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Share Name | Share Symbol | Market | Type |
---|---|---|---|
ScanSource Inc | NASDAQ:SCSC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.07 | 0.17% | 41.97 | 41.57 | 42.48 | 42.17 | 40.655 | 41.92 | 101,408 | 01:00:00 |
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☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
Title of each class:
|
Trading Symbol:
|
Name of exchange on which registered:
|
Common stock, no par value
|
SCSC
|
NASDAQ Global Select Market
|
Large accelerated filer
|
☒
|
|
Smaller reporting company
|
☐
|
|
Accelerated filer
|
☐
|
|
Emerging growth company
|
☐
|
|
Non-accelerated filer
|
☐
|
|
|
|
|
Class
|
|
Outstanding at January 31, 2020
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Common Stock, no par value per share
|
|
25,345,798 shares
|
|
|
Page #
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||
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|
|
Item 1.
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||
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||
|
||
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|
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Item 2.
|
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Item 3.
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Item 4.
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||
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||
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Item 1
|
||
Item 1A.
|
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Item 2
|
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Item 6.
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||
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Item 1.
|
Financial Statements
|
|
December 31, 2019
|
|
June 30, 2019
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
42,005
|
|
|
$
|
23,818
|
|
Accounts receivable, less allowance of $37,672 at December 31, 2019 and $38,849 at June 30, 2019
|
645,270
|
|
|
654,983
|
|
||
Inventories
|
742,979
|
|
|
697,343
|
|
||
Prepaid expenses and other current assets
|
109,075
|
|
|
101,171
|
|
||
Total current assets
|
1,539,329
|
|
|
1,477,315
|
|
||
Property and equipment, net
|
61,625
|
|
|
63,363
|
|
||
Goodwill
|
369,537
|
|
|
319,538
|
|
||
Identifiable intangible assets, net
|
117,981
|
|
|
127,939
|
|
||
Deferred income taxes
|
24,498
|
|
|
24,724
|
|
||
Other non-current assets
|
97,160
|
|
|
54,382
|
|
||
Total assets
|
$
|
2,210,130
|
|
|
$
|
2,067,261
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
672,906
|
|
|
$
|
558,101
|
|
Accrued expenses and other current liabilities
|
105,649
|
|
|
91,407
|
|
||
Current portion of contingent consideration
|
45,043
|
|
|
38,393
|
|
||
Income taxes payable
|
627
|
|
|
4,310
|
|
||
Short-term borrowings
|
2,098
|
|
|
4,590
|
|
||
Current portion of long-term debt
|
5,964
|
|
|
4,085
|
|
||
Total current liabilities
|
832,287
|
|
|
700,886
|
|
||
Deferred income taxes
|
1,248
|
|
|
1,395
|
|
||
Long-term debt, net of current portion
|
146,925
|
|
|
151,014
|
|
||
Borrowings under revolving credit facility
|
202,758
|
|
|
200,817
|
|
||
Long-term portion of contingent consideration
|
—
|
|
|
39,532
|
|
||
Other long-term liabilities
|
99,332
|
|
|
59,488
|
|
||
Total liabilities
|
1,282,550
|
|
|
1,153,132
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, no par value; 3,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, no par value; 45,000,000 shares authorized, 25,345,798 and 25,408,397 shares issued and outstanding at December 31, 2019 and June 30, 2019, respectively
|
61,095
|
|
|
64,287
|
|
||
Retained earnings
|
962,825
|
|
|
939,930
|
|
||
Accumulated other comprehensive loss
|
(96,340
|
)
|
|
(90,088
|
)
|
||
Total shareholders’ equity
|
927,580
|
|
|
914,129
|
|
||
Total liabilities and shareholders’ equity
|
$
|
2,210,130
|
|
|
$
|
2,067,261
|
|
|
|
|
|
||||
June 30, 2019 amounts are derived from audited consolidated financial statements.
|
|||||||
See accompanying notes to these condensed consolidated financial statements.
|
|
Quarter ended
|
|
Six months ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
$
|
989,503
|
|
|
$
|
1,046,021
|
|
|
$
|
1,996,430
|
|
|
$
|
2,018,921
|
|
Cost of goods sold
|
875,619
|
|
|
925,543
|
|
|
1,770,447
|
|
|
1,786,229
|
|
||||
Gross profit
|
113,884
|
|
|
120,478
|
|
|
225,983
|
|
|
232,692
|
|
||||
Selling, general and administrative expenses
|
83,121
|
|
|
80,950
|
|
|
165,632
|
|
|
158,880
|
|
||||
Depreciation expense
|
3,459
|
|
|
3,272
|
|
|
7,008
|
|
|
6,538
|
|
||||
Intangible amortization expense
|
5,631
|
|
|
4,700
|
|
|
10,593
|
|
|
9,703
|
|
||||
Change in fair value of contingent consideration
|
3,176
|
|
|
1,850
|
|
|
5,649
|
|
|
6,434
|
|
||||
Operating income
|
18,497
|
|
|
29,706
|
|
|
37,101
|
|
|
51,137
|
|
||||
Interest expense
|
3,751
|
|
|
3,119
|
|
|
7,543
|
|
|
5,746
|
|
||||
Interest income
|
(749
|
)
|
|
(264
|
)
|
|
(1,548
|
)
|
|
(715
|
)
|
||||
Other (income) expense, net
|
(225
|
)
|
|
201
|
|
|
(195
|
)
|
|
233
|
|
||||
Income before income taxes
|
15,720
|
|
|
26,650
|
|
|
31,301
|
|
|
45,873
|
|
||||
Provision for income taxes
|
4,354
|
|
|
6,668
|
|
|
8,405
|
|
|
11,570
|
|
||||
Net income
|
$
|
11,366
|
|
|
$
|
19,982
|
|
|
$
|
22,896
|
|
|
$
|
34,303
|
|
Per share data:
|
|
|
|
|
|
|
|
||||||||
Net income per common share, basic
|
$
|
0.45
|
|
|
$
|
0.78
|
|
|
$
|
0.90
|
|
|
$
|
1.34
|
|
Weighted-average shares outstanding, basic
|
25,274
|
|
|
25,640
|
|
|
25,407
|
|
|
25,619
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per common share, diluted
|
$
|
0.45
|
|
|
$
|
0.78
|
|
|
$
|
0.90
|
|
|
$
|
1.33
|
|
Weighted-average shares outstanding, diluted
|
25,358
|
|
|
25,750
|
|
|
25,488
|
|
|
25,752
|
|
See accompanying notes to these condensed consolidated financial statements.
|
|
Quarter ended
|
|
Six months ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
11,366
|
|
|
$
|
19,982
|
|
|
$
|
22,896
|
|
|
$
|
34,303
|
|
Unrealized (loss) gain on hedged transaction, net of tax
|
900
|
|
|
(615
|
)
|
|
(171
|
)
|
|
(469
|
)
|
||||
Foreign currency translation adjustment
|
8,558
|
|
|
1,362
|
|
|
(6,085
|
)
|
|
(3,399
|
)
|
||||
Comprehensive income
|
$
|
20,824
|
|
|
$
|
20,729
|
|
|
$
|
16,640
|
|
|
$
|
30,435
|
|
See accompanying notes to these condensed consolidated financial statements.
|
|
Common
Stock
(Shares)
|
|
Common
Stock
(Amount)
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||
Balance at June 30, 2019
|
25,408,397
|
|
|
$
|
64,287
|
|
|
$
|
939,930
|
|
|
$
|
(90,088
|
)
|
|
$
|
914,129
|
|
Net income
|
—
|
|
|
—
|
|
|
11,530
|
|
|
—
|
|
|
11,530
|
|
||||
Unrealized loss on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,071
|
)
|
|
(1,071
|
)
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,639
|
)
|
|
(14,639
|
)
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
786
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||
Common stock repurchased
|
(168,068
|
)
|
|
(5,432
|
)
|
|
—
|
|
|
—
|
|
|
(5,432
|
)
|
||||
Share-based compensation
|
—
|
|
|
1,246
|
|
|
—
|
|
|
—
|
|
|
1,246
|
|
||||
Balance at September 30, 2019
|
25,241,115
|
|
|
$
|
60,089
|
|
|
$
|
951,460
|
|
|
$
|
(105,798
|
)
|
|
$
|
905,751
|
|
Net income
|
—
|
|
|
—
|
|
|
11,366
|
|
|
—
|
|
|
11,366
|
|
||||
Unrealized loss on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
900
|
|
|
900
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
8,558
|
|
|
8,558
|
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
104,683
|
|
|
(621
|
)
|
|
—
|
|
|
—
|
|
|
(621
|
)
|
||||
Stock repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Share-based compensation
|
—
|
|
|
1,627
|
|
|
—
|
|
|
—
|
|
|
1,627
|
|
||||
Balance at December 31, 2019
|
25,345,798
|
|
|
$
|
61,095
|
|
|
$
|
962,825
|
|
|
$
|
(96,340
|
)
|
|
$
|
927,580
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
See accompanying notes to these condensed consolidated financial statements.
|
|
Common
Stock
(Shares)
|
|
Common
Stock
(Amount)
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||
Balance at June 30, 2018
|
25,593,122
|
|
|
$
|
68,220
|
|
|
$
|
882,333
|
|
|
$
|
(84,177
|
)
|
|
$
|
866,376
|
|
Net income
|
—
|
|
|
—
|
|
|
14,322
|
|
|
—
|
|
|
14,322
|
|
||||
Unrealized gain on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
146
|
|
|
146
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,762
|
)
|
|
(4,762
|
)
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
14,542
|
|
|
425
|
|
|
—
|
|
|
—
|
|
|
425
|
|
||||
Share-based compensation
|
—
|
|
|
1,390
|
|
|
—
|
|
|
—
|
|
|
1,390
|
|
||||
Balance at September 30, 2018
|
25,607,664
|
|
|
$
|
70,035
|
|
|
$
|
896,655
|
|
|
$
|
(88,793
|
)
|
|
$
|
877,897
|
|
Net income
|
—
|
|
|
—
|
|
|
19,982
|
|
|
—
|
|
|
19,982
|
|
||||
Unrealized loss on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(615
|
)
|
|
(615
|
)
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
1,362
|
|
|
1,362
|
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
104,065
|
|
|
(321
|
)
|
|
—
|
|
|
—
|
|
|
(321
|
)
|
||||
Stock repurchased
|
(9,387
|
)
|
|
(308
|
)
|
|
—
|
|
|
—
|
|
|
(308
|
)
|
||||
Share based compensation
|
—
|
|
|
1,506
|
|
|
—
|
|
|
—
|
|
|
1,506
|
|
||||
Balance at December 31, 2018
|
25,702,342
|
|
|
$
|
70,912
|
|
|
$
|
916,637
|
|
|
$
|
(88,046
|
)
|
|
$
|
899,503
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
See accompanying notes to these condensed consolidated financial statements.
|
|
Six months ended
|
||||||
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
22,896
|
|
|
$
|
34,303
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
18,889
|
|
|
18,203
|
|
||
Amortization of debt issuance costs
|
209
|
|
|
168
|
|
||
Provision for doubtful accounts
|
2,800
|
|
|
2,187
|
|
||
Share-based compensation
|
2,849
|
|
|
2,907
|
|
||
Deferred income taxes
|
(332
|
)
|
|
1,835
|
|
||
Change in fair value of contingent consideration
|
5,649
|
|
|
6,434
|
|
||
Contingent consideration payments excess
|
(3,050
|
)
|
|
(7,444
|
)
|
||
Finance lease interest
|
39
|
|
|
—
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
6,595
|
|
|
(30,818
|
)
|
||
Inventories
|
(48,559
|
)
|
|
(110,909
|
)
|
||
Prepaid expenses and other assets
|
(7,001
|
)
|
|
914
|
|
||
Other non-current assets
|
(7,919
|
)
|
|
1,849
|
|
||
Accounts payable
|
113,591
|
|
|
43,853
|
|
||
Accrued expenses and other liabilities
|
15,379
|
|
|
(3,993
|
)
|
||
Income taxes payable
|
(3,975
|
)
|
|
(11,259
|
)
|
||
Net cash provided by (used in) operating activities
|
118,060
|
|
|
(51,770
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(2,750
|
)
|
|
(5,780
|
)
|
||
Cash paid for business acquisitions, net of cash acquired
|
(48,921
|
)
|
|
(32,183
|
)
|
||
Net cash used in investing activities
|
(51,671
|
)
|
|
(37,963
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings on revolving credit
|
1,084,158
|
|
|
1,126,333
|
|
||
Repayments on revolving credit
|
(1,084,138
|
)
|
|
(1,003,022
|
)
|
||
Repayments on short-term borrowings, net
|
(2,450
|
)
|
|
—
|
|
||
Repayments on long-term debt
|
(2,210
|
)
|
|
(331
|
)
|
||
Repayments of finance lease obligations
|
(1,115
|
)
|
|
(330
|
)
|
||
Contingent consideration payments
|
(35,481
|
)
|
|
(35,616
|
)
|
||
Exercise and issuance of equity awards
|
720
|
|
|
1,509
|
|
||
Taxes paid on settlement of equity awards
|
(1,354
|
)
|
|
(1,404
|
)
|
||
Repurchase of common stock
|
(6,077
|
)
|
|
(308
|
)
|
||
Net cash (used in) provided by financing activities
|
(47,947
|
)
|
|
86,831
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(255
|
)
|
|
121
|
|
||
Increase (decrease) in cash and cash equivalents
|
18,187
|
|
|
(2,781
|
)
|
||
Cash and cash equivalents at beginning of period
|
23,818
|
|
|
25,530
|
|
||
Cash and cash equivalents at end of period
|
$
|
42,005
|
|
|
$
|
22,749
|
|
|
|
|
|
||||
See accompanying notes to these condensed consolidated financial statements.
|
|
|
Quarter ended December 31, 2019
|
||||||||||
|
|
|
|
(in thousands)
|
|
|
||||||
|
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
Revenue by product/service:
|
|
|
|
|
|
|
||||||
Technology solutions
|
|
$
|
686,237
|
|
|
$
|
287,910
|
|
|
$
|
974,147
|
|
Master agency and professional services(a)
|
|
—
|
|
|
15,356
|
|
|
15,356
|
|
|||
|
|
$
|
686,237
|
|
|
$
|
303,266
|
|
|
$
|
989,503
|
|
|
|
|
|
|
|
|
||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
|
Six months ended December 31, 2019
|
||||||||||
|
|
|
|
(in thousands)
|
|
|
||||||
|
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
Revenue by product/service:
|
|
|
|
|
|
|
||||||
Technology solutions
|
|
$
|
1,384,028
|
|
|
$
|
581,866
|
|
|
$
|
1,965,894
|
|
Master agency and professional services(a)
|
|
—
|
|
|
30,536
|
|
|
30,536
|
|
|||
|
|
$
|
1,384,028
|
|
|
$
|
612,402
|
|
|
$
|
1,996,430
|
|
|
|
|
|
|
|
|
||||||
(a) Includes Intelisys Communications, Inc., Canpango, and Intelisys Global Ltd.
|
|
Quarter ended
|
|
Six months ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
11,366
|
|
|
$
|
19,982
|
|
|
$
|
22,896
|
|
|
$
|
34,303
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares, basic
|
25,274
|
|
|
25,640
|
|
|
25,407
|
|
|
25,619
|
|
||||
Dilutive effect of share-based payments
|
84
|
|
|
110
|
|
|
81
|
|
|
133
|
|
||||
Weighted-average shares, diluted
|
25,358
|
|
|
25,750
|
|
|
25,488
|
|
|
25,752
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per common share, basic
|
$
|
0.45
|
|
|
$
|
0.78
|
|
|
$
|
0.90
|
|
|
$
|
1.34
|
|
Net income per common share, diluted
|
$
|
0.45
|
|
|
$
|
0.78
|
|
|
$
|
0.90
|
|
|
$
|
1.33
|
|
|
December 31, 2019
|
|
June 30, 2019
|
||||
|
(in thousands)
|
||||||
Foreign currency translation adjustment
|
$
|
(93,994
|
)
|
|
$
|
(87,913
|
)
|
Unrealized loss on hedged transaction, net of tax
|
(2,346
|
)
|
|
(2,175
|
)
|
||
Accumulated other comprehensive loss
|
$
|
(96,340
|
)
|
|
$
|
(90,088
|
)
|
|
|
|
|
|
Quarter ended December 31,
|
|
Six months ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Tax (expense) benefit
|
$
|
(42
|
)
|
|
$
|
(509
|
)
|
|
$
|
434
|
|
|
$
|
(6
|
)
|
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance at June 30, 2019
|
$
|
137,077
|
|
|
$
|
182,461
|
|
|
$
|
319,538
|
|
Additions
|
—
|
|
|
49,835
|
|
|
49,835
|
|
|||
Foreign currency translation adjustment
|
47
|
|
|
117
|
|
|
164
|
|
|||
Balance at December 31, 2019
|
$
|
137,124
|
|
|
$
|
232,413
|
|
|
$
|
369,537
|
|
|
Net Identifiable Intangible Assets
|
||
|
(in thousands)
|
||
Balance at June 30, 2019
|
$
|
127,939
|
|
Additions
|
—
|
|
|
Amortization expense
|
(10,593
|
)
|
|
Foreign currency translation adjustment
|
635
|
|
|
Balance at December 31, 2019
|
$
|
117,981
|
|
|
December 31, 2019
|
|
June 30, 2019
|
||||
|
(in thousands)
|
||||||
Short-term borrowings
|
$
|
2,098
|
|
|
$
|
4,590
|
|
Current portion of long-term debt
|
5,964
|
|
|
4,085
|
|
||
Mississippi revenue bond, net of current portion
|
4,425
|
|
|
4,764
|
|
||
Senior secured term loan facility, net of current portion
|
142,500
|
|
|
146,250
|
|
||
Borrowings under revolving credit facility
|
202,758
|
|
|
200,817
|
|
||
Total debt
|
$
|
357,745
|
|
|
$
|
360,506
|
|
|
Quarter ended
|
|
Six months ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Net foreign exchange derivative contract losses (gains)
|
$
|
2,315
|
|
|
$
|
(964
|
)
|
|
$
|
200
|
|
|
$
|
(948
|
)
|
Net foreign currency transactional and re-measurement (gains) losses
|
(2,417
|
)
|
|
1,384
|
|
|
(391
|
)
|
|
1,465
|
|
||||
Net foreign currency exchange (gains) losses
|
$
|
(102
|
)
|
|
$
|
420
|
|
|
$
|
(191
|
)
|
|
$
|
517
|
|
|
|
Quarter ended
|
|
Six months ended
|
||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Net interest expense (income) recognized as a result of interest rate swap
|
|
$
|
136
|
|
|
$
|
(57
|
)
|
|
$
|
163
|
|
|
$
|
83
|
|
Unrealized gain (loss) in fair value of interest rate swap
|
|
1,068
|
|
|
(751
|
)
|
|
(372
|
)
|
|
(699
|
)
|
||||
Net increase (decrease) in accumulated other comprehensive (loss) income
|
|
$
|
1,204
|
|
|
$
|
(808
|
)
|
|
$
|
(209
|
)
|
|
$
|
(616
|
)
|
Income tax effect
|
|
304
|
|
|
(193
|
)
|
|
(38
|
)
|
|
(147
|
)
|
||||
Net increase (decrease) in accumulated other comprehensive (loss) income, net of tax
|
|
$
|
900
|
|
|
$
|
(615
|
)
|
|
$
|
(171
|
)
|
|
$
|
(469
|
)
|
|
|
|
December 31, 2019
|
|
June 30, 2019
|
||||||||||||
|
Balance Sheet Location
|
|
Fair Value of
Derivatives
Designated
as Hedge Instruments
|
|
Fair Value of
Derivatives
Not Designated as Hedge Instruments
|
|
Fair Value of
Derivatives
Designated
as Hedge Instruments
|
|
Fair Value of
Derivatives
Not Designated as Hedge Instruments
|
||||||||
|
|
|
(in thousands)
|
||||||||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
$
|
—
|
|
|
$
|
125
|
|
|
$
|
—
|
|
|
$
|
165
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Accrued expenses and other current liabilities
|
|
$
|
—
|
|
|
$
|
320
|
|
|
$
|
—
|
|
|
$
|
168
|
|
Interest rate swap agreement
|
Other long-term liabilities
|
|
$
|
3,627
|
|
|
$
|
—
|
|
|
$
|
3,504
|
|
|
$
|
—
|
|
•
|
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
•
|
Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;
|
•
|
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).
|
|
Total
|
|
Quoted
prices in
active
markets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
28,839
|
|
|
$
|
28,839
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
125
|
|
|
—
|
|
|
125
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
28,964
|
|
|
$
|
28,839
|
|
|
$
|
125
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
28,839
|
|
|
$
|
28,839
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
320
|
|
|
—
|
|
|
320
|
|
|
—
|
|
||||
Interest rate swap agreement
|
3,627
|
|
|
—
|
|
|
3,627
|
|
|
—
|
|
||||
Liability for contingent consideration
|
45,043
|
|
|
—
|
|
|
—
|
|
|
45,043
|
|
||||
Total liabilities at fair value
|
$
|
77,829
|
|
|
$
|
28,839
|
|
|
$
|
3,947
|
|
|
$
|
45,043
|
|
|
Total
|
|
Quoted
prices in
active
markets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
25,787
|
|
|
$
|
25,787
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
165
|
|
|
—
|
|
|
165
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
25,952
|
|
|
$
|
25,787
|
|
|
$
|
165
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
25,787
|
|
|
$
|
25,787
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
168
|
|
|
—
|
|
|
168
|
|
|
—
|
|
||||
Interest rate swap agreement
|
3,504
|
|
|
—
|
|
|
3,504
|
|
|
—
|
|
||||
Liability for contingent consideration
|
77,925
|
|
|
—
|
|
|
—
|
|
|
77,925
|
|
||||
Total liabilities at fair value
|
$
|
107,384
|
|
|
$
|
25,787
|
|
|
$
|
3,672
|
|
|
$
|
77,925
|
|
|
Quarter ended December 31, 2019
|
Six months ended December 31, 2019
|
|||||
|
Worldwide Communications & Services Segment
|
||||||
|
(in thousands)
|
||||||
Fair value at beginning of period
|
$
|
80,397
|
|
|
$
|
77,925
|
|
Payments
|
(38,531
|
)
|
|
(38,531
|
)
|
||
Change in fair value of contingent consideration
|
3,176
|
|
|
5,649
|
|
||
Fair value at end of period
|
$
|
45,043
|
|
|
$
|
45,043
|
|
|
Quarter ended December 31, 2018
|
|
Six months ended December 31, 2018
|
||||
|
Worldwide Communications & Services Segment
|
||||||
|
(in thousands)
|
||||||
Fair value at beginning of period
|
$
|
80,173
|
|
|
$
|
108,233
|
|
Payments
|
(10,813
|
)
|
|
(43,060
|
)
|
||
Change in fair value of contingent consideration
|
1,850
|
|
|
6,434
|
|
||
Foreign currency translation adjustment
|
676
|
|
|
279
|
|
||
Fair value at end of period
|
$
|
71,886
|
|
|
$
|
71,886
|
|
•
|
estimated future results, net of pro forma adjustments set forth in the purchase agreements;
|
•
|
the probability of achieving these results; and
|
•
|
a discount rate reflective of the Company’s creditworthiness and market risk premium associated with the United States markets.
|
Reporting Period
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Weighted Average Rates(a)
|
|
December 31, 2019
|
|
Discounted cash flow
|
|
Weighted average cost of capital
|
|
13.9
|
%
|
|
|
|
|
Adjusted EBITDA growth rate
|
|
28.1
|
%
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
Discounted cash flow
|
|
Weighted average cost of capital
|
|
14.2
|
%
|
|
|
|
|
Adjusted EBITDA growth rate
|
|
21.5
|
%
|
|
December 31, 2019
|
|
June 30, 2019
|
||||
|
(in thousands)
|
||||||
Assets:
|
|
|
|
||||
Worldwide Barcode, Networking & Security
|
$
|
1,195,012
|
|
|
$
|
1,097,207
|
|
Worldwide Communications & Services
|
949,840
|
|
|
905,439
|
|
||
Corporate
|
65,278
|
|
|
64,615
|
|
||
|
$
|
2,210,130
|
|
|
$
|
2,067,261
|
|
Property and equipment, net by Geography Category:
|
|
|
|
||||
United States and Canada
|
$
|
56,861
|
|
|
$
|
58,961
|
|
International
|
4,764
|
|
|
4,402
|
|
||
|
$
|
61,625
|
|
|
$
|
63,363
|
|
Operating leases
|
|
Balance Sheet location
|
|
December 31, 2019
|
||
|
|
|
|
(in thousands)
|
||
Operating lease right-of-use assets
|
|
Other non-current assets
|
|
$
|
32,619
|
|
Current operating lease liabilities
|
|
Accrued expenses and other current liabilities
|
|
$
|
6,234
|
|
Long-term operating lease liabilities
|
|
Other long-term liabilities
|
|
$
|
28,405
|
|
|
|
Quarter ended
|
|
Six months ended
|
||||
|
|
December 31, 2019
|
|
December 31, 2019
|
||||
|
|
(in thousands)
|
||||||
Operating lease cost
|
|
$
|
2,045
|
|
|
$
|
4,132
|
|
Variable lease cost
|
|
437
|
|
|
783
|
|
||
|
|
$
|
2,482
|
|
|
$
|
4,915
|
|
|
|
Quarter ended
|
|
Six months ended
|
||||
|
|
December 31, 2019
|
|
December 31, 2019
|
||||
|
|
(in thousands)
|
||||||
Cash paid for amounts in the measurement of lease liabilities
|
|
$
|
2,021
|
|
|
$
|
4,072
|
|
Right-of-use assets obtained in exchange for lease obligations
|
|
270
|
|
|
1,803
|
|
|
|
December 31, 2019
|
|
Weighted-average remaining lease term
|
|
6.36 years
|
|
Weighted-average discount rate
|
|
4.0
|
%
|
|
|
Operating leases
|
||
|
|
(in thousands)
|
||
Remainder of 2020
|
|
$
|
3,966
|
|
2021
|
|
7,049
|
|
|
2022
|
|
6,233
|
|
|
2023
|
|
5,679
|
|
|
2024
|
|
4,794
|
|
|
Thereafter
|
|
11,371
|
|
|
Total future payments
|
|
39,092
|
|
|
Less: amounts representing interest
|
|
4,453
|
|
|
Present value of lease payments
|
|
$
|
34,639
|
|
|
December 31, 2019
|
|
June 30, 2019
|
||||
|
Network1
|
||||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Prepaid expenses and other current assets
|
$
|
723
|
|
|
$
|
761
|
|
Other non-current assets
|
$
|
4,962
|
|
|
$
|
5,219
|
|
Liabilities
|
|
|
|
||||
Accrued expenses and other current liabilities
|
$
|
723
|
|
|
$
|
761
|
|
Other long-term liabilities
|
$
|
4,962
|
|
|
$
|
5,219
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Worldwide Barcode, Networking & Security
|
•
|
Worldwide Communications & Services
|
|
Quarter ended December 31,
|
|
|
|
% Change, Constant Currency, Excluding Planned Divestitures and Acquisitions (a)
|
||||||||||||
Net Sales by Segment:
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|||||||||
|
(in thousands)
|
|
|
|
|
||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
686,237
|
|
|
$
|
701,639
|
|
|
$
|
(15,402
|
)
|
|
(2.2
|
)%
|
|
(0.4
|
)%
|
Worldwide Communications & Services
|
303,266
|
|
|
344,382
|
|
|
(41,116
|
)
|
|
(11.9
|
)%
|
|
(14.0
|
)%
|
|||
Total net sales
|
$
|
989,503
|
|
|
$
|
1,046,021
|
|
|
$
|
(56,518
|
)
|
|
(5.4
|
)%
|
|
(5.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six months ended December 31,
|
|
|
|
% Change, Constant Currency, Excluding Planned Divestitures and Acquisitions (a)
|
||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|||||||||||
Worldwide Barcode, Networking & Security
|
$
|
1,384,028
|
|
|
$
|
1,356,752
|
|
|
$
|
27,276
|
|
|
2.0
|
%
|
|
3.8
|
%
|
Worldwide Communications & Services
|
612,402
|
|
|
662,169
|
|
|
(49,767
|
)
|
|
(7.5
|
)%
|
|
(10.3
|
)%
|
|||
Total net sales
|
$
|
1,996,430
|
|
|
$
|
2,018,921
|
|
|
$
|
(22,491
|
)
|
|
(1.1
|
)%
|
|
(1.0
|
)%
|
|
Quarter ended December 31,
|
|
|
|
% Change, Constant Currency, Excluding Planned Divestitures and Acquisitions (a)
|
||||||||||||
Net Sales by Geography:
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|||||||||
|
(in thousands)
|
|
|
|
|
||||||||||||
United States and Canada
|
$
|
736,129
|
|
|
$
|
779,455
|
|
|
$
|
(43,326
|
)
|
|
(5.6
|
)%
|
|
(5.8
|
)%
|
International
|
$
|
253,374
|
|
|
$
|
266,566
|
|
|
(13,192
|
)
|
|
(4.9
|
)%
|
|
2.1
|
%
|
|
Total net sales
|
$
|
989,503
|
|
|
$
|
1,046,021
|
|
|
$
|
(56,518
|
)
|
|
(5.4
|
)%
|
|
(5.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six months ended December 31,
|
|
|
|
% Change, Constant Currency, Excluding Acquisitions (a)
|
||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|||||||||
|
(in thousands)
|
|
|
|
|
||||||||||||
United States and Canada
|
$
|
1,505,766
|
|
|
$
|
1,517,412
|
|
|
$
|
(11,646
|
)
|
|
(0.8
|
)%
|
|
(1.1
|
)%
|
International
|
490,664
|
|
|
501,509
|
|
|
(10,845
|
)
|
|
(2.2
|
)%
|
|
0.1
|
%
|
|||
Total net sales
|
$
|
1,996,430
|
|
|
$
|
2,018,921
|
|
|
$
|
(22,491
|
)
|
|
(1.1
|
)%
|
|
(1.0
|
)%
|
|
Quarter ended December 31,
|
|
|
|
|
|
% of Net Sales December 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
60,136
|
|
|
$
|
64,825
|
|
|
$
|
(4,689
|
)
|
|
(7.2
|
)%
|
|
8.8
|
%
|
|
9.2
|
%
|
Worldwide Communications & Services
|
53,748
|
|
|
55,653
|
|
|
(1,905
|
)
|
|
(3.4
|
)%
|
|
17.7
|
%
|
|
16.2
|
%
|
|||
Gross profit
|
$
|
113,884
|
|
|
$
|
120,478
|
|
|
$
|
(6,594
|
)
|
|
(5.5
|
)%
|
|
11.5
|
%
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Six months ended December 31,
|
|
|
|
|
|
% of Net Sales December 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
118,406
|
|
|
$
|
126,776
|
|
|
$
|
(8,370
|
)
|
|
(6.6
|
)%
|
|
8.6
|
%
|
|
9.3
|
%
|
Worldwide Communications & Services
|
107,577
|
|
|
105,916
|
|
|
1,661
|
|
|
1.6
|
%
|
|
17.6
|
%
|
|
16.0
|
%
|
|||
Gross profit
|
$
|
225,983
|
|
|
$
|
232,692
|
|
|
$
|
(6,709
|
)
|
|
(2.9
|
)%
|
|
11.3
|
%
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended December 31,
|
|
|
|
|
|
% of Net Sales December 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Selling, general and administrative expenses
|
$
|
83,121
|
|
|
$
|
80,950
|
|
|
$
|
2,171
|
|
|
2.7
|
%
|
|
8.4
|
%
|
|
7.7
|
%
|
Depreciation expense
|
3,459
|
|
|
3,272
|
|
|
187
|
|
|
5.7
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|||
Intangible amortization expense
|
5,631
|
|
|
4,700
|
|
|
931
|
|
|
19.8
|
%
|
|
0.6
|
%
|
|
0.4
|
%
|
|||
Change in fair value of contingent consideration
|
3,176
|
|
|
1,850
|
|
|
1,326
|
|
|
71.7
|
%
|
|
0.3
|
%
|
|
0.2
|
%
|
|||
Operating expenses
|
$
|
95,387
|
|
|
$
|
90,772
|
|
|
$
|
4,615
|
|
|
5.1
|
%
|
|
9.6
|
%
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Six months ended December 31,
|
|
|
|
|
|
% of Net Sales December 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative expenses
|
$
|
165,632
|
|
|
$
|
158,880
|
|
|
$
|
6,752
|
|
|
4.2
|
%
|
|
8.3
|
%
|
|
7.9
|
%
|
Depreciation expense
|
7,008
|
|
|
6,538
|
|
|
470
|
|
|
7.2
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
|||
Intangible amortization expense
|
10,593
|
|
|
9,703
|
|
|
890
|
|
|
9.2
|
%
|
|
0.5
|
%
|
|
0.5
|
%
|
|||
Change in fair value of contingent consideration
|
5,649
|
|
|
6,434
|
|
|
(785
|
)
|
|
(12.2
|
)%
|
|
0.3
|
%
|
|
0.3
|
%
|
|||
Operating expenses
|
$
|
188,882
|
|
|
$
|
181,555
|
|
|
$
|
7,327
|
|
|
4.0
|
%
|
|
9.5
|
%
|
|
9.0
|
%
|
|
Quarter ended December 31,
|
|
|
|
|
|
% of Net Sales December 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
14,076
|
|
|
$
|
18,581
|
|
|
$
|
(4,505
|
)
|
|
(24.2
|
)%
|
|
2.1
|
%
|
|
2.6
|
%
|
Worldwide Communications & Services
|
5,572
|
|
|
11,539
|
|
|
(5,967
|
)
|
|
(51.7
|
)%
|
|
1.8
|
%
|
|
3.4
|
%
|
|||
Corporate
|
(1,151
|
)
|
|
(414
|
)
|
|
(737
|
)
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
|||
Operating income
|
$
|
18,497
|
|
|
$
|
29,706
|
|
|
$
|
(11,209
|
)
|
|
(37.7
|
)%
|
|
1.9
|
%
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Six months ended December 31,
|
|
|
|
|
|
% of Net Sales December 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
26,068
|
|
|
$
|
32,112
|
|
|
$
|
(6,044
|
)
|
|
(18.8
|
)%
|
|
1.9
|
%
|
|
2.4
|
%
|
Worldwide Communications & Services
|
12,942
|
|
|
19,794
|
|
|
(6,852
|
)
|
|
(34.6
|
)%
|
|
2.1
|
%
|
|
3.0
|
%
|
|||
Corporate
|
(1,909
|
)
|
|
(769
|
)
|
|
(1,140
|
)
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
|||
Operating income
|
$
|
37,101
|
|
|
$
|
51,137
|
|
|
$
|
(14,036
|
)
|
|
(27.4
|
)%
|
|
1.9
|
%
|
|
2.5
|
%
|
Net Sales by Segment:
|
|
|
|
|
|
|||||||||
|
Quarter ended December 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Worldwide Barcode, Networking & Security:
|
in thousands
|
|
|
|
|
|||||||||
Net sales, reported
|
$
|
686,237
|
|
|
$
|
701,639
|
|
|
$
|
(15,402
|
)
|
|
(2.2
|
)%
|
Planned Divestitures
|
(111,237
|
)
|
|
(122,326
|
)
|
|
|
|
|
|||||
Non-GAAP net sales, excluding Planned Divestitures
|
575,000
|
|
|
579,313
|
|
|
(4,313
|
)
|
|
(0.7
|
)%
|
|||
Foreign exchange impact(a)
|
1,799
|
|
|
—
|
|
|
|
|
|
|||||
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions
|
$
|
576,799
|
|
|
$
|
579,313
|
|
|
$
|
(2,514
|
)
|
|
(0.4
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Worldwide Communications & Services:
|
|
|
|
|
|
|||||||||
Net sales, reported
|
$
|
303,266
|
|
|
$
|
344,382
|
|
|
$
|
(41,116
|
)
|
|
(11.9
|
)%
|
Planned Divestitures
|
(44,530
|
)
|
|
(51,285
|
)
|
|
|
|
|
|||||
Non-GAAP net sales, excluding Planned Divestitures
|
258,736
|
|
|
293,097
|
|
|
(34,361
|
)
|
|
(11.7
|
)%
|
|||
Foreign exchange impact(a)
|
5,187
|
|
|
—
|
|
|
|
|
|
|||||
Less: Acquisitions
|
(12,036
|
)
|
|
(98
|
)
|
|
|
|
|
|||||
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions
|
$
|
251,887
|
|
|
$
|
292,999
|
|
|
$
|
(41,112
|
)
|
|
(14.0
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Consolidated:
|
|
|
|
|
|
|
|
|||||||
Net sales, reported
|
$
|
989,503
|
|
|
$
|
1,046,021
|
|
|
$
|
(56,518
|
)
|
|
(5.4
|
)%
|
Planned Divestitures
|
(155,767
|
)
|
|
(173,611
|
)
|
|
|
|
|
|||||
Non-GAAP net sales, excluding Planned Divestitures
|
833,736
|
|
|
872,410
|
|
|
(38,674
|
)
|
|
(4.4
|
)%
|
|||
Foreign exchange impact(a)
|
6,986
|
|
|
—
|
|
|
|
|
|
|||||
Less: Acquisitions
|
(12,036
|
)
|
|
(98
|
)
|
|
|
|
|
|||||
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions
|
$
|
828,686
|
|
|
$
|
872,312
|
|
|
$
|
(43,626
|
)
|
|
(5.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net Sales by Segment:
|
|
|
|
|
|
|||||||||
|
Six months ended December 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Worldwide Barcode, Networking & Security:
|
(in thousands)
|
|
|
|
|
|||||||||
Net sales, as reported
|
$
|
1,384,028
|
|
|
$
|
1,356,752
|
|
|
$
|
27,276
|
|
|
2.0
|
%
|
Planned Divestitures
|
(227,840
|
)
|
|
(240,693
|
)
|
|
|
|
|
|||||
Non-GAAP net sales, excluding Planned Divestitures
|
1,156,188
|
|
|
1,116,059
|
|
|
40,129
|
|
|
3.6
|
%
|
|||
Foreign exchange impact (a)
|
1,894
|
|
|
—
|
|
|
|
|
|
|||||
Less: Acquisitions
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions
|
$
|
1,158,082
|
|
|
$
|
1,116,059
|
|
|
$
|
42,023
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Worldwide Communications & Services:
|
|
|
|
|
|
|
|
|||||||
Net sales, as reported
|
$
|
612,402
|
|
|
$
|
662,169
|
|
|
$
|
(49,767
|
)
|
|
(7.5
|
)%
|
Planned Divestitures
|
(83,442
|
)
|
|
(92,564
|
)
|
|
|
|
|
|||||
Non-GAAP net sales, excluding Planned Divestitures
|
528,960
|
|
|
569,605
|
|
|
(40,645
|
)
|
|
(7.1
|
)%
|
|||
Foreign exchange impact (a)
|
5,431
|
|
|
—
|
|
|
|
|
|
|||||
Less: Acquisitions
|
(24,193
|
)
|
|
(1,062
|
)
|
|
|
|
|
|||||
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions
|
$
|
510,198
|
|
|
$
|
568,543
|
|
|
$
|
(58,345
|
)
|
|
(10.3
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Consolidated:
|
|
|
|
|
|
|
|
|||||||
Net sales, as reported
|
$
|
1,996,430
|
|
|
$
|
2,018,921
|
|
|
$
|
(22,491
|
)
|
|
(1.1
|
)%
|
Planned Divestitures
|
(311,282
|
)
|
|
(333,257
|
)
|
|
|
|
|
|||||
Non-GAAP net sales, excluding Planned Divestitures
|
1,685,148
|
|
|
1,685,664
|
|
|
(516
|
)
|
|
—
|
%
|
|||
Foreign exchange impact (a)
|
7,325
|
|
|
—
|
|
|
|
|
|
|||||
Less: Acquisitions
|
(24,193
|
)
|
|
(1,062
|
)
|
|
|
|
|
|||||
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions
|
$
|
1,668,280
|
|
|
$
|
1,684,602
|
|
|
$
|
(16,322
|
)
|
|
(1.0
|
)%
|
|
|
|
|
|
|
|
|
Net Sales by Geography:
|
|
|
|
|
|
|||||||||
|
Quarter ended December 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
United States and Canada:
|
(in thousands)
|
|
|
|
|
|||||||||
Net sales, as reported
|
$
|
736,129
|
|
|
$
|
779,455
|
|
|
$
|
(43,326
|
)
|
|
(5.6
|
)%
|
Less: Acquisitions
|
(2,312
|
)
|
|
(98
|
)
|
|
|
|
|
|||||
Non-GAAP Net sales, excluding acquisitions
|
$
|
733,817
|
|
|
$
|
779,357
|
|
|
$
|
(45,540
|
)
|
|
(5.8
|
)%
|
|
|
|
|
|
|
|
|
|||||||
International:
|
|
|
|
|
|
|
|
|||||||
Net sales, as reported
|
$
|
253,374
|
|
|
$
|
266,566
|
|
|
$
|
(13,192
|
)
|
|
(4.9
|
)%
|
Planned Divestitures
|
(155,767
|
)
|
|
(173,611
|
)
|
|
|
|
|
|||||
Non-GAAP net sales, excluding Planned Divestitures
|
97,607
|
|
|
92,955
|
|
|
4,652
|
|
|
5.0
|
%
|
|||
Foreign exchange impact (a)
|
6,986
|
|
|
—
|
|
|
|
|
|
|||||
Less: Acquisitions
|
(9,724
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Income by Segment:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Quarter ended December 31,
|
|
|
|
|
|
% of Net Sales December 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
Worldwide Barcode, Networking & Security:
|
(in thousands)
|
|
|
|
|
|
|
|
|
|||||||||||
GAAP operating income
|
$
|
14,076
|
|
|
$
|
18,581
|
|
|
$
|
(4,505
|
)
|
|
(24.2
|
)%
|
|
2.1
|
%
|
|
2.6
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
1,968
|
|
|
1,854
|
|
|
114
|
|
|
|
|
|
|
|
||||||
Restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
||||||
Planned Divestitures
|
(735
|
)
|
|
(2,292
|
)
|
|
1,557
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
15,309
|
|
|
$
|
18,143
|
|
|
$
|
(2,834
|
)
|
|
(15.6
|
)%
|
|
2.7
|
%
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Worldwide Communications & Services:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
5,572
|
|
|
$
|
11,539
|
|
|
$
|
(5,967
|
)
|
|
(51.7
|
)%
|
|
1.8
|
%
|
|
3.4
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
3,664
|
|
|
2,846
|
|
|
818
|
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
3,176
|
|
|
1,850
|
|
|
1,326
|
|
|
|
|
|
|
|
||||||
Restructuring costs
|
490
|
|
|
—
|
|
|
490
|
|
|
|
|
|
|
|
||||||
Planned Divestitures
|
364
|
|
|
190
|
|
|
174
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
13,266
|
|
|
$
|
16,425
|
|
|
$
|
(3,159
|
)
|
|
(19.2
|
)%
|
|
5.1
|
%
|
|
5.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
(1,151
|
)
|
|
$
|
(414
|
)
|
|
$
|
(737
|
)
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Acquisition and divestiture costs
|
1,151
|
|
|
414
|
|
|
737
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
18,497
|
|
|
$
|
29,706
|
|
|
$
|
(11,209
|
)
|
|
(37.7
|
)%
|
|
1.9
|
%
|
|
2.8
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
5,631
|
|
|
4,700
|
|
|
931
|
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
3,176
|
|
|
1,850
|
|
|
1,326
|
|
|
|
|
|
|
|
||||||
Acquisition and divestiture costs
|
1,151
|
|
|
414
|
|
|
737
|
|
|
|
|
|
|
|
||||||
Restructuring costs
|
490
|
|
|
—
|
|
|
490
|
|
|
|
|
|
|
|
||||||
Planned Divestitures
|
(371
|
)
|
|
(2,102
|
)
|
|
1,731
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
28,574
|
|
|
$
|
34,568
|
|
|
$
|
(5,994
|
)
|
|
(17.3
|
)%
|
|
3.4
|
%
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Income by Segment:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Six months ended December 31,
|
|
|
|
|
|
% of Net Sales December 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
Worldwide Barcode, Networking & Security:
|
(in thousands)
|
|
|
|
|
|
|
|
|
|||||||||||
GAAP operating income
|
$
|
26,068
|
|
|
$
|
32,112
|
|
|
$
|
(6,044
|
)
|
|
(18.8
|
)%
|
|
1.9
|
%
|
|
2.4
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
3,935
|
|
|
4,163
|
|
|
(228
|
)
|
|
|
|
|
|
|
||||||
Restructuring Costs
|
—
|
|
|
708
|
|
|
(708
|
)
|
|
|
|
|
|
|
||||||
Planned Divestitures
|
(1,634
|
)
|
|
(2,769
|
)
|
|
1,135
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
28,369
|
|
|
$
|
34,214
|
|
|
$
|
(5,845
|
)
|
|
(17.1
|
)%
|
|
2.5
|
%
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Worldwide Communications & Services:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
12,942
|
|
|
$
|
19,794
|
|
|
$
|
(6,852
|
)
|
|
(34.6
|
)%
|
|
2.1
|
%
|
|
3.0
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
6,658
|
|
|
5,540
|
|
|
1,118
|
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
5,649
|
|
|
6,434
|
|
|
(785
|
)
|
|
|
|
|
|
|
||||||
Restructuring costs
|
490
|
|
|
620
|
|
|
(130
|
)
|
|
|
|
|
|
|
||||||
Planned Divestitures
|
1,770
|
|
|
619
|
|
|
1,151
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
27,509
|
|
|
$
|
33,007
|
|
|
$
|
(5,498
|
)
|
|
(16.7
|
)%
|
|
5.2
|
%
|
|
5.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
(1,909
|
)
|
|
$
|
(769
|
)
|
|
$
|
(1,140
|
)
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Acquisition and divestiture costs
|
1,909
|
|
|
769
|
|
|
1,140
|
|
|
|
|
|
|
|
||||||
Restructuring costs
|
169
|
|
|
—
|
|
|
169
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
169
|
|
|
$
|
—
|
|
|
$
|
169
|
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
37,101
|
|
|
$
|
51,137
|
|
|
$
|
(14,036
|
)
|
|
(27.4
|
)%
|
|
1.9
|
%
|
|
2.5
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
10,593
|
|
|
9,703
|
|
|
890
|
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
5,649
|
|
|
6,434
|
|
|
(785
|
)
|
|
|
|
|
|
|
||||||
Acquisition and divestiture costs
|
1,909
|
|
|
769
|
|
|
1,140
|
|
|
|
|
|
|
|
||||||
Restructuring costs
|
659
|
|
|
1,328
|
|
|
(669
|
)
|
|
|
|
|
|
|
||||||
Planned Divestitures
|
136
|
|
|
(2,150
|
)
|
|
2,286
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
56,047
|
|
|
67,221
|
|
|
$
|
(11,174
|
)
|
|
(16.6
|
)%
|
|
3.3
|
%
|
|
4.0
|
%
|
|
Quarter ended December 31,
|
||||
|
2019
|
|
2018
|
||
Return on invested capital ratio, annualized(a)
|
9.9
|
%
|
|
12.7
|
%
|
(a)
|
The annualized EBITDA amount is divided by days in the quarter times 365 days per year, or 366 days for leap year. There were 92 days in the current and prior-year quarter.
|
|
Quarter ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Reconciliation of net income to EBITDA:
|
|
||||||
Net income (GAAP)
|
$
|
11,366
|
|
|
$
|
19,982
|
|
Plus: Interest expense
|
3,751
|
|
|
3,119
|
|
||
Plus: Income taxes
|
4,354
|
|
|
6,668
|
|
||
Plus: Depreciation and amortization
|
9,700
|
|
|
8,935
|
|
||
EBITDA (non-GAAP)
|
29,171
|
|
|
38,704
|
|
||
Plus: Change in fair value of contingent consideration
|
3,176
|
|
|
1,850
|
|
||
Plus: Acquisition and divestiture costs (a)
|
1,151
|
|
|
414
|
|
||
Plus: Restructuring costs
|
490
|
|
|
—
|
|
||
Plus: Impact of Planned Divestitures
|
(870
|
)
|
|
(1,864
|
)
|
||
Adjusted EBITDA (numerator for ROIC) (non-GAAP)
|
$
|
33,118
|
|
|
$
|
39,104
|
|
|
Quarter ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Invested capital calculations:
|
|
||||||
Equity – beginning of the quarter
|
$
|
905,751
|
|
|
$
|
877,897
|
|
Equity – end of the quarter
|
927,580
|
|
|
899,503
|
|
||
Plus: Change in fair value of contingent consideration, net of tax
|
2,401
|
|
|
1,408
|
|
||
Plus: Acquisition and divestiture costs (a)
|
1,151
|
|
|
414
|
|
||
Plus: Restructuring, net of tax
|
378
|
|
|
—
|
|
||
Plus: Impact of Planned Divestitures, net of tax
|
(121
|
)
|
|
(650
|
)
|
||
Average equity
|
918,570
|
|
|
889,286
|
|
||
Average funded debt (b)
|
411,614
|
|
|
333,138
|
|
||
Invested capital (denominator for ROIC) (non-GAAP)
|
$
|
1,330,184
|
|
|
$
|
1,222,424
|
|
(a)
|
Acquisition and divestiture costs are generally nondeductible for tax purposes.
|
(b)
|
Average funded debt is calculated as the average daily amounts outstanding on our current and long-term interest-bearing debt.
|
|
Six months ended
|
||||||
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash provided by (used in):
|
(in thousands)
|
||||||
Operating activities
|
$
|
118,060
|
|
|
$
|
(51,770
|
)
|
Investing activities
|
(51,671
|
)
|
|
(37,963
|
)
|
||
Financing activities
|
(47,947
|
)
|
|
86,831
|
|
||
Effect of exchange rate change on cash and cash equivalents
|
(255
|
)
|
|
121
|
|
||
Increase (decrease) in cash and cash equivalents
|
$
|
18,187
|
|
|
$
|
(2,781
|
)
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total number of shares purchased(a)
|
|
Average price paid per share
|
|
Total number of shares purchased as part of the publicly announced plan or program
|
|
Approximate dollar value of shares that may yet be purchased under the plan or program(b)
|
||||||
October 1, 2019 through October 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
November 1, 2019 through November 30, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
December 1, 2019 through December 31, 2019
|
|
36,393
|
|
|
$
|
36.85
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
|
36,393
|
|
|
$
|
36.85
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
Description
|
|
|
10.1
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101
|
The following materials from our Quarterly Report on Form 10-Q for the quarter ended December 31, 2019, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at December 31, 2019 and June 30, 2019; (ii) the Condensed Consolidated Income Statements for the quarter and six months ended December 31, 2019 and 2018; (iii) the Condensed Consolidated Statements of Comprehensive Income for the quarter and six months ended December 31, 2019 and 2018; (iv) the Condensed Consolidated Statements of Shareholder's Equity at December 31, 2019 and 2018; (v) the Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2019 and 2018; and (vi) the Notes to the Condensed Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
ScanSource, Inc.
|
|
|
|
|
|
/s/ MICHAEL L. BAUR
|
|
|
Michael L. Baur
|
Date:
|
February 4, 2020
|
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
|
/s/ GERALD LYONS
|
|
|
Gerald Lyons
|
Date:
|
February 4, 2020
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
1 Year ScanSource Chart |
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