SYNNEX Corp. (NYSE:SNX) Q4 2014 Earnings Conference Call - Final Transcript

Jan 12, 2015 • 05:00 pm ET


SYNNEX Corp. (NYSE:SNX) Q4 2014 Earnings Conference Call - Final Transcript


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Good afternoon. My name is Gabrielle and I will be your conference operator today. At this time, I would like to welcome everyone to the SYNNEX 2014 Fourth Quarter Earnings Conference Call. (Operator Instructions) Today's conference is being recorded. If you have any objections, you may disconnect. Thank you.At this time, I would like to pass the call over to Deirdre Skolfield, Director of Investor Relations at SYNNEX Corporation. Ms. Skolfield, you may begin your conference.

Deirdre Skolfield

Thank you, Gabrielle. Good afternoon and welcome to the SYNNEX Corporation fiscal 2014 fourth quarter and year-end conference call for the period ended November 30, 2014. Joining us on today's call are Kevin Murai, President and CEO; Dennis Polk, COO; Marshall Witt, CFO; and Chris Caldwell, EVP and President of Concentrix Corporation.

(Forward-Looking Statements Cautionary) ****

Deirdre Skolfield

*** Now, I'd like to turn the call over to Marshall for an update on our financial performance. Marshall?

Marshall Witt

Thank you, Deirdre. Good afternoon, everyone, and thank you for joining our call today. I will summarize our results of operations and key financial metrics and conclude with guidance for the first quarter of fiscal 2015 before turning the call over to Kevin.

Technology Solutions and Concentrix business segment delivered exceptional results in Q4 and for the entire fiscal year of 2014. Our Q4 revenues non-GAAP net income and diluted non-GAAP EPS all came in above the high end of the outlook provided on our Q3 call.

On a consolidated basis, total revenue was $3.82 billion, up 25% compared to $3.06 billion in the same quarter of the prior year. Our gross profit on Q4 revenues increased 74.4% to $340 million or 8.2% of revenue compared to $180 million or 5.9% of revenues in Q4 of 2013. The increase in revenue and gross profit was largely due to the impact of the IBM CRM acquisition and growth in Technology Solutions.

Technology Solutions segment revenues grew 16% organically year-over-year. And Concentrix segment revenues were $342 million, up from $52 million in the year ago quarter due primarily to the acquisition of the IBM CRM business and consistent with our expectations.

Q4 total selling, general and administrative expenses excluding one-time acquisition and integration expenses and amortization cost increased as a percentage of revenues to 4.95% or $189 million. This compares with 3.35% of revenues or $103 million in the fourth quarter of fiscal 2013. The increase was due primarily to the impact of the IBM CRM acquisition.

We are effectively managing our costs as our business grows. We have made significant investments in people, systems and infrastructure which we believe enable us to effectively and efficiently manage our global network. Q4 non-GAAP income before non-operating item, income taxes and non-controlling interest increased by 52% to $124.9 million or 3.27% of revenues compared to $77.3 million or 2.53% in the prior year fourth quarter.

At the segment level, Q4 Technology Solutions non-GAAP income before non-operating items, income taxes and non-controlling interest was $95.6 million or 2.74% of revenues, up 30% from the prior