Good morning. Welcome to today's WESCO fourth quarter 2021 earnings call. My name is Candice, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for question and answer at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. As a reminder, it is one question only and one follow-up. I would now like to hand the conference over to our host, Leslie Hunziker, Head of Investor Relations. Leslie, please go ahead. Thank you, and good morning, everyone. Before we get started, I wanna remind you that certain statements made on this call contain forward-looking information. Forward-looking statements are not guarantees of performance, and by their nature are subject to inherent uncertainties. Actual results may differ materially. Please see our webcast slides as well as the company's SEC filings for additional risk factors and disclosures. Any forward-looking information relayed on this call speaks only as of this date, and the company undertakes no obligation to update the information to reflect the changed circumstances. Today, we'll use certain non-GAAP financial measures. Required information about these non-GAAP measures is available on our webcast slides and in our press release, both of which are posted on our website at wesco.com. Also, please note that all references to prior- year comparisons reflect pro forma results as if the company had completed the June 2020 merger with Anixter International on January 1, 2019. On the call this morning, we have John Engel, our CEO, and Dave Schulz, WESCO's Chief Financial Officer. Now I'll turn the call over to John. Thank you, Leslie, and good morning, everyone. It's great to be with you this morning. WESCO's performance in 2021 was exceptional and laid the foundation for the extraordinary value creation opportunity that lies before us. We finished last year with another very strong quarter of market outperformance and achieved new company records for sales, backlog, and overall profitability. Importantly, we reduced our financial leverage to below 4x EBITDA in just 18 months since closing the Anixter acquisition. It's important to note that all of this has been done under the cloud of the pandemic and global supply chain challenges. I am truly proud of our team's commitment to our vision of the new WESCO, and for their focus on providing our global customers with the products, services, and supply chain solutions that they need. As the new WESCO emerges, our brand is evolving to align with our new vision, mission, and values that reflect the unity, growth, and ingenuity that now differentiate our company. We're carrying strong positive momentum into 2022, and the year is off to an excellent start. We strategically invested in our inventories last year to address the global supply chain challenges as well as support our strong pipeline of sales growth opportunities. We're very well positioned to meet increasing customer demand as supply chains are rebuilt this year. As a result, we expect to again deliver market outperformance in 2022, with both expanded margins and double-digit EPS growth. In addition, based on the strength of our continuing execution, we are again increasing the cost and sales synergy targets for our three-year integration program. We are only at the midpoint of our integration plan, but our progress is accelerating as WESCO accelerates its market-leading positions, expanded portfolio, integration execution, and digital transformation investments to build a growth engine that is both resilient and sustainable. Dave will walk you through our 2021 results and 2022 outlook in detail in a few moments. Before I turn the call over to him, I wanna provide a few comments on our secular growth trends, a recent new product and services launch, and our progress on ESG. Moving to page five. As we've outlined over the last several quarters, we are clearly seeing the outsized benefits of our cross-selling initiatives and new service capabilities on our results. We're building on this positive execution momentum in 2022 as we begin to capture additional growth from the large-scale secular growth trends outlined on this page. Over the last few earnings calls, I've talked about how we're capitalizing on the increasing public and private investments in grid modernization, rural broadband, and data center development. Another trend we're well-positioned to benefit from is the rapidly expanding impact of digital and IoT applications on our customers' operations and supply chains. Automation and IoT represent one of the fastest-growing set of applications and solutions across our customer base. Combined with other high-growth technologies such as 5G and cloud computing, automation and IoT improve operational efficiencies, minimize cost, improve decision-making, and enhance the overall customer experience. The IoT applications market is forecast to grow at a 20%+ CAGR, or compound annual growth rate, through the end of this decade, and there's an ever-increasing business need to connect the physical and digital ecosystems to provide a frictionless customer experience. WESCO is very well positioned to capture these additional growth opportunities by combining our product and service capabilities in electrical, utility, data communications, broadband communications, and security. We combine those into complete solutions for our customers. Now moving to page six. WESCO is developing IoT solutions that transform how our customers procure, deploy, and utilize digital products and technologies. Highlighted on this page is an example of a new product with embedded services and cloud-based subscription model that we launched a few weeks ago in the latter part of January. Our new AV conference room as- a -service addresses the growing need for our business customers to make changes to support a hybrid work environment. Employees returning to the workplace have become adept at running their home-based video conference applications. Business conference rooms are commonly outfitted with displays, connectivity devices and equipment that are difficult to use or have no collaboration system at all. Our end-to-end AV as a service solution provides customers with a robust conference room infrastructure, new applications, predictive maintenance, and advanced automation and analytics, all in one package. With our subscription-based model, customer labor costs associated with system maintenance are reduced without the typical upfront capital expenditures. Importantly, customers are provided access to the latest technology and 24/7 support. WESCO is committed to developing digital solutions that support data-driven decisions, improve operational efficiencies, and provide flexibility for our customers. While still only in the early innings of our digital transformation, it's already very clear that our opportunities will be significant. We'll make sure that we continue to share our progress with you along the way. Now moving to page seven. I'm confident that WESCO is investing in the right areas at the right time. We are deepening our competitive advantage and setting the foundation for long-term profitable growth. At the same time, we're committed to responsible ESG operating practices, and a brief update is outlined on this page. As a B2B wholesale distribution and supply chain solutions company, we don't have the same environmental exposure as many of our supplier and manufacturing partners. We do, however, assist our customers in meeting their environmental and sustainability goals, particularly in the areas of energy usage and conversion to higher efficiency products and services. We previously set and achieved our company targets regarding greenhouse gas emissions and waste reduction, and we are very proud of our commitment to safety and achieving best-in-class results. After combining with Anixter, we have now set new improvement goals for 2030 as we are fully committed to using our scale and our resources to drive a better, more sustainable future for all our stakeholders. I'm very pleased to highlight that last year, Forbes named WESCO as one of the world's best employers, as well as one of America's best employers for women for the second year in a row. In addition, we were recently named to Fortune's list of the most admired companies in which we were ranked number two in the wholesalers' diversified category. Lastly, I'd also like to highlight that WESCO has been included in Bloomberg's Gender-Equality Index for the fourth consecutive year in 2022. In summary, WESCO's newfound scale, expanded portfolio and industry-leading positions when combined with the integration plan and digital transformation, represent our catalyst for market outperformance and lasting value creation for all our stakeholders. With that, I'll now turn the call over to Dave, who will take you through our financial results and outlook. Dave? Thanks, John, and good morning. Starting on slide nine, this summary table compares our fourth quarter results to the prior year. As John mentioned, fourth quarter sales exceeded our expectations. When we updated our outlook in early November, we anticipated sales would decline sequentially versus the third quarter, consistent with historical trends and considering the impact of supply chain disruptions. Sequential organic sales and backlog increased 6% and 14%, respectively. We knew that December would be a wild card, and we're pleased by the strength of volume that continued through each month of the quarter. Overall, sales were a record level and up 16% versus the prior year quarter on an organic basis, which excludes the benefit of an extra workday, favorable foreign exchange rates, and the impact of the Canadian divestitures we completed in the first quarter of 2021. On a reported basis, sales were up 18%. Currency added 70 basis points to growth, which was partially offset by the divestitures, while the extra workday added 160 basis points. We estimate pricing added approximately 6 points to sales growth in the quarter. Notably, sales are up 11% versus 2019 pre-pandemic pro forma levels. Our backlog reached another record level this quarter, up 14% from the prior record in September. Each business unit posted backlog increases of more than 60% over last year. Heading into the first quarter, demand continues to be strong. Preliminary January results are encouraging, with sales up low teens year-over-year on a workday-adjusted basis and up high teens compared to the pre-pandemic 2019 level. Gross margin was 20.8% in the quarter, up 120 basis points versus the prior year. The strong gross margin performance reflected effective passthrough of supplier price increases driven by the market's supply-demand imbalance and the benefits of our value-based pricing program. Sequentially, versus the third quarter, gross margin was approximately 50 basis points lower. Mix was a headwind sequentially of approximately 20 basis points, primarily driven by our UBS segment's accelerated pace of growth and shipment- type mix. UBS sales include a higher percentage of lower gross margin direct- ship products than our other business units. The balance of the gross margin impact sequentially was due to a higher allowance for inventory adjustments, including additional write-downs of safety equipment and rising average inventory costs that are catching up with inflationary pricing. Adjusted EBITDA, which excludes the merger-related costs, stock-based compensation, and other net adjustments, was 48% higher than the prior year and represented 6.6% of sales, which was 140 basis points above the prior year and 130 basis points above the 2019 fourth quarter on a pro forma basis. Adjusted diluted EPS for the quarter was $3.17, a record quarter and up 160% from the prior year. As you may have seen in our press release, in the fourth quarter, we recorded a $37 million curtailment gain related to pension obligations in the U.S. and Canada. This is a one-time non-operating gain and therefore excluded from our adjusted results. Additionally, the effective tax rate for the quarter was 16%, lower than our implied guidance provided in November. The lower tax rate was driven primarily by the timing of tax benefits related to foreign-derived intangible income and favorable adjustments to valuation allowance to foreign tax credits as we estimate we now have a higher probability of using these credits in the future. Turning to page 10, you can see that the higher sales, expanded gross margin, and integration cost synergies drove the $104 million increase in adjusted EBITDA. As you'd expect in a strong demand and an inflationary environment, we also experienced higher volume-related operating costs, including shipping and sales commissions, as well as higher expenses for employee benefits and incentive compensation. Finally, we incurred higher expenses related to our investment in systems and digital tools that offset a portion of the growth of adjusted EBITDA. Overall, we delivered strong operating leverage as we generated a 48% increase in adjusted EBITDA on 16% organic sales growth. Turning to page 11, this table compares our full- year 2021 results to the 2020 pro forma results. You will recall that results prior to the merger completed in June were on a pro forma basis. For the full year, sales reached a record level of $18.2 billion and were up 14% compared to the 2020 pro forma level. The record backlog was up 88% over the prior year. Adjusted EBITDA was $1.176 billion, also a record level and 37% higher than 2020. As a percentage of sales, adjusted EBITDA was 6.5%, 120 basis points higher than the prior year. Compared to pre-pandemic 2019 pro forma results, 2021 sales were 6% higher, adjusted EBITDA was 30% higher, and adjusted EBITDA margin improved by 120 basis points. Now let me walk you through the results by business unit beginning on slide 12. Note that references to full- year 2021 results compare the change versus 2020 full- year pro forma results. The sales and EBITDA results in the press release reflect the combination with Anixter as of the end of June 2020. Turning to slide 12. Sales in our EES segment were up 18% year-over-year in the fourth quarter on an organic basis, with double-digit growth in all operating groups. This growth reflects construction sales that continued to increase with the recovery of the non-residential market. We also continue to see increasing momentum in our industrial and OEM businesses in line with the broader industrial recovery. Elevated bidding activity drove a further increase in our EES backlog from its record level in the prior quarter. We also made progress on our cross-sell initiatives and are capturing demand driven by the secular growth trends that John talked about earlier. In the fourth quarter, adjusted EBITDA was $151 million for EES, up 59% from the prior year. Adjusted EBITDA margin was 7.5%, 180 basis points higher year-over-year. This increase reflects effective price cost passthrough, strong cost synergy realization, and operating cost leverage. Full year sales were up 19% with adjusted EBITDA up 62%. As a percentage of sales, adjusted EBITDA was 7.9% for the year, representing an increase of 210 basis points. Turning to slide 13. Sales in our CSS segment were up 9% versus the prior year on an organic basis. We saw high single-digit growth in network infrastructure driven by data center and hyperscale projects, as well as continued investments in cloud-based applications and professional audiovisual installations. The security operating group sales were also up high single digits in the quarter. Backlog was 114% higher than the prior year and increased 11% since September to another record level due to continued strong demand, along with the impact of supply chain challenges on project timing. Profitability was also strong with an adjusted EBITDA margin of 8.3%, 10 basis points higher than the prior year, driven by operating leverage, integration, cost synergies, and the execution of our margin improvement initiatives. I'd point out that most of the safety inventory write-down was recorded in CSS, which negatively impacted its adjusted EBITDA by approximately 28 basis points in the fourth quarter. For the full year, CSS sales were up 9% and adjusted EBITDA was up 13% with adjusted EBITDA margin of 8.4%, a 30 basis points increase over the prior year. This result includes the impact of the inventory write-down that reduced EBITDA margin by 37 basis points for the full year. In addition to our cross-sell programs, CSS is positioned to benefit from numerous secular trends, the need for increased bandwidth, 24/7 connectivity, IP-based security solutions, and the capacity demands related to remote work and school applications. Turning to slide 14. Organic sales in our UBS segment were up 22% versus the prior year. Utility demand has remained strong as both our investor-owned utility and public power customers continue to invest in grid hardening and modernization. In the quarter, we benefited from storm recovery sales in both the Gulf Coast and in the Northeast. However, year-over-year, storm recovery sales were slightly below the prior year activity levels. Our broadband business was up double digits again this quarter, driven by continued strong demand for data and high-speed connectivity, as well as expansion and connectivity requirements for home-based applications. Additionally, we are benefiting from the sales activity related to phase one of the federal government's Rural Digital Opportunity Fund project. Adjusted EBITDA in the quarter was up 63% for UBS, with margin 230 basis points higher at 9.6% of revenue versus the prior year. This growth was driven by the scale benefit of sales and gross margin expansion. For the full year, sales were up 12% and adjusted EBITDA was up 34% with adjusted EBITDA margin of 8.8%, a 140 basis points increase over the prior year. Now moving to page 15. We have an expanding pipeline of sales opportunities and our cross-sell momentum is building. We're capitalizing on the strength of the complementary portfolio of products and services, as well as the minimal overlap that exists between legacy WESCO and legacy Anixter customers. Customers are benefiting from our ability to be the one-stop-shop for their products, services, and supply chain solution needs. Opportunities exist across all three of our global business units. Recall that in June, we increased our target level of cross-sell synergies from $150 million to $500 million of cumulative sales by the end of 2023 due to a larger cross-sell opportunity and faster generation than we had originally anticipated. Based on the strength of our execution and our expanding pipeline, today we are increasing that target again from $500 million to $600 million, and to date have generated approximately $365 million of cross-sell synergies. Recent cross-sell wins in the fourth quarter include our EES business, where we were able to expand WESCO's relationship with a multinational integrated energy company. Another example, CSS was awarded business to refresh wireless access points for 2,100 locations of a national DIY retailer. Finally, our UBS business is also growing through cross-selling, where we recently won a two-year project to provide materials and material management services for a broadband services provider. Turning to slide 16. On the left side of this slide, you can see in the gray boxes that we realized cumulative run rate cost synergies of $188 million in 2021, beating our previous estimate of $182 million. Based on the strength of our execution as well as the accelerated pace of synergy realization, we are increasing our 2022 targeted cost synergies to $250 million and 2023 estimate to our cumulative $315 million. Recall that these savings are relative to the 2019 pro forma base. On the right side of the slide, we've outlined the $315 million of cost savings target by synergy type, and in the chart you get a sense for the synergies that have been realized to date in each category. For example, the estimated $45 million in corporate overhead savings have now been fully realized. The largest remaining synergies are those that take longer to execute, including the supply chain and field operations buckets. Turning to page 17. On the left side of the page, you will see a bridge from full- year 2021 adjusted net income to free cash flow. Working capital was a $613 million use of cash for the year, which was substantially above normal levels. Offsetting this use of cash was a combination of depreciation and amortization and other items, including payroll and benefits, interest, and income taxes that were a net source of cash, and capital expenditures and other IT-related costs of approximately $85 million. Free cash flow was $94 million, representing 16% of adjusted net income below our outlook for the year. Recall our implied outlook for the fourth quarter assumed a reduction in sales sequentially, with net working capital as a source of cash in the quarter. The higher- than- expected sales led to a higher receivables balance and continued strategic investment in inventory to ensure we maintain our customer service levels and support projects in our growing backlog. While the fourth quarter is typically a source of cash, in 2021 net working capital was a use of cash of $210 million in the quarter, including $100 million for inventory. The timing of inventory purchases also led to a lower accounts payable balance, resulting in a cash draw of $100 million in the quarter. On the right side of this page, you can see that we are gaining efficiencies in working capital. Using a five-quarter ending balance sheet average calculation, net working capital improved approximately six days versus 12/31/2020, driven by lower inventory days outstanding and days payable. Moving to slide 18. Reducing our leverage is a top priority. In the fourth quarter, we reduced leverage by 0.2x trailing 12-month adjusted EBITDA and brought our leverage ratio to 3.9x. This accelerated pace of delevering reflects the strength of our B2B distribution model and our ability to quickly return to our target leverage range. Total debt was reduced by $205 million in the fourth quarter, with net debt down by $32 million. Since closing the Anixter acquisition 18 months ago, our leverage is 1.8 turns lower. We remain on track to return to our target leverage range of 2x- 3.5x during the second half of 2022. Moving to page 19, you can see our 2022 outlook. This year, we estimate low- to mid-single-digit market growth. We are encouraged by the economic indicators and expect the demand environment to continue to be strong. However, we recognize that supply chain constraints and the pace of inflation present some uncertainties this early in the year. We continue to expect to outperform our markets as a result of our capabilities and cross-sell programs, which we estimate will deliver incremental sales of 2%-3% above the market. Lastly, keep in mind that 2022 has one more workday than 2021, which we estimate will add 0.5 point of growth in 2022. We expect foreign exchange to be neutral. Also embedded in our outlook is a contract with a utility customer that will shift from a full revenue model to a service fee model. This will negatively impact sales by approximately 0.5 point with no impact to EBITDA. In total, we expect sales to grow 5%-8%. For adjusted EBITDA margin, our outlook is for a range of 6.7%-7%. We expect our effective tax rate to be approximately 25% for the year and adjusted earnings per share in the range of $11-$12. When it comes to free cash flow conversion, we expect to generate free cash flow of at least 100% of adjusted net income. This outlook reflects a handful of assumptions I'd like to walk you through. Our short-term compensation structure is reflected in our margin outlook at a target payout. This is a tailwind of approximately 30 basis points compared to 2021, where we paid out short-term compensation above target. This accrual could change as we move through the year, depending on how our performance compares to target plan. We expect transportation and logistics costs will be an incremental headwind to margin in 2022 of approximately 20 basis points. Reported depreciation and amortization will be lower than 2021, primarily due to the accelerated trademark amortization of certain brands. We recorded $32 million of accelerated amortization in 2021 and expect to record approximately $10 million in 2022. On an adjusted basis, depreciation will be about flat with 2021. On cash flow, we expect to spend approximately $120 million in combined capital expenditures and IT digital investments. On the statement of cash flows, approximately $45 million will flow through capital expenditures, and approximately $75 million will flow through changes in other assets. We will realize the full $18 million of annual interest savings related to the redemption of our 2024 notes that we completed in June of last year. Recall that in 2021, we realized approximately $2 million of the full $18 million benefit. Our outlook does not incorporate the potential benefit of any further refinancing activity this year. Our outlook assumes an average diluted share count of just below $53 million— or 53 million shares for the year. Lastly, this outlook does not reflect any potential changes to tax law in any locations that we serve. Moving to slide 20. Before opening the call for questions, let me provide a brief summary of what we covered this morning. 2021 was an exceptional year for WESCO. We delivered very strong financial results as we finished the first 18 months of integration following the combination with Anixter. Sales were up in every segment, both year-over-year and compared to 2019 pre-pandemic levels. EBITDA margins expanded substantially, driven by our gross margin improvement program as well as value-based pricing execution and an accelerated pace of synergy capture. We increased our market share through sales execution and cross-selling program. We increased our targets for both cost synergies and cross-sell synergies twice in 2021, representing both a larger opportunity and faster execution than we originally anticipated. We reduced our leverage by 1.8 turns since closing the acquisition 18 months ago and are on track to return to our target range in the second half of this year. Lastly, we're making excellent progress on our IT and digital roadmap and are exceptionally well-positioned to benefit from the secular growth trends that John discussed earlier. With that, let's open the call to your questions. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If, for any reason, you would like to remove your question, it is star followed by two. Again, to ask a question, it is star followed by one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. There is one question and one follow-up only. We will now pause here briefly while the questions are counted. Our first question comes from Deane Dray from RBC Capital. Your line is now open. You may go ahead. Thank you. Good morning, everyone, and congrats on the strong finish to the year. Thanks a lot, Deane. Good morning. Good morning. Maybe you start with the demand outlook for 2022. Dave commented on the strength in January. Can you rank order your end markets by expected strength and really, you know, talk about pricing power, the 6 percentage points you realized in the fourth quarter, how much does that carry into 2022? If I can also have you address backlog, how much do you expect to be able to work that down in what time frame? Thanks. Yeah. I'll start, Deane, by saying the execution momentum and just call it the positive results. The build across Q4 was, you know, in retrospect, exceptional. We obviously finished much stronger than we thought in December. What was even more, I'll say, very encouraging and even a bit surprising is with that strong December close, we got out of the gate very strong in January. The strength is really reflected in the backlog build sequentially, the sales growth sequentially in Q4. Then you look at January with where we are out, you know, in terms of prior year preliminary results, overall very strong. In terms of your end- market question, you know, we're seeing very good balance across all the end markets. You know, we're in a demand recovery part of the cycle. It's still a bit supply- constrained, which is why we consciously and strategically invested in our inventories. We think we're exceptionally well positioned with a strong structural setup for 2022. We're seeing demand across all the end markets. Remember, we don't really play in residential, so any perturbations there don't affect us. Industrial is under recovery. You know, you see continued strength that shows up in the EES results. You know, there's a little bit of supply chain challenges in certain categories for CSS, but you know, we probably would have had another point or two of sales growth in Q4 had those supply chain constraints not impacted CSS. With that said, the backlog growth there is exceptional and outpacing the other two businesses. The secular growth trends are, you know, gonna drive, you know, outstanding growth as we look forward. UBS was an absolute standout. Call it blowout performance in the fourth quarter. T he momentum across all three is continuing in the start of this year. Dave and I feel really good about the team's execution, very proud of them, and also the setup for this year. In terms of price, price cost, you know, we're still in the relatively early phases of executing our enterprise-wide margin improvement and expansion program. You know, Anixter had a good couple of years of results under them. When we came together, and we refined that program. We've taken it enterprise-wide. I could not be more pleased with how we've managed price cost and converted that to gross margin expansion in 2021. That momentum is also building. You know, we're clearly in an inflationary part of the cycle. We talked about that in the last earnings call. That's clearly continuing to build. But the important thing to note is it's still supply- constrained, and there's still acute supply chain challenges in certain categories, which is why we constantly invest, you know, consciously invested in inventory. You know, it's our intent to continue to execute this enterprise-wide gross margin expansion program. Our one-two punch is, with outsized top line growth, we get the margin expansion. We're getting excellent operating cost leverage. I'll end on that note. You know, we've taken our three-year synergy targets up again, both for cost and meaningfully again for cross-sell, which on that note, I'll end with by saying I think that's turning out to be the most exceptional synergy. You know, when companies come together, two equal-sized companies in particular, there's always the cost synergies. You know, it's not easy, but we're executing there. But we're getting core margin expansion, and it's the cross-sell synergies that prove to be the most elusive in most acquisitions and combinations. You know, that is really the fundamental driver, I think, in turning out to be one of the biggest growth engines for us. Finally, in terms of backlog, you know, look, we would not have expected backlog to grow sequentially every month in 2021. In my tenure, that has never occurred. That's why it gives us the confidence with the inventory build that we put in place. With that said, we would expect that as supply chains are rebuilt and we continue to convert on the demand side of our value chain, the sales out the door, that we'll begin to work some of that backlog down, Deane. Hey, thank you. That's all really helpful, and I realize I asked a multi-part first question. Just to clarify, on that backlog, you said you would be converting, but any sense, you know, it was up 88% year-over-year. How much earnings visibility do you have from that backlog? Is it linear? Is it front-end loaded? Just give us a sense of how that converts, if you could. Maybe I'll give this measure. It is all three businesses, all three SBUs grew, you know, above 50%. Their backlog is north of 60%, so it's very balanced, first point. Second point is it's comprised of a balanced mix, Deane, of short- cycle, mid-cycle, and longer- cycle orders. Longer cycle being bigger projects, not different than what our normal composition will be. I will say this, we don't talk about this often. The margins in our backlog also are at a higher level, and that, you know, had been the case as we were building the backlog in 2021. That's another very encouraging sign in terms of, you know, our ability to manage in this supply-constrained value chain. It supports, you know, as those backlogs convert to sales and out- the- door sales and shipments, you know, we'll continue to see the margin contribution, with the, you know, 'cause the margins are at an elevated rate versus what they were a year ago in the backlog. Thank you. That's all very helpful, and congrats. Thanks, Deane. Thank you. Our next question comes from David Manthey of Baird. Your line is now open. Please go ahead. Okay, thank you. Good morning, everyone. Good morning. I'll just say I like the clean and green new logo. It looks good. That looks really nice on the slide deck anyway. I'm sorry to always be the corporate expense guy here, but it was lower than we estimated this quarter. I was wondering, Dave, if you could talk about why that downticked from the prior two quarters despite the really strong sales and earnings performance you saw here this quarter. As you look to 2022, based on you mentioned the 100% target incentive comp you're accruing for. But I assume now, you know, technology and other costs, what should we expect for corporate expense in 2022? Yeah. Primarily the change in the corporate expense is related to the incentive compensation accruals and some of the true-up that we did in the fourth quarter relative to what you saw in previous quarters. As we think about, one of the other things that we've discussed quite a bit is, you know, we are on this digital and IT transformation. More of those costs will reside in the corporate segment, particularly some of the enterprise-level resourcing that we are hiring and we have working on some of our projects. You will see a tick-up in the corporate segment expenses on a like-for-like basis, excluding the incentive accrual. Okay. Could you scale that for us or just higher is what we're gonna do? It'll be higher, and it's incorporated in our adjusted EBITDA outlook that we've provided you. Yeah. Okay. Yeah, fair enough. On gross margin and inventory, it sounds like supply is still tight and prices are still going up, but your inventory position is really strong, so you should continue to enjoy benefits of inventory gains in 2022. At the point where those things do catch up, can you just give us an idea of those, the short-term inventory gains that all distributors are seeing right now as they use their balance sheets? Can you talk about what that'll look like as that normalizes out? Is it 50 basis points? Is it 100 basis points? What kind of magnitude are we thinking there? Yeah. Dave, it's extremely hard for us to calculate that, but we are very clearly seeing the benefit of price running ahead of cost as it hits our income statement. That's primarily because we are an average cost inventory company. As you think about our balance sheet, you know, as we are replenishing inventory, that average cost given inflation is going up. It has still been a net positive for us that over the course of time, all other things being equal, including no more inflationary pricing from suppliers, you know, that favorable balance will continue to deteriorate. Again, we're in an inflationary environment, you know, we believe that we've got a long runway on that cost- of- goods improvement. Dave, the other thing I would mention is, you know, Anixter pre-acquisition close, they had put in place an enterprise-wide margin improvement program. I know we've talked about that in the past. You know, cost price environment was different back then, you know, taking you back into 2018 and 2019. They had enjoyed 10 quarters in a row of core gross margin expansion prior to acquisition close. That's the program that we refreshed. They wanted to refine it as well, and we took it enterprise-wide. It's very focused on value-based selling. I think the other thing I see that's very different with the new WESCO is that it's not just cost plus a markup, you know, standard distribution. It's really focusing on the value we're delivering on customer and pricing for that value. We're still, you know, we still have a lot of legs left, a lot of runway left, let's say, in this enterprise-wide margin expansion program. I think as the price-cost effect occurs, like Dave said, we're fundamentally looking at expanding the core margins and seeing terrific results on that front. Final point is, increasingly, the digital applications that we're investing in, you know, no one unlocks the power of our big data. There's just a plethora of opportunities that continue to drive margins up. I alluded to a few of the digital products that we, you know, launched inside our four walls in the last call. One is focused on intelligent pricing, another is focused on an AI-enabled product search function. Those are two that are underway now and we're deploying across our enterprise. Again, I think that we're, you know, we see this as having a lot of runway in front of us in terms of core margin expansion. Sounds good, John. Thank you very much. Thanks, Dave. Thank you. Our next question comes from Sam Darkatsh from Raymond James. Your line is now open. Please go ahead. Good morning, John. Good morning, Dave. How are you? Morning, Sam. Morning. Couple questions. I suppose these are for you, Dave. My first one, I apologize, I'm gonna be throwing a bunch of numbers at you. I'm trying to reconcile the EBITDA guidance for 2022. It's effectively $100 million-$200 million up on a year-on-year basis. When I try to look at some of the line item guidances that you've been providing, I'm getting something much higher than that. For example, you have $50 million in the variable comp reset. You've got $60 million or so in synergies. You've got, call it, I don't know, $25 million, $30 million in PPE write-downs in fiscal 2021. I know you have the $30 million logistics cost as a headwind, but I'm still getting, you know, north of $100 million in good guys for 2022. Then you have whatever you're gonna get EBITDA from the 5%-8% organic. I'm trying to figure out what why you're only guiding $100 million-$200 million up on a year-on-year basis. I know there's digital, but that can't be that dramatic. It doesn't sound like you're assuming any major retreat in price cost. I'm just trying to understand what the offset is that I might be forgetting, Dave. Yeah. I think the one thing that, you know, we've not provided any of the details behind it. We did hint to this in our fourth quarter discussion for 2021. As we've talked about, we are investing in our transformation and in digital. That means expanding the capabilities and expanding the headcount that we have applied to our big data and our enterprise solutions. Right now, that is one of the drivers that we've not called out the specifics, but that would be a headwind as we think about the 2022 outlook that you've just discussed. I wouldn't call it a headwind, Sam. I mean, I'll take you back to when you think about the top strategic rationale for why we put these two companies together. That was in the top three. You know, I'll take everyone back to, 'cause it's out there in the record books on what we said in our Investor Day in 2019 about, you know, consolidation that's occurring in our part of the value chain, you know, the impact of digital. We're at the beginning part of the S curve. Look, I think, you know, we couldn't be more pleased with the power of this combination. We're getting core margin expansion. We're getting outstanding operating cost leverage. As I mentioned earlier, the breakout move is the top line growth and outperforming the market. It gives us the ability also to invest in our digital transformation while still delivering, you know, outstanding year-over-year incrementals. You know, it's a beautiful thing when a plan comes together. Two other things I'll highlight for you, Sam. The first is that we are seeing substantial pressure on our leases. As you think about the demand for well-suited warehouse space, as we're going to renew leases, as we're looking for new opportunities to expand our footprint, to consolidate our footprint, we are seeing considerable pressure from our occupancy costs. The other thing is, we've been hiring people throughout 2021. As I'm sure you're all seeing in the press, there is substantial pressure on wage inflation, and that is another headwind that we've got built into our outlook. Again, the good news is you put that all together, Dave, and you know, with how we've outlined 2022 is positioned to be another very strong year in the journey of incremental value creation. Agreed. Second question, the synergies for 2022, the $60-some odd million incrementally, I'm guessing a big chunk of that is gonna be supply- chain- related. As such, because your vendor negotiations typically occur in the first quarter, might we then imagine that those synergies will be more front-end- weighted this year as it works through your cost of sales? Sam, it's not just supply chain. I'd like to make sure it's clear to everyone it's operations plus supply chain. I mentioned this in the last earnings call that we're in the early phases of implementing a new WMS/TMS package. That's also a key enabler in terms of in conjunction with our supply chain network optimization. We've done a lot of the easy stuff. As we roll out the new WMS/TMS across our network, that enables even further streamlining and consolidation of our operations and how we manage our, you know, our part of the supply chain and down to our supplier base. It's really important to, you know, to understand that we're in those phases of the integration plan now. We're midway through. This was always the way we laid it out. This is the second part of our three-year- plus plan. You know, that's what is in our priority list as we go through this year. The synergies will be ratable as the year progresses then? Is that the takeaway, John? I think, Sam, that's the right assumption. Yes. They're not front-end loaded. That was the short answer, Sam. I think as we work the supply chain network optimization, you know, we've done a lot of rationalization in the first 18 months. We're literally taking out dozens of facilities. This optimization is the second half of this integration program. Look, I'm really looking forward to seeing the benefits of that when that's all in place. Thank you both. Yep. Thank you. Our next question comes from Nigel Coe of Wolfe Research. Your line is now open. Please go ahead. Thanks. Good morning, everyone. Obviously, really strong finish to the year. Congratulations. I wanna go back to the EBITDA margin bridge, just to, you know, just to dot the i's and cross the t's on the price cost, because, you know, one of your competitors talked about, you know, a slight step back, you know, with the inflationary pressures. Just wondering, you know, we're still expecting price cost to be a tailwind in 2022. Really my question is, you know, how do you see the 20, 50 basis points, you know, shaking out amongst the segments? The spirit of the question really is that CSS was flattish in 2021. Obviously, inventory was an effect of that. Just wondering if any of the three segments is pushing or pulling that range more or less? Yeah, Nigel, it's Dave Schulz. Outside of the adjustment that you just discussed related to the inventory write-downs, you know, we would expect all of our business units to be within the range of the adjusted EBITDA that we've outlined here. There aren't any specific or unique items that are impacting one business unit versus the other. We see the market opportunity relatively consistent across the three SBUs, great opportunities against all three. All three have margin improvement programs that they're continuing to execute. We're keeping a sharp watch on our cost structure. You know, nothing that would be unique or one SBU would have a less opportunity or greater opportunity than the other to expand from an EBITDA margin percentage. That's great. Very, very clear. Then on the inventory, you know, good job on sort of like stocking up there. Would you expect to still build inventory you know through the first half of the year as per normal? We're sort of more back on a normal seasonality basis here. Then just any color on sort of how you're faring on stockouts and availability of product versus some of your competitors. On the first part, I would say, and this ties into Deane's question, Nigel, at the beginning. You know, to the extent as supply chains are being rebuilt and as our demand picks up and we're able to support even higher out- the- door sales and backlog starts to come down, that, you know, then what we've done strategically with inventories will support, you know, will support that. We would expect that, you know, the inventory build approach that we took in 2021, that, you know, we're ratcheting that back. I only say that is based on that assumption, because to the extent that, you know, we continue to significantly outperform the market, demand picks up, but our backlog continues to grow, I just, you know. We're gonna make sure that we position working capital to support that. But I think we do expect as we move through the year and supply chains are rebuilt, more of a return to normalcy. Relative to your stock- out question, we're laser focused and have a, you know, electron microscope on our availability and our fill rates. I will tell, you know, that was a driver behind how we managed our working capital and particularly inventory. We've been able to maintain very strong availability and fill rates even in this supply- chain-constrained global environment that we're operating in. You know, we pride ourselves on being, you know, kind of the oasis in the desert or the lighthouse in the storms, quote unquote. Really, it is our job. It is our job as a leading B2B distributor to manage the supply chain's challenges that our customers have. I think what you're really seeing is it's the power of our scale and our supplier relationships and using those together to ensure continuity of supply for our customers. I, you know, I couldn't be more pleased with how the team's performing on that. You know, we're really well-positioned, again, as I said, structurally set up well for 2022. I'll end on this point, and this is more of a strategic point. Supply chain integrity, supply chain resilience, supply chain sustainability, that's core to our value proposition, working with our supplier partners, but on behalf of and in support of our customers. Great. Thanks, John. Thank you. Our next question comes from Thomas Moll of Stephens. Your line is now open. Please go ahead. Good morning, and thanks for taking my questions. Morning. Hey, Tommy. wanted to circle back to the outlook you provided on the adjusted EBITDA margin for the coming year. If I look at the midpoint of the 20-50 basis points improvement that you called out, and I try to sum up everything we've heard thus far, I think you're communicating that in both terms of gross margin rate and on operating expense leverage, both of those should improve on a full- year basis. If you could just confirm or push back there. Then anything you would want to call out on the sequential progression on the SG&A line, even qualitatively, just to help us think about the quarters would be helpful as well. Yeah. Let me just, again, we're not gonna guide specifically the gross margin versus the operating expense. We provided you with the adjusted EBITDA margin. We've made some comments about our margin improvement program, which is primarily focused on gross margin. You know, we're gonna execute hard against that, but you know, we're focused on providing you with that adjusted EBITDA outlook. In terms of how we think about the quarters for 2022 from an SG&A perspective, you know, obviously, there is going to be a ramp-up from Q1 to Q2 in SG&A expenses. That's primarily related to the timing of our merit increases for the organization, all streamlined, effective April 1. We see that typical step-up in SG&A from Q1 to Q2. The balance of the year will primarily be based on the volume and sales profile. We have assumed a typical seasonal trend by quarter on our sales. We typically see a sequential decline from Q4 to Q1. We anticipate that that will occur again here in 2022, particularly given the strength of our fourth quarter. We've assumed that, you know, given the project backlog and the exposure of our business to seasonality, we'll see sales grow Q2, Q3, and then we'll have a sequential decline from Q3 to Q4. So the SG&A pattern will follow a similar rate with the exception of that large merit increase that will occur and impact SG&A in the second quarter. Thank you. That's helpful. As a follow-up, I wanted to talk strategically on your M&A pipeline here. With the visibility to hitting your target range on leverage by midyear, I think you said, and with several quarters now where both on the cost synergy side and the sales synergy side, you're performing above expectations on Anixter. There is an argument to make that the better that integration goes, the more appetite and the more urgency there would be for continued consolidation. On the other hand, you've got your hands full with a transaction of that size, even if it's gone well thus far. Could you update us there on the M&A appetite? Well, look, I think that that's a key value creation lever for us going forward. If you look at WESCO's history since we became a publicly- traded company, we clearly have used M&A as a value- creation lever. You know, the value chain that we're in, and particularly our portion of the value chain, which is really the most relevant point, still remains fragmented, highly fragmented. You know, as we look forward, Tommy, you know, M&A is gonna clearly be one of the levers that we use to support our overall value creation. With that said, our focus in the short term is to still continue to use our strong free cash flow generation to delever. That's what we're doing. Just to make sure it is clear, our original target was to get back within our target leverage range by mid-2023. We had accelerated that to the second half of this year, and clearly we have very positive momentum against that, you know, ending up below the four handle to close out last year. I mean, the short answer is key value creation lever. We see ourselves as being a strong leader, and now showing the ability to not just do smaller strategic acquisitions, but large transformational ones. You know, the ability to put two equal-sized companies together is incredibly challenging in any environment or any market, and to do it against the backdrop of the pandemic makes it exceptionally challenging, and we couldn't be more pleased with the initial results. Still a lot of runway, though, to your point, still a lot of runway to deliver on the integration benefits that we've committed to, as well as the digital transformation. Appreciate the insight, John. I'll turn it back. Yep. Thank you. Our next question is from Steve Barger of KeyBanc. Your line is now open. Please go ahead. Thanks for putting me in at the end here. Just since you used a slide for it in the front of the presentation, I'll ask her about conference- room- as- a -service. Just how big is that market? What do you expect the CapEx is to stand that up? What's the return profile and really, what's the objective here? I'll address the last part first. You know, Steve, we've been, and good morning, by the way. We've been, you know, the last few calls we've talked about, you know, the initial applications that we're focused on and they're part of our overall digital transformation agenda. The examples that we gave over the last couple quarters were focused on applications. I'll use the term inside our four walls. You know, applications that would leverage the power of our big data. We spent a substantial amount of work with focus in these first 18 months of taking WESCO's big data, quote-unquote, Anixter's big data, putting it together into one brand new world-class data lake and beginning to operationalize that data to run our business better. That's foundational. In parallel with that, we're beginning to look at taking these new digital products and applications external. This conference- room- as- a- service is a good example. That's why we cited it this quarter, just to show you that, you know, these digital products and applications won't just be inside our four walls, but there will be some customer-facing opportunities in terms of new products and services that we take to customers. It's exciting, because, you know, we have a capability, a core capability in AV, audio visual. WESCO had one, as well as Anixter, and together it's actually a very attractive market. It was attractive pre-pandemic, but the pandemic and the impact on, you know, return to the workplace and hybrid work environments has created even a greater opportunity. This is just one product/service application. It's very interesting because again, it's a subscription-based model. We don't own, you know, the customer doesn't own the product. We take care of that for him. It's all turnkey. I'd encourage you to go on our website and punch into it and get a sense for how we're presenting ourselves to customer and how we can stand up that service capability. It's very new and different for WESCO or Anixter for that matter. Those of you that know us, if you go punch into the website, you'll see that. Again, just an example of one of the what will be a long list of these new launches that we'll be working in the coming years. Thanks for that detail. To the first part of the question, how are you defining the addressable market there? How much are you spending on CapEx in terms of, you know, staffing that and standing it up? Yeah. Steve, the incremental investment is de minimis. We did not, you know, we did not have to add resources. It was repurposing the resources we had working in the AV part of our business already, as well as, you know, new resources that we had been adding anyway as part of our IT and digital group in support of our transformation. No, you think of the incremental investment as being de minimis and we've not sized that individual. It's an individual product. It's not a market. I'm not gonna release, you know, we're not gonna size that information. The reason we included it today was just since, you know, indicative of the digital investments we're making aren't just gonna be focused on applications inside our four walls, leveraging our big data, but will also include new products and services that are customer- facing. Understood. I'll just ask one more on that. As you've gone through this process of integrating the data and thinking about how to go external with that, any other updates or thoughts on follow-on offerings and just where you wanna take this? How big could this service model be over time? That is really the biggest question, it's a phenomenal opportunity. That's what our digital transformation will enable. It cannot be well developed in an earnings call, so stay tuned for our Investor Day, which we'll begin to, you know, kinda, let's say, put the meat on the bones in terms of that. Very good. Thanks. Thanks. Okay. I think that we're a little bit over time, but these are terrific questions. You know, I know if we have anything else, anybody else lined up in the queue, we'll follow up with you post haste. With that, though, I'd like to bring our call to a close, and thank you all for your support. It really is much appreciated. We look forward to speaking with many of you in the coming days as well as our upcoming investor events. They include the next two events that we will be participating in are the Raymond James Institutional Investors Conference and the JP Morgan Industrials Conference, you know, shortly within the coming weeks. With that, have a great day. This concludes today's conference call. Thank you for your participation. You may now disconnect your line.