Scansource, Inc. · NASDAQ:SCSC
Scansource — Q3 FY2017 Earnings Presentation
15 slides from Scansource's earnings presentation, May 9, 2017
Slide 1: Q3 FY17 Financial Results Conference Call
Q3 FY17 FINANCIAL RESULTS CONFERENCE CALL May 9, 2017 at 5:00 pm ET Exhibit 99.2
Slide 2: Safe Harbor and Non-GAAP
SAFE HARBOR AND NON-GAAP Safe Harbor Statement This presentation contains certain comments that are “forward- looking” statements, including sales, GAAP diluted EPS, and non- GAAP diluted EPS, that involve plans, strategies, economic performance and trends, projections, expectations, costs or belief
Slide 3: Highlights
HIGHLIGHTS • Net sales of $814 million, +2% Y/Y • Net sales growth for WW Barcode, Networking & Security, +4% Y/Y, offset lower sales for WW Communications & Services, -2% Y/Y • GAAP EPS of $0.49, -9% Y/Y and non-GAAP EPS of $0.65*, +2% Y/Y Net Sales and EPS Within Forecast Range Progress on Key Opp
Slide 4: Highlights – Q3 FY17
Q3 FY17 Q2 FY17 Q3 FY16 Y/Y Change Net sales $813.5 $904.8 $798.4 +2% Gross profit 92.7 98.5 84.5 +10% Gross profit margin % (of net sales) 11.4% 10.9% 10.6% +81 bps Operating income 20.0 23.3 21.6 -8% Non-GAAP operating income 26.2 29.6 25.3 +3% GAAP net income 12.4 23.0 14.0 -12% Non-GAAP net inco
Slide 5: WW Barcode, Networking & Security
Q3 FY17 Q2 FY17 Q3 FY16 Net sales $549.0 $593.8 $528.0 Gross profit $45.9 $49.0 $45.7 Gross margin 8.4% 8.2% 8.7% Operating income $11.2 $12.1 $11.2 Operating income % 2.0% 2.0% 2.1% Non-GAAP operating income $12.3 $13.2 $12.2 Non-GAAP operating income % 2.2% 2.2% 2.3% Q3 FY16 Q3 FY17 Net Sales, $ i
Slide 6: WW Communications & Services
Q3 FY17 Q2 FY17 Q3 FY16 Net sales $264.6 $311.0 $270.4 Gross profit $46.8 $49.6 $38.7 Gross margin 17.7% 15.9% 14.3% Operating income $8.8 $11.5 $10.5 Operating income % 3.3% 3.7% 3.9% Non-GAAP operating income $13.9 $16.4 $13.1 Non-GAAP operating income % 5.2% 5.3% 4.9% WW COMMUNICATIONS & SERVICES
Slide 7: Working Capital Measures
Q3 FY17 Q2 FY17 Q3 FY16 Accounts receivable (Q/E) $565.2 $620.6 $522.7 Days sales outstanding in receivables* 60* 60* 59 Inventory (Q/E) $514.2 $512.9 $568.2 Inventory turns 5.6 6.0 4.9 Accounts payable (Q/E) $437.2 $476.3 $431.9 Paid for inventory days* 12.5* 6.5* 17.2 Working capital (Q/E) (AR+INV
Slide 8: Cash Flow and Balance Sheet Highlights
Q3 FY17 Q2 FY17 Q3 FY16 Adjusted EBITDA (QTR) $29.2 $32.6 $27.5 Adjusted ROIC (QTR)* 12.6% 13.8% 12.3% Operating cash flow, trailing 12-months $112.0 $128.4 $72.7 Cash and cash equivalents (Q/E) $62.2 $45.1 $40.8 Debt (Q/E) $113.9 $141.7 $79.8 Net debt to adjusted EBITDA, trailing 12-months 0.46x 0.
Slide 9: Q4 FY17 Outlook
Q4 FY17 OUTLOOK* 9 * Outlook as of May 9, 2017. Non-GAAP diluted EPS excludes amortization of intangible assets, change in fair value of contingent consideration, and acquisition costs. Reflects the following FX rates: $1.07 to EUR 1.00 for the Euro, $0.32 to R$1.00 for the Brazilian real (R$3.125 t
Slide 10: Operating Income, Pre-Tax Income, Net Income & EPS – QTR
APPENDIX: NON-GAAP FINANCIAL INFORMATION 10 Operating Income, Pre-Tax Income, Net Income & EPS – QTR ($ in thousands) Quarter Ended March 31, 2017 Operating Income Pre-tax income Net income Diluted EPS GAAP measure $ 19,978 $ 19,571 $ 12,424 $ 0.49 Adjustments: Amortization of intangible assets 4,21
Slide 11: Net Sales, Constant Currency and Excluding Acquisitions – QTR
APPENDIX: NON-GAAP FINANCIAL INFORMATION 11 Net Sales, Constant Currency and Excluding Acquisitions – QTR ($ in thousands) WW Barcode, NW & Security WW Comms. & Services Consolidated For the quarter ended March 31, 2017: Q3 FY17 net sales, as reported $ 548,971 $ 264,567 $ 813,538 Foreign exchange i
Slide 12: Highlights by Segment – Y/Y for Quarter
APPENDIX: NON-GAAP FINANCIAL INFORMATION 12 Highlights by Segment – Y/Y for Quarter Quarter Ended March 31, 2017 ($ in thousands) WW Barcode, NW & Security WW Comms. & Services Corporate Consolidated Net sales $ 548,971 $ 264,567 $ - $ 813,538 GAAP operating income $ 11,175 $ 8,803 $ - $ 19,978 Adju
Slide 13: Highlights by Segment – Prior Quarter
APPENDIX: NON-GAAP FINANCIAL INFORMATION 13 Highlights by Segment – Prior Quarter Quarter Ended December 31, 2016 (a) ($ in thousands) WW Barcode, NW & Security WW Comms. & Services Corporate Consolidated Net sales $ 593,833 $ 310,959 $ - $ 904,792 GAAP operating income $ 12,131 $ 11,479 $ (335) $ 2
Slide 14: Adjusted Return on Invested Capital
APPENDIX: NON-GAAP FINANCIAL INFORMATION 14 Adjusted Return on Invested Capital ($ in thousands) Q3 FY17 Q2 FY17 Q1 FY17 Q4 FY16 Q3 FY16 Adjusted return on invested capital (ROIC), annualized (a) 12.6% 13.8% 13.1% 10.1% 12.3% Reconciliation of Net Income to EBITDA Net income - GAAP $ 12,424 $ 23,037
Slide 15: Forecasted Range for EPS – Q4 FY17 Outlook
APPENDIX: NON-GAAP FINANCIAL INFORMATION 15 Forecasted Range for EPS – Q4 FY17 Outlook ($ in thousands) Forecast for Quarter ending June 30, 2017 Range Low Range High GAAP diluted EPS $ 0.44 $ 0.51 Adjustments: Amortization of intangible assets 0.10 0.10 Change in fair value of contingent considerat