Good morning, and welcome to the MSC Industrial Supply Fiscal 2021 Fourth Quarter and Full Year Conference Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I'd now like to turn the conference over to John Chironna, Vice President of Investor Relations and Treasurer. Please go ahead. Thank you, Jason, and good morning to everyone. Erik Gershwind, our Chief Executive Officer, and Kristen Actis-Grande, our Chief Financial Officer, are both on the call with me. We continue working remotely at MSC, so please bear with us if we encounter any technical difficulties. Like last quarter, when I highlighted our recently created microsite dedicated to corporate social responsibility, I'd like to invite you to visit our completely redesigned Investor Relations webpage. We have made it much easier to find information and add content we think you will find useful. During today's call, we will refer to various financial and management data in the presentation slides that accompany our comments, as well as our operational statistics, both of which can be found on our Investor Relations webpage. Let me reference our safe harbor statement under the Private Securities Litigation Reform Act of 1995, a summary of which is on slide two of our accompanying presentation. Our comments on this call, as well as the supplemental information we are providing on the website, contain forward-looking statements within the meaning of the U.S. securities laws, including statements about the impact of COVID-19 on our business operations, results of operations, and financial condition, expected future results, expected benefits from our investment and strategic plans and other initiatives, and expected future growth and profitability. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these statements. Information about these risks is noted in our earnings press release and the Risk Factors and MD&A sections of our latest annual report on Form 10-K filed with the SEC, as well as in our other SEC filings. These risk factors include our comments on the potential impact of COVID-19. These forward-looking statements are based on our current expectations, and the company assumes no obligation to update these statements except as required by applicable law. Investors are cautioned not to place undue reliance on these forward-looking statements. In addition, during this call, we may refer to certain adjusted financial results, which are non-GAAP measures. Please refer to the GAAP versus non-GAAP reconciliations in our presentation, which contain the reconciliations of the adjusted financial measures to the most directly comparable GAAP measures. I'll now turn the call over to Erik. Thank you, John. Good morning, and thanks for joining us today. I hope that everybody remains safe and healthy. As we close the books on fiscal 2021 and we kick off our fiscal 2022, our transformation story is gaining steam. Several years ago, we began repositioning MSC from strictly a spot buy supplier to a Mission Critical partner on the plant floor of industrial North America. Along the way, we executed several significant changes. We re-imagined our value proposition, re-engineered our supply chain, reshaped our sales force, and updated our technology infrastructure. The pandemic came, and we used it as a catalyst to accelerate the path we were already on. We took several bold steps to rethink how we work and to redeploy capital from back office into growth. At the start of fiscal 2021, we rolled out Mission Critical, which was our plan to translate these changes into superior financial performance. We outlined two three-year goals. First, to accelerate market share gains. Our stated target was to reach at least 400 basis points of growth above the IP index by the end of our fiscal 2023. Our first base camp would be this past quarter, our fiscal 2021 fourth quarter, where we expected to be at least 200 basis points above IP. The second goal was to restore return on invested capital, or ROIC, into the high teens by the end of fiscal 2023. We would achieve this by leveraging growth, by executing on gross margin initiatives, and by delivering structural cost takeout of $90 million-$100 million, helping to reduce OpEx as a percentage of sales by at least 200 basis points over that time period. We're now one year into our Mission Critical journey, and I am very encouraged by progress. With respect to our first goal, market share capture, we're gaining momentum. Our Q4 performance was strong, with ADS growth of roughly 500 basis points above IP. Our growth continues to be powered by the execution of the five growth levers that we outlined at the start of the fiscal 2021. Those are metalworking, solutions, selling our portfolio, digital, and diversified end markets. We're also seeing improvement in ROIC. After adjusting out non-recurring costs, adjusted ROIC was 15.4% at the end of Q4, an improvement of approximately 60 basis points over the past year. There's two important drivers behind this. First, profitability. We held gross margins flat on higher sales dollars and had strong price realization in a robust inflationary period to offset mix headwinds. Our structural cost takeout also helped drive profitability, and I'll speak more to that in just a minute. The second driver of improved ROIC was our balance sheet, as we brought down average working capital versus the prior year. I'd add that our board just approved ROIC as a metric driving long-term incentive compensation. Back to our Mission Critical program. We achieved $40 million of cost savings in fiscal 2021, exceeding our original target of $25 million. We're redeploying a good portion of these savings back into growth investments that will further fuel revenue growth and hence improve operating leverage. We've redeployed field sales headcount from back office into growth drivers, including metalworking, government, and our business development program. We're approaching pre-COVID-19 levels on our vending machine signings, and our in-plant program is gaining traction, finishing fiscal 2021 at just over 7% of company sales as compared to 5% a year ago. We continue to upgrade our web infrastructure, including a new search engine, product information platform, and user experience. These have started, and it will continue to drive improved performance through e-commerce. We've executed all of this in the face of very challenging conditions, including severe supply chain disruptions, substantial cost inflation, and extreme labor shortages. While we're certainly not immune to these challenges, I've been quite pleased with our team's response to navigating these choppy waters. We've increased inventory significantly and are leveraging our good, better, best product offering to offer our customers alternatives. As a result, while our service level is not yet back to pre-COVID-19 levels, it is well above most of the industry and is fueling market share capture. On the cost side, we are seeing significant inflation in wages, freight, product costs, and more. Our team has worked hard to minimize the impact of these. Our structural cost and productivity efforts are buffering the effects on our P&L. Looking ahead to fiscal 2022, our outlook is positive. We intend to build on this momentum despite the near-term challenges with supply chain disruption and inflation. With respect to revenue growth, we're aiming for at least 300 basis points of growth above IP, on our way to 400 basis points or more for fiscal 2023. We'll target holding gross margins roughly flat for the third consecutive year by continuing strong price execution. On the structural cost front, we expect to deliver roughly $25 million in incremental savings on top of the $40 million in fiscal 2021. As Kristen will describe in just a bit, we expect this to yield incremental margins of 20% in the likely scenarios for the year. I'll now turn to the details of the quarter and the latest as to what we see on the landscape. The demand environment remained strong during our fiscal fourth quarter. The majority of our manufacturing end markets remained robust, with some isolated but acute pockets of softness, like automotive. This is reflected in the IP reading that continues to show growth and in sentiment readings such as the MBI index, which remain at high levels. That said, the supply chain shortages and disruptions that we began to see in our fiscal third quarter have increased, and while hard to quantify, are certainly constraining growth across the industrial economy in the near term. Product scarcity, freight delays, and extreme labor shortages are also resulting in significant inflationary pressures. We are well-positioned to navigate this environment, particularly when compared to the local and regional distributors who make up 70% of our market. MSC's broad multi-brand product assortment, our high inventory levels, strong supplier relationships, and next-day delivery capabilities are all strengths that allow us to accelerate market share capture. Turning to our performance, you can see our reported numbers on slide four and adjusted numbers on slide five. Sales were up 11.1%, or 12.9% on an average daily sales basis. Our non-safety and non-janitorial product lines grew 20%, while sales of safety and janitorial products declined roughly 14%. Looking at our performance by customer type, government sales declined nearly 30% due to difficult janitorial and safety comps. National accounts improved their growth rate into the mid-teens, while our core customers maintained their growth rates. DCSG grew in the low double digits. September continued the trend of a low double-digit growth rate with ADS growth of 11.1%. Our non-safety and non-janitorial growth was roughly 15%, while safety [audio distortion] [7%]. Keep in mind that the difficult safety and janitorial prior year comparisons continue for the first half of our fiscal 2022, and particularly, the rest of our fiscal first quarter before easing in the back half of the year. Kristen will speak more about our fiscal 2022 assumptions when she discusses our annual operating margin framework in just a bit. With regards to the pricing environment, it remains strong as product inflation continues pretty much across the board. Supplier pricing moves led us to take another increase in August, and solid realization of our June increase allowed us to post a gross margin of 42% for the quarter, down just 30 basis points from our fiscal third quarter, which is less than our typical seasonal drop. Continued price escalations from suppliers and increasing inbound freight costs will be a headwind in the coming quarters, and we'll look to offset this with further pricing actions. I'll now turn things over to Kristen, who will cover our financials, Mission Critical progress, and our fiscal 2022 annual operating margin framework. Thank you, Erik. I'll begin with a review of our fiscal fourth quarter and then update you on the progress of our Mission Critical initiatives. Before I turn it back over to Erik, I'll close with our thoughts on fiscal 2022 and our annual operating margin framework. On slide four of our presentation, you can see key metrics for the fiscal fourth quarter and full year on a reported basis. Slide five reflects the adjusted results, which will be my primary focus this morning. Our fourth quarter sales were $831 million, up 11.1% versus the same quarter last year. We had one less selling day this year in our fourth quarter, so on an average daily sales basis, net sales increased 12.9%. Erik gave some details on our sales growth, but I'll just reiterate that the non-safety and non-janitorial ADS sales grew 20% in the quarter, while our safety and janitorial sales declined 14%. Our gross margin for fiscal Q4 was 42%, and as Erik mentioned, was down 30 basis points from our third quarter and up 40 basis points from last year. Operating expenses in the fourth quarter were $253.3 million, or 30.5% of sales, versus $227 million or 30.4% of sales in the prior year. It's worth noting that our fourth quarter operating expenses include nearly $8 million of expense add back from prior year COVID-19 cost containment measures. OpEx also increased as inflation challenges began in the fourth quarter. Excluding approximately $1 million of acquisition-related costs, adjusted OpEx was $252.1 million, or 30.3% of sales. As expected, our adjusted operating expenses came down sequentially from Q3 due to volume-based expenses from sequentially lower sales dollars and lower incentive compensation. We also incurred approximately $4.4 million of restructuring and other related charges in the quarter. Our operating margin was 11%, compared to 9.8% in the same period last year. Excluding the acquisition-related costs as well as the restructuring and other related costs, our adjusted operating margin was 11.7% versus an adjusted 11.2% in the prior year. Adjusted incremental margin for our fiscal fourth quarter was 15.3%. GAAP earnings per share were $1.18 as compared to $0.94 in the same prior year period. Adjusted for the acquisition-related costs as well as restructuring and other charges, adjusted earnings per share were $1.26, as compared to adjusted earnings per share of $1.09 in the prior year period, an increase of 15.6%. Turning to the balance sheet and moving ahead to slide nine, our free cash flow was $69 million in the fourth quarter as compared to $171 million in the prior year. The largest contributors to the decline were increasing inventory and accounts receivable balances relating to our year-over-year sales lift. I would also note that we repurchased $20 million of stock during the quarter, or about 231,000 shares at an average price of $89.08 per share. As of the end of the fiscal fourth quarter, we were carrying $624 million of inventory, up $26 million from last quarter. We're actively managing inventory levels to support our customers as sales continue accelerating and in light of the ongoing supply chain disruptions. Our capital expenditures were $16 million in the fourth quarter, and for the full year were $54 million, within our expected range of $50 million-$60 million. In addition, our fiscal year 2021 annual cash flow conversion, or operating cash flow divided by net income, was strong at 103%. Our total debt at the end of the fiscal fourth quarter was $786 million, reflecting a $27 million increase from our third quarter. As for the composition of our debt, $234 million was on our revolving credit facility, about $200 million was under our uncommitted facilities, and approximately $350 million was long-term fixed rate borrowings. Cash and cash equivalents were $40 million, resulting in net debt of $746 million at the end of the quarter. As of the end of September, our net debt was down to $728 million. Let me now provide an update on our Mission Critical productivity goals. Our original program goal was to deliver $90 million-$100 million of cost takeout through fiscal 2023, that is versus fiscal 2019. As you can see on slide 10, our cumulative savings for fiscal year 2021 were $40 million against our original goal of $25 million and our revised goal of $40 million. We also invested roughly $23 million in fiscal 2021, which compares to our revised full-year target of $25 million. As we have already begun our fiscal 2022, I'll give you our expectations for this year. We expect additional growth savings in fiscal 2022 of $25 million and additional investments of $15 million. These investments will continue to fuel share gains by building out our digital platform and expanding our sales force. That will result in additional net savings for Mission Critical initiatives of roughly $10 million. As a result of our strong progress on Mission Critical savings, we are increasing our total savings target to a minimum of $100 million through the end of fiscal 2023 as compared to our fiscal 2019 baseline. Let's turn to the fiscal year 2022 adjusted operating margin framework, which is shown on slide 11. Operating margins will naturally vary based on our sales levels. The punchline is that on an average daily sales basis, if sales are up high single-digits, we would expect adjusted operating margin to be in the range of 12.3% ± 30 basis points. If sales are up mid-single-digits, we would expect adjusted operating margin to be in the range of 12%, also ± 30 basis points. This means we expect to achieve 20% adjusted incremental margins at our likely revenue growth range of mid- to high single-digit growth. Let me cover some of our assumptions behind the framework. With regard to sales levels, we are assuming an IP index somewhere between low to mid single-digit growth, and we are targeting market outgrowth of roughly 300 basis points. That yields company growth on an ADS basis in the mid to high single digits. We're optimistic about our growth runway, as most of our end markets are still in the early stages of recovery. We aim to hold gross margins roughly flat with fiscal 2021. It's worth noting that in addition to volume-related expenses, we will face several challenging headwinds, such as labor and freight inflation of nearly $25 million, as well as COVID-19 cost add backs and additional COVID-19-related costs of more than $13 million. I would point out that $3 million of those costs are for an incentive and marketing campaign to help us achieve compliance with the federal contractor vaccination mandate. These costs will likely occur in our first quarter. Please note that the quarterly progression, whether we're talking about sales growth or profitability levels, will not be a straight line. For example, we expect our fiscal first quarter sales to face more difficult comparisons due to safety, janitorial, and government sales. Likewise, operating expenses will also face difficult comparisons in the first half of fiscal 2022, as COVID-19-related cost-saving measures were still in place the first half of fiscal 2021. Finally, keep in mind that our fiscal year 2022 includes a 53rd week, and you can find our fiscal calendar on our IR website. I'll now turn it back to Erik. Thanks, Kristen. Our Mission Critical transformation is gaining speed. With our recent Q4 performance as another strong data point, our market share capture rate is growing. Our efforts around gross margin and productivity improvements are beginning to lift ROIC towards our fiscal 2023 goal of high teens. Looking to fiscal 2022, we're set up for a strong year, including 20% incremental margins in our likely growth range. We're accomplishing all of this in the face of difficult conditions. I'd like to thank our entire team of MSC associates for their hard work during challenging times. Your work is allowing MSC to stand out from competition and delight our customers. Thanks, we'll now open up the line for questions. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Our first question comes from Tommy Moll from Stephens. Please go ahead. Morning, thanks for taking my questions. Hey, Tommy. Hey, Tommy. Hey, Tommy. Erik, I wanted to start on price a cost. What inning does it feel like we're in to you in terms of this inflationary cycle? More specifically to 2022, fair to discern that you're assuming roughly neutral price cost in that gross margin outlook for the year? Tommy, I would say that, generally what happens, as you know, just as a little sort of background, early stage inflationary cycle distributors like us see positive price cost spread. That's what we saw in fiscal 2021 that allowed us to realize for us, particularly with where we have the growth engine pointed, there's a mix headwind that we've talked about in the business of 30 to 50 basis points, depending upon how things move around. To achieve a flat gross margin, we've done it two years in a row. The goal would be to make it three years in a row, plus or minus flat. That requires a positive price cost spread. That was the case in 2021. That would be the aim again in 2022. To answer your question, Tommy, look, at some point, and we're starting to see it now, we're starting to see the purchase cost escalation hit the P&L, which limits the upside. It does feel like there's a lot of legs to this inflation story. I always hesitate to predict the macro, but in terms of innings, it still feels like relative early innings, and I say that because of product scarcity with what's happening with freight and with what's happening with labor, the extreme shortages. It just seems like there's still a ways to go, and that's consistent with most folks I talk to. I would say still relatively early innings of the story, and hopefully, that can continue to fuel more price and positive price cost spread even as costs creep in. Thanks, Erik. That's helpful. Kristen, maybe one for you on the Mission Critical execution you have planned for 2022. Sure. Timing of the savings versus the investments is always an important issue. As we progress through the quarters, are there any that you would point out where savings would significantly be ahead of investment or vice versa? Yeah. Tommy, it's going to be a bit narrower on the spread in the first half of the year, widening in the back half of the year. You can kind of see if you look at what happened Q3 to Q4 sequentially in 2021, that net savings spread narrowed. It's going to stay a little narrower in Q1 and Q2, and then widen out again in the second half. Great. Appreciate it. I should say, based on current expectations, I think as I've articulated to you guys before, we have a pretty good pipeline of what projects are in there, and we have definitely shuffled timing on things as we've progressed through the year. If we expect that to be significantly different, I'll make sure to signal that to all of you in the next call. Fair to say, though, Kristen, that in any given quarter, the expectation would be there's still a net savings spread? Yeah of the degree to which Yeah. Okay. Correct. That's helpful. Thank you. I'll turn it back. You're welcome. Tommy and Kristen, the one thing I did want to add in was that's related to Mission Critical. Other cost factors, like Tommy, if you're thinking about modeling out the quarters, so for instance, Q1, like we had in this fourth quarter, we're facing a prior year comp where there'll be COVID-19 cost measure add-backs. If you're thinking about incrementals or costs, it will likely be muted in Q1. We've got stuff going on early in the fiscal year. The COVID-19 cost add-back comps is one. Two, Kristen mentioned the vaccine incentive and marketing program. Those will both be first-half of year events that will mute incrementals relative to what we'll see in the back half of the year. Got it. Appreciate it, Erik. I'll turn it back. The next question comes from Ryan Merkel from William Blair. Please go ahead. Hey, everyone. Congrats on a good year of execution. Hey, thanks, Ryan. How are you? Good. My first question is on the fiscal 2022 sales outlook. What is your forecast for price inflation? Is it fair to assume that there's some pent-up demand at your customers, Erik, as supply chain issues get solved? Yeah, I think, Ryan, so 2 points. On price inflation, look, tough to forecast precisely. What I would say is implicit in our assumptions is a continued cadence. This has been a very different year. I expect the next fiscal year to be a very different year from kind of our typical cadence, Ryan. What I mean by that is you've been following us for a long time. Typically, we'll have one big price increase late summer that takes us into the early fall. There'll be our mid-year, sometime early in the calendar of the year, that's usually of a lesser amount. What we're seeing now is a more consistent cadence. Price increases that aren't necessarily quite as big on a relative basis, are more frequent given just the rapid fire inflation we're seeing. Continuing that drumbeat, and that cadence is baked in. Your second question had to do with pent-up demand. I think it's a really good point, Ryan, it was one we tried to get across in the prepared comments. You know, tough to know precisely when, but it does feel like, particularly for MSC, we're heavily levered towards heavy manufacturing sectors. I mean, the supply chain right now is really severe, and I'm sure you're hearing this everywhere, no surprise. No question it's constraining growth. I think the good news is the fundamentals and the demand outlook seem solid. We do believe that what this is essentially doing is extending the growth runway and the recovery runway for 2022 and maybe even to 2023. Got it. Okay. That's helpful. Then second, just how are you thinking about the cadence of gross margin through 2022? Should gross margins be higher year-over-year in the first half and then bleed down a little bit in the second half? Yeah. The way I think about gross margin, what you've typically seen from us the past few years, Q4 to Q1 sequentially, is we tend to have a bump up Q4 to Q1 sequentially. I would not expect that this year. As Eric articulated, we have really different timing happening right now related to the price increases. It's definitely going to look more even throughout the year than our margin patterns typically look. There kind of tends to be a little bit of an arc in Q2, Q3, then comes back down in Q4 with our seasonal decline. You'll still see that in the fourth quarter, just not to the same extent that we would typically see. Everything's basically going to look a little more even than it would if you look at sort of our historical sequential trending in margin. Again, it's of course based on what we know today about the pricing environment, costs coming online, and you know, as Erik articulated, everything there is pretty dynamic right now. I think that's how I'd tell you to think about the year shaping up at the moment. Got it. That's helpful. I'll pass it on. Thanks. Thanks, Ryan. Thank you. The next question comes from Michael McGinn from Wells Fargo. Please go ahead. Hey. Morning, everybody. Morning. I wanted to get a metals update from you. Alcoa had some interesting comments about magnesium shortages. There's a lot of concerns in China regarding the energy nat gas prices and what the impact is having on the mills. Can you give us an impact on what potential lag would be from tungsten or alloys, or any sort of commentary you're hearing from rising raws there? Yeah, Mike, look, I would say I don't have any specific commentary to share on our primary metal segment which for us is meaningful. It's not the biggest, but it's a meaningful segment. Look, I think overall, we're hearing a very consistent pattern, and I think we're feeling the effects now and will continue, certainly through the remainder of the calendar year, likely into 2022. I'm not hearing from our customer base, Mike, that it necessarily gets way worse from here. In terms of, you know, material shortages leading to product scarcity, leading to higher prices, longer lead times, we're living it now. We're feeling it now. I have not heard anything of late, and we pulse check our field and our customer base regularly, that would be a material step change from where we are now. That said, what I would say is it's pretty severe now. Got it. One of the major suppliers of cutting tools out there is doing some acquisitions in the software space, CAD. I just wanted to get your take on how well-positioned you are, you think, to grow with those suppliers from a digital footprint standpoint, and just emerging platforms out there, like Xometry and things of that nature. Yeah, Mike, look, what I would say there is we've sort of anchored the MSC value proposition around helping our customers find productivity on the plant floor, speeding up throughput, finding cost out, getting their products out to their customers faster, and solving labor challenges. That's where we sort of have our entire machine aimed. That includes our people and the analog and getting product in and getting people on the plant floor, but it also includes digital technology. We're doing some of it ourselves. We've talked about some of our own innovations. There's a lot of disruptive new technologies out there, some of whom we've mentioned, some of whom have been acquired by suppliers. Certainly, we see, if anything, technology as an accelerator for us to help us do more faster. Ultimately, what this all comes back to, though, is finding productivity for customers on the plant floor. That's where it's all aimed, using many of the ones you're speaking of and the supplier you're thinking of, certainly as a critical partner in helping us do that. Got it. Appreciate the time. Best of luck. Thank you, Mike. Thank you. The next question comes from Hamzah Mazari from Jefferies. Please go ahead. Hey, good morning. Thank you. My first question is just around free cash flow conversion, how you think about that metric as you sort of hit these goals of 400 basis points outperformance, ROIC high teens. What does the free cash flow conversion look like relative to today? Is there room to optimize that? Yeah. Good morning, Hamzah. Yes, I would say there's definitely room to optimize free cash flow. You probably heard us articulate before we've got different initiatives that we want to focus on specific to the balance sheet as we progress with Mission Critical. Hasn't been a big focus area for us so far in fiscal 2021, but definitely an area we're more aggressively turning our sights to here coming in fiscal 2022. If you just think about kind of cash utilization in general, first half of 2021, we were generating a lot of cash. Things were still kind of sluggish. Second half of 2021, we've been utilizing a lot more cash as our sales picked back up, as we built up our inventory to support our customers. I would also expect kind of more of a stabilization of our free cash flow once we get through this kind of inventory build and settled into a little more of a kind of stable working capital pattern for us. Got it. Very helpful. Just my follow-up question, I'll turn it over. Could you just remind us how much of the portfolio today is levered to the production cycle, the OEM production cycle, factory floor, relative to sort of just pure MRO, facility maintenance type product? Just give us a sense of that. I know you flagged automotive as seeing some supply chain issues. Just trying to get a sense of how much of the business today is purely MRO, which may be a little more resilient to supply chain issues. Fair, Hamzah, one thing I would say is that the supply chain issues we're seeing are acute in heavy manufacturing, but they are across the board. I think you'll probably, if you pulse check the portfolio of distributors, you'll see it across the board, not just in heavy manufacturing. To help you size it for us, I'll sort of give you a couple of cuts, an end market view, and a product view. What we've talked about is metalworking products, which obviously tend to be most heavily levered to a production environment, are a little under half of revenues. The balance would be made up of the rest of our portfolio, the Class C parts and things like fittings and fuses and fasteners, safety and janitorial and other MRO. From an end market standpoint would be another way to sort of get at that. We've talked about kind of the five big heavy manufacturing end markets also around 50% of company revenues. That sort of gives you, hopefully, a little bit of a feel for our exposure. That's great. Thank you so much. The next question comes from David Manthey from Baird. Please go ahead. Yeah. Thank you. Good morning. Morning, Dave. First off, in your comments, you're saying 20% contribution margins in your likely growth scenarios. As I'm calculating this out, because of the seven extra days you have in 2022, that means reported growth is going to be 2 or 3 percentage points above ADS, I believe. Under that scenario, your framework sort of implies 15%-20%. I'm hoping you can help me understand where the disconnect is or what am I not understanding there. David Manthey, the framework that we put in the presentation and commented on is the ADS framework. You're right, we do have the 53rd week. The way you can roughly size that is probably about $70 million on sales, rough numbers, an added $0.15 on EPS. Because of the flip-flop we have between 2022 and 2023 on the extra week, we're very focused on working within the ADS framework because of that change. Okay. As we're thinking about contribution margins, if price is a bigger component of growth here, and you're picking up 30 basis points from Mission Critical, and your gross margins are assumed to be roughly flat. There, too, I'm just trying to gauge the teams or the 20% contribution margin. I know there's other cost pressures here, but with all of those positives lining up right now, why wouldn't we see higher than normal contribution margins at this point in the cycle? Yeah. A few thoughts on that. I think the first thing, David, is we are really optimistic about how 2022 is setting up generally. The pricing environment is favorable. We've seen early favorable results on price realization, feeling really good about Mission Critical. I think it's a fair question. We're giving ourselves a bit of wiggle room in the range here because there's a lot of sort of macro things at play in 2022 that may require us to respond differently. We feel like we've got inflation pegged pretty well based on what we know right now. We've already taken our inflation assumptions up a couple times, even in the second half of 2021 here. The other thing I would add around why we may not be getting more aggressive on the incrementals is really around our investment expectations. We've been really thoughtfully prioritizing investment as part of the Mission Critical initiatives. If there's an opportunity for us to potentially do more investment, depending on how 2022 plays out, that's something that we're going to be keeping an eye on and looking for opportunities to invest that have early payback that will help us drive additional growth in 2023. Okay. Thank you. I'll add is just, and Kristen laid it out in the framework. There is massive inflation happening right now. If you just combine the inflation number we gave at $25 million, which is significantly greater than we would see in a normal year on OpEx, + $13 million in COVID-related add back, and then the vaccine incentive and marketing program, that's $38 million right there out of the gate that has to be overcome. Look, we feel pretty good, like in this environment to produce 20% + incrementals, in light of what we're seeing in cost inflation, we feel pretty good about. Okay. Thank you. The next question comes from Adam Uhlman from Cleveland Research Company. Please go ahead. Hey, everybody. Good morning. Hey, Adam. A couple of clarifications. I might have missed it earlier, but when we were talking about the mid to high single-digit revenue growth forecast, how much of that is price? I think you said that it's going to be building a little bit through the year. Is that like we go from 3% - 3.25%, 3.5%, or is that 3%, 4%, 5%? Could you just help me? Let's put it this way. We're not disclosing a specific number, Adam. What I said is that it would be basically what's implied for fiscal 2022 is a continuation of the pattern that we've seen over the past two, three quarters, which has been a more steady drumbeat of increases. We didn't break out a specific number, and obviously, as you can imagine, the price contribution varies in a mid-single-digit or a high-single-digit range. It's a different number. We didn't break it out. Suffice it to say, the implied assumption is that we'll continue seeing steady price increases of moderate size throughout the fiscal year. Okay. Yeah. I'm just trying to put into context the labor and freight inflation of $25 million seems like a lot. As I understand, I think some of your shipping costs have been, you've done a good job with contracts. Is it fair to say that most of that is labor? Could you share any thoughts on, is hiring folks for the fulfillment centers getting any easier with the enhanced federal benefits falling off? Maybe I'll take the first part of that. I'll let Erik chime in on the second part of your question. On the $25 million, the way that I would kind of think about that, it is more labor. I'd say roughly it breaks down to be a bit more than half of that is labor. Freight, we're expecting to go up about 20 basis points. We've got some sort of inflation baked in on kind of other areas of operating expense. Yeah, the labor is the biggest piece of that, to your point. Then I think on the second part of your question on the CFC staffing, Erik, you want to chime in on that one? Yeah, sure, Adam. What I would say is, I think it's been quite a challenge across the economy in several of our locations. We have already made some adjustments to wages, to sign-on bonuses, et cetera, to respond to what's going on. That is all implicit in our 2022 and sort of captured in our 2022 framework. What I would say is, we are starting to see some benefit there from some of the moves made. The staffing is trending in the right direction. Obviously, we're nowhere near out of the woods, and I think that goes not just for us, but for the entire economy right now. Okay, got you. Erik, could you share any stats on the wins that you guys are having with Mission Critical in terms of anything you could share on new markets where you're getting more traction with the sales guys or active customer count or anything along those lines? Yeah, sure. Maybe what I'll do, Adam, look, I think sort of pulling back up for a second, I'll give you a few things that we're tracking carefully. Look, I feel like momentum is picking up here, this transformation story that we've had underway for a while is starting to yield results. On the top line, we talked about we had said, hey, we thought IP was the best proxy over a long period of time for market share capture. We are seeing that spread start to widen. We feel like in this environment, product availability and solving customers' labor challenges really set up nicely for us to accelerate share gains. I think overall, we're picking up steam, I think what I'd point to is really the five key growth levers. That's sort of where we're heads down focused. Metalworking being the first. We've expanded the size of the team. We are approaching 10% share in metalworking. We still feel like we've got plenty of room. We've got a new technology in MillMax that's being rolled out. Still early stages, should fuel that. On the selling of the portfolio front, our big focus has been CCSG and our VMI business, which we're seeing that business return to double digits. Solutions is another big area for us, and if you recall, solutions includes vending, it includes VMI, and it includes implant. On implant in particular, we had talked about taking that portion of the business, which by the way, right now is really resonating with customers because they need help. It's helping them close a labor gap. What we had talked about is moving that business from 5% to 10% of sales. That's at 7%. It saw a nice, healthy jump in a year. VMI and vending, the other portions of solutions, we definitely saw a dip during COVID-19. Signings are pretty much getting back this past month in September, got back to pre-COVID levels. All in, we're seeing solutions revenues as a percentage of total from customers with solutions, that's implant, VMI, vending, in the mid-50s as a percentage of total sales. We feel good about that. Fourth area is digital. We talked about within digital, the primary focus for the last couple of quarters into 2022 was going to be on mscdirect.com. You'll recall our e-commerce as a percentage of total revenues hovers around 60%. It had dropped a little bit during the pandemic, primarily because of some of the large PPE sales that did not go through the e-com, but that number is back to the high watermark of around 60%. I think more significantly though, Adam, under the covers, we look specifically at mscdirect.com to say, are we getting payback? We're seeing mscdirect.com revenues as a percentage of sales actually hit our high watermark greater than 50% of that total e-commerce number, but it actually hit our high watermark in Q4. Last but not least is government, where we're feeling really good about our competitive position in government, and it sounds ironic when I'm talking coming off of a quarter with a - 30% growth number. That really is about safety and janitorial comps. There, we're looking specifically at total customer count and new customer wins. We feel quite good about our position in government. That's a rundown of the big five, as we call it, which is the five levers that we're focused on to widen the market share spread. Thanks, Erik. The next question comes from Steve Barger from KeyBanc Capital Markets. Please go ahead. Hey, thanks. Good morning, guys. Steve. Erik, in the pandemic, there was a lot of concern about double ordering of safety equipment. Now that we're seeing these supply chain constraints, are there concerns about double ordering or unusual inventory build at customers for traditional products? Yeah, Steve, it's actually a great question. It's something we monitor carefully. What I would say is, first of all, we're still watching safety and janitorial, which tends to ebb and flow a bit. Overall, what I would say is we're not seeing a significant change. Where we would see that play out is our order cancellation rate. To date, we haven't seen a significant change there. We are monitoring it carefully. To date, I would say, nothing I'd call out like we were talking about last year with the safety supplies. Got it. I know you have a lot of diverse products across categories like good, better, best exposure, but are there any categories where there are real pinch points and you just can't get stuff right now, or where are you having the most trouble sourcing? Yeah, Steve. I would say issue number one is overseas, is really, just to put it bluntly, the overseas supply chain right now globally is a mess. I think the fortunate position for MSC is as a percentage of our total purchases and our total sales, global sourcing is relatively low for us. I think that buffers us somewhat and gives us a competitive advantage with customers. Where that happens, that is the most acute. I think the other thing that's an advantage for MSC is even where we global source, as you said, most of the lines where we offer an imported product, we have domestic alternatives. Beyond the imports, what I would say is, look, there's a few branded industry suppliers, and without getting into names, but there's a few that have been hit acutely hard. Whether it's micro company specific issues or the sector that they're in. We have some pain points with specific suppliers. I wouldn't necessarily call out a product line or two, more so specific suppliers. Again, the nice thing is with the multiple brand choices, we are able to offer customers alternatives. At the same time, it's why you're seeing our inventory go up, is to make sure that as lead times extend, we're in a position to be there for our customers. Right now, Steve, I will tell you, availability wins out nearly all the time at the moment. Yeah. Just as a follow-up, what kind of products do you get most from overseas? Is it hand tools or gloves or whatever? Just what are you sourcing from over there? It's somewhat across the board. We have some of our cutting tool and metalworking offering is sourced overseas. Certainly, some of our Class C offering is sourced overseas. We do, to some degree, some of the lines like you mentioned, like hand tools, where we do some private branding. Again, as a percentage of total, I think for us relative to peer is not that great. Got you. Thank you. The next question comes from Chris Dankert from Loop Capital. Please go ahead. Hey, morning, everyone. Morning, Chris. I guess first off, we touched on it earlier on the government side, but what does large account growth look like if you pulled that kind of big comp headwind out of there? How are the rest of the markets trending on national accounts? We had said, I think our national accounts number was mid-teens, Chris. There is some, and I don't have the number offhand, I'm sure there is some safety janitorial comp in that number because a lot with the government, but there were some to large accounts. Look, what I would say, probably just a good proxy, Chris, would be if you just look total company, and say total company sales without the safety janitorial at 20%, sort of gives you a feel for how the underlying business is performing. What I would say is on the large accounts, the national accounts side, we are encouraged by progress there. What I'd call out that's more specific to that area is we did have a leadership change, a couple of quarters back. We put somebody in who is a strong longtime MSC sales leader, who's had a great track record and moved into large accounts. We're seeing him move the needle relatively quickly there. Got it. Good deal. I guess, can you just remind us what percent of national accounts contracts can be, or are up for renegotiation within the next 12 months versus those are kind of on a more multiyear cycle? Just trying to size the ability to really keep pace with inflation if things keep heating up here. Yeah. Chris, what I would say, most of our national accounts are in a contract. Most of the times there is an annual cycle. While quarter to quarter it may be tricky to keep up precisely over the course of a year, it is something we are able to do. What I would say is now so more than ever. Chris, this is a very different environment from what we've seen in past cycles. Customers understand if we talk about the need to open a negotiation on price, whereas the same customer that three years ago would have said, "Go pound salt," there's more of a conversation now because of the environment. Got it. Okay. That's helpful. I guess if I could just sneak one more in here. We touched on it with e-commerce, but any updates specifically on kind of the enhanced search, the transactional engine rollout? Just anything specifically on some of those new tools that are kind of helping the sales force today? On e-commerce, the new search tool is in the market now. The new user experience is in the market now. We've launched, what I would say is those are constantly getting fine-tuned to get better and better. We rolled them out during our fiscal fourth quarter, it's still pretty early. The macro, the big metric we track is what are the percent of company revenues flowing through mscdirect.com. We saw a nice tick up from Q3 to Q4. Underneath that, though, our e-commerce team, you can imagine they're measuring 10 ways till Sunday, basically measuring what we call top of funnel to bottom of funnel, meaning for every visitor to the site, what percentage translates into orders, which is a gauge of effectiveness of the site. Early signs are positive there. Again, still very early. Beyond search and UX, we have new features coming out basically at least through the first half of the fiscal that will continue to flow in, and we'll keep fine-tuning the ones that have already been rolled out, like search and UX. Got it. Thanks so much. Our last question comes from Pat Baumann from JPMorgan. Please go ahead. Oh, hi, Erik. Hi, Kristen. Thanks for taking my questions here. Good morning, Pat. Good morning. You just mentioned, I think the leadership change in national accounts, and not sure if I missed this, but did you address the change in overall sales leadership that was announced earlier this month? Kind of interested in what drove the change, what his responsibilities were at this point, how it impacts the transformation, if at all, and then also is the interim replacement kind of a longer-term solution here? Yes. You know, I didn't touch on it in the prepared remarks because we did have the press release earlier on in the month. Eddie did a really nice job for us in sort of fine-tuning the sales playbook and driving execution. We really appreciated his contributions. That said, I have to tell you, I'm really excited by Kim Shacklett taking over. It's on an interim basis, but at the moment, I can tell you there's no search. Kim's been with us for 15 years and another 15 years before that with J&L, which is a metalworking distributor we acquired. She's one of the most well-respected people, not just in the company, but in the industry, with the supplier community, especially. She's excited. I can tell you, we've got thousands of people in the field between outside and customer care that are ready to run through a brick wall for Kim. I think the punchline, Pat, what you can expect is no change in the playbook. I think the playbook that Eddie built with the team is the right one. Kim's going to take it and drive it, and I think rally the team around it. Got it. Okay. Helpful. Then, maybe zooming out a little bit just on pricing. I just want a kind of perspective on how you view your current positioning, I guess, on piece price versus the industry. What I mean by that is, are there any particular product or customer categories where you're less competitive in today that you think you might need to adjust over time in order to grow faster? Then just as a refresh, what percentage of the portfolio today is spot buys versus what you're moving more towards, the contract and solutions-based type of sales? Pat, I'll take it and start. First question on competitiveness of pricing. Look, I think the perspective we've always had at MSC is our goal was never to match market on price. That doesn't mean we don't at times, for large orders, et cetera, or for big customers. In general, our pricing philosophy is such that our goal is to help customers bring down their total cost. If we got into a game of saying the piece price is where we win, we think that's a losing battle. By the way, for our customers, what we share with them is the cost of the products that they're buying from us, industrial supplies, represent well under 10% of the total cost for a manufacturer. The two single biggest chunks are labor and materials. MSC, especially with this Mission Critical pivot that we've made, we've really aimed and pointed the lens at the 50%, 70% + that's labor and materials and helping customers drive costs. To do that, we're investing like crazy in technical resources, in digital resources, in products, et cetera. We've got to be able to charge a premium or we can't afford it. I feel good about our price position overall. Pricing has become much more sophisticated in the world and inside the company. We have a team that's constantly monitoring, and I would tell you, constantly fine-tuning. What you'd hear from them is there's always areas that need to be tuned up or down. In general, we feel good about our positioning. There was another part to your question, Pat, I think it had to do with how the business is migrating? Yeah, I guess I was wondering the percentage that today is kind of spot buy oriented versus more solutions or contract oriented. I shared a metric in one of the responses, sort of as we look at the end state of where we're headed with this Mission Critical program, getting closer to customers. One way we get closer is by embedding not just our salesperson, but a solution inside the customer, whether that's an in-plant vending VMI. That percentage of business is in the mid-50s right now as a percent of total. That would be sort of one proxy. I think beyond that, if you looked at where we have a relationship, and it's not just transactional, it would be where we have a salesperson calling on an account, be that an outside person or somebody via phone, because that's where we're doing more than just providing a spot buy service. That percentage of revenues is closer to 90%. Got it. Helpful. Then kind of more of a shorter-term question. The extra week you get in fiscal 2022, would you normally get extra leverage out of that extra week? I guess, if the 20% incremental, is that just kind of on a normal 52-week basis, and then you have an extra week, which should let you get a little bit better than that? Yeah. The framework is definitely on an ADS basis, and we're doing that because the inverse of what happens in 2022, of course, happens in 2023. We'll continue to give the framework on an ADS basis, which is what the 20% incrementals are based on. Helpful. Okay, thanks a lot. I appreciate the color, and best of luck, guys. Thanks. Thanks, Pat. Take care. This concludes our question and answer session. I'd like to turn the conference back over to John Chironna for any closing remarks. Thanks, Jason. Before we end the call, I'd like to give a reminder that our fiscal 2022 first quarter earnings date is now set for December 22nd, 2021. That's roughly two weeks earlier than we typically report as we continue to drive efficiency throughout the business. With that, I'd like to thank you for joining us today, and we hope you enjoy a healthy and safe fall season. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.