Slide 1: Q2 FY17 Financial Results Conference Call
Q2 FY17 FINANCIAL RESULTS CONFERENCE CALL February 7, 2017 at 5:00 pm ET
Slide 2: Safe Harbor and Non-GAAP
SAFE HARBOR AND NON-GAAP Safe Harbor Statement Although ScanSource believes the expectations in its This presentation contains certain comments that are forward-looking statements are reasonable, it cannot “forward-looking” statements, including sales, GAAP diluted guarantee future results, levels o
Slide 3: Highlights
HIGHLIGHTS • GAAP diluted EPS of $0.91 and non-GAAP diluted EPS* of $0.75 exceed Vs. Forecast: forecast range EPS Up and • Higher gross margins in both segments contribute to EPS upside Net Sales Down • Net sales of $905 million below forecast; miss primarily in Worldwide Barcode, Networking and Sec
Slide 4: Highlights – Q2 FY17
HIGHLIGHTS – Q2 FY17 Y/Y Q/Q Q2 FY17 Q1 FY17 Q2 FY16 Change Change $ in millions, except EPS Net sales $904.8 $932.6 $993.5 -9% -3% Gross profit 98.5 91.5 100.6 -2% +8% Gross profit margin % (of net 10.9% 9.8% 10.1% +76 bps +107 bps sales) Operating income 23.3 22.9 31.9 -27% +2% Non-GAAP operating
Slide 5: WW Barcode, Networking & Security
WW BARCODE, NETWORKING & SECURITY Net Sales, $ in millions Down (14%) Q2 FY17 Q1 FY17 Q2 FY16 Organic Growth, Down (14%) $ in millions $690 Net sales $595.4 $633.4 $689.5 $595 Gross profit $49.2 $50.1 $57.7 Gross margin 8.3% 7.9% 8.4% Operating income $12.0 $13.5 $19.0 Operating income % 2.0% 2.1% 2
Slide 6: WW Communications & Services
WW COMMUNICATIONS & SERVICES Net Sales, $ in millions Up 2% Q2 FY17 Q1 FY17 Q2 FY16 Organic Growth, Down (2%) $ in millions $309 Net sales $309.4 $299.2 $304.0 $304 Gross profit $49.3 $41.4 $42.9 Gross margin 15.9% 13.9% 14.1% Operating income $11.6 $9.9 $12.9 Operating income % 3.8% 3.3% 4.2% Non-G
Slide 7: Working Capital Measures
WORKING CAPITAL MEASURES $ in millions Q2 FY17 Q1 FY17 Q2 FY16 Accounts receivable (Q/E) $620.6 $637.8 $588.4 Days sales outstanding in receivables* 60* 59* 53 Inventory (Q/E) $512.9 $567.3 $604.1 Inventory turns 6.0 6.0 6.0 Accounts payable (Q/E) $476.3 $533.0 $512.0 Paid for inventory days* 6.5* 6
Slide 8: Cash Flow and Balance Sheet Highlights
CASH FLOW AND BALANCE SHEET HIGHLIGHTS Q2 FY17 Q1 FY17 Q2 FY16 $ in millions Adjusted EBITDA (QTR) $32.6 $29.2 $38.6 Adjusted return on invested capital (QTR)* 13.8% 13.1% 17.5% Operating cash flow, trailing 12-months $128.4 $116.2 $44.7 Cash and cash equivalents (Q/E) $45.1 $45.1 $39.4 Debt (Q/E) $
Slide 9: Q3 FY17 Outlook
Q3 FY17 OUTLOOK* For the quarter ending March 31, 2017, excluding amortization of intangible assets, change in fair value of contingent consideration, and acquisition costs: Net Sales Range from $800 million to $860 million GAAP Range from $0.42 to $0.49 per share Diluted EPS Non-GAAP Range fr
Slide 10: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Operating Income, Pre-Tax Income, Net Income & EPS – QTR ($ in thousands) Quarter Ended December 31, 2016 Operating Pre-tax Net Diluted Income income income EPS GAAP measure $ 23,275 $ 35,781 $ 23,036 $ 0.91 Adjustments: Amortization of intangible assets 4,16
Slide 11: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Net Sales, Constant Currency and Excluding Acquisitions – QTR ($ in thousands) WW Barcode, WW Comms. NW & Security & Services Consolidated For the quarter ended December 31, 2016: Q2 FY17 net sales, as reported $ 595,359 $ 309,433 $ 904,792 Foreign exchange i
Slide 12: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Highlights by Segment – Y/Y for Quarter Quarter Ended December 31, 2016 ($ in thousands) WW Barcode, WW Comms. NW & Security & Services Corporate Consolidated Net sales $ 595,359 $ 309,433 $ - $ 904,792 GAAP operating income $ 11,985 $ 11,625 $ (335) $ 23,275
Slide 13: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Highlights by Segment – Prior Quarter Quarter Ended September 30, 2016 ($ in thousands) WW Barcode, WW Comms. NW & Security & Services Corporate Consolidated Net sales $ 633,405 $ 299,161 $ - $ 932,566 GAAP operating income $ 13,456 $ 9,917 $ (498) $ 22,875 A
Slide 14: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Adjusted Return on Invested Capital ($ in thousands) Q2 FY17 Q1 FY17 Q4 FY16 Q3 FY16 Q2 FY16 Adjusted return on invested capital (ROIC), annualized (a) 13.8% 13.1% 10.1% 12.3% 17.5% Reconciliation of Net Income to EBITDA Net income - GAAP $ 23,036 $ 14,816 $
Slide 15: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Forecasted Range for EPS – Q3 FY17 Outlook ($ in thousands) Forecast for Quarter ending March 31, 2017 Range Low Range High GAAP diluted EPS $ 0.42 $ 0.49 Adjustments: Amortization of intangible assets 0.11 0.11 Change in fair value of contingent consideratio