the semiconductor side, you know, we've all, most of us who've invested in semiconductor stocks over the years, have watched the rise and fall there. We had one particular customer that has given us, you know, has had more challenges in their pull-through with us, which probably negatively impacted that revenue more than I would think about just the baseline on the semiconductor activity domestically or North America. When I think about the test and measurement side, you know, there's been a lot of deferral of purchasing. We made some decisions over the last year there that had to do with pricing discipline, which candidly, as you know, end markets soften, you know, probably impacted us more than we would've expected. There was a customer that we had that was a reseller, that is, a customer that we had supported over the last several years, that is a veteran and is just a, you know, kind of a reseller in the channel. And the margins there just weren't attractive relative to the amount of capital we were tying up. And so we walked to that customer during this year, and that had an additional impact to our top line when matched with, you know, a tougher industry backdrop. Aerospace and defense, which has been a real strength for Gexpro Services on the MRO side, has been a real soft area for TestEquity. And, you know, we know that our customers there are healthy. We know that they've got capital spending needs that they are deferring on test and measurement equipment. But, you know, given, you know, their businesses are obviously the macro environment is globally causing their businesses to be strong. But they've, you know, deferred some purchasing on the capital side. So I don't know how it's hard to predict where, when those end markets are gonna pick back up. But we certainly feel like that our market share position is strong and, and there's... You know, I don't know that I would anticipate that they're gonna pick back up here in this fourth quarter. I think that what we've seen so far this fourth quarter has been pretty consistent with what we felt during the third quarter, although sales on test and measurement have turned, so we've bottomed there, and they've, and, and the, you know, first month of the the fourth quarter has been better than the trough in the third, certainly. And so we would expect that, you know, some of the purchasing is picking back up, that we thought was being deferred. And we think that some of the inventory that was in the system, that people were kind of, you know, being more aggressive on pricing, where we were not willing to participate. And some of our, you know, customers, where we were quoting and doing the engineering work and speccing things out, and then somebody else would come in and lowball us, on a customer that we have a long-standing relationship, but somebody that was caught with some inventory, wanted to get out. And we were trying to maintain a lot of, you know, the discipline that we've tried to put in place to drive margins. It just impacted us a little bit more on volume in the test and measurement side this quarter, this past quarter. Yeah, Kevin, this- Great. Kevin, this is- Yeah. Kevin, this is Ron. Just one additional comment on top of Bryan's comments. As we look at the next couple of quarters, just keep in mind that we are up against some pretty tough comps into Q4 and into the first quarter of 2023, you know, 2024 versus 2023 as well. So, you know, all three of the businesses had, you know, nice organic growth in Q4 versus a Q4 of 2022 versus 2021. So just keep that in mind, that we're up, we are up against some pretty tough comps, you know, as we enter into the fourth and first quarter of next year. You know, Kevin, I... That's a good point, Ron, and kind of along those lines, I just, there are two other things that I didn't touch on. Hisco, when we bought Hisco, there were a couple programs in there that we knew, like, you know, they had a great—they have a great relationship with Abbott, and they had a program that was, you know, COVID testing kits... which, you know, we know COVID testing kits have kind of decelerated a lot. We expected a couple of these programs that when we bought the business, we forecasted that there would be some softness there. So, Hisco's business is performing, you know, how we expected it would. So we're real pleased with kind of the Hisco side on the top line. There were some construction programs there, and then there was a couple of these pharmaceutical programs that were effectively sunsetting. Based on the construction stuff was end market related, the Abbott or some of the pharmaceutical programs were more COVID related. We've got some new programs there that we have visibility to, that are, you know, have not yet hit the P&L, but that we expected some of a little bit of the choppiness there on the top line. And that doesn't bother us at all. Another thing that I'd you know mentioned is that part of of the tension that we've had with trying to drive EBITDA margin and EBITDA, the profitability, and then just even like sales force productivity with Lawson, has been trying to make sure that that we're focused on profitable, good revenue growth, as opposed to... So we've had to be disciplined about either you know walking some customers, as I alluded to earlier, and being disciplined around pricing that that you know in a more robust economic backdrop would be you know kind of blended or buried. But in an environment where you've got some choppiness that is coming through in different end markets, you know, it's probably, you know, leaves us a little bit more to have to explain, you know, when we walk away from a customer and take a little bit more of a test and measurement decrease in top line, but with the objective of having more discipline around margins and pricing, and ultimately, our EBITDA objectives that we put out there. So. Oh, great. Well, that's, that's all really good color and insight. Appreciate that. You know, the performance in the Lawson business was impressive, impressive, as you noted, with the 18% increase in sales rep productivity. So, you know, as I look back about 18 months ago, looks like the sales force headcount is down a bit, but as you noted, productivity up significantly. So if maybe you can just refresh us or walk us through the steps that you've taken to you know, really drive productivity in there and you know, how that's been playing out for you. I'd love to answer that question, because I get excited about it, but Ron lives it every day. S ince he's been, you know, at Custom or at Lawson over all these years. So Ron, why don't you, why don't you jump in on it first, and then I'll follow up, even though it's an ex- it's a - Sure. Topic you both enjoy. Yeah, for sure. So, yeah, Kevin, and you've tracked for quite a few years, you know, what we've been, you know, doing on the sales side and the field sales reps in terms of productivity. And to your point, I mean, we're really pleased with, you know, the progress that we've been able to achieve at Lawson, you know, going from kind of high single-digit EBITDA to now, you know, pretty steady, you know, 13%-14% range. But, you know, as we think about, you know, the field sales reps for us, you know, we are clearly making investments into those team members, and they are a critical piece of our overall success and, you know, bang it out every single day in terms of visiting our customers. And so, you know, what we've really have tried to do is to really supplement and provide them some additional resources. For example, we're investing in a much more sophisticated CRM tool that'll be rolled out here in the first quarter. We have built up some support roles, you know, anywhere from service reps to inside sales reps as well, in order to be able to expand our channel, its selling channels. And for us, it's all about really trying to be able to help them become more productive and provide them a, you know, a more defined territory and a more repeatable type of revenue. So, you're right, field headcount is down versus where we were a year-ago. And, you know, it's not so much a headcount number for us that's important. It's really more about, you know, finding those territories that are really, really can be really, really successful and providing our sales reps, you know, the customers and the leads that allow them to be successful and ultimately, you know, make more commission dollars as well. So, I would say that 18% growth is a combination of a lot of effort over the last 18 months to help redefine some of the territories, provide some new revenue avenues. You know, strategic accounts, we've talked about that a little bit in the past, you know, continue to have really strong growth in that piece of our business. Very sticky customers, and really bring to the sales rep, you know, kind of a sweet spot in terms of the size of a location that they can service... you know, day in and day out, and and service them very well. So, so I'll, I'll pause there. But yeah, we're, we're really excited about the productivity side and, and, you know, certainly, you know, expanding our, our channel reach out to our customers as well. I just because it's a favorite topic for us to really dig into, Kevin, the, you know, to add to Ron's comments, you know, there was a decision to make this year to make a significant investment in additional resources to support the outside sales force. And if, you know, we go back and use kind of the lens of history, many of us were conditioned over the last, you know, eight or so years, 10 years, that I've been involved in Lawson, that we really needed to grow our, our outside, you know, kind of street sellers or street sales force, to try and grow revenue, to try and get leverage through their efforts at the street level, which really required more feet on the street to get the EBITDA margins to start moving our direction, and lifting. And I think that our lens has evolved, and, you know, there's, you know... What we've learned is that, one, we think that there's a lot of efficiency gains that we can help our sales force with, by giving them more tools and more support resources back in the home office, and even, in some cases, more support resources at the customer location. So be it, you know, a support technician that's there to help them refill the bins, to go by, so that the salesperson can be looking for ways to grow revenue or to call on more customers, or and to really serve the customer better, where we've identified that there's a growth opportunity with the customer, versus the amount of time that maybe our sales force was spending with some of the customers that were harder to grow, or resetting the bins, and organizing the parts on site. The support on the technical side, I mean, we've added technical experts back at, and we're gonna add some more back at the home office, so that there's more technical expertise that the field sales force can lean on. There's, you know, ultimately an objective to significantly slow down what the historic turnover had been with the Lawson field sales force. And so, you know, the productivity is a result of having, you know, our sellers have more time to look for revenue growth opportunities. You know, over the last year, our strategic, our strategic accounts, growth, revenue growth is up over, you know, 20% year-over-year. I think it's 23%, right, Ron? Yep. And so that part of our business obviously is has been where our funnel our pipeline that has been helped some, you know, by being part of DSG and the and the very focused approach to trying to sell to those some of those larger accounts where we can grow with them has been, you know, a priority. The street business the smaller accounts which have been largely flat or slightly down, I think down 1% or thereabout, it has been an area where we've tried to drive sensitivity out of our salespeople in terms of how they're, you know, how much time they're spending at a site and making sure that they're hunting to try and grow their revenue, because we want them to make more money. We think that their compensation or the opportunity that they've got to drive their compensation higher through being more efficient and growing their productivity, and us helping them on that, and then us, you know, looking at ways to make sure that they can be rewarded more by their productivity growth is gonna slow down that turnover. That turnover is something that we've said publicly before. Historically, for the last five years or so, we've, on our side, we've done a lot of work on around the cost of the turnover, and we think it's, you know, still, you know, $20+ million a year. That's a real cost to the business of having excessive turnover on the sales force. You know, these are all parts of a very deliberate plan. It has, you know, shifted our focus probably, you know, our investment more into, you know, how to support the team that we've got, versus trying to figure out how to grow the team constantly. And so there's been a little bit of compression in the number of field reps that we've got, but there's not been any compression in terms of the total spend. When you... I mean, maybe a little bit, but when you look at the inside sales rep support that we've tried to offer to the outside sales reps, and then the inside technical support, and then the service techs, all of which aren't counted in that, in that outside sales force number that we're looking at, you know, the total headcount isn't down nearly as much as, as that, that leading number on the in, of the outside sales force would indicate. Okay, great. Thanks for all the insight. I have to jump to another call here, but again, thanks for all the commentary. I'll turn it over. Thanks, Kevin. Thanks, Kevin. Thank you. Our next question is coming from Tommy Moll with Stephens Inc. Your line is live. Good morning, and thank you for, thank you for taking my questions. Hey, Tommy. Good morning, Tommy. I wanted to continue on the Lawson theme. Bryan, you mentioned a couple of times, some of the pressures or uncertainty among or within the core street business. What's the state of the union there on leading edge demand across your customer base? Yeah, Tommy, it's hard for me to unpack. Customers are so, there's so many customers in that street business, right? And so when you look at it, it's, it's tens of thousands of customers, and it's, it's been hard for us or hard for me over the years. We're gonna get a lot better data out of our CRM, our more advanced CRM tool that we're, that we're working with right now. I mean, we've got it out in the field, beta worked on for about a quarter of our sales force is using it this quarter, and then it goes to all the sales force at the beginning of the first quarter. We'll get a lot better information, at least for me, from a data perspective. But, you know, that's where I'm most sensitive about whether or not there's, you know, what the recessionary pressures are- Mm-hmm ... that we're feeling in the economy. Because those are smaller businesses, and they're, you know, the welding shop, they're the, you know, the small, you know, manufacturer. It's somebody who's maybe only buying $1,000 to a couple of thousand dollars a year from us, in some cases, even less. And that business across it looks like it's, you know, it's soft. You know, we've- Yep. We had a 1.4% decline in that small customer street business, as opposed to the strategic account, where we had much bigger, you know, gains over quarter-over-quarter. And that's where I, you know, across our portfolio of businesses, you know, we see kind of the pressures across the economy in the U.S. with interest rates higher and some slowing of business activity. We're not seeing it with the big strategic customers. Now, we're seeing it in certain industries, but the bigger accounts seem to be, you know, have business activity levels that are have been more, again, industry agnostic here, that looks more healthy in the current economic backdrop. I don't... I do think that there's, you know, Tommy, we're with the program that we put in place with our sales force and with trying to drive them, being sensitive about how they're investing their time and wanting to make sure that we're encouraging them to be more productive and to try and drive their compensation up. There's, you know, there's probably some concern in my mind that some of the smallest customers, you know, may not be seeing their salesperson as often as they used to. We knew we were losing as much as... You know, we did an activity-based exercise on this probably four years ago or five years ago. Our team did it with LKCM Headwater, got into the data at Lawson and tried to really look at fully burdened, our smallest end of our customer base. We were losing money on that, on that 10% of the revenue that was the smallest customers. We were, you know, on a fully burdened basis, we were losing, like, maybe $20 million a year or more. We were losing as much money as it was total revenue. I think it was 5% of the revenue of the business that we're losing $20 million. We knew that we needed to figure out a way to help the salespeople turn those relationships into more profitable relationships, and we didn't want to abandon those customers at all. So we've worked hard at trying to come up with a solution that helps our sales force continue to serve them, but serve them in a way that's not eroding their bandwidth at a level where they can't continue to grow their books of business, and make sure that we're not over-serving, over-serving those customers the way that we historically had been. Thank you, Bryan. So there could be some degradation. There could, I guess, what I'm trying to say, Tommy, there could be some degradation on that Main Street business that, that is not just economic. Yep. It could be that, you know, we just aren't touching them quite as frequently. Yep. I follow. Thank you. Zooming up to the consolidated company level, you've, you've outlined some of the crosscurrents in terms of the demand environment. I just wondered if you could give us a reasonable expectation for fourth quarter. If, if we just compare to the, third quarter results, you did $439 million in revenue, 10% EBITDA margin. Do you have a sense of whether those, those two points are flat, up, down, quarter-over-quarter, if you roll it all together? Thank you. Yeah. So, so Tommy, this is Ron. So a couple of things to keep in mind relative to Q4. So, we do have 61 selling days in the fourth quarter versus 64, I'm sorry, 63 in this quarter, in Q3. So that clearly will have an impact. And even, you know, I think everybody kind of realizes that 61 may not really be a full equivalent of 61. So, you know, as we think about, and Bryan, you know, Bryan commented on this, you know, as we sit here through the first month of the quarter, you know, we are seeing, you know, kind of a similar, you know, mid-single digit... total sales declined, you know, putting Hisco aside since they were not in the prior year numbers. And so, you know, I think as we think about that for Q4, you know, I'm not sure that we're going to see, you know, a fast turnaround here, certainly in November and December. It wouldn't surprise me that the trend that we saw in October, you know, really kind of continue through the remainder of Q4, you know, adjusted for an ADS basis. You know, in terms of the overall, you know, Adjusted EBITDA percentage, we historically do see a little bit of compression there versus, you know, 63-day or 64-day quarters, just, you know, given our fixed versus variable operating cost structure. So we see a little bit of compression there typically in the fourth quarter, you know, nothing, nothing dramatic. But I think if you look back, we do see, you know, a little bit there. So we're anticipating, you know, with the current revenue trends, that we'll probably see a similar, you know, little bit of compression in the fourth quarter versus what we saw in Q3. Thank you both. I appreciate the insight, and I'll turn it back. Thanks, Tommy. Once again, ladies and gentlemen, if you have any questions, please press star one at this time. Our next question is coming from Brad Hathaway with Far View. Your line is live. Hi, guys. Thanks for the time, and thanks for all the insight in the quarter. One question for you. Seems like the bulk of the weakness is still on the test and measurement equipment. In the 10-Q, I think you mentioned that you saw you were optimistic about a recovery in the first half of 2024 in that segment. I'm curious, what gives you that, that optimism, and how do you... visibility into that? Great question. I think there's two things. I'm gonna say there's three things. One is, at this point, we've seen, you know, a turn, a slight turn, but it's definitely a turn from the trough in July to, you know, starting to see our test and measurement activity levels coming back up. It's still down, but it's certainly, you know, we've got visibility around order interest and starting to see better performance there than where it was at its trough. We're also some of the revenue that we decided not to do or to take based on, you know, what felt like some less rational destocking that was going on with maybe some of the players in the market that, you know, we've got a dominant position there. We've got the largest inventory position. We, you know, have been for our key vendors the biggest part of their North American sales through distribution. We didn't wanna be price disruptors. When you try and hold that discipline, you see, you know, you end up losing some revenue that you would consider normally going to you by being more disciplined around price discounting. It used to be that there was more firm discounting boundaries that were enforced by the vendors. There became some sloppiness on that over the last quarter or so, as I think some distributors were trying to move some inventory. And we feel like that that's behind us at this point. And so that's another reason why we think we have more optimism there. And then lastly, there's you know, we're gonna eclipse this relationship that we made a strategic decision at the you know, coming off of 2022 and feeling really good about the progress we've made at TestEquity, but being very disciplined around or focused on wanting to drive more margin discipline ultimately EBITDA margin as well. We were not willing to continue to sell into the channel to a reseller that was at a really low margin for us, but it was real volume. And that volume became a bigger headwind when you match it. The volume that we walked away from became a bigger headwind when you match that up with a weaker backdrop in the industry. So, that was kind of, you know, it probably amplified the negative revenue out of test and measurement year-over-year in the quarter. It did amplify it. Okay, so it's, it's kind of cycling some things that are internal, that you kind of are in control of, as opposed to making kind of a macro prognostication on when T&M will recover? Oh, you know, yes, it's, it's probably a combination of both, but yes, it's definitely there are some things that were internal, that we were- Mm-hmm. -cycling, but then there's also, you know, there's customers that have just been slow to release dollars and to try and replace or upgrade their test and measurement equipment that are ultimately, you know, in our queue that need to replace it, but or, or, you know, add to. But it's, I don't think we're making a call on the economy, as much as we are making a call on our customer RFQs, and, and the conversations there and, and this, and how we see this, you know, see the longer cycle demand for more secularly for the from our customers of the equipment. But there's- Got it. Yeah, I would be concerned about trying to make a call on it, but I'm less concerned that we're making the call versus the fact that we think that we've got better visibility right now than we did 60 days ago. Understood. Okay, great. And okay, and speaking of, and you also reiterated on this call, staying with TestEquity, that you expect to exit 2024, I believe, at 10% EBITDA margins. And that's obviously a long way from where we are today at 7-ish%. I guess, how much of that is part of this demand recovery, or not demand recovery, but part of this kind of recovery you see in the business in H1 2024 versus Hisco integration? I mean, is there a way to kind of break out how you see that significant improvement? Yeah, very fair question. So the cost side opportunity that we've alluded to is actions that have taken place or are in play or in process right now, over 100 basis points. So it's 100 to 150 basis points that have already had actions taken that haven't flowed through. And there's more opportunity to try and optimize the two, you know, the total industrial technologies vertical that we still are working collaboratively across the Hisco TestEquity businesses to kind of unlock, but it's been identified, hadn't been actioned. There's... So I would, you know, kind of. And then there's gross margin actions that are underway, and then there's some gross margin dynamics that we saw, like I just alluded to on test and measurement, that we think that we're gonna be sunsetting or getting the benefit of. But there's gross margin actions but across the industrial technologies vertical, that ought to lend to it. So those two pieces, we think, are largely controllables. And I would posit that that's two-thirds or more of what we think we need to be able to pull that business to our objectives. There's probably a less than a third that would be demand normalization, not demand growth, but and I was actually messing with this math yesterday, and I don't think it's, I think it's hard to get there without having. It's hard to get to over 10% without having some constructive perspective by the end of next year that demand is not, you know, continuing to be as soft as it was this last quarter. But or that we are not engaging in demand that's there because of market undisciplined marketplace. But if the undisciplined marketplace is cleaned up and we're participating in more of the demand that's in the marketplace, or if we're seeing any demand recovery, then that should be with the other two levers more than what we need to get there. Okay. Got it, thanks. And then just finally, on the, you know, congrats on getting the leverage down below 3%. I mean, six months after Hisco, that is pretty impressive. And it sounded like you were optimistic, but retaining a kind of high bar for future M&A. Is that kind of a fair assessment? Well, we're optimistic. We'll start with that. We've got a really robust pipeline of projects that we're working through right now. So they're in different stages of you know the diligence or, you know, locked down, but trying to get them, get them right. And the discipline framework is one that we just wanna make sure we're reiterating, 'cause there's not an urgency on our part to spend liquidity, unless it's absolutely fits, you know, our commercial objectives as well as our financial objectives for the business. And- Got it. There are things that we are actively working on, and they're of all different sizes at this point. Got it. Not tiny, but- Brad, just to just maybe to add a comment on top of Bryan's note. I mean, you saw it on our balance sheet, we currently sit with over $100 million of total cash, and certainly the third quarter from a cash generation for us was a really strong quarter. We, you know, we created $47 million of cash flow from operating activities and, you know, all in, that's $74 million on a year-to-date basis. I know that was in some of our prepared remarks, which really helped, you know, get that leverage, you know, down to 2.9. Even though we have a limitation on how much cash we can offset in our bank-defined, you know, EBITDA leverage. So just didn't want, you know, to get away from the call without, you know, reiterating our cash position. I think it ties directly into your question around acquisitions and having, you know, as we sit today, you know, $280 million of availability through our revolver plus the cash position, and that we do have an additional $200 million accordion feature through our credit facility as well. So we feel like from a liquidity standpoint, we're positioned really well to take advantage of those opportunities as they come up. Fantastic. Well, hopefully, you can find another Hisco out there. Yeah. Excellent. Well, thank you all very much. We've got, we've got ideas on that. Okay, good. Glad, glad to hear. There's been a lot of interest in. You know, I, I've mentioned it in the prepared remarks, but there's been a lot of interest that's been inbound, which has been quite interesting about wanting to, you know, be a part of what we're building. And there's, you know, some businesses that are out there, and there's some assets that are out there that really do fit very well with what we're trying to accomplish and would be real jewels to add to our business and would be very financially and commercially valuable to accelerating us being able to get to some of our objectives long term. So we'll just see whether we can land the plane. Otherwise, we've got some just infill, you know, bunt around the bases, you know, in light of our Rangers win last night, objectives that we think we can, where we can score some runs on acquisitions that really do fit commercially and aren't taking on very big bites. Yeah. Yep. No, that's... All right. Excellent. Well, thanks again, and obviously look forward to seeing everything develop. Yep. Look forward to chatting. Thanks, Bryan. Thank you. We have reached the end of our question- and- answer session, so I will now hand the call back over to Mr. King for his closing remarks. Thank you, Ali. We look forward to speaking with everyone again, when we report our fourth quarter results in early 2024. Additionally, we'll be presenting at the upcoming Baird Conference in Chicago on November 7 and at the Stephens Conference in Nashville on November 15. We hope to see you all there. If you're there, please come up and say hello. Have a great day, and, go Rangers! Thank you. Thank you, ladies and gentlemen. This does conclude today's conference, and you may disconnect your lines at this time. We thank you for your participation.