WESCO International, Inc.

Good morning and welcome to the Wesco fourth quarter and full year 2020 earnings conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on a touch tone phone. To withdraw your question, please press star and then two. Please note that this event is being recorded. I would now like to turn the conference over to Leslie Hunziker. Please go ahead.

Thank you and good morning, everyone. Before we get started, I want to 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 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. On this call this morning, we have John Engel, our CEO, and Dave Schultz, Wesco's Chief Financial Officer. Now I'll turn the call over to John.

Well, thank you, Leslie, and a warm welcome to Wesco. It's great to have you on the team. Thank you. Good morning, everyone, and I hope that all of you have been staying safe and healthy. I'll start out with a summary of 2020 and some of our most notable accomplishments. Dave will take you through, at that point, an update on our rapid progress that we're making on integrating Annexter. and I'll take you through our fourth quarter and full year results and then give you an overview of our outlook for 2021. After that, I'll offer a quick recap before we open the line for questions. So starting out, 2020 was an extraordinary year for Wesco. We completed the transformational acquisition of Anixter, doubling our size as a company and changing our trajectory for years to come. We're off to an excellent start. and I'm more bullish than ever on delivering against our substantial value creation potential. In addition, I'm inspired by and would like to thank all of our associates for their dedication, commitment, resilience and extraordinary effort in serving customers during the global pandemic. As most of you know, we announced our agreement to acquire Anixter International last January and we were very pleased to close the transaction a little more than five months later. The first six months of the integration have gone exceptionally well. Our synergy capture has exceeded our expectations, both in terms of size of the opportunities as well as the rapid pace of our execution. You'll recall last quarter we increased our three-year post-merger cost synergy target from $200 to $250 million. In addition, the highly complementary nature of Westville and Annixter and our substantially larger scale has enabled us to build a cross-sell pipeline that's starting to show up in our top-line results, and this is very encouraging. At the same time that we were working towards closing the transaction and beginning integration, we were managing through an incredibly challenging macro environment driven by the COVID-19 global pandemic. In response to this, we took quick and decisive action centered really on three priorities, and we've talked about this in the past. First, protecting our employees. The diversity of our end markets, our differentiated service offerings, our global footprint, and the attractive secular trends we support helped temper the effects of COVID-19 on our business last year. On the right-hand side of this page, you can see the attractive secular growth trends that are driving demand for electrical, communications, security, and utility solutions, all of which will continue to drive demand in the years ahead. All three of our strategic business units have the scale and capabilities to deliver growth associated with the increasing use of automation, machine-to-machine connections, the electrification of our infrastructure, and the demand for faster bandwidth and data center capacity. Emerging growth trends such as the relocation of supply chains back to North America and increased remote connectivity also drive additional growth opportunities. In combining Wesco and Anixter, we have created the industry leader in electrical, communications and utility distribution and supply chain services. just as these secular trends are poised to drive strong growth in all the markets we serve. Now moving to page five. During our second quarter earnings call in August, we highlighted our priorities for the second half of 2020. They were to take share, deliver synergies, and focus our free cash flow generation on debt reduction. In the fourth quarter, we saw improving sales momentum coming out of the COVID-19 trust. and are successfully utilizing our increased scale and capabilities to take share. Sales were up 4% sequentially in 2004 on a workday adjusted basis, when typically our sales declined sequentially in the fourth quarter. We closed the year with a record year-end backlog, which sets us up well to continue building on this positive momentum in 2021. Even more importantly, January sales reflected a return to year-over-year sales growth, with sales up low single digits on a comparable workday basis. We've made great progress across the board on our synergy capture efforts. Our team is laser-focused on driving synergies. As we have combined into one organization, we've made great progress in recognizing the savings from duplicative corporate overhead and functional integrations. Adjusted growth margin was up versus the pro forma prior year for the second consecutive quarter. Our management team is now in place and we've been able to streamline roles across functions for greater efficiency. We're on track to meet the higher synergy targets that we announced last quarter and have very high confidence in delivering upside to these targets. Free cash flow was another major highlight for us in 2020. We generated $586 million of free cash flow last year, close to the $600 million target that we set for three years out, and more than 250% of our adjusted net income. This enabled us to reduce net debt by almost $400 million and leverage by 0.4 times in just the first six months since the annex were closed. and last month we completed a debt refinancing of our 2021 notes that reduces our interest expense by 20 million per year, which will further enhance cash flow and support achieving our 2023 debt reduction and debt repayment target. Overall, we are very pleased with the results we're delivering on all fronts. We're entering 2021 from a position of strength with an unwavering commitment to our strategies and growth plan. and an extraordinary team of associates and outside partners. Coupled with our strong execution and accelerating progress on the integration, we have very high confidence in our ability to deliver sustainable long-term value creation. 2021 will be another positive and important stepping stone in our transformational journey. With that, I'll turn the call over to Dave, who will take you through our financial results.