SYNNEX Corporation
Jun 26, 2008

SYNNEX Corporation Reports Fiscal 2008 Second Quarter Results

Year-Over-Year Net Income Increased By 26%, EPS Exceed Analyst Estimates

FREMONT, Calif., Jun 26, 2008 (BUSINESS WIRE) -- SYNNEX Corporation (NYSE:SNX), a leading business process services company, today announced financial results for the fiscal second quarter ended May 31, 2008.

For the second quarter of fiscal 2008, revenues were $1.878 billion, compared to $1.685 billion for the quarter ended May 31, 2007, representing an 11% increase over the prior year quarter. These results were within the Company's guidance of $1.845 billion to $1.915 billion.

Net income for the second quarter of fiscal 2008 was $18.5 million, or $0.56 per diluted share, compared with $14.7 million, or $0.45 per diluted share in the prior year quarter, representing a 26% increase in net income over the prior year quarter. These results exceeded analysts' consensus and the Company's guidance for net income of $16.9 million to $17.6 million with diluted earnings per share of $0.51 to $0.53. The second quarter for fiscal 2008 marks the 84th consecutive profitable quarter for SYNNEX.

The SYNNEX team produced another very solid quarter resulting in continued growth in profitability, stated Robert T. Huang, President and Co-Chief Executive Officer. Our second quarter marked several important events for SYNNEX. We closed our New Age Electronics acquisition in April and I would like to commend our integration team on an expeditious integration with minimal disruption to our New Age Electronics customers and vendors. I would also like to welcome the New Age Electronics employees to the SYNNEX family.

Huang continued, We also announced that Kevin Murai joined the SYNNEX family as Co-Chief Executive Officer. With 20 years of industry experience, Kevin has a wealth of knowledge that will significantly benefit SYNNEX. In the short period of time that Kevin has been with SYNNEX, I am very impressed with how quickly he has taken over the day-to-day operations of managing our core business in North America.

Second Quarter Fiscal 2008 Financial Highlights:

-- Gross margin expanded to 5.37%, an increase of approximately 37 basis points, compared to the second quarter of fiscal 2007.

-- Income from operations was $31.7 million, or 1.69% of revenues, versus $25.8 million, or 1.53% of revenues in the prior fiscal year second quarter.

-- Depreciation and amortization were $2.7 million and $2.0 million, respectively.

-- Capital expenditures were $5.5 million.

-- Borrowings under the Company's Canadian off-balance sheet accounts receivable securitization program totaled approximately $66.9 million as of May 31, 2008. This compares to $115.9 million as of November 30, 2007.

Third Quarter Fiscal 2008 Outlook:

The following statements are based on the Company's current expectations for the third quarter of fiscal 2008. These statements are forward-looking and actual results may differ materially.

-- Revenues are expected to be in the range of $1.92 billion to $1.99 billion.

-- Net income is expected to be in the range of $18.7 million to $19.4 million.

-- Diluted earnings per share are expected to be in the range of $0.56 to $0.58.

The calculation of diluted earnings per share for the third quarter of fiscal 2008 is based on an approximate diluted weighted-average share count of approximately 33.5 million.

Our outlook for the third quarter reflects the benefits of the overall diversification of our business model, continued strong execution of our core business plans and our on-going focus on maintaining and delivering good profitability even during the current economic slowdown, said Kevin Murai, Co-Chief Executive Officer at SYNNEX Corporation. We reiterate our commitment to our stated goal of growing our annual earnings per share in excess of 20% year-over-year, which has been adjusted upward to include our New Age Electronics acquisition. We believe we can achieve these goals in the current economic environment, through the combination of continued superior execution, realization of the full impact of our recent acquisition of New Age Electronics and continued improvements in efficiency and productivity of our operations.

Conference Call and Webcast

SYNNEX will be discussing its financial results and outlook on a conference call today at 2:00 p.m. (PT). A webcast of the call will be available at The conference call can be accessed by dialing 866-793-1340 in North America or 703-639-1311 outside North America. The confirmation code for the call is 1251855. A replay of the conference call will be available at approximately two hours after the conclusion of the conference and will be archived until July 10, 2008.


SYNNEX Corporation, a Fortune 500 corporation, is a leading business process services company, servicing resellers and original equipment manufacturers in multiple regions around the world. The Company provides services in IT distribution, supply chain management, contract assembly and business process outsourcing. Founded in 1980, SYNNEX employs over 7,000 employees worldwide and operates in the United States, Canada, China, Mexico, the Philippines and the United Kingdom. Additional information about SYNNEX may be found online at

Statements in this press release regarding SYNNEX Corporation which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements may be identified by terms such as believe, expect, may, will, provide, plan, goal, continue, anticipate, could and should and the negative of these terms or other similar expressions. These statements, including statements regarding the future benefit of Mr. Murai to our Company, our focus on the diversification of our business model, continued execution of our core business plans and maintaining and delivering profitability, our commitment to grow annual earnings per share in excess of 20% year-over-year, expectations of continued execution, realization of the full impact of the New Age Electronics, Inc. acquisition and continued improvements in efficiency and productivity, and expectations of our revenues, net income and earnings per share, are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in the forward-looking statements. These risks and uncertainties include, but are not limited to: general economic conditions and any weakness in IT spending; the loss or consolidation of one or more of our significant OEM suppliers or customers; market acceptance and product life of the products we assemble and distribute; competitive conditions in our industry and their impact on our margins; pricing, margin and other terms with our OEM suppliers; variations in supplier-sponsored programs; changes in our costs and operating expenses; changes in foreign currency exchange rates; risks associated with our international operations; uncertainties and variability in demand by our reseller and contract assembly customers; supply shortages or delays; any termination or reduction in our floor plan financing arrangements; credit exposure to our reseller customers, and negative trends in their businesses; any future incidents of theft; risks associated with our contract assembly business; risks associated with the consolidation, integration and performance of our recent acquisitions; our ability to realize the full impact of our recent acquisitions and other risks and uncertainties detailed in our Form 10-Q for the fiscal quarter ended February 29, 2008 and from time to time in our SEC filings. Statements included in this press release are based upon information known to SYNNEX Corporation as of the date of this release, and SYNNEX Corporation assumes no obligation to update information contained in this press release.

Copyright 2008 SYNNEX Corporation. All rights reserved. SYNNEX, the SYNNEX Logo, and all other SYNNEX company, product and services names and slogans are trademarks or registered trademarks of SYNNEX Corporation. SYNNEX and the SYNNEX Logo Reg. U.S. Pat. & Tm. Off. Other names and marks are the property of their respective owners.

                          SYNNEX Corporation
                     Consolidated Balance Sheets
                            (in thousands)

                                             May 31,      November 30,
                                               2008           2007
                                          --------------  ------------
Current assets:
 Cash and cash equivalents                 $      50,967  $     42,875
 Short-term investments                           15,039        17,257
 Accounts receivable, net                        712,173       729,797
 Receivable from vendors, net                    125,871        96,035
 Receivable from affiliates                        8,113         9,790
 Inventories                                     745,709       642,524
 Deferred income taxes                            18,127        18,612
 Current deferred assets                          17,769        14,478
 Other current assets                             13,413        16,859
                                           -------------  ------------
  Total current assets                         1,707,181     1,588,227

Property and equipment, net                       69,822        59,440
Goodwill                                         129,755        96,350
Intangible assets, net                            27,466        21,590
Deferred income taxes                              6,246         5,416
Long-term deferred assets                         92,378        97,171
Other assets                                      27,908        18,909
                                           -------------  ------------

  Total assets                             $   2,060,756  $  1,887,103
                                           =============  ============

Liabilities and Stockholders' Equity
Current liabilities:
 Borrowings under securitization, term
  loans and lines of credit                $     326,873  $    351,142
 Accounts payable                                569,541       588,801
 Payable to affiliates                            66,383        67,334
 Accrued liabilities                             146,953       120,617
 Current deferred liabilities                     39,533        35,522
 Income taxes payable                                  -         5,103
                                           -------------  ------------
  Total current liabilities                    1,149,283     1,168,519

Long-term borrowings                              28,318        37,537
Convertible debt                                 143,750             -
Long-term liabilities                             25,556        14,533
Long-term deferred liabilities                    58,709        60,565
Deferred income taxes                                442           437
                                           -------------  ------------
  Total liabilities                            1,406,058     1,281,591
                                           -------------  ------------

Commitments and contingencies                          -             -

Minority interest                                  4,324           958
                                           -------------  ------------

Stockholders' equity:
 Preferred stock                                       -             -
 Common stock                                         32            31
 Additional paid-in-capital                      201,284       196,128
 Accumulated other comprehensive income           34,633        28,939
 Retained earnings                               414,425       379,456
                                           -------------  ------------
  Total stockholders' equity                     650,374       604,554
                                           -------------  ------------

  Total liabilities and stockholders'
   equity                                  $   2,060,756  $  1,887,103
                                           =============  ============

                          SYNNEX Corporation
                Consolidated Statements of Operations
             (in thousands, except for per share amounts)

                      Three Months Three Months Six Months Six Months
                          Ended        Ended       Ended      Ended
                        May 31,      May 31,     May 31,     May 31,
                          2008         2007        2008       2007

Revenue               $ 1,878,072  $ 1,684,808  $3,626,646 $3,273,084

Cost of revenue         1,777,267    1,600,563   3,429,991  3,114,415

Gross profit              100,805       84,245     196,655    158,669

Selling, general and
 expenses                  69,133       58,433     132,203    107,914

Income from
 operations before
 non-operating items,
 income taxes and
 minority interest         31,672       25,812      64,452     50,755

Interest expense and
 finance charges, net       3,310        3,695       7,477      6,753
Other (income)
 expense, net                (581)        (904)      1,465     (1,062)

Income from
 operations before
 income taxes and
 minority interest         28,943       23,021      55,510     45,064

Provision for income
 taxes                     10,275        8,288      19,826     16,456
Minority interest             158           62         346         62

Net income            $    18,510  $    14,671  $   35,338 $   28,546

Diluted earnings per
 share                $      0.56  $      0.45  $     1.07 $     0.88
Diluted weighted-
 average common
 shares outstanding        33,256       32,657      33,150     32,559

SOURCE: SYNNEX Corporation

SYNNEX Corporation
Laura Crowley, 510-668-3715
Director of Investor Relations and Public Relations