Scansource, Inc. (NASDAQ:SCSC) Q1 2024 Earnings Conference Call November 9, 2023 10:30 AM ET

Company Participants

Mary Gentry - VP, IR & Treasurer

Michael Baur - Founder, Chairman & CEO

Stephen Jones - Senior EVP & CFO

Conference Call Participants

Gregory Burns - Sidoti & Company

Adam Tindle - Raymond James & Associates

Michael Latimore - Northland Capital Markets

Operator

Welcome to the ScanSource quarterly earnings conference call. [Operator Instructions].

I would now like to turn the call over to Mary Gentry, Senior Vice President, Treasurer and Investor Relations. Ma'am, you may begin.

Mary Gentry

Good morning, and thank you for joining us. Joining me on the call today are Mike Baur, our Chairman and CEO; and Steve Jones, our Chief Financial Officer. We will review our operating results for the quarter and then take your questions.

We posted an earnings infographic that accompanies our comments and webcast in the Investor Relations section of our website. As you know, certain statements in our press release, infographic and on this call are forward-looking statements and subject to risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include the factors identified in our earnings release and in our Form 10-K for the year ended June 30, 2023. Forward-looking statements represent our views only as of today, and ScanSource disclaims any duty to update these statements except as required by law. During our call, we will discuss both GAAP and non-GAAP results and have provided reconciliations on our website and in our Form 8-K.

I'll now turn the call over to Mike.

Michael Baur

Thanks, Mary, and thanks, everyone, for joining us today.

Our team executed well in a softer revenue environment and our business fundamentals remained strong. It's our purpose to be a trusted partner for our customers and our suppliers, exceeding their expectations in all demand environments.

First quarter net sales were softer than expected. Net sales declined 7% and reflect mixed demand. As in the past, we have benefited from a diverse ecosystem of partners who sell into different areas of technology and end markets. This allows our sales and marketing teams to find growth opportunities as demand changes during challenging market conditions. As an example, during the supply chain crisis, we utilized our strong balance sheet to minimize inventory shortages while enabling our customers to meet stronger than normal demand.

During Q1, technology growth areas included networking and physical security, which have been strong throughout this calendar year. And as we have discussed in previous quarters, our strong growth continued from our Cisco portfolio of products and services, especially in the areas of network security, software and Meraki endpoints. For our barcode, mobility and point of sale business, demand was lower than expected with fewer large enterprise deals. Based on our survey of customers and suppliers and our recent Channel Connect event, we believe the slowing demand for barcode, mobility and point of sale was widespread.