SNX
$86.70
Synnex
($1.12)
(1.28%)
Earnings Details
3rd Quarter August 2022
Tuesday, September 27, 2022 8:01:00 AM
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Summary

Synnex Misses

Synnex (SNX) reported 3rd Quarter August 2022 earnings of $2.69 per share on revenue of $15.4 billion. The consensus earnings estimate was $2.69 per share on revenue of $15.1 billion. The Earnings Whisper number was $2.79 per share. Revenue grew 194.9% on a year-over-year basis.

The company said it expects fourth quarter earnings of $2.70 to $3.10 per share on revenue of $15.20 billion to $16.20 billion. The current consensus earnings estimate is $2.99 per share on revenue of $16.19 billion for the quarter ending November 30, 2022.

TD SYNNEX is a leading global distributor and solutions aggregator for the IT ecosystem.

Results
Reported Earnings
$2.69
Earnings Whisper
$2.79
Consensus Estimate
$2.69
Reported Revenue
$15.36 Bil
Revenue Estimate
$15.06 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

TD SYNNEX Reports Fiscal 2022 Third Quarter Results

FREMONT, Calif. & CLEARWATER, Fla.--(BUSINESS WIRE)--TD SYNNEX (NYSE: SNX) today announced financial results for the fiscal third quarter ended August 31, 2022.

 

 

Q3 FY22

 

 

Q2 FY22(2)

 

 

Q3 FY21

 

 

Net Change
from Q2
FY22

 

Net Change
from Q3
FY21

Revenue ($M)

 

$

15,356

 

 

$

15,270

 

 

$

5,207

 

 

0.6

%

 

194.9

%

Operating income ($M)

 

$

241.5

 

 

$

252.7

 

 

$

148.2

 

 

(4.4

) %

 

63.0

%

Non-GAAP operating income ($M)(1)

 

$

398.3

 

 

$

398.3

 

 

$

168.2

 

 

%

 

136.7

%

Operating margin

 

 

1.57

%

 

 

1.66

%

 

 

2.85

%

 

(9) bps

 

(128) bps

Non-GAAP operating margin(1)

 

 

2.59

%

 

 

2.61

%

 

 

3.23

%

 

(2) bps

 

(64) bps

Net income ($M)

 

$

148.8

 

 

$

148.9

 

 

$

94.7

 

 

(0.1

) %

 

57.2

%

Non-GAAP net income ($M)(1)

 

$

263.4

 

 

$

262.3

 

 

$

111.9

 

 

0.4

%

 

135.4

%

Diluted EPS

 

$

1.55

 

 

$

1.55

 

 

$

1.81

 

 

%

 

(14.4

) %

Non-GAAP Diluted EPS(1)

 

$

2.74

 

 

$

2.72

 

 

$

2.14

 

 

0.7

%

 

28.0

%

“The strength of our combined organization was evident in fiscal Q3, as our teams once again demonstrated solid execution, with revenue growth and increased profitability in an uncertain macroeconomic environment,” said Rich Hume, CEO of TD SYNNEX. “During our first year together as TD SYNNEX, we made significant progress on our merger integration, exceeding our targets for non-GAAP EPS accretion and cost synergy attainment. The rationale for our merger is even stronger today than one year ago, and we believe that we are well-positioned to continue raising the bar on the value we bring to our customers, vendors, and shareholders.”

Fiscal 2022 Third Quarter Highlights

  • Revenue was $15.4 billion in the fiscal third quarter of 2022, up 194.9% from the prior fiscal third quarter primarily due to the impact of the completion of the merger with Tech Data on September 1, 2021. On a sequential basis, revenue increased approximately 1% compared to the prior quarter.
  • Operating income was $242 million, compared to $253 million in the prior quarter and $148 million in the prior fiscal third quarter. Non-GAAP operating income was $398 million in both the current and prior quarter, compared to $168 million in the prior fiscal third quarter. Operating margin was 1.6%, compared to 1.7% in the prior quarter, and 2.9% in the prior fiscal third quarter. Non-GAAP operating margin was 2.6% in both the current and prior quarter, compared to 3.2% in the prior fiscal third quarter.
  • Cash used in operations was approximately $67 million for the quarter primarily due to working capital investments to support growth in the business.
  • Repurchased $30 million of our common stock in the quarter and $83 million year to date.
  • The trailing fiscal four quarters Return on Invested Capital (“ROIC”) was 7.6% compared to 8.4% in the prior quarter and 21.0% in the prior fiscal third quarter. The adjusted trailing fiscal four quarters ROIC was 12.0%, compared to 12.8% in the prior quarter and 21.8% in the prior fiscal third quarter.

The following statements are based on TD SYNNEX’ current expectations for the fiscal 2022 fourth quarter. Non-GAAP financial measures exclude the impact of acquisition, integration and restructuring costs, amortization of intangible assets, share-based compensation, purchase accounting adjustments, and the related tax effects thereon. These statements are forward-looking and actual results may differ materially.

Fourth Quarter Fiscal 2022 Outlook

  • Revenue is expected to be in the range of $15.2 billion to $16.2 billion.
  • Net income is expected to be in the range of $138 million to $177 million and on a non-GAAP basis, net income is expected to be in the range of $259 million to $298 million.
  • Diluted earnings per share is expected to be in the range of $1.44 to $1.84 and on a non-GAAP basis, diluted earnings per share is expected to be in the range of $2.70 to $3.10, based on estimated outstanding diluted weighted average shares of 95.2 million.

Dividend

TD SYNNEX announced today that its Board of Directors declared a quarterly cash dividend of $0.30 per common share. The dividend is payable on October 28, 2022 to stockholders of record as of the close of business on October 14, 2022.

Conference Call and Webcast

TD SYNNEX will host a conference call today to discuss the fiscal 2022 third quarter results at 6:00 AM (PT)/9:00 AM (ET).

A live audio webcast of the earnings call will be accessible at ir.tdsynnex.com and a replay of the webcast will be available following the call.

About TD SYNNEX

TD SYNNEX (NYSE: SNX) is a leading global distributor and solutions aggregator for the IT ecosystem. We’re an innovative partner helping more than 150,000 customers in 100+ countries to maximize the value of technology investments, demonstrate business outcomes and unlock growth opportunities. Headquartered in Clearwater, Florida, and Fremont, California, TD SYNNEX’ 22,000 co-workers are dedicated to uniting compelling IT products, services and solutions from 1,500+ best-in-class technology vendors. Our edge-to-cloud portfolio is anchored in some of the highest-growth technology segments including cloud, cybersecurity, big data/analytics, IoT, mobility and everything as a service. TD SYNNEX is committed to serving customers and communities, and we believe we can have a positive impact on our people and our planet, intentionally acting as a respected corporate citizen. We aspire to be a diverse and inclusive employer of choice for talent across the IT ecosystem. For more information, visit TDSYNNEX.com.

(1)Use of Non-GAAP Financial Information

In addition to the financial results presented in accordance with GAAP, TD 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, integration and restructuring costs, the amortization of intangible assets, share-based compensation expense, purchase accounting adjustments 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, acquisition, integration and restructuring costs, share-based compensation expense and purchase accounting adjustments. In prior periods, TD SYNNEX has excluded other items relevant to those periods for purposes of its non-GAAP financial measures.

Acquisition, integration and restructuring costs typically consist of acquisition, integration, restructuring and divestiture related costs and are expensed as incurred. These expenses primarily represent professional services costs for legal, banking, consulting and advisory services, severance and other personnel-related costs, share-based compensation expense and debt extinguishment fees. From time to time, this category may also include transaction-related gains/losses on divestitures/spin-off of businesses, costs related to long-lived assets including impairment charges and accelerated depreciation and amortization expense due to changes in asset useful lives, as well as various other costs associated with the acquisition or divestiture.

TD SYNNEX’ acquisition activities have resulted in the recognition of finite-lived intangible assets which consist primarily of customer relationships and lists and vendor lists. Finite-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. 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. 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.

Share-based compensation expense is a non-cash expense arising from the grant of equity awards to employees based on the estimated fair value of those awards. Although share-based compensation is an important aspect of the compensation of our employees, the fair value of the share-based awards may bear little resemblance to the actual value realized upon the vesting or future exercise of the related share-based awards and the expense can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Given the variety and timing of awards and the subjective assumptions that are necessary when calculating share-based compensation expense, TD SYNNEX believes this additional information allows investors to make additional comparisons between our operating results from period to period.

Purchase accounting adjustments are primarily related to the impact of recognizing the acquired vendor and customer liabilities related to the merger with Tech Data at fair value. The Company expects the duration of these adjustments to benefit our non-GAAP operating income through fiscal 2022 and through a portion of fiscal 2023 based on historical settlement patterns with our vendors and in accordance with the timing defined in our policy for releasing vendor and customer liabilities we deem remote to be paid.

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 and equity, net of cash. Adjusted ROIC is calculated by excluding the tax effected impact of non-GAAP adjustments from operating income and by excluding the cumulative tax effected impact of current and prior period non-GAAP adjustments on equity.

TD SYNNEX also uses free cash flow, which is cash flow from operating activities, reduced by purchases of property and equipment. TD SYNNEX uses free cash flow to conduct and evaluate its business because, although it is similar to cash flow from operations, TD SYNNEX believes it is an additional useful measure of cash flows since purchases of property and equipment are a necessary component of ongoing operations. Free cash flow reflects an additional way of viewing TD 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 as 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, TD SYNNEX believes it is important to view free cash flow as a complement to its entire Consolidated Statements of Cash Flows.

TD 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 TD SYNNEX’ operational results and trends that more readily enable investors to analyze TD 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 TD SYNNEX’ Consolidated Financial Statements prepared in accordance with GAAP. A reconciliation of TD SYNNEX’ GAAP to non-GAAP financial information is set forth in the supplemental tables at the end of this press release.

(2) As the merger with Tech Data did not occur until September 1, 2021, the results for Tech Data are not included in the Q3 FY2021 numbers. We have provided the results for Q2 FY22 to enable investors to more readily analyze TD SYNNEX’ financial and operating performance and to facilitate period-to-period comparisons and analysis of operational trends.

Safe Harbor Statement

Statements in this news release regarding TD SYNNEX 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. Such forward-looking statements are inherently uncertain, and shareholders and other potential investors must recognize that actual results may differ materially from TD SYNNEX expectations as a result of a variety of factors. 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 about our strategy, plans and positioning, as well as guidance related to the fourth quarter and the full fiscal year of 2022. Such forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which TD SYNNEX is unable to predict or control, that may cause TD SYNNEX actual results, performance, or plans to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements.

These risks and uncertainties include, but are not limited to: the risk that the legacy SYNNEX and legacy Tech Data businesses will not be integrated successfully or realize the anticipated benefits of the combined company; ongoing effects of the COVID-19 pandemic; the unfavorable outcome of any legal proceedings that have been or may be instituted against us; the ability to retain key personnel; general economic and political conditions; any weakness in information technology and consumer electronics spending; seasonality; 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; increased inflation; 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 incidents of theft; the declaration, timing and payment of dividends, and the Board’s reassessment thereof; and other risks and uncertainties detailed in our Form 10-K for the fiscal year ended November 30, 2021 and subsequent SEC filings. Statements included in this press release are based upon information known to TD SYNNEX as of the date of this release, and TD SYNNEX assumes no obligation to update information contained in this press release unless otherwise required by law.

Copyright 2022 TD SYNNEX CORPORATION. All rights reserved. TD SYNNEX, the TD SYNNEX Logo, and all other TD SYNNEX company, product and services names and slogans are trademarks or registered trademarks of TD SYNNEX Corporation. Other names and marks are the property of their respective owners.

TD SYNNEX Corporation

Consolidated Balance Sheets

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

(Amounts may not add due to rounding)

(Unaudited)

 

August 31, 2022

 

November 30, 2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

350,810

 

 

$

993,973

 

Accounts receivable, net

 

8,114,004

 

 

 

8,310,032

 

Receivables from vendors, net

 

942,111

 

 

 

1,118,963

 

Inventories

 

9,755,228

 

 

 

6,642,915

 

Other current assets

 

720,298

 

 

 

668,261

 

Total current assets

 

19,882,451

 

 

 

17,734,144

 

Property and equipment, net

 

412,305

 

 

 

483,443

 

Goodwill

 

3,775,145

 

 

 

3,917,276

 

Intangible assets, net

 

4,455,198

 

 

 

4,913,124

 

Other assets, net

 

566,969

 

 

 

618,393

 

Total assets

$

29,092,068

 

 

$

27,666,380

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities:

 

 

 

Borrowings, current

$

252,190

 

 

$

181,256

 

Accounts payable

 

13,718,980

 

 

 

12,034,946

 

Other accrued liabilities

 

1,959,717

 

 

 

2,017,253

 

Total current liabilities

 

15,930,887

 

 

 

14,233,455

 

Long-term borrowings

 

3,882,247

 

 

 

3,955,176

 

Other long-term liabilities

 

496,038

 

 

 

556,134

 

Deferred tax liabilities

 

1,011,242

 

 

 

1,015,640

 

Total liabilities

 

21,320,414

 

 

 

19,760,405

 

Stockholders’ equity:

 

 

 

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

 

 

 

 

 

Common stock, $0.001 par value, 200,000 shares authorized, 98,475 and 98,204 shares issued as of August 31, 2022 and November 30, 2021, respectively

 

98

 

 

 

98

 

Additional paid-in capital

 

7,339,802

 

 

 

7,271,337

 

Treasury stock, 3,511 and 2,633 shares as of August 31, 2022 and November 30, 2021, respectively

 

(290,161

)

 

 

(201,139

)

Accumulated other comprehensive loss

 

(793,878

)

 

 

(336,194

)

Retained earnings

 

1,515,793

 

 

 

1,171,873

 

Total stockholders' equity

 

7,771,654

 

 

 

7,905,975

 

Total liabilities and equity

$

29,092,068

 

 

$

27,666,380

 

TD 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, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Revenue

$

15,356,085

 

 

$

5,207,064

 

 

$

46,095,853

 

 

$

16,002,904

 

Cost of revenue

 

(14,440,055

)

 

 

(4,894,442

)

 

 

(43,255,373

)

 

 

(15,056,539

)

Gross profit

 

916,030

 

 

 

312,622

 

 

 

2,840,480

 

 

 

946,365

 

Selling, general and administrative expenses

 

(628,078

)

 

 

(160,285

)

 

 

(1,951,503

)

 

 

(498,443

)

Acquisition, integration and restructuring costs

 

(46,418

)

 

 

(4,133

)

 

 

(172,266

)

 

 

(10,068

)

Operating income

 

241,534

 

 

 

148,204

 

 

 

716,711

 

 

 

437,853

 

Interest expense and finance charges, net

 

(52,119

)

 

 

(26,365

)

 

 

(142,430

)

 

 

(71,766

)

Other (expense) income, net

 

(1,852

)

 

 

4,796

 

 

 

(12,375

)

 

 

2,707

 

Income before income taxes

 

187,563

 

 

 

126,635

 

 

 

561,906

 

 

 

368,794

 

Provision for income taxes

 

(38,728

)

 

 

(31,931

)

 

 

(131,830

)

 

 

(93,165

)

Net income

$

148,835

 

 

$

94,705

 

 

$

430,076

 

 

$

275,628

 

Earnings per common share:

 

 

 

 

 

 

 

Basic

$

1.55

 

 

$

1.82

 

 

$

4.48

 

 

$

5.32

 

Diluted

$

1.55

 

 

$

1.81

 

 

$

4.47

 

 

$

5.27

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

95,115

 

 

 

51,275

 

 

 

95,355

 

 

 

51,204

 

Diluted

 

95,407

 

 

 

51,766

 

 

 

95,648

 

 

 

51,679

 

TD 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,
2022

 

May 31,
2022

 

August 31,
2021

 

August 31,
2022

 

August 31,
2021

Selling, general and administrative expenses

 

 

 

 

 

 

 

 

 

GAAP selling, general and administrative expenses

$

674,496

 

$

703,052

 

$

164,418

 

$

2,123,769

 

$

508,511

Acquisition, integration and restructuring costs

 

46,418

 

 

32,478

 

 

4,133

 

 

172,266

 

 

10,068

Amortization of intangibles

 

73,270

 

 

74,676

 

 

9,386

 

 

224,082

 

 

28,128

Share-based compensation

 

6,643

 

 

7,038

 

 

6,509

 

 

20,431

 

 

18,146

Purchase accounting adjustments

 

4,496

 

 

3,986

 

 

 

 

16,564

 

 

Adjusted selling, general and administrative expenses

$

543,669

 

$

584,874

 

$

144,390

 

$

1,690,426

 

$

452,169

 

Three Months Ended

 

Nine Months Ended

 

August 31,
2022

 

May 31,
2022

 

August 31,
2021

 

August 31,
2022

 

August 31,
2021

Operating income and operating margin

 

 

 

 

 

 

 

 

 

Revenue

$

15,356,085

 

 

$

15,269,791

 

 

$

5,207,064

 

 

$

46,095,853

 

 

$

16,002,904

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income

$

241,534

 

 

$

252,737

 

 

$

148,204

 

 

$

716,711

 

 

$

437,853

 

Acquisition, integration and restructuring costs

 

46,418

 

 

 

32,478

 

 

 

4,133

 

 

 

172,266

 

 

 

10,068

 

Amortization of intangibles

 

73,270

 

 

 

74,676

 

 

 

9,386

 

 

 

224,082

 

 

 

28,128

 

Share-based compensation

 

6,643

 

 

 

7,038

 

 

 

6,509

 

 

 

20,431

 

 

 

18,146

 

Purchase accounting adjustments

 

30,418

 

 

 

31,392

 

 

 

 

 

 

94,971

 

 

 

 

Non-GAAP operating income

$

398,283

 

 

$

398,321

 

 

$

168,232

 

 

$

1,228,461

 

 

$

494,195

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin

 

1.57

%

 

 

1.66

%

 

 

2.85

%

 

 

1.55

%

 

 

2.74

%

Non-GAAP operating margin

 

2.59

%

 

 

2.61

%

 

 

3.23

%

 

 

2.67

%

 

 

3.09

%

 

Three Months Ended

 

Nine Months Ended

 

August 31,
2022

 

May 31,
2022

 

August 31,
2021

 

August 31,
2022

 

August 31,
2021

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

Net income

$

148,835

 

$

148,917

 

$

94,705

 

 

$

430,076

 

$

275,628

 

Interest expense and finance charges, net

 

52,119

 

 

47,968

 

 

26,365

 

 

 

142,430

 

 

71,766

 

Provision for income taxes

 

38,728

 

 

49,597

 

 

31,931

 

 

 

131,830

 

 

93,165

 

Depreciation(1)

 

28,247

 

 

24,949

 

 

5,633

 

 

 

132,561

 

 

16,800

 

Amortization of intangibles

 

73,270

 

 

74,676

 

 

9,386

 

 

 

224,082

 

 

28,128

 

EBITDA

$

341,199

 

$

346,107

 

$

168,020

 

 

$

1,060,979

 

$

485,487

 

Other expense (income), net

 

1,852

 

 

6,255

 

 

(4,796

)

 

 

12,375

 

 

(2,707

)

Acquisition, integration and restructuring costs

 

42,025

 

 

32,478

 

 

7,258

 

 

 

115,002

 

 

13,193

 

Share-based compensation

 

6,643

 

 

7,038

 

 

6,509

 

 

 

20,431

 

 

18,146

 

Purchase accounting adjustments

 

30,418

 

 

31,392

 

 

 

 

 

94,971

 

 

 

Adjusted EBITDA

$

422,137

 

$

423,270

 

$

176,991

 

 

$

1,303,758

 

$

514,119

 

(1) Includes depreciation recorded in acquisition, integration, and restructuring costs.

TD SYNNEX Corporation

Reconciliation of GAAP to Non-GAAP financial measures

(Currency in thousands, except per share amounts)

(Amounts may not add due to rounding)

(continued)

 

Three Months Ended

 

Nine Months Ended

 

August 31,
2022

 

May 31,
2022

 

August 31,
2021

 

August 31,
2022

 

August 31,
2021

Net income and diluted EPS

 

 

 

 

 

 

 

 

 

Net income

$

148,835

 

 

$

148,917

 

 

$

94,705

 

 

$

430,076

 

 

$

275,628

 

Acquisition, integration and restructuring costs

 

48,730

 

 

 

34,759

 

 

 

7,258

 

 

 

178,691

 

 

 

13,193

 

Amortization of intangibles

 

73,270

 

 

 

74,676

 

 

 

9,386

 

 

 

224,082

 

 

 

28,128

 

Share-based compensation

 

6,643

 

 

 

7,038

 

 

 

6,509

 

 

 

20,431

 

 

 

18,146

 

Purchase accounting adjustments

 

30,418

 

 

 

31,392

 

 

 

 

 

 

94,971

 

 

 

 

Income taxes related to the above

 

(39,419

)

 

 

(34,525

)

 

 

(5,933

)

 

 

(121,827

)

 

 

(15,191

)

Income tax capital loss carryback benefit

 

(5,053

)

 

 

 

 

 

 

 

 

(8,299

)

 

 

 

Non-GAAP net income

$

263,424

 

 

$

262,257

 

 

$

111,925

 

 

$

818,125

 

 

$

319,904

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS(1)

$

1.55

 

 

$

1.55

 

 

$

1.81

 

 

$

4.47

 

 

$

5.27

 

Acquisition, integration and restructuring costs

 

0.50

 

 

 

0.36

 

 

 

0.14

 

 

 

1.86

 

 

 

0.25

 

Amortization of intangibles

 

0.76

 

 

 

0.77

 

 

 

0.18

 

 

 

2.33

 

 

 

0.54

 

Share-based compensation

 

0.07

 

 

 

0.07

 

 

 

0.12

 

 

 

0.21

 

 

 

0.35

 

Purchase accounting adjustments

 

0.32

 

 

 

0.33

 

 

 

 

 

 

0.99

 

 

 

 

Income taxes related to the above

 

(0.41

)

 

 

(0.36

)

 

 

(0.11

)

 

 

(1.27

)

 

 

(0.29

)

Income tax capital loss carryback benefit

 

(0.05

)

 

 

 

 

 

 

 

 

(0.09

)

 

 

 

Non-GAAP Diluted EPS(1)

$

2.74

 

 

$

2.72

 

 

$

2.14

 

 

$

8.50

 

 

$

6.12

 

(1) Diluted EPS is calculated using the two-class method. Unvested restricted stock awards granted to employees are considered participating securities. For purposes of calculating Diluted EPS, net income allocated to participating securities was approximately 0.6% of net income for both the three and nine months ended August 31, 2022, respectively, approximately 0.7% of net income for the three months ended May 31, 2022, and approximately 1.2% of net income for both the three and nine months ended August 31, 2021, respectively.

TD SYNNEX Corporation

Reconciliation of GAAP to Non-GAAP financial measures

(Amounts may not add due to rounding)

(continued)

 

Three Months Ended

 

Nine Months Ended

(in thousands)

August 31, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Free cash flow

 

 

 

 

 

 

 

Net cash (used in) provided by operating activities

$

(67,311

)

 

$

(55,525

)

 

$

(351,793

)

 

$

248,791

 

Purchases of property and equipment

 

(32,021

)

 

 

(4,997

)

 

 

(78,522

)

 

 

(14,111

)

Free cash flow

$

(99,332

)

 

$

(60,522

)

 

$

(430,315

)

 

$

234,680

 

 

 

Forecast

 

 

Three Months Ending November 30, 2022

(in millions, except per share amounts)

 

Low

 

High

Net income

 

$

138

 

 

$

177

 

Acquisition, integration and restructuring costs

 

 

40

 

 

 

40

 

Amortization of intangibles

 

 

80

 

 

 

80

 

Share-based compensation

 

 

9

 

 

 

9

 

Purchase accounting adjustments

 

 

30

 

 

 

30

 

Income taxes related to the above

 

 

(38

)

 

 

(38

)

Non-GAAP net income

 

$

259

 

 

$

298

 

 

 

 

 

 

Diluted EPS(1)

 

$

1.44

 

 

$

1.84

 

Acquisition, integration and restructuring costs

 

 

0.42

 

 

 

0.42

 

Amortization of intangibles

 

 

0.83

 

 

 

0.83

 

Share-based compensation

 

 

0.09

 

 

 

0.09

 

Purchase accounting adjustments

 

 

0.31

 

 

 

0.31

 

Income taxes related to the above

 

 

(0.40

)

 

 

(0.40

)

Non-GAAP Diluted EPS

 

$

2.70

 

 

$

3.10

 

(1) Diluted EPS is calculated using the two-class method. Unvested restricted stock awards granted to employees are considered participating securities. Net income allocable to participating securities is estimated to be approximately 0.9% of the forecast net income for the three months ending November 30, 2022.

TD SYNNEX Corporation

Calculation of Financial Metrics

Return on Invested Capital ("ROIC")

(Currency in thousands)

(Amounts may not add or compute due to rounding)

 

August 31,
2022

 

May 31,
2022

 

August 31,
2021

 

ROIC

 

 

 

 

 

 

Operating income (trailing fiscal four quarters)

$

902,076

 

 

$

808,746

 

 

$

638,233

 

 

Income taxes on operating income(1)

 

(152,953

)

 

 

(140,351

)

 

 

(162,054

)

 

Operating income after taxes

$

749,123

 

 

$

668,395

 

 

$

476,179

 

 

 

 

 

 

 

 

 

Total invested capital comprising equity and borrowings, less cash (last five quarters average)

$

9,809,290

 

 

$

7,930,664

 

 

$

2,270,051

 

 

 

 

 

 

 

 

 

ROIC

 

7.6

 

%

 

8.4

 

%

 

21.0

 

%

 

 

 

 

 

 

 

Adjusted ROIC

 

 

 

 

 

 

Non-GAAP operating income (trailing fiscal four quarters)

$

1,636,397

 

 

$

1,406,346

 

 

$

714,785

 

 

Income taxes on non-GAAP operating income(1)

 

(396,905

)

 

 

(343,813

)

 

 

(184,081

)

 

Non-GAAP operating income after taxes

$

1,239,492

 

 

$

1,062,533

 

 

$

530,704

 

 

 

 

 

 

 

 

 

Total invested capital comprising equity and borrowings, less cash (last five quarters average)

$

9,809,290

 

 

$

7,930,664

 

 

$

2,270,051

 

 

Tax effected impact of cumulative non-GAAP adjustments (last five quarters average)

 

489,671

 

 

 

377,350

 

 

 

167,660

 

 

Total non-GAAP invested capital (last five quarters average)

$

10,298,961

 

 

$

8,308,014

 

 

$

2,437,711

 

 

 

 

 

 

 

 

 

Adjusted ROIC

 

12.0

 

%

 

12.8

 

%

 

21.8

 

%

(1) Income taxes on GAAP operating income was calculated using the effective year-to-date tax rates during the respective periods. Income taxes on non-GAAP operating income was calculated by excluding the tax effect of taxable and deductible non-GAAP adjustments using the effective year-to-date tax rate during the respective periods.

TD SYNNEX Corporation

Calculation of Financial Metrics

Cash Conversion Cycle

(Currency in thousands)

(Amounts may not add or compute due to rounding)

 

 

 

Three Months Ended

 

 

 

August 31,
2022

 

May 31,
2022

 

August 31,
2021

Days sales outstanding

 

 

 

 

 

 

 

Revenue

 

(a)

$

15,356,085

 

$

15,269,791

 

$

5,207,064

Accounts receivable, net

 

(b)

 

8,114,004

 

 

7,851,536

 

 

2,229,640

Days sales outstanding

 

(c) = ((b)/(a))*the number of days during the period

 

49

 

 

47

 

 

39

 

 

 

 

 

 

 

 

Days inventory outstanding

 

 

 

 

 

 

 

Cost of revenue

 

(d)

$

14,440,055

 

$

14,314,002

 

$

4,894,442

Inventories

 

(e)

 

9,755,228

 

 

8,433,997

 

 

2,866,212

Days inventory outstanding

 

(f) = ((e)/(d))*the number of days during the period

 

62

 

 

54

 

 

54

 

 

 

 

 

 

 

 

Days payable outstanding

 

 

 

 

 

 

 

Cost of revenue

 

(g)

$

14,440,055

 

$

14,314,002

 

$

4,894,442

Accounts payable

 

(h)

 

13,718,980

 

 

12,521,137

 

 

3,222,284

Days payable outstanding

 

(i) = ((h)/(g))*the number of days during the period

 

88

 

 

80

 

 

61

 

 

 

 

 

 

 

 

Cash conversion cycle

 

(j) = (c)+(f)-(i)

 

23

 

 

21

 

 

32

 

Liz Morali
Investor Relations
510-668-8436
ir@tdsynnex.com

Bobby Eagle
Global Corporate Communications
727-538-5864
bobby.eagle@tdsynnex.com

Source: TD SYNNEX