Slide 1: Q4 and FY17 Financial Results Conference Call
Q4 AND FY17 FINANCIAL RESULTS CONFERENCE CALL August 29, 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 forward- This presentation contains certain comments that are “forward- looking statements are reasonable, it cannot guarantee future looking” statements, including statements about expected results,
Slide 3: Highlights
HIGHLIGHTS • Strong finish to FY17 with net sales and EPS at or above expected range Q4 Results in • Net sales of $917 million, +5% Y/Y, driven by WW Barcode, Networking & Line with Security segment, +7% Y/Y Expectations • GAAP EPS of $0.74, +48% Y/Y, and non-GAAP EPS of $0.68*, +33% Y/Y • Net sales
Slide 4: FY18 Key Opportunities for Growth
FY18 KEY OPPORTUNITIES FOR GROWTH Mobile computing Video surveillance Communications channel opportunity Intelisys Network1 4
Slide 5: Highlights – Q4 FY17
HIGHLIGHTS – Q4 FY17 Y/Y Q4 FY17 Q3 FY17 Q4 FY16 Change $ in millions, except EPS Net sales $917.3 $813.5 $877.5 +5% Gross profit 100.9 92.7 82.8 +22% Gross profit margin % (of net sales) 11.0% 11.4% 9.4% +156 bps Operating income 22.1 20.0 18.9 +17% Non-GAAP operating income 27.8 26.2 18.9 +47% GAA
Slide 6: WW Barcode, Networking & Security
WW BARCODE, NETWORKING & SECURITY Q4 FY17, Y/Y Summary Q4 FY17 Q3 FY17 Q4 FY16 Net Sales Gross Margin $ in millions $619.2 million 8.3% Net sales $619.2 $549.0 $581.3 Up 7% Up 29 bps Gross profit $51.7 $45.9 $46.8 Organic, Up 6% Gross margin 8.3% 8.4% 8.1% GAAP Non-GAAP Operating income $13.0 $11.2
Slide 7: WW Communications & Services
WW COMMUNICATIONS & SERVICES Q4 FY17, Y/Y Summary Q4 FY17 Q3 FY17 Q4 FY16 Net Sales Gross Margin $ in millions $298.0 million 16.5% Net sales $298.0 $264.6 $296.1 +1% Up 436 bps Gross profit $49.2 $46.8 $35.9 Organic, (3)% Gross margin 16.5% 17.7% 12.1% Non-GAAP Operating income $9.5 $8.8 $10.7 GAAP
Slide 8: Highlights – FY17
HIGHLIGHTS – FY17 FY17 FY16 Y/Y Change $ in millions, except EPS Net sales $3,568.2 $3,540.2 +1% Gross profit 383.6 355.4 +8% Gross profit margin % (of net sales) 10.8% 10.0% +71 bps Operating income 88.2 96.9 -9% Non-GAAP operating income 110.2 108.9 +1% GAAP net income 69.2 63.6 +9% Non-GAAP net i
Slide 9: WW Barcode, Networking & Security
WW BARCODE, NETWORKING & SECURITY FY17, Y/Y Summary FY17 FY16 Net Sales Gross Margin $ in millions $2,389 million 8.2% Net sales $2,389.3 $2,361.7 Up 1% Down (14) bps Gross profit $195.7 $196.8 Organic, (2)% Gross margin 8.2% 8.3% GAAP Non-GAAP Operating income $49.7 $52.2 Operating Operating Operat
Slide 10: WW Communications & Services
WW COMMUNICATIONS & SERVICES FY17, Y/Y Summary FY17 FY16 Net Sales Gross Margin $ in millions $1,179 million 15.9% Net sales $1,178.9 $1,178.6 Up --% Up 247 bps Gross profit $187.9 $158.6 Organic, (3)% Gross margin 15.9% 13.5% GAAP Non-GAAP Operating income $39.8 $45.5 Operating Operating Operating
Slide 11: Working Capital Measures
WORKING CAPITAL MEASURES $ in millions Q4 FY17 Q3 FY17 Q4 FY16 Accounts receivable (Q/E) $637.3 $565.2 $559.6 Days sales outstanding in receivables* 61* 60* 57 Inventory (Q/E) $531.3 $514.2 $558.6 Inventory turns 6.2 5.6 5.6 Accounts payable (Q/E) $513.2 $437.2 $471.5 Paid for inventory days* 4.7* 1
Slide 12: Cash Flow and Balance Sheet Highlights
CASH FLOW AND BALANCE SHEET HIGHLIGHTS Q4 FY17 Q3 FY17 Q4 FY16 $ in millions Adjusted EBITDA (QTR) $31.0 $29.2 $21.0 Adjusted ROIC (QTR)* 13.2% 12.6% 10.1% Operating cash flow, trailing 12-months $94.9 $112.0 $52.2 Cash and cash equivalents (Q/E) $56.1 $62.2 $61.4 Debt (Q/E) $97.3 $113.9 $76.9 Net d
Slide 13: Q1 FY18 Outlook
Q1 FY18 OUTLOOK* For the quarter ending September 30, 2017, excluding amortization of intangible assets, change in fair value of contingent consideration, and acquisition costs; includes results for POS Portal acquisition from July 31, 2017: Range from $940 million to $1 billion Net Sales Includ
Slide 14: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Operating Income, Pre-Tax Income, Net Income & EPS – QTR ($ in thousands) Quarter Ended June 30, 2017 Operating Pre-tax Net Diluted Income income income EPS GAAP measure $ 22,111 $ 23,420 $ 18,970 $ 0.74 Adjustments: Amortization of intangible assets 3,987 3,
Slide 15: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Operating Income, Pre-Tax Income, Net Income & EPS – Full Year ($ in thousands) Year Ended June 30, 2017 Operating Pre-tax Net Diluted Income income income EPS GAAP measure $ 88,239 $ 101,495 $ 69,246 $ 2.71 Adjustments: Amortization of intangible assets 15,5
Slide 16: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Net Sales, Constant Currency and Excluding Acquisitions (Organic Growth) – QTR ($ in thousands) WW Barcode, WW Comms. NW & Security & Services Consolidated For the quarter ended June 30, 2017: Q4 FY17 net sales, as reported $ 619,241 $ 298,050 $ 917,291 Forei
Slide 17: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Net Sales, Constant Currency and Excluding Acquisitions (Organic Growth) – Full Year ($ in thousands) WW Barcode, WW Comms. NW & Security & Services Consolidated For the year ended June 30, 2017: FY17 net sales, as reported $ 2,389,256 $ 1,178,930 $ 3,568,186
Slide 18: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Highlights by Segment – QTR Quarter Ended June 30, 2017 ($ in thousands) WW Barcode, WW Comms. NW & Security & Services Corporate Consolidated Net sales $ 619,241 $ 298,050 $ - $ 917,291 GAAP operating income $ 12,997 $ 9,536 $ (422) $ 22,111 Adjustments: Amo
Slide 19: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Highlights by Segment – QTR Quarter Ended June 30, 2016 (a) ($ in thousands) WW Barcode, WW Comms. NW & Security & Services Corporate Consolidated Net sales $ 581,346 $ 296,127 $ - $ 877,473 GAAP operating income $ 8,808 $ 10,683 $ (553) $ 18,938 Adjustments:
Slide 20: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Highlights by Segment – Full Year Year Ended June 30, 2017 ($ in thousands) WW Barcode, NW & WW Comms. Security & Services Corporate Consolidated Net sales $ 2,389,256 $ 1,178,930 $ - $ 3,568,186 GAAP operating income $ 49,727 $ 39,768 $ (1,256) $ 88,239 Adju
Slide 21: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Adjusted Return on Invested Capital ($ in thousands) Q4 FY17 Q3 FY17 Q2 FY17 Q1 FY17 Q4 FY16 Adjusted return on invested capital (ROIC), annualized (a) 13.2% 12.6% 13.8% 13.1% 10.1% Reconciliation of Net Income to Adjusted EBITDA Net income - GAAP $ 18,970 $
Slide 22: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Forecasted Range for EPS – Q1 FY18 Outlook ($ in thousands) Forecast for Quarter ending September 30, 2017 Range Low Range High GAAP diluted EPS $ 0.49 $ 0.55 Adjustments: Amortization of intangible assets 0.13 0.13 Change in fair value of contingent consider