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TD Synnex Annual Report, Year Ended Nov 30, 2003

Filing Date
Filed February 19, 2004
Period End
November 30, 2003
Security
SNX
In the record · 2016–202610-K1110-Q338-K163

SNX filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 163 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Sep ’17Sep ’17
  2. Leadership change8-K · Jul ’19Jul ’19
  3. Leadership change8-K · Sep ’21Sep ’21
  4. Material agreement8-K · Oct ’25Oct ’25

01—Abstract

Summary

Summary of the 10-K filed February 19, 2004. Cited figures are marked; the original filing is the authoritative source.

SYNNEX Corporation, a global information technology supply chain services company headquartered in Fremont, California, reported fiscal 2003 (year ended November 30, 2003) revenue of $4.13 billiona, up 9.5% from $3.77 billion in fiscal 2002, and net income of $29,996 thousand, or $1.22 per diluted share.

Distribution revenue rose 14.8% to $3.90 billionb, driven by market share gains, the Gates/Arrow acquisition and the start of Mexico operations, while contract assembly revenue fell 38.2% to $230.5 million as demand from Sun Microsystems declined. Gross margin was 4.6% and operating margin 1.4%, with management expecting gross margins may decrease further in future periods. The company completed its initial public offering on December 1, 2003, selling 3,577,500 shares by the company and receiving net proceeds of approximately $48.8 million including the over-allotment option.

MiTAC International and its affiliates held about 77%c of the company after the offering, and executive officers, directors and principal stockholders together owned about 78%, giving them control over matters requiring stockholder approval. HP was the largest OEM supplier at 30.7% of fiscal 2003 revenue.

Investors should note the company's heavy reliance on working capital financing: operating cash flow was negative $12.7 milliond in fiscal 2003, and short- and long-term borrowings reached $77.6 million, while $210.0 million of receivables were sold under a securitization program with General Electric Capital Corporation. The company also disclosed $9.4 million of inventory stolen in warehouse break-ins, substantially recovered from insurance in January 2004, and $4.3 million of fourth-quarter foreign currency losses tied to forward contracts not executed under company policy.

02—Key points

Key Highlights

  1. Revenue of $4.13 billion in fiscal 2003, up 9.5% from $3.77 billion in fiscal 2002
  2. Net income of $29.996 million, or $1.22 per diluted share, versus $28.0 million in fiscal 2002
  3. Distribution revenue up 14.8% to $3.90 billion; contract assembly revenue down 38.2% to $230.5 million
  4. Gross margin of 4.6% and income from operations of $57.9 million (1.4% of revenue)
  5. IPO completed December 1, 2003 with net proceeds of approximately $48.8 million; company still controlled by MiTAC International affiliates (about 77%)
  6. Operating cash flow was negative $12.7 million in fiscal 2003, with $77.6 million of borrowings and $210.0 million of receivables sold under a securitization program
  7. HP accounted for 30.7% of fiscal 2003 revenue; Sun Microsystems was the primary contract assembly customer at 97.5% of assembly revenue

03—Questions

Frequently Asked Questions

  1. How did SYNNEX perform financially in fiscal 2003?

    Revenue rose 9.5% to $4.13 billion and net income rose to $29.996 million from $28.0 million, or $1.22 per diluted share. Distribution grew strongly on market share gains and the Gates/Arrow acquisition, while contract assembly declined as Sun Microsystems demand fell.

  2. What are the main risks to margins?

    Gross margin was 4.6% and the company said it may decrease further due to revenue mix shifts toward lower-margin distribution, competition, economic softness and changes in OEM supplier terms. Foreign currency transaction losses of $3.7 million in fiscal 2003 also hit other expense.

  3. Who controls the company after the IPO?

    MiTAC International and its affiliates beneficially owned about 77% of common stock as of December 1, 2003, and executive officers, directors and principal stockholders together owned about 78%. The filing states this concentration allows them to control all matters requiring stockholder approval.

  4. How is the company financing its working capital?

    The company relies on debt, accounts receivable flooring programs and a securitization program with General Electric Capital Corporation, under which $210.0 million of receivables were sold and held at November 30, 2003. Total short- and long-term borrowings were $77.6 million, and the company stated its cash flows and IPO proceeds should be sufficient for the next 12 months.

  5. How concentrated is the company's business?

    HP represented 30.7% of fiscal 2003 revenue, and HP's agreement with the company runs until May 31, 2005 unless terminated earlier. Sun Microsystems accounted for 97.5% of contract assembly revenue in fiscal 2003, and the company relies on MiTAC International for certain manufacturing services under informal arrangements.

04—Continue

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