ScanSource(US:SCSC)2025-11-06 13:31Financial Performance - Net sales for the quarter ended September 30, 2025, were $739.65 million, a decrease of 4.6% compared to $775.58 million for the same quarter in 2024[17] - Gross profit increased to $107.47 million, up 5.7% from $101.62 million year-over-year[17] - Operating income rose to $25.90 million, representing a 47.0% increase from $17.63 million in the prior year[17] - Net income for the quarter was $19.88 million, an increase of 16.5% compared to $16.97 million in the same quarter last year[19] - Basic net income per share increased to $0.90, up from $0.70 in the prior year, reflecting a 28.6% growth[17] - Comprehensive income for the quarter was $23.61 million, compared to $20.03 million in the prior year, reflecting a 17.0% increase[19] - For the quarter ended September 30, 2025, total revenue was $739.65 million, a decrease of 4.6% compared to $775.58 million for the same quarter in 2024[46] - The net income for the quarter ended September 30, 2025, was $19.88 million, representing an increase of 17.7% from $16.97 million in the same quarter of 2024[48] - Basic earnings per share increased to $0.90 for the quarter ended September 30, 2025, compared to $0.70 for the same quarter in 2024, reflecting a growth of 28.6%[48] Assets and Liabilities - Total assets decreased to $1.72 billion as of September 30, 2025, down from $1.79 billion at June 30, 2025[14] - Total liabilities decreased to $802.94 million, down from $879.20 million at the end of the previous quarter[14] - Cash and cash equivalents at the end of the period were $124.92 million, a slight decrease from $126.16 million at the beginning of the quarter[25] - Total current assets decreased to $1.31 billion as of September 30, 2025, down from $1.37 billion at June 30, 2025[14] - The company’s total shareholders' equity increased to $914.03 million as of September 30, 2025, compared to $906.41 million at June 30, 2025[14] Cash Flow and Operating Activities - The company reported a net cash provided by operating activities of $23.21 million, down from $44.83 million in the same quarter last year[25] - Net cash provided by operating activities decreased to $23,211,000 in Q1 2025 from $44,830,000 in Q1 2024, a decline of 48.2%[25] - The company had borrowings on revolving credit amounting to $49,210,000 in Q1 2025, compared to $8,381,000 in Q1 2024, an increase of 485.5%[25] Acquisitions and Strategic Growth - The Company completed acquisitions of Resourcive and Advantix in August 2024, with a combined initial purchase price of approximately $56.7 million[108] - On October 20, 2025, the company completed the acquisition of DataXoom, adding 17 employees and enhancing its Specialty Technology Solutions segment[111] - The company continues to evaluate acquisitions on an ongoing basis, indicating a strategic focus on growth through potential mergers and acquisitions[110] - The impact of the recent acquisitions was not material to the consolidated financial statements[109] Segment Performance - The Specialty Technology Solutions segment operates primarily in the United States and Brazil, focusing on hardware, SaaS, and subscription services[87] - The Intelisys & Advisory segment provides sales and services to channel partners and end users, distributing connectivity and cloud technologies[87] - Gross profit for the Specialty Technology Solutions segment was $83.90 million, representing a gross margin of approximately 11.7%[90] - Operating income for the Specialty Technology Solutions segment increased to $20.38 million, up from $16.74 million in the prior year, reflecting a growth of 21.5%[90] Debt and Interest Rates - As of September 30, 2025, the total debt of the company was $133.913 million, a decrease of 1.7% from $136.149 million on June 30, 2025[54] - The effective interest rate for the term loan was 5.26% as of September 30, 2025, down from 5.43% on June 30, 2025[57] - The average daily outstanding balance on the revolving credit facility was $1.1 million for the quarter ended September 30, 2025, compared to $0.1 million for the same period in 2024[58] Other Financial Metrics - The effective tax rate for the quarter ended September 30, 2025, was 26.4%, slightly higher than 26.1% for the same quarter in 2024[102] - The Company reported capital expenditures of $(2.40) million for the quarter ended September 30, 2025, compared to $(2.38) million in the same quarter of 2024[90] - The company recognized $0.3 million in acquisition-related costs for the quarter ended September 30, 2025, compared to $0.4 million for the same quarter in 2024[110] - The company incurred debt issuance costs of $1.4 million in connection with the amendment and restatement of the Amended Credit Agreement[55] Currency and Derivatives - The company had net foreign exchange derivative contract losses of $655,000 for the quarter ended September 30, 2025, compared to losses of $941,000 for the same period in 2024[63] - The company had contracts outstanding for managing cash flows with notional amounts of $22.6 million for foreign currency exchange at September 30, 2025[63] - The fair value of derivative assets designated as hedges was $373,000 as of September 30, 2025, down from $680,000 as of June 30, 2025[70][72] Restructuring and Cost Management - The Company executed cost reduction and restructuring programs, resulting in accrued restructuring costs of $0.15 million as of September 30, 2025[107] - The remaining balance of accrued restructuring costs as of September 30, 2025, was $151,000[14] - In January and September 2024, the company executed cost reduction and restructuring programs, resulting in accrued restructuring costs of $0.2 million expected to be paid through Q3 FY 2026[14]