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 26, 2016
______________________________
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 26, 2016 , SYNNEX Corporation (“SYNNEX”) issued a press release regarding SYNNEX’ financial results for its fiscal third quarter ended August 31, 2016 . The full text of SYNNEX’ press release is furnished herewith as Exhibit 99.1.

Item 5.02.
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On September 26, 2016, SYNNEX Corporation (the “Company”) and Kevin Murai, President and Chief Executive Officer of the Company, entered into an amendment to Mr. Murai’s March 2008 offer letter. The amendment modifies the formula by which his severance payments are calculated upon his involuntary termination (as defined in the amendment and the Company’s Change of Control Severance Plan) of employment combined with a change of control (as defined in the Severance Plan) to ensure that payments under any SYNNEX incentive bonus plans taken into account in such formula remain fully deductible to SYNNEX as performance-based compensation under Section 162(m) of the Internal Revenue Code, as amended, and to conform more closely to the severance compensation given to other senior executives of the Company.
The foregoing description of the amendment to Mr. Murai’s offer letter is qualified in its entirety by reference to the full text of the Amendment to Offer Letter, which is filed hereto as Exhibit 10.1 and is incorporated herein by reference.

Item 9.01.
Financial Statements and Exhibits
(d) Exhibits

Exhibit No.   
Description
10.1
Amendment to Offer Letter dated September 26, 2016, by and between SYNNEX Corporation and Kevin Murai
99.1
Press Release dated September 26, 2016

 


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 26, 2016
 
 
 
 
 
SYNNEX CORPORATION
 
 
By:
 
/s/ Simon Y. Leung
 
 
Simon Y. Leung
Senior Vice President, General Counsel and
Corporate Secretary


2


EXHIBIT INDEX

Exhibit No.   
Description
10.1
Amendment to Offer Letter dated September 26, 2016, by and between SYNNEX Corporation and Kevin Murai
99.1
Press Release dated September 26, 2016





3

AMENDMENT TO OFFER LETTER
This Amendment to the Offer Letter between SYNNEX Corporation (the “ Company ”) and Kevin M. Murai (the “ Executive ”), dated as of March 27, 2008 (the “ Agreement ”) is made this 26 th  day of September, 2016.
WHEREAS, Section 15 of the Agreement permits the parties to modify the terms of the Agreement by a mutually executed writing; and
WHEREAS, the parties desire to modify the formula by which the Executive’s severance payments are calculated to ensure that payments under any incentive bonus plans taken into account in such formula remain fully deductible to the Company as performance-based compensation under Section 162(m) of the Internal Revenue Code, as amended, and to conform more closely to the severance protections given to other senior executives of the Company;
NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to amend the Agreement as follows, effective as of the date hereof:
1.      Section 7 of the Agreement is hereby amended to read as follows:
7. Severance Pay . In the event that, after the Employment Date, you incur an Involuntary Termination (as defined in the Company’s Change of Control Severance Plan, as amended (the “ Severance Plan ”)) within twelve (12) months after a Change of Control (as defined in the Severance Plan) or within two (2) months on or before a Change of Control, then, subject to Section 8 hereof, you will receive the severance benefit available to a Level 1 Participant with twenty-four (24) years of service under the Severance Plan.
2.
Section 8(c) of the Agreement is hereby amended to add the following sentence at the end thereof:
In each case where a payment is subject to the execution and non-revocation of a release of claims and the period between the effective date of the notice of termination of employment (the “ Termination Date ”) and the last day on which the release could become irrevocable spans two calendar years, then such deferred payments shall not be made before the second calendar year if the Company determines that such payment is nonqualified deferred compensation subject to Section 409A of the Code.
3.
Section 8 of the Agreement is further amended to add the following new subsection (d):
(d)
Notice of Termination . Any termination of employment by the Company for Cause or by you as a result of an Involuntary Termination (as defined in the Severance Plan) shall be communicated by a written notice of termination personally delivered or mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. Any notice of termination to the Company shall be addressed to its corporate headquarters and directed to the attention of its Secretary. Any notice to you shall be addressed to you at the home address which you most recently communicated to the Company in writing. Such notice shall indicate the specific termination provision relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the Termination Date (which shall be not more than thirty (30) days after the giving of such notice).
5.    Section 13 of the Agreement is hereby amended to read as follows:
13.
Successors .
(a)
Company’s Successors . Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the Company’s obligations under this agreement and agree expressly to perform the Company’s obligations under this agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this agreement, the term “Company” will include any successor to the Company’s business and/or assets which expressly assumes this agreement, including the assumption agreement described in the preceding sentence, or which becomes bound by the terms of this agreement by operation of law.
(b)
Your Successors . The terms of this agreement and all of your rights hereunder will inure to the benefit of, and be enforceable by, your personal or legal representations, executors, administrators, successors, heirs, distributes, devisees and legatees.
6.    Except as expressly modified herein, the Agreement shall remain in full force and effect.
[ Signature page follows ]

IN WITNESS WHEREOF, the Parties hereto have duly executed this Amendment to the Agreement on the date and year first written above.
/s/ Kevin M. Murai                
Kevin M. Murai
SYNNEX CORPORATION
By:     /s/ Simon Y. Leung            
Simon Y. Leung
Senior Vice President, General Counsel and Corporate Secretary.



Exhibit 99.1
IMAGE0A08.JPG
FOR IMMEDIATE RELEASE

Investor Contact :
Phyllis Proffer
Director, Investor Relations
SYNNEX Corporation
Telephone: (864) 373-7354

SYNNEX Corporation Reports Fiscal 2016 Third Quarter Results
Increased Quarterly Cash Dividend by 25% to $0.25 per Share

Fremont, Calif., - September 26, 2016 - SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal third quarter ended August 31, 2016 .
 
Q3 FY16
Q3 FY15
Net change
Revenue ($M)
$3,670
$3,333
10.1%
Operating income ($M)
$98.0
$81.3
20.6%
Non-GAAP operating income ($M) (1)
$113.6
$97.0
17.1%
Operating margin
2.67%
2.44%
23 bps
Non-GAAP operating margin (1)
3.10%
2.91%
19 bps
Net income attributable to SYNNEX Corporation ($M)  
$58.7
$48.2
21.9%
Non-GAAP net income attributable to SYNNEX Corporation ($M) (1)  
$68.9
$58.4
18.0%
Diluted EPS
$1.47
$1.21
21.5%
Non-GAAP Diluted EPS (1)
$1.73
$1.47
17.7%
(1) Non-GAAP financial measures exclude the impact of acquisition and integration expenses, restructuring costs, the amortization of intangible assets and the related tax effects thereon. A reconciliation of GAAP to Non-GAAP financial information is presented in the supplementary information section at the end of this press release.
“Execution in our core business and the investments we’ve made in new business models helped drive strong performance in Technology Solutions. Also, we are seeing the benefits of strong sales and productivity improvements in our Concentrix business,” stated Kevin Murai, President and Chief Executive Officer. “During the quarter we closed the acquisition of Minacs and I am pleased to welcome our new associates to the company.”




Fiscal 2016 Third Quarter Highlights:
•
Technology Solutions: Revenue was $3.3 billion , up 9.8% from the prior fiscal year third quarter. Adjusting for the translation effect of foreign currencies, the Technology Solutions business increased by 9.0% compared with last year. Technology Solutions generated operating income of $79.4 million , or 2.43% of segment revenue, compared with $71.0 million , or 2.39% of segment revenue, in the fiscal third quarter of 2015.
•
Concentrix: Revenue was $406.7 million , an increase of 13.1% from the $359.5 million in revenue generated during the third quarter of last year. Adjusting for the Minacs acquisition and translation effect of foreign currencies, Concentrix revenue increased 5.0% compared with last year. Operating income was $18.6 million , compared with $10.1 million in the prior fiscal year third quarter. Non-GAAP operating income was $33.5 million , or 8.24% of segment revenue, for fiscal third quarter of 2016, compared with $25.2 million , or 7.02% of segment revenue, in the fiscal third quarter of 2015.
•
The trailing fiscal four quarters Return on Invested Capital ("ROIC") was 9.6% compared with 8.9% in the prior year fiscal third quarter. Excluding the impact of acquisition and integration expenses, restructuring costs and amortization of intangibles, the trailing fiscal four quarters ROIC was 10.6% .
•
The debt to capitalization ratio was 29.5% , down from 29.7% in the prior fiscal year third quarter.
•
Depreciation and amortization were $15.4 million and $13.0 million , respectively.
•
Cash used in operations was approximately $9 million for the quarter.

Fiscal 2016 Fourth Quarter Outlook:
The following statements are based on SYNNEX’s current expectations for the fiscal 2016 fourth quarter. Non-GAAP financial measures exclude the impact of acquisition and integration expenses, restructuring costs, the amortization of intangibles and the related tax impact thereon. These statements are forward-looking and actual results may differ materially.
•
Revenue is expected to be in the range of $3.83 billion to $3.93 billion .
•
Net income is expected to be in the range of $64.8 million to $66.8 million and on a Non-GAAP basis net income is expected to be in the range of $82.7 million to $84.7 million.
•
Diluted earnings per share is expected to be in the range of $1.62 to $1.66 and on a Non-GAAP basis diluted earnings per share is expected to be in the range of $2.06 to $2.11.
•
After-tax amortization of intangibles is expected to be $10.2 million, or $0.25 per share. After tax acquisition, integration and restructuring expenses are expected to be $7.7 million, or $0.19 per share.

Dividend Announcement
SYNNEX announced today that its Board of Directors has declared a quarterly cash dividend of $0.25 per common share. The dividend will be payable on October 28, 2016 to stockholders of record as of the close of business on October 14, 2016.



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 (888) 469-3219 in North America or (630) 395-0205 outside North America. The passcode 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 where it will be archived for one year.

About SYNNEX Corporation
SYNNEX Corporation (NYSE: SNX), a Fortune 500 corporation, is a leading business process services company, optimizing supply chains and providing outsourced services focused on customer relationship management. SYNNEX distributes a broad range of information technology systems and products, and also provides systems design and integration solutions. Concentrix, a wholly-owned subsidiary of SYNNEX Corporation, offers a portfolio of strategic solutions and end-to-end business services around customer engagement strategy, process optimization, technology innovation, front and back-office automation and business transformation to clients in ten identified industry verticals. Founded in 1980, SYNNEX Corporation operates in 26 countries around the world. Additional information about SYNNEX may be found online at www.synnex.com.

Use of Non-GAAP Financial Information
To supplement the financial results presented in accordance with GAAP, SYNNEX uses non-GAAP operating income, non-GAAP operating margin, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA"), non-GAAP net income attributable to SYNNEX Corporation, non-GAAP diluted earnings per share and adjusted ROIC, which are non-GAAP financial measures that exclude acquisition and integration expenses, restructuring costs, the amortization of intangible assets and the related tax effects thereon. These non-GAAP financial measures provide investors with an additional tool to evaluate operating results. Because 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 the Company's consolidated financial statements prepared in accordance with GAAP.
SYNNEX refers to growth rates 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 the Company's business performance. Financial results adjusted for currency are calculated by translating current period activity in local currency using the comparable prior year periods’ currency conversion rate. This approach is used for countries where the functional currency is the local currency. Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates or adjusting for currency will be higher or lower than growth 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 debt and equity, net of cash and cash equivalents in the United States. Adjusted ROIC, or ROIC excluding the impact of acquisition and integration expenses, restructuring costs and the amortization of intangibles is calculated by excluding the tax effected impact of these items from operating income and equity.
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. SYNNEX management believes it is useful for the company and investors to review, as applicable,


both GAAP information and non-GAAP financial measures in order to assess the performance of SYNNEX’ continuing businesses and for planning and forecasting in future periods. These non-GAAP measures are intended to provide investors with an understanding of SYNNEX’ operational results and trends that more readily enable investors to analyze SYNNEX' base financial and operating performance and to facilitate period-to-period comparisons and analysis of operational trends. The management of SYNNEX believes the 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. A reconciliation of SYNNEX’ non-GAAP financial information to GAAP is set forth in the supplemental information table at the end of this press release.

Safe Harbor Statement
Statements in this news 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, foresee, expect, may, will, provide, could and should and the negative of these terms or other similar expressions. These statements, including statements regarding SYNNEX’ expectations and outlook for the fiscal 2016 fourth quarter as to revenue, net income, non-GAAP net income, diluted earnings per share, non-GAAP diluted earnings per share, after-tax amortization of intangibles, impact of acquisition and integration expenses and restructuring expenses and the timing of completion of such costs, currency impact, the frequency and occurrence of dividend declarations and the anticipated benefits of the non-GAAP financial measures, 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 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; and other risks and uncertainties detailed in our Form 10-K for the fiscal year ended November 30, 2015 and subsequent 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 2016 SYNNEX Corporation. All rights reserved. SYNNEX, the SYNNEX Logo, CONCENTRIX, MINACS and all other SYNNEX company, product and services names and slogans are trademarks or registered trademarks of SYNNEX Corporation. SYNNEX, the SYNNEX Logo, CONCENTRIX and MINACS 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,
2016
 
November 30,
2015
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
223,282

 
$
336,072

Restricted cash
4,845

 
88,558

Short-term investments
6,959

 
5,546

Accounts receivable, net
1,651,074

 
1,759,491

Receivable from related parties
99

 
114

Inventories
1,568,697

 
1,328,967

Current deferred tax assets
42,814

 
40,510

Other current assets
117,952

 
90,523

Total current assets
3,615,722

 
3,649,781

Property and equipment, net
315,239

 
248,627

Goodwill
519,704

 
298,785

Intangible assets, net
274,861

 
166,567

Deferred tax assets
28,970

 
19,849

Other assets
67,440

 
60,538

Total assets
$
4,821,936

 
$
4,444,147

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Borrowings, current
$
187,878

 
$
92,093

Accounts payable
1,515,939

 
1,445,194

Payable to related parties
15,725

 
7,661

Accrued compensation and benefits
149,734

 
135,453

Other accrued liabilities
226,368

 
218,687

Income taxes payable
20,339

 
19,069

Total current liabilities
2,115,983

 
1,918,157

Long-term borrowings
620,544

 
638,798

Other long-term liabilities
101,369

 
76,582

Deferred tax liabilities
57,257

 
10,713

Total liabilities
2,895,153

 
2,644,250

SYNNEX Corporation stockholders’ equity:
 
 
 
Preferred stock
—

 
—

Common stock
41

 
40

Additional paid-in capital
432,949

 
411,687

Treasury stock
(61,631
)
 
(51,287
)
Accumulated other comprehensive income (loss)
(64,611
)
 
(55,237
)
Retained earnings
1,619,997

 
1,494,178

Total SYNNEX Corporation stockholders’ equity
1,926,745

 
1,799,381

Noncontrolling interest
38

 
516

Total equity
1,926,783

 
1,799,897

Total liabilities and equity
$
4,821,936

 
$
4,444,147



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, 2016
 
August 31, 2015
 
August 31, 2016
 
August 31, 2015
Revenue:
 
 
 
 
 
 
 
Products
$
3,267,287

 
$
2,976,901

 
$
9,099,762

 
$
8,756,532

Services
402,527

 
355,636

 
1,075,173

 
1,032,248

Total revenue
3,669,814

 
3,332,537

 
10,174,935

 
9,788,780

Cost of revenue:
 
 
 
 
 
 
 
Products
(3,096,529
)
 
(2,816,516
)
 
(8,608,518
)
 
(8,264,527
)
Services
(247,328
)
 
(225,243
)
 
(662,238
)
 
(645,198
)
Gross profit
325,957

 
290,778

 
904,179

 
879,055

Selling, general and administrative expenses
(227,935
)
 
(209,499
)
 
(655,225
)
 
(629,468
)
Operating income
98,022

 
81,279

 
248,954

 
249,587

Interest expense and finance charges, net
(7,517
)
 
(6,794
)
 
(20,245
)
 
(19,050
)
Other income (expense), net
(378
)
 
(150
)
 
4,605

 
(1,667
)
Income before income taxes
90,127

 
74,335

 
233,314

 
228,870

Provision for income taxes
(31,426
)
 
(26,164
)
 
(83,619
)
 
(82,487
)
Net income
58,701

 
48,171

 
149,695

 
146,383

Net (income) loss attributable to noncontrolling interest
3

 
—

 
(67
)
 
(15
)
Net income attributable to SYNNEX Corporation
$
58,704

 
$
48,171

 
$
149,628

 
$
146,368

Earnings per share attributable to SYNNEX Corporation:
 
 
 
 
 
 
 
Basic
$
1.48

 
$
1.22

 
$
3.77

 
$
3.71

Diluted
$
1.47

 
$
1.21

 
$
3.75

 
$
3.68

Weighted-average common shares outstanding:
 
 


 
 
 
 
Basic
39,346

 
39,082

 
39,285

 
39,035

Diluted
39,534

 
39,328

 
39,492

 
39,325

Cash dividends declared per share
$
0.20

 
$
0.13

 
$
0.60

 
$
0.38

 



SYNNEX Corporation
Segment Information
(currency in thousands)
(unaudited)
 
Three Months Ended
 
Nine Months Ended
 
August 31, 2016
 
August 31, 2015
 
August 31, 2016
 
August 31, 2015
Revenue:
 
 
 
 
 
 
 
  Technology Solutions
$
3,267,354

 
$
2,976,996

 
$
9,099,969

 
$
8,756,841

  Concentrix
406,715

 
359,464

 
1,087,332

 
1,043,031

  Inter-segment elimination
(4,255
)
 
(3,923
)
 
(12,366
)
 
(11,092
)
  Consolidated
$
3,669,814

 
$
3,332,537

 
$
10,174,935

 
$
9,788,780

 
 
 
 
 
 
 
 
Operating income:
 
 
 
 
 
 
 
  Technology Solutions
$
79,410

 
$
71,032

 
$
222,896

 
$
222,512

  Concentrix
18,564

 
10,129

 
25,855

 
26,719

  Inter-segment elimination
48

 
118

 
203

 
356

  Consolidated
$
98,022

 
$
81,279

 
$
248,954

 
$
249,587








SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(currency and share amounts in thousands, except for per share amounts)
 
Three Months Ended
 
Nine Months Ended
 
August 31, 2016
 
August 31, 2015
 
August 31, 2016
 
August 31, 2015
Operating income and Operating margin
 
 
 
 
 
 
 
Consolidated
 
 
 
 
 
 
 
Revenue
$
3,669,814

 
$
3,332,537

 
$
10,174,935

 
$
9,788,780

 
 
 
 
 
 
 
 
GAAP operating income
$
98,022

 
$
81,279

 
$
248,954

 
$
249,587

Acquisition and integration expenses
2,358

 
2,039

 
3,928

 
8,071

Restructuring costs
258

 
—

 
4,255

 
—

Amortization of intangibles
13,011

 
13,716

 
36,509

 
41,771

Non-GAAP operating income
$
113,649

 
$
97,034

 
$
293,646

 
$
299,429

Depreciation
15,375

 
13,025

 
46,549

 
35,305

Adjusted EBITDA
$
129,024

 
$
110,059

 
$
340,195

 
$
334,734

 
 
 
 
 
 
 
 
GAAP operating margin
2.67
%
 
2.44
%
 
2.45
%
 
2.55
%
Non-GAAP operating margin
3.10
%
 
2.91
%
 
2.89
%
 
3.06
%
 
 
 
 
 
 
 
 
Technology Solutions
 
 
 
 
 
 
 
Revenue
$
3,267,354

 
$
2,976,996

 
$
9,099,969

 
$
8,756,841

 
 
 
 
 
 
 
 
GAAP operating income
$
79,410

 
$
71,032

 
$
222,896

 
$
222,512

Amortization of intangibles
674

 
651

 
1,987

 
1,978

Non-GAAP operating income
$
80,084

 
$
71,683

 
$
224,883

 
$
224,490

Depreciation
3,558

 
3,144

 
10,446

 
9,168

Adjusted EBITDA
$
83,642

 
$
74,827

 
$
235,329

 
$
233,658

 
 
 
 
 
 
 
 
GAAP operating margin
2.43
%
 
2.39
%
 
2.45
%
 
2.54
%
Non-GAAP operating margin
2.45
%
 
2.41
%
 
2.47
%
 
2.56
%
 
 
 
 
 
 
 
 
Concentrix
 
 
 
 
 
 
 
Revenue
$
406,715

 
$
359,464

 
$
1,087,332

 
$
1,043,031

 
 
 
 
 
 
 
 
GAAP operating income
$
18,564

 
$
10,129

 
$
25,855

 
$
26,719

Acquisition and integration expenses
2,358

 
2,039

 
3,928

 
8,071

Restructuring costs
258

 
—

 
4,255

 
—

Amortization of intangibles
12,337

 
13,065

 
34,522

 
39,793

Non-GAAP operating income
$
33,517

 
$
25,233

 
$
68,560

 
$
74,583

Depreciation
11,866

 
10,001

 
36,306

 
26,494

Adjusted EBITDA
$
45,383

 
$
35,234

 
$
104,866

 
$
101,077

 
 
 
 
 
 
 
 
GAAP operating margin
4.56
%
 
2.82
%
 
2.38
%
 
2.56
%
Non-GAAP operating margin
8.24
%
 
7.02
%
 
6.31
%
 
7.15
%



SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(currency and share amounts in thousands, except for per share amounts)
 
Three Months Ended
 
Nine Months Ended
 
August 31, 2016
 
August 31, 2015
 
August 31, 2016
 
August 31, 2015
Net income
 
 
 
 
 
 
 
Net income attributable to SYNNEX Corporation
$
58,704

 
$
48,171

 
$
149,628

 
$
146,368

Acquisition and integration expenses
2,358

 
2,039

 
3,928

 
8,071

Restructuring costs
258

 
—

 
4,255

 
—

Amortization of intangibles
13,011

 
13,716

 
36,509

 
41,771

Income taxes related to the above (1)
(5,423
)
 
(5,541
)
 
(16,017
)
 
(17,964
)
Non-GAAP net income attributable to SYNNEX Corporation
$
68,908

 
$
58,385

 
$
178,303

 
$
178,246

 
 
 
 
 
 
 
 
Diluted earnings per common share ("EPS") (2)
 
 
 
 
 
 
 
Net income attributable to SYNNEX Corporation
$
58,704

 
$
48,171

 
$
149,628

 
$
146,368

Less: net income allocated to participating securities
(589
)
 
(525
)
 
(1,559
)
 
(1,731
)
Net income attributable to SYNNEX Corporation common stockholders
58,115

 
47,646

 
148,069

 
144,637

Acquisition and integration expenses   attributable to SYNNEX Corporation common stockholders
2,337

 
2,018

 
3,893

 
7,979

Restructuring costs attributable to SYNNEX Corporation common stockholders
258

 
—

 
4,217

 
—

Amortization of intangibles attributable to SYNNEX Corporation common stockholders
12,871

 
13,567

 
36,108

 
41,278

Income taxes related to the above attributable to SYNNEX Corporation common stockholders (1)
(5,366
)
 
(5,482
)
 
(15,843
)
 
(17,755
)
Non-GAAP net income attributable to SYNNEX Corporation common stockholders
$
68,215

 
$
57,749

 
$
176,444

 
$
176,139

 
 
 
 
 
 
 
 
Weighted-average number of common shares - diluted:
39,534

 
39,328

 
39,492

 
39,325

 
 
 
 
 
 
 
 
Diluted EPS (2)
$
1.47

 
$
1.21

 
$
3.75

 
$
3.68

Acquisition and integration expenses
0.06

 
0.05

 
0.10

 
0.20

Restructuring costs
0.01

 
—

 
0.11

 
—

Amortization of intangibles
0.33

 
0.34

 
0.91

 
1.05

Income taxes related to the above (1)
(0.14
)
 
(0.14
)
 
(0.40
)
 
(0.46
)
Non-GAAP Diluted EPS (3)
$
1.73

 
$
1.47

 
$
4.47

 
$
4.48





SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(amounts in millions, except for per share amounts)
 
Forecast
 
Three Months Ending November 30, 2016
 
Low
 
High
Net income
 
 
 
Net income attributable to SYNNEX Corporation
$
64.8

 
$
66.8

Acquisition, integration and restructuring expenses
12.0

 
12.0

Amortization of intangibles
15.9

 
15.9

Income taxes related to the above (1)
(10.0
)
 
(10.0
)
Non-GAAP net income attributable to SYNNEX Corporation
$
82.7

 
$
84.7

 
 
 
 
Diluted EPS (2)
$
1.62

 
$
1.66

Acquisition, integration and restructuring expenses
0.30

 
0.30

Amortization of intangibles
0.40

 
0.40

Income taxes related to the above (1)
(0.25
)
 
(0.25
)
Non-GAAP Diluted EPS (3)
$
2.06

 
$
2.11

(1) The tax effect of the non-GAAP adjustments was calculated using the applicable effective tax rate during the periods.
(2) Diluted EPS for all periods presented is calculated using the two-class method. Unvested restricted stock awards granted to employees and non-employee directors are considered participating securities.  For purposes of calculating Diluted EPS, Net income allocated to participating securities was approximately 1.0% of the Net income attributable to SYNNEX Corporation for both the three and nine months ended August 31, 2016 , and approximately 1.1% and 1.2% for the three and nine months ended August 31, 2015 , respectively. Net income allocated to participating securities is approximately 1.0% of the Net income attributable to SYNNEX Corporation for the three months ending November 30, 2016.
(3) The sum of the components of Non-GAAP Diluted EPS may not agree to totals, as presented, due to rounding.



SYNNEX Corporation
Calculation of Financial Metrics
(currency in thousands)

Return on Invested Capital
 
August 31, 2016
 
August 31, 2015
ROIC
 
 
 
Operating income (Trailing fiscal four quarters)
$
353,918

 
$
349,261

Income taxes on operating income (1)
(127,744
)
 
(127,403
)
Operating income after taxes
226,174

 
221,858

 
 
 
 
Total borrowings, excluding book overdraft (five quarters average)
$
736,354

 
$
858,888

Total equity (five quarters average)
1,834,574

 
1,688,416

Less: U.S. cash and cash equivalents (five quarters average)
(223,772
)
 
(44,114
)
Total invested capital
2,347,156

 
2,503,190

 
 
 
 
ROIC
9.6
%
 
8.9
%
 
 
 
 
Adjusted ROIC
 
 
 
Non-GAAP operating income (Trailing fiscal four quarters)
$
413,634

 
$
424,292

Income taxes on Non-GAAP operating income (1)
(149,334
)
 
(154,959
)
Non-GAAP operating income after taxes
264,300

 
269,333

 
 
 
 
Total invested capital
$
2,347,156

 
$
2,503,190

Tax effected impact of acquisition and integration expenses, restructuring costs and amortization of intangibles (five quarters average)
147,387

 
106,851

Total Non-GAAP invested capital
2,494,543

 
2,610,041

 
 
 
 
Adjusted ROIC
10.6
%
 
10.3
%
(1) Income taxes on operating income was calculated using the applicable effective tax rates during the periods presented.


Debt to Capitalization

 
 
August 31, 2016
 
August 31, 2015
Total borrowings, excluding book overdraft
(a)
$
806,025

 
$
737,511

Total equity
(b)
1,926,783

 
1,749,785

Debt to capitalization
(a)/((a)+(b))
29.5
%
 
29.7
%




SYNNEX Corporation
Cash Conversion Cycle
(currency in thousands)

 
 
Three Months Ended
 
 
August 31, 2016
 
August 31, 2015
Days sales outstanding
 
 
 
 
Revenue (products and services)
(a)
$
3,669,814

 
$
3,332,537

Accounts receivable, including receivable from related parties
(b)
1,651,173

 
1,579,853

Days sales outstanding
(b)/((a)/the number of days during the period)
41

 
44

 
 
 
 
 
Days inventory outstanding
 
 
 
 
Cost of revenue (products and services)
(c)
$
3,343,857

 
$
3,041,759

Inventories
(d)
1,568,697

 
1,326,751

Days inventory outstanding
(d)/((c)/the number of days during the period)
43

 
40

 
 
 
 
 
Days payable outstanding
 
 
 
 
Cost of revenue (products and services)
(e)
$
3,343,857

 
$
3,041,759

Accounts payable, including payable to related parties
(f)
1,531,664

 
1,275,467

Days payable outstanding
(f)/((e)/the number of days during the period)
42

 
39

 
 
 
 
 
Cash conversion cycle
 
42

 
45