EXHIBIT 99.1

FOR IMMEDIATE RELEASE

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

SCANSOURCE REPORTS SECOND QUARTER RESULTS

*Sales increase 16% to a record $289 million

GREENVILLE, SC—January 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 second fiscal quarter ended December 31, 2003.

QE 12/31/03 capsule:
Net sales	$	289.0	million
Net income	$	6.7	million
Non-GAAP net income	$	7.4	million
Diluted EPS	$	0.52	per share
Non-GAAP diluted EPS	$	0.58	per share

For the quarter ended December 31, 2003, net sales increased 16% to $289.0 million compared to $250.1 million for the quarter ended December 31, 2002. “We were pleasantly surprised by strong sales this quarter of AIDC products which helped drive international sales growth of 42%, net of the favorable foreign exchange rate,” said Mike Baur, President and CEO of ScanSource. “The North America business unit was led by higher-than-expected demand for telephony products and strong across-the-board sales performance by our AIDC and POS product lines.”

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ScanSource Reports Second Quarter Results

Net income, based upon Generally Accepted Accounting Principles (GAAP), increased 15% to $6.7 million for the quarter ended December 31, 2003 versus $5.8 million for the quarter ended December 31, 2002. Diluted earnings per share increased 13% to $0.52 per share, compared to $0.46 in the prior year quarter.

For the quarter ended December 31, 2003, non-GAAP net income, which excludes special charges of $1.25 million ($775,000 net of tax) related to a disputed state sales and use tax assessment, increased 28% to $7.4 million compared to $5.8 million for the quarter ended December 31, 2002. Non-GAAP diluted earnings per share increased 26% to $0.58 per share, compared to $0.46 in the prior year quarter. Please refer to the Company’s statements regarding non-GAAP financial information and the related reconciliation of GAAP results to non-GAAP results located in this release and also located in the Investor Relations section of the Company’s website at www.scansource.com.

Non-GAAP Financial Information

The reconciliation below, and on pages 7 and 8 of this release, shows the adjustments between results calculated using Generally Accepted Accounting Principles (GAAP) and non-GAAP information provided within this release. The non-GAAP data is included with the intention of providing investors a more complete understanding of our operational results and trends, but should only be used in conjunction with results reported in accordance with GAAP.

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ScanSource Reports Second Quarter Results

Reconciliation of Non-GAAP Financial Information

(In thousands, except per share data)

	Quarter ended December 31,				Six months ended December 31,
	2003		2002		2003		2002
Net income	$	6,667	$	5,822	$	12,747	$	11,813
Sales and use tax dispute, net of tax		775		—		775		—
Channelmax restructuring, net of tax		—		—		1,411		—
Non-GAAP net income	$	7,442	$	5,822	$	14,933	$	11,813
Diluted earnings per share	$	0.52	$	0.46	$	1.00	$	0.94
Non-GAAP diluted earnings per share	$	0.58	$	0.46	$	1.17	$	0.94
Diluted weighted-avg shares outst.		12,942		12,646		12,771		12,527

Forecast for Next Quarter

The Company announced its financial forecast for the third quarter of fiscal 2004. ScanSource expects net revenues for the March 2004 quarter could range from $260 million to $280 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 Second 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 converged communications products through its Paracon sales unit.

ScanSource provides both value-added distribution sales and partner services to technology resellers. The Company has two distribution segments: one serving North America from the Memphis distribution center, and an international segment currently serving Latin America and Europe. Founded in 1992, the Company markets products from more than 60 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 Second Quarter Results

SCANSOURCE, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 31, 2003		June 30, 2003
	(unaudited)
Assets
Current Assets
Cash	$	736	$	2,565
Trade & notes receivable, net		146,644		129,105
Other receivables		3,144		4,420
Inventories		153,262		152,261
Prepaid taxes		—		870
Prepaid expenses and other assets		1,743		869
Deferred income taxes		8,986		9,498
Total current assets		314,515		299,588
Property and equipment, net		25,767		27,270
Goodwill		9,978		9,841
Other assets including, identifiable intangible assets		8,567		7,648
Total assets	$	358,827	$	344,347
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	147,621	$	151,389
Current portion of long-term debt		871		914
Accrued expenses and other		13,266		12,308
Total current liabilities		161,758		164,611
Deferred tax liability		1,546		1,673
Borrowings under revolving credit facility		19,352		18,118
Long term debt		6,997		7,385
Total liabilities		189,653		191,787
Minority interest		1,034		1,673
Shareholders’ Equity
Common stock		59,933		56,706
Retained earnings		104,053		91,306
Accumulated other comprehensive income		4,154		2,875
Total shareholders’ equity		168,140		150,887
Total liabilities and shareholders’ equity	$	358,827	$	344,347

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ScanSource Reports Second Quarter Results

SCANSOURCE, INC.

CONSOLIDATED INCOME STATEMENTS (UNAUDITED)

(In thousands, except per share data)

	Quarter ended						Six months ended
	December 31,						December 31,
	2003			2002			2003			2002
Net sales	$	288,966		$	250,117		$	565,440		$	510,720
Cost of goods sold		258,063			223,207			503,693			453,615
Gross profit		30,903			26,910			61,747			57,105
Selling, general and admin. expenses		20,045			16,467			41,204			36,144
Operating income		10,858			10,443			20,543			20,961
Other expense (income):
Interest expense		284			556			627			1,249
Interest income		(85	)		(282	)		(246	)		(586	)
Other (income) expense		57			126			(109	)		331
Other expense, net		256			400			272			994
Income before income taxes		10,602			10,043			20,271			19,967
Provision for income taxes		3,935			4,221			7,524			8,154
Net income	$	6,667		$	5,822		$	12,747		$	11,813
Per share data:
Basic earnings per share:
Net income	$	0.53		$	0.49		$	1.03		$	1.00
Weighted-average shares outstanding		12,508			11,947			12,389			11,822
Diluted earnings per share:
Net income	$	0.52		$	0.46		$	1.00		$	0.94
Weighted-average shares outstanding		12,942			12,646			12,771			12,527

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ScanSource Reports Second Quarter Results

SCANSOURCE, INC.

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION (UNAUDITED)

Quarter Ended December 31, 2003

(In thousands, except per share data)

	GAAP QE Dec 31 2003			Sales and Use Tax Disposition (a)			Non-GAAP QE Dec 31 2003
Net sales	$	288,966					$	288,966
Cost of goods sold		258,063						258,063
Gross profit		30,903						30,903
Selling, general & admin.		20,045			(1,250	)		18,795
Operating income		10,858						12,108
Other expense (income):
Interest expense		284						284
Interest income		(85	)					(85	)
Other (income) expense		57						57
Other expense, net		256						256
Income before taxes		10,602						11,852
Provision for income taxes		3,935			475			4,410
Net income	$	6,667		$	775		$	7,442
Per share data:
Basic earnings per share:
Net income	$	0.53		$	0.06		$	0.59
Wtd. avg shares		12,508			12,508			12,508
Diluted earnings per share:
Net income	$	0.52		$	0.06		$	0.58
Wtd. avg shares		12,942			12,942			12,942

(a) The Company has recently been notified that we will receive an assessment for sales and use tax for the three calendar years ended 2001. Based upon the notification, we have determined a probable range for the disposition of that assessment and for subsequent periods through December 2003. Although the Company is disputing the assess- ment, it has accrued $1.25 million in SG&A. Accordingly, the Company has included this Non-GAAP disclosure.

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ScanSource Reports Second Quarter Results

SCANSOURCE, INC.

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION (UNAUDITED)

Six Months Ended December 31, 2003

(In thousands, except per share data)

	GAAP Six Months Ended Dec 31 2003			Sales and Use Tax Disposition (a)			ChannelMax Restructuring Charge (b)			Non–GAAP Six Months Ended Dec 31 2003
Net sales	$	565,440								$	565,440
Cost of goods sold		503,693									503,693
Gross profit		61,747									61,747
Selling, general & admin.		41,204			(1,250	)		(2,275	)		37,679
Operating income		20,543									24,068
Other expense (income):
Interest expense		627									627
Interest income		(246	)								(246	)
Other (income) expense		(109	)								(109	)
Other expense, net		272									272
Income before taxes		20,271									23,796
Provision for income taxes		7,524			475			864			8,863
Net income	$	12,747		$	775		$	1,411		$	14,933
Per share data:
Basic earnings per share:
Net income	$	1.03		$	0.06		$	0.11		$	1.21
Wtd. avg shares		12,389			12,389			12,389			12,389
Diluted earnings per share:
Net income	$	1.00		$	0.06		$	0.11		$	1.17
Wtd. avg shares		12,771			12,771			12,771			12,771

(a) The Company has recently been notified that we will receive an assessment for sales and use tax for the three calendar years ended 2001. Based upon the notification, we have determined a probable range for the disposition of that assessment and for subsequent periods through December 2003. Although the Company is disputing the assessment, it has accrued $1.25 million in SG&A. Accordingly, the Company has included this Non-GAAP disclosure.

(b) The Company incurred special charges of $2.275 million during the quarter ended September 30, 2003 related to the restructuring of the ChannelMax business segment.

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