SYNNEX Corporation Reports Fiscal 2014 Third Quarter Results
October 2, 2014
Exceptional Performance Drives Record Results
FREMONT, CA – SYNNEX Corporation (NYSE: SNX), a leading business process services company, announced financial results for the fiscal third quarter ended August 31, 2014.
| Q3 FY14 | Q3 FY13 | Net change | |||||
| Revenue ($M) | $3,535 | $2,734 | 29.3% | ||||
| Operating income ($M) | $78.8 | $63.5 | 24.1% | ||||
| Non-GAAP operating income ($M) | $106.3 | $68.1 | 56.1% | ||||
| Operating margin | 2.23% | 2.32% | (9 bps) | ||||
| Non-GAAP operating margin | 3.01% | 2.49% | 52 bps | ||||
| Net income attributable to SYNNEX Corporation ($M)(1) | $45.0 | $46.6 | -3.5% | ||||
| Non-GAAP net income attributable to SYNNEX Corporation ($M) (2) | $62.5 | $50.0 | 25.1% | ||||
| Diluted EPS | $1.15 | $0.19 | 505.3% | ||||
| Non-GAAP Diluted EPS(2)(3) | $1.59 | $1.33 | 19.5% | ||||
| (1) Q3 FY13 “Other income, net” includes a $12.3M pre-tax benefit from a class-action legal settlement. |
| (2) Non-GAAP financial measures exclude the impact of acquisition and 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. |
| (3) Q3 FY13 non-GAAP Diluted EPS excludes one-time numerator adjustment resulting in $1.05 dilution for convertible senior notes settlement. |
“We are pleased to report record quarterly results in terms of both revenues and non-GAAP net income,” stated Kevin Murai, President and Chief Executive Officer. “Stronger than anticipated revenue growth in Technology Solutions and excellent performance in all aspects of Concentrix led to results ahead of our expectations.”
Fiscal 2014 Third Quarter Highlights:
- Technology Solutions: Revenue was $3.2 billion, up 19.12% organically from the prior fiscal year quarter. Technology Solutions income before non-operating items, income taxes and non-controlling interest was $76.9 million, or 2.40% of segment revenue, compared with $62.5 million, or 2.32% of segment revenue, in the fiscal third quarter of 2013.
- Concentrix: Revenue was $333.8 million, up from $46.3 million in the prior fiscal year quarter, due largely to our having completed over 99% of our acquisition of the IBM CRM business during the first half of 2014. Concentrix’ income before non-operating items, income taxes and non-controlling interest was $1.7 million, or 0.52% of Concentrix revenue, compared with income of $0.8 million, or 1.78% of Concentrix revenue, in the prior fiscal year quarter. Non-GAAP Concentrix income before non-operating items, income taxes and non-controlling interest was $28.3 million, or 8.49% of Concentrix revenue, for fiscal third quarter of 2014, compared to $4.4 million, or 9.55% of Concentrix revenue, in the prior year period.
- The trailing fiscal four quarter ROIC was 8.2% compared to 9.7% in the prior year fiscal third quarter. Excluding the impact of acquisition and integration expenses, the current fiscal quarter’s trailing ROIC was 10.6%.
- The debt to capitalization ratio was 38%, consistent with the second fiscal quarter of 2014.
- Depreciation and amortization were $10.2 million and $17.6 million, respectively.
Fiscal 2014 Fourth Quarter Outlook:
The following statements are based on the Company’s current expectations for the fiscal 2014 fourth quarter and do not include acquisition and 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 $3.65 billion to $3.75 billion.
- Non-GAAP net income is expected to be in the range of $65.9 million to $67.9 million.
- Non-GAAP diluted earnings per share are expected to be in the range of $1.66 to $1.71
- After-tax amortization of intangibles is expected to be $11 million, or $0.28 per share. These estimates are based on the preliminary purchase price allocation of the IBM CRM acquisition and are subject to change.
“Our fourth quarter guidance reflects seasonally strong, healthy year-on-year growth in Technology Solutions and continued strong performance in Concentrix,” stated Kevin Murai, President and CEO of SYNNEX Corporation.
About SYNNEX
SYNNEX Corporation (NYSE: SNX), a Fortune 500 corporation, is a leading business process services company, optimizing supply chains and providing customer care solutions for its clients. The Company distributes a broad range of information technology systems and products, and also provides systems design and integration services. The Concentrix segment offers a portfolio of end-to-end outsourced services around process optimization, customer engagement strategy and back-office automation to clients in ten identified industry verticals. Founded in 1980, SYNNEX has over 50,000 employees worldwide. Additional information about SYNNEX may be found online at www.synnex.com.
