SYNNEX Corporation (SNX) has reported a 32.70 percent jump in profit for the quarter ended Feb. 28, 2017. The company has earned $61.79 million, or $1.54 a share in the quarter, compared with $46.56 million, or $1.17 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $73.12 million, or $1.82 a share compared with $54.63 million or $1.37 a share, a year ago. Revenue during the quarter grew 12.65 percent to $3,520.87 million from $3,125.62 million in the previous year period. Gross margin for the quarter expanded 62 basis points over the previous year period to 9.71 percent. Total expenses were 97.11 percent of quarterly revenues, down from 97.58 percent for the same period last year. This has led to an improvement of 47 basis points in operating margin to 2.89 percent.
Operating income for the quarter was $101.76 million, compared with $75.63 million in the previous year period.
However, the adjusted operating income for the quarter stood at $118.86 million compared to $88.33 million in the prior year period. At the same time, adjusted operating margin improved 55 basis points in the quarter to 3.38 percent from 2.83 percent in the last year period.
“Solid execution in our Technology Solutions focused growth areas and strong overall performance in our Concentrix business, led to record Q1 results,” said Kevin Murai, president and chief executive officer, SYNNEX Corporation. “Our diversified business strategy positions us well to pursue new opportunities and to proactively respond to the dynamic markets we compete in.”
For the second-quarter, Synnex Corp expects revenue to be in the range of $3,570 million to $3,770 million. Synnex Corp forecasts net income to be in the range of $57.70 million to $60.90 million for the second-quarter. Synnex Corp projects adjusted net income to be in the range of $68.30 million to $71.50 million for the second-quarter. The company projects diluted earnings per share to be in the range of $1.44 to $1.52 for the second-quarter. On an adjusted basis, the company projects diluted earnings per share to be in the range of $1.70 to $1.78 for the second-quarter.
Working capital declines
SYNNEX Corporation has witnessed a decline in the working capital over the last year. It stood at $1,581 million as at Feb. 28, 2017, down 10.07 percent or $176.94 million from $1,757.94 million on Feb. 29, 2016. Current ratio was at 1.68 as on Feb. 28, 2017, down from 2.08 on Feb. 29, 2016. Cash conversion cycle (CCC) has decreased to 29 days for the quarter from 47 days for the last year period. Days sales outstanding went down to 45 days for the quarter compared with 47 days for the same period last year.
Days inventory outstanding has decreased to 26 days for the quarter compared with 42 days for the previous year period. At the same time, days payable outstanding was almost stable at 41 days for the quarter, when compared with the previous year period.
Debt increases substantially
SYNNEX Corporation has witnessed an increase in total debt over the last one year. It stood at $1,009.25 million as on Feb. 28, 2017, up 43.21 percent or $304.51 million from $704.74 million on Feb. 29, 2016. Total debt was 19.76 percent of total assets as on Feb. 28, 2017, compared with 16.84 percent on Feb. 29, 2016. Debt to equity ratio was at 0.50 as on Feb. 28, 2017, up from 0.39 as on Feb. 29, 2016.
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