ScanSource(US:SCSC)2025-01-30 13:30Financial Performance - Net sales for Q2 FY25 totaled $747.5 million, a decrease of 15.5% year-over-year[4] - Gross profit increased by 1.0% year-over-year to $101.7 million, with a gross profit margin of 13.6%, up from 11.4% in the prior-year quarter[5] - Operating income for Q2 FY25 was $18.4 million, down 31.2% from $26.8 million in the prior-year quarter[6] - GAAP net income decreased by 47.9% to $17.1 million, or $0.70 per diluted share, compared to $32.7 million, or $1.29 per diluted share, in Q2 FY24[7] - Non-GAAP net income for Q2 FY25 was $20.7 million, or $0.85 per diluted share, compared to $21.6 million, or $0.85 per diluted share, in the prior-year quarter[7] - Adjusted EBITDA for Q2 FY25 decreased by 8.2% to $35.3 million, representing 4.72% of net sales[7] - Net income for the quarter was $17,053 thousand, down 47.9% from $32,726 thousand in the prior year[29] - Adjusted EBITDA for the quarter was $35,299 thousand, compared to $38,459 thousand in the same quarter of 2023, reflecting a decrease of 5.6%[34] - Diluted EPS for the quarter was $0.70, down from $1.29 in the same quarter last year, representing a decrease of 45.7%[46] Revenue and Sales - Recurring revenue grew by 31.2% year-over-year, contributing to 32.4% of gross profit[5] - Net sales for the quarter ended December 31, 2024, were $747,497 thousand, a decrease of 15.5% compared to $884,792 thousand in the same quarter of 2023[29] - Non-GAAP net sales in the United States and Canada were $678,538,000, reflecting a 14.7% decline from $795,382,000 in the prior year[42] - Net sales in Brazil decreased by 32.5% to $60,386,000 in Q2 2024 from $89,410,000 in Q2 2023[42] - The company reported a foreign exchange impact of $10,718,000 on consolidated net sales for the quarter ended December 31, 2024[42] Cash Flow and Assets - Free cash flow for the first six months of FY25 was $34.3 million, with share repurchases totaling $52.3 million[8] - Cash and cash equivalents at the end of the period were $110,520 thousand, down from $185,460 thousand at the beginning of the period[31] - Free cash flow for the quarter ended December 31, 2024, was $(8,164,000), a significant decrease from $60,675,000 in the same quarter of 2023[43] - The company experienced a significant decline in GAAP operating cash flow, reporting $(6,190,000) for the quarter compared to $63,224,000 in the same quarter of the previous year[43] Expenses and Liabilities - The company reported a restructuring charge of $313 thousand for the quarter, with total selling, general and administrative expenses increasing to $73,920 thousand from $66,921 thousand year-over-year[29] - Total current assets decreased to $1,283,765 thousand from $1,404,699 thousand, a decline of 8.6%[27] - Total liabilities decreased to $801,867 thousand from $854,777 thousand, a reduction of 6.2%[27] - SG&A expenses for Q2 2024 were $73,920,000, an increase from $66,921,000 in Q2 2023[46] Guidance and Future Outlook - For FY25, the company reaffirms guidance of net sales between $3.1 billion and $3.5 billion[10] - The adjusted return on invested capital (Adjusted ROIC) for the quarter was 13.3%, slightly up from 13.2% in the previous year[34]