SYNNEX Corporation - SYNNEX Corporation Reports Fiscal 2011 Fourth Quarter and Year-End Results

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SYNNEX Corporation Reports Fiscal 2011 Fourth Quarter and Year-End Results

Year of Strategic Focus on High-Margin Value Added Offerings and Services Culminates with Record Fourth Quarter Performance

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, 2011.

	Q4 FY11	Q4 FY10	Net Change
Revenue ($M)	$2,841	$2,468	15.1%
Operating income ($M)	$84.7	$64.6	31.1%
Operating margin	2.98%	2.62%	36 bp
Net income attributable to SYNNEX Corporation ($M)	$50.2	$37.5	33.7%
Diluted EPS	$1.37	$1.04	31.7%

"I am very proud of the SYNNEX team for once again delivering excellent results. The fourth quarter was an outstanding finish to a strong year where SYNNEX again grew revenues and profits in excess of industry growth rates even while making substantial investments in new high-growth and high-margin businesses," stated Kevin Murai, President and Chief Executive Officer. "We continue to focus on efficiency and leverage in our core business, further expansion into high growth adjacent markets and creating value-added service offerings - all focused on increasing shareholder value."

Fiscal 2011 Fourth Quarter Highlights:

Distribution: Revenue from continuing operations was $2.80 billion, an increase of 14.6% over the prior fiscal year fourth quarter. The acquisition on December 1, 2010 of SYNNEX Infotec Corporation in Japan added $304.9 million to the fiscal 2011 fourth quarter revenue. Distribution income from continuing operations before non-operating items, income taxes and noncontrolling interest was $81.1 million, or 2.89% of distribution revenue compared with $63.1 million, or 2.58% in the prior fiscal year quarter. Operating margin growth resulted from continued success of key strategies, transition of certain customer business to a higher margin fee for service relationship and supply-demand dynamics of certain constrained products.
Global Business Services (GBS): Revenue from continuing operations was $44.9 million, an increase of 62.1% over the prior fiscal year fourth quarter. GBS income from continuing operations before non-operating items, income taxes and noncontrolling interest was $3.6 million, or 8.11% of GBS revenue compared with $1.5 million, or 5.43% in the prior fiscal year quarter.
The trailing fiscal four quarters ROIC increased to 11.1% for the fiscal fourth quarter of 2011, up from 10.3% in the prior fiscal year quarter.
The cash conversion cycle was 39 days, an improvement of 3 days from the prior fiscal year quarter.
The debt to capitalization ratio was 25%.
Depreciation and amortization were $5.1 million and $2.0 million, respectively.

Fiscal Year 2011 Highlights:

	FY11	FY10	Net Change
Revenue ($M)	$10,410	$8,614	20.8%
Operating income ($M)	$256.2	$199.2	28.7%
Operating margin⁽¹⁾	2.46%	2.31%	15 bp
Net income attributable to SYNNEX Corporation ($M)⁽¹⁾	$150.3	$116.5	29.0%
Diluted EPS⁽¹⁾	$4.08	$3.26	25.2%

1. From continuing operations before gain on sale of discontinued operations, net of tax. FY 2011 includes a $5.4 million credit adjustment to contingent M&A consideration.

Distribution: Revenue from continuing operations was $10.27 billion, an increase of 20.5% over the prior fiscal year. The acquisition on December 1, 2010 of SYNNEX Infotec Corporation in Japan added $1.22 billion to fiscal 2011. Distribution income from continuing operations before non-operating items, income taxes and noncontrolling interest was $237.3 million, or 2.31% of distribution revenue compared with $187.5 million, or 2.20% in the prior fiscal year.

Global Business Services (GBS): Revenue from continuing operations was $163.4 million, an increase of 45.4% over the prior fiscal year. GBS income from continuing operations before non-operating items, income taxes and noncontrolling interest was $18.9 million, or 11.57% of GBS revenue compared with $11.7 million, or 10.39% in the prior fiscal year.

Depreciation and amortization were $17.1 million and $7.6 million, respectively.

Fiscal 2012 First Quarter Outlook:

The following statements are based on the Company's current expectations for the first quarter of fiscal 2012. These statements are forward-looking and actual results may differ materially.

Revenue is expected to be in the range of $2.48 billion to $2.58 billion.
Net income is expected to be in the range of $33.1 million to $34.3 million.
Diluted earnings per share are expected to be in the range of $0.89 to $0.93.

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 37624794. A replay of the conference call will be available at http://ir.synnex.com approximately two hours after the conference call has concluded.

About SYNNEX

SYNNEX Corporation (NYSE: SNX), 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 business strategy, demand environment, growth in profitability, growth in various business segments, and our revenue, net income and earnings per share, 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; risks associated with our anti-dilution share repurchase program; and other risks and uncertainties detailed in our Form 10-Q for the fiscal quarter ended August 31, 2011 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 2012 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,
		2011		2010
Assets
Current assets:
Cash and cash equivalents	$	67,571	$	88,038
Short-term investments		16,017		11,419
Accounts receivable, net		1,142,942		986,917
Receivable from vendors, net		150,085		132,409
Receivable from affiliates		1,344		5,080
Inventories		975,047		912,237
Current deferred tax assets		28,241		33,063
Other current assets		57,168		40,030
Total current assets		2,438,415		2,209,193

Property and equipment, net		125,157		91,995
Goodwill		185,312		139,580
Intangible assets, net		37,539		28,271
Deferred tax assets		590		605
Other assets		46,282		30,217
Total assets	$	2,833,295	$	2,499,861

Liabilities and equity
Current liabilities:
Borrowings under securitization, term loans and lines of credit	$	159,200	$	245,973
Accounts payable		1,035,691		896,401
Payable to affiliates		-		3,195
Accrued liabilities		172,226		166,861
Income taxes payable		5,136		1,578
Total current liabilities		1,372,253		1,314,008

Long-term borrowings		87,659		9,044
Convertible debt		136,163		131,289
Long-term liabilities		60,676		49,431
Deferred tax liabilities		8,086		3,262
Total liabilities		1,664,837		1,507,034

SYNNEX Corporation's stockholders' equity:
Preferred stock		-		-
Common stock		36		36
Additional paid-in capital		298,793		285,406
Accumulated other comprehensive income		30,026		28,035
Retained earnings		829,524		679,193
Total SYNNEX Corporation stockholders' equity		1,158,379		992,670
Noncontrolling interest		10,079		157
Total equity		1,168,458		992,827
Total liabilities and equity	$	2,833,295	$	2,499,861


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, 2011			November 30, 2010			November 30, 2011			November 30, 2010

Revenue	$	2,840,971		$	2,468,225		$	10,409,840		$	8,614,141

Cost of revenue		(2,653,130	)		(2,327,306	)		(9,779,342	)		(8,122,525	)

Gross profit		187,841			140,919			630,498			491,616

Selling, general and administrative expenses		(103,144	)		(76,310	)		(374,270	)		(292,466	)

Income from continuing operations before non-operating items, income taxes
and noncontrolling interest		84,697			64,609			256,228			199,150

Interest expense and finance charges, net		(6,595	)		(4,984	)		(25,505	)		(17,114	)
Other income (expense), net		(936	)		780			(1,005	)		1,550

Income from continuing operations before income taxes and noncontrolling interest		77,166			60,405			229,718			183,586

Provision for income taxes		(26,964	)		(22,873	)		(79,165	)		(66,910	)

Income from continuing operations before noncontrolling interest, net of tax		50,202			37,532			150,553			116,676

Income from discontinued operations, net of tax		-			-			-			75
Gain on sale of discontinued operations, net of tax		-			-			-			11,351
Net income		50,202			37,532			150,553			128,102

Net income attributable to noncontrolling interest		(29	)		(1	)		(222	)		(154	)
Net income attributable to SYNNEX Corporation	$	50,173		$	37,531		$	150,331		$	127,948


Amounts attributable to SYNNEX Corporation:
Income from continuing operations, net of tax	$	50,173		$	37,531		$	150,331		$	116,538
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	$	50,173		$	37,531		$	150,331		$	127,948


Earnings per share attributable to SYNNEX Corporation:
Basic :
Income from continuing operations	$	1.39		$	1.06		$	4.20		$	3.35
Discontinued operations		-			-			-			0.33
Net income per common share - basic	$	1.39		$	1.06		$	4.20		$	3.68

Diluted :
Income from continuing operations	$	1.37		$	1.04		$	4.08		$	3.26
Discontinued operations		-			-			-			0.32
Net income per common share - diluted	$	1.37		$	1.04		$	4.08		$	3.58
Weighted-average common shares outstanding - basic		36,142			35,351			35,830			34,737
Weighted-average common shares outstanding - diluted		36,675			36,149			36,833			35,757

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

Source: SYNNEX Corporation

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