<PAGE>
Conformed
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
(Mark One)
{x} Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange
Act of 1934 for the Quarterly Period Ended December 31, 1999
or
{ } Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the transition period from ___________________ to
____________________
Commission file number 1-12842
ScanSource, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
South Carolina 57-0965380
- ----------------------------------- --------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporated or organization)
6 Logue Court, Suite G
Greenville, SC 29615
- ----------------------------------- --------------------------------------
(Address of principal executive (Zip Code)
offices)
(864) 288-2432
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
As of December 31, 1999, 5,530,611 shares of the registrant's common stock, no
par value, were outstanding.
<PAGE>
SCANSOURCE, INC.
INDEX
FORM 10-Q
December 31, 1999
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
--------
<S> <C>
Item 1. Consolidated Financial Statements (Unaudited)..................... 2
Condensed Consolidated Balance Sheets............................. 2
Condensed Consolidated Income Statements.......................... 4
Condensed Consolidated Statements of Cash Flows................... 5
Notes to Condensed Consolidated Financial Statements.............. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 8
Item 3. Quantitative and Qualitative Disclosures About Market
Risk........................................................... 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................................. 13
Item 2. Changes in Securities............................................. 13
Item 3. Defaults Upon Senior Securities................................... 13
Item 4. Submission of Matters to a Vote of Security-Holders............... 13
Item 5. Other Information................................................. 14
Item 6. Exhibits and Reports on Form 8-K.................................. 14
SIGNATURES........................................................................... 15
</TABLE>
1
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
SCANSOURCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1999 1999
------ ------
(Note 1) (Note 1)
(Unaudited)
Assets (In thousands)
------
<S> <C> <C>
Current assets:
Cash....................................................... $ 15,282 706
Receivables:
Trade, less allowance for doubtful accounts of
$5,002,000 at June 30, 1999 and
$6,625,000 at December 31, 1999 ...................... 42,774 43,023
Other ..................................................... 2,443 2,584
-------- --------
45,217 45,607
Inventories ............................................... 50,282 86,635
Prepaid expenses and other assets ......................... 464 548
Deferred income taxes ..................................... 5,197 7,914
-------- --------
Total current assets ................................. 116,442 141,410
Property and equipment, net ................................... 7,453 15,179
Intangible assets, net ........................................ 1,520 1,460
Other assets .................................................. 312 303
-------- --------
Total assets ......................................... $125,727 158,352
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
SCANSOURCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
<TABLE>
<CAPTION>
June 30, December 31,
Liabilities and Shareholders' Equity 1999 1999
------------------------------------ ---- -----
(Note 1) (Note 1)
(Unaudited)
(In thousands)
<S> <C> <C>
Current liabilities:
Current portion of long-term debt............................. $ 24 24
Trade accounts payable ....................................... 59,728 62,965
Accrued compensation ......................................... 1,147 860
Accrued expenses and other liabilities ....................... 3,252 4,589
Income taxes payable ......................................... 1,131 1,070
------- -------
Total current liabilities ................................ 65,282 69,508
Deferred income taxes ........................................ 70 96
Long-term debt ............................................... 1,673 1,662
Revolving line of credit ..................................... -- 22,168
------- -------
Total liabilities ..................................... 67,025 93,434
Shareholders' equity:
Preferred stock, no par value; 3,000,000 shares
authorized, none issued and outstanding ................. -- --
Common stock, no par value; 10,000,000 shares
authorized, 5,503,512 and 5,530,611 shares issued
and outstanding at June 30, 1999 and
December 31, 1999, respectively ......................... 40,161 40,771
Retained earnings ............................................ 18,541 24,147
------- -------
Total shareholders' equity .............................. 58,702 64,918
------- -------
Total liabilities and shareholders' equity............... $125,727 158,352
======= =======
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
SCANSOURCE, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
December 31, December 31,
1998 1999 1998 1999
---- ---- ---- ----
(In thousands except per share data)
<S> <C> <C> <C> <C>
Net sales .................................... $ 65,543 113,922 126,262 227,101
Cost of goods sold ........................... 57,931 100,707 111,664 202,866
-------- -------- -------- -------
Gross profit ............................ 7,612 13,215 14,598 24,235
Selling, general and administrative
expenses ............................... 4,854 8,411 9,313 15,092
Amortization of intangibles .................. 34 34 67 67
-------- -------- -------- -------
Total operating expenses .................... 4,888 8,445 9,380 15,159
-------- -------- -------- -------
Operating income ....................... 2,724 4,770 5,218 9,076
Other income (expense):
Interest income (expense), net ........ 18 (144) (22) (48)
Other income, net ....................... -- 6 -- 14
-------- -------- -------- -------
Total other income (expense) ........ 18 (138) (22) (34)
-------- -------- -------- -------
Income before income taxes ................... 2,742 4,632 5,196 9,042
Income taxes ..................... 1,015 1,760 1,923 3,436
-------- -------- -------- -------
Net income ................................... 1,727 2,872 3,273 5,606
======== ======== ======== =======
Basic EPS
Net income per share ................. $ .32 .52 .60 1.02
======== ======== ======== =======
Weighted average shares outstanding .. 5,464 5,531 5,448 5,521
======== ======== ======== =======
Diluted EPS
Net income per share................... .31 .48 .58 .95
======== ======== ======== =======
Weighted average shares outstanding.... 5,624 5,994 5,604 5,922
======== ======== ======== =======
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
SCANSOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
1998 1999
---- ----
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to cash $ 3,273 5,606
(used in) provided by operating activities:
Depreciation 516 935
Amortization of intangible assets 67 67
Deferred taxes -- (2,691)
Changes in operating assets and liabilities:
Receivables (7,148) (249)
Other receivables 225 (141)
Inventories (13,820) (36,353)
Prepaid expenses and other assets (38) (84)
Accounts payable 23,614 3,237
Accrued compensation 419 (287)
Accrued expenses and other liabilities 145 1,337
Income tax payable 90 (61)
Other noncurrent assets (144) 2
-------- --------
Net cash provided by (used in) operating activities 7,199 (28,682)
-------- --------
Cash flows from investing activities:
Capital expenditures, net (811) (1,671)
Purchase of building -- (6,990)
-------- --------
Net cash used in investing activities (811) (8,661)
-------- --------
Cash flows from financing activities:
(Payments) borrowings on line of credit (4,861) 22,168
Net proceeds from option exercises 403 610
Payments on building loan (11) (11)
-------- --------
Net cash (used in) provided by financing activities (4,469) 22,767
-------- --------
Increase (decrease) in cash 1,919 (14,576)
Cash at beginning of period 88 15,282
-------- --------
Cash at end of period $ 2,007 706
======== ========
</TABLE>
See notes to condensed consolidated financial statements
5
<PAGE>
SCANSOURCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The interim financial information included herein is unaudited. Certain
information and footnote disclosures normally included in the consolidated
financial statements have been condensed or omitted pursuant to the rules
and regulations of the Securities and Exchange Commission (SEC), although
the Company believes that the disclosures made are adequate to make the
information presented not misleading. These financial statements should be
read in conjunction with the financial statements and related notes
contained in the Company's annual report on Form 10-K for the period ended
June 30, 1999. Other than as indicated herein, there have been no
significant changes from the financial data published in that report. In
the opinion of management, such unaudited information reflects all
adjustments, consisting only of normal recurring accruals and other
adjustments as disclosed herein, necessary for a fair presentation of the
unaudited information.
Results for interim periods are not necessarily indicative of results
expected for the full year, or for any subsequent period.
The condensed consolidated balance sheet for June 30, 1999 has been derived
from the audited consolidated balance sheet for that date.
(2) Significant Accounting Policies
Revenue Recognition - The Company records revenue when products are
shipped.
Inventories - Inventories are stated at the lower of cost (first-in,
first-out method) or market.
Net Income Per Share - Basic net income per share is computed by dividing
net income by the weighted average number of common shares outstanding.
Diluted net income per share is computed by dividing net income by the
weighted average number of common and potential common shares outstanding.
Diluted weighted average common and potential common shares include common
shares and stock options using the treasury stock method. Basic and diluted
weighted average shares differed only by the effect of dilutive stock
options. There were no differences between the net income used to calculate
basic and diluted net income per share for the six months ended December
31, 1998 and 1999.
(3) Line of Credit
The Company has a line of credit agreement with a bank extending to
October 31, 2001 with a borrowing limit of $35 million, based upon 80% of
eligible accounts receivable and 40% of eligible inventory at the 30 day
LIBOR rate of interest plus a rate varying from 1.50% to 2.00% tied to the
Company's debt-to-net worth ratio ranging from .75:1 to 2:1. The revolving
credit facility
6
<PAGE>
is collateralized by accounts receivable and eligible inventory. The
agreement contains certain financial covenants including minimum net worth
and capital expenditure requirements and a maximum debt to tangible net
worth ratio. The average interest rate during the quarter was 7.95% and the
outstanding balance on the line of credit was $22.2 million on a loan base
which exceeded $35 million, leaving $12.8 million available at December 31,
1999. The Company was in compliance with the various covenants at December
31, 1999.
(4) Segment Information
SFAS 131 requires the use of the management approach to determine segment
information to be reported. The management approach is based on the way
management organizes the enterprise to assess performance and make
operating decisions regarding the allocation of resources. This statement
also requires companies that have a single reportable segment to disclose
information about products and services, geographic areas, and information
about major customers.
The Company operates as a single reportable segment as a specialty products
distributor in North America, with Canadian operations that are immaterial.
The Company ships its products from a single warehouse via UPS and FedEx to
technology resellers, who in turn sell directly to end-users. The Company's
products are specialty technology equipment items.
The Company's 16,000 product offerings may be divided into primary
categories: i) bar code and point of sale equipment and ii) business
telephones and computer telephony integration devices. The Company sells to
more than 10,000 resellers and integrators of technology products, who are
geographically disbursed over North America in a pattern that mirrors
population concentration.
7
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Net Sales. Net sales for the quarter ended December 31, 1999 increased
73.8% to $113.9 million from $65.5 million for the comparable prior year
quarter. Net sales increased 79.9% to $227.1 million for the six months ended
December 31, 1999 from $126.3 million for the comparable prior year period.
Growth of net sales resulted primarily from additions to the Company's sales
force, competitive product pricing, selective expansion of its product line, and
increased marketing efforts to specialty technology resellers.
Gross Profit. Gross profit for the quarter ended December 31, 1999
increased 73.6% to $13.2 million from $7.6 million for the comparable prior year
quarter. Gross profit increased 66.0% to $24.2 million for the six months ended
December 31, 1999 from $14.6 million for the comparable prior year period. Gross
profit as a percentage of sales was 11.6% and 10.7%, respectively, for the
quarter and six months ended December 31, 1999, compared to 11.6% for both of
the comparable prior year periods. The decrease in gross profit as a percentage
of sales is the result of a change in the mix of sales to more lower-margin
products and the volume discounts provided to resellers on large orders.
Operating Expenses. Operating expenses, which include selling, general
and administrative expenses and amortization, for the quarter ended December 31,
1999 increased 72.8% to $8.4 million compared to $4.9 million for the comparable
prior year period. Operating expenses for the six months ended December 31, 1999
increased 61.6% to $15.2 million from $9.4 million for the comparable prior year
period. Operating expenses as a percentage of sales were 7.4% and 6.7% for the
quarter and six months ended December 31, 1999, compared to 7.4% and 7.4%,
respectively, for the comparable prior year periods. Generally, lower gross
margin sales require the Company to provide fewer value-added services causing a
corresponding decrease in operating expenses. The general and administrative
portion of operating expenses also decreased as a percentage of sales due to
efficiencies gained through increased sales volume.
Operating Income. Operating income for the quarter ended December 31,
1999 increased 75.1% to $4.8 million from $2.7 million for the same period in
1998, driven by the improvement in gross profit as described above. Operating
income increased 73.9% to $9.1 million for the six months ended December 31,
1999 from $5.2 million for the comparable prior year period. Operating income as
a percentage of sales was 4.3% and 4.0%, respectively, for the quarter and six
months ended December 31, 1999, compared to 4.2% and 4.1%, respectively, for the
comparable prior year periods.
Other Income (Expense). Total other income (expense) net consists of
interest income (expense), net, and other income, net. Net interest expense for
the quarter ended December 31, 1999 was $144,000 resulting primarily from
interest expense on the line of credit and building loan of $180,000 offset by
interest income of $36,000 from invested cash. Net interest income for the
8
<PAGE>
quarter ended December 31, 1998 was $18,000 resulting primarily from interest
from invested cash.
Income Taxes. Tax expense was provided at an effective rate of 38% and
37%, respectively, for the periods ended December 31, 1999 and 1998,
respectively, and represented the state and federal tax expected to be due after
annualizing income to the fiscal year end.
Net Income. Improved operating income caused net income to increase
66.3% to $2.9 million for the quarter ended December 31, 1999 from $1.7 million
for the year-earlier quarter. Net income for the six months ended December 31,
1999 increased 71.3% to $5.6 million from $3.3 million for the comparable prior
year period. Net income as a percentage of sales was 2.5% for both the quarter
and six months ended December 31, 1999 compared to 2.6% for both of the
comparable prior year periods.
Liquidity and Capital Resources
The Company's primary sources of liquidity are results of operations,
borrowings under its revolving credit facility, and proceeds from the sales of
securities.
The Company has a line of credit agreement with a bank extending to
October 31, 2001 with a borrowing limit to $35.0 million at an interest rate
equal to the 30 day LIBOR rate plus a rate varying from 1.50% to 2.00% tied to
the Company's debt-to-net worth ratio ranging from .75:1 to 2:1. The borrowing
base available under the credit facility is limited to 80% of eligible accounts
receivable and 40% of eligible inventory. The outstanding balance on the line of
credit was $22.2 million on a borrowing base which exceeded $35 million, leaving
$12.8 million available at December 31, 1999.
On December 1999, the Company purchased a new Memphis distribution
center for a purchase price of approximately $7 million of which $6.1 million
was allocated to the building and $900,000 was allocated to land. The Company
temporarily funded the purchase with borrowings from the line of credit while a
traditional real estate loan is being negotiated.
For the six months ended December 31, 1999 net cash of $28.7 million
was used in operating activities compared to $7.2 million provided by operations
for the six months ended December 31, 1998. Cash used in operations in 1999 was
primarily from an increase in inventory partially offset by growth in trade
payables. Cash provided by operations in 1998 was primarily from an increase in
accounts payable which exceeded the amount needed to fund increases in
receivables and inventory.
Cash used in investing activities of over $8.7 million for the six
months ended December 31, 1999 included $1.7 million for capital expenditures
and $7.0 million for the land and building purchase. Cash used in investing
activities of $811,000 for the six months ended December 31, 1998 was for
capital expenditures.
Cash provided by financing activities for the six months ended December
31, 1999 was $22.8 million, primarily from borrowings on the line of credit.
Cash used in financing activities for the six months ended December 31, 1998 was
$4.5 million, primarily from payments on the line of credit.
The Company's current ratios at December 31, 1999 and at June 30, 1999
were 2.03 and 1.78, respectively.
9
<PAGE>
Year 2000
Introduction. During the years leading up to the Year 2000 ("Y2K"), an
important business issue relating to the Company arose over the concern that
many computer systems, software and devices used either directly by the Company
or indirectly by the Company's vendors and customers would fail to properly
handle dates after 1999. This issue was caused by the practice of storing the
year as the last two digits, and assuming the first two digits as "19" (i.e.,
the number "99" for the year "1999"). Systems, software and devices that do not
adequately address Y2K could cause an interruption of services. The following
outlines the Company's approach to the Y2K issue.
State of Readiness. With the assistance of an outside consultant, the
Company formed a Y2K Project Team to oversee the Company's Y2K readiness
activities in the information technology (IT) and non-IT areas, assess Y2K risks
in connection with third-party relationships and develop contingency plans. The
Y2K Project Team conducted a review of the Company's computer systems, including
its primary business software, and concluded that such computer systems and
software were and are Y2K compliant. The absence of system failures or other Y2K
problems in both IT and non-IT areas following January 1, 2000 is consistent
with the conclusion of the Y2K Project Team. The Y2K Project Team has the
involvement of members of senior management, who have kept the Board of
Directors advised as to all developments and progress.
IT Systems. Since early 1996, ScanSource, in support of its long-term
plans, has significantly upgraded and continues to upgrade its IT and
communication systems. These upgrades include: enterprise-wide application
system, a Digital Alpha Server, personal computers (PCs), PC software
(standardized on Windows NT, Windows 9x, Microsoft Office Suite and Lotus
Notes), local area networks (LAN's), LAN software (Novell NetWare, Windows NT),
wide area networks (WAN's) and network integration of advanced fax, printer, and
copier systems. The Company tested its enterprise-wide application system and
PC's for Y2K compliance and obtained certification from the manufacturers of the
equipment and systems not included in the tests. As a result, ScanSource
believes its IT and voice and data communication systems are Y2K compliant.
Non-IT Systems. ScanSource assessed the Y2K readiness of non-IT systems
such as intelligent office equipment used in a stand-alone mode including fax
machines, copiers and printers by obtaining certification from manufacturers
that these products would not be impacted by the Y2K date transition or would
otherwise continue to operate on and after January 1, 2000, just as they did
prior to such date. To date, the Company is not aware of the failure of any of
these non-IT systems as a result of Y2K problems.
Third Party Interface. The Company also surveyed and considered the
readiness of significant vendors and resellers with respect to their progress in
identifying and addressing Y2K issues. Substantially all vendors and resellers
indicated to the Company an expectation to be Y2K compliant. Disruptions in the
computer systems of the Company's vendors could impair the ability of the
Company to obtain necessary products or provide services to its customers.
Management has further addressed the issues of non-compliant and/or
non-responding vendors in its contingency and inventory planning. To date, the
Company is not aware of the failures of any significant vendors and resellers to
properly address Y2K issues.
Contingency Planning and Risks. The Y2K Project Team developed contingency
plans to address disruptions in the Company's business functions as a result of
Y2K issues and various other
10
<PAGE>
potential business interruptions. The Company's contingency plan addresses
alternative providers and processes to deal with business interruptions that may
be caused by internal system or third party failure to be Y2K ready, to the
extent it is possible. Nevertheless, evidence of IT and non-IT system
performance in the systems of the Company and its significant vendors and
resellers following January 1, 2000 indicates that most of its areas of exposure
to system malfunctions associated with the year 2000 have been properly
addressed.
There can be no assurance that the Company's systems have avoided all Y2K
problems, that its efforts have identified all such problems in its own computer
systems or those of its vendors or resellers in advance of their occurrence, or
that the Company will be able to successfully remedy any problems that may yet
be discovered. The Company's operating results could be materially adversely
affected if the Company were to be held responsible for the failure of any
products sold by it to be Y2K ready, despite the Company's disclaimer of product
warranties and the limitation of liability contained in sales terms and
conditions. The Company continues to review potential or possible causes of loss
and institute plans for the mitigation of the same. In addition, the purchasing
patterns of existing and potential customers may still be affected by Y2K
problems, which could cause fluctuations in the Company's sales volumes.
Maintenance or modification costs have been and will continue to be expensed as
incurred.
Products. The Company has informed its active customers by mail and all
customers by Internet web postings that it does not make any representations or
warranties that the products it distributes are or will be Y2K ready or
compliant. The Company has assisted its customers by making it easy for them to
learn about product readiness directly from manufacturers by publicizing the
manufacturer's web sites and telephone numbers.
Costs of Project. Expenses of the Company's efforts to identify and address
potential Y2K problems have not exceeded $100,000 (excluding costs of systems
upgrades that would normally have been made on a similar timetable). However,
the expenses or liabilities to which the Company may become subject as a result
of any such problems that may arise could have a material adverse effect on the
Company's business, financial condition and results of operations.
11
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to changes in financial market conditions in the
normal course of its business as a result of its selective use of bank debt as
well as transacting in Canadian currency in connection with its Canadian
operations.
The Company is exposed to changes in interest rates primarily as a
result of its borrowing activities, which includes a revolving credit facility
with a bank used to maintain liquidity and fund the Company's business
operations. The nature and amount of the Company's debt may vary as a result of
future business requirements, market conditions and other factors. The
definitive extent of the Company's interest rate risk is not quantifiable or
predictable because of the variability of future interest rates and business
financing requirements, but the Company does not believe such risk is material.
The Company does not currently use derivative instruments to adjust the
Company's interest rate risk profile.
The table below presents principal amounts and related weighted average
rates by year of maturity for the Company's debt obligations at December 31,
1999:
<TABLE>
<CAPTION>
(In thousands) 2000 2001 2002 2003 Thereafter Total Fair Value
---- ---- ---- ---- ---------- ----- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Long-term debt 15 26 29 31 1,587 1,687 1,920
Average interest
rate (fixed) 9.19% 9.19% 9.19% 9.19% 9.19% 9.19% 9.19%
</TABLE>
The Company is exposed to changes in foreign exchange rates in
connection with its Canadian operations. It is the Company's policy to enter
into foreign currency transactions only to the extent considered necessary to
support its Canadian operations. The amount of the Company's cash deposits
denominated in Canadian currency has not been, and is not expected to be,
material. Furthermore, the Company has no capital expenditure or other purchase
commitments denominated in foreign currency. The Company does not utilize
forward exchange contracts, currency options or other traditional hedging
vehicles to adjust the Company's foreign exchange rate risk profile. The Company
does not enter into foreign currency transactions for speculative purposes.
The Company does not utilize financial instruments for trading or other
speculative purposes, nor does it utilize leveraged financial instruments. On
the basis of the fair value of the Company's market sensitive instruments at
December 31, 1999, the Company does not consider the potential near-term losses
in future earnings, fair values and cash flows from reasonable possible
near-term changes in interest rates and exchange rates to be material.
12
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable
Item 2. Changes in Securities.
Not applicable
Item 3. Defaults Upon Senior Securities.
Not applicable
Item 4. Submission of Matters to a Vote of Security-Holders.
(a) The Company's annual meeting of shareholders was held on
December 2, 1999.
(b) The four directors listed in subsection (c) below were elected at
the meeting. The Company has no other directors whose term of
office continued after the meeting.
(c) (i) Election of Directors
Number of Shares
----------------
Nominees For Withheld
-------- --- --------
Michael L. Baur 4,519,940 123,291
Steven H. Owings 4,518,940 124,291
Steven R. Fischer 4,518,940 124,291
James G. Foody 4,520,640 122,591
(ii) Proposal to ratify the amendment to the Company's 1997 Stock
Incentive Plan
Number of Shares
----------------
For 1,697,357
Against 1,653,323
Abstain 13,762
Not voted 1,278,789
(iii) Proposal to ratify the adoption of the September 30, 1999
Non-Employee Director Stock Option Plan.
Number of Shares
----------------
For 3,137,994
Against 211,706
Abstain 14,742
Not voted 1,278,789
13
<PAGE>
(iv) Proposal to ratify the appointment of KPMG LLP as the
Company's independent auditors for the fiscal year ending
June 30, 2000.
Number of Shares
----------------
For 4,640,170
Against 1,650
Abstain 1,411
Item 5. Other information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SCANSOURCE, INC.
/s/ Michael L. Baur
----------------------------------
MICHAEL L. BAUR
Chief Executive Officer
/s/ Jeffery A. Bryson
----------------------------------
JEFFERY A. BRYSON
Chief Financial Officer
Date: February 11, 2000
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET & INCOME STATEMENT FOR PERIOD ENDED 12/31/99.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 706
<SECURITIES> 0
<RECEIVABLES> 49,648
<ALLOWANCES> 6,625
<INVENTORY> 86,635
<CURRENT-ASSETS> 141,410
<PP&E> 18,766
<DEPRECIATION> 3,587
<TOTAL-ASSETS> 158,352
<CURRENT-LIABILITIES> 69,508
<BONDS> 0
0
0
<COMMON> 40,771
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 158,352
<SALES> 227,101
<TOTAL-REVENUES> 227,101
<CGS> 202,866
<TOTAL-COSTS> 15,159
<OTHER-EXPENSES> 67
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 9,042
<INCOME-TAX> 3,436
<INCOME-CONTINUING> 5,606
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,606
<EPS-BASIC> 1.02
<EPS-DILUTED> .95
</TABLE>
