Exhibit 99.1

FOR IMMEDIATE RELEASE

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

SCANSOURCE REPORTS FIRST QUARTER RESULTS

*Sales increase 31% to a record $362.7 million

GREENVILLE, SC—October 28, 2004—ScanSource, Inc. (Nasdaq:SCSC), a leading international distributor of AIDC (automatic identification and data capture), POS (point of sale) and communications products for the reseller market, today announced financial results for its quarter ended September 30, 2004.

For the quarter ended September 30, 2004, net sales increased 31% to $362.7 million compared to $276.5 million for the quarter ended September 30, 2003. Quarterly operating income increased 51% to $14.7 million from $9.7 million for the comparable quarter in 2003. Net income increased 47% to $8.9 million for the quarter ended September 30, 2004 versus $6.1 million for the quarter ended September 30, 2003. Diluted earnings per share increased 42% to $0.68 per share, compared to $0.48 in the prior year quarter.

“Sales this quarter again exceeded our expectations, and were led by record sales of our communications products vendors: Avaya, Intel and NEC,” said Mike Baur, President and CEO of ScanSource. “We were pleasantly surprised at the continued strength of AIDC/ POS sales coming off record sales results in the June quarter.”

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ScanSource Reports First Quarter Results

Forecast for Next Quarter

The Company announced its financial forecast for the second quarter of fiscal 2005. ScanSource expects net revenues for the December 2004 quarter could range from $340 million to $360 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 First 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 First Quarter Results

SCANSOURCE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 30, 2004 (unaudited)		June 30, 2004 *
Assets
Current Assets
Cash	$	2,438	$	1,047
Trade & notes receivable, net		191,420		175,417
Other receivables		3,118		3,919
Inventories		188,398		182,868
Prepaid expenses and other assets		1,755		1,670
Deferred income taxes		8,577		8,440
Total current assets		395,706		373,361
Property and equipment, net		22,756		23,663
Goodwill		10,258		9,978
Other assets, including identifiable intangible assets		6,503		6,190
Total assets	$	435,223	$	413,192
Liabilities and Shareholders’ Equity
Current Liabilities
Current portion of long-term debt	$	5,556	$	854
Trade accounts payable		181,741		167,053
Accrued expenses and other liabilities		13,215		17,358
Total current liabilities		200,512		185,265
Deferred income taxes		1,725		1,058
Long-term debt		1,673		6,584
Borrowings under revolving credit facility		32,806		32,569
Other long-term liabilities		90		—
Total liabilities		236,806		225,476
Minority interest		831		1,072
Shareholders’ Equity
Common stock		63,888		61,856
Retained earnings		130,202		121,288
Accumulated other comprehensive income		3,496		3,500
Total shareholders’ equity		197,586		186,644
Total liabilities and shareholders’ equity	$	435,223	$	413,192

* Derived from audited financial statements at June 30, 2004.

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ScanSource Reports First Quarter Results

SCANSOURCE, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)

(In thousands, except per share data)

	Quarter ended September 30,
	2004			2003
Net sales	$	362,709		$	276,474
Cost of goods sold		325,727			245,630
Gross profit		36,982			30,844
Selling, general and admin. expenses		22,312			21,159
Operating income		14,670			9,685
Other expense (income):
Interest expense		413			343
Interest income		(216	)		(161	)
Other expense (income)		47			(166	)
Other expense, net		244			16
Income before income taxes and minority interest		14,426			9,669
Provision for income taxes		5,482			3,589
Income before minority interest		8,944			6,080
Minority interest in income of consolidated subsidiaries, net of income taxes		30			—
Net income	$	8,914		$	6,080
Per share data:
Net income per common share, basic	$	0.71		$	0.50
Weighted-average shares outstanding, basic		12,580			12,265
Net income per common share, assuming dilution	$	0.68		$	0.48
Weighted-average shares outstanding, assuming dilution		13,053			12,681

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