ScanSource shares fell 10% after fiscal Q4 results showed sales down 22% year on year. The reduction in net sales is primarily due to the impact of the COVID-19 pandemic, it says, which resulted in lower demand from its mainly SMB customers. For the Intelisys master agency business, net sales increased 15% year-over-year for the fourth quarter of fiscal year 2020.
For the fourth quarter of fiscal year 2020, operating income decreased to $113.4m, and non-GAAP operating income decreased to $8.2m.
"While the COVID-19 pandemic had a significant impact on our quarterly financial results, I am proud of how our teams have executed and the value we deliver to our suppliers and customers. We've taken the necessary actions to strengthen our balance sheet, improve our cost structure, and continue to drive investments in our higher-margin, VAR cloud platform and agency business," says CEO Mike Baur.
John Eldh Chief Revenue Officer: “I'd like to highlight some positive trends in our VAR business. During the fourth quarter, our top selling product categories included mobile computing, mobile printing, networking, video surveillance cameras, and unified communications hardware, software, and services. The new normal is driving more mobile use cases such as applications in e-commerce, delivery, curbside pickup, and warehouse expansion. Our heritage of specialized expertise in these technologies continues to be a differentiator.”
It is looking at selling more value added deployment services. “These are essentially services we attach to hardware that drive higher gross margin and profitability. In our payments business, we perform value added services, such as key injection and configuration on over 70% of devices prior to shipping. Leveraging our many years of success in payment provisioning, we are expanding our provisioning services to support cloud-based service providers who need to deliver ready-to-use voice handsets directly to end user customers.”
A little over a year ago, it added digital distribution capabilities with the CASCADE cloud platform with the acquisition of intY in July 2019. “During fiscal year 2020, we expanded use of the platform for our Microsoft business in the US and in Brazil. With the CASCADE platform powered by Partner Insights, we are helping our sales partners more easily sell strategic cloud solutions and build recurring revenue,” he says.
