SYNNEX Corporation Reports Fiscal 2007 Fourth Quarter and Year-End Results
Record Revenue and EPS Results Surpass Expectations
FREMONT, CA--January 10, 2008--SYNNEX
Corporation (NYSE: SNX), a leading business process services company,
today announced financial results for the fiscal fourth quarter and
year ended November 30, 2007.
For the fourth quarter, revenues were $1.97 billion, exceeding the
Company's guidance range of $1.875 billion to $1.925 billion and an
increase of 13.4% compared to $1.74 billion for the quarter ended
November 30, 2006.
Net income for the fourth quarter was $20.2 million, or $0.61 per
diluted share, compared with $15.6 million, or $0.48 per diluted share
in the prior year quarter, also exceeding the Company's guidance range
of $0.52 to $0.54 and representing a 27.1% improvement year-over-year.
For the fiscal year ended November 30, 2007, revenues increased by
10.4% to $7.00 billion, compared to $6.34 billion for the fiscal year
ended November 30, 2006.
Net income for the year increased 22.9% to $63.1 million, or a
$1.93 per diluted share, compared to $51.4 million, or $1.61 per
diluted share for fiscal 2006. Fiscal 2007 net income is inclusive of
the Company's third quarter restructuring charge of $2.7 million
pre-tax, or $0.05 per diluted share and a favorable tax adjustment of
$1.1 million, or $0.03 per diluted share.
"Our success in the fourth quarter was the result of excellent
execution in our core business and from our recent strategic
acquisitions," stated Robert T. Huang, President and Chief Executive
Officer. "I am very pleased with our employees for their continued
commitment to service our customers and vendors."
The Company reports that the restructuring and consolidation of
its Canadian operations are substantially complete and expects that
any residual charges associated with these activities will be
diminutive.
Fourth Quarter Financial Highlights:
-- Income from operations, was $36.9 million, or 1.87% of
revenues, versus $28.1 million, or 1.62% of revenues in the
prior year fourth quarter.
-- Depreciation and amortization were $2.2 million and $1.9
million, respectively.
-- Capital expenditures were $2.7 million.
-- Borrowings under the Company's Canadian off-balance sheet
accounts receivable securitization program totaled
approximately $115.9 million as of November 30, 2007. This
compares to $343.8 million for the quarter ended November 30,
2006 when both the U.S. and Canadian securitization programs
received off-balance sheet accounting treatment. During the
first quarter of fiscal 2007, the Company amended the terms of
its U.S. accounts receivable securitization program, which
resulted in the Company accounting for this U.S. transaction
as an on-balance sheet borrowing under GAAP, leaving only the
SYNNEX Canada accounts receivable securitization program as
off-balance sheet borrowing.
First Quarter Fiscal 2008 Outlook:
The following statements are based on the Company's current
expectations for the first quarter of fiscal 2008. These statements
are forward-looking and actual results may differ materially.
-- Revenues are expected to be in the range of $1.73 billion to
$1.78 billion.
-- Net income is expected to be in the range of $16.2 million to
$16.9 million.
-- Diluted earnings per share are expected to be in the range of
$0.49 to $0.51.
The calculation of diluted earnings per share for the first
quarter of fiscal 2008 is based on an approximate diluted
weighted-average share count of approximately 33.1 million.
"Our first quarter outlook is reflective of our desire to grow
profitably. Looking into fiscal 2008, while the current economic
environment is not ideal, we anticipate growing our earnings per share
in excess of 15% year-over-year through a combination of continued
execution, realization of the full impact of our 2007 acquisitions and
improvements in efficiency and productivity," Huang continued.
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 866-814-8485 in North America or 703-639-1375 outside North
America. The confirmation code for the call is 1183158. 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 24, 2008.
About SYNNEX
Founded in 1980, SYNNEX Corporation, a Fortune 500 company, is a
leading business process services company offering a comprehensive
range of services to original equipment manufacturers, software
publishers and reseller customers worldwide. SYNNEX' service offering
includes product distribution, logistics services, business process
outsourcing and contract assembly. SYNNEX' vendor base includes 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, provide, could and should and the negative of these
terms or other similar expressions. These statements, including
statements regarding our strategy to develop a successful business
process outsourcing services business, expectations of our revenues,
net income, earnings per share and ROIC for the first quarter of
fiscal 2008, the restructuring and consolidation of our Canadian
operations and the related expenses, realization of the full impact of
our 2007 acquisitions, and improvements in efficiency and
productivity, 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; risks associated
with the consolidation, integration and performance of our recent
acquisitions and other risks and uncertainties detailed in our Form
10-Q for the fiscal quarter ended August 31, 2007 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)
November 30, November 30,
2007 2006
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 42,875 $ 27,881
Short-term investments 17,257 13,271
Accounts receivable, net 729,797 363,437
Receivable from vendors, net 96,035 95,080
Receivable from affiliates 9,790 1,855
Inventories 642,524 594,642
Deferred income taxes 18,612 17,994
Current deferred assets 14,478 13,990
Other current assets 16,859 9,887
------------ ------------
Total current assets 1,588,227 1,138,037
Property and equipment, net 59,440 36,698
Goodwill 96,350 30,144
Intangible assets, net 21,590 18,444
Deferred income taxes 5,416 6,716
Long-term deferred assets 97,171 139,111
Other assets 18,909 13,584
------------ ------------
Total assets $ 1,887,103 $ 1,382,734
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under securitization, term
loans and lines of credit $ 351,142 $ 50,834
Accounts payable 588,801 462,480
Payable to affiliates 67,334 89,831
Accrued liabilities 120,617 81,818
Current deferred liabilities 35,522 29,516
Income taxes payable 5,103 6,693
------------ ------------
Total current liabilities 1,168,519 721,172
Long-term borrowings 37,537 47,967
Long-term liabilities 14,533 10,131
Long-term deferred liabilities 60,565 90,686
Deferred income taxes 437 1,232
------------ ------------
Total liabilities 1,281,591 871,188
------------ ------------
Minority interest in subsidiary 958 -
------------ ------------
Stockholders' equity:
Preferred stock - -
Common stock 31 30
Additional paid-in-capital 196,128 181,188
Accumulated other comprehensive income 28,939 13,999
Retained earnings 379,456 316,329
------------ ------------
Total stockholders' equity 604,554 511,546
------------ ------------
Total liabilities and
stockholders' equity $ 1,887,103 $ 1,382,734
============ ============
SYNNEX Corporation
Consolidated Statements of Operations
(in thousands, except for per share amounts)
(unaudited)
Three Months Three Months Fiscal Year Fiscal Year
Ended Ended Ended Ended
November 30, November 30, November 30, November 30,
2007 2006 2007 2006
------------------------------------------------------
Revenue $ 1,970,676 $ 1,737,874 $ 7,004,120 $ 6,343,514
Cost of revenue 1,865,189 1,658,591 6,648,738 6,058,155
------------------------------------------------------
Gross profit 105,487 79,283 355,382 285,359
Selling,
general
and
administrative
expenses 68,617 51,197 240,491 189,117
Restructuring
charges - - 2,744 -
------------------------------------------------------
Income from
operations
before non-
operating
items and
income taxes 36,870 28,086 112,147 96,242
Interest
expense and
finance
charges, net 4,649 3,723 14,874 16,659
Other income,
net (463) (514) (1,393) (570)
------------------------------------------------------
Income before
income taxes
and minority
interest 32,684 24,877 98,666 80,153
Provision for
income taxes 12,259 9,064 35,167 28,320
Minority
interest in
subsidiary 240 207 372 448
------------------------------------------------------
Net income $ 20,185 $ 15,606 $ 63,127 $ 51,385
------------------------------------------------------
Diluted
earnings per
share $ 0.61 $ 0.48 $ 1.93 $ 1.61
------------------------------------------------------
Diluted
weighted-
average common
shares
outstanding 32,892 32,565 32,674 32,014
------------------------------------------------------
CONTACT: SYNNEX Corporation
Laura Crowley, 510-668-3715
Director of Investor Relations and Public Relations
laurack@synnex.com
SOURCE: SYNNEX Corporation