Avnet, Inc.

Please stand by. Our presentation will now begin. Welcome to the Avnet fourth quarter fiscal year 2021 earnings call. I would now like to turn the floor over to Joe Burke, Vice President of Treasury and Investor Relations for Avnet. Joe, you may begin.

Thank you, Operator. Earlier this afternoon, Avnet released financial results for the fourth fiscal quarter of 2021. The release is available on the Investor Relations section of the company's website. A copy of the slide presentation that will accompany today's remarks can be found via the link in the earnings release as well as on the IR section of AFNET's website. Lastly, some of the information contained in the news release and on this conference call contain forward-looking statements that involve risk, uncertainties, and assumptions that are difficult to predict. Such forward-looking statements are not the guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in ABNET's most recent form 10Q and 10K and subsequent filings with the SEC. These forward-looking statements speak only as of the date of this presentation and the company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this presentation. Today's call will be led by Phil Gallagher, Avnet's CEO, and Tom Liguori, Avnet's CFO. With that, let me turn the call over to Phil Gallagher. Phil?

Thank you, Joe, and thank you, everyone, for joining our fourth quarter and fiscal year 2021 earnings conference call. I hope everyone is safe, healthy, and has taken some time to enjoy the summer. I'd like to start today by reflecting on the past year. Just over a year ago to date, I was named interim CEO of Avnet. and during my first earnings call, I shared with you my immediate priority will be to lay the groundwork to focus on our strengths to truly reinvigorate our business. Despite ongoing supply disruptions and the global pandemic restrictions, our team did just that and delivered some incredible results. I'm extremely proud to be leading this team during this challenging period. We've made important improvements to our go-to-market strategy, focused spending on the right things and as a result, We're able to post record sales for both operating groups in the fourth quarter and make notable margin and revenue progress over the year. I'm truly excited for the continued journey that lies ahead. Now, let me highlight some of this past year's accomplishments before diving into the fourth quarter performance. In the past year, we continued to strengthen our foundation based on decades-long relationships with our industry-leading semiconductor and IP&E supplier partners. We supported our customers and suppliers by utilizing our capabilities and expertise to help decrease risk in their supply chains. We made significant investments in our sales and engineering personnel, enabling differentiated design solutions for our customers, resulting in demand creation numbers at record levels for fiscal year 2021. We also continue to invest in the digitization of our business across both Avnet and Farnell, Allowing for support across the entire customer product life cycle. That in turn attributed to margin growth, moving us towards our 3% and 10% operating margin targets for electronic components and front-end businesses respectively. Tom will get into that in more detail later. We grew market share operating income dollars and improved our return on working capital. And finally, We began the celebration of our 100th year anniversary reflecting on the critical role we've played in the electronic supply chain for multiple decades. Now, all this could not have been done without our dedication of our team across the globe. Throughout this fiscal year, our whole team continued to prove that Adnet's role at the center of the global technology supply chain is more vital than ever for our customers and suppliers, and that expertise and relationships truly matter. While I am pleased with what we've accomplished to date and excited for what's ahead, we're still operating in a dynamic market. We're continuing to experience a supply-driven marketplace as extended lead times persisted throughout the quarter, driving very high book-to-bill ratios in every region. As such, tightly managing our backlog and working closely with customers to gain extended visibility continues to be a priority as we manage our own supply chains. Further, component costs for certain technologies have increased on average of 10% to 15% this past year, with some even higher. As always, Adelaide has tried to mitigate any customer impact where possible, and we've worked closely with our customers where we've had to pass some of these costs along. Now, turning to the fourth quarter results on slide five. We achieved fourth quarter sales of $5.2 billion, up sequentially and year over year on a constant currency basis. Excluding TI, sales grew 31.7% year-over-year. Electronic Components and Farnell both achieved record sales in a quarter and delivered strong operating margins. We expect continued progress at the operating margin line given the strength of the market, solid execution across all regions, as well as the durable improvements we've made to our business. Looking at the Electronic Components business on slide six. The depth of our relationships with our suppliers and customers is driving excellent results across all regions and positioning us for continued progress in fiscal year 2022. Strong performance in EMEA and Asia and continued operating improvements in the Americas all contributed to better than expected results in the quarter. In terms of vertical segments, the industrial, automotive, communications, computing segments continue to be major drivers. Global demand creation also continues to be a key and many more. With demand creation accounting for roughly 30% of our electronic components revenue, we will continue to invest in digital and design tools, field application engineers and relationships that drive stronger engagements as we enter fiscal year 2022. We will also continue to enhance our current business offerings while driving demand for our suppliers with broad-based solutions, software capabilities and value-added services across vertical markets, including IoT solutions. Allowing our customers to differentiate their solutions and address their current needs. Now, turning to Fresnel on slide seven. Fresnel continues to be an important contributor and saw record sales this past quarter. Revenues were up year over year and sequentially in the quarter at $441 million, and operating margins increased sequentially to 8.3%, progressing towards our target of 10%. Our investment in Farnell's digital capabilities continue to pay off with nearly 51% of revenues attributed to e-commerce sales. We also added 20,530 SKUs this past quarter, progressing on our plans to add an additional 250,000 SKUs throughout the fiscal year 2022. The combination of Farnell's high service model and electronic components business capabilities enable us to uniquely service customers from new product introduction to mass production. As we continue to enhance our digital capabilities in fiscal year 2022, we expect Fresnel's value proposition to continue to increase. Now, with that, I'll turn it over to Tom to dive a bit deeper into our fourth quarter and fiscal year results.