SYNNEX Corporation (NYSE:SNX) Q3 2020 Earnings Conference Call - Final Transcript

Sep 29, 2020 • 05:00 pm ET


SYNNEX Corporation (NYSE:SNX) Q3 2020 Earnings Conference Call - Final Transcript


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Good afternoon, my name is Chantelle and I'll be your conference operator today. I would like to welcome everyone to the SYNNEX Third Quarter Fiscal 2020 earnings 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, SYNNEX Corp's CFO. Marshall, you may begin.

Marshall Witt

Thank you, Chantelle, and good afternoon everyone and welcome to the SYNNEX third quarter fiscal 2020 earnings call. Joining me today to review our financial results are Dennis Polk, President and CEO; and Chris Caldwell, President of Concentrix.

Before we continue, let me remind everyone that today's discussion contain forward-looking statements within the meaning of the federal securities laws, which statements include any predictions, estimates, projections or other statements about future events, including as to the expected spin-off, demand, economic recovery, growth, expenses, debt, cash, margin and liquidity. Actual results may differ materially from those mentioned in these forward-looking statements, as a result of risks and uncertainties discussed in today's earnings release, in the Form 8-K we filed today and in the Risk Factors section of our Form 10-K, and our other reports and filings with the SEC. We do not intend to update any forward-looking statements. Also during this call, we will reference certain non-GAAP financial information. Reconciliation of non-GAAP and GAAP reporting is included in our earnings press release and the related Form 8-K, available under the Investor Relations section of our website. This conference call is the property of SYNNEX Corporation and may not be recorded or rebroadcast without our prior permission.

And so now, I'll cover some of the key highlights from Q3, and discuss Q4 guidance. In the face of continuing economic uncertainty in these unprecedented times, our revenue, net income and diluted EPS, all exceeded our expectations, reflecting our resiliency and ability to do what we do best. Our GAAP results announced today, while continuing to be impacted by COVID, have not been adjusted for COVID-19 costs. Where appropriate, I will reference the financial impact COVID-19 had on Q3 results.

On a consolidated basis, total revenue was a third quarter record of $6.5 billion, up 4% compared to $6.2 billion in the same quarter last year. On a constant currency basis, revenue was up 5% compared to the prior year quarter. Our consolidated gross profit dollars totaled $708 million, down 2% or 18 million versus a year ago, and gross margin was 11% compared to 11.7% a year ago. Total adjusted SG&A expense was $448 million or 7% of revenue, down $8 million compared to the year ago quarter. Consolidated non-GAAP operating income was $260 million, down $10 million or 4% compared to a year ago. Non-GAAP operating margin of 4% was lower by 34 basis points, compared to the prior year period.

Now shifting gears to Q3 operating performance by business segment. First on