SCANSOURCE INC
For the period ended Mar 31, 2025. Filed May 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
SCSC$42.78-5.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-01-30.
0000918965-25-000010
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000918965-25-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 88 previous paragraphs and 93 current paragraphs.
49 unchanged; 39 reworded; 5 added; 0 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Impact of the Macroeconomic Environment, Including Growth Outlook, Inflation and Tariffs
Current report
The macroeconomic environment, including the economic impacts of growth outlook, inflation, tariffs and shifting relations between the U.S. and other countries, continues to create significant uncertainty and may adversely affect our financial condition and results of operations. In 2025, the U.S. announced a variety of additional tariffs on goods from multiple nations and trading blocks and has been targeted with reciprocal tariffs and other retaliatory actions in response. Although the U.S. has announced a 90-day pause on certain tariffs, negotiations and the state of international trade policy and relations continue to evolve. We are mindful of the potential impact these conditions could have on our customers, suppliers and end-customer demand and we are actively monitoring changes to the global macroeconomic environment and assessing the potential impacts these challenges may have on our financial condition, results of operations and liquidity. We expect to pass any price increases from our suppliers resulting from tariffs to our customers. We are also mitigating risks through strategic planning and maintaining financial flexibility, but we cannot predict the outcome of our mitigation strategies or the ultimate impact of tariffs and the global macroeconomic environment on our financial condition or results of operations.
Current report
Business Acquisitions
Current report
Restructuring
Current report
For the Intelisys & Advisory segment, operating income increased $0.8 million, or 11.1%, for the quarter ended March 31, 2025. Operating margin decreased to 31.5% for the quarter ended March 31, 2025. The increase in operating income for the quarter ended March 31, 2025 is a result of higher gross profits for the quarter.
Reworded paragraphs (39)
Previous wording
ScanSource is a leading hybrid distributor connecting devices to the cloud and accelerating growth for customers and channel partners across hardware, software as a service ("SaaS"), and connectivity and cloud services. ScanSource uses multiple sales models to offer hybrid distribution solutions from leading suppliers of specialty technologies and connectivity and cloud services. The Company operates primarily in the United States, Canada and Brazil.
Current wording
ScanSource is a leading hybrid distributor connecting devices to the cloud and accelerating growth for customers and channel partners across hardware, software as a service ("SaaS"), and connectivity and cloud services. ScanSource uses multiple sales models to offer hybrid distribution solutions from leading suppliers of specialty technologies and connectivity and cloud services. The Company operates in the United States, Canada and Brazil.
Previous wording
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:
Current wording
We operate our business under a management structure that enhances our specialty technology focus and hybrid distribution growth strategy. Our segments operate in the United States, Canada and Brazil and are based on sales models:
Previous wording
On August 8, 2024, we completed the acquisition of substantially all of the assets of Secure Path Networks, LLC doing business as Resourcive ("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.
Current wording
On August 8, 2024, we completed the acquisition of substantially all of the assets of Secure Path Networks, LLC doing business as Resourcive ("Resourcive"), a leading technology advisor. Resourcive delivers strategic IT sourcing solutions to mid-market and enterprise businesses.
Previous wording
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 utilizes multiple sales models to offer hardware, SaaS, and 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 continuing expanding our investments in the agency channel in the near term.
Current wording
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 utilizes multiple sales models to offer hardware, SaaS, and 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.
Previous wording
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 and six months ended December 31, 2024 and 2023:
Current wording
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 and nine months ended March 31, 2025 and 2024:
Previous wording
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 and six months ended December 31, 2024, net sales decreased $138.2 million, or 16.0%, and $239.9 million, or 14.0%, respectively, compared to the prior-year period. Excluding the impact from foreign exchange rate fluctuations and the impact of divestitures and acquisitions, adjusted net sales decreased$132.7 million, or 15.4%, and $226.9 million, or 13.3%, for the quarter and six months ended December 31, 2024, respectively, compared to the prior-year periods. The decrease in net sales and adjusted net sales for the quarter is primarily due to lower large deals and continued soft demand in a more cautious technology spending environment.
Current wording
The Specialty Technology Solutions segment consists of sales to channel partners in the United States, Canada and Brazil. For the quarter andnine months ended March 31, 2025, net sales decreased $51.4 million, or 7.0%, and $291.3 million, or 11.9%, respectively, compared to the prior-year periods. Excluding the impact from foreign exchange rate fluctuations and the impact of divestitures and acquisitions, adjusted net sales decreased$49.4 million, or 6.8%, and $276.3 million, or 11.3%, respectively, compared to the prior-year periods. For the quarter ended March 31, 2025, net sales decreased primarily due to lower net sales in Brazil. In North America, most of the technologies in this segment had year-over-year growth. For thenine months ended March 31, 2025, net sales decreased primarily due to soft demand in a more cautious technology spending environment.
Previous wording
The Intelisys & Advisory segment consists of sales to channel partners primarily in the United States through technology services distributors and technology advisors. For the quarter ended December 31, 2024, net sales increased $0.9 million, or 4.0% compared to the prior-year period. Excluding the impact from foreign exchange rate fluctuations and the impact of acquisitions, adjusted net sales decreased $0.7 million, or 3.2%.
Current wording
The Intelisys & Advisory segment consists of sales and services to both channel partners (Intelisys) and end-users (Advisory) in the United States. For thequarter ended March 31, 2025, net sales increased $3.6 million, or 16.0%, compared to the prior-year period. Excluding the impact from foreign exchange rate fluctuations and the impact of acquisitions, adjusted net sales increased $1.0 million, or 4.3% for the quarter ended March 31, 2025.
Previous wording
For the six months ended December 31, 2024, net sales increased $1.9 million, or 4.1%, compared to the prior-year period. Excluding the impact from foreign exchange rate fluctuations and the impact of acquisitions, adjusted net sales decreased $0.4 million, or 0.9% for the six months ended December 31, 2024.
Current wording
For the nine months ended March 31, 2025, net sales increased $5.5 million, or 8.1%, compared to the prior-year period. Excluding the impact from foreign exchange rate fluctuations and the impact of acquisitions, adjusted net sales increased $0.6 million, or 0.9% for the nine months ended March 31, 2025.
Previous wording
The increase in net sales for the quarter and six months ended December 31, 2024 reflects the addition of an acquisition. The slight decrease in adjusted net sales for the quarter and six months is primarily due to lower Intelisys net sales. Quarterly net billings for Intelisys increased 5.0% over the prior-year quarter to bring annualized net billings to approximately $2.77 billion.
Current wording
The increase in net sales for the quarter and nine months ended March 31, 2025 reflects the addition of an acquisition and Intelisys net sales growth. Quarterly net billings for Intelisys increased 6.8% over the prior-year quarter to bring annualized net billings to approximately $2.86 billion.
Previous wording
(b) Countries outside of Brazil represent $0.1 million, or 0.2% of sales, and $0.2 million, or 0.2% of sales, for the quarter and six months ended December 31, 2024, respectively. Countries outside of Brazil represent $1.8 million, or 2.0% of sales, and $4.2 million, or 2.4% of sales, for the quarter and six months ended December 31, 2023, respectively.
Current wording
(b) Countries outside of Brazil represent $0.1 million, or 0.2% of sales, and $0.3 million, or 0.2% of sales, for the quarter and nine months ended March 31, 2025, respectively. Countries outside of Brazil represent $0.1 million, or 0.2% of sales, and $4.3 million, or 1.7% of sales, for the quarter and nine months ended March 31, 2024, respectively.
Previous wording
The following table summarizes our gross profit for the quarters and six months ended December 31, 2024 and 2023:
Current wording
The following table summarizes our gross profit for the quarters and nine months ended March 31, 2025 and 2024:
Previous wording
For the quarter ended December 31, 2024, gross profit dollars for the Specialty Technology Solutions segment increased $0.2 million, or 0.2%, compared to the prior-year quarter. A more favorable sales mix positively impacted gross profit by $12.6 million, offsetting lower sales volumes of $12.4 million. Gross profit margin increased 175 basis points over the prior-year quarter to 10.8%.
Current wording
For the quarter ended March 31, 2025, gross profit dollars for the Specialty Technology Solutions segment increased $2.2 million, or 3.0%, compared to the prior-year quarter. Vendor program recognition positively impacted gross profit by $7.2 million, offsetting the impact of lower sales volumes of $5.0 million. Gross profit margin increased 106 basis points over the prior-year quarter to 10.9%.
Previous wording
For the six months ended December 31, 2024, gross profit dollars decreased$5.6 million, or 3.5%, compared to the prior-year period. Lower sales volume, after considering the associated cost of goods sold, reduced gross profit dollars by $22.6 million. Gross profit margin increased 115 basis points year-over-year to 10.6%. Gross margin mix positively impacted gross profit by $17.0 million largely due to favorable sales mix and higher vendor program recognition.
Current wording
For the nine months ended March 31, 2025, gross profit dollars decreased$3.5 million, or 1.5%, compared to the prior-year period. Lower sales volume reduced gross profit dollars by $27.8 million. Gross margin mix positively impacted gross profit by $24.3 million largely due to higher vendor program recognition and a more favorable sales mix. Gross profit margin increased 113 basis points year-over-year to 10.7%.
Previous wording
For the quarter ended December 31, 2024, gross profit dollars for the Intelisys & Advisory segment increased $0.8 million, or 3.5%, compared to the prior-year quarter. Higher sales volume, largely due to the impact of our Advisory business, increased gross profit for the quarter. Gross profit margin decreased 56 basis points compared to the prior-year quarter to 98.9%, reflecting the addition of professional services to the sale mix.
Current wording
For the quarter ended March 31, 2025, gross profit dollars for the Intelisys & Advisory segment increased $3.6 million, or 15.8%, compared to the prior-year quarter. Higher sales volume, largely due to the impact of our Resourcive acquisition, increased gross profit for the quarter. Gross profit margin decreased 24 basis points compared to the prior-year quarter to 99.2%, reflecting the addition of professional services to the sales mix.
Previous wording
For the six months ended December 31, 2024, gross profit dollars increased $1.7 million, or 3.8%, compared to the prior-year period. Higher sales volume, largely due to the recent Resourcive acquisition, increased gross profit for the six-month period. Gross profit margin decreased 29 basis points compared to the prior-year six-month period to 99.2%, reflecting the addition of professional services to the sales mix.
Current wording
For the nine months ended March 31, 2025, gross profit dollars increased $5.3 million, or 7.8%, compared to the prior-year period. Higher sales volume, largely due to the acquisition of Resourcive, increased gross profit for the nine-month period. Gross profit margin decreased 27 basis points compared to the prior-year nine-month period to 99.2%, reflecting the addition of professional services to the sales mix.
Previous wording
The following table summarizes our operating expenses for the quarters and six months ended December 31, 2024 and 2023:
Current wording
The following table summarizes our operating expenses for the quarters and nine months ended March 31, 2025 and 2024:
Previous wording
Selling, general and administrative expenses (“SG&A”) increased by $7.0 million, or 10.5%, and $3.3 million, or 2.3% for thequarter and six months ended December 31, 2024, respectively compared to the prior-year periods. The increase for the quarter ended and six-month period is primarily attributable to increased customer specific bad debt expense in the United States and Canada, as well as higher costs related to recent acquisitions.
Current wording
Selling, general and administrative expenses (“SG&A”) increased by $3.1 million, or 4.7%, and $6.4 million, or 3.1% for the quarter and nine months ended March 31, 2025, respectively compared to the prior-year periods. The increase for the quarter is primarily attributable to increased costs related to acquisitions. The increase for the nine-month period is primarily attributable to increased costs related to acquisitions as well as increased customer specific bad debt expense.
Previous wording
The increase in amortization expense of $1.0 million and$1.1 million during thequarter and six months ended December 31, 2024, respectively, is largely due to intangible assets acquired in our recent acquisitions of Advantix and Resourcive.
Current wording
The increase in amortization expense of $1.2 million and$2.3 million during thequarter and nine months ended March 31, 2025, respectively, is largely due to intangible assets acquired in our acquisitions of Advantix and Resourcive.
Previous wording
Restructuring and other charges incurred of $0.3 million and $5.4 million during thequarter and six months ended December 31, 2024, respectively, related to employee separation and benefit costs in connection with our expense reduction and restructuring plans implemented during the current fiscal year.
Current wording
Restructuring and other charges of $5.4 million were incurred during the nine months ended March 31, 2025 compared to charges of $3.9 million for thequarter andnine months ended March 31, 2024. Restructuring and other charges relate to employee separation and benefit costs in connection with our expense reduction and restructuring plans implemented during the current and prior fiscal year.
Previous wording
We present changes in fair value of the contingent consideration owed to the former shareholders of businesses that we acquire as a separate line item in operating expenses. We recorded a fair value adjustment expense of $1.1 million in thequarter ended December 31, 2024. The expense from change in fair value of contingent consideration for the quarter and six months is largely due to therecurring amortization of the unrecognized fair value discount.
Current wording
We present changes in fair value of the contingent consideration owed to the former shareholders of businesses that we acquire as a separate line item in operating expenses. We recorded a fair value adjustment expense of $0.9 million and $2.0 million in thequarter andnine months ended March 31, 2025, respectively. The expense from changes in fair value of contingent consideration for thequarter and nine months is largely due to therecurring amortization of the unrecognized fair value discount.
Previous wording
The following table summarizes our operating income for the quarters and six months ended December 31, 2024 and 2023:
Current wording
The following table summarizes our operating income for the quarters and nine months ended March 31, 2025 and 2024:
Previous wording
For the Specialty Technology Solutions segment, operating income decreased $5.6 million, or 28.5%, and $6.5 million, or 17.5%, respectively, for the quarter and six months ended December 31, 2024, respectively, compared to the prior-year periods. Operating margin was at 1.9% and 2.1% for the quarter and six months ended December 31, 2024, respectively. The decrease in operating income for the quarter is primarily due to higher bad debt expense. The decrease in operating income for the six month period is primarily due to lower gross profits from lower sales volumes.
Current wording
For the Specialty Technology Solutions segment, operating income decreased $0.3 million, or 2.0%, and $6.8 million, or 13.1% for the quarter and nine months ended March 31, 2025, respectively, compared to the prior-year periods. Operating margin was 2.1% for the quarter and nine months ended March 31, 2025. The decrease in operating income for thequarter is primarily due to higher amortization expense related to a recent acquisition. The decrease in operating income for the nine months is primarily due to lower gross profits from lower sales volumes as well as higher bad debt expense.
Previous wording
For the Intelisys & Advisory segment, operating income decreased $1.8 million, or 22.2%, and $2.1 million, or 13.9%, respectively, for the quarter and six months ended December 31, 2024, respectively, compared to the prior-year periods. Operating margin decreased to 26.6% and 27.1% for the quarter and six months ended December 31, 2024, respectively. The decrease in the quarter and six-month comparative periods is primarily driven by higher employee costs and expense related to the change in fair value of contingent consideration.
Current wording
For the nine months ended March 31, 2025, operating income decreased $1.2 million, or 5.5%, compared to the prior-year period. Operating margin decreased to 28.6% for the nine months ended March 31, 2025. The decrease in operating income for the nine-month period ended March 31, 2025 is primarily driven by expense related to the change in fair value of contingent consideration.
Previous wording
For the quarter and six months ended December 31, 2024, Corporate operating losses of $2.1 million and $7.6 million, respectively, represent restructuring, acquisition-related costs and a legal settlement incurred in December 2024.
Current wording
For the quarter and nine months ended March 31, 2025, Corporate operating losses of $0.3 million and $7.9 million, respectively, represent restructuring and acquisition-related costs and a legal settlement incurred during the fiscal year.
Previous wording
The following table summarizes our total other (income) expense for the quarters and six months ended December 31, 2024 and 2023:
Current wording
The following table summarizes our total other (income) expense for the quarters and nine months ended March 31, 2025 and 2024:
Previous wording
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 and six months ended December 31, 2024 compared to the prior-year periods, primarily from lower average borrowings on our multi-currency revolving credit facility.
Current wording
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 and nine months ended March 31, 2025 compared to the prior-year periods, primarily from lower average borrowings on our multi-currency revolving credit facility.
Previous wording
Interest income increased for the quarter and six months ended December 31, 2024 primarily from interest earned on higher cash balances in the United States.
Current wording
Interest income increased for the quarter and nine months ended March 31, 2025 primarily from interest earned on higher average cash balances in the United States.
Previous wording
For the quarter and six months ended December 31, 2024, we recognized a gain of $0.3 million and $5.4 million, respectively primarily as a result of an insurance recovery in connection with the cybersecurity attack in the fourth quarter of fiscal year 2023.
Current wording
For the quarter and nine months ended March 31, 2025, we recognized a gain of $1.0 million and $6.4 million, respectively, primarily as a result of an insurance recovery in connection with the cybersecurity attack in the fourth quarter of fiscal year 2023.
Previous wording
For the quarter and six months ended December 31, 2024, income tax expense was $2.7 million and $8.6 million, respectively, reflecting an effective tax rate of 13.5% and 20.3%. In comparison, for the quarter and six months ended December 31, 2023, income tax expense was $7.3 million and $11.0 million reflecting an effective tax rate of 18.3% and 18.6%, respectively. The decrease in the effective tax rate for the quarter is primarily due to discrete items. We expect the effective tax rate, excluding discrete items, for fiscal year 2025 to be approximately 28.5% to 29.5%. See Note 13 - Income Taxes to the Notes to Consolidated Financial Statements for further discussion.
Current wording
For the quarter and nine months ended March 31, 2025, income tax expense was $6.8 million and $15.4 million, respectively, reflecting an effective tax rate of 28.0% and 23.1%. In comparison, for the quarter and nine months ended March 31, 2024, income tax expense was $5.1 million and $16.2 million reflecting an effective tax rate of 28.7% and 21.0%, respectively. The decrease in the effective tax rate for the quarter is primarily driven by a change in the geographical mix of earnings. The increase in the effective tax rate for the nine-month period is primarily due to the higher amount of discrete tax benefits recognized in the prior-year period. We expect the effective tax rate, excluding discrete items, for fiscal year 2025 to be approximately 28.2% to 29.2%. See Note 13 - Income Taxes to the Notes to Consolidated Financial Statements for further discussion.
Previous wording
(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.
Current wording
(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 90 days in the current and 91 days in the prior-year quarter.
Previous wording
Our cash and cash equivalents balance totaled $110.5 million at December 31, 2024, compared to $185.5 million at June 30, 2024, including $26.0 million and $20.0 million held outside of the United States at December 31, 2024 and June 30, 2024, respectively. Checks released but not yet cleared in the amount of $0.1 million and $5.9 million are included in accounts payable at December 31, 2024 and June 30, 2024, respectively.
Current wording
Our cash and cash equivalents balance totaled $146.3 million at March 31, 2025, compared to $185.5 million at June 30, 2024, including $33.3 million and $20.0 million held outside of the United States at March 31, 2025 and June 30, 2024, respectively. Checks released but not yet cleared in the amount of $0.2 million and $5.9 million are included in accounts payable at March 31, 2025 and June 30, 2024, respectively.
Previous wording
Our net investment in working capital, defined as accounts receivable plus inventories less accounts payable, decreased $14.5 million to $520.7 million at December 31, 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 focus on working capital efficiency improvements. 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.
Current wording
Our net investment in working capital, defined as accounts receivable plus inventories less accounts payable, decreased $7.9 million to $498.3 million at March 31, 2025 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 and our focus on working capital efficiency. 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.
Previous wording
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 $38.6 million and $156.8 million for the six months ended December 31, 2024 and December 31, 2023, respectively. Cash provided by operating activities for the six months ended December 31, 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 December 31, 2023, accounts receivable and inventory decreased 17.2% and 14.5% respectively, while accounts payable decreased 3.7%.
Current wording
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 $104.7 million and $316.9 million for the nine months ended March 31, 2025 and March 31, 2024, respectively. Cash provided by operating activities for the nine months ended March 31, 2025 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 March 31, 2024, accounts receivable and inventory decreased 4.6% and 10.0% respectively, while accounts payable decreased 2.7%.
Previous wording
The number of days sales outstanding ("DSO") was 66 days at December 31, 2024, compared to 71 days at June 30, 2024 and 68 days at December 31, 2023. Inventory turned 5.2 times during the quarter ended December 31, 2024, compared to 5.0 times during the quarter ended June 30, 2024 and 5.1 times in the prior-year quarter ended December 31, 2023.
Current wording
The number of days sales outstanding ("DSO") was 72 days at March 31, 2025 and 71 days at March 31, 2024. Inventory turned 5.0 times during the quarter ended March 31, 2025, compared to 4.8 times in the prior-year quarter ended March 31, 2024.
Previous wording
Cash used in investing activities for the six months ended December 31, 2024 was $58.5 million, compared to cash provided by investing activities of $13.1 million in the prior-year period. Cash used in investing activities for the six months ended December 31, 2024 is largely due to cash paid for acquisitions and capital expenditures. Cash provided by investing activities for the six months ended December 31, 2023 represents the proceeds from the sale of business offset by capital expenditures.
Current wording
Cash used in investing activities for the nine months ended March 31, 2025 was $59.9 million, compared to cash provided by investing activities of $10.7 million in the prior-year period. Cash used in investing activities for the nine months ended March 31, 2025 is largely due to cash paid for acquisitions and capital expenditures. Cash provided by investing activities for the nine months ended March 31, 2024 represents the proceeds from the sale of a business offset by capital expenditures.
Previous wording
Management expects capital expenditures for fiscal year 2025 to range from $8.0 million to $12.0 million, prim arily for IT investments.
Current wording
Management expects capital expenditures for fiscal year 2025 to range from $7.0 million to $9.0 million, primarily for IT investments.
Previous wording
For the six months ended December 31, 2024 and December 31, 2023, cash used in financing activities totaled $52.4 million and $161.3 million, respectively. Cash used in financing activities for the six months ended December 31, 2024 is primarily attributable to common stock repurchases in the six months. Cash used in financing activities for the six months ended December 31, 2023 is primarily attributable to repayments of borrowings on the revolving credit facility.
Current wording
For the nine months ended March 31, 2025 and March 31, 2024, cash used in financing activities totaled $83.4 million and $203.9 million, respectively. Cash used in financing activities for the nine months ended March 31, 2025 is primarily attributable to common stock repurchases in the nine months. Cash used in financing activities for the nine months ended March 31, 2024 is primarily attributable to repayments of borrowings on the revolving credit facility.
Previous wording
During the quarter and six months ended December 31, 2024, our borrowings under the Amended Credit Agreement were U.S. dollar loans. The spread in effect as of December 31, 2024 was 1.00% for SOFR-based loans and 0.00% for alternate base rate loans. The commitment fee rate in effect at December 31, 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 December 31, 2024.
Current wording
During the quarter and nine months ended March 31, 2025, our borrowings under the Amended Credit Agreement were U.S. dollar loans. The spread in effect as of March 31, 2025 was 1.00% for SOFR-based loans and 0.00% for alternate base rate loans. The commitment fee rate in effect at March 31, 2025 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 March 31, 2025.
Previous wording
The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, during the six month periods ended December 31, 2024 and 2023 was $0.3 millionand $138.7 million, respectively. There was $350.0 million and $349.9 million available for additional borrowings as of December 31, 2024 and June 30, 2024, respectively. The effective interest rates for the revolving line of credit were 5.63% and 6.44% as of December 31, 2024 and June 30, 2024, respectively. There were no letters of credit issued under the multi-currency revolving credit facility at December 31, 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 December 31, 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.
Current wording
The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, during the nine month periods ended March 31, 2025 and 2024 was $0.3 millionand $94.6 million, respectively. There was $350.0 million and $349.9 million available for additional borrowings as of March 31, 2025 and June 30, 2024, respectively. The effective interest rates for the revolving line of credit were 5.45% and 6.44% as of March 31, 2025 and June 30, 2024, respectively. There were no letters of credit issued under the multi-currency revolving credit facility at March 31, 2025 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 March 31, 2025, 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.