SYNNEX Corporation
Jun 28, 2011

SYNNEX Corporation Reports Fiscal 2011 Second Quarter

Solid Revenue Growth; Acquisition Integrations On Track

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, 2011.

    Q2 FY11 Q2 FY10

Net Change

  Revenue ($M) $2,496 $2,033 22.8%
  Operating income ($M)(1) $54.2 $43.4 24.7%
  Operating margin 2.17% 2.14%  
  Net income attributable to SYNNEX Corporation ($M) (2) $31.4 $24.8 26.4%
  EPS $0.85 $0.70 21.4%


Income from continuing operations 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 in 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 in
the fiscal 2011 second quarter.

"The SYNNEX team delivered another quarter of solid results with strong organic revenue growth in all regions led by our North American commercial distribution business," stated Kevin Murai, President and Chief Executive Officer. "In the second quarter, we also tracked well towards completing the integration of our recent acquisitions and in the third quarter, our main focus turns to revenue growth for these newly acquired businesses."

Business Segment Highlights:

Fiscal 2011 Second Quarter Additional Financial Highlights:

In addition, the SYNNEX Board of Directors approved an anti-dilution share repurchase program under which it will begin purchasing up to $65 million of its Common Stock over a period of up to three years for the purpose of mitigating or reducing the dilution resulting from the various employee stock incentive and employee stock purchase programs. Any stock repurchases may be made through open market and privately negotiated transactions, at times and in such amounts as management deems appropriate, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934.

Fiscal 2011 Third Quarter Outlook:

The following statements are based on the Company's current expectations for the third quarter of fiscal 2011. These statements are forward-looking and actual results may differ materially.

"Our third quarter profit outlook reflects investment in ramping new business that we won in GBS during the second quarter," Mr. Murai continued. "Demand in North American distribution remains solid and market growth is returning to the more pre-recession historical norms. In Japan we are on a good path of profit growth even with the earthquake's impact to the Japanese economy. Bottom line, we are confident in our continuing ability to exceed market growth rates and expand the profitability of SYNNEX."

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 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 73138513. A replay of the conference call will be available at approximately two hours after the conference call has concluded and will be archived until July 13, 2011.


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

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, our anti-dilution share repurchase program, market and industry growth, growth in profitability, 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 February 28, 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 2011 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.


SYNNEX Corporation
Consolidated Balance Sheets
(in thousands)
May 31, November 30,
  2011   2010
Current assets:
Cash and cash equivalents $ 95,135 $ 88,038
Short-term investments 10,470 11,419
Accounts receivable, net 910,551 986,917
Receivable from vendors, net 120,240 132,409
Receivable from affiliates 1,799 5,080
Inventories 940,753 912,237
Current deferred tax assets 31,172 33,063
Other current assets   72,623   40,030
Total current assets 2,182,743 2,209,193
Property and equipment, net 114,350 91,995
Goodwill 176,354 139,580
Intangible assets, net 35,268 28,271
Deferred tax assets 203 605
Other assets   44,202   30,217
Total assets $ 2,553,120 $ 2,499,861
Liabilities and equity
Current liabilities:
Borrowings under securitization, term loans and lines of credit $ 201,544 $ 245,973
Accounts payable 832,224 896,401
Payable to affiliates 154 3,195
Accrued liabilities 157,727 166,861
Income taxes payable   1,355   1,578
Total current liabilities 1,193,004 1,314,008
Long-term borrowings 84,096 9,044
Convertible debt 133,678 131,289
Long-term liabilities 55,775 49,431
Deferred tax liabilities   3,271   3,262
Total liabilities   1,469,824   1,507,034
SYNNEX Corporation's stockholders' equity:
Preferred stock - -
Common stock 36 36
Additional paid-in capital 292,120 285,406
Accumulated other comprehensive income 41,379 28,035
Retained earnings   740,315   679,193
Total SYNNEX Corporation stockholders' equity 1,073,850 992,670
Noncontrolling interest   9,446   157
Total equity   1,083,296   992,827
Total liabilities and equity $ 2,553,120 $ 2,499,861
SYNNEX Corporation
Consolidated Statements of Operations
(in thousands, except for per share amounts)
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
May 31, 2011   May 31, 2010   May 31, 2011   May 31, 2010
Revenue $ 2,495,802 $ 2,032,812 $ 4,996,736 $ 3,968,850
Cost of revenue   (2,350,694 )   (1,916,145 )   (4,707,832 )   (3,743,022 )
Gross profit 145,108 116,667 288,904 225,828
Selling, general and administrative expenses (90,546 ) (73,233 ) (182,760 ) (143,441 )
Acquisition and integration expenses   (402 )   -     (1,131 )   -  

Income from continuing operations before non-operating items,

income taxes and noncontrolling interest

54,160 43,434 105,013 82,387
Interest expense and finance charges, net (6,269 ) (3,736 ) (12,438 ) (7,545 )
Other income (expense), net   180     (93 )   1,145     1,070  

Income from continuing operations before income taxes

and noncontrolling interest

48,071 39,605 93,720 75,912


Provision for income taxes   (16,560 )   (14,651 )   (32,538 )   (27,718 )

Income from continuing operations before noncontrolling interest,

net of tax

31,511 24,954 61,182 48,194
Income from discontinued operations, net of tax - - - 75
Gain on sale of discontinued operations, net of tax   -     -     -     11,351  
Net income 31,511 24,954 61,182 59,620
Net income attributable to noncontrolling interest   (110 )   (110 )   (60 )   (117 )
Net income attributable to SYNNEX Corporation $ 31,401   $ 24,844   $ 61,122   $ 59,503  
Amounts attributable to SYNNEX Corporation:
Income from continuing operations, net of tax $ 31,401 $ 24,844 $ 61,122 $ 48,093
Discontinued operations:
Income from discontinued operations, net of tax - - - 59

Gain on sale of discontinued operations, net of tax

- - - 11,351
Net income attributable to SYNNEX Corporation $ 31,401   $ 24,844   $ 61,122   $ 59,503  
Earnings per share attributable to SYNNEX Corporation:
Basic :
Income from continuing operations $ 0.88 $ 0.72 $ 1.71 $ 1.41
Discontinued operations   -     -     -     0.33  
Net income per common share - basic $ 0.88   $ 0.72   $ 1.71   $ 1.74  
Diluted :
Income from continuing operations $ 0.85 $ 0.70 $ 1.65 $ 1.36
Discontinued operations   -     -     -     0.32  
Net income per common share - diluted $ 0.85   $ 0.70   $ 1.65   $ 1.68  
Weighted-average common shares outstanding - basic   35,693     34,624     35,661     34,256  
Weighted-average common shares outstanding - diluted   37,098     35,703     37,045     35,483  

SYNNEX Corporation
Lori Barker
Sr. Director, Investor Relations

Source: SYNNEX Corporation

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