SYNNEX Corporation
Sep 25, 2012

SYNNEX Corporation Reports Fiscal 2012 Third Quarter Results

Solid Performance, Distribution Market Share Gains and GBS New Contract Growth

FREMONT, Calif.--(BUSINESS WIRE)-- SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal third quarter ended August 31, 2012.

    Q3 FY12(1)   Q3 FY11  

Net Change

Revenue ($M) $2,577 $2,572 0.2%

Operating income ($M) (2) (3)

$57.1 $66.5 -14.2%
Operating margin 2.21% 2.59% -38 bp
Net income attributable to SYNNEX Corporation ($M) $35.1 $39.0 -10.0%
Diluted EPS $0.93 $1.07 -13.1%

1. The fiscal 2012 third quarter results include the transition of certain customer gross revenue business to a fee for service logistics relationship resulting in a decline in the reported revenue.

2. The fiscal 2012 third quarter operating income includes a $0.7 million credit adjustment to contingent M&A consideration.

3. The fiscal 2011 third quarter operating income includes a $4.1 million credit adjustment to contingent M&A consideration.


"I am pleased with our third quarter results, highlighted by strong profitability and share gains in our Distribution segment, and solid progress in our Global Business Services (GBS) segment," stated Kevin Murai, President and Chief Executive Officer.

Fiscal 2012 Third Quarter Highlights:

Fiscal 2012 Fourth Quarter Outlook:

The following statements are based on the Company's current expectations for the fiscal 2012 fourth quarter. These statements are forward-looking and actual results may differ materially.

"Our guidance reflects continued strong performance and market share gains in a somewhat more challenging demand environment," Mr. Murai continued. "We are projecting that consumer demand will remain soft, and commercial demand will be relatively stable resulting in less than normal seasonal demand."

The prior year fourth quarter was impacted by several items. Reported revenue was net of certain customer business which had partially transitioned from a gross revenue business to a net fee for service logistics relationship. This transition was completed during fiscal 2012 and will result in lower reported revenue in the fourth quarter of fiscal 2012. Also, the fiscal 2011 fourth quarter included a very significant gross margin benefit resulting from shortages of hard disk drives.

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 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 approximately two hours after the conference call has concluded.


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 the demand environment, growth in profitability, our growth and performance, transition of customers from gross revenue to net fee for service, 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 May 31, 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.


SYNNEX Corporation
Consolidated Balance Sheets
(currency in thousands)
August 31, November 30,
2012 2011
Current assets:
Cash and cash equivalents $ 172,992 $ 67,571
Short-term investments 15,353 16,017
Accounts receivable, net 1,172,890 1,293,027
Receivable from affiliates 474 1,344
Inventories 900,954 975,047
Current deferred tax assets 28,390 28,241
Other current assets   58,087     57,168  
Total current assets 2,349,140 2,438,415
Property and equipment, net 124,375 125,157
Goodwill 184,015 185,312
Intangible assets, net 31,458 37,539
Deferred tax assets 603 590
Other assets   42,230     46,282  
Total assets $ 2,731,821   $ 2,833,295  
Current liabilities:
Borrowings under securitization, term loans and lines of credit $ 75,154 $ 159,200
Convertible debt 140,083 -
Accounts payable 908,750 1,035,691
Accrued liabilities 157,221 172,226
Income taxes payable   3,059     5,136  
Total current liabilities 1,284,267 1,372,253
Long-term borrowings 85,346 87,659
Convertible debt - 136,163
Long-term liabilities 60,344 60,676
Deferred tax liabilities   7,486     8,086  
Total liabilities   1,437,443     1,664,837  
SYNNEX Corporation stockholders' equity:
Preferred stock - -
Common stock 37 37
Additional paid-in capital 325,785 310,316
Treasury stock (11,819 ) (11,524 )
Accumulated other comprehensive income 36,313 30,026
Retained earnings   937,260     829,524  
Total SYNNEX Corporation stockholders' equity 1,287,576 1,158,379
Noncontrolling interest   6,802     10,079  
Total equity   1,294,378     1,168,458  
Total liabilities and equity $ 2,731,821   $ 2,833,295  
SYNNEX Corporation
Consolidated Statements of Operations
(currency and share amounts in thousands, except for per share amounts)
Three Months Ended Nine Months Ended
August 31, 2012 August 31, 2011 August 31, 2012 August 31, 2011
Revenue $ 2,576,948 $ 2,572,133 $ 7,520,441 $ 7,568,869
Cost of revenue   (2,425,019 )   (2,418,380 )   (7,042,804 )   (7,126,212 )
Gross profit 151,929 153,753 477,637 442,657
Selling, general and administrative expenses   (94,878 )   (87,235 )   (297,277 )   (271,126 )

Income before non-operating items, income taxes and noncontrolling interest

57,051 66,518 180,360 171,531
Interest expense and finance charges, net (5,809 ) (6,472 ) (17,363 ) (18,910 )
Other income (expenses), net   890     (1,214 )   2,607     (69 )
Income before income taxes and noncontrolling interest 52,132 58,832 165,604


Provision for income taxes   (17,306 )   (19,662 )   (56,794 )   (52,200 )
Net income 34,826 39,170 108,810 100,352
Net income attributable to noncontrolling interest   313     (134 )   (1,074 )   (194 )
Net income attributable to SYNNEX Corporation $ 35,139   $ 39,036   $ 107,736   $ 100,158  
Net income per share attributable to SYNNEX Corporation:        
Basic $ 0.96   $ 1.09   $ 2.95   $ 2.80  
Diluted $ 0.93   $ 1.07   $ 2.84   $ 2.72  
Weighted-average common shares outstanding:
Basic   36,700     35,882     36,537     35,726  
Diluted   37,917     36,594     37,966     36,886  

SYNNEX Corporation
Lori Barker, 510-668-3715
Investor Relations

Source: SYNNEX Corporation

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