ý
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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South Carolina
(State or other jurisdiction of
incorporation or organization)
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57-0965380
(I.R.S. Employer
Identification No.)
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6 Logue Court
Greenville, South Carolina
(Address of principal executive offices)
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29615
(Zip Code)
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Title of Each Class
|
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Name of Each Exchange on Which Registered
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Common Stock, no par value
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NASDAQ Global Select Market
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
(Do not check if a smaller reporting company)
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¨
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Smaller reporting company
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¨
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Class
|
|
Outstanding at August 22, 2013
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Common Stock, no par value per share
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28,070,326 shares
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Page
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|
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Item 1.
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||
Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Mine Safety Disclosures
|
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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||
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•
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AIDC technology incorporates the capabilities for electronic identification and data processing without the need for manual input and consists of a wide range of products that include portable data collection terminals, wireless products, bar code label printers and scanners. As AIDC technology has become more pervasive, applications have evolved from traditional uses such as inventory control, materials handling, distribution, shipping and warehouse management to more advanced applications, such as health care.
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•
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POS products include those computer-based systems that have replaced electronic cash registers in grocery, retail and hospitality environments. POS product lines include computer-based terminals, monitors, receipt printers, pole displays, cash drawers, keyboards, peripheral equipment and fully integrated processing units. In addition, ScanSource POS and Barcode business units sell products that attach to the POS network in the store, including kiosks, network access points, routers and digital signage displays.
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•
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Electronic physical security products include identification, access control, video surveillance and intrusion-related products, and networking. Physical security products are used every day across every vertical market to protect lives, property and information; there is a heavy penetration into schools, municipalities, correctional institutions and retail environments. Physical security products are deployed across both wired and wireless infrastructures and often serve as the backbone of the solution. These technology products require specialized knowledge to deploy effective solutions, and ScanSource Security offers in-depth training and education to its partners to enable them to maintain the appropriate skill levels.
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•
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In Communications, voice and data products include private branch exchanges ("PBXs"), key systems, telephone handsets and components used in voice, fax, data, voice recognition, call center management and IP communication applications. Converged communication products combine voice, data, fax and speech technologies to deliver communications solutions that combine computers, telecommunications and the Internet. Converged communications products include telephone and IP network interfaces, Voice over Internet Protocol ("VoIP") systems, PBX integration products and carrier-class board systems-level products. Video products include video and voice conferencing and network systems; and data networking products include switches, servers and routers.
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•
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Through our ScanSource Services Group business unit, we deliver value-added support programs and services, including education and training, customer configuration, marketing services, network assessments, WiFi services, and partnership programs, including our SUMO partner directory. ScanSource Services Group focuses on reducing complexity, building efficiency, and helping our resellers grow their businesses.
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ITEM 1A.
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Risk Factors.
|
•
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Changes in international trade laws, such as the North American Free Trade Agreement, affecting our import and export activities, including export license requirements, restrictions on the export of certain technology, and tariff changes;
|
•
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Difficulties in collecting accounts receivable and longer collection periods;
|
•
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Changes in, or expiration of, various foreign incentives that provide economic benefits to us;
|
•
|
Changes in labor laws and regulations affecting our ability to hire and retain employees;
|
•
|
Difficulties in staffing and managing operations in foreign countries;
|
•
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Fluctuations of foreign currency, exchange controls and currency devaluations;
|
•
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Changes in the interpretation and enforcement of laws (in particular related to items such as duty and taxation);
|
•
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Potential political and economic instability and changes in governments;
|
•
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Compliance with foreign and domestic import and export regulations and anti-corruption laws, including the Iran Threat Reduction and Syria Human Rights Act of 2012, U.S. Foreign Corrupt Practices Act, or similar laws of other jurisdictions for our business activities outside the United States, the violation of which could result in severe penalties including monetary fines, criminal proceedings and suspension of export privileges;
|
•
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Terrorist or military actions that result in destruction or seizure of our assets or suspension or disruption of our operations or those of our customers;
|
•
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Natural disasters, power shortages, telecommunication failures, water shortages, fires, medical epidemics or pandemics, and other manmade or natural disasters or business interruptions in a region or specific country;
|
•
|
Potential regulatory changes, including foreign environmental restrictions; and
|
•
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Different general economic conditions.
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ITEM 2.
|
Properties.
|
ITEM 3.
|
Legal Proceedings.
|
ITEM 4.
|
Mine Safety Disclosures.
|
ITEM 5.
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Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
|
High
|
|
Low
|
||||
Fiscal Year 2013
|
|
|
|
||||
First quarter
|
$
|
33.78
|
|
|
$
|
26.41
|
|
Second quarter
|
32.55
|
|
|
27.06
|
|
||
Third quarter
|
34.08
|
|
|
28.15
|
|
||
Fourth quarter
|
34.84
|
|
|
25.83
|
|
||
Fiscal Year 2012
|
|
|
|
||||
First quarter
|
$
|
40.00
|
|
|
$
|
27.20
|
|
Second quarter
|
38.05
|
|
|
28.53
|
|
||
Third quarter
|
39.74
|
|
|
34.46
|
|
||
Fourth quarter
|
38.06
|
|
|
28.03
|
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
||||||||||||
ScanSource, Inc.
|
$
|
100
|
|
|
$
|
92
|
|
|
$
|
93
|
|
|
$
|
140
|
|
|
$
|
115
|
|
|
$
|
116
|
|
NASDAQ Composite
|
$
|
100
|
|
|
$
|
81
|
|
|
$
|
93
|
|
|
$
|
124
|
|
|
$
|
132
|
|
|
$
|
156
|
|
SIC Code 5045 – Computers & Peripheral Equipment
|
$
|
100
|
|
|
$
|
96
|
|
|
$
|
88
|
|
|
$
|
112
|
|
|
$
|
99
|
|
|
$
|
105
|
|
|
Fiscal Year Ended June 30,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Statement of income data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,876,964
|
|
|
$
|
3,015,296
|
|
|
$
|
2,666,531
|
|
|
$
|
2,114,979
|
|
|
$
|
1,847,969
|
|
Cost of goods sold
|
2,584,090
|
|
|
2,713,272
|
|
|
2,392,224
|
|
|
1,896,052
|
|
|
1,639,121
|
|
|||||
Gross profit
|
292,874
|
|
|
302,024
|
|
|
274,307
|
|
|
218,927
|
|
|
208,848
|
|
|||||
Selling, general and administrative expenses
|
191,216
|
|
|
188,388
|
|
|
161,326
|
|
|
143,151
|
|
|
134,730
|
|
|||||
Impairment charges
|
48,772
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Change in fair value of contingent consideration
|
1,843
|
|
|
120
|
|
|
(128
|
)
|
|
—
|
|
|
—
|
|
|||||
Operating income
|
51,043
|
|
|
113,516
|
|
|
113,109
|
|
|
75,776
|
|
|
74,118
|
|
|||||
Interest (income) expense, net
|
(1,463
|
)
|
|
(1,247
|
)
|
|
511
|
|
|
85
|
|
|
771
|
|
|||||
Other (income) expense, net
|
(520
|
)
|
|
3,552
|
|
|
712
|
|
|
(50
|
)
|
|
(2,307
|
)
|
|||||
Income before income taxes
|
53,026
|
|
|
111,211
|
|
|
111,886
|
|
|
75,741
|
|
|
75,654
|
|
|||||
Provision for income taxes
|
18,364
|
|
|
36,923
|
|
|
38,363
|
|
|
26,929
|
|
|
27,966
|
|
|||||
Net income
|
$
|
34,662
|
|
|
$
|
74,288
|
|
|
$
|
73,523
|
|
|
$
|
48,812
|
|
|
$
|
47,688
|
|
Net income per common share, basic
|
$
|
1.25
|
|
|
$
|
2.72
|
|
|
$
|
2.74
|
|
|
$
|
1.83
|
|
|
$
|
1.80
|
|
Weighted-average shares outstanding, basic
|
27,774
|
|
|
27,362
|
|
|
26,872
|
|
|
26,605
|
|
|
26,445
|
|
|||||
Net income per common share, diluted
|
$
|
1.24
|
|
|
$
|
2.68
|
|
|
$
|
2.70
|
|
|
$
|
1.82
|
|
|
$
|
1.79
|
|
Weighted-average shares outstanding, diluted
|
27,994
|
|
|
27,751
|
|
|
27,246
|
|
|
26,869
|
|
|
26,588
|
|
|
As of June 30,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
$
|
614,378
|
|
|
$
|
533,529
|
|
|
$
|
532,167
|
|
|
$
|
436,953
|
|
|
$
|
399,647
|
|
Total assets
|
1,164,183
|
|
|
1,201,806
|
|
|
1,182,188
|
|
|
859,750
|
|
|
748,631
|
|
|||||
Total long-term debt (including short-term borrowings)
|
5,429
|
|
|
9,697
|
|
|
60,106
|
|
|
30,429
|
|
|
30,429
|
|
|||||
Total shareholders’ equity
|
$
|
695,956
|
|
|
$
|
652,311
|
|
|
$
|
587,394
|
|
|
$
|
486,851
|
|
|
$
|
445,446
|
|
ITEM 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Year ended June 30, 2013
|
||||||||||
|
Pre-Tax Income
|
|
Net Income (Loss)
|
|
Diluted EPS
|
||||||
|
|
|
|
|
|
||||||
GAAP Measures
|
$
|
53,026
|
|
|
$
|
34,662
|
|
|
$
|
1.24
|
|
Adjustments:
|
|
|
|
|
|
||||||
Costs associated with Belgian tax compliance and personnel replacement costs, including related professional fees
|
2,121
|
|
|
1,400
|
|
|
0.05
|
|
|||
Impairment charges - ERP
|
28,210
|
|
|
18,015
|
|
|
0.64
|
|
|||
Impairment charges - Goodwill
|
20,562
|
|
|
15,201
|
|
|
0.54
|
|
|||
Non-GAAP measures
|
$
|
103,919
|
|
|
$
|
69,278
|
|
|
$
|
2.47
|
|
|
2013
|
|
2012
|
|
2011
|
|||
Return on invested capital ratio
|
16.0
|
%
|
|
17.2
|
%
|
|
20.6
|
%
|
Reconciliation of EBITDA to Net Income
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Net income (GAAP)
|
$
|
34,662
|
|
|
$
|
74,288
|
|
|
$
|
73,523
|
|
Plus: income taxes
|
18,364
|
|
|
36,923
|
|
|
38,363
|
|
|||
Plus: interest expense
|
775
|
|
|
1,639
|
|
|
1,723
|
|
|||
Plus: depreciation & amortization
|
8,457
|
|
|
9,580
|
|
|
6,464
|
|
|||
EBITDA
|
62,258
|
|
|
122,430
|
|
|
120,073
|
|
|||
Adjustments:
|
|
|
|
|
|
||||||
Impairment charges, including ERP, goodwill & Belgian costs
|
50,893
|
|
|
—
|
|
|
—
|
|
|||
Adjusted EBITDA (numerator for ROIC) (non-GAAP)
|
$
|
113,151
|
|
|
$
|
122,430
|
|
|
$
|
120,073
|
|
Invested capital calculations
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Equity – beginning of the year
|
$
|
652,311
|
|
|
$
|
587,394
|
|
|
$
|
486,851
|
|
Equity – end of the year
|
695,956
|
|
|
652,311
|
|
|
587,394
|
|
|||
Add:
|
|
|
|
|
|
||||||
Impairment charges, including ERP, goodwill & Belgian costs, net of tax
|
34,616
|
|
|
—
|
|
|
—
|
|
|||
Average equity, adjusted
|
691,442
|
|
|
619,853
|
|
|
537,123
|
|
|||
Average funded debt
(a)
|
15,405
|
|
|
92,125
|
|
|
46,186
|
|
|||
Invested capital (denominator)
|
$
|
706,847
|
|
|
$
|
711,978
|
|
|
$
|
583,309
|
|
Return on invested capital
|
16.0
|
%
|
|
17.2
|
%
|
|
20.6
|
%
|
|||
|
|
|
|
|
|
(a)
|
Average funded debt is calculated as the daily average amounts outstanding on our short-term and long-term interest-bearing debt.
|
|
Fiscal Year Ended June 30,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Statement of income data:
|
|
|
|
|
|
|||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
89.8
|
|
|
90.0
|
|
|
89.7
|
|
Gross profit
|
10.2
|
|
|
10.0
|
|
|
10.3
|
|
Selling, general and administrative expenses
|
6.6
|
|
|
6.2
|
|
|
6.0
|
|
Impairment charges
|
1.7
|
|
|
0.0
|
|
|
0.0
|
|
Change in fair value of contingent consideration
|
0.1
|
|
|
0.0
|
|
|
0.0
|
|
Operating income
|
1.8
|
|
|
3.8
|
|
|
4.2
|
|
Interest expense (income), net
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
Other expense (income), net
|
0.0
|
|
|
0.1
|
|
|
0.0
|
|
Income before income taxes and minority interest
|
1.8
|
|
|
3.7
|
|
|
4.2
|
|
Provision for income taxes
|
0.6
|
|
|
1.2
|
|
|
1.4
|
|
Net income
|
1.2
|
%
|
|
2.5
|
%
|
|
2.8
|
%
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Worldwide Barcode & Security
|
$
|
1,828,219
|
|
|
$
|
1,837,307
|
|
|
$
|
(9,088
|
)
|
|
(0.5
|
)%
|
Worldwide Communications & Services
|
1,048,745
|
|
|
1,177,989
|
|
|
(129,244
|
)
|
|
(11.0
|
)%
|
|||
Total net sales
|
$
|
2,876,964
|
|
|
$
|
3,015,296
|
|
|
$
|
(138,332
|
)
|
|
(4.6
|
)%
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
North American sales units
|
$
|
2,139,723
|
|
|
$
|
2,236,459
|
|
|
$
|
(96,736
|
)
|
|
(4.3
|
)%
|
International sales units
|
737,241
|
|
|
778,837
|
|
|
(41,596
|
)
|
|
(5.3
|
)%
|
|||
Total net sales
|
$
|
2,876,964
|
|
|
$
|
3,015,296
|
|
|
$
|
(138,332
|
)
|
|
(4.6
|
)%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
2013
|
|
2012
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode & Security
|
$
|
168,123
|
|
|
$
|
169,080
|
|
|
$
|
(957
|
)
|
|
(0.6
|
)%
|
|
9.2
|
%
|
|
9.2
|
%
|
Worldwide Communications & Services
|
124,751
|
|
|
132,944
|
|
|
(8,193
|
)
|
|
(6.2
|
)%
|
|
11.9
|
%
|
|
11.3
|
%
|
|||
Total gross profit
|
$
|
292,874
|
|
|
$
|
302,024
|
|
|
$
|
(9,150
|
)
|
|
(3.0
|
)%
|
|
10.2
|
%
|
|
10.0
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
2013
|
|
2012
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative expense
|
$
|
191,216
|
|
|
$
|
188,388
|
|
|
$
|
2,828
|
|
|
1.5
|
%
|
|
6.6
|
%
|
|
6.2
|
%
|
Impairment charges
|
48,772
|
|
|
—
|
|
|
48,772
|
|
|
100.0
|
%
|
|
1.7
|
%
|
|
—
|
%
|
|||
Change in fair value of contingent consideration
|
1,843
|
|
|
120
|
|
|
1,723
|
|
|
1,435.8
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|||
Operating expense
|
$
|
241,831
|
|
|
$
|
188,508
|
|
|
$
|
53,323
|
|
|
28.3
|
%
|
|
8.4
|
%
|
|
6.2
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
2013
|
|
2012
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
||||||||||||
Worldwide Barcode & Security
|
$
|
34,665
|
|
|
$
|
56,669
|
|
|
$
|
(22,004
|
)
|
|
(38.8
|
)%
|
|
1.9
|
%
|
|
3.1
|
%
|
Worldwide Communications & Services
|
44,588
|
|
|
56,847
|
|
|
(12,259
|
)
|
|
(21.6
|
)%
|
|
4.3
|
%
|
|
4.8
|
%
|
|||
Corporate
|
(28,210
|
)
|
|
—
|
|
|
(28,210
|
)
|
|
nm
|
|
|
nm
|
|
|
—
|
%
|
|||
Total operating income
|
$
|
51,043
|
|
|
$
|
113,516
|
|
|
$
|
(62,473
|
)
|
|
(55.0
|
)%
|
|
1.8
|
%
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
2013
|
|
2012
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Interest expense
|
$
|
775
|
|
|
$
|
1,639
|
|
|
$
|
(864
|
)
|
|
(52.7
|
)%
|
|
—
|
%
|
|
0.1
|
%
|
Interest income
|
(2,238
|
)
|
|
(2,886
|
)
|
|
648
|
|
|
(22.5
|
)%
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
|||
Net foreign exchange losses (gains)
|
(32
|
)
|
|
3,766
|
|
|
(3,798
|
)
|
|
(100.8
|
)%
|
|
—
|
%
|
|
0.1
|
%
|
|||
Other, net
|
(488
|
)
|
|
(214
|
)
|
|
(274
|
)
|
|
128.0
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Total other (income) expense
|
$
|
(1,983
|
)
|
|
$
|
2,305
|
|
|
$
|
(4,288
|
)
|
|
(186.0
|
)%
|
|
(0.1
|
)%
|
|
0.1
|
%
|
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Worldwide Barcode & Security
|
$
|
1,837,307
|
|
|
$
|
1,615,461
|
|
|
$
|
221,846
|
|
|
13.7
|
%
|
Worldwide Communications & Services
|
1,177,989
|
|
|
1,051,070
|
|
|
126,919
|
|
|
12.1
|
%
|
|||
Total net sales
|
$
|
3,015,296
|
|
|
$
|
2,666,531
|
|
|
$
|
348,765
|
|
|
13.1
|
%
|
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
North American distribution sales units
|
$
|
2,236,459
|
|
|
$
|
2,022,668
|
|
|
$
|
213,791
|
|
|
10.6
|
%
|
International distribution sales units
|
778,837
|
|
|
643,863
|
|
|
134,974
|
|
|
21.0
|
%
|
|||
Total net sales
|
$
|
3,015,296
|
|
|
$
|
2,666,531
|
|
|
$
|
348,765
|
|
|
13.1
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|
2012
|
|
2011
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode & Security
|
$
|
169,080
|
|
|
$
|
154,035
|
|
|
$
|
15,045
|
|
|
9.8
|
%
|
|
9.2
|
%
|
|
9.5
|
%
|
Worldwide Communications & Services
|
132,944
|
|
|
120,272
|
|
|
12,672
|
|
|
10.5
|
%
|
|
11.3
|
%
|
|
11.4
|
%
|
|||
Total gross profit
|
$
|
302,024
|
|
|
$
|
274,307
|
|
|
$
|
27,717
|
|
|
10.1
|
%
|
|
10.0
|
%
|
|
10.3
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|
2012
|
|
2011
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Selling, general and administrative expense
|
$
|
188,388
|
|
|
$
|
161,326
|
|
|
$
|
27,062
|
|
|
16.8
|
%
|
|
6.3
|
%
|
|
6.0
|
%
|
Change in fair value of contingent consideration
|
120
|
|
|
(128
|
)
|
|
248
|
|
|
(193.8
|
)%
|
|
—
|
%
|
|
—
|
%
|
|||
Operating expense
|
$
|
188,508
|
|
|
$
|
161,198
|
|
|
$
|
27,310
|
|
|
16.9
|
%
|
|
6.3
|
%
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|
2012
|
|
2011
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode & Security
|
$
|
56,669
|
|
|
$
|
56,918
|
|
|
$
|
(249
|
)
|
|
(0.4
|
)%
|
|
3.1
|
%
|
|
3.5
|
%
|
Worldwide Communications & Services
|
56,847
|
|
|
53,091
|
|
|
3,756
|
|
|
7.1
|
%
|
|
4.8
|
%
|
|
5.1
|
%
|
|||
Corporate
|
—
|
|
|
3,100
|
|
|
(3,100
|
)
|
|
nm
|
|
|
—
|
%
|
|
nm
|
|
|||
Total operating income
|
$
|
113,516
|
|
|
$
|
113,109
|
|
|
$
|
407
|
|
|
0.4
|
%
|
|
3.8
|
%
|
|
4.2
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|
2012
|
|
2011
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Interest expense
|
$
|
1,639
|
|
|
$
|
1,723
|
|
|
$
|
(84
|
)
|
|
(4.9
|
)%
|
|
0.1
|
%
|
|
0.1
|
%
|
Interest income
|
(2,886
|
)
|
|
(1,212
|
)
|
|
(1,674
|
)
|
|
138.1
|
%
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Net foreign exchange losses
|
3,766
|
|
|
965
|
|
|
2,801
|
|
|
290.3
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|||
Other, net
|
(214
|
)
|
|
(253
|
)
|
|
39
|
|
|
(15.4
|
)%
|
|
—
|
%
|
|
—
|
%
|
|||
Total other (income) expense
|
$
|
2,305
|
|
|
$
|
1,223
|
|
|
$
|
1,082
|
|
|
88.5
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|
2012
|
|
2011
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Net income
|
$
|
74,288
|
|
|
$
|
73,523
|
|
|
$
|
765
|
|
|
1.0
|
%
|
|
2.5
|
%
|
|
2.8
|
%
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
Fiscal 2013
|
|
Fiscal 2012
|
||||||||||||||||||||||||||||
|
Jun. 30
2013
|
|
Mar. 31
2013
|
|
Dec. 31
2012
|
|
Sept. 30
2012
|
|
Jun. 30
2012
|
|
Mar. 31
2012
|
|
Dec. 31
2011
|
|
Sept. 30
2011
|
||||||||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||||||||||||||
Net sales
|
$
|
712,678
|
|
|
$
|
682,965
|
|
|
$
|
747,716
|
|
|
$
|
733,605
|
|
|
$
|
754,470
|
|
|
$
|
707,883
|
|
|
$
|
782,684
|
|
|
$
|
770,259
|
|
Cost of goods sold
|
637,027
|
|
|
614,133
|
|
|
673,365
|
|
|
659,565
|
|
|
680,643
|
|
|
638,615
|
|
|
702,845
|
|
|
691,169
|
|
||||||||
Gross profit
|
$
|
75,651
|
|
|
$
|
68,832
|
|
|
$
|
74,351
|
|
|
$
|
74,040
|
|
|
$
|
73,827
|
|
|
$
|
69,268
|
|
|
$
|
79,839
|
|
|
$
|
79,090
|
|
Net income
|
$
|
(13,315
|
)
|
|
$
|
13,978
|
|
|
$
|
16,357
|
|
|
$
|
17,642
|
|
|
$
|
19,785
|
|
|
$
|
14,756
|
|
|
$
|
21,367
|
|
|
$
|
18,380
|
|
Weighted-average shares outstanding, basic
|
27,922
|
|
|
27,847
|
|
|
27,713
|
|
|
27,618
|
|
|
27,579
|
|
|
27,489
|
|
|
27,244
|
|
|
27,138
|
|
||||||||
Weighted-average shares outstanding, diluted
|
27,922
|
|
|
28,024
|
|
|
27,958
|
|
|
27,901
|
|
|
27,886
|
|
|
27,926
|
|
|
27,674
|
|
|
27,551
|
|
||||||||
Net income (loss) per common share, basic
|
$
|
(0.48
|
)
|
|
$
|
0.50
|
|
|
$
|
0.59
|
|
|
$
|
0.64
|
|
|
$
|
0.72
|
|
|
$
|
0.54
|
|
|
$
|
0.78
|
|
|
$
|
0.68
|
|
Net income (loss) per common share, diluted
|
$
|
(0.48
|
)
|
|
$
|
0.50
|
|
|
$
|
0.59
|
|
|
$
|
0.63
|
|
|
$
|
0.71
|
|
|
$
|
0.53
|
|
|
$
|
0.77
|
|
|
$
|
0.67
|
|
•
|
Industry weighted-average cost of capital ("WACC"): We utilized a WACC relative to each reporting unit's respective geography and industry as the discount rate for estimated future cash flows. The WACC is intended to represent a rate of return that would be expected by a market place participant in each respective geography.
|
•
|
Operating income: We utilized historical and expected revenue growth rates, gross margins and operating expense percentages, which varied based on the projections of each reporting unit being evaluated.
|
•
|
Cash flows from working capital changes: We utilized a projected cash flow impact pertaining to expected changes in working capital as each of our goodwill reporting units grow.
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Year 1
|
|
Years 2-3
|
|
Years 4-5
|
|
Greater than
5 Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Contractual Obligations
|
|
||||||||||||||||||
Principal debt payments
|
$
|
5,429
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,429
|
|
Non-cancelable operating leases
(1)
|
17,774
|
|
|
4,703
|
|
|
7,196
|
|
|
4,164
|
|
|
1,711
|
|
|||||
Contingent consideration
(2)
|
12,545
|
|
|
3,732
|
|
|
8,813
|
|
|
—
|
|
|
—
|
|
|||||
Other
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total obligations
|
$
|
35,748
|
|
|
$
|
8,435
|
|
|
$
|
16,009
|
|
|
$
|
4,164
|
|
|
$
|
7,140
|
|
(1)
|
Amounts to be paid in future periods for real estate taxes, insurance, and other operating expenses applicable to the properties pursuant to the respective operating leases have been excluded from the table above as the amounts payable in future periods are generally not specified in the lease agreements and are dependent upon amounts which are not known at this time. Such amounts were not material in the current fiscal year.
|
(2)
|
Amounts disclosed regarding future CDC earnout payments are presented at their discounted fair value. Estimated future, undiscounted earnout payments total
$16.6 million
as of
June 30, 2013
.
|
(3)
|
Amounts totaling
$13.8 million
of deferred compensation which are included in current and other non-current liabilities in our Consolidated Balance Sheets as of
June 30, 2013
have been excluded from the table above due to the uncertainty of the timing of the payment of these obligations, which are generally at the discretion of the individual employees or upon death of the former employee, respectively.
|
ITEM 7A.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
ITEM 8.
|
Financial Statements and Supplementary Data.
|
|
|
|
Page
|
Financial Statements
|
|
|
|
|
|
/s/ Ernst & Young LLP
|
|
/s/ Ernst & Young LLP
|
|
June 30,
2013 |
|
June 30,
2012 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
148,164
|
|
|
$
|
29,173
|
|
Accounts receivable, less allowance of $25,479 at June 30, 2013
and $24,405 at June 30, 2012
|
435,028
|
|
|
458,341
|
|
||
Inventories
|
402,307
|
|
|
487,946
|
|
||
Prepaid expenses and other assets
|
40,105
|
|
|
41,846
|
|
||
Deferred income taxes
|
16,456
|
|
|
14,624
|
|
||
Total current assets
|
1,042,060
|
|
|
1,031,930
|
|
||
Property and equipment, net
|
20,203
|
|
|
48,785
|
|
||
Goodwill
|
31,795
|
|
|
53,885
|
|
||
Other assets, including identifiable intangible assets
|
70,125
|
|
|
67,206
|
|
||
Total assets
|
$
|
1,164,183
|
|
|
$
|
1,201,806
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
—
|
|
|
$
|
4,268
|
|
Current portion of contingent consideration
|
3,732
|
|
|
4,976
|
|
||
Accounts payable
|
362,271
|
|
|
419,683
|
|
||
Accrued expenses and other liabilities
|
59,983
|
|
|
67,776
|
|
||
Income taxes payable
|
1,696
|
|
|
1,698
|
|
||
Total current liabilities
|
427,682
|
|
|
498,401
|
|
||
Deferred income taxes
|
205
|
|
|
—
|
|
||
Long-term debt
|
5,429
|
|
|
5,429
|
|
||
Borrowings under revolving credit facility
|
—
|
|
|
—
|
|
||
Long-term portion of contingent consideration
|
8,813
|
|
|
11,677
|
|
||
Other long-term liabilities
|
26,098
|
|
|
33,988
|
|
||
Total liabilities
|
468,227
|
|
|
549,495
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, no par value; 3,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, no par value; 45,000,000 shares authorized, 27,971,809 and 27,604,840 shares issued and outstanding at June 30, 2013 and June 30, 2012, respectively
|
149,821
|
|
|
139,557
|
|
||
Retained earnings
|
569,107
|
|
|
534,445
|
|
||
Accumulated other comprehensive (loss) income
|
(22,972
|
)
|
|
(21,691
|
)
|
||
Total shareholders’ equity
|
695,956
|
|
|
652,311
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,164,183
|
|
|
$
|
1,201,806
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net sales
|
$
|
2,876,964
|
|
|
$
|
3,015,296
|
|
|
$
|
2,666,531
|
|
Cost of goods sold
|
2,584,090
|
|
|
2,713,272
|
|
|
2,392,224
|
|
|||
Gross profit
|
292,874
|
|
|
302,024
|
|
|
274,307
|
|
|||
Selling, general and administrative expenses
|
191,216
|
|
|
188,388
|
|
|
161,326
|
|
|||
Impairment charges, including ERP and goodwill
|
48,772
|
|
|
—
|
|
|
—
|
|
|||
Change in fair value of contingent consideration
|
1,843
|
|
|
120
|
|
|
(128
|
)
|
|||
Operating income
|
51,043
|
|
|
113,516
|
|
|
113,109
|
|
|||
Interest expense
|
775
|
|
|
1,639
|
|
|
1,723
|
|
|||
Interest income
|
(2,238
|
)
|
|
(2,886
|
)
|
|
(1,212
|
)
|
|||
Other expense (income), net
|
(520
|
)
|
|
3,552
|
|
|
712
|
|
|||
Income before income taxes
|
53,026
|
|
|
111,211
|
|
|
111,886
|
|
|||
Provision for income taxes
|
18,364
|
|
|
36,923
|
|
|
38,363
|
|
|||
Net income
|
$
|
34,662
|
|
|
$
|
74,288
|
|
|
$
|
73,523
|
|
Per share data:
|
|
|
|
|
|
||||||
Net income per common share, basic
|
$
|
1.25
|
|
|
$
|
2.72
|
|
|
$
|
2.74
|
|
Weighted-average shares outstanding, basic
|
27,774
|
|
|
27,362
|
|
|
26,872
|
|
|||
Net income per common share, diluted
|
$
|
1.24
|
|
|
$
|
2.68
|
|
|
$
|
2.70
|
|
Weighted-average shares outstanding, diluted
|
27,994
|
|
|
27,751
|
|
|
27,246
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net income
|
$
|
34,662
|
|
|
$
|
74,288
|
|
|
$
|
73,523
|
|
Unrealized gain on hedged transaction, net of tax
|
—
|
|
|
139
|
|
|
468
|
|
|||
Foreign currency translation adjustment
|
(1,281
|
)
|
|
(25,459
|
)
|
|
14,895
|
|
|||
Comprehensive income
|
$
|
33,381
|
|
|
$
|
48,968
|
|
|
$
|
88,886
|
|
|
|
|
|
|
|
||||||
See accompanying notes to these consolidated financial statements.
|
|
|
|||||||||
|
|
|
|
|
|
|
Common
Stock
(Shares)
|
|
Common
Stock
(Amount)
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
|||||||||
Balance at June 30, 2010
|
26,703,038
|
|
|
$
|
111,951
|
|
|
$
|
386,634
|
|
|
$
|
(11,734
|
)
|
|
$
|
486,851
|
|
Net income
|
—
|
|
|
—
|
|
|
73,523
|
|
|
—
|
|
|
73,523
|
|
||||
Unrealized gain on hedged transaction, net of tax of $272
|
—
|
|
|
—
|
|
|
—
|
|
|
468
|
|
|
468
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
14,895
|
|
|
14,895
|
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
406,894
|
|
|
6,373
|
|
|
—
|
|
|
—
|
|
|
6,373
|
|
||||
Share based compensation
|
—
|
|
|
5,081
|
|
|
—
|
|
|
—
|
|
|
5,081
|
|
||||
Tax benefit of deductible compensation arising from exercise or vesting of share based payment arrangements
|
—
|
|
|
203
|
|
|
—
|
|
|
—
|
|
|
203
|
|
||||
Balance at June 30, 2011
|
27,109,932
|
|
|
$
|
123,608
|
|
|
$
|
460,157
|
|
|
$
|
3,629
|
|
|
$
|
587,394
|
|
Net income
|
—
|
|
|
—
|
|
|
74,288
|
|
|
—
|
|
|
74,288
|
|
||||
Unrealized gain on hedged transaction, net of tax of $76
|
—
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|
139
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,459
|
)
|
|
(25,459
|
)
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
494,908
|
|
|
7,642
|
|
|
—
|
|
|
—
|
|
|
7,642
|
|
||||
Share based compensation
|
—
|
|
|
7,004
|
|
|
—
|
|
|
—
|
|
|
7,004
|
|
||||
Tax benefit of deductible compensation arising from exercise or vesting of share based payment arrangements
|
—
|
|
|
1,303
|
|
|
—
|
|
|
—
|
|
|
1,303
|
|
||||
Balance at June 30, 2012
|
27,604,840
|
|
|
$
|
139,557
|
|
|
$
|
534,445
|
|
|
$
|
(21,691
|
)
|
|
$
|
652,311
|
|
Net income
|
—
|
|
|
—
|
|
|
34,662
|
|
|
—
|
|
|
34,662
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,281
|
)
|
|
(1,281
|
)
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
366,969
|
|
|
4,024
|
|
|
—
|
|
|
—
|
|
|
4,024
|
|
||||
Share based compensation
|
—
|
|
|
5,692
|
|
|
—
|
|
|
—
|
|
|
5,692
|
|
||||
Tax benefit of deductible compensation arising from exercise or vesting of share based payment arrangements
|
—
|
|
|
548
|
|
|
—
|
|
|
—
|
|
|
548
|
|
||||
Balance at June 30, 2013
|
27,971,809
|
|
|
$
|
149,821
|
|
|
$
|
569,107
|
|
|
$
|
(22,972
|
)
|
|
$
|
695,956
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
34,662
|
|
|
$
|
74,288
|
|
|
$
|
73,523
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
8,457
|
|
|
9,580
|
|
|
6,464
|
|
|||
Amortization of debt issue costs
|
345
|
|
|
342
|
|
|
198
|
|
|||
Provision for doubtful accounts
|
10,333
|
|
|
7,134
|
|
|
7,488
|
|
|||
Share-based compensation and restricted stock
|
5,618
|
|
|
6,840
|
|
|
4,877
|
|
|||
Impairment charges, including ERP and goodwill
|
48,772
|
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
(19,630
|
)
|
|
(6,377
|
)
|
|
(1,431
|
)
|
|||
Excess tax benefits from share-based payment arrangements
|
(849
|
)
|
|
(1,720
|
)
|
|
(203
|
)
|
|||
Change in fair value of contingent consideration
|
1,843
|
|
|
120
|
|
|
(128
|
)
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
13,746
|
|
|
(34,322
|
)
|
|
(76,956
|
)
|
|||
Inventories
|
86,821
|
|
|
(29,387
|
)
|
|
(80,003
|
)
|
|||
Prepaid expenses and other assets
|
(28
|
)
|
|
(4,103
|
)
|
|
(17,392
|
)
|
|||
Other noncurrent assets
|
9,441
|
|
|
1,166
|
|
|
(10,279
|
)
|
|||
Accounts payable
|
(56,837
|
)
|
|
28,306
|
|
|
78,298
|
|
|||
Accrued expenses and other liabilities
|
(14,145
|
)
|
|
8,371
|
|
|
31,060
|
|
|||
Income taxes payable
|
895
|
|
|
(280
|
)
|
|
(4,828
|
)
|
|||
Net cash provided by (used in) operating activities
|
129,444
|
|
|
59,958
|
|
|
10,688
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(4,831
|
)
|
|
(12,790
|
)
|
|
(14,869
|
)
|
|||
Cash paid for business acquisitions, net of cash acquired
|
—
|
|
|
—
|
|
|
(36,228
|
)
|
|||
Net cash provided by (used in) investing activities
|
(4,831
|
)
|
|
(12,790
|
)
|
|
(51,097
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Increases (decreases) in short-term borrowings, net
|
(4,459
|
)
|
|
1,345
|
|
|
1,706
|
|
|||
Borrowings on revolving credit, net of expenses
|
515,262
|
|
|
1,408,522
|
|
|
769,545
|
|
|||
Repayments on revolving credit, net of expenses
|
(515,877
|
)
|
|
(1,433,161
|
)
|
|
(744,169
|
)
|
|||
Repayments on long-term debt
|
—
|
|
|
(25,000
|
)
|
|
—
|
|
|||
Debt issuance costs
|
—
|
|
|
(1,360
|
)
|
|
—
|
|
|||
Contingent consideration payments
|
(4,777
|
)
|
|
(2,000
|
)
|
|
—
|
|
|||
Exercise of stock options
|
4,024
|
|
|
7,642
|
|
|
6,372
|
|
|||
Excess tax benefits from share-based payment arrangements
|
849
|
|
|
1,720
|
|
|
203
|
|
|||
Net cash provided by (used in) financing activities
|
(4,978
|
)
|
|
(42,292
|
)
|
|
33,657
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(644
|
)
|
|
(4,450
|
)
|
|
894
|
|
|||
Increase (decrease) in cash and cash equivalents
|
118,991
|
|
|
426
|
|
|
(5,858
|
)
|
|||
Cash and cash equivalents at beginning of period
|
29,173
|
|
|
28,747
|
|
|
34,605
|
|
|||
Cash and cash equivalents at end of period
|
$
|
148,164
|
|
|
$
|
29,173
|
|
|
$
|
28,747
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest paid during the year
|
$
|
796
|
|
|
$
|
1,578
|
|
|
$
|
1,705
|
|
Income taxes paid during the year
|
$
|
35,582
|
|
|
$
|
46,057
|
|
|
$
|
43,233
|
|
(1)
|
Business and Summary of Significant Accounting Policies
|
•
|
Industry weighted-average cost of capital ("WACC"): We utilized a WACC relative to each reporting unit's respective geography and industry as the discount rate for estimated future cash flows. The WACC is intended to represent a rate of return that would be expected by a market place participant in each respective geography.
|
•
|
Operating income: We utilized historical and expected revenue growth rates, gross margins and operating expense percentages, which varied based on the projections of each reporting unit being evaluated.
|
•
|
Cash flows from working capital changes: We utilized a projected cash flow impact pertaining to expected changes in working capital as each of our goodwill reporting units grow.
|
(2)
|
Earnings per Share
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands, except per share data)
|
||||||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
34,662
|
|
|
$
|
74,288
|
|
|
$
|
73,523
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
|
||||
Weighted-average shares, basic
|
27,774
|
|
|
27,362
|
|
|
26,872
|
|
|||
Dilutive effect of share-based payments
|
220
|
|
|
389
|
|
|
374
|
|
|||
Weighted-average shares, diluted
|
27,994
|
|
|
27,751
|
|
|
27,246
|
|
|||
|
|
|
|
|
|
|
|
||||
Net income per common share, basic
|
$
|
1.25
|
|
|
$
|
2.72
|
|
|
$
|
2.74
|
|
Net income per common share, diluted
|
$
|
1.24
|
|
|
$
|
2.68
|
|
|
$
|
2.70
|
|
|
June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Land
|
$
|
3,009
|
|
|
$
|
3,009
|
|
Buildings and leasehold improvements
|
20,020
|
|
|
18,231
|
|
||
Computer software and equipment
|
14,338
|
|
|
13,829
|
|
||
Furniture, fixtures and equipment
|
14,852
|
|
|
14,739
|
|
||
Construction in Progress
|
629
|
|
|
29,045
|
|
||
|
52,848
|
|
|
78,853
|
|
||
Less accumulated depreciation
|
(32,645
|
)
|
|
(30,068
|
)
|
||
|
$
|
20,203
|
|
|
$
|
48,785
|
|
(4)
|
Acquisitions
|
|
Amount
|
||
Identified intangible assets
|
(in thousands)
|
||
Trade names (2 year useful life)
|
$
|
2,746
|
|
Customer relationships (6 year useful life)
|
18,965
|
|
|
Non-compete agreements (5 year useful life)
|
894
|
|
|
Total identified intangible assets
|
$
|
22,605
|
|
|
June 30, 2013
|
|
June 30, 2012
|
|
June 30, 2011
|
||||||
|
(in thousands)
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Prepaid expenses and other assets (current)
|
$
|
5,061
|
|
|
$
|
3,886
|
|
|
$
|
—
|
|
Other assets (noncurrent)
|
$
|
2,905
|
|
|
$
|
5,112
|
|
|
$
|
16,250
|
|
Liabilities
|
|
|
|
|
|
||||||
Other current liabilities
|
$
|
5,061
|
|
|
$
|
3,886
|
|
|
$
|
—
|
|
Other long-term liabilities
|
$
|
2,905
|
|
|
$
|
5,112
|
|
|
$
|
16,250
|
|
|
June 30,
|
||
|
2011
|
||
Unaudited, Supplemental Pro Forma Information
|
(in thousand, except
per share information)
|
||
Net sales
|
$
|
2,786,905
|
|
Net income
|
$
|
75,328
|
|
Diluted earnings per share
|
$
|
2.76
|
|
(5)
|
Goodwill, Other Identifiable Intangible Assets and Debt Issuance Costs
|
|
Barcode & Security Segment
|
|
Communications & Services Segment
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance as of June 30, 2011
|
$
|
37,975
|
|
|
$
|
21,115
|
|
|
$
|
59,090
|
|
CDC measurement period adjustments
|
914
|
|
|
—
|
|
|
914
|
|
|||
Unrealized gain (loss) on foreign currency translation
|
(5,881
|
)
|
|
(238
|
)
|
|
(6,119
|
)
|
|||
Balance as of June 30, 2012
|
$
|
33,008
|
|
|
$
|
20,877
|
|
|
$
|
53,885
|
|
Impairment charges
|
(15,143
|
)
|
|
(5,419
|
)
|
|
(20,562
|
)
|
|||
Unrealized gain (loss) on foreign currency translation
|
(1,536
|
)
|
|
8
|
|
|
(1,528
|
)
|
|||
Balance as of June 30, 2013
|
$
|
16,329
|
|
|
$
|
15,466
|
|
|
$
|
31,795
|
|
|
June 30, 2013
|
|
June 30, 2012
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Book
Value
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Book
Value
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
33,166
|
|
|
$
|
14,191
|
|
|
$
|
18,975
|
|
|
$
|
34,483
|
|
|
$
|
10,864
|
|
|
$
|
23,619
|
|
Trade names
|
1,941
|
|
|
1,941
|
|
|
—
|
|
|
2,127
|
|
|
1,285
|
|
|
842
|
|
||||||
Non-compete agreements
|
888
|
|
|
535
|
|
|
353
|
|
|
938
|
|
|
379
|
|
|
559
|
|
||||||
Distributor agreements
|
637
|
|
|
153
|
|
|
484
|
|
|
610
|
|
|
105
|
|
|
505
|
|
||||||
Total intangibles
|
36,632
|
|
|
16,820
|
|
|
19,812
|
|
|
38,158
|
|
|
12,633
|
|
|
25,525
|
|
||||||
Debt issuance costs
|
2,499
|
|
|
1,312
|
|
|
1,187
|
|
|
2,499
|
|
|
967
|
|
|
1,532
|
|
||||||
Total
|
$
|
39,131
|
|
|
$
|
18,132
|
|
|
$
|
20,999
|
|
|
$
|
40,657
|
|
|
$
|
13,600
|
|
|
$
|
27,057
|
|
|
Amortization
Expense
|
||
|
(in thousands)
|
||
Year Ended June 30,
|
|
||
2014
|
$
|
3,768
|
|
2015
|
3,768
|
|
|
2016
|
3,742
|
|
|
2017
|
3,176
|
|
|
2018
|
1,373
|
|
|
Thereafter
|
3,985
|
|
|
Total
|
$
|
19,812
|
|
|
June 30,
2013 |
|
June 30,
2012 |
||||
|
(in thousands)
|
||||||
Short-term borrowings
|
$
|
—
|
|
|
$
|
4,268
|
|
|
|
|
|
|
|
|
|
|
Future Debt Payments
|
||
|
(in thousands)
|
||
Fiscal year:
|
|
||
2014
|
$
|
—
|
|
2015
|
—
|
|
|
2016
|
—
|
|
|
2017
|
—
|
|
|
2018
|
—
|
|
|
Thereafter
|
5,429
|
|
|
Total principal payments
|
$
|
5,429
|
|
(7)
|
Derivatives and Hedging Activities
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Net foreign exchange derivative contract (gain) loss
|
$
|
(733
|
)
|
|
$
|
1,480
|
|
|
$
|
2,706
|
|
Net foreign currency transactional and re-measurement (gain) loss
|
701
|
|
|
2,286
|
|
|
(1,741
|
)
|
|||
Net foreign currency (gain) loss
|
$
|
(32
|
)
|
|
$
|
3,766
|
|
|
$
|
965
|
|
|
Fiscal Year Ended June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Net interest expense recognized as a result of interest rate swap
|
$
|
—
|
|
|
$
|
216
|
|
Unrealized gain (loss) in fair value of interest swap rates
|
—
|
|
|
(1
|
)
|
||
Net increase (decrease) in accumulated other comprehensive income (loss)
|
$
|
—
|
|
|
$
|
215
|
|
Income tax effect
|
—
|
|
|
(76
|
)
|
||
Net increase (decrease) in accumulated other comprehensive income (loss), net of tax
|
$
|
—
|
|
|
$
|
139
|
|
|
As of June 30, 2013
|
||||||
|
Fair Value of Derivatives
Designated as Hedge
Instruments
|
|
Fair Value of Derivatives
Not Designated as Hedge
Instruments
|
||||
|
(in thousands)
|
||||||
Derivative assets:
(a)
|
|
|
|
||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
308
|
|
Derivative liabilities:
(b)
|
|
|
|
||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
34
|
|
(a)
|
All derivative assets are recorded as prepaid expense and other assets in the Consolidated Balance Sheets.
|
(b)
|
All derivative liabilities are recorded as accrued expenses and other liabilities in the Consolidated Balance Sheets.
|
(8)
|
Fair Value of Financial Instruments
|
•
|
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
•
|
Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;
|
•
|
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).
|
|
Total
|
|
Quoted
prices in
active
markets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
13,752
|
|
|
$
|
13,752
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
308
|
|
|
—
|
|
|
308
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
14,060
|
|
|
$
|
13,752
|
|
|
$
|
308
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
13,752
|
|
|
$
|
13,752
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
34
|
|
|
—
|
|
|
34
|
|
|
—
|
|
||||
Liability for contingent consideration, current and non-current
|
12,545
|
|
|
—
|
|
|
—
|
|
|
12,545
|
|
||||
Total liabilities at fair value
|
$
|
26,331
|
|
|
$
|
13,752
|
|
|
$
|
34
|
|
|
$
|
12,545
|
|
|
Total
|
|
Quoted
prices in
active
markets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
11,635
|
|
|
$
|
11,635
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
21
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
11,656
|
|
|
$
|
11,635
|
|
|
$
|
21
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
11,635
|
|
|
$
|
11,635
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
110
|
|
|
—
|
|
|
110
|
|
|
—
|
|
||||
Liability for contingent consideration, current and non-current
|
16,653
|
|
|
—
|
|
|
—
|
|
|
16,653
|
|
||||
Total liabilities at fair value
|
$
|
28,398
|
|
|
$
|
11,635
|
|
|
$
|
110
|
|
|
$
|
16,653
|
|
|
Contingent
Consideration for
the Year Ended
|
|
Contingent
Consideration for
the Year Ended
|
||||
|
June 30, 2013
|
|
June 30, 2012
|
||||
|
(in thousands)
|
||||||
Fair value at beginning of period
|
$
|
16,653
|
|
|
$
|
23,794
|
|
Payments
|
(4,777
|
)
|
|
(2,000
|
)
|
||
Change in fair value
|
1,843
|
|
|
120
|
|
||
Fluctuation due to foreign currency exchange
|
(1,174
|
)
|
|
(5,261
|
)
|
||
Fair value at end of period
|
$
|
12,545
|
|
|
$
|
16,653
|
|
•
|
estimated future results, net of pro forma adjustments set forth in the Share Purchase and Sale Agreement;
|
•
|
the probability of achieving these results; and
|
•
|
a discount rate reflective of the Company's creditworthiness and market risk premium associated with the Brazilian market.
|
(9)
|
Share-Based Compensation
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Share-based compensation related to:
|
|
|
|
|
|
||||||
Equity classified stock options
|
$
|
2,125
|
|
|
$
|
2,875
|
|
|
$
|
3,106
|
|
Equity classified restricted stock
|
3,493
|
|
|
3,965
|
|
|
1,771
|
|
|||
Total share-based compensation
|
$
|
5,618
|
|
|
$
|
6,840
|
|
|
$
|
4,877
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Expected term
|
4.64 years
|
|
|
6.77 years
|
|
|
6.88 years
|
|
|||
Expected volatility
|
42.90
|
%
|
|
41.33
|
%
|
|
42.92
|
%
|
|||
Risk-free interest rate
|
0.64
|
%
|
|
1.42
|
%
|
|
2.56
|
%
|
|||
Dividend yield
|
0.00
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
|||
Weighted average fair value per option
|
$
|
10.48
|
|
|
$
|
14.94
|
|
|
$
|
17.21
|
|
|
Fiscal Year Ended June 30, 2013
|
|||||||||||
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding, beginning of year
|
1,629,959
|
|
|
$
|
29.27
|
|
|
|
|
|
||
Granted during the period
|
205,973
|
|
|
31.24
|
|
|
|
|
|
|||
Exercised during the period
|
(274,822
|
)
|
|
19.02
|
|
|
|
|
|
|||
Canceled, forfeited, or expired during the period
|
(82,827
|
)
|
|
33.99
|
|
|
|
|
|
|||
Outstanding, end of year
|
1,478,283
|
|
|
31.18
|
|
|
5.42
|
|
$
|
3,675,901
|
|
|
Vested and expected to vest at June 30, 2013
|
1,477,980
|
|
|
31.18
|
|
|
5.41
|
|
$
|
3,675,271
|
|
|
Exercisable, end of year
|
1,217,003
|
|
|
$
|
30.95
|
|
|
4.65
|
|
$
|
3,384,357
|
|
|
Fiscal Year Ended June 30, 2013
|
|||||||||
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Grant
Date Fair-
Value
|
|||||
Unvested, beginning of year
|
244,588
|
|
|
$
|
33.02
|
|
|
$
|
15.49
|
|
Granted
|
205,973
|
|
|
31.24
|
|
|
10.48
|
|
||
Vested
|
(178,804
|
)
|
|
32.25
|
|
|
14.72
|
|
||
Canceled or forfeited
|
(10,477
|
)
|
|
29.80
|
|
|
7.29
|
|
||
Unvested, end of year
|
261,280
|
|
|
$
|
32.28
|
|
|
$
|
12.40
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of Exercise Prices
|
|
Shares
Outstanding
|
|
Weighted
Average
Remaining
Contractual
Life
|
|
Weighted
Average
Exercise
Price
|
|
Number
Exercisable
|
|
Weighted
Average
Exercise
Price
|
||||||
$14.68 - $18.35
|
|
100,927
|
|
|
5.43
|
|
$
|
18.14
|
|
|
100,927
|
|
|
$
|
18.14
|
|
$18.35 - $22.01
|
|
9,400
|
|
|
0.43
|
|
21.58
|
|
|
9,400
|
|
|
21.58
|
|
||
$22.01 - $25.68
|
|
176,400
|
|
|
5.66
|
|
24.57
|
|
|
176,400
|
|
|
24.57
|
|
||
$25.68 - $29.35
|
|
90,500
|
|
|
3.30
|
|
27.65
|
|
|
80,500
|
|
|
27.48
|
|
||
$29.35 - $33.02
|
|
442,237
|
|
|
5.19
|
|
31.00
|
|
|
320,202
|
|
|
31.43
|
|
||
$33.02 - $36.69
|
|
658,819
|
|
|
5.86
|
|
35.69
|
|
|
529,574
|
|
|
35.91
|
|
||
|
|
1,478,283
|
|
|
5.42
|
|
$
|
31.18
|
|
|
1,217,003
|
|
|
$
|
30.95
|
|
|
Fiscal Year Ended June 30, 2013
|
||||||||
|
Shares
granted
|
|
Date granted
|
|
Grant date
fair value
|
|
Vesting period
|
||
Employees
|
|
|
|
|
|
|
|
||
Certain employees based on promotions
|
2,750
|
|
August 21, 2012
|
|
$
|
29.87
|
|
|
Annually over 3 years
|
Certain employees, vesting based on certain service and performance conditions
|
10,886
|
|
August 21, 2012
|
|
29.87
|
|
|
August 21, 2012 through December 31, 2014
|
|
Certain employees
|
92,040
|
|
December 7, 2012
|
|
29.80
|
|
|
Annually over 3 years
|
|
Non-Employee Directors
(1)
|
14,000
|
|
December 7, 2012
|
|
$
|
29.80
|
|
|
6 months
|
(1)
|
Per the Amended and Restated Director’s Equity Compensation Plan, non-employee directors will receive annual awards of restricted stock, as opposed to stock options. The number of shares of restricted stock to be granted will be established from time to time by the Board of Directors. Currently, the number of shares of restricted stock awarded to each non-employee director will be determined by dividing
$80,000
by the fair market value of the common stock on the date of grant. These awards will generally vest in full on the day that is six months after the date of grant or upon the earlier occurrence of (i) the director’s termination of service as a director by reason of death, disability or retirement, or (ii) a change in control by the Company. The compensation expense associated with these awards will be recognized on a pro-rata basis over this period.
|
|
Fiscal Year Ended June 30, 2013
|
|||||
|
Shares
|
|
Weighted Average
Grant Date Fair
Value
|
|||
Outstanding, beginning of year
|
267,258
|
|
|
$
|
32.46
|
|
Granted during the period
|
119,676
|
|
|
29.81
|
|
|
Vested during the period
|
(132,276
|
)
|
|
31.01
|
|
|
Cancelled, forfeited, or expired during the period
|
(42,237
|
)
|
|
32.64
|
|
|
Outstanding, end of year
|
212,421
|
|
|
$
|
31.82
|
|
(10)
|
Employee Benefit Plans
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Matching contributions
|
$
|
509
|
|
|
$
|
473
|
|
|
$
|
419
|
|
Discretionary contributions
|
5,501
|
|
|
5,066
|
|
|
5,952
|
|
|||
Total contributions
|
$
|
6,010
|
|
|
$
|
5,539
|
|
|
$
|
6,371
|
|
(11)
|
Income Taxes
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
32,387
|
|
|
$
|
37,736
|
|
|
$
|
34,782
|
|
State
|
993
|
|
|
1,376
|
|
|
248
|
|
|||
Foreign
|
3,921
|
|
|
3,703
|
|
|
5,008
|
|
|||
Total current
|
37,301
|
|
|
42,815
|
|
|
40,038
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(10,200
|
)
|
|
(830
|
)
|
|
(168
|
)
|
|||
State
|
(519
|
)
|
|
(44
|
)
|
|
(9
|
)
|
|||
Foreign
|
(8,218
|
)
|
|
(5,018
|
)
|
|
(1,498
|
)
|
|||
Total deferred
|
(18,937
|
)
|
|
(5,892
|
)
|
|
(1,675
|
)
|
|||
Provision for income taxes
|
$
|
18,364
|
|
|
$
|
36,923
|
|
|
$
|
38,363
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
U.S. Federal income tax at statutory rate
|
$
|
18,559
|
|
|
$
|
38,924
|
|
|
$
|
39,160
|
|
Increase (decrease) in income taxes due to:
|
|
|
|
|
|
||||||
State and local income taxes, net of Federal benefit
|
523
|
|
|
1,026
|
|
|
625
|
|
|||
Tax credits
|
(1,629
|
)
|
|
(1,122
|
)
|
|
(312
|
)
|
|||
Valuation allowance
|
353
|
|
|
24
|
|
|
(195
|
)
|
|||
Effect of foreign operations, net
|
(1,342
|
)
|
|
(2,309
|
)
|
|
(2,054
|
)
|
|||
Stock compensation
|
(148
|
)
|
|
86
|
|
|
239
|
|
|||
Goodwill impairment
|
1,139
|
|
|
—
|
|
|
—
|
|
|||
Other
|
909
|
|
|
294
|
|
|
900
|
|
|||
Provision for income taxes
|
$
|
18,364
|
|
|
$
|
36,923
|
|
|
$
|
38,363
|
|
|
June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Deferred tax assets derived from:
|
|
|
|
||||
Allowance for accounts receivable
|
$
|
5,958
|
|
|
$
|
6,456
|
|
Inventories
|
9,708
|
|
|
7,336
|
|
||
Nondeductible accrued expenses
|
375
|
|
|
512
|
|
||
Net operating loss carryforwards
|
4,065
|
|
|
2,931
|
|
||
Tax credits
|
1,021
|
|
|
583
|
|
||
Timing of amortization deduction from goodwill
|
6,403
|
|
|
1,795
|
|
||
Deferred compensation
|
5,205
|
|
|
4,331
|
|
||
Stock compensation
|
5,537
|
|
|
5,631
|
|
||
Timing of depreciation and other deductions for building and equipment
|
10,152
|
|
|
98
|
|
||
Total deferred tax assets
|
48,424
|
|
|
29,673
|
|
||
Valuation allowance
|
(893
|
)
|
|
(541
|
)
|
||
Total deferred tax assets, net of allowance
|
47,531
|
|
|
29,132
|
|
||
Deferred tax liabilities derived from:
|
|
|
|
||||
Timing of amortization deduction from goodwill
|
(3,938
|
)
|
|
(3,505
|
)
|
||
Timing of amortization deduction from intangible assets
|
(2,506
|
)
|
|
(4,130
|
)
|
||
Total deferred tax liabilities
|
(6,444
|
)
|
|
(7,635
|
)
|
||
Net deferred tax assets
|
$
|
41,087
|
|
|
$
|
21,497
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Domestic
|
$
|
64,581
|
|
|
$
|
103,711
|
|
|
$
|
96,436
|
|
Foreign
|
(11,555
|
)
|
|
7,500
|
|
|
15,450
|
|
|||
Worldwide pretax earnings
|
$
|
53,026
|
|
|
$
|
111,211
|
|
|
$
|
111,886
|
|
|
June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Beginning Balance
|
$
|
1,257
|
|
|
$
|
1,181
|
|
|
$
|
1,279
|
|
Additions based on tax positions related to the current year
|
240
|
|
|
163
|
|
|
173
|
|
|||
Additions for tax positions of prior years
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reduction for tax positions of prior years
|
(463
|
)
|
|
(87
|
)
|
|
(271
|
)
|
|||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending Balance
|
$
|
1,034
|
|
|
$
|
1,257
|
|
|
$
|
1,181
|
|
(12)
|
Commitments and Contingencies
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Lease expense
|
$
|
5,094
|
|
|
$
|
5,025
|
|
|
$
|
4,989
|
|
|
Payments
|
||
|
(in thousands)
|
||
Fiscal Year Ended June 30,
|
|
||
2014
|
$
|
4,703
|
|
2015
|
3,741
|
|
|
2016
|
3,455
|
|
|
2017
|
2,922
|
|
|
2018
|
1,242
|
|
|
Thereafter
|
1,711
|
|
|
Total future minimum lease payments
|
$
|
17,774
|
|
(13)
|
Segment Information
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Sales:
|
|
|
|
|
|
||||||
Worldwide Barcode & Security
|
$
|
1,828,219
|
|
|
$
|
1,837,307
|
|
|
$
|
1,615,461
|
|
Worldwide Communications & Services
|
1,048,745
|
|
|
1,177,989
|
|
|
1,051,070
|
|
|||
|
$
|
2,876,964
|
|
|
$
|
3,015,296
|
|
|
$
|
2,666,531
|
|
Depreciation and amortization:
|
|
|
|
|
|
||||||
Worldwide Barcode & Security
|
$
|
5,408
|
|
|
$
|
6,590
|
|
|
$
|
3,087
|
|
Worldwide Communications & Services
|
3,049
|
|
|
2,990
|
|
|
3,377
|
|
|||
|
$
|
8,457
|
|
|
$
|
9,580
|
|
|
$
|
6,464
|
|
Operating income:
|
|
|
|
|
|
||||||
Worldwide Barcode & Security
(1)
|
$
|
34,665
|
|
|
$
|
56,669
|
|
|
$
|
56,918
|
|
Worldwide Communications & Services
(2)
|
44,588
|
|
|
56,847
|
|
|
53,091
|
|
|||
Corporate
(3)
|
(28,210
|
)
|
|
—
|
|
|
3,100
|
|
|||
|
$
|
51,043
|
|
|
$
|
113,516
|
|
|
$
|
113,109
|
|
Assets:
|
|
|
|
|
|
||||||
Worldwide Barcode & Security
|
$
|
609,939
|
|
|
$
|
695,717
|
|
|
$
|
681,387
|
|
Worldwide Communications & Services
|
387,097
|
|
|
438,442
|
|
|
436,858
|
|
|||
Corporate
|
167,147
|
|
|
67,647
|
|
|
63,943
|
|
|||
|
$
|
1,164,183
|
|
|
$
|
1,201,806
|
|
|
$
|
1,182,188
|
|
Capital expenditures:
|
|
|
|
|
|
||||||
Worldwide Barcode & Security
|
$
|
446
|
|
|
$
|
4,851
|
|
|
$
|
523
|
|
Worldwide Communications & Services
|
973
|
|
|
2,707
|
|
|
331
|
|
|||
Corporate
|
3,412
|
|
|
5,232
|
|
|
14,015
|
|
|||
|
$
|
4,831
|
|
|
$
|
12,790
|
|
|
$
|
14,869
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Sales by Geography Category:
|
|
|
|
|
|
||||||
North America
|
$
|
2,196,986
|
|
|
$
|
2,285,342
|
|
|
$
|
2,048,767
|
|
International
|
737,241
|
|
|
778,837
|
|
|
643,863
|
|
|||
Less intercompany sales
|
(57,263
|
)
|
|
(48,883
|
)
|
|
(26,099
|
)
|
|||
|
$
|
2,876,964
|
|
|
$
|
3,015,296
|
|
|
$
|
2,666,531
|
|
(14)
|
Restructuring Costs
|
(15)
|
Accumulated Other Comprehensive Income
|
|
Fiscal Years Ended June 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Currency translation adjustment
|
$
|
(22,972
|
)
|
|
$
|
(21,691
|
)
|
|
$
|
3,768
|
|
Unrealized gain (loss) on fair value of interest rate swap
|
—
|
|
|
—
|
|
|
(139
|
)
|
|||
Accumulated other comprehensive income (loss)
|
$
|
(22,972
|
)
|
|
$
|
(21,691
|
)
|
|
$
|
3,629
|
|
(16)
|
Related Party Transactions
|
ITEM 9.
|
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.
|
ITEM 9A.
|
Controls and Procedures.
|
ITEM 9B.
|
Other Information.
|
ITEM 10.
|
Directors, Executive Officers and Corporate Governance.
|
ITEM 11.
|
Executive Compensation.
|
ITEM 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
ITEM 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
ITEM 14.
|
Principal Accountant Fees and Services.
|
ITEM 15.
|
Exhibits and Financial Statement Schedules.
|
Description
|
Balance at
Beginning
of Period
|
|
Amounts
Charged to
Expense
|
|
Reductions
(1)
|
|
Other
(2)
|
|
Balance at
End of
Period
|
|||||||
Allowance for bad debt:
|
|
|
|
|
|
|
|
|
|
|||||||
Year ended June 30, 2011
|
$
|
19,204
|
|
|
7,488
|
|
|
(11,451
|
)
|
|
8,265
|
|
|
$
|
23,506
|
|
Trade and current note receivable allowance
|
|
|
|
|
|
|
|
|
$
|
23,506
|
|
|||||
Year ended June 30, 2012
|
$
|
23,506
|
|
|
7,134
|
|
|
(7,137
|
)
|
|
902
|
|
|
$
|
24,405
|
|
Trade and current note receivable allowance
|
|
|
|
|
|
|
|
|
$
|
24,405
|
|
|||||
Year ended June 30, 2013
|
$
|
24,405
|
|
|
10,333
|
|
|
(11,377
|
)
|
|
2,118
|
|
|
$
|
25,479
|
|
Trade and current note receivable allowance
|
|
|
|
|
|
|
|
|
$
|
25,479
|
|
(1)
|
"Reductions" amounts represent write-offs for the years indicated.
|
(2)
|
"Other" amounts include recoveries and the effect of foreign currency fluctuations. The amount in 2011 includes
$3.9 million
of recoveries and
$3.1 million
of accounts receivable reserves acquired with CDC Brasil, S.A., on April 15, 2011.
|
|
SCAN
SOURCE
, INC.
|
|
|
|
|
|
By:
|
/s/ MICHAEL L. BAUR
|
|
|
Michael L. Baur
|
|
|
Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ STEVEN R. FISCHER
|
|
Chairman of the Board
|
|
August 26, 2013
|
Steven R. Fischer
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL L. BAUR
|
|
Chief Executive Officer and Director
|
|
August 26, 2013
|
Michael L. Baur
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/s/ CHARLES A. MATHIS
|
|
Senior Vice President and Chief Financial Officer
|
|
August 26, 2013
|
Charles A. Mathis
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
/s/ GERALD LYONS
|
|
Senior Vice President of Finance and Principal Accounting Officer
|
|
August 26, 2013
|
Gerald Lyons
|
|
(principal accounting officer)
|
|
|
|
|
|
|
|
/s/ MICHAEL J. GRAINGER
|
|
Director
|
|
August 26, 2013
|
Michael J. Grainger
|
|
|
|
|
|
|
|
|
|
/s/ STEVEN H. OWINGS
|
|
Director
|
|
August 26, 2013
|
Steven H. Owings
|
|
|
|
|
|
|
|
|
|
/s/ JOHN P. REILLY
|
|
Director
|
|
August 26, 2013
|
John P. Reilly
|
|
|
|
|
|
|
|
|
|
/s/ CHARLES R. WHITCHURCH
|
|
Director
|
|
August 26, 2013
|
Charles R. Whitchurch
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Filed
herewith
|
|
Form
|
|
Period
Ending
|
|
Exhibit
|
|
Filing
Date
|
2.1
|
|
Share Purchase and Sale Agreement by and among ScanSource DO Brasil Participacoes LTDA as Buyer, Alexandre Machado De Campos Conde, Marcelo Duarte Hirsch, Gustavo Conde, Rosania De Souza Possebom, Juliane Possebom, Daniele Possebom, Gabriela Possebom, Adolar Nardes Junior and Caio Vinicius Domingos Nardes as Sellers; and CDC Brasil S.A., formerly called CDC Brasil Distribuidora LTDA, AECO Participacoes LTDA, Rhouse Participacoes LTDA and Nardes Administracao LTDA (as Agreeing Parties) dated April 7, 2011
|
|
|
|
8-K
|
|
|
|
2.1
|
|
4/15/2011
|
3.1
|
|
Amended and Restated Articles of Incorporation of the Registrant and Articles of Amendment Amending the Amended and Restated Articles of Incorporation of the Registrant
|
|
|
|
10-Q
|
|
12/31/2004
|
|
3.1
|
|
2/3/2005
|
3.2
|
|
Amended and Restated Bylaws of the Registrant, effective December 5, 2008
|
|
|
|
8-K
|
|
|
|
3.1
|
|
12/9/2008
|
4.1
|
|
Form of Common Stock Certificate
|
|
|
|
SB-2
|
|
|
|
4.1
|
|
2/7/1994
|
|
|
Executive Compensation Plans and Arrangements
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
1997 Stock Incentive Plan, as amended, of the Registrant and Form of Stock Option Agreement
|
|
|
|
10-K
|
|
6/30/1999
|
|
10.13
|
|
9/28/1999
|
10.2
|
|
Amended and Restated Directors Equity Compensation Plan, as amended and restated
|
|
|
|
10-Q
|
|
9/30/2012
|
|
10.4
|
|
11/2/2012
|
10.3
|
|
Form of Restricted Stock Award (for ScanSource, Inc. Amended and Restated Directors Equity Compensation Plan as amended and restated)
|
|
|
|
10-Q
|
|
3/31/2011
|
|
10.3
|
|
5/6/2011
|
10.4
|
|
Nonqualified Deferred Compensation Plan, as amended and restated
|
|
|
|
10-Q
|
|
9/30/2012
|
|
10.5
|
|
11/2/2012
|
10.5
|
|
Amended and Restated 2002 Long-Term Incentive Plan
|
|
|
|
8-K
|
|
|
|
10.1
|
|
12/7/2009
|
10.6
|
|
Form of Incentive Stock Option Award Certificate under the Amended and Restated 2002 Long-Term Incentive Plan for grants on or after December 3, 2010
|
|
|
|
10-Q
|
|
12/31/2010
|
|
10.2
|
|
2/4/2011
|
10.7
|
|
Form of Non-Qualified Stock Option Award Certificate under the Amended and Restated 2002 Long-Term Incentive Plan for grants on or after December 3, 2010
|
|
|
|
10-Q
|
|
12/31/2010
|
|
10.3
|
|
2/4/2011
|
10.8
|
|
Form of Restricted Stock Unit Award Certificate under the Amended and Restated 2002 Long-Term Incentive Plan for grants on or after December 3, 2010
|
|
|
|
10-Q
|
|
12/31/2010
|
|
10.4
|
|
2/4/2011
|
10.9
|
|
Form of Restricted Stock Award Certificate under the Amended and Restated 2002 Long-Term Incentive Plan for grants on or after December 3, 2010
|
|
|
|
10-Q
|
|
12/31/2010
|
|
10.5
|
|
2/4/2011
|
10.10
|
|
Form of Restricted Stock Award Certificate (US) under the 2002 Amended and Restated Long-Term Incentive Plan
|
|
|
|
10-Q
|
|
12/31/2008
|
|
10.1
|
|
2/4/2009
|
10.11
|
|
Form of Restricted Stock Award Certificate (UK) under the 2002 Amended and Restated Long-Term Incentive Plan
|
|
|
|
10-Q
|
|
12/31/2008
|
|
10.2
|
|
2/4/2009
|
10.12
|
|
Form of Restricted Stock Award Certificate (Europe, not UK) under the 2002 Amended and Restated Long-Term Incentive Plan
|
|
|
|
10-Q
|
|
12/31/2008
|
|
10.3
|
|
2/4/2009
|
10.13
|
|
Form of Restricted Stock Award Certificate under the Amended and Restated 2002 Long-Term Incentive Plan for grants on or after December 3, 2009
|
|
|
|
8-K
|
|
|
|
10.2
|
|
12/7/2009
|
10.14
|
|
Form of Incentive Stock Option Award Certificate under the Amended and Restated 2002 Long-Term Incentive Plan for grants on or after December 3, 2009
|
|
|
|
8-K
|
|
|
|
10.3
|
|
12/7/2009
|
10.15
|
|
Form of Non-Qualified Stock Option Award Certificate under the Amended and Restated 2002 Long-Term Incentive Plan for grants on or after December 3, 2009
|
|
|
|
8-K
|
|
|
|
10.4
|
|
12/7/2009
|
10.16
|
|
Founder's Supplemental Executive Retirement Plan Agreement
|
|
|
|
10-Q
|
|
3/31/2011
|
|
10.2
|
|
5/6/2011
|
10.17
|
|
Amended and Restated Employment Agreement, effective as of June 6, 2011, between the Registrant and Michael L. Baur
|
|
|
|
10-K
|
|
6/30/2011
|
|
10.18
|
|
8/29/2011
|
10.18
|
|
First Amendment to Amended and Restated Employment Agreement effective July 1, 2012, between the Registrant and Michael L. Baur
|
|
|
|
10-Q
|
|
9/30/2012
|
|
10.2
|
|
11/2/2012
|
10.19
|
|
Letter from Michael L. Baur to Board of Directors
|
|
X
|
|
|
|
|
|
|
|
|
10.20
|
|
Amended and Restated Employment Agreement, effective as of June 6, 2011, between the Registrant and Richard P. Cleys
|
|
|
|
10-K
|
|
6/30/2011
|
|
10.19
|
|
8/29/2011
|
10.21
|
|
Letter Agreement between the Registrant and Richard P. Cleys
|
|
|
|
10-Q
|
|
12/31/2012
|
|
10.1
|
|
2/1/2013
|
10.22
|
|
Amended and Restated Employment Agreement, effective as of June 6, 2011, between the Registrant and R. Scott Benbenek
|
|
|
|
10-K
|
|
6/30/2011
|
|
10.20
|
|
8/29/2011
|
10.23
|
|
First Amendment to Amended and Restated Employment Agreement effective July 1, 2013, between the Registrant and R. Scott Benbenek
|
|
X
|
|
|
|
|
|
|
|
|
10.24
|
|
Amended and Restated Employment Agreement, effective as of June 6, 2011, between the Registrant and Andrea D. Meade
|
|
|
|
10-K
|
|
6/30/2011
|
|
10.21
|
|
8/29/2011
|
10.25
|
|
First Amendment to Amended and Restated Employment Agreement effective July 1, 2013, between the Registrant and Andrea D. Meade
|
|
X
|
|
|
|
|
|
|
|
|
10.26
|
|
Amended and Restated Employment Agreement, dated June 6, 2011, between the Registrant and John J. Ellsworth
|
|
|
|
10-K
|
|
6/30/2011
|
|
10.22
|
|
8/29/2011
|
10.27
|
|
First Amendment to Amended and Restated Employment Agreement effective July 1, 2013, between the Registrant and John J. Ellsworth
|
|
X
|
|
|
|
|
|
|
|
|
10.28
|
|
Employment Agreement effective December 17, 2012, between the Registrant and Charles A. Mathis
|
|
|
|
10-Q
|
|
12/31/2012
|
|
10.2
|
|
2/1/2013
|
10.29
|
|
First Amendment to Employment Agreement effective July 1, 2013 between the Registrant and Charles A. Mathis
|
|
X
|
|
|
|
|
|
|
|
|
10.30
|
|
Employment Agreement effective as of July 25, 2012 between the Registrant and Gerald Lyons
|
|
|
|
10-Q
|
|
9/30/2012
|
|
10.3
|
|
11/2/2012
|
10.31
|
|
Form of Restricted Stock Award Agreement for R. Scott Benbenek, dated June 6, 2011
|
|
|
|
10-K
|
|
6/30/2011
|
|
10.26
|
|
8/29/2011
|
10.32
|
|
Form of Restricted Stock Award Agreement for Andrea D. Meade, dated June 6, 2011
|
|
|
|
10-K
|
|
6/30/2011
|
|
10.27
|
|
8/29/2011
|
10.33
|
|
Form of Performance and Service-Based Restricted Stock Unit Award Agreement for John J. Ellsworth dated May 14, 2012
|
|
|
|
10-K
|
|
6/30/2012
|
|
10.31
|
|
8/24/2012
|
|
|
Bank Agreements
|
|
|
|
|
|
|
|
|
|
|
10.34
|
|
Amended and Restated Credit Agreement entered into on October 11, 2011, among ScanSource, Inc., the Subsidiary Borrowers party thereto, J.P. Morgan Chase Bank, N.A., individually and as administrative agent and the other financial institutions signatory thereto
|
|
|
|
10-Q
|
|
9/30/2011
|
|
10.1
|
|
11/4/2011
|
|
|
Other Agreements
|
|
|
|
|
|
|
|
|
|
|
10.35+
|
|
Industrial Lease Agreement dated April 27, 2007 between Registrant and Industrial Developments International, Inc.
|
|
|
|
10-K
|
|
6/30/2007
|
|
10.26
|
|
8/29/2007
|
10.36+
|
|
US Avaya Contract with Scan
Source
, Inc.
|
|
|
|
10-K
|
|
6/30/2010
|
|
10.39
|
|
8/26/2010
|
10.37+++
|
|
Amendment to Distribution Agreement with Avaya.
|
|
X
|
|
|
|
|
|
|
|
|
10.38+++
|
|
Addendum to Distributor Agreement with Avaya.
|
|
X
|
|
|
|
|
|
|
|
|
10.39+
|
|
US Motorola (f/k/a Symbol Technologies) Contract with ScanSource, Inc.
|
|
|
|
10-K
|
|
6/30/2010
|
|
10.40
|
|
8/26/2010
|
10.40+
|
|
Letter Agreement with US Motorola
|
|
|
|
10-K
|
|
6/30/2010
|
|
10.41
|
|
8/26/2010
|
21.1
|
|
Subsidiaries of the Company
|
|
X
|
|
|
|
|
|
|
|
|
23.1
|
|
Consent of Ernst & Young LLP
|
|
X
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer, Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer, Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
|
|
32.1
|
|
Certification of the Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
|
|
32.2
|
|
Certification of the Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
|
|
a.
|
The Agreement is hereby amended by deleting the paragraph entitled “
Base Salary
” in Exhibit A to the Agreement in its entirety and replacing the paragraph entitled “
Base Salary
” in its entirety as follows:
|
b.
|
The Agreement is hereby amended by deleting the paragraph entitled “
Variable Compensation
” in Exhibit A to the Agreement in its entirety and replacing the paragraph entitled “
Variable Compensation
” in its entirety as follows:
|
a.
|
The Agreement is hereby amended by deleting the paragraph entitled “
Base Salary
” in Exhibit A to the Agreement in its entirety and replacing the paragraph entitled “
Base Salary
” in its entirety as follows:
|
b.
|
The Agreement is hereby amended by deleting the paragraph entitled “
Variable Compensation
” in Exhibit A to the Agreement in its entirety and replacing the paragraph entitled “
Variable Compensation
” in its entirety as follows:
|
Avaya, Inc.
|
ScanSource, Inc. d/b/a Catalyst Telecom
|
|
|
By:
/s/ Mike Reid
|
By:
/s/ Michael J. Ferney
|
Name:
Mike Reid
|
Name:
Michael J. Ferney
|
|
|
Title:
Sr. Dir. N.A. Distribution
|
Title:
VP of Merchandising
|
|
|
Date:
*****
|
Date:
*****
|
Name of Subsidiary
|
|
State/Country
of Incorporation
|
|
Percentage of Voting
Securities Owned by
Immediate Parent
|
4100 Quest, LLC
|
|
South Carolina
|
|
100%
|
Scan
Source
Properties, LLC
|
|
South Carolina
|
|
100%
|
Logue Court Properties, LLC
|
|
South Carolina
|
|
100%
|
8650 Commerce Drive, LLC
|
|
Mississippi
|
|
100%
|
Partner Services, Inc.
|
|
South Carolina
|
|
100%
|
Scan
Source
Security Distribution, Inc.
|
|
South Carolina
|
|
100%
|
Scan
Source
Communications, Inc.
|
|
South Carolina
|
|
100%
|
Scan
Source
Canada, Inc.
|
|
Canada
|
|
100%
|
Scan
Source
de Mexico S, de R.L. de C.V.
|
|
Mexico
|
|
99.9%
1
|
Outsourcing Unlimited, Inc.
|
|
Georgia
|
|
100%
|
Netpoint International, Inc.
|
|
Florida
|
|
100%
|
Scan
Source
France SARL
|
|
France
|
|
100%
|
Scan
Source
Europe Limited
|
|
United Kingdom
|
|
100%
|
Scan
Source
UK Limited
|
|
United Kingdom
|
|
100%
|
Scan
Source
EDC Limited
|
|
United Kingdom
|
|
100%
|
Scan
Source
Europe SPRL
|
|
Belgium
2
|
|
99.9%
3
|
Scan
Source
Germany GmbH
|
|
Germany
|
|
100%
|
Scan
Source
Communications Limited
|
|
United Kingdom
|
|
100%
|
Scan
Source
Europe CV
|
|
Amsterdam/NL
|
|
100%
|
Scan
Source
Europe BV
|
|
Amsterdam/NL
|
|
100%
|
Scan
Source
Europe Italy
|
|
Italy
|
|
100%
|
Scan
Source
Europe Netherlands
|
|
Netherlands
|
|
100%
|
Scan
Source
Communications GmbH
|
|
Germany
|
|
100%
|
CDC Brasil Distribuidora de Tecnologias Especiais LTDA.
|
|
Brazil
|
|
99.9%
4
|
1
|
|
Mr. Baur, the CEO of Scan
Source
, Inc., owns interests representing .000019%.
|
2
|
|
Scan
Source
Europe SPRL has branch offices that operate under the names Scan
Source
Italia and Scan
Source
Netherlands.
|
3
|
|
Mr. Baur, the CEO of Scan
Source,
Inc., owns one share, representing .10%.
|
4
|
|
ScanSource Europe SPRL owns one share representing 0.0000037%.
|
(1)
|
Registration Statement (Form S-8 No. 333-78281) of ScanSource, Inc. dated May 12, 1999;
|
(2)
|
Registration Statement (Form S-8 No. 333-36766) of ScanSource, Inc. dated May 11, 2000;
|
(3)
|
Registration Statement (Form S-8 No. 333-110220) of ScanSource, Inc. dated November 4, 2003;
|
(4)
|
Registration Statement (Form S-8 No. 333-115534) of ScanSource, Inc. dated May 14, 2004;
|
(5)
|
Registration Statement (Form S-8 No. 333-144121) of ScanSource, Inc. dated June 28, 2007;
|
(6)
|
Registration Statement (Form S-8 No. 333-153653) of ScanSource, Inc. dated September 24, 2008;
|
(7)
|
Registration Statement (Form S-8 No. 333-169064) of ScanSource, Inc. dated August 10, 2010
|
|
/s/ Ernst & Young LLP
|
1.
|
I have reviewed this quarterly report on Form 10-K of ScanSource, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Michael L. Baur
|
|
Michael L. Baur, Chief Executive Officer (Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-K of ScanSource, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Charles A. Mathis
|
|
Charles A. Mathis, Senior Vice President and Chief Financial Officer (Principal Financial Officer)
|
1)
|
The Report fully complies with the requirements of §13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 26, 2013
|
/s/ Michael L. Baur
|
|
|
Michael L. Baur
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1)
|
The Report fully complies with the requirements of §13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 26, 2013
|
/s/ Charles A. Mathis
|
|
|
Charles A. Mathis
|
|
|
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|