WESCO International, Inc.

Good morning. Welcome to today's West Co fourth quarter 2021 earnings call. My name is Candice and I will be a moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for question and answer at the end. If you would like to ask a question, please press Start followed by 1 on your telephone keypad. As a reminder, it is one question only and one follow-up. I would now like to hand the conference over to our host, Lesley Hunzinger, Head of Investor Relations. Lesley, please go ahead.

Thank you and good morning, everyone. Before we get started, I want to remind you that certain statements made on this call contain forward-looking information. Forward-looking statements are not guarantees of performance and by their nature are subject to inherent uncertainty. Actual results may differ materially. Please see our webcast slides as well as the company's SEC filings for additional risk factors and disclosures. Any forward-looking information relayed on this call speaks only as of this date, and the company undertakes no obligation to update the information to reflect the changed circumstances. Today we'll use certain non-GAAP financial measures. Required information about these non-GAAP measures is available on our webcast slides and in our press release, both of which are posted on our website at wesco.com. Also, please note that all references to prior year comparisons reflect proforma results as if the company had completed the June 2020 merger with Anixter International on January 1st, 2019. On the call this morning, we have John Engel, our CEO, and Dave Schultz, Wesco's chief financial officer. Now I'll turn the call over to John.

Thank you, Leslie, and good morning, everyone. It's great to be with you this morning. Wesco's performance in 2021 was exceptional. and laid the foundation for the extraordinary value creation opportunity that lies before us. We finished last year with another very strong quarter of market outperformance and achieved new company records for sales backlog and overall profitability. Importantly, we reduced our financial leverage to below four times EBITDA in just 18 months since closing the Anixter acquisition. It's important to note that all of this has been done under the cloud of the pandemic and global supply chain challenges. I am truly proud of our team's commitment to our vision of the new Wesco and for their focus on providing our global customers with the products, services, and supply chain solutions that they need. As the new Wesco emerges, our brand is evolving to align with our new vision, mission, and values that reflect the unity, growth, and ingenuity that now differentiate our company. We're carrying strong positive momentum into 2022 and the year is off to an excellent start. We strategically invested in our inventories last year to address the global supply chain challenges as well as support our strong pipeline of sales growth opportunities. We're very well positioned to meet increasing customer demand as supply chains are rebuilt this year. As a result, we expect to again deliver market outperformance in 2022. with both expanded margins and double-digit EPS growth. In addition, based on the strength of our continuing execution, we are again increasing the cost and sales synergy targets for our three-year integration program. We are only at the midpoint of our integration plan, but our progress is accelerating. As Wesco accelerates its market-leading positions, expanded portfolio, integration execution, and digital transformation investments to build a growth engine that is both resilient and sustainable. Dave will walk you through our 2021 results and 2022 outlook in detail in a few moments. But before I turn the call over to him, I want to provide a few comments on our secular growth trends, a recent new product and services launch, and our progress on ESG. Moving to page five. As we've outlined over the last several quarters, we are clearly seeing the outside benefits of our cross-selling initiatives and new service capabilities on our results. We're building on this positive execution momentum in 2022 as we begin to capture additional growth from the large-scale secular growth trends outlined on this page. Over the last few earnings calls, I've talked about how we're capitalizing on the increasing public and private investments in grid modernization, rural broadband, and data center development. Another trend we're well positioned to benefit from is the rapidly expanding impact of digital and IoT applications on our customers' operations and supply chains. Automation and IoT represent one of the fastest growing set of applications and solutions across our customer base. Combined with other high-growth technologies such as 5G and cloud computing, automation and IoT improve operational efficiencies, minimize cost, improve decision-making, and enhance the overall customer experience. The IoT applications market is forecast to grow at a 20-plus percent CAGR, or compound annual growth rate, through the end of this decade. And there's an ever-increasing business need to connect the physical and digital ecosystems to provide a frictionless customer experience. Lesko is very well positioned to capture these additional growth opportunities by combining our product and service capabilities in electrical, utility, data communications, broadband communications, and security. And we combine those in the complete solutions for our customers. Now moving to page six. Wesco is developing IoT solutions that transform how our customers procure, deploy, and utilize digital products and technologies. Highlighted on this page is an example of a new product with embedded services and cloud-based subscription model that we launched a few weeks ago in the latter part of January. Our new AV conference room as a service addresses the growing need for our business customers to make changes to support a hybrid work environment. Employees returning to their workplace have become adept at running their home-based video conference applications. Business conference rooms are commonly outfitted with displays, connectivity devices, and equipment that are difficult to use or have no collaboration system at all. Our end-to-end AV as a service solution provides customers with a robust conference room infrastructure, new applications, predictive maintenance, and advanced automation and analytics all in one package. With our subscription-based model, customer labor costs associated with system maintenance are reduced without the typical upfront capital expenditures. And importantly, customers are provided access to the latest technology and 24-7 support. Wesco is committed to developing digital solutions that support data-driven decisions, improve operational efficiencies, and provide flexibility for our customers. While still only in the early innings of our digital transformation, it's already very clear that our opportunities will be significant. We'll make sure that we continue to share our progress with you along the way. Now moving to page seven. I'm confident that Wesco is investing in the right areas at the right time. We are deepening our competitive advantage and setting the foundation for long-term profitable growth. At the same time, we're committed to responsible ESG operating practices, and a brief update is outlined on this page. As a B2B wholesale distribution and supply chain solutions company, we don't have the same environmental exposure as many of our supplier manufacturing partners. We do, however, assist our customers in meeting their environmental and sustainability goals, particularly in the areas of energy usage and conversion to higher efficiency products and services. We previously set and achieved our company targets regarding greenhouse gas emissions and waste reduction, and we are very proud of our commitment to safety and achieving best-in-class results. After combining with Anixter, we have now set new improvement goals for 2030, as we are fully committed to using our scale and our resources to drive a better, more sustainable future for all our stakeholders. I'm very pleased to highlight that last year, Forbes named Wesco as one of the world's best employers, as well as one of America's best employers for women for the second year in a row. In addition, we were recently named a fortunes list of the most admired companies in which we were ranked number two in the wholesalers diversified category. Lastly, I'd also like to highlight that Wesco has been included in Bloomberg's gender equality index for the fourth consecutive year in 2022. in summary westco westco's newfound scale expanded portfolio and industry leading positions when combined with the integration plan and digital transformation represent our catalyst for market outperformance and lasting value creation for all our stakeholders with that i'll now turn the call over to dave who'll take you through our financial results and outlook dave thanks john and good morning