ScanSource, Inc (SCSC) has reported a 7.38 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $14.82 million, or $0.58 a share in the quarter, compared with $16 million, or $0.57 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $17.47 million, or $0.68 a share compared with $18.89 million or $0.68 a share, a year ago.
Revenue during the quarter grew 7.09 percent to $932.57 million from $870.83 million in the previous year period. Gross margin for the quarter contracted 24 basis points over the previous year period to 9.82 percent. Total expenses were 97.55 percent of quarterly revenues, up from 97.19 percent for the same period last year. That has resulted in a contraction of 35 basis points in operating margin to 2.45 percent.
Operating income for the quarter was $22.88 million, compared with $24.44 million in the previous year period.
However, the adjusted operating income for the quarter stood at $26.70 million compared to $28.41 million in the prior year period. At the same time, adjusted operating margin contracted 40 basis points in the quarter to 2.86 percent from 3.26 percent in the last year period.
"We are pleased with our solid financial results for our first quarter," said Mike Baur, chief executive officer, ScanSource, Inc. "We achieved 7% net sales growth primarily from our businesses in North America. In addition, the acquisition of Intelisys, closed during the quarter, brings the benefits of a successful recurring revenue model and adds capabilities in the growing telecom and cloud services market."
For the second-quarter 2017, ScanSource, Inc expects revenue to be in the range of $930 million to $980 million. The company projects diluted earnings per share to be in the range of $0.47 to $0.53. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.67 to $0.73.
Working capital declines
ScanSource, Inc has witnessed a decline in the working capital over the last year. It stood at $623.96 million as at Sep. 30, 2016, down 7.50 percent or $50.63 million from $674.59 million on Sep. 30, 2015. Current ratio was at 1.91 as on Sep. 30, 2016, down from 2.07 on Sep. 30, 2015. Cash conversion cycle (CCC) has decreased to 32 days for the quarter from 66 days for the last year period. Days sales outstanding went down to 57 days for the quarter compared with 59 days for the same period last year.
Days inventory outstanding has decreased to 31 days for the quarter compared with 67 days for the previous year period. At the same time, days payable outstanding went down to 57 days for the quarter from 60 for the same period last year.
Debt increases substantially
ScanSource, Inc has witnessed an increase in total debt over the last one year. It stood at $166.14 million as on Sep. 30, 2016, up 75.87 percent or $71.67 million from $94.47 million on Sep. 30, 2015. Total debt was 9.53 percent of total assets as on Sep. 30, 2016, compared with 6.12 percent on Sep. 30, 2015. Debt to equity ratio was at 0.21 as on Sep. 30, 2016, up from 0.12 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 38.84 for the quarter from 86.98 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
