SYNNEX Corporation
Mar 24, 2011

SYNNEX Corporation Reports Fiscal 2011 First Quarter

Strong Growth and Profitability, Acquisitions Integration Tracking to Plan

FREMONT, Calif.--(BUSINESS WIRE)-- SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal first quarter ended February 28, 2011.

    Q1 FY11   Q1 FY10  

Net Change

Revenue ($M)   $ 2,501     $ 1,936     29.2 %

Operating income ($M)(1)

  $ 50.9     $ 39.0     30.5 %
Operating income margin     2.03 %     2.01 %    
Income from continuing operations, net of tax ($M)   $ 29.7     $ 23.2     27.8 %
EPS(2)   $ 0.80     $ 0.66     21.8 %

1. Income from continuing operations before non-operating items, income taxes and noncontrolling
interest includes $729 thousand for direct acquisition and integration expenses in the fiscal 2011
first quarter.

2. Diluted earnings per share from continuing operations includes direct acquisition and integration
expenses of $474 thousand, net of tax in the fiscal 2011 first quarter.

"We are pleased with our strong performance in the fiscal first quarter, particularly considering our results included acquisition and integration expenses," stated Kevin Murai, President and Chief Executive Officer. "Our recent acquisitions are tracking to plan and we expect the integrations and the related charges to be completed by mid-year with increasing improvements to margins late in the year."

"After the earthquake and tsunami in Japan, we are very pleased to report that all of our employees are safe and unharmed," Mr. Murai continued. "SYNNEX Infotec suffered nominal inventory and facility damage, and we expect that the demand environment in Japan will be somewhat affected in the coming months. We believe that demand will remain solid in our base distribution and GBS business segments and we will continue to outperform the market."

Business Segment Highlights:

Additional Financial Highlights

Fiscal 2011 Second Quarter Outlook:

The following statements are based on the Company's current expectations for the second quarter of fiscal 2011. These forecasts include the Company's current estimate of the impact from the recent earthquake and subsequent effects to Japan operations. This assessment remains on-going as the situation in Japan continues to evolve. 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 48273184. 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 April 8, 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 10,000 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 our performance, anticipated benefits and integration of our recent acquisitions, anticipated impact of the events in Japan, anticipated demand, and our revenue, net income, integration and restructuring charges, and diluted earnings per share for the second 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; decrease in demand as a result of the events in Japan; 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 business process outsourcing and contract assembly business; and other risks and uncertainties detailed in our Form 10-K for the fiscal year ended November 30, 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)
       
February 28, November 30,
2011 2010
Assets
Current assets:
Cash and cash equivalents $ 101,171 $ 88,038
Short-term investments 13,427 11,419
Accounts receivable, net 1,029,355 986,917
Receivable from vendors, net 139,254 132,409
Receivable from affiliates 1,199 5,080
Inventories 963,818 912,237
Current deferred tax assets 31,138 33,063
Other current assets   71,840   40,030
Total current assets 2,351,202 2,209,193
 
Property and equipment, net 110,817 91,995
Goodwill 167,210 139,580
Intangible assets, net 45,695 28,271
Deferred tax assets 2,209 605
Other assets   40,962   30,217
Total assets $ 2,718,095 $ 2,499,861
 
Liabilities and equity
Current liabilities:
Borrowings under securitization, term loans and lines of credit $ 303,502 $ 245,973
Accounts payable 923,140 896,401
Payable to affiliates 2,808 3,195
Accrued liabilities 164,710 166,861
Income taxes payable   2,346   1,578
Total current liabilities 1,396,506 1,314,008
 
Long-term borrowings 84,408 9,044
Convertible debt 132,476 131,289
Long-term liabilities 56,096 49,431
Deferred tax liabilities   3,246   3,262
Total liabilities   1,672,732   1,507,034
 
SYNNEX Corporation's stockholders' equity:
Preferred stock - -
Common stock 36 36
Additional paid-in capital 288,339 285,406
Accumulated other comprehensive income 38,979 28,035
Retained earnings   708,914   679,193
Total SYNNEX Corporation stockholders' equity 1,036,268 992,670
Noncontrolling interest   9,095   157
Total equity   1,045,363   992,827
Total liabilities and equity $ 2,718,095 $ 2,499,861
 
SYNNEX Corporation
Consolidated Statements of Operations
(in thousands, except for per share amounts)
(unaudited)
     
 

Three Months
Ended

Three Months
Ended

February 28, 2011 February 28, 2010
 
Revenue $ 2,500,934 $ 1,936,038
 
Cost of revenue   (2,357,138 )   (1,826,877 )
 
Gross profit 143,796 109,161
 
Selling, general and administrative expenses (92,214 ) (70,208 )
Acquisition and integration expenses   (729 )   -  
 

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

50,853 38,953
 
Interest expense and finance charges, net (6,169 ) (3,809 )
Other income, net   965     1,163  
 
Income from continuing operations before income taxes and noncontrolling interest 45,649 36,307
 
Provision for income taxes   (15,978 )   (13,067 )
 
Income from continuing operations before noncontrolling interest, net of tax 29,671 23,240
 
Income from discontinued operations, net of tax - 75
Gain on sale of discontinued operations, net of tax   -     11,351  
Net income 29,671 34,666
 
Net (income)/loss attributable to noncontrolling interest   50     (7 )
Net income attributable to SYNNEX Corporation $ 29,721   $ 34,659  
 
 
Amounts attributable to SYNNEX Corporation:
Income from continuing operations, net of tax $ 29,721 $ 23,249
Discontinued operations:
Income from discontinued operations, net of tax - 59
Gain on sale of discontinued operations, net of tax - 11,351
   
Net income attributable to SYNNEX Corporation $ 29,721   $ 34,659  
 
 
Earnings per share attributable to SYNNEX Corporation:

Basic:

Income from continuing operations $ 0.83 $ 0.69
Discontinued operations   -     0.33  
Net income per common share $ 0.83   $ 1.02  
 

Diluted:

Income from continuing operations $ 0.80 $ 0.66
Discontinued operations   -     0.32  
Net income per common share $ 0.80   $ 0.98  
Weighted-average common shares outstanding-basic   35,600     33,880  
Weighted-average common shares outstanding-diluted   36,963     35,255  

SYNNEX Corporation
Lori Barker, 510-668-3715
Sr. Director, Investor Relations
lorib@synnex.com

Source: SYNNEX Corporation

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