SYNNEX Corporation Reports Fiscal 2008 Second Quarter Results
Year-Over-Year Net Income Increased By 26%, EPS Exceed Analyst Estimates
FREMONT, CA, Jun 26, 2008 -- SYNNEX Corporation (NYSE:SNX), a leading business process services
company, today announced financial results for the fiscal second
quarter ended May 31, 2008.
For the second quarter of fiscal 2008, revenues were $1.878
billion, compared to $1.685 billion for the quarter ended May 31,
2007, representing an 11% increase over the prior year quarter. These
results were within the Company's guidance of $1.845 billion to $1.915
billion.
Net income for the second quarter of fiscal 2008 was $18.5
million, or $0.56 per diluted share, compared with $14.7 million, or
$0.45 per diluted share in the prior year quarter, representing a 26%
increase in net income over the prior year quarter. These results
exceeded analysts' consensus and the Company's guidance for net income
of $16.9 million to $17.6 million with diluted earnings per share of
$0.51 to $0.53. The second quarter for fiscal 2008 marks the 84th
consecutive profitable quarter for SYNNEX.
"The SYNNEX team produced another very solid quarter resulting in
continued growth in profitability," stated Robert T. Huang, President
and Co-Chief Executive Officer. "Our second quarter marked several
important events for SYNNEX. We closed our New Age Electronics
acquisition in April and I would like to commend our integration team
on an expeditious integration with minimal disruption to our New Age
Electronics customers and vendors. I would also like to welcome the
New Age Electronics employees to the SYNNEX family."
Huang continued, "We also announced that Kevin Murai joined the
SYNNEX family as Co-Chief Executive Officer. With 20 years of industry
experience, Kevin has a wealth of knowledge that will significantly
benefit SYNNEX. In the short period of time that Kevin has been with
SYNNEX, I am very impressed with how quickly he has taken over the
day-to-day operations of managing our core business in North America."
Second Quarter Fiscal 2008 Financial Highlights:
-- Gross margin expanded to 5.37%, an increase of approximately
37 basis points, compared to the second quarter of fiscal
2007.
-- Income from operations was $31.7 million, or 1.69% of
revenues, versus $25.8 million, or 1.53% of revenues in the
prior fiscal year second quarter.
-- Depreciation and amortization were $2.7 million and $2.0
million, respectively.
-- Capital expenditures were $5.5 million.
-- Borrowings under the Company's Canadian off-balance sheet
accounts receivable securitization program totaled
approximately $66.9 million as of May 31, 2008. This compares
to $115.9 million as of November 30, 2007.
Third Quarter Fiscal 2008 Outlook:
The following statements are based on the Company's current
expectations for the third quarter of fiscal 2008. These statements
are forward-looking and actual results may differ materially.
-- Revenues are expected to be in the range of $1.92 billion to
$1.99 billion.
-- Net income is expected to be in the range of $18.7 million to
$19.4 million.
-- Diluted earnings per share are expected to be in the range of
$0.56 to $0.58.
The calculation of diluted earnings per share for the third
quarter of fiscal 2008 is based on an approximate diluted
weighted-average share count of approximately 33.5 million.
"Our outlook for the third quarter reflects the benefits of the
overall diversification of our business model, continued strong
execution of our core business plans and our on-going focus on
maintaining and delivering good profitability even during the current
economic slowdown," said Kevin Murai, Co-Chief Executive Officer at
SYNNEX Corporation. "We reiterate our commitment to our stated goal of
growing our annual earnings per share in excess of 20% year-over-year,
which has been adjusted upward to include our New Age Electronics
acquisition. We believe we can achieve these goals in the current
economic environment, through the combination of continued superior
execution, realization of the full impact of our recent acquisition of
New Age Electronics and continued improvements in efficiency and
productivity of our operations."
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 can be accessed
by dialing 866-793-1340 in North America or 703-639-1311 outside North
America. The confirmation code for the call is 1251855. A replay of
the conference call will be available at http://ir.synnex.com
approximately two hours after the conclusion of the conference and
will be archived until July 10, 2008.
About SYNNEX
SYNNEX Corporation, a Fortune 500 corporation, is a leading
business process services company, servicing resellers 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 7,000 employees worldwide and operates in the
United States, Canada, China, Mexico, the Philippines and the United
Kingdom. Additional information about SYNNEX may be found online at
www.synnex.com.
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, plan, goal, continue, anticipate, could and should and
the negative of these terms or other similar expressions. These
statements, including statements regarding the future benefit of Mr.
Murai to our Company, our focus on the diversification of our business
model, continued execution of our core business plans and maintaining
and delivering profitability, our commitment to grow annual earnings
per share in excess of 20% year-over-year, expectations of continued
execution, realization of the full impact of the New Age Electronics,
Inc. acquisition and continued improvements in efficiency and
productivity, and expectations of our revenues, 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: 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 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; risks associated with
the consolidation, integration and performance of our recent
acquisitions; our ability to realize the full impact of our recent
acquisitions and other risks and uncertainties detailed in our Form
10-Q for the fiscal quarter ended February 29, 2008 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 2008 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
(in thousands)
(unaudited)
May 31, November 30,
2008 2007
-------------- ------------
Assets
Current assets:
Cash and cash equivalents $ 50,967 $ 42,875
Short-term investments 15,039 17,257
Accounts receivable, net 712,173 729,797
Receivable from vendors, net 125,871 96,035
Receivable from affiliates 8,113 9,790
Inventories 745,709 642,524
Deferred income taxes 18,127 18,612
Current deferred assets 17,769 14,478
Other current assets 13,413 16,859
------------- ------------
Total current assets 1,707,181 1,588,227
Property and equipment, net 69,822 59,440
Goodwill 129,755 96,350
Intangible assets, net 27,466 21,590
Deferred income taxes 6,246 5,416
Long-term deferred assets 92,378 97,171
Other assets 27,908 18,909
------------- ------------
Total assets $ 2,060,756 $ 1,887,103
============= ============
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under securitization, term
loans and lines of credit $ 326,873 $ 351,142
Accounts payable 569,541 588,801
Payable to affiliates 66,383 67,334
Accrued liabilities 146,953 120,617
Current deferred liabilities 39,533 35,522
Income taxes payable - 5,103
------------- ------------
Total current liabilities 1,149,283 1,168,519
Long-term borrowings 28,318 37,537
Convertible debt 143,750 -
Long-term liabilities 25,556 14,533
Long-term deferred liabilities 58,709 60,565
Deferred income taxes 442 437
------------- ------------
Total liabilities 1,406,058 1,281,591
------------- ------------
Commitments and contingencies - -
Minority interest 4,324 958
------------- ------------
Stockholders' equity:
Preferred stock - -
Common stock 32 31
Additional paid-in-capital 201,284 196,128
Accumulated other comprehensive income 34,633 28,939
Retained earnings 414,425 379,456
------------- ------------
Total stockholders' equity 650,374 604,554
------------- ------------
Total liabilities and stockholders'
equity $ 2,060,756 $ 1,887,103
============= ============
SYNNEX Corporation
Consolidated Statements of Operations
(in thousands, except for per share amounts)
(unaudited)
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
May 31, May 31, May 31, May 31,
2008 2007 2008 2007
------------------------------------------------
Revenue $ 1,878,072 $ 1,684,808 $3,626,646 $3,273,084
Cost of revenue 1,777,267 1,600,563 3,429,991 3,114,415
------------------------------------------------
Gross profit 100,805 84,245 196,655 158,669
Selling, general and
administrative
expenses 69,133 58,433 132,203 107,914
------------------------------------------------
Income from
operations before
non-operating items,
income taxes and
minority interest 31,672 25,812 64,452 50,755
Interest expense and
finance charges, net 3,310 3,695 7,477 6,753
Other (income)
expense, net (581) (904) 1,465 (1,062)
------------------------------------------------
Income from
operations before
income taxes and
minority interest 28,943 23,021 55,510 45,064
Provision for income
taxes 10,275 8,288 19,826 16,456
Minority interest 158 62 346 62
------------------------------------------------
Net income $ 18,510 $ 14,671 $ 35,338 $ 28,546
------------------------------------------------
Diluted earnings per
share $ 0.56 $ 0.45 $ 1.07 $ 0.88
------------------------------------------------
Diluted weighted-
average common
shares outstanding 33,256 32,657 33,150 32,559
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