ScanSource(US:SCSC)2024-11-07 13:30Financial Performance - Net sales for Q1 FY25 totaled $775.6 million, down 11.5% year-over-year, with organic growth showing a decrease of 10.7%[6] - Gross profit decreased 4.6% year-over-year to $101.6 million, with a gross profit margin of 13.10%, up from 12.15% in the prior-year quarter[7] - GAAP net income for Q1 FY25 was $17.0 million, or $0.69 per diluted share, compared to $15.4 million, or $0.61 per diluted share, in the prior-year quarter[9] - Operating income for Q1 FY25 was $17.6 million, down from $24.1 million in the prior-year quarter[8] - Net income for the quarter was $16,974, an increase of 10% compared to $15,432 in the prior year[28] - Adjusted EBITDA for Q1 FY25 increased 2.1% to $35.7 million, representing 4.60% of net sales[10] - Adjusted EBITDA for the quarter was $35,666, up from $34,919, indicating a growth of 2.1% year-over-year[32] - Non-GAAP operating income for Q1 2024 was $27,509,000, compared to $28,478,000 in Q1 2023, reflecting a decrease of around 3%[39] - The overall financial performance indicates a mixed outlook with growth in net income and pre-tax income, but declines in operating income and SG&A expenses[39] Revenue and Sales - Recurring revenue increased 18.8% year-over-year, contributing to 31.8% of gross profit for Q1 FY25[7] - Net sales for the quarter ended September 30, 2024, were $775,580, a decrease of 11.5% compared to $876,305 in the same quarter of 2023[28] - Reported net sales for the Specialty Technology Solutions segment decreased by 11.9% to $752,299 thousand compared to $853,950 thousand in the previous year[34] - Non-GAAP net sales for the consolidated entity were $780,133 thousand, down 10.7% from $874,023 thousand year-over-year[37] - Net sales in the United States and Canada decreased by 10.0% to $712,019 thousand from $791,000 thousand year-over-year[37] - Net sales in Brazil reported a significant decline of 25.5%, falling to $63,561 thousand from $85,305 thousand[37] - The overall consolidated net sales reported were $775,580 thousand, reflecting an 11.5% decrease from $876,305 thousand in the prior year[34] Cash Flow and Assets - The company generated $42.5 million of free cash flow for Q1 FY25 and had cash and cash equivalents of $145.0 million as of September 30, 2024[10][11] - Cash and cash equivalents at the end of the period were $145,044, down from $185,460 at the beginning of the period[30] - The company reported a net cash provided by operating activities of $44,830, a decrease from $93,533 in the prior year[30] - Total assets increased to $1,786,509 from $1,779,032, reflecting a growth of 0.4%[27] - Total liabilities rose to $865,616, compared to $854,777, marking an increase of 1.4%[27] - Free cash flow (non-GAAP) for the quarter was $42,455 thousand, down from $91,218 thousand in the previous year[38] Acquisitions and Strategic Initiatives - ScanSource completed the acquisition of Resourcive on August 8, 2024, enhancing its Intelisys & Advisory segment[11] - The acquisition of Advantix on August 15, 2024, is aimed at launching the Integrated Solutions Group (ISG) to develop new solutions and services[12] Expenses and Costs - SG&A expenses for Q1 2024 were $71,706,000, down from $75,436,000 in Q1 2023, showing a reduction of approximately 5%[39] - The company reported intangible amortization expenses of $4,358,000 for Q1 2024, compared to $4,193,000 in Q1 2023, which is an increase of approximately 4%[39] - Cyberattack restoration costs for Q1 2024 were $76,000, while the previous year reported a recovery of $201,000, indicating a shift in financial impact[39] - The company incurred acquisition and divestiture costs of $377,000 in Q1 2024, while there were no such costs reported in Q1 2023[39] Outlook - FY25 annual outlook projects net sales between $3.1 billion and $3.5 billion, with adjusted EBITDA expected to be between $140 million and $160 million[5] - The average return on invested capital (Adjusted ROIC) for the quarter was 13.3%, up from 11.0% in the previous year[32]