Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 1, 2024

ScanSource, Inc.

(Exact name of registrant as specified in its charter)

00-26926

57-0965380

(State or other jurisdiction
of incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

6 Logue Court, Greenville, SC 29615

(Address of principal executive offices, including zip code)

864-288-2432

(Registrant’s telephone number, including area code)

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, no par value

SCSC

NASDAQ Global Select Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.


Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On May 7, 2024, ScanSource, Inc. (the "Company") issued a press release announcing its filed results for its third quarter ended March 31, 2024. A copy of the press release and accompanying Earnings Infographic are attached as Exhibits 99.1 and 99.2 hereto and incorporated herein by reference and also made available through the Company’s website at www.scansource.com. An updated investor presentation will be made available on the Company's website within approximately two weeks.

The information in Item 2.02 of this Report, including the Exhibits 99.1 and 99.2 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any other filing under the Securities Act of 1933 or the Exchange Act.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On May 1, 2024, the Company amended its Amended and Restated Bylaws (as amended, the “Bylaws”). The Bylaws were amended to update certain procedural requirements relating to director nominations by shareholders in light of the adoption and effectiveness of Rule 14a-19 promulgated under the Exchange Act.

The Bylaws provide, among other things, that (a) a shareholder who solicits proxies in support of director nominees must comply with Rule 14a-19, including but not limited to the minimum solicitation and notice requirements of Rule 14a-19; (b) if a shareholder provides notice pursuant to Rule 14a-19 with respect to a proposed nominee and subsequently fails to comply with requirements of Rule 14a-19, the Company will disregard the nomination of the proposed nominee; and (c) a shareholder directly or indirectly soliciting proxies from other shareholders must use a proxy card color other than white.

The foregoing summary description of the Bylaws is qualified in its entirety by reference to the Bylaws filed as Exhibit 3.1 hereto and incorporated herein by reference.

Item 8.01 Other Events.

On May 1, 2024, the Board determined that the Company’s Annual Meeting of Shareholders will take place at 9:00 a.m., local time, on Tuesday, December 10, 2024, at 6 Logue Court, Greenville, South Carolina 29615 (the “December 2024 Annual Meeting”). All other relevant information concerning the December 2024 Annual Meeting will be included in the Company’s proxy materials to be distributed in connection with the December 2024 Annual Meeting, which will be filed with the Securities and Exchange Commission (“SEC”) and made available to the Company’s shareholders at a later date.

Because the date of the December 2024 Annual Meeting is more than 30 days prior to the anniversary date of the Company’s Annual Meeting of Shareholders held on January 25, 2024, the Company is providing in this Current Report on Form 8-K the due dates for submissions of qualified shareholder proposals and shareholder director nominations.

To be eligible for inclusion in the proxy materials for the December 2024 Annual Meeting pursuant to Rule 14a-8 of the Exchange Act, shareholder proposals (including any additional information specified in the Bylaws) must be received by our Corporate Secretary at the Company’s principal executive offices no later than August 12, 2024.

A shareholder proposal or director nomination (including nominations pursuant to Rule 14a-19 under the Exchange Act) outside of Rule 14a-8 under the Exchange Act and pursuant to the Bylaws must be received by our Corporate Secretary at the Company’s principal executive offices by September 11, 2024.

Shareholder proposals and shareholder director nominations must comply with all applicable requirements set forth in the rules and regulations of the SEC, the Exchange Act, and the Bylaws. Any stockholder proposal for inclusion in the Company’s proxy materials, notice of proposed business to be brought before the December 2024 Annual Meeting or director nomination should be sent to the Corporate Secretary and the following address: ScanSource, Inc., 6 Logue Court, Greenville, South Carolina 29615, Attention: Shana C. Smith, Corporate Secretary.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

3.1 - Amended and Restated Bylaws.

99.1 – Press release issued by ScanSource, Inc. on May 7, 2024. The information contained in the attached exhibit is unaudited and should be read in conjunction with the Company’s annual and quarterly reports filed with the Securities and Exchange Commission.

99.2 – Earnings Infographic for the financial results conference call held on May 7, 2024. The information contained in the attached exhibit is unaudited and should be read in conjunction with the Company’s annual and quarterly reports filed with the Securities and Exchange Commission.


Exhibit Number			Description

3.1			Amended and Restated Bylaws
99.1			Press release
99.2			Earnings Infographic

104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ScanSource, Inc.

Date:

May 7, 2024

/s/ STEVE JONES

Steve Jones

Senior Executive Vice President and Chief Financial Officer

AMENDED AND RESTATED BYLAWS OF SCANSOURCE, INC. Amended through January 27May 1, 20222024 ARTICLE I OFFICES AND REGISTERED AGENT Section 1.01. Principal Office. The Corporation shall maintain its Principal Office in the City of Greenville, State of South Carolina or such other place as designated from time to time by the Board of Directors for the principal executive offices of the Corporation. Section 1.02. Registered Office. The Corporation shall maintain a Registered Office as required by the South Carolina Business Corporation Act of 1988, as amended from time to time (the “Act”), at a location in the State of South Carolina designated by the Board of Directors from time to time. In the absence of a contrary designation by the Board of Directors, the Registered Office of the Corporation shall be located at its Principal Office. Section 1.03. Other Offices. The Corporation may have such other offices within and without the State of South Carolina as the business of the Corporation may require from time to time. The authority to establish or close such other offices may be delegated by the Board of Directors to one or more of the Corporation’s Officers. Section 1.04. Registered Agent. The Corporation shall maintain a Registered Agent as required by the Act who shall have a business office at the Corporation’s Registered Office. The Registered Agent shall be designated by the Board of Directors from time to time to serve at its pleasure. In the absence of such designation the Registered Agent shall be the Corporation’s Secretary. Section 1.05. Filings. In the absence of directions from the Board of Directors to the contrary, the Secretary of the Corporation shall cause the Corporation to maintain currently all filings in respect of the Registered Office and Registered Agent with the Secretary of State as required by the Act or otherwise by law. ARTICLE II SHAREHOLDERS Section 2.01. Annual Meetings. An annual meeting of the Corporation’s shareholders shall be held once each fiscal year for the purpose of electing Directors and for the transaction of such other business as may properly come before the meeting. No matters other than those proposed by the Board of Directors may be brought before the annual meeting by any shareholder unless written notice of such other matters, together with an adequate description thereof, shall have been provided to the corporation in compliance with Section 2.13. The annual meeting shall be held at the time and place designated by the Chairman of the Board or the Board of Directors from time to time. Section 2.02. Special Meetings. Special meetings of the Corporation’s shareholders may be called for any one or more lawful purposes by the Corporation’s Chief Executive Officer, the Chairman of the Board, or a majority of the Directors. Only such business shall be conducted at a special shareholder meeting as shall have been brought before the meeting pursuant to the Corporation’s notice of the meeting. Special meetings of the shareholders shall be held at a time and location as reflected in the notice of the meeting provided for hereinafter. Section 2.03. Notice of Meetings. Written or electronic notice of all meetings of shareholders shall be delivered not less than ten nor more than sixty days before the meeting date, (or according to any minimum notice requirement under Rule 14a-19), either personally, by mail, or by any other method permitted under the Act, by or at the direction of the Chairman of the Board or the Board of Directors, to all shareholders of record entitled to vote at Exhibit 3.1

such meeting. If mailed, the notice shall be deemed to be delivered when deposited with postage thereon prepaid in the United States mail, addressed to the shareholder at the shareholder’s address as it appears on the Corporation’s records. Such notice shall state the date, time, and place of the meeting and, in the case of a special meeting, the purpose or purposes for which such meeting was called. Electronic notice may be communicated to a shareholder by email or any other form of wire or wireless communication permitted by the Act. In addition, so long as the Corporation is a public corporation (as defined in the Act), a notice to a shareholder which accompanies a proxy statement or information statement is effective when it is addressed and mailed or transmitted in any manner which satisfies the applicable rules of the Securities and Exchange Commission (the “SEC”) requiring delivery of a proxy statement including, without limitation, rules regarding delivery to shareholders sharing an address and implied consent to such delivery. Any previously scheduled meeting of the shareholders may be postponed, and any special meeting of the shareholders may be canceled, by resolution of the Board of Directors, upon public notice given prior to the date previously scheduled for such meeting of shareholders. Section 2.04. Quorum. Except as may otherwise be required by the Act or the Corporation’s Articles of Incorporation (as amended from time to time, the “Articles of Incorporation”), at any meeting of shareholders the presence, in person or by proxy, of the holders of a majority of the outstanding shares entitled to vote thereat shall constitute a quorum for the transaction of any business properly before the meeting. Shares entitled to vote as a separate voting group on a matter may take action at a meeting on such matter only if a quorum of the shares in the separate voting group are present in person or by proxy at the meeting. Except as may otherwise be required by law or the Articles of Incorporation, at any meeting of shareholders the presence, in person or by proxy, of the holders of a majority of the outstanding shares in a separate voting group entitled to vote thereat as a separate voting group, if any, shall constitute a quorum of such separate voting group for purposes of such matter. In the absence of a quorum a meeting may be adjourned from time to time, in accordance with the provisions concerning adjournments contained elsewhere in these Bylaws, by the holders of a majority of the shares represented at the meeting in person or by proxy. At such adjourned meeting a quorum of shareholders may transact such business as might have been properly transacted at the original meeting. Section 2.05. Transaction of Business. Business transacted at an annual meeting of shareholders may include all such business as may properly come before the meeting. Business transacted at a special meeting of shareholders shall be limited to the purposes stated in the notice of the meeting. Section 2.06. Shareholders of Record. For the purpose of determining shareholders entitled to vote at any meeting of shareholders, or entitled to receive dividends or other distributions, or in connection with any other proper purpose requiring a determination of shareholders, the Board of Directors shall by resolution fix a record date for such determination. The date shall be not more than seventy and not less than ten days prior to the date on which the activity requiring the determination is to occur. The shareholders of record appearing in the Corporation’s records at the close of business on the record date so fixed shall constitute the shareholders of right in respect of the activity in question. In the absence of action by the Board of Directors to fix a record date, the record date shall be ten days prior to the date on which the activity requiring a determination of shareholders is to occur. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting to a date not later than one hundred twenty days after the date fixed for the original meeting; provided, however, that the Board of Directors may in its discretion fix a new record date for any adjourned meeting and shall fix a new record date for any meeting adjourned to a date more than one hundred twenty days after the date of the original meeting. Section 2.07. Voting. Except as may otherwise be required by the Act or the Articles of Incorporation, each shareholder entitled to vote at any meeting of shareholders shall be entitled to one vote for each share held by such shareholder that has voting power upon the matter in question. The vote of the holders of a majority of the votes cast shall decide any question brought before such meeting, unless otherwise provided by the Act, the Articles of Incorporation, or these Bylaws. Section 2.08 Voting Inspectors. For each meeting of shareholders one or more persons shall be appointed to serve as voting inspectors by the Board of Directors. The voting inspectors may include one or more representatives of the Corporation’s Transfer Agent. The voting inspectors shall by majority decision resolve all disputes which may arise concerning the qualification of voters, the validity of proxies, the existence of a quorum, the voting power of shares, Exhibit 3.1

and the acceptance, rejection, and tabulation of votes. Each voting inspector shall take an oath to execute his or her duties impartially and to the best of his or her ability. Such oath shall be administered by the presiding officer to each voting inspector following the call to order and before a voting inspector enters upon the discharge of his or her duties. Section 2.09. Adjournments. The chairman of the meeting may adjourn a meeting from time to time to a date, time, and place fixed by the chairman of the meeting and announced at the original meeting prior to adjournment. If a new record date is set pursuant to Section 2.06 following an adjournment a notice of the adjourned meeting will be sent to the shareholders of record as of that date. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. Section 2.10. Action Without Meeting. Holders of record of voting shares may take action without meeting by written consent as to such matters and in accordance with such requirements and procedures as may be permitted by the Act. Section 2.11. Proxies. At all meetings of shareholders, a shareholder may vote in person or by proxy. Such proxy shall be filed with the Secretary of the Corporation or other person authorized to tabulate votes before or at the time of the meeting. A proxy must be filed (a) in writing executed by the shareholder or by his or her duly authorized attorney in fact, (b) by a telegram or cablegram appearing to have been transmitted by the shareholder, or (c) by an electronic transmission of appointment; provided, however that the Board of Directors may also establish procedures by which shareholders can file proxies with the Secretary by telecopier facsimile or electronic transmission and that any electronic transmission must contain or be accompanied by sufficient information to determine that the transmission appointing the proxy is authorized. No proxy shall be valid after three years from the date of its execution unless it qualifies as an irrevocable proxy under the Act or the proxy provides for a longer period. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary. Any shareholder directly or indirectly soliciting proxies from other shareholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board of Directors. Section 2.12. Voting of Shares by Certain Holders. Shares standing in the name of another corporation may be voted, either in person or by proxy, by the officer, agent, or proxy as the bylaws of that corporation may prescribe, or in the absence of such provision, as the board of directors of that corporation may determine. Shares held by an administrator, executor, guardian or conservator may be voted by him or her, either in person or by proxy, without a transfer of such shares into his or her name. Shares standing in the name of a trustee may be voted by such trustee, either in person or by proxy, but no trustee shall be entitled to vote shares held by such trustee without a transfer of the shares into such trustee’s name as trustee. Shares standing in the name of a receiver may be voted, either in person or by proxy, by the receiver, and shares held by or under the control of a receiver may be voted, either in person or by proxy, by the receiver without the transfer thereof into such receiver’s name if authority to do so is contained in an appropriate order of the court by which such receiver was appointed. A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote, either in person or by proxy, the shares so transferred. Section 2.13. Advance Notice of Shareholder Nominees for Director and Other Shareholder Proposals. (a) The matters to be considered and brought before any annual or special meeting of shareholders of the Corporation shall be limited to only such matters, including the nomination and election of directors, as shall be brought properly before such meeting in compliance with the procedures set forth in this Section 2.13. (b) For any matter to be brought properly before any annual meeting of shareholders, the matter must be (i) specified in the notice of the annual meeting given by or at the direction of the Board of Directors, (ii) otherwise brought before the annual meeting by or at the direction of the Board of Directors or (iii) brought before the annual meeting Exhibit 3.1

by a shareholder who is a shareholder of record of the Corporation on the date the notice provided for in this Section 2.13 is delivered to the Secretary of the Corporation, who is entitled to vote at the annual meeting and who complies with the procedures set forth in this Section 2.13. In addition to any other requirements under applicable law, the Articles of Incorporation and Bylaws, written notice (the “Shareholder Notice”) of any nomination or other proposal must be timely and any proposal, other than a nomination, must constitute a proper matter for shareholder action. To be timely, the Shareholder Notice must be delivered to the Secretary of the Corporation at the principal executive office of the Corporation not less than 90 nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year; provided, however, that if (and only if) the annual meeting is not scheduled to be held within a period that commences 30 days before such anniversary date and ends within 60 days after such anniversary date (an annual meeting date outside such period being referred to herein as an “Other Meeting Date”), the Shareholder Notice shall be given in the manner provided herein by the later of the close of business on (i) the date 90 days prior to such Other Meeting Date or (ii) the tenth day following the date such Other Meeting Date is first publicly announced or disclosed. A Shareholder Notice must contain the following information: (i) whether the shareholder is providing the notice at the request of a beneficial holder of shares, whether the shareholder, any such beneficial holder or any nominee has any agreement, arrangement or understanding with, or has received any financial assistance, funding or other consideration from, any other person with respect to the investment by the shareholder or such beneficial holder in the Corporation or the matter the Shareholder Notice relates to, and the details thereof, including the name of such other person (the shareholder, any beneficial holder on whose behalf the notice is being delivered, any nominees listed in the notice and any persons with whom such agreement, arrangement or understanding exists or from whom such assistance has been obtained are hereinafter collectively referred to as “Interested Persons”), (ii) the name and address of all Interested Persons, (iii) a complete listing of the record and beneficial ownership positions (including number or amount) of all equity securities and debt instruments, whether held in the form of loans or capital market instruments, of the Corporation or any of its subsidiaries held by all Interested Persons, (iv) whether and the extent to which any hedging, derivative or other transaction is in place or has been entered into within the prior six months preceding the date of delivery of the Shareholder Notice by or for the benefit of any Interested Person with respect to the Corporation or its subsidiaries or any of their respective securities, debt instruments or credit ratings, the effect or intent of which transaction is to give rise to gain or loss as a result of changes in the trading price of such securities or debt instruments or changes in the credit ratings for the Corporation, its subsidiaries or any of their respective securities or debt instruments (or, more generally, changes in the perceived creditworthiness of the Corporation or its subsidiaries), or to increase or decrease the voting power of such Interested Person, and if so, a summary of the material terms thereof, and (v) a representation that the shareholder is a holder of record of stock of the Corporation that would be entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose the matter set forth in the Shareholder Notice. As used herein, “beneficially owned” has the meaning provided in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Shareholder Notice shall be updated not later than 10 days after the record date for the determination of shareholders entitled to vote at the meeting to provide any material changes in the foregoing information as of the record date. Any Shareholder Notice relating to the nomination of directors must also contain (i) the information regarding each nominee required by paragraphs (a), (e) and (f) of Item 401 of Regulation S-K adopted by the Securities and Exchange CommissionSEC (or the corresponding provisions of any successor regulation), (ii) each nominee’s signed consent to serve as a director of the Corporation if elected, and (iii) whether each nominee is eligible for consideration as an independent director under the relevant standards contemplated by Item 407(a) of Regulation S-K (or the corresponding provisions of any successor regulation). The Corporation may also require any proposed nominee to furnish such other information, including completion of the Corporation’s directors questionnaire, as it may reasonably require to determine whether the nominee would be considered “independent” as a director or as a member of the audit committee of the Board of Directors under the various rules and standards applicable to the Corporation. Any Shareholder Notice with respect to a matter other than the nomination of directors must contain (i) the text of the proposal to be presented, including the text of any resolutions to be proposed for consideration by shareholders and (ii) a brief written statement of the reasons why such shareholder favors the proposal. Notwithstanding anything in this Section 2.13(b) to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and either all of the nominees for director or the size of the increased Board of Directors is not publicly announced or disclosed by the Corporation at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a Shareholder Notice shall also be considered timely hereunder, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary of the Corporation at the principal executive office of the Corporation not later than the close of business on the tenth day following the first date all of such nominees or the size of the increased Board of Directors shall have been publicly announced or disclosed. Exhibit 3.1

(c) For any matter to be brought properly before a special meeting of shareholders, the matter must be set forth in the Corporation’s notice of the meeting given by or at the direction of the Board of Directors. In the event that the Corporation calls a special meeting of shareholders for the purpose of electing one or more persons to the Board of Directors, any shareholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of the meeting, if the Shareholder Notice required by Section 2.13(b) hereof shall be delivered to the Secretary of the Corporation at the principal executive office of the Corporation not later than the close of business on the tenth day following the day on which the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting is publicly announced or disclosed. (d) For purposes of this Section 2.13, a matter shall be deemed to have been “publicly announced or disclosed” if such matter is disclosed in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange CommissionSEC. (e) Only persons who are nominated in accordance with (i) the procedures set forth in this Section 2.13 and (ii) the requirements of Regulation 14A under the Exchange Act including, without limitation, the requirements of Rule 14a-19 (as such regulations and rules may be amended from time to time by the SEC including any interpretations by the staff of the SEC relating thereto), shall be eligible for election as directors of the Corporation. In no event shall the postponement or adjournment of an annual meeting already publicly noticed, or any announcement of such postponement or adjournment, commence a new period (or extend any time period) for the giving of notice as provided in this Section 2.13. This Section 2.13 shall not apply to (i) shareholders proposals made pursuant to Rule 14a-8 under the Exchange Act or (ii) the election of directors selected by or pursuant to the provisions of Article 3(b) of the Articles of Incorporation relating to the rights of the holders of any class or series of stock of the Corporation having a preference over the Common Stock as to dividends or upon liquidation to elect directors under specified circumstances. (f) The person presiding at any meeting of shareholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall have the power and duty to determine whether notice of nominees and other matters proposed to be brought before a meeting has been duly given in the manner provided in this Section 2.13 and Rule 14a-19 and, if not so given, shall direct and declare at the meeting that such nominees and other matters are not properly before the meeting and shall not be considered. Notwithstanding the foregoing provisions of this Section 2.13, if the shareholder or a qualified representative of the shareholder does not appear at the annual or special meeting of shareholders of the Corporation to present any such nomination, or make any such proposal, such nomination or proposal shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Corporation. (g) In addition to the requirements set forth in this Section 2.13, unless otherwise required by law, (i) no shareholder shall solicit proxies in support of director nominees other than the Corporation’s nominees unless such shareholder has complied with Rule 14a-19 promulgated under the Exchange Act in connection with the solicitation of such proxies in all respects, including but not limited to the minimum solicitation and notice requirements thereof. If any shareholder (1) provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act and (2) subsequently fails to comply with the requirements of Rules 14a-19(a)(2) and Rule 14a-19(a)(3) promulgated under the Exchange Act, then the Corporation shall disregard any proxies or votes solicited for such shareholder’s candidates. Upon request by the Corporation, if any shareholder provides notice pursuant to Rule14a-19(b) promulgated under the Exchange Act, such shareholder shall deliver to the Corporation, no later than five (5) business days prior to the applicable meeting, reasonable evidence that it has met the requirements of Rule 14a-19(a)(3) and 14a-19(b). Section 2.14. Inspection Rights. The shareholders shall have only such rights to inspect records of this Corporation to the extent, and according to the procedures and limitations, prescribed by the Act. Section 2.15. Conduct of Meetings. The Chairman of the Board of Directors shall be the chairman of each meeting of shareholders. In the absence of the Chairman, the meeting shall be chaired by such person as shall be appointed by the Nominating Committee of the Board of Directors or, in the absence of such appointment, an officer of the Exhibit 3.1

Corporation in accordance with the following order: Chief Executive Officer, Vice Chairman of the Board, President and Vice President. In the absence of all such officers, the meeting shall be chaired by an officer of the Corporation chosen by the vote of a majority in interest of the shareholders present in person or represented by proxy and entitled to vote thereat. The Secretary or in his or her absence an Assistant Secretary or in the absence of the Secretary and all Assistant Secretaries a person whom the chairman of the meeting shall appoint shall act as secretary of the meeting and keep a record of the proceedings thereof. The Board of Directors of the Corporation shall be entitled to make such rules or regulations for the conduct of meetings of shareholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to shareholders of record of the Corporation and their duly authorized and constituted proxies and such other persons as the chairman shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comment by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot. Unless, and to the extent, determined by the Board of Directors or the chairman of the meeting, meetings of shareholders shall not be required to be held in accordance with rules of parliamentary procedure. Section 2.16. Dissenters’ Rights. Each shareholder shall have the right to dissent from, and obtain payment for, the shareholder’s shares only when so authorized by the Act. ARTICLE III DIRECTORS Section 3.01. Authority. The Board of Directors shall have ultimate authority over the conduct and management of the business and affairs of the Corporation. Section 3.02. Number. The number of Directors that shall constitute the whole Board of Directors shall be established from time to time without amendment to these Bylaws by resolution of the Board of Directors. The established number of Directors may be increased or decreased from time to time by resolution of the Board of Directors. No decrease in the established number of Directors shall have the effect of shortening the term of any incumbent Director. Section 3.03. Tenure. Each Director shall hold office from the date of such Director’s election and qualification until such Director’s successor shall have been duly elected and qualified, or until such Director’s earlier removal, resignation, death, or incapacity. An election of all Directors by the shareholders shall be held at each annual meeting of the Corporation’s shareholders. A Director need not be a shareholder or a resident of the State of South Carolina. In case of any increase in the number of Directors, the additional directorships so created may be filled in the first instance in the same manner as a vacancy in the Board of Directors. Section 3.04. Removal. Any Director may be removed from office, with or without cause, if by a vote of the shareholders the number of votes cast to remove such Director exceeds the number of votes cast not to remove such Director. A Director may be removed from office by the shareholders only at a meeting called for the purpose of removing such Director and the meeting notice must state the purpose, or one of the purposes, of the meeting is removal of the Director. Section 3.05. Vacancies. The Board of Directors may by majority vote of the Directors then in office, regardless of whether such Directors constitute a quorum, elect a new Director to fill a vacancy on the Board of Directors; provided, however, that no person may be elected to fill a vacancy created by such person’s removal from office pursuant to these Bylaws. Exhibit 3.1

Section 3.06. Annual and Regular Meetings. An annual meeting of the Board of Directors shall be called and held for the purpose of annual organization, appointment of Officers and committees, and transaction of any other business. If such meeting is held promptly after and at the place specified for the annual meeting of shareholders, no notice of the annual meeting of the Board of Directors need be given. Otherwise, such annual meeting of the Board of Directors shall be held at such time (at any time prior to and not more than thirty days after the annual meeting of shareholders) and place as may be specified in the notice of the meeting. The Board of Directors may by resolution provide for the holding of additional regular meetings without notice other than such resolution provided, however, the resolution shall fix the dates, times, and places (which may be anywhere within or without the State of South Carolina) for these regular meetings. Except as otherwise provided by law, any business may be transacted at any annual or regular meeting of the Board of Directors. Section 3.07. Special Meetings; Notice of Special Meeting. Special meetings of the Board of Directors may be called for any lawful purpose or purposes by two Directors or by the Chief Executive Officer of the Corporation. The person(s) calling a special meeting shall give, or cause to be given, to each Director at his or her business address, reasonable notice of the date, time and place of the meeting by any normal means of communication. The notices may, but need not, describe the purpose of the meeting. If mailed, the notice shall be deemed to be delivered when deposited in the United States mail addressed to the Director’s business address, with postage thereon prepaid. If notice is given by telecopier or other electronic transmission, the notice shall be deemed delivered when the notice is transmitted to a telecopier facsimile receipt number or electronic mail address designated by the receiving Director. Any time or place fixed for a special meeting must permit participation in the meeting by means of telecommunications as authorized in Section 3.09 below. Section 3.08. Waiver of Notice of Special Meetings. Notice of a special meeting need not be given to any Director who signs a waiver of notice either before or after the meeting. A Director’s attendance at or participation in a meeting waives any required notice to him of the meeting unless the Director at the beginning of the meeting (or promptly upon his arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting. Section 3.09. Participation by Telecommunications. Any Director may participate in, and be regarded as present at, any meeting of the Board of Directors by means of conference telephone or any other means of communication by which all persons participating in the meeting can hear each other at the same time. Section 3.10. Quorum. A majority of Directors in office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present. Section 3.11. Action. The Board of Directors shall take action pursuant to resolutions adopted by the affirmative vote of a majority of the Directors participating in a meeting at which a quorum is present, or the affirmative vote of a greater number of Directors where required by the Articles of Incorporation or otherwise by law. Section 3.12. Action Without Meeting. Any action required or permitted by the Act and required or permitted to be taken by the Board of Directors at an annual, regular, or special meeting may be taken without a meeting if the action is assented to by all members of the Board. The action may be evidenced by one or more written consents describing the action taken, signed by each Director, and included in the minutes or filed with the corporate records reflecting the action taken. Action evidenced by written consents under this Section 3.12 is effective when the last Director signs the consent, unless the consent specifies a different effective date. A consent signed under this Section 3.12 has the effect of a meeting vote and may be described as such in any document. Section 3.13. Presumption of Assent. A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is considered to have assented to the action taken unless: (1) he objects at the beginning of the meeting (or promptly upon his arrival) to holding it or transacting business at the meeting; (2) his dissent or abstention from the action taken is entered in the minutes of the meeting; or (3) he delivers written notice of his dissent or abstention to the presiding officer of the meeting before its Exhibit 3.1

adjournment or to the corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken. Section 3.14. Executive Committee. The Board of Directors may by resolution, adopted in accordance with the Act, designate and delegate authority to an Executive Committee with any or all such authority as may be permitted by the Act. The Executive Committee may be a standing committee appointed annually. The Executive Committee, if appointed, shall be composed of two or more members, who shall serve at the pleasure of the Board of Directors. All voting members of the Executive Committee must be Directors of the Corporation appointed by the Board of Directors in accordance with Section 33-8-250 of the Act. The Chairman of the Executive Committee shall be elected by the Board of Directors from the Directors appointed to the Executive Committee. The Chairman of the Executive Committee shall have such duties and authority as set forth by the Board of Directors. The duties, constitution, and procedures of the Executive Committee shall be prescribed by the Board of Directors. Section 3.15. Other Committees. The Board of Directors may from time to time by resolution, adopted in accordance with the Act, designate and delegate authority to an Audit Committee, a Compensation Committee, and other committees, with any or all such authority as may be permitted by the Act. Any such committee may be designated as a standing committee appointed annually or as a special committee for specific circumstances or transactions with a limited duration. Each committee shall be composed of two or more members, who shall serve at the pleasure of the Board of Directors. All committee members must be Directors of the Corporation appointed by the Board of Directors in accordance with Section 33-8-250 of the Act. The Chairman of the Board shall be given notice of all committee meetings and may in the Chairman’s discretion attend meetings of any committee to which he or she is not appointed as a member. The duties, constitution, and procedures of any committee shall be prescribed by the Board of Directors. The Board of Directors shall designate one member of each committee as its chairman. Section 3.16. Committee Meetings. A majority of each committee’s voting members shall constitute a quorum for the transaction of business by the committee, and each committee shall take action pursuant to resolutions adopted by a majority of the committee’s voting members participating in a meeting at which a quorum of the committee is present. Each committee may also take action without a meeting if a consent in writing, setting forth the action taken, shall be signed by all of the committee’s voting members in accordance with the procedures authorized by the Act. Special meetings of any committee may be called at any time by any Director who is a member of the committee or by any person entitled to call a special meeting of the full Board of Directors. Except as otherwise provided in this section, the conduct of all meetings of any committee, including notice thereof, and the taking of any action by such committee, shall be governed by Sections 3.06 through 3.13 of this Article. Section 3.17. Authority. Unless limited by the Articles of Incorporation, each committee may exercise those aspects of the authority of the Board of Directors which the Board of Directors confers upon such committee in the resolution creating the committee. Provided, however, a committee may not: (1) authorize distributions; (2) approve or propose to shareholders action that the Act requires be approved by shareholders; (3) fill vacancies on the Board of Directors or on any of its committees; (4) amend the Articles of Incorporation pursuant to the authority of Directors; (5) adopt, amend, or repeal bylaws; (6) approve a plan of merger not requiring shareholder approval; (7) authorize or approve reacquisition of shares, except according to a formula or method prescribed by the Board of Directors; or (8) authorize or approve the issuance or sale or contract for sale of shares or determine the designation and relative rights, preferences, and limitations of a class or series of shares, except that the Board of Directors may authorize a committee (or an executive officer of the Corporation) to do so within limits specifically prescribed by the Board of Directors. Section 3.18. Compensation. The Board of Directors may by resolution authorize payment to all Directors of a uniform fixed sum or other benefit, including equity awards, such as capital stock of the Corporation, options to purchase capital stock of the Corporation, or other forms of equity, for attendance at each meeting or a stated salary Exhibit 3.1

(which need not be uniform) as a Director, or a combination thereof, in such amounts as the Board may determine from time to time. The Board of Directors may, in its discretion, authorize payments of greater amounts or different forms to the Chairman of the Board or particular Directors or committee members than are paid to other Directors. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor. The Board of Directors may also by resolution authorize the payment or reimbursement of all expenses of each Director related to the Director’s attendance at meetings or other service to the Corporation. Section 3.19. Notification of Nominations. Nominations for the election of Directors may be made by the Board of Directors or by any shareholder entitled to vote for the election of directors. Any shareholder entitled to vote for the election of directors at a meeting may nominate persons for election as Directors only by complying with the procedures set forth above in Section 2.13. ARTICLE IV OFFICERS Section 4.01. In General. The Officers of the Corporation shall consist of a Chief Executive Officer, a President, one or more Vice Presidents, a Chief Financial Officer, a Secretary, a Treasurer, and such additional vice presidents, assistant secretaries, assistant treasurers and such other officers and agents as the Board of Directors deems advisable from time to time. The Chairman of the Board may by action of the Board be an officer of the Corporation. All Officers shall be appointed by the Board of Directors to serve at the pleasure of the Board. Except as may otherwise be provided by the Act or in the Articles of Incorporation, any Officer may be removed by the Board of Directors at any time, with or without cause. Any vacancy, however occurring, in any office may be filled by the Board of Directors for the unexpired term. One person may hold two or more offices. Each Officer shall exercise the authority and perform the duties as may be set forth in these Bylaws, the Board of Directors or by direction of an officer authorized by the Board of Directors to prescribe the duties of other officers. Section 4.02. Chairman of the Board. The Board of Directors shall elect from the Directors a Chairman of the Board to serve at the pleasure of the Board of Directors. The Chairman of the Board shall whenever possible preside at all meetings of shareholders and all meetings of the Board of Directors. Except as otherwise provided herein and as may be specifically limited by resolution of the Board of Directors or Executive Committee, the Chairman of the Board may execute on the Corporation’s behalf any and all contracts, agreements, notes, bonds, deeds, mortgages, certificates, instruments, and other documents. The Chairman of the Board shall exercise such additional authority and duties as set forth in these Bylaws and as the Board of Directors shall determine from time to time. Section 4.03. Chief Executive Officer. The Chief Executive Officer, subject to the authority of the Board of Directors, shall manage the business and affairs of the Corporation. The Chief Executive Officer shall see that the resolutions of the Board of Directors are put into effect. Except as otherwise provided herein and as may be specifically limited by resolution of the shareholders or the Board of Directors or an authorized committee thereof, the Chief Executive Officer shall have full authority to execute on the Corporation’s behalf any and all contracts, agreements, notes, bonds, deeds, mortgages, certificates, instruments, and other documents. The Chief Executive Officer shall also perform such other duties and may exercise such other powers as are incident to the office of Chief Executive Officer and as are from time to time assigned to him or her by the Act, these Bylaws, the Board of Directors, or an authorized committee thereof. Section 4.04. President. The President, subject to the authority of the Board of Directors and the Chief Executive Officer, shall manage the business and affairs of the Corporation. The President shall serve under the direction of the Chief Executive Officer. Except as otherwise provided herein and as may be specifically limited by resolution of the shareholders or the Board of Directors or an authorized committee thereof, the President shall have full authority to execute on the Corporation’s behalf any and all contracts, agreements, notes, bonds, deeds, mortgages, certificates, instruments, and other documents. The President shall also perform such other duties and may exercise such other powers as are incident to the office of President and as are from time to time assigned to him or her by the Act, these Bylaws, the Board of Directors or an authorized committee thereof, or the Chief Executive Officer. Section 4.05. Chief Financial Officer. The Chief Financial Officer, subject to the authority of the Board of Directors, the Chief Executive Officer, and the President, shall be the chief financial officer of the Corporation and Exhibit 3.1

shall perform all of the duties customary to that office. The Chief Financial Officer shall be responsible for all of the Corporation’s financial affairs, subject to the supervision and direction of the Chief Executive Officer and President, and shall have and perform such further powers and duties as the Board of Directors may, from time to time, prescribe and as the Chief Executive Officer or President may, from time to time, delegate. The Chief Financial Officer shall also perform such other duties and may exercise such other powers as are incident to the office of Chief Financial Officer and as are from time to time assigned to him or her by the Act, these Bylaws, the Board of Directors or an authorized committee thereof, or the Chief Executive Officer. Section 4.06. Vice Presidents. Except as otherwise determined by the Board of Directors or the Chief Executive Officer, each Vice President shall serve under the direction of the President and the Chief Executive Officer. Except as otherwise provided herein, each Vice President shall perform such duties and may exercise such powers as are incident to the office of vice president and as are from time to time assigned to him or her by the Act, these Bylaws, the Board of Directors, the Chairman of the Board, the President or the Chief Executive Officer. Section 4.07. Secretary. Except as otherwise provided by these Bylaws or determined by the Board of Directors, the Secretary shall serve under the direction of the Chief Executive Officer. The Secretary shall whenever possible attend all meetings of the shareholders and the Board of Directors, and whenever the Secretary cannot attend such meetings, such duty shall be delegated by the presiding officer for such meeting to a duly authorized assistant secretary. The Secretary shall record or cause to be recorded under the Secretary’s general supervision the proceedings of all such meetings and any other actions taken by the shareholders or the Board of Directors (or by any committee of the Board in place of the Board) in a book or books (or similar collection) to be kept for such purpose. The Secretary shall give, or cause to be given, all notices in connection with such meetings. The Secretary shall be the custodian of the Corporate seal and affix the seal to any document requiring it, and to attest thereto by signature. The Secretary may delegate the Secretary’s authority to affix the Corporation’s seal and attest thereto by signature to any Assistant Secretary. The Board of Directors may give general authority to any other officer or specified agent to affix the Corporation’s seal and to attest thereto by signature. Unless otherwise required by law, the affixing of the Corporation’s seal shall not be required to bind the Corporation under any documents duly executed by the Corporation and the use of the seal shall be precatory in the discretion of the Corporation’s duly authorized signing officers. The Secretary shall properly keep and file, or cause to be properly kept and filed under the Secretary’s supervision, all books, reports, statements, notices, waivers, proxies, tabulations, minutes, certificates, documents, records, lists, and instruments required by the Act or these Bylaws to be kept or filed, as the case may be. The Secretary may when requested, and shall when required, authenticate any records of the Corporation. Except to the extent otherwise required by the Act, the Secretary may maintain, or cause to be maintained, such items within or without the State of South Carolina at any reasonable place. In the event the Board of Directors designates and engages a Transfer Agent, as permitted by these Bylaws, such duties of keeping such shareholder records and the like accepted by such Transfer Agent shall be deemed delegated from the Secretary to such Transfer Agent, but such Transfer Agent shall be subject to supervision of the Secretary. The Secretary shall perform such other duties and may exercise such other powers as are incident to the office of secretary and as are from time to time assigned to such office by the Act, these Bylaws, the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. Section 4.08. Treasurer. Except as otherwise provided by these Bylaws or determined by the Board of Directors or the Chief Executive Officer, the Treasurer shall serve under the direction of the Chief Financial Officer. The Treasurer shall, under the direction of the Chief Financial Officer, keep safe custody of the Corporation’s funds and securities, maintain and give complete and accurate books, records, and statements of account, give and receive receipts for moneys, and make deposits of the Corporation’s funds, or cause the same to be done under the Treasurer’s supervision. The Treasurer shall upon request report to the Board of Directors or the Chief Executive Officer on the financial condition of the Corporation. The Treasurer may be required by the Board of Directors or the Chief Executive Officer at any time and from time to time to give such bond as the Board of Directors or the Chief Executive Officer may determine. The Treasurer shall perform such other duties and may exercise such other powers as are incident to the office of treasurer and as are from time to time assigned to such office by the Act, these Bylaws, the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the Chief Financial Officer. Section 4.09. Assistant Officers. Except as otherwise provided by these Bylaws or determined by the Board of Directors or the Chief Executive Officer, the Assistant Secretaries and Assistant Treasurers, if any, shall serve under Exhibit 3.1

the immediate direction of the Secretary and the Treasurer, respectively, and under the ultimate direction of the Chief Executive Officer. The Assistant Officers shall assume the authority and perform the duties of their respective immediate superior officer as may be necessary at the direction of such immediately superior officer, or in the absence, incapacity, inability, or refusal of such immediate superior officer to act. The seniority of Assistant Officers shall be determined from their dates of appointment unless the Board of Directors or the Chief Executive Officer shall otherwise specify. Section 4.10. Salaries. The salaries and other compensation of the Corporation’s executive officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving a salary or other compensation by reason of the fact that such officer is also a Director of the Corporation. ARTICLE V INDEMNIFICATION Section 5.01. Scope. Every person who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that such person or a person of whom such person is the legal representative is or was a Director or Officer of the Corporation or is or was serving at the request of the Corporation or for its benefit as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust, or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under and pursuant to the Act (and regardless of whether such proceeding is by or in the right of the Corporation), against all expenses, liabilities, and losses (including without limitation attorneys’ fees, judgments, fines, and amounts paid or to be paid in settlement) suffered, or reasonably incurred by such person in connection therewith. Such right of indemnification shall be a contract right that may be enforced in any manner desired by such person. Such right of indemnification shall not be exclusive of any other right which such Directors, Officers, or representatives may have or hereafter acquire and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of shareholders, insurance, provision of law, or otherwise, as well as their rights under this Article V. The Corporation may contract in advance to provide indemnification. Section 5.02. Advances and Reimbursements. The determination that indemnification under this Article V is permissible and the evaluation as to the reasonableness of expenses in a specific case shall be made, in the case of a Director, as provided by the Act, and in the case of an Officer or other person indemnified under Section 5.03, if any, as provided in Section 5.03 of this Article; provided, however, that if a majority of the Directors of the Corporation has changed after the date of the alleged conduct giving rise to a claim for indemnification, such determination and evaluation shall, at the option of the person claiming indemnification, be made by special legal counsel agreed upon by the Board of Directors and such person. Unless a determination has been made that indemnification is not permissible, and upon receipt of such written affirmation as required by the Act from the person to be indemnified, the Corporation shall make advances and reimbursements for expenses incurred by a Director or Officer or other person indemnified under Section 5.03, if any, in a proceeding upon receipt of an undertaking from such person to repay the same if it is ultimately determined that such person is not entitled to indemnification. Such undertaking shall be an unlimited, unsecured general obligation of the Director or Officer and shall be accepted without reference to such person’s ability to make repayment. The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that a Director or Officer acted in such a manner as to make such person ineligible for indemnification. Section 5.03. Indemnification of Other Persons. The Corporation may, to a lesser extent or to the same extent that the Corporation is required to provide indemnification to its Directors and Officers, provide indemnification and make advances and reimbursements for expenses to (a) its employees, agents, and advisors, (b) the directors, officers, employees, agents, and advisors of its subsidiaries and predecessor entities, and (c) any person serving any other legal entity in any capacity at the request of the Corporation; and, if authorized by general or specific action of the Board of Directors, may contract in advance to do so. The determination that indemnification under this Section is permissible, the authorization of such indemnification, and the advance or reimbursement, if any, and the evaluation as to the reasonableness of expenses in a specific case, shall be made as authorized from time to time by general or specific action of the Board of Directors, which action may be taken before or after a claim for Exhibit 3.1

indemnification is made, or as otherwise provided by the Act. No person’s rights under Sections 5.01 or 5.02 of this Article shall be limited by the provisions of this Section 5.03. Section 5.04. Indemnification Plan. The Board of Directors may from time to time adopt an Indemnification Plan implementing the rights granted in Section 5.01. This Indemnification Plan shall set forth in detail any other mechanics for exercise of the indemnification rights granted in this Article V, and shall be binding upon all parties except to the extent it is proven to be inconsistent with these Bylaws or the Act. The absence of the adoption of such plan, however, shall not vitiate the effectiveness of the rights conferred by this Article V. Section 5.05. Insurance. The Board of Directors may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was a Director or Officer of the Corporation, or is or was serving at the request of the Corporation as a Director or Officer of another corporation, or as its representative in a partnership, joint venture, trust, or other enterprise, or any other person indemnified or described as the subject of potential indemnification in this Article V, against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. Section 5.06. Miscellaneous. Every reference in this Article V to persons who are or may be entitled to indemnification shall include all persons who formerly occupied any of the positions referred to and their respective heirs, executors, and administrators. Special legal counsel selected to make determinations under this Article V may be counsel for the Corporation. Indemnification pursuant to this Article V shall not be exclusive of any other right of indemnification to which any person may be entitled, including indemnification pursuant to valid contract, indemnification by legal entities other than the Corporation and indemnification under policies of insurance purchased and maintained by the Corporation or others. However, no person shall be entitled to indemnification by the Corporation to the extent prohibited by the Act or to the extent such person is indemnified by another, including an insurer; provided, however, that the Corporation may make advances and reimbursements, subject to appropriate repayment obligations, under Section 5.02 if the effectiveness of such other indemnification will be delayed. The provisions of this Article shall not be deemed to prohibit the Corporation from entering into contracts otherwise permitted by law with any individuals or legal entities, including those named above, for the purpose of conducting the business of the Corporation. Indemnification of any person under this Article V shall be implemented only in accordance with procedures and requirements mandated by the Act and by plans, if any, adopted pursuant to Section 5.04. Should the Act be amended subsequent to the date of these Bylaws so as to place limitations or restrictions on the indemnification rights granted to any person by this Article V, such restriction or limitation shall not apply to any indemnification provided by the Corporation for acts or events that occurred prior to the effective date of such revised statutory provision or provisions. If any provision of this Article V or its application to any person or circumstance is held invalid by a court of competent jurisdiction, the invalidity shall not affect other provisions or applications of this Article V, and to this end the provisions of this Article V are severable. ARTICLE VI TRANSACTIONS Section 6.01. Contracts. The Board of Directors may authorize any Officer or Officers, or agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Section 6.02. Loans. The Board of Directors may authorize any Officer or Officers, or agent or agents, to contract any indebtedness and grant evidence of indebtedness and collateral therefor in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Section 6.03. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select. Exhibit 3.1

ARTICLE VII STOCK Section 7.01. Certificates for Shares. Shares may be represented by certificates, but need not be so represented. Unless the Act expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates. Certificates representing shares of capital stock of the Corporation shall state upon the face thereof the name of the person to whom issued, the number of shares, the fact that the Corporation is organized under the laws of the State of South Carolina, and such other matters as the Board of Directors may approve or as may be required by the Act. Each certificate shall be signed by (a) any one of the Chairman of the Board, the Chief Executive Officer, the President, or a Vice President, and (b) by any one of the Secretary or an Assistant Secretary. Where a certificate is countersigned by (i) a Transfer Agent other than the Corporation or its employee, or (ii) a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any Officer whose facsimile signature has been placed upon a certificate shall have ceased to be such Officer before such certificate is issued it may be issued by the Corporation with the same effect as if he or she were such Officer at the date of issue. All certificates for shares shall be consecutively numbered. Certificates for shares of different classes, and different series within a class, to the extent authorized, if any, shall bear appropriate designations to identify the class or series as required by the Act. Section 7.02. Shares without Certificates. The Board of Directors of the Corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates in accord with the provisions of Chapter 8 of Title 36 of the South Carolina Uniform Commercial Code. Within a reasonable time after the issue or transfer of shares without certificates, the Corporation’s Transfer Agent shall send the shareholder a written statement containing the following information: (a) the name of the Corporation and a statement that it is organized under the laws of South Carolina; (b) the name of the person to whom the shares are issued; (c) the number and class of shares and the designation of the series, if any, of the shares; (d) if at such time the Corporation is authorized to issue different classes of shares or different series within a class, a summary of the designations, relative rights, preferences and limitations applicable to each class and the variations in rights, preferences and limitations determined for each series (and the authority of the Board of Directors to determine variations for future series) or, in lieu thereof, a statement that the Corporation will furnish the shareholder this information in writing, on request, and without charge; and (e) if applicable, a conspicuous notation that the shares are subject to a restriction on their transfer. Section 7.03. Stock Transfer Books. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issuance, shall be entered on the stock transfer books of the Corporation. Such stock transfer books shall be maintained by the Secretary or Transfer Agent as a record of the Corporation’s shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each shareholder. Section 7.04. Transfer of Shares. Subject to the provisions of the Act and to any transfer restrictions binding on the Corporation, transfer of shares of the Corporation shall be made only on the stock transfer books of the Corporation by the holder of record thereof or by such holder’s agent, attorney-in-fact or other legal representative, who shall furnish proper evidence of authority to transfer, upon surrender for cancellation of the certificate for such shares. Unless the Board of Directors in its discretion has by resolution established procedures, if any, by which a beneficial owner of shares held by a nominee may be recognized by the Corporation as the owner thereof, the person in whose name shares stand on the stock transfer books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes. The Corporation’s stock transfer books maintained by the Secretary or the Transfer Agent shall be conclusive in all such regards absent a determination by the Board of Directors of manifest error. All certificate surrendered to the Corporation for transfer shall be canceled. Section 7.05. New or Replacement Certificates. No new stock certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed, or mutilated certificate a substitute certificate may be issued therefor upon: (a) the making of an affidavit by the holder Exhibit 3.1

of record of the shares represented by such certificate setting forth the facts concerning the loss, theft, or mutilation thereof; (b) delivery of such bond and/or indemnity to the Corporation as the Secretary or Board of Directors may prescribe or as may be required by law; and (c) satisfaction of such other reasonable requirements as the Secretary or Board of Directors may prescribe. To the extent permitted by applicable law (including Section 36-8-405 of the South Carolina Uniform Commercial Code), a new certificate may be issued without requiring any bond when, in the judgment of the Board of Directors, it is not imprudent to do so; and without limiting the generality of the foregoing, the Secretary or the Board of Directors may in their discretion waive (except as prohibited by law) any bond requirement otherwise applicable where the aggregate fair market value of the shares represented by such lost, stolen, or mutilated certificate is less than five hundred dollars based upon indicia deemed reasonable by the waiving party. Section 7.06. Beneficial Owners. The Corporation shall be entitled to recognize the exclusive right of a person registered on its stock transfer books as the owner of shares to receive dividends or other distributions, and to vote as such owner, a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have express or other notice thereof, except as otherwise provided by the Act or by procedures, if any, established by resolution of the Board of Directors in its discretion by which a beneficial owner of shares held by a nominee may be recognized as the owner thereof. Such procedures, if any, shall also set forth the extent of such recognition. Section 7.07. Transfer Agent. The Board of Directors may, in its discretion, appoint an independent institutional Transfer Agent to serve as transfer agent and registrar for the Corporation’s stock at the pleasure of the Board. Such Transfer Agent shall assist the Corporation’s Secretary and voting inspectors in performance of their duties respecting shares of the Corporation’s stock. Such Transfer Agent shall maintain the Corporation’s stock transfer books and stock certificates in accordance with the Act, these Bylaws, instructions of the Board of Directors, and customary procedures consistently applied. Such Transfer Agent shall perform such other duties and shall be entitled to exercise such other powers, as may be assigned to the Transfer Agent from time to time by the Secretary or the Board of Directors. Section 7.08. Transfer Restrictions. The Secretary shall have full power and authority to place or cause to be placed on any and all stock certificates restrictive legends to the extent reasonably believed necessary or appropriate to ensure the Corporation’s compliance with federal or any state’s securities laws, and to issue to any Transfer Agent stop transfer orders to effect compliance with such legends. ARTICLE VIII EMERGENCY BYLAWS Section 8.01. Emergency Bylaws. Unless the Articles of Incorporation provide otherwise, the following provisions of this Article VIII shall be effective during an emergency, which is defined as when a quorum of the Corporation’s Directors cannot be readily assembled because of some catastrophic event. During such emergency: (a) Notice of Board Meetings. Any one member of the Board of Directors or any one of the following officers: Chief Executive Officer, President, any Vice-President, Secretary, Chief Financial Officer or Treasurer, may call a meeting of the Board of Directors. Notice of such meeting need be given only to those Directors whom it is practicable to reach, and may be given in any practical manner, including by publication and radio. Such notice shall be given at least six hours prior to commencement of the meeting. (b) Temporary Directors and Quorum. One or more officers of the Corporation present at the emergency board meeting, as is necessary to achieve a quorum, shall be considered to be Directors for the meeting, and shall so serve in order of rank, and within the same rank, in order of seniority. In the event that less than a quorum (as determined by Section 3.10) of the Directors are present (including any officers who are to serve as Directors for the meeting), those Directors present (including the officers serving as Directors) shall constitute a quorum. Exhibit 3.1

(c) Actions Permitted to be Taken. The Board of Directors may, as constituted in paragraph (b), and after notice as set forth in paragraph (a): (1) Officers Powers. Prescribe emergency powers to any officer of the Corporation; (2) Delegation of any Power. Delegate to any officer or Director, any of the powers of the Board of Directors; (3) Lines of Succession. Designate lines of succession of officers and agents, in the event that any of them is unable to discharge their duties; (4) Relocate Principal Place of Business. Relocate the principal place of business, or designate successive or simultaneous principal places of business; and (5) All Other Action. Take any other action, convenient, helpful, or necessary, to carry on the business of the Corporation. ARTICLE IX MISCELLANEOUS Section 9.01. Fiscal Year. The fiscal year of the Corporation shall be established, and may be altered, by resolution of the Board of Directors from time to time as the Board deems advisable. Section 9.02. Dividends. The Board of Directors may from time to time at any regular or special meeting (or by any other manner of action permitted by these Bylaws and the Act) declare, and the Corporation may pay, dividends or other distributions on its outstanding shares of stock in the manner and upon the terms and conditions as the Board of Directors deems advisable and as may be permitted by the Articles of Incorporation, the Act, and any other lawful restrictions imposed upon the Corporation. Such dividends or other distributions, when declared and permitted, may be paid in cash, stock, property, or any other permitted means lawfully declared by the Board of Directors. Section 9.03. Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by the Officer or Officers, or agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors. Section 9.04. Seal. The seal of the Corporation shall be circular in form and shall have inscribed thereon the name of the Corporation, the year of its organization, and the words “Corporate Seal, State of South Carolina.” Section 9.05. Amendments. Any or all of these Bylaws may be altered, amended, or repealed and new Bylaws may be adopted by the Board of Directors, subject to the following: (a) the right of the shareholders to alter, adopt, amend, or repeal Bylaws as provided in the Act; and (b) action of the shareholders in adopting, amending, or repealing a particular Bylaw wherein the Board of Directors is expressly prohibited by such shareholder action from amending or repealing the particular Bylaw acted upon by the shareholders. The shareholders may amend or repeal any or all of these Bylaws even though these Bylaws may also be amended or repealed by the Board of Directors. Any notice of a meeting of shareholders at which Bylaws are to be adopted, amended, or repealed by the shareholders shall state that the purpose, or one of the purposes, of the meeting is to consider the adoption, amendment, or repeal of Bylaws and contain or be accompanied by a copy or summary of the proposal. Section 9.06. Usage. In construing these Bylaws, feminine or neuter pronouns shall be substituted for masculine forms and vice versa, and plural terms shall be substituted for singular forms and vice versa, in any place in which the context so requires. The section and paragraph headings contained in these Bylaws are for reference purposes only and shall not affect in any way the meaning or interpretation of these Bylaws. Terms such as “hereof”, “hereunder”, “hereto”, and words of similar import shall refer to these Bylaws in the entirety and all references to “Articles”, “Paragraphs”, “Sections”, and similar cross references shall refer to specified portions of these Bylaws, unless the context clearly requires otherwise. Terms used herein which are not otherwise defined shall have the meanings ascribed to them in the Act. All references to statutory provisions shall be deemed to include corresponding sections of succeeding laws. Exhibit 3.1

Exhibit 99.1

FOR IMMEDIATE RELEASE


Contact:
Steve Jones						Mary M. Gentry
Senior EVP, Chief Financial Officer						SVP, Treasurer and Investor Relations
ScanSource, Inc.						ScanSource, Inc.
(864) 286-4302						(864) 286-4892

SCANSOURCE REPORTS THIRD QUARTER RESULTS
Announces new $100M share purchase authorization

GREENVILLE, SC -- May 7, 2024 -- ScanSource, Inc. (NASDAQ: SCSC), a leading hybrid distributor connecting devices to the cloud, today announced financial results for the third quarter ended March 31, 2024.


	Third Quarter Summary
	Q3 FY24			Q3 FY23			Change
	(in thousands, except percentages and per share data)
Select reported measures:
Net sales	$	752,599		$	885,519		-15.0%
Gross profit	$	94,481		$	111,762		-15.5%
Gross profit margin %	12.55		%	12.62		%	-7bp
Operating income	$	17,542		$	34,279		-48.8%
GAAP net income	$	12,806		$	21,221		-39.7%
GAAP diluted EPS	$	0.50		$	0.83		-39.8%
Operating cash flow	$	160,152		$	54,837		n/m
Select Non-GAAP measures*:
Adjusted EBITDA	$	33,095		$	45,656		-27.5%
Adjusted EBITDA margin %	4.40		%	5.16		%	-76bp
Non-GAAP net income	$	17,461		$	24,330		-28.2%
Non-GAAP diluted EPS	$	0.69		$	0.96		-28.1%
Free cash flow	$	157,732		$	52,551		n/m
n/m - not meaningful
* Represents non-GAAP financial measures. For more information and a reconciliation to the most directly comparable GAAP financial measure, see "Non-GAAP Financial Information" below as well as the accompanying Supplemental Information.

“While hardware sales were lower than we expected, our resilient business model delivered strong margins and robust free cash flow,” said Mike Baur, Chair and CEO, ScanSource, Inc. “Our strong balance sheet gives us the capacity and flexibility to execute our disciplined capital allocation plans.”

Quarterly Results

Net sales for the third quarter of fiscal year 2024 totaled $752.6 million, down 15.0% year-over-year. Specialty Technology Solutions net sales for the third quarter decreased 14.5% year-over-year to $483.7 million from softer demand across technologies within the segment. Modern Communications & Cloud net sales for the third quarter decreased 15.9% year-over-year to $268.9 million from lower sales volumes in communications hardware and Cisco products. Net billings for Intelisys increased to approximately $2.68 billion annualized, and Intelisys net sales for the third quarter increased 4.0%.

Gross profit for the third quarter of fiscal year 2024 decreased 15.5% year-over-year to $94.5 million with a gross profit margin of 12.55% versus 12.62% in the prior-year quarter and 11.39% in the second quarter of fiscal year 2024. The gross profit margin reflects a higher percentage of Intelisys revenue in our overall revenue mix, which is recorded on a net basis and therefore contributes to higher gross profit margin.

For the third quarter of fiscal year 2024, operating income was $17.5 million compared to $34.3 million in the prior-year quarter. Third quarter fiscal year 2024 non-GAAP operating income decreased to $25.3 million down from $38.4 million for the prior-year quarter.

On a GAAP basis, net income for the third quarter of fiscal year 2024 totaled $12.8 million, or $0.50 per diluted share, compared to net income of $21.2 million, or $0.83 per diluted share, for the prior-year quarter. Third quarter fiscal year 2024 non-GAAP net income totaled $17.5 million, or $0.69 per diluted share, down from $24.3 million, or $0.96 per diluted share, for the prior-year quarter. Interest expense for the quarter decreased to $2.0 million, down from $5.7 million for the prior-year quarter, reflecting lower borrowings.

On a non-GAAP basis, adjusted EBITDA for the third quarter of fiscal year 2024 decreased 27.5% to $33.1 million, or 4.40% of net sales, compared to $45.7 million, or 5.16% of net sales, for the prior-year quarter.

ScanSource generated $316.9 million of operating cash flow and $309.6 million of free cash flow (non-GAAP) in the first nine months of fiscal year 2024.

Updated Annual Financial Outlook for Fiscal Year 2024

ScanSource updates its expectations for the full fiscal year ending June 30, 2024 and replaces previously provided guidance:

FY24 Annual Outlook

Prior FY24 Annual Outlook

Net sales

At least $3.3 billion

At least $3.5 billion

Adjusted EBITDA (non-GAAP)

At least $140 million

At least $155 million

Free cash flow (non-GAAP)

At least $275 million

At least $200 million

Adjusted EBITDA is a non-GAAP measure, which excludes estimates for amortization of intangible assets, depreciation expense, and non-cash shared-based compensation expense. 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.

Share Repurchase Authorization

ScanSource announced a new $100 million authorization by its Board of Directors to purchase shares of the Company's common stock. This supplements the existing authorization of which approximately $45 million remained outstanding as of March 31, 2024.

Repurchases may be made at management's discretion through open market or privately negotiated transactions, including pursuant to one or more Rule 10b5-1 trading plans to facilitate. 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.

Webcast Details and Earnings Infographic

At approximately 8:45 a.m. ET today, an Earnings Infographic, as a supplement to this press release and the earnings 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, May 7, 2024, at 10:30 a.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 ScanSource's FY24 outlook, which involve risks and uncertainties. Any number of factors could cause actual results to differ materially from anticipated or forecasted results, including, but not limited to, the following factors, which are neither presented in order of importance nor weighted: macroeconomic conditions, including potential prolonged economic weakness, inflation, the failure to manage and implement ScanSource's organic growth strategy, credit risks involving ScanSource's larger customers and suppliers, changes in interest and exchange rates and regulatory regimes impacting ScanSource's international operations, economic weakness and inflation,

risk to the business from a cyberattack, a failure of IT systems, failure to hire and retain quality employees, loss of ScanSource's major customers, relationships with key suppliers and customers or a termination or a modification of the terms under which it operates with these key suppliers, changes in ScanSource's operating strategy, and other factors set forth in the "Risk Factors" contained in ScanSource's annual report on Form 10-K for the year ended June 30, 2023. Except as may be required by law, ScanSource 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"), ScanSource 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, acquisition and divestiture costs, gain on sale of business, restructuring costs and other non-GAAP adjustments.

Net sales on a constant currency basis excluding acquisitions and divestitures to calculate organic growth ("non-GAAP net sales"): ScanSource 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 and divestitures prior to the first full year from the transaction date. This measure enhances the comparability between periods to help analyze underlying trends on an organic basis.

Additional Non-GAAP Metrics: To evaluate current period performance on a more consistent basis with prior periods, ScanSource discloses non-GAAP SG&A expenses, non-GAAP operating income, non-GAAP operating income margin, and non-GAAP diluted earnings per share (non-GAAP diluted EPS). Non-GAAP results exclude amortization of intangible assets related to acquisitions, acquisition and divestiture costs, gain on sale of business, 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 ScanSource'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, gain on sale of business, restructuring costs, cyberattack restoration costs, tax recovery, and non-cash share-based compensation expense. Since Adjusted EBITDA excludes some non-cash costs of investing in ScanSource’s business and people, management believes that Adjusted EBITDA shows the profitability from the 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. The Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of net sales.

Adjusted return on invested capital ("Adjusted ROIC"): Adjusted ROIC assists management in comparing ScanSource'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. Management believes the calculation of Adjusted ROIC provides useful information to investors and is an additional relevant comparison of its performance. Adjusted 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 Adjusted ROIC provides useful information to investors and is an additional relevant comparison of ScanSource's performance during the year.

Free cash flow: ScanSource presents free cash flow as it is a measure used by management to measure our business. We believe this measure provides more information regarding liquidity and capital resources. Free cash flow is defined as cash flows from operating activities less capital expenditures.

These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that ScanSource 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 ScanSource'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 customers across hardware, software as a service ("SaaS"), connectivity and cloud. ScanSource enables customers to deliver solutions for their end users to address changing 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 mobility and barcode, point-of-sale (POS), payments, networking, 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 2023 Best Places to Work in South Carolina and on FORTUNE magazine’s 2024 List of World’s Most Admired Companies. ScanSource ranks #817 on the Fortune 1000. For more information, visit www.scansource.com.

SCANSOURCE REPORTS THIRD QUARTER RESULTS


ScanSource, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share data)
	March 31, 2024		June 30, 2023*
Assets
Current assets:
Cash and cash equivalents	$	159,050	$	36,178
Accounts receivable, less allowance of $19,566 at March 31, 2024 and $15,480 at June 30, 2023	589,847		753,236
Inventories	529,163		757,574
Prepaid expenses and other current assets	138,100		110,087
Total current assets	1,416,160		1,657,075
Property and equipment, net	35,594		37,379
Goodwill	207,616		216,706
Identifiable intangible assets, net	41,510		68,495
Deferred income taxes	19,231		17,764
Other non-current assets	62,877		70,750

Total assets	$	1,782,988	$	2,068,169
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	555,733	$	691,119
Accrued expenses and other current liabilities	74,664		78,892

Income taxes payable	4,792		9,875

Current portion of long-term debt	7,857		6,915

Total current liabilities	643,046		786,801
Deferred income taxes	—		3,816
Long-term debt, net of current portion	138,024		144,006
Borrowings under revolving credit facility	—		178,980

Other long-term liabilities	57,867		49,268
Total liabilities	838,937		1,162,871
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, 24,708,808 and 24,844,203 shares issued and outstanding at March 31, 2024 and June 30, 2023, respectively	46,426		58,241
Retained earnings	997,642		936,678
Accumulated other comprehensive loss	(100,017)		(89,621)
Total shareholders’ equity	944,051		905,298
Total liabilities and shareholders’ equity	$	1,782,988	$	2,068,169

*Derived from audited financial statements.

SCANSOURCE REPORTS THIRD QUARTER RESULTS


ScanSource, Inc. and Subsidiaries
Condensed Consolidated Income Statements (Unaudited)
(in thousands, except per share data)

	Quarter ended March 31, 2024				Nine months ended March 31,
	2024		2023		2024		2023
Net sales	$	752,599	$	885,519	$	2,513,696	$	2,840,573
Cost of goods sold	658,118		773,757		2,211,958		2,499,992
Gross profit	94,481		111,762		301,738		340,581
Selling, general and administrative expenses	66,574		70,669		208,930		211,337
Depreciation expense	2,690		2,644		8,449		8,085
Intangible amortization expense	3,752		4,170		11,982		12,561
Restructuring and other charges	3,923		—		3,923		—


Operating income	17,542		34,279		68,454		108,598
Interest expense	2,001		5,715		10,947		14,223
Interest income	(2,652)		(1,710)		(6,096)		(5,327)
Gain on sale of business	—		—		(14,533)		—
Other expense, net	241		361		991		1,314
Income before income taxes	17,952		29,913		77,145		98,388
Provision for income taxes	5,146		8,692		16,181		27,391


Net income	$	12,806	$	21,221	$	60,964	$	70,997

Per share data:


Net income per common share, basic	$	0.51	$	0.84	$	2.44	$	2.81
Weighted-average shares outstanding, basic	25,025		25,196		24,982		25,228



Net income per common share, diluted	$	0.50	$	0.83	$	2.41	$	2.79
Weighted-average shares outstanding, diluted	25,437		25,439		25,291		25,436

SCANSOURCE REPORTS THIRD QUARTER RESULTS


ScanSource, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
	Nine months ended March 31,
	2024		2023
Cash flows from operating activities:
Net income	$	60,964	$	70,997


Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gain on sale of business	(14,533)		—
Depreciation and amortization	21,217		21,359
Amortization of debt issue costs	289		481
Provision for doubtful accounts	5,863		1,852
Share-based compensation	7,729		8,633

Deferred income taxes	(1,565)		1,409


Finance lease interest	70		31
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	143,774		46,652
Inventories	226,878		(136,257)
Prepaid expenses and other assets	(28,163)		39,178
Other non-current assets	6,022		(1,772)
Accounts payable	(117,860)		(60,717)
Accrued expenses and other liabilities	11,338		(16,780)
Income taxes payable	(5,115)		4,426
Net cash provided by (used in) operating activities	316,908		(20,508)
Cash flows from investing activities:
Capital expenditures	(7,285)		(6,549)

Proceeds from sale of business, net of cash transferred	17,978		—

Net cash provided by (used in) investing activities	10,693		(6,549)
Cash flows from financing activities:

Borrowings on revolving credit, net of expenses	1,242,915		1,871,909
Repayments on revolving credit, net of expenses	(1,421,895)		(1,848,554)
Repayments on long-term debt, net	(5,040)		16,527
Borrowings (repayments) on finance lease obligation	(585)		(612)
Debt issuance costs	—		(1,407)

Exercise of stock options	4,626		853
Taxes paid on settlement of equity awards	(2,794)		(2,433)
Common stock repurchased	(21,168)		(10,718)

Net cash (used in) provided by financing activities	(203,941)		25,565













Effect of exchange rate changes on cash and cash equivalents	(788)		879
Increase in cash and cash equivalents	122,872		(613)
Cash and cash equivalents at beginning of period	36,178		37,987
Cash and cash equivalents at period end	$	159,050	$	37,374

SCANSOURCE REPORTS THIRD QUARTER RESULTS


ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands, except percentages)

Non-GAAP Financial Information:
	Quarter ended March 31,
	2024			2023
Adjusted return on invested capital ratio (Adjusted ROIC), annualized(a)	12.1		%	14.6		%

Reconciliation of Net Income to Adjusted EBITDA:
Net income (GAAP)	$	12,806		$	21,221
Plus: Interest expense	2,001			5,715
Plus: Income taxes	5,146			8,692
Plus: Depreciation and amortization	6,742			7,074
EBITDA (non-GAAP)	26,695			42,702
Plus: Tax recovery	(515)			—
Plus: Share-based compensation	2,388			2,954

Plus: Cyberattack restoration costs	93			—
Plus: Acquisition and divestiture costs	511			—
Plus: Restructuring costs	3,923			—

Adjusted EBITDA (numerator for Adjusted ROIC) (non-GAAP)	$	33,095		$	45,656

Invested Capital Calculations:
Equity – beginning of the quarter	$	953,601		$	862,386
Equity – end of the quarter	944,051			878,895

Plus: Share-based compensation, net	1,784			2,191
Plus: Cyberattack restoration costs, net	69			—
Plus: Divestiture costs	511			—
Plus: Restructuring, net	2,935			—

Plus: Tax recovery, net	(1,648)			—

Average equity	950,652			871,736
Average funded debt (b)	153,131			398,318
Invested capital (denominator for Adjusted ROIC) (non-GAAP)	$	1,103,783		$	1,270,054

(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 91 days in the current and 90 days in the prior-year quarter.
(b) Average funded debt is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt.


	Quarter ended March 31,				Nine months ended March 31,
	2024		2023		2024		2023
GAAP operating cash flow	$	160,152	$	54,837	$	316,908	$	(20,508)
Less: Capital Expenditures	(2,420)		(2,286)		(7,285)		(6,549)
Free cash flow (non-GAAP)	$	157,732	$	52,551	$	309,623	$	(27,057)

SCANSOURCE REPORTS THIRD QUARTER RESULTS


ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)

Net Sales by Segment:
	Quarter ended March 31,
	2024		2023		% Change
Specialty Technology Solutions:	(in thousands)


Net sales, reported	$	483,704	565,652		(14.5)	%
Foreign exchange impact (a)	(620)		—

Non-GAAP net sales	$	483,084	$	565,652	(14.6)	%

Modern Communications & Cloud:


Net sales, reported	$	268,895	$	319,867	(15.9)	%
Foreign exchange impact (a)	(3,177)		—
Less: Divestitures	—		(2,530)
Non-GAAP net sales	$	265,718	$	317,337	(16.3)	%

Consolidated:


Net sales, reported	$	752,599	$	885,519	(15.0)	%
Foreign exchange impact (a)	(3,797)		—
Less: Divestitures	—		(2,530)
Non-GAAP net sales	$	748,802	$	882,989	(15.2)	%

(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 quarter ended March 31, 2024 into U.S. dollars using the average foreign exchange rates for the quarter ended March 31, 2023.

SCANSOURCE REPORTS THIRD QUARTER RESULTS


ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)

Net Sales by Geography:
	Quarter ended March 31,
	2024		2023		% Change
United States and Canada:	(in thousands)
Net sales, as reported	$	671,246	$	808,797	(17.0)	%



International:


Net sales, reported	$	81,353	$	76,722	6.0	%
Foreign exchange impact(a)	(3,797)		—
Less: Divestitures	—		(2,530)
Non-GAAP net sales	$	77,556	$	74,192	4.5	%

Consolidated:


Net sales, reported	$	752,599	$	885,519	(15.0)	%
Foreign exchange impact(a)	(3,797)		—
Less: Divestitures	—		(2,530)
Non-GAAP net sales	$	748,802	$	882,989	(15.2)	%

(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 quarter ended March 31, 2024 into U.S. dollars using the average foreign exchange rates for the quarter ended March 31, 2023.

SCANSOURCE REPORTS THIRD QUARTER RESULTS


ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands, except per share data)

Non-GAAP Financial Information:

	Quarter ended March 31, 2024
		GAAP Measure	Intangible amortization expense	Acquisition & divestiture costs	Restructuring costs	Tax recovery	Cyberattack restoration costs	Non-GAAP measure
	(in thousands, except per share data)


SG&A expenses		$66,574	$—	$(511)	$(3,923)	$515	$(93)	$62,562
Operating income		17,542	3,752	511	3,923	(515)	93	25,306


Pre-tax income		17,952	3,752	511	3,923	(515)	93	25,716
Net income		12,806	2,788	511	2,935	(1,648)	69	17,461
Diluted EPS		$0.50	$0.11	$0.02	$0.12	$(0.06)	$—	$0.69

	Quarter ended March 31, 2023
		GAAP Measure	Intangible amortization expense	Acquisition & divestiture costs	Restructuring costs	Tax recovery	Cyberattack restoration costs	Non-GAAP measure
	(in thousands, except per share data)


SG&A expense		$70,669	$—	$—	$—	$—	$—	$70,669
Operating income		34,279	4,170	—	—	—	—	38,449


Pre-tax income		29,913	4,170	—	—	—	—	34,083
Net income		21,221	3,109	—	—	—	—	24,330
Diluted EPS		$0.83	$0.12	$—	$—	$—	$—	$0.96

(a) Reflects gain on the sale of the UK-based intY business. This transaction resulted in a capital loss for tax purposes. ScanSource did not record a tax provision on the capital loss since there were no offsetting capital gains.

SCANSOURCE REPORTS THIRD QUARTER RESULTS

Annual Financial Outlook for Fiscal Year 2024:



			FY 24 Outlook
GAAP operating income			At least $96 million
Intangible amortization			$16 million
Depreciation expense			$12 million
Share-based compensation expense			$10 million
Interest income and income (expense), net			$6 million
Adjusted EBITDA (non-GAAP)			At least $140 million




GAAP operating cash flow			At least $285 million
Less: Capital expenditures			$10 million
Free cash flow (non-GAAP)			At least $275 million

Fiscal Third Quarter 2024 Earnings While hardware sales were lower than we expected, our resilient business model delivered strong margins and robust free cash flow. Our strong balance sheet gives us the capacity and flexibility to execute our disciplined capital allocation plans.” Mike Baur Chair and CEO, ScanSource, Inc. Key Highlights Softer Demand Across Technologies Agency Channel Opportunity is Compelling Strong Margins Reflect Strength of Business Fundamentals Net Sales -15% Y/Y $753M Achieved Strong Cash Flow in Q3 and YTD © ScanSource 2024 Consolidated Specialty Technology Solutions Segment Gross Profit -15% Y/Y $94M, 12.6% margin Modern Communications & Cloud Segment STS, Net Sales -14% Y/Y $484M MC&C, Net Sales -16% Y/Y $269M STS, Gross Profit -22% Y/Y $45M, 9.3% margin MC&C, Gross Profit -9% Y/Y $49M, 18.4% margin

* Non-GAAP measure; adjusted ROIC represents return on invested capital ** Accelerate organic growth with strategic acquisitions For further financial data, non-GAAP financial disclosures and cautionary language regarding forward-looking statements, please refer to the following pages and ScanSource’s third quarter fiscal year 2024 news release issued on May 7, 2024, which accompanies this presentation and is available at www.scansource.com in the Investor Relations section. Third Quarter Operating Metrics Mid-Term Goals Mid-term: 3-to-4-year time frame Fiscal Year 2024 Annual Outlook updated May 7, 2024 $.50 per share GAAP Diluted EPS -40% Y/Y $160M QTR Operating Cash Flow $158M QTR Free Cash Flow* 12.1% Adjusted ROIC* $20M in Q3 share repurchases -0.1x Net Debt to TTM Adjusted EBITDA* © ScanSource 2024 2 $0.69 per share Non-GAAP Diluted EPS* -28% Y/Y Net Sales At least $3.3 billion Adjusted EBITDA* At least $140 million Free Cash Flow* At least $275 million Net Sales Growth per year Adjusted EBITDA Margin* Adjusted ROIC* Recurring Revenue as % of Gross Profits 5%-7.5% 4.5%-5% Mid Teens Building to 30%+** $33.1M, -28%Y/Y Adjusted EBITDA* 4.40% Adjusted EBITDA Margin* Focus on Working Capital Efficiency Improvements

Forward-Looking Statements This Earnings Infographic and supporting materials contain certain comments that are “forward- looking” statements, including statements about our FY24 outlook, mid-term goals, growth opportunities and our operating strategies that involve plans, strategies, economic performance and trends, projections, expectations, costs or beliefs about future events and other statements that are not descriptions of historical facts. Forward-looking information is inherently subject to risks and uncertainties. Any number of factors could cause actual results to differ materially from anticipated or forecasted results, including but not limited to, the following factors, which are neither presented in order of importance nor weighted: macroeconomic conditions, including potential prolonged economic weakness, inflation, the failure to manage and implement our organic growth strategy, credit risks involving our larger customers and suppliers, changes in interest and exchange rates and regulatory regimes impacting our international operations, economic weakness and inflation, risk to our business from a cyberattack, a failure of our IT systems, failure to hire and retain quality employees, loss of our major customers, relationships with our key suppliers and customers or a termination or a modification of the terms under which we operate with these key suppliers and customers, changes in our operating strategy, and other factors set forth in the “Risk Factors” contained in our annual report on Form 10-K for the year ended June 30, 2023, and subsequent reports on Form 10-Q, filed with the Securities and Exchange Commission. Although ScanSource believes the expectations in its forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement. ScanSource disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by law. 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 measures, including non-GAAP operating income, non-GAAP operating income margin, non-GAAP net income, non-GAAP diluted EPS, non-GAAP SG&A expenses, adjusted EBITDA, adjusted EBITDA margin, net debt, adjusted ROIC, free cash flow and net sales in constant currency excluding acquisitions and divestitures (organic growth). A reconciliation of the Company's non-GAAP financial information to GAAP financial information is provided in the following supporting materials and in the Company’s Form 8-K, filed with the SEC, with the quarterly earnings press release for the period indicated. ScanSource discloses forward-looking information that is not presented in accordance with GAAP with respect to adjusted EBITDA margin and adjusted ROIC. ScanSource believes that a quantitative reconciliation of such forward-looking information to the most directly comparable GAAP financial measure cannot be made without unreasonable efforts, because a reconciliation of these non-GAAP financial measures would require an estimate of future non-operating items such as acquisitions and divestitures, restructuring costs, impairment charges and other unusual or non-recurring items. Neither the timing nor likelihood of these events, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, a reconciliation of such forward-looking information to the most directly comparable GAAP financial measure is not provided. 3

Consolidated, 5-Quarter Financial Summary ($ in thousands, except per share data) Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Q3 FY23 Q/Q Y/Y Select reported GAAP measures: Net sales $ 752,599 $ 884,792 $ 876,305 $ 947,149 $ 885,519 (15)% (15)% Gross profit $ 94,481 $ 100,748 $ 106,508 $ 108,659 $ 111,762 (6)% (15)% Gross profit margin % 12.6 % 11.4 % 12.2 % 11.5 % 12.6 % 117 bp (7) bp SG&A expenses $ 66,574 $ 66,921 $ 75,436 $ 74,358 $ 70,669 (1)% (6)% Operating income $ 17,542 $ 26,826 $ 24,084 $ 27,289 $ 34,279 (35)% (49)% Operating income margin % 2.33 % 3.03 % 2.75 % 2.88 % 3.87 % (70) bp (154) bp Net income $ 12,806 $ 32,726 $ 15,432 $ 17,095 $ 21,221 (61)% (40)% Diluted EPS $ 0.50 $ 1.29 $ 0.61 $ 0.68 $ 0.83 (61)% (40)% Select reported Non-GAAP measures: (a) Non-GAAP operating income $ 25,306 $ 30,621 $ 28,478 $ 32,806 $ 38,449 (17)% (34)% Non-GAAP operating income margin % 3.36 % 3.46 % 3.25 % 3.46 % 4.34 % (10) bp (98) bp Non-GAAP net income $ 17,461 $ 21,587 $ 18,728 $ 19,213 $ 24,330 (19)% (28)% Non-GAAP diluted EPS $ 0.69 $ 0.85 $ 0.74 $ 0.76 $ 0.96 (19)% (28)% Adjusted EBITDA $ 33,095 $ 38,459 $ 34,919 $ 40,199 $ 45,656 (14)% (28)% Adjusted EBITDA margin % 4.40 % 4.35 % 3.98 % 4.24 % 5.16 % 5 bp (76) bp Adjusted ROIC 12.1 % 13.2 % 11.1 % 12.9 % 14.6 % (110) bp (250) bp Operating cash flow (QTR) $ 160,152 $ 63,224 $ 93,533 $ 54,837 $ 54,837 Less: Capital expenditures $ (2,420) $ (2,549) $ (2,315) $ (3,431) $ (2,286) Free cash flow (QTR) (Non-GAAP) $ 157,732 $ 60,675 $ 91,218 $ 51,406 $ 52,551 Free cash flow (TTM) (Non-GAAP) $ 361,031 $ 255,850 $ 95,688 $ (44,673) $ (108,189) (a) See pages 11 through 12 for the calculation of non-GAAP measures and reconciliations to GAAP measures. ScanSource, Inc. Earnings Infographic Q3 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 4 May 7, 2024

Specialty Technology Solutions, 5-Quarter Financial Summary ($ in thousands) Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Q3 FY23 Q/Q Y/Y Net sales $ 483,704 $ 520,651 $ 509,570 $ 561,501 $ 565,652 (7)% (14)% Gross profit $ 45,077 $ 47,133 $ 49,183 $ 51,440 $ 57,664 (4)% (22)% Gross profit margin % 9.3 % 9.1 % 9.7 % 9.2 % 10.2 % 27 bp (88) bp GAAP operating income $ 9,080 $ 13,368 $ 11,872 $ 14,343 $ 19,811 (32)% (54)% GAAP operating income % 1.88 % 2.57 % 2.33 % 2.55 % 3.50 % (69) bp (163) bp Add: Intangible amortization expense $ 1,261 $ 1,261 $ 1,261 $ 1,261 $ 1,266 Non-GAAP operating income $ 10,341 $ 14,629 $ 13,133 $ 15,604 $ 21,077 (29)% (51)% Non-GAAP operating income % 2.14 % 2.81 % 2.58 % 2.78 % 3.73 % (67) bp (159) bp Reconciliation of Operating Income to Adjusted EBITDA GAAP operating income $ 9,080 $ 13,368 $ 11,872 $ 14,343 $ 19,811 (32)% (54)% Plus: Depreciation expense 1,953 2,144 1,931 1,954 1,862 Intangible amortization expense 1,261 1,261 1,261 1,261 1,266 Interest income 1,096 709 164 776 354 Other income/(expense), net (57) 135 (132) (40) (54) EBITDA 13,333 17,617 15,096 18,294 23,239 (24)% (43)% Adjustments: Share-based compensation expense 1,421 1,657 1,512 1,586 1,867 (14)% (24)% Adjusted EBITDA (non-GAAP) $ 14,754 $ 19,274 $ 16,608 $ 19,880 $ 25,106 (23)% (41)% Adjusted EBITDA (non-GAAP) % 3.05 % 3.70 % 3.26 % 3.54 % 4.44 % (65) bp (139) bp ScanSource, Inc. Earnings Infographic Q3 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 5 May 7, 2024

Modern Communications & Cloud, 5-Quarter Financial Summary ($ in thousands) Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Q3 FY23 Q/Q Y/Y Net sales $ 268,895 $ 364,141 $ 366,735 $ 385,648 $ 319,867 (26)% (16)% Gross profit $ 49,404 $ 53,615 $ 57,235 $ 57,219 $ 54,098 (8)% (9)% Gross profit margin % 18.4 % 14.7 % 15.6 % 14.8 % 16.9 % 370 bp 150 bp GAAP operating income $ 12,989 $ 14,602 $ 12,413 $ 14,406 $ 14,468 (11)% (10)% GAAP operating income % 4.83 % 4.01 % 3.38 % 3.74 % 4.52 % 82 bp 31 bp Add: Intangible amortization expense $ 2,491 $ 2,776 $ 2,932 $ 2,924 $ 2,904 Add: Tax recovery(a) $ (515) $ (1,386) $ — $ (128) $ — Non-GAAP operating income $ 14,965 $ 15,992 $ 15,345 $ 17,202 $ 17,372 (6)% (14)% Non-GAAP operating income % 5.57 % 4.39 % 4.18 % 4.46 % 5.43 % 120 bp 20 bp Reconciliation of Operating Income to Adjusted EBITDA GAAP operating income $ 12,989 $ 14,602 $ 12,413 $ 14,406 $ 14,468 (11)% (10)% Plus: Depreciation expense 1,037 1,077 1,093 1,117 1,042 Intangible amortization expense 2,491 2,776 2,932 2,924 2,904 Interest income 1,557 1,409 1,161 1,309 1,356 Other income/(expense), net (402) 14,325 (549) (309) (307) EBITDA 17,672 34,189 17,050 19,447 19,463 (48)% (9)% Adjustments: Share-based compensation expense 968 914 1,258 1,000 1,087 Tax recovery(a) (515) (1,386) — (128) — Gain on disposal of a business 219 (14,533) — — — Adjusted EBITDA (non-GAAP) $ 18,344 $ 19,184 $ 18,308 $ 20,319 $ 20,550 (4)% (11)% Adjusted EBITDA (non-GAAP) % 6.82 % 5.27 % 4.99 % 5.27 % 6.42 % 155 bp 40 bp (a) Recovery of prior period withholding taxes in Brazil ScanSource, Inc. Earnings Infographic Q3 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 6 May 7, 2024

Net Sales, Constant Currency Excluding Acquisitions and Divestitures (Organic Growth) - QTR ($ in thousands) Net Sales by Segment: Q3 FY24 Q3 FY23 % Change Specialty Technology Solutions: Net sales, as reported $ 483,704 $ 565,652 (14.5) % Foreign exchange impact (a) (620) — Net sales, constant currency excluding divestitures (non-GAAP) $ 483,084 $ 565,652 (14.6) % Modern Communications & Cloud: Net sales, as reported $ 268,895 $ 319,867 (15.9) % Foreign exchange impact (a) (3,177) — Less: Divestitures — (2,530) Net sales, constant currency excluding divestitures (non-GAAP) $ 265,718 $ 317,337 (16.3) % Consolidated: Net sales, as reported $ 752,599 $ 885,519 (15.0) % Foreign exchange impact (a) (3,797) — Less: Divestitures — (2,530) Net sales, constant currency excluding divestitures (non-GAAP) $ 748,802 $ 882,989 (15.2) % Net Sales by Geography: Q3 FY24 Q3 FY23 % Change United States and Canada: Net sales, as reported $ 671,246 $ 808,797 (17.0) % International: Net sales, as reported $ 81,353 $ 76,722 6.0 % Foreign exchange impact (a) (3,797) — Less: Divestitures $ — $ (2,530) Net sales, constant currency excluding divestitures (non-GAAP) $ 77,556 $ 74,192 4.5 % Consolidated: Net sales, as reported $ 752,599 $ 885,519 (15.0) % Foreign exchange impact (a) (3,797) — Less: Divestitures $ — $ (2,530) Net sales, constant currency excluding divestitures (non-GAAP) $ 748,802 $ 882,989 (15.2) % (a) Year-over-year sales growth excluding the translation impact of changes in foreign currency rates. Calculated by translating net sales for the quarter ended March 31, 2024 into U.S. dollars using the weighted-average foreign exchange rates for the quarter ended March 31, 2023. ScanSource, Inc. Earnings Infographic Q3 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 7 May 7, 2024

Average Adjusted Return on Invested Capital - QTR ($ in thousands) Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Q3 FY23 Adjusted return on invested capital (ROIC), annualized (a) 12.1 % 13.2 % 11.0 % 12.9 % 14.6 % Reconciliation of Net Income to Adjusted EBITDA Net income from continuing operations - GAAP $ 12,806 $ 32,726 $ 15,432 $ 17,095 $ 21,221 Plus: Interest expense 2,001 3,359 5,585 5,564 5,715 Income taxes 5,146 7,320 3,715 6,367 8,692 Depreciation and amortization 6,742 7,258 7,217 7,255 7,074 EBITDA 26,695 50,663 31,949 36,281 42,702 Adjustments: Tax recovery (b) (515) (1,386) — (128) — Divestiture costs 511 703 — — — Restructuring costs 3,923 — — — — Cyberattack restoration costs 93 441 201 1,460 — Share-based compensation 2,388 2,571 2,769 2,586 2,954 Gain on sale of business — (14,533) — — — Adjusted EBITDA (numerator for Adjusted ROIC) (non-GAAP) $ 33,095 $ 38,459 $ 34,919 $ 40,199 $ 45,656 Invested Capital Calculation Equity - beginning of the quarter $ 953,601 $ 915,253 $ 905,298 $ 878,895 $ 862,386 Equity - end of quarter 944,051 953,601 915,253 905,298 878,895 Adjustments: Tax recovery, net (1,648) (640) — (2,100) — Share-based compensation, net 1,784 1,919 2,068 1,921 2,191 Acquisition and divestiture costs 511 703 — — — Restructuring, net of tax 2,935 — — — — Cyberattack restoration costs, net 69 329 150 1,092 — Gain on sale of business — (14,533) — — Discontinued operations net income — — — (1,717) — Average equity 950,652 928,316 911,385 891,695 871,736 Average funded debt (c) 153,131 227,688 352,897 361,792 398,318 Invested capital (denominator for Adjusted ROIC) (non-GAAP) $ 1,103,783 $ 1,156,004 $ 1,264,282 $ 1,253,487 $ 1,270,054 (a) Calculated as net income plus interest expense, income taxes, depreciation and amortization (EBITDA), annualized divided by invested capital for the period. Adjusted EBITDA reflects other adjustments for non-GAAP measures. (b) Recovery of prior period withholding taxes in Brazil (c) Average funded debt is calculated as the daily average amounts outstanding on our short-term and long-term interest-bearing debt. ScanSource, Inc. Earnings Infographic Q3 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 8 May 7, 2024

Net Debt and Adjusted EBITDA Metrics ($ in thousands) Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Q3 FY23 Consolidated debt (Q/E) $ 145,881 $ 168,634 $ 248,108 $ 329,901 $ 311,052 Less: Cash and cash equivalents of continuing operations (Q/E) (159,050) (44,987) (42,647) (36,178) (37,374) Net debt (Q/E) $ (13,169) $ 123,647 $ 205,461 $ 293,723 $ 273,678 Reconciliation of Net Income to Adjusted EBITDA Net income from continuing operations - GAAP $ 12,806 $ 32,726 $ 15,432 $ 17,095 $ 21,221 Plus: Interest expense 2,001 3,359 5,585 5,564 5,715 Income taxes 5,146 7,320 3,715 6,367 8,692 Depreciation and amortization 6,742 7,258 7,217 7,255 7,074 EBITDA 26,695 50,663 31,949 36,281 42,702 Adjustments: Acquisition and divestiture costs 511 703 — — — Tax recovery (a) (515) (1,386) — (128) — Cyberattack restoration costs 93 441 201 1,460 — Share-based compensation 2,388 2,571 2,769 2,586 2,954 Gain on sale of business — (14,533) — — — Restructuring costs 3,923 — — — — Adjusted EBITDA (non-GAAP) $ 33,095 $ 38,459 $ 34,919 $ 40,199 $ 45,656 Adjusted EBITDA, TTM (b) $ 146,672 $ 159,233 $ 169,589 $ 179,945 $ 178,418 Net Debt / Adjusted EBITDA, TTM (0.1) x 0.8 x 1.2 x 1.6 x 1.5 x (a) Recovery of prior period withholding taxes in Brazil (b) Adjusted EBITDA for the trailing 12-month period ScanSource, Inc. Earnings Infographic Q3 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 9 May 7, 2024

Working Capital, 5-Quarter Summary ($ in thousands) Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Q3 FY23 Accounts Receivable (Q/E) $ 589,847 $ 662,799 $ 691,669 $ 753,236 $ 684,458 Days sales outstanding in receivables 71 68 71 72 70 Inventory (Q/E) $ 529,163 $ 575,137 $ 656,170 $ 757,574 $ 752,763 Inventory turns 4.8 5.1 4.4 4.4 4.1 Accounts payable (Q/E) $ 555,733 $ 540,642 $ 617,594 $ 691,119 $ 656,688 Paid for inventory days* 11.2 15.7 16.8 17.5 22.7 Working Capital (Q/E) (AR+INV-AP) $ 563,277 $ 697,294 $ 730,245 $ 819,691 $ 780,533 Cash conversion cycle 82 84 88 90 93 *Paid for inventory days represent Q/E inventory days less Q/E accounts payable days ScanSource, Inc. Earnings Infographic Q3 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 10 May 7, 2024

Operating Income, Net Income & EPS - QTR ($ in thousands) Quarter ended March 31, 2024 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs Restructuring costs Tax recovery, net Gain on sale of business Cyberattack restoration costs Non-GAAP measure SG&A expenses $66,574 $— $(511) $(3,923) $515 $— $(93) $62,562 Operating income 17,542 3,752 511 3,923 (515) — 93 25,306 Pre-tax income 17,952 3,752 511 3,923 (515) — 93 25,716 Net income 12,806 2,788 511 2,935 (1,648) — 69 17,461 Diluted EPS $0.50 $0.11 $0.02 $0.12 $(0.06) $— $— $0.69 ($ in thousands) Quarter ended December 31, 2023 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs Tax recovery, net Gain on sale of business (a) Cyberattack restoration costs Non-GAAP measure SG&A expenses $66,921 $— $(703) $— $1,386 $— $(441) $67,163 Operating income 26,826 4,037 703 — (1,386) — 441 30,621 Pre-tax income 40,046 4,037 — — (1,386) (14,533) 441 29,308 Net income 32,726 3,002 703 — (640) (14,533) 329 21,587 Diluted EPS $1.29 $0.12 $0.03 $— $(0.03) $(0.57) $(0.01) $0.85 (a) Reflects gain on the sale of the UK-based intY business. This transaction resulted in a capital loss for tax purposes. ScanSource did not record a tax provision on the capital loss since there were no offsetting capital gains. ScanSource, Inc. Earnings Infographic Q3 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 11 May 7, 2024

Operating Income, Net Income & EPS - QTR, continued ($ in thousands) Quarter ended September 30, 2023 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs Restructuring costs Tax recovery, net Gain on sale of business Cyberattack restoration costs Non-GAAP measure SG&A expenses $75,436 $— $— $— $— $— $(201) $75,235 Operating income 24,084 4,193 — — — — 201 28,478 Pre-tax income 19,147 4,193 — — — — 201 23,541 Net income 15,432 3,146 — — — — 150 18,728 Diluted EPS $0.61 $0.12 $— $— $— $— $0.01 $0.74 ($ in thousands) Quarter ended June 30, 2023 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs Restructuring costs Tax recovery, net Gain on sale of business Cyberattack restoration costs Non-GAAP measure SG&A expenses $74,358 $— $— $— $128 $— $(1,460) $73,026 Operating income 27,289 4,185 — — (128) — 1,460 32,806 Pre-tax income 23,462 4,185 — — — — — 28,979 Net income 17,095 3,126 — — (2,100) — 1,092 19,213 Diluted EPS $0.68 $0.12 $— $— $(0.08) $— $0.04 $0.76 ScanSource, Inc. Earnings Infographic Q3 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 12 May 7, 2024

($ in thousands) Quarter ended March 31, 2023 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs Restructuring costs Tax recovery, net Gain on sale of business Cyberattack restoration costs Non-GAAP measure SG&A expenses $70,669 $— $— $— $— $— $— $70,669 Operating income 34,279 4,170 — — — — — 38,449 Pre-tax income 29,913 4,170 — — — — — 34,083 Net income 21,221 3,109 — — — — — 24,330 Diluted EPS $0.83 $0.12 $— $— $— $— $— $0.96 ScanSource, Inc. Earnings Infographic Q3 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 13 May 7, 2024

FY24 Annual Financial Outlook Reconciliation FY 24 Outlook GAAP operating income At least $96 million Intangible amortization $16 million Depreciation expense $12 million Share-based compensation expense $10 million Interest income and income (expense), net $6 million Adjusted EBITDA (non-GAAP) At least $140 million GAAP operating cash flow At least $285 million Less: Capital expenditures $10 million Free cash flow (non-GAAP) At least $275 million ScanSource, Inc. Earnings Infographic Q3 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 14 May 7, 2024

Cover Page	May 01, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	May 01, 2024
Entity Registrant Name	ScanSource, Inc.
Entity Incorporation, State or Country Code	SC
Entity File Number	00-26926
Entity Tax Identification Number	57-0965380
Entity Address, Address Line One	6 Logue Court
Entity Address, City or Town	Greenville
Entity Address, State or Province	SC
Entity Address, Postal Zip Code	29615
City Area Code	864
Local Phone Number	288-2432
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	SCSC
Security Exchange Name	NASDAQ
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000918965
Amendment Flag	false
Current Fiscal Year End Date	--06-30

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