SCSC ScanSource Inc

ScanSource, Inc. (NASDAQ:SCSC), a leading international distributor of AIDC (automatic identification and data capture), point of sale, communications, and electronic security products for the reseller market, today announced complete financial results for its third quarter ended March 31, 2010.

Quarter Ended March 31, 2010:

 

Net sales

 

$496 million

Net income

$12.0 million

Diluted EPS

$0.45 per share

“We were pleased with the improving widespread demand in our POS/AIDC business; however, revenues were less than expected due to product shortages,” said Mike Baur, CEO, ScanSource, Inc. “Although our Communications business had significant year over year revenue growth, the March quarter demand was weaker than expected.”

For the quarter ended March 31, 2010, net sales increased 27.3% to $496 million compared to $390 million for the quarter ended March 31, 2009. Operating income also increased by 25.5% to $19.0 million from $15.1 million in the comparable prior year quarter. Net income increased 30.2% to $12.0 million for the quarter ended March 31, 2010 versus $9.2 million for the quarter ended March 31, 2009. The effective tax rate for the quarter was 36.5%, compared to 37.6% for the prior year quarter. Diluted earnings per share increased 28.6% to $0.45 in the current quarter compared to $0.35 in the prior year quarter.

Outlook for Next Quarter

The Company announced its net revenue outlook for the fourth quarter of fiscal 2010. ScanSource expects net revenues for the June 2010 quarter could range from $530 million to $550 million.

Safe Harbor Statement

This press release contains comments that are “forward looking” statements that involve risks and uncertainties; these statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. The statements in this press release are made as of the date hereof even if subsequently made available on ScanSource’s website or otherwise. ScanSource does not assume any obligation to update the forward looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. Any number of important factors could cause actual results to differ materially from anticipated results, including, but not limited to macroeconomic circumstances that could impact our business, such as currency fluctuations, continued adverse capital and credit market conditions and a prolonged economic downturn. For more information concerning factors that could cause actual results to differ from anticipated results, see the Company’s annual report on Form 10-K for the year ended June 30, 2009 filed with the Securities and Exchange Commission.

About ScanSource

ScanSource, Inc. (NASDAQ:SCSC) is a leading international distributor of specialty technology products, consisting of seven sales units in North America, Latin America and Europe.

ScanSource POS and Barcoding in North America, Latin America and Europe delivers AIDC and POS solutions; Catalyst Telecom in the U.S. and ScanSource Communications in North America and Europe, provide voice, video and converged communications equipment; and ScanSource Security in North America offers physical security solutions. Founded in 1992, the company ranks #854 on the Fortune 1000. For more information, call the toll-free sales telephone number at 800.944.2432 or visit www.scansourceinc.com.

      ScanSource, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) (in thousands)   March 31, June 30, 2010  

2009/a

Assets Current assets: Cash and cash equivalents $ 29,677 $ 127,664 Trade & notes receivable 326,773 291,037 Other receivables 5,624 7,676 Inventories 312,532 216,829 Prepaid expenses and other assets 13,155 10,356 Deferred income taxes   7,881     8,735 Total current assets 695,642 662,297   Property and equipment, net 22,677 21,035 Goodwill 33,219 34,087 Other assets, including identifiable intangible assets   35,259     31,212 Total assets $ 786,797   $ 748,631   Liabilities and Shareholders' Equity Current liabilities: Current portion of long-term debt $ - $ - Trade accounts payable 225,695 228,408 Accrued expenses and other liabilities 35,217 30,443 Income taxes payable   4,317     3,799 Total current liabilities 265,229 262,650   Deferred income taxes - - Long-term debt 30,429 30,429 Borrowings under revolving credit facility - - Other long-term liabilities   12,956     10,106 Total liabilities   308,614     303,185   Shareholder's equity: Common stock 109,790 104,461 Retained earnings 372,585 337,822 Accumulated other comprehensive income   (4,192 )   3,163 Total shareholders' equity   478,183     445,446 Total liabilities and shareholders' equity $ 786,797   $ 748,631  

/a: Derived from audited financial statements at June 30, 2009.

        ScanSource, Inc. and Subsidiaries Condensed Consolidated Income Statements (Unaudited) (in thousands, except per share information)   Quarter ended Nine months ended March 31, March 31, 2010   2009   2010   2009     Net sales $ 496,102 $ 389,815 $ 1,532,637 $ 1,406,733 Cost of goods sold   441,711     342,280     1,370,532     1,251,368   Gross profit   54,391     47,535     162,105     155,365     Operating expenses: Selling, general and administrative expenses   35,414     32,418     107,312     101,225   Operating income 18,977 15,117 54,793 54,140   Other expense (income): Interest expense 377 609 1,107 1,810 Interest income (474 ) (344 ) (1,159 ) (1,119 ) Other, net   156     54     99     (2,228 ) Other expense (income)   59     319     47     (1,537 ) Income before income taxes 18,918 14,798 54,746 55,677 Provision for income taxes   6,904     5,569     19,982     20,493   Net income $ 12,014   $ 9,229   $ 34,764   $ 35,184     Per share data: Net income per common share, basic $ 0.45   $ 0.35   $ 1.31   $ 1.33   Weighted-average shares outstanding, basic   26,608     26,463     26,583     26,412     Net income per common share, diluted $ 0.45   $ 0.35   $ 1.30   $ 1.32   Weighted-average shares outstanding, diluted   26,884     26,565     26,844     26,572