WESCO International, Inc.

Hello and welcome to West Coast 2025 First Quarter Earnings Call. I'd 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. Please note that this event is being recorded. I will now hand the call over to Mr. Scott Gaffner, SVP, Investor Relations, to begin.

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 certainties. Actual results may differ materially. Please see our webcast slides and the company's SEC filing 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 will use certain non-GAAP financial measures. Required information on these measures is available on our webcast slides and in our press release, both of which you can find 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. Now I'll turn the call over to John.

Thank you, Scott. Good morning, everyone. Thanks for joining our call today. We're pleased that our positive sales momentum in the fourth quarter last year carried into 2025, and that's with hosting 6% organic sales growth in the first quarter. This was ahead of our expectations coming into the year. Our total data center business was, again, the strong driver of our growth and was up 70%, along with high single-digit growth in our OEM and broadband businesses. This was partially offset by continued temporary weakness in utility and markets, which is what we expected. We continued to expect our utility business to return to growth in the second half of the year. Gross margin was relatively stable on a sequential basis versus the fourth quarter and improved sequentially in CSS also as we expected. We continued to focus on effective working capital management as we do always in the first quarter and delivered positive free cash flow that exceeded our expectations to start the year. Our increased inventory will help us manage the potential supply chain impact of global tariffs. We also issued $800 million of new senior notes to redeem our preferred stock in June and repay a portion of our revolving credit facility. This refinancing, along with the preferred stock redemption, strengthens our balance sheet, it extends our debt maturities, it increases our financial flexibility, and it significantly improves our earnings and cash flow run rates. Dave will take you through those details shortly. Following this preferred stock redemption, we have strong liquidity to address our capital allocation priorities, reinforcing what we outlined at our last investor day. After supporting our common stock dividend payments and continuing stock repurchases to offset the dilution of our annual management equity awards, we have well over 75% of our free cash flow remaining. And that provides us with significant optionality. In the near term, our capital allocation priorities are focused on debt reduction and stock repurchases. And we continue to invest in our tech-enabled business transformation and actively manage our M&A pipeline in parallel. So now let's shift to the second quarter. And as we've begun the second quarter, I'm very encouraged that our positive momentum is building. Backlog is up from the prior year, and it's up sequentially in all three of our business units, CSS, EES, and UBS. Our positive sales momentum has continued into April and is building, with preliminary sales for Workday up 7%. We are reaffirming our full year outlook based on our positive momentum through the first four months of the year. While we recognize the uncertainty of tariffs and their impact on the global economy, we continue to focus on what we can control. That is, our cross-sell initiatives, our enterprise-wide gross margin expansion program, and operational improvements resulting from our tech-enabled business transformations. Like all companies, we're operating in the current rapidly evolving global trade environment. And I want to emphasize what we are doing. First, Lesko is well equipped to address the potential impact of tariffs and changes in the global supply chain. We have successfully addressed global supply chain challenges in the past, including tariffs and managing through cycles of increased inflation. This was most recently demonstrated during the global pandemic. We've shown the ability to successfully manage and expand margins during these periods while delivering growth. We're executing our well-developed playbook to manage our margins and our business. And we're maintaining daily communications with our supplier partners, our customers, and our entire sales force to ensure that we're taking all the required actions. Dave will take you through our playbook in much more detail shortly. One final comment on tariffs. Supply chain reengineering and reshoring back to the U.S. and overall U.S. MCA markets was initiated during the global pandemic. I've spoken about this at length. The global pandemic effectively put a spotlight on a significant risk associated with the extended global supply chains that were in place and were established over the last three to four decades. And in many cases, these extended global supply chains were single-sourced. representing significant risk. Supply chain reengineering and reshoring has become a secular growth trend, and tariffs are already beginning to provide a potential accelerant for even higher reshoring growth. With that, I'll hand it over to Dave to take you through our first quarter results and our outlook for the rest of the year. Dave.