TD SYNNEX Reports Third Quarter Fiscal 2021 Results
FREMONT, Calif. and CLEARWATER, Fla., Sept. 28, 2021 /PRNewswire/ -- TD SYNNEX (NYSE: SNX) today announced financial results for legacy SYNNEX for the fiscal third quarter ended August 31, 2021.
Q3 FY21 | Q3 FY20 | Net change | |||||||||
Revenue ($M) | $ | 5,207 | $ | 5,306 | -1.9% | ||||||
Operating income ($M) | $ | 148.2 | $ | 132.4 | 12.0% | ||||||
Non-GAAP operating income ($M)(1) | $ | 168.2 | $ | 148.6 | 13.2% | ||||||
Operating margin | 2.85 | % | 2.49 | % | 36 bps | ||||||
Non-GAAP operating margin(1) | 3.23 | % | 2.80 | % | 43 bps | ||||||
Income from continuing operations | $ | 94.7 | $ | 85.7 | 10.5% | ||||||
Non-GAAP income from continuing operations(1) | $ | 111.9 | $ | 97.2 | 15.1% | ||||||
Diluted earnings per common share ("EPS") from continuing operations | $ | 1.81 | $ | 1.65 | 9.7% | ||||||
Non-GAAP Diluted EPS from continuing operations(1) | $ | 2.14 | $ | 1.88 | 13.8% | ||||||
"Results were consistent with expectations as ongoing industry-wide supply chain shortages led to a slight year-over-year revenue decline for legacy SYNNEX in the fiscal third quarter," said Marshall Witt, CFO of TD SYNNEX. "Despite these challenges, our team once again executed flawlessly, focusing on optimizing our core business and increasing our value-added services and products leading to improved margin performance."
Fiscal 2021 Third Quarter Highlights
- Revenue was $5.2 billion, down 1.9% from the prior fiscal third quarter. Operating income was $148 million, compared to $132 million, in the prior fiscal third quarter. Non-GAAP operating income was $168 million, in fiscal year third quarter 2021, compared to $149 million, in the prior fiscal third quarter.
- The trailing fiscal third quarter Return on Invested Capital ("ROIC") was 17.5% compared to 12.5% in the prior fiscal year third quarter. The adjusted trailing fiscal third quarter ROIC was 18.4%.
- Cash used in operations was $56 million for the quarter.
- Prior period financial results of Concentrix (earlier "customer experience services" business of SYNNEX) are excluded from income from continuing operations and presented as discontinued operations.
"Since our merger closed, the team has been hard at work, focused on a robust, consistent and superior experience for our customers and vendors," said Rich Hume, CEO of TD SYNNEX. "Our role in the IT industry continues to increase in importance, and we are well positioned to raise the bar on the value we provide all our partners. We are energized by the opportunities ahead of us as we integrate our companies, combine our line card and expand our geographic presence."
Fourth Quarter Fiscal 2021 Outlook
The following statements are based on TD SYNNEX' current expectations for the fiscal 2021 fourth quarter for the combined company. Non-GAAP financial measures exclude the impact of the transaction-related and integration expenses, amortization of intangible assets, share-based compensation, purchase accounting adjustments, 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 $15 billion to $16 billion.
- Net income is expected to be in the range of $38 million to $106 million and on a non-GAAP basis, net income is expected to be in the range of $242 million to $272 million.
- Diluted earnings per share is expected to be in the range of $0.39 to $1.09 and on a non-GAAP basis, diluted earnings per share is expected to be in the range of $2.50 to $2.80, based on estimated outstanding diluted weighted average shares of 96.2 million.
DividendTD SYNNEX announced today that its Board of Directors declared a quarterly cash dividend of $0.20 per common share. The dividend is payable on October 29, 2021 to stockholders of record as of the close of business on October 15, 2021.
Conference Call and WebcastTD SYNNEX will host a conference call today to discuss the fiscal 2021 third quarter results at 6:00 AM (PT)/9:00 AM (ET).
A live audio webcast of the earnings call will be accessible at ir.synnex.com and a replay of the webcast will be available following the call.
About SYNNEXTD SYNNEX (NYSE: SNX) is a leading global distributor and solutions aggregator for the IT ecosystem. We're an innovative partner helping more than 150,000 customers in 100+ countries to maximize the value of technology investments, demonstrate business outcomes and unlock growth opportunities. Headquartered in Clearwater, Florida, and Fremont, California, TD SYNNEX' 22,000 co-workers are dedicated to uniting compelling IT products, services and solutions from 1,500+ best-in-class technology vendors. Our edge-to-cloud portfolio is anchored in some of the highest-growth technology segments including cloud, cybersecurity, big data/analytics, IoT, mobility and everything as a service. TD SYNNEX is committed to serving customers and communities, and we believe we can have a positive impact on our people and our planet, intentionally acting as a respected corporate citizen. We aspire to be a diverse and inclusive employer of choice for talent across the IT ecosystem. For more information, visit TDSYNNEX.com.
(1)Use of Non-GAAP Financial InformationIn addition to the financial results presented in accordance with GAAP, TD SYNNEX also uses adjusted selling, general and administrative expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP income from continuing operations, non-GAAP net income, and non-GAAP diluted earnings per share, which are non-GAAP financial measures that exclude transaction-related and integration expenses, the amortization of intangible assets, share-based compensation expense and the related tax effects thereon. The Company also uses adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") which excludes other income (expense), net, transaction-related and integration expenses and income from discontinued operations. In prior periods, SYNNEX has excluded other items relevant to those periods for purposes of its non-GAAP financial measures.
Transaction-related expenses typically consist of acquisition, integration, and divestiture related costs and are expensed as incurred. These expenses primarily represent costs for legal, banking, consulting and advisory services, and debt extinguishment fees. From time to time, this category may also include transaction-related gains/losses on divestitures/spin-off of businesses.
TD SYNNEX' acquisition activities have resulted in the recognition of intangible assets which consist primarily of customer relationships and vendor lists. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in the Company's statements of operations. Although intangible assets contribute to the Company's revenue generation, the amortization of intangible assets does not directly relate to the sale of the Company's products and the services performed for the Company's clients. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of the Company's acquisition activity. Accordingly, the Company believes excluding the amortization of intangible assets, along with the other non-GAAP adjustments which neither relate to the ordinary course of the Company's business nor reflect the Company's underlying business performance, enhances the Company's and investors' ability to compare the Company's past financial performance with its current performance and to analyze underlying business performance and trends. Intangible asset amortization excluded from the related non-GAAP financial measure represents the entire amount recorded within the Company's GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised.
Share-based compensation expense is a non-cash expense arising from the grant of equity awards to employees based on the estimated fair value of those awards. Although share-based compensation is an important aspect of the compensation of our employees, the fair value of the share-based awards may bear little resemblance to the actual value realized upon the vesting or future exercise of the related share-based awards and the expense can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Given the variety and timing of awards and the subjective assumptions that are necessary when calculating share-based compensation expense, TD SYNNEX believes this additional information allows investors to make additional comparisons between our operating results from period to period.
Additionally, TD SYNNEX refers to revenue 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 TD 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, revenue at constant currency rates or adjusting for currency will be higher or lower than revenue 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 surplus cash. Adjusted ROIC is calculated by excluding the tax effected impact of non-GAAP adjustments from operating income and by excluding the cumulative tax effected impact of current and prior period non-GAAP adjustments on equity.
TD SYNNEX also uses free cash flow, which is cash flow from operating activities, reduced by purchases of property and equipment. TD SYNNEX uses free cash flow to conduct and evaluate its business because, although it is similar to cash flow from operations, TD SYNNEX believes it is an additional useful 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 TD 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, TD SYNNEX believes it is important to view free cash flow as a complement to its entire consolidated statements of cash flows.
TD 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 TD SYNNEX' operational results and trends that more readily enable investors to analyze TD 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 TD SYNNEX' consolidated financial statements prepared in accordance with GAAP. A reconciliation of TD SYNNEX' GAAP to non-GAAP financial information is set forth in the supplemental tables at the end of this press release.
Safe Harbor StatementStatements in this news release regarding TD SYNNEX 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 TD SYNNEX for future operations; our expectations and outlook for the fiscal 2021 fourth 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, 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 unfavorable outcome of any legal proceedings that have been or may be instituted against us; the ability to retain key personnel; 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; the declaration, timing and payment of dividends, and the Board's reassessment thereof; and other risks and uncertainties detailed in our Form 10-K for the fiscal year ended November 30, 2020 and subsequent SEC filings. Statements included in this press release are based upon information known to TD SYNNEX as of the date of this release, and TD SYNNEX assumes no obligation to update information contained in this press release.
Copyright 2021 SYNNEX CORPORATION. All rights reserved. TD SYNNEX, the TD SYNNEX Logo, and all other TD SYNNEX company, product and services names and slogans are trademarks or registered trademarks of SYNNEX Corporation. Other names and marks are the property of their respective owners.
Contacts:Liz MoraliInvestor Relations510-668-8436[email protected]
Bobby EagleGlobal Corporate Communications 727-538-5864[email protected]
SYNNEX CorporationConsolidated Balance Sheets(currency and share amounts in thousands, except par value)(Amounts may not add due to rounding)(unaudited) | ||||||||
August 31, 2021 | November 30, 2020 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,050,364 | $ | 1,412,016 | ||||
Accounts receivable, net | 2,229,640 | 2,791,703 | ||||||
Receivables from vendors, net | 262,147 | 286,327 | ||||||
Inventories | 2,866,212 | 2,684,076 | ||||||
Other current assets | 195,058 | 173,940 | ||||||
Current assets of discontinued operations | — | 1,421,065 | ||||||
Total current assets | 9,603,421 | 8,769,127 | ||||||
Property and equipment, net | 152,293 | 157,645 | ||||||
Goodwill | 425,100 | 423,885 | ||||||
Intangible assets, net | 158,397 | 186,047 | ||||||
Deferred tax assets | 40,134 | 39,636 | ||||||
Other assets, net | 127,636 | 138,070 | ||||||
Noncurrent assets of discontinued operations | — | 3,754,180 | ||||||
Total assets | $ | 10,506,980 | $ | 13,468,590 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Borrowings, current | $ | 8,737 | $ | 124,958 | ||||
Accounts payable | 3,222,284 | 3,751,240 | ||||||
Accrued compensation and benefits | 104,387 | 103,075 | ||||||
Other accrued liabilities | 647,855 | 618,616 | ||||||
Income taxes payable | 24,131 | 46,363 | ||||||
Current liabilities of discontinued operations | — | 985,840 | ||||||
Total current liabilities | 4,007,393 | 5,630,092 | ||||||
Long-term borrowings | 4,016,449 | 1,496,700 | ||||||
Other long-term liabilities | 130,917 | 130,296 | ||||||
Deferred tax liabilities | 13,931 | 5,836 | ||||||
Noncurrent liabilities of discontinued operations | — | 1,866,807 | ||||||
Total liabilities | 8,168,690 | 9,129,730 | ||||||
Stockholders' equity: | ||||||||
Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued or outstanding | — | — | ||||||
Common stock, $0.001 par value, 200,000 shares authorized, 53,855 and 53,671 shares issued as of August 31, 2021 and November 30, 2020, respectively | 54 | 54 | ||||||
Additional paid-in capital | 1,615,688 | 1,591,536 | ||||||
Treasury stock, 2,550 and 2,538 shares as of August 31, 2021 and November 30, 2020, respectively | (192,316) | (191,216) | ||||||
Accumulated other comprehensive income (loss) | (156,778) | (194,571) | ||||||
Retained earnings | 1,071,642 | 3,133,058 | ||||||
Total stockholders' equity | 2,338,290 | 4,338,860 | ||||||
Total liabilities and equity | $ | 10,506,980 | $ | 13,468,590 | ||||
SYNNEX CorporationConsolidated Statements of Operations(currency and share amounts in thousands, except per share amounts)(Amounts may not add due to rounding)(unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | |||||||||||||
Revenue | $ | 5,207,064 | $ | 5,306,361 | $ | 16,002,904 | $ | 13,858,313 | ||||||||
Cost of revenue | (4,894,442) | (5,008,881) | (15,056,539) | (13,031,113) | ||||||||||||
Gross profit | 312,622 | 297,480 | 946,365 | 827,201 | ||||||||||||
Selling, general and administrative expenses | (164,418) | (165,107) | (508,511) | (506,239) | ||||||||||||
Operating income | 148,204 | 132,373 | 437,853 | 320,962 | ||||||||||||
Interest expense and finance charges, net | (26,365) | (19,747) | (71,766) | (59,531) | ||||||||||||
Other income (expense), net | 4,796 | 25 | 2,707 | (1,004) | ||||||||||||
Income from continuing operations before income taxes | 126,635 | 112,650 | 368,794 | 260,426 | ||||||||||||
Provision for income taxes | (31,931) | (26,953) | (93,165) | (56,023) | ||||||||||||
Income from continuing operations | 94,705 | 85,697 | 275,628 | 204,403 | ||||||||||||
Income from discontinued operations, net of taxes | — | 48,767 | — | 109,605 | ||||||||||||
Net income | $ | 94,705 | $ | 134,464 | $ | 275,628 | $ | 314,008 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | ||||||||||||||||
Continuing operations | $ | 1.82 | $ | 1.67 | $ | 5.32 | $ | 3.97 | ||||||||
Discontinued operations | — | 0.95 | — | 2.13 | ||||||||||||
Net income | $ | 1.82 | $ | 2.61 | $ | 5.32 | $ | 6.10 | ||||||||
Diluted | ||||||||||||||||
Continuing operations | $ | 1.81 | $ | 1.65 | $ | 5.27 | $ | 3.95 | ||||||||
Discontinued operations | — | 0.94 | — | 2.12 | ||||||||||||
Net income | $ | 1.81 | $ | 2.60 | $ | 5.27 | $ | 6.07 | ||||||||
Weighted-average common shares outstanding: | ||||||||||||||||
Basic | 51,275 | 50,890 | 51,204 | 50,851 | ||||||||||||
Diluted | 51,766 | 51,241 | 51,679 | 51,172 | ||||||||||||
SYNNEX CorporationReconciliation of GAAP to Non-GAAP financial measures(currency in thousands)(Amounts may not add due to rounding) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | |||||||||||||
Revenue in constant currency | ||||||||||||||||
Revenue | $ | 5,207,064 | $ | 5,306,361 | $ | 16,002,904 | $ | 13,858,313 | ||||||||
Foreign currency translation | (36,698) | (113,467) | ||||||||||||||
Revenue in constant currency | $ | 5,170,366 | $ | 5,306,361 | $ | 15,889,437 | $ | 13,858,313 | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | |||||||||||||
Selling, general and administrative expenses | ||||||||||||||||
GAAP selling, general and administrative expenses | $ | 164,418 | $ | 165,107 | $ | 508,511 | $ | 506,239 | ||||||||
Transaction-related and integration expenses | 4,133 | 1,278 | 10,068 | 1,632 | ||||||||||||
Amortization of intangibles | 9,386 | 9,995 | 28,128 | 30,130 | ||||||||||||
Share-based compensation | 6,509 | 4,996 | 18,146 | 13,221 | ||||||||||||
Adjusted selling, general and administrative expenses | $ | 144,390 | $ | 148,838 | $ | 452,169 | $ | 461,256 | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | |||||||||||||
Operating income and operating margin | ||||||||||||||||
Revenue | $ | 5,207,064 | $ | 5,306,361 | $ | 16,002,904 | $ | 13,858,313 | ||||||||
GAAP operating income | $ | 148,204 | $ | 132,373 | $ | 437,853 | $ | 320,962 | ||||||||
Transaction-related and integration expenses | 4,133 | 1,278 | 10,068 | 1,632 | ||||||||||||
Amortization of intangibles | 9,386 | 9,995 | 28,128 | 30,130 | ||||||||||||
Share-based compensation | 6,509 | 4,996 | 18,146 | 13,221 | ||||||||||||
Non-GAAP operating income | $ | 168,232 | $ | 148,642 | $ | 494,195 | $ | 365,945 | ||||||||
GAAP operating margin | 2.85 | % | 2.49 | % | 2.74 | % | 2.32 | % | ||||||||
Non-GAAP operating margin | 3.23 | % | 2.80 | % | 3.09 | % | 2.64 | % | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | |||||||||||||
Adjusted EBITDA | ||||||||||||||||
Net income | $ | 94,705 | $ | 134,464 | $ | 275,628 | $ | 314,008 | ||||||||
Interest expense and finance charges, net | 26,365 | 19,747 | 71,766 | 59,531 | ||||||||||||
Provision for income taxes | 31,931 | 26,953 | 93,165 | 56,023 | ||||||||||||
Depreciation | 5,633 | 5,937 | 16,800 | 17,650 | ||||||||||||
Amortization of intangibles | 9,386 | 9,995 | 28,128 | 30,130 | ||||||||||||
EBITDA | $ | 168,020 | $ | 197,096 | $ | 485,487 | $ | 477,342 | ||||||||
Other (income) expense, net | (4,796) | (25) | (2,707) | 1,004 | ||||||||||||
Transaction-related and integration expenses | 7,258 | 1,278 | 13,193 | 1,632 | ||||||||||||
Share-based compensation | 6,509 | 4,996 | 18,146 | 13,221 | ||||||||||||
Income from discontinued operations | — | (48,767) | — | (109,605) | ||||||||||||
Adjusted EBITDA | $ | 176,991 | $ | 154,578 | $ | 514,119 | $ | 383,594 | ||||||||
SYNNEX CorporationReconciliation 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 | Nine Months Ended | |||||||||||||||
August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | |||||||||||||
Income from continuing operations | ||||||||||||||||
Income from continuing operations | $ | 94,705 | $ | 85,697 | $ | 275,628 | $ | 204,403 | ||||||||
Transaction-related and integration expenses | 7,258 | 1,278 | 13,193 | 1,632 | ||||||||||||
Amortization of intangibles | 9,386 | 9,995 | 28,128 | 30,130 | ||||||||||||
Share-based compensation | 6,509 | 4,996 | 18,146 | 13,221 | ||||||||||||
Income taxes related to the above(1) | (5,933) | (4,741) | (15,191) | (13,501) | ||||||||||||
Non-GAAP income from continuing operations | $ | 111,925 | $ | 97,225 | $ | 319,904 | $ | 235,885 | ||||||||
Diluted earnings per common share ("EPS")(2) | ||||||||||||||||
Income from continuing operations | $ | 94,705 | $ | 85,697 | $ | 275,628 | $ | 204,403 | ||||||||
Less: income from continuing operations allocated to participating securities | (1,182) | (944) | (3,280) | (2,380) | ||||||||||||
Income from continuing operations attributable to common stockholders | 93,523 | 84,753 | 272,348 | 202,023 | ||||||||||||
Transaction-related and integration expenses attributable to common stockholders | 7,168 | 1,264 | 13,038 | 1,614 | ||||||||||||
Amortization of intangibles attributable to common stockholders | 9,269 | 9,885 | 27,796 | 29,794 | ||||||||||||
Share-based compensation attributable to common stockholders | 6,428 | 4,941 | 17,932 | 13,074 | ||||||||||||
Income taxes related to the above attributable to common stockholders(1) | (5,859) | (4,689) | (15,012) | (13,350) | ||||||||||||
Non-GAAP income from continuing operations attributable to common stockholders | $ | 110,528 | $ | 96,154 | $ | 316,102 | $ | 233,154 | ||||||||
Weighted-average number of common shares - diluted: | 51,766 | 51,241 | 51,679 | 51,172 | ||||||||||||
Diluted EPS from continuing operations(2) | $ | 1.81 | $ | 1.65 | $ | 5.27 | $ | 3.95 | ||||||||
Transaction-related and integration expenses | 0.14 | 0.02 | 0.25 | 0.03 | ||||||||||||
Amortization of intangibles | 0.18 | 0.19 | 0.54 | 0.58 | ||||||||||||
Share-based compensation | 0.12 | 0.10 | 0.35 | 0.26 | ||||||||||||
Income taxes related to the above(1) | (0.11) | (0.09) | (0.29) | (0.26) | ||||||||||||
Non-GAAP diluted EPS from continuing operations(2) | $ | 2.14 | $ | 1.88 | $ | 6.12 | $ | 4.56 | ||||||||
SYNNEX CorporationReconciliation of GAAP to Non-GAAP financial measures(Amounts may not add due to rounding)(continued) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
(Currency in thousands) | August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | ||||||||||||
Free cash flow | ||||||||||||||||
Net cash provided by (used in) operating activities [Continuing operations] | $ | (55,525) | $ | 230,376 | $ | 248,791 | $ | 1,159,534 | ||||||||
Purchases of property and equipment [Continuing operations] | (4,997) | (5,697) | (14,111) | (21,099) | ||||||||||||
Free cash flow [Continuing operations] | $ | (60,522) | $ | 224,679 | $ | 234,680 | $ | 1,138,435 | ||||||||
Forecast | ||||||||
Three Months Ending November 30, 2021 | ||||||||
(Amounts in millions, except per share amounts) | Low | High | ||||||
Net income | $ | 38 | $ | 106 | ||||
Transaction-related and integration expenses(4) | 119 | 99 | ||||||
Amortization of intangibles | 110 | 90 | ||||||
Share-based compensation | 7 | 7 | ||||||
Purchase accounting adjustments(3) | 35 | 25 | ||||||
Income taxes related to the above(1) | (68) | (55) | ||||||
Non-GAAP net income | $ | 242 | $ | 272 | ||||
Diluted EPS(2) | $ | 0.39 | $ | 1.09 | ||||
Transaction-related and integration expenses(4) | 1.23 | 1.02 | ||||||
Amortization of intangibles | 1.14 | 0.93 | ||||||
Share-based compensation | 0.07 | 0.07 | ||||||
Purchase accounting adjustments(3) | 0.36 | 0.26 | ||||||
Income taxes related to the above(1) | (0.70) | (0.57) | ||||||
Non-GAAP diluted EPS | $ | 2.50 | $ | 2.80 | ||||
(1) | The tax effect of taxable and deductible non-GAAP adjustments was calculated using the effective year-to-date tax rate during the respective periods. |
(2) | 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, income from continuing operations allocated to participating securities was approximately 1.2% of income from continuing operations for both the three and nine months ended August 31, 2021, and approximately 1.1% and 1.2% for the three and nine months ended August 31, 2020, respectively. Net income allocable to participating securities is estimated to be approximately 0.8% of the forecast Net income for the three months ending November 30, 2021. |
(3) | Purchase accounting adjustments are primarily related to certain consideration received from vendors. |
(4) | Includes amounts recorded in selling, general and administrative expenses and interest expense and finance charges, net. |
SYNNEX CorporationCalculation of Financial Metrics(currency in thousands)(Amounts may not add or compute due to rounding)Return on Invested Capital ("ROIC") | ||||||||
August 31, 2021 | August 31, 2020 | |||||||
ROIC | ||||||||
Operating income (trailing fiscal four quarters) | $ | 638,233 | $ | 487,796 | ||||
Income taxes on operating income(1) | (162,054) | (97,475) | ||||||
Operating income after taxes | $ | 476,179 | $ | 390,321 | ||||
Total invested capital comprising equity and borrowings, less surplus cash (last five quarters average)(2) | $ | 2,718,666 | $ | 3,126,766 | ||||
ROIC | 17.5 | % | 12.5 | % | ||||
Adjusted ROIC | ||||||||
Non-GAAP operating income (trailing fiscal four quarters) | $ | 714,785 | $ | 543,686 | ||||
Income taxes on Non-GAAP operating income(1) | (184,081) | (114,812) | ||||||
Non-GAAP operating income after taxes | $ | 530,704 | $ | 428,874 | ||||
Total invested capital comprising equity and borrowings, less surplus cash (last five quarters average)(2) | $ | 2,718,666 | $ | 3,126,766 | ||||
Tax effected impact of cumulative non-GAAP adjustments (last five quarters average) | 167,660 | 118,923 | ||||||
Total Non-GAAP invested capital (last five quarters average)(2) | $ | 2,886,326 | $ | 3,245,689 | ||||
Adjusted ROIC | 18.4 | % | 13.2 | % | ||||
(1) | 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. |
(2) | Invested capital for the fiscal quarters preceding the quarter ended February 28, 2021 are based on pro forma presentation to reflect the separation of the Company's erstwhile Concentrix reportable segment into an independent public company on December 1, 2020. |
Debt to Adjusted EBITDA leverage ratio | ||||||||||
August 31, 2021 | August 31, 2020 | |||||||||
Total borrowings, excluding book overdraft(1) | (a) | $ | 4,024,729 | $ | 1,654,108 | |||||
Less: cash and cash equivalents(1) | (b) | 4,050,364 | 1,347,650 | |||||||
Net debt / (Net cash) | (c)=(a)-(b) | $ | (25,635) | $ | 306,458 | |||||
Trailing four quarters Adjusted EBITDA | (d) | $ | 741,981 | $ | 571,542 | |||||
Debt to Adjusted EBITDA leverage ratio | (e)=(a)/(d) | 5.4 | 2.9 | |||||||
Net debt to Adjusted EBITDA leverage ratio | (f)=(c)/(d) | — | 0.5 | |||||||
(1) | Borrowings and cash and cash equivalents as of August 31, 2020 are based on pro forma presentation to reflect the separation of the Company's erstwhile Concentrix reportable segment into an independent public company on December 1, 2020. |
SYNNEX CorporationCalculation of Financial Metrics(currency in thousands)(Amounts may not add or compute due to rounding)(continued)Cash Conversion Cycle | ||||||||||
Three Months Ended | ||||||||||
August 31, 2021 | August 31, 2020 | |||||||||
Days sales outstanding | ||||||||||
Revenue | (a) | $ | 5,207,064 | $ | 5,306,361 | |||||
Accounts receivable, net(1) | (b) | 2,229,640 | 2,640,879 | |||||||
Days sales outstanding | (c) = (b)/((a)/the number of days during the period) | 39 | 46 | |||||||
Days inventory outstanding | ||||||||||
Cost of revenue | (d) | $ | 4,894,442 | $ | 5,008,881 | |||||
Inventories(1) | (e) | 2,866,212 | 2,832,607 | |||||||
Days inventory outstanding | (f) = (e)/((d)/the number of days during the period) | 54 | 52 | |||||||
Days payable outstanding | ||||||||||
Cost of revenue | (g) | $ | 4,894,442 | $ | 5,008,881 | |||||
Accounts payable(1) | (h) | 3,222,284 | 3,537,419 | |||||||
Days payable outstanding | (i) = (h)/((g)/the number of days during the period) | 61 | 65 | |||||||
Cash conversion cycle | (j) = (c)+(f)-(i) | 32 | 33 | |||||||
(1) | Accounts receivable, inventories and accounts payable as of August 31, 2020 are based on pro forma presentation to reflect the separation of the Company's prior Concentrix reportable segment into an independent public company on December 1, 2020. |
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SOURCE TD SYNNEX