WESCO International, Inc.

and welcome to Westco's 2024 fourth quarter and full year earnings call. I would like to remind you that all lines are in a listen-only mode throughout the presentation. If you would like to ask a question, please press star followed by one on your telephone keypad. And if you would like to withdraw it, please press star and then two. Please note that this event is being recorded. I will now hand the call over to Scott Gaffner, SVP, Investor Relations, to begin.

Scott Gaffner, SVP, Investor Relations, 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 uncertainties. Actual results may differ materially. Please see our webcast slides and the company's SEC followings for additional risk factors and disclosures. Any forward-looking information speaks only as of this date and the company undertakes no obligation to update the information to reflect changed circumstances. Additionally, today we'll use certain non-GAAP financial measures. Required information about these measures is available on our webcast slides and in our press release, both of which are posted on our website at Wesco.com. On the call this morning, we have John Engel, Wesco's Chairman, President, and Chief Executive Officer, and Dave Schultz, Executive Vice President and Chief Financial Officer. I'll turn the call over to you, John.

Thank you, Scott, and good morning, everyone. Thank you for joining our call today. We're pleased with our return to sales growth in the fourth quarter. It was sparked by accelerated growth in our global data center business, which was up more than 70%. In addition, we had 20% growth in our broadband business, and we had renewed positive sales momentum in our electrical and electronic solutions business. I think it's important to note that for EES, this marks our first quarter of growth since early 2023. Now, this sales growth momentum was partially offset by a slowdown with our industrial customers, especially in the last two weeks of December, and what we expected, the continued weakness in our utility business. With that said, our positive momentum overall is carried into January, and our preliminary sales per workday adjusted for M&A is up 5% versus prior year. Our opportunity pipeline remains at a record level, our backlog remains healthy, and our bid activity levels remain very strong. On a full year basis, organic sales were roughly flat with the prior year and gross margin was stable, although we experienced some pressure in communications and security solutions as sales ramped to data center customers on project deployments. Consistent with our past practice and experience, we expect to improve CSS margins as we move through the data center lifecycle. Dave will address this in more detail shortly, including the actions we're taking to improve CSS margins in 2025. Now turning to free cash flow. Our continued focus on effective working capital management yielded strong benefits again in the fourth quarter. As we generated $268 million of free cash flow and drove net working capital intensity down significantly versus the prior year. On a full year basis, we exceeded our expectations and delivered record free cash flow of more than $1 billion or 154% of adjusted net income. Overall, key developments in 2024 set us up very well for future margin expansion and outgrowth relative to our market and to our peers. First, we made excellent progress on our enterprise-wide digitalization efforts and our overall business transformation last year. We're more than halfway complete on our technology and capabilities build, which once deployed is expected to accelerate our earnings growth through greater cross-sells. It's expected to expand our margins to improve pricing and operating cost leverage, and it's expected to dramatically increase our speed to value on the integration of future acquisitions. Second, we materially strengthened our Wesco portfolio through both divestitures and acquisitions. Early in 2024, we divested our integrated supply business, which drove a positive mix shift for UBS. We also acquired three service-based businesses, including Ascent. which closed in December. I think you'll all recall that Ascent is a premier provider of data center facility management services, and it enables us to provide additional value throughout and across the entire data center lifecycle. These strategic portfolio moves, that is divesting a low-margin business and adding higher-margin services businesses, are integral to achieving our 10-plus percent EBITDA margin goals. Third, in addition to generating record-free cash flow in 2024, we also reduced our net debt by $431 million, repurchased $425 million of shares, and increased our common dividend 10% after initiating it in 2023. Now moving to 2025 and our outlook. We expect organic sales to grow 2.5 to 6.5% and operating margin to expand. as all three business units are expected to deliver profitable growth this year. We expect to generate 600 to 800 million of free cash flow, and I'm pleased to announce that we plan to increase our common stock dividend by 10% again this year to $1.82 per share, while continuing our share buyback program. We also expect to strengthen our balance sheet by fully redeeming our outstanding preferred equity in June, which will improve both our cash flow and our earnings per share. As we outlined in our recent investor day, we are committed to substantial value creation from operational improvements, our digital transformation, and our overall capital allocation strategy, including additional M&A. As we look to 2025, our pipeline of strategic acquisitions remains strong, and it's aligned with our goal to increase our service offerings to our customers. We're well-positioned to deliver outsized growth due to the secular trends of AI-driven data centers, increased power generation, electrification, automation, and reshoring. And importantly, we remain laser focused on our enterprise wide margin improvement program, which has been a historical strength for Wesco. I'm confident that Wesco will outperform our markets again this year and we're well positioned to deliver improved sales growth and continue toward our longterm EBITDA margin expansion goal. Finally, I continue to be very proud of our talented and dedicated WESCO team who remain steadfast in executing our strategic plan to capture the significant value creation opportunity in front of us. And we're doing this as we realize our vision of becoming the best tech-enabled supply chain solutions provider in the world. So with that, I will now hand it over to Dave to take you through our fourth quarter and full year 2024 results, as well as provide a much more detailed look at our 2025 outlook. Dave.