ScanSource(SCSC) - 2025 Q2 - Quarterly Report

Financial Performance - Net sales for the quarter ended December 31, 2024, were $747,497,000, a decrease of 15.5% compared to $884,792,000 for the same quarter in 2023[18]. - Gross profit for the six months ended December 31, 2024, was $203,342,000, down from $207,256,000 in the same period of 2023, reflecting a decline of 1.9%[18]. - Net income for the quarter ended December 31, 2024, was $17,053,000, a decrease of 47.9% compared to $32,726,000 for the same quarter in 2023[18]. - Net income for the six months ended December 31, 2024, was $34,028,000, compared to $48,158,000 for the same period in 2023, reflecting a decrease of approximately 29.4%[27]. - Basic earnings per share for the quarter ended December 31, 2024, were $0.72, compared to $1.31 for the same quarter in 2023, a decline of approximately 45%[57]. - Comprehensive income for the quarter was $(1,425) thousand, compared to $33,866 thousand in the prior year, indicating a significant decline[20]. Assets and Liabilities - Total current assets decreased to $1,283,765,000 as of December 31, 2024, from $1,404,699,000 as of June 30, 2024, representing a decline of 8.6%[15]. - Total liabilities decreased to $801,867,000 as of December 31, 2024, from $854,777,000 as of June 30, 2024, a reduction of 6.2%[15]. - The company’s total assets decreased to $1,702,529,000 as of December 31, 2024, from $1,779,032,000 as of June 30, 2024, a decrease of 4.3%[15]. - Total debt as of December 31, 2024, was $139,899,000, a decrease from $144,056,000 as of June 30, 2024[63]. - The company’s retained earnings increased to $1,031,934,000 as of December 31, 2024, from $1,013,738,000 as of June 30, 2024, an increase of 1.8%[15]. Cash Flow and Investments - The company reported a net cash provided by operating activities of $38,642,000 for the six months ended December 31, 2024, a significant decrease from $156,757,000 in the prior year[27]. - Cash and cash equivalents at the end of the period were $110,520,000, down from $185,460,000 at the beginning of the period, indicating a decrease of 40.4%[27]. - The company reported a net cash used in investing activities of $58,452,000, compared to a net cash provided of $13,113,000 in the previous year[27]. - The company incurred a cash outflow of $56,673,000 for business acquisitions during the six months ended December 31, 2024[27]. Segment Performance - The Specialty Technology Solutions segment reported sales of $723.277 million for the quarter ended December 31, 2024, down from $861.514 million in the same quarter of 2023, representing a decrease of approximately 16.1%[95]. - The Intelisys & Advisory segment achieved sales of $24.220 million for the quarter ended December 31, 2024, compared to $23.278 million in the same quarter of 2023, reflecting an increase of approximately 4.0%[95]. - Operating income for the Specialty Technology Solutions segment was $14.077 million for the quarter ended December 31, 2024, down from $19.696 million in the same quarter of 2023, a decrease of approximately 28.0%[95]. Restructuring and Expenses - The company reported a restructuring expense of $5,381,000 for the six months ended December 31, 2024, compared to no such expense in the same period of 2023[18]. - The company executed restructuring programs in January and September 2024, expected to yield annualized savings of approximately $20.5 million in selling, general, and administrative expenses[112]. - The company recorded depreciation and amortization expenses of $8.131 million for the quarter ended December 31, 2024, compared to $7.258 million in the same quarter of 2023, an increase of approximately 12.0%[95]. Tax and Compliance - The Company recorded a discrete net tax benefit of $3.0 million for the quarter ended December 31, 2024, compared to a $3.8 million benefit in the same quarter of 2023[106]. - The effective tax rate for the quarter ended December 31, 2024, was 13.5%, down from 18.3% in the same quarter of 2023[107]. - The Company was in compliance with all covenants under the Amended Credit Agreement as of December 31, 2024[67]. Future Outlook and Strategy - The company plans to focus on market expansion and new product development to drive future growth[18]. - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements and disclosures[40].