Slide 1: Q2 FY16 Financial Results Conference Call
Q2 FY16 FINANCIAL RESULTS CONFERENCE CALL February 9, 2016 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 – Q2 FY16
HIGHLIGHTS – Q2 FY16 Exceptional growth and profitability Record net sales of $994 million, up 23% Y/Y, or 5% in constant currency, excluding acquisitions Record non-GAAP diluted EPS of $0.88*, up 29% Y/Y Second quarter 2016 return on invested capital of 17.5%* Strong demand led by large d
Slide 4: Highlights – Q2 FY16
HIGHLIGHTS – Q2 FY16 Q2 FY16 Q2 FY15 Change In millions, except EPS Net sales $993.5 $807.0 23% Gross profit 100.6 78.1 29% Gross profit margin % (of net sales) 10.1% 9.7% 45 bps Operating income 31.9 26.0 23% Non-GAAP operating income 36.3 29.4 24% GAAP net income 20.7 16.8 23% Non-GAAP net income
Slide 5: Sales Growth Summary
SALES GROWTH SUMMARY SECOND QTR: Q2 FY16 – Y/Y % CHANGE Constant Currency, As Constant excluding Reported Currency Acquisitions WW Barcode & Security 26.0% 31.9% 7.8% WW Comms. & Services 17.0% 18.3% -0.5% Consolidated 23.1% 27.5% 5.1% SIX MONTHS: Q2 FY16 YTD – Y/Y % CHANGE Constant Currency, As Con
Slide 6: WW Barcode & Security
WW BARCODE & SECURITY Net Sales, $ in millions Up 26% Q2 FY16 Q2 FY15 Constant Currency Excluding $ in millions Acquisitions, Up 8% Net sales $689.5 $547.2 $690 Gross profit $57.7 $43.6 Acqs. & FX $547 Gross margin 8.4% 8.0% Operating income $19.0 $13.3 Operating income % 2.8% 2.4% Non-GAAP operatin
Slide 7: WW Communications & Services
WW COMMUNICATIONS & SERVICES Net Sales, $ in millions Up 17% Q2 FY16 Q2 FY15 $ in millions Constant Currency Excluding Acquisitions, Down 0.5% Net sales $304.0 $259.8 $304 Gross profit $42.9 $34.5 $260 Acqs. & FX Gross margin 14.1% 13.3% Operating income $12.9 $14.2 Operating income % 4.2% 5.5% Non-
Slide 8: Working Capital Measures
WORKING CAPITAL MEASURES $ in millions Q2 FY16 Q1 FY16 Q2 FY15 Accounts receivable (Q/E) $588.4 $588.0 $490.7 Days sales outstanding in receivables 53 56* 55 Inventory (Q/E) $604.1 $588.2 $518.4 Inventory turns 6.0 5.3* 5.8 Accounts payable (Q/E) $512.0 $516.1 $419.6 Paid for inventory days 9.3 13.0
Slide 9: Cash Flow and Balance Sheet Highlights
CASH FLOW AND BALANCE SHEET HIGHLIGHTS $ in millions Q2 FY16 Q1 FY16 Q2 FY15 Return on invested capital (“ROIC”)* 17.5% 14.6% 14.8% Operating cash flow, trailing 12-months $44.7 $17.1 $36.7 Cash and cash equivalents (Q/E) $39.4 $41.2 $121.5 Debt (Q/E) $115.1 $94.5 $5.4 Net debt to EBITDA, trailing 1
Slide 10: Q3 FY16 Outlook
Q3 FY16 OUTLOOK* For the quarter ending March 31, 2016, excluding amortization of intangible assets, change in fair value of contingent consideration, and acquisition costs: Net Sales Range from $850 million to $900 million Non-GAAP Diluted Range from $0.62 to $0.70 per share Earnings Per Share
Slide 11: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Operating Income, Net Income & EPS ($ in thousands) Quarter Ended December 31, 2015 Operating Pre-tax Net Diluted Income income income EPS GAAP measure $ 31,852 $ 31,632 $ 20,656 $ 0.77 Adjustment: Amortization of intangible assets 2,545 2,545 1,732 0.06 Chan
Slide 12: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Highlights by Segment – Y/Y ($ in thousands) Quarter Ended December 31, 2015 WW Barcode WW Comms. & Security & Services Corporate Consolidated Net sales $ 689,530 $ 303,992 $ - $ 993,522 GAAP operating income $ 19,000 $ 12,912 $ (60) $ 31,852 Adjustments: Amo
Slide 13: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Return on Invested Capital ($ in thousands) Q2 FY16 Q1 FY16 Q2 FY15 Return on invested capital (ROIC), annualized (a) 17.5% 14.6% 14.8% Reconciliation of Net Income to EBITDA Net income - GAAP $ 20,656 $ 15,996 $ 16,821 Plus: Income taxes 10,976 8,426 9,117 P
Slide 14: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Net Sales, Constant Currency and Excluding Acquisitions - QTR ($ in thousands) WW Barcode & WW Comms. Security & Services Consolidated For the quarter ended December 31, 2015: Q2 FY16 net sales, as reported $ 689,530 $ 303,992 $ 993,522 Foreign exchange negat
Slide 15: Appendix: Non-GAAP Financial Information
APPENDIX: NON-GAAP FINANCIAL INFORMATION Net Sales, Constant Currency and Excluding Acquisitions - YTD ($ in thousands) WW Barcode & WW Comms. Security & Services Consolidated For the six months ended December 31, 2015: Q2 FY16 YTD net sales, as reported $ 1,263,199 $ 601,151 $ 1,864,350 Foreign exc