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Investor Contact:
Mary Lai
Investor Relations
SYNNEX Corporation
marylai@synnex.com
(510) 668-8436


SYNNEX Corporation Reports Third Quarter Fiscal 2018 Results

Fremont, Calif., - October 3, 2018 - SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal third quarter ended August 31, 2018.
 
Q3 FY18
Q3 FY17
Net change
Revenue ($M)
$4,907
$4,277
14.7%
Operating income ($M)
$116.9
$122.2
(4.4)%
Non-GAAP operating income ($M)(1)
$162.7
$139.9
16.2%
Operating margin
2.38%
2.86%
(48) bps
Non-GAAP operating margin(1)
3.32%
3.27%
5 bps
Net income ($M) 
$69.3
$75.2
(7.8)%
Non-GAAP net income ($M)(1) 
$102.3
$86.8
17.8%
Diluted EPS
$1.74
$1.87
(7.0)%
Non-GAAP Diluted EPS(1)
$2.57
$2.16
19.0%
(1) Non-GAAP financial measures exclude the impact of acquisition-related and integration expenses, the amortization of intangible assets together with the related tax effects thereon. A reconciliation of GAAP to Non-GAAP financial measures is presented in the supplementary information section at the end of this press release.

“We saw continued momentum in both of our business segments that resulted in record third quarter performance,” said Dennis Polk, President and Chief Executive Officer, SYNNEX Corporation. “Our focus on profitable growth and leveraging the strategic investments we’ve made in our business drove solid margin and earnings expansion.”

“We are also excited about the expected close of the Convergys acquisition on October 5th. The talented and dedicated global associates of Convergys will significantly amplify Concentrix and our value proposition,” Mr. Polk added. “We look forward to the growth and value that the combination of these two companies will create, and it will enhance our leadership position as a premier global customer engagement services company.”



Third Quarter Fiscal 2018 Highlights:
•
Technology Solutions: Revenue was $4.4 billion, up 17% from the prior fiscal year third quarter. Operating income was $105 million, or 2.4% of segment revenue, compared to $100 million, or 2.6% of segment revenue, in the prior fiscal year third quarter. Non-GAAP operating income was $120 million, or 2.7% of segment revenue, in the fiscal third quarter of 2018, compared to $101 million, or 2.7% of segment revenue, in the prior fiscal year third quarter.
•
Concentrix: Revenue was $492 million, down 1% from the prior fiscal year third quarter. Operating income was $12 million, or 2.5% of segment revenue, compared to $22 million, or 4.5% of segment revenue in the prior fiscal year third quarter. Non-GAAP operating income was $43 million, or 8.7% of segment revenue, in the fiscal third quarter of 2018, compared to $39 million, or 7.8% of segment revenue, in the prior fiscal year third quarter.
•
The trailing fiscal four quarters Return on Invested Capital ("ROIC") was 8.5% compared to 10.8% in the prior fiscal year third quarter. The adjusted trailing fiscal four quarters ROIC was 10.9%.
•
The debt to capitalization ratio was 43.9%, up from 32.1% in the prior fiscal year third quarter, primarily as a result of the Westcon-Comstor Americas acquisition in the fiscal fourth quarter of 2017.
•
Depreciation and amortization were $23 million and $26 million, respectively.
•
Cash used in operations was approximately $103 million during the quarter.
Fourth Quarter Fiscal 2018 Outlook:
The following statements are based on SYNNEX’s current expectations for the fiscal 2018 fourth quarter, including the impact of the planned Convergys acquisition. Non-GAAP financial measures exclude the amortization of intangibles, acquisition-related and integration expenses and the related tax effect thereon. These statements are forward-looking and actual results may differ materially.
•
Revenue is expected to be in the range of $5.2 billion to $5.4 billion.
•
Net income is expected to be in the range of $48.3 million to $57.9 million and on a Non-GAAP basis, net income is expected to be in the range of $136.8 million to $146.4 million.
•
Diluted earnings per share is expected to be in the range of $1.02 to $1.23 and on a Non-GAAP basis, diluted earnings per share is expected to be in the range of $2.90 to $3.10.
•
After-tax amortization of intangibles is expected to be $49.8 million, or $1.05 per share and after-tax acquisition-related and integration expenses are expected to be $38.7 million, $0.82 per share.
 


Conference Call and Webcast
SYNNEX will be discussing its financial results and outlook on a conference call today at 2:00 p.m. (PT). A live audio webcast of the call will be available at https://ir.synnex.com. The conference call will also be available via telephone by dialing (866) 393-4306 in North America or (734) 385-2616 for international callers. The passcode for the call is “SNX.” A replay of the webcast will be available at https://ir.synnex.com approximately two hours after the conference call has concluded where it will be archived for one year.
About SYNNEX
SYNNEX Corporation (NYSE: SNX) is a Fortune 200 corporation and a leading business process services company, providing a comprehensive range of distribution, logistics and integration services for the technology industry and providing outsourced services focused on customer engagement to a broad range of enterprises. SYNNEX distributes a broad range of information technology systems and products, and also provides systems design and integration solutions. Founded in 1980, SYNNEX Corporation operates in numerous countries throughout North and South America, Asia-Pacific and Europe. Additional information about SYNNEX may be found online at www.synnex.com.
About Concentrix
Concentrix, a wholly-owned subsidiary of SYNNEX Corporation (NYSE: SNX), is a leading business services company. We focus on customer engagement and improving business outcomes for over 450 global clients across many continents. Our 100,000+ staff deliver technology-infused, omni-channel customer experience management, marketing optimization, digital, consulting, analytics and back office solutions in 40+ languages from 125+ delivery centers. We serve automotive; banking and financial services; insurance; healthcare; technology; consumer electronics; media and communications; retail and ecommerce; travel and transportation; and energy and public sector clients. Visit http://www.concentrix.com to learn more.

Use of Non-GAAP Financial Information
In addition to the financial results presented in accordance with GAAP, SYNNEX also uses adjusted selling, general and administrative expenses, non-GAAP operating income, non-GAAP operating margin, adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), non-GAAP net income, and non-GAAP diluted earnings per share, which are non-GAAP financial measures that exclude acquisition-related and integration expenses, restructuring costs, the amortization of intangible assets and the related tax effects thereon.
In fiscal year 2018, non-GAAP net income and non-GAAP diluted earnings per share also exclude the impact of a provisional adjustment relating to the enactment of the Tax Cuts and Jobs Act of 2017. This adjustment includes an estimated transition tax on accumulated overseas profits and the estimated remeasurement of deferred tax assets and liabilities to the new U.S. tax rate. These estimates may be impacted by new guidance issued by regulators, additional information obtained related to earnings and profits in foreign jurisdictions and the impact of our financial position as of the measurement date of November 30, 2018. SYNNEX expects the accounting for the tax effects of the Tax Cuts and Jobs Act will be completed during the one-year measurement period.
Additionally, SYNNEX refers to growth rates at constant currency or adjusting for the translation effect of foreign currencies so that certain financial results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of the Company's business performance. Financial results adjusted for currency are calculated by translating current period activity in the transaction currency using the comparable prior year periods’ currency conversion rate. Generally, when the dollar either strengthens or weakens against other currencies, growth at constant currency rates or adjusting for currency will be higher or lower than growth reported at actual exchange rates.
Trailing fiscal four quarters ROIC is defined as the last four quarters’ tax effected operating income divided by the average of the last five quarterly balances of borrowings (excluding book overdraft) and equity, net of cash


and cash equivalents in the United States. Adjusted ROIC is calculated by excluding the tax effected impact of acquisition-related and integration expenses, restructuring costs and the amortization of intangibles from operating income and equity.

SYNNEX management uses non-GAAP financial measures internally to understand, manage and evaluate the business, to establish operational goals, and in some cases for measuring performance for compensation purposes. These non-GAAP measures are intended to provide investors with an understanding of SYNNEX’ operational results and trends that more readily enable investors to analyze SYNNEX' base financial and operating performance and to facilitate period-to-period comparisons and analysis of operational trends, as well as for planning and forecasting in future periods. Management believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making. As these non-GAAP financial measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. A reconciliation of SYNNEX’ non-GAAP financial information to GAAP is set forth in the supplemental information section at the end of this press release.

Safe Harbor Statement
Statements in this news release regarding SYNNEX Corporation, which are not historical facts, are "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, foresee, expect, may, will, provide, could and should and the negative of these terms or other similar expressions. These statements, including statements regarding SYNNEX’ expectations and outlook for the fiscal 2018 fourth quarter as to revenue, net income, non-GAAP net income, diluted earnings per share, non-GAAP diluted earnings per share, tax rate, after-tax amortization of intangibles, and after-tax acquisition-related and integration expenses, as well as statements regarding currency impact, the anticipated benefits of the non-GAAP financial measures, estimates related to the Tax Cuts and Jobs Act of 2017, as well as expectations relating to the accounting thereof, tax rate, expected close of the Convergys acquisition, and impact, including growth, leverage and other benefits, in connection with the planned Convergys acquisition, are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in the forward-looking statements. These risks and uncertainties include, but are not limited to: general economic conditions and any weakness in information technology and consumer electronics spending; the timing of the close and estimated financial impact of the Convergys transaction, the loss or consolidation of one or more of our significant original equipment manufacturer, or OEM, suppliers or customers; market acceptance and product life of the products we assemble and distribute; competitive conditions in our industry and their impact on our margins; pricing, margin and other terms with our OEM suppliers; our ability to gain market share; variations in supplier-sponsored programs; changes in our costs and operating expenses; changes in foreign currency exchange rates; changes in tax laws; risks associated with our international operations; uncertainties and variability in demand by our reseller and integration customers; supply shortages or delays; any termination or reduction in our floor plan financing arrangements; credit exposure to our reseller customers and negative trends in their businesses; any future incidents of theft; and other risks and uncertainties detailed in our Form 10-K for the fiscal year ended November 30, 2017 and subsequent SEC filings. Statements included in this press release are based upon information known to SYNNEX Corporation as of the date of this release, and SYNNEX Corporation assumes no obligation to update information contained in this press release.
Copyright 2018 SYNNEX Corporation. All rights reserved. SYNNEX, the SYNNEX Logo, CONCENTRIX, and all other SYNNEX company, product and services names and slogans are trademarks or registered trademarks of SYNNEX Corporation. SYNNEX, the SYNNEX Logo, and CONCENTRIX Reg. U.S. Pat. & Tm. Off. Other names and marks are the property of their respective owners.



SYNNEX Corporation
Consolidated Balance Sheets
(currency and share amounts in thousands, except for per share amounts)
(Amounts may not add due to rounding)
(unaudited)
 
August 31, 2018
 
November 30, 2017
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
203,988

 
$
550,688

Restricted cash
6,850

 
5,837

Short-term investments
3,321

 
5,475

Accounts receivable, net
2,951,011

 
2,846,371

Receivable from related parties
32

 
77

Inventories
2,040,103

 
2,162,626

Other current assets
199,891

 
168,704

Total current assets
5,405,197

 
5,739,778

Property and equipment, net
343,548

 
346,589

Goodwill
853,914

 
872,641

Intangible assets, net
497,013

 
583,051

Deferred tax assets
31,802

 
31,687

Other assets
126,829

 
124,780

Total assets
$
7,258,302

 
$
7,698,526

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Borrowings, current
$
732,272

 
$
805,471

Accounts payable
2,214,040

 
2,626,720

Payable to related parties
21,099

 
16,888

Accrued compensation and benefits
193,502

 
204,665

Other accrued liabilities
380,268

 
354,104

Income taxes payable
40,818

 
33,359

Total current liabilities
3,581,999

 
4,041,207

Long-term borrowings
1,090,654

 
1,136,089

Other long-term liabilities
170,414

 
124,008

Deferred tax liabilities
87,873

 
113,527

Total liabilities
4,930,940

 
5,414,831

Stockholders’ equity:
 
 
 
Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued or outstanding
—

 
—

Common stock, $0.001 par value, 100,000 shares authorized, 41,193 and 41,092 shares issued as of August 31, 2018 and November 30, 2017, respectively
41

 
41

Additional paid-in capital
488,538

 
467,948

Treasury stock, 1,985 and 1,419 shares as of August 31, 2018 and November 30, 2017, respectively
(134,841
)
 
(77,133
)
Accumulated other comprehensive income (loss)
(126,721
)
 
(61,919
)
Retained earnings
2,100,345

 
1,954,758

Total stockholders' equity
2,327,362

 
2,283,695

Total liabilities and equity
$
7,258,302

 
$
7,698,526



SYNNEX Corporation
Consolidated Statements of Operations
(currency and share amounts in thousands, except for per share amounts)
(Amounts may not add due to rounding)
(unaudited)
 
Three Months Ended
 
Nine Months Ended
 
August 31, 2018
 
August 31, 2017
 
August 31, 2018
 
August 31, 2017
Revenue:
 
 
 
 
 
 
 
Products
$
4,419,097

 
$
3,784,599

 
$
12,954,255

 
$
10,289,463

Services
487,513

 
492,087

 
1,477,308

 
1,444,360

Total revenue
4,906,610

 
4,276,686

 
14,431,562

 
11,733,823

Cost of revenue:
 
 
 
 
 
 
 
Products
(4,165,118
)
 
(3,590,007
)
 
(12,228,350
)
 
(9,736,190
)
Services
(308,322
)
 
(311,735
)
 
(926,998
)
 
(908,661
)
Gross profit
433,170

 
374,944

 
1,276,215

 
1,088,972

Selling, general and administrative expenses
(316,274
)
 
(252,728
)
 
(923,449
)
 
(739,867
)
Operating income
116,896

 
122,216

 
352,766

 
349,105

Interest expense and finance charges, net
(20,058
)
 
(9,754
)
 
(53,884
)
 
(26,898
)
Other income (expense), net
(872
)
 
1,854

 
(3,497
)
 
1,325

Income before income taxes
95,966

 
114,316

 
295,385

 
323,532

Provision for income taxes
(26,675
)
 
(39,153
)
 
(107,968
)
 
(113,432
)
Net income
$
69,291

 
$
75,163

 
$
187,417

 
$
210,100

Earnings per common share:
 
 
 
 
 
 
 
Basic
$
1.75

 
$
1.88

 
$
4.70

 
$
5.27

Diluted
$
1.74

 
$
1.87

 
$
4.67

 
$
5.24

Weighted-average common shares outstanding:
 
 


 
 
 
 
Basic
39,254

 
39,563

 
39,483

 
39,530

Diluted
39,475

 
39,748

 
39,730

 
39,722

Cash dividends declared per share
$
0.35

 
$
0.25

 
$
1.05

 
$
0.75

 



SYNNEX Corporation
Segment Information
(currency in thousands)
(Amounts may not add due to rounding)
(unaudited)
 
Three Months Ended
 
Nine Months Ended
 
August 31, 2018
 
August 31, 2017
 
August 31, 2018
 
August 31, 2017
Revenue:
 
 
 
 
 
 
 
  Technology Solutions
$
4,419,109

 
$
3,784,678

 
$
12,954,337

 
$
10,289,694

  Concentrix
491,882

 
495,974

 
1,490,865

 
1,455,817

  Inter-segment elimination
(4,382
)
 
(3,966
)
 
(13,639
)
 
(11,688
)
  Consolidated
$
4,906,610

 
$
4,276,686

 
$
14,431,562

 
$
11,733,823

 
 
 
 
 
 
 
 
Operating income:
 
 
 
 
 
 
 
  Technology Solutions
$
104,828

 
$
99,968

 
$
283,351

 
$
282,094

  Concentrix
12,068

 
22,248

 
69,415

 
66,989

  Inter-segment elimination
—

 
—

 
—

 
22

  Consolidated
$
116,896

 
$
122,216

 
$
352,766

 
$
349,105




SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(currency in thousands)
(Amounts may not add due to rounding)

 
Three Months Ended
 
Nine Months Ended
 
August 31, 2018
 
August 31, 2017
 
August 31, 2018
 
August 31, 2017
Revenue in Constant Currency
 
 
 
 
 
 
 
Consolidated
 
 
 
 
 
 
 
Revenue
$
4,906,610

 
$
4,276,686

 
$
14,431,562

 
$
11,733,823

Foreign currency translation
10,733

 
 
 
(63,162
)
 
 
Revenue in constant currency
$
4,917,343

 
$
4,276,686

 
$
14,368,400

 
$
11,733,823

 
 
 
 
 
 
 
 
Technology Solutions
 
 
 
 
 
 
 
Segment revenue
$
4,419,109

 
$
3,784,678

 
$
12,954,337

 
$
10,289,694

Foreign currency translation
5,704

 
 
 
(45,554
)
 
 
Revenue in constant currency
$
4,424,813

 
$
3,784,678

 
$
12,908,783

 
$
10,289,694

 
 
 
 
 
 
 
 
Concentrix
 
 
 
 
 
 
 
Segment revenue
$
491,882

 
$
495,974

 
$
1,490,865

 
$
1,455,817

Foreign currency translation
5,029

 
 
 
(17,608
)
 
 
Revenue in constant currency
$
496,911

 
$
495,974

 
$
1,473,257

 
$
1,455,817



 
Three Months Ended
 
Nine Months Ended
 
August 31, 2018
 
August 31, 2017
 
August 31, 2018
 
August 31, 2017
Selling, general and administrative expenses
 
 
 
 
 
 
 
Consolidated
 
 
 
 
 
 
 
GAAP selling, general and administrative expenses
$
316,274

 
$
252,728

 
$
923,449

 
$
739,867

Acquisition-related and integration expenses
19,568

 
1,026

 
23,419

 
1,637

Amortization of intangibles
25,777

 
16,268

 
77,882

 
47,984

Adjusted selling, general and administrative expenses
$
270,929

 
$
235,434

 
$
822,148

 
$
690,246

 
 
 
 
 
 
 
 
Technology Solutions
 
 
 
 
 
 
 
GAAP selling, general and administrative expenses
$
149,163

 
$
94,702

 
$
442,630

 
$
271,407

Acquisition-related and integration expenses
2,498

 
705

 
6,349

 
705

Amortization of intangibles
12,524

 
656

 
37,802

 
1,961

Adjusted selling, general and administrative expenses
$
134,141

 
$
93,341

 
$
398,479

 
$
268,741

 
 
 
 
 
 
 
 
Concentrix
 
 
 
 
 
 
 
GAAP selling, general and administrative expenses
$
168,984

 
$
159,728

 
$
486,120

 
$
474,132

Acquisition-related and integration expenses
17,070

 
321

 
17,070

 
932

Amortization of intangibles
13,253

 
15,612

 
40,080

 
46,023

Adjusted selling, general and administrative expenses
$
138,661

 
$
143,795

 
$
428,970

 
$
427,177



SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(currency in thousands)
(Amounts may not add due to rounding)
(continued)
 
Three Months Ended
 
Nine Months Ended
 
August 31, 2018
 
August 31, 2017
 
August 31, 2018
 
August 31, 2017
Operating income and Operating margin
 
 
 
 
 
 
 
Consolidated
 
 
 
 
 
 
 
Revenue
$
4,906,610

 
$
4,276,686

 
$
14,431,562

 
$
11,733,823

 
 
 
 
 
 
 
 
GAAP operating income
$
116,896

 
$
122,216

 
$
352,766

 
$
349,105

Acquisition-related and integration expenses
19,568

 
1,026

 
23,419

 
1,637

Amortization of intangibles
26,197

 
16,688

 
79,183

 
49,244

Non-GAAP operating income
$
162,661

 
$
139,930

 
$
455,368

 
$
399,986

Depreciation
22,511

 
20,185

 
67,031

 
59,058

Adjusted EBITDA
$
185,172

 
$
160,115

 
$
522,399

 
$
459,044

 
 
 
 
 
 
 
 
GAAP operating margin
2.38
%
 
2.86
%
 
2.44
%
 
2.98
%
Non-GAAP operating margin
3.32
%
 
3.27
%
 
3.16
%
 
3.41
%
 
 
 
 
 
 
 
 
Technology Solutions
 
 
 
 
 
 
 
Segment revenue
$
4,419,109

 
$
3,784,678

 
$
12,954,337

 
$
10,289,694

 
 
 
 
 
 
 
 
GAAP operating income
$
104,828

 
$
99,968

 
$
283,351

 
$
282,094

Acquisition-related and integration expenses
2,498

 
705

 
6,349

 
705

Amortization of intangibles
12,524

 
656

 
37,802

 
1,961

Non-GAAP operating income
$
119,850

 
$
101,329

 
$
327,502

 
$
284,760

Depreciation
5,212

 
3,530

 
15,056

 
10,408

Adjusted EBITDA
$
125,062

 
$
104,859

 
$
342,558

 
$
295,168

 
 
 
 
 
 
 
 
GAAP operating margin
2.37
%
 
2.64
%
 
2.19
%
 
2.74
%
Non-GAAP operating margin
2.71
%
 
2.68
%
 
2.53
%
 
2.77
%
 
 
 
 
 
 
 
 
Concentrix
 
 
 
 
 
 
 
Segment revenue
$
491,882

 
$
495,974

 
$
1,490,865

 
$
1,455,817

 
 
 
 
 
 
 
 
GAAP operating income
$
12,068

 
$
22,248

 
$
69,415

 
$
66,989

Acquisition-related and integration expenses
17,070

 
321

 
17,070

 
932

Amortization of intangibles
13,673

 
16,032

 
41,381

 
47,283

Non-GAAP operating income
$
42,811

 
$
38,601

 
$
127,866

 
$
115,204

Depreciation
17,299

 
16,655

 
51,975

 
48,673

Adjusted EBITDA
$
60,110

 
$
55,256

 
$
179,841

 
$
163,877

 
 
 
 
 
 
 
 
GAAP operating margin
2.45
%
 
4.49
%
 
4.66
%
 
4.60
%
Non-GAAP operating margin
8.70
%
 
7.78
%
 
8.58
%
 
7.91
%



SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(currency and share amounts in thousands, except for per share amounts)
(Amounts may not add due to rounding)
(continued)

 
Three Months Ended
 
Nine Months Ended
 
August 31, 2018
 
August 31, 2017
 
August 31, 2018
 
August 31, 2017
Net income
 
 
 
 
 
 
 
Net income
$
69,291

 
$
75,163

 
$
187,417

 
$
210,100

Acquisition-related and integration expenses
19,568

 
1,026

 
20,785

 
1,637

Amortization of intangibles
26,197

 
16,688

 
79,183

 
49,244

Income taxes related to the above(1)
(12,798
)
 
(6,064
)
 
(28,181
)
 
(17,839
)
U.S. tax reform adjustment
—

 
—

 
24,701

 
—

Non-GAAP net income
$
102,258

 
$
86,813

 
$
283,905

 
$
243,142

 
 
 
 
 
 
 
 
Diluted earnings per common share ("EPS")(2)
 
 
 
 
 
 
 
Net income
$
69,291

 
$
75,163

 
$
187,417

 
$
210,100

Less: net income allocated to participating securities
(665
)
 
(686
)
 
(1,741
)
 
(1,943
)
Net income attributable to common stockholders
68,626

 
74,477

 
185,676

 
208,157

Acquisition-related and integration expenses attributable to common stockholders
19,381

 
1,017

 
20,593

 
1,622

Amortization of intangibles attributable to common stockholders
25,947

 
16,535

 
78,450

 
48,787

Income taxes related to the above attributable to common stockholders(1)
(12,676
)
 
(6,009
)
 
(27,920
)
 
(17,673
)
U.S. tax reform adjustment attributable to common stockholders
—

 
—

 
24,472

 
—

Non-GAAP net income attributable to common stockholders
$
101,279

 
$
86,020

 
$
281,271

 
$
240,893

 
 
 
 
 
 
 
 
Weighted-average number of common shares - diluted:
39,475

 
39,748

 
39,730

 
39,722

 
 
 
 
 
 
 
 
Diluted EPS(2)
$
1.74

 
$
1.87

 
$
4.67

 
$
5.24

Acquisition-related and integration expenses
0.49

 
0.03

 
0.52

 
0.04

Amortization of intangibles
0.66

 
0.42

 
1.97

 
1.23

Income taxes related to the above(1)
(0.32
)
 
(0.15
)
 
(0.70
)
 
(0.44
)
U.S. tax reform adjustment
—

 
—

 
0.62

 
—

Non-GAAP Diluted EPS
$
2.57

 
$
2.16

 
$
7.08

 
$
6.06



SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(amounts in millions, except for per share amounts)
(Amounts may not add due to rounding)
(continued)
 
Forecast
 
Three Months Ending November 30, 2018
 
Low
 
High
Net income
 
 
 
Net income
$
48.3

 
$
57.9

Acquisition-related and integration expenses
52.2

 
52.2

Amortization of intangibles
66.1

 
66.1

Income taxes related to the above(1)
(29.8
)
 
(29.8
)
Non-GAAP net income
$
136.8

 
$
146.4

 
 
 
 
Diluted EPS(2)
$
1.02

 
$
1.23

Acquisition-related and integration expenses
1.11

 
1.11

Amortization of intangibles
1.40

 
1.40

Income taxes related to the above(1)
(0.63
)
 
(0.63
)
Non-GAAP Diluted EPS
$
2.90

 
$
3.10

(1) The tax effect of the non-GAAP adjustments was calculated using the effective year-to date tax rate during the respective fiscal years, except for acquisition-related and integration expenses and amortization of intangibles for the three months ending November 30, 2018, which was calculated by estimating the tax deductible portion of these expenses and applying the entity-specific tax rates. The effective tax rate for fiscal year 2018 excludes the impact of the transition tax on accumulated overseas profits and the remeasurement of deferred tax assets and liabilities to the new U.S. tax rate related to the enactment of the Tax Cuts and Jobs Act of 2017.
(2) Diluted EPS for all periods presented is calculated using the two-class method. Unvested restricted stock awards granted to employees are considered participating securities.  For purposes of calculating Diluted EPS, Net income allocated to participating securities was approximately 1.0% and 0.9% of Net income for the three and nine months ended August 31, 2018, respectively and approximately 0.9% of Net income for both the three and nine months ended August 31, 2017. Net income allocable to participating securities is estimated to be approximately 0.8% of the forecast Net income for the three months ending November 30, 2018.



SYNNEX Corporation
Calculation of Financial Metrics
(currency in thousands)
(Amounts may not add or compute due to rounding)

ROIC
 
August 31, 2018
 
August 31, 2017
ROIC
 
 
 
Operating income (trailing fiscal four quarters)
$
512,626

 
$
479,745

Income taxes on operating income(1)
(185,645
)
 
(162,241
)
Operating income after taxes
326,981

 
317,504

 
 
 
 
Total borrowings, excluding book overdraft (last five quarters average)
$
1,684,413

 
$
982,084

Total equity (last five quarters average)
2,290,968

 
2,054,776

Less: U.S. cash and cash equivalents (last five quarters average)
(114,037
)
 
(85,189
)
Total invested capital
3,861,344

 
2,951,671

 
 
 
 
ROIC
8.5
%
 
10.8
%
 
 
 
 
Adjusted ROIC
 
 
 
Non-GAAP operating income (trailing fiscal four quarters)
$
648,309

 
$
556,071

Income taxes on Non-GAAP operating income(1)
(196,784
)
 
(187,841
)
Non-GAAP operating income after taxes
451,525

 
368,230

 
 
 
 
Total invested capital
$
3,861,344

 
$
2,951,671

Tax effected impact of cumulative non-GAAP adjustments (last five quarters average)
279,106

 
194,195

Total Non-GAAP invested capital
4,140,450

 
3,145,866

 
 
 
 
Adjusted ROIC
10.9
%
 
11.7
%
(1) Income taxes on GAAP and non-GAAP operating income was calculated using the effective year-to-date tax rates during the respective periods. The effective tax rate for non-GAAP operating income in fiscal year 2018 excludes the impact of the transition tax on accumulated overseas profits and the remeasurement of deferred tax assets and liabilities to the new U.S. tax rate related to the enactment of the Tax Cuts and Jobs Act of 2017.


Debt to Capitalization
 
 
August 31, 2018
 
August 31, 2017
Total borrowings, excluding book overdraft
(a)
$
1,821,617

 
$
1,049,605

Total equity
(b)
2,327,362

 
2,216,871

Debt to capitalization
(a)/((a)+(b))
43.9
%
 
32.1
%




SYNNEX Corporation
Calculation of Financial Metrics
(currency in thousands)
(Amounts may not add or compute due to rounding)
(continued)

Cash Conversion Cycle
 
 
Three Months Ended
 
 
August 31, 2018
 
August 31, 2017
Days sales outstanding
 
 
 
 
Revenue (products and services)
(a)
$
4,906,610

 
$
4,276,686

Accounts receivable, including receivable from related parties
(b)
2,951,043

 
1,861,481

Days sales outstanding
(c) = (b)/((a)/the number of days during the period)
55

 
40

 
 
 
 
 
Days inventory outstanding
 
 
 
 
Cost of revenue (products and services)
(d)
$
4,473,440

 
$
3,901,742

Inventories
(e)
2,040,103

 
2,242,083

Days inventory outstanding
(f) = (e)/((d)/the number of days during the period)
42

 
53

 
 
 
 
 
Days payable outstanding
 
 
 
 
Cost of revenue (products and services)
(g)
$
4,473,440

 
$
3,901,742

Accounts payable, including payable to related parties
(h)
2,235,139

 
1,804,110

Days payable outstanding
(i) = (h)/((g)/the number of days during the period)
46

 
43

 
 
 
 
 
Cash conversion cycle
(j) = (c)+(f)-(i)
51

 
50