10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Quarterly period ended December 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 000-26926

ScanSource, Inc.

South Carolina

(State of Incorporation)

57-0965380

(I.R.S. Employer Identification No.)

6 Logue Court

Greenville, South Carolina 29615

(864) 288-2432

Securities registered pursuant to Section 12(b) of the Act:
Title of each class:	Trading Symbol:	Name of exchange on which registered:
Common stock, no par value	SCSC	NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Smaller reporting company	☐
Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at January 31, 2024
Common Stock, no par value per share	25,170,468 shares

SCANSOURCE, INC.

INDEX TO FORM 10-Q

December 31, 2023

		Page #
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets (unaudited) at December 31, 2023 and June 30, 2023	5
	Condensed Consolidated Income Statements (unaudited) for the Quarters and Six Months Ended December 31, 2023 and 2022	6
	Condensed Consolidated Statements of Comprehensive Income (unaudited) for the Quarters and Six Months Ended December 31, 2023 and 2022	7
	Condensed Consolidated Statements of Shareholders' Equity (unaudited) for the Quarters and Six Months Ended December 31, 2023 and 2022	8
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended December 31, 2023 and 2022	10
	Notes to Condensed Consolidated Financial Statements (unaudited)	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 5.	Other Information	46
Item 6.	Exhibits	47
SIGNATURES		48

3

FORWARD-LOOKING STATEMENTS

Forward-looking statements are included in the "Risk Factors," "Legal Proceedings," "Management’s Discussion and Analysis of Financial Condition and Results of Operations," and "Quantitative and Qualitative Disclosures About Market Risk" sections and elsewhere herein. Words such as "expects," "anticipates," "believes," "intends," "plans," "hopes," "forecasts," "seeks," "estimates," "goals," "projects," "strategy," "future," "likely," "may," "should," and variations of such words and similar expressions generally identify such forward-looking statements. Any forward-looking statement made by us in this Form 10-Q is based only on information currently available to us and speaks only as of the date on which it is made. Except as may be required by law, we expressly disclaim any obligation to update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors including, but not limited to the following factors, which are neither presented in order of importance nor weighted: macroeconomic conditions, including potential prolonged economic weakness, inflation and supply chain challenges, the failure to manage and implement the Company's organic growth strategy, credit risks involving the Company's larger customers and suppliers, changes in interest and exchange rates and regulatory regimes impacting the Company's international operations, risk to the Company's business from a cyber attack, a failure of the Company's IT systems, failure to hire and retain quality employees, loss of the Company's major customers, relationships with the Company's key suppliers and sales partners or a termination or a significant modification of the terms under which it operates with such suppliers and sales partners, changes in the Company's operating strategy and other factors set forth in "Risk Factors" contained in our Annual Report on Form 10-K for the year ended June 30, 2023.

4

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share information)

	December 31, 2023		June 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	44,987	$	36,178
Accounts receivable, less allowance of $19,243 at December 31, 2023 and $15,480 at June 30, 2023	662,799		753,236
Inventories	575,137		757,574
Prepaid expenses and other current assets	122,272		110,087
Total current assets	1,405,195		1,657,075
Property and equipment, net	36,546		37,379
Goodwill	208,214		216,706
Identifiable intangible assets, net	45,313		68,495
Deferred income taxes	19,478		17,764
Other non-current assets	66,059		70,750
Total assets	$	1,780,805	$	2,068,169
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	540,642	$	691,119
Accrued expenses and other current liabilities	58,460		78,892
Income taxes payable	3,653		9,875
Current portion of long-term debt	7,857		6,915
Total current liabilities	610,612		786,801
Deferred income taxes	—		3,816
Long-term debt, net of current portion	139,899		144,006
Borrowings under revolving credit facility	20,878		178,980
Other long-term liabilities	55,815		49,268
Total liabilities	827,204		1,162,871
Commitments and contingencies
Shareholders’ equity:
Preferred stock, no par value; 3,000,000 shares authorized, none issued	—		—
Common stock, no par value; 45,000,000 shares authorized, 25,154,469 and 24,844,203 shares issued and outstanding at December 31, 2023 and June 30, 2023, respectively	63,983		58,241
Retained earnings	984,836		936,678
Accumulated other comprehensive loss	(95,218)		(89,621)
Total shareholders’ equity	953,601		905,298
Total liabilities and shareholders’ equity	$	1,780,805	$	2,068,169
June 30, 2023 amounts are derived from audited consolidated financial statements.
See accompanying notes to these condensed consolidated financial statements.

5

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)

(In thousands, except per share data)

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
Net sales	$	884,792	$	1,011,241	$	1,761,098	$	1,955,054
Cost of goods sold	784,044		895,907		1,553,842		1,726,236
Gross profit	100,748		115,334		207,256		228,818
Selling, general and administrative expenses	66,921		69,074		142,356		140,667
Depreciation expense	2,964		2,678		5,759		5,441
Intangible amortization expense	4,037		4,150		8,230		8,391
Operating income	26,826		39,432		50,911		74,319
Interest expense	3,359		5,060		8,945		8,507
Interest income	(2,119)		(2,027)		(3,444)		(3,618)
Gain on sale of business	(14,533)		—		(14,533)		—
Other expense, net	73		207		750		955
Income before income taxes	40,046		36,192		59,193		68,475
Provision for income taxes	7,320		10,458		11,035		18,699
Net income	$	32,726	$	25,734	$	48,158	$	49,776
Per share data:
Net income per common share, basic	$	1.31	$	1.02	$	1.93	$	1.97
Weighted-average shares outstanding, basic	25,035		25,287		24,961		25,244
Net income per common share, diluted	$	1.29	$	1.01	$	1.91	$	1.96
Weighted-average shares outstanding, diluted	25,334		25,502		25,235		25,454

See accompanying notes to these condensed consolidated financial statements.

6

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(In thousands)

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
Net income	$	32,726	$	25,734	$	48,158	$	49,776
Unrealized (loss) gain on hedged transaction, net of tax	(1,547)		3		(1,395)		1,882
Realized foreign currency gain on sale of business	3,805		—		3,805		—
Foreign currency translation adjustment	(1,118)		7,401		(8,007)		184
Comprehensive income	$	33,866	$	33,138	$	42,561	$	51,842

See accompanying notes to these condensed consolidated financial statements.

7

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

(In thousands, except share information)

	Common Stock (Shares)	Common Stock (Amount)		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance at June 30, 2023	24,844,203	$	58,241	$	936,678	$	(89,621)	$	905,298
Net income	—	—		15,432		—		15,432
Unrealized gain on hedged transaction, net of tax	—	—		—		153		153
Foreign currency translation adjustment	—	—		—		(6,890)		(6,890)
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes	116,028	(1,510)		—		—		(1,510)
Share-based compensation	—	2,770		—		—		2,770
Balance at September 30, 2023	24,960,231	$	59,501	$	952,110	$	(96,358)	$	915,253
Net income	—	—		32,726		—		32,726
Unrealized loss on hedged transaction, net of tax	—	—		—		(1,547)		(1,547)
Foreign currency translation adjustment	—	—		—		(1,118)		(1,118)
Realized foreign currency translation gain from disposal of a business	—	—		—		3,805		3,805
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes	230,543	3,162		—		—		3,162
Common stock repurchased	(36,305)	(1,251)		—		—		(1,251)
Share-based compensation	—	2,571		—		—		2,571
Balance at December 31, 2023	25,154,469	$	63,983	$	984,836	$	(95,218)	$	953,601
See accompanying notes to these condensed consolidated financial statements.

8

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

(In thousands, except share information)

	Common Stock (Shares)	Common Stock (Amount)		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance at June 30, 2022	25,187,351	$	64,297	$	846,869	$	(104,638)	$	806,528
Net income	—	—		24,042		—		24,042
Unrealized gain on hedged transaction, net of tax	—	—		—		1,879		1,879
Foreign currency translation adjustment	—	—		—		(7,217)		(7,217)
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes	38,551	(586)		—		—		(586)
Share-based compensation	—	2,358		—		—		2,358
Balance at September 30, 2022	25,225,902	$	66,069	$	870,911	$	(109,976)	$	827,004
Net income	—	—		25,734		—		25,734
Unrealized gain on hedged transaction, net of tax	—	—		—		3		3
Foreign currency translation adjustment	—	—		—		7,401		7,401
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes	117,112	(1,112)		—		—		(1,112)
Share-based compensation	—	3,356		—		—		3,356
Balance at December 31, 2022	25,343,014	$	68,313	$	896,645	$	(102,572)	$	862,386
See accompanying notes to these condensed consolidated financial statements.

9

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

	Six months ended
	December 31,
	2023		2022
Cash flows from operating activities:
Net income	$	48,158	$	49,776
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gain on sale of business	(14,533)		—
Depreciation and amortization	14,475		14,285
Amortization of debt issue costs	193		385
Provision for doubtful accounts	4,472		33
Share-based compensation	5,340		5,679
Deferred income taxes	(1,703)		932
Finance lease interest	46		24
Changes in operating assets and liabilities:
Accounts receivable	75,579		(49,541)
Inventories	182,168		(146,826)
Prepaid expenses and other assets	(11,576)		30,487
Other non-current assets	3,208		(7,168)
Accounts payable	(135,138)		33,820
Accrued expenses and other liabilities	(7,678)		(13,268)
Income taxes payable	(6,254)		6,036
Net cash provided by (used in) operating activities	156,757		(75,346)
Cash flows from investing activities:
Capital expenditures	(4,865)		(4,262)
Proceeds from sale of business, net of cash transferred	17,978		—
Net cash provided by (used in) investing activities	13,113		(4,262)
Cash flows from financing activities:
Borrowings on revolving credit, net of expenses	1,134,629		1,232,058
Repayments on revolving credit, net of expenses	(1,292,729)		(1,137,897)
(Repayments) borrowings on long-term debt, net	(3,165)		17,465
Repayments on finance lease obligation	(442)		(492)
Debt issuance costs	—		(1,407)
Exercise of stock options	4,309		634
Taxes paid on settlement of equity awards	(2,657)		(2,332)
Common stock repurchased	(1,251)		—
Net cash (used in) provided by financing activities	(161,306)		108,029
Effect of exchange rate changes on cash and cash equivalents	245		37
Increase in cash and cash equivalents	8,809		28,458
Cash and cash equivalents at beginning of period	36,178		37,987
Cash and cash equivalents at end of period	$	44,987	$	66,445
See accompanying notes to these condensed consolidated financial statements.

10

SCANSOURCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(1) Business and Summary of Significant Accounting Policies

Business Description

ScanSource, Inc. (together with its subsidiaries referred to as “the Company” or “ScanSource”) is a leading hybrid distributor connecting devices to the cloud and accelerating growth for partners across hardware, Software as a Service ("SaaS"), connectivity and cloud. The Company brings technology solutions and services from the world’s leading suppliers of mobility and barcode, point-of-sale ("POS"), payments, networking, physical security, unified communications and collaboration, telecom and cloud services to market. The Company operates in the United States, Canada, Brazil and the United Kingdom ("UK"). The Company's two operating segments, Specialty Technology Solutions and Modern Communications & Cloud, are based on technology type and are generally related to technology devices and communication, connectivity and cloud services, respectively.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared by the Company’s management in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position at December 31, 2023 and June 30, 2023, the results of operations for the quarters and six months ended December 31, 2023 and 2022, the condensed consolidated statements of comprehensive income for the quarters and six months ended December 31, 2023 and 2022, the condensed consolidated statements of shareholders' equity for the quarters and six months ended December 31, 2023 and 2022 and the condensed consolidated statements of cash flows for the six months ended December 31, 2023 and 2022. The results of operations for the quarter and six months ended December 31, 2023 are not necessarily indicative of the results to be expected for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. Unless otherwise indicated, disclosures provided in the Notes pertain to continuing operations only.

Summary of Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies for the six months ended December 31, 2023 from the policies described in the notes to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2023. For a discussion of the Company’s significant accounting policies, please see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. The Company maintains zero-balance disbursement accounts at various financial institutions at which the Company does not maintain significant depository relationships. Due to the terms of the agreements governing these accounts, the Company generally does not have the right to offset outstanding checks written from these accounts against cash on hand, and the respective institutions are not legally obligated to honor the checks until sufficient funds are transferred to fund the checks. As a result, checks released but not yet cleared from these accounts in the amount of $8.0 million are included in accounts payable on the condensed consolidated balance sheets at December 31, 2023 and June 30, 2023.

Long-lived Assets

11

The Company presents depreciation expense and intangible amortization expense on the condensed consolidated income statements. The Company's depreciation expense related to selling, general and administrative costs totaled $3.0 million and $5.8 million for the quarter and six months ended December 31, 2023 and $2.7 million and $5.4 million for the quarter and six months ended December 31, 2022. Depreciation expense reported as part of cost of goods sold on the condensed consolidated income statements totaled $0.3 million and $0.5 million for the quarter and six months ended December 31, 2023 and $0.2 million and $0.5 million for the quarter and six months ended December 31, 2022. The Company's intangible amortization expense reported on the condensed consolidated income statements relates to selling, general and administrative costs, not the cost of selling goods. Intangible amortization expense totaled $4.0 million and $8.2 million for the quarter and six months ended December 31, 2023 and $4.2 million and $8.4 million for the quarter and six months ended December 31, 2022.

Recent Accounting Pronouncements

In July 2023, the Securities and Exchange Commission issued final rules that require new and enhanced disclosures on cybersecurity risk management, strategy, governance, and incident reporting. Under the final rules, companies must report material cybersecurity incidents within four business days of determining the incident is material on Form 8-K. As additional information about the material aspects of the previously reported incidents become available, a Form 8-K/A must be filed with the additional disclosures. These disclosure requirements on Form 8-K were effective beginning December 18, 2023. For fiscal years ending on or after December 15, 2023, companies must disclose their cybersecurity processes, management's role in cybersecurity governance, and cybersecurity oversight by the Board of Directors on Form 10-K.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. This ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. This ASU is applicable to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and subsequent interim periods, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU updates income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and is applicable to the Company’s fiscal year beginning July 1, 2025, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

The Company has reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on its consolidated financial statements as a result of future adoption.

(2) Trade Accounts and Notes Receivable, Net

The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from customers’ failure to make payments on accounts receivable due to the Company. The Company has notes receivable with certain customers, which are included in “Accounts receivable, less allowance” in the Condensed Consolidated Balance Sheets.

Management determines the estimate of the allowance for doubtful accounts receivable by considering a number of factors, including: (i) historical experience, (ii) aging of the accounts receivable, (iii) specific information obtained by the Company on the financial condition and the current creditworthiness of its customers, (iv) the current economic and country-specific environment and (v) reasonable and supportable forecasts about collectability. Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model. Receivables that do not share risk characteristics are evaluated on an individual basis. Estimates of expected credit losses on trade receivables over the contractual life are recorded at inception and adjusted over the contractual life.

The changes in the allowance for doubtful accounts for the six months ended December 31, 2023 are set forth in the table below.

12

	June 30, 2023		Amounts Charged to Expense		Write-offs		Other (1)		December 31, 2023
	(in thousands)
Trade accounts and current notes receivable allowance	$	15,480	$	4,472	$	(1,197)	$	488	$	19,243

(1)"Other" amounts include recoveries and the effect of foreign currency fluctuations for the six months ended December 31, 2023.

(3) Revenue Recognition

The Company provides technology solutions and services from the world's leading suppliers of mobility, barcode, POS, payments, physical security, unified communications, collaboration, telecom and cloud services. This includes hardware, related accessories and device configuration as well as software licenses, professional services and hardware support programs.

In determining the appropriate amount of revenue to recognize, the Company applies the following five-step model: (i) identify contracts with customers; (ii) identify performance obligations in the contracts; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations per the contracts; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company recognizes revenue as control of products and services are transferred to customers, which is generally at the point of shipment. The Company delivers products to customers in several ways, including: (i) shipment from a Company warehouse, (ii) drop-shipment directly from the supplier, or (iii) electronic delivery for non-physical products.

Principal versus Agent Considerations

The Company is the principal for sales of all hardware and certain software and services. The Company considers itself the principal in those transactions where it has control of the product or service before it is transferred to the customer. The Company recognizes the principal-associated revenue and cost of goods sold on a gross basis.

The Company is the agent for third-party service contracts, including product warranties and supplier-hosted software. These service contracts are sold separately from the products, and the Company often serves as the agent for the contract on behalf of the original equipment manufacturer. The Company's responsibility is to arrange for the provision of the specified service by the original equipment manufacturer, and the Company does not control the specified service before it is transferred to the customer. Because the Company acts as an agent, revenue is recognized net of cost at the time of sale. The Intelisys business operates under an agency model.

Variable Considerations

For certain transactions, products are sold with a right of return and may also provide other rebates or incentives, which are accounted for as variable consideration. The Company estimates a returns allowance based on historical experience and reduces revenue accordingly. The Company estimates the amount of variable consideration for rebates and incentives by using the expected value to be given to the customer and reduces the revenue by those estimated amounts. These estimates are reviewed and updated as necessary at the end of each reporting period.

Contract Balances

The Company records contract assets and liabilities for payments received from customers in advance of services performed. These assets and liabilities are the result of the sales of the Company's self-branded warranty programs and other transactions where control has not yet passed to the customer. These amounts are immaterial to the consolidated financial statements for the periods presented.

Disaggregation of Revenue

The following tables represent the Company's disaggregation of revenue:

13

	Quarter ended December 31, 2023
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service
Hardware, software and cloud (excluding Intelisys)	$	520,651	$	342,686	$	863,337
Intelisys connectivity and cloud	—		21,455		21,455
	$	520,651	$	364,141	$	884,792
	Six months ended December 31, 2023
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service:
Hardware, software and cloud (excluding Intelisys)	$	1,030,222	$	688,918	$	1,719,140
Intelisys connectivity and cloud	—		41,958		41,958
	$	1,030,222	$	730,876	$	1,761,098

	Quarter ended December 31, 2022
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service
Hardware, software and cloud (excluding Intelisys)	$	627,548	$	363,743	$	991,291
Intelisys connectivity and cloud	—		19,950		19,950
	$	627,548	$	383,693	$	1,011,241
	Six months ended December 31, 2022
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service:
Hardware, software and cloud (excluding Intelisys)	$	1,203,878	$	712,373	$	1,916,251
Intelisys connectivity and cloud	—		38,803		38,803
	$	1,203,878	$	751,176	$	1,955,054

(4) Earnings Per Share

Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share are computed by dividing net income by the weighted-average number of common and potential common shares outstanding.

14

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands, except per share data)
Numerator:
Net income	$	32,726	$	25,734	$	48,158	$	49,776
Denominator:
Weighted-average shares, basic	25,035		25,287		24,961		25,244
Dilutive effect of share-based payments	299		215		274		210
Weighted-average shares, diluted	25,334		25,502		25,235		25,454
Net income per common share, basic	$	1.31	$	1.02	$	1.93	$	1.97
Net income per common share, diluted	$	1.29	$	1.01	$	1.91	$	1.96

For the quarter and six months ended December 31, 2023, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 563,690 and 931,367, respectively. For the quarter and six months ended December 31, 2022, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 847,651 and 1,268,455, respectively.

(5) Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of tax are as follows: 

	December 31, 2023		June 30, 2023
	(in thousands)
Foreign currency translation adjustment	$	(97,338)	$	(93,136)
Unrealized gain on hedged transaction, net of tax	2,120		3,515
Accumulated other comprehensive loss	$	(95,218)	$	(89,621)

The tax effect of amounts in comprehensive loss reflect a tax (benefit) expense as follows:

	Quarter ended December 31,				Six months ended December 31,
	2023		2022		2023		2022
	(in thousands)
Tax (benefit) expense	$	(637)	$	166	$	(692)	$	580

(6) Goodwill and Other Identifiable Intangible Assets

The changes in the carrying amount of goodwill for the six months ended December 31, 2023, by reporting segment, are set forth in the table below.

	Specialty Technology Solutions		Modern Communications & Cloud		Total
	(in thousands)
Balance at June 30, 2023	$	16,370	$	200,336	$	216,706
Goodwill disposed upon business sale	—		(8,539)		(8,539)
Foreign currency translation adjustment	—		47		47
Balance at December 31, 2023	$	16,370	$	191,844	$	208,214

15

The following table shows changes in the amount recognized for net identifiable intangible assets for the six months ended December 31, 2023.

	Net Identifiable Intangible Assets
	(in thousands)
Balance at June 30, 2023	$	68,495
Intangibles disposed upon business sale	(14,927)
Amortization expense	(8,230)
Foreign currency translation adjustment	(25)
Balance at December 31, 2023	$	45,313

(7) Short-Term Borrowings and Long-Term Debt

The following table presents the Company’s debt at December 31, 2023 and June 30, 2023.

	December 31, 2023		June 30, 2023
	(in thousands)
Current portion of long-term debt	$	7,857	$	6,915
Mississippi revenue bond, net of current portion	3,024		3,381
Senior secured term loan facility, net of current portion	136,875		140,625
Borrowings under revolving credit facility	20,878		178,980
Total debt	$	168,634	$	329,901

Credit Facility

The Company has a multi-currency senior secured credit facility (as amended, the "Amended Credit Agreement") with JPMorgan Chase Bank N.A., as administrative agent, and a syndicate of banks (collectively the "Lenders"). On September 28, 2022, the Company amended and restated the Amended Credit Agreement, which includes (i) a five-year, $350 million multicurrency senior secured revolving credit facility and (ii) a five-year $150 million senior secured term loan facility. The Amended Credit Agreement extended the credit facility maturity date to September 28, 2027. In addition, pursuant to an “accordion feature,” the Company may increase its borrowings up to an additional $250 million, subject to obtaining additional credit commitments from the lenders participating in the increase. The Amended Credit Agreement allows for the issuance of up to $50 million for letters of credit. Borrowings under the Amended Credit Agreement are guaranteed by substantially all of the domestic assets of the Company and its domestic subsidiaries. Under the terms of the revolving credit facility, the payment of cash dividends is restricted. The Company incurred debt issuance costs of $1.4 million in connection with the amendment and restatement of the Amended Credit Agreement. These costs were capitalized to other non-current assets on the Condensed Consolidated Balance Sheets and added to the unamortized debt issuance costs from the previous credit facility.

Loans denominated in U.S. dollars, other than swingline loans, bear interest at a rate per annum equal to, at the Company’s option, (i) the adjusted term Secured Overnight Financing Rate ("SOFR") or adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon the Company’s ratio of (A) total consolidated debt less up to $30 million of unrestricted domestic cash to (B) trailing four-quarter consolidated EBITDA measured as of the end of the most recent year or quarter, as applicable, for which financial statements have been delivered to the Lenders (the “leverage ratio”); or (ii) the alternate base rate plus an additional margin ranging from 0% to 0.75%, depending upon the Company’s leverage ratio, plus, if applicable, certain mandatory costs. All swingline loans denominated in U.S. dollars bear interest based upon the adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon the Company's leverage ratio, or such other rate as the Company and the applicable swingline lender may agree. The adjusted term SOFR and adjusted daily simple SOFR include a fixed credit adjustment of 0.10% over the applicable SOFR reference rate. Loans denominated in foreign currencies bear interest at a rate per annum equal to the applicable benchmark rate set forth in the Amended Credit Agreement plus an additional margin ranging from 1.00% to 1.75%, depending upon the Company’s leverage ratio plus, if applicable, certain mandatory costs.

During the quarter and six months ended December 31, 2023, the Company's borrowings under the credit facility were U.S. dollar loans. The spread in effect as of December 31, 2023 was 1.25%, plus a 0.10% credit spread adjustment for SOFR-based loans and 0.25% for alternate base rate loans. The commitment fee rate in effect at December 31, 2023 was 0.20%. The

16

Amended Credit Agreement includes customary representations, warranties and affirmative and negative covenants, including financial covenants. Specifically, the Company’s Leverage Ratio must be less than or equal to 3.50 to 1.00 at all times. In addition, the Company’s 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. The Company was in compliance with all covenants under the credit facility at December 31, 2023.

The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, during the six month periods ended December 31, 2023 and 2022 was $138.7 million and $219.5 million, respectively. There was $329.1 million and $171.0 million available for additional borrowings as of December 31, 2023 and June 30, 2023, respectively. The effective interest rates for the revolving line of credit were 6.70% and 6.74% as of December 31, 2023 and June 30, 2023, respectively. There were no letters of credit issued under the multi-currency revolving credit facility at December 31, 2023 or June 30, 2023.

Mississippi Revenue Bond

On August 1, 2007, the Company entered into an agreement with the State of Mississippi to provide financing for the acquisition and installation of certain equipment to be utilized at the Company’s Southaven, Mississippi warehouse, through the issuance of an industrial development revenue bond. The bond matures on September 1, 2032. The bond accrues interest at the one-month term SOFR plus an adjustment of 0.10% plus a spread of 0.85%. The terms of the bond allow for payment of interest only for the first 10 years of the agreement. Starting on September 1, 2018 through 2032, principal and interest payments are due until the maturity date or the redemption of the bond. The agreement also provides the bondholder with a put option, exercisable only within 180 days of each fifth anniversary of the agreement, requiring the Company to pay back the bonds at 100% of the principal amount outstanding. At December 31, 2023, the Company was in compliance with all covenants under this bond. The interest rates at December 31, 2023 and June 30, 2023 were 6.29% and 6.11%, respectively.

Debt Issuance Costs

At December 31, 2023, net debt issuance costs associated with the credit facility and bond totaled $1.4 million and are being amortized on a straight-line basis through the maturity date of each respective debt instrument.

(8) Derivatives and Hedging Activities

The Company's results of operations could be materially impacted by significant changes in foreign currency exchange rates and interest rates. In an effort to manage the exposure to these risks, the Company periodically enters into various derivative instruments. The Company's accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments in accordance with U.S. GAAP. The Company records all derivatives on the Condensed Consolidated Balance Sheet at fair value. Derivatives that are not designated as hedging instruments or the ineffective portions of cash flow hedges are adjusted to fair value through earnings in other income and expense.

Foreign Currency Derivatives – The Company conducts a portion of its business internationally in a variety of foreign currencies and is exposed to market risk for changes in foreign currency exchange rates. The Company attempts to hedge transaction exposures with natural offsets to the fullest extent possible and once these opportunities have been exhausted the Company uses currency options and forward contracts or other hedging instruments with third parties. These contracts will periodically hedge the exchange of various currencies, including the U.S. dollar, Brazilian real, euro, British pound and Canadian dollar.

The Company had contracts outstanding for purposes of managing cash flows with notional amounts of $27.3 million and $34.3 million for the exchange of foreign currencies at December 31, 2023 and June 30, 2023, respectively. To date, the Company has chosen not to designate these derivatives as hedging instruments, and accordingly, these instruments are adjusted to fair value through earnings in other income and expense. Summarized financial information related to these derivative contracts and changes in the underlying value of the foreign currency exposures included in the Condensed Consolidated Income Statements for the quarters and six months ended December 31, 2023 and 2022 are as follows:

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	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands)
Net foreign exchange derivative contract losses	$	1,025	$	871	$	658	$	1,309
Net foreign currency transactional and re-measurement (gains) losses	(596)		(524)		466		(39)
Net foreign currency exchange losses	$	429	$	347	$	1,124	$	1,270

Net foreign currency exchange gains and losses consist of foreign currency transactional and functional currency re-measurements, offset by net foreign currency exchange contract gains and losses and are included in other income and expense. Foreign exchange gains and losses are generated as the result of fluctuations in the value of the U.S. dollar versus the Brazilian real, the U.S. dollar versus the euro, the British pound versus the euro, and the Canadian dollar versus the U.S. dollar.

Interest Rates - The Company’s earnings are also affected by changes in interest rates due to the impact those changes have on interest expense from floating rate debt instruments. The Company manages its exposure to changes in interest rates by using interest rate swaps to hedge this exposure and to achieve a desired proportion of fixed versus floating rate debt.

On April 30, 2019, the Company entered into an interest rate swap agreement to lock into a fixed LIBOR interest rate, which was amended on September 28, 2022, to change the reference rate from LIBOR to SOFR. The swap agreement has a notional amount of $100.0 million, with a $50.0 million tranche scheduled to mature on April 30, 2024 and a $50.0 million tranche scheduled to mature April 30, 2026.

On March 31, 2023, the Company entered into an interest rate swap agreement to lock into a fixed SOFR interest rate with a notional amount of $25 million and a maturity date of March 31, 2028.

These interest rate swap agreements are designated as cash flow hedges to hedge the variable rate interest payments on the revolving credit facility. Interest rate differentials paid or received under the swap agreements are recognized as adjustments to interest expense. To the extent the swaps are effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swaps are not included in current earnings but are reported as other comprehensive income (loss). There was no ineffective portion to be recorded as an adjustment to earnings for the quarters and six months ended December 31, 2023 and 2022.

The components of the cash flow hedge included in the Condensed Consolidated Statement of Comprehensive Income for the quarters and six months ended December 31, 2023 and 2022, are as follows:

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands)
Net interest income recognized as a result of interest rate swap	$	(903)	$	(345)	$	(1,781)	$	(313)
Unrealized (loss) gain in fair value of interest rate swap	(1,165)		349		(72)		2,847
Net (decrease) increase in accumulated other comprehensive income	(2,068)		4		(1,853)		2,534
Income tax effect	(521)		1		(458)		652
Net (decrease) increase in accumulated other comprehensive income, net of tax	$	(1,547)	$	3	$	(1,395)	$	1,882

The Company used the following derivative instruments at December 31, 2023 and June 30, 2023, reflected in its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above:

18

		December 31, 2023		June 30, 2023
	Balance Sheet Location	Fair Value  of Derivatives Designated  as Hedge Instruments	Fair Value  of Derivatives Not Designated as  Hedge Instruments	Fair Value  of Derivatives Designated as Hedge Instruments	Fair Value  of Derivatives Not Designated as Hedge Instruments
		(in thousands)
Derivative assets:
Foreign exchange contracts	Prepaid expenses and other current assets	—	—	—	$1
Foreign currency hedge	Prepaid expenses and other current assets	$27	—	$100	—
Interest rate swap agreement	Other non-current assets	$2,834	—	$4,687	—
Derivative liabilities:
Foreign exchange contracts	Accrued expenses and other current liabilities	—	$4	—	—

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(9) Fair Value of Financial Instruments

Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company classifies certain assets and liabilities based on the fair value hierarchy, which aggregates fair value measured assets and liabilities based upon the following levels of inputs:

•Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

•Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

•Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The assets and liabilities maintained by the Company that are required to be measured at fair value on a recurring basis include deferred compensation plan investments, forward foreign currency exchange contracts, foreign currency hedge agreements and interest rate swap agreements. The carrying value of debt is considered to approximate fair value, as the Company’s debt instruments are indexed to a variable rate using the market approach (Level 2).

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at December 31, 2023:

	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)
	(in thousands)
Assets:
Deferred compensation plan investments, current and non-current portion	$	31,343	$	31,343	$	—
Interest rate swap agreement	2,834		—		2,834
Foreign currency hedge	27		—		27
Total assets at fair value	$	34,204	$	31,343	$	2,861
Liabilities:
Deferred compensation plan investments, current and non-current portion	$	31,343	$	31,343	$	—
Forward foreign currency exchange contracts	4		—		4
Total liabilities at fair value	$	31,347	$	31,343	$	4

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at June 30, 2023:

20

	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)
	(in thousands)
Assets:
Deferred compensation plan investments, current and non-current portion	$	28,209	$	28,209	$	—
Forward foreign currency exchange contracts	1		—		1
Foreign currency hedge	100		—		100
Interest rate swap agreement	4,687		—		4,687
Total assets at fair value	$	32,997	$	28,209	$	4,788
Liabilities:
Deferred compensation plan investments, current and non-current portion	$	28,229	$	28,229	$	—
Total liabilities at fair value	$	28,229	$	28,229	$	—

The investments in the deferred compensation plan are held in a "rabbi trust" and include mutual funds and cash equivalents for payment of non-qualified benefits for certain retired, terminated and active employees. These investments are recorded to prepaid expenses and other current assets or other non-current assets depending on their corresponding, anticipated distribution dates to recipients, which are reported in accrued expenses and other current liabilities or other long-term liabilities, respectively.

Derivative instruments, such as foreign currency forward contracts, are measured using the market approach on a recurring basis considering foreign currency spot rates and forward rates quoted by banks or foreign currency dealers and interest rates quoted by banks (Level 2). Fair values of interest rate swaps are measured using standard valuation models with inputs that can be derived from observable market transactions, including SOFR spot and forward rates (Level 2). Foreign currency contracts and interest rate swap agreements are classified in the Condensed Consolidated Balance Sheets as prepaid expenses and other non-current assets or accrued expenses and other long-term liabilities, depending on the respective instruments' favorable or unfavorable positions. See Note 8 - Derivatives and Hedging Activities.

(10) Segment Information

The Company is a leading provider of technology solutions and services to customers in specialty technology markets. The Company has two reportable segments, based on technology type.

Specialty Technology Solutions Segment

The Specialty Technology Solutions segment includes the Company’s business in mobility and barcode, POS, payments, security and networking technologies. Mobility and barcode solutions include mobile computing, barcode scanners and imagers, radio frequency identification devices, barcode printing and related services. POS and payments solutions include POS systems, integrated POS software platforms, self-service kiosks including self-checkout, payment terminals and mobile payment devices. Security solutions include video surveillance and analytics, video management software and access control. Networking solutions include switching, routing and wireless products and software. The Company has business operations within this segment in the United States, Canada and Brazil.

Modern Communications & Cloud Segment

The Modern Communications & Cloud segment includes the Company’s business in communications and collaboration, connectivity and cloud services. Communications and collaboration solutions, delivered in the cloud, on-premise or hybrid, include voice, video, integration of communication platforms and contact center solutions. The Intelisys connectivity and cloud marketplace offers telecom, cable, Unified Communications as a Service (“UCaaS”), Contact Center as a Service (“CCaaS”), Infrastructure as a Service, Software-Defined Wide-Area Network and other cloud services. This segment includes SaaS and subscription services, which the Company offers using digital tools and platforms. The Company has business operations within this segment in the United States, Canada, Brazil and the UK.

Selected financial information for each business segment is presented below:

21

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands)
Sales:
Specialty Technology Solutions	$	520,651	$	627,548	$	1,030,222	$	1,203,878
Modern Communications & Cloud	364,141		383,693		730,876		751,176
	$	884,792	$	1,011,241	$	1,761,098	$	1,955,054
Depreciation and amortization:
Specialty Technology Solutions	$	2,897	$	2,758	$	5,654	$	5,462
Modern Communications & Cloud	3,593		3,738		7,334		7,385
Corporate	768		561		1,487		1,438
	$	7,258	$	7,057	$	14,475	$	14,285
Operating income (loss):
Specialty Technology Solutions	$	13,368	$	19,682	$	25,240	$	41,534
Modern Communications & Cloud	14,602		19,750		27,014		32,785
Corporate	(1,144)		—		(1,343)		—
	$	26,826	$	39,432	$	50,911	$	74,319
Capital expenditures:
Specialty Technology Solutions	$	(304)	$	(524)	$	(1,565)	$	(1,026)
Modern Communications & Cloud	(2,246)		(1,980)		(3,300)		(3,236)
	$	(2,550)	$	(2,504)	$	(4,865)	$	(4,262)
Sales by Geography Category:
United States and Canada	$	797,580	$	911,033	$	1,590,045	$	1,772,637
International	89,410		102,020		174,714		186,294
Less intercompany sales	(2,198)		(1,812)		(3,661)		(3,877)
	$	884,792	$	1,011,241	$	1,761,098	$	1,955,054

	December 31, 2023		June 30, 2023
	(in thousands)
Assets:
Specialty Technology Solutions	$	908,674	$	1,104,103
Modern Communications & Cloud	872,131		964,066
Corporate	—		—
	$	1,780,805	$	2,068,169
Property and equipment, net by Geography Category:
United States and Canada	$	24,703	$	27,323
International	11,843		10,056
	$	36,546	$	37,379

(11) Leases

In accordance with Accounting Standards Codification ("ASC") 842, at contract inception the Company determines if a contract contains a lease by assessing whether the contract contains an identified asset and whether the Company has the ability to control the asset. The Company also determines if the lease meets the classification criteria for an operating lease versus a finance lease under ASC 842. Substantially all of the Company's leases are operating leases for real estate, warehouse and office equipment ranging in duration from 1 year to 10 years. The Company has elected not to record short-term operating

22

leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets. Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has finance leases for information technology equipment expiring through fiscal year 2028. Finance leases are recorded as property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The gross amount of the balances recorded related to finance leases is immaterial to the condensed consolidated financial statements at December 31, 2023 and the consolidated financial statements at June 30, 2023.

Operating lease right-of-use assets and lease liabilities are recognized at the commencement date based on the net present value of future minimum lease payments over the lease term. The Company generally is not able to determine the rate implicit in its leases and has elected to apply an incremental borrowing rate as the discount rate for the present value determination, which is based on the Company's cost of borrowings for the relevant terms of each lease and geographical economic factors. Certain operating lease agreements contain options to extend or terminate the lease. The lease term used is adjusted for these options when the Company is reasonably certain it will exercise the option. Operating lease expense is recognized on a straight-line basis over the lease term. Variable lease payments not based on a rate or index, such as costs for common area maintenance, are expensed as incurred. Further, the Company has elected the practical expedient to recognize all lease and non-lease components as a single lease component, where applicable.

The following table presents amounts recorded on the Condensed Consolidated Balance Sheets related to operating leases at December 31, 2023 and June 30, 2023:

		December 31, 2023		June 30, 2023
Operating leases	Balance Sheet location	(in thousands)
Operating lease right-of-use assets	Other non-current assets	$	10,586	$	12,539
Current operating lease liabilities	Accrued expenses and other current liabilities	$	3,877	$	4,355
Long-term operating lease liabilities	Other long-term liabilities	$	7,703	$	9,329

The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters and six months ended December 31, 2023 and 2022. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less.

	Quarter ended December 31,				Six months ended December 31,
	2023		2022		2023		2022
	(in thousands)
Operating lease cost	$	1,434	$	1,291	$	2,643	$	2,577
Variable lease cost	322		419		705		763
	$	1,756	$	1,710	$	3,348	$	3,340

Supplemental cash flow information related to the Company's operating leases for the six months ended December 31, 2023 and 2022 are presented in the table below:

	Six months ended
	December 31,
	2023		2022
	(in thousands)
Cash paid for amounts in the measurement of lease liabilities	$	2,793	$	2,697
Right-of-use assets obtained in exchange for lease obligations	232		286

The weighted-average remaining lease term and discount rate at December 31, 2023 are presented in the table below:

23

	December 31, 2023
Weighted-average remaining lease term	3.28 years
Weighted-average discount rate	4.53	%

The following table presents the maturities of the Company's operating lease liabilities at December 31, 2023:

	Operating leases
	(in thousands)
2024	$	2,372
2025	3,667
2026	3,088
2027	2,675
2028	632
Thereafter	—
Total future payments	12,434
Less: amounts representing interest	854
Present value of lease payments	$	11,580

(12) Commitments and Contingencies

The Company is, from time to time, party to lawsuits arising out of operations. Although there can be no assurance, based upon information known to the Company, the Company believes that any liability resulting from an adverse determination of such lawsuits would not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

During the Company's due diligence for the Network1 acquisition, several pre-acquisition contingencies were identified regarding various Brazilian federal and state tax exposures. The Company recorded indemnification receivables that are reported gross of the pre-acquisition contingency liabilities as the funds were escrowed as part of the acquisition. The amount available after the impact of foreign currency translation for future pre-acquisition contingency settlements or to be released to the sellers was $3.6 million and $3.4 million at December 31, 2023 and June 30, 2023.

The table below summarizes the balances and line item presentation of Network1's pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets at December 31, 2023 and June 30, 2023:

	December 31, 2023		June 30, 2023
	Network1
	(in thousands)
Assets
Prepaid expenses and other current assets	$	16	$	16
Other non-current assets	$	4,131	$	4,150
Liabilities
Accrued expenses and other current liabilities	$	16	$	16
Other long-term liabilities	$	4,131	$	4,150

(13) Income Taxes

Income taxes for the quarters and six months ended December 31, 2023 and 2022 have been included in the accompanying condensed consolidated financial statements using an estimated annual effective tax rate. In addition to applying the estimated annual effective tax rate to pre-tax income, the Company includes certain items treated as discrete events to arrive at an estimated overall tax provision. During the quarter ended December 31, 2023, a discrete net tax benefit of $3.8 million was recorded, which is primarily attributable to the sale of UK-based intY.

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The Company’s effective tax rate of 18.3% and 18.6% for the quarter and six months ended December 31, 2023, differs from the current federal statutory rate of 21% primarily as a result of income derived from tax jurisdictions with varying income tax rates, discrete items, nondeductible expenses and state income taxes. The Company's effective tax rates were 28.9% and 27.3% for the quarter and six months ended December 31, 2022.

As of December 31, 2023, the Company is not permanently reinvested with respect to all earnings generated by foreign operations. The Company has determined that there is no material deferred tax liability for federal, state and withholding tax related to undistributed earnings. During the six months ended December 31, 2023, foreign subsidiaries did not repatriate cash to the United States. There is no certainty to the timing of any future distributions of such earnings to the U.S. in whole or in part.

The Company had approximately $1.2 million of total gross unrecognized tax benefits at December 31, 2023 and June 30, 2023. Of this total at December 31, 2023, approximately $1.0 million represents the amount of unrecognized tax benefits that are permanent in nature and, if recognized, would affect the annual effective tax rate. The Company does not believe that the total amount of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date.

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. At December 31, 2023 and June 30, 2023, the Company had approximately $1.2 million accrued for interest and penalties.

The Company conducts business globally and one or more of its subsidiaries files income tax returns in the U.S. federal, various state, local and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities in countries and states in which it operates. With certain exceptions, the Company is no longer subject to federal, state and local or non-U.S. income tax examinations by tax authorities for the years before June 30, 2018.

(14) Business Sale

On December 19, 2023, the Company completed the sale of its UK-based intY business. The Company retained its CASCADE cloud services distribution platform which has been used to grow the Cisco and Microsoft subscription businesses in the United States and Brazil. Under the stock purchase agreement, the Company received proceeds of $18.0 million in cash for the sale, net of cash transferred. The business sale resulted in a $14.5 million gain on sale after considering the net assets sold. The impact of this sale was not material to the consolidated financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

ScanSource is a leading hybrid distributor connecting devices to the cloud and accelerating growth for customers across hardware, SaaS, connectivity and cloud. We provide technology solutions and services from more than 500 leading suppliers of mobility, barcode, POS, payments, physical security, networking, unified communications, collaboration, connectivity and cloud services to our approximately 30,000 customers located primarily in the United States, Canada and Brazil.

We operate our business under a management structure that enhances our technology focus and hybrid distribution growth strategy. Our segments operate primarily in the United States, Canada and Brazil:

•Specialty Technology Solutions

•Modern Communications & Cloud

We sell hardware, SaaS, connectivity and cloud services from leading technology suppliers to customers that solve end users' challenges. We operate distribution facilities that support our United States and Canada business in Mississippi, California and Kentucky. Brazil distribution facilities are located in the Brazilian states of Paraná, Espirito Santo and Santa Catarina. We provide some of our digital products, which include SaaS and subscriptions, through our digital tools and platforms.

Our key suppliers include AT&T, Aruba/HPE, Avaya, Axis, Cisco, Comcast Business, Dell, Extreme, Five9, Hanwha, Honeywell, Ingenico, Lumen, Microsoft, NCR, Poly HP, RingCentral, Verifone, Verizon, Zebra Technologies and Zoom.

Recent Developments

25

On December 19, 2023 we completed the sale of our UK-based intY business. We retained our CASCADE cloud services distribution platform, which has been used to grow the Cisco and Microsoft subscription business in the United States and Brazil.

Our Strategy

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 relies on a channel sales model to offer hardware, SaaS, 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.

26

Results of Operations

Net Sales

We have two reportable segments, which are based on technology type. The following tables summarize our net sales results by business segment and by geographic location for the quarters and six months ended December 31, 2023 and 2022:

	Quarter ended December 31,								% Change, Constant Currency, Excluding Divestitures (a)
Net Sales by Segment:	2023		2022		$ Change		% Change
	(in thousands)
Specialty Technology Solutions	$	520,651	$	627,548	$	(106,897)	(17.0)	%	(17.2)	%
Modern Communications & Cloud	364,141		383,693		(19,552)		(5.1)	%	(6.1)	%
Total net sales	$	884,792	$	1,011,241	$	(126,449)	(12.5)	%	(13.0)	%
	Six months ended December 31,								% Change, Constant Currency, Excluding Divestitures (a)
	2023		2022		$ Change		% Change
	(in thousands)
Specialty Technology Solutions	$	1,030,222	$	1,203,878	$	(173,656)	(14.4)	%	(14.6)	%
Modern Communications & Cloud	730,876		751,176		(20,300)		(2.7)	%	(3.9)	%
Total net sales	$	1,761,098	$	1,955,054	$	(193,956)	(9.9)	%	(10.5)	%

(a) A reconciliation of non-GAAP net sales in constant currency is presented at the end of Results of Operations, under Non-GAAP Financial Information.

Specialty Technology Solutions

The Specialty Technology Solutions segment consists of sales to customers in North America and Brazil. For the quarter and six months ended December 31, 2023, net sales decreased $106.9 million, or 17.0%, and $173.7 million, or 14.4%, respectively, compared to the prior-year period. Excluding the foreign exchange positive impact, adjusted net sales decreased $107.8 million, or 17.2%, and $175.5 million, or 14.6%, for the quarter and six months ended December 31, 2023, compared to the prior-year period. The decrease in net sales and adjusted net sales for the quarter and six-month period is primarily due to lower sales volumes in our mobility and barcoding business, partially offset by an increase in networking sales.

Modern Communications & Cloud

The Modern Communications & Cloud segment consists of sales to customers in North America, Brazil and the UK. For the quarter and six months ended December 31, 2023, net sales decreased $19.6 million, or 5.1%, and $20.3 million, or 2.7%, respectively, compared to the prior-year period. Excluding the foreign exchange positive impact and the impact of divestitures, adjusted net sales decreased $23.3 million, or 6.1%, and $28.8 million, or 3.9%, for the quarter and six months ended December 31, 2023, compared to the prior-year period. The decrease in net sales and adjusted net sales for the quarter and six month period is primarily due to lower sales volumes in our communications hardware, partially offset by growth in Cisco products. Intelisys net billings increased to approximately $2.64 billion annualized. Intelisys net sales for the quarter and six months ended December 31, 2023 increased 7.5% and 8.1%, respectively, year-over-year.

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	Quarter ended December 31,								% Change, Constant Currency, Excluding Divestitures (a)
Net Sales by Geography:	2023		2022		$ Change		% Change
	(in thousands)
United States and Canada	$	795,382	$	909,221	$	(113,839)	(12.5)	%	(12.5)	%
International	89,410		102,020		(12,610)		(12.4)	%	(17.3)	%
Total net sales	$	884,792	$	1,011,241	$	(126,449)	(12.5)	%	(13.0)	%
	Six months ended December 31,								% Change, Constant Currency, Excluding Divestitures (a)
	2023		2022		$ Change		% Change
	(in thousands)
United States and Canada	$	1,586,384	$	1,768,760	$	(182,376)	(10.3)	%	(10.3)	%
International	174,714		186,294		(11,580)		(6.2)	%	(12.0)	%
Total net sales	$	1,761,098	$	1,955,054	$	(193,956)	(9.9)	%	(10.5)	%

(a) A reconciliation of non-GAAP net sales in constant currency is presented at the end of Results of Operations in the non-GAAP section.

28

Gross Profit

The following table summarizes our gross profit for the quarters and six months ended December 31, 2023 and 2022:

	Quarter ended December 31,								% of Net Sales December 31,
	2023		2022		$ Change		% Change		2023		2022
	(in thousands)
Specialty Technology Solutions	$	47,133	$	56,732	$	(9,599)	(16.9)	%	9.1	%	9.0	%
Modern Communications & Cloud	53,615		58,602		(4,987)		(8.5)	%	14.7	%	15.3	%
Gross profit	$	100,748	$	115,334	$	(14,586)	(12.6)	%	11.4	%	11.4	%
	Six months ended December 31,								% of Net Sales December 31,
	2023		2022		$ Change		% Change		2023		2022
	(in thousands)
Specialty Technology Solutions	$	96,315	$	115,135	$	(18,820)	(16.3)	%	9.3	%	9.6	%
Modern Communications & Cloud	110,941		113,683		(2,742)		(2.4)	%	15.2	%	15.1	%
Gross profit	$	207,256	$	228,818	$	(21,562)	(9.4)	%	11.8	%	11.7	%

Our gross profit is primarily affected by sales volume and gross margin mix. Gross margin mix is impacted by multiple factors, which include sales mix (proportion of sales of higher margin products or services relative to total sales), vendor program recognition (consisting of volume rebates, inventory price changes and purchase discounts) and freight costs. Increases in vendor program recognition decrease cost of goods sold, thereby increasing gross profit. Net sales derived from our Intelisys business contribute 100% to our gross profit dollars and margin as they have no associated cost of goods sold.

Specialty Technology Solutions

For the quarter ended December 31, 2023, gross profit dollars for the Specialty Technology Solutions segment declined $9.6 million, or 16.9%, compared to the prior-year quarter. Lower sales volume, after considering the associated cost of goods sold, reduced gross profit dollars by $9.7 million. Gross profit margin increased slightly quarter-over-quarter to 9.1% which positively impacted gross profit dollars by less than $0.1 million.

For the six months ended December 31, 2023, gross profit dollars decreased $18.8 million, or 16.3%, compared to the prior-year period. Lower sales volume, after considering the associated cost of goods sold, reduced gross profit by $16.6 million. Gross profit margin decreased 21 basis points year-over-year to 9.3%. Gross margin mix negatively impacted gross profit by $2.2 million largely from lower vendor program recognition.

Modern Communications & Cloud

For the quarter ended December 31, 2023, gross profit dollars for the Modern Communications & Cloud segment decreased $5.0 million, or 8.5%, compared to the prior-year quarter. Lower sales volume, after considering the associated cost of goods sold, reduced gross profit dollars by $3.0 million. Gross profit margin decreased 55 basis points quarter-over-quarter to 14.7%. Gross margin mix negatively impacted gross profit by $2.0 million largely from a less favorable sales mix.

For the six months ended December 31, 2023, gross profit dollars declined $2.7 million, or 2.4%, compared to the prior-year period. Lower sales volume, after considering the associated cost of goods sold, reduced gross profit dollars by $3.0 million. Gross profit margin increased slightly year-over-year to 15.2% which positively impacted gross profit dollars by $0.3 million.

Operating Expenses

The following table summarizes our operating expenses for the quarters and six months ended December 31, 2023 and 2022:

29

	Quarter ended December 31,								% of Net Sales December 31,
	2023		2022		$ Change		% Change		2023		2022
	(in thousands)
Selling, general and administrative expenses	$	66,921	$	69,074	$	(2,153)	(3.1)	%	7.6	%	6.8	%
Depreciation expense	2,964		2,678		286		10.7	%	0.3	%	0.3	%
Intangible amortization expense	4,037		4,150		(113)		(2.7)	%	0.5	%	0.4	%
Operating expenses	$	73,922	$	75,902	$	(1,980)	(2.6)	%	8.4	%	7.5	%
	Six months ended December 31,								% of Net Sales December 31,
	2023		2022		$ Change		% Change		2023		2022
	(in thousands)
Selling, general and administrative expenses	$	142,356	$	140,667	$	1,689	1.2	%	8.1	%	7.2	%
Depreciation expense	5,759		5,441		318		5.8	%	0.3	%	0.3	%
Intangible amortization expense	8,230		8,391		(161)		(1.9)	%	0.5	%	0.4	%
Operating expenses	$	156,345	$	154,499	$	1,846	1.2	%	8.9	%	7.9	%

Selling, general and administrative expenses (“SG&A”) decreased by $2.2 million, or 3.1%, for the quarter ended December 31, 2023, compared to the prior-year period. The decrease for the quarter ended December 31, 2023 is primarily attributable to lower employee costs for the quarter.

For the six months ended December 31, 2023, SG&A expenses increased by $1.7 million, or 1.2%, compared to the prior-year period. The increase for the six months ended December 31, 2023 is primarily attributable to higher bad debt expense as a result of increases in specific customer reserves partially offset by lower employee costs.

Operating Income

The following table summarizes our operating income for the quarters and six months ended December 31, 2023 and 2022:

	Quarter ended December 31,								% of Net Sales December 31,
	2023		2022		$ Change		% Change		2023		2022
	(in thousands)
Specialty Technology Solutions	$	13,368	$	19,682	$	(6,314)	(32.1)	%	2.6	%	3.1	%
Modern Communications & Cloud	14,602		19,750		(5,148)		(26.1)	%	4.0	%	5.1	%
Corporate	(1,144)		—		(1,144)		nm*		nm*		nm*
Operating income	$	26,826	$	39,432	$	(12,606)	(32.0)	%	3.0	%	3.9	%
	Six months ended December 31,								% of Net Sales December 31,
	2023		2022		$ Change		% Change		2023		2022
	(in thousands)
Specialty Technology Solutions	$	25,240	$	41,534	$	(16,294)	(39.2)	%	2.4	%	3.5	%
Modern Communications & Cloud	27,014		32,785		(5,771)		(17.6)	%	3.7	%	4.4	%
Corporate	(1,343)		—		(1,343)		nm*		nm*		nm*
Operating income	$	50,911	$	74,319	$	(23,408)	(31.5)	%	2.9	%	3.8	%

*nm - percentages are not meaningful

Specialty Technology Solutions

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For the Specialty Technology Solutions segment, operating income decreased $6.3 million, or 32.1%, and $16.3 million, or 39.2%, respectively, for the quarter and six months ended December 31, 2023, compared to the prior-year period. Operating margin decreased to 2.6% and 2.4% for the quarter and six months ended December 31, 2023, respectively. The decrease in operating income and margin for the quarter is primarily due to lower gross profits.

Modern Communications & Cloud

For the Modern Communications & Cloud segment, operating income decreased $5.1 million, or 26.1%, and $5.8 million, or 17.6%, respectively, for the quarter and six months ended December 31, 2023 compared to the prior-year period. Operating margin decreased to 4.0% and 3.7% for the quarter and six months ended December 31, 2023, respectively. The decrease in operating income and margin is primarily from lower gross profits and higher bad debt expense, due to increases in specific customer reserves.

Corporate

For the quarter and six months ended December 31, 2023, Corporate operating loss of $1.1 million and $1.3 million, represents costs associated with the sale of our intY business and cyberattack restoration costs.

Total Other (Income) Expense

The following table summarizes our total other (income) expense for the quarters and six months ended December 31, 2023 and 2022:

	Quarter ended December 31,								% of Net Sales December 31,
	2023		2022		$ Change		% Change		2023		2022
	(in thousands)
Interest expense	$	3,359	$	5,060	$	(1,701)	(33.6)	%	0.4	%	0.5	%
Interest income	(2,119)		(2,027)		(92)		4.5	%	(0.2)	%	(0.2)	%
Net foreign exchange losses	429		347		82		23.6	%	0.0	%	0.0	%
Gain on sale of business	(14,533)		—		(14,533)		nm*		(1.6)	%	—	%
Other, net	(356)		(140)		(216)		154.3	%	(0.0)	%	(0.0)	%
Total other (income) expense, net	$	(13,220)	$	3,240	$	(16,460)	(508.0)	%	(1.5)	%	0.3	%
	Six months ended December 31,								% of Net Sales December 31,
	2023		2022		$ Change		% Change		2023		2022
	(in thousands)
Interest expense	$	8,945	$	8,507	$	438	5.1	%	0.5	%	0.4	%
Interest income	(3,444)		(3,618)		174		(4.8)	%	(0.2)	%	(0.2)	%
Net foreign exchange losses	1,124		1,270		(146)		(11.5)	%	0.1	%	0.1	%
Gain on sale of business	(14,533)		—		(14,533)		nm*		(0.8)	%	—	%
Other, net	(374)		(315)		(59)		18.7	%	(0.0)	%	(0.0)	%
Total other (income) expense, net	$	(8,282)	$	5,844	$	(14,126)	(241.7)	%	(0.5)	%	0.3	%

*nm - percentages are not meaningful

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 ended December 31, 2023 compared to the prior-year periods, primarily from lower average borrowings on our multi-currency revolving credit facility. Interest expense increased slightly for the six months ended December 31, 2023 as a result of higher interest rates for the six-month period compared to the prior-year.

Interest income for the quarter and six months ended December 31, 2023 was generated on interest-bearing investments in Brazil and customer receivables in both North America and Brazil.

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Net foreign exchange gains and losses consist of foreign currency transactional and functional currency re-measurements, offset by net foreign exchange forward contracts gains and losses. Foreign exchange gains and losses are generated as the result of fluctuations in the value of the U.S. dollar versus the Brazilian real, the Canadian dollar versus the U.S. dollar, the euro versus the U.S. dollar, and the British pound versus the U.S. dollar. We partially offset foreign currency exposure with the use of foreign exchange contracts to hedge against these exposures. The costs associated with foreign exchange forward contracts are included in the net foreign exchange losses.

For the quarter and six months ended December 31, 2023, we recognized a $14.5 million gain on the sale of our UK-based intY business.

Provision for Income Taxes

For the quarter and six months ended December 31, 2023, income tax expense was $7.3 million and $11.0 million, respectively, reflecting an effective tax rate of 18.3% and 18.6%, respectively. In comparison, for the quarter and six months ended December 31, 2022, income tax expense was $10.5 million and $18.7 million, respectively, reflecting an effective tax rate of 28.9% and 27.3%, respectively. The decrease in the effective tax rate for the quarter is due to a $3.8 million discrete tax benefit, which is primarily attributable to the sale of our UK-based intY business. We expect the effective tax rate, excluding discrete items, for fiscal year 2024 to be approximately 27.0% to 28.0%. See Note 13 - Income Taxes to the Notes to Consolidated Financial Statements for further discussion.

Non-GAAP Financial Information

Evaluating Financial Condition and Operating Performance

In addition to disclosing results that are determined in accordance with United States generally accepted accounting principles ("US GAAP" or "GAAP"), we also disclose certain non-GAAP financial measures. These measures include non-GAAP operating income; non-GAAP pre-tax income; non-GAAP net income; non-GAAP EPS; adjusted earnings before interest expense, income taxes, depreciation, and amortization ("adjusted EBITDA"); adjusted return on invested capital ("adjusted ROIC"); and constant currency. Constant currency is a measure that excludes the translation exchange impact from changes in foreign currency exchange rates between reporting periods. We use non-GAAP financial measures to better understand and evaluate performance, including comparisons from period to period.

These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that we report may not be comparable to similarly titled amounts reported by other companies. Analysis of results and outlook on a non-GAAP basis should be considered in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with US GAAP.

Adjusted Return on Invested Capital

Adjusted ROIC assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operating performance. We believe the calculation of adjusted ROIC provides useful information to investors and is an additional relevant comparison of our performance during the year.

Adjusted EBITDA starts with net income and adds back interest expense, income tax expense, depreciation expense, amortization of intangible assets, share-based compensation expense, and other non-GAAP adjustments. Since adjusted EBITDA excludes some non-cash costs of investing in our business and people, we believe that adjusted EBITDA shows the profitability from our business operations more clearly.

We calculate adjusted ROIC as adjusted EBITDA, divided by invested capital. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period. The following table summarizes annualized adjusted ROIC for the quarters ended December 31, 2023 and 2022, respectively:

	Quarter ended December 31,
	2023		2022
Adjusted return on invested capital ratio, annualized (a)	13.2	%	15.6	%

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(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.

The components of this calculation and reconciliation to our financial statements are shown on the following schedule:

	Quarter ended December 31,
	2023		2022
	(in thousands)
Reconciliation of net income to adjusted EBITDA:
Net income (GAAP)	$	32,726	$	25,734
Plus: Interest expense	3,359		5,060
Plus: Income taxes	7,320		10,458
Plus: Depreciation and amortization	7,258		7,057
EBITDA (non-GAAP)	50,663		48,309
Plus: Tax recovery	(1,386)		(2,858)
Plus: Share-based compensation	2,571		3,364
Plus: Acquisition and divestiture costs	703		—
Plus: Cyberattack restoration costs	441		—
Plus: Gain on sale of business	(14,533)		—
Adjusted EBITDA (numerator for adjusted ROIC) (non-GAAP)	$	38,459	$	48,815

	Quarter ended December 31,
	2023		2022
	(in thousands)
Invested capital calculations:
Equity – beginning of the quarter	$	915,253	$	827,004
Equity – end of the quarter	953,601		862,386
Plus: Share-based compensation, net	1,919		2,496
Plus: Cyberattack restoration costs, net	329		—
Plus: Acquisition and divestiture costs	703		—
Plus: Tax recovery, net	(640)		(1,886)
Plus: Gain on sale of business	(14,533)		—
Average equity	928,316		845,000
Average funded debt (a)	227,688		392,853
Invested capital (denominator for adjusted ROIC) (non-GAAP)	$	1,156,004	$	1,237,853

(a)Average funded debt is calculated as the daily average amounts outstanding on our short-term and long-term interest-bearing debt.

Net Sales in Constant Currency Excluding Acquisitions and Divestitures

We make references to "constant currency," a non-GAAP performance measure that excludes the foreign exchange rate impact from fluctuations in the average foreign exchange rates between reporting periods. Constant currency is calculated by translating current period results from currencies other than the U.S. dollar into U.S. dollars using the comparable average foreign exchange rates from the prior year period. We also exclude the impact of acquisitions or divestitures prior to the first full year of operations from the acquisition or divestiture date in order to show net sales results on an organic basis. This information is provided to analyze underlying trends without the translation impact of fluctuations in foreign currency rates and the impact of acquisitions and divestitures. Below we show organic growth by providing a non-GAAP reconciliation of net sales in constant currency excluding acquisitions and divestitures:

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Net Sales by Segment:
	Quarter ended December 31,
	2023		2022		$ Change		% Change
Specialty Technology Solutions:	(in thousands)
Net sales, reported	$	520,651	$	627,548	$	(106,897)	(17.0)	%
Foreign exchange impact (a)	(886)		—
Non-GAAP net sales	$	519,765	$	627,548	$	(107,783)	(17.2)	%
Modern Communications & Cloud:
Net sales, reported	$	364,141	$	383,693	$	(19,552)	(5.1)	%
Foreign exchange impact (a)	(4,323)		—
Less: Divestitures	(1,628)		(2,170)
Non-GAAP net sales	$	358,190	$	381,523	$	(23,333)	(6.1)	%
Consolidated:
Net sales, reported	$	884,792	$	1,011,241	$	(126,449)	(12.5)	%
Foreign exchange impact (a)	(5,209)		—
Less: Divestitures	(1,628)		(2,170)
Non-GAAP net sales	$	877,955	$	1,009,071	$	(131,116)	(13.0)	%

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended December 31, 2023 into U.S. dollars using the average foreign exchange rates for the quarter ended December 31, 2022.

Net Sales by Segment:
	Six months ended December 31,
	2023		2022		$ Change		% Change
Specialty Technology Solutions	(in thousands)
Net sales, reported	$	1,030,222	$	1,203,878	$	(173,656)	(14.4)	%
Foreign exchange impact (a)	(1,820)		—
Non-GAAP net sales	$	1,028,402	$	1,203,878	$	(175,476)	(14.6)	%
Modern Communications & Cloud
Net sales, reported	$	730,876	$	751,176	$	(20,300)	(2.7)	%
Foreign exchange impact (a)	(9,000)		—
Less: Divestitures	(3,747)		(4,208)
Non-GAAP net sales	$	718,129	$	746,968	$	(28,839)	(3.9)	%
Consolidated:
Net sales, reported	$	1,761,098	$	1,955,054	$	(193,956)	(9.9)	%
Foreign exchange impact (a)	(10,820)		—
Less: Divestitures	(3,747)		(4,208)
Non-GAAP net sales	$	1,746,531	$	1,950,846	$	(204,315)	(10.5)	%
(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the six months ended December 31, 2023 into U.S. dollars using the average foreign exchange rates for the six months ended December 31, 2022.

34

Net Sales by Geography:
	Quarter ended December 31,
	2023		2022		$ Change		% Change
United States and Canada:	(in thousands)
Net sales, as reported	$	795,382	$	909,221	$	(113,839)	(12.5)	%
International:
Net sales, reported	$	89,410	$	102,020	$	(12,610)	(12.4)	%
Foreign exchange impact (a)	(5,209)		—
Less: Divestitures	(1,628)		(2,170)
Non-GAAP net sales	$	82,573	$	99,850	$	(17,277)	(17.3)	%
Consolidated:
Net sales, reported	$	884,792	$	1,011,241	$	(126,449)	(12.5)	%
Foreign exchange impact (a)	(5,209)		—
Less: Divestitures	(1,628)		(2,170)
Non-GAAP net sales	$	877,955	$	1,009,071	$	(131,116)	(13.0)	%
(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended December 31, 2023 into U.S. dollars using the average foreign exchange rates for the quarter ended December 31, 2022.
	Six months ended December 31,
	2023		2022		$ Change		% Change
United States and Canada:	(in thousands)
Net sales, as reported	$	1,586,384	$	1,768,760	$	(182,376)	(10.3)	%
International:
Net sales, reported	$	174,714	$	186,294	$	(11,580)	(6.2)	%
Foreign exchange impact (a)	(10,820)		—
Less: Divestitures	(3,747)		(4,208)
Non-GAAP net sales	$	160,147	$	182,086	$	(21,939)	(12.0)	%
Consolidated:
Net sales, reported	$	1,761,098	$	1,955,054	$	(193,956)	(9.9)	%
Foreign exchange impact (a)	(10,820)		—
Less: Divestitures	(3,747)		(4,208)
Non-GAAP net sales	$	1,746,531	$	1,950,846	$	(204,315)	(10.5)	%
(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the six months ended December 31, 2023 into U.S. dollars using the average foreign exchange rates for the six months ended December 31, 2022.

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Operating Income by Segment:
	Quarter ended December 31,								% of Net Sales December 31,
	2023		2022		$ Change		% Change		2023		2022
Specialty Technology Solutions:	(in thousands)
GAAP operating income	$	13,368	$	19,682	$	(6,314)	(32.1)	%	2.6	%	3.1	%
Adjustments:
Amortization of intangible assets	1,261		1,266		(5)
Non-GAAP operating income	$	14,629	$	20,948	$	(6,319)	(30.2)	%	2.8	%	3.3	%
Modern Communications & Cloud:
GAAP operating income	$	14,602	$	19,750	$	(5,148)	(26.1)	%	4.0	%	5.1	%
Adjustments:
Amortization of intangible assets	2,776		2,884		(108)
Tax recovery (a)	(1,386)		(2,858)		1,472
Non-GAAP operating income	$	15,992	$	19,776	$	(3,784)	(19.1)	%	4.4	%	5.2	%
Corporate:
GAAP operating loss	$	(1,144)	$	—	$	(1,144)	nm*		nm*		nm*
Adjustments:
Acquisition and divestiture costs	703		—		703
Cyberattack restoration costs	441		—		441
Non-GAAP operating income	$	—	$	—	$	—	nm*		nm*		nm*
Consolidated:
GAAP operating income	$	26,826	$	39,432	$	(12,606)	(32.0)	%	3.0	%	3.9	%
Adjustments:
Amortization of intangible assets	4,037		4,150		(113)
Cyberattack restoration costs	441		—		441
Tax recovery (a)	(1,386)		(2,858)		1,472
Acquisition and divestiture costs	703		—		703
Non-GAAP operating income	$	30,621	$	40,724	$	(10,103)	(24.8)	%	3.5	%	4.0	%

(a) Recovery of prior period withholding taxes in Brazil.

36

Operating Income by Segment:
	Six months ended December 31,								% of Net Sales December 31,
	2023		2022		$ Change		% Change		2023		2022
Specialty Technology Solutions:	(in thousands)
GAAP operating income	$	25,240	$	41,534	$	(16,294)	(39.2)	%	2.4	%	3.5	%
Adjustments:
Amortization of intangible assets	2,523		2,608		(85)
Non-GAAP operating income	$	27,763	$	44,142	$	(16,379)	(37.1)	%	2.7	%	3.7	%
Modern Communications & Cloud:
GAAP operating income	$	27,014	$	32,785	$	(5,771)	(17.6)	%	3.7	%	4.4	%
Adjustments:
Amortization of intangible assets	5,707		5,783		(76)
Tax recovery (a)	(1,386)		(2,858)		1,472
Non-GAAP operating income	$	31,335	$	35,710	$	(4,375)	(12.3)	%	4.3	%	4.8	%
Corporate:
GAAP operating loss	$	(1,343)	$	—	$	(1,343)	nm*		nm*		nm*
Adjustments:
Cyberattack restoration costs	640		—		640
Acquisition and divestiture costs	703		—		703
Non-GAAP operating income	$	—	$	—	$	—	nm*		nm*		nm*
Consolidated:
GAAP operating income	$	50,911	$	74,319	$	(23,408)	(31.5)	%	2.9	%	3.8	%
Adjustments:
Amortization of intangible assets	8,230		8,391		(161)
Cyberattack restoration costs	640		—		640
Tax recovery (a)	(1,386)		(2,858)		1,472
Acquisition and divestiture costs	703		—		703
Non-GAAP operating income	$	59,098	$	79,852	$	(20,754)	(26.0)	%	3.4	%	4.1	%

(a) Recovery of prior period withholding taxes in Brazil.

37

Additional Non-GAAP Metrics

To evaluate current period performance on a more consistent basis with prior periods, we disclose non-GAAP SG&A expenses, non-GAAP operating income, non-GAAP pre-tax income, non-GAAP net income and non-GAAP diluted earnings per share. Non-GAAP results exclude amortization of intangible assets related to divestitures, cyberattack restoration costs and other non-GAAP adjustments. These year-over-year metrics include the translation impact of changes in foreign currency exchange rates. These metrics are useful in assessing and understanding our operating performance, especially when comparing results with previous periods or forecasting performance for future periods. Below we provide a non-GAAP reconciliation of the aforementioned metrics adjusted for the costs and charges mentioned above:

		Quarter ended December 31, 2023
		GAAP Measure	Intangible amortization expense		Divestiture costs		Tax recovery	Cyberattack restoration costs		Gain on sale of a business (a)		Non-GAAP measure
	(in thousands, except per share data)
SG&A expenses		$66,921	$	—	$(703)		$1,386	$(441)		$	—	$67,163
Operating income		26,826	4,037		703		(1,386)	441		—		30,621
Pre-tax income		40,046	4,037		703		(1,386)	441		(14,533)		29,308
Net income		32,726	3,002		703		(640)	329		(14,533)		21,587
Diluted EPS		$1.29	$0.12		$0.03		$(0.03)	$0.01		$(0.57)		$0.85
		Quarter ended December 31, 2022
		GAAP Measure	Intangible amortization expense		Divestiture costs		Tax recovery	Cyberattack restoration costs		Gain on sale of a business (a)		Non-GAAP measure
	(in thousands, except per share data)
SG&A expenses		$69,074	$	—	$	—	$2,858	$	—	$	—	$71,932
Operating income		39,432	4,150		—		(2,858)	—		—		40,724
Pre-tax income		36,192	4,150		—		(2,858)	—		—		37,484
Net income		25,734	3,093		—		(1,886)	—		—		26,941
Diluted EPS		$1.01	$0.12		$	—	$(0.07)	$	—	$	—	$1.06
(a) Reflects gain on the sale of the UK-based intY business. This transaction resulted in a capital loss for tax purposes. The Company did not record a tax provision on the capital loss since there were no offsetting capital gains.

38

	Six months ended December 31, 2023
	GAAP Measure		Intangible amortization expense		Divestiture costs		Tax recovery		Cyberattack restoration costs		Gain on sale of a business (a)		Non-GAAP measure
SG&A expenses	$	142,356	$	—	$	(703)	$	1,386	$	(640)	$	—	$	142,399
Operating income	50,911		8,230		703		(1,386)		640		—		59,098
Pre-tax income	59,193		8,230		703		(1,386)		640		(14,533)		52,847
Net income	48,158		6,121		703		(640)		479		(14,533)		40,288
Diluted EPS	$	1.91	$	0.24	$	0.03	$	(0.03)	$	0.02	$	(0.58)	$	1.60
	Six months ended December 31, 2022
	GAAP Measure		Intangible amortization expense		Divestiture costs		Tax recovery		Cyberattack restoration costs		Gain on sale of a business (a)		Non-GAAP measure
SG&A expenses	$	140,667	$	—	$	—	$	2,858	$	—	$	—	$	143,525
Operating income	74,319		8,391		—		(2,858)		—		—		79,852
Pre-tax income	68,475		8,391		—		(2,858)		—		—		74,008
Net income	49,776		6,254		—		(1,886)		—		—		54,144
Diluted EPS	$	1.96	$	0.25	$	—	$	(0.07)	$	—	$	—	$	2.13
(a) Reflects gain on the sale of the UK-based intY business. This transaction resulted in a capital loss for tax purposes. The Company did not record a tax provision on the capital loss since there were no offsetting capital gains.

39

Liquidity and Capital Resources

Our primary sources of liquidity are cash flows from operations and borrowings under our $350 million revolving credit facility. Our business requires significant investment in working capital, particularly accounts receivable and inventory, partially financed through our accounts payable to vendors, cash generated from operations and revolving lines of credit. In general, as our sales volume increases, our net investment in working capital increases, which typically results in decreased cash flow from operating activities. Conversely, when sales volume decreases, our net investment in working capital typically decreases, which typically results in increased cash flow from operating activities.

Our cash and cash equivalents balance totaled $45.0 million at December 31, 2023, compared to $36.2 million at June 30, 2023, including $38.3 million and $31.0 million held outside of the United States at December 31, 2023 and June 30, 2023, respectively. Checks released but not yet cleared in the amount of $8.0 million are included in accounts payable at December 31, 2023 and June 30, 2023.

We conduct business in North America and Brazil where we generate and use cash. We provide for United States income taxes from the earnings of our Canadian and Brazilian subsidiaries. See Note 13 - Income Taxes in the Notes to the Consolidated Financial Statements for further discussion.

Our net investment in working capital decreased $75.7 million to $794.6 million at December 31, 2023 from $870.3 million at June 30, 2023, primarily from decreases in inventory and accounts receivable, partially offset by lower accounts payable, as a result of lower sales volume and our multi-quarter working capital improvement plan. 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.

	Six months ended
	December 31,
	2023		2022
	(in thousands)
Cash provided by (used in):
Operating activities	$	156,757	$	(75,346)
Investing activities	13,113		(4,262)
Financing activities	(161,306)		108,029

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 $156.8 million for the six months ended December 31, 2023, compared to $75.3 million used in operating activities in the prior-year period. Cash provided by operating activities for the six months ended December 31, 2023 is attributable to reductions in inventory and accounts receivable, which decreased 24% and 12%, respectively, compared to June 30, 2023, partially offset by a reduction in accounts payable which decreased 22% comparatively. Cash used in operating activities for the six months ended December 31, 2022 is primarily attributable to increases in inventory and accounts receivable, which increased 24% and 7%, respectively, compared to June 30, 2022.

The number of days sales outstanding ("DSO") was 68 days at December 31, 2023, compared to 72 days at June 30, 2023 and 69 days at December 31, 2022. Inventory turned 5.1 times during the quarter ended December 31, 2023, compared to 4.4 times during the quarter ended June 30, 2023 and 5.0 times in the prior-year quarter ended December 31, 2022.

Cash provided by investing activities for the six months ended December 31, 2023 was $13.1 million, compared to $4.3 million used in investing activities in the prior-year period. Cash provided by investing activities for the six months ended December 31, 2023 is largely due to cash received from the sale of our intY UK business. Cash used in investing activities for the six months ended December 31, 2022 represents capital expenditures.

Management expects capital expenditures for fiscal year 2024 to range from $6.0 million to $8.0 million, primarily for IT investments and facility improvements.

40

For the six months ended December 31, 2023, cash used in financing activities totaled $161.3 million, compared to $108.0 million provided by financing activities for the prior-year period. Cash used in financing activities for the six months ended December 31, 2023 is primarily attributable to net repayments on the revolving credit facility. Cash provided by financing activities for the six months ended December 31, 2022 is primarily attributable to net borrowings on the revolving credit facility.

Credit Facility

We have a multi-currency senior secured credit facility with JPMorgan Chase Bank N.A., as administrative agent, and a syndicate of banks (as amended, the “Amended Credit Agreement”). On September 28, 2022, we amended and restated our Amended Credit Agreement, which includes (i) a five-year, $350 million multicurrency senior secured revolving credit facility and (ii) a five-year $150 million senior secured term loan facility. The Amended Credit Agreement extended the credit facility maturity date to September 28, 2027. In addition, pursuant to an “accordion feature,” we may increase our borrowings up to an additional $250 million, subject to obtaining additional credit commitments from the lenders participating in the increase. The Amended Credit Agreement allows for the issuance of up to $50 million for letters of credit. Borrowings under the Amended Credit Agreement are guaranteed by substantially all of our domestic assets and our domestic subsidiaries. Under the terms of the revolving credit facility, the payment of cash dividends is restricted. We incurred debt issuance costs of $1.4 million in connection with the amendment and restatement of the Amended Credit Agreement. These costs were capitalized to other non-current assets on the Condensed Consolidated Balance Sheets and added to the unamortized debt issuance costs from the previous credit facility.

Loans denominated in U.S. dollars, other than swingline loans, bear interest at a rate per annum equal to, at our option, (i) the adjusted term SOFR or adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon our ratio of (A) total consolidated debt less up to $30 million of unrestricted domestic cash to (B) trailing four-quarter consolidated EBITDA measured as of the end of the most recent year or quarter, as applicable, for which financial statements have been delivered to the Lenders (the “leverage ratio”); or (ii) the alternate base rate plus an additional margin ranging from 0% to 0.75%, depending upon our leverage ratio, plus, if applicable, certain mandatory costs. All swingline loans denominated in U.S. dollars bear interest based upon the adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon our leverage ratio, or such other rate as agreed upon with the applicable swingline lender. The adjusted term SOFR and adjusted daily simple SOFR include a fixed credit adjustment of 0.10% over the applicable SOFR reference rate. Loans denominated in foreign currencies bear interest at a rate per annum equal to the applicable benchmark rate set forth in the Amended Credit Agreement plus an additional margin ranging from 1.00% to 1.75%, depending upon our leverage ratio plus, if applicable, certain mandatory costs.

During the quarter and six months ended December 31, 2023, our borrowings under the credit facility were U.S. dollar loans. The spread in effect as of December 31, 2023 was 1.25% for SOFR-based loans and 0.25% for alternate base rate loans. The commitment fee rate in effect at December 31, 2023 was 0.20%. 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, 2023.

The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, during the quarters ended December 31, 2023 and 2022 was $138.7 million and $219.5 million, respectively. There was $329.1 million and $171.0 million available for additional borrowings as of December 31, 2023 and June 30, 2023, respectively. The effective interest rates for the revolving line of credit were 6.70% and 6.74% as of December 31, 2023 and June 30, 2023, respectively. There were no letters of credit issued under the multi-currency revolving credit facility at December 31, 2023 or June 30, 2023. 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 Credit Facility as of December 31, 2023, and currently expect to continue to maintain such compliance, should we encounter difficulties, our historical relationship with our Credit Facility lending group has been strong and we anticipate their continued support of our long-term business.

Summary

41

We believe that our existing sources of liquidity, including cash resources and cash provided by operating activities, supplemented as necessary with funds under our credit agreements, will provide sufficient resources to meet our present and future working capital and cash requirements for at least the next twelve months. We also believe that our longer-term working capital, planned expenditures and other general funding requirements will be satisfied through cash flows from operations and, to the extent necessary, from our borrowing facilities.

Accounting Standards Recently Issued

See Note 1 of the Notes to Condensed Consolidated Financial Statements for a full description of recent accounting pronouncements, including the anticipated dates of adoption and the effects on our consolidated financial position and results of operations.

Critical Accounting Policies and Estimates

Critical accounting policies are those that are important to our financial condition and require management's most difficult, subjective or complex judgments. Different amounts would be reported under different operating conditions or under alternative assumptions. See Management's Discussion and Analysis of Financial Condition and Results from Operations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 for a complete discussion.

42

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a description of our market risks, see Part II, Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023. No material changes have occurred to our market risks since June 30, 2023.

43

Item 4. Controls and Procedures

An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") of the effectiveness of our disclosure controls and procedures at December 31, 2023. Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures are effective at December 31, 2023. During the quarter ended December 31, 2023, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

44

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is, from time to time, party to lawsuits arising out of operations. Although there can be no assurance, based upon information known to us, we believe that any liability resulting from an adverse determination of such lawsuits would not have a material adverse effect on our financial condition or results of operations. For a description of our material legal proceedings, see Note 12 - Commitments and Contingencies in the notes to the condensed consolidated financial statements, which is incorporated herein by reference.

Item 1A. Risk Factors

In addition to the risk factors discussed in our other reports and statements that we file with the SEC, you should carefully consider the factors discussed in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended June 30, 2023, which could materially affect our business, financial condition and/or future operating results.

There have been no material changes to the risk factors disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Share Repurchases

In August 2021, our Board of Directors authorized a $100 million share repurchase program. The authorization does not have any time limit.

The following table presents the share-repurchase activity for the quarter ended December 31, 2023 (in thousands except share and per share data):

Period	Total number of shares purchased (1)	Average price paid per share	Total number of shares purchased as part of the publicly announced plan or program	Approximate dollar value of shares that may yet be purchased under the plan or program
October 1 - 31, 2023	—	—	—	$ 66,163,962
November 1 - 30, 2023	32,567	$ 32.73	—	$ 66,163,962
December 1 - 31, 2023	36,544	$ 34.29	36,305	$ 64,913,399
Total	69,111		36,305	$ 64,913,399

(1) Includes 32,806 shares withheld from employees' stock-based awards to satisfy required tax withholding obligations for the months of November and December 2023. There were no shares withheld during the month of October 2023.

Dividends

We have never declared or paid a cash dividend. Under the terms of our credit facility, the payment of cash dividends is restricted.

45

Item 5. Other Information

During the three months ended December 31, 2023, none of our directors or our officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).

46

Item 6. Exhibits

Exhibit Number	Description
31.1	Certification of the Chief Executive Officer, Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer, Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from our Quarterly Report on Form 10-Q for the quarter ended December 31, 2023, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at December 31, 2023 and June 30, 2023; (ii) the Condensed Consolidated Income Statements for the quarters and six months ended December 31, 2023 and 2022; (iii) the Condensed Consolidated Statements of Comprehensive Income for the quarters and six months ended December 31, 2023 and 2022; (iv) the Condensed Consolidated Statements of Shareholder's Equity at December 31, 2023 and 2022; (v) the Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2023 and 2022; and (vi) the Notes to the Condensed Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL
104	Cover page Inline XBRL File (Included in Exhibit 101)

47

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ScanSource, Inc.
Date:	February 6, 2024	/s/ MICHAEL L. BAUR
		Michael L. Baur
		Chair and Chief Executive Officer (Principal Executive Officer)

Date:	February 6, 2024	/s/ STEVE JONES
		Steve Jones
		Senior Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date:	February 6, 2024	/s/ BRANDY FORD
		Brandy Ford
		Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)

48

EX-31.1

Exhibit 31.1

Certification Pursuant to Rule 13a-14(a) or 15d-14(a)

of the Exchange Act, as adopted Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Michael L. Baur, certify that:

1.I have reviewed this quarterly report on Form 10-Q of ScanSource, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ MICHAEL L. BAUR

Michael L. Baur

Chairman and Chief Executive Officer

(Principal Executive Officer)

Date: February 6, 2024

EX-31.2

Exhibit 31.2

Certification Pursuant to Rule 13a-14(a) or 15d-14(a)

of the Exchange Act, as adopted Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Steve Jones, certify that:

1.I have reviewed this quarterly report on Form 10-Q of ScanSource, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ STEVE JONES

Steve Jones

Senior Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Date: February 6, 2024

EX-32.1

Exhibit 32.1

Certification of the Chief Executive Officer of ScanSource, Inc.

Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to § 906

of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of ScanSource, Inc. (the “Company”) on Form 10-Q for the quarter ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1)The Report fully complies with the requirements of §13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); and

2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	February 6, 2024	/s/ MICHAEL L. BAUR
		Michael L. Baur Chairman and Chief Executive Officer (Principal Executive Officer)

This certification is being furnished solely to comply with the provisions of § 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the accompanying Report, including for purposes of Section 18 of the Exchange Act, or as a separate disclosure document. A signed original of this written certification required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written certification required by Section 906, has been provided to the Company and will be rendered by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification of the Chief Financial Officer of ScanSource, Inc.

Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to § 906

of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of ScanSource, Inc. (the “Company”) on Form 10-Q for the quarter ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1)The Report fully complies with the requirements of §13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); and

2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	February 6, 2024	/s/ STEVE JONES
		Steve Jones Senior Executive Vice President and Chief Financial Officer (Principal Financial Officer)

This certification is being furnished solely to comply with the provisions of § 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the accompanying Report, including for purposes of Section 18 of the Exchange Act, or as a separate disclosure document. A signed original of this written certification required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written certification required by Section 906, has been provided to the Company and will be rendered by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover - shares	6 Months Ended
	Dec. 31, 2023	Jan. 31, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	000-26926
Entity Registrant Name	ScanSource, Inc.
Entity Incorporation, State or Country Code	SC
Entity Tax Identification Number	57-0965380
Entity Address, Address Line One	6 Logue Court
Entity Address, City or Town	Greenville
Entity Address, State or Province	SC
Entity Address, Postal Zip Code	29615
City Area Code	864
Local Phone Number	288-2432
Title of 12(b) Security	Common stock, no par value
Trading Symbol	SCSC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		25,170,468
Entity Central Index Key	0000918965
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Current assets:
Cash and cash equivalents	$ 44,987	$ 36,178
Accounts receivable, less allowance of $19,243 at December 31, 2023 and $15,480 at June 30, 2023	662,799	753,236
Inventories	575,137	757,574
Prepaid expenses and other current assets	122,272	110,087
Total current assets	1,405,195	1,657,075
Property and equipment, net	36,546	37,379
Goodwill	208,214	216,706
Identifiable intangible assets, net	45,313	68,495
Deferred income taxes	19,478	17,764
Other non-current assets	66,059	70,750
Total assets	1,780,805	2,068,169
Current liabilities:
Accounts payable	540,642	691,119
Accrued expenses and other current liabilities	58,460	78,892
Income taxes payable	3,653	9,875
Current portion of long-term debt	7,857	6,915
Total current liabilities	610,612	786,801
Deferred income taxes	0	3,816
Long-term debt, net of current portion	139,899	144,006
Borrowings under revolving credit facility	20,878	178,980
Other long-term liabilities	55,815	49,268
Total liabilities	827,204	1,162,871
Commitments and contingencies
Shareholders’ equity:
Preferred stock, no par value; 3,000,000 shares authorized, none issued	0	0
Common stock, no par value; 45,000,000 shares authorized, 25,154,469 and 24,844,203 shares issued and outstanding at December 31, 2023 and June 30, 2023, respectively	63,983	58,241
Retained earnings	984,836	936,678
Accumulated other comprehensive loss	(95,218)	(89,621)
Total shareholders’ equity	953,601	905,298
Total liabilities and shareholders’ equity	$ 1,780,805	$ 2,068,169

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Current assets:
Allowance for accounts receivable	$ 19,243	$ 15,480
Shareholders’ equity:
Preferred stock, shares authorized (in shares)	3,000,000	3,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, shares authorized (in shares)	45,000,000	45,000,000
Common stock, share issued (in shares)	25,154,469	24,844,203
Common stock, shares outstanding (in shares)	25,154,469	24,844,203

XML

CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Income Statement [Abstract]
Net sales	$ 884,792	$ 1,011,241	$ 1,761,098	$ 1,955,054
Cost of goods sold	784,044	895,907	1,553,842	1,726,236
Gross profit	100,748	115,334	207,256	228,818
Selling, general and administrative expenses	66,921	69,074	142,356	140,667
Depreciation expense	2,964	2,678	5,759	5,441
Intangible amortization expense	4,037	4,150	8,230	8,391
Operating income	26,826	39,432	50,911	74,319
Interest expense	3,359	5,060	8,945	8,507
Interest income	(2,119)	(2,027)	(3,444)	(3,618)
Gain on sale of business	(14,533)	0	(14,533)	0
Other expense, net	73	207	750	955
Income before income taxes	40,046	36,192	59,193	68,475
Provision for income taxes	7,320	10,458	11,035	18,699
Net income	$ 32,726	$ 25,734	$ 48,158	$ 49,776
Per share data:
Net income per common share, basic (in dollars per share)	$ 1.31	$ 1.02	$ 1.93	$ 1.97
Weighted-average shares outstanding, basic (in shares)	25,035	25,287	24,961	25,244
Net income per common share, diluted (in dollars per share)	$ 1.29	$ 1.01	$ 1.91	$ 1.96
Weighted-average shares outstanding, diluted (in shares)	25,334	25,502	25,235	25,454

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 32,726	$ 25,734	$ 48,158	$ 49,776
Unrealized (loss) gain on hedged transaction, net of tax	(1,547)	3	(1,395)	1,882
Realized foreign currency gain on sale of business	3,805	0	3,805	0
Foreign currency translation adjustment	(1,118)	7,401	(8,007)	184
Comprehensive income	$ 33,866	$ 33,138	$ 42,561	$ 51,842

XML

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Jun. 30, 2022		25,187,351
Beginning balance at Jun. 30, 2022	$ 806,528	$ 64,297	$ 846,869	$ (104,638)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	24,042		24,042
Unrealized (loss) gain on hedged transaction, net of tax	1,879			1,879
Foreign currency translation adjustment	(7,217)			(7,217)
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares)		38,551
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes	(586)	$ (586)
Share-based compensation	2,358	$ 2,358
Ending balance (in shares) at Sep. 30, 2022		25,225,902
Ending balance at Sep. 30, 2022	827,004	$ 66,069	870,911	(109,976)
Beginning balance (in shares) at Jun. 30, 2022		25,187,351
Beginning balance at Jun. 30, 2022	806,528	$ 64,297	846,869	(104,638)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	49,776
Unrealized (loss) gain on hedged transaction, net of tax	1,882
Foreign currency translation adjustment	184
Realized foreign currency translation gain from disposal of a business	0
Ending balance (in shares) at Dec. 31, 2022		25,343,014
Ending balance at Dec. 31, 2022	862,386	$ 68,313	896,645	(102,572)
Beginning balance (in shares) at Sep. 30, 2022		25,225,902
Beginning balance at Sep. 30, 2022	827,004	$ 66,069	870,911	(109,976)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	25,734		25,734
Unrealized (loss) gain on hedged transaction, net of tax	3			3
Foreign currency translation adjustment	7,401			7,401
Realized foreign currency translation gain from disposal of a business	0
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares)		117,112
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes	(1,112)	$ (1,112)
Share-based compensation	3,356	$ 3,356
Ending balance (in shares) at Dec. 31, 2022		25,343,014
Ending balance at Dec. 31, 2022	862,386	$ 68,313	896,645	(102,572)
Beginning balance (in shares) at Jun. 30, 2023		24,844,203
Beginning balance at Jun. 30, 2023	905,298	$ 58,241	936,678	(89,621)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	15,432		15,432
Unrealized (loss) gain on hedged transaction, net of tax	153			153
Foreign currency translation adjustment	(6,890)			(6,890)
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares)		116,028
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes	(1,510)	$ (1,510)
Share-based compensation	2,770	$ 2,770
Ending balance (in shares) at Sep. 30, 2023		24,960,231
Ending balance at Sep. 30, 2023	915,253	$ 59,501	952,110	(96,358)
Beginning balance (in shares) at Jun. 30, 2023		24,844,203
Beginning balance at Jun. 30, 2023	905,298	$ 58,241	936,678	(89,621)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	48,158
Unrealized (loss) gain on hedged transaction, net of tax	(1,395)
Foreign currency translation adjustment	(8,007)
Realized foreign currency translation gain from disposal of a business	3,805
Ending balance (in shares) at Dec. 31, 2023		25,154,469
Ending balance at Dec. 31, 2023	953,601	$ 63,983	984,836	(95,218)
Beginning balance (in shares) at Sep. 30, 2023		24,960,231
Beginning balance at Sep. 30, 2023	915,253	$ 59,501	952,110	(96,358)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	32,726		32,726
Unrealized (loss) gain on hedged transaction, net of tax	(1,547)			(1,547)
Foreign currency translation adjustment	(1,118)			(1,118)
Realized foreign currency translation gain from disposal of a business	3,805			3,805
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares)		230,543
Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes	3,162	$ 3,162
Common stock repurchased (in shares)		(36,305)
Common stock repurchased	(1,251)	$ (1,251)
Share-based compensation	2,571	$ 2,571
Ending balance (in shares) at Dec. 31, 2023		25,154,469
Ending balance at Dec. 31, 2023	$ 953,601	$ 63,983	$ 984,836	$ (95,218)

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net income	$ 48,158	$ 49,776
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gain on sale of business	(14,533)	0
Depreciation and amortization	14,475	14,285
Amortization of debt issue costs	193	385
Provision for doubtful accounts	4,472	33
Share-based compensation	5,340	5,679
Deferred income taxes	(1,703)	932
Finance lease interest	46	24
Changes in operating assets and liabilities:
Accounts receivable	75,579	(49,541)
Inventories	182,168	(146,826)
Prepaid expenses and other assets	(11,576)	30,487
Other non-current assets	3,208	(7,168)
Accounts payable	(135,138)	33,820
Accrued expenses and other liabilities	(7,678)	(13,268)
Income taxes payable	(6,254)	6,036
Net cash provided by (used in) operating activities	156,757	(75,346)
Cash flows from investing activities:
Capital expenditures	(4,865)	(4,262)
Proceeds from sale of business, net of cash transferred	17,978	0
Net cash provided by (used in) investing activities	13,113	(4,262)
Cash flows from financing activities:
Borrowings on revolving credit, net of expenses	1,134,629	1,232,058
Repayments on revolving credit, net of expenses	(1,292,729)	(1,137,897)
(Repayments) borrowings on long-term debt, net	(3,165)	17,465
Repayments on finance lease obligation	(442)	(492)
Debt issuance costs	0	(1,407)
Exercise of stock options	4,309	634
Taxes paid on settlement of equity awards	(2,657)	(2,332)
Common stock repurchased	(1,251)	0
Net cash (used in) provided by financing activities	(161,306)	108,029
Effect of exchange rate changes on cash and cash equivalents	245	37
Increase in cash and cash equivalents	8,809	28,458
Cash and cash equivalents at beginning of period	36,178	37,987
Cash and cash equivalents at end of period	$ 44,987	$ 66,445

XML

Business and Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Business and Summary of Significant Accounting Policies

Business and Summary of Significant Accounting Policies

Business Description

ScanSource, Inc. (together with its subsidiaries referred to as “the Company” or “ScanSource”) is a leading hybrid distributor connecting devices to the cloud and accelerating growth for partners across hardware, Software as a Service ("SaaS"), connectivity and cloud. The Company brings technology solutions and services from the world’s leading suppliers of mobility and barcode, point-of-sale ("POS"), payments, networking, physical security, unified communications and collaboration, telecom and cloud services to market. The Company operates in the United States, Canada, Brazil and the United Kingdom ("UK"). The Company's two operating segments, Specialty Technology Solutions and Modern Communications & Cloud, are based on technology type and are generally related to technology devices and communication, connectivity and cloud services, respectively.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared by the Company’s management in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position at December 31, 2023 and June 30, 2023, the results of operations for the quarters and six months ended December 31, 2023 and 2022, the condensed consolidated statements of comprehensive income for the quarters and six months ended December 31, 2023 and 2022, the condensed consolidated statements of shareholders' equity for the quarters and six months ended December 31, 2023 and 2022 and the condensed consolidated statements of cash flows for the six months ended December 31, 2023 and 2022. The results of operations for the quarter and six months ended December 31, 2023 are not necessarily indicative of the results to be expected for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. Unless otherwise indicated, disclosures provided in the Notes pertain to continuing operations only.

Summary of Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies for the six months ended December 31, 2023 from the policies described in the notes to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2023. For a discussion of the Company’s significant accounting policies, please see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. The Company maintains zero-balance disbursement accounts at various financial institutions at which the Company does not maintain significant depository relationships. Due to the terms of the agreements governing these accounts, the Company generally does not have the right to offset outstanding checks written from these accounts against cash on hand, and the respective institutions are not legally obligated to honor the checks until sufficient funds are transferred to fund the checks. As a result, checks released but not yet cleared from these accounts in the amount of $8.0 million are included in accounts payable on the condensed consolidated balance sheets at December 31, 2023 and June 30, 2023.

Long-lived Assets

The Company presents depreciation expense and intangible amortization expense on the condensed consolidated income statements. The Company's depreciation expense related to selling, general and administrative costs totaled $3.0 million and $5.8 million for the quarter and six months ended December 31, 2023 and $2.7 million and $5.4 million for the quarter and six months ended December 31, 2022. Depreciation expense reported as part of cost of goods sold on the condensed consolidated income statements totaled $0.3 million and $0.5 million for the quarter and six months ended December 31, 2023 and $0.2 million and $0.5 million for the quarter and six months ended December 31, 2022. The Company's intangible amortization expense reported on the condensed consolidated income statements relates to selling, general and administrative costs, not the cost of selling goods. Intangible amortization expense totaled $4.0 million and $8.2 million for the quarter and six months ended December 31, 2023 and $4.2 million and $8.4 million for the quarter and six months ended December 31, 2022.

Recent Accounting Pronouncements

In July 2023, the Securities and Exchange Commission issued final rules that require new and enhanced disclosures on cybersecurity risk management, strategy, governance, and incident reporting. Under the final rules, companies must report material cybersecurity incidents within four business days of determining the incident is material on Form 8-K. As additional information about the material aspects of the previously reported incidents become available, a Form 8-K/A must be filed with the additional disclosures. These disclosure requirements on Form 8-K were effective beginning December 18, 2023. For fiscal years ending on or after December 15, 2023, companies must disclose their cybersecurity processes, management's role in cybersecurity governance, and cybersecurity oversight by the Board of Directors on Form 10-K.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. This ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. This ASU is applicable to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and subsequent interim periods, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU updates income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and is applicable to the Company’s fiscal year beginning July 1, 2025, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

The Company has reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on its consolidated financial statements as a result of future adoption.

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Trade Accounts and Notes Receivable, Net

6 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Trade Accounts and Notes Receivable, Net

Trade Accounts and Notes Receivable, Net

The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from customers’ failure to make payments on accounts receivable due to the Company. The Company has notes receivable with certain customers, which are included in “Accounts receivable, less allowance” in the Condensed Consolidated Balance Sheets.

Management determines the estimate of the allowance for doubtful accounts receivable by considering a number of factors, including: (i) historical experience, (ii) aging of the accounts receivable, (iii) specific information obtained by the Company on the financial condition and the current creditworthiness of its customers, (iv) the current economic and country-specific environment and (v) reasonable and supportable forecasts about collectability. Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model. Receivables that do not share risk characteristics are evaluated on an individual basis. Estimates of expected credit losses on trade receivables over the contractual life are recorded at inception and adjusted over the contractual life.

The changes in the allowance for doubtful accounts for the six months ended December 31, 2023 are set forth in the table below.

	June 30, 2023		Amounts Charged to Expense		Write-offs		Other (1)		December 31, 2023
	(in thousands)
Trade accounts and current notes receivable allowance	$	15,480	$	4,472	$	(1,197)	$	488	$	19,243

(1)"Other" amounts include recoveries and the effect of foreign currency fluctuations for the six months ended December 31, 2023.

XML

Revenue Recognition

6 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

The Company provides technology solutions and services from the world's leading suppliers of mobility, barcode, POS, payments, physical security, unified communications, collaboration, telecom and cloud services. This includes hardware, related accessories and device configuration as well as software licenses, professional services and hardware support programs.

In determining the appropriate amount of revenue to recognize, the Company applies the following five-step model: (i) identify contracts with customers; (ii) identify performance obligations in the contracts; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations per the contracts; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company recognizes revenue as control of products and services are transferred to customers, which is generally at the point of shipment. The Company delivers products to customers in several ways, including: (i) shipment from a Company warehouse, (ii) drop-shipment directly from the supplier, or (iii) electronic delivery for non-physical products.

Principal versus Agent Considerations

The Company is the principal for sales of all hardware and certain software and services. The Company considers itself the principal in those transactions where it has control of the product or service before it is transferred to the customer. The Company recognizes the principal-associated revenue and cost of goods sold on a gross basis.

The Company is the agent for third-party service contracts, including product warranties and supplier-hosted software. These service contracts are sold separately from the products, and the Company often serves as the agent for the contract on behalf of the original equipment manufacturer. The Company's responsibility is to arrange for the provision of the specified service by the original equipment manufacturer, and the Company does not control the specified service before it is transferred to the customer. Because the Company acts as an agent, revenue is recognized net of cost at the time of sale. The Intelisys business operates under an agency model.

Variable Considerations

For certain transactions, products are sold with a right of return and may also provide other rebates or incentives, which are accounted for as variable consideration. The Company estimates a returns allowance based on historical experience and reduces revenue accordingly. The Company estimates the amount of variable consideration for rebates and incentives by using the expected value to be given to the customer and reduces the revenue by those estimated amounts. These estimates are reviewed and updated as necessary at the end of each reporting period.

Contract Balances

The Company records contract assets and liabilities for payments received from customers in advance of services performed. These assets and liabilities are the result of the sales of the Company's self-branded warranty programs and other transactions where control has not yet passed to the customer. These amounts are immaterial to the consolidated financial statements for the periods presented.

Disaggregation of Revenue

The following tables represent the Company's disaggregation of revenue:

	Quarter ended December 31, 2023
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service
Hardware, software and cloud (excluding Intelisys)	$	520,651	$	342,686	$	863,337
Intelisys connectivity and cloud	—		21,455		21,455
	$	520,651	$	364,141	$	884,792
	Six months ended December 31, 2023
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service:
Hardware, software and cloud (excluding Intelisys)	$	1,030,222	$	688,918	$	1,719,140
Intelisys connectivity and cloud	—		41,958		41,958
	$	1,030,222	$	730,876	$	1,761,098

	Quarter ended December 31, 2022
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service
Hardware, software and cloud (excluding Intelisys)	$	627,548	$	363,743	$	991,291
Intelisys connectivity and cloud	—		19,950		19,950
	$	627,548	$	383,693	$	1,011,241
	Six months ended December 31, 2022
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service:
Hardware, software and cloud (excluding Intelisys)	$	1,203,878	$	712,373	$	1,916,251
Intelisys connectivity and cloud	—		38,803		38,803
	$	1,203,878	$	751,176	$	1,955,054

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Earnings Per Share

6 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share are computed by dividing net income by the weighted-average number of common and potential common shares outstanding.

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands, except per share data)
Numerator:
Net income	$	32,726	$	25,734	$	48,158	$	49,776
Denominator:
Weighted-average shares, basic	25,035		25,287		24,961		25,244
Dilutive effect of share-based payments	299		215		274		210
Weighted-average shares, diluted	25,334		25,502		25,235		25,454
Net income per common share, basic	$	1.31	$	1.02	$	1.93	$	1.97
Net income per common share, diluted	$	1.29	$	1.01	$	1.91	$	1.96

For the quarter and six months ended December 31, 2023, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 563,690 and 931,367, respectively. For the quarter and six months ended December 31, 2022, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 847,651 and 1,268,455, respectively.

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Accumulated Other Comprehensive Loss

6 Months Ended

Dec. 31, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of tax are as follows: 

	December 31, 2023		June 30, 2023
	(in thousands)
Foreign currency translation adjustment	$	(97,338)	$	(93,136)
Unrealized gain on hedged transaction, net of tax	2,120		3,515
Accumulated other comprehensive loss	$	(95,218)	$	(89,621)

The tax effect of amounts in comprehensive loss reflect a tax (benefit) expense as follows:

	Quarter ended December 31,				Six months ended December 31,
	2023		2022		2023		2022
	(in thousands)
Tax (benefit) expense	$	(637)	$	166	$	(692)	$	580

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Goodwill and Other Identifiable Intangible Assets

6 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Identifiable Intangible Assets

Goodwill and Other Identifiable Intangible Assets

The changes in the carrying amount of goodwill for the six months ended December 31, 2023, by reporting segment, are set forth in the table below.

	Specialty Technology Solutions		Modern Communications & Cloud		Total
	(in thousands)
Balance at June 30, 2023	$	16,370	$	200,336	$	216,706
Goodwill disposed upon business sale	—		(8,539)		(8,539)
Foreign currency translation adjustment	—		47		47
Balance at December 31, 2023	$	16,370	$	191,844	$	208,214

The following table shows changes in the amount recognized for net identifiable intangible assets for the six months ended December 31, 2023.

	Net Identifiable Intangible Assets
	(in thousands)
Balance at June 30, 2023	$	68,495
Intangibles disposed upon business sale	(14,927)
Amortization expense	(8,230)
Foreign currency translation adjustment	(25)
Balance at December 31, 2023	$	45,313

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Short-Term Borrowings and Long-Term Debt

6 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Short-Term Borrowings and Long-Term Debt

Short-Term Borrowings and Long-Term Debt

The following table presents the Company’s debt at December 31, 2023 and June 30, 2023.

	December 31, 2023		June 30, 2023
	(in thousands)
Current portion of long-term debt	$	7,857	$	6,915
Mississippi revenue bond, net of current portion	3,024		3,381
Senior secured term loan facility, net of current portion	136,875		140,625
Borrowings under revolving credit facility	20,878		178,980
Total debt	$	168,634	$	329,901

Credit Facility

The Company has a multi-currency senior secured credit facility (as amended, the "Amended Credit Agreement") with JPMorgan Chase Bank N.A., as administrative agent, and a syndicate of banks (collectively the "Lenders"). On September 28, 2022, the Company amended and restated the Amended Credit Agreement, which includes (i) a five-year, $350 million multicurrency senior secured revolving credit facility and (ii) a five-year $150 million senior secured term loan facility. The Amended Credit Agreement extended the credit facility maturity date to September 28, 2027. In addition, pursuant to an “accordion feature,” the Company may increase its borrowings up to an additional $250 million, subject to obtaining additional credit commitments from the lenders participating in the increase. The Amended Credit Agreement allows for the issuance of up to $50 million for letters of credit. Borrowings under the Amended Credit Agreement are guaranteed by substantially all of the domestic assets of the Company and its domestic subsidiaries. Under the terms of the revolving credit facility, the payment of cash dividends is restricted. The Company incurred debt issuance costs of $1.4 million in connection with the amendment and restatement of the Amended Credit Agreement. These costs were capitalized to other non-current assets on the Condensed Consolidated Balance Sheets and added to the unamortized debt issuance costs from the previous credit facility.

Loans denominated in U.S. dollars, other than swingline loans, bear interest at a rate per annum equal to, at the Company’s option, (i) the adjusted term Secured Overnight Financing Rate ("SOFR") or adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon the Company’s ratio of (A) total consolidated debt less up to $30 million of unrestricted domestic cash to (B) trailing four-quarter consolidated EBITDA measured as of the end of the most recent year or quarter, as applicable, for which financial statements have been delivered to the Lenders (the “leverage ratio”); or (ii) the alternate base rate plus an additional margin ranging from 0% to 0.75%, depending upon the Company’s leverage ratio, plus, if applicable, certain mandatory costs. All swingline loans denominated in U.S. dollars bear interest based upon the adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon the Company's leverage ratio, or such other rate as the Company and the applicable swingline lender may agree. The adjusted term SOFR and adjusted daily simple SOFR include a fixed credit adjustment of 0.10% over the applicable SOFR reference rate. Loans denominated in foreign currencies bear interest at a rate per annum equal to the applicable benchmark rate set forth in the Amended Credit Agreement plus an additional margin ranging from 1.00% to 1.75%, depending upon the Company’s leverage ratio plus, if applicable, certain mandatory costs.

During the quarter and six months ended December 31, 2023, the Company's borrowings under the credit facility were U.S. dollar loans. The spread in effect as of December 31, 2023 was 1.25%, plus a 0.10% credit spread adjustment for SOFR-based loans and 0.25% for alternate base rate loans. The commitment fee rate in effect at December 31, 2023 was 0.20%. The

Amended Credit Agreement includes customary representations, warranties and affirmative and negative covenants, including financial covenants. Specifically, the Company’s Leverage Ratio must be less than or equal to 3.50 to 1.00 at all times. In addition, the Company’s 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. The Company was in compliance with all covenants under the credit facility at December 31, 2023.

The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, during the six month periods ended December 31, 2023 and 2022 was $138.7 million and $219.5 million, respectively. There was $329.1 million and $171.0 million available for additional borrowings as of December 31, 2023 and June 30, 2023, respectively. The effective interest rates for the revolving line of credit were 6.70% and 6.74% as of December 31, 2023 and June 30, 2023, respectively. There were no letters of credit issued under the multi-currency revolving credit facility at December 31, 2023 or June 30, 2023.

Mississippi Revenue Bond

On August 1, 2007, the Company entered into an agreement with the State of Mississippi to provide financing for the acquisition and installation of certain equipment to be utilized at the Company’s Southaven, Mississippi warehouse, through the issuance of an industrial development revenue bond. The bond matures on September 1, 2032. The bond accrues interest at the one-month term SOFR plus an adjustment of 0.10% plus a spread of 0.85%. The terms of the bond allow for payment of interest only for the first 10 years of the agreement. Starting on September 1, 2018 through 2032, principal and interest payments are due until the maturity date or the redemption of the bond. The agreement also provides the bondholder with a put option, exercisable only within 180 days of each fifth anniversary of the agreement, requiring the Company to pay back the bonds at 100% of the principal amount outstanding. At December 31, 2023, the Company was in compliance with all covenants under this bond. The interest rates at December 31, 2023 and June 30, 2023 were 6.29% and 6.11%, respectively.

Debt Issuance Costs

At December 31, 2023, net debt issuance costs associated with the credit facility and bond totaled $1.4 million and are being amortized on a straight-line basis through the maturity date of each respective debt instrument.

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Derivatives and Hedging Activities

6 Months Ended

Dec. 31, 2023

General Discussion of Derivative Instruments and Hedging Activities [Abstract]

Derivatives and Hedging Activities

Derivatives and Hedging Activities

The Company's results of operations could be materially impacted by significant changes in foreign currency exchange rates and interest rates. In an effort to manage the exposure to these risks, the Company periodically enters into various derivative instruments. The Company's accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments in accordance with U.S. GAAP. The Company records all derivatives on the Condensed Consolidated Balance Sheet at fair value. Derivatives that are not designated as hedging instruments or the ineffective portions of cash flow hedges are adjusted to fair value through earnings in other income and expense.

Foreign Currency Derivatives – The Company conducts a portion of its business internationally in a variety of foreign currencies and is exposed to market risk for changes in foreign currency exchange rates. The Company attempts to hedge transaction exposures with natural offsets to the fullest extent possible and once these opportunities have been exhausted the Company uses currency options and forward contracts or other hedging instruments with third parties. These contracts will periodically hedge the exchange of various currencies, including the U.S. dollar, Brazilian real, euro, British pound and Canadian dollar.

The Company had contracts outstanding for purposes of managing cash flows with notional amounts of $27.3 million and $34.3 million for the exchange of foreign currencies at December 31, 2023 and June 30, 2023, respectively. To date, the Company has chosen not to designate these derivatives as hedging instruments, and accordingly, these instruments are adjusted to fair value through earnings in other income and expense. Summarized financial information related to these derivative contracts and changes in the underlying value of the foreign currency exposures included in the Condensed Consolidated Income Statements for the quarters and six months ended December 31, 2023 and 2022 are as follows:

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands)
Net foreign exchange derivative contract losses	$	1,025	$	871	$	658	$	1,309
Net foreign currency transactional and re-measurement (gains) losses	(596)		(524)		466		(39)
Net foreign currency exchange losses	$	429	$	347	$	1,124	$	1,270

Net foreign currency exchange gains and losses consist of foreign currency transactional and functional currency re-measurements, offset by net foreign currency exchange contract gains and losses and are included in other income and expense. Foreign exchange gains and losses are generated as the result of fluctuations in the value of the U.S. dollar versus the Brazilian real, the U.S. dollar versus the euro, the British pound versus the euro, and the Canadian dollar versus the U.S. dollar.

Interest Rates - The Company’s earnings are also affected by changes in interest rates due to the impact those changes have on interest expense from floating rate debt instruments. The Company manages its exposure to changes in interest rates by using interest rate swaps to hedge this exposure and to achieve a desired proportion of fixed versus floating rate debt.

On April 30, 2019, the Company entered into an interest rate swap agreement to lock into a fixed LIBOR interest rate, which was amended on September 28, 2022, to change the reference rate from LIBOR to SOFR. The swap agreement has a notional amount of $100.0 million, with a $50.0 million tranche scheduled to mature on April 30, 2024 and a $50.0 million tranche scheduled to mature April 30, 2026.

On March 31, 2023, the Company entered into an interest rate swap agreement to lock into a fixed SOFR interest rate with a notional amount of $25 million and a maturity date of March 31, 2028.

These interest rate swap agreements are designated as cash flow hedges to hedge the variable rate interest payments on the revolving credit facility. Interest rate differentials paid or received under the swap agreements are recognized as adjustments to interest expense. To the extent the swaps are effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swaps are not included in current earnings but are reported as other comprehensive income (loss). There was no ineffective portion to be recorded as an adjustment to earnings for the quarters and six months ended December 31, 2023 and 2022.

The components of the cash flow hedge included in the Condensed Consolidated Statement of Comprehensive Income for the quarters and six months ended December 31, 2023 and 2022, are as follows:

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands)
Net interest income recognized as a result of interest rate swap	$	(903)	$	(345)	$	(1,781)	$	(313)
Unrealized (loss) gain in fair value of interest rate swap	(1,165)		349		(72)		2,847
Net (decrease) increase in accumulated other comprehensive income	(2,068)		4		(1,853)		2,534
Income tax effect	(521)		1		(458)		652
Net (decrease) increase in accumulated other comprehensive income, net of tax	$	(1,547)	$	3	$	(1,395)	$	1,882

The Company used the following derivative instruments at December 31, 2023 and June 30, 2023, reflected in its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above:

		December 31, 2023		June 30, 2023
	Balance Sheet Location	Fair Value  of Derivatives Designated  as Hedge Instruments	Fair Value  of Derivatives Not Designated as  Hedge Instruments	Fair Value  of Derivatives Designated as Hedge Instruments	Fair Value  of Derivatives Not Designated as Hedge Instruments
		(in thousands)
Derivative assets:
Foreign exchange contracts	Prepaid expenses and other current assets	—	—	—	$1
Foreign currency hedge	Prepaid expenses and other current assets	$27	—	$100	—
Interest rate swap agreement	Other non-current assets	$2,834	—	$4,687	—
Derivative liabilities:
Foreign exchange contracts	Accrued expenses and other current liabilities	—	$4	—	—

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Fair Value of Financial Instruments

6 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company classifies certain assets and liabilities based on the fair value hierarchy, which aggregates fair value measured assets and liabilities based upon the following levels of inputs:

•Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

•Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

•Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The assets and liabilities maintained by the Company that are required to be measured at fair value on a recurring basis include deferred compensation plan investments, forward foreign currency exchange contracts, foreign currency hedge agreements and interest rate swap agreements. The carrying value of debt is considered to approximate fair value, as the Company’s debt instruments are indexed to a variable rate using the market approach (Level 2).

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at December 31, 2023:

	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)
	(in thousands)
Assets:
Deferred compensation plan investments, current and non-current portion	$	31,343	$	31,343	$	—
Interest rate swap agreement	2,834		—		2,834
Foreign currency hedge	27		—		27
Total assets at fair value	$	34,204	$	31,343	$	2,861
Liabilities:
Deferred compensation plan investments, current and non-current portion	$	31,343	$	31,343	$	—
Forward foreign currency exchange contracts	4		—		4
Total liabilities at fair value	$	31,347	$	31,343	$	4

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at June 30, 2023:

	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)
	(in thousands)
Assets:
Deferred compensation plan investments, current and non-current portion	$	28,209	$	28,209	$	—
Forward foreign currency exchange contracts	1		—		1
Foreign currency hedge	100		—		100
Interest rate swap agreement	4,687		—		4,687
Total assets at fair value	$	32,997	$	28,209	$	4,788
Liabilities:
Deferred compensation plan investments, current and non-current portion	$	28,229	$	28,229	$	—
Total liabilities at fair value	$	28,229	$	28,229	$	—

The investments in the deferred compensation plan are held in a "rabbi trust" and include mutual funds and cash equivalents for payment of non-qualified benefits for certain retired, terminated and active employees. These investments are recorded to prepaid expenses and other current assets or other non-current assets depending on their corresponding, anticipated distribution dates to recipients, which are reported in accrued expenses and other current liabilities or other long-term liabilities, respectively.

Derivative instruments, such as foreign currency forward contracts, are measured using the market approach on a recurring basis considering foreign currency spot rates and forward rates quoted by banks or foreign currency dealers and interest rates quoted by banks (Level 2). Fair values of interest rate swaps are measured using standard valuation models with inputs that can be derived from observable market transactions, including SOFR spot and forward rates (Level 2). Foreign currency contracts and interest rate swap agreements are classified in the Condensed Consolidated Balance Sheets as prepaid expenses and other non-current assets or accrued expenses and other long-term liabilities, depending on the respective instruments' favorable or unfavorable positions. See Note 8 - Derivatives and Hedging Activities.

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Segment Information

6 Months Ended

Dec. 31, 2023

Segment Reporting, Measurement Disclosures [Abstract]

Segment Information

Segment Information

The Company is a leading provider of technology solutions and services to customers in specialty technology markets. The Company has two reportable segments, based on technology type.

Specialty Technology Solutions Segment

The Specialty Technology Solutions segment includes the Company’s business in mobility and barcode, POS, payments, security and networking technologies. Mobility and barcode solutions include mobile computing, barcode scanners and imagers, radio frequency identification devices, barcode printing and related services. POS and payments solutions include POS systems, integrated POS software platforms, self-service kiosks including self-checkout, payment terminals and mobile payment devices. Security solutions include video surveillance and analytics, video management software and access control. Networking solutions include switching, routing and wireless products and software. The Company has business operations within this segment in the United States, Canada and Brazil.

Modern Communications & Cloud Segment

The Modern Communications & Cloud segment includes the Company’s business in communications and collaboration, connectivity and cloud services. Communications and collaboration solutions, delivered in the cloud, on-premise or hybrid, include voice, video, integration of communication platforms and contact center solutions. The Intelisys connectivity and cloud marketplace offers telecom, cable, Unified Communications as a Service (“UCaaS”), Contact Center as a Service (“CCaaS”), Infrastructure as a Service, Software-Defined Wide-Area Network and other cloud services. This segment includes SaaS and subscription services, which the Company offers using digital tools and platforms. The Company has business operations within this segment in the United States, Canada, Brazil and the UK.

Selected financial information for each business segment is presented below:

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands)
Sales:
Specialty Technology Solutions	$	520,651	$	627,548	$	1,030,222	$	1,203,878
Modern Communications & Cloud	364,141		383,693		730,876		751,176
	$	884,792	$	1,011,241	$	1,761,098	$	1,955,054
Depreciation and amortization:
Specialty Technology Solutions	$	2,897	$	2,758	$	5,654	$	5,462
Modern Communications & Cloud	3,593		3,738		7,334		7,385
Corporate	768		561		1,487		1,438
	$	7,258	$	7,057	$	14,475	$	14,285
Operating income (loss):
Specialty Technology Solutions	$	13,368	$	19,682	$	25,240	$	41,534
Modern Communications & Cloud	14,602		19,750		27,014		32,785
Corporate	(1,144)		—		(1,343)		—
	$	26,826	$	39,432	$	50,911	$	74,319
Capital expenditures:
Specialty Technology Solutions	$	(304)	$	(524)	$	(1,565)	$	(1,026)
Modern Communications & Cloud	(2,246)		(1,980)		(3,300)		(3,236)
	$	(2,550)	$	(2,504)	$	(4,865)	$	(4,262)
Sales by Geography Category:
United States and Canada	$	797,580	$	911,033	$	1,590,045	$	1,772,637
International	89,410		102,020		174,714		186,294
Less intercompany sales	(2,198)		(1,812)		(3,661)		(3,877)
	$	884,792	$	1,011,241	$	1,761,098	$	1,955,054

	December 31, 2023		June 30, 2023
	(in thousands)
Assets:
Specialty Technology Solutions	$	908,674	$	1,104,103
Modern Communications & Cloud	872,131		964,066
Corporate	—		—
	$	1,780,805	$	2,068,169
Property and equipment, net by Geography Category:
United States and Canada	$	24,703	$	27,323
International	11,843		10,056
	$	36,546	$	37,379

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Leases

6 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Leases

In accordance with Accounting Standards Codification ("ASC") 842, at contract inception the Company determines if a contract contains a lease by assessing whether the contract contains an identified asset and whether the Company has the ability to control the asset. The Company also determines if the lease meets the classification criteria for an operating lease versus a finance lease under ASC 842. Substantially all of the Company's leases are operating leases for real estate, warehouse and office equipment ranging in duration from 1 year to 10 years. The Company has elected not to record short-term operating

leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets. Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has finance leases for information technology equipment expiring through fiscal year 2028. Finance leases are recorded as property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The gross amount of the balances recorded related to finance leases is immaterial to the condensed consolidated financial statements at December 31, 2023 and the consolidated financial statements at June 30, 2023.

Operating lease right-of-use assets and lease liabilities are recognized at the commencement date based on the net present value of future minimum lease payments over the lease term. The Company generally is not able to determine the rate implicit in its leases and has elected to apply an incremental borrowing rate as the discount rate for the present value determination, which is based on the Company's cost of borrowings for the relevant terms of each lease and geographical economic factors. Certain operating lease agreements contain options to extend or terminate the lease. The lease term used is adjusted for these options when the Company is reasonably certain it will exercise the option. Operating lease expense is recognized on a straight-line basis over the lease term. Variable lease payments not based on a rate or index, such as costs for common area maintenance, are expensed as incurred. Further, the Company has elected the practical expedient to recognize all lease and non-lease components as a single lease component, where applicable.

The following table presents amounts recorded on the Condensed Consolidated Balance Sheets related to operating leases at December 31, 2023 and June 30, 2023:

		December 31, 2023		June 30, 2023
Operating leases	Balance Sheet location	(in thousands)
Operating lease right-of-use assets	Other non-current assets	$	10,586	$	12,539
Current operating lease liabilities	Accrued expenses and other current liabilities	$	3,877	$	4,355
Long-term operating lease liabilities	Other long-term liabilities	$	7,703	$	9,329

The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters and six months ended December 31, 2023 and 2022. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less.

	Quarter ended December 31,				Six months ended December 31,
	2023		2022		2023		2022
	(in thousands)
Operating lease cost	$	1,434	$	1,291	$	2,643	$	2,577
Variable lease cost	322		419		705		763
	$	1,756	$	1,710	$	3,348	$	3,340

Supplemental cash flow information related to the Company's operating leases for the six months ended December 31, 2023 and 2022 are presented in the table below:

	Six months ended
	December 31,
	2023		2022
	(in thousands)
Cash paid for amounts in the measurement of lease liabilities	$	2,793	$	2,697
Right-of-use assets obtained in exchange for lease obligations	232		286

The weighted-average remaining lease term and discount rate at December 31, 2023 are presented in the table below:

	December 31, 2023
Weighted-average remaining lease term	3.28 years
Weighted-average discount rate	4.53	%

The following table presents the maturities of the Company's operating lease liabilities at December 31, 2023:

	Operating leases
	(in thousands)
2024	$	2,372
2025	3,667
2026	3,088
2027	2,675
2028	632
Thereafter	—
Total future payments	12,434
Less: amounts representing interest	854
Present value of lease payments	$	11,580

Leases

Leases

In accordance with Accounting Standards Codification ("ASC") 842, at contract inception the Company determines if a contract contains a lease by assessing whether the contract contains an identified asset and whether the Company has the ability to control the asset. The Company also determines if the lease meets the classification criteria for an operating lease versus a finance lease under ASC 842. Substantially all of the Company's leases are operating leases for real estate, warehouse and office equipment ranging in duration from 1 year to 10 years. The Company has elected not to record short-term operating

leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets. Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has finance leases for information technology equipment expiring through fiscal year 2028. Finance leases are recorded as property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The gross amount of the balances recorded related to finance leases is immaterial to the condensed consolidated financial statements at December 31, 2023 and the consolidated financial statements at June 30, 2023.

Operating lease right-of-use assets and lease liabilities are recognized at the commencement date based on the net present value of future minimum lease payments over the lease term. The Company generally is not able to determine the rate implicit in its leases and has elected to apply an incremental borrowing rate as the discount rate for the present value determination, which is based on the Company's cost of borrowings for the relevant terms of each lease and geographical economic factors. Certain operating lease agreements contain options to extend or terminate the lease. The lease term used is adjusted for these options when the Company is reasonably certain it will exercise the option. Operating lease expense is recognized on a straight-line basis over the lease term. Variable lease payments not based on a rate or index, such as costs for common area maintenance, are expensed as incurred. Further, the Company has elected the practical expedient to recognize all lease and non-lease components as a single lease component, where applicable.

The following table presents amounts recorded on the Condensed Consolidated Balance Sheets related to operating leases at December 31, 2023 and June 30, 2023:

		December 31, 2023		June 30, 2023
Operating leases	Balance Sheet location	(in thousands)
Operating lease right-of-use assets	Other non-current assets	$	10,586	$	12,539
Current operating lease liabilities	Accrued expenses and other current liabilities	$	3,877	$	4,355
Long-term operating lease liabilities	Other long-term liabilities	$	7,703	$	9,329

The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters and six months ended December 31, 2023 and 2022. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less.

	Quarter ended December 31,				Six months ended December 31,
	2023		2022		2023		2022
	(in thousands)
Operating lease cost	$	1,434	$	1,291	$	2,643	$	2,577
Variable lease cost	322		419		705		763
	$	1,756	$	1,710	$	3,348	$	3,340

Supplemental cash flow information related to the Company's operating leases for the six months ended December 31, 2023 and 2022 are presented in the table below:

	Six months ended
	December 31,
	2023		2022
	(in thousands)
Cash paid for amounts in the measurement of lease liabilities	$	2,793	$	2,697
Right-of-use assets obtained in exchange for lease obligations	232		286

The weighted-average remaining lease term and discount rate at December 31, 2023 are presented in the table below:

	December 31, 2023
Weighted-average remaining lease term	3.28 years
Weighted-average discount rate	4.53	%

The following table presents the maturities of the Company's operating lease liabilities at December 31, 2023:

	Operating leases
	(in thousands)
2024	$	2,372
2025	3,667
2026	3,088
2027	2,675
2028	632
Thereafter	—
Total future payments	12,434
Less: amounts representing interest	854
Present value of lease payments	$	11,580

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Commitments and Contingencies

6 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company is, from time to time, party to lawsuits arising out of operations. Although there can be no assurance, based upon information known to the Company, the Company believes that any liability resulting from an adverse determination of such lawsuits would not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

During the Company's due diligence for the Network1 acquisition, several pre-acquisition contingencies were identified regarding various Brazilian federal and state tax exposures. The Company recorded indemnification receivables that are reported gross of the pre-acquisition contingency liabilities as the funds were escrowed as part of the acquisition. The amount available after the impact of foreign currency translation for future pre-acquisition contingency settlements or to be released to the sellers was $3.6 million and $3.4 million at December 31, 2023 and June 30, 2023.

The table below summarizes the balances and line item presentation of Network1's pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets at December 31, 2023 and June 30, 2023:

	December 31, 2023		June 30, 2023
	Network1
	(in thousands)
Assets
Prepaid expenses and other current assets	$	16	$	16
Other non-current assets	$	4,131	$	4,150
Liabilities
Accrued expenses and other current liabilities	$	16	$	16
Other long-term liabilities	$	4,131	$	4,150

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Income Taxes

6 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income taxes for the quarters and six months ended December 31, 2023 and 2022 have been included in the accompanying condensed consolidated financial statements using an estimated annual effective tax rate. In addition to applying the estimated annual effective tax rate to pre-tax income, the Company includes certain items treated as discrete events to arrive at an estimated overall tax provision. During the quarter ended December 31, 2023, a discrete net tax benefit of $3.8 million was recorded, which is primarily attributable to the sale of UK-based intY.

The Company’s effective tax rate of 18.3% and 18.6% for the quarter and six months ended December 31, 2023, differs from the current federal statutory rate of 21% primarily as a result of income derived from tax jurisdictions with varying income tax rates, discrete items, nondeductible expenses and state income taxes. The Company's effective tax rates were 28.9% and 27.3% for the quarter and six months ended December 31, 2022.

As of December 31, 2023, the Company is not permanently reinvested with respect to all earnings generated by foreign operations. The Company has determined that there is no material deferred tax liability for federal, state and withholding tax related to undistributed earnings. During the six months ended December 31, 2023, foreign subsidiaries did not repatriate cash to the United States. There is no certainty to the timing of any future distributions of such earnings to the U.S. in whole or in part.

The Company had approximately $1.2 million of total gross unrecognized tax benefits at December 31, 2023 and June 30, 2023. Of this total at December 31, 2023, approximately $1.0 million represents the amount of unrecognized tax benefits that are permanent in nature and, if recognized, would affect the annual effective tax rate. The Company does not believe that the total amount of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date.

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. At December 31, 2023 and June 30, 2023, the Company had approximately $1.2 million accrued for interest and penalties.

The Company conducts business globally and one or more of its subsidiaries files income tax returns in the U.S. federal, various state, local and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities in countries and states in which it operates. With certain exceptions, the Company is no longer subject to federal, state and local or non-U.S. income tax examinations by tax authorities for the years before June 30, 2018.

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Business Sale	6 Months Ended
	Dec. 31, 2023
Discontinued Operations and Disposal Groups [Abstract]
Business Sale	Business SaleOn December 19, 2023, the Company completed the sale of its UK-based intY business. The Company retained its CASCADE cloud services distribution platform which has been used to grow the Cisco and Microsoft subscription businesses in the United States and Brazil. Under the stock purchase agreement, the Company received proceeds of $18.0 million in cash for the sale, net of cash transferred. The business sale resulted in a $14.5 million gain on sale after considering the net assets sold. The impact of this sale was not material to the consolidated financial statements.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net income	$ 32,726	$ 15,432	$ 25,734	$ 24,042	$ 48,158	$ 49,776

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Insider Trading Arrangements	3 Months Ended
	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Business and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared by the Company’s management in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position at December 31, 2023 and June 30, 2023, the results of operations for the quarters and six months ended December 31, 2023 and 2022, the condensed consolidated statements of comprehensive income for the quarters and six months ended December 31, 2023 and 2022, the condensed consolidated statements of shareholders' equity for the quarters and six months ended December 31, 2023 and 2022 and the condensed consolidated statements of cash flows for the six months ended December 31, 2023 and 2022. The results of operations for the quarter and six months ended December 31, 2023 are not necessarily indicative of the results to be expected for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. Unless otherwise indicated, disclosures provided in the Notes pertain to continuing operations only.

Summary of Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies for the six months ended December 31, 2023 from the policies described in the notes to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2023. For a discussion of the Company’s significant accounting policies, please see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. The Company maintains zero-balance disbursement accounts at various financial institutions at which the Company does not maintain significant depository relationships. Due to the terms of the agreements governing these accounts, the Company generally does not have the right to offset outstanding checks written from these accounts against cash on hand, and the respective institutions are not legally obligated to honor the checks until sufficient funds are transferred to fund the checks.

Long-lived Assets

The Company presents depreciation expense and intangible amortization expense on the condensed consolidated income statements.

Recent Accounting Pronouncements

In July 2023, the Securities and Exchange Commission issued final rules that require new and enhanced disclosures on cybersecurity risk management, strategy, governance, and incident reporting. Under the final rules, companies must report material cybersecurity incidents within four business days of determining the incident is material on Form 8-K. As additional information about the material aspects of the previously reported incidents become available, a Form 8-K/A must be filed with the additional disclosures. These disclosure requirements on Form 8-K were effective beginning December 18, 2023. For fiscal years ending on or after December 15, 2023, companies must disclose their cybersecurity processes, management's role in cybersecurity governance, and cybersecurity oversight by the Board of Directors on Form 10-K.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. This ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. This ASU is applicable to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and subsequent interim periods, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU updates income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and is applicable to the Company’s fiscal year beginning July 1, 2025, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

The Company has reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on its consolidated financial statements as a result of future adoption.

Trade Accounts and Notes Receivable, Net

The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from customers’ failure to make payments on accounts receivable due to the Company. The Company has notes receivable with certain customers, which are included in “Accounts receivable, less allowance” in the Condensed Consolidated Balance Sheets.

Management determines the estimate of the allowance for doubtful accounts receivable by considering a number of factors, including: (i) historical experience, (ii) aging of the accounts receivable, (iii) specific information obtained by the Company on the financial condition and the current creditworthiness of its customers, (iv) the current economic and country-specific environment and (v) reasonable and supportable forecasts about collectability. Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model. Receivables that do not share risk characteristics are evaluated on an individual basis. Estimates of expected credit losses on trade receivables over the contractual life are recorded at inception and adjusted over the contractual life.

Revenue Recognition

The Company provides technology solutions and services from the world's leading suppliers of mobility, barcode, POS, payments, physical security, unified communications, collaboration, telecom and cloud services. This includes hardware, related accessories and device configuration as well as software licenses, professional services and hardware support programs.

In determining the appropriate amount of revenue to recognize, the Company applies the following five-step model: (i) identify contracts with customers; (ii) identify performance obligations in the contracts; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations per the contracts; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company recognizes revenue as control of products and services are transferred to customers, which is generally at the point of shipment. The Company delivers products to customers in several ways, including: (i) shipment from a Company warehouse, (ii) drop-shipment directly from the supplier, or (iii) electronic delivery for non-physical products.

Principal versus Agent Considerations

The Company is the principal for sales of all hardware and certain software and services. The Company considers itself the principal in those transactions where it has control of the product or service before it is transferred to the customer. The Company recognizes the principal-associated revenue and cost of goods sold on a gross basis.

The Company is the agent for third-party service contracts, including product warranties and supplier-hosted software. These service contracts are sold separately from the products, and the Company often serves as the agent for the contract on behalf of the original equipment manufacturer. The Company's responsibility is to arrange for the provision of the specified service by the original equipment manufacturer, and the Company does not control the specified service before it is transferred to the customer. Because the Company acts as an agent, revenue is recognized net of cost at the time of sale. The Intelisys business operates under an agency model.

Variable Considerations

For certain transactions, products are sold with a right of return and may also provide other rebates or incentives, which are accounted for as variable consideration. The Company estimates a returns allowance based on historical experience and reduces revenue accordingly. The Company estimates the amount of variable consideration for rebates and incentives by using the expected value to be given to the customer and reduces the revenue by those estimated amounts. These estimates are reviewed and updated as necessary at the end of each reporting period.

Contract Balances

The Company records contract assets and liabilities for payments received from customers in advance of services performed. These assets and liabilities are the result of the sales of the Company's self-branded warranty programs and other transactions where control has not yet passed to the customer. These amounts are immaterial to the consolidated financial statements for the periods presented.

Disaggregation of Revenue

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Trade Accounts and Notes Receivable, Net (Tables)

6 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Schedule of Changes in the Allowance for Doubtful Accounts

The changes in the allowance for doubtful accounts for the six months ended December 31, 2023 are set forth in the table below.

	June 30, 2023		Amounts Charged to Expense		Write-offs		Other (1)		December 31, 2023
	(in thousands)
Trade accounts and current notes receivable allowance	$	15,480	$	4,472	$	(1,197)	$	488	$	19,243

(1)"Other" amounts include recoveries and the effect of foreign currency fluctuations for the six months ended December 31, 2023.

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Revenue Recognition (Tables)

6 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following tables represent the Company's disaggregation of revenue:

	Quarter ended December 31, 2023
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service
Hardware, software and cloud (excluding Intelisys)	$	520,651	$	342,686	$	863,337
Intelisys connectivity and cloud	—		21,455		21,455
	$	520,651	$	364,141	$	884,792
	Six months ended December 31, 2023
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service:
Hardware, software and cloud (excluding Intelisys)	$	1,030,222	$	688,918	$	1,719,140
Intelisys connectivity and cloud	—		41,958		41,958
	$	1,030,222	$	730,876	$	1,761,098

	Quarter ended December 31, 2022
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service
Hardware, software and cloud (excluding Intelisys)	$	627,548	$	363,743	$	991,291
Intelisys connectivity and cloud	—		19,950		19,950
	$	627,548	$	383,693	$	1,011,241
	Six months ended December 31, 2022
	Specialty Technology Solutions		Modern Communications & Cloud		Total
			(in thousands)
Revenue by product/service:
Hardware, software and cloud (excluding Intelisys)	$	1,203,878	$	712,373	$	1,916,251
Intelisys connectivity and cloud	—		38,803		38,803
	$	1,203,878	$	751,176	$	1,955,054

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Earnings Per Share (Tables)

6 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands, except per share data)
Numerator:
Net income	$	32,726	$	25,734	$	48,158	$	49,776
Denominator:
Weighted-average shares, basic	25,035		25,287		24,961		25,244
Dilutive effect of share-based payments	299		215		274		210
Weighted-average shares, diluted	25,334		25,502		25,235		25,454
Net income per common share, basic	$	1.31	$	1.02	$	1.93	$	1.97
Net income per common share, diluted	$	1.29	$	1.01	$	1.91	$	1.96

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Dec. 31, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income, Net Of Tax

The components of accumulated other comprehensive loss, net of tax are as follows: 

	December 31, 2023		June 30, 2023
	(in thousands)
Foreign currency translation adjustment	$	(97,338)	$	(93,136)
Unrealized gain on hedged transaction, net of tax	2,120		3,515
Accumulated other comprehensive loss	$	(95,218)	$	(89,621)

Schedule of Other Comprehensive Loss, Tax

The tax effect of amounts in comprehensive loss reflect a tax (benefit) expense as follows:

	Quarter ended December 31,				Six months ended December 31,
	2023		2022		2023		2022
	(in thousands)
Tax (benefit) expense	$	(637)	$	166	$	(692)	$	580

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Goodwill and Other Identifiable Intangible Assets (Tables)

6 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in the Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the six months ended December 31, 2023, by reporting segment, are set forth in the table below.

	Specialty Technology Solutions		Modern Communications & Cloud		Total
	(in thousands)
Balance at June 30, 2023	$	16,370	$	200,336	$	216,706
Goodwill disposed upon business sale	—		(8,539)		(8,539)
Foreign currency translation adjustment	—		47		47
Balance at December 31, 2023	$	16,370	$	191,844	$	208,214

Schedule of Net Identifiable Intangible Assets

The following table shows changes in the amount recognized for net identifiable intangible assets for the six months ended December 31, 2023.

	Net Identifiable Intangible Assets
	(in thousands)
Balance at June 30, 2023	$	68,495
Intangibles disposed upon business sale	(14,927)
Amortization expense	(8,230)
Foreign currency translation adjustment	(25)
Balance at December 31, 2023	$	45,313

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Short-Term Borrowings and Long-Term Debt (Tables)

6 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of Debt

The following table presents the Company’s debt at December 31, 2023 and June 30, 2023.

	December 31, 2023		June 30, 2023
	(in thousands)
Current portion of long-term debt	$	7,857	$	6,915
Mississippi revenue bond, net of current portion	3,024		3,381
Senior secured term loan facility, net of current portion	136,875		140,625
Borrowings under revolving credit facility	20,878		178,980
Total debt	$	168,634	$	329,901

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Derivatives and Hedging Activities (Tables)

6 Months Ended

Dec. 31, 2023

General Discussion of Derivative Instruments and Hedging Activities [Abstract]

Schedule of Derivative Contracts and Changes in Underlying Value of the Foreign Currency Exposures

Summarized financial information related to these derivative contracts and changes in the underlying value of the foreign currency exposures included in the Condensed Consolidated Income Statements for the quarters and six months ended December 31, 2023 and 2022 are as follows:

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands)
Net foreign exchange derivative contract losses	$	1,025	$	871	$	658	$	1,309
Net foreign currency transactional and re-measurement (gains) losses	(596)		(524)		466		(39)
Net foreign currency exchange losses	$	429	$	347	$	1,124	$	1,270

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

The components of the cash flow hedge included in the Condensed Consolidated Statement of Comprehensive Income for the quarters and six months ended December 31, 2023 and 2022, are as follows:

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands)
Net interest income recognized as a result of interest rate swap	$	(903)	$	(345)	$	(1,781)	$	(313)
Unrealized (loss) gain in fair value of interest rate swap	(1,165)		349		(72)		2,847
Net (decrease) increase in accumulated other comprehensive income	(2,068)		4		(1,853)		2,534
Income tax effect	(521)		1		(458)		652
Net (decrease) increase in accumulated other comprehensive income, net of tax	$	(1,547)	$	3	$	(1,395)	$	1,882

Schedule of Derivative Instruments

The Company used the following derivative instruments at December 31, 2023 and June 30, 2023, reflected in its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above:

		December 31, 2023		June 30, 2023
	Balance Sheet Location	Fair Value  of Derivatives Designated  as Hedge Instruments	Fair Value  of Derivatives Not Designated as  Hedge Instruments	Fair Value  of Derivatives Designated as Hedge Instruments	Fair Value  of Derivatives Not Designated as Hedge Instruments
		(in thousands)
Derivative assets:
Foreign exchange contracts	Prepaid expenses and other current assets	—	—	—	$1
Foreign currency hedge	Prepaid expenses and other current assets	$27	—	$100	—
Interest rate swap agreement	Other non-current assets	$2,834	—	$4,687	—
Derivative liabilities:
Foreign exchange contracts	Accrued expenses and other current liabilities	—	$4	—	—

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at December 31, 2023:

	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)
	(in thousands)
Assets:
Deferred compensation plan investments, current and non-current portion	$	31,343	$	31,343	$	—
Interest rate swap agreement	2,834		—		2,834
Foreign currency hedge	27		—		27
Total assets at fair value	$	34,204	$	31,343	$	2,861
Liabilities:
Deferred compensation plan investments, current and non-current portion	$	31,343	$	31,343	$	—
Forward foreign currency exchange contracts	4		—		4
Total liabilities at fair value	$	31,347	$	31,343	$	4

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at June 30, 2023:

	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)
	(in thousands)
Assets:
Deferred compensation plan investments, current and non-current portion	$	28,209	$	28,209	$	—
Forward foreign currency exchange contracts	1		—		1
Foreign currency hedge	100		—		100
Interest rate swap agreement	4,687		—		4,687
Total assets at fair value	$	32,997	$	28,209	$	4,788
Liabilities:
Deferred compensation plan investments, current and non-current portion	$	28,229	$	28,229	$	—
Total liabilities at fair value	$	28,229	$	28,229	$	—

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Segment Information (Tables)

6 Months Ended

Dec. 31, 2023

Segment Reporting, Measurement Disclosures [Abstract]

Schedule of Financial Information by Segment

Selected financial information for each business segment is presented below:

	Quarter ended				Six months ended
	December 31,				December 31,
	2023		2022		2023		2022
	(in thousands)
Sales:
Specialty Technology Solutions	$	520,651	$	627,548	$	1,030,222	$	1,203,878
Modern Communications & Cloud	364,141		383,693		730,876		751,176
	$	884,792	$	1,011,241	$	1,761,098	$	1,955,054
Depreciation and amortization:
Specialty Technology Solutions	$	2,897	$	2,758	$	5,654	$	5,462
Modern Communications & Cloud	3,593		3,738		7,334		7,385
Corporate	768		561		1,487		1,438
	$	7,258	$	7,057	$	14,475	$	14,285
Operating income (loss):
Specialty Technology Solutions	$	13,368	$	19,682	$	25,240	$	41,534
Modern Communications & Cloud	14,602		19,750		27,014		32,785
Corporate	(1,144)		—		(1,343)		—
	$	26,826	$	39,432	$	50,911	$	74,319
Capital expenditures:
Specialty Technology Solutions	$	(304)	$	(524)	$	(1,565)	$	(1,026)
Modern Communications & Cloud	(2,246)		(1,980)		(3,300)		(3,236)
	$	(2,550)	$	(2,504)	$	(4,865)	$	(4,262)
Sales by Geography Category:
United States and Canada	$	797,580	$	911,033	$	1,590,045	$	1,772,637
International	89,410		102,020		174,714		186,294
Less intercompany sales	(2,198)		(1,812)		(3,661)		(3,877)
	$	884,792	$	1,011,241	$	1,761,098	$	1,955,054

Schedule of Reconciliation of Assets from Segment to Consolidated

	December 31, 2023		June 30, 2023
	(in thousands)
Assets:
Specialty Technology Solutions	$	908,674	$	1,104,103
Modern Communications & Cloud	872,131		964,066
Corporate	—		—
	$	1,780,805	$	2,068,169
Property and equipment, net by Geography Category:
United States and Canada	$	24,703	$	27,323
International	11,843		10,056
	$	36,546	$	37,379

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Leases (Tables)

6 Months Ended

Dec. 31, 2023

Leases [Abstract]

Schedule of Assets and Liabilities, Lessee

The following table presents amounts recorded on the Condensed Consolidated Balance Sheets related to operating leases at December 31, 2023 and June 30, 2023:

		December 31, 2023		June 30, 2023
Operating leases	Balance Sheet location	(in thousands)
Operating lease right-of-use assets	Other non-current assets	$	10,586	$	12,539
Current operating lease liabilities	Accrued expenses and other current liabilities	$	3,877	$	4,355
Long-term operating lease liabilities	Other long-term liabilities	$	7,703	$	9,329

Schedule of Lease, Cost

The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters and six months ended December 31, 2023 and 2022. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less.

	Quarter ended December 31,				Six months ended December 31,
	2023		2022		2023		2022
	(in thousands)
Operating lease cost	$	1,434	$	1,291	$	2,643	$	2,577
Variable lease cost	322		419		705		763
	$	1,756	$	1,710	$	3,348	$	3,340

Supplemental cash flow information related to the Company's operating leases for the six months ended December 31, 2023 and 2022 are presented in the table below:

	Six months ended
	December 31,
	2023		2022
	(in thousands)
Cash paid for amounts in the measurement of lease liabilities	$	2,793	$	2,697
Right-of-use assets obtained in exchange for lease obligations	232		286

The weighted-average remaining lease term and discount rate at December 31, 2023 are presented in the table below:

	December 31, 2023
Weighted-average remaining lease term	3.28 years
Weighted-average discount rate	4.53	%

Schedule of Lessee, Operating Lease, Liability, Maturity

The following table presents the maturities of the Company's operating lease liabilities at December 31, 2023:

	Operating leases
	(in thousands)
2024	$	2,372
2025	3,667
2026	3,088
2027	2,675
2028	632
Thereafter	—
Total future payments	12,434
Less: amounts representing interest	854
Present value of lease payments	$	11,580

XML

Commitments and Contingencies (Tables)

6 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Pre-acquisition Contingencies and Corresponding Indemnification Receivables

The table below summarizes the balances and line item presentation of Network1's pre-acquisition contingencies and corresponding indemnification receivables in the Company's Condensed Consolidated Balance Sheets at December 31, 2023 and June 30, 2023:

	December 31, 2023		June 30, 2023
	Network1
	(in thousands)
Assets
Prepaid expenses and other current assets	$	16	$	16
Other non-current assets	$	4,131	$	4,150
Liabilities
Accrued expenses and other current liabilities	$	16	$	16
Other long-term liabilities	$	4,131	$	4,150

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Business and Summary of Significant Accounting Policies (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2023 USD ($) segment	Dec. 31, 2022 USD ($)	Jun. 30, 2023 USD ($)
Cash and Cash Equivalents [Line Items]
Number of operating segments | segment			2
Depreciation expense related to selling, general and administrative costs	$ 2,964	$ 2,678	$ 5,759	$ 5,441
Amortization of intangible assets	4,037	4,150	8,230	8,391
Product
Cash and Cash Equivalents [Line Items]
Depreciation expense reported as part of cost of goods sold	300	$ 200	500	$ 500
Bank Overdrafts
Cash and Cash Equivalents [Line Items]
Outstanding checks	$ 8,000		$ 8,000		$ 8,000

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Trade Accounts and Notes Receivable, Net (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	$ 15,480
Amounts Charged to Expense	4,472	$ 33
Write-offs	(1,197)
Other	488
Ending Balance	$ 19,243

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Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Revenues	$ 884,792	$ 1,011,241	$ 1,761,098	$ 1,955,054
Hardware, software and cloud (excluding Intelisys)
Disaggregation of Revenue [Line Items]
Revenues	863,337	991,291	1,719,140	1,916,251
Intelisys connectivity and cloud
Disaggregation of Revenue [Line Items]
Revenues	21,455	19,950	41,958	38,803
Specialty Technology Solutions
Disaggregation of Revenue [Line Items]
Revenues	520,651	627,548	1,030,222	1,203,878
Specialty Technology Solutions | Hardware, software and cloud (excluding Intelisys)
Disaggregation of Revenue [Line Items]
Revenues	520,651	627,548	1,030,222	1,203,878
Specialty Technology Solutions | Intelisys connectivity and cloud
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Modern Communications & Cloud
Disaggregation of Revenue [Line Items]
Revenues	364,141	383,693	730,876	751,176
Modern Communications & Cloud | Hardware, software and cloud (excluding Intelisys)
Disaggregation of Revenue [Line Items]
Revenues	342,686	363,743	688,918	712,373
Modern Communications & Cloud | Intelisys connectivity and cloud
Disaggregation of Revenue [Line Items]
Revenues	$ 21,455	$ 19,950	$ 41,958	$ 38,803

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2023	Dec. 31, 2022
Numerator:
Net income	$ 32,726	$ 15,432	$ 25,734	$ 24,042	$ 48,158	$ 49,776
Denominator:
Weighted-average shares, basic (in shares)	25,035,000		25,287,000		24,961,000	25,244,000
Dilutive effect of share-based payments (in shares)	299,000		215,000		274,000	210,000
Weighted-average shares, diluted (in shares)	25,334,000		25,502,000		25,235,000	25,454,000
Net income per common share, basic (in dollars per share)	$ 1.31		$ 1.02		$ 1.93	$ 1.97
Net income per common share, diluted (in dollars per share)	$ 1.29		$ 1.01		$ 1.91	$ 1.96
Weighted average shares excluded from the computation of diluted earnings per share (in shares)	563,690		847,651		931,367	1,268,455

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Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023	Jun. 30, 2023	Sep. 30, 2022	Jun. 30, 2022
Accumulated Other Comprehensive Loss [Line Items]
Stockholders' equity attributable to parent	$ 953,601	$ 862,386	$ 953,601	$ 862,386	$ 915,253	$ 905,298	$ 827,004	$ 806,528
Tax (benefit) expense	(637)	166	(692)	580
Foreign currency translation adjustment
Accumulated Other Comprehensive Loss [Line Items]
Stockholders' equity attributable to parent	(97,338)		(97,338)			(93,136)
Unrealized gain on hedged transaction, net of tax
Accumulated Other Comprehensive Loss [Line Items]
Stockholders' equity attributable to parent	2,120		2,120			3,515
Accumulated other comprehensive loss
Accumulated Other Comprehensive Loss [Line Items]
Stockholders' equity attributable to parent	$ (95,218)	$ (102,572)	$ (95,218)	$ (102,572)	$ (96,358)	$ (89,621)	$ (109,976)	$ (104,638)

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Goodwill and Other Identifiable Intangible Assets (Changes in the Carrying Amount of Goodwill) (Details) $ in Thousands	6 Months Ended
	Dec. 31, 2023 USD ($)
Goodwill [Roll Forward]
Balance at June 30, 2023	$ 216,706
Goodwill disposed upon business sale	(8,539)
Foreign currency translation adjustment	47
Balance at December 31, 2023	208,214
Specialty Technology Solutions
Goodwill [Roll Forward]
Balance at June 30, 2023	16,370
Goodwill disposed upon business sale	0
Foreign currency translation adjustment	0
Balance at December 31, 2023	16,370
Modern Communications & Cloud
Goodwill [Roll Forward]
Balance at June 30, 2023	200,336
Goodwill disposed upon business sale	(8,539)
Foreign currency translation adjustment	47
Balance at December 31, 2023	$ 191,844

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Goodwill and Other Identifiable Intangible Assets (Net Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Finite-lived Intangible Assets [Roll Forward]
Balance at June 30, 2023			$ 68,495
Intangibles disposed upon business sale			(14,927)
Amortization expense	$ (4,037)	$ (4,150)	(8,230)	$ (8,391)
Foreign currency translation adjustment			(25)
Balance at December 31, 2023	$ 45,313		$ 45,313

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Short-Term Borrowings and Long-Term Debt (Schedule of Debt) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Debt Instrument [Line Items]
Current portion of long-term debt	$ 7,857	$ 6,915
Long-term debt	139,899	144,006
Borrowings under revolving credit facility	20,878	178,980
Total debt	168,634	329,901
Term Loan Facility
Debt Instrument [Line Items]
Long-term debt	136,875	140,625
Multi-Currency Revolving Credit Facility
Debt Instrument [Line Items]
Borrowings under revolving credit facility	20,878	178,980
Mississippi Revenue Bond
Debt Instrument [Line Items]
Long-term debt	$ 3,024	$ 3,381

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Short-Term Borrowings and Long-Term Debt (Narrative) (Details) - USD ($)			6 Months Ended
	Apr. 01, 2023	Sep. 28, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2023
Debt Instrument [Line Items]
Debt issuance costs, net			$ 1,400,000
Mississippi Revenue Bond
Debt Instrument [Line Items]
Percentage spread points on variable rate debt instrument	0.85%
Maximum time period of interest (in years)			10 years
Put option, exercisable period limitation (in days)			180 days
Percentage of principal due on exercise of put option			100.00%
Long-term debt, percentage bearing variable interest			6.29%		6.11%
SOFR | Mississippi Revenue Bond
Debt Instrument [Line Items]
Percentage spread points on variable rate debt instrument	0.10%
Multi-Currency Revolving Credit Facility, Amended Credit Agreement
Debt Instrument [Line Items]
Line of credit facility, expiration period		5 years
Borrowing capacity under credit facility		$ 350,000,000
Line of credit facility, accordion feature, higher borrowing capacity option		250,000,000
Letters of credit outstanding			$ 0		$ 0
Debt issuance costs, gross		$ 1,400,000
Amount of unrestricted domestic cash			$ 30,000,000
Percentage of spread in effect Interest rate			1.25%
Line of credit facility, unused capacity, commitment fee percentage			0.20%
Average daily balance on revolving credit facility			$ 138,700,000	$ 219,500,000
Line of credit facility, remaining borrowing capacity			$ 329,100,000		$ 171,000,000
Effective interest rate			6.70%		6.74%
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Minimum
Debt Instrument [Line Items]
Percentage spread points on variable rate debt instrument			1.00%
Line of credit facility, interest coverage ratio			3.00
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Maximum
Debt Instrument [Line Items]
Percentage spread points on variable rate debt instrument			1.75%
Line of credit facility, leverage ratio			3.50
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | SOFR
Debt Instrument [Line Items]
Percentage spread points on variable rate debt instrument			0.10%
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | SOFR | Minimum
Debt Instrument [Line Items]
Percentage spread points on variable rate debt instrument			1.00%
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | SOFR | Maximum
Debt Instrument [Line Items]
Percentage spread points on variable rate debt instrument			1.75%
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Alternate Base Rate Loans
Debt Instrument [Line Items]
Percentage spread points on variable rate debt instrument			0.25%
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Alternate Base Rate Loans | Minimum
Debt Instrument [Line Items]
Percentage spread points on variable rate debt instrument			0.00%
Multi-Currency Revolving Credit Facility, Amended Credit Agreement | Alternate Base Rate Loans | Maximum
Debt Instrument [Line Items]
Percentage spread points on variable rate debt instrument			0.75%
Term Loan Facility
Debt Instrument [Line Items]
Line of credit facility, expiration period		5 years
Borrowing capacity under credit facility		$ 150,000,000
Letter of Credit
Debt Instrument [Line Items]
Letters of credit outstanding		$ 50,000,000

XML

Derivatives and Hedging Activities (Narrative) (Details) - USD ($)	Dec. 31, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 28, 2022
Foreign exchange contracts
Derivative [Line Items]
Derivative, notional amount	$ 27,300,000	$ 34,300,000
Interest rate swap agreement
Derivative [Line Items]
Derivative, notional amount				$ 100,000,000
Interest Rate Swap, Maturing April 30, 2024
Derivative [Line Items]
Derivative, notional amount				50,000,000
Interest Rate Swap, Maturing April 30, 2026
Derivative [Line Items]
Derivative, notional amount				$ 50,000,000
Interest Rate Swap, Maturing March 31, 2028
Derivative [Line Items]
Derivative, notional amount			$ 25,000,000

XML

Derivatives and Hedging Activities (Derivative Contracts and Changes in Underlying Value of the Foreign Currency Exposures) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
General Discussion of Derivative Instruments and Hedging Activities [Abstract]
Net foreign exchange derivative contract losses	$ 1,025	$ 871	$ 658	$ 1,309
Net foreign currency transactional and re-measurement (gains) losses	(596)	(524)	466	(39)
Net foreign currency exchange losses	$ 429	$ 347	$ 1,124	$ 1,270

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Derivatives and Hedging Activities (Schedule of Cash Flow Hedge Included in Accumulated Other Comprehensive Income (Loss), Net of Income Taxes) (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2023	Dec. 31, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Net (decrease) increase in accumulated other comprehensive income, net of tax	$ (1,547)	$ 153	$ 3	$ 1,879	$ (1,395)	$ 1,882
Interest rate swap agreement
Derivative Instruments, Gain (Loss) [Line Items]
Net interest income recognized as a result of interest rate swap	(903)		(345)		(1,781)	(313)
Unrealized (loss) gain in fair value of interest rate swap	(1,165)		349		(72)	2,847
Net (decrease) increase in accumulated other comprehensive income	(2,068)		4		(1,853)	2,534
Income tax effect	(521)		1		(458)	652
Net (decrease) increase in accumulated other comprehensive income, net of tax	$ (1,547)		$ 3		$ (1,395)	$ 1,882

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Derivatives and Hedging Activities (Derivative Instruments) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Foreign exchange contracts | Prepaid expenses and other current assets | Fair Value  of Derivatives Designated  as Hedge Instruments
Derivatives, Fair Value [Line Items]
Derivative assets	$ 0	$ 0
Foreign exchange contracts | Prepaid expenses and other current assets | Fair Value  of Derivatives Not Designated as  Hedge Instruments
Derivatives, Fair Value [Line Items]
Derivative assets	0	1
Foreign exchange contracts | Accrued expenses and other current liabilities | Fair Value  of Derivatives Designated  as Hedge Instruments
Derivatives, Fair Value [Line Items]
Derivative liabilities	0	0
Foreign exchange contracts | Accrued expenses and other current liabilities | Fair Value  of Derivatives Not Designated as  Hedge Instruments
Derivatives, Fair Value [Line Items]
Derivative liabilities	4	0
Foreign currency hedge | Prepaid expenses and other current assets | Fair Value  of Derivatives Designated  as Hedge Instruments
Derivatives, Fair Value [Line Items]
Derivative assets	27	100
Foreign currency hedge | Prepaid expenses and other current assets | Fair Value  of Derivatives Not Designated as  Hedge Instruments
Derivatives, Fair Value [Line Items]
Derivative assets	0	0
Interest rate swap agreement | Other non-current assets | Fair Value  of Derivatives Designated  as Hedge Instruments
Derivatives, Fair Value [Line Items]
Derivative assets	2,834	4,687
Interest rate swap agreement | Other non-current assets | Fair Value  of Derivatives Not Designated as  Hedge Instruments
Derivatives, Fair Value [Line Items]
Derivative assets	$ 0	$ 0

XML

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Foreign exchange contracts
Assets:
Derivative asset		$ 1
Quoted prices in active markets (Level 1) | Foreign exchange contracts
Assets:
Derivative asset		0
Significant other observable inputs (Level 2) | Foreign exchange contracts
Assets:
Derivative asset		1
Fair Value, Recurring
Assets:
Deferred compensation plan investments, current and non-current portion	$ 31,343	28,209
Total assets at fair value	34,204	32,997
Liabilities:
Deferred compensation plan investments, current and non-current portion	31,343	28,229
Total liabilities at fair value	31,347	28,229
Fair Value, Recurring | Foreign exchange contracts
Liabilities:
Forward foreign currency exchange contracts	4
Fair Value, Recurring | Interest rate swap agreement
Assets:
Derivative asset	2,834	4,687
Fair Value, Recurring | Foreign currency hedge
Assets:
Derivative asset	27	100
Fair Value, Recurring | Quoted prices in active markets (Level 1)
Assets:
Deferred compensation plan investments, current and non-current portion	31,343	28,209
Total assets at fair value	31,343	28,209
Liabilities:
Deferred compensation plan investments, current and non-current portion	31,343	28,229
Total liabilities at fair value	31,343	28,229
Fair Value, Recurring | Quoted prices in active markets (Level 1) | Foreign exchange contracts
Liabilities:
Forward foreign currency exchange contracts	0
Fair Value, Recurring | Quoted prices in active markets (Level 1) | Interest rate swap agreement
Assets:
Derivative asset	0	0
Fair Value, Recurring | Quoted prices in active markets (Level 1) | Foreign currency hedge
Assets:
Derivative asset	0	0
Fair Value, Recurring | Significant other observable inputs (Level 2)
Assets:
Deferred compensation plan investments, current and non-current portion	0	0
Total assets at fair value	2,861	4,788
Liabilities:
Deferred compensation plan investments, current and non-current portion	0	0
Total liabilities at fair value	4	0
Fair Value, Recurring | Significant other observable inputs (Level 2) | Foreign exchange contracts
Liabilities:
Forward foreign currency exchange contracts	4
Fair Value, Recurring | Significant other observable inputs (Level 2) | Interest rate swap agreement
Assets:
Derivative asset	2,834	4,687
Fair Value, Recurring | Significant other observable inputs (Level 2) | Foreign currency hedge
Assets:
Derivative asset	$ 27	$ 100

XML

Segment Information (Narrative) (Details)	6 Months Ended
	Dec. 31, 2023 segment
Segment Reporting, Measurement Disclosures [Abstract]
Number of reportable segments	2

XML

Segment Information (Financial Information by Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Segment Reporting Information [Line Items]
Sales	$ 884,792	$ 1,011,241	$ 1,761,098	$ 1,955,054
Depreciation and amortization	7,258	7,057	14,475	14,285
Operating income (loss)	26,826	39,432	50,911	74,319
Capital expenditures	(2,550)	(2,504)	(4,865)	(4,262)
Specialty Technology Solutions
Segment Reporting Information [Line Items]
Sales	520,651	627,548	1,030,222	1,203,878
Modern Communications & Cloud
Segment Reporting Information [Line Items]
Sales	364,141	383,693	730,876	751,176
Operating Segments | Specialty Technology Solutions
Segment Reporting Information [Line Items]
Sales	520,651	627,548	1,030,222	1,203,878
Depreciation and amortization	2,897	2,758	5,654	5,462
Operating income (loss)	13,368	19,682	25,240	41,534
Capital expenditures	(304)	(524)	(1,565)	(1,026)
Operating Segments | Modern Communications & Cloud
Segment Reporting Information [Line Items]
Sales	364,141	383,693	730,876	751,176
Depreciation and amortization	3,593	3,738	7,334	7,385
Operating income (loss)	14,602	19,750	27,014	32,785
Capital expenditures	(2,246)	(1,980)	(3,300)	(3,236)
Corporate
Segment Reporting Information [Line Items]
Depreciation and amortization	768	561	1,487	1,438
Operating income (loss)	(1,144)	0	(1,343)	0
Reportable Geographical Components | United States and Canada
Segment Reporting Information [Line Items]
Sales	797,580	911,033	1,590,045	1,772,637
Reportable Geographical Components | International
Segment Reporting Information [Line Items]
Sales	89,410	102,020	174,714	186,294
Geography Eliminations
Segment Reporting Information [Line Items]
Sales	$ (2,198)	$ (1,812)	$ (3,661)	$ (3,877)

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Segment Information (Assets By Segment) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Segment Reporting Information [Line Items]
Assets	$ 1,780,805	$ 2,068,169
Property and equipment, net by Geography Category	36,546	37,379
United States and Canada
Segment Reporting Information [Line Items]
Property and equipment, net by Geography Category	24,703	27,323
International
Segment Reporting Information [Line Items]
Property and equipment, net by Geography Category	11,843	10,056
Continuing Operations | Corporate
Segment Reporting Information [Line Items]
Assets	0	0
Continuing Operations | Specialty Technology Solutions | Operating Segments
Segment Reporting Information [Line Items]
Assets	908,674	1,104,103
Continuing Operations | Modern Communications & Cloud | Operating Segments
Segment Reporting Information [Line Items]
Assets	$ 872,131	$ 964,066

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Leases (Narrative) (Details)	Dec. 31, 2023
Lessee, Lease, Description [Line Items]
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Property and equipment, net
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued expenses and other current liabilities
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other long-term liabilities
Minimum
Lessee, Lease, Description [Line Items]
Lease term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Lease term	10 years

XML

Leases (Supplemental Balance Sheet Information) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Leases [Abstract]
Operating lease right-of-use assets	$ 10,586	$ 12,539
Current operating lease liabilities	3,877	4,355
Long-term operating lease liabilities	$ 7,703	$ 9,329
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other non-current assets	Other non-current assets
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued expenses and other current liabilities	Accrued expenses and other current liabilities
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other long-term liabilities	Other long-term liabilities

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Leases (Schedule of Lease Cost) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Operating lease cost	$ 1,434	$ 1,291	$ 2,643	$ 2,577
Variable lease cost	322	419	705	763
Total cost	$ 1,756	$ 1,710	$ 3,348	$ 3,340

XML

Leases (Supplemental Cash Flow Information) (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Cash paid for amounts in the measurement of lease liabilities	$ 2,793	$ 2,697
Right-of-use assets obtained in exchange for lease obligations	$ 232	$ 286

XML

Leases (Weighted Average Remaining Term and Discount Rate) (Details)	Dec. 31, 2023
Leases [Abstract]
Weighted-average remaining lease term (in years)	3 years 3 months 10 days
Weighted-average discount rate	4.53%

XML

Leases (Maturities of Operating Lease Liabilities) (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Leases [Abstract]
2024	$ 2,372
2025	3,667
2026	3,088
2027	2,675
2028	632
Thereafter	0
Total future payments	12,434
Less: amounts representing interest	854
Present value of lease payments	$ 11,580

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Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions	Dec. 31, 2023	Jun. 30, 2023
Network1
Other Commitments [Line Items]
Cash held in escrow	$ 3.6	$ 3.4

XML

Commitments and Contingencies (Schedule of Pre-acquisition Contingencies and Corresponding Indemnification Receivables) (Details) - Network1 - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Assets
Prepaid expenses and other current assets	$ 16	$ 16
Other non-current assets	4,131	4,150
Liabilities
Accrued expenses and other current liabilities	16	16
Other long-term liabilities	$ 4,131	$ 4,150

XML

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Discrete net tax benefit	$ 3.8
Effective income tax rate	18.30%	28.90%	18.60%	27.30%
Unrecognized tax benefits	$ 1.2		$ 1.2		$ 1.2
Unrecognized tax benefits that would impact effective tax rate if recognized	1.0		1.0
Income tax penalties and interest accrued	$ 1.2		$ 1.2		$ 1.2

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Business Sale (Details) - Discontinued Operations, Held-for-sale or Disposed of by Sale - UK-based intY Business $ in Millions	Dec. 19, 2023 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash payment received	$ 18.0
Gain (loss) on disposal group	$ 14.5