ScanSource, Inc.

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 Investor Relations. Ma'am, you may begin.

Good morning, 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 for 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, 2023, 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 were discussed both GAAP and non-GAAP results and have provided reconciliations between these amounts in the earnings infographic and in our press release. These reconciliations can be found on our website and have been filed with our Form 8-K today. I'll now turn the call over to Mike.

Thanks, Mary. and thanks everyone for joining us today. Our business is built on relationships, and we recently confirmed the value of the trust we have with our customers, suppliers, and employees we developed over 30 years. As you know, on May the 14th, we discovered that ScanSource was subject to a cyber attack that had a broad impact on the company. Thanks to the amazing work of our employees, working together with external cybersecurity experts, ScanSource's core systems were restored and operations resumed on May 26th. I am very proud of the exceptional execution, teamwork, and customer service our employees displayed throughout this cyber attack and system restoration. For fiscal year 2023, we delivered 7% annual net sales growth, exceeding our full year 2023 outlook. We had record adjusted EBITDA of $180 million, and a 4.75% adjusted EBITDA margin. Looking back on fiscal year 2023, we are very pleased with the progress we've made with our midterm three- to four-year goals that we introduced a year ago. Our midterm goals are net sales growth per year of 5% to 7.5%, adjusted EBITDA margin of 4.5% to 5%, mid-teens adjusted ROIC, and building recurring revenue as a percentage of gross profit to 30%. Despite recent weakness in some of our technology markets, our business remains healthy, with revenues and profits growing. The ScanSource diversified portfolio of products and services is our strategy for long-term growth in the specialized technology markets we have chosen. These highly specialized markets reward the company not only with revenue growth, but also with higher profit margins because of our focus. ScanSource wins market share with the deep knowledge from our sales teams, specific value added tools and services, and a working capital strategy that flexes based on specific supplier and customer requirements. As we enter fiscal year 2024, strong free cash flow and focus on Intellisys are keys for our success. Now that the supply chain challenges are behind us, we expect our normal business model that balances days on hand of inventory and day sales outstanding with gross margins to return. With the support of our key suppliers and customers, we are executing a multi-quarter working capital improvement plan with a focus on reducing inventory levels. I will now turn the call over to John to discuss our business performance.