suwadee sangsriruang Thesis In my analysis, I'll demonstrate that SeanSource, Inc. (NASDAQ:SCSC) has shown solid growth and made some smart moves with acquisitions; but, their current financials are a mixed bag. Recent Q4 2024 numbers hit the mark with a Non-GAAP EPS of $0.80, but revenue fell short by $87.19 million. Type: · EPS Estimate · EPS Actual Period: Quarterly 4 T 1.25 FQ4 2024 1,00 EPS Estimate: 0.93 EPS Actual: 0.80 0.75 0.50 0.25 FQ4 2023 FQ1 2024 FQ2 2024 FQ3 2024 FQ4 2024 FQ1 2026 (E) FQ2 2026 ...

Financial Data and Key Metrics - Net sales declined 14% year-on-year for FY '24, with gross profits declining 11% [9] - Specialty Technology Solutions segment net sales declined 14% year-on-year, while gross profit declined 16% [10] - Modern Communication & Cloud segment net sales declined 13%, with gross profit declining 6% [10] - Free cash flow for FY '24 was $363 million, driven by a significant reduction in working capital [9] - Q4 free cash flow was $53 million, with strong gross profit margins and adjusted EBITDA margins [8] - FY '24 non-GAAP EPS was $3.08, compared to $3.85 last year [9] Business Line Performance - Specialty Technology Solutions segment saw a 14% decline in net sales and a 10% decline in gross profit year-on-year in Q4 [8] - Modern Communication & Cloud segment net sales declined 32% year-on-year in Q4, while Intelisys' net sales grew 6% [9] - Intelisys' Q4 end-user billings increased 9% year-on-year, totaling $2.67 billion in FY '24 [9] - Contact Center as a Service (CCaaS) billings grew 35% year-on-year in Q4, while UCaaS billings grew 13% [9] Market Performance - Physical security in the Specialty Technology Solutions segment and UCaaS/CCaaS in the Modern Communication & Cloud segment experienced good growth in Q4 [8] - Intelisys' recurring revenue represented 27% of the company's consolidated gross profits [10] Strategic Direction and Industry Competition - The company is accelerating its hybrid distribution strategy, which is expected to drive more demand and expand the total addressable market [4] - Investments in advanced technologies such as AI and private 5G are being made to support growth in the channel [5] - Two acquisitions, Resourcive and Advantix, were announced to support the hybrid distribution strategy, both being high-margin, recurring revenue businesses [6][7] - The company is focusing on partner segmentation to provide customized services to high-growth partners, including IT VARs, advanced technology partners, and telco agents [5] Management Commentary on Operating Environment and Future Outlook - The company expects a challenging demand environment to continue in the near term, particularly in the first half of FY '25 [11] - FY '25 net sales are expected to be between $3.1 billion and $3.5 billion, with adjusted EBITDA ranging between $140 million and $160 million [12] - The company aims to generate at least $70 million in free cash flow for FY '25, focusing on continuous working capital efficiency improvements [13] Other Important Information - The company ended Q4 with $185 million in cash and a net debt leverage ratio below zero on a trailing 12-month adjusted EBITDA basis [11] - Share repurchases totaled $22 million for Q4 and $43 million for FY '24 [11] - The company is building a cash culture, emphasizing predictable free cash flow as a key measure of success [13] Q&A Session Summary Question: Details on Ken Mills' appointment and its impact on Intelisys - Ken Mills, with extensive channel experience, was appointed President of Intelisys to drive strategy and vision, aiming for double-digit growth [14][15][16] Question: Contribution from recent acquisitions and guidance process for FY '25 - The acquisitions (Resourcive and Advantix) are small but accretive to EBITDA and included in FY '25 guidance, though not significant to consolidated results [17][18] - The company learned from FY '24 that predicting top-line growth is challenging, leading to wider guidance ranges for FY '25 [19][20] Question: Demand outlook relative to supplier commentary - The company faces difficulty in forecasting demand due to its distributor model, with a first-half, second-half dynamic expected for FY '25 [23][24][25][26] Question: Rationale behind the Resourcive acquisition - Resourcive was chosen for its strong leadership team, which aligns with the company's strategy to build a new advisory channel model [28][29] Question: Scalability of recent acquisitions - Both Resourcive and Advantix are scalable, with unique capabilities and management styles that can be expanded [32][33] Question: Hardware portfolio challenges - The company expects growth in its Specialty Technology Solutions segment, while the Comms segment faces challenges, particularly due to Cisco's performance [35][36][37] Question: Capital allocation strategy - The company plans to balance acquisitions and share repurchases, leveraging its strong balance sheet and free cash flow [39][40] Question: M&A market multiples and barcode market outlook - The company sees opportunities in acquiring recurring revenue businesses with higher margins, though multiples remain stable [43][44][45] - The Advantix acquisition is expected to strengthen the company's position in the barcode market as demand recovers [46]

ScanSource (SCSC) came out with quarterly earnings of $0.80 per share, missing the Zacks Consensus Estimate of $0.95 per share. This compares to earnings of $0.76 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of -15.79%. A quarter ago, it was expected that this technology products distributor would post earnings of $0.84 per share when it actually produced earnings of $0.69, delivering a surprise of -17.86%. Over the last four ...

Market Overview - U.S. stocks showed mixed performance with the Dow Jones index gaining over 50 points, up 0.16% to 41,240.52, while NASDAQ fell 0.42% to 17,651.68 and S&P 500 dropped 0.22% to 5,604.73 [1] - Health care shares increased by 0.2%, while information technology shares decreased by 0.6% [1] Company Performance - ScanSource, Inc. reported fourth-quarter earnings of 80 cents per share, missing the analyst consensus estimate of 93 cents, and quarterly sales of $746.113 million, below the expected $843.143 million [2] - ScanSource projected FY25 revenues between $3.1 billion and $3.5 billion, compared to estimates of $3.47 billion [2] - Ensysce Biosciences, Inc. shares surged 66% to $0.7176 after receiving a $14 million grant from the NIH for opioid development [2] - Addex Therapeutics Ltd shares rose 64% to $12.25 following the selection of clinical candidates in collaboration with Indivior, with potential earnings of up to $330 million [2] - VOXX International Corporation shares increased by 50% to $4.25 after announcing a strategic alternatives process [2] Declining Stocks - Altisource Asset Management Corporation shares fell 47% to $1.25 due to plans to voluntarily delist from NYSE American LLC [3] - COSCIENS Biopharma Inc. shares dropped 35% to $3.80 after announcing Phase 3 trial results [3] - Lixte Biotechnology Holdings, Inc. shares decreased by 15% to $1.75 [3] Commodities - Oil prices decreased by 1% to $76.67, gold fell by 0.4% to $2,545.10, silver dropped by 0.3% to $29.92, while copper rose by 0.3% to $4.2915 [4] European Market - European shares were mostly higher, with the eurozone's STOXX 600 gaining 0.1%, Germany's DAX up 0.4%, and France's CAC 40 down 0.2% [5] - The German economy contracted by 0.1% quarter-over-quarter in Q2, following a 0.2% growth in Q1 [5] - The GfK Consumer Climate Indicator for Germany fell to -22.0 in September from a revised -18.6 [5] Asia Pacific Markets - Asian markets closed mostly higher, with Japan's Nikkei 225 gaining 0.47% and Hong Kong's Hang Seng Index up 0.43% [6] - Hong Kong's trade deficit narrowed to $21.8 billion in July from a $30 billion gap a year ago, as exports increased more than imports [6] Economic Indicators - The S&P CoreLogic Case-Shiller home price index rose by 6.5% year-over-year in June, down from a revised 6.9% in the previous month [7] - The FHFA house price index fell by 0.1% in June, contrary to market expectations of a 0.2% gain [7]

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits. Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels. SCSC cu ...

ScanSource, Inc. (NASDAQ:SCSC) Q3 2024 Earnings Conference Call May 7, 2024 10:30 AM ET Company Participants Mary Gentry - Senior Vice President, Treasurer and Investor Relations Mike Baur - Chair and Chief Executive Officer Steve Jones - Senior Executive Vice President, Chief Financial Officer Tony Sorrentino - President for Specialty Technology Conference Call Participants Greg Burns - Sidoti Keith Housum - Northcoast Research Michael Latimore - Northland Capital Markets Operator Welcome to the ScanSource ...

Financial Performance - For the quarter ended March 31, 2024, net sales were $752.6 million, a decrease of 15% compared to $885.5 million for the same quarter in 2023[17] - Gross profit for the quarter was $94.5 million, down 15% from $111.8 million in the prior year, resulting in a gross margin of 12.5%[17] - Net income for the quarter was $12.8 million, a decline of 40% from $21.2 million in the same quarter last year, leading to a net income per share of $0.51[17] - Total revenue for the nine months ended March 31, 2024, was $2,513,696 thousand, compared to $2,840,573 thousand for the same period in 2023, reflecting a decrease of 11.4%[47] - Net income for the nine months ended March 31, 2024, was $60,964,000, a decrease of 14.3% compared to $70,997,000 for the same period in 2023[24] - For the quarter ended March 31, 2024, net income was $12,806 thousand, a decrease of 39.8% compared to $21,221 thousand for the same quarter in 2023[49] - Basic earnings per share for the quarter ended March 31, 2024, was $0.51, down from $0.84 in the same quarter of 2023, a decrease of 39.3%[49] Assets and Liabilities - Total current assets decreased to $1.42 billion as of March 31, 2024, from $1.66 billion as of June 30, 2023, primarily due to a reduction in accounts receivable and inventories[14] - Total liabilities decreased to $838.9 million as of March 31, 2024, from $1.16 billion as of June 30, 2023, reflecting a reduction in accounts payable and long-term debt[14] - Cash and cash equivalents increased significantly to $159.1 million as of March 31, 2024, compared to $36.2 million as of June 30, 2023[14] - The company’s total assets decreased to $1.78 billion as of March 31, 2024, from $2.07 billion as of June 30, 2023[83] - The total debt as of March 31, 2024, was $145,881 thousand, significantly reduced from $329,901 thousand on June 30, 2023[56] Operational Changes and Restructuring - The company reported a restructuring expense of $3.9 million for the quarter, indicating ongoing efforts to optimize operations[17] - A restructuring program initiated in January 2024 is expected to yield approximately $10.0 million in annualized savings in selling, general and administrative expenses[100] - The balance of accrued restructuring costs as of March 31, 2024, was $2.8 million, expected to be paid through the third quarter of fiscal year 2025[103] - Employee separation and benefit costs amounted to $3.923 million for the quarter ended March 31, 2024[101] - The total restructuring costs recognized for the nine months ended March 31, 2024, are also $3.923 million, all allocated to the Corporate reporting unit[101] Market Conditions and Future Outlook - The company anticipates continued challenges from macroeconomic conditions, including inflation and supply chain issues, which may impact future performance[11] - The company is focused on enhancing its organic growth strategy and managing credit risks associated with larger customers and suppliers[11] Cash Flow and Investments - Cash flows from operating activities provided $316,908,000 in the nine months ended March 31, 2024, compared to a cash outflow of $20,508,000 in the same period of 2023[24] - The company reported a capital expenditure of $7,285,000 for the nine months ended March 31, 2024, compared to $6,549,000 in the same period of 2023[24] - Common stock repurchased amounted to $21,168,000 in the nine months ended March 31, 2024, compared to $10,718,000 in the same period of 2023[24] Segment Performance - Specialty Technology Solutions sales decreased to $483.7 million in Q1 2024 from $565.7 million in Q1 2023, a decline of 14.5%[83] - Modern Communications & Cloud segment sales fell to $268.9 million in Q1 2024 from $319.9 million in Q1 2023, representing a decrease of 15.9%[83] - Operating income for the Modern Communications & Cloud segment was $12.99 million in Q1 2024, compared to $14.47 million in Q1 2023, a decrease of 10.3%[83] Tax and Compliance - The company reported a discrete net tax benefit of $1.5 million during Q1 2024, related to an income tax recovery in Brazil[93] - The company's effective tax rate for Q1 2024 was 28.7%, compared to 29.1% in Q1 2023[94] - The Company was in compliance with all covenants under the Amended Credit Agreement, including a Leverage Ratio of less than or equal to 3.50 to 1.00[60]

Exhibit 99.1 FOR IMMEDIATE RELEASE Contact: Steve Jones Mary M. Gentry ScanSource, Inc. ScanSource, Inc. (864) 286-4302 (864) 286-4892 Senior EVP, Chief Financial Officer SVP, Treasurer and Investor Relations "While hardware sales were lower than we expected, our resilient business model delivered strong margins and robust free cash flow," said Mike Baur, Chair and CEO, ScanSource, Inc. "Our strong balance sheet gives us the capacity and flexibility to execute our disciplined capital allocation plans." Quar ...

Financial Data and Key Metrics Changes - For Q2 2024, the company reported net sales of $885 million, a decline of 12.5% year-over-year, with adjusted EBITDA expected to be at least $155 million, reflecting an EBITDA margin of 4.4% [4][5][32] - Free cash flow for the quarter was $61 million, with a full-year outlook of at least $200 million [2][5][6] - Gross profit margins were reported at 11.4%, consistent with the prior year [4] Business Line Data and Key Metrics Changes - The Intelisys Technology Services business saw a growth of 7.5%, with end user billings increasing 10% year-over-year, exceeding $2.6 billion annualized [2][30] - The Specialty Technology & Solutions segment experienced a revenue decline of 17% year-over-year, with a corresponding decline in gross profit [4] - The Modern Communication and Cloud segment's revenues declined 5% year-over-year, with gross profits down 9% due to an unfavorable product mix [32] Market Data and Key Metrics Changes - Demand for hardware technologies, particularly in barcode, mobility, point-of-sale, security, and communications, declined more than expected [12] - The company noted a slowdown in physical security and mobility point-of-sale technologies, which were previously experiencing strong growth [4][35] Company Strategy and Development Direction - The company is focusing on building a cash culture and sustainable free cash flow, with plans to redirect resources towards the Intelisys recurring revenue business [5][6] - The updated guidance reflects expectations of continued revenue headwinds, with net sales projected to be at least $3.5 billion for FY 2024 [5] - The company is actively managing SG&A spending to align with revenue growth expectations [5] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment over lower-than-expected net sales in the hardware business, attributing it to changing demand dynamics [2][4] - The company anticipates ongoing challenges in forecasting demand due to the lack of backlogs and bookings, emphasizing the need for cautious guidance [3][41] - Management remains confident in the resilience of the business and its positioning for a return to growth [5] Other Important Information - The company has an active pipeline of M&A opportunities and plans to maintain a balance between share repurchases and strategic investments [52] - The effective tax rate for FY 2024 is expected to range from 27% to 28% [5] Q&A Session Summary Question: Observations on technology cycles and demand - Management acknowledged a slowdown in networking business growth but noted it still experienced some growth year-over-year [35] Question: Impact of self-checkout kiosks on demand - Management confirmed a slowdown in self-checkout business but remains optimistic about future opportunities in point-of-sale technologies [18] Question: Capital allocation priorities - Management stated that capital allocation focuses on share repurchases and M&A to drive recurring revenue, with $65 million remaining on the current authorization [50][52]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☒ Quarterly period ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission File Number: 000-26926 ScanSource, Inc. South Carolina (State of Incorporation) 57-0965380 (I.R.S. Employer Identification No.) 6 Logue Court Greenvil ...