Business Wire | Aug 24, 2021 04:06PM EDT

ScanSource Delivers Strong Fourth Quarter Sales and Profitability Growth

Aug. 24, 2021

GREENVILLE, S.C.--(BUSINESS WIRE)--Aug. 24, 2021--ScanSource, Inc. (NASDAQ: SCSC), a leading provider of technology products and solutions, today announced financial results for the fourth quarter and fiscal year ended June 30, 2021. All results in this release reflect continuing operations only unless otherwise noted.

Fourth Quarter Summary:

* Net sales: $852.7 million, up 34% year-over-year * Gross profit: $95.8 million, up 29% year-over-year * GAAP operating income of $23.3 million for a 2.73% operating income margin * Non-GAAP operating income of $28.4 million, up 245% year-over-year, for a 3.33% non-GAAP operating income margin * Net income from continuing operations of $20.7 million * GAAP diluted EPS of $0.80 per share; non-GAAP diluted EPS of $0.96 per share * Generated strong operating cash flow of $61.3 million for the quarter and $116.8 million for the fiscal year * Return on invested capital increased to 14.9% for the quarter

"Our employees delivered strong fourth quarter net sales and profitability growth with operational excellence across our business," said Mike Baur, Chairman and CEO, ScanSource, Inc. "Our momentum and execution strengthen our confidence in our hybrid distribution strategy accelerating our growth across hardware, software, connectivity, and cloud. ScanSource is uniquely positioned to enable the growth opportunities ahead for our channel partners and suppliers."

Quarterly Results

Net sales for the fourth quarter of fiscal year 2021 totaled $852.7 million, up 34.0% year-over-year, or 33.7% year-over-year for organic growth. This reflects broad-based growth across our technologies in both operating segments in all geographies.

For the fourth quarter of fiscal year 2021, operating income increased to $23.3 million from $(113.4) million for the prior-year quarter, which included goodwill and asset impairment charges of $120.5 million. Fourth quarter fiscal year 2021 non-GAAP operating income increased to $28.4 million for a 3.33% non-GAAP operating income margin, up from $8.2 million for the prior-year quarter.

On a GAAP basis, net income for the fourth quarter of fiscal year 2021 totaled $20.7 million, or $0.80 per diluted share, compared to net loss of $(108.9) million, or $(4.29) per diluted share, for the prior-year quarter. Fourth quarter non-GAAP net income totaled $24.5 million, or $0.96 per diluted share, which includes a $0.19 benefit from discrete tax items. These results compare to fourth quarter fiscal year 2020 non-GAAP net income of $4.9 million, or $0.19 per diluted share.

Full-Year Results

For fiscal year 2021, net sales increased 3.4% to $3.2 billion, or a 5.5% year-over-year increase on an organic basis. During the year, the Company saw continued progress in recovering from the sales impact of the COVID-19 pandemic. For the Intelisys business, fiscal year 2021 net sales increased 13.1% year-over-year. Fiscal year 2021 GAAP operating income increased to $61.5 million, and non-GAAP operating income increased to $93.1 million, up 18.0% year-over-year. In July 2020, the Company implemented a $30 million annualized expense reduction program to address the business impacts of the COVID-19 pandemic and prepare for the next phase of growth.

On a GAAP basis, net income for fiscal year 2021 totaled $45.4 million, or $1.78 per diluted share. Non-GAAP net income increased to $69.9 million, or $2.74 per diluted share, compared to $52.0 million, or $2.05 per diluted share, for the fiscal year 2020.

Share Repurchase Authorization

ScanSource also announced a new $100 million authorization by its Board of Directors to repurchase shares of the Company's common stock.

"In setting our capital allocation priorities, our top priority is reinvestment in the growth of our business and driving value creation for our shareholders," said Steve Jones, Chief Financial Officer, ScanSource, Inc. "Our repurchase authorization reflects our confidence in ScanSource's business and the strength of our long-term operating cash flow generation."

Repurchases may be made in the open market or through privately negotiated transactions, and ScanSource may enter into Rule 10b5-1 plans to facilitate repurchases. This share repurchase authorization does not obligate ScanSource to purchase any particular amount of common stock, and it may be suspended at any time at the Company's discretion. The authorization does not have any time limit.

Annual Financial Outlook for Fiscal Year 2022

The following statements are based on ScanSource's current expectation for the full fiscal year ended June 30, 2022.

FY22 Annual Outlook

Net sales growth, year-over-year At least 5.5%

Adjusted EBITDA (non-GAAP) At least $135 million

Adjusted EBITDA is a non-GAAP measure, which excludes estimates for amortization of intangible assets, depreciation expense, and non-cash share-based compensation expense (effective with the first quarter of fiscal year 2022). For comparison, fiscal year 2021 Adjusted EBITDA, excluding share-based compensation totaled $118 million. ScanSource's outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic investments, or other significant transactions that may be completed after the date hereof. These statements are forward-looking, and actual results may differ materially.

Webcast Details and CFO Commentary

At approximately 4:15 p.m. ET today, a CFO commentary, as a supplement to this press release and the Company's conference call, will be available on ScanSource's website, www.scansource.com (Investor Relations section). ScanSource will present additional information about its financial results in a conference call today, August 24, 2021, at 5:00 p.m. ET. A webcast of the call will be available for all interested parties and can be accessed at www.scansource.com (Investor Relations section). The webcast will be available for replay for 60 days.

Safe Harbor Statement

This press release contains "forward-looking" statements, including regarding the Company's FY22 outlook, capital allocation plans, growth opportunities and the impact of the COVID-19 pandemic, which involve risks and uncertainties. Any number of factors could cause actual results to differ materially from anticipated results, including, but not limited to, failure to hire and retain quality employees, risk to the Company's business from a cyber-security attack, the failure to manage and implement the Company's organic growth strategy, the impact of the COVID-19 pandemic on the Company's operations and financial condition and the potential prolonged economic weakness brought on by COVID-19, a failure of the Company's IT systems, a failure to acquire new businesses, changes in interest and exchange rates and regulatory regimes impacting the Company's international operations, credit risks involving the Company's larger customers and suppliers, loss of the Company's major customers, termination of the Company's relationship with key suppliers or a significant modification of the terms under which it operates with a key supplier, changes in the Company's operating strategy, and other factors set forth in the "Risk Factors" contained in the Company's annual report on Form 10-K for the year ended June 30, 2021, filed with the Securities and Exchange Commission. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Information

In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the Company also discloses certain non-GAAP financial measures, which are summarized below. Non-GAAP financial measures are used to understand and evaluate performance, including comparisons from period to period. Non-GAAP results exclude amortization of intangible assets related to acquisitions, change in fair value of contingent consideration, acquisition costs, restructuring costs and other non-GAAP adjustments.

Net sales on a constant currency basis, excluding acquisitions (organic growth) The Company discloses the percentage change in net sales excluding the translation impact from changes in foreign currency exchange rates between reporting periods and excluding the net sales from acquisitions prior to the first full year from the acquisition date. This measure enhances the comparability between periods to help analyze underlying trends on an organic basis.

Income Statement Non-GAAP Metrics: To evaluate current period performance on a more consistent basis with prior periods, the Company discloses non-GAAP net sales, non-GAAP gross profit, non-GAAP operating income, non-GAAP other expense, net, non-GAAP pre-tax income, non-GAAP net income and non-GAAP diluted earnings per share (non-GAAP diluted "EPS"). Non-GAAP results exclude amortization of intangible assets related to acquisitions, changes in fair value of contingent consideration, acquisition and divestiture costs, impairment charges, restructuring costs, and other non-GAAP adjustments. These year-over-year metrics include the translation impact of changes in foreign currency exchange rates. Non-GAAP metrics are useful in assessing and understanding the Company's operating performance, especially when comparing results with previous periods or forecasting performance for future periods.

Adjusted earnings before interest expense, income taxes, depreciation, and amortization ("Adjusted EBITDA"): Adjusted EBITDA starts with net income and adds back interest expense, income tax expense, depreciation expense, amortization of intangible assets, changes in fair value of contingent considerations, and other non-GAAP adjustments, including acquisition and divestiture costs, impairment charges, and restructuring costs. Effective with the first quarter of fiscal year 2022, non-cash share-based compensation expense will also be added back in calculating Adjusted EBITDA. Since Adjusted EBITDA excludes some non-cash costs of investing in our business and people, management believes that Adjusted EBITDA shows the profitability from our business operations more clearly.

Return on invested capital ("ROIC"): ROIC assists management in comparing the Company's performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operating performance. We believe the calculation of ROIC provides useful information to investors and is an additional relevant comparison of our performance. ROIC is calculated as Adjusted EBITDA over invested capital. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period. Management believes the calculation of ROIC provides useful information to investors and is an additional relevant comparison of the Company's performance during the year.

These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that the Company reports may not be comparable to similarly titled amounts reported by other companies. Analysis of results and outlook on a non-GAAP basis should be considered in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with GAAP. A reconciliation of the Company's non-GAAP financial information to GAAP is set forth in the Supplementary Information (Unaudited) below.

About ScanSource, Inc.

ScanSource, Inc. (NASDAQ: SCSC) is at the center of the technology solution delivery channel, connecting businesses and providing solutions for their complex needs. ScanSource sells through multiple, specialized routes-to-market with digital, physical and services offerings from the world's leading suppliers of point-of-sale (POS), payments, barcode, physical security, unified communications and collaboration, telecom and cloud services. ScanSource enables its sales partners to create, deliver and manage solutions for end-customers across almost every vertical market. Founded in 1992 and headquartered in Greenville, South Carolina, ScanSource was named one of the 2021 Best Places to Work in South Carolina and on FORTUNE magazine's 2021 List of World's Most Admired Companies. ScanSource ranks #655 on the Fortune 1000. For more information, visit www.scansource.com.

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands)

June 30, 2021 June 30, 2020*

Assets

Current assets:

Cash and cash equivalents $ 62,718 $ 29,485

Accounts receivable, less allowance of $19,341 atJune 30, 2021 568,984 443,185

and $21,906 at June 30, 2020

Inventories 470,081 454,885

Prepaid expenses and other current assets 117,860 94,681

Current assets held for sale - 181,231

Total current assets 1,219,643 1,203,467

Property and equipment, net 42,836 55,641

Goodwill 218,877 214,288

Identifiable intangible assets, net 104,860 121,547

Deferred income taxes 21,853 24,630

Other non-current assets 63,615 72,521

Total assets $ 1,671,684 $ 1,692,094

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable $ 634,805 $ 454,240

Accrued expenses and other current liabilities 87,790 76,686

Current portion of contingent consideration - 46,334

Income taxes payable 2,501 5,886

Current portion of long-term debt 7,843 7,839

Current liabilities held for sale - 128,022

Total current liabilities 732,939 719,007

Deferred income taxes 3,954 3,884

Long-term debt, net of current portion 135,331 143,175

Borrowings under revolving credit facility - 67,714

Other long-term liabilities 68,269 80,068

Total liabilities 940,493 1,013,848

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 sharesauthorized, 25,499,465 and 25,361,298 shares 71,253 63,765 issued and outstanding at June 30, 2021 and June30, 2020, respectively

Retained earnings 758,071 747,276

Accumulated other comprehensive loss (98,133) (132,795)

Total shareholders' equity 731,191 678,246

Total liabilities and shareholders' equity $ 1,671,684 $ 1,692,094

*Derived from audited financial statements.

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Income Statements (Unaudited)

(in thousands, except per share data)



Quarter ended June 30, Fiscal year ended June 30,

2021 2020 2021 2020

Net sales $ 852,694 $ 636,450 $ 3,150,806 $ 3,047,734

Cost of goods sold 756,916 562,303 2,800,090 2,692,165

Gross profit 95,778 74,147 350,716 355,569

Selling, generaland administrative 64,758 58,192 247,438 259,535 expenses

Depreciation 2,898 3,304 12,533 13,033 expense

Intangibleamortization 4,893 4,946 19,488 19,953 expense

Restructuring and (54) - 9,258 604 other charges

Impairment charges - 120,470 - 120,470

Change in fairvalue of contingent - 674 516 6,941 consideration

Operating income 23,283 (113,439) 61,483 (64,967) (loss)

Interest expense 1,643 2,497 6,929 12,224

Interest income (1,341) (3,199) (3,097) (5,826)

Other expense (65) 213 116 411 (income), net

Income before 23,046 (112,950) 57,535 (71,776) income taxes

Provision for 2,389 (4,091) 12,146 7,451 income taxes

Net income (loss)from continuing 20,657 (108,859) 45,389 (79,227) operations

Net income (loss)from discontinued 3,053 (108,403) (34,594) (113,427) operations

Net income (loss) $ 23,710 $ (217,262) $ 10,795 $ (192,654)

Per share data:



Net income (loss)from continuing $ 0.81 $ (4.29) $ 1.79 $ (3.12) operations percommon share, basic

Net income (loss)from discontinued 0.12 (4.28) (1.36) (4.47) operations percommon share, basic

Net income (loss)per common share, $ 0.93 $ (8.57) $ 0.42 $ (7.59) basic

Weighted-averageshares outstanding, 25,482 25,353 25,423 25,378 basic



Net income (loss)from continuingoperations per $ 0.80 $ (4.29) $ 1.78 $ (3.12) common share,diluted

Net income (loss)from discontinuedoperations per 0.12 (4.28) (1.36) (4.47) common share,diluted

Net income (loss)per common share, $ 0.92 $ (8.57) $ 0.42 $ (7.59) diluted

Weighted-averageshares outstanding, 25,664 25,353 25,518 25,378 diluted

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Quarter ended June 30,

Fiscal year ended June 30,

2021

2020

2021

2020

Cash flows from operating activities:

Net income (loss)

$

23,710

$

(217,262)

$

10,795

$

(192,654)

Net income (loss) from discontinued operations

3,053

(108,403)

(34,594)

(113,427)

Net income (loss) from continuing operations

20,657

(108,859)

45,389

(79,227)

Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations:

Depreciation and amortization

8,090

8,743

33,507

35,328

Amortization of debt issue costs

104

104

417

417

Provision for doubtful accounts

112

222

338

1,621

Share-based compensation

2,328

1,425

8,039

5,478

Impairment charges

-

120,470

-

120,470

Deferred income taxes

2,941

(10,714)

2,916

(12,193)

Change in fair value of contingent consideration

-

674

516

6,941

Contingent consideration payments excess

-

-

(5,457)

(3,050)

Finance lease interest

23

21

119

85

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

(50,204)

57,562

(118,859)

57,477

Inventories

(6,394)

93,623

(12,301)

86,177

Prepaid expenses and other assets

(17,111)

(2,903)

(18,753)

(13,880)

Other non-current assets

7,102

(12,534)

9,948

(13,563)

Accounts payable

105,511

(76,224)

175,120

(20,846)

Accrued expenses and other liabilities

(8,928)

(1,992)

(493)

11,239

Income taxes payable

(2,886)

4,334

(3,679)

(441)

Net cash provided by operating activities of continuing operations

61,345

73,952

116,767

182,033

Cash flows from investing activities of continuing operations:

Capital expenditures

(80)

188

(2,363)

(6,387)

Cash paid for business acquisitions, net of cash acquired

-

-

-

(48,921)

Cash received for business disposal

-

-

34,356

-

Net cash (used in) provided by investing activities of continuing operations

(80)

188

31,993

(55,308)

Cash flows from financing activities of continuing operations:

Borrowings on revolving credit, net of expenses

395,215

477,446

1,881,679

2,085,918

Repayments on revolving credit, net of expenses

(449,017)

(539,732)

(1,949,392)

(2,190,595)

Borrowings on long-term debt, net

(1,875)

(938)

(7,839)

(4,085)

Repayments of finance lease obligations

(320)

(1,105)

(1,294)

(1,765)

Contingent consideration payments

-

-

(41,393)

(35,482)

Exercise of stock options

12

-

451

754

Taxes paid on settlement of equity awards

-

-

(1,036)

(1,353)

Repurchase of common stock

-

-

-

(6,078)

Net cash used in financing activities of continuing operations

(55,985)

(64,329)

(118,824)

(152,686)

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited), continued

(in thousands)

Cash flows from discontinued operations:

Net cash flows provided by operating activities of discontinued operations

2,469

2,235

24,173

44,238

Net cash flows used in investing activities of discontinued operations

-

(35)

(58)

(77)

Net cash flows used in financing activities of discontinued operations

-

(10,663)

(29,494)

(3,921)

Net cash flows provided by (used in) discontinued operations

2,469

(8,463)

(5,379)

40,240

Effect of exchange rate changes on cash and cash equivalents

5,648

(1,489)

3,706

(3,642)

Increase (decrease) in cash and cash equivalents

13,397

(141)

28,263

10,637

Consolidated cash and cash equivalents at beginning of period

49,321

34,596

34,455

23,818

Consolidated cash and cash equivalents at end of period

62,718

34,455

62,718

34,455

Cash and cash equivalents of discontinued operations

-

-

-

4,970

Cash and cash equivalents of continuing operations

$

62,718

$

34,455

$

62,718

$

29,485

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Quarter ended June 30, Fiscal year ended June 30,

2021 2020 2021 2020

Cash flows fromoperating activities:

Net income (loss) $ 23,710 $ (217,262) $ 10,795 $ (192,654)

Net income (loss)from discontinued 3,053 (108,403) (34,594) (113,427) operations

Net income (loss)from continuing 20,657 (108,859) 45,389 (79,227) operations

Adjustments toreconcile netincome (loss) tonet cash provided by operatingactivities ofcontinuingoperations:

Depreciation and 8,090 8,743 33,507 35,328 amortization

Amortization of 104 104 417 417 debt issue costs

Provision for 112 222 338 1,621 doubtful accounts

Share-based 2,328 1,425 8,039 5,478 compensation

Impairment charges - 120,470 - 120,470

Deferred income 2,941 (10,714) 2,916 (12,193) taxes

Change in fairvalue of contingent - 674 516 6,941 consideration

Contingentconsideration - - (5,457) (3,050) payments excess

Finance lease 23 21 119 85 interest

Changes inoperating assetsand liabilities, net ofacquisitions:

Accounts receivable (50,204) 57,562 (118,859) 57,477

Inventories (6,394) 93,623 (12,301) 86,177

Prepaid expenses (17,111) (2,903) (18,753) (13,880) and other assets

Other non-current 7,102 (12,534) 9,948 (13,563) assets

Accounts payable 105,511 (76,224) 175,120 (20,846)

Accrued expensesand other (8,928) (1,992) (493) 11,239 liabilities

Income taxes (2,886) 4,334 (3,679) (441) payable

Net cash providedby operatingactivities of 61,345 73,952 116,767 182,033 continuingoperations

Cash flows frominvestingactivities of continuingoperations:

Capital (80) 188 (2,363) (6,387) expenditures

Cash paid forbusiness - - - (48,921) acquisitions, netof cash acquired

Cash received for - - 34,356 - business disposal

Net cash (used in)provided byinvesting (80) 188 31,993 (55,308) activities ofcontinuingoperations

Cash flows fromfinancingactivities of continuingoperations:

Borrowings onrevolving credit, 395,215 477,446 1,881,679 2,085,918 net of expenses

Repayments onrevolving credit, (449,017) (539,732) (1,949,392) (2,190,595) net of expenses

Borrowings on (1,875) (938) (7,839) (4,085) long-term debt, net

Repayments offinance lease (320) (1,105) (1,294) (1,765) obligations

Contingentconsideration - - (41,393) (35,482) payments

Exercise of stock 12 - 451 754 options

Taxes paid onsettlement of - - (1,036) (1,353) equity awards

Repurchase of - - - (6,078) common stock

Net cash used infinancingactivities of (55,985) (64,329) (118,824) (152,686) continuingoperations





ScanSource, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited), continued

(in thousands)



Cash flows fromdiscontinued operations:

Net cash flowsprovided byoperating 2,469 2,235 24,173 44,238 activities ofdiscontinuedoperations

Net cash flows usedin investingactivities of - (35) (58) (77) discontinuedoperations

Net cash flows usedin financingactivities of - (10,663) (29,494) (3,921) discontinuedoperations

Net cash flowsprovided by (used 2,469 (8,463) (5,379) 40,240 in) discontinuedoperations

Effect of exchangerate changes on 5,648 (1,489) 3,706 (3,642) cash and cashequivalents

Increase (decrease)in cash and cash 13,397 (141) 28,263 10,637 equivalents

Consolidated cashand cash 49,321 34,596 34,455 23,818 equivalents atbeginning of period

Consolidated cashand cash 62,718 34,455 62,718 34,455 equivalents at endof period

Cash and cashequivalents of - - - 4,970 discontinuedoperations

Cash and cashequivalents of $ 62,718 $ 34,455 $ 62,718 $ 29,485 continuingoperations

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

(in thousands, except percentages)

Non-GAAP Financial Information:

Quarter ended June 30,

Fiscal year ended June 30,

2021

2020

2021

2020

Return on invested capital ratio (ROIC), annualized (a)

14.9

%

4.0

%

11.8

%

7.5

%

Reconciliation of net income to EBITDA:

Net income (loss) from continuing operations (GAAP)

$

20,657

$

(108,859

)

$

45,389

$

(79,227

)

Plus: Interest expense

1,643

2,497

6,929

12,224

Plus: Income taxes

2,389

(4,091

)

12,146

7,451

Plus: Depreciation and amortization

8,090

8,743

33,507

35,328

EBITDA (non-GAAP)

32,779

(101,710

)

97,971

(24,224

)

Plus: Change in fair value of contingent consideration

-

674

516

6,941

Plus: Acquisition and divestiture costs(b)

246

1,311

2,376

4,000

Plus: Restructuring costs

(54

)

-

9,047

604

Plus: Impairment charges

-

120,470

-

120,470

Plus: Tax recovery

-

(8,424

)

-

(10,744

)

Adjusted EBITDA (numerator for ROIC) (non-GAAP)

$

32,971

$

12,321

$

109,910

$

97,047

Invested Capital Calculations:

Equity - beginning of the quarter (c)

$

690,575

$

897,678

$

678,246

$

914,129

Equity - end of the quarter (c)

731,191

678,246

731,191

678,246

Plus: Change in fair value of contingent consideration, net of tax

-

510

390

5,247

Plus: Acquisition and divestiture costs(b)

207

1,311

2,337

4,000

Plus: Restructuring, net

(40

)

-

6,840

449

Plus: Impact of discontinued operations, net

(3,053

)

108,403

34,594

113,427

Plus: Impairment charges, net

-

114,398

-

114,398

Plus: Tax recovery, net

-

(6,247

)

-

(8,001

)

Average equity

709,440

897,150

726,799

910,948

Average funded debt (d)

177,074

337,973

202,869

390,709

Invested capital (denominator for ROIC) (non-GAAP)

$

886,514

$

1,235,123

$

929,668

$

1,301,657

(a) The annualized EBITDA amount is divided by days in the quarter times 365 days per year, or 366 days for leap year. There were 91 days in the current and prior-year quarter.

(b) Acquisition and divestiture costs are generally nondeductible for tax purposes.

(c) In the quarter ending June 30, 2020, the Company recorded impairment charges of $120.5 million. Impairment charges, net of tax reduced equity by $114.4 million.

(d) Average funded debt, which includes both continuing and discontinued operations, is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt.

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

(in thousands, except percentages)



Non-GAAP Financial Information:

Quarter ended June 30, Fiscal year ended June 30,

2021 2020 2021 2020

Return on investedcapital ratio (ROIC), 14.9 % 4.0 % 11.8 % 7.5 %annualized ^(a)



Reconciliation of net income to EBITDA:

Net income (loss)from continuing $ 20,657 $ (108,859 ) $ 45,389 $ (79,227 )operations (GAAP)

Plus: Interest 1,643 2,497 6,929 12,224 expense

Plus: Income taxes 2,389 (4,091 ) 12,146 7,451

Plus: Depreciation 8,090 8,743 33,507 35,328 and amortization

EBITDA (non-GAAP) 32,779 (101,710 ) 97,971 (24,224 )

Plus: Change in fairvalue of contingent - 674 516 6,941 consideration

Plus: Acquisition and 246 1,311 2,376 4,000 divestiture costs^(b)

Plus: Restructuring (54 ) - 9,047 604 costs

Plus: Impairment - 120,470 - 120,470 charges

Plus: Tax recovery - (8,424 ) - (10,744 )

Adjusted EBITDA(numerator for ROIC) $ 32,971 $ 12,321 $ 109,910 $ 97,047 (non-GAAP)



Invested Capital Calculations:

Equity - beginning of $ 690,575 $ 897,678 $ 678,246 $ 914,129 the quarter ^(c)

Equity - end of the 731,191 678,246 731,191 678,246 quarter ^(c)

Plus: Change in fairvalue of contingent - 510 390 5,247 consideration, net oftax

Plus: Acquisition and 207 1,311 2,337 4,000 divestiture costs^(b)

Plus: Restructuring, (40 ) - 6,840 449 net

Plus: Impact ofdiscontinued (3,053 ) 108,403 34,594 113,427 operations, net

Plus: Impairment - 114,398 - 114,398 charges, net

Plus: Tax recovery, - (6,247 ) - (8,001 )net

Average equity 709,440 897,150 726,799 910,948

Average funded debt ^ 177,074 337,973 202,869 390,709 (d)

Invested capital(denominator for $ 886,514 $ 1,235,123 $ 929,668 $ 1,301,657 ROIC) (non-GAAP)



(a) The annualized EBITDA amount is divided by days in the quarter times 365days per year, or 366 days for leap year. There were 91 days in the current andprior-year quarter.

(b) Acquisition and divestiture costs are generally nondeductible for taxpurposes.

(c) In the quarter ending June 30, 2020, the Company recorded impairmentcharges of $120.5 million. Impairment charges, net of tax reduced equity by$114.4 million.

(d) Average funded debt, which includes both continuing and discontinuedoperations, is calculated as the average daily amounts outstanding onshort-term and long-term interest-bearing debt.

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

Net Sales by Segment:

Quarter ended June 30,

2021

2020

% Change

Worldwide Barcode, Networking & Security:

(in thousands)

Net sales, reported

$

597,943

$

447,812

33.5

%

Foreign exchange impact (a)

(447)

-

Non-GAAP net sales, constant currency

$

597,496

$

447,812

33.4

%

Worldwide Communications & Services:

Net sales, reported

$

254,751

$

188,638

35.0

%

Foreign exchange impact (a)

(1,224)

-

Non-GAAP net sales, constant currency

$

253,527

$

188,638

34.4

%

Consolidated:

Net sales, reported

$

852,694

$

636,450

34.0

%

Foreign exchange impact (a)

(1,671)

-

Non-GAAP net sales, constant currency

$

851,023

$

636,450

33.7

%

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended June 30, 2021 into U.S. dollars using the average foreign exchange rates for the quarter ended June 30, 2020.

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)



Net Sales by Segment:

Quarter ended June 30,

2021 2020 % Change

Worldwide Barcode, Networking & (in thousands) Security:

Net sales, reported $ 597,943 $ 447,812 33.5 %

Foreign exchange impact ^(a) (447) -

Non-GAAP net sales, constant currency $ 597,496 $ 447,812 33.4 %



Worldwide Communications & Services:

Net sales, reported $ 254,751 $ 188,638 35.0 %

Foreign exchange impact ^(a) (1,224) -

Non-GAAP net sales, constant currency $ 253,527 $ 188,638 34.4 %



Consolidated:

Net sales, reported $ 852,694 $ 636,450 34.0 %

Foreign exchange impact ^(a) (1,671) -

Non-GAAP net sales, constant currency $ 851,023 $ 636,450 33.7 %



^(a) Year-over-year net sales growth rate excluding the translation impact ofchanges in foreign currency exchange rates. Calculated by translating the netsales for the quarter ended June 30, 2021 into U.S. dollars using the averageforeign exchange rates for the quarter ended June 30, 2020.

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

Net Sales by Segment:

Fiscal year ended June 30,

2021

2020

% Change

Worldwide Barcode, Networking & Security:

(in thousands)

Net sales, reported

$

2,175,141

$

2,093,217

3.9

%

Foreign exchange impact (a)

19,311

-

Non-GAAP net sales, constant currency

$

2,194,452

$

2,093,217

4.8

%

Worldwide Communications & Services:

Net sales, reported

$

975,665

$

954,517

2.2

%

Foreign exchange impact (a)

46,470

-

Non-GAAP net sales, constant currency

$

1,022,135

$

954,517

7.1

%

Consolidated:

Net sales, reported

$

3,150,806

$

3,047,734

3.4

%

Foreign exchange impact (a)

65,781

-

Non-GAAP net sales, constant currency

$

3,216,587

$

3,047,734

5.5

%

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the fiscal year ended June 30, 2021 into U.S. dollars using the average foreign exchange rates for the fiscal year ended June 30, 2020.



ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)



Net Sales by Segment:

Fiscal year ended June 30,

2021 2020 % Change

Worldwide Barcode, Networking & (in thousands) Security:

Net sales, reported $ 2,175,141 $ 2,093,217 3.9 %

Foreign exchange impact ^(a) 19,311 -

Non-GAAP net sales, constant currency $ 2,194,452 $ 2,093,217 4.8 %



Worldwide Communications & Services:

Net sales, reported $ 975,665 $ 954,517 2.2 %

Foreign exchange impact ^(a) 46,470 -

Non-GAAP net sales, constant currency $ 1,022,135 $ 954,517 7.1 %



Consolidated:

Net sales, reported $ 3,150,806 $ 3,047,734 3.4 %

Foreign exchange impact ^(a) 65,781 -

Non-GAAP net sales, constant currency $ 3,216,587 $ 3,047,734 5.5 %



^(a) Year-over-year net sales growth rate excluding the translation impact ofchanges in foreign currency exchange rates. Calculated by translating the netsales for the fiscal year ended June 30, 2021 into U.S. dollars using theaverage foreign exchange rates for the fiscal year ended June 30, 2020.

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

Net Sales by Geography:

Quarter ended June 30,

2021

2020

% Change

United States and Canada:

(in thousands)

Net sales, as reported

$

771,403

$

581,619

32.6

%

International:

Net sales, reported

$

81,291

$

54,831

48.3

%

Foreign exchange impact(a)

(1,671)

-

Non-GAAP net sales, constant currency

$

79,620

$

54,831

45.2

%

Consolidated:

Net sales, reported

$

852,694

$

636,450

34.0

%

Foreign exchange impact(a)

(1,671)

-

Non-GAAP net sales, constant currency

$

851,023

$

636,450

33.7

%

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended June 30, 2021 into U.S. dollars using the average foreign exchange rates for the quarter ended June 30, 2020.

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)



Net Sales by Geography:

Quarter ended June 30,

2021 2020 % Change

United States and Canada: (in thousands)

Net sales, as reported $ 771,403 $ 581,619 32.6 %



International:

Net sales, reported $ 81,291 $ 54,831 48.3 %

Foreign exchange impact^(a) (1,671) -

Non-GAAP net sales, constant currency $ 79,620 $ 54,831 45.2 %



Consolidated:

Net sales, reported $ 852,694 $ 636,450 34.0 %

Foreign exchange impact^(a) (1,671) -

Non-GAAP net sales, constant currency $ 851,023 $ 636,450 33.7 %



^(a) Year-over-year net sales growth rate excluding the translation impact ofchanges in foreign currency exchange rates. Calculated by translating the netsales for the quarter ended June 30, 2021 into U.S. dollars using the averageforeign exchange rates for the quarter ended June 30, 2020.

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

Net Sales by Geography:

Fiscal year ended June 30,

2021

2020

% Change

United States and Canada:

(in thousands)

Net sales, as reported

$

2,840,731

$

2,755,134

3.1

%

International:

Net sales, reported

$

310,075

$

292,600

6.0

%

Foreign exchange impact(a)

65,781

-

Non-GAAP net sales, constant currency

$

375,856

$

292,600

28.5

%

Consolidated:

Net sales, reported

$

3,150,806

$

3,047,734

3.4

%

Foreign exchange impact(a)

65,781

-

Non-GAAP net sales, constant currency

$

3,216,587

$

3,047,734

5.5

%

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the fiscal year ended June 30, 2021 into U.S. dollars using the average foreign exchange rates for the fiscal year ended June 30, 2020.



ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)



Net Sales by Geography:

Fiscal year ended June 30,

2021 2020 % Change

United States and Canada: (in thousands)

Net sales, as reported $ 2,840,731 $ 2,755,134 3.1 %



International:

Net sales, reported $ 310,075 $ 292,600 6.0 %

Foreign exchange impact^(a) 65,781 -

Non-GAAP net sales, constant currency $ 375,856 $ 292,600 28.5 %



Consolidated:

Net sales, reported $ 3,150,806 $ 3,047,734 3.4 %

Foreign exchange impact^(a) 65,781 -

Non-GAAP net sales, constant currency $ 3,216,587 $ 3,047,734 5.5 %



(a) Year-over-year net sales growth rate excluding the translation impact ofchanges in foreign currency exchange rates. Calculated by translating the netsales for the fiscal year ended June 30, 2021 into U.S. dollars using theaverage foreign exchange rates for the fiscal year ended June 30, 2020.

Quarter ended June 30, 2021

GAAP Measure

Intangible amortization expense

Change in fair value of contingent consideration

Acquisition, divestiture, and restructuring costs(a)

Tax recovery, net

Impairment charges

Non-GAAP measure

(in thousands, except per share data)

Net sales

$

852,694

$

-

$

-

$

-

$

-

$

-

$

852,694

Gross profit

95,778

-

-

-

-

-

95,778

Operating income

23,283

4,893

-

192

-

-

28,368

Other expense, net

237

-

-

-

-

-

237

Pre-tax income

23,046

4,893

-

192

-

-

28,131

Net income from continuing operations

20,657

3,698

-

167

-

-

24,522

Diluted EPS from continuing operations

$

0.80

$

0.14

$

-

$

0.01

$

-

$

-

$

0.96

(a) Acquisition and divestiture costs totaled $0.2 million for the quarter ended June 30, 2021 and are generally nondeductible for tax purposes. Restructuring costs totaled $(0.1) million for the quarter ended June 30, 2021.

Quarter ended June 30, 2020

GAAP Measure

Intangible amortization expense

Change in fair value of contingent consideration

Acquisition, divestiture, and restructuring costs(a)

Tax recovery, net

Impairment charges

Non-GAAP measure

(in thousands, except per share data)

Net sales

$

636,450

$

-

$

-

$

-

$

-

$

-

$

636,450

Gross profit

74,147

-

-

-

-

-

74,147

Operating (loss) income

(113,439)

4,946

674

1,311

(5,743)

120,470

8,219

Other expense, net

(489)

-

-

-

2,681

-

2,192

Pre-tax (loss) income

(112,950)

4,946

674

1,311

(8,424)

120,470

6,027

Net (loss) income from continuing operations

(108,859)

3,744

510

1,311

(6,247)

114,398

4,857

Diluted EPS from continuing operations

$

(4.29)

$

0.15

$

0.02

$

0.05

$

(0.25)

$

4.51

$

0.19

(a) Acquisition and divestiture costs totaled xx for the quarter ended June 30, 2020 and are generally nondeductible for tax purposes.

Quarter ended June 30, 2021

Change in Acquisition, GAAP Intangible fair value of divestiture, Tax Impairment Non-GAAP Measure amortization contingent and recovery, charges measure expense consideration restructuring net costs(a)

(in thousands, except per share data)

Net sales $ 852,694 $ - $ - $ - $ - $ - $ 852,694

Gross 95,778 - - - - - 95,778 profit

Operating 23,283 4,893 - 192 - - 28,368 income

Otherexpense, 237 - - - - - 237 net

Pre-tax 23,046 4,893 - 192 - - 28,131 income

Net incomefrom 20,657 3,698 - 167 - - 24,522 continuingoperations

DilutedEPS from $ 0.80 $ 0.14 $ - $ 0.01 $ - $ - $ 0.96 continuingoperations



(a) Acquisition and divestiture costs totaled $0.2 million for the quarterended June 30, 2021 and are generally nondeductible for tax purposes.Restructuring costs totaled $(0.1) million for the quarter ended June 30, 2021.



Quarter ended June 30, 2020

Change in Acquisition, GAAP Intangible fair value of divestiture, Tax Impairment Non-GAAP Measure amortization contingent and recovery, charges measure expense consideration restructuring net costs(a)

(in thousands, except per share data)

Net sales $ 636,450 $ - $ - $ - $ - $ - $ 636,450

Gross 74,147 - - - - - 74,147 profit

Operating(loss) (113,439) 4,946 674 1,311 (5,743) 120,470 8,219 income

Otherexpense, (489) - - - 2,681 - 2,192 net

Pre-tax(loss) (112,950) 4,946 674 1,311 (8,424) 120,470 6,027 income

Net (loss)incomefrom (108,859) 3,744 510 1,311 (6,247) 114,398 4,857 continuingoperations

DilutedEPS from $ (4.29) $ 0.15 $ 0.02 $ 0.05 $ (0.25) $ 4.51 $ 0.19 continuingoperations



(a) Acquisition and divestiture costs totaled xx for the quarter ended June 30,2020 and are generally nondeductible for tax purposes.

Year ended June 30, 2021

Reported GAAP Measure

Intangible amortization expense

Change in fair value of contingent consideration

Acquisition, divestiture, and restructuring costs(a)

Tax recovery, net

Impairment charges

Non-GAAP measure

(in thousands, except per share data)

Net sales

$

3,150,806

$

-

$

-

$

-

$

-

$

-

$

3,150,806

Gross profit

350,716

-

-

-

-

-

350,716

Operating income

61,483

19,488

516

11,634

-

-

93,121

Other expense, net

3,948

-

-

-

-

-

3,948

Pre-tax income

57,535

19,488

516

11,634

-

-

89,173

Net income from continuing operations

45,389

14,753

390

9,336

-

-

69,868

Diluted EPS from continuing operations

$

1.78

$

0.58

$

0.02

$

0.36

$

-

$

-

$

2.74

(a) Acquisition and divestiture costs totaled $2.4 million for the fiscal year ended June 30, 2021 and are generally nondeductible for tax purposes. Restructuring costs totaled $9.3 million for the fiscal year ended June 30, 2021.

Year ended June 30, 2020

Reported GAAP Measure

Intangible amortization expense

Change in fair value of contingent consideration

Acquisition, divestiture, and restructuring costs

Tax recovery, net

Impairment charges

Non-GAAP measure

(in thousands, except per share data)

Net sales

$

3,047,734

$

-

$

-

$

-

$

-

$

-

$

3,047,734

Gross profit

355,569

-

-

-

-

-

355,569

Operating (loss) income

(64,967)

19,953

6,941

4,604

(8,063)

120,470

78,938

Other expense, net

6,809

-

-

-

2,681

-

9,490

Pre-tax (loss) income

(71,776)

19,953

6,941

4,604

(10,744)

120,470

69,448

Net (loss) income from continuing operations

(79,227)

15,091

5,247

4,449

(8,001)

114,398

51,957

Diluted EPS from continuing operations

$

(3.12)

$

0.59

$

0.21

$

0.18

$

(0.32)

$

4.51

$

2.05

(a) Acquisition and divestiture costs totaled $4.0 million for the fiscal year ended June 30, 2020 and are generally nondeductible for tax purposes. Restructuring costs totaled $0.6 million for the fiscal year ended June 30, 2020.



Year ended June 30, 2021

Change in Acquisition, Reported GAAP Intangible fair value of divestiture, Tax Impairment Non-GAAP Measure amortization contingent and recovery, charges measure expense consideration restructuring net costs(a)

(in thousands, except per share data)

Net sales $ 3,150,806 $ - $ - $ - $ - $ - $ 3,150,806

Gross 350,716 - - - - - 350,716 profit

Operating 61,483 19,488 516 11,634 - - 93,121 income

Otherexpense, 3,948 - - - - - 3,948 net

Pre-tax 57,535 19,488 516 11,634 - - 89,173 income

Net incomefrom 45,389 14,753 390 9,336 - - 69,868 continuingoperations

DilutedEPS from $ 1.78 $ 0.58 $ 0.02 $ 0.36 $ - $ - $ 2.74 continuingoperations



(a) Acquisition and divestiture costs totaled $2.4 million for the fiscal yearended June 30, 2021 and are generally nondeductible for tax purposes.Restructuring costs totaled $9.3 million for the fiscal year ended June 30,2021.



Year ended June 30, 2020

Change in Acquisition, Reported GAAP Intangible fair value of divestiture, Tax Impairment Non-GAAP Measure amortization contingent and recovery, charges measure expense consideration restructuring net costs

(in thousands, except per share data)

Net sales $ 3,047,734 $ - $ - $ - $ - $ - $ 3,047,734

Gross 355,569 - - - - - 355,569 profit

Operating(loss) (64,967) 19,953 6,941 4,604 (8,063) 120,470 78,938 income

Otherexpense, 6,809 - - - 2,681 - 9,490 net

Pre-tax(loss) (71,776) 19,953 6,941 4,604 (10,744) 120,470 69,448 income

Net (loss)incomefrom (79,227) 15,091 5,247 4,449 (8,001) 114,398 51,957 continuingoperations

DilutedEPS from $ (3.12) $ 0.59 $ 0.21 $ 0.18 $ (0.32) $ 4.51 $ 2.05 continuingoperations



(a) Acquisition and divestiture costs totaled $4.0 million for the fiscal yearended June 30, 2020 and are generally nondeductible for tax purposes.Restructuring costs totaled $0.6 million for the fiscal year ended June 30,2020.

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

Discontinued Operations - Financial Results:

Quarter ended June 30,

Fiscal year ended June 30,

2021

2020

2021

2020

(in thousands)

Net sales

$

-

$

121,969

$

213,373

$

561,496

Cost of goods sold

-

112,846

198,512

513,003

Gross profit

-

9,123

14,861

48,493

Selling, general and administrative expenses

-

11,337

17,291

53,946

Depreciation expense

-

205

-

975

Intangible amortization expense

-

330

-

1,403

Operating loss

-

(16,496)

(2,430)

(21,578)

Interest expense, net

-

163

394

1,399

Loss on disposal group

101

88,923

34,597

88,923

Other expense, net

-

1,221

310

1,124

Loss from discontinued operations before taxes

(101)

(106,803)

(37,731)

(113,024)

Income tax (benefit) expense

(3,154)

1,600

(3,137)

403

Net income (loss) from discontinued operations

$

3,053

$

(108,403)

$

(34,594)

$

(113,427)

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)



DiscontinuedOperations - Financial Results:



Quarter ended June 30, Fiscal year ended June 30,

2021 2020 2021 2020

(in thousands)

Net sales $ - $ 121,969 $ 213,373 $ 561,496

Cost of goods sold - 112,846 198,512 513,003

Gross profit - 9,123 14,861 48,493

Selling, general andadministrative - 11,337 17,291 53,946 expenses

Depreciation expense - 205 - 975

Intangible - 330 - 1,403 amortization expense

Operating loss - (16,496) (2,430) (21,578)

Interest expense, net - 163 394 1,399

Loss on disposal group 101 88,923 34,597 88,923

Other expense, net - 1,221 310 1,124

Loss from discontinuedoperations before (101) (106,803) (37,731) (113,024) taxes

Income tax (benefit) (3,154) 1,600 (3,137) 403 expense

Net income (loss) fromdiscontinued $ 3,053 $ (108,403) $ (34,594) $ (113,427) operations

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

Discontinued Operations - Assets and Liabilities:

June 30, 2021

June 30, 2020

(in thousands)

Assets

Current assets:

Cash and cash equivalents

$

-

$

4,970

Accounts receivable, net

-

117,200

Inventories, net

-

106,779

Prepaid expenses and other current assets

-

23,808

Total current assets

-

252,757

Property and equipment, net

-

1,833

Deferred income taxes

-

9,349

Other non-current assets

-

6,215

Total assets, before valuation allowance

-

270,154

Less: valuation allowance

-

(88,923)

Total assets, net of valuation allowance (a)

$

-

$

181,231

Liabilities

Current liabilities:

Accounts payable

$

-

$

56,098

Accrued expenses and other current liabilities

-

14,815

Other taxes payable

-

20,378

Short-term borrowings

-

3,524

Income tax payable

-

1,085

Total current liabilities

-

95,900

Borrowings under revolving credit facility

-

24,704

Other long-term liabilities

-

7,418

Total liabilities(1)

$

-

$

128,022

(a) Total assets and liabilities of discontinued operations are classified in current assets and liabilities, respectively, in the Company's consolidated balance sheet as of June 30, 2020. The discontinued operations were disposed of during the quarter ended December 31, 2020.

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)



Discontinued Operations - Assets and Liabilities:



June 30, June 30, 2020 2021

(in thousands)

Assets

Current assets:

Cash and cash equivalents $ - $ 4,970

Accounts receivable, net - 117,200

Inventories, net - 106,779

Prepaid expenses and other current assets - 23,808

Total current assets - 252,757

Property and equipment, net - 1,833

Deferred income taxes - 9,349

Other non-current assets - 6,215

Total assets, before valuation allowance - 270,154

Less: valuation allowance - (88,923)

Total assets, net of valuation allowance ^(a) $ - $ 181,231

Liabilities

Current liabilities:

Accounts payable $ - $ 56,098

Accrued expenses and other current liabilities - 14,815

Other taxes payable - 20,378

Short-term borrowings - 3,524

Income tax payable - 1,085

Total current liabilities - 95,900

Borrowings under revolving credit facility - 24,704

Other long-term liabilities - 7,418

Total liabilities^(1) $ - $ 128,022



^(a) Total assets and liabilities of discontinued operations are classified incurrent assets and liabilities, respectively, in the Company's consolidatedbalance sheet as of June 30, 2020. The discontinued operations were disposedof during the quarter ended December 31, 2020.

ScanSource, Inc. and Subsidiaries

Supplementary Forward-Looking Information (Unaudited)

Annual Financial Outlook for Fiscal Year 2022:

FY22 Outlook

GAAP, Operating Income

At least $92 million

Intangible amortization

$18 million

Depreciation expense

$14 million

Share-based compensation expense

$11 million

Adjusted EBITDA (non-GAAP)

At least $135 million

ScanSource, Inc. and Subsidiaries

Supplementary Forward-Looking Information (Unaudited)

Annual Financial Outlook for Fiscal Year 2022:



FY22 Outlook

GAAP, Operating Income At least $92 million

Intangible amortization $18 million

Depreciation expense $14 million

Share-based compensation expense $11 million

Adjusted EBITDA (non-GAAP) At least $135 million





Fiscal Year 2021 Adjusted EBITDA, excluding Share-Based Compensation Expense:

FY21

Adjusted EBITDA, as reported (non-GAAP)

$109.9 million

Add: Share-based compensation expense

$8.0 million

Adjusted EBITDA, excluding share-based compensation expense

$117.9 million

View source version on businesswire.com: https://www.businesswire.com/news/home/20210824005812/en/

CONTACT: Steve Jones Senior EVP, Chief Financial Officer ScanSource, Inc. (864) 286-4302 - or - Mary M. Gentry SVP, Treasurer and Investor Relations ScanSource, Inc. (864) 286-4892