0000918965false00009189652024-06-302024-06-30

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): August 27, 2024

 ScanSource, Inc.
(Exact name of registrant as specified in its charter)
SC00-26926 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)
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, no par valueSCSCNASDAQ Global Select Market
 
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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐   


Item 2.02. Results of Operations and Financial Condition

On August 27, 2024, ScanSource, Inc. (the "Company") issued a press release announcing its financial results for its fourth quarter and fiscal year ended June 30, 2024. A copy of the press release and accompanying Earnings Infographic are attached as Exhibits 99.1 and 99.2 hereto and incorporated herein by reference and also made available through the Company’s website at www.scansource.com. An updated investor presentation will be made available on the Company's website within approximately two weeks.

The information in Item 2.02 of this Report, including the Exhibits 99.1 and 99.2 hereto, 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 other 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 August 27, 2024. The information contained in the attached exhibit is unaudited and should be read in conjunction with the Company’s annual and quarterly reports filed with the Securities and Exchange Commission.

99.2 – Earnings Infographic for the financial results conference call held on August 27, 2024.  The information contained in the attached exhibit is unaudited and should be read in conjunction with the Company’s annual and quarterly reports filed with the Securities and Exchange Commission.

Exhibit
Number		Description
99.1
99.2
104Cover Page Interactive Data File (embedded within the Inline XBRL document)

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:August 27, 2024    /s/ STEVE JONES
     Steve Jones
     Senior Executive Vice President and Chief Financial Officer


Exhibit 99.1

FOR IMMEDIATE RELEASE
Contact:  
Steve Jones Mary M. Gentry
Senior EVP, Chief Financial OfficerSVP, Treasurer and Investor Relations
ScanSource, Inc. ScanSource, Inc.
(864) 286-4302 (864) 286-4892

SCANSOURCE REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS
Achieves Strong Cash Flow and Disciplined Capital Allocation

GREENVILLE, SC -- August 27, 2024 -- ScanSource, Inc. (NASDAQ: SCSC), a leading hybrid distributor connecting devices to the cloud, today announced financial results for the fourth quarter and fiscal year ended June 30, 2024. All results in this release reflect continuing operations only unless otherwise noted.

Fourth Quarter SummaryFiscal Year Summary
Q4 FY24Q4 FY23ChangeFY24FY23Change
(in thousands, except percentages and per share data)
Select reported measures:
Net sales$746,113 $947,149 -21.2%$3,259,809 $3,787,721 -13.9%
Gross profit$97,315 $108,659 -10.4%$399,052 $449,239 -11.2%
Gross profit margin %13.04 %11.47 %157bp12.24 %11.86 %38bp
Operating income$21,871 $27,289 -19.9%$90,324 $135,886 -33.5%
GAAP net income$16,097 $17,095 -5.8%$77,060 $88,092 -12.5%
GAAP diluted EPS$0.64 $0.68 -5.9%$3.06 $3.47 -11.8%
Operating cash flow $54,738 $(15,261)n/m$371,647 $(35,769)n/m
Select Non-GAAP measures*:
Adjusted EBITDA$34,181 $40,199 -15.0%$140,654 $179,943 -21.8%
Adjusted EBITDA margin %4.58 %4.24 %34bp4.31 %4.75 %-44bp
Non-GAAP net income$19,921 $19,213 3.7%$77,670 $97,688 -20.5%
Non-GAAP diluted EPS$0.80 $0.76 5.3%$3.08 $3.85 -20.0%
Free cash flow $53,468 $(18,692)n/m$363,092 $(45,748)n/m
n/m - not meaningful
* Represents non-GAAP financial measures. For more information and a reconciliation to the most directly comparable GAAP financial measure, see "Non-GAAP Financial Information" below as well as the accompanying Supplementary Information.

"Our results for the year reflect a soft demand environment; however, we delivered strong margins and robust cash flow," said Mike Baur, Chair and CEO, ScanSource, Inc. "We are executing well on our capital allocation plan to invest in strategic acquisitions and share repurchases. Earlier this month, we announced two acquisitions of higher margin, recurring revenue businesses and are excited to welcome the Resourcive and Advantix teams to ScanSource."

Quarterly Results

Net sales for the fourth quarter of fiscal year 2024 totaled $746.1 million, down 21.2% year-over-year. Specialty Technology Solutions net sales for the fourth quarter decreased 13.7% year-over-year to $484.7 million from softer demand in a more cautious technology spending environment. Modern Communications & Cloud net sales for the fourth quarter decreased 32.2% year-over-year to $261.4 million from lower sales volumes in communications hardware and Cisco products. Intelisys net sales for the fourth quarter increased 6.2% year-over-year.

Gross profit for the fourth quarter of fiscal year 2024 decreased 10.4% year-over-year to $97.3 million with a gross profit margin of 13.04% versus 11.47% in the prior-year quarter. The gross profit margin reflects a higher contribution of Intelisys revenue in our overall revenue mix, which is recorded on a net basis and therefore contributes to a higher gross profit margin.
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For the fourth quarter of fiscal year 2024, operating income was $21.9 million compared to $27.3 million in the prior-year quarter. Fourth quarter fiscal year 2024 non-GAAP operating income decreased to $26.0 million, down from $32.8 million for the prior-year quarter.

On a GAAP basis, net income for the fourth quarter of fiscal year 2024 totaled $16.1 million, or $0.64 per diluted share, compared to net income of $17.1 million, or $0.68 per diluted share, for the prior-year quarter. Fourth quarter fiscal year 2024 non-GAAP net income totaled $19.9 million, or $0.80 per diluted share, up from $19.2 million, or $0.76 per diluted share, for the prior-year quarter. Interest expense for the quarter decreased to $2.1 million, down from $5.6 million for the prior-year quarter, reflecting lower borrowings.

On a non-GAAP basis, adjusted EBITDA for the fourth quarter of fiscal year 2024 decreased 15.0% to $34.2 million, or 4.58% of net sales, compared to $40.2 million, or 4.24% of net sales, for the prior-year quarter.

Full-Year Results

For fiscal year 2024, net sales decreased 13.9% to $3.3 billion. Fiscal year 2024 net sales in the Specialty Technology Solutions segment decreased 14.3% to $2.0 billion from softer demand in a more cautious technology spending environment. Fiscal year 2024 net sales in the Modern Communications & Cloud segment decreased 13.4% year-over-year to $1.3 billion from lower sales volumes in communications hardware and Cisco products. The fiscal year 2024 net billings attributable to Intelisys increased to approximately $2.67 billion, and Intelisys net sales for fiscal 2024 increased 6.6% over the prior year.

Gross profit for fiscal year 2024 totaled $399.1 million, down 11.2% year-over-year. The decrease is primarily due to lower sales volume compared to the prior year. Gross profit margin increased to 12.2%, up from 11.9% in the prior year. The gross profit margin reflects a higher contribution of Intelisys revenue in our overall revenue mix, which is recorded on a net basis and therefore contributes to a higher gross profit margin.

For the fiscal year ended June 30, 2024, operating income decreased to $90.3 million from $135.9 million in the prior year. Fiscal year 2024 non-GAAP operating income decreased to $110.4 million down from $151.1 million for the prior year.

On a GAAP basis, net income for the fiscal year ended June 30, 2024 totaled $77.1 million, or $3.06 per diluted share, compared to net income of $88.1 million, or $3.47 per diluted share for the prior year. Fiscal year 2024 non-GAAP net income totaled $77.7 million, or $3.08 per diluted share, compared to $97.7 million, or $3.85 per diluted share for the prior year. Interest expense decreased to $13.0 million, down from $19.8 million for the prior year, reflecting lower borrowings.

Adjusted EBITDA for the fiscal year ended June 30, 2024 decreased to $140.7 million, or 4.31% of net sales, compared to $179.9 million, or 4.75% of net sales, for the prior year.

ScanSource generated $371.6 million of operating cash flow and $363.1 million of free cash flow (non-GAAP) for fiscal year 2024.

Acquisition of Resourcive

On August 8, 2024, ScanSource announced the acquisition of Resourcive, a leading technology advisor. Founded in 2001 in Pelham, NY, Resourcive delivers strategic IT sourcing solutions to the mid-market and enterprise, advising clients on value creation strategies that are enabled by technology. Starting with the acquisition of Resourcive, ScanSource is creating the advisory channel model of the future. This business is separate from ScanSource’s Intelisys business, the industry’s leading technology services distributor. The acquisition closed on August 8, 2024, and the terms of the agreement were not disclosed.

Acquisition of Advantix

On August 15, 2024, ScanSource announced the acquisition of Advantix, a VAR-focused, managed connectivity experience provider specializing in wireless enablement solutions. Founded in 2001 in Frisco, Texas, Advantix allows hardware VARs to expand their mobility solutions and build their recurring revenue business. The Advantix acquisition is the launching point for ScanSource’s new Integrated Solutions Group (ISG). The ISG is focused on developing solutions and services that provide hardware VARs the opportunity to wrap additional value around their hardware offerings. The acquisition closed on August 15, 2024, and the terms of the agreement were not disclosed.


2

Annual Financial Outlook for Fiscal Year 2025

The following guidance is based on ScanSource's current expectations for the full fiscal year ended June 30, 2025.

FY25 Annual Outlook
Net sales $3.1 billion to $3.5 billion
Adjusted EBITDA (non-GAAP)$140 million to $160 million
Free cash flow (non-GAAP)At least $70 million

Adjusted EBITDA is a non-GAAP measure, which excludes estimates for amortization of intangible assets, depreciation expense, and non-cash shared-based compensation expense. Free cash flow is a non-GAAP measure, which excludes the effect of estimated capital expenditures from estimated operating cash flow. ScanSource’s outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic investments, or other significant transactions that may be completed after the date hereof. These statements are forward-looking, and actual results may differ materially. ScanSource does not provide a reconciliation for its non-GAAP outlook on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort.
Webcast Details and Earnings Infographic
At approximately 8:45 a.m. ET today, an Earnings Infographic, as a supplement to this press release and the earnings conference call, will be available on ScanSource's website, www.scansource.com (Investor Relations section). ScanSource will present additional information about its financial results and business in a conference call today, August 27, 2024, at 10:30 a.m. ET. A webcast of the call 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 “forward-looking” statements, including ScanSource's FY25 annual outlook, which involve risks and uncertainties, many of which are beyond ScanSource's control. No undue reliance should be placed on such statements, as any number of factors could cause actual results to differ materially from anticipated or forecasted results, including, but not limited to, the following factors, which are neither presented in order of importance nor weighted: macroeconomic conditions, including potential prolonged economic weakness, inflation, the failure to manage and implement ScanSource's growth strategy, credit risks involving ScanSource's larger customers and suppliers, changes in interest and exchange rates and regulatory regimes impacting ScanSource's international operations, risk to the business from a cyberattack, a failure of IT systems, failure to hire and retain quality employees, loss of ScanSource's major customers, relationships with key suppliers and customers or a termination or a modification of the terms under which it operates with these key suppliers and customers, changes in ScanSource's operating strategy, and other factors set forth in the "Risk Factors" contained in ScanSource's annual report on Form 10-K for the year ended June 30, 2024. Except as may be required by law, ScanSource expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release or otherwise.

Non-GAAP Financial Information

In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles ("GAAP"), ScanSource also discloses certain non-GAAP financial measures, which are summarized below. Non-GAAP financial measures are used to understand and evaluate performance, including comparisons from period to period. Non-GAAP results exclude items such as amortization of intangible assets related to acquisitions, acquisition and divestiture costs, gain on sale of business, and restructuring costs and include other non-GAAP adjustments.

Net sales on a constant currency basis excluding acquisitions and divestitures to calculate organic growth ("non-GAAP net sales"): ScanSource discloses the percentage change in net sales excluding the translation impact from changes in foreign currency exchange rates between reporting periods and excluding the net sales from acquisitions and divestitures prior to the first full year from the transaction date. This measure enhances the comparability between periods to help analyze underlying trends on an organic basis.

3

Adjusted earnings before interest expense, income taxes, depreciation, and amortization (“Adjusted EBITDA”): Adjusted EBITDA starts with net income and adds back interest expense, income tax expense, depreciation expense, amortization of intangible assets, changes in fair value of contingent considerations, and other non-GAAP adjustments, including acquisition and divestiture costs, gain/loss on sale of business, restructuring costs, cyberattack restoration costs, tax recovery, and non-cash share-based compensation expense. Since Adjusted EBITDA excludes some non-cash costs of investing in ScanSource’s business and people, management believes that Adjusted EBITDA shows the profitability from the business operations more clearly. The presentation for Adjusted EBITDA for all periods presented has been recast to reflect this change to enhance comparability between periods. The Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of net sales.

Adjusted return on invested capital ("Adjusted ROIC"): Adjusted ROIC assists management in comparing ScanSource'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. Management believes the calculation of Adjusted ROIC provides useful information to investors and is an additional relevant comparison of its performance. Adjusted ROIC is calculated as Adjusted EBITDA over invested capital. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period. Management believes the calculation of Adjusted ROIC provides useful information to investors and is an additional relevant comparison of ScanSource's performance during the year.

Free cash flow: ScanSource presents free cash flow as it is a measure used by management to measure our business. ScanSource believes this measure provides more information regarding liquidity and capital resources. Free cash flow is defined as cash flows from operating activities less capital expenditures.

Net debt: Net debt includes total balance sheet debt less cash and cash equivalents. ScanSource believes this measure is useful in assessing its borrowing capacity.

Additional Non-GAAP Metrics: To evaluate current period performance on a more consistent basis with prior periods, ScanSource discloses non-GAAP SG&A expenses, non-GAAP operating income, non-GAAP pre-tax income, non-GAAP net income, and non-GAAP diluted earnings per share (non-GAAP diluted EPS). These non-GAAP results exclude amortization of intangible assets related to acquisitions, acquisition and divestiture costs, gain on sale of business, restructuring costs, and other non-GAAP adjustments. These metrics include the translation impact of changes in foreign currency exchange rates. Non-GAAP metrics are useful in assessing and understanding ScanSource's performance especially when comparing results with previous periods or forecasting performance for future periods.

These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that ScanSource 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 ScanSource's non-GAAP financial information to GAAP is set forth in the Supplementary Information (Unaudited) below.

About ScanSource, Inc.

ScanSource, Inc. (NASDAQ: SCSC) is a leading hybrid distributor connecting devices to the cloud and accelerating growth for customers across hardware, software as a service (SaaS), connectivity and cloud. ScanSource enables customers to deliver solutions for their end users to address changing buying and consumption patterns. ScanSource sells through multiple, specialized routes-to-market with hardware, SaaS, connectivity and cloud services offerings from the world’s leading suppliers of mobility and barcode, point-of-sale (POS), payments, networking, physical security, unified communications and collaboration, telecom and cloud services. Founded in 1992 and headquartered in Greenville, South Carolina, ScanSource was named one of the 2024 Best Places to Work in South Carolina and on FORTUNE magazine’s 2024 List of World’s Most Admired Companies. ScanSource ranks #817 on the Fortune 1000. For more information, visit www.scansource.com.
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SCANSOURCE REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS

ScanSource, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share data)
June 30, 2024*June 30, 2023*
Assets
Current assets:
Cash and cash equivalents$185,460 $36,178 
Accounts receivable, less allowance of $20,684 at June 30, 2024
and $15,480 at June 30, 2023
581,523 753,236 
Inventories512,634 757,574 
Prepaid expenses and other current assets125,082 110,087 
Total current assets1,404,699 1,657,075 
Property and equipment, net33,501 37,379 
Goodwill206,301 216,706 
Identifiable intangible assets, net37,634 68,495 
Deferred income taxes19,902 17,764 
Other non-current assets76,995 70,750 
Total assets$1,779,032 $2,068,169 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$587,984 $691,119 
Accrued expenses and other current liabilities65,616 78,892 
Income taxes payable7,895 9,875 
Current portion of long-term debt7,857 6,915 
Total current liabilities669,352 786,801 
Deferred income taxes— 3,816 
Long-term debt, net of current portion136,149 144,006 
Borrowings under revolving credit facility50 178,980 
Other long-term liabilities49,226 49,268 
Total liabilities854,777 1,162,871 
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, 24,243,848 and 24,844,203 shares issued and outstanding at June 30, 2024 and June 30, 2023, respectively
26,370 58,241 
Retained earnings1,013,738 936,678 
Accumulated other comprehensive loss(115,853)(89,621)
Total shareholders’ equity924,255 905,298 
Total liabilities and shareholders’ equity$1,779,032 $2,068,169 
*Derived from audited financial statements.
5
SCANSOURCE REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS
ScanSource, Inc. and Subsidiaries
Condensed Consolidated Income Statements (Unaudited)
(in thousands, except per share data)
 Quarter ended June 30, 2024Fiscal Year Ended June 30,
 202420232024*2023*
Net sales$746,113 $947,149 $3,259,809 $3,787,721 
Cost of goods sold648,798 838,490 2,860,757 3,338,482 
Gross profit97,315 108,659 399,052 449,239 
Selling, general and administrative expenses68,498 74,358 277,428 285,695 
Depreciation expense2,770 2,827 11,219 10,912 
Intangible amortization expense3,741 4,185 15,723 16,746 
Restructuring and other charges435 — 4,358 — 
Operating income21,871 27,289 90,324 135,886 
Interest expense2,084 5,564 13,031 19,786 
Interest income(3,285)(2,085)(9,381)(7,414)
Loss (gain) on sale of business378 — (14,155)— 
Other expense, net(3)348 988 1,664 
Income before income taxes22,697 23,462 99,841 121,850 
Provision for income taxes6,600 6,367 22,781 33,758 
Net income from continuing operations16,097 17,095 77,060 88,092 
Net income from discontinued operations— 1,717 — 1,717 
Net income$16,097 $18,812 $77,060 $89,809 
Per share data:
Net income from continuing operations per common share, basic$0.66 $0.69 $3.10 $3.50 
Net income from discontinued operations per common share, basic— 0.07 — 0.07 
Net income per common share, basic$0.66 $0.76 $3.10 $3.57 
Weighted-average shares outstanding, basic24,524 24,883 24,868 25,142 
Net income from continuing operations per common share, diluted$0.64 $0.68 $3.06 $3.47 
Net income from discontinued operations per common share, diluted— 0.07 — 0.07 
Net income per common share, diluted$0.64 $0.75 $3.06 $3.54 
Weighted-average shares outstanding, diluted25,046 25,139 25,222 25,362 
*Derived from audited financial statements.


6
SCANSOURCE REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS
ScanSource, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Quarter ended June 30,Fiscal Year Ended June 30,
202420232024*2023*
Cash flows from operating activities:
Net income$16,097 $17,095 $77,060 $88,092 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gain on sale of business378 — (14,155)— 
Depreciation and amortization6,792 7,256 28,009 28,614 
Amortization of debt issue costs96 96 386 577 
Provision for doubtful accounts2,454 933 8,317 2,785 
Share-based compensation1,808 2,586 9,537 11,219 
Deferred income taxes(907)(2,905)(2,472)(1,496)
Finance lease interest30 12 101 44 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable(5,510)(64,020)138,264 (17,368)
Inventories12,279 (2,057)239,157 (138,313)
Prepaid expenses and other assets10,359 (6,526)(17,804)32,653 
Other non-current assets(16,711)(5,810)(10,689)(7,582)
Accounts payable39,693 30,061 (78,167)(30,656)
Accrued expenses and other liabilities(15,210)2,587 (3,872)(14,195)
Income taxes payable3,090 5,431 (2,025)9,857 
Net cash provided by (used in) operating activities54,738 (15,261)371,647 (35,769)
Cash flows from investing activities:
Capital expenditures(1,270)(3,431)(8,555)(9,979)
Proceeds from sale of business, net of cash transferred(378)1,717 17,600 1,717 
Net cash provided by (used in) investing activities(1,648)(1,714)9,045 (8,262)
Cash flows from financing activities:
Borrowings on revolving credit, net of expenses16,813 627,257 1,259,728 2,499,166 
Repayments on revolving credit, net of expenses(16,763)(607,470)(1,438,658)(2,456,025)
Repayments on long-term debt, net(1,875)(938)(6,915)15,590 
Borrowings (repayments) on finance lease obligation(379)23 (964)(589)
Debt issuance costs— — — (1,407)
Exercise of stock options186 57 4,813 910 
Taxes paid on settlement of equity awards(81)(30)(2,876)(2,463)
Common stock repurchased(21,727)(4,933)(42,895)(15,651)
Net cash (used in) provided by financing activities(23,826)13,966 (227,767)39,531 
Effect of exchange rate changes on cash and cash equivalents(2,854)1,813 (3,643)2,691 
Increase in cash and cash equivalents26,410 (1,196)149,282 (1,809)
Cash and cash equivalents at beginning of period159,050 37,374 36,178 37,987 
Cash and cash equivalents at period end$185,460 $36,178 $185,460 $36,178 

*Derived from audited financial statements.


7
SCANSOURCE REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS
ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands, except percentages)
Non-GAAP Financial Information:
Quarter ended June 30,Fiscal Year Ended June 30,
2024202320242023
Adjusted return on invested capital ratio (Adjusted ROIC), annualized(a)
12.7 %12.9 %12.4 %14.6 %
Reconciliation of Net Income to Adjusted EBITDA:
Net income (GAAP)$16,097$17,095$77,060$88,092
Plus: Interest expense2,0845,56413,03119,786
Plus: Income taxes6,6006,36722,78133,758
Plus: Depreciation and amortization6,7927,25528,00928,614
EBITDA (non-GAAP)31,57336,281140,881170,250
Plus: Tax recovery (b)
(657)(128)(2,558)(2,986)
Plus: Share-based compensation1,8082,5869,53711,219
Plus: Cyberattack restoration costs1411,4608741,460
Plus: Acquisition and divestiture costs503—1,717—
Plus: Restructuring costs435—4,358—
Plus: Gain on sale of business378—(14,155)—
Adjusted EBITDA (numerator for Adjusted ROIC) (non-GAAP)$34,181$40,199$140,654$179,943
Invested Capital Calculations:
Equity – beginning of the period$944,053$878,895$905,298$806,528
Equity – end of the period924,255905,298924,255905,298
Plus: Share-based compensation, net1,3501,9217,1208,326
Plus: Cyberattack restoration costs, net1061,0926551,092
Plus: Acquisition and divestiture costs503—1,717—
Plus: Restructuring, net of tax327—3,262—
Plus: Discontinued operations net income—(1,717)—(1,717)
Plus: Tax recovery, net(278)(2,100)(2,566)(3,985)
Plus: Gain on sale of business378—(14,155)—
Average equity935,347891,695912,793857,771
Average funded debt (c)
146,121361,792220,528372,235
Invested capital (denominator for Adjusted ROIC) (non-GAAP)$1,081,468$1,253,487$1,133,321$1,230,006
(a) The annualized adjusted EBITDA amount is divided by days in the quarter times 365 days per year, or 366 days for leap year. There were 91 days in the current and prior-year quarter.
(b) Recovery of prior period withholding taxes in Brazil.
(c) Average funded debt is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt.


8
SCANSOURCE REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS
ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
Net Sales by Segment:
Quarter ended June 30,
20242023% Change
Specialty Technology Solutions:(in thousands)
Net sales, reported$484,710 $561,501 (13.7)%
Foreign exchange impact (a)
1,099 — 
Non-GAAP net sales$485,809 $561,501 (13.5)%
Modern Communications & Cloud:
Net sales, reported$261,403 $385,648 (32.2)%
Foreign exchange impact (a)
3,635 — 
Less: Divestitures— (2,403)
Non-GAAP net sales$265,038 $383,245 (30.8)%
Consolidated:
Net sales, reported$746,113 $947,149 (21.2)%
Foreign exchange impact (a)
4,734 — 
Less: Divestitures— (2,403)
Non-GAAP net sales$750,847 $944,746 (20.5)%
(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 June 30, 2024 into U.S. dollars using the average foreign exchange rates for the quarter ended June 30, 2023.

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
Net Sales by Segment:
Fiscal year ended June 30,
20242023% Change
Specialty Technology Solutions:(in thousands)
Net sales, reported$1,998,636 $2,331,030 (14.3)%
Foreign exchange impact (a)
(1,341)— 
Non-GAAP net sales$1,997,295 $2,331,030 (14.3)%
Modern Communications & Cloud:
Net sales, reported$1,261,173 $1,456,691 (13.4)%
Foreign exchange impact (a)
(8,542)— 
Less: Divestitures(3,747)(9,140)
Non-GAAP net sales$1,248,884 $1,447,551 (13.7)%
Consolidated:
Net sales, reported$3,259,809 $3,787,721 (13.9)%
Foreign exchange impact (a)
(9,883)— 
Less: Divestitures(3,747)(9,140)
Non-GAAP net sales$3,246,179 $3,778,581 (14.1)%
(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 fiscal year ended June 30, 2024 into U.S. dollars using the average foreign exchange rates for the fiscal year ended June 30, 2023.
9
SCANSOURCE REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
Net Sales by Geography:
Quarter ended June 30,
20242023% Change
United States and Canada:(in thousands)
Net sales, as reported$663,542 $854,521 (22.3)%
International:
Net sales, reported$82,571 $92,628 (10.9)%
Foreign exchange impact(a)
4,734 — 
Less: Divestitures— (2,403)
Non-GAAP net sales$87,305 $90,225 (3.2)%
Consolidated:
Net sales, reported$746,113 $947,149 (21.2)%
Foreign exchange impact(a)
4,734 — 
Less: Divestitures— (2,403)
Non-GAAP net sales$750,847 $944,746 (20.5)%
(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 June 30, 2024 into U.S. dollars using the average foreign exchange rates for the quarter ended June 30, 2023.

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
Net Sales by Geography:
Fiscal year ended June 30,
20242023% Change
United States and Canada:(in thousands)
Net sales, as reported$2,921,172 $3,432,074 (14.9)%
International:
Net sales, reported$338,637 $355,647 (4.8)%
Foreign exchange impact(a)
(9,883)— 
Less: Divestitures(3,747)(9,140)
Non-GAAP net sales$325,007 346,507 (6.2)%
Consolidated:
Net sales, reported$3,259,809 $3,787,721 (13.9)%
Foreign exchange impact(a)
(9,883)— 
Less: Divestitures(3,747)(9,140)
Non-GAAP net sales$3,246,179 $3,778,581 (14.1)%
(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 fiscal year ended June 30, 2024 into U.S. dollars using the average foreign exchange rates for the fiscal year ended June 30, 2023.
10
SCANSOURCE REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Free Cash Flow:
Quarter ended June 30,Fiscal year ended June 30,
2024202320242023
GAAP operating cash flow$54,738 $(15,261)$371,647 $(35,769)
Less: Capital Expenditures(1,270)(3,431)(8,555)(9,979)
Free cash flow (non-GAAP)$53,468 $(18,692)$363,092 $(45,748)
11
SCANSOURCE REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS
ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands, except per share data)
Non-GAAP Financial Information:
Quarter ended June 30, 2024
GAAP MeasureIntangible amortization expense
Acquisition & divestiture costs (a)
Restructuring costsTax recoveryCyberattack restoration costs
Gain on sale of business (b)
Non-GAAP measure
(in thousands, except per share data)
SG&A expenses$68,498$—$(503)$(435)$657$(141)$—$68,076
Operating income21,8713,741503435(657)141—26,034
Pre-tax income22,6973,741503435(657)14137827,238
Net income16,0972,788503327(278)10637819,921
Diluted EPS$0.64$0.11$0.02$0.01$(0.01)$—$0.02$0.80
Quarter ended June 30, 2023
GAAP MeasureIntangible amortization expenseAcquisition & divestiture costsRestructuring costsTax recoveryCyberattack restoration costs
Gain on sale of business
Non-GAAP measure
(in thousands, except per share data)
SG&A expense$74,358$—$—$—$128$(1,460)$—$73,026
Operating income27,2894,185——(128)1,460—32,806
Pre-tax income23,4624,185——(128)1,460—28,979
Net income17,0953,126——(2,100)1,092—19,213
Diluted EPS$0.68$0.12$—$—$(0.08)$0.04$—$0.76
 

(a) Acquisition and divestiture costs for the fiscal year ended June 30, 2024 are generally nondeductible for tax purposes.

(b) Reflects adjustment to the gain on the sale of the UK-based intY business.





12
SCANSOURCE REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS
ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands, except per share data)
Non-GAAP Financial Information:
Year ended June 30, 2024
GAAP MeasureIntangible amortization expense
Acquisition & divestiture costs (a)
Restructuring costsTax recoveryCyberattack restoration costs
Gain on sale of business (b)
Non-GAAP measure
(in thousands, except per share data)
SG&A expenses$277,428$—$(1,717)$—$2,558$(874)$—$277,395
Operating income90,32415,7231,7174,358(2,558)874—110,438
Pre-tax income99,84115,7231,7174,358(2,558)874(14,155)105,800
Net income77,06011,6971,7173,262(2,566)655(14,155)77,670
Diluted EPS$3.06$0.46$0.07$0.13$(0.10)$0.03$(0.56)$3.08
Year ended June 30, 2023
GAAP MeasureIntangible amortization expenseAcquisition & divestiture costsRestructuring costsTax recoveryCyberattack restoration costs
Gain on sale of business
Non-GAAP measure
(in thousands, except per share data)
SG&A expense$285,695$—$—$—$2,986$(1,460)$—$287,221
Operating income135,88616,746——(2,986)1,460—151,106
Pre-tax income121,85016,746——(2,986)1,460—137,070
Net income88,09212,489——(3,985)1,092—97,688
Diluted EPS$3.47$0.49$—$—$(0.16)$0.04$—$3.85
(a) Acquisition and divestiture costs for the fiscal year ended June 30, 2024 are generally nondeductible for tax purposes.

(b) Reflects gain on the sale of the UK-based intY business. This transaction resulted in a capital loss for tax purposes. The Company did not record a tax provision on the capital loss since there were no offsetting capital gains.

13
Fiscal Fourth Quarter and Full Year 2024 Earnings Our results for the year reflect a soft demand environment; however, we delivered strong margins and robust cash flow. We are executing well on our capital allocation plan to invest in strategic acquisitions and share repurchases.” Mike Baur Chair and CEO, ScanSource, Inc. Key Highlights FY24 Net Sales and Gross Profit Announced Acquisitions of High Margin, Recurring Revenue Businesses Strong Margins Reflect Strength of Business Fundamentals and Recurring Revenue Net Sales -14% Y/Y $3.3B Achieved Robust Cash Flow in FY24 © ScanSource 2024 Consolidated Specialty Technology Solutions Segment Gross Profit -11% Y/Y $399M, 12.2% margin Modern Communications & Cloud Segment STS, Net Sales -14% Y/Y $2.0B MC&C, Net Sales -13% Y/Y $1.3B STS, Gross Profit -16% Y/Y $188M, 9.4% margin MC&C, Gross Profit -6% Y/Y $211M, 16.8% margin

 
* Non-GAAP measure; adjusted ROIC represents return on invested capital For further financial data, non-GAAP financial disclosures and cautionary language regarding forward-looking statements, please refer to the following pages and ScanSource’s fourth quarter fiscal year 2024 news release issued on August 27, 2024, which accompanies this presentation and is available at www.scansource.com in the Investor Relations section [click here]. Operating Metrics Mid-Term Goals Mid-term: 3-to-4-year time frame Fiscal Year 2025 Annual Outlook as of August 27, 2024 $0.64 per share Q4 -6%Y/Y $3.06 per share FY24 -12%Y/Y GAAP Diluted EPS $372M FY24 Operating Cash Flow $363M FY24 Free Cash Flow* 12.7% Q4 12.4% FY24 Adjusted ROIC* $43M share repurchases in FY24 © ScanSource 2024 2 $0.80 per share Q4 +5% Y/Y $3.08 per share FY24 -20% Y/Y Non-GAAP Diluted EPS* Net Sales $3.1 billion to $3.5 billion Adjusted EBITDA* $140 million to $160 million Free Cash Flow* At least $70 million Net Sales Growth per year Adjusted EBITDA Margin* Adjusted ROIC* Recurring Revenue as % of Gross Profits 5%-7.5% 4.5%-5% Mid Teens Building to 30%+ 4.58% Q4 4.31% FY24 Adjusted EBITDA Margin* Focus on Working Capital Efficiency Improvements $34.2M Q4 -15% Y/Y $140.7M FY24 -22% Y/Y Adjusted EBITDA*

 
Forward-Looking Statements This Earnings Infographic and supporting materials contain “forward-looking” statements, including ScanSource's FY25 annual outlook and mid-term goals, which involve risks and uncertainties, many of which are beyond ScanSource’s control. No undue reliance should be placed on such statements, as any number of factors could cause actual results to differ materially from anticipated or forecasted results, including, but not limited to, the following factors, which are neither presented in order of importance nor weighted: macroeconomic conditions, including potential prolonged economic weakness, inflation, the failure to manage and implement ScanSource's growth strategy, credit risks involving ScanSource's larger customers and suppliers, changes in interest and exchange rates and regulatory regimes impacting ScanSource's international operations, risk to the business from a cyberattack, a failure of IT systems, failure to hire and retain quality employees, loss of ScanSource's major customers, relationships with key suppliers and customers or a termination or a modification of the terms under which it operates with these key suppliers and customers, changes in ScanSource's operating strategy, and other factors set forth in the "Risk Factors" contained in ScanSource's annual report on Form 10-K for the year ended June 30, 2024. Except as may be required by law, ScanSource expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this Earnings Infographic or otherwise. Non-GAAP Financial Information In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), ScanSource also discloses certain non-GAAP measures, including non-GAAP SG&A expenses, non-GAAP operating income, non-GAAP operating income margin, non-GAAP pre-tax income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, adjusted EBITDA margin, net debt, adjusted ROIC, free cash flow and net sales in constant currency excluding acquisitions and divestitures (organic growth). A reconciliation of the Company's non-GAAP financial information to GAAP financial information is provided in the following supporting materials and in the Company’s Form 8-K, filed with the SEC, with the quarterly earnings press release for the period indicated. Please see the “Non-GAAP Financial Information” section in the quarterly earnings press release for additional description of ScanSource’s non-GAAP measures. ScanSource discloses forward-looking information that is not presented in accordance with GAAP with respect to adjusted EBITDA, adjusted EBITDA margin, adjusted ROIC, and free cash flow. ScanSource believes that a quantitative reconciliation of such forward-looking information to the most directly comparable GAAP financial measure cannot be made without unreasonable efforts, because a reconciliation of these non-GAAP financial measures would require an estimate of future non-operating items such as acquisitions and divestitures, restructuring costs, impairment charges and other unusual or non-recurring items. Neither the timing nor likelihood of these events, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, a reconciliation of such forward- looking information to the most directly comparable GAAP financial measure is not provided. 3

 
Consolidated, 5-Quarter Financial Summary - for continuing operations ($ in thousands, except per share data) Q4 FY24 Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Q/Q Y/Y Select reported GAAP measures: Net sales $ 746,113 $ 752,599 $ 884,792 $ 876,305 $ 947,149 (1)% (21)% Gross profit $ 97,315 $ 94,481 $ 100,748 $ 106,508 $ 108,659 3% (10)% Gross profit margin % 13.0 % 12.6 % 11.4 % 12.2 % 11.5 % 49 bp 157 bp SG&A expenses $ 68,498 $ 66,574 $ 66,921 $ 75,436 $ 74,358 3% (8)% Operating income $ 21,871 $ 17,542 $ 26,826 $ 24,084 $ 27,289 25% (20)% Operating income margin % 2.93 % 2.33 % 3.03 % 2.75 % 2.88 % 60 bp 5 bp Net income $ 16,097 $ 12,806 $ 32,726 $ 15,432 $ 17,095 26% (6)% Diluted EPS $ 0.64 $ 0.50 $ 1.29 $ 0.61 $ 0.68 28% (6)% Select reported non-GAAP measures: (a) Non-GAAP operating income $ 26,034 $ 25,306 $ 30,621 $ 28,478 $ 32,806 3% (21)% Non-GAAP operating income margin % 3.49 % 3.36 % 3.46 % 3.25 % 3.46 % 13 bp 3 bp Non-GAAP net income $ 19,921 $ 17,461 $ 21,587 $ 18,728 $ 19,213 14% 4% Non-GAAP diluted EPS $ 0.80 $ 0.69 $ 0.85 $ 0.74 $ 0.76 16% 5% Adjusted EBITDA (non-GAAP) $ 34,181 $ 33,095 $ 38,459 $ 34,919 $ 40,199 3% (15)% Adjusted EBITDA margin % (non-GAAP) 4.58 % 4.40 % 4.35 % 3.98 % 4.24 % 18 bp 34 bp Adjusted ROIC (non-GAAP) 12.7 % 12.1 % 13.2 % 11.0 % 12.9 % 60 bp (20) bp Operating cash flow (QTR) $ 54,738 $ 160,152 $ 63,224 $ 93,533 $ (15,261) Less: Capital expenditures (QTR) $ (1,270) $ (2,420) $ (2,549) $ (2,315) $ (3,431) Free cash flow (QTR) (Non-GAAP) $ 53,468 $ 157,732 $ 60,675 $ 91,218 $ (18,692) Operating cash flow (TTM) $ 371,647 $ 301,647 $ 196,333 $ 106,224 $ (35,769) Less: Capital expenditures (TTM) $ (8,555) $ (10,715) $ (10,581) $ (10,537) $ (9,979) Free cash flow (TTM) (Non-GAAP) $ 363,092 $ 290,932 $ 185,752 $ 95,687 $ (45,748) Noted: Margin % reflects measure as a percentage of net sales. ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 4 August 27, 2024

 
Specialty Technology Solutions, 5-Quarter Financial Summary ($ in thousands) Q4 FY24 Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Q/Q Y/Y Net sales $ 484,710 $ 483,704 $ 520,651 $ 509,570 $ 561,501 —% (14)% Gross profit $ 46,346 $ 45,077 $ 47,133 $ 49,183 $ 51,440 3% (10)% Gross profit margin % 9.6 % 9.3 % 9.1 % 9.7 % 9.2 % 24 bp 40 bp GAAP operating income $ 10,405 $ 9,080 $ 13,368 $ 11,872 $ 14,343 15% (27)% GAAP operating income margin % 2.15 % 1.88 % 2.57 % 2.33 % 2.55 % 27 bp (41) bp Add: Intangible amortization expense $ 1,261 $ 1,261 $ 1,261 $ 1,261 $ 1,261 Non-GAAP operating income $ 11,666 $ 10,341 $ 14,629 $ 13,133 $ 15,604 13% (25)% Non-GAAP operating income margin % 2.41 % 2.14 % 2.81 % 2.58 % 2.78 % 27 bp (37) bp Reconciliation of Operating Income to Adjusted EBITDA GAAP operating income $ 10,405 $ 9,080 $ 13,368 $ 11,872 $ 14,343 15% (27)% Plus: Depreciation expense 2,019 1,953 2,144 1,931 1,954 Intangible amortization expense 1,261 1,261 1,261 1,261 1,261 Interest income 1,758 1,096 709 164 776 Other income/(expense), net 53 (57) 135 (132) (40) EBITDA (non-GAAP) 15,496 13,333 17,617 15,096 18,294 16% (15)% Adjustments: Share-based compensation expense 1,081 1,421 1,657 1,512 1,586 (24)% (32)% Adjusted EBITDA (non-GAAP) $ 16,577 $ 14,754 $ 19,274 $ 16,608 $ 19,880 12% (17)% Adjusted EBITDA margin % (non-GAAP) 3.42 % 3.05 % 3.70 % 3.26 % 3.54 % 37 bp (12) bp ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 5 August 27, 2024

 
Modern Communications & Cloud, 5-Quarter Financial Summary ($ in thousands) Q4 FY24 Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Q/Q Y/Y Net sales $ 261,403 $ 268,895 $ 364,141 $ 366,735 $ 385,648 (3)% (32)% Gross profit $ 50,969 $ 49,404 $ 53,615 $ 57,235 $ 57,219 3% (11)% Gross profit margin % 19.5 % 18.4 % 14.7 % 15.6 % 14.8 % 110 bp 470 bp GAAP operating income $ 12,543 $ 12,989 $ 14,602 $ 12,413 $ 14,406 (3)% (13)% GAAP operating income margin % 4.80 % 4.83 % 4.01 % 3.38 % 3.74 % (3) bp 106 bp Add: Intangible amortization expense $ 2,480 $ 2,491 $ 2,776 $ 2,932 $ 2,924 Add: Tax recovery(a) $ (657) $ (515) $ (1,386) $ — $ (128) Non-GAAP operating income $ 14,366 $ 14,965 $ 15,992 $ 15,345 $ 17,202 (4)% (16)% Non-GAAP operating income margin % 5.50 % 5.57 % 4.39 % 4.18 % 4.46 % (10) bp 100 bp Reconciliation of Operating Income to Adjusted EBITDA GAAP operating income $ 12,543 $ 12,989 $ 14,602 $ 12,413 $ 14,406 (3)% (13)% Plus: Depreciation expense 1,032 1,037 1,077 1,093 1,117 Intangible amortization expense 2,480 2,491 2,776 2,932 2,924 Interest income 1,527 1,557 1,409 1,161 1,309 Other income/(expense), net (427) (186) 14,325 (549) (309) EBITDA (non-GAAP) 17,155 17,888 34,189 17,050 19,447 (4)% (12)% Adjustments: Share-based compensation expense 728 968 914 1,258 1,000 Tax recovery(a) (657) (515) (1,386) — (128) Loss (gain) on sale of a business 378 — (14,533) — — Adjusted EBITDA (non-GAAP) $ 17,604 $ 18,341 $ 19,184 $ 18,308 $ 20,319 (4)% (13)% Adjusted EBITDA margin % (non-GAAP) 6.73 % 6.82 % 5.27 % 4.99 % 5.27 % (9) bp 147 bp (a) Recovery of prior period withholding taxes in Brazil ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 6 August 27, 2024

 
Net Sales, Constant Currency Excluding Acquisitions and Divestitures (Organic Growth) - QTR ($ in thousands) Net Sales by Segment: Q4 FY24 Q4 FY23 % Change Specialty Technology Solutions: Net sales, as reported $ 484,710 $ 561,501 (13.7) % Foreign exchange impact (a) 1,099 — Net sales, constant currency excluding divestitures (non-GAAP) $ 485,809 $ 561,501 (13.5) % Modern Communications & Cloud: Net sales, as reported $ 261,403 $ 385,648 (32.2) % Foreign exchange impact (a) 3,635 — Less: Divestitures — (2,403) Net sales, constant currency excluding divestitures (non-GAAP) $ 265,038 $ 383,245 (30.8) % Consolidated: Net sales, as reported $ 746,113 $ 947,149 (21.2) % Foreign exchange impact (a) 4,734 — Less: Divestitures — (2,403) Net sales, constant currency excluding divestitures (non-GAAP) $ 750,847 $ 944,746 (20.5) % Net Sales by Geography: Q4 FY24 Q4 FY23 % Change United States and Canada: Net sales, as reported $ 663,542 $ 854,521 (22.3) % International: Net sales, as reported $ 82,571 $ 92,628 (10.9) % Foreign exchange impact (a) 4,734 — Less: Divestitures — (2,403) Net sales, constant currency excluding divestitures (non-GAAP) $ 87,305 $ 90,225 (3.2) % Consolidated: Net sales, as reported $ 746,113 $ 947,149 (21.2) % Foreign exchange impact (a) 4,734 — Less: Divestitures — (2,403) Net sales, constant currency excluding divestitures (non-GAAP) $ 750,847 $ 944,746 (20.5) % (a) Year-over-year sales growth excluding the translation impact of changes in foreign currency rates. Calculated by translating net sales for the quarter ended June 30, 2024 into U.S. dollars using the weighted-average foreign exchange rates for the quarter ended June 30, 2023. ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 7 August 27, 2024

 
Net Sales, Constant Currency Excluding Acquisitions and Divestitures (Organic Growth) - FY ($ in thousands) Net Sales by Segment: Fiscal year ended June 30, 2024 2023 % Change Specialty Technology Solutions: Net sales, as reported $ 1,998,636 $ 2,331,030 (14.3) % Foreign exchange impact (a) (1,341) — Net sales, constant currency excluding divestitures (non-GAAP) $ 1,997,295 $ 2,331,030 (14.3) % Modern Communications & Cloud: Net sales, as reported $ 1,261,173 $ 1,456,691 (13.4) % Foreign exchange impact (a) (8,542) — Less: Divestitures (3,747) (9,140) Net sales, constant currency excluding divestitures (non-GAAP) $ 1,248,884 $ 1,447,551 (13.7) % Consolidated: Net sales, as reported $ 3,259,809 $ 3,787,721 (13.9) % Foreign exchange impact (a) (9,883) — Less: Divestitures (3,747) (9,140) Net sales, constant currency excluding divestitures (non-GAAP) $ 3,246,179 $ 3,778,581 (14.1) % Net Sales by Geography: Fiscal year ended June 30, 2024 2023 % Change United States and Canada: Net sales, as reported $ 2,921,172 $ 3,432,074 (14.9) % International: Net sales, as reported $ 338,637 $ 355,647 (4.8) % Foreign exchange impact (a) (9,883) — Less: Divestitures (3,747) (9,140) Net sales, constant currency excluding divestitures (non-GAAP) $ 325,007 $ 346,507 (6.2) % Consolidated: Net sales, as reported $ 3,259,809 $ 3,787,721 (13.9) % Foreign exchange impact (a) (9,883) — Less: Divestitures (3,747) (9,140) Net sales, constant currency excluding divestitures (non-GAAP) $ 3,246,179 $ 3,778,581 (14.1) % (a) Year-over-year sales growth excluding the translation impact of changes in foreign currency rates. Calculated by translating net sales for the fiscal year ended June 30, 2024 into U.S. dollars using the weighted-average foreign exchange rates for the fiscal year ended June 30, 2023. ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 8 August 27, 2024

 
Average Adjusted Return on Invested Capital - QTR ($ in thousands) Q4 FY24 Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Adjusted return on invested capital (ROIC), annualized (a) 12.7 % 12.1 % 13.2 % 11.0 % 12.9 % Reconciliation of Net Income to Adjusted EBITDA Net income from continuing operations - GAAP $ 16,097 $ 12,806 $ 32,726 $ 15,432 $ 17,095 Plus: Interest expense 2,084 2,001 3,359 5,585 5,564 Income taxes 6,600 5,146 7,320 3,715 6,367 Depreciation and amortization 6,792 6,742 7,258 7,217 7,255 EBITDA (non-GAAP) 31,573 26,695 50,663 31,949 36,281 Adjustments: Tax recovery (b) (657) (515) (1,386) — (128) Acquisition and divestiture costs 503 511 703 — — Restructuring costs 435 3,923 — — — Cyberattack restoration costs 141 93 441 201 1,460 Share-based compensation 1,808 2,388 2,571 2,769 2,586 Gain on sale of business 378 — (14,533) — — Adjusted EBITDA (numerator for Adjusted ROIC) (non-GAAP) $ 34,181 $ 33,095 $ 38,459 $ 34,919 $ 40,199 Invested Capital Calculation Equity - beginning of quarter $ 944,053 $ 953,601 $ 915,253 $ 905,298 $ 878,895 Equity - end of quarter 924,255 944,051 953,601 915,253 905,298 Adjustments: Tax recovery, net (278) (1,648) (640) — (2,100) Share-based compensation, net 1,350 1,784 1,919 2,068 1,921 Acquisition and divestiture costs 503 511 703 — — Restructuring, net of tax 327 2,935 — — — Cyberattack restoration costs, net 106 69 329 150 1,092 Gain on sale of business 378 — (14,533) — Discontinued operations net income — — — — (1,717) Average equity 935,347 950,652 928,316 911,385 891,695 Average funded debt (c) 146,121 153,131 227,688 352,897 361,792 Invested capital (denominator for Adjusted ROIC) (non-GAAP) $ 1,081,468 $ 1,103,783 $ 1,156,004 $ 1,264,282 $ 1,253,487 (a) Calculated as net income plus interest expense, income taxes, depreciation and amortization (EBITDA) with other non-GAAP adjustments (Adjusted EBITDA), annualized, divided by invested capital for the period. The annualized Adjusted EBTIDA amount is divided by days in the quarter times 365 days per year, or 366 days for a leap year. (b) Recovery of prior period withholding taxes in Brazil. (c) Average funded debt is calculated as the daily average amounts outstanding on our short-term and long-term interest-bearing debt. ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 9 August 27, 2024

 
Average Adjusted Return on Invested Capital - FY ($ in thousands) Fiscal year ended June 30, 2024 2023 Adjusted return on invested capital (ROIC), annualized (a) 12.4 % 14.6 % Reconciliation of Net Income to Adjusted EBITDA Net income from continuing operations - GAAP $ 77,060 $ 88,092 Plus: Interest expense 13,031 19,786 Income taxes 22,781 33,758 Depreciation and amortization 28,009 28,614 EBITDA (non-GAAP) 140,881 170,250 Adjustments: Tax recovery (b) 4,358 — Acquisition and divestiture costs 1,717 — Restructuring costs (2,558) (2,986) Cyberattack restoration costs 874 1,460 Share-based compensation 9,537 11,219 Gain on sale of business (14,155) — Adjusted EBITDA (numerator for Adjusted ROIC) (non-GAAP) $ 140,654 $ 179,943 Invested Capital Calculation Equity - beginning of year $ 905,298 $ 806,528 Equity - end of year 924,255 905,298 Adjustments: Tax recovery, net (2,566) (3,985) Share-based compensation, net 7,120 8,326 Acquisition and divestiture costs 1,717 — Restructuring, net of tax 3,262 — Cyberattack restoration costs, net 655 1,092 Gain on sale of business (14,155) — Discontinued operations net income — (1,717) Average equity 912,793 857,771 Average funded debt (c) 220,528 372,235 Invested capital (denominator for Adjusted ROIC) (non-GAAP) $ 1,133,321 $ 1,230,006 (a) Calculated as net income plus interest expense, income taxes, depreciation and amortization (EBITDA) with other non-GAAP adjustments (Adjusted EBITDA), annualized, divided by invested capital for the period. (b) Recovery of prior period withholding taxes in Brazil. (c) Average funded debt is calculated as the daily average amounts outstanding on our short-term and long-term interest-bearing debt. ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 10 August 27, 2024

 
Net Debt and Adjusted EBITDA Metrics ($ in thousands) Q4 FY24 Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Consolidated debt (Q/E) $ 144,056 $ 145,881 $ 168,634 $ 248,108 $ 329,901 Less: Cash and cash equivalents of continuing operations (Q/E) (185,460) (159,050) (44,987) (42,647) (36,178) Net debt (Q/E) (non-GAAP) $ (41,404) $ (13,169) $ 123,647 $ 205,461 $ 293,723 Reconciliation of Net Income to Adjusted EBITDA Net income from continuing operations - GAAP $ 16,097 $ 12,806 $ 32,726 $ 15,432 $ 17,095 Plus: Interest expense 2,084 2,001 3,359 5,585 5,564 Income taxes 6,600 5,146 7,320 3,715 6,367 Depreciation and amortization 6,792 6,742 7,258 7,217 7,255 EBITDA (non-GAAP) 31,573 26,695 50,663 31,949 36,281 Adjustments: Acquisition and divestiture costs 503 511 703 — — Tax recovery (a) (657) (515) (1,386) — (128) Cyberattack restoration costs 141 93 441 201 1,460 Share-based compensation 1,808 2,388 2,571 2,769 2,586 Loss (gain) on sale of business 378 — (14,533) — — Restructuring costs 435 3,923 — — — Adjusted EBITDA (non-GAAP) $ 34,181 $ 33,095 $ 38,459 $ 34,919 $ 40,199 Adjusted EBITDA, TTM (non-GAAP) (b) $ 140,654 $ 146,672 Net Debt / Adjusted EBITDA, TTM (non-GAAP) (0.3) x (0.1) x (a) Recovery of prior period withholding taxes in Brazil (b) Adjusted EBITDA for the trailing 12-month period ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 11 August 27, 2024

 
Working Capital, 5-Quarter Summary ($ in thousands) Q4 FY24 Q3 FY24 Q2 FY24 Q1 FY24 Q4 FY23 Accounts Receivable (Q/E) $ 581,523 $ 589,847 $ 662,799 $ 691,669 $ 753,236 Days sales outstanding in receivables 71 71 68 71 72 Inventory (Q/E) $ 512,634 $ 529,163 $ 575,137 $ 656,170 $ 757,574 Inventory turns 5.0 4.8 5.1 4.4 4.4 Accounts payable (Q/E) $ 587,984 $ 555,733 $ 540,642 $ 617,594 $ 691,119 Paid for inventory days* 4.2 11.2 15.7 16.8 17.5 Working Capital (Q/E) (AR+INV-AP) $ 506,173 $ 563,277 $ 697,294 $ 730,245 $ 819,691 Cash conversion cycle 75 82 84 88 90 *Paid for inventory days represent Q/E inventory days less Q/E accounts payable days ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 12 August 27, 2024

 
Operating Income, Net Income & EPS - QTR ($ in thousands) Quarter ended June 30, 2024 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs Restructuring costs Tax recovery, net Gain on sale of business(a) Cyberattack restoration costs Non-GAAP measure SG&A expenses $68,498 $— $(503) $(435) $657 $— $(141) $68,076 Operating income 21,871 3,741 503 435 (657) — 141 26,034 Pre-tax income 22,697 3,741 503 435 (657) 378 141 27,238 Net income 16,097 2,788 503 327 (278) 378 106 19,921 Diluted EPS $0.64 $0.11 $0.02 $0.01 $(0.01) $0.02 $— $0.80 (a) Reflects adjustment to the gain on the sale of the UK-based intY business. ($ in thousands) Quarter ended March 31, 2024 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs Restructuring costs Tax recovery, net Gain on sale of business Cyberattack restoration costs Non-GAAP measure SG&A expenses $66,574 $— $(511) $(3,923) $515 $— $(93) $62,562 Operating income 17,542 3,752 511 3,923 (515) — 93 25,306 Pre-tax income 17,952 3,752 511 3,923 (515) — 93 25,716 Net income 12,806 2,788 511 2,935 (1,648) — 69 17,461 Diluted EPS $0.50 $0.11 $0.02 $0.12 $(0.06) $— $— $0.69 ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 13 August 27, 2024

 
Operating Income, Net Income & EPS - QTR, continued ($ in thousands) Quarter ended December 31, 2023 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs Restructuring costs Tax recovery, net Gain on sale of business Cyberattack restoration costs Non-GAAP measure SG&A expenses $66,921 $— $(703) $— $1,386 $— $(441) $67,163 Operating income 26,826 4,037 703 — (1,386) — 441 30,621 Pre-tax income 40,046 4,037 703 — (1,386) (14,533) 441 29,308 Net income 32,726 3,002 703 — (640) (14,533) 329 21,587 Diluted EPS $1.29 $0.12 $0.03 $— $(0.03) $(0.50) $(0.01) $0.85 ($ in thousands) Quarter ended September 30, 2023 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs Restructuring costs Tax recovery, net Gain on sale of business Cyberattack restoration costs Non-GAAP measure SG&A expenses $75,436 $— $— $— $— $— $(201) $75,235 Operating income 24,084 4,193 — — — — 201 28,478 Pre-tax income 19,147 4,193 — — — — 201 23,541 Net income 15,432 3,146 — — — — 150 18,728 Diluted EPS $0.61 $0.12 $— $— $— $— $0.01 $0.74 ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 14 August 27, 2024

 
Operating Income, Net Income & EPS - QTR, continued ($ in thousands) Quarter ended June 30, 2023 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs Restructuring costs Tax recovery, net Gain on sale of business Cyberattack restoration costs Non-GAAP measure SG&A expenses $74,358 $— $— $— $128 $— $(1,460) $73,026 Operating income 27,289 4,185 — — (128) — 1,460 32,806 Pre-tax income 23,462 4,185 — — (128) — 1,460 28,979 Net income 17,095 3,126 — — (2,100) — 1,092 19,213 Diluted EPS $0.68 $0.12 $— $— $(0.08) $— $0.04 $0.76 ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 15 August 27, 2024

 
Operating Income, Net Income & EPS - FY ($ in thousands) Year ended June 30, 2024 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs (a) Restructuring costs Tax recovery, net Gain on sale of business (b) Cyberattack restoration costs Non-GAAP measure SG&A expenses $277,428 $— $(1,717) $— $2,558 $— $(874) $277,395 Operating income 90,324 15,723 1,717 4,358 (2,558) — 874 110,438 Pre-tax income 99,841 15,723 1,717 4,358 (2,558) (14,155) 874 105,800 Net income 77,060 11,697 1,717 3,262 (2,566) (14,155) 655 77,670 Diluted EPS $3.06 $0.46 $0.07 $0.13 $(0.10) $(0.56) $0.03 $3.08 ($ in thousands) Year ended June 30, 2023 Reported GAAP measure Intangible amortization expense Acquisition & divestiture costs Restructuring costs Tax recovery, net Gain on sale of business Cyberattack restoration costs Non-GAAP measure SG&A expenses $285,695 — $— $— $2,986 $— $(1,460) $287,221 Operating income 135,886 16,746 — — (2,986) — 1,460 151,106 Pre-tax income 121,850 16,746 — — (2,986) — 1,460 137,070 Net income 88,092 12,489 — — (3,985) — 1,092 97,688 Diluted EPS $3.47 $0.49 $— $— $(0.16) $— $0.04 $3.85 (a) Acquisition and divestiture costs for the fiscal year June 30, 2024 are generally non-deductible for tax purposes. (b) Reflects gain on the sale of the UK-based intY business. This transaction resulted in a capital loss for tax purposes. The Company did not record a tax provision on the capital loss since there were no offsetting capital gains. ScanSource, Inc. Earnings Infographic Q4 FY2024 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 16 August 27, 2024

 
v3.24.2.u1
Cover Page
Jun. 30, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 27, 2024
Entity Registrant Name ScanSource, Inc.
Entity Incorporation, State or Country Code SC
Entity File Number 00-26926
Entity Tax Identification Number 57-0965380
Entity Address, Address Line One 6 Logue Court
Entity Address, City or Town Greenville
Entity Address, State or Province SC
Entity Address, Postal Zip Code 29615
City Area Code 864
Local Phone Number 288-2432
Title of 12(b) Security Common Stock, no par value
Trading Symbol SCSC
Security Exchange Name NASDAQ
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0000918965
Amendment Flag false
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