Attached files
| file | filename |
|---|---|
| EX-99.2 - PRESS RELEASE - SYNNEX CORP | dex992.htm |
| 8-K - FORM 8-K - SYNNEX CORP | d8k.htm |
Exhibit 99.1
| FOR IMMEDIATE RELEASE |
Contact Info:
Lori Barker
Sr. Director, Investor Relations
SYNNEX Corporation
(510) 668-3715
lorib@synnex.com
SYNNEX Corporation Reports Fiscal 2010 Third Quarter Results
Operating income from continuing operations reaches record level
Operating margin from continuing operations grows to 2.40%
Fremont, Calif., - September 29, 2010 — SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal third quarter ended August 31, 2010.
For the fiscal third quarter, revenue from continuing operations was $2.18 billion, an increase of 9.0% compared to $2.0 billion for the fiscal quarter ended August 31, 2009. The fiscal third quarter 2010 revenue 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 $95.7 million to revenue on a gross basis in the fiscal third quarter 2010.
Income from continuing operations before non-operating items, income taxes and non-controlling interest was a record $52.2 million, or 2.40% of revenue, compared to $38.2 million in the prior year fiscal third quarter and $43.4 million in the fiscal second quarter of 2010.
Amounts attributable to SYNNEX Corporation’s income from continuing operations, net of tax, for the fiscal third quarter was $30.9 million, or $0.86 per diluted share. This compares with $21.5 million, or $0.62 per diluted share, in the third quarter of fiscal 2009.
“I am very pleased with our revenue growth and operating margin expansion,” stated Kevin Murai, President and Chief Executive Officer. “In the third quarter we experienced ongoing broad-based demand and we continued to successfully drive our mix of higher margin products and services. Our Global Business Services segment performed well as it benefited from the ramp of recent competitive wins. Also, we continued to leverage our infrastructure to drive even greater operating margin expansion in both the Distribution and Global Business Services segments of our business.”
Financial Highlights:
| • | Distribution revenue from continuing operations was $2.15 billion, an increase of 8.8% over the prior year fiscal third quarter and up 7.0% from the fiscal second quarter of 2010. |
| • | Global Business Services revenue from continuing operations was $31.0 million, an increase of 21.9% over the prior year fiscal third quarter and up 12.0% compared to fiscal second quarter of 2010. |
| • | Distribution income from continuing operations before non-operating items, income taxes and non-controlling interest was $47.9 million, compared to $34.8 million in the prior year fiscal third quarter and $40.5 million in the fiscal second quarter of 2010. |
| • | Global Business Services income from continuing operations before non-operating items, income taxes and non-controlling interest was $4.2 million, compared to $3.4 million in the prior year fiscal third quarter and $3.0 million in the fiscal second quarter of 2010. |
| • | The effective tax rate for the fiscal third quarter of 2010 was 34.5% primarily due to benefits from the release of certain federal tax reserves. |
| • | SYNNEX’ cash conversion cycle was 42 days. |
| • | SYNNEX’ debt to capitalization ratio was 26%. |
| • | SYNNEX posted ROIC of 11.1% for the fiscal third quarter of 2010, up from 8.9% in the prior year fiscal third quarter. |
| • | Third quarter depreciation and amortization were $2.8 million and $1.3 million, respectively. |
| • | Third quarter capital expenditures were $2.4 million. |
Fourth Quarter Fiscal 2010 Outlook:
The following statements are based on the Company’s current expectations for the fourth quarter of fiscal 2010. These statements are forward-looking and actual results may differ materially.
| • | Revenue is expected to be in the range of $2.30 billion to $2.40 billion. This range represents net accounting of approximately 4.0% to 5.0% for certain service and extended warranty contracts in fiscal 2010. |
| • | Effective tax is expected to be in the range of 36.0% to 37.0%. |
| • | Net income is expected to be in the range of $34.0 million to $35.0 million. |
| • | Diluted earnings per share are expected to be in the range of $0.94 to $0.97. |
The calculation of diluted earnings per share for the fourth quarter of fiscal 2010 is based on a diluted weighted-average common share count of approximately 36.2 million.
“For the fiscal fourth quarter we believe the demand environment in North America will remain relatively stable and in-line with normal seasonal trends. Also, the year-over-year reduction of revenue attributable to our July 2010 sale of certain of our legacy platform manufacturing contracts is expected to be largely offset by new revenue from our February 2010 acquisition of Jack of All Games,” Mr. Murai continued. “From a profitability perspective, we expect to leverage our cost structure and continue to deliver industry leading margins.”
Conference Call and Webcast
SYNNEX will be discussing its financial results and outlook on a conference call today at 2:00 p.m. (PDT). 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 99037840. 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 October 13, 2010.
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 7,000 associates worldwide and operates in the United States, Canada, China, Japan, Mexico, the Philippines and the United Kingdom. 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 expectations of our effective tax rate, our revenue, net income and diluted earnings per share for the fourth quarter of fiscal 2010, anticipated demand, anticipated revenue attributable to our acquisition of Jack of All Games, and our profitability and growth, 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: 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 May 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 2010 SYNNEX Corporation. All rights reserved. SYNNEX, the SYNNEX Logo, Jack of All Games 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.
Source: SYNNEX Corporation – F
SYNNEX Corporation
Consolidated Statements of Operations
(in thousands, except for per share amounts)
(unaudited)
| Three
Months Ended August 31, 2010 |
Three
Months Ended August 31, 2009 |
Nine
Months Ended August 31, 2010 |
Nine
Months Ended August 31, 2009 |
|||||||||||||
| (As Adjusted)(1) | (As Adjusted)(1) | |||||||||||||||
| Revenue |
$ | 2,177,066 | $ | 1,998,060 | $ | 6,145,916 | $ | 5,521,135 | ||||||||
| Cost of revenue |
(2,052,197 | ) | (1,892,083 | ) | (5,795,219 | ) | (5,213,371 | ) | ||||||||
| Gross profit |
124,869 | 105,977 | 350,697 | 307,764 | ||||||||||||
| Selling, general and administrative expenses |
(72,715 | ) | (67,778 | ) | (216,156 | ) | (205,785 | ) | ||||||||
| Income from continuing operations before non-operating items, income taxes and non-controlling interest |
52,154 | 38,199 | 134,541 | 101,979 | ||||||||||||
| Interest expense and finance charges, net |
(4,585 | ) | (4,220 | ) | (12,130 | ) | (13,497 | ) | ||||||||
| Other income (expense), net |
(300 | ) | 729 | 770 | 1,758 | |||||||||||
| Income from continuing operations before income taxes and non-controlling interest |
47,269 | 34,708 | 123,181 | 90,240 | ||||||||||||
| Provision for income taxes |
(16,319 | ) | (13,200 | ) | (44,037 | ) | (33,466 | ) | ||||||||
| Income from continuing operations before non-controlling interest, net of tax |
30,950 | 21,508 | 79,144 | 56,774 | ||||||||||||
| Income from discontinued operations, net of tax |
— | 1,192 | 75 | 3,852 | ||||||||||||
| Gain on sale of discontinued operations, net of tax |
— | — | 11,351 | — | ||||||||||||
| Net income |
30,950 | 22,700 | 90,570 | 60,626 | ||||||||||||
| Net income attributable to non-controlling interest |
(36 | ) | (235 | ) | (153 | ) | (637 | ) | ||||||||
| Net income attributable to SYNNEX Corporation |
$ | 30,914 | $ | 22,465 | $ | 90,417 | $ | 59,989 | ||||||||
| Amounts attributable to SYNNEX Corporation: |
||||||||||||||||
| Income from continuing operations, net of tax |
$ | 30,914 | $ | 21,501 | $ | 79,007 | $ | 56,923 | ||||||||
| Discontinued operations: |
||||||||||||||||
| Income from discontinued operations, net of tax |
— | 964 | 59 | 3,066 | ||||||||||||
| Gain on sale of discontinued operations, net of tax |
— | — | 11,351 | — | ||||||||||||
| Net income attributable to SYNNEX Corporation |
$ | 30,914 | $ | 22,465 | $ | 90,417 | $ | 59,989 | ||||||||
| Earnings per share attributable to SYNNEX Corporation: |
||||||||||||||||
| Basic : |
||||||||||||||||
| Income from continuing operations |
$ | 0.88 | $ | 0.65 | $ | 2.29 | $ | 1.75 | ||||||||
| Discontinued operations |
— | 0.03 | 0.33 | 0.10 | ||||||||||||
| Net income per common share |
$ | 0.88 | $ | 0.68 | $ | 2.62 | $ | 1.85 | ||||||||
| Diluted : |
||||||||||||||||
| Income from continuing operations |
$ | 0.86 | $ | 0.62 | $ | 2.22 | $ | 1.69 | ||||||||
| Discontinued operations |
— | 0.03 | 0.32 | 0.09 | ||||||||||||
| Net income per common share |
$ | 0.86 | $ | 0.65 | $ | 2.54 | $ | 1.78 | ||||||||
| Weighted-average common shares outstanding-basic |
35,083 | 32,837 | 34,534 | 32,478 | ||||||||||||
| Weighted-average common shares outstanding-diluted |
35,910 | 34,595 | 35,628 | 33,700 | ||||||||||||
| (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 Balance Sheets
(in thousands)
(unaudited)
| August 31, 2010 |
November 30, 2009 | |||||
| (As Adjusted)(1) | ||||||
| Assets |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ | 68,063 | $ | 37,816 | ||
| Short-term investments |
18,698 | 21,219 | ||||
| Accounts receivable, net |
813,558 | 820,633 | ||||
| Receivable from vendors, net |
115,130 | 99,610 | ||||
| Receivable from affiliates |
13,688 | 5,144 | ||||
| Inventories |
794,052 | 713,813 | ||||
| Current deferred tax assets |
27,601 | 27,787 | ||||
| Current deferred assets |
9,633 | 13,830 | ||||
| Other current assets |
62,478 | 26,144 | ||||
| Assets held for sale |
— | 74,185 | ||||
| Total current assets |
1,922,901 | 1,840,181 | ||||
| Property and equipment, net |
87,997 | 94,725 | ||||
| Goodwill |
116,508 | 107,563 | ||||
| Intangible assets, net |
17,774 | 18,066 | ||||
| Deferred tax assets |
296 | 2,849 | ||||
| Long-term deferred assets |
11,548 | 10,636 | ||||
| Other assets |
18,583 | 25,890 | ||||
| Total assets |
$ | 2,175,607 | $ | 2,099,910 | ||
| Liabilities and equity |
||||||
| Current liabilities: |
||||||
| Borrowings under securitization, term loans and lines of credit |
$ | 186,046 | $ | 150,740 | ||
| Accounts payable |
712,365 | 687,432 | ||||
| Payable to affiliates |
17,377 | 82,728 | ||||
| Accrued liabilities |
124,552 | 117,599 | ||||
| Current deferred liabilities |
12,227 | 18,798 | ||||
| Income taxes payable |
764 | 2,431 | ||||
| Liabilities related to assets held for sale |
— | 18,148 | ||||
| Total current liabilities |
1,053,331 | 1,077,876 | ||||
| Long-term borrowings |
8,861 | 9,410 | ||||
| Convertible debt |
130,133 | 126,785 | ||||
| Long-term liabilities |
30,058 | 29,285 | ||||
| Long-term deferred liabilities |
6,494 | 9,742 | ||||
| Deferred tax liabilities |
5,446 | 8,077 | ||||
| Total liabilities |
1,234,323 | 1,261,175 | ||||
| SYNNEX Corporation’s stockholders’ equity: |
||||||
| Preferred stock |
— | — | ||||
| Common stock |
35 | 34 | ||||
| Additional paid-in capital |
278,230 | 249,892 | ||||
| Accumulated other comprehensive income |
21,357 | 27,151 | ||||
| Retained earnings |
641,662 | 551,245 | ||||
| Total SYNNEX Corporation stockholders’ equity |
941,284 | 828,322 | ||||
| Non-controlling interest |
— | 10,413 | ||||
| Total equity |
941,284 | 838,735 | ||||
| Total liabilities and equity |
$ | 2,175,607 | $ | 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. |