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| 8-K - FORM 8-K - SYNNEX CORP | d323944d8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact Info:
Lori Barker
Investor Relations
SYNNEX Corporation
(510) 668-3715
lorib@synnex.com
SYNNEX Corporation Reports Fiscal 2012 First Quarter
Continued Operating Margin Expansion and Strong Earnings Growth
Fremont, Calif., – March 27, 2012 – SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal first quarter ended February 29, 2012.
| Q1 FY12 |
Q1 FY11 |
Net Change |
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| Revenue ($M) |
$ | 2,461 | $ | 2,501 | -1.6 | % | ||||||
| Operating income ($M)(1) |
$ | 64.0 | $ | 50.9 | 25.8 | % | ||||||
| Operating margin |
2.60 | % | 2.03 | % | 57 bp | |||||||
| Net income attributable to SYNNEX Corporation ($M)(2) |
$ | 38.2 | $ | 29.7 | 28.6 | % | ||||||
| Diluted EPS |
$ | 1.02 | $ | 0.80 | 27.5 | % | ||||||
| 1. | The fiscal 2011 first quarter income before non-operating items, income taxes and noncontrolling interest includes $729 thousand for direct acquisition and integration expenses. |
| 2. | The fiscal 2011 first quarter net income attributable to SYNNEX Corporation includes direct acquisition and integration expenses of $474 thousand, net of tax. |
“We are pleased with our strong profitability in the fiscal first quarter and the overall stability in our core commercial IT distribution business,” stated Kevin Murai, President and Chief Executive Officer. “Our distribution business mix continued to shift towards higher margin value added products and services. We also had a solid quarter for signing new contracts in our GBS division. We expect these new business wins will ramp up in the coming quarters and are then expected to contribute to margin expansion in the GBS division.”
Fiscal 2012 First Quarter Highlights:
| • | Distribution: Revenue was $2.42 billion, a decrease of 1.8% over the prior fiscal year quarter. Distribution income before non-operating items, income taxes and noncontrolling interest grew to $62.4 million, or 2.57% of distribution revenue compared with $47.2 million, or 1.91% in the prior fiscal year quarter. Fiscal 2012 first quarter results included the transition of certain customer gross revenue business to a fee for service logistics relationship which resulted in a decline in revenue, expansion of gross and operating margins and reduced working capital. This transition began in fiscal 2011 fourth quarter and was completed in fiscal 2012 first quarter which was earlier than expected and contributed to lower revenue. Fiscal 2011 first quarter included $287 thousand of direct acquisition and integration expenses. |
| • | Global Business Services (GBS): Revenue was $45.1 million, an increase of 14.8% over the prior fiscal year first quarter. GBS income before non-operating items, income taxes and non-controlling interest was $2.0 million, or 4.42% of GBS revenue compared with $3.6 million, or 9.26% in the prior fiscal year quarter. Fiscal 2012 first quarter included various investments related to anticipated growth in the business. Fiscal 2011 first quarter included $442 thousand in direct acquisition and integration expenses. |
| • | The trailing fiscal four quarters ROIC increased to 11.4% for the fiscal first quarter of 2012, up from 10.2% in the prior year fiscal first quarter. |
| • | The cash conversion cycle was 45 days. |
| • | The debt to capitalization ratio was 20%. |
| • | Depreciation and amortization were $4.0 and $2.1 million, respectively. |
Fiscal 2012 Second Quarter Outlook:
The following statements are based on the Company’s current expectations for the fiscal 2012 second quarter. These statements are forward-looking and actual results may differ materially.
“For the fiscal second quarter we anticipate a stable demand environment with continued growth in year-over-year operating margin and earnings per share,” Mr. Murai continued.
| • | Revenue is expected to be in the range of $2.45 billion to $2.55 billion. |
| • | Net income is expected to be in the range of $33.3 million to $34.5 million. |
| • | Diluted earnings per share are expected to be in the range of $0.87 to $0.91. |
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 and (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 and will be archived until April 11, 2012.
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, growth in our GBS business segment, 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-K for the fiscal year ended November 30, 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 Statements of Operations
(currency and share amounts in thousands, except for per share amounts)
(unaudited)
| Three Months Ended | ||||||||
| February 29, 2012 | February 28, 2011 | |||||||
| Revenue |
$ | 2,460,694 | $ | 2,500,934 | ||||
| Cost of revenue |
(2,291,422 | ) | (2,357,138 | ) | ||||
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| Gross profit |
169,272 | 143,796 | ||||||
| Selling, general and administrative expenses |
(105,284 | ) | (92,943 | ) | ||||
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| Income before non-operating items, income taxes and noncontrolling interest |
63,988 | 50,853 | ||||||
| Interest expense and finance charges, net |
(6,035 | ) | (6,169 | ) | ||||
| Other income, net |
2,099 | 965 | ||||||
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| Income before income taxes and noncontrolling interest |
60,052 | 45,649 | ||||||
| Provision for income taxes |
(20,898 | ) | (15,978 | ) | ||||
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| Net income |
39,154 | 29,671 | ||||||
| Net (income) loss attributable to noncontrolling interest |
(931 | ) | 50 | |||||
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| Net income attributable to SYNNEX Corporation |
$ | 38,223 | $ | 29,721 | ||||
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| Net income per share attributable to SYNNEX Corporation: |
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| Basic |
$ | 1.05 | $ | 0.83 | ||||
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| Diluted |
$ | 1.02 | $ | 0.80 | ||||
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| Weighted-average common shares outstanding: |
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| Basic |
36,303 | 35,600 | ||||||
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| Diluted |
37,632 | 36,963 | ||||||
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SYNNEX Corporation
Consolidated Balance Sheets
(currency in thousands)
(unaudited)
| February 29, | November 30, | |||||||
| 2012 | 2011 | |||||||
| Assets |
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| Current assets: |
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| Cash and cash equivalents |
$ | 68,756 | $ | 67,571 | ||||
| Short-term investments |
16,419 | 16,017 | ||||||
| Accounts receivable, net |
1,173,150 | 1,293,027 | ||||||
| Receivable from affiliates |
1,570 | 1,344 | ||||||
| Inventories |
952,993 | 975,047 | ||||||
| Current deferred tax assets |
28,579 | 28,241 | ||||||
| Other current assets |
56,512 | 57,168 | ||||||
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| Total current assets |
2,297,979 | 2,438,415 | ||||||
| Property and equipment, net |
125,815 | 125,157 | ||||||
| Goodwill |
184,543 | 185,312 | ||||||
| Intangible assets, net |
35,368 | 37,539 | ||||||
| Deferred tax assets |
625 | 590 | ||||||
| Other assets |
54,834 | 46,282 | ||||||
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| Total assets |
$ | 2,699,164 | $ | 2,833,295 | ||||
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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 |
$ | 80,068 | $ | 159,200 | ||||
| Accounts payable |
928,267 | 1,035,691 | ||||||
| Accrued liabilities |
163,206 | 172,226 | ||||||
| Income taxes payable |
11,021 | 5,136 | ||||||
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| Total current liabilities |
1,182,562 | 1,372,253 | ||||||
| Long-term borrowings |
83,343 | 87,659 | ||||||
| Convertible debt |
137,447 | 136,163 | ||||||
| Long-term liabilities |
63,581 | 60,676 | ||||||
| Deferred tax liabilities |
8,568 | 8,086 | ||||||
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| Total liabilities |
1,475,501 | 1,664,837 | ||||||
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| SYNNEX Corporation stockholders’ equity: |
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| Preferred stock |
— | — | ||||||
| Common stock |
37 | 37 | ||||||
| Additional paid-in capital |
320,573 | 310,316 | ||||||
| Treasury stock |
(11,621 | ) | (11,524 | ) | ||||
| Accumulated other comprehensive income |
36,374 | 30,026 | ||||||
| Retained earnings |
867,747 | 829,524 | ||||||
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| Total SYNNEX Corporation stockholders’ equity |
1,213,110 | 1,158,379 | ||||||
| Noncontrolling interest |
10,553 | 10,079 | ||||||
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| Total equity |
1,223,663 | 1,168,458 | ||||||
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| Total liabilities and equity |
$ | 2,699,164 | $ | 2,833,295 | ||||
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