ScanSource Reports Strong Fourth Quarter Results
Staff Report From Greenville CEO
Wednesday, August 29th, 2018
ScanSource, Inc., a leading global provider of technology products and solutions, announced financial results for the fourth quarter ended June 30, 2018.
Quarter ended June 30, | Year ended June 30, | ||||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||||
(in millions, except per share data) | (in millions, except per share data) | ||||||||||||||||||||||
Net sales | $ | 993.9 | $ | 917.3 | 8 | % | $ | 3,846 | $ | 3,568 | 8 | % | |||||||||||
Operating income | 19.8 | 22.1 | (11 | )% | 67.6 | 88.2 | (23 | )% | |||||||||||||||
Non-GAAP operating income(1) | 30.8 | 27.8 | 11 | % | 124.0 | 110.2 | 12 | % | |||||||||||||||
GAAP net income | 10.4 | 19.0 | (45 | )% | 33.2 | 69.2 | (52 | )% | |||||||||||||||
Non-GAAP net income(1) | 19.9 | 17.3 | 15 | % | 79.8 | 70.3 | 14 | % | |||||||||||||||
GAAP diluted EPS | $ | 0.40 | $ | 0.74 | (46 | )% | $ | 1.29 | $ | 2.71 | (52 | )% | |||||||||||
Non-GAAP diluted EPS(1) | $ | 0.77 | $ | 0.68 | 13 | % | $ | 3.11 | $ | 2.75 | 13 | % | |||||||||||
(1) Non-GAAP results exclude amortization of intangible assets related to acquisitions, change in fair value of contingent consideration and other non-GAAP items. A reconciliation of non-GAAP financial information to GAAP financial information is presented in the Supplementary Information (Unaudited) below. | |||||||||||||||||||||||
“We delivered outstanding fourth quarter sales and gross profit growth, capping a year of progress in executing our growth initiatives," said Mike Baur, CEO, ScanSource, Inc. "We want to congratulate our teams worldwide on achieving these excellent results. Investments we are making in our business are positioning us to accelerate our profitable growth."
Quarterly Results
For the fourth quarter of fiscal year 2018, net sales increased 8% to $993.9 million, driven by sales growth in both Worldwide segments. Organic sales growth, which excludes the impact from foreign currency translation and a recent acquisition, was 5.0%. Operating income decreased to $19.8 million largely as a result of increased expense for the change in fair value of the contingent consideration. Non-GAAP operating income increased 11% to $30.8 million, primarily from higher net sales and the addition of the POS Portal acquisition.
On a GAAP basis, net income for the quarter totaled $10.4 million, or $0.40 per diluted share, compared with net income of $19.0 million, or $0.74 per diluted share, for the prior-year quarter. Non-GAAP net income for the fourth quarter of fiscal year 2018 increased 15% to $19.9 million, or $0.77 per diluted share, compared to $17.3 million, or $0.68 per diluted share, for the prior-year quarter.
Full-Year Results
For the full fiscal year 2018, net sales increased 8% to $3.8 billion. Operating income decreased to $67.6 million, due to additional expense for the change in the fair value of the contingent consideration. Non-GAAP operating income increased 12% to $124.0 million, primarily from higher sales volumes, higher gross margin and the addition of the POS Portal acquisition.
On a GAAP basis, net income for the fiscal year 2018 totaled $33.2 million, or $1.29 per diluted share, compared to net income of $69.2 million, or $2.71 per diluted share, for the prior year. Non-GAAP net income for the year increased 14% to $79.8 million, or $3.11 per diluted share, compared to $70.3 million, or $2.75 per diluted share, for the prior year.
Forecast for Next Quarter
For the first quarter of fiscal year 2019, ScanSource expects net sales to range from $950 million to $1.01 billion, diluted earnings per share to range from $0.56 to $0.62 per share and non-GAAP diluted earnings per share to range from $0.83 to $0.89 per share. Non-GAAP diluted earnings per share exclude amortization of intangible assets related to acquisitions and change in fair value of contingent consideration and other non-GAAP items.