Snap One Holdings Corp.

Good afternoon. Welcome to SNAP-1 Holdings Corp's fiscal fourth quarter and full year 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. I would now like to turn the call over to SNAP-1 Senior Vice President of Finance, Eric Steele. Sir, please proceed.

Thank you, Operator. Good afternoon and welcome to SNAP-1's fiscal fourth quarter and full year 2021 earnings conference call. As a reminder, this call is being recorded. Joining us today from SNAP-1 are John Hammond, our CEO, and Mike Carlett, our CFO. Before we begin, we would like to remind everyone that our prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions, including but not limited to statements of expectations, future events, or future financial performance. These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Actual events or results could differ materially. These statements are based on current expectations of the company's management and involve inherent risks and uncertainties. including those identified in the risk factor section of our registration statement on Form S-1 filed with the SEC. All non-GAAP financial measures referenced in today's call are reconciled in our earnings press release to the most directly comparable GAAP measure. This call also contains time-sensitive information that is accurate only as of the date of this broadcast, March 22, 2022. Finally, I would like to remind everyone that this conference call is being webcast, and a recording will be made available for replay on our investor relations website at investors.snap1.com. In addition to the webcast, we have also posted a supplemental earnings presentation accompanying these results, which can also be found on our investor relations website. With that, I will now turn the call over to our CEO, John Heyman. John?

Thanks, Eric, and welcome, everyone, and thanks for joining us this afternoon. I'm going to start off today with a review of our recent updates and highlights, and then I'll turn the call over to Mike Cartlett, our CFO, to discuss our financial results for the quarter and the year, as well as provide a 2022 outlook. And after that, we'll share some closing remarks before opening the call up for questions. As a brief reminder for everyone listening, here at SnapOne, we provide a smart living platform that empowers professional integrators to deliver joy, connectivity, and security to end consumers on a global scale. As a leading distributor to these integrators, we work with a growing network of over 16,000 professionals that are Do It For Me integrators who distribute our proprietary and third-party products using our e-commerce portal and our brick and mortar facilities. We further support our integration partners with our proprietary software platforms and digital workflow solutions to allow them to successfully serve their residential and commercial customers across the project lifecycle. The smart living opportunity is large and it's untapped. We believe that we're strategically positioned to power the smart living revolution through our entrenched, and growing network of integrators. As demand for smart living solutions continues to rise, we anticipate an increasing number of end consumers will rely on these professionals to get the job done. In turn, these local professional integrators need a scaled platform like SNAP One to successfully deliver on the promise of smart living. Here at SNAP One, we're positioning our integrators and our company to capitalize on the tremendous growth opportunity in front of us. We aim to help our integrators enhance their capacity to meet the durable demand for smart living solutions and to grow profitable businesses. We do this through investing in two platforms. One, our business platform to make life easier for small businesses we serve. and two, through a product platform that supports easier installations, higher profits, reliability, and end consumer satisfaction. From a business platform perspective, we are focusing on convenience, and we're focusing on workflow solutions, which are critical for these partners who lack their own infrastructure. From a convenience perspective, we're methodically rolling out new local branch openings to expand our nationwide physical footprint while simultaneously investing to enhance the digital experience on our e-commerce portal. We want to provide our integrators with the flexibility and convenience to engage with us in the way that best meets their needs. We're also investing in workflow solutions. We're exploring new ways to support our integrators with business infrastructure and workflow tools to increase efficiency. From a robust education and training curriculum to award-winning support to new value-added service offerings like Parasol, we have our integrators' backs. Regarding our product and software platforms, we continue to make big investments. From a product standpoint, we're continuing to develop innovative new products, with installation efficiency and integrator profitability top of mind. The industry will see an amazing amount of new innovation coming from SNAP-1 over the next few years. We're also expanding our curated portfolio of third-party products to provide integrators with the convenience of a one-stop shop for their purchasing needs, saving them valuable time and money. We're also making significant investments in our leading software platforms, Oversea and Control Force OS3, to deliver new capabilities and integrated workflow efficiencies, making it easier than ever to configure, install, and support integrated systems. And we also continue to explore new ways to deliver and monetize value-added software services to integrators and end users, excuse me. This integrated product portfolio will be key in transforming an industry that has relied on integrating disparate products together to one that implements integrated solutions that create seamless experiences. We believe that no one is investing in the platforms that will drive the future success of this industry like SnapOne. Let me take a few minutes and reflect on the past year. 2021 was a banner year for SNAP1. We became a billion-dollar company, generating just over a billion dollars in net sales, an increase of 24% from the prior year on an as-reported basis. Our attractive business model delivered record profitability with adjusted EBITDA of $111 million, an increase of 17% from the prior year on an as-reported basis. Finally, we successfully executed across a range of strategic initiatives while navigating a challenging supply chain backdrop to deliver for our integrator customers who depend on us each day. I'll highlight a couple of those achievements now. First, we rebranded the company as SnapOne to reflect our aspiration to be the one partner that professional integrators need for every job. One company, one business platform, one product platform. We continue to execute on this one company vision with the recent launch of our all-new Partners Reward Program, which unifies the SnapOne partner experience under a single loyalty program as another proof point on our journey. The name SnapOne encompasses all we are today and our intent to continue leading the industry in the future. Second, we achieved a successful public listing in July. More than a year's worth of hard work and preparation went into making this reality possible, and we're grateful for the efforts of our employees, investors, partners, and other key stakeholders in supporting this key milestone. Entering the public markets has provided our company an expanded opportunity to invest in the success of our integrator partners and to grow our business. Since our IPO, we have worked diligently to execute against our growth strategy, establish a track record of delivering strong financial performance, build our presence within the investor community, and fortify our team with the human capital to further our mission. Our IPO has also enabled us to strategically deploy our balance sheet to ensure the best possible inventory availability throughout the year, reinforcing the one partner that our professional integrators need to be successful. In terms of our growth strategy in the future, operationally, our success in 2021 reflects strong execution against our proven growth playbook that we've laid out to drive sustainable long-term growth. Our growth strategy is rooted, as a reminder, in five key pillars. One, increase our wallet share with existing integrators. Two, expand our global integrator network. Three, innovate with new products, software, and technology-enabled workflow solutions. Four, develop new software services and revenue models. And finally, fifth, executing against strategic M&A. I'll speak about each of these briefly. One, in terms of increasing our wallet share with existing integrators. which includes continuing to execute our omnichannel strategy. In 2021, we continue to build out our physical footprint with the opening of eight new local branches in key domestic markets, bringing our year-end footprint to 31 local branches nationwide. Our local branch expansion strengthens existing integrator relationships, it adds incremental purchase occasions, and it expands our integrator network. we intend to continue building our geographic reach in 2022. Two, we're expanding our global integrator network with professionals focused on residential, security, and commercial applications around the globe. In 2021, we experienced year-over-year growth in the number of transacting integrators across the home tech, security, and commercial markets. Additionally, we sharpened our focus on our international growth strategy including our acquisition of Staub Electronics this past January, and have resourced continued investments to develop targeted international markets in our 2022 plan. Adding new integrators into the SNAP-1 ecosystem will remain an important growth driver for our business in 2022 and beyond. Three. innovation with new products, software, and tech-enabled workflow solutions. In 2021, we made significant upgrades to both our first and third-party product and service portfolios, and the industry took notice. Our leading products and services were recognized a record-setting 36 times as the number one or two brand across 62 identified product subcategories in the 2021 CE Pro 100 Brand Analysis Awards. Over the past year, we've also thoughtfully expanded our third-party product suite as well. In 2021, we added several new third-party vendors to our e-commerce portal, including Ring, Pro Control, Sound United, including the Denon and Marantz brands, and Roku. In the fourth quarter, we extended our partnership with Josh AI for the strategic development of a first-of-its-kind Control 4 certified driver for voice control, a more private voice control alternative to big tech. Overall, our product and service capabilities are now more robust than ever, further positioning us as the partner and distributor of choice for our integrators. We remain committed to driving innovation through our continued investments in new product development and are looking forward to the many new product releases we have coming to market. Four, we intend to develop new software services and revenue models. In 2021, we announced a strategic investment in Parasol, an industry-leading provider of 24x7 remote support solutions that improve integrator productivity and service levels. This service is enabled by our proprietary Oversea Remote Management software platform. This builds on our existing Foresight offering, which enables end consumers to remotely access and personalize their Control 4 system. Today, we have over 100,000 subscribers in our network, paying us on a recurring basis and contributing about 1% to our consolidated company net sales. Given Control 4 is in approximately 435,000 active homes today and growing, we believe we have a meaningful opportunity to increase subscription penetration within our install base. As smart living solutions become more software-centric, we are positioning SNAP1 and our integrators to lead the way with innovative offerings and revenue models. We continue to invest heavily in our two software platforms to deliver value to both integrators and consumers. Stay tuned for further updates and on exciting announcements in the quarters ahead. And finally, fifth, we'll continue to execute strategic M&A. In 2021, we continue to flex our strategic M&A muscles. From a product perspective, we acquired Access Networks, an enterprise-grade networking solutions provider. that offers networking products, design, configuration, monitoring, and support services. The network is the digital backbone of Smart Living, and this acquisition enhanced SnapOne's networking solutions for residential and commercial applications. Additionally, we've continued to develop our local branch presence through a combination of organic openings and targeted M&A. More recently, we announced the acquisition of Canadian distributor Staub Electronics. In January, this acquisition brings together two long-time business partners to provide more product choice, faster product fulfillment, and superior support for professional integrators across Canada. We're excited to expand our local branch presence internationally with STOBS to locations, bringing our total branch count to 33 locations as of January. We expect to continue to pursue disciplined, accretive acquisitions that enhance our products, software, and workflow solutions, and expand into adjacent markets and geographies that allow us to best serve our integrator base. As we look ahead to 22 and beyond, continued execution against these five growth pillars will amount foundational to our success. I'm going to touch on the outlook for 2022 before turning over to Mike, who will provide more detailed guidance Demand for our products and services remains very high, and we entered 2022 with the wind at our backs. Despite the supply chain uncertainty, we have strong conviction in both the short and long-term growth outlook for our business. Due to continued healthy trends in smart living adoption and durable residential and commercial uptake, our integrators remain extremely busy, and many are booked out months in advance. In light of these factors, we're confident in our ability to continue to deliver strong growth and expect to deliver up to 1.17 billion in net sales and 120 million in adjusted EBITDA at the high end of our 2022 guidance range. Mike will provide more detail and rationale on our guidance. As we move into the first full fiscal year of being a public company, We are poised to build on the continued current momentum for the foreseeable future. With that, I'll turn the call over to Mike Carlett, our CFO, to discuss 21's financial results and 22's outlook in greater detail. Mike?