ScanSource, Inc. (NASDAQ: SCSC), a leading hybrid distributor
connecting devices to the cloud, today announced financial results
for the fourth quarter ended June 30, 2023.
Fourth Quarter Summary
Fiscal Year Summary
Q4 FY23
Q4 FY22
Change
FY23
FY22
Change
(in thousands, except per
share data)
Select reported measures:
Net sales
$
947,149
$
962,283
-1.6
%
$
3,787,721
$
3,529,935
7.3
%
Gross profit
$
108,659
$
110,792
-1.9
%
$
449,239
$
426,524
5.3
%
Gross profit margin %
11.47
%
11.51
%
-4bp
11.86
%
12.08
%
-22bp
Operating income
$
27,289
$
27,424
-0.5
%
$
135,886
$
122,167
11.2
%
GAAP net income
$
17,095
$
19,947
-14.3
%
$
88,092
$
88,698
-0.7
%
GAAP diluted EPS
$
0.68
$
0.78
-12.8
%
$
3.47
$
3.44
0.9
%
Select Non-GAAP measures:
Adjusted EBITDA
$
40,199
$
38,672
3.9
%
$
179,943
$
166,723
7.9
%
Adjusted EBITDA margin %
4.24
%
4.02
%
22bp
4.75
%
4.72
%
3bp
Non-GAAP net income
$
19,213
$
23,266
-17.4
%
$
97,688
$
102,140
-4.4
%
Non-GAAP diluted EPS
$
0.76
$
0.91
-16.5
%
$
3.85
$
3.97
-3.0
%
“As we enter our new fiscal year, strong free cash flow and
focus on Intelisys are keys to our success,” said Mike Baur,
Chairman and CEO, ScanSource, Inc. “Now that the supply chain
challenges are behind us, we are normalizing our working capital to
meet our margin expectations and market demand.”
Quarterly Results
Net sales for the fourth quarter of fiscal year 2023 totaled
$947.1 million, down 1.6% year-over-year. Fourth quarter fiscal
year 2023 sales and execution reinforce the resilience of
ScanSource’s business amid a cyberattack that impacted the
Company’s core systems for its hardware business. Specialty
Technology Solutions net sales for the fourth quarter decreased
3.3% year-over-year to $561.5 million. Strength in networking and
security partially offset the lost sales from the cyberattack and a
slowdown in mobility and barcoding. Modern Communications &
Cloud net sales for the fourth quarter increased 1.0%
year-over-year to $385.6 million, led by growth in Cisco products.
Intelisys net billings increased to approximately $2.47 billion
annualized, and Intelisys net sales for fourth quarter increased 8%
year-over-year.
Gross profit for the fourth quarter of fiscal year 2023
decreased 1.9% year-over-year to $108.7 million. Gross profit
margin for the fourth quarter was 11.47% versus 11.51% in the
prior-year quarter.
For the fourth quarter of fiscal year 2023, operating income was
$27.3 million compared to $27.4 million in the prior-year quarter.
Fourth quarter fiscal year 2023 non-GAAP operating income increased
to $32.8 million for a 3.46% non-GAAP operating income margin, up
from $31.9 million for the prior-year quarter.
On a GAAP basis, net income for the fourth quarter of fiscal
year 2023 totaled $17.1 million, or $0.68 per diluted share,
compared to net income of $19.9 million, or $0.78 per diluted
share, for the prior-year quarter. Fourth quarter fiscal year 2023
non-GAAP net income totaled $19.2 million, or $0.76 per diluted
share, down from $23.3 million, or $0.91 per diluted share, for the
prior-year quarter. Interest expense increased to $5.6 million, up
significantly from $1.9 million for the prior-year quarter,
reflecting higher interest rates and higher borrowings.
Adjusted EBITDA for the fourth quarter of fiscal year 2023
increased 3.9% to $40.2 million, or 4.24% of net sales, compared to
$38.7 million, or 4.02% of net sales, for the prior-year
quarter.
Full-Year Results
For fiscal year 2023, net sales increased 7.3% to $3.8 billion,
or a 7.2% year-over-year increase on an organic basis. Fiscal year
2023 net sales in the Specialty Technology Solutions segment
increased 11.9% to $2.3 billion, led by growth in networking,
security, and barcoding. Fiscal year 2023 net sales in the Modern
Communications & Cloud segment increased 0.6% year-over-year to
$1.5 billion led by growth in Cisco products.
Gross profit for the fiscal year 2023 totaled $449.2 million, up
5.3% year-over-year. The increase is primarily due to higher sales
volume compared to the prior year. Gross profit margin decreased to
11.9%, down from 12.1% in the prior year.
For the fiscal year ended June 30, 2023, operating income
increased to $135.9 million from $122.2 million in the prior year.
Fiscal year 2023 non-GAAP operating income increased to $151.1
million for a 3.99% non-GAAP operating income margin, up from
$140.1 million for the prior year.
On a GAAP basis, net income for the fiscal year ended June 30,
2023 totaled $88.1 million, or $3.47 per diluted share, compared to
net income of $88.7 million, or $3.44 per diluted share for the
prior year. Fiscal year 2023 non-GAAP net income totaled $97.7
million, or $3.85 per diluted share, compared to $102.1 million, or
$3.97 per diluted share for the prior year. Interest expense
increased to $19.8 million, up significantly from $6.5 million for
the prior year, reflecting higher interest rates and higher
borrowings.
Adjusted EBITDA for the fiscal year ended June 30, 2023
increased to $179.9 million, or 4.75% of net sales, compared to
$166.7 million, or 4.72%, of net sales for the prior-year.
Annual Financial Outlook for Fiscal Year 2024
The following guidance is based on ScanSource's current
expectations for the full fiscal year ended June 30, 2024.
FY24 Annual Outlook
Net sales growth, year-over-year
At least 3%
Adjusted EBITDA (Non-GAAP)
At least $180 million
Free cash flow
At least $150 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.
Fourth Quarter Cyberattack
On May 14, 2023, ScanSource discovered it was subject to a
cyberattack that impacted some of its systems. Upon detection, the
Company immediately launched its incident response plan. Thanks to
the exceptional work of ScanSource’s employees, in conjunction with
external cybersecurity experts, the Company’s core systems were
restored, and operations resumed on May 26, 2023.
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 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 business in a
conference call today, August 22, 2023, 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 the Company'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 the
Company's organic growth strategy, credit risks involving the
Company's larger customers and suppliers, changes in interest and
exchange rates and regulatory regimes impacting the Company's
international operations, economic weakness and inflation, risk to
our business from a cyberattack, a failure of our IT systems,
failure to hire and retain quality employees, loss of the Company's
major customers, relationships with our key suppliers and customers
or a termination or a modification of the terms under which it
operates with these key suppliers, 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, 2023. 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 acquisitions
(organic growth): 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 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.
Additional Non-GAAP Metrics: To evaluate current period
performance on a more consistent basis with prior periods, the
Company 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, changes
in fair value of contingent consideration, acquisition and
divestiture costs, impairment charges, 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
the Company'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,
impairment charges, 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
our business and people, management believes that Adjusted EBITDA
shows the profitability from our 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 the Company's performance over
various reporting periods on a consistent basis because it removes
from our operating results the impact of items that do not reflect
our core operating performance. We believe the calculation of
Adjusted ROIC provides useful information to investors and is an
additional relevant comparison of our 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 the Company's
performance during the year.
Free cash flow: We present free cash flow as we believe this
measure provides more information regarding our 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 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 a leading hybrid distributor
connecting devices to the cloud and accelerating growth for
customers across hardware, 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 point-of-sale (POS), payments, barcode, 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 2023 List of
World’s Most Admired Companies. ScanSource ranks #773 on the
Fortune 1000. For more information, visit www.scansource.com.
ScanSource, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets (Unaudited)
(in thousands)
June 30, 2023
June 30, 2022*
Assets
Current assets:
Cash and cash equivalents
$
36,178
$
37,987
Accounts receivable, less allowance of
$15,480 at June 30, 2023 and $16,806 at June 30, 2022
753,236
729,442
Inventories
757,574
614,814
Prepaid expenses and other current
assets
110,087
141,562
Total current assets
1,657,075
1,523,805
Property and equipment, net
37,379
37,477
Goodwill
216,706
214,435
Identifiable intangible assets, net
68,495
84,427
Deferred income taxes
17,764
15,668
Other non-current assets
70,750
61,616
Total assets
$
2,068,169
$
1,937,428
Liabilities and
Shareholders’ Equity
Current liabilities:
Accounts payable
$
691,119
$
714,177
Accrued expenses and other current
liabilities
78,892
88,455
Income taxes payable
9,875
34
Current portion of long-term debt
6,915
11,598
Total current liabilities
786,801
814,264
Deferred income taxes
3,816
3,144
Long-term debt, net of current portion
144,006
123,733
Borrowings under revolving credit
facility
178,980
135,839
Other long-term liabilities
49,268
53,920
Total liabilities
1,162,871
1,130,900
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, 24,844,203 and 25,187,351 shares issued and
outstanding at June 30, 2023 and June 30, 2022, respectively
58,241
64,297
Retained earnings
936,678
846,869
Accumulated other comprehensive loss
(89,621
)
(104,638
)
Total shareholders’ equity
905,298
806,528
Total liabilities and shareholders’
equity
$
2,068,169
$
1,937,428
*Derived from audited financial
statements.
ScanSource, Inc. and
Subsidiaries
Condensed Consolidated Income
Statements (Unaudited)
(in thousands, except per
share data)
Quarter ended June 30,
Fiscal year ended June
30,
2023
2022
2023
2022
Net sales
$
947,149
$
962,283
$
3,787,721
$
3,529,935
Cost of goods sold
838,490
851,491
3,338,482
3,103,411
Gross profit
108,659
110,792
449,239
426,524
Selling, general and administrative
expenses
74,358
75,905
285,695
275,442
Depreciation expense
2,827
3,023
10,912
11,062
Intangible amortization expense
4,185
4,440
16,746
17,853
Operating income
27,289
27,424
135,886
122,167
Interest expense
5,564
1,886
19,786
6,523
Interest income
(2,085
)
(1,360
)
(7,414
)
(4,333
)
Other expense, net
348
684
1,664
1,354
Income before income taxes
23,462
26,214
121,850
118,623
Provision for income taxes
6,367
6,267
33,758
29,925
Net income from continuing operations
17,095
19,947
88,092
88,698
Net income from discontinued
operations
1,717
—
1,717
100
Net income
$
18,812
$
19,947
$
89,809
$
88,798
Per share data:
Net income from continuing operations per
common share, basic
$
0.69
$
0.79
$
3.50
$
3.48
Net income from discontinued operations
per common share, basic
0.07
—
0.07
—
Net income per common share, basic
$
0.76
$
0.79
$
3.57
$
3.48
Weighted-average shares outstanding,
basic
24,883
25,286
25,142
25,504
Net income from continuing operations per
common share, diluted
$
0.68
$
0.78
$
3.47
$
3.44
Net income from discontinued operations
per common share, diluted
0.07
—
0.07
—
Net income per common share, diluted
$
0.75
$
0.78
$
3.54
$
3.45
Weighted-average shares outstanding,
diluted
25,139
25,584
25,362
25,758
ScanSource, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows (Unaudited)
(in thousands)
Quarter ended June 30,
Fiscal year ended June
30,
2023
2022
2023
2022
Cash flows from operating activities:
Net income
$
18,812
$
19,947
$
89,809
$
88,798
Net income (loss) from discontinued
operations
1,717
—
1,717
100
Net income from continuing operations
17,095
19,947
88,092
88,698
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization
7,256
7,701
28,614
29,884
Amortization of debt issue costs
96
104
577
417
Provision for doubtful accounts
933
1,357
2,785
1,514
Share-based compensation
2,586
2,872
11,219
11,663
Deferred income taxes
(2,905
)
3,742
(1,496
)
5,737
Finance lease interest
12
1
44
34
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable
(64,020
)
(98,535
)
(17,368
)
(165,939
)
Inventories
(2,057
)
(27,613
)
(138,313
)
(145,962
)
Prepaid expenses and other assets
(6,526
)
(12,369
)
32,653
(27,371
)
Other non-current assets
(5,810
)
3,914
(7,582
)
1,123
Accounts payable
30,061
15,434
(30,656
)
82,969
Accrued expenses and other liabilities
2,587
7,876
(14,195
)
(4,869
)
Income taxes payable
5,431
(3,115
)
9,857
(2,252
)
Net cash used in operating activities
(15,261
)
(78,684
)
(35,769
)
(124,354
)
Cash flows from investing activities:
Capital expenditures
(3,431
)
(3,523
)
(9,979
)
(6,849
)
Cash received for business disposal
1,717
—
1,717
3,125
Net cash used in investing activities
(1,714
)
(3,523
)
(8,262
)
(3,724
)
Cash flows from financing activities:
Borrowings on revolving credit, net of
expenses
627,257
569,139
2,499,166
2,166,409
Repayments on revolving credit, net of
expenses
(607,470
)
(477,593
)
(2,456,025
)
(2,030,569
)
Borrowings (repayments) on long-term debt,
net
(938
)
(1,875
)
15,590
(7,843
)
Repayments on finance lease obligation
23
(306
)
(589
)
(1,238
)
Debt issuance costs
—
—
(1,407
)
—
Exercise of stock options
57
712
910
2,304
Taxes paid on settlement of equity
awards
(30
)
(26
)
(2,463
)
(2,754
)
Common stock repurchased
(4,933
)
(9,676
)
(15,651
)
(18,203
)
Net cash provided by financing
activities
13,966
80,375
39,531
108,106
Effect of exchange rate changes on cash
and cash equivalents
1,813
(3,721
)
2,691
(4,759
)
Decrease in cash and cash equivalents
(1,196
)
(5,553
)
(1,809
)
(24,731
)
Cash and cash equivalents at beginning of
period
37,374
43,539
37,987
62,718
Cash and cash equivalents at period
end
$
36,178
$
37,986
$
36,178
$
37,987
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
(in thousands, except
percentages)
Non-GAAP Financial Information:
Quarter ended June 30,
Fiscal year ended June
30,
2023
2022
2023
2022
Adjusted return on invested capital ratio
(Adjusted ROIC), annualized(a)
12.9
%
14.9
%
14.6
%
17.0
%
Reconciliation of Net Income to
Adjusted EBITDA:
Net income (GAAP)
$
17,095
$
19,947
$
88,092
$
88,698
Plus: Interest expense
5,564
1,886
19,786
6,523
Plus: Income taxes
6,367
6,267
33,758
29,925
Plus: Depreciation and amortization
7,255
7,700
28,614
29,884
EBITDA (non-GAAP)
36,281
35,800
170,250
155,030
Plus: Share-based compensation
2,586
2,872
11,219
11,663
Plus: Tax recovery
(128
)
—
(2,986
)
—
Plus: Cyberattack restoration costs
1,460
—
1,460
—
Plus: Acquisition and divestiture
costs
—
—
—
30
Adjusted EBITDA (numerator for Adjusted
ROIC) (non-GAAP)
$
40,199
$
38,672
$
179,943
$
166,723
Invested Capital Calculations:
Equity – beginning of the quarter
$
878,895
$
806,654
$
806,528
$
731,191
Equity – end of the quarter
905,298
806,528
905,298
806,528
Plus: Share-based compensation, net
1,921
2,134
8,326
8,709
Plus: Cyberattack restoration costs
1,092
—
1,092
—
Plus: Divestiture costs
—
—
—
30
Plus: Discontinued operations net
income
(1,717
)
—
(1,717
)
(100
)
Plus: Tax recovery, net
(2,100
)
—
(3,985
)
—
Average equity
891,695
807,658
857,771
773,179
Average funded debt (b)
361,792
233,445
372,235
209,114
Invested capital (denominator for Adjusted
ROIC) (non-GAAP)
$
1,253,487
$
1,041,103
$
1,230,006
$
982,293
(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 91 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.
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
Net Sales by Segment:
Quarter ended June 30,
2023
2022
% Change
Specialty Technology Solutions:
(in thousands)
Net sales, reported
$
561,501
$
580,619
(3.3
)%
Foreign exchange impact (a)
76
—
Non-GAAP net sales, constant currency
$
561,577
$
580,619
(3.3
)%
Modern Communications &
Cloud:
Net sales, reported
$
385,648
$
381,664
1.0
%
Foreign exchange impact (a)
139
—
Non-GAAP net sales, constant currency
$
385,787
$
381,664
1.1
%
Consolidated:
Net sales, reported
$
947,149
$
962,283
(1.6
)%
Foreign exchange impact (a)
215
—
Non-GAAP net sales, constant currency
$
947,364
$
962,283
(1.6
)%
(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 June 30, 2023 into U.S. dollars using the average
foreign exchange rates for the quarter ended June 30, 2022.
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
Net Sales by Segment:
Fiscal year ended June
30,
2023
2022
% Change
Specialty Technology Solutions
(in thousands)
Net sales, reported
$
2,331,030
$
2,082,321
11.9
%
Foreign exchange impact (a)
(923
)
—
Non-GAAP net sales, constant currency
$
2,330,107
$
2,082,321
11.9
%
Modern Communications &
Cloud
Net sales, reported
$
1,456,691
$
1,447,614
0.6
%
Foreign exchange impact (a)
(3,492
)
—
Non-GAAP net sales, constant currency
$
1,453,199
$
1,447,614
0.4
%
Consolidated:
Net sales, reported
$
3,787,721
$
3,529,935
7.3
%
Foreign exchange impact (a)
(4,415
)
—
Non-GAAP net sales, constant currency
$
3,783,306
$
3,529,935
7.2
%
(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
fiscal year ended June 30, 2023 into U.S. dollars using the average
foreign exchange rates for the fiscal year ended June 30, 2022.
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
Net Sales by Geography:
Quarter ended June 30,
2023
2022
% Change
United States and Canada:
(in thousands)
Net sales, as reported
$
854,521
$
865,736
(1.3
)%
International:
Net sales, reported
$
92,628
$
96,547
(4.1
)%
Foreign exchange impact(a)
215
—
Non-GAAP net sales, constant currency
$
92,843
$
96,547
(3.8
)%
Consolidated:
Net sales, reported
$
947,149
$
962,283
(1.6
)%
Foreign exchange impact(a)
215
—
Non-GAAP net sales, constant currency
$
947,364
$
962,283
(1.6
)%
(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 June 30, 2023 into U.S. dollars using the average
foreign exchange rates for the quarter ended June 30, 2022.
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
Net Sales by Geography:
Fiscal year ended June
30,
2023
2022
% Change
United States and Canada:
(in thousands)
Net sales, as reported
$
3,432,074
$
3,173,694
8.1
%
International:
Net sales, reported
$
355,647
$
356,241
(0.2
)%
Foreign exchange impact(a)
(4,415
)
—
Non-GAAP net sales, constant currency
$
351,232
$
356,241
(1.4
)%
Consolidated:
Net sales, reported
$
3,787,721
$
3,529,935
7.3
%
Foreign exchange impact(a)
(4,415
)
—
Non-GAAP net sales, constant currency
$
3,783,306
$
3,529,935
7.2
%
(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
fiscal year ended June 30, 2023 into U.S. dollars using the average
foreign exchange rates for the fiscal year ended June 30, 2022.
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
(in thousands, except per
share data)
Non-GAAP Financial Information:
Quarter ended June 30,
2023
GAAP Measure
Intangible amortization
expense
Tax recovery
Cyberattack restoration
costs
Non-GAAP measure
(in thousands, except per
share data)
SG&A expenses
$74,358
—
$128
$(1,460)
$73,026
Operating income
27,289
4,185
(128)
1,460
32,806
Operating income margin
2.88%
0.44%
(0.01)%
0.15%
3.46%
Net income
17,095
3,126
(2,100)
1,092
19,213
Diluted EPS
$0.68
$0.12
$(0.08)
$0.04
$0.76
Quarter ended June 30,
2022
GAAP Measure
Intangible amortization
expense
Tax recovery
Cyberattack restoration
costs
Non-GAAP measure
(in thousands, except per
share data)
SG&A expense
$75,905
—
—
—
$75,905
Operating income
27,424
4,440
—
—
31,864
Operating income margin
2.85%
0.46%
—%
—%
3.31%
Net income
19,947
3,319
—
—
23,266
Diluted EPS
$0.78
$0.13
—
—
$0.91
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
(in thousands, except per
share data)
Non-GAAP Financial Information:
Year ended June 30,
2023
Reported GAAP measure
Intangible amortization
expense
Acquisition, divestiture and
restructuring costs
Tax recovery, net
Cyberattack restoration
costs
Non-GAAP measure
(in thousands, except per
share data)
SG&A expenses
$285,695
—
—
$2,986
$(1,460)
$287,221
Operating income
135,886
16,746
—
(2,986)
1,460
151,106
Operating income margin
3.59%
0.44%
—%
(0.08)%
0.04%
3.99%
Net income
88,092
12,489
—
(3,985)
1,092
97,688
Diluted EPS
$3.47
$0.49
—
$(0.16)
$0.04
$3.85
Year ended June 30,
2022
Reported GAAP measure
Intangible amortization
expense
Acquisition, divestiture and
restructuring costs(a)
Tax recovery, net
Cyberattack restoration
costs
Non-GAAP measure
(in thousands, except per
share data)
SG&A expenses
$275,442
—
$(30)
—
—
$275,412
Operating income
122,167
17,853
30
—
—
140,050
Operating income margin
3.46%
0.51%
—%
—%
—%
3.97%
Net income
88,698
13,412
30
—
—
102,140
Diluted EPS
$3.44
$0.52
—
—
—
$3.97
(a) Divestiture costs totaled less than
$0.1 million for the fiscal year ended June 30, 2022 and are
generally nondeductible for tax purposes.
Annual Financial Outlook for Fiscal Year 2024:
FY 24 Outlook
GAAP operating income
At least $134 million
Intangible amortization
$17 million
Depreciation expense
$12 million
Share-based compensation
expense
$12 million
Interest income and income (expense),
net
$5 million
Adjusted EBITDA (non-GAAP)
At least $180 million
GAAP operating cash flow
At least $160 million
Less: Capital expenditures
$10 million
Free cash flow
At least $150 million
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230822790181/en/
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
ScanSource (NASDAQ:SCSC)
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