0000918965false00009189652024-06-302024-06-30

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): November 7, 2024

 ScanSource, Inc.
(Exact name of registrant as specified in its charter)
SC00-26926 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 ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, no par valueSCSCNASDAQ 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 November 7, 2024, ScanSource, Inc. (the "Company") issued a press release announcing its financial results for its first quarter ended September 30, 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 9.01. Financial Statements and Exhibits

(d) Exhibits

99.1 – Press release issued by ScanSource, Inc. on November 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 November 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
99.1
99.2
104Cover 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:November 7, 2024    /s/ STEVE JONES
     Steve Jones
     Senior Executive Vice President and Chief Financial Officer


Exhibit 99.1

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

SCANSOURCE REPORTS FIRST QUARTER RESULTS
Achieves Strong Q1 Free Cash Flow and EPS Growth

GREENVILLE, SC -- November 7, 2024 -- ScanSource, Inc. (NASDAQ: SCSC), a leading hybrid distributor connecting devices to the cloud, today announced financial results for the first quarter ended September 30, 2024.

First Quarter Summary
Q1 FY25Q1 FY24Change
(in thousands, except percentages and per share data)
Select reported measures:
Net sales$775,580 $876,305 -11.5%
Gross profit$101,619 $106,508 -4.6%
Gross profit margin %13.10 %12.15 %95bp
Operating income$17,630 $24,084 -26.8%
GAAP net income$16,974 $15,432 10.0%
GAAP diluted EPS$0.69 $0.61 13.1%
Select Non-GAAP measures*:
Adjusted EBITDA$35,666 $34,919 2.1%
Adjusted EBITDA margin %4.60 %3.98 %62bp
Non-GAAP net income$20,823 $18,728 11.2%
Non-GAAP diluted EPS$0.84 $0.74 13.5%
Note: Margin % reflects measure as a percentage of sales.
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 Supplementary Information.

“In the first quarter, our team delivered strong free cash flow and EPS growth in a soft demand environment,” said Mike Baur, Chairman and CEO, ScanSource, Inc. “Our results demonstrate our hybrid distribution success with our focus on specialty technologies and Intelisys & advisory recurring revenue.”

New Reporting Segments

Effective July 1, 2024, ScanSource realigned its operating segments to represent the different sales models it uses in executing its hybrid distribution growth strategy. The two realigned operating segments are Specialty Technology Solutions and Intelisys & Advisory. The Specialty Technology Solutions segment combines the Company’s former segments, with the exception of the Company’s Intelisys business. The Intelisys & Advisory segment includes the Company’s Intelisys and technology advisors businesses, including Channel Exchange (formerly known as intY USA), RPM and Resourcive. Both segments include recurring revenue.

ScanSource has reclassified certain prior period amounts in the accompanying Supplementary Information under “Segment Information” to conform with the current quarter presentation. These reclassifications had no effect on the condensed consolidated financial results.



1

Exhibit 99.1


Quarterly Results

Net sales for the first quarter of fiscal year 2025 totaled $775.6 million, down 11.5% year-over-year, or down 10.7% for non-GAAP net sales (organic growth). Net sales for products and services decreased 12.5% year-over-year, while recurring revenue increased 18.8% year-over-year. Specialty Technology Solutions net sales for the first quarter decreased 11.9% year-over-year to $752.3 million primarily due to continued soft demand in a more cautious technology spending environment. Intelisys & Advisory net sales for the first quarter increased 4.1% year-over-year to $23.3 million primarily from an increase in Intelisys sales.

Gross profit for the first quarter of fiscal year 2025 decreased 4.6% year-over-year to $101.6 million with a gross profit margin of 13.10% versus 12.15% in the prior-year quarter. The gross profit margin reflects a higher contribution of recurring revenue in our overall revenue mix, which is recorded on a net basis and therefore contributes to a higher gross profit margin. For the first quarter of fiscal year 2025, the percentage of gross profit from recurring revenue increased to 31.8%.

For the first quarter of fiscal year 2025, operating income was $17.6 million compared to $24.1 million in the prior-year quarter. First quarter fiscal year 2025 non-GAAP operating income decreased to $27.5 million from $28.5 million in the prior-year quarter.

On a GAAP basis, net income for the first quarter of fiscal year 2025 totaled $17.0 million, or $0.69 per diluted share, compared to net income of $15.4 million, or $0.61 per diluted share, for the prior-year quarter. First quarter fiscal year 2025 non-GAAP net income totaled $20.8 million, or $0.84 per diluted share, up from $18.7 million, or $0.74 per diluted share, for the prior-year quarter.

On a non-GAAP basis, adjusted EBITDA for the first quarter of fiscal year 2025 increased 2.1% to $35.7 million, or 4.60% of net sales, compared to $34.9 million, or 3.98% of net sales, for the prior-year quarter.

Balance Sheet and Cash Flow

As of September 30, 2024, ScanSource had cash and cash equivalents of $145.0 million and total debt of $143.6 million.

ScanSource generated $44.8 million of operating cash flow and $42.5 million of free cash flow (non-GAAP) for the first quarter of fiscal 2025. ScanSource also had share repurchases of $28.1 million for the first quarter of fiscal 2025.

Acquisition of Resourcive

On August 8, 2024, ScanSource completed the acquisition of Resourcive, a leading technology advisor, included in the Intelisys & Advisory segment. Founded in 2001 in Pelham, NY, Resourcive delivers strategic IT sourcing solutions to the mid-market and enterprise, advising clients on value creation strategies that are enabled by technology. Starting with the acquisition of Resourcive, ScanSource is creating the advisory channel model of the future. This business is separate from ScanSource’s Intelisys business, the industry’s leading technology services distributor.

Acquisition of Advantix

On August 15, 2024, ScanSource completed the acquisition of Advantix, a VAR-focused, managed connectivity experience provider specializing in wireless enablement solutions, included in the Specialty Technology Solutions segment. Founded in 2001 in Frisco, Texas, Advantix enables mobility VARs to sell hardware combined with the recurring revenue stream from data connectivity. The Advantix acquisition is the launching point for ScanSource’s new Integrated Solutions Group (ISG). The ISG is focused on developing solutions and services that provide channel partners the opportunity to wrap additional value around their hardware offerings.

Annual Financial Outlook for Fiscal Year 2025

ScanSource reaffirms previously provided guidance set forth below for the full fiscal year ended June 30, 2025.

FY25 Annual Outlook
Net sales $3.1 billion to $3.5 billion
Adjusted EBITDA (non-GAAP)$140 million to $160 million
Free cash flow (non-GAAP)At least $70 million
2


Adjusted EBITDA is a non-GAAP measure, which excludes estimates for amortization of intangible assets, depreciation expense, and non-cash shared-based compensation expense. Free cash flow is a non-GAAP measure, which excludes the effect of estimated capital expenditures from estimated operating cash flow.

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.
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, November 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 FY25 annual outlook, which involve risks and uncertainties, many of which are beyond ScanSource's control. No undue reliance should be placed on such statements, as 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 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, 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 and customers, 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, 2024. 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 otherwise.

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 items such as amortization of intangible assets related to acquisitions, acquisition and divestiture costs, gain on sale of business, and restructuring costs and include 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.

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/loss on sale of business, restructuring costs, cyberattack restoration costs, insurance recovery, 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 Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of net sales.

3

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. ScanSource believes this measure provides more information regarding liquidity and capital resources. Free cash flow is defined as cash flows from operating activities less capital expenditures.

Net debt: Net debt includes total balance sheet debt less cash and cash equivalents. ScanSource believes this measure is useful in assessing its borrowing capacity.

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 pre-tax income, non-GAAP net income, and non-GAAP diluted earnings per share (non-GAAP diluted EPS). These 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 metrics include the translation impact of changes in foreign currency exchange rates. Non-GAAP metrics are useful in assessing and understanding ScanSource's performance especially when comparing results with previous periods or forecasting performance for future periods.

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 channel partners across hardware, software as a service (SaaS), connectivity and cloud. ScanSource enables channel partners to deliver solutions for their end customers to address changing buying and consumption patterns. ScanSource uses multiple sales models to offer hybrid distribution solutions from leading suppliers of specialty technologies, connectivity and cloud. Founded in 1992 and headquartered in Greenville, South Carolina, ScanSource was named one of the 2024 Best Places to Work in South Carolina and on FORTUNE magazine’s 2024 List of World’s Most Admired Companies. ScanSource ranks #776 on the Fortune 1000. For more information, visit www.scansource.com.

4
SCANSOURCE REPORTS FIRST QUARTER RESULTS

ScanSource, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share data)
September 30, 2024June 30, 2024*
Assets
Current assets:
Cash and cash equivalents$145,044 $185,460 
Accounts receivable, less allowance of $22,721 at September 30, 2024
and $20,684 at June 30, 2024
567,127 581,523 
Inventories504,078 512,634 
Prepaid expenses and other current assets136,110 125,082 
Total current assets1,352,359 1,404,699 
Property and equipment, net32,940 33,501 
Goodwill232,856 206,301 
Identifiable intangible assets, net77,800 37,634 
Deferred income taxes17,490 19,902 
Other non-current assets73,064 76,995 
Total assets$1,786,509 $1,779,032 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$578,657 $587,984 
Accrued expenses and other current liabilities69,326 65,616 
Income taxes payable6,376 7,895 
Current portion of long-term debt9,736 7,857 
Total current liabilities666,006 669,352 
Long-term debt, net of current portion133,913 136,149 
Borrowings under revolving credit facility— 50 
Long-term portion of contingent consideration15,289 — 
Other long-term liabilities50,408 49,226 
Total liabilities865,616 854,777 
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, 24,005,107 and 24,243,848 shares issued and outstanding at September 30, 2024 and June 30, 2024, respectively
2,975 26,370 
Retained earnings1,030,712 1,013,738 
Accumulated other comprehensive loss(112,794)(115,853)
Total shareholders’ equity920,893 924,255 
Total liabilities and shareholders’ equity$1,786,509 $1,779,032 
*Derived from audited financial statements.

5
SCANSOURCE REPORTS FIRST QUARTER RESULTS
ScanSource, Inc. and Subsidiaries
Condensed Consolidated Income Statements (Unaudited)
(in thousands, except per share data)
 Quarter ended September 30, 2024
 20242023
Net sales$775,580 $876,305 
Cost of goods sold673,961 769,797 
Gross profit101,619 106,508 
Selling, general and administrative expenses71,706 75,436 
Depreciation expense2,857 2,795 
Intangible amortization expense4,358 4,193 
Restructuring and other charges5,068 — 
Operating income17,630 24,084 
Interest expense2,109 5,585 
Interest income(2,659)(1,325)
Other (income) expense, net(4,782)677 
Income before income taxes22,962 19,147 
Provision for income taxes5,988 3,715 
Net income$16,974 $15,432 
Per share data:
Net income per common share, basic$0.70 $0.62 
Weighted-average shares outstanding, basic24,147 24,886 
Net income per common share, diluted$0.69 $0.61 
Weighted-average shares outstanding, diluted24,646 25,178 


6
SCANSOURCE REPORTS FIRST QUARTER RESULTS
ScanSource, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Quarter ended September 30,
20242023
Cash flows from operating activities:
Net income$16,974 $15,432 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization7,471 7,217 
Amortization of debt issue costs96 96 
Provision for doubtful accounts1,678 4,157 
Share-based compensation2,471 2,769 
Deferred income taxes2,433 1,303 
Finance lease interest25 15 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable20,606 53,284 
Inventories9,524 99,630 
Prepaid expenses and other assets(1,952)(7,743)
Other non-current assets3,285 11,227 
Accounts payable(17,002)(70,292)
Accrued expenses and other liabilities744 (21,764)
Income taxes payable(1,523)(1,798)
Net cash provided by (used in) operating activities44,830 93,533 
Cash flows from investing activities:
Capital expenditures(2,375)(2,315)
Cash paid for business acquisitions, net of cash acquired(56,849)— 
Net cash provided by (used in) investing activities(59,224)(2,315)
Cash flows from financing activities:
Borrowings on revolving credit, net of expenses8,381 588,570 
Repayments on revolving credit, net of expenses(8,430)(669,424)
Repayments on long-term debt, net(357)(938)
Borrowings (repayments) on finance lease obligation(275)(191)
Exercise of stock options6,971 72 
Taxes paid on settlement of equity awards(4,794)(1,582)
Common stock repurchased(28,126)— 
Net cash (used in) provided by financing activities(26,630)(83,493)
Effect of exchange rate changes on cash and cash equivalents608 (1,256)
Increase in cash and cash equivalents(40,416)6,469 
Cash and cash equivalents at beginning of period185,460 36,178 
Cash and cash equivalents at period end$145,044 $42,647 




7
SCANSOURCE REPORTS FIRST QUARTER RESULTS
ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands, except percentages)
Non-GAAP Financial Information:
Quarter ended September 30,
20242023
Reconciliation of Net Income to Adjusted EBITDA:
Net income (GAAP)$16,974$15,432
Plus: Interest expense2,1095,585
Plus: Income taxes5,9883,715
Plus: Depreciation and amortization7,4717,217
EBITDA (non-GAAP)32,54231,949
Plus: Share-based compensation2,4712,769
Plus: Acquisition and divestiture costs377—
Plus: Cyberattack restoration costs76201
Plus: Restructuring costs5,068—
Plus: Insurance recovery, net of payments(4,868)—
Adjusted EBITDA (numerator for Adjusted ROIC) (non-GAAP)$35,666$34,919
Invested Capital Calculations:
Equity – beginning of the period$924,254$905,298
Equity – end of the period920,893915,253
Plus: Share-based compensation, net1,8562,068
Plus: Acquisition and divestiture costs377—
Plus: Cyberattack restoration costs, net57150
Plus: Restructuring costs, net of tax3,818—
Plus: Insurance recovery, net(3,667)—
Average equity923,794911,385
Average funded debt (b)
144,020352,897
Invested capital (denominator for Adjusted ROIC) (non-GAAP)$1,067,814$1,264,282
Adjusted return on invested capital ratio (Adjusted ROIC), annualized(a)
13.3 %11.0 %
(a) The annualized adjusted EBITDA amount is divided by days in the quarter times 365 days per year, or 366 days for leap year. There were 92 days in the current and prior-year quarter.
(b) Average funded debt is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt.


8
SCANSOURCE REPORTS FIRST QUARTER RESULTS
ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
Net Sales by Segment:
Quarter ended September 30,
20242023% Change
Specialty Technology Solutions:(in thousands)
Net sales, reported$752,299 $853,950 (11.9)%
Foreign exchange impact (a)
8,645 — 
Less: Divestitures— (2,282)
Less: Acquisitions(3,512)— 
Non-GAAP net sales$757,432 $851,668 (11.1)%
Intelisys & Advisory:
Net sales, reported$23,281 $22,355 4.1 %
Foreign exchange impact (a)
(3)— 
Less: Acquisitions(577)— 
Non-GAAP net sales$22,701 $22,355 1.5 %
Consolidated:
Net sales, reported$775,580 $876,305 (11.5)%
Foreign exchange impact (a)
8,642 — 
Less: Divestitures— (2,282)
Less: Acquisitions(4,089)— 
Non-GAAP net sales$780,133 $874,023 (10.7)%
(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended September 30, 2024 into U.S. dollars using the average foreign exchange rates for the quarter ended September 30, 2023.

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
Net Sales by Revenue Type:
Quarter ended September 30,
20242023% Change
(in thousands)
Revenue by product/service:
Products and services$741,567 $847,674 (12.5)%
Recurring revenue(a)
34,013 28,631 18.8 %
$775,580 $876,305 (11.5)%
(a) Recurring revenue represents primarily agency commissions, SaaS, subscriptions, and hardware rentals.










9
SCANSOURCE REPORTS FIRST QUARTER RESULTS

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Segment Information:
Quarter endedFiscal year ended
September 30, 2023December 31, 2023March 31, 2024June 30, 2024June 30, 2024*
Net sales:
Specialty Technology Solutions$853,950 $861,514 $729,834 $722,251 $3,167,549 
Intelisys & Advisory22,355 23,278 22,765 23,862 92,260 
$876,305 $884,792 $752,599 $746,113 $3,259,809 
Gross profit:
Specialty Technology Solutions$84,263 $77,591 $71,840 $73,563 $307,257 
Intelisys & Advisory22,245 23,157 22,641 23,752 91,795 
$106,508 $100,748 $94,481 $97,315 $399,052 
Operating income (loss):
Specialty Technology Solutions$17,636 $19,696 $14,581 $14,764 $66,677 
Intelisys & Advisory6,649 8,273 7,488 8,186 30,596 
Corporate(201)(1,143)(4,527)(1,078)(6,949)
$24,084 $26,826 $17,542 $21,872 90,324 
Quarter endedFiscal year ended
September 30, 2022December 31, 2022March 31, 2023June 30, 2023June 30, 2023*
Net sales:
Specialty Technology Solutions$923,399 $989,668 $863,965 $924,635 $3,701,667 
Intelisys & Advisory20,414 21,573 21,554 22,513 86,054 
$943,813 $1,011,241 $885,519 $947,148 $3,787,721 
Gross profit:
Specialty Technology Solutions$93,174 $93,861 $90,302 $86,243 $363,580 
Intelisys & Advisory20,311 21,473 21,460 22,415 85,659 
$113,485 $115,334 $111,762 $108,658 $449,239 
Operating income (loss):
Specialty Technology Solutions$30,192 $32,618 $28,283 $21,736 $112,829 
Intelisys & Advisory4,696 6,814 5,996 7,011 24,517 
Corporate— — — (1,460)(1,460)
$34,888 $39,432 $34,279 $27,287 $135,886 
*Derived from audited financial statements.

10
SCANSOURCE REPORTS FIRST QUARTER RESULTS
ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
Net Sales by Geography:
Quarter ended September 30,
20242023% Change
United States and Canada:(in thousands)
Net sales, as reported$712,019 $791,000 (10.0)%
Less: Acquisitions(4,089)— 
Non-GAAP net sales$707,930 $791,000 (10.5)%
Brazil:
Net sales, reported(a)
$63,561 $85,305 (25.5)%
Foreign exchange impact(b)
8,642 — 
Less: Divestitures— (2,282)
Non-GAAP net sales$72,203 $83,023 (13.0)%
Consolidated:
Net sales, reported$775,580 $876,305 (11.5)%
Foreign exchange impact(b)
8,642 — 
Less: Divestitures— (2,282)
Less: Acquisitions(4,089)— 
Non-GAAP net sales$780,133 $874,023 (10.7)%
(a) Countries outside of the United States, Canada and Brazil represent $0.1 million, or 0.2% of sales, for the quarter ended September 30, 2024 and $2.4 million, or 2.8% of sales, for the quarter ended September 30, 2023.
(b) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended September 30, 2024 into U.S. dollars using the average foreign exchange rates for the quarter ended September 30, 2023.

Free Cash Flow:
Quarter ended September 30,
20242023
GAAP operating cash flow$44,830 $93,533 
Less: Capital expenditures(2,375)(2,315)
Free cash flow (non-GAAP)$42,455 $91,218 












11
SCANSOURCE REPORTS FIRST QUARTER RESULTS
ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands, except per share data)
Reconciliation of Other Non-GAAP Financial Information:
Quarter ended September 30, 2024
GAAP MeasureIntangible amortization expense
Acquisition & divestiture costs (a)
Restructuring costsInsurance recovery, netCyberattack restoration costsNon-GAAP measure
(in thousands, except per share data)
SG&A expenses$71,706$—$(377)$—$—$(76)$71,253
Operating income17,6304,3583775,068—7627,509
Pre-tax income22,9624,3583775,068(4,868)7627,973
Net income16,9743,2643773,818(3,667)5720,823
Diluted EPS$0.69$0.13$0.02$0.15$(0.15)$—$0.84
Quarter ended September 30, 2023
GAAP MeasureIntangible amortization expenseAcquisition & divestiture costsRestructuring costsInsurance recovery, netCyberattack restoration costsNon-GAAP measure
(in thousands, except per share data)
SG&A expense$75,436$—$—$—$—$(201)$75,235
Operating income24,0844,193———20128,478
Pre-tax income19,1474,193———20123,541
Net income15,4323,146———15018,728
Diluted EPS$0.61$0.12$—$—$—$0.01$0.74
 
(a) Acquisition and divestiture costs for the quarter ended September 30, 2024 are generally nondeductible for tax purposes.






12
Fiscal First Quarter 2025 Earnings In the first quarter, our team delivered strong free cash flow and EPS growth in a soft demand environment. Our results demonstrate our hybrid distribution success with our focus on specialty technologies and Intelisys & advisory recurring revenue.” Mike Baur Chair and CEO, ScanSource, Inc. Key Highlights Soft Demand with Higher Gross Profit Margins Completed Acquisitions of High Margin, Recurring Revenue Businesses Higher Margins Reflect Strength of Business Fundamentals and Recurring Revenue Net Sales -11% Y/Y $776M Reaffirmed FY25 Annual Outlook; Achieved Strong Q1 Cash Flow © ScanSource 2025 Consolidated Specialty Technology Solutions Segment Gross Profit -5% Y/Y $102M, 13.1% margin Intelisys & Advisory Segment STS, Net Sales -12% Y/Y $752M I&A, Net Sales +4% Y/Y $23M STS, Gross Profit -7% Y/Y $78M, 10.4% margin I&A, Gross Profit +4% Y/Y $23M, 99.5% margin

 
* Non GAAPmeasure For further financial data, non GAAP financial disclosures and cautionary language regarding forward looking statements, please refer to the following pages and ScanSource’s first quarter fiscal year 2025 news release issued on November 7, 2024, which accompanies this presentation and is available at www.scansource.com in the Investor Relations section [click here]. First Quarter Operating Metrics Mid-Term Goals Mid-term: 3-to-4-year time frame Fiscal Year 2025 Annual Outlook reaffirmed as of November 7, 2024 © ScanSource 2025 2 Net Sales $3.1 billion to $3.5 billion Adjusted EBITDA* $140 million to $160 million Free Cash Flow* At least $70 million Recurring Revenue as % of Gross Profits Adjusted ROIC* Adjusted EBITDA Margin* Net Sales Growth per year Building to 30%+ Mid Teens4.5%-5%5%-7.5% Focus on Working Capital Efficiency Improvements $0.69 per share GAAP Diluted EPS +13% Y/Y $35.7M, +2%Y/Y Adjusted EBITDA* 4.60% Adjusted EBITDA Margin* $45M QTR Operating Cash Flow $42M QTR Free Cash Flow* $0.84 per share Non-GAAP Diluted EPS* +14% Y/Y (0.0)x Net Debt* to TTM Adjusted EBITDA* 13.3% Adjusted ROIC* $28M in share repurchases

 
Forward-Looking Statements This Earnings Infographic and supporting materials contain “forward-looking” statements, including ScanSource's FY25 annual outlook and mid-term goals, which involve risks and uncertainties, many of which are beyond ScanSource’s control. No undue reliance should be placed on such statements, as 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 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, 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 and customers, 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, 2024, and subsequent reports on Form 10-Q, filed with the Securities and Exchange Commission. 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 Earnings Infographic or otherwise. 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 measures, including non-GAAP SG&A expenses, non-GAAP operating income, non-GAAP operating income margin, non-GAAP pre-tax income, non-GAAP net income, non-GAAP diluted EPS, 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. Please see the “Non-GAAP Financial Information” section in the quarterly earnings press release for additional description of ScanSource’s non-GAAP measures. ScanSource discloses forward-looking information that is not presented in accordance with GAAP with respect to adjusted EBITDA, adjusted EBITDA margin, adjusted ROIC, and free cash flow. 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

 

 

 

 

 

 

 

 

 

 

 
v3.24.3
Cover Page
Jun. 30, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 07, 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
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