GlobeNewswire Inc | Jan 18, 2022 04:15PM EST

January 18, 2022

FREMONT, Calif., Jan. 18, 2022 (GLOBE NEWSWIRE) -- Concentrix Corporation (NASDAQ: CNXC), a leading global provider of customer experience (CX) solutions and technology, today announced financial results for the fiscal fourth quarter and fiscal year ended November 30, 2021.

Three Months Ended Fiscal Year Ended November 30, November 30, Change November 30, November 30, Change 2021 2020 2021 2020Revenue $ 1,466.6 $ 1,300.9 12.7 % $ 5,587.0 $ 4,719.5 18.4 %($M)Operatingincome $ 157.9 $ 120.2 31.4 % $ 572.4 $ 308.8 85.4 %($M)Non-GAAPoperating $ 203.4 $ 175.4 16.0 % $ 733.7 $ 509.4 44.0 %income($M) ^(1)Operating 10.8 % 9.2 % 160 10.2 % 6.5 % 370 bpsmargin bpsNon-GAAPoperating 13.9 % 13.5 % 40 bps 13.1 % 10.8 % 230 bpsmargin ^(1)Netincome $ 124.1 $ 64.6 92.1 % $ 405.6 $ 164.8 146.1 %($M)Non-GAAPnet $ 158.0 $ 106.8 47.9 % $ 534.6 $ 316.5 68.9 %income($M) ^(1)AdjustedEBITDA $ 238.2 $ 211.2 12.8 % $ 874.0 $ 638.5 36.9 %($M) ^(1)AdjustedEBITDA 16.2 % 16.2 % 0 bps 15.6 % 13.5 % 210 bpsmargin ^(1)Dilutedearningsper $ 2.35 $ 1.25 88.0 % $ 7.70 $ 3.19 141.4 %commonshare ^(2)Non-GAAPdilutedearningsper $ 2.99 $ 2.07 44.4 % $ 10.15 $ 6.13 65.6 %commonshare ^(1), ^(2)

(1) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its most directly comparable GAAP measure.(2) For the three months and fiscal year ended November 30, 2020, weighted average number of shares used for both diluted EPS is based on the number of shares issued in connection with the spin-off of 51.6 million.

Fourth Quarter Fiscal 2021 Highlights:

-- Revenue was $1,466.6 million, up 12.7% from the prior year fourth quarter, compared with $1,300.9 million in the prior year fourth quarter, and 14.0% on an adjusted constant currency basis. -- Operating income was $157.9 million, or 10.8% of revenue, compared with $120.2 million, or 9.2% of revenue in the prior year fourth quarter. -- Non-GAAP operating income was $203.4 million, or 13.9% of revenue, compared with $175.4 million, or 13.5% of revenue, in the prior year fourth quarter. -- Adjusted EBITDA was $238.2 million, or 16.2% of revenue, compared with $211.2 million, or 16.2% of revenue, in the prior year fourth quarter. -- Cash flow from operations was $182.1 million in the quarter. Free cash flow for the quarter was $145.8 million. -- Diluted earnings per common share (EPS) was $2.35 compared to $1.25 in the prior year fourth quarter. -- Non-GAAP diluted EPS was $2.99 compared to $2.07 in the prior year fourth quarter.

We delivered adjusted constant currency revenue growth above 17 percent with margin expansion in 2021, our first year as an independent public company, said Chris Caldwell, Concentrix President and CEO. We are on track integrating the complementary PK acquisition. This further differentiates our unmatched CX capabilities and industry-leading execution. Our strong close to the year, including double-digit revenue growth, margin expansion, and strong new business signings in the fourth quarter, gives us confidence in our ability to grow above the market during 2022.

Fiscal Year 2021 Highlights:

-- Revenue was $5,587.0 million, up 18.4% from the prior fiscal year, compared with $4,719.5 million in the prior fiscal year, and 17.3% on an adjusted constant currency basis. -- Operating income was $572.4 million, or 10.2% of revenue, compared with $308.8 million, or 6.5% of revenue, in the prior fiscal year. -- Non-GAAP operating income was $733.7 million, or 13.1% of revenue, compared with $509.4 million, or 10.8% of revenue, in the prior fiscal year. -- Adjusted EBITDA was $874.0 million, or 15.6% of revenue, compared with $638.5 million, or 13.5% of revenue, in the prior fiscal year. -- Cash flow from operations was $514.2 million in the fiscal year. Free cash flow for the fiscal year was $365.1 million. -- Diluted earnings per common share (EPS) was $7.70 compared to $3.19 in the prior fiscal year. -- Non-GAAP diluted EPS was $10.15 compared to $6.13 in the prior fiscal year.

Quarterly Dividend and Share Repurchase Program:

-- Concentrix paid a $0.25 per share quarterly dividend on November 2, 2021. The Companys Board of Directors has declared a quarterly dividend of $0.25 per share payable on February 8, 2022, to shareholders of record at the close of business on January 28, 2022. -- Concentrix repurchased 0.1 million shares in the fourth quarter at a cost of $25.1 million under its previously announced share repurchase program. At November 30, 2021, the Companys remaining share repurchase authorization was $474.9 million.

First Quarter and Full Year Fiscal 2022 Outlook:The following statements are based on Concentrix current expectations for the first quarter and full year fiscal 2022. Non-GAAP financial measures exclude the impact of acquisition-related and integration expenses, amortization of intangible assets, depreciation, share-based compensation and the related tax effects thereon. These statements are forward-looking and actual results may differ materially.

First quarter 2022:

-- Revenue is expected to be in the range of $1.510 billion to $1.540 billion, including an approximately $78 million contribution from PK for the months of January and February, as reported. -- Non-GAAP operating income is expected to be in the range of $190 million to $205 million. -- The effective tax rate is expected to approximate 25% to 26%.

Full year 2022:

-- Revenue is expected to be in the range of $6.450 billion to $6.600 billion, including an approximately $485 million 11-month contribution from PK, as reported. -- Non-GAAP operating income is expected to be in the range of $890 million to $930 million. -- The effective tax rate is expected to approximate 25% to 26%.

The Company believes that a quantitative reconciliation of the non-GAAP operating income outlook to the most directly comparable GAAP measure cannot be provided without unreasonable efforts due to the incomplete purchase price allocation for the PK acquisition and the related unavailability of the expected amortization of PK intangible assets. For the same reason, Concentrix is unable to address the probable significance of the unavailable information, which may have a material impact on the Companys GAAP results.

Conference Call and WebcastConcentrix will host a conference call for investors to review its fiscal 2021 fourth quarter results tomorrow morning, Wednesday, January 19, 2022 at 9:00 a.m. (ET)/6:00 a.m. (PT).

The live conference call will be webcast in listen-only mode in the Investor Relations section of the Concentrix website under Events and Presentations at https://ir.concentrix.com/events-and-presentations. A replay will also be available on the website following the conference call.

About ConcentrixConcentrix Corporation (Nasdaq: CNXC), is a leading global provider of customer experience (CX) solutions and technology, improving business performance for some of the worlds best brands including over 100 Fortune Global 500 clients and more than 125 new economy clients. 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 by reimagining everything CX through Strategy + Talent + Technology. Concentrix provides services to clients in our key industry verticals: technology & consumer electronics; retail, travel & ecommerce; banking, financial services & insurance; healthcare; communications & media; automotive; and energy & public sector. Visit www.concentrix.com to learn more.

Use of Non-GAAP InformationIn addition to disclosing financial results that are determined in accordance with GAAP, we also disclose certain non-GAAP financial information, including:

-- Constant currency revenue growth, which is revenue growth adjusted 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 our business performance. Constant currency revenue growth is calculated by translating the revenue of each fiscal year in the billing currency to U.S. dollars using the comparable prior years currency conversion rate in comparison to prior years revenue. Generally, when the U.S. dollar either strengthens or weakens against other currencies, revenue growth at constant currency rates or adjusting for currency will be higher or lower than revenue growth reported at actual exchange rates. -- Adjusted constant current revenue growth, which is constant currency revenue growth excluding revenue for businesses acquired or divested since the beginning of the prior year period so that revenue growth can be viewed without the impact of acquisitions or divestitures, thereby facilitating period-to-period comparisons of our business performance. -- Non-GAAP operating income, which is operating income, adjusted to exclude acquisition-related and integration expenses, including related restructuring costs, spin-off related expenses, amortization of intangible assets, share-based compensation and gain on divestitures and related transactions costs. -- Non-GAAP operating margin, which is non-GAAP operating income, as defined above, divided by revenue. -- Adjusted earnings before interest, taxes, depreciation, and amortization, or adjusted EBITDA, which is non-GAAP operating income, as defined above, plus depreciation. -- Adjusted EBITDA margin, which is adjusted EBITDA, as defined above, divided by revenue. -- Non-GAAP net income, which is net income excluding the tax effected impact of acquisition-related and integration expenses, including related restructuring costs, spin-off related expenses, amortization of intangible assets, share-based compensation and gain on divestitures and related transaction costs. -- Free cash flow, which is cash flows from operating activities less capital expenditures. We believe that free cash flow is a meaningful measure of cash flows since capital expenditures are a necessary component of ongoing operations. However, free cash flow has limitations because it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not incorporate payments for business acquisitions. -- Non-GAAP diluted earnings per common share (EPS), which is diluted EPS excluding per share, tax effected impact of acquisition-related and integration expenses, including related restructuring costs, spin-off related expenses, amortization of intangible assets, share-based compensation and gain on divestitures and related transaction costs.

We believe that providing this additional information is useful to the reader to better assess and understand our base operating performance, especially when comparing results with previous periods and for planning and forecasting in future periods, primarily because management typically monitors the business adjusted for these items in addition to GAAP results. Management also uses these non-GAAP measures to establish operational goals and, in some cases, for measuring performance for compensation purposes. These non-GAAP financial measures exclude amortization of intangible assets. Although intangible assets contribute to our revenue generation, the amortization of intangible assets does not directly relate to the services performed for our clients. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of our acquisition activity. Accordingly, we believe excluding the amortization of intangible assets, along with the other non-GAAP adjustments, which neither relate to the ordinary course of our business nor reflect our underlying business performance, enhances our and our investors ability to compare our past financial performance with its current performance and to analyze underlying business performance and trends. These non-GAAP financial measures also exclude share-based compensation expense. Given the subjective assumptions and the variety of award types that companies can use when calculating share-based compensation expense, management believes this additional information allows investors to make additional comparisons between our operating results and those of our peers. 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 used as a complement to, and in conjunction with, data presented in accordance with GAAP.

Safe Harbor StatementThis news release includes 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. Forward-looking statements include, but are not limited to, statements regarding the Companys expected future financial condition, results of operations, including revenue and operating income, effective tax rate, capital allocation, business strategy, innovation in the Companys business, the value of the Companys solutions, the integration of the PK business, the contributions of the PK business and statements that include words such as believe, expect, may, will, provide, could and should and other similar expressions. These forward-looking statements are inherently uncertain and involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Risks and uncertainties include, among other things: risks related to general economic conditions, including uncertainty related to the COVID-19 pandemic and its impact on the global economy, supply chains, inflation, the Companys business and the business of the Companys clients; other communicable diseases, natural disasters, adverse weather conditions or public health crises; cyberattacks on the Companys or its clients networks and information technology systems; the inability to protect personal and proprietary information; the failure of the Companys staff and contractors to adhere to the Companys and its clients controls and processes; the inability to execute on the Companys digital CX strategy; the inability to successfully identify, complete and integrate strategic acquisitions or investments, including the integration of PK; competitive conditions in the Companys industry and consolidation of its competitors; geopolitical, economic and climate or weather related risks in regions with a significant concentration of the Companys operations; higher than expected tax liabilities; the loss of key personnel; the demand for CX solutions and technology; variability in demand by the clients or the early termination of the Companys client contracts; the level of business activity of the Companys clients and the market acceptance and performance of their products and services; the operability of communication services and information technology systems and networks; changes in law, regulations or regulatory guidance; currency exchange rate fluctuations; damage to the Companys reputation through the actions or inactions of third parties; increases in the cost of labor; investigative or legal actions; and other factors contained in the Companys Annual Report on Form 10-K for the fiscal year ended November 30, 2020 filed with the Securities and Exchange Commission and subsequent SEC filings. The Company does not undertake a duty to update forward-looking statements, which speak only as of the date on which they are made.

Copyright 2022 Concentrix Corporation. All rights reserved. Concentrix, the Concentrix logo, and all other Concentrix company, product and services names and slogans are trademarks or registered trademarks of Concentrix Corporation and its subsidiaries. Concentrix and the Concentrix logo Reg. U.S. Pat. & Tm. Off. and applicable non-U.S. jurisdictions. Other names and marks are the property of their respective owners.

CONCENTRIX CORPORATIONCONSOLIDATED BALANCE SHEETS(currency and share amounts in thousands, except par value)(Amounts may not add due to rounding)

November 30, November 30, 2021 2020 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 182,038 $ 152,656 Accounts receivable, net 1,207,953 1,081,481 Other current assets 153,074 189,239 Total current assets 1,543,065 1,423,376 Property and equipment, net 407,144 451,649 Goodwill 1,813,502 1,836,050 Intangible assets, net 655,528 798,959 Deferred tax assets 48,413 47,423 Other assets 578,715 620,099 Total assets $ 5,046,367 $ 5,177,556 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 129,359 $ 140,575 Current portion of long-term debt ? 33,750 Payable to former parent ? 22,825 Accrued compensation and benefits 453,434 419,715 Other accrued liabilities 351,642 371,072 Income taxes payable 33,779 20,725 Total current liabilities 968,214 1,008,662 Long-term debt, net 802,017 1,111,362 Other long-term liabilities 546,410 601,887 Deferred tax liabilities 109,471 153,560 Total liabilities 2,426,112 2,875,471 Stockholders? equity: Preferred stock, $0.0001 par value, 10,000 sharesauthorized as of November 30, 2021; no shares ? ? issued and outstanding as of November 30, 2021Common stock, $0.0001 par value, 250,000 sharesauthorized as of November 30, 2021; 51,927 shares 5 ? issued and 51,594 shares outstanding as ofNovember 30, 2021Additional paid-in capital 2,355,767 ? Treasury stock, 333 shares as of November 30, (57,486 ) ? 2021Retained earnings 392,495 ? Former parent company investment ? 2,305,899 Accumulated other comprehensive loss (70,526 ) (3,814 )Total stockholders? equity 2,620,255 2,302,085 Total liabilities and stockholders? equity $ 5,046,367 $ 5,177,556

CONCENTRIX CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS(currency and share amounts in thousands, except per share amounts)(Amounts may not add due to rounding)(unaudited)

Three Months Ended Fiscal Year Ended November 30, November 30, % November 30, November 30, % 2021 2020 Change 2021 2020 ChangeRevenue Technology andconsumer $ 481,004 $ 410,542 17 % $ 1,759,203 $ 1,422,817 24 %electronicsCommunications 245,172 239,268 2 % 1,005,283 954,234 5 %and mediaRetail, travel 272,921 237,912 15 % 985,550 796,324 24 %and ecommerceBanking,financial 213,403 185,522 15 % 862,033 712,469 21 %services andinsuranceHealthcare 135,464 118,558 14 % 489,855 392,686 25 %Other 118,644 109,056 9 % 485,091 441,004 10 %Total revenue 1,466,608 1,300,858 13 % 5,587,015 4,719,534 18 %Cost of revenue 947,240 842,226 12 % 3,617,527 3,058,009 18 %Gross profit 519,368 458,632 13 % 1,969,488 1,661,525 19 %Selling, generaland 361,463 338,425 7 % 1,397,091 1,352,764 3 %administrativeexpensesOperating income 157,905 120,207 31 % 572,397 308,761 85 %Interest expenseand finance 3,730 8,798 (58 )% 23,046 48,313 (52 )%charges, netOther expense (744 ) (3,164 ) (76 )% (6,345 ) (7,447 ) (15 )%(income), netIncome before 154,919 114,573 35 % 555,696 267,895 107 %income taxesProvision for 30,811 49,946 (38 )% 150,119 103,084 46 %income taxesNet income $ 124,108 $ 64,627 92 % $ 405,577 $ 164,811 146 %Earnings per common share:Basic $ 2.37 $ 1.25 $ 7.78 $ 3.19 Diluted $ 2.35 $ 1.25 $ 7.70 $ 3.19 Weighted-averagecommon shares outstandingBasic 51,555 51,602 51,355 51,602 Diluted 52,016 51,602 51,914 51,602



CONCENTRIX CORPORATIONRECONCILIATION OF GAAP TO NON-GAAP MEASURES(currency and share amounts in thousands, except per share amounts)(Amounts may not add due to rounding)(unaudited)

Three Months Ended Fiscal Year Ended November 30, November 30, November 30, November 30, 2021 2020 2021 2020Revenue $ 1,466,608 $ 1,300,858 $ 5,587,015 $ 4,719,534 Revenue growth,as reported under 12.7 % 7.3 % 18.4 % 0.2 %U.S. GAAPForeign exchange ? % (1.0 ) (2.0 ) 0.5 %impact % %Constant currency 12.7 % 6.3 % 16.4 % 0.7 %revenue growthEffect ofexcluding revenueof acquired and 1.3 % ? % 0.9 % ? %divestedbusinessesAdjusted constantcurrency revenue 14.0 % 6.3 % 17.3 % 0.7 %growth

Three Months Ended Fiscal Year Ended November November November November 30, 2021 30, 2020 30, 2021 30, 2020Operating income $ 157,905 $ 120,207 $ 572,397 $ 308,761Acquisition-related and 825 6,552 825 27,982integration expensesSpin-off related expenses ? 7,694 ? 9,483Amortization of intangibles 33,744 37,093 136,939 147,283Share-based compensation 10,904 3,883 36,762 15,914Gain on divestitures and ? ? (13,197 ) ?related transaction costsNon-GAAP operating income $ 203,378 $ 175,429 $ 733,726 $ 509,423

Three Months Ended Fiscal Year Ended November November November November 30, 2021 30, 2020 30, 2021 30, 2020Net income $ 124,108 $ 64,627 $ 405,577 $ 164,811 Interest expense and 3,730 8,798 23,046 48,313 finance charges, netProvision for income 30,811 49,946 150,119 103,084 taxesOther expense (income), (744 ) (3,164 ) (6,345 ) (7,447 )netAcquisition-related and 825 6,552 825 27,982 integration expensesSpin-off related expenses ? 7,694 ? 9,483 Gain on divestitures and ? ? (13,197 ) ? related transaction costsAmortization of 33,744 37,093 136,939 147,283 intangiblesShare-based compensation 10,904 3,883 36,762 15,914 Depreciation (excludingaccelerated depreciationincluded in 34,865 35,795 140,236 129,126 acquisition-related andintegration expensesabove)Adjusted EBITDA $ 238,243 $ 211,224 $ 873,962 $ 638,549

Three Months Ended Fiscal Year Ended November November November November 30, 2021 30, 2020 30, 2021 30, 2020Operating margin 10.8 % 9.2 % 10.2 % 6.5 %Non-GAAP operating margin 13.9 % 13.5 % 13.1 % 10.8 %Adjusted EBITDA margin 16.2 % 16.2 % 15.6 % 13.5 %

Three Months Ended Fiscal Year Ended November November November November 30, 2021 30, 2020 30, 2021 30, 2020Net income $ 124,108 $ 64,627 $ 405,577 $ 164,811 Acquisition-related and 825 6,552 825 27,982 integration expensesSpin-off related expenses ? 7,694 ? 9,483 Amortization of intangibles 33,744 37,093 136,939 147,283 Share-based compensation 10,904 3,883 36,762 15,914 Gain on divestitures and ? ? (13,197 ) ? related transaction costsIncome taxes related to the (11,549 ) (13,037 ) (32,291 ) (49,010 )above ^(1)Non-GAAP net income $ 158,032 $ 106,812 $ 534,615 $ 316,463

Three Months Ended Fiscal Year Ended November November November November 30, 2021 30, 2020 30, 2021 30, 2020Net income $ 124,108 $ 64,627 $ 405,577 $ 164,811 Less: net incomeallocated to (1,790 ) ? (5,724 ) ? participating securitiesNet income attributable 122,318 64,627 399,853 164,811 to common stockholdersAcquisition-related andintegration expenses 813 6,552 813 27,982 allocated to commonstockholdersSpin-off related expensesallocated to common ? 7,694 ? 9,483 stockholdersAmortization ofintangibles allocated to 33,257 37,093 135,006 147,283 common stockholdersShare-based compensationallocated to common 10,747 3,883 36,243 15,914 stockholdersGain on divestitures andrelated transaction costs ? ? (13,011 ) ? allocated to commonstockholdersIncome taxes related tothe above allocated to (11,382 ) (13,037 ) (31,835 ) (49,010 )common stockholders ^(1)Non-GAAP net incomeattributable to common $ 155,753 $ 106,812 $ 527,069 $ 316,463 stockholders

Three Months Ended Fiscal Year Ended November November November November 30, 2021 30, 2020 30, 2021 30, 2020Diluted earnings per common $ 2.35 $ 1.25 $ 7.70 $ 3.19 share (?EPS?) ^(2)Acquisition-related and 0.02 0.13 0.02 0.54 integration expensesSpin-off related expenses ? 0.15 ? 0.18 Amortization of intangibles 0.64 0.72 2.60 2.85 Share-based compensation 0.21 0.08 0.70 0.31 Gain on divestitures and ? ? (0.25 ) ? related transaction costsIncome taxes related to the (0.23 ) (0.26 ) (0.62 ) (0.94 )above ^(1)Non-GAAP diluted EPS $ 2.99 $ 2.07 $ 10.15 $ 6.13 Weighted-average number of 52,016 51,602 51,914 51,602 common shares - diluted ^(3)

Three Months Ended Fiscal Year Ended November 30, November 30, November 30, November 30, 2021 2020 2021 2020Net cashprovided by $ 182,053 $ 119,037 $ 514,178 $ 507,614 operatingactivitiesPurchases ofproperty and (36,210 ) (65,083 ) (149,079 ) (171,332 )equipmentFree cash $ 145,843 $ 53,954 $ 365,099 $ 336,282 flow

(1) The tax effect of taxable and deductible non-GAAP adjustments was calculated using the tax-deductible portion of the expenses and applying the entity-specific, statutory tax rates applicable to each item during the respective periods presented.

(2) Diluted earnings per common share (EPS) is calculated using the two-class method post spin-off. Unvested restricted stock awards granted to employees are considered participating securities. For the purposes of calculating diluted EPS, net income attributable to participating securities was approximately 1.4% of net income for both the three months and fiscal year ended November 30, 2021 and was excluded from total net income to calculate net income attributable to common stockholders. In addition, the non-GAAP adjustments allocated to common stockholders were calculated based on the percentage of net income attributable to common stockholders.

(3) Weighted-average number of shares used for diluted EPS for the three months and fiscal year ended November 30, 2020 is based on the number of shares issued in connection with the spin-off of 51.6 million.

Investor Contact:David SteinInvestor RelationsConcentrix Corporationdavid.stein@concentrix.com(513) 703-9306