SYNNEX Corporation Reports Fiscal 2008 First Quarter

SYNNEX Corporation (NYSE:SNX), a leading business process services company, today announced financial results for the fiscal first quarter ended February 29, 2008. For the first quarter of fiscal 2008, revenues were $1.75 billion, compared to $1.59 billion for the quarter ended February 28, 2007, representing a 10% increase over the prior year quarter. These results were in line with analysts’ consensus and within the Company’s guidance of $1.73 billion to $1.78 billion. Net income for the first quarter of fiscal 2008 was $16.8 million, or $0.51 per diluted share, compared with $13.9 million, or $0.43 per diluted share in the prior year quarter, representing a 21% increase in net income over the prior year quarter. These results were above analysts’ consensus and at the high end of the Company’s guidance of $0.49 to $0.51. The first quarter for fiscal 2008 marks the 83rd consecutive profitable quarter for SYNNEX. "Our first quarter results demonstrate our focused commitment and attention on increasing the profitability of our business,” stated Robert T. Huang, President and Chief Executive Officer. "I am very pleased with our ability to grow profitably as we continue to invest in meaningful opportunities to expand our business offerings and leverage our efficient infrastructure.” First Quarter Fiscal 2008 Financial Highlights: Gross margin expanded to 5.48%, an increase of approximately 79 basis points, compared to the first quarter of fiscal 2007 and a 13 basis point increase from the fourth quarter of fiscal 2007. Income from operations was $32.8 million, or 1.87% of revenues, versus $24.9 million, or 1.57% of revenues in the prior year first quarter. Depreciation and amortization were $2.6 million and $1.8 million, respectively. Capital expenditures were $3.9 million. Borrowings under the Company’s Canadian off-balance sheet accounts receivable securitization program totaled approximately $85.2 million as of February 29, 2008. This compares to $115.9 million as of November 30, 2007. Second Quarter Fiscal 2008 Outlook: The following statements are based on the Company’s current expectations for the second quarter of fiscal 2008 and are independent of the Company’s pending acquisition of New Age Electronics, Inc. These statements are forward-looking and actual results may differ materially. Revenues are expected to be in the range of $1.715 billion to $1.785 billion. Net income is expected to be in the range of $16.6 million to $17.2 million. Diluted earnings per share are expected to be in the range of $0.50 to $0.52. The calculation of diluted earnings per share for the second quarter of fiscal 2008 is based on an approximate diluted weighted-average share count of approximately 33.2 million. "Our outlook for the second quarter reflects our current visibility into the marketplace, our continued focus on growing operating income and the overall diversification of our business model,” Huang continued. "We reiterate our commitment to our stated goal of growing our annual earnings per share in excess of 15% year-over-year. We believe that we can achieve these goals in the current economic environment, through a combination of continued execution, realization of the full impact of our recent acquisitions and continued improvements in efficiency and productivity.” 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 866-835-8893 in North America or 703-639-1409 outside North America. The confirmation code for the call is 1211676. A replay of the conference call will be available at http://ir.synnex.com approximately two hours after the conference call has concluded and will be archived until April 3, 2008. About SYNNEX SYNNEX Corporation, a Fortune 500 corporation, is a leading business process services company, servicing resellers 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 6,000 employees worldwide and operates in the United States, Canada, China, Mexico, the Philippines and the United Kingdom. Additional information about SYNNEX may be found online at www.synnex.com. 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, plan, anticipate, could and should and the negative of these terms or other similar expressions. These statements, including statements regarding our focus on growing operating income and diversification of our business model, expectations of growth in earning per share, expectations of continued execution, realization of the full impact of our 2007 acquisitions and continued improvements in efficiency and productivity, and expectations of our revenues, 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: general economic conditions and any weakness in IT 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; variations in supplier-sponsored programs; changes in our costs and operating expenses; changes in foreign currency exchange rates; 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 contract assembly business; risks associated with the consolidation, integration and performance of our recent acquisitions; our ability to complete and integrate the acquisition of New Age Electronics, Inc.; and other risks and uncertainties detailed in our Annual Report on Form 10-K for the year ended November 30, 2007 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 2008 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. SYNNEX Corporation Consolidated Balance Sheets (in thousands) (unaudited)       February 29, November 30, 2008 2007 Assets Current assets: Cash and cash equivalents $ 43,554 $ 42,875 Short-term investments 14,583 17,257 Accounts receivable, net 678,757 729,797 Receivable from vendors, net 109,746 96,035 Receivable from affiliates 7,511 9,790 Inventories 625,069 642,524 Deferred income taxes 18,132 18,612 Current deferred assets 14,746 14,478 Other current assets   10,589   16,859 Total current assets 1,522,687 1,588,227   Property and equipment, net 61,348 59,440 Goodwill and intangible assets, net 125,938 117,940 Deferred income taxes 6,262 5,416 Long-term deferred assets 88,064 97,171 Other assets   23,697   18,909   Total assets $ 1,827,996 $ 1,887,103   Liabilities and Stockholders' Equity Current liabilities: Borrowings under securitization, term loans and lines of credit $ 304,198 $ 351,142 Accounts payable 563,675 588,801 Payable to affiliates 67,527 67,334 Accrued liabilities 113,891 120,617 Current deferred liabilities 33,970 35,522 Income taxes payable   5,300   5,103 Total current liabilities 1,088,561 1,168,519   Long-term borrowings 32,507 37,537 Long-term liabilities 23,480 14,533 Long-term deferred liabilities 56,367 60,565 Deferred income taxes   452   437 Total liabilities   1,201,367   1,281,591   Minority interest in subsidiary   1,146   958   Stockholders' equity: Preferred stock - - Common stock 31 31 Additional paid-in-capital 197,660 196,128 Accumulated other comprehensive income 31,877 28,939 Retained earnings   395,915   379,456 Total stockholders' equity   625,483   604,554   Total liabilities and stockholders' equity $ 1,827,996 $ 1,887,103 SYNNEX Corporation Consolidated Statements of Operations (in thousands, except for per share amounts) (unaudited)       Three Months EndedFebruary 29, Three Months EndedFebruary 28, 2008 2007   Revenue $ 1,748,574 $ 1,588,276   Cost of revenue   1,652,724   1,513,852     Gross profit 95,850 74,424   Selling, general and administrative expenses   63,070   49,481     Income from operations before non-operating items, income taxes and minority interest 32,780 24,943   Interest expense and finance charges, net 4,167 3,058 Other (income) expense, net   2,046   (158 )   Income from operations before income taxes and minority interest 26,567 22,043   Provision for income taxes 9,551 8,168 Minority interest in subsidiary   188   -       Net income $ 16,828 $ 13,875     Diluted earnings per share $ 0.51 $ 0.43   Diluted weighted-average common shares outstanding   33,043   32,372