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ScanSource Reports Second Quarter Results

ScanSource Reports Second Quarter Results

Achieves Strong Q2 Cash Flow and Intelisys Growth

ScanSource, Inc. (NASDAQ: SCSC), a leading hybrid distributor connecting devices to the cloud, today announced financial results for the second quarter ended December 31, 2023.

 

Second Quarter Summary

 

Q2 FY24

 

Q2 FY23

 

Change

 

(in thousands, except per share data)

Select reported measures:

 

 

 

 

 

Net sales

$

884,792

 

 

$

1,011,241

 

 

-12.5%

Gross profit

$

100,748

 

 

$

115,334

 

 

-12.6%

Gross profit margin %

 

11.39

%

 

 

11.41

%

 

-2bp

Operating income

$

26,826

 

 

$

39,432

 

 

-32.0%

GAAP net income

$

32,726

 

 

$

25,734

 

 

27.2%

GAAP diluted EPS

$

1.29

 

 

$

1.01

 

 

27.7%

Operating cash flow

$

63,224

 

 

$

(26,885

)

 

n/m

Select Non-GAAP measures:

 

 

 

 

 

Adjusted EBITDA

$

38,459

 

 

$

48,815

 

 

-21.2%

Adjusted EBITDA margin %

 

4.35

%

 

 

4.83

%

 

-48bp

Non-GAAP net income

$

21,587

 

 

$

26,941

 

 

-19.9%

Non-GAAP diluted EPS

$

0.85

 

 

$

1.06

 

 

-19.8%

Free cash flow

$

60,675

 

 

$

(29,389

)

 

n/m

n/m - not meaningful

 

 

 

 

 

“Strong cash flow and Intelisys recurring revenue growth are the highlights for our second quarter results,” said Mike Baur, Chair and CEO, ScanSource, Inc. “Our teams are navigating well through the challenging industry demand cycles.”

Quarterly Results

Net sales for the second quarter of fiscal year 2024 totaled $884.8 million, down 12.5% year-over-year. Specialty Technology Solutions net sales for the second quarter decreased 17.0% year-over-year to $520.7 million. Soft demand in barcode, mobility and point of sale was partially offset by growth in networking. Modern Communications & Cloud net sales for the second quarter decreased 5.1% year-over-year to $364.1 million due to lower sales volumes in communications hardware, partially offset by growth in Cisco products. Intelisys net billings increased to approximately $2.64 billion annualized, and Intelisys net sales for the second quarter increased 7.5%.

Gross profit for the second quarter of fiscal year 2024 decreased 12.6% year-over-year to $100.7 million. Gross profit margin for the second quarter was 11.39%, compared to 11.41% for the prior-year quarter.

For the second quarter of fiscal year 2024, operating income was $26.8 million compared to $39.4 million in the prior-year quarter. Second quarter fiscal year 2024 non-GAAP operating income decreased to $30.6 million down from $40.7 million for the prior-year quarter.

On a GAAP basis, net income for the second quarter of fiscal year 2024 totaled $32.7 million, or $1.29 per diluted share, compared to net income of $25.7 million, or $1.01 per diluted share, for the prior-year quarter. Second quarter fiscal year 2024 non-GAAP net income totaled $21.6 million, or $0.85 per diluted share, down from $26.9 million, or $1.06 per diluted share, for the prior-year quarter. Interest expense for the quarter decreased to $3.4 million, down from $5.1 million for the prior-year quarter, reflecting lower borrowings.

Adjusted EBITDA for the second quarter of fiscal year 2024 decreased 21.2% to $38.5 million, or 4.35% of net sales, compared to $48.8 million, or 4.83% of net sales, for the prior-year quarter.

ScanSource generated $156.8 million of operating cash flow and $151.9 million of free cash flow in the first six months of fiscal year 2024.

Updated Annual Financial Outlook for Fiscal Year 2024

ScanSource updates its expectations for net sales and adjusted EBITDA for the full fiscal year ending June 30, 2024 and replaces previously provided guidance:

 

 

FY24 Annual Outlook

 

Prior FY24 Annual Outlook

Net sales

 

At least $3.5 billion

 

At least $3.8 billion

Adjusted EBITDA (Non-GAAP)

 

At least $155 million

 

At least $170 million

Free cash flow

 

At least $200 million

 

At least $200 million

Adjusted EBITDA is a non-GAAP measure, which excludes estimates for amortization of intangible assets, depreciation expense, and non-cash shared-based compensation expense. ScanSource’s outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic investments, or other significant transactions that may be completed after the date hereof. These statements are forward-looking, and actual results may differ materially.

Webcast Details and Earnings Infographic

At approximately 8:45 a.m. ET today, an Earnings Infographic, as a supplement to this press release and the earnings 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 business in a conference call today, February 6, 2024, at 10:30 a.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 ScanSource's FY24 outlook, which 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, the following factors, which are neither presented in order of importance nor weighted: macroeconomic conditions, including potential prolonged economic weakness, inflation, the failure to manage and implement ScanSource's organic growth strategy, credit risks involving ScanSource's larger customers and suppliers, changes in interest and exchange rates and regulatory regimes impacting ScanSource's international operations, economic weakness and inflation, risk to the business from a cyberattack, a failure of IT systems, failure to hire and retain quality employees, loss of ScanSource's major customers, relationships with key suppliers and customers or a termination or a modification of the terms under which it operates with these key suppliers, changes in ScanSource's operating strategy, and other factors set forth in the "Risk Factors" contained in ScanSource's annual report on Form 10-K for the year ended June 30, 2023. Except as may be required by law, ScanSource 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"), ScanSource 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, acquisition and divestiture costs, gain on sale of business, restructuring costs and other non-GAAP adjustments.

Net sales on a constant currency basis excluding acquisitions and divestitures (organic growth): ScanSource 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 acquisitions and divestitures prior to the first full year from the transaction date. This measure enhances the comparability between periods to help analyze underlying trends on an organic basis.

Additional Non-GAAP Metrics: To evaluate current period performance on a more consistent basis with prior periods, ScanSource discloses non-GAAP SG&A expenses, non-GAAP operating income, non-GAAP operating income margin, and non-GAAP diluted earnings per share (non-GAAP diluted EPS). Non-GAAP results exclude amortization of intangible assets related to acquisitions, acquisition and divestiture costs, gain on sale of business, restructuring costs, and other non-GAAP adjustments. These year-over-year metrics include the translation impact of changes in foreign currency exchange rates. Non-GAAP metrics are useful in assessing and understanding ScanSource's operating performance, especially when comparing results with previous periods or forecasting performance for future periods.

Adjusted earnings before interest expense, income taxes, depreciation, and amortization (“Adjusted EBITDA”): Adjusted EBITDA starts with net income and adds back interest expense, income tax expense, depreciation expense, amortization of intangible assets, changes in fair value of contingent considerations, and other non-GAAP adjustments, including acquisition and divestiture costs, gain on sale of business, restructuring costs, cyberattack restoration costs, tax recovery, and non-cash share-based compensation expense. Since Adjusted EBITDA excludes some non-cash costs of investing in ScanSource’s business and people, management believes that Adjusted EBITDA shows the profitability from the business operations more clearly. The presentation for Adjusted EBITDA for all periods presented has been recast to reflect this change to enhance comparability between periods. The Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of net sales.

Adjusted return on invested capital ("Adjusted ROIC"): Adjusted ROIC assists management in comparing ScanSource'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. Management believes the calculation of Adjusted ROIC provides useful information to investors and is an additional relevant comparison of its performance. Adjusted ROIC is calculated as Adjusted EBITDA over invested capital. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period. Management believes the calculation of Adjusted ROIC provides useful information to investors and is an additional relevant comparison of ScanSource's performance during the year.

Free cash flow: ScanSource presents free cash flow as it believes this measure provides more information regarding liquidity and capital resources. Free cash flow is defined as cash flows from operating activities less capital expenditures.

These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that ScanSource 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 ScanSource's non-GAAP financial information to GAAP is set forth in the Supplementary Information (Unaudited) below.

About ScanSource, Inc.

ScanSource, Inc. (NASDAQ: SCSC) is a leading hybrid distributor connecting devices to the cloud and accelerating growth for customers across hardware, software as a service ("SaaS"), connectivity and cloud. ScanSource enables customers to deliver solutions for their end users to address changing buying and consumption patterns. ScanSource sells through multiple, specialized routes-to-market with hardware, SaaS, connectivity and cloud services offerings from the world’s leading suppliers of mobility and barcode, point-of-sale (POS), payments, networking, physical security, unified communications and collaboration, telecom and cloud services. Founded in 1992 and headquartered in Greenville, South Carolina, ScanSource was named one of the 2023 Best Places to Work in South Carolina and on FORTUNE magazine’s 2024 List of World’s Most Admired Companies. ScanSource ranks #817 on the Fortune 1000. For more information, visit www.scansource.com.

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands)

 

December 31, 2023

 

June 30, 2023*

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

44,987

 

 

$

36,178

 

Accounts receivable, less allowance of $19,243 at December 31, 2023 and $15,480 at June 30, 2023

 

662,799

 

 

 

753,236

 

Inventories

 

575,137

 

 

 

757,574

 

Prepaid expenses and other current assets

 

122,272

 

 

 

110,087

 

Total current assets

 

1,405,195

 

 

 

1,657,075

 

Property and equipment, net

 

36,546

 

 

 

37,379

 

Goodwill

 

208,214

 

 

 

216,706

 

Identifiable intangible assets, net

 

45,313

 

 

 

68,495

 

Deferred income taxes

 

19,478

 

 

 

17,764

 

Other non-current assets

 

66,059

 

 

 

70,750

 

Total assets

$

1,780,805

$

2,068,169

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

540,642

 

 

$

691,119

 

Accrued expenses and other current liabilities

 

58,460

 

 

 

78,892

 

Income taxes payable

 

3,653

 

 

 

9,875

 

Current portion of long-term debt

 

7,857

 

 

 

6,915

 

Total current liabilities

 

610,612

 

 

 

786,801

 

Deferred income taxes

 

 

 

 

3,816

 

Long-term debt, net of current portion

 

139,899

 

 

 

144,006

 

Borrowings under revolving credit facility

 

20,878

 

 

 

178,980

 

Other long-term liabilities

 

55,815

 

 

 

49,268

 

Total liabilities

 

827,204

 

 

 

1,162,871

 

Commitments and contingencies

 

 

 

Shareholders’ equity:

 

 

 

Preferred stock, no par value; 3,000,000 shares authorized, none issued

 

 

 

 

 

Common stock, no par value; 45,000,000 shares authorized, 25,154,469 and 24,844,203 shares issued and outstanding at December 31, 2023 and June 30, 2023, respectively

 

63,983

 

 

 

58,241

 

Retained earnings

 

984,836

 

 

 

936,678

 

Accumulated other comprehensive loss

 

(95,218

)

 

 

(89,621

)

Total shareholders’ equity

 

953,601

 

 

 

905,298

 

Total liabilities and shareholders’ equity

$

1,780,805

 

 

$

2,068,169

 

 

*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,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net sales

$

884,792

 

 

$

1,011,241

 

 

$

1,761,098

 

 

$

1,955,054

 

Cost of goods sold

 

784,044

 

 

 

895,907

 

 

 

1,553,842

 

 

 

1,726,236

 

Gross profit

 

100,748

 

 

 

115,334

 

 

 

207,256

 

 

 

228,818

 

Selling, general and administrative expenses

 

66,921

 

 

 

69,074

 

 

 

142,356

 

 

 

140,667

 

Depreciation expense

 

2,964

 

 

 

2,678

 

 

 

5,759

 

 

 

5,441

 

Intangible amortization expense

 

4,037

 

 

 

4,150

 

 

 

8,230

 

 

 

8,391

 

Operating income

 

26,826

 

 

 

39,432

 

 

 

50,911

 

 

 

74,319

 

Interest expense

 

3,359

 

 

 

5,060

 

 

 

8,945

 

 

 

8,507

 

Interest income

 

(2,119

)

 

 

(2,027

)

 

 

(3,444

)

 

 

(3,618

)

Gain on sale of business

 

(14,533

)

 

 

 

 

 

(14,533

)

 

 

 

Other expense, net

 

73

 

 

 

207

 

 

 

750

 

 

 

955

 

Income before income taxes

 

40,046

 

 

 

36,192

 

 

 

59,193

 

 

 

68,475

 

Provision for income taxes

 

7,320

 

 

 

10,458

 

 

 

11,035

 

 

 

18,699

 

Net income

$

32,726

 

 

$

25,734

 

 

$

48,158

 

 

$

49,776

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

Net income per common share, basic

$

1.31

 

 

$

1.02

 

 

$

1.93

 

 

$

1.97

 

Weighted-average shares outstanding, basic

 

25,035

 

 

 

25,287

 

 

 

24,961

 

 

 

25,244

 

 

 

 

 

 

 

 

 

Net income per common share, diluted

$

1.29

 

 

$

1.01

 

 

$

1.91

 

 

$

1.96

 

Weighted-average shares outstanding, diluted

 

25,334

 

 

 

25,502

 

 

 

25,235

 

 

 

25,454

 

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

Six months ended December 31,

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

Net income

$

48,158

 

 

$

49,776

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

Gain on sale of business

 

(14,533

)

 

 

 

Depreciation and amortization

 

14,475

 

 

 

14,285

 

Amortization of debt issue costs

 

193

 

 

 

385

 

Provision for doubtful accounts

 

4,472

 

 

 

33

 

Share-based compensation

 

5,340

 

 

 

5,679

 

Deferred income taxes

 

(1,703

)

 

 

932

 

Finance lease interest

 

46

 

 

 

24

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

75,579

 

 

 

(49,541

)

Inventories

 

182,168

 

 

 

(146,826

)

Prepaid expenses and other assets

 

(11,576

)

 

 

30,487

 

Other non-current assets

 

3,208

 

 

 

(7,168

)

Accounts payable

 

(135,138

)

 

 

33,820

 

Accrued expenses and other liabilities

 

(7,678

)

 

 

(13,268

)

Income taxes payable

 

(6,254

)

 

 

6,036

 

Net cash provided by (used in) operating activities

 

156,757

 

 

 

(75,346

)

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(4,865

)

 

 

(4,262

)

Proceeds from sale of business, net of cash transferred

 

17,978

 

 

 

 

Net cash provided by (used in) investing activities

 

13,113

 

 

 

(4,262

)

Cash flows from financing activities:

 

 

 

Borrowings on revolving credit, net of expenses

 

1,134,629

 

 

 

1,232,058

 

Repayments on revolving credit, net of expenses

 

(1,292,729

)

 

 

(1,137,897

)

Repayments on long-term debt, net

 

(3,165

)

 

 

(1,407

)

Borrowings (repayments) on finance lease obligation

 

(442

)

 

 

17,465

 

Debt issuance costs

 

 

 

 

(492

)

Exercise of stock options

 

4,309

 

 

 

634

 

Taxes paid on settlement of equity awards

 

(2,657

)

 

 

(2,332

)

Common stock repurchased

 

(1,251

)

 

 

 

Net cash (used in) provided by financing activities

 

(161,306

)

 

 

108,029

 

Effect of exchange rate changes on cash and cash equivalents

 

245

 

 

 

37

 

Increase in cash and cash equivalents

 

8,809

 

 

 

28,458

 

Cash and cash equivalents at beginning of period

 

36,178

 

 

 

37,987

 

Cash and cash equivalents at period end

 

44,987

 

 

$

66,445

 

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

(in thousands, except percentages)

 

 

 

 

Non-GAAP Financial Information:

 

Quarter ended December 31,

 

 

2023

 

 

 

2022

 

Adjusted return on invested capital ratio (Adjusted ROIC), annualized(a)

 

13.2

%

 

 

15.6

%

 

 

 

 

Reconciliation of Net Income to Adjusted EBITDA:

 

 

 

Net income (GAAP)

$

32,726

 

 

$

25,734

 

Plus: Interest expense

 

3,359

 

 

 

5,060

 

Plus: Income taxes

 

7,320

 

 

 

10,458

 

Plus: Depreciation and amortization

 

7,258

 

 

 

7,057

 

EBITDA (non-GAAP)

 

50,663

 

 

 

48,309

 

Plus: Tax recovery

 

(1,386

)

 

 

(2,858

)

Plus: Share-based compensation

 

2,571

 

 

 

3,364

 

Plus: Acquisition and divestiture costs

 

703

 

 

 

 

Plus: Cyberattack restoration costs

 

441

 

 

 

 

Plus: Gain on sale of business

 

(14,533

)

 

 

 

Adjusted EBITDA (numerator for Adjusted ROIC) (non-GAAP)

$

38,459

 

 

$

48,815

 

 

 

 

 

Invested Capital Calculations:

 

 

 

Equity – beginning of the quarter

$

915,253

 

 

$

827,004

 

Equity – end of the quarter

 

953,601

 

 

 

862,386

 

Plus: Share-based compensation, net

 

1,919

 

 

 

2,496

 

Plus: Cyberattack restoration costs, net

 

329

 

 

 

 

Plus: Divestiture costs

 

703

 

 

 

 

Plus: Tax recovery, net

 

(640

)

 

 

(1,886

)

Plus: Gain on sale of business

 

(14,533

)

 

 

 

Average equity

 

928,316

 

 

 

845,000

 

Average funded debt (b)

 

227,688

 

 

 

392,853

 

Invested capital (denominator for Adjusted ROIC) (non-GAAP)

$

1,156,004

 

 

$

1,237,853

 

 

 

 

 

(a) The annualized adjusted EBITDA amount is divided by days in the quarter times 365 days per year, or 366 days for leap year. There were 92 days in the current and prior-year quarter.

(b) Average funded debt is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt.

 

Quarter ended December 31,

 

Six months ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

GAAP operating cash flow

$

63,224

 

 

$

(26,885

)

 

$

156,757

 

 

$

(75,346

)

Less: Capital Expenditures

 

(2,549

)

 

 

(2,504

)

 

 

(4,865

)

 

 

(4,262

)

Free cash flow (non-GAAP)

$

60,675

 

 

$

(29,389

)

 

$

151,892

 

 

$

(79,608

)

 

 

 

 

 

 

 

 

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

 

 

 

 

Net Sales by Segment:

 

 

 

 

Quarter ended December 31,

 

 

 

 

2023

 

 

 

2022

 

 

% Change

Specialty Technology Solutions:

(in thousands)

 

 

Net sales, reported

$

520,651

 

 

 

627,548

 

 

(17.0

)%

Foreign exchange impact (a)

 

(886

)

 

 

 

 

 

Non-GAAP net sales

$

519,765

 

 

$

627,548

 

 

(17.2

)%

 

 

 

 

 

 

Modern Communications & Cloud:

 

 

 

 

 

Net sales, reported

$

364,141

 

 

$

383,693

 

 

(5.1

)%

Foreign exchange impact (a)

 

(4,323

)

 

 

 

 

 

Less: Divestitures

$

(1,628

)

 

$

(2,170

)

 

 

Non-GAAP net sales

$

358,190

 

 

$

381,523

 

 

(6.1

)%

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

Net sales, reported

$

884,792

 

 

$

1,011,241

 

 

(12.5

)%

Foreign exchange impact (a)

 

(5,209

)

 

 

 

 

 

Less: Divestitures

$

(1,628

)

 

$

(2,170

)

 

 

Non-GAAP net sales

$

877,955

 

 

$

1,009,071

 

 

(13.0

)%

 

 

 

 

 

 

(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, 2023 into U.S. dollars using the average foreign exchange rates for the quarter ended December 31, 2022.

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

 

 

 

 

 

 

Net Sales by Geography:

 

 

 

 

Quarter ended December 31,

 

 

 

 

2023

 

 

 

2022

 

 

% Change

United States and Canada:

(in thousands)

 

 

Net sales, as reported

$

795,382

 

 

$

909,221

 

 

(12.5

)%

 

 

 

 

 

 

International:

 

 

 

 

 

Net sales, reported

$

89,410

 

 

$

102,020

 

 

(12.4

)%

Foreign exchange impact(a)

 

(5,209

)

 

 

 

 

 

Less: Divestitures

 

(1,628

)

 

 

(2,170

)

 

 

Non-GAAP net sales

$

82,573

 

 

$

99,850

 

 

(17.3

)%

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

Net sales, reported

$

884,792

 

 

$

1,011,241

 

 

(12.5

)%

Foreign exchange impact(a)

 

(5,209

)

 

 

 

 

 

Less: Divestitures

 

(1,628

)

 

 

(2,170

)

 

 

Non-GAAP net sales

$

877,955

 

 

$

1,009,071

 

 

(13.0

)%

 

 

 

 

 

 

(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, 2023 into U.S. dollars using the average foreign exchange rates for the quarter ended December 31, 2022.

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended December 31, 2023

 

 

GAAP
Measure

 

Intangible
amortization
expense

 

Divestiture
costs

 

Tax recovery

 

Cyberattack
restoration
costs

 

Gain on sale
of business(a)

 

Non-GAAP
measure

 

(in thousands, except per share data)

SG&A expenses

 

$66,921

 

 

$(703)

 

$1,386

 

$(441)

 

 

$67,163

Operating income

 

26,826

 

4,037

 

703

 

(1,386)

 

441

 

 

30,621

Pre-tax income

 

40,046

 

4,037

 

703

 

(1,386)

 

441

 

(14,533)

 

29,308

Net income

 

32,726

 

3,002

 

703

 

(640)

 

329

 

(14,533)

 

21,587

Diluted EPS

 

$1.29

 

$0.12

 

$0.03

 

$(0.03)

 

$0.01

 

$(0.57)

 

$0.85

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended December 31, 2022

 

 

GAAP
Measure

 

Intangible
amortization
expense

 

Divestiture
costs

 

Tax recovery

 

Cyberattack
restoration
costs

 

Gain on sale
of business(a)

 

Non-GAAP
measure

 

(in thousands, except per share data)

SG&A expense

 

$69,074

 

 

 

$2,858

 

 

 

$71,932

Operating income

 

39,432

 

4,150

 

 

(2,858)

 

 

 

40,724

Pre-tax income

 

36,192

 

4,150

 

 

(2,858)

 

 

 

37,484

Net income

 

25,734

 

3,093

 

 

(1,886)

 

 

 

26,941

Diluted EPS

 

$1.01

 

$0.12

 

 

$(0.07)

 

 

 

$1.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Reflects gain on the sale of the UK-based intY business. This transaction resulted in a capital loss for tax purposes. ScanSource did not record a tax provision on the capital loss since there were no offsetting capital gains.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Financial Outlook for Fiscal Year 2024:

 

FY 24 Outlook

GAAP operating income

At least $111 million

Intangible amortization

$17 million

Depreciation expense

$12 million

Share-based compensation expense

$11 million

Interest income and income (expense), net

$4 million

Adjusted EBITDA (non-GAAP)

At least $155 million

 

 

GAAP operating cash flow

At least $210 million

Less: Capital expenditures

$10 million

Free cash flow (non-GAAP)

At least $200 million

 

Steve Jones
Senior EVP, Chief Financial Officer
ScanSource, Inc.
(864) 286-4302

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20240206017497/en/

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