Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | SCANSOURCE INC | |
Entity Central Index Key | 918,965 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 26,764,496 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 41,239 | $ 121,646 |
Accounts receivable, less allowance of $31,149 at September 30, 2015 and $32,589 at June 30, 2015 | 588,008 | 522,532 |
Inventories | 588,195 | 553,063 |
Prepaid expenses and other current assets | 69,602 | 46,917 |
Deferred income taxes | 19,787 | 20,556 |
Total current assets | 1,306,831 | 1,264,714 |
Property and equipment, net | 45,461 | 46,574 |
Goodwill | 83,251 | 66,509 |
Net identifiable intangible assets | 57,459 | 46,272 |
Other non-current assets | 50,265 | 52,872 |
Total assets | 1,543,267 | 1,476,941 |
Current liabilities: | ||
Current debt | 1,700 | 2,860 |
Accounts payable | 516,146 | 501,329 |
Accrued expenses and other current liabilities | 87,747 | 81,000 |
Current portion of contingent consideration | 15,456 | 9,391 |
Income taxes payable | 11,190 | 4,180 |
Total current liabilities | 632,239 | 598,760 |
Deferred income taxes | 3,559 | 3,773 |
Long-term debt | 5,769 | 5,966 |
Borrowings under revolving credit facility | 87,000 | 0 |
Long-term portion of contingent consideration | 13,601 | 24,569 |
Other long-term liabilities | 36,406 | 34,888 |
Total liabilities | $ 778,574 | $ 667,956 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, no par value; 3,000,000 shares authorized, none issued | $ 0 | $ 0 |
Common stock, no par value; 45,000,000 shares authorized, 27,078,077 and 28,214,153 shares issued and outstanding at September 30, 2015 and June 30, 2015, respectively | 116,849 | 157,172 |
Retained earnings | 732,311 | 716,315 |
Accumulated other comprehensive income (loss) | (84,467) | (64,502) |
Total shareholders’ equity | 764,693 | 808,985 |
Total liabilities and shareholders’ equity | $ 1,543,267 | $ 1,476,941 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 |
Current assets: | ||
Allowance for accounts receivable | $ 31,149 | $ 32,589 |
Shareholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 45,000,000 | 45,000,000 |
Common stock, share issued (in shares) | 27,078,077 | 28,214,153 |
Common stock, shares outstanding (in shares) | 27,078,077 | 28,214,153 |
Condensed Consolidated Income S
Condensed Consolidated Income Statements (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||
Net sales | $ 870,829 | $ 791,720 |
Cost of goods sold | 783,277 | 714,075 |
Gross profit | 87,552 | 77,645 |
Selling, general and administrative expenses | 61,547 | 48,155 |
Change in fair value of contingent consideration | 1,564 | 513 |
Operating income | 24,441 | 28,977 |
Interest expense | 281 | 190 |
Interest income | (942) | (835) |
Other (income) expense, net | 680 | 386 |
Income before income taxes | 24,422 | 29,236 |
Provision for income taxes | 8,426 | 10,028 |
Net income | $ 15,996 | $ 19,208 |
Per share data: | ||
Net income per common share, basic (in dollars per share) | $ 0.58 | $ 0.67 |
Weighted-average shares outstanding, basic (in shares) | 27,702 | 28,544 |
Net income per common share, diluted (in dollars per share) | $ 0.57 | $ 0.67 |
Weighted-average shares outstanding, diluted (in shares) | 27,929 | 28,794 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||
Net income | $ 15,996 | $ 19,208 |
Foreign currency translation adjustment | (19,965) | (13,243) |
Comprehensive income (loss) | $ (3,969) | $ 5,965 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 15,996 | $ 19,208 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 3,938 | 1,897 |
Amortization of debt issuance costs | 74 | 74 |
Provision for doubtful accounts | 517 | (2,071) |
Share-based compensation | 1,528 | 1,409 |
Deferred income taxes | (680) | (885) |
Excess tax benefits from share-based payment arrangements | (27) | (70) |
Change in fair value of contingent consideration | 1,564 | 513 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (15,436) | (22,523) |
Inventories | (31,184) | 14,530 |
Prepaid expenses and other assets | (16,289) | (2,718) |
Other non-current assets | (1,134) | 307 |
Accounts payable | (22,410) | (11,961) |
Accrued expenses and other liabilities | (1,482) | (3,474) |
Income taxes payable | 7,300 | 6,462 |
Net cash provided by (used in) operating activities | (57,725) | 698 |
Cash flows from investing activities: | ||
Capital expenditures | (433) | (7,319) |
Cash paid for business acquisitions, net of cash acquired | (61,475) | (35,516) |
Net cash provided by (used in) investing activities | (61,908) | (42,835) |
Cash flows from financing activities: | ||
Borrowings (repayments) on short-term borrowings, net | 0 | (4,609) |
Borrowings on revolving credit | 236,055 | 0 |
Repayments on revolving credit | (149,055) | 0 |
Repayments on long-term debt | (617) | 0 |
Repayments on capital lease obligation | (61) | (81) |
Contingent consideration payments | 0 | (5,529) |
Exercise of stock options | 97 | 205 |
Repurchase of common stock | (41,949) | 0 |
Excess tax benefits from share-based payment arrangements | 27 | 70 |
Net cash provided by (used in) financing activities | 44,497 | (9,944) |
Effect of exchange rate changes on cash and cash equivalents | (5,271) | (2,907) |
Increase (decrease) in cash and cash equivalents | (80,407) | (54,988) |
Cash and cash equivalents at beginning of period | 121,646 | 194,851 |
Cash and cash equivalents at end of period | $ 41,239 | $ 139,863 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Business and Summary of Significant Accounting Policies | Business and Summary of Significant Accounting Policies Business Description ScanSource , Inc. is a leading global provider of technology products and solutions. ScanSource, Inc. and its subsidiaries ("the Company") provide value-added solutions for technology manufacturers and sell to resellers in the following specialty technology markets: POS and Barcode, Security and 3D Printing through its Worldwide Barcode & Security segment and video, voice, and network solutions through its Worldwide Communications & Services segment. The Company operates in the United States, Canada, Latin America and Europe. The Company distributes to the United States and Canada from its distribution centers located in Mississippi, Virginia and California; to Latin America principally from distribution centers located in Florida, Mexico, Brazil and Colombia; and to Europe from distribution centers located in Belgium, France, Germany and the United Kingdom. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of ScanSource, Inc. have been prepared by the Company’s management in accordance with United States generally accepted accounting principles ("US GAAP") for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by US GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) which are, in the opinion of management, necessary to present fairly the financial position as of September 30, 2015 and June 30, 2015 , the results of operations for the quarters ended September 30, 2015 and 2014 , the statements of comprehensive income for the quarters ended September 30, 2015 and 2014 and the statements of cash flows for the three months ended September 30, 2015 and 2014 . The results of operations for the quarters ended September 30, 2015 and 2014 are not necessarily indicative of the results to be expected for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 . Summary of Significant Accounting Policies Except as described below, there have been no material changes to the Company’s significant accounting policies for the quarter ended September 30, 2015 from the information included in the notes to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2015 . For a discussion of the Company’s significant accounting policies, please see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 . Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. The Company maintains some zero-balance, disbursement accounts at various financial institutions in which the Company does not maintain significant depository relationships. Due to the nature of the Company’s banking relationships with these institutions, the Company does not have the right to offset most if not all outstanding checks written from these accounts against cash on hand, and the respective institutions are not legally obligated to honor the checks until sufficient funds are transferred to fund the checks. Checks released but not yet cleared from these accounts in the amounts of $76.7 million and $62.9 million are included in accounts payable as of September 30, 2015 and June 30, 2015 , respectively. Recent Accounting Pronouncements In May 2014, the FASB issued a comprehensive new revenue recognition standard for contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. The core principle of this standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the standard provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. This guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early application is prohibited. The standard permits the use of either the retrospective or cumulative effect transition method. This guidance will be applicable to the Company for the fiscal year beginning July 1, 2017, which is the first quarter of fiscal year 2018. The Company is currently evaluating the impact on its consolidated financial statements upon the adoption of this new standard. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share are computed by dividing net income by the weighted-average number of common and potential common shares outstanding. Quarter ended September 30, 2015 2014 (in thousands, except per share data) Numerator: Net Income $ 15,996 $ 19,208 Denominator: Weighted-average shares, basic 27,702 28,544 Dilutive effect of share-based payments 227 250 Weighted-average shares, diluted 27,929 28,794 Net income per common share, basic $ 0.58 $ 0.67 Net income per common share, diluted $ 0.57 $ 0.67 For the quarter ended September 30, 2015 , weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 587,728 . For the quarter ended September 30, 2014 , there were 227,720 weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) consists of the following: September 30, June 30, (in thousands) Foreign currency translation adjustment $ (84,467 ) $ (64,502 ) Accumulated other comprehensive income (loss) $ (84,467 ) $ (64,502 ) The tax effect of amounts in comprehensive income (loss) reflect a tax expense or benefit as follows: Quarter ended September 30, 2015 2014 (in thousands) Tax expense (benefit) $ 3,195 $ 914 |
Acquisitions
Acquisitions | 3 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Imago On September 19, 2014, the Company acquired 100% of the shares of Imago Group plc, a European value-added distributor of video and voice communications equipment and services, through a newly-formed special purchase entity. Subsequent to the acquisition, the Company changed Imago's name to ScanSource Video Communications Ltd. (dba Imago ScanSource). Imago ScanSource joined the Company’s Worldwide Communications and Services operating segment. This acquisition supports the Company’s strategy to be the leading value-added distributor of video, voice, and networking solutions for resellers in Europe. Under the share purchase agreement, the Company structured the purchase transaction with an initial cash payment of $37.4 million , plus two additional annual cash installments for the twelve month periods ending September 30, 2015 and 2016, based on the financial performance of Imago ScanSource. The Company acquired $1.9 million of cash during the acquisition, resulting in net $35.5 million cash paid for Imago ScanSource. Please see Note 8, Fair Value of Financial Instruments for further information regarding the fair value accounting for this contingent consideration. Pro forma results of operations and a complete purchase price allocation have not been presented for this acquisition because the results of this acquisition are not material to our consolidated results individually or in aggregate with other acquisitions during the relative fiscal year. The purchase price of this acquisition was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date, resulting in goodwill and identifiable intangible assets. The purchase price allocated to goodwill and identifiable intangible assets as of the acquisition date is as follows: Goodwill Identifiable Intangible Assets (in thousands) Imago ScanSource $ 18,266 $ 19,606 Intangible assets acquired include trade names, customer relationships, and non-compete agreements. For tax purposes, due to the nondeductible nature of the amortization of identifiable intangible assets acquired, the Company recorded a deferred tax liability in the amount of $4.1 million . The deferred tax liability represents the difference between the book and tax bases in the assets and will decrease over time as the assets are amortized for book purposes. Network1 On January 13, 2015, the Company acquired 100% of the shares of Intersmart Comércio Importação Exportação de Equipamentos Eletrônicos, S.A., a corporation organized under the laws of the Federative Republic of Brazil, and its related entities (collectively “Network1”) from the Network1 shareholders. Network1 is a Brazilian value-added distributor of communications equipment and services and joins the Company’s Worldwide Communications and Services operating segment. ScanSource is committed to becoming the leading value-added distributor of communications solutions for resellers in Latin America, and this acquisition represents an important step in this strategy. Under the share purchase and sale agreement, the Company structured the purchase transaction with an initial cash payment of approximately $29.1 million , plus four additional annual cash installments based on a form of adjusted earnings before interest expense, taxes, depreciation and amortization ("adjusted EBITDA") for the periods ending June 30, 2015 through June 30, 2018. The Company acquired $4.8 million of cash during the acquisition, resulting in $24.3 million net cash paid for Network1. The Company assumed net debt of $35.2 million as part of the initial purchase consideration. Pro forma results of operations and a complete purchase price allocation have not been presented for this acquisition because the results of this acquisition are not material to our consolidated results individually or in aggregate with other acquisitions during the relative fiscal year. The purchase price of this acquisition was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date. As of the date of this report, initial purchase accounting for the business combination, which includes valuation of indefinite-lived intangible assets and certain tangible assets, has not been finalized; therefore, purchase price allocation estimates presented are subject to change. Please see Note 8, Fair Value of Financial Instruments for further information regarding the fair value accounting for this contingent consideration and Note 10, Commitments and Contingencies for further information regarding pre-acquisition contingencies and related indemnification receivables related to this acquisition. Goodwill Identifiable Intangible Assets (in thousands) Network1 $ 22,584 $ 23,258 Intangible assets acquired include trade names, customer relationships, and non-compete agreements. KBZ On September 4, 2015, the Company acquired substantially all the assets of KBZ Communications, Inc. ("KBZ"), a Cisco Authorized Distributor specializing in video conferencing, services, and cloud. KBZ joins the Company's Worldwide Barcode and Security operating segment. This acquisition supports the Company's strategy to be the leading value-added distributor of specialty technology products and solutions. The results of operations of KBZ have been included in the consolidated results from the date of acquisition. Under the asset purchase agreement, the Company acquired the assets of KBZ for a cash payment of $ 64.6 million . The Company acquired $3.1 million of cash during the acquisition, resulting in net $61.5 million cash paid for KBZ. The purchase price of this acquisition was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date. Due to the proximity of the acquisition date to the end of the quarter, the valuation of tangible assets, identifiable intangible assets, and goodwill is still in process at the date of this filing, therefore, estimates provided are subject to change. Pro forma results of operations have not been presented for this acquisition because the results of this acquisition are not material to our consolidated results. An estimate of the purchase price allocation is as follows: September 4, 2015 (in thousands) Cash $ 3,122 Receivables, net 62,610 Inventory 11,086 Other Current Assets 9,744 Property and equipment, net 686 Goodwill 21,718 Identifiable intangible assets 18,500 Other non-current assets 992 128,458 Accounts payable 47,895 Accrued expenses and other current liabilities 14,214 Other long-term liabilities 1,752 Consideration transferred 64,597 $ 128,458 Intangible assets acquired include trade names, customer relationships, and non-compete agreements. |
Goodwill and Other Identifiable
Goodwill and Other Identifiable Intangible Assets | 3 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Identifiable Intangible Assets | Goodwill and Other Identifiable Intangible Assets The changes in the carrying amount of goodwill for the three months ended September 30, 2015 , by reporting segment, are as follows: Barcode & Security Segment Communications & Services Segment Total (in thousands) Balance as of June 30, 2015 $ 15,535 $ 50,974 $ 66,509 Additions 21,718 — 21,718 Foreign currency translation adjustment (659 ) (4,317 ) (4,976 ) Balance as of September 30, 2015 $ 36,594 $ 46,657 $ 83,251 The following table shows changes in the amount recognized for net identifiable intangible assets for the three months ended September 30, 2015 . These balances are included in net identifiable intangible assets in the Condensed Consolidated Balance Sheets. Net Identifiable Intangible Assets (in thousands) Balance as of June 30, 2015 $ 46,272 Additions 18,500 Amortization expense (2,185 ) Foreign currency translation adjustment (5,128 ) Balance as of September 30, 2015 $ 57,459 Intangible asset balances include trade names, customer relationships, non-compete agreements, and distributor agreements. |
Short-Term Borrowings and Long-
Short-Term Borrowings and Long-Term Debt | 3 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Short Term Borrowings and Long Term Debt | Short-Term Borrowings and Long-Term Debt Short-Term Borrowings Imago ScanSource has multi-currency invoice discounting credit facilities secured by the subsidiary’s assets for its operations based in the United Kingdom and France. The invoice discounting facilities allow for the issuance of funds up to 85% of the amount of each invoice processed, subject to limits by currency of £ 4.1 million , € 4.1 million , and $0.7 million . Borrowings under the invoice discounting facilities bear interest at a base rate determined by currency, plus a spread of 1.85% . The base rate is the United Kingdom base rate published by the Bank of England for GBP-based borrowings, 30-day Euro Interbank Offered Rate ("EUROLIBOR") for Euro-based borrowings, and the Lloyds Bank daily USD published rate for the USD-based borrowings. Additionally, the Company is assessed an annual commitment fee of less than £ 0.1 million . There were no outstanding balances at September 30, 2015 and June 30, 2015 . Revolving Credit Facility The Company has a $300 million multi-currency senior secured revolving credit facility that was scheduled to mature on October 11, 2016 . On November 6, 2013 , the Company entered into an amendment of this credit facility ("Amended Credit Agreement") with JPMorgan Chase Bank N.A., as administrative agent, and a syndicate of banks to extend its maturity to November 6, 2018 . The Amended Credit Agreement allows for the issuance of up to $50 million for letters of credit and has a $150 million accordion feature that allows the Company to increase the availability to $450 million , subject to obtaining additional credit commitments for the lenders participating in the increase. The Company incurred debt issuance costs of $0.5 million in connection with the Amended Credit Agreement, which were capitalized to other assets on the Condensed Consolidated Balance Sheets and added to the unamortized debt issuance costs from the previous credit facility. At the Company's option, loans denominated in U.S. dollars under the Amended Credit Agreement, other than swingline loans, bear interest at a rate equal to a spread over the London Interbank Offered Rate ("LIBOR") or alternate base rate depending upon the Company's ratio of total debt (excluding accounts payable and accrued liabilities), measured as of the end of the most recent quarter, to adjusted earnings before interest expense, taxes, depreciation and amortization ("EBITDA") for the most recently completed four quarters (the "Leverage Ratio"). The Leverage Ratio calculation excludes the Company's subsidiaries in Brazil. This spread ranges from 1.00% to 2.25% for LIBOR-based loans and 0.00% to 1.25% for alternate base rate loans. The spread in effect for the period ended September 30, 2015 was 1.00% for LIBOR-based loans and 0.00% for alternate base rate loans. Additionally, the Company is assessed commitment fees ranging from 0.175% to 0.40% , depending upon the Leverage Ratio, on non-utilized borrowing availability, excluding swingline loans. The commitment fee rate in effect for the period ended September 30, 2015 was 0.175% . Borrowings are guaranteed by substantially all of the domestic assets of the Company and a pledge of up to 65% of capital stock or other equity interest in certain foreign subsidiaries determined to be either material or a subsidiary borrower as defined in the Amended Credit Agreement. The Company was in compliance with all covenants under the credit facility as of September 30, 2015 . There was $87.0 million and $0.0 million outstanding on the revolving credit facility at September 30, 2015 and June 30, 2015 , respectively. The average daily balance during the three month period ended September 30, 2015 and 2014 was $30.7 million and $0.0 million , respectively. There was $213 million and $300 million available for additional borrowings as of September 30, 2015 and June 30, 2015 , respectively. There were no letters of credit issued under the revolving credit facility. Long-Term Debt On August 1, 2007 , the Company entered into an agreement with the State of Mississippi to provide financing for the acquisition and installation of certain equipment to be utilized at the Company’s Southaven, Mississippi distribution facility, through the issuance of an industrial development revenue bond. The bond matures on September 1, 2032 and accrues interest at the 30-day LIBOR rate plus a spread of 0.85% . The terms of the bond allow for payment of interest only for the first 10 years of the agreement, and then, starting on September 1, 2018 through 2032, principal and interest payments are due until the maturity date or the redemption of the bond. The agreement also provides the bondholder with a put option, exercisable only within 180 days of each fifth anniversary of the agreement, requiring the Company to pay back the bonds at 100% of the principal amount outstanding. As of September 30, 2015 , the Company was in compliance with all covenants under this bond. The balance on the bond was $5.4 million as of September 30, 2015 and June 30, 2015 and is included in long-term debt. The interest rate at September 30, 2015 and June 30, 2015 was 1.05% and 1.03% , respectively. Network1 held a term loan agreement, denominated in U.S. dollars, with Banco Safra to provide funding for working capital needs. The loan was secured by accounts receivable of the subsidiary. The term loan matured on September 21, 2015 and was paid in full. The terms of this loan provided for quarterly payments and bore interest at 3.6% per annum. The loan possessed a cross-currency swap contract which bore interest at a base rate equal to the Average One-Day Interbank Deposit Rate ("CDI" rate), plus a spread of 2.75% per annum. The CDI interest rate at June 30, 2015 was approximately 13.6% . The outstanding balance as of September 30, 2015 and June 30, 2015 was $0.0 million and $0.7 million , respectively. Network1 has multiple term loan agreements, denominated in Brazilian reais, with Banco Bradesco, to provide funding for working capital needs. The agreements are collectively secured by accounts receivable of the subsidiary and a personal guarantee by a former shareholder. In general, in the absence of an event of default, the term loans mature on May 9, 2016 . The terms of the loans provide for bi-annual payments of varying amounts and bear interest at 11.48% per annum. As of September 30, 2015 , the subsidiary was in compliance with all covenants under this loan. The outstanding balance as of September 30, 2015 was $1.4 million , all of which is classified as current. The outstanding balance as of June 30, 2015 was $1.8 million . Network1 holds a term loan agreement, denominated in the Brazilian real, with Banco do Brasil to provide funding for working capital needs. The loan is secured by accounts receivable of the subsidiary and a personal guarantee by a former shareholder. In general, in the absence of an event of default, the term loan matures on October 28, 2017 . The terms of this loan provide for monthly payments and bear interest at 12.08% per annum. As of September 30, 2015 , the subsidiary was in compliance with all covenants under this loan. The outstanding balance as of September 30, 2015 was $0.7 million , of which $0.3 million is classified as current. The outstanding balance as of June 30, 2015 was $0.9 million . Debt Issuance Costs As of September 30, 2015 , net debt issuance costs associated with the credit facility and bonds totaled $1.0 million and are being amortized on a straight-line basis through the maturity date of each respective debt instrument. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 3 Months Ended |
Sep. 30, 2015 | |
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities The Company’s results of operations could be materially impacted by significant changes in foreign currency exchange rates and interest rates. These risks and the management of these risks are discussed in greater detail below. In an effort to manage the exposure to these risks, the Company periodically enters into various derivative instruments. The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments in accordance with US GAAP. The Company records all derivatives on the balance sheet at fair value. Derivatives that are not designated as hedging instruments or the ineffective portions of cash flow hedges are adjusted to fair value through earnings in other income and expense. Foreign Currency Derivatives – The Company conducts a portion of its business internationally in a variety of foreign currencies. The exposure to market risk for changes in foreign currency exchange rates arises from foreign currency-denominated assets and liabilities, and transactions arising from non-functional currency financing or trading activities. The Company’s objective is to preserve the economic value of non-functional currency-denominated cash flows. The Company attempts to hedge transaction exposures with natural offsets to the fullest extent possible and, once these opportunities have been exhausted, through forward contracts or other hedging instruments with third parties. These contracts hedge the exchange of various currencies, including the U.S. dollar, Brazilian real, euro, British pound, Canadian dollar, Mexican peso and Chilean peso. While the Company utilizes foreign exchange contracts to hedge foreign currency exposure, the Company's foreign exchange policy prohibits the use of derivative financial instruments for speculative purposes. The Company had contracts outstanding for purposes of managing cash flows with notional amounts of $72.0 million and $80.6 million for the exchange of foreign currencies as of September 30, 2015 and June 30, 2015 , respectively. To date, the Company has chosen not to designate these derivatives as hedging instruments, and accordingly, these instruments are adjusted to fair value through earnings in other income and expense. Summarized financial information related to these derivative contracts and changes in the underlying value of the foreign currency exposures are as follows: Quarter ended September 30, 2015 2014 (in thousands) Net foreign exchange derivative contract (gains) losses $ (1,702 ) $ (1,414 ) Net foreign currency transactional and re-measurement (gains) losses 2,529 1,862 Net foreign currency (gains) losses $ 827 $ 448 Net foreign exchange gains and losses consist of foreign currency transactional and functional currency re-measurements, offset by net foreign currency exchange contract gains and losses and are included in other income and expense. Foreign exchange gains and losses are generated as the result of fluctuations in the value of the the U.S. dollar versus the Brazilian real, the U.S. dollar versus the euro, British pound versus the euro, and other currencies versus the U.S. dollar. Cross Currency Swaps – Through the acquisition of Network1, the Company has borrowings denominated in foreign currencies that have primarily been hedged into the functional currency of the respective borrowing entity using cross currency swaps in order to mitigate the impact of foreign currency exposures and interest rate exposures on these borrowings. These swaps involve the exchange of principal and fixed interest receipts of U.S. dollar-denominated debt held by one of our Brazilian subsidiaries (Network1) for principal and variable interest payments in Brazilian reais. The impact of the changes in foreign exchange rates of the cross currency debt instruments are recognized as adjustments to other income and expense in the Condensed Consolidated Income Statements. Interest rate differentials paid or received under the swap agreements are recognized as adjustments to interest expense in the Condensed Consolidated Income Statements, which totaled less than $0.1 million during the quarter ended September 30, 2015. The fair value of the swaps was a receivable of $0.0 million and $0.1 million as of September 30, 2015 and June 30, 2015 , respectively, and is included in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets. The outstanding swaps were settled and the related borrowings were paid in full during the quarter ended September 30, 2015. The Company used the following derivative instruments, located on its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above: As of September 30, 2015 Fair Value of Derivatives Designated as Hedge Instruments Fair Value of Derivatives Not Designated as Hedge Instruments (in thousands) Derivative assets: (a) Forward foreign currency exchange contracts $ — $ 71 Derivative liabilities: (b) Forward foreign currency exchange contracts $ — $ 676 (a) All derivative assets are recorded as prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets. (b) All derivative liabilities are recorded as accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company is required to classify certain assets and liabilities based on the fair value hierarchy, which groups fair value measured assets and liabilities based upon the following levels of inputs: • Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and • Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). The assets and liabilities maintained by the Company that are required to be measured or disclosed at fair value on a recurring basis include the Company’s various debt instruments, deferred compensation plan investments, outstanding foreign exchange forward contracts, cross currency swap agreements and contingent consideration owed to the previous owners of Brasil Distribuidora de Tecnologias Especiais LTDA ("CDC" or "ScanSource Brasil"), Imago ScanSource and Network1. The carrying value of debt is considered to approximate fair value, as the Company’s debt instruments are either indexed to a variable rate using the market approach (Level 2 criteria) or the fixed rate applied approximates the variable rate published as of September 30, 2015 . The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 : Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) (in thousands) Assets: Deferred compensation plan investments, current and non-current portion $ 16,688 $ 16,688 $ — $ — Forward foreign currency exchange contracts 71 — 71 — Cross currency swap agreements — — — — Total assets at fair value $ 16,759 $ 16,688 $ 71 $ — Liabilities: Deferred compensation plan investments, current and non-current portion $ 16,688 $ 16,688 $ — $ — Forward foreign currency exchange contracts 676 — 676 — Liability for contingent consideration, current and non-current portion 29,057 — — 29,057 Total liabilities at fair value $ 46,421 $ 16,688 $ 676 $ 29,057 The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis as of June 30, 2015 : Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) (in thousands) Assets: Deferred compensation plan investments, current and non-current portion $ 15,970 $ 15,970 $ — $ — Forward foreign currency exchange contracts 125 — 125 — Cross currency swap agreements 103 — 103 — Total assets at fair value $ 16,198 $ 15,970 $ 228 $ — Liabilities: Deferred compensation plan investments, current and non-current portion $ 15,970 $ 15,970 $ — $ — Forward foreign currency exchange contracts 476 — 476 — Liability for contingent consideration, current and non-current portion 33,960 — — 33,960 Total liabilities at fair value $ 50,406 $ 15,970 $ 476 $ 33,960 The investments in the deferred compensation plan are held in a rabbi trust and include mutual funds and cash equivalents for payment of non-qualified benefits for certain retired, terminated or active employees. These investments are recorded to prepaid expenses and other current assets or other non-current assets depending on their corresponding, anticipated distributions to recipients, which are reported in accrued expenses and other current liabilities or other long-term non-current liabilities, respectively. Derivative instruments, such as foreign currency forward contracts and cross currency swap agreements are measured using the market approach on a recurring basis considering foreign currency spot rates and forward rates quoted by banks or foreign currency dealers and interest rates quoted by banks (Level 2). See Note 7 - Derivatives and Hedging Activities . Foreign currency contracts and cross currency swap agreements are classified in the consolidated balance sheet as prepaid expenses and other current assets or accrued expenses and other current liabilities, depending on the respective instruments' favorable or unfavorable positions. The Company recorded contingent consideration liabilities at the acquisition date of CDC, Imago ScanSource and Network1 representing the amounts payable to former shareholders, as outlined under the terms of the Share Purchase Agreements, based upon the achievement of a projected earnings measure, net of specific pro forma adjustments. The current and non-current portions of these obligations are reported separately on the Condensed Consolidated Balance Sheets. The fair value of the contingent considerations (Level 3) are determined using a form of a probability weighted discounted cash flow model. Subsequent changes in the fair value of the contingent consideration liabilities are recorded to the change in fair value of contingent consideration line item in the Condensed Consolidated Income Statements. Fluctuations due to foreign currency translation are captured in other comprehensive income through the changes in foreign currency translation adjustments line item as seen in Note 3 - Accumulated Other Comprehensive Income (Loss) . CDC is part of the Company's Worldwide Barcode and Security Segment, and Imago ScanSource and Network1 are part of the Company's Worldwide Communications and Services segment. The table below provides a summary of the changes in fair value of the Company’s contingent considerations (Level 3) for the CDC, Imago ScanSource and Network1 earnouts for the quarter ended September 30, 2015 : Contingent consideration for the quarter ended September 30, 2015 Barcode & Security Segment Communications & Services Segment Total (in thousands) Fair value at beginning of period $ 5,109 $ 28,851 $ 33,960 Change in fair value of contingent consideration 126 1,438 1,564 Foreign currency translation adjustment (1,121 ) (5,346 ) (6,467 ) Fair value at end of period $ 4,114 $ 24,943 $ 29,057 The table below provides a summary of the changes in fair value of the Company’s contingent considerations (Level 3) for the CDC earnout for the quarter ended September 30, 2014 : Contingent consideration for the quarter ended September 30, 2014 Barcode & Security Segment Communications & Services Segment Total (in thousands) Fair value at beginning of period $ 11,107 $ — $ 11,107 Issuance of contingent consideration — 4,983 4,983 Payments (5,529 ) — (5,529 ) Change in fair value of contingent consideration 498 15 513 Foreign currency translation adjustment (882 ) (30 ) (912 ) Fair value at end of period $ 5,194 $ 4,968 $ 10,162 The fair values of amounts owed are recorded in current portion of contingent consideration and long-term portion of contingent consideration in the Company’s Condensed Consolidated Balance Sheets. The U.S. dollar amounts of actual disbursements made in connection with future earnout payments are subject to change as the liability is denominated in currencies other than the U.S. dollar and subject to foreign exchange fluctuation risk. The Company will revalue the contingent consideration liabilities at each reporting date through the last payment, with changes in the fair value of the contingent consideration reflected in the change in fair value of contingent consideration line item on the Company’s Condensed Consolidated Income Statements that is included in the calculation of operating income. The fair value of the contingent consideration liabilities associated with future earnout payments is based on several factors, including: • estimated future results, net of pro forma adjustments set forth in the share purchase agreements; • the probability of achieving these results; and • a discount rate reflective of the Company’s creditworthiness and market risk premium associated with the Brazilian and European markets. A change in any of these unobservable inputs can significantly change the fair value of the contingent consideration. Barcode and Security Segment The fair value of the liability for the contingent consideration related to CDC recognized at September 30, 2015 was $4.1 million , all of which is classified as current. The change in fair value of the contingent consideration recognized in the Condensed Consolidated Income Statements contributed a loss of $0.1 million for the quarter ended September 30, 2015 . The change this quarter is driven by the recurring amortization of the unrecognized fair value discount. In addition, volatility in the foreign exchange between the Brazilian real and the U.S. dollar has driven changes in the translation of this Brazilian real denominated liability. The liability for the contingent consideration recognized related to CDC is undiscounted, based on the Company’s best estimate of the earnout calculated on a multiple of adjusted earnings. Communications and Services Segment The fair value of the liability for the contingent consideration related to Imago ScanSource recognized at September 30, 2015 was $5.6 million of which $2.8 million is classified as current. The change in fair value of the contingent consideration recognized in the Condensed Consolidated Income Statements contributed a loss of $0.3 million for the quarter ended September 30, 2015 . The change for this quarter is largely driven by the recurring amortization of the unrecognized fair value discount and better than expected results. In addition, volatility in the foreign exchange between the British pound and the U.S. dollar has driven changes in the translation of this British pound denominated liability. Although there is no contractual limit, total future undiscounted contingent consideration payments are anticipated to range between $5.3 million and $6.1 million , based on the Company’s best estimate of the earnout calculated on a multiple of adjusted earnings, before interest expense, income taxes, depreciation and amortization. The fair value of the liability for the contingent consideration related to Network1 recognized at September 30, 2015 was $19.4 million of which $8.6 million is classified as current. The change in fair value of the contingent consideration recognized in the Condensed Consolidated Income Statements contributed a loss of $1.1 million for the quarter ended September 30, 2015 . The change for this quarter is largely driven by the recurring amortization of the unrecognized fair value discount. In addition, volatility in the foreign exchange between the Brazilian real and the U.S. dollar has driven changes in the translation of this Brazilian real denominated liability. Although there is no contractual limit, total future undiscounted contingent consideration payments are anticipated to range up to $26.0 million , based on the Company’s best estimate of the earnout calculated on a multiple of adjusted earnings, before interest expense, income taxes, depreciation and amortization, plus the effects of foreign exchange. |
Segment Information
Segment Information | 3 Months Ended |
Sep. 30, 2015 | |
Segment Reporting, Measurement Disclosures [Abstract] | |
Segment Information | Segment Information The Company is a leading global provider of technology products and solutions, providing value-added sales to resellers in specialty technology markets. The Company has two reportable segments, based on product and service type. Worldwide Barcode & Security Segment The Barcode & Security segment focuses on automatic identification and data capture ("AIDC"), point-of-sale ("POS"), electronic physical security, and 3D printing technologies. We have business units within this segment for sales and merchandising functions, including ScanSource POS and Barcode business units in North America, Latin America, and Europe and the ScanSource Security business unit in North America. We see adjacencies among these technologies in helping our resellers develop solutions, such as with networking products. AIDC and POS products interface with computer systems used to automate the collection, processing and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management and health care applications. Electronic physical security products include identification, access control, video surveillance, intrusion-related and wireless and networking infrastructure products. 3D printing solutions replace and complement traditional methods and reduce the time and cost of designing new products by printing real parts directly from digital input. Worldwide Communications & Services Segment The Communications & Services segment focuses on communications technologies and services. We have business units within this segment for sales and merchandising functions, and these business units offer voice, video conferencing, wireless, data networking and converged communications solutions in North America, Latin America, and Europe. As these solutions come together on IP networks, new opportunities are created for value-added resellers to move into adjacent solutions for all vertical markets, including education, healthcare, and government. ScanSource Services Group delivers value-added support programs and services, including education and training, network assessments, custom configuration, implementation and marketing to help resellers develop a new technology practice, or to extend their capability and reach. In October 2015, we implemented changes to our reporting structure that moved a portion of our networking business from the Communications & Services segment to the Barcode & Security segment. Starting with the second quarter of fiscal year 2016, we will reclassify prior period results for each of these business segments to provide comparable information. Selected financial information for each business segment is presented below: Quarter ended September 30, 2015 2014 (in thousands) Sales: Worldwide Barcode & Security $ 515,669 $ 500,960 Worldwide Communications & Services 355,160 290,760 $ 870,829 $ 791,720 Depreciation and amortization: Worldwide Barcode & Security $ 1,026 $ 1,080 Worldwide Communications & Services 2,191 817 Corporate (1) 721 — $ 3,938 $ 1,897 Operating income: Worldwide Barcode & Security $ 13,082 $ 12,541 Worldwide Communications & Services 11,579 17,786 Corporate (2) (220 ) (1,350 ) $ 24,441 $ 28,977 Capital expenditures: Worldwide Barcode & Security $ 124 $ 86 Worldwide Communications & Services 253 3 Corporate 56 7,230 $ 433 $ 7,319 Sales by Geography Category: North America $ 650,998 $ 606,646 International 228,898 195,929 Less intercompany sales (9,067 ) (10,855 ) $ 870,829 $ 791,720 (1) For the quarter ended September 30, 2015, the amount shown includes depreciation on the Company's new ERP system. (2) For the quarters ended September 30, 2015 and 2014, the amount shown includes acquisition costs. September 30, 2015 June 30, 2015 (in thousands) Assets: Worldwide Barcode & Security $ 812,857 $ 664,380 Worldwide Communications & Services 660,579 674,998 Corporate 69,831 137,563 $ 1,543,267 $ 1,476,941 Property and equipment, net by Geography Category: North America $ 40,763 $ 41,159 International 4,698 5,415 $ 45,461 $ 46,574 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company and its subsidiaries are, from time to time, parties to lawsuits arising out of operations. Although there can be no assurance, based upon information known to the Company, the Company believes that any liability resulting from an adverse determination of such lawsuits would not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. During the Company's due diligence for the CDC and Network1 acquisitions, several pre-acquisition contingencies were identified regarding various Brazilian federal and state tax exposures. The Company is able to record indemnification receivables that are reported gross of the pre-acquisition contingency liabilities as they were escrowed or claimed against future earnout payments in the share purchase agreements. However, indemnity claims can be made up to the entire purchase price, which includes the initial payment and all future earnout payments. The table below summarizes the balances and line item presentation of these pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets as of September 30, 2015 : CDC Network1 (in thousands) Assets Prepaid expenses and other current assets $ 2,465 $ 406 Other non-current assets $ 54 $ 8,410 Liabilities Accrued expenses and other current liabilities $ 2,465 $ 406 Other long-term liabilities $ 54 $ 8,410 The table below summarizes the balances and line item presentation of these pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets as of June 30, 2015 : CDC Network1 (in thousands) Assets Prepaid expenses and other current assets $ 3,156 $ 520 Other non-current assets $ 69 $ 10,769 Liabilities Accrued expenses and other current liabilities $ 3,156 $ 520 Other long-term liabilities $ 69 $ 10,769 Changes in these contingent liabilities and receivables from June 30, 2015 are primarily driven by foreign currency translation. |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2015 | |
Income Tax Expense (Benefit), Continuing Operations [Abstract] | |
Income Taxes | Income Taxes The Company had approximately $1.3 million of total gross unrecognized tax benefits as of September 30, 2015 and June 30, 2015 . Of this total at September 30, 2015 , approximately $0.9 million represents the amount of unrecognized tax benefits that are permanent in nature and, if recognized, would affect the annual effective tax rate. The Company does not believe that the total amount of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date. The Company conducts business globally and, as a result, one or more of its subsidiaries files income tax returns in the U.S. federal, various state, local and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities in countries and states in which it operates. With certain exceptions, the Company is no longer subject to state and local, or non-U.S. income tax examinations by tax authorities for the years before June 30, 2010 . The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of September 30, 2015 , the Company had approximately $1.2 million accrued for interest and penalties. Income taxes for the interim period presented have been included in the accompanying condensed consolidated financial statements on the basis of an estimated annual effective tax rate. In addition to the amount of tax resulting from applying the estimated annual effective tax rate to pre-tax income, the Company includes certain items treated as discrete events to arrive at an estimated overall tax provision. There were no material discrete items during the period. The Company’s effective tax rate differs from the federal statutory rate of 35% primarily as a result of income derived from tax jurisdictions with varying income tax rates, nondeductible expenses, and state income taxes. The Company has provided for U.S. income taxes for the current earnings of its Canadian subsidiary. Earnings from all other geographies will continue to be considered retained indefinitely for reinvestment. In prior years, financial results in Europe have generated pre-tax losses, primarily due to our European Communications business. Financial results in Belgium for the quarter ended September 30, 2015 produced pre-tax income of approximately $0.9 million . In the judgment of management, it is more likely than not that the deferred tax asset will be realized. |
Business and Summary of Signi18
Business and Summary of Significant Accounting Policies (Policy) | 3 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Business Description | Business Description ScanSource , Inc. is a leading global provider of technology products and solutions. ScanSource, Inc. and its subsidiaries ("the Company") provide value-added solutions for technology manufacturers and sell to resellers in the following specialty technology markets: POS and Barcode, Security and 3D Printing through its Worldwide Barcode & Security segment and video, voice, and network solutions through its Worldwide Communications & Services segment. The Company operates in the United States, Canada, Latin America and Europe. The Company distributes to the United States and Canada from its distribution centers located in Mississippi, Virginia and California; to Latin America principally from distribution centers located in Florida, Mexico, Brazil and Colombia; and to Europe from distribution centers located in Belgium, France, Germany and the United Kingdom. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of ScanSource, Inc. have been prepared by the Company’s management in accordance with United States generally accepted accounting principles ("US GAAP") for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by US GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) which are, in the opinion of management, necessary to present fairly the financial position as of September 30, 2015 and June 30, 2015 , the results of operations for the quarters ended September 30, 2015 and 2014 , the statements of comprehensive income for the quarters ended September 30, 2015 and 2014 and the statements of cash flows for the three months ended September 30, 2015 and 2014 . The results of operations for the quarters ended September 30, 2015 and 2014 are not necessarily indicative of the results to be expected for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 . |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Except as described below, there have been no material changes to the Company’s significant accounting policies for the quarter ended September 30, 2015 from the information included in the notes to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2015 . For a discussion of the Company’s significant accounting policies, please see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 . |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. The Company maintains some zero-balance, disbursement accounts at various financial institutions in which the Company does not maintain significant depository relationships. Due to the nature of the Company’s banking relationships with these institutions, the Company does not have the right to offset most if not all outstanding checks written from these accounts against cash on hand, and the respective institutions are not legally obligated to honor the checks until sufficient funds are transferred to fund the checks. Checks released but not yet cleared from these accounts in the amounts of $76.7 million and $62.9 million are included in accounts payable as of September 30, 2015 and June 30, 2015 , respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued a comprehensive new revenue recognition standard for contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. The core principle of this standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the standard provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. This guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early application is prohibited. The standard permits the use of either the retrospective or cumulative effect transition method. This guidance will be applicable to the Company for the fiscal year beginning July 1, 2017, which is the first quarter of fiscal year 2018. The Company is currently evaluating the impact on its consolidated financial statements upon the adoption of this new standard. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings per Share | Quarter ended September 30, 2015 2014 (in thousands, except per share data) Numerator: Net Income $ 15,996 $ 19,208 Denominator: Weighted-average shares, basic 27,702 28,544 Dilutive effect of share-based payments 227 250 Weighted-average shares, diluted 27,929 28,794 Net income per common share, basic $ 0.58 $ 0.67 Net income per common share, diluted $ 0.57 $ 0.67 |
Accumulated Other Comprehensi20
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Components Of Accumulated Other Comprehensive Income, Net Of Tax | Accumulated other comprehensive income (loss) consists of the following: September 30, June 30, (in thousands) Foreign currency translation adjustment $ (84,467 ) $ (64,502 ) Accumulated other comprehensive income (loss) $ (84,467 ) $ (64,502 ) |
Schedule of Other Comprehensive Income (Loss), Tax Expense (Benefit) | The tax effect of amounts in comprehensive income (loss) reflect a tax expense or benefit as follows: Quarter ended September 30, 2015 2014 (in thousands) Tax expense (benefit) $ 3,195 $ 914 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Imago [Member] | |
Business Acquisition [Line Items] | |
Schedule of purchase price allocated to goodwill and identifiable intangible assets | The purchase price allocated to goodwill and identifiable intangible assets as of the acquisition date is as follows: Goodwill Identifiable Intangible Assets (in thousands) Imago ScanSource $ 18,266 $ 19,606 |
Network1 [Member] | |
Business Acquisition [Line Items] | |
Schedule of purchase price allocated to goodwill and identifiable intangible assets | Goodwill Identifiable Intangible Assets (in thousands) Network1 $ 22,584 $ 23,258 |
KBZ, Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of purchase price allocations of assets acquired and liabilities assumed | An estimate of the purchase price allocation is as follows: September 4, 2015 (in thousands) Cash $ 3,122 Receivables, net 62,610 Inventory 11,086 Other Current Assets 9,744 Property and equipment, net 686 Goodwill 21,718 Identifiable intangible assets 18,500 Other non-current assets 992 128,458 Accounts payable 47,895 Accrued expenses and other current liabilities 14,214 Other long-term liabilities 1,752 Consideration transferred 64,597 $ 128,458 |
Goodwill and Other Identifiab22
Goodwill and Other Identifiable Intangible Assets (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the three months ended September 30, 2015 , by reporting segment, are as follows: Barcode & Security Segment Communications & Services Segment Total (in thousands) Balance as of June 30, 2015 $ 15,535 $ 50,974 $ 66,509 Additions 21,718 — 21,718 Foreign currency translation adjustment (659 ) (4,317 ) (4,976 ) Balance as of September 30, 2015 $ 36,594 $ 46,657 $ 83,251 |
Schedule of net identifiable intangible assets | The following table shows changes in the amount recognized for net identifiable intangible assets for the three months ended September 30, 2015 . These balances are included in net identifiable intangible assets in the Condensed Consolidated Balance Sheets. Net Identifiable Intangible Assets (in thousands) Balance as of June 30, 2015 $ 46,272 Additions 18,500 Amortization expense (2,185 ) Foreign currency translation adjustment (5,128 ) Balance as of September 30, 2015 $ 57,459 |
Derivatives and Hedging Activ23
Derivatives and Hedging Activities (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | |
Derivative Contracts and Changes in Underlying Value of the Foreign Currency Exposures | Summarized financial information related to these derivative contracts and changes in the underlying value of the foreign currency exposures are as follows: Quarter ended September 30, 2015 2014 (in thousands) Net foreign exchange derivative contract (gains) losses $ (1,702 ) $ (1,414 ) Net foreign currency transactional and re-measurement (gains) losses 2,529 1,862 Net foreign currency (gains) losses $ 827 $ 448 |
Derivative Instruments | The Company used the following derivative instruments, located on its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above: As of September 30, 2015 Fair Value of Derivatives Designated as Hedge Instruments Fair Value of Derivatives Not Designated as Hedge Instruments (in thousands) Derivative assets: (a) Forward foreign currency exchange contracts $ — $ 71 Derivative liabilities: (b) Forward foreign currency exchange contracts $ — $ 676 (a) All derivative assets are recorded as prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets. (b) All derivative liabilities are recorded as accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. |
Fair Value of Financial Instr24
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Short-term Investments and Financial Instruments | The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 : Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) (in thousands) Assets: Deferred compensation plan investments, current and non-current portion $ 16,688 $ 16,688 $ — $ — Forward foreign currency exchange contracts 71 — 71 — Cross currency swap agreements — — — — Total assets at fair value $ 16,759 $ 16,688 $ 71 $ — Liabilities: Deferred compensation plan investments, current and non-current portion $ 16,688 $ 16,688 $ — $ — Forward foreign currency exchange contracts 676 — 676 — Liability for contingent consideration, current and non-current portion 29,057 — — 29,057 Total liabilities at fair value $ 46,421 $ 16,688 $ 676 $ 29,057 The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis as of June 30, 2015 : Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) (in thousands) Assets: Deferred compensation plan investments, current and non-current portion $ 15,970 $ 15,970 $ — $ — Forward foreign currency exchange contracts 125 — 125 — Cross currency swap agreements 103 — 103 — Total assets at fair value $ 16,198 $ 15,970 $ 228 $ — Liabilities: Deferred compensation plan investments, current and non-current portion $ 15,970 $ 15,970 $ — $ — Forward foreign currency exchange contracts 476 — 476 — Liability for contingent consideration, current and non-current portion 33,960 — — 33,960 Total liabilities at fair value $ 50,406 $ 15,970 $ 476 $ 33,960 |
Fair Value, Business Acquisition, Liability for Contingent Consideration | The table below provides a summary of the changes in fair value of the Company’s contingent considerations (Level 3) for the CDC, Imago ScanSource and Network1 earnouts for the quarter ended September 30, 2015 : Contingent consideration for the quarter ended September 30, 2015 Barcode & Security Segment Communications & Services Segment Total (in thousands) Fair value at beginning of period $ 5,109 $ 28,851 $ 33,960 Change in fair value of contingent consideration 126 1,438 1,564 Foreign currency translation adjustment (1,121 ) (5,346 ) (6,467 ) Fair value at end of period $ 4,114 $ 24,943 $ 29,057 The table below provides a summary of the changes in fair value of the Company’s contingent considerations (Level 3) for the CDC earnout for the quarter ended September 30, 2014 : Contingent consideration for the quarter ended September 30, 2014 Barcode & Security Segment Communications & Services Segment Total (in thousands) Fair value at beginning of period $ 11,107 $ — $ 11,107 Issuance of contingent consideration — 4,983 4,983 Payments (5,529 ) — (5,529 ) Change in fair value of contingent consideration 498 15 513 Foreign currency translation adjustment (882 ) (30 ) (912 ) Fair value at end of period $ 5,194 $ 4,968 $ 10,162 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Segment Reporting, Measurement Disclosures [Abstract] | |
Financial Information by Segment | Selected financial information for each business segment is presented below: Quarter ended September 30, 2015 2014 (in thousands) Sales: Worldwide Barcode & Security $ 515,669 $ 500,960 Worldwide Communications & Services 355,160 290,760 $ 870,829 $ 791,720 Depreciation and amortization: Worldwide Barcode & Security $ 1,026 $ 1,080 Worldwide Communications & Services 2,191 817 Corporate (1) 721 — $ 3,938 $ 1,897 Operating income: Worldwide Barcode & Security $ 13,082 $ 12,541 Worldwide Communications & Services 11,579 17,786 Corporate (2) (220 ) (1,350 ) $ 24,441 $ 28,977 Capital expenditures: Worldwide Barcode & Security $ 124 $ 86 Worldwide Communications & Services 253 3 Corporate 56 7,230 $ 433 $ 7,319 Sales by Geography Category: North America $ 650,998 $ 606,646 International 228,898 195,929 Less intercompany sales (9,067 ) (10,855 ) $ 870,829 $ 791,720 (1) For the quarter ended September 30, 2015, the amount shown includes depreciation on the Company's new ERP system. (2) For the quarters ended September 30, 2015 and 2014, the amount shown includes acquisition costs. |
Reconciliation of Assets from Segment to Consolidated | September 30, 2015 June 30, 2015 (in thousands) Assets: Worldwide Barcode & Security $ 812,857 $ 664,380 Worldwide Communications & Services 660,579 674,998 Corporate 69,831 137,563 $ 1,543,267 $ 1,476,941 Property and equipment, net by Geography Category: North America $ 40,763 $ 41,159 International 4,698 5,415 $ 45,461 $ 46,574 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Pre-acquisition contingencies and corresponding indemnification receivables | The table below summarizes the balances and line item presentation of these pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets as of September 30, 2015 : CDC Network1 (in thousands) Assets Prepaid expenses and other current assets $ 2,465 $ 406 Other non-current assets $ 54 $ 8,410 Liabilities Accrued expenses and other current liabilities $ 2,465 $ 406 Other long-term liabilities $ 54 $ 8,410 The table below summarizes the balances and line item presentation of these pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets as of June 30, 2015 : CDC Network1 (in thousands) Assets Prepaid expenses and other current assets $ 3,156 $ 520 Other non-current assets $ 69 $ 10,769 Liabilities Accrued expenses and other current liabilities $ 3,156 $ 520 Other long-term liabilities $ 69 $ 10,769 |
Business and Summary of Signi27
Business and Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Jun. 30, 2015 |
Accounting Policies [Abstract] | ||
Outstanding Checks | $ 76.7 | $ 62.9 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||
Net Income | $ 15,996 | $ 19,208 |
Weighted-average shares outstanding, basic (in shares) | 27,702,000 | 28,544,000 |
Dilutive effect of share-based payments (in shares) | 227,000 | 250,000 |
Weighted-average shares outstanding, diluted (in shares) | 27,929,000 | 28,794,000 |
Net income per common share, basic (in dollars per share) | $ 0.58 | $ 0.67 |
Net income per common share, diluted (in dollars per share) | $ 0.57 | $ 0.67 |
Weighted average shares excluded from the computation of diluted earnings per share | 587,728 | 227,720 |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Income (Loss) (Components Of Accumulated Other Comprehensive Income, Net Of Tax) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Foreign currency translation adjustment | $ (84,467) | $ (64,502) | |
Accumulated other comprehensive income (loss) | (84,467) | $ (64,502) | |
Tax expense (benefit) | $ 3,195 | $ 914 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Sep. 04, 2015USD ($) | Jan. 13, 2015USD ($) | Sep. 19, 2014USD ($) | Sep. 30, 2015USD ($)payment | Sep. 30, 2014USD ($) | Jun. 30, 2015USD ($) |
Business Acquisition [Line Items] | ||||||
Cash paid for business acquisitions, net of cash acquired | $ (61,475) | $ (35,516) | ||||
Goodwill | $ 83,251 | $ 66,509 | ||||
Imago [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Consideration transferred | $ 37,400 | |||||
Earnout payments, remaining installments | payment | 2 | |||||
Cash paid for business acquisitions, net of cash acquired | (35,500) | |||||
Goodwill | 18,266 | |||||
Identifiable Intangible Assets | 19,606 | |||||
Deferred tax liabilities | 4,100 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Cash acquired | $ 1,900 | |||||
KBZ, Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 64,597 | |||||
Cash paid for business acquisitions, net of cash acquired | (61,500) | |||||
Goodwill | 21,718 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Cash acquired | 3,122 | |||||
Receivables, net | 62,610 | |||||
Inventory | 11,086 | |||||
Other Current Assets | 9,744 | |||||
Property and equipment, net | 686 | |||||
Goodwill | 18,500 | |||||
Other non-current assets | 992 | |||||
Total assets assumed | 128,458 | |||||
Accounts payable | 47,895 | |||||
Accrued expenses and other current liabilities | 14,214 | |||||
Other long-term liabilities | 1,752 | |||||
Total liabilities assumed including consideration transferred | $ 128,458 | |||||
Network1 [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Consideration transferred | $ 29,100 | |||||
Earnout payments, period for remaining installments | 4 years | |||||
Cash paid for business acquisitions, net of cash acquired | (24,300) | |||||
Goodwill | 22,584 | |||||
Identifiable Intangible Assets | 23,258 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Cash acquired | 4,800 | |||||
Other non-current assets | $ 8,410 | 10,769 | ||||
Accrued expenses and other current liabilities | 406 | 520 | ||||
Other long-term liabilities | $ 8,410 | $ 10,769 | ||||
Net Debt, Short-term and Long-term [Member] | Network1 [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Assumed debt | $ 35,200 |
Goodwill and Other Identifiab31
Goodwill and Other Identifiable Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Net identifiable intangible assets | $ 57,459 | $ 46,272 |
Goodwill and Other Identifiab32
Goodwill and Other Identifiable Intangible Assets (Changes in the Carrying Amount of Goodwill) (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 66,509 |
Additions | 21,718 |
Foreign currency translation adjustment | (4,976) |
Goodwill, ending balance | 83,251 |
Barcode & Security Segment [Member] | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 15,535 |
Additions | 21,718 |
Foreign currency translation adjustment | (659) |
Goodwill, ending balance | 36,594 |
Communications & Services Segment [Member] | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 50,974 |
Additions | 0 |
Foreign currency translation adjustment | (4,317) |
Goodwill, ending balance | $ 46,657 |
Goodwill and Other Identifiab33
Goodwill and Other Identifiable Intangible Assets Goodwill and Other Identifiable Intangible Assets - Net Identifiable Intangible Assets (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2015USD ($) | |
Finite-lived Intangible Assets [Roll Forward] | |
Balance as of June 30, 2015 | $ 46,272 |
Additions | 18,500 |
Amortization expense | (2,185) |
Foreign currency translation adjustment | (5,128) |
Balance as of September 30, 2015 | $ 57,459 |
Short-Term Borrowings and Lon34
Short-Term Borrowings and Long-Term Debt (Narrative) (Details) € in Millions, £ in Millions | 3 Months Ended | 6 Months Ended | |||||
Sep. 30, 2015GBP (£) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015EUR (€) | Jun. 30, 2015USD ($) | |
Borrowings under revolving credit facility | $ 87,000,000 | $ 0 | |||||
Debt issuance costs | 1,000,000 | ||||||
Multi-Currency Revolving Credit Facility [Member] | |||||||
Borrowings under revolving credit facility | 87,000,000 | 0 | |||||
Line of credit facility, remaining borrowing capacity | $ 213,000,000 | $ 300,000,000 | |||||
Industrial Development Revenue Bond [Member] | |||||||
Percentage spread points on variable rate debt instrument | 0.85% | 0.85% | |||||
Maturity date of debt instrument | Sep. 1, 2032 | Sep. 1, 2032 | |||||
Long-term debt, percentage bearing variable interest | 1.05% | 1.05% | 1.05% | 1.03% | |||
Issuance date | Aug. 1, 2007 | Aug. 1, 2007 | |||||
Put option, exercisable period limitation | 180 days | 180 days | |||||
Maximum time period of interest (in years) | 10 years | 10 years | |||||
Percentage of principal due on exercise of put option | 100.00% | 100.00% | |||||
Long-term debt | $ 5,400,000 | $ 5,400,000 | |||||
Multi-Currency Invoice Discounting Credit Facility [Member] | |||||||
Line of credit facility, maximum borrowing capacity, percentage | 85.00% | 85.00% | 85.00% | ||||
Borrowing capacity under credit facility | £ 4.1 | $ 700,000 | € 4.1 | ||||
Percentage spread points on variable rate debt instrument | 1.85% | 1.85% | |||||
Line of credit facility, commitment fee (less than) | £ | £ 0.1 | ||||||
Multi-Currency Revolving Credit Facility, Combined with Accordion Feature [Member] | |||||||
Borrowing capacity under credit facility | 450,000,000 | ||||||
Multi-Currency Revolving Credit Facility, Accordion Feature [Member] | |||||||
Borrowing capacity under credit facility | 150,000,000 | ||||||
Multi-Currency Revolving Credit Facility [Member] | |||||||
Borrowing capacity under credit facility | $ 300,000,000 | ||||||
Amendment date of credit facility | Nov. 6, 2013 | Nov. 6, 2013 | |||||
Maturity of credit facility | Oct. 11, 2016 | Oct. 11, 2016 | |||||
Debt issuance costs incurred | $ 500,000 | ||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.175% | 0.175% | |||||
Average daily balance on revolving credit facility | $ 30,700,000 | $ 0 | |||||
Percentage of capital stock or other equity interest pledged per credit agreement | 65.00% | 65.00% | 65.00% | ||||
Multi-Currency Revolving Credit Facility [Member] | Amended Credit Agreement [Member] | |||||||
Maturity of credit facility | Nov. 6, 2018 | Nov. 6, 2018 | |||||
Multi-Currency Revolving Credit Facility [Member] | Minimum [Member] | |||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.175% | 0.175% | |||||
Multi-Currency Revolving Credit Facility [Member] | Maximum [Member] | |||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.40% | 0.40% | |||||
Letter of Credit [Member] | |||||||
Borrowing capacity under credit facility | $ 50,000,000 | ||||||
Alternate Base Rate Loans [Member] | Multi-Currency Revolving Credit Facility [Member] | |||||||
Percentage spread points on variable rate debt instrument | 0.00% | 0.00% | |||||
Alternate Base Rate Loans [Member] | Multi-Currency Revolving Credit Facility [Member] | Minimum [Member] | |||||||
Percentage spread points on variable rate debt instrument | 0.00% | 0.00% | |||||
Alternate Base Rate Loans [Member] | Multi-Currency Revolving Credit Facility [Member] | Maximum [Member] | |||||||
Percentage spread points on variable rate debt instrument | 1.25% | 1.25% | |||||
London Interbank Offered Rate (LIBOR) [Member] | Multi-Currency Revolving Credit Facility [Member] | |||||||
Percentage spread points on variable rate debt instrument | 1.00% | 1.00% | |||||
London Interbank Offered Rate (LIBOR) [Member] | Multi-Currency Revolving Credit Facility [Member] | Minimum [Member] | |||||||
Percentage spread points on variable rate debt instrument | 1.00% | 1.00% | |||||
London Interbank Offered Rate (LIBOR) [Member] | Multi-Currency Revolving Credit Facility [Member] | Maximum [Member] | |||||||
Percentage spread points on variable rate debt instrument | 2.25% | 2.25% | |||||
Network1 Term Loan, Banco do Bradesco [Member] | |||||||
Maturity date of debt instrument | May 9, 2016 | May 9, 2016 | |||||
Long-term debt, percentage bearing fixed interest | 11.48% | 11.48% | 11.48% | ||||
Long-term debt | 1,800,000 | ||||||
Long-term debt, current maturities | $ 1,400,000 | ||||||
Network1 Term Loan, Banco do Brasil [Member] | |||||||
Maturity date of debt instrument | Oct. 28, 2017 | Oct. 28, 2017 | |||||
Long-term debt, percentage bearing fixed interest | 12.08% | 12.08% | 12.08% | ||||
Long-term debt | $ 700,000 | 900,000 | |||||
Long-term debt, current maturities | $ 300,000 | ||||||
Network1 [Member] | Term Loan Agreement [Member] | |||||||
Percentage spread points on variable rate debt instrument | 2.75% | 2.75% | |||||
Debt Instrument, Interest Rate, Effective Percentage | 13.60% | 13.60% | 13.60% | ||||
Maturity date of debt instrument | Sep. 21, 2015 | Sep. 21, 2015 | |||||
Long-term debt, percentage bearing fixed interest | 3.60% | 3.60% | 3.60% | ||||
Long-term debt, current maturities | $ 0 | $ 700,000 |
Derivatives and Hedging Activ35
Derivatives and Hedging Activities (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2015 | |
Derivative [Line Items] | |||
Interest expense | $ 281 | $ 190 | |
Forward foreign currency exchange contracts [Member] | |||
Derivative [Line Items] | |||
Notional amount of foreign currency contracts outstanding | 72,000 | $ 80,600 | |
Cross currency swap agreements [Member] | Network1 [Member] | |||
Derivative [Line Items] | |||
Interest expense | 100 | ||
Derivative asset, fair value | $ 0 | $ 100 |
Derivatives and Hedging Activ36
Derivatives and Hedging Activities (Derivative Contracts and Changes in Underlying Value of the Foreign Currency Exposures) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | ||
Net foreign exchange derivative contract (gains) losses | $ (1,702) | $ (1,414) |
Net foreign currency transactional and re-measurement (gains) losses | 2,529 | 1,862 |
Net foreign currency (gains) losses | $ 827 | $ 448 |
Derivatives and Hedging Activ37
Derivatives and Hedging Activities (Derivative Instruments) (Details) - Forward foreign currency exchange contracts [Member] $ in Thousands | Sep. 30, 2015USD ($) |
Designated as Hedge Instruments [Member] | |
Derivative assets: foreign exchange contracts | $ 0 |
Derivative liabilities: foreign exchange contracts | 0 |
Not Designated as Hedge Instruments [Member] | |
Derivative assets: foreign exchange contracts | 71 |
Derivative liabilities: foreign exchange contracts | $ 676 |
Fair Value of Financial Instr38
Fair Value of Financial Instruments (Short-term Investments and Financial Instruments at Fair Value) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 |
Assets | ||
Deferred compensation plan investments, current and non-current portion | $ 16,688 | $ 15,970 |
Forward foreign currency exchange contracts | 71 | 125 |
Cross currency swap agreements | 0 | 103 |
Total assets at fair value | 16,759 | 16,198 |
Liabilities | ||
Deferred compensation plan investments, current and non-current portion | 16,688 | 15,970 |
Forward foreign currency exchange contracts | 676 | 476 |
Liability for contingent consideration, current and non-current portion | 29,057 | 33,960 |
Total liabilities at fair value | 46,421 | 50,406 |
Quoted Prices in Active Markets (Level 1) [Member] | ||
Assets | ||
Deferred compensation plan investments, current and non-current portion | 16,688 | 15,970 |
Forward foreign currency exchange contracts | 0 | 0 |
Cross currency swap agreements | 0 | 0 |
Total assets at fair value | 16,688 | 15,970 |
Liabilities | ||
Deferred compensation plan investments, current and non-current portion | 16,688 | 15,970 |
Forward foreign currency exchange contracts | 0 | 0 |
Liability for contingent consideration, current and non-current portion | 0 | 0 |
Total liabilities at fair value | 16,688 | 15,970 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Deferred compensation plan investments, current and non-current portion | 0 | 0 |
Forward foreign currency exchange contracts | 71 | 125 |
Cross currency swap agreements | 0 | 103 |
Total assets at fair value | 71 | 228 |
Liabilities | ||
Deferred compensation plan investments, current and non-current portion | 0 | 0 |
Forward foreign currency exchange contracts | 676 | 476 |
Liability for contingent consideration, current and non-current portion | 0 | 0 |
Total liabilities at fair value | 676 | 476 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets | ||
Deferred compensation plan investments, current and non-current portion | 0 | 0 |
Forward foreign currency exchange contracts | 0 | 0 |
Cross currency swap agreements | 0 | 0 |
Total assets at fair value | 0 | 0 |
Liabilities | ||
Deferred compensation plan investments, current and non-current portion | 0 | 0 |
Forward foreign currency exchange contracts | 0 | 0 |
Liability for contingent consideration, current and non-current portion | 29,057 | 33,960 |
Total liabilities at fair value | $ 29,057 | $ 33,960 |
Fair Value of Financial Instr39
Fair Value of Financial Instruments (Fair Value, Business Acquisition, Liability for Contingent Consideration) (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Current portion of contingent consideration | $ 15,456,000 | $ 9,391,000 | |
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair value at beginning of period | 33,960,000 | $ 11,107,000 | |
Issuance of contingent consideration | 4,983,000 | ||
Payments | (5,529,000) | ||
Change in fair value of contingent consideration | 1,564,000 | 513,000 | |
Foreign currency translation adjustment | (6,467,000) | (912,000) | |
Fair value at end of period | 29,057,000 | 10,162,000 | |
Imago [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Contingent consideration arrangements, minimum range of outcome | 5,336,000 | ||
Contingent consideration arrangements, maximum range of outcome | 6,077,000 | ||
Network1 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Contingent consideration arrangements, maximum range of outcome | 26,026,000 | ||
Communications & Services Segment [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair value at beginning of period | 28,851,000 | 0 | |
Issuance of contingent consideration | 4,983,000 | ||
Payments | 0 | ||
Change in fair value of contingent consideration | 1,438,000 | 15,000 | |
Foreign currency translation adjustment | (5,346,000) | (30,000) | |
Fair value at end of period | 24,943,000 | 4,968,000 | |
Communications & Services Segment [Member] | Imago [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Change in fair value of contingent consideration | 300,000 | ||
Fair value at end of period | 5,600,000 | ||
Current portion of contingent consideration | 2,800,000 | ||
Communications & Services Segment [Member] | Network1 [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Change in fair value of contingent consideration | 1,100,000 | ||
Fair value at end of period | 19,400,000 | ||
Current portion of contingent consideration | 8,600,000 | ||
Barcode & Security Segment [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair value at beginning of period | 5,109,000 | 11,107,000 | |
Issuance of contingent consideration | 0 | ||
Payments | (5,529,000) | ||
Change in fair value of contingent consideration | 498,000 | ||
Foreign currency translation adjustment | (1,121,000) | (882,000) | |
Fair value at end of period | 4,114,000 | $ 5,194,000 | |
Barcode & Security Segment [Member] | CDC Brasil S A [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Change in fair value of contingent consideration | 126,000 | ||
Current portion of contingent consideration | $ 4,100,000 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 3 Months Ended |
Sep. 30, 2015segment | |
Segment Reporting, Measurement Disclosures [Abstract] | |
Number of reportable segments | 2 |
Segment Information (Financial
Segment Information (Financial Information by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||
Sales | $ 870,829 | $ 791,720 |
Depreciation and amortization | 3,938 | 1,897 |
Operating Income | 24,441 | 28,977 |
Capital expenditures | 433 | 7,319 |
Worldwide Barcode & Security [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | 515,669 | 500,960 |
Depreciation and amortization | 1,026 | 1,080 |
Operating Income | 13,082 | 12,541 |
Capital expenditures | 124 | 86 |
Worldwide Communications & Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | 355,160 | 290,760 |
Depreciation and amortization | 2,191 | 817 |
Operating Income | 11,579 | 17,786 |
Capital expenditures | 253 | 3 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization | 721 | 0 |
Operating Income | (220) | (1,350) |
Capital expenditures | 56 | 7,230 |
North American Distribution [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | 650,998 | 606,646 |
International Distribution [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | 228,898 | 195,929 |
Less intercompany sales [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | $ (9,067) | $ (10,855) |
Segment Information (Assets By
Segment Information (Assets By Segment) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 |
Assets | $ 1,543,267 | $ 1,476,941 |
Property and equipment, net | 45,461 | 46,574 |
Worldwide Barcode & Security [Member] | ||
Assets | 812,857 | 664,380 |
Worldwide Communications & Services [Member] | ||
Assets | 660,579 | 674,998 |
Corporate [Member] | ||
Assets | 69,831 | 137,563 |
North American Distribution [Member] | ||
Property and equipment, net | 40,763 | 41,159 |
International Distribution [Member] | ||
Property and equipment, net | $ 4,698 | $ 5,415 |
Commitments and Contingencies43
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 |
CDC Brasil S A [Member] | ||
Assets | ||
Prepaid expenses and other current assets | $ 2,465 | $ 3,156 |
Other non-current assets | 54 | 69 |
Liabilities | ||
Accrued expenses and other current liabilities | 2,465 | 3,156 |
Other long-term liabilities | 54 | 69 |
Network1 [Member] | ||
Assets | ||
Prepaid expenses and other current assets | 406 | 520 |
Other non-current assets | 8,410 | 10,769 |
Liabilities | ||
Accrued expenses and other current liabilities | 406 | 520 |
Other long-term liabilities | $ 8,410 | $ 10,769 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Jun. 30, 2015 | |
Income Taxes [Line Items] | ||
Gross unrecognized tax benefits | $ 1,300 | $ 1,301 |
Unrecognized tax benefits that would impact effective tax rate if recognized | 900 | |
Income tax penalties and interest accrued | $ 1,200 | |
Federal statutory income tax rate | 35.00% | |
Minimum [Member] | ||
Income Taxes [Line Items] | ||
Open year subject to income tax examinations | 2,010 | |
Belgium [Member] | ||
Income Taxes [Line Items] | ||
Pre-tax income | $ 900 |