ScanSource Posts Quarterly Profit, Cites Strong Video Surveillance Performance
In the fourth fiscal quarter of 2018, ScanSource reported 12% gross profit growth, and 11% non-GAAP operating income growth.
GREENVILLE, S.C. — ScanSource (Nasdaq: SCSC) on Tuesday reported a fiscal fourth-quarter profit of $10.4 million. Revenue for the quarter came in at $993.9 million compared to the Zacks Consensus Estimate of $974.19 million.
On a per-share basis, the global distributor of point-of-sale (POS), barcode, physical security, voice, data, networking and technology services reported net income of 40 cents.
Earnings, adjusted for non-recurring costs and amortization costs, were 77 cents per share, missing the Zacks Consensus Estimate of 78 cents per share. This compares to earnings of 68 cents per share a year ago.
For the fourth quarter, non-GAAP operating income was $30.8 million or 3.1% of net sales compared to $27.8 million or 3% in the prior year quarter. For the year, the company reported profit of $33.2 million, or $1.29 per share. Revenue was reported as $3.85 billion.
ScanSource has two reporting segments: Worldwide Barcode, Networking & Security, which includes POS Portal, and Worldwide Communications & Services, which includes Intelisys and Canpango.
The gross margin for the Worldwide Barcode, Networking & Security segment increased to 9.1%, which the company attributed to higher margin from its POS Portal acquisition in 2017.
Non-GAAP operating margin for the segment increased to 2.4%, reflecting the addition of higher margin from the POS Portal acquisition.
For the Worldwide Communications & Services segment, the gross margin remained relatively consistent at 16.5%. Non-GAAP operating margin decreased slightly to 4.6%, reflecting unfavorable performance for the company’s communications business in Europe.
“We delivered strong net sales growth across our business with year-over-year organic growth for both of our worldwide segments and for all of our geographic regions,” ScanSource CEO Mike Baur said during an earning’s call with analysts Tuesday.
Along with strong demand from mobile computing solutions across all geographies, Baur cited double-digit growth in video surveillance from opportunities to provide customized programs and offerings driven by the E-Rate federal funding program for schools and libraries.
“This business also included strong performance from our networking vendors, a business which has stabilized for us following vendor consolidations in recent years,” he said. “Our networking and security business in North America had a record sales quarter.”
ScanSource shares have increased 21% since the beginning of the year, according to Zacks.
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