Cover Page
Cover Page - shares | 9 Months Ended | |
Mar. 31, 2021 | May 07, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-26926 | |
Entity Registrant Name | ScanSource, Inc. | |
Entity Incorporation, State or Country Code | SC | |
Entity Tax Identification Number | 57-0965380 | |
Entity Address, Address Line One | 6 Logue Court | |
Entity Address, City or Town | Greenville | |
Entity Address, State or Province | SC | |
Entity Address, Postal Zip Code | 29615 | |
City Area Code | 864 | |
Local Phone Number | 288-2432 | |
Title of 12(b) Security | Common stock, no par value | |
Trading Symbol | SCSC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 25,466,365 | |
Entity Central Index Key | 0000918965 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Jun. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 49,321 | $ 29,485 |
Accounts receivable, less allowance of $21,180 at March 31, 2021 and $21,906 at June 30, 2020 | 509,404 | 443,185 |
Inventories | 459,652 | 454,885 |
Prepaid expenses and other current assets | 99,424 | 94,681 |
Current assets held for sale | 0 | 181,231 |
Total current assets | 1,117,801 | 1,203,467 |
Property and equipment, net | 45,316 | 55,641 |
Goodwill | 217,093 | 214,288 |
Identifiable intangible assets, net | 109,172 | 121,547 |
Deferred income taxes | 24,405 | 24,630 |
Other non-current assets | 68,835 | 72,521 |
Total assets | 1,582,622 | 1,692,094 |
Current liabilities: | ||
Accounts payable | 521,552 | 454,240 |
Accrued expenses and other current liabilities | 87,969 | 76,686 |
Current portion of contingent consideration | 0 | 46,334 |
Income taxes payable | 5,333 | 5,886 |
Current portion of long-term debt | 7,843 | 7,839 |
Current liabilities held for sale | 0 | 128,022 |
Total current liabilities | 622,697 | 719,007 |
Deferred income taxes | 4,309 | 3,884 |
Long-term debt, net of current portion | 137,206 | 143,175 |
Borrowings under revolving credit facility | 53,802 | 67,714 |
Other long-term liabilities | 74,033 | 80,068 |
Total liabilities | 892,047 | 1,013,848 |
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, 25,466,365 and 25,361,298 shares issued and outstanding at March 31, 2021 and June 30, 2020, respectively | 68,895 | 63,765 |
Retained earnings | 734,361 | 747,276 |
Accumulated other comprehensive loss | (112,681) | (132,795) |
Total shareholders’ equity | 690,575 | 678,246 |
Total liabilities and shareholders’ equity | $ 1,582,622 | $ 1,692,094 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Jun. 30, 2020 |
Current assets: | ||
Allowance for accounts receivable | $ 21,180 | $ 21,906 |
Shareholders’ equity: | ||
Preferred stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 45,000,000 | 45,000,000 |
Common stock, share issued (in shares) | 25,466,365 | 25,361,298 |
Common stock, shares outstanding (in shares) | 25,466,365 | 25,361,298 |
Condensed Consolidated Income S
Condensed Consolidated Income Statements (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 729,873 | $ 744,584 | $ 2,298,111 | $ 2,411,285 |
Cost of goods sold | 641,757 | 660,006 | 2,043,172 | 2,129,862 |
Gross profit | 88,116 | 84,578 | 254,939 | 281,423 |
Selling, general and administrative expenses | 60,099 | 64,971 | 182,681 | 201,344 |
Depreciation expense | 3,141 | 3,268 | 9,634 | 9,729 |
Intangible amortization expense | 4,880 | 5,159 | 14,595 | 15,007 |
Restructuring and other charges | 560 | 169 | 9,312 | 604 |
Change in fair value of contingent consideration | 0 | 618 | 516 | 6,266 |
Operating income | 19,436 | 10,393 | 38,201 | 48,473 |
Interest expense | 1,576 | 3,098 | 5,285 | 9,727 |
Interest income | (745) | (1,080) | (1,756) | (2,627) |
Other (income) expense, net | (302) | (137) | 183 | 198 |
Income before income taxes | 18,907 | 8,512 | 34,489 | 41,175 |
Provision for income taxes | 5,121 | 2,797 | 9,757 | 11,542 |
Net income from continuing operations | 13,786 | 5,715 | 24,732 | 29,633 |
Net loss from discontinued operations | (688) | (4,002) | (37,647) | (5,025) |
Net income (loss) | $ 13,098 | $ 1,713 | $ (12,915) | $ 24,608 |
Per share data: | ||||
Net income from continuing operations per common share, basic (in dollars per share) | $ 0.54 | $ 0.23 | $ 0.97 | $ 1.17 |
Net loss from discontinued operations per common share, basic (in dollars per share) | (0.03) | (0.16) | (1.48) | (0.20) |
Net income (loss) per common share, basic (in dollars per share) | $ 0.51 | $ 0.07 | $ (0.51) | $ 0.97 |
Weighted-average shares outstanding, basic (in shares) | 25,455 | 25,346 | 25,404 | 25,386 |
Net income from continuing operations per common share, diluted (in dollars per share) | $ 0.54 | $ 0.23 | $ 0.97 | $ 1.16 |
Net loss from discontinued operations per common share, diluted (in dollars per share) | (0.03) | (0.16) | (1.48) | (0.20) |
Net income (loss) per common share, diluted (in dollars per share) | $ 0.51 | $ 0.07 | $ (0.51) | $ 0.97 |
Weighted-average shares outstanding, diluted (in shares) | 25,572 | 25,363 | 25,484 | 25,444 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||||
Net income (loss) | $ 13,098 | $ 1,713 | $ (12,915) | $ 24,608 |
Unrealized gain (loss) on hedged transaction, net of tax | 1,582 | (4,046) | 2,209 | (4,217) |
Unrealized foreign currency translation adjustment | (9,216) | (28,788) | 6,269 | (34,869) |
Realized foreign currency loss from discontinued operations | 0 | 0 | 11,635 | 0 |
Comprehensive income (loss) | $ 5,464 | $ (31,121) | $ 7,198 | $ (14,478) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Jun. 30, 2019 | 25,408,397 | |||
Beginning balance at Jun. 30, 2019 | $ 914,129 | $ 64,287 | $ 939,930 | $ (90,088) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 11,530 | 11,530 | ||
Unrealized gain (loss) on hedged transaction, net of tax | (1,071) | (1,071) | ||
Unrealized foreign currency translation adjustment | (14,639) | (14,639) | ||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares) | 786 | |||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes | (12) | $ (12) | ||
Common stock repurchased (in shares) | (168,068) | |||
Common stock repurchased | (5,432) | $ (5,432) | ||
Share-based compensation | 1,246 | $ 1,246 | ||
Ending balance (in shares) at Sep. 30, 2019 | 25,241,115 | |||
Ending balance at Sep. 30, 2019 | 905,751 | $ 60,089 | 951,460 | (105,798) |
Beginning balance (in shares) at Jun. 30, 2019 | 25,408,397 | |||
Beginning balance at Jun. 30, 2019 | 914,129 | $ 64,287 | 939,930 | (90,088) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 24,608 | |||
Unrealized gain (loss) on hedged transaction, net of tax | (4,217) | |||
Unrealized foreign currency translation adjustment | (34,869) | |||
Realized foreign currency loss from discontinued operations | 0 | |||
Ending balance (in shares) at Mar. 31, 2020 | 25,345,798 | |||
Ending balance at Mar. 31, 2020 | 897,678 | $ 62,314 | 964,538 | (129,174) |
Beginning balance (in shares) at Sep. 30, 2019 | 25,241,115 | |||
Beginning balance at Sep. 30, 2019 | 905,751 | $ 60,089 | 951,460 | (105,798) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 11,366 | 11,366 | ||
Unrealized gain (loss) on hedged transaction, net of tax | 900 | 900 | ||
Unrealized foreign currency translation adjustment | 8,558 | 8,558 | ||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares) | 104,683 | |||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes | (621) | $ (621) | ||
Share-based compensation | 1,627 | $ 1,627 | ||
Ending balance (in shares) at Dec. 31, 2019 | 25,345,798 | |||
Ending balance at Dec. 31, 2019 | 927,580 | $ 61,095 | 962,825 | (96,340) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 1,713 | 1,713 | ||
Unrealized gain (loss) on hedged transaction, net of tax | (4,046) | (4,046) | ||
Unrealized foreign currency translation adjustment | (28,788) | (28,788) | ||
Realized foreign currency loss from discontinued operations | 0 | |||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares) | 0 | |||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes | 34 | $ 34 | ||
Share-based compensation | 1,185 | $ 1,185 | ||
Ending balance (in shares) at Mar. 31, 2020 | 25,345,798 | |||
Ending balance at Mar. 31, 2020 | 897,678 | $ 62,314 | 964,538 | (129,174) |
Beginning balance (in shares) at Jun. 30, 2020 | 25,361,298 | |||
Beginning balance at Jun. 30, 2020 | 678,246 | $ 63,765 | 747,276 | (132,795) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (11,819) | (11,819) | ||
Unrealized gain (loss) on hedged transaction, net of tax | 109 | 109 | ||
Unrealized foreign currency translation adjustment | 3,511 | 3,511 | ||
Share-based compensation | 1,180 | $ 1,180 | ||
Ending balance (in shares) at Sep. 30, 2020 | 25,361,298 | |||
Ending balance at Sep. 30, 2020 | 671,227 | $ 64,945 | 735,457 | (129,175) |
Beginning balance (in shares) at Jun. 30, 2020 | 25,361,298 | |||
Beginning balance at Jun. 30, 2020 | 678,246 | $ 63,765 | 747,276 | (132,795) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (12,915) | |||
Unrealized gain (loss) on hedged transaction, net of tax | 2,209 | |||
Unrealized foreign currency translation adjustment | 6,269 | |||
Realized foreign currency loss from discontinued operations | 11,635 | |||
Ending balance (in shares) at Mar. 31, 2021 | 25,466,365 | |||
Ending balance at Mar. 31, 2021 | 690,575 | $ 68,895 | 734,361 | (112,681) |
Beginning balance (in shares) at Sep. 30, 2020 | 25,361,298 | |||
Beginning balance at Sep. 30, 2020 | 671,227 | $ 64,945 | 735,457 | (129,175) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (14,194) | (14,194) | ||
Unrealized gain (loss) on hedged transaction, net of tax | 519 | 519 | ||
Unrealized foreign currency translation adjustment | 11,974 | 11,974 | ||
Realized foreign currency loss from discontinued operations | 11,635 | 11,635 | ||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares) | 90,342 | |||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes | (1,036) | $ (1,036) | ||
Share-based compensation | 2,015 | $ 2,015 | ||
Ending balance (in shares) at Dec. 31, 2020 | 25,451,640 | |||
Ending balance at Dec. 31, 2020 | 682,139 | $ 65,924 | 721,263 | (105,048) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 13,098 | 13,098 | ||
Unrealized gain (loss) on hedged transaction, net of tax | 1,582 | 1,582 | ||
Unrealized foreign currency translation adjustment | (9,216) | (9,216) | ||
Realized foreign currency loss from discontinued operations | 0 | |||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares) | 14,725 | |||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes | 439 | $ 439 | ||
Share-based compensation | 2,532 | $ 2,532 | ||
Ending balance (in shares) at Mar. 31, 2021 | 25,466,365 | |||
Ending balance at Mar. 31, 2021 | $ 690,575 | $ 68,895 | $ 734,361 | $ (112,681) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (12,915) | $ 24,608 |
Net loss from discontinued operations | (37,647) | (5,025) |
Net income from continuing operations | 24,732 | 29,633 |
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: | ||
Depreciation and amortization | 25,417 | 26,585 |
Amortization of debt issue costs | 313 | 313 |
Provision for doubtful accounts | 226 | 1,399 |
Share-based compensation | 5,711 | 4,053 |
Deferred income taxes | (26) | (1,479) |
Change in fair value of contingent consideration | 516 | 6,266 |
Contingent consideration payments excess | (5,457) | (3,050) |
Finance lease interest | 96 | 64 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (68,654) | (85) |
Inventories | (5,907) | (7,446) |
Prepaid expenses and other assets | (1,641) | (10,977) |
Other non-current assets | 2,846 | (1,029) |
Accounts payable | 69,609 | 55,378 |
Accrued expenses and other liabilities | 8,434 | 13,233 |
Income taxes payable | (793) | (4,775) |
Net cash provided by operating activities of continuing operations | 55,422 | 108,083 |
Cash flows from investing activities of continuing operations: | ||
Capital expenditures | (2,283) | (6,575) |
Cash paid for business acquisitions, net of cash acquired | 0 | (48,915) |
Proceeds from the sale of discontinued operations | 34,356 | 0 |
Net cash provided by (used in) investing activities of continuing operations | 32,073 | (55,490) |
Cash flows from financing activities of continuing operations: | ||
Borrowings on revolving credit, net of expenses | 1,486,464 | 1,608,472 |
Repayments on revolving credit, net of expenses | (1,500,375) | (1,650,862) |
Borrowings on long-term debt, net | (5,964) | (3,147) |
Repayments of finance lease obligations | (974) | (660) |
Contingent consideration payments | (41,393) | (35,481) |
Exercise of stock options | 439 | 754 |
Taxes paid on settlement of equity awards | (1,036) | (1,354) |
Repurchase of common stock | 0 | (6,077) |
Net cash used in financing activities of continuing operations | (62,839) | (88,355) |
Cash flows from discontinued operations: | ||
Net cash flows provided by operating activities of discontinued operations | 21,704 | 42,000 |
Net cash flows used in by investing activities of discontinued operations | (58) | (48) |
Net cash flows (used in) provided by financing activities of discontinued operations | (29,494) | 6,739 |
Net cash flows (used in) provided by discontinued operations | (7,848) | 48,691 |
Effect of exchange rate changes on cash and cash equivalents | (1,942) | (2,151) |
Increase in cash and cash equivalents | 14,866 | 10,778 |
Cash and cash equivalents at beginning of period | 34,455 | 23,818 |
Cash and cash equivalents at end of period | 49,321 | 34,596 |
Cash and cash equivalents of discontinued operations | 0 | 4,838 |
Cash and cash equivalents of continuing operations | $ 49,321 | $ 29,758 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 9 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Business and Summary of Significant Accounting Policies | Business and Summary of Significant Accounting Policies Business Description ScanSource, Inc. (together with its subsidiaries referred to as “the Company” or “ScanSource”) is at the center of the solution delivery channel, connecting businesses and providing technology solutions. The Company brings technology solutions and services from the world’s leading suppliers of mobility and barcode, point-of-sale (POS), payments, physical security, unified communications and collaboration, telecom and cloud services to market. The Company operates in the United States, Canada, Brazil and the UK. During the quarter ended December 31, 2020, the Company completed the divestitures of its products distribution business in the UK, Europe and Latin America, outside of Brazil. The Company's two operating segments, Worldwide Barcode, Networking & Security and Worldwide Communications & Services, are based on product, customer and service type. COVID-19 In early March 2020, the World Health Organization characterized the novel coronavirus ("COVID-19") as a pandemic. The rapid spread of COVID-19 since December 2019 has resulted in the implementation of numerous measures to contain the virus worldwide, such as travel bans and restrictions, quarantines, shelter-in-place orders and business shutdowns. The Company moved quickly to transition its employees, where possible, to a fully remote working environment. The Company took steps to deploy teams to monitor the rapidly evolving situation and recommend risk mitigation actions; implement travel restrictions; and have employees follow physical distancing practices. The Company is following guidance from authorities and health officials including, but not limited to, checking the temperature of associates when entering its facilities, requiring associates to wear masks and other protective clothing as appropriate, and implementing additional cleaning and sanitation routines. All of the Company's distribution facilities have remained open and operational. Most of the Company's office-based employees around the world are working remotely. The pandemic and these containment measures have had, and are expected to continue to have, a substantial impact on businesses around the world, including the Company, and on global, regional and national economies. The Company is unable to predict the ultimate impact that COVID-19 will have on its business due to the inability to predict the duration or magnitude of the virus' impact. In fiscal year 2020, the Company experienced decreased revenue and increased employee-related healthcare and prevention costs as a result of the COVID-19 pandemic. While the Company has made adjustments, including implementing an annualized expense reduction plan for fiscal year 2021, the Company will continue to monitor and make adjustments to the operating practices that it believes to be in the best interests of its employees, customers, suppliers, and shareholders. For further discussion on the potential future impacts of COVID-19, see the Risk Factors presented in Part I, Item 1A in the Company's form 10-K for fiscal year 2020. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared by the Company’s management in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position at March 31, 2021 and June 30, 2020, the results of operations for the quarters and nine months ended March 31, 2021 and 2020, the statements of comprehensive income for the quarters and nine months ended March 31, 2021 and 2020, the statements of shareholders' equity for the quarters and nine months ended March 31, 2021 and 2020 and the statements of cash flows for the nine months ended March 31, 2021 and 2020. The results of operations for the quarters and nine months ended March 31, 2021 and 2020 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, 2020. The Company has reclassified certain prior year amounts for the results of discontinued operations to conform to the current year presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only. Summary of Significant Accounting Policies Except as described below, there have been no material changes to the Company’s significant accounting policies for the nine months ended March 31, 2021 from the policies described 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, 2020. 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, 2020. See Note 2 - Trade Accounts and Notes Receivable for a discussion of the current expected credit loss policy established upon adoption of Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (ASC Topic 326) in fiscal year 2021. Restructuring Costs The Company groups exit or disposal cost obligations into two categories: (i) severance and benefit costs and (ii) other. Employee separation costs are recognized upon communication of the restructuring plan to the identified employees. Other associated restructuring costs are expensed as incurred. See Note 14 - Restructuring for further disclosures. 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 zero-balance disbursement accounts at various financial institutions at which the Company does not maintain significant depository relationships. Due to the terms of the agreements governing these accounts, the Company generally does not have the right to offset 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. As a result, checks released but not yet cleared from these accounts in the amounts of $17.0 million and $17.1 million are included in accounts payable on the condensed consolidated balance sheets at March 31, 2021 and June 30, 2020, respectively. Long-lived Assets The Company presents depreciation expense and intangible amortization expense on the Condensed Consolidated Income Statements. The Company's depreciation expense related to selling, general and administrative costs totaled $3.1 million and $9.6 million for the quarter and nine months ended March 31, 2021, respectively, and $3.3 million and $9.7 million for the quarter and nine months ended March 31, 2020, respectively. Depreciation expense reported as part of cost of goods sold on the Condensed Consolidated Income Statements totaled $0.3 million and $1.2 million for the quarter and nine months ended March 31, 2021, respectively, and $0.6 million and $1.8 million for the quarter and nine months ended March 31, 2020, respectively. The Company's intangible amortization expense reported on the Condensed Consolidated Income Statements relates to selling, general and administrative costs, not the cost of selling goods. Intangible amortization expense totaled $4.9 million and $14.6 million for the quarter and nine months ended March 31, 2021, respectively, and $5.2 million and $15.0 million for the quarter and nine months ended March 31, 2020, respectively. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (ASC Topic 326). In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326: Financial Instruments - Credit Losses, which provides supplemental guidance and clarification to ASU 2016-13 and must be adopted concurrently . The pronouncement revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. The Company adopted this standard effective July 1, 2020 and it did not have a material impact on the Company's consolidated financial statements. See Note 2 - Trade Accounts and Notes Receivable for disclosures related to the adoption of ASU 2016-13. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement (ASC Topic 820) Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement . The pronouncement eliminates, modifies and adds disclosure requirements for fair value measurements. The Company adopted this standard effective July 1, 2020 and it had no impact on its consolidated financial statements. The Company has reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on its consolidated financial statements as a result of future adoption. |
Trade Accounts and Notes Receiv
Trade Accounts and Notes Receivable, Net | 9 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Trade Accounts and Notes Receivable, Net | Trade Accounts and Notes Receivable, Net The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from customers’ failure to make payments on accounts receivable due to the Company. The Company has notes receivable with certain customers, which are included in “Accounts receivable, less allowance” in the Condensed Consolidated Balance Sheets. Management determines the estimate of the allowance for doubtful accounts receivable by considering a number of factors, including: (i) historical experience, (ii) aging of the accounts receivable, (iii) specific information obtained by the Company on the financial condition and the current creditworthiness of its customers, (iv) the current economic and country-specific environment and (v) reasonable and supportable forecasts about collectability. Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model. Receivables that do not share risk characteristics are evaluated on an individual basis. Estimates of expected credit losses on trade receivables over the contractual life are recorded at inception. The changes in the allowance for doubtful accounts for the nine months ended March 31, 2021 are set forth in the table below. June 30, 2020 Amounts Charged to Expense Write-offs Other (1) March 31, 2021 (in thousands) Trade accounts and current notes receivable allowance $ 21,906 $ 226 $ (1,603) $ 651 $ 21,180 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company provides technology solutions and services from the world's leading suppliers of mobility and barcode, POS, payments, physical security, unified communications and collaboration, and telecom and cloud services. This includes hardware, related accessories and device configuration as well as software licenses, professional services and hardware support programs. In determining the appropriate amount of revenue to recognize, the Company applies the following five-step model: (i) identify contracts with customers; (ii) identify performance obligations in the contracts; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations per the contracts; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company recognizes revenue as control of products and services are transferred to customers, which is generally at the point of shipment. The Company delivers products to customers in several ways, including: (i) shipment from the Company's warehouse, (ii) drop-shipment directly from the supplier, or (iii) electronic delivery for non-physical products. Principal versus Agent Considerations The Company is the principal for sales of all hardware, certain software and services, including self-branded warranty programs. The Company considers itself the principal in these transactions as it has control of the product or service before it is transferred to the customer. When the Company provides self-branded warranty programs, it engages a third party, generally the original equipment manufacturer, to cover the fulfillment of any obligations arising from these contracts. These revenues and associated third-party costs are amortized over the life of the contract on a straight-line basis. The Company recognizes the previously described revenue and cost of goods sold on a gross basis. The Company is the agent for third-party service contracts, including product warranties and supplier-hosted software. These service contracts are sold separately from the products, and the Company often serves as the agent for the contract on behalf of the original equipment manufacturer. The Company's responsibility is to arrange for the provision of the specified service by the original equipment manufacturer, and the Company does not control the specified service before it is transferred to the customer. Because the Company acts as an agent, revenue is recognized net of cost at the time of sale. Related to the Company’s Intelisys business, the Company acts as a master agent connecting independent sales partners with service providers or suppliers who offer telecom and cloud services to end-customers. Intelisys’ sales partners earn commission payments from those service providers or suppliers on end-customer sales. Intelisys provides commission processing services to sales partners, earning a percentage of the commission stream. Because the Company acts as an agent, revenue is recognized on a net basis. Variable Considerations For certain transactions, products are sold with a right of return and may also provide other rebates or incentives, which are accounted for as variable consideration. The Company estimates returns allowance based on historical experience and reduces revenue accordingly. The Company estimates the amount of variable consideration for rebates and incentives by using the expected value or the most likely amount to be given to the customer and reduces the revenue by those estimated amounts. These estimates are reviewed and updated as necessary at the end of each reporting period. Contract Balances The Company records contract assets and liabilities for payments received from customers in advance of services performed. These assets and liabilities are the result of the sales of the Company's self-branded warranty programs and other transactions where control has not yet passed to the customer. These amounts are immaterial to the consolidated financial statements for the periods presented. Disaggregation of Revenue The following tables represent the Company's disaggregation of revenue: Quarter ended March 31, 2021 (in thousands) Worldwide Barcode, Networking & Security Segment Worldwide Communications & Services Segment Total Revenue by product/service: Technology solutions $ 502,227 $ 211,369 $ 713,596 Intelisys — 16,277 16,277 $ 502,227 $ 227,646 $ 729,873 Nine months ended March 31, 2021 (in thousands) Worldwide Barcode, Networking & Security Segment Worldwide Communications & Services Segment Total Revenue by product/service: Technology solutions $ 1,577,197 $ 673,134 $ 2,250,331 Intelisys — 47,780 47,780 $ 1,577,197 $ 720,914 $ 2,298,111 Quarter ended March 31, 2020 (in thousands) Worldwide Barcode, Networking & Security Segment Worldwide Communications & Services Segment Total Revenue by product/service: Technology solutions $ 489,218 $ 240,819 $ 730,037 Intelisys — 14,547 14,547 $ 489,218 $ 255,366 $ 744,584 Nine months ended March 31, 2020 (in thousands) Worldwide Barcode, Networking & Security Segment Worldwide Communications & Services Segment Total Revenue by product/service: Technology solutions $ 1,645,406 $ 723,557 $ 2,368,963 Intelisys — 42,322 42,322 $ 1,645,406 $ 765,879 $ 2,411,285 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Mar. 31, 2021 | |
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 Nine months ended March 31, March 31, 2021 2020 2021 2020 (in thousands, except per share data) Numerator: Net income from continuing operations $ 13,786 $ 5,715 $ 24,732 $ 29,633 Net loss from discontinued operations (688) (4,002) (37,647) (5,025) Net (loss) income $ 13,098 $ 1,713 $ (12,915) $ 24,608 Denominator: Weighted-average shares, basic 25,455 25,346 25,404 25,386 Dilutive effect of share-based payments 117 17 80 58 Weighted-average shares, diluted 25,572 25,363 25,484 25,444 Net income from continuing operations per common share, basic $ 0.54 $ 0.23 $ 0.97 $ 1.17 Net loss from discontinued operations per common share, basic (0.03) (0.16) (1.48) (0.20) Net (loss) income per common share, basic $ 0.51 $ 0.07 $ (0.51) $ 0.97 Net income from continuing operations per common share, diluted $ 0.54 $ 0.23 $ 0.97 $ 1.16 Net loss from discontinued operations per common share, diluted (0.03) (0.16) (1.48) (0.20) Net (loss) income per common share, diluted $ 0.51 $ 0.07 $ (0.51) $ 0.97 For the quarter and nine months ended March 31, 2021, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 1,532,961 and 1,285,153, respectively. For the quarter and nine months ended March 31, 2020, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 1,036,740 and 980,803, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated other comprehensive loss consists of the following: March 31, 2021 June 30, 2020 (in thousands) Foreign currency translation adjustment $ (108,069) $ (125,974) Unrealized loss on hedged transaction, net of tax (4,612) (6,821) Accumulated other comprehensive loss $ (112,681) $ (132,795) The tax effect of amounts in comprehensive (income) loss reflect a tax expense or (benefit) as follows: Quarter ended March 31, Nine months ended March 31, 2021 2020 2021 2020 (in thousands) Tax expense (benefit) $ 1,088 $ 617 $ 1,348 $ 921 |
Acquisitions
Acquisitions | 9 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions intY On July 1, 2019, the Company acquired all of the outstanding shares of intY and its CASCADE cloud services distribution platform. The purchase price of this acquisition, net of cash acquired, was approximately $48.9 million. The purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date. Intangible assets acquired include trade names, customer relationships, and developed technology. Goodwill recognized on this acquisition is not deductible for tax purposes. The impact of this acquisition was not material to the consolidated financial statements. The Company recognized $0.1 million and $0.5 million for the quarter and nine months ended March 31, 2020, respectively, in acquisition-related costs included in selling, general and administrative expenses on the Condensed Consolidated Income Statements in connection with this acquisition. This acquisition is included in the Worldwide Communications & Services segment. |
Goodwill and Other Identifiable
Goodwill and Other Identifiable Intangible Assets | 9 Months Ended |
Mar. 31, 2021 | |
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 nine months ended March 31, 2021, by reporting segment, are set forth in the table below. Worldwide Barcode, Networking & Security Segment Worldwide Communications & Services Segment Total (in thousands) Balance at June 30, 2020 $ 16,370 $ 197,918 $ 214,288 Foreign currency translation adjustment — 2,805 2,805 Balance at March 31, 2021 $ 16,370 $ 200,723 $ 217,093 The following table shows changes in the amount recognized for net identifiable intangible assets for the nine months ended March 31, 2021. Net Identifiable Intangible Assets (in thousands) Balance at June 30, 2020 $ 121,547 Amortization expense (14,595) Foreign currency translation adjustment 2,220 Balance at March 31, 2021 $ 109,172 |
Short-Term Borrowings and Long-
Short-Term Borrowings and Long-Term Debt | 9 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Short-Term Borrowings and Long-Term Debt | Short-Term Borrowings and Long-Term Debt The following table presents the Company’s debt for continuing and discontinued operations at March 31, 2021 and June 30, 2020. March 31, 2021 June 30, 2020 (in thousands) Short-term borrowings (a) $ — $ 3,524 Current portion of long-term debt 7,843 7,839 Mississippi revenue bond, net of current portion 4,081 4,425 Senior secured term loan facility, net of current portion 133,125 138,750 Borrowings under revolving credit facility (b) 53,802 92,418 Total debt $ 198,851 $ 246,956 (a) Short-term borrowings are classified as held for sale in the Consolidated Balance sheets for the Company's discontinued operations at June 30, 2020. (b) Borrowings under the revolving credit facility classified as held for sale in the Consolidated Balance Sheets for the Company's discontinued operations totaled $24.7 million at June 30, 2020. Short-term Borrowings The Company had a bank overdraft facility with Bank of America used by its products distribution business in the UK and European Union recognized as short-term borrowings. The facility was terminated with the sale of the business in November 2020. The facility allowed the Company to disburse checks in excess of bank balances up to $14.0 million U.S. dollar equivalent for up to seven days. Borrowings under the overdraft facility had an interest rate equal to 1% over the applicable currency's London Interbank Offered Rate ("LIBOR") with a zero percent floor. There were no borrowings outstanding under the overdraft facility at March 31, 2021. At June 30, 2020, there was $3.5 million outstanding under the overdraft facility classified as held for sale in the Consolidated Balance Sheets. The borrowings were denominated in euros, which bore a negative LIBOR rate at June 30, 2020, and as such the interest applicable to the Company was 1.0%. Credit Facility The Company has a multi-currency senior secured credit facility with JPMorgan Chase Bank N.A., as administrative agent, and a syndicate of banks (the “Amended Credit Agreement”). On April 30, 2019, the Company amended this credit facility to expand the borrowing capacity and extend its maturity to April 30, 2024. The Amended Credit Agreement includes (i) a five-year $350 million multi-currency senior secured revolving credit facility and (ii) a five-year $150 million senior secured term loan facility. Pursuant to an “accordion feature,” the Company may increase its borrowings up to an additional $250 million, subject to obtaining additional credit commitments from the lenders participating in the increase. The Amended Credit Agreement allows for the issuance of up to $50 million for letters of credit, subject to obtaining additional credit commitments from the lenders participating in the increase. The Company incurred debt issuance costs of $1.1 million in connection with the amendments to the Amended Credit Agreement. These costs were capitalized to other non-current 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 under the Amended Credit Agreement, other than swingline loans, bear interest at a rate equal to a spread over the LIBOR or alternate base rate depending upon the Company's net leverage ratio, calculated as total debt less up to $15 million of unrestricted domestic cash ("Credit Facility Net Debt") to trailing four-quarter adjusted earnings before interest expense, taxes, depreciation and amortization ("Credit Facility EBITDA") (the "Leverage Ratio"). This spread ranges from 1.00% to 1.75% for LIBOR-based loans and 0.00% to 0.75% for alternate base rate loans. Additionally, the Company is charged commitment fees ranging from 0.15% to 0.30%, depending upon the Leverage Ratio, on non-utilized borrowing availability, excluding swingline loans. The Amended Credit Agreement provides for the substitution of a new interest rate benchmark upon the transition from LIBOR, subject to agreement between the Company and the administrative agent. Borrowings under the Amended Credit Agreement 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. Under the terms of the revolving credit facility, the payment of cash dividends is restricted. The spread in effect as of March 31, 2021 was 1.25% for LIBOR-based loans and 0.25% for alternate base rate loans. The commitment fee rate in effect at March 31, 2021 was 0.20%. The Amended Credit Agreement includes customary representations, warranties, and affirmative and negative covenants, including financial covenants. Specifically, the Company’s Leverage Ratio must be less than or equal to 3.50 to 1.00 at all times. In addition, the Company’s Interest Coverage Ratio (as such term is defined in the Amended Credit Agreement) must be at least 3.00 to 1.00 at the end of each fiscal quarter. In the event of a default, customary remedies are available to the lenders, including acceleration and increased interest rates. The Company was in compliance with all covenants under the credit facility at March 31, 2021. Including borrowings for both continuing and discontinued operations, the average daily outstanding balance on the revolving credit facility, excluding the term loan facility, during the nine month periods ended March 31, 2021 and 2020 was $62.1 million and $252.4 million, respectively. Taking into consideration outstanding borrowings on the multi-currency revolving credit facility for both continuing and discontinued operations, there was $296.2 million and $257.3 million available for additional borrowings as of March 31, 2021 and June 30, 2020, respectively. At March 31, 2021, based upon the Leverage Ratio calculation, there was $172.6 million available for additional borrowings. There were no letters of credit issued under the multi-currency revolving credit facility at March 31, 2021 and $0.3 million at June 30, 2020. Mississippi Revenue Bond 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 warehouse, 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. At March 31, 2021, the Company was in compliance with all covenants under this bond. The interest rates at March 31, 2021 and June 30, 2020 were 0.96% and 1.03%, respectively. Debt Issuance Costs At March 31, 2021, net debt issuance costs associated with the credit facility and bond totaled $1.3 million and are being amortized through the maturity date of each respective debt instrument. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Mar. 31, 2021 | |
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. 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 U.S. GAAP. The Company records all derivatives on the consolidated 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 and is exposed to market risk for changes in foreign currency exchange rates. The Company attempts to hedge transaction exposures with natural offsets to the fullest extent possible and once these opportunities have been exhausted the Company uses currency options and forward contracts or other hedging instruments with third parties. These contracts will periodically hedge the exchange of various currencies, including the U.S. dollar, Brazilian real, euro, British pound and Canadian dollar for continuing operations. The Company had contracts outstanding for purposes of managing cash flows with notional amounts of $25.5 million and $16.6 million for the exchange of foreign currencies at March 31, 2021 and June 30, 2020, 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 included in the Condensed Consolidated Income Statements for the quarters and nine months ended March 31, 2021 and 2020 are as follows: Quarter ended Nine months ended March 31, March 31, 2021 2020 2021 2020 (in thousands) Net foreign exchange derivative contract (gains) losses $ (1,061) $ (3,264) $ 852 $ (3,749) Net foreign currency transactional and re-measurement losses (gains) 1,020 3,168 (74) 3,835 Net foreign currency exchange (gains) losses $ (41) $ (96) $ 778 $ 86 Net foreign currency 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 currency exchange gains and losses are generated as the result of fluctuations in the value of 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. Interest Rates - The Company’s earnings are also affected by changes in interest rates due to the impact those changes have on interest expense from floating rate debt instruments. The Company manages its exposure to changes in interest rates by using interest rate swaps to hedge this exposure and to achieve a desired proportion of fixed versus floating rate debt. The Company entered into an interest rate swap agreement, which was subsequently settled, and entered into a new amended agreement on April 30, 2019. The swap agreement has a notional amount of $100.0 million, with a $50.0 million tranche scheduled to mature on April 30, 2024 and a $50.0 million tranche scheduled to mature April 30, 2026. This swap agreement is designated as a cash flow hedge to hedge the variable rate interest payments on the revolving credit facility. Interest rate differentials paid or received under the swap agreement are recognized as adjustments to interest expense. To the extent the swap is effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swap are not included in current earnings but are reported as other comprehensive income (loss). There was no ineffective portion to be recorded as an adjustment to earnings for the quarters and nine months ended March 31, 2021 and 2020. The components of the cash flow hedge included in the Condensed Consolidated Statement of Comprehensive Income for the quarters and nine months ended March 31, 2021 and 2020, are as follows: Quarter ended Nine months ended March 31, March 31, 2021 2020 2021 2020 (in thousands) Net interest expense recognized as a result of interest rate swap $ 557 $ 180 $ 1,682 $ 343 Unrealized gain (loss) in fair value of interest rate swap 1,549 (5,518) 1,281 (5,890) Net increase (decrease) in accumulated other comprehensive income 2,106 (5,338) 2,963 (5,547) Income tax effect 524 (1,292) 754 (1,330) Net increase (decrease) in accumulated other comprehensive income, net of tax $ 1,582 $ (4,046) $ 2,209 $ (4,217) The Company used the following derivative instruments at March 31, 2021 and June 30, 2020, reflected in its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above: March 31, 2021 June 30, 2020 Balance Sheet Location Fair Value of Fair Value of Fair Value of Fair Value of (in thousands) Derivative liabilities: Foreign exchange contracts Accrued expenses and other current liabilities $ — $ 45 $ — $ 26 Foreign currency hedge Accrued expenses and other current liabilities $ 275 $ — $ — $ — Interest rate swap agreement Other long-term liabilities $ 6,340 $ — $ 9,433 $ — |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Mar. 31, 2021 | |
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 classifies certain assets and liabilities based on the fair value hierarchy, which aggregates 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 forward foreign currency exchange contracts, interest rate swap agreements and contingent consideration owed to the previous owners of Intelisys. The carrying value of debt is considered to approximate fair value, as the Company’s debt instruments are indexed to a variable rate using the market approach (Level 2 criteria). The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at March 31, 2021: Total Quoted Significant Significant (in thousands) Assets: Deferred compensation plan investments, current and non-current portion $ 30,145 $ 30,145 $ — $ — Total assets at fair value $ 30,145 $ 30,145 $ — $ — Liabilities: Deferred compensation plan investments, current and non-current portion $ 30,145 $ 30,145 $ — $ — Forward foreign currency exchange contracts 45 — 45 — Foreign currency hedge 275 — 275 — Interest rate swap agreement 6,340 — 6,340 — Total liabilities at fair value $ 36,805 $ 30,145 $ 6,660 $ — The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at June 30, 2020: Total Quoted Significant Significant (in thousands) Assets: Deferred compensation plan investments, current and non-current portion $ 27,159 $ 27,159 $ — $ — Total assets at fair value $ 27,159 $ 27,159 $ — $ — Liabilities: Deferred compensation plan investments, current and non-current portion $ 27,159 $ 27,159 $ — $ — Forward foreign currency exchange contracts 26 — 26 — Interest rate swap agreement 9,433 — 9,433 — Liability for contingent consideration 46,334 — — 46,334 Total liabilities at fair value $ 82,952 $ 27,159 $ 9,459 $ 46,334 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 and active employees. These investments are recorded to prepaid expenses and other current assets or other non-current assets depending on their corresponding, anticipated distribution dates to recipients, which are reported in accrued expenses and other current liabilities or other long-term liabilities, respectively. Derivative instruments, such as foreign currency forward contracts, 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). Fair values of interest rate swaps are measured using standard valuation models with inputs that can be derived from observable market transactions, including LIBOR spot and forward rates (Level 2). Foreign currency contracts and interest rate swap agreements are classified in the Condensed Consolidated Balance Sheets as prepaid expenses and other non-current assets or accrued expenses and other long-term liabilities, depending on the respective instruments' favorable or unfavorable positions. See Note 9 - Derivatives and Hedging Activities . The Company recorded a contingent consideration liability at the acquisition date of Intelisys representing the amounts payable to former shareholders, as outlined under the terms of the 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. Intelisys is part of the Company's Worldwide Communications & Services segment. The table below provides a summary of the changes in fair value of the Company's contingent considerations for the Intelisys earnout, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the quarter and nine months ended March 31, 2021. The final earnout payment due to the former owners of Intelisys was paid in October 2020. Quarter ended March 31, 2021 Nine months ended March 31, 2021 Worldwide Communications & Services Segment (in thousands) Fair value at beginning of period $ — $ 46,334 Payments — (46,850) Change in fair value of contingent consideration — 516 Fair value at end of period $ — $ — The table below provides a summary of the changes in fair value of the Company’s contingent considerations (Level 3) for the Intelisys earnout for the quarter and nine months ended March 31, 2020. Quarter ended March 31, 2020 Nine months ended March 31, 2020 Worldwide Communications & Services Segment (in thousands) Fair value at beginning of period $ 45,043 $ 77,925 Payments — (38,531) Change in fair value of contingent consideration 617 6,266 Fair value at end of period $ 45,660 $ 45,660 The fair values of amounts owed are recorded in current portion of contingent consideration in the Company’s Condensed Consolidated Balance Sheets. In accordance with ASC 805, the Company will revalue the contingent consideration liability 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 liability associated with future earnout payments is based on several factors, including: • estimated future results, net of pro forma adjustments set forth in the 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 United States markets. A change in any of these unobservable inputs can significantly change the fair value of the contingent consideration. Valuation techniques and significant observable inputs used in recurring Level 3 fair value measurements for the Company's contingent consideration liability related to Intelisys at June 30, 2020 were as follows. The measurement period for the Intelisys earnout ended on June 30, 2020. Reporting Period Valuation Technique Significant Unobservable Inputs Weighted Average Rates (a) June 30, 2020 Discounted cash flow Weighted average cost of capital 3.0 % (a) Weighted average rates identified for this significant unobservable input relate to the valuation of the Intelisys contingent consideration. Since the earnout period for Intelisys closed on June 30, 2020, the weighted average cost of capital represents the cost of debt. There is no EBITDA growth or weighted average cost of capital to report in the current period. Intelisys The final contingent consideration payment related to Intelisys was paid during the quarter ended December 31, 2020. The expense from the change in fair value of the contingent consideration recognized in the Condensed Consolidated Income Statement totaled $0.5 million for the nine months ended March 31, 2021. The change in fair value for the current nine month period is due to the recurring amortization of the unrecognized fair value discount. The fair value of the liability for the contingent consideration related to Intelisys recognized at March 31, 2020 was $45.7 million, all of which was classified as current. The expense from the change in fair value of the contingent consideration recognized in the Condensed Consolidated Income Statement totaled $0.6 million and $6.3 million for the quarter and nine months ended March 31, 2020, respectively. The change in fair value for the prior-year quarter and nine month period is primarily driven by the recurring amortization of the unrecognized fair value discount and better than expected actual results. |
Segment Information
Segment Information | 9 Months Ended |
Mar. 31, 2021 | |
Segment Reporting, Measurement Disclosures [Abstract] | |
Segment Information | Segment Information The Company is a leading provider of technology solutions and services to customers in specialty technology markets. The Company has two reportable segments, based on product, customer and service type. Worldwide Barcode, Networking & Security Segment The Worldwide Barcode, Networking & Security segment includes a portfolio of solutions primarily for enterprise mobile computing, data capture, barcode printing, POS, payments, networking, electronic physical security, cyber security and other technologies. The Company has business operations within this segment in the United States, Canada and Brazil. The Company sees adjacencies among these technologies in helping its customers develop solutions. Data capture and POS solutions 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. Worldwide Communications & Services Segment The Worldwide Communications & Services segment includes a portfolio of solutions primarily for communications technologies and services and includes the Company's acquisition of intY. The Company has business operations within this segment in the United States, Canada, Brazil and the UK. These offerings include voice, video conferencing, wireless, data networking, cable, unified communications and collaboration, cloud and technology services. As these solutions come together on IP networks, new opportunities are created to move into adjacent solutions for all vertical markets, such as education, healthcare and government. Selected financial information for each business segment is presented below: Quarter ended Nine months ended March 31, March 31, 2021 2020 2021 2020 (in thousands) Sales: Worldwide Barcode, Networking & Security $ 502,227 $ 489,218 $ 1,577,197 $ 1,645,406 Worldwide Communications & Services 227,646 255,366 720,914 765,879 $ 729,873 $ 744,584 $ 2,298,111 $ 2,411,285 Depreciation and amortization: Worldwide Barcode, Networking & Security $ 3,772 $ 4,210 $ 11,852 $ 12,765 Worldwide Communications & Services 3,867 3,981 11,257 11,436 Corporate 719 795 2,308 2,384 $ 8,358 $ 8,986 $ 25,417 $ 26,585 Change in fair value of contingent consideration: Worldwide Communications & Services $ — $ 618 $ 516 $ 6,266 $ — $ 618 $ 516 $ 6,266 Operating income: Worldwide Barcode, Networking & Security $ 8,054 $ 4,779 $ 16,088 $ 29,153 Worldwide Communications & Services 12,214 6,394 33,555 22,009 Corporate (1) (832) (780) (11,442) (2,689) $ 19,436 $ 10,393 $ 38,201 $ 48,473 Capital expenditures: Worldwide Barcode, Networking & Security $ (532) $ (1,855) $ (1,173) $ (3,294) Worldwide Communications & Services (297) (1,988) (1,110) (3,281) $ (829) $ (3,843) $ (2,283) $ (6,575) Sales by Geography Category: United States and Canada $ 666,773 $ 677,798 $ 2,081,377 $ 2,200,644 International 64,153 74,409 228,784 237,770 Less intercompany sales (1,053) (7,623) (12,050) (27,129) $ 729,873 $ 744,584 $ 2,298,111 $ 2,411,285 (1) Includes restructuring costs of $0.6 million and $9.3 million for the quarter and nine months ended March 31, 2021. March 31, 2021 June 30, 2020 (in thousands) Assets: Worldwide Barcode, Networking & Security $ 786,123 $ 766,746 Worldwide Communications & Services 775,359 685,053 Corporate 21,140 59,064 Assets held for sale — 181,231 $ 1,582,622 $ 1,692,094 Property and equipment, net by Geography Category: United States and Canada $ 42,517 $ 53,083 International 2,799 2,558 $ 45,316 $ 55,641 |
Leases
Leases | 9 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases In accordance with ASC 842, at contract inception the Company determines if a contract contains a lease by assessing whether the contract contains an identified asset and whether the Company has the ability to control the asset. The Company also determines if the lease meets the classification criteria for an operating lease versus a finance lease under ASC 842. Substantially all of the Company's leases are operating leases for real estate, warehouse and office equipment ranging in duration from 1 year to 10 years. The Company has elected not to record short-term operating leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets. Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has finance leases for information technology equipment expiring in fiscal year 2022. Finance leases are recorded as property and equipment, net accrued expenses and other current liabilities other long-term liabilities Operating lease right-of-use assets and lease liabilities are recognized at the commencement date based on the net present value of future minimum lease payments over the lease term. The Company generally is not able to determine the rate implicit in its leases and has elected to apply an incremental borrowing rate as the discount rate for the present value determination, which is based on the Company's cost of borrowings for the relevant terms of each lease and geographical economic factors. Certain operating lease agreements contain options to extend or terminate the lease. The lease term used is adjusted for these options when the Company is reasonably certain it will exercise the option. Operating lease expense is recognized on a straight-line basis over the lease term. Variable lease payments not based on a rate or index, such as costs for common area maintenance, are expensed as incurred. Further, the Company has elected the practical expedient to recognize all lease and non-lease components as a single lease component, where applicable. The following table presents amounts recorded on the Condensed Consolidated Balance Sheet related to operating leases at March 31, 2021 and June 30, 2020: Operating leases Balance Sheet location March 31, 2021 June 30, 2020 (in thousands) Operating lease right-of-use assets Other non-current assets $ 20,265 $ 23,581 Current operating lease liabilities Accrued expenses and other current liabilities 4,283 4,476 Long-term operating lease liabilities Other long-term liabilities 17,598 20,760 The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters and nine months ended March 31, 2021 and 2020. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less. Quarter ended March 31, Nine months ended March 31, 2021 2020 2021 2020 (in thousands) (in thousands) Operating lease cost $ 1,277 $ 1,521 $ 3,964 $ 4,685 Variable lease cost 297 389 880 919 $ 1,574 $ 1,910 $ 4,844 $ 5,604 Supplemental cash flow information related to the Company's operating leases for the quarter and nine months ended March 31, 2021 and 2020 are presented in the table below: Nine months ended March 31, 2021 2020 (in thousands) Cash paid for amounts in the measurement of lease liabilities $ 4,116 $ 4,351 Right-of-use assets obtained in exchange for lease obligations — 1,672 The weighted-average remaining lease term and discount rate at March 31, 2021 are presented in the table below: March 31, 2021 Weighted-average remaining lease term 5.42 years Weighted-average discount rate 4.1 % The following table presents the maturities of the Company's operating lease liabilities at March 31, 2021: Operating leases (in thousands) Remainder of 2021 $ 1,329 2022 4,992 2023 4,658 2024 4,158 2025 3,256 Thereafter 5,990 Total future payments 24,383 Less: amounts representing interest 2,502 Present value of lease payments $ 21,881 |
Leases | Leases In accordance with ASC 842, at contract inception the Company determines if a contract contains a lease by assessing whether the contract contains an identified asset and whether the Company has the ability to control the asset. The Company also determines if the lease meets the classification criteria for an operating lease versus a finance lease under ASC 842. Substantially all of the Company's leases are operating leases for real estate, warehouse and office equipment ranging in duration from 1 year to 10 years. The Company has elected not to record short-term operating leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets. Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has finance leases for information technology equipment expiring in fiscal year 2022. Finance leases are recorded as property and equipment, net accrued expenses and other current liabilities other long-term liabilities Operating lease right-of-use assets and lease liabilities are recognized at the commencement date based on the net present value of future minimum lease payments over the lease term. The Company generally is not able to determine the rate implicit in its leases and has elected to apply an incremental borrowing rate as the discount rate for the present value determination, which is based on the Company's cost of borrowings for the relevant terms of each lease and geographical economic factors. Certain operating lease agreements contain options to extend or terminate the lease. The lease term used is adjusted for these options when the Company is reasonably certain it will exercise the option. Operating lease expense is recognized on a straight-line basis over the lease term. Variable lease payments not based on a rate or index, such as costs for common area maintenance, are expensed as incurred. Further, the Company has elected the practical expedient to recognize all lease and non-lease components as a single lease component, where applicable. The following table presents amounts recorded on the Condensed Consolidated Balance Sheet related to operating leases at March 31, 2021 and June 30, 2020: Operating leases Balance Sheet location March 31, 2021 June 30, 2020 (in thousands) Operating lease right-of-use assets Other non-current assets $ 20,265 $ 23,581 Current operating lease liabilities Accrued expenses and other current liabilities 4,283 4,476 Long-term operating lease liabilities Other long-term liabilities 17,598 20,760 The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters and nine months ended March 31, 2021 and 2020. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less. Quarter ended March 31, Nine months ended March 31, 2021 2020 2021 2020 (in thousands) (in thousands) Operating lease cost $ 1,277 $ 1,521 $ 3,964 $ 4,685 Variable lease cost 297 389 880 919 $ 1,574 $ 1,910 $ 4,844 $ 5,604 Supplemental cash flow information related to the Company's operating leases for the quarter and nine months ended March 31, 2021 and 2020 are presented in the table below: Nine months ended March 31, 2021 2020 (in thousands) Cash paid for amounts in the measurement of lease liabilities $ 4,116 $ 4,351 Right-of-use assets obtained in exchange for lease obligations — 1,672 The weighted-average remaining lease term and discount rate at March 31, 2021 are presented in the table below: March 31, 2021 Weighted-average remaining lease term 5.42 years Weighted-average discount rate 4.1 % The following table presents the maturities of the Company's operating lease liabilities at March 31, 2021: Operating leases (in thousands) Remainder of 2021 $ 1,329 2022 4,992 2023 4,658 2024 4,158 2025 3,256 Thereafter 5,990 Total future payments 24,383 Less: amounts representing interest 2,502 Present value of lease payments $ 21,881 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2021 | |
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. In early March 2020, the World Health Organization characterized COVID-19 as a pandemic. The rapid spread of COVID-19 since December 2019 has resulted in the implementation of numerous measures to contain the virus worldwide, such as travel bans and restrictions, quarantines, shelter-in-place orders and business shutdowns. The pandemic and these containment measures have had, and are expected to continue to have, a substantial impact on businesses around the world, including the Company’s business, and on global, regional and national economies. The Company is unable at this time to predict the ultimate impact that COVID-19 will have on its business due to the inability to predict the duration or magnitude of the virus' impact. During the Company's due diligence for the Network1 acquisition, several pre-acquisition contingencies were identified regarding various Brazilian federal and state tax exposures. The Company recorded indemnification receivables that are reported gross of the pre-acquisition contingency liabilities as the funds were escrowed as part of the acquisition. The amount available after the impact of foreign currency translation for future pre-acquisition contingency settlements or to be released to the sellers was $3.5 million and $4.8 million, at March 31, 2021 and June 30, 2020, respectively. The table below summarizes the balances and line item presentation of Network1's pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets at March 31, 2021 and June 30, 2020: March 31, 2021 June 30, 2020 Network1 (in thousands) Assets Prepaid expenses and other current assets $ 14 $ 14 Other non-current assets $ 3,510 $ 3,652 Liabilities Accrued expenses and other current liabilities $ 14 $ 14 Other long-term liabilities $ 3,510 $ 3,652 The decrease in pre-acquisition contingencies and corresponding indemnification receivables is due to a slight decrease in the foreign exchange rate of the Brazilian real against the US dollar. |
Restructuring
Restructuring | 9 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In July 2020, as part of a strategic review of organizational structure and operations, the Company announced a global cost reduction and restructuring program. These actions are designed to better align the cost structure for the wholesale distribution business with lower sales volumes as a result of the COVID-19 pandemic. The Company also initiated the closure of its Canpango business, its salesforce implementation and consulting business. There has been limited adoption by the Company's partner community of the services Canpango offers. These actions include entering into severance and termination agreements with employees, legal fees to execute the reduction in force and costs associated with lease terminations. The following table presents the restructuring and severance costs incurred for the quarter and nine months ended March 31, 2021: Quarter ended March 31, 2021 Nine months ended March 31, 2021 (in thousands) Severance and benefit costs $ 326 $ 8,825 Other 234 487 Total restructuring and other charges $ 560 $ 9,312 For the quarter and nine months ended March 31, 2021, all restructuring costs are recognized in the Corporate reporting unit and have not been allocated to the Worldwide Communications & Services or Worldwide Barcode, Networking & Security segment. The Company incurred restructuring charges in the prior year that were immaterial to the condensed consolidated financial statements and unrelated to the program described above. Accrued restructuring and severance costs are included in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. The following table represents activity for the nine months ended March 31, 2021: Accrued Expenses (in thousands) Balance at July 1, 2020 $ — Charged to expense 9,312 Cash payments (6,803) Balance at March 31, 2021 $ 2,509 The remaining balance as of March 31, 2021 of $2.5 million , primarily related to Corporate, is expected to be paid through the first quarter of fiscal year 2022. |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income taxes for the quarters and nine months ended March 31, 2021 and 2020 have been included in the accompanying condensed consolidated financial statements using an estimated annual effective tax rate. In addition to 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. During the current period, a discrete net tax benefit of $0.5 million was recorded, which is primarily attributable to exempt foreign income. The Company’s effective tax rate of 27.1% and 28.3% for the quarter and nine months ended March 31, 2021, respectively, differs from the current federal statutory rate of 21% primarily as a result of income derived from tax jurisdictions with varying income tax rates, nondeductible expenses and state income taxes. The Company's effective tax rate was 32.9% and 28.0% for the quarter and nine months ended March 31, 2020, respectively. The Company has provided for U.S. income taxes for the current earnings of its Canadian subsidiary and will continue to distribute the earnings of its Canadian subsidiary. Earnings from Brazil will continue to be considered retained indefinitely for reinvestment and all other foreign geographies are immaterial. It has been the practice of the Company to reinvest those earnings in the businesses outside the United States. As a result of the sale of the Latin American and European entities, the Company repatriated the proceeds to the United States with minimal tax consequences. The Tax Cuts and Jobs Act (TCJA), passed in December 2017, created a provision known as global intangible low-tax income ("GILTI") that imposes a tax on certain earnings of foreign subsidiaries. The GILTI tax became effective for the Company during fiscal year 2019 and an accounting policy election was made to treat the tax as a current period expense. The Company had approximately $1.2 million of total gross unrecognized tax benefits at March 31, 2021 and June 30, 2020. Of this total at March 31, 2021, approximately $1 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’s policy is to recognize interest and penalties related to income tax matters in income tax expense. At March 31, 2021 and June 30, 2020, the Company had approximately $1.2 million and $1.1 million, respectively, accrued for interest and penalties. The Company conducts business globally and 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 federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before June 30, 2015. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On August 20, 2019, the Company announced plans to divest the product distribution businesses in Europe, the UK, Mexico, Colombia, Chile, Peru and the Miami-based export operations ("Divestitures") as these businesses had been performing below management's expectations. The Company will continue to operate its digital business in these countries. Management determined that the Company did not have sufficient scale in these markets to maximize the value-added model for product distribution, leading the Company to focus and invest in its higher-growth, higher-margin businesses. Results from the Divestitures were included within each reportable segment, which includes the Worldwide Barcode, Networking & Security and Worldwide Communications & Services segments. During the quarter ended June 30, 2020, the Company recorded a pre-tax loss on sale classification of $88.9 million to reduce the carrying value of the Divestitures to its estimate of fair value (the net proceeds received at closing), less estimated costs to sell. As this loss was determined not to be attributable to any individual components in the Divestitures' net assets, it was reflected as a valuation allowance against the total assets of the Divestitures. During the quarter and nine months ended March 31, 2021, the Company recorded an additional pre-tax loss on disposal group of $0.7 million and $34.5 million, respectively. This loss includes the realization of cumulative translation adjustments of $0.0 million and $11.6 million for the quarter and nine months ended March 31, 2021, respectively. Additional losses during the quarter and nine months ended March 31, 2021 are primarily attributable to a reduction in the net proceeds received for the Divestitures. The Company signed an agreement on July 23, 2020 with Intcomex for its businesses located in Latin America, outside of Brazil. The Company finalized the sale of the Latin America businesses on October 30, 2020. Th e Company also finalized the sale of the Europe and UK business on November 12, 2020. Total cash received for the sale of divestitures was $34.4 million. Major components of net loss from discontinued operations for the quarters and nine months ended March 31, 2021 and 2020 were as follows: Quarter ended March 31, Nine months ended March 31, 2021 2020 2021 2020 (in thousands) (in thousands) Net sales $ — $ 127,899 $ 213,373 $ 439,527 Cost of goods sold — 117,669 198,512 400,158 Gross profit — 10,230 14,861 39,369 Selling, general and administrative expenses — 13,782 17,291 42,607 Depreciation expense — 225 — 771 Intangible amortization expense — 327 — 1,073 Operating loss — (4,104) (2,430) (5,082) Interest expense, net — 323 394 1,236 Loss on disposal group 688 — 34,496 — Other (income) expense, net — 433 310 (96) Loss from discontinued operations before taxes (688) (4,860) (37,630) (6,222) Income tax expense (benefit) — (858) 17 (1,197) Net loss from discontinued operations $ (688) $ (4,002) $ (37,647) $ (5,025) The major classes of assets and liabilities classified as held-for-sale in the accompanying consolidated balance sheets, were as follows as of March 31, 2021 and June 30, 2020: March 31, 2021 June 30, 2020 (in thousands) Assets Current assets: Cash and cash equivalents $ — $ 4,970 Accounts receivable, net — 117,200 Inventories, net — 106,779 Prepaid expenses and other current assets — 23,808 Total current assets — 252,757 Property and equipment, net — 1,833 Deferred income taxes — 9,349 Other non-current assets — 6,215 Total assets, before valuation allowance — 270,154 Less: valuation allowance — (88,923) Total assets, net of valuation allowance (1) $ — $ 181,231 Liabilities Current liabilities: Accounts payable $ — $ 56,098 Accrued expenses and other current liabilities — 14,815 Other taxes payable — 20,378 Short-term borrowings — 3,524 Income tax payable — 1,085 Total current liabilities — 95,900 Borrowings under revolving credit facility — 24,704 Other long-term liabilities — 7,418 Total liabilities (1) $ — $ 128,022 (1) Total assets and liabilities of discontinued operations are classified in current assets and liabilities, respectively, in the Company's consolidated balance sheet as of June 30, 2020. The discontinued operations were disposed of during the quarter ended December 31, 2020. Significant non-cash operating items and capital expenditures reflected in the cash flows from discontinued operations for the nine months ended March 31, 2021 and 2020 were as follows: Nine months ended March 31, 2021 2020 (in thousands) Loss on disposal group $ 34,496 $ — Depreciation and amortization — 1,844 Capital expenditures (58) (48) |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements of the Company have been prepared by the Company’s management in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position at March 31, 2021 and June 30, 2020, the results of operations for the quarters and nine months ended March 31, 2021 and 2020, the statements of comprehensive income for the quarters and nine months ended March 31, 2021 and 2020, the statements of shareholders' equity for the quarters and nine months ended March 31, 2021 and 2020 and the statements of cash flows for the nine months ended March 31, 2021 and 2020. The results of operations for the quarters and nine months ended March 31, 2021 and 2020 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, 2020. The Company has reclassified certain prior year amounts for the results of discontinued operations to conform to the current year presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only. |
Summary of Significant Accounting Policies | Except as described below, there have been no material changes to the Company’s significant accounting policies for the nine months ended March 31, 2021 from the policies described 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, 2020. 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, 2020. |
Restructuring Costs | The Company groups exit or disposal cost obligations into two categories: (i) severance and benefit costs and (ii) other. Employee separation costs are recognized upon communication of the restructuring plan to the identified employees. Other associated restructuring costs are expensed as incurred. |
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 zero-balance disbursement accounts at various financial institutions at which the Company does not maintain significant depository relationships. Due to the terms of the agreements governing these accounts, the Company generally does not have the right to offset 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. |
Long-lived Assets | The Company presents depreciation expense and intangible amortization expense on the Condensed Consolidated Income Statements. The Company's depreciation expense related to selling, general and administrative costs totaled $3.1 million and $9.6 million for the quarter and nine months ended March 31, 2021, respectively, and $3.3 million and $9.7 million for the quarter and nine months ended March 31, 2020, respectively. Depreciation expense reported as part of cost of goods sold on the Condensed Consolidated Income Statements totaled $0.3 million and $1.2 million for the quarter and nine months ended March 31, 2021, respectively, and $0.6 million and $1.8 million for the quarter and nine months ended March 31, 2020, respectively. The Company's intangible amortization expense reported on the Condensed Consolidated Income Statements relates to selling, general and administrative costs, not the cost of selling goods. |
Recent Accounting Pronouncements | In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (ASC Topic 326). In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326: Financial Instruments - Credit Losses, which provides supplemental guidance and clarification to ASU 2016-13 and must be adopted concurrently . The pronouncement revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. The Company adopted this standard effective July 1, 2020 and it did not have a material impact on the Company's consolidated financial statements. See Note 2 - Trade Accounts and Notes Receivable for disclosures related to the adoption of ASU 2016-13. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement (ASC Topic 820) Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement . The pronouncement eliminates, modifies and adds disclosure requirements for fair value measurements. The Company adopted this standard effective July 1, 2020 and it had no impact on its consolidated financial statements. The Company has reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on its consolidated financial statements as a result of future adoption. |
Trade Accounts and Notes Receivable, Net | The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from customers’ failure to make payments on accounts receivable due to the Company. The Company has notes receivable with certain customers, which are included in “Accounts receivable, less allowance” in the Condensed Consolidated Balance Sheets. Management determines the estimate of the allowance for doubtful accounts receivable by considering a number of factors, including: (i) historical experience, (ii) aging of the accounts receivable, (iii) specific information obtained by the Company on the financial condition and the current creditworthiness of its customers, (iv) the current economic and country-specific environment and (v) reasonable and supportable forecasts about collectability. Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model. Receivables that do not share risk characteristics are evaluated on an individual basis. Estimates of expected credit losses on trade receivables over the contractual life are recorded at inception. |
Revenue Recognition | The Company provides technology solutions and services from the world's leading suppliers of mobility and barcode, POS, payments, physical security, unified communications and collaboration, and telecom and cloud services. This includes hardware, related accessories and device configuration as well as software licenses, professional services and hardware support programs. In determining the appropriate amount of revenue to recognize, the Company applies the following five-step model: (i) identify contracts with customers; (ii) identify performance obligations in the contracts; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations per the contracts; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company recognizes revenue as control of products and services are transferred to customers, which is generally at the point of shipment. The Company delivers products to customers in several ways, including: (i) shipment from the Company's warehouse, (ii) drop-shipment directly from the supplier, or (iii) electronic delivery for non-physical products. Principal versus Agent Considerations The Company is the principal for sales of all hardware, certain software and services, including self-branded warranty programs. The Company considers itself the principal in these transactions as it has control of the product or service before it is transferred to the customer. When the Company provides self-branded warranty programs, it engages a third party, generally the original equipment manufacturer, to cover the fulfillment of any obligations arising from these contracts. These revenues and associated third-party costs are amortized over the life of the contract on a straight-line basis. The Company recognizes the previously described revenue and cost of goods sold on a gross basis. The Company is the agent for third-party service contracts, including product warranties and supplier-hosted software. These service contracts are sold separately from the products, and the Company often serves as the agent for the contract on behalf of the original equipment manufacturer. The Company's responsibility is to arrange for the provision of the specified service by the original equipment manufacturer, and the Company does not control the specified service before it is transferred to the customer. Because the Company acts as an agent, revenue is recognized net of cost at the time of sale. Related to the Company’s Intelisys business, the Company acts as a master agent connecting independent sales partners with service providers or suppliers who offer telecom and cloud services to end-customers. Intelisys’ sales partners earn commission payments from those service providers or suppliers on end-customer sales. Intelisys provides commission processing services to sales partners, earning a percentage of the commission stream. Because the Company acts as an agent, revenue is recognized on a net basis. Variable Considerations For certain transactions, products are sold with a right of return and may also provide other rebates or incentives, which are accounted for as variable consideration. The Company estimates returns allowance based on historical experience and reduces revenue accordingly. The Company estimates the amount of variable consideration for rebates and incentives by using the expected value or the most likely amount to be given to the customer and reduces the revenue by those estimated amounts. These estimates are reviewed and updated as necessary at the end of each reporting period. Contract Balances The Company records contract assets and liabilities for payments received from customers in advance of services performed. These assets and liabilities are the result of the sales of the Company's self-branded warranty programs and other transactions where control has not yet passed to the customer. These amounts are immaterial to the consolidated financial statements for the periods presented. |
Trade Accounts and Notes Rece_2
Trade Accounts and Notes Receivable, Net (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Schedule of Changes in the Allowance for Doubtful Accounts | The changes in the allowance for doubtful accounts for the nine months ended March 31, 2021 are set forth in the table below. June 30, 2020 Amounts Charged to Expense Write-offs Other (1) March 31, 2021 (in thousands) Trade accounts and current notes receivable allowance $ 21,906 $ 226 $ (1,603) $ 651 $ 21,180 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following tables represent the Company's disaggregation of revenue: Quarter ended March 31, 2021 (in thousands) Worldwide Barcode, Networking & Security Segment Worldwide Communications & Services Segment Total Revenue by product/service: Technology solutions $ 502,227 $ 211,369 $ 713,596 Intelisys — 16,277 16,277 $ 502,227 $ 227,646 $ 729,873 Nine months ended March 31, 2021 (in thousands) Worldwide Barcode, Networking & Security Segment Worldwide Communications & Services Segment Total Revenue by product/service: Technology solutions $ 1,577,197 $ 673,134 $ 2,250,331 Intelisys — 47,780 47,780 $ 1,577,197 $ 720,914 $ 2,298,111 Quarter ended March 31, 2020 (in thousands) Worldwide Barcode, Networking & Security Segment Worldwide Communications & Services Segment Total Revenue by product/service: Technology solutions $ 489,218 $ 240,819 $ 730,037 Intelisys — 14,547 14,547 $ 489,218 $ 255,366 $ 744,584 Nine months ended March 31, 2020 (in thousands) Worldwide Barcode, Networking & Security Segment Worldwide Communications & Services Segment Total Revenue by product/service: Technology solutions $ 1,645,406 $ 723,557 $ 2,368,963 Intelisys — 42,322 42,322 $ 1,645,406 $ 765,879 $ 2,411,285 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Quarter ended Nine months ended March 31, March 31, 2021 2020 2021 2020 (in thousands, except per share data) Numerator: Net income from continuing operations $ 13,786 $ 5,715 $ 24,732 $ 29,633 Net loss from discontinued operations (688) (4,002) (37,647) (5,025) Net (loss) income $ 13,098 $ 1,713 $ (12,915) $ 24,608 Denominator: Weighted-average shares, basic 25,455 25,346 25,404 25,386 Dilutive effect of share-based payments 117 17 80 58 Weighted-average shares, diluted 25,572 25,363 25,484 25,444 Net income from continuing operations per common share, basic $ 0.54 $ 0.23 $ 0.97 $ 1.17 Net loss from discontinued operations per common share, basic (0.03) (0.16) (1.48) (0.20) Net (loss) income per common share, basic $ 0.51 $ 0.07 $ (0.51) $ 0.97 Net income from continuing operations per common share, diluted $ 0.54 $ 0.23 $ 0.97 $ 1.16 Net loss from discontinued operations per common share, diluted (0.03) (0.16) (1.48) (0.20) Net (loss) income per common share, diluted $ 0.51 $ 0.07 $ (0.51) $ 0.97 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income, Net Of Tax | Accumulated other comprehensive loss consists of the following: March 31, 2021 June 30, 2020 (in thousands) Foreign currency translation adjustment $ (108,069) $ (125,974) Unrealized loss on hedged transaction, net of tax (4,612) (6,821) Accumulated other comprehensive loss $ (112,681) $ (132,795) |
Schedule of Other Comprehensive Loss, Tax | The tax effect of amounts in comprehensive (income) loss reflect a tax expense or (benefit) as follows: Quarter ended March 31, Nine months ended March 31, 2021 2020 2021 2020 (in thousands) Tax expense (benefit) $ 1,088 $ 617 $ 1,348 $ 921 |
Goodwill and Other Identifiab_2
Goodwill and Other Identifiable Intangible Assets (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the nine months ended March 31, 2021, by reporting segment, are set forth in the table below. Worldwide Barcode, Networking & Security Segment Worldwide Communications & Services Segment Total (in thousands) Balance at June 30, 2020 $ 16,370 $ 197,918 $ 214,288 Foreign currency translation adjustment — 2,805 2,805 Balance at March 31, 2021 $ 16,370 $ 200,723 $ 217,093 |
Schedule of Net Identifiable Intangible Assets | The following table shows changes in the amount recognized for net identifiable intangible assets for the nine months ended March 31, 2021. Net Identifiable Intangible Assets (in thousands) Balance at June 30, 2020 $ 121,547 Amortization expense (14,595) Foreign currency translation adjustment 2,220 Balance at March 31, 2021 $ 109,172 |
Short-Term Borrowings and Lon_2
Short-Term Borrowings and Long-Term Debt (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table presents the Company’s debt for continuing and discontinued operations at March 31, 2021 and June 30, 2020. March 31, 2021 June 30, 2020 (in thousands) Short-term borrowings (a) $ — $ 3,524 Current portion of long-term debt 7,843 7,839 Mississippi revenue bond, net of current portion 4,081 4,425 Senior secured term loan facility, net of current portion 133,125 138,750 Borrowings under revolving credit facility (b) 53,802 92,418 Total debt $ 198,851 $ 246,956 (a) Short-term borrowings are classified as held for sale in the Consolidated Balance sheets for the Company's discontinued operations at June 30, 2020. (b) Borrowings under the revolving credit facility classified as held for sale in the Consolidated Balance Sheets for the Company's discontinued operations totaled $24.7 million at June 30, 2020. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | |
Schedule of 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 included in the Condensed Consolidated Income Statements for the quarters and nine months ended March 31, 2021 and 2020 are as follows: Quarter ended Nine months ended March 31, March 31, 2021 2020 2021 2020 (in thousands) Net foreign exchange derivative contract (gains) losses $ (1,061) $ (3,264) $ 852 $ (3,749) Net foreign currency transactional and re-measurement losses (gains) 1,020 3,168 (74) 3,835 Net foreign currency exchange (gains) losses $ (41) $ (96) $ 778 $ 86 |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The components of the cash flow hedge included in the Condensed Consolidated Statement of Comprehensive Income for the quarters and nine months ended March 31, 2021 and 2020, are as follows: Quarter ended Nine months ended March 31, March 31, 2021 2020 2021 2020 (in thousands) Net interest expense recognized as a result of interest rate swap $ 557 $ 180 $ 1,682 $ 343 Unrealized gain (loss) in fair value of interest rate swap 1,549 (5,518) 1,281 (5,890) Net increase (decrease) in accumulated other comprehensive income 2,106 (5,338) 2,963 (5,547) Income tax effect 524 (1,292) 754 (1,330) Net increase (decrease) in accumulated other comprehensive income, net of tax $ 1,582 $ (4,046) $ 2,209 $ (4,217) |
Schedule of Derivative Instruments | The Company used the following derivative instruments at March 31, 2021 and June 30, 2020, reflected in its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above: March 31, 2021 June 30, 2020 Balance Sheet Location Fair Value of Fair Value of Fair Value of Fair Value of (in thousands) Derivative liabilities: Foreign exchange contracts Accrued expenses and other current liabilities $ — $ 45 $ — $ 26 Foreign currency hedge Accrued expenses and other current liabilities $ 275 $ — $ — $ — Interest rate swap agreement Other long-term liabilities $ 6,340 $ — $ 9,433 $ — |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at March 31, 2021: Total Quoted Significant Significant (in thousands) Assets: Deferred compensation plan investments, current and non-current portion $ 30,145 $ 30,145 $ — $ — Total assets at fair value $ 30,145 $ 30,145 $ — $ — Liabilities: Deferred compensation plan investments, current and non-current portion $ 30,145 $ 30,145 $ — $ — Forward foreign currency exchange contracts 45 — 45 — Foreign currency hedge 275 — 275 — Interest rate swap agreement 6,340 — 6,340 — Total liabilities at fair value $ 36,805 $ 30,145 $ 6,660 $ — The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at June 30, 2020: Total Quoted Significant Significant (in thousands) Assets: Deferred compensation plan investments, current and non-current portion $ 27,159 $ 27,159 $ — $ — Total assets at fair value $ 27,159 $ 27,159 $ — $ — Liabilities: Deferred compensation plan investments, current and non-current portion $ 27,159 $ 27,159 $ — $ — Forward foreign currency exchange contracts 26 — 26 — Interest rate swap agreement 9,433 — 9,433 — Liability for contingent consideration 46,334 — — 46,334 Total liabilities at fair value $ 82,952 $ 27,159 $ 9,459 $ 46,334 |
Schedule of Changes in Fair Value of Contingent Considerations | The table below provides a summary of the changes in fair value of the Company's contingent considerations for the Intelisys earnout, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the quarter and nine months ended March 31, 2021. The final earnout payment due to the former owners of Intelisys was paid in October 2020. Quarter ended March 31, 2021 Nine months ended March 31, 2021 Worldwide Communications & Services Segment (in thousands) Fair value at beginning of period $ — $ 46,334 Payments — (46,850) Change in fair value of contingent consideration — 516 Fair value at end of period $ — $ — The table below provides a summary of the changes in fair value of the Company’s contingent considerations (Level 3) for the Intelisys earnout for the quarter and nine months ended March 31, 2020. Quarter ended March 31, 2020 Nine months ended March 31, 2020 Worldwide Communications & Services Segment (in thousands) Fair value at beginning of period $ 45,043 $ 77,925 Payments — (38,531) Change in fair value of contingent consideration 617 6,266 Fair value at end of period $ 45,660 $ 45,660 Reporting Period Valuation Technique Significant Unobservable Inputs Weighted Average Rates (a) June 30, 2020 Discounted cash flow Weighted average cost of capital 3.0 % (a) Weighted average rates identified for this significant unobservable input relate to the valuation of the Intelisys contingent consideration. Since the earnout period for Intelisys closed on June 30, 2020, the weighted average cost of capital represents the cost of debt. There is no EBITDA growth or weighted average cost of capital to report in the current period. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Segment Reporting, Measurement Disclosures [Abstract] | |
Schedule of Financial Information by Segment | Selected financial information for each business segment is presented below: Quarter ended Nine months ended March 31, March 31, 2021 2020 2021 2020 (in thousands) Sales: Worldwide Barcode, Networking & Security $ 502,227 $ 489,218 $ 1,577,197 $ 1,645,406 Worldwide Communications & Services 227,646 255,366 720,914 765,879 $ 729,873 $ 744,584 $ 2,298,111 $ 2,411,285 Depreciation and amortization: Worldwide Barcode, Networking & Security $ 3,772 $ 4,210 $ 11,852 $ 12,765 Worldwide Communications & Services 3,867 3,981 11,257 11,436 Corporate 719 795 2,308 2,384 $ 8,358 $ 8,986 $ 25,417 $ 26,585 Change in fair value of contingent consideration: Worldwide Communications & Services $ — $ 618 $ 516 $ 6,266 $ — $ 618 $ 516 $ 6,266 Operating income: Worldwide Barcode, Networking & Security $ 8,054 $ 4,779 $ 16,088 $ 29,153 Worldwide Communications & Services 12,214 6,394 33,555 22,009 Corporate (1) (832) (780) (11,442) (2,689) $ 19,436 $ 10,393 $ 38,201 $ 48,473 Capital expenditures: Worldwide Barcode, Networking & Security $ (532) $ (1,855) $ (1,173) $ (3,294) Worldwide Communications & Services (297) (1,988) (1,110) (3,281) $ (829) $ (3,843) $ (2,283) $ (6,575) Sales by Geography Category: United States and Canada $ 666,773 $ 677,798 $ 2,081,377 $ 2,200,644 International 64,153 74,409 228,784 237,770 Less intercompany sales (1,053) (7,623) (12,050) (27,129) $ 729,873 $ 744,584 $ 2,298,111 $ 2,411,285 (1) Includes restructuring costs of $0.6 million and $9.3 million for the quarter and nine months ended March 31, 2021. |
Schedule of Reconciliation of Assets from Segment to Consolidated | March 31, 2021 June 30, 2020 (in thousands) Assets: Worldwide Barcode, Networking & Security $ 786,123 $ 766,746 Worldwide Communications & Services 775,359 685,053 Corporate 21,140 59,064 Assets held for sale — 181,231 $ 1,582,622 $ 1,692,094 Property and equipment, net by Geography Category: United States and Canada $ 42,517 $ 53,083 International 2,799 2,558 $ 45,316 $ 55,641 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Assets And Liabilities, Lessee | The following table presents amounts recorded on the Condensed Consolidated Balance Sheet related to operating leases at March 31, 2021 and June 30, 2020: Operating leases Balance Sheet location March 31, 2021 June 30, 2020 (in thousands) Operating lease right-of-use assets Other non-current assets $ 20,265 $ 23,581 Current operating lease liabilities Accrued expenses and other current liabilities 4,283 4,476 Long-term operating lease liabilities Other long-term liabilities 17,598 20,760 |
Lease, Cost | The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters and nine months ended March 31, 2021 and 2020. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less. Quarter ended March 31, Nine months ended March 31, 2021 2020 2021 2020 (in thousands) (in thousands) Operating lease cost $ 1,277 $ 1,521 $ 3,964 $ 4,685 Variable lease cost 297 389 880 919 $ 1,574 $ 1,910 $ 4,844 $ 5,604 Supplemental cash flow information related to the Company's operating leases for the quarter and nine months ended March 31, 2021 and 2020 are presented in the table below: Nine months ended March 31, 2021 2020 (in thousands) Cash paid for amounts in the measurement of lease liabilities $ 4,116 $ 4,351 Right-of-use assets obtained in exchange for lease obligations — 1,672 The weighted-average remaining lease term and discount rate at March 31, 2021 are presented in the table below: March 31, 2021 Weighted-average remaining lease term 5.42 years Weighted-average discount rate 4.1 % |
Lessee, Operating Lease, Liability, Maturity | The following table presents the maturities of the Company's operating lease liabilities at March 31, 2021: Operating leases (in thousands) Remainder of 2021 $ 1,329 2022 4,992 2023 4,658 2024 4,158 2025 3,256 Thereafter 5,990 Total future payments 24,383 Less: amounts representing interest 2,502 Present value of lease payments $ 21,881 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Pre-acquisition Contingencies and Corresponding Indemnification Receivables | The table below summarizes the balances and line item presentation of Network1's pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets at March 31, 2021 and June 30, 2020: March 31, 2021 June 30, 2020 Network1 (in thousands) Assets Prepaid expenses and other current assets $ 14 $ 14 Other non-current assets $ 3,510 $ 3,652 Liabilities Accrued expenses and other current liabilities $ 14 $ 14 Other long-term liabilities $ 3,510 $ 3,652 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Severance Costs | The following table presents the restructuring and severance costs incurred for the quarter and nine months ended March 31, 2021: Quarter ended March 31, 2021 Nine months ended March 31, 2021 (in thousands) Severance and benefit costs $ 326 $ 8,825 Other 234 487 Total restructuring and other charges $ 560 $ 9,312 |
Schedule of Restructuring Activity | The following table represents activity for the nine months ended March 31, 2021: Accrued Expenses (in thousands) Balance at July 1, 2020 $ — Charged to expense 9,312 Cash payments (6,803) Balance at March 31, 2021 $ 2,509 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Components of Discontinuing Operations | Major components of net loss from discontinued operations for the quarters and nine months ended March 31, 2021 and 2020 were as follows: Quarter ended March 31, Nine months ended March 31, 2021 2020 2021 2020 (in thousands) (in thousands) Net sales $ — $ 127,899 $ 213,373 $ 439,527 Cost of goods sold — 117,669 198,512 400,158 Gross profit — 10,230 14,861 39,369 Selling, general and administrative expenses — 13,782 17,291 42,607 Depreciation expense — 225 — 771 Intangible amortization expense — 327 — 1,073 Operating loss — (4,104) (2,430) (5,082) Interest expense, net — 323 394 1,236 Loss on disposal group 688 — 34,496 — Other (income) expense, net — 433 310 (96) Loss from discontinued operations before taxes (688) (4,860) (37,630) (6,222) Income tax expense (benefit) — (858) 17 (1,197) Net loss from discontinued operations $ (688) $ (4,002) $ (37,647) $ (5,025) The major classes of assets and liabilities classified as held-for-sale in the accompanying consolidated balance sheets, were as follows as of March 31, 2021 and June 30, 2020: March 31, 2021 June 30, 2020 (in thousands) Assets Current assets: Cash and cash equivalents $ — $ 4,970 Accounts receivable, net — 117,200 Inventories, net — 106,779 Prepaid expenses and other current assets — 23,808 Total current assets — 252,757 Property and equipment, net — 1,833 Deferred income taxes — 9,349 Other non-current assets — 6,215 Total assets, before valuation allowance — 270,154 Less: valuation allowance — (88,923) Total assets, net of valuation allowance (1) $ — $ 181,231 Liabilities Current liabilities: Accounts payable $ — $ 56,098 Accrued expenses and other current liabilities — 14,815 Other taxes payable — 20,378 Short-term borrowings — 3,524 Income tax payable — 1,085 Total current liabilities — 95,900 Borrowings under revolving credit facility — 24,704 Other long-term liabilities — 7,418 Total liabilities (1) $ — $ 128,022 (1) Total assets and liabilities of discontinued operations are classified in current assets and liabilities, respectively, in the Company's consolidated balance sheet as of June 30, 2020. The discontinued operations were disposed of during the quarter ended December 31, 2020. Significant non-cash operating items and capital expenditures reflected in the cash flows from discontinued operations for the nine months ended March 31, 2021 and 2020 were as follows: Nine months ended March 31, 2021 2020 (in thousands) Loss on disposal group $ 34,496 $ — Depreciation and amortization — 1,844 Capital expenditures (58) (48) |
Business and Summary of Signi_3
Business and Summary of Significant Accounting Policies (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($)segment | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($) | |
Cash and Cash Equivalents [Line Items] | |||||
Number of operating segments | segment | 2 | ||||
Depreciation expense related to selling, general and administrative costs | $ 3,141 | $ 3,268 | $ 9,634 | $ 9,729 | |
Amortization of intangible assets | 4,880 | 5,159 | 14,595 | 15,007 | |
Product | |||||
Cash and Cash Equivalents [Line Items] | |||||
Depreciation expense reported as part of cost of goods sold | 300 | $ 600 | 1,200 | $ 1,800 | |
Bank Overdrafts | |||||
Cash and Cash Equivalents [Line Items] | |||||
Outstanding checks | $ 17,000 | $ 17,000 | $ 17,100 |
Trade Accounts and Notes Rece_3
Trade Accounts and Notes Receivable, Net (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | $ 21,906 | |
Amounts Charged to Expense | 226 | $ 1,399 |
Write-offs | (1,603) | |
Other | 651 | |
Ending Balance | $ 21,180 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 729,873 | $ 744,584 | $ 2,298,111 | $ 2,411,285 |
Technology solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 713,596 | 730,037 | 2,250,331 | 2,368,963 |
Intelisys | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 16,277 | 14,547 | 47,780 | 42,322 |
Worldwide Barcode, Networking & Security Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 502,227 | 489,218 | 1,577,197 | 1,645,406 |
Worldwide Barcode, Networking & Security Segment | Technology solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 502,227 | 489,218 | 1,577,197 | 1,645,406 |
Worldwide Barcode, Networking & Security Segment | Intelisys | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Worldwide Communications & Services Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 227,646 | 255,366 | 720,914 | 765,879 |
Worldwide Communications & Services Segment | Technology solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 211,369 | 240,819 | 673,134 | 723,557 |
Worldwide Communications & Services Segment | Intelisys | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 16,277 | $ 14,547 | $ 47,780 | $ 42,322 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||||||||
Net income from continuing operations | $ 13,786 | $ 5,715 | $ 24,732 | $ 29,633 | ||||
Net loss from discontinued operations | (688) | (4,002) | (37,647) | (5,025) | ||||
Net income (loss) | $ 13,098 | $ (14,194) | $ (11,819) | $ 1,713 | $ 11,366 | $ 11,530 | $ (12,915) | $ 24,608 |
Denominator: | ||||||||
Weighted-average shares, basic (in shares) | 25,455,000 | 25,346,000 | 25,404,000 | 25,386,000 | ||||
Dilutive effect of share-based payments (in shares) | 117,000 | 17,000 | 80,000 | 58,000 | ||||
Weighted-average shares, diluted (in shares) | 25,572,000 | 25,363,000 | 25,484,000 | 25,444,000 | ||||
Net income from continuing operations per common share, basic (in dollars per share) | $ 0.54 | $ 0.23 | $ 0.97 | $ 1.17 | ||||
Net loss from discontinued operations per common share, basic (in dollars per share) | (0.03) | (0.16) | (1.48) | (0.20) | ||||
Net income (loss) per common share, basic (in dollars per share) | 0.51 | 0.07 | (0.51) | 0.97 | ||||
Net income from continuing operations per common share, diluted (in dollars per share) | 0.54 | 0.23 | 0.97 | 1.16 | ||||
Net loss from discontinued operations per common share, diluted (in dollars per share) | (0.03) | (0.16) | (1.48) | (0.20) | ||||
Net income (loss) per common share, diluted (in dollars per share) | $ 0.51 | $ 0.07 | $ (0.51) | $ 0.97 | ||||
Weighted average shares excluded from the computation of diluted earnings per share (in shares) | 1,532,961 | 1,036,740 | 1,285,153 | 980,803 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | |
Accumulated Other Comprehensive Loss [Line Items] | ||||||||||
Stockholders' equity attributable to parent | $ 690,575 | $ 897,678 | $ 690,575 | $ 897,678 | $ 682,139 | $ 671,227 | $ 678,246 | $ 927,580 | $ 905,751 | $ 914,129 |
Tax expense (benefit) | 1,088 | 617 | 1,348 | 921 | ||||||
Foreign currency translation adjustment | ||||||||||
Accumulated Other Comprehensive Loss [Line Items] | ||||||||||
Stockholders' equity attributable to parent | (108,069) | (108,069) | (125,974) | |||||||
Unrealized loss on hedged transaction, net of tax | ||||||||||
Accumulated Other Comprehensive Loss [Line Items] | ||||||||||
Stockholders' equity attributable to parent | (4,612) | (4,612) | (6,821) | |||||||
Accumulated other comprehensive loss | ||||||||||
Accumulated Other Comprehensive Loss [Line Items] | ||||||||||
Stockholders' equity attributable to parent | $ (112,681) | $ (129,174) | $ (112,681) | $ (129,174) | $ (105,048) | $ (129,175) | $ (132,795) | $ (96,340) | $ (105,798) | $ (90,088) |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) $ in Thousands | Jul. 01, 2019 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Business Acquisition [Line Items] | ||||
Consideration transferred, net of cash acquired | $ 0 | $ 48,915 | ||
intY | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred, net of cash acquired | $ 48,900 | |||
Business combination, acquisition related costs | $ 100 | $ 500 |
Goodwill and Other Identifiab_3
Goodwill and Other Identifiable Intangible Assets (Changes in the Carrying Amount of Goodwill) (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Balance at June 30, 2020 | $ 214,288 |
Foreign currency translation adjustment | 2,805 |
Balance at March 31, 2021 | 217,093 |
Worldwide Barcode, Networking & Security Segment | |
Goodwill [Roll Forward] | |
Balance at June 30, 2020 | 16,370 |
Foreign currency translation adjustment | 0 |
Balance at March 31, 2021 | 16,370 |
Worldwide Communications & Services Segment | |
Goodwill [Roll Forward] | |
Balance at June 30, 2020 | 197,918 |
Foreign currency translation adjustment | 2,805 |
Balance at March 31, 2021 | $ 200,723 |
Goodwill and Other Identifiab_4
Goodwill and Other Identifiable Intangible Assets (Net Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Finite-lived Intangible Assets [Roll Forward] | ||||
Balance at June 30, 2020 | $ 121,547 | |||
Amortization expense | $ (4,880) | $ (5,159) | (14,595) | $ (15,007) |
Foreign currency translation adjustment | 2,220 | |||
Balance at March 31, 2021 | $ 109,172 | $ 109,172 |
Short-Term Borrowings and Lon_3
Short-Term Borrowings and Long-Term Debt (Schedule of Debt) (Details) - USD ($) | Mar. 31, 2021 | Jun. 30, 2020 | Apr. 30, 2019 |
Debt Instrument [Line Items] | |||
Short-term borrowings | $ 0 | $ 3,524,000 | |
Current portion of long-term debt | 7,843,000 | 7,839,000 | |
Long-term debt | 137,206,000 | 143,175,000 | |
Borrowings under revolving credit facility | 53,802,000 | 67,714,000 | |
Total debt | 198,851,000 | 246,956,000 | |
Discontinued Operations, Held-for-sale | |||
Debt Instrument [Line Items] | |||
Borrowings under revolving credit facility | 0 | 24,704,000 | |
Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | 133,125,000 | 138,750,000 | $ 150,000,000 |
Multi-Currency Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Borrowings under revolving credit facility | 53,802,000 | 92,418,000 | |
Mississippi Revenue Bond | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 4,081,000 | $ 4,425,000 |
Short-Term Borrowings and Lon_4
Short-Term Borrowings and Long-Term Debt (Narrative) (Details) | Apr. 30, 2019USD ($) | Mar. 31, 2021USD ($)quarter | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($) |
Debt Instrument [Line Items] | ||||
Short-term borrowings | $ 0 | $ 3,524,000 | ||
Long-term debt | 137,206,000 | 143,175,000 | ||
Debt issuance costs, net | $ 1,300,000 | |||
Mississippi Revenue Bond | ||||
Debt Instrument [Line Items] | ||||
Percentage spread points on variable rate debt instrument | 0.85% | |||
Long-term debt | $ 4,081,000 | $ 4,425,000 | ||
Maximum time period of interest (in years) | 10 years | |||
Put option, exercisable period limitation | 180 days | |||
Debt instrument, anniversary, options exercisable, period | 5 years | |||
Percentage of principal due on exercise of put option | 100.00% | |||
Long-term debt, percentage bearing variable interest | 0.96% | 1.03% | ||
Overdraft Facility | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity under credit facility | $ 14,000,000 | |||
Debt instrument, term | 7 days | |||
Short-term borrowings | $ 0 | $ 3,500,000 | ||
Overdraft Facility | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Percentage spread points on variable rate debt instrument | 1.00% | |||
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity under credit facility | $ 350,000,000 | |||
Line of credit facility, expiration period | 5 years | |||
Line of credit facility, accordion feature, higher borrowing capacity option | $ 250,000,000 | |||
Debt issuance costs, gross | $ 1,100,000 | |||
Cash | $ 15,000,000 | |||
Debt instrument, covenant requirement, leverage ratio, EBITDA, number of quarters in measurement period | quarter | 4 | |||
Line of credit facility, unused capacity, commitment fee percentage | 0.20% | |||
Percentage of capital stock or other equity interest pledged per credit agreement (up to) | 65.00% | |||
Average daily balance on revolving credit facility | $ 62,100,000 | $ 252,400,000 | ||
Line of credit facility, remaining borrowing capacity | 296,200,000 | $ 257,300,000 | ||
Line of credit facility, available for additional borrowings | 172,600,000 | |||
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Discontinued Operations, Held-for-sale | ||||
Debt Instrument [Line Items] | ||||
Letters of credit outstanding | $ 0 | 300,000 | ||
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Minimum | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, unused capacity, commitment fee percentage | 0.15% | |||
Line of credit facility, interest coverage ratio | 3 | |||
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Maximum | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, unused capacity, commitment fee percentage | 0.30% | |||
Line of credit facility, leverage ratio | 3.50 | |||
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Percentage spread points on variable rate debt instrument | 1.25% | |||
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | ||||
Debt Instrument [Line Items] | ||||
Percentage spread points on variable rate debt instrument | 1.00% | |||
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | ||||
Debt Instrument [Line Items] | ||||
Percentage spread points on variable rate debt instrument | 1.75% | |||
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Alternate Base Rate Loans | ||||
Debt Instrument [Line Items] | ||||
Percentage spread points on variable rate debt instrument | 0.25% | |||
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Alternate Base Rate Loans | Minimum | ||||
Debt Instrument [Line Items] | ||||
Percentage spread points on variable rate debt instrument | 0.00% | |||
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Alternate Base Rate Loans | Maximum | ||||
Debt Instrument [Line Items] | ||||
Percentage spread points on variable rate debt instrument | 0.75% | |||
Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, expiration period | 5 years | |||
Long-term debt | $ 150,000,000 | $ 133,125,000 | $ 138,750,000 | |
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Letters of credit outstanding | $ 50,000,000 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Jun. 30, 2020 | Apr. 30, 2019 |
Foreign exchange contracts | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 25.5 | $ 16.6 | |
Interest Rate Swap | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 100 | ||
Interest Rate Swap, Maturing April 30, 2024 | |||
Derivative [Line Items] | |||
Derivative, notional amount | 50 | ||
Interest Rate Swap, Maturing April 30, 2026 | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 50 |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities (Derivative Contracts and Changes in Underlying Value of the Foreign Currency Exposures) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | ||||
Net foreign exchange derivative contract (gains) losses | $ (1,061) | $ (3,264) | $ 852 | $ (3,749) |
Net foreign currency transactional and re-measurement losses (gains) | 1,020 | 3,168 | (74) | 3,835 |
Net foreign currency exchange (gains) losses | $ (41) | $ (96) | $ 778 | $ 86 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities (Schedule of Cash Flow Hedge Included in Accumulated Other Comprehensive Income (Loss), Net of Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||
Net increase (decrease) in accumulated other comprehensive income, net of tax | $ 1,582 | $ 519 | $ 109 | $ (4,046) | $ 900 | $ (1,071) | $ 2,209 | $ (4,217) |
Interest Rate Swap | ||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||
Net interest expense recognized as a result of interest rate swap | 557 | 180 | 1,682 | 343 | ||||
Unrealized gain (loss) in fair value of interest rate swap | 1,549 | (5,518) | 1,281 | (5,890) | ||||
Net increase (decrease) in accumulated other comprehensive income | 2,106 | (5,338) | 2,963 | (5,547) | ||||
Income tax effect | 524 | (1,292) | 754 | (1,330) | ||||
Net increase (decrease) in accumulated other comprehensive income, net of tax | $ 1,582 | $ (4,046) | $ 2,209 | $ (4,217) |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities (Derivative Instruments) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Jun. 30, 2020 |
Foreign exchange contracts | Accrued expenses and other current liabilities | Fair Value of Derivatives Designated as Hedge Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 0 | $ 0 |
Foreign exchange contracts | Accrued expenses and other current liabilities | Fair Value of Derivatives Not Designated as Hedge Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 45 | 26 |
Foreign currency hedge | Accrued expenses and other current liabilities | Fair Value of Derivatives Designated as Hedge Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 275 | 0 |
Foreign currency hedge | Accrued expenses and other current liabilities | Fair Value of Derivatives Not Designated as Hedge Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 0 | 0 |
Interest rate swap agreement | Other long-term liabilities | Fair Value of Derivatives Designated as Hedge Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 6,340 | 9,433 |
Interest rate swap agreement | Other long-term liabilities | Fair Value of Derivatives Not Designated as Hedge Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 0 | $ 0 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Schedule of Remaining Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Jun. 30, 2020 |
Assets: | ||
Deferred compensation plan investments, current and non-current portion | $ 30,145 | $ 27,159 |
Total assets at fair value | 30,145 | 27,159 |
Liabilities: | ||
Deferred compensation plan investments, current and non-current portion | 30,145 | 27,159 |
Liability for contingent consideration | 46,334 | |
Total liabilities at fair value | 36,805 | 82,952 |
Quoted prices in active markets (Level 1) | ||
Assets: | ||
Deferred compensation plan investments, current and non-current portion | 30,145 | 27,159 |
Total assets at fair value | 30,145 | 27,159 |
Liabilities: | ||
Deferred compensation plan investments, current and non-current portion | 30,145 | 27,159 |
Liability for contingent consideration | 0 | |
Total liabilities at fair value | 30,145 | 27,159 |
Significant other observable inputs (Level 2) | ||
Assets: | ||
Deferred compensation plan investments, current and non-current portion | 0 | 0 |
Total assets at fair value | 0 | 0 |
Liabilities: | ||
Deferred compensation plan investments, current and non-current portion | 0 | 0 |
Liability for contingent consideration | 0 | |
Total liabilities at fair value | 6,660 | 9,459 |
Significant unobservable inputs (Level 3) | ||
Assets: | ||
Deferred compensation plan investments, current and non-current portion | 0 | 0 |
Total assets at fair value | 0 | 0 |
Liabilities: | ||
Deferred compensation plan investments, current and non-current portion | 0 | 0 |
Liability for contingent consideration | 46,334 | |
Total liabilities at fair value | 0 | 46,334 |
Foreign exchange contracts | ||
Liabilities: | ||
Derivative liability | 45 | 26 |
Foreign exchange contracts | Quoted prices in active markets (Level 1) | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Foreign exchange contracts | Significant other observable inputs (Level 2) | ||
Liabilities: | ||
Derivative liability | 45 | 26 |
Foreign exchange contracts | Significant unobservable inputs (Level 3) | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Foreign currency hedge | ||
Liabilities: | ||
Derivative liability | 275 | |
Foreign currency hedge | Quoted prices in active markets (Level 1) | ||
Liabilities: | ||
Derivative liability | 0 | |
Foreign currency hedge | Significant other observable inputs (Level 2) | ||
Liabilities: | ||
Derivative liability | 275 | |
Foreign currency hedge | Significant unobservable inputs (Level 3) | ||
Liabilities: | ||
Derivative liability | 0 | |
Interest rate swap agreement | ||
Liabilities: | ||
Derivative liability | 6,340 | 9,433 |
Interest rate swap agreement | Quoted prices in active markets (Level 1) | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Interest rate swap agreement | Significant other observable inputs (Level 2) | ||
Liabilities: | ||
Derivative liability | 6,340 | 9,433 |
Interest rate swap agreement | Significant unobservable inputs (Level 3) | ||
Liabilities: | ||
Derivative liability | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Schedule of Changes in Fair Value of Contingent Considerations) (Details) - Worldwide Communications & Services Segment - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair value at beginning of period | $ 0 | $ 45,043 | $ 46,334 | $ 77,925 |
Payments | 0 | 0 | (46,850) | (38,531) |
Change in fair value of contingent consideration | 0 | 617 | 516 | 6,266 |
Fair value at end of period | $ 0 | $ 45,660 | $ 0 | $ 45,660 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments (Schedule of Valuation Techniques and Significant Observable Inputs) (Details) | Jun. 30, 2020 |
Weighted average cost of capital | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration, liability, measurement input | 0.030 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments (Narrative) (Details) - Worldwide Communications & Services Segment - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Expense recognized due to change in fair value of contingent consideration | $ 0 | $ 617 | $ 516 | $ 6,266 | ||||
Fair value of liability for contingent consideration | $ 0 | 45,660 | 0 | 45,660 | $ 0 | $ 46,334 | $ 45,043 | $ 77,925 |
Intelisys | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Expense recognized due to change in fair value of contingent consideration | 600 | $ 500 | 6,300 | |||||
Fair value of liability for contingent consideration | $ 45,700 | $ 45,700 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 9 Months Ended |
Mar. 31, 2021segment | |
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 | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 729,873 | $ 744,584 | $ 2,298,111 | $ 2,411,285 |
Depreciation and amortization | 8,358 | 8,986 | 25,417 | 26,585 |
Change in fair value of contingent consideration | 0 | 618 | 516 | 6,266 |
Operating income | 19,436 | 10,393 | 38,201 | 48,473 |
Capital expenditures | (829) | (3,843) | (2,283) | (6,575) |
Restructuring and other charges | 560 | 169 | 9,312 | 604 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 719 | 795 | 2,308 | 2,384 |
Operating income | (832) | (780) | (11,442) | (2,689) |
Reportable Geographical Components | United States and Canada | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 666,773 | 677,798 | 2,081,377 | 2,200,644 |
Reportable Geographical Components | International | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 64,153 | 74,409 | 228,784 | 237,770 |
Geography Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Sales | (1,053) | (7,623) | (12,050) | (27,129) |
Worldwide Barcode, Networking & Security | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 502,227 | 489,218 | 1,577,197 | 1,645,406 |
Capital expenditures | (532) | (1,855) | (1,173) | (3,294) |
Worldwide Barcode, Networking & Security | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 3,772 | 4,210 | 11,852 | 12,765 |
Operating income | 8,054 | 4,779 | 16,088 | 29,153 |
Worldwide Communications & Services | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 227,646 | 255,366 | 720,914 | 765,879 |
Change in fair value of contingent consideration | 0 | 618 | 516 | 6,266 |
Capital expenditures | (297) | (1,988) | (1,110) | (3,281) |
Worldwide Communications & Services | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 3,867 | 3,981 | 11,257 | 11,436 |
Operating income | $ 12,214 | $ 6,394 | $ 33,555 | $ 22,009 |
Segment Information (Assets By
Segment Information (Assets By Segment) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Jun. 30, 2020 |
Segment Reporting Information [Line Items] | ||
Assets | $ 1,582,622 | $ 1,692,094 |
Property and equipment, net by Geography Category | 45,316 | 55,641 |
Discontinued Operations | ||
Segment Reporting Information [Line Items] | ||
Assets | 0 | 181,231 |
United States and Canada | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net by Geography Category | 42,517 | 53,083 |
International | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net by Geography Category | 2,799 | 2,558 |
Corporate | Continuing Operations | ||
Segment Reporting Information [Line Items] | ||
Assets | 21,140 | 59,064 |
Worldwide Barcode, Networking & Security | Operating Segments | Continuing Operations | ||
Segment Reporting Information [Line Items] | ||
Assets | 786,123 | 766,746 |
Worldwide Communications & Services | Operating Segments | Continuing Operations | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 775,359 | $ 685,053 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Mar. 31, 2021 |
Lessee, Lease, Description [Line Items] | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property and equipment, net |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Jun. 30, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 20,265 | $ 23,581 |
Current operating lease liabilities | 4,283 | 4,476 |
Long-term operating lease liabilities | $ 17,598 | $ 20,760 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other non-current assets | Other non-current assets |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 1,277 | $ 1,521 | $ 3,964 | $ 4,685 |
Variable lease cost | 297 | 389 | 880 | 919 |
Total cost | $ 1,574 | $ 1,910 | $ 4,844 | $ 5,604 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Cash paid for amounts in the measurement of lease liabilities | $ 4,116 | $ 4,351 |
Right-of-use assets obtained in exchange for lease obligations | $ 0 | $ 1,672 |
Leases - Weighted Average Remai
Leases - Weighted Average Remaining Term and Discount Rate (Details) | Mar. 31, 2021 |
Leases [Abstract] | |
Weighted-average remaining lease term | 5 years 5 months 1 day |
Weighted-average discount rate | 4.10% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Leases [Abstract] | |
Remainder of 2021 | $ 1,329 |
2022 | 4,992 |
2023 | 4,658 |
2024 | 4,158 |
2025 | 3,256 |
Thereafter | 5,990 |
Total future payments | 24,383 |
Less: amounts representing interest | 2,502 |
Present value of lease payments | $ 21,881 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Jun. 30, 2020 |
Network1 | ||
Other Commitments [Line Items] | ||
Cash held in escrow | $ 3.5 | $ 4.8 |
Commitments and Contingencies_3
Commitments and Contingencies (Summary of Pre-Acquisition Contingencies) (Details) - Network1 - USD ($) $ in Thousands | Mar. 31, 2021 | Jun. 30, 2020 |
Assets | ||
Prepaid expenses and other current assets | $ 14 | $ 14 |
Other non-current assets | 3,510 | 3,652 |
Liabilities | ||
Accrued expenses and other current liabilities | 14 | 14 |
Other long-term liabilities | $ 3,510 | $ 3,652 |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring and Severance Costs, By Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Charged to expense | $ 560 | $ 169 | $ 9,312 | $ 604 |
Severance and benefit costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charged to expense | 326 | 8,825 | ||
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charged to expense | $ 234 | $ 487 |
Restructuring - Restructuring A
Restructuring - Restructuring Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||||
Balance, beginning of year | $ 0 | |||
Charged to expense | $ 560 | $ 169 | 9,312 | $ 604 |
Cash payments | (6,803) | |||
Ending Balance | 2,509 | 2,509 | ||
Restructuring reserve | $ 2,509 | $ 2,509 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense (benefit), measurement period | $ (0.5) | ||||
Effective income tax rate | 27.10% | 32.90% | 28.30% | 28.00% | |
Gross unrecognized tax benefits | $ 1.2 | $ 1.2 | $ 1.2 | ||
Unrecognized tax benefits that would impact effective tax rate if recognized | 1 | 1 | |||
Income tax penalties and interest accrued | $ 1.2 | $ 1.2 | $ 1.1 |
Discontinued Operations (Narrat
Discontinued Operations (Narrative) (Details) - Discontinued Operations, Held-for-sale - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on disposal group | $ 688 | $ 88,900 | $ 0 | $ 34,496 | $ 0 |
Cumulative translation adjustments | 0 | 11,600 | |||
Cash received sale of divestitures | $ 34,400 | $ 34,400 |
Discontinued Operations (Compon
Discontinued Operations (Component of Net Loss Discontinued Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net loss from discontinued operations | $ (688) | $ (4,002) | $ (37,647) | $ (5,025) | |
Discontinued Operations, Held-for-sale | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net sales | 0 | 127,899 | 213,373 | 439,527 | |
Cost of goods sold | 0 | 117,669 | 198,512 | 400,158 | |
Gross profit | 0 | 10,230 | 14,861 | 39,369 | |
Selling, general and administrative expenses | 0 | 13,782 | 17,291 | 42,607 | |
Depreciation expense | 0 | 225 | 0 | 771 | |
Intangible amortization expense | 0 | 327 | 0 | 1,073 | |
Operating loss | 0 | (4,104) | (2,430) | (5,082) | |
Interest expense, net | 0 | 323 | 394 | 1,236 | |
Loss on disposal group | 688 | $ 88,900 | 0 | 34,496 | 0 |
Other (income) expense, net | 0 | 433 | 310 | (96) | |
Loss from discontinued operations before taxes | (688) | (4,860) | (37,630) | (6,222) | |
Income tax expense (benefit) | 0 | (858) | 17 | (1,197) | |
Net loss from discontinued operations | $ (688) | $ (4,002) | $ (37,647) | $ (5,025) |
Discontinued Operations (Classe
Discontinued Operations (Classes of Assets and Liabilities Held-for-sale) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Jun. 30, 2020 |
Current assets: | ||
Total current assets | $ 0 | $ 181,231 |
Current liabilities: | ||
Total current liabilities | 0 | 128,022 |
Discontinued Operations, Held-for-sale | ||
Current assets: | ||
Cash and cash equivalents | 0 | 4,970 |
Accounts receivable, net | 0 | 117,200 |
Inventories, net | 0 | 106,779 |
Prepaid expenses and other current assets | 0 | 23,808 |
Total current assets | 0 | 252,757 |
Property and equipment, net | 0 | 1,833 |
Deferred income taxes | 0 | 9,349 |
Other non-current assets | 0 | 6,215 |
Total assets, before valuation allowance | 0 | 270,154 |
Less: valuation allowance | 0 | (88,923) |
Total assets, net of valuation allowance | 0 | 181,231 |
Current liabilities: | ||
Accounts payable | 0 | 56,098 |
Accrued expenses and other current liabilities | 0 | 14,815 |
Other taxes payable | 0 | 20,378 |
Short-term borrowings | 0 | 3,524 |
Income tax payable | 0 | 1,085 |
Total current liabilities | 0 | 95,900 |
Borrowings under revolving credit facility | 0 | 24,704 |
Other long-term liabilities | 0 | 7,418 |
Total liabilities | $ 0 | $ 128,022 |
Discontinued Operations (Signif
Discontinued Operations (Significant Non-cash Operating Items) (Details) - Discontinued Operations, Held-for-sale - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on disposal group | $ 688 | $ 88,900 | $ 0 | $ 34,496 | $ 0 |
Depreciation and amortization | 0 | 1,844 | |||
Capital expenditures | $ (58) | $ (48) |