ScanSource(US:SCSC)2024-05-07 12:32Financial 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]