SYNNEX Corp. (NYSE:SNX) Q4 2016 Earnings Conference Call - Final Transcript

Jan 10, 2017 • 05:00 pm ET

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SYNNEX Corp. (NYSE:SNX) Q4 2016 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Good afternoon. My name is Kate and I will be your conference operator today for the SYNNEX 2016 fourth-quarter and full-year earnings call. (Operator Instructions)This 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 Mike Vaishnav, SVP, Corporate Finance and Treasurer at SYNNEX Corporation. Please go ahead.

Executive
Mike Vaishnav

Thank you, Kate. Good afternoon and welcome to the SYNNEX Corporation earnings conference call for the fiscal 2016 fourth quarter ended November 30, 2016. 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 Cautionary Statements) This conference call is the property of SYNNEX Corporation and may not be recorded or rebroadcast without our specific written permission.

Now I would like to turn the call over to Marshall for an update on our financial performance. Marshall?

Executive
Marshall Witt

Thanks, Mike. First I'll review our results of operations and key financial metrics, and then conclude with guidance for the first quarter of fiscal 2017 before turning the call over to Kevin. Our Q4 net income and EPS, both GAAP and non-GAAP, exceeded our expectations, while revenue was in line with our expectation. On a consolidated basis, total revenue was $3.9 billion, up 9.5% compared to $3.5 billion in the same quarter of the prior year.

Adjusting for FX of $21.8 million, revenue in constant currency was 8.9% higher compared to the prior-year quarter. For the full fiscal year, SYNNEX's revenue was $14.1 billion, an increase of 5% from the prior year. Adjusting for FX of $37.3 million revenue increased 5.7% compared to the prior year. Technology Solutions segment revenues were $3.4 billion, representing an increase of 6.6% compared to the prior-year quarter. The TS revenue increase was mainly due to higher seasonal growth than expected from our Hyve Solutions business and growth in consumer and public sectors, partially offset by Japan.

On a constant currency basis, Technology Solutions segment revenue increased approximately 5.9% year over year. Concentrix revenues were $500.4 million, up 33.9% from $373.6 million in the prior-year quarter. The Minacs acquisition contributed $120.9 million in revenue. Adjusting for the acquisition and the negative impact of FX of $0.9 million, revenue in constant currency increased 1.8%. Now turning to gross profit. Our gross profit on Q4 revenues was $378.8 million, or 9.7% of revenue, compared to $312.7 million, or 8.8% of revenues in Q4 of 2015.

The increase in gross profit dollars was due to higher sales in both our segments and stronger margins in the Technology Solutions segment. In addition to seasonally stronger Hyve performance, commercial and our specialty businesses had solid results. For the full year, gross profit dollars improved 7.7% to $1.3 billion, and gross margin was 9.1% compared to 8.9% in the prior year -- in the prior fiscal year.

Q4 total adjusted selling, general and administrative expenses were $223.2 million, or 5.74% of our revenue, compared to