SYNNEX Corporation Reports Fiscal 2013 Second Quarter Results
SYNNEX Corporation Reports Fiscal 2013 Second Quarter Results
Solid Performance in Both Core Distribution and GBS Segments
FREMONT, Calif.--(BUSINESS WIRE)-- SYNNEX Corporation (NYS: SNX) , a leading business process services company, today announced financial results for the fiscal second quarter ended May 31, 2013.
Operating income ($M)
Net income attributable to SYNNEX Corporation ($M)
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"I am pleased to report healthy quarterly results highlighted by stronger than expected sales in our distribution segment, and continued strong growth in our Concentrix business," stated Kevin Murai, President and Chief Executive Officer.
Fiscal 2013 Second Quarter Highlights:
Distribution: Revenue was $2.54 billion, reflecting 4.2% growth from the prior fiscal year quarter. Adjusting for the translation effect of foreign currencies, primarily the yen, our distribution business on a constant dollar basis was up 6.7%. Distribution revenue includes approximately $45 million of revenue from our mid quarter Supercom acquisition. Distribution income before non-operating items, income taxes and noncontrolling interest was $47.7 million, or 1.88% of distribution revenue compared with $56.4 million, or 2.31% in the prior fiscal year quarter.
Global Business Services (GBS): Revenue was $55.1 million, an increase of 15.4% over the prior fiscal year quarter. GBS income before non-operating items, income taxes and noncontrolling interest was $4.4 million, or 7.91% of GBS revenue compared with $2.6 million, or 5.40% in the prior fiscal year quarter.
One-time integration costs associated with the recently closed Supercom acquisition were $2.1 million on a pre-tax basis.
The Company called its $144 million 4% convertible debt and made a decision in the second quarter to pay the conversion spread in cash. The final cash payment of both principal and the conversion spread will be made in the third quarter in accordance with the settlement provisions of the indenture.
Trailing fiscal four quarters ROIC was 9.6% for the fiscal second quarter of 2013, compared to 11.7% in the prior fiscal year quarter.
The cash conversion cycle was 42 days, down two days from the prior fiscal year quarter.
The debt to capitalization ratio was 18%.
Depreciation and amortization were $4.0 million and $2.0 million, respectively.
Fiscal 2013 Third Quarter Outlook:
The following statements are based on the Company's current expectations for the fiscal 2013 third quarter. These statements are forward-looking and actual results may differ materially.
"With recent signs of economic strengthening, we anticipate that IT demand will slowly improve but remain somewhat mixed across products and geographies." Mr. Murai continued, "We remain committed to growing our business and expect our margins to improve during the second half of the year reflecting the progress we've made in protecting market share and managing profitability."
Revenue is expected to be in the range of $2.65 billion to $2.75 billion.
Net income is expected to be in the range of $34.3 million to $35.5 million.
Diluted EPS is expected to be in the range of $0.91 to $0.95, which does not include the dilutive impact of the convertible debt conversion spread, if any.
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.
SYNNEX Corporation (NYS: SNX) , a Fortune 500 corporation, is a leading business process services company, servicing resellers, retailers 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 approximately 12,500 full-time and part-time associates worldwide. 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 the demand and economic environment, growth in business and margins, investment and growth in our GBS segment, timing of payments and our revenue, market share, profitability, operating margins, 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: our ability to successfully integrate our recent acquisitions; diversion of management as a result of our recent acquisitions; loss of vendors and suppliers as a result of our recent acquisitions; general economic conditions and any weakness in IT and consumer electronics 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; our ability to gain or maintain market share; changes in our costs and operating expenses; changes in foreign currency exchange rates; changes in the tax laws; 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 business process outsourcing and contract assembly business; risks associated with our anti-dilution share repurchase program; and other risks and uncertainties detailed in our Form 10-Q for the fiscal quarter ended February 28, 2013 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 2013 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.
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Deirdre Skolfield, CFA, 510-668-3715
KEYWORDS: United States North America California
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