SYNNEX Corporation
Jun 25, 2012

SYNNEX Corporation Reports Fiscal 2012 Second Quarter Results

Marks 100th Consecutive Quarter of Profitability

FREMONT, Calif.--(BUSINESS WIRE)-- SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal second quarter ended May 31, 2012.

      Q2 FY12(1) Q2 FY11

Net Change

    Revenue ($M) $2,483 $2,496 -0.5%
    Operating income ($M)(2) $59.3 $54.2 9.5%
    Operating margin 2.39% 2.17% 22 bp
    Net income attributable to SYNNEX Corporation ($M)(3) $34.4 $31.4 9.5%
    Diluted EPS $0.90 $0.85 5.9%

1.

 

The fiscal 2012 second quarter results include the transition of certain customer gross revenue business
to a fee for service logistics relationship which resulted in a decline in the reported revenue.

2.

The fiscal 2011 second quarter income before non-operating items, income taxes and noncontrolling interest
includes a $1.3 million credit adjustment to contingent M&A consideration offset in part by $0.4 million
for acquisition and integration expenses.

3.

 

The fiscal 2011 second quarter net income attributable to SYNNEX Corporation includes a $1.3 million credit
adjustment to contingent M&A consideration offset in part by acquisition and integration expenses of $0.3
million, net of tax.

"The SYNNEX team is very proud to announce our 100th quarter of consecutive profitability. In our second quarter of fiscal 2012, I am pleased with our continued execution and performance in a mixed demand environment," stated Kevin Murai, President and Chief Executive Officer. "Within our distribution business we achieved good growth in the commercial business, partially offset by a dampened retail market. We continue to achieve success in signing new business contracts in our GBS division which we expect to contribute to margin expansion in the coming quarters."

Fiscal 2012 Second Quarter Highlights:

Fiscal 2012 Third Quarter Outlook:

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

"Our guidance reflects strong execution in our distribution business given the more muted outlook for the continuing economic recovery and the ongoing year-over-year transition of certain customer gross revenue to a net fee for service logistics relationship," Mr. Murai continued. "While earnings in the prior year third quarter included some exceptional items, including a large benefit to GBS SG&A for a contingent M&A credit, this year's third quarter outlook reflects a more normalized profit margin for our distribution segment and continued progress in our GBS segment."

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 will also be available via telephone by dialing (800) 857-9687 in North America or (630) 395-0222 outside North America. The passcode code for the call is "SNX." A replay of the webcast will be available at http://ir.synnex.com approximately two hours after the conference call has concluded.

SYNNEX Visits NYSE to Ring the Opening Bell

On Tuesday, June 26, 2012, SYNNEX will visit the New York Stock Exchange (NYSE) to celebrate 100 consecutive quarters of profitability. To mark the occasion, President and Chief Executive Officer Kevin Murai will ring the NYSE Opening Bell at 9:30 a.m. (ET), along with several members of the Company's executive leadership team. For photos and video of the bell ringing, connect with NYSE Euronext on Facebook, YouTube, or Twitter, #NYSEBell.

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 the demand environment, growth in profitability, execution in our distribution business, transition of customers from gross revenue to net fee for service, growth in our GBS business segment, margin expansion, and our revenue, operating margins, 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; 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 February 29, 2012 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
(currency in thousands)
(unaudited)
   
May 31, November 30,
  2012     2011  
ASSETS
Current assets:
Cash and cash equivalents $ 97,214 $ 67,571
Short-term investments 15,175 16,017
Accounts receivable, net 1,113,182 1,293,027
Receivable from affiliates 1,346 1,344
Inventories 875,237 975,047
Current deferred tax assets 28,417 28,241
Other current assets   49,647     57,168  
Total current assets 2,180,218 2,438,415
 
Property and equipment, net 123,722 125,157
Goodwill 181,255 185,312
Intangible assets, net 33,195 37,539
Deferred tax assets 557 590
Other assets   41,552     46,282  
Total assets $ 2,560,499   $ 2,833,295  
 
LIABILITIES AND EQUITY
Current liabilities:
Borrowings under securitization, term loans and lines of credit $ 66,626 $ 159,200
Convertible debt 138,748 -
Accounts payable 800,862 1,035,691
Payables to affiliates 479 -
Accrued liabilities 155,513 172,226
Income taxes payable   596     5,136  
Total current liabilities 1,162,824 1,372,253
 
Long-term borrowings 85,330 87,659
Convertible debt - 136,163
Long-term liabilities 58,286 60,676
Deferred tax liabilities   8,269     8,086  
Total liabilities   1,314,709     1,664,837  
 
SYNNEX Corporation stockholders' equity:
Preferred stock - -
Common stock 37 37
Additional paid-in capital 322,985 310,316
Treasury stock (11,767 ) (11,524 )
Accumulated other comprehensive income 25,394 30,026
Retained earnings   902,121     829,524  
Total SYNNEX Corporation stockholders' equity 1,238,770 1,158,379
Noncontrolling interest   7,020     10,079  
Total equity   1,245,790     1,168,458  
Total liabilities and equity $ 2,560,499   $ 2,833,295  
SYNNEX Corporation
Consolidated Statements of Operations
(currency and share amounts in thousands, except for per share amounts)
(unaudited)
       
Three Months Ended Six Months Ended
May 31, 2012 May 31, 2011 May 31, 2012 May 31, 2011
 
Revenue $ 2,482,799 $ 2,495,802 $ 4,943,493 $ 4,996,736
 
Cost of revenue   (2,326,363 )   (2,350,694 )   (4,617,785 )   (4,707,832 )
 
Gross profit 156,436 145,108 325,708 288,904
 
Selling, general and administrative expenses   (97,115 )   (90,948 )   (202,399 )   (183,891 )
 
Income before non-operating items, income taxes
and noncontrolling interest 59,321 54,160 123,309 105,013
 
Interest expense and finance charges, net (5,519 ) (6,269 ) (11,554 ) (12,438 )
Other income (expenses), net   (382 )   180     1,717     1,145  
 
Income before income taxes and noncontrolling interest 53,420 48,071 113,472 93,720
 
Provision for income taxes   (18,590 )   (16,560 )   (39,488 )   (32,538 )
 
Net income 34,830 31,511 73,984 61,182
 
Net income attributable to noncontrolling interest   (456 )   (110 )   (1,387 )   (60 )
Net income attributable to SYNNEX Corporation $ 34,374   $ 31,401   $ 72,597   $ 61,122  
 
Net income per share attributable to SYNNEX Corporation:
Basic $ 0.94   $ 0.88   $ 1.99   $ 1.71  
Diluted $ 0.90   $ 0.85   $ 1.91   $ 1.65  
Weighted-average common shares outstanding:
Basic   36,607     35,693     36,456     35,661  
Diluted   38,348     37,098     37,990     37,045  

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

Source: SYNNEX Corporation

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