EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

FOR IMMEDIATE RELEASE

 

Contact:

   Richard P. Cleys
   VP and CFO
   ScanSource, Inc.
   (864) 286-4358

SCANSOURCE REPORTS SECOND QUARTER RESULTS

Stronger than expected earnings on lower sales

GREENVILLE, SC — January 22, 2009—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 complete financial results for its second quarter ended December 31, 2008.

 

Quarter End 12/31/08 capsule:

 

Net sales

Net income

Diluted EPS

 

 

 

$477 million

$13.5 million

$0.51 per share

 

“Customers in all our business segments experienced less demand for their products and services due to the global economic crisis,” said Mike Baur, CEO, ScanSource, Inc. “In spite of these lower sales results, we achieved higher profitability than expected.”

For the quarter ended December 31, 2008, net sales decreased 14% to $477 million compared to $553 million for the quarter ended December 31, 2007. Quarterly operating income decreased 27.7% to $18.4 million from $25.4 million for the comparable prior year quarter. Our effective tax rate for the quarter was 34.8%, compared to 37.7% for the prior year quarter. Net income decreased


ScanSource Reports Second Quarter Results

12.5% to $13.5 million for the quarter ended December 31, 2008 versus $15.5 million for the quarter ended December 31, 2007. It should be noted that during the current quarter, the Company settled a legal claim against a former service provider, which resulted in a $3.5 million recovery ($2.2 million after tax or $0.08 per diluted share) that was recorded as Other Income in the accompanying condensed consolidated income statement.

Forecast for Next Quarter

The Company announced its revenue forecast for the third quarter of fiscal 2009. ScanSource expects net revenues for the March 2009 quarter could range from $450 million to $470 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 including but not limited to macroeconomic circumstances that could impact our business, such as currency fluctuations, continued adverse capital and credit market conditions and a prolonged economic downturn. 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, 2008 filed with the Securities and Exchange Commission.

About ScanSource

ScanSource, Inc. (NASDAQ:SCSC) is a leading international distributor of specialty technology products, consisting of seven sales units in North America, Latin America and Europe.

 

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ScanSource Reports Second Quarter Results

ScanSource POS and Barcoding in North America, Latin America and Europe delivers AIDC and POS solutions; Catalyst Telecom in the U.S. and ScanSource Communications in North America and Europe, provide voice, video and converged communications equipment; and ScanSource Security in North America offers physical security solutions. Founded in 1992, the company ranks #901 on the Fortune 1000. For more information, call the toll-free sales telephone number at 800.944.2432 or visit www.scansourceinc.com.

 

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ScanSource Reports Second Quarter Results

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

    

December 31,

2008

   June 30,
     (unaudited)    2008 *
Assets      

Current Assets

     

Cash and cash equivalents

   $ 85,477    $ 15,224

Trade & notes receivable, net

     287,277      360,154

Other receivables

     8,418      8,052

Inventories

     266,213      280,077

Prepaid expenses and other assets

     6,223      5,556

Deferred income taxes

     12,453      11,428
             

Total current assets

     666,061      680,491

Property and equipment, net

     23,531      22,420

Goodwill

     32,954      36,121

Other assets, including identifiable intangible assets

     31,324      33,174
             

Total assets

   $ 753,870    $ 772,206
             
Liabilities and Shareholders’ Equity      

Current Liabilities

     

Current portion of long-term debt

   $ —      $ —  

Short-term borrowings

     4,225      7,649

Trade accounts payable

     243,725      265,284

Accrued expenses and other liabilities

     28,771      38,922
             

Total current liabilities

     276,721      311,855

Long-term debt

     30,369      29,576

Borrowings under revolving credit facility

     20,000      27,047

Other long-term liabilities

     9,431      7,975
             

Total liabilities

     336,521      376,453
             

Shareholders’ Equity

     

Common stock

     100,427      96,097

Retained earnings

     316,089      290,134

Accumulated other comprehensive income

     833      9,522
             

Total shareholders’ equity

     417,349      395,753
             

Total liabilities and shareholders’ equity

   $ 753,870    $ 772,206
             

* Derived from audited financial statements at June 30, 2008.

 

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ScanSource Reports Second Quarter Results

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)

(In thousands, except per share data)

 

     Quarter ended     Six months ended  
     December 31,     December 31,  
     2008     2007     2008     2007  

Net sales

   $ 477,093     $ 553,344     $ 1,016,918     $ 1,107,035  

Cost of goods sold

     424,765       494,167       909,088       989,734  
                                

Gross profit

     52,328       59,177       107,830       117,301  
                                

Selling, general and administrative expenses

     33,934       33,743       68,808       66,514  
                                

Operating income

     18,394       25,434       39,022       50,787  

Other expense (income):

        

Interest expense

     623       1,274       1,202       3,399  

Interest income

     (424 )     (404 )     (775 )     (707 )

Other expense (income)

     (2,559 )     (251 )     (2,284 )     (403 )
                                

Other expense (income), net

     (2,360 )     619       (1,857 )     2,289  
                                

Income before income taxes

     20,754       24,815       40,879       48,498  

Provision for income taxes

     7,229       9,365       14,923       18,361  
                                

Net income

   $ 13,525     $ 15,450     $ 25,956     $ 30,137  
                                

Per share data:

        

Net income per common share, basic

   $ 0.51     $ 0.60     $ 0.99     $ 1.16  
                                

Weighted-average shares outstanding, basic

     26,411       25,899       26,244       25,883  
                                

Net income per common share, diluted

   $ 0.51     $ 0.59     $ 0.98     $ 1.15  
                                

Weighted-average shares outstanding, diluted

     26,540       26,330       26,422       26,293  
                                

 

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