SCANSOURCE REPORTS SECOND 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 second quarter ended December 31, 2008.

Quarter End 12/31/08 capsule:
Net sales $477 million
Net income $13.5 million
Diluted EPS $0.51 per share

“Customers in all our business segments experienced less demand for their products and services due to the global economic crisis,” said Mike Baur, CEO, ScanSource, Inc. “In spite of these lower sales results, we achieved higher profitability than expected.”

For the quarter ended December 31, 2008, net sales decreased 14% to $477 million compared to $553 million for the quarter ended December 31, 2007. Quarterly operating income decreased 27.7% to $18.4 million from $25.4 million for the comparable prior year quarter. Our effective tax rate for the quarter was 34.8%, compared to 37.7% for the prior year quarter. Net income decreased 12.5% to $13.5 million for the quarter ended December 31, 2008 versus $15.5 million for the quarter ended December 31, 2007. It should be noted that during the current quarter, the Company settled a legal claim against a former service provider, which resulted in a $3.5 million recovery ($2.2 million after tax or $0.08 per diluted share) that was recorded as Other Income in the accompanying condensed consolidated income statement.

Forecast for Next Quarter
The Company announced its revenue forecast for the third quarter of fiscal 2009. ScanSource expects net revenues for the March 2009 quarter could range from $450 million to $470 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 including but not limited to macroeconomic circumstances that could impact our business, such as currency fluctuations, continued adverse capital and credit market conditions and a prolonged economic downturn. 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, 2008 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 physical 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.