ScanSource, Inc. Reports Unaudited Consolidated Earnings Results for the Fourth Quarter and Year Ended June 30, 2018; Provides Earnings Guidance for the First Quarter of 2019 and Provides Effective Tax Rate Guidance for Fiscal Year 2019
August 28, 2018 at 04:05 pm
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ScanSource, Inc. reported unaudited consolidated earnings results for the fourth quarter and year ended June 30, 2018. For the quarter, the company reported net sales of $993,852,000 compared to $917,291,000 a year ago. Operating income was $19,759,000 compared to $22,111,000 a year ago. Income before income taxes was $18,043,000 compared to $23,420,000 a year ago. Net income was $10,388,000 or $0.41 per basic and $0.40 per diluted share compared to $18,970,000 or $0.75 per basic and $0.74 per diluted share a year ago. EBITDA was $29,828,000 compared to $30,630,000 a year ago. Adjusted EBITDA (non-GAAP) was $35,157,000 compared to $30,960,000 a year ago. On non-GAAP basis, operating income was $30.8 million, net income was $19.9 million or diluted EPS was $0.77 compared to operating income of $27.8 million, net income of $17.3 million or diluted EPS of $0.68 for the same period a year ago. The company had $31 million of operating cash flow for the fourth quarter and $28 million for the fiscal year 2018. GAAP EPS includes a higher-than-expected expense for the change in fair value of contingent consideration as a result of better-than-expected results for Network1 in Brazil. Fourth quarter E GAAP EPS also included an $0.08 benefit from a favorable tax recovery in Brazil, which was a recovery of tax overpayments over the past 8 years. The company's non-GAAP result exclude this benefit from the favorable tax recovery. Operating income decreased largely as a result of increased expense for the change in fair value of the contingent consideration. Non-GAAP operating income increased 11%, primarily from higher net sales and the addition of the POS Portal acquisition. Non-GAAP pre-tax income was $28,428,000 against $27,737,000 a year ago.
For the year, the company reported net sales of $3,846,260,000 compared to $3,568,186,000 a year ago. Operating income was $67,639,000 compared to $88,239,000 a year ago. Income before income taxes was $60,925,000 compared to $101,495,000 a year ago. Net income was $33,153,000 or $1.30 per basic and $1.29 per diluted share compared to $69,246,000 or $2.74 per basic and $2.71 per diluted share a year ago. EBITDA was $107,569,000 compared to $129,678,000 a year ago. Adjusted EBITDA (non-GAAP) was $142,617,000 compared to $121,986,000 a year ago. On non-GAAP basis, operating income of $124.0 million, net income of $79.8 million or diluted EPS of $3.11 compared to operating income was $110.2 million, net income was $70.3 million or diluted EPS was $2.75 for the same period a year ago. Non-GAAP operating income increased 12%, primarily from higher sales volumes, higher gross margin and the addition of the POS Portal acquisition. Non-GAAP pre-tax income was $116,630,000 against $109,327,000 a year ago.
For the first quarter of fiscal year 2019, the company 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. . The midpoint of forecast range reflects organic sales growth of somewhere between 6% to 7% for both segments and a gross profit margin that's a little over 11%. For the first quarter of fiscal 2019, the company assumes approximately $2.8 million for interest expense. For the first quarter fiscal 2019, the company estimates the tax range -- tax rate to be in the range of 26% to 27%. The company expects amortization of intangible assets of $0.14 per share.
For fiscal year 2019, the company estimates the effective tax rate to range from 26% to 27%.
ScanSource, Inc. is a hybrid distributor connecting devices to partners across hardware, software-as-a-service (SaaS), connectivity and cloud. The Company provides technology solutions and services from suppliers of mobility, barcode, point-of-sale (POS), payments, physical security and networking, communications and collaboration, connectivity and cloud services. It segments include Specialty Technology Solutions and Modern Communications & Cloud. Its Specialty Technology Solutions segment includes enterprise mobile computing, data capture, barcode printing, POS, payments, networking, electronic physical security, cyber security and other technologies. Its Modern Communications & Cloud segment includes communications technologies and services for voice, video conferencing, wireless, data networking, cyber security, cable, unified communications and collaboration, cloud and technology services. Its segments operate in the United States, Canada, Brazil and the United Kingdom.
ScanSource, Inc. Reports Unaudited Consolidated Earnings Results for the Fourth Quarter and Year Ended June 30, 2018; Provides Earnings Guidance for the First Quarter of 2019 and Provides Effective Tax Rate Guidance for Fiscal Year 2019