SYNNEX Corporation
Jan 11, 2006

SYNNEX Corporation Reports 2005 Fourth Quarter and Year End Results; Record Quarterly Revenues of $1.59 Billion; GAAP and Non GAAP Fourth Quarter Diluted EPS of $0.41

FREMONT, Calif., Jan 11, 2006 (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, 2005.

For the fourth quarter of fiscal 2005, revenues increased by 11% to $1.59 billion compared to $1.44 billion for the quarter ended November 30, 2004. Net income from continuing operations for the fourth quarter decreased 17% to $12.4 million, or $0.40 per share, compared with $15.0 million, or $0.49 per share in the prior year quarter.

Net income on a non-generally accepted accounting principles, or Non-GAAP, basis for the fourth quarter of fiscal 2005 was $12.7 million, or $0.41 per share, compared with net income of $13.1 million, or $0.43 per share in prior year quarter.

For the year ended November 30, 2005, revenues increased by 10% to $5.64 billion, compared to $5.15 billion for the year ended November 30, 2004. Net income from continuing operations for the year decreased 14% to $39.6 million, or $1.27 per share, compared with $46.1 million, or $1.53 per share for fiscal 2004.

Net income on a Non-GAAP basis was $42.2 million, or $1.36 per share for fiscal 2005, compared with net income of $43.3 million, or $1.44 per share in the prior year.

"We are pleased with our results and solid execution for the fourth quarter of fiscal 2005," said Robert Huang, President and Chief Executive Officer. "Excellent performance by our US and Canadian distribution teams enabled us to deliver results higher than initial expectations. We are encouraged by our current momentum and look forward to generating improved returns in fiscal 2006."

Fourth Quarter Financial Notes:

-- Distribution revenues were $1.47 billion, an increase of 15% over the prior year quarter.

-- Contract assembly revenues were $127.0 million, in-line with fourth quarter expectations.

-- Income from continuing operations was $24.4 million, or 1.53% of revenues, versus $23.1 million, or 1.60% of revenues in the prior year quarter. Income from continuing operations, excluding approximately $610,000 in expense associated with the completion of our secondary offering during the quarter, was $25.0 million, or 1.57% of revenues.

-- Income from distribution continuing operations was $21.4 million, or 1.46% of revenues, versus $19.0 million, or 1.49% of revenues in the prior year quarter. Income from distribution continuing operations, excluding the aforementioned secondary offering expenses, was $22.0 million, or 1.50% of revenues.

-- Income from assembly continuing operations was $3.0 million, or 2.34% of revenues, versus $4.1 million, or 2.53% of revenues in the prior year quarter. Income from assembly continuing operations, excluding the aforementioned secondary offering expenses, was $3.0 million, or 2.37% of revenues.

-- Fourth quarter depreciation and amortization were $1.2 million and $1.0 million, respectively. Fourth quarter capital expenditures were approximately $1.5 million.

-- Off-balance sheet borrowings totaled approximately $274.8 million at November 30, 2005.

First Quarter Fiscal 2006 Outlook:

The following statements are based on the Company's current expectations for the first quarter of fiscal 2006. The outlook amounts do not include any impact of stock option expensing and special charges or restructuring amounts that could be incurred. These statements are forward looking and actual results may differ materially.

-- Revenues are expected to be in the range of $1.42 billion to $1.47 billion.

-- Net income is expected to be in the range of $10.2 million to $10.9 million.

-- Earnings per share are expected to be in the range of $0.33 to $0.35.

The effect of stock option and other related non-cash compensation expense will approximate $0.02 per share in the first quarter of fiscal 2006.

The calculation of earnings per share for the first quarter of fiscal 2006 is based on an approximate weighted average diluted share count of 31.2 million.

Conference Call and Webcast

SYNNEX will be discussing its financial results and outlook on a conference call today at 9:00 a.m. (PST). A webcast of the call will be available at http://ir.synnex.com. The conference call can be accessed by dialing 866-814-1919 in North America or 703-639-1363 outside North America. The confirmation code for the call is 831075. 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 25, 2006.

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

The Non-GAAP data contained in this release are included with the intention of providing investors a more complete understanding of our operational results and trends, but should only be used in conjunction with results reported in accordance with Generally Accepted Accounting Principles, or GAAP. The Non-GAAP financial measures enable investors to analyze the base financial and operating performance of the Company and facilitate period-to-period comparisons and analysis of operating trends. Non-GAAP measures presented in this release or other releases, presentations and similar documents issued by the Company, exclude restructuring charges, non-operating settlement gains or losses, results associated with the Company's discontinued Japan operations, gains or losses, including foreign exchange, in the Company's equity investment in MCJ Co. Ltd. and other infrequent or unusual items. A detailed reconciliation of the adjustments between results calculated using GAAP and Non-GAAP in this release is contained in the attached financial summary.

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, could and should and the negative of these terms or other similar expressions. These statements, including statements regarding our expectations as to generating improved returns in fiscal 2006, our expectations of our revenues, net income and earnings per share for the first quarter of fiscal 2006, and expectations regarding our expenses for the first quarter of fiscal 2006, 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, 2005 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.

SYNNEX and the SYNNEX logo are trademarks of SYNNEX Corporation or its subsidiaries and should be treated as such. All rights reserved. All other company names mentioned herein are trademarks of their respective owners.

SYNNEX Corporation
                      Consolidated Balance Sheets
                            (in thousands)
                              (unaudited)

                                             November 30, November 30,
                                                 2005         2004
                                             ------------ ------------
Assets
Current assets:
      Cash and cash equivalents              $    13,636  $    28,726
      Restricted cash                                  -        2,020
      Short-term investments                      27,985        5,051
      Accounts receivable, net                   342,322      372,604
      Receivable from vendors, net                82,721       69,033
      Receivable from affiliates                   5,177        1,970
      Inventories                                494,617      408,346
      Deferred income taxes                       15,445       17,645
      Other current assets                        10,908        7,599
                                             ------------ ------------
                Total current assets             992,811      912,994

Property and equipment, net                       33,713       33,851
Goodwill and intangible assets                    43,004       48,722
Deferred income taxes                              4,781        1,421
Other assets                                       8,179        2,709
                                             ------------ ------------

                Total assets                 $ 1,082,488  $   999,697
                                             ============ ============

Liabilities and Stockholders' Equity
Current liabilities:
      Borrowings under term loans and lines
       of credit                             $    28,548  $    74,996
      Accounts payable                           448,339      386,638
      Payable to affiliates                       85,871       68,977
      Accrued liabilities                         68,619       62,611
      Other current liabilities                    6,085            -
      Income taxes payable                         4,820        2,837
                                             ------------ ------------
                Total current liabilities        642,282      596,059

Long-term borrowings                               1,153       13,074
Long-term liabilities                                840       17,772
Deferred income taxes                                988        1,054
                                             ------------ ------------
                Total liabilities                645,263      627,959
                                             ------------ ------------

Minority interest in subsidiaries                      -        2,082
                                             ------------ ------------

Stockholders' equity:
      Preferred stock                                  -            -
      Common stock                                    29           28
      Additional paid-in-capital                 161,195      145,423
      Unearned stock-based compensation           (1,644)           -
      Accumulated other comprehensive
       income                                     12,701       12,086
      Retained earnings                          264,944      212,119
                                             ------------ ------------
           Total stockholders' equity            437,225      369,656
                                             ------------ ------------

                   Total liabilities and
                    stockholders' equity     $ 1,082,488  $   999,697
                                             ============ ============

                          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, 2005    30, 2004     30, 2005    30, 2004
                       -----------------------------------------------

Revenue                $1,593,088  $1,440,815  $5,640,769  $5,150,447

Cost of revenue         1,526,198   1,379,555   5,402,211   4,935,075
                       -----------------------------------------------

Gross profit               66,890      61,260     238,558     215,372

Selling, general and
 administrative
 expenses                  42,501      38,150     159,621     137,712
                       -----------------------------------------------

Income from continuing
 operations before
 non-operating items,
 income taxes and
 minority interest         24,389      23,110      78,937      77,660

Interest expense and
 finance charges, net       5,928       2,793      17,036       7,959
Other (income)
 expense, net              (1,058)        (16)     (1,559)        900
                       -----------------------------------------------

Income from continuing
 operations before
 income taxes and
 minority interest         19,519      20,333      63,460      68,801

Provision for income
 taxes                      7,105       5,342      23,912      23,091
Minority interest in
 subsidiary                     -         (56)        (58)       (376)
                       -----------------------------------------------

Income from continuing
 operations                12,414      15,047      39,606      46,086

Income from
 discontinued
 operations, net of
 tax                            -         205         511         479

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

Net Income             $   12,799  $   15,252  $   52,825  $   46,565
                       -----------------------------------------------

Diluted earnings per
 share from continuing
 operations            $     0.40  $     0.49  $     1.27  $     1.53
                       -----------------------------------------------

Diluted earnings per
 share                 $     0.41  $     0.50  $     1.70  $     1.55
                       -----------------------------------------------

Diluted weighted
 average common shares
 outstanding               31,103      30,711      31,131      30,111
                       -----------------------------------------------


The following tables reconcile GAAP to Non GAAP financial information
----------------------------------------------------------------------

1. Operating Expenses
    Reconciliation:
                                 Three     Three     Fiscal    Fiscal
                                 Months    Months     Year      Year
                                 Ended     Ended     Ended     Ended
                                November  November  November  November
                                30, 2005  30, 2004  30, 2005  30, 2004
                               ---------------------------------------

Operating Expenses -- GAAP     $ 42,501  $ 38,150  $159,621  $137,712
Canadian restructuring charges        -         -    (2,482)        -
Secondary offering expenses        (610)        -      (610)        -
                               ---------------------------------------
Operating Expenses -- Non GAAP $ 41,891  $ 38,150  $156,529  $137,712
                               =======================================

2. Income from Distribution
    Continuing Operations
    Reconciliation:
                                 Three     Three     Fiscal    Fiscal
                                 Months    Months     Year      Year
                                 Ended     Ended     Ended     Ended
                                November  November  November  November
                                30, 2005  30, 2004  30, 2005  30, 2004
                               ---------------------------------------

Income from Distribution
 Continuing Operations before
 non-operating items, income
 taxes and minority interest
 -- GAAP                       $ 21,421  $ 19,006  $ 65,912  $ 63,255
Canadian restructuring charges        -         -     2,482         -
Secondary offering expenses         561         -       561         -
                               ---------------------------------------
Income from Distribution
 Continuing Operations before
 non-operating items, income
 taxes and minority interest
 -- Non GAAP                   $ 21,982  $ 19,006  $ 68,955  $ 63,255
                               =======================================

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, 2005  30, 2004  30, 2005  30, 2004
                               ---------------------------------------

Income from Contract Assembly
 Continuing Operations before
 non-operating items, income
 taxes and minority interest
 -- GAAP                       $  2,968  $  4,104  $ 13,025  $ 14,405
Canadian restructuring charges        -         -         -         -
Secondary offering expenses          49         -        49         -
                               ---------------------------------------
Income from Contract Assembly
 Continuing Operations before
 non-operating items, income
 taxes and minority interest
 -- Non GAAP                   $  3,017  $  4,104  $ 13,074  $ 14,405
                               =======================================

4. Operating Income
    Reconciliation:
                                 Three     Three     Fiscal    Fiscal
                                 Months    Months     Year      Year
                                 Ended     Ended     Ended     Ended
                                November  November  November  November
                                30, 2005  30, 2004  30, 2005  30, 2004
                               ---------------------------------------

Income from Continuing
 Operations before non-
 operating items, income taxes
 and minority interest -- GAAP $ 24,389  $ 23,110  $ 78,937  $ 77,660
Canadian restructuring charges        -         -     2,482         -
Secondary offering expenses         610         -       610         -
                               ---------------------------------------
Income from Continuing
 Operations before non-
 operating items, income taxes
 and minority interest -- Non
 GAAP                          $ 24,999  $ 23,110  $ 82,029  $ 77,660
                               =======================================

5. Net Income Reconciliation:
                                 Three     Three     Fiscal    Fiscal
                                 Months    Months     Year      Year
                                 Ended     Ended     Ended     Ended
                                November  November  November  November
                                30, 2005  30, 2004  30, 2005  30, 2004
                               ---------------------------------------

Net Income -- GAAP             $ 12,799  $ 15,252  $ 52,825  $ 46,565
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               -      (205)     (511)     (479)
Gain on Japan investment, net
 of tax                            (642)        -      (204)        -
Gain on sale of Japan, net of
 tax                               (385)        -   (12,708)        -
Tax valuation adjustment              -    (1,971)        -    (1,971)
Gain on settlement of UK
 Acquisition, net of tax              -         -         -      (784)
                               ---------------------------------------
Net Income -- Non GAAP         $ 12,675  $ 13,076  $ 42,243  $ 43,331
                               =======================================

6. Diluted Earnings Per Share
    Reconciliation:
                                 Three     Three     Fiscal    Fiscal
                                 Months    Months     Year      Year
                                 Ended     Ended     Ended     Ended
                                November  November  November  November
                                30, 2005  30, 2004  30, 2005  30, 2004
                               ---------------------------------------

Diluted Earnings Per Share --
 GAAP                          $   0.41  $   0.50  $   1.70  $   1.55
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               -     (0.01)    (0.02)    (0.02)
Gain on Japan investment, net
 of tax                           (0.02)        -     (0.01)        -
Gain on sale of Japan, net of
 tax                              (0.01)        -     (0.40)        -
Tax valuation adjustment              -     (0.06)        -     (0.06)
Gain on settlement of UK
 Acquisition, net of tax              -         -         -     (0.03)
                               ---------------------------------------
Diluted Earnings Per Share --
 Non GAAP                      $   0.41  $   0.43  $   1.36  $   1.44
                               =======================================

SOURCE: SYNNEX Corporation

SYNNEX Corporation
Laura Kelley,
510-668-3715
laurack@synnex.com