Synnex Corp (SNX), a leading business process services company, has announced a 3.49 percent decline in profit for the quarter ended Aug. 31, 2014. Higher operating and other expenses have pulled down earnings during the quarter. The company earned $44.99 million or $1.15 a share in the third-quarter compared with $46.61 million or $0.19 a share a year ago.
Revenue during the third-quarter climbed 29.31 percent to $3,535.20 million from $2,733.91 million in the last year period.
Gross margin expanded by 247 basis points over the last year period to 8.48 percent. Total expenses as a percentage of revenues increased to 97.77 percent from 97.68 percent in the same period last year. That has resulted in contraction of 9 basis points in operating margins to 2.23 percent.
The company reported operating income of $78.80 million, compared with $63.50 million in the previous year period.
''Our fourth quarter guidance reflects healthy year-on-year growth in Technology Solutions and continued strong performance in Concentrix,'' stated Kevin Murai, president and CEO of SYNNEX Corporation. ''We are positive on the market demand and confident in our ability to execute.''
Cash Position
As on Aug. 31, 2014, the company's cash balance stood at $127.66 million, down 8.39 percent or $11.70 million from Aug. 31, 2013.
Working Capital
Synnex Corp has witnessed a decline in the working capital over the last one year. The company's working capital stood at $1092.03 million as at Aug. 31, 2014, down $10.59 million or 0.96 percent from $1102.62 million on Aug. 31, 2013. It registered a decrease in current ratio to 1.43 as at Aug. 31, 2014 from 1.76 on Aug. 31, 2013.
The company's cash conversion cycle (CCC) was increased to 48 days for third quarter from 40 days for the last year period.
Days' sales outstanding moved up to 48 days for third quarter compared with 43 days for the last year period. This indicates the company has extended credit period to clients for making payment.
The company's days' inventory outstanding increased to 41 days for third quarter compared with 35 days for the last year period. This suggests the company took more time to convert the inventory into sales.
The company's days' payable outstanding went up to 41 days for third quarter compared with 37 days for the last year period. This reflects that the company has made late payment to vendors compared to prior year period.
Debt Position
Synnex Corp has witnessed an increase in the total debt over the last one year. As on Aug. 31, 2014, total debt stood at $1000.80 million, up 328.97 percent or $767.50 million, from Aug. 31, 2013. Total debt was 22.35 percent of total assets as on Aug. 31, 2014, compared with 7.91 percent on Aug. 31, 2013. It has witnessed an increase debt to equity ratio to 0.62 on Aug. 31, 2014 compared with 0.17 on Aug. 31, 2013.
Shares of the company gained $0.74 or 1.20 percent to settle at $62.19 on Monday.
