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 RECORD FOURTH QUARTER
AND YEAR END RESULTS
*Sales increase 14% to $381.2 million
GREENVILLE, SC—August 18, 2005—ScanSource, Inc. (Nasdaq:SCSC), a leading international distributor of AIDC (automatic identification and data capture), point of sale, communications and electronic security products for the reseller market, today announced financial results for its fourth quarter and fiscal year ended June 30, 2005.
For the quarter ended June 30, 2005, net sales increased 14% to $381.2 million compared to $333.1 million for the quarter ended June 30, 2004. Quarterly operating income increased 2% to $15.9 million from $15.6 million for the comparable quarter in 2004. Net income increased 4% to $9.4 million for the quarter ended June 30, 2005 versus $9.0 million for the quarter ended June 30, 2004. Diluted earnings per share increased 6% to $0.73 per share, compared to $0.69 in the prior year quarter.
“We are very pleased with our sales results, led by a record quarter for our international segment,” said Mike Baur, President and CEO of ScanSource. “Steady communications and AIDC sales across all product categories helped the North America unit offset weaker market conditions in retail, including point-of-sale.”
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ScanSource Reports Record Fourth Quarter and Year–end Results
For the fiscal year ended June 30, 2005, net sales increased 23% to $1.469 billion compared to $1.192 billion for the year ended June 30, 2004. Fiscal year operating income increased 19% to $58.7 million from $49.3 million for the comparable period in 2004. Net income increased 19% to $35.7 million for the year ended June 30, 2005 versus $30.0 million for the year ended June 30, 2004. Diluted earnings per share increased 19% to $2.75 per share, compared to $2.31 in the prior year.
Adoption of Stock Option Expensing Standard
The Company will begin expensing stock options in the first quarter of fiscal 2006, in accordance with Statement of Financial Accounting Standards No. 123(R),Share-Based Payment.The Company estimates that this will result in additional expense of approximately $.03 per share for the first quarter of fiscal 2006.
Forecast for Next Quarter
The Company announced its financial forecast for the first quarter of fiscal 2006. ScanSource expects net revenues for the September 2005 quarter could range from $360 million to $385 million.
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ScanSource Reports Record Fourth Quarter and Year–end Results
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.
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; communications products from Intel and NEC through its Paracon sales unit; and electronic security products through its ScanSource Security Distribution 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 100 technology manufacturers to over 16,000 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 Record Fourth Quarter and Year–end Results
SCANSOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
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| | | June 30, 2005 (unaudited)
| | June 30, 2004 *
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| Assets | | | | | | |
Current Assets | | | | | | |
Cash and cash equivalents | | $ | 8,609 | | $ | 1,047 |
Trade & notes receivable, net | | | 215,190 | | | 175,417 |
Other receivables | | | 5,479 | | | 3,919 |
Inventories | | | 178,917 | | | 182,868 |
Prepaid expenses and other assets | | | 3,546 | | | 1,670 |
Deferred income taxes | | | 10,227 | | | 8,440 |
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Total current assets | | | 421,968 | | | 373,361 |
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Property and equipment, net | | | 23,299 | | | 23,663 |
Goodwill | | | 12,915 | | | 9,978 |
Other assets, including identifiable intangible assets | | | 8,888 | | | 6,190 |
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Total assets | | $ | 467,070 | | $ | 413,192 |
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| Liabilities and Shareholders’ Equity | | | | | | |
Current Liabilities | | | | | | |
Current portion of long-term debt | | $ | 564 | | $ | 854 |
Short-term borrowings | | | 4,478 | | | — |
Trade accounts payable | | | 173,255 | | | 167,053 |
Accrued expenses and other liabilities | | | 22,133 | | | 17,358 |
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Total current liabilities | | | 200,430 | | | 185,265 |
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Deferred income taxes | | | 1,008 | | | 1,058 |
Long-term debt | | | 6,045 | | | 6,584 |
Borrowings under revolving credit facility | | | 31,269 | | | 32,569 |
Other long-term liabilities | | | 1,341 | | | — |
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Total liabilities | | | 240,093 | | | 225,476 |
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Minority interest | | | 1,092 | | | 1,072 |
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Shareholders’ Equity | | | | | | |
Common stock | | | 65,381 | | | 61,856 |
Retained earnings | | | 157,020 | | | 121,288 |
Accumulated other comprehensive income | | | 3,484 | | | 3,500 |
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Total shareholders’ equity | | | 225,885 | | | 186,644 |
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Total liabilities and shareholders’ equity | | $ | 467,070 | | $ | 413,192 |
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| * | Derived from audited financial statements at June 30, 2004. |
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ScanSource Reports Record Fourth Quarter and Year–end Results
SCANSOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
(In thousands, except per share data)
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| | | Quarter ended June 30,
| | | Year ended June 30,
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| | | 2005
| | | 2004
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| | | 2004
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Net sales | | $ | 381,195 | | | $ | 333,076 | | | $ | 1,469,094 | | | $ | 1,192,090 | |
Cost of goods sold | | | 341,787 | | | | 296,014 | | | | 1,319,368 | | | | 1,060,310 | |
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Gross profit | | | 39,408 | | | | 37,062 | | | | 149,726 | | | | 131,780 | |
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Selling, general & administrative expenses | | | 23,462 | | | | 21,492 | | | | 90,977 | | | | 82,524 | |
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Operating income | | | 15,946 | | | | 15,570 | | | | 58,749 | | | | 49,256 | |
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Other expense (income): | | | | | | | | | | | | | | | | |
Interest expense | | | 683 | | | | 303 | | | | 2,127 | | | | 1,159 | |
Interest income | | | (173 | ) | | | (171 | ) | | | (863 | ) | | | (558 | ) |
Other expense (income) | | | (14 | ) | | | 127 | | | | (466 | ) | | | (164 | ) |
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Other expense (income), net | | | 496 | | | | 259 | | | | 798 | | | | 437 | |
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Income before income taxes and minority interest | | | 15,450 | | | | 15,311 | | | | 57,951 | | | | 48,819 | |
Provision for income taxes | | | 5,956 | | | | 6,264 | | | | 21,928 | | | | 18,700 | |
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Income before minority interest | | | 9,494 | | | | 9,047 | | | | 36,023 | | | | 30,119 | |
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Minority interest in income of consolidated subsidiaries, net of income taxes | | | 100 | | | | 33 | | | | 291 | | | | 137 | |
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Net income | | $ | 9,394 | | | $ | 9,014 | | | $ | 35,732 | | | $ | 29,982 | |
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Per share data: | | | | | | | | | | | | | | | | |
Net income per common share, basic | | $ | 0.74 | | | $ | 0.72 | | | $ | 2.83 | | | $ | 2.40 | |
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Weighted-average shares outstanding, basic | | | 12,664 | | | | 12,561 | | | | 12,627 | | | | 12,485 | |
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Net income per common share, assuming dilution | | $ | 0.73 | | | $ | 0.69 | | | $ | 2.75 | | | $ | 2.31 | |
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Weighted-average shares outstanding, assuming dilution | | | 12,943 | | | | 12,997 | | | | 13,009 | | | | 12,952 | |
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