Exceeds Expectations and Raises Full Year
Outlook Following Another Quarter of Strong Demand
Named to FORTUNE Magazine's List of World's
Most Admired Companies for Sixth Consecutive Year
ScanSource, Inc. (NASDAQ: SCSC), a leading hybrid distributor
connecting devices to the cloud, today announced financial results
for the second quarter ended December 31, 2021. All results in this
release reflect continuing operations only unless otherwise
noted.
Second Quarter
Summary:
Quarter ended December
31,
2021
2020
Change
(in thousands, except per
share data)
Select reported measures:
Net sales
$
864,351
$
810,897
6.6%
Gross profit
$
107,925
$
86,043
25.4%
Gross profit margin %
12.49
%
10.61
%
188bp
Operating income
$
31,498
$
17,130
83.9%
GAAP net income
$
23,152
$
11,061
109.3%
GAAP diluted EPS
$
0.89
$
0.43
107.0%
Select Non-GAAP measures:
Adjusted EBITDA
$
42,542
$
29,739
43.1%
Adjusted EBITDA margin %
4.92
%
3.67
%
125bp
Non-GAAP net income
$
26,446
$
16,469
60.6%
Non-GAAP diluted EPS
$
1.02
$
0.65
56.9%
"Strong demand drove top-line growth with profitability ahead of
expectations, as our team successfully navigated ongoing supply
chain challenges," said Mike Baur, Chairman and CEO, ScanSource,
Inc. "This demand from channel partners across our technologies and
operational excellence by our employees lead us to raise our full
year 2022 outlook for both net sales growth and adjusted
EBITDA."
Quarterly Results
Net sales for the second quarter of fiscal year 2022 totaled
$864.4 million, up 6.6% year-over-year, or 7.0% year-over-year for
organic growth. Second quarter fiscal year 2022 net sales in the
Specialty Technology Solutions segment increased 9.2%
year-over-year to $496.9 million, driven by broad-based demand
across technologies. Second quarter fiscal year 2022 net sales in
Modern Communications & Cloud increased 3.3% year-over-year, or
3.9% year-over-year for organic growth, to $367.4 million, with
Intelisys connectivity and cloud business net sales increasing
14.1% year-over-year.
Gross profit for the second quarter of fiscal year 2022 totaled
$107.9 million, up 25.4% year-over-year. Gross profit margin
increased to 12.5% for the second quarter of fiscal year 2022, up
from 10.6% in the prior-year quarter. The increase is primarily due
to sales volume, sales mix and higher supplier sales incentives
compared to the prior-year quarter.
For the second quarter of fiscal year 2022, operating income
increased to $31.5 million from $17.1 million in the prior-year
quarter. Second quarter fiscal year 2022 non-GAAP operating income
increased to $35.9 million for a 4.15% non-GAAP operating income
margin, up from $23.8 million for the prior-year quarter.
On a GAAP basis, net income for the second quarter of fiscal
year 2022 totaled $23.2 million, or $0.89 per diluted share,
compared to net income of $11.1 million, or $0.43 per diluted
share, for the prior-year quarter. Second quarter fiscal year 2022
non-GAAP net income totaled $26.4 million, or $1.02 per diluted
share, up from $16.5 million, or $0.65 per diluted share, for the
prior-year quarter.
Adjusted EBITDA for the second quarter of fiscal year 2022
increased to $42.5 million, or 4.92% of net sales, compared to
$29.7 million, or 3.67% of net sales in the prior-year quarter,
primarily due to higher gross profits and operating leverage.
Return on invested capital increased to 17.6% for second quarter
fiscal year 2022, compared to 13.3% in the prior-year quarter.
Naming to FORTUNE Magazine's List of World's Most Admired
Companies
In February, ScanSource announced its naming to FORTUNE
magazine's 2022 list of World's Most Admired Companies.
ScanSource's inclusion in this year's list marks the sixth
consecutive year the Company has received the recognition. The
annual survey, which is given to thousands of senior executives,
directors and financial analysts from more than 600 global
companies, identifies the organizations with the strongest
reputations within their industries and across other
industries.
Annual Financial Outlook for Fiscal Year 2022
ScanSource raises its expectations for the full fiscal year
ended June 30, 2022 and replaces previously provided guidance.
FY22 Annual Outlook
Net sales growth, year-over-year
At least 7%
Adjusted EBITDA (non-GAAP)
At least $148 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 and business in a
conference call today, February 8, 2022, 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 is also 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. The presentation for Adjusted EBITDA for
all periods presented has been recast to reflect this change to
enhance comparability between periods.
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, SaaS, 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, 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 2021 Best Places to Work in South Carolina and on
FORTUNE magazine’s 2022 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)
December 31, 2021
June 30, 2021*
Assets
Current assets:
Cash and cash equivalents
$
34,123
$
62,718
Accounts receivable, less allowance of
$17,393 at December 31, 2021 and $19,341 at June 30, 2021
613,186
568,984
Inventories
562,397
470,081
Prepaid expenses and other current
assets
124,633
117,860
Total current assets
1,334,339
1,219,643
Property and equipment, net
39,239
42,836
Goodwill
216,755
218,877
Identifiable intangible assets, net
95,045
104,860
Deferred income taxes
21,668
21,853
Other non-current assets
63,824
63,615
Total assets
$
1,770,870
$
1,671,684
Liabilities and
Shareholders’ Equity
Current liabilities:
Accounts payable
$
653,190
$
634,805
Accrued expenses and other current
liabilities
81,570
87,790
Income taxes payable
2,283
2,501
Current portion of long-term debt
9,723
7,843
Total current liabilities
746,766
732,939
Deferred income taxes
3,862
3,954
Long-term debt, net of current portion
129,358
135,331
Borrowings under revolving credit
facility
57,785
—
Other long-term liabilities
64,574
68,269
Total liabilities
1,002,345
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, 25,657,545 and 25,499,465 shares issued and
outstanding at December 31, 2021 and June 30, 2021,
respectively
75,583
71,253
Retained earnings
803,396
758,071
Accumulated other comprehensive loss
(110,454
)
(98,133
)
Total shareholders’ equity
768,525
731,191
Total liabilities and shareholders’
equity
$
1,770,870
$
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 December
31,
Six months ended December
31,
2021
2020
2021
2020
Net sales
$
864,351
$
810,897
$
1,721,662
$
1,568,238
Cost of goods sold
756,426
724,854
1,512,437
1,401,415
Gross profit
107,925
86,043
209,225
166,823
Selling, general and administrative
expenses
69,433
60,470
133,016
122,580
Depreciation expense
2,547
3,097
5,427
6,494
Intangible amortization expense
4,447
4,862
8,956
9,716
Restructuring and other charges
—
484
—
8,753
Change in fair value of contingent
consideration
—
—
—
516
Operating income
31,498
17,130
61,826
18,764
Interest expense
1,493
1,796
3,153
3,709
Interest income
(947
)
(531
)
(1,973
)
(1,011
)
Other expense, net
543
121
807
484
Income before income taxes
30,409
15,744
59,839
15,582
Provision for income taxes
7,257
4,683
14,614
4,636
Net income from continuing operations
23,152
11,061
45,225
10,946
Net income (loss) from discontinued
operations
100
(25,255
)
100
(36,959
)
Net income (loss)
$
23,252
$
(14,194
)
$
45,325
$
(26,013
)
Per share data:
Net income from continuing operations per
common share, basic
$
0.91
$
0.44
$
1.77
$
0.43
Net loss from discontinued operations per
common share, basic
—
(1.00
)
—
(1.46
)
Net income (loss) per common share,
basic
$
0.91
$
(0.56
)
$
1.77
$
(1.03
)
Weighted-average shares outstanding,
basic
25,585
25,395
25,549
25,378
Net income from continuing operations per
common share, diluted
$
0.89
$
0.43
$
1.75
$
0.43
Net loss from discontinued operations per
common share, diluted
—
(0.99
)
—
(1.45
)
Net income (loss) per common share,
diluted
$
0.90
$
(0.56
)
$
1.76
$
(1.02
)
Weighted-average shares outstanding,
diluted
25,895
25,475
25,806
25,458
ScanSource, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows (Unaudited)
(in thousands)
Six months ended December
31,
2021
2020
Cash flows from operating activities:
Net income (loss)
$
45,325
$
(26,013
)
Net income (loss) from discontinued
operations
100
(36,959
)
Net income from continuing operations
45,225
10,946
Adjustments to reconcile net income (loss)
to net cash provided by operating activities of continuing
operations:
Depreciation and amortization
14,879
17,059
Amortization of debt issue costs
209
209
Provision for doubtful accounts
921
(180
)
Share-based compensation
6,032
3,174
Deferred income taxes
(109
)
(694
)
Change in fair value of contingent
consideration
—
516
Contingent consideration payments
excess
—
(5,457
)
Finance lease interest
26
70
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable
(54,370
)
(86,683
)
Inventories
(95,531
)
35,124
Prepaid expenses and other assets
(11,236
)
2,256
Other non-current assets
(1,561
)
1,328
Accounts payable
25,444
132,074
Accrued expenses and other liabilities
(5,130
)
11,150
Income taxes payable
(177
)
(5,218
)
Net cash (used in) provided by operating
activities of continuing operations
(75,378
)
115,674
Cash flows from investing activities of
continuing operations:
Capital expenditures
(2,645
)
(1,454
)
Cash received for business disposal
3,125
34,356
Net cash provided by investing activities
of continuing operations
480
32,902
Cash flows from financing activities of
continuing operations:
Borrowings on revolving credit, net of
expenses
1,115,161
959,848
Repayments on revolving credit, net of
expenses
(1,057,376
)
(1,022,561
)
Repayments on long-term debt, net
(4,093
)
(4,089
)
Repayments of finance lease
obligations
(624
)
(652
)
Contingent consideration payments
—
(41,393
)
Exercise of stock options
1,114
—
Taxes paid on settlement of equity
awards
(2,634
)
(1,036
)
Common stock repurchased
(183
)
—
Net cash provided by (used in) financing
activities of continuing operations
51,365
(109,883
)
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
—
21,704
Net cash flows used in investing
activities of discontinued operations
—
(58
)
Net cash flows used in financing
activities of discontinued operations
—
(29,494
)
Net cash flows used in discontinued
operations
—
(7,848
)
Effect of exchange rate changes on cash
and cash equivalents
(5,062
)
1,887
(Decrease) Increase in cash and cash
equivalents
(28,595
)
32,732
Consolidated cash and cash equivalents at
beginning of period
62,718
34,455
Consolidated cash and cash equivalents at
end of period
34,123
67,187
Cash and cash equivalents of discontinued
operations
—
—
Cash and cash equivalents of continuing
operations
$
34,123
$
67,187
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
(in thousands, except
percentages)
Non-GAAP Financial Information:
Quarter ended December
31,
2021
2020
Return on invested capital ratio (ROIC),
annualized (a)
17.6
%
13.3
%
Reconciliation of Net Income to
Adjusted EBITDA:
Net income from continuing operations
(GAAP)
$
23,152
$
11,061
Plus: Interest expense
1,493
1,796
Plus: Income taxes
7,257
4,683
Plus: Depreciation and amortization
7,229
8,349
EBITDA (non-GAAP)
39,131
25,889
Plus: Share-based compensation
3,464
2,006
Plus: Acquisition and divestiture
costs(b)
(53
)
1,360
Plus: Restructuring costs
—
484
Adjusted EBITDA (numerator for ROIC)
(non-GAAP)
$
42,542
$
29,739
Invested Capital Calculations:
Equity – beginning of the quarter
$
746,094
$
671,227
Equity – end of the quarter
768,525
682,139
Plus: Share-based compensation, net
2,590
1,510
Plus: Acquisition and divestiture
costs(b)
(53
)
1,360
Plus: Restructuring, net
—
366
Plus: Discontinued operations net (income)
loss
(100
)
25,255
Average equity
758,528
690,929
Average funded debt (c)
200,708
198,620
Invested capital (denominator for ROIC)
(non-GAAP)
$
959,236
$
889,549
(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 December
31,
2021
2020
% Change
Specialty Technology Solutions:
(in thousands)
Net sales, reported
$
496,920
$
455,248
9.2
%
Foreign exchange impact (a)
1,011
—
Non-GAAP net sales, constant currency
$
497,931
$
455,248
9.4
%
Modern Communications &
Cloud:
Net sales, reported
$
367,431
$
355,649
3.3
%
Foreign exchange impact (a)
1,961
—
Non-GAAP net sales, constant currency
$
369,392
$
355,649
3.9
%
Consolidated:
Net sales, reported
$
864,351
$
810,897
6.6
%
Foreign exchange impact (a)
2,972
—
Non-GAAP net sales, constant currency
$
867,323
$
810,897
7.0
%
(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, 2021 into U.S. dollars using the average
foreign exchange rates for the quarter ended December 31, 2020.
ScanSource, Inc. and
Subsidiaries
Supplementary Information
(Unaudited)
Net Sales by Geography:
Quarter ended December
31,
2021
2020
% Change
United States and Canada:
(in thousands)
Net sales, as reported
$
773,932
$
720,004
7.5
%
International:
Net sales, reported
$
90,419
$
90,893
(0.5
) %
Foreign exchange impact(a)
2,972
—
Non-GAAP net sales, constant currency
$
93,391
$
90,893
2.7
%
Consolidated:
Net sales, reported
$
864,351
$
810,897
6.6
%
Foreign exchange impact(a)
2,972
—
Non-GAAP net sales, constant currency
$
867,323
$
810,897
7.0
%
(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, 2021 into U.S. dollars using the average
foreign exchange rates for the quarter ended December 31, 2020.
Quarter ended December 31,
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
$
864,351
$
—
$
—
$
—
$
—
$
864,351
Gross profit
107,925
—
—
—
—
107,925
Operating income
31,498
4,447
—
(53
)
—
35,892
Other expense, net
1,089
—
—
—
—
1,089
Pre-tax income
30,409
4,447
—
(53
)
—
34,803
Net income
23,152
3,347
—
(53
)
—
26,446
Diluted EPS
$
0.89
$
0.13
$
—
$
—
$
—
$
1.02
Quarter ended December 31,
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
$
810,897
$
—
$
—
$
—
$
—
$
810,897
Gross profit
86,043
—
—
—
—
86,043
Operating income
17,130
4,862
—
1,360
484
23,836
Other expense, net
1,386
—
—
—
—
1,386
Pre-tax income
15,744
4,862
—
1,360
484
22,450
Net income
11,061
3,682
—
1,360
366
16,469
Diluted EPS
$
0.43
$
0.15
$
—
$
0.06
$
0.01
$
0.65
ScanSource, Inc. and
Subsidiaries
Supplementary Forward-Looking
Information (Unaudited)
Annual Financial Outlook for Fiscal
Year 2022:
FY22
Outlook
GAAP, Operating income
At least $105 million
Intangible amortization
$18 million
Depreciation expense
$13 million
Share-based compensation expense
$12 million
Adjusted EBITDA (non-GAAP)
At least $148 million
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version on businesswire.com: https://www.businesswire.com/news/home/20220208006115/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