SYNNEX Corporation
Jun 24, 2010

SYNNEX Corporation Reports Fiscal 2010 Second Quarter Results

EPS of $0.70 Surpasses Wall Street Estimates

FREMONT, Calif., Jun 24, 2010 (BUSINESS WIRE) -- SYNNEX Corporation (NYSE:SNX), a leading business process services company, today announced financial results for the fiscal second quarter ended May 31, 2010.

For the fiscal second quarter, revenue from continuing operations were $2.03 billion, an increase of 12.8% compared to $1.80 billion for the fiscal quarter ended May 31, 2009. The reported revenues of $2.03 billion reflect the impact of the Company's fiscal 2010 presentation of certain types of services and extended warranty contracts on a net basis. These contracts, which would have contributed approximately $90.3 million on a gross basis in the fiscal second quarter, are now accounted for on a net basis.

Income from continuing operations before non-operating items, income taxes and non-controlling interest was $43.4 million, compared to $30.0 million in the prior year fiscal second quarter and $39.0 million in the fiscal first quarter of 2010.

Amounts attributable to SYNNEX Corporation's, income from continuing operations, net of tax, for the fiscal second quarter was $24.8 million, or $0.70 per diluted share, exceeding average Wall Street estimates of $0.68. This compares with $17.4 million, or $0.51 per diluted share in the prior year fiscal second quarter.

"Our team delivered excellent results for the second quarter of 2010. Our revenue, income and EPS were all in line with our increased quarterly guidance from May 4, 2010. Once again, SYNNEX has gained market share while expanding margins, growing EPS and ROIC," stated Kevin Murai, President and Chief Executive Officer.

Financial Highlights:

Third Quarter Fiscal 2010 Outlook:

The following statements are based on the Company's current expectations for the third quarter of fiscal 2010. These statements are forward-looking and actual results may differ materially.

The calculation of diluted earnings per share for the third quarter of fiscal 2010 is based on a diluted weighted-average common share count of approximately 35.9 million.

"The outlook for the third quarter is based on our expectations of a stable demand environment and our continued focus on profitable growth," Mr. Murai continued. "We remain highly confident in our track record and our ability to continue to grow market share, EPS and ROIC."

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 http://ir.synnex.com. The conference call can be accessed by dialing 866-364-4389 in North America or 706-902-0319 outside North America. The confirmation code for the call is 80164405. 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 July 8, 2010.

About SYNNEX

SYNNEX Corporation, a Fortune 500 corporation, is a leading business process services company, servicing resellers, retailers 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 associates worldwide and operates in the United States, Canada, China, Japan, Mexico, the Philippines and the United Kingdom. Additional information about SYNNEX may be found online at www.synnex.com.

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 expectations of our revenues, net income and earnings per share for the third quarter of fiscal 2010, anticipated demand, our focus on profitability and our ability to grow market share, EPS and ROIC, 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; our ability to gain market share; variations in supplier-sponsored programs; changes in our costs and operating expenses; changes in foreign currency exchange rates; changes in the tax laws, 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 February 28, 2010 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 2010 SYNNEX Corporation. All rights reserved. SYNNEX, the SYNNEX Logo, Jack of All Games, the Jack of All Games 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.

Source: SYNNEX Corporation - F

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

May 31,

November 30,
2010 2009
(As Adjusted)(1)
Assets
Current assets:
Cash and cash equivalents $ 58,605 $ 37,816
Short-term investments 16,851 21,219
Accounts receivable, net 732,967 820,633
Receivable from vendors, net 120,636 99,610
Receivable from affiliates 711 5,144
Inventories 791,897 713,813
Current deferred tax assets 27,836 27,787
Current deferred assets 13,298 13,830
Other current assets 66,760 26,144
Assets held for sale - 74,185
Total current assets 1,829,561 1,840,181
Property and equipment, net 93,796 94,725
Goodwill 112,073 107,563
Intangible assets, net 19,126 18,066
Deferred tax assets 302 2,849
Long-term deferred assets 13,876 10,636
Other assets 35,713 25,890
Total assets $ 2,104,447 $ 2,099,910
Liabilities and equity
Current liabilities:
Borrowings under securitization, term loans and lines of credit $ 150,788 $ 150,740
Accounts payable 660,662 687,432
Payable to affiliates 58,663 82,728
Accrued liabilities 103,495 117,599
Current deferred liabilities 17,145 18,798
Income taxes payable 296 2,431
Liabilities related to assets held for sale - 18,148
Total current liabilities 991,049 1,077,876
Long-term borrowings 9,214 9,410
Convertible debt 128,992 126,785
Long-term liabilities 49,130 29,285
Long-term deferred liabilities 7,896 9,742
Deferred tax liabilities 5,546 8,077
Total liabilities 1,191,827 1,261,175
SYNNEX Corporation's stockholders' equity:
Preferred stock - -
Common stock 35 34
Additional paid-in capital 273,914 249,892
Accumulated other comprehensive income 24,965 27,151
Retained earnings 610,748 551,245

Total SYNNEX Corporation stockholders' equity

909,662 828,322

Non-controlling interest

2,958 10,413
Total equity 912,620 838,735
Total liabilities and equity $ 2,104,447 $ 2,099,910

(1) In May 2008, the Financial Accounting Standards Board issued a new accounting pronouncement, "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)". The provisions of the new accounting pronouncement were effective for the Company's fiscal year beginning December 1, 2009 and require retrospective application of all periods presented.

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

Three Months
Ended

Three Months
Ended

Six Months
Ended

Six Months
Ended

May 31, 2010 May 31, 2009 May 31, 2010 May 31, 2009
(As Adjusted)(1) (As Adjusted)(1)
Revenue $ 2,032,812 $ 1,802,705 $ 3,968,850 $ 3,523,075
Cost of revenue (1,916,145 ) (1,701,765 ) (3,743,022 ) (3,321,288 )
Gross profit 116,667 100,940 225,828 201,787
Selling, general and administrative expenses (73,233 ) (70,947 ) (143,441 ) (138,007 )

Income from continuing operations before non-operating items, income taxes and non-controlling interest

43,434 29,993 82,387 63,780
Interest expense and finance charges, net (3,736 ) (4,178 ) (7,545 ) (9,277 )
Other income (expense), net (93 ) 1,417 1,070 1,029
Income from continuing operations before income taxes and non-controlling interest 39,605 27,232 75,912 55,532
Provision for income taxes (14,651 ) (9,944 ) (27,718 ) (20,266 )
Income from continuing operations before non-controlling interest, net of tax 24,954 17,288 48,194 35,266
Income from discontinued operations, net of tax - 1,586 75 2,660
Gain on sale of discontinued operations, net of tax - - 11,351 -
Net income 24,954 18,874 59,620 37,926
Net income attributable to non-controlling interest (110 ) (241 ) (117 ) (402 )
Net income attributable to SYNNEX Corporation $ 24,844 $ 18,633 $ 59,503 $ 37,524
Amounts attributable to SYNNEX Corporation:
Income from continuing operations, net of tax $ 24,844 $ 17,402 $ 48,093 $ 35,422
Discontinued operations:
Income from discontinued operations, net of tax - 1,231 59 2,102
Gain on sale of discontinued operations, net of tax - - 11,351 -
Net income attributable to SYNNEX Corporation $ 24,844 $ 18,633 $ 59,503 $ 37,524
Earnings per share:
Basic :
Income from continuing operations $ 0.72 $ 0.53 $ 1.41 $ 1.10
Income from discontinued operations - 0.04 0.33 0.06
Net income per common share $ 0.72 $ 0.57 $ 1.74 $ 1.16
Diluted :
Income from continuing operations $ 0.70 $ 0.51 $ 1.36 $ 1.07
Income from discontinued operations - 0.04 0.32 0.06
Net income per common share $ 0.70 $ 0.55 $ 1.68 $ 1.13
Weighted-average common shares outstanding-basic 34,624 32,475 34,256 32,296
Weighted-average common shares outstanding-diluted 35,703 33,731 35,483 33,249

(1) In May 2008, the Financial Accounting Standards Board issued a new accounting pronouncement, "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)". The provisions of the new accounting pronouncement were effective for the Company's fiscal year beginning December 1, 2009 and require retrospective application of all periods presented.

SOURCE: SYNNEX Corporation

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

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