8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 10, 2016

ScanSource, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number: 000-26926

SC	00-26926	57-0965380
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6 Logue Court, Greenville, SC 29615

(Address of principal executive offices, including zip code)

864-288-2432

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On May 10, 2016 ScanSource, Inc. issued a press release announcing its financial results for its third quarter for the period ended March 31, 2016. A copy of the press release and accompanying presentation slides are attached as Exhibit 99.1 and 99.2 hereto and incorporated herein by reference and also made available through the Company’s website at www.scansource.com.

The information in this Item 2.02 Current Report on Form 8-K, including the exhibits, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

99.1 – Press release issued by ScanSource, Inc. on May 10, 2016. The information contained in the attached exhibit is unaudited and should be read in conjunction with the Registrant’s annual and quarterly reports filed with the Securities and Exchange Commission.

99.2 – Presentation slides for the financial results conference call issued on May 10, 2016.  The information contained in the attached exhibit is unaudited and should be read in conjunction with the Registrant’s annual and quarterly reports filed with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		ScanSource, Inc.
Date:	May 10, 2016	By:	/s/ Charles A. Mathis
		Name:	Charles A. Mathis
		Its:	Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:
Charles A. Mathis		Mary M. Gentry
Executive Vice President and Chief Financial Officer	- or -	Vice President, Treasurer and Investor Relations
ScanSource, Inc.		ScanSource, Inc.
(864) 286-4975		(864) 286-4892

SCANSOURCE REPORTS THIRD QUARTER RESULTS

Net Sales Growth of 5% and EPS Growth of 20%

GREENVILLE, SC -- May 10, 2016 -- ScanSource, Inc. (NASDAQ:SCSC), a leading global provider of technology products and solutions, today announced financial results for fiscal year 2016 third quarter ended March 31, 2016.

	Quarter ended March 31,
	2016		2015		Change
	(in millions, except per share data)
Net sales	$	798.4	$	763.2	5	%
Operating income	21.6		21.5		1	%
Non-GAAP operating income(1)	25.3		24.2		5	%
GAAP net income	14.0		12.9		8	%
Non-GAAP net income(1)	16.5		14.9		11	%
GAAP diluted EPS	$	0.54	$	0.45	20	%
Non-GAAP diluted EPS(1)	$	0.64	$	0.52	23	%
(1) A reconciliation of non-GAAP financial information to GAAP financial information is presented in the following Supplementary Information (Unaudited) tables.

“Although sales fell below our expected range primarily from a lower volume of big deals, we are pleased to deliver EPS growth of 20%,” said Mike Baur, CEO, ScanSource, Inc.  “Our 10.6% gross margin reflects the value-added services we provide to our customers and vendors.”

Net sales for the quarter ended March 31, 2016 increased 5% year-over-year to $798.4 million. The increase in net sales includes the acquisition of KBZ in September 2015. Net sales in constant currency excluding acquisitions decreased 1% year-over-year.

Operating income for the quarter ended March 31, 2016 totaled $21.6 million. Non-GAAP operating income of $25.3 million increased 5% year-over-year from $24.2 million.

On a GAAP basis, net income for the quarter ended March 31, 2016 totaled $14.0 million, or $0.54 per diluted share, compared with net income of $12.9 million, or $0.45 per diluted share, for the prior year quarter. Non-GAAP net income for the quarter ended March 31, 2016 of $16.5 million increased 11%, and non-GAAP diluted earnings per share of $0.64 increased 23% year-over-year.

Share Repurchase Update

During the quarter ended March 31, 2016, ScanSource repurchased approximately 0.9 million shares for an aggregate purchase price of approximately $26.8 million. Under the Company’s $120 million share repurchase authorization through March 31, 2016, ScanSource has repurchased approximately 3.3 million shares for approximately $117.2 million, having executed over 97% of the total authorization.

1

Exhibit 99.1

Forecast for Next Quarter

The Company announced its current expectations for the fourth quarter of fiscal year 2016. ScanSource expects net sales for the quarter ending June 30, 2016 to range from $900 million to $950 million and non-GAAP diluted earnings per share to range from $0.70 to $0.74 per share. Non-GAAP diluted earnings per share exclude amortization of intangibles, change in fair value of contingent consideration and acquisition costs.

Webcast Details

ScanSource will present additional information about its financial results and outlook in a conference call with presentation slides today, May 10, 2016 at 5:00 p.m. (ET).  A webcast of the call and accompanying presentation slides will be available for all interested parties and can be accessed at www.scansource.com (Investor Relations section).  The webcast will be available for replay for 60 days.

Safe Harbor Statement

This press release contains comments that are “forward-looking” statements that involve risks and uncertainties; these statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Any number of important factors could cause actual results to differ materially from anticipated or forecasted results, including, but not limited to, utilization and further implementation of the Company's new ERP system; risks in connection with our growth which includes strategic acquisitions; expanded international operations that expose the Company to greater risks than its operations in domestic markets; risks associated with consolidation of the Company's vendors; risks in connection with compliance with laws and regulations governing the Company's international business; macroeconomic circumstances that could impact the business, such as currency fluctuations, credit market conditions, and an economic downturn; expectations of market demand trends; the ability to forecast volatility in earnings resulting from the quarterly revaluation of the Company's earnout obligations; the timing and amount of any share repurchases; the exercise of discretion by the Company to make any repurchase or continue the share repurchase authorization; and changes to the source of funds for any repurchases. For more information concerning factors that could cause actual results to differ from anticipated results, see the Company's annual report on Form 10-K for the year ended June 30, 2015, filed with the Securities and Exchange Commission. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Information

In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the Company also discloses certain non-GAAP financial measures, which are summarized below. Non-GAAP financial measures are used to better understand and evaluate performance, including comparisons from period to period. Non-GAAP results exclude amortization of intangible assets related to acquisitions and change in fair value of contingent consideration.

Net sales on a constant currency basis: The Company discloses the percentage change in net sales excluding the translation impact from changes in foreign currency exchange rates between reporting periods. This measure enhances comparability between periods to help analyze underlying trends.

Non-GAAP operating income, non-GAAP net income and non-GAAP EPS: To evaluate current period performance on a clearer and more consistent basis with prior periods, the Company discloses non-GAAP operating income, non-GAAP net income and non-GAAP diluted earnings per share. Non-GAAP results exclude amortization of intangible assets related to acquisitions, change in the fair value of contingent consideration, and other non-GAAP adjustments. Non-GAAP operating income, non-GAAP net income, and non-GAAP EPS measures are useful in assessing and understanding the Company's operating performance, especially when comparing results with previous periods or forecasting performance for future periods.

Return on invested capital ("ROIC"): Management uses ROIC as a performance measurement to assess efficiency in allocating capital under the Company's control to generate returns. Management believes this metric balances the Company's operating results with asset and liability management, is not impacted by capitalization decisions and is considered to have a strong correlation with shareholder value creation. In addition, it is easily computed, communicated and understood. ROIC also provides management a measure of the Company's profitability on a basis more comparable to historical or future periods.

ROIC assists management in comparing the Company's performance over various reporting periods on a consistent basis because it removes from operating results the impact of items that do not reflect core operating performance. Adjusted earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") excludes the change in fair value of contingent consideration, in addition to other non-GAAP adjustments. Management believes the calculation of ROIC provides useful

2

Exhibit 99.1

information to investors and is an additional relevant comparison of the Company's performance during the year. In addition, the Company's Board of Directors uses ROIC in evaluating business and management performance. Certain management incentive compensation targets are set and measured relative to ROIC.

These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that the Company reports may not be comparable to similarly titled amounts reported by other companies. Analysis of results and outlook on a non-GAAP basis should be considered in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with GAAP. A reconciliation of the Company's non-GAAP financial information to GAAP is set forth in the following Supplementary Information (Unaudited) tables.

About ScanSource, Inc.

ScanSource, Inc. (NASDAQ: SCSC) is a leading global provider of technology products and solutions, focusing on point-of-sale (POS), barcode, physical security, video, voice, data networking and emerging technologies. ScanSource's teams provide value-added solutions and operate from two segments, Worldwide Barcode & Security and Worldwide Communications & Services. ScanSource is committed to helping its reseller customers choose, configure and deliver the industry's best solutions across almost every vertical market in North America, Latin America and Europe. Founded in 1992, the Company is headquartered in Greenville, South Carolina and was named one of the 2015 Best Places to Work in South Carolina. ScanSource ranks #775 on the Fortune 1000. For more information, visit www.scansource.com.

3

ScanSource Reports Third Quarter Results

ScanSource, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
	March 31, 2016			June 30, 2015*
Assets
Current assets:
Cash and cash equivalents	$	40,849		$	121,646
Accounts receivable, less allowance of $33,188 at March 31, 2016 and $32,589 at June 30, 2015	522,693			522,532
Inventories	568,247			553,063
Prepaid expenses and other current assets	54,249			46,917
Deferred income taxes	17,811			20,556
Total current assets	1,203,849			1,264,714
Property and equipment, net	50,076			46,574
Goodwill	90,912			66,509
Net identifiable intangible assets	53,064			46,272
Other non-current assets	41,560			52,872
Total assets	$	1,439,461		$	1,476,941
Liabilities and Shareholders' Equity
Current liabilities:
Current debt	$	774		$	2,860
Accounts payable	431,913			501,329
Accrued expenses and other current liabilities	98,429			81,000
Current portion of contingent consideration	12,915			9,391
Income taxes payable	3,218			4,180
Total current liabilities	547,249			598,760
Deferred income taxes	3,403			3,773
Long-term debt	5,429			5,966
Borrowings under revolving credit facility	73,641			—
Long-term portion of contingent consideration	14,226			24,569
Other long-term liabilities	38,139			34,888
Total liabilities	682,087			667,956
Shareholders' equity:
Common stock	67,534			157,172
Retained earnings	767,009			716,315
Accumulated other comprehensive income (loss)	(77,169		)	(64,502		)
Total shareholders' equity	757,374			808,985
Total liabilities and shareholders' equity	$	1,439,461		$	1,476,941

* Derived from audited financial statements.

4

ScanSource Reports Third Quarter Results

ScanSource, Inc. and Subsidiaries
Condensed Consolidated Income Statements (Unaudited)
(in thousands, except per share data)
	Quarter ended March 31,						Nine Months ended March 31,
	2016			2015			2016			2015
Net sales	$	798,404		$	763,203		$	2,662,754		$	2,361,941
Cost of goods sold	713,928			683,187			2,390,093			2,126,168
Gross profit	84,476			80,016			272,661			235,773
Selling, general and administrative expenses	61,690			58,235			190,202			158,047
Change in fair value of contingent consideration	1,139			285			4,520			1,262
Operating income	21,647			21,496			77,939			76,464
Interest expense	694			891			1,684			1,288
Interest income	(800		)	(731		)	(2,509		)	(2,057		)
Other, net	400			1,515			1,357			2,238
Income before income taxes	21,353			19,821			77,407			74,995
Provision for income taxes	7,311			6,878			26,713			26,023
Net income	$	14,042		$	12,943		$	50,694		$	48,972
Per share data:
Net income per common share, basic	$	0.54		$	0.45		$	1.90		$	1.71
Weighted-average shares outstanding, basic	25,863			28,646			26,741			28,590
Net income per common share, diluted	$	0.54		$	0.45		$	1.88		$	1.70
Weighted-average shares outstanding, diluted	25,967			28,855			26,908			28,825

5

ScanSource Reports Third Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Net Sales by Segment:
	Quarter ended March 31,
Worldwide Barcode & Security:	2016			2015		% Change
Net sales, as reported	$	532,534		$	482,780	10.3	%
Foreign exchange impact (a)	11,152			—
Net sales, constant currency	543,686			482,780		12.6	%
Less: Acquisitions	(63,637		)	—
Net sales, constant currency excluding acquisitions	$	480,049		$	482,780	(0.6	)%
Worldwide Communications & Services:
Net sales, as reported	$	265,870		$	280,423	(5.2	)%
Foreign exchange impact (a)	12,193			—
Net sales, constant currency	278,063			280,423		(0.8	)%
Less: Acquisitions	—			—
Net sales, constant currency excluding acquisitions	$	278,063		$	280,423	(0.8	)%
Consolidated:
Net sales, as reported	$	798,404		$	763,203	4.6	%
Foreign exchange impact (a)	23,345			—
Net sales, constant currency	821,749			763,203		7.7	%
Less: Acquisitions	(63,637		)	—
Net sales, constant currency excluding acquisitions	$	758,112		$	763,203	(0.7	)%
(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended March 31, 2016 into U.S. dollars using the weighted average foreign exchange rates for the quarter ended March 31, 2015.

6

ScanSource Reports Third Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Net Sales by Segment:
	Nine Months ended March 31,
Worldwide Barcode & Security:	2016			2015			% Change
Net sales, as reported	$	1,795,733		$	1,578,723		13.7	%
Foreign exchange impact (a)	77,663			—
Net sales, constant currency	1,873,396			1,578,723			18.7	%
Less: Acquisitions	(229,721		)	—
Net sales, constant currency excluding acquisitions	$	1,643,675		$	1,578,723		4.1	%
Worldwide Communications & Services:
Net sales, as reported	$	867,021		$	783,218		10.7	%
Foreign exchange impact (a)	19,944			—
Net sales, constant currency	886,965			783,218			13.2	%
Less: Acquisitions	(118,926		)	(4,686		)
Net sales, constant currency excluding acquisitions	$	768,039		$	778,532		(1.3	)%
Consolidated:
Net sales, as reported	$	2,662,754		$	2,361,941		12.7	%
Foreign exchange impact (a)	97,607			—
Net sales, constant currency	2,760,361			2,361,941			16.9	%
Less: Acquisitions	(348,647		)	(4,686		)
Net sales, constant currency excluding acquisitions	$	2,411,714		$	2,357,255		2.3	%
(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the nine months ended March 31, 2016 into U.S. dollars using the weighted average foreign exchange rates for the nine months ended March 31, 2015.

7

ScanSource Reports Third Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Net Sales by Geography:
	Quarter ended March 31,						Non-GAAP % Change
	2016		2015		% Change		Constant Currency(a)
United States	$	591,663	$	534,742	10.6	%	10.6	%
International	206,741		228,461		(9.5	)%	0.7	%
Consolidated	$	798,404	$	763,203	4.6	%	7.7	%
	Nine Months ended March 31,						Non-GAAP % Change
	2016		2015		% Change		Constant Currency(a)
United States	$	1,969,236	$	1,717,600	14.7	%	14.7	%
International	693,518		644,341		7.6	%	22.8	%
Consolidated	$	2,662,754	$	2,361,941	12.7	%	16.9	%
(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter and nine months ended March 31, 2016 into U.S. dollars using the weighted average foreign exchange rates for the quarter and nine months ended March 31, 2015. International net sales excluding the translation impact of foreign currencies for the quarter and nine months ended March 31, 2016 totaled $230.1 million and $791.1 million, respectively.

8

ScanSource Reports Third Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Non-GAAP Financial Information:
	Quarter ended March 31, 2016
	Operating income		Pre-tax income		Net income		Diluted EPS
GAAP measure	$	21,647	$	21,353	$	14,042	$	0.54
Adjustments:
Amortization of intangible assets	2,507		2,507		1,703		0.07
Change in fair value of contingent consideration	1,139		1,139		748		0.03
Acquisition costs (a)	29		29		29		—
Non-GAAP measure	$	25,322	$	25,028	$	16,522	$	0.64
	Quarter ended March 31, 2015
	Operating income		Pre-tax income		Net income		Diluted EPS
GAAP measure	$	21,496	$	19,821	$	12,943	$	0.45
Adjustments:
Amortization of intangible assets	2,114		2,114		1,464		0.05
Change in fair value of contingent consideration	285		285		200		0.01
Acquisition costs (a)	292		292		292		0.01
Non-GAAP measure	$	24,187	$	22,512	$	14,899	$	0.52
	Nine months ended March 31, 2016
	Operating income		Pre-tax income		Net income		Diluted EPS
GAAP measure	$	77,939	$	77,407	$	50,694	$	1.88
Adjustments:
Amortization of intangible assets	7,237		7,237		5,032		0.19
Change in fair value of contingent consideration	4,520		4,520		3,072		0.11
Acquisition costs (a)	309		309		309		0.01
Non-GAAP measure	$	90,005	$	89,473	$	59,107	$	2.19
	Nine months ended March 31, 2015
	Operating income		Pre-tax income		Net income		Diluted EPS
GAAP measure	$	76,464	$	74,995	$	48,972	$	1.70
Adjustments:
Amortization of intangible assets	4,550		4,550		3,149		0.11
Change in fair value of contingent consideration	1,262		1,262		887		0.03
Acquisition costs (a)	3,116		3,116		3,116		0.11
Non-GAAP measure	$	85,392	$	83,923	$	56,124	$	1.95
(a) Acquisition costs are non-deductible for tax purposes.

9

ScanSource Reports Third Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Non-GAAP Financial Information:
	Quarter ended March 31,						Nine Months ended March 31,
	2016			2015			2016			2015
Return on invested capital (ROIC), annualized (a)	12.3		%	12.1		%	14.5		%	14.5		%
Reconciliation of Net Income to Adjusted EBITDA
Net income - GAAP	$	14,042		$	12,943		$	50,694		$	48,972
Plus: Income taxes	7,311			6,878			26,713			26,023
Plus: Interest expense	694			891			1,684			1,288
Plus: Depreciation and amortization	4,281			3,710			12,570			8,050
EBITDA	26,328			24,422			91,661			84,333
Adjustments:
Change in fair value of contingent consideration	1,139			285			4,520			1,262
Acquisition costs	29			292			309			3,116
Adjusted EBITDA (numerator for ROIC) (non-GAAP)	$	27,496		$	24,999		$	96,490		$	88,711
Invested Capital Calculation
Equity - beginning of quarter	$	754,794		$	818,748		$	808,985		$	802,643
Equity - end of quarter	757,374			799,051			757,374			799,051
Adjustments:
Change in fair value of contingent consideration, net of tax	748			200			3,072			887
Acquisition costs, net of tax	29			292			309			3,116
Average equity	756,473			809,146			784,870			802,849
Average funded debt (b)	146,213			32,046			100,755			14,432
Invested capital (denominator for ROIC) (non-GAAP)	$	902,686		$	841,192		$	885,625		$	817,281
(a) Calculated as net income plus interest expense, income taxes, depreciation and amortization (EBITDA), plus change in fair value of contingent consideration and other adjustments, annualized and divided by invested capital for the period. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period.
(b) Average funded debt is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt.

10

EX-99.2

Q3 FY16 FINANCIAL RESULTS CONFERENCE CALL May 10, 2016 at 5:00 pm ET Exhibit 99.2

SAFE HARBOR This presentation may contain certain comments, which are “forward-looking” statements that involve plans, strategies, economic performance and trends, projections, expectations, costs or beliefs about future events and other statements that are not descriptions of historical facts, may be forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties; these statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Any number of factors could cause actual results to differ materially from anticipated results. For more information concerning factors that could cause actual results to differ from anticipated results, see the “Risk Factors” included in the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2015, as well as the quarterly reports on Form 10-Q for the quarters ended September 30, 2015 and December 31, 2015, filed with the Securities and Exchange Commission (“SEC”). Although ScanSource believes the expectations in its forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement. ScanSource disclaims any intentions or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by law. In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), the Company also discloses certain non-GAAP measures, including non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP diluted earnings per share, return on invested capital (“ROIC”) and the percentage change in net sales excluding the impact of foreign currency exchange rates. A reconciliation of the Company's non-GAAP financial information to GAAP financial information is provided in the Appendix and in the Company’s Form 8-K, filed with the SEC, with the quarterly earnings press release for the period indicated. 2

HIGHLIGHTS – Q3 FY16 3  Net sales of $798 million, up 5% Y/Y, and non-GAAP diluted EPS of $0.64*, up 23% Y/Y  Net sales below our expected range; EPS within our expected range  Missed expected net sales range primarily due to lower volume of big deals, which resulted in higher than expected gross profit margins  Gross profit margin of 10.6% from favorable sales mix  Three acquisitions (Imago, Network1 and KBZ) performed very well  Third quarter 2016 return on invested capital of 12.3% (14.5% YTD)* * See Appendix for calculation of non-GAAP measures and reconciliations to GAAP measures.

Q3 FY16 Q3 FY15 Change Net sales $798.4 $763.2 5% Gross profit 84.5 80.0 6% Gross profit margin % (of net sales) 10.6% 10.5% 10 bps Operating income 21.6 21.5 1% Non-GAAP operating income * 25.3 24.2 5% GAAP net income 14.0 12.9 8% Non-GAAP net income * 16.5 14.9 11% GAAP diluted EPS $0.54 $0.45 20% Non-GAAP diluted EPS * $0.64 $0.52 23% HIGHLIGHTS – Q3 FY16 4 * See Appendix for calculation of non-GAAP measures and reconciliations to GAAP measures. In millions, except EPS

THIRD QTR: Q3 FY16 – Y/Y % CHANGE Reported Constant Currency Organic Growth* WW Barcode & Security 10.3% 12.6% -0.6% WW Comms. & Services -5.2% -0.8% -0.8% Consolidated 4.6% 7.7% -0.7% SALES GROWTH SUMMARY 5 NINE MONTHS: Q3 FY16 YTD – Y/Y % CHANGE Reported Constant Currency Organic Growth* WW Barcode & Security 13.7% 18.7% 4.1% WW Comms. & Services 10.7% 13.2% -1.3% Consolidated 12.7% 16.9% 2.3% * Organic growth, a non-GAAP measure, reflects reported sales growth less impacts from foreign currency translation and acquisitions. See Appendix for calculation of non-GAAP measures and reconciliations to GAAP measures.

Q3 FY15 Q3 FY16 Q3 FY16 Q3 FY15 Net sales $532.5 $482.8 Gross profit $46.6 $41.2 Gross margin 8.8% 8.5% Operating income $11.4 $10.1 Operating income % 2.1% 2.1% Non-GAAP operating income $12.4 $10.7 Non-GAAP operating income % 2.3% 2.2% Net Sales, $ in millions Up 10% Organic Growth, -0.6% WW BARCODE & SECURITY 6 $ in millions Organic growth, a non-GAAP measure, reflects reported sales growth less impacts from foreign currency translation and acquisitions. Non-GAAP operating income excludes amortization of intangibles and change in fair value of contingent consideration. See Appendix for calculation of non-GAAP measures and reconciliations to GAAP measures. $483 $533 Acqs. & FX

Q3 FY16 Q3 FY15 Net sales $265.9 $280.4 Gross profit $37.9 $38.8 Gross margin 14.2% 13.8% Operating income $10.3 $11.7 Operating income % 3.9% 4.2% Non-GAAP operating income $12.9 $13.5 Non-GAAP operating income % 4.9% 4.8% WW COMMUNICATIONS & SERVICES 7 Q3 FY15 Q3 FY16 Net Sales, $ in millions Down 5% Organic Growth, -0.8% $ in millions $266 $280 Organic growth, a non-GAAP measure, reflects reported sales growth less impacts from foreign currency translation and acquisitions. Non-GAAP operating income excludes amortization of intangibles and change in fair value of contingent consideration. See Appendix for calculation of non-GAAP measures and reconciliations to GAAP measures.

Q3 FY16 Q2 FY16 Q3 FY15 Accounts receivable (Q/E) $522.7 $588.4 $487.1 Days sales outstanding in receivables 59 53 57 Inventory (Q/E) $568.2 $604.1 $485.6 Inventory turns 4.9 6.0 5.4 Accounts payable (Q/E) $431.9 $512.0 $392.4 Paid for inventory days 17.2 9.3 12.3 WORKING CAPITAL MEASURES $ in millions 8

Q3 FY16 Q2 FY16 Q3 FY15 Return on invested capital (QTR)* 12.3% 17.5% 12.1% Return on invested capital (YTD)* 14.5% 15.9% 14.5% Operating cash flow, trailing 12-months $72.7 $44.7 $42.2 Cash and cash equivalents (Q/E) $40.8 $39.4 $93.6 Debt (Q/E) $79.8 $115.1 $11.9 Net debt to EBITDA, trailing 12-months 0.31x 0.61x -- Shares repurchased – # of shares (QTR) 870,416 801,040 69,965 Shares repurchased – dollars (QTR) $26.8 $29.6 $2.7 Cum. repurchases under plan – # shares (as of Q/E) 3,300,384 2,429,968 69,965 Cum. repurchases under plan – dollars (as of Q/E) $117.2 $90.4 $2.7 Remaining authorization under plan (as of Q/E) $2.8 $29.6 $117.3 CASH FLOW AND BALANCE SHEET HIGHLIGHTS $ in millions 9 * Excludes non-GAAP adjustments and change in fair value of contingent consideration. See Appendix for calculation of ROIC, a non-GAAP measure.

Q4 FY16 OUTLOOK* 10 * Outlook as of May 10, 2016. Non-GAAP diluted EPS excludes amortization of intangible assets, change in fair value of contingent consideration, and acquisition costs. Reflects the following FX rates: $1.14 to EUR 1.00 for the Euro, $0.282 to R$1.00 for the Brazilian real (R$3.55 to $1), and $1.44 to GBP 1.00 for the British pound. For the quarter ending June 30, 2016, excluding amortization of intangible assets, change in fair value of contingent consideration, and acquisition costs: Net Sales Non-GAAP Diluted Earnings Per Share  Range from $900 million to $950 million  Range from $0.70 to $0.74 per share

APPENDIX: NON-GAAP FINANCIAL INFORMATION 11 Operating Income, Net Income & EPS ($ in thousands) Quarter Ended March 31, 2016 Operating Income Pre-tax income Net income Diluted EPS GAAP measure $ 21,647 $ 21,353 $ 14,042 $ 0.54 Adjustment: Amortization of intangible assets 2,507 2,507 1,703 0.07 Change in fair value of contingent consideration 1,139 1,139 748 0.03 Acquisition costs (a) 29 29 29 - Non-GAAP measure $ 25,322 $ 25,028 $ 16,522 $ 0.64 Quarter Ended March 31, 2015 Operating Income Pre-tax income Net income Diluted EPS GAAP measure $ 21,496 $ 19,821 $ 12,943 $ 0.45 Adjustment: Amortization of intangible assets 2,114 2,114 1,464 0.05 Change in fair value of contingent consideration 285 285 200 0.01 Acquisition costs (a) 292 292 292 0.01 Non-GAAP measure $ 24,187 $ 22,512 $ 14,899 $ 0.52 (a) Acquisition costs are nondeductible for tax purposes.

APPENDIX: NON-GAAP FINANCIAL INFORMATION 12 Highlights by Segment – Y/Y Quarter Ended March 31, 2016 ($ in thousands) WW Barcode & Security WW Comms. & Services Corporate Consolidated Net sales $ 532,534 $ 265,870 $ - $ 798,404 GAAP operating income $ 11,375 $ 10,301 $ (29) $ 21,647 Adjustments: Amortization of intangible assets 1,036 1,471 - 2,507 Change in fair value of contingent consideration - 1,139 - 1,139 Acquisition costs - - 29 29 Non-GAAP operating income $ 12,411 $ 12,911 $ - $ 25,322 GAAP operating income % (of net sales) 2.1% 3.9% n/m 2.7% Non-GAAP operating income % (of net sales) 2.3% 4.9% n/m 3.2% Quarter Ended March 31, 2015 WW Barcode & Security WW Comms. & Services Corporate Consolidated Net sales $ 482,780 $ 280,423 $ - $ 763,203 GAAP operating income $ 10,081 $ 11,707 $ (292) $ 21,496 Adjustments: Amortization of intangible assets 464 1,650 - 2,114 Change in fair value of contingent consideration 172 113 - 285 Acquisition costs - - 292 292 Non-GAAP operating income $ 10,717 $ 13,470 $ - $ 24,187 GAAP operating income % (of net sales) 2.1% 4.2% n/m 2.8% Non-GAAP operating income % (of net sales) 2.2% 4.8% n/m 3.2% n/m = not meaningful

APPENDIX: NON-GAAP FINANCIAL INFORMATION 13 Return on Invested Capital ($ in thousands) Q3 FY16 Q2 FY16 Q3 FY15 Return on invested capital (ROIC), annualized (a) 12.3% 17.5% 12.1% Reconciliation of Net Income to EBITDA Net income - GAAP $ 14,042 $ 20,656 $ 12,943 Plus: Income taxes 7,311 10,976 6,878 Plus: Interest expense 694 709 891 Plus: Depreciation and amortization 4,281 4,351 3,710 EBITDA 26,328 36,692 24,422 Change in fair value of contingent consideration 1,139 1,816 285 Acquisition costs 29 60 292 Adjusted EBITDA (numerator for ROIC)(non-GAAP) $ 27,496 $ 38,568 $ 24,999 Invested Capital Calculation Equity - beginning of the quarter $ 754,794 $ 764,693 $ 818,748 Equity - end of quarter 757,374 754,794 799,051 Add: Change in fair value of contingent consideration, net of tax 748 1,244 200 Add: Acquisition costs, net of tax 29 60 292 Average equity 756,473 760,396 809,146 Average funded debt (b) 146,213 117,421 32,046 Invested capital (denominator for ROIC)(non-GAAP) $ 902,686 $ 877,817 $ 841,192 Notes: (a) Calculated as net income plus interest expense, income taxes, depreciation and amortization (EBITDA), annualized divided by invested capital for the period. Adjusted EBITDA reflects other adjustments for non-GAAP measures. (b) Average daily amounts outstanding on short-term and long-term interest-bearing debt.

APPENDIX: NON-GAAP FINANCIAL INFORMATION 14 Net Sales, Constant Currency and Excluding Acquisitions - QTR ($ in thousands) WW Barcode & Security WW Comms. & Services Consolidated For the quarter ended March 31, 2016: Q3 FY16 net sales, as reported $ 532,534 $ 265,870 $ 798,404 Foreign exchange negative impact (a) 11,152 12,193 23,345 Q3 FY16 net sales, constant currency 543,686 278,063 821,749 Less: Acquisitions (63,637) - (63,637) Q3 FY16 net sales, constant currency excl. acquisitions $ 480,049 $ 278,063 $ 758,112 Q3 FY15 net sales, as reported $ 482,780 $ 280,423 $ 763,203 Y/Y % Change: As reported 10.3% -5.2% 4.6% Constant currency 12.6% -0.8% 7.7% Constant currency, excluding acquisitions -0.6% -0.8% -0.7% (a) Year-over-year sales growth excluding the translation impact of changes in foreign currency rates. Calculated by translating the net sales for the quarter ended March 31, 2016 into U.S. dollars using the weighted average foreign exchange rates for the quarter ended March 31, 2015.

APPENDIX: NON-GAAP FINANCIAL INFORMATION 15 Net Sales, Constant Currency and Excluding Acquisitions - YTD ($ in thousands) WW Barcode & Security WW Comms. & Services Consolidated For the nine months ended March 31, 2016: Q3 FY16 YTD net sales, as reported $ 1,795,733 $ 867,021 $ 2,662,754 Foreign exchange negative impact (a) 77,663 19,944 97,607 Q3 FY16 YTD net sales, constant currency 1,873,396 886,965 2,760,361 Less: Acquisitions (229,721) (118,926) (348,647) Q3 FY16 YTD net sales, constant currency excl. acquisitions $ 1,643,675 $ 768,039 $ 2,411,714 Q3 FY15 YTD net sales, as reported $ 1,578,723 $ 783,218 $ 2,361,941 Less: Acquisitions - (4,686) (4,686) Q3 FY15 YTD net sales, constant currency excl. acquisitions $ 1,578,723 $ 778,532 $ 2,357,255 Y/Y % Change: As reported 13.7% 10.7% 12.7% Constant currency 18.7% 13.2% 16.9% Constant currency, excluding acquisitions 4.1% -1.3% 2.3% (a) Year-over-year sales growth excluding the translation impact of changes in foreign currency rates. Calculated by translating the net sales for the nine months ended March 31, 2016 into U.S. dollars using the weighted average foreign exchange rates for the nine months ended March 31, 2015.