ScanSource (SCSC) 8-K Scansource Reports Record First Quarter

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:	Richard P. Cleys
	VP and CFO
	ScanSource, Inc.
	864 286-4358

SCANSOURCE REPORTS RECORD FIRST QUARTER

SALES RESULTS

* First quarter sales increase 12% to $553.7 million

GREENVILLE, SC—October 25, 2007—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 first quarter ended September 30, 2007.

QE 9/30/07 capsule:
Net sales	$	553.7 million
Net income	$	14.7 million
Diluted EPS	$	0.56 per share

“The first quarter record sales results reflect excellent execution, year over year, in all AIDC/POS, Security and Communications business units,” said Mike Baur, CEO of ScanSource. “Key highlights for the quarter include the continued growth from our International POS and barcoding team during a seasonally slow quarter and better than expected results from our Catalyst communications team.”

ScanSource Reports Record First Quarter Sales Results

For the quarter ended September 30, 2007, net sales increased 12% to $553.7 million compared to $496.2 million for the quarter ended September 30, 2006. Quarterly operating income increased 18% to $25.4 million from $21.5 million for the comparable quarter in September 2006. Our effective tax rate for the quarter was 38.0% compared to 38.4% for the prior year. Net income increased 18% to $14.7 million for the quarter ended September 30, 2007 versus $12.5 million for the quarter ended September 30, 2006. Diluted earnings per share increased 17% to $0.56 per share compared to $0.48 in the prior year quarter. When adjusted to exclude legal and accounting costs of third party providers relating to our Special Committee’s review of the Company’s stock option grant practices, net income for the September 2007 quarter increased 21% versus the prior year quarter.

Forecast for Next Quarter

The Company announced its revenue forecast for the second quarter of fiscal 2008. ScanSource expects net revenues for the December 2007 quarter could range from $550 million to $570 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.

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ScanSource Reports Record First Quarter Sales Results

About ScanSource

ScanSource, Inc. is a leading international distributor of specialty technology products. The Company markets specialty technologies through five sales units: ScanSource [automatic identification and data capture (AIDC) and point-of-sale (POS) products]; Catalyst Telecom (Avaya communications products); Paracon (communications products); T2 Supply (video conferencing and telephone products); and ScanSource Security Distribution (electronic security products).

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 ranks #956 on the Fortune 1000. For more information, call the toll-free sales telephone number at 800.944.2432 or visit www.scansourceinc.com.

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ScanSource Reports Record First Quarter Sales Results

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 30, 2007 (unaudited)		June 30, 2007 *
Assets
Current Assets
Cash and cash equivalents	$	11,752	$	1,864
Trade & notes receivable, net		372,293		349,961
Other receivables		8,107		6,755
Inventories		293,173		272,012
Prepaid expenses and other assets		4,584		10,444
Deferred income taxes		13,513		12,102
Total current assets		703,422		653,138
Property and equipment, net		28,332		26,781
Goodwill		29,462		29,361
Other assets, including identifiable intangible assets		30,615		29,168
Total assets	$	791,831	$	738,448
Liabilities and Shareholders’ Equity
Current Liabilities
Current portion of long-term debt	$	13,000	$	200
Short-term borrowings		2,638		3,490
Trade accounts payable		253,697		256,883
Accrued expenses and other liabilities		41,104		39,610
Total current liabilities		310,439		300,183
Long-term debt		1,788		17,216
Borrowings under revolving credit facility		131,451		90,314
Other long-term liabilities		6,402		5,475
Total liabilities		450,080		413,188
Minority interest		—		516
Shareholders’ Equity
Common stock		84,866		83,653
Retained earnings		249,188		234,502
Accumulated other comprehensive income		7,697		6,589
Total shareholders’ equity		341,751		324,744
Total liabilities and shareholders’ equity	$	791,831	$	738,448

* Derived from audited financial statements at June 30, 2007.

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ScanSource Reports Record First Quarter Sales Results

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)

(In thousands, except per share data)

	Quarter ended September 30,
	2007			2006
Net sales	$	553,691		$	496,230
Cost of goods sold		495,567			444,392
Gross profit		58,124			51,838
Selling, general and administrative expenses		32,771			30,320
Operating income		25,353			21,518
Other expense (income):
Interest expense		2,125			1,770
Interest income		(303	)		(108	)
Other (income) expense		(152	)		(436	)
Other expense (income), net		1,670			1,226
Income before income taxes and minority interest		23,683			20,292
Provision for income taxes		8,997			7,798
Income before minority interest		14,686			12,494
Minority interest in income of consolidated subsidiaries, net of income taxes		—			33
Net income	$	14,686		$	12,461
Per share data:
Net income per common share, basic	$	0.57		$	0.48
Weighted-average shares outstanding, basic		25,866			25,729
Net income per common share, assuming dilution	$	0.56		$	0.48
Weighted-average shares outstanding, assuming dilution		26,276			26,213

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ScanSource Reports Record First Quarter Sales Results

SCANSOURCE, INC. AND SUBSIDIARIES

RECONCILIATION OF NON GAAP INCOME (UNAUDITED)

(In thousands, except per share data)

	Quarter ended September 30, 2007
	GAAP			Special Committee Costs			Non-GAAP
Net sales	$	553,691		$	—		$	553,691
Cost of goods sold		495,567			—			495,567
Gross profit		58,124			—			58,124
Selling, general and administrative expenses		32,771			(543	)		32,228
Operating income		25,353			543			25,896
Other expense (income):
Interest expense		2,125			—			2,125
Interest income		(303	)		—			(303	)
Other (income) expense		(152	)		—			(152	)
Other expense (income), net		1,670			—			1,670
Income before income taxes and minority interest		23,683			543			24,226
Provision for income taxes		8,997			206			9,203
Income before minority interest		14,686			337			15,023
Minority interest in income of consolidated subsidiaries, net of income taxes		—			—			—
Net income	$	14,686		$	337		$	15,023
Increase (decrease) over prior year results		18	%					21	%
Per share data:
Net income per common share, basic	$	0.57		$	0.01		$	0.58
Weighted-average shares outstanding, basic		25,866						25,866
Net income per common share, assuming dilution	$	0.56		$	0.01		$	0.57
Weighted-average shares outstanding, assuming dilution		26,276						26,276

To provide the reader more comparable information regarding the Company’s quarterly operating results, the above schedule shows the impact on earnings had the Company not incurred the additional external costs related to the Special Committee in the quarterly period indicated. These amounts consist primarily of legal and accounting costs of third party providers. For internal operating measurements, these costs are charged to the Company’s corporate overhead and are not allocated to product lines.

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