8-K
Td Synnex Corp (SNX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________
FORM 8-K
_________________________________________________
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): September 26, 2023
_________________________________________________
TD SYNNEX CORPORATION
(Exact name of registrant as specified in its charter)
_________________________________________________
| Delaware | 001-31892 | 94-2703333 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
44201 Nobel Drive, Fremont, California
(Address of principal executive offices)
94538
(Zip Code)
(510) 656-3333
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
_________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||
|---|---|---|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||
| --- | --- | ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| --- | --- | ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon stock, par value $0.001 per shareSNXThe New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
The information in this Item 2.02 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Item 2.02 shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
On September 26, 2023, TD SYNNEX Corporation (“TD SYNNEX”) issued a press release regarding TD SYNNEX’ financial results for its fiscal third quarter ended August 31, 2023 and the announcement of a dividend in the amount of $0.35 per common share in the fourth quarter of fiscal year 2023. The full text of TD SYNNEX’ press release is furnished herewith as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description of Document |
|---|---|
| 99.1 | Press Release dated September 26, 2023 regarding financial results. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: September 26, 2023 | TD SYNNEX CORPORATION | |
|---|---|---|
| By: | /s/ Marshall Witt | |
| Marshall Witt | ||
| Chief Financial Officer |
Document
Exhibit 99.1
TD SYNNEX Reports Fiscal 2023 Third Quarter Results
•Revenue of $14.0 billion, at the midpoint of the previously provided outlook of $13.5 - $14.5 billion.
•Non-GAAP gross billings(1) of $18.6 billion, at the midpoint of the previously provided outlook of $18.0 - $19.3 billion.
•Gross margin was 6.96%, up 99 bps from the prior fiscal third quarter, and non-GAAP gross margin(1) was 6.97%, up 84 bps from the prior fiscal third quarter.
•Operating margin was 1.72%, up 15 bps from the prior fiscal third quarter, and non-GAAP operating margin(1) was 2.84%, up 25 bps from the prior fiscal third quarter.
•Net income was $139 million, and non-GAAP net income(1) was $260 million, above the previously provided outlook of $206 - $253 million.
•Diluted earnings per share (“EPS”) of $1.49, and non-GAAP diluted EPS(1) of $2.78, above the previously provided outlook of $2.20 - $2.70.
•Cash provided by operations of $592 million, and free cash flow(1) of $552 million.
•Returned $136 million to shareholders in the form of share repurchases and dividends, and expect accelerated shareholder return in the fiscal fourth quarter.
FREMONT, CA and CLEARWATER, FL, September 26, 2023 – TD SYNNEX (NYSE: SNX) today announced financial results for the fiscal third quarter ended August 31, 2023.
Consolidated Financial Highlights for the Fiscal 2023 Third Quarter:
(Amounts may not add or compute due to rounding)
| Q3 FY23 | Q3 FY22 | Net Change from Q3 FY22 | ||||||
|---|---|---|---|---|---|---|---|---|
| Revenue ($M) | $ | 13,960.6 | $ | 15,356.1 | (9.1) | % | ||
| Non-GAAP gross billings ($M)(1) | $ | 18,583.6 | $ | 19,971.2 | (6.9) | % | ||
| Gross profit ($M) | $ | 971.3 | $ | 916.0 | 6.0 | % | ||
| Non-GAAP gross profit ($M)(1) | $ | 973.7 | $ | 942.0 | 3.4 | % | ||
| Gross margin | 6.96 | % | 5.97 | % | 99 bps | |||
| Non-GAAP gross margin(1) | 6.97 | % | 6.13 | % | 84 bps | |||
| Operating income ($M) | $ | 240.2 | $ | 241.5 | (0.5) | % | ||
| Non-GAAP operating income ($M)(1) | $ | 396.8 | $ | 398.3 | (0.4) | % | ||
| Operating margin | 1.72 | % | 1.57 | % | 15 bps | |||
| Non-GAAP operating margin(1) | 2.84 | % | 2.59 | % | 25 bps | |||
| Net income ($M) | $ | 139.3 | $ | 148.8 | (6.4) | % | ||
| Non-GAAP net income ($M)(1) | $ | 259.8 | $ | 263.4 | (1.4) | % | ||
| Diluted EPS | $ | 1.49 | $ | 1.55 | (3.9) | % | ||
| Non-GAAP Diluted EPS(1) | $ | 2.78 | $ | 2.74 | 1.5 | % |
“Our third quarter results demonstrate the momentum we are seeing on our deliberate and strategic goal to expand in high growth technologies, with robust margin expansion in the Americas and strong EPS generation,” said Rich Hume, CEO of TD SYNNEX. “Our expansive portfolio of products, solutions, and services, along with a relentless focus on execution allowed us to successfully navigate the post-COVID IT spending environment, while our resilient business model enabled us to generate over $500 million in cash from operations, equipping us to increase capital returned to shareholders via share repurchases.”
Consolidated Fiscal 2023 Third Quarter Highlights
•Revenue was $14.0 billion, compared to $15.4 billion in the prior fiscal third quarter, representing a decrease of 9.1%. On a constant currency(1) basis, revenue decreased by 10.2% compared to the prior fiscal third quarter. The revenue change was driven primarily by a decline in our Endpoint Solutions portfolio as the industry continued to see post-pandemic declines in demand for PC ecosystem products. This was partially offset by growth in our Advanced Solutions portfolio. The shift in product mix resulted in a greater percent of our revenues being presented on a net basis, which negatively impacted our revenue compared to the prior fiscal third quarter by approximately 2%.
•Non-GAAP gross billings(1) were $18.6 billion, compared to $20.0 billion in the prior fiscal third quarter.
•Gross profit was $971 million, compared to $916 million in the prior fiscal third quarter. Non-GAAP gross profit(1) was $974 million, compared to $942 million in the prior fiscal third quarter.
•Gross margin was 7.0%, compared to 6.0% in the prior fiscal third quarter. Non-GAAP gross margin(1) was 7.0%, compared to 6.1% in the prior fiscal third quarter. The increase in gross margin was driven primarily by a greater portion of our revenues coming from higher-margin high-growth technologies.
•Operating income was $240 million, compared to $242 million the prior fiscal third quarter. Non-GAAP operating income(1) was $397 million, compared to $398 million in the prior fiscal third quarter.
•Operating margin was 1.7%, compared to 1.6% in the prior fiscal third quarter. Non-GAAP operating margin(1) was 2.8%, compared to 2.6% in the prior fiscal third quarter.
•Diluted EPS was $1.49, compared to $1.55 in the prior fiscal third quarter. Non-GAAP diluted EPS(1) was $2.78, compared to $2.74 in the prior fiscal third quarter, including a $16 million headwind from higher interest expense.
•Cash provided by operations of $592 million, and free cash flow(1) of $552 million, driven in part by a reduction in inventories as backlogs normalize, resulting in the cash conversion cycle improving by 1 day as compared to the fiscal second quarter.
•We returned $136 million to shareholders in the form of $103 million of share repurchases and $33 million of dividends.
Regional Fiscal 2023 Third Quarter Highlights
•Americas:
◦Revenue was $8.9 billion, compared to $9.9 billion in the prior fiscal third quarter, representing a decrease of 10.3%. On a constant currency(1) basis, revenue decreased by 10.1% compared to the prior fiscal third quarter.
◦Operating income was $193 million, compared to $180 million in the prior fiscal third quarter. Non-GAAP operating income(1) was $302 million, compared to $282 million in the prior fiscal third quarter.
◦Operating margin was 2.2%, compared to 1.8% in the prior fiscal third quarter. Non-GAAP operating margin(1) was 3.4%, compared to 2.8% in the prior fiscal third quarter.
•Europe:
◦Revenue was $4.2 billion, compared to $4.7 billion in the prior fiscal third quarter, representing a decrease of 9.7%. On a constant currency(1) basis, revenue decreased by 14.3% compared to the prior fiscal third quarter.
◦Operating income was $30 million, compared to $44 million in the prior fiscal third quarter. Non-GAAP operating income(1) was $75 million, compared to $97 million in the prior fiscal third quarter.
◦Operating margin was 0.7%, compared to 0.9% in the prior fiscal third quarter. Non-GAAP operating margin(1) was 1.8%, compared to 2.1% in the prior fiscal third quarter.
•Asia-Pacific and Japan:
◦Revenue was $853 million, compared to $774 million in the prior fiscal third quarter, representing an increase of 10.3%. On a constant currency(1) basis, revenue increased by 12.3% compared to the prior fiscal third quarter.
◦Operating income was $18 million, compared to $17 million in the prior fiscal third quarter. Non-GAAP operating income(1) was $20 million, compared to $19 million in the prior fiscal third quarter.
◦Operating margin was 2.1%, compared to 2.2% in the prior fiscal third quarter. Non-GAAP operating margin(1) was 2.3%, compared to 2.5% in the prior fiscal third quarter.
Fiscal 2023 Fourth Quarter Outlook
The following statements are based on TD SYNNEX’ current expectations for the fiscal 2023 fourth quarter. These statements are forward-looking and actual results may differ materially. Non-GAAP gross billings(1) include the impact of costs incurred and netted against revenue related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts, and the remaining non-GAAP financial measures exclude the impact of acquisition, integration and restructuring costs, amortization of intangible assets, share-based compensation, and the related tax effects thereon.
| Q4 2023 Outlook | |
|---|---|
| Revenue | $14.0 - $15.0 billion |
| Non-GAAP gross billings(1) | $18.5 - $19.7 billion |
| Net income | $116 - $162 million |
| Non-GAAP net income(1) | $223 - $269 million |
| Diluted earnings per share | $1.25 - $1.75 |
| Non-GAAP diluted earnings per share(1) | $2.40 - $2.90 |
| Estimated outstanding diluted weighted average shares | 91.9 million |
Dividend
TD SYNNEX announced today that its Board of Directors declared a quarterly cash dividend of $0.35 per common share. The dividend is payable on October 27, 2023 to stockholders of record as of the close of business on October 13, 2023.
Conference Call and Webcast
TD SYNNEX will host a conference call today to discuss the 2023 fiscal third quarter results at 6:00 AM (PT)/9:00 AM (ET).
A live audio webcast of the earnings call will be accessible at ir.tdsynnex.com and a replay of the webcast will be available following the call.
About TD SYNNEX
TD SYNNEX (NYSE: SNX) is a leading global distributor and solutions aggregator for the IT ecosystem. We’re an innovative partner helping more than 150,000 customers in 100+ countries to maximize the value of technology investments, demonstrate business outcomes and unlock growth opportunities. Headquartered in Fremont, California, and Clearwater, Florida, TD SYNNEX’ 23,500 co-workers are dedicated to uniting compelling IT products, services and solutions from 1,500+ best-in-class technology vendors. Our edge-to-cloud portfolio is anchored in some of the highest-growth technology segments including cloud, cybersecurity, big data/analytics, AI, IoT, mobility and everything as a service. TD SYNNEX is committed to serving customers and communities, and we believe we can have a positive impact on our people and our planet, intentionally acting as a respected corporate citizen. We aspire to be a diverse and inclusive employer of choice for talent across the IT ecosystem. For more information, visit TDSYNNEX.com or follow us on LinkedIn, Facebook and Instagram.
(1)Use of Non-GAAP Financial Information
In addition to the financial results presented in accordance with GAAP, TD SYNNEX refers to revenues on a constant currency basis which adjusts 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 our performance. Financial results adjusted for constant currency are calculated by translating current period activity using the comparable prior year periods’ currency conversion rate. TD SYNNEX uses non-GAAP gross billings, which adjusts revenues to exclude costs related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts. Non-GAAP gross billings are a useful non-GAAP metric in understanding the volume of our business activity and serve as an important performance metric in internally managing our operations. TD SYNNEX uses non-GAAP gross profit and non-GAAP gross margin which exclude purchase accounting adjustments. TD SYNNEX also uses adjusted selling, general and administrative expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per share, which are non-GAAP financial measures that exclude acquisition, integration and restructuring costs, the amortization of intangible assets, share-based compensation expense, purchase accounting adjustments and the related tax effects thereon. Further, the Company uses adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) which excludes other income (expense), net, acquisition, integration and restructuring costs, share-based compensation expense and purchase accounting adjustments. In prior periods, TD SYNNEX has excluded other items relevant to those periods for purposes of its non-GAAP financial measures.
Acquisition, integration and restructuring costs, which are expensed as incurred, primarily represent professional services costs for legal, banking, consulting and advisory services, severance and other personnel-related costs, share-based compensation expense and debt extinguishment fees that are incurred in connection with acquisition, integration, restructuring, and divestiture activities. From time to time, this category may also include transaction-related gains/losses on divestitures/spin-off of businesses, costs related to long-lived assets including impairment charges and accelerated depreciation and amortization expense due to changes in asset useful lives, as well as various other costs associated with the acquisition or divestiture.
TD SYNNEX’ acquisition activities have resulted in the recognition of finite-lived intangible assets which consist primarily of customer relationships and vendor lists. Finite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in the Company’s Statements of Operations. Although intangible assets contribute to the Company’s revenue generation, the amortization of intangible assets does not directly relate to the sale of the Company’s products. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of the Company’s acquisition activity. Accordingly, the Company believes excluding the amortization of intangible assets, along with the other non-GAAP adjustments, which neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance and to analyze underlying business performance and trends. Intangible asset amortization excluded from the related non-GAAP financial measure represents the entire amount recorded within the Company’s GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised.
Share-based compensation expense is a non-cash expense arising from the grant of equity awards to employees based on the estimated fair value of those awards. Although share-based compensation is an important aspect of the compensation of our employees, the fair value of the share-based awards may bear little resemblance to the actual value realized upon the vesting or future exercise of the related share-based awards and the expense can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Given the variety and timing of awards and the subjective assumptions that are necessary when calculating share-based compensation expense, TD SYNNEX believes this additional information allows investors to make additional comparisons between our operating results from period to period.
Purchase accounting adjustments are primarily related to the impact of recognizing the acquired vendor and customer liabilities related to the merger with Tech Data at fair value. These adjustments benefited our non-GAAP operating income through the third fiscal quarter of fiscal 2023 based on historical settlement patterns with our vendors and in accordance with the timing defined in our policy for releasing vendor and customer liabilities we deem remote to be paid.
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 and equity, net of cash. Adjusted ROIC is calculated by excluding the tax effected impact of non-GAAP adjustments from operating income and by excluding the cumulative tax effected impact of current and prior period non-GAAP adjustments on equity.
TD SYNNEX also uses free cash flow, which is cash flow from operating activities, reduced by purchases of property and equipment. TD SYNNEX uses free cash flow to conduct and evaluate its business because, although it is similar to cash flow from operations, TD SYNNEX believes it is an additional useful measure of cash flows since purchases of property and equipment are a necessary component of ongoing operations. Free cash flow reflects an additional way of viewing TD SYNNEX’ liquidity that, when viewed with its GAAP results, provides a more complete understanding of factors and trends affecting its cash flows. Free cash flow has limitations as it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not incorporate payments for business acquisitions. Therefore, TD SYNNEX believes it is important to view free cash flow as a complement to its entire Consolidated Statements of Cash Flows.
TD 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 TD SYNNEX’ operational results and trends that more readily enable investors to analyze TD 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 TD SYNNEX’ Consolidated Financial Statements prepared in accordance with GAAP. A reconciliation of TD SYNNEX’ GAAP to non-GAAP financial information is set forth in the supplemental tables at the end of this press release.
Safe Harbor Statement
Statements in this news release regarding TD SYNNEX that 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. Such forward-looking statements are inherently uncertain, and shareholders and other potential investors must recognize that actual results may differ materially from TD SYNNEX expectations as a result of a variety of factors. 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 forward-looking statements include, but are not limited to, statements about our strategy, demand, plans and positioning, as well as guidance related to the fourth quarter of 2023. Such forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which TD SYNNEX is unable to predict or control, that may cause TD SYNNEX actual results, performance, or plans to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements.
These risks and uncertainties include, but are not limited to: the risk that the legacy SYNNEX and legacy Tech Data businesses will not be integrated successfully or realize the anticipated benefits of the combined company; our ability to realize additional cost optimization benefits; the unfavorable outcome of any legal proceedings that have been or may be instituted against us; the ability to retain key personnel; general economic and political conditions; continued or increased weakness in information technology and consumer electronics spending; seasonality; 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; the timing and amount of returns to our shareholders via repurchases of our common stock and dividends; changes in foreign currency exchange rates; increased inflation; increased risk in the banking system; 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 incidents of theft; the declaration, timing and payment of dividends, and the Board’s reassessment thereof; and other risks and uncertainties detailed in our Form 10-K for the fiscal year ended November 30, 2022 and subsequent SEC filings. Statements included in this press release are based upon information known to TD SYNNEX as of the date of this release, and TD SYNNEX assumes no obligation to update information contained in this press release unless otherwise required by law.
Copyright 2023 TD SYNNEX CORPORATION. All rights reserved. TD SYNNEX, the TD SYNNEX Logo, and all other TD SYNNEX company, product and services names and slogans are trademarks or registered trademarks of TD SYNNEX Corporation. Other names and marks are the property of their respective owners.
| Contacts: | |
|---|---|
| Liz Morali | Bobby Eagle |
| Investor Relations | Global Corporate Communications |
| 510-668-8436 | 727-538-5864 |
| ir@tdsynnex.com | bobby.eagle@tdsynnex.com |
TD SYNNEX Corporation
Consolidated Balance Sheets
(Currency and share amounts in thousands, except par value)
(Amounts may not add or compute due to rounding)
(Unaudited)
| August 31, 2023 | November 30, 2022 | |||
|---|---|---|---|---|
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 1,250,872 | $ | 522,604 |
| Accounts receivable, net | 8,892,130 | 9,420,999 | ||
| Receivables from vendors, net | 822,284 | 819,135 | ||
| Inventories | 7,462,162 | 9,066,620 | ||
| Other current assets | 741,052 | 671,507 | ||
| Total current assets | 19,168,500 | 20,500,865 | ||
| Property and equipment, net | 437,017 | 421,064 | ||
| Goodwill | 3,883,425 | 3,803,850 | ||
| Intangible assets, net | 4,313,828 | 4,422,877 | ||
| Other assets, net | 701,824 | 585,342 | ||
| Total assets | $ | 28,504,594 | $ | 29,733,998 |
| LIABILITIES AND EQUITY | ||||
| Current liabilities: | ||||
| Borrowings, current | $ | 939,713 | $ | 268,128 |
| Accounts payable | 12,485,180 | 13,988,980 | ||
| Other accrued liabilities | 2,107,129 | 2,171,613 | ||
| Total current liabilities | 15,532,022 | 16,428,721 | ||
| Long-term borrowings | 3,139,469 | 3,835,665 | ||
| Other long-term liabilities | 505,202 | 501,856 | ||
| Deferred tax liabilities | 960,153 | 942,250 | ||
| Total liabilities | 20,136,846 | 21,708,492 | ||
| Stockholders’ equity: | ||||
| Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued or outstanding | — | — | ||
| Common stock, $0.001 par value, 200,000 shares authorized, 99,012 and 98,696 shares issued as of August 31, 2023 and November 30, 2022, respectively | 99 | 99 | ||
| Additional paid-in capital | 7,441,649 | 7,374,100 | ||
| Treasury stock, 6,978 and 4,049 shares as of August 31, 2023 and November 30, 2022, respectively | (622,160) | (337,217) | ||
| Accumulated other comprehensive loss | (500,538) | (719,710) | ||
| Retained earnings | 2,048,698 | 1,708,234 | ||
| Total stockholders' equity | 8,367,748 | 8,025,506 | ||
| Total liabilities and equity | $ | 28,504,594 | $ | 29,733,998 |
TD SYNNEX Corporation
Consolidated Statements of Operations
(Currency and share amounts in thousands, except per share amounts)
(Amounts may not add or compute due to rounding)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | |||||
| Revenue | $ | 13,960,615 | $ | 15,356,085 | $ | 43,148,110 | $ | 46,095,853 |
| Cost of revenue | (12,989,342) | (14,440,055) | (40,209,860) | (43,255,373) | ||||
| Gross profit | 971,273 | 916,030 | 2,938,250 | 2,840,480 | ||||
| Selling, general and administrative expenses | (659,454) | (628,078) | (1,987,375) | (1,951,503) | ||||
| Acquisition, integration and restructuring costs | (71,586) | (46,418) | (159,597) | (172,266) | ||||
| Operating income | 240,233 | 241,534 | 791,278 | 716,711 | ||||
| Interest expense and finance charges, net | (67,703) | (52,119) | (222,188) | (142,430) | ||||
| Other expense, net | (2,371) | (1,852) | (6,691) | (12,375) | ||||
| Income before income taxes | 170,159 | 187,563 | 562,399 | 561,906 | ||||
| Provision for income taxes | (30,897) | (38,728) | (123,030) | (131,830) | ||||
| Net income | $ | 139,262 | $ | 148,835 | $ | 439,369 | $ | 430,076 |
| Earnings per common share: | ||||||||
| Basic | $ | 1.49 | $ | 1.55 | $ | 4.67 | $ | 4.48 |
| Diluted | $ | 1.49 | $ | 1.55 | $ | 4.66 | $ | 4.47 |
| Weighted-average common shares outstanding: | ||||||||
| Basic | 92,590 | 95,115 | 93,400 | 95,355 | ||||
| Diluted | 92,881 | 95,407 | 93,676 | 95,648 |
TD SYNNEX Corporation
Regional Financial Highlights
(Currency in millions)
(Amounts may not add or compute due to rounding)
| Q3 FY23 | Q3 FY22 | Net Change from Q3 FY22 | ||||||
|---|---|---|---|---|---|---|---|---|
| Americas | ||||||||
| Revenue | $ | 8,879.6 | $ | 9,900.8 | (10.3) | % | ||
| Operating income | $ | 192.6 | $ | 180.5 | 6.7 | % | ||
| Non-GAAP operating income(1) | $ | 301.8 | $ | 282.1 | 7.0 | % | ||
| Operating margin | 2.17 | % | 1.82 | % | 35 bps | |||
| Non-GAAP operating margin(1) | 3.40 | % | 2.85 | % | 55 bps | |||
| Europe | ||||||||
| Revenue | $ | 4,227.6 | $ | 4,681.8 | (9.7) | % | ||
| Operating income | $ | 29.5 | $ | 44.3 | (33.4) | % | ||
| Non-GAAP operating income(1) | $ | 75.0 | $ | 96.8 | (22.5) | % | ||
| Operating margin | 0.70 | % | 0.95 | % | (25) bps | |||
| Non-GAAP operating margin(1) | 1.78 | % | 2.07 | % | (29) bps | |||
| Asia-Pacific and Japan | ||||||||
| Revenue | $ | 853.4 | $ | 773.5 | 10.3 | % | ||
| Operating income | $ | 18.1 | $ | 16.8 | 7.7 | % | ||
| Non-GAAP operating income(1) | $ | 20.0 | $ | 19.3 | 3.6 | % | ||
| Operating margin | 2.12 | % | 2.17 | % | (5) bps | |||
| Non-GAAP operating margin(1) | 2.34 | % | 2.50 | % | (16) bps |
(1) A reconciliation of TD SYNNEX’ GAAP to non-GAAP financial information is set forth in the supplemental tables at the end of this press release.
TD SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(Currency in thousands)
(Amounts may not add or compute due to rounding)
| Three Months Ended | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | |||||
| Revenue in constant currency | ||||||||
| Consolidated | ||||||||
| Revenue | $ | 13,960,615 | $ | 15,356,085 | $ | 43,148,110 | $ | 46,095,853 |
| Impact of changes in foreign currencies | (176,615) | — | 414,683 | — | ||||
| Revenue in constant currency | $ | 13,784,000 | $ | 15,356,085 | $ | 43,562,793 | $ | 46,095,853 |
| Americas | ||||||||
| Revenue | $ | 8,879,585 | $ | 9,900,779 | $ | 26,217,631 | $ | 28,751,985 |
| Impact of changes in foreign currencies | 24,979 | — | 147,323 | — | ||||
| Revenue in constant currency | $ | 8,904,564 | $ | 9,900,779 | $ | 26,364,954 | $ | 28,751,985 |
| Europe | ||||||||
| Revenue | $ | 4,227,590 | $ | 4,681,797 | $ | 14,209,488 | $ | 14,914,196 |
| Impact of changes in foreign currencies | (216,477) | — | 154,406 | — | ||||
| Revenue in constant currency | $ | 4,011,113 | $ | 4,681,797 | $ | 14,363,894 | $ | 14,914,196 |
| Asia-Pacific and Japan | ||||||||
| Revenue | $ | 853,440 | $ | 773,509 | $ | 2,720,991 | $ | 2,429,672 |
| Impact of changes in foreign currencies | 14,883 | — | 112,954 | — | ||||
| Revenue in constant currency | $ | 868,323 | $ | 773,509 | $ | 2,833,945 | $ | 2,429,672 |
TD SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(Currency in thousands)
(Amounts may not add or compute due to rounding)
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | |||||||||
| Non-GAAP gross billings | ||||||||||||
| Revenue | $ | 13,960,615 | $ | 15,356,085 | $ | 43,148,110 | $ | 46,095,853 | ||||
| Costs incurred and netted against revenue related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts | 4,623,011 | 4,615,129 | 14,353,615 | 13,624,358 | ||||||||
| Non-GAAP gross billings | $ | 18,583,626 | $ | 19,971,214 | $ | 57,501,725 | $ | 59,720,211 | ||||
| — | % | — | % | — | % | — | % | |||||
| Three Months Ended | Nine Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | |||||||||
| Gross profit and gross margin | ||||||||||||
| Revenue | $ | 13,960,615 | $ | 15,356,085 | $ | 43,148,110 | $ | 46,095,853 | ||||
| Gross profit | $ | 971,273 | $ | 916,030 | $ | 2,938,250 | $ | 2,840,480 | ||||
| Purchase accounting adjustments | 2,427 | 25,922 | 15,047 | 78,407 | ||||||||
| Non-GAAP gross profit | $ | 973,700 | $ | 941,952 | $ | 2,953,297 | $ | 2,918,887 | ||||
| Gross margin | 6.96 | % | 5.97 | % | 6.81 | % | 6.16 | % | ||||
| Non-GAAP gross margin | 6.97 | % | 6.13 | % | 6.84 | % | 6.33 | % | ||||
| Three Months Ended | Nine Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | |||||||||
| Selling, general and administrative expenses | ||||||||||||
| Selling, general and administrative expenses | $ | 731,040 | $ | 674,496 | $ | 2,146,972 | $ | 2,123,769 | ||||
| Acquisition, integration and restructuring costs | 71,586 | 46,418 | 159,597 | 172,266 | ||||||||
| Amortization of intangibles | 74,029 | 73,270 | 220,571 | 224,082 | ||||||||
| Share-based compensation | 8,530 | 6,643 | 29,252 | 20,431 | ||||||||
| Purchase accounting adjustments | — | 4,496 | — | 16,564 | ||||||||
| Adjusted selling, general and administrative expenses | $ | 576,895 | $ | 543,669 | $ | 1,737,552 | $ | 1,690,426 | ||||
| — | % | — | % | — | % | — | % |
TD SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(Currency in thousands)
(Amounts may not add or compute due to rounding)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | |||||||||||||||||||||||
| Operating income and operating margin - Consolidated | ||||||||||||||||||||||||||
| Revenue | $ | 13,960,615 | $ | 15,356,085 | $ | 43,148,110 | $ | 46,095,853 | ||||||||||||||||||
| Operating income | $ | 240,233 | $ | 241,534 | $ | 791,278 | $ | 716,711 | ||||||||||||||||||
| Acquisition, integration and restructuring costs | 71,586 | 46,418 | 159,597 | 172,266 | ||||||||||||||||||||||
| Amortization of intangibles | 74,029 | 73,270 | 220,571 | 224,082 | ||||||||||||||||||||||
| Share-based compensation | 8,530 | 6,643 | 29,252 | 20,431 | ||||||||||||||||||||||
| Purchase accounting adjustments | 2,427 | 30,418 | 15,047 | 94,971 | ||||||||||||||||||||||
| Non-GAAP operating income | $ | 396,805 | $ | 398,283 | $ | 1,215,745 | $ | 1,228,461 | ||||||||||||||||||
| Operating margin | 1.72 | % | 1.57 | % | 1.83 | % | 1.55 | % | ||||||||||||||||||
| Non-GAAP operating margin | 2.84 | % | 2.59 | % | 2.82 | % | 2.67 | % | Three Months Ended | Nine Months Ended | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | |||||||||||||||||||||||
| Operating income and operating margin - Americas | ||||||||||||||||||||||||||
| Revenue | $ | 8,879,585 | $ | 9,900,779 | $ | 26,217,631 | $ | 28,751,985 | ||||||||||||||||||
| Operating income | $ | 192,606 | $ | 180,471 | $ | 559,370 | $ | 511,813 | ||||||||||||||||||
| Acquisition, integration and restructuring costs | 60,393 | 33,545 | 122,682 | 102,964 | ||||||||||||||||||||||
| Amortization of intangibles | 42,437 | 43,523 | 127,233 | 130,619 | ||||||||||||||||||||||
| Share-based compensation | 6,325 | 5,036 | 21,076 | 16,126 | ||||||||||||||||||||||
| Purchase accounting adjustments | — | 19,564 | — | 56,132 | ||||||||||||||||||||||
| Non-GAAP operating income | $ | 301,761 | $ | 282,139 | $ | 830,361 | $ | 817,654 | ||||||||||||||||||
| Operating margin | 2.17 | % | 1.82 | % | 2.13 | % | 1.78 | % | ||||||||||||||||||
| Non-GAAP operating margin | 3.40 | % | 2.85 | % | 3.17 | % | 2.84 | % |
TD SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(Currency in thousands)
(Amounts may not add or compute due to rounding)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | |||||||||||||||||||||||
| Operating income and operating margin - Europe | ||||||||||||||||||||||||||
| Revenue | $ | 4,227,590 | $ | 4,681,797 | $ | 14,209,488 | $ | 14,914,196 | ||||||||||||||||||
| Operating income | $ | 29,531 | $ | 44,260 | $ | 157,793 | $ | 150,117 | ||||||||||||||||||
| Acquisition, integration and restructuring costs | 10,304 | 11,313 | 33,750 | 62,112 | ||||||||||||||||||||||
| Amortization of intangibles | 30,970 | 29,103 | 91,469 | 91,543 | ||||||||||||||||||||||
| Share-based compensation | 1,809 | 1,286 | 6,851 | 3,366 | ||||||||||||||||||||||
| Purchase accounting adjustments | 2,427 | 10,854 | 15,047 | 38,839 | ||||||||||||||||||||||
| Non-GAAP operating income | $ | 75,041 | $ | 96,816 | $ | 304,910 | $ | 345,977 | ||||||||||||||||||
| Operating margin | 0.70 | % | 0.95 | % | 1.11 | % | 1.01 | % | ||||||||||||||||||
| Non-GAAP operating margin | 1.78 | % | 2.07 | % | 2.15 | % | 2.32 | % | Three Months Ended | Nine Months Ended | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | |||||||||||||||||||||||
| Operating income and operating margin - Asia-Pacific and Japan | ||||||||||||||||||||||||||
| Revenue | $ | 853,440 | $ | 773,509 | $ | 2,720,991 | $ | 2,429,672 | ||||||||||||||||||
| Operating income | $ | 18,096 | $ | 16,803 | $ | 74,115 | $ | 54,781 | ||||||||||||||||||
| Acquisition, integration and restructuring costs | 889 | 1,560 | 3,165 | 7,190 | ||||||||||||||||||||||
| Amortization of intangibles | 622 | 644 | 1,869 | 1,920 | ||||||||||||||||||||||
| Share-based compensation | 396 | 321 | 1,325 | 939 | ||||||||||||||||||||||
| Non-GAAP operating income | $ | 20,003 | $ | 19,328 | $ | 80,474 | $ | 64,830 | ||||||||||||||||||
| Operating margin | 2.12 | % | 2.17 | % | 2.72 | % | 2.25 | % | ||||||||||||||||||
| Non-GAAP operating margin | 2.34 | % | 2.50 | % | 2.96 | % | 2.67 | % |
TD SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(Currency in thousands, except per share amounts)
(Amounts may not add or compute due to rounding)
| Three Months Ended | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | |||||
| Adjusted EBITDA | ||||||||
| Net income | $ | 139,262 | $ | 148,835 | $ | 439,369 | $ | 430,076 |
| Interest expense and finance charges, net | 67,703 | 52,119 | 222,188 | 142,430 | ||||
| Provision for income taxes | 30,897 | 38,728 | 123,030 | 131,830 | ||||
| Depreciation(1) | 31,256 | 28,247 | 94,346 | 132,561 | ||||
| Amortization of intangibles | 74,029 | 73,270 | 220,571 | 224,082 | ||||
| EBITDA | $ | 343,147 | $ | 341,199 | $ | 1,099,504 | $ | 1,060,979 |
| Other expense, net | 2,371 | 1,852 | 6,691 | 12,375 | ||||
| Acquisition, integration and restructuring costs | 66,846 | 42,025 | 143,360 | 115,002 | ||||
| Share-based compensation | 8,530 | 6,643 | 29,252 | 20,431 | ||||
| Purchase accounting adjustments | 2,427 | 30,418 | 15,047 | 94,971 | ||||
| Adjusted EBITDA | $ | 423,321 | $ | 422,137 | $ | 1,293,854 | $ | 1,303,758 |
(1) Includes depreciation recorded in acquisition, integration, and restructuring costs.
| Three Months Ended | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | |||||
| Net income and diluted EPS | ||||||||
| Net income | $ | 139,262 | $ | 148,835 | $ | 439,369 | $ | 430,076 |
| Acquisition, integration and restructuring costs | 73,897 | 48,730 | 166,446 | 178,691 | ||||
| Amortization of intangibles | 74,029 | 73,270 | 220,571 | 224,082 | ||||
| Share-based compensation | 8,530 | 6,643 | 29,252 | 20,431 | ||||
| Purchase accounting adjustments | 2,427 | 30,418 | 15,047 | 94,971 | ||||
| Income taxes related to the above | (38,375) | (39,419) | (102,700) | (121,827) | ||||
| Income tax capital loss carryback benefit | — | (5,053) | — | (8,299) | ||||
| Non-GAAP net income | $ | 259,770 | $ | 263,424 | $ | 767,985 | $ | 818,125 |
| Diluted EPS(1) | $ | 1.49 | $ | 1.55 | $ | 4.66 | $ | 4.47 |
| Acquisition, integration and restructuring costs | 0.79 | 0.50 | 1.76 | 1.86 | ||||
| Amortization of intangibles | 0.79 | 0.76 | 2.34 | 2.33 | ||||
| Share-based compensation | 0.09 | 0.07 | 0.31 | 0.21 | ||||
| Purchase accounting adjustments | 0.03 | 0.32 | 0.16 | 0.99 | ||||
| Income taxes related to the above | (0.41) | (0.41) | (1.09) | (1.27) | ||||
| Income tax capital loss carryback benefit | — | (0.05) | — | (0.09) | ||||
| Non-GAAP Diluted EPS(1) | $ | 2.78 | $ | 2.74 | $ | 8.14 | $ | 8.50 |
(1) Diluted EPS 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 0.7% of net income for both the three and nine months ended August 31, 2023, and was approximately 0.6% of net income for both the three and nine months ended August 31, 2022.
TD SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(Amounts may not add or compute due to rounding)
| Three Months Ended | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| (Currency in thousands) | August 31, 2023 | August 31, 2022 | August 31, 2023 | August 31, 2022 | ||||
| Free cash flow | ||||||||
| Net cash provided by (used in) operating activities | $ | 591,955 | $ | (67,311) | $ | 1,196,705 | $ | (351,793) |
| Purchases of property and equipment | (39,808) | (32,021) | (107,417) | (78,522) | ||||
| Free cash flow | $ | 552,147 | $ | (99,332) | $ | 1,089,288 | $ | (430,315) |
| Forecast | ||||||||
| --- | --- | --- | --- | --- | ||||
| Three Months Ending November 30, 2023 | ||||||||
| (Currency in millions, except per share amounts) | Low | High | ||||||
| Net income | $ | 116 | $ | 162 | ||||
| Acquisition, integration and restructuring costs | 50 | 50 | ||||||
| Amortization of intangibles | 75 | 75 | ||||||
| Share-based compensation | 16 | 16 | ||||||
| Income taxes related to the above | (34) | (34) | ||||||
| Non-GAAP net income | $ | 223 | $ | 269 | ||||
| Diluted EPS(1) | $ | 1.25 | $ | 1.75 | ||||
| Acquisition, integration and restructuring costs | 0.54 | 0.54 | ||||||
| Amortization of intangibles | 0.81 | 0.81 | ||||||
| Share-based compensation | 0.17 | 0.17 | ||||||
| Income taxes related to the above | (0.37) | (0.37) | ||||||
| Non-GAAP Diluted EPS | $ | 2.40 | $ | 2.90 |
(1) Diluted EPS is calculated using the two-class method. Unvested restricted stock awards granted to employees are considered participating securities. 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, 2023.
TD SYNNEX Corporation
Reconciliation of GAAP to Non-GAAP financial measures
(Amounts may not add or compute due to rounding)
| Forecast | ||||||||
|---|---|---|---|---|---|---|---|---|
| Three Months Ending | ||||||||
| (Currency in billions) | November 30, 2023 | |||||||
| Non-GAAP gross billings | Low | High | ||||||
| Revenue | $ | 14.0 | $ | 15.0 | ||||
| Costs incurred and netted against revenue related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts | 4.5 | 4.7 | ||||||
| Non-GAAP gross billings | $ | 18.5 | $ | 19.7 | Three Months Ended | |||
| --- | --- | --- | ||||||
| (Currency in thousands) | November 30, 2022 | |||||||
| Non-GAAP gross billings | ||||||||
| Revenue | $ | 16,247,957 | ||||||
| Costs incurred and netted against revenue related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts | 4,665,011 | |||||||
| Non-GAAP gross billings | $ | 20,912,968 |
TD SYNNEX Corporation
Calculation of Financial Metrics
Return on Invested Capital (“ROIC”)
(Currency in thousands)
(Amounts may not add or compute due to rounding)
| August 31, 2023 | August 31, 2022 | |||||
|---|---|---|---|---|---|---|
| ROIC | ||||||
| Operating income (trailing fiscal four quarters) | $ | 1,125,440 | $ | 902,076 | ||
| Income taxes on operating income(1) | (228,334) | (152,953) | ||||
| Operating income after taxes | $ | 897,106 | $ | 749,123 | ||
| Total invested capital comprising equity and borrowings, less cash (last five quarters average) | $ | 11,575,572 | $ | 9,809,290 | ||
| ROIC | 7.8 | % | 7.6 | % | ||
| Adjusted ROIC | ||||||
| Non-GAAP operating income (trailing fiscal four quarters) | $ | 1,711,323 | $ | 1,636,397 | ||
| Income taxes on non-GAAP operating income(1) | (381,272) | (396,905) | ||||
| Non-GAAP operating income after taxes | $ | 1,330,051 | $ | 1,239,492 | ||
| Total invested capital comprising equity and borrowings, less cash (last five quarters average) | $ | 11,575,572 | $ | 9,809,290 | ||
| Tax effected impact of cumulative non-GAAP adjustments (last five quarters average) | 961,319 | 489,671 | ||||
| Total non-GAAP invested capital (last five quarters average) | $ | 12,536,891 | $ | 10,298,961 | ||
| Adjusted ROIC | 10.6 | % | 12.0 | % |
(1) Income taxes on GAAP operating income was calculated using the effective year-to-date tax rates during the respective periods. Income taxes on non-GAAP operating income was calculated by excluding the tax effect of taxable and deductible non-GAAP adjustments using the effective year-to-date tax rate during the respective periods.
TD SYNNEX Corporation
Calculation of Financial Metrics
Cash Conversion Cycle
(Currency in thousands)
(Amounts may not add or compute due to rounding)
| Three Months Ended | |||||
|---|---|---|---|---|---|
| August 31, 2023 | August 31, 2022 | ||||
| Days sales outstanding | |||||
| Revenue | (a) | $ | 13,960,615 | $ | 15,356,085 |
| Accounts receivable, net | (b) | 8,892,130 | 8,114,004 | ||
| Days sales outstanding | (c) = ((b)/(a))*the number of days during the period | 59 | 49 | ||
| Days inventory outstanding | |||||
| Cost of revenue | (d) | $ | 12,989,342 | $ | 14,440,055 |
| Inventories | (e) | 7,462,162 | 9,755,228 | ||
| Days inventory outstanding | (f) = ((e)/(d))*the number of days during the period | 53 | 62 | ||
| Days payable outstanding | |||||
| Cost of revenue | (g) | $ | 12,989,342 | $ | 14,440,055 |
| Accounts payable | (h) | 12,485,180 | 13,718,980 | ||
| Days payable outstanding | (i) = ((h)/(g))*the number of days during the period | 89 | 88 | ||
| Cash conversion cycle | (j) = (c)+(f)-(i) | 23 | 23 |