International sales fell 8.6% year on year in Q3 at distributor ScanSource. This dragged the global result into negative territory, even though it represents around a quarter of total revenues; margins are rising, however. Borrowings under its revolving credit facility rose sharply to $343m from $244m last year.
“We are pleased to continue to grow profits faster than sales, despite sales below our forecast due to a lower volume of big deals,” said Mike Baur, Chairman and CEO, ScanSource, Inc. “We are executing on our strategic plan to drive growth at higher-value margins with more recurring revenues for our sales partners.”
For the third quarter of fiscal year 2019, net sales totaled $893.4m, which is 0.3% lower than the prior year quarter. Organic sales, which exclude the impact of foreign currency translation and recent acquisitions, grew 2% year-over-year with growth in both worldwide segments. Operating income increased to $18.8m and non-GAAP operating income increased 7% to $29.7m, driven by higher gross profit and operating margins.
