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 24, 2018
|
Common Stock, no par value per share
|
|
25,593,917 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.
|
||
Item 16.
|
Form 10-K Summary
|
|
|
•
|
Understand end-user needs
|
•
|
Provide more complete technology solutions
|
•
|
Offer market and technology solution expertise
|
•
|
Offer training, education and marketing services
|
•
|
Provide custom configuration, platforms and digital tools
|
•
|
Deliver technical support
|
•
|
Enable opportunities in emerging technologies
|
•
|
Reduce working capital requirements
|
•
|
Offer flexible financing solutions
|
•
|
Help provide navigation and understanding of supplier programs
|
•
|
Provide access to emerging, diverse and established customer channels
|
•
|
Create scale and efficiency
|
•
|
Serve small- and medium-sized businesses more efficiently
|
•
|
Deliver more complete technology solutions
|
•
|
Provide market insights
|
•
|
Offer expertise and technical support
|
•
|
Manage channel credit
|
•
|
Create demand
|
•
|
Worldwide Barcode, Networking & Security (“WW Barcode, Networking & Security”); and
|
•
|
Worldwide Communications & Services (“WW Communications & Services”).
|
•
|
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' notice 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 rest of our business and has a two year term; and one agreement covers distribution of products in
|
•
|
We have two non-exclusive agreements with Zebra. One agreement covers sales of Zebra products in North and South America, and the other agreement covers sales of Zebra 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.
|
•
|
Non-exclusive distribution rights to resell products and related services in geographical areas (vendor agreements often include territorial restrictions that limit the countries in which we can sell their products and services).
|
•
|
Short-term periods, subject to periodic renewal, and provide for termination by either party without cause upon 30 to 120 days' notice.
|
•
|
Stock rotation rights, which give us the ability, subject to limitations, to return for credit or exchange a portion of the items purchased.
|
•
|
Price protection provisions, which enables us to take a credit for declines in inventory value resulting from the vendor's price reductions.
|
•
|
POS
: We provide POS solutions for retail, grocery and hospitality environments to efficiently manage in-store sales and operations. POS solutions include computer-based terminals, tablets, monitors, payment processing solutions, receipt printers, pole displays, cash drawers, keyboards, peripheral equipment and fully integrated processing units. These solutions may include self-service checkout, kiosks and products that attach to the POS network in the store, including network access points, routers and digital signage.
|
•
|
Payments
: We offer payment terminals, comprehensive key injection services, reseller partner branding, extensive key libraries, ability to provide point-to-point encryption (“P2PE”), and redundant key injection facilities. We have the resources to deliver secure payment devices that are preconfigured and ready for use. In addition, we partner with ISVs to deliver to merchants integrated tablet POS solution hardware that a merchant may purchase outright or “as a service,” and which includes merchant hardware support and next-day replacement of tablets, terminals and peripherals.
|
•
|
Barcode
: We offer automatic identification and data capture (“AIDC”) technology that incorporates the capabilities for electronic identification and data processing without the need for manual input. These solutions 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.
|
•
|
Physical Security
: We provide electronic physical security solutions that 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 solutions require specialized knowledge to deploy effectively, and we offer in-depth training and education to our customers to enable them to maintain the appropriate skill levels.
|
•
|
Unified Communications and Collaboration
: We provide unified communications and collaboration capabilities, such as voice, video, audio conferencing, web conferencing and messaging. These offerings combine voice, data, fax and speech technologies with computers, telecommunications and the internet to deliver communications solutions on-premise, from the cloud and as a hybrid. Software and hardware products include IP-based telephony platforms, Voice over Internet Protocol ("VoIP") systems, private branch exchanges (“PBXs”), call center applications, video conferencing, desk phones and other endpoints. Cloud-delivered services, such as unified communications, contact center and video conferencing, enable end-user customers to consume and pay for communications services typically on a monthly subscription basis.
|
•
|
Cloud and Telecom Services
: We offer business communications services, including voice, data, access, cable collaboration, wireless and cloud. We focus on empowering and educating customers so they can advise end-users in making informed choices about services, technology and cost savings. We have contracts with more than 150 of the world’s leading telecom carriers and cloud services providers.
|
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;
|
•
|
Changes in international trade laws, trade agreements, or trading relationships affecting our import and export activities, including export license requirements, restrictions on the export of certain technology and tariff changes, or the imposition of new or increased trade sanctions;
|
•
|
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 or practices that impact our ability and costs to hire, retain and discharge employees;
|
•
|
Difficulties in staffing and managing operations in foreign countries;
|
•
|
Changes in the interpretation and enforcement of laws (in particular related to items such as duty and taxation), and laws related to data privacy such as GDPR and other similar privacy laws that impact our IT systems and processes;
|
•
|
Global economic and financial market instability related to the U.K.’s referendum withdrawal from the E.U., as well as instability from the possibility of withdrawal of other E.U. member states:
|
•
|
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, U.K. Bribery 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, suppliers or service providers.
|
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
|
Sacramento, CA
|
41,000
|
Leased
|
Sales and Administration Offices and Warehouse
|
Louisville, KY
|
22,000
|
Leased
|
Warehouse
|
Petaluma, CA
|
17,000
|
Leased
|
Sales and Administration Offices
|
|
|
|
|
International
|
|
|
|
Mexico City, Mexico
|
25,000
|
Leased
|
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
|
31,000
|
Leased
|
Sales Office and Warehouse
|
Itajai, Santa Catarina, Brazil
|
164,000
|
Leased
|
Sales Office and Warehouse
|
ITEM 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
|
High
|
|
Low
|
||||
Fiscal Year 2018
|
|
|
|
||||
First quarter
|
$
|
44.35
|
|
|
$
|
36.20
|
|
Second quarter
|
45.35
|
|
|
33.55
|
|
||
Third quarter
|
36.90
|
|
|
31.40
|
|
||
Fourth quarter
|
41.95
|
|
|
33.30
|
|
||
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
|
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||||||
ScanSource, Inc.
|
$
|
100
|
|
|
$
|
119
|
|
|
$
|
119
|
|
|
$
|
116
|
|
|
$
|
126
|
|
|
$
|
126
|
|
NASDAQ Composite
|
$
|
100
|
|
|
$
|
132
|
|
|
$
|
151
|
|
|
$
|
149
|
|
|
$
|
190
|
|
|
$
|
233
|
|
SIC Code 5045 – Computers & Peripheral Equipment
|
$
|
100
|
|
|
$
|
138
|
|
|
$
|
132
|
|
|
$
|
159
|
|
|
$
|
212
|
|
|
$
|
185
|
|
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
|
||||||
April 1, 2018 through April 30, 2018
|
—
|
|
$
|
—
|
|
—
|
|
$
|
99,664,707
|
|
May 1, 2018 through May 31, 2018
|
232
|
|
$
|
34.30
|
|
—
|
|
$
|
99,664,707
|
|
June 1, 2018 through June 30, 2018
|
159
|
|
$
|
40.90
|
|
—
|
|
99,664,707
|
|
|
Total
|
391
|
|
$
|
36.98
|
|
—
|
|
$
|
99,664,707
|
|
|
Fiscal Year Ended June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Statement of income data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
3,846,260
|
|
|
$
|
3,568,186
|
|
|
$
|
3,540,226
|
|
|
$
|
3,218,626
|
|
|
$
|
2,913,634
|
|
Cost of goods sold
|
3,410,135
|
|
|
3,184,590
|
|
|
3,184,786
|
|
|
2,891,536
|
|
|
2,612,535
|
|
|||||
Gross profit
|
436,125
|
|
|
383,596
|
|
|
355,440
|
|
|
327,090
|
|
|
301,099
|
|
|||||
Selling, general and administrative expenses
|
297,475
|
|
|
265,178
|
|
|
240,115
|
|
|
210,985
|
|
|
185,116
|
|
|||||
Depreciation expense
|
13,311
|
|
|
9,444
|
|
|
7,326
|
|
|
5,356
|
|
|
3,496
|
|
|||||
Intangible amortization expense
|
20,657
|
|
|
15,524
|
|
|
9,828
|
|
|
6,641
|
|
|
3,880
|
|
|||||
Impairment charges (legal recovery)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,490
|
)
|
|||||
Change in fair value of contingent consideration
|
37,043
|
|
|
5,211
|
|
|
1,294
|
|
|
2,667
|
|
|
2,311
|
|
|||||
Operating income
|
67,639
|
|
|
88,239
|
|
|
96,877
|
|
|
101,441
|
|
|
121,786
|
|
|||||
Interest expense
|
9,149
|
|
|
3,215
|
|
|
2,124
|
|
|
1,797
|
|
|
731
|
|
|||||
Interest income
|
(3,713
|
)
|
|
(5,329
|
)
|
|
(3,448
|
)
|
|
(2,638
|
)
|
|
(2,364
|
)
|
|||||
Other (income) expense, net
|
1,278
|
|
|
(11,142
|
)
|
|
2,191
|
|
|
2,376
|
|
|
312
|
|
|||||
Income before income taxes
|
60,925
|
|
|
101,495
|
|
|
96,010
|
|
|
99,906
|
|
|
123,107
|
|
|||||
Provision for income taxes
|
27,772
|
|
|
32,249
|
|
|
32,391
|
|
|
34,487
|
|
|
41,318
|
|
|||||
Net income
|
$
|
33,153
|
|
|
$
|
69,246
|
|
|
$
|
63,619
|
|
|
$
|
65,419
|
|
|
$
|
81,789
|
|
Net income per common share, basic
|
$
|
1.30
|
|
|
$
|
2.74
|
|
|
$
|
2.40
|
|
|
$
|
2.29
|
|
|
$
|
2.89
|
|
Weighted-average shares outstanding, basic
|
25,522
|
|
|
25,318
|
|
|
26,472
|
|
|
28,558
|
|
|
28,337
|
|
|||||
Net income per common share, diluted
|
$
|
1.29
|
|
|
$
|
2.71
|
|
|
$
|
2.38
|
|
|
$
|
2.27
|
|
|
$
|
2.86
|
|
Weighted-average shares outstanding, diluted
|
25,624
|
|
|
25,515
|
|
|
26,687
|
|
|
28,799
|
|
|
28,602
|
|
|
As of June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
$
|
651,851
|
|
|
$
|
624,748
|
|
|
$
|
643,793
|
|
|
$
|
645,398
|
|
|
$
|
715,850
|
|
Total assets
|
1,945,295
|
|
|
1,718,303
|
|
|
1,491,185
|
|
|
1,476,941
|
|
|
1,335,124
|
|
|||||
Total debt (including current debt)
|
249,429
|
|
|
97,300
|
|
|
76,856
|
|
|
8,826
|
|
|
5,429
|
|
|||||
Total shareholders’ equity
|
$
|
866,376
|
|
|
$
|
837,145
|
|
|
$
|
774,496
|
|
|
$
|
808,985
|
|
|
$
|
802,643
|
|
ITEM 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Worldwide Barcode, Networking & Security
|
•
|
Worldwide Communications & Services
|
|
Fiscal Year Ended June 30,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Statement of income data:
|
|
|
|
|
|
|||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
88.7
|
|
|
89.2
|
|
|
90.0
|
|
Gross profit
|
11.3
|
|
|
10.8
|
|
|
10.0
|
|
Selling, general and administrative expenses, net of amortization expense
|
7.7
|
|
|
7.4
|
|
|
6.8
|
|
Depreciation expense
|
0.3
|
|
|
0.3
|
|
|
0.2
|
|
Intangible amortization expense
|
0.5
|
|
|
0.4
|
|
|
0.3
|
|
Change in fair value of contingent consideration
|
1.0
|
|
|
0.1
|
|
|
0.0
|
|
Operating income
|
1.8
|
|
|
2.5
|
|
|
2.7
|
|
Interest expense (income), net
|
0.1
|
|
|
(0.1
|
)
|
|
0.0
|
|
Other expense (income), net
|
0.0
|
|
|
(0.3
|
)
|
|
0.1
|
|
Income before income taxes and minority interest
|
1.6
|
|
|
2.8
|
|
|
2.7
|
|
Provision for income taxes
|
0.7
|
|
|
0.9
|
|
|
0.9
|
|
Net income
|
0.9
|
%
|
|
1.9
|
%
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
238,318
|
|
|
$
|
195,743
|
|
|
$
|
42,575
|
|
|
21.8
|
%
|
|
9.1
|
%
|
|
8.2
|
%
|
Worldwide Communications & Services
|
197,807
|
|
|
187,853
|
|
|
9,954
|
|
|
5.3
|
%
|
|
16.3
|
%
|
|
15.9
|
%
|
|||
Total gross profit
|
$
|
436,125
|
|
|
$
|
383,596
|
|
|
$
|
52,529
|
|
|
13.7
|
%
|
|
11.3
|
%
|
|
10.8
|
%
|
|
|
|
|
|
|
|
|
|
% 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,
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative expenses
|
$
|
297,475
|
|
|
$
|
265,178
|
|
|
$
|
32,297
|
|
|
12.2
|
%
|
|
7.7
|
%
|
|
7.4
|
%
|
Depreciation expense
|
13,311
|
|
|
9,444
|
|
|
3,867
|
|
|
40.9
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|||
Intangible amortization expense
|
20,657
|
|
|
15,524
|
|
|
5,133
|
|
|
33.1
|
%
|
|
0.5
|
%
|
|
0.4
|
%
|
|||
Change in fair value of contingent consideration
|
37,043
|
|
|
5,211
|
|
|
31,832
|
|
|
610.9
|
%
|
|
1.0
|
%
|
|
0.1
|
%
|
|||
Operating expenses
|
368,486
|
|
|
295,357
|
|
|
73,129
|
|
|
24.8
|
%
|
|
9.6
|
%
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
% of Sales
June 30,
|
|||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Selling, general and administrative expense
|
$
|
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,
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
56,911
|
|
|
$
|
49,727
|
|
|
$
|
7,184
|
|
|
14.4
|
%
|
|
2.2
|
%
|
|
2.1
|
%
|
Worldwide Communications & Services
|
10,900
|
|
|
39,768
|
|
|
(28,868
|
)
|
|
(72.6
|
)%
|
|
0.9
|
%
|
|
3.4
|
%
|
|||
Corporate
|
(172
|
)
|
|
(1,256
|
)
|
|
1,084
|
|
|
(86.3
|
)%
|
|
—
|
%
|
|
—
|
%
|
|||
Total operating income
|
$
|
67,639
|
|
|
$
|
88,239
|
|
|
$
|
(20,600
|
)
|
|
(23.3
|
)%
|
|
1.8
|
%
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
% 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,
|
|||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Interest expense
|
$
|
9,149
|
|
|
$
|
3,215
|
|
|
$
|
5,934
|
|
|
184.6
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
Interest income
|
(3,713
|
)
|
|
(5,329
|
)
|
|
1,616
|
|
|
(30.3
|
)%
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
|||
Net foreign exchange losses (gains)
|
2,096
|
|
|
1,919
|
|
|
177
|
|
|
9.2
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|||
Other, net
|
(818
|
)
|
|
(13,061
|
)
|
|
12,243
|
|
|
(93.7
|
)%
|
|
—
|
%
|
|
(0.4
|
)%
|
|||
Total other (income) expense
|
$
|
6,714
|
|
|
$
|
(13,256
|
)
|
|
$
|
19,970
|
|
|
(150.6
|
)%
|
|
0.2
|
%
|
|
(0.4
|
)%
|
|
|
|
|
|
|
|
|
|
% 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 (gains) losses
|
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
|
)%
|
|
—
|
%
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
Fiscal 2018
|
|
Fiscal 2017
|
||||||||||||||||||||||||||||
|
Jun. 30
2018
|
|
Mar. 31
2018
|
|
Dec. 31
2017
|
|
Sept. 30
2017
|
|
Jun. 30
2017
|
|
Mar. 31
2017
|
|
Dec. 31
2016
|
|
Sept. 30
2016
|
||||||||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||||||||||||||
Net sales
|
$
|
993,852
|
|
|
$
|
895,637
|
|
|
$
|
1,032,212
|
|
|
$
|
924,559
|
|
|
$
|
917,291
|
|
|
$
|
813,538
|
|
|
$
|
904,792
|
|
|
$
|
932,566
|
|
Cost of goods sold
|
880,503
|
|
|
791,749
|
|
|
919,241
|
|
|
818,642
|
|
|
816,435
|
|
|
720,867
|
|
|
806,258
|
|
|
841,032
|
|
||||||||
Gross profit
|
$
|
113,349
|
|
|
$
|
103,888
|
|
|
$
|
112,971
|
|
|
$
|
105,917
|
|
|
$
|
100,856
|
|
|
$
|
92,671
|
|
|
$
|
98,534
|
|
|
$
|
91,534
|
|
Change in Fair Value of Contingent Consideration
|
$
|
8,448
|
|
|
$
|
4,801
|
|
|
$
|
6,913
|
|
|
$
|
16,881
|
|
|
$
|
1,290
|
|
|
$
|
1,960
|
|
|
$
|
1,791
|
|
|
$
|
169
|
|
Net income
|
$
|
10,388
|
|
|
$
|
10,649
|
|
|
$
|
7,969
|
|
|
$
|
4,147
|
|
|
$
|
18,970
|
|
|
$
|
12,424
|
|
|
$
|
23,036
|
|
|
$
|
14,816
|
|
Net income per common share, basic
|
$
|
0.41
|
|
|
$
|
0.42
|
|
|
$
|
0.31
|
|
|
$
|
0.16
|
|
|
$
|
0.75
|
|
|
$
|
0.49
|
|
|
$
|
0.92
|
|
|
$
|
0.58
|
|
Weighted-average shares outstanding, basic
|
25,577
|
|
|
25,572
|
|
|
25,506
|
|
|
25,434
|
|
|
25,341
|
|
|
25,262
|
|
|
25,146
|
|
|
25,523
|
|
||||||||
Net income per common share, diluted
|
$
|
0.40
|
|
|
$
|
0.42
|
|
|
$
|
0.31
|
|
|
$
|
0.16
|
|
|
$
|
0.74
|
|
|
$
|
0.49
|
|
|
$
|
0.91
|
|
|
$
|
0.58
|
|
Weighted-average shares outstanding, diluted
|
25,675
|
|
|
25,606
|
|
|
25,648
|
|
|
25,579
|
|
|
25,512
|
|
|
25,400
|
|
|
25,285
|
|
|
25,762
|
|
|
Year ended June 30, 2018
|
|
Year ended June 30, 2017
|
||||||||||||||||||||||||||||
|
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
|
$
|
67,639
|
|
|
$
|
60,925
|
|
|
$
|
33,153
|
|
|
$
|
1.29
|
|
|
$
|
88,239
|
|
|
$
|
101,495
|
|
|
$
|
69,246
|
|
|
$
|
2.71
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Amortization of intangible assets
|
20,657
|
|
|
20,657
|
|
|
14,021
|
|
|
0.55
|
|
|
15,524
|
|
|
15,524
|
|
|
10,247
|
|
|
0.40
|
|
||||||||
Change in fair value of contingent consideration
|
37,043
|
|
|
37,043
|
|
|
24,697
|
|
|
0.96
|
|
|
5,211
|
|
|
5,211
|
|
|
2,921
|
|
|
0.11
|
|
||||||||
Acquisition costs
|
172
|
|
|
172
|
|
|
172
|
|
|
0.01
|
|
|
1,256
|
|
|
1,256
|
|
|
1,256
|
|
|
0.06
|
|
||||||||
Legal settlement, net of attorney fees
|
952
|
|
|
952
|
|
|
771
|
|
|
0.03
|
|
|
—
|
|
|
(12,777
|
)
|
|
(8,047
|
)
|
|
(0.32
|
)
|
||||||||
Tax recovery and related interest income
|
(2,466
|
)
|
|
(3,119
|
)
|
|
(2,058
|
)
|
|
(0.08
|
)
|
|
—
|
|
|
(1,382
|
)
|
|
(5,370
|
)
|
|
(0.21
|
)
|
||||||||
Tax reform changes
|
—
|
|
|
—
|
|
|
9,034
|
|
|
0.35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Non-GAAP measures
|
$
|
123,997
|
|
|
$
|
116,630
|
|
|
$
|
79,790
|
|
|
$
|
3.11
|
|
|
$
|
110,230
|
|
|
$
|
109,327
|
|
|
$
|
70,253
|
|
|
$
|
2.75
|
|
Operating Income by Segment:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Year ended June 30,
|
|
|
|
|
|
% of Net Sales
June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|||||||||
Worldwide Barcode, Networking & Security:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
56,911
|
|
|
$
|
49,727
|
|
|
$
|
7,184
|
|
|
14.4
|
%
|
|
2.2
|
%
|
|
2.1
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
8,703
|
|
|
4,033
|
|
|
4,670
|
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
69
|
|
|
—
|
|
|
69
|
|
|
|
|
|
|
|
||||||
Tax recovery
|
(1,512
|
)
|
|
—
|
|
|
(1,512
|
)
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
64,171
|
|
|
$
|
53,760
|
|
|
$
|
10,411
|
|
|
19.4
|
%
|
|
2.4
|
%
|
|
2.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Worldwide Communications & Services:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
10,900
|
|
|
$
|
39,768
|
|
|
$
|
(28,868
|
)
|
|
(72.6
|
)%
|
|
0.9
|
%
|
|
3.4
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
11,954
|
|
|
11,491
|
|
|
463
|
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
36,974
|
|
|
5,211
|
|
|
31,763
|
|
|
|
|
|
|
|
||||||
Legal settlement
|
952
|
|
|
—
|
|
|
952
|
|
|
|
|
|
|
|
||||||
Tax recovery
|
(954
|
)
|
|
—
|
|
|
(954
|
)
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
59,826
|
|
|
$
|
56,470
|
|
|
$
|
3,356
|
|
|
5.9
|
%
|
|
4.9
|
%
|
|
4.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
(172
|
)
|
|
$
|
(1,256
|
)
|
|
$
|
1,084
|
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Acquisition costs
|
172
|
|
|
1,256
|
|
|
(1,084
|
)
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
67,639
|
|
|
$
|
88,239
|
|
|
$
|
(20,600
|
)
|
|
(23.3
|
)%
|
|
2.5
|
%
|
|
2.7
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
20,657
|
|
|
15,524
|
|
|
5,133
|
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
37,043
|
|
|
5,211
|
|
|
31,832
|
|
|
|
|
|
|
|
||||||
Acquisition costs
|
172
|
|
|
1,256
|
|
|
(1,084
|
)
|
|
|
|
|
|
|
||||||
Legal settlement
|
952
|
|
|
—
|
|
|
952
|
|
|
|
|
|
|
|
||||||
Tax recovery
|
(2,466
|
)
|
|
—
|
|
|
(2,466
|
)
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
123,997
|
|
|
$
|
110,230
|
|
|
$
|
13,767
|
|
|
12.5
|
%
|
|
3.1
|
%
|
|
2.7
|
%
|
|
2018
|
|
2017
|
|
2016
|
|||
Return on invested capital ratio
|
12.5
|
%
|
|
13.1
|
%
|
|
13.3
|
%
|
Reconciliation of EBITDA to Net Income
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Net income (GAAP)
|
$
|
33,153
|
|
|
$
|
69,246
|
|
|
$
|
63,619
|
|
Plus: income taxes
|
27,772
|
|
|
32,249
|
|
|
32,391
|
|
|||
Plus: interest expense
|
9,149
|
|
|
3,215
|
|
|
2,124
|
|
|||
Plus: depreciation & amortization
|
37,495
|
|
|
24,968
|
|
|
17,154
|
|
|||
EBITDA
|
107,569
|
|
|
129,678
|
|
|
115,288
|
|
|||
Change in fair value of contingent consideration
|
37,043
|
|
|
5,211
|
|
|
1,294
|
|
|||
Acquisition costs
(a)
|
172
|
|
|
1,256
|
|
|
863
|
|
|||
Legal settlement (recovery), net of attorney fees
|
952
|
|
|
(12,777
|
)
|
|
—
|
|
|||
Tax recovery and related interest income
|
(3,119
|
)
|
|
(1,382
|
)
|
|
—
|
|
|||
Adjusted EBITDA (numerator for ROIC) (non-GAAP)
|
$
|
142,617
|
|
|
$
|
121,986
|
|
|
$
|
117,445
|
|
Invested capital calculations
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Equity – beginning of the year
|
$
|
837,145
|
|
|
$
|
774,496
|
|
|
$
|
808,985
|
|
Equity – end of the year
|
866,376
|
|
|
837,145
|
|
|
774,496
|
|
|||
Change in fair value of contingent consideration, net of tax
|
24,697
|
|
|
2,921
|
|
|
977
|
|
|||
Acquisition costs
(a)
|
172
|
|
|
1,256
|
|
|
863
|
|
|||
Legal settlement (recovery), net of attorney fees, net of tax
|
771
|
|
|
(8,047
|
)
|
|
—
|
|
|||
Tax recovery and related interest income, net of tax
|
(2,058
|
)
|
|
(5,370
|
)
|
|
—
|
|
|||
Tax reform changes
|
9,034
|
|
|
—
|
|
|
—
|
|
|||
Average equity, adjusted
|
868,069
|
|
|
801,201
|
|
|
792,661
|
|
|||
Average funded debt
(b)
|
276,233
|
|
|
131,445
|
|
|
93,500
|
|
|||
Invested capital (denominator)
|
$
|
1,144,302
|
|
|
$
|
932,646
|
|
|
$
|
886,161
|
|
|
|
|
|
|
|
•
|
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, 2018
|
|
June 30, 2017
|
|
June 30, 2016
|
||||||
|
(in thousands)
|
||||||||||
Operating activities
|
$
|
27,871
|
|
|
$
|
94,876
|
|
|
$
|
52,211
|
|
Investing activities
|
(151,927
|
)
|
|
(96,236
|
)
|
|
(73,556
|
)
|
|||
Financing activities
|
97,508
|
|
|
(3,506
|
)
|
|
(36,305
|
)
|
|||
Effect of exchange rate change on cash and cash equivalents
|
(4,016
|
)
|
|
(440
|
)
|
|
(2,596
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
$
|
(30,564
|
)
|
|
$
|
(5,306
|
)
|
|
$
|
(60,246
|
)
|
|
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)
|
$
|
38,078
|
|
|
$
|
8,196
|
|
|
$
|
11,476
|
|
|
$
|
7,589
|
|
|
$
|
10,817
|
|
Capital lease
|
1,350
|
|
|
675
|
|
|
675
|
|
|
—
|
|
|
—
|
|
|||||
Principal debt payments
|
5,429
|
|
|
551
|
|
|
680
|
|
|
698
|
|
|
3,500
|
|
|||||
Revolving credit facility
|
244,000
|
|
|
—
|
|
|
—
|
|
|
244,000
|
|
|
—
|
|
|||||
Contingent consideration
(2)
|
108,233
|
|
|
42,975
|
|
|
65,258
|
|
|
—
|
|
|
—
|
|
|||||
Other
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total obligations
|
$
|
397,090
|
|
|
$
|
52,397
|
|
|
$
|
78,089
|
|
|
$
|
252,287
|
|
|
$
|
14,317
|
|
(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 for Intelisys could range as high as
$115.3 million
as of
June 30, 2018
.
|
(3)
|
Amounts totaling
$23.4 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, 2018
, 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
|
|
/s/ Grant Thornton
|
|
June 30,
2018 |
|
June 30,
2017 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
25,530
|
|
|
$
|
56,094
|
|
Accounts receivable, less allowance of $45,561 at June 30, 2018
and $44,434 at June 30, 2017
|
678,940
|
|
|
637,293
|
|
||
Inventories
|
595,948
|
|
|
531,314
|
|
||
Prepaid expenses and other current assets
|
61,744
|
|
|
56,322
|
|
||
Total current assets
|
1,362,162
|
|
|
1,281,023
|
|
||
Property and equipment, net
|
73,042
|
|
|
56,566
|
|
||
Goodwill
|
298,174
|
|
|
200,881
|
|
||
Identifiable intangible assets, net
|
136,806
|
|
|
101,513
|
|
||
Deferred income taxes
|
22,199
|
|
|
29,491
|
|
||
Other non-current assets
|
52,912
|
|
|
48,829
|
|
||
Total assets
|
$
|
1,945,295
|
|
|
$
|
1,718,303
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
562,564
|
|
|
$
|
513,155
|
|
Accrued expenses and other current liabilities
|
90,873
|
|
|
104,715
|
|
||
Current portion of contingent consideration
|
42,975
|
|
|
30,675
|
|
||
Income taxes payable
|
13,348
|
|
|
7,730
|
|
||
Current portion of long-term debt
|
551
|
|
|
—
|
|
||
Total current liabilities
|
710,311
|
|
|
656,275
|
|
||
Deferred income taxes
|
1,769
|
|
|
2,008
|
|
||
Long-term debt, net of current portion
|
4,878
|
|
|
5,429
|
|
||
Borrowings under revolving credit facility
|
244,000
|
|
|
91,871
|
|
||
Long-term portion of contingent consideration
|
65,258
|
|
|
83,361
|
|
||
Other long-term liabilities
|
52,703
|
|
|
42,214
|
|
||
Total liabilities
|
1,078,919
|
|
|
881,158
|
|
||
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, 25,593,122 and 25,431,845 shares issued and outstanding at June 30, 2018 and June 30, 2017, respectively
|
68,220
|
|
|
61,169
|
|
||
Retained earnings
|
882,333
|
|
|
849,180
|
|
||
Accumulated other comprehensive loss
|
(84,177
|
)
|
|
(73,204
|
)
|
||
Total shareholders’ equity
|
866,376
|
|
|
837,145
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,945,295
|
|
|
$
|
1,718,303
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
3,846,260
|
|
|
$
|
3,568,186
|
|
|
$
|
3,540,226
|
|
Cost of goods sold
|
3,410,135
|
|
|
3,184,590
|
|
|
3,184,786
|
|
|||
Gross profit
|
436,125
|
|
|
383,596
|
|
|
355,440
|
|
|||
Selling, general and administrative expenses
|
297,475
|
|
|
265,178
|
|
|
240,115
|
|
|||
Depreciation expense
|
13,311
|
|
|
9,444
|
|
|
7,326
|
|
|||
Intangible amortization expense
|
20,657
|
|
|
15,524
|
|
|
9,828
|
|
|||
Change in fair value of contingent consideration
|
37,043
|
|
|
5,211
|
|
|
1,294
|
|
|||
Operating income
|
67,639
|
|
|
88,239
|
|
|
96,877
|
|
|||
Interest expense
|
9,149
|
|
|
3,215
|
|
|
2,124
|
|
|||
Interest income
|
(3,713
|
)
|
|
(5,329
|
)
|
|
(3,448
|
)
|
|||
Other (income) expense, net
|
1,278
|
|
|
(11,142
|
)
|
|
2,191
|
|
|||
Income before income taxes
|
60,925
|
|
|
101,495
|
|
|
96,010
|
|
|||
Provision for income taxes
|
27,772
|
|
|
32,249
|
|
|
32,391
|
|
|||
Net income
|
$
|
33,153
|
|
|
$
|
69,246
|
|
|
$
|
63,619
|
|
Per share data:
|
|
|
|
|
|
||||||
Net income per common share, basic
|
$
|
1.30
|
|
|
$
|
2.74
|
|
|
$
|
2.40
|
|
Weighted-average shares outstanding, basic
|
25,522
|
|
|
25,318
|
|
|
26,472
|
|
|||
Net income per common share, diluted
|
$
|
1.29
|
|
|
$
|
2.71
|
|
|
$
|
2.38
|
|
Weighted-average shares outstanding, diluted
|
25,624
|
|
|
25,515
|
|
|
26,687
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
33,153
|
|
|
$
|
69,246
|
|
|
$
|
63,619
|
|
Unrealized gain on hedged transaction, net of tax
|
1,089
|
|
|
13
|
|
|
—
|
|
|||
Foreign currency translation adjustment
|
(12,062
|
)
|
|
(530
|
)
|
|
(8,185
|
)
|
|||
Comprehensive income
|
$
|
22,180
|
|
|
$
|
68,729
|
|
|
$
|
55,434
|
|
|
|
|
|
|
|
||||||
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, 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 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
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
33,153
|
|
|
—
|
|
|
33,153
|
|
||||
Unrealized gain on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
1,089
|
|
|
1,089
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,062
|
)
|
|
(12,062
|
)
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
161,277
|
|
|
636
|
|
|
—
|
|
|
—
|
|
|
636
|
|
||||
Share based compensation
|
—
|
|
|
6,415
|
|
|
—
|
|
|
—
|
|
|
6,415
|
|
||||
Balance at June 30, 2018
|
25,593,122
|
|
|
$
|
68,220
|
|
|
$
|
882,333
|
|
|
$
|
(84,177
|
)
|
|
$
|
866,376
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
33,153
|
|
|
$
|
69,246
|
|
|
$
|
63,619
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
37,495
|
|
|
24,968
|
|
|
17,154
|
|
|||
Amortization of debt issue costs
|
326
|
|
|
290
|
|
|
297
|
|
|||
Provision for doubtful accounts
|
7,075
|
|
|
8,901
|
|
|
7,571
|
|
|||
Share-based compensation
|
6,459
|
|
|
6,602
|
|
|
7,093
|
|
|||
Deferred income taxes
|
(22,286
|
)
|
|
(1,861
|
)
|
|
1,846
|
|
|||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
(89
|
)
|
|
(101
|
)
|
|||
Change in fair value of contingent consideration
|
37,043
|
|
|
5,211
|
|
|
1,294
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(46,766
|
)
|
|
(66,129
|
)
|
|
14,167
|
|
|||
Inventories
|
(59,498
|
)
|
|
28,449
|
|
|
2,999
|
|
|||
Prepaid expenses and other assets
|
(6,366
|
)
|
|
(4,300
|
)
|
|
4,612
|
|
|||
Other noncurrent assets
|
(6,361
|
)
|
|
(9,540
|
)
|
|
(2,186
|
)
|
|||
Accounts payable
|
44,464
|
|
|
19,861
|
|
|
(71,706
|
)
|
|||
Accrued expenses and other liabilities
|
(11,540
|
)
|
|
8,491
|
|
|
6,401
|
|
|||
Income taxes payable
|
14,673
|
|
|
4,776
|
|
|
(849
|
)
|
|||
Net cash provided by operating activities
|
27,871
|
|
|
94,876
|
|
|
52,211
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(8,159
|
)
|
|
(8,849
|
)
|
|
(12,081
|
)
|
|||
Cash paid for business acquisitions, net of cash acquired
|
(143,768
|
)
|
|
(83,804
|
)
|
|
(61,475
|
)
|
|||
Payments for acquisition of intangible assets
|
—
|
|
|
(3,583
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(151,927
|
)
|
|
(96,236
|
)
|
|
(73,556
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Borrowings on revolving credit, net of expenses
|
2,301,443
|
|
|
1,813,062
|
|
|
1,376,620
|
|
|||
Repayments on revolving credit, net of expenses
|
(2,149,659
|
)
|
|
(1,792,620
|
)
|
|
(1,305,193
|
)
|
|||
Repayments on long-term debt
|
—
|
|
|
—
|
|
|
(2,792
|
)
|
|||
Repayments of capital lease obligations
|
(591
|
)
|
|
(246
|
)
|
|
(223
|
)
|
|||
Debt issuance costs
|
(296
|
)
|
|
(876
|
)
|
|
—
|
|
|||
Contingent consideration payments
|
(54,025
|
)
|
|
(10,241
|
)
|
|
(8,606
|
)
|
|||
Exercise of stock options
|
2,273
|
|
|
9,969
|
|
|
5,542
|
|
|||
Taxes paid on settlement of equity awards
|
(1,637
|
)
|
|
(1,761
|
)
|
|
(1,548
|
)
|
|||
Repurchase of common stock
|
—
|
|
|
(20,882
|
)
|
|
(100,206
|
)
|
|||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
89
|
|
|
101
|
|
|||
Net cash provided by (used in) financing activities
|
97,508
|
|
|
(3,506
|
)
|
|
(36,305
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(4,016
|
)
|
|
(440
|
)
|
|
(2,596
|
)
|
|||
Decrease in cash and cash equivalents
|
(30,564
|
)
|
|
(5,306
|
)
|
|
(60,246
|
)
|
|||
Cash and cash equivalents at beginning of period
|
56,094
|
|
|
61,400
|
|
|
121,646
|
|
|||
Cash and cash equivalents at end of period
|
$
|
25,530
|
|
|
$
|
56,094
|
|
|
$
|
61,400
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(continued)
|
||||||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest paid during the year
|
$
|
8,544
|
|
|
$
|
2,831
|
|
|
$
|
1,706
|
|
Income taxes paid during the year
|
$
|
38,330
|
|
|
$
|
31,126
|
|
|
$
|
33,859
|
|
(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 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.
|
•
|
Other cash flow adjustments: The Company utilized a projected cash flow impact pertaining to depreciation, capital expenditures and expected changes in working capital as each of its goodwill reporting units grow.
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands, except per share data)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
33,153
|
|
|
$
|
69,246
|
|
|
$
|
63,619
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
|
||||
Weighted-average shares, basic
|
25,522
|
|
25,318
|
|
|
26,472
|
|
||||
Dilutive effect of share-based payments
|
102
|
|
|
197
|
|
|
215
|
|
|||
Weighted-average shares, diluted
|
25,624
|
|
25,515
|
|
|
26,687
|
|
||||
|
|
|
|
|
|
|
|
||||
Net income per common share, basic
|
$
|
1.30
|
|
|
$
|
2.74
|
|
|
$
|
2.40
|
|
Net income per common share, diluted
|
$
|
1.29
|
|
|
$
|
2.71
|
|
|
$
|
2.38
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Land
|
$
|
3,331
|
|
|
$
|
3,331
|
|
Buildings and leasehold improvements
|
21,384
|
|
|
21,101
|
|
||
Computer software and equipment
|
74,220
|
|
|
53,583
|
|
||
Furniture, fixtures and equipment
|
27,077
|
|
|
26,059
|
|
||
Construction in progress
|
1,584
|
|
|
4,556
|
|
||
Rental equipment
|
13,817
|
|
|
—
|
|
||
|
141,413
|
|
|
108,630
|
|
||
Less accumulated depreciation
|
(68,371
|
)
|
|
(52,064
|
)
|
||
|
$
|
73,042
|
|
|
$
|
56,566
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Deferred warranty revenue
|
$
|
21,065
|
|
|
$
|
24,813
|
|
Accrued compensation
|
22,378
|
|
|
21,713
|
|
||
Other taxes payable
|
18,560
|
|
|
18,440
|
|
||
Accrued marketing expense
|
4,457
|
|
|
5,914
|
|
||
Brazilian pre-acquisition contingencies
|
1,385
|
|
|
3,506
|
|
||
Accrued freight
|
3,849
|
|
|
3,392
|
|
||
Other accrued liabilities
|
19,179
|
|
|
26,937
|
|
||
|
$
|
90,873
|
|
|
$
|
104,715
|
|
|
POS Portal
|
||
|
(in thousands)
|
||
Receivables
|
$
|
8,914
|
|
Inventory
|
8,352
|
|
|
Other current assets
|
917
|
|
|
Property and equipment, net
|
24,963
|
|
|
Goodwill
|
101,198
|
|
|
Identifiable intangible assets
|
57,000
|
|
|
Other non-current assets
|
100
|
|
|
|
$
|
201,444
|
|
|
|
||
Accounts payable
|
$
|
10,897
|
|
Accrued expenses and other current liabilities
|
5,130
|
|
|
Contingent consideration
|
13,098
|
|
|
Other long-term liabilities
|
102
|
|
|
Long-term deferred taxes payable
|
28,449
|
|
|
Consideration transferred, net of cash acquired
|
143,768
|
|
|
|
$
|
201,444
|
|
|
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
|
|
(6)
|
Goodwill and Other Identifiable Intangible Assets
|
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance at June 30, 2016
|
$
|
36,434
|
|
|
$
|
56,281
|
|
|
$
|
92,715
|
|
Additions
|
—
|
|
|
109,005
|
|
|
109,005
|
|
|||
Unrealized loss on foreign currency translation
|
(174
|
)
|
|
(665
|
)
|
|
(839
|
)
|
|||
Balance at June 30, 2017
|
$
|
36,260
|
|
|
$
|
164,621
|
|
|
$
|
200,881
|
|
Additions
|
101,198
|
|
|
—
|
|
|
101,198
|
|
|||
Unrealized loss on foreign currency translation
|
(244
|
)
|
|
(3,661
|
)
|
|
(3,905
|
)
|
|||
Balance at June 30, 2018
|
$
|
137,214
|
|
|
$
|
160,960
|
|
|
$
|
298,174
|
|
|
June 30, 2018
|
|
June 30, 2017
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Book
Value
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Book
Value
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
139,479
|
|
|
$
|
40,337
|
|
|
$
|
99,142
|
|
|
$
|
110,691
|
|
|
$
|
27,977
|
|
|
$
|
82,714
|
|
Trade names
|
27,123
|
|
|
12,224
|
|
|
14,899
|
|
|
23,256
|
|
|
8,691
|
|
|
14,565
|
|
||||||
Non-compete agreements
|
3,064
|
|
|
1,221
|
|
|
1,843
|
|
|
1,160
|
|
|
608
|
|
|
552
|
|
||||||
Distributor agreements
|
363
|
|
|
188
|
|
|
175
|
|
|
355
|
|
|
158
|
|
|
197
|
|
||||||
Supplier partner program
|
3,583
|
|
|
456
|
|
|
3,127
|
|
|
3,583
|
|
|
98
|
|
|
3,485
|
|
||||||
Encryption key library
|
19,900
|
|
|
2,280
|
|
|
17,620
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total intangibles
|
$
|
193,512
|
|
|
$
|
56,706
|
|
|
$
|
136,806
|
|
|
$
|
139,045
|
|
|
$
|
37,532
|
|
|
$
|
101,513
|
|
|
Amortization
Expense
|
||
|
(in thousands)
|
||
Year Ended June 30,
|
|
||
2019
|
$
|
18,920
|
|
2020
|
18,308
|
|
|
2021
|
18,200
|
|
|
2022
|
16,564
|
|
|
2023
|
15,591
|
|
|
Thereafter
|
49,223
|
|
|
Total
|
$
|
136,806
|
|
(7)
|
Short-Term Borrowings and Long-Term Debt
|
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Current portion of long-term debt
|
$
|
551
|
|
|
$
|
—
|
|
Long term debt, net of current portion
|
4,878
|
|
|
5,429
|
|
||
Borrowings under revolving credit facility
|
244,000
|
|
|
91,871
|
|
||
Total debt
|
$
|
249,429
|
|
|
$
|
97,300
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Net foreign exchange derivative contract loss (gain)
|
$
|
386
|
|
|
$
|
146
|
|
|
$
|
(1,951
|
)
|
Net foreign currency transactional and re-measurement loss
|
1,710
|
|
|
1,773
|
|
|
4,522
|
|
|||
Net foreign currency loss
|
$
|
2,096
|
|
|
$
|
1,919
|
|
|
$
|
2,571
|
|
|
Fiscal Year Ended
|
|||||
|
June 30, 2018
|
June 30, 2017
|
||||
|
(in thousands)
|
|||||
Net interest expense recognized as a result of interest rate swap
|
$
|
161
|
|
$
|
7
|
|
Unrealized gain in fair value of interest swap rates
|
1,422
|
|
14
|
|
||
Net increase in accumulated other comprehensive income (loss)
|
$
|
1,583
|
|
$
|
21
|
|
Income tax effect
|
494
|
|
8
|
|
||
Net increase in accumulated other comprehensive income (loss), net of tax
|
$
|
1,089
|
|
$
|
13
|
|
|
June 30, 2018
|
||||||||
|
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
|
|
$
|
—
|
|
|
$
|
157
|
|
Interest rate swap agreement
|
Other current assets
|
|
$
|
1,604
|
|
|
$
|
—
|
|
Derivative liabilities:
|
|
|
|
|
|
||||
Foreign exchange contracts
|
Accrued expenses and other current liabilities
|
|
$
|
—
|
|
|
$
|
156
|
|
|
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 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
|
$
|
23,352
|
|
|
$
|
23,352
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
157
|
|
|
—
|
|
|
157
|
|
|
—
|
|
||||
Interest rate swap agreement
|
1,604
|
|
|
—
|
|
|
1,604
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
25,113
|
|
|
$
|
23,352
|
|
|
$
|
1,761
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
23,352
|
|
|
$
|
23,352
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
156
|
|
|
—
|
|
|
156
|
|
|
—
|
|
||||
Liability for contingent consideration, current and non-current
|
108,233
|
|
|
—
|
|
|
—
|
|
|
108,233
|
|
||||
Total liabilities at fair value
|
$
|
131,741
|
|
|
$
|
23,352
|
|
|
$
|
156
|
|
|
$
|
108,233
|
|
|
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
|
|
|
Contingent Consideration for the Fiscal Year Ended
|
||||||||||
|
June 30, 2018
|
||||||||||
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Fair value at beginning of period
|
$
|
—
|
|
|
$
|
114,036
|
|
|
$
|
114,036
|
|
Issuance of contingent consideration
|
13,098
|
|
|
—
|
|
|
13,098
|
|
|||
Payments
|
(13,167
|
)
|
|
(40,858
|
)
|
|
(54,025
|
)
|
|||
Adjustments to contingent consideration
(1)
|
—
|
|
|
(779
|
)
|
|
(779
|
)
|
|||
Change in fair value
|
69
|
|
|
36,974
|
|
|
37,043
|
|
|||
Fluctuation due to foreign currency exchange
|
—
|
|
|
(1,140
|
)
|
|
(1,140
|
)
|
|||
Fair value at end of period
|
$
|
—
|
|
|
$
|
108,233
|
|
|
$
|
108,233
|
|
|
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
|
|
•
|
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 and Brazilian markets.
|
Reporting Period
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Weighted Average Rates
|
|
June 30, 2018
|
|
Discounted cash flow
|
|
Weighted average cost of capital
|
|
8.6
|
%
|
|
|
|
|
Adjusted EBITDA growth rate
|
|
18.2
|
%
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
Discounted cash flow
|
|
Weighted average cost of capital
|
|
14.2
|
%
|
|
|
|
|
Adjusted EBITDA growth rate
|
|
17.0
|
%
|
|
Contingent Consideration
|
||
|
(in thousands)
|
||
Fiscal year:
|
|
||
2019
|
$
|
42,975
|
|
2020
|
32,239
|
|
|
2021
|
33,019
|
|
|
Total contingent consideration payments
|
$
|
108,233
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Share-based compensation related to:
|
|
|
|
|
|
||||||
Equity classified stock options
|
$
|
1,184
|
|
|
$
|
1,356
|
|
|
$
|
1,479
|
|
Equity classified restricted stock
|
5,275
|
|
|
5,246
|
|
|
5,614
|
|
|||
Total share-based compensation
|
$
|
6,459
|
|
|
$
|
6,602
|
|
|
$
|
7,093
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Expected term
|
5 years
|
|
|
5 years
|
|
|
4.02 years
|
|
|||
Expected volatility
|
30.70
|
%
|
|
30.88
|
%
|
|
28.70
|
%
|
|||
Risk-free interest rate
|
2.17
|
%
|
|
1.84
|
%
|
|
1.47
|
%
|
|||
Dividend yield
|
0.00
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
|||
Weighted-average fair value per option
|
$
|
10.60
|
|
|
$
|
11.26
|
|
|
$
|
9.53
|
|
|
Fiscal Year Ended June 30, 2018
|
|||||||||||
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding, beginning of year
|
872,989
|
|
|
$
|
37.63
|
|
|
|
|
|
||
Granted during the period
|
119,132
|
|
|
34.27
|
|
|
|
|
|
|||
Exercised during the period
|
(62,701
|
)
|
|
35.72
|
|
|
|
|
|
|||
Canceled, forfeited, or expired during the period
|
(32,300
|
)
|
|
37.17
|
|
|
|
|
|
|||
Outstanding, end of year
|
897,120
|
|
|
37.33
|
|
|
5.95
|
|
$
|
3,089,365
|
|
|
Vested and expected to vest at June 30, 2018
|
895,187
|
|
|
37.34
|
|
|
5.94
|
|
$
|
3,078,179
|
|
|
Exercisable, end of year
|
685,554
|
|
|
$
|
37.84
|
|
|
5.07
|
|
$
|
2,113,769
|
|
|
Fiscal Year Ended June 30, 2018
|
|||||||||
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Grant
Date Fair-
Value
|
|||||
Unvested, beginning of year
|
215,970
|
|
|
$
|
38.48
|
|
|
$
|
10.39
|
|
Granted
|
119,132
|
|
|
34.27
|
|
|
10.60
|
|
||
Vested
|
(123,536
|
)
|
|
39.20
|
|
|
10.33
|
|
||
Unvested, end of year
|
211,566
|
|
|
$
|
35.69
|
|
|
$
|
10.54
|
|
|
|
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
|
|
|
0.43
|
|
$
|
18.14
|
|
|
2,800
|
|
|
$
|
18.14
|
|
$22.27 - $26.38
|
|
25,000
|
|
|
1.43
|
|
24.57
|
|
|
25,000
|
|
|
24.57
|
|
||
$26.38 - $30.49
|
|
20,731
|
|
|
4.44
|
|
29.80
|
|
|
20,731
|
|
|
29.80
|
|
||
$30.49 - $34.60
|
|
197,971
|
|
|
7.17
|
|
34.21
|
|
|
82,839
|
|
|
34.27
|
|
||
$34.60 - $38.71
|
|
371,169
|
|
|
5.67
|
|
37.04
|
|
|
274,735
|
|
|
36.87
|
|
||
$38.71 - $42.82
|
|
279,449
|
|
|
6.02
|
|
41.83
|
|
|
279,449
|
|
|
41.83
|
|
||
|
|
897,120
|
|
|
5.95
|
|
$
|
37.33
|
|
|
685,554
|
|
|
$
|
37.84
|
|
|
Fiscal Year Ended June 30, 2018
|
|||||||||
|
Shares
granted
|
|
Date granted
|
|
Grant date
fair value
|
|
Vesting period
|
|||
Employees
|
|
|
|
|
|
|
|
|||
Certain employees based on performance
|
92,469
|
|
|
December 8, 2017
|
|
$
|
34.35
|
|
|
Annually over 3 years
|
Certain employees based on performance
(1)
|
31,296
|
|
|
February 1, 2018
|
|
$
|
34.95
|
|
|
January 1, 2018 through December 31, 2020
|
Non-Employee Directors
(2)
|
|
|
|
|
|
|
|
|||
Certain Directors
|
500
|
|
|
September 11, 2017
|
|
$
|
37.75
|
|
|
6 months
|
Certain Directors
|
14,400
|
|
|
December 8, 2017
|
|
$
|
34.35
|
|
|
6 months
|
|
Fiscal Year Ended June 30, 2018
|
|||||
|
Shares
|
|
Weighted-Average
Grant Date Fair
Value
|
|||
Outstanding, beginning of year
|
267,386
|
|
|
$
|
37.86
|
|
Granted during the period
|
138,665
|
|
|
34.50
|
|
|
Target shares adjustment during the period
(1)
|
(216
|
)
|
|
36.33
|
|
|
Vested during the period
|
(146,046
|
)
|
|
38.16
|
|
|
Cancelled, forfeited, or expired during the period
|
(6,270
|
)
|
|
34.77
|
|
|
Outstanding, end of year
|
253,519
|
|
|
$
|
35.93
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Matching contributions
|
$
|
1,163
|
|
|
$
|
875
|
|
|
$
|
735
|
|
Discretionary contributions
|
4,700
|
|
|
3,413
|
|
|
3,617
|
|
|||
Total contributions
|
$
|
5,863
|
|
|
$
|
4,288
|
|
|
$
|
4,352
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
38,263
|
|
|
$
|
31,149
|
|
|
$
|
21,855
|
|
State
|
3,503
|
|
|
2,615
|
|
|
1,652
|
|
|||
Foreign
|
9,203
|
|
|
269
|
|
|
6,100
|
|
|||
Total current
|
50,969
|
|
|
34,033
|
|
|
29,607
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(9,987
|
)
|
|
(3,832
|
)
|
|
3,990
|
|
|||
State
|
(1,962
|
)
|
|
(397
|
)
|
|
365
|
|
|||
Foreign
|
(11,248
|
)
|
|
2,445
|
|
|
(1,571
|
)
|
|||
Total deferred
|
(23,197
|
)
|
|
(1,784
|
)
|
|
2,784
|
|
|||
Provision for income taxes
|
$
|
27,772
|
|
|
$
|
32,249
|
|
|
$
|
32,391
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
U.S. statutory rate
|
28.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|||
U.S. Federal income tax at statutory rate
|
$
|
17,094
|
|
|
$
|
35,524
|
|
|
$
|
33,603
|
|
Increase (decrease) in income taxes due to:
|
|
|
|
|
|
||||||
State and local income taxes, net of Federal benefit
|
1,883
|
|
|
1,729
|
|
|
1,578
|
|
|||
Tax credits
|
(1,825
|
)
|
|
(1,430
|
)
|
|
(2,517
|
)
|
|||
Valuation allowance
|
1,530
|
|
|
444
|
|
|
541
|
|
|||
Effect of foreign operations, net
|
(1,396
|
)
|
|
(1,477
|
)
|
|
(1,150
|
)
|
|||
Stock compensation
|
1,049
|
|
|
(61
|
)
|
|
(62
|
)
|
|||
Capitalized acquisition costs
|
48
|
|
|
231
|
|
|
70
|
|
|||
Nontaxable income
|
(9
|
)
|
|
(4,437
|
)
|
|
—
|
|
|||
Disallowed interest
|
1,888
|
|
|
2,011
|
|
|
571
|
|
|||
Other
|
(1,438
|
)
|
|
(285
|
)
|
|
(243
|
)
|
|||
U.S. Tax Reform transition tax
|
9,609
|
|
|
—
|
|
|
—
|
|
|||
U.S. Tax Reform impact of rate change on deferred taxes
|
(1,615
|
)
|
|
—
|
|
|
—
|
|
|||
Belgium Tax Reform impact of rate change on deferred taxes
|
1,040
|
|
|
—
|
|
|
—
|
|
|||
Other jurisdictions impact of rate change on deferred taxes
|
(86
|
)
|
|
—
|
|
|
—
|
|
|||
Provision for income taxes
|
$
|
27,772
|
|
|
$
|
32,249
|
|
|
$
|
32,391
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Deferred tax assets derived from:
|
|
|
|
||||
Allowance for accounts receivable
|
$
|
12,874
|
|
|
$
|
11,687
|
|
Inventories
|
4,060
|
|
|
5,235
|
|
||
Nondeductible accrued expenses
|
7,426
|
|
|
3,968
|
|
||
Net operating loss carryforwards
|
5,350
|
|
|
3,141
|
|
||
Tax credits
|
5,795
|
|
|
4,094
|
|
||
Timing of amortization deduction from goodwill
|
5,756
|
|
|
1,285
|
|
||
Deferred compensation
|
5,696
|
|
|
7,934
|
|
||
Stock compensation
|
2,809
|
|
|
5,424
|
|
||
Timing of amortization deduction from intangible assets
|
2,510
|
|
|
3,032
|
|
||
Total deferred tax assets
|
52,276
|
|
|
45,800
|
|
||
Valuation allowance
|
(5,098
|
)
|
|
(3,473
|
)
|
||
Total deferred tax assets, net of allowance
|
47,178
|
|
|
42,327
|
|
||
Deferred tax liabilities derived from:
|
|
|
|
||||
Timing of depreciation and other deductions from building and equipment
|
(7,468
|
)
|
|
(7,778
|
)
|
||
Timing of amortization deduction from goodwill
|
(1,782
|
)
|
|
(5,013
|
)
|
||
Timing of amortization deduction from intangible assets
|
(17,498
|
)
|
|
(2,053
|
)
|
||
Total deferred tax liabilities
|
(26,748
|
)
|
|
(14,844
|
)
|
||
Net deferred tax assets
|
$
|
20,430
|
|
|
$
|
27,483
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Domestic
|
$
|
66,416
|
|
|
$
|
79,871
|
|
|
$
|
76,062
|
|
Foreign
|
(5,491
|
)
|
|
21,624
|
|
|
19,948
|
|
|||
Worldwide pretax earnings
|
$
|
60,925
|
|
|
$
|
101,495
|
|
|
$
|
96,010
|
|
|
June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Beginning Balance
|
$
|
2,176
|
|
|
$
|
2,148
|
|
|
$
|
1,301
|
|
Additions based on tax positions related to the current year
|
157
|
|
|
174
|
|
|
326
|
|
|||
Additions for tax positions of prior years
|
—
|
|
|
—
|
|
|
658
|
|
|||
Reduction for tax positions of prior years
|
(280
|
)
|
|
(146
|
)
|
|
(137
|
)
|
|||
Ending Balance
|
$
|
2,053
|
|
|
$
|
2,176
|
|
|
$
|
2,148
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Lease expense
|
$
|
9,824
|
|
|
$
|
8,703
|
|
|
$
|
7,394
|
|
|
Operating Lease Payments
|
|
Capital Lease Payments
|
|
Total Payments
|
||||||
|
(in thousands)
|
||||||||||
Fiscal Year Ended June 30,
|
|
|
|
|
|
||||||
2019
|
$
|
8,196
|
|
|
$
|
675
|
|
|
$
|
8,871
|
|
2020
|
6,160
|
|
|
675
|
|
|
6,835
|
|
|||
2021
|
5,316
|
|
|
—
|
|
|
5,316
|
|
|||
2022
|
4,185
|
|
|
—
|
|
|
4,185
|
|
|||
2023
|
3,404
|
|
|
—
|
|
|
3,404
|
|
|||
Thereafter
|
10,817
|
|
|
—
|
|
|
10,817
|
|
|||
Total future minimum lease payments
|
38,078
|
|
|
1,350
|
|
|
39,428
|
|
|||
Less: amounts representing interest on capital lease
|
—
|
|
|
30
|
|
|
30
|
|
|||
Total future minimum principal lease payments
|
$
|
38,078
|
|
|
$
|
1,320
|
|
|
$
|
39,398
|
|
|
|
|
|
|
|
|
Capital Lease Obligations
|
||||||||||||||||
|
Property & Equipment
|
|
Accumulated Depreciation
|
|
Net Book Value
|
|
Short-Term
|
|
Long-Term
|
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
IT Infrastructure
|
$
|
1,583
|
|
|
$
|
(259
|
)
|
|
$
|
1,324
|
|
|
$
|
653
|
|
|
$
|
667
|
|
|
$
|
1,320
|
|
|
June 30, 2018
|
|
June 30, 2017
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Prepaid expenses and other assets (current)
|
$
|
—
|
|
|
$
|
2,212
|
|
Other assets (noncurrent)
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
||||
Other current liabilities
|
$
|
—
|
|
|
$
|
2,212
|
|
Other long-term liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
June 30, 2018
|
|
June 30, 2017
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Prepaid expenses and other assets (current)
|
$
|
1,385
|
|
|
$
|
1,294
|
|
Other assets (noncurrent)
|
$
|
5,700
|
|
|
$
|
8,235
|
|
Liabilities
|
|
|
|
||||
Other current liabilities
|
$
|
1,385
|
|
|
$
|
1,294
|
|
Other long-term liabilities
|
$
|
5,700
|
|
|
$
|
8,235
|
|
|
Fiscal Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Sales:
|
|
|
|
|
|
||||||
Worldwide Barcode, Networking & Security
|
$
|
2,628,988
|
|
|
$
|
2,389,256
|
|
|
$
|
2,361,670
|
|
Worldwide Communications & Services
|
1,217,272
|
|
|
1,178,930
|
|
|
1,178,556
|
|
|||
|
$
|
3,846,260
|
|
|
$
|
3,568,186
|
|
|
$
|
3,540,226
|
|
Depreciation and amortization:
|
|
|
|
|
|
||||||
Worldwide Barcode, Networking & Security
|
$
|
18,233
|
|
|
$
|
6,496
|
|
|
$
|
5,651
|
|
Worldwide Communications & Services
|
15,769
|
|
|
15,099
|
|
|
8,543
|
|
|||
Corporate
|
3,493
|
|
|
3,373
|
|
|
2,960
|
|
|||
|
$
|
37,495
|
|
|
$
|
24,968
|
|
|
$
|
17,154
|
|
Operating income:
|
|
|
|
|
|
||||||
Worldwide Barcode, Networking & Security
|
$
|
56,911
|
|
|
$
|
49,727
|
|
|
$
|
52,227
|
|
Worldwide Communications & Services
|
10,900
|
|
|
39,768
|
|
|
45,513
|
|
|||
Corporate
(1)
|
(172
|
)
|
|
(1,256
|
)
|
|
(863
|
)
|
|||
|
$
|
67,639
|
|
|
$
|
88,239
|
|
|
$
|
96,877
|
|
Capital expenditures:
|
|
|
|
|
|
||||||
Worldwide Barcode, Networking & Security
|
$
|
4,841
|
|
|
$
|
3,796
|
|
|
$
|
5,298
|
|
Worldwide Communications & Services
|
1,964
|
|
|
3,163
|
|
|
3,923
|
|
|||
Corporate
|
1,354
|
|
|
1,890
|
|
|
2,860
|
|
|||
|
$
|
8,159
|
|
|
$
|
8,849
|
|
|
$
|
12,081
|
|
Sales by Geography Category:
|
|
|
|
|
|
||||||
United States
|
$
|
2,877,225
|
|
|
$
|
2,719,413
|
|
|
$
|
2,655,760
|
|
International
(2)
|
999,245
|
|
|
882,446
|
|
|
920,098
|
|
|||
Less intercompany sales
|
(30,210
|
)
|
|
(33,673
|
)
|
|
(35,632
|
)
|
|||
|
$
|
3,846,260
|
|
|
$
|
3,568,186
|
|
|
$
|
3,540,226
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
June 30, 2017
|
||||
|
(in thousands)
|
||||||
Assets:
|
|
|
|
||||
Worldwide Barcode, Networking & Security
|
$
|
1,062,143
|
|
|
$
|
885,786
|
|
Worldwide Communications & Services
|
841,490
|
|
|
769,342
|
|
||
Corporate
|
41,662
|
|
|
63,175
|
|
||
|
$
|
1,945,295
|
|
|
$
|
1,718,303
|
|
Property and equipment, net by Geography Category:
|
|
|
|
||||
United States
|
$
|
69,032
|
|
|
$
|
51,853
|
|
International
|
4,010
|
|
|
4,713
|
|
||
|
$
|
73,042
|
|
|
$
|
56,566
|
|
(15)
|
Accumulated Other Comprehensive (Loss) Income
|
|
Fiscal Years Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Currency translation adjustment
|
$
|
(85,279
|
)
|
|
$
|
(73,217
|
)
|
|
$
|
(72,687
|
)
|
Unrealized gain on fair value of interest rate swap, net of tax
|
1,102
|
|
|
13
|
|
|
—
|
|
|||
Accumulated other comprehensive loss
|
$
|
(84,177
|
)
|
|
$
|
(73,204
|
)
|
|
$
|
(72,687
|
)
|
|
Fiscal years ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Tax expense (benefit)
|
$
|
1,993
|
|
|
$
|
(396
|
)
|
|
$
|
327
|
|
|
|
|
|
|
|
(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.
|
ITEM 15.
|
Exhibits and Financial Statement Schedules.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
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, 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
|
|
|||||
Year ended June 30, 2018
|
$
|
44,434
|
|
|
7,075
|
|
|
(5,610
|
)
|
|
(338
|
)
|
|
$
|
45,561
|
|
Trade and current note receivable allowance
|
|
|
|
|
|
|
|
|
$
|
45,561
|
|
(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, 2018
,
2017
and
2016
. The amount in 2018 includes
$0.1 million
in accounts receivable reserves acquired with the POS Portal acquisition on July 31, 2017. 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 reserves acquired with KBZ on September 4, 2016.
|
|
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 28, 2018
|
Steven R. Fischer
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL L. BAUR
|
|
Chief Executive Officer and Director
|
|
August 28, 2018
|
Michael L. Baur
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/s/ GERALD LYONS
|
|
Executive Vice President and Chief Financial Officer
|
|
August 28, 2018
|
Gerald Lyons
|
|
(principal financial officer and principal accounting officer)
|
|
|
|
|
|
|
|
/s/ PETER C. BROWNING
|
|
Director
|
|
August 28, 2018
|
Peter C. Browning
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL J. GRAINGER
|
|
Director
|
|
August 28, 2018
|
Michael J. Grainger
|
|
|
|
|
|
|
|
|
|
/s/ JOHN P. REILLY
|
|
Director
|
|
August 28, 2018
|
John P. Reilly
|
|
|
|
|
|
|
|
|
|
/s/ ELIZABETH O. TEMPLE
|
|
Director
|
|
August 28, 2018
|
Elizabeth O. Temple
|
|
|
|
|
|
|
|
|
|
/s/ CHARLES R. WHITCHURCH
|
|
Director
|
|
August 28, 2018
|
Charles R. Whitchurch
|
|
|
|
|
|
|
|
|
|
Exhibit Index
|
|
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Filed
herewith
|
|
Form
|
|
Exhibit
|
|
Filing
Date
|
2.1
|
|
|
|
|
8-K
|
|
10.1
|
|
8/15/2014
|
|
2.2
|
|
|
|
|
10-Q
|
|
2.1
|
|
2/3/2015
|
|
2.3+
|
|
|
|
|
10-Q
|
|
10.1
|
|
11/7/2016
|
|
2.4+
|
|
|
|
|
10-K
|
|
2.5
|
|
8/29/2017
|
|
3.1
|
|
|
|
|
10-Q
|
|
3.1
|
|
2/3/2005
|
|
3.2
|
|
|
|
|
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
|
|
|
|
|
10-Q
|
|
10.4
|
|
11/2/2012
|
|
10.2
|
|
|
|
|
10-Q
|
|
10.3
|
|
5/6/2011
|
|
10.3
|
|
|
|
|
10-Q
|
|
10.1
|
|
2/3/2015
|
|
10.4
|
|
|
|
|
8-K
|
|
10.1
|
|
12/7/2009
|
|
10.5
|
|
|
|
|
S-8
|
|
99
|
|
12/5/2013
|
|
10.6
|
|
|
|
|
S-8
|
|
99
|
|
12/5/2013
|
|
10.7
|
|
|
|
|
10-Q
|
|
10.2
|
|
5/6/2011
|
|
10.8
|
|
|
|
|
8-K
|
|
10.3
|
|
6/21/2017
|
|
10.9
|
|
|
|
|
8-K
|
|
10.3
|
|
12/7/2009
|
|
10.10
|
|
|
|
|
10-Q
|
|
10.2
|
|
2/4/2011
|
|
10.11
|
|
|
|
|
8-K
|
|
10.4
|
|
12/7/2009
|
|
10.12
|
|
|
|
|
10-Q
|
|
10.3
|
|
2/4/2011
|
10.13
|
|
|
|
|
8-K
|
|
10.2
|
|
12/7/2009
|
|
10.14
|
|
|
|
|
10-Q
|
|
10.5
|
|
2/4/2011
|
|
10.15
|
|
|
|
|
10-Q
|
|
10.1
|
|
2/4/2009
|
|
10.16
|
|
|
|
|
10-Q
|
|
10.2
|
|
2/4/2009
|
|
10.17
|
|
|
|
|
10-Q
|
|
10.3
|
|
2/4/2009
|
|
10.18
|
|
|
|
|
10-Q
|
|
10.1
|
|
2/6/2014
|
|
10.19
|
|
|
|
|
10-Q
|
|
10.2
|
|
2/6/2014
|
|
10.20
|
|
|
|
|
10-Q
|
|
10.3
|
|
2/6/2014
|
|
10.21
|
|
|
|
|
10-Q
|
|
10.4
|
|
2/6/2014
|
|
10.22
|
|
|
|
|
10-K
|
|
10.33
|
|
8/28/2014
|
|
10.23
|
|
|
|
|
10-K
|
|
10.34
|
|
8/28/2014
|
|
10.24
|
|
|
|
|
8-K
|
|
10.1
|
|
12/8/2017
|
|
10.25
|
|
|
|
|
8-K
|
|
10.2
|
|
12/8/2017
|
|
10.26
|
|
|
|
|
8-K
|
|
10.3
|
|
12/8/2017
|
|
10.27
|
|
|
|
|
8-K
|
|
10.4
|
|
12/8/2017
|
|
10.28
|
|
|
|
|
8-K
|
|
10.1
|
|
6/21/2017
|
|
10.29
|
|
|
|
|
10-K
|
|
10.24
|
|
8/28/2014
|
|
10.30
|
|
|
|
|
8-K
|
|
10.2
|
|
6/21/2017
|
|
10.31
|
|
|
|
|
8-K
|
|
10.1
|
|
8/24/2017
|
10.32
|
|
|
X
|
|
|
|
|
|
|
|
|
|
Bank Agreements
|
|
|
|
|
|
|
|
|
10.33
|
|
|
|
|
10-Q
|
|
10.1
|
|
11/4/2011
|
|
10.34
|
|
|
|
|
8-K
|
|
10.1
|
|
11/8/2013
|
|
10.35
|
|
|
|
|
8-K
|
|
10.1
|
|
12/14/2015
|
|
10.36
|
|
|
|
|
8-K
|
|
10.1
|
|
4/5/2017
|
|
10.37
|
|
|
|
|
8-K
|
|
10.1
|
|
8/9/2017
|
|
|
|
Other Agreements
|
|
|
|
|
|
|
|
|
10.38+
|
|
|
|
|
10-K
|
|
10.26
|
|
8/29/2007
|
|
10.39+
|
|
|
|
|
10-K
|
|
10.54
|
|
8/29/2016
|
|
10.40+
|
|
|
|
|
10-K
|
|
10.39
|
|
8/26/2010
|
|
10.41+
|
|
|
|
|
10-K
|
|
10.37
|
|
8/26/2013
|
|
10.42+
|
|
|
|
|
10-K/A
|
|
10.38
|
|
1/31/2014
|
|
10.43+
|
|
|
|
|
10-K
|
|
10.52
|
|
8/29/2016
|
|
10.44+
|
|
|
|
|
10-K
|
|
10.53
|
|
8/29/2016
|
|
10.45+
|
|
|
|
|
10-Q
|
|
10.1
|
|
5/9/2017
|
|
10.46+
|
|
|
|
|
10-Q
|
|
10.1
|
|
5/9/2017
|
|
10.47+
|
|
|
|
|
10-Q/A
|
|
10.1
|
|
10/24/2014
|
|
10.48+
|
|
|
|
|
10-K
|
|
10.50
|
|
8/29/2016
|
|
10.49+
|
|
|
|
|
10-K
|
|
10.51
|
|
8/29/2016
|
|
10.50+
|
|
|
|
|
10-K
|
|
10.51
|
|
8/29/2017
|
|
21.1
|
|
|
X
|
|
|
|
|
|
|
|
23.1
|
|
|
X
|
|
|
|
|
|
|
|
31.1
|
|
|
X
|
|
|
|
|
|
|
|
31.2
|
|
|
X
|
|
|
|
|
|
|
|
32.1
|
|
|
X
|
|
|
|
|
|
|
|
32.2
|
|
|
X
|
|
|
|
|
|
|
101
|
|
The following materials from our Annual Report on Form 10-K for the year ended June 30, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets as of June 30, 2018 and June 30, 2017, (ii) the Consolidated Income Statements for the years ended June 30, 2018, June 30, 2017 and June 30, 2016, (iii) the Consolidated Statements of Shareholders' Equity for the years ended June 30, 2018, June 30, 2017 and June 30, 2016, (iv) the Consolidated Statements of Cash Flows for the years ended June 30, 2018, June 30, 2017 and June 30, 2016, and (v) the Notes to the Consolidated Financial Statements, tagged as blocks of text
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
+
|
Confidential treatment has been requested or granted with respect to certain portions of this Exhibit, which portions have been omitted and filed separately with the Commission as part of an application for confidential treatment.
|
|||||||||
|
Our SEC file number for documents filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, is 000-26926.
|
Retainer (All Directors)
|
$85,000
|
|
|
Equity Grant Value (All Directors)
|
$130,000
|
|
|
Board Chair Retainer
|
$70,000
|
|
|
Audit Committee Chair Retainer
|
$25,000
|
|
|
Compensation Committee Chair Retainer
|
$15,000
|
|
|
Compensation for Other Committee Retainer
|
$5,000
|
|
|
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
|
POS Portal, Inc.
|
|
California
|
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
|
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
Europe 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)
|
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/ Gerald Lyons
|
|
Gerald Lyons, Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
1)
|
The Report fully complies with the requirements of §13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 28, 2018
|
/s/ Michael L. Baur
|
|
|
Michael L. Baur,
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1)
|
The Report fully complies with the requirements of §13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 28, 2018
|
/s/ Gerald Lyons
|
|
|
Gerald Lyons
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|