SYNNEX Corp. (SNX) filed Quarterly Report for the period ended 2009-08-31.
Synnex Corp is a global IT supply chain services company offering a comprehensive range of services to original equipment manufacturers and software publishers or (OEMs) and reseller customers worldwide. The company offers product distribution related logistics services and contract assembly. SYNNEX distributes IT systems peripherals system components software and networking equipment for OEM suppliers such as HP IBM Intel Microsoft Corporation and Seagate. Synnex Corp. has a market cap of $998.9 million; its shares were traded at around $30.12 with a P/E ratio of 11.5 and P/S ratio of 0.1.
Highlight of Business Operations:
In fiscal year 2007, in connection with the acquisition of Redmond Group of Companies, or RGC, we announced a restructuring program in Canada under Emerging Issues Task Force, or EITF, No. 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination,” or EITF No. 95-3. During the three months ended August 31, 2009, we recorded an additional restructuring accrual of $0.6 million for the remaining lease obligations on the RGC facility. The balance outstanding for facility and exit costs as of August 31, 2009 and November 30, 2008 was $0.6 million and $0.3 million, respectively.
The property located in Ontario, Canada, which was held for sale, in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” was sold during the nine months ended August 31, 2009 for $1.6 million at a loss of $0.05 million.
Selling, general and administrative expenses decreased for the three months ended August 31, 2009 both on a dollar basis as well as percentage of revenue basis from prior year quarter mainly due to a year over year decrease in personnel expense of $2.6 million, a decrease in bad debt reserves and other overhead expenses of $1.4 million, offset by an increase in deferred compensation expense of $2.2 million and an increase of $0.6 million in additional restructuring accrual for our Canadian facility. The aggregate amount of year over year selling, general and administrative expenses increase was offset in part by foreign exchange rate translation impact on expenses.
Selling, general and administrative expenses increased for the nine months ended August 31, 2009 both on a dollar basis as well as percentage of revenue basis from the prior year period mainly due to an increase in bad debt reserve of $5.4 million. The remainder of the increase was due to an increase of $4.3 million in deferred compensation expenses, an increase of $1.4 million for rent expense, an increase in personnel expenses of $1.0 million and an increase of $0.6 million in an additional restructuring accrual for the Canadian facility, offset in part by foreign exchange rate translation. The increase in the compensation and other operating costs was also partly due to the impact of our acquisitions made during the previous year, and to support the operations, offset in part by savings from reducing expenditures.
The decrease in interest expense and finance charges, net, for the nine months ended August 31, 2009 compared to the prior year period was approximately $0.5 million as a result of lower borrowings and lower interest rates which was offset by a charge of approximately $0.9 million for the partial write-off of unamortized debt costs associated with the refinancing of our working capital lines in the United States in January 2009, in Canada in May 2009 and the repayment by our subsidiary SYNNEX de Mexico, S.A.d.e C.V. of its secured term loan in August 2009.
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