PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents SYNNEX Corporation's unaudited consolidated financial statements, including balance sheets and cash flows, reflecting the Concentrix separation [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$7.73 billion** from **$13.47 billion** due to the Concentrix spin-off, impacting stockholders' equity Consolidated Balance Sheet Highlights (in thousands) | Account | Feb 28, 2021 | Nov 30, 2020 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$7,726,033** | **$13,468,590** | **($5,742,557)** | | Current assets of discontinued operations | $0 | $1,421,065 | ($1,421,065) | | Noncurrent assets of discontinued operations | $0 | $3,754,180 | ($3,754,180) | | **Total Liabilities** | **$5,596,735** | **$9,129,730** | **($3,532,995)** | | Current liabilities of discontinued operations | $0 | $985,840 | ($985,840) | | Noncurrent liabilities of discontinued operations | $0 | $1,866,807 | ($1,866,807) | | **Total Stockholders' Equity** | **$2,129,298** | **$4,338,860** | **($2,209,562)** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Revenue increased **21.0%** to **$4.94 billion**, with income from continuing operations rising to **$87.8 million** Q1 2021 vs Q1 2020 Performance (in thousands, except per share amounts) | Metric | Three Months Ended Feb 28, 2021 | Three Months Ended Feb 29, 2020 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $4,939,014 | $4,081,024 | +21.0% | | Gross Profit | $304,567 | $255,105 | +19.4% | | Operating Income | $141,748 | $100,445 | +41.1% | | Income from Continuing Operations | $87,822 | $68,514 | +28.2% | | Diluted EPS from Continuing Operations | $1.69 | $1.32 | +28.0% | | Income from Discontinued Operations | $0 | $54,070 | -100.0% | | Net Income | $87,822 | $122,584 | -28.4% | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was **$25.0 million**, with a **$149.9 million** transfer to Concentrix impacting financing activities Cash Flow Summary (in thousands) | Activity | Three Months Ended Feb 28, 2021 | Three Months Ended Feb 29, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $24,977 | $58,141 | | Net cash used in investing activities | ($4,041) | ($54,304) | | Net cash provided by (used in) financing activities | ($147,219) | $67,567 | - A significant financing cash outflow was the net transfer of **$149.9 million** to Concentrix as part of the separation[25](index=25&type=chunk) [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the Concentrix separation, and the subsequent merger agreement with Tech Data Corporation - On December 1, 2020, the company completed the separation of its Concentrix business, which is now an independent public company[28](index=28&type=chunk) - On March 22, 2021, SYNNEX entered into a merger agreement to acquire Tech Data Corporation in a cash and stock transaction[128](index=128&type=chunk) - In connection with the Tech Data merger, SYNNEX secured a debt commitment letter for a **$4.0 billion** bridge facility and a **$3.5 billion** revolving credit facility[131](index=131&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2021 financial performance, highlighting **21.0%** revenue growth, operating income increase, and the Tech Data merger - Revenue increased by **21.0%** to **$4.94 billion** in Q1 2021, driven by broad-based demand for IT products supporting remote work[165](index=165&type=chunk)[166](index=166&type=chunk) - Operating income rose **41.1%** to **$141.7 million**, with operating margin improving to **2.87%** due to growth and scale efficiencies[171](index=171&type=chunk) Non-GAAP Financial Highlights (in thousands, except per share amounts) | Metric | Three Months Ended Feb 28, 2021 | Three Months Ended Feb 29, 2020 | | :--- | :--- | :--- | | Non-GAAP operating income | $156,004 | $115,523 | | Non-GAAP operating margin | 3.16% | 2.83% | | Adjusted EBITDA | $161,502 | $121,399 | | Non-GAAP diluted EPS from continuing operations | $1.89 | $1.42 | - The cash conversion cycle improved significantly to **32 days** from **57 days** year-over-year, due to faster inventory turnover and accounts receivable collections[181](index=181&type=chunk)[182](index=182&type=chunk) - The company announced a merger agreement to acquire Tech Data for **$1.61 billion** in cash and **44 million** shares of common stock[152](index=152&type=chunk)[153](index=153&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages foreign currency and interest rate risks, using forward contracts to hedge principal non-functional currencies - The company uses forward contracts to hedge foreign currency risk on assets and liabilities denominated in non-functional currencies[219](index=219&type=chunk) Hypothetical Change in Fair Value of Forward Contracts (in thousands) | Scenario (vs. USD) | Gain/(Loss) as of Feb 28, 2021 | | :--- | :--- | | 10% Weakening | ($20,369) | | 10% Strengthening | $21,699 | [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, despite changes from the Concentrix separation - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[223](index=223&type=chunk) - The Concentrix separation did not materially affect the company's internal control over financial reporting[224](index=224&type=chunk) PART II - OTHER INFORMATION [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) New and updated risk factors primarily concern the proposed Tech Data acquisition and the discontinuation of LIBOR - The success of the Tech Data merger depends on realizing anticipated benefits, subject to integration and employee retention risks[229](index=229&type=chunk)[230](index=230&type=chunk) - Failure to complete the merger could negatively impact SYNNEX's stock price and business, potentially incurring a termination fee of up to **$132 million**[237](index=237&type=chunk)[241](index=241&type=chunk) - The company expects to incur substantial additional debt, increasing total debt to approximately **$4 billion**, impacting financial position and credit rating[240](index=240&type=chunk) - The discontinuation of LIBOR by the end of 2021 creates uncertainty and could adversely impact interest expense on variable-rate debt[243](index=243&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the Form 10-Q, including the Tech Data Merger Agreement and financing letters - Key exhibits filed include the Merger Agreement with Tiger Parent (AP) Corporation, the Bridge Commitment Letter from Citigroup, and various certifications[245](index=245&type=chunk)

Creating a Leading Global IT Solutions Distributor March 22, 2021 Important Information Additional Information and Where to Find It In connection with the proposed transaction between SYNNEX Corporation ("SYNNEX") and Tiger Parent (AP) Corporation, the parent corporation of Tech Data Corporation, a Florida corporation, SYNNEX plans to file relevant materials with the Securities and Exchange Commission (the "SEC"), including a proxy statement on Schedule 14A. Promptly after filing its definitive proxy statem ...

Financial Data and Key Metrics Changes - Total revenue for Q1 was $4.9 billion, up 21% year-over-year [27] - Gross profit totaled $305 million, up 19% or $49 million compared to the prior year; gross margin was 6.2%, consistent with the prior year [27] - Non-GAAP operating income was $156 million, up $40 million or 35% versus the prior year; non-GAAP diluted EPS from continuing operations was $1.89, up from $1.42 in the prior year [29] Business Line Data and Key Metrics Changes - Strong demand for client devices like notebooks and Chromebooks, as well as continued demand for security, cloud, and collaboration solutions [36] - Performance came from across all customer segments with no exceptions in the contribution to growth [36] Market Data and Key Metrics Changes - All regions performed well, with Canada and Japan exceeding expectations [37] - SYNNEX has a well-established presence in Japan, where Tech Data does not, while Tech Data is well-established in Europe, where SYNNEX has limited access [17] Company Strategy and Development Direction - The merger with Tech Data is expected to accelerate strategic growth initiatives by multiple years [9] - The combined company will deliver superior value for shareholders and offer exceptional reach, efficiency, and expertise across the technology ecosystem [13] - Focus on investing in next-generation technologies such as cloud, analytics, IoT, and security [15][69] Management's Comments on Operating Environment and Future Outlook - Management is encouraged about the IT spending environment and anticipates continued growth [38] - The work-from-home trend is expected to provide a tailwind for business as companies invest in IT capabilities [50] - The company expects revenue in Q2 to be in the range of $4.7 billion to $5 billion [32] Other Important Information - The merger transaction is valued at $7.2 billion, with pro forma revenue of $57 billion expected for the combined company [23][24] - The company expects to realize $100 million of net synergies in year one and $200 million in year two [25] Q&A Session Summary Question: Can the combined company growth rate be higher than the two separate companies? - Management expects significant opportunities to grow the company faster than market rates due to complementary services and offerings [47] Question: What structural ongoing impact could there be from hybrid work? - Management believes that companies will need to invest in additional IT capabilities for remote work, providing a tailwind for business [50] Question: Can you elaborate on the nature of the $200 million in synergies? - Synergies will come from leveraging IT systems, facility consolidations, and corporate spend savings [57] Question: Are there any dis-synergies anticipated with the merger? - Management does not foresee significant dis-synergies, as customer sets are complementary [58] Question: How will the transaction be financed? - The transaction will be financed through a combination of a term loan and unsecured bonds, with a focus on maintaining liquidity for growth [61] Question: What is the status of Tech Data's digital transformation investment? - The joint vision is to continue investing in the business, potentially aligning with SYNNEX's capabilities [66] Question: How did the transaction come about and what were the valuation thoughts? - The combination was seen as a way to deliver significant value, with the transaction multiple consistent with industry standards [85]

PART I This section details SYNNEX's business operations, segments, products, customers, and human capital post-Concentrix separation, alongside risk factors, property, legal, and executive officer information [Item 1. Business](index=3&type=section&id=Item%201.%20Business) SYNNEX, a Fortune 200 company, provides technology distribution and integration solutions, focusing on its Technology Solutions segment after the tax-free separation of Concentrix - SYNNEX Corporation completed the separation of its customer experience services business, Concentrix Corporation, on December 1, 2020, making Concentrix an independent public company[16](index=16&type=chunk) - Post-separation, SYNNEX focuses on its Technology Solutions segment, distributing over 40,000 technology products from more than 500 OEM suppliers to over 25,000 resellers, system integrators, and retailers[19](index=19&type=chunk) - The company had approximately **280,000** employees worldwide as of November 30, 2020, which reduced to approximately **8,800** full-time and temporary employees worldwide after the Concentrix separation on December 1, 2020[24](index=24&type=chunk) Segment Consolidated Revenue | Segment | Consolidated Revenue (FY2020) | Consolidated Revenue (FY2019) | Consolidated Revenue (FY2018) | | :----------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Technology Solutions | 81% | 80% | 88% | | Concentrix | 19% | 20% | 12% | [Company Overview and Separation](index=3&type=section&id=Company%20Overview%20and%20Separation) SYNNEX completed the tax-free separation of Concentrix Corporation on December 1, 2020, making Concentrix an independent public company - SYNNEX Corporation is a Fortune 200 company providing distribution, systems design, and integration solutions for the technology industry[15](index=15&type=chunk) - On December 1, 2020, SYNNEX completed the tax-free separation of its customer experience services business, Concentrix Corporation, which is now an independent public company[16](index=16&type=chunk) - Post-separation, SYNNEX no longer consolidates Concentrix's financial results within its continuing operations[16](index=16&type=chunk) [Business Segments](index=3&type=section&id=Business%20Segments) SYNNEX operated with Technology Solutions and Concentrix segments, with Technology Solutions focusing on IT distribution and Concentrix on customer experience services before separation - As of November 30, 2020, SYNNEX operated with two reportable segments: Technology Solutions and Concentrix[17](index=17&type=chunk) - The Technology Solutions segment distributes peripherals, IT systems (including data center server and storage solutions), system components, software, networking, communications, security equipment, consumer electronics, and provides systems design and integration solutions[17](index=17&type=chunk)[18](index=18&type=chunk) - The Concentrix segment offered technology-infused strategic solutions and end-to-end business services focused on customer experience, process optimization, technology innovation, front and back-office automation, and business transformation[18](index=18&type=chunk)[22](index=22&type=chunk) [Products and Suppliers](index=4&type=section&id=Products%20and%20Suppliers) The Technology Solutions segment distributes over 40,000 products from more than 500 OEM suppliers, including major tech companies - The Technology Solutions segment distributes over **40,000** technology products from more than **500** OEM suppliers[19](index=19&type=chunk)[26](index=26&type=chunk) Technology Solutions Segment Product Mix by Category (FY2018-2020) | Product Category | Range | | :----------------------------------- | :---------- | | Peripherals | 21% - 25% | | IT Systems | 30% - 35% | | System Components and Integration Solutions | 9% - 14% | | Software | 16% - 20% | | Networking Equipment | 13% - 15% | - Key OEM suppliers include Alphabet Inc. (Google), ASUSTeK Computer Inc., Cisco Systems, Inc., HP Inc., Hewlett-Packard Enterprise Company, Intel Corporation, Lenovo Group Ltd, Microsoft Corporation, and Samsung Semiconductor, Inc[27](index=27&type=chunk) Revenue from HP Products and Services | Fiscal Year | % of Consolidated Revenue | | :---------- | :------------------------ | | 2020 | 12% | | 2019 | 12% | | 2018 | 13% | [Customers](index=5&type=section&id=Customers) Technology Solutions serves over 25,000 resellers and retailers, while Concentrix (pre-separation) served over 650 clients across diverse industry verticals - The Technology Solutions segment serves over **25,000** resellers, system integrators, and retailers, including value-added resellers, corporate resellers, government resellers, direct marketers, and national/regional retailers[19](index=19&type=chunk)[31](index=31&type=chunk) - The Concentrix segment served over **650** clients across five primary industry verticals: banking, financial services and insurance; communications and media; healthcare; retail, travel and e-commerce; and technology and consumer electronics[32](index=32&type=chunk) Customer Concentration | Fiscal Year | % of Consolidated Revenue from One Customer | | :---------- | :------------------------------------------ | | 2020 | 19% | | 2019 | 19% | | 2018 | 17% | [Services and Solutions](index=5&type=section&id=Services%20and%20Solutions) Technology Solutions provides logistics, integration, cloud, and financing services, while Concentrix (pre-separation) offered customer lifecycle management and business process optimization - Technology Solutions offers pick, pack, and ship operations, systems design and integration (build-to-order, configure-to-order), logistics services, cloud services (proprietary platform for public, IaaS, PaaS, SaaS, Security, Mobility, IoT, hybrid solutions), online services (EDI, XML, web-based links, mobile apps), financing services, and marketing services for OEM suppliers[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) - Concentrix (pre-separation) provided customer lifecycle management, marketing solutions, third-party administration of insurance policies, enterprise mobile development, automation and process optimization, and licensed technology assets[43](index=43&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) [Sales and Marketing](index=8&type=section&id=Sales%20and%20Marketing) Technology Solutions employs dedicated and regional sales teams, while Concentrix (pre-separation) focused on industry-specific sales and strategic client relationships - Technology Solutions uses dedicated sales professionals for large commercial, government, and retail customers, regional sales teams for smaller resellers/OEMs, and specialists for product management and business development[50](index=50&type=chunk) - Concentrix (pre-separation) marketed services through a sales force organized by industry vertical and geography, focusing on long-term strategic relationships and C-level engagement to drive client value and satisfaction[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) [Operations](index=8&type=section&id=Operations) Technology Solutions operates 63 facilities with automated IT systems, while Concentrix (pre-separation) had over 284 global delivery centers with certified technology - Technology Solutions operates approximately **63** distribution and administrative facilities in North/South America, Asia-Pacific, and China, utilizing highly automated IT systems for efficient order fulfillment, inventory management, and reduced shipping costs[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - Concentrix (pre-separation) had global delivery capabilities with over **284** centers in **40** countries, leveraging proprietary technology for efficient and secure customer contact across multiple channels, with all delivery centers PCI DSS and ISO certified[58](index=58&type=chunk) [International Operations](index=9&type=section&id=International%20Operations) International operations, contributing significantly to revenue, expose the company to foreign currency exchange rate risks International Revenue as % of Consolidated Revenue | Fiscal Year | % of Consolidated Revenue | | :---------- | :------------------------ | | 2020 | 34% | | 2019 | 34% | | 2018 | 28% | - International operations expose the company to risks from foreign currency exchange rate changes, particularly in regions like the Philippines and India where Concentrix had significant operations[61](index=61&type=chunk)[62](index=62&type=chunk) [Seasonality](index=9&type=section&id=Seasonality) Both segments historically experienced higher sales in the fourth fiscal quarter due to capital budgeting and customer purchasing cycles - Both Technology Solutions and Concentrix segments historically experienced higher sales in the fourth fiscal quarter due to capital budgeting, federal government spending, and customer purchasing cycles[63](index=63&type=chunk)[64](index=64&type=chunk) [Purchasing](index=9&type=section&id=Purchasing) Efficient purchasing is critical due to product costs and inventory investment, supported by proprietary systems for demand forecasting and supplier incentive optimization - Efficient purchasing operations are critical due to product cost being the largest expense and IT/CE product inventory being a major working capital investment[65](index=65&type=chunk) - The company uses proprietary information systems for forecasting demand, managing inventory levels, and optimizing OEM supplier incentive programs (rebates, price protection, discounts)[67](index=67&type=chunk)[68](index=68&type=chunk) [Financial Services](index=10&type=section&id=Financial%20Services) Technology Solutions provides diverse customer financing options, including net terms and leasing, while actively managing credit risk - Technology Solutions offers various financing options to customers, including net terms, third-party leasing, floor plan financing, and direct end-user payment arrangements, while closely monitoring creditworthiness and utilizing credit insurance[69](index=69&type=chunk)[70](index=70&type=chunk) [Information Technology](index=10&type=section&id=Information%20Technology) Technology Solutions uses scalable internal IT systems for order management, while Concentrix (pre-separation) invested in IT for workforce management and customer contact - The Technology Solutions segment's internally developed IT systems manage the entire order cycle, including processing, billing, and payment tracking, and are scalable for growth[71](index=71&type=chunk)[72](index=72&type=chunk) - Concentrix (pre-separation) invested in IT systems, infrastructure, automation, and security to enhance workforce management and productivity, employing a broad range of technology for efficient customer contact and business intelligence[73](index=73&type=chunk) [Competition](index=10&type=section&id=Competition) The IT product industry is highly competitive, with Technology Solutions facing distributors and OEMs, and Concentrix (pre-separation) competing with global service providers - The IT product industry is highly competitive, based on product availability, credit terms, price, delivery speed, sales/marketing effectiveness, and technical support[74](index=74&type=chunk) - Major competitors in Technology Solutions include Arrow Electronics, Ingram Micro, ScanSource, and Tech Data Corporation, with additional competition from OEM suppliers selling directly[75](index=75&type=chunk) - The Concentrix segment (pre-separation) faced intense competition from regional and global companies like Accenture, Genpact, Teleperformance, and TTEC Holdings[77](index=77&type=chunk) [Human Capital Resources](index=11&type=section&id=Human%20Capital%20Resources) SYNNEX, with approximately 270,000 associates (pre-separation), prioritizes diversity, pay equity, employee engagement, and health/safety, adapting to remote work during COVID-19 - As of November 30, 2020, SYNNEX had approximately **270,000** full-time and **7,900** temporary associates, with **7,500** full-time and **1,300** temporary associates in the Technology Solutions segment[79](index=79&type=chunk) - The company is committed to fostering a diverse and inclusive workplace, with women representing **25%** of the board and **43%** of the associate base[81](index=81&type=chunk) - SYNNEX ensures pay equity through market-competitive, performance-based total rewards, conducting annual pay equity analyses[82](index=82&type=chunk)[83](index=83&type=chunk) - Employee engagement is measured through annual surveys (nearly **80%** participation in 2020), and the company invests in training and development opportunities[84](index=84&type=chunk)[85](index=85&type=chunk) - Health, safety, and wellness are prioritized, with a global injury/illness reporting system and a wellness program, adapting to COVID-19 with remote work and on-premise safety measures[86](index=86&type=chunk) [Available Information](index=12&type=section&id=Available%20Information) SYNNEX provides public access to its SEC filings and Code of Ethical Business Conduct on its website - SYNNEX makes its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments available free of charge on its website (http://www.synnex.com) and the SEC's website (http://www.sec.gov)[87](index=87&type=chunk)[88](index=88&type=chunk) - A Code of Ethical Business Conduct, applicable to all employees including executive officers, is available on the company's investor relations webpage[87](index=87&type=chunk) [Item 1A. Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) SYNNEX faces risks from market fluctuations, supplier dependence, low margins, capital needs, customer credit, operational disruptions, Concentrix separation, macroeconomic factors, and regulatory changes - Operating results are subject to fluctuations due to factors like business acquisitions/dispositions, economic conditions, loss of major suppliers/customers, product mix, competition, and trends towards cloud computing[91](index=91&type=chunk)[95](index=95&type=chunk) - High dependence on a limited number of OEM suppliers (e.g., HP accounted for **12%** of consolidated revenue in FY2020) and short-term agreements pose risks of termination or changes in terms[95](index=95&type=chunk)[96](index=96&type=chunk) - Low gross margins in the IT and CE products industry magnify the impact of revenue and cost variations, with limited protection from inventory value declines due to rapid technological change or price reductions[98](index=98&type=chunk)[100](index=100&type=chunk) - The company has significant credit exposure to customers, with one customer accounting for **19%** of consolidated revenue in FY2020, and negative trends in customer businesses could lead to credit losses[102](index=102&type=chunk)[111](index=111&type=chunk) - The separation of Concentrix introduces risks related to the failure of either party to perform under transaction agreements and the potential non-realization of anticipated strategic, financial, or operational benefits[143](index=143&type=chunk)[144](index=144&type=chunk) - The COVID-19 pandemic negatively impacted the global economy, supply chains, and workforce participation, adversely affecting SYNNEX's results of operations in fiscal year 2020[147](index=147&type=chunk) - International operations (**34%** of FY2020 revenue) expose the company to foreign currency exchange rate changes, and substantial operations in China carry economic, political, and social risks[149](index=149&type=chunk)[153](index=153&type=chunk) [Risks Related to Our Business and Operations](index=13&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Operations) Business and operational risks include revenue fluctuations, supplier dependence, low margins, inventory declines, customer concentration, acquisition challenges, capital access, credit exposure, IT system failures, and debt covenant compliance - Revenue and operating results are expected to fluctuate due to factors like business acquisitions, economic conditions, customer/supplier consolidation, product mix, competition, and trends towards cloud-based offerings[91](index=91&type=chunk)[95](index=95&type=chunk) - Dependence on a limited number of OEM suppliers, with HP accounting for **12%** of consolidated revenue in FY2020, and short-term agreements, poses risks of termination or adverse changes in terms[95](index=95&type=chunk)[96](index=96&type=chunk) - Low gross margins in the IT and CE products industry magnify the impact of revenue and operating cost variations, making the company vulnerable to competitive price pressures[98](index=98&type=chunk) - Inventory value may decline due to rapid technological change or supplier price reductions, and existing OEM supplier protections may not adequately cover these losses[100](index=100&type=chunk) - Customer concentration (one customer accounted for **19%** of FY2020 revenue) and intense competition could adversely impact revenue, especially in systems design and integration solutions[102](index=102&type=chunk) - Strategic acquisitions and investments in new markets carry risks related to integration difficulties, loss of key employees, diversion of capital, and potential failure to realize anticipated benefits[106](index=106&type=chunk)[107](index=107&type=chunk) - The capital-intensive nature of the business requires continued access to capital, and inability to obtain financing on favorable terms could harm operations or expansion[109](index=109&type=chunk)[110](index=110&type=chunk) - Significant credit exposure to customers, with a large portion of sales on credit terms, creates risk of credit loss and negative impact on cash flow and liquidity[111](index=111&type=chunk) - Dependence on IT and telecommunications systems and the Internet means failures, downtime, or security breaches could disrupt operations, harm customer relationships, and affect financial results[112](index=112&type=chunk)[113](index=113&type=chunk) - Loss of key personnel, intellectual property disputes, and disruptions in international operations (e.g., natural disasters, technical difficulties) are additional risks[114](index=114&type=chunk)[116](index=116&type=chunk)[119](index=119&type=chunk) - Debt arrangements impose significant restrictions on operations and require maintenance of specified financial ratios, with non-compliance potentially leading to accelerated debt repayment[120](index=120&type=chunk)[121](index=121&type=chunk) - Reliance on floor plan financing companies for a portion of revenue means termination or reduction of these arrangements could increase financing costs and harm business[129](index=129&type=chunk) [Risks Related to Our Relationship with MiTAC Holdings Corporation](index=22&type=section&id=Risks%20Related%20to%20Our%20Relationship%20with%20MiTAC%20Holdings%20Corporation) Risks arise from MiTAC Holdings' **18%** ownership, influencing control and creating potential conflicts of interest due to dual roles and a competing affiliate - MiTAC Holdings Corporation and its affiliates owned approximately **18%** of SYNNEX's common stock as of November 30, 2020, allowing them to influence stockholder approval matters and potentially delay or prevent a change in control[131](index=131&type=chunk) - Potential conflicts of interest exist due to MiTAC Holdings' ownership and Matthew Miau's dual roles as SYNNEX Chairman Emeritus/Director and Chairman of MiTAC Holdings[132](index=132&type=chunk) - Synnex Technology International Corp., an affiliate of MiTAC Holdings, is a potential competitor, and there is a risk of confusion due to similar names and potential restrictions on SYNNEX's use of the name in certain geographies[133](index=133&type=chunk) [Risks Related to Our Industry](index=23&type=section&id=Risks%20Related%20to%20Our%20Industry) Industry risks include IT/CE market volatility, intense competition from providers and direct-selling OEMs, and the imperative to adapt to rapid technological changes like cloud migration - Volatility in the IT and CE industries, including cyclical demand, economic downturns, and the emergence of new technologies like cloud-based infrastructure, could adversely affect business and operating results[135](index=135&type=chunk) - Intense competition from regional, national, and international providers, as well as OEM suppliers selling directly, could lead to market share loss or price reductions[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - OEM suppliers' strategies to consolidate business or increase direct sales could negatively affect SYNNEX's business opportunities and operating results[139](index=139&type=chunk)[140](index=140&type=chunk) - Failure to adapt to rapidly changing technologies and process developments in the IT and CE industries, such as the migration to cloud-based IT infrastructure, could harm business[141](index=141&type=chunk) [Risks Related to the Separation](index=24&type=section&id=Risks%20Related%20to%20the%20Separation) The Concentrix separation poses risks of non-performance under agreements, failure to achieve anticipated benefits, and substantial tax liabilities if tax-free status is not maintained - Risks include potential failure of SYNNEX or Concentrix to perform under transaction agreements (e.g., separation and distribution agreement, employee matters agreement), leading to operational difficulties or losses[143](index=143&type=chunk) - The separation may not achieve all anticipated benefits, and both companies, being smaller and less diversified, may be more vulnerable to market changes[144](index=144&type=chunk) - If the separation fails to qualify for tax-free treatment, it could result in substantial tax liability for SYNNEX and its stockholders[145](index=145&type=chunk) [Risks Related to the Macro-Economic and Regulatory Environment](index=25&type=section&id=Risks%20Related%20to%20the%20Macro-Economic%20and%20Regulatory%20Environment) Macroeconomic and regulatory risks include COVID-19 impacts, foreign currency fluctuations, supply chain disruptions, China operations, tax liabilities, cyberattacks, data privacy, geopolitical events, and internal control effectiveness - The COVID-19 pandemic negatively impacted the global economy, supply chains, and workforce, adversely affecting SYNNEX's results in FY2020, with ongoing uncertainty about future impacts[147](index=147&type=chunk) - Changes in foreign currency exchange rates (**34%** of FY2020 revenue from international operations) and limitations on currency convertibility (e.g., Chinese Renminbi) could adversely affect operating margins and business results[149](index=149&type=chunk)[150](index=150&type=chunk) - Reliance on independent shipping companies exposes the company to risks of price increases or service interruptions, which could impact gross margins and operations[152](index=152&type=chunk) - Substantial operations in China expose the company to economic, political, and social risks, including government-controlled foreign exchange, extensive regulation, and an uncertain legal system[153](index=153&type=chunk)[154](index=154&type=chunk) - Higher than anticipated tax liabilities could arise from changes in tax laws, interpretations, or audit outcomes across multiple jurisdictions[155](index=155&type=chunk) - Cyberattacks or improper disclosure of personal information could result in liability and harm reputation, especially with evolving data privacy regulations like GDPR and CCPA[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk) - Global economic, political, and social conditions (e.g., trade negotiations, geopolitical turmoil, Brexit) may harm business, increase costs, and negatively affect stock price[160](index=160&type=chunk)[166](index=166&type=chunk) - International expansion exposes the company to additional risks not present in the U.S., such as political instability, trade restrictions, and difficulties in collecting accounts receivable[161](index=161&type=chunk) - Inability to maintain effective internal control over financial reporting could adversely affect financial reporting timeliness and accuracy, potentially leading to a decline in stock price[163](index=163&type=chunk)[164](index=164&type=chunk) [Item 1B. Unresolved Staff Comments](index=28&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) No unresolved staff comments are reported [Item 2. Properties](index=28&type=section&id=Item%202.%20Properties) SYNNEX owns its Fremont headquarters, with Technology Solutions operating **63** facilities (**6.1 million** sq ft) and Concentrix (pre-separation) occupying **284** facilities (**16.8 million** sq ft) - SYNNEX's principal executive offices are owned and located in Fremont, California[168](index=168&type=chunk) - The Technology Solutions segment operates approximately **63** facilities, covering **6.1 million** square feet, with **2.1 million** square feet owned and the remainder leased[168](index=168&type=chunk) - The Concentrix segment (pre-separation) occupied approximately **284** facilities, totaling **16.8 million** square feet, owning **1.3 million** square feet and leasing the rest[169](index=169&type=chunk) [Item 3. Legal Proceedings](index=28&type=section&id=Item%203.%20Legal%20Proceedings) SYNNEX is involved in ordinary course legal proceedings, including bankruptcy actions, not expected to materially affect its financial position - SYNNEX is involved in legal proceedings in the ordinary course of business, including bankruptcy preference actions, but does not expect a material adverse effect on its financial results[171](index=171&type=chunk)[172](index=172&type=chunk) [Item 4. Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to SYNNEX Corporation [Information About our Executive Officers](index=29&type=section&id=Information%20About%20our%20Executive%20Officers) This section lists SYNNEX's executive officers as of November 30, 2020, detailing their roles and ages Executive Officers as of November 30, 2020 | Name | Age | Position | | :---------------- | :-- | :------------------------------------------ | | Dennis Polk | 54 | President, Chief Executive Officer and a Director | | Michael Urban | 56 | President, Worldwide Technology Solutions Distribution | | Peter Larocque | 59 | President, North American Technology Solutions | | Marshall Witt | 55 | Chief Financial Officer | | Christopher Caldwell | 48 | Executive Vice President; President, Concentrix Corporation | | Simon Leung | 55 | Senior Vice President; General Counsel and Corporate Secretary | - Christopher Caldwell resigned from SYNNEX effective December 1, 2020, following the separation of Concentrix[178](index=178&type=chunk) PART II This section covers SYNNEX's common stock market, dividends, share repurchases, selected financial data, management's discussion and analysis, market risk, and audited financial statements [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=30&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) SYNNEX common stock trades on NYSE, with dividends reinstated in January 2021 after a COVID-19 suspension, and a **$400 million** share repurchase program authorized - SYNNEX common stock is traded on the New York Stock Exchange (NYSE) under the symbol "SNX"[181](index=181&type=chunk) - As of January 22, 2021, there were approximately **4,400** stockholders of record[181](index=181&type=chunk) Quarterly Cash Dividends Declared Per Share | Quarter | 2020 | 2019 | | :------------ | :---- | :---- | | First Quarter | $0.400 | $0.375 | | Second Quarter | $— | $0.375 | | Third Quarter | $— | $0.375 | | Fourth Quarter | $— | $0.375 | - The quarterly dividend was suspended on March 24, 2020, due to the COVID-19 pandemic, but reinstated at **$0.20** per share on January 11, 2021, payable on January 29, 2021[185](index=185&type=chunk) - A three-year **$400 million** share repurchase program was authorized in June 2020, effective July 1, 2020, with no shares repurchased under this program as of November 30, 2020[186](index=186&type=chunk) - Under a previous **$300 million** program (expired June 2020), SYNNEX repurchased **35,000** shares for **$3.4 million** in FY2020, and a total of **874,517** shares for **$84.6 million**[187](index=187&type=chunk) [Stock Price Performance Graph](index=30&type=section&id=Stock%20Price%20Performance%20Graph) This section presents SYNNEX's cumulative total stockholder return compared to various indices over a five-year period Cumulative Total Stockholder Return (11/30/2015 - 11/30/2020) | Fiscal Years Ended | 11/30/2015 | 11/30/2016 | 11/30/2017 | 11/30/2018 | 11/30/2019 | 11/30/2020 | | :----------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | :--------- | | SYNNEX Corporation | $100.00 | $125.15 | $147.08 | $88.42 | $136.52 | $178.70 | | NYSE Composite Index | $100.00 | $107.09 | $128.06 | $129.69 | $144.98 | $153.61 | | S&P Midcap 400 Index | $100.00 | $113.23 | $134.21 | $134.86 | $146.80 | $161.04 | | Computers and Peripheral Equipment | $100.00 | $154.69 | $161.26 | $161.90 | $185.91 | $160.85 | | Concentrix Peer Group | $100.00 | $111.90 | $143.20 | $158.34 | $199.69 | $246.46 | - The closing price per share of SYNNEX common stock was **$160.31** on November 30, 2020[182](index=182&type=chunk) [Securities Authorized for Issuance under Equity Compensation Plans](index=31&type=section&id=Securities%20Authorized%20for%20Issuance%20under%20Equity%20Compensation%20Plans) Information on securities authorized for issuance under equity compensation plans is incorporated by reference from Item 12 - Information regarding securities authorized for issuance under equity compensation plans is incorporated by reference from Item 12 of this Report[184](index=184&type=chunk) [Dividends](index=31&type=section&id=Dividends) SYNNEX reinstated its quarterly cash dividend at **$0.20** per share in January 2021, following a suspension in March 2020 due to the COVID-19 pandemic - SYNNEX initiated a quarterly cash dividend on September 29, 2014[185](index=185&type=chunk) Quarterly Cash Dividends Declared Per Share | Quarter | 2020 | 2019 | | :------------ | :---- | :---- | | First Quarter | $0.400 | $0.375 | | Second Quarter | $— | $0.375 | | Third Quarter | $— | $0.375 | | Fourth Quarter | $— | $0.375 | - The quarterly dividend was suspended on March 24, 2020, due to the unpredictable economic environment caused by the COVID-19 pandemic[185](index=185&type=chunk) - On January 11, 2021, the company announced the reinstatement of a quarterly cash dividend of **$0.20** per share[185](index=185&type=chunk) [Purchases of Equity Securities](index=31&type=section&id=Purchases%20of%20Equity%20Securities) SYNNEX authorized a new **$400 million** share repurchase program in June 2020, with no repurchases under it as of November 30, 2020, while completing a previous **$300 million** program - In June 2020, the Board authorized a three-year **$400 million** share repurchase program, effective July 1, 2020; no shares were repurchased under this program as of November 30, 2020[186](index=186&type=chunk) - Under a previous **$300 million** program (June 2017 - June 2020), SYNNEX repurchased **35,000** shares for **$3.4 million** in FY2020, and a total of **874,517** shares for **$84.6 million**[187](index=187&type=chunk) [Item 6. Selected Financial Data](index=32&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected consolidated financial data for FY2016-2020 shows revenue growth to **$24.68 billion** and net income to **$529 million**, with significant cash increase in 2020 Selected Consolidated Statements of Operations Data (in thousands, except per share amounts) | Fiscal Years Ended November 30, | 2020 | 2019 | 2018 | 2017 | 2016 | | :------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Revenue | $24,675,563 | $23,757,293 | $19,767,945 | $16,771,128 | $14,061,837 | | Gross profit | 2,847,604 | 2,897,917 | 1,926,899 | 1,549,312 | 1,282,965 | | Operating income | 830,103 | 813,761 | 550,236 | 507,337 | 379,596 | | Net income | 529,160 | 500,712 | 299,981 | 300,240 | 235,005 | | Earnings per common share: | | | | | | | Basic | $10.28 | $9.79 | $7.21 | $7.52 | $5.91 | | Diluted | $10.21 | $9.74 | $7.17 | $7.48 | $5.88 | | Cash dividends declared per share | $0.40 | $1.50 | $1.40 | $1.05 | $0.85 | Selected Consolidated Balance Sheet Data (in thousands) | As of November 30, | 2020 | 2019 | 2018 | 2017 | 2016 | | :---------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Cash and cash equivalents | $1,564,672 | $225,529 | $454,694 | $550,688 | $380,717 | | Working capital | 3,139,035 | 2,845,870 | 2,209,190 | 1,703,249 | 1,518,498 | | Total assets | 13,468,590 | 11,697,960 | 11,543,498 | 7,756,343 | 5,215,281 | | Borrowings, current | 158,715 | 298,969 | 833,216 | 805,471 | 362,889 | | Long-term borrowings | 2,608,061 | 2,718,267 | 2,622,782 | 1,136,089 | 601,095 | | Total equity | 4,338,860 | 3,788,450 | 3,435,054 | 2,287,297 | 1,975,798 | Other Financial Data (in thousands) | Fiscal Years Ended November 30, | 2020 | 2019 | 2018 | 2017 | 2016 | | :------------------------------ | :--------- | :--------- | :--------- | :--------- | :--------- | | Depreciation and amortization | $341,637 | $372,108 | $225,287 | $159,886 | $121,293 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes SYNNEX's financial condition and operating results for FY2020-2018, covering revenue, margins, trends, accounting policies, and the impact of the Concentrix separation and COVID-19 - The discussion focuses on fiscal years 2020 and 2019, with comparisons to 2018, and should be read with the business description and consolidated financial statements[193](index=193&type=chunk) - Forward-looking statements are identified, covering market trends, business strategy, financial performance, and risks, with a disclaimer against public updates[194](index=194&type=chunk) - The separation of SYNNEX and Concentrix is a key factor influencing future results, with Concentrix's services revenue and costs being discontinued from SYNNEX's financial results post-separation[194](index=194&type=chunk)[216](index=216&type=chunk) [Revenue and Cost of Revenue](index=33&type=section&id=Revenue%20and%20Cost%20of%20Revenue) Revenue sources include IT product distribution for Technology Solutions and business outsourcing for Concentrix (pre-separation), with international operations and foreign currency impacting growth - Technology Solutions revenue is primarily from distributing IT products and providing systems design/integration solutions, while Concentrix revenue (pre-separation) was from high-value business outsourcing services[195](index=195&type=chunk) - Approximately **34%** of consolidated revenue and **24%** of Technology Solutions revenue in FY2020 and FY2019 were generated from international operations, impacting growth due to foreign currency fluctuations[196](index=196&type=chunk) - The IT market is characterized by declining unit prices and short product life cycles, with sales prices based on market supply/demand and influenced by OEM incentive/rebate programs[197](index=197&type=chunk) - Cost of Technology Solutions revenue includes product purchase price (net of incentives), inventory provisions, freight, and royalties; Concentrix cost of revenue primarily consists of personnel costs for service delivery[198](index=198&type=chunk) [Margins](index=35&type=section&id=Margins) Technology Solutions maintains low margins influenced by product mix and competition, while Concentrix (pre-separation) had higher margins affected by resource location and client mix - Technology Solutions operates with low gross and operating margins, influenced by product mix, customer base, OEM incentives, competition, seasonality, and inventory obsolescence[201](index=201&type=chunk) - Concentrix gross margins (pre-separation) were higher but impacted by resource location, client mix, pricing, and initial setup costs[201](index=201&type=chunk) - Overall operating margin fluctuated based on economies of scale, operating expense management, segment revenue mix, and timing of acquisitions/investments[201](index=201&type=chunk) [Economic and Industry Trends](index=35&type=section&id=Economic%20and%20Industry%20Trends) Technology Solutions revenue depends on IT/CE market demand and cloud trends, while the customer experience industry (pre-separation) was competitive, with COVID-19 causing **$131 million** in incremental costs in FY2020 - Technology Solutions revenue is highly dependent on end-market demand for IT and CE products, influenced by new product introductions, replacement cycles, cloud computing trends, and economic growth[202](index=202&type=chunk) - The customer experience services industry (Concentrix pre-separation) was competitive, with performance based on pricing and service quality, and impacted by economic conditions in key geographies[203](index=203&type=chunk) - The COVID-19 pandemic negatively impacted the global economy, supply chains, and workforce, leading to **$131 million** in net incremental costs in FY2020 (**$86 million** for Concentrix, **$45 million** for Technology Solutions)[204](index=204&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statement preparation involves significant estimates, especially for revenue recognition in Technology Solutions (transfer of control) and Concentrix (service delivery), and for business combinations - The preparation of financial statements requires significant estimates and assumptions, particularly affected by the COVID-19 pandemic, leading to increased judgment and variability[205](index=205&type=chunk)[206](index=206&type=chunk) - Revenue Recognition: For Technology Solutions, revenue is recognized when control of IT hardware/software is transferred (shipment/delivery)[207](index=207&type=chunk)[208](index=208&type=chunk) - For Concentrix (pre-separation), service revenue is recognized over time as services are delivered, based on fixed price or unit-price transactions[212](index=212&type=chunk) - Business Combinations: Purchase consideration is allocated to acquired assets, liabilities, and noncontrolling interests at fair value, with any excess recorded as goodwill[214](index=214&type=chunk) - Significant estimates are made for intangible assets[214](index=214&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) SYNNEX aims for growth through acquisitions and divestitures, with Concentrix's post-separation discontinuation expected to decrease consolidated gross profit, operating income, and margins - SYNNEX continually seeks to augment organic growth with strategic acquisitions and divest businesses no longer strategic[215](index=215&type=chunk) - Post-separation, Concentrix's services revenue and costs will be discontinued, leading to a decrease in consolidated gross profit, operating income, and net income, and a decrease in gross and operating margins due to the discontinuance of higher-margin Concentrix business[216](index=216&type=chunk) - A **$1.2 billion** decrease in products revenue is expected in the second half of 2021 due to a customer moving to a consignment model for integration services[217](index=217&type=chunk) Consolidated Statements of Operations Data as % of Total Revenue | Statements of Operations Data: | 2020 | 2019 | | :----------------------------- | :------ | :------ | | Products revenue | 80.96% | 80.27% | | Services revenue | 19.04% | 19.73% | | Total revenue | 100.00% | 100.00% | | Cost of products revenue | (76.12%) | (75.40%) | | Cost of services revenue | (12.34%) | (12.40%) | | Gross profit | 11.54% | 12.20% | | Selling, general and administrative expenses | (8.18%) | (8.77%) | | Operating income | 3.36% | 3.43% | | Interest expense and finance charges, net | (0.52%) | (0.70%) | | Other income (expense), net | 0.01% | 0.13% | | Income before income taxes | 2.85% | 2.86% | | Provision for income taxes | (0.71%) | (0.74%) | | Net income | 2.14% | 2.11% | Revenue (in thousands) | Segment | 2020 | 2019 | Percent Change | | :------------------ | :----------- | :----------- | :------------- | | Total Revenue | $24,675,563 | $23,757,293 | 3.9% | | Technology Solutions | $19,977,150 | $19,069,970 | 4.8% | | Concentrix | $4,719,534 | $4,707,912 | 0.2% | - Technology Solutions revenue increased by **4.8%** (**5.2%** on a constant currency basis) in FY2020, driven by increased demand for technology equipment due to COVID-19 related remote work and learning solutions[227](index=227&type=chunk) - Concentrix revenue increased slightly by **0.2%** in FY2020, with growth from technology, retail, and e-commerce clients offset by lower demand from media, communications, travel, tourism, and automotive clients, and impacted by COVID-19 restrictions[228](index=228&type=chunk) Gross Profit (in thousands) | Segment | 2020 | 2019 | Percent Change | | :------------------ | :----------- | :----------- | :------------- | | Total Gross Profit | $2,847,604 | $2,897,917 | -1.7% | | Total Gross Margin | 11.54% | 12.20% | | | Technology Solutions Gross Profit | $1,193,858 | $1,157,258 | 3.2% | | Technology Solutions Gross Margin | 5.98% | 6.07% | | | Concentrix Gross Profit | $1,661,525 | $1,748,448 | -5.0% | | Concentrix Gross Margin | 35.21% | 37.14% | | - Technology Solutions gross profit increased by **3.2%** in FY2020 due to strong demand, partially offset by lower margins from product mix and **$10.4 million** in COVID-19 related costs[231](index=231&type=chunk) - Concentrix gross profit and margin decreased by **5.0%** in FY2020 due to **$76.0 million** in COVID-19 related non-productive workforce and other costs[232](index=232&type=chunk) Selling, General and Administrative Expenses (in thousands) | Segment | 2020 | 2019 | Percent Change | | :------------------ | :----------- | :----------- | :------------- | | Total SG&A Expenses | $2,017,502 | $2,084,156 | -3.2% | | Total SG&A % of Revenue | 8.18% | 8.77% | | | Technology Solutions SG&A Expenses | $672,516 | $637,829 | 5.4% | | Technology Solutions SG&A % of Revenue | 3.37% | 3.34% | | | Concentrix SG&A Expenses | $1,352,764 | $1,454,116 | -7.0% | | Concentrix SG&A % of Revenue | 28.66% | 30.89% | | - Technology Solutions SG&A increased by **5.4%** in FY2020 due to higher allowance for doubtful accounts, increased salaries/employee expenses (including **$33 million** COVID-19 related costs), and **$7.4 million** in Concentrix separation transaction costs, partially offset by lower amortization of intangible assets[234](index=234&type=chunk) - Concentrix SG&A decreased by **7.0%** in FY2020 due to lower facility/employee costs from integration and rationalization, reduced variable operating expenses/discretionary spend due to COVID-19 remote work, and lower amortization of intangible assets and transaction-related expenses, partially offset by **$10.0 million** in COVID-19 related technology and health/safety costs[235](index=235&type=chunk)[236](index=236&type=chunk) Operating Income (in thousands) | Segment | 2020 | 2019 | Percent Change | | :------------------ | :----------- | :----------- | :------------- | | Total Operating Income | $830,103 | $813,761 | 2.0% | | Total Operating Margin | 3.36% | 3.43% | | | Technology Solutions Operating Income | $521,341 | $519,429 | 0.4% | | Technology Solutions Operating Margin | 2.61% | 2.72% | | | Concentrix Operating Income | $308,761 | $294,332 | 4.9% | | Concentrix Operating Margin | 6.54% | 6.25% | | - Technology Solutions operating income increased by **0.4%** in FY2020 due to broad-based growth, lower amortization of intangible assets, and reduced transaction-related expenses, partially offset by COVID-19 related costs[237](index=237&type=chunk) - Concentrix operating income and margin increased by **4.9%** in FY2020 due to lower transaction-related and integration expenses and reduced amortization of intangible assets, partially offset by COVID-19 related incremental costs[238](index=238&type=chunk) Interest Expense and Finance Charges, Net (in thousands) | Item | 2020 | 2019 | Percent Change | | :---------------------------------- | :----------- | :----------- | :------------- | | Interest expense and finance charges, net | $127,336 | $166,421 | -23.5% | | Percentage of revenue | 0.52% | 0.70% | | - Interest expense and finance charges decreased by **23.5%** in FY2020 due to a **$700 million** reduction in average borrowings and a lower interest rate environment[240](index=240&type=chunk) Other Income (Expense), Net (in thousands) | Item | 2020 | 2019 | Percent Change | | :------------------------ | :--------- | :--------- | :------------- | | Other income (expense), net | $1,276 | $30,363 | -96% | | Percentage of revenue | 0.01% | 0.13% | | - Other income (expense), net decreased by **96%** in FY2020, primarily due to a **$19.0 million** gain from contingent consideration settlement and an **$11.1 million** gain from contingent sales-tax assets in FY2019, partially offset by a **$3.5 million** gain from tax indemnification provisions reversal in FY2020[243](index=243&type=chunk) Provision for Income Taxes (in thousands) | Item | 2020 | 2019 | Percent Change | | :---------------------------- | :--------- | :--------- | :------------- | | Provision for income taxes | $174,882 | $176,991 | -1.2% | | Percentage of income before income taxes | 24.84% | 26.05% | | - Income tax expense decreased by **1.2%** in FY2020 due to a lower effective tax rate (**24.84%** vs. **26.05%**), benefiting from employee stock option exercises and reversal of uncertain tax positions[245](index=245&type=chunk) [Non-GAAP Financial Information](index=38&type=section&id=Non-GAAP%20Financial%20Information) Non-GAAP financial measures, including constant currency revenue and Adjusted EBITDA, provide additional insights into core operating performance by excluding specific non-recurring items - Non-GAAP financial measures are disclosed to provide additional insights into base operating performance, excluding transaction-related expenses, restructuring costs, and amortization of intangible assets[218](index=218&type=chunk)[222](index=222&type=chunk) - Non-GAAP metrics include revenue in constant currency, non-GAAP operating income/margin, Adjusted EBITDA, and non-GAAP diluted EPS[218](index=218&type=chunk)[223](index=223&type=chunk) Consolidated Non-GAAP Financial Information (in thousands, except per share amounts) | Item | 2020 | 2019 | | :---------------------------------------- | :----------- | :----------- | | Revenue | $24,675,563 | $23,757,293 | | Foreign currency translation | 108,546 | — | | Revenue in constant currency | $24,784,109 | $23,757,293 | | Operating income | $830,103 | $813,761 | | Transaction-related and integration expenses | 44,879 | 71,454 | | Amortization of intangibles | 187,431 | 210,481 | | Non-GAAP operating income | $1,062,413 | $1,095,696 | | Operating margin | 3.36% | 3.43% | | Non-GAAP operating margin | 4.31% | 4.61% | | Adjusted EBITDA | $1,218,713 | $1,252,973 | | Diluted EPS | $10.21 | $9.74 | | Non-GAAP diluted EPS | $13.68 | $13.26 | Technology Solutions Non-GAAP Financial Information (in thousands, except per share amounts) | Item | 2020 | 2019 | | :---------------------------------------- | :----------- | :----------- | | Revenue | $19,977,150 | $19,069,970 | | Foreign currency translation | 87,806 | — | | Revenue in constant currency | $20,064,956 | $19,069,970 | | Operating income | $521,341 | $519,429 | | Transaction-related and integration expenses | 7,414 | 981 | | Amortization of intangibles | 40,148 | 43,875 | | Non-GAAP operating income | $568,903 | $564,285 | | Operating margin | 2.61% | 2.72% | | Non-GAAP operating margin | 2.85% | 2.96% | | Adjusted EBITDA | $596,080 | $586,739 | Concentrix Non-GAAP Financial Information (in thousands, except per share amounts) | Item | 2020 | 2019 | | :---------------------------------------- | :----------- | :----------- | | Revenue | $4,719,534 | $4,707,912 | | Foreign currency translation | 20,740 | — | | Revenue in constant currency | $4,740,274 | $4,707,912 | | Operating income | $308,761 | $294,332 | | Transaction-related and integration expenses | 37,465 | 70,473 | | Amortization of intangibles | 147,283 | 166,606 | | Non-GAAP operating income | $493,509 | $531,411 | | Operating margin | 6.54% | 6.25% | | Non-GAAP operating margin | 10.46% | 11.29% | | Adjusted EBITDA | $622,634 | $666,234 | [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) Technology Solutions is working capital intensive, with FY2020 operating cash flow at **$1.834 billion** and cash and equivalents at **$1.565 billion**, deemed sufficient for future operations - The Technology Solutions business is working capital intensive, relying on term loans, accounts receivable arrangements, securitization programs, and revolver programs[249](index=249&type=chunk) Cash Conversion Cycle (CCC) (in days) | Item | November 30, 2020 | November 30, 2019 | | :---------------------------------- | :---------------- | :---------------- | | Consolidated CCC | 31 | 44 | | Technology Solutions CCC | 25 | 41 | - The decrease in CCC in FY2020 was primarily due to efficient accounts receivable collections and faster inventory turnover in Technology Solutions, and favorable timing of accounts payable payments[250](index=250&type=chunk) - Net cash provided by operating activities was **$1.834 billion** in FY2020, driven by net income, non-cash adjustments, decreases in accounts receivable/vendor receivables, and increases in accounts payable[252](index=252&type=chunk) - Net cash used in investing activities was **$209.5 million** in FY2020, primarily for capital expenditures related to infrastructure investments[254](index=254&type=chunk) - Net cash used in financing activities was **$291.7 million** in FY2020, mainly due to net repayments of **$262.6 million** under borrowing arrangements, and dividend payments[257](index=257&type=chunk) - Cash and cash equivalents totaled **$1.565 billion** as of November 30, 2020, with **$570.8 million** held by international subsidiaries, which are no longer subject to U.S. federal tax on repatriation[260](index=260&type=chunk) - The company believes current cash balances and credit availability are sufficient to support operating activities for at least the next twelve months[259](index=259&type=chunk)[261](index=261&type=chunk) [On-Balance Sheet Arrangements](index=49&type=section&id=On-Balance%20Sheet%20Arrangements) SYNNEX utilizes various on-balance sheet arrangements, including U.S. and Canadian accounts receivable securitization programs, a Japanese credit agreement, and U.S. term loans, with Concentrix's borrowings no longer consolidated post-separation - SYNNEX has a U.S. accounts receivable securitization program with a maximum borrowing of **$650.0 million** (maturity May 2022), with no outstanding borrowings as of November 30, 2020[263](index=263&type=chunk)[265](index=265&type=chunk) - SYNNEX Canada has an accounts receivable securitization program for up to **CAD100.0 million** (**$76.9 million**), renewed through May 2023, with no outstanding balance as of November 30, 2020[266](index=266&type=chunk) - SYNNEX Japan has a credit agreement for **JPY15.0 billion** (**$143.8 million**), comprising a **JPY7.0 billion** term loan and a **JPY8.0 billion** revolving credit facility, expiring November 2021[267](index=267&type=chunk) - A U.S. senior secured credit agreement includes a **$600.0 million** revolving credit facility and a **$1.2 billion** term loan (matures September 2022), with **$0.5 billion** outstanding on the term loan as of November 30, 2020[268](index=268&type=chunk) - A secured term loan credit agreement (U.S. Term Loan Credit Agreement) for **$1.8 billion** (matures October 2023) had **$1.0 billion** outstanding as of November 30, 2020[269](index=269&type=chunk)[270](index=270&type=chunk) - Concentrix (pre-separation) had its own borrowing arrangements, including a **$600.0 million** revolving loan and a **$900.0 million** term loan, and a **$350.0 million** accounts receivable securitization facility, which are no longer part of SYNNEX's arrangements post-separation[273](index=273&type=chunk) [Off-Balance Sheet Arrangements](index=51&type=section&id=Off-Balance%20Sheet%20Arrangements) SYNNEX engages in off-balance sheet supply-chain financing programs in the U.S. and Japan by selling trade accounts receivable without recourse - SYNNEX has supply-chain financing programs in the U.S. and Japan where trade accounts receivable are sold to financial institutions without recourse[275](index=275&type=chunk) Trade Accounts Receivable Sold to Financial Institutions (in thousands) | As of November 30, | Amount (in thousands) | | :----------------- | :-------------------- | | 2020 | $22,500 | | 2019 | $35,300 | [Covenant Compliance](index=51&type=section&id=Covenant%20Compliance) SYNNEX's credit facilities contain covenants requiring financial ratio maintenance and limiting certain actions, with the company in compliance as of November 30, 2020 - SYNNEX's credit facilities include covenants and restrictions requiring maintenance of specified financial ratios and tests, and limiting actions such as incurring additional debt, paying dividends, and making acquisitions[276](index=276&type=chunk) - As of November 30, 2020, the company was in compliance with all material covenants for its borrowing arrangements[276](index=276&type=chunk) [Contractual Obligations](index=51&type=section&id=Contractual%20Obligations) SYNNEX's contractual obligations exclude Concentrix's post-separation borrowings, with contingent liabilities for repossessed inventory and a **$60.4 million** reserve for unrecognized tax benefits Contractual Obligations as of November 30, 2020 (in thousands) | Contractual Obligations: | Total | Less than 1 Year | 1 - 3 Years | 3 - 5 Years | > 5 Years | | :----------------------------------- | :----------- | :--------------- | :----------- | :----------- | :----------- | | Principal debt payments under SYNNEX borrowing arrangements | $1,625,049 | $124,964 | $1,500,085 | $— | $— | | Principal debt payments under Concentrix borrowing arrangements | 1,150,000 | 33,750 | 340,000 | 776,250 | — | | Principal debt payments - Consolidated | 2,775,049 | 158,714 | 1,840,085 | 776,250 | — | | Interest on debt | 168,237 | 67,784 | 100,453 | — | — | | Repatriation tax under the TCJA | 40,461 | — | 2,475 | 37,987 | — | | Non-cancellable operating leases | 694,703 | 216,224 | 299,579 | 138,972 | 39,928 | | Total | $3,678,450 | $442,722 | $2,242,592 | $953,209 | $39,928 | - Post-separation, Concentrix borrowing arrangements are no longer part of SYNNEX's contractual obligations[278](index=278&type=chunk) - SYNNEX is contingently liable to repurchase repossessed inventory from flooring companies due to customer defaults, but no material losses are expected based on historical experience[279](index=279&type=chunk) - A reserve of **$60.4 million** for unrecognized tax benefits is established as of November 30, 2020, excluded from the table due to uncertain timing of settlement[280](index=280&type=chunk) [Related Party Transactions](index=52&type=section&id=Related%20Party%20Transactions) MiTAC Holdings, owning **18%** of SYNNEX, influences stockholder matters and engages in related party transactions, with an affiliate also acting as a potential competitor - MiTAC Holdings Corporation and its affiliates beneficially owned approximately **18%** of SYNNEX's outstanding common stock as of November 30, 2020, giving them influence over stockholder matters[281](index=281&type=chunk)[284](index=284&type=chunk) Transactions with MiTAC Holdings and Affiliates (in thousands) | Item | 2020 | 2019 | | :------------------------------------ | :--------- | :--------- | | Purchases of inventories and services | $211,858 | $173,390 | | Sale of products | $1,071 | $761 | | Reimbursements (net) | $(129) | $(41) | Receivable from and Payable to MiTAC Holdings and Affiliates (in thousands) | Item | As of November 30, 2020 | As of November 30, 2019 | | :------------------------------------ | :---------------------- | :---------------------- | | Receivable from related parties | $26,154 | $4,405 | | Payable to related parties | $49,603 | $23,179 | - Business relationships are informal, with pricing and terms negotiated case-by-case, and material transactions with related parties require Audit Committee approval[286](index=286&type=chunk) - Synnex Technology International Corp., an affiliate of MiTAC Holdings, is a potential competitor and is not restricted from competing with SYNNEX[287](index=287&type=chunk) [Recently Issued Accounting Pronouncements](index=53&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) A summary of recent accounting pronouncements and their anticipated effects is provided in Note 2 of Item 8 - For a summary of recent accounting pronouncements and their anticipated effects, refer to Note 2 – Summary of Significant Accounting Policies in Item 8[288](index=288&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=53&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) SYNNEX manages foreign currency, interest rate, and equity price risks using non-speculative derivative instruments, with Concentrix-related derivatives no longer a risk post-separation - SYNNEX is exposed to foreign currency risk, interest rate risk, and equity price risk[289](index=289&type=chunk)[293](index=293&type=chunk)[298](index=298&type=chunk) - The company uses forward contracts to manage cash flow exposures for major countries and the foreign currency impact of assets and liabilities, primarily hedging Philippine Peso, Indian Rupee, Euro, Canadian Dollar, Japanese Yen, British Pound, and Chinese Yuan[289](index=289&type=chunk) Hypothetical Changes in Fair Values of Foreign Currency Derivative Instruments (in thousands) | Item | Loss (15% Weakening) | Loss (10% Weakening) | Loss (5% Weakening) | No Change | Gain (5% Strengthening) | Gain (10% Strengthening) | Gain (15% Strengthening) | | :------------------------------------ | :------------------- | :------------------- | :------------------ | :-------- | :---------------------- | :----------------------- | :----------------------- | | Forward contracts at Nov 30, 2020 | $262,969 | $187,375 | $119,730 | $58,842 | $3,747 | $(46,345) | $(90,519) | | Forward contracts at Nov 30, 2019 | $231,880 | $156,971 | $89,117 | $27,256 | $(29,477) | $(81,785) | $(129,773) | - All long-term forward contracts were related to the Concentrix segment and no longer represent a risk to SYNNEX post-separation[291](index=291&type=chunk) - Interest rate risk is managed using interest rate swaps to convert a portion of variable-rate debt to fixed-rate debt, with **$1.6 billion** notional amount as of November 30, 2020[294](index=294&type=chunk) Hypothetical Interest Expense with Variable Interest Rates (in thousands) | Item | 15% Decrease | 10% Decrease | 5% Decrease | Act

Investor Presentation January 2021 Safe Harbor Statement Statements in this presentation regarding SYNNEX Corporation which are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements may be identified by terms such as believe, expect, may, will, provide, could and should and the negative of these terms or other similar expressions. These forward-looking sta ...

SYNNEX Corporation (NYSE:SNX) Q4 2020 Earnings Conference Call January 11, 2021 5:00 PM ET Company Representative Dennis Polk - President, Chief Executive Officer Marshall Witt - Chief Financial Officer Liz Morali - Senior Manager, Investor Relations Conference Call Participants Tim Yang - Citi Ruplu Bhattacharya - Bank of America Shannon Cross - Cross Research Adam Tindle - Raymond James Matt Sheerin - Stifel Ananda Baruah - Loop Capital Vincent Colicchio - Barrington Research Operator Good afternoon. My n ...

SYNNEX Corporation (NYSE:SNX) Q3 2020 Earnings Conference Call September 29, 2020 5:00 PM ET Company Participants Dennis Polk - CEO Marshall Witt - CFO Christopher Caldwell - EVP Conference Call Participants Ruplu Bhattacharya - Merrill Lynch Adam Tindle - Raymond James Vincent Colicchio - Barrington Research Matt Sheerin - Stifel Ananda Baruah - Loop Capital Markets Shannon Cross - BMO Capital Markets Zhen Yang - Citigroup Operator Good afternoon, my name is Chantelle and I'll be your conference operator t ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2020 was $5.5 billion, down 3% from $5.7 billion in the same quarter last year, and down 2% on a constant currency basis [10] - Consolidated gross profit was $618 million, a decrease of 12% or $81 million year-over-year, with a gross margin of 11.2% compared to 12.2% a year ago [10] - Non-GAAP operating income was $162 million, down 34% year-over-year, with a non-GAAP operating margin of 2.9%, lower by 134 basis points compared to the prior year [10][15] - Total non-GAAP net income was $94 million, down 36% from the prior year, with non-GAAP diluted EPS at $1.83, also down 36% [15] Business Segment Performance - Technology Solutions revenue was $4.5 billion, down 2% or $96 million year-over-year, with a gross margin of 6.1%, an increase of 23 basis points due to favorable product mix [11] - Concentrix revenue was $1.1 billion, an 8% decrease year-over-year, with a gross margin of 32.4%, down from 37.1% a year ago [13] - Non-GAAP operating income for Concentrix was $63 million, down 47% year-over-year, with a non-GAAP operating margin of 5.9% compared to 10.3% a year ago [13] Market Data and Key Metrics Changes - The cash conversion cycle improved to 46 days, down 7 days from the previous year, leading to a preliminary cash flow from operations of $1.2 billion [17] - Total liquidity available to fund operations was approximately $2.5 billion at the end of Q2 [18] Company Strategy and Industry Competition - The company is committed to finalizing the spin-off of Concentrix, targeting completion in the fourth quarter of 2020 [21] - A new three-year $400 million share repurchase program was approved, effective July 1, 2020, as part of a return to pre-pandemic capital allocation strategies [19] - The company anticipates a shift towards more work-from-home capabilities, which may lead to a permanent change in operational models [62] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about recovery as economies begin to reopen, but acknowledged ongoing challenges due to COVID-19 [52] - The company expects continued solid sales in mobile, cloud, and security products, with a gradual recovery in office and enterprise product transactions [53] - There is an expectation of ongoing COVID-related expenses, but these are anticipated to decrease over time [54] Other Important Information - The company noted that supply chain challenges are improving but not fully back to normal, with significant backlogs still present [59][60] - The company is seeing strong demand for outsourcing services as clients adapt to new economic realities [42] Q&A Session Summary Question: Update on supply chain impact of the pandemic - Management indicated that supply chain conditions are better than at the beginning of the quarter, but not fully normalized, with significant backlogs still present [59][60] Question: Percentage of call center workers able to work remotely - Approximately 60% of call center workers were able to work remotely at peak, with some regions returning to on-site work [67] Question: Long-term growth rate for Concentrix - Management sees opportunities for growth despite current declines, with expectations to return to pre-COVID growth rates over time [109] Question: Concerns about work-from-home demand peaking - Management acknowledged the surge in demand for work-from-home solutions but believes that ongoing investments in technology will support future growth [78][80] Question: COVID-related costs and their impact on future expenses - Management noted that some COVID-related expenses will become part of the fixed expense run rate, but efforts will be made to offset these costs [86][87]

SYNNEX Corporation (NYSE:SNX) Q1 2020 Results Earnings Conference Call March 24, 2020 5:00 PM ET Company Participants Mary Lai - Head, Investor Relations Dennis Polk - President and CEO Marshall Witt - Chief Financial Officer Chris Caldwell - President, Concentrix Conference Call Participants Matt Sheerin - Stifel Vincent Colicchio - Barrington Research Tim Yang - Citi Adam Tindle - Raymond James Ananda Baruah - Loop Capital Ruplu Bhattacharya - Bank of America Shannon Cross - Cross Research Operator Good a ...

SYNNEX Announces Spin-Off of Concentrix Creates Two Industry Leading Public Companies Investor Presentation January 9, 2020 Safe Harbor Statement 1 Statements in this presentation regarding SYNNEX Corporation which are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements may be identified by terms such as believe, expect, may, will, provide, could and sho ...