SNX stock surged higher in after-hours trading on January 9, 2020, after the company reported awesome financial results.

5-minute time frame showing SNX stock exploding up 8% in after-hours trading (brown shaded area).

SYNNEX Corporation (NYSE: SNX), a leading business process services company, today announced financial results for the fiscal fourth quarter and fiscal year ended November 30, 2019. Synnex reports Q4 adjusted EPS of $4.26 versus the consensus estimate of $3.61. The company reports Q4 revenue of $6.58B versus the consensus estimate of $5.99B.

“Our record financial performance in Q4, driven by strong contributions from our Technology Solutions and Concentrix segments, is a very satisfying conclusion to an exceptional year,” said Dennis Polk, SYNNEX President and CEO. “Fiscal 2019 was a defining year for SYNNEX, as we invested in, integrated and operated both businesses at scale, while generating solid returns from each segment. Fiscal 2020 will be another defining period as we plan to separate SYNNEX and Concentrix to further enable each entity to achieve its growth potential.”

Fourth Quarter Fiscal 2019 Highlights

  • Technology Solutions: Revenue was $5.4 billion, up 17.4% from the prior fiscal year fourth quarter. Operating income was $167 million, or 3.1% of segment revenue, compared to $126 million, or 2.7% of segment revenue, in the prior fiscal year fourth quarter. Non-GAAP operating income was $178 million, or 3.3% of segment revenue, compared to $139 million, or 3.0% of segment revenue, in the prior fiscal year fourth quarter.
  • Concentrix: Revenue was $1.2 billion, up 24.7% from the prior fiscal year fourth quarter primarily due to the impact of the Convergys acquisition on October 5, 2018. Operating income was $101 million, or 8.4% of segment revenue, compared to $75 million, or 7.7% of segment revenue in the prior fiscal year fourth quarter. Non-GAAP operating income was $161 million, or 13.3% of segment revenue, compared to $129 million, or 13.2% of segment revenue, in the prior fiscal year fourth quarter.
  • The trailing fiscal four quarters Return on Invested Capital (“ROIC”) was 8.8% compared to 7.9% in the prior fiscal year fourth quarter. The adjusted trailing fiscal four quarters ROIC was 11.0%.

Fiscal 2019 Highlights

  • Technology Solutions: Revenue was $19.1 billion, up 10.1% from the prior fiscal year. Operating income was $519 million, or 2.7% of segment revenue, compared to $405 million, or 2.3% of segment revenue, in the prior fiscal year. Non-GAAP operating income was $564 million, or 3.0% of segment revenue, in fiscal year 2019, compared to $463 million, or 2.7% of segment revenue, in the prior fiscal year.
  • Concentrix: Revenue was $4.7 billion, up 91.1% from the prior fiscal year primarily due to the full year impact of the Convergys acquisition on October 5, 2018. Operating income was $294 million, or 6.3% of segment revenue, compared to $145 million, or 5.9% of segment revenue, in the prior fiscal year. Non-GAAP operating income was $531 million, or 11.3% of segment revenue, in fiscal year 2018, compared to $257 million, or 10.4% of segment revenue, in the prior fiscal year.

Synnex To Separate Into Two Publicly Traded Companies

SYNNEX announced its plan to separate into two publicly traded companies: comprising of SYNNEX Technology Solutions, a leading IT distribution, services and integrated solutions company, and Concentrix, a leading global CX solutions company. Immediately following the transaction, SYNNEX shareholders will own shares of both SYNNEX and Concentrix.

“Today, SYNNEX is taking affirmative steps to further drive shareholder value by announcing our plan to separate into two strong, independent, public companies,” said Dennis Polk, SYNNEX President and CEO. “The spin-off will provide each company with sharper strategic and managerial focus and enable SYNNEX shareholders to own and value each business separately. We are very proud of our company and the returns we generated by investing in IT Distribution and CX Services over our nearly 40-year history. We are equally proud to have these two businesses reach a point where they are industry leaders and positioned well to be successful standalone public companies.” Chris Caldwell, President of Concentrix, added, “With Concentrix achieving its current scale and efficiency ahead of expectations, coupled with the market opportunities ahead of us, the appropriate time to separate is now. The separation of the two businesses will enhance each company’s competitive position and accelerate significant value creation opportunities. I, along with the rest of the Concentrix team, are grateful for our time within the SYNNEX family and look forward to continuing the successful SYNNEX legacy.”

Dennis Polk, SYNNEX President and CEO, will continue to hold this position and lead SYNNEX following the separation. Chris Caldwell, President of Concentrix, will lead Concentrix as President and CEO, and will continue to oversee the business as a standalone company following the separation. Over the coming months, Concentrix will assemble its Board of Directors and announce the appointments closer to the expected date of separation. The transaction is expected to be completed in the second half of 2020.

The separation is intended to qualify as a tax-free transaction for federal income tax purposes for both SYNNEX Corporation and current SYNNEX shareholders. Immediately following the separation, SYNNEX shareholders will own shares of both SYNNEX Technology Solutions and Concentrix, at the same percentage owned of SYNNEX, prior to the transaction. Completion of the separation will not require a shareholder vote but will be subject to customary closing conditions, including final approval of the SYNNEX Board of Directors, the receipt of favorable opinion with respect to the tax-free nature of the transaction, and the effectiveness of a Form-10 filing with the U.S. SEC.

SYNNEX will operate on a “business as usual” basis while details of the separation are being finalized. After the separation, SYNNEX and Concentrix are expected to be appropriately capitalized with ample liquidity to support ongoing investments and growth.

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.

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