SYNNEX Corporation, a leading business process services company, today announced financial results for the fiscal second quarter ended May 31, 2008.
For the second quarter of fiscal 2008, revenues were $1.878 billion, compared to $1.685 billion for the quarter ended May 31, 2007, representing an 11% increase over the prior year quarter. These results were within the Company’s guidance of $1.845 billion to $1.915 billion.
Net income for the second quarter of fiscal 2008 was $18.5 million, or $0.56 per diluted share, compared with $14.7 million, or $0.45 per diluted share in the prior year quarter, representing a 26% increase in net income over the prior year quarter. These results exceeded analysts’ consensus and the Company’s guidance for net income of $16.9 million to $17.6 million with diluted earnings per share of $0.51 to $0.53. The second quarter for fiscal 2008 marks the 84th consecutive profitable quarter for SYNNEX.
“The SYNNEX team produced another very solid quarter resulting in continued growth in profitability,” stated Robert T. Huang, President and Co-Chief Executive Officer. “Our second quarter marked several important events for SYNNEX. We closed our New Age Electronics acquisition in April and I would like to commend our integration team on an expeditious integration with minimal disruption to our New Age Electronics customers and vendors. I would also like to welcome the New Age Electronics employees to the SYNNEX family.”
Huang continued, “We also announced that Kevin Murai joined the SYNNEX family as Co-Chief Executive Officer. With 20 years of industry experience, Kevin has a wealth of knowledge that will significantly benefit SYNNEX. In the short period of time that Kevin has been with SYNNEX, I am very impressed with how quickly he has taken over the day-to-day operations of managing our core business in North America.”
Second Quarter Fiscal 2008 Financial Highlights:
— Gross margin expanded to 5.37%, an increase of approximately 37 basis points, compared to the second quarter of fiscal 2007.
— Income from operations was $31.7 million, or 1.69% of revenues, versus $25.8 million, or 1.53% of revenues in the prior fiscal year second quarter.
— Depreciation and amortization were $2.7 million and $2.0 million, respectively.
— Capital expenditures were $5.5 million.
— Borrowings under the Company’s Canadian off-balance sheet accounts receivable securitization program totaled approximately $66.9 million as of May 31, 2008. This compares to $115.9 million as of November 30, 2007.
Third Quarter Fiscal 2008 Outlook:
The following statements are based on the Company’s current expectations for the third quarter of fiscal 2008. These statements are forward-looking and actual results may differ materially.
— Revenues are expected to be in the range of $1.92 billion to $1.99 billion.
— Net income is expected to be in the range of $18.7 million to $19.4 million.
— Diluted earnings per share are expected to be in the range of $0.56 to $0.58.
The calculation of diluted earnings per share for the third quarter of fiscal 2008 is based on an approximate diluted weighted-average share count of approximately 33.5 million.
“Our outlook for the third quarter reflects the benefits of the overall diversification of our business model, continued strong execution of our core business plans and our on-going focus on maintaining and delivering good profitability even during the current economic slowdown,” said Kevin Murai, Co-Chief Executive Officer at SYNNEX Corporation. “We reiterate our commitment to our stated goal of growing our annual earnings per share in excess of 20% year-over-year, which has been adjusted upward to include our New Age Electronics acquisition. We believe we can achieve these goals in the current economic environment, through the combination of continued superior execution, realization of the full impact of our recent acquisition of New Age Electronics and continued improvements in efficiency and productivity of our operations.”
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 866-793-1340 in North America or 703-639-1311 outside North America. The confirmation code for the call is 1251855. A replay of the conference call will be available at http://ir.synnex.com approximately two hours after the conclusion of the conference and will be archived until July 10, 2008.