SYNNEX Corporation
Jun 25, 2007

SYNNEX Corporation Reports 2007 Second Quarter Results

FREMONT, Calif.--(BUSINESS WIRE)--June 25, 2007--SYNNEX Corporation (NYSE:SNX), a business process services company, today announced financial results for the second quarter ended May 31, 2007.

For the second quarter of fiscal 2007, revenues increased by 11% to $1.68 billion compared to $1.51 billion for the quarter ended May 31, 2006. Net income for the second quarter increased by 30% to $14.7 million, or $0.45 per share, compared with $11.3 million, or $0.36 per share in the prior year quarter.

"Our second quarter results mark a significant milestone on the road to evolving our business model from a traditional broad line distributor to a leading business process services company," said Robert T. Huang, President and Chief Executive Officer. "The strategic acquisitions we have made over the past year to enhance our solutions offerings and our continued relentless focus on operational efficiencies in our core distribution service should further enable, and help accelerate, our goal to reach a double digit return on invested capital."

Second Quarter Financial Highlights:

As a result of recent acquisitions, the dependency and integrated nature of the Company's distribution and assembly services, how the Company assesses its service offerings, and a review of the appropriate generally accepted accounting principles, the Company has deemed that its business process service offerings constitute one reportable segment. This external reporting will be reflective in the Company's interim financial statements for the second quarter of fiscal 2007.

Third Quarter Fiscal 2007 Outlook:

The following statements are based on the Company's current expectations for the third quarter of fiscal 2007. These statements are forward-looking and actual results may differ materially.

The calculation of earnings per share for the third quarter of fiscal 2007 is based on an approximate weighted-average diluted share count of 33.0 million.

On March 9, 2007, SYNNEX Canada completed the purchase, for approximately $12.5 million, of a logistics facility in Guelph, Canada where it will consolidate certain of its existing Canada logistics facilities. Within the reported results of the second quarter of fiscal 2007, the Company incurred approximately $0.01 on an earnings per share basis in additional costs to operate the new and existing facilities. The Company expects to incur a similar amount of expense over the next quarter until the integration is complete. This amount is factored into the preceding third quarter outlook.

In addition, the Company anticipates incurring restructuring and other non-recurring costs of approximately $1.0 to $1.5 million to complete the integration of the RGC acquisition and facilities consolidation at its Canadian operations. This amount is expected to be incurred in the third quarter of fiscal 2007 and is not included in the Company's third quarter outlook provided above.

Conference Call and Webcast

SYNNEX will be discussing its financial results and outlook on a conference call today at 2:00 p.m. (PDT). A webcast of the call will be available at The conference call can be accessed by dialing 866-261-3330 in North America or 703-639-1224 outside North America. The confirmation code for the call is 1099546. A replay of the conference call will be available at approximately two hours after the conference call has concluded and will be archived until July 9, 2007.


Founded in 1980, SYNNEX Corporation, a Fortune 500 company, is a business process services company offering a comprehensive range of services to original equipment manufacturers, software publishers and reseller customers worldwide. SYNNEX offers product distribution, logistics services, business process outsourcing and contract assembly. Additional information about SYNNEX may be found online at

Safe Harbor Statement

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, could and should and the negative of these terms or other similar expressions. These statements, including statements regarding our goal to reach a double digit return on invested capital, expectations of our revenues, net income and earnings per share for the third quarter of fiscal 2007, change in our segment reporting, the consolidation of our Canadian facilities, and the related expenses and impact on our earnings per share, and the impact of integrating RGC, and the related expenses and the timing of these expenses 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 our levels of excess inventory and doubtful accounts and changes in the terms of OEM 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 and integration of our recent acquisitions and other risks and uncertainties detailed in our Form 10-Q for the fiscal quarter ended February 28, 2007 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 2007 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,
                                                 2007         2006
                                             ------------ ------------
 Current assets:
  Cash and cash equivalents                  $    37,814  $    27,881
  Short-term investments                          15,494       13,271
  Accounts receivable, net                       552,095      363,437
  Receivable from vendors, net                    96,580       95,080
  Receivable from affiliates                       8,564        1,855
  Inventories                                    569,993      594,642
  Deferred income taxes                           16,183       17,994
  Current deferred assets                         14,704       13,990
  Other current assets                            16,166        9,887
                                             ------------ ------------
      Total current assets                     1,327,593    1,138,037

 Property and equipment, net                      58,246       36,698
 Goodwill and intangible assets, net             118,593       48,588
 Deferred income taxes                             6,833        6,716
 Long-term deferred assets                       120,612      139,111
 Other assets                                     17,156       13,584
                                             ------------ ------------

      Total assets                           $ 1,649,033  $ 1,382,734
                                             ============ ============

 Liabilities and Stockholders' Equity
 Current liabilities:
  Borrowings under securitization, term
   loans and lines of credit                 $   247,235  $    50,834
  Accounts payable                               505,230      462,480
  Payable to affiliates                           62,182       89,831
  Accrued liabilities                             91,697       81,818
  Current deferred liabilities                    36,047       29,516
  Income taxes payable                            13,578        6,693
                                             ------------ ------------
      Total current liabilities                  955,969      721,172

 Long-term borrowings                             47,958       47,967
 Long-term liabilities                            12,183       10,131
 Long-term deferred liabilities                   76,800       90,686
 Deferred income taxes                             1,311        1,232
                                             ------------ ------------
      Total liabilities                        1,094,221      871,188
                                             ------------ ------------

 Minority interest in subsidiary                     656            -
                                             ------------ ------------

 Stockholders' equity:
  Preferred stock                                      -            -
  Common stock                                        31           30
  Additional paid-in-capital                     188,386      181,188
  Accumulated other comprehensive income          20,864       13,999
  Retained earnings                              344,875      316,329
                                             ------------ ------------
      Total stockholders' equity                 554,156      511,546
                                             ------------ ------------

      Total liabilities and stockholders'
       equity                                $ 1,649,033  $ 1,382,734
                                             ============ ============
                          SYNNEX Corporation
                Consolidated Statements of Operations
             (in thousands, except for per share amounts)

                            Three      Three        Six        Six
                           Months      Months     Months     Months
                            Ended      Ended       Ended      Ended
                           May 31,    May 31,     May 31,    May 31,
                            2007        2006       2007       2006

 Revenue                 $1,684,808  $1,511,701 $3,273,084 $3,013,436

 Cost of revenue          1,600,563   1,443,353  3,114,415  2,880,078

 Gross profit                84,245      68,348    158,669    133,358

 Selling, general and
  expenses                   58,433      45,952    107,914     88,715

 Income from operations
  before non-operating
  items and income taxes     25,812      22,396     50,755     44,643

 Interest expense and
  finance charges, net        3,695       4,340      6,753     10,192
 Other (income) expense,
  net                          (904)        482     (1,062)       209

 Income from operations
  before income taxes        23,021      17,574     45,064     34,242

 Provision for income
  taxes                       8,288       6,257     16,456     12,242
 Minority interest in
  subsidiary                     62           -         62          -

 Net income              $   14,671  $   11,317 $   28,546 $   22,000

 Diluted earnings per
  share                  $     0.45  $     0.36 $     0.88 $     0.70
 Diluted weighted-
  average common shares
  outstanding                32,657      31,600     32,559     31,477

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

SOURCE: SYNNEX Corporation