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

Quarterly revenues grew 15% over prior year

GREENVILLE, SC — January 28, 2010—ScanSource, Inc. (NASDAQ:SCSC), a leading international distributor of AIDC (automatic identification and data capture), point of sale, communications, and physical security products for the reseller market, today announced complete financial results for its second quarter ended December 31, 2009.

Quarter ended December 31, 2009:

 

Net sales

   $ 548 million

Net income

   $ 11.8 million

Diluted EPS

   $ 0.44 per share

“We are very pleased with our sales results for the December quarter” said Mike Baur, CEO, ScanSource, Inc. “The quarter’s highlights included record sales results in our International business and ScanSource Security and a return to strong revenue growth across all product categories. The results for the quarter also include one month’s business from our newly acquired communications unit in Germany, formerly known as Algol Europe.”

For the quarter ended December 31, 2009, net sales increased 14.9% to $548 million compared to $477 million for the quarter ended December 31, 2008. Quarterly operating income decreased by 1.4% to $18.1 million from $18.4 million in the quarter ended December 31, 2008. Operating margin


ScanSource Reports Second Quarter Results

 

decreased to 3.31% when compared to 3.86% in the quarter ended December 31, 2008. The decrease in operating income margin is largely attributable to higher bad debt expense recognized during the current quarter. The increase in expense is reflected in our allowance for doubtful accounts and is in response to a specific customer account exposure. Net income decreased 12.6% to $11.8 million for the quarter ended December 31, 2009 versus $13.5 million for the quarter ended December 31, 2008. It should be noted that the quarter ended December 31, 2008 includes a $3.5 million recovery ($2.2 million after tax, or $0.08 per diluted share) related to the settlement of a legal claim against a former service provider. This settlement was recorded in Other Income in the accompanying condensed income statement. The effective tax rate for the quarter was 35.7%, compared to 34.8% for the quarter ended December 31, 2008. Diluted earnings per share decreased 13.7% to $0.44 in the current quarter compared to $0.51 in the prior year.

Outlook for Next Quarter

The Company announced its net revenue outlook for the third quarter of fiscal 2010. ScanSource expects net revenues for the March 2010 quarter could range from $535 million to $555 million.

Safe Harbor Statement

This press release contains “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, 2009 filed with the Securities and Exchange Commission.

 

2


ScanSource Reports Second Quarter Results

 

About ScanSource, Inc.

ScanSource, Inc. (NASDAQ: SCSC) is a leading international distributor of specialty technology products for resellers in North America, Latin America and Europe. ScanSource POS & Barcoding delivers AIDC and POS solutions; Catalyst Telecom and ScanSource Communications provide voice, video and converged communications equipment; and ScanSource Security offers physical security solutions. Founded in 1992, the company ranks #854 on the Fortune 1000. For more information, call the toll-free sales telephone number at 800.944.2432 or visit www.scansourceinc.com.

 

3


ScanSource Reports Second Quarter Results

 

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands)

 

     December 31,
2009
   June 30,
2009*
Assets      

Current assets:

     

Cash and cash equivalents

   $ 38,000    $ 127,664

Trade & notes receivable

     359,795      291,037

Other receivables

     8,239      7,676

Inventories

     308,996      216,829

Prepaid expenses and other assets

     11,218      10,356

Deferred income taxes

     8,747      8,735
             

Total current assets

     734,995      662,297

Property and equipment, net

     20,531      21,035

Goodwill

     33,737      34,087

Other assets, including identifiable intangible assets

     35,615      31,212
             

Total assets

   $ 824,878    $ 748,631
             
Liabilities and Shareholders’ Equity      

Current liabilities:

     

Current portion of long-term debt

   $ —      $ —  

Trade accounts payable

     276,301      228,408

Accrued expenses and other liabilities

     32,043      30,443

Income taxes payable

     4,261      3,799
             

Total current liabilities

     312,605      262,650

Deferred income taxes

     —        —  

Long-term debt

     30,429      30,429

Borrowings under revolving credit facility

     —        —  

Other long-term liabilities

     12,072      10,106
             

Total liabilities

     355,106      303,185
             

Shareholder’s equity:

     

Common stock

     107,327      104,461

Retained earnings

     360,572      337,822

Accumulated other comprehensive income

     1,873      3,163
             

Total shareholders’ equity

     469,772      445,446
             

Total liabilities and shareholders’ equity

   $ 824,878    $ 748,631
             

 

* Derived from audited financial statements at June 30, 2009.

 

4


ScanSource Reports Second Quarter Results

 

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Income Statements (Unaudited)

(in thousands, except per share information)

 

     Quarter ended
December 31,
    Six months ended
December 31,
 
     2009     2008     2009     2008  

Net sales

   $ 548,112      $ 477,093      $ 1,036,535      $ 1,016,918   

Cost of goods sold

     491,816        424,765        928,821        909,088   
                                

Gross profit

     56,296        52,328        107,714        107,830   
                                

Operating expenses:

        

Selling, general and administrative expenses

     38,167        33,934        71,898        68,808   
                                

Operating income

     18,129        18,394        35,816        39,022   

Other expense (income):

        

Interest expense

     364        623        730        1,202   

Interest income

     (422     (424     (685     (775

Other, net

     (174     (2,559     (58     (2,283
                                

Other expense (income)

     (232     (2,360     (13     (1,856
                                

Income before income taxes

     18,361        20,754        35,829        40,878   

Provision for income taxes

     6,546        7,229        13,079        14,923   
                                

Net income

   $ 11,815      $ 13,525      $ 22,750      $ 25,955   
                                

Per share data:

        

Net income per common share, basic

   $ 0.44      $ 0.51      $ 0.86      $ 0.99   
                                

Weighted-average shares outstanding, basic

     26,575        26,411        26,571        26,244   
                                

Net income per common share, diluted

   $ 0.44      $ 0.51      $ 0.85      $ 0.98   
                                

Weighted-average shares outstanding, diluted

     26,798        26,540        26,811        26,422   
                                

 

5