Outstanding execution of growth opportunities;
quarterly net sales up 34% year-over-year
Initiates annual financial outlook for FY22
Announces new $100 million share repurchase
authorization
ScanSource, Inc. (NASDAQ: SCSC), a leading provider of
technology products and solutions, today announced financial
results for the fourth quarter and fiscal year ended June 30, 2021.
All results in this release reflect continuing operations only
unless otherwise noted.
Fourth Quarter Summary:
- Net sales: $852.7 million, up 34% year-over-year
- Gross profit: $95.8 million, up 29% year-over-year
- GAAP operating income of $23.3 million for a 2.73% operating
income margin
- Non-GAAP operating income of $28.4 million, up 245%
year-over-year, for a 3.33% non-GAAP operating income margin
- Net income from continuing operations of $20.7 million
- GAAP diluted EPS of $0.80 per share; non-GAAP diluted EPS of
$0.96 per share
- Generated strong operating cash flow of $61.3 million for the
quarter and $116.8 million for the fiscal year
- Return on invested capital increased to 14.9% for the
quarter
“Our employees delivered strong fourth quarter net sales and
profitability growth with operational excellence across our
business,” said Mike Baur, Chairman and CEO, ScanSource, Inc. “Our
momentum and execution strengthen our confidence in our hybrid
distribution strategy accelerating our growth across hardware,
software, connectivity, and cloud. ScanSource is uniquely
positioned to enable the growth opportunities ahead for our channel
partners and suppliers.”
Quarterly Results
Net sales for the fourth quarter of fiscal year 2021 totaled
$852.7 million, up 34.0% year-over-year, or 33.7% year-over-year
for organic growth. This reflects broad-based growth across our
technologies in both operating segments in all geographies.
For the fourth quarter of fiscal year 2021, operating income
increased to $23.3 million from $(113.4) million for the prior-year
quarter, which included goodwill and asset impairment charges of
$120.5 million. Fourth quarter fiscal year 2021 non-GAAP operating
income increased to $28.4 million for a 3.33% non-GAAP operating
income margin, up from $8.2 million for the prior-year quarter.
On a GAAP basis, net income for the fourth quarter of fiscal
year 2021 totaled $20.7 million, or $0.80 per diluted share,
compared to net loss of $(108.9) million, or $(4.29) per diluted
share, for the prior-year quarter. Fourth quarter non-GAAP net
income totaled $24.5 million, or $0.96 per diluted share, which
includes a $0.19 benefit from discrete tax items. These results
compare to fourth quarter fiscal year 2020 non-GAAP net income of
$4.9 million, or $0.19 per diluted share.
Full-Year Results
For fiscal year 2021, net sales increased 3.4% to $3.2 billion,
or a 5.5% year-over-year increase on an organic basis. During the
year, the Company saw continued progress in recovering from the
sales impact of the COVID-19 pandemic. For the Intelisys business,
fiscal year 2021 net sales increased 13.1% year-over-year. Fiscal
year 2021 GAAP operating income increased to $61.5 million, and
non-GAAP operating income increased to $93.1 million, up 18.0%
year-over-year. In July 2020, the Company implemented a $30 million
annualized expense reduction program to address the business
impacts of the COVID-19 pandemic and prepare for the next phase of
growth.
On a GAAP basis, net income for fiscal year 2021 totaled $45.4
million, or $1.78 per diluted share. Non-GAAP net income increased
to $69.9 million, or $2.74 per diluted share, compared to $52.0
million, or $2.05 per diluted share, for the fiscal year 2020.
Share Repurchase Authorization
ScanSource also announced a new $100 million authorization by
its Board of Directors to repurchase shares of the Company's common
stock.
"In setting our capital allocation priorities, our top priority
is reinvestment in the growth of our business and driving value
creation for our shareholders," said Steve Jones, Chief Financial
Officer, ScanSource, Inc. "Our repurchase authorization reflects
our confidence in ScanSource's business and the strength of our
long-term operating cash flow generation."
Repurchases may be made in the open market or through privately
negotiated transactions, and ScanSource may enter into Rule 10b5-1
plans to facilitate repurchases. This share repurchase
authorization does not obligate ScanSource to purchase any
particular amount of common stock, and it may be suspended at any
time at the Company's discretion. The authorization does not have
any time limit.
Annual Financial Outlook for Fiscal Year 2022
The following statements are based on ScanSource's current
expectation for the full fiscal year ended June 30, 2022.
FY22 Annual Outlook
Net sales growth, year-over-year
At least 5.5%
Adjusted EBITDA (non-GAAP)
At least $135 million
Adjusted EBITDA is a non-GAAP measure, which excludes estimates
for amortization of intangible assets, depreciation expense, and
non-cash share-based compensation expense (effective with the first
quarter of fiscal year 2022). For comparison, fiscal year 2021
Adjusted EBITDA, excluding share-based compensation totaled $118
million. 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 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 in a conference call today,
August 24, 2021, 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 regarding the Company's FY22 outlook, capital allocation
plans, growth opportunities and the impact of the COVID-19
pandemic, which involve risks and uncertainties. Any number of
factors could cause actual results to differ materially from
anticipated results, including, but not limited to, failure to hire
and retain quality employees, risk to the Company's business from a
cyber-security attack, the failure to manage and implement the
Company's organic growth strategy, the impact of the COVID-19
pandemic on the Company's operations and financial condition and
the potential prolonged economic weakness brought on by COVID-19, a
failure of the Company's IT systems, a failure to acquire new
businesses, changes in interest and exchange rates and regulatory
regimes impacting the Company's international operations, credit
risks involving the Company's larger customers and suppliers, loss
of the Company's major customers, termination of the Company's
relationship with key suppliers or a significant modification of
the terms under which it operates with a key supplier, 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, 2021, 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 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.
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, 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, and restructuring costs. Effective with the
first quarter of fiscal year 2022, non-cash share-based
compensation expense will also be added back in calculating
Adjusted EBITDA. 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.
Return on invested capital ("ROIC"): 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 ROIC provides useful
information to investors and is an additional relevant comparison
of our performance. 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 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 2021 Best Places to Work
in South Carolina and on FORTUNE magazine’s 2021 List of World’s
Most Admired Companies. ScanSource ranks #655 on the Fortune 1000.
For more information, visit www.scansource.com.
ScanSource, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets (Unaudited)
(in thousands)
June 30, 2021
June 30, 2020*
Assets
Current assets:
Cash and cash equivalents
$
62,718
$
29,485
Accounts receivable, less allowance of
$19,341 at June 30, 2021
and $21,906 at June 30, 2020
568,984
443,185
Inventories
470,081
454,885
Prepaid expenses and other current
assets
117,860
94,681
Current assets held for sale
—
181,231
Total current assets
1,219,643
1,203,467
Property and equipment, net
42,836
55,641
Goodwill
218,877
214,288
Identifiable intangible assets, net
104,860
121,547
Deferred income taxes
21,853
24,630
Other non-current assets
63,615
72,521
Total assets
$
1,671,684
$
1,692,094
Liabilities and
Shareholders’ Equity
Current liabilities:
Accounts payable
$
634,805
$
454,240
Accrued expenses and other current
liabilities
87,790
76,686
Current portion of contingent
consideration
—
46,334
Income taxes payable
2,501
5,886
Current portion of long-term debt
7,843
7,839
Current liabilities held for sale
—
128,022
Total current liabilities
732,939
719,007
Deferred income taxes
3,954
3,884
Long-term debt, net of current portion
135,331
143,175
Borrowings under revolving credit
facility
—
67,714
Other long-term liabilities
68,269
80,068
Total liabilities
940,493
1,013,848
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, 25,499,465 and 25,361,298 shares issued and
outstanding at June 30, 2021 and June 30, 2020, respectively
71,253
63,765
Retained earnings
758,071
747,276
Accumulated other comprehensive loss
(98,133)
(132,795)
Total shareholders’ equity
731,191
678,246
Total liabilities and shareholders’
equity
$
1,671,684
$
1,692,094
*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,
2021
2020
2021
2020
Net sales
$
852,694
$
636,450
$
3,150,806
$
3,047,734
Cost of goods sold
756,916
562,303
2,800,090
2,692,165
Gross profit
95,778
74,147
350,716
355,569
Selling, general and administrative
expenses
64,758
58,192
247,438
259,535
Depreciation expense
2,898
3,304
12,533
13,033
Intangible amortization expense
4,893
4,946
19,488
19,953
Restructuring and other charges
(54)
—
9,258
604
Impairment charges
—
120,470
—
120,470
Change in fair value of contingent
consideration
—
674
516
6,941
Operating income (loss)
23,283
(113,439)
61,483
(64,967)
Interest expense
1,643
2,497
6,929
12,224
Interest income
(1,341)
(3,199)
(3,097)
(5,826)
Other expense (income), net
(65)
213
116
411
Income before income taxes
23,046
(112,950)
57,535
(71,776)
Provision for income taxes
2,389
(4,091)
12,146
7,451
Net income (loss) from continuing
operations
20,657
(108,859)
45,389
(79,227)
Net income (loss) from discontinued
operations
3,053
(108,403)
(34,594)
(113,427)
Net income (loss)
$
23,710
$
(217,262)
$
10,795
$
(192,654)
Per share data:
Net income (loss) from continuing
operations per common share, basic
$
0.81
$
(4.29)
$
1.79
$
(3.12)
Net income (loss) from discontinued
operations per common share, basic
0.12
(4.28)
(1.36)
(4.47)
Net income (loss) per common share,
basic
$
0.93
$
(8.57)
$
0.42
$
(7.59)
Weighted-average shares outstanding,
basic
25,482
25,353
25,423
25,378
Net income (loss) from continuing
operations per common share, diluted
$
0.80
$
(4.29)
$
1.78
$
(3.12)
Net income (loss) from discontinued
operations per common share, diluted
0.12
(4.28)
(1.36)
(4.47)
Net income (loss) per common share,
diluted
$
0.92
$
(8.57)
$
0.42
$
(7.59)
Weighted-average shares outstanding,
diluted
25,664
25,353
25,518
25,378
ScanSource, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows (Unaudited)
(in thousands)
Quarter ended June 30,
Fiscal year ended June
30,
2021
2020
2021
2020
Cash flows from operating activities:
Net income (loss)
$
23,710
$
(217,262)
$
10,795
$
(192,654)
Net income (loss) from discontinued
operations
3,053
(108,403)
(34,594)
(113,427)
Net income (loss) from continuing
operations
20,657
(108,859)
45,389
(79,227)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities of continuing
operations:
Depreciation and amortization
8,090
8,743
33,507
35,328
Amortization of debt issue costs
104
104
417
417
Provision for doubtful accounts
112
222
338
1,621
Share-based compensation
2,328
1,425
8,039
5,478
Impairment charges
—
120,470
—
120,470
Deferred income taxes
2,941
(10,714)
2,916
(12,193)
Change in fair value of contingent
consideration
—
674
516
6,941
Contingent consideration payments
excess
—
—
(5,457)
(3,050)
Finance lease interest
23
21
119
85
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable
(50,204)
57,562
(118,859)
57,477
Inventories
(6,394)
93,623
(12,301)
86,177
Prepaid expenses and other assets
(17,111)
(2,903)
(18,753)
(13,880)
Other non-current assets
7,102
(12,534)
9,948
(13,563)
Accounts payable
105,511
(76,224)
175,120
(20,846)
Accrued expenses and other liabilities
(8,928)
(1,992)
(493)
11,239
Income taxes payable
(2,886)
4,334
(3,679)
(441)
Net cash provided by operating activities
of continuing operations
61,345
73,952
116,767
182,033
Cash flows from investing activities of
continuing operations:
Capital expenditures
(80)
188
(2,363)
(6,387)
Cash paid for business acquisitions, net
of cash acquired
—
—
—
(48,921)
Cash received for business disposal
—
—
34,356
—
Net cash (used in) provided by investing
activities of continuing operations
(80)
188
31,993
(55,308)
Cash flows from financing activities of
continuing operations:
Borrowings on revolving credit, net of
expenses
395,215
477,446
1,881,679
2,085,918
Repayments on revolving credit, net of
expenses
(449,017)
(539,732)
(1,949,392)
(2,190,595)
Borrowings on long-term debt, net
(1,875)
(938)
(7,839)
(4,085)
Repayments of finance lease
obligations
(320)
(1,105)
(1,294)
(1,765)
Contingent consideration payments
—
—
(41,393)
(35,482)
Exercise of stock options
12
—
451
754
Taxes paid on settlement of equity
awards
—
—
(1,036)
(1,353)
Repurchase of common stock
—
—
—
(6,078)
Net cash used in financing activities of
continuing operations
(55,985)
(64,329)
(118,824)
(152,686)
ScanSource, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows (Unaudited), continued
(in thousands)
Cash flows from discontinued
operations:
Net cash flows provided by operating
activities of discontinued operations
2,469
2,235
24,173
44,238
Net cash flows used in investing
activities of discontinued operations
—
(35)
(58)
(77)
Net cash flows used in financing
activities of discontinued operations
—
(10,663)
(29,494)
(3,921)
Net cash flows provided by (used in)
discontinued operations
2,469
(8,463)
(5,379)
40,240
Effect of exchange rate changes on cash
and cash equivalents
5,648
(1,489)
3,706
(3,642)
Increase (decrease) in cash and cash
equivalents
13,397
(141)
28,263
10,637
Consolidated cash and cash equivalents at
beginning of period
49,321
34,596
34,455
23,818
Consolidated cash and cash equivalents at
end of period
62,718
34,455
62,718
34,455
Cash and cash equivalents of discontinued
operations
—
—
—
4,970
Cash and cash equivalents of continuing
operations
$
62,718
$
34,455
$
62,718
$
29,485
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
(in thousands, except
percentages)
Non-GAAP Financial Information:
Quarter ended June 30,
Fiscal year ended June
30,
2021
2020
2021
2020
Return on invested capital ratio (ROIC),
annualized (a)
14.9
%
4.0
%
11.8
%
7.5
%
Reconciliation of net income to
EBITDA:
Net income (loss) from continuing
operations (GAAP)
$
20,657
$
(108,859
)
$
45,389
$
(79,227
)
Plus: Interest expense
1,643
2,497
6,929
12,224
Plus: Income taxes
2,389
(4,091
)
12,146
7,451
Plus: Depreciation and amortization
8,090
8,743
33,507
35,328
EBITDA (non-GAAP)
32,779
(101,710
)
97,971
(24,224
)
Plus: Change in fair value of contingent
consideration
—
674
516
6,941
Plus: Acquisition and divestiture
costs(b)
246
1,311
2,376
4,000
Plus: Restructuring costs
(54
)
—
9,047
604
Plus: Impairment charges
—
120,470
—
120,470
Plus: Tax recovery
—
(8,424
)
—
(10,744
)
Adjusted EBITDA (numerator for ROIC)
(non-GAAP)
$
32,971
$
12,321
$
109,910
$
97,047
Invested Capital Calculations:
Equity – beginning of the quarter (c)
$
690,575
$
897,678
$
678,246
$
914,129
Equity – end of the quarter (c)
731,191
678,246
731,191
678,246
Plus: Change in fair value of contingent
consideration, net of tax
—
510
390
5,247
Plus: Acquisition and divestiture
costs(b)
207
1,311
2,337
4,000
Plus: Restructuring, net
(40
)
—
6,840
449
Plus: Impact of discontinued operations,
net
(3,053
)
108,403
34,594
113,427
Plus: Impairment charges, net
—
114,398
—
114,398
Plus: Tax recovery, net
—
(6,247
)
—
(8,001
)
Average equity
709,440
897,150
726,799
910,948
Average funded debt (d)
177,074
337,973
202,869
390,709
Invested capital (denominator for ROIC)
(non-GAAP)
$
886,514
$
1,235,123
$
929,668
$
1,301,657
(a) The annualized 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) Acquisition and divestiture costs are
generally nondeductible for tax purposes.
(c) In the quarter ending June 30, 2020,
the Company recorded impairment charges of $120.5 million.
Impairment charges, net of tax reduced equity by $114.4
million.
(d) Average funded debt, which includes
both continuing and discontinued operations, 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,
2021
2020
% Change
Worldwide Barcode, Networking &
Security:
(in thousands)
Net sales, reported
$
597,943
$
447,812
33.5
%
Foreign exchange impact (a)
(447)
—
Non-GAAP net sales, constant currency
$
597,496
$
447,812
33.4
%
Worldwide Communications &
Services:
Net sales, reported
$
254,751
$
188,638
35.0
%
Foreign exchange impact (a)
(1,224)
—
Non-GAAP net sales, constant currency
$
253,527
$
188,638
34.4
%
Consolidated:
Net sales, reported
$
852,694
$
636,450
34.0
%
Foreign exchange impact (a)
(1,671)
—
Non-GAAP net sales, constant currency
$
851,023
$
636,450
33.7
%
(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, 2021 into U.S. dollars using the average
foreign exchange rates for the quarter ended June 30, 2020.
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
Net Sales by Segment:
Fiscal year ended June
30,
2021
2020
% Change
Worldwide Barcode, Networking &
Security:
(in thousands)
Net sales, reported
$
2,175,141
$
2,093,217
3.9
%
Foreign exchange impact (a)
19,311
—
Non-GAAP net sales, constant currency
$
2,194,452
$
2,093,217
4.8
%
Worldwide Communications &
Services:
Net sales, reported
$
975,665
$
954,517
2.2
%
Foreign exchange impact (a)
46,470
—
Non-GAAP net sales, constant currency
$
1,022,135
$
954,517
7.1
%
Consolidated:
Net sales, reported
$
3,150,806
$
3,047,734
3.4
%
Foreign exchange impact (a)
65,781
—
Non-GAAP net sales, constant currency
$
3,216,587
$
3,047,734
5.5
%
(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, 2021 into U.S. dollars using the average
foreign exchange rates for the fiscal year ended June 30, 2020.
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
Net Sales by Geography:
Quarter ended June 30,
2021
2020
% Change
United States and Canada:
(in thousands)
Net sales, as reported
$
771,403
$
581,619
32.6
%
International:
Net sales, reported
$
81,291
$
54,831
48.3
%
Foreign exchange impact(a)
(1,671)
—
Non-GAAP net sales, constant currency
$
79,620
$
54,831
45.2
%
Consolidated:
Net sales, reported
$
852,694
$
636,450
34.0
%
Foreign exchange impact(a)
(1,671)
—
Non-GAAP net sales, constant currency
$
851,023
$
636,450
33.7
%
(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, 2021 into U.S. dollars using the average
foreign exchange rates for the quarter ended June 30, 2020.
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
Net Sales by Geography:
Fiscal year ended June
30,
2021
2020
% Change
United States and Canada:
(in thousands)
Net sales, as reported
$
2,840,731
$
2,755,134
3.1
%
International:
Net sales, reported
$
310,075
$
292,600
6.0
%
Foreign exchange impact(a)
65,781
—
Non-GAAP net sales, constant currency
$
375,856
$
292,600
28.5
%
Consolidated:
Net sales, reported
$
3,150,806
$
3,047,734
3.4
%
Foreign exchange impact(a)
65,781
—
Non-GAAP net sales, constant currency
$
3,216,587
$
3,047,734
5.5
%
(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, 2021 into U.S. dollars using the average
foreign exchange rates for the fiscal year ended June 30, 2020.
Quarter ended June 30,
2021
GAAP Measure
Intangible amortization
expense
Change in fair value of
contingent consideration
Acquisition, divestiture, and
restructuring costs(a)
Tax recovery, net
Impairment charges
Non-GAAP measure
(in thousands, except per
share data)
Net sales
$
852,694
$
—
$
—
$
—
$
—
$
—
$
852,694
Gross profit
95,778
—
—
—
—
—
95,778
Operating income
23,283
4,893
—
192
—
—
28,368
Other expense, net
237
—
—
—
—
—
237
Pre-tax income
23,046
4,893
—
192
—
—
28,131
Net income from continuing operations
20,657
3,698
—
167
—
—
24,522
Diluted EPS from continuing operations
$
0.80
$
0.14
$
—
$
0.01
$
—
$
—
$
0.96
(a) Acquisition and divestiture costs
totaled $0.2 million for the quarter ended June 30, 2021 and are
generally nondeductible for tax purposes. Restructuring costs
totaled $(0.1) million for the quarter ended June 30, 2021.
Quarter ended June 30,
2020
GAAP Measure
Intangible amortization
expense
Change in fair value of
contingent consideration
Acquisition, divestiture, and
restructuring costs(a)
Tax recovery, net
Impairment charges
Non-GAAP measure
(in thousands, except per
share data)
Net sales
$
636,450
$
—
$
—
$
—
$
—
$
—
$
636,450
Gross profit
74,147
—
—
—
—
—
74,147
Operating (loss) income
(113,439)
4,946
674
1,311
(5,743)
120,470
8,219
Other expense, net
(489)
—
—
—
2,681
—
2,192
Pre-tax (loss) income
(112,950)
4,946
674
1,311
(8,424)
120,470
6,027
Net (loss) income from continuing
operations
(108,859)
3,744
510
1,311
(6,247)
114,398
4,857
Diluted EPS from continuing operations
$
(4.29)
$
0.15
$
0.02
$
0.05
$
(0.25)
$
4.51
$
0.19
(a) Acquisition and divestiture costs
totaled xx for the quarter ended June 30, 2020 and are generally
nondeductible for tax purposes.
Year ended June 30,
2021
Reported GAAP Measure
Intangible amortization
expense
Change in fair value of
contingent consideration
Acquisition, divestiture, and
restructuring costs(a)
Tax recovery, net
Impairment charges
Non-GAAP measure
(in thousands, except per
share data)
Net sales
$
3,150,806
$
—
$
—
$
—
$
—
$
—
$
3,150,806
Gross profit
350,716
—
—
—
—
—
350,716
Operating income
61,483
19,488
516
11,634
—
—
93,121
Other expense, net
3,948
—
—
—
—
—
3,948
Pre-tax income
57,535
19,488
516
11,634
—
—
89,173
Net income from continuing operations
45,389
14,753
390
9,336
—
—
69,868
Diluted EPS from continuing operations
$
1.78
$
0.58
$
0.02
$
0.36
$
—
$
—
$
2.74
(a) Acquisition and divestiture costs
totaled $2.4 million for the fiscal year ended June 30, 2021 and
are generally nondeductible for tax purposes. Restructuring costs
totaled $9.3 million for the fiscal year ended June 30, 2021.
Year ended June 30,
2020
Reported GAAP Measure
Intangible amortization
expense
Change in fair value of
contingent consideration
Acquisition, divestiture, and
restructuring costs
Tax recovery, net
Impairment charges
Non-GAAP measure
(in thousands, except per
share data)
Net sales
$
3,047,734
$
—
$
—
$
—
$
—
$
—
$
3,047,734
Gross profit
355,569
—
—
—
—
—
355,569
Operating (loss) income
(64,967)
19,953
6,941
4,604
(8,063)
120,470
78,938
Other expense, net
6,809
—
—
—
2,681
—
9,490
Pre-tax (loss) income
(71,776)
19,953
6,941
4,604
(10,744)
120,470
69,448
Net (loss) income from continuing
operations
(79,227)
15,091
5,247
4,449
(8,001)
114,398
51,957
Diluted EPS from continuing operations
$
(3.12)
$
0.59
$
0.21
$
0.18
$
(0.32)
$
4.51
$
2.05
(a) Acquisition and divestiture costs
totaled $4.0 million for the fiscal year ended June 30, 2020 and
are generally nondeductible for tax purposes. Restructuring costs
totaled $0.6 million for the fiscal year ended June 30, 2020.
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
Discontinued Operations - Financial
Results:
Quarter ended June 30,
Fiscal year ended June
30,
2021
2020
2021
2020
(in thousands)
Net sales
$
—
$
121,969
$
213,373
$
561,496
Cost of goods sold
—
112,846
198,512
513,003
Gross profit
—
9,123
14,861
48,493
Selling, general and administrative
expenses
—
11,337
17,291
53,946
Depreciation expense
—
205
—
975
Intangible amortization expense
—
330
—
1,403
Operating loss
—
(16,496)
(2,430)
(21,578)
Interest expense, net
—
163
394
1,399
Loss on disposal group
101
88,923
34,597
88,923
Other expense, net
—
1,221
310
1,124
Loss from discontinued operations before
taxes
(101)
(106,803)
(37,731)
(113,024)
Income tax (benefit) expense
(3,154)
1,600
(3,137)
403
Net income (loss) from discontinued
operations
$
3,053
$
(108,403)
$
(34,594)
$
(113,427)
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
Discontinued Operations - Assets and
Liabilities:
June 30, 2021
June 30, 2020
(in thousands)
Assets
Current assets:
Cash and cash equivalents
$
—
$
4,970
Accounts receivable, net
—
117,200
Inventories, net
—
106,779
Prepaid expenses and other current
assets
—
23,808
Total current assets
—
252,757
Property and equipment, net
—
1,833
Deferred income taxes
—
9,349
Other non-current assets
—
6,215
Total assets, before valuation
allowance
—
270,154
Less: valuation allowance
—
(88,923)
Total assets, net of valuation allowance
(a)
$
—
$
181,231
Liabilities
Current liabilities:
Accounts payable
$
—
$
56,098
Accrued expenses and other current
liabilities
—
14,815
Other taxes payable
—
20,378
Short-term borrowings
—
3,524
Income tax payable
—
1,085
Total current liabilities
—
95,900
Borrowings under revolving credit
facility
—
24,704
Other long-term liabilities
—
7,418
Total liabilities(1)
$
—
$
128,022
(a) Total assets and liabilities of
discontinued operations are classified in current assets and
liabilities, respectively, in the Company's consolidated balance
sheet as of June 30, 2020. The discontinued operations were
disposed of during the quarter ended December 31, 2020.
ScanSource, Inc. and
Subsidiaries
Supplementary Forward-Looking
Information (Unaudited)
Annual Financial Outlook for Fiscal
Year 2022:
FY22 Outlook
GAAP, Operating Income
At least $92 million
Intangible amortization
$18 million
Depreciation expense
$14 million
Share-based compensation expense
$11 million
Adjusted EBITDA (non-GAAP)
At least $135 million
Fiscal Year 2021 Adjusted EBITDA,
excluding Share-Based Compensation Expense:
FY21
Adjusted EBITDA, as reported
(non-GAAP)
$109.9 million
Add: Share-based compensation expense
$8.0 million
Adjusted EBITDA, excluding share-based
compensation expense
$117.9 million
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210824005812/en/
Steve Jones Senior EVP, Chief Financial Officer ScanSource, Inc.
(864) 286-4302 - or - Mary M. Gentry SVP, Treasurer and Investor
Relations ScanSource, Inc. (864) 286-4892
ScanSource (NASDAQ:SCSC)
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ScanSource (NASDAQ:SCSC)
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