Thank you, everyone, for joining us for the 55th Annual Baird Industrial Conference. Great to have MSC Industrial here this year. Again, Erik, probably your swan song here as CEO, for sure. To speak with us today about the company, we have Erik Gershwind, CEO, and Ryan Mills, who's the head of IR. Erik is going to go through a few overview slides, and then we'll go to Q&A. Small room, so we can clearly take questions from all of you if you want to go analog. Otherwise, digital. I'll give you instructions later to send them up here to the iPad. All right? With that, Erik, take it away. Great. Thank you, Dave. Good morning, everybody. Dave, I think you're right. It will be my swan song at Baird. It's been a great conference, so thank you. It's nice to see everyone here, despite the weather. I've seen standing room only before. I've not seen sitting room only. Kevin, at least you're here. Dave, thank you. We're going to be brief in terms of the prepared remarks. This is really intended for those who aren't familiar with the story. MSC is a leading industrial distributor of over 2.5 million SKUs across a wide range of industrial product categories, with revenues approaching $4 billion in revenues. We have a long history that goes back to 1941, and over the years have obtained a leading position in metalworking supplies, which represents one of the categories we sell. Metalworking is roughly 45% of MSC's revenues, and that business is supported by a large network of technical expertise that's located throughout North America and the U.K. We compete in a market that is very large and highly fragmented. The North American MRO market is in excess of $200 billion. Interestingly, the top 50 distributors still, after all these years and all this time I've been doing it, Dave, the numbers, the ratio has changed slightly, but not all that much. The top 50 have a little in excess of a third of the market. That has inched up over time, my time doing this, but not nearly as fast as one would think, which is pretty compelling. Lastly, roughly 95% of MSC's revenues occur in North America, and most of those revenues are levered into the manufacturing sector, which we think also offers a compelling long-term outlook. I'll move to our financials and highlight some of the key characteristics that I think make us compelling, aside from the growth prospects, which I think are probably the first and foremost headline. Beyond that, though, we do have a healthy balance sheet with a net debt- to- EBITDA ratio of just around 1x. We have a strong cash generation profile. We've generated free cash flow in excess of 120% over the past two fiscal years. This has allowed us to return cash to shareholders in a couple of forms, most notably an ordinary dividend, which has a yield around 4% right now, which is certainly relatively high. We've also made some enhancements to our corporate governance that I'll touch on and our leadership that I think are pretty exciting. One is, it's roughly two years now we collapsed. The company was a dual-class share structure company. We collapsed the A and B shares together and did repurchase any dilution within the first year. Dave, you mentioned last month, as part of what's been a planned transition, Martina McIsaac is going to be assuming--she's only the fifth CEO, so the company's been around since 1941 and only the fifth CEO in company history as I transition to the role of vice chair of the board. I'll talk a little bit about--Ryan, are you moving us along here? Yep. Thank you. Perfectly. A little bit about our strategic direction. What I'll do is highlight what we refer to as our mission-critical program. We had a chapter one, which concluded at the end of our fiscal 2023. We are currently in our second chapter of it. There are really three priorities. The first is maintaining momentum on what we refer to as our high-touch solutions, most notably our inventory management programs, our implant programs that are bringing us closer to the customer and have seen strong momentum, which I'm sure we'll touch on. The second is investing in a couple of new areas for growth. Probably the most notable there is what we refer to as our core customer base, which is slightly in excess of half of the company's revenues and is made up of small and medium-sized customers. This is a customer base that has underperformed the company's average for the last decade. There has been an intent focus on re-energizing that customer base through several initiatives that I'm sure we'll also get into. We're pretty encouraged by progress. The third priority is reducing our cost to serve. In this area, Martina in particular has been leading the way here. There are, I think, two exciting areas where we've been making progress for now, with more to follow. The first one is supply chain and optimizing our network. We've been quoting a number of $10 million-$15 million in run rate savings to be achieved. Essentially, now we're on track with that. The other is optimizing our sales model, seller coverage and effectiveness. This has been one of Martina's primary areas of focus and also an area that I'm sure we'll touch on that we're seeing part of what's fueling the re-energizing of the core customer. A lot of heavy lifting has been done. We're encouraged by, in spite of what's a bit of an uncertain environment right now, an unstable environment, some improving performance that—all of the hard work is starting to translate. Just a couple of data points from our most recent fiscal quarter. As a reminder, for those who aren't familiar, we run a fiscal year September through August. Our fiscal fourth quarter was June, July, and August. That's what we reported on just a couple of weeks back. 10% growth in our installed base of inventory management, our vending systems, 20% growth in our installed base of implant initiatives. Both of those are driving market share capture and penetration. I think most notably, a return to growth for the company overall and in particular the core customer base that I mentioned, which is driven by really several factors that Dave will talk about, I'm sure. We did see momentum as we reported on Q4. We shared progress for September, October, at least on the top line. We did see momentum continue into the first two months of our fiscal 2026, despite some uncertainty and, of course, choppiness with the government shutdown. Really excited about the future, the future of the company. I think we're on a great path. I'm excited for Martina. I'm excited to be part of it in a board capacity. I think, Dave, with that, maybe I'll turn it back to you. Okay. Let's launch into some questions. They want us to ask all companies. I'll start off with this. Two quick things. One is on the impact of changing government policies. That could be anything, really. I think people are wondering about the old BBBA and regulation, immigration, M&A, any other factors related to government and how you see that impacting the business today. Dave, what I would say, maybe what I'll do is break the answer apart into two. What we see over time, I could give you kind of a long-term answer and a right-now answer. I think the long-term answer would be, I think most of the regulation, most of what you're describing or deregulation would be favorable to business. For us, MSC, where we're coming from is primarily, as I mentioned, levered into manufacturing and heavy industry. We think most of it is very constructive. I think in the near term, certainly, there's been, I would say, two headlines just in terms of the way things have played out with tariffs in particular has been uncertainty and inflation. I guess certainly the tariffs for sure, but even immigration policy. There are inflationary factors here that we reported on our last quarter. Anybody who's in the industrial space right now is talking about inflation being very real. Over time, we think that the prognosis for North American heavy industry and manufacturing between the tax stimulus and the intent of the tariffs is quite good. Near term, customers do not like uncertainty. They certainly do not like inflation. There has been some choppiness, I would say. The other thing is, actually, the push to inflation has generally been over time fairly good for distributors. I think it is particularly good for MSC because one of the tenets of our value proposition and what we do in the metalworking environment is bring cost savings to our customers. In times of inflation, most of our customers will understand. They all read the headlines. Prices are going up. The discussion quickly turns to, what can you do to help me offset this pressure? I think that plays well into our value proposition. All right. Sounds great. Second, there's this thing, AI. It stands for artificial intelligence, if you haven't heard that acronym. They want us to ask, what are some specific examples of implementation that you've done with AI, how it's impacting the business, and some specific outcomes if you've done any that have resulted from that? Yeah. We have. I don't know that there's a better industry. I mean, AI is changing the world for all of us. I don't know that there's a better application for an industry that's more ripe for AI than distribution and industrial distribution in particular, because for many companies like MSC, we're dealing with, as we mentioned, millions of SKUs, hundreds of thousands of customers. You think about all the permutations, it sets up beautifully for AI to help the business. We've been taken very seriously from a board standpoint of bringing some expertise onto the board. Inside the company, we do have a full-court press. We have a high-potential person with an engineering and data science background who has a team that is living and breathing, working this through the company. Basically, Dave, it's along three dimensions. Number one is revenue growth. Number two is customer experience. Number three is productivity. We see applications across all. We're doing it partly inside the company, in part through partnerships with some folks outside of the company who do this for a living. Whether it's on the revenue growth front, AI has been a big part of some of the marketing success that we've had, that we've talked about fueling the core customer, some cross-sell and upsell activity, customer experience, whether it's looking at our inventory management systems and how we help our customers better manage their inventory, looking at product content build-out, what our customers would experience from us digitally. That would be in the customer service area. On the productivity front, I mean, there's so many applications, whether it's receivables and payables applications, but a lot of the rote functions are AI is being applied there. That's great. Okay. Maybe we could talk about the four key initiatives at the company: web pricing realignment, e-commerce enhancements, accelerated marketing efforts, and Salesforce optimization, and some of the early benefits you're seeing there. Yeah. They kind of fit together, Dave. I mentioned in the prepared remarks that a little over half of our business is what we call our core customers, small and medium-sized shops. What we found over the years is the first pillar that I mentioned of the high-touch solutions, which tend to fit well with larger organizations, had really gained traction. In some cases, those same solutions are not cost-effective to bring to a small and medium-sized shop. We had to take a hard look at our value proposition. We did and identified kind of four areas of focus for the small and medium-sized shops. You mentioned them, Dave. One was our public-facing web pricing, with which all of the changes in the industry had moved out of line. We had been pretty public about that. During our fiscal 2024, made adjustments there. That certainly is behind us. The second was continually upgrading the quality of our e-commerce experience. This was an area that was near one of my first jobs at MSC actually was to build out our early e-commerce presence. It is one of those areas where if you're not moving forward, you're moving backwards because everyone's making progress at warp speed. Our experience went from being what we thought was industry-leading to somewhere in the middle of the pack. With all the alternatives, that's just not good enough. We did put a heavy focus on upgrading our e-commerce experience, which in some ways is a journey. It's painting a bridge. You're never done. I would say the heavy lifting for us was completed with a platform upgrade during the middle of our fiscal 2025, so February, March timeframe. With those two things done, there were two other important drivers. The third was marketing. The company, in many ways, the roots of MSC had been what was known in the industry as a catalog house or a direct marketer, but really embracing the move towards a more aggressive digital marketing build-out, which does a few things. It allows you to get more personal, more personalized, I should say, and more real-time and agile. We launched once the pricing and the web experience were where we wanted them. We've been pretty aggressive about our marketing acceleration, which happened in the back half of our fiscal year. The fourth along the way was, I'd mentioned, Martina, what she brought with her as a kind of a really strong expertise was Salesforce optimization, which I would say is not something we were great at until she came along. Those four together have really started to gain traction. Our core customer, which had underperformed the company, moved to it was encouraging. Sort of bit by bit during the fiscal year, we saw improvement. In our fiscal fourth quarter, returned to growth and actually outgrew company average. We still, we think, have got a long way to go here. Especially as the environment stabilizes, we've got high expectations for that part of the business. Am I wrong to think that Salesforce optimization is the biggest opportunity at MSC? You know, there's so many good ones. I don't think you're wrong. I think there's several. That is, I mean, it's one of the biggest cost bases, certainly. It's where a lot of our investment and people have gone. Certainly, it's the biggest driver of revenue. It is a big area of focus. You may have seen among, we've had a few organizational updates and changes in addition to me, one being the split apart of our, traditionally, our sales organization into two parts, kind of one focused on proactive selling and share capture. In Martina's words, and you may have heard on the earnings call, firm belief that sales is a science. She brought somebody in that she had worked with for many years at Hilti, who's been, obviously early days, but terrific in bringing that sort of mindset. Kim Shacklett, who is a longtime MSC leader and industry leader, and she's terrific, has taken customer experience, which is really about wrapping our arms around every customer, every transaction from a service standpoint. I think you're not wrong to think that it's the biggest opportunity. Okay. Yeah. We look forward to seeing that play out. Maybe we could talk about the solutions offering. Do you expect growth to continue there? How will that benefit the business longer term? I do, Dave. I mean, the solutions part of the business has been growing. It's interesting because it's what Ryan's been referring to as a coiled spring effect. If you followed us for any period of time during this last couple of years where manufacturing has been soft, our footprint has been growing aggressively, much faster than the revenue growth that these customers have been growing. These are some of our best customers where we have a very good handle on market share. In a lot of cases, they're just not spending. We do see, and it's primarily inventory management systems, whether that's a vending or a vendor-managed inventory program, and our implant program where we're placing MSC associates full-time inside of our customers. I think part of the confidence that I have in the growth is our execution of the programs. Part of it is also, Dave, it does seem like we're tapping into something. Our customers, you go and visit customers right now, anybody doing manufacturing, 9 out of 10x when you ask a general manager, an owner of a shop, what's your single biggest issue? What's keeping you up at night? One of the top two things you're going to hear is access to talent and labor. It's reached a fever pitch. The idea of assisting with that, whether it's through an outsourced inventory management program or people inside of our customers' operations that are taking over lower value-add functions for them, be it sourcing, put away, kitting, and then bringing in some of our technical experts and our lean experts who are walking plants and finding opportunities for productivity, I think we're tapping into what's most critical to a manufacturer right now. Does that center on metalworking? Do you lead with metalworking as a key offering for you? We do. I mean, metalworking is critical to what we do, Dave. I would say if you asked what we lead with, it's around improving our customers' output. It's really centered in how do we find productivity for the customer. Productivity for the customer could come in the form of cost down, meaning helping them cut material at a faster rate and less machine downtime. It also could come in the form of helping them grow their revenues faster. If we can help them run their machines faster and speed up throughput, and we have a whole number of people who are capable of it armed with technology that helps them do it, we can actually speed up production, which will allow them to take on more business and not have to add machine capacity. I would say that's the anchor for us is how do we improve our customers' output. And then metalworking is a big piece of the story. Got it. Small room. I'd give you the iPad information. If anybody has any questions, if you just want to raise your hand, we can go to the audience here. Okay. We'll keep going. Could you talk about we already discussed the government more as a regulatory body. Could you talk about end market segments and then government as a customer and what you're seeing currently with the shutdown and how you see that playing out? Yeah, sure. I'll start overall. I think on the last call, we described it as stabilizing end market. We've been in a period of two years. Again, you're getting a vantage point of MSC, whose 70% of our revenues are manufacturing. The vast majority of that 70% would be heavy manufacturing industries. With a couple of exceptions like aerospace, most of those industries for the last couple of years have been particularly soft. What we've seen over the past several months is what I would call stabilization for the most part. You have some pockets like aerospace that are still doing really well. You have pockets like heavy truck that are still really struggling. I would say the overwhelming kind of headline would be stabilizing in an uncertain environment, which we felt like we do not need, we should not need strong end markets to be able to outgrow IP and produce positive growth, just stabilization. As it relates to the government, Dave, public sector is around 10% of our revenues. It has been a good story over the past several years. Of that, we have shared about two-thirds of that is federal, one-third state. Call it, I am rounding here, but around 7% of our business is acutely affected by the shutdown activity. We did call it out on the earnings call that we saw a pretty sharp and immediate impact being felt. To put color on that, public sector had been growing, and it's kind of lumpy, but it had been growing nicely, call it high single digits during the last fiscal year 2025. September, public sector was, Ryan, I believe, double digits. Upload double digits. Upload double digits. We called out we were only about, when we did the earnings call, I think we were halfway through our fiscal month, but it had already gone negative. We did see the effects of it. Hopefully, things will be coming to a wrap. At some point, they will, hopefully sooner than later. Yeah. For you and for all of us that need to travel back home after the conference. The turnout is remarkably good considering it has been. It has been. has been. That's resilience. Maybe you could talk about, I know you don't provide quarterly guidance, but any color you could provide on expectations for sales and profitability the remainder of the fiscal year? Yeah. I think on the revenue side, there was a period of time where we would give an annual guidance. We are such a short-cycle business that most of what we're selling, we're shipping next day. Our view into long-term to try to go out a quarter, let alone a year, is really difficult. We went back to giving guidance one quarter at a time where at least we have a better line of sight. Usually when we give the guidance, we have a month to a month and a half under our belts in fairness. It's just hard to look out. I think on the revenue line, Dave, what I would say is in general, we feel encouraged absent some change in the environment that to who knows that between the stabilization in the environment, the momentum in the growth initiatives, and then of course pricing and what seeming more inflation, that the revenue growth we feel pretty good about for the back half of the year. I will say our fiscal second quarter includes December. It would not surprise the last couple of years, the holiday time, like post-COVID, it seems like the holidays have had a more pronounced effect than I remember before COVID. Usually when they are in the middle of the week, it is even more pronounced. We're on Thursday this year, I think. Right. So yeah. Right. Right. Maybe not as bad as Wednesday. I'd lesser with Wednesday. It wouldn't surprise me if Q2 had more of a seasonal dip than normal with the holiday time. Putting that aside, like looking out, we feel pretty encouraged by the rest of the year and building momentum. On the profitability side, Dave, what we've talked about publicly is targeting an incremental margin on our growth of around 20% at mid-single-digit revenues. Certainly to the extent we do better than that and to the extent there's more price in that number, then we would expect to do better than 20%. Yeah. I'm a big fan of contribution margins for distributors. It just seems like a very logical metric to track and to project using. Beyond this year, when we think about well into the future, if you're able to achieve a mid-teens kind of operating margin, could you talk about the contribution margins as we sit here today between here and there? What should that sort of look like on a normalized basis, assuming it's not overweight price or some other factor? Yeah. Yeah. Look, I think the idea of 20% at mid-single digits for this year would seem to be a reasonable proxy, Dave. I would say over the next few years, given the softness we've had and given some of our own self-help here, that we should have a couple of years here that are considerably better than mid-single-digit growth. If I think about that, and then I think about the work that Martina has been driving on the productivity front, that's kind of a new tool in the tool belt for us, I would expect some years where we could do considerably better than 20%. Okay. Sounds good. One of the another sort of soft-side key initiative is to strengthen the culture. I'm just wondering your impressions on that. What does that mean to you and how important is that? Yeah. I mean, the culture has been, you could imagine with four CEOs over 80 years, 80+ years, and three of the four being from the same family, there's a very strong culture inside of MSC. I think what's exciting to me is Martina has been with us three years now and has gotten to understand, I think like anything in life, they say your greatest strength is also your greatest weakness. There's this incredible commitment to the customer inside of MSC. We will jump through hoops to take care of a customer. That's ingrained in us. It's wonderful. It's something I never want to lose. I think the opportunity that we have, number one is to scale it and make it more repeatable. Number two is to introduce, the word Martina used was a little more curiosity, to say, all right, if we're jumping through hoops to solve the same issue 3x, how do we do a better job more quickly getting to root cause and solving it the first time? I think that's probably the enhancement where she's focused, I would say most notably. Okay. We've got a couple of minutes left here. Again, any questions from the audience at all? Anything? All right. I definitely want to touch on capital allocation priorities and noting that your net debt to capital is currently one. You mentioned the roughly 4% dividend yield. I mean, M&A, of course, but put capital allocation into context, with a heavy emphasis for me on share repurchase, given that situation. You're throwing off a lot of cash, and you've got the situation where it seems like there's an opportunity that's greater than usual. Could you just talk about your thoughts there? Absolutely, Dave. I would say despite leadership transition, that's one thing that you could expect not to change a whole lot. It's been from the start a board-level, top, board, CEO, CFO-level topic. That'll continue. I think in terms of the pecking order, and I'll talk repurchase for sure, but priority one for us is organic reinvestment. We see right now a great path to value creation, just executing basically the roadmap that we've talked about this morning. To the extent we continue to see high-return projects, that's going to get top priority. I think number two, continued steady growth of the ordinary dividend. Given the last couple of years, the payout ratio is higher than we'd want it to be over time in the 90s. We expect with performance between this year and next year or two, that'll come back and we can continue ordinary dividend growth. As for share repurchase, M&A, I would say right now less of a priority given the organic opportunities that we have. In terms of share repurchase, it certainly is a good opportunity. I think I'm mindful of a couple of things. One is interest rates while coming down are still high. That does impact the return profile of a share repurchase. The second thing is, and this is not to say we're not going to do them because we will, we agree with you that it's an encouraging outlook, I do think there's probably more upside than downside in terms of economic recovery in the next 6-12 months in manufacturing. If there were to be any sort of snapback in the environment combined with initiative traction, we could start eating up working capital fairly quickly on a rebound, which would mean inventory and receivables. I just want to make sure we're a long way from being hamstrung at one time, to your point. Share repurchase is in the mix. I would want to make sure that we keep plenty of dry powder to take advantage of a snapback. What we found over time, interestingly, is the best opportunity to capture share from the vast majority of the distributors that aren't as well capitalized is even more so on a snapback than on a downturn because everybody is struggling for cash. We want to make sure we have the inventory on the shelves, the receivables. I would say we'll do it, but we're going to be moderated with that in mind. Very good. All right. Erik, Ryan, thank you very much for the presentation. The guys will be at a breakout session.