Synnex Reports $4.13 Billion In 2003 Revenue

The IT distributor, which made its IPO on Nov. 25, saw its revenue increase nearly 10 percent year over year in 2003. In addition, Synnex's fourth quarter revenue rose more than 16 percent from $1.07 billion in the fourth quarter of 2002. The company reported net income for 2003 totaled $30.0 million, or $1.22 per diluted share, compared with net income of $28.0 million, or $1.16 per diluted share for 2002.

Synnex also reported that its completed IPO resulted in aggregate proceeds of $78.3 million. The distributor stated that because the official close date of the IPO was Dec. 1, 2003, fourth quarter and year-end figures do not reflect the effects of the offering.

Robert Huang, president and CEO of Fremont, Calif.-based Synnex, said during the earnings call that Synnex was able to capitalize on the improving economy and demand for IT.

"Our business model is clearly working," said Huang, who also graciously thanked his employees and investors for their hard work.

Synnex officials said distribution revenue in the United States contributed to strong growth for the company. However, the distributor's gross margins were essentially flat vs. the prior year quarter and down slightly sequentially to approximately 4.46 percent. The company attributed higher volume of sales to larger customers and competitive pressures contributed to the decline. The company also said its 2003 fourth quarter results include a charge of $1.8 million, or $1.3 million net of tax, related to the departure of a former executive officer.

Synnex is now seen a top-tier IT distributor and a rival to larger distribution houses such as Ingram Micro and Tech Data. Synnex achieved success over the past year with aggressive pricing and competitive offerings that attracted VARs away from other distributors. The company's stock price debuted at $14.50 and while shares fell early on, Synnex's shares rallied and closed yesterday at $16.65 on the New York Stock Exchange.

Synnex said it expects first quarter net revenues to be in the range of $1.125 to $1.175 billion, with net income in the range $8.8 to $9.4 million and diluted earnings per share in the range of $0.30 to $0.32.