TD SYNNEX CORPORATION FREMONT, Calif., Jan. 7, 2016 /PRNewswire/ -- SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal fourth quarter and fiscal year ended November 30, 2015.
Q4 FY15 Q4 FY14 Net change
------- ------- ----------
Revenue ($M) $3,550 $3,824 -7.2%
Operating income
($M) $105.0 $99.7 5.3%
Non-GAAP
operating income
($M)(1) $120.0 $124.9 -3.9%
Operating margin 2.96% 2.61% 35 bps
Non-GAAP
operating
margin(1) 3.38% 3.27% 11 bps
Net income
attributable to
SYNNEX
Corporation ($M) $62.2 $57.1 8.9%
Non-GAAP net
income
attributable to
SYNNEX
Corporation
($M)(1) $71.6 $72.7 -1.4%
Diluted EPS $1.56 $1.44 8.3%
Non-GAAP Diluted
EPS(1) $1.80 $1.83 -1.6%
(1) Non-GAAP financial measures exclude the impact of acquisition and other integration
expenses and the amortization of intangible assets. A reconciliation of GAAP to Non-
GAAP financial information is presented in the supplementary information section at the
end of this press release.
"We delivered another solid quarter with Technology Solutions showing sequential growth in line with expectations," stated Kevin Murai, President and Chief Executive Officer. He added, "Concentrix delivered another outstanding quarter as we benefitted from a healthy pipeline and strong execution."
Fiscal 2015 Fourth Quarter Highlights:
-- Technology Solutions: Revenue was $3.2 billion, down 8.8% from the prior
fiscal year quarter. Adjusting for the translation effect of foreign
currencies, the Technology Solutions business decreased by 6.2% compared
with last year. Technology Solutions generated operating income of $80.4
million, or 2.53% of segment revenue, compared with $94.9 million, or
2.72% of segment revenue, in the fiscal fourth quarter of 2014.
-- Concentrix: Revenue was $373.6 million, a 9.3% increase from the $342.0
million in revenue generated during the fourth quarter of last year.
Adjusting for the translation effect of foreign currencies, Concentrix
revenue grew 15.3% compared with last year. Operating income was $24.4
million, or 6.53% of Concentrix revenue, compared with $4.7 million in
the prior fiscal year quarter. Non-GAAP operating income was $38.8
million, or 10.38% of segment revenue, for fiscal fourth quarter of
2015, compared with $29.1 million, or 8.52% of segment revenue, in the
fiscal fourth quarter of 2014.
-- The trailing fiscal four quarters Return on Invested Capital ("ROIC")
was 9.2% compared with 8.3% in the prior year fiscal fourth quarter.
Excluding the impact of acquisition and integration expenses and
amortization of intangibles, the trailing fiscal four quarters ROIC was
10.4%.
-- The debt to capitalization ratio was 28.9%, down from 37.2% in the prior
fiscal year fourth quarter.
-- Depreciation and amortization were $13.4 million and $13.0 million,
respectively.
-- Cash generated from operations was approximately $102 million for the
quarter.
FY15 FY14 Net change
---- ---- ----------
Revenue ($M) $13,338 $13,840 -3.6%
Operating income
($M) $354.6 $308.5 14.9%
Non-GAAP
operating income
($M)(1) $419.4 $406.7 3.1%
Operating margin 2.66% 2.23% 43 bps
Non-GAAP
operating
margin(1) 3.14% 2.94% 20 bps
Net income
attributable to
SYNNEX
Corporation ($M) $208.5 $180.0 15.8%
Non-GAAP net
income
attributable to
SYNNEX
Corporation
($M)(1) $249.9 $242.3 3.1%
Diluted EPS $5.24 $4.57 14.7%
Non-GAAP Diluted
EPS(1) $6.28 $6.16 1.9%
(1) Non-GAAP financial measures exclude the impact of acquisition and other integration
expenses and the amortization of intangible assets. A reconciliation of GAAP to Non-GAAP
financial information is presented in the supplementary information section at the end of
this press release.
Fiscal 2015 Highlights:
-- Technology Solutions: Revenue was $11.9 billion, down 6.4% from the
prior fiscal year. Adjusting for the translation effect of foreign
currencies, the Technology Solutions business decreased by 3.7% compared
with last year. Technology Solutions operating income was $303.0
million, or 2.54% of segment revenue compared with $305.5 million, or
2.40% of segment revenue, in fiscal 2014.
-- Concentrix: Revenue was $1.4 billion, a 29.2% increase from the $1.1
billion in revenue generated during last year. Adjusting for the IBM CRM
acquisition and translation effect of foreign currencies, Concentrix
revenue grew 12.2% compared with last year. Operating income was $51.1
million, or 3.61% of Concentrix revenue, compared with $2.5 million in
the prior fiscal year. Non-GAAP operating income was $113.4 million, or
8.00% of segment revenue, for fiscal 2015, compared with $97.1 million,
or 8.86% of segment revenue, in fiscal 2014.
-- Depreciation and amortization were $48.8 million and $54.8 million,
respectively.
-- Cash generated from operations was approximately $659 million for the
year.
Fiscal 2016 First Quarter Outlook:
The following statements are based on SYNNEX's current expectations for the fiscal 2016 first quarter. Non-GAAP financial measures exclude acquisition and other integration expenses and amortization of intangibles. These statements are forward-looking and actual results may differ materially.
-- Revenue is expected to be in the range of $3.23 billion to $3.33
billion.
-- Non-GAAP net income is expected to be in the range of $53.6 million to
$55.6 million.
-- Non-GAAP diluted earnings per share is expected to be in the range of
$1.34 to $1.39.
-- After-tax amortization of intangibles is expected to be $7.7 million, or
$0.19 per share.
-- We anticipate a negative currency impact on revenue of approximately $55
million.
Dividend Announcement
SYNNEX announced today that its Board of Directors has declared a quarterly cash dividend of $0.20 per common share. The dividend will be payable on January 29, 2016 to stockholders of record as of the close of business on January 15, 2016.
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 where it will be archived for one year.
About SYNNEX Corporation
SYNNEX Corporation (NYSE: SNX), a Fortune 500 corporation, is a leading business process services company, optimizing supply chains and providing outsourced services focused on customer relationship management. SYNNEX distributes a broad range of information technology systems and products, and also provides systems design and integration solutions. Concentrix, a wholly-owned subsidiary of SYNNEX Corporation, offers a portfolio of strategic solutions and end-to-end business services around customer engagement strategy, process optimization, technology innovation, front and back-office automation and business transformation to clients in ten identified industry verticals. Founded in 1980, SYNNEX Corporation operates in 26 countries around the world. 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 non-GAAP operating income, non-GAAP operating margin, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA"), non-GAAP net income attributable to SYNNEX Corporation and non-GAAP diluted earnings per share, which are non-GAAP financial measures that exclude the amortization of intangible assets and acquisition and integration expenses related to the IBM CRM acquisition and the related tax effects thereon. These non-GAAP measures provide investors with an additional tool to evaluate operating results. Because these non-GAAP measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.
SYNNEX refers to growth rates at constant currency or adjusting for the translation effect of foreign currencies so that certain financial results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of the Company's business performance. Financial results adjusted for currency are calculated by translating current period activity in local currency using the comparable prior year periods' currency conversion rate. This approach is used for countries where the functional currency is the local currency. Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates or adjusting for currency will be higher or lower than growth reported at actual exchange rates.
Trailing fiscal four quarters ROIC is defined as the last four quarters' tax effected operating income divided by the average of the last five quarterly balances of debt and equity, net of cash and cash equivalents in the United States. ROIC excluding the impact of IBM CRM acquisition and integration expenses and amortization of intangibles is calculated by excluding the tax effected impact of these items from operating income and equity.
SYNNEX management uses non-GAAP financial measures 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 non-GAAP financial measures in order to assess the performance of SYNNEX' continuing businesses and for planning and forecasting in future periods. These non-GAAP measures are intended to provide investors with an understanding of SYNNEX' 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 measures are 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 SYNNEX' non-GAAP financial information to GAAP is set forth in the supplemental information table at the end of this press release.
Safe Harbor Statement
Statements in this news 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, foresee, expect, may, will, provide, could and should and the negative of these terms or other similar expressions. These statements, including statements regarding SYNNEX' expectations and outlook for the fiscal 2016 first quarter as to revenue, non-GAAP net income, non-GAAP diluted earnings per share, after-tax amortization of intangibles, currency impact, investments, the frequency and occurrence of dividend declarations, and the anticipated benefits of the non-GAAP financial measures, 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 and pending acquisitions; loss of vendors and suppliers as a result of our recent acquisitions; general economic conditions and any weakness in information technology and consumer electronics spending; the loss or consolidation of one or more of our significant original equipment manufacturer, or 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 market share; variations in supplier-sponsored programs; changes in our costs and operating expenses; changes in foreign currency exchange rates; changes in tax laws; risks associated with our international operations; uncertainties and variability in demand by our reseller and integration 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 anti-dilution share repurchase program; and other risks and uncertainties detailed in our Form 10-K for the fiscal year ended November 30, 2014 and subsequent 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 2016 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)
November 30, November 30,
2015 2014
---- ----
ASSETS
Current assets:
Cash and cash equivalents $336,072 $180,143
Restricted cash 88,558 34,269
Short-term investments 5,546 7,128
Accounts receivable, net 1,759,491 2,091,511
Receivable from related parties 114 332
Inventories 1,328,967 1,398,463
Current deferred tax assets 40,510 34,310
Other current assets 90,523 153,833
------ -------
Total current assets 3,649,781 3,899,989
Property and equipment, net 248,627 200,803
Goodwill 298,785 314,213
Intangible assets, net 166,567 229,684
Deferred tax assets 19,849 10,790
Other assets 60,538 57,563
------ ------
Total assets $4,444,147 $4,713,042
========== ==========
LIABILITIES AND EQUITY
Current liabilities:
Borrowings, current $92,093 $716,257
Accounts payable 1,445,194 1,585,606
Payable to related parties 7,661 5,129
Accrued compensation and benefits 135,453 125,733
Other accrued liabilities 218,687 265,875
Income taxes payable 19,069 23,129
Total current liabilities 1,918,157 2,721,729
Long-term borrowings 638,798 264,246
Other long-term liabilities 76,582 60,215
Deferred tax liabilities 10,713 12,867
------ ------
Total liabilities 2,644,250 3,059,057
--------- ---------
SYNNEX Corporation stockholders' equity:
Preferred stock - -
Common stock 40 40
Additional paid-in capital 411,687 384,625
Treasury stock (51,287) (32,723)
Accumulated other comprehensive income (loss) (55,237) (6,628)
Retained earnings 1,494,178 1,308,244
--------- ---------
Total SYNNEX Corporation stockholders' equity 1,799,381 1,653,558
Noncontrolling interest 516 427
--- ---
Total equity 1,799,897 1,653,985
--------- ---------
Total liabilities and equity $4,444,147 $4,713,042
========== ==========
SYNNEX Corporation
Consolidated Statements of Operations
(currency and share amounts in thousands, except for per share amounts)
(unaudited)
Three Months Ended Fiscal Year Ended
------------------ -----------------
November 30, November 30, November 30, November 30,
2015 2014 2015 2014
---- ---- ---- ----
Revenue:
Products $3,179,751 $3,485,032 $11,936,282 $12,755,264
Services 369,866 338,837 1,402,115 1,084,326
------- ------- --------- ---------
Total revenue 3,549,617 3,823,869 13,338,397 13,839,590
Cost of revenue:
Products (3,012,292) (3,295,645) (11,276,819) (12,075,828)
Services (224,589) (214,602) (869,787) (664,758)
--------
Gross profit 312,736 313,622 1,191,791 1,099,004
Selling, general and
administrative
expenses (207,771) (213,950) (837,239) (790,497)
-------- -------- -------- --------
Operating income 104,965 99,672 354,552 308,507
Interest expense and
finance charges, net (7,246) (6,927) (26,296) (25,187)
Other income
(expense), net 606 (1,261) (1,061) 962
--- ------ ------ ---
Income before income
taxes 98,325 91,484 327,195 284,282
Provision for income
taxes (36,101) (34,376) (118,588) (104,132)
------- ------- -------- --------
Net income 62,224 57,108 208,607 180,150
Net income
attributable to
noncontrolling
interest (67) (28) (82) (116)
--- --- --- ----
Net income
attributable to
SYNNEX Corporation $62,157 $57,080 $208,525 $180,034
======= ======= ======== ========
Earnings per share attributable to SYNNEX
Corporation:
Basic $1.57 $1.45 $5.28 $4.61
===== ===== ===== =====
Diluted $1.56 $1.44 $5.24 $4.57
===== ===== ===== =====
Weighted-average common shares
outstanding:
Basic 39,134 38,874 39,061 38,490
====== ====== ====== ======
Diluted 39,431 39,223 39,352 38,845
====== ====== ====== ======
Cash dividends
declared per share $0.20 $0.13 $0.58 $0.13
SYNNEX Corporation
Segment Information
(currency in thousands)
(unaudited)
Three Months Ended Fiscal Year Ended
------------------ -----------------
November 30, November 30, November 30, November 30,
2015 2014 2015 2014
---- ---- ---- ----
Revenue:
Technology
Solutions $3,179,819 $3,485,075 $11,936,660 $12,755,514
Concentrix 373,639 341,971 1,416,670 1,096,214
Inter-segment
elimination (3,841) (3,177) (14,933) (12,138)
Consolidated $3,549,617 $3,823,869 $13,338,397 $13,839,590
========== ========== =========== ===========
Operating income:
Technology
Solutions $80,438 $94,897 $302,950 $305,499
Concentrix 24,408 4,657 51,127 2,455
Inter-segment
elimination 119 118 475 553
Consolidated $104,965 $99,672 $354,552 $308,507
======== ======= ======== ========
SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(currency and share amounts in thousands, except for per share amounts)
Three Months Ended Fiscal Year Ended
------------------ -----------------
November 30, 2015 November 30, 2014 November 30, November 30,
2015 2014
----
Operating income and Operating margin
Consolidated
Revenue $3,549,617 $3,823,869 $13,338,397 $13,839,590
GAAP operating income $104,965 $99,672 $354,552 $308,507
IBM CRM acquisition and
other integration
expenses 2,038 8,455 10,109 43,036
Amortization of
intangibles 12,985 16,734 54,756 55,161
------ ------ ------ ------
Non-GAAP operating
income $119,988 $124,861 $419,417 $406,704
Depreciation 13,449 11,368 48,754 36,538
------ ------ ------ ------
Adjusted EBITDA $133,437 $136,229 $468,171 $443,242
GAAP operating margin 2.96% 2.61% 2.66% 2.23%
Non-GAAP operating
margin 3.38% 3.27% 3.14% 2.94%
Technology Solutions
Revenue $3,179,819 $3,485,075 $11,936,660 $12,755,514
GAAP operating income $80,438 $94,897 $302,950 $305,499
Amortization of
intangibles 652 727 2,630 3,538
--- --- ----- -----
Non-GAAP operating
income $81,090 $95,624 $305,580 $309,037
Depreciation 3,307 2,810 12,475 10,817
----- ----- ------ ------
Adjusted EBITDA $84,397 $98,434 $318,055 $319,854
GAAP operating margin 2.53% 2.72% 2.54% 2.40%
Non-GAAP operating
margin 2.55% 2.74% 2.56% 2.42%
Concentrix
Revenue $373,639 $341,971 $1,416,670 $1,096,214
GAAP operating income $24,408 $4,657 $51,127 $2,455
IBM CRM acquisition and
other integration
expenses 2,038 8,455 10,109 43,036
Amortization of
intangibles 12,333 16,007 52,126 51,623
------ ------ ------ ------
Non-GAAP operating
income $38,779 $29,119 $113,362 $97,114
Depreciation 10,261 8,790 36,755 25,953
------ ----- ------ ------
Adjusted EBITDA $49,040 $37,909 $150,117 $123,067
GAAP operating margin 6.53% 1.36% 3.61% 0.22%
Non-GAAP operating
margin 10.38% 8.52% 8.00% 8.86%
SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(currency and share amounts in thousands, except for per share amounts)
Three Months Ended Fiscal Year Ended
------------------ -----------------
November 30, 2015 November 30, 2014 November 30, 2015 November 30, 2014
----------------- ----------------- ----------------- -----------------
Net income
Net income attributable to SYNNEX
Corporation $62,157 $57,080 $208,525 $180,034
IBM CRM acquisition and other integration
expenses, net of taxes(1) 1,283 5,181 6,445 27,357
Amortization of intangibles, net of
taxes(1) 8,194 10,416 34,910 34,956
----- ------ ------ ------
Non-GAAP net income attributable to
SYNNEX Corporation $71,634 $72,677 $249,880 $242,347
Diluted earnings per common share ("EPS")(2)
Net income attributable to SYNNEX
Corporation $62,157 $57,080 $208,525 $180,034
Less: net income allocated to
participating securities (673) (715) (2,413) (2,386)
---- ---- ------ ------
Net income attributable to SYNNEX
Corporation common stockholders 61,484 56,365 206,112 177,648
IBM CRM acquisition and other integration
expenses attributable to SYNNEX
Corporation common stockholders, net of
taxes(1) 1,270 5,118 6,380 27,001
Amortization of intangibles attributable
to SYNNEX Corporation common
stockholders, net of taxes(1) 8,103 10,288 34,494 34,501
----- ------ ------ ------
Non-GAAP net income attributable to
SYNNEX Corporation common stockholders $70,857 $71,771 $246,986 $239,150
======= ======= ======== ========
Weighted-average number of common shares
- diluted: 39,431 39,223 39,352 38,845
====== ====== ====== ======
Diluted EPS(2) $1.56 $1.44 $5.24 $4.57
IBM CRM acquisition and other integration
expenses 0.03 0.13 0.16 0.70
Amortization of intangibles 0.21 0.26 0.88 0.89
---- ---- ---- ----
Non-GAAP Diluted EPS $1.80 $1.83 $6.28 $6.16
===== ===== ===== =====
(1) The tax effect of the non-GAAP adjustments was calculated using the applicable effective tax rate during the periods.
(2) Diluted EPS for all periods presented is calculated using the two-class method. Unvested restricted stock awards granted to employees and non-employee directors are considered participating securities. For purposes of calculating Diluted
EPS, Net income allocated to participating securities was approximately 1.1% and 1.2% of the Net income attributable to SYNNEX Corporation for the three months and year ended November 30, 2015, respectively, and approximately 1.3% for both the
three months and year ended November 30, 2014.
SYNNEX Corporation
Calculation of Financial Metrics
(currency in thousands)
Return on Invested Capital
Trailing Fiscal Four Quarters Ended
-----------------------------------
November 30, 2015 November 30, 2014
----------------- -----------------
ROIC
Operating income $354,552 $308,507
Income taxes on
operating
income(1) 128,503 113,005
------- -------
Operating income
after taxes 226,049 195,502
Total borrowings
(five quarters
average) $804,906 $807,658
Total equity
(five quarters
average) 1,723,374 1,559,621
Less: U.S. cash
and cash
equivalents
(five quarters
average) (80,476) (11,954)
------- -------
Total invested
capital 2,447,804 2,355,325
ROIC 9.2% 8.3%
Adjusted ROIC
Non-GAAP
operating income $419,417 $406,704
Income taxes on
Non-GAAP
operating
income(1) 152,013 148,975
------- -------
Non-GAAP
operating income
after taxes 267,404 257,729
Total invested
capital $2,447,804 $2,355,325
Tax effected
impact of IBM
CRM acquisition
and other
integration
expenses and
amortization of
intangibles
(five quarters
average) 118,241 64,083
------- ------
Total Non-GAAP
invested capital 2,566,045 2,419,408
Adjusted ROIC 10.4% 10.7%
(1) Income taxes on operating income was calculated using the applicable effective tax rates during the periods presented.
Debt to Capitalization
November 30, November 30,
2015 2014
---- ----
Total
borrowings (a) $730,891 $980,503
Total equity (b) 1,799,897 1,653,985
Debt to
capitalization (a)/((a)+(b)) 28.9% 37.2%
==== ====
SYNNEX Corporation
Cash Conversion Cycle
(currency in thousands)
Three Months Ended
------------------
November 30, 2015 November 30, 2014
Days sales outstanding
Revenue (products
and services) (a) $3,549,617 $3,823,869
Accounts
receivable,
including
receivable from
related parties (b) 1,759,605 2,091,843
---
Days sales (b)/((a)/the number of
outstanding days during the
period) 45 50
Days inventory outstanding
Cost of revenue
(products and
services) (c) 3,236,881 3,510,247
Inventories (d) 1,328,967 1,398,463
---
Days inventory (d)/((c)/the number of
outstanding days during the
period) 37 36
Days payable outstanding
Cost of revenue
(products and
services) (e) $3,236,881 $3,510,247
Accounts payable,
including
payable to
related parties (f) 1,452,855 1,590,735
---
Days payable (f)/((e)/the number of
outstanding days during the
period) 41 41
Cash conversion cycle 41 45
=== ===
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SOURCE SYNNEX CORP
