Good day, ladies and gentlemen, and welcome to the CDW First Quarter 2013 Conference Call [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Mr. Tom Richards. You may begin.

Thanks, Tyrone. Good morning, everyone, it's a pleasure to be with you today and report another quarter of record results. Joining me on the call today are Ann Ziegler, our Chief Financial Officer; and Chris Leahy, our General Counsel. I'll begin today's call with a brief overview of our results and discuss our recent strategic progress. Ann will run you through the financial highlights and then we'll go right to your questions. But before we begin, Ann will provide a few important comments regarding what we will share with you today.

Thanks, Tom. Good morning, everyone. If you do not have a copy of the earnings release that was posted this morning and furnished to the SEC on Form 8-K, or the slides we have prepared to go along with this call, you may find them at our website at cdw.com under our Investor Relations section. As you know, CDW filed an initial S-1 registration statement on March 22, 2013 with the SEC and as such, we are in a quiet period. Recognizing this, our prepared remarks will not provide any perspective on future performance nor will we be able to respond to questions, which would require us to comment on future performance. We also will not be able to discuss our proposed initial public offering and we refer you to our S-1 registration statement if you have any questions relating to that. To the extent that any comments made in our presentation this morning are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Those statements are subject to risks and uncertainties that could cause actual results to differ materially. Additional information concerning these risks and uncertainties is contained in the Form 8-K we furnished to the SEC today and in the company's other filings with the SEC. CDW assumes no obligation to update the information presented during this webcast. Our presentation also includes certain non-GAAP financial measures. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules. You will find reconciliation charts in the slides for today's webcast and in the Form 8-K we furnished to the SEC. Finally, all references to growth rates or dollar amount increases in our remarks today are, unless otherwise indicated, versus the comparable period in 2012. Additionally, as Q1 2013 had 1 less selling day than the comparable period in 2012, all references to revenue growth rates versus last year are on an average daily sales basis, unless otherwise indicated. With that, I'll now turn the call back over to Tom to give you an overview of our first quarter operating results.

Okay, thanks, Ann. Our results this quarter once again demonstrated the power of our balanced portfolio and our focus on profitable growth as we delivered sales increases above forecast for the U.S. IT market with excellent profitability. Our first quarter net sales were $2.4 billion, up 4% on a reported basis and 5.6% on an average daily sales basis over last year's first quarter. Gross profit increased 4.5% and our adjusted EBITDA increased 7.3%. We delivered solid top line performance across both our corporate and public segments with corporate up 4.6% and public up 5.2%. These results were powered by our diverse customer base and broad products and solutions portfolio. With 5 customer channels each delivering over $1 billion in annual sales, our broad customer base continues to be a significant contributor to our ability to outperform the overall market. The benefit of this diversity is clear within this quarter's results, both in our corporate and public segments. For our corporate segment, sales increases of 7% in our medium and large business channel more than offset a 4% decline in our small business channel. While we saw solid momentum in sales to medium and large customers, conditions remained soft in the small business market consistent with what we saw at the end of last year as small business customers, which we define as companies with fewer than 100 employees, continued to take a conservative approach to buying. In our Public segment, the benefit from our diverse customer base was also evident. Government was down just over 2% as double-digit sales growth to state and local governments didn't fully offset low double-digit declines to the federal government market. On a federal government front, potential sequestration cuts and the absence of a budget impacted results. State and local government results continued their…

Thank you, Tom. We have posted a few slides to help you follow the numbers. Revenue in Q1 was $2.412 billion, an increase of 4% on a reported basis. Q1, 2013 had 1 less selling day as compared to 2012 so on an average daily sales basis, revenues increased 5.6% as average daily revenues grew to $38.3 million. On a sequential basis, average daily sales in Q1, 2013 declined 7.3% versus Q4, 2012, generally in line with the normal seasonality. Gross profit in Q1 increased 4.5% to $402 million as gross margin increased 10 basis points to 16.7% driven by a higher mix of commission revenue and higher professional services growth profits partially offset by negative price mix and product margins. SG&A, including advertising expense, was $282 million in Q1, an increase of 0.3%. We were able to hold our SG&A expense essentially flat as an increase in sales commissions and other variable compensation consistent with our higher sales and gross profit was offset by a decrease in non-cash equity compensation costs and lower occupancy costs. Adjusted EBITDA for Q1 was $178.6 million, up 7.3% and our Q1 adjusted EBITDA margin was 7.4%. We continued to drive productivity in the business. Q1 annualized sales per coworker was $1.42 million, a 4% increase versus Q1, 2012 and the highest Q1 productivity we have achieved since 2006. Given the macroeconomic uncertainty, we remain very cautious in our hiring and allowed attrition to run a bit ahead of hiring in Q1. As Tom indicated, we ended the quarter with 6,779 coworkers. Also, as Tom mentioned, we do remain committed to the full year hiring plan we articulated on our Q4 call. Moving to the balance sheet. At the end of Q1, our revolver remained undrawn and our cash plus revolver availability was $796.5…

. [Operator Instructions] First question is from David Phipps of Citigroup.

Can you talk about your large segment -- the medium and large corporate segments? You continue to show a strong growth there and we've heard in a lot of other conference calls that some other companies are struggling in that area.

David, it's Tom, sure. I think one thing to keep in mind, though, is kind of where we focus. We're not primarily focused on the very large enterprise marketplace and I think that's where you see some of the pressure in other market segments. We've continued to focus on kind of our sweet spot and in many of the initiatives I talk about, whether it's giving sellers more time to sell, improving our targeting, which kind of relates to giving them more time to sell, but it makes the time they are selling more productive. I think those things have helped kind of the sales productivity issue. And we've seen medium and large business segment kind of for the last couple of quarters begin to show some pretty good performance.

If I could have a quick follow-up. What exactly is in the Other segment that continues to grow at double digit rates? And that's all my questions.

Other is the Canada and Advanced Technology services operation.

[Operator Instructions] Our next question is from Thomas Egan of JPMorgan.

I wonder if you can just clarify a little bit around the thought process with the hiring of the coworkers, because I just wanted to make sure I had that clear. Originally, you said that you had sort of backed off on the hiring because you were worried about sequestration and some of the potential increases that you might not see in the government side, but then you said that you still plan to add the 100 to 125 coworkers, that plan is still in place. So maybe you could just provide us a little bit more color around what you're thinking. Do you -- are you -- do you know you're going to need those folks? What gives you confidence that you're going to need those folks by the end of the year? Why not just say, look, it's in flux and if we need them, we need them, if we don't, we don't?

Well, Tom, if you remember, we were pretty transparent about our sensitivity around the early part of this year and we said that, I think, on the last call, and we built our plan. But we're hopeful and anticipating that the economy will continue to improve and so we can go ahead and continue to execute with our plan. But I always, in my formal comments, Tom, I always have a line in there that said, of course we will monitor market conditions and adjust accordingly. I think what it did though was demonstrate one of the things we're quite proud of which is kind of the rigor and discipline with which we manage the business and the flexibility we have to kind of move the business based on what's going on in the marketplace.

So then just as a follow-up, on the education front, just sort of the same question that David Phipps had on the large business customer front. Many of the companies that I look at that service education are struggling because the budgets are incredibly tight at both the local and the big institution levels. I wondered if maybe you could just comment a little bit on what you're doing differently there that you think that the other guys aren't?

Well, I can't really comment on what the other guys are doing, so I can only tell you a little bit about how we focus. And just like everyone else, higher education is in a unique situation today with just the impact of funding and that clearly spills over into making IT decisions but we have continued to kind of on the other part of which is K through 12, local governments have had the opportunity, I think one of the things that's driving some of the technology decisions in K through 12 is some of the pending requirement to do testing in a digital format. And that, we have taken advantage of that and tried to help our customers get ready for that and to manage that. And I think that's one of the reasons you're seeing a strong performance by our K through 12 group.

There are no further questions at this time. I'd like to turn the call over to Mr. Richards for any closing remarks.

All right. Thanks, everybody again for taking the time to join us today and your interest in CDW. And as always, if we can help you or your company with their IT decisions, we're easy to find. So thanks, again for joining us on today's call.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Have a wonderful day.