|
|
|
|
|
|
|
|
|
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
Title of each class:
|
Trading Symbol:
|
Name of exchange on which registered:
|
Common stock, no par value
|
SCSC
|
NASDAQ Global Select Market
|
Large accelerated filer
|
x
|
|
Smaller reporting company
|
¨
|
|
Accelerated filer
|
¨
|
|
Emerging growth company
|
¨
|
|
Non-accelerated filer
|
¨
|
|
|
|
|
Class
|
|
Outstanding at May 7, 2019
|
Common Stock, no par value per share
|
|
25,705,842
|
|
|
Page #
|
|
||
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
||
|
|
|
Item 1
|
||
Item 1A.
|
||
Item 2
|
||
Item 6.
|
||
|
|
|
|
|
|
Item 1.
|
Financial Statements
|
|
March 31, 2019
|
|
June 30, 2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
20,400
|
|
|
$
|
25,530
|
|
Accounts receivable, less allowance of $43,124 at March 31, 2019 and $45,561 at June 30, 2018
|
632,539
|
|
|
678,940
|
|
||
Inventories
|
760,711
|
|
|
595,948
|
|
||
Prepaid expenses and other current assets
|
52,544
|
|
|
61,744
|
|
||
Total current assets
|
1,466,194
|
|
|
1,362,162
|
|
||
Property and equipment, net
|
71,282
|
|
|
73,042
|
|
||
Goodwill
|
319,042
|
|
|
298,174
|
|
||
Identifiable intangible assets, net
|
133,014
|
|
|
136,806
|
|
||
Deferred income taxes
|
20,660
|
|
|
22,199
|
|
||
Other non-current assets
|
51,963
|
|
|
52,912
|
|
||
Total assets
|
$
|
2,062,155
|
|
|
$
|
1,945,295
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
585,121
|
|
|
$
|
562,564
|
|
Accrued expenses and other current liabilities
|
86,910
|
|
|
90,873
|
|
||
Current portion of contingent consideration
|
39,445
|
|
|
42,975
|
|
||
Income taxes payable
|
1,664
|
|
|
13,348
|
|
||
Current portion of long-term debt
|
335
|
|
|
551
|
|
||
Total current liabilities
|
713,475
|
|
|
710,311
|
|
||
Deferred income taxes
|
1,607
|
|
|
1,769
|
|
||
Long-term debt
|
4,764
|
|
|
4,878
|
|
||
Borrowings under revolving credit facility
|
342,573
|
|
|
244,000
|
|
||
Long-term portion of contingent consideration
|
34,814
|
|
|
65,258
|
|
||
Other long-term liabilities
|
53,859
|
|
|
52,703
|
|
||
Total liabilities
|
1,151,092
|
|
|
1,078,919
|
|
||
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, 25,705,842
and 25,593,122 shares issued and outstanding at March 31, 2019 and June 30, 2018, respectively
|
72,903
|
|
|
68,220
|
|
||
Retained earnings
|
928,352
|
|
|
882,333
|
|
||
Accumulated other comprehensive income (loss)
|
(90,192
|
)
|
|
(84,177
|
)
|
||
Total shareholders’ equity
|
911,063
|
|
|
866,376
|
|
||
Total liabilities and shareholders’ equity
|
$
|
2,062,155
|
|
|
$
|
1,945,295
|
|
|
|
|
|
||||
June 30, 2018 amounts are derived from audited consolidated financial statements.
|
|||||||
See accompanying notes to these condensed consolidated financial statements.
|
|
Quarter ended
|
|
Nine months ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
$
|
893,357
|
|
|
$
|
895,637
|
|
|
$
|
2,912,278
|
|
|
$
|
2,852,408
|
|
Cost of goods sold
|
783,342
|
|
|
791,749
|
|
|
2,569,570
|
|
|
2,529,632
|
|
||||
Gross profit
|
110,015
|
|
|
103,888
|
|
|
342,708
|
|
|
322,776
|
|
||||
Selling, general and administrative expenses
|
77,688
|
|
|
72,691
|
|
|
236,569
|
|
|
220,642
|
|
||||
Depreciation expense
|
3,417
|
|
|
3,352
|
|
|
9,954
|
|
|
10,059
|
|
||||
Intangible amortization expense
|
5,005
|
|
|
5,103
|
|
|
14,708
|
|
|
15,600
|
|
||||
Change in fair value of contingent consideration
|
5,101
|
|
|
4,801
|
|
|
11,535
|
|
|
28,595
|
|
||||
Operating income
|
18,804
|
|
|
17,941
|
|
|
69,942
|
|
|
47,880
|
|
||||
Interest expense
|
3,670
|
|
|
2,784
|
|
|
9,415
|
|
|
6,655
|
|
||||
Interest income
|
(682
|
)
|
|
(887
|
)
|
|
(1,397
|
)
|
|
(2,349
|
)
|
||||
Other expense, net
|
21
|
|
|
252
|
|
|
254
|
|
|
691
|
|
||||
Income before income taxes
|
15,795
|
|
|
15,792
|
|
|
61,670
|
|
|
42,883
|
|
||||
Provision for income taxes
|
4,080
|
|
|
5,143
|
|
|
15,651
|
|
|
20,118
|
|
||||
Net income
|
$
|
11,715
|
|
|
$
|
10,649
|
|
|
$
|
46,019
|
|
|
$
|
22,765
|
|
Per share data:
|
|
|
|
|
|
|
|
||||||||
Net income per common share, basic
|
$
|
0.46
|
|
|
$
|
0.42
|
|
|
$
|
1.79
|
|
|
$
|
0.89
|
|
Weighted-average shares outstanding, basic
|
25,704
|
|
|
25,572
|
|
|
25,647
|
|
|
25,503
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per common share, diluted
|
$
|
0.45
|
|
|
$
|
0.42
|
|
|
$
|
1.79
|
|
|
$
|
0.89
|
|
Weighted-average shares outstanding, diluted
|
25,762
|
|
|
25,606
|
|
|
25,755
|
|
|
25,607
|
|
See accompanying notes to these condensed consolidated financial statements.
|
|
Quarter ended
|
|
Nine months ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
11,715
|
|
|
$
|
10,649
|
|
|
$
|
46,019
|
|
|
$
|
22,765
|
|
Unrealized (loss) gain on hedged transaction, net of tax
|
(350
|
)
|
|
561
|
|
|
(819
|
)
|
|
910
|
|
||||
Foreign currency translation adjustment
|
(1,797
|
)
|
|
4,194
|
|
|
(5,196
|
)
|
|
11,644
|
|
||||
Comprehensive income
|
$
|
9,568
|
|
|
$
|
15,404
|
|
|
$
|
40,004
|
|
|
$
|
35,319
|
|
See accompanying notes to these condensed consolidated financial statements.
|
|
Common
Stock
(Shares)
|
|
Common
Stock
(Amount)
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||
Balance at June 30, 2018
|
25,593,122
|
|
|
$
|
68,220
|
|
|
$
|
882,333
|
|
|
$
|
(84,177
|
)
|
|
$
|
866,376
|
|
Net income
|
—
|
|
|
—
|
|
|
14,322
|
|
|
—
|
|
|
14,322
|
|
||||
Unrealized gain on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
146
|
|
|
146
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,762
|
)
|
|
(4,762
|
)
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
14,542
|
|
|
425
|
|
|
—
|
|
|
—
|
|
|
425
|
|
||||
Share-based compensation
|
—
|
|
|
1,390
|
|
|
—
|
|
|
—
|
|
|
1,390
|
|
||||
Balance at September 30, 2018
|
25,607,664
|
|
|
70,035
|
|
|
896,655
|
|
|
(88,793
|
)
|
|
877,897
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
19,982
|
|
|
—
|
|
|
19,982
|
|
||||
Unrealized loss on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(615
|
)
|
|
(615
|
)
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
1,363
|
|
|
1,363
|
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
104,065
|
|
|
(321
|
)
|
|
—
|
|
|
—
|
|
|
(321
|
)
|
||||
Stock repurchased
|
(9,387
|
)
|
|
(308
|
)
|
|
—
|
|
|
—
|
|
|
(308
|
)
|
||||
Share-based compensation
|
—
|
|
|
1,506
|
|
|
—
|
|
|
—
|
|
|
1,506
|
|
||||
Balance at December 31, 2018
|
25,702,342
|
|
|
70,912
|
|
|
916,637
|
|
|
(88,045
|
)
|
|
899,504
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
11,715
|
|
|
—
|
|
|
11,715
|
|
||||
Unrealized loss on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
|
(350
|
)
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,797
|
)
|
|
(1,797
|
)
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
3,500
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Share-based compensation
|
—
|
|
|
1,993
|
|
|
—
|
|
|
—
|
|
|
1,993
|
|
||||
Balance at March 31, 2019
|
25,705,842
|
|
|
$
|
72,903
|
|
|
$
|
928,352
|
|
|
$
|
(90,192
|
)
|
|
$
|
911,063
|
|
|
Common
Stock
(Shares)
|
|
Common
Stock
(Amount)
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||
Balance at June 30, 2017
|
25,431,845
|
|
|
$
|
61,169
|
|
|
$
|
849,180
|
|
|
$
|
(73,204
|
)
|
|
$
|
837,145
|
|
Net income
|
—
|
|
|
—
|
|
|
4,147
|
|
|
—
|
|
|
4,147
|
|
||||
Unrealized gain on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
29
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
9,885
|
|
|
9,885
|
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
8,471
|
|
|
193
|
|
|
—
|
|
|
—
|
|
|
193
|
|
||||
Share based compensation
|
—
|
|
|
1,577
|
|
|
—
|
|
|
—
|
|
|
1,577
|
|
||||
Balance at September 30, 2017
|
25,440,316
|
|
|
62,939
|
|
|
853,327
|
|
|
(63,290
|
)
|
|
852,976
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
7,969
|
|
|
—
|
|
|
7,969
|
|
||||
Unrealized loss on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
320
|
|
|
320
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,435
|
)
|
|
(2,435
|
)
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
131,039
|
|
|
317
|
|
|
—
|
|
|
—
|
|
|
317
|
|
||||
Share based compensation
|
—
|
|
|
1,640
|
|
|
—
|
|
|
—
|
|
|
1,640
|
|
||||
Balance at December 31, 2017
|
25,571,355
|
|
|
64,896
|
|
|
861,296
|
|
|
(65,405
|
)
|
|
860,787
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
10,649
|
|
|
—
|
|
|
10,649
|
|
||||
Unrealized loss on hedged transaction, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
561
|
|
|
561
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
4,194
|
|
|
4,194
|
|
||||
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
807
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||
Share based compensation
|
—
|
|
|
1,611
|
|
|
—
|
|
|
—
|
|
|
1,611
|
|
||||
Balance at March 31, 2018
|
25,572,162
|
|
|
$
|
66,501
|
|
|
$
|
871,945
|
|
|
$
|
(60,650
|
)
|
|
$
|
877,796
|
|
|
Nine months ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
46,019
|
|
|
$
|
22,765
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
27,566
|
|
|
28,204
|
|
||
Amortization of debt issuance costs
|
252
|
|
|
242
|
|
||
Provision for doubtful accounts
|
3,199
|
|
|
5,939
|
|
||
Share-based compensation
|
4,906
|
|
|
4,855
|
|
||
Deferred income taxes
|
1,132
|
|
|
(3,061
|
)
|
||
Change in fair value of contingent consideration
|
11,535
|
|
|
28,595
|
|
||
Contingent consideration paid in excess of acquisition fair value
|
(10,190
|
)
|
|
(3,066
|
)
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
40,530
|
|
|
(16,950
|
)
|
||
Inventories
|
(169,031
|
)
|
|
(22,570
|
)
|
||
Prepaid expenses and other assets
|
10,116
|
|
|
(2,904
|
)
|
||
Other non-current assets
|
413
|
|
|
(3,114
|
)
|
||
Accounts payable
|
25,138
|
|
|
(32,418
|
)
|
||
Accrued expenses and other liabilities
|
(4,082
|
)
|
|
(9,452
|
)
|
||
Income taxes payable
|
(12,050
|
)
|
|
(3,295
|
)
|
||
Net cash (used in) operating activities
|
(24,547
|
)
|
|
(6,230
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(10,977
|
)
|
|
(5,307
|
)
|
||
Cash paid for business acquisitions, net of cash acquired
|
(32,161
|
)
|
|
(143,768
|
)
|
||
Net cash (used in) investing activities
|
(43,138
|
)
|
|
(149,075
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings on revolving credit
|
1,602,568
|
|
|
1,734,973
|
|
||
Repayments on revolving credit
|
(1,503,654
|
)
|
|
(1,550,460
|
)
|
||
Debt issuance costs
|
—
|
|
|
(296
|
)
|
||
Repayments on long-term debt
|
(330
|
)
|
|
—
|
|
||
Repayments on capital lease obligation
|
(495
|
)
|
|
(437
|
)
|
||
Contingent consideration payments
|
(35,606
|
)
|
|
(50,959
|
)
|
||
Exercise and issuance of equity awards
|
1,509
|
|
|
2,126
|
|
||
Taxes paid on settlement of equity awards
|
(1,406
|
)
|
|
(1,622
|
)
|
||
Repurchase of common stock
|
(308
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
62,278
|
|
|
133,325
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
277
|
|
|
1,247
|
|
||
Decrease in cash and cash equivalents
|
(5,130
|
)
|
|
(20,733
|
)
|
||
Cash and cash equivalents at beginning of period
|
25,530
|
|
|
56,094
|
|
||
Cash and cash equivalents at end of period
|
$
|
20,400
|
|
|
$
|
35,361
|
|
|
|
|
|
||||
See accompanying notes to these condensed consolidated financial statements.
|
•
|
Incremental costs of obtaining a contract
- These costs are included in selling, general and administrative expenses as the amortization period is generally one year or less. The Company expenses costs associated with obtaining and fulfilling contracts as incurred.
|
•
|
Shipping costs
- The Company accounts for certain shipping and handling activities as fulfillment costs and expenses them as incurred.
|
•
|
Significant financing components
- The Company has elected not to adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will generally be one year or less.
|
•
|
Sales tax and other related taxes
- Sales and other tax amounts collected from customers for remittance to governmental authorities are excluded from revenue.
|
|
|
Quarter ended March 31, 2019
|
||||||||||
|
|
|
|
(in thousands)
|
|
|
||||||
|
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
Revenue by product/service:
|
|
|
|
|
|
|
||||||
Technology solutions
|
|
$
|
596,913
|
|
|
$
|
282,124
|
|
|
$
|
879,037
|
|
Master agency and professional services
|
|
—
|
|
|
14,320
|
|
|
14,320
|
|
|||
|
|
$
|
596,913
|
|
|
$
|
296,444
|
|
|
$
|
893,357
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine months ended March 31, 2019
|
||||||||||
|
|
|
|
(in thousands)
|
|
|
||||||
|
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
Revenue by product/service:
|
|
|
|
|
|
|
||||||
Technology solutions
|
|
$
|
1,953,664
|
|
|
$
|
917,727
|
|
|
$
|
2,871,391
|
|
Master agency and professional services
|
|
—
|
|
|
40,887
|
|
|
40,887
|
|
|||
|
|
$
|
1,953,664
|
|
|
$
|
958,614
|
|
|
$
|
2,912,278
|
|
|
|
Quarter ended March 31, 2018
|
||||||||||
|
|
|
|
(in thousands)
|
|
|
||||||
|
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
Revenue by product/service:
|
|
|
|
|
|
|
||||||
Technology solutions
|
|
$
|
604,322
|
|
|
$
|
280,644
|
|
|
$
|
884,966
|
|
Master agency and professional services
|
|
—
|
|
|
10,671
|
|
|
10,671
|
|
|||
|
|
$
|
604,322
|
|
|
$
|
291,315
|
|
|
$
|
895,637
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine months ended March 31, 2018
|
||||||||||
|
|
|
|
(in thousands)
|
|
|
||||||
|
|
Worldwide Barcode, Networking & Security Segment
|
|
Worldwide Communications & Services Segment
|
|
Total
|
||||||
Revenue by product/service:
|
|
|
|
|
|
|
||||||
Technology solutions
|
|
$
|
1,944,436
|
|
|
$
|
877,197
|
|
|
$
|
2,821,633
|
|
Master agency and professional services
|
|
—
|
|
|
30,775
|
|
|
30,775
|
|
|||
|
|
$
|
1,944,436
|
|
|
$
|
907,972
|
|
|
$
|
2,852,408
|
|
|
Quarter ended
|
|
Nine months ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
11,715
|
|
|
$
|
10,649
|
|
|
$
|
46,019
|
|
|
$
|
22,765
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares, basic
|
25,704
|
|
|
25,572
|
|
|
25,647
|
|
|
25,503
|
|
||||
Dilutive effect of share-based payments
|
58
|
|
|
34
|
|
|
108
|
|
|
104
|
|
||||
Weighted-average shares, diluted
|
25,762
|
|
|
25,606
|
|
|
25,755
|
|
|
25,607
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per common share, basic
|
$
|
0.46
|
|
|
$
|
0.42
|
|
|
$
|
1.79
|
|
|
$
|
0.89
|
|
Net income per common share, diluted
|
$
|
0.45
|
|
|
$
|
0.42
|
|
|
$
|
1.79
|
|
|
$
|
0.89
|
|
|
March 31, 2019
|
|
June 30, 2018
|
||||
|
(in thousands)
|
||||||
Foreign currency translation adjustment
|
$
|
(90,475
|
)
|
|
$
|
(85,279
|
)
|
Unrealized gain (loss) on hedged transaction, net of tax
|
283
|
|
|
1,102
|
|
||
Accumulated other comprehensive income (loss)
|
$
|
(90,192
|
)
|
|
$
|
(84,177
|
)
|
|
|
|
|
|
Quarter ended March 31,
|
|
Nine months ended March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Tax expense (benefit)
|
$
|
307
|
|
|
$
|
(108
|
)
|
|
$
|
905
|
|
|
$
|
(487
|
)
|
|
|
|
|
|
|
|
|
|
POS Portal
|
||
|
(in thousands)
|
||
Receivables
|
$
|
8,914
|
|
Inventory
|
8,352
|
|
|
Other current assets
|
917
|
|
|
Property and equipment
|
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
|
28,449
|
|
|
Consideration transferred, net of cash acquired
|
143,768
|
|
|
|
$
|
201,444
|
|
|
Barcode, Networking & Security Segment
|
|
Communications & Services Segment
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance as of June 30, 2018
|
$
|
137,214
|
|
|
$
|
160,960
|
|
|
$
|
298,174
|
|
Additions
|
—
|
|
|
21,618
|
|
|
21,618
|
|
|||
Foreign currency translation adjustment
|
(75
|
)
|
|
(675
|
)
|
|
(750
|
)
|
|||
Balance as of March 31, 2019
|
$
|
137,139
|
|
|
$
|
181,903
|
|
|
$
|
319,042
|
|
|
Net Identifiable Intangible Assets
|
||
|
(in thousands)
|
||
Balance as of June 30, 2018
|
$
|
136,806
|
|
Additions
|
11,127
|
|
|
Amortization expense
|
(14,708
|
)
|
|
Foreign currency translation adjustment
|
(211
|
)
|
|
Balance as of March 31, 2019
|
$
|
133,014
|
|
|
March 31, 2019
|
|
June 30, 2018
|
||||
|
(in thousands)
|
||||||
Current portion of long-term debt
|
$
|
335
|
|
|
$
|
551
|
|
Long-term debt, net of current portion
|
4,764
|
|
|
4,878
|
|
||
Borrowings under revolving credit facility
|
342,573
|
|
|
244,000
|
|
||
Total debt
|
$
|
347,672
|
|
|
$
|
249,429
|
|
|
Quarter ended
|
|
Nine months ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Net foreign exchange derivative contract (gains) losses
|
$
|
1,125
|
|
|
$
|
1,115
|
|
|
$
|
178
|
|
|
$
|
2,057
|
|
Net foreign currency transactional and re-measurement (gains) losses
|
(654
|
)
|
|
(622
|
)
|
|
810
|
|
|
(782
|
)
|
||||
Net foreign currency (gains) losses
|
$
|
471
|
|
|
$
|
493
|
|
|
$
|
988
|
|
|
$
|
1,275
|
|
|
|
Quarter ended
|
|
Nine months ended
|
||||||||||||
|
|
March 31,
|
|
March 31,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Net interest (income) expense recognized as a result of interest rate swap
|
|
$
|
(79
|
)
|
|
$
|
28
|
|
|
$
|
(161
|
)
|
|
$
|
174
|
|
Unrealized gain (loss) in fair value of interest rate swap
|
|
(385
|
)
|
|
725
|
|
|
(919
|
)
|
|
1,136
|
|
||||
Net increase (decrease) in accumulated other comprehensive income (loss)
|
|
$
|
(464
|
)
|
|
$
|
753
|
|
|
$
|
(1,080
|
)
|
|
$
|
1,310
|
|
Income tax effect
|
|
(114
|
)
|
|
192
|
|
|
(261
|
)
|
|
400
|
|
||||
Net increase (decrease) in accumulated other comprehensive income (loss), net of tax
|
|
$
|
(350
|
)
|
|
$
|
561
|
|
|
$
|
(819
|
)
|
|
$
|
910
|
|
|
|
|
March 31, 2019
|
|
June 30, 2018
|
||||||||||||
|
Balance Sheet Location
|
|
Fair Value of
Derivatives
Designated
as Hedge Instruments
|
|
Fair Value of
Derivatives
Not Designated as Hedge Instruments
|
|
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
|
|
$
|
—
|
|
|
$
|
581
|
|
|
$
|
—
|
|
|
$
|
157
|
|
Interest rate swap agreement
|
Other non-current assets
|
|
$
|
524
|
|
|
$
|
—
|
|
|
$
|
1,604
|
|
|
$
|
—
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Accrued expenses and other current liabilities
|
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
156
|
|
•
|
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
|
$
|
24,574
|
|
|
$
|
24,574
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
581
|
|
|
—
|
|
|
581
|
|
|
—
|
|
||||
Interest rate swap agreement
|
524
|
|
|
—
|
|
|
524
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
25,679
|
|
|
$
|
24,574
|
|
|
$
|
1,105
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
24,574
|
|
|
$
|
24,574
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
112
|
|
|
—
|
|
|
112
|
|
|
—
|
|
||||
Liability for contingent consideration, current and non-current portion
|
74,259
|
|
|
—
|
|
|
—
|
|
|
74,259
|
|
||||
Total liabilities at fair value
|
$
|
98,945
|
|
|
$
|
24,574
|
|
|
$
|
112
|
|
|
$
|
74,259
|
|
|
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 portion
|
108,233
|
|
|
—
|
|
|
—
|
|
|
108,233
|
|
||||
Total liabilities at fair value
|
$
|
131,741
|
|
|
$
|
23,352
|
|
|
$
|
156
|
|
|
$
|
108,233
|
|
|
Contingent consideration for the quarter ended
|
|
Contingent consideration for the nine months ended
|
||||||||||||||||||||
|
March 31, 2019
|
|
March 31, 2019
|
||||||||||||||||||||
|
Barcode, Networking & Security Segment
|
|
Communications & Services Segment
|
|
Total
|
|
Barcode, Networking & Security Segment
|
|
Communications & Services Segment
|
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Fair value at beginning of period
|
$
|
—
|
|
|
$
|
71,886
|
|
|
$
|
71,886
|
|
|
$
|
—
|
|
|
$
|
108,233
|
|
|
$
|
108,233
|
|
Issuance of contingent consideration
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payments
|
—
|
|
|
(2,736
|
)
|
|
(2,736
|
)
|
|
—
|
|
|
(45,796
|
)
|
|
(45,796
|
)
|
||||||
Change in fair value of contingent consideration
|
—
|
|
|
5,101
|
|
|
5,101
|
|
|
—
|
|
|
11,535
|
|
|
11,535
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
287
|
|
|
287
|
|
||||||
Fair value at end of period
|
$
|
—
|
|
|
$
|
74,259
|
|
|
$
|
74,259
|
|
|
$
|
—
|
|
|
$
|
74,259
|
|
|
$
|
74,259
|
|
|
Contingent consideration for the quarter ended
|
|
Contingent consideration for the nine months ended
|
||||||||||||||||||||
|
March 31, 2018
|
|
March 31, 2018
|
||||||||||||||||||||
|
Barcode, Networking & Security Segment
|
|
Communications & Services Segment
|
|
Total
|
|
Barcode, Networking & Security Segment
|
|
Communications & Services Segment
|
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Fair value at beginning of period
|
$
|
—
|
|
|
$
|
97,031
|
|
|
$
|
97,031
|
|
|
$
|
—
|
|
|
$
|
114,036
|
|
|
$
|
114,036
|
|
Issuance of contingent consideration
|
—
|
|
|
—
|
|
|
—
|
|
|
13,098
|
|
|
—
|
|
|
13,098
|
|
||||||
Payments
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,167
|
)
|
|
(40,858
|
)
|
|
(54,025
|
)
|
||||||
Change in fair value of contingent consideration
|
—
|
|
|
4,801
|
|
|
4,801
|
|
|
69
|
|
|
28,526
|
|
|
28,595
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
(54
|
)
|
|
(54
|
)
|
|
—
|
|
|
74
|
|
|
74
|
|
||||||
Fair value at end of period
|
$
|
—
|
|
|
$
|
101,778
|
|
|
$
|
101,778
|
|
|
$
|
—
|
|
|
$
|
101,778
|
|
|
$
|
101,778
|
|
•
|
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 markets.
|
Reporting Period
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Weighted Average Rates
|
|
March 31, 2019
|
|
Discounted cash flow
|
|
Weighted average cost of capital
|
|
14.9
|
%
|
|
|
|
|
Adjusted EBITDA growth rate
|
|
15.3
|
%
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
Discounted cash flow
|
|
Weighted average cost of capital
|
|
14.8
|
%
|
|
|
|
|
Adjusted EBITDA growth rate
|
|
18.2
|
%
|
|
March 31, 2019
|
|
June 30, 2018
|
||||
|
(in thousands)
|
||||||
Assets:
|
|
|
|
||||
Worldwide Barcode, Networking & Security
|
$
|
1,079,812
|
|
|
$
|
1,062,143
|
|
Worldwide Communications & Services
|
937,517
|
|
|
841,490
|
|
||
Corporate
|
44,826
|
|
|
41,662
|
|
||
|
$
|
2,062,155
|
|
|
$
|
1,945,295
|
|
Property and equipment, net by Geography Category:
|
|
|
|
||||
United States and Canada
|
$
|
67,111
|
|
|
$
|
69,032
|
|
International
|
4,171
|
|
|
4,010
|
|
||
|
$
|
71,282
|
|
|
$
|
73,042
|
|
|
March 31, 2019
|
|
June 30, 2018
|
||||
|
Network1
|
||||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Prepaid expenses and other current assets
|
$
|
528
|
|
|
$
|
1,385
|
|
Other non-current assets
|
$
|
5,133
|
|
|
$
|
5,700
|
|
Liabilities
|
|
|
|
||||
Accrued expenses and other current liabilities
|
$
|
528
|
|
|
$
|
1,385
|
|
Other long-term liabilities
|
$
|
5,133
|
|
|
$
|
5,700
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Worldwide Barcode, Networking & Security
|
•
|
Worldwide Communications & Services
|
|
Quarter ended March 31,
|
|
|
|
% Change, Constant Currency, Excluding Acquisitions
(a)
|
||||||||||||
Net Sales by Segment:
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|||||||||
|
(in thousands)
|
|
|
|
|
||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
596,913
|
|
|
$
|
604,322
|
|
|
$
|
(7,409
|
)
|
|
(1.2
|
)%
|
|
0.6
|
%
|
Worldwide Communications & Services
|
296,444
|
|
|
291,315
|
|
|
5,129
|
|
|
1.8
|
%
|
|
5.0
|
%
|
|||
Total net sales
|
$
|
893,357
|
|
|
$
|
895,637
|
|
|
$
|
(2,280
|
)
|
|
(0.3
|
)%
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Nine months ended March 31,
|
|
|
|
% Change, Constant Currency, Excluding Acquisitions
(a)
|
||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|||||||||||
Worldwide Barcode, Networking & Security
|
$
|
1,953,664
|
|
|
$
|
1,944,436
|
|
|
$
|
9,228
|
|
|
0.5
|
%
|
|
1.4
|
%
|
Worldwide Communications & Services
|
958,614
|
|
|
907,972
|
|
|
50,642
|
|
|
5.6
|
%
|
|
9.2
|
%
|
|||
Total net sales
|
$
|
2,912,278
|
|
|
$
|
2,852,408
|
|
|
$
|
59,870
|
|
|
2.1
|
%
|
|
3.9
|
%
|
|
Quarter ended March 31,
|
|
|
|
% Change, Constant Currency, Excluding Acquisitions
(a)
|
||||||||||||
Net Sales by Geography:
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|||||||||
|
(in thousands)
|
|
|
|
|
||||||||||||
United States and Canada
|
$
|
672,155
|
|
|
$
|
653,537
|
|
|
$
|
18,618
|
|
|
2.8
|
%
|
|
2.5
|
%
|
International
|
$
|
221,202
|
|
|
$
|
242,100
|
|
|
(20,898
|
)
|
|
(8.6
|
)%
|
|
0.8
|
%
|
|
Total net sales
|
$
|
893,357
|
|
|
$
|
895,637
|
|
|
$
|
(2,280
|
)
|
|
(0.3
|
)%
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Nine months ended March 31,
|
|
|
|
% Change, Constant Currency, Excluding Acquisitions
(a)
|
||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|||||||||
|
(in thousands)
|
|
|
|
|
||||||||||||
United States and Canada
|
$
|
2,189,567
|
|
|
$
|
2,095,519
|
|
|
$
|
94,048
|
|
|
4.5
|
%
|
|
3.8
|
%
|
International
|
722,711
|
|
|
756,889
|
|
|
(34,178
|
)
|
|
(4.5
|
)%
|
|
4.0
|
%
|
|||
Total net sales
|
$
|
2,912,278
|
|
|
$
|
2,852,408
|
|
|
$
|
59,870
|
|
|
2.1
|
%
|
|
3.9
|
%
|
|
Quarter ended March 31,
|
|
|
|
|
|
% of Net Sales March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
61,563
|
|
|
$
|
56,493
|
|
|
$
|
5,070
|
|
|
9.0
|
%
|
|
10.3
|
%
|
|
9.3
|
%
|
Worldwide Communications & Services
|
48,452
|
|
|
47,395
|
|
|
1,057
|
|
|
2.2
|
%
|
|
16.3
|
%
|
|
16.3
|
%
|
|||
Gross profit
|
$
|
110,015
|
|
|
$
|
103,888
|
|
|
$
|
6,127
|
|
|
5.9
|
%
|
|
12.3
|
%
|
|
11.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Nine months ended March 31,
|
|
|
|
|
|
% of Net Sales March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
188,339
|
|
|
$
|
175,939
|
|
|
$
|
12,400
|
|
|
7.0
|
%
|
|
9.6
|
%
|
|
9.0
|
%
|
Worldwide Communications & Services
|
154,369
|
|
|
146,837
|
|
|
7,532
|
|
|
5.1
|
%
|
|
16.1
|
%
|
|
16.2
|
%
|
|||
Gross profit
|
$
|
342,708
|
|
|
$
|
322,776
|
|
|
$
|
19,932
|
|
|
6.2
|
%
|
|
11.8
|
%
|
|
11.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended March 31,
|
|
|
|
|
|
% of Net Sales March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Selling, general and administrative expenses
|
$
|
77,688
|
|
|
$
|
72,691
|
|
|
$
|
4,997
|
|
|
6.9
|
%
|
|
8.7
|
%
|
|
8.1
|
%
|
Depreciation expense
|
3,417
|
|
|
3,352
|
|
|
65
|
|
|
1.9
|
%
|
|
0.4
|
%
|
|
0.4
|
%
|
|||
Intangible amortization expense
|
5,005
|
|
|
5,103
|
|
|
(98
|
)
|
|
(1.9
|
)%
|
|
0.6
|
%
|
|
0.6
|
%
|
|||
Change in fair value of contingent consideration
|
5,101
|
|
|
4,801
|
|
|
300
|
|
|
6.2
|
%
|
|
0.6
|
%
|
|
0.5
|
%
|
|||
Operating expenses
|
$
|
91,211
|
|
|
$
|
85,947
|
|
|
$
|
5,264
|
|
|
6.1
|
%
|
|
10.2
|
%
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Nine months ended March 31,
|
|
|
|
|
|
% of Net Sales March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative expenses
|
$
|
236,569
|
|
|
$
|
220,642
|
|
|
$
|
15,927
|
|
|
7.2
|
%
|
|
8.1
|
%
|
|
7.7
|
%
|
Depreciation expense
|
9,954
|
|
|
10,059
|
|
|
(105
|
)
|
|
(1.0
|
)%
|
|
0.3
|
%
|
|
0.4
|
%
|
|||
Intangible amortization expense
|
14,708
|
|
|
15,600
|
|
|
(892
|
)
|
|
(5.7
|
)%
|
|
0.5
|
%
|
|
0.5
|
%
|
|||
Change in fair value of contingent consideration
|
11,535
|
|
|
28,595
|
|
|
(17,060
|
)
|
|
(59.7
|
)%
|
|
0.4
|
%
|
|
1.0
|
%
|
|||
Operating expenses
|
$
|
272,766
|
|
|
$
|
274,896
|
|
|
$
|
(2,130
|
)
|
|
(0.8
|
)%
|
|
9.4
|
%
|
|
9.6
|
%
|
|
Quarter ended March 31,
|
|
|
|
|
|
% of Net Sales March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
16,865
|
|
|
$
|
11,566
|
|
|
$
|
5,299
|
|
|
45.8
|
%
|
|
2.8
|
%
|
|
1.9
|
%
|
Worldwide Communications & Services
|
2,161
|
|
|
6,375
|
|
|
(4,214
|
)
|
|
(66.1
|
)%
|
|
0.7
|
%
|
|
2.2
|
%
|
|||
Corporate
|
(222
|
)
|
|
—
|
|
|
(222
|
)
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
|||
Operating income
|
$
|
18,804
|
|
|
$
|
17,941
|
|
|
$
|
863
|
|
|
4.8
|
%
|
|
2.1
|
%
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Nine months ended March 31,
|
|
|
|
|
|
% of Net Sales March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Worldwide Barcode, Networking & Security
|
$
|
48,974
|
|
|
$
|
41,143
|
|
|
$
|
7,831
|
|
|
19.0
|
%
|
|
2.5
|
%
|
|
2.1
|
%
|
Worldwide Communications & Services
|
21,956
|
|
|
6,909
|
|
|
15,047
|
|
|
217.8
|
%
|
|
2.3
|
%
|
|
0.8
|
%
|
|||
Corporate
|
(988
|
)
|
|
(172
|
)
|
|
(816
|
)
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
|||
Operating income
|
$
|
69,942
|
|
|
$
|
47,880
|
|
|
$
|
22,062
|
|
|
46.1
|
%
|
|
2.4
|
%
|
|
1.7
|
%
|
Net Sales by Segment:
|
|
|
|
|
|
|||||||||
|
Quarter ended March 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Worldwide Barcode, Networking & Security:
|
(in thousands)
|
|
|
|
|
|||||||||
Net sales, as reported
|
$
|
596,913
|
|
|
$
|
604,322
|
|
|
$
|
(7,409
|
)
|
|
(1.2
|
)%
|
Foreign exchange impact
(a)
|
10,802
|
|
|
—
|
|
|
|
|
|
|||||
Net sales, constant currency
|
607,715
|
|
|
604,322
|
|
|
3,393
|
|
|
0.6
|
%
|
|||
Less: Acquisitions
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Net sales, constant currency excluding acquisitions
|
$
|
607,715
|
|
|
$
|
604,322
|
|
|
$
|
3,393
|
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|||||||
Worldwide Communications & Services:
|
|
|
|
|
|
|
|
|||||||
Net sales, as reported
|
$
|
296,444
|
|
|
$
|
291,315
|
|
|
$
|
5,129
|
|
|
1.8
|
%
|
Foreign exchange impact
(a)
|
11,945
|
|
|
—
|
|
|
|
|
|
|||||
Net sales, constant currency
|
308,389
|
|
|
291,315
|
|
|
17,074
|
|
|
5.9
|
%
|
|||
Less: Acquisitions
|
(2,423
|
)
|
|
—
|
|
|
|
|
|
|||||
Net sales, constant currency excluding acquisitions
|
$
|
305,966
|
|
|
$
|
291,315
|
|
|
$
|
14,651
|
|
|
5.0
|
%
|
|
|
|
|
|
|
|
|
|||||||
Consolidated:
|
|
|
|
|
|
|
|
|||||||
Net sales, as reported
|
$
|
893,357
|
|
|
$
|
895,637
|
|
|
$
|
(2,280
|
)
|
|
(0.3
|
)%
|
Foreign exchange impact
(a)
|
22,747
|
|
|
—
|
|
|
|
|
|
|||||
Net sales, constant currency
|
916,104
|
|
|
895,637
|
|
|
20,467
|
|
|
2.3
|
%
|
|||
Less: Acquisitions
|
(2,423
|
)
|
|
—
|
|
|
|
|
|
|||||
Net sales, constant currency excluding acquisitions
|
$
|
913,681
|
|
|
$
|
895,637
|
|
|
$
|
18,044
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|||||||
Net Sales by Segment:
|
|
|
|
|
|
|||||||||
|
Nine months ended March 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Worldwide Barcode, Networking & Security:
|
(in thousands)
|
|
|
|
|
|||||||||
Net sales, as reported
|
$
|
1,953,664
|
|
|
$
|
1,944,436
|
|
|
$
|
9,228
|
|
|
0.5
|
%
|
Foreign exchange impact
(a)
|
26,119
|
|
|
—
|
|
|
|
|
|
|||||
Net sales, constant currency
|
1,979,783
|
|
|
1,944,436
|
|
|
35,347
|
|
|
1.8
|
%
|
|||
Less: Acquisitions
|
(23,465
|
)
|
|
(14,553
|
)
|
|
|
|
|
|||||
Net sales, constant currency excluding acquisitions
|
$
|
1,956,318
|
|
|
$
|
1,929,883
|
|
|
$
|
26,435
|
|
|
1.4
|
%
|
|
|
|
|
|
|
|
|
|||||||
Worldwide Communications & Services:
|
|
|
|
|
|
|
|
|||||||
Net sales, as reported
|
$
|
958,614
|
|
|
$
|
907,972
|
|
|
$
|
50,642
|
|
|
5.6
|
%
|
Foreign exchange impact
(a)
|
38,166
|
|
|
—
|
|
|
|
|
|
|||||
Net sales, constant currency
|
996,780
|
|
|
907,972
|
|
|
88,808
|
|
|
9.8
|
%
|
|||
Less: Acquisitions
|
(5,219
|
)
|
|
—
|
|
|
|
|
|
|||||
Net sales, constant currency excluding acquisitions
|
$
|
991,561
|
|
|
$
|
907,972
|
|
|
$
|
83,589
|
|
|
9.2
|
%
|
|
|
|
|
|
|
|
|
|||||||
Consolidated:
|
|
|
|
|
|
|
|
|||||||
Net sales, as reported
|
$
|
2,912,278
|
|
|
$
|
2,852,408
|
|
|
$
|
59,870
|
|
|
2.1
|
%
|
Foreign exchange impact
(a)
|
64,285
|
|
|
—
|
|
|
|
|
|
|||||
Net sales, constant currency
|
2,976,563
|
|
|
2,852,408
|
|
|
124,155
|
|
|
4.4
|
%
|
|||
Less: Acquisitions
|
(28,684
|
)
|
|
(14,553
|
)
|
|
|
|
|
|||||
Net sales, constant currency excluding acquisitions
|
$
|
2,947,879
|
|
|
$
|
2,837,855
|
|
|
$
|
110,024
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
Quarter ended March 31, 2019
|
|
Quarter ended March 31, 2018
|
||||||||||||||||||||||||||||
|
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
|
$
|
18,804
|
|
|
$
|
15,795
|
|
|
$
|
11,715
|
|
|
$
|
0.45
|
|
|
$
|
17,941
|
|
|
$
|
15,792
|
|
|
$
|
10,649
|
|
|
$
|
0.42
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Amortization of intangible assets
|
5,005
|
|
|
5,005
|
|
|
3,789
|
|
|
0.15
|
|
|
5,103
|
|
|
5,103
|
|
|
3,590
|
|
|
0.14
|
|
||||||||
Change in fair value of contingent consideration
|
5,101
|
|
|
5,101
|
|
|
3,619
|
|
|
0.14
|
|
|
4,801
|
|
|
4,801
|
|
|
3,272
|
|
|
0.12
|
|
||||||||
Acquisition costs
|
222
|
|
|
222
|
|
|
222
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Restructuring costs
|
592
|
|
|
592
|
|
|
443
|
|
|
0.02
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Non-GAAP measures
|
$
|
29,724
|
|
|
$
|
26,715
|
|
|
$
|
19,788
|
|
|
$
|
0.77
|
|
|
$
|
27,845
|
|
|
$
|
25,696
|
|
|
$
|
17,511
|
|
|
$
|
0.68
|
|
Operating Income by Segment:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Quarter ended March 31,
|
|
|
|
|
|
% of Net Sales March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
Worldwide Barcode, Networking & Security:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
16,865
|
|
|
$
|
11,566
|
|
|
$
|
5,299
|
|
|
45.8
|
%
|
|
2.8
|
%
|
|
1.9
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
1,968
|
|
|
2,310
|
|
|
(342
|
)
|
|
|
|
|
|
|
|
|||||
Non-GAAP operating income
|
$
|
18,833
|
|
|
$
|
13,876
|
|
|
$
|
4,957
|
|
|
35.7
|
%
|
|
3.2
|
%
|
|
2.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Worldwide Communications & Services:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
2,161
|
|
|
$
|
6,375
|
|
|
$
|
(4,214
|
)
|
|
(66.1
|
)%
|
|
0.7
|
%
|
|
2.2
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
3,037
|
|
|
2,793
|
|
|
244
|
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
5,101
|
|
|
4,801
|
|
|
300
|
|
|
|
|
|
|
|
||||||
Restructuring costs
|
592
|
|
|
—
|
|
|
592
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
10,891
|
|
|
$
|
13,969
|
|
|
$
|
(3,078
|
)
|
|
(22.0
|
)%
|
|
3.7
|
%
|
|
4.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
(222
|
)
|
|
$
|
—
|
|
|
$
|
(222
|
)
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Acquisition costs
|
222
|
|
|
—
|
|
|
222
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
18,804
|
|
|
$
|
17,941
|
|
|
$
|
863
|
|
|
4.8
|
%
|
|
2.1
|
%
|
|
2.0
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
5,005
|
|
|
5,103
|
|
|
(98
|
)
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
5,101
|
|
|
4,801
|
|
|
300
|
|
|
|
|
|
|
|
||||||
Acquisition costs
|
222
|
|
|
—
|
|
|
222
|
|
|
|
|
|
|
|
||||||
Restructuring costs
|
592
|
|
|
—
|
|
|
592
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
29,724
|
|
|
$
|
27,845
|
|
|
$
|
1,879
|
|
|
6.7
|
%
|
|
3.3
|
%
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Income by Segment:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Nine months ended March 31,
|
|
|
|
|
|
% of Net Sales March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2019
|
|
2018
|
|||||||||
Worldwide Barcode, Networking & Security:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
48,974
|
|
|
$
|
41,143
|
|
|
$
|
7,831
|
|
|
19.0
|
%
|
|
2.5
|
%
|
|
2.1
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
6,131
|
|
|
6,393
|
|
|
(262
|
)
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
—
|
|
|
69
|
|
|
(69
|
)
|
|
|
|
|
|
|
||||||
Restructuring Costs
|
708
|
|
|
—
|
|
|
708
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
55,813
|
|
|
$
|
47,605
|
|
|
$
|
8,208
|
|
|
17.2
|
%
|
|
2.9
|
%
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Worldwide Communications & Services:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
21,956
|
|
|
$
|
6,909
|
|
|
$
|
15,047
|
|
|
217.8
|
%
|
|
2.3
|
%
|
|
0.8
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
8,577
|
|
|
9,207
|
|
|
(630
|
)
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
11,535
|
|
|
28,526
|
|
|
(16,991
|
)
|
|
|
|
|
|
|
||||||
Restructuring costs
|
1,212
|
|
|
—
|
|
|
1,212
|
|
|
|
|
|
|
|
||||||
Legal settlement
|
—
|
|
|
952
|
|
|
(952
|
)
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
43,280
|
|
|
$
|
45,594
|
|
|
$
|
(2,314
|
)
|
|
(5.1
|
)%
|
|
4.5
|
%
|
|
5.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
(988
|
)
|
|
$
|
(172
|
)
|
|
$
|
(816
|
)
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Acquisition costs
|
988
|
|
|
172
|
|
|
816
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
nm*
|
|
|
nm*
|
|
|
nm*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP operating income
|
$
|
69,942
|
|
|
$
|
47,880
|
|
|
$
|
22,062
|
|
|
46.1
|
%
|
|
2.4
|
%
|
|
1.7
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of intangible assets
|
14,708
|
|
|
15,600
|
|
|
(892
|
)
|
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
11,535
|
|
|
28,595
|
|
|
(17,060
|
)
|
|
|
|
|
|
|
||||||
Acquisition costs
|
988
|
|
|
172
|
|
|
816
|
|
|
|
|
|
|
|
||||||
Restructuring costs
|
1,920
|
|
|
—
|
|
|
1,920
|
|
|
|
|
|
|
|
||||||
Legal settlement
|
—
|
|
|
952
|
|
|
(952
|
)
|
|
|
|
|
|
|
||||||
Non-GAAP operating income
|
99,093
|
|
|
93,199
|
|
|
$
|
5,894
|
|
|
6.3
|
%
|
|
3.4
|
%
|
|
3.3
|
%
|
|
Quarter ended March 31,
|
||||
|
2019
|
|
2018
|
||
Return on invested capital ratio, annualized
(a)
|
11.1
|
%
|
|
11.2
|
%
|
(a)
|
The annualized EBITDA amount is divided by days in the quarter times 365 days per year. There were 90 days in the current and prior-year quarter.
|
|
Quarter ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Reconciliation of net income to EBITDA:
|
|
||||||
Net income (GAAP)
|
$
|
11,715
|
|
|
$
|
10,649
|
|
Plus: Interest expense
|
3,670
|
|
|
2,784
|
|
||
Plus: Income taxes
|
4,080
|
|
|
5,143
|
|
||
Plus: Depreciation and amortization
(a)
|
9,363
|
|
|
9,438
|
|
||
EBITDA (non-GAAP)
|
28,828
|
|
|
28,014
|
|
||
Plus: Change in fair value of contingent consideration
|
5,101
|
|
|
4,801
|
|
||
Plus: Acquisition costs
(b)
|
222
|
|
|
—
|
|
||
Plus: Restructuring costs
(a)
|
456
|
|
|
—
|
|
||
Adjusted EBITDA (numerator for ROIC) (non-GAAP)
|
$
|
34,607
|
|
|
$
|
32,815
|
|
|
Quarter ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Invested capital calculations:
|
|
||||||
Equity – beginning of the quarter
|
$
|
899,503
|
|
|
$
|
860,787
|
|
Equity – end of the quarter
|
911,063
|
|
|
877,796
|
|
||
Plus: Change in fair value of contingent consideration, net of tax
|
3,619
|
|
|
3,272
|
|
||
Plus: Acquisition costs
(b)
|
222
|
|
|
—
|
|
||
Plus: Restructuring, net of tax
(a)
|
334
|
|
|
—
|
|
||
Average equity
|
907,371
|
|
|
870,928
|
|
||
Average funded debt
(c)
|
357,443
|
|
|
315,872
|
|
||
Invested capital (denominator for ROIC) (non-GAAP)
|
$
|
1,264,814
|
|
|
$
|
1,186,800
|
|
(a)
|
Accelerated depreciation expense on certain European facilities in connection with restructuring in the third quarter of fiscal 2019 are classified as depreciation expense above rather than restructuring costs.
|
(b)
|
Acquisition costs are generally nondeductible for tax purposes.
|
(c)
|
Average funded debt is calculated as the average daily amounts outstanding on our current and long-term interest-bearing debt.
|
|
Nine months ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash provided by (used in):
|
(in thousands)
|
||||||
Operating activities
|
$
|
(24,547
|
)
|
|
$
|
(6,230
|
)
|
Investing activities
|
(43,138
|
)
|
|
(149,075
|
)
|
||
Financing activities
|
62,278
|
|
|
133,325
|
|
||
Effect of exchange rate change on cash and cash equivalents
|
277
|
|
|
1,247
|
|
||
Decrease in cash and cash equivalents
|
$
|
(5,130
|
)
|
|
$
|
(20,733
|
)
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total number of shares purchased
(a)
|
|
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
|
||||||
January 1, 2019 through January 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
99,356,839
|
|
February 1, 2019 through February 28, 2019
|
|
58
|
|
|
$
|
38.05
|
|
|
—
|
|
|
$
|
99,356,839
|
|
March 1, 2019 through March 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
99,356,839
|
|
Total
|
|
58
|
|
|
$
|
38.05
|
|
|
—
|
|
|
$
|
99,356,839
|
|
|
|
|
|
|
|
|
|
|
Item 6.
|
Exhibits
|
|
|
ScanSource, Inc.
|
|
|
|
|
|
/s/ MICHAEL L. BAUR
|
|
|
Michael L. Baur
|
Date:
|
May 9, 2019
|
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
|
/s/ GERALD LYONS
|
|
|
Gerald Lyons
|
Date:
|
May 9, 2019
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
1.
|
Removal of Demising Wall
. Notwithstanding anything in the Lease to the contrary, on or before March 1, 2020, Tenant shall remove the demising wall between the Existing Premises and the Expansion Premises (as defined in the Third Amendment; the “
Tenant Improvements
”). Within thirty (30) days following the Effective Date, Landlord shall pay Tenant an amount equal to $54,500.00 to construct to Tenant Improvements. The Tenant Improvements shall be considered alterations and shall be constructed in accordance with the provisions of Section 18 of the Lease.
|
2.
|
New Landlord Notice Addresses
. The notice addresses of Landlord shall hereafter be as follows:
|
|
LANDLORD: GPT 8650 Commerce Drive Owner LLC
|
|
|
220 Commerce Dr., Suite 400
|
|
|
Fort Washington, Pennsylvania 19034
|
|
|
Attention: Lease Administration
|
|
|
|
|
|
|
|
|
With a required copy to:
|
|
|
GPT 8650 Commerce Drive Owner LLC
|
|
|
90 Park Avenue, 32
nd
Floor
|
|
|
New York, New York 10016
|
|
|
Attention: General Counsel
|
|
|
|
|
3.
|
New Landlord Address for Rental Payments
. The address of Landlord for rental payments shall hereafter be as follows:
|
4.
|
Entire Agreement; Amendments
. The Lease, as amended by this Fourth Amendment, constitutes the entire agreement of the parties relating to the subject matter of the Lease, and it supersedes all other oral or written agreements relating
|
5.
|
Authorization
. Each party represents that all necessary action has been taken to authorize the execution, delivery and performance by such party of this Fourth Amendment.
|
6.
|
Counterparts
. This Fourth Amendment may be executed in counterparts, each of which shall be deemed an original. Facsimile copies or PDF copies sent by email of this Fourth Amendment and any signatures thereon shall be considered for all purposes as originals.
|
(A)
|
On February 12, 2014 the Parties entered into an agreement that was renamed, as of April 11, 2016, to: PartnerConnect
TM
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)
|
Distributor purchases Products from Zebra under the Distributor Agreement;
|
(C)
|
Zebra has recently completed the acquisition of Xplore, which transaction closed on August 14, 2018;
|
(D)
|
Zebra has expanded its products portfolio by adding the product families listed in
Exhibit A
, that as of the Effective Date hereof are branded Xplore or Motion Computing, thereto (“
Xplore Products
”);
|
(E)
|
Xplore, now a Zebra Affiliate, is the seller of Xplore Products;
|
(F)
|
Xplore wishes to sell Xplore Products to Distributor and Distributor wishes to purchase such products from Xplore pursuant to the terms and conditions of the Distributor Agreement by entering into this Addendum; and
|
(G)
|
The Parties desire to amend the Distributor Agreement by adding Xplore Products and authorizing Distributor to purchase such products from Xplore for further resale to members of the Zebra PartnerConnect Program in the Market or Territory.
|
1.
|
Expressions used in this Addendum shall have the same meanings given to them in the Distributor Agreement, unless the context requires otherwise.
|
2.
|
This Addendum automatically incorporates any future amendments to the Distributor Agreement and such amendments will be made part of this Addendum to the extent that the amendments do not conflict therewith, unless otherwise agreed in writing by the Parties.
|
3.
|
Commencing on the Effective Date hereof, Xplore Products will be considered for all intents and purposes of the Distributor Agreement as Products
and the purchase and sale thereof will be conducted in accordance with, and be subject to the terms and conditions of the Distributor Agreement, unless otherwise set out in this section:
|
a.
|
The actual sale of Xplore Products (or any part thereof) is subject to Zebra obtaining the relevant regulatory approvals for the sale of Xplore Products in and into the Market or Territory (or any portion thereof) and shall commence only upon the attainment of such approvals.
|
b.
|
Zebra Consolidated Global Limited Warranty posted at
www.zebra.com/partnerconnect-tc
or any equivalent website thereof, will not apply to Xplore Products which shall carry
|
c.
|
Certain operational aspects relating to the purchase of Xplore Products, will be governed by the terms and conditions of
Exhibit B
, attached to this Addendum and incorporated therein by this reference. The terms of the Distribution Agreement will apply to all areas not covered by Exhibit B.
|
4.
|
By signing this Addendum, Xplore hereby agrees to be bound by the terms of the Distributor Agreement as a party thereto for the sole purpose of selling Xplore Products to Distributor. With the exception of the sale of Xplore Products, Xplore does not assume any obligations (prior, current or future) of Zebra under the Distributor Agreement.
|
5.
|
In the event of a conflict between the Distributor Agreement with this Addendum, the terms of this Addendum shall take precedence.
|
6.
|
Signature Counterparts.
This Addendum and any additional amendments of addenda to the Distribution Agreement 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 Addendum and any additional amendments of addenda thereto shall be treated as and shall have the same effect as an original signed copy of this document.
|
7.
|
Term and Termination
. This Addendum may be terminated at any time by either Party in accordance with the termination provisions of the Distribution Agreement. The Addendum shall not have an Initial Period.
|
8.
|
Governing Law and Dispute Resolution.
The terms of the Governing Law and Dispute Resolution provisions of the Distribution Agreement will apply to this Addendum.
|
ZEBRA TECHNOLOGIES INTERNATIONAL, LLC
|
|
SCANSOURCE, INC.
|
|
||
By:
|
/s/ Alex Castaneda
|
|
By:
|
/s/ Brenda McCurry
|
|
Name:
|
Alex Castaneda
|
|
Name:
|
Brenda McCurry
|
|
Title:
|
VP NA Territory and Channel Sales
|
|
Title:
|
Vice President, Supplier Services
|
|
Date:
|
May 7, 2019
|
|
Date:
|
1/29/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZEBRA TECHNOLOGIES DO BRASIL- COMÉRCIO DE PRODUTOS DE
INFORMÁTICA LTDA.
|
|
SCANSOURCE LATIN AMERICA, INC.
|
|
||
By:
|
|
|
By:
|
/s/ Marcelo Hirsch
|
|
Name:
|
Vanderlei Ferreira
|
|
Name:
|
Marcelo Hirsch
|
|
Title:
|
Director
|
|
Title:
|
Managing Director
|
|
Date:
|
May 8, 2019
|
|
Date:
|
2/7/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
XPLORE TECHNOLOGIES CORPORATION OF AMERICA
|
|
SCANSOURCE DE MEXICO S. DE R.L. DE C.V.
|
|
||
By:
|
/s/ Alex Castaneda
|
|
By:
|
/s/ Victor Perez
|
|
Name:
|
Alex Castaneda
|
|
Name:
|
Victor Perez
|
|
Title:
|
VP NA Territory and Channel Sales
|
|
Title:
|
Country Manager
|
|
Date:
|
May 7, 2019
|
|
Date:
|
26/2/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCANSOURCE BRASIL DISTRIBUIDORA DE TECHNOLOGIAS LTDA.
|
|
|
|
|
|
By:
|
/s/ Paulo Roberto Ferreira
|
|
|
|
|
Name:
|
Paulo Roberto Ferreira
|
|
|
|
|
Title:
|
Executive Director
|
|
|
|
|
Date:
|
22/02/19
|
|
[*****]
|
[*****]
|
[*****]
|
L10
|
[*****]
|
[*****]
|
R12
|
[*****]
|
[*****]
|
F5
|
[*****]
|
[*****]
|
C5
|
[*****]
|
[*****]
|
B10
|
[*****]
|
[*****]
|
D10
|
[*****]
|
[*****]
|
Bobcat
|
[*****]
|
[*****]
|
XC6
|
[*****]
|
[*****]
|
M60
|
[*****]
|
[*****]
|
Accessories & Services
|
[*****]
|
[*****]
|
1.
|
Issuance and Acceptance of Purchase Order.
To order the Xplore Products, Distributor shall place a purchase order via sending an email to
xpldistributors@zebra.com
. Each purchase order shall specify the bill-to address, ship-to address, quantity and description of each Xplore Product ordered, the unit price for each Xplore Product, the requested ship date, the preferred means of delivery, and tax-exempt certifications, if any. Orders received without this information or which contain any discrepancy may be returned to Distributor for completion or revision as applicable. Each purchase order placed by Distributor, as well as each invoice sent by Xplore, shall be governed by the terms of this Addendum and the Distribution Agreement and any additional or different terms within the purchase order or invoice shall have no effect. Each purchase order for the Xplore Products shall be subject to Xplore’s acceptance and, upon acceptance, Xplore shall confirm the purchase order and the Estimated Shipping Date with Distributor. Notwithstanding such acceptance, Xplore reserves the right where necessary to amend the Orders including without limitation part numbers, special pricing and Estimated Shipping Date, and may at its sole discretion require an amended Order from Distributor incorporating such changes. For the purposes of this Exhibit B, “Estimated Shipping Date” shall mean the estimated shipping date of an accepted purchase order.
|
2.
|
Purchase Order Rescheduling, Cancellation and Modification
. Distributor has the right to cancel, reschedule or modify all or any portion of a purchase order that has been accepted by Xplore at no cost to Distributor
only if
such cancellation or modification request is made within
[*****]
business days of PO acceptance or rescheduling request is made at least
[*****]
business days prior to the most current Estimated Shipping Date for that purchase order. Distributor has the right to change the destination of all or any portion of a purchase order that has been accepted by Xplore at no cost to Distributor
only if
such change in destination request is made at least
[*****]
business days prior to the most current Estimated Shipping Date for that purchase order. Except as set forth above, purchase orders are non-changeable and non-cancellable by Distributor, once accepted by Xplore.
|
3.
|
Product Allocation
. If for any reason, Xplore’s production is not on schedule, Xplore may, at its sole and absolute discretion, allocate available inventory to Distributor and make shipments in accordance with Zebra’s then current processes.
|
4.
|
Stock on Hand
. Distributor shall use commercially reasonable efforts to maintain thirty (30) days of stock in Distributor’s inventory to support sales. Xplore acknowledges that from time to time, Distributor’s inventory levels may fall below the thirty (30) days goal that is agreed upon by both Parties. If inventory levels fall below the thirty (30) day goal for more than sixty (60) consecutive days, Xplore, upon written notice to Distributor, shall replenish the stock to an amount agreed by both Parties.
|
5.
|
Product Return and Stock Rotation
.
|
1.
|
Shipping Terms
. Notwithstanding anything to the contrary contained in the Distribution Agreement, and unless notified by Xplore otherwise, shipping terms for Xplore Products will be Delivery Duty Paid (DDP) INCOTERMS® 2010, whereby Distributor’s price, includes all costs of delivery, insurance, import and / or export duties and tariffs. Such prices are exclusive of all federal, state, municipal or other government excise, sales, use, occupational or like taxes in force, and any such taxes shall be assumed and paid for by Distributor in addition to its payment for the Xplore Products. Title and risk of loss to Xplore Products shall pass to Distributor upon delivery to Distributor, as indicated in the Proof of Delivery (PoD) documents.
[*****]
|
1.
|
At Distributor’s request, Xplore may deliver Xplore Products directly to Program Members or their respective End Users on behalf of Distributor, and in such instances title and risk of loss will pass to Distributor upon delivery to the applicable recipients, as indicated on the PoD documents. Some exclusions may apply, including countries not served by Xplore shipping and importing methods, and/or countries where Xplore Products, are not certified for resale and/or use.
|
1.
|
Proof of Delivery (“POD”).
Xplore shall provide to Distributor, at no charge, a means for confirming proof of delivery for Xplore Product shipments when requested by Distributor. Xplore shall provide packing slips for all shipments.
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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, Chairmen and Chief Executive Officer (Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
May 9, 2019
|
/s/ Michael L. Baur
|
|
|
Michael L. Baur,
|
|
|
Chairmen and 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:
|
May 9, 2019
|
/s/ Gerald Lyons
|
|
|
Gerald Lyons
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|