From Wall Street to Wholesale: Andrew Pacifico's Unconventional Path

Hugh Hornsby: [00:00:00] Good afternoon. This is Hugh Hornsby with Blue Collar Smart. Recently, I [00:00:05] had a conversation at the grocery store and somebody said, "Hugh, what are you up to now?" And I said, " I'm [00:00:10] building a podcast, and it's called Blue Collar Smart." And they said, "Why are you calling it Blue [00:00:15] Collar Smart?" " When I was 10 years old, fell on my head, was diagnosed with [00:00:20] epilepsy, had a learning disability, and because of that, I always had to look at things from a [00:00:25] different perspective." For years, I used to call myself Blue Collar Smart, but I realized [00:00:30] that what that had done for me is it put me in a position to look at the world from a [00:00:35] different set of eyeglasses. Today, we have a special guest, a good friend, [00:00:40] Andrew Pacifico, who is the CEO of Everflow Supplies. Andrew, [00:00:45] welcome to the show. Andrew Pacifico: Hugh, it is a pleasure to be here. I love the podcast. Thanks for having me on. Hugh Hornsby: [00:00:50] You know, Andrew, uh, before I start getting into the s- uh, the success and where you [00:00:55] are with Everflow and some of the challenges that you've had, uh, can we drop [00:01:00] back a little bit? And we're always talking about the underdog, uh, and we're always [00:01:05] talking about built different. Was there something that happened to you when you were young [00:01:10] that you could kinda share with the group that really maybe changed your [00:01:15] life? Andrew Pacifico: Yeah, I mean, look, I think, um, there, there was no specific incident, um, [00:01:20] but, you know, just a little bit of my background. Second-generation immigrant family. [00:01:25] Um, both grandfathers came over post-World War II, uh, and that was kind of instilled in the [00:01:30] upbringing. Uh, and so that scrappy, work hard, my, you know, my, my mo- my mom [00:01:35] had two jobs growing up. My dad commuted 90 minutes each day to, to the office. [00:01:40] Um, that was always instilled in me. They kinda gave me everything for education and kinda [00:01:45] put a lot of, of resources into my education. Um, so I was always surrounded by people [00:01:50] that, you know, quite frankly, um, you know, kinda had a little bit more circumstances.[00:01:55] Um, and so I had to work for it, right? I had to be very scrappy for it. Um, and that's really [00:02:00] what kinda drove that underdog mentality in me of, hey, I, you know, if I wanna [00:02:05] kinda, uh, do what I wanna do in life, I'm gonna have to work harder than everybody else. Um, [00:02:10] you know, a- and that's really kinda where I came from from a family perspective, is just that, just that upbringing. And, [00:02:15] and you know, like I got two young kids today, Hugh. I wanna drive the same kinda discipline and work ethic in [00:02:20] them as well, 'cause that's really what it comes down to, is just, you know, you gotta kinda put in the time and pound the pavement to [00:02:25] get things done. Hugh Hornsby: Well, I love that story because when we, you know, everybody that we've [00:02:30] had on here, uh, when they start to drop back and they tell a little bit about their stories, there's [00:02:35] those blue collar roots of, of, uh- Where they got started. And I think that [00:02:40] that's really when we talk about the trades, you know, we're t- talking about those [00:02:45] people that helped start America and helped build it up. You know, a- after that, [00:02:50] um, you went, you, you went to Rice University, and then shortly after [00:02:55] that you went to Columbia. Can you talk a little bit about that? Andrew Pacifico: Yeah. So, uh, you know, [00:03:00] I, I'm a bit of an adventurous spirit. Um, you know, again, so I grew up in the Northeast. Um, [00:03:05] and, you know, it was one of those things I wanted to go to college, and I just wanted to go live in a different part of the [00:03:10] country, and I wanted to just see a, a different kind of view of life in a different, different part of, uh, [00:03:15] of America. And so I started looking at schools that were in the Southeast, [00:03:20] and then gradually they kinda, uh, opened up to Texas. Um, and, and I [00:03:25] went to go visit Rice University in Houston. Absolutely loved it. You know, I don't think my mom was too, so [00:03:30] thrilled. I mean, I was 1,500 miles away from home. Um, but she got used to it, right? [00:03:35] She knew it was the best opportunity for me. And so, yeah, like I went to, you know, undergrad- undergraduate down [00:03:40] there. Didn't know, never stepped foot in Texas prior to that. Um, you know, I still tell, I still remember a [00:03:45] funny story, Hugh, is I go to, I go to Houston and, uh, they turn around and some [00:03:50] guy says to me, he's like, "Oh, you're a Yankee." And I kinda look at him and I say, "Ye- yeah, I'm a Yankee fan." [00:03:55] Like, "No, no, you're, you're a Yankee." And I was like, "What does that mean?" Right? 'Cause I, I just [00:04:00] never spent time outside of the Northeast, so this is a whole new world for me. Um- But man, [00:04:05] just great experience. Got great exposure to kind of a, a, a full, true, [00:04:10] you know, different parts of the country, different facts of life and everything. Um, you know, so when I was down there, I [00:04:15] studied economics, uh, made my way into, um, actually Wall Street down, down there in [00:04:20] JP Morgan and, and did a couple of years in, in, in investment banking down there in the oil and gas side of [00:04:25] things. Um, that was great experience. Uh, kind of saw how that business worked, [00:04:30] and really that's what drove me to kind of where I am today, 'cause I really love the business side of it. And [00:04:35] so, you know, obviously, uh, 2006, 2007 timeframe, uh, kind [00:04:40] of I would say best of times, worst of times. When I started banking, oil was $140 a [00:04:45] barrel. Uh, when I left to go back to grad school, it was $40 a barrel. Um, and so I [00:04:50] had a l- you know, wide spectrum of experience there. And so yeah, I went back to grad school up in the northeast, went to [00:04:55] Columbia, like you said, in New York. It was good to be back home for a couple of years and get that exposure. [00:05:00] Um, you know, it's being s- I spent a lot of time with family up there as well. And then, you know, after I [00:05:05] graduated, I realized I, I really wanted to do something in the business side, Hugh, [00:05:10] right? And so liked the oil and gas, liked the energy, but I didn't wanna go back to banking. I didn't wanna go back to [00:05:15] consulting. I really wanted to grow something and, and, and I really wanted to, to kind of work in that [00:05:20] business side. I like the people, I like the, the strategy. I like, you know, growing and building [00:05:25] something and, and, um, kind of by dumb luck, I got introduced to a, uh, an opportunity in [00:05:30] Texas in wholesale distribution. Um, I, I didn't come from the plumbing side. I didn't come from [00:05:35] the, the, the wholesale side. And, um, I ended up meeting with, with, you know, your [00:05:40] brother Chip and, and at Morasco and absolutely loved the, uh, the opportunity. And, [00:05:45] and so that's kinda how... It was my first foot in the door in the distribution side down in Texas [00:05:50] back in, uh, 2012 that was. Hugh Hornsby: Yeah. And, and you haven't looked back ever [00:05:55] since, have you? Andrew Pacifico: Ha- haven't looked back. Absolutely love the industry. Um, it, [00:06:00] it, it is... I, I love the people side of it. I love the, the value we bring, [00:06:05] um, not just to society, but the, the economy, just the opportunity we give to [00:06:10] the, you know, f- folks from throughout the industry, whether you're on the distribution side, whether you're in the supplier side, [00:06:15] whether you're in the contracting side. Um, it is just a fantastic business to be a part of. And yeah, no, I [00:06:20] have not looked back, and I kinda dove headfirst in, in learning it and understanding [00:06:25] it, and, and I absolutely loved it un- since day one. Hugh Hornsby: So you had 15 years there, and then [00:06:30] shortly after that you show up over at Everflow. So talk a little bit about your journey and, and [00:06:35] how it's built you up to where you are now. Andrew Pacifico: Yeah. So, you know, look, at the end of the day, I love [00:06:40] growing things. I absolutely love kinda being the underdog in the white space ahead of [00:06:45] us, um, taking market share, growing a business, building a team, kinda [00:06:50] starting something new, um, and quite frankly, leaving a legacy, right? That's, that's how you, you better the, the, [00:06:55] the, the environment around you. And so when I first started at Morasko, you know, we were [00:07:00] primarily in Texas. Uh, and I kinda joined as a jack of all trades. I, quite frankly, just, [00:07:05] I took a plunge, right? And that's something I would tell young people all the time, is when you're young it- [00:07:10] it's okay, like evaluate the risk, but it's okay if you go into something new, um, if, if [00:07:15] your heart's in it and it feels right, and that's kinda what it felt at Morasko, where it's like, "Hey, I don't know anything about [00:07:20] the industry. Don't know anything about the business. I come from- You know, oil and gas energy [00:07:25] side. Here's, you know, plumbing, HVAC, waterworks, distribution. Um, that's okay, [00:07:30] right? And so I learned it. I kinda just came in there with a, with, uh, eyes wide open, [00:07:35] um, trying to just be a sponge and absorb as much as I can from the industry. [00:07:40] Um, so I, I was really a jack of all trades here. So when I started there, I was doing everything from, you know, [00:07:45] M&A to, to operations to strategy to, heck, even putting together board [00:07:50] decks and things like that. Um, 'cause at the time we were owned by private equity, and so there's a lot of components [00:07:55] of that perspective as well. Uh, we ended up doing about 20 acquisitions across the [00:08:00] board. Uh, it kept growing our footprint, you know, Texas, then California, then [00:08:05] Arizona, then the Southeast, Atlanta, Charlotte, et cetera. Um, so it was a great [00:08:10] journey. It really was. And then, you know, when we ended up selling to Reece Group, uh, [00:08:15] which is a, you know, the strategic company out of Australia, good group of guys, good company. [00:08:20] Um, quite frankly, I had every intention of leaving. Uh, I was gonna go on to the next kinda gig and, [00:08:25] and, and the next thing, um, but I really loved the industry here, and that, and that's [00:08:30] really what kept me around was, hey, I, I, I love this, this, this side of the [00:08:35] fence and I like the industry. Um, and quite frankly, I got some, some good mentorship from [00:08:40] a number of people saying, "Hey, you're at the career where just be patient. Uh, you know, don't rush things [00:08:45] and, and continue." And so I stuck around with Reece and really learned a lot from them. They were a great company to work [00:08:50] with. Uh, learned a lot for terms of sales training, in terms of employee [00:08:55] training, in terms of how to build a team, kind of just a larger organization. [00:09:00] Um- And then I ended up taking over their waterworks business view in 2021. And [00:09:05] so Fordeline Waterworks is their, is their waterworks side. So yeah, so I became president of [00:09:10] Fordeline, um, and absolutely loved it, right? So again, talk about the growth, [00:09:15] building teams. Um, you know, we ended up opening about 25 branches when I was there. Uh, [00:09:20] ended up doubling the business when I was there. Uh, and just had a lot of fun doing it. Um, just an [00:09:25] absolute blast in terms of growing the business and, and taking white space, uh, which is what we wanted to do. And [00:09:30] so that's, um, yeah, did that for a couple years and then kinda wanted to do a, [00:09:35] uh, kinda wanted to take that next step in the career, and that's what got me to Everflow Supplies back in, uh, [00:09:40] 2025. Hugh Hornsby: Well, and, you know, most people know that it was seven years ago I walked into [00:09:45] Everflow Supplies, and, uh, I think there was three salespeople. They were [00:09:50] all from New Jersey, and, uh, and it was the same type thing. It's like, you know, there [00:09:55] was an opportunity to build something and, and, uh, David Templar, I just, I [00:10:00] thank the world to him because he gave, gave us the opportunity to build this out. And, you [00:10:05] know, I really wanna talk about that a little bit. But I wanna say before we move into [00:10:10] this is that, uh, the one thing I realized a- as I think we took them [00:10:15] from 65 to 155 million in, like, three and a half years. Uh, when I [00:10:20] heard you were there, I, I kinda had a smile on my face because I, I know that you were really [00:10:25] invested in the industry. Can you talk a little bit about you walking in and, uh, [00:10:30] taking a look at a founder-owned company, uh, from somebody who started [00:10:35] the company out of the back of their van to what you're trying to do with it today? Andrew Pacifico: Yeah. [00:10:40] Look, I mean, uh, there's a lot of similarities between Everflow [00:10:45] And when I started at Morsco, um, it was not a mismanaged [00:10:50] business. I would say it was an undermanaged business. And, um, the founder, David, uh, still involved in [00:10:55] the business today, really quite frankly took it as kind of far as, as he really could, um, [00:11:00] as the founder kind of perspective. And we were just getting to that point, like any company, Hugh, there's, [00:11:05] there's life cycles, there's trajectories where y- you just need to kinda have some, some [00:11:10] more scalability, um, kind of perspective in terms of the, uh, uh, of being able to grow the [00:11:15] business. And so what was great about Everflow was the bones were really solid, right? [00:11:20] So good reputation in the industry, um, knows the space, been around the industry for, [00:11:25] for multiple decades now. Uh, good team, right? So again, I was just as you were [00:11:30] excited to hear about me, me joining, you being part of the team was also kind of the [00:11:35] critical decision point for me as well, 'cause I know, hey, there's some good executives there, some good leaders there at [00:11:40] Everflow. Um, so that's what really excited me. And so, you know, when I took over, [00:11:45] it, it was like, "Hey, how, how do we grow this thing? How do we, how do we double the business? How do we [00:11:50] actually position this business kind of for long-term growth?" And, and, um, you know, quite [00:11:55] frankly, it all starts with kind of building a team and having the right people on. So there were very [00:12:00] few executives, uh, at, at Everflow, right? So we needed to hire a CFO. We needed to [00:12:05] hire a chief procurement officer. We needed to hire s- a chief human resource officer. [00:12:10] Um, we really needed to bring those positions in to help us kinda get to that [00:12:15] next level of growth, 'cause we were gonna grow organically, and we were gonna grow via acquisition, kind of doing [00:12:20] both. Um, but you need to have the right team and the ni- and the, and the right framework in order for us to do that. Hugh Hornsby: And, [00:12:25] and since then, I think you've hired how many salespeople? Andrew Pacifico: We've hired, [00:12:30] uh, about 15 Hugh Hornsby: Yeah, 15 and, and, and a new distribution center? Andrew Pacifico: [00:12:35] I, I, I always tell the team, Hugh, and I did the same thing at Fordoline, um, you know, [00:12:40] I, I, I've done this... And again, a lot of this is not my original thinking. A lot of this is just experience [00:12:45] over years and years, and, uh, just the mentors I've had at Morasko kind of, quite frankly, there's too many to, to [00:12:50] name, uh, folks that have been in the industry for a while. But 90% of [00:12:55] success i- is just showing up, right? And, and it's that, it- it's that putting in the work, [00:13:00] that putting in the time. You know, it's that old Woody Allen quote he said many years ago. [00:13:05] Um, and that's what I'm kind of just keep harping on with our sales team is if you're not [00:13:10] there and you're not making the calls a- and, and you're not physically cr- you [00:13:15] know, really showing the value to the, to the customers, 'cause, you know, um, just for everyone on the [00:13:20] podcast to know, our, our customers are all wholesale distributors, right? We don't sell direct to any [00:13:25] contractors. So everything we do is through wholesale distribution. Um, but you gotta make sure your value's known for the [00:13:30] wholesalers, and you gotta be there for them. And it's hard to be there for them i- [00:13:35] if you're, you're calling on too many of them, if you're spread too thin in terms of geography. [00:13:40] And so that was really one of the first things I identified was, hey, if we really wanna double this [00:13:45] business, we're going to have to invest in our sales force, and we're gonna have to add some, you know, some folks that are [00:13:50] actually boots on the ground in, in these regions. So, um, that's what we ended up doing, Hugh. So I kinda [00:13:55] mapped out, hey, these are the people we need. We need to add some more resources in, in the Sun Belt. [00:14:00] We need to add more resources out West. Uh, and on top of that is we did open up a distribution center out [00:14:05] West to help with those customers in that, in that western part of the US, 'cause, you know, prior to that it [00:14:10] was, um, you know, all the product was coming from Texas, and it's hard to really, you know, ship same day, next [00:14:15] day if you're coming from a thousand miles away. So, um, but yeah, that, that's our [00:14:20] real push, Hugh. I mean, um You know, one of the things that I, I really focus [00:14:25] on, and we're gonna be rolling out some sales training, um, really emphasizing that, that kinda c- [00:14:30] that kinda side of the fence. Um, but I always emphasize the sales team, the, the, y- you know, the [00:14:35] process over results. That's just something that I, I spend a lot of time pushing, and I think it's good [00:14:40] for life in general. Um, it's just a good lesson I learned many, many years ago. I think it goes back to the [00:14:45] work ethic that my parents instilled in me, and the discipline my parents instilled in me is, look, [00:14:50] you, you g- have to put the time in. You're gonna have to show up. Just keep [00:14:55] pounding the pavement and good things will come from that, right? And so in our space, [00:15:00] that, that requires actually visiting the customers, understanding their needs, understanding the value that we can [00:15:05] bring as a company. Um, but you can't do that if you don't actually talk to your customers, right? You g- you gotta get [00:15:10] out there in front of them. Hugh Hornsby: That's a really great piece of advice. Let's, let's turn it back a little [00:15:15] bit and, uh, there's a lot of companies out there 'cause sh- as you [00:15:20] know, Andrew, there's a lot of people that have these small to medium sized businesses [00:15:25] and they're getting ready to, to exit, but they're doing [00:15:30] something of just running the business themself. It's really something that, [00:15:35] you know, I'd love to have you have that conversation with the, with this audience [00:15:40] because there's a lot of that going on out there right now, and your suggestions of what they need to do. [00:15:45] Andrew Pacifico: Yeah, look, I mean, there, there's a, there's a lot there, Hugh. The, the best advice [00:15:50] I, I would give any small business owner is [00:15:55] It doesn't matter if you actually are interested in selling the business, if you're not interested in [00:16:00] selling the business, you should be running the business as if you are, [00:16:05] right? And, and, and really what I mean by that is having some [00:16:10] sort of plan for succession, having some sort of plan for [00:16:15] longevity, having some sort of plan for, for that next iteration of the business. Because look, the [00:16:20] reality is, you know, you can get hit by the proverbial bus in the sky tomorrow, right? [00:16:25] And so y- you should always have a plan for the business. You should always say, "Hey, do I have a number [00:16:30] two? Do I have a plan in... You know, a- am I delegating information? Am I, a- am I [00:16:35] providing the, the next wave of individuals in my organization to kinda [00:16:40] learn a- and take on more responsibilities?" 'Cause one of the things that, you know, I've seen so [00:16:45] many of these acquisitions over the years, is that if you are a one-man show and [00:16:50] everything runs through you, that is not a sustainable business. Um, and, and that, [00:16:55] and it provides a lot of challenges to potential buyers. But also, I would argue, it just hurts your [00:17:00] business in general, right? I mean, 'cause you're... There's only so many hours in the day, Hugh, right? And so we talk about [00:17:05] the next generation, we talk about trying to attract that, the younger folks into the business, [00:17:10] part of that is giving them responsibility. Part of that is, you know, if you're a contractor, [00:17:15] right, you know, d- are you giving the, the, the apprentice, the, the younger folks like the [00:17:20] opportunity to learn more and to get their hands involved in, in more things? Or if you're a wholesaler, are you giving, [00:17:25] you know, s- maybe s- somebody else the opportunity to understand how to buy, how to manage your inventory? You know, [00:17:30] if you're a supplier, uh, are, are you giving someone that opportunity to say, "Hey, uh, make sure I [00:17:35] understand the customers and the product development side of the house"? Um, so it really is agnostic to kinda [00:17:40] what side of the aisle you're on. Uh, it's just understanding that i- in order for you, I [00:17:45] think, to run a good business, you, you need to, you need to kinda operate as if you are gonna sell it [00:17:50] at some point. Um, I think it's the best way to run it. 'Cause if not... And the other thing I've seen t- too late [00:17:55] in the game, too, uh, Hugh, I see this, I used... you know, see this all the time, is a lot of [00:18:00] owners wait and they say, "Hey, well, I'm not gonna do anything, I'm not gonna do anything." And then, and then, you know, when they're [00:18:05] getting up there, it's like, "Hey, now I'm gonna sell." A- a- and unfortunately, it's too late, right? A lot [00:18:10] of times it's like, hey, you don't have that planning, you don't have that, the, the people in your organization or [00:18:15] the processes in your organization. Um, so it's almost too late to kind of pivot. [00:18:20] Or if you do, it's gonna take you another three to four years to kinda implement those things, and so then you're kinda [00:18:25] waiting around for a while. So I, I always tell business owners that [00:18:30] preparation, do your homework, um, a- a- and be ready because that's really the best way to [00:18:35] run a business, period. Hugh Hornsby: Yeah, and I love that you say that. Um, I had a conversation [00:18:40] with some tradespeople the, the other day and, and I don't know if these numbers are 100% [00:18:45] correct, but, you know, there's a lot of small trades companies that are out there. [00:18:50] Maybe they have two, two trucks, maybe they have three trucks, maybe they have, you know, a certain [00:18:55] amount of trucks. They're not doing what you're telling them to do, which all of a sudden they become [00:19:00] age 60, it's time for them to step out of the business, then they go to sell it [00:19:05] and, you know, they don't have anything to sell because you take them out of [00:19:10] the business. My buddy who buys, you know, those $5 million companies, [00:19:15] uh, said, "Hey, you know, I'm not looking for a job." So it's, uh... [00:19:20] But, uh, they, he, what he told me was that 12, you know, out of 13 [00:19:25] companies, 12 of these small companies, they ne- they just have to shut down. [00:19:30] And so it's a, it's a real crisis within the business. Andrew Pacifico: That, that's the other [00:19:35] thing I would harp on too, Hugh, for, again, doesn't matter if you're a contractor, doesn't matter if [00:19:40] you're a wholesaler or a supplier. Um, I would say that the value o- [00:19:45] of the founder continuing to be involved in the [00:19:50] business, i- i- there is a significant amount of value there, right? And so again, it goes back [00:19:55] to I see, unfortunately, I see too many founders, in my career I've [00:20:00] seen way too many founders wait too long to prepare to [00:20:05] sell. And it's sometimes it's as tragic as, hey, there's a health incident, [00:20:10] and hey, I gotta get... I wanna sell this business tomorrow kind of thing. Um, [00:20:15] a-a-a-and, and unfortunately, there's a lot of value gets lost because a buyer looks at [00:20:20] that and says, "Well, you know, y-you haven't really prepared to sell. You haven't really built out that [00:20:25] succession plan. Um, and on top of that, you really don't wanna be part of the business going [00:20:30] forward." You, you do, you get dinged on a lot of value, right? And so if, if you're willing to [00:20:35] kind of work through a transition period of, "Hey, I, I wanna see the, the, you know, a [00:20:40] buy- a buyer for the business, and I'll work with them. I'll, I'll manage those relationships. I'll [00:20:45] transfer those relationships," that's where you get a lot of value. Um, but if you don't do that, y-you, you [00:20:50] get dinged quite a bit. Uh, but you gotta think about it, right? That's why I said earlier, it's you gotta have the [00:20:55] foresight if, if, if you're looking to sell... Say if you're a business owner at 65, [00:21:00] and you, and you're, in your head you're saying, "I wanna be out of here by 70. I wanna sell this business [00:21:05] by 70." If you wait until you're 69 or 70 to sell the business [00:21:10] Not good. Like, that's not what you wanna do. If that's the plan, you should [00:21:15] start getting ready at 65 and start entertaining those [00:21:20] offers at 67, 68, so you could turn around and say, "Hey, I've got two years, I'll still be involved in the [00:21:25] business." And then at 70, I kinda walk away and I enjoy retirement. Um, [00:21:30] that's how you're really gonna maximize your value there. Hugh Hornsby: You know, one of the things that you just shared [00:21:35] is that you're, you know, you're investing in your people, you know, and [00:21:40] the training and the coaching to go along with that. Um, there's a, [00:21:45] you know, ac- actually, uh, I call it blue collar smart versus [00:21:50] systems and corporate smart, and really, y- you need both. [00:21:55] Um, if you're talking to some of the PE companies out there, and, and [00:22:00] Andrew, as you know, there's different types of private equity [00:22:05] companies out there. Not all of them look at it the same way, uh, as, as you do. [00:22:10] Um, c- is there a conversation that you have with those people, you know, [00:22:15] on when they do go to buy a business, on how they really manage their people? Andrew Pacifico: Well, [00:22:20] look, pri- private equity, um, and just, and just investment firms, equity in general, uh, [00:22:25] loves our space. You-- And they're only gonna love our space even more, right? They're already loving the [00:22:30] space. They're loving it from a distribution side. They're loving it from a contracting side. Um, [00:22:35] why do they love it? Quite simple, right? We're pretty insulated from AI. Anytime [00:22:40] you're kinda working through with your hands and saying, "Hey, I need to replace a faucet," or, or, "I [00:22:45] need to replace an air conditioning unit." Yeah, look, maybe, maybe way in the future you got [00:22:50] robots doing that and they'll figure all that stuff, but that's not anytime soon. Um, and there, and there's a [00:22:55] reason why they love that, right? So you're still ha- you know, those are, those are things that are needed. It's not discretionary [00:23:00] spending. Um, and so they love this space, right? So they've got their [00:23:05] arms over all facets of this space. Um, I would tell you, I think you mentioned it, [00:23:10] you know, y- y- perfect. Look- Uh, that's a high level term, [00:23:15] but not every equity shop is the same. Everyone operates differently. Everyone has a different [00:23:20] focus. Uh, I think it's a little bit foolish, quite frankly, if you are in pri- if you're an [00:23:25] owner to say, "Well, I, I never wanna sell to private equity." Uh, I think you're, you're losing a l- you're, you're [00:23:30] leaving quite a f- quite frankly, a lot of money on the table. Um, and you're also hurting your business itself because there's a [00:23:35] lot of really good equity sponsors that really care about growing a business and doing [00:23:40] it the right way, right? So the, the, the sponsors I've been involved in have done it that way, right? And [00:23:45] so I have that experience. I've also known and got exposed to sponsors that don't do it that way, [00:23:50] right? And so you just gotta be careful about h- how you, you know, h- how you kinda go [00:23:55] to, go to the, um, partnership with those guys. But there's a lot of equity folks out there, [00:24:00] wanna grow a business, you know, wanna le- you know, really make it this, a [00:24:05] scalable growth business, invest in the people, invest in the resources, invest in technology, et [00:24:10] cetera. Um, and look, we're seeing that today at Everflow. You know what I mean? You're, you're part of this. I mean, we're getting [00:24:15] better benefits plans each year. We're getting better technology each year. You know, we're opening up our distribution [00:24:20] network. We're hiring a bunch of people. You know, we're rolling out training and management training. Um, [00:24:25] those are all things that, that greatly benefit the, the employees of Everflow. And, and so [00:24:30] there's just a lot of companies out there that are on the sponsor side that do that. The unfortunate [00:24:35] reality, there's a lot of folks that, a lot of sponsors don't do that, right? So some of the sponsors are, "Hey, I'm just gonna come in [00:24:40] and slash jobs and, you know, make it as efficient as possible." You just gotta right, you gotta ask the [00:24:45] right questions. You gotta do your right diligence to say, "Hey, what kind of sponsor are they?" Um, you [00:24:50] know, and make sure as a, as a small business owner, you're aligning with the right one. Hugh Hornsby: Yeah. I, I love that you're [00:24:55] saying that because the, all the conversations I've had, uh, when I bring up private [00:25:00] equity, just about everybody that's, you know, responded back says private equity [00:25:05] is not the bad guy. You know, but you have to be, you know, you have to take a look [00:25:10] at what private equity really means to you. And it's almost kind of like [00:25:15] dating, you know, that you, you've got to figure out the one that fits for what you want. And r- really when I [00:25:20] take a look at it now, I, I feel like, uh, right now private [00:25:25] equity coming into our industry is one of the most important things that can happen. You just [00:25:30] have to be able to pick the right one. A- Andrew, as, as you, as you look for [00:25:35] companies, is there something that you look for that you can share with the [00:25:40] audience? A- and we'll talk a little bit about Everflow, about, you know, how we categorize [00:25:45] them. But is, is there something that you typically look for or is there, you know, [00:25:50] that other, that the people out there could just learn from? Andrew Pacifico: Yeah, look, I mean, I think there's [00:25:55] two things. Um, first and foremost, the people side. Everything we [00:26:00] do is people, Hugh. I mean, we're a people business, we're a people industry. Last I [00:26:05] checked, we're not splitting the atom. We're not sending any, anybody to M- to Mars, right? I mean, we're, we're a [00:26:10] people-oriented business, and so the very first thing I look at is [00:26:15] who the people are, right? So does the owner want to stay involved in the business? [00:26:20] If he does, it's kind of what kind of personality does he have? What's his vision look like? What's his or her [00:26:25] vision? What's, what's his or her perspective on people, on, on growth, on development and everything? [00:26:30] Um, the executive team that's in place. I mean, all... To me, that's the most critical piece. If, if you [00:26:35] show me a... I'll tell you the worst case scenario, Hugh Worst case scenario is [00:26:40] you got a business and the founder or the, the CEO, whoever, [00:26:45] you know, uh, walks away or tragically suddenly passes away or whatever, and the business is in a [00:26:50] trust, and no one's running the show, and it's h- you know, "Hey, we're gonna put this up to [00:26:55] auction. Who wants this business?" That's something that, that I would find very difficult to [00:27:00] kinda get, get my arms around, right? Because you're really not buying any... There's really no people involved in that business, right? It's [00:27:05] just all that's kinda gone away. Um, so it, it all starts with the people. The second thing we [00:27:10] look at is really the value that you bring to your customers. Like, what is the moat around your [00:27:15] business? Every business has a moat. Every business has a soul, if you will, of the company. [00:27:20] What is it? Um, we, we don't wanna get into commodity business. That's not something we [00:27:25] like. Um, you know, we're not commodity traders. We wanna get into, hey, what is the... It could be a [00:27:30] product. It could be a service. It could be a, a logistical [00:27:35] capability. Um, whatever it is, right? It's gotta be something kinda unique to that [00:27:40] business, and so that's the other a- area that we really look at as well, is, you know, i- if it's just a commodity me too [00:27:45] product that, hey, everyone's selling this and there's really no differentiation, [00:27:50] uh, that doesn't really appeal to us either 'cause then you're just selling off of price, and that's, that's not something... That's not good for anybody. Hugh Hornsby: [00:27:55] Yeah, you live on price, you die on price, and if there's not value that's behind that, [00:28:00] then, you know, what do you, what do you really have? You know, at, at Everflow, [00:28:05] it's, it's really a different animal than anybody [00:28:10] out there. And you hear Everflow sometimes called as a master distributor, which [00:28:15] kinda turns me sideways because they're not a master distributor. I always say they're a [00:28:20] distributor's distributor. What, you know, w- where does Everflow fit? Where do you [00:28:25] think Everflow fits in that, that chain of, of [00:28:30] manufacturer versus master distributor to, to that middle ground? Is, is that [00:28:35] something that you guys have defined? Andrew Pacifico: So look, great question, Hugh, 'cause I think that, that also, uh, [00:28:40] gets, gets me riled up as well. We are a supplier of plumbing, electrical, [00:28:45] HVAC, industrial, uh, and a couple other products as well. Um, that's what we are. [00:28:50] We're a supplier, right? And so, uh, we don't have a lot of manufacturing capabilities, [00:28:55] but we do have product development. We do have engineering. We do have patents. We have [00:29:00] that, that ability to kinda develop our own product. But we are, we're outsourcing the actual [00:29:05] manufacturing component of that. And, and there's a r- a lot of reasons why, right? So less capital intensive. [00:29:10] We don't have to deal with foundries, things like that. Um, folks that are really good at that can do that. But, but we have our [00:29:15] own brands. Uh, we have our own products, et cetera. So to your point, not a master [00:29:20] distributor, right? So we know master distributors in the market. Master distributors are folks that take other people's [00:29:25] product, and you, you end up carrying it and stocking it. Um, you know, we only sell our own branded product. [00:29:30] Um, the value that we bring though, I, I think, Hugh, is, is, is pretty [00:29:35] clear, right? So w- we have a, a, a number, uh, of... You [00:29:40] know, you gotta look at holistically what we, what we really bring to the table as Everflow. And so [00:29:45] holistically, we've got a wide breadth of product, we've got [00:29:50] a, a inventory, right? So it's... You talk about private equity, our inventory actually [00:29:55] has gone up, not gone down, right? In that, in terms of that investment and from capital investing our [00:30:00] inventory. We got our, our inventory, we got a wide breadth of product, and we have, you know, strong [00:30:05] products and, and good product quality control. Those three things [00:30:10] combined, kinda together, are really drive the value for Everflow. I mean, look, I come from the [00:30:15] distribution world. I know what kinda pains our customers. Our customers don't wanna [00:30:20] deal with 15 different suppliers for 15 different products. If they can consolidate that [00:30:25] down to a, a little bit, that's a huge win, right? That's something that we provide as Everflow. [00:30:30] Our distributors don't wanna deal with faulty products and having to sell products, and then their [00:30:35] contractors come back and say, "Hey, this isn't work. This is, this is, this is defective," whatever. We [00:30:40] stand behind our product, right? We have warranties, we have, we have quality control in place. Um, and then [00:30:45] most importantly, quite frankly, Hugh, is w- our, our warehouse is an extension of our distributor's [00:30:50] warehouse. That's the key thing for us is at the end of the day, man, if we could get [00:30:55] product to you same day, next day, you're a distributor, what, why, why are you gonna be [00:31:00] sh- stocking 60, 90 days of our product when you only need to stock 15 or 30 days of our [00:31:05] product, right? Because if you run out, you can get it same day or next day. All it's a simple purchase order, and [00:31:10] then it's there fulfilled for you. So really that's kind of the, the blend of everything. Now, we don't [00:31:15] sell commodity products. We don't really wanna get into the... You know, we're not gonna get into PVC [00:31:20] pipe and things like that. Um, you know, ultimately we wanna sell products that, that really kind [00:31:25] of, uh, we call more tail products to our customers that are kind of the, the bottom third, [00:31:30] bottom 40% of their, of their spend, and that's really what we're focused on. Hugh Hornsby: I used to call it the [00:31:35] 80/20 rule. 20% of what you do gives you 80% of your results. Now I, I think with Everflow [00:31:40] it's like, uh, you're, you take care of that other 80% that's the, the [00:31:45] most difficult to handle, and a lot of people don't, you know, don't realize that. But, [00:31:50] um, same day, next day, that's, that's the way to go. Let's jump into [00:31:55] AI a little bit. Where do you think the business is going with AI, and what are your thoughts [00:32:00] of, of AI? Andrew Pacifico: Yeah, I mean, look, uh, AI, AI is here, [00:32:05] Hugh. I mean, it's not going anywhere. It's only gonna get better. Uh, it's only gonna get more sophisticated. [00:32:10] You know, I, I think ultimately for our industry, the, the biggest [00:32:15] benefit that AI's gonna have is really in the process side [00:32:20] and the backli- the back end side. Um- Things like purchase orders [00:32:25] and sales orders and pricing and managing inventory, um, [00:32:30] uh, all of that back-end stuff, right? So we're already utilizing [00:32:35] quite a bit of it in the finance side, for example. You know, reconciling cash, things like [00:32:40] that, reconciling AR. Um, all of that is, is a pretty tedious job, and so [00:32:45] you have to use some of those systems in AI. That's really, in my mind, where you're gonna [00:32:50] drive a, a lot of the value over the next couple years from AI, uh, really those back-end [00:32:55] kind of business processes. At the end of the day, we're, we're gonna continue to have salespeople. They're gonna [00:33:00] continue to pound the pavement, get in front of our customers. We're gonna continue to, to actually have physical [00:33:05] products that get shipped in and, and, you know, get shipped to the distributors, and the distributors ship it to the [00:33:10] contractors. That stuff's not really gonna go away, um, any, anytime soon, right? [00:33:15] It's, it's the more the back-end processes in our industry that I think really, um, can move the [00:33:20] needle for us. Hugh Hornsby: Yeah, I, I agree. I don't think it's take- it's not gonna take a sales job [00:33:25] away, but what it will do is enhance. You know, it'll, it'll make some of those [00:33:30] processes a little bit easier, whether it's pricing or quoting or whatever it may be. AI [00:33:35] means different things to different people. Andrew Pacifico: I, I have a little bit of a different spin on it, Hugh, um, [00:33:40] for salespeople. I, I, I believe that, you know, [00:33:45] my, my hypothesis and my theory on this is that whether it's our industry or other industries, it doesn't really matter, [00:33:50] um, you're gonna have a lot of-- AI's gonna improve the quoting, it's gonna improve [00:33:55] the, the pricing, the, the, like I said, the sales orders, things like that. But I genuinely believe people are gonna [00:34:00] actually want that personal relationship more. And that personal relationship's gonna become even [00:34:05] more impactful because knowing it's not, you know, some [00:34:10] au- some AI chat box that's responding to you, knowing it's not, you know, it's just some [00:34:15] AI on the other side of that, it's, it's gonna become even more, you know, I, I think really, [00:34:20] really important. Um, you know, I, I, for example, I, I just bought a car, right, [00:34:25] Hugh, and I think this is a great example. So the, the car dealership I went to, um, [00:34:30] they have AI all over the place, right? So you don't even know who you're talking to. So you, you inquire with, "Hey, I'm [00:34:35] interested in this car." You've got people literally calling you and emailing [00:34:40] you that are not real human beings, believe it or not, right? They don't [00:34:45] tell you that either. They just, they just, "Hey, this is, you know, my name is Natalie." Or you're like, "Okay." You think [00:34:50] it's real. They're not real people. Um- But then you go into the dealership [00:34:55] and you actually shake someone's hand and you actually have a conversation with somebody and, [00:35:00] and they're giving you the advice or help, whatever that you need, um, you kind of throw the other [00:35:05] stuff away, right? You're like, "Hey, that's that personal touch, that relationship, that's, that [00:35:10] knowing that there's someone that's actually real that's gonna, you know, gonna go to bat for me and, [00:35:15] and, and really provide the best value." That's just gonna be in our industry as well. [00:35:20] Like, yes, if you're a contractor, you 100% should be using AI to help with your [00:35:25] sales calls, to help with your, you know, project maintenance. If somebody ha- if you're an HVAC contractor [00:35:30] and, and someone, you know, you wanna grow your book of business and use AI [00:35:35] 100%. Someone has a, a faulty air conditioning, you sh- you know, they email your, your company or they call your [00:35:40] company, definitely manage that because it will help immensely. But then follow up with a [00:35:45] real human being, right? There's someone that's really, you know, on the other end that's gonna be able to [00:35:50] help that, that homeowner with their HVAC problem. Um, that's where I think is a huge benefit there. Hugh Hornsby: [00:35:55] Yeah, and I do agree with you on that. I think the relationships are always gonna be there, [00:36:00] and that's what's gonna really make the difference. So Andrew, when I was a kid, [00:36:05] I was-- I, I fell and hit my head. I was diagnosed with epilepsy. I used to come [00:36:10] home from time to time and no matter what happened, I'd, I'd say something to my [00:36:15] mom. And when they tried to send me to special needs in the ninth grade, you know, she'd give me, uh, [00:36:20] about 15 minutes to go and have a pity party, and then she'd give me a pad and a pencil, [00:36:25] and she'd send me upstairs and say, you know, "Write down, um, assess the [00:36:30] situation and then write down, you know, what you're gonna do about it, and then you come back [00:36:35] downstairs." And, and then you'd go take action. So she was a pretty incredible mother. [00:36:40] But my question to you is, if you had a yellow pad moment, what would that [00:36:45] yellow pad moment be? Andrew Pacifico: Yeah, look, I think life throws a lot of, [00:36:50] of problems at you, right? So throughout my career, you, throughout my personal life, [00:36:55] you know, there, there are issues that have come up, um, a- and [00:37:00] just understanding that nothing is final and [00:37:05] understanding like, hey, h- how do I actually as- to your point, assess the situation, [00:37:10] assess the decision. Maybe you don't, you know, maybe you didn't get the promotion you wanted. Maybe you didn't get the job that you wanted. Maybe [00:37:15] you didn't get the sales order you wanted. It's not the end of the world because it, you know, I [00:37:20] go back to The first thing I said, process, or one of the [00:37:25] first things, process over results. I preach that to my kids, I, I preach that [00:37:30] to the salespeople, I preach that to our company, and there's a whole other world on that, you know, [00:37:35] growth mindset versus fixed mindset that we could talk about at some point. But [00:37:40] having that growth mindset of, hey, I'm gonna put in the work, I'm gonna evaluate [00:37:45] the situation, and I'm gonna keep working at it. And you know what? Sometimes the [00:37:50] results don't come. Sometimes the results are not there. Sometimes, you [00:37:55] know, you get a bad break. I don't know if you're a golfer, Hugh, but I always e- like, the best analogy for this is [00:38:00] golf, right? How many times do you have a perfect swing and you [00:38:05] hit a tree And you go, "Man, that's..." How's that affect you, right? It's [00:38:10] okay, right? That's gonna happen sometimes. Or vice versa. How many times do you just shank a ball [00:38:15] and then it hits the cart path, and then it doubles back on the cart path, and it goes 300 yards, and you go, [00:38:20] "Wow, that was great." Wasn't really a good shot though, right? I mean, it's just you got lucky. [00:38:25] Um, understanding that i- in your life, I think is really, really important. It's [00:38:30] always trying to, to learn new things, always trying to kind of assess that [00:38:35] situation, to your point about the yellow pad, of hey, if you don't get that, if you don't get the [00:38:40] break, right, you don't get the promotion, you don't get the job, you don't... That's okay, right? Go back [00:38:45] to the drawing board. D- you know, don't be the victim. You know, I, I think there's way too [00:38:50] much victimhood going on i- in, in society these days where everyone [00:38:55] wants to blame somebody else for why they're not succeeding. Hey, just take a deep breath and say, "Hey, [00:39:00] h- how, how do I... Did I put in the work? Did I, did I deserve to be successful in this?" And if the answer's [00:39:05] no, then you gotta go back and you do some soul-searching and make sure you're putting in the work. And if the answer is, "Hey, [00:39:10] I, I did put in the work, and the sh- you know, the sh- the shots weren't falling or the golf, you know, my [00:39:15] swing wasn't connecting," that's okay, right? I mean, it's not final, and go back to it tomorrow. Hugh Hornsby: I [00:39:20] love that you said that. You know, my dad used to say, you know, "Huey, you know, growth happens when you're [00:39:25] going through pain." And, uh, and so th- that message is, [00:39:30] is a great one because, you know, you're, you are gonna fail. [00:39:35] And being able to get back up and, and, and move forward, it's, it's just a [00:39:40] great piece of advice. Last, the last question I usually [00:39:45] ask is, you know, when I, when we shut this thing down and, and people say, [00:39:50] "Hey, you know, um, you know, Hugh, um, he really [00:39:55] should've asked Andrew a question," um, and I really wish, wish he [00:40:00] would have. Is there a question that I have not asked that you think people need to know?[00:40:05] Andrew Pacifico: No, look, I love the conversation, Hugh. I think it's been, uh, it's been fantastic. I, I think we need [00:40:10] to, you know, y- y- we're a blue collar podcast here, right? I, I, I would [00:40:15] love to, to, to stress the fact of how do we get more people [00:40:20] in this business, right? In this industry. And, and one of the things that, you know, I, [00:40:25] I, I believe firmly, and I think it kinda gets overlooked too, is it, [00:40:30] it's, I, I came in this industry kind of from an unconventional route, right? And, [00:40:35] and there are so many great businesses, and there are so many [00:40:40] great kinda niches in our industry Um, you don't necessarily [00:40:45] need to do the actual trade work, right? So you could be in IT, for example. [00:40:50] You could be in finance. You could be in operations. You could be in warehousing. There's a whole bunch [00:40:55] of different kind of areas that you can be involved in this business and in this [00:41:00] industry. You know, marketing, for example. This business needs social media [00:41:05] marketers, right? Um, a-and I think that's the, the question that I, you know, [00:41:10] I, I wanna emphasize is, hey, how do we get more people in this industry? And, and I think [00:41:15] sometimes we default way too much to, hey, we're just gonna go into training [00:41:20] people in high school, and hey, how do you become a plumber? How do you become electrician? How do you become an HVAC [00:41:25] contractor? That is great, and I think that that is something that we-- I hear quite a bit about. [00:41:30] It's awesome we're doing that. It's awesome we're putting the resources in that. The other area, though, is, [00:41:35] is, is, look, there's a lot of other parts of the industry, the parts of the business that you [00:41:40] can get involved in. That's kinda how I came to be. You-- I was never a contractor. I didn't come into this business through the [00:41:45] contracting side. I came in it through the finance side, and I fell in love with it. And I just think this [00:41:50] industry is made of, you know, good-natured people. They're, they're blue-collar folks. They, they, they're, they're [00:41:55] fun to hang out with. They, they're high integrity levels, um, kind of across the board. [00:42:00] That's what attracted me to this industry, um, and that's what kept me here, and that's what's gonna keep me here my entire [00:42:05] career. And, um A- as we're advocates for the business, that's [00:42:10] something that I, I want all of us to, to, to do more of, right? So, you know, if [00:42:15] your, if your niece or nephew likes social media, you know, or, or [00:42:20] marketing, it's like, "Hey, ha- have you, have you spoken with these, you know, manufacturers or these [00:42:25] distributors or these contractors? They need, they need marketing people on board." Like, are you aware of this [00:42:30] industry? 'Cause quite frankly, too many people in this economy don't even know we exist, right? They [00:42:35] don't even understand how large and how im- you know, important our industry is. Um, so just getting more of that [00:42:40] exposure is gonna help us. You mentioned people aging out. That's gonna help us kind of fill the [00:42:45] gap in for that next generation of people. Hugh Hornsby: I could not say it any better than that, [00:42:50] because th- this industry is something that I have advocated for for a long time, and Everflow [00:42:55] really helped me do that. But I'm very much appreciate [00:43:00] what you said there, because this is a p- this is a hidden industry that a lot [00:43:05] of people don't know about. And so I appreciate you being here and having that conversation. [00:43:10] Uh, you know, we'll have some deeper conversations on how we can bring more people in the industry. [00:43:15] Um, just wanna say this to all of you that, uh, you know, [00:43:20] Andrew, Andrew came here off of Wall Street, and that's not where, you know, [00:43:25] a lot of people are coming from, but the opportunity that he's found here and [00:43:30] what he brings to this business and to the distribution side is, is just [00:43:35] absolutely amazing. So just wanna say thank you, Andrew Pacifico. I appreciate the [00:43:40] friendship, and then I a- appreciate that conversation about just [00:43:45] making this industry a better place. Andrew Pacifico: Uh, Hugh, it's a pleasure being on with you today. Uh, love what you're [00:43:50] doing. Love the podcast. I think it's great. Uh, keep up the great work. Hugh Hornsby: Thank you, and [00:43:55] everybody have a great day.