SYNNEX Corporation Reports Fiscal 2013 Second Quarter Results

  SYNNEX Corporation Reports Fiscal 2013 Second Quarter Results

         Solid Performance in Both Core Distribution and GBS Segments

Business Wire

FREMONT, Calif. -- June 25, 2013

SYNNEX Corporation (NYSE: SNX), a leading business process services company,
today announced financial results for the fiscal second quarter ended May 31,
2013.

                                    Q2 FY13    Q2 FY12    Net Change
Revenue ($M)                         $2,591     $2,483     4.4%
Operating income ($M)                $52.0      $59.3      -12.4%
Operating margin                     2.01%      2.39%      -38bp
Net income attributable to SYNNEX    $30.8      $34.4      -10.5%
Corporation ($M)
Diluted Earnings Per Share (EPS)     $0.81      $0.90      -10.0%
                                                          

“I am pleased to report healthy quarterly results highlighted by stronger than
expected sales in our distribution segment, and continued strong growth in our
Concentrix business,” stated Kevin Murai, President and Chief Executive
Officer.

Fiscal 2013 Second Quarter Highlights:

  *Distribution: Revenue was $2.54 billion, reflecting 4.2% growth from the
    prior fiscal year quarter. Adjusting for the translation effect of foreign
    currencies, primarily the yen, our distribution business on a constant
    dollar basis was up 6.7%. Distribution revenue includes approximately $45
    million of revenue from our mid quarter Supercom acquisition. Distribution
    income before non-operating items, income taxes and noncontrolling
    interest was $47.7 million, or 1.88% of distribution revenue compared with
    $56.4 million, or 2.31% in the prior fiscal year quarter.
  *Global Business Services (GBS): Revenue was $55.1 million, an increase of
    15.4% over the prior fiscal year quarter. GBS income before non-operating
    items, income taxes and noncontrolling interest was $4.4 million, or 7.91%
    of GBS revenue compared with $2.6 million, or 5.40% in the prior fiscal
    year quarter.
  *One-time integration costs associated with the recently closed Supercom
    acquisition were $2.1 million on a pre-tax basis.
  *The Company called its $144 million 4% convertible debt and made a
    decision in the second quarter to pay the conversion spread in cash. The
    final cash payment of both principal and the conversion spread will be
    made in the third quarter in accordance with the settlement provisions of
    the indenture.
  *Trailing fiscal four quarters ROIC was 9.6% for the fiscal second quarter
    of 2013, compared to 11.7% in the prior fiscal year quarter.
  *The cash conversion cycle was 42 days, down two days from the prior fiscal
    year quarter.
  *The debt to capitalization ratio was 18%.
  *Depreciation and amortization were $4.0 million and $2.0 million,
    respectively.

Fiscal 2013 Third Quarter Outlook:

The following statements are based on the Company’s current expectations for
the fiscal 2013 third quarter. These statements are forward-looking and actual
results may differ materially.

“With recent signs of economic strengthening, we anticipate that IT demand
will slowly improve but remain somewhat mixed across products and
geographies.” Mr. Murai continued, “We remain committed to growing our
business and expect our margins to improve during the second half of the year
reflecting the progress we’ve made in protecting market share and managing
profitability.”

  *Revenue is expected to be in the range of $2.65 billion to $2.75 billion.
  *Net income is expected to be in the range of $34.3 million to $35.5
    million.
  *Diluted EPS is expected to be in the range of $0.91 to $0.95, which does
    not include the dilutive impact of the convertible debt conversion spread,
    if any.

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 business process outsourcing. Founded in 1980, SYNNEX employs
approximately 12,500 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 and economic environment, growth in
business and margins, investment and growth in our GBS segment, timing of
payments and our revenue, market share, profitability, 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; 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 or
maintain market share; 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, 2013 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 2013 SYNNEX Corporation. All rights reserved. SYNNEX, the SYNNEX
Logo, CONCENTRIX and all other SYNNEX company, product and services names and
slogans are trademarks or registered trademarks of SYNNEX Corporation. SYNNEX,
the SYNNEX Logo and CONCENTRIX 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, 2013     May 31, 2012     May 31, 2013     May 31, 2012
                                                                      
Revenue            $ 2,591,361      $ 2,482,799      $ 5,052,200      $ 4,943,493
                                                                      
Cost of revenue     (2,436,571 )    (2,326,363 )    (4,741,323 )    (4,617,785 )
                                                                      
Gross profit         154,790          156,436          310,877          325,708
                                                                      
Selling, general
and                 (102,826   )    (97,115    )    (202,973   )    (202,399   )
administrative
expenses
                                                                      
Income before
non-operating
items, income        51,964           59,321           107,904          123,309
taxes and
noncontrolling
interest
                                                                      
Interest expense
and finance          (4,863     )     (5,519     )     (10,356    )     (11,554    )
charges, net
Other income        528            (382       )    1,789          1,717      
(expense), net
                                                                      
Income before
income taxes and     47,629           53,420           99,337           113,472
noncontrolling
interest
                                                                      
Provision for       (16,837    )    (18,590    )    (35,154    )    (39,488    )
income taxes
                                                                      
Net income           30,792           34,830           64,183           73,984
                                                                      
Net income
attributable to     (23        )    (456       )    (45        )    (1,387     )
noncontrolling
interest
Net income
attributable to    $ 30,769        $ 34,374        $ 64,138        $ 72,597     
SYNNEX
Corporation
                                                                      
Earnings per
share
attributable to
SYNNEX
Corporation :
Basic              $ 0.84          $ 0.94          $ 1.75          $ 1.99       
Diluted            $ 0.81          $ 0.90          $ 1.69          $ 1.91       
                                                                      
                                                                      
Weighted-average
common shares
outstanding:
Basic               36,783         36,607         36,724         36,456     
Diluted             37,869         38,348         37,950         37,990     
                                                                      

SYNNEX Corporation
Consolidated Balance Sheets
(currency in thousands)
(unaudited)
                                                      
                                               May 31,   November 30,
                                                 2013           2012      
ASSETS
Current assets:
         Cash and cash equivalents             $  216,386        $ 163,699
         Short-term investments                   14,542           15,933
         Accounts receivable, net                 1,223,212        1,401,087
         Receivable from affiliates               260              285
         Inventories                              946,737          923,340
         Current deferred tax assets              23,396           23,390
         Other current assets                    66,439         52,727    
                     Total current assets         2,490,972        2,580,461
                                                                 
Property and equipment, net                       120,698          122,923
Goodwill                                          189,044          189,088
Intangible assets, net                            27,515           29,049
Deferred tax assets                               9,941            619
Other assets                                     37,764         41,122    
                     Total assets              $  2,875,934     $ 2,963,262 
                                                                 
LIABILITIES AND EQUITY
Current liabilities:
         Borrowings under securitization,      $  85,821         $ 52,698
         term loans and lines of credit
         Convertible debt                         143,750          141,436
         Accounts payable                         968,818          1,111,833
         Accrued liabilities                      196,475          181,270
         Income taxes payable                    425            7,470     
                     Total current                1,395,289        1,494,707
                     liabilities
                                                                 
Long-term borrowings                              67,175           81,152
Long-term liabilities                             54,288           58,783
Deferred tax liabilities                         3,146          9,265     
                     Total liabilities           1,519,898      1,643,907 
                                                                 
                                                                 
                                                                 
SYNNEX Corporation stockholders' equity:
         Preferred stock                          -                -
         Common stock                             37               37
         Additional paid-in capital               312,598          324,292
         Treasury stock                           (23,646    )     (21,611   )
         Accumulated other comprehensive          21,644           35,405
         income
         Retained earnings                       1,045,038      980,900   
                     Total SYNNEX
                     Corporation                  1,355,671        1,319,023
                     stockholders' equity
Noncontrolling interest                          365            332       
                     Total equity                1,356,036      1,319,355 
                     Total liabilities and     $  2,875,934     $ 2,963,262 
                     equity

Contact:

SYNNEX Corporation
Deirdre Skolfield, CFA, 510-668-3715
Investor Relations
deirdres@synnex.com
 
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