PR Newswire | Sep 29, 2020 04:16PM EDT

09/29 15:15 CDT

SYNNEX Corporation Reports Third Quarter Fiscal 2020 Results FREMONT, Calif., Sept. 29, 2020

FREMONT, Calif., Sept. 29, 2020 /PRNewswire/ -- SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal third quarter ended August 31, 2020.

Q3 FY20 Q3 FY19 Net change

Revenue ($M) $ 6,465 $ 6,204 4.2 %

Operating income ($M) $ 209.1 $ 208.9 0.1 %

Non-GAAP operating income ($M)^(1) $ 260.1 $ 270.5 -3.8 %

Operating margin 3.24 % 3.37 % -13 bps

Non-GAAP operating margin^(1) 4.02 % 4.36 % -34 bps

Net income ($M) $ 134.5 $ 123.1 9.2 %

Non-GAAP net income ($M)^(1) $ 172.6 $ 169.2 2.0 %

Diluted earnings per common share ("EPS") $ 2.60 $ 2.40 8.3 %

Non-GAAP Diluted EPS^(1) $ 3.33 $ 3.30 0.9 %

"Our strong third quarter performance is a reflection of our resiliency, our ongoing focus on serving our partners and clients and the continued dedication of our associates on the growth and improvement of our business during these unprecedented times," said Dennis Polk, SYNNEX President and CEO. "We remain on track with the proposed spin-off of Concentrix and believe this will result in incremental value for all of our stakeholders."

Third Quarter Fiscal 2020 Highlights

* Technology Solutions: Revenue was $5.3 billion, up 5.1% over the prior fiscal year third quarter. Operating income was $132 million, or 2.5% of segment revenue, compared to $139 million, or 2.8% of segment revenue, in the prior fiscal year third quarter. Non-GAAP operating income was $142 million, or 2.7% of segment revenue, compared to $150 million, or 3.0% of segment revenue, in the prior fiscal year third quarter. * Concentrix: Revenue was $1.2 billion, up 0.2% from the prior fiscal year third quarter. Operating income was $77 million, or 6.6% of segment revenue, compared to $70 million, or 6.0% of segment revenue in the prior fiscal year third quarter. Non-GAAP operating income was $118 million, or 10.1% of segment revenue, compared to $121 million, or 10.4% of segment revenue, in the prior fiscal year third quarter. * The trailing fiscal four quarters Return on Invested Capital ("ROIC") was 9.1% compared to 8.6% in the prior fiscal year third quarter. The adjusted trailing fiscal four quarters ROIC was 10.7%. * Cash generated from operations was approximately $321 million for the quarter.

Fourth Quarter Fiscal 2020 Outlook

The following statements are based on SYNNEX current expectations for the fiscal 2020 fourth quarter. Non-GAAP financial measures exclude the impact of acquisition-related and integration expenses, the amortization of intangibles and the related tax effects thereon. These statements are forward-looking and actual results may differ materially.

* Revenue is expected to be in the range of $6.45 billion to $6.65 billion. * Net income is expected to be in the range of $153.0 million to $166.0 million and on a non-GAAP basis, net income is expected to be in the range of $190.5 million to $203.5 million. * Diluted earnings per share is expected to be in the range of $2.95 to $3.20 and on a non-GAAP basis, diluted earnings per share is expected to be in the range of $3.68 to $3.93, based on estimated outstanding diluted weighted average shares of 51.5 million. * After-tax amortization of intangibles is expected to be $35.2 million, or $0.68 per share. * After-tax acquisition-related and integration expense is expected to be $2.3 million, or $0.04 per share.

Conference Call and Webcast

SYNNEX will host a conference call to discuss third quarter fiscal 2020 results:

Tuesday, September 29, 20202:00 PM (PT) / 5:00 PM (ET)Conference ID 8016677Live call (866) 393-4306 or (763) 488-9145 (Int'l)

Live audio webcast of the earnings call will be accessible at ir.synnex.com, and a replay of the webcast will be available following the call.

About SYNNEX

SYNNEX Corporation (NYSE: SNX) is a Fortune 200 corporation and a leading business process services company, providing a comprehensive range of distribution, logistics and integration services for the technology industry and providing outsourced services focused on customer engagement to a broad range of enterprises. SYNNEX distributes a broad range of information technology systems and products, and also provides systems design and integration solutions. Founded in 1980, SYNNEX Corporation operates in numerous countries throughout North and South America, Asia-Pacific and Europe. Additional information about SYNNEX may be found online at synnex.com.

About Concentrix

Concentrix, a wholly-owned subsidiary of SYNNEX Corporation (NYSE: SNX), is a technology-enabled global business services company specializing in customer engagement and improving business performance for some of the world's best brands. Every day, from more than 40 countries and across 6 continents, our staff delivers next generation customer experience and helps companies better connect with their customers. We create better business outcomes and help differentiate our clients through technology, design, data, process, and people. Concentrix provides services to clients in five primary industry verticals: technology and consumer electronics; communications and media; retail, travel and ecommerce; banking, financial services and insurance; and healthcare. We are Different by Design. Visit concentrix.com to learn more.

(1)Use of Non-GAAP Financial Information

In addition to the financial results presented in accordance with GAAP, SYNNEX also uses adjusted selling, general and administrative expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per share, which are non-GAAP financial measures that exclude acquisition-related and integration expenses, restructuring costs, the amortization of intangible assets and the related tax effects thereon. The Company also uses adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") which excludes other income (expense), net and acquisition-related and integration expenses. In fiscal year 2019, non-GAAP net income and non-GAAP diluted earnings per share also exclude gains upon the settlement of contingent consideration and a contingent gain related to the Westcon-Comstor Americas acquisition. In fiscal year 2018, non-GAAP net income and non-GAAP diluted earnings per share also exclude the impact of an adjustment relating to the enactment of the Tax Cuts and Jobs Act of 2017. This adjustment includes a transition tax on accumulated overseas profits and the remeasurement of deferred tax assets and liabilities to the new U.S. tax rate.

SYNNEX' acquisition activities have resulted in the recognition of intangible assets which consist primarily of customer relationships, vendor lists and technology. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in the Company's statements of operations within each segment. Although intangible assets contribute to the Company's revenue generation, the amortization of intangible assets does not directly relate to the sale of the Company's products and the services performed for the Company's clients. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of the Company's acquisition activity. Accordingly, the Company believes excluding the amortization of intangible assets, along with the other non-GAAP adjustments which neither relate to the ordinary course of the Company's business nor reflect the Company's underlying business performance, enhances the Company's and investors' ability to compare the Company's past financial performance with its current performance and to analyze underlying business performance and trends. Intangible asset amortization excluded from the related non-GAAP financial measure represents the entire amount recorded within the Company's GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised.

Additionally, SYNNEX refers to revenue 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 SYNNEX' business performance. Financial results adjusted for currency are calculated by translating current period activity in the transaction currency using the comparable prior year periods' currency conversion rate. Generally, when the dollar either strengthens or weakens against other currencies, revenue at constant currency rates or adjusting for currency will be higher or lower than revenue 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 borrowings (excluding book overdraft) and equity, net of cash and cash equivalents in the United States. Adjusted ROIC is calculated by excluding the tax effected impact of acquisition-related and integration expenses, restructuring costs and the amortization of intangibles from operating income and equity and the impact of the contingent consideration gain and a contingent gain and the U.S. tax reform adjustment on equity.

SYNNEX also uses free cash flow, which is cash flow from operating activities, reduced by purchases of property and equipment. SYNNEX uses free cash flow to conduct and evaluate its business because, although it is similar to cash flow from operations, SYNNEX believes it is a more conservative measure of cash flows since purchases of fixed assets are a necessary component of ongoing operations. Free cash flow reflects an additional way of viewing SYNNEX' liquidity that, when viewed with its GAAP results, provides a more complete understanding of factors and trends affecting its cash flows. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not incorporate payments for business acquisitions. Therefore, SYNNEX believes it is important to view free cash flow as a complement to its entire consolidated statements of cash flows.

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. 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, as well as for planning and forecasting in future periods. Management believes these 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. As 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 SYNNEX' consolidated financial statements prepared in accordance with GAAP. A reconciliation of SYNNEX' GAAP to non-GAAP financial information is set forth in the supplemental information section at the end of this press release.

Safe Harbor Statement

Statements in this news release regarding SYNNEX Corporation that 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 forward-looking statements include, but are not limited to, statements regarding the proposed spin-off of Concentrix, including status, timing, what shareholders will own immediately following the spin-off and shareholder value; our expectations and outlook for the fiscal 2020 fourth quarter as to revenue, net income, non-GAAP net income, diluted earnings per share, non-GAAP diluted earnings per share, outstanding diluted weighted average shares, tax rate, after-tax amortization of intangibles, after-tax acquisition-related and integration expenses; and the anticipated benefits of the non-GAAP financial measures.

The forward-looking statements 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: the impact of COVID-19 or coronavirus, or other pandemics, and the impact of related governmental, individual and business responses, including the ability of our staff to travel to work, our ability to maintain adequate inventories, delivery capabilities, the impact on our customers and supply chain, and the impact on demand in general; general economic and market conditions; the ability to realize the anticipated benefits of the previously-announced separation of SYNNEX and Concentrix and the disruption such transaction might cause to our business; negative effects of the transaction announcement or the consummation of the proposed separation on the market price of the capital stock of SYNNEX; the unfavorable outcome of any legal proceedings that have been or may be instituted against us; the ability to retain key personnel; 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, 2019 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 does not intend to update information contained in this press release, except as required by law.

Copyright 2020 SYNNEX Corporation. All rights reserved. SYNNEX, the SYNNEX Logo, CONCENTRIX, and all other SYNNEX company, product and services names and slogans are trademarks or registered trademarks of SYNNEX Corporation. SYNNEX, the SYNNEX Logo, and CONCENTRIX Reg. U.S. Pat. & Tm. Off. DIFFERENT BY DESIGN is a trademark or registered trademark of Concentrix Corporation. Other names and marks are the property of their respective owners.

SYNNEX Corporation

Consolidated Balance Sheets

(currency and share amounts in thousands, except par value)

(Amounts may not add due to rounding)

(unaudited)

August 31, 2020 November 30, 2019

ASSETS

Current assets:

Cash and cash equivalents $ 1,452,273 $ 225,529

Accounts receivable, net 3,580,970 3,926,709

Receivables from vendors, net 323,027 368,505

Inventories 2,832,607 2,547,224

Other current assets 375,273 385,024

Total current assets 8,564,151 7,452,992

Property and equipment, net 583,951 569,899

Goodwill 2,257,292 2,254,402

Intangible assets, net 1,031,168 1,162,212

Deferred tax assets 116,263 97,539

Other assets, net 710,283 160,917

Total assets $ 13,263,107 $ 11,697,960

LIABILITIES AND EQUITY

Current liabilities:

Borrowings, current $ 244,114 $ 298,969

Accounts payable 3,655,215 3,149,443

Accrued compensation and benefits 447,661 402,771

Other accrued liabilities 1,257,160 723,716

Income taxes payable 27,998 32,223

Total current liabilities 5,632,148 4,607,122

Long-term borrowings 2,609,809 2,718,267

Other long-term liabilities 722,343 361,911

Deferred tax liabilities 205,225 222,210

Total liabilities 9,169,525 7,909,510

Stockholders' equity:

Preferred stock, $0.001 par value, 5,000shares authorized, no shares issued or - -outstanding

Common stock, $0.001 par value, 100,000shares authorized, 53,380 and 53,154 53 53shares issued as of August 31, 2020 andNovember 30, 2019, respectively

Additional paid-in capital 1,579,026 1,545,421

Treasury stock, 2,454 and 2,399 shares asof August 31, 2020 and November 30, 2019, (178,775) (172,627)respectively

Accumulated other comprehensive income (224,628) (209,077)(loss)

Retained earnings 2,917,906 2,624,680

Total stockholders' equity 4,093,582 3,788,450

Total liabilities and equity $ 13,263,107 $ 11,697,960

SYNNEX Corporation

Consolidated Statements of Operations

(currency and share amounts in thousands, except per share amounts)

(Amounts may not add due to rounding)

(unaudited)

Three Months Ended Nine Months Ended

August 31, 2020 August 31, 2019 August 31, 2020 August 31, 2019

Revenue:

Products $ 5,306,361 $ 5,047,968 $ 13,858,313 $ 13,695,725

Services 1,158,421 1,155,690 3,403,305 3,480,275

Total revenue 6,464,782 6,203,659 17,261,619 17,176,000

Cost of revenue:

Products (5,008,881) (4,746,197) (13,031,113) (12,876,410)

Services (747,809) (731,472) (2,206,256) (2,196,212)

Gross profit 708,092 725,990 2,024,249 2,103,379

Selling, generaland (498,956) (517,135) (1,514,734) (1,557,906)administrativeexpenses

Operating income 209,136 208,855 509,515 545,473

Interest expenseand finance (28,749) (42,945) (99,046) (127,695)charges, net

Other income (567) (1,087) 3,280 19,764(expense), net

Income before 179,819 164,823 413,748 437,542income taxes

Provision for (45,356) (41,691) (99,740) (112,831)income taxes

Net income $ 134,464 $ 123,132 $ 314,008 $ 324,711

Earnings percommon share:

Basic $ 2.61 $ 2.41 $ 6.10 $ 6.35

Diluted $ 2.60 $ 2.40 $ 6.07 $ 6.32

Weighted-averagecommon sharesoutstanding:

Basic 50,890 50,601 50,851 50,661

Diluted 51,241 50,845 51,172 50,903

SYNNEX Corporation

Segment Information

(currency in thousands)

(Amounts may not add due to rounding)

(unaudited)

Three Months Ended Nine Months Ended

August 31, 2020 August 31, 2019 August 31, 2020 August 31, 2019

Revenue:

Technology $ 5,306,361 $ 5,047,970 $ 13,858,313 $ 13,695,729Solutions

Concentrix 1,163,694 1,160,928 3,418,676 3,495,076

Inter-segment (5,273) (5,240) (15,371) (14,805)elimination

Consolidated $ 6,464,782 $ 6,203,659 $ 17,261,619 $ 17,176,000

Operating income:

Technology $ 132,373 $ 138,830 $ 320,962 $ 352,594Solutions

Concentrix 76,763 70,025 188,554 192,879

Consolidated $ 209,136 $ 208,855 $ 509,515 $ 545,473

SYNNEX Corporation

Reconciliation of GAAP to Non-GAAP financial measures

(currency in thousands)

(Amounts may not add due to rounding)

Three Months Ended Nine Months Ended

August 31, 2020 August 31, 2019 August 31, 2020 August 31, 2019

Revenue in constant currency

Consolidated

Revenue $ 6,464,782 $ 6,203,659 $ 17,261,619 $ 17,176,000

Foreign currency translation 35,239 111,756

Revenue in constant currency $ 6,500,021 $ 6,203,659 $ 17,373,375 $ 17,176,000

Technology Solutions

Revenue $ 5,306,361 $ 5,047,970 $ 13,858,313 $ 13,695,729

Foreign currency translation 32,798 79,488

Revenue in constant currency $ 5,339,159 $ 5,047,970 $ 13,937,801 $ 13,695,729

Concentrix

Revenue $ 1,163,694 $ 1,160,928 $ 3,418,676 $ 3,495,076

Foreign currency translation 2,441 32,268

Revenue in constant currency $ 1,166,135 $ 1,160,928 $ 3,450,944 $ 3,495,076

Three Months Ended Nine Months Ended

August 31, 2020 August 31, 2019 August 31, 2020 August 31, 2019

Selling, general andadministrative expenses

Consolidated

GAAP selling, general and $ 498,956 $ 517,135 $ 1,514,734 $ 1,557,906administrative expenses

Acquisition-related and 4,163 9,200 22,701 53,582integration expenses

Amortization of intangibles 46,533 52,066 139,435 156,964

Adjusted selling, general $ 448,260 $ 455,869 $ 1,352,598 $ 1,347,360and administrative expenses

Technology Solutions

GAAP selling, general and $ 165,107 $ 162,944 $ 506,239 $ 466,725administrative expenses

Acquisition-related and - - - 981integration expenses

Amortization of intangibles 9,995 10,999 30,130 32,968

Adjusted selling, general $ 155,112 $ 151,945 $ 476,109 $ 432,776and administrative expenses

Concentrix

GAAP selling, general and $ 335,770 $ 356,155 $ 1,014,339 $ 1,097,139administrative expenses

Acquisition-related and 4,163 9,200 22,701 52,601integration expenses

Amortization of intangibles 36,538 41,067 109,305 123,996

Adjusted selling, general $ 295,069 $ 305,888 $ 882,333 $ 920,542and administrative expenses

SYNNEX Corporation

Reconciliation of GAAP to Non-GAAP financial measures

(currency in thousands)

(Amounts may not add due to rounding)

(continued)

Three Months Ended Nine Months Ended

August 31, 2020 August 31, 2019 August 31, 2020 August 31, 2019

Operating income andOperating margin

Consolidated

Revenue $ 6,464,782 $ 6,203,659 $ 17,261,619 $ 17,176,000

GAAP operating income $ 209,136 $ 208,855 $ 509,515 $ 545,473

Acquisition-relatedand integration 4,163 9,200 22,701 53,582expenses

Amortization of 46,828 52,428 140,320 158,149intangibles

Non-GAAP operating $ 260,127 $ 270,483 $ 672,536 $ 757,204income

GAAP operating margin 3.24 % 3.37 % 2.95 % 3.18 %

Non-GAAP operating 4.02 % 4.36 % 3.90 % 4.41 %margin

Technology Solutions

Segment revenue $ 5,306,361 $ 5,047,970 $ 13,858,313 $ 13,695,729

GAAP operating income $ 132,373 $ 138,830 $ 320,962 $ 352,594

Acquisition-relatedand integration - - - 981expenses

Amortization of 9,995 10,999 30,130 32,968intangibles

Non-GAAP operating $ 142,368 $ 149,829 $ 351,092 $ 386,543income

GAAP operating margin 2.49 % 2.75 % 2.32 % 2.57 %

Non-GAAP operating 2.68 % 2.97 % 2.53 % 2.82 %margin

Concentrix

Segment revenue $ 1,163,694 $ 1,160,928 $ 3,418,676 $ 3,495,076

GAAP operating income $ 76,763 $ 70,025 $ 188,554 $ 192,879

Acquisition-relatedand integration 4,163 9,200 22,701 52,601expenses

Amortization of 36,833 41,429 110,190 125,181intangibles

Non-GAAP operating $ 117,759 $ 120,654 $ 321,445 $ 370,661income

GAAP operating margin 6.60 % 6.03 % 5.52 % 5.52 %

Non-GAAP operating 10.12 % 10.39 % 9.40 % 10.61 %margin

SYNNEX Corporation

Reconciliation of GAAP to Non-GAAP financial measures

(currency and share amounts in thousands, except per share amounts)

(Amounts may not add due to rounding)

(continued)

Three Months Ended Nine Months Ended

August 31, 2020 August 31, 2019 August 31, 2020 August 31, 2019

Adjusted EBITDA

Consolidated

Net income $ 134,464 $ 123,132 $ 314,008 $ 324,711

Interest expense and 28,749 42,945 99,046 127,695finance charges, net

Provision for income 45,356 41,691 99,740 112,831taxes

Depreciation(excludingaccelerateddepreciation 37,446 38,597 110,981 119,004included inacquisition-relatedand integrationexpenses below)

Amortization of 46,828 52,428 140,320 158,149intangibles

EBITDA $ 292,843 $ 298,793 $ 764,095 $ 842,390

Other (income)expense, net(excluding amountsincluded in 567 1,087 (3,798) (19,593)acquisition-relatedand integrationexpenses below)

Acquisition-relatedand integration 4,163 9,200 23,219 53,411expenses

Adjusted EBITDA $ 297,573 $ 309,080 $ 783,516 $ 876,208

Technology Solutions

Net income $ 85,531 $ 87,778 $ 204,237 $ 236,080

Interest expense and 19,747 17,775 59,531 55,725finance charges, net

Provision for income 27,119 29,739 56,189 77,873taxes

Depreciation 5,937 5,875 17,650 16,719

Amortization of 9,995 10,999 30,130 32,968intangibles

EBITDA $ 148,329 $ 152,166 $ 367,737 $ 419,365

Other (income) (25) 3,538 1,004 (17,083)expense, net

Acquisition-relatedand integration - - - 981expenses

Adjusted EBITDA $ 148,304 $ 155,704 $ 368,741 $ 403,263

Concentrix

Net income $ 48,933 $ 35,354 $ 109,771 $ 88,631

Interest expense and 9,002 25,170 39,515 71,970finance charges, net

Provision for income 18,236 11,952 43,551 34,958taxes

Depreciation(excludingaccelerateddepreciation 31,509 32,722 93,331 102,285included inacquisition-relatedand integrationexpenses below)

Amortization of 36,833 41,429 110,190 125,181intangibles

EBITDA $ 144,513 $ 146,627 $ 396,358 $ 423,025

Other (income)expense, net(excluding amountsincluded in 592 (2,450) (4,802) (2,510)acquisition-relatedand integrationexpenses below)

Acquisition-relatedand integration 4,163 9,200 23,219 52,430expenses

Adjusted EBITDA $ 149,268 $ 153,377 $ 414,775 $ 472,945

SYNNEX Corporation

Reconciliation of GAAP to Non-GAAP financial measures

(currency and share amounts in thousands, except per share amounts)

(Amounts may not add due to rounding)

(continued)

Three Months Ended Nine Months Ended

August 31, 2020 August 31, 2019 August 31, 2020 August 31, 2019

Net income

Net income $ 134,464 $ 123,132 $ 314,008 $ 324,711

Acquisition-relatedand integration 4,163 9,200 23,219 53,411expenses

Amortization of 46,828 52,428 140,320 158,149intangibles

Contingent - - - (19,034)consideration

Income taxes related (12,899) (15,548) (41,407) (55,328)to the above^(1)

Non-GAAP net income $ 172,556 $ 169,212 $ 436,140 $ 461,909

Diluted earnings percommon share ("EPS")^(2)

Net income $ 134,464 $ 123,132 $ 314,008 $ 324,711

Less: net incomeallocated to 1,481 1,066 3,602 2,883participatingsecurities

Net incomeattributable to 132,983 122,066 310,406 321,828common stockholders

Acquisition-relatedand integrationexpenses 4,117 9,121 22,960 52,938attributable tocommon stockholders

Amortization ofintangibles 46,312 51,975 138,755 156,748attributable tocommon stockholders

Contingentconsideration - - - (18,865)attributable tocommon stockholders

Income taxes relatedto the aboveattributable to (12,757) (15,414) (40,945) (54,838)common stockholders^(1)

Non-GAAP net incomeattributable to $ 170,655 $ 167,748 $ 431,176 $ 457,810common stockholders

Weighted-averagenumber of common 51,241 50,845 51,172 50,903shares - diluted:

Diluted EPS^(2) $ 2.60 $ 2.40 $ 6.07 $ 6.32

Acquisition-relatedand integration 0.08 0.18 0.45 1.04expenses

Amortization of 0.90 1.02 2.71 3.08intangibles

Contingent - - - (0.37)consideration

Income taxes related (0.25) (0.30) (0.80) (1.08)to the above^(1)

Non-GAAP diluted EPS $ 3.33 $ 3.30 $ 8.43 $ 8.99

SYNNEX Corporation

Reconciliation of GAAP to Non-GAAP financial measures

(Amounts may not add due to rounding)

(continued)

Three Months Ended Nine Months Ended

(Amounts in thousands) August 31, 2020 August 31, 2019 August 31, 2020 August 31, 2019

Free cash flow

Net cash provided by(used in) operating $ 320,617 $ 249,853 $ 1,547,098 $ 202,473activities

Purchases of property (42,705) (33,020) (127,326) (93,432)and equipment

Free cash flow $ 277,912 $ 216,833 $ 1,419,772 $ 109,041

Forecast

Three Months Ending November 30, 2020

(Amounts in millions, except per share Low Highamounts)

Net income $ 153.0 $ 166.0

Acquisition-related and integration 3.0 3.0expenses

Amortization of intangibles 47.0 47.0

Income taxes related to the above^(1) (12.5) (12.5)

Non-GAAP net income $ 190.5 $ 203.5

Diluted EPS^(2) $ 2.95 $ 3.20

Acquisition-related and integration 0.06 0.06expenses

Amortization of intangibles 0.90 0.90

Income taxes related to the above^(1) (0.24) (0.24)

Non-GAAP diluted EPS $ 3.68 $ 3.93

^(1)The tax effect of taxable and deductible non-GAAP adjustments wascalculated using the effective year-to-date tax rate during the respectiveperiods.

^(2)Diluted EPS is calculated using the two-class method. Unvested restrictedstock awards granted to employees are considered participating securities. Forpurposes of calculating Diluted EPS, Net income allocated to participatingsecurities was approximately 1.1% and 1.2% of Net income for the three and ninemonths ended August 31, 2020, respectively and approximately 0.9% for both thethree and nine months ended August 31, 2019. Net income allocable toparticipating securities is estimated to be approximately 0.9% of theforecasted Net income for the three months ending November 30, 2020.

SYNNEX Corporation

Calculation of Financial Metrics

(currency in thousands)

(Amounts may not add or compute due to rounding)



Return on Invested Capital ("ROIC")

August 31, 2020 August 31, 2019

ROIC

Operating income (trailing fiscal four $ 777,803 $ 746,368quarters)

Income taxes on operating income^(1) (193,398) (201,002)

Operating income after taxes $ 584,405 $ 545,366

Total borrowings, excluding book $ 3,019,573 $ 3,126,339overdraft (last five quarters average)

Total equity (last five quarters average) 3,834,782 3,282,537

Less: U.S. cash and cash equivalents (398,398) (67,727)(last five quarters average)

Total invested capital $ 6,455,957 $ 6,341,149

ROIC 9.1 % 8.6 %

Adjusted ROIC

Non-GAAP operating income (trailing $ 1,011,028 $ 1,024,961fiscal four quarters)

Income taxes on Non-GAAP operating income (253,279) (263,045)^(1)

Non-GAAP operating income after taxes $ 757,749 $ 761,916

Total invested capital $ 6,455,957 $ 6,341,149

Tax effected impact of cumulativenon-GAAP adjustments (last five 616,468 439,557

quarters average)

Total Non-GAAP invested capital $ 7,072,425 $ 6,780,706

Adjusted ROIC 10.7 % 11.2 %

^(1)Income taxes on GAAP operating income was calculated using the effectiveyear-to-date tax rates during the respective periods. Income taxes on non-GAAPoperating income was calculated by excluding the tax effect of taxable anddeductible non-GAAP adjustments using the effective year-to-date tax rateduring the respective periods. In fiscal year 2018, the effective tax rate fornon-GAAP operating income excludes the impact of the transition tax onaccumulated overseas profits and the remeasurement of deferred tax assets andliabilities to the new U.S. tax rate related to the enactment of the Tax Cutsand Jobs Act of 2017.

Debt to Adjusted EBITDA leverage ratio

August 31, 2020 August 31, 2019

Total borrowings, excluding book overdraft (a) $ 2,851,890 $ 3,323,416

Less: cash and cash equivalents (b) 1,452,273 262,279

Net debt (c)=(a)-(b) $ 1,399,617 $ 3,061,137

Trailing four quarters Adjusted EBITDA (d) $ 1,160,281 $ 1,177,889

Debt to Adjusted EBITDA leverage ratio (e)=(a)/(d) 2.5 2.8

Net debt to Adjusted EBITDA leverage ratio (f)=(c)/(d) 1.2 2.6

SYNNEX Corporation

Calculation of Financial Metrics

(currency in thousands)

(Amounts may not add or compute due to rounding)

(continued)



Cash Conversion Cycle

Three Months Ended

August 31, 2020 August 31, 2019

Days sales outstanding

Revenue (products and (a) $ 6,464,782 $ 6,203,659services)

Accounts receivable, net (b) 3,580,970 3,452,976

Days sales outstanding (c) = (b)/((a)/the number of 51 51 days during the period)

Days inventoryoutstanding

Cost of revenue (products (d) $ 5,756,690 $ 5,477,669and services)

Inventories (e) 2,832,607 2,787,159

Days inventory (f) = (e)/((d)/the number of 45 47outstanding days during the period)

Days payable outstanding

Cost of revenue (products (g) $ 5,756,690 $ 5,477,669and services)

Accounts payable (h) 3,655,215 2,932,046

Days payable outstanding (i) = (h)/((g)/the number of 58 49 days during the period)

Cash conversion cycle (j) = (c)+(f)-(i) 38 49

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SOURCE SYNNEX Corporation