MSC Industrial Direct (MSM) 28 Mar 242024 Q2 Earnings call transcript

Good day, and welcome to the MSC Reports Fiscal Second Quarter 2024 Results Conference Call. [Operator Instructions] Please note, today's event is being recorded.

I'd now like to turn the conference over to Ryan Mills, Head of Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. quarter earnings second our to fiscal call. XXXX Welcome Officer; Actis-Grande, on our Gershwind, call our Financial Kristen Executive Chief both Erik Chief and Officer, me today. with the are

we statistics that our data call, During found various can of accompany refer Relations on presentation operational earnings our comments, financial Investor today's and in will which the be both to page. web

presentation. on safe me a is of statement, our which harbor Slide reference the earnings Let of summary X

as the within Our information this the these comments that as well actual to website statements statements on providing could are forward-looking U.S. forward-looking results by the statements. uncertainties differ the supplemental on risks These call we of and materially involve cause anticipated securities from contain laws. meaning those

in press is and Information release other risks SEC about these our earnings filings. noted our

presentation addition, comparable certain this reconciliations Please to to will to the In GAAP non-GAAP directly adjusted to the which financial of adjusted now measures the measures. I financial our on we refer Erik. non-GAAP measures. call, call which are contain over the the refer or most during versus turn reconciliation GAAP our website, may results, in

everybody. Thank good for and morning, today. you you, us Ryan, joining Thank

our past point move the As we date of performance fiscal halfway has XXXX, to mixed. been

programs such solutions continue ahead capturing and high-touch as Our implant performing vending expectations. share and of they're

not has sluggish core our markets. in hand, customer the inflected end other particularly environment, macro a yet in face in the of growth our On manufacturing base heavy

of This quarter. XX XXX growing national can top accounts, our only performance were be in where last the evidenced

I'm the in expectations. growth below revenue a challenging we've been to managing been result, business our As how At time, the same with has pleased environment. a date

plan while productivity ever. Gross our performance have cash my our as to efforts to And continue. been high strong, margin conviction generation has in date and is mixed, as they're expected been performance, flow our and

year fiscal of XXXX. during in and the back We our improve revenues trend the to into expect half fiscal

the the factors: have is year, sentiment of team more continue start coming our we while this belief months from overall improved macro several a grounded conditions the in calendar ground. positive And the about hear First, since not materially on to

mentioned, These to should and signings yield continue Second, incremental signings vending as and the expectations. the balance fiscal our growth outpace implant our through I beyond. year of

late Third, are which completed are improvements out to fifth, should starting roll pricing we our felt. the successfully the our web be initiative February, behind and enhancements And slightly marketing to proposition. benefits half in featuring planned expected demand realignment running as to the and our our increased during schedule yield Fourth, to just and website the back recent further year value we've benefit. efforts of generate awareness are by

as of our is as business hear, pipeline you'll growing initiatives and margin also for a returns conviction that derived execution productivity growth. gross My margin provide expansion the to runway ongoing from soon operating

priority, which mainly programs, Before key mission-critical momentum it I our larger detail way. begin through was performance over a customers. more to serve maintaining along and provide And our with our high-touch I'll the I'll walk our initiative that Kristen, in update turn first in

also We budget constraints. base compared temporary Public despite grew nicely installed as to by growth vending held XX% year-over-year prior sales XX% our slight implant by Sector programs year. with have and up

the to next additions X the We slide. quarter position exciting the our our to Moving metalworking during portfolio. with strengthened leadership offering on

product. with drive We'll synergies acquisition into X% technical e-commerce and of force a equipping car top working a channel and The which distributor and Canada. by strengthens MRO MSC's related line sales highly represents it the car This sales in first to look brings large region our presence Eastern breadth of is and supplying sales. metal industrial, in providing supplies currently

assets Christine. second manufacturing from in a as brings intellectual which capabilities, Dr. recently assets of is predictive it underpins the acquisition or his The announced the and technology Schmitz foremost the longer-term S-M-R-T, brings by exciting next from generation consists mines just SMRT the perspective, property developed with wife, us of us MSC Tony deal new to nation's Tony, technology, one This of of MillMax. milling which such transaction and

Slide by average happen QX growth to numbers growth I'll now reenergizing did in our rates. daily quarter did That benefits not reflect action. clearly, the the into put turn seen core initiatives our being is fiscal second that of core on priority customer X, And customer. second said, not the which as

Scores they was XX% order. We're and such end on indicators the as rates. do customers to seeing for The often cards leading web and page, improvements to customer often do add an across in describing our been on how we've Promoter reset already those the how how remaining near early often February, click do convert well several with indications growth item improvements website, future of cart, Net completed for pricing of SKUs boding

All of nice showing over prelaunch baseline. are uptick these metrics a the

in to to to several the e-commerce, prioritized we enhance the the quarter Moving customer second platform improvements experience.

to of which half was the So for year. this in now which enhancements new in search subsequent delayed the are search of planned back all late the the rollout engine, the launch full QX of expected launch and

This and awareness the earlier, customers exciting pricing to the website. front, the happening the we've web aimed I our is a what's on marketing company. to come launched at mentioned new on at program, initiative On introducing changes as generating

to down expanding encouraged we're sales final critical the year-over-year growth while cross-selling OEM priority fastener is due leveraging successful Our through early results. by softness, by developed offering customer cross-selling OEM formula mission And acute our remained CCSG.

quarter, I sizable market implant you early consumer MSC by to as achieved serving the build improving on a continued manage an this For customer, existing momentum. win the on leisure ability we look instance, updating from to during their forward significantly we success inventory.

line realizing a management mix due strong efforts. of I'll QX discipline, now switch with well to reviews gross category maintaining begin and to gears combination profitability price performed again our from and We in margin. benefits

Additionally, a sales. is approach results purchasing and freight of form yielding improved of in efficiency the inventory percentage our expense reduced inbound refreshed as

continuous operating a we're improvement adjusted new accelerating objectives, expenses, a role our is under momentum want points mission-critical increase productivity. This taking X company to morning to that the on you operating set to mid-teens of crucial to respect I margins is and how With this path to proof demonstrate in our play this our going for approach highlight front. inside

after on our slide, we that extensive the made distribution close decision you'll center. the Columbus First, analysis, to next see

X as nonetheless factors that are our priority. one was because clear it difficult cut, top there a While culture of this made places people our decision that

just was solutions what over and business decade opened business vending, we being our VMI explosion envisioned and implant. a The the have that in the we That could first when factor went ago. beyond building

as with out can needs of our And nearly our and customers planned. implication footprint be solutions portion of result, distribution Today, revenues. as the here our The business a operational staged represent our revenue is mix XX% that shifted. of a greater evolved center

the of the into our in was we've move enabler Pennsylvania automation and made that investments Elkhart, recent facilities. Harrisburg, other The Indiana years, primarily

with throughput while Columbus but allowed these they Slide investments enhance and capacity facilities. of 'XX while can execute begin half the expand during in customer see of in savings $X scale operating facility upfront levels. plan the expenses expected of to us only maintaining on the closure fiscal $X fiscal highest the burden, million annualized both producing The easing to will As order 'XX an back X, hiring in service to not efficiency our you million

sizing the is launched process improvement chain Second, recently analyzing of which on and network return network. study, from our with the through supply fiscal more details the end-to-end on by profit productivity entire We're total the an front, of target goods it this, we've flow year-end. we'll in

new to talent services across reduce labor Mexico Carretero, of center opened shared many key maintaining costs functions. in we've Third, a our while

offered the our And are and Our we're separation fiscal quarter, package company. with across associates progress. during voluntary the pleased early hires we second place, to initial in a fourth,

were Mexico, The growth. headcount slight is headcount operating the down by primarily shared website stats KAR, in QX. of from on of implant in and voluntary service continued tick separation, which Relations our from from offset section posted associate departures a Investor support additions show to a center This the due the acquisition of

now reductions accomplished while was sheet which pleased been cash Moving particularly our high and remains I've most flow, I'll our of turn balance $XX inventory million levels. from service importantly, to which our P&L. maintaining during with strong. our customer quarter, the

with that Our us the balance sheet leverage, outlined. remains at low plenty levels of pursue of to I've just providing flexibility investments

guidance discuss results things our Kristen updated our more and I'll now detail. in to over turn to

year-over-year the with second to of Thank quarter morning, key on same good fiscal and the quarter. Despite quarter and you, adjusted through $XXX days number our was business sequential soft everyone. Fiscal Slide improvement for both modest basis. periods. and reported a year-over-year X, you , Erik, price sales Please X.X% second acquisitions. the benefits see in declined and within million quarter off of particularly can metrics turn a volumes more the December, the ongoing where in both by from remained sales offset solutions negative momentum partially This

macro performed accounts the XQ. year, best, considering the resiliency first with comps average here. grew half XXX by significantly challenges am national sales XX X.X%, type, in up the despite customers the of top the customer By When account I in national encouraged daily our and of tougher

manufacturing quarter, suppliers were of experienced tiered local customers. from driven challenged in automotive. softness The heavy growth We to acute declining of public markets X.X%. the and by perspective, verticals, in and customers, demand support public the budget average end-market our an sector X.X%, other portions the of including Core end earlier softness daily and the federal had stages constraints. slight we year-over-year due and sector during production temporary that growth sales state experienced mid-single-digit From

both take of net internal exceeding improved to levels XX% Sales approximately implants the our grew company growth market. program net in year-over-year vending, across through XX a of solution sales at approximately total XX% year-over-year, XXX share we in of sales. showing daily remained QX and signings total despite X% only quarter quarter, standpoint, XQ. Signing company rates healthy our the year-to-date challenging average In implant sales our targets. From a fiscal represented especially during and continue XX% despite top during where solutions implants are represented

Moving for to quarter. profitability the

These countermeasure XX basis $XXX quarter the price margin efforts offset adjusted reviews. points in gross improved approximately gross continued including operating cost driven margin and The were category by by of acquisitions. reported largely Our headwinds improvement partially were expenses our Both million. year-over-year. was line benefits from efforts, and for XX.X%

in voluntary sales XXX Erik year-over-year, basis basis, with expenses up this last point of $X adjusted were to We percentage Combined restructuring lower of $XX year. a XQ recorded expense as an the increase million to a operating expense mentioned. primarily in in million compared On operating roughly related resulted separation that adjusted sales.

was largely associated Roughly $X million support expenses operating million solutions with this strategic $XX in our approximately driven by of step-up costs and headcount associated to of merit expense year-over-year is The growth digital of initiatives. and investments. our with X/X

expenses by to million due operating to the compared operating full quarter a On to margin XX.X% quarter the Sequentially, decline a couple basis, prior the year. adjusted operating increased X.X% expected of dollars of an margin in XX.X%, for prior XXX adjusted basis a of compared was merit. Reported year. was as points

compared mentioned prior step-up an factors was versus in EPS per with in the basis, adjusted sales $X.XX in contributing $X.XX were On combined period. previously year $X.XX prior year-over-year the to decline. operating the GAAP to The lower year. earnings the was largest expenses share $X.XX

cash to flow XX review balance our Slide and sheet to performance. Turning

continue roughly to Xx million sheet approximately EBITDA. healthy net $XXX We with of representing a debt maintain balance

and on operating We year-to-date, quarter second roughly fiscal target keeping including quarter, working achieve greater XXX% us than XXX% cash track reductions. flow in $XX full made the resulted This year. our to conversion during inventory for XXX%, the capital of in our of progress on million

year-over-year, Capital $XXX $XX generation cash tied and fiscal approximately primarily million Together, approximately solutions quarter flow ongoing of year-to-date. XQ growth. increased by investments expenditures this million drove to $XX and fiscal digital of million during $XX free the strong in driven million

to of including We deployed acquisition cash our intellectual quarter, allocation remains the shown and in on assets continues and buckets several Slide that SMART strategic generation sheet alluded KAR the from property during these Industrial cash balance XX. priorities fuel to of strong and Erik earlier. Our the capital

$XX also in of second We quarter. million the shares repurchased

Moving to outlook our XX. on full year Slide

some range it be margin. the we daily sales the performance if the halfway is the end and remainder downside am the fiscal at the through for likely average adjusted of outline, year, of is our bottom to will in later provide anticipated. risk both operating year, benefits I which There than about Given expectations

what's fiscal ADS imply control the This to with assumptions: heavy the expect meaningfully verticals. which following of macro improves end in conditions, achieve of it the our particularly off outlook, confidence To is levels, our based Starting XQ revenue. Starting with of lower we throughout would is not manufacturing begin the year. improve on in will remainder

public budget expectations through we of in expect there control, we our progress several sector constraints Additionally, to as Within are the the factors year. improvement. ease driving fiscal

First where ramp half rate strong. of solutions, the signings in as is our our revenue. in This growth especially recent implants should the second for particularly momentum wins is in drive

our from as second the benefits investments rolling in Second, strategic begin they our half. out

went previously the As is end early into and our mentioned, yielding at strategy full of Erik effect web results. new price favorable February

month. off be of be discovery fully The both platform by marketing will that product this our kicked enhanced in effectiveness our will supported Additionally, half. launched second the campaign

our first half better assumption. than above On our the and gross was the profitability expected during performance annual margin side,

second XQ levels. slightly or expect gross continue half to above margin be We at

As being higher costs we profitability the driving see it improved fixed half. and on benefits second in our leveraged expenses, to from operating relates volumes, productivity

Before of I half of these move the on second the on of line other will throughout to year. items, increase remainder drivers some the expectations effectiveness

on result, historical follow it the weighted be and patterns will our the case that a be As doesn't half instead second fourth likely quarter. will more

As the point fiscal thinking 'XX we're XX margin. it worth of growth between and points adjusted that profitability, relationship every basis operating the relates that about of is is sales growth revenue approximately way to

the likely of minor in guidance to lower rate prior be in tax will million. And other X approximately will of updated expense Regarding $XX end XX.X%. is I G&A at assumptions lastly, our come to our now outlook, highlight expected adjustments. XX%

remarks. With turn closing that, call I the will to for now over Erik

you, Thank Kristen.

above across is in yet far focused optimism longer remain XXXX both margins XXXX. remain mid-teens. meeting operating execution thus mixed, of providing initiatives, confident. for our fiscal of expectations. term, not or solid the in the of back IP evidence I mission-critical we performance points see Our our more I half Despite of outgrowth And our basis objectives squarely on XXX fiscal this, and

I want the our now dedication And our to for their we'll mission. thank our questions. line for supporting and entire open in team up customers

Manthey question Instructions] David first [Operator with from Today's comes Baird.

half outlook. underlying Kristen, What What's as growth IP into first assumption for your Erik, question is IP is growth? assuming that acceleration the the say, you the on the you're half? back second

Dave. Yes,

a kind and of to improvement some overall, half, inflection IP, So improvement, where particularly in of more we've meaningful metals. I'll the for second the equipment and give steady seen note you expecting but we're not significant fabricated IP thing is machinery expected

and In and little down subindex XQ, down over was bit about X%, point. machinery the a equipment metals fabricated was of X IP

XX% IP it up index XX% about to quarter. in our And given of So at makes which IP how our while of our of markets, markets, the end are the when IP our X declining. end XX% were index. our look X exposure that's about X XX% revenue, to revenue, second we you sort fiscal is those of then only declined roughly if top think index weighted, Their of

So when to of macro, of the top in we our about is looking particularly those guess X. think improvement X And within that one we [indiscernible]. unsurprisingly are just add growing is I top composition

Dave, beautifully. add Kristen I'll -- it summarized

that ramp half we instance, to accelerate our inventory accounts, burning slower that, in little on that of of expect one we burn I'd the going to a is year. factor inventory add, the through the expect in back and accounts for that evidence the say as of easing seen eases. is to And area. do particularly national beyond bit Just another half which when we on back implants a assumption. other win IP We've point be

OpEx Okay. You quarter here. you a also where us parts second sit the lot bridge there's Can today benefits but from into the in second help leverage, half? you mentioned moving from of

You the bridge from us sort separation, at voluntary I of talked right mean other into with the about puts takes. level acquisitions, investments. DC, you the Columbus the half and merit, can now, back we're

sure. Yes,

I'm put you're not guidance and about thinking a OpEx XX%, guidance, revenue quarterly give going to a you're going to year we're there, how through will because throughout but let's it, if the too. depending obviously, X% then on roughly, I to on how year, call little variable are So some you're there OpEx cadence give the -- differences the assumption flowing in

there you As are of mentioned, are a things lot that happening OpEx. in

So as investments on moving into XQ. to we think bit more little be about the quarter, a weighted we third are going in

expenses then of to a with to growth. the heavier that advertising of tied XQ is due are solutions and investment technically the expenses, Some Columbus of also some restructuring efforts not lift shutdown, qualified the around there's timing associated in and which

move would sequentially fourth you investments chunk obviously the what productivity step-up about don't a tell if based will you expense, quarter, in XQ. have that I from is good of we QX on to QX, repeat variable bigger have offset you'll a think QX, target in to a that and in

a and to on is So are The would that the lot which your which if half. pieces. I X the a about moving year-over-year of basis the the broadly of half year, candle investments, tallest are back merit, strategic think about the expectations OpEx other explanation, there step way to for increase try and on full sticks is I simplify point,

We're To the strategic a and year-over-year are with moving your so covering things of up those point, story, pieces the lift. simplify that merit lot emerge D&A, that to acquisitions. investments productivity, on on make the

Tommy our comes Moll And with today from Inc. Stephens next question

it XX%, significant second math, mentioned, sales our as on precisely down it's average the versus progression And first drill versus does imply pretty approaching half. more the half half second daily first you for wanted revenue I step-up a the expect to the half. you or a bit progression on

even through tell there? quantify March run the you again, that bridge trend? for that the going you more macro given that to gives for there, what or that the some anything there's particular, on qualitatively be improvement you're reason of can to you see us bridge, just in And if particularly So us can drivers part optimistic

Tommy. Yes,

a let give you So right. bridge Kristen detailed and exactly are me more numbers and start will then breakout your a because

But number. macro. than down was Our see by taught down seeing mostly expected, primarily in came which with obviously, numbers core we're core clearly, weighed satisfied we're obviously, board, softer the could the what came customer the the macro. you in customer. it QX I across But mean in confidence, us we not

the coming touch moderate improvements have assumptions certainly, is the of the confidence the Kristen that think initiatives we'll I but plan. and behind from, to are that the some also on, macro, mentioned execution in tracking growth we

So they're online. work. will timing the But quickly you confidence do going take come things how we math. there's to on through a have that Obviously, element Chris

great Tommy, that thing little still there's obviously, other say, number just one The data But a is of not March couple on color a is, thus just we week. I'll next One point. through things. obviously, have because the a far March a reminder

we're the an pretty with a ways estimate month. go still you good to giving So in

March color on out momentum of and month. still a be but pick we did give the it Obviously, have the it up some is started would week, of in another than things. One one. is it's I couple part The that last been started slower out again, slower

I And given those our are Two we core would confidence step-down size of on. and say customer was was X given saw an public a market March to going national our clearly performance. and we in of share saw interestingly, what's the where areas greatest, the accounts sector, ability was what our and sort where performance bit is base improvement in actually

down about little of a they don't but the So March, core not did bit we either come those whereas in areas, better. -- got concerned we're

little obviously, but little So that a sign a yes, of it's is -- life there. early

do going can I over to think turn to I'm for the on it math you Kristen walk. who the

Sure. Yes. Thanks, Erik.

little I'll on that I the you the big second XX%, a growth of through about to the the bit some your Tommy, side. way walk then half, So would think the buckets elaborate on and point

stronger we half. do typically seasonality, So have a second

Based that about March, on sized that's time end. last we points what going seeing to the on at to lower certainly talked, we X X we're we think of I in be inflection. think

So there. apply about a X-point assumption

little so which what X in tied improvement. benefit initiative, this on of we a side, pricing, On the On we're to is buckets the about That's the the with But there IP to indices. small took be the there, for those early to what point, on looking second we're a we that's thinking Again, X increase in becomes price half. Dave's get we the touched on in bit points, at put do you. a XQ. earlier that X-point question going about kind I'm and macro would balance a growth X-

The points. about X first is of around solutions, half which is that

we've So the and have roughly if had QX contributed our on FY that ramped up. yet and you accounts, in if were 'XX look we fully at to would is FY at that 'XX, $XX maturity those in look signings come they more that million

more still. have think still that were So second in we're around sign come of would that to of well benefit and signings half recent in-year yet implemented at expect we of when some looking not to of first the half those on in signed the things we that 'XX kind and as 'XX progression solutions, as benefits

efforts have we're of then highlighting within the we improvements X/X remarks. sight prepared of expectations generation that pricing, demand both do we the able around state on line some things that that on in things on to all and Erik doing next track and based put is the kind the those local the sector, then that we're of that public that, of pipeline the budgets. to The have about enhancements that things balance around And around I of website. web in that's And spoke the

is growth go set that of the like I X to when of be is not clear based waiting internally target initiatives. relying get or everything macro want improve seasonality. like for on, don't on on seasonality, here a say, sitting we we're what doing it's too, we to points But we're our for Internally, team,

example, confidence you inside OEM of the of but things are company the the highest we like great improve a targets on are waiting have countermeasure here growth. don't on and doing I've I ones progress you anything the given that leave with for not there are degree on touched economy perspective the happening idea inflection to we're that the from have So fasteners, sitting on, there. want other just a else ones lot that to

there. Thank the answer for you comprehensive

As a bit follow-up, in question ask not February. execution pricing these the of all realignment, is I to successful is pretty than as just about easy. initiatives completed a it kinds you're to positive. seems there's wanted little discussing eye initiative largely sound my web a often like which drill The deeper KPIs you and meets offered in because But the more

So trends for customer of the with been in you, the that your Or seeing anything some case challenges we're there reflecting some this has that surprise mind? is that core initiative? the not there risk are the is

reverse me in let those order. Tommy, So take

that we bulk link see the QX. March in not core customer, absolutely the to signs if tick as with anything, at we early the of campaign SKUs customers, the to positive. awareness If anything, challenges I the better so hit far got it very end net realize a this, So the of because would core given that and

let here. on tongue, a it's right like this to for switch. sitting It a lot you're This and Look, Martina a there call gotten by led on us sounds was and roll It's twice-a-day It company. it the the heck of to drill stand-ups the are attention. off click has team, inside of of in easy a mean her effort I this. heavy a is

is saying think to is, anything days. hesitate early I I of we're because what such declare it success

level details. Have the I make has a in the managing by execution level But what Sure, at say any a And this done I kind gets going I of of to surprised. the to SKU, -- a at that to of encouraged though of down been always fiscal picture effort, we're is seeing. really would there's constantly through kind clearly devil this year. good. in are that be there'll We big And the be surprise. the details surprises? mean by what think balance been the rises customer project is fine-tuning to nothing we're there

doing So is early of again, you're goes This it's -- this is customer terms that we into detail, of good, growth like you're effort telling a how it's means refinement. us voice about customer from gives ongoing a But of measures, very we're that scorecard dashboard not. encouragement what us, in but goes of not prospects, that signs look what an clear encouragement in is early when we lot on by what a terms hearing of of and I they're done. profitability hearing us leading have switch and indicators and a talked light behavior across is are but early no saying

And our Volkmann next question today comes from Stephen from Jefferies.

second destock because that half. sort mention of might inflection the curious was you be But the Kristen, kind of called you out. list Erik I what gave a pretty in of the laundry long didn't

-- So X fifth is things? of the that that that part is part thing? of a Or the is

macro, with I'd say No, in we're Steve. putting that

Okay.

Maybe points, So with macro up X the of the end destock. even that's... to X

thing other I of guess end add have we it like that of just it's destocking, is I normal. the last year know sort sales seen don't new I'd I'd And sort or but X, becoming calendar it call the like the Yes. of year seems an if pattern

belt first your too. that half, years that, are picking looking years, of some year-end tightening. in second when you that's inherently back in seasonality half as just if probably like suppose just the seasonality number, probably we up the not It's in I necessarily calculate prior like So at destocking as prior assumption, much

Got it.

of just evolution for the cost rest any differently, slightly how then you're about And in Great. price Okay. year? thinking the

Yes.

price kind which margin you we offsetting year, cost full successful QX at be we've countermeasures had largely we've pricing levels the to in the the Feeling gross headwind. So second in the the now transactional good broadly, the if the or about been second run And place of price cost half. expect above for to out favorable then in assumptions slightly half really, we be that really with still in of expect year. more --

So is been worst the pleased countermeasures the certainly really but then that us, broadly, have that of how headwind performing. just behind happy with

And Chris Dankert from our with next comes Capital. Loop question

half dig highlighted I little and bit more on I confidence be -- bit you to expected us more in could Maybe mean just gives little of some that product that and in fleshed been hoping digital driving color delays guess what's I there? revamp the benefit digital guess, the would but out just back what overall what give If that great. benefit a into 'XX? is, you here. rollout, discovery on you the a that any the and

it, Yes, got you Chris.

X we're fronts the So meaning lined on that X product basically function. in customers the there's or both. through we're moving particular. our have that platform, those up on the experience, go are terms and fronts digital our transactional of engine search website, And And in improvements discovery -- we

really better the we're and great the the customer. second experience in make on. and experience better to more those the Those are moving. thing overarching make website overarching the -- They're a more and personalized is the areas it in anchored as more X which goes and time are just aimed to One principles. seamless is continuing X customer frictionless, And for principles

line On as conversion looking of we the actually tracking bunch basically got is finish the at we're Chris stuff this month there through into we're QX over What rate. such a platform front, metrics and this month.

to and website, barometer we're then customers an conversion XX,XXX improvements. the to revenue how at which every leads a looking good converts at ultimately is X,XXX order, which is we're customers, us, sat customer numbers come for that rate, So for looking to that many

what of and some over it's out we basically always the but into the felt all platform the we done next And quality the found while do make we to be by pushed overarching first. really the important. we kind of that more changes in would that the had search of search, were of it are could better, series going there be be And lines slightly We're are search say with was is have, important, quarter better. QX, changes we a I second there experience those Chris, new or make opportunities On the We've principles, way. nail wanted -- to and bulk architecture We search will first in platform, to that QX. on X the focused is improvements. principle saw to confident delayed. Those time are the refinements we is to expected good.

And so we quality time of with line. went the mantra over

be in sight, conversion we're from get because be looking out going rolling is the What there line will metrics revenue can the of that we're going to for looking metrics performance? Chris, be so back close conversion into half. internally at to we And

make still efficiency the really But there. up helpful. we following closure? DC And and today of there's then like that on serve going of I more level of level following That's in is business us for the some closure currently sense set what general just guess, what a sales adjustments Columbus, just sales programs can for

Yes, Chris.

centers a already with mind. of a a pretty substantial X So and will very network plus standpoint, the remain of what the lot coverage from can growth, really, closure, had time had rest we the distribution with The long post a would I this situation. takes in a say support this time that primary Columbus good like geographic business is horizon decision obviously,

Columbus mentioned was X factors that changed. the throughput. I had around And

of a and to of plenty there's X that So being X which of on throughput business lot there capacity. go X room being factors, front for with solutions those automation still automation, i.e., the the opportunity mix is

-- we is that would launched I The to study. mentioned other networks, say network we've Columbus, addition I this in a point are

study around is going productivity. network has to mind. X One be goals So that in really

that self-help here you our gets margins. come go story and towards with can mid-teens back be expect will operating of us So part targets productivity to

how part other is we study that of customer service. The though do provide better

So we expect the productivity opportunity.

also network to support to expect even into We the better opportunities service us way the and future. provide allow

study. we is, think coming punchline going the growth, network we opportunities feel support to get good So more out where now continued are and we're of I about to

comes question Capital from with final KeyBanc Ken our Newman And today Markets.

morning. the half a bit to Good differently. back just little wanted bridge I take maybe

deck, statistics the numbers, in below operational there. just you've of you March where the end in have if your guide. historical take got seasonality it you the that think look does year follow preliminary full it low you monthly And If do from you table I

of second there's we there it's you whether from just to curious that anything should of the highlighted be kind just in of else holidays. that kind half stuff Outside if first half, aware of I'm of, timing

aware anything be is should quantify think us monthly to impact? Or Friday there I you going Good of versus there's typically. I that seasonality from we that can don't if way a be here in else perspective? April March there's know a help if

Yes, Ken.

I'll fiscal lovely the of of Friday. the So part Friday first of with actually maybe year. the was on on this our Good your start in and -- March, calendar, Because both year question last since Good month second

the on little the So I'd not, say largely always last of March. a a but of day bit nonevent that's with or depending month noise whether there's

you up that X seasonality first things To out that point, the really you for normal half the the we drive are seasonality, second year, if would number your first imply at differently, buckets main there's that of normal at that's would looking run sequentially, a yes, kind to like guidance. would that improving if the inflection bottom part half to of run seasonality the out. average end of the month-over-month your question, of And than below you upon

it's the to that. lumpy, growth of destocking recovery come X they And tough which the we initiatives. then talked month is that And exactly again, into thing First -- kind guess, about I when online. the Steve mentioned peg macro is

we assumptions we line some energy have the core time, or to about outlined, customer obviously solutions, If the on sight sector, the reenergizing demand think when of good items of if core you you initiative in then and the the think inflection the how tells volume to historical don't those. about and price lift we get from our repositioning you really us from list because web, perspective model what that on are those to have an baseline think good line customer X but that sight toughest anything gen, about from the to all pretty improvements public

think kind different assumptions you're have modeling about when set we those make So to putting of assumptions of of pretty X. range about on a wide that you initiatives,

half the and I you second you projection. expectation sight. again, it's have initiatives -- the the So month-over-month macro of But the and yes, the what out line have from inflection X absolutely saying if the parts know we're drive to the outlined I modeling a solutions, you're run were to improvement growth of over-rotating growth different initiatives also to it just that and public the on tricky, earlier, why make gen, the demand sector does

Yes.

From coming do guessing a guys into stuff or Baltimore which water the income from from I call, of friction, curious for am obviously, lane nonevent of of it now. the there's touched helpful. a how any cost chain if supply things as have That's still this whether OpEx follow-up, on got on you've dynamics, others Okay. you bridge, earlier logistic transport that's maybe even the about over think from half? but obviously, But lot in the shipping through expected I'm kind impacts any maybe going back a you in flowing the statement line. is

the obviously, so is the supply monitoring to I Ken, early Baltimore But far, new closely like situation would and East impact -- of take to there some say events we're it's modest. Yes, disruptions. it. too chain the in so projected and tragic, so Middle I'll Obviously, be is say. so

could change. date, lot a now, the on have of But we focus and impact counterbalancing Obviously, to modest that sort freight. of

there, on see network talk of us opportunity we freight. some performance about a You lot study, heard improvements the the of

headwinds that it's offset size, we grow So got sort this of modest it's the at but it. point, a in lot possible could to

the to for question-and-answer closing Ryan remarks. conference session. This concludes our like Mills to over back I'd turn

you, for us joining Thank everybody, today.

the quarter. conferences will forward and to Our this look I next earnings at Goodbye. X, July call be on upcoming seeing you

attending We conference all sir. concludes you, you This for today's call. Thank presentation. thank today's

now lines, You day. have wonderful a your disconnect may and