FREMONT, Calif., Jan. 11, 2021 /PRNewswire/ — SYNNEX Corporation (NYSE: SNX), a leading provider of distribution, systems design and integration services for the technology industry, today announced financial results for the fiscal fourth quarter and fiscal year ended November 30, 2020. 

Q4 FY20

Q4 FY19

Net change

Revenue ($M)

$

7,414

$

6,581

12.7%

Operating income ($M)

$

320.6

$

268.3

19.5%

Non-GAAP operating income ($M)(1)

$

388.2

$

338.5

14.7%

Operating margin

4.32

%

4.08

%

24 bps

Non-GAAP operating margin(1)

5.24

%

5.14

%

10 bps

Net income ($M)

$

215.2

$

176.0

22.2%

Non-GAAP net income ($M)(1)

$

270.8

$

219.6

23.3%

Diluted earnings per common share (“EPS”)

$

4.14

$

3.41

21.4%

Non-GAAP Diluted EPS(1)

$

5.21

$

4.26

22.3%

“We are proud to have delivered record financial results to close our fiscal year while concurrently delivering a successful spin of our Concentrix business on December 1, 2020. We are also energized to enter fiscal 2021 with a renewed singular focus on the market opportunities for our Technology Solutions’ business,” said Dennis Polk, SYNNEX President and CEO. “We look forward to leveraging this positive momentum, coupled with our unique market position and solid financial base, to further optimize our core operation, continue our organic growth efforts and to pursue strategic acquisitions.”

Fourth Quarter Fiscal 2020 Highlights:

  • Technology Solutions: Revenue was $6.1 billion, up 13.9% from the prior fiscal year fourth quarter. Operating income was $200 million, or 3.3% of segment revenue, compared to $167 million, or 3.1% of segment revenue, in the prior fiscal year fourth quarter. Non-GAAP operating income was $216 million, or 3.5% of segment revenue, compared to $178 million, or 3.3% of segment revenue, in the prior fiscal year fourth quarter.
  • Concentrix: Revenue was $1.3 billion, up 7.3% from the prior fiscal year fourth quarter. Operating income was $120 million, or 9.2% of segment revenue, compared to $101 million, or 8.4% of segment revenue in the prior fiscal year fourth quarter. Non-GAAP operating income was $172 million, or 13.2% of segment revenue, compared to $161 million, or 13.3% of segment revenue, in the prior fiscal year fourth quarter.
  • The trailing fiscal four quarters Return on Invested Capital (“ROIC”) was 9.9% compared to 8.8% in the prior fiscal year fourth quarter. The adjusted trailing fiscal four quarters ROIC was 11.5%.
  • Cash generated from operations was approximately $297 million for the quarter.

FY20

FY19

Net change

Revenue ($M)

$

24,676

$

23,757

3.9%

Operating income ($M)

$

830.1

$

813.8

2.0%

Non-GAAP operating income ($M)(1)

$

1,062.4

$

1,095.7

-3.0%

Operating margin

3.36

%

3.43

%

-7 bps

Non-GAAP operating margin(1)

4.31

%

4.61

%

-30 bps

Net income ($M)

$

529.2

$

500.7

5.7%

Non-GAAP net income ($M)(1)

$

708.5

$

681.5

4.0%

Diluted earnings per common share (“EPS”)

$

10.21

$

9.74

4.8%

Non-GAAP Diluted EPS(1)

$

13.68

$

13.26

3.2%

Fiscal 2020 Highlights:

  • Technology Solutions: Revenue was $20.0 billion, up 4.8% from the prior fiscal year. Operating income was $521 million, or 2.6% of segment revenue, compared to $519 million, or 2.7% of segment revenue, in the prior fiscal year. Non-GAAP operating income was $569 million, or 2.9% of segment revenue, in fiscal year 2020, compared to $564 million, or 3.0% of segment revenue, in the prior fiscal year.
  • Concentrix: Revenue was $4.7 billion, up 0.2% from the prior fiscal. Operating income was $309 million, or 6.5% of segment revenue, compared to $294 million, or 6.3% of segment revenue, in the prior fiscal year. Non-GAAP operating income was $494 million, or 10.5% of segment revenue, in fiscal year 2020, compared to $531 million, or 11.3% of segment revenue, in the prior fiscal year.
  • Cash generated from operations was approximately $1.844 billion for the year.

First Quarter Fiscal 2021 Outlook:
The following statements are based on SYNNEX’ current expectations for the fiscal 2021 first quarter. Non-GAAP financial measures exclude the impact of the amortization of intangible assets, share-based compensation and the related tax effects thereon. These statements are forward-looking and actual results may differ materially.

  • Revenue is expected to be in the range of $4.50 billion to $4.80 billion.
  • Net income is expected to be in the range of $70.3 million to $80.8 million and on a non-GAAP basis, net income is expected to be in the range of $81.0 million to $91.5 million.
  • Diluted earnings per share is expected to be in the range of $1.34 to $1.55 and on a non-GAAP basis, diluted earnings per share is expected to be in the range of $1.55 to $1.75, based on estimated outstanding diluted weighted average shares of 51.8 million.
  • After-tax amortization of intangibles is expected to be $7.3 million, or $0.14 per share.
  • After-tax share-based compensation expense is expected to be $3.4 million, or $0.07 per share.

Dividend
SYNNEX announced today that its Board of Directors reinstated a quarterly cash dividend of $0.20 per common share. The dividend is payable on January 29, 2021 to stockholders of record as of the close of business on January 22, 2021. The SYNNEX Board of Directors will assess the dividend on an annual basis each January. 

Conference Call and Webcast
SYNNEX will host a conference call to discuss the fiscal 2020 fourth quarter results at 2:00 PM (PT)/5:00 PM (ET).

A live audio webcast of the earnings call will be accessible at ir.synnex.com, and a replay of the webcast will be available following the call.

About SYNNEX
SYNNEX Corporation (NYSE: SNX) is a Fortune 200 corporation and a leading provider of a comprehensive range of distribution, systems design and integration services for the technology industry to a wide range of enterprises. Founded in 1980, SYNNEX Corporation operates in numerous countries throughout North and South America, Asia-Pacific and Europe. Additional information about SYNNEX may be found online at synnex.com.

(1)Use of Non-GAAP Financial Information
In addition to the financial results presented in accordance with GAAP, SYNNEX also uses adjusted selling, general and administrative expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per share, which are non-GAAP financial measures that exclude transaction-related and integration expenses, the amortization of intangible assets and the related tax effects thereon. The Company also uses adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) which excludes other income (expense), net, and transaction-related and integration expenses. In fiscal year 2019, non-GAAP net income and non-GAAP diluted earnings per share also exclude gains upon the settlement of contingent consideration and a contingent gain related to the Westcon-Comstor Americas acquisition. In prior periods, SYNNEX has excluded other items relevant to those periods for purposes of its non-GAAP financial measures.

Transaction-related expenses typically consist of acquisition, integration, and divestiture related costs and are expensed as incurred. These expenses primarily represent costs for legal, banking, consulting and advisory services, and debt extinguishment fees.  From time to time, this category may also include transaction-related gains/losses on divestitures/spin-off of businesses.

SYNNEX’ acquisition activities have resulted in the recognition of intangible assets which consist primarily of customer relationships, vendor lists and technology. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in the Company’s statements of operations within each segment. Although intangible assets contribute to the Company’s revenue generation, the amortization of intangible assets does not directly relate to the sale of the Company’s products and the services performed for the Company’s clients. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of the Company’s acquisition activity. Accordingly, the Company believes excluding the amortization of intangible assets, along with the other non-GAAP adjustments which neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance and to analyze underlying business performance and trends. Intangible asset amortization excluded from the related non-GAAP financial measure represents the entire amount recorded within the Company’s GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised.

Effective the first quarter of fiscal year 2021, the Company will also exclude share-based compensation expense in the computation of its non-GAAP financial measures. Share-based compensation expense is a non-cash expense arising from the grant of equity awards to employees based on the estimated fair value of those awards. Although share-based compensation is an important aspect of the compensation of our employees, the fair value of the share-based awards may bear little resemblance to the actual value realized upon the vesting or future exercise of the related share-based awards and the expense can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Given the variety and timing of awards and the subjective assumptions that companies can use when calculating share-based compensation expense, SYNNEX believes this additional information allows investors to make additional comparisons between our operating results from period to period.

Additionally, SYNNEX refers to revenue 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 SYNNEX’ business performance. Financial results adjusted for currency are calculated by translating current period activity in the transaction currency using the comparable prior year periods’ currency conversion rate. Generally, when the dollar either strengthens or weakens against other currencies, revenue at constant currency rates or adjusting for currency will be higher or lower than revenue 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 borrowings (excluding book overdraft) and equity, net of cash and cash equivalents in the United States. Adjusted ROIC is calculated by excluding the tax effected impact of non-GAAP adjustments from operating income and by excluding the cumulative tax effected impact of current and prior period non-GAAP adjustments on equity.

SYNNEX also uses free cash flow, which is cash flow from operating activities, reduced by purchases of property and equipment. SYNNEX uses free cash flow to conduct and evaluate its business because, although it is similar to cash flow from operations, SYNNEX believes it is an additional useful measure of cash flows since purchases of fixed assets are a necessary component of ongoing operations. Free cash flow reflects an additional way of viewing SYNNEX’ liquidity that, when viewed with its GAAP results, provides a more complete understanding of factors and trends affecting its cash flows. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not incorporate payments for business acquisitions. Therefore, SYNNEX believes it is important to view free cash flow as a complement to its entire consolidated statements of cash flows.

SYNNEX management uses non-GAAP financial measures internally to understand, manage and evaluate the business, to establish operational goals, and in some cases for measuring performance for compensation purposes. 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, as well as for planning and forecasting in future periods. Management believes these 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. As these non-GAAP financial 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 SYNNEX’ consolidated financial statements prepared in accordance with GAAP. A reconciliation of SYNNEX’ GAAP to non-GAAP financial information is set forth in the supplemental tables at the end of this press release.

Safe Harbor Statement
Statements in this news release regarding SYNNEX Corporation that 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 forward-looking statements include, but are not limited to, statements regarding strategies and objectives of SYNNEX for future operations, our expectations and outlook for the fiscal 2021 first quarter as to revenue, net income, non-GAAP net income, diluted earnings per share, non-GAAP diluted earnings per share, outstanding diluted weighted average shares, tax rate, after-tax amortization of intangibles, and after-tax share-based compensation; and the anticipated benefits of the non-GAAP financial measures.

The forward-looking statements 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 ability to realize the anticipated benefits of the Concentrix separation; the unfavorable outcome of any legal proceedings that have been or may be instituted against us; the ability to retain key personnel; 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; the declaration, timing and payment of dividends, and the Board’s reassessment thereof; and other risks and uncertainties detailed in our Form 10-K for the fiscal year ended November 30, 2019 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 2021 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.

Investor Contact:
Liz Morali
ir@synnex.com
510-668-8436

SYNNEX Corporation
Consolidated Balance Sheets
(currency and share amounts in thousands, except par value)
(Amounts may not add due to rounding)
(unaudited)

November 30, 2020

November 30, 2019

ASSETS

Current assets:

Cash and cash equivalents

$

1,564,672

$

225,529

Accounts receivable, net

3,870,789

3,926,709

Receivable from vendors, net

286,327

368,505

Inventories

2,684,530

2,547,224

Other current assets

362,808

385,024

Total current assets

8,769,127

7,452,992

Property and equipment, net

609,294

569,899

Goodwill

2,259,935

2,254,402

Intangible assets, net

985,006

1,162,212

Deferred tax assets

87,059

97,539

Other assets

758,169

160,917

Total assets

$

13,468,590

$

11,697,960

LIABILITIES AND EQUITY

Current liabilities:

Borrowings, current

$

158,715

$

298,969

Accounts payable

3,891,815

3,149,443

Accrued compensation and benefits

522,790

402,771

Other accrued liabilities

989,684

723,716

Income taxes payable

67,088

32,223

Total current liabilities

5,630,092

4,607,122

Long-term borrowings

2,608,061

2,718,267

Other long-term liabilities

732,182

361,911

Deferred tax liabilities

159,396

222,210

Total liabilities

9,129,731

7,909,510

Stockholders’ equity:

Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued
or outstanding

Common stock, $0.001 par value, 100,000 shares authorized, 53,671 and
53,154 shares issued as of November 30, 2020 and 2019, respectively

54

53

Additional paid-in capital

1,591,536

1,545,421

Treasury stock, 2,538 and 2,399 shares as of November 30, 2020 and 2019,
respectively

(191,216)

(172,627)

Accumulated other comprehensive income (loss)

(194,571)

(209,077)

Retained earnings

3,133,058

2,624,680

Total stockholders’ equity

4,338,860

3,788,450

Total liabilities and equity

$

13,468,590

$

11,697,960

 

SYNNEX Corporation
Consolidated Statements of Operations
(currency and share amounts in thousands, except per share amounts)
(Amounts may not add due to rounding)
(unaudited)

Three Months Ended

Fiscal Year Ended

November 30,

2020

November 30,

2019

November 30,

2020

November 30,

2019

Revenue:

Products

$

6,118,571

$

5,374,241

$

19,976,885

$

19,069,966

Services

1,295,373

1,207,052

4,698,678

4,687,327

Total revenue

7,413,944

6,581,293

24,675,563

23,757,293

Cost of revenue:

Products

(5,751,929)

(5,036,301)

(18,783,042)

(17,912,711)

Services

(838,660)

(750,453)

(3,044,916)

(2,946,664)

Gross profit

823,355

794,539

2,847,604

2,897,917

Selling, general and administrative expenses

(502,768)

(526,251)

(2,017,502)

(2,084,156)

Operating income

320,588

268,288

830,103

813,761

Interest expense and finance charges, net

(28,290)

(38,726)

(127,336)

(166,421)

Other income (expense), net

(2,004)

10,599

1,276

30,363

Income before income taxes

290,294

240,161

704,042

677,703

Provision for income taxes

(75,142)

(64,160)

(174,882)

(176,991)

Net income

$

215,152

$

176,001

$

529,160

$

500,712

Earnings per common share:

Basic

$

4.17

$

3.44

$

10.28

$

9.79

Diluted

$

4.14

$

3.41

$

10.21

$

9.74

Weighted-average common shares outstanding:

Basic

51,048

50,693

50,900

50,669

Diluted

51,432

51,032

51,237

50,936

 

SYNNEX Corporation
Segment Information
(currency in thousands)
(Amounts may not add due to rounding)
(unaudited)

Three Months Ended

Fiscal Year Ended

November 30,

2020

November 30,

2019

November 30,

2020

November 30,

2019

Revenue:

Technology Solutions

$

6,118,836

$

5,374,241

$

19,977,150

$

19,069,970

Concentrix

1,300,858

1,212,836

4,719,534

4,707,912

Inter-segment elimination

(5,750)

(5,784)

(21,121)

(20,589)

Consolidated

$

7,413,944

$

6,581,293

$

24,675,563

$

23,757,293

Operating income:

Technology Solutions

$

200,380

$

166,834

$

521,341

$

519,429

Concentrix

120,208

101,454

308,761

294,332

Consolidated

$

320,588

$

268,288

$

830,103

$

813,761

 

SYNNEX Corporation
Pro forma SYNNEX Condensed Consolidated Balance Sheet as of November 30, 2020
(currency and shares in thousands, except par value)
(Amounts may not add due to rounding)
(unaudited)

Pro forma SYNNEX

ASSETS

Current assets:

Cash and cash equivalents

$

1,412,016

Accounts receivable, net

2,808,125

Receivable from vendors, net

286,327

Inventories

2,684,076

Other current assets

180,343

Total current assets

7,370,887

Property and equipment, net

157,645

Goodwill

423,885

Intangible assets, net

186,047

Deferred tax assets

39,636

Other assets

138,069

Total assets

$

8,316,169

LIABILITIES AND EQUITY

Current liabilities:

Borrowings, current

$

124,958

Accounts payable

3,753,634

Accrued compensation and benefits

103,075

Other accrued liabilities

618,616

Income taxes payable

46,363

Total current liabilities

4,646,647

Long-term borrowings

1,496,700

Other long-term liabilities

130,296

Deferred tax liabilities

5,836

Total liabilities

6,279,478

Stockholders’ equity:

Common stock, $0.001 par value

54

Additional paid-in capital

1,591,536

Treasury stock

(191,216)

Accumulated other comprehensive income (loss)

(190,758)

Retained earnings

827,077

Total stockholders’ equity

2,036,692

Total liabilities and equity

$

8,316,169

On December 1, 2020, SYNNEX Corporation completed the previously announced separation of its customer experience services businesses, which was accomplished by the distribution of one hundred per cent of the outstanding common stock of Concentrix Corporation to SYNNEX stockholders (the “Distribution”). The unaudited pro forma condensed consolidated balance sheet assumes the Distribution occurred on November 30, 2020 and has been prepared by SYNNEX for illustrative and informational purposes only in accordance with Regulation S-X Article 11, Pro Forma Financial Information, as amended by the final rule, Amendments to Financial Disclosures About Acquired and Disposed Businesses, as adopted by the SEC on May 21, 2020. The unaudited pro forma condensed consolidated balance sheet does not purport to project the future financial position of SYNNEX following the completion of the separation. 

SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(currency in thousands)
(Amounts may not add due to rounding)

Three Months Ended

Fiscal Year Ended

November 30,

2020

November 30,

2019

November 30,

2020

November 30,

2019

Revenue in constant currency

Consolidated

Revenue

$

7,413,944

$

6,581,293

$

24,675,563

$

23,757,293

Foreign currency translation

(3,210)

108,546

Revenue in constant currency

$

7,410,734

$

6,581,293

$

24,784,109

$

23,757,293

Technology Solutions

Revenue

$

6,118,836

$

5,374,241

$

19,977,150

$

19,069,970

Foreign currency translation

8,318

87,806

Revenue in constant currency

$

6,127,154

$

5,374,241

$

20,064,956

$

19,069,970

Concentrix

Revenue

$

1,300,858

$

1,212,836

$

4,719,534

$

4,707,912

Foreign currency translation

(11,528)

20,740

Revenue in constant currency

$

1,289,330

$

1,212,836

$

4,740,274

$

4,707,912

 

Three Months Ended

Fiscal Year Ended

November 30,

2020

November 30,

2019

November 30,

2020

November 30,

2019

Selling, general and administrative expenses

Consolidated

GAAP selling, general and administrative expenses

$

502,768

$

526,251

$

2,017,502

$

2,084,156

Transaction-related and integration expenses

20,546

17,872

44,879

71,454

Amortization of intangibles

46,816

51,937

186,251

208,901

Adjusted selling, general and administrative
expenses

$

435,406

$

456,442

$

1,786,372

$

1,803,801

Technology Solutions

GAAP selling, general and administrative expenses

$

166,277

$

171,105

$

672,516

$

637,830

Transaction-related and integration expenses

5,782

7,414

981

Amortization of intangibles

10,018

10,907

40,148

43,875

Adjusted selling, general and administrative
expenses

$

150,477

$

160,198

$

624,954

$

592,974

Concentrix

GAAP selling, general and administrative expenses

$

338,425

$

356,977

$

1,352,764

$

1,454,116

Transaction-related and integration expenses

14,764

17,872

37,465

70,473

Amortization of intangibles

36,798

41,030

146,103

165,026

Adjusted selling, general and administrative
expenses

$

286,863

$

298,075

$

1,169,196

$

1,218,617

 

SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(currency in thousands)
(Amounts may not add due to rounding)
(continued)

Three Months Ended

Fiscal Year Ended

November 30,

2020

November 30,

2019

November 30,

2020

November 30,

2019

Operating income and Operating margin

Consolidated

Revenue

$

7,413,944

$

6,581,293

$

24,675,563

$

23,757,293

GAAP operating income

$

320,588

$

268,288

$

830,103

$

813,761

Transaction-related and integration expenses

20,546

17,872

44,879

71,454

Amortization of intangibles

47,111

52,332

187,431

210,481

Non-GAAP operating income

$

388,245

$

338,492

$

1,062,413

$

1,095,696

GAAP operating margin

4.32

%

4.08

%

3.36

%

3.43

%

Non-GAAP operating margin

5.24

%

5.14

%

4.31

%

4.61

%

Technology Solutions

Segment revenue

$

6,118,836

$

5,374,241

$

19,977,150

$

19,069,970

GAAP operating income

$

200,380

$

166,834

$

521,341

$

519,429

Transaction-related and integration expenses

5,782

7,414

981

Amortization of intangibles

10,018

10,907

40,148

43,875

Non-GAAP operating income

$

216,180

$

177,741

$

568,903

$

564,285

GAAP operating margin

3.27

%

3.10

%

2.61

%

2.72

%

Non-GAAP operating margin

3.53

%

3.31

%

2.85

%

2.96

%

Concentrix

Segment revenue

$

1,300,858

$

1,212,836

$

4,719,534

$

4,707,912

GAAP operating income

$

120,208

$

101,454

$

308,761

$

294,332

Transaction-related and integration expenses

14,764

17,872

37,465

70,473

Amortization of intangibles

37,093

41,425

147,283

166,606

Non-GAAP operating income

$

172,065

$

160,751

$

493,509

$

531,411

GAAP operating margin

9.24

%

8.37

%

6.54

%

6.25

%

Non-GAAP operating margin

13.23

%

13.25

%

10.46

%

11.29

%

 

SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(currency in thousands)
(Amounts may not add due to rounding)
(continued)

Three Months Ended

Fiscal Year Ended

November 30,

2020

November 30,

2019

November 30,

2020

November 30,

2019

Adjusted EBITDA

Consolidated

Net income

$

215,152

$

176,001

$

529,160

$

500,712

Interest expense and finance charges, net

28,290

38,726

127,336

166,421

Provision for income taxes

75,142

64,160

174,882

176,991

Depreciation (excluding accelerated depreciation
included in transaction-related and integration
expenses below)

43,067

38,273

154,048

157,277

Amortization of intangibles

47,111

52,332

187,431

210,481

EBITDA

$

408,762

$

369,492

$

1,172,857

$

1,211,882

Other (income) expense, net (excluding amounts
included in transaction-related and integration
expenses below)

1,834

(10,599)

(1,964)

(30,192)

Transaction-related and integration expenses

22,969

17,872

47,820

71,283

Adjusted EBITDA

$

433,565

$

376,765

$

1,218,713

$

1,252,973

Technology Solutions

Net income

$

133,289

$

130,808

$

337,526

$

366,888

Interest expense and finance charges, net

19,491

18,501

79,023

74,225

Provision for income taxes

42,433

28,526

98,621

106,399

Depreciation

7,273

5,735

24,923

22,454

Amortization of intangibles

10,018

10,907

40,148

43,875

EBITDA

$

212,504

$

194,477

$

580,241

$

613,841

Other (income) expense, net

5,167

(11,001)

6,172

(28,083)

Transaction-related and integration expenses

8,035

9,667

981

Adjusted EBITDA

$

225,706

$

183,476

$

596,080

$

586,739

Concentrix

Net income

$

81,863

$

45,193

$

191,634

$

133,824

Interest expense and finance charges, net

8,798

20,226

48,313

92,196

Provision for income taxes

32,709

35,634

76,261

70,592

Depreciation (excluding accelerated depreciation
included in transaction-related and integration
expenses below)

35,794

32,538

129,125

134,823

Amortization of intangibles

37,093

41,425

147,283

166,606

EBITDA

$

196,257

$

175,016

$

592,616

$

598,041

Other (income) expense, net (excluding amounts
included in transaction-related and integration
expenses below)

(3,333)

401

(8,135)

(2,109)

Transaction-related and integration expenses

14,934

17,872

38,153

70,302

Adjusted EBITDA

$

207,858

$

193,289

$

622,634

$

666,234

 

SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(currency and share amounts in thousands, except per share amounts)
(Amounts may not add due to rounding)
(continued)

Three Months Ended

Fiscal Year Ended

November 30,

2020

November 30,

2019

November 30,

2020

November 30,

2019

Net income

Net income

$

215,152

$

176,001

$

529,160

$

500,712

Transaction-related and integration expenses

22,969

17,872

47,820

71,283

Amortization of intangibles

47,111

52,332

187,431

210,481

Contingent consideration

(19,034)

Acquisition-related contingent gain

(11,112)

(11,112)

Income taxes related to the above(1)

(14,469)

(15,492)

(55,876)

(70,820)

Non-GAAP net income

$

270,763

$

219,601

$

708,535

$

681,510

Diluted earnings per common share (“EPS”)(2)

Net income

$

215,152

$

176,001

$

529,160

$

500,712

Less: net income allocated to participating
securities

2,056

1,812

5,847

4,573

Net income attributable to common stockholders

213,096

174,189

523,313

496,139

Transaction-related and integration expenses
attributable to common stockholders

22,750

17,680

47,301

70,623

Amortization of intangibles attributable to
common stockholders

46,661

51,771

185,397

208,531

Contingent consideration attributable to
common stockholders

(18,858)

Acquisition-related contingent gain attributable
to common stockholders

(10,993)

(11,009)

Income taxes related to the above attributable to
common stockholders(1)

(14,331)

(15,326)

(55,270)

(70,164)

Non-GAAP net income attributable to common
stockholders

$

268,176

$

217,322

$

700,741

$

675,262

Weighted-average number of common shares –
diluted:

51,432

51,032

51,237

50,936

Diluted EPS(2)

$

4.14

$

3.41

$

10.21

$

9.74

Transaction-related and integration expenses

0.44

0.35

0.92

1.39

Amortization of intangibles

0.91

1.01

3.62

4.09

Contingent consideration

(0.37)

Acquisition-related contingent gain

(0.22)

(0.22)

Income taxes related to the above(1)

(0.28)

(0.30)

(1.08)

(1.38)

Non-GAAP Diluted EPS

$

5.21

$

4.26

$

13.68

$

13.26

 

SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(Amounts may not add due to rounding)
(continued)

Three Months Ended

Fiscal Year Ended

(Currency in thousands)

November 30,

2020

November 30,

2019

November 30,

2020

November 30,

2019

Net cash provided by operating activities

$

297,292

$

349,280

$

1,844,389

$

549,918

Purchases of property and equipment

(70,617)

(45,825)

(197,965)

(137,423)

Free cash flow

$

226,675

$

303,455

$

1,646,424

$

412,495

 

Forecast

Three Months Ending February 28, 2021

(Amounts in millions, except per share amounts)

Low

High

Net income

$

70.3

$

80.8

Share-based compensation

4.5

4.5

Amortization of intangibles

9.7

9.7

Income taxes related to the above(1)

(3.5)

(3.5)

Non-GAAP net income

$

81.0

$

91.5

Diluted EPS(2)

$

1.34

$

1.55

Share-based compensation

0.09

0.09

Amortization of intangibles

0.19

0.19

Income taxes related to the above(1)

(0.07)

(0.07)

Non-GAAP Diluted EPS

$

1.55

$

1.75

(1) The tax effect of taxable and deductible non-GAAP adjustments was calculated using the effective year-to-date tax rate during the respective periods.

(2) Diluted EPS is calculated using the two-class method. Unvested restricted stock awards granted to employees are considered participating securities. For purposes of calculating Diluted EPS, Net income allocated to participating securities was approximately 1.0% of Net income for both the three months ended November 30, 2020 and 2019. Net income allocated to participating securities was approximately 1.1% and 0.9% of Net income for the years ended November 30, 2020 and 2019, respectively. Net income allocable to participating securities is estimated to be approximately 0.9% of the forecast Net income for the three months ending February 28, 2021.

 

SYNNEX Corporation
Calculation of Financial Metrics
(currency in thousands)
(Amounts may not add or compute due to rounding)
Return on Invested Capital (“ROIC”)

November 30, 2020

November 30, 2019

ROIC

Operating income (trailing fiscal four quarters)

$

830,103

$

813,761

Income taxes on operating income(1)

(205,035)

(211,985)

Operating income after taxes

$

625,068

$

601,776

Total borrowings, excluding book overdraft (last five quarters average)

$

2,908,153

$

3,364,846

Total equity (last five quarters average)

3,982,192

3,574,562

Less: U.S. cash and cash equivalents (last five quarters average)

(583,473)

(66,036)

Total invested capital

$

6,306,872

$

6,873,372

ROIC

9.9

%

8.8

%

Adjusted ROIC

Non-GAAP operating income (trailing fiscal four quarters)

$

1,062,413

$

1,095,696

Income taxes on Non-GAAP operating income(1)

(259,972)

(285,758)

Non-GAAP operating income after taxes

$

802,441

$

809,938

Total invested capital

$

6,306,872

$

6,873,372

Tax effected impact of cumulative non-GAAP adjustments (last five

   quarters average)

661,518

487,394

Total Non-GAAP invested capital

$

6,968,390

$

7,360,766

Adjusted ROIC

11.5

%

11.0

%

 (1) Income taxes on GAAP operating income was calculated using the effective year-to-date tax rates during the respective periods. Income taxes on non-GAAP operating income was calculated by excluding the tax effect of taxable and deductible non-GAAP adjustments using the effective year-to-date tax rate during the respective periods.

 

Debt to Adjusted EBITDA leverage ratio

November 30,

2020

November 30,

2019

Total borrowings, excluding book overdraft

(a)

$

2,766,319

$

3,014,152

Less: cash and cash equivalents

(b)

1,564,672

225,529

Net debt

(c)=(a)-(b)

$

1,201,647

$

2,788,623

Trailing fiscal four quarters Adjusted EBITDA

(d)

$

1,218,713

$

1,252,973

Debt to Adjusted EBITDA leverage ratio

(e)=(a)/(d)

2.3

2.4

Net debt to Adjusted EBITDA leverage ratio

(f)=(c)/(d)

1.0

2.2

 

SYNNEX Corporation
Calculation of Financial Metrics
(currency in thousands)
(Amounts may not add or compute due to rounding)
(continued)
Cash Conversion Cycle

Three Months Ended

November 30,

2020

November 30,

2019

Consolidated

Days sales outstanding

Revenue (products and services)

(a)

$

7,413,944

$

6,581,293

Accounts receivable, net

(b)

3,870,789

3,926,709

Days sales outstanding

(c) = (b)/((a)/the number of
days during the period)

48

54

Days inventory outstanding

Cost of revenue (products and services)

(d)

$

6,590,589

$

5,786,754

Inventories

(e)

2,684,530

2,547,224

Days inventory outstanding

(f) = (e)/((d)/the number of
days during the period)

37

40

Days payable outstanding

Cost of revenue (products and services)

(g)

$

6,590,589

$

5,786,754

Accounts payable

(h)

3,891,815

3,149,443

Days payable outstanding

(i) = (h)/((g)/the number of
days during the period)

54

50

Cash conversion cycle

(j) = (c)+(f)-(i)

31

44

Technology Solutions

Days sales outstanding

Segment revenue

(a)

$

6,118,836

$

5,374,241

Accounts receivable, net

(b)

2,808,125

2,995,610

Days sales outstanding

(c) = (b)/((a)/the number of
days during the period)

42

51

Days inventory outstanding

Segment cost of revenue

(d)

$

5,752,179

$

5,036,301

Inventories

(e)

2,684,076

2,546,115

Days inventory outstanding

(f) = (e)/((d)/the number of
days during the period)

42

46

Days payable outstanding

Segment cost of revenue

(g)

$

5,752,179

$

5,036,301

Accounts payable

(h)

3,753,634

3,104,886

Days payable outstanding

(i) = (h)/((g)/the number of
days during the period)

59

56

Cash conversion cycle

(j) = (c)+(f)-(i)

25

41

 

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