Strong demand drives excellent top-line growth;
net sales increased 13% year-over-year
ScanSource, Inc. (NASDAQ: SCSC), a leading hybrid distributor
connecting devices to the cloud, today announced financial results
for the first quarter ended September 30, 2021. All results in this
release reflect continuing operations only unless otherwise
noted.
First Quarter Summary:
Quarter ended September
30,
2021
2020
Change
(in thousands, except per
share data)
Select reported measures:
Net sales
$
857,311
$
757,342
13.2
%
Gross profit
$
101,300
$
80,779
25.4
%
Gross profit margin %
11.82
%
10.67
%
115bp
Operating income
$
30,328
$
1,634
n/m
GAAP net income
$
22,073
$
(115
)
n/m
GAAP diluted EPS
$
0.86
$
(0.01
)
n/m
Select Non-GAAP measures:
Adjusted EBITDA
$
41,394
$
20,911
98.0
%
Adjusted EBITDA margin %
4.83
%
2.76
%
207bp
Non-GAAP net income
$
25,550
$
10,698
138.8
%
Non-GAAP diluted EPS
$
0.99
$
0.42
135.7
%
n/m - percentages are not meaningful
"Excellent top-line growth driven by strong demand proves our
hybrid distribution strategy is winning," said Mike Baur, Chairman
and CEO, ScanSource, Inc. "Our business is built for top-line
growth, and we realized operational leverage from this growth in
our outstanding bottom-line results."
Quarterly Results
Net sales for the first quarter of fiscal year 2022 totaled
$857.3 million, up 13.2% year-over-year, or 12.9% year-over-year
for organic growth. First quarter fiscal year 2022 net sales in the
Specialty Technology Solutions segment increased 22.7% to $501.7
million, driven by broad-based growth across technologies. First
quarter fiscal year 2022 net sales in Modern Communications &
Cloud increased 2.0% to $355.6 million, reflecting the shift to
cloud and subscriptions. For the Intelisys agency business, first
quarter fiscal year 2022 net sales increased 13.7%
year-over-year.
Gross profit for the first quarter of fiscal year 2022 totaled
$101.3 million, up 25.4% year-over-year. Gross profit margin
increased to 11.8% for the first quarter of fiscal year 2022, up
from 10.7% for the prior year period. The increase is primarily due
to a higher margin sales mix and higher vendor program recognition
from higher sales.
For the first quarter of fiscal year 2022, operating income
increased to $30.3 million from $1.6 million for the prior-year
quarter. First quarter fiscal year 2022 non-GAAP operating income
increased to $34.9 million for a 4.07% non-GAAP operating income
margin, up from $15.8 million for the prior-year quarter.
On a GAAP basis, net income for the first quarter of fiscal year
2022 totaled $22.1 million, or $0.86 per diluted share, compared to
net loss of $(0.1) million, or $(0.01) per diluted share, for the
prior-year quarter. First quarter non-GAAP net income totaled $25.6
million, or $0.99 per diluted share, up from $10.7 million, or
$0.42 per diluted share, for the prior-year quarter.
Adjusted EBITDA for the first quarter of fiscal year 2022
increased to $41.4 million, or 4.8% of net sales, compared to $20.9
million, or 2.8% of net sales in the prior-year quarter, primarily
due to higher gross profits and operating leverage. Return on
invested capital increased to 17.5% for first quarter fiscal year
2022.
Segment Changes
Effective with the first quarter of fiscal year 2022, the
Company renamed its operating segments and aligned technologies
with its hybrid distribution strategy across hardware, software,
connectivity and cloud. The Company's segments follow:
- Specialty Technology Solutions (formerly Worldwide Barcode,
Networking & Security)
- Modern Communications & Cloud (formerly Worldwide
Communications & Services)
This change better aligns the Company's segment reporting with
its go-to-market strategy. The reason the Company is making the
change now is to reflect a supplier's business transition between
the Company's technology segments. Both of the new segments include
hardware, services, and recurring revenue opportunities. The
Company reclassified certain prior year amounts in the segment
results to conform with the current year presentation.
Annual Financial Outlook for Fiscal Year 2022
ScanSource reaffirms its previously provided guidance set forth
below 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 Earnings Infographic
At approximately 4:15 p.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 in a conference call today,
November 9, 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 the Company's FY22 outlook, operating strategy, supply
chain challenges, 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 a leading hybrid distributor
connecting devices to the cloud and accelerating growth for
partners across hardware, software, connectivity and cloud.
ScanSource enables partners to deliver solutions for their
customers to address changing end-user buying and consumption
patterns. ScanSource sells through multiple, specialized
routes-to-market with hardware, software, 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 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)
September 30, 2021
June 30, 2021*
Assets
Current assets:
Cash and cash equivalents
$
55,491
$
62,718
Accounts receivable, less allowance of
$17,620 at September 30, 2021
and $19,341 at June 30, 2021
589,532
568,984
Inventories
493,541
470,081
Prepaid expenses and other current
assets
117,849
117,860
Total current assets
1,256,413
1,219,643
Property and equipment, net
40,763
42,836
Goodwill
216,948
218,877
Identifiable intangible assets, net
99,496
104,860
Deferred income taxes
21,806
21,853
Other non-current assets
61,925
63,615
Non-current assets held for sale
—
—
Total assets
$
1,697,351
$
1,671,684
Liabilities and
Shareholders’ Equity
Current liabilities:
Accounts payable
$
602,229
$
634,805
Accrued expenses and other current
liabilities
72,362
87,790
Income taxes payable
9,039
2,501
Current portion of long-term debt
8,785
7,843
Total current liabilities
692,415
732,939
Deferred income taxes
3,846
3,954
Long-term debt, net of current portion
132,171
135,331
Borrowings under revolving credit
facility
56,400
—
Other long-term liabilities
66,425
68,269
Total liabilities
951,257
940,493
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, 25,528,551 and 25,499,465 shares issued and
outstanding at September 30, 2021 and June 30, 2021,
respectively
74,817
71,253
Retained earnings
780,144
758,071
Accumulated other comprehensive loss
(108,867
)
(98,133
)
Total shareholders’ equity
746,094
731,191
Total liabilities and shareholders’
equity
$
1,697,351
$
1,671,684
*Derived from audited financial
statements.
ScanSource, Inc. and
Subsidiaries
Condensed Consolidated Income
Statements (Unaudited)
(in thousands, except per
share data)
Quarter ended September
30,
2021
2020
Net sales
$
857,311
$
757,342
Cost of goods sold
756,011
676,563
Gross profit
101,300
80,779
Selling, general and administrative
expenses
63,582
62,112
Depreciation expense
2,880
3,396
Intangible amortization expense
4,510
4,853
Restructuring and other charges
—
8,268
Change in fair value of contingent
consideration
—
516
Operating income
30,328
1,634
Interest expense
1,660
1,913
Interest income
(1,026
)
(481
)
Other expense (income), net
263
364
Income before income taxes
29,431
(162
)
Provision for income taxes
7,358
(47
)
Net income (loss) from continuing
operations
22,073
(115
)
Net loss from discontinued operations
—
(11,704
)
Net income (loss)
$
22,073
$
(11,819
)
Per share data:
Net income (loss) from continuing
operations per common share, basic
$
0.87
$
(0.01
)
Net loss from discontinued operations per
common share, basic
—
(0.46
)
Net income (loss) per common share,
basic
$
0.87
$
(0.47
)
Weighted-average shares outstanding,
basic
25,512
25,361
Net income (loss) from continuing
operations per common share, diluted
$
0.86
$
(0.01
)
Net loss from discontinued operations per
common share, diluted
—
(0.46
)
Net income (loss) per common share,
diluted
$
0.86
$
(0.47
)
Weighted-average shares outstanding,
diluted
25,696
25,361
ScanSource, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows (Unaudited)
(in thousands)
Quarter ended September
30,
2021
2020
Cash flows from operating activities:
Net income (loss)
$
22,073
$
(11,819
)
Net loss from discontinued operations
—
(11,704
)
Net income (loss) from continuing
operations
22,073
(115
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities of continuing
operations:
Depreciation and amortization
7,650
8,710
Amortization of debt issue costs
104
104
Provision for doubtful accounts
(1,027
)
(8
)
Share-based compensation
2,570
1,168
Deferred income taxes
(183
)
139
Change in fair value of contingent
consideration
—
516
Finance lease interest
17
37
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable
(26,714
)
(68,726
)
Inventories
(25,879
)
31,155
Prepaid expenses and other assets
(1,174
)
2,369
Other non-current assets
691
(274
)
Accounts payable
(26,962
)
92,419
Accrued expenses and other liabilities
(14,683
)
7,827
Income taxes payable
6,558
(4,096
)
Net cash (used in) provided by operating
activities of continuing operations
(56,959
)
71,225
Cash flows from investing activities of
continuing operations:
Capital expenditures
(1,090
)
(748
)
Net cash used in investing activities of
continuing operations
(1,090
)
(748
)
Cash flows from financing activities of
continuing operations:
Borrowings on revolving credit, net of
expenses
526,637
477,381
Repayments on revolving credit, net of
expenses
(470,237
)
(545,095
)
Borrowings on long-term debt, net
(2,218
)
(2,214
)
Repayments of finance lease
obligations
(316
)
(327
)
Exercise of stock options
994
—
Net cash provided by (used in) financing
activities of continuing operations
54,860
(70,255
)
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
—
31,853
Net cash flows used in investing
activities of discontinued operations
—
(36
)
Net cash flows used in financing
activities of discontinued operations
—
(9,488
)
Net cash flows provided by discontinued
operations
—
22,329
Effect of exchange rate changes on cash
and cash equivalents
(4,038
)
(1,439
)
(Decrease) Increase in cash and cash
equivalents
(7,227
)
21,112
Consolidated cash and cash equivalents at
beginning of period
62,718
34,455
Consolidated cash and cash equivalents at
end of period
55,491
55,567
Cash and cash equivalents of discontinued
operations
—
5,678
Cash and cash equivalents of continuing
operations
$
55,491
$
49,889
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
(in thousands, except
percentages)
Non-GAAP Financial Information:
Quarter ended September
30,
2021
2020
Return on invested capital ratio (ROIC),
annualized (a)
17.5
%
8.9
%
Reconciliation of net income to
adjusted EBITDA:
Net income (loss) from continuing
operations (GAAP)
$
22,073
$
(115
)
Plus: Interest expense
1,660
1,913
Plus: Income taxes
7,358
(47
)
Plus: Depreciation and amortization
7,650
8,710
EBITDA (non-GAAP)
38,741
10,461
Plus: Change in fair value of contingent
consideration
—
516
Plus: Share-based compensation
2,570
1,168
Plus: Acquisition and divestiture
costs(b)
83
498
Plus: Restructuring costs
—
8,268
Adjusted EBITDA (numerator for ROIC)
(non-GAAP)
$
41,394
$
20,911
Invested Capital Calculations:
Equity – beginning of the quarter
$
731,191
$
678,246
Equity – end of the quarter
746,094
671,227
Plus: Change in fair value of contingent
consideration, net of tax
—
390
Plus: Share-based compensation, net
1,922
878
Plus: Acquisition and divestiture
costs(b)
83
498
Plus: Restructuring, net
—
6,250
Plus: Discontinued operations net loss
—
11,704
Average equity
739,645
684,597
Average funded debt (c)
197,406
243,268
Invested capital (denominator for ROIC)
(non-GAAP)
$
937,051
$
927,865
(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) Acquisition and divestiture costs are
generally nondeductible for tax purposes.
(c) 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 September
30,
2021
2020
% Change
Specialty Technology Solutions:
(in thousands)
Net sales, reported
$
501,711
$
408,777
22.7
%
Foreign exchange impact (a)
(467
)
—
Non-GAAP net sales, constant currency
$
501,244
$
408,777
22.6
%
Modern Communications &
Cloud:
Net sales, reported
$
355,600
$
348,565
2.0
%
Foreign exchange impact (a)
(1,970
)
—
Non-GAAP net sales, constant currency
$
353,630
$
348,565
1.5
%
Consolidated:
Net sales, reported
$
857,311
$
757,342
13.2
%
Foreign exchange impact (a)
(2,437
)
—
Non-GAAP net sales, constant currency
$
854,874
$
757,342
12.9
%
(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 September 30, 2021 into U.S. dollars using the
average foreign exchange rates for the quarter ended September 30,
2020.
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
Net Sales by Geography:
Quarter ended September
30,
2021
2020
% Change
United States and Canada:
(in thousands)
Net sales, as reported
$
769,499
$
683,603
12.6
%
International:
Net sales, reported
$
87,812
$
73,739
19.1
%
Foreign exchange impact(a)
(2,437
)
—
Non-GAAP net sales, constant currency
$
85,375
$
73,739
15.8
%
Consolidated:
Net sales, reported
$
857,311
$
757,342
13.2
%
Foreign exchange impact(a)
(2,437
)
—
Non-GAAP net sales, constant currency
$
854,874
$
757,342
12.9
%
(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 September 30, 2021 into U.S. dollars using the
average foreign exchange rates for the quarter ended September 30,
2020.
Quarter ended September 30,
2021
GAAP Measure
Intangible amortization
expense
Change in fair value of
contingent consideration
Acquisition and divestiture
costs
Restructuring costs
Non-GAAP measure
(in thousands, except per
share data)
Net sales
$
857,311
$
—
$
—
$
—
$
—
$
857,311
Gross profit
101,300
—
—
—
—
101,300
Operating income
30,328
4,510
—
83
—
34,921
Other expense, net
897
—
—
—
—
897
Pre-tax income
29,431
4,510
—
83
—
34,024
Net income
22,073
3,394
—
83
—
25,550
Diluted EPS
$
0.86
$
0.13
$
—
$
—
$
—
$
0.99
Quarter ended September 30,
2020
GAAP Measure
Intangible amortization
expense
Change in fair value of
contingent consideration
Acquisition and divestiture
costs
Restructuring costs
Non-GAAP measure
(in thousands, except per
share data)
Net sales
$
757,342
$
—
$
—
$
—
$
—
$
757,342
Gross profit
80,779
—
—
—
—
80,779
Operating (loss) income
1,634
4,853
516
498
8,268
15,769
Other expense, net
1,796
—
—
—
—
1,796
Pre-tax (loss) income
(162
)
4,853
516
498
8,268
13,973
Net (loss) income
(115
)
3,675
390
498
6,250
10,698
Diluted EPS
$
(0.01
)
$
0.14
$
0.02
$
0.02
$
0.25
$
0.42
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
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
(in thousands, except per
share data)
Segment Information:
Quarter Ended
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
September 30, 2020
Sales:
Specialty Technology Solutions
$
501,711
$
515,445
$
436,462
$
455,248
$
408,777
Modern Communications & Cloud
355,600
337,249
293,411
355,649
348,565
$
857,311
$
852,694
$
729,873
$
810,897
$
757,342
Depreciation and amortization:
Specialty Technology Solutions
$
2,969
$
3,139
$
3,200
$
3,308
$
3,545
Modern Communications & Cloud
3,962
4,233
4,439
4,246
4,370
Corporate
719
719
719
794
795
$
7,650
$
8,091
$
8,358
$
8,348
$
8,710
Operating income (loss):
Specialty Technology Solutions
$
14,104
$
12,011
$
8,713
$
7,160
$
1,684
Modern Communications & Cloud
16,307
11,466
11,555
11,814
8,716
Corporate
(83
)
(191
)
(832
)
(1,844
)
(8,766
)
$
30,328
$
23,286
$
19,436
$
17,130
$
1,634
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211109006489/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)
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