EPS Exceeds Forecast Range
ScanSource, Inc. (NASDAQ: SCSC), a leading global provider of
technology products and solutions, today announced financial
results for the second quarter of its fiscal year 2017, which ended
December 31, 2016.
Quarter endedDecember
31,
Quarter endedSeptember
30,
Quarter endedDecember
31,
Year-over-
Year
Quarter-over-Quarter
2016 2016 2015
Change Change (in
millions, except per share data) Net sales $
904.8 $ 932.6 $ 993.5 (9 )% (3 )%
Operating income
23.3 22.9 31.9 (27 )% 2 %
Non-GAAP operating
income(1)
29.6 26.7 36.3 (18 )% 11 %
GAAP net
income 23.0 14.8 20.7 12 % 55 %
Non-GAAP net
income(1)
19.1 17.5 23.7 (20 )% 9 %
GAAP diluted
EPS $ 0.91 $ 0.58 $ 0.77 18 % 57 %
Non-GAAP
diluted EPS(1)
$ 0.75 $ 0.68 $ 0.88 (15 )% 10 %
(1) A reconciliation of non-GAAP financial information to
GAAP financial information is presented in the Supplementary
Information (Unaudited) below.
“We are pleased to deliver strong bottom-line results, despite
top-line growth challenges,” said Mike Baur, CEO, ScanSource, Inc.
"Our core business achieved better than expected profitability from
higher gross margins. In addition, the recurring revenues and
higher margins from our successful Intelisys acquisition led to
these strong results.”
For the second quarter of fiscal year 2017, net sales of $904.8
million decreased from $993.5 million in the prior year quarter and
$932.6 million in the sequential quarter. These decreases were
primarily due to lower sales volume in the Worldwide Barcode,
Networking and Security segment. Lower sales volume contributed to
the decrease in operating income to $23.3 million and non-GAAP
operating income to $29.6 million compared with the prior year
quarter. On a sequential quarter basis, the full quarter impact of
the addition of the Intelisys acquisition drove the increase in
both operating income and non-GAAP operating income. For the second
quarter of fiscal year 2017, other income included $12.8 million
pre-tax for a legal settlement, net of attorney fees.
On a GAAP basis, net income for the quarter totaled $23.0
million, or $0.91 per diluted share, compared with net income of
$20.7 million, or $0.77 per diluted share, for the prior year
quarter and net income of $14.8 million, or $0.58 per diluted
share, for the sequential quarter. Non-GAAP net income for the
second quarter of fiscal year 2017 totaled $19.1 million, or $0.75
per diluted share, representing decreases compared with the prior
year and increases compared with the sequential quarter.
Share Repurchase Update
In August 2016, ScanSource announced a new $120 million
three-year authorization by its Board of Directors to repurchase
shares of the Company’s common stock. Under this authorization
through December 31, 2016, the Company has repurchased
approximately 0.6 million shares for approximately $20.3
million.
Forecast for Next Quarter
For the third quarter of fiscal year 2017, ScanSource expects
net sales to range from $800 million to $860 million, diluted
earnings per share to range from $0.42 to $0.49 per share, and
non-GAAP diluted earnings per share to range from $0.62 to $0.69
per share. Non-GAAP diluted earnings per share exclude amortization
of intangibles and change in fair value of contingent
consideration.
Webcast Details
ScanSource will present additional information about its
financial results and outlook in a conference call with
presentation slides today, February 7, 2017 at 5:00 p.m. (ET).
A webcast of the call and accompanying presentation slides 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, including the forecast for next quarter,
contains “forward-looking” statements that involve risks and
uncertainties. Any number of important factors could cause actual
results to differ materially from anticipated or forecasted
results, including, but not limited to, expanded international
operations that expose the Company to greater risks than its
operations in domestic markets; risks in connection with the
Company's growth which includes strategic acquisitions; risks in
connection with compliance with laws and regulations governing the
Company's international business; risks associated with the
Company's reliance on key vendors; the ability to forecast
volatility in earnings resulting from the quarterly revaluation of
the Company's earnout obligations; utilization and further
implementation of the Company's ERP system; macroeconomic
circumstances that could impact the business, such as currency
fluctuations, credit market conditions, and an economic downturn;
expectations of market demand trends; the timing and amount of any
share repurchases; the exercise of discretion by the Company to
make any repurchase or continue the share repurchase authorization;
and changes to the source of funds for any repurchases. 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, 2016, and subsequent reports
on Form 10-Q, 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, and other non-GAAP
adjustments.
Net sales on a constant currency basis: The Company discloses
the percentage change in net sales excluding the translation impact
from changes in foreign currency exchange rates between reporting
periods. This measure enhances comparability between periods to
help analyze underlying trends.
Non-GAAP operating income, non-GAAP net income and non-GAAP EPS:
To evaluate current period performance on a more consistent basis
with prior periods, the Company discloses non-GAAP operating
income, non-GAAP net income and non-GAAP diluted earnings per
share. Non-GAAP results exclude amortization of intangible assets
related to acquisitions, change in the fair value of contingent
consideration, and other non-GAAP adjustments. Non-GAAP operating
income, non-GAAP net income, and non-GAAP EPS measures 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. 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.
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. In addition, the
Company's Board of Directors uses ROIC in evaluating business and
management performance. Certain management incentive compensation
targets are set and measured relative to ROIC.
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 global provider of
technology products and solutions, focusing on point-of-sale (POS),
barcode, physical security, video, voice, data networking and
technology services. ScanSource's teams provide value-added
solutions and operate from two segments, Worldwide Barcode,
Networking & Security and Worldwide Communications &
Services. ScanSource is committed to helping its resellers and
sales partners choose, configure and deliver the industry's best
solutions across almost every vertical market in North America,
Latin America and Europe. In August 2016, ScanSource entered the
recurring revenue telecom and cloud services market through its
acquisition of Intelisys, the industry's leading technology
services distributor. Founded in 1992, the Company is headquartered
in Greenville, South Carolina and was named one of the 2016 Best
Places to Work in South Carolina. ScanSource ranks #685 on the
Fortune 1000. For more information, visit www.scansource.com.
ScanSource, Inc. and Subsidiaries Condensed
Consolidated Balance Sheets (Unaudited) (in thousands)
December 31, 2016 June 30,
2016* Assets Current assets: Cash and cash equivalents $
45,071 $ 61,400 Accounts receivable, less allowance of $41,120 at
December 31, 2016 and $39,032 at June 30, 2016 620,588 559,557
Inventories 512,875 558,581 Prepaid expenses and other current
assets 72,130 49,367 Total current assets 1,250,664
1,228,905 Property and equipment, net 56,730 52,388 Goodwill
200,017 92,715 Net identifiable intangible assets 105,655 51,127
Deferred income taxes 27,829 28,813 Other non-current assets 39,762
37,237 Total assets $ 1,680,657 $ 1,491,185
Liabilities and Shareholders' Equity Current
liabilities: Accounts payable $ 476,339 $ 471,487 Accrued expenses
and other current liabilities 110,272 98,975 Current portion of
contingent consideration 32,799 11,594 Income taxes payable 9,886
3,056 Total current liabilities 629,296 585,112
Deferred income taxes 2,234 2,555 Long-term debt 5,429 5,429
Borrowings under revolving credit facility 136,237 71,427 Long-term
portion of contingent consideration 78,081 13,058 Other long-term
liabilities 41,844 39,108 Total liabilities 893,121
716,689 Shareholders' equity: Common stock 52,000 67,249 Retained
earnings 817,786 779,934 Accumulated other comprehensive income
(loss) (82,250 ) (72,687 ) Total shareholders' equity 787,536
774,496 Total liabilities and shareholders' equity $
1,680,657 $ 1,491,185 * 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, 2016
2015 2016 2015 Net sales $ 904,792 $ 993,522 $
1,837,357 $ 1,864,350 Cost of goods sold 806,258 892,889
1,647,289 1,676,166 Gross profit 98,534
100,633 190,068 188,184 Selling, general and administrative
expenses 73,468 66,965 141,957 128,510 Change in fair value of
contingent consideration 1,791 1,816 1,961
3,381 Operating income 23,275 31,852 46,150 56,293 Interest
expense 912 709 1,501 990 Interest income (892 ) (767 ) (1,908 )
(1,709 ) Other income (expense), net (12,526 ) 278 (11,948 )
958 Income before income taxes 35,781 31,632 58,505 56,054
Provision for income taxes 12,745 10,976 20,653
19,402 Net income $ 23,036 $ 20,656 $
37,852 $ 36,652 Per share data: Net income per common
share, basic $ 0.92 $ 0.78 $ 1.49 $ 1.35
Weighted-average shares outstanding, basic 25,146
26,648 25,334 27,175 Net income per
common share, diluted $ 0.91 $ 0.77 $ 1.48 $
1.34 Weighted-average shares outstanding, diluted 25,285
26,902 25,490 27,427
ScanSource, Inc. and Subsidiaries Supplementary
Information (Unaudited) Net
Sales by Segment: Quarter ended December 31, 2016
2015 % Change Worldwide Barcode,
Networking & Security: (in thousands) Net sales, as
reported $ 595,359 $ 689,530 (13.7 )% Foreign exchange impact (a)
(3,257 ) — Net sales, constant currency 592,102 689,530
(14.1 )% Less: Acquisitions — — Net sales, constant
currency excluding acquisitions $ 592,102 $ 689,530
(14.1 )%
Worldwide Communications & Services: Net
sales, as reported $ 309,433 $ 303,992 1.8 % Foreign exchange
impact (a) (2,557 ) — Net sales, constant currency 306,876
303,992 0.9 % Less: Acquisitions (8,487 ) — Net sales,
constant currency excluding acquisitions $ 298,389 $ 303,992
(1.8 )%
Consolidated: Net sales, as reported $
904,792 $ 993,522 (8.9 )% Foreign exchange impact (a) (5,814 ) —
Net sales, constant currency 898,978 993,522 (9.5 )% Less:
Acquisitions (8,487 ) — Net sales, constant currency
excluding acquisitions $ 890,491 $ 993,522 (10.4 )%
(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, 2016 into U.S. dollars using the weighted average
foreign exchange rates for the quarter ended December 31, 2015.
ScanSource,
Inc. and Subsidiaries Supplementary Information
(Unaudited) Net Sales by Segment: Six months
ended December 31, Worldwide Barcode, Networking &
Security: 2016 2015 % Change (in
thousands) Net sales, as reported $ 1,228,764 $ 1,263,199 (2.7
)% Foreign exchange impact (a) (6,380 ) — Net sales,
constant currency 1,222,384 1,263,199 (3.2 )% Less: Acquisitions
(99,332 ) (34,628 ) Net sales, constant currency excluding
acquisitions $ 1,123,052 $ 1,228,571 (8.6 )%
Worldwide Communications & Services: Net sales, as
reported $ 608,593 $ 601,151 1.2 % Foreign exchange impact (a)
(3,463 ) — Net sales, constant currency 605,130 601,151 0.7
% Less: Acquisitions (11,350 ) — Net sales, constant
currency excluding acquisitions $ 593,780 $ 601,151
(1.2 )%
Consolidated: Net sales, as reported $
1,837,357 $ 1,864,350 (1.4 )% Foreign exchange impact (a) (9,843 )
— Net sales, constant currency 1,827,514 1,864,350 (2.0 )%
Less: Acquisitions (110,682 ) (34,628 ) Net sales, constant
currency excluding acquisitions $ 1,716,832 $ 1,829,722
(6.2 )% (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 six
months ended December 31, 2016 into U.S. dollars using the weighted
average foreign exchange rates for the six months ended December
31, 2015.
ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
Net Sales by Geography: Quarter
ended December 31, 2016 2015 % Change
United States: (in thousands) Net sales, as reported
$ 667,818 $ 735,642 (9.2 )% Less: Acquisitions (8,487 ) —
Net sales, excluding acquisitions $ 659,331 $ 735,642
(10.4 )%
International: Net sales, as reported $
236,974 $ 257,880 (8.1 )% Foreign exchange impact (a) (5,814 ) —
Net sales, constant currency 231,160 257,880 (10.4 )% Less:
Acquisitions — — Net sales, constant currency
excluding acquisitions $ 231,160 $ 257,880 (10.4 )%
Consolidated: Net sales, as reported $ 904,792 $
993,522 (8.9 )% Foreign exchange impact (a) (5,814 ) — Net
sales, constant currency 898,978 993,522 (9.5 )% Less: Acquisitions
(8,487 ) — Net sales, constant currency excluding
acquisitions $ 890,491 $ 993,522 (10.4 )% (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, 2016
into U.S. dollars using the weighted average foreign exchange rates
for the quarter ended December 31, 2015.
ScanSource, Inc. and Subsidiaries Supplementary
Information (Unaudited)
Net Sales by Geography: Six months ended December
31, 2016 2015 % Change United
States: (in thousands) Net sales, as reported $
1,377,627 $ 1,377,572 — % Less: Acquisitions (110,682 ) (34,628 )
Net sales, excluding acquisitions $ 1,266,945 $ 1,342,944
(5.7 )%
International: Net sales, as reported
$ 459,730 $ 486,778 (5.6 )% Foreign exchange impact (a) (9,843 ) —
Net sales, constant currency 449,887 486,778 (7.6 )% Less:
Acquisitions — — Net sales, constant currency
excluding acquisitions $ 449,887 $ 486,778 (7.6 )%
Consolidated: Net sales, as reported $ 1,837,357 $
1,864,350 (1.4 )% Foreign exchange impact (a) (9,843 ) — Net
sales, constant currency 1,827,514 1,864,350 (2.0 )% Less:
Acquisitions (110,682 ) (34,628 ) Net sales, constant currency
excluding acquisitions $ 1,716,832 $ 1,829,722 (6.2
)% (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 six months ended
December 31, 2016 into U.S. dollars using the weighted average
foreign exchange rates for the six months ended December 31, 2015.
ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited) (in thousands,
except per share data)
Non-GAAP Financial Information:
Quarter ended December 31, 2016
Operatingincome
Pre-taxincome
Netincome
DilutedEPS
GAAP measure $ 23,275 $ 35,781 $ 23,036 $ 0.91 Adjustments:
Amortization of intangible assets 4,165 4,165 2,740 0.11 Change in
fair value of contingent consideration 1,791 1,791 1,000 0.04
Acquisition costs (a) 335 335 335 0.01 Legal settlement, net of
attorney fees — (12,777 ) (8,047 ) (0.32 ) Non-GAAP measure
$ 29,566 $ 29,295 $ 19,064 $ 0.75
Quarter ended September 30, 2016
Operatingincome
Pre-taxincome
Netincome
DilutedEPS
GAAP measure $ 22,875 $ 22,724 $ 14,816 $ 0.58 Adjustments:
Amortization of intangible assets 3,154 3,154 2,108 0.08 Change in
fair value of contingent consideration 169 169 46 — Acquisition
costs (a) 498 498 498 0.02 Non-GAAP
measure $ 26,696 $ 26,545 $ 17,468 $ 0.68
Quarter ended December 31, 2015
Operatingincome
Pre-taxincome
Netincome
DilutedEPS
GAAP measure $ 31,852 $ 31,632 $ 20,656 $ 0.77 Adjustments:
Amortization of intangible assets 2,545 2,545 1,732 0.06 Change in
fair value of contingent consideration 1,816 1,816 1,244 0.05
Acquisition costs (a) 60 60 60 —
Non-GAAP measure $ 36,273 $ 36,053 $
23,692
$ 0.88 (a) Acquisition costs are
non-deductible for tax purposes.
ScanSource, Inc.
and Subsidiaries Supplementary Information (Unaudited)
(in thousands, except percentages)
Non-GAAP Financial Information:
Quarter endedDecember
31,
Six months endedDecember
31,
2016 2015 2016 2015 Return on invested
capital (ROIC), annualized (a) 13.8 % 17.5 % 13.4 % 15.9 %
Reconciliation of
Net Income to Adjusted EBITDA
Net income - GAAP $ 23,036 $ 20,656 $ 37,852 $ 36,652 Plus:
Interest expense 912 709 20,653 19,402 Plus: Income taxes 12,745
10,976 1,501 990 Plus: Depreciation and amortization 6,588
4,351 11,812 8,289 EBITDA 43,281 36,692 71,818
65,333 Adjustments: Change in fair value of contingent
consideration 1,791 1,816 1,961 3,381 Acquisition costs 335 60 833
281 Legal settlement, net of attorney fees (12,777 ) —
(12,777 ) $ — Adjusted EBITDA (numerator for ROIC)
(non-GAAP) $ 32,630 $ 38,568 $ 61,835 $ 68,995
Invested Capital
Calculation
Equity - beginning of quarter $ 773,161 $ 764,693 $ 774,496 $
808,985 Equity - end of quarter 787,536 754,794 787,536 754,794
Adjustments: Change in fair value of contingent consideration, net
of tax 1,000 1,244 1,046 2,324 Acquisition costs, net of tax 335 60
833 281 Legal settlement, net of attorney fees, net of tax (8,047 )
— (8,047 ) — Average equity 776,993 760,396 777,932
783,192 Average funded debt (b) 162,483 117,421
135,101 78,273 Invested capital (denominator for
ROIC) (non-GAAP) $ 939,476 $ 877,817 $ 913,033
$ 861,465 (a) Calculated as net income
plus interest expense, income taxes, depreciation and amortization
(EBITDA), plus change in fair value of contingent consideration and
other adjustments, annualized and divided by invested capital for
the period. Invested capital is defined as average equity plus
average daily funded interest-bearing debt for the period. (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)
Non-GAAP Financial Information:
Forecast for quarterending March
31, 2017
Range Low Range High GAAP diluted EPS $ 0.42 $ 0.49
Adjustments: Amortization of intangible assets 0.11 0.11 Change in
fair value of contingent consideration 0.09 0.09 Non-GAAP
diluted EPS $ 0.62 $ 0.69
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170207006415/en/
ScanSource, Inc.Gerald Lyons, 864-286-4854Senior Vice President,
Interim Chief Financial OfficerorMary M. Gentry, 864-286-4892Vice
President, Treasurer and Investor Relations
ScanSource (NASDAQ:SCSC)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
ScanSource (NASDAQ:SCSC)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024