Hi, Brian. Hey, Melanie. Thank you so much for joining us today at First American. Super excited to have you here. Great to be here and great to be with First American today. With over twenty years of experience in the industry, just under seventeen at Wesco. Yeah. Really today, I just wanted to learn from you, hear from you, and really just get your insights on the industry that we're in. Kick things off. Okay. Maybe fun little background about yourself, fun fact, and a little bit about Wesco. Yeah. Easy to start with WESCO first, right, WESCO International is a Fortune 200 Company, about twenty two billion dollars in revenue. We are operating in over fifty countries globally, a lot of the businesses in North America, but you know, we service data, utility, industrial and commercial customers with their electrical and data communication needs. As for me, service treasurer for the company, as you point out, I've been there almost seventeen years. I've been treasurer for the last thirteen years. Wow. And it's been an interesting ride. As an understatement, I came into the company with four and a half billion in revenue and today at twenty two, I don't even recognize the business at times. A lot of that's been through M&A, but also some organic growth too. Fun fact for me, you know, golf is is is my second passion in life. I've got, three sons who all are competitive golfers, so I've learned to be a great ball spotter for them as they play their tournaments literally around country. So that's my fun fact. Great fun fact. And fun for you to travel and play with them, I'm sure. That that has some benefits for sure. Totally. It's good balance, especially with just growing company. Would even say, like, thinking about the last six years, where you were versus where you are today with First American, like, it's incredible to see that journey you've been on. Yeah. So you knew us before we bought Anixter, right, which was a merger in twenty twenty where we doubled in size and that merger really has allowed us to transform the business. Know, it's not often you're gonna have the opportunity to put two fortune five hundred companies together, but that's what we did and, you know, been wildly successful. We generated more synergies than we expected both on the revenue as well as on the cost side. We're in a position now where we've got tremendous resources and a big balance sheet and it's allowed us to do more M and A over the last couple of years, but also to make investments in our physical plant and in our technology stack and those are some of the ways that First American has helped us. Definitely. No. That's great. I think you really speak to the technology component, I'd say in this current marketplace, we're seeing it's changing all the time. Is there anything specific that you guys are doing right now that is really setting you guys apart in the marketplace, would you say? Well, I think, you know, there's a couple things. One, let's talk about from the M&A perspective. We've continued to identify target companies to acquire where they're bringing a product capability, a services capability that we didn't have at WESCO previously. These are smaller companies, but they can now leverage our scale, hundreds of locations across North America, global opportunities as well, and so we can be a force multiplier for them and take capabilities. And so in doing that, we find ourselves in an even better position today than we were when we closed the merger five years ago. Yeah, and I think that growth really speaks to where you guys are today. And I would say, is there any advice you could give other executives when they're thinking about growing their business in some way? Whether it's acquiring a new company, what advice would you give them to really make that accomplishment happen? Yeah. First and foremost, though, it starts with doing the basics extremely well, locking and tackling, the simple task, repeating that simple task efficiently. You know, we talk about in our ability to fulfill orders for customers, to pick them appropriately, to pack it right, to ship it on time, meet our service level commitments to our customers, that is what you have to do well, right? That you earn your reputation, good or bad, in everything that you do, and that is for WESCO paramount to our success is we've got to get the right product at the right time at the right cost, importantly for our customers and if we're doing that, we're gonna be successful, but also leveraging the technologies technologies that we continue to invest in. We're spending hundreds of millions of dollars over a multi year period that will run out into, you know, twenty twenty seven timeframe to improve our digital platform in every facet of the business, be it in the back office, the mid office or fulfillment side in warehouse or branch network to the customer fulfillment side. So we're open to technology, what, you know, we utilize lean and have for decades at WESCO, continuous process improvement, eliminate waste, and for us, you know, we're finding new ways to apply digital solutions, be they in a warehouse environment or back office environment to to be more efficient in how we quote our customers, how we deliver for our customers, how we bill and collect from our customers. Right. And I mean, there's so much there, complex strategy, but you guys are from my reflection, you guys are always building on that and your customers are feeling that. And when it comes to more of that lean process, I think that's one topic that's kind of a buzzword right now, Lean Six Sigma. What does that look like for whether it's a logistics company, manufacturing company? But you guys have done such a great job adopting that. We're we're not new to this game. Yeah. Right? As I said, you know, it's it's probably two thousand three, if I've got my dates right, for WESCO having started with its lean journey. And, you know, when we bought Anixter, we brought those concepts to Anixter. Had some playbooks that they ran, but lean is the way we operate. And, you know, I'll tell anybody who we're recruiting for, if you have a bias where you're not open to change, this is not the place for you. Yes. You have to be open to a process improvement and finding a new and better way of doing it. Lean asks you to ask why five times. Why are you doing something? Why are you doing something? Why are you doing something? And if you're not able to find and identify ways for improvement, you've probably failed. You failed to adopt technology or best practices one or the other because they're there, and I tell that to my treasury team. We talk about it on the risk management side with which I also run, and then we see it in action in our warehouse environment, our back office environment. Yeah. No. It's powerful that you guys have just a group of colleagues who all have that same just mission of change. Yep. What challenges have run into with change? We all know change can feel hard and be hard. Is there any advice from a mindset perspective that you would say has really set you guys apart in making change happen? Yeah. So so for us, you know, it starts with measuring what you're trying to do. Right? So I I take the the merger with Anixter, for example. We had value delivery teams, value capture teams that were established, and you created laundry lists. What are you gonna do? What are you gonna do day one, day thirty, day one hundred, one year into the merger? What are you gonna accomplish? Right? So what is tracked and measured is, you know, a focal point for any leader at WESCO, And so in doing that, you position yourself for success, right? And for us, we were no different in instituting these change. And again, we were doing a tremendous amount of change in really a short window of time. For sure. And creating, this luxury of saying, what would the best run company look like, and what would best of class look like? And we said, we're gonna do that. We're gonna do it by leveraging this huge balance sheet that we've got, this big P and L now, and this tremendous cash flow, and how do we think about things? That, you know, in my involvement, that included what's the best 401k look like? Retirement plan setup, what should that look like? And you find yourself challenging yourself. The status quo is to be challenged in that environment, and you embrace change, and it's going all around you, so it's not something that you're the only one doing it. Right. So there's strength in numbers and knowing that everybody else is equally biased to take action to improve and instill what is best in best in class. And now we've created this new company from the remnants of two Fortune five hundreds and have now, you know, grown to you know, we're pro form a seventeen billion, we're today twenty two billion. So we've we've outgrown, you know, our our wildest expectations in short order. It's incredible, truly, just seeing that and hearing that. And that's with a divestiture as well that included us selling a business about eighteen months ago that had about eight hundred million in revenue. So we've still grown tremendously. For sure. And I think one of the biggest things you touched on was culture. I think that's something that even here at First American, we always think about just the powerful culture and what that looks like in day to day. You can feel that with WESCO, and I'm sure you feel that when you walk in the doors every single day as well. Yeah. Important that people embrace what we're trying to do, right? It starts with tone at the top, there's a consistent messaging, there's a consistency in how we talk about the business, about what we're going to accomplish, how we're going to accomplish it. We instill it in the first year associates when we bring them in in our finance rotational program that I get to executive sponsor. And you know, it carries through whether you're in a warehouse, whether you're in an office environment that this is how we're gonna act and these are the priorities for the organization. It's great. And I guess thinking going back to that would just be too, like, I tie automation employees very close right now in our space. Just a lot of people are leveraging different technology automation because unfortunately, they're having challenges with just retention, employee retention. Have you guys tiptoed in the automation fully? Where do you guys stand on that right now? Yeah. So automation is very an interesting I've got buzzword. It's not really a buzzword for Wesco. Like, we have implemented and supported our customers in a manufacturing environment for our entire existence. We have a piece of the business that is services only automation solutions. Yep. One that Wesco bought in, nineteen ninety six. Wow. And so automation and that falls in line with lean and that process improvement and how do we get more productivity out of the same workforce? Well, you find technology that can be that force multiplier for you. So I would look at it as saying this is just a natural extension of what we've always been doing. Good. Supplemented by lean and now we look at, I'll share on the risk management side, we implemented a third party risk management system. We look at it for treasury systems. We're doing it across everything, a tremendous amount in how we quote customers, how we respond to RFPs and leveraging technology that allows us to be more efficient in our response times and in our ability to appropriately quote the deal for a customer. For sure, and there's so many stakeholders involved with those initiatives. Is there just one step or trick or something that you would encourage others to really think about when adopting something like automation? Whether it's starting simple, going big, what's one step someone will It's remembering that, you know, it's how you eat the elephant, one bite at a time, right? You can't focus on the end goal. You have an end goal in mind, but it's taking it piecemeal, right? It's doing the steps that are necessary to affect the change. That goes back as we talked about with a merger integration and the playbook that we run. What needs to be done day one? What needs to be done day thirty? What needs to be day one hundred task? Right? And get to what you can do, control what you can control and get that first task done and move on to the next task because you're not coming back to that prior item to repeat it, and so there's that satisfaction that one, you've accomplished some stuff and you've, you're gaining that efficiency as you go, and I think for us, it's also the rinse and repeat that we've now done this a few times, and you've gotten yourself up a learning curve, and that learning curve tells you don't do that task this way with a future acquisition, or maybe ask this question in a different manner because you might have stumbled because you didn't ask the right question of the team that you're trying to integrate now, and so you're smarter for it, right? It's a learned behavior. A learned improvement process as well, and it's also, you know, part of that lean mindset. You're not wasting time because you've now asked that question in a better, more appropriate manner. Right. Well, that's good. Fun fact, I actually did my Lean Six Sigma certification in college, and so I never thought it was going to enter into the leasing and financing world, but here we are, and it just you hear it so often, as I mentioned, and it doesn't disappoint I didn't know it before I came to WESCO, but, you know, I've been certified with multiple belts and certainly see it embraced and challenge my team to continue to improve how we are going to operate. And one of the things that I can do as a leader is make sure that we're investing in our technology, encouraging my teams to invest not only in themselves, right, with training, and how they're gonna use technology for their own personal thing. We use Microsoft Copilot, right? So that AI capability and how do we gain efficiencies there. But then it's also looking at any other process and saying, how do we get better? Challenge ourselves. You can never be satisfied that you're doing it as good as it can be. Maybe you are, but there's always room for improvement. Agreed. And I feel like you are always seeing big picture. Yes, here now, but also how do we take it to the next level, which requires you to really think about that big picture. And I think AI is one of those where we're all trying to figure out No doubt. Where it's incorporated in our day to day. Where do you see it really helping Wesco's growth as you guys take on this continued journey? Yeah. So AI for us is gonna show up in a couple different ways. Absolutely, the technology side, and we've got a couple of use cases that we have been working through and ways to deploy AI. We've also are looking at AI, it's a source, tremendous source of revenue for WESCO. The data center customers that we service, we quoted in the prior quarter, we did over a billion dollars of sales to data center customers. It's now in the mid to high teens as a percentage of the overall business that WESCO does. How data centers are built, the amount that need to be constructed, powered very importantly, because remember we service the utility customers as well. So the generation resources, the distribution resources, you know, and the needs on the power grid over the coming decade or more, it's a very exciting time for WESCO because those are, you know, end markets that we know, we know very well, we have tremendous both on the supplier side as well as on the customer side. Got it. And that gives us a perspective that is unique because we're bringing that customer relationship to the manufacturer. Right. And then there's value add for us in supporting that AI need. So as you are on your phone every day, I'm on my phone every day, or a tablet or a laptop, increasing amounts of data, learning models that are out there, as that just continues to grow every day, the data center needs continue to grow, and so, you know, we think about it as a multi year decade or more opportunity for WESCO, and the beauty of it for us is it's not just a domestic solution, it is a global business for WESCO. For sure. Did you I mean, go back sixteen years when you first Did you think data center would be an area of growth for you guys? You could say no, for I mean, it wasn't anything we talked about. The WESCO at that point in time probably had seventy, seventy five percent of its revenues were industrial and construction end markets, and data centers, digital solutions were not, you know, part of they were a part of WESCO, but they were not a focal point for the business. Now, every conversation with the analyst community, with our banking partners, they all wanna know what are we doing, how are we going, the investment community is greatly focused on our growth rate in data centers, which has been tremendous over the last several quarters in particular. For sure. And thinking future, we went back, now going future, where do you see the next kind of growth opportunity, whether it's supply chain industry focus or Wesco yourself? Yeah. Certainly, the data center business and combined with utilities, right, the the amount of money when you you get you can't help but be excited when you see the big tech companies and their announced CapEx plans, not only this year, but in subsequent years with a growth CAGR that's five, six percent, but when that's on hundreds of billions of dollars, that's just really a tremendous amount of of opportunity. Then throw in there what the utilities are spending, the IOUs spending a hundred and fifty billion dollars or more a year in their CapEx plans, and then you've got an administration now in the US that's highly supportive and wants to invest in domestic manufacturing and see data center growth, whether it's here in the Northeast, whether it's elsewhere in the country, they're encouraging site development. Encouraging cutting of red tape to ensure that data centers do get built here in the US. And so you can't help but be excited everywhere you look, there's opportunity. Agreed. And I would say even from First American, when we hear just the growth expected in the CapEx side of things, it is so exciting to see those projects developing and people are talking about it. I would say there's been challenges in the industry, but this is truly what makes us so excited to think about what is the future state for equipment leasing and financing. Yeah. The needs that we have that and, you know, we look at the First American relationship and look at partnership, right? And I take that view very seriously that you want somebody who's gonna be flexible, willing to listen to you, willing to be creative in solutions that fit our needs and work for you, and so they create that win-win activity. We don't know what we're going to need, candidly, in three years five years, right? M&A is gonna supplement that most likely for us. So we approach our balance sheet with our capital structure and how we partner with our leasing needs with that view of flexibility. Negotiate terms in our credit agreements to make sure we have the capacity to bring on more equipment leases because that may be the right answer for WESCO, and so we try to look around the corner a little bit, if you will, to make sure that we are thinking about not only the WESCO of twenty twenty five, but the West Gulf two thousand and thirty and two thousand thirty five. And what do we have to do today and be preparing for on a journey to deliver, for our customers not only now, but, you know, through this decade and into the next. For sure. And I would say you hit on flexibility, and that is so important, the ever-changing marketplace that we're in, because it's hard to predict twelve months, twenty four months and beyond. And so I think for both sides, it's just so important to be flexible because we don't know. You don't wanna stifle creativity, No. We don't wanna hold back. I never want to be able to say to our sales team, yeah, we can't do that. For sure. Cannot, no matter what we do, find a solution. And so when I think about the six years that we've worked together, you know, we have numerous examples of that creativity, that collaboration being put to use in delivering a solution that the Wesco sales team said, I didn't know we were gonna be able to do that. But we find that solution and we identified and we will probably throw things against the wall and see if they stick. If there is an opportunity that makes sense for you and would work for us, then you know, we're able to move with speed to get to execution, which is another, you know, aspect that we value tremendously with First American is that you run the traps, you do what you need to do, make sure credits align, but then once the commitment is there, the speed to execution follows rapidly in line. Yeah. No. That's one thing I would say. I feel grateful to be a First American Play, just our team that we have. It's not just myself. Have as you met Michelle earlier, like, it is so wonderful that we truly have that team support because we are here for our customers. It's like truly, that's what we pride ourselves in I think about the collaboration that I've seen that, you know, you run the quarterback and you run the play, but there's so many others on your team that are helping with the fulfillment Whether it's tracking SKUs that are in a lay down yard for a utility or whether, you know, it's a piece of mobile equipment that's going into a warehouse or a warehouse automation solution, is, you know, that level of collaboration and coordination that you all bring, and you know, I have tremendous respect for watching that, as the signer when the lease document shows up in my DocuSign from Michelle. But there's a confidence that it's been vetted. It's right. It's and we're we're in line and ready to go to sign the document. For sure. And I can tell you, there's always a way. That's one thing I always challenge my team with. There's always a way. Sure. It may not be simple and clear every time, but there's always a way for sure. Indeed. I do have to ask when thinking about when working with First American, what is one thing that you feel like we've done right right in the last six years? Oh, it's not just one. I think, you know, it's it's really it's, you know, it's bringing creativity and listening to us first, and then bringing creativity to say, how can we do this? How can we help you, Wesco, to achieve your goal with this with this opportunity? And, you know, I appreciate the openness with which you guys are willing to listen. And you've told us when something doesn't work, you said, you know, peace, go over somewhere else and look for somebody else. It's not us. That's okay too, right? And we've developed that rapport so that we have a good idea where the guardrails are of what is and isn't possible, but there's still going to be new opportunities, not only now, but in the future that we're going to look at and say, I don't know, let's ask. And the worst case we can do is we can maybe hammer at a different solution or you'll come up with an idea we hadn't even been thinking about because you have your and the team's wealth of experience of how you solved other customers' dilemmas. And for WESCO, you know, we piggyback off of that success in order to, you know, achieve our ultimate goals too. For sure. Transparency is key. You know I will always do that and will continue to for sure in our journey to come. Indeed. Awesome. Well, thank you so much for joining us today, to be here. Thanks so much for you. So excited when I think about the future for WESCO as well as just with First American. So thank you, truly. Thank you very much for having us. Of course.
