SCANSOURCE REPORTS THIRD QUARTER 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 third quarter ended March 31, 2008.

QE 3/31/08 capsule:
Net sales $514.4 million
Net income $11.0 million
Diluted EPS $0.42 per share

“We were disappointed with our results for the quarter primarily due to a significant drop in our Catalyst Telecom communications business. In addition, our international segment’s revenue grew at a slower rate than expected and our gross profit margins dropped considerably,” said Mike Baur, CEO of ScanSource, Inc. “However, our North America barcoding and point-of-sale business, ScanSource Security, and ScanSource Communications had good sales growth and market share gains in the March quarter.”

For the quarter ended March 31, 2008, net sales increased 4% to $514.4 million compared to $492.7 million for the quarter ended March 31, 2007. Quarterly operating income increased 10% to $19.0 million from $17.2 million for the comparable quarter in 2007. Our effective tax rate for the quarter was 38.8% compared to 34.6% for the prior year. Net income increased 10% to $11.0 million for the quarter ended March 31, 2008 versus $10.1 million for the quarter ended March 31, 2007. Diluted earnings per share increased 11% to $0.42 per share compared to $0.38 in the prior year quarter.

The comparable prior year quarter and fiscal year-to-date periods were impacted by expenditures related to our Special Committee’s review of the Company’s stock option grant practices and related matters. Such expenses were immaterial in the current quarter which coincides with the completion of the United States Securities and Exchange Commission’s investigation of the Company’s historical stock option grant practices, as previously announced in a press release dated January 24, 2008. When adjusted to exclude legal and accounting costs of third party providers relating to this review for the comparable period, net income was $11.0 million for the quarter ended March 31, 2008 versus $12.0 million for the quarter ended March 31, 2007, a decrease of 8%, and diluted earnings per share decreased 9% to $0.42 per share compared to $0.46 per share in the prior year quarter. Supplemental schedules have been included to show this reconciliation for the quarter and year-to-date periods ended March 31, 2008 and 2007.

Forecast for Next Quarter
The Company announced its revenue forecast for the fourth quarter of fiscal 2008. ScanSource expects net revenues for the June 2008 quarter could range from $540 million to $560 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 the Securities and Exchange Commission.

About ScanSource, Inc.
ScanSource, Inc. {NASDAQ:SCSC} is a leading international distributor of specialty technology products. The Company markets specialty technologies through four sales units: ScanSource POS and Barcoding [automatic identification and data capture (AIDC) and point-of-sale (POS) products]; Catalyst Telecom (Avaya communications products); ScanSource Communications (video conferencing, telephony and communications products); and ScanSource Security (electronic security products).

ScanSource, Inc. serves the North America, Latin America and Europe markets. 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.