Slide 1: Q1 FY17 Financial Results Conference Call
Q1 FY17 FINANCIAL RESULTS CONFERENCE CALL November 7, 2016 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 • Net sales, GAAP EPS and non-GAAP EPS exceed forecast Solid 1Q17 • Net sales of $933 million, up 7% Y/Y, from more big deals and growth in business in North America, including acquisitions • Net sales rebounded strongly from the June quarter, up $55 million Operating and 6% Q/Q Results •
Slide 4: Acquisition of Intelisys
ACQUISITION OF INTELISYS ABOUT INTELISYS TRANSACTION Industry-leading technology services distributor of business $83.6 4 years telecommunications and cloud services EBITDA MILLION EARN-OUT EARN-OUT High-growth, recurring revenue model for the channel; two-tier INITIAL PURCHASE PERIOD BASED ON s
Slide 5: Actual vs. Forecast
ACTUAL VS. FORECAST FIRST QUARTER: Q1 FY17 Forecast Actual, Actual, Range, Intelisys excluding including excluding Only** Intelisys Intelisys Intelisys* Net Sales $875 to $925 $929.7 $2.9 $932.6 In millions GAAP EPS $0.49 to $0.57 $0.58 $(0.00) $0.58 Non-GAAP EPS $0.60 to $0.68 $0.65 $0.03 $0.68 * O
Slide 6: Highlights – Q1 FY17
HIGHLIGHTS – Q1 FY17 Q1 FY17 Q1 FY16 Change In millions, except EPS Net sales $932.6 $870.8 +7% Gross profit 91.5 87.6 +5% Gross profit margin % (of net sales) 9.8% 10.1% -24 bps Operating income 22.9 24.4 -6% Non-GAAP operating income 26.7 28.4 -6% GAAP net income 14.8 16.0 -7% Non-GAAP net income
Slide 7: WW Barcode, Networking & Security
WW BARCODE, NETWORKING & SECURITY Net Sales, $ in millions Up 10% Q1 FY17 Q1 FY16 Organic Growth, -1.5% $ in millions $633 Net sales $633.4 $573.7 $574 Acqs. & FX Acqs. Gross profit $50.1 $48.0 Gross margin 7.9% 8.4% Operating income $13.5 $13.8 Operating income % 2.1% 2.4% Non-GAAP operating income
Slide 8: WW Communications & Services
WW COMMUNICATIONS & SERVICES Net Sales, $ in millions Up 1% Q1 FY17 Q1 FY16 $ in millions Organic Growth, -1% Net sales $299.2 $297.2 $297 $299 Acqs. & FX Gross profit $41.4 $39.5 Gross margin 13.9% 13.3% Operating income $9.9 $10.8 Operating income % 3.3% 3.7% Non-GAAP operating income $12.2 $13.9
Slide 9: Working Capital Measures
WORKING CAPITAL MEASURES $ in millions Q1 FY17 Q4 FY16 Q1 FY16 Accounts receivable (Q/E) $637.8 $559.6 $588.0 Days sales outstanding in receivables* 59* 57 56** Inventory (Q/E) $567.3 $558.6 $588.2 Inventory turns 6.0 5.6 5.3** Accounts payable (Q/E) $533.0 $471.5 $516.1 Paid for inventory days* 6.0
Slide 10: Cash Flow and Balance Sheet Highlights
CASH FLOW AND BALANCE SHEET HIGHLIGHTS $ in millions Q1 FY17 Q4 FY16 Q1 FY16 Adjusted return on invested capital (QTR)* 13.1% 10.1% 14.6% Operating cash flow, trailing 12-months $116.2 $52.2 $17.1 Cash and cash equivalents (Q/E) $45.1 $61.4 $41.2 Debt (Q/E) $166.1 $76.9 $94.5 Net debt to adjusted EB
Slide 11: Q2 FY17 Outlook
Q2 FY17 OUTLOOK* For the quarter ending December 31, 2016, excluding amortization of intangible assets, change in fair value of contingent consideration, and acquisition costs: Net Sales Range from $930 million to $980 million GAAP Range from $0.47 to $0.53 per share Diluted EPS Non-GAAP Range
Slide 12: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Operating Income, Pre-Tax Income, Net Income & EPS – QTR ($ in thousands) Quarter Ended September 30, 2016 Operating Pre-tax Net Diluted Income income income EPS GAAP measure $ 22,875 $ 22,724 $ 14,816 $ 0.58 Adjustments: Amortization of intangible assets 3,1
Slide 13: 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 September 30, 2016: Q1 FY17 net sales, as reported $ 633,405 $ 299,161 $ 932,566 Foreign exchange
Slide 14: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Highlights by Segment – Y/Y for 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
Slide 15: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Adjusted Return on Invested Capital ($ in thousands) Q1 FY17 Q4 FY16 Q3 FY16 Q2 FY16 Q1 FY16 Adjusted return on invested capital (ROIC), annualized (a) 13.1% 10.1% 12.3% 17.5% 14.6% Reconciliation of Net Income to EBITDA Net income - GAAP $ 14,816 $ 12,925 $
Slide 16: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Forecasted Range for EPS – Q2FY17 Outlook ($ in thousands) Forecast for Quarter ended December 31, 2016 Range Low Range High GAAP diluted EPS $ 0.47 $ 0.53 Adjustments: Amortization of intangible assets 0.11 0.11 Change in fair value of contingent considerati