Exhibit 99.1
FOR IMMEDIATE RELEASE
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| Contact: | | Jeffery A. Bryson VP of Investor Relations ScanSource, Inc. 864 286-4305 |
SCANSOURCE REPORTS FIRST QUARTER RESULTS
*Sales increase 31% to a record $362.7 million
GREENVILLE, SC—October 28, 2004—ScanSource, Inc. (Nasdaq:SCSC), a leading international distributor of AIDC (automatic identification and data capture), POS (point of sale) and communications products for the reseller market, today announced financial results for its quarter ended September 30, 2004.
For the quarter ended September 30, 2004, net sales increased 31% to $362.7 million compared to $276.5 million for the quarter ended September 30, 2003. Quarterly operating income increased 51% to $14.7 million from $9.7 million for the comparable quarter in 2003. Net income increased 47% to $8.9 million for the quarter ended September 30, 2004 versus $6.1 million for the quarter ended September 30, 2003. Diluted earnings per share increased 42% to $0.68 per share, compared to $0.48 in the prior year quarter.
“Sales this quarter again exceeded our expectations, and were led by record sales of our communications products vendors: Avaya, Intel and NEC,” said Mike Baur, President and CEO of ScanSource. “We were pleasantly surprised at the continued strength of AIDC/ POS sales coming off record sales results in the June quarter.”
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ScanSource Reports First Quarter Results
Forecast for Next Quarter
The Company announced its financial forecast for the second quarter of fiscal 2005. ScanSource expects net revenues for the December 2004 quarter could range from $340 million to $360 million.
Safe Harbor Statement
This news release contains comments that are “forward looking” statements that involve risks and uncertainties; these statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Any number of important factors could cause actual results to differ materially from anticipated results. For more information concerning factors that could cause such a difference, see the Company’s annual report on Form 10K filed with the Securities and Exchange Commission.
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ScanSource Reports First Quarter Results
About ScanSource
ScanSource, Inc. is a leading international distributor of specialty technology products, including automatic identification and data capture (AIDC) and point-of-sale (POS) products through its ScanSource sales unit; Avaya voice, data and converged communications products through its Catalyst Telecom sales unit; and communications products from Intel and NEC through its Paracon sales unit.
The Company serves the North America marketplace and has an international segment which sells AIDC and POS products in Latin America and Europe. Founded in 1992, the Company markets products from more than 80 technology manufacturers to over 15,000 value-added technology resellers and is committed to empowering them with tools and services designed to help them grow. For more information, call the toll-free sales telephone number at 800.944.2432 or visit www.scansource.com.
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ScanSource Reports First Quarter Results
SCANSOURCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
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| | | September 30,
2004
(unaudited)
| | June 30,
2004 *
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Assets | | | | | | |
Current Assets | | | | | | |
Cash | | $ | 2,438 | | $ | 1,047 |
Trade & notes receivable, net | | | 191,420 | | | 175,417 |
Other receivables | | | 3,118 | | | 3,919 |
Inventories | | | 188,398 | | | 182,868 |
Prepaid expenses and other assets | | | 1,755 | | | 1,670 |
Deferred income taxes | | | 8,577 | | | 8,440 |
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Total current assets | | | 395,706 | | | 373,361 |
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Property and equipment, net | | | 22,756 | | | 23,663 |
Goodwill | | | 10,258 | | | 9,978 |
Other assets, including identifiable intangible assets | | | 6,503 | | | 6,190 |
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Total assets | | $ | 435,223 | | $ | 413,192 |
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Liabilities and Shareholders’ Equity | | | | | | |
Current Liabilities | | | | | | |
Current portion of long-term debt | | $ | 5,556 | | $ | 854 |
Trade accounts payable | | | 181,741 | | | 167,053 |
Accrued expenses and other liabilities | | | 13,215 | | | 17,358 |
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Total current liabilities | | | 200,512 | | | 185,265 |
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Deferred income taxes | | | 1,725 | | | 1,058 |
Long-term debt | | | 1,673 | | | 6,584 |
Borrowings under revolving credit facility | | | 32,806 | | | 32,569 |
Other long-term liabilities | | | 90 | | | — |
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Total liabilities | | | 236,806 | | | 225,476 |
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Minority interest | | | 831 | | | 1,072 |
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Shareholders’ Equity | | | | | | |
Common stock | | | 63,888 | | | 61,856 |
Retained earnings | | | 130,202 | | | 121,288 |
Accumulated other comprehensive income | | | 3,496 | | | 3,500 |
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Total shareholders’ equity | | | 197,586 | | | 186,644 |
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Total liabilities and shareholders’ equity | | $ | 435,223 | | $ | 413,192 |
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* Derived from audited financial statements at June 30, 2004.
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ScanSource Reports First Quarter Results
SCANSOURCE, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
(In thousands, except per share data)
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| | | Quarter ended
September 30,
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| | | 2004
| | | 2003
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Net sales | | $ | 362,709 | | | $ | 276,474 | |
Cost of goods sold | | | 325,727 | | | | 245,630 | |
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Gross profit | | | 36,982 | | | | 30,844 | |
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Selling, general and admin. expenses | | | 22,312 | | | | 21,159 | |
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Operating income | | | 14,670 | | | | 9,685 | |
Other expense (income): | | | | | | | | |
Interest expense | | | 413 | | | | 343 | |
Interest income | | | (216 | ) | | | (161 | ) |
Other expense (income) | | | 47 | | | | (166 | ) |
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Other expense, net | | | 244 | | | | 16 | |
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Income before income taxes and minority interest | | | 14,426 | | | | 9,669 | |
Provision for income taxes | | | 5,482 | | | | 3,589 | |
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Income before minority interest | | | 8,944 | | | | 6,080 | |
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Minority interest in income of consolidated subsidiaries, net of income taxes | | | 30 | | | | — | |
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Net income | | $ | 8,914 | | | $ | 6,080 | |
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Per share data: | | | | | | | | |
Net income per common share, basic | | $ | 0.71 | | | $ | 0.50 | |
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Weighted-average shares outstanding, basic | | | 12,580 | | | | 12,265 | |
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Net income per common share, assuming dilution | | $ | 0.68 | | | $ | 0.48 | |
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Weighted-average shares outstanding, assuming dilution | | | 13,053 | | | | 12,681 | |
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