ScanSource Reports Strong Sales in Second Quarter.*Sales Increase 16% to $ 474 Million GREENVILLE, S.C. -- ScanSource, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :SCSC SCSC State Civil Service Commission SCSC Schedule Control Systems Criteria SCSC Software Council of Southern California SCSC Surface Combat Systems Center (formerly ACSC; Wallops Island, VA) SCSC Santa Clara Swim Club ), a leading international distributor of AIDC (Automatic Identification and Data Collection or Capture) Capturing data electronically by scanning bar codes or alphanumeric codes (OCR, MICR), by reading magnetic stripes or by wireless means. See AIM, bar code and RFID. (automatic identification and data capture For "AIDC" the Taiwanese company, see . Automatic Identification and Data Capture (AIDC) refers to the methods of automatically identifying objects, collecting data about them, and entering that data directly into computer systems (i.e. without human involvement). ), point of sale, communications and electronic security products for the reseller market, today announced financial results for its quarter ended December 31, 2006. Net sales $473.7 million Gross margin 52.8 million The Company will not be in a position to report net income or diluted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. until the accounting evaluation of findings of the Special Committee is complete. For further information regarding the Special Committee findings with regard to stock option grant practices see the Company's Form 8K filed January 19, 2007. "Our strong sales were led by record results delivered by the ScanSource International team and the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. POS/AIDC team," said Mike Baur, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of ScanSource. "Our communications business was led by the record results posted by our T2 Supply sales team." For the quarter ended December 31, 2006, net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased 16% to $473.7 million compared to $408.5 million for the quarter ended December 31, 2005. Quarterly gross margin increased to $52.8 million or 11.14% of revenues compared to $41.8 million or 10.24% for the same quarter in 2005. As previously announced, on October 9, 2006, the Company's Board of Directors appointed a Special Committee to conduct a review of the Company's stock option grant practices and related accounting issues from the time of its initial public offering in 1994 to the present. That Special Committee consists of two independent directors, Mr. Michael J. Grainger and Mr. John P. Reilly, who along with independent counsel and forensic accountants have conducted the review. On January 19, 2007, the Company filed a current report on Form 8K with the SEC to announce the findings of its Special Committee of the Board of Directors of the Company's historical stock option grant practices. The Special Committee recommends that management determine the impact on the Company's accounting for the option grants referenced in the findings and make appropriate adjustments and required disclosures. In that regard, the Company's review of accounting issues raised by the findings is ongoing. The Company has preliminarily concluded, however, that the appropriate measurement date for certain grants may differ from the stated grant dates. As a result of the potential change in measurement dates, the Company may record additional non-cash stock based compensation expense related to certain of its prior stock option grants, but it is not yet able to determine the amount of such charges or the resulting tax and accounting impact of these actions or whether the financial statements for any historical periods would require restatement. Any additional non-cash stock based compensation expense recorded will not affect the Company's previously reported cash positions or revenues. Forecast for Next Quarter The Company announced its revenue forecast for the third quarter of fiscal 2007. ScanSource expects net revenues for the March 2007 quarter could range from $468 million to $488 million. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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 The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Any number of important factors could cause actual results to differ materially from anticipated results. Results of the review of the Special Committee may have an impact on reported financial results for this quarter, as well as previously reported results. For more information concerning factors that could cause actual results to differ from anticipated results, see the Company's annual report on Form 10K filed with the Securities and Exchange Commission. About ScanSource ScanSource, Inc. is a leading international distributor of specialty technology products. The Company markets specialty technologies through five sales units: ScanSource [automatic identification and data capture (AIDC) and point-of-sale (POS (1) See point of sale and packet over SONET. (2) "Parent over shoulder." See digispeak. POS - point of sale ) products]; Catalyst Telecom (Avaya communications products); Paracon (communications products); T2 Supply (video conferencing See videoconferencing. (communications) video conferencing - A discussion between two or more groups of people who are in different places but can see and hear each other using electronic communications. and telephone products); and ScanSource Security Distribution (electronic security Products). 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 ranks #982 on the Fortune 1000. For more information, call the toll-free sales telephone number at 800.944.2432 or visit www.scansource.com. [TABLE OMITTED] [TABLE OMITTED] |
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