SCANSOURCE REPORTS FOURTH QUARTER AND YEAR END RESULTS

ScanSource, Inc. (NASDAQ:SCSC), a leading international distributor of AIDC (automatic identification and data capture), point of sale, communications and electronic security products for the reseller market, today announced complete financial results for its fourth quarter and fiscal year ended June 30, 2008.

QE 6/30/08 capsule:
Net sales $554.0 million
Net income $14.5 million
Diluted EPS $0.54 per share

“We were very pleased with our record results, especially after a challenging March quarter,” said Mike Baur, CEO, ScanSource, Inc. “In North America we achieved very good results in the AIDC/POS, ScanSource Communications and ScanSource Security sales units. Our International segment also delivered good results after resolving a key vendor issue from last quarter.”

For the quarter ended June 30, 2008, net sales increased 6% to $554.0 million compared to $524.3 million for the quarter ended June 30, 2007. Quarterly operating income increased 17% to $24.2 million from $20.7 million for the comparable quarter in 2007. The effective tax rate was 39% for the quarters ended June 30, 2008 and 2007, respectively. Net income increased 28% to $14.5 million for the quarter ended June 30, 2008 versus $11.3 million for the quarter ended June 30, 2007. Diluted earnings per share increased 26% to $0.54 per share compared to $0.43 in the prior year quarter.

For the year ended June 30, 2008, net sales increased 9% to $2.18 billion compared to $1.99 billion for the prior year. Fiscal year operating income increased 25% to $94.0 million from $75.3 million for the prior year ended June 30, 2007. The effective tax rate for the year was 38.3% compared to 37.8% for the prior year. Net income increased 31% to $55.6 million compared to $42.6 million the prior year. Diluted earnings per share increased 29% to $2.10 compared to $1.63 in the prior year.

The comparable prior year quarter and fiscal year-to-date periods were impacted by expenditures related to the Company’s Special Committee review of its stock option grant practices and related matters. There were no such expenses in the current quarter, and when adjusted to exclude legal and accounting costs of third party providers relating to this review for the comparable period, net income was $14.5 million for the quarter ended June 30, 2008 versus on a non-GAAP basis $12.5 million for the quarter ended June 30, 2007, an increase of 16%. Excluding such costs for the comparable fiscal year-end periods, non-GAAP net income was $56.3 million for the fiscal year ended June 30, 2008 versus $48.8 million for the same prior year period, an increase of 15%. Diluted earnings per share increased 13% to $0.54 per share for the quarter ended June 30, 2008 compared to a non-GAAP $0.48 per share in the prior year quarter. Compared on a fiscal year-over-year basis, non-GAAP diluted earnings per share increased 15% to $2.13 per share for the fiscal year ended June 30, 2008 versus $1.86 for the same period in the prior year. Supplemental schedules have been included to show this reconciliation for the quarter and fiscal year periods ended June 30, 2008 and 2007, respectively.

Forecast for Next Quarter
The Company announced its revenue forecast for the first quarter of fiscal 2009. ScanSource expects net revenues for the September 2008 quarter could range from $530 million to $550 million.

Safe Harbor Statement
This news release contains comments that are “forward looking” statements that involve risks and uncertainties; these statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Any number of important factors could cause actual results to differ materially from anticipated results. For more information concerning factors that could cause actual results to differ from anticipated results, see the Company’s annual report on Form 10-K for the year ended June 30, 2007 filed with, and the Company’s annual report on Form 10-K for the year ended June 30, 2008 to be filed with, the Securities and Exchange Commission.

About ScanSource, Inc.
ScanSource, Inc. {NASDAQ:SCSC} is a leading international distributor of specialty technology products, consisting of seven sales units in North America, Latin America and Europe.

ScanSource POS and Barcoding in North America, Latin America and Europe delivers AIDC and POS solutions; Catalyst Telecom in the U.S. and ScanSource Communications in North America and Europe, provide voice, video and converged communications equipment; and ScanSource Security in North America offers electronic security solutions. Founded in 1992, the company ranks #901 on the Fortune 1000. For more information, call the toll-free sales telephone number at 800.944.2432 or visit www.scansourceinc.com.