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): February 9, 2016

ScanSource, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number: 000-26926

SC	00-26926	57-0965380
(State or other jurisdiction of incorporation)	(Commission File Number)	(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 February 9, 2016 ScanSource, Inc. issued a press release announcing its financial results for its second quarter for the period ended December 31, 2015. 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 Item 2.02 Current Report on Form 8-K, including the exhibits, 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 February 9, 2016. 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 February 9, 2016.  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:	February 9, 2016	By:	/s/ Charles A. Mathis
		Name:	Charles A. Mathis
		Its:	Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

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

SCANSOURCE REPORTS RECORD SECOND QUARTER RESULTS

Net Sales Growth of 23% and EPS Growth of 33%

GREENVILLE, SC -- February 9, 2016 -- ScanSource, Inc. (NASDAQ:SCSC), a leading global provider of technology products and solutions, today announced financial results for fiscal year 2016 second quarter ended December 31, 2015.

	Quarter ended December 31,
	2015		2014		Change
	(in millions, except per share data)
Net sales	$	993.5	$	807.0	23	%
Operating income	31.9		26.0		23	%
Non-GAAP operating income(1)	36.3		29.4		24	%
GAAP net income	20.7		16.8		23	%
Non-GAAP net income(1)	23.7		19.7		20	%
GAAP diluted EPS	$	0.77	$	0.58	33	%
Non-GAAP diluted EPS(1)	$	0.88	$	0.68	29	%
(1) A reconciliation of non-GAAP financial information to GAAP financial information is presented in the following Supplementary Information (Unaudited) tables.

"Strong demand across our business led to record net sales and record non-GAAP EPS,” said Mike Baur, CEO, ScanSource, Inc.  “Sales exceeded our expectations due to large deals and excellent execution by our sales and support teams across the globe.”

Net sales for the quarter ended December 31, 2015 increased 23% year-over-year to $993.5 million. The increase in net sales includes the acquisitions of Network1 in January 2015 and KBZ in September 2015. Net sales in constant currency excluding acquisitions grew 5% year-over-year.

Operating income for the quarter ended December 31, 2015 totaled $31.9 million, compared with $26.0 million in the prior year quarter. Non-GAAP operating income of $36.3 million increased 24% year-over-year, and the non-GAAP operating margin increased to 3.7%.

On a GAAP basis, net income for the quarter ended December 31, 2015 totaled $20.7 million, or $0.77 per diluted share, compared with net income of $16.8 million, or $0.58 per diluted share, for the prior year quarter. Non-GAAP net income for the quarter ended December 31, 2015 of $23.7 million increased 20%, and non-GAAP diluted earnings per share of $0.88 increased 29% year-over-year.

Share Repurchase Update

During the quarter ended December 31, 2015, ScanSource repurchased approximately 0.8 million shares for an aggregate purchase price of approximately $29.6 million. Under the Company’s $120 million share repurchase authorization through December 31, 2015, ScanSource has repurchased approximately 2.43 million shares for approximately $90.4 million, having executed 75% of the total authorization.

1

Exhibit 99.1

ScanSource Networking and Security

As of October 1, 2015, we branded ScanSource Security as ScanSource Networking and Security to build on the growing demand for networking solutions. With this organizational change, we moved some business operations from our Communications & Services segment to our Barcode & Security segment. Prior period results have been reclassified to provide comparable financial information.

Forecast for Next Quarter

The Company announced its current expectations for the third quarter of fiscal year 2016. ScanSource expects net sales for the quarter ending March 31, 2016 to range from $850 million to $900 million and non-GAAP diluted earnings per share to range from $0.62 to $0.70 per share. Non-GAAP diluted earnings per share exclude amortization of intangibles, change in fair value of contingent consideration and acquisition costs.

Webcast Details

ScanSource will present additional information about its financial results and outlook in a conference call with presentation slides today, February 9, 2016 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.

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, utilization and further implementation of the Company's new ERP system; risks in connection with our growth which includes strategic acquisitions; expanded international operations that expose the Company to greater risks than its operations in domestic markets; risks associated with consolidation of the Company's vendors; risks in connection with compliance with laws and regulations governing the Company's international business; macroeconomic circumstances that could impact the business, such as currency fluctuations, credit market conditions, and an economic downturn; expectations of market demand trends; the ability to forecast volatility in earnings resulting from the quarterly revaluation of the Company's earnout obligations; the timing and amount of any share repurchases; the exercise of discretion by the Company to make any repurchase or continue the share repurchase authorization; and changes to the source of funds for any repurchases. 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, 2015, 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, which are summarized below. Non-GAAP financial measures are used to better understand and evaluate performance, including comparisons from period to period. Non-GAAP results exclude amortization of intangible assets related to acquisitions and change in fair value of contingent consideration.

Net sales on a constant currency basis: The Company discloses 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.

Non-GAAP operating income, non-GAAP net income and non-GAAP EPS: To evaluate current period performance on a clearer and more consistent basis with prior periods, the Company discloses non-GAAP operating income, non-GAAP net income and non-GAAP diluted earnings per share. Non-GAAP results exclude amortization of intangible assets related to acquisitions, change in the fair value of contingent consideration, and other non-GAAP adjustments. Non-GAAP operating income, non-GAAP net income, and non-GAAP EPS measures are useful in assessing and understanding the Company's operating performance, especially when comparing results with previous periods or forecasting performance for future periods.

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

2

Exhibit 99.1

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. Adjusted earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") excludes the change in fair value of contingent consideration, in addition to other non-GAAP adjustments. 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 (Unaudited) tables.

About ScanSource, Inc.

ScanSource, Inc. (NASDAQ: SCSC) is a leading global provider of technology products and solutions, focusing on point-of-sale (POS), barcode, physical security, video, voice, data networking and emerging technologies. ScanSource's teams provide value-added solutions and operate from two segments, Worldwide Barcode & Security and Worldwide Communications & Services. ScanSource is committed to helping its reseller customers choose, configure and deliver the industry's best solutions across almost every vertical market in North America, Latin America and Europe. Founded in 1992, the Company is headquartered in Greenville, South Carolina and was named one of the 2015 Best Places to Work in South Carolina. ScanSource ranks #775 on the Fortune 1000. For more information, visit www.scansource.com.

3

ScanSource Reports Record Second Quarter Results

ScanSource, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
	December 31, 2015			June 30, 2015*
Assets
Current assets:
Cash and cash equivalents	$	39,438		$	121,646
Accounts receivable, less allowance of $31,967 at December 31, 2015	588,443			522,532
and $32,589 at June 30, 2015
Inventories	604,093			553,063
Prepaid expenses and other current assets	62,563			46,917
Deferred income taxes	19,152			20,556
Total current assets	1,313,689			1,264,714
Property and equipment, net	46,642			46,574
Goodwill	83,313			66,509
Net identifiable intangible assets	54,765			46,272
Other non-current assets	50,721			52,872
Total assets	$	1,549,130		$	1,476,941
Liabilities and Shareholders' Equity
Current liabilities:
Current debt	$	705		$	2,860
Accounts payable	512,034			501,329
Accrued expenses and other current liabilities	98,683			81,000
Current portion of contingent consideration	12,605			9,391
Income taxes payable	2,287			4,180
Total current liabilities	626,314			598,760
Deferred income taxes	3,354			3,773
Long-term debt	5,429			5,966
Borrowings under revolving credit facility	108,989			—
Long-term portion of contingent consideration	11,395			24,569
Other long-term liabilities	38,855			34,888
Total liabilities	794,336			667,956
Shareholders' equity:
Common stock	89,284			157,172
Retained earnings	752,967			716,315
Accumulated other comprehensive income (loss)	(87,457		)	(64,502		)
Total shareholders' equity	754,794			808,985
Total liabilities and shareholders' equity	$	1,549,130		$	1,476,941

* Derived from audited financial statements.

4

ScanSource Reports Record Second Quarter Results

ScanSource, Inc. and Subsidiaries
Condensed Consolidated Income Statements (Unaudited)
(in thousands, except per share data)
	Quarter ended December 31,						Six Months ended December 31,
	2015			2014			2015			2014
Net sales	$	993,522		$	807,019		$	1,864,350		$	1,598,738
Cost of goods sold	892,889			728,908			1,676,166			1,442,981
Gross profit	100,633			78,111			188,184			155,757
Selling, general and administrative expenses	66,965			51,658			128,510			99,813
Change in fair value of contingent consideration	1,816			463			3,381			976
Operating income	31,852			25,990			56,293			54,968
Interest expense	709			207			990			397
Interest income	(767		)	(492		)	(1,709		)	(1,327		)
Other, net	278			337			958			724
Income before income taxes	31,632			25,938			56,054			55,174
Provision for income taxes	10,976			9,117			19,402			19,145
Net income	$	20,656		$	16,821		$	36,652		$	36,029
Per share data:
Net income per common share, basic	$	0.78		$	0.59		$	1.35		$	1.26
Weighted-average shares outstanding, basic	26,648			28,579			27,175			28,562
Net income per common share, diluted	$	0.77		$	0.58		$	1.34		$	1.25
Weighted-average shares outstanding, diluted	26,902			28,831			27,427			28,813

5

ScanSource Reports Record Second Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Net Sales by Segment:
	Quarter ended December 31,
Worldwide Barcode & Security:	2015			2014		% Change
Net sales, as reported	$	689,530		$	547,171	26.0	%
Foreign exchange impact (a)	31,923			—
Net sales, constant currency	721,453			547,171		31.9	%
Less: Acquisitions	(131,461		)	—
Net sales, constant currency excluding acquisitions	$	589,992		$	547,171	7.8	%
Worldwide Communications & Services:
Net sales, as reported	$	303,992		$	259,848	17.0	%
Foreign exchange impact (a)	3,537			—
Net sales, constant currency	307,529			259,848		18.3	%
Less: Acquisitions	(49,049		)	—
Net sales, constant currency excluding acquisitions	$	258,480		$	259,848	(0.5	)%
Consolidated:
Net sales, as reported	$	993,522		$	807,019	23.1	%
Foreign exchange impact (a)	35,460			—
Net sales, constant currency	1,028,982			807,019		27.5	%
Less: Acquisitions	(180,510		)	—
Net sales, constant currency excluding acquisitions	$	848,472		$	807,019	5.1	%
(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 December 31, 2015 into U.S. dollars using the weighted average foreign exchange rates for the quarter ended December 31, 2014.

6

ScanSource Reports Record Second Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Net Sales by Segment:
	Six Months ended December 31,
Worldwide Barcode & Security:	2015			2014			% Change
Net sales, as reported	$	1,263,199		$	1,095,943		15.3	%
Foreign exchange impact (a)	66,845			—
Net sales, constant currency	1,330,044			1,095,943			21.4	%
Less: Acquisitions	(166,084		)	—
Net sales, constant currency excluding acquisitions	$	1,163,960		$	1,095,943		6.2	%
Worldwide Communications & Services:
Net sales, as reported	$	601,151		$	502,795		19.6	%
Foreign exchange impact (a)	7,115			—
Net sales, constant currency	608,266			502,795			21.0	%
Less: Acquisitions	(118,926		)	(4,686		)
Net sales, constant currency excluding acquisitions	$	489,340		$	498,109		(1.8	)%
Consolidated:
Net sales, as reported	$	1,864,350		$	1,598,738		16.6	%
Foreign exchange impact (a)	73,960			—
Net sales, constant currency	1,938,310			1,598,738			21.2	%
Less: Acquisitions	(285,010		)	(4,686		)
Net sales, constant currency excluding acquisitions	$	1,653,300		$	1,594,052		3.7	%
(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 six months ended December 31, 2015 into U.S. dollars using the weighted average foreign exchange rates for the six months ended December 31, 2014.

7

ScanSource Reports Record Second Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Net Sales by Geography:
	Quarter ended December 31,						Non-GAAP % Change
	2015		2014		% Change		Constant Currency(a)
United States	$	735,642	$	587,068	25.3	%	25.3	%
International	257,880		219,951		17.2	%	33.4	%
Consolidated	$	993,522	$	807,019	23.1	%	27.5	%
	Six Months ended December 31,						Non-GAAP % Change
	2015		2014		% Change		Constant Currency(a)
United States	$	1,377,572	$	1,182,858	16.5	%	16.5	%
International	486,778		415,880		17.0	%	34.8	%
Consolidated	$	1,864,350	$	1,598,738	16.6	%	21.2	%
(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 and six months ended December 31, 2015 into U.S. dollars using the weighted average foreign exchange rates for the quarter and six months ended December 31, 2014. International net sales excluding the translation impact of foreign currencies for the quarter and six months ended December 31, 2015 totaled $293.3 million and $560.7 million, respectively.

8

ScanSource Reports Record Second Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Non-GAAP Financial Information:
	Quarter ended December 31, 2015
	Operating income		Pre-tax income		Net income		Diluted EPS
GAAP measure	$	31,852	$	31,632	$	20,656	$	0.77
Adjustments:
Amortization of intangible assets	2,545		2,545		1,732		0.06
Change in fair value of contingent consideration	1,816		1,816		1,244		0.05
Acquisition costs (a)	60		60		60		—
Non-GAAP measure	$	36,273	$	36,053	$	23,692	$	0.88
	Quarter ended December 31, 2014
	Operating income		Pre-tax income		Net income		Diluted EPS
GAAP measure	$	25,990	$	25,938	$	16,821	$	0.58
Adjustments:
Amortization of intangible assets	1,443		1,443		1,025		0.04
Change in fair value of contingent consideration	463		463		346		0.01
Acquisition costs (a)	1,474		1,474		1,474		0.05
Non-GAAP measure	$	29,370	$	29,318	$	19,666	$	0.68
(a) Acquisition costs are non-deductible for tax purposes.

9

ScanSource Reports Record Second Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Non-GAAP Financial Information:
	Quarter ended December 31,
	2015			2014
Return on invested capital (ROIC), annualized (a)	17.5		%	14.8		%
Reconciliation of Net Income to Adjusted EBITDA
Net income - GAAP	$	20,656		$	16,821
Plus: Income taxes	10,976			9,117
Plus: Interest expense	709			207
Plus: Depreciation and amortization	4,351			2,443
EBITDA	36,692			28,588
Adjustments:
Change in fair value of contingent consideration	1,816			463
Acquisition costs	60			1,474
Adjusted EBITDA (numerator for ROIC) (non-GAAP)	$	38,568		$	30,525
Invested Capital Calculation
Equity - beginning of quarter	$	764,693		$	810,265
Equity - end of quarter	754,794			818,748
Adjustments:
Change in fair value of contingent consideration, net of tax	1,244			346
Acquisition costs, net of tax	60			1,474
Average equity	760,396			815,417
Average funded debt (b)	117,421			5,429
Invested capital (denominator for ROIC) (non-GAAP)	$	877,817		$	820,846
(a) Calculated as net income plus interest expense, income taxes, depreciation and amortization (EBITDA), plus change in fair value of contingent consideration and other adjustments, annualized and divided by invested capital for the period. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period.
(b) Average funded debt is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt.

10

ScanSource Reports Record Second Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Segment Information(a)
	Quarter ended
	December 31, 2015			September 30, 2015
Net Sales:
Worldwide Barcode & Security	$	689,530		$	573,669
Worldwide Communications & Services	303,992			297,160
	$	993,522		$	870,829
Gross Profit:
Worldwide Barcode & Security	57,687			48,048
Worldwide Communications & Services	42,946			39,504
	$	100,633		$	87,552
Operating Income:
Worldwide Barcode & Security	$	19,000		$	13,814
Worldwide Communications & Services	12,912			10,847
Corporate (acquisition costs)	(60		)	(220		)
	$	31,852		$	24,441
Amortization of Intangible Assets:
Worldwide Barcode & Security	$	1,047		$	610
Worldwide Communications & Services	1,498			1,575
	$	2,545		$	2,185
Change in Fair Value of Contingent Consideration:
Worldwide Barcode & Security	$	—		$	126
Worldwide Communications & Services	1,816			1,438
	$	1,816		$	1,564
Non-GAAP Operating Income:
Worldwide Barcode & Security	$	20,047		$	14,550
Worldwide Communications & Services	16,226			13,860
	$	36,273		$	28,410
(a) As of October 1, 2015, we branded ScanSource Security as ScanSource Networking and Security to build on the growing demand for networking solutions. With this organizational change, we moved some business operations from our Communications & Services segment to our Barcode & Security segment. Prior period results have been reclassified to provide comparable financial information.

11

ScanSource Reports Record Second Quarter Results

ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands)
Segment Information(a)
	Quarter ended
	June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014
Net Sales:
Worldwide Barcode & Security	$	555,401		$	482,780		$	547,171		$	548,772
Worldwide Communications & Services	301,284			280,423			259,848			242,948
	$	856,685		$	763,203		$	807,019		$	791,720
Gross Profit:
Worldwide Barcode & Security	$	47,266		$	41,208		$	43,618		$	45,743
Worldwide Communications & Services	44,052			38,808			34,493			31,902
	$	91,318		$	80,016		$	78,111		$	77,645
Operating Income:
Worldwide Barcode & Security	$	12,157		$	10,081		$	13,269		$	13,537
Worldwide Communications & Services	12,958			11,707			14,195			16,790
Corporate (acquisition costs)	(138		)	(292		)	(1,474		)	(1,350		)
	$	24,977		$	21,496		$	25,990		$	28,977
Amortization of Intangible Assets:
Worldwide Barcode & Security	$	431		$	464		$	519		$	580
Worldwide Communications & Services	1,660			1,650			924			412
	$	2,091		$	2,114		$	1,443		$	992
Change in Fair Value of Contingent Consideration:
Worldwide Barcode & Security	$	806		$	172		$	160		$	498
Worldwide Communications & Services	600			113			303			15
	$	1,406		$	285		$	463		$	513
Non-GAAP Operating Income:
Worldwide Barcode & Security	$	13,394		$	10,717		$	13,948		$	14,615
Worldwide Communications & Services	15,218			13,470			15,422			17,217
	$	28,612		$	24,187		$	29,370		$	31,832
(a) As of October 1, 2015, we branded ScanSource Security as ScanSource Networking and Security to build on the growing demand for networking solutions. With this organizational change, we moved some business operations from our Communications & Services segment to our Barcode & Security segment. Prior period results have been reclassified to provide comparable financial information.

12

EX-99.2

Q2 FY16 FINANCIAL RESULTS CONFERENCE CALL February 9, 2016 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, costs 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, 2015, as well as the quarterly report on Form 10-Q for the quarter ended September 30, 2015, filed with the Securities and Exchange Commission (“SEC”). Although ScanSource believes the expectations in its forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement. 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 non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP diluted earnings per share, 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 Appendix and in the Company’s Form 8-K, filed with the SEC, with the quarterly earnings press release for the period indicated. 2

HIGHLIGHTS – Q2 FY16 3  Exceptional growth and profitability  Record net sales of $994 million, up 23% Y/Y, or 5% in constant currency, excluding acquisitions  Record non-GAAP diluted EPS of $0.88*, up 29% Y/Y  Second quarter 2016 return on invested capital of 17.5%*  Strong demand led by large deals in our Barcode & Security segment  Three successful acquisitions during the past 16 months (Imago, Network1 and KBZ) contributed positively to our growth and strong operating performance  Robust IT platform for growth * See Appendix for calculation of non-GAAP measures and reconciliations to GAAP measures.

Q2 FY16 Q2 FY15 Change Net sales $993.5 $807.0 23% Gross profit 100.6 78.1 29% Gross profit margin % (of net sales) 10.1% 9.7% 45 bps Operating income 31.9 26.0 23% Non-GAAP operating income 36.3 29.4 24% GAAP net income 20.7 16.8 23% Non-GAAP net income 23.7 19.7 20% GAAP diluted EPS $0.77 $0.58 33% Non-GAAP diluted EPS $0.88 $0.68 29% HIGHLIGHTS – Q2 FY16 4 * See Appendix for calculation of non-GAAP measures and reconciliations to GAAP measures. In millions, except EPS

SECOND QTR: Q2 FY16 – Y/Y % CHANGE As Reported Constant Currency Constant Currency, excluding Acquisitions WW Barcode & Security 26.0% 31.9% 7.8% WW Comms. & Services 17.0% 18.3% -0.5% Consolidated 23.1% 27.5% 5.1% SALES GROWTH SUMMARY 5 SIX MONTHS: Q2 FY16 YTD – Y/Y % CHANGE As Reported Constant Currency Constant Currency, excluding Acquisitions WW Barcode & Security 15.3% 21.4% 6.2% WW Comms. & Services 19.6% 21.0% -1.8% Consolidated 16.6% 21.2% 3.7%

Q2 FY16 Q2 FY15 Net sales $689.5 $547.2 Gross profit $57.7 $43.6 Gross margin 8.4% 8.0% Operating income $19.0 $13.3 Operating income % 2.8% 2.4% Non-GAAP operating income $20.0 $13.9 Non-GAAP operating income % 2.9% 2.5% Net Sales, $ in millions Up 26% Constant Currency Excluding Acquisitions, Up 8% WW BARCODE & SECURITY 6 $ in millions Non-GAAP operating income excludes amortization of intangibles and change in fair value of contingent consideration. See Appendix for calculation of non-GAAP measures and reconciliations to GAAP measures. Q2 FY15 Q2 FY16 $547 $690 Acqs. & FX

Q2 FY16 Q2 FY15 Net sales $304.0 $259.8 Gross profit $42.9 $34.5 Gross margin 14.1% 13.3% Operating income $12.9 $14.2 Operating income % 4.2% 5.5% Non-GAAP operating income $16.2 $15.4 Non-GAAP operating income % 5.3% 5.9% WW COMMUNICATIONS & SERVICES 7 Q2 FY15 Q2 FY16 Net Sales, $ in millions Up 17% Constant Currency Excluding Acquisitions, Down 0.5% $ in millions Non-GAAP operating income excludes amortization of intangibles and change in fair value of contingent consideration. See Appendix for calculation of non-GAAP measures and reconciliations to GAAP measures. $304 $260 Acqs. & FX

Q2 FY16 Q1 FY16 Q2 FY15 Accounts receivable (Q/E) $588.4 $588.0 $490.7 Days sales outstanding in receivables 53 56* 55 Inventory (Q/E) $604.1 $588.2 $518.4 Inventory turns 6.0 5.3* 5.8 Accounts payable (Q/E) $512.0 $516.1 $419.6 Paid for inventory days 9.3 13.0* 12.2 WORKING CAPITAL MEASURES $ in millions 8 * Excludes the impact of KBZ, which was completed September 4, 2015

Q2 FY16 Q1 FY16 Q2 FY15 Return on invested capital (“ROIC”)* 17.5% 14.6% 14.8% Operating cash flow, trailing 12-months $44.7 $17.1 $36.7 Cash and cash equivalents (Q/E) $39.4 $41.2 $121.5 Debt (Q/E) $115.1 $94.5 $5.4 Net debt to EBITDA, trailing 12-months 0.61x 0.46x -- Shares repurchased – # of shares (QTR) 801,040 1,149,103 -- Shares repurchased – dollars (QTR) $29.6 $41.9 Cum. repurchases under plan – # shares (as of Q/E) 2,429,968 1,628,928 Cum. repurchases under plan – dollars (as of Q/E) $90.4 $60.7 Remaining authorization under plan (as of Q/E) $29.6 $59.3 -- CASH FLOW AND BALANCE SHEET HIGHLIGHTS $ in millions 9 * Excludes non-GAAP adjustments and change in fair value of contingent consideration. See Appendix for calculation of ROIC, a non-GAAP measure.

Q3 FY16 OUTLOOK* 10 * Outlook as of February 9, 2016. Non-GAAP diluted EPS excludes amortization of intangible assets, change in fair value of contingent consideration, and acquisition costs. Reflects the following FX rates: $1.10 to EUR 1.00 for the Euro, $0.245 to R$1.00 for the Brazilian real (R$3.94 to $1), and $1.45 to GBP 1.00 for the British pound. For the quarter ending March 31, 2016, excluding amortization of intangible assets, change in fair value of contingent consideration, and acquisition costs: Net Sales Non-GAAP Diluted Earnings Per Share  Range from $850 million to $900 million  Range from $0.62 to $0.70 per share

APPENDIX: NON-GAAP FINANCIAL INFORMATION 11 Operating Income, Net Income & EPS ($ in thousands) Quarter Ended December 31, 2015 Operating Income Pre-tax income Net income Diluted EPS GAAP measure $ 31,852 $ 31,632 $ 20,656 $ 0.77 Adjustment: Amortization of intangible assets 2,545 2,545 1,732 0.06 Change in fair value of contingent consideration 1,816 1,816 1,244 0.05 Acquisition costs (a) 60 60 60 - Non-GAAP measure $ 36,273 $ 36,053 $ 23,692 $ 0.88 Quarter Ended December 31, 2014 Operating Income Pre-tax income Net income Diluted EPS GAAP measure $ 25,990 $ 25,938 $ 16,821 $ 0.58 Adjustment: Amortization of intangible assets 1,443 1,443 1,025 0.04 Change in fair value of contingent consideration 463 463 346 0.01 Acquisition costs (a) 1,474 1,474 1,474 0.05 Non-GAAP measure $ 29,370 $ 29,318 $ 19,666 $ 0.68 (a) Acquisition costs are nondeductible for tax purposes.

APPENDIX: NON-GAAP FINANCIAL INFORMATION 12 Highlights by Segment – Y/Y ($ in thousands) Quarter Ended December 31, 2015 WW Barcode & Security WW Comms. & Services Corporate Consolidated Net sales $ 689,530 $ 303,992 $ - $ 993,522 GAAP operating income $ 19,000 $ 12,912 $ (60) $ 31,852 Adjustments: Amortization of intangible assets 1,047 1,498 - 2,545 Change in fair value of contingent consideration - 1,816 - 1,816 Acquisition costs - - 60 60 Non-GAAP operating income $ 20,047 $ 16,226 $ - $ 36,273 GAAP operating income % (of net sales) 2.8% 4.2% n/m 3.2% Non-GAAP operating income % (of net sales) 2.9% 5.3% n/m 3.7% Quarter Ended December 31, 2014 WW Barcode & Security WW Comms. & Services Corporate Consolidated Net sales $ 547,171 $ 259,848 $ - $ 807,019 GAAP operating income $ 13,269 $ 14,195 $ (1,474) $ 25,990 Adjustments: Amortization of intangible assets 519 924 - 1,443 Change in fair value of contingent consideration 160 303 - 463 Acquisition costs - - 1,474 1,474 Non-GAAP operating income $ 13,948 $ 15,422 $ - $ 29,370 GAAP operating income % (of net sales) 2.4% 5.5% n/m 3.2% Non-GAAP operating income % (of net sales) 2.5% 5.9% n/m 3.6% n/m = not meaningful

APPENDIX: NON-GAAP FINANCIAL INFORMATION 13 Return on Invested Capital ($ in thousands) Q2 FY16 Q1 FY16 Q2 FY15 Return on invested capital (ROIC), annualized (a) 17.5% 14.6% 14.8% Reconciliation of Net Income to EBITDA Net income - GAAP $ 20,656 $ 15,996 $ 16,821 Plus: Income taxes 10,976 8,426 9,117 Plus: Interest expense 709 281 207 Plus: Depreciation and amortization 4,351 3,938 2,443 EBITDA 36,692 28,641 28,588 Change in fair value of contingent consideration 1,816 1,564 463 Acquisition costs 60 220 1,474 Adjusted EBITDA (numerator for ROIC)(non-GAAP) $ 38,568 $ 30,425 $ 30,525 Invested Capital Calculation Equity - beginning of the quarter $ 764,693 $ 808,985 $ 810,265 Equity - end of quarter 754,794 764,693 818,748 Add: Change in fair value of contingent consideration, net of tax 1,244 1,080 346 Add: Acquisition costs, net of tax 60 220 1,474 Average equity 760,396 787,489 815,417 Average funded debt (b) 117,421 39,124 5,429 Invested capital (denominator for ROIC)(non-GAAP) $ 877,817 $ 826,613 $ 820,846 Notes: (a) Calculated as net income plus interest expense, income taxes, depreciation and amortization (EBITDA), annualized divided by invested capital for the period. Adjusted EBITDA reflects other adjustments for non-GAAP measures. (b) Average daily amounts outstanding on short-term and long-term interest-bearing debt.

APPENDIX: NON-GAAP FINANCIAL INFORMATION 14 Net Sales, Constant Currency and Excluding Acquisitions - QTR ($ in thousands) WW Barcode & Security WW Comms. & Services Consolidated For the quarter ended December 31, 2015: Q2 FY16 net sales, as reported $ 689,530 $ 303,992 $ 993,522 Foreign exchange negative impact (a) 31,923 3,537 35,460 Q2 FY16 net sales, constant currency 721,453 307,529 1,028,982 Less: Acquisitions (131,461) (49,049) (180,510) Q2 FY16 net sales, constant currency excl. acquisitions $ 589,992 $ 258,480 $ 848,472 Q2 FY15 net sales, as reported $ 547,171 $ 259,848 $ 807,019 Y/Y % Change: As reported 26.0% 17.0% 23.1% Constant currency 31.9% 18.3% 27.5% Constant currency, excluding acquisitions 7.8% -0.5% 5.1% (a) Year-over-year sales growth excluding the translation impact of changes in foreign currency rates. Calculated by translating the net sales for the quarter ended December 31, 2015 into U.S. dollars using the weighted average foreign exchange rates for the quarter ended December 31, 2014.

APPENDIX: NON-GAAP FINANCIAL INFORMATION 15 Net Sales, Constant Currency and Excluding Acquisitions - YTD ($ in thousands) WW Barcode & Security WW Comms. & Services Consolidated For the six months ended December 31, 2015: Q2 FY16 YTD net sales, as reported $ 1,263,199 $ 601,151 $ 1,864,350 Foreign exchange negative impact (a) 66,845 7,115 73,960 Q2 FY16 YTD net sales, constant currency 1,330,044 608,266 1,938,310 Less: Acquisitions (166,084) (118,926) (285,010) Q2 FY16 YTD net sales, constant currency excl. acquisitions $ 1,163,960 $ 489,340 $ 1,653,300 Q2 FY15 YTD net sales, as reported $ 1,095,943 $ 502,795 $ 1,598,738 Less: Acquisitions - (4,686) (4,686) Q2 FY16 YTD net sales, constant currency excl. acquisitions $ 1,095,943 $ 498,109 $ 1,594,052 Y/Y % Change: As reported 15.3% 19.6% 16.6% Constant currency 21.4% 21.0% 21.2% Constant currency, excluding acquisitions 6.2% -1.8% 3.7% (a) Year-over-year sales growth excluding the translation impact of changes in foreign currency rates. Calculated by translating the net sales for the six months ended December 31, 2015 into U.S. dollars using the weighted average foreign exchange rates for the six months ended December 31, 2014.