Arrow Electronics, Inc.

Good day and thank you for standing by. Welcome to the Arrow Electronics fourth quarter and year-end 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Steve O'Brien. Please go ahead.

Thanks, April. And with us on the call today are Mike Long, Chairman, President, and Chief Executive Officer, Sean Cairns, Chief Operating Officer, and Chris Stansbury, Senior Vice President and Chief Financial Officer. During this call, we'll make forward-looking statements, including statements about our business outlook, strategies, and future financial results, which are based on our predictions and expectations as of today. Our actual results could differ materially due to a number of risks and uncertainties, including the risk factors in our most recent 10-K and 10-Q filings with the FCC. We undertake no obligation to update publicly or revise any of the forward-looking statements. As a reminder, some of the figures we will discuss today on today's call are non-GAAP. We have reconciled those to the most directly comparable GAAP figures, measures in our financial Statements and earnings release, these are non-GAAP measures and are not intended to be a substitute for our GAAP results. You can access our earnings release at investor.arrow.com along with the CFO commentary, the non-GAAP earnings reconciliation, and a replay of this call. We will begin with a few minutes of prepared remarks, which will then be followed by a question and answer period. I'll now hand the call to our Chairman President and CEO, Mike Long.

Thanks, Steve. Thanks to all of you for joining us today. Before I get into our most recent results, I'd like to take a minute to reflect on the past year at Arrow. In today's environment, our focus on constantly evolving our business to better serve our customers is more important than ever. Our team has long recognized that the future of business will not look like the past, and in order to win, We must both maximize our current business and embrace new avenues and sources of profitability. At Arrow, we continue to enhance the solutions and services we provide as the markets we serve change at an increasingly rapid pace. And it's clear that our work is paying off. Our strong results demonstrate that we remain ahead of the curve, supported by the best team in the industry. This year, our colleagues worked tirelessly to overcome the many challenges caused by the lack of supply in the face of an acute need for components and IT solutions. While our sales, gross profit, and operating income set all-time absolute records, our team's efficiency was also unmatched. We reached new benchmark levels on an individual employee basis for all three metrics. This increased efficiency was a direct result of our work over the last several years to assemble the most capable workforce possible, leveraging diverse skills, experiences, and backgrounds to best serve our customers across the different regions and industries. Credibility and transparency continue to be the hallmarks of our business. Instances of severe supply chain bottlenecks have resulted in production slowdowns. but they also have enabled Arrow to showcase our unmatched experience, industry knowledge, products and services to customers new and old. We understand the demand dynamics and are uniquely positioned to help our customers navigate today's challenges. This includes companies and industries who may be unaccustomed to shortages or supply restrictions. By helping to mitigate production risks and assure a continuous stream of products to the market, Arrow deepens customer relationships and solidifies our position as a trusted partner. Moving to the most recent results, we continue to believe our investments in design engineering and supply chain services are bearing fruit. However, there is certainly an element of favorable pricing that is beneficial to our margins. We have reason to believe that the overall industry pricing environment has structurally improved and could be better from cycle to cycle. From a structural perspective, consolidation is a key factor in pricing. In addition, we see only modest capacity additions coming online within the next couple of quarters compared to the overwhelming demand. Longer term, we recognize that there'll be more challenging demand conditions. At some point in the future, this will test the thesis. In this shortage environment, it's paramount that we rethink the way business in our industry is done in order to manage the dynamic nature of demand. Arrow has been working to address, from our own perspective, the potential for rising inventory levels in the electronics component industry despite claims of unmet demand in the channel. Stocking higher value inventory with greater design and engineering component contributed to record margins and returns on working capital and invested capital. That said, we know we must balance the competing near-term priority of keeping our cash cycle short with our long-term goal of maximizing economic returns. We're monitoring the quantities, types, and terms of our inventory closely and believe we're well-positioned to sell through our inventory and collect future cash on our working capital investments. Turning to enterprise computing solutions, close followers of our story recognize that sales and profit growth have become disassociated due to the accounting treatment of software services in cloud. We're pleased to deliver on our main focus, operating income growth for the full year. While supply chain issues continue to limit our ability to capitalize on strong demand, we saw postponed or realigned projects turn into available cloud-based resources. The flexibility of our business model has made us, in either case, well-positioned to remain engaged with customers and tailor our solutions to their needs. With enterprise computing solutions operating income on solid footing, we enter 2022 with excitement to serve our customers. Now more than Arrow ever, Arrow is unmatched in its services and support when compared to the competition. We're providing much needed stability and experience to value-added resellers and managed service providers without distraction. In closing, I'd like to congratulate our team for delivering strong financial results and economic returns that we have been striving towards. In 2021, we have turned each potential challenge that came our way, from consolidation to tariffs to cloud and to shortages, into opportunities, in turn successes. While our industry continues to change over time, the fact remains that Arrow continues to improve and expand our business to the benefit of our customers, suppliers, and team. We look forward to continuing to build on this momentum. With that, I'll now hand the call over to Chris to provide more details on results and our expectations.