ScanSource, Inc.

Hello, welcome to the ScanSource quarterly earnings conference call. All lines have been placed in a listen-only mode until the question and answer session. Today's call is being recorded. If anyone has any objections, you may disconnect at this time. I would now like to turn the call over to Mary Gentry, Senior Vice President, Treasurer and Investment Relations. Ma'am, you may begin.

Good afternoon, and thank you for joining us. Joining me on the call today are Mike Bauer, our Chairman and CEO, John Eld, our President, and Steve Jones, our Chief Financial Officer. We will review our operating results for the quarter and the fiscal year and then take your questions. We posted an earnings infographic that accompanies our comments and webcasts in the Investor Relations section of our website. Let me remind you that certain statements in our press release, in the earnings infographic, and on this call are forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, those factors identified in the earnings release we put out today and in scan sources Form 10-K for the year ended June 30, 2022, as filed with the SEC. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. ScanSource disclaims any duty to update any forward-looking statements to reflect actual results or changes in expectations except as required by law. During our call, we will discuss those GAAP and non-GAAP results and have provided reconciliations between these amounts in the earnings infographic and our press release. These reconciliations can be found on our website and have been filed with our Form 8K filed today. I'll now turn the call over to Mike.

Thanks, Mary, and thanks everyone for joining us today. Fiscal year 2022 was a year of both strong demand and outstanding execution by our people. We exceeded our full year 2022 outlook, delivering 12% net sales growth and record adjusted EBITDA of $167 million. For fiscal year 2022, our non-GAAP EPS increased 45% to $3.97 per share and our adjusted ROIC increased to 17%. Our exceptional FY22 results demonstrate the success of the new scan source and the strong growth of our recurring revenue. The new scan source strategy is focused on hybrid made easy to enable our channel partners to meet end customer demand for devices and digital solutions. In FY22, Our recurring revenue grew faster than our overall business, up 16% year over year. This excellent growth in our recurring revenue provides the strong profitability our team needs to build the hybrid distribution business of the future. As a reminder, last year we decided to provide an annual outlook for the first time. We previously provided quarterly financial guidance, and we were always explaining to our investors that our hardware distribution business works with limited visibility without bookings or backlog. However, with the change in our business to a hybrid model where we have more recurring revenue each year and are growing services and software along with our hardware sales, we decided to provide an annual outlook for the first time. Today, we are introducing an FY23 annual outlook, as well as midterm goals covering the next three to four years. For FY23, we expect year-over-year net sales growth to be at least 5.5%, and we expect adjusted EBITDA to be at least $174 million. Our midterm goals are net sales growth of 5% to 7.5%, and an adjusted EBITDA margin of at least 4.5%. These goals reflect our confidence in our business model and the opportunity ahead for the new scan source. I will now turn the call over to John to discuss our business performance.