FOR IMMEDIATE RELEASE
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| | |
| Contact: | | |
| Richard P. Cleys | | Mary M. Gentry |
| Chief Financial Officer | - or - | Treasurer and Director, Investor Relations |
| ScanSource, Inc. | | ScanSource, Inc. |
| (864) 286-4358 | | (864) 286-4892 |
SCANSOURCE REPORTS FOURTH QUARTER AND FULL YEAR RESULTS
Record Quarterly Sales for North America Communications and Security Business Units
GREENVILLE, SC -- August 16, 2012 -- ScanSource, Inc. (NASDAQ:SCSC), the leading international value-added distributor of specialty technology products, today announced complete financial results for its fourth quarter and fiscal year ended June 30, 2012.
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| | | | |
| Quarter ended June 30, 2012: | | Fiscal Year ended June 30, 2012: |
| Net sales | $ 754.5 million | | Net sales | $ 3,015.3 million |
| Net income | $ 19.8 million | | Net income | $ 74.3 million |
| Diluted EPS | $ 0.71 per share | | Diluted EPS | $ 2.68 per share |
"We achieved record quarterly sales for our North America Communications and Security business units," said Mike Baur, CEO, ScanSource, Inc. "These results contributed to stronger performance in North America, where each of our business units had positive sequential quarter growth. Our International segment was weaker, particularly in our European businesses. Certain international markets, such as our Brazil business unit, had strong year-over-year sales growth as measured in the local currency."
For the quarter ended June 30, 2012, net sales increased 2.7% to $754.5 million, compared with $734.9 million for the quarter ended June 30, 2011. Operating income decreased 3.2% to $28.3 million from $29.2 million in the comparable prior year quarter. The effective tax rate decreased to 30.9% in the current quarter from 31.7% in the prior year quarter. Net income for the quarter ended June 30, 2012 was $19.8 million, or $0.71 per diluted share, compared with net income of $19.7 million, or $0.71 per diluted share, for the prior year quarter. The June 2012 quarter EPS of $0.71 includes a $0.03 benefit for the change in the fair value of contingent consideration for the Brazilian acquisition earn-out.
For fiscal year ended June 30, 2012, net sales increased $349 million, or 13.1%, to $3.0 billion from $2.7 billion for the prior year ended June 30, 2011. Fiscal year operating income increased 0.4% to $113.5 million from $113.1 million for the prior year. The effective tax rate for the year was 33.2%, compared with 34.3% for the prior fiscal year. Net income for fiscal year 2012 was $74.3 million, or $2.68 per diluted share, compared with net income of $73.5 million, or $2.70 per diluted share, for the prior fiscal year. The change in fair value of contingent consideration had no impact on the fiscal year 2012 EPS of $2.68.
Forecast for Next Quarter
The Company announced its current expectations for the first quarter of fiscal 2013. ScanSource expects that net sales for the quarter ending September 30, 2012 could range from $740 million to $760 million, and diluted earnings per share could be in the range of $0.58 to $0.60 per share.
Webcast Details
ScanSource will present additional information about its financial results and outlook on a conference call today at 5:00 p.m. (ET). A webcast of the call will be available for all interested parties and can be accessed at www.scansourceinc.com (Investor Relations section). The webcast will be available for replay for 60 days.
Exhibit 99.1
ScanSource Reports Fourth Quarter and Fiscal Year Results
Safe Harbor Statement
This press release contains comments that are “forward-looking” statements that involve risks and uncertainties; these statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Any number of important factors could cause actual results to differ materially from anticipated or forecasted results, including, but not limited to, factors affecting our expanded operations in emerging markets, such as Brazil, that expose us to greater political and economic volatility than our operations in established markets; the results of purchase accounting; macroeconomic circumstances that could impact our business, such as currency fluctuations; continued adverse capital and credit market conditions; and an economic downturn. For more information concerning factors that could cause actual results to differ from anticipated results, see the Company's annual report on Form 10-K for the year ended June 30, 2011 and Form 10-Q for the quarters ended September 30, 2011, December 31, 2011, and March 31, 2012 filed with the Securities and Exchange Commission. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.
Non-GAAP Financial Information
In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), the Company also discloses return on invested capital (“ROIC”), a non-GAAP measure. Management uses ROIC as a performance measurement because it believes that this metric best balances the Company's operating results with its asset and liability management. It excludes the results of capitalization decisions, is easily computed and understood, and drives changes in shareholder value. In addition, the Company's Board of Directors uses this non-GAAP measure in evaluating management performance and setting management compensation. Analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP. A reconciliation of the Company's non-GAAP financial information to GAAP is set forth in a following table.
About ScanSource, Inc.
ScanSource, Inc. (NASDAQ:SCSC) is the leading international distributor of specialty technology products, consisting of seven sales units in North America, Latin America and Europe. ScanSource POS and Barcoding in North America, Latin America and Europe delivers AIDC and POS solutions; Catalyst Telecom in the U.S. and ScanSource Communications in North America and Europe, provide voice, video, data and converged communications equipment; and ScanSource Security in North America offers physical security solutions. Founded in 1992, the company ranks #760 on the Fortune 1000. For more information, call the toll-free sales telephone number at 800.944.2432 or visit www.scansourceinc.com.
Exhibit 99.1
ScanSource Reports Fourth Quarter and Fiscal Year Results
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| | | | | | | | |
ScanSource, Inc. and Subsidiaries |
| Condensed Consolidated Balance Sheets (Unaudited) |
| (in thousands) |
| | | | | |
| | | June 30, 2012 | | June 30, 2011* |
| Assets | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 29,173 |
| | $ | 28,747 |
|
| Accounts receivable, less allowance of | | 470,808 |
| | 462,102 |
|
| $27,349 at June 30, 2012 | | | | |
| $26,562 at June 30, 2011 | | | | |
| Inventories | | 475,479 |
| | 467,350 |
|
| Prepaid expenses and other assets | | 41,846 |
| | 35,421 |
|
| Deferred income taxes | | 14,624 |
| | 15,894 |
|
| Total current assets | | 1,031,930 |
| | 1,009,514 |
|
| Property and equipment, net | | 48,785 |
| | 36,819 |
|
| Goodwill | | 53,885 |
| | 59,090 |
|
| Other assets, including identifiable intangible assets | | 67,206 |
| | 76,765 |
|
| Total assets | | $ | 1,201,806 |
| | $ | 1,182,188 |
|
| Liabilities and Shareholders' Equity | | | | |
| Current liabilities: | | | | |
| Short-term borrowings | | $ | 4,268 |
| | $ | 3,164 |
|
| Current portion of contingent consideration | | 4,976 |
| | 2,398 |
|
| Accounts payable | | 419,683 |
| | 406,453 |
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| Accrued expenses and other liabilities | | 67,776 |
| | 60,157 |
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| Income taxes payable | | 1,698 |
| | 5,175 |
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| Total current liabilities | | 498,401 |
| | 477,347 |
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| Long-term debt | | 5,429 |
| | 30,429 |
|
| Borrowings under revolving credit facility | | — |
| | 26,513 |
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| Long-term portion of contingent consideration | | 11,677 |
| | 21,396 |
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| Other long-term liabilities | | 33,988 |
| | 39,109 |
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| Total liabilities | | 549,495 |
| | 594,794 |
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| Shareholders' equity: | | | | |
| Common stock | | 139,557 |
| | 123,608 |
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| Retained earnings | | 534,445 |
| | 460,157 |
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| Accumulated other comprehensive income (loss) | | (21,691 | ) | | 3,629 |
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| Total shareholders' equity | | 652,311 |
| | 587,394 |
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| Total liabilities and shareholders' equity | | $ | 1,201,806 |
| | $ | 1,182,188 |
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| * | Derived from audited financial statements at June 30, 2011. |
Exhibit 99.1
ScanSource Reports Fourth Quarter and Fiscal Year Results
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| | | | | | | | | | | | | | | | |
ScanSource, Inc. and Subsidiaries |
| Condensed Consolidated Balance Sheets (Unaudited) |
| (in thousands) |
| | | | | | | | | |
| | | Quarter ended June 30, | | Year ended June 30, |
| | | 2012 | | 2011* | | 2012 | | 2011* |
| Net sales | | $ | 754,470 |
| | $ | 734,891 |
| | $ | 3,015,296 |
| | $ | 2,666,531 |
|
| Cost of goods sold | | 680,643 |
| | 660,520 |
| | 2,713,272 |
| | 2,392,224 |
|
| Gross profit | | 73,827 |
| | 74,371 |
| | 302,024 |
| | 274,307 |
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| Operating expenses: | | | | | | | | |
| Selling, general and administrative expenses | | 46,634 |
| | 45,256 |
| | 188,388 |
| | 161,326 |
|
| Change in fair value of contingent consideration | | (1,123 | ) | | (128 | ) | | 120 |
| | (128 | ) |
| Operating income | | 28,316 |
| | 29,243 |
| | 113,516 |
| | 113,109 |
|
| Other expense (income): | | | | | | | | |
| Interest expense | | 150 |
| | 541 |
| | 1,639 |
| | 1,723 |
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| Interest income | | (653 | ) | | (294 | ) | | (2,886 | ) | | (1,212 | ) |
| Other, net | | 188 |
| | 220 |
| | 3,552 |
| | 712 |
|
| Income before income taxes | | 28,631 |
| | 28,776 |
| | 111,211 |
| | 111,886 |
|
| Provision for income taxes | | 8,846 |
| | 9,115 |
| | 36,923 |
| | 38,363 |
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| Net income | | $ | 19,785 |
| | $ | 19,661 |
| | $ | 74,288 |
| | $ | 73,523 |
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| Per share data: | | | | | | | | |
| Net income per common share, basic | | $ | 0.72 |
| | $ | 0.73 |
| | $ | 2.72 |
| | $ | 2.74 |
|
| Weighted-average shares outstanding, basic | | 27,579 |
| | 27,056 |
| | 27,362 |
| | 26,872 |
|
| Net income per common share, diluted | | $ | 0.71 |
| | $ | 0.71 |
| | $ | 2.68 |
| | $ | 2.70 |
|
| Weighted-average shares outstanding, diluted | | 27,886 |
| | 27,515 |
| | 27,751 |
| | 27,246 |
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| * | Derived from audited financial statements at June 30, 2011 |
Exhibit 99.1
ScanSource Reports Fourth Quarter and Fiscal Year Results
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| | | | | | | | | | | | | | | | |
| ScanSource, Inc. and Subsidiaries |
| Supplementary Information (Unaudited) |
| (in thousands) |
| | | | | | | | | | |
| Net Sales by Geographic Segment: | | | | | | | Quarter ended June 30, | | |
| | | | | | | | 2012 | | 2011 | | % Change |
| North American (U.S. and Canada) | | | | | | | $ | 570,219 |
| | $ | 543,422 |
| | 4.9 | % |
| International | | | | | | | 184,251 |
| | 191,469 |
| | (3.8 | )% |
| Consolidated | | | | | | | $ | 754,470 |
| | $ | 734,891 |
| | 2.7 | % |
| | | | | | | | | | | | |
| | | | | | | | Year ended June 30, | | |
| | | | | | | | 2012 | | 2011 | | % Change |
| North American (U.S. and Canada) | | | | | | | $ | 2,236,459 |
| | $ | 2,022,668 |
| | 10.6 | % |
| International | | | | | | | 778,837 |
| | 643,863 |
| | 21.0 | % |
| Consolidated | | | | | | | $ | 3,015,296 |
| | $ | 2,666,531 |
| | 13.1 | % |
| | | | | | | | | | | | |
| Non-GAAP Financial Information: | | | | | | | Quarter ended June 30, | | |
| | | | | | | | 2012 | | 2011 | | |
| Return on invested capital (ROIC), annualized (a) | | | | | | | 18.2 | % | | 19.9 | % | | |
| | | | | | | | | | | | |
| Reconciliation of EBITDA to Net Income | | | | | | | | | | | |
| Net income - GAAP | | | | | | | $ | 19,785 |
| | $ | 19,661 |
| | |
| Plus: Income taxes | | | | | | | 8,846 |
| | 9,115 |
| | |
| Plus: Interest expense | | | | | | | 150 |
| | 541 |
| | |
| Plus: Depreciation and amortization | | | | | | | 2,328 |
| | 2,312 |
| | |
| EBITDA (numerator for ROIC) | | | | | | | $ | 31,109 |
| | $ | 31,629 |
| | |
| | | | | | | | | | | | |
| Invested Capital Calculation | | | | | | | | | | | |
| Equity - beginning of quarter | | | | | | | $ | 642,450 |
| | $ | 562,071 |
| | |
| Equity - end of quarter | | | | | | | 652,311 |
| | 587,394 |
| | |
| Average equity | | | | | | | 647,381 |
| | 574,733 |
| | |
| Average funded debt (b) | | | | | | | 41,324 |
| | 61,310 |
| | |
| Invested capital (denominator for ROIC) | | | | | | | $ | 688,705 |
| | $ | 636,043 |
| | |
| | | | | | | | | | | | |
| | | | | | | | Year ended June 30, | | |
| | | | | | | | 2012 | | 2011 | | |
| Return on invested capital (ROIC) (a) | | | | | | | 17.2 | % | | 20.6 | % | | |
| | | | | | | | | | | | |
| Reconciliation of EBITDA to Net Income | | | | | | | | | | | |
| Net income - GAAP | | | | | | | $ | 74,288 |
| | $ | 73,523 |
| | |
| Plus: Income taxes | | | | | | | 36,923 |
| | 38,363 |
| | |
| Plus: Interest expense | | | | | | | 1,639 |
| | 1,723 |
| | |
| Plus: Depreciation and amortization | | | | | | | 9,922 |
| | 6,662 |
| | |
| EBITDA (numerator for ROIC) | | | | | | | $ | 122,772 |
| | $ | 120,271 |
| | |
| | | | | | | | | | | | |
| Invested Capital Calculation | | | | | | | | | | | |
| Equity - beginning of year | | | | | | | $ | 587,394 |
| | $ | 486,851 |
| | |
| Equity - end of year | | | | | | | 652,311 |
| | 587,394 |
| | |
| Average equity | | | | | | | 619,853 |
| | 537,123 |
| | |
| Average funded debt (b) | | | | | | | 92,125 |
| | 46,186 |
| | |
| Invested capital (denominator for ROIC) | | | | | | | $ | 711,978 |
| | $ | 583,309 |
| | |
| | | | | | | | | | | | |
| Notes: | | | | | | | | | | | |
| (a) Calculated as net income plus income taxes, interest expense, depreciation and amortization (EBITDA), annualized and divided by invested capital for the period |
| (b) Daily average interest-bearing debt | | | | | | | | | | | |
