Arrow Electronics, Inc.

Good day and thank you for standing by. Welcome to the Arrow Electronics first quarter 2022 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. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, you may press the star 0. I would now like to hand the conference over to your first speaker today, Rick Seidlitz, Principal Financial Officer. Please go ahead.

Thank you, Patricia. Good day and welcome to the Arrow Electronics first quarter 2022 earnings conference call. With us on the call today are Mike Long, Chairman, President, and Chief Executive Officer, Sean Cairns, Chief Operating Officer, and Emerick Seidlitz, Interim Principal 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 of the SEC. We undertake no obligation to update publicly or revise any of the forward-looking statements. As a reminder, some of the figures we'll discuss on today's call are non-GAAP, We have reconciled those to the most directly comparable GAAP financial measures in our earnings release. These non-GAAP measures are not intended to be a substitute for our GAAP results. You can access our earnings release at investor.arrow.com, along with 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 will now hand the call to our Chairman, President, and CEO, Mike Long.

Thanks, Rick. And thanks to all of you for joining us today. For the first quarter, we built on the record performance we delivered in 2021. We saw a continuation of the strong demand conditions from last year. As a result, demand for electronic components and associated design, engineering, and supply chain services remained high. This led to record sales in the first quarter exceeding the top end of our expectations. In addition, our record gross profit and earnings per share for the quarter were driven by strong execution in the face of severe supply chain demand imbalance. I'm pleased to report that our past investments to enhance our capabilities, especially in the area of supply chain as a service, are leading to growth in our profit performance. While some bottlenecks persist, Demand for electronic components across key industries and all three regions, particularly the Americas and the EMEA region, remains strong. A favorable mix of higher margin products and solutions, along with regional mix, resulted in record quarterly operating income and margins. This points to Arrow helping customers navigate shortages and supply chain challenges in this environment so they can maintain production. bring new products to market, and securely manage their applications and data. By helping to mitigate production risks and help assure a steady stream of products to the market, Arrow solidifies its position as a trusted advisor, working alongside customers and suppliers. Thanks to the focused execution, our components business produced record results this quarter. Our global components business delivered the highest ever operating income along with sales above our high end of expectation. The Americas experienced robust demand across most end markets and industries. EMEA performance was strong across all industries due to improved supply, while Asia's performance was impacted by product mix and supply. Design activity improved in all three regions. and backlog continues to grow indicate that all customers are still concerned with securing supply. Our enterprise computing solutions business delivered solid operating performance. We saw demand continue to grow for more complex solutions, including hybrid with backlog at record levels in all regions. With operating performance growing year over year, our business is well performed and positioned for the remainder of the year as customers are anticipating longer fulfillment and placing orders further out, resulting in a strong pipeline. While the IT demand environment was healthy, business mix was skewed towards software and services due to customer preferences. Hardware-related sales continue to face challenges from supply chain bottlenecks, resulting in slightly lower net sales than we anticipated compared to prior year. I'd like to congratulate all of our teams for their strong execution in delivering a record quarter. Arrow is well positioned to continue to deliver results given our investments that are driving our growth. Arrow's strength also comes from consistently emerging stronger from downturns and disruption. Our performance is indicative of just that, and we look forward to expanding our business to the benefit of our customers, suppliers, and teams. We also believe our strength comes from working on technology solutions that make a difference in people's lives. That is engineering the power of innovation to make life better. Before I hand the call back over to Rick to provide more details on our results and our expectations for the next quarter, I'd like to add a personal note. On Monday, we announced that Sean Cairns will assume the role of President and Chief Executive Officer, effective June 1st. and that I will become executive chairman. Over the years, I've enjoyed our conversations about the business and the dynamics affecting our industry at large. I'm grateful for those relationships we've built, and I wish you all much success in your careers. Sean has been a leader with Arrow for 15 years, most of that working closely with me. So you already know that you're in great hands with them. With that, Rick, I'll hand it over to you.