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| 8-K - FORM 8-K - SYNNEX CORP | d280315d8k.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 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., - January 10, 2012 - 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 |
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| 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 $2.0 million, respectively. |
Fiscal Year 2011 Highlights:
| FY11 | FY10 | Net Change |
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| Revenue ($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, 2011 |
November 30, 2010 |
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| Assets |
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| Current assets: |
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| 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 | ||||||
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| 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 | ||||||
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| Total assets |
$ | 2,833,295 | $ | 2,499,861 | ||||
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| Liabilities and equity |
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| Current liabilities: |
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| 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 | ||||||
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| 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 | ||||||
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| Total liabilities |
1,664,837 | 1,507,034 | ||||||
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| SYNNEX Corporation’s stockholders’ equity: |
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| 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 | ||||||
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| Total SYNNEX Corporation stockholders’ equity |
1,158,379 | 992,670 | ||||||
| Noncontrolling interest |
10,079 | 157 | ||||||
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| Total equity |
1,168,458 | 992,827 | ||||||
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| Total liabilities and equity |
$ | 2,833,295 | $ | 2,499,861 | ||||
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SYNNEX Corporation
Consolidated Statements of Operations
(in thousands, except for per share amounts)
(unaudited)
| Three Months Ended November 30, 2011 |
Three Months Ended November 30, 2010 |
Fiscal Year Ended November 30, 2011 |
Fiscal Year Ended November 30, 2010 |
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| 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 | ) | ||||||||
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| Gross profit |
187,841 | 140,919 | 630,498 | 491,616 | ||||||||||||
| Selling, general and administrative expenses |
(103,144 | ) | (76,310 | ) | (374,270 | ) | (292,466 | ) | ||||||||
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| 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 | ||||||||||
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| 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 | ) | ||||||||
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| 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 | ||||||||||||
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| Net income |
50,202 | 37,532 | 150,553 | 128,102 | ||||||||||||
| Net income attributable to noncontrolling interest |
(29 | ) | (1 | ) | (222 | ) | (154 | ) | ||||||||
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| Net income attributable to SYNNEX Corporation |
$ | 50,173 | $ | 37,531 | $ | 150,331 | $ | 127,948 | ||||||||
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| Amounts attributable to SYNNEX Corporation: |
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| Income from continuing operations, net of tax |
$ | 50,173 | $ | 37,531 | $ | 150,331 | $ | 116,538 | ||||||||
| Discontinued operations: |
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| Income from discontinued operations, net of tax |
— | — | — | 59 | ||||||||||||
| Gain on sale of discontinued operations, net of tax |
— | — | — | 11,351 | ||||||||||||
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| Net income attributable to SYNNEX Corporation |
$ | 50,173 | $ | 37,531 | $ | 150,331 | $ | 127,948 | ||||||||
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| Earnings per share attributable to SYNNEX Corporation: |
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| Basic : |
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| Income from continuing operations |
$ | 1.39 | $ | 1.06 | $ | 4.20 | $ | 3.35 | ||||||||
| Discontinued operations |
— | — | — | 0.33 | ||||||||||||
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| Net income per common share - basic |
$ | 1.39 | $ | 1.06 | $ | 4.20 | $ | 3.68 | ||||||||
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| Diluted : |
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| Income from continuing operations |
$ | 1.37 | $ | 1.04 | $ | 4.08 | $ | 3.26 | ||||||||
| Discontinued operations |
— | — | — | 0.32 | ||||||||||||
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| Net income per common share - diluted |
$ | 1.37 | $ | 1.04 | $ | 4.08 | $ | 3.58 | ||||||||
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| Weighted - average common shares outstanding - basic |
36,142 | 35,351 | 35,830 | 34,737 | ||||||||||||
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| Weighted - average common shares outstanding - diluted |
36,675 | 36,149 | 36,833 | 35,757 | ||||||||||||
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