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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2024

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: 000-26926
scansourcelogo4a291a06.jpg
ScanSource, Inc.
(Exact name of registrant as specified in its charter)
South Carolina57-0965380
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
6 Logue Court 29615
Greenville, South Carolina
(Zip Code)
(Address of principal executive offices)
(864) 288-2432
(Registrant's telephone number, including area code)
 _______________________________________________ 

Securities registered pursuant to Section 12(b) of the Act:

Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, no par valueSCSCNASDAQ Global Select Market
Securities registered pursuant to Section 12(g) of the Act:
None.
  _______________________________________________
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  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer☒Smaller reporting company☐
Accelerated filer☐
Emerging growth company☐
Non-accelerated filer☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassOutstanding at November 4, 2024
Common Stock, no par value per share
0 shares


SCANSOURCE, INC.
INDEX TO FORM 10-Q
September 30, 2024
 
  Page #
Item 1.
Financial Statements
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.

3
FORWARD-LOOKING STATEMENTS

Forward-looking statements are included in the "Risk Factors," "Legal Proceedings," "Management’s Discussion and Analysis of Financial Condition and Results of Operations," and "Quantitative and Qualitative Disclosures About Market Risk" sections and elsewhere herein. Words such as "expects," "anticipates," "believes," "intends," "plans," "hopes," "forecasts," "seeks," "estimates," "goals," "projects," "strategy," "future," "likely," "may," "should," "will," and variations of such words and similar expressions generally identify such forward-looking statements. Any forward-looking statement made by us in this Form 10-Q is based only on information currently available to us and speaks only as of the date on which it is made. Except as may be required by law, we expressly disclaim any obligation to update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors including, but not limited to the following factors, which are neither presented in order of importance nor weighted: macroeconomic conditions, including potential prolonged economic weakness, inflation and supply chain challenges, the failure to manage and implement the Company's organic growth strategy, credit risks involving the Company's larger customers and suppliers, changes in interest and exchange rates and regulatory regimes impacting the Company's international operations, risk to the Company's business from a cyber attack, a failure of the Company's IT systems, failure to hire and retain quality employees, loss of the Company's major customers, relationships with the Company's key suppliers and sales partners or a termination or a significant modification of the terms under which it operates with such suppliers and sales partners, changes in the Company's operating strategy and other factors set forth in "Risk Factors" contained in our Annual Report on Form 10-K for the year ended June 30, 2024.

4
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements
SCANSOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share information)
September 30, 2024June 30, 2024
Assets
Current assets:
Cash and cash equivalents$145,044 $185,460 
Accounts receivable, less allowance of $22,721 at September 30, 2024
and $20,684 at June 30, 2024
567,127 581,523 
Inventories504,078 512,634 
Prepaid expenses and other current assets136,110 125,082 
Total current assets1,352,359 1,404,699 
Property and equipment, net32,940 33,501 
Goodwill232,856 206,301 
Identifiable intangible assets, net77,800 37,634 
Deferred income taxes17,490 19,902 
Other non-current assets73,064 76,995 
Total assets$1,786,509 $1,779,032 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$578,657 $587,984 
Accrued expenses and other current liabilities69,326 65,616 
Current portion of contingent consideration1,911 — 
Income taxes payable6,376 7,895 
Current portion of long-term debt9,736 7,857 
Total current liabilities666,006 669,352 
Long-term debt, net of current portion133,913 136,149 
Borrowings under revolving credit facility— 50 
Long-term portion of contingent consideration15,289 — 
Other long-term liabilities50,408 49,226 
Total liabilities865,616 854,777 
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, 24,005,107 and 24,243,848 shares issued and outstanding at September 30, 2024 and June 30, 2024, respectively
2,975 26,370 
Retained earnings1,030,712 1,013,738 
Accumulated other comprehensive loss(112,794)(115,853)
Total shareholders’ equity920,893 924,255 
Total liabilities and shareholders’ equity$1,786,509 $1,779,032 
June 30, 2024 amounts are derived from audited consolidated financial statements.
See accompanying notes to these condensed consolidated financial statements.
5
SCANSOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
(In thousands, except per share data)
 
Quarter ended
 September 30,
 20242023
Net sales$775,580 $876,305 
Cost of goods sold673,961 769,797 
Gross profit101,619 106,508 
Selling, general and administrative expenses71,706 75,436 
Depreciation expense2,857 2,795 
Intangible amortization expense4,358 4,193 
Restructuring expense5,068 — 
Operating income17,630 24,084 
Interest expense2,109 5,585 
Interest income(2,659)(1,325)
Other (income) expense, net(4,782)677 
Income before income taxes22,962 19,147 
Provision for income taxes5,988 3,715 
Net income$16,974 $15,432 
Per share data:
Net income per common share, basic$0.70 $0.62 
Weighted-average shares outstanding, basic24,147 24,886 
Net income per common share, diluted$0.69 $0.61 
Weighted-average shares outstanding, diluted24,646 25,178 
See accompanying notes to these condensed consolidated financial statements.

6
SCANSOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(In thousands)

Quarter ended
September 30,
 20242023
Net income$16,974 $15,432 
Unrealized (loss) gain on hedged transaction, net of tax(1,050)153 
Foreign currency translation adjustment4,109 (6,890)
Comprehensive income$20,033 $8,695 
See accompanying notes to these condensed consolidated financial statements.

7
SCANSOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
(In thousands, except share information)

Common
Stock
(Shares)		Common
Stock
(Amount)		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Balance at June 30, 202424,243,848 $26,370 $1,013,738 $(115,853)$924,255 
Net income— — 16,974 — 16,974 
Unrealized loss on hedged transaction, net of tax— — — (1,050)(1,050)
Foreign currency translation adjustment— — — 4,109 4,109 
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes349,277 2,177 — — 2,177 
Common stock repurchased(588,018)(28,043)— — (28,043)
Share-based compensation— 2,471 — — 2,471 
Balance at September 30, 202424,005,107 $2,975 $1,030,712 $(112,794)$920,893 
See accompanying notes to these condensed consolidated financial statements.

8
SCANSOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
(In thousands, except share information)

Common
Stock
(Shares)		Common
Stock
(Amount)		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Balance at June 30, 202324,844,203 $58,241 $936,678 $(89,621)$905,298 
Net income— — 15,432 — 15,432 
Unrealized gain on hedged transaction, net of tax— — — 153 153 
Foreign currency translation adjustment— — — (6,890)(6,890)
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes116,028 (1,510)— — (1,510)
Share-based compensation— 2,770 — — 2,770 
Balance at September 30, 202324,960,231 $59,501 $952,110 $(96,358)$915,253 
See accompanying notes to these condensed consolidated financial statements.

9
SCANSOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Three months ended
 September 30,
 20242023
Cash flows from operating activities:
Net income$16,974 $15,432 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization7,471 7,217 
Amortization of debt issue costs96 96 
Provision for doubtful accounts1,678 4,157 
Share-based compensation2,471 2,769 
Deferred income taxes2,433 1,303 
Finance lease interest25 15 
Changes in operating assets and liabilities:
Accounts receivable20,606 53,284 
Inventories9,524 99,630 
Prepaid expenses and other assets(1,952)(7,743)
Other non-current assets3,285 11,227 
Accounts payable(17,002)(70,292)
Accrued expenses and other liabilities744 (21,764)
Income taxes payable(1,523)(1,798)
Net cash provided by operating activities44,830 93,533 
Cash flows from investing activities:
Capital expenditures(2,375)(2,315)
Cash paid for business acquisitions, net of cash acquired(56,849)— 
Net cash used in investing activities(59,224)(2,315)
Cash flows from financing activities:
Borrowings on revolving credit, net of expenses8,381 588,570 
Repayments on revolving credit, net of expenses(8,430)(669,424)
Repayments on long-term debt(357)(938)
Repayments on finance lease obligation(275)(191)
Exercise of stock options6,971 72 
Taxes paid on settlement of equity awards(4,794)(1,582)
Common stock repurchased(28,126)— 
Net cash used in financing activities(26,630)(83,493)
Effect of exchange rate changes on cash and cash equivalents608 (1,256)
(Decrease) increase in cash and cash equivalents(40,416)6,469 
Cash and cash equivalents at beginning of period185,460 36,178 
Cash and cash equivalents at end of period$145,044 $42,647 
See accompanying notes to these condensed consolidated financial statements.
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SCANSOURCE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(1) Business and Summary of Significant Accounting Policies

Business Description

ScanSource, Inc. (together with its subsidiaries referred to as “the Company” or “ScanSource”) is a leading hybrid distributor connecting devices to the cloud and accelerating growth for partners across hardware, Software as a Service ("SaaS"), connectivity and cloud. The Company brings technology solutions and services from the world’s leading suppliers of mobility and barcode, point-of-sale ("POS"), payments, networking, security, unified communications and collaboration, connectivity and cloud services to market. The Company operates primarily in the United States, Canada and Brazil. The Company's two operating segments, Specialty Technology Solutions and Intelisys & Advisory, represent the different sales models the Company uses in executing its hybrid distribution growth strategy.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared by the Company’s management in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position at September 30, 2024 and June 30, 2024, the results of operations for the quarters ended September 30, 2024 and 2023, the condensed consolidated statements of comprehensive income for the quarters ended September 30, 2024 and 2023, the condensed consolidated statements of shareholders' equity for the quarters ended September 30, 2024 and 2023 and the condensed consolidated statements of cash flows for the quarters ended September 30, 2024 and 2023. The results of operations for the quarter ended September 30, 2024 are not necessarily indicative of the results to be expected for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024. Unless otherwise indicated, disclosures provided in the notes to the Company's consolidated financial statements pertain to continuing operations only.

Segment Changes

Effective July 1, 2024, the Company realigned its operating segments to represent the different sales models it uses in executing its hybrid distribution growth strategy. The two realigned segments are Specialty Technology Solutions and Intelisys & Advisory. The Specialty Technology Solutions segment combines the Company's former segments, with the exception of the Company's Intelisys business. The Intelisys & Advisory segment includes the Intelisys and technology advisors businesses, including Channel Exchange (formerly known as intY USA), RPM and Resourcive. Both segments include recurring revenue.

The Company has reclassified certain prior year amounts in the segment results to conform with the current year presentation. These reclassifications had no effect on the condensed consolidated financial results. See Note 10 - Segment Information for descriptions of the Company's segments.

Summary of Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies for the quarter ended September 30, 2024 from the policies described in the notes to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2024. For a discussion of the Company’s significant accounting policies, please see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Cash and Cash Equivalents

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The Company considers all highly-liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. The Company maintains zero-balance disbursement accounts at various financial institutions at which the Company does not maintain significant depository relationships. Due to the terms of the agreements governing these accounts, the Company generally does not have the right to offset outstanding checks written from these accounts against cash on hand, and the respective institutions are not legally obligated to honor the checks until sufficient funds are transferred to fund the checks. As a result, checks released but not yet cleared from these accounts in the amount of $0.3 million and $5.9 million are included in accounts payable on the condensed consolidated balance sheets at September 30, 2024 and June 30, 2024, respectively.

Long-lived Assets

The Company presents depreciation expense and intangible amortization expense on the condensed consolidated income statements. The Company's depreciation expense related to selling, general and administrative costs totaled $2.9 million and $2.8 million for the quarters ended September 30, 2024 and September 30, 2023, respectively. Depreciation expense reported as part of cost of goods sold on the condensed consolidated income statements totaled $0.3 million and $0.2 million for the quarters ended September 30, 2024 and September 30, 2023, respectively. The Company's intangible amortization expense reported on the condensed consolidated income statements relates to selling, general and administrative costs, not the cost of selling goods. Intangible amortization expense totaled $4.4 million and $4.2 million for the quarters ended September 30, 2024 and September 30, 2023, respectively.

Recent Accounting Pronouncements

In July 2023, the Securities and Exchange Commission issued final rules that require new and enhanced disclosures on cybersecurity risk management, strategy, governance, and incident reporting. Under the final rules, companies must report a material cybersecurity incident on Form 8-K within four business days of determining that such cybersecurity incident is material. To the extent the nature, scope, timing or the impact of the incident is not determinable at the time such Form 8-K is required to be filed, additional information about the material aspects of the cybersecurity incident must be filed on a Form 8-K/A within four business days after such additional information becomes available. Companies must also disclose their cybersecurity processes, management's role in cybersecurity governance, and cybersecurity oversight by the Board of Directors on Form 10-K. The Company adopted these rules for the fiscal year ended June 30, 2024.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. This ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. This ASU is applicable to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and subsequent interim periods, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU updates income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and is applicable to the Company’s fiscal year beginning July 1, 2025, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

The Company has reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on its consolidated financial statements as a result of future adoption.

(2) Trade Accounts and Notes Receivable, Net

The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from customers’ failure to make payments on accounts receivable due to the Company. The Company has notes receivable with certain customers, which are included in “Accounts receivable, less allowance” in the Condensed Consolidated Balance Sheets.

Management determines the estimate of the allowance for doubtful accounts receivable by considering a number of factors, including: (i) historical experience, (ii) aging of the accounts receivable, (iii) specific information obtained by the Company on
12
the financial condition and the current creditworthiness of its customers, (iv) the current economic and country-specific environment and (v) reasonable and supportable forecasts about collectability. Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model. Receivables that do not share risk characteristics are evaluated on an individual basis. Estimates of expected credit losses on trade receivables over the contractual life are recorded at inception and adjusted over the contractual life.

The changes in the allowance for doubtful accounts for the three months ended September 30, 2024 are set forth in the table below.
June 30, 2024Amounts Charged to ExpenseWrite-offs
Other (1)
September 30, 2024
(in thousands)
Trade accounts and current notes receivable allowance$20,684 $1,678 $(153)$512 $22,721 
(1)"Other" amounts include recoveries and the effect of foreign currency fluctuations for the three months ended September 30, 2024.


(3) Revenue Recognition

The Company provides technology solutions and services from the leading global suppliers of mobility, barcode, POS, payments, physical security, unified communications, collaboration, connectivity and cloud services. This includes hardware, related accessories and device configuration as well as software licenses, professional services and hardware support programs.

In determining the appropriate amount of revenue to recognize, the Company applies the following five-step model in accordance with ASC 606: (i) identify contracts with customers; (ii) identify performance obligations in the contracts; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations per the contracts; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company recognizes revenue as control of products and services are transferred to customers, which is generally at the point of shipment. The Company delivers products to customers in several ways, including: (i) shipment from a Company warehouse, (ii) drop-shipment directly from the supplier, or (iii) electronic delivery for non-physical products.

Principal versus Agent Considerations

The Company is the principal for sales of all hardware and certain software and services. The Company considers itself the principal in those transactions where it has control of the product or service before it is transferred to the customer. The Company recognizes the principal-associated revenue and cost of goods sold on a gross basis.

The Company is the agent for third-party service contracts, including product warranties and supplier-hosted software. These service contracts are sold separately from the products, and the Company often serves as the agent for the contract on behalf of the original equipment manufacturer. The Company's responsibility is to arrange for the provision of the specified service by the original equipment manufacturer, and the Company does not control the specified service before it is transferred to the customer. Because the Company acts as an agent, revenue is recognized net of cost at the time of sale. The Intelisys business operates under an agency model.

Variable Considerations

For certain transactions, products are sold with a right of return and may also provide other rebates or incentives, which are accounted for as variable consideration. The Company estimates a returns allowance based on historical experience and reduces revenue accordingly. The Company estimates the amount of variable consideration for rebates and incentives by using the expected value to be given to the customer and reduces the revenue by those estimated amounts. These estimates are reviewed and updated as necessary at the end of each reporting period.

Contract Balances

The Company records contract assets and liabilities for payments received from customers in advance of services performed. These assets and liabilities are the result of the sales of the Company's self-branded warranty programs and other transactions where control has not yet passed to the customer. These amounts are immaterial to the consolidated financial statements for the periods presented.
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Disaggregation of Revenue

The following tables represent the Company's disaggregation of revenue:

Quarter ended September 30, 2024
Specialty Technology SolutionsIntelisys & AdvisoryTotal
(in thousands)
Revenue by product/service
Products and services$740,734 $833 $741,567 
Recurring revenue(a)
11,565 22,448 34,013 
$752,299 $23,281 $775,580 
Quarter ended September 30, 2023
Specialty Technology SolutionsIntelisys & AdvisoryTotal
(in thousands)
Revenue by product/service
Products and services$846,835 $839 $847,674 
Recurring revenue(a)
7,115 21,516 28,631 
$853,950 $22,355 $876,305 
(a) Recurring revenue represents revenue primarily from agency commissions, SaaS, subscriptions, and hardware rentals.

(4) Earnings Per Share

Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share are computed by dividing net income by the weighted-average number of common and potential common shares outstanding.

Quarter ended
 September 30,
 20242023
 (in thousands, except per share data)
Numerator:
Net income$16,974 $15,432 
Denominator:
Weighted-average shares, basic24,147 24,886 
Dilutive effect of share-based payments499 292 
Weighted-average shares, diluted24,646 25,178 
Net income per common share, basic$0.70 $0.62 
Net income per common share, diluted$0.69 $0.61 

For the quarters ended September 30, 2024 and 2023, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 109,450 and 854,893, respectively.

(5) Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss, net of tax are as follows: 
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September 30, 2024June 30, 2024
 (in thousands)
Foreign currency translation adjustment$(113,777)$(117,885)
Unrealized gain on hedged transaction, net of tax983 2,032 
Accumulated other comprehensive loss$(112,794)$(115,853)
The tax effect of amounts in comprehensive loss reflect a tax benefit as follows:
Quarter ended September 30,
20242023
(in thousands)
Tax benefit$(363)$(54)

(6) Goodwill and Other Identifiable Intangible Assets

The changes in the carrying amount of goodwill for the three months ended September 30, 2024, by reporting segment, are set forth in the table below.
Specialty Technology SolutionsIntelisys & AdvisoryTotal
 (in thousands)
Balance at June 30, 2024$146,108 $60,193 $206,301 
Additions16,048 9,078 25,126 
Foreign currency translation adjustment245 1,184 1,429 
Balance at September 30, 2024$162,401 $70,455 $232,856 

The following table shows changes in the amount recognized for net identifiable intangible assets for the three months ended September 30, 2024.
Net Identifiable Intangible Assets
(in thousands)
Balance at June 30, 2024$37,634 
Additions44,500 
Amortization expense(4,358)
Foreign currency translation adjustment24 
Balance at September 30, 2024$77,800 


(7) Short-Term Borrowings and Long-Term Debt

The following table presents the Company’s debt at September 30, 2024 and June 30, 2024.

September 30, 2024June 30, 2024
(in thousands)
Current portion of long-term debt$9,736 $7,857 
Mississippi revenue bond, net of current portion2,663 3,024 
Senior secured term loan facility, net of current portion131,250 133,125 
Borrowings under revolving credit facility— 50 
Total debt$143,649 $144,056 

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Credit Facility

The Company has a multi-currency senior secured credit facility (as amended, the "Amended Credit Agreement") with JPMorgan Chase Bank N.A., as administrative agent (the "Administrative Agent"), and a syndicate of banks (collectively the "Lenders"). On September 28, 2022, the Company amended and restated the Amended Credit Agreement, which includes (i) a five-year, $350 million multicurrency senior secured revolving credit facility and (ii) a five-year $150 million senior secured term loan facility. The Amended Credit Agreement extended the credit facility maturity date to September 28, 2027. In addition, pursuant to an “accordion feature,” the Company may increase its borrowing limit by up to an additional $250 million, subject to obtaining additional credit commitments from the lenders participating in the increase. The Amended Credit Agreement allows for the issuance of up to $50 million for letters of credit. Borrowings under the Amended Credit Agreement are guaranteed by substantially all of the domestic subsidiaries of the Company and secured by their assets. Under the terms of the revolving credit facility, the payment of cash dividends is restricted. The Company incurred debt issuance costs of $1.4 million in connection with the amendment and restatement of the Amended Credit Agreement. These costs were capitalized to other non-current assets on the Condensed Consolidated Balance Sheets and added to the unamortized debt issuance costs from the previous credit facility.

Loans denominated in U.S. dollars, other than swingline loans, bear interest at a rate per annum equal to, at the Company’s option, (i) the adjusted term Secured Overnight Financing Rate ("SOFR") or adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon the Company’s ratio of (A) total consolidated debt less up to $30 million of unrestricted domestic cash to (B) trailing four-quarter consolidated EBITDA measured as of the end of the most recent year or quarter, as applicable, for which financial statements have been delivered to the Lenders (the “leverage ratio”); or (ii) the alternate base rate plus an additional margin ranging from 0% to 0.75%, depending upon the Company’s leverage ratio, plus, if applicable, certain mandatory costs. All swingline loans denominated in U.S. dollars bear interest based upon the adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon the Company's leverage ratio, or such other rate as the Company and the applicable swingline lender may agree. The adjusted term SOFR and adjusted daily simple SOFR include a fixed credit adjustment of 0.10% over the applicable SOFR reference rate. Loans denominated in foreign currencies bear interest at a rate per annum equal to the applicable benchmark rate set forth in the Amended Credit Agreement plus an additional margin ranging from 1.00% to 1.75%, depending upon the Company’s leverage ratio plus, if applicable, certain mandatory costs.

During the quarter ended September 30, 2024, all of the Company's borrowings under the Amended Credit Agreement were U.S. dollar loans. The spread in effect as of September 30, 2024 was 1.00%, plus a 0.10% credit spread adjustment for SOFR-based loans and 0.00% for alternate base rate loans. The commitment fee rate in effect at September 30, 2024 was 0.15%. The effective interest rates for the term loan were 5.95% and 6.44% as of September 30, 2024 and June 30, 2024, respectively. The Amended Credit Agreement includes customary representations, warranties and affirmative and negative covenants, including financial covenants. Specifically, the Company’s Leverage Ratio must be less than or equal to 3.50 to 1.00 at all times. In addition, the Company’s Interest Coverage Ratio (as such term is defined in the Amended Credit Agreement) must be at least 3.00 to 1.00 at the end of each fiscal quarter. In the event of a default, customary remedies are available to the lenders, including acceleration and increased interest rates. The Company was in compliance with all covenants under the Amended Credit Agreement at September 30, 2024.

The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, during the three month periods ended September 30, 2024 and 2023 was $144.0 million and $200.9 million, respectively. There was $350.0 million and $349.9 million available for additional borrowings as of September 30, 2024 and June 30, 2024, respectively. The effective interest rates for the revolving line of credit were 5.95% and 6.44% as of September 30, 2024 and June 30, 2024, respectively. There were no letters of credit issued under the multi-currency revolving credit facility at September 30, 2024 or June 30, 2024.

Mississippi Revenue Bond

On August 1, 2007, the Company entered into an agreement with the State of Mississippi to provide financing for the acquisition and installation of certain equipment to be utilized at the Company’s Southaven, Mississippi warehouse, through the issuance of an industrial development revenue bond. The bond matures on September 1, 2032. The bond accrues interest at the one-month term SOFR plus an adjustment of 0.10% plus a spread of 0.85%. The agreement also provides the bondholder with a put option, exercisable only within 180 days of each fifth anniversary of the agreement, requiring the Company to pay back the bonds at 100% of the principal amount outstanding. At September 30, 2024, the Company was in compliance with all covenants under this bond. The interest rates at September 30, 2024 and June 30, 2024 were 6.15% and 6.28%, respectively.

Debt Issuance Costs
16

At September 30, 2024, net debt issuance costs associated with the credit facility and bond totaled $1.1 million and are being amortized on a straight-line basis through the maturity date of each respective debt instrument.

(8) Derivatives and Hedging Activities

The Company's results of operations could be materially impacted by significant changes in foreign currency exchange rates and interest rates. In an effort to manage the exposure to these risks, the Company periodically enters into various derivative instruments. The Company's accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments in accordance with U.S. GAAP. The Company records all derivatives on the Condensed Consolidated Balance Sheet at fair value. Derivatives that are not designated as hedging instruments or the ineffective portions of cash flow hedges are adjusted to fair value through earnings in other income and expense.

Foreign Currency Derivatives – The Company conducts a portion of its business internationally in a variety of foreign currencies and is exposed to market risk for changes in foreign currency exchange rates. The Company attempts to hedge transaction exposures with natural offsets to the fullest extent possible and once these opportunities have been exhausted the Company uses currency options and forward contracts or other hedging instruments with third parties. These contracts will periodically hedge the exchange of various currencies, including the U.S. dollar, Brazilian real, euro, British pound and Canadian dollar.

The Company had contracts outstanding for purposes of managing cash flows with notional amounts of $33.7 million and $27.5 million for the exchange of foreign currencies at September 30, 2024 and June 30, 2024, respectively. To date, the Company has chosen not to designate these derivatives as hedging instruments, and accordingly, these instruments are adjusted to fair value through earnings in other income and expense. Summarized financial information related to these derivative contracts and changes in the underlying value of the foreign currency exposures included in the Condensed Consolidated Income Statements for the quarters ended September 30, 2024 and 2023 are as follows:

 Quarter ended
September 30,
 20242023
 (in thousands)
Net foreign exchange derivative contract losses (gains)$941 $(368)
Net foreign currency transactional and re-measurement (gains) losses(607)1,064 
Net foreign currency exchange losses$334 $696 

Net foreign currency exchange gains and losses consist of foreign currency transactional and functional currency re-measurements, offset by net foreign currency exchange contract gains and losses and are included in other income and expense. Foreign exchange gains and losses are generated as the result of fluctuations in the value of the U.S. dollar versus the Brazilian real and the Canadian dollar versus the U.S. dollar.

Interest Rates - The Company’s earnings are also affected by changes in interest rates due to the impact those changes have on interest expense from floating rate debt instruments. The Company manages its exposure to changes in interest rates by using interest rate swaps to hedge this exposure and to achieve a desired proportion of fixed versus floating rate debt.

On April 30, 2019, the Company entered into an interest rate swap agreement to lock into a fixed LIBOR interest rate, which was amended on September 28, 2022, to change the reference rate from LIBOR to SOFR. The swap agreement has a notional amount of $100.0 million, with a $50.0 million tranche that matured on April 30, 2024 and a $50.0 million tranche scheduled to mature April 30, 2026.

On March 31, 2023, the Company entered into an interest rate swap agreement to lock into a fixed SOFR interest rate with a notional amount of $25 million and a maturity date of March 31, 2028.

These interest rate swap agreements are designated as cash flow hedges to hedge the variable rate interest payments on the revolving credit facility. Interest rate differentials paid or received under the swap agreements are recognized as adjustments to interest expense. To the extent the swaps are effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swaps are not included in current earnings but are reported as other comprehensive income (loss). There was no ineffective portion to be recorded as an adjustment to earnings for the quarters ended September 30, 2024 and 2023.
17

The components of the cash flow hedge included in the Condensed Consolidated Statement of Comprehensive Income for the quarters ended September 30, 2024 and 2023, are as follows:
Quarter ended
September 30,
 20242023
(in thousands)
Net interest income recognized as a result of interest rate swap$(508)$(759)
Unrealized (loss) gain in fair value of interest rate swap(885)974 
Net (decrease) increase in accumulated other comprehensive income(1,393)215 
Income tax effect(343)62 
Net (decrease) increase in accumulated other comprehensive income, net of tax$(1,050)$153 

The Company used the following derivative instruments at September 30, 2024 and June 30, 2024, reflected in its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above:

 September 30, 2024June 30, 2024
 Balance Sheet LocationFair 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 contractsPrepaid expenses and other current assets— $17 — — 
Foreign currency hedgePrepaid expenses and other current assets— — $345 — 
Interest rate swap agreementOther non-current assets$1,305 — $2,698 — 
Derivative liabilities:
Foreign exchange contractsAccrued expenses and other current liabilities— — — $12 
Foreign currency hedgeAccrued expenses and other current liabilities$53 — — — 

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(9) Fair Value of Financial Instruments

Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company classifies certain assets and liabilities based on the fair value hierarchy, which aggregates fair value measured assets and liabilities based upon the following levels of inputs:

•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; and
•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).

The assets and liabilities maintained by the Company that are required to be measured at fair value on a recurring basis include deferred compensation plan investments, forward foreign currency exchange contracts, foreign currency hedge agreements and interest rate swap agreements. The carrying value of debt is considered to approximate fair value, as the Company’s debt instruments are indexed to a variable rate using the market approach (Level 2).

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at September 30, 2024:
TotalQuoted
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$32,176 $32,176 $— $— 
Forward foreign currency exchange contracts17 — 17 — 
Interest rate swap agreement1,305 — 1,305 — 
Total assets at fair value$33,498 $32,176 $1,322 $— 
Liabilities:
Deferred compensation plan investments, current and non-current$32,176 $32,176 $— $— 
Foreign currency hedge53 — 53 — 
Liability for contingent consideration, current and non-current17,200 — — 17,200 
Total liabilities at fair value$49,429 $32,176 $53 $17,200 

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at June 30, 2024:
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TotalQuoted
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 $31,014 $31,014 $— $— 
Foreign currency hedge345 — 345 — 
Interest rate swap agreement2,698 — 2,698 — 
Total assets at fair value$34,057 $31,014 $3,043 $— 
Liabilities:
Deferred compensation plan investments, current and non-current$31,014 $31,014 $— $— 
Forward foreign currency exchange contracts12 — 12 — 
Total liabilities at fair value$31,026 $31,014 $12 $— 

The investments in the deferred compensation plan are held in a "rabbi trust" and include mutual funds and cash equivalents for payment of non-qualified benefits for certain retired, terminated and active employees. These investments are recorded to prepaid expenses and other current assets or other non-current assets depending on their corresponding, anticipated distribution dates to recipients, which are reported in accrued expenses and other current liabilities or other long-term liabilities, respectively.

Derivative instruments, such as foreign currency forward contracts, are measured using the market approach on a recurring basis considering foreign currency spot rates and forward rates quoted by banks or foreign currency dealers and interest rates quoted by banks (Level 2). Fair values of interest rate swaps are measured using standard valuation models with inputs that can be derived from observable market transactions, including SOFR spot and forward rates (Level 2). Foreign currency contracts and interest rate swap agreements are classified in the Condensed Consolidated Balance Sheets as prepaid expenses and other non-current assets or accrued expenses and other long-term liabilities, depending on the respective instruments' favorable or unfavorable positions. See Note 8 - Derivatives and Hedging Activities.

The Company recorded a contingent consideration liability at the acquisition date of both Advantix and Resourcive. These liabilities represent the amounts payable to former owners, as outlined under the terms of the asset purchase agreements, based upon the achievement of a projected earnings before interest expense, taxes, depreciation and amortization, net of specific pro forma adjustments.
The fair values of amounts owed are recorded in current portion of contingent consideration and long-term portion of contingent consideration in the Company’s Condensed Consolidated Balance Sheets. In accordance with ASC 805, the Company will revalue the contingent consideration liability at each reporting date through the last payment, with changes in the fair value of the contingent consideration reflected in the change in fair value of contingent consideration line item on the Company’s Condensed Consolidated Income Statements that is included in the calculation of operating income. The fair value of the contingent consideration liability associated with future earnout payments is based on several factors, including but not limited to:

•estimated future results, net of pro forma adjustments set forth in the purchase agreements;
•a risk premium reflective of the Company’s creditworthiness and market risk premium associated with the United States markets.
Advantix

Advantix Solutions Group, Inc ("Advantix") is part of the Specialty Technology Solutions segment. The fair value of the contingent consideration is determined using a static discounted cash flow model. The fair value of the liability for the contingent consideration related to Advantix recognized at September 30, 2024 was $7.5 million, of which $1.9 million is classified as current. The fair value at September 30, 2024 approximated the fair value recognized upon acquisition in August 2024, as such no change in fair value of contingent consideration was recognized in the Condensed Consolidated Income Statements. Earnout payments to the former owners of Advantix are payable based on results from fiscal year 2025 to fiscal year 2028.
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Resourcive

Secure Path Networks, LLC dba Resourcive ("Resourcive") is part of the Intelisys & Advisory segment. The fair value of the contingent consideration for Resourcive is determined using a Monte Carlo simulation. The fair value of the liability for the contingent consideration related to Resourcive recognized at September 30, 2024 was $9.7 million, all of which is classified as non-current and is due to the former owners of Resourcive during fiscal year 2027. The fair value at September 30, 2024 approximated the fair value recognized upon acquisition in August 2024, as such no change in fair value of contingent consideration was recognized in the Condensed Consolidated Income Statements.

Valuation techniques and significant observable inputs used in recurring Level 3 fair value measurements for the Company's contingent consideration liabilities related to Advantix and Resourcive at September 30, 2024 were as follows.
AcquisitionReporting PeriodValuation TechniqueSignificant Unobservable InputsWeighted Average Rates
AdvantixSeptember 30, 2024Discounted cash flowAdjusted EBITDA risk premium15.7 %
Adjusted EBITDA growth rate19.8 %
ResourciveSeptember 30, 2024Monte CarloAdjusted EBITDA risk premium13.6 %
Simulated commission growth percentage23.7 %

(10) Segment Information

The Company is a leading provider of technology solutions and services to customers in specialty technology markets. The Company has two reportable segments based on sales model.

Specialty Technology Solutions Segment

The Specialty Technology Solutions segment operates primarily in the United States, Canada and Brazil and includes specialty technology solutions distributed through a wholesale sales model. The specialty technology solutions include the following:

•Mobility and barcode solutions - mobile computing, barcode scanners and imagers, radio frequency identification devices, barcode printing and related services, wireless enablement and connectivity tools;
•POS and payments solutions - POS systems, integrated POS software platforms, self-service kiosks including self-checkout, payment terminals and mobile payment devices;
•Security solutions - video surveillance and analytics, video management software and access control;
•Networking solutions - switching, routing and wireless products and software; and
•Communications and collaboration solutions - voice, video, communication platform integration and contact center solutions.

Intelisys & Advisory Segment

The Intelisys & Advisory segment operates primarily in the United States and distributes connectivity and cloud services through an agency sales model. The connectivity and cloud services include telecom, cable, Unified Communications as a Service (UCaaS), Contact Center as a Service (CCaaS), Infrastructure as a Service (IaaS), Software-Defined Wide-Area Network (SD-WAN) and other cloud services. This segment includes SaaS and subscription services, which the Company offers using digital tools and platforms.

Selected financial information for each business segment is presented below:
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Quarter ended
 September 30,
 20242023
 (in thousands)
Sales:
Specialty Technology Solutions$752,299 $853,950 
Intelisys & Advisory23,281 22,355 
$775,580 $876,305 
Depreciation and amortization:
Specialty Technology Solutions$4,626 $4,544 
Intelisys & Advisory2,125 1,954 
Corporate720 720 
$7,471 $7,218 
Operating income (loss):
Specialty Technology Solutions$16,738 $17,636 
Intelisys & Advisory6,413 6,649 
Corporate (a)
(5,521)(201)
$17,630 $24,084 
Capital expenditures:
Specialty Technology Solutions$(2,228)$(2,297)
Intelisys & Advisory(147)(18)
$(2,375)$(2,315)
Sales by Geography Category:
United States and Canada$715,989 $792,464 
Brazil(b)
63,561 85,305 
Less intercompany sales(3,970)(1,464)
$775,580 $876,305 
(a) For the quarter ended September 30, 2024, the amounts shown above include restructuring expense, acquisition and divestiture expenses as well as cyberattack restoration costs. For the quarter ended September 30, 2023, the amounts above include cyberattack restoration costs.
(b) Countries outside of Brazil represent $0.1 million, or 0.2% of sales, for the quarter ended September 30, 2024 and $2.4 million, or 2.8% of sales, for the quarter ended September 30, 2023.

September 30, 2024June 30, 2024
 (in thousands)
Assets:
Specialty Technology Solutions$1,563,728 $1,499,146 
Intelisys & Advisory222,781 279,886 
$1,786,509 $1,779,032 
Property and equipment, net by Geography Category:
United States and Canada$19,836 $21,613 
Brazil13,104 11,888 
$32,940 $33,501 

(11) Leases

In accordance with Accounting Standards Codification ("ASC") 842, at contract inception the Company determines if a contract contains a lease by assessing whether the contract contains an identified asset and whether the Company has the ability to
22
control the asset. The Company also determines if the lease meets the classification criteria for an operating lease versus a finance lease under ASC 842. Substantially all of the Company's leases are operating leases for real estate, warehouse and office equipment ranging in duration from 1 year to 10 years. The Company has elected not to record short-term operating leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets. Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has finance leases for information technology equipment expiring through fiscal year 2028. Finance leases are recorded as property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The gross amount of the balances recorded related to finance leases is immaterial to the condensed consolidated financial statements at September 30, 2024 and the consolidated financial statements at June 30, 2024.

Operating lease right-of-use assets and lease liabilities are recognized at the commencement date based on the net present value of future minimum lease payments over the lease term. The Company generally is not able to determine the rate implicit in its leases and has elected to apply an incremental borrowing rate as the discount rate for the present value determination, which is based on the Company's cost of borrowings for the relevant terms of each lease and geographical economic factors. Certain operating lease agreements contain options to extend or terminate the lease. The lease term used is adjusted for these options when the Company is reasonably certain it will exercise the option. Operating lease expense is recognized on a straight-line basis over the lease term. Variable lease payments not based on a rate or index, such as costs for common area maintenance, are expensed as incurred. Further, the Company has elected the practical expedient to recognize all lease and non-lease components as a single lease component, where applicable.

The following table presents amounts recorded on the Condensed Consolidated Balance Sheets related to operating leases at September 30, 2024 and June 30, 2024:

September 30, 2024June 30, 2024
Operating leasesBalance Sheet location(in thousands)
Operating lease right-of-use assetsOther non-current assets$10,574 $9,057 
Current operating lease liabilitiesAccrued expenses and other current liabilities$3,810 $3,398 
Long-term operating lease liabilitiesOther long-term liabilities$7,574 $6,507 

The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters ended September 30, 2024 and 2023. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less.

Quarter ended September 30,
20242023
(in thousands)
Operating lease cost$1,121 $1,209 
Variable lease cost332 383 
$1,453 $1,592 

Supplemental cash flow information related to the Company's operating leases for the three months ended September 30, 2024 and 2023 are presented in the table below:

Quarter ended September 30,
20242023
(in thousands)
Cash paid for amounts in the measurement of lease liabilities$1,132 $1,412 
Right-of-use assets obtained in exchange for lease obligations2,461 230 

The weighted-average remaining lease term and discount rate at September 30, 2024 are presented in the table below:

23
September 30, 2024
Weighted-average remaining lease term3.11 years
Weighted-average discount rate5.20 %

The following table presents the maturities of the Company's operating lease liabilities at September 30, 2024:

Operating leases
(in thousands)
2024$3,403 
20254,198 
20263,812 
20271,412 
2028723 
Thereafter300 
Total future payments13,848 
Less: amounts representing interest2,464 
Present value of lease payments$11,384 
(12) Commitments and Contingencies

The Company is, from time to time, party to lawsuits arising out of operations. Although there can be no assurance, based upon information known to the Company, the Company believes that any liability resulting from an adverse determination of such lawsuits would not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

During the Company's due diligence for the Network1 acquisition completed in 2016, several pre-acquisition contingencies were identified regarding various Brazilian federal and state tax exposures. The Company recorded indemnification receivables that are reported gross of the pre-acquisition contingency liabilities as the funds were escrowed as part of the acquisition. The amount available after the impact of foreign currency translation for future pre-acquisition contingency settlements or to be released to the sellers was $3.4 million and $3.2 million at September 30, 2024 and June 30, 2024.

The table below summarizes the balances and line item presentation of Network1's pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets at September 30, 2024 and June 30, 2024:
September 30, 2024June 30, 2024
Network1
 (in thousands)
Assets
Prepaid expenses and other current assets$14 $14 
Other non-current assets$3,671 $3,598 
Liabilities
Accrued expenses and other current liabilities$14 $14 
Other long-term liabilities$3,671 $3,598 

(13) Income Taxes

Income taxes for the quarters ended September 30, 2024 and 2023 have been included in the accompanying condensed consolidated financial statements using an estimated annual effective tax rate. In addition to applying the estimated annual effective tax rate to pre-tax income, the Company includes certain items treated as discrete events to arrive at an estimated overall tax provision. During the quarter ended September 30, 2024, a discrete net tax benefit of $0.8 million was recorded, which is attributable to stock compensation. During the quarter ended September 30, 2023, a discrete net tax benefit of $1.5 million was recorded for additional foreign tax credits permitted as a result of the issuance of IRS Notice 2023-55.

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The Company’s effective tax rate of 26.1% for the quarter ended September 30, 2024, differs from the current federal statutory rate of 21% primarily as a result of income derived from tax jurisdictions with varying income tax rates, discrete items, nondeductible expenses and state income taxes. The Company's effective tax rate was 19.4% for the quarter ended September 30, 2023.

As of September 30, 2024, the Company is not permanently reinvested with respect to all earnings generated by foreign operations. The Company has determined that there is no material deferred tax liability for federal, state and withholding tax related to undistributed earnings. During the three months ended September 30, 2024, foreign subsidiaries did not repatriate cash to the United States. There is no certainty to the timing of any future distributions of such earnings to the U.S. in whole or in part.

The Company had approximately $1.1 million of total gross unrecognized tax benefits at September 30, 2024 and June 30, 2024. Of this total at September 30, 2024, approximately $0.9 million represents the amount of unrecognized tax benefits that are permanent in nature and, if recognized, would affect the annual effective tax rate. The Company does not believe that the total amount of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date.

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. At September 30, 2024 and June 30, 2024, the Company had approximately $1.3 million accrued for interest and penalties.

The Company conducts business globally and one or more of its subsidiaries files income tax returns in the U.S. federal, various state, local and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities in countries and states in which it operates. With certain exceptions, the Company is no longer subject to federal, state and local or non-U.S. income tax examinations by tax authorities for the years before June 30, 2019.

(14) Restructurings

In January 2024 and September 2024, as part of a strategic review of organizational structure and operations, the Company executed cost reduction and restructuring programs to align our cost structure with demand expectations in our business. The actions taken in January 2024 and September 2024 are expected to result in approximately $10.0 million and $10.5 million in annualized savings in selling, general and administrative expenses, respectively.

The following table presents the restructuring and employee separation costs incurred for the quarters ended September 30, 2024 and 2023:
Quarter ended September 30,
20242023
 (in thousands)
Employee separation and benefit costs$5,068 $— 

For the quarter ended September 30, 2024, all restructuring costs are recognized in the Corporate reporting unit and have not been allocated to the Specialty Technology Solutions or Intelisys & Advisory segments.

Accrued restructuring costs are included in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. The following table represents activity for the three months ended September 30, 2024:
Accrued Expenses
(in thousands)
Balance at June 30, 2024$1,629 
Charged to expense5,068 
Cash payments(2,078)
Balance at September 30, 2024$4,619 

The remaining balance as of September 30, 2024 of $4.6 million is expected to be paid through the third quarter of fiscal year 2027.

(15) Acquisitions

25
On August 8, 2024, ScanSource acquired Resourcive, a leading technology advisor. Resourcive delivers strategic IT sourcing solutions to mid-market and enterprise businesses, advising clients on value creation strategies that are enabled by technology. On August 15, 2024, ScanSource acquired Advantix, a VAR-focused, managed connectivity experience provider specializing in wireless enablement solutions. The combined initial purchase price of these acquisitions, net of cash acquired, was approximately $56.8 million. The Advantix acquisition is included in the Specialty Technology Solutions segment, and the Resourcive acquisition is included in the Intelisys & Advisory segment. Both acquisitions included future earnout payments, and the Company recorded contingent consideration liabilities at the acquisition dates representing the fair value of estimated amounts payable to former owners. See Note 9 - Fair Value of Financial Instruments for the related disclosures regarding the contingent consideration liabilities recognized in connection with these acquisitions.

The purchase prices were allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction dates. Intangible assets acquired include trade names, customer relationships, and developed technology. See Note 6 - Goodwill and Other Identifiable Intangible Assets for the amounts of goodwill and intangible assets recognized in connection with these acquisitions. The allocation of the purchase prices to the assets and liabilities acquired, including the valuation of the identifiable intangible assets, has not been concluded as of the reporting date. The impact of these acquisitions was not material to the consolidated financial statements. The Company recognized $0.4 million for the quarter ended September 30, 2024 in acquisition-related costs included in selling, general and administrative expenses on the Condensed Consolidated Income Statements.

(16) Business Sale

On December 19, 2023, the Company completed the sale of its UK-based intY business. The Company retained its CASCADE cloud services distribution platform which has been used to grow the Cisco and Microsoft subscription businesses in the United States and Brazil. Under the stock purchase agreement, the Company received proceeds of $17.6 million in cash for the sale, net of cash transferred. The business sale resulted in a $14.2 million gain on sale after considering the net assets sold. The impact of this sale was not material to the consolidated financial statements.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

ScanSource is a leading hybrid distributor connecting devices to the cloud and accelerating growth for customers and sales partners across hardware, SaaS, connectivity and cloud. We provide technology solutions and services from leading suppliers of mobility, barcode, POS, payments, physical security, networking, unified communications, collaboration, connectivity and cloud services to customers and sales partners located primarily in the United States, Canada and Brazil.

We operate our business under a management structure that enhances our specialty technology focus and hybrid distribution growth strategy. Our segments operate primarily in the United States, Canada and Brazil and are based on sales models:

•Specialty Technology Solutions
•Intelisys & Advisory

We offer hardware, SaaS, connectivity and cloud services from leading technology suppliers to customers and sales partners enabling solutions for end users' needs and challenges. We operate distribution facilities that support our United States and Canada business in Mississippi, California and Kentucky. Brazil distribution facilities are located in the Brazilian states of Paraná, Espirito Santo and Santa Catarina. We provide some of our digital products, which include SaaS and subscriptions, through our digital tools and platforms.

Recent Developments

On August 8, 2024, we completed the acquisition of Resourcive, a leading technology advisor. Resourcive delivers strategic IT sourcing solutions to mid-market and enterprise businesses, advising clients on value creation strategies that are enabled by technology.

On August 15, 2024, we completed the acquisition of Advantix, a VAR-focused, managed connectivity experience provider specializing in wireless enablement solutions.

26
In September 2024, as part of a strategic review of organizational structure and operations, the Company executed a cost reduction and restructuring program to align our cost structure with demand expectations in our hardware business. These actions are expected to result in approximately $10.5 million in annualized savings in selling, general and administrative expenses.

Our Strategy

Our strategy is to drive sustainable, profitable growth by orchestrating hybrid technology solutions through a growing ecosystem of partners by leveraging our people, processes and tools. Our goal is to provide exceptional experiences for our customers, suppliers and employees through operational excellence. Our hybrid distribution strategy relies on a channel sales model to offer hardware, SaaS, connectivity and cloud services from leading technology suppliers to customers that solve end users’ challenges. ScanSource enables customers to deliver solutions for their end users to address changing buying and consumption patterns. Our solutions may include a combination of offerings from multiple suppliers or give our customers access to additional services. As a trusted adviser to our customers, we provide solutions through our strong understanding of end user needs. We have plans to expand our investments in the agency channel in the near term.
27
Results of Operations

Net Sales

We have two reportable segments, which are based on sales channels. The following tables summarize our net sales results by operating segment and by geographic location for the quarters ended September 30, 2024 and 2023:
 Quarter ended September 30,
% Change, Constant Currency, Excluding Divestitures and Acquisitions (a)
Net Sales by Segment:20242023$ Change% Change
 (in thousands) 
Specialty Technology Solutions$752,299 $853,950 $(101,651)(11.9)%(11.1)%
Intelisys & Advisory23,281 22,355 926 4.1 %1.5 %
Total net sales$775,580 $876,305 $(100,725)(11.5)%(10.7)%
(a) A reconciliation of non-GAAP net sales in constant currency, excluding divestitures and acquisitions, is presented at the end of Results of Operations, under Non-GAAP Financial Information.

Specialty Technology Solutions

The Specialty Technology Solutions segment consists of sales to customers primarily in the United States, Canada and Brazil through value-added resellers. For the quarter ended September 30, 2024, net sales decreased $101.7 million, or 11.9%, compared to the prior-year period. Excluding the foreign exchange positive impact and sales from divestitures and acquisitions, adjusted net sales decreased $94.2 million, or 11.1%, for the quarter ended September 30, 2024, compared to the prior-year period. The decrease in net sales and adjusted net sales for the quarter is primarily due to continued soft demand in a more cautious technology spending environment.
Intelisys & Advisory

The Intelisys & Advisory segment consists of sales to sales partners primarily in the United States through technology services distributors and technology advisors. For the quarter ended September 30, 2024, net sales increased $0.9 million, or 4.1%, compared to the prior-year period. Excluding the foreign exchange positive impact and sales from acquisitions, adjusted net sales increased $0.3 million, or 1.5%, for the quarter ended September 30, 2024, compared to the prior-year period. The increase in net sales and adjusted net sales for the quarter is primarily due to higher Intelisys sales. Quarterly net billings for Intelisys increased 6% over the prior-year quarter to bring annualized net billings to approximately $2.74 billion.

 Quarter ended September 30,
% Change, Constant Currency, Excluding Divestitures (a)
Net Sales by Geography:20242023$ Change% Change
 (in thousands) 
United States and Canada$712,019 $791,000 $(78,981)(10.0)%(10.5)%
Brazil(b)
63,561 85,305 (21,744)(25.5)%(13.0)%
Total net sales$775,580 $876,305 $(100,725)(11.5)%(10.7)%
(a) A reconciliation of non-GAAP net sales in constant currency is presented at the end of Results of Operations in the non-GAAP section.
(b) Countries outside of Brazil represent $0.1 million, or 0.2% of sales, for the quarter ended September 30, 2024 and $2.4 million, or 2.8% of sales, for the quarter ended September 30, 2023.
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Gross Profit

The following table summarizes our gross profit for the quarters ended September 30, 2024 and 2023:

 Quarter ended September 30,% of Net Sales September 30,
 20242023$ Change% Change20242023
 (in thousands)   
Specialty Technology Solutions$78,457 $84,263 $(5,806)(6.9)%10.4 %9.9 %
Intelisys & Advisory23,162 22,245 917 4.1 %99.5 %99.5 %
Gross profit$101,619 $106,508 $(4,889)(4.6)%13.1 %12.2 %
Our gross profit is primarily affected by sales volume and gross margin mix. Gross margin mix is impacted by multiple factors, which include sales mix (proportion of sales of higher margin products or services relative to total sales), vendor program recognition (consisting of volume rebates, inventory price changes and purchase discounts) and freight costs. Increases in vendor program recognition decrease cost of goods sold, thereby increasing gross profit. Net sales derived from our Intelisys business contribute 100% to our gross profit dollars and margin as they have no associated cost of goods sold.

Specialty Technology Solutions

For the quarter ended September 30, 2024, gross profit dollars for the Specialty Technology Solutions segment declined $5.8 million, or 6.9%, compared to the prior-year quarter. Lower sales volume, after considering the associated cost of goods sold, reduced gross profit dollars by $9.2 million. Gross profit margin increased 45 basis points over the prior year quarter to 10.4%. Gross margin mix positively impacted gross profit by $3.4 million largely due to higher vendor program recognition and favorable sales mix.

Intelisys & Advisory

For the quarter ended September 30, 2024, gross profit dollars for the Intelisys & Advisory segment increased $0.9 million, or 4.1%, compared to the prior-year quarter. Higher sales volume increased gross profit dollars by $0.9 million. Gross profit margin remained consistent at 99.5%.

Operating Expenses

The following table summarizes our operating expenses for the quarters ended September 30, 2024 and 2023:
 Quarter ended September 30,% of Net Sales September 30,
 20242023$ Change% Change20242023
 (in thousands)   
Selling, general and administrative expenses$71,706 $75,436 $(3,730)(4.9)%9.2 %8.6 %
Depreciation expense2,857 2,795 62 2.2 %0.4 %0.3 %
Intangible amortization expense4,358 4,193 165 3.9 %0.6 %0.5 %
Restructuring and other charges5,068 — 5,068 100.0 %0.7 %0.0 %
Operating expenses$83,989 $82,424 $1,565 1.9 %10.8 %9.4 %
Selling, general and administrative expenses (“SG&A”) decreased by $3.7 million, or 4.9%, for the quarter ended September 30, 2024, compared to the prior-year period. The decrease for the quarter ended September 30, 2024 is primarily attributable to lower employee costs and reduced customer specific bad debt expenses in the United States and Canada.

Restructuring and other charges incurred of $5.1 million during the quarter ended September 30, 2024 related to employee separation and benefit costs in connection with our expense reduction and restructuring plans implemented in September 2024.

Operating Income

29
The following table summarizes our operating income for the quarters ended September 30, 2024 and 2023:

 Quarter ended September 30,% of Net Sales September 30,
 20242023$ Change% Change20242023
 (in thousands)   
Specialty Technology Solutions$16,738 $17,636 $(898)(5.1)%2.2 %2.1 %
Intelisys & Advisory6,413 6,649 (236)(3.5)%27.5 %29.7 %
Corporate(5,521)(201)(5,320)nm*nm*nm*
Operating income$17,630 $24,084 $(6,454)(26.8)%2.3 %2.7 %
*nm - percentages are not meaningful

Specialty Technology Solutions

For the Specialty Technology Solutions segment, operating income decreased $0.9 million, or 5.1%, for the quarter ended September 30, 2024, compared to the prior-year period. Operating margin remained at 2.2% for the quarters ended September 30, 2024 and September 30, 2023. The decrease in operating income for the quarter is primarily due to lower gross profits.

Intelisys & Advisory

For the Intelisys & Advisory segment, operating income decreased $0.2 million, or 3.5%, for the quarter ended September 30, 2024 compared to the prior-year period. Operating margin decreased to 27.5% from 29.7% for the quarter ended September 30, 2024 primarily driven by higher employee expenses for the quarter.

Corporate

For the quarter ended September 30, 2024, Corporate incurred an operating loss of $5.5 million which represents restructuring and acquisition-related costs.

Total Other (Income) Expense

The following table summarizes our total other (income) expense for the quarters ended September 30, 2024 and 2023:

 Quarter ended September 30,% of Net Sales September 30,
 20242023$ Change% Change20242023
 (in thousands)   
Interest expense$2,109 $5,585 $(3,476)(62.2)%0.3 %0.6 %
Interest income(2,659)(1,325)(1,334)100.7 %(0.3)%(0.2)%
Net foreign exchange losses334 696 (362)(52.0)%0.0 %0.1 %
Other, net(5,116)(19)(5,097)nm*(0.7)%(0.0)%
Total other (income) expense, net$(5,332)$4,937 $(10,269)(208.0)%(0.7)%0.6 %
*nm - percentages are not meaningful

Interest expense consists primarily of interest incurred on borrowings, non-utilization fees charged on the revolving credit facility and amortization of debt issuance costs. Interest expense decreased for the quarter ended September 30, 2024 compared to the prior-year period, primarily from lower average borrowings on our multi-currency revolving credit facility.

Interest income increased for the quarter ended September 30, 2024 primarily from interest earned on higher cash balances in the United States.

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Net foreign exchange gains and losses consist of foreign currency transactional and functional currency re-measurements, offset by net foreign exchange forward contracts gains and losses. Foreign exchange gains and losses are generated as the result of fluctuations in the value of the U.S. dollar versus the Brazilian real, the Canadian dollar versus the U.S. dollar, the euro versus the U.S. dollar, and the British pound versus the U.S. dollar. We partially offset foreign currency exposure with the use of foreign exchange contracts to hedge against these exposures. The costs associated with foreign exchange forward contracts are included in the net foreign exchange losses.

For the three months ended September 30, 2024, we recognized a $5.1 million gain as a result of an insurance recovery in connection with the cybersecurity attack in the fourth quarter of fiscal year 2023.

Provision for Income Taxes

For the quarter ended September 30, 2024, income tax expense was $6.0 million reflecting an effective tax rate of 26.1%. In comparison, for the quarter ended September 30, 2023, income tax expense was $3.7 million reflecting an effective tax rate of 19.4%. The increase in the effective tax rate for the quarter is primarily due to a decrease in non-taxable income and discrete items. We expect the effective tax rate, excluding discrete items, for fiscal year 2025 to be approximately 28.9% to 29.9%. See Note 13 - Income Taxes to the Notes to Consolidated Financial Statements for further discussion.

Non-GAAP Financial Information

Evaluating Financial Condition and Operating Performance

In addition to disclosing results that are determined in accordance with United States generally accepted accounting principles (“US GAAP” or “GAAP”), we also disclose certain non-GAAP financial measures. These measures include non-GAAP operating income; non-GAAP pre-tax income; non-GAAP net income; non-GAAP EPS; adjusted earnings before interest expense, income taxes, depreciation, and amortization (“adjusted EBITDA”); adjusted return on invested capital (“adjusted ROIC”); and constant currency. Constant currency is a measure that excludes the translation exchange impact from changes in foreign currency exchange rates between reporting periods. We use non-GAAP financial measures to better understand and evaluate performance, including comparisons from period to period.

These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that we report 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 US GAAP.

Adjusted Return on Invested Capital

Adjusted ROIC assists us in comparing our 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 adjusted ROIC provides useful information to investors and is an additional relevant comparison of our performance during the year.

Adjusted EBITDA starts with net income and adds back interest expense, income tax expense, depreciation expense, amortization of intangible assets, share-based compensation expense, and other non-GAAP adjustments. Since adjusted EBITDA excludes some non-cash costs of investing in our business and people, we believe that adjusted EBITDA shows the profitability from our business operations more clearly.
We calculate adjusted ROIC as adjusted EBITDA, divided by invested capital. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period. The following table summarizes annualized adjusted ROIC for the quarters ended September 30, 2024 and 2023, respectively:
  
Quarter ended September 30,
 20242023
Adjusted return on invested capital ratio, annualized (a)
13.3 %11.0 %
(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 92 days in the current and prior-year quarter.

The components of this calculation and reconciliation to our financial statements are shown on the following schedule:
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 Quarter ended September 30,
 20242023
 (in thousands)
Reconciliation of net income to adjusted EBITDA:
Net income (GAAP)$16,974 $15,432 
Plus: Interest expense2,109 5,585 
Plus: Income taxes5,988 3,715 
Plus: Depreciation and amortization7,471 7,217 
EBITDA (non-GAAP)32,542 31,949 
Plus: Share-based compensation2,471 2,769 
Plus: Acquisition and divestiture costs377 — 
Plus: Cyberattack restoration costs76 201 
Plus: Restructuring costs5,068 — 
Plus: Insurance recovery, net of payments(4,868)— 
Adjusted EBITDA (numerator for adjusted ROIC) (non-GAAP)$35,666 $34,919 

Quarter ended September 30,
 20242023
 (in thousands)
Invested capital calculations:
Equity – beginning of the quarter$924,254 $905,298 
Equity – end of the quarter920,893 915,253 
Plus: Share-based compensation, net1,856 2,068 
Plus: Cyberattack restoration costs, net57 150 
Plus: Acquisition and divestiture costs (a)
377 — 
Plus: Restructuring, net3,818 — 
Plus: Insurance recovery, net of payments(3,667)— 
Average equity923,794 911,385 
Average funded debt (b)
144,020 352,897 
Invested capital (denominator for adjusted ROIC) (non-GAAP)$1,067,814 $1,264,282 
(a) Acquisition and divestiture costs are generally non-deductible for tax purposes.
(b)Average funded debt is calculated as the daily average amounts outstanding on our short-term and long-term interest-bearing debt.

Net Sales in Constant Currency Excluding Acquisitions and Divestitures

We make references to “constant currency,” a non-GAAP performance measure that excludes the foreign exchange rate impact from fluctuations in the average foreign exchange rates between reporting periods. Constant currency is calculated by translating current period results from currencies other than the U.S. dollar into U.S. dollars using the comparable average foreign exchange rates from the prior year period. We also exclude the impact of acquisitions or divestitures prior to the first full year of operations from the acquisition or divestiture date in order to show net sales results on an organic basis. This information is provided to analyze underlying trends without the translation impact of fluctuations in foreign currency rates and the impact of acquisitions and divestitures. Below we show organic growth by providing a non-GAAP reconciliation of net sales in constant currency excluding acquisitions and divestitures:

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Net Sales by Segment:
Quarter ended September 30,
20242023$ Change% Change
Specialty Technology Solutions:(in thousands)
Net sales, reported$752,299 $853,950 $(101,651)(11.9)%
Foreign exchange impact (a)
8,645 — 
Less: Divestitures— (2,282)
Less: Acquisitions(3,512)— 
Non-GAAP net sales$757,432 $851,668 $(94,236)(11.1)%
Intelisys & Advisory:
Net sales, reported$23,281 $22,355 $926 4.1 %
Foreign exchange impact (a)
(3)— 
Less: Acquisitions(577)— 
Non-GAAP net sales$22,701 $22,355 $346 1.5 %
Consolidated:
Net sales, reported$775,580 $876,305 $(100,725)(11.5)%
Foreign exchange impact (a)
8,642 — 
Less: Divestitures— (2,282)
Less: Acquisitions(4,089)— 
Non-GAAP net sales$780,133 $874,023 $(93,890)(10.7)%
(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 September 30, 2024 into U.S. dollars using the average foreign exchange rates for the quarter ended September 30, 2023.

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Net Sales by Geography:
Quarter ended September 30,
20242023$ Change% Change
United States and Canada:(in thousands)
Net sales, as reported$712,019 $791,000 $(78,981)(10.0)%
Less: Acquisitions(4,089)— 
Non-GAAP Net sales$707,930 $791,000 $(83,070)(10.5)%
Brazil:
Net sales, reported (a)
$63,561 $85,305 $(21,744)(25.5)%
Foreign exchange impact (b)
8,642 — 
Less: Divestitures— (2,282)
Non-GAAP net sales, constant currency$72,203 $83,023 $(10,820)(13.0)%
Consolidated:
Net sales, reported (a)
$775,580 $876,305 $(100,725)(11.5)%
Foreign exchange impact (b)
8,642 — 
Less: Divestitures— (2,282)
Less: Acquisitions(4,089)— 
Non-GAAP net sales, constant currency$780,133 $874,023 $(93,890)(10.7)%
(a) Countries outside of Brazil represent $0.1 million, or 0.2% of sales, for the quarter ended September 30, 2024 and $2.4 million, or 2.8% of sales, for the quarter ended September 30, 2023.
(b) 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 September 30, 2024 into U.S. dollars using the average foreign exchange rates for the quarter ended September 30, 2023.



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Operating Income by Segment:
Quarter ended September 30,% of Net Sales September 30,
20242023$ Change% Change20242023
Specialty Technology Solutions:(in thousands)
GAAP operating income$16,738 $17,636 $(898)(5.1)%2.2 %2.1 %
Adjustments:
Amortization of intangible assets2,276 2,277 (1)
Restructuring costs— — — 
Non-GAAP operating income$19,014 $19,913 $(899)(4.5)%2.5 %2.3 %
Intelisys & Advisory:
GAAP operating income$6,413 $6,649 $(236)(3.5)%27.5 %29.7 %
Adjustments:
Amortization of intangible assets2,082 1,916 166 
Restructuring costs— — — 
Non-GAAP operating income$8,495 $8,565 $(70)(0.8)%36.5 %38.3 %
Corporate:
GAAP operating loss$(5,521)$(201)$(5,320)nm*nm*nm*
Adjustments:
Acquisition and divestiture costs377 — 377 
Restructuring costs5,068 — 5,068 
Cyberattack restoration costs76 201 (125)
Non-GAAP operating income$— $— $— nm*nm*nm*
Consolidated:
GAAP operating income$17,630 $24,084 $(6,454)(26.8)%2.3 %2.7 %
Adjustments:
Amortization of intangible assets4,358 4,193 165 
Acquisition and divestiture costs377 — 377 
Restructuring costs5,068 — 5,068 
Cyberattack restoration costs76 201 (125)
Non-GAAP operating income$27,509 $28,478 $(969)(3.4)%3.5 %3.2 %


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Additional Non-GAAP Metrics

To evaluate current period performance on a more consistent basis with prior periods, we disclose non-GAAP SG&A expenses, non-GAAP operating income, non-GAAP pre-tax income, non-GAAP net income and non-GAAP diluted earnings per share. Non-GAAP results exclude amortization of intangible assets related to divestitures, cyberattack restoration costs and other non-GAAP adjustments. These year-over-year metrics include the translation impact of changes in foreign currency exchange rates. These metrics are useful in assessing and understanding our operating performance, especially when comparing results with previous periods or forecasting performance for future periods. Below we provide a non-GAAP reconciliation of the aforementioned metrics adjusted for the costs and charges mentioned above:
Quarter ended September 30, 2024
GAAP
Measure		Intangible
amortization
expense
Acquisition and Divestiture costs (a)
Restructuring costsInsurance recoveryCyberattack
restoration costs		Non-GAAP
measure
(in thousands, except per share data)
SG&A expenses$71,706 $— $(377)$— $— $(76)$71,253 
Operating income17,630 4,358 377 5,068 — 76 27,509 
Pre-tax income22,962 4,358 377 5,068 (4,868)76 27,973 
Net income16,974 3,264 377 3,818 (3,667)57 20,823 
Diluted EPS$0.69 $0.13 $0.02 $0.15 $(0.15)$— $0.84 
Quarter ended September 30, 2023
GAAP
Measure		Intangible
amortization
expense
Acquisition and Divestiture costs (a)
Restructuring costsInsurance recoveryCyberattack
restoration costs		Non-GAAP
measure
(in thousands, except per share data)
SG&A expenses$75,436 $— $— $— $— $(201)$75,235 
Operating income24,084 4,193 — — — 201 28,478 
Pre-tax income19,147 4,193 — — — 201 23,541 
Net income15,432 3,146 — — — 150 18,728 
Diluted EPS$0.61 $0.12 $— $— $— $0.01 $0.74 
(a) Acquisition and divestiture costs for the quarters ended September 30, 2024 and 2023 are generally nondeductible for tax purposes.
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Liquidity and Capital Resources

Our primary sources of liquidity are cash flows from operations and borrowings under our $350 million revolving credit facility. Our business requires significant investment in working capital, particularly accounts receivable and inventory, partially financed through our accounts payable to vendors, cash generated from operations and revolving lines of credit. In general, as our sales volume increases, our net investment in working capital increases, which typically results in decreased cash flow from operating activities. Conversely, when sales volume decreases, our net investment in working capital typically decreases, which typically results in increased cash flow from operating activities.

Our cash and cash equivalents balance totaled $145.0 million at September 30, 2024, compared to $185.5 million at June 30, 2024, including $32.6 million and $20.0 million held outside of the United States at September 30, 2024 and June 30, 2024, respectively. Checks released but not yet cleared in the amount of $0.3 million and $5.9 million are included in accounts payable at September 30, 2024 and June 30, 2024, respectively.

We conduct business primarily in the United States, Canada and Brazil where we generate and use cash. We provide for United States income taxes from the earnings of our Canadian and Brazilian subsidiaries. See Note 13 - Income Taxes in the Notes to the Consolidated Financial Statements for further discussion.

Our net investment in working capital, defined as accounts receivable plus inventories less accounts payable, decreased $13.6 million to $492.5 million at September 30, 2024 from $506.2 million at June 30, 2024, primarily from decreases in inventory and accounts receivable, partially offset by lower accounts payable, as a result of lower sales volume reflecting the results of our multi-quarter working capital improvement plan. Our net investment in working capital is affected by several factors such as fluctuations in sales volume, net income, timing of collections from customers, increases and decreases to inventory levels and payments to vendors.

Three months ended
September 30,
20242023
(in thousands)
Cash provided by (used in):
Operating activities$44,830 $93,533 
Investing activities(59,224)(2,315)
Financing activities(26,630)(83,493)

Operating cash flows are subject to variability period over period as a result of the timing of payments related to accounts receivable, accounts payable, and other working capital items. Net cash provided by operating activities was $44.8 million and $93.5 million for the three months ended September 30, 2024 and September 30, 2023, respectively. Cash provided by operating activities for the three months ended September 30, 2024 is primarily attributable to net income adjusted for non-cash items plus reductions in accounts receivable and inventory partially offset by a reduction in accounts payable. Compared to September 30, 2023, accounts receivable and inventory decreased 18.0% and 23.2% respectively, while accounts payable decreased 6.3%.

The number of days sales outstanding ("DSO") was 66 days at September 30, 2024, compared to 71 days at June 30, 2024 and 71 days at September 30, 2023. Inventory turned 5.3 times during the quarter ended September 30, 2024, compared to 5.0 times during the quarter ended June 30, 2024 and 4.4 times in the prior-year quarter ended September 30, 2023.

Cash used in investing activities for the three months ended September 30, 2024 was $59.2 million, compared to $2.3 million used in investing activities in the prior-year period. Cash used in investing activities for the three months ended September 30, 2024 is largely due to cash paid for acquisitions and capital expenditures. Cash used in investing activities for the three months ended September 30, 2023 represents capital expenditures.

Management expects capital expenditures for fiscal year 2025 to range from $10.0 million to $15.0 million, primarily for IT investments.

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For the three months ended September 30, 2024 and September 30, 2023, cash used in financing activities totaled $26.6 million and $83.5 million, respectively. Cash used in financing activities for the three months ended September 30, 2024 is primarily attributable to common stock repurchases in the quarter. Cash used in financing activities for the three months ended September 30, 2023 is primarily attributable to net borrowings on the revolving credit facility.

Credit Facility

We have a multi-currency senior secured credit facility with JPMorgan Chase Bank N.A., as administrative agent, and a syndicate of banks (as amended, the “Amended Credit Agreement”). On September 28, 2022, we amended and restated our Amended Credit Agreement, which includes (i) a five-year, $350 million multicurrency senior secured revolving credit facility and (ii) a five-year $150 million senior secured term loan facility. The Amended Credit Agreement extended the credit facility maturity date to September 28, 2027. In addition, pursuant to an “accordion feature,” we may increase our borrowing limits up to an additional $250 million, subject to obtaining additional credit commitments from the lenders participating in the increase. The Amended Credit Agreement allows for the issuance of up to $50 million for letters of credit. Borrowings under the Amended Credit Agreement are guaranteed by substantially all of our domestic subsidiaries and secured by substantially all of our domestic assets. Under the terms of the revolving credit facility, the payment of cash dividends is restricted. We incurred debt issuance costs of $1.4 million in connection with the amendment and restatement of the Amended Credit Agreement. These costs were capitalized to other non-current assets on the Condensed Consolidated Balance Sheets and added to the unamortized debt issuance costs from the previous credit facility.

Loans denominated in U.S. dollars, other than swingline loans, bear interest at a rate per annum equal to, at our option, (i) the adjusted term SOFR or adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon our ratio of (A) total consolidated debt less up to $30 million of unrestricted domestic cash to (B) trailing four-quarter consolidated EBITDA measured as of the end of the most recent year or quarter, as applicable, for which financial statements have been delivered to the Lenders (the “leverage ratio”); or (ii) the alternate base rate plus an additional margin ranging from 0% to 0.75%, depending upon our leverage ratio, plus, if applicable, certain mandatory costs. All swingline loans denominated in U.S. dollars bear interest based upon the adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon our leverage ratio, or such other rate as agreed upon with the applicable swingline lender. The adjusted term SOFR and adjusted daily simple SOFR include a fixed credit adjustment of 0.10% over the applicable SOFR reference rate. Loans denominated in foreign currencies bear interest at a rate per annum equal to the applicable benchmark rate set forth in the Amended Credit Agreement plus an additional margin ranging from 1.00% to 1.75%, depending upon our leverage ratio plus, if applicable, certain mandatory costs.

During the quarter ended September 30, 2024, our borrowings under the Amended Credit Agreement were U.S. dollar loans. The spread in effect as of September 30, 2024 was 1.00% for SOFR-based loans and 0.00% for alternate base rate loans. The commitment fee rate in effect at September 30, 2024 was 0.15%. The Amended Credit Agreement includes customary representations, warranties and affirmative and negative covenants, including financial covenants. Specifically, our Leverage Ratio must be less than or equal to 3.50 to 1.00 at all times. In addition, our Interest Coverage Ratio (as such term is defined in the Amended Credit Agreement) must be at least 3.00 to 1.00 at the end of each fiscal quarter. In the event of a default, customary remedies are available to the lenders, including acceleration and increased interest rates. We were in compliance with all covenants under the credit facility at September 30, 2024.

The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, during the quarters ended September 30, 2024 and 2023 was $144.0 million and $200.9 million, respectively. There was $350.0 million and $349.9 million available for additional borrowings as of September 30, 2024 and June 30, 2024, respectively. The effective interest rates for the revolving line of credit were 5.95% and 6.44% as of September 30, 2024 and June 30, 2024, respectively. There were no letters of credit issued under the multi-currency revolving credit facility at September 30, 2024 or June 30, 2024. Availability to use this borrowing capacity depends upon, among other things, the levels of our Leverage Ratio and Interest Coverage Ratio, which, in turn, will depend upon (1) our Credit Facility Net Debt relative to our Credit Facility EBITDA and (2) Credit Facility EBITDA relative to total interest expense, respectively. As a result, our availability will increase if EBITDA increases (subject to the limit of the facility) and decrease if EBITDA decreases. While we were in compliance with the financial covenants contained in the Amended Credit Agreement as of September 30, 2024, and currently expect to continue to maintain such compliance, should we encounter difficulties, our historical relationship with our Amended Credit Agreement lending group has been strong and we anticipate their continued support of our long-term business.

Summary
We believe that our existing sources of liquidity, including cash resources and cash provided by operating activities, supplemented as necessary with funds under our credit agreements, will provide sufficient resources to meet our present and
38
future working capital and cash requirements for at least the next twelve months. We also believe that our longer-term working capital, planned expenditures and other general funding requirements will be satisfied through cash flows from operations and, to the extent necessary, from our borrowing facilities.

Accounting Standards Recently Issued

See Note 1 of the Notes to Condensed Consolidated Financial Statements for a full description of recent accounting pronouncements, including the anticipated dates of adoption and the effects on our consolidated financial position and results of operations.

Critical Accounting Policies and Estimates

Critical accounting policies are those that are important to our financial condition and require management's most difficult, subjective or complex judgments. Different amounts would be reported under different operating conditions or under alternative assumptions. See Management's Discussion and Analysis of Financial Condition and Results from Operations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 for a complete discussion.
39
Item 3.Quantitative and Qualitative Disclosures About Market Risk

For a description of our market risks, see Part II, Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024. No material changes have occurred to our market risks since June 30, 2024.
40
Item 4.Controls and Procedures

An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") of the effectiveness of our disclosure controls and procedures at September 30, 2024. Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures are effective at September 30, 2024. During the quarter ended September 30, 2024, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

41
PART II. OTHER INFORMATION

Item 1.Legal Proceedings

The Company is, from time to time, party to lawsuits arising out of operations. Although there can be no assurance, based upon information known to us, we believe that any liability resulting from an adverse determination of such lawsuits would not have a material adverse effect on our financial condition or results of operations. For a description of our material legal proceedings, see Note 12 - Commitments and Contingencies in the notes to the condensed consolidated financial statements, which is incorporated herein by reference.

Item 1A.Risk Factors

In addition to the risk factors discussed in our other reports and statements that we file with the SEC, you should carefully consider the factors discussed in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended June 30, 2024, which could materially affect our business, financial condition and/or future operating results.

There have been no material changes to the risk factors disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Share Repurchases

In August 2021, our Board of Directors authorized a $100 million share repurchase program all of which have been repurchased. In May 2024, our Board of Directors approved a new $100.0 million share repurchase authorization. The authorization does not have any time limit.

The following table presents the share-repurchase activity for the quarter ended September 30, 2024 (in thousands except share and per share data):

Period
Total number of shares purchased (1)
Average price paid per shareTotal number of shares purchased as part of the publicly announced plan or programApproximate dollar value of shares that may yet be purchased under the plan or program
July 1 - 31, 2024219,906 $ 46.49219,906 $ 112,925,332
August 1- 31, 2024318,748 $ 48.42219,963 $ 102,274,946
September 1 - 30, 2024148,267 $ 47.50148,149 $ 95,237,613
Total686,921 588,018 $ 95,237,613
(1) Shares withheld from employees' stock-based awards to satisfy required tax withholding obligations totaled 98,785 for the month of August 2024 and 118 for the month of September 2024. There were no shares withheld during the month of July 2024.

Dividends

We have never declared or paid a cash dividend. Under the terms of our credit facility, the payment of cash dividends is restricted.
42

Item 5.Other Information

During the three months ended September 30, 2024, none of our directors or our officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).
43

Item 6.Exhibits
Exhibit
Number		Description
31.1
31.2
32.1
32.2
101
The following materials from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at September 30, 2024 and June 30, 2024; (ii) the Condensed Consolidated Income Statements for the quarters ended September 30, 2024 and 2023; (iii) the Condensed Consolidated Statements of Comprehensive Income for the quarters ended September 30, 2024 and 2023; (iv) the Condensed Consolidated Statements of Shareholder's Equity at September 30, 2024 and 2023; (v) the Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2024 and 2023; and (vi) the Notes to the Condensed Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL
104Cover page Inline XBRL File (Included in Exhibit 101)
44
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.
Date:November 7, 2024/s/ MICHAEL L. BAUR
 Michael L. Baur
Chair and Chief Executive Officer
(Principal Executive Officer)
Date:November 7, 2024/s/ STEVE JONES
Steve Jones
Senior Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date:November 7, 2024/s/ BRANDY FORD
Brandy Ford
Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)
45
Exhibit 31.1

Certification Pursuant to Rule 13a-14(a) or 15d-14(a)
of the Exchange Act, as adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
I, Michael L. Baur, certify that:
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
Chairman and Chief Executive Officer
(Principal Executive Officer)
Date: November 7, 2024


Exhibit 31.2

Certification Pursuant to Rule 13a-14(a) or 15d-14(a)
of the Exchange Act, as adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
I, Steve Jones, certify that:
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/ STEVE JONES
Steve Jones
Senior Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Date: November 7, 2024


Exhibit 32.1
Certification of the Chief Executive Officer of ScanSource, Inc.
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to § 906
of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of ScanSource, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
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:November 7, 2024/s/ MICHAEL L. BAUR
Michael L. Baur
Chairman and Chief Executive Officer
(Principal Executive Officer)

This certification is being furnished solely to comply with the provisions of § 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the accompanying Report, including for purposes of Section 18 of the Exchange Act, or as a separate disclosure document. A signed original of this written certification required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written certification required by Section 906, has been provided to the Company and will be rendered by the Company and furnished to the Securities and Exchange Commission or its staff upon request.


Exhibit 32.2

Certification of the Chief Financial Officer of ScanSource, Inc.
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to § 906
of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of ScanSource, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
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:November 7, 2024/s/ STEVE JONES
Steve Jones
Senior Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

This certification is being furnished solely to comply with the provisions of § 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the accompanying Report, including for purposes of Section 18 of the Exchange Act, or as a separate disclosure document. A signed original of this written certification required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written certification required by Section 906, has been provided to the Company and will be rendered by the Company and furnished to the Securities and Exchange Commission or its staff upon request.


v3.24.3
Cover - shares
 3 Months Ended
Sep. 30, 2024
Nov. 04, 2024
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 000-26926  
Entity Registrant Name ScanSource, Inc.  
Entity Incorporation, State or Country Code SC  
Entity Tax Identification Number 57-0965380  
Entity Address, Address Line One 6 Logue Court  
Entity Address, City or Town Greenville  
Entity Address, State or Province SC  
Entity Address, Postal Zip Code 29615  
City Area Code 864  
Local Phone Number 288-2432  
Title of 12(b) Security Common Stock, no par value  
Trading Symbol SCSC  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding (in shares)   0
Entity Central Index Key 0000918965  
Current Fiscal Year End Date --06-30  
Document Fiscal Year Focus 2025  
Document Fiscal Period Focus Q1  
Amendment Flag false  
v3.24.3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Thousands
Sep. 30, 2024
Jun. 30, 2024
Current assets:    
Cash and cash equivalents $ 145,044 $ 185,460
Accounts receivable, less allowance of $22,721 at September 30, 2024 and $20,684 at June 30, 2024 567,127 581,523
Inventories 504,078 512,634
Prepaid expenses and other current assets 136,110 125,082
Total current assets 1,352,359 1,404,699
Property and equipment, net 32,940 33,501
Goodwill 232,856 206,301
Identifiable intangible assets, net 77,800 37,634
Deferred income taxes 17,490 19,902
Other non-current assets 73,064 76,995
Total assets 1,786,509 1,779,032
Current liabilities:    
Accounts payable 578,657 587,984
Accrued expenses and other current liabilities 69,326 65,616
Current portion of contingent consideration 1,911 0
Income taxes payable 6,376 7,895
Current portion of long-term debt 9,736 7,857
Total current liabilities 666,006 669,352
Long-term debt, net of current portion 133,913 136,149
Borrowings under revolving credit facility 0 50
Long-term portion of contingent consideration 15,289 0
Other long-term liabilities 50,408 49,226
Total liabilities 865,616 854,777
Commitments and contingencies
Shareholders’ equity:    
Preferred stock, no par value; 3,000,000 shares authorized, none issued 0 0
Common stock, no par value; 45,000,000 shares authorized, 24,005,107 and 24,243,848 shares issued and outstanding at September 30, 2024 and June 30, 2024, respectively 2,975 26,370
Retained earnings 1,030,712 1,013,738
Accumulated other comprehensive loss (112,794) (115,853)
Total shareholders’ equity 920,893 924,255
Total liabilities and shareholders’ equity $ 1,786,509 $ 1,779,032
v3.24.3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2024
Jun. 30, 2024
Current assets:    
Allowance for accounts receivable $ 22,721 $ 20,684
Shareholders’ equity:    
Preferred stock, shares authorized (in shares) 3,000,000 3,000,000
Preferred stock, shares issued (in shares) 0 0
Common stock, shares authorized (in shares) 45,000,000 45,000,000
Common stock, share issued (in shares) 24,005,107 24,243,848
Common stock, shares outstanding (in shares) 24,005,107 24,243,848
v3.24.3
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Income Statement [Abstract]    
Net sales $ 775,580 $ 876,305
Cost of goods sold 673,961 769,797
Gross profit 101,619 106,508
Selling, general and administrative expenses 71,706 75,436
Depreciation expense 2,857 2,795
Intangible amortization expense 4,358 4,193
Restructuring expense 5,068 0
Operating income 17,630 24,084
Interest expense 2,109 5,585
Interest income (2,659) (1,325)
Other (income) expense, net (4,782) 677
Income before income taxes 22,962 19,147
Provision for income taxes 5,988 3,715
Net income $ 16,974 $ 15,432
Per share data:    
Net income per common share, basic (in dollars per share) $ 0.70 $ 0.62
Weighted-average shares outstanding, basic (in shares) 24,147 24,886
Net income per common share, diluted (in dollars per share) $ 0.69 $ 0.61
Weighted-average shares outstanding, diluted (in shares) 24,646 25,178
v3.24.3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Statement of Comprehensive Income [Abstract]    
Net income $ 16,974 $ 15,432
Unrealized (loss) gain on hedged transaction, net of tax (1,050) 153
Foreign currency translation adjustment 4,109 (6,890)
Comprehensive income $ 20,033 $ 8,695
v3.24.3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($)
$ in Thousands
Total
Common Stock
Retained Earnings
Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Jun. 30, 2023   24,844,203    
Beginning balance at Jun. 30, 2023 $ 905,298 $ 58,241 $ 936,678 $ (89,621)
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net income 15,432   15,432  
Unrealized (loss) gain on hedged transaction, net of tax 153     153
Foreign currency translation adjustment (6,890)     (6,890)
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares)   116,028    
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (1,510) $ (1,510)    
Share-based compensation 2,770 $ 2,770    
Ending balance (in shares) at Sep. 30, 2023   24,960,231    
Ending balance at Sep. 30, 2023 915,253 $ 59,501 952,110 (96,358)
Beginning balance (in shares) at Jun. 30, 2024   24,243,848    
Beginning balance at Jun. 30, 2024 924,255 $ 26,370 1,013,738 (115,853)
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net income 16,974   16,974  
Unrealized (loss) gain on hedged transaction, net of tax (1,050)     (1,050)
Foreign currency translation adjustment 4,109     4,109
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares)   349,277    
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes 2,177 $ 2,177    
Common stock repurchased (in shares)   (588,018)    
Common stock repurchased (28,043) $ (28,043)    
Share-based compensation 2,471 $ 2,471    
Ending balance (in shares) at Sep. 30, 2024   24,005,107    
Ending balance at Sep. 30, 2024 $ 920,893 $ 2,975 $ 1,030,712 $ (112,794)
v3.24.3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Cash flows from operating activities:    
Net income $ 16,974 $ 15,432
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 7,471 7,217
Amortization of debt issue costs 96 96
Provision for doubtful accounts 1,678 4,157
Share-based compensation 2,471 2,769
Deferred income taxes 2,433 1,303
Finance lease interest 25 15
Changes in operating assets and liabilities:    
Accounts receivable 20,606 53,284
Inventories 9,524 99,630
Prepaid expenses and other assets (1,952) (7,743)
Other non-current assets 3,285 11,227
Accounts payable (17,002) (70,292)
Accrued expenses and other liabilities 744 (21,764)
Income taxes payable (1,523) (1,798)
Net cash provided by operating activities 44,830 93,533
Cash flows from investing activities:    
Capital expenditures (2,375) (2,315)
Cash paid for business acquisitions, net of cash acquired (56,849) 0
Net cash used in investing activities (59,224) (2,315)
Cash flows from financing activities:    
Borrowings on revolving credit, net of expenses 8,381 588,570
Repayments on revolving credit, net of expenses (8,430) (669,424)
Repayments on long-term debt (357) (938)
Repayments on finance lease obligation (275) (191)
Exercise of stock options 6,971 72
Taxes paid on settlement of equity awards (4,794) (1,582)
Common stock repurchased (28,126) 0
Net cash used in financing activities (26,630) (83,493)
Effect of exchange rate changes on cash and cash equivalents 608 (1,256)
(Decrease) increase in cash and cash equivalents (40,416) 6,469
Cash and cash equivalents at beginning of period 185,460 36,178
Cash and cash equivalents at end of period $ 145,044 $ 42,647
v3.24.3
Business and Summary of Significant Accounting Policies
 3 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Business and Summary of Significant Accounting Policies Business and Summary of Significant Accounting Policies
Business Description

ScanSource, Inc. (together with its subsidiaries referred to as “the Company” or “ScanSource”) is a leading hybrid distributor connecting devices to the cloud and accelerating growth for partners across hardware, Software as a Service ("SaaS"), connectivity and cloud. The Company brings technology solutions and services from the world’s leading suppliers of mobility and barcode, point-of-sale ("POS"), payments, networking, security, unified communications and collaboration, connectivity and cloud services to market. The Company operates primarily in the United States, Canada and Brazil. The Company's two operating segments, Specialty Technology Solutions and Intelisys & Advisory, represent the different sales models the Company uses in executing its hybrid distribution growth strategy.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared by the Company’s management in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position at September 30, 2024 and June 30, 2024, the results of operations for the quarters ended September 30, 2024 and 2023, the condensed consolidated statements of comprehensive income for the quarters ended September 30, 2024 and 2023, the condensed consolidated statements of shareholders' equity for the quarters ended September 30, 2024 and 2023 and the condensed consolidated statements of cash flows for the quarters ended September 30, 2024 and 2023. The results of operations for the quarter ended September 30, 2024 are not necessarily indicative of the results to be expected for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024. Unless otherwise indicated, disclosures provided in the notes to the Company's consolidated financial statements pertain to continuing operations only.

Segment Changes

Effective July 1, 2024, the Company realigned its operating segments to represent the different sales models it uses in executing its hybrid distribution growth strategy. The two realigned segments are Specialty Technology Solutions and Intelisys & Advisory. The Specialty Technology Solutions segment combines the Company's former segments, with the exception of the Company's Intelisys business. The Intelisys & Advisory segment includes the Intelisys and technology advisors businesses, including Channel Exchange (formerly known as intY USA), RPM and Resourcive. Both segments include recurring revenue.

The Company has reclassified certain prior year amounts in the segment results to conform with the current year presentation. These reclassifications had no effect on the condensed consolidated financial results. See Note 10 - Segment Information for descriptions of the Company's segments.

Summary of Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies for the quarter ended September 30, 2024 from the policies described in the notes to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2024. For a discussion of the Company’s significant accounting policies, please see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Cash and Cash Equivalents
The Company considers all highly-liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. The Company maintains zero-balance disbursement accounts at various financial institutions at which the Company does not maintain significant depository relationships. Due to the terms of the agreements governing these accounts, the Company generally does not have the right to offset outstanding checks written from these accounts against cash on hand, and the respective institutions are not legally obligated to honor the checks until sufficient funds are transferred to fund the checks. As a result, checks released but not yet cleared from these accounts in the amount of $0.3 million and $5.9 million are included in accounts payable on the condensed consolidated balance sheets at September 30, 2024 and June 30, 2024, respectively.

Long-lived Assets

The Company presents depreciation expense and intangible amortization expense on the condensed consolidated income statements. The Company's depreciation expense related to selling, general and administrative costs totaled $2.9 million and $2.8 million for the quarters ended September 30, 2024 and September 30, 2023, respectively. Depreciation expense reported as part of cost of goods sold on the condensed consolidated income statements totaled $0.3 million and $0.2 million for the quarters ended September 30, 2024 and September 30, 2023, respectively. The Company's intangible amortization expense reported on the condensed consolidated income statements relates to selling, general and administrative costs, not the cost of selling goods. Intangible amortization expense totaled $4.4 million and $4.2 million for the quarters ended September 30, 2024 and September 30, 2023, respectively.

Recent Accounting Pronouncements

In July 2023, the Securities and Exchange Commission issued final rules that require new and enhanced disclosures on cybersecurity risk management, strategy, governance, and incident reporting. Under the final rules, companies must report a material cybersecurity incident on Form 8-K within four business days of determining that such cybersecurity incident is material. To the extent the nature, scope, timing or the impact of the incident is not determinable at the time such Form 8-K is required to be filed, additional information about the material aspects of the cybersecurity incident must be filed on a Form 8-K/A within four business days after such additional information becomes available. Companies must also disclose their cybersecurity processes, management's role in cybersecurity governance, and cybersecurity oversight by the Board of Directors on Form 10-K. The Company adopted these rules for the fiscal year ended June 30, 2024.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. This ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. This ASU is applicable to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and subsequent interim periods, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU updates income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and is applicable to the Company’s fiscal year beginning July 1, 2025, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

The Company has reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on its consolidated financial statements as a result of future adoption.
v3.24.3
Trade Accounts and Notes Receivable, Net
 3 Months Ended
Sep. 30, 2024
Receivables [Abstract]  
Trade Accounts and Notes Receivable, Net Trade Accounts and Notes Receivable, Net
The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from customers’ failure to make payments on accounts receivable due to the Company. The Company has notes receivable with certain customers, which are included in “Accounts receivable, less allowance” in the Condensed Consolidated Balance Sheets.

Management determines the estimate of the allowance for doubtful accounts receivable by considering a number of factors, including: (i) historical experience, (ii) aging of the accounts receivable, (iii) specific information obtained by the Company on
the financial condition and the current creditworthiness of its customers, (iv) the current economic and country-specific environment and (v) reasonable and supportable forecasts about collectability. Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model. Receivables that do not share risk characteristics are evaluated on an individual basis. Estimates of expected credit losses on trade receivables over the contractual life are recorded at inception and adjusted over the contractual life.

The changes in the allowance for doubtful accounts for the three months ended September 30, 2024 are set forth in the table below.
June 30, 2024Amounts Charged to ExpenseWrite-offs
Other (1)
September 30, 2024
(in thousands)
Trade accounts and current notes receivable allowance$20,684 $1,678 $(153)$512 $22,721 
(1)"Other" amounts include recoveries and the effect of foreign currency fluctuations for the three months ended September 30, 2024.
v3.24.3
Revenue Recognition
 3 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
The Company provides technology solutions and services from the leading global suppliers of mobility, barcode, POS, payments, physical security, unified communications, collaboration, connectivity and cloud services. This includes hardware, related accessories and device configuration as well as software licenses, professional services and hardware support programs.

In determining the appropriate amount of revenue to recognize, the Company applies the following five-step model in accordance with ASC 606: (i) identify contracts with customers; (ii) identify performance obligations in the contracts; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations per the contracts; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company recognizes revenue as control of products and services are transferred to customers, which is generally at the point of shipment. The Company delivers products to customers in several ways, including: (i) shipment from a Company warehouse, (ii) drop-shipment directly from the supplier, or (iii) electronic delivery for non-physical products.

Principal versus Agent Considerations

The Company is the principal for sales of all hardware and certain software and services. The Company considers itself the principal in those transactions where it has control of the product or service before it is transferred to the customer. The Company recognizes the principal-associated revenue and cost of goods sold on a gross basis.

The Company is the agent for third-party service contracts, including product warranties and supplier-hosted software. These service contracts are sold separately from the products, and the Company often serves as the agent for the contract on behalf of the original equipment manufacturer. The Company's responsibility is to arrange for the provision of the specified service by the original equipment manufacturer, and the Company does not control the specified service before it is transferred to the customer. Because the Company acts as an agent, revenue is recognized net of cost at the time of sale. The Intelisys business operates under an agency model.

Variable Considerations

For certain transactions, products are sold with a right of return and may also provide other rebates or incentives, which are accounted for as variable consideration. The Company estimates a returns allowance based on historical experience and reduces revenue accordingly. The Company estimates the amount of variable consideration for rebates and incentives by using the expected value to be given to the customer and reduces the revenue by those estimated amounts. These estimates are reviewed and updated as necessary at the end of each reporting period.

Contract Balances

The Company records contract assets and liabilities for payments received from customers in advance of services performed. These assets and liabilities are the result of the sales of the Company's self-branded warranty programs and other transactions where control has not yet passed to the customer. These amounts are immaterial to the consolidated financial statements for the periods presented.
Disaggregation of Revenue

The following tables represent the Company's disaggregation of revenue:

Quarter ended September 30, 2024
Specialty Technology SolutionsIntelisys & AdvisoryTotal
(in thousands)
Revenue by product/service
Products and services$740,734 $833 $741,567 
Recurring revenue(a)
11,565 22,448 34,013 
$752,299 $23,281 $775,580 
Quarter ended September 30, 2023
Specialty Technology SolutionsIntelisys & AdvisoryTotal
(in thousands)
Revenue by product/service
Products and services$846,835 $839 $847,674 
Recurring revenue(a)
7,115 21,516 28,631 
$853,950 $22,355 $876,305 
(a) Recurring revenue represents revenue primarily from agency commissions, SaaS, subscriptions, and hardware rentals.
v3.24.3
Earnings Per Share
 3 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Earnings Per Share Earnings Per Share
Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share are computed by dividing net income by the weighted-average number of common and potential common shares outstanding.

Quarter ended
 September 30,
 20242023
 (in thousands, except per share data)
Numerator:
Net income$16,974 $15,432 
Denominator:
Weighted-average shares, basic24,147 24,886 
Dilutive effect of share-based payments499 292 
Weighted-average shares, diluted24,646 25,178 
Net income per common share, basic$0.70 $0.62 
Net income per common share, diluted$0.69 $0.61 
For the quarters ended September 30, 2024 and 2023, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 109,450 and 854,893, respectively.
v3.24.3
Accumulated Other Comprehensive Loss
 3 Months Ended
Sep. 30, 2024
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss, net of tax are as follows: 
September 30, 2024June 30, 2024
 (in thousands)
Foreign currency translation adjustment$(113,777)$(117,885)
Unrealized gain on hedged transaction, net of tax983 2,032 
Accumulated other comprehensive loss$(112,794)$(115,853)
The tax effect of amounts in comprehensive loss reflect a tax benefit as follows:
Quarter ended September 30,
20242023
(in thousands)
Tax benefit$(363)$(54)
v3.24.3
Goodwill and Other Identifiable Intangible Assets
 3 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Identifiable Intangible Assets Goodwill and Other Identifiable Intangible Assets
The changes in the carrying amount of goodwill for the three months ended September 30, 2024, by reporting segment, are set forth in the table below.
Specialty Technology SolutionsIntelisys & AdvisoryTotal
 (in thousands)
Balance at June 30, 2024$146,108 $60,193 $206,301 
Additions16,048 9,078 25,126 
Foreign currency translation adjustment245 1,184 1,429 
Balance at September 30, 2024$162,401 $70,455 $232,856 

The following table shows changes in the amount recognized for net identifiable intangible assets for the three months ended September 30, 2024.
Net Identifiable Intangible Assets
(in thousands)
Balance at June 30, 2024$37,634 
Additions44,500 
Amortization expense(4,358)
Foreign currency translation adjustment24 
Balance at September 30, 2024$77,800 
v3.24.3
Short-Term Borrowings and Long-Term Debt
 3 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Short-Term Borrowings and Long-Term Debt Short-Term Borrowings and Long-Term Debt
The following table presents the Company’s debt at September 30, 2024 and June 30, 2024.

September 30, 2024June 30, 2024
(in thousands)
Current portion of long-term debt$9,736 $7,857 
Mississippi revenue bond, net of current portion2,663 3,024 
Senior secured term loan facility, net of current portion131,250 133,125 
Borrowings under revolving credit facility— 50 
Total debt$143,649 $144,056 
Credit Facility

The Company has a multi-currency senior secured credit facility (as amended, the "Amended Credit Agreement") with JPMorgan Chase Bank N.A., as administrative agent (the "Administrative Agent"), and a syndicate of banks (collectively the "Lenders"). On September 28, 2022, the Company amended and restated the Amended Credit Agreement, which includes (i) a five-year, $350 million multicurrency senior secured revolving credit facility and (ii) a five-year $150 million senior secured term loan facility. The Amended Credit Agreement extended the credit facility maturity date to September 28, 2027. In addition, pursuant to an “accordion feature,” the Company may increase its borrowing limit by up to an additional $250 million, subject to obtaining additional credit commitments from the lenders participating in the increase. The Amended Credit Agreement allows for the issuance of up to $50 million for letters of credit. Borrowings under the Amended Credit Agreement are guaranteed by substantially all of the domestic subsidiaries of the Company and secured by their assets. Under the terms of the revolving credit facility, the payment of cash dividends is restricted. The Company incurred debt issuance costs of $1.4 million in connection with the amendment and restatement of the Amended Credit Agreement. These costs were capitalized to other non-current assets on the Condensed Consolidated Balance Sheets and added to the unamortized debt issuance costs from the previous credit facility.

Loans denominated in U.S. dollars, other than swingline loans, bear interest at a rate per annum equal to, at the Company’s option, (i) the adjusted term Secured Overnight Financing Rate ("SOFR") or adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon the Company’s ratio of (A) total consolidated debt less up to $30 million of unrestricted domestic cash to (B) trailing four-quarter consolidated EBITDA measured as of the end of the most recent year or quarter, as applicable, for which financial statements have been delivered to the Lenders (the “leverage ratio”); or (ii) the alternate base rate plus an additional margin ranging from 0% to 0.75%, depending upon the Company’s leverage ratio, plus, if applicable, certain mandatory costs. All swingline loans denominated in U.S. dollars bear interest based upon the adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon the Company's leverage ratio, or such other rate as the Company and the applicable swingline lender may agree. The adjusted term SOFR and adjusted daily simple SOFR include a fixed credit adjustment of 0.10% over the applicable SOFR reference rate. Loans denominated in foreign currencies bear interest at a rate per annum equal to the applicable benchmark rate set forth in the Amended Credit Agreement plus an additional margin ranging from 1.00% to 1.75%, depending upon the Company’s leverage ratio plus, if applicable, certain mandatory costs.

During the quarter ended September 30, 2024, all of the Company's borrowings under the Amended Credit Agreement were U.S. dollar loans. The spread in effect as of September 30, 2024 was 1.00%, plus a 0.10% credit spread adjustment for SOFR-based loans and 0.00% for alternate base rate loans. The commitment fee rate in effect at September 30, 2024 was 0.15%. The effective interest rates for the term loan were 5.95% and 6.44% as of September 30, 2024 and June 30, 2024, respectively. The Amended Credit Agreement includes customary representations, warranties and affirmative and negative covenants, including financial covenants. Specifically, the Company’s Leverage Ratio must be less than or equal to 3.50 to 1.00 at all times. In addition, the Company’s Interest Coverage Ratio (as such term is defined in the Amended Credit Agreement) must be at least 3.00 to 1.00 at the end of each fiscal quarter. In the event of a default, customary remedies are available to the lenders, including acceleration and increased interest rates. The Company was in compliance with all covenants under the Amended Credit Agreement at September 30, 2024.

The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, during the three month periods ended September 30, 2024 and 2023 was $144.0 million and $200.9 million, respectively. There was $350.0 million and $349.9 million available for additional borrowings as of September 30, 2024 and June 30, 2024, respectively. The effective interest rates for the revolving line of credit were 5.95% and 6.44% as of September 30, 2024 and June 30, 2024, respectively. There were no letters of credit issued under the multi-currency revolving credit facility at September 30, 2024 or June 30, 2024.

Mississippi Revenue Bond

On August 1, 2007, the Company entered into an agreement with the State of Mississippi to provide financing for the acquisition and installation of certain equipment to be utilized at the Company’s Southaven, Mississippi warehouse, through the issuance of an industrial development revenue bond. The bond matures on September 1, 2032. The bond accrues interest at the one-month term SOFR plus an adjustment of 0.10% plus a spread of 0.85%. The agreement also provides the bondholder with a put option, exercisable only within 180 days of each fifth anniversary of the agreement, requiring the Company to pay back the bonds at 100% of the principal amount outstanding. At September 30, 2024, the Company was in compliance with all covenants under this bond. The interest rates at September 30, 2024 and June 30, 2024 were 6.15% and 6.28%, respectively.

Debt Issuance Costs
At September 30, 2024, net debt issuance costs associated with the credit facility and bond totaled $1.1 million and are being amortized on a straight-line basis through the maturity date of each respective debt instrument.
v3.24.3
Derivatives and Hedging Activities
 3 Months Ended
Sep. 30, 2024
General Discussion of Derivative Instruments and Hedging Activities [Abstract]  
Derivatives and Hedging Activities Derivatives and Hedging Activities
The Company's results of operations could be materially impacted by significant changes in foreign currency exchange rates and interest rates. In an effort to manage the exposure to these risks, the Company periodically enters into various derivative instruments. The Company's accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments in accordance with U.S. GAAP. The Company records all derivatives on the Condensed Consolidated Balance Sheet at fair value. Derivatives that are not designated as hedging instruments or the ineffective portions of cash flow hedges are adjusted to fair value through earnings in other income and expense.

Foreign Currency Derivatives – The Company conducts a portion of its business internationally in a variety of foreign currencies and is exposed to market risk for changes in foreign currency exchange rates. The Company attempts to hedge transaction exposures with natural offsets to the fullest extent possible and once these opportunities have been exhausted the Company uses currency options and forward contracts or other hedging instruments with third parties. These contracts will periodically hedge the exchange of various currencies, including the U.S. dollar, Brazilian real, euro, British pound and Canadian dollar.

The Company had contracts outstanding for purposes of managing cash flows with notional amounts of $33.7 million and $27.5 million for the exchange of foreign currencies at September 30, 2024 and June 30, 2024, respectively. To date, the Company has chosen not to designate these derivatives as hedging instruments, and accordingly, these instruments are adjusted to fair value through earnings in other income and expense. Summarized financial information related to these derivative contracts and changes in the underlying value of the foreign currency exposures included in the Condensed Consolidated Income Statements for the quarters ended September 30, 2024 and 2023 are as follows:

 Quarter ended
September 30,
 20242023
 (in thousands)
Net foreign exchange derivative contract losses (gains)$941 $(368)
Net foreign currency transactional and re-measurement (gains) losses(607)1,064 
Net foreign currency exchange losses$334 $696 

Net foreign currency exchange gains and losses consist of foreign currency transactional and functional currency re-measurements, offset by net foreign currency exchange contract gains and losses and are included in other income and expense. Foreign exchange gains and losses are generated as the result of fluctuations in the value of the U.S. dollar versus the Brazilian real and the Canadian dollar versus the U.S. dollar.

Interest Rates - The Company’s earnings are also affected by changes in interest rates due to the impact those changes have on interest expense from floating rate debt instruments. The Company manages its exposure to changes in interest rates by using interest rate swaps to hedge this exposure and to achieve a desired proportion of fixed versus floating rate debt.

On April 30, 2019, the Company entered into an interest rate swap agreement to lock into a fixed LIBOR interest rate, which was amended on September 28, 2022, to change the reference rate from LIBOR to SOFR. The swap agreement has a notional amount of $100.0 million, with a $50.0 million tranche that matured on April 30, 2024 and a $50.0 million tranche scheduled to mature April 30, 2026.

On March 31, 2023, the Company entered into an interest rate swap agreement to lock into a fixed SOFR interest rate with a notional amount of $25 million and a maturity date of March 31, 2028.

These interest rate swap agreements are designated as cash flow hedges to hedge the variable rate interest payments on the revolving credit facility. Interest rate differentials paid or received under the swap agreements are recognized as adjustments to interest expense. To the extent the swaps are effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swaps are not included in current earnings but are reported as other comprehensive income (loss). There was no ineffective portion to be recorded as an adjustment to earnings for the quarters ended September 30, 2024 and 2023.
The components of the cash flow hedge included in the Condensed Consolidated Statement of Comprehensive Income for the quarters ended September 30, 2024 and 2023, are as follows:
Quarter ended
September 30,
 20242023
(in thousands)
Net interest income recognized as a result of interest rate swap$(508)$(759)
Unrealized (loss) gain in fair value of interest rate swap(885)974 
Net (decrease) increase in accumulated other comprehensive income(1,393)215 
Income tax effect(343)62 
Net (decrease) increase in accumulated other comprehensive income, net of tax$(1,050)$153 

The Company used the following derivative instruments at September 30, 2024 and June 30, 2024, reflected in its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above:

 September 30, 2024June 30, 2024
 Balance Sheet LocationFair 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 contractsPrepaid expenses and other current assets— $17 — — 
Foreign currency hedgePrepaid expenses and other current assets— — $345 — 
Interest rate swap agreementOther non-current assets$1,305 — $2,698 — 
Derivative liabilities:
Foreign exchange contractsAccrued expenses and other current liabilities— — — $12 
Foreign currency hedgeAccrued expenses and other current liabilities$53 — — — 
v3.24.3
Fair Value of Financial Instruments
 3 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company classifies certain assets and liabilities based on the fair value hierarchy, which aggregates fair value measured assets and liabilities based upon the following levels of inputs:

•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; and
•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).

The assets and liabilities maintained by the Company that are required to be measured at fair value on a recurring basis include deferred compensation plan investments, forward foreign currency exchange contracts, foreign currency hedge agreements and interest rate swap agreements. The carrying value of debt is considered to approximate fair value, as the Company’s debt instruments are indexed to a variable rate using the market approach (Level 2).

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at September 30, 2024:
TotalQuoted
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$32,176 $32,176 $— $— 
Forward foreign currency exchange contracts17 — 17 — 
Interest rate swap agreement1,305 — 1,305 — 
Total assets at fair value$33,498 $32,176 $1,322 $— 
Liabilities:
Deferred compensation plan investments, current and non-current$32,176 $32,176 $— $— 
Foreign currency hedge53 — 53 — 
Liability for contingent consideration, current and non-current17,200 — — 17,200 
Total liabilities at fair value$49,429 $32,176 $53 $17,200 

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at June 30, 2024:
TotalQuoted
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 $31,014 $31,014 $— $— 
Foreign currency hedge345 — 345 — 
Interest rate swap agreement2,698 — 2,698 — 
Total assets at fair value$34,057 $31,014 $3,043 $— 
Liabilities:
Deferred compensation plan investments, current and non-current$31,014 $31,014 $— $— 
Forward foreign currency exchange contracts12 — 12 — 
Total liabilities at fair value$31,026 $31,014 $12 $— 

The investments in the deferred compensation plan are held in a "rabbi trust" and include mutual funds and cash equivalents for payment of non-qualified benefits for certain retired, terminated and active employees. These investments are recorded to prepaid expenses and other current assets or other non-current assets depending on their corresponding, anticipated distribution dates to recipients, which are reported in accrued expenses and other current liabilities or other long-term liabilities, respectively.

Derivative instruments, such as foreign currency forward contracts, are measured using the market approach on a recurring basis considering foreign currency spot rates and forward rates quoted by banks or foreign currency dealers and interest rates quoted by banks (Level 2). Fair values of interest rate swaps are measured using standard valuation models with inputs that can be derived from observable market transactions, including SOFR spot and forward rates (Level 2). Foreign currency contracts and interest rate swap agreements are classified in the Condensed Consolidated Balance Sheets as prepaid expenses and other non-current assets or accrued expenses and other long-term liabilities, depending on the respective instruments' favorable or unfavorable positions. See Note 8 - Derivatives and Hedging Activities.

The Company recorded a contingent consideration liability at the acquisition date of both Advantix and Resourcive. These liabilities represent the amounts payable to former owners, as outlined under the terms of the asset purchase agreements, based upon the achievement of a projected earnings before interest expense, taxes, depreciation and amortization, net of specific pro forma adjustments.
The fair values of amounts owed are recorded in current portion of contingent consideration and long-term portion of contingent consideration in the Company’s Condensed Consolidated Balance Sheets. In accordance with ASC 805, the Company will revalue the contingent consideration liability at each reporting date through the last payment, with changes in the fair value of the contingent consideration reflected in the change in fair value of contingent consideration line item on the Company’s Condensed Consolidated Income Statements that is included in the calculation of operating income. The fair value of the contingent consideration liability associated with future earnout payments is based on several factors, including but not limited to:

•estimated future results, net of pro forma adjustments set forth in the purchase agreements;
•a risk premium reflective of the Company’s creditworthiness and market risk premium associated with the United States markets.
Advantix

Advantix Solutions Group, Inc ("Advantix") is part of the Specialty Technology Solutions segment. The fair value of the contingent consideration is determined using a static discounted cash flow model. The fair value of the liability for the contingent consideration related to Advantix recognized at September 30, 2024 was $7.5 million, of which $1.9 million is classified as current. The fair value at September 30, 2024 approximated the fair value recognized upon acquisition in August 2024, as such no change in fair value of contingent consideration was recognized in the Condensed Consolidated Income Statements. Earnout payments to the former owners of Advantix are payable based on results from fiscal year 2025 to fiscal year 2028.
Resourcive

Secure Path Networks, LLC dba Resourcive ("Resourcive") is part of the Intelisys & Advisory segment. The fair value of the contingent consideration for Resourcive is determined using a Monte Carlo simulation. The fair value of the liability for the contingent consideration related to Resourcive recognized at September 30, 2024 was $9.7 million, all of which is classified as non-current and is due to the former owners of Resourcive during fiscal year 2027. The fair value at September 30, 2024 approximated the fair value recognized upon acquisition in August 2024, as such no change in fair value of contingent consideration was recognized in the Condensed Consolidated Income Statements.

Valuation techniques and significant observable inputs used in recurring Level 3 fair value measurements for the Company's contingent consideration liabilities related to Advantix and Resourcive at September 30, 2024 were as follows.
AcquisitionReporting PeriodValuation TechniqueSignificant Unobservable InputsWeighted Average Rates
AdvantixSeptember 30, 2024Discounted cash flowAdjusted EBITDA risk premium15.7 %
Adjusted EBITDA growth rate19.8 %
ResourciveSeptember 30, 2024Monte CarloAdjusted EBITDA risk premium13.6 %
Simulated commission growth percentage23.7 %
v3.24.3
Segment Information
 3 Months Ended
Sep. 30, 2024
Segment Reporting, Measurement Disclosures [Abstract]  
Segment Information Segment Information
The Company is a leading provider of technology solutions and services to customers in specialty technology markets. The Company has two reportable segments based on sales model.

Specialty Technology Solutions Segment

The Specialty Technology Solutions segment operates primarily in the United States, Canada and Brazil and includes specialty technology solutions distributed through a wholesale sales model. The specialty technology solutions include the following:

•Mobility and barcode solutions - mobile computing, barcode scanners and imagers, radio frequency identification devices, barcode printing and related services, wireless enablement and connectivity tools;
•POS and payments solutions - POS systems, integrated POS software platforms, self-service kiosks including self-checkout, payment terminals and mobile payment devices;
•Security solutions - video surveillance and analytics, video management software and access control;
•Networking solutions - switching, routing and wireless products and software; and
•Communications and collaboration solutions - voice, video, communication platform integration and contact center solutions.

Intelisys & Advisory Segment

The Intelisys & Advisory segment operates primarily in the United States and distributes connectivity and cloud services through an agency sales model. The connectivity and cloud services include telecom, cable, Unified Communications as a Service (UCaaS), Contact Center as a Service (CCaaS), Infrastructure as a Service (IaaS), Software-Defined Wide-Area Network (SD-WAN) and other cloud services. This segment includes SaaS and subscription services, which the Company offers using digital tools and platforms.

Selected financial information for each business segment is presented below:
Quarter ended
 September 30,
 20242023
 (in thousands)
Sales:
Specialty Technology Solutions$752,299 $853,950 
Intelisys & Advisory23,281 22,355 
$775,580 $876,305 
Depreciation and amortization:
Specialty Technology Solutions$4,626 $4,544 
Intelisys & Advisory2,125 1,954 
Corporate720 720 
$7,471 $7,218 
Operating income (loss):
Specialty Technology Solutions$16,738 $17,636 
Intelisys & Advisory6,413 6,649 
Corporate (a)
(5,521)(201)
$17,630 $24,084 
Capital expenditures:
Specialty Technology Solutions$(2,228)$(2,297)
Intelisys & Advisory(147)(18)
$(2,375)$(2,315)
Sales by Geography Category:
United States and Canada$715,989 $792,464 
Brazil(b)
63,561 85,305 
Less intercompany sales(3,970)(1,464)
$775,580 $876,305 
(a) For the quarter ended September 30, 2024, the amounts shown above include restructuring expense, acquisition and divestiture expenses as well as cyberattack restoration costs. For the quarter ended September 30, 2023, the amounts above include cyberattack restoration costs.
(b) Countries outside of Brazil represent $0.1 million, or 0.2% of sales, for the quarter ended September 30, 2024 and $2.4 million, or 2.8% of sales, for the quarter ended September 30, 2023.

September 30, 2024June 30, 2024
 (in thousands)
Assets:
Specialty Technology Solutions$1,563,728 $1,499,146 
Intelisys & Advisory222,781 279,886 
$1,786,509 $1,779,032 
Property and equipment, net by Geography Category:
United States and Canada$19,836 $21,613 
Brazil13,104 11,888 
$32,940 $33,501 
v3.24.3
Leases
 3 Months Ended
Sep. 30, 2024
Leases [Abstract]  
Leases Leases
In accordance with Accounting Standards Codification ("ASC") 842, at contract inception the Company determines if a contract contains a lease by assessing whether the contract contains an identified asset and whether the Company has the ability to
control the asset. The Company also determines if the lease meets the classification criteria for an operating lease versus a finance lease under ASC 842. Substantially all of the Company's leases are operating leases for real estate, warehouse and office equipment ranging in duration from 1 year to 10 years. The Company has elected not to record short-term operating leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets. Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has finance leases for information technology equipment expiring through fiscal year 2028. Finance leases are recorded as property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The gross amount of the balances recorded related to finance leases is immaterial to the condensed consolidated financial statements at September 30, 2024 and the consolidated financial statements at June 30, 2024.

Operating lease right-of-use assets and lease liabilities are recognized at the commencement date based on the net present value of future minimum lease payments over the lease term. The Company generally is not able to determine the rate implicit in its leases and has elected to apply an incremental borrowing rate as the discount rate for the present value determination, which is based on the Company's cost of borrowings for the relevant terms of each lease and geographical economic factors. Certain operating lease agreements contain options to extend or terminate the lease. The lease term used is adjusted for these options when the Company is reasonably certain it will exercise the option. Operating lease expense is recognized on a straight-line basis over the lease term. Variable lease payments not based on a rate or index, such as costs for common area maintenance, are expensed as incurred. Further, the Company has elected the practical expedient to recognize all lease and non-lease components as a single lease component, where applicable.

The following table presents amounts recorded on the Condensed Consolidated Balance Sheets related to operating leases at September 30, 2024 and June 30, 2024:

September 30, 2024June 30, 2024
Operating leasesBalance Sheet location(in thousands)
Operating lease right-of-use assetsOther non-current assets$10,574 $9,057 
Current operating lease liabilitiesAccrued expenses and other current liabilities$3,810 $3,398 
Long-term operating lease liabilitiesOther long-term liabilities$7,574 $6,507 

The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters ended September 30, 2024 and 2023. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less.

Quarter ended September 30,
20242023
(in thousands)
Operating lease cost$1,121 $1,209 
Variable lease cost332 383 
$1,453 $1,592 

Supplemental cash flow information related to the Company's operating leases for the three months ended September 30, 2024 and 2023 are presented in the table below:

Quarter ended September 30,
20242023
(in thousands)
Cash paid for amounts in the measurement of lease liabilities$1,132 $1,412 
Right-of-use assets obtained in exchange for lease obligations2,461 230 

The weighted-average remaining lease term and discount rate at September 30, 2024 are presented in the table below:
September 30, 2024
Weighted-average remaining lease term3.11 years
Weighted-average discount rate5.20 %

The following table presents the maturities of the Company's operating lease liabilities at September 30, 2024:

Operating leases
(in thousands)
2024$3,403 
20254,198 
20263,812 
20271,412 
2028723 
Thereafter300 
Total future payments13,848 
Less: amounts representing interest2,464 
Present value of lease payments$11,384 
Leases Leases
In accordance with Accounting Standards Codification ("ASC") 842, at contract inception the Company determines if a contract contains a lease by assessing whether the contract contains an identified asset and whether the Company has the ability to
control the asset. The Company also determines if the lease meets the classification criteria for an operating lease versus a finance lease under ASC 842. Substantially all of the Company's leases are operating leases for real estate, warehouse and office equipment ranging in duration from 1 year to 10 years. The Company has elected not to record short-term operating leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets. Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has finance leases for information technology equipment expiring through fiscal year 2028. Finance leases are recorded as property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The gross amount of the balances recorded related to finance leases is immaterial to the condensed consolidated financial statements at September 30, 2024 and the consolidated financial statements at June 30, 2024.

Operating lease right-of-use assets and lease liabilities are recognized at the commencement date based on the net present value of future minimum lease payments over the lease term. The Company generally is not able to determine the rate implicit in its leases and has elected to apply an incremental borrowing rate as the discount rate for the present value determination, which is based on the Company's cost of borrowings for the relevant terms of each lease and geographical economic factors. Certain operating lease agreements contain options to extend or terminate the lease. The lease term used is adjusted for these options when the Company is reasonably certain it will exercise the option. Operating lease expense is recognized on a straight-line basis over the lease term. Variable lease payments not based on a rate or index, such as costs for common area maintenance, are expensed as incurred. Further, the Company has elected the practical expedient to recognize all lease and non-lease components as a single lease component, where applicable.

The following table presents amounts recorded on the Condensed Consolidated Balance Sheets related to operating leases at September 30, 2024 and June 30, 2024:

September 30, 2024June 30, 2024
Operating leasesBalance Sheet location(in thousands)
Operating lease right-of-use assetsOther non-current assets$10,574 $9,057 
Current operating lease liabilitiesAccrued expenses and other current liabilities$3,810 $3,398 
Long-term operating lease liabilitiesOther long-term liabilities$7,574 $6,507 

The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters ended September 30, 2024 and 2023. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less.

Quarter ended September 30,
20242023
(in thousands)
Operating lease cost$1,121 $1,209 
Variable lease cost332 383 
$1,453 $1,592 

Supplemental cash flow information related to the Company's operating leases for the three months ended September 30, 2024 and 2023 are presented in the table below:

Quarter ended September 30,
20242023
(in thousands)
Cash paid for amounts in the measurement of lease liabilities$1,132 $1,412 
Right-of-use assets obtained in exchange for lease obligations2,461 230 

The weighted-average remaining lease term and discount rate at September 30, 2024 are presented in the table below:
September 30, 2024
Weighted-average remaining lease term3.11 years
Weighted-average discount rate5.20 %

The following table presents the maturities of the Company's operating lease liabilities at September 30, 2024:

Operating leases
(in thousands)
2024$3,403 
20254,198 
20263,812 
20271,412 
2028723 
Thereafter300 
Total future payments13,848 
Less: amounts representing interest2,464 
Present value of lease payments$11,384 
v3.24.3
Commitments and Contingencies
 3 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
The Company is, from time to time, party to lawsuits arising out of operations. Although there can be no assurance, based upon information known to the Company, the Company believes that any liability resulting from an adverse determination of such lawsuits would not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

During the Company's due diligence for the Network1 acquisition completed in 2016, several pre-acquisition contingencies were identified regarding various Brazilian federal and state tax exposures. The Company recorded indemnification receivables that are reported gross of the pre-acquisition contingency liabilities as the funds were escrowed as part of the acquisition. The amount available after the impact of foreign currency translation for future pre-acquisition contingency settlements or to be released to the sellers was $3.4 million and $3.2 million at September 30, 2024 and June 30, 2024.

The table below summarizes the balances and line item presentation of Network1's pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets at September 30, 2024 and June 30, 2024:
September 30, 2024June 30, 2024
Network1
 (in thousands)
Assets
Prepaid expenses and other current assets$14 $14 
Other non-current assets$3,671 $3,598 
Liabilities
Accrued expenses and other current liabilities$14 $14 
Other long-term liabilities$3,671 $3,598 
v3.24.3
Income Taxes
 3 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income taxes for the quarters ended September 30, 2024 and 2023 have been included in the accompanying condensed consolidated financial statements using an estimated annual effective tax rate. In addition to applying the estimated annual effective tax rate to pre-tax income, the Company includes certain items treated as discrete events to arrive at an estimated overall tax provision. During the quarter ended September 30, 2024, a discrete net tax benefit of $0.8 million was recorded, which is attributable to stock compensation. During the quarter ended September 30, 2023, a discrete net tax benefit of $1.5 million was recorded for additional foreign tax credits permitted as a result of the issuance of IRS Notice 2023-55.
The Company’s effective tax rate of 26.1% for the quarter ended September 30, 2024, differs from the current federal statutory rate of 21% primarily as a result of income derived from tax jurisdictions with varying income tax rates, discrete items, nondeductible expenses and state income taxes. The Company's effective tax rate was 19.4% for the quarter ended September 30, 2023.

As of September 30, 2024, the Company is not permanently reinvested with respect to all earnings generated by foreign operations. The Company has determined that there is no material deferred tax liability for federal, state and withholding tax related to undistributed earnings. During the three months ended September 30, 2024, foreign subsidiaries did not repatriate cash to the United States. There is no certainty to the timing of any future distributions of such earnings to the U.S. in whole or in part.

The Company had approximately $1.1 million of total gross unrecognized tax benefits at September 30, 2024 and June 30, 2024. Of this total at September 30, 2024, approximately $0.9 million represents the amount of unrecognized tax benefits that are permanent in nature and, if recognized, would affect the annual effective tax rate. The Company does not believe that the total amount of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date.

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. At September 30, 2024 and June 30, 2024, the Company had approximately $1.3 million accrued for interest and penalties.

The Company conducts business globally and one or more of its subsidiaries files income tax returns in the U.S. federal, various state, local and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities in countries and states in which it operates. With certain exceptions, the Company is no longer subject to federal, state and local or non-U.S. income tax examinations by tax authorities for the years before June 30, 2019.
v3.24.3
Restructuring
 3 Months Ended
Sep. 30, 2024
Restructuring and Related Activities [Abstract]  
Restructurings Restructurings
In January 2024 and September 2024, as part of a strategic review of organizational structure and operations, the Company executed cost reduction and restructuring programs to align our cost structure with demand expectations in our business. The actions taken in January 2024 and September 2024 are expected to result in approximately $10.0 million and $10.5 million in annualized savings in selling, general and administrative expenses, respectively.

The following table presents the restructuring and employee separation costs incurred for the quarters ended September 30, 2024 and 2023:
Quarter ended September 30,
20242023
 (in thousands)
Employee separation and benefit costs$5,068 $— 

For the quarter ended September 30, 2024, all restructuring costs are recognized in the Corporate reporting unit and have not been allocated to the Specialty Technology Solutions or Intelisys & Advisory segments.

Accrued restructuring costs are included in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. The following table represents activity for the three months ended September 30, 2024:
Accrued Expenses
(in thousands)
Balance at June 30, 2024$1,629 
Charged to expense5,068 
Cash payments(2,078)
Balance at September 30, 2024$4,619 

The remaining balance as of September 30, 2024 of $4.6 million is expected to be paid through the third quarter of fiscal year 2027.
v3.24.3
Acquisitions
 3 Months Ended
Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
On August 8, 2024, ScanSource acquired Resourcive, a leading technology advisor. Resourcive delivers strategic IT sourcing solutions to mid-market and enterprise businesses, advising clients on value creation strategies that are enabled by technology. On August 15, 2024, ScanSource acquired Advantix, a VAR-focused, managed connectivity experience provider specializing in wireless enablement solutions. The combined initial purchase price of these acquisitions, net of cash acquired, was approximately $56.8 million. The Advantix acquisition is included in the Specialty Technology Solutions segment, and the Resourcive acquisition is included in the Intelisys & Advisory segment. Both acquisitions included future earnout payments, and the Company recorded contingent consideration liabilities at the acquisition dates representing the fair value of estimated amounts payable to former owners. See Note 9 - Fair Value of Financial Instruments for the related disclosures regarding the contingent consideration liabilities recognized in connection with these acquisitions.
The purchase prices were allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction dates. Intangible assets acquired include trade names, customer relationships, and developed technology. See Note 6 - Goodwill and Other Identifiable Intangible Assets for the amounts of goodwill and intangible assets recognized in connection with these acquisitions. The allocation of the purchase prices to the assets and liabilities acquired, including the valuation of the identifiable intangible assets, has not been concluded as of the reporting date. The impact of these acquisitions was not material to the consolidated financial statements. The Company recognized $0.4 million for the quarter ended September 30, 2024 in acquisition-related costs included in selling, general and administrative expenses on the Condensed Consolidated Income Statements.
v3.24.3
Business Sale
 3 Months Ended
Sep. 30, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Business Sale Business SaleOn December 19, 2023, the Company completed the sale of its UK-based intY business. The Company retained its CASCADE cloud services distribution platform which has been used to grow the Cisco and Microsoft subscription businesses in the United States and Brazil. Under the stock purchase agreement, the Company received proceeds of $17.6 million in cash for the sale, net of cash transferred. The business sale resulted in a $14.2 million gain on sale after considering the net assets sold. The impact of this sale was not material to the consolidated financial statements.
v3.24.3
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Pay vs Performance Disclosure    
Net income $ 16,974 $ 15,432
v3.24.3
Insider Trading Arrangements
 3 Months Ended
Sep. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.3
Business and Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared by the Company’s management in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position at September 30, 2024 and June 30, 2024, the results of operations for the quarters ended September 30, 2024 and 2023, the condensed consolidated statements of comprehensive income for the quarters ended September 30, 2024 and 2023, the condensed consolidated statements of shareholders' equity for the quarters ended September 30, 2024 and 2023 and the condensed consolidated statements of cash flows for the quarters ended September 30, 2024 and 2023. The results of operations for the quarter ended September 30, 2024 are not necessarily indicative of the results to be expected for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024. Unless otherwise indicated, disclosures provided in the notes to the Company's consolidated financial statements pertain to continuing operations only.
Segment Changes
Effective July 1, 2024, the Company realigned its operating segments to represent the different sales models it uses in executing its hybrid distribution growth strategy. The two realigned segments are Specialty Technology Solutions and Intelisys & Advisory. The Specialty Technology Solutions segment combines the Company's former segments, with the exception of the Company's Intelisys business. The Intelisys & Advisory segment includes the Intelisys and technology advisors businesses, including Channel Exchange (formerly known as intY USA), RPM and Resourcive. Both segments include recurring revenue.

The Company has reclassified certain prior year amounts in the segment results to conform with the current year presentation. These reclassifications had no effect on the condensed consolidated financial results. See Note 10 - Segment Information for descriptions of the Company's segments.
Summary of Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies for the quarter ended September 30, 2024 from the policies described in the notes to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2024. For a discussion of the Company’s significant accounting policies, please see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024.
Cash and Cash Equivalents The Company considers all highly-liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. The Company maintains zero-balance disbursement accounts at various financial institutions at which the Company does not maintain significant depository relationships. Due to the terms of the agreements governing these accounts, the Company generally does not have the right to offset outstanding checks written from these accounts against cash on hand, and the respective institutions are not legally obligated to honor the checks until sufficient funds are transferred to fund the checks.
Long-lived Assets The Company presents depreciation expense and intangible amortization expense on the condensed consolidated income statements.
Recent Accounting Pronouncements
In July 2023, the Securities and Exchange Commission issued final rules that require new and enhanced disclosures on cybersecurity risk management, strategy, governance, and incident reporting. Under the final rules, companies must report a material cybersecurity incident on Form 8-K within four business days of determining that such cybersecurity incident is material. To the extent the nature, scope, timing or the impact of the incident is not determinable at the time such Form 8-K is required to be filed, additional information about the material aspects of the cybersecurity incident must be filed on a Form 8-K/A within four business days after such additional information becomes available. Companies must also disclose their cybersecurity processes, management's role in cybersecurity governance, and cybersecurity oversight by the Board of Directors on Form 10-K. The Company adopted these rules for the fiscal year ended June 30, 2024.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. This ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. This ASU is applicable to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and subsequent interim periods, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU updates income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and is applicable to the Company’s fiscal year beginning July 1, 2025, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

The Company has reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on its consolidated financial statements as a result of future adoption.
Trade Accounts and Notes Receivable, Net
The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from customers’ failure to make payments on accounts receivable due to the Company. The Company has notes receivable with certain customers, which are included in “Accounts receivable, less allowance” in the Condensed Consolidated Balance Sheets.

Management determines the estimate of the allowance for doubtful accounts receivable by considering a number of factors, including: (i) historical experience, (ii) aging of the accounts receivable, (iii) specific information obtained by the Company on
the financial condition and the current creditworthiness of its customers, (iv) the current economic and country-specific environment and (v) reasonable and supportable forecasts about collectability. Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model. Receivables that do not share risk characteristics are evaluated on an individual basis. Estimates of expected credit losses on trade receivables over the contractual life are recorded at inception and adjusted over the contractual life.
Revenue Recognition
The Company provides technology solutions and services from the leading global suppliers of mobility, barcode, POS, payments, physical security, unified communications, collaboration, connectivity and cloud services. This includes hardware, related accessories and device configuration as well as software licenses, professional services and hardware support programs.

In determining the appropriate amount of revenue to recognize, the Company applies the following five-step model in accordance with ASC 606: (i) identify contracts with customers; (ii) identify performance obligations in the contracts; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations per the contracts; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company recognizes revenue as control of products and services are transferred to customers, which is generally at the point of shipment. The Company delivers products to customers in several ways, including: (i) shipment from a Company warehouse, (ii) drop-shipment directly from the supplier, or (iii) electronic delivery for non-physical products.

Principal versus Agent Considerations

The Company is the principal for sales of all hardware and certain software and services. The Company considers itself the principal in those transactions where it has control of the product or service before it is transferred to the customer. The Company recognizes the principal-associated revenue and cost of goods sold on a gross basis.

The Company is the agent for third-party service contracts, including product warranties and supplier-hosted software. These service contracts are sold separately from the products, and the Company often serves as the agent for the contract on behalf of the original equipment manufacturer. The Company's responsibility is to arrange for the provision of the specified service by the original equipment manufacturer, and the Company does not control the specified service before it is transferred to the customer. Because the Company acts as an agent, revenue is recognized net of cost at the time of sale. The Intelisys business operates under an agency model.

Variable Considerations

For certain transactions, products are sold with a right of return and may also provide other rebates or incentives, which are accounted for as variable consideration. The Company estimates a returns allowance based on historical experience and reduces revenue accordingly. The Company estimates the amount of variable consideration for rebates and incentives by using the expected value to be given to the customer and reduces the revenue by those estimated amounts. These estimates are reviewed and updated as necessary at the end of each reporting period.

Contract Balances

The Company records contract assets and liabilities for payments received from customers in advance of services performed. These assets and liabilities are the result of the sales of the Company's self-branded warranty programs and other transactions where control has not yet passed to the customer. These amounts are immaterial to the consolidated financial statements for the periods presented.
v3.24.3
Trade Accounts and Notes Receivable, Net (Tables)
 3 Months Ended
Sep. 30, 2024
Receivables [Abstract]  
Schedule of Changes in the Allowance for Doubtful Accounts
The changes in the allowance for doubtful accounts for the three months ended September 30, 2024 are set forth in the table below.
June 30, 2024Amounts Charged to ExpenseWrite-offs
Other (1)
September 30, 2024
(in thousands)
Trade accounts and current notes receivable allowance$20,684 $1,678 $(153)$512 $22,721 
(1)"Other" amounts include recoveries and the effect of foreign currency fluctuations for the three months ended September 30, 2024.
v3.24.3
Revenue Recognition (Tables)
 3 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of Disaggregation of Revenue
The following tables represent the Company's disaggregation of revenue:

Quarter ended September 30, 2024
Specialty Technology SolutionsIntelisys & AdvisoryTotal
(in thousands)
Revenue by product/service
Products and services$740,734 $833 $741,567 
Recurring revenue(a)
11,565 22,448 34,013 
$752,299 $23,281 $775,580 
Quarter ended September 30, 2023
Specialty Technology SolutionsIntelisys & AdvisoryTotal
(in thousands)
Revenue by product/service
Products and services$846,835 $839 $847,674 
Recurring revenue(a)
7,115 21,516 28,631 
$853,950 $22,355 $876,305 
(a) Recurring revenue represents revenue primarily from agency commissions, SaaS, subscriptions, and hardware rentals.
v3.24.3
Earnings Per Share (Tables)
 3 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share
Quarter ended
 September 30,
 20242023
 (in thousands, except per share data)
Numerator:
Net income$16,974 $15,432 
Denominator:
Weighted-average shares, basic24,147 24,886 
Dilutive effect of share-based payments499 292 
Weighted-average shares, diluted24,646 25,178 
Net income per common share, basic$0.70 $0.62 
Net income per common share, diluted$0.69 $0.61 
v3.24.3
Accumulated Other Comprehensive Loss (Tables)
 3 Months Ended
Sep. 30, 2024
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Schedule of Accumulated Other Comprehensive Income, Net Of Tax
The components of accumulated other comprehensive loss, net of tax are as follows: 
September 30, 2024June 30, 2024
 (in thousands)
Foreign currency translation adjustment$(113,777)$(117,885)
Unrealized gain on hedged transaction, net of tax983 2,032 
Accumulated other comprehensive loss$(112,794)$(115,853)
Schedule of Other Comprehensive Loss, Tax
The tax effect of amounts in comprehensive loss reflect a tax benefit as follows:
Quarter ended September 30,
20242023
(in thousands)
Tax benefit$(363)$(54)
v3.24.3
Goodwill and Other Identifiable Intangible Assets (Tables)
 3 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Changes in the Carrying Amount of Goodwill
The changes in the carrying amount of goodwill for the three months ended September 30, 2024, by reporting segment, are set forth in the table below.
Specialty Technology SolutionsIntelisys & AdvisoryTotal
 (in thousands)
Balance at June 30, 2024$146,108 $60,193 $206,301 
Additions16,048 9,078 25,126 
Foreign currency translation adjustment245 1,184 1,429 
Balance at September 30, 2024$162,401 $70,455 $232,856 
Schedule of Net Identifiable Intangible Assets
The following table shows changes in the amount recognized for net identifiable intangible assets for the three months ended September 30, 2024.
Net Identifiable Intangible Assets
(in thousands)
Balance at June 30, 2024$37,634 
Additions44,500 
Amortization expense(4,358)
Foreign currency translation adjustment24 
Balance at September 30, 2024$77,800 
v3.24.3
Short-Term Borrowings and Long-Term Debt (Tables)
 3 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Schedule of Debt
The following table presents the Company’s debt at September 30, 2024 and June 30, 2024.

September 30, 2024June 30, 2024
(in thousands)
Current portion of long-term debt$9,736 $7,857 
Mississippi revenue bond, net of current portion2,663 3,024 
Senior secured term loan facility, net of current portion131,250 133,125 
Borrowings under revolving credit facility— 50 
Total debt$143,649 $144,056 
v3.24.3
Derivatives and Hedging Activities (Tables)
 3 Months Ended
Sep. 30, 2024
General Discussion of Derivative Instruments and Hedging Activities [Abstract]  
Schedule of Derivative Contracts and Changes in Underlying Value of the Foreign Currency Exposures Summarized financial information related to these derivative contracts and changes in the underlying value of the foreign currency exposures included in the Condensed Consolidated Income Statements for the quarters ended September 30, 2024 and 2023 are as follows:
 Quarter ended
September 30,
 20242023
 (in thousands)
Net foreign exchange derivative contract losses (gains)$941 $(368)
Net foreign currency transactional and re-measurement (gains) losses(607)1,064 
Net foreign currency exchange losses$334 $696 
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)
The components of the cash flow hedge included in the Condensed Consolidated Statement of Comprehensive Income for the quarters ended September 30, 2024 and 2023, are as follows:
Quarter ended
September 30,
 20242023
(in thousands)
Net interest income recognized as a result of interest rate swap$(508)$(759)
Unrealized (loss) gain in fair value of interest rate swap(885)974 
Net (decrease) increase in accumulated other comprehensive income(1,393)215 
Income tax effect(343)62 
Net (decrease) increase in accumulated other comprehensive income, net of tax$(1,050)$153 
Schedule of Derivative Instruments
The Company used the following derivative instruments at September 30, 2024 and June 30, 2024, reflected in its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above:

 September 30, 2024June 30, 2024
 Balance Sheet LocationFair 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 contractsPrepaid expenses and other current assets— $17 — — 
Foreign currency hedgePrepaid expenses and other current assets— — $345 — 
Interest rate swap agreementOther non-current assets$1,305 — $2,698 — 
Derivative liabilities:
Foreign exchange contractsAccrued expenses and other current liabilities— — — $12 
Foreign currency hedgeAccrued expenses and other current liabilities$53 — — — 
v3.24.3
Fair Value of Financial Instruments (Tables)
 3 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Schedule of Assets and Liabilities Measured at Fair Value
The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at September 30, 2024:
TotalQuoted
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$32,176 $32,176 $— $— 
Forward foreign currency exchange contracts17 — 17 — 
Interest rate swap agreement1,305 — 1,305 — 
Total assets at fair value$33,498 $32,176 $1,322 $— 
Liabilities:
Deferred compensation plan investments, current and non-current$32,176 $32,176 $— $— 
Foreign currency hedge53 — 53 — 
Liability for contingent consideration, current and non-current17,200 — — 17,200 
Total liabilities at fair value$49,429 $32,176 $53 $17,200 

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at June 30, 2024:
TotalQuoted
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 $31,014 $31,014 $— $— 
Foreign currency hedge345 — 345 — 
Interest rate swap agreement2,698 — 2,698 — 
Total assets at fair value$34,057 $31,014 $3,043 $— 
Liabilities:
Deferred compensation plan investments, current and non-current$31,014 $31,014 $— $— 
Forward foreign currency exchange contracts12 — 12 — 
Total liabilities at fair value$31,026 $31,014 $12 $— 
Schedule of Changes in Fair Value of Contingent Considerations
Valuation techniques and significant observable inputs used in recurring Level 3 fair value measurements for the Company's contingent consideration liabilities related to Advantix and Resourcive at September 30, 2024 were as follows.
AcquisitionReporting PeriodValuation TechniqueSignificant Unobservable InputsWeighted Average Rates
AdvantixSeptember 30, 2024Discounted cash flowAdjusted EBITDA risk premium15.7 %
Adjusted EBITDA growth rate19.8 %
ResourciveSeptember 30, 2024Monte CarloAdjusted EBITDA risk premium13.6 %
Simulated commission growth percentage23.7 %
v3.24.3
Segment Information (Tables)
 3 Months Ended
Sep. 30, 2024
Segment Reporting, Measurement Disclosures [Abstract]  
Schedule of Financial Information by Segment
Selected financial information for each business segment is presented below:
Quarter ended
 September 30,
 20242023
 (in thousands)
Sales:
Specialty Technology Solutions$752,299 $853,950 
Intelisys & Advisory23,281 22,355 
$775,580 $876,305 
Depreciation and amortization:
Specialty Technology Solutions$4,626 $4,544 
Intelisys & Advisory2,125 1,954 
Corporate720 720 
$7,471 $7,218 
Operating income (loss):
Specialty Technology Solutions$16,738 $17,636 
Intelisys & Advisory6,413 6,649 
Corporate (a)
(5,521)(201)
$17,630 $24,084 
Capital expenditures:
Specialty Technology Solutions$(2,228)$(2,297)
Intelisys & Advisory(147)(18)
$(2,375)$(2,315)
Sales by Geography Category:
United States and Canada$715,989 $792,464 
Brazil(b)
63,561 85,305 
Less intercompany sales(3,970)(1,464)
$775,580 $876,305 
(a) For the quarter ended September 30, 2024, the amounts shown above include restructuring expense, acquisition and divestiture expenses as well as cyberattack restoration costs. For the quarter ended September 30, 2023, the amounts above include cyberattack restoration costs.
(b) Countries outside of Brazil represent $0.1 million, or 0.2% of sales, for the quarter ended September 30, 2024 and $2.4 million, or 2.8% of sales, for the quarter ended September 30, 2023.
Schedule of Reconciliation of Assets from Segment to Consolidated
September 30, 2024June 30, 2024
 (in thousands)
Assets:
Specialty Technology Solutions$1,563,728 $1,499,146 
Intelisys & Advisory222,781 279,886 
$1,786,509 $1,779,032 
Property and equipment, net by Geography Category:
United States and Canada$19,836 $21,613 
Brazil13,104 11,888 
$32,940 $33,501 
v3.24.3
Leases (Tables)
 3 Months Ended
Sep. 30, 2024
Leases [Abstract]  
Schedule of Assets and Liabilities, Lessee
The following table presents amounts recorded on the Condensed Consolidated Balance Sheets related to operating leases at September 30, 2024 and June 30, 2024:

September 30, 2024June 30, 2024
Operating leasesBalance Sheet location(in thousands)
Operating lease right-of-use assetsOther non-current assets$10,574 $9,057 
Current operating lease liabilitiesAccrued expenses and other current liabilities$3,810 $3,398 
Long-term operating lease liabilitiesOther long-term liabilities$7,574 $6,507 
Schedule of Lease, Cost
The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters ended September 30, 2024 and 2023. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less.

Quarter ended September 30,
20242023
(in thousands)
Operating lease cost$1,121 $1,209 
Variable lease cost332 383 
$1,453 $1,592 

Supplemental cash flow information related to the Company's operating leases for the three months ended September 30, 2024 and 2023 are presented in the table below:

Quarter ended September 30,
20242023
(in thousands)
Cash paid for amounts in the measurement of lease liabilities$1,132 $1,412 
Right-of-use assets obtained in exchange for lease obligations2,461 230 

The weighted-average remaining lease term and discount rate at September 30, 2024 are presented in the table below:
September 30, 2024
Weighted-average remaining lease term3.11 years
Weighted-average discount rate5.20 %
Schedule of Lessee, Operating Lease, Liability, Maturity
The following table presents the maturities of the Company's operating lease liabilities at September 30, 2024:

Operating leases
(in thousands)
2024$3,403 
20254,198 
20263,812 
20271,412 
2028723 
Thereafter300 
Total future payments13,848 
Less: amounts representing interest2,464 
Present value of lease payments$11,384 
v3.24.3
Commitments and Contingencies (Tables)
 3 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Pre-acquisition Contingencies and Corresponding Indemnification Receivables
The table below summarizes the balances and line item presentation of Network1's pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets at September 30, 2024 and June 30, 2024:
September 30, 2024June 30, 2024
Network1
 (in thousands)
Assets
Prepaid expenses and other current assets$14 $14 
Other non-current assets$3,671 $3,598 
Liabilities
Accrued expenses and other current liabilities$14 $14 
Other long-term liabilities$3,671 $3,598 
v3.24.3
Restructurings (Tables)
 3 Months Ended
Sep. 30, 2024
Restructuring and Related Activities [Abstract]  
Schedule of Restructuring and Severance Costs
The following table presents the restructuring and employee separation costs incurred for the quarters ended September 30, 2024 and 2023:
Quarter ended September 30,
20242023
 (in thousands)
Employee separation and benefit costs$5,068 $— 
Schedule of Restructuring Activity The following table represents activity for the three months ended September 30, 2024:
Accrued Expenses
(in thousands)
Balance at June 30, 2024$1,629 
Charged to expense5,068 
Cash payments(2,078)
Balance at September 30, 2024$4,619 
v3.24.3
Business and Summary of Significant Accounting Policies (Details)
$ in Thousands
 3 Months Ended
Jul. 01, 2024
segment
Sep. 30, 2024
USD ($)
segment
Sep. 30, 2023
USD ($)
Jun. 30, 2024
USD ($)
Cash and Cash Equivalents [Line Items]        
Number of operating segments | segment 2 2    
Depreciation expense related to selling, general and administrative costs   $ 2,857 $ 2,795  
Amortization of intangible assets   4,358 4,193  
Product        
Cash and Cash Equivalents [Line Items]        
Depreciation expense reported as part of cost of goods sold   300 $ 200  
Bank Overdrafts        
Cash and Cash Equivalents [Line Items]        
Outstanding checks   $ 300   $ 5,900
v3.24.3
Trade Accounts and Notes Receivable, Net (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Accounts Receivable, Allowance for Credit Loss [Roll Forward]    
Beginning Balance $ 20,684  
Amounts Charged to Expense 1,678 $ 4,157
Write-offs (153)  
Other 512  
Ending Balance $ 22,721  
v3.24.3
Revenue Recognition (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Disaggregation of Revenue [Line Items]    
Revenues $ 775,580 $ 876,305
Products and services    
Disaggregation of Revenue [Line Items]    
Revenues 741,567 847,674
Recurring revenue    
Disaggregation of Revenue [Line Items]    
Revenues 34,013 28,631
Specialty Technology Solutions    
Disaggregation of Revenue [Line Items]    
Revenues 752,299 853,950
Specialty Technology Solutions | Products and services    
Disaggregation of Revenue [Line Items]    
Revenues 740,734 846,835
Specialty Technology Solutions | Recurring revenue    
Disaggregation of Revenue [Line Items]    
Revenues 11,565 7,115
Intelisys & Advisory    
Disaggregation of Revenue [Line Items]    
Revenues 23,281 22,355
Intelisys & Advisory | Products and services    
Disaggregation of Revenue [Line Items]    
Revenues 833 839
Intelisys & Advisory | Recurring revenue    
Disaggregation of Revenue [Line Items]    
Revenues $ 22,448 $ 21,516
v3.24.3
Earnings Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Numerator:    
Net income $ 16,974 $ 15,432
Denominator:    
Weighted-average shares, basic (in shares) 24,147,000 24,886,000
Dilutive effect of share-based payments (in shares) 499,000 292,000
Weighted-average shares, diluted (in shares) 24,646,000 25,178,000
Net income per common share, basic (in dollars per share) $ 0.70 $ 0.62
Net income per common share, diluted (in dollars per share) $ 0.69 $ 0.61
Weighted average shares excluded from the computation of diluted earnings per share (in shares) 109,450 854,893
v3.24.3
Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Jun. 30, 2024
Accumulated Other Comprehensive Loss [Line Items]      
Accumulated other comprehensive loss $ (112,794)   $ (115,853)
Tax benefit (363) $ (54)  
Foreign currency translation adjustment      
Accumulated Other Comprehensive Loss [Line Items]      
Accumulated other comprehensive loss (113,777)   (117,885)
Unrealized gain on hedged transaction, net of tax      
Accumulated Other Comprehensive Loss [Line Items]      
Accumulated other comprehensive loss 983   2,032
Accumulated other comprehensive loss      
Accumulated Other Comprehensive Loss [Line Items]      
Accumulated other comprehensive loss $ (112,794)   $ (115,853)
v3.24.3
Goodwill and Other Identifiable Intangible Assets (Changes in the Carrying Amount of Goodwill) (Details)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
USD ($)
Goodwill [Roll Forward]  
Balance at June 30, 2024 $ 206,301
Additions 25,126
Foreign currency translation adjustment 1,429
Balance at September 30, 2024 232,856
Specialty Technology Solutions  
Goodwill [Roll Forward]  
Balance at June 30, 2024 146,108
Additions 16,048
Foreign currency translation adjustment 245
Balance at September 30, 2024 162,401
Intelisys & Advisory  
Goodwill [Roll Forward]  
Balance at June 30, 2024 60,193
Additions 9,078
Foreign currency translation adjustment 1,184
Balance at September 30, 2024 $ 70,455
v3.24.3
Goodwill and Other Identifiable Intangible Assets (Net Identifiable Intangible Assets) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Finite-lived Intangible Assets [Roll Forward]    
Balance at June 30, 2024 $ 37,634  
Additions 44,500  
Amortization expense (4,358) $ (4,193)
Foreign currency translation adjustment 24  
Balance at September 30, 2024 $ 77,800  
v3.24.3
Short-Term Borrowings and Long-Term Debt (Schedule of Debt) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Jun. 30, 2024
Debt Instrument [Line Items]    
Current portion of long-term debt $ 9,736 $ 7,857
Long-term debt, excluding current maturities 133,913 136,149
Borrowings under revolving credit facility 0 50
Total debt 143,649 144,056
Term Loan Facility    
Debt Instrument [Line Items]    
Long-term debt, excluding current maturities 131,250 133,125
Multi-Currency Revolving Credit Facility    
Debt Instrument [Line Items]    
Borrowings under revolving credit facility 0 50
Mississippi Revenue Bond    
Debt Instrument [Line Items]    
Long-term debt, excluding current maturities $ 2,663 $ 3,024
v3.24.3
Short-Term Borrowings and Long-Term Debt (Narrative) (Details) - USD ($)
 3 Months Ended
Sep. 28, 2022
Aug. 01, 2007
Sep. 30, 2024
Sep. 30, 2023
Jun. 30, 2024
Debt Instrument [Line Items]          
Debt issuance costs, net     $ 1,100,000    
Mississippi Revenue Bond          
Debt Instrument [Line Items]          
Percentage spread points on variable rate debt instrument   0.85%      
Put option, exercisable period limitation (in days)   180 days      
Percentage of principal due on exercise of put option   100.00%      
Long-term debt, percentage bearing variable interest     6.15%   6.28%
SOFR | Mississippi Revenue Bond          
Debt Instrument [Line Items]          
Percentage spread points on variable rate debt instrument   0.10%      
Multi-Currency Revolving Credit Facility, Amended Credit Agreement          
Debt Instrument [Line Items]          
Line of credit facility, expiration period 5 years        
Borrowing capacity under credit facility $ 350,000,000        
Line of credit facility, accordion feature, higher borrowing capacity option 250,000,000        
Letters of credit outstanding     $ 0   $ 0
Debt issuance costs, gross $ 1,400,000        
Amount of unrestricted domestic cash     $ 30,000,000    
Percentage of spread in effect Interest rate     1.00%    
Line of credit facility, unused capacity, commitment fee percentage     0.15%    
Average daily balance on revolving credit facility     $ 144,000,000.0 $ 200,900,000  
Line of credit facility, remaining borrowing capacity     $ 350,000,000.0   $ 349,900,000
Effective interest rate     5.95%   6.44%
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Minimum          
Debt Instrument [Line Items]          
Percentage spread points on variable rate debt instrument     1.00%    
Line of credit facility, interest coverage ratio     3.00    
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Maximum          
Debt Instrument [Line Items]          
Percentage spread points on variable rate debt instrument     1.75%    
Line of credit facility, leverage ratio     3.50    
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | SOFR          
Debt Instrument [Line Items]          
Percentage spread points on variable rate debt instrument     0.10%    
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | SOFR | Minimum          
Debt Instrument [Line Items]          
Percentage spread points on variable rate debt instrument     1.00%    
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | SOFR | Maximum          
Debt Instrument [Line Items]          
Percentage spread points on variable rate debt instrument     1.75%    
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Alternate Base Rate Loans          
Debt Instrument [Line Items]          
Percentage spread points on variable rate debt instrument     0.00%    
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Alternate Base Rate Loans | Minimum          
Debt Instrument [Line Items]          
Percentage spread points on variable rate debt instrument     0.00%    
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Alternate Base Rate Loans | Maximum          
Debt Instrument [Line Items]          
Percentage spread points on variable rate debt instrument     0.75%    
Term Loan Facility          
Debt Instrument [Line Items]          
Line of credit facility, expiration period 5 years        
Borrowing capacity under credit facility $ 150,000,000        
Percentage of spread in effect Interest rate     5.95%   6.44%
Letter of Credit          
Debt Instrument [Line Items]          
Letters of credit outstanding $ 50,000,000        
v3.24.3
Derivatives and Hedging Activities (Narrative) (Details) - USD ($)
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2023
Sep. 28, 2022
Foreign exchange contracts        
Derivative [Line Items]        
Derivative, notional amount $ 33,700,000 $ 27,500,000    
Interest rate swap agreement        
Derivative [Line Items]        
Derivative, notional amount       $ 100,000,000.0
Interest Rate Swap, Maturing April 30, 2024        
Derivative [Line Items]        
Derivative, notional amount       50,000,000.0
Interest Rate Swap, Maturing April 30, 2026        
Derivative [Line Items]        
Derivative, notional amount       $ 50,000,000.0
Interest Rate Swap, Maturing March 31, 2028        
Derivative [Line Items]        
Derivative, notional amount     $ 25,000,000  
v3.24.3
Derivatives and Hedging Activities (Derivative Contracts and Changes in Underlying Value of the Foreign Currency Exposures) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
General Discussion of Derivative Instruments and Hedging Activities [Abstract]    
Net foreign exchange derivative contract losses (gains) $ 941 $ (368)
Net foreign currency transactional and re-measurement (gains) losses (607) 1,064
Net foreign currency exchange losses $ 334 $ 696
v3.24.3
Derivatives and Hedging Activities (Schedule of Cash Flow Hedge Included in Accumulated Other Comprehensive Income (Loss), Net of Income Taxes) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Derivative Instruments, Gain (Loss) [Line Items]    
Net (decrease) increase in accumulated other comprehensive income, net of tax $ (1,050) $ 153
Interest rate swap agreement    
Derivative Instruments, Gain (Loss) [Line Items]    
Net interest income recognized as a result of interest rate swap (508) (759)
Unrealized (loss) gain in fair value of interest rate swap (885) 974
Net (decrease) increase in accumulated other comprehensive income (1,393) 215
Income tax effect (343) 62
Net (decrease) increase in accumulated other comprehensive income, net of tax $ (1,050) $ 153
v3.24.3
Derivatives and Hedging Activities (Derivative Instruments) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Jun. 30, 2024
Foreign exchange contracts | Prepaid expenses and other current assets | Fair Value  of Derivatives Designated  as Hedge Instruments    
Derivatives, Fair Value [Line Items]    
Derivative assets $ 0 $ 0
Foreign exchange contracts | Prepaid expenses and other current assets | Fair Value  of Derivatives Not Designated as  Hedge Instruments    
Derivatives, Fair Value [Line Items]    
Derivative assets 17 0
Foreign exchange contracts | Accrued expenses and other current liabilities | Fair Value  of Derivatives Designated  as Hedge Instruments    
Derivatives, Fair Value [Line Items]    
Derivative liabilities 0 0
Foreign exchange contracts | Accrued expenses and other current liabilities | Fair Value  of Derivatives Not Designated as  Hedge Instruments    
Derivatives, Fair Value [Line Items]    
Derivative liabilities 0 12
Foreign currency hedge | Prepaid expenses and other current assets | Fair Value  of Derivatives Designated  as Hedge Instruments    
Derivatives, Fair Value [Line Items]    
Derivative assets 0 345
Foreign currency hedge | Prepaid expenses and other current assets | Fair Value  of Derivatives Not Designated as  Hedge Instruments    
Derivatives, Fair Value [Line Items]    
Derivative assets 0 0
Foreign currency hedge | Accrued expenses and other current liabilities | Fair Value  of Derivatives Designated  as Hedge Instruments    
Derivatives, Fair Value [Line Items]    
Derivative liabilities 53 0
Foreign currency hedge | Accrued expenses and other current liabilities | Fair Value  of Derivatives Not Designated as  Hedge Instruments    
Derivatives, Fair Value [Line Items]    
Derivative liabilities 0 0
Interest rate swap agreement | Other non-current assets | Fair Value  of Derivatives Designated  as Hedge Instruments    
Derivatives, Fair Value [Line Items]    
Derivative assets 1,305 2,698
Interest rate swap agreement | Other non-current assets | Fair Value  of Derivatives Not Designated as  Hedge Instruments    
Derivatives, Fair Value [Line Items]    
Derivative assets $ 0 $ 0
v3.24.3
Fair Value of Financial Instruments (Schedule of Remaining Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Fair Value, Recurring - USD ($)
$ in Thousands
Sep. 30, 2024
Jun. 30, 2024
Assets:    
Deferred compensation plan investments, current and non-current $ 32,176 $ 31,014
Total assets at fair value 33,498 34,057
Liabilities:    
Deferred compensation plan investments, current and non-current 32,176 31,014
Liability for contingent consideration, current and non-current 17,200  
Total liabilities at fair value 49,429 31,026
Foreign exchange contracts    
Assets:    
Derivative asset 17  
Liabilities:    
Forward foreign currency exchange contracts   12
Interest rate swap agreement    
Assets:    
Derivative asset 1,305 2,698
Foreign currency hedge    
Assets:    
Derivative asset   345
Liabilities:    
Forward foreign currency exchange contracts 53  
Quoted prices in active markets (Level 1)    
Assets:    
Deferred compensation plan investments, current and non-current 32,176 31,014
Total assets at fair value 32,176 31,014
Liabilities:    
Deferred compensation plan investments, current and non-current 32,176 31,014
Liability for contingent consideration, current and non-current 0  
Total liabilities at fair value 32,176 31,014
Quoted prices in active markets (Level 1) | Foreign exchange contracts    
Assets:    
Derivative asset 0  
Liabilities:    
Forward foreign currency exchange contracts   0
Quoted prices in active markets (Level 1) | Interest rate swap agreement    
Assets:    
Derivative asset 0 0
Quoted prices in active markets (Level 1) | Foreign currency hedge    
Assets:    
Derivative asset   0
Liabilities:    
Forward foreign currency exchange contracts 0  
Significant other observable inputs (Level 2)    
Assets:    
Deferred compensation plan investments, current and non-current 0 0
Total assets at fair value 1,322 3,043
Liabilities:    
Deferred compensation plan investments, current and non-current 0 0
Liability for contingent consideration, current and non-current 0  
Total liabilities at fair value 53 12
Significant other observable inputs (Level 2) | Foreign exchange contracts    
Assets:    
Derivative asset 17  
Liabilities:    
Forward foreign currency exchange contracts   12
Significant other observable inputs (Level 2) | Interest rate swap agreement    
Assets:    
Derivative asset 1,305 2,698
Significant other observable inputs (Level 2) | Foreign currency hedge    
Assets:    
Derivative asset   345
Liabilities:    
Forward foreign currency exchange contracts 53  
Significant unobservable inputs (Level 3)    
Assets:    
Deferred compensation plan investments, current and non-current 0 0
Total assets at fair value 0 0
Liabilities:    
Deferred compensation plan investments, current and non-current 0 0
Liability for contingent consideration, current and non-current 17,200  
Total liabilities at fair value 17,200 0
Significant unobservable inputs (Level 3) | Foreign exchange contracts    
Assets:    
Derivative asset 0  
Liabilities:    
Forward foreign currency exchange contracts   0
Significant unobservable inputs (Level 3) | Interest rate swap agreement    
Assets:    
Derivative asset 0 0
Significant unobservable inputs (Level 3) | Foreign currency hedge    
Assets:    
Derivative asset   $ 0
Liabilities:    
Forward foreign currency exchange contracts $ 0  
v3.24.3
Fair Value of Financial Instruments (Schedule of Valuation Techniques and Significant Observable Inputs) (Details)
Sep. 30, 2024
Measurement Input EBITDA Risk Premium | Discounted cash flow  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Contingent consideration, liability, measurement input 0.157
Measurement Input EBITDA Risk Premium | Monte Carlo  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Contingent consideration, liability, measurement input 0.136
Measurement Input, EBITDA Multiple | Discounted cash flow  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Contingent consideration, liability, measurement input 0.198
Simulated commission growth percentage | Monte Carlo  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Contingent consideration, liability, measurement input 0.237
v3.24.3
Fair Value of Financial Instruments (Narrative) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Jun. 30, 2024
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current portion of contingent consideration $ 1,911 $ 0
Advantix | Significant unobservable inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair value of liability for contingent consideration 7,500  
Current portion of contingent consideration 1,900  
Resourcive | Significant unobservable inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair value of liability for contingent consideration $ 9,700  
v3.24.3
Segment Information (Narrative) (Details)
 3 Months Ended
Sep. 30, 2024
segment
Segment Reporting, Measurement Disclosures [Abstract]  
Number of reportable segments 2
v3.24.3
Segment Information (Financial Information by Segment) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Segment Reporting Information [Line Items]    
Sales $ 775,580 $ 876,305
Depreciation and amortization 7,471 7,218
Operating income (loss) 17,630 24,084
Capital expenditures (2,375) (2,315)
Non-US or Brazil    
Segment Reporting Information [Line Items]    
Sales $ 100 $ 2,400
Non-US or Brazil | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk    
Segment Reporting Information [Line Items]    
Percentage of sales 0.20% 2.80%
Corporate    
Segment Reporting Information [Line Items]    
Depreciation and amortization $ 720 $ 720
Operating income (loss) (5,521) (201)
Reportable Geographical Components | United States and Canada    
Segment Reporting Information [Line Items]    
Sales 715,989 792,464
Reportable Geographical Components | Brazil    
Segment Reporting Information [Line Items]    
Sales 63,561 85,305
Geography Eliminations    
Segment Reporting Information [Line Items]    
Sales (3,970) (1,464)
Specialty Technology Solutions    
Segment Reporting Information [Line Items]    
Sales 752,299 853,950
Specialty Technology Solutions | Operating Segments    
Segment Reporting Information [Line Items]    
Sales 752,299 853,950
Depreciation and amortization 4,626 4,544
Operating income (loss) 16,738 17,636
Capital expenditures (2,228) (2,297)
Intelisys & Advisory    
Segment Reporting Information [Line Items]    
Sales 23,281 22,355
Intelisys & Advisory | Operating Segments    
Segment Reporting Information [Line Items]    
Sales 23,281 22,355
Depreciation and amortization 2,125 1,954
Operating income (loss) 6,413 6,649
Capital expenditures $ (147) $ (18)
v3.24.3
Segment Information (Assets By Segment) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Jun. 30, 2024
Segment Reporting Information [Line Items]    
Assets $ 1,786,509 $ 1,779,032
Property and equipment, net by Geography Category 32,940 33,501
United States and Canada    
Segment Reporting Information [Line Items]    
Property and equipment, net by Geography Category 19,836 21,613
Brazil    
Segment Reporting Information [Line Items]    
Property and equipment, net by Geography Category 13,104 11,888
Operating Segments | Specialty Technology Solutions | Continuing Operations    
Segment Reporting Information [Line Items]    
Assets 1,563,728 1,499,146
Operating Segments | Intelisys & Advisory | Continuing Operations    
Segment Reporting Information [Line Items]    
Assets $ 222,781 $ 279,886
v3.24.3
Leases (Narrative) (Details)
Sep. 30, 2024
Lessee, Lease, Description [Line Items]  
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] Property and equipment, net
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued expenses and other current liabilities
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] Other long-term liabilities
Minimum  
Lessee, Lease, Description [Line Items]  
Lease term 1 year
Maximum  
Lessee, Lease, Description [Line Items]  
Lease term 10 years
v3.24.3
Leases (Supplemental Balance Sheet Information) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Jun. 30, 2024
Leases [Abstract]    
Operating lease right-of-use assets $ 10,574 $ 9,057
Current operating lease liabilities 3,810 3,398
Long-term operating lease liabilities $ 7,574 $ 6,507
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] Other non-current assets Other non-current assets
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued expenses and other current liabilities Accrued expenses and other current liabilities
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] Other long-term liabilities Other long-term liabilities
v3.24.3
Leases (Schedule of Lease Cost) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Leases [Abstract]    
Operating lease cost $ 1,121 $ 1,209
Variable lease cost 332 383
Total cost $ 1,453 $ 1,592
v3.24.3
Leases (Supplemental Cash Flow Information) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Leases [Abstract]    
Cash paid for amounts in the measurement of lease liabilities $ 1,132 $ 1,412
Right-of-use assets obtained in exchange for lease obligations $ 2,461 $ 230
v3.24.3
Leases (Weighted Average Remaining Term and Discount Rate) (Details)
Sep. 30, 2024
Leases [Abstract]  
Weighted-average remaining lease term 3 years 1 month 9 days
Weighted-average discount rate 5.20%
v3.24.3
Leases (Maturities of Operating Lease Liabilities) (Details)
$ in Thousands
Sep. 30, 2024
USD ($)
Leases [Abstract]  
2024 $ 3,403
2025 4,198
2026 3,812
2027 1,412
2028 723
Thereafter 300
Total future payments 13,848
Less: amounts representing interest 2,464
Present value of lease payments $ 11,384
v3.24.3
Commitments and Contingencies (Narrative) (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Jun. 30, 2024
Network1    
Long-term Purchase Commitment [Line Items]    
Cash held in escrow $ 3.4 $ 3.2
v3.24.3
Commitments and Contingencies (Pre-acquisition Contingencies and Corresponding Indemnification Receivables) (Details) - Network1 - USD ($)
$ in Thousands
Sep. 30, 2024
Jun. 30, 2024
Assets    
Prepaid expenses and other current assets $ 14 $ 14
Other non-current assets 3,671 3,598
Liabilities    
Accrued expenses and other current liabilities 14 14
Other long-term liabilities $ 3,671 $ 3,598
v3.24.3
Income Taxes (Details) - USD ($)
$ in Millions
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Jun. 30, 2024
Income Tax Disclosure [Abstract]      
Discrete net tax benefit $ 0.8 $ 1.5  
Effective income tax rate 26.10% 19.40%  
Unrecognized tax benefits $ 1.1   $ 1.1
Unrecognized tax benefits that would impact effective tax rate if recognized 0.9    
Income tax penalties and interest accrued $ 1.3   $ 1.3
v3.24.3
Restructurings - Additional Information (Details) - USD ($)
$ in Thousands
 1 Months Ended
Sep. 30, 2024
Jan. 31, 2024
Jun. 30, 2024
Restructuring and Related Activities [Abstract]      
Expected annual savings $ 10,500 $ 10,000  
Restructuring reserve $ 4,619   $ 1,629
v3.24.3
Restructurings - Summary of Restructuring and Severance Costs, By Segment (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Restructuring Cost and Reserve [Line Items]    
Charged to expense $ 5,068 $ 0
Employee separation and benefit costs    
Restructuring Cost and Reserve [Line Items]    
Charged to expense $ 5,068 $ 0
v3.24.3
Restructurings - Restructuring Activity (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Restructuring Reserve [Roll Forward]    
Balance, beginning of year $ 1,629  
Charged to expense 5,068 $ 0
Cash payments (2,078)  
Ending Balance $ 4,619  
v3.24.3
Acquisitions (Narrative) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Business Acquisition [Line Items]    
Consideration transferred, net of cash acquired $ 56,849 $ 0
Series of Individually Immaterial Business Acquisitions    
Business Acquisition [Line Items]    
Consideration transferred, net of cash acquired 56,800  
Business combination, acquisition related costs $ 400  
v3.24.3
Business Sale (Details) - Discontinued Operations, Held-for-sale or Disposed of by Sale - UK-based intY Business
$ in Millions
Dec. 19, 2023
USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]  
Cash payment received $ 17.6
Gain (loss) on disposal group $ 14.2
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