SYNNEX Corp. (NYSE:SNX) Q4 2018 Earnings Conference Call Transcript

Jan 10, 2019 • 05:00 pm ET

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SYNNEX Corp. (NYSE:SNX) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon and welcome to SYNNEX Fourth Quarter Fiscal 2018 Earnings Conference Call. Today's call is being recorded, and all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

At this time for opening remarks, I would like to pass the call over to Marshall Witt, CFO at SYNNEX Corporation. Mr. Witt, you may begin.

Executive
Marshall Witt

Thank you, Kelly, and welcome to the SYNNEX Corporation's earnings call for the fourth quarter fiscal 2018 ended November 30, 2018.

Before I begin my remarks, you typically hear Mary Lai, Head of Investor Relations, provide the introductions and Safe Harbor. Mary is on maternity leave, celebrating the birth of her second son. So first congratulations to Mary and Lai. And second, Mary, she is difficult to fill, so we are looking forward to you return in the near future.

Now on to the call. Joining me today on the call is our President and CEO, Dennis Polk; our President of Concentrix, Chris Caldwell. We will review fourth quarter fiscal 2018's financial results. After the prepared remarks, we will open the call to a Q&A session. As a reminder, today's call is being webcast live and will be recorded. Please note that some of the information you will hear today consist of forward-looking statements, such statements may relate to, without limitation, revenue, non-GAAP net income and diluted EPS, amortization of intangibles, acquisition-related and integration expenses, margin, cost, tax rates, interest expense and finance charges, payroll, strategy and integration.

Actual results or trends could differ materially from our expectations. For more information, please refer to the risk factors discussed in our fiscal 2017 Form 10-K and the discussion of forward-looking statements in our earnings release and Form 8-K filed with the SEC today. SYNNEX assumes no obligation to update any forward-looking statements, which speak as of their respective dates.

Also during this call, we will reference certain non-GAAP financial information. Reconciliation of non-GAAP and GAAP reporting is included in today's earnings release and the related Form 8-K available on our website at www.synnex.com. This conference call is the property of SYNNEX Corporation and may not be recorded or rebroadcasted without our specific written permission.

With that, let's go ahead and review fourth quarter results and Q1 guidance. Our fourth quarter revenue both GAAP and non-GAAP net income and diluted EPS significantly exceeded the high end of our original guidance and hit record highs. On a consolidated basis, total revenue was a record $5.6 billion, up 6% compared to $5.3 billion in the same quarter last year. Adjusting for FX, revenue increased 7%. Technology solutions revenue was $4.7 billion, a 3% reduction over the prior year period. The expected decrease was primarily due to a tough prior year compare due to our focus on profitably operating the high business and the impact of sales growth driven by revenue that is subject to gross versus net treatment. If you adjust for the growth in sales attributable to