SYNNEX Corporation
Jan 11, 2011

SYNNEX Corporation Reports Fiscal 2010 Fourth Quarter and Year-End Results

Strong revenue growth and record operating margin from continuing operations

FREMONT, Calif.--(BUSINESS WIRE)-- SYNNEX Corporation (NYSE:SNX), a leading business process services company, today announced financial results for the fiscal fourth quarter and year ended November 30, 2010.

For the fiscal fourth quarter, revenue from continuing operations was $2.47 billion, an increase of 12.3% compared to $2.20 billion for the fiscal fourth quarter ended November 30, 2009. Revenue for the fiscal year 2010 of $8.61 billion increased 11.6% from $7.72 billion in the prior year. Revenue in the fiscal fourth quarter and the full fiscal year 2010 reflects the impact of the previously announced presentation of certain types of services and extended warranty contracts on a net basis beginning in fiscal 2010. These contracts would have contributed approximately $129.7 million to revenue on a gross basis in the fiscal fourth quarter and $395.1 million for the full fiscal year 2010.

Income from continuing operations before non-operating items, income taxes and non-controlling interest was a record $64.6 million, or 2.62% of revenue for the quarter and $199.2 million, or 2.31% of revenue for the fiscal year 2010. These results compare to $47.7 million in the prior year fourth quarter and $149.6 million for the prior fiscal year.

Income from continuing operations, net of tax, for the fiscal fourth quarter was $37.5 million, or $1.04 per diluted share, and $116.5 million, or $3.26 per share for the fiscal year. This compares with $28.8 million, or $0.83 per diluted share, in the fourth quarter of fiscal 2009 and $85.8 million, or $2.53 per diluted share, in the prior fiscal year.

"We are pleased with our strong operating performance for the fiscal fourth quarter and full year 2010. Both our distribution and GBS business segments contributed to our achievements," stated Kevin Murai, President and Chief Executive Officer. "In 2011, we believe IT spending will be steady and SYNNEX will again outperform the market. We are excited about our profitable growth opportunities with our recent acquisitions in Japan and in our GBS business. The SYNNEX team remains committed to long-term growth in revenue, margins and earnings."

Fiscal 2010 Fourth Quarter Financial Highlights:

Fiscal Year 2010 Financial Highlights:

Fiscal 2011 First Quarter Outlook:

The following statements are based on the Company's current expectations for the first quarter of fiscal 2011. These statements are forward-looking and actual results may differ materially.

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 29920740. 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, 2011.

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 8,000 full-time and part-time associates worldwide. 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 IT spending, our performance, our growth opportunities and profitability, anticipated benefits of our recent acquisitions, our strategy, our operating expenses, and our revenue, net income, integration and restructuring charges, and diluted earnings per share for the first quarter of fiscal 2011, 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: our ability to successfully integrate our recent acquisitions; diversion of management as a result of our recent acquisitions; loss of vendors and suppliers as a result of our recent acquisitions; market acceptance and product life of the platforms sold by companies recently acquired; general economic conditions and any weakness in IT and consumer electronics 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 August 31, 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 2011 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.

SNX-F

SYNNEX Corporation
Consolidated Balance Sheets
(in thousands)
(unaudited)
   
November 30, November 30,
2010 2009
(As Adjusted)(1)
Assets
Current assets:

Cash and cash equivalents

$ 88,038 $ 37,816

Short-term investments

11,419 21,219

Accounts receivable, net

986,917 820,633

Receivable from vendors, net

132,409 99,610

Receivable from affiliates

5,080 5,144

Inventories

912,237 713,813

Current deferred tax assets

33,063 27,787

Other current assets

40,030 39,974

Assets held for sale

  -   74,185

Total current assets

2,209,193 1,840,181
 
Property and equipment, net 91,995 94,725
Goodwill 139,580 107,563
Intangible assets, net 28,271 18,066
Deferred tax assets 605 2,849
Other assets   30,217   36,526

Total assets

$ 2,499,861 $ 2,099,910
 
Liabilities and equity
Current liabilities:

Borrowings under securitization, term loans and lines of credit

$ 245,973 $ 150,740

Accounts payable

896,401 687,432

Payable to affiliates

3,195 82,728

Accrued liabilities

166,861 136,397

Income taxes payable

1,578 2,431

Liabilities related to assets held for sale

  -   18,148

Total current liabilities

1,314,008 1,077,876
 
Long-term borrowings 9,044 9,410
Convertible debt 131,289 126,785
Long-term liabilities 49,431 39,027
Deferred tax liabilities   3,262   8,077

Total liabilities

  1,507,034   1,261,175
 
SYNNEX Corporation's stockholders' equity:

Preferred stock

- -

Common stock

36 34

Additional paid-in capital

285,406 249,892

Accumulated other comprehensive income

28,035 27,151

Retained earnings

  679,193   551,245

Total SYNNEX Corporation stockholders' equity

992,670 828,322

Non-controlling interest

  157   10,413

Total equity

  992,827   838,735

Total liabilities and equity

$ 2,499,861 $ 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

Fiscal Year Ended Fiscal Year Ended
November 30, 2010   November 30, 2009   November 30, 2010   November 30, 2009
(As Adjusted)(1) (As Adjusted)(1)
 
Revenue $ 2,468,225 $ 2,198,062 $ 8,614,141 $ 7,719,197
 
Cost of revenue   (2,327,306 )   (2,082,796 )   (8,122,525 )   (7,296,167 )
 
Gross profit 140,919 115,266 491,616 423,030
 
Selling, general and administrative expenses   (76,310 )   (67,596 )   (292,466 )   (273,381 )
 
Income from continuing operations before non-operating items, income taxes
and non-controlling interest 64,609 47,670 199,150 149,649
 
Interest expense and finance charges, net (4,984 ) (4,535 ) (17,114 ) (18,032 )
Other income (expense), net   780     1,278     1,550     3,036  
 
Income from continuing operations before income taxes and non-controlling interest 60,405 44,413 183,586 134,653
 
Provision for income taxes   (22,873 )   (15,562 )   (66,910 )   (49,028 )
 
Income from continuing operations before non-controlling interest, net of tax 37,532 28,851 116,676 85,625
 
Income from discontinued operations, net of tax - 1,347 75 5,199
Gain on sale of discontinued operations, net of tax   -     -     11,351     -  
Net income 37,532 30,198 128,102 90,824
 
Net income attributable to non-controlling interest   (1 )   (520 )   (154 )   (1,157 )
Net income attributable to SYNNEX Corporation $ 37,531   $ 29,678   $ 127,948   $ 89,667  
 
 
Amounts attributable to SYNNEX Corporation:
Income from continuing operations, net of tax $ 37,531 $ 28,835 $ 116,538 $ 85,758
Discontinued operations:
Income from discontinued operations, net of tax - 843 59 3,909
Gain on sale of discontinued operations, net of tax - - 11,351 -
       
Net income attributable to SYNNEX Corporation $ 37,531   $ 29,678   $ 127,948   $ 89,667  
 
 
Earnings per share attributable to SYNNEX Corporation:
Basic :
Income from continuing operations $ 1.06 $ 0.86 $ 3.35 $ 2.62
Discontinued operations   -     0.03     0.33     0.12  
Net income per common share $ 1.06   $ 0.89   $ 3.68   $ 2.74  
 
Diluted :
Income from continuing operations $ 1.04 $ 0.83 $ 3.26 $

2.53

Discontinued operations   -     0.02     0.32    

0.11

 
Net income per common share $ 1.04   $ 0.85   $ 3.58   $ 2.64  
Weighted-average common shares outstanding-basic   35,351     33,419     34,737     32,711  
Weighted-average common shares outstanding-diluted   36,149     34,963     35,757     34,013  
 
 
 
(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
Lori Barker, 510-668-3715
Sr. Director, Investor Relations
lorib@synnex.com

Source: SYNNEX Corporation

News Provided by Acquire Media