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): September 25, 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 September 25, 2012, SYNNEX Corporation (“SYNNEX”) issued a press release regarding SYNNEX’ financial results for its fiscal third quarter ended August 31, 2012. The full text of SYNNEX’ press release is furnished herewith as Exhibit 99.1.
 
Item 9.01.
Financial Statements and Exhibits
(d) Exhibits

Exhibit No.          Description

99.1          Press Release dated September 25, 2012.


 


1


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: September 25, 2012
 
 
 
 
SYNNEX CORPORATION
 
 
By:
 
/s/ Simon Y. Leung
 
 
Simon Y. Leung
Senior Vice President, General Counsel and
Corporate Secretary


2


EXHIBIT INDEX

Exhibit No.          Description

99.1          Press Release dated September 25, 2012.



3

Exhibit 99.1
FOR IMMEDIATE RELEASE

Contact Info :                             
Lori Barker
Investor Relations
SYNNEX Corporation
(510) 668-3715
lorib@synnex.com

SYNNEX Corporation Reports Fiscal 2012 Third Quarter Results
Solid Performance , Distribution Market Share Gains and GBS New Contract Growth

Fremont, Calif., - September 25, 2012 - SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal third quarter ended August 31, 2012.
 
Q3 FY12 (1)

Q3 FY11

Net Change

Revenue ($M)  

$2,577


$2,572

0.2
 %
Operating income ($M) (2)(3)

$57.1


$66.5

-14.2
 %
Operating margin
2.21
%
2.59
%
-38 bp 

Net income attributable to SYNNEX Corporation ($M)

$35.1


$39.0

-10.0
 %
Diluted EPS

$0.93


$1.07

-13.1
 %

1.
The fiscal 2012 third quarter results include the transition of certain customer gross revenue business to a fee for service logistics relationship resulting in a decline in the reported revenue.
2.
The fiscal 2012 third quarter operating income includes a $0.7 million credit adjustment to contingent M&A consideration.
3.
The fiscal 2011 third quarter operating income includes a $4.1 million credit adjustment to contingent M&A consideration.
“I am pleased with our third quarter results, highlighted by strong profitability and share gains in our Distribution segment, and solid progress in our Global Business Services (GBS) segment,” stated Kevin Murai, President and Chief Executive Officer.

Fiscal 2012 Third Quarter Highlights:
•
Distribution:  Revenue was $2.54 billion, essentially flat with the prior fiscal year quarter.  Distribution income before non-operating items, income taxes and non-controlling interest was $52.6 million, or 2.08% of distribution revenue compared with $58.6 million, or 2.31% in the prior fiscal year quarter. Fiscal 2012 third quarter results include certain customer business which transitioned year-over-year from a gross revenue business to a net fee for service logistics relationship.
•
Global Business Services (GBS):  Revenue grew to $49.7 million, an increase of 22.8% over the prior fiscal year quarter. GBS income before non-operating items, income taxes and non-controlling


interest was $4.6 million, or 9.21% of GBS revenue compared with $7.9 million, or 19.58% in the prior fiscal year quarter. The fiscal 2012 third quarter SG&A included a $0.7 million adjustment for contingent M&A consideration compared with $4.1 million in the prior fiscal year quarter.
•
The trailing fiscal four quarters ROIC increased to 11.1% for the fiscal third quarter of 2012, up from 10.5% in the prior year fiscal third quarter. 
•
The cash conversion cycle declined to 41 days compared to 45 days in the prior fiscal year quarter.
•
The debt to capitalization ratio was 19%.
•
Depreciation and amortization were $4.2 and $2.1 million, respectively.

Fiscal 2012 Fourth Quarter Outlook:
The following statements are based on the Company's current expectations for the fiscal 2012 fourth quarter. These statements are forward-looking and actual results may differ materially.
“Our guidance reflects continued strong performance and market share gains in a somewhat more challenging demand environment,” Mr. Murai continued. “We are projecting that consumer demand will remain soft, and commercial demand will be relatively stable resulting in less than normal seasonal demand.”

•
Revenue is expected to be in the range of $2.71 billion to $2.81 billion.
•
Net income is expected to be in the range of $38.4 million to $40.0 million. 
•
Diluted earnings per share are expected to be in the range of $1.02 to $1.06.
The prior year fourth quarter was impacted by several items. Reported revenue was net of certain customer business which had partially transitioned from a gross revenue business to a net fee for service logistics relationship. This transition was completed during fiscal 2012 and will result in lower reported revenue in the fourth quarter of fiscal 2012.  Also, the fiscal 2011 fourth quarter included a very significant gross margin benefit resulting from shortages of hard disk drives.

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 (800) 857-9687 in North America or (630) 395-0222 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.

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 the demand environment, growth in profitability, our growth and performance, transition of customers from gross revenue to net fee for service, and our revenue, 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; 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 May 31, 2012 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
(currency in thousands)
(unaudited)
 
August 31,
2012
 
November 30,
2011
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
172,992

 
$
67,571

Short-term investments
15,353

 
16,017

Accounts receivable, net
1,172,890

 
1,293,027

Receivable from affiliates
474

 
1,344

Inventories
900,954

 
975,047

Current deferred tax assets
28,390

 
28,241

Other current assets
58,087

 
57,168

Total current assets
2,349,140

 
2,438,415

Property and equipment, net
124,375

 
125,157

Goodwill
184,015

 
185,312

Intangible assets, net
31,458

 
37,539

Deferred tax assets
603

 
590

Other assets
42,230

 
46,282

Total assets
$
2,731,821

 
$
2,833,295

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Borrowings under securitization, term loans and lines of credit
$
75,154

 
$
159,200

Convertible debt
140,083

 
—

Accounts payable
908,750

 
1,035,691

Accrued liabilities
157,221

 
172,226

Income taxes payable
3,059

 
5,136

Total current liabilities
1,284,267

 
1,372,253

Long-term borrowings
85,346

 
87,659

Convertible debt
—

 
136,163

Long-term liabilities
60,344

 
60,676

Deferred tax liabilities
7,486

 
8,086

Total liabilities
1,437,443

 
1,664,837

SYNNEX Corporation stockholders’ equity:
 
 
 
Preferred stock
—

 
—

Common stock
37

 
37

Additional paid-in capital
325,785

 
310,316

Treasury stock
(11,819
)
 
(11,524
)
Accumulated other comprehensive income
36,313

 
30,026

Retained earnings
937,260

 
829,524

Total SYNNEX Corporation stockholders’ equity
1,287,576

 
1,158,379

Noncontrolling interest
6,802

 
10,079

Total equity
1,294,378

 
1,168,458

Total liabilities and equity
$
2,731,821

 
$
2,833,295



SYNNEX Corporation
Consolidated Statements of Operations
(currency and share amounts in thousands, except for per share amounts)
(unaudited)
 
Three Months Ended
 
Nine Months Ended
 
August 31, 2012
 
August 31, 2011
 
August 31, 2012
 
August 31, 2011
Revenue
$
2,576,948

 
$
2,572,133

 
$
7,520,441

 
$
7,568,869

Cost of revenue
(2,425,019
)
 
(2,418,380
)
 
(7,042,804
)
 
(7,126,212
)
Gross profit
151,929

 
153,753

 
477,637

 
442,657

Selling, general and administrative expenses
(94,878
)
 
(87,235
)
 
(297,277
)
 
(271,126
)
Income before nonoperating items, income taxes and noncontrolling interest
57,051

 
66,518

 
180,360

 
171,531

Interest expense and finance charges, net
(5,809
)
 
(6,472
)
 
(17,363
)
 
(18,910
)
Other income (expense), net
890

 
(1,214
)
 
2,607

 
(69
)
Income before income taxes and noncontrolling interest
52,132

 
58,832

 
165,604

 
152,552

Provision for income taxes
(17,306
)
 
(19,662
)
 
(56,794
)
 
(52,200
)
Net income
34,826

 
39,170

 
108,810

 
100,352

Net income attributable to noncontrolling interest
313

 
(134
)
 
(1,074
)
 
(194
)
Net income attributable to SYNNEX Corporation
$
35,139

 
$
39,036

 
$
107,736

 
$
100,158

Net income per share attributable to SYNNEX Corporation:
 
 
 
 
 
 
 
Basic
$
0.96

 
$
1.09

 
$
2.95

 
$
2.80

Diluted
$
0.93

 
$
1.07

 
$
2.84

 
$
2.72

Weighted-average common shares outstanding:
 
 
 
 
 
 
 
Basic
36,700

 
35,882

 
36,537

 
35,726

Diluted
37,917

 
36,594

 
37,966

 
36,886