ScanSource Announces Second Quarter Results

GREENVILLE, S.C.--(BUSINESS WIRE)--ScanSource, Inc. (NASDAQ: SCSC), a leading provider of technology products and solutions, today announced financial results for the second quarter ended December 31, 2019.


 

Quarter ended December 31,

 

2019

 

2018

 

Change

 

(in millions, except per share data)

Net sales

$

989.5

 

 

$

1,046.0

 

 

(5

)%

Non-GAAP net sales, excluding Planned Divestitures(1)

833.7

 

 

872.4

 

 

(4

)%

Operating income

18.5

 

 

29.7

 

 

(38

)%

Non-GAAP operating income(1) (2)

28.6

 

 

34.6

 

 

(17

)%

Net income

11.4

 

 

20.0

 

 

(43

)%

Non-GAAP net income(1) (2)

19.5

 

 

24.7

 

 

(21

)%

Diluted EPS

$

0.45

 

 

$

0.78

 

 

(42

)%

Non-GAAP diluted EPS(1) (2)

$

0.77

 

 

$

0.96

 

 

(20

)%

 

 

 

 

 

 

(1) A reconciliation of non-GAAP financial information to GAAP financial information is presented in the Supplementary Information (Unaudited) below.

(2) Non-GAAP results exclude amortization of intangible assets related to acquisitions, change in fair value of contingent consideration, the impact of Planned Divestitures and other non-GAAP items. A reconciliation of non-GAAP to GAAP financial information is presented below.

 

"The second quarter's financial results were below our expectations, as we reorganized our North American VAR sales teams and lost sales from a group of customers," said Mike Baur, Chairman and CEO, ScanSource, Inc. "We are committed to our One ScanSource strategy to drive higher value and recurring revenue growth for our customers."

Quarterly Results

Net sales were $990 million for the second quarter of fiscal year 2020, 5% lower than the second quarter of fiscal year 2019, principally from lower sales volumes in North America. This decrease was partially offset by increases for the Intelisys recurring revenue business and the addition of SaaS sales with the acquisition of intY. Operating income for the second quarter decreased to $18.5 million year-over-year, and non-GAAP operating income decreased to $28.6 million from the prior-year quarter, primarily from investments for our recurring revenue and services-based businesses.

On a GAAP basis, net income for the second quarter of fiscal year 2020 totaled $11.4 million, or $0.45 per diluted share, compared with net income of $20.0 million, or $0.78 per diluted share, for the prior-year quarter. GAAP diluted EPS included a higher than expected expense for the change in fair value of contingent consideration for Intelisys as a result of better than expected actual results. Non-GAAP net income totaled $19.5 million, or $0.77 per diluted share, compared to $24.7 million, or $0.96 per diluted share, for the prior-year quarter.

Plan to Divest Certain Businesses Outside of US, Canada and Brazil

On August 20, 2019, ScanSource announced plans to divest its physical products distribution businesses outside of the United States, Canada and Brazil. ScanSource will continue to operate and invest in its digital distribution business in these geographies. These plans are part of a strategic portfolio repositioning to align investments with higher-growth, higher-margin businesses. The Company has begun the process to market and sell the Planned Divestitures. There can be no assurance that this sale process will result in a transaction or regarding the timing of any transaction. The Planned Divestitures, comprised of physical product businesses in Europe, UK, Mexico, Colombia, Chile, Peru and the Miami-based export operations, had net sales of $156 million for the second quarter fiscal year 2020 and at December 31, 2019 had working capital of $167 million.

Forecast for Next Quarter

For the third quarter of fiscal year 2020, ScanSource expects GAAP net sales to range from $865 million to $915 million and non-GAAP net sales excluding the Planned Divestitures to range from $725 million to $775 million. For the third quarter of fiscal year 2020, ScanSource expects diluted earnings per share to range from $0.16 to $0.26 and non-GAAP diluted earnings per share to range from $0.44 to $0.54. Non-GAAP diluted earnings per share exclude amortization of intangible assets related to acquisitions, change in fair value of contingent consideration, the impact of Planned Divestitures and other non-GAAP items.

Webcast Details and CFO Commentary

At approximately 4:15 p.m. ET today, a CFO commentary, as a supplement to this press release and the Company's conference call, will be available on ScanSource's website, www.scansource.com (Investor Relations section). ScanSource will present additional information about its financial results and outlook in a conference call today, February 4, 2020, at 5:00 p.m. ET. A webcast of the call will be available for all interested parties and can be accessed at www.scansource.com (Investor Relations section). The webcast will be available for replay for 60 days.

Safe Harbor Statement

This press release contains “forward-looking” statements, including the forecast of sales and earnings per share for next quarter and regarding the Planned Divestitures, that involve risks and uncertainties. Any number of factors could cause actual results to differ materially from anticipated or forecasted results, including, but not limited to, changes in interest and exchange rates and regulatory regimes impacting the Company's international operations, the impact of tax reform laws, the failure of acquisitions to meet the Company's expectations, the failure to manage and implement the Company's organic growth strategy, credit risks involving the Company's larger customers and suppliers, termination of the Company's relationship with key suppliers or a significant modification of the terms under which it operates with a key supplier, the decline in demand for the products and services that the Company provides, reduced prices for the products and services that the Company provides due both to competitor and customer action, the Company's ability to complete the Planned Divestitures on acceptable terms or to otherwise dispose of the operations, changes in the Company's operating strategy and other factors set forth in the "Risk Factors" contained in the Company's annual report on Form 10-K for the year ended June 30, 2019, filed with the Securities and Exchange Commission. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Information

In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the Company also discloses certain non-GAAP financial measures, which are summarized below. Non-GAAP financial measures are used to understand and evaluate performance, including comparisons from period to period. Non-GAAP results exclude amortization of intangible assets related to acquisitions, change in fair value of contingent consideration, acquisition costs, restructuring costs and other non-GAAP adjustments.

Net sales on a constant currency basis, excluding Planned Divestitures and acquisitions: The Company discloses the percentage change in net sales excluding the translation impact from changes in foreign currency exchange rates between reporting periods and excluding the net sales from Planned Divestitures, as well as acquisitions prior to the first full year from the acquisition date. This measure enhances the comparability between periods to help analyze underlying trends on an organic basis.

Income Statement Non-GAAP Metrics: To evaluate current period performance on a more consistent basis with prior periods, the Company discloses non-GAAP net sales, non-GAAP gross profit, non-GAAP operating income, non-GAAP other expense, net, non-GAAP pre-tax income, non-GAAP net income and non-GAAP diluted earnings per share (non-GAAP diluted "EPS"). Non-GAAP results exclude amortization of intangible assets related to acquisitions, changes in fair value of contingent consideration, acquisition and divestiture costs, impact of Planned Divestitures and other non-GAAP adjustments. Non-GAAP metrics are useful in assessing and understanding the Company's operating performance, especially when comparing results with previous periods or forecasting performance for future periods.

Return on invested capital ("ROIC"): Management uses ROIC as a performance measurement to assess efficiency in allocating capital under the Company's control to generate returns. Management believes this metric balances the Company's operating results with asset and liability management, is not impacted by capitalization decisions and correlates with shareholder value creation. In addition, it is easily computed, communicated and understood. ROIC also provides management a measure of the Company's profitability on a basis more comparable to historical or future periods.

ROIC assists management in comparing the Company's performance over various reporting periods on a consistent basis because it removes from operating results the impact of items that do not reflect core operating performance. ROIC is calculated as adjusted EBITDA over invested capital. Adjusted earnings before interest expense, income taxes, depreciation and amortization ("Adjusted EBITDA") excludes the change in fair value of contingent consideration, in addition to other non-GAAP adjustments. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period. Management believes the calculation of ROIC provides useful information to investors and is an additional relevant comparison of the Company's performance during the year.

These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that the Company reports may not be comparable to similarly titled amounts reported by other companies. Analysis of results and outlook on a non-GAAP basis should be considered in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with GAAP. A reconciliation of the Company's non-GAAP financial information to GAAP is set forth in the Supplementary Information (Unaudited) below.

About ScanSource, Inc.

ScanSource, Inc. (NASDAQ: SCSC) is at the center of the technology solution delivery channel, connecting businesses and providing solutions for their complex needs. ScanSource sells through multiple, specialized routes-to-market with digital, physical and services offerings from the world’s leading suppliers of point-of-sale (POS), payments, barcode, physical security, unified communications and collaboration, telecom and cloud services. ScanSource enables its sales partners to create, deliver and manage solutions for end-customers across almost every vertical market. Founded in 1992 and headquartered in Greenville, South Carolina, ScanSource was named one of the Best Places to Work in South Carolina and on FORTUNE magazine’s 2020 List of World’s Most Admired Companies. ScanSource ranks #643 on the Fortune 1000. For more information, visit www.scansource.com.

 
 
 
 

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands)

 

 

December 31, 2019

 

June 30, 2019*

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

42,005

 

 

$

23,818

 

Accounts receivable, less allowance of $37,672 at December 31, 2019 and $38,849 at June 30, 2019

 

645,270

 

 

654,983

 

Inventories

 

742,979

 

 

697,343

 

Prepaid expenses and other current assets

 

109,075

 

 

101,171

 

Total current assets

 

1,539,329

 

 

1,477,315

 

Property and equipment, net

 

61,625

 

 

63,363

 

Goodwill

 

369,537

 

 

319,538

 

Identifiable intangible assets, net

 

117,981

 

 

127,939

 

Deferred income taxes

 

24,498

 

 

24,724

 

Other non-current assets

 

97,160

 

 

54,382

 

Total assets

 

$

2,210,130

 

 

$

2,067,261

 

Liabilities and Shareholders' Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

672,906

 

 

$

558,101

 

Accrued expenses and other current liabilities

 

105,649

 

 

91,407

 

Current portion of contingent consideration

 

45,043

 

 

38,393

 

Income taxes payable

 

627

 

 

4,310

 

Short-term borrowings

 

2,098

 

 

4,590

 

Current portion of long-term debt

 

5,964

 

 

4,085

 

Total current liabilities

 

832,287

 

 

700,886

 

Deferred income taxes

 

1,248

 

 

1,395

 

Long-term debt, net of current portion

 

146,925

 

 

151,014

 

Borrowings under revolving credit facility

 

202,758

 

 

200,817

 

Long-term portion of contingent consideration

 

 

 

39,532

 

Other long-term liabilities

 

99,332

 

 

59,488

 

Total liabilities

 

1,282,550

 

 

1,153,132

 

Shareholders' equity:

 

 

 

 

Common stock

 

61,095

 

 

64,287

 

Retained earnings

 

962,825

 

 

939,930

 

Accumulated other comprehensive income (loss)

 

(96,340

)

 

(90,088

)

Total shareholders' equity

 

927,580

 

 

914,129

 

Total liabilities and shareholders' equity

 

$

2,210,130

 

 

$

2,067,261

 

 

* Derived from audited financial statements.

 
 
 
 
 
 

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Income Statements (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended December 31,

 

Six months ended December 31,

 

 

 

2019

 

2018

 

2019

 

2018

 

Net sales

 

$

989,503

 

 

$

1,046,021

 

 

$

1,996,430

 

 

$

2,018,921

 

 

Cost of goods sold

 

875,619

 

 

925,543

 

 

1,770,447

 

 

1,786,229

 

 

Gross profit

 

113,884

 

 

120,478

 

 

225,983

 

 

232,692

 

 

Selling, general and administrative expenses

 

83,121

 

 

80,950

 

 

165,632

 

 

158,880

 

 

Depreciation expense

 

3,459

 

 

3,272

 

 

7,008

 

 

6,538

 

 

Intangible amortization expense

 

5,631

 

 

4,700

 

 

10,593

 

 

9,703

 

 

Change in fair value of contingent consideration

 

3,176

 

 

1,850

 

 

5,649

 

 

6,434

 

 

Operating income

 

18,497

 

 

29,706

 

 

37,101

 

 

51,137

 

 

Interest expense

 

3,751

 

 

3,119

 

 

7,543

 

 

5,746

 

 

Interest income

 

(749

)

 

(264

)

 

(1,548

)

 

(715

)

 

Other expense, net

 

(225

)

 

201

 

 

(195

)

 

233

 

 

Income before income taxes

 

15,720

 

 

26,650

 

 

31,301

 

 

45,873

 

 

Provision for income taxes

 

4,354

 

 

6,668

 

 

8,405

 

 

11,570

 

 

Net income

 

$

11,366

 

 

$

19,982

 

 

$

22,896

 

 

$

34,303

 

 

Per share data:

 

 

 

 

 

 

 

 

 

Net income per common share, basic

 

$

0.45

 

 

$

0.78

 

 

$

0.90

 

 

$

1.34

 

 

Weighted-average shares outstanding, basic

 

25,274

 

 

25,640

 

 

25,407

 

 

25,619

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share, diluted

 

$

0.45

 

 

$

0.78

 

 

$

0.90

 

 

$

1.33

 

 

Weighted-average shares outstanding, diluted

 

25,358

 

 

25,750

 

 

25,488

 

 

25,752

 

 

 
 
 
 
 

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

 

 

 

 

Net Sales by Segment:

 

 

 

 

Quarter ended December 31,

 

 

 

2019

 

2018

 

% Change

Worldwide Barcode, Networking & Security:

(in thousands)

 

 

Net sales, reported

$

686,237

 

 

$

701,639

 

 

(2.2

)%

Planned Divestitures

(111,237

)

 

(122,326

)

 

 

Non-GAAP net sales, excluding Planned Divestitures

575,000

 

 

579,313

 

 

(0.7

)%

Foreign exchange impact(a)

1,799

 

 

 

 

 

Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions

$

576,799

 

 

$

579,313

 

 

(0.4

)%

 

 

 

 

 

 

Worldwide Communications & Services:

 

 

 

 

 

Net sales, reported

$

303,266

 

 

$

344,382

 

 

(11.9

)%

Planned Divestitures

(44,530

)

 

(51,285

)

 

 

Non-GAAP net sales, excluding Planned Divestitures

258,736

 

 

293,097

 

 

(11.7

)%

Foreign exchange impact(a)

 

5,187

 

 

 

 

 

Less: Acquisitions

(12,036

)

 

(98

)

 

 

Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions

$

251,887

 

 

$

292,999

 

 

(14.0

)%

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

Net sales, reported

$

989,503

 

 

$

1,046,021

 

 

(5.4

)%

Planned Divestitures

(155,767

)

 

(173,611

)

 

 

Non-GAAP net sales, excluding Planned Divestitures

833,736

 

 

872,410

 

 

(4.4

)%

Foreign exchange impact(a)

 

6,986

 

 

 

 

 

Less: Acquisitions

(12,036

)

 

(98

)

 

 

Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions

$

828,686

 

 

$

872,312

 

 

(5.0

)%

 

 

 

 

 

 

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended December 31, 2019 into U.S. dollars using the average foreign exchange rates for the quarter ended December 31, 2018.

 
 
 
 

 

ScanSource, Inc. and Subsidiaries

 

Supplementary Information (Unaudited)

 

 

 

 

 

 

Net Sales by Segment:

 

 

 

 

 

Six months ended December 31,

 

 

 

 

2019

 

2018

 

% Change

 

Worldwide Barcode, Networking & Security:

(in thousands)

 

 

 

Net sales, as reported

$

1,384,028

 

 

$

1,356,752

 

 

2.0

%

 

Planned Divestitures

(227,840

)

 

(240,693

)

 

 

 

Non-GAAP net sales, excluding Planned Divestitures

1,156,188

 

 

1,116,059

 

 

3.6

%

 

Foreign exchange impact (a)

1,894

 

 

 

 

 

 

Less: Acquisitions

 

 

 

 

 

 

Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions

$

1,158,082

 

 

$

1,116,059

 

 

3.8

%

 

 

 

 

 

 

 

 

Worldwide Communications & Services:

 

 

 

 

 

 

Net sales, as reported

$

612,402

 

 

$

662,169

 

 

(7.5

)%

 

Planned Divestitures

(83,442

)

 

(92,564

)

 

 

 

Non-GAAP net sales, excluding Planned Divestitures

528,960

 

 

569,605

 

 

(7.1

)%

 

Foreign exchange impact (a)

5,431

 

 

 

 

 

 

Less: Acquisitions

(24,193

)

 

(1,062

)

 

 

 

Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions

$

510,198

 

 

$

568,543

 

 

(10.3

)%

 

 

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

 

Net sales, as reported

$

1,996,430

 

 

$

2,018,921

 

 

(1.1

)%

 

Planned Divestitures

(311,282

)

 

(333,257

)

 

 

 

Non-GAAP net sales, excluding Planned Divestitures

1,685,148

 

 

1,685,664

 

 

%

 

Foreign exchange impact (a)

7,325

 

 

 

 

 

 

Less: Acquisitions

(24,193

)

 

(1,062

)

 

 

 

Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions

$

1,668,280

 

 

$

1,684,602

 

 

(1.0

)%

 

 

 

 

 

 

 

 

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the six months ended December 31, 2019 into U.S. dollars using the average foreign exchange rates for the six months ended December 31, 2018.

 
 
 
 
 

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

 

 

 

 

 

 

Net Sales by Geography:

 

 

 

 

Quarter ended December 31,

 

 

 

2019

 

2018

 

% Change

United States and Canada:

(in thousands)

 

 

Net sales, as reported

$

736,129

 

 

$

779,455

 

 

(5.6

)%

Less: Acquisitions

(2,312

)

 

(98

)

 

 

Non-GAAP net sales, excluding acquisitions

$

733,817

 

 

$

779,357

 

 

(5.8

)%

 

 

 

 

 

 

International:

 

 

 

 

 

Net sales, as reported

$

253,374

 

 

$

266,566

 

 

(4.9

)%

Planned Divestitures

(155,767

)

 

(173,611

)

 

 

Non-GAAP net sales, excluding Planned Divestitures

97,607

 

 

92,955

 

 

5.0

%

Foreign exchange impact(a)

6,986

 

 

 

 

 

Less: Acquisitions

(9,724

)

 

 

 

 

Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions

$

94,869

 

 

$

92,955

 

 

2.1

%

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

Net sales, as reported

$

989,503

 

 

$

1,046,021

 

 

(5.4

)%

Planned Divestitures

(155,767

)

 

(173,611

)

 

 

Non-GAAP net sales, excluding Planned Divestitures

833,736

 

 

872,410

 

 

(4.4

)%

Foreign exchange impact(a)

6,986

 

 

 

 

 

Less: Acquisitions

(12,036

)

 

(98

)

 

 

Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions

$

828,686

 

 

$

872,312

 

 

(5.0

)%

 

 

 

 

 

 

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended December 31, 2019 into U.S. dollars using the average foreign exchange rates for the quarter ended December 31, 2018.

 
 
 
 

 

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

 

 

 

 

 

 

 

Net Sales by Geography:

 

 

 

 

 

Six months ended December 31,

 

 

 

 

2019

 

2018

 

% Change

 

United States and Canada:

(in thousands)

 

 

 

Net sales, as reported

$

1,505,766

 

 

$

1,517,412

 

 

(0.8

)%

 

Less: Acquisitions

(5,907

)

 

(1,062

)

 

 

 

Net sales, excluding acquisitions

$

1,499,859

 

 

$

1,516,350

 

 

(1.1

)%

 

 

 

 

 

 

 

 

International:

 

 

 

 

 

 

Net sales, as reported

$

490,664

 

 

$

501,509

 

 

(2.2

)%

 

Planned Divestitures

(311,282

)

 

(333,257

)

 

 

 

Non-GAAP net sales, excluding Planned Divestitures

179,382

 

 

168,252

 

 

6.6

%

 

Foreign exchange impact (a)

7,325

 

 

 

 

 

 

Less: Acquisitions

(18,286

)

 

 

 

 

 

Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions

$

168,421

 

 

$

168,252

 

 

2.1

%

 

 

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

 

Net sales, as reported

$

1,996,430

 

 

$

2,018,921

 

 

(5.4

)%

 

Planned Divestitures

(311,282

)

 

(333,257

)

 

 

 

Non-GAAP net sales, excluding Planned Divestitures

1,685,148

 

 

1,685,664

 

 

(4.4

)%

 

Foreign exchange impact (a)

7,325

 

 

 

 

 

 

Less: Acquisitions

(24,193

)

 

(1,062

)

 

 

 

Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions

$

1,668,280

 

 

$

1,684,602

 

 

(5.0

)%

 

 

 

 

 

 

 

 

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the six months ended December 31, 2019 into U.S. dollars using the average foreign exchange rates for the six months ended December 31, 2018.

 
 
 
 
 

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Information:

 

 

 

Quarter ended December 31, 2019

 

Reported

GAAP

measure

 

Intangible

amortization

expense

 

Change in

fair value of

contingent

consideration

 

Acquisition

and

Divestiture

costs(a)

 

Restructuring

costs

 

Impact of

Planned

Divestitures

 

Non-

GAAP

measure

 

in thousands, except per share data

Net sales

$

989,503

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

(155,767

)

 

$

833,736

 

Gross profit

113,884

 

 

 

 

 

 

 

 

 

 

(15,471

)

 

98,413

 

Operating income

18,497

 

 

5,631

 

 

3,176

 

 

1,151

 

 

490

 

 

(371

)

 

28,574

 

Other expense, net

2,777

 

 

 

 

 

 

 

 

 

 

(238

)

 

2,539

 

Pre-tax income

15,720

 

 

5,631

 

 

3,176

 

 

1,151

 

 

490

 

 

(133

)

 

26,035

 

Net income

11,366

 

 

4,289

 

 

2,401

 

 

1,151

 

 

378

 

 

(121

)

 

19,464

 

Diluted EPS

$

0.45

 

 

$

0.17

 

 

$

0.09

 

 

$

0.05

 

 

$

0.01

 

 

$

 

 

$

0.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended December 31, 2018

 

Reported

GAAP

measure

 

Intangible

amortization

expense

 

Change in

fair value of

contingent

consideration

 

Acquisition

costs(a)

 

Restructuring

costs

 

Impact of

Planned

Divestitures

 

Non-

GAAP

measure

 

in thousands, except per share data

Net sales

$

1,046,021

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

(173,611

)

 

$

872,410

 

Gross profit

120,478

 

 

 

 

 

 

 

 

 

 

(16,998

)

 

103,480

 

Operating income

29,706

 

 

4,700

 

 

1,850

 

 

414

 

 

 

 

(2,102

)

 

34,568

 

Other expense, net

3,056

 

 

 

 

 

 

 

 

 

 

(513

)

 

2,543

 

Pre-tax income

26,650

 

 

4,700

 

 

1,850

 

 

414

 

 

 

 

(1,588

)

 

32,026

 

Net income

19,982

 

 

3,567

 

 

1,408

 

 

414

 

 

 

 

(650

)

 

24,721

 

Diluted EPS

$

0.78

 

 

$

0.14

 

 

$

0.05

 

 

$

0.02

 

 

$

 

 

$

(0.03

)

 

$

0.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Acquisition and divestiture costs are generally non-deductible for tax purposes.

 
 
 
 

 

Six months ended December 31, 2019

 

Reported

GAAP

measure

 

Intangible

amortization

expense

 

Change in

fair value of

contingent

consideration

 

Acquisition

and

divestiture

costs(a)

 

Restructuring

costs

 

Impact of

Planned

Divestitures

 

Non-

GAAP

measure

 

(in thousands, except per share data)

Net sales

$

1,996,430

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

(311,282

)

 

$

1,685,148

 

Gross profit

225,983

 

 

 

 

 

 

 

 

 

 

(28,867

)

 

197,116

 

Operating income

37,101

 

 

10,593

 

 

5,649

 

 

1,909

 

 

659

 

 

136

 

 

56,047

 

Other expense, net

5,800

 

 

 

 

 

 

 

 

 

 

(378

)

 

5,422

 

Pre-tax income

31,301

 

 

10,593

 

 

5,649

 

 

1,909

 

 

659

 

 

514

 

 

50,625

 

Net income

22,896

 

 

8,035

 

 

4,270

 

 

1,909

 

 

505

 

 

323

 

 

37,938

 

Diluted EPS

$

0.90

 

 

$

0.32

 

 

$

0.17

 

 

$

0.07

 

 

$

0.02

 

 

$

0.01

 

 

$

1.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended December 31, 2018

 

Reported

GAAP

measure

 

Intangible

amortization

expense

 

Change in

fair value of

contingent

consideration

 

Acquisition

and

divestiture

costs(a)

 

Restructuring

costs

 

Impact of

Planned

Divestitures

 

Non-

GAAP

measure

 

(in thousands, except per share data)

Net sales

$

2,018,921

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

(333,257

)

 

$

1,685,664

 

Gross profit

232,692

 

 

 

 

 

 

 

 

 

 

(32,196

)

 

200,496

 

Operating income

51,137

 

 

9,703

 

 

6,434

 

 

769

 

 

1,328

 

 

(2,150

)

 

67,221

 

Other expense, net

5,264

 

 

 

 

 

 

 

 

 

 

(346

)

 

4,918

 

Pre-tax income

45,873

 

 

9,703

 

 

6,434

 

 

769

 

 

1,328

 

 

(1,804

)

 

62,303

 

Net income

34,303

 

 

7,365

 

 

4,895

 

 

769

 

 

955

 

 

(697

)

 

47,590

 

Diluted EPS

$

1.33

 

 

$

0.29

 

 

$

0.19

 

 

$

0.03

 

 

$

0.04

 

 

$

(0.03

)

 

$

1.85

 


Contacts

Gerald Lyons
Executive Vice President, Chief Financial Officer
ScanSource, Inc.
(864) 286-4854

- or -

Mary M. Gentry
Vice President, Treasurer and Investor Relations
ScanSource, Inc.
(864) 286-4892


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