SYNNEX Corporation
Jan 9, 2007

SYNNEX Corporation Reports 2006 Fourth Quarter and Year End Results

FREMONT, Calif., Jan 09, 2007 (BUSINESS WIRE) -- SYNNEX Corporation (NYSE:SNX), a global IT supply chain services company, today announced financial results for the fourth quarter and fiscal year ended November 30, 2006.

For the fourth quarter of fiscal 2006, revenues increased by 9.1% to $1.74 billion compared to $1.59 billion for the quarter ended November 30, 2005. Net income from continuing operations for the fourth quarter increased by 25.7% to $15.6 million, or $0.48 per share, compared with $12.4 million, or $0.40 per share in the prior year quarter.

Net income from continuing operations on a non-generally accepted accounting principles, or non-GAAP, basis for the fourth quarter of fiscal 2006 was $16.3 million, or $0.50 per share, which is net income adjusted to exclude share-based compensation expense of $0.7 million, or $0.02 per share, compared with net income of $12.7 million, or $0.41 per share in the prior year quarter. Net income calculated in accordance with GAAP prior to fiscal 2006 did not include share-based compensation expense due to the adoption of SFAS 123R in the first quarter of fiscal 2006. The non-GAAP results of fourth quarter of fiscal 2005 exclude, net of tax, $0.4 million in secondary offering expenses, $0.5 million in line of credit renewal expenses and $0.6 million in investment gains.

For the year ended November 30, 2006, revenues increased by 12.5% to $6.34 billion, compared to $5.64 billion for the year ended November 30, 2005. Net income from continuing operations for the year increased 29.7% to $51.4 million, or $1.61 per share, compared with $39.6 million, or $1.27 per share for fiscal 2005.

Net income from continuing operations on a non-GAAP basis for fiscal 2006 was $53.8 million, or $1.68 per share which is net income adjusted to exclude share-based compensation expenses of $2.4 million, net of tax, or $0.07 per share, compared with net income of $42.2 million, or $1.36 per share in the prior year. Net income calculated in accordance with GAAP prior to fiscal 2006 did not include share-based compensation expense. The non-GAAP results of fiscal 2005 exclude, net of tax, $1.6 million in restructuring charges, $0.4 million in secondary offering expenses, $0.5 million in line of credit renewal expenses, $0.3 million penalty on early debt payment and $0.2 million in investment gains.

"I am very pleased with our fourth quarter and fiscal 2006 performance. Our solid results were made possible by our continued improvement of our main distribution businesses and the investments we have made in new businesses over the past few years. Our focus on productivity improvement and increasing value added service offerings to our customers and vendors has been working," said Robert T. Huang, President and Chief Executive Officer. "For our fiscal 2007 we will continue to focus our efforts on growing our core distribution operations as well as making additional investments in new businesses to further enhance and diversify our offerings."

Fourth Quarter Financial Notes:

First Quarter Fiscal 2007 Outlook:

The following statements are based on the Company's current expectations for the first 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 first quarter of fiscal 2007 is based on an approximate weighted average diluted share count of 32.9 million.

Conference Call and Webcast

SYNNEX will be discussing its financial results and outlook on a conference call today at 2:00 p.m. (PST). A webcast of the call will be available at http://ir.synnex.com. The conference call can be accessed by dialing 866-256-3815 in North America or 703-639-1212 outside North America. The confirmation code for the call is 1018105. A replay of the conference call will be available at http://ir.synnex.com approximately two hours after the conference call has concluded and will be archived until January 23, 2007.

About SYNNEX

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, demand generation marketing 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 www.synnex.com.

Use of Non-GAAP Financial Information

To supplement the financial results presented in accordance with GAAP, SYNNEX uses the following non-GAAP financial measures: non-GAAP operating expenses, non-GAAP income from distribution continuing operations, non-GAAP income from contract assembly continuing operations, non-GAAP operating income, non-GAAP net income and non-GAAP diluted earnings per share. The Company presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate operating results. Because these non-GAAP measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

SYNNEX management uses each of the non-GAAP financial measures internally to understand, manage and evaluate its business. SYNNEX management believes it is useful for the Company and investors to review, as applicable, both GAAP information, which includes share-based compensation expense, Canadian restructuring charges, secondary offering expenses, penalty on early debt payment, gain on sale of Japan operation, income from discontinued operations, and gain on Japan investment and the non-GAAP measures, which exclude this information, in order to assess the performance of the Company's continuing businesses and for planning and forecasting in future periods. Each of these non-GAAP measures is intended to provide investors with an understanding of the Company's operational results and trends that more readily enable investors to analyze SYNNEX' base financial and operating performance and to facilitate period-to-period comparisons and analysis of operational trends. The management of SYNNEX believes each of these non-GAAP financial measures is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making.

The Company's non-GAAP financial measures reflect adjustments based on the following items:

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 core distribution operations, our investment in new businesses, our goal to enhance and diversify our offerings, our expectations of our revenues, net income and earnings per share for the first quarter of fiscal 2007, the effect of share-based compensation and other non-compensation expenses on our revenues, the anticipated benefits to our management, investors and analysts of our non-GAAP financial measures and the purpose of using non-GAAP financial measures, 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-Q for the fiscal quarter ended August 31, 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)
                             (unaudited)



                                                November    November
                                                   30,         30,
                                                  2006        2005
                                               ----------- -----------
Assets
Current assets:
   Cash and cash equivalents                      $27,881     $13,636
   Short-term investments                          13,271      27,985
   Accounts receivable, net                       363,437     342,322
   Receivable from vendors, net                    95,080      82,721
   Receivable from affiliates                       1,855       5,177
   Inventories                                    594,642     494,617
   Deferred income taxes                           17,994      15,445
   Current deferred assets                         13,990           -
   Other current assets                             9,887      10,908
                                               ----------- -----------
       Total current assets                     1,138,037     992,811

Property and equipment, net                        36,698      33,713
Goodwill and intangible assets, net                48,588      43,004
Deferred income taxes                               6,716       4,781
Long-term deferred assets                         139,111           -
Other
 assets                                            13,584       8,179
                                               ----------- -----------

       Total assets                            $1,382,734  $1,082,488
                                               =========== ===========

Liabilities and Stockholders' Equity
Current liabilities:
   Borrowings under term loans and lines of
    credit                                        $50,834     $28,548
   Accounts payable                               462,480     448,339
   Payable to affiliates                           89,831      85,871
   Accrued liabilities                             81,818      68,619
   Other current liabilities                            -       6,085
   Current deferred liabilities                    29,516           -
   Income taxes payable                             6,693       4,820
                                               ----------- -----------
       Total current liabilities                  721,172     642,282

Long-term borrowings                               47,162       1,153
Long-term liabilities                              10,936         840
Long-term deferred liabilities                     90,686           -
Deferred income taxes                               1,232         988
                                               ----------- -----------
       Total liabilities                          871,188     645,263
                                               ----------- -----------

Stockholders' equity:
   Preferred stock                                      -           -
   Common stock                                        30          29
   Additional paid-in-capital                     181,188     159,551
   Accumulated other comprehensive income          13,999      12,701
   Retained earnings                              316,329     264,944
                                               ----------- -----------
       Total stockholders' equity                 511,546     437,225
                                               ----------- -----------

       Total liabilities and stockholders'
        equity                                 $1,382,734  $1,082,488
                                               =========== ===========

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



                         Three       Three
                          Months      Months   Fiscal Year Fiscal Year
                         Ended       Ended       Ended       Ended
                        November    November    November    November
                         30, 2006    30, 2005    30, 2006    30, 2005
                       ----------- ----------- ----------- -----------

Revenue                $1,737,874  $1,593,088  $6,343,514  $5,640,769

Cost of revenue         1,658,591   1,526,198   6,058,155   5,402,211
                       ----------- ----------- ----------- -----------

Gross profit               79,283      66,890     285,359     238,558

Selling, general and
 administrative
 expenses                  51,197      42,501     189,117     159,621
                       ----------- ----------- ----------- -----------

Income from continuing
 operations before non-
 operating items,
 income taxes and
 minority interest         28,086      24,389      96,242      78,937

Interest expense and
 finance charges, net       3,724       5,926      16,659      17,036

Other (income) expense,
 net                         (515)     (1,056)       (570)     (1,559)
                       ----------- ----------- ----------- -----------

Income from continuing
 operations before
 income taxes and
 minority interest         24,877      19,519      80,153      63,460

Provision for income
 taxes                      9,064       7,105      28,320      23,912

Minority interest in
 subsidiary                   207           -         448         (58)
                       ----------- ----------- ----------- -----------

Income from continuing
 operations                15,606      12,414      51,385      39,606

Income from
 discontinued
 operations, net of tax         -           -           -         511

Gain on sale of
 discontinued
 operations, net of tax         -         385           -      12,708
                       ----------- ----------- ----------- -----------

Net Income                $15,606     $12,799     $51,385     $52,825
                       ----------- ----------- ----------- -----------

Diluted earnings per
 share from continuing
 operations                 $0.48       $0.40       $1.61       $1.27
                       ----------- ----------- ----------- -----------

Diluted earnings per
 share                      $0.48       $0.41       $1.61       $1.70
                       ----------- ----------- ----------- -----------

Diluted weighted
 average common shares
 outstanding               32,565      31,103      32,014      31,131
                       ----------- ----------- ----------- -----------

The following tables reconcile GAAP to non-GAAP financial information
 (unaudited)
----------------------------------------------------------------------

1. Operating Expenses
 Reconciliation:

                                Three     Three     Fiscal    Fiscal
                                Months    Months     Year      Year
                                Ended      Ended     Ended     Ended
                               November   November  November  November
                               30, 2006   30, 2005  30, 2006  30, 2005
                              ---------- --------- --------- ---------

Operating Expenses - GAAP       $51,197   $42,501  $189,117  $159,621
Canadian restructuring charges        -         -         -    (2,482)
Secondary offering expenses           -      (610)        -      (610)
Share-based compensation
 expense                         (1,125)        -    (3,710)        -
                              ---------- --------- --------- ---------
Operating Expenses - non-GAAP   $50,072   $41,891  $185,407  $156,529
                              ========== ========= ========= =========


2. Income from Distribution
 Continuing Operations
 Reconciliation:

                                Three     Three     Fiscal    Fiscal
                                Months    Months     Year      Year
                                Ended      Ended     Ended     Ended
                               November   November  November  November
                               30, 2006   30, 2005  30, 2006  30, 2005
                              ---------- --------- --------- ---------

Income from Distribution
 Continuing Operations before
 non-operating items, income
 taxes and minority interest -
 GAAP                           $26,575   $21,421   $88,458   $65,912
Canadian restructuring charges        -         -         -     2,482
Secondary offering expenses           -       561         -       561
Share-based compensation
 expense                          1,040         -     3,407         -
                              ---------- --------- --------- ---------
Income from Distribution
 Continuing Operations before
 non-operating items, income
 taxes and minority interest -
 non-GAAP                       $27,615   $21,982   $91,865   $68,955
                              ========== ========= ========= =========


3. Income from Contract
 Assembly Continuing
 Operations Reconciliation:

                                Three     Three     Fiscal    Fiscal
                                Months    Months     Year      Year
                                Ended      Ended     Ended     Ended
                               November   November  November  November
                               30, 2006   30, 2005  30, 2006  30, 2005
                              ---------- --------- --------- ---------

Income from Contract Assembly
 Continuing Operations before
 non-operating items, income
 taxes and minority interest -
 GAAP                            $1,511    $2,968    $7,784   $13,025
Secondary offering expenses           -        49         -        49
Share-based compensation
 expense                             85         -       303         -
                              ---------- --------- --------- ---------
Income from Contract Assembly
 Continuing Operations before
 non-operating items, income
 taxes and minority interest -
 non-GAAP                        $1,596    $3,017    $8,087   $13,074
                              ========== ========= ========= =========


4. Operating Income
 Reconciliation:

                                Three     Three     Fiscal    Fiscal
                                Months    Months     Year      Year
                                Ended      Ended     Ended     Ended
                               November   November  November  November
                               30, 2006   30, 2005  30, 2006  30, 2005
                              ---------- --------- --------- ---------

Income from Continuing
 Operations before non-
 operating items, income taxes
 and minority interest - GAAP   $28,086   $24,389   $96,242   $78,937
Canadian restructuring charges        -         -         -     2,482
Secondary offering expenses                   610         -       610
Share-based compensation
 expense                          1,125         -     3,710         -
                              ---------- --------- --------- ---------
Income from Continuing
 Operations before non-
 operating items, income taxes
 and minority interest - non-
 GAAP                           $29,211   $24,999   $99,952   $82,029
                              ========== ========= ========= =========


5. Net Income Reconciliation:

                                Three     Three     Fiscal    Fiscal
                                Months    Months     Year      Year
                                Ended      Ended     Ended     Ended
                               November   November  November  November
                               30, 2006   30, 2005  30, 2006  30, 2005
                              ---------- --------- --------- ---------

Net Income - GAAP               $15,606   $12,799   $51,385   $52,825
Share-based compensation
 expense, net of tax                715         -     2,391         -
Canadian restructuring
 charges, net of tax                  -         -         -     1,605
Secondary offering expenses,
 net of tax                           -       384         -       384
Canadian line of credit
 expenses, net of tax                 -       519         -       519
Penalty on early debt payment,
 net of tax                           -         -         -       333
Income from discontinued
 operations, net of tax               -         -         -      (511)
Gain on Japan investment, net
 of tax                               -      (642)        -      (204)
Gain on sale of Japan
 Operations, net of tax               -      (385)        -   (12,708)
                              ---------- --------- --------- ---------
Net Income - non-GAAP           $16,321   $12,675   $53,776   $42,243
                              ========== ========= ========= =========


6. Diluted Earnings Per Share
 Reconciliation:

                                Three     Three     Fiscal    Fiscal
                                Months    Months     Year      Year
                                Ended      Ended     Ended     Ended
                               November   November  November  November
                               30, 2006   30, 2005  30, 2006  30, 2005
                              ---------- --------- --------- ---------

Diluted Earnings Per Share -
 GAAP                             $0.48     $0.41     $1.61     $1.70
Share-based compensation
 expense, net of tax               0.02         -      0.07         -
Canadian restructuring
 charges, net of tax                  -         -         -      0.05
Secondary offering expenses,
 net of tax                           -      0.01         -      0.01
Canadian line of credit
 expenses, net of tax                 -      0.02         -      0.02
Penalty on early debt payment,
 net of tax                           -         -         -      0.01
Income from discontinued
 operations, net of tax               -         -         -     (0.02)
Gain on Japan investment, net
 of tax                               -     (0.02)        -     (0.01)
Gain on sale of Japan
 Operations, net of tax               -     (0.01)        -     (0.40)
                              ---------- --------- --------- ---------
Diluted Earnings Per Share -
 non-GAAP                         $0.50     $0.41     $1.68     $1.36
                              ========== ========= ========= =========

SOURCE: SYNNEX Corporation


SYNNEX Corporation
Laura Crowley, 510-668-3715
Director of Investor Relations and Public Relations
laurack@synnex.com