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) April 28, 2005

ScanSource, Inc.

(Exact Name of Registrant as Specified in Its Charter)

South Carolina	000-26926	57-0965380
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

6 Logue Court, Greenville, South Carolina 29615

(Address, Including Zip Code, of Principal Executive Offices)

(864) 288-2432

(Registrant’s Telephone Number, Including Area Code)

N/A

(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 (see General Instruction A.2. below):

¨ 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 April 28, 2005, ScanSource, Inc. issued a press release announcing its financial results for the third quarter ended March 31, 2005. A copy of the press release is attached as Exhibit 99.1 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

(c) Exhibits

99.1 – Press release issued by ScanSource, Inc. on April 28, 2005. 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: April 28, 2005	By:	/S/ Richard P. Cleys
	Name:	Richard P. Cleys
	Its:	Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

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

SCANSOURCE REPORTS THIRD QUARTER RESULTS

*Sales increase 21% to $355.1 million

GREENVILLE, SC—April 28, 2005—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 financial results for its quarter ended March 31, 2005.

For the quarter ended March 31, 2005, net sales increased 21% to $355.1 million compared to $293.6 million for the quarter ended March 31, 2004. Quarterly operating income increased 2% to $13.4 million from $13.1 million for the comparable quarter in 2004. Net income increased 1% to $8.3 million for the quarter ended March 31, 2005 versus $8.2 million for the quarter ended March 31, 2004. Diluted earnings per share increased 2% to $0.64 per share, compared to $0.63 in the prior year quarter.

“We were satisfied with this quarter’s sales results, especially since there was some softening in end market demand in a couple of our key markets,” said Mike Baur, President and CEO of ScanSource. “The March quarter is always seasonally our toughest to predict, but we believe that we continued to gain market share across the board.”

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ScanSource Reports Third Quarter Results

Forecast for Next Quarter

The Company announced its financial forecast for the fourth quarter of fiscal 2005. ScanSource expects net revenues for the June 2005 quarter could range from $365 million to $385 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 Third 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; communications products from Intel and NEC through its Paracon sales unit; and electronic security products through its ScanSource Security Distribution 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 90 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 Third Quarter Results

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	March 31, 2005 (unaudited)		June 30, 2004 *
Assets
Current Assets
Cash	$	2,780	$	1,047
Trade & notes receivable, net		195,242		175,417
Other receivables		2,947		3,919
Inventories		195,491		182,868
Prepaid expenses and other assets		1,986		1,670
Deferred income taxes		8,340		8,440
Total current assets		406,786		373,361
Property and equipment, net		22,872		23,663
Goodwill		10,261		9,978
Other assets, including identifiable intangible assets		7,041		6,190
Total assets	$	446,960	$	413,192
Liabilities and Shareholders’ Equity
Current Liabilities
Current portion of long-term debt	$	5,344	$	854
Subsidiary lines of credit		950		—
Trade accounts payable		166,406		167,053
Accrued expenses and other liabilities		14,867		17,358
Total current liabilities		187,567		185,265
Deferred income taxes		1,152		1,058
Long-term debt		1,480		6,584
Borrowings under revolving credit facility		38,325		32,569
Other long-term liabilities		982		—
Total liabilities		229,506		225,476
Minority interest		992		1,072
Shareholders’ Equity
Common stock		65,091		61,856
Retained earnings		147,626		121,288
Accumulated other comprehensive income		3,745		3,500
Total shareholders’ equity		216,462		186,644
Total liabilities and shareholders’ equity	$	446,960	$	413,192

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

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ScanSource Reports Third Quarter Results

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)

(In thousands, except per share data)

	Quarter ended March 31,						Nine months ended March 31,
	2005			2004			2005			2004
Net sales	$	355,060		$	293,574		$	1,087,899		$	859,014
Cost of goods sold		319,585			260,603			977,581			764,296
Gross profit		35,475			32,971			110,318			94,718
Selling, general & administrative expenses		22,093			19,828			67,515			61,032
Operating income		13,382			13,143			42,803			33,686
Other expense (income):
Interest expense		549			229			1,444			856
Interest income		(140	)		(141	)		(690	)		(387	)
Other expense (income)		(199	)		(61	)		(452	)		(291	)
Other expense (income), net		210			27			302			178
Income before income taxes and minority interest		13,172			13,116			42,501			33,508
Provision for income taxes		4,771			4,912			15,972			12,436
Income before minority interest		8,401			8,204			26,529			21,072
Minority interest in income of consolidated subsidiaries, net of income taxes		61			(17	)		191			104
Net income	$	8,340		$	8,221		$	26,338		$	20,968
Per share data:
Net income per common share, basic	$	0.66		$	0.65		$	2.09		$	1.68
Weighted-average shares outstanding, basic		12,644			12,603			12,614			12,459
Net income per common share, assuming dilution	$	0.64		$	0.63		$	2.01		$	1.63
Weighted-average shares outstanding, assuming dilution		13,111			13,095			13,108			12,833

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