SYNNEX Corporation
Mar 22, 2007

SYNNEX Corporation Reports 2007 First Quarter Results

FREMONT, Calif.--(BUSINESS WIRE)--March 22, 2007--SYNNEX Corporation (NYSE:SNX), a global IT supply chain services company, today announced financial results for the first quarter ended February 28, 2007.

For the first quarter of fiscal 2007, revenues increased by 5.8% to $1.59 billion compared to $1.50 billion for the quarter ended February 28, 2006. Net income for the first quarter increased by 29.9% to $13.9 million, or $0.43 per share, compared with $10.7 million, or $0.34 per share in the prior year quarter.

"We continue to deliver improved results due to increased efficiencies in our business model and solid execution in our core distribution business," said Robert T. Huang, President and Chief Executive Officer. "Recent investments intended to enhance our distribution segment and further develop our Business Process Outsourcing revenue will enable our ongoing overall growth strategy. During the quarter I was pleased to welcome our new team members from Link2Support and PC Wholesale and I look forward to working with them to further develop the services we offer our vendors and customers within the supply chain."

First Quarter Financial Notes:

Second Quarter Fiscal 2007 Outlook:

The following statements are based on the Company's current expectations for the second quarter of fiscal 2007. The outlook amounts do not include any impact of special charges or restructuring amounts that could be incurred. These statements are forward-looking and actual results may differ materially.

The calculation of earnings per share for the second quarter of fiscal 2007 is based on an approximate weighted-average diluted share count of 32.8 million.

On March 5, 2007, SYNNEX Canada completed the purchase, for approximately $12 million, of a logistics facility in Guelph, Canada where it will consolidate its two existing Ontario Canada area logistics facilities. Over the next three quarters, the Company expects to incur up to $0.01 on an earnings per share basis, per quarter, in additional expenses to operate the new and existing facilities until the integration is complete. This amount is factored into the above outlook. The Company may incur additional non-recurring expenses when the existing facilities are closed.

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 1057975. A replay of the conference call will be available at approximately two hours after the conference call has concluded and will be archived until April 5, 2007.


Founded in 1980, SYNNEX Corporation is a global IT supply chain services company offering a comprehensive range of services to original equipment manufacturers, software publishers and reseller customers worldwide. SYNNEX offers product distribution, related logistics services, business process outsourcing and contract assembly and works with the leading industry suppliers of IT systems, peripherals, system components, software and networking equipment. 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 efforts to grow our overall growth strategy, anticipated benefits of our acquisition of Link2Support and PC Wholesale, our expectations of our revenues, net income and earnings per share for the second quarter of fiscal 2007, and the consolidation of our Canadian facilities and related 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 and other risks and uncertainties detailed in our Form 10-K for the fiscal year ended November 30, 2006 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)

                                             February 28, November 30,
                                                2007         2006
                                             ------------ ------------
Current assets:
  Cash and cash equivalents                   $   22,473   $   27,881
  Short-term investments                          14,986       13,271
  Accounts receivable, net                       589,512      363,437
  Receivable from vendors, net                    88,880       95,080
  Receivable from affiliates                       5,210        1,855
  Inventories                                    524,300      594,642
  Deferred income taxes                           16,897       17,994
  Current deferred assets                         13,713       13,990
  Other current assets                            11,755        9,887
                                             ------------ ------------
    Total current assets                       1,287,726    1,138,037

Property and equipment, net                       40,182       36,698
Goodwill and intangible assets, net               73,410       48,588
Deferred income taxes                              6,722        6,716
Long-term deferred assets                        126,244      139,111
Other assets                                      15,993       13,584
                                             ------------ ------------

    Total assets                              $1,550,277   $1,382,734
                                             ============ ============

Liabilities and Stockholders' Equity
Current liabilities:
  Borrowings under securitization, term
   loans and lines of credit                  $  243,973   $   50,834
  Accounts payable                               461,657      462,480
  Payable to affiliates                           70,025       89,831
  Accrued liabilities                             74,196       81,818
  Current deferred liabilities                    28,389       29,516
  Income taxes payable                            10,048        6,693
                                             ------------ ------------
    Total current liabilities                    888,288      721,172

Long-term borrowings                              41,715       47,967
Long-term liabilities                             11,048       10,131
Long-term deferred liabilities                    81,432       90,686
Deferred income taxes                              1,205        1,232
                                             ------------ ------------
    Total liabilities                          1,023,688      871,188
                                             ------------ ------------

Stockholders' equity:
  Preferred stock                                      -            -
  Common stock                                        30           30
  Additional paid-in-capital                     184,173      181,188
  Accumulated other comprehensive income          12,182       13,999
  Retained earnings                              330,204      316,329
                                             ------------ ------------
    Total stockholders' equity                   526,589      511,546
                                             ------------ ------------

    Total liabilities and stockholders'
     equity                                   $1,550,277   $1,382,734
                                             ============ ============
                          SYNNEX Corporation
                Consolidated Statements of Operations
             (in thousands, except for per share amounts)

                                             Three Months Three Months
                                                Ended        Ended
                                             February 28, February 28,
                                                2007         2006

Revenue                                       $1,588,276   $1,501,735

Cost of revenue                                1,513,852    1,436,725

Gross profit                                      74,424       65,010

Selling, general and administrative expenses      49,481       42,763

Income from operations before non-operating
 items and income taxes                           24,943       22,247

Interest expense and finance charges, net          3,058        5,853
Other (income) expense, net                         (158)        (273)

Income from operations before income taxes        22,043       16,667

Provision for income taxes                         8,168        5,984

Net income                                    $   13,875   $   10,683

Diluted earnings per share                    $     0.43   $     0.34
Diluted weighted-average common shares
 outstanding                                      32,372       31,204

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

SOURCE: SYNNEX Corporation