Conference Transcript - ADIG 2026-09-10

Dan Stratemeyer, Analyst — Jefferies

I'm Dan Stratemeyer, working at Jeffries' Equities Division. I am honored to introduce for the first time, I think, at a conference, Rob Arns, the new CEO of ADI. And Kevin, what's your official title, Kev? Global Head of Financial Planning?

Speaker 1

Global Head of Strategic Finance.

Dan Stratemeyer, Analyst — Jefferies

Well, again, congratulations on separating successfully. Why don't we just talk a little bit of high level? Why don't you give us an overview of your business?

Speaker 1

Rob, before you jump in, let me just take an opportunity to just remind everybody that we've got a disclaimer that we may be talking about forward-looking statements today. We have this disclaimer on our website and in our investor filings.

Dan Stratemeyer, Analyst — Jefferies

There you go. Don't want to miss that.

Speaker 1

Got to do that, Dan.

Dan Stratemeyer, Analyst — Jefferies

Just tell us a little bit about your business. What makes it special? How long you've been there? and maybe what has or has not changed and what you could potentially do differently now as your own standalone company.

Speaker 2

As you said, Dan, these are very exciting times for us. I mean, 80 Guy Globe Distribution has been in business for now, you know, three plus decades. Today, as it stands, we are the largest specialty distributor of commercial security, fire and life safety, and residential AV products, certainly here in the Americas with also a strong business in Europe and then presence in actually Australia and Malaysia as well. Business is divided 70% commercial, 30% residential. You know, residential right now is, you know, kind of everybody knows based on, you know, some of the macros, they're a bit softer for us, more of a challenge. The commercial side of the business is growing really nicely. And that's, you know, good because that's the core part of the business. We've always been part of, Up until August 4th, we've always been part of a products company. You know, we're a long time with Honeywell. We're the only distribution business as part of a $40 billion manufacturing company. So capital was hard to come by, but we thrived. We got gritty, and we figured out how to operate really efficiently. And then in October of 18, we spun out from Honeywell to be part of Resideo, still a manufacturing-focused organization. But at that point, at least we represented half the revenue. So we were able to really start investing in the business the way we needed to. But in a lot of cases, you know, we were still playing catch up. But again, really supported by the Resideo team, Thrive. But I think everybody knew from internally to, you know, our investors that these two businesses, you know, didn't belong together. So we finally got the stars to align, negotiated with Honeywell, and we were able to spin from the residuo business in uh or just back on october on august 4th ring the bell uh and it was a bit of a kind of a liberation day for us if you will i think we called it independence day but you know i think there was the right time uh well i don't think it was definitely the right time we've been asked this quite a bit size scale um you know the actual geographical footprint we have the actual offering the market share positions we have in the categories that we play in this was absolutely the right time. And so the big difference now is, as you mentioned, Dan, is now we're able to actually set our own strategic priorities, allocate capital in the way that it's going to benefit ADI and ADI alone, as is Resideo. They had the same kind of challenges every year to depend who was going to be able to do the next big deal, allocate capital appropriately based on the highest return. And so we don't have those challenges anymore. And then one of the biggest benefits is, you know, conferences like this. We get in a room with investors, people that are interested in the business, and we are only talking about ADI. We're not sharing time talking about ADI, talking about, you know, P&S, different go-to markets, different sets of KPIs. And so, you know, I know in the long term that will help us out as well. But that's why, you know, this kind of opportunity to be our standalone company is the right time.

Dan Stratemeyer, Analyst — Jefferies

And we're going to take advantage of it you know despite not having the capital you may have wanted and being a part of a very large conglomerate and then another company you've grown tremendously since 2013 or so um i guess that's around the time you came to 2013 2013 like how was the company enabled to grow um so significantly when it essentially was capital constrained um over the time frame and What does that scale advantage do for you and your customers?

Speaker 2

I'll tell you, there's one very simple formula for us. As I go back to 2013, certainly, you know, Kevin was here at that point, too. This was a business that, you know, you just kind of came out of the tough 2008, 2009 kind of, you know, time frame. It was very margin focused, and that's fine. But the ability to grow organically and really take share and get a lot grittier about that was, you know, that culture just wasn't in place at the time. And so we started out, we put an organic growth strategy in place that was super simple to understand. In fact, we talked about this. It was called 4-3-2-1 equals 10%. That was our organic growth strategy. is something that everybody in the organization, which was something we wanted to make sure was in place, from if you were in the warehouse, the DCs, to the stores, you could explain it. 4%, we wanted to grow by taking market share, and we had specific sales programs to do that. And then 3% from new product introductions, 2% from new customer introductions, and then 1% from GDP. Now, the math wasn't perfect across those, but when you're talking about an organization with 1500 1800 people that was something that they could get behind and reward we rewarded the teams for being aggressive taking share understanding how much wallet share we had at the individual customer level tracking those things and then rewarding again our sales teams and our and our different marketing organizations from you know taking share and doing it aggressively along the way we you know back then we were more heavily concentrated in residential along the way we said, hey, listen, the real growth is in commercial, but we've got to build some capabilities and we got to do it without a lot of cap, you know, add a lot of capital. So we started to engage larger security integrators, in some cases that were underserved, started to build internal capabilities around project registration, project design, not a lot of investments to be able to do that. And then really pride ourselves on being quicker, the easiest to do business with, I think over time and then bringing on some of the larger enterprise suppliers that really liked the service that we were providing. And so then over time, you saw the business shift. We didn't lose any ground in residential, but we started to gain a lot of share in the commercial space. And that's how we've more than kind of, I guess, tripled the size of the business since the time I got here.

Dan Stratemeyer, Analyst — Jefferies

And it's a pretty stable revenue stream or growth organically on the commercial side in particular. What are the drivers that make it such a stable business?

Speaker 2

Two things, really, especially on the commercial side. One, technology is really the biggest driver of kind of the end market, the commercial security, pro-EV, and datacom businesses. And so, look, as you think about a lot of suppliers, a lot of integrators, and a world that is committed to building a safer, smarter, more connected space, um and as technology helps end users be able to do that protect patrons consumers um you know students in in college campuses our our our our suppliers they know that and that's been driving demand and so as technology has improved over the years to be able to do provide that greater level of protection, it's not uncommon for, you know, a string of banks, college campuses, you know, the verticals that our integrators play in to rip out systems that are three to four years old because technology is advanced and then put in, obviously, newer systems. And so, you know, I would say as I look at our entire commercial part of our portfolio, the overall majority, 70% to 80% is driven by technology. And that's idiosyncratic of the business cycle as you're – Correct. And it doesn't depend on commercial construction. And that's a beautiful thing. And then I think secondary to that is this just technology convergence. You know, systems now, security systems, pro-AV systems, data comm systems, all on the same network in the same building or infrastructure has driven a great opportunity for distributors and integrators to be able to win the entire job. Whereas, you know, 10 years ago, you might have had, you know, you had IT integrators, you had pro AV integrators, security integrators that really could only play in their space, in their lane. Now with Convergence, you know, we've been able to expand our product line, our specific services that we offer to those, you know, specific integrators, helping them win the entire job. So it's been a great growth opportunity for us as well as our customer base.

Dan Stratemeyer, Analyst — Jefferies

Appreciate that high level understanding and a little bit of a walk down memory lane. I personally feel what you and the team have led and tackled over the last few years has been monumental, for lack of a better word. That's a good word. I mean, you know, you've probably done more in three years than most companies would be in 10 potentially. So I want to talk about the Snap One acquisition and integration, the ERP, and then the planning for the separation, arguably all at the same time, and what that's done for the company, management's time, and how that sets you up, I believe, in a stronger footing going forward than obviously you were a few years ago.

Speaker 2

There's a lot there. You nailed it, Dan. So one of those three things, if I had my way, or I think any distribution business of our size and scale would probably tackle those things, you know, on a two-year basis, then move on to the next one, then move on to the next one. Sometimes timing works with you. Sometimes timing is not in your favor. And for us, we just happened to, you know, we were two years into a significant ERP change out planning in the biggest part of the business. And, you know, the snap opportunity, snap one opportunity came available to us. And so we all thought long and hard about where we were. Nine months from the day we were projected to close, we were going to flip the switch on the ERP system, which included the ERP, included WMS, that also included demand planning. And our plan was to do a big bang, kind of all at once versus drain this thing out over two years and have it be a distraction to the leadership team. So we did the snap deal. We continued on the progress to, you know, to get to the ERP change out date along those nine months, the spin opportunity came available. And so, you know, ironically enough, the day we flipped the switch on the ERP system was the actual day we announced the spin. Uh, and just the, and you guys didn't know you're going to do the spin because you had to negotiate with Honeywell on the indemnity. So that was four or five months prior. Right. And we were already well into the snap deal. We were already into the year. I mean, these kinds of things were already kind of, you know, underway and we just had to try and manage it all in parallel. Uh, and it just, it is what it is, you know? Um, but you kind of, we got through it, the team embraced it. Um, and we're in a much better spot today now to leverage a modern tech stack. I mentioned in the Q2 call, this one ADI initiative, and that's something we're going to talk about over the next couple of years. What that is designed to do is simplify the business while at the same time improving our customer experience. A big part of it is the $80 million plus of run rate costs that we plan to take out between now and the end of 27. Three big chunks of that, you know, we've got a real estate footprint that has redundancies after the snap deal, as well as acquisitions that we did prior. So think about 15 DCs down to about nine, increased cubic square footage, better placement of the DCs based on migration of our customers store locations about a hundred and forty some odd locations today consolidated down about a hundred and fifteen because we don't need a snap store five hundred feet away from an ADI store right so we're gonna consolidate those better customer experience ERP systems when we did the deal was nap we had 16 now we're at eight you know in in kind of exit 27 early 28 will be down to three one of the Americas, one in Europe, one for product development. Websites, true e-commerce websites, it's a billion four going through those sites, but it's three of them. ADIglobal.com, snapav.com, snappartnerstore.com, consolidate down to one. All the expenses that come with that, the customer friction points go away. You've got brand proliferation that's happened over time. 12, 20, I think 22 different brands in our exclusive brands lineup, rationalize that down to 12, all the dollars it takes to actually keep brands going, marketing those brands, okay, it consolidates a more efficient marketing business as well. So all these things come together to create a business now that is just more efficient, increased customer service. And now as we go forward, any other focus areas that we put on the business, we're able to maximize capital management focus resource allocation to be able to drive higher returns once we get through this next year and a half. So that's the best way I can describe it, kind of the sum of what we went through, but more importantly, the benefit and where we're going to be once we get through this in the next year and a half, two years.

Dan Stratemeyer, Analyst — Jefferies

So let's take a few of those and dive, double click into them. Snap one.

Speaker 2

What was the rationale now um when you bought it what did you expect the business to do what is it doing now and how do you think about the next you know one or two years yeah great great question i mean look here's the here's the here's the reality i had been looking at snap since 2015 i first met with them here in the city in 2015 and um you know they were 150 million at that time so we always kind of had our eye on them as a way to get into the residential av space certainly a big part of their businesses, exclusive brands, higher margin products. We met with them a few times and they say every deal dies three times before you actually get it done. And that's exactly what happened here. But you look, when we were, when we were in the middle of looking at the, at the actual deal, we had a lot of, you know, we had some consultants, we had a lot of analysis that said, you know, by the time we close the deal in mid 24, we expect to see a recovery in the residential space in the back half of 25. We felt good about that data. That, as you know, Dan, did not happen. And it's only continued to get softer since that timeframe. So, you know, we've had to react. And while we still believe in the product category, we believe in the residential AV space, we've got too much exposure there as a business right now. It's, you know, you think about the SNAP product line, roughly, you know, $800 million, 600 million-ish in the resi AV space, all very, you know, 3x the margins of our base business. Right now, that's exposure based on a declining residential AV market, which we thought was going to rebound by now. But everybody has seen the data that's out there. I mean, if you look at publicly traded, you know, residential new construction companies, distribution businesses that are publicly traded to play in the building supply sectors all down mid to, you know, high single digits, no real sign of recovery. So our plan there is we've got to work as fast as we can to make that product line more resilient. And so as we think about this R&D capability, that is, that SNAP, we picked up with SNAP that produces 400 new products a year, primarily in residential AV, how can we now shift some of that focus and have half of that product line, that new product introductions, be more in the light commercial space across security, pro-EV, datacom, where we have 100,000 ADI customers? And that doesn't happen overnight. Product development cycles are a year, year and a half. But that is the focus right now. Protect our flank in Resi AV, strengthen our go-to-market there, but get more new products and the exclusive brand space going in like commercial. That way we're much more resilient to any, whether it's residential or commercial, we've got to make that product line more resilient.

Dan Stratemeyer, Analyst — Jefferies

Understood. And there were disruptions on the, there was cost and then on the revenue side on the ERP. Where are we now? Customers back, market share back. What's your pipeline look like? I guess that sets up some little bit easier comps in the back half of this year, which we can talk about in a second. But where are we mark-to-market today with ERP customer losses coming back?

Speaker 2

Not customer loss, the share of customer. Share of customers, yeah. The good news, when we flip the switch, we have great data, terrific BI capabilities. We monitor our customers, right? We know what they're buying, how much they're buying, how frequently they're buying. And the good news is over the three, three and a half quarters post ERP implementation, the customers roughly, you know, stayed with us, right? Now, some of them just bought less because we weren't as fast as we had been before. And, you know, customers would walk into an ADI store and instead of seeing one person at the counter, they'd see four. And they needed to get in and get out. And there's a competitor a thousand yards across the street. And so, you know, that happened, but they continue to come back, buy with us, just buy less. I think we came out publicly and said we thought there was about a $60 million impact in the back half of this last year, which now we're lapping this year. In terms of where I sit today, I am incredibly comfortable, excited about the fact that, you know, look, can you say we've won back 100% of the share? I think that's a bit irresponsible. But everything I'm seeing would tell me that, yes, that is in fact the case. Across all of our commercial security, pro-EV, datacom categories, we're seeing a daily sales average that is north of where we saw it as we went into the ERP change last year. So I feel really good about our ability to have won the share back, but now do what we do best, and that is continue to take share going forward and drive incremental growth, especially in the commercial categories where the in-market demand is absolutely there. And I believe the old ERP was 40 years old. It was 40 years old, AS400 green screen. Yes, thank God I never have to go into another one of our stores and see that again.

Dan Stratemeyer, Analyst — Jefferies

And I guess as a part of the 180i, on a high level, how many ERPs are you still running and where will it be in two years? Investors like to know the granularity of where cost savings is going to come. So I'm going to ask a few questions about that. And then what will it do for your company now? And I guess it's in 2028 and beyond, I presume, how we should be thinking about it. You're still doing the heavy lifting this year and next year. What will that do for you now that you have a cutting-edge ERP across all your platforms, I believe, by the end of 27?

Speaker 2

Let me take the first part. So I think I mentioned earlier when we acquired SNAP, we had 16 total ERPs. Fast forward, today as we say today, there's eight. By the early 28, with our 180-I initiative, we'll be down to three. And that will stick with one that's in the Americas, because one that's specific to our international business and one that we need just to kind of manage product development, which is our exclusive brands line. So that's kind of the ERP. Now, we had some folks today that I talked to that were a little nervous about getting from 8 to 3. Oh, my God, are we going to see the same thing we saw last year? And what I would tell you there is no, because the way we're doing it is more of a site-by-site, like regional kind of rollout here where you're not going to see those disruptions. And we've got a great playbook. For example, as we consolidate DCs, as we consolidate stores, they move on to the existing ADI platforms one by one. And so we have the opportunity to allocate resources to those local teams to be able to do that. So I do not see disruption getting from eight to three. So that's kind of part one. So the capabilities this unlocks for us, as you can imagine, are single ERP. You think about any kind of M&A deals after that. You think about investments in technology. You think about AI, the ability to leverage data that's all in one source. All those things come together with one or three ERP systems. We're not having to duplicate. We're not having to duplicate costs. There's simplicity in the business. We're able to move much faster. This is a significant kind of, I would say, accelerator for us that, you know, we get back to the days. You know, we had limitations with the AS4 system, but it was only one system, one state of data, but it was limiting in terms of, you know, advanced technology, bolt-ons, data, AI, those kind of things. And we're making that a big part of our strategic focus going forward. So it was the linchpin to simplifying the business, but also being able to invest in technology going forward without a bunch of middleware, complexity, all that centralized in a small group of ERP systems that provides, you know, simplicity and leverage.

Dan Stratemeyer, Analyst — Jefferies

Let's turn to margins a little bit. Why don't you take us back to the beginning of 25? I think it makes sense, right? To go back then. Um, and walk us through, uh, the tailwinds and the headwinds to, you know, gross margins and bottom line margins, basically just take us from 25 through 27, we've obviously announced at the investor day and 30 million or 80 total 30 this year, just help investors understand the moving pieces there and how they should think about potentially, you know, on a high level basis, maybe flow through and gross margin stuff.

Speaker 2

I'll talk, I'll talk, I'll just stick to gross margin for now. Now, if we want to talk about operating margin, we can do that, too. So gross margin in the first half of 25, by the way, were, I mean, pretty darn good. Because, in fact, really throughout 25, if you think about the entire year, largely driven by tariffs, right? And distributors love tariffs or price increases in general. Now, it's an art to be able to execute and take advantage of those at a high level. and it's something we did masterfully well in 2025. You know, there was Liberation Day. There was every day there were, in some cases, hundreds of different SKUs that were affected with price increases. We have a very mature merchandising team where on day one, we were able to kind of, you know, raise prices. So we didn't have any negative effects. We also have terrific terms with our suppliers where a lot of cases, minimum 15 in most cases 30 days we're have we we're they have to give us heads up that they're going to actually increase prices to us so while the tariffs affected them right away we had typically a 30-day period to be able to bring in a a lot of cases a lot of inventory from that supplier but now at a lower lower average cost so by the time you know we raise the prices in the channel the lower cat lost inventory comes in which has sometimes five six months of shelf life that's a significant margin tailwind that we were able to drive in 25. 40 basis points for the year, 80 basis points when you think of Q2 and Q3. That was 25. You know, back up at 25, we were dealing with the ERP change and the revenue, the top line issues, but from a pure gross margin perspective, a significant tailwind. As a distribution business, to overcome an 80 basis point margin headwind, there's not a lot of levers there unless you've got another round of price increases and those kind of things. We got a little bit of relief from $20 million of tariff refunds that we got in the second quarter. But largely, as I look at 26, we have two sets of headwinds. One, I already mentioned it, the tariff tailwinds last year are headwinds this year to the tune of 80 basis points minus the refunds. The other piece is this continuing challenge of our softness in the residential av space and that continues to represent a challenge for us because you know at investor day dan we said you know the arrow pointed down it's holding you know we thought holding line flat is one thing but it continues to actually be soft and be you know down year over year the unfortunate part about that is as we talked about earlier that is a 600 700 million dollar category that's mostly exclusive brands that's 3x the margin as our base business. So that is a significant exposure for us in terms of, you know, when that particular category is not growing. So you combine the margin headwinds from, you know, 25 that are now, or tailwinds from 25 that are now headwinds in 26, plus a residential AV exclusive brands category that's pretty significant in size at 3x the margin not growing. Those two things represent some, you know, pretty significant headwinds for us this year. And I think, you know, to your point, you mentioned going out a bit. You know, in 27, at least just from the Q2 $20 refund, which we'll have to, you know, lap, you know, I look at 27 as an opportunity to continue as we get further through 27 into 28, leverage the 180I initiatives, continue to drive exclusive brands, ProAV and Datacom, which are margin and accretive. and really the ultimate headwind which will exist in 27 maybe even 28 we'll see is just the resi macro you know when does that recover nobody knows at this point but in the meantime we're gonna do everything we can to try and at least hold serve on the resi side and really leverage the growth we're seeing on the commercial side and i guess i forget the exact number of the

Dan Stratemeyer, Analyst — Jefferies

keger you gave on the revenue side i mean if historically the the commercial construction organic number, I think you've done 5% to 6% since you've been there, something like that, revenue?

Speaker 2

The CAGR, yes.

Dan Stratemeyer, Analyst — Jefferies

Is that how you're thinking about the next few years? I mean, all else equal, and then the bogey will be what Resi does, obviously.

Speaker 2

We gave, I think at the investor conference, we gave 4 to 6 as our range between now and 2030. And we do do our best to actually look at the Resi AV performance right now and say, this is kind of what we expect between now and 2030. And the expectation is that, you know, we're not going to see less. Well, we're not, we're certainly not going to say we're going to, it's going to be 5%. It's basically flat at best, you know, over the course of the next few years, because if someone came in the room right now, Dan, and said, Hey, listen, I've got some data that says in 28, it's going to really rebound. I'd say, great. You know, I hear you, but that's all I'm going to do is hear you, you know, cause we're not going make any adjustments based on that because i think we all just want to see it you know and and when we do that this thing has an opportunity to really be an accelerator for us on from a margin perspective but right now we're going to assume pretty flat to downish behavior and try and make that product line less exposed more resilient by producing more products in the light commercial space that's that's what's in our control yep um so are you thinking about gross margins for the next two years flattish is how you should be we should be thinking about it investors should think about it because i guess over five years there was obviously a significant improvement over five years um but i guess a lot of the resi will take that eat away eat away at that you're right dan i think one of the things we said at investor day was don't expect gross margin to be linear yeah you know and that as we look at if we look at all the initiatives around 180i as we look at just the residential macro today what we think it's going to be in 27 probably you know parts of 28 that the real margin uptick which i think we said from now through 28 we expected 40 basis points of improvement was largely going to be 28 29 and 30 is kind of what we're how we're modeling things and you're you're you are investing um in parts of the business why you gave the gross cost number and that's in the net why don't you talk about uh the you're you know what you're excited about to be investing in what you think the return on that yeah that will be so the three areas that have driven the highest return for us in the past kind of five plus years one is our you know e-com experience i would put our our e-com experience today up against anybody that's out there in the market, AI-specific tools, search, nav, personalization capabilities. We continue to launch new features. Many of our small, especially some of our smaller integrators can run their entire business with the exception of ERP capabilities through the website and really not even have to interact with a human being. I mean, it's, and that's what they've been calling for. Those are the capabilities that we've built. So we need to continue to invest there. It's 2% higher gross margin than the base business. Every transaction, it's a stickier customer.

Dan Stratemeyer, Analyst — Jefferies

What percentage of the transaction now go through the website?

Speaker 2

30. It's 30. 30. 30% of the business today. God, you know, when we spun from Resideo, I'm sorry, when we spun from Honeywell in 18, we were barely doing 150 million. Now it's 1.4 billion. And so we want to continue that upswing. It's growing in the high single digits, sometimes double digits. That's just no signs of slowing. But, you know, you got to launch new features and continue to listen to your customers. ProEV and Datacom are the other two, and we're not talking about a ton of investment. It's more geographical coverage. It's boots on the ground outside, boots on the ground inside, some engineering capabilities, not product development, but just putting projects together, design work, registrations, those kind of things. The opportunity is there. The smaller, you know, integrators in the ProEV Datacom sector, I think, are underserved. We've been doing a great job there as now we are actually building capabilities for larger projects, especially in Pro-EV, but Datacom as well. So the end market demand is there. We'd be crazy not to continue to invest there. But methodically, measured, not recklessly. And that's the discipline. That's the approach we're going to take going forward. But outside of that, it's cost takeout. It's dropped as much to the bottom line as we can, which, you know, our intention long-term is to every year have EBITDA be growing faster than we're growing revenue, driving fixed-cost leverage, and not be in a situation where we're kind of having to cut our way to profitability.

Dan Stratemeyer, Analyst — Jefferies

Understood. My last question would be, remind us your free cash flow conversion, and in the near term, what is the highest priority for your free cash flow?

Speaker 2

We hover right around 80%, 85%. We've delivered that, I don't know, I mean, for the last decade or so. We're not a capital-intense business either. And so, you know, the next couple of years will be a little more high. CapEx will be a little higher or so because of the real estate consolidations, but typically 80%, 85%. We have three priorities in terms of how we're going to actually utilize cash going forward. Number one, which shouldn't be a surprise to anybody, it's delevering the business, spinning out right around 3x. We want to get down to 2x. That's priority number one that will remain in place. Priority two is organic investments in growth categories that I mentioned already, the three areas I mentioned, right? A distant number three is tuck-in acquisitions. You know, I'd say, look, one of the things is this was a tax-free spend from Residio. And so for a year and a half, two years, we're going to be restricted to do anything that alters the capital structure of the business in a significant way. There's thresholds. And I look at that actually as a bit of a gift. So we can't do any big transformational M&A. That one ADI initiative I talked about doubled down there in the next year and a half, two years while we're in this bit of a restricted state, operationalized the business. So if transformational opportunities come down the road, great. It's a much easier integration than if we were to do that today. So in the meantime, a high standard of looking at Tuck and Tuckwin acquisitions, margin accretive, obvious synergies that can be realized really fast, really simple integration based on what we know, a very high standard before we would think about doing anything like that, that would take kind of priority over the first two areas that I talked about.

Dan Stratemeyer, Analyst — Jefferies

Great. Well, thanks again for coming. and I'm going to leave the last minute for you here to have any closing remarks at your first conference as a CEO.

Speaker 2

No, I appreciate that. Thanks again for coming, pal. I do appreciate the questions. I appreciate just everybody kind of understanding the story, you know, where we've been, the track record that we've had, you know, some of the things you mentioned you started off with this, Dan, which I really appreciate the last two years and just some of the turmoil that we've been through. But just that from an investor perspective, most of that heavy lifting and the turmoil if not all of it is is behind us now the 180i initiative we've got line of sight on this is a business that knows how to execute so you can expect us to you know continue to do that expect us to continue to excel in our commercial core categories you know we're kind of back to where we were prior to the go live and continue to just fight against the residential headwinds which are here today and they're going to be here for uh you know, probably quite some time, but I feel like our plan overall puts us in a position to do as good a job as we can to mitigate those things. Well, good luck. Thank you.

Dan Stratemeyer, Analyst — Jefferies

I know you'll fight the fight and thanks for coming.

Speaker 2

Appreciate it very much, Dan. Thank you.