SYNNEX Corporation Reports Fourth Quarter
and Year-End 2004 Results
FREMONT, CA — January 12, 2005 -- SYNNEX
Corporation (NYSE:SNX), a global IT supply chain services company,
today announced financial results for the fourth quarter and
fiscal
year ended November 30, 2004.
Fourth quarter revenues increased
by 18% to $1.48 billion compared to $1.25 billion for the quarter
ended November 30, 2003. Net income for the fourth quarter
increased 77% to $15.3 million, or $0.50 per diluted share,
compared with net income of $8.6 million, or $0.35 per diluted
share in the prior year fourth quarter.
Results for the fourth quarter of
2004 include a one-time non-operating income tax benefit of
$2.0 million, or $0.07 per share. Results for the fourth quarter
of 2003 include a non-recurring charge of $1.3 million (net
of tax), or $0.05 per share.
For the year ended November 30, 2004,
net revenues increased by 29% to $5.31 billion compared to
$4.13 billion for the year ended November 30, 2003. Net income
for fiscal 2004 increased by 55% to $46.6 million, or $1.55
per diluted share, compared with net income of $30.0 million,
or $1.22 per diluted share for 2003.
Results for fiscal 2004 include one-time
non-operating after-tax benefits of $2.7 million, or $0.09
per share. Results for fiscal 2003 include the aforementioned
charge of $1.3 million.
On December 1, 2003, SYNNEX completed
its Initial Public Offering (IPO) that resulted in net proceeds
of $48.8 million to the Company. As a result, fiscal 2004 amounts
in this press release reflect the effects of the IPO whereas
fiscal 2003 amounts do not.
"We achieved our highest quarterly
operating performance to date in the fourth quarter and marked
the end of our first year as a public company by delivering
very strong results," said Robert Huang, President and Chief
Executive Officer. "The SYNNEX team executed well in the fourth
quarter of 2004, with continued focused efforts and solid execution
on our growth strategy, evidenced by the results in both our
distribution and contract assembly businesses."
Fourth Quarter Financial Highlights:
-- Distribution revenues were $1.32 billion, an increase of 14%
over the prior year quarter. Contract assembly revenues were
$162.3 million, an increase of 74% over the prior year
quarter.
-- Gross margin was 4.30%, down 16 basis points from the prior
year quarter. Product and customer mix in our contract
assembly business were the primary reasons for the decline.
-- Income from operations was $23.5 million, or 1.59% of
revenues, versus $18.0 million, or 1.44% of revenues in the
prior year quarter.
-- Income from distribution operations was $19.4 million, or
1.47% of revenues, versus $14.1 million, or 1.21% of revenues
in the prior year quarter.
-- Income from assembly operations was $4.1 million, or 2.53% of
revenues, versus $3.9 million, or 4.21% of revenues in the
prior year quarter.
-- Fourth quarter depreciation and amortization were $1.2 million
and $1.1 million, respectively.
-- Fourth quarter results reflect a $2.0 million tax benefit
related to the final tax accounting of the acquisition of
Merisel Canada, Inc.
First Quarter Fiscal 2005 Outlook:
The following statements are based
on the Company's current expectations for the first quarter
of 2005. The outlook amounts do not include any special charges
or restructuring amounts that could be incurred.
These statements are forward looking
and actual results may differ materially.
-- Revenues are expected to be in the range of $1.39 billion to
$1.44 billion.
-- Net income is expected to be in the range of $11.6 million to
$12.2 million.
-- Diluted earnings per share are expected to be in the range of
$0.37 to $0.39.
The calculation of diluted earnings
per share for the first quarter of 2005 is based on an approximate
weighted average diluted share count of 31.3 million.
"Our first quarter 2005 guidance reflects
continued reasonable market conditions for technology products
and our ability to continue to execute on our distribution
and assembly marketplace strategy," noted Huang.
Conference Call and Webcast
SYNNEX will be discussing its financial
results and outlook on a conference call today at 5:00 p.m.
(EST). A webcast of the call will be available at http://ir.synnex.com.
The conference call can be accessed by dialing 888-792-1069
in North America or 703-871-3019 outside North America. The
confirmation code for the call is 624509. A replay of the conference
call will be available at http://ir.synnex.com approximately
two hours after the conference call has concluded and will
be archived until January 25, 2005.
About SYNNEX
Founded in 1980, SYNNEX Corporation
is a global IT supply chain services company offering a comprehensive
range of services to original equipment manufacturers, software
publishers and reseller customers worldwide. SYNNEX offers
product distribution, related logistics services and contract
assembly and works with the leading industry suppliers of IT
systems, peripherals, system components, software and networking
equipment. 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, could and should
and the negative of these terms or other similar expressions.
These statements, including statements regarding our expectations
as to improvement for our non-U.S. entities, our business model
and our expectations of our revenues, net income and earnings
per share for the first quarter of fiscal 2005, 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: general economic conditions and any weakness
in IT 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;
variations in our levels of excess inventory and doubtful accounts
and changes in the terms of OEM supplier-sponsored programs;
changes in our costs and operating expenses; changes in foreign
currency exchange rates; 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 contract assembly business
and other risks and uncertainties detailed in our Form 10-Q
for the quarter ended August 31, 2004 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.
SYNNEX and the SYNNEX logo are trademarks
of SYNNEX Corporation or its subsidiaries and should be treated
as such. All rights reserved. All other company names mentioned
herein are trademarks of their respective owners.
SYNNEX Corporation
Consolidated Statements of Operations
(in thousands, except for per share amounts)
(unaudited)
Three Months Three Months Twelve Months Twelve Months
Ended Ended Ended Ended
Nov. 30, Nov. 30, Nov. 30, Nov. 30,
2004 2003 2004 2003
------------ ------------ ------------ -------------
Revenue $1,478,598 $1,252,947 $5,313,991 $4,126,240
Cost of revenue (1,415,006) (1,197,078) (5,089,013) (3,938,524)
------------ ------------ ------------ -------------
Gross profit 63,592 55,869 224,978 187,716
Selling, general
and
administrative
expenses (40,076) (37,882) (145,998) (129,850)
------------ ------------ ------------ -------------
Income from
operations 23,516 17,987 78,980 57,866
Interest expense,
net (574) (524) (1,502) (1,961)
Other expense,
net (2,172) (3,870) (7,663) (8,771)
------------ ------------ ------------ -------------
Income before
income taxes
and minority
interest 20,770 13,593 69,815 47,134
Provision for
income taxes (5,542) (5,084) (23,550) (17,360)
Minority
interest in
subsidiaries 24 116 300 222
------------ ------------ ------------ -------------
Net income $ 15,252 $ 8,625 $ 46,565 $ 29,996
------------ ------------ ------------ -------------
Diluted earnings
per share $ 0.50 $ 0.35 $ 1.55 $ 1.22
------------ ------------- ------------ -------------
Diluted weighted
average common
shares
outstanding 30,711 24,904 30,111 24,555
------------ ------------- ------------ -------------
SYNNEX Corporation
Consolidated Balance Sheets
(in thousands)
(unaudited)
November 30, November 30,
2004 2003
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 28,726 $ 22,079
Restricted cash 2,020 4,306
Short-term investments 5,051 3,832
Accounts receivable, net 372,604 263,944
Receivable from vendors, net 69,033 54,209
Receivable from affiliates 1,970 667
Inventories 408,346 360,686
Deferred income taxes 17,645 15,902
Other current assets 7,599 16,783
------------- -------------
Total current assets 912,994 742,408
Property and equipment, net 33,851 23,938
Intangible assets 48,722 19,357
Deferred income taxes 1,421 708
Other assets 2,709 3,517
------------- -------------
Total assets $999,697 $789,928
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under term loans and
lines of credit $ 74,996 $ 69,464
Payable to affiliates 68,977 54,986
Accounts payable 386,638 343,071
Accrued liabilities 62,611 53,279
Income taxes payable 2,837 4,211
------------- -------------
Total current liabilities 596,059 525,011
Long-term borrowings 13,074 8,134
Long-term liabilities 17,772 1,123
Deferred income taxes 1,054 260
------------- -------------
Total liabilities 627,959 534,528
------------- -------------
Commitments and contingencies -- --
Minority interest in subsidiaries 2,082 2,586
------------- -------------
Stockholders' equity:
Preferred stock -- --
Common stock 28 22
Additional paid-in-capital 145,423 80,067
Unearned stock-based compensation -- (202)
Accumulated other comprehensive income 12,086 7,373
Retained earnings 212,119 165,554
------------- -------------
Total stockholders' equity 369,656 252,814
------------- -------------
Total liabilities and
stockholders' equity $999,697 $789,928
============= =============