FREMONT, Calif., Jan. 9, 2020 /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, 2019. 



Q4 FY19



Q4 FY18(2)



Net change

Revenue ($M)


$

6,581



$

5,544



18.7%

Operating income ($M)


$

268.3



$

200.9



33.5%

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


$

338.5



$

267.8



26.4%

Operating margin



4.08

%



3.62

%


46 bps

Non-GAAP operating margin(1)



5.14

%



4.83

%


31 bps

Net income ($M)


$

176.0



$

115.2



52.8%

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


$

219.6



$

173.6



26.5%

Diluted earnings per common share ("EPS")


$

3.41



$

2.45



39.2%

Non-GAAP Diluted EPS(1)


$

4.26



$

3.69



15.4%

"Our record financial performance in Q4, driven by strong contributions from our Technology Solutions and Concentrix segments, is a very satisfying conclusion to an exceptional year," said Dennis Polk, SYNNEX President and CEO. "Fiscal 2019 was a defining year for SYNNEX, as we invested in, integrated and operated both businesses at scale, while generating solid returns from each segment. Fiscal 2020 will be another defining period as we plan to separate SYNNEX and Concentrix to further enable each entity to achieve its growth potential."

Fourth Quarter Fiscal 2019 Highlights:

  • Technology Solutions: Revenue was $5.4 billion, up 17.4% from the prior fiscal year fourth quarter. Operating income was $167 million, or 3.1% of segment revenue, compared to $126 million, or 2.7% of segment revenue, in the prior fiscal year fourth quarter. Non-GAAP operating income was $178 million, or 3.3% of segment revenue, compared to $139 million, or 3.0% of segment revenue, in the prior fiscal year fourth quarter.
  • Concentrix: Revenue was $1.2 billion, up 24.7% from the prior fiscal year fourth quarter primarily due to the impact of the Convergys acquisition on October 5, 2018. Operating income was $101 million, or 8.4% of segment revenue, compared to $75 million, or 7.7% of segment revenue in the prior fiscal year fourth quarter. Non-GAAP operating income was $161 million, or 13.3% of segment revenue, compared to $129 million, or 13.2% of segment revenue, in the prior fiscal year fourth quarter.
  • The trailing fiscal four quarters Return on Invested Capital ("ROIC") was 8.8% compared to 7.9% in the prior fiscal year fourth quarter. The adjusted trailing fiscal four quarters ROIC was 11.0%.

 



FY19



FY18(2)



Net change

Revenue ($M)


$

23,757



$

19,768



20.2%

Operating income ($M)


$

813.8



$

550.2



47.9%

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


$

1,095.7



$

719.7



52.2%

Operating margin



3.43

%



2.78

%


65 bps

Non-GAAP operating margin(1)



4.61

%



3.64

%


97 bps

Net income ($M)


$

500.7



$

300.0



66.9%

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


$

681.5



$

454.8



49.9%

Diluted earnings per common share ("EPS")


$

9.74



$

7.17



35.8%

Non-GAAP Diluted EPS(1)


$

13.26



$

10.87



22.0%

Fiscal 2019 Highlights:

  • Technology Solutions: Revenue was $19.1 billion, up 10.1% from the prior fiscal year. Operating income was $519 million, or 2.7% of segment revenue, compared to $405 million, or 2.3% of segment revenue, in the prior fiscal year. Non-GAAP operating income was $564 million, or 3.0% of segment revenue, in fiscal year 2019, compared to $463 million, or 2.7% of segment revenue, in the prior fiscal year.
  • Concentrix: Revenue was $4.7 billion, up 91.1% from the prior fiscal year primarily due to the full year impact of the Convergys acquisition on October 5, 2018. Operating income was $294 million, or 6.3% of segment revenue, compared to $145 million, or 5.9% of segment revenue, in the prior fiscal year. Non-GAAP operating income was $531 million, or 11.3% of segment revenue, in fiscal year 2018, compared to $257 million, or 10.4% of segment revenue, in the prior fiscal year.

First Quarter Fiscal 2020 Outlook:

The following statements are based on SYNNEX' current expectations for the fiscal 2020 first quarter. Non-GAAP financial measures exclude the impact of acquisition-related and integration expenses, the amortization of intangibles 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 $5.240 billion to $5.540 billion.
  • Net income is expected to be in the range of $114.7 million to $124.6 million and on a non-GAAP basis, net income is expected to be in the range of $157.3 million to $167.2 million.
  • Diluted earnings per share is expected to be in the range of $2.21 to $2.40 and on a non-GAAP basis, diluted earnings per share is expected to be in the range of $3.03 to $3.22, based on estimated outstanding diluted weighted average shares of 51.3 million.
  • After-tax amortization of intangibles is expected to be $36.2 million, or $0.70 per share.
  • After-tax acquisition-related and integration expense is expected to be $6.4 million, or $0.12 per share.

Dividend Announcement

SYNNEX announced today that its Board of Directors declared a quarterly cash dividend of $0.40 per common share, a 2.5-cent increase over the previous quarter's dividend. The dividend is payable on January 31, 2020 to stockholders of record as of the close of business on January 24, 2020.

Conference Call and Webcast

SYNNEX issued a separate news release today and announced plans to separate into two independent publicly traded companies: a top three Americas and Japan IT distribution company (SYNNEX Technology Solutions) and a top two global customer experience solutions company (Concentrix). SYNNEX will host a conference call for investors to discuss this transaction and to review its fiscal 2019 fourth quarter results at 2:00 p.m. (PT)/5:00 p.m. (ET) today.

Conference ID 9038089
Live call (866) 393-4306 or (763) 488-9145 (Int'l)

Live audio webcast of the earnings call will be accessible at http://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 business process services company, providing a comprehensive range of distribution, logistics and integration services for the technology industry and providing outsourced services focused on customer engagement to a broad range of enterprises.  SYNNEX distributes a broad range of information technology systems and products, and also provides systems design and integration solutions. 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.

About Concentrix

Concentrix, a wholly-owned subsidiary of SYNNEX Corporation (NYSE: SNX), is a technology-enabled global business services company specializing in customer engagement and improving business performance for some of the world's best brands. Every day, from more than 40 countries and across 6 continents, our staff delivers next generation customer experience and helps companies better connect with their customers. We create better business outcomes and help differentiate our clients through technology, design, data, process, and people. Concentrix provides services to clients in eight industry verticals: technology & consumer electronics; banking, financial services & insurance; healthcare; media & communications; retail & e-commerce; travel & transportation; automotive; and energy & public-sector. We are Different by Design. Visit concentrix.com to learn more.

(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, adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), non-GAAP net income, and non-GAAP diluted earnings per share, which are non-GAAP financial measures that exclude acquisition-related and integration expenses, restructuring costs, the amortization of intangible assets and the related tax effects thereon.

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 fiscal year 2018, non-GAAP net income and non-GAAP diluted earnings per share also exclude the impact of an adjustment relating to the enactment of the Tax Cuts and Jobs Act of 2017. This adjustment includes a transition tax on accumulated overseas profits and the remeasurement of deferred tax assets and liabilities to the new U.S. tax rate.

Additionally, 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 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, 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 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 acquisition-related and integration expenses, restructuring costs and the amortization of intangibles from both operating income and equity, the impact of the contingent consideration gain and a contingent gain, and the U.S. tax reform adjustment 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 a more conservative 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 information section at the end of this press release.

(2)Fiscal 2018 fourth quarter and year-to-date financial statements have been adjusted to reflect the adoption of the new guidance on revenue recognition, on a full retrospective basis. Impact of adoption of the new guidance on the Consolidated Statement of Operations is presented in the supplementary information section 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, including the separation transaction; the future performances of SYNNEX and Concentrix if the separation is completed; our expectations and outlook for the fiscal 2020 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, after-tax acquisition-related and integration expenses; 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 satisfaction of separation closing conditions; the ability to realize the anticipated benefits of the separation; disruption from the transaction making it more difficult to maintain business, contractual and operational relationships; the unfavorable outcome of any legal proceedings that have been or may be instituted against us, the ability to retain key personnel; negative effects of the transaction announcement or the consummation of the proposed separation on the market price of the capital stock of SYNNEX; 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; and other risks and uncertainties detailed in our Form 10-K for the fiscal year ended November 30, 2018 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 2020 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. DIFFERENT BY DESIGN is a trademark or registered trademark of Concentrix Corporation. Other names and marks are the property of their respective owners.

SYNNEX Corporation

Consolidated Balance Sheets

(currency and share amounts in thousands)

(Amounts may not add due to rounding)

(unaudited)




November 30, 2019



November 30, 2018

ASSETS






(Adjusted)(1)

Current assets:








Cash and cash equivalents


$

225,529



$

454,694

Accounts receivable, net



3,926,709




3,640,496

Receivable from vendors, net



368,505




351,744

Inventories



2,547,224




2,392,559

Other current assets



385,024




323,323

Total current assets



7,452,992




7,162,817

Property and equipment, net



569,899




571,326

Goodwill



2,254,402




2,203,316

Intangible assets, net



1,162,212




1,377,305

Deferred tax assets



97,539




76,508

Other assets



160,917




152,227

Total assets


$

11,697,960



$

11,543,498









LIABILITIES AND EQUITY








Current liabilities:








Borrowings, current


$

298,969



$

833,216

Accounts payable



3,149,443




3,048,102

Accrued compensation and benefits



402,771




358,352

Other accrued liabilities



723,716




672,635

Income taxes payable



32,223




41,322

Total current liabilities



4,607,122




4,953,627

Long-term borrowings



2,718,267




2,622,782

Other long-term liabilities



361,911




325,119

Deferred tax liabilities



222,210




206,916

Total liabilities



7,909,510




8,108,444

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, 53,154 and 52,861 shares issued as of November 30, 2019 and 2018, respectively



53




53

Additional paid-in capital



1,545,421




1,512,201

Treasury stock, 2,399 and 2,167 shares as of November 30, 2019 and 2018, respectively



(172,627)




(149,533)

Accumulated other comprehensive income (loss)



(209,077)




(126,288)

Retained earnings



2,624,680




2,198,621

Total stockholders' equity



3,788,450




3,435,054

Total liabilities and equity


$

11,697,960



$

11,543,498


(1) Amounts have been adjusted to reflect the adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), on a full retrospective basis. 

 

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,

2019



November 30,

2018



November 30,

2019



November 30,

2018







(Adjusted)(1)







(Adjusted)(1)

Revenue:
















Products


$

5,374,241



$

4,576,487



$

19,069,966



$

17,323,078

Services



1,207,052




967,559




4,687,327




2,444,867

Total revenue



6,581,293




5,544,046




23,757,293




19,767,945

Cost of revenue:
















Products



(5,036,301)




(4,302,465)




(17,912,711)




(16,326,576)

Services



(750,453)




(587,472)




(2,946,664)




(1,514,470)

Gross profit



794,539




654,110




2,897,917




1,926,899

Selling, general and administrative expenses



(526,251)




(453,215)




(2,084,156)




(1,376,664)

Operating income



268,288




200,895




813,761




550,236

Interest expense and finance charges, net



(38,726)




(30,791)




(166,421)




(84,675)

Other income (expense), net



10,599




(5,487)




30,363




(8,984)

Income before income taxes



240,161




164,617




677,703




456,577

Provision for income taxes



(64,160)




(49,415)




(176,991)




(156,596)

Net income


$

176,001



$

115,201



$

500,712



$

299,981

Earnings per common share:
















Basic


$

3.44



$

2.46



$

9.79



$

7.21

Diluted


$

3.41



$

2.45



$

9.74



$

7.17

Weighted-average common shares outstanding:
















Basic



50,693




46,429




50,669




41,215

Diluted



51,032




46,633




50,936




41,451


(1) Amounts have been adjusted to reflect the adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), on a full retrospective basis. 

 

SYNNEX Corporation

Segment Information

(currency in thousands)

(Amounts may not add due to rounding)

(unaudited)




Three Months Ended



Fiscal Year Ended



November 30,

2019



November 30,

2018



November 30,

2019



November 30,

2018







(Adjusted)(1)







(Adjusted)(1)

Revenue:
















Technology Solutions


$

5,374,241



$

4,576,491



$

19,069,970



$

17,323,163

Concentrix



1,212,836




972,286




4,707,912




2,463,151

Inter-segment elimination



(5,784)




(4,730)




(20,589)




(18,369)

Consolidated


$

6,581,293



$

5,544,046



$

23,757,293



$

19,767,945

















Operating income:
















Technology Solutions


$

166,834



$

125,549



$

519,429



$

405,474

Concentrix



101,454




75,346




294,332




144,761

Consolidated


$

268,288



$

200,895



$

813,761



$

550,236


(1) Amounts have been adjusted to reflect the adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), on a full retrospective basis. 


 

SYNNEX Corporation

Impact of adoption of Accounting Standards Codification ("ASC") Topic 606 on Revenue and Earnings

(currency in thousands, except per share amounts)

(Amounts may not add due to rounding)

(unaudited)




Three Months Ended



Fiscal Year Ended



November 30,

2019



November 30,

2018



November 30,

2019



November 30,

2018

Revenue
















Consolidated
















Revenue as previously reported






$

5,622,201







$

20,053,764

Impact of adoption of ASC Topic 606







(78,155)








(285,819)

Revenue in accordance with ASC Topic 606(1)


$

6,581,293



$

5,544,046



$

23,757,293



$

19,767,945

















Technology Solutions
















Revenue as previously reported






$

4,654,646







$

17,608,982

Impact of adoption of ASC Topic 606







(78,155)








(285,819)

Revenue in accordance with ASC Topic 606(1)


$

5,374,241



$

4,576,491



$

19,069,970



$

17,323,163

















Concentrix
















Revenue as previously reported






$

972,286







$

2,463,151

Impact of adoption of ASC Topic 606







—








—

Revenue in accordance with ASC Topic 606(1)


$

1,212,836



$

972,286



$

4,707,912



$

2,463,151

















(1)Approximate value of transactions offset, in accordance with revenue recognition guidance on Principal versus Agent considerations, in circumstances where SYNNEX assumed an agency relationship, against cost of sales to present the margin earned on these transactions in revenue, with no associated cost of revenue.


$

819,000



$

892,000



$

3,366,000



$

3,090,000

 

SYNNEX Corporation

Impact of adoption of Accounting Standards Codification ("ASC") Topic 606 on Revenue and Earnings

(currency in thousands, except per share amounts)

(Amounts may not add due to rounding)

(unaudited)

(continued)




Three Months Ended



Fiscal Year Ended




November 30, 2018



November 30, 2018


Consolidated Statements of Operations


As reported



As adjusted



As reported



As adjusted


Revenue:

















    Products


$

4,654,642



$

4,576,487



$

17,608,897



$

17,323,078


    Services



967,559




967,559




2,444,867




2,444,867


Total revenue



5,622,201




5,544,046




20,053,764




19,767,945


Cost of revenue:

















    Products



(4,383,245)




(4,302,465)




(16,611,595)




(16,326,576)


    Services



(587,472)




(587,472)




(1,514,470)




(1,514,470)


Gross profit



651,485




654,110




1,927,699




1,926,899


Selling, general and administrative expenses



(453,215)




(453,215)




(1,376,664)




(1,376,664)


Operating income



198,270




200,895




551,036




550,236


Interest expense and finance charges, net



(30,791)




(30,791)




(84,675)




(84,675)


Other income (expense), net



(5,487)




(5,487)




(8,984)




(8,984)


Income before income taxes



161,992




164,617




457,377




456,577


Provision for income taxes



(48,811)




(49,415)




(156,779)




(156,596)


Net income


$

113,180



$

115,201



$

300,598



$

299,981


Earnings per common share:

















    Basic


$

2.42



$

2.46



$

7.23



$

7.21


    Diluted


$

2.41



$

2.45



$

7.19



$

7.17


Non-GAAP financial measures

















Non-GAAP operating income


$

265,132



$

267,757



$

720,500



$

719,700


GAAP operating margin



3.53

%



3.62

%



2.75

%



2.78

%

Non-GAAP operating margin



4.72

%



4.83

%



3.59

%



3.64

%

Non-GAAP net income


$

171,522



$

173,586



$

455,428



$

454,794


Non-GAAP diluted EPS


$

3.65



$

3.69



$

10.89



$

10.87


 

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,

2019



November 30,

2018



November 30,

2019



November 30,

2018







(Adjusted)(1)







(Adjusted)(1)

Revenue in constant currency
















Consolidated
















Revenue


$

6,581,293



$

5,544,046



$

23,757,293



$

19,767,945

Foreign currency translation



16,349








143,530





Revenue in constant currency


$

6,597,642



$

5,544,046



$

23,900,823



$

19,767,945

















Technology Solutions
















Revenue


$

5,374,241



$

4,576,491



$

19,069,970



$

17,323,163

Foreign currency translation



5,666








89,786





Revenue in constant currency


$

5,379,907



$

4,576,491



$

19,159,756



$

17,323,163

















Concentrix
















Revenue


$

1,212,836



$

972,286



$

4,707,912



$

2,463,151

Foreign currency translation



10,683








53,744





Revenue in constant currency


$

1,223,519



$

972,286



$

4,761,656



$

2,463,151



































Three Months Ended



Fiscal Year Ended



November 30,

2019



November 30,

2018



November 30,

2019



November 30,

2018







(Adjusted)(1)







(Adjusted)(1)

Selling, general and administrative expenses
















Consolidated
















GAAP selling, general and administrative expenses


$

526,251



$

453,215



$

2,084,156



$

1,376,664

Acquisition-related and integration expenses



17,872




21,713




71,454




45,132

Amortization of intangibles



51,937




44,662




208,901




122,544

Adjusted selling, general and administrative expenses


$

456,442



$

386,840



$

1,803,801



$

1,208,988

















Technology Solutions
















GAAP selling, general and administrative expenses


$

171,105



$

148,476



$

637,830



$

591,106

Acquisition-related and integration expenses



-




1,293




981




7,642

Amortization of intangibles



10,907




12,205




43,875




50,007

Adjusted selling, general and administrative expenses


$

160,198



$

134,978



$

592,974



$

533,457

















Concentrix
















GAAP selling, general and administrative expenses


$

356,977



$

306,670



$

1,454,116



$

792,791

Acquisition-related and integration expenses



17,872




20,420




70,473




37,490

Amortization of intangibles



41,030




32,457




165,026




72,537

Adjusted selling, general and administrative expenses


$

298,075



$

253,793



$

1,218,617



$

682,764

    

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,

2019



November 30,

2018



November 30,

2019



November 30,

2018








(Adjusted)(1)







(Adjusted)(1)


Operating income and Operating margin

















Consolidated

















Revenue


$

6,581,293



$

5,544,046



$

23,757,293



$

19,767,945



















GAAP operating income


$

268,288



$

200,895



$

813,761



$

550,236


Acquisition-related and integration expenses



17,872




21,713




71,454




45,132


Amortization of intangibles



52,332




45,149




210,481




124,332


Non-GAAP operating income


$

338,492



$

267,757



$

1,095,696



$

719,700


Depreciation (excluding accelerated depreciation included in acquisition-related expenses above)



38,273




33,924




157,277




100,955


Adjusted EBITDA


$

376,765



$

301,681



$

1,252,973



$

820,655



















GAAP operating margin



4.08

%



3.62

%



3.43

%



2.78

%

Non-GAAP operating margin



5.14

%



4.83

%



4.61

%



3.64

%


















Technology Solutions

















Segment revenue


$

5,374,241



$

4,576,491



$

19,069,970



$

17,323,163



















GAAP operating income


$

166,834



$

125,549



$

519,429



$

405,474


Acquisition-related and integration expenses



—




1,293




981




7,642


Amortization of intangibles



10,907




12,205




43,875




50,007


Non-GAAP operating income


$

177,741



$

139,047



$

564,285



$

463,123


Depreciation



5,735




5,625




22,454




20,681


Adjusted EBITDA


$

183,476



$

144,672



$

586,739



$

483,804



















GAAP operating margin



3.10

%



2.74

%



2.72

%



2.34

%

Non-GAAP operating margin



3.31

%



3.04

%



2.96

%



2.67

%


















Concentrix

















Segment revenue


$

1,212,836



$

972,286



$

4,707,912



$

2,463,151



















GAAP operating income


$

101,454



$

75,346



$

294,332



$

144,761


Acquisition-related and integration expenses



17,872




20,420




70,473




37,490


Amortization of intangibles



41,425




32,944




166,606




74,325


Non-GAAP operating income


$

160,751



$

128,710



$

531,411



$

256,576


Depreciation (excluding accelerated depreciation included in acquisition-related expenses above)



32,538




28,299




134,823




80,274


Adjusted EBITDA


$

193,289



$

157,009



$

666,234



$

336,850



















GAAP operating margin



8.37

%



7.75

%



6.25

%



5.88

%

Non-GAAP operating margin



13.25

%



13.24

%



11.29

%



10.42

%

 

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,

2019



November 30,

2018



November 30,

2019



November 30,

2018







(Adjusted)(1)







(Adjusted)(1)

Net income
















Net income


$

176,001



$

115,201



$

500,712



$

299,981

Acquisition-related and integration expenses



17,872




21,713




71,283




42,498

Amortization of intangibles



52,332




45,149




210,481




124,332

Contingent consideration



—




—




(19,034)




—

Acquisition-related contingent gain



(11,112)




—




(11,112)




—

Income taxes related to the above(2)



(15,492)




(16,887)




(70,820)




(45,128)

U.S. tax reform adjustment



—




8,410




—




33,111

Non-GAAP net income


$

219,601



$

173,586



$

681,510



$

454,794

















Diluted earnings per common share ("EPS")(3)
















Net income


$

176,001



$

115,201



$

500,712



$

299,981

Less: net income allocated to participating securities



1,812




995




4,573




2,716

Net income attributable to common stockholders



174,189




114,206




496,139




297,265

Acquisition-related and integration expenses attributable to common stockholders



17,680




21,515




70,623




42,106

Amortization of intangibles attributable to common stockholders



51,771




44,737




208,531




123,186

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(2)



(15,326)




(16,733)




(70,164)




(44,712)

U.S. tax reform adjustment attributable to common stockholders



—




8,333




—




32,806

Non-GAAP net income attributable to common stockholders


$

217,322



$

172,058



$

675,262



$

450,651

















Weighted-average number of common shares - diluted:



51,032




46,633




50,936




41,451

















Diluted EPS(3)


$

3.41



$

2.45



$

9.74



$

7.17

Acquisition-related and integration expenses



0.35




0.46




1.39




1.02

Amortization of intangibles



1.01




0.96




4.09




2.97

Contingent consideration



—




—




(0.37)




—

Acquisition-related contingent gain



(0.22)




—




(0.22)




—

Income taxes related to the above(2)



(0.30)




(0.36)




(1.38)




(1.08)

U.S. tax reform adjustment



—




0.18




—




0.79

Non-GAAP Diluted EPS


$

4.26



$

3.69



$

13.26



$

10.87

 

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,

2019



November 30,

2018



November 30,

2019



November 30,

2018

Net cash provided by operating activities


$

349,280



$

141,092



$

549,918



$

100,706

Purchases of property and equipment



(45,825)




(49,832)




(137,423)




(125,305)

Free cash flow


$

303,455



$

91,260



$

412,495



$

(24,599)

 



Forecast



Three Months Ending February 29, 2020

(Amounts in millions, except per share amounts)


Low



High

Net income


$

114.7



$

124.6

Acquisition-related and integration expenses



8.3




8.3

Amortization of intangibles



47.0




47.0

Income taxes related to the above(2)



(12.7)




(12.7)

Non-GAAP net income


$

157.3



$

167.2









Diluted EPS(3)


$

2.21



$

2.40

Acquisition-related and integration expenses



0.16




0.16

Amortization of intangibles



0.91




0.91

Income taxes related to the above(2)



(0.25)




(0.25)

Non-GAAP Diluted EPS


$

3.03



$

3.22









(1) Adjusted to reflect the adoption of the new guidance on revenue recognition, on a full retrospective basis.


(2) The tax effect of taxable and deductible non-GAAP adjustments was calculated using the effective year-to-date tax rate during the respective periods. The effective tax rate for fiscal year 2018 excludes the impact of the transition tax on accumulated overseas profits and the remeasurement of deferred tax assets and liabilities to the new U.S. tax rate related to the enactment of the Tax Cuts and Jobs Act of 2017.


(3) 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% and 0.9% of Net income for the three months ended November 30, 2019 and 2018, respectively.  Net income allocated to participating securities was approximately 0.9% of Net income for both the years ended November 30, 2019 and 2018. Net income allocable to participating securities is estimated to be approximately 1.2% of the forecast Net income for the three months ending February 29, 2020.

 

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, 2019



November 30, 2018








(Adjusted)(1)


ROIC









Operating income (trailing fiscal four quarters)(1)


$

813,761



$

550,236


Income taxes on operating income(2)



(211,985)




(188,731)


Operating income after taxes(1)


$

601,776



$

361,505











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


$

3,364,846



$

2,164,694


Total equity (last five quarters average)



3,574,562




2,536,835


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



(66,036)




(134,377)


Total invested capital


$

6,873,372



$

4,567,152











ROIC



8.8

%



7.9

%










Adjusted ROIC









Non-GAAP operating income (trailing fiscal four quarters)(1)


$

1,095,696



$

719,700


Income taxes on Non-GAAP operating income(2)



(288,168)




(194,679)


Non-GAAP operating income after taxes(1)


$

807,528



$

525,021











Total invested capital


$

6,873,372



$

4,567,152


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



487,301




314,248


Total Non-GAAP invested capital


$

7,360,673



$

4,881,400











Adjusted ROIC



11.0

%



10.8

%


(1) Adjusted to reflect the adoption of the new guidance on revenue recognition, on a full retrospective basis.


(2) 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. In fiscal year 2018, the effective tax rate for non-GAAP operating income excludes the impact of the transition tax on accumulated overseas profits and the remeasurement of deferred tax assets and liabilities to the new U.S. tax rate related to the enactment of the Tax Cuts and Jobs Act of 2017.

 

Debt to Adjusted EBITDA leverage ratio






November 30, 2019



November 30, 2018

Total borrowings, excluding book overdraft


(a)


$

3,014,152



$

3,451,006

Trailing fiscal four quarters Adjusted EBITDA(1)


(b)


$

1,252,973



$

820,655

Debt to Adjusted EBITDA leverage ratio


(c)=(a)/(b)



2.4




4.2


(1) Adjusted EBITDA for all fiscal quarters in 2019 and 2018 included in the trailing fiscal four quarters calculation reflects the adoption of ASC Topic 606.

 

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, 2019



November 30, 2018









(Adjusted)(1)

Days sales outstanding










Revenue (products and services)


(a)


$

6,581,293



$

5,544,046

Accounts receivable, net


(b)



3,926,709




3,640,496

Days sales outstanding


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



54




60











Days inventory outstanding










Cost of revenue (products and services)


(d)


$

5,786,754



$

4,889,937

Inventories


(e)



2,547,224




2,392,559

Days inventory outstanding


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



40




45











Days payable outstanding










Cost of revenue (products and services)


(g)


$

5,786,754



$

4,889,937

Accounts payable


(h)



3,149,443




3,048,102

Days payable outstanding


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



50




57











Cash conversion cycle


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



44




48


(1) Adjusted to reflect the adoption of the new guidance on revenue recognition, on a full retrospective basis.

Investor Contact:
Mary Lai
Investor Relations
SYNNEX Corporation
marylai@synnex.com
(510) 668-8436

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SOURCE SYNNEX Corporation


Source: SYNNEX Corporation