Welcome!

News Feed Item

SYNNEX Corporation Reports Fiscal 2014 Second Quarter Results

SYNNEX Corporation (NYSE:SNX), a leading business process services company, today announced financial results for the fiscal second quarter ended May 31, 2014.

    Q2 FY14   Q2 FY13   Net change
Revenue ($M) $3,454 $2,591 33.3%
Operating income ($M) $68.1 $52.0 31.0%
Non-GAAP Operating income ($M) $99.0 $53.9 83.5%
Operating margin 1.97% 2.01% (4 bps)
Non-GAAP operating margin 2.87% 2.08% 79 bps
Net income attributable to SYNNEX Corporation ($M) $39.6 $30.8 28.5%
Non-GAAP net income attributable to SYNNEX Corporation ($M) $59.5 $32.0 85.5%
Diluted EPS $1.01 $0.81 24.7%
Non-GAAP Diluted EPS $1.52 $0.84 81.0%

Non-GAAP financial measures exclude the impact of acquisition and integration expenses and the amortization of intangible assets. A reconciliation of GAAP to Non-GAAP financial information is presented in the supplementary information section at the end of this press release.

“I am pleased to report another quarter of strong results," stated Kevin Murai, President and Chief Executive Officer. “Excellent growth and leverage in Technology Solutions and steady progress in the integration of the IBM CRM business led to results ahead of our expectations.”

Fiscal 2014 Second Quarter Highlights:

  • Technology Solutions: Revenue was $3.16 billion, up 24.2% from the prior fiscal year quarter. Adjusting for the translation effect of foreign currencies, primarily the yen and the Canadian dollar, the Technology Solutions business grew approximately 26.1%. Technology Solutions income before non-operating items, income taxes and non-controlling interest was $70.1 million, or 2.22% of segment revenue, compared with $48.7 million, or 1.91% of segment revenue, in the fiscal second quarter of 2013.
  • Concentrix: Revenue was $293.5 million, up from $46.7 million over the prior fiscal year quarter due largely to the recently acquired IBM CRM business. Concentrix’ loss before non-operating items, income taxes and non-controlling interest was $2.2 million, or (0.74%) of Concentrix revenue, compared with income of $3.3 million, or 6.99% of Concentrix revenue, in the prior fiscal year quarter. Non-GAAP Concentrix income before non-operating items, income taxes and non-controlling interest was $27.8 million, or 9.48% of Concentrix revenue, for fiscal second quarter of 2014, compared to $4.3 million, or 9.12% of Concentrix revenue, in the prior year period.
  • The trailing fiscal four quarter ROIC was 8.5% compared to 9.6% in the prior year fiscal second quarter. Excluding the impact of acquisition and integration expenses, the current fiscal quarter’s trailing ROIC was 10.4%.
  • The cash conversion cycle was 46 days compared to 42 days in the prior year fiscal second quarter, due to growth in both business segments.
  • The debt to capitalization ratio was 38%, up from 18% in the prior year fiscal second quarter, primarily due to financing the acquisition of the IBM CRM business.
  • Depreciation and amortization were $9.2 and $15.2 million respectively.

Fiscal 2014 Third Quarter Outlook:

The following statements are based on the Company’s current expectations for the fiscal 2014 third quarter and do not include acquisition and integration expenses and amortization of intangibles. These statements are forward-looking and actual results may differ materially.

  • Revenue is expected to be in the range of $3.3 billion to $3.4 billion.
  • Non-GAAP net income is expected to be in the range of $56.9 million to $58.9 million.
  • Non-GAAP diluted earnings per share are expected to be in the range of $1.45 to $1.50.
  • After-tax amortization of intangibles is expected to be $11.2 million, or $0.28 per share. These estimates are based on the preliminary purchase price allocation of the IBM CRM acquisition and are subject to change.

“Our third quarter guidance reflects continued strong performance in both our Technology Solutions and Concentrix business segments” stated Kevin Murai, President and CEO of SYNNEX Corporation. “We are positive on the market demand and confident in our ability to execute.”

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 (888) 469-3219 in North America or (630) 395-0205 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.

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 global business services. Founded in 1980, SYNNEX employs approximately 53,000 full-time and part-time associates worldwide. Additional information about SYNNEX may be found online at www.synnex.com.

Use of Non-GAAP Financial Information

To supplement the financial results presented in accordance with GAAP, SYNNEX uses non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share, which are non-GAAP financial measures that exclude the amortization of intangible assets and acquisition and integration related expenses. These non-GAAP measures provide investors with an additional tool to evaluate operating results. Because these non-GAAP measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

SYNNEX management uses the non-GAAP financial measures internally to understand, manage and evaluate the business. SYNNEX management believes it is useful for the Company and investors to review, as applicable, both GAAP information, and the non-GAAP measures in order to assess the performance of the Company's continuing businesses and for planning and forecasting in future periods. These non-GAAP measures are intended to provide investors with an understanding of the Company's operational results and trends that more readily enable investors to analyze SYNNEX' base financial and operating performance and to facilitate period-to-period comparisons and analysis of operational trends. The management of SYNNEX believes the non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making. A reconciliation of the Company's non-GAAP financial information to GAAP is set forth in the following supplemental information table.

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 growth in margin, sales, and profitability, the anticipated remaining closings in our acquisition of the IBM CRM business, success of the acquired IBM CRM business, success in and timing of integration of the acquired IBM CRM business, market demand, investments, our revenue, operating margins, net income and earnings per share, amortization of intangibles, and the anticipated benefits of the non-GAAP financial measures, 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 and pending acquisitions; ability to complete the subsequent closings in our acquisition of the IBM CRM business; 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 global business services 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, 2014 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 2014 SYNNEX Corporation. All rights reserved. SYNNEX, the SYNNEX Logo, CONCENTRIX, HYVE SOLUTIONS, and all other SYNNEX company, product and services names and slogans are trademarks or registered trademarks of SYNNEX Corporation. SYNNEX, the SYNNEX Logo, CONCENTRIX and HYVE SOLUTIONS 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 Six Months Ended
May 31, 2014 May 31, 2013 May 31, 2014 May 31, 2013
 
Revenue $ 3,453,535 $ 2,591,361 $ 6,480,519 $ 5,052,200
Cost of revenue   (3,174,521 )   (2,436,571 )   (5,994,859 )   (4,741,323 )
Gross profit 279,014 154,790 485,660 310,877
Selling, general and administrative expenses   (210,931 )   (102,826 )   (355,627 )   (202,973 )

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

68,083 51,964 130,033 107,904
Interest expense and finance charges, net (6,160 ) (4,863 ) (10,658 ) (10,356 )
Other income (expense), net   (197 )   528     2,771     1,789  
Income before income taxes and noncontrolling interest 61,726 47,629 122,146 99,337
Provision for income taxes   (22,147 )   (16,837 )   (44,109 )   (35,154 )
Net income 39,579 30,792 78,037 64,183
Net income attributable to noncontrolling interest   (28 )   (23 )   (69 )   (45 )
Net income attributable to SYNNEX Corporation $ 39,551   $ 30,769   $ 77,968   $ 64,138  
Earnings per share attributable to SYNNEX Corporation :
Basic $ 1.02   $ 0.84   $ 2.04   $ 1.75  
Diluted $ 1.01   $ 0.81   $ 2.01   $ 1.69  
Weighted-average common shares outstanding:
Basic   38,663     36,783     38,165     36,724  
Diluted   39,203     37,869     38,720     37,950  
 
SYNNEX Corporation
Consolidated Balance Sheets
(currency in thousands)
(unaudited)
   
May 31,
2014
November 30,
2013
ASSETS
Current assets:
Cash and cash equivalents $ 204,595 $ 151,622
Short-term investments 10,503 15,134
Accounts receivable, net 1,812,568 1,593,191

Receivable from related parties

631 146
Inventories 1,424,227 1,095,107
Current deferred tax assets 19,384 22,031
Other current assets   113,175     54,502  
Total current assets 3,585,083 2,931,733
Property and equipment, net 187,488 133,249
Goodwill 376,460 188,535
Intangible assets, net 271,382 23,772
Deferred tax assets 377 7,867
Other assets   54,176     40,733  
Total assets $ 4,474,966   $ 3,325,889  
 
LIABILITIES AND EQUITY
Current liabilities:
Borrowings under securitization, term loans and lines of credit $ 697,417 $ 252,523
Accounts payable 1,481,805 1,350,040

Payable to related parties

15,993 3,861
Accrued liabilities 343,762 181,325
Income taxes payable   10,246     1,629  
Total current liabilities 2,549,223 1,789,378
Long-term borrowings 278,932 65,405
Long-term liabilities 56,161 56,418
Deferred tax liabilities   9,224     3,047  
Total liabilities   2,893,540     1,914,248  
 
SYNNEX Corporation stockholders' equity:
Preferred stock - -
Common stock 40 38
Additional paid-in capital 370,469 286,329
Treasury stock (29,160 ) (27,450 )
Accumulated other comprehensive income 28,482 19,168
Retained earnings   1,211,105     1,133,137  
Total SYNNEX Corporation stockholders' equity 1,580,936 1,411,222
Noncontrolling interest   490     419  
Total equity   1,581,426     1,411,641  
Total liabilities and equity $ 4,474,966   $ 3,325,889  
 
SYNNEX Corporation
Segment Information
(currency in thousands)
(unaudited)
       
Three Months Ended Six Months Ended
May 31, 2014 May 31, 2013 May 31, 2014 May 31, 2013
Revenue:
Technology Solutions $ 3,162,998 $ 2,547,216 $ 6,065,905 $ 4,966,132
Concentrix 293,482 46,748 420,447 91,098
Inter-segment elimination   (2,945 )   (2,603 )   (5,833 )   (5,030 )
Consolidated $ 3,453,535   $ 2,591,361   $ 6,480,519   $ 5,052,200  
 
Income before non-operating items, income taxes and noncontrolling interest:
Technology Solutions $ 70,134 $ 48,686 $ 133,665 $ 102,222
Concentrix (2,169 ) 3,266 (3,948 ) 5,690
Inter-segment elimination   118     12     316     (8 )
Consolidated $ 68,083   $ 51,964   $ 130,033   $ 107,904  
 
Reconciliation of GAAP to Non-GAAP financial measures
(currency in thousands)
       
Effective in the first quarter of 2014, the Company realigned its business segments. Certain operations of the Company which were previously reported under the Concentrix segment and which provided inter-segment support and IT services to the Technology Solutions segment have now been aligned with and report into the Technology Solutions segment. The Concentrix segment includes the legacy Concentrix business and the newly acquired IBM customer care business. For comparability, the financial information presented herein reflects the impact of the preceding segment structure change for all periods presented.
 
Three months ended Six months ended
May 31, 2014 May 31, 2013 May 31, 2014 May 31, 2013
 
Consolidated:
Revenue $ 3,453,535 $ 2,591,361 $ 6,480,519 $ 5,052,200
 
GAAP operating income $ 68,083 $ 51,964 $ 130,033 $ 107,904
IBM CRM acquisition and other integration expenses 15,741 - 24,649 -
Amortization of intangibles 15,166 1,971 20,863 3,924
Non-GAAP operating income $ 98,990 $ 53,935 $ 175,545 $ 111,828
 
GAAP operating margin 1.97 % 2.01 % 2.01 % 2.14 %
Non-GAAP operating margin 2.87 % 2.08 % 2.71 % 2.21 %
 
Technology Solutions
Revenue $ 3,162,998 $ 2,547,216 $ 6,065,905 $ 4,966,132
 
GAAP operating income $ 70,134 $ 48,686 $ 133,665 $ 102,222
Amortization of intangibles 910 974 1,896 1,906
Non-GAAP operating income $ 71,044 $ 49,660 $ 135,561 $ 104,128
 
GAAP operating margin 2.22 % 1.91 % 2.20 % 2.06 %
Non-GAAP operating margin 2.25 % 1.95 % 2.23 % 2.10 %
 
Concentrix
Revenue $ 293,482 $ 46,748 $ 420,447 $ 91,098
 
GAAP operating income (loss) $ (2,169 ) $ 3,266 $ (3,948 ) $ 5,690
IBM CRM acquisition and other integration expenses 15,741 - 24,649 -
Amortization of intangibles 14,256 998 18,967 2,019
Non-GAAP operating income $ 27,828 $ 4,264 $ 39,668 $ 7,709
 
GAAP operating margin -0.74 % 6.99 % -0.94 % 6.25 %
Non-GAAP operating margin 9.48 % 9.12 % 9.43 % 8.46 %
 
Reconciliation of GAAP to Non-GAAP financial measures
(currency in thousands except per share amounts)
 
Three months ended Six months ended
May 31, 2014 May 31, 2013 May 31, 2014 May 31, 2013
 
Net income attributable to SYNNEX Corporation $ 39,551 $ 30,769 $ 77,968 $ 64,138

IBM CRM acquisition and other integration expenses, net of taxes(1)

10,179 - 15,849 -

Amortization of intangibles(1)

  9,725     1,274     13,352     2,535  
Non-GAAP net income attributable to SYNNEX Corporation $ 59,455   $ 32,043   $ 107,169   $ 66,673  
 
Diluted EPS $ 1.01 $ 0.81 $ 2.01 $ 1.69
IBM CRM acquisition and other integration expenses 0.26 - 0.42 -
Amortization of intangibles   0.25     0.03     0.34     0.06  
Non-GAAP Diluted EPS $ 1.52   $ 0.84   $ 2.77   $ 1.75  
 

(1) The tax effect of the non-GAAP adjustments was calculated using the applicable effective tax rate during the period.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...
Charles Araujo is an industry analyst, internationally recognized authority on the Digital Enterprise and author of The Quantum Age of IT: Why Everything You Know About IT is About to Change. As Principal Analyst with Intellyx, he writes, speaks and advises organizations on how to navigate through this time of disruption. He is also the founder of The Institute for Digital Transformation and a sought after keynote speaker. He has been a regular contributor to both InformationWeek and CIO Insight...
DXWorldEXPO LLC announced today that Kevin Jackson joined the faculty of CloudEXPO's "10-Year Anniversary Event" which will take place on November 11-13, 2018 in New York City. Kevin L. Jackson is a globally recognized cloud computing expert and Founder/Author of the award winning "Cloud Musings" blog. Mr. Jackson has also been recognized as a "Top 100 Cybersecurity Influencer and Brand" by Onalytica (2015), a Huffington Post "Top 100 Cloud Computing Experts on Twitter" (2013) and a "Top 50 C...
Sanjeev Sharma Joins November 11-13, 2018 @DevOpsSummit at @CloudEXPO New York Faculty. Sanjeev Sharma is an internationally known DevOps and Cloud Transformation thought leader, technology executive, and author. Sanjeev's industry experience includes tenures as CTO, Technical Sales leader, and Cloud Architect leader. As an IBM Distinguished Engineer, Sanjeev is recognized at the highest levels of IBM's core of technical leaders.
For years the world's most security-focused and distributed organizations - banks, military/defense agencies, global enterprises - have sought to adopt cloud technologies that can reduce costs, future-proof against data growth, and improve user productivity. The challenges of cloud transformation for these kinds of secure organizations have centered around data security, migration from legacy systems, and performance. In our presentation, we will discuss the notion that cloud computing, properl...
IoT is rapidly becoming mainstream as more and more investments are made into the platforms and technology. As this movement continues to expand and gain momentum it creates a massive wall of noise that can be difficult to sift through. Unfortunately, this inevitably makes IoT less approachable for people to get started with and can hamper efforts to integrate this key technology into your own portfolio. There are so many connected products already in place today with many hundreds more on the h...
CloudEXPO New York 2018, colocated with DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
SYS-CON Events announced today that IoT Global Network has been named “Media Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. The IoT Global Network is a platform where you can connect with industry experts and network across the IoT community to build the successful IoT business of the future.
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
Evan Kirstel is an internationally recognized thought leader and social media influencer in IoT (#1 in 2017), Cloud, Data Security (2016), Health Tech (#9 in 2017), Digital Health (#6 in 2016), B2B Marketing (#5 in 2015), AI, Smart Home, Digital (2017), IIoT (#1 in 2017) and Telecom/Wireless/5G. His connections are a "Who's Who" in these technologies, He is in the top 10 most mentioned/re-tweeted by CMOs and CIOs (2016) and have been recently named 5th most influential B2B marketeer in the US. H...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
Disruption, Innovation, Artificial Intelligence and Machine Learning, Leadership and Management hear these words all day every day... lofty goals but how do we make it real? Add to that, that simply put, people don't like change. But what if we could implement and utilize these enterprise tools in a fast and "Non-Disruptive" way, enabling us to glean insights about our business, identify and reduce exposure, risk and liability, and secure business continuity?
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
DXWorldEXPO LLC announced today that Telecom Reseller has been named "Media Sponsor" of CloudEXPO | DXWorldEXPO 2018 New York, which will take place on November 11-13, 2018 in New York City, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
Enterprises are striving to become digital businesses for differentiated innovation and customer-centricity. Traditionally, they focused on digitizing processes and paper workflow. To be a disruptor and compete against new players, they need to gain insight into business data and innovate at scale. Cloud and cognitive technologies can help them leverage hidden data in SAP/ERP systems to fuel their businesses to accelerate digital transformation success.