01—Abstract
Summary
Summary of the 10-K filed January 24, 2023. Cited figures are marked; the original filing is the authoritative source.
TD SYNNEX Corporation's fiscal 2022 annual report (fiscal year ended November 30, 2022) shows revenue of $62.34 billiona, up from $31.61 billion in fiscal 2021, driven primarily by the Merger with Tech Data completed on September 1, 2021.
Gross profit rose to $3.90 billionb (gross margin 6.26% versus 5.98%), and operating income increased to $1.05 billion (operating margin 1.69% versus 1.97%). Net income was $651.3 million, or $6.77 per diluted share, compared with $395.1 million, or $6.24 per diluted share, in fiscal 2021. Management's non-GAAP diluted EPS was $11.94 for fiscal 2022, versus $9.40 in the prior year.
Acquisition, integration and restructuring costs totaled $222.3 million, and amortization of intangibles rose to $299.2 millionc. The balance sheet reflects a larger, more leveraged business. Total assets were $29.73 billion and total borrowings were approximately $4.1 billion, including $2.5 billion of Senior Notes and a $1.4 billion term loan.
Cash and cash equivalents declined to $522.6 milliond from $994.0 million. Net cash used in operating activities was $49.6 million, reflecting growth in inventories and accounts receivable, and the cash conversion cycle lengthened to 23 days from 14 days. The company disclosed $3.5 billion of unused commitments under its revolving credit facility as of November 30, 2022.
Internal control over financial reporting was reported as effective, with KPMG LLP as auditor. Shareholder returns continued during the year. Dividends declared totaled $1.20 per share for fiscal 2022, and the Board announced a $0.35 quarterly dividend in January 2023.
Share repurchases of $125.0 million were made during fiscal 2022, and in January 2023 the Board authorized a new three-year $1.0 billion repurchase program replacing the prior $400.0 million program. Apollo Global Management owned approximately 45% of common stock and MiTAC Holdings approximately 9.7%, a concentration of ownership the filing identifies as a factor that could influence stockholder votes and delay a change in control.
02—Key points
Key Highlights
- Revenue reached $62.34 billion in fiscal 2022, up from $31.61 billion, with the filing attributing about $28 billion of the increase to the Merger with Tech Data.
- Net income was $651.3 million ($6.77 diluted EPS) versus $395.1 million ($6.24) in fiscal 2021; non-GAAP diluted EPS was $11.94 versus $9.40.
- Gross margin improved to 6.26% from 5.98%, primarily due to product and customer mix, while operating margin declined to 1.69% from 1.97%.
- Operating cash flow was negative $49.6 million, driven by higher inventories and receivables, and the cash conversion cycle lengthened to 23 days from 14 days.
- Total borrowings were approximately $4.1 billion, and the company reported $3.5 billion in unused commitments under its TD SYNNEX revolving credit facility.
- Dividends of $1.20 per share were declared for fiscal 2022, a $0.35 dividend was announced in January 2023, and a new $1.0 billion share repurchase program was authorized.
- Customer and supplier concentration persists: one customer accounted for 10% of revenue, and HP Inc. (10%) and Apple Inc. (11%) were significant OEM suppliers.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, TD Synnex kept $0.01.
- Revenue$62.34B100.0%
- Cost of revenue−$58.44B93.7%
- Gross profit$3.90B6.3%
- Operating costs−$2.85B4.6%
- Operating income$1.05B1.7%
- Interest, other & tax−$399.6M0.6%
- Net income$651.3M1.0%
Where FY2022 revenue went
$62.34B- Cost of revenue: $58.44B, 94% of revenue
- Net income: $651.3M, 1.0% of revenue
- SG&A: $2.63B, 4.2% of revenue
- Interest, other & tax: $399.6M, 0.6% of revenue
Kept 1.0% as net incomeNet income $651.3M · 1.0%Interest, other & tax $399.6M · 0.6%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed January 24, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $62.34B$31.61B | +97.2% |
| Cost of Revenue | $58.44B$29.72B | +96.6% |
| Gross Profit | $3.90B$1.89B | +106.4% |
| SG&A Expenses | $2.63B$1.15B | +127.6% |
| Operating Income | $1.05B$623.22M | +68.6% |
| Net Income | $651.31M$395.07M | +64.9% |
| EPS (Basic) | $6.79$6.28 | +8.1% |
| EPS (Diluted) | $6.77$6.24 | +8.5% |
| Shares Outstanding (Basic) | 95.22M62.24M | +53.0% |
| Shares Outstanding (Diluted) | 95.51M62.70M | +52.3% |
05—Questions
Frequently Asked Questions
How much did the Tech Data Merger contribute to TD SYNNEX's results?
The filing states that revenue increased primarily due to sales resulting from the Merger of approximately $28 billion, along with broad-based demand. Tech Data revenues included in the consolidated statements were estimated at about $38 billion for fiscal 2022 and $10 billion for fiscal 2021.
Why did operating cash flow turn negative in fiscal 2022?
Net cash used in operating activities was $49.6 million, primarily due to increases in inventories and accounts receivable driven by business growth, partially offset by higher accounts payable from payment timing and increased net income. Inventories rose to $9.07 billion from $6.64 billion.
How leveraged is the company and what debt obligations does it have?
As of November 30, 2022, total outstanding borrowings were approximately $4.1 billion, including $2.5 billion of Senior Notes and $1.4 billion of term loan debt. The company was in compliance with its financial covenants, and it had $3.5 billion of unused commitments under its revolving credit facility.
What are the main shareholder return actions announced?
Fiscal 2022 dividends declared totaled $1.20 per share, and the Board announced a $0.35 per share dividend payable January 27, 2023. Repurchases of $125.0 million were made in fiscal 2022, and in January 2023 the Board authorized a new three-year $1.0 billion program replacing the $400.0 million program.
Who are the significant shareholders and what risk do they pose?
As of November 30, 2022, Apollo Global Management and its affiliates owned approximately 45% of common stock, and MiTAC Holdings and its affiliates owned approximately 9.7%. The filing states that this concentration could allow these holders to influence stockholder votes and could delay or prevent a change in control, and that future sales of large share blocks could affect the stock price.
06—Continue