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:
-
Distribution: Revenue was $2.44 billion, a decrease of 0.8% over the
prior fiscal year quarter. Distribution income before non-operating
items, income taxes and noncontrolling interest grew to $56.4 million,
or 2.31% of distribution revenue compared with $50.5 million, or 2.05%
in the prior fiscal year quarter. Fiscal 2012 second quarter results
included certain customer business which transitioned year-over-year
from a gross revenue business to a net fee for service logistics
relationship.
-
Global Business Services (GBS): Revenue was $47.7 million, an increase
of 23.1% over the prior fiscal year quarter. GBS income before
non-operating items, income taxes and non-controlling interest was
$2.6 million, or 5.40% of GBS revenue compared with $3.7 million, or
9.56% in the prior fiscal year quarter. The fiscal 2011 second quarter
SG&A included a $1.3 million credit adjustment to contingent M&A
consideration offset in part by $185 thousand in direct acquisition
and integration expenses. Fiscal 2012 second quarter includes
continued incremental expenses related to investing for accelerated
growth in the business.
-
The trailing fiscal four quarters ROIC increased to 11.7% for the
fiscal second quarter of 2012, up from 10.3% in the prior year fiscal
second quarter.
-
The cash conversion cycle was 44 days.
-
The debt to capitalization ratio was 19%.
-
Depreciation and amortization were $4.2 and $2.1 million, respectively.
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."
-
Revenue is expected to be in the range of $2.55 billion to $2.65
billion.
-
Net income is expected to be in the range of $34.4 million to $35.7
million.
-
Diluted earnings per share are expected to be in the range of $0.91 to
$0.95.
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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