ScanSource (SCSC) 8-K Scansource Reports Third Quarter Results

FOR IMMEDIATE RELEASE

Contact:	Jeffery A. Bryson
	VP of Investor Relations
	ScanSource, Inc.
	864 286-4305

Exhibit 99.1

SCANSOURCE REPORTS THIRD QUARTER RESULTS

*Sales increase 29% to a record $294 million

GREENVILLE, SC—April 22, 2004—ScanSource, Inc. (Nasdaq:SCSC), a leading international distributor of AIDC (automatic identification and data capture), POS (point of sale) and telephony products for the reseller market, today announced financial results for its third fiscal quarter ended March 31, 2004.

For the quarter ended March 31, 2004, net sales increased 29% to $293.6 million compared to $227.5 million for the quarter ended March 31, 2003. “North America sales were stronger than expected this quarter, led by some large deals in point of sale (POS) products and significant growth in our Catalyst Telecom unit,” said Mike Baur, President and CEO of ScanSource. “We believe that most of the sales growth was due to our increasing market share, and some growth came from industry expansion tied to IT demand.”

For the quarter ended March 31, 2004, operating income increased 53% to $13.1 million from $8.6 million for the comparable quarter in 2003. Net income increased 81% to $8.2 million for the quarter ended March 31, 2004 versus $4.5 million for the quarter ended March 31, 2003. Diluted earnings per share increased 75% to $0.63 per share, compared to $0.36 in the prior year quarter.

ScanSource Reports Third Quarter Results

Forecast for Next Quarter

The Company announced its financial forecast for the fourth quarter of fiscal 2004. ScanSource expects net revenues for the June 2004 quarter could range from $280 million to $300 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 such a difference, see the Company’s annual report on Form 10K filed with the Securities and Exchange Commission.

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ScanSource Reports Third Quarter Results

About ScanSource

ScanSource, Inc. is a leading international distributor of specialty technology products, including automatic identification and data capture (AIDC) and point-of-sale (POS) products through its ScanSource sales unit; Avaya voice, data and converged communications products through its Catalyst Telecom sales unit; and communications products from Intel and NEC through its Paracon sales unit.

The Company serves the North America marketplace and has an international segment which sells AIDC and POS products in Latin America and Europe. Founded in 1992, the Company markets products from more than 80 technology manufacturers to over 15,000 value-added technology resellers and is committed to empowering them with tools and services designed to help them grow. For more information, call the toll-free sales telephone number at 800.944.2432 or visit www.scansource.com.

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ScanSource Reports Third Quarter Results

SCANSOURCE, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

	March 31, 2004 (unaudited)		June 30, 2003
Assets
Current Assets
Cash	$	3,245	$	2,565
Trade & notes receivable, net		151,595		129,105
Other receivables		2,918		4,420
Inventories		183,808		152,261
Prepaid taxes		138		870
Prepaid expenses and other assets		1,685		869
Deferred income taxes		9,901		9,498
Total current assets		353,290		299,588
Property and equipment, net		25,115		27,270
Goodwill		9,978		9,841
Other assets, including identifiable intangible assets		9,204		7,648
Total assets	$	397,587	$	344,347
Liabilities and Shareholders’ Equity
Current Liabilities
Current portion of long-term debt	$	850	$	914
Subsidiary lines of credit		560		0
Accounts payable		163,937		151,389
Accrued expenses and other		16,039		12,308
Total current liabilities		181,386		164,611
Deferred tax liability		1,492		1,673
Long term debt		6,804		7,385
Borrowings under revolving credit facility		29,955		18,118
Total liabilities		219,637		191,787
Minority interest		1,027		1,673
Shareholders’ Equity
Common stock		60,969		56,706
Retained earnings		112,274		91,306
Accumulated other comprehensive income		3,680		2,875
Total shareholders’ equity		176,923		150,887
Total liabilities and shareholders’ equity	$	397,587	$	344,347

ScanSource Reports Third Quarter Results

SCANSOURCE, INC.

CONSOLIDATED INCOME STATEMENTS (UNAUDITED)

(In thousands, except per share data)

	Quarter ended March 31,						Nine months ended March 31,
	2004			2003			2004			2003
Net sales	$	293,574		$	227,452		$	859,014		$	738,172
Cost of goods sold		260,603			202,029			764,296			655,644
Gross profit		32,971			25,423			94,718			82,528
Selling, general and admin. expenses		19,828			16,815			61,032			52,959
Operating income		13,143			8,608			33,686			29,569
Other expense (income):
Interest expense		229			453			856			1,702
Interest income		(141	)		(327	)		(387	)		(913	)
Other (income) expense		(61	)		104			(290	)		152
Other expense, net		27			230			179			941
Income before income taxes and minority interest		13,116			8,378			33,507			28,628
Provision for income taxes		4,912			3,923			12,436			12,077
Income before minority interest		8,204			4,455			21,071			16,551
Minority interest in income (loss) of consolidated subsidiaries, net of income taxes		(17	)		(94	)		103			189
Net income	$	8,221		$	4,549		$	20,968		$	16,362
Per share data:
Basic earnings per share:
Net income	$	0.65		$	0.37		$	1.68		$	1.37
Weighted-average shares outstanding		12,603			12,171			12,459			11,939
Diluted earnings per share:
Net income	$	0.63		$	0.36		$	1.63		$	1.31
Weighted-average shares outstanding		13,095			12,500			12,833			12,407