Good morning and welcome to the MSC Industrial Supply fiscal 2025 fourth quarter and full year conference call. At this time, all participants are in a listen-only mode. 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 event is being recorded. I would now like to turn the conference over to Ryan Mills, Head of Investor Relations. Thank you and good morning, everyone. Welcome to our fourth quarter and fiscal year 2025 earnings call. Erik Gershwind, Chief Executive Officer; Martina McIsaac, President and Chief Operating Officer; and Greg Clark, Interim Chief Financial Officer, are on the call with me today. During today's call, we will refer to various financial data in the earnings presentation and operational statistics documents, both of which can be found on our investor relations website. Let me reference our Safe Harbor Statement found on slide two of the earnings 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. 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 other SEC filings. Lastly, 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 or on our website, 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, Ryan. Good morning, everyone, and thank you for joining us today. I'll begin the call with some perspective on our recent performance and a view into our mission-critical path forward. I'll then offer some commentary on our end markets and overall economic conditions. Greg will cover our results for the fiscal year before passing it over to Martina to provide her perspective on our recent performance and our expectations for fiscal year 2026. I'll then wrap things up by providing some additional color on today's announcement regarding our upcoming leadership transition. As we turn the page on fiscal 2025, I am encouraged by the progress that's happening inside of our company. We entered the year with three top priorities, and those were to maintain momentum in our high-touch solutions, to re-energize our core customer, and to optimize our cost to serve. We're making strides on all three fronts and are doing so in the face of an uncertain environment. While there is still plenty of work to be done, our recent progress is beginning to evidence itself in our financial performance as we return to daily sales growth and we're poised for operating margin expansion once again. First, our high-touch solutions, including vending and implant, continue the strong track record that we've seen all year long. Martina will provide more detail shortly. Second, and most notably, we've begun to see our core customer average daily sales growth rate inflect and turn positive. As you recall, we launched four initiatives aimed at re-energizing our core customer base, and those were realigning our public-facing web pricing, which was completed during our fiscal 2024, upgrading our e-commerce experience, accelerating our marketing efforts, and optimizing seller coverage. The largest milestones occurred at the end of our fiscal second quarter as we launched our upgraded website and our enhanced marketing efforts. Since that time, we've seen a steady improvement in core customer performance. Third, we've made progress in optimizing our cost to serve. We're on track with the supply chain productivity improvements that are yielding between $10 million - $15 million in annualized savings. We improved seller coverage and effectiveness by leveraging an enhanced data-driven territory model and tools that help reps more easily identify white space opportunity. We have a growing pipeline of additional productivity programs that we expect to fuel more gains in fiscal 2026. I'll now turn to the specifics of our fiscal fourth quarter on slide four, where you can see average daily sales perform better than expected and improved 2.7% year-over-year. The return to growth in our core customer base, along with continued strength in the public sector, resulted in better than expected volumes and was the primary driver of the beat. Benefits from price came in as expected during the quarter, contributing 170 basis points to growth year-over-year and 90 basis points sequentially. As a reminder, we took a broad-based, low single-digit pricing action towards the end of our fiscal June. That said, gross margin came in below our expectations at 40.4%, declining 60 basis points both year-over-year and sequentially. The primary driver here was tariff-driven purchase cost escalation, which came in faster and hotter than we expected during July and August. We also saw some other headwinds, such as public sector-related customer mix. We have since taken action with pricing moves in the fiscal first quarter and have begun to see gross margins improve. Operating expenses in the quarter were approximately $306 million on a reported basis, and on an adjusted basis, operating expenses stepped up approximately $8 million year-over-year to $305 million for the quarter, but remained flat on a percentage of sales basis. The primary drivers of the year-over-year increase were driven by higher personnel-related costs and depreciation expense. Sequentially, adjusted operating expenses performed slightly ahead of expectations and declined approximately $6 million compared to the fiscal third quarter. Reported operating margin for the quarter was 8.6% compared to 9.5% in the prior year, and adjusted operating margin of 9.2% declined 70 basis points compared to the prior year. This did, however, exceed the high end of our outlook by 20 basis points. We delivered GAAP EPS, or earnings per share, of $1.01 compared to $0.99 in the prior year's quarter, and we also saw year-over-year improvement on an adjusted basis with EPS growing nearly 6%, coming in at $1.09 compared to $1.03 in the prior year. The positive trend we saw in the fiscal fourth quarter has continued into the first couple of months of fiscal 2026, as our daily sales growth rate ticked up further to 5% in September, and we're expecting to grow between 4% and 5% in October, despite impacts from the government shutdown. As we look ahead, we expect a step up in operating expense to moderate and productivity to build. All of this positions us well in our efforts to restore profitable growth and operating margin expansion in fiscal 2026 and beyond. Turning to the environment, we characterize conditions as stable with some pockets of improvement, while the ongoing overhang of uncertainty remains. Tariffs have moved from a possibility to a reality, as we're now experiencing meaningful price inflation across many areas of the business. Customers are generally understanding of price increases as long as we provide sufficient transparency into tariff-related impacts. That said, the need to provide customers with offsetting cost savings measures is very real, and this plays well into our high-touch and technical value proposition. Our suppliers are describing continued cost pressures on certain raw materials that are heavily China-based or influenced, and if this sustains, it could lead to further price inflation in the coming months. From an end market perspective, we've seen stabilization and even firming up in some of our larger verticals. Aerospace remains strong, while end markets such as heavy equipment and agriculture, which have been particularly weak over the past two years, are at least stabilizing. Some areas of acute softness do remain, such as heavy truck. Looking at slide five, I'm encouraged to see how MSC is faring in this environment. Average daily sales in the quarter began to outpace the industrial production index once again, supported by our improved core customer performance and continued strength in the public sector. With that, I'll now pass things over to Greg for an overview of our financial results for the fiscal year. Thank you, Erik. Good morning, everyone. Please turn to slide six, where you can see key metrics for the fiscal year on both a reported and adjusted basis. Average daily sales declined 1.3% year-over-year, primarily due to softer volumes in the first half of the fiscal year and a slight FX headwind. These headwinds were partially offset by positive price that contributed 60 basis points to growth and some carryover benefits from acquisitions in the prior year. Moving to profitability for the year, gross margin of 40.8% contracted 40 basis points compared to the prior year due to negative price cost and customer mix. Operating expenses stepped up approximately $56 million and $55 million on an adjusted basis, as expected. Combined with slightly lower sales, this resulted in a 190 basis point increase in adjusted operating expense as a percentage of sales. However, we exited the fiscal year with adjusted operating expenses as a percentage of sales performing in line with the prior year. Reported operating margin for the fiscal year was 8% compared to 10.2% in the prior year. On an adjusted basis, operating margin declined 230 basis points compared to the prior year. Together, this resulted in GAAP EPS of $3.57 or $3.76 on an adjusted basis compared to $4.58 and $4.81 in the prior year, respectively. Now let's turn to slide seven to review our balance sheet and cash flow performance. We continue to maintain a healthy balance sheet with net debt of approximately $430 million, representing roughly 1.1x EBITDA. We continued generating healthy cash flow in the quarter. Despite the increase in receivables through lifts and sales, we delivered free cash flow of $58 million during the fourth quarter, representing 104% of net income. This resulted in free cash flow conversion of 122% for the fiscal year, ahead of our annual targets. Turning to capital allocation on slide eight, our highest priorities remain organic investment to fuel growth and advancing operational efficiencies across the business. Returning capital to shareholders also remains a priority. We purchased approximately 496,000 shares throughout the year. Combined with our quarterly dividend, which we increased by approximately 2% this month, we returned $229 million to shareholders in the fiscal year. I will now turn the call over to Martina for a deeper dive into our quarterly performance and expectations for the new fiscal year. Thank you, Greg, and good morning, everyone. Turning to slide nine, we're encouraged by our daily sales trend that continues to improve across all customer types. During the fiscal fourth quarter, we were most pleased by the return to growth of the core customer, with daily sales improving 4.1% year-over-year, driven by both price and volume. National accounts declined 0.7% year-over-year. This customer base continues to see a greater impact from the macro environment, as only 44 of our top 100 customers showed growth in the quarter. However, on a sequential basis, national accounts performed in line with core customers and improved a little more than 1%. Public sector continued its strong trend in the quarter, with daily sales growth of 8.5% year-over-year and 10% sequentially. While this business has been impacted by the government shutdown, with sales growth turning negative in October compared to up low double digits in September, we view this as temporary. Let's now dig a little deeper by looking at some of the key initiatives and KPIs supporting the daily sales improvement in the quarter on slide 10. First, I continue to be pleased by the ongoing expansion of our solutions footprint. Our installed vending count grew 10% year-over-year, or 3% sequentially, to more than 29,600 machines. Average daily sales in the quarter for vending were also up 10% year-over-year and represented approximately 19% of total company sales. With respect to implants, our program count of 411 expanded 20% year-over-year and grew 3% sequentially. Daily sales from customers with an implant program grew 11% year-over-year and represented approximately 20% of total company sales. Improvements to our core customer growth rate have been driven by several programs, which Erik mentioned earlier. The first is sales territory optimization. Moving to the middle of the slide, you can see the increase in coverage effectiveness, which enables us to be more present at customer sites. The number of customer location touches logged by field sales were up double digits year-over-year and mid-single digits sequentially. This increase was achieved with fewer sellers, illustrating the potential that still lies in our sales effectiveness efforts. As we have shared, we've also invested in website upgrades and enhanced marketing efforts to restore core customer growth. In the fourth quarter, average daily sales on the web turned positive year-over-year, with growth in the low single-digit range. We experienced similar improvements in the trend of certain KPIs, such as direct traffic to the web and conversion rates of our top channels. Our streamlined checkout experience drove declining abandonment rates in the quarter, and enhancement to the search function of our site also started showing early positive signs. The percentage of users adding to cart within the first zero to five minutes improved in the low single-digit range, giving us confidence that users are finding what they're looking for more efficiently. Before I move past our quarterly results, I would like to spend a few moments on gross margin. Q4 gross margins came in about 50 basis points lower than our expectations. 20 basis points of the miss can be attributed to mix and other factors. 30 basis points of the miss was due to price cost. While our price realization performed as planned, cost realization did not. A combination of a rapid surge in the number of supplier increases, compressed supplier notification periods, higher sales volume, and a greater mix of direct ship orders all led to higher cost realization than planned during the quarter. In response, we've made further pricing moves during the fiscal first quarter and are seeing gross margins improve off of Q4 levels. Before we get into our outlook, I want to highlight some exciting changes made to the leadership team that will strengthen our commitment to growth and the customer experience. You turn to slide 11. First, we welcome Jahida Nadi to MSC as our new SVP of Sales. Jahida brings two decades of engineering and field sales management experience from her time at Hilti, with a proven track record of consistently delivering above market growth. In this role, she will build on the progress made by MSC towards sales excellence. With Jahida 's arrival, Kim Shacklett will be taking on the newly created role of SVP of Customer Experience. Leveraging Kim's 30 years in the industry, this new team will be dedicated to ensuring that every interaction a customer has with MSC is seamless and memorable, driving customer retention and share of wallet growth. I would like to congratulate both Jahida and Kim on their new roles and look forward to sharing their future success. As for the rest of the management team, John Reichelt is settling in his role as Chief Information Officer. He and the team continue making progress on the evaluation of our systems design. Lastly, our search for a permanent CFO is underway, and we have begun discussions with both internal and external candidates and hope to fill the role in the next quarter or two. Let's now move on to our expectations for fiscal 2026 by starting with our outlook for the fiscal first quarter on slide 12. We expect average daily sales to grow 3.5% - 4.5% year-over-year. The lower end of the range assumes the government shutdown lasts through the remainder of the quarter, whereas the higher end of the range assumes that the shutdown ends before the end of our fiscal quarter. Our expected range also takes into consideration quarter-to-date sales, with September up 5.1% and October trending towards 4% - 5% growth. As a reminder, we returned to growth last fiscal November, making it our toughest comparison to the prior year for the fiscal first quarter. We expect adjusted operating margin to fall within the range of 8.0% - 8.6%, which takes into consideration the following: gross margin to improve from fourth quarter levels and to be 40.7% ± 20 basis points, and an increase in adjusted operating expenses compared to the fiscal fourth quarter of approximately $7 million - $10 million, primarily driven by an annual step up in depreciation and amortization from fiscal year 2025 to fiscal year 2026, a step up in incentive compensation expense, one month of the merit increase, and an increase in marketing investment partially mitigated by continued productivity. The increased marketing investments are the result of the progress we're seeing in our core customer and are all directed towards high return areas of our accelerated marketing program. Turning to slide 13 for our expectations of certain line items for the full year, we expect depreciation and amortization costs to be roughly $95 million - $100 million, representing a year-over-year increase of approximately $5 million - $10 million. This largely reflects carryover from the investments made in technological and digital capabilities, as well as continued growth in vending. Other underlying assumptions include interest and other expense of roughly $35 million, capital expenditures of $100 million - $110 million, and a tax rate between 24.5% and 25.5%. Free cash flow is expected to be approximately 90% of net income and lower than the previous year, driven by working capital needs to support top line growth. To assist in modeling the cadence of sales for the remainder of the fiscal year, the bottom of the slide provides historical quarter-over-quarter averages and key considerations for the second quarter and the back half of the fiscal year. Lastly, we have one extra business day year-over-year in the fiscal fourth quarter, as shown at the bottom of the chart. Looking beyond the fiscal first quarter, we expect incremental margins of approximately 20% at mid-single-digit revenue growth, as gross margin restores to expected levels as we exit the fiscal first quarter and the benefits of our productivity initiatives build through the fiscal year. With that, I will now turn the call back over to Erik for closing remarks before we get into Q&A. Thank you, Martina. I'd like to close out the call on a more personal note. It has been an honor and a privilege to serve as MSC's leader for the last decade and a half. While I'm stepping away from day-to-day leadership, I will continue to serve MSC as Non-Executive Vice Chair of the Board. As I prepare to transition, I've taken some time to reflect on my 30-year history at MSC. Working alongside such an exceptional team has been one of the greatest privileges of my career. We have together grown and transformed this company from a traditional spot-buy distributor into the trusted mission-critical advisor and industry leader that you see today. Most importantly, we achieve this while living up to the values set forth by my grandfather when he began selling cutting tools from the trunk of his car all the way back in 1941. Succession planning and leadership development have been pillars of MSC's values since its inception over eight decades ago. Leaders are chosen carefully, and they're thoughtfully developed over time. Like my grandfather, like Mitchell and David before me, one of my most important responsibilities is developing our next leader and then stepping aside when that person is ready. It is with great pleasure that I hand the baton to Martina, who will succeed me as MSC's fifth CEO. As you all know, Martina has been with MSC for over three years, and she knows every operational corner of our company. We've worked hand in hand during a critical phase at MSC, and she's been instrumental in shaping our operational improvements and our strategic growth initiatives. The board and I have the utmost confidence in her, and we look forward to seeing her build on the momentum that's seen in our recent results and to provide a very bright future for MSC. I'd like to thank everyone on the call for your friendship and your support over the years. It's been a pleasure working with each and every one of you. Martina, I'm going to turn it back over to you to close the call. Thanks, Erik. First and foremost, on behalf of all of us at MSC, I would like to take a moment to acknowledge your extraordinary leadership and the lasting impact you have had on the company. Over your nearly 30 years here, you've guided us through remarkable growth and transformation, and Erik, your leadership means a great deal to all of us. It has shaped the company we are today. Personally, I would also like to thank you and our Board of Directors for your confidence in me and for this opportunity to continue driving MSC's growth and operational performance. During my time leading our day-to-day operations for the past three years, I've been deeply engaged listening to our associates, our customers, our suppliers, and our shareholders, and this has helped shape the strategic initiatives which are starting to be reflected in our results today. With these building blocks and a strong leadership team now largely in place, MSC is set to achieve new levels of growth and further strengthen its leadership position. I could not have asked for a better opportunity. As I look ahead and prepare to step into the CEO role on January 1st, our focus will be on value creation, maintaining our recent growth momentum, and delivering a balanced capital allocation strategy, all while living up to our core values. I believe this is possible by turning our attention to three key areas. First, we must harness the incredible commitment of MSC's talented associates to strengthen our culture. We want to raise our own expectations and inspire curiosity, self-responsibility, and a spirit of continuous improvement. Second, we must build on the momentum from the initiatives that have resulted in the return to growth you see today. We do this by executing on our recent organizational changes to drive disciplined sales excellence and a relentless commitment to customer experience. Third, MSC needs to deliver on its commitment. We must bring productivity and consistency to our everyday work and use data to drive speed and accountability through our operating system. I could not be more excited to step into this role, and I look forward to building stronger relationships with everyone on today's call. With that, please open the line for questions. Certainly. At this time, we will be conducting a 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 question 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 poll for questions. Your first question for today is from Ryan Merkel with William Blair. Thanks. Good morning, and great to see the inflection in the business, and of course, to Erik and Martina, congrats on the new roles. Thanks, Ryan. Good morning. Thank you, Ryan. My first question is just on gross margin, the 30 basis points of the negative price cost. I don't recall ever hearing, Erik, a surge in supplier price increases and costs working through the P&L sort of faster. Can you talk about what sort of happened there and then how you addressed it? It sounds like you raised prices a bit more. Yeah, Ryan, I'll start and then I'll turn it over to Martina just to provide some historic context. You are correct that this was unusual, and obviously, you and I together have seen in this industry a lot of inflation cycles. This one has been fairly unique. We looked back. The concentration of increases that we saw really in a very short window of time was unusual, even unusual relative to a post-COVID inflation period, which had also been historic. I do think it's played out a little differently from prior cycles. I'm going to turn it over to Martina to talk about how we're handling that, and you know we're encouraged about what we're seeing and a bounce back in Q1, but I'll let Martina talk a little more detail. Yeah, so Ryan, the 30 basis points, I was at price behaved exactly as we expected. We were very pleased with the work that our team did. Price contributed 170 basis points right on our forecast, and we were able to work with customers. I think you heard in Erik's prepared remarks, customers are understanding of what we're doing and why we're doing, and we're helping them navigate a very uncertain time. Cost, to give you a little bit of context of what Erik just said, we took a price increase at the end of June, so sort of between mid-June when we locked that increase and the end of August. In those weeks, we took more inflation than we took in nine months post-COVID in 2022. That kind of gives you a feeling for scale. It was both the number of increases, the changes in the increases, the changes in supplier behavior, compressed lead times. We amassed this amount of inflation in the business, and we had committed to pricing stability, so we did not plan to take another increase until Q1. We didn't react, and we have now since taken, I think, the right actions in Q1. Gross margin is restoring. We headed into the quarter with a headwind on price cost. We will exit the quarter in a much better position, and I think we have taken a hard look at our processes. When you think about where we want to take the company, I think good. We're happy with the accountability and the way our team reacted in September, but this is a great example of where our operating system, where we could have, you know, where we need increased visibility because we would have taken more price in the quarter. Got it. Okay, very helpful. For my follow-up, I heard you say mid-single-digit revenue growth was achievable this year if you just use the sequentials and then 20% incremental margins, so that's great to hear. On the 20% incremental margins, I know you're not giving specific guidance, but are you expecting to have gross margins sort of up year-over-year given initiatives and then SG&A as a percent of sales? Do you think that you can work that down year-over-year? You talked about some productivity and then maybe leveling off of the cost increases, so a little more color there on what your expectations are would be helpful. Yeah, so let's start with gross margin. I think we've taken the price increase actions now in the first quarter. We expect to be price cost stable over the cycle and stable through the rest of the year. Obviously, our best opportunity is to accelerate growth and leverage our cost structure, but we do have a very healthy pipeline of productivity projects that will continue to build through the year. We're looking, we're expecting incremental margins in the teens in the first quarter, and we expect that to build through the year. Ryan, just to give a little bit more perspective on that incremental margin commentary, if you look at where we ended up at the fiscal year and add a mid-single-digit growth, assume gross margins stay stable, it implies roughly a $30 million- $40 million step up in OpEx. We feel pretty comfortable achieving that where the business currently sits today. Perfect. Thanks all. Best of luck. Thanks, Ryan. Ryan. Your next question is from Tommy Moll with Stephens. Good morning, and thank you for taking my questions. Good morning, Tommy. I wanted to ask about some of the seller effectiveness KPIs that you updated us on today. Customer touches, sales per rep per day both moved up significantly this quarter. What's behind those inflections and what inning are we in in terms of some of the operational changes that you've made and the improvements that they can drive going forward? Thank you. Yeah, absolutely. We're in this, I'd say we're in about the third inning. We've taken the first steps, and I'm really excited about Jahida joining the team to take the next steps. We have a sales management process in place now that looks at a whole range of leading and lagging indicators, and that is different by role and by level. If you boil it up, the two things that we look at are how often are we in front of the customer as a leading indicator. We need to be on the plant floor in order to drive growth, and then we're measuring sales per rep per day. I believe sales is a science. There are fundamentals that need to be in place. We've taken the first step, which is really around good territory design. We have to make sure our sellers are pointed at the right potential, and we'll continue to optimize as we move forward. Thank you. I wanted to follow up with a question on macro. Erik, I'm looking back at some of your comments. I think you talked about some of your verticals were seeing some firming up, maybe even some pockets of improvement. It's hard to parse, though, because clearly you have some internal initiatives that are helping on the core customer side that may not apply to MSC. If we look at the national account data down again quarter- over- quarter, I think the comment there was that's primarily a macro phenomenon. There's a lot of speculation in the market about will we have potential for some kind of short cycle recovery. I'm just curious on your thoughts about how we can parse the results today and better understand the macro environment. Basically, the question is how much of this is self-help where you're clearly benefiting versus a broader macro where there's still some acute challenges? Yeah, Tommy, it's a really good question in a very murky environment. I think the headlines that we were trying to get across this morning are a couple. One is I would say I wouldn't necessarily call things firming up, but we have pockets and end markets that are meaningful to us that we would refer to as stabilizing. Take heavy machinery and equipment, ag-related end markets where things have been really soft for the last couple of years, and it's not like things have inflected that much positively, but they're at least stable. In a sense, that is up from where we've been. What I would say is you then have pockets, Tommy, of look, there continue to be pockets of strong growth, i.e., aerospace, but also there remain some pockets of acute softness. A great example of that, I actually think you called this out in your note, is heavy truck. That would be an example of an end market that when we talk about the influence on our national accounts program would be weighing us down. As it relates to national accounts, I would say we're seeing some encouraging signs here in September and October. The numbers we shared, slightly down year on year for Q4, have turned positive in September and October thus far. You can imagine October, especially with public sector moving from healthy positive to negative with the shutdown. Core and national accounts actually are doing better and better. I think that's turning, but overall stable with an overhang of uncertainty that's there. If you're trying to parse out how much of this is macro versus micro, you know there's probably some of both going on, Tommy. I would say hopefully you could hear in our prepared remarks, we're encouraged by what's happening in the core customer in particularly is probably more self-help and micro than it is macro. Obviously, there's a little bit of price benefit too, but clearly when we track back the inflection and the improvements, they do go right back to the initiatives that we've been talking about now and what got put in place sort of midway through our fiscal year with the website upgrades and marketing. I think that part of it is a good deal of self-help, and then I describe the rest as stabilizing with still an overhang of uncertainty. Tommy, maybe where you can see a little bit of that self-help, if you think about the core customer, five consecutive months of year-over-year growth, and then you look at the MBI, it still remains below 50%. You know us starting to break that trend a little bit might show some of that self-help and that shining through. Thank you both for the insight. I'll turn it back. Your next question for today is from Chris Dankert with Loop Capital Markets. Hey, morning. I guess I'd just echo the congratulations to both Erik and Martina here. Thanks for taking the question. I guess, Martina. Thanks, Chris. Yeah, I guess Martina, in your comments around the level of price increases we've taken here being on par with 2022, does that imply that we're talking about 5% or more of pricing in 2026? Can you kind of give us some context for how we think about pricing into the new year? I think it's so uncertain. I don't know that I can give you a good answer on that. Our intention is obviously to meet the inflation as it comes. I think we've done that now with our actions in Q1, but it's so uncertain. I really don't know what to tell you. Chris, what I would say is if you think about where the price increase we put at the end of June, low single-digit range, we talked about another low single-digit increase in Q1. If you assume 1.5%, 2%, you're in that 4% range. As we said, we'll make additional pricing moves as warranted. Got it. Thank you for that call. That's really helpful. I guess just on the kind of $30 million- $40 million of SG&A growth in the new year, obviously, that's subject to change, but does that assume digital investment and marketing investment are kind of leveling off here? Maybe you could walk through some of the components of what you're thinking about for SG&A growth? Yeah, Chris, when Ryan referenced that, that sort of ties back to the idea of how we get to a roughly 20% incremental margin at mid-single-digit growth. What that's reflective of is the variable expense to service the growth, the normal inflation we experience in the business, the investment spending that we do, and then offset by the productivity that Martina is driving through the business. There are certain pockets of investments that will be leveling. E-commerce is a good example of that. Although we are, you know, we talked about a DNA step up. That's part of it, our digital investments that are now driving value and improving core customer growth. I will call out, though, Martina mentioned in Q1 part of the OpEx build is a step up in marketing expense. That would be an area where we're actually increasing investment, and we're doing it because we like the returns that we're seeing, quite frankly. It's part of the driver behind core customers. As Martina mentioned, we're channeling those investments where we're seeing the highest return. Understood. Thanks so much for the call there, guys. Your next question for today is from Ken Newman with KeyBanc Capital Markets. Hey, good morning. This is Katie on for Ken. I wanted to dig in a little bit more on these supplier price notifications. What's the risk that it's more difficult to pass these on to customers as we go through the year, especially if they accelerate? I know tungsten prices are up a lot year to date. Just curious how you're thinking about that in the context of further increases from your suppliers. Thank you, Katie. So far, we have been really pleased with the price realization. I'm not worried that we're going to be able to pass it on in a constructive way with our customers. We're obviously working with them always to optimize their costs. That's part of our technical value proposition. I think we're in a great place right now. We were happy with price realization, and we continue to be. We do see more inflation coming, obviously, and it will put pressure on us. That part of the equation, I'm not worried about. Yeah, maybe I'll just chime in. You know, Katie, funny, you mentioned one of the raw materials that obviously we're keeping our eye on and we're hearing about from suppliers in tungsten. It's almost like there's a knock-on effect here from the tariffs, which is out of the gate. What we've been experiencing from our suppliers is direct tariff-related inflation. We do see bubbling, the knock-on effect being impacts on certain raw materials that are drivers of the products that we sell. Tungsten is a great example for cutting tools. As Martina said, our experience with price realization has actually been quite good. Should there be further inflation? You know, if tungsten pricing sustains, I think you're right. We would expect more pricing from suppliers. It's an unknown, but if it does, we would, and we'd expect to pass it along. One of the things we tried to highlight in the prepared remarks, customers are understanding right now because the headline, everything is going up. The key is, number one, we have to be transparent about it, which is why Martina and team made the choice to stick with our pricing cadence and not react in Q4, being clear and transparent. The other side of the conversation is how are we as a distributor bringing productivity to our customers? That's something that's right in our sweet spot. For all those reasons, if the inflation does sustain in this uncertain world, we do feel confident in the ability to pass it along. Great, thanks. That's a really helpful caller. My follow-up is regarding the government shutdown. How do we think about any impacts year to date from this? I know the lower end of your guide implies that it should last through the remainder of 1 Q, but any way to think about what you've seen year to date within the business? I'm sorry, you broke up in the middle, Katie, but I think you're asking how do we see the government shutdown impacting the business? What are we forecasting? We had, as you heard in the prepared remarks, a very strong fourth quarter in the public sector, and that growth continued into September. We've seen some softening now with the shutdown. That will have a small positive mix effect. We don't expect that to be more than about 10 basis points on our margin. The outlook that we gave really is predicated on both ends of the scenario. The high end of our growth range is if the shutdown ends, and the low end of our growth rate is if the shutdown continues to the end of the quarter. Katie, the additional color I'll add there is just, you know, who knows when the shutdown ends, but one thing we can be pretty sure of, at some point, it will end. As I look back on my career in some of my recent years here, one of the things I'm really proud of is the performance of the public sector team. I mean, they continue to deliver and to outgrow markets and to take market share, and we don't see any of that changing. Obviously, Martina mentioned, we went from double-digit growth in September to negative in October. That's just a reduction in spend. The exciting thing for us is at some point that restores. We expect our share capture to continue, and if our momentum in core and national accounts continue and public sector goes back to doing what they've been doing for a while, it creates a potentially encouraging picture. Great, thanks for the call. Your next question is from Patrick Baumann with JPMorgan. Oh, hi. Thanks for taking my questions. I'll echo comments from others. Congrats, Martina, on the new role, and good luck, Erik. It's been great working with you over the years. Appreciate all the help. Thanks, Patrick. On the OpEx side, maybe I missed this, but it looks like the headcount that you report in the earnings deck came down a bit at year end. I am just wondering what drove that, and then what's the outlook for headcount in, I guess, fiscal 2026? On the marketing side, wondering if you could give some perspective on where your spend levels are today and where you think you might need to take that to sustain better results that you're seeing currently in the core. Okay, thanks, Patrick. I'll take the headcount piece. Our cost structure is too high right now for the size of our business. Obviously, the best and the highest way to remedy that is for us to accelerate growth, and we're full speed ahead on those initiatives. In the meantime, we're taking a look at how we perform work, and we're taking a look at performance. What you see in those headcount numbers are two sets of actions. One of them was a reduction in force in our sales force. I believe strongly that we owe our sellers good territory design, so we point them at the right potential. We owe them a strong sales management process with clear expectations and good coaching. When you put those two in place, you can fairly and quickly assess performance. We took out our underperformers, and our sales territory optimization just moved right in. That's why in the prepared remarks, we told you we're actually covering more customers more effectively with fewer people. I'm very happy about that. On the other side of the business, which is the rest of the headcount change, we have an operating system, same thing. We're setting clear expectations. We know how to measure performance, and we're taking action. Asking me about headcount for the rest of the year, we will continue to self-help, and we'll continue to look at our processes as we go forward. I'll take the marketing pad. What I'd say there is we're at our Q1 levels. Obviously, we're going to be at a level that's up from where we were running in fiscal 2025. It's hard to give you a clear outlook. The reason it's hard to say is our investment in marketing. The beauty about the way we're investing, number one, it's been a driver of the core customer. We see the return profile on our investments relatively quickly, and that number will be fluid based upon the returns that we see. Put another way, if we continue to see the returns in the form of improving growth rates with core customers, we'll continue to ratchet up marketing. If for some reason those returns subside, you'd see us tone it down. Either way, it would be captured in our outlook on incremental margins. Got it. A couple of cleanups, just to follow up on the government shutdown impact. Can you remind me, like, your federal exposure? I didn't think you had a big exposure to federal government. I'm just wondering why you saw the slowdown in sales in public sector from, I think you said, double-digit to negative in the October period. Yeah, Pat, our government exposure is about two-thirds federal and, you know, more weighted towards military and defense, just to give you some color around that. Are you seeing pullback in military? Where in federal are you seeing pullback? We're seeing the pullback from September to October was pretty much all in federal, Pat. What I would say, it was not, I mean, I won't get too specific here. It was not across the board, but there were pockets. The negative in October is an average across our, you know, roughly if we're a 10% public sector, I'm rounding here, but around 7% being federal. It wasn't down consistently across the board, but we saw pockets of federal that are off like 50%- 60% where there's clearly no sign of market share loss. Yes, we did see a pretty quick drop. At some point, that's going to end in reverse. Yeah, that makes sense. Thanks for the color. Last cleanup just on price. Can you give any color on any particular product categories that stand out in terms of the increases you're taking, whether it's, are you seeing more inflation in metalworking, in certain MRO products, in exclusive brands? Any color on the pace of price and inflation among those different categories? Yeah, Pat, I would say it wouldn't be shocking to you as to where it basically, the more you get to things that come out of China and the more you get to things that are made of steel, the more inflation we're seeing. For instance, fasteners and our OEM business are seeing really high levels of inflation. Some categories like safety, if we've done a lot of sourcing, Asian sourcing, China sourcing, we'd be seeing it. It wouldn't surprise you. Interestingly, some, of course, in our private brands, but remember, one of the things that we've been talking about, a good percentage of our private brands, particularly in cutting tools, are made in U.S.A. Those have been shielded, and that's been another kind of quiver in our marketing arsenal, if you will, is focus on our made in U.S.A. offering. It wouldn't be shocking where we're seeing the increases. Okay, thanks a lot. Appreciate the time. Your final question for today is from David Manthey with Baird. Yeah, thank you. Good morning, everyone, and congratulations, Martina. Erik, I'll defer my farewell till I see you in Chicago in a few weeks. You got it, Dave. Thank you, Dave. Yeah, my first question is, you mentioned direct ship orders, and I guess I'm just trying to get a read on what percentage of your sales does that represent today? Maybe if you could outline the types of products that are primarily affected by direct ship. Yeah, Dave, I'll take it. We don't really break out specifically direct ship orders as a percentage of sales. I'll tell you, it is the minority. Particularly, it's grown in recent years as we've penetrated customers more and more, whether it's our implant programs, whether it's some of our public sector relationships where we're doing more and more sourcing and value add for a customer. Typically, as those programs ebb and flow, so goes our direct ship volume. I don't think there's anything sort of structural, systemic that I'd call out. If you're looking forward, is something to note as a major headwind or tailwind. We did see, and the team mentioned that sequentially from Q3 to Q4, our public sector business was up considerably. There's a correlation there. When it comes in the form of public sector, you can imagine it's a lot of MRO product, more so than metalworking. That's a little color, but I wouldn't make that much of it for the future. It did, we brought it up because it was a piece of the 50 basis point gap versus where we thought it was a piece of the story. Okay, it sounds like it's measurable. If you're saying it's driven by government and implant and things like that, it does sound like we should see that continue to at least gradually move up over time, right? I mean, it has been, certainly. The one thing I would say to counter it is, remember, this is really, if I look back over the past few years, you've had areas like implant programs and public sector growing and core not, or at least core growing at less than the company average. Counterbalancing would be if the traction we're seeing on the core customer continues, that would be somewhat of an offset. If I think what you're getting at, I don't think you would hear us call out direct ship going forward when it comes to our gross margin performance. Okay, fair enough. Second, reshoring. Are you seeing any benefits for reshoring at this point? When you talk to your core metalworking job shops, are they relaying any optimism on that front, or is it still vaporware at this point? If the definition of reshoring is new plant build-out, we're not seeing it. If the definition of reshoring is an existing global manufacturer that has capacity in multiple locations, inclusive of the U.S., shifting manufacturing to the U.S., that we are, you know, there's tangible data points there, some of which were releases, I think, this week and last week. That we're seeing, we're not seeing new greenfield build-out. Right. Yeah, I was thinking that if not necessarily that you're selling directly to that factory that's reshoring or expanding in the U.S., your machine shops and the metalworking job shops might be seeing an increase in business as they're selling more product to domestic manufacturers. I don't know. I was just seeing if you're hearing anything along those lines. I don't think we're seeing it. We're not seeing it in the numbers yet. I would say that there does remain some optimism about more production coming to the U.S., though. That headline is still there. Dave, I think about auto. You heard from some releases this week, you know, shifting more capacity, manufacturing capacity into the U.S. I think as that comes to fruition, you'll start to hear some of that optimism trickle through into the job shops, machine shops. Yeah, sounds good. All right. Thank you, everybody. Thanks, Dave. Thank you, Dave. Thanks, Dave. We have reached the end of the question and answer session, and I will now turn the call over to Ryan Mills for closing remarks. Thank you, everyone, for joining us on today's call. Our next earnings call will be on January 7th. In the meantime, we look forward to seeing you all at upcoming investor conferences. Have a good day. Bye. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.