ScanSource, Inc. (NASDAQ:SCSC) Q4 2020 Earnings Conference Call - Final Transcript

Aug 31, 2020 • 05:00 pm ET

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ScanSource, Inc. (NASDAQ:SCSC) Q4 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Hello, and welcome to ScanSource Quarterly Earnings Conference Call. [Operator Instructions] Today's call is being recorded. [Operator Instructions]

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

Executive
Mary Gentry

Good afternoon, and thank you for joining us. Joining me on the call today are Mike Baur, our Chairman and CEO; John Eldh, our Chief Revenue Officer; and Gerry Lyons, our Chief Financial Officer. We will review our operating results for the quarter and fiscal year and then take your questions. We posted a CFO commentary that accompanies our comments and webcast in the Investor Relations section of our website.

Let me remind you that certain statements in our press release and the CFO commentary and on this call are forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, those factors identified in the earnings release we put out today and in ScanSource's Form 10-K for the year ended June 30th, 2020, as filed with the SEC.

Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. ScanSource disclaims any duty to update any forward-looking statements to reflect actual results or changes in expectations, except as required by law.

During our call, we will discuss both GAAP and non-GAAP results and have provided reconciliations between these amounts in the CFO commentary and in our press release. These reconciliations also can be found on our website and have been filed [Technical Issues]

Executive
Mike Baur

Thanks, Mary, and thanks for joining us today. We see today's call as a continuation of the call we held on July 23 to discuss the actions we are taking to address the business impact of the COVID-19 pandemic and prepare our business for the next phase of growth. On our call, we announced our fourth quarter net sales of $636 million, which reflect negative impacts from the COVID-19 pandemic on the VAR channel and end-user demand.

As we worked on our fiscal year 2021 annual plan, we continued to see the impact of COVID-19 on our business. We recognized the need to match our SG&A cost with sales volume declines as a result of the COVID-19 pandemic. We have sized the cost savings to reach an appropriate profitability level, as we expect our sales volumes to begin to increase throughout fiscal year 2021. At the same time, we decided it was strategically important to continue investments in our high-growth, higher-profitability areas. 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 delivered to our suppliers and customers. We have 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 our agency