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)     October 23, 2008

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 October 23, 2008, ScanSource, Inc. issued a press release announcing its financial results for the first quarter ended September 30, 2008. 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.scansourceinc.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 October 23, 2008. 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: October 23, 2008	By:	/s/ Richard P. Cleys
	Name: Its:	Richard P. Cleys Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:	Richard P. Cleys
	VP and CFO
	ScanSource, Inc.
	(864) 286-4358

SCANSOURCE REPORTS FIRST QUARTER SALES RESULTS

GREENVILLE, SC — October 23, 2008—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 complete financial results for its first quarter ended September 30, 2008.

QE 9/30/08 capsule:
Net sales	$539.8 million
Net income	$12.4 million
Diluted EPS	$0.47 per share

“As expected, our first quarter results were negatively impacted by specific vendor issues in our Catalyst Telecom business unit,” said Mike Baur, CEO, ScanSource, Inc. “In addition, we experienced overall slower revenue growth in most of our business units. While this is disappointing, ScanSource continues to deliver strong profits and cash flow in this challenging economic environment. Our proven business model and strong balance sheet will allow us to continue investing in specific growth areas.”

ScanSource Reports First Quarter Sales Results

For the quarter ended September 30, 2008, net sales decreased 3% to $539.8 million compared to $553.7 million for the quarter ended September 30, 2007. Quarterly operating income decreased 19% to $20.6 million from $25.4 million for the comparable prior year quarter. Our effective tax rate for the quarter was 38.2% compared to 38.0% for the prior year quarter. Net income decreased 15% to $12.4 million for the quarter ended September 30, 2008 versus $14.7 million for the quarter ended September 30, 2007. Diluted earnings per share decreased 16% to $0.47 per share compared to $0.56 per share in the prior year quarter.

Forecast for Next Quarter

The Company announced its revenue forecast for the second quarter of fiscal 2009. ScanSource expects net revenues for the December 2008 quarter could range from $515 million to $535 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 actual results to differ from anticipated results, see the Company’s annual report on Form 10-K for the year ended June 30, 2008 filed with the Securities and Exchange Commission.

About ScanSource

ScanSource, Inc. (NASDAQ:SCSC) is a leading international distributor of specialty technology products, consisting of seven sales units in North America, Latin America and Europe.

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ScanSource Reports First Quarter Sales Results

ScanSource POS and Barcoding in North America, Latin America and Europe delivers AIDC and POS solutions; Catalyst Telecom in the U.S. and ScanSource Communications in North America and Europe, provide voice, video and converged communications equipment; and ScanSource Security in North America offers electronic security solutions. Founded in 1992, the company ranks #901 on the Fortune 1000. For more information, call the toll-free sales telephone number at 800.944.2432 or visit www.scansourceinc.com.

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ScanSource Reports First Quarter Sales Results

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 30, 2008 (unaudited)		June 30, 2008 *
Assets
Current Assets
Cash and cash equivalents	$	16,208	$	15,224
Trade & notes receivable, net		344,115		360,154
Other receivables		9,378		8,052
Inventories		283,960		280,077
Prepaid expenses and other assets		6,463		5,556
Deferred income taxes		11,746		11,428
Total current assets		671,870		680,491
Property and equipment, net		23,473		22,420
Goodwill		34,852		36,121
Other assets, including identifiable intangible assets		32,362		33,174
Total assets	$	762,557	$	772,206
Liabilities and Shareholders’ Equity
Current Liabilities
Current portion of long-term debt	$	—	$	—
Short-term borrowings		2,043		7,649
Trade accounts payable		279,399		265,284
Accrued expenses and other liabilities		35,701		38,922
Total current liabilities		317,143		311,855
Long-term debt		30,369		29,576
Borrowings under revolving credit facility		—		27,047
Other long-term liabilities		8,342		7,975
Total liabilities		355,854		376,453
Shareholders’ Equity
Common stock		99,372		96,097
Retained earnings		302,564		290,134
Accumulated other comprehensive income		4,767		9,522
Total shareholders’ equity		406,703		395,753
Total liabilities and shareholders’ equity	$	762,557	$	772,206

* Derived from audited financial statements at June 30, 2008.

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ScanSource Reports First Quarter Sales Results

SCANSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)

(In thousands, except per share data)

	Quarter ended
	September 30,
	2008			2007
Net sales	$	539,825		$	553,691
Cost of goods sold		484,323			495,567
Gross profit		55,502			58,124
Selling, general and administrative expenses		34,874			32,771
Operating income		20,628			25,353
Other expense (income):
Interest expense		579			2,125
Interest income		(351	)		(303	)
Other expense (income)		277			(152	)
Other expense, net		505			1,670
Income before income taxes and minority interest		20,123			23,683
Provision for income taxes		7,693			8,997
Net income	$	12,430		$	14,686
Per share data:
Net income per common share, basic	$	0.47		$	0.57
Weighted-average shares outstanding, basic		26,364			25,866
Net income per common share, assuming dilution	$	0.47		$	0.56
Weighted-average shares outstanding, assuming dilution		26,611			26,276

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