ScanSource(US:SCSC)2024-05-07 12:31Financial Performance - Net sales for Q3 FY24 totaled $752.6 million, a decrease of 15.0% year-over-year from $885.5 million in Q3 FY23[2] - Gross profit for Q3 FY24 was $94.5 million, down 15.5% year-over-year, with a gross profit margin of 12.55% compared to 12.62% in Q3 FY23[4] - Operating income for Q3 FY24 was $17.5 million, a decline of 48.8% from $34.3 million in the prior-year quarter[5] - GAAP net income for Q3 FY24 was $12.8 million, or $0.50 per diluted share, down 39.7% from $21.2 million, or $0.83 per diluted share, in Q3 FY23[6] - Adjusted EBITDA for Q3 FY24 decreased 27.5% to $33.1 million, representing 4.40% of net sales, compared to 5.16% in Q3 FY23[7] - Total net sales for the quarter ended March 31, 2024, were $752.6 million, a decrease of 15.0% compared to $885.5 million in the same quarter of 2023[27] - Gross profit for the quarter was $94.5 million, down from $111.8 million year-over-year, reflecting a gross margin decline[27] - Operating income decreased to $17.5 million from $34.3 million in the prior year, indicating a significant drop in profitability[27] - Net income for the quarter was $12.8 million, compared to $21.2 million in the same quarter of 2023, representing a decline of 39.9%[27] - Consolidated net sales reported a decline of 15.0% to $752,599,000, with non-GAAP net sales at $748,802,000, down 15.2% from $882,989,000 in the same quarter of 2023[39] - Operating income for the quarter was $17,542,000, significantly lower than $34,279,000 in the same quarter last year[41] - Net income decreased to $12,806,000 from $21,221,000 year-over-year, reflecting a decline of 39.9%[41] - Diluted EPS for the quarter was $0.50, down from $0.83 in the same quarter of 2023[43] Cash Flow and Financial Position - Free cash flow for the first nine months of FY24 was $309.6 million, significantly higher than $52.6 million in the same period last year[7] - Cash and cash equivalents increased to $159.1 million from $36.2 million at the end of the previous quarter, showing strong cash flow management[29] - Free cash flow for the nine months ended March 31, 2024, was $309.6 million, a significant improvement from a negative cash flow of $27.1 million in the same period of 2023[34] - The company emphasizes a strong balance sheet and robust free cash flow, providing flexibility for disciplined capital allocation plans[2] Outlook and Guidance - The updated annual outlook for FY24 projects net sales of at least $3.3 billion, down from the previous guidance of at least $3.5 billion[8] - The fiscal year 2024 outlook includes a GAAP operating income of at least $96 million and adjusted EBITDA of at least $140 million[44] - Free cash flow is projected to be at least $275 million for fiscal year 2024[44] Shareholder Actions - A new $100 million share repurchase authorization was announced, supplementing the existing authorization with approximately $45 million remaining[9] Segment Performance - Intelisys net sales for Q3 FY24 increased by 4.0%, with net billings reaching approximately $2.68 billion annualized[3] - Net sales in the Specialty Technology Solutions segment were $483.7 million, down 14.5% year-over-year, while the Modern Communications & Cloud segment saw a 15.9% decline in sales[36] - Net sales in the United States and Canada decreased by 17.0% to $671,246,000 compared to $808,797,000 in the same quarter of 2023[39] - International net sales increased by 6.0% to $81,353,000, with non-GAAP net sales at $77,556,000, up 4.5% from $74,192,000 in the previous year[39] Operational Adjustments - The company reported a restructuring charge of $3.9 million during the quarter, indicating ongoing adjustments to operational efficiency[27] - SG&A expenses for the quarter were $66,574,000, compared to $70,669,000 in the same quarter last year[41] - The adjusted return on invested capital (ROIC) for the quarter was 12.1%, down from 14.6% in the prior year[32] - The company experienced a foreign exchange impact of $(3,797,000) on its international sales[39]