Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
Common Stock, no par value
|
|
NASDAQ Global Select Market
|
Large accelerated filer
|
ý
|
Accelerated filer
|
¨
|
Non-accelerated filer
(Do not check if a smaller reporting company)
|
¨
|
Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
|
Class
|
|
Outstanding at August 25, 2017
|
Common Stock, no par value per share
|
|
25,432,900 shares
|
|
Page
|
|
|
||
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
Mine Safety Disclosures
|
|
|
||
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
||
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
||
Item 15.
|
||
|
•
|
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.
|
•
|
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, payment processing solutions, 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.
|
•
|
Electronic physical security products include identification, access control, video surveillance and intrusion-related products, and networking infrastructure. Physical security products are used every day across every vertical market to protect lives, property and information. These technology products require specialized knowledge to deploy effectively, and ScanSource Security offers in-depth training and education to its partners to enable them to maintain the appropriate skill levels.
|
•
|
Communications technologies, such as 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.
|
•
|
Our service teams deliver value-added support programs, including education and training, customer configuration, marketing services, network assessments, WiFi services, and partnership programs. Service teams focus on reducing complexity, building efficiency and helping our customers to develop a new technology practice or to extend their capability and reach.
|
•
|
A master agent provides telecommunications network and cloud services and focuses on empowering and educating the channel through assisting business telecom and cloud technologies customers in making informed choices about services, technology and cost savings.
|
•
|
We have two non-exclusive agreements with Avaya. One agreement covers the distribution of Avaya products in the United States and Latin America, and the other agreement covers distribution of Avaya products in the United Kingdom and portions of continental Europe. Our Avaya agreements each have a one year term that automatically renews for additional one year terms. Either party may terminate upon 180 days' notice for the United States and Latin America agreement and upon 90 days' for the European agreement.
|
•
|
We have three non-exclusive agreements with Cisco. One agreement covers the distribution of Cisco products in the United States for our KBZ business and has a three year term; one agreement covers distribution of Cisco products in the Unites States for the ScanSource business and has a two year term; and one agreement covers distribution of products in Brazil and has a two year term. Each of these agreements must be renewed by written agreement. Either party may terminate the agreement upon 30 days' notice to the other party.
|
•
|
We have two non-exclusive agreements with Zebra. One agreement covers sales of Zebra hardware and software products in North and South America, and another agreement covers sales of Zebra hardware and software products in Europe, the Middle East and Africa ("EMEA"). The Zebra agreements each have a one year term that automatically renews for additional one year terms, and either party may terminate the agreement upon 30 days' notice to the other party.
|
ITEM 1A.
|
Risk Factors.
|
•
|
Fluctuations of foreign currency and exchange rates, which can impact sales, costs of the goods we sell and the reporting of our results and assets on our financial statements;
|
•
|
Difficulties in collecting accounts receivable and longer collection periods;
|
•
|
Changes in, or expiration of, various foreign incentives that provide economic benefits to us;
|
•
|
Labor laws that impact our ability to hire, retain and discharge employees;
|
•
|
Difficulties in staffing and managing operations in foreign countries;
|
•
|
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;
|
•
|
Changes in the interpretation and enforcement of laws (in particular related to items such as duty and taxation);
|
•
|
Global economic and financial market instability related to the U.K.’s referendum withdrawal from the E.U.;
|
•
|
Potential political and economic instability and changes in governments;
|
•
|
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 and similar laws of other jurisdictions, governing 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 or import privileges; and
|
•
|
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.
|
ITEM 2.
|
Properties.
|
Location
|
Approximate Square Footage
|
Type of Interest
|
Description of Use
|
United States
|
|
|
|
Greenville, SC
|
180,000
|
Owned
|
Headquarters - Principal Executive and Sales Offices
|
Southaven, MS
|
741,000
|
Leased
|
Warehouse
|
Miami, FL
|
29,000
|
Leased
|
Sales Office and Warehouse
|
Petaluma, CA
|
17,000
|
Leased
|
Sales and Administration Offices
|
|
|
|
|
International
|
|
|
|
Mexico City, Mexico
|
25,000
|
Leased
|
Sales Office and Warehouse
|
Coignieres, France
|
15,000
|
Leased
|
Sales Office and Warehouse
|
Mainz, Germany
|
16,000
|
Leased
|
Sales Office and Warehouse
|
Brussels, Belgium
|
28,000
|
Leased
|
Sales and Administration Offices
|
Sao Jose does Pinhais, Brazil
|
24,000
|
Leased
|
Sales Office and Warehouse
|
Serra, Espírito Santo, Brazil
|
26,000
|
Leased
|
Sales Office and Warehouse
|
Itajai, Santa Catarina, Brazil
|
164,000
|
Leased
|
Sales Office and Warehouse
|
ITEM 3.
|
Legal Proceedings.
|
ITEM 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
|
High
|
|
Low
|
||||
Fiscal Year 2017
|
|
|
|
||||
First quarter
|
$
|
43.49
|
|
|
$
|
33.89
|
|
Second quarter
|
41.70
|
|
|
29.05
|
|
||
Third quarter
|
44.95
|
|
|
38.35
|
|
||
Fourth quarter
|
41.95
|
|
|
37.05
|
|
||
Fiscal Year 2016
|
|
|
|
||||
First quarter
|
$
|
39.03
|
|
|
$
|
29.53
|
|
Second quarter
|
41.18
|
|
|
32.17
|
|
||
Third quarter
|
40.48
|
|
|
27.46
|
|
||
Fourth quarter
|
42.54
|
|
|
35.57
|
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||||
ScanSource, Inc.
|
$
|
100
|
|
|
$
|
104
|
|
|
$
|
124
|
|
|
$
|
124
|
|
|
$
|
121
|
|
|
$
|
132
|
|
NASDAQ Composite
|
$
|
100
|
|
|
$
|
118
|
|
|
$
|
156
|
|
|
$
|
177
|
|
|
$
|
173
|
|
|
$
|
221
|
|
SIC Code 5045 – Computers & Peripheral Equipment
|
$
|
100
|
|
|
$
|
114
|
|
|
$
|
158
|
|
|
$
|
151
|
|
|
$
|
182
|
|
|
$
|
242
|
|
Period
|
Total number of shares purchased
|
Average price paid per share
|
Total number of shares purchased as part of the publicly announced plan or program
|
Approximate dollar value of shares that may yet be purchased under the plan or program
|
||||||
September 1, 2016 through September 30, 2016
|
477,113
|
|
$
|
35.35
|
|
477,113
|
|
$
|
103,133,794
|
|
November 1, 2016 through November 30, 2016
|
100,530
|
|
$
|
34.51
|
|
100,530
|
|
$
|
99,664,707
|
|
Total
|
577,643
|
|
$
|
35.20
|
|
577,643
|
|
$
|
99,664,707
|
|
|
Fiscal Year Ended June 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Statement of income data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
3,568,186
|
|
|
$
|
3,540,226
|
|
|
$
|
3,218,626
|
|
|
$
|
2,913,634
|
|
|
$
|
2,876,964
|
|
Cost of goods sold
|
3,184,590
|
|
|
3,184,786
|
|
|
2,891,536
|
|
|
2,612,535
|
|
|
2,584,090
|
|
|||||
Gross profit
|
383,596
|
|
|
355,440
|
|
|
327,090
|
|
|
301,099
|
|
|
292,874
|
|
|||||
Selling, general and administrative expenses
|
265,178
|
|
|
240,115
|
|
|
210,985
|
|
|
185,116
|
|
|
182,759
|
|
|||||
Depreciation expense
|
9,444
|
|
|
7,326
|
|
|
5,356
|
|
|
3,496
|
|
|
3,602
|
|
|||||
Intangible amortization expense
|
15,524
|
|
|
9,828
|
|
|
6,641
|
|
|
3,880
|
|
|
4,855
|
|
|||||
Impairment charges (legal recovery)
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,490
|
)
|
|
48,772
|
|
|||||
Change in fair value of contingent consideration
|
5,211
|
|
|
1,294
|
|
|
2,667
|
|
|
2,311
|
|
|
1,843
|
|
|||||
Operating income
|
88,239
|
|
|
96,877
|
|
|
101,441
|
|
|
121,786
|
|
|
51,043
|
|
|||||
Interest expense
|
3,215
|
|
|
2,124
|
|
|
1,797
|
|
|
731
|
|
|
775
|
|
|||||
Interest income
|
(5,329
|
)
|
|
(3,448
|
)
|
|
(2,638
|
)
|
|
(2,364
|
)
|
|
(2,238
|
)
|
|||||
Other (income) expense, net
|
(11,142
|
)
|
|
2,191
|
|
|
2,376
|
|
|
312
|
|
|
(520
|
)
|
|||||
Income before income taxes
|
101,495
|
|
|
96,010
|
|
|
99,906
|
|
|
123,107
|
|
|
53,026
|
|
|||||
Provision for income taxes
|
32,249
|
|
|
32,391
|
|
|
34,487
|
|
|
41,318
|
|
|
18,364
|
|
|||||
Net income
|
$
|
69,246
|
|
|
$
|
63,619
|
|
|
$
|
65,419
|
|
|
$
|
81,789
|
|
|
$
|
34,662
|
|
Net income per common share, basic
|
$
|
2.74
|
|
|
$
|
2.40
|
|
|
$
|
2.29
|
|
|
$
|
2.89
|
|
|
$
|
1.25
|
|
Weighted-average shares outstanding, basic
|
25,318
|
|
|
26,472
|
|
|
28,558
|
|
|
28,337
|
|
|
27,774
|
|
|||||
Net income per common share, diluted
|
$
|
2.71
|
|
|
$
|
2.38
|
|
|
$
|
2.27
|
|
|
$
|
2.86
|
|
|
$
|
1.24
|
|
Weighted-average shares outstanding, diluted
|
25,515
|
|
|
26,687
|
|
|
28,799
|
|
|
28,602
|
|
|
27,994
|
|
|
As of June 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
$
|
624,748
|
|
|
$
|
643,793
|
|
|
$
|
645,398
|
|
|
$
|
715,850
|
|
|
$
|
614,378
|
|
Total assets
|
1,718,303
|
|
|
1,491,185
|
|
|
1,476,941
|
|
|
1,335,124
|
|
|
1,164,183
|
|
|||||
Total long-term debt (including current debt)
|
97,300
|
|
|
76,856
|
|
|
8,826
|
|
|
5,429
|
|
|
5,429
|
|
|||||
Total shareholders’ equity
|
$
|
837,145
|
|
|
$
|
774,496
|
|
|
$
|
808,985
|
|
|
$
|
802,643
|
|
|
$
|
695,956
|
|
ITEM 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Fiscal Year Ended June 30,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Statement of income data:
|
|
|
|
|
|
|||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
89.2
|
|
|
90.0
|
|
|
89.8
|
|
Gross profit
|
10.8
|
|
|
10.0
|
|
|
10.2
|
|
Selling, general and administrative expenses, net of amortization expense
|
7.4
|
|
|
6.8
|
|
|
6.6
|
|
Depreciation expense
|
0.3
|
|
|
0.2
|
|
|
0.2
|
|
Intangible amortization expense
|
0.4
|
|
|
0.3
|
|
|
0.2
|
|
Change in fair value of contingent consideration
|
0.1
|
|
|
0.0
|
|
|
0.1
|
|
Operating income
|
2.5
|
|
|
2.7
|
|
|
3.2
|
|
Interest expense (income), net
|
(0.1
|
)
|
|
0.0
|
|
|
0.0
|
|
Other expense (income), net
|
(0.3
|
)
|
|
0.1
|
|
|
0.1
|
|
Income before income taxes and minority interest
|
2.8
|
|
|
2.7
|
|
|
3.1
|
|
Provision for income taxes
|
0.9
|
|
|
0.9
|
|
|
1.1
|
|
Net income
|
1.9
|
%
|
|
1.8
|
%
|
|
2.0
|
%
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
% Change Constant Currency, Excluding Acquisitions (a)
|
||||||||
|
(in thousands)
|
|
|
|
|
||||||||||||
Sales by Segment:
|
|
|
|
|
|
|
|
|
|
||||||||
Worldwide Barcode, Networking & Security
|
$
|
2,389,256
|
|
|
$
|
2,361,670
|
|
|
$
|
27,586
|
|
|
1.2
|
%
|
|
(2.0
|
)%
|
Worldwide Communications & Services
|
1,178,930
|
|
|
1,178,556
|
|
|
374
|
|
|
—
|
%
|
|
(3.2
|
)%
|
|||
Total net sales
|
$
|
3,568,186
|
|
|
$
|
3,540,226
|
|
|
$
|
27,960
|
|
|
0.8
|
%
|
|
(2.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales by Geography Category:
|
|
|
|
|
|
|
|
|
|
||||||||
North American
|
$
|
2,685,820
|
|
|
$
|
2,620,184
|
|
|
$
|
65,636
|
|
|
2.5
|
%
|
|
(1.1
|
)%
|
International
|
882,366
|
|
|
920,042
|
|
|
(37,676
|
)
|
|
(4.1
|
)%
|
|
(6.1
|
)%
|
|||
Total net sales
|
$
|
3,568,186
|
|
|
$
|
3,540,226
|
|
|
$
|
27,960
|
|
|
0.8
|
%
|
|
(2.4
|
)%
|
(a)
A reconciliation of non-GAAP net sales in constant currency, excluding acquisitions is presented at the end of
Results of Operations
, under
Non-GAAP Financial Information
.
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
195,743
|
|
|
$
|
196,831
|
|
|
$
|
(1,088
|
)
|
|
(0.6
|
)%
|
|
8.2
|
%
|
|
8.3
|
%
|
Worldwide Communications & Services
|
187,853
|
|
|
158,609
|
|
|
29,244
|
|
|
18.4
|
%
|
|
15.9
|
%
|
|
13.5
|
%
|
|||
Total gross profit
|
$
|
383,596
|
|
|
$
|
355,440
|
|
|
$
|
28,156
|
|
|
7.9
|
%
|
|
10.8
|
%
|
|
10.0
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
2016
|
|
2015
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
196,831
|
|
|
$
|
175,699
|
|
|
$
|
21,132
|
|
|
12.0
|
%
|
|
8.3
|
%
|
|
8.3
|
%
|
Worldwide Communications & Services
|
158,609
|
|
|
151,391
|
|
|
7,218
|
|
|
4.8
|
%
|
|
13.5
|
%
|
|
13.8
|
%
|
|||
Total gross profit
|
$
|
355,440
|
|
|
$
|
327,090
|
|
|
$
|
28,350
|
|
|
8.7
|
%
|
|
10.0
|
%
|
|
10.2
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative expenses
|
$
|
265,178
|
|
|
$
|
240,115
|
|
|
$
|
25,063
|
|
|
10.4
|
%
|
|
7.4
|
%
|
|
6.8
|
%
|
Depreciation expense
|
9,444
|
|
|
7,326
|
|
|
2,118
|
|
|
28.9
|
%
|
|
0.3
|
%
|
|
0.2
|
%
|
|||
Intangible amortization expense
|
15,524
|
|
|
9,828
|
|
|
5,696
|
|
|
58.0
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
|||
Change in fair value of contingent consideration
|
5,211
|
|
|
1,294
|
|
|
3,917
|
|
|
302.7
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|||
Operating expenses
|
295,357
|
|
|
258,563
|
|
|
36,794
|
|
|
14.2
|
%
|
|
8.3
|
%
|
|
7.3
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
2016
|
|
2015
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Selling, general and administrative expense
|
$
|
240,115
|
|
|
$
|
210,985
|
|
|
$
|
29,130
|
|
|
13.8
|
%
|
|
6.8
|
%
|
|
6.6
|
%
|
Depreciation expense
|
7,326
|
|
|
5,356
|
|
|
1,970
|
|
|
36.8
|
%
|
|
0.2
|
%
|
|
0.2
|
%
|
|||
Intangible amortization expense
|
9,828
|
|
|
6,641
|
|
|
3,187
|
|
|
48.0
|
%
|
|
0.3
|
%
|
|
0.2
|
%
|
|||
Change in fair value of contingent consideration
|
1,294
|
|
|
2,667
|
|
|
(1,373
|
)
|
|
(51.5
|
)%
|
|
—
|
%
|
|
0.1
|
%
|
|||
Operating expenses
|
$
|
258,563
|
|
|
$
|
225,649
|
|
|
$
|
32,914
|
|
|
14.6
|
%
|
|
7.3
|
%
|
|
7.1
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
49,727
|
|
|
$
|
52,227
|
|
|
$
|
(2,500
|
)
|
|
(4.8
|
)%
|
|
2.1
|
%
|
|
2.2
|
%
|
Worldwide Communications & Services
|
39,768
|
|
|
45,513
|
|
|
(5,745
|
)
|
|
(12.6
|
)%
|
|
3.4
|
%
|
|
3.9
|
%
|
|||
Corporate
|
(1,256
|
)
|
|
(863
|
)
|
|
(393
|
)
|
|
45.5
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Total operating income
|
$
|
88,239
|
|
|
$
|
96,877
|
|
|
$
|
(8,638
|
)
|
|
(8.9
|
)%
|
|
2.5
|
%
|
|
2.7
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
2016
|
|
2015
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
52,227
|
|
|
$
|
47,985
|
|
|
$
|
4,242
|
|
|
8.8
|
%
|
|
2.2
|
%
|
|
2.3
|
%
|
Worldwide Communications & Services
|
45,513
|
|
|
56,710
|
|
|
(11,197
|
)
|
|
(19.7
|
)%
|
|
3.9
|
%
|
|
5.2
|
%
|
|||
Corporate
|
(863
|
)
|
|
(3,254
|
)
|
|
2,391
|
|
|
(73.5
|
)%
|
|
—
|
%
|
|
—
|
%
|
|||
Total operating income
|
$
|
96,877
|
|
|
$
|
101,441
|
|
|
$
|
(4,564
|
)
|
|
(4.5
|
)%
|
|
2.7
|
%
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Interest expense
|
$
|
3,215
|
|
|
$
|
2,124
|
|
|
$
|
1,091
|
|
|
51.4
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
Interest income
|
(5,329
|
)
|
|
(3,448
|
)
|
|
(1,881
|
)
|
|
54.6
|
%
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
|||
Net foreign exchange losses (gains)
|
1,919
|
|
|
2,571
|
|
|
(652
|
)
|
|
(25.4
|
)%
|
|
0.1
|
%
|
|
0.1
|
%
|
|||
Other, net
|
(13,061
|
)
|
|
(380
|
)
|
|
(12,681
|
)
|
|
3,337.1
|
%
|
|
(0.4
|
)%
|
|
—
|
%
|
|||
Total other (income) expense
|
$
|
(13,256
|
)
|
|
$
|
867
|
|
|
$
|
(14,123
|
)
|
|
(1,629.0
|
)%
|
|
(0.4
|
)%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
2016
|
|
2015
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Interest expense
|
$
|
2,124
|
|
|
$
|
1,797
|
|
|
$
|
327
|
|
|
18.2
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
Interest income
|
(3,448
|
)
|
|
(2,638
|
)
|
|
(810
|
)
|
|
30.7
|
%
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
|||
Net foreign exchange (gains) losses
|
2,571
|
|
|
3,044
|
|
|
(473
|
)
|
|
(15.5
|
)%
|
|
0.1
|
%
|
|
0.1
|
%
|
|||
Other, net
|
(380
|
)
|
|
(668
|
)
|
|
288
|
|
|
(43.1
|
)%
|
|
—
|
%
|
|
—
|
%
|
|||
Total other (income) expense
|
$
|
867
|
|
|
$
|
1,535
|
|
|
$
|
(668
|
)
|
|
(43.5
|
)%
|
|
—
|
%
|
|
—
|
%
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
Fiscal 2017
|
|
Fiscal 2016
|
||||||||||||||||||||||||||||
|
Jun. 30
2017
|
|
Mar. 31
2017
|
|
Dec. 31
2016
|
|
Sept. 30
2016
|
|
Jun. 30
2016
|
|
Mar. 31
2016
|
|
Dec. 31
2015
|
|
Sept. 30
2015
|
||||||||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||||||||||||||
Net sales
|
$
|
917,291
|
|
|
$
|
813,538
|
|
|
$
|
904,792
|
|
|
$
|
932,566
|
|
|
$
|
877,471
|
|
|
$
|
798,404
|
|
|
$
|
993,522
|
|
|
$
|
870,829
|
|
Cost of goods sold
|
816,435
|
|
|
720,867
|
|
|
806,258
|
|
|
841,032
|
|
|
794,692
|
|
|
713,928
|
|
|
892,889
|
|
|
783,277
|
|
||||||||
Gross profit
|
$
|
100,856
|
|
|
$
|
92,671
|
|
|
$
|
98,534
|
|
|
$
|
91,534
|
|
|
$
|
82,779
|
|
|
$
|
84,476
|
|
|
$
|
100,633
|
|
|
$
|
87,552
|
|
Net income
|
$
|
18,970
|
|
|
$
|
12,424
|
|
|
$
|
23,036
|
|
|
$
|
14,816
|
|
|
$
|
12,925
|
|
|
$
|
14,042
|
|
|
$
|
20,656
|
|
|
$
|
15,996
|
|
Net income per common share, basic
|
$
|
0.75
|
|
|
$
|
0.49
|
|
|
$
|
0.92
|
|
|
$
|
0.58
|
|
|
$
|
0.50
|
|
|
$
|
0.54
|
|
|
$
|
0.78
|
|
|
$
|
0.58
|
|
Weighted-average shares outstanding, basic
|
25,341
|
|
|
25,262
|
|
|
25,146
|
|
|
25,523
|
|
|
25,661
|
|
|
25,863
|
|
|
26,648
|
|
|
27,702
|
|
||||||||
Net income per common share, diluted
|
$
|
0.74
|
|
|
$
|
0.49
|
|
|
$
|
0.91
|
|
|
$
|
0.58
|
|
|
$
|
0.50
|
|
|
$
|
0.54
|
|
|
$
|
0.77
|
|
|
$
|
0.57
|
|
Weighted-average shares outstanding, diluted
|
25,512
|
|
|
25,400
|
|
|
25,285
|
|
|
25,762
|
|
|
25,879
|
|
|
25,967
|
|
|
26,902
|
|
|
27,929
|
|
|
Year ended June 30, 2017
|
|
Year ended June 30, 2016
|
||||||||||||||||||||||||||||
|
Operating Income
|
|
Pre-Tax Income
|
|
Net Income
|
|
Diluted EPS
|
|
Operating Income
|
|
Pre-Tax Income
|
|
Net Income
|
|
Diluted EPS
|
||||||||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||||||||||||||
GAAP Measures
|
$
|
88,239
|
|
|
$
|
101,495
|
|
|
$
|
69,246
|
|
|
$
|
2.71
|
|
|
$
|
96,877
|
|
|
$
|
96,010
|
|
|
$
|
63,619
|
|
|
$
|
2.38
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Amortization of intangible assets
|
15,524
|
|
|
15,524
|
|
|
10,247
|
|
|
0.40
|
|
|
9,828
|
|
|
9,828
|
|
|
6,790
|
|
|
0.25
|
|
||||||||
Change in fair value of contingent considerations
|
5,211
|
|
|
5,211
|
|
|
2,921
|
|
|
0.11
|
|
|
1,294
|
|
|
1,294
|
|
|
977
|
|
|
0.04
|
|
||||||||
Acquisition costs
|
1,256
|
|
|
1,256
|
|
|
1,256
|
|
|
0.06
|
|
|
863
|
|
|
863
|
|
|
863
|
|
|
0.04
|
|
||||||||
Legal settlement, net of attorney fees
|
—
|
|
|
(12,777
|
)
|
|
(8,047
|
)
|
|
(0.32
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Tax settlement and related interest income
|
—
|
|
|
(1,382
|
)
|
|
(5,370
|
)
|
|
(0.21
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Non-GAAP measures
|
$
|
110,230
|
|
|
$
|
109,327
|
|
|
$
|
70,253
|
|
|
$
|
2.75
|
|
|
$
|
108,862
|
|
|
$
|
107,995
|
|
|
$
|
72,249
|
|
|
$
|
2.71
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Return on invested capital ratio
|
13.1
|
%
|
|
13.3
|
%
|
|
14.6
|
%
|
Reconciliation of EBITDA to Net Income
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Net income (GAAP)
|
$
|
69,246
|
|
|
$
|
63,619
|
|
|
$
|
65,419
|
|
Plus: income taxes
|
32,249
|
|
|
32,391
|
|
|
34,487
|
|
|||
Plus: interest expense
|
3,215
|
|
|
2,124
|
|
|
1,797
|
|
|||
Plus: depreciation & amortization
|
24,968
|
|
|
17,154
|
|
|
11,997
|
|
|||
EBITDA
|
129,678
|
|
|
115,288
|
|
|
113,700
|
|
|||
Change in fair value of contingent consideration
|
5,211
|
|
|
1,294
|
|
|
2,667
|
|
|||
Acquisition costs
(a)
|
1,256
|
|
|
863
|
|
|
3,254
|
|
|||
Legal recovery, net of attorney fees
|
(12,777
|
)
|
|
—
|
|
|
—
|
|
|||
Interest income related to tax settlement
|
(1,382
|
)
|
|
—
|
|
|
—
|
|
|||
Adjusted EBITDA (numerator for ROIC) (non-GAAP)
|
$
|
121,986
|
|
|
$
|
117,445
|
|
|
$
|
119,621
|
|
Invested capital calculations
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Equity – beginning of the year
|
$
|
774,496
|
|
|
$
|
808,985
|
|
|
$
|
802,643
|
|
Equity – end of the year
|
837,145
|
|
|
774,496
|
|
|
808,985
|
|
|||
Change in fair value of contingent consideration, net of tax
|
2,921
|
|
|
977
|
|
|
1,842
|
|
|||
Acquisition costs
(a)
|
1,256
|
|
|
863
|
|
|
3,254
|
|
|||
Legal recovery, net of attorney fees
|
(8,047
|
)
|
|
—
|
|
|
—
|
|
|||
Tax settlement and related interest income, net of tax
|
(5,370
|
)
|
|
—
|
|
|
—
|
|
|||
Average equity, adjusted
|
801,201
|
|
|
792,661
|
|
|
808,362
|
|
|||
Average funded debt
(b)
|
131,445
|
|
|
93,500
|
|
|
13,421
|
|
|||
Invested capital (denominator)
|
$
|
932,646
|
|
|
$
|
886,161
|
|
|
$
|
821,783
|
|
|
|
|
|
|
|
•
|
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.
|
|
Year ended
|
||||||||||
Cash provided by (used in):
|
June 30, 2017
|
|
June 30, 2016
|
|
June 30, 2015
|
||||||
|
(in thousands)
|
||||||||||
Operating activities
|
$
|
94,876
|
|
|
$
|
52,211
|
|
|
$
|
75,522
|
|
Investing activities
|
(96,236
|
)
|
|
(73,556
|
)
|
|
(80,541
|
)
|
|||
Financing activities
|
(3,506
|
)
|
|
(36,305
|
)
|
|
(56,893
|
)
|
|||
Effect of exchange rate change on cash and cash equivalents
|
(440
|
)
|
|
(2,596
|
)
|
|
(11,293
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
$
|
(5,306
|
)
|
|
$
|
(60,246
|
)
|
|
$
|
(73,205
|
)
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Year 1
|
|
Years 2-3
|
|
Years 4-5
|
|
Greater than
5 Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Contractual Obligations
|
|
||||||||||||||||||
Non-cancelable operating leases
(1)
|
$
|
39,543
|
|
|
$
|
7,873
|
|
|
$
|
10,845
|
|
|
$
|
7,196
|
|
|
$
|
13,629
|
|
Capital lease
|
1,737
|
|
|
579
|
|
|
1,158
|
|
|
—
|
|
|
—
|
|
|||||
Principal debt payments
|
5,429
|
|
|
—
|
|
|
631
|
|
|
657
|
|
|
4,141
|
|
|||||
Contingent consideration
(2)
|
114,036
|
|
|
30,675
|
|
|
55,783
|
|
|
27,578
|
|
|
—
|
|
|||||
Other
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total obligations
|
$
|
160,745
|
|
|
$
|
39,127
|
|
|
$
|
68,417
|
|
|
$
|
35,431
|
|
|
$
|
17,770
|
|
(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 Intelisys and Network1 earnout payments are presented at their discounted fair value. Estimated future, undiscounted earnout payments could range as high as
$136.1 million
and
$7.5 million
, respectively, as of
June 30, 2017
.
|
(3)
|
Amounts totaling
$21.4 million
of deferred compensation, which are included in accrued expenses and other current liabilities and other long-term liabilities in our Consolidated Balance Sheets as of
June 30, 2017
, 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/ Grant Thornton LLP
|
|
/s/ Grant Thornton LLP
|
|
June 30,
2017 |
|
June 30,
2016 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
56,094
|
|
|
$
|
61,400
|
|
Accounts receivable, less allowance of $44,434 at June 30, 2017
and $39,032 at June 30, 2016
|
637,293
|
|
|
559,557
|
|
||
Inventories
|
531,314
|
|
|
558,581
|
|
||
Prepaid expenses and other current assets
|
56,322
|
|
|
49,367
|
|
||
Total current assets
|
1,281,023
|
|
|
1,228,905
|
|
||
Property and equipment, net
|
56,566
|
|
|
52,388
|
|
||
Goodwill
|
200,881
|
|
|
92,715
|
|
||
Identifiable intangible assets, net
|
101,513
|
|
|
51,127
|
|
||
Deferred income taxes
|
29,491
|
|
|
28,813
|
|
||
Other non-current assets
|
48,829
|
|
|
37,237
|
|
||
Total assets
|
$
|
1,718,303
|
|
|
$
|
1,491,185
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
513,155
|
|
|
471,487
|
|
||
Accrued expenses and other current liabilities
|
104,715
|
|
|
98,975
|
|
||
Current portion of contingent consideration
|
30,675
|
|
|
11,594
|
|
||
Income taxes payable
|
7,730
|
|
|
3,056
|
|
||
Total current liabilities
|
656,275
|
|
|
585,112
|
|
||
Deferred income taxes
|
2,008
|
|
|
2,555
|
|
||
Long-term debt, net of current portion
|
5,429
|
|
|
5,429
|
|
||
Borrowings under revolving credit facility
|
91,871
|
|
|
71,427
|
|
||
Long-term portion of contingent consideration
|
83,361
|
|
|
13,058
|
|
||
Other long-term liabilities
|
42,214
|
|
|
39,108
|
|
||
Total liabilities
|
881,158
|
|
|
716,689
|
|
||
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, 25,431,845 and 25,614,673 shares issued and outstanding at June 30, 2017 and June 30, 2016, respectively
|
61,169
|
|
|
67,249
|
|
||
Retained earnings
|
849,180
|
|
|
779,934
|
|
||
Accumulated other comprehensive loss
|
(73,204
|
)
|
|
(72,687
|
)
|
||
Total shareholders’ equity
|
837,145
|
|
|
774,496
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,718,303
|
|
|
$
|
1,491,185
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
$
|
3,568,186
|
|
|
$
|
3,540,226
|
|
|
$
|
3,218,626
|
|
Cost of goods sold
|
3,184,590
|
|
|
3,184,786
|
|
|
2,891,536
|
|
|||
Gross profit
|
383,596
|
|
|
355,440
|
|
|
327,090
|
|
|||
Selling, general and administrative expenses
|
265,178
|
|
|
240,115
|
|
|
210,985
|
|
|||
Depreciation expense
|
9,444
|
|
|
7,326
|
|
|
5,356
|
|
|||
Intangible amortization expense
|
15,524
|
|
|
9,828
|
|
|
6,641
|
|
|||
Change in fair value of contingent consideration
|
5,211
|
|
|
1,294
|
|
|
2,667
|
|
|||
Operating income
|
88,239
|
|
|
96,877
|
|
|
101,441
|
|
|||
Interest expense
|
3,215
|
|
|
2,124
|
|
|
1,797
|
|
|||
Interest income
|
(5,329
|
)
|
|
(3,448
|
)
|
|
(2,638
|
)
|
|||
Other (income) expense, net
|
(11,142
|
)
|
|
2,191
|
|
|
2,376
|
|
|||
Income before income taxes
|
101,495
|
|
|
96,010
|
|
|
99,906
|
|
|||
Provision for income taxes
|
32,249
|
|
|
32,391
|
|
|
34,487
|
|
|||
Net income
|
$
|
69,246
|
|
|
$
|
63,619
|
|
|
$
|
65,419
|
|
Per share data:
|
|
|
|
|
|
||||||
Net income per common share, basic
|
$
|
2.74
|
|
|
$
|
2.40
|
|
|
$
|
2.29
|
|
Weighted-average shares outstanding, basic
|
25,318
|
|
|
26,472
|
|
|
28,558
|
|
|||
Net income per common share, diluted
|
$
|
2.71
|
|
|
$
|
2.38
|
|
|
$
|
2.27
|
|
Weighted-average shares outstanding, diluted
|
25,515
|
|
|
26,687
|
|
|
28,799
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
69,246
|
|
|
$
|
63,619
|
|
|
$
|
65,419
|
|
Unrealized gain on hedged transaction, net of tax
|
13
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency translation adjustment
|
(530
|
)
|
|
(8,185
|
)
|
|
(47,802
|
)
|
|||
Comprehensive income
|
$
|
68,729
|
|
|
$
|
55,434
|
|
|
$
|
17,617
|
|
|
|
|
|
|
|
||||||
See accompanying notes to these consolidated financial statements.
|
|
|
|||||||||
|
|
|
|
|
|
|
Common
Stock
(Shares)
|
|
Common
Stock
(Amount)
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||
Balance at June 30, 2014
|
28,539,481
|
|
|
$
|
168,447
|
|
|
$
|
650,896
|
|
|
$
|
(16,700
|
)
|
|
$
|
802,643
|
|
Net income
|
—
|
|
|
—
|
|
|
65,419
|
|
|
—
|
|
|
65,419
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(47,802
|
)
|
|
(47,802
|
)
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
154,497
|
|
|
760
|
|
|
—
|
|
|
—
|
|
|
760
|
|
||||
Common stock repurchased
|
(479,825
|
)
|
|
(18,768
|
)
|
|
|
|
|
|
(18,768
|
)
|
||||||
Share based compensation
|
—
|
|
|
6,517
|
|
|
—
|
|
|
—
|
|
|
6,517
|
|
||||
Tax benefit of deductible compensation arising from exercise or vesting of share-based payment arrangements
|
—
|
|
|
216
|
|
|
—
|
|
|
—
|
|
|
216
|
|
||||
Balance at June 30, 2015
|
28,214,153
|
|
|
$
|
157,172
|
|
|
$
|
716,315
|
|
|
$
|
(64,502
|
)
|
|
$
|
808,985
|
|
Net income
|
—
|
|
|
—
|
|
|
63,619
|
|
|
—
|
|
|
63,619
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,185
|
)
|
|
(8,185
|
)
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
284,730
|
|
|
3,994
|
|
|
—
|
|
|
—
|
|
|
3,994
|
|
||||
Common stock repurchased
|
(2,884,210
|
)
|
|
(100,751
|
)
|
|
|
|
|
|
(100,751
|
)
|
||||||
Share based compensation
|
—
|
|
|
7,093
|
|
|
—
|
|
|
—
|
|
|
7,093
|
|
||||
Tax shortfall from exercise or vesting of share-based payment arrangements
|
—
|
|
|
(259
|
)
|
|
—
|
|
|
—
|
|
|
(259
|
)
|
||||
Balance at June 30, 2016
|
25,614,673
|
|
|
$
|
67,249
|
|
|
$
|
779,934
|
|
|
$
|
(72,687
|
)
|
|
$
|
774,496
|
|
Net income
|
—
|
|
|
—
|
|
|
69,246
|
|
|
—
|
|
|
69,246
|
|
||||
Unrealized gain (loss) on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(530
|
)
|
|
(530
|
)
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
394,815
|
|
|
8,208
|
|
|
—
|
|
|
—
|
|
|
8,208
|
|
||||
Common stock repurchased
|
(577,643
|
)
|
|
(20,335
|
)
|
|
—
|
|
|
—
|
|
|
(20,335
|
)
|
||||
Share based compensation
|
—
|
|
|
6,578
|
|
|
—
|
|
|
—
|
|
|
6,578
|
|
||||
Tax shortfall from exercise or vesting of share-based payment arrangements
|
—
|
|
|
(531
|
)
|
|
—
|
|
|
—
|
|
|
(531
|
)
|
||||
Balance at June 30, 2017
|
25,431,845
|
|
|
$
|
61,169
|
|
|
$
|
849,180
|
|
|
$
|
(73,204
|
)
|
|
$
|
837,145
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
69,246
|
|
|
$
|
63,619
|
|
|
$
|
65,419
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
24,968
|
|
|
17,154
|
|
|
11,997
|
|
|||
Amortization of debt issue costs
|
290
|
|
|
297
|
|
|
297
|
|
|||
Provision for doubtful accounts
|
8,901
|
|
|
7,571
|
|
|
993
|
|
|||
Share-based compensation
|
6,602
|
|
|
7,093
|
|
|
6,522
|
|
|||
Deferred income taxes
|
(1,861
|
)
|
|
1,846
|
|
|
3,921
|
|
|||
Excess tax benefits from share-based payment arrangements
|
(89
|
)
|
|
(101
|
)
|
|
(260
|
)
|
|||
Change in fair value of contingent consideration
|
5,211
|
|
|
1,294
|
|
|
2,667
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(66,129
|
)
|
|
14,167
|
|
|
(14,476
|
)
|
|||
Inventories
|
28,449
|
|
|
2,999
|
|
|
(37,695
|
)
|
|||
Prepaid expenses and other assets
|
(4,300
|
)
|
|
4,612
|
|
|
2,337
|
|
|||
Other noncurrent assets
|
(9,540
|
)
|
|
(2,186
|
)
|
|
1,431
|
|
|||
Accounts payable
|
19,861
|
|
|
(71,706
|
)
|
|
28,280
|
|
|||
Accrued expenses and other liabilities
|
8,491
|
|
|
6,401
|
|
|
7,449
|
|
|||
Income taxes payable
|
4,776
|
|
|
(849
|
)
|
|
(3,360
|
)
|
|||
Net cash provided by operating activities
|
94,876
|
|
|
52,211
|
|
|
75,522
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(8,849
|
)
|
|
(12,081
|
)
|
|
(20,762
|
)
|
|||
Cash paid for business acquisitions, net of cash acquired
|
(83,804
|
)
|
|
(61,475
|
)
|
|
(59,779
|
)
|
|||
Payments for acquisition of intangible assets
|
(3,583
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(96,236
|
)
|
|
(73,556
|
)
|
|
(80,541
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Borrowings (repayments) short-term borrowings, net
|
—
|
|
|
—
|
|
|
(24,097
|
)
|
|||
Borrowings on revolving credit, net of expenses
|
1,813,062
|
|
|
1,376,620
|
|
|
93,579
|
|
|||
Repayments on revolving credit, net of expenses
|
(1,792,620
|
)
|
|
(1,305,193
|
)
|
|
(93,579
|
)
|
|||
Repayments on long-term debt
|
—
|
|
|
(2,792
|
)
|
|
(9,146
|
)
|
|||
Repayments of capital lease obligations
|
(246
|
)
|
|
(223
|
)
|
|
(262
|
)
|
|||
Debt issuance costs
|
(876
|
)
|
|
—
|
|
|
—
|
|
|||
Contingent consideration payments
|
(10,241
|
)
|
|
(8,606
|
)
|
|
(5,640
|
)
|
|||
Exercise of stock options
|
8,208
|
|
|
3,994
|
|
|
760
|
|
|||
Repurchase of common stock
|
(20,882
|
)
|
|
(100,206
|
)
|
|
(18,768
|
)
|
|||
Excess tax benefits from share-based payment arrangements
|
89
|
|
|
101
|
|
|
260
|
|
|||
Net cash used in financing activities
|
(3,506
|
)
|
|
(36,305
|
)
|
|
(56,893
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(440
|
)
|
|
(2,596
|
)
|
|
(11,293
|
)
|
|||
Decrease in cash and cash equivalents
|
(5,306
|
)
|
|
(60,246
|
)
|
|
(73,205
|
)
|
|||
Cash and cash equivalents at beginning of period
|
61,400
|
|
|
121,646
|
|
|
194,851
|
|
|||
Cash and cash equivalents at end of period
|
$
|
56,094
|
|
|
$
|
61,400
|
|
|
$
|
121,646
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(continued)
|
||||||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest paid during the year
|
$
|
2,831
|
|
|
$
|
1,706
|
|
|
$
|
1,075
|
|
Income taxes paid during the year
|
$
|
31,126
|
|
|
$
|
33,859
|
|
|
$
|
36,272
|
|
(1)
|
Business and Summary of Significant Accounting Policies
|
•
|
Industry weighted-average cost of capital ("WACC"): The Company 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: The Company 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: The Company utilized a projected cash flow impact pertaining to expected changes in working capital as each of its goodwill reporting units grow.
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands, except per share data)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
69,246
|
|
|
63,619
|
|
|
65,419
|
|
||
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
|
||||
Weighted-average shares, basic
|
25,318
|
|
26,472
|
|
|
28,558
|
|
||||
Dilutive effect of share-based payments
|
197
|
|
|
215
|
|
|
241
|
|
|||
Weighted-average shares, diluted
|
25,515
|
|
26,687
|
|
|
28,799
|
|
||||
|
|
|
|
|
|
|
|
||||
Net income per common share, basic
|
$
|
2.74
|
|
|
$
|
2.40
|
|
|
$
|
2.29
|
|
Net income per common share, diluted
|
$
|
2.71
|
|
|
$
|
2.38
|
|
|
$
|
2.27
|
|
|
June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Land
|
$
|
3,331
|
|
|
$
|
3,009
|
|
Buildings and leasehold improvements
|
21,101
|
|
|
20,473
|
|
||
Computer software and equipment
|
53,583
|
|
|
46,112
|
|
||
Furniture, fixtures and equipment
|
26,059
|
|
|
23,316
|
|
||
Construction in progress
|
4,556
|
|
|
4,897
|
|
||
|
108,630
|
|
|
97,807
|
|
||
Less accumulated depreciation
|
(52,064
|
)
|
|
(45,419
|
)
|
||
|
$
|
56,566
|
|
|
$
|
52,388
|
|
|
June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Deferred warranty revenue
|
$
|
28,724
|
|
|
$
|
29,836
|
|
Accrued compensation
|
21,713
|
|
|
19,917
|
|
||
Other taxes payable
|
18,440
|
|
|
11,044
|
|
||
Accrued marketing expense
|
5,914
|
|
|
2,459
|
|
||
Brazilian pre-acquisition contingencies
|
4,727
|
|
|
2,941
|
|
||
Accrued freight
|
3,392
|
|
|
3,507
|
|
||
Other accrued liabilities
|
21,805
|
|
|
29,271
|
|
||
|
$
|
104,715
|
|
|
$
|
98,975
|
|
|
Intelisys
|
||
|
(in thousands)
|
||
Receivables, net
|
$
|
21,655
|
|
Other current assets
|
1,547
|
|
|
Property and equipment, net
|
5,298
|
|
|
Goodwill
|
109,005
|
|
|
Identifiable intangible assets
|
63,110
|
|
|
Other non-current assets
|
1,839
|
|
|
|
$
|
202,454
|
|
Accounts payable
|
$
|
21,063
|
|
Accrued expenses and other current liabilities
|
2,587
|
|
|
Contingent consideration
|
95,000
|
|
|
Consideration transferred, net of cash acquired
|
83,804
|
|
|
|
$
|
202,454
|
|
|
Fiscal year ended June 30, 2017
|
||
|
(in thousands)
|
||
Net Sales
|
$
|
29,422
|
|
Amortization of intangible assets
|
(5,386
|
)
|
|
Change in fair value of contingent consideration
|
(12,117
|
)
|
|
Operating loss
(1)
|
(4,204
|
)
|
|
Net loss
(1)
|
$
|
(2,675
|
)
|
|
Fiscal year ended June 30, 2017
|
|
Fiscal year ended June 30, 2016
|
||||||||||||
|
(in thousands, except per share data)
|
|
(in thousands, except per share data)
|
||||||||||||
|
As Reported, Consolidated
|
|
Pro forma, Consolidated
(1)
|
|
As Reported, Consolidated
|
|
Pro forma, Consolidated
(2)
|
||||||||
Net Sales
|
$
|
3,568,186
|
|
|
$
|
3,573,402
|
|
|
$
|
3,540,226
|
|
|
$
|
3,568,567
|
|
Operating income
|
88,239
|
|
|
89,691
|
|
|
96,877
|
|
|
102,085
|
|
||||
Net Income
|
69,246
|
|
|
70,331
|
|
|
63,619
|
|
|
66,823
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
2.74
|
|
|
$
|
2.78
|
|
|
$
|
2.40
|
|
|
$
|
2.52
|
|
Diluted
|
$
|
2.71
|
|
|
$
|
2.76
|
|
|
$
|
2.38
|
|
|
$
|
2.50
|
|
|
September 4, 2015
|
||
|
(in thousands)
|
||
Receivables, net
|
$
|
63,131
|
|
Inventory
|
11,227
|
|
|
Other current assets
|
10,303
|
|
|
Property and equipment, net
|
677
|
|
|
Goodwill
|
21,639
|
|
|
Identifiable intangible assets
|
18,400
|
|
|
Other non-current assets
|
1,399
|
|
|
|
$
|
126,776
|
|
Accounts payable
|
$
|
48,271
|
|
Accrued expenses and other current liabilities
|
14,863
|
|
|
Other long-term liabilities
|
2,167
|
|
|
Consideration transferred, net of cash acquired
|
61,475
|
|
|
|
$
|
126,776
|
|
(6)
|
Goodwill and Other Identifiable Intangible Assets
|
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance at June 30, 2015
|
$
|
15,535
|
|
|
$
|
50,974
|
|
|
$
|
66,509
|
|
Additions
|
21,639
|
|
|
8,496
|
|
1
|
30,135
|
|
|||
Unrealized gain (loss) on foreign currency translation
|
(740
|
)
|
|
(3,189
|
)
|
|
(3,929
|
)
|
|||
Balance at June 30, 2016
|
$
|
36,434
|
|
|
$
|
56,281
|
|
|
$
|
92,715
|
|
Additions
|
—
|
|
|
109,005
|
|
2
|
109,005
|
|
|||
Unrealized gain (loss) on foreign currency translation
|
(174
|
)
|
|
(665
|
)
|
|
(839
|
)
|
|||
Balance at June 30, 2017
|
$
|
36,260
|
|
|
$
|
164,621
|
|
|
$
|
200,881
|
|
|
June 30, 2017
|
|
June 30, 2016
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Book
Value
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Book
Value
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
110,691
|
|
|
$
|
27,977
|
|
|
$
|
82,714
|
|
|
$
|
70,379
|
|
|
$
|
26,668
|
|
|
$
|
43,711
|
|
Trade names
|
23,256
|
|
|
8,691
|
|
|
14,565
|
|
|
11,270
|
|
|
4,398
|
|
|
6,872
|
|
||||||
Non-compete agreements
|
1,160
|
|
|
608
|
|
|
552
|
|
|
1,103
|
|
|
777
|
|
|
326
|
|
||||||
Distributor agreements
|
355
|
|
|
158
|
|
|
197
|
|
|
345
|
|
|
127
|
|
|
218
|
|
||||||
Supplier partner program
|
3,583
|
|
|
98
|
|
|
3,485
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total intangibles
|
$
|
139,045
|
|
|
$
|
37,532
|
|
|
$
|
101,513
|
|
|
$
|
83,097
|
|
|
$
|
31,970
|
|
|
$
|
51,127
|
|
(7)
|
Short-Term Borrowings and Long-Term Debt
|
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Revolving credit facility
|
$
|
91,871
|
|
|
$
|
71,427
|
|
Long term debt
|
5,429
|
|
|
5,429
|
|
||
Total debt
|
$
|
97,300
|
|
|
$
|
76,856
|
|
|
Revolving Credit Facility
|
|
Long-Term Debt
|
||||
|
(in thousands)
|
||||||
Fiscal year:
|
|
|
|
||||
2018
|
$
|
—
|
|
|
$
|
—
|
|
2019
|
—
|
|
|
312
|
|
||
2020
|
—
|
|
|
319
|
|
||
2021
|
—
|
|
|
325
|
|
||
2022
|
91,871
|
|
|
332
|
|
||
Thereafter
|
—
|
|
|
4,141
|
|
||
Total principal payments
|
$
|
91,871
|
|
|
$
|
5,429
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Net foreign exchange derivative contract (gain) loss
|
$
|
146
|
|
|
$
|
(1,951
|
)
|
|
$
|
(5,364
|
)
|
Net foreign currency transactional and re-measurement (gain) loss
|
1,773
|
|
|
4,522
|
|
|
8,408
|
|
|||
Net foreign currency (gain) loss
|
$
|
1,919
|
|
|
$
|
2,571
|
|
|
$
|
3,044
|
|
|
Fiscal Year Ended June 30, 2017
|
||
|
(in thousands)
|
||
Net interest expense recognized as a result of interest rate swap
|
$
|
7
|
|
Unrealized gain (loss) in fair value of interest swap rates
|
14
|
|
|
Net increase (decrease) in accumulated other comprehensive income (loss)
|
$
|
21
|
|
Income tax effect
|
8
|
|
|
Net increase (decrease) in accumulated other comprehensive income (loss), net of tax
|
$
|
13
|
|
|
June 30, 2017
|
||||||||
|
Balance Sheet Location
|
|
Fair Value of Derivatives
Designated as Hedge
Instruments
|
|
Fair Value of Derivatives
Not Designated as Hedge
Instruments
|
||||
|
|
|
(in thousands)
|
||||||
Derivative assets:
|
|
|
|
|
|
||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
$
|
—
|
|
|
$
|
35
|
|
Interest rate swap agreement
|
Other non-current assets
|
|
$
|
21
|
|
|
$
|
—
|
|
Derivative liabilities:
|
|
|
|
|
|
||||
Foreign exchange contracts
|
Accrued expenses and other current liabilities
|
|
$
|
—
|
|
|
$
|
131
|
|
•
|
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
|
$
|
21,439
|
|
|
$
|
21,439
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
35
|
|
|
—
|
|
|
35
|
|
|
—
|
|
||||
Interest rate swap agreement
|
21
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
21,495
|
|
|
$
|
21,439
|
|
|
$
|
56
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
21,074
|
|
|
$
|
21,074
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
131
|
|
|
—
|
|
|
131
|
|
|
—
|
|
||||
Liability for contingent consideration, current and non-current
|
114,036
|
|
|
—
|
|
|
—
|
|
|
114,036
|
|
||||
Total liabilities at fair value
|
$
|
135,241
|
|
|
$
|
21,074
|
|
|
$
|
131
|
|
|
$
|
114,036
|
|
|
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
|
$
|
17,893
|
|
|
$
|
17,893
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
33
|
|
|
—
|
|
|
33
|
|
|
—
|
|
||||
Interest rate swap agreement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
17,926
|
|
|
$
|
17,893
|
|
|
$
|
33
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
17,893
|
|
|
$
|
17,893
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
551
|
|
|
—
|
|
|
551
|
|
|
—
|
|
||||
Liability for contingent consideration, current and non-current
|
24,652
|
|
|
—
|
|
|
—
|
|
|
24,652
|
|
||||
Total liabilities at fair value
|
$
|
43,096
|
|
|
$
|
17,893
|
|
|
$
|
551
|
|
|
$
|
24,652
|
|
|
Contingent Consideration for the Fiscal Year Ended
|
||||||||||
|
June 30, 2017
|
||||||||||
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Fair value at beginning of period
|
$
|
—
|
|
|
$
|
24,652
|
|
|
$
|
24,652
|
|
Issuance of contingent consideration
|
—
|
|
|
95,000
|
|
|
95,000
|
|
|||
Payments
|
—
|
|
|
(10,241
|
)
|
|
(10,241
|
)
|
|||
Change in fair value
|
—
|
|
|
5,211
|
|
|
5,211
|
|
|||
Fluctuation due to foreign currency exchange
|
—
|
|
|
(586
|
)
|
|
(586
|
)
|
|||
Fair value at end of period
|
$
|
—
|
|
|
$
|
114,036
|
|
|
$
|
114,036
|
|
|
Contingent Consideration for the Fiscal Year Ended
|
||||||||||
|
June 30, 2016
|
||||||||||
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Fair value at beginning of period
|
$
|
5,109
|
|
|
$
|
28,851
|
|
|
$
|
33,960
|
|
Payments
|
(4,453
|
)
|
|
(4,153
|
)
|
|
(8,606
|
)
|
|||
Change in fair value
|
181
|
|
|
1,113
|
|
|
1,294
|
|
|||
Fluctuation due to foreign currency exchange
|
(837
|
)
|
|
(1,159
|
)
|
|
(1,996
|
)
|
|||
Fair value at end of period
|
$
|
—
|
|
|
$
|
24,652
|
|
|
$
|
24,652
|
|
•
|
estimated future results, net of pro forma adjustments set forth in the purchase agreements;
|
•
|
the probability of achieving these results; and
|
•
|
a discount rate reflective of the Company's creditworthiness and market risk premium associated with the United States, Brazilian and European markets.
|
Reporting Period
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Weighted Average Rates
|
|
June 30, 2017
|
|
Discounted cash flow
|
|
Weighted average cost of capital
|
|
14.2
|
%
|
|
|
|
|
Adjusted EBITDA growth rate
|
|
17.0
|
%
|
|
|
|
|
|
|
|
|
June 30, 2016
|
|
Discounted cash flow
|
|
Weighted average cost of capital
|
|
17.1
|
%
|
|
|
|
|
Adjusted EBITDA growth rate
|
|
40.7
|
%
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Share-based compensation related to:
|
|
|
|
|
|
||||||
Equity classified stock options
|
$
|
1,356
|
|
|
$
|
1,479
|
|
|
$
|
1,480
|
|
Equity classified restricted stock
|
5,246
|
|
|
5,614
|
|
|
5,042
|
|
|||
Total share-based compensation
|
$
|
6,602
|
|
|
$
|
7,093
|
|
|
$
|
6,522
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Expected term
|
5 years
|
|
|
4.02 years
|
|
|
4.02 years
|
|
|||
Expected volatility
|
30.88
|
%
|
|
28.70
|
%
|
|
30.06
|
%
|
|||
Risk-free interest rate
|
1.84
|
%
|
|
1.47
|
%
|
|
1.22
|
%
|
|||
Dividend yield
|
0.00
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
|||
Weighted-average fair value per option
|
$
|
11.26
|
|
|
$
|
9.53
|
|
|
$
|
10.51
|
|
|
Fiscal Year Ended June 30, 2017
|
|||||||||||
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding, beginning of year
|
1,098,165
|
|
|
$
|
36.52
|
|
|
|
|
|
||
Granted during the period
|
77,339
|
|
|
37.00
|
|
|
|
|
|
|||
Exercised during the period
|
(300,590
|
)
|
|
33.40
|
|
|
|
|
|
|||
Canceled, forfeited, or expired during the period
|
(1,925
|
)
|
|
39.12
|
|
|
|
|
|
|||
Outstanding, end of year
|
872,989
|
|
|
37.63
|
|
|
5.81
|
|
$
|
2,759,060
|
|
|
Vested and expected to vest at June 30, 2017
|
872,187
|
|
|
37.63
|
|
|
5.81
|
|
$
|
2,756,896
|
|
|
Exercisable, end of year
|
657,019
|
|
|
$
|
37.35
|
|
|
4.92
|
|
$
|
2,321,846
|
|
|
Fiscal Year Ended June 30, 2017
|
|||||||||
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Grant
Date Fair-
Value
|
|||||
Unvested, beginning of year
|
278,495
|
|
|
$
|
39.96
|
|
|
$
|
10.27
|
|
Granted
|
77,339
|
|
|
37.00
|
|
|
11.26
|
|
||
Vested
|
(138,214
|
)
|
|
40.61
|
|
|
10.60
|
|
||
Canceled or forfeited
|
(1,650
|
)
|
|
39.53
|
|
|
12.26
|
|
||
Unvested, end of year
|
215,970
|
|
|
$
|
38.48
|
|
|
$
|
10.39
|
|
|
|
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
|
||||||
$18.13 - $22.27
|
|
2,800
|
|
|
1.43
|
|
$
|
18.14
|
|
|
2,800
|
|
|
$
|
18.14
|
|
$22.27 - $26.38
|
|
29,991
|
|
|
2.43
|
|
24.57
|
|
|
29,991
|
|
|
24.57
|
|
||
$26.38 - $30.49
|
|
20,731
|
|
|
5.44
|
|
29.80
|
|
|
20,731
|
|
|
29.80
|
|
||
$30.49 - $34.60
|
|
82,839
|
|
|
4.99
|
|
34.27
|
|
|
82,839
|
|
|
34.27
|
|
||
$34.60 - $38.71
|
|
452,179
|
|
|
5.48
|
|
36.97
|
|
|
290,360
|
|
|
36.62
|
|
||
$38.71 - $42.82
|
|
284,449
|
|
|
7.01
|
|
41.79
|
|
|
230,298
|
|
|
41.95
|
|
||
|
|
872,989
|
|
|
5.81
|
|
$
|
37.63
|
|
|
657,019
|
|
|
$
|
37.35
|
|
|
Fiscal Year Ended June 30, 2017
|
|||||||||
|
Shares
granted
|
|
Date granted
|
|
Grant date
fair value
|
|
Vesting period
|
|||
Employees
|
|
|
|
|
|
|
|
|||
Certain employees based on performance
|
207
|
|
|
September 2, 2016
|
|
$
|
35.79
|
|
|
Annually over 3 years
|
Certain employees based on promotion
|
2,884
|
|
|
September 7, 2016
|
|
$
|
35.73
|
|
|
Annually over 3 years
|
Certain employees based on performance
|
433
|
|
|
September 7, 2016
|
|
$
|
35.73
|
|
|
Annually over 3 years
|
Certain employees based on promotion
|
721
|
|
|
November 10, 2016
|
|
$
|
34.20
|
|
|
Annually over 3 years
|
Certain employees
|
151,623
|
|
|
December 2, 2016
|
|
$
|
37.00
|
|
|
Annually over 3 years
|
Non-Employee Directors
(1)
|
|
|
|
|
|
|
|
|||
Certain Directors
|
14,500
|
|
|
December 2, 2016
|
|
$
|
37.00
|
|
|
6 months
|
|
Fiscal Year Ended June 30, 2017
|
|||||
|
Shares
|
|
Weighted-Average
Grant Date Fair
Value
|
|||
Outstanding, beginning of year
|
274,804
|
|
|
$
|
39.06
|
|
Granted during the period
|
170,368
|
|
|
36.77
|
|
|
Target shares adjustment during the period
(1)
|
(1,008
|
)
|
|
34.80
|
|
|
Vested during the period
|
(137,894
|
)
|
|
40.07
|
|
|
Cancelled, forfeited, or expired during the period
|
(38,884
|
)
|
|
38.18
|
|
|
Outstanding, end of year
|
267,386
|
|
|
$
|
37.86
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Matching contributions
|
$
|
875
|
|
|
$
|
735
|
|
|
$
|
626
|
|
Discretionary contributions
|
3,413
|
|
|
3,617
|
|
|
5,350
|
|
|||
Total contributions
|
$
|
4,288
|
|
|
$
|
4,352
|
|
|
$
|
5,976
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
31,149
|
|
|
$
|
21,855
|
|
|
$
|
24,658
|
|
State
|
2,615
|
|
|
1,652
|
|
|
1,639
|
|
|||
Foreign
|
269
|
|
|
6,100
|
|
|
4,927
|
|
|||
Total current
|
34,033
|
|
|
29,607
|
|
|
31,224
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(3,832
|
)
|
|
3,990
|
|
|
2,165
|
|
|||
State
|
(397
|
)
|
|
365
|
|
|
198
|
|
|||
Foreign
|
2,445
|
|
|
(1,571
|
)
|
|
900
|
|
|||
Total deferred
|
(1,784
|
)
|
|
2,784
|
|
|
3,263
|
|
|||
Provision for income taxes
|
$
|
32,249
|
|
|
$
|
32,391
|
|
|
$
|
34,487
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
U.S. Federal income tax at statutory rate
|
$
|
35,524
|
|
|
$
|
33,603
|
|
|
$
|
34,967
|
|
Increase (decrease) in income taxes due to:
|
|
|
|
|
|
||||||
State and local income taxes, net of Federal benefit
|
1,729
|
|
|
1,578
|
|
|
1,318
|
|
|||
Tax credits
|
(1,430
|
)
|
|
(2,517
|
)
|
|
(1,435
|
)
|
|||
Valuation allowance
|
444
|
|
|
541
|
|
|
582
|
|
|||
Effect of foreign operations, net
|
(1,477
|
)
|
|
(1,150
|
)
|
|
(1,665
|
)
|
|||
Stock compensation
|
(61
|
)
|
|
(62
|
)
|
|
(419
|
)
|
|||
Capitalized acquisition costs
|
231
|
|
|
70
|
|
|
839
|
|
|||
Nontaxable income
|
(4,437
|
)
|
|
—
|
|
|
—
|
|
|||
Disallowed interest
|
2,011
|
|
|
571
|
|
|
—
|
|
|||
Other
|
(285
|
)
|
|
(243
|
)
|
|
300
|
|
|||
Provision for income taxes
|
$
|
32,249
|
|
|
$
|
32,391
|
|
|
$
|
34,487
|
|
|
June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Deferred tax assets derived from:
|
|
|
|
||||
Allowance for accounts receivable
|
$
|
11,687
|
|
|
$
|
12,458
|
|
Inventories
|
5,235
|
|
|
4,799
|
|
||
Nondeductible accrued expenses
|
3,968
|
|
|
3,842
|
|
||
Net operating loss carryforwards
|
3,141
|
|
|
3,036
|
|
||
Tax credits
|
4,094
|
|
|
3,316
|
|
||
Timing of amortization deduction from goodwill
|
1,285
|
|
|
2,660
|
|
||
Deferred compensation
|
7,934
|
|
|
6,733
|
|
||
Stock compensation
|
5,424
|
|
|
6,014
|
|
||
Timing of amortization deduction from intangible assets
|
3,032
|
|
|
2,045
|
|
||
Total deferred tax assets
|
45,800
|
|
|
44,903
|
|
||
Valuation allowance
|
(3,473
|
)
|
|
(3,029
|
)
|
||
Total deferred tax assets, net of allowance
|
42,327
|
|
|
41,874
|
|
||
Deferred tax liabilities derived from:
|
|
|
|
||||
Timing of depreciation and other deductions from building and equipment
|
(7,778
|
)
|
|
(6,827
|
)
|
||
Timing of amortization deduction from goodwill
|
(5,013
|
)
|
|
(5,815
|
)
|
||
Timing of amortization deduction from intangible assets
|
(2,053
|
)
|
|
(2,974
|
)
|
||
Total deferred tax liabilities
|
(14,844
|
)
|
|
(15,616
|
)
|
||
Net deferred tax assets
|
$
|
27,483
|
|
|
$
|
26,258
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Domestic
|
$
|
79,871
|
|
|
$
|
76,062
|
|
|
$
|
79,364
|
|
Foreign
|
21,624
|
|
|
19,948
|
|
|
20,542
|
|
|||
Worldwide pretax earnings
|
$
|
101,495
|
|
|
$
|
96,010
|
|
|
$
|
99,906
|
|
|
June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Beginning Balance
|
$
|
2,148
|
|
|
$
|
1,301
|
|
|
$
|
1,153
|
|
Additions based on tax positions related to the current year
|
174
|
|
|
326
|
|
|
262
|
|
|||
Additions for tax positions of prior years
|
—
|
|
|
658
|
|
|
—
|
|
|||
Reduction for tax positions of prior years
|
(146
|
)
|
|
(137
|
)
|
|
(114
|
)
|
|||
Ending Balance
|
$
|
2,176
|
|
|
$
|
2,148
|
|
|
$
|
1,301
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Lease expense
|
$
|
8,703
|
|
|
$
|
7,394
|
|
|
$
|
6,168
|
|
|
Operating Lease Payments
|
|
Capital Lease Payments
|
|
Total Payments
|
||||||
|
(in thousands)
|
||||||||||
Fiscal Year Ended June 30,
|
|
|
|
|
|
||||||
2018
|
$
|
7,873
|
|
|
$
|
579
|
|
|
$
|
8,452
|
|
2019
|
5,939
|
|
|
579
|
|
|
6,518
|
|
|||
2020
|
4,906
|
|
|
579
|
|
|
5,485
|
|
|||
2021
|
3,952
|
|
|
—
|
|
|
3,952
|
|
|||
2022
|
3,244
|
|
|
—
|
|
|
3,244
|
|
|||
Thereafter
|
13,629
|
|
|
—
|
|
|
13,629
|
|
|||
Total future minimum lease payments
|
39,543
|
|
|
1,737
|
|
|
41,280
|
|
|||
Less: amounts representing interest on capital lease
|
—
|
|
|
50
|
|
|
50
|
|
|||
Total future minimum principal lease payments
|
$
|
39,543
|
|
|
$
|
1,687
|
|
|
$
|
41,230
|
|
|
|
|
|
|
|
|
Capital Lease Obligations
|
||||||||||||||||
|
Property & Equipment
|
|
Accumulated Depreciation
|
|
Net Book Value
|
|
Short-Term
|
|
Long-Term
|
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
IT Infrastructure
|
$
|
1,687
|
|
|
$
|
—
|
|
|
$
|
1,687
|
|
|
$
|
553
|
|
|
$
|
1,134
|
|
|
$
|
1,687
|
|
|
June 30, 2017
|
|
June 30, 2016
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Prepaid expenses and other assets (current)
|
$
|
2,212
|
|
|
$
|
2,346
|
|
Other assets (noncurrent)
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
||||
Other current liabilities
|
$
|
2,212
|
|
|
$
|
2,346
|
|
Other long-term liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
June 30, 2017
|
|
June 30, 2016
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Prepaid expenses and other assets (current)
|
$
|
1,294
|
|
|
$
|
595
|
|
Other assets (noncurrent)
|
$
|
8,235
|
|
|
$
|
9,837
|
|
Liabilities
|
|
|
|
||||
Other current liabilities
|
$
|
1,294
|
|
|
$
|
595
|
|
Other long-term liabilities
|
$
|
8,235
|
|
|
$
|
9,837
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Sales:
|
|
|
|
|
|
||||||
Worldwide Barcode, Networking & Security
|
$
|
2,389,256
|
|
|
$
|
2,361,670
|
|
|
$
|
2,118,739
|
|
Worldwide Communications & Services
|
1,178,930
|
|
|
1,178,556
|
|
|
1,099,887
|
|
|||
|
$
|
3,568,186
|
|
|
$
|
3,540,226
|
|
|
$
|
3,218,626
|
|
Depreciation and amortization:
|
|
|
|
|
|
||||||
Worldwide Barcode, Networking & Security
|
$
|
6,496
|
|
|
$
|
5,651
|
|
|
$
|
3,813
|
|
Worldwide Communications & Services
|
15,099
|
|
|
8,543
|
|
|
6,912
|
|
|||
Corporate
|
3,373
|
|
|
2,960
|
|
|
1,272
|
|
|||
|
$
|
24,968
|
|
|
$
|
17,154
|
|
|
$
|
11,997
|
|
Operating income:
|
|
|
|
|
|
||||||
Worldwide Barcode, Networking & Security
|
$
|
49,727
|
|
|
$
|
52,227
|
|
|
$
|
47,985
|
|
Worldwide Communications & Services
|
39,768
|
|
|
45,513
|
|
|
56,710
|
|
|||
Corporate
(1)
|
(1,256
|
)
|
|
(863
|
)
|
|
(3,254
|
)
|
|||
|
$
|
88,239
|
|
|
$
|
96,877
|
|
|
$
|
101,441
|
|
Capital expenditures:
|
|
|
|
|
|
||||||
Worldwide Barcode, Networking & Security
|
$
|
3,796
|
|
|
$
|
5,298
|
|
|
$
|
733
|
|
Worldwide Communications & Services
|
3,163
|
|
|
3,923
|
|
|
1,448
|
|
|||
Corporate
|
1,890
|
|
|
2,860
|
|
|
18,581
|
|
|||
|
$
|
8,849
|
|
|
$
|
12,081
|
|
|
$
|
20,762
|
|
Sales by Geography Category:
|
|
|
|
|
|
||||||
United States
|
$
|
2,719,413
|
|
|
$
|
2,655,760
|
|
|
$
|
2,391,073
|
|
International
(2)
|
882,446
|
|
|
920,098
|
|
|
871,862
|
|
|||
Less intercompany sales
|
(33,673
|
)
|
|
(35,632
|
)
|
|
(44,309
|
)
|
|||
|
$
|
3,568,186
|
|
|
$
|
3,540,226
|
|
|
$
|
3,218,626
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
June 30, 2016
|
||||
|
(in thousands)
|
||||||
Assets:
|
|
|
|
||||
Worldwide Barcode, Networking & Security
|
$
|
885,786
|
|
|
$
|
836,674
|
|
Worldwide Communications & Services
|
769,342
|
|
|
595,781
|
|
||
Corporate
|
63,175
|
|
|
58,730
|
|
||
|
$
|
1,718,303
|
|
|
$
|
1,491,185
|
|
Property and equipment, net by Geography Category:
|
|
|
|
||||
United States
|
$
|
51,853
|
|
|
$
|
46,935
|
|
International
|
4,713
|
|
|
5,453
|
|
||
|
$
|
56,566
|
|
|
$
|
52,388
|
|
(15)
|
Accumulated Other Comprehensive (Loss) Income
|
|
Fiscal Years Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Currency translation adjustment
|
$
|
(73,217
|
)
|
|
$
|
(72,687
|
)
|
|
$
|
(64,502
|
)
|
Unrealized gain on fair value of interest rate swap
|
13
|
|
|
—
|
|
|
—
|
|
|||
Accumulated other comprehensive loss
|
$
|
(73,204
|
)
|
|
$
|
(72,687
|
)
|
|
$
|
(64,502
|
)
|
|
Fiscal years ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Tax expense (benefit)
|
$
|
(396
|
)
|
|
$
|
327
|
|
|
$
|
2,382
|
|
|
|
|
|
|
|
(16)
|
Subsequent Events
|
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.
|
`1ITEM 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, 2015
|
$
|
26,257
|
|
|
993
|
|
|
(8,288
|
)
|
|
13,627
|
|
|
$
|
32,589
|
|
Trade and current note receivable allowance
|
|
|
|
|
|
|
|
|
$
|
32,589
|
|
|||||
Year ended June 30, 2016
|
$
|
32,589
|
|
|
7,571
|
|
|
(3,829
|
)
|
|
2,701
|
|
|
$
|
39,032
|
|
Trade and current note receivable allowance
|
|
|
|
|
|
|
|
|
$
|
39,032
|
|
|||||
Year ended June 30, 2017
|
$
|
39,032
|
|
|
8,901
|
|
|
(3,860
|
)
|
|
361
|
|
|
$
|
44,434
|
|
Trade and current note receivable allowance
|
|
|
|
|
|
|
|
|
$
|
44,434
|
|
(1)
|
"Reductions" amounts represent write-offs for the years indicated.
|
(2)
|
"Other" amounts include recoveries and the effect of foreign currency fluctuations for years ended
June 30, 2017
,
2016
and
2015
. The amount in 2017 includes
$0.6 million
of recoveries and
$0.3 million
of accounts receivable reserves acquired with the Intelisys acquisition on August 29, 2017. In addition, the amount in 2016 includes
$1.5 million
of recoveries and
$1.2 million
of accounts receivable acquired with KBZ on September 4, 2016. The amount in 2015 includes
$3.9 million
of recoveries,
$1.1 million
of accounts receivable reserves acquired with Imago Group plc on September 19, 2014 and
$12.8 million
of accounts receivable reserves acquired with Network 1 on January 13, 2015.
|
|
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 29, 2017
|
Steven R. Fischer
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL L. BAUR
|
|
Chief Executive Officer and Director
|
|
August 29, 2017
|
Michael L. Baur
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/s/ GERALD LYONS
|
|
Executive Vice President and Chief Financial Officer
|
|
August 29, 2017
|
Gerald Lyons
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
/s/ PETER C. BROWNING
|
|
Director
|
|
August 29, 2017
|
Peter C. Browning
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL J. GRAINGER
|
|
Director
|
|
August 29, 2017
|
Michael J. Grainger
|
|
|
|
|
|
|
|
|
|
/s/ JOHN P. REILLY
|
|
Director
|
|
August 29, 2017
|
John P. Reilly
|
|
|
|
|
|
|
|
|
|
/s/ CHARLES R. WHITCHURCH
|
|
Director
|
|
August 29, 2017
|
Charles R. Whitchurch
|
|
|
|
|
|
|
|
|
|
Exhibit Index
|
|
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Filed
herewith
|
|
Form
|
|
Exhibit
|
|
Filing
Date
|
2.1
|
|
Share Purchase and Sale Agreement for CDC Brasil S.A dated April 7, 2011
|
|
|
|
8-K
|
|
2.1
|
|
4/15/2011
|
2.2
|
|
Letter Agreement between Registrant and Intersmart Comércio Importação
Exportação de Equipamentos Eletrônicos, S.A., dated August 14, 2014
|
|
|
|
8-K
|
|
10.1
|
|
8/15/2014
|
2.3
|
|
Share Purchase and Sale Agreement for Global Data Network LLP dated January 8, 2015
|
|
|
|
10-Q
|
|
2.1
|
|
2/3/2015
|
2.4+
|
|
Asset Purchase Agreement for Intelisys, Inc. dated August 5, 2016
|
|
|
|
10-Q
|
|
10.1
|
|
11/7/2016
|
2.5+
|
|
Share Purchase Agreement for POS Portal, Inc. dated June 28, 2017
|
|
X
|
|
|
|
|
|
|
3.1
|
|
Amended and Restated Articles of Incorporation and Articles of Amendment
|
|
|
|
10-Q
|
|
3.1
|
|
2/3/2005
|
3.2
|
|
Bylaws
|
|
|
|
10-Q
|
|
3.2
|
|
5/7/2014
|
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, and Form of Stock Option Agreement
|
|
|
|
10-K
|
|
10.13
|
|
9/28/1999
|
10.2
|
|
Amended and Restated Directors Equity Compensation Plan, as amended and restated
|
|
|
|
10-Q
|
|
10.4
|
|
11/2/2012
|
10.3
|
|
Form of Restricted Stock Award (for Amended and Restated Directors Equity Compensation Plan as amended and restated)
|
|
|
|
10-Q
|
|
10.3
|
|
5/6/2011
|
10.4
|
|
Nonqualified Deferred Compensation Plan, as amended and restated
|
|
|
|
10-Q
|
|
10.1
|
|
2/3/2015
|
10.5
|
|
Amended and Restated 2002 Long-Term Incentive Plan
|
|
|
|
8-K
|
|
10.1
|
|
12/7/2009
|
10.6
|
|
2013 Long-Term Incentive Plan
|
|
|
|
S-8
|
|
99
|
|
12/5/2013
|
10.7
|
|
Employee Stock Purchase Plan
|
|
|
|
S-8
|
|
99
|
|
12/5/2013
|
10.8
|
|
Founder's Supplemental Executive Retirement Plan Agreement
|
|
|
|
10-Q
|
|
10.2
|
|
5/6/2011
|
10.9
|
|
Executive Severance Plan
|
|
|
|
8-K
|
|
10.3
|
|
6/21/2017
|
10.10
|
|
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
|
10.11
|
|
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
|
|
10.2
|
|
2/4/2011
|
10.12
|
|
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
|
10.13
|
|
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
|
|
10.4
|
|
2/4/2001
|
10.14
|
|
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
|
10.15
|
|
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
|
|
10.5
|
|
2/4/2011
|
10.16
|
|
Form of Restricted Stock Award Certificate (US) under the 2002 Amended and Restated Long-Term Incentive Plan
|
|
|
|
10-Q
|
|
10.1
|
|
2/4/2009
|
10.17
|
|
Form of Restricted Stock Award Certificate (UK) under the 2002 Amended and Restated Long-Term Incentive Plan
|
|
|
|
10-Q
|
|
10.2
|
|
2/4/2009
|
10.18
|
|
Form of Restricted Stock Award Certificate (Europe, not UK) under the 2002 Amended and Restated Long-Term Incentive Plan
|
|
|
|
10-Q
|
|
10.3
|
|
2/4/2009
|
10.19
|
|
Form of Restricted Stock Unit Award Certificate under ScanSource, Inc. 2013 Long-Term Incentive Plan for grants on or after December 5, 2013
|
|
|
|
10-Q
|
|
10.1
|
|
2/6/2014
|
10.20
|
|
Form of Director Stock Unit Award Certificate under ScanSource, Inc. 2013 Long-Term Incentive Plan for grants on or after December 5, 2013
|
|
|
|
10-Q
|
|
10.2
|
|
2/6/2014
|
10.21
|
|
Form of Incentive Stock Option Award Certificate under ScanSource, Inc. 2013 Long-Term Incentive Plan for grants on or after December 5, 2013
|
|
|
|
10-Q
|
|
10.3
|
|
2/6/2014
|
10.22
|
|
Form of Non-Qualified Stock Option Award Certificate under ScanSource, Inc. 2013 Long-Term Incentive Plan for grants on or after December 5, 2013
|
|
|
|
10-Q
|
|
10.4
|
|
2/6/2014
|
10.23
|
|
Form of Other Stock Based Award Certificate under ScanSource, Inc. 2013 Long-Term Incentive Plan
|
|
|
|
10-K
|
|
10.33
|
|
8/28/2014
|
10.24
|
|
Form of Performance and Service - Based Restricted Stock Unit Award Certificate under ScanSource Inc. 2013 Long-Term Incentive Plan
|
|
|
|
10-K
|
|
10.34
|
|
8/28/2014
|
10.25
|
|
Amended and Restated Employment Agreement, effective as of July 1, 2017, of Michael L. Baur
|
|
|
|
8-K
|
|
10.1
|
|
6/21/2017
|
10.26
|
|
Amended and Restated Employment Agreement, dated June 25, 2014, of Gerald Lyons
|
|
|
|
10-K
|
|
10.24
|
|
8/28/2014
|
10.27
|
|
First Amendment to Amended and Restated Employment Agreement, effective June 15, 2017, of Gerald Lyons
|
|
|
|
8-K
|
|
10.2
|
|
6/21/2017
|
10.28
|
|
Employment Letter, dated August 23, 2017, of Gerald Lyons
|
|
|
|
8-K
|
|
10.1
|
|
8/24/2017
|
10.29
|
|
Amended and Restated Employment Agreement, dated June 25, 2014, of John J. Ellsworth
|
|
|
|
10-K
|
|
10.22
|
|
8/24/2014
|
10.30
|
|
Form of Performance and Service-Based Restricted Stock Unit Award Agreement for John J. Ellsworth dated May 14, 2012
|
|
|
|
10-K
|
|
10.31
|
|
8/24/2012
|
10.31
|
|
Other Stock Based Award Agreement for John J. Ellsworth dated August 26, 2014
|
|
|
|
10-K
|
|
10.32
|
|
8/28/2014
|
10.32
|
|
Severance Agreement and General Release by and between ScanSource, Inc. and John Ellsworth dated as of February 24, 2017
|
|
|
|
8-K
|
|
10.1
|
|
3/2/2017
|
|
|
Amended and Restated Employment Agreement, dated June 25, 2014, of Charles A. Mathis
|
|
|
|
10-K
|
|
10.23
|
|
8/28/2014
|
10.33
|
|
Bank Agreements
|
|
|
|
|
|
|
|
|
10.34
|
|
Amended and Restated Credit Agreement
|
|
|
|
10-Q
|
|
10.1
|
|
11/4/2011
|
10.35
|
|
Amendment No. 1 to the Amended and Restated Credit Agreement
|
|
|
|
8-K
|
|
10.1
|
|
11/8/2013
|
10.36
|
|
Amendment No. 2 to the Amended and Restated Credit Agreement
|
|
|
|
8-K
|
|
10.1
|
|
12/14/2015
|
10.37
|
|
Amendment No. 3 to the Amended and Restated Credit Agreement
|
|
|
|
8-K
|
|
10.1
|
|
4/5/2017
|
10.38
|
|
Amendment No. 4 to the Amended and Restated Credit Agreement
|
|
|
|
8-K
|
|
10.1
|
|
8/9/2017
|
|
|
Other Agreements
|
|
|
|
|
|
|
|
|
10.39+
|
|
Industrial Lease Agreement dated April 27, 2007 between Registrant and Industrial Developments International, Inc.
|
|
|
|
10-K
|
|
10.26
|
|
8/29/2007
|
10.40+
|
|
Third Amendment to Industrial Lease Agreement between Registrant and Industrial Developments International, Inc.
|
|
|
|
10-K
|
|
10.54
|
|
8/29/2016
|
10.41+
|
|
US Avaya Distribution Agreement with ScanSource, Inc.
|
|
|
|
10-K
|
|
10.39
|
|
8/26/2010
|
10.42+
|
|
Amendment to Distribution Agreement with Avaya.
|
|
|
|
10-K
|
|
10.37
|
|
8/26/2013
|
10.43+
|
|
Addendum to Distributor Agreement with Avaya.
|
|
|
|
10-K/A
|
|
10.38
|
|
1/31/2014
|
10.44+
|
|
Google Services Amendment to Distributor Agreement with Avaya.
|
|
|
|
10-K
|
|
10.52
|
|
8/29/2016
|
10.45+
|
|
Hosted Service Amendment to Distributor Agreement with Avaya.
|
|
|
|
10-K
|
|
10.53
|
|
8/29/2016
|
10.46+
|
|
Amendment to Distribution Agreement with Avaya.
|
|
|
|
10-Q
|
|
10.1
|
|
5/9/2017
|
10.47+
|
|
Partner Hosted Cloud Services Amendment to Distribution Agreement with Avaya.
|
|
|
|
10-Q
|
|
10.1
|
|
5/9/2017
|
10.48+
|
|
Distribution Agreement with US Motorola (f/k/a Symbol Technologies, Inc.).
|
|
|
|
10-Q/A
|
|
10.1
|
|
10/24/2014
|
10.49+
|
|
Amendment to PartnerEmpower Distribution Agreement with Zebra.
|
|
|
|
10-K
|
|
10.50
|
|
8/29/2016
|
10.50+
|
|
Participation Agreement Relating to Distribution Agreement with Zebra.
|
|
|
|
10-K
|
|
10.51
|
|
8/29/2016
|
10.51+
|
|
Amendment to PartnerConnect EVM Distributor Agreement
|
|
X
|
|
|
|
|
|
|
21.1
|
|
Subsidiaries of the Company
|
|
X
|
|
|
|
|
|
|
23.1
|
|
Consent of Grant Thornton LLP
|
|
X
|
|
|
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer
|
|
X
|
|
|
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer
|
|
X
|
|
|
|
|
|
|
32.1
|
|
Certification of the Chief Executive Officer
|
|
X
|
|
|
|
|
|
|
TABLE OF CONTENTS
|
|
||
|
|
Page
|
|
ARTICLE I
|
DEFINITIONS
|
1
|
|
Section 1.1.
|
Certain Definitions
|
1
|
|
Section 1.2.
|
Certain Other Definitions
|
11
|
|
ARTICLE II
|
PURCHASE AND SALE OF THE SHARES
|
13
|
|
Section 2.1.
|
Purchase and Sale of the Shares
|
13
|
|
Section 2.2.
|
Consideration
|
13
|
|
Section 2.3.
|
Purchase Price Adjustments
|
14
|
|
Section 2.4.
|
Closing
|
16
|
|
Section 2.5.
|
Closing Deliveries
|
17
|
|
Section 2.6.
|
Escrow Arrangements
|
19
|
|
Section 2.7.
|
Required Withholdings
|
19
|
|
Section 2.8.
|
Earn-Out
|
19
|
|
ARTICLE III
|
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY
|
22
|
|
Section 3.1.
|
Organization and Qualification
|
22
|
|
Section 3.2.
|
Capitalization; Ownership of Shares
|
22
|
|
Section 3.3.
|
Authority
|
23
|
|
Section 3.4.
|
Consents and Approvals; No Violations
|
24
|
|
Section 3.5.
|
Financial Statements
|
24
|
|
Section 3.6.
|
Customers and Suppliers
|
25
|
|
Section 3.7.
|
Absence of Certain Changes or Events
|
25
|
|
Section 3.8.
|
No Undisclosed Liabilities
|
25
|
|
Section 3.9.
|
Litigation
|
26
|
|
Section 3.10.
|
Real Property; Personal Property
|
26
|
|
Section 3.11.
|
Taxes
|
27
|
|
Section 3.12.
|
Compliance with Laws; Permits
|
29
|
|
Section 3.13.
|
Labor Matters
|
29
|
|
Section 3.14.
|
Employee Benefits
|
30
|
|
Section 3.15.
|
Material Contracts
|
32
|
|
Section 3.16.
|
Intellectual Property
|
34
|
|
Section 3.17.
|
Environmental Matters
|
38
|
|
Section 3.18.
|
Insurance
|
39
|
|
Section 3.19.
|
Accounts Receivable; Accounts Payable; Inventory
|
39
|
|
Section 3.20.
|
Bank Accounts; Letters of Credit; Performance Bonds
|
40
|
|
Section 3.21.
|
Affiliate Transactions
|
40
|
|
Section 3.22.
|
Broker’s Fees
|
40
|
|
Section 3.23.
|
Unlawful Payments
|
41
|
|
ARTICLE IV
|
REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLERS AND PURCHASER
|
41
|
|
Section 4.1.
|
Representations and Warranties of Sellers
|
41
|
|
Section 4.2.
|
Representations and Warranties of Purchaser
|
42
|
|
ARTICLE V
|
PRE-CLOSING COVENANTS
|
44
|
|
Section 5.1.
|
Conduct of Business
|
44
|
|
Section 5.2.
|
Reasonable Efforts; Notices and Consents; Regulatory Filings
|
46
|
|
Section 5.3.
|
Access to Information
|
48
|
|
Section 5.4.
|
Notice of Certain Events
|
49
|
|
Section 5.5.
|
Exclusive Dealing
|
49
|
|
Section 5.6.
|
Termination of Affiliate Agreements
|
50
|
|
Section 5.7.
|
Option Exercise
|
50
|
|
Section 5.8.
|
280G Analysis
|
50
|
|
ARTICLE VI
|
POST-CLOSING COVENANTS
|
50
|
|
Section 6.1.
|
Further Assurances
|
50
|
|
Section 6.2.
|
Post-Closing Confidentiality
|
50
|
|
Section 6.3.
|
Non-Competition; Non-Solicitation; Non-Disparagement
|
51
|
|
Section 6.4.
|
General Release
|
52
|
|
Section 6.5.
|
Use of Names
|
54
|
|
ARTICLE VII
|
TAX MATTERS
|
54
|
|
Section 7.1.
|
Transfer Taxes
|
54
|
|
Section 7.2.
|
Cooperation on Tax Matters
|
54
|
|
Section 7.3.
|
Tax Contests
|
55
|
|
Section 7.4.
|
Tax Sharing Agreements
|
55
|
|
Section 7.5.
|
Allocations of Taxes in Straddle Period
|
55
|
|
Section 7.6.
|
Conflict
|
55
|
|
ARTICLE VIII
|
CONDITIONS TO CLOSING
|
56
|
|
Section 8.1.
|
Conditions to Obligations of Purchaser
|
56
|
|
Section 8.2.
|
Conditions to Obligation of the Sellers
|
57
|
|
ARTICLE IX
|
SURVIVAL AND INDEMNIFICATION
|
58
|
|
Section 9.1.
|
Survival of Representations and Covenants
|
58
|
|
Section 9.2.
|
Indemnification by the Sellers
|
58
|
|
Section 9.3.
|
Limitations
|
60
|
|
Section 9.4.
|
No Contribution
|
61
|
|
Section 9.5.
|
Defense of Third Party Claims
|
61
|
|
Section 9.6.
|
Indemnification Claim Procedure
|
62
|
|
Section 9.7.
|
Setoff
|
64
|
|
Section 9.8.
|
Exercise of Remedies Other Than by Purchaser
|
64
|
|
Section 9.9.
|
Source of Payment
|
64
|
|
Section 9.10.
|
Indemnity Escrow Release
|
65
|
|
Section 9.11.
|
Exclusive Remedy
|
65
|
|
ARTICLE X
|
TERMINATION
|
65
|
|
Section 10.1.
|
Termination
|
65
|
|
Section 10.2.
|
Effect of Termination
|
66
|
|
ARTICLE XI
|
MISELLANEOUS
|
67
|
|
Section 11.1.
|
Publicity
|
67
|
|
Section 11.2.
|
Amendment and Modification
|
67
|
|
Section 11.3.
|
Extension; Waiver
|
67
|
|
Section 11.4.
|
Notices
|
68
|
|
Section 11.5.
|
Counterparts
|
69
|
|
Section 11.6.
|
Entire Agreement; Third Party Beneficiaries
|
69
|
|
Section 11.7.
|
Severability
|
69
|
|
Section 11.8.
|
Governing Law
|
69
|
|
Section 11.9.
|
Assignment
|
70
|
|
Section 11.10.
|
Expenses
|
70
|
|
Section 11.11.
|
Submission to Jurisdiction; Waiver of Jury Trial
|
70
|
|
Section 11.12.
|
Construction of Agreement
|
71
|
|
Section 11.13.
|
Sellers’ Representative
|
72
|
|
Exhibit A
:
|
Form of Employment Agreement
|
|
|
Exhibit B
:
|
Form of Resignation Letter
|
|
|
Exhibit C
:
|
Form of FIRPTA
|
|
|
Exhibit D
:
|
Form of Spousal Consent
|
|
|
Exhibit E
:
|
Form of Escrow Agreement
|
|
PURCHASER:
|
|
SCANSOURCE PAYMENTS, INC.
|
|
By:
|
/s/ Gerald Lyons
|
|
Name: Gerald Lyons
|
|
Title: VP, ScanSource Payments, Inc.
|
COMPANY:
|
POS PORTAL, INC.
|
/s/ Kent B. Stryker
|
Name: Kent B. Styker
|
Title: Chief Executive Officer
|
SELLERS’ REPRESENTATIVE:
|
/s/ Kent B. Stryker
|
Kent B. Stryker
|
(A)
|
The Parties entered on February 12, 2014 into an agreement that was renamed, as of April 11, 2016, to: PartnerConnect™ EVM Distribution Agreement, (as amended) (“Distribution Agreement”), which relates to Zebra Enterprise Visibility and Mobility (“EVM”) products and services, and which, as acknowledged by the Parties by entering into this Amendment, is in full force and effect and valid as when this Amendment is executed;
|
(B)
|
With the integration of Zebra’s existing channel programs into the Zebra PartnerConnect Program, Zebra has aligned certain core systems, tools and processes, and in order to provide a simplified, unified experience to Distributor, certain terms included in the Distribution Agreement must be amended as of May 1, 2017 or at a later date to be solely determined and communicated to Distributor by Zebra (the
“Effective Date”
);
|
(C)
|
Zebra’s Asset Identification and Tracking (“AIT”) products and services, shall continue not to be within the scope of the Distribution Agreement and shall not be within the scope of this Amendment.
|
1.
|
Unless otherwise noted herein, all terms not herein defined shall have the meanings ascribed thereto in the Distribution Agreement. Except as expressly set forth herein, the terms and conditions of the Distribution Agreement shall remain in full force and effect provided, however, that in the event of any conflict between the provisions set forth in this Amendment and those in the Distribution Agreement, the provisions in this Amendment shall prevail.
|
2.
|
Effective on the Effective Date, Symbol assigns all of its rights and obligations under the Distribution Agreement to ZTI, an Affiliate thereof and ScanSource Brazil assigns all of its rights and obligations under the Distribution Agreement to ScanSource Brasil Distribuidora De Technologias Ltda.
|
3.
|
By executing this Amendment and effective as of the Effective Date: (i) Symbol agrees to assign all of its rights and obligations under the Distribution Agreement to ZTI; (ii) ZTI agrees to become a Party to the Distribution Agreement and to this Amendment and to be bound by the obligations of Symbol thereunder; and (iii) Distributor expresses its consent to the assignment by Symbol of all of its rights and obligations under the Distribution Agreement to ZTI. Likewise, by executing this Amendment and effective as of the Effective Date: (i) ScanSource Brazil agrees to assign all of its rights and obligations under the Distribution Agreement to ScanSource Brasil Distribuidora De Technologias Ltda; (ii) ScanSource Brasil Distribuidora De Technologias Ltda agrees to become a Party to the Distribution Agreement and to this Amendment and to be bound by the obligations of ScanSource Brazil thereunder; and (iii) Symbol and ZTI express their consent to the assignment by ScanSource Brazil of all of its rights and obligations under the Distribution Agreement to ScanSource Brasil Distribuidora De Technologias Ltda.
|
4.
|
Transactions with Government.
Notwithstanding anything to the contrary contained in the Distribution Agreement, all transactions with any government, governmental or regulatory entity or body, department, commission, board, agency or instrumentality of the United States of America and of any state, local or regional division thereof (hereinafter a “US Governmental Authority”) or any transaction in which a US Governmental Authority is the End User or is directly or indirectly providing funds for the transaction, whether through a prime contract or a subcontract thereunder or a grant or other transaction, shall be subject to the additional terms and conditions contained in the Transaction with Government, Sales to Government Attachment, posted at
www.zebra.com/partnerconnect-tc
or any equivalent website thereof
.
|
5.
|
In Schedule 2 (Terms and Conditions of Sale) Under Section 1.0 (Price and Discount), Section 1.3 will be deleted in its entirety and replaced with the following:
|
6.
|
In Schedule 2 (Terms and Conditions of Sale) under Section 4.0 (Shipping and Risk of Loss) Section 4.1 will be deleted in its entirety and replaced with the following:
|
7.
|
In Schedule 2 (Terms and Conditions of Sale) Section 3.3 will be deleted in its entirety and replaced with the following:
|
9.
|
This Amendment and any amendments of addenda thereto may be executed in two or more of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. A facsimile copy or computer image, such as a PDF or tiff image, of a signature shall be treated as and shall have the same effect as an original signature. In addition, a true and correct facsimile copy or computer image of this Amendment and any amendments or addenda thereto shall be treated as and shall have the same effect as an original signed copy of this document.
|
SYMBOL TECHNOLOGIES, LLC.
|
SCANSOURCE, INC.
|
ZEBRA TECHNOLOGIES INTERNATIONAL, LLC
|
SCANSOURCE LATIN AMERICA, INC.
|
DE TECHNOLOGIAS LTDA.
|
ESPECIAIS LTDA.
|
Name of Subsidiary
|
|
State/Country
of Incorporation
|
4100 Quest, LLC
|
|
South Carolina
|
Scan
Source
Properties, LLC
|
|
South Carolina
|
Logue Court Properties, LLC
|
|
South Carolina
|
8650 Commerce Drive, LLC
|
|
Mississippi
|
Partner Services, Inc.
|
|
South Carolina
|
Scan
Source
Security Distribution, Inc.
|
|
South Carolina
|
Scan
Source
Communications, Inc.
|
|
South Carolina
|
ScanSourceGov, Inc.
|
|
South Carolina
|
Scan
Source
Canada, Inc.
|
|
Canada
|
Intelisys, Inc.
|
|
South Carolina
|
Scan
Source
Payments, Inc.
|
|
South Carolina
|
Scan
Source
de Mexico S, de R.L. de C.V.
|
|
Mexico
|
Outsourcing Unlimited, Inc.
|
|
Georgia
|
Scan
Source
Latin America, Inc.
|
|
Florida
|
Scan
Source
France SARL
|
|
France
|
Scan
Source
Europe Limited
|
|
United Kingdom
|
Scan
Source
UK Limited
|
|
United Kingdom
|
Scan
Source
Limited
|
|
United Kingdom
|
Scan
Source
Europe SPRL
|
|
Belgium
1
|
Scan
Source
Germany GmbH
|
|
Germany
|
Scan
Source
Communications Limited
|
|
United Kingdom
|
Scan
Source
Europe CV
|
|
Amsterdam/NL
|
Scan
Source
Europe BV
|
|
Amsterdam/NL
|
Scan
Source
Communications GmbH
|
|
Germany
|
Scan
Source
Brasil Distribuidora de Tecnologias Ltda.
|
|
Brazil
|
Scan
Source
Video Communications Limited
|
|
United Kingdom
|
Scan
Source
Video Communications Europe Limited
|
|
United Kingdom
|
Video Corporation Limited
|
|
United Kingdom
|
Scan
Source
Video Communications SARL
|
|
France
|
Video Corporation SARL
|
|
France
|
Scan
Source
Video Communications GmbH
|
|
Germany
|
Network 1 International Colombia S.A.S
|
|
Colombia
|
Importadora y Comercializadora Network 1 International (Chile) Limitada
|
|
Chile
|
Network 1 International Peru SAC
|
|
Peru
|
Intersmart S. de R.L. de C.V.
|
|
Mexico
|
Intersmart Technologies LLC
|
|
Florida
|
1
|
|
Scan
Source
Europe SPRL has branch offices that operate under the names Scan
Source
Italia, Scan
Source
Netherlands and Scan
Source
Poland.
|
|
/s/ Grant Thornton LLP
|
1.
|
I have reviewed this annual 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 annual 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)
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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
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(b)
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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.
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/s/ Gerald Lyons
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Gerald Lyons, Executive Vice President and Chief Financial Officer (Principal Financial Officer)
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1)
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The Report fully complies with the requirements of §13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); and
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2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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August 29, 2017
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/s/ Michael L. Baur
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Michael L. Baur,
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Chief Executive Officer
(Principal Executive Officer)
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1)
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The Report fully complies with the requirements of §13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); and
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2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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August 29, 2017
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/s/ Gerald Lyons
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Gerald Lyons,
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Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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