01—Abstract
Summary
Summary of the 10-K filed January 27, 2012. Cited figures are marked; the original filing is the authoritative source.
SYNNEX Corporation, now TD SYNNEX Corporation, reported fiscal 2011 (year ended November 30, 2011) revenue of $10.41 billiona, up from $8.61 billion in fiscal 2010, with net income attributable to SYNNEX Corporation of $150.3 million, or $4.08 diluted EPS from continuing operations, compared with $127.9 million in fiscal 2010.
Gross profit rose to $630.5 millionb (6.06% of revenue, versus 5.71% in 2010), and income from continuing operations before non-operating items was $256.2 million. The company operates two segments: distribution services, which generated $10.28 billion of revenue, and global business services (GBS), a business process outsourcing unit with $163.4 million of revenue. Growth in fiscal 2011 was aided by the acquisition of Marubeni Infotec Corporation (now SYNNEX Infotec Corporation) in Japan, which contributed approximately $1.22 billion of revenue, and by several GBS acquisitions.
The balance sheet showed total assets of $2.83 billionc and total equity of $1.17 billion as of November 30, 2011. Cash and cash equivalents were $67.6 million, and total borrowings were $383.0 million, including $143.75 million principal of 4.0% Convertible Senior Notes due 2018. Net cash provided by operating activities was $219.2 million, while net cash used in investing activities was $126.4 million, including $40.2 million of capital expenditures.
The company has not paid cash dividends since its IPO, and its anti-dilution repurchase program authorizes up to $65 milliond of share repurchases over three years. MiTAC International and its affiliates owned approximately 29% of common stock, and Hewlett-Packard products represented approximately 35% of fiscal 2011 revenue, which the filing identifies as the main concentration risk.
02—Key points
Key Highlights
- Revenue increased to $10.41 billion in fiscal 2011 from $8.61 billion in fiscal 2010, and net income attributable to SYNNEX Corporation rose to $150.3 million from $127.9 million.
- Gross margin improved to 6.06% of revenue from 5.71% in fiscal 2010, supported by product and service mix changes, higher vendor rebates, and GBS growth.
- Diluted EPS from continuing operations was $4.08 in fiscal 2011, compared with $3.26 in fiscal 2010.
- The Marubeni Infotec acquisition in Japan contributed approximately $1.22 billion of fiscal 2011 revenue, and the GBS segment grew to $163.4 million of revenue.
- Operating cash flow was $219.2 million in fiscal 2011, compared with a use of $65.9 million in fiscal 2010, driven by lower accounts receivable and inventory.
- Total borrowings were $383.0 million at November 30, 2011, and the company had $67.6 million of cash and cash equivalents.
- HP products represented approximately 35% of fiscal 2011 revenue, and MiTAC International and its affiliates owned approximately 29% of common stock.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, TD Synnex kept $0.01.
- Revenue$10.41B100.0%
- Cost of revenue−$9.78B93.9%
- Gross profit$630.5M6.1%
- Operating costs−$374.3M3.6%
- Operating income$256.2M2.5%
- Interest, other & tax−$105.9M1.0%
- Net income$150.3M1.4%
Where FY2011 revenue went
$10.41B- Cost of revenue: $9.78B, 94% of revenue
- Net income: $150.3M, 1.4% of revenue
- SG&A: $374.3M, 3.6% of revenue
- Interest, other & tax: $105.9M, 1.0% of revenue
Kept 1.4% as net incomeNet income $150.3M · 1.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed January 27, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $10.41B$8.61B | +20.8% |
| Cost of Revenue | $9.78B$8.12B | +20.4% |
| Gross Profit | $630.50M$491.62M | +28.3% |
| SG&A Expenses | $374.27M$292.47M | +28.0% |
| Operating Income | $256.23M$199.15M | +28.7% |
| Interest Expense | $28.81M$22.59M | +27.5% |
| Net Income | $150.33M$127.95M | +17.5% |
| EPS (Basic) | $4.20$3.68 | +14.1% |
| EPS (Diluted) | $4.08$3.58 | +14.0% |
| Shares Outstanding (Basic) | 35.83M34.74M | +3.1% |
| Shares Outstanding (Diluted) | 36.83M35.76M | +3.0% |
05—Questions
Frequently Asked Questions
How did SYNNEX perform financially in fiscal 2011?
Revenue rose to $10.41 billion from $8.61 billion, and net income attributable to SYNNEX Corporation increased to $150.3 million from $127.9 million. Diluted EPS from continuing operations was $4.08, up from $3.26.
What drove the improvement in gross profit?
The filing attributes the 35 basis point increase in gross margin to favorable changes in product and service mix, higher vendor rebates in the distribution segment, and growth in the GBS segment, along with fee-for-service transitions in the fourth quarter.
How much debt does SYNNEX carry?
Total borrowings were $383.0 million as of November 30, 2011, including $143.75 million principal of 4.0% Convertible Senior Notes due 2018, which the company intends to settle in cash at a future date.
Does SYNNEX pay dividends or repurchase shares?
The company has not declared or paid cash dividends since its IPO and intends to retain earnings. Its board approved an anti-dilution share repurchase program of up to $65 million over three years, and 62,300 shares were repurchased in October 2011 at $26.89 per share.
What are the main concentration risks?
HP products accounted for approximately 35% of fiscal 2011 revenue, and the filing notes that HP's agreement is short-term and terminable without cause on short notice. MiTAC International and its affiliates owned approximately 29% of common stock, which gives them significant influence over stockholder matters.
06—Continue