8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 1, 2014

SCANSOURCE INC

(Exact name of registrant as specified in its charter)

Commission File Number: 000-26926

SC	57-0965380
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

6 Logue Court, Greenville, SC 29615

(Address of principal executive offices, including zip code)

864-288-2432

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On May 1, 2014, ScanSource, Inc. issued a press release announcing its financial results for its third quarter ended March 31, 2014. A copy of the press release and accompanying presentation slides are attached as Exhibit 99.1 and 99.2 hereto and incorporated herein by reference and also made available through the Company’s website at www.scansource.com.

The information in this Current Report on Form 8-K, including the exhibit, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

99.1 – Press release issued by ScanSource, Inc. on May 1, 2014. The information contained in the attached exhibit is unaudited and should be read in conjunction with the Registrant’s annual and quarterly reports filed with the Securities and Exchange Commission.

99.2 – Presentation slides for the financial results conference call issued on May 1, 2014.  The information contained in the attached exhibit is unaudited and should be read in conjunction with the Registrant’s annual and quarterly reports filed with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ScanSource, Inc.
Date: May 1, 2014	By:	/s/ Charles A. Mathis
	Name:	Charles A. Mathis
	Its:	Senior Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:
Charles A. Mathis		Mary M. Gentry
Senior Vice President and Chief Financial Officer	- or -	Treasurer and Director, Investor Relations
ScanSource, Inc.		ScanSource, Inc.
(864) 286-4975		(864) 286-4892

SCANSOURCE REPORTS THIRD QUARTER RESULTS

Strong Profitability, Despite Flat Sales

GREENVILLE, SC -- May 1, 2014 -- ScanSource, Inc. (NASDAQ:SCSC), the leading international value-added distributor of specialty technology products, today announced financial results for the third quarter fiscal year 2014 for the period ended March 31, 2014.

Quarter ended March 31, 2014:
Net sales	$683.0	million
Net income	$16.9	million
Diluted EPS	$0.59	per share

"We had excellent bottom line results for the quarter, including double-digit growth in operating income and earnings per share," said Mike Baur, CEO, ScanSource, Inc. "Sales for our Worldwide Barcode & Security segment increased 4% year-over-year, driven by strong performance from Brazil and Europe. However, our Worldwide Communications & Services segment had a weaker than expected sales quarter."

For the quarter ended March 31, 2014, net sales totaled $683.0 million, which are unchanged from net sales for the prior year quarter. Operating income for the quarter ended March 31, 2014 increased to $25.7 million from $20.8 million in the prior year quarter. The effective tax rate increased to 34.8% in the current quarter from 34% in the prior year quarter. Net income for the quarter ended March 31, 2014 increased to $16.9 million, or $0.59 per diluted share, compared with net income of $14.0 million, or $0.50 per diluted share, for the prior year quarter.

Forecast for Next Quarter

The Company announced its current expectations for the fourth quarter fiscal year 2014. ScanSource expects net sales for the quarter ending June 30, 2014 to range from $715 million to $745 million and diluted earnings per share to range from $0.55 to $0.58 per share.

Webcast Details

ScanSource will present additional information about its financial results and outlook in a conference call with presentation slides today, May 1, 2014, at 5:00 p.m. (ET).  A webcast of the call and accompanying presentation slides will be available for all interested parties and can be accessed at www.scansource.com (Investor Relations section).  The webcast will be available for replay for 60 days.

ScanSource Reports Third Quarter Results

Safe Harbor Statement

This press 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 or forecasted results, including, but not limited to, expanded operations in emerging markets, such as Brazil, that expose the Company to greater political and economic volatility than its operations in established markets; costs and delays in connection with the Company's new ERP system and the costs associated with the litigation of the prior ERP system project; the ability to forecast volatility in earnings resulting from the quarterly revaluation of the Company's earnout obligation to the sellers of CDC; and macroeconomic circumstances that could impact the business, such as currency fluctuations, credit market conditions, and an 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, 2013 and the Company's quarterly report on Form 10-Q for the quarter ended December 31, 2013, filed with the Securities and Exchange Commission. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Information

In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the Company also discloses certain non-GAAP financial measures, including net sales excluding the translation impact of foreign currencies and return on invested capital ("ROIC"). Non-GAAP financial measures are used to better understand and evaluate performance, including comparisons from period to period, as described below.

Net sales excluding the translation impact of foreign currencies: The Company discusses the percentage change in net sales excluding the translation impact from changes in foreign currency exchange rates between reporting periods. This measure enhances comparability between periods to help analyze underlying trends.

Return on invested capital ("ROIC"): Management uses ROIC as a performance measurement to assess efficiency in allocating capital under the Company's control to generate returns. Management believes this metric balances the Company's operating results with asset and liability management, is not impacted by capitalization decisions and is considered to have a strong correlation with shareholder value creation. In addition, it is easily computed, communicated and understood. ROIC also provides management a measure of the Company's profitability on a basis more comparable to historical or future periods.

ROIC assists management in comparing the Company's performance over various reporting periods on a consistent basis because it removes from operating results the impact of items that do not reflect core operating performance. Management believes the calculation of ROIC provides useful information to investors and is an additional relevant comparison of the Company's performance during the year. In addition, the Company's Board of Directors uses ROIC in evaluating business and management performance. Certain management incentive compensation targets are set and measured relative to ROIC.

These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that the Company reports may not be comparable to similarly titled amounts reported by other companies. Analysis of results and outlook on a non-GAAP basis should be considered in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with GAAP. A reconciliation of the Company's non-GAAP financial information to GAAP is set forth in the following Supplementary Information tables.

About ScanSource, Inc.

ScanSource, Inc. (NASDAQ: SCSC) is the leading international distributor of specialty technology products, focusing on point-of-sale (POS) and barcode, communications and physical security solutions. ScanSource's teams provide value-added services and operate from two technology segments, Worldwide Barcode & Security and Worldwide Communications & Services. ScanSource is committed to helping its reseller customers choose, configure and deliver the industry's best products across almost every vertical market in North America, Latin America and Europe. Founded in 1992, the Company ranks #711 on the Fortune 1000. For more information, visit www.scansource.com.

ScanSource Reports Third Quarter Results

ScanSource, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
	March 31, 2014			June 30, 2013*
Assets
Current assets:
Cash and cash equivalents	$	183,562		$	148,164
Accounts receivable, less allowance of	419,889			435,028
$26,825 at March 31, 2014
$25,479 at June 30, 2013
Inventories	479,871			402,307
Prepaid expenses and other current assets	41,947			40,105
Deferred income taxes	15,876			16,456
Total current assets	1,141,145			1,042,060
Property and equipment, net	25,674			20,203
Goodwill	32,143			31,795
Other non-current assets, including net identifiable intangible assets	53,412			70,125
Total assets	$	1,252,374		$	1,164,183
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of contingent consideration	$	5,718		$	3,732
Accounts payable	375,892			362,271
Accrued expenses and other current liabilities	62,756			59,983
Income taxes payable	2,289			1,696
Total current liabilities	446,655			427,682
Deferred income taxes	192			205
Long-term debt	5,429			5,429
Long-term portion of contingent consideration	5,018			8,813
Other long-term liabilities	22,294			26,098
Total liabilities	479,588			468,227
Shareholders' equity:
Common stock	166,509			149,821
Retained earnings	623,791			569,107
Accumulated other comprehensive income (loss)	(17,514		)	(22,972		)
Total shareholders' equity	772,786			695,956
Total liabilities and shareholders' equity	$	1,252,374		$	1,164,183

* Derived from audited financial statements.

ScanSource Reports Third Quarter Results

ScanSource, Inc. and Subsidiaries
Condensed Consolidated Income Statements (Unaudited)
(in thousands)
	Quarter ended March 31,						Nine months ended March 31,
	2014			2013			2014			2013
Net sales	$	682,998		$	682,965		$	2,155,520		$	2,164,286
Cost of goods sold	609,647			614,133			1,928,414			1,947,063
Gross profit	73,351			68,832			227,106			217,223
Operating expenses:
Selling, general and administrative expenses	46,705			47,937			143,541			144,392
Change in fair value of contingent consideration	981			100			2,218			1,396
Operating income	25,665			20,795			81,347			71,435
Other expense (income):
Interest expense	217			102			698			356
Interest income	(545		)	(483		)	(1,644		)	(1,648		)
Other, net	13			(4		)	65			34
Income before income taxes	25,980			21,180			82,228			72,693
Provision for income taxes	9,031			7,202			27,544			24,716
Net income	$	16,949		$	13,978		$	54,684		$	47,977
Per share data:
Weighted-average shares outstanding, basic	28,502			27,847			28,275			27,725
Net income per common share, basic	$	0.59		$	0.50		$	1.93		$	1.73
Weighted-average shares outstanding, diluted	28,730			28,024			28,548			27,960
Net income per common share, diluted	$	0.59		$	0.50		$	1.92		$	1.72

ScanSource Reports Third Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Net Sales by Segment:
	Quarter ended March 31,						Non-GAAP % Change
	2014		2013		% Change		Excluding FX(a)
Worldwide Barcode & Security	$	455,822	$	438,191	4.0	%	4.8	%
Worldwide Communications & Services	227,176		244,774		(7.2	)%	(7.4	)%
Consolidated	$	682,998	$	682,965	—	%	0.4	%
	Nine months ended March 31,						Non-GAAP % Change
	2014		2013		% Change		Excluding FX(a)
Worldwide Barcode & Security	$	1,382,672	$	1,383,453	(0.1	)%	0.1	%
Worldwide Communications & Services	772,848		780,833		(1.0	)%	(1.3	)%
Consolidated	$	2,155,520	$	2,164,286	(0.4	)%	(0.4	)%
Net Sales by Geographic Segment:
	Quarter ended March 31,						Non-GAAP % Change
	2014		2013		% Change		Excluding FX(b)
North American (U.S. and Canada)	$	498,773	$	508,394	(1.9	)%	(1.9	)%
International	184,225		174,571		5.5	%	7.3	%
Consolidated	$	682,998	$	682,965	—	%	0.4	%
	Nine months ended March 31,						Non-GAAP % Change
	2014		2013		% Change		Excluding FX(b)
North American (U.S. and Canada)	$	1,602,202	$	1,602,193	—	%	—	%
International	553,318		562,093		(1.6	)%	(1.5	)%
Consolidated	$	2,155,520	$	2,164,286	(0.4	)%	(0.4	)%
Notes:
(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended and nine months ended March 31, 2014 into U.S. dollars using the weighted average foreign exchange rates for the quarter ended and nine months ended March 31, 2013, respectively. Worldwide Barcode & Security net sales excluding the translation impact of foreign currencies for the quarter ended and nine months ended March 31, 2014, as adjusted, totaled $459.4 million and $1.4 billion, respectively. Worldwide Communications & Services net sales excluding the translation impact of foreign currencies for the quarter ended and nine months ended March 31, 2014, as adjusted, totaled $226.7 million and $770.6 million.
(b)Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended and nine months ended March 31, 2014 into U.S. dollars using the weighted average foreign exchange rates for the quarter ended and nine months ended March 31, 2013, respectively. International net sales excluding the translation impact of foreign currencies for the quarter ended and nine months ended March 31, 2014, as adjusted, totaled $187.3 million and $553.8 million, respectively.

ScanSource Reports Third Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Non-GAAP Financial Information:
	Quarter ended March 31,
	2014			2013
Return on invested capital (ROIC), annualized (a)	14.8		%	13.3		%
Reconciliation of Net Income to EBITDA
Net income - GAAP	$	16,949		$	13,978
Plus: Income taxes	9,031			7,202
Plus: Interest expense	217			102
Plus: Depreciation and amortization (b)	1,743			2,274
EBITDA (numerator for ROIC) (non-GAAP)	$	27,940		$	23,556
Invested Capital Calculation
Equity - beginning of quarter	$	751,446		$	696,960
Equity - end of quarter	772,786			709,912
Average equity	762,116			703,436
Average funded debt (c)	5,429			15,675
Invested capital (denominator for ROIC) (non-GAAP)	$	767,545		$	719,111
Notes:
(a) Calculated as net income plus interest expense, income taxes, depreciation and amortization (EBITDA), annualized and divided by invested capital for the period.
(b) Depreciation and amortization for the quarter ended March 31, 2013 includes debt issuance costs of $0.1 million.
(c) Average funded debt is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt.

EX-99.2

Q3 FY 2014 FINANCIAL RESULTS CONFERENCE CALL May 1, 2014 at 5:00 pm ET Exhibit 99.2

Safe Harbor This presentation may contain certain comments, which are “forward-looking” statements that involve plans, strategies, economic performance and trends, projections, expectations, or beliefs about future events and other statements that are not descriptions of historical facts, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties; these statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Any number of 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 “Risk Factors” included in the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2013, as well as the quarterly report on Form 10-Q for the quarter ended December 31, 2013, filed with the Securities and Exchange Commission (“SEC”). Although ScanSource believes the expectations reflected in its forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. ScanSource disclaims any intentions or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by law. In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), the Company also discloses certain non-GAAP measures, including return on invested capital (“ROIC”) and the percentage change in net sales excluding the impact of foreign currency exchange rates. A reconciliation of the Company's non-GAAP financial information to GAAP financial information is provided in the Company’s Form 8-K, filed with the SEC, with the quarterly earnings press release for the period indicated. 2

Highlights – Q3 FY14 3  Third quarter 2014 net sales of $683 million, below our expected range, and EPS of $0.59, above our expected range  Double-digit Y/Y growth in operating income and EPS, despite mixed sales results  Overall sales unchanged from prior year period  Worldwide Barcode & Security: 4% Y/Y increase, driven by Brazil and Europe  Worldwide Communications & Services: 7% Y/Y decrease; missed sales expectations  Excellent gross profit and operating margins for both segments  Third quarter 2014 return on invested capital of 14.8%*  Strong balance sheet for growth * See Appendix for calculation of ROIC, a non-GAAP measure.

Q3 FY14 Q3 FY13 Y/Y Change: Net sales $683.0 $683.0  Unchanged Gross margin % (of net sales) 10.74% 10.08%  66 bp margin increase SG&A expenses $46.7 $47.9  2.6% lower SG&A Change in FV of contingent consideration $1.0 $0.1  $0.9 FV decrease Operating income $25.7 $20.8  23% increase Operating income % (of net sales) 3.76% 3.04%  72 bp margin increase Net income $16.9 $14.0  21% increase Diluted EPS $0.59 $0.50  18% increase Income Statement Highlights In millions, except EPS 4

Q3 FY14 Sales Mix Barcode & Security = Worldwide Barcode and Security Communications & Services = Worldwide Communications and Services As a % of Q3 FY14 net sales of $683.0 million * Includes the United States and Canada. 67% Barcode & Security 73% North America* 33% Communications & Services 5 By Technology By Geography 27% International

Q3 FY14 Q3 FY13 Net sales $455.8 $438.2 Gross profit $43.0 $39.1 Gross margin 9.4% 8.9% Operating income $13.8 $10.4 Operating income % 3.0% 2.4% $438 $456 Q3 FY13 Q3 FY14 WW Barcode & Security Net Sales, $ in millions Up 4.0% Excluding FX, Up 4.8% $ in millions 6 * See Appendix for reconciliation of net sales excluding impact of foreign exchange to a GAAP measure.

Q3 FY14 Q3 FY13 Net sales $227.2 $244.8 Gross profit $30.3 $29.8 Gross margin 13.3% 12.2% Operating income $11.8 $10.4 Operating income % 5.2% 4.2% $245 $227 Q3 FY13 Q3 FY14 WW Communications & Services $ in millions Net Sales, $ in millions Down (7.2)% Excluding FX, Down (7.4)% 7 * See Appendix for reconciliation of net sales excluding impact of foreign exchange to a GAAP measure.

Q3 FY14 Q2 FY14 Q3 FY13 Return on invested capital (“ROIC”)* 14.8% 15.9% 13.3% Cash and cash equivalents (Q/E) $183.6 $157.1 $93.9 Uncleared checks (included in accounts payable) $53.2 $107.1 $47.3 Operating cash flow, trailing 12-months $86.1 $140.8 $110.9 Days sales outstanding in receivables 55 53 55 Inventory (Q/E) $479.9 $467.2 $418.0 Inventory turns 5.1 5.9 5.4 Paid for inventory days 15.3 11.3 13.5 Q3 FY14 Key Measures $ in millions 8 * See Appendix for calculation of ROIC, a non-GAAP measure.

Q4 FY14 Outlook* For the Quarter Ending June 30, 2014: Net Sales Diluted Earnings Per Share  Range from $715 million to $745 million  Range midpoint: $730 million  Range from $0.55 to $0.58 per share  Range midpoint: $0.565 * Outlook as of May 1, 2014 9

$245 $227 Q3 FY13 Q3 FY14 WW Communications & Services Highlights Net Sales, $ in millions Down (7.2)% Excluding FX, Down (7.4)% 10 * See Appendix for reconciliation of net sales excluding impact of foreign exchange to a GAAP measure.  33% of overall sales  Disappointing sales quarter, due to execution challenges  Gross profit and operating income increase from more favorable product mix and higher service fee income  ScanSource Services Group increased configuration and Communications professional services offerings

$438 $456 Q3 FY13 Q3 FY14 WW Barcode & Security Highlights Net Sales, $ in millions Up 4.0% Excluding FX, Up 4.8% 11 * See Appendix for reconciliation of net sales excluding impact of foreign exchange to a GAAP measure.  67% of overall sales  Sale of Motorola’s Enterprise business to Zebra Technologies announced  In North America, strong growth in POS was offset by weaker AIDC (especially big AIDC deals)  Strong sales growth for International POS & Barcode units, driven by Brazil and Europe  Security returned to growth with 8% Y/Y sales increase

Launching a New Technology – 3D Printing 12  3D printing ready for value-added distribution  Lower product costs, advancements in technology capabilities, emergence of a reseller channel, high-growth market  Key vendor relationship:  3D Systems (leader in 3D printing and design-to-manufacturing solutions)  Solutions targeted for manufacturing, health care, aerospace, and automotive  New opportunity for existing channel  Focus on United States with dedicated ScanSource 3D team

Appendix: Non-GAAP Financial Information 13 Q3 FY14 Q2 FY14 Q3 FY13 Return on invested capital (ROIC), annualized (a) 14.8% 15.9% 13.3% Reconciliation of Net Income (Loss) to EBITDA Net income (loss) - GAAP $ 16,949 $ 18,298 $ 13,978 Plus: Income taxes 9,031 9,511 7,202 Plus: Interest expense 217 235 102 Plus: Depreciation and amortization 1,743 1,778 2,274 EBITDA (numerator for ROIC)(non-GAAP) $ 27,940 $ 29,822 $ 23,556 Invested Capital Calculation Equity - beginning of the quarter $ 751,446 $ 723,748 $ 696,960 Equity - end of quarter 772,786 751,446 709,912 Average equity 762,116 737,597 703,436 Average funded debt (b) 5,429 5,429 15,675 Invested capital (denominator for ROIC)(non-GAAP) $ 767,545 $ 743,026 $ 719,111 Notes: (a) Calculated as net income plus interest expense, income taxes, depreciation and amortization (EBITDA), annualized and divided by invested capital for the period. (b) Average daily amounts outstanding on short-term and long-term interest-bearing debt.

Appendix: Non-GAAP Financial Information 14 Worldwide Barcode & Security Net sales, excluding impact of foreign exchange (FX) - Y/Y Change: Q3 FY14 net sales $ 455.8 Foreign exchange impact 3.6 Q3 FY14 net sales, excluding FX impact $ 459.4 Q3 FY13 sales $ 438.2 % Change 4.8% Worldwide Communications & Services Net sales, excluding impact of foreign exchange (FX) - Y/Y Change: Q3 FY14 net sales $ 227.2 Foreign exchange impact (0.5) Q3 FY14 net sales, excluding FX impact $ 226.7 Q3 FY13 sales $ 244.8 % Change -7.4%