Slide 1: Q1 FY16 Financial Results Conference Call
Q1 FY16 FINANCIAL RESULTS CONFERENCE CALL October 29, 2015 at 5:00 pm ET
Slide 2: Safe Harbor
SAFE HARBOR This presentation may contain certain comments, which are Although ScanSource believes the expectations in its “forward-looking” statements that involve plans, strategies, forward-looking statements are reasonable, it cannot economic performance and trends, projections, expectations, gua
Slide 3: Highlights – Q1 FY16
HIGHLIGHTS – Q1 FY16 Record net sales of $871 million, up 10% Y/Y, and non-GAAP diluted EPS of $0.68*; within or above expected ranges Gross profit margin of 10.1%; non-GAAP operating margin of 3.3%* Acquisition of KBZ completed September 4, 2015 Three acquisitions during the past year – Ima
Slide 4: Highlights – Q1 FY16
HIGHLIGHTS – Q1 FY16 Non-GAAP* In millions, except EPS Q1 FY16 Q1 FY15 Y/Y Change: Net sales $870.8 $791.7 +10%;+15% constant currency Gross profit 87.6 77.6 +13% Gross profit margin % 10.1% 9.8% +25 bps SG&A expenses 56.8 45.8 +24% SAP-related ERP costs 2.4 -- Non-GAAP operating income 28.4 31.8 -1
Slide 5: WW Barcode & Security
WW BARCODE & SECURITY Net Sales, $ in millions Q1 FY16 Q4 FY15 Q1 FY15 Up 3% $ in millions Constant Currency, Up 10% Net sales $515.7 $489.6 $501.0 $501 $516 Gross profit $44.7 $44.4 $43.0 Acqs. Gross margin 8.7% 9.1% 8.6% Operating income $13.1 $12.2 $12.5 Operating income % 2.5% 2.5% 2.5% Non-GAAP
Slide 6: WW Communications & Services
WW COMMUNICATIONS & SERVICES Net Sales, $ in millions Q1 FY16 Q4 FY15 Q1 FY15 Up 22% $ in millions Constant Currency, Up 23% Net sales $355.2 $367.1 $290.8 $355 Gross profit $42.9 $46.9 $34.6 Acqs. $291 Gross margin 12.1% 12.8% 11.9% Operating income $11.6 $12.9 $17.8 Operating income % 3.3% 3.5% 6.
Slide 7: Working Capital Measures
WORKING CAPITAL MEASURES $ in millions Q1 FY16 Q4 FY15 Q1 FY15 Accounts receivable (Q/E) $588.0 $522.5 $500.0 Days sales outstanding in receivables 56* 55 55** Inventory (Q/E) $588.2 $553.1 $495.1 Inventory turns 5.3* 5.9 5.7** Accounts payable (Q/E) $516.1 $501.3 $423.5 Paid for inventory days 13.0
Slide 8: Cash Flow and Balance Sheet Highlights
CASH FLOW AND BALANCE SHEET HIGHLIGHTS $ in millions Q1 FY16 Q4 FY15 Q1 FY15 Return on invested capital (“ROIC”)* 14.6% 15.2% 16.2% Operating cash flow, trailing 12-months $17.1 $75.5 $2.7 Cash and cash equivalents (Q/E) $41.2 $121.6 $139.9 Debt (Q/E) $94.5 $8.8 $5.4 Net debt to EBITDA, trailing 12-
Slide 9: Q2 FY16 Outlook
Q2 FY16 OUTLOOK* For the quarter ending December 31, 2015, excluding amortization of intangible assets, change in fair value of contingent consideration, and acquisition costs: Net Sales Range from $900 million to $980 million Non-GAAP Diluted Range from $0.72 to $0.80 per share Earnings Per Sha
Slide 10: Appendix: Non-GAAP Financial Information – Income Statement Highlights
APPENDIX: NON-GAAP FINANCIAL INFORMATION Income Statement Highlights ($ in thousands) Q1 FY16 Q4 FY15 Q1 FY15 Non- Non- Non- GAAP GAAP GAAP GAAP GAAP GAAP Net sales $870,829 $870,829 $856,685 $856,685 $791,720 $791,720 Gross profit 87,552 87,552 91,318 91,318 77,645 77,645 Gross profit margin % (of
Slide 11: Appendix: Non-GAAP Financial Information – Operating Income, Net Income & EPS
APPENDIX: NON-GAAP FINANCIAL INFORMATION Operating Income, Net Income & EPS ($ in thousands) Quarter Ended September 30, 2015 Operating Pre-tax Net Diluted Income income income EPS GAAP measure $ 24,441 $ 24,422 $ 15,996 $ 0.57 Adjustment: Amortization of intangible assets 2,185 2,185 1,597 0.06 Cha
Slide 12: Appendix: Non-GAAP Financial Information – Highlights by Segment
APPENDIX: NON-GAAP FINANCIAL INFORMATION Highlights by Segment ($ in thousands) Quarter Ended September 30, 2015 WW Barcode WW Comms. & Security & Services Corporate Consolidated Net sales $ 515,669 $ 355,160 $ - $ 870,829 GAAP operating income $ 13,082 $ 11,579 $ (220) $ 24,441 Adjustments: Amortiz
Slide 13: Appendix: Non-GAAP Financial Information – Return on Invested Capital
APPENDIX: NON-GAAP FINANCIAL INFORMATION Return on Invested Capital ($ in thousands) Q1 FY16 Q4 FY15 Q1 FY15 Return on invested capital (ROIC), annualized (a) 14.6% 15.2% 16.2% Reconciliation of Net Income to EBITDA Net income - GAAP $ 15,996 $ 16,447 $ 19,208 Plus: Income taxes 8,426 8,464 10,028 P
Slide 14: Appendix: Non-GAAP Financial Information – Constant Currency Net Sales
APPENDIX: NON-GAAP FINANCIAL INFORMATION Net Sales, Constant Currency and Excluding Acquisitions ($ in thousands) Y/Y % Q1 FY16 Q1 FY15 Change Worldwide Barcode & Security: Net sales, as reported $ 515,669 $ 500,960 2.9% Foreign exchange impact (a) 34,260 - Net sales, constant currency $ 549,929 $ 5