UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 10, 2012

 

 

SYNNEX CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-31892   94-2703333

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification Number)

 

44201 Nobel Drive

Fremont, California

  94538
(Address of principal executive offices)   (Zip Code)

(510) 656-3333

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

 

 

 

Item 2.02. Results of Operations and Financial Condition

The information in this Current Report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On January 10, 2012, SYNNEX Corporation (“SYNNEX”) issued a press release regarding SYNNEX’ financial results for its fiscal fourth quarter and year ended November 30, 2011. The full text of SYNNEX’s press release is furnished herewith as Exhibit 99.1.

 

Item 8.01. Other Events

SYNNEX has established record and meeting dates for its 2012 Annual Meeting of Stockholders. SYNNEX stockholders of record at the close of business on February 8, 2012, will be entitled to notice of the meeting and to vote upon matters considered at the meeting. The meeting will be held in Fremont, California at SYNNEX’ headquarters located at 44201 Nobel Drive, beginning at 10:00 a.m. PT on March 20, 2012.

A stockholder proposal not included in the proxy statement for SYNNEX’ 2012 Annual Meeting will be ineligible for presentation at the meeting unless the stockholder gives timely notice of the proposal in writing to SYNNEX’ Corporate Secretary at its headquarters and otherwise complies with the provisions of SYNNEX’ Bylaws. To be timely, SYNNEX’ Bylaws provide that SYNNEX must have received the stockholder’s notice not less than 50 days nor more than 75 days prior to the scheduled date of such meeting. However, if notice or prior public disclosure of the date of the annual meeting is given or made to stockholders less than 65 days prior to the meeting date, SYNNEX must receive the stockholder’s notice by the earlier of (i) the close of business on the 15th day after the earlier of the day SYNNEX mailed notice of the annual meeting date or provided such public disclosure of the meeting date and (ii) two days prior to the scheduled date of the annual meeting. For SYNNEX’ 2012 Annual Meeting of Stockholders, stockholders must submit written notice to the Corporate Secretary in accordance with the foregoing Bylaw provisions no later than the close of business on January 30, 2012.

 

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

 

Exhibit No.

  

Description

99.1    Press Release dated January 10, 2012.

 

-2-

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: January 10, 2012

 

SYNNEX CORPORATION
By:   /s/ Simon Y. Leung
  Simon Y. Leung
  Senior Vice President, General Counsel and
  Corporate Secretary

 

-3-

EXHIBIT INDEX

 

Exhibit No.

  

Description

99.1    Press Release dated January 10, 2012.

 

-4-

Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE

Contact Info :

Lori Barker

Sr. Director, Investor Relations

SYNNEX Corporation

(510) 668-3715

lorib@synnex.com

SYNNEX Corporation Reports Fiscal 2011 Fourth Quarter and Year-End Results

Year of Strategic Focus on High-Margin Value Added Offerings and Services Culminates with Record Fourth Quarter Performance

Fremont, Calif., - January 10, 2012 - SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal fourth quarter and year ended November 30, 2011.

 

     Q4 FY11     Q4 FY10     Net
Change 		 

Revenue ($M)

   $ 2,841      $ 2,468        15.1 % 

Operating income ($M)

   $ 84.7      $ 64.6        31.1 % 

Operating margin

     2.98 %      2.62 %      36 bp  

Net income attributable to SYNNEX Corporation ($M)

   $ 50.2      $ 37.5        33.7 % 

Diluted EPS

   $ 1.37      $ 1.04        31.7 % 

“I am very proud of the SYNNEX team for once again delivering excellent results. The fourth quarter was an outstanding finish to a strong year where SYNNEX again grew revenues and profits in excess of industry growth rates even while making substantial investments in new high-growth and high-margin businesses,” stated Kevin Murai, President and Chief Executive Officer. “We continue to focus on efficiency and leverage in our core business, further expansion into high growth adjacent markets and creating value-added service offerings - all focused on increasing shareholder value.”

Fiscal 2011 Fourth Quarter Highlights:

 

  •  

Distribution:  Revenue from continuing operations was $2.80 billion, an increase of 14.6% over the prior fiscal year fourth quarter. The acquisition on December 1, 2010 of SYNNEX Infotec Corporation in Japan added $304.9 million to the fiscal 2011 fourth quarter revenue. Distribution income from continuing operations before non-operating items, income taxes and noncontrolling interest was $81.1 million, or 2.89% of distribution revenue compared with $63.1 million, or 2.58% in the prior fiscal year quarter. Operating margin growth resulted from continued success of key strategies, transition of certain customer business to a higher margin fee for service relationship and supply-demand dynamics of certain constrained products.

  •  

Global Business Services (GBS):  Revenue from continuing operations was $44.9 million, an increase of 62.1% over the prior fiscal year fourth quarter. GBS income from continuing operations before non-operating items, income taxes and noncontrolling interest was $3.6 million, or 8.11% of GBS revenue compared with $1.5 million, or 5.43% in the prior fiscal year quarter.

 

  •  

The trailing fiscal four quarters ROIC increased to 11.1% for the fiscal fourth quarter of 2011, up from 10.3% in the prior fiscal year quarter.

 

  •  

The cash conversion cycle was 39 days, an improvement of 3 days from the prior fiscal year quarter.

 

  •  

The debt to capitalization ratio was 25%.

 

  •  

Depreciation and amortization were $5.1 million and $2.0 million, respectively.

Fiscal Year 2011 Highlights:

 

     FY11     FY10     Net
Change 		 

Revenue ($M)

   $ 10,410      $ 8,614        20.8 % 

Operating income ($M)

   $ 256.2      $ 199.2        28.7 % 

Operating margin (1 )

     2.46 %      2.31 %      15 bp  

Net income attributable to SYNNEX Corporation ($M) (1 )

   $ 150.3      $ 116.5        29.0 % 

Diluted EPS (1 )

   $ 4.08      $ 3.26        25.2 % 

 

1. From continuing operations before gain on sale of discontinued operations, net of tax. FY 2011 includes a $5.4 million credit adjustment to contingent M&A consideration.

 

  •  

Distribution:  Revenue from continuing operations was $10.27 billion, an increase of 20.5% over the prior fiscal year. The acquisition on December 1, 2010 of SYNNEX Infotec Corporation in Japan added $1.22 billion to fiscal 2011. Distribution income from continuing operations before non-operating items, income taxes and noncontrolling interest was $237.3 million, or 2.31% of distribution revenue compared with $187.5 million, or 2.20% in the prior fiscal year.

 

  •  

Global Business Services (GBS):  Revenue from continuing operations was $163.4 million, an increase of 45.4% over the prior fiscal year. GBS income from continuing operations before non-operating items, income taxes and noncontrolling interest was $18.9 million, or 11.57% of GBS revenue compared with $11.7 million, or 10.39% in the prior fiscal year.

 

  •  

Depreciation and amortization were $17.1 million and $7.6 million, respectively.

Fiscal 2012 First Quarter Outlook:

The following statements are based on the Company’s current expectations for the first quarter of fiscal 2012. These statements are forward-looking and actual results may differ materially.

 

  •  

Revenue is expected to be in the range of $2.48 billion to $2.58 billion.

 

  •  

Net income is expected to be in the range of $33.1 million to $34.3 million.

 

  •  

Diluted earnings per share are expected to be in the range of $0.89 to $0.93.

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 can be accessed by dialing 866-364-4389 in North America or 706-902-0319 outside North America. The confirmation code for the call is 37624794. A replay of the conference call will be available at http://ir.synnex.com approximately two hours after the conference call has concluded.

About SYNNEX

SYNNEX Corporation (NYSE: 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 over 10,000 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 our business strategy, demand environment, growth in profitability, growth in various business segments, and our revenue, 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; decrease in demand as a result of the events in Japan; market acceptance and product life of the platforms sold by companies recently acquired; 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 market share; variations in supplier-sponsored programs; 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 August 31, 2011 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 2012 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.

SNX-F

SYNNEX Corporation

Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     November 30,
2011 		     November 30,
2010 		 

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 67,571       $ 88,038   

Short-term investments

     16,017         11,419   

Accounts receivable, net

     1,142,942         986,917   

Receivable from vendors, net

     150,085         132,409   

Receivable from affiliates

     1,344         5,080   

Inventories

     975,047         912,237   

Current deferred tax assets

     28,241         33,063   

Other current assets

     57,168         40,030   
  

 

 

    

 

 

 

Total current assets

     2,438,415         2,209,193   

Property and equipment, net

     125,157         91,995   

Goodwill

     185,312         139,580   

Intangible assets, net

     37,539         28,271   

Deferred tax assets

     590         605   

Other assets

     46,282         30,217   
  

 

 

    

 

 

 

Total assets

   $ 2,833,295       $ 2,499,861   
  

 

 

    

 

 

 

Liabilities and equity

     

Current liabilities:

     

Borrowings under securitization, term loans and lines of credit

   $ 159,200       $ 245,973   

Accounts payable

     1,035,691         896,401   

Payable to affiliates

     —           3,195   

Accrued liabilities

     172,226         166,861   

Income taxes payable

     5,136         1,578   
  

 

 

    

 

 

 

Total current liabilities

     1,372,253         1,314,008   

Long-term borrowings

     87,659         9,044   

Convertible debt

     136,163         131,289   

Long-term liabilities

     60,676         49,431   

Deferred tax liabilities

     8,086         3,262   
  

 

 

    

 

 

 

Total liabilities

     1,664,837         1,507,034   
  

 

 

    

 

 

 

SYNNEX Corporation’s stockholders’ equity:

     

Preferred stock

     —           —     

Common stock

     36         36   

Additional paid-in capital

     298,793         285,406   

Accumulated other comprehensive income

     30,026         28,035   

Retained earnings

     829,524         679,193   
  

 

 

    

 

 

 

Total SYNNEX Corporation stockholders’ equity

     1,158,379         992,670   

Noncontrolling interest

     10,079         157   
  

 

 

    

 

 

 

Total equity

     1,168,458         992,827   
  

 

 

    

 

 

 

Total liabilities and equity

   $ 2,833,295       $ 2,499,861   
  

 

 

    

 

 

 

SYNNEX Corporation

Consolidated Statements of Operations

(in thousands, except for per share amounts)

(unaudited)

 

     Three Months Ended
November 30, 2011 		    Three Months Ended
November 30, 2010 		    Fiscal Year Ended
November 30, 2011 		    Fiscal Year Ended
November 30, 2010 		 

Revenue

   $ 2,840,971      $ 2,468,225      $ 10,409,840      $ 8,614,141   

Cost of revenue

     (2,653,130 )      (2,327,306 )      (9,779,342 )      (8,122,525 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     187,841        140,919        630,498        491,616   

Selling, general and administrative expenses

     (103,144 )      (76,310 )      (374,270 )      (292,466 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before non- operating items, income taxes and noncontrolling interest

     84,697        64,609        256,228        199,150   

Interest expense and finance charges, net

     (6,595 )      (4,984 )      (25,505 )      (17,114 ) 

Other income (expense), net

     (936 )      780        (1,005 )      1,550   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes and noncontrolling interest

     77,166        60,405        229,718        183,586   

Provision for income taxes

     (26,964 )      (22,873 )      (79,165 )      (66,910 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before noncontrolling interest, net of tax

     50,202        37,532        150,553        116,676   

Income from discontinued operations, net of tax

     —          —          —          75   

Gain on sale of discontinued operations, net of tax

     —          —          —          11,351   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     50,202        37,532        150,553        128,102   

Net income attributable to noncontrolling interest

     (29 )      (1 )      (222 )      (154 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to SYNNEX Corporation

   $ 50,173      $ 37,531      $ 150,331      $ 127,948   
  

 

 

   

 

 

   

 

 

   

 

 

 

Amounts attributable to SYNNEX Corporation:

        

Income from continuing operations, net of tax

   $ 50,173      $ 37,531      $ 150,331      $ 116,538   

Discontinued operations:

        

Income from discontinued operations, net of tax

     —          —          —          59   

Gain on sale of discontinued operations, net of tax

     —          —          —          11,351   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to SYNNEX Corporation

   $ 50,173      $ 37,531      $ 150,331      $ 127,948   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share attributable to SYNNEX Corporation:

        

Basic :

        

Income from continuing operations

   $ 1.39      $ 1.06      $ 4.20      $ 3.35   

Discontinued operations

     —          —          —          0.33   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share - basic

   $ 1.39      $ 1.06      $ 4.20      $ 3.68   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted :

        

Income from continuing operations

   $ 1.37      $ 1.04      $ 4.08      $ 3.26   

Discontinued operations

     —          —          —          0.32   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share - diluted

   $ 1.37      $ 1.04      $ 4.08      $ 3.58   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted - average common shares outstanding - basic

     36,142        35,351        35,830        34,737   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted - average common shares outstanding - diluted

     36,675        36,149        36,833        35,757