ScanSource CEO Discusses F4Q2010 Results - Earnings Call Transcript
Operating expenses in the current quarter increased to $35.8 million compared with $33.5 million in the comparative prior year period. The increase primarily results from the addition of ScanSource Communications Germany, which does not exist in the prior year’s quarter, changes in vendor programs and higher bad debt expense. Operating expense as a percent of net sales decreased to 6.2% in the current quarter compared to 7.6% in the comparative prior year period. Sequentially SG&A was approximately $400,000 higher than the third quarter on much higher revenues.
Operating income for the June 2010 quarter increased to $21 million, a 5% increase from operating income in the comparative prior year of $20 million. Expressed as a percentage of sales, operating income was 3.6% in the current quarter compared to 4.5% for the prior year quarter, and sequentially was down from the 3.8% for the third quarter of 2010.
Interest expense was $365,000 for the quarter and was flat to the prior year quarter. The effective tax rate for the June 2010 quarter decreased to 33.1% compared with the prior year quarter of 37.4%. This decrease in the effective rate from the prior year reflects a higher mix of taxable income derived in lower tax rate jurisdiction, and reflects the benefit of changes to our international capital structure executed during the fiscal year.
Our return on invested capital was 17.8% for the quarter, which compares to 18.9% for the prior year quarter.In summary, the June 2010 quarter had reported EPS of $0.52 versus a reported EPS of $0.47 in the June 2009 quarter. This improvement was due to the increased operating income generated from higher gross profit dollars on higher sales and a more favorable tax rate than in the previous year’s quarter.Read the rest of this transcript for free on seekingalpha.com
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