SYNNEX Corporation Reports Fiscal 2013 Third Quarter Results

  SYNNEX Corporation Reports Fiscal 2013 Third Quarter Results

             Record Third Quarter Revenue and Solid Profitability

Business Wire

FREMONT, Calif. -- September 25, 2013

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

                    Q3 FY13       Q3 FY12      Net         
                                                               Change
Revenue ($M)         $ 2,734      $ 2,577     6.1   %     
Operating            $ 63.5       $ 57.1      11.3  %     
income ($M)
Operating             2.32  %      2.21  %    11bp        
margin
Net income
attributable
to SYNNEX            $ 46.6       $ 35.1      32.6  %     
Corporation
($M) ^ (1)
Diluted EPS          $ 0.19       $ 0.93      -79.6 %     
Adjusted
Diluted EPS          $ 1.24       $ 0.93      33.3  %     
^ (2)

1. Q3 FY13 “Other income, net” includes a $12.3M pre-tax benefit from a   
class-action legal settlement
2. Q3 FY13 Adjusted Diluted EPS excludes one-time numerator adjustment
resulting in $1.05 dilution for
convertible senior notes settlement. A reconciliation of non-GAAP
financial information to GAAP financial
information is presented in the supplementary Information at the end of   
this release.

“I am pleased to report record sales and solid profitability for our fiscal
third quarter,” stated Kevin Murai, President and Chief Executive Officer,
SYNNEX Corporation. Murai continued, “Our Distribution segment posted strong
sales growth and operating margin, and our GBS segment continued its trend of
double-digit sales growth.”

Fiscal 2013 Third Quarter Highlights:

  *Distribution: Revenue was $2.69 billion, an increase of 6.0% over 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 8.8%. Distribution income before non-operating items,
    income taxes and noncontrolling interest was $61.8 million, or 2.30% of
    distribution revenue compared with $52.6 million, or 2.08% in the prior
    fiscal year quarter.
  *Global Business Services (GBS): Revenue was $55.1 million, an increase of
    10.7% over the prior fiscal year quarter. GBS income before non-operating
    items, income taxes and noncontrolling interest was $1.8 million, or 3.22%
    of GBS revenue compared with $4.6 million, or 9.21% in the prior fiscal
    year quarter. GBS results include $2.3 million in pre-tax charges
    primarily related to costs associated with our recently announced
    agreement to acquire IBM’s CRM business.
  *Trailing fiscal four quarters ROIC was 9.7% for the fiscal third quarter
    of 2013, compared to 11.1% in the prior fiscal year quarter.
  *The cash conversion cycle was 41 days, unchanged from the prior fiscal
    year quarter.
  *The debt to capitalization ratio was 15%.
  *Depreciation and amortization were $4.1 million and $2.0 million,
    respectively.
  *The Company settled its $144 million 4% convertible senior notes for $219
    million in cash during the fiscal third quarter of 2013 in accordance with
    the settlement provisions of the indenture. Due to the Company’s decision
    to settle the convertible senior notes in cash, the difference in the
    estimated value of the conversion premium from the fiscal second quarter
    to the date of settlement represented an adjustment to equity and a
    numerator adjustment for diluted EPS, resulting in a one-time dilutive
    effect of $1.05 to diluted EPS.

Fiscal 2013 Fourth Quarter Outlook:

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

-- Revenue is expected to be in the range of $2.925 billion to $3.025 billion.

-- Net income is expected to be in the range of $43.0 million to $44.4
million.

-- Diluted EPS is expected to be in the range of $1.14 to $1.18.

-- This outlook excludes one-time charges and integration costs.

Recent Acquisition Announcement:

On September 10, 2013 the Company announced an agreement to acquire IBM’s $1.2
billion+ customer relationship management business process outsourcing
business for $505 million. As we announced previously, this acquisition is
expected to initially close in the coming months, at which point additional
details will be provided.

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 14,000 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 adjusted diluted earnings per share, which is a non-GAAP financial
measure, to provide investors with an additional tool to evaluate operating
results. Because this non-GAAP measure is not calculated in accordance with
GAAP, it may not necessarily be comparable to a similarly titled measure
employed by other companies. This non-GAAP financial measure should not be
considered in isolation or as a substitute for the comparable GAAP measure,
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 measure 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 measure, which excludes information because of
its one-time nature, in order to assess the performance of the Company’s
continuing businesses and for planning and forecasting in future periods. This
non-GAAP measure is 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 measure is 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 growth in our GBS segment, our revenue,
operating margins, net income and earnings per share, timing of the closing
and integration costs associated with the proposed acquisition of IBM’s
customer relationship management business process outsourcing business, the
anticipated usefulness to our management, investors and analysts of our
non-GAAP financial measure and the purposes of using the non-GAAP financial
measure, 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: the
risk that the proposed IBM acquisition transaction will not close as
anticipated or at all, the risk that the benefits from the proposed
transaction may not be fully realized or may take longer to realize than
expected or that the proposed transaction will not be accretive to SYNNEX’
operating results; 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 May 31, 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 Balance Sheets
(currency in thousands)
(unaudited)
                                                    
                                           August 31,            November 30,
                                             2013              2012      
ASSETS
Current assets:
      Cash and cash equivalents            $  139,363           $ 163,699
      Short-term investments                   14,525              15,933
      Accounts receivable, net                 1,307,209           1,401,087
      Receivable from affiliates               215                 285
      Inventories                              1,012,055           923,340
      Current deferred tax                     22,577              23,390
      assets
      Other current assets                   65,714            52,727    
      Total current assets                     2,561,658           2,580,461
                                                                 
Property and equipment, net                    124,128             122,923
Goodwill                                       188,140             189,088
Intangible assets, net                         26,109              29,049
Deferred tax assets                            10,042              619
Other assets                                 40,073            41,122    
      Total assets                         $  2,950,150        $ 2,963,262 
                                                                 
LIABILITIES AND EQUITY
Current liabilities:
      Borrowings under
      securitization, term loans and       $   165,072           $ 52,698
      lines of credit
      Convertible debt                         -                   141,436
      Accounts payable                         1,106,576           1,111,833
      Accrued liabilities                      174,949             181,270
      Income taxes payable                   12,444            7,470     
      Total current liabilities                1,459,041           1,494,707
                                                                 
Long-term borrowings                           68,232              81,152
Long-term liabilities                          53,065              58,783
Deferred tax liabilities                     3,169             9,265     
      Total liabilities                      1,583,507         1,643,907 
                                                                 
                                                                 
                                                                 
SYNNEX Corporation stockholders'
equity:
      Preferred stock                          -                   -
      Common stock                             37                  37
      Additional paid-in capital               279,196             324,292
      Treasury stock                           (23,703   )         (21,611   )
      Accumulated other                        19,059              35,405
      comprehensive income
      Retained earnings                      1,091,649         980,900   
      Total SYNNEX Corporation                 1,366,238           1,319,023
      stockholders' equity
Noncontrolling interest                      405               332       
      Total equity                           1,366,643         1,319,355 
      Total liabilities and equity         $  2,950,150        $ 2,963,262 
                                                                             


SYNNEX Corporation
Consolidated Statements of Operations
(currency and share amounts in thousands, except for per share amounts)
(unaudited)
                                                                      
                                                                                  
                       Three Months Ended                      Nine Months Ended
                       August 31,         August 31,           August 31,         August 31,
                       2013               2012                 2013               2012
                                                                                  
Revenue                $ 2,733,913        $ 2,576,948          $ 7,786,113        $ 7,520,441
                                                                                  
Cost of revenue         (2,569,633 )      (2,425,019 )        (7,310,956 )      (7,042,804 )
                                                                                  
Gross profit             164,280            151,929              475,157            477,637
                                                                                  
Selling, general
and                     (100,781   )      (94,878    )        (303,754   )      (297,277   )
administrative
expenses
                                                                                  
Income before
non-operating
items, income
taxes and
noncontrolling           63,499             57,051               171,403            180,360
interest
                                                                                  
Interest expense
and finance              (2,983     )       (5,809     )         (13,339    )       (17,363    )
charges, net
Other income,           12,159           890                13,948           2,607      
net
                                                                                  
Income before
income taxes and         72,675             52,132               172,012            165,604
noncontrolling
interest
                                                                                  
Provision for           (26,042    )      (17,306    )        (61,196    )      (56,794    )
income taxes
                                                                                  
Net income               46,633             34,826               110,816            108,810
                                                                                  
Net (income)
loss
attributable to         (22        )      313                (67        )      (1,074     )
noncontrolling
interest
Net income
attributable to        $ 46,611          $ 35,139            $ 110,749         $ 107,736    
SYNNEX
Corporation
                                                                                  
Earnings per
share
attributable to
SYNNEX
Corporation :
     Basic             $ 1.26            $ 0.96              $ 3.01            $ 2.95       
     Diluted           $ 0.19            $ 0.93              $ 1.97            $ 2.84       
                                                                                  
                                                                                  
Weighted-average
common shares
outstanding:
     Basic              36,965           36,700             36,805           36,537     
     Diluted            37,559           37,917             37,820           37,966     
                                                                                               

                             
Reconciliation of
non-GAAP to GAAP
diluted earnings per
share
                                                         
                                     Three months              Nine months
                                     ended                     ended
                                     August 31, 2013           August 31, 2013
                                                               
Net income
attributable to SYNNEX               $   46,611                $   110,749
Corporation
Less: impact of                          (39,474  )                (36,409  )
conversion premium *
Net income for diluted
earnings per share                   $   7,137                 $   74,340
calculation
                                                               
Weighted average
common shares                            37,559                    37,820
outstanding- diluted
                                                               
Adjusted diluted
earnings per share                   $   1.24                  $   2.93
attributable to SYNNEX
Corporation
Less: impact of                          (1.05    )                (0.96    )
conversion premium
GAAP - diluted
earnings per share                   $   0.19                  $   1.97
attributable to SYNNEX
Corporation

                                                               

* For the three months ended August 31, 2013 the impact of conversion premium
is the difference between the estimated conversion premium as of May 31, 2013
and the final conversion premium settlement amount

* For the nine months ended August 31, 2013 the impact of conversion premium
is the difference between the estimated conversion premium as of April 2013
and the final conversion premium settlement amount

** No adjustments were needed to prior year diluted earnings per share

Contact:

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