Td synnex reports fiscal 2022 full year and fourth quarter results; announces dividend increase and new $1b share repurchase authorization
Fremont, calif. & clearwater, fla.--(business wire)--td synnex (nyse: snx) today announced financial results for the fiscal fourth quarter and fiscal year ended november 30, 2022. consolidated financial highlights for the fiscal 2022 fourth quarter: q4 fy22 q4 fy21 net change from q4 fy21 revenue ($m) $ 16,248.0 $ 15,611.3 4.1 % operating income ($m) $ 334.2 $ 185.4 80.3 % non-gaap operating income ($m)(1) $ 495.6 $ 407.9 21.5 % operating margin 2.06 % 1.19 % 87 bps non-gaap operating margin(1) 3.05 % 2.61 % 44 bps net income ($m) $ 221.2 $ 119.4 85.2 % non-gaap net income ($m)(1) $ 329.8 $ 275.8 19.6 % diluted eps $ 2.31 $ 1.24 86.3 % non-gaap diluted eps(1) $ 3.44 $ 2.86 20.3 % “in fiscal year 2022 we harnessed our collective talent and solidified td synnex as the distribution partner of choice,” said rich hume, ceo of td synnex. “through the focused efforts of our co-workers, the business has continued to perform well, and we significantly progressed our core and high-growth expansion strategy and exceeded our ambitious financial goals for both the quarter and the year, despite increased headwinds from foreign currency and higher interest rates. we are well-equipped to navigate the macroeconomic environment in 2023 and expect to continue to perform better than the overall it industry.” fiscal 2022 fourth quarter highlights revenue was $16.2 billion, up 4.1% from the prior fiscal fourth quarter. on a constant currency basis, revenues increased by 10.5%. revenue growth was driven by strong demand in all three regions, primarily due to growth in our advanced solutions portfolio and high-growth technologies. americas: revenues were $10.0 billion, an increase of 7.8% compared to the prior fiscal fourth quarter. on a constant currency basis, revenues increased 8.8%. europe: revenues were $5.4 billion, a decrease of 2.5% compared to the prior fiscal fourth quarter. on a constant currency basis, revenues increased 12.6%. asia-pacific and japan: revenues were $0.8 billion, an increase of 5.9% compared to the prior fiscal fourth quarter. on a constant currency basis, revenues increased 16.5%. americas: revenues were $10.0 billion, an increase of 7.8% compared to the prior fiscal fourth quarter. on a constant currency basis, revenues increased 8.8%. europe: revenues were $5.4 billion, a decrease of 2.5% compared to the prior fiscal fourth quarter. on a constant currency basis, revenues increased 12.6%. asia-pacific and japan: revenues were $0.8 billion, an increase of 5.9% compared to the prior fiscal fourth quarter. on a constant currency basis, revenues increased 16.5%. operating income was $334 million, compared to $185 million in the prior fiscal fourth quarter. non-gaap operating income was $496 million in the current quarter compared to $408 million in the prior fiscal fourth quarter. operating margin was 2.1%, compared to 1.2% in the prior fiscal fourth quarter. non-gaap operating margin was 3.1% in the current quarter, compared to 2.6% in the prior fiscal fourth quarter. across all regions, operating margin expansion was driven by mix shift to high-growth technologies, cost discipline and merger synergy execution. americas: operating income was $222 million, compared to $125 million in the prior fiscal fourth quarter. non-gaap operating income was $324 million in the current quarter compared to $270 million in the prior fiscal fourth quarter. operating margin was 2.2%, compared to 1.3% in the prior fiscal fourth quarter. non-gaap operating margin was 3.2% in the current quarter, compared to 2.9% in the prior fiscal fourth quarter. europe: operating income was $77 million, compared to $45 million in the prior fiscal fourth quarter. non-gaap operating income was $135 million in the current quarter compared to $117 million in the prior fiscal fourth quarter. operating margin was 1.4%, compared to 0.8% in the prior fiscal fourth quarter. non-gaap operating margin was 2.5% in the current quarter, compared to 2.1% in the prior fiscal fourth quarter. asia-pacific and japan: operating income was $35 million, compared to $15 million in the prior fiscal fourth quarter. non-gaap operating income was $37 million in the current quarter compared to $20 million in the prior fiscal fourth quarter. operating margin was 4.2%, compared to 2.0% in the prior fiscal fourth quarter. non-gaap operating margin was 4.5% in the current quarter, compared to 2.6% in the prior fiscal fourth quarter. americas: operating income was $222 million, compared to $125 million in the prior fiscal fourth quarter. non-gaap operating income was $324 million in the current quarter compared to $270 million in the prior fiscal fourth quarter. operating margin was 2.2%, compared to 1.3% in the prior fiscal fourth quarter. non-gaap operating margin was 3.2% in the current quarter, compared to 2.9% in the prior fiscal fourth quarter. europe: operating income was $77 million, compared to $45 million in the prior fiscal fourth quarter. non-gaap operating income was $135 million in the current quarter compared to $117 million in the prior fiscal fourth quarter. operating margin was 1.4%, compared to 0.8% in the prior fiscal fourth quarter. non-gaap operating margin was 2.5% in the current quarter, compared to 2.1% in the prior fiscal fourth quarter. asia-pacific and japan: operating income was $35 million, compared to $15 million in the prior fiscal fourth quarter. non-gaap operating income was $37 million in the current quarter compared to $20 million in the prior fiscal fourth quarter. operating margin was 4.2%, compared to 2.0% in the prior fiscal fourth quarter. non-gaap operating margin was 4.5% in the current quarter, compared to 2.6% in the prior fiscal fourth quarter. diluted eps was $2.31, compared to $1.24 in the prior fiscal fourth quarter, an increase of 86.3%. non-gaap diluted eps was $3.44, compared to $2.86 in the prior fiscal fourth quarter, an increase of 20.3% and $0.34 above the high end of our prior guidance range. cash provided by operations was $302 million for the quarter. returned $71 million to shareholders via repurchases of our common stock of $42 million and dividends of $29 million. consolidated financial highlights fiscal 2022: fy22 fy21 net change from fy21 revenue ($m) $ 62,343.8 $ 31,614.2 97.2 % operating income ($m) $ 1,050.9 $ 623.2 68.6 % non-gaap operating income ($m)(1) $ 1,724.0 $ 902.1 91.1 % operating margin 1.69 % 1.97 % (28) bps non-gaap operating margin(1) 2.77 % 2.85 % (8) bps net income ($m) $ 651.3 $ 395.1 64.9 % non-gaap net income ($m)(1) $ 1,147.9 $ 595.7 92.7 % diluted eps $ 6.77 $ 6.24 8.5 % non-gaap diluted eps(1) $ 11.94 $ 9.40 27.0 % fiscal 2022 highlights revenue was $62.3 billion, up 97.2% from the prior fiscal year, primarily due to the impact of the completion of the merger with tech data on september 1, 2021. operating income was $1.05 billion, compared to $623 million in the prior fiscal year. non-gaap operating income was $1.72 billion in the current year compared to $902 million in the prior fiscal year. operating margin was 1.7%, compared to 2.0% in the prior fiscal year. non-gaap operating margin was 2.8% in the current year, compared to 2.9% in the prior fiscal year. diluted eps was $6.77, compared to $6.24 in the prior fiscal year, an increase of 8.5%. non-gaap diluted eps was $11.94, compared to $9.40 in the prior fiscal year, an increase of 27%. non-gaap eps for the fiscal year was $0.74 above the high end of our original guidance range provided in january 2022 and $0.29 above the high end of the most recent guidance range provided in september 2022, despite headwinds from interest expense and euro devaluation. cash used in operations was $50 million for the year, due to temporary supply chain constraints as well as inventory investments to support growth in the business that we expect to begin to normalize in fiscal 2023. returned $240 million to shareholders via repurchases of our common stock of $125 million and dividends of $115 million. the following statements are based on td synnex’s current expectations for the fiscal 2023 first quarter. non-gaap financial measures exclude the impact of acquisition, integration and restructuring costs, amortization of intangible assets, share-based compensation, purchase accounting adjustments, and the related tax effects thereon. these statements are forward-looking and actual results may differ materially. first quarter fiscal 2023 outlook revenue is expected to be in the range of $15.2 billion to $16.2 billion. net income is expected to be in the range of $139 million to $178 million and on a non-gaap basis, net income is expected to be in the range of $248 million to $287 million. diluted earnings per share is expected to be in the range of $1.46 to $1.86 and on a non-gaap basis, diluted earnings per share is expected to be in the range of $2.60 to $3.00, based on estimated outstanding diluted weighted average shares of 94.8 million. the outlook for the fiscal 2023 first quarter reflects the impact of year-over-year foreign exchange headwinds on revenue of approximately $500 million and interest rate movements of $33 million. share repurchase announcement the td synnex board of directors has approved a share repurchase program of up to $1 billion of its common stock over a period of up to three years, replacing the previous three-year program. stock repurchases may be made at management's discretion from time to time through open market or privately negotiated transactions, including pursuant to one or more rule 10b5-1 trading plans adopted in accordance with rule 10b5-1 of the securities exchange act of 1934. dividend td synnex announced today that its board of directors declared a quarterly cash dividend of $0.35 per common share, which represents a 17% increase as compared to the prior quarter. the dividend is payable on january 27, 2023 to stockholders of record as of the close of business on january 20, 2023. conference call and webcast td synnex will host a conference call today to discuss the fiscal 2022 fourth 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 clearwater, florida, and fremont, california, td synnex’s approximately 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, 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. (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 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, legal settlements and other litigation, net 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 typically consist of acquisition, integration, restructuring and divestiture related costs and are expensed as incurred. these expenses 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. 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’s acquisition activities have resulted in the recognition of finite-lived intangible assets which consist primarily of customer relationships and lists 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. the company expects the duration of these adjustments to benefit our non-gaap operating income through a portion 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. legal settlements and other litigation, net includes a benefit recorded in other income (expense), net during the fourth quarter of fiscal 2022 resulting from a decrease in our accrual for a legal matter in france. 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’s 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’s operational results and trends that more readily enable investors to analyze td synnex’s 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’s consolidated financial statements prepared in accordance with gaap. a reconciliation of td synnex’s 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, plans and positioning, as well as guidance related to the first quarter of fiscal 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; ongoing effects of the covid-19 pandemic; 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; any 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; changes in foreign currency exchange rates; increased inflation; 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, 2021 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. td synnex corporation consolidated balance sheets (currency and share amounts in thousands, except par value) (amounts may not add due to rounding) (unaudited) november 30, 2022 november 30, 2021 assets current assets: cash and cash equivalents $ 522,604 $ 993,973 accounts receivable, net 9,420,999 8,310,032 receivables from vendors, net 819,135 1,118,963 inventories 9,066,620 6,642,915 other current assets 671,507 668,261 total current assets 20,500,865 17,734,144 property and equipment, net 421,064 483,443 goodwill 3,803,850 3,917,276 intangible assets, net 4,422,877 4,913,124 other assets, net 585,342 618,393 total assets $ 29,733,998 $ 27,666,380 liabilities and equity current liabilities: borrowings, current $ 268,128 $ 181,256 accounts payable 13,988,980 12,034,946 other accrued liabilities 2,171,613 2,017,253 total current liabilities 16,428,721 14,233,455 long-term borrowings 3,835,665 3,955,176 other long-term liabilities 501,856 556,134 deferred tax liabilities 942,250 1,015,640 total liabilities 21,708,492 19,760,405 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, 98,696 and 98,204 shares issued as of november 30, 2022 and 2021, respectively 99 98 additional paid-in capital 7,374,100 7,271,337 treasury stock, 4,049 and 2,633 shares as of november 30, 2022 and 2021, respectively (337,217 ) (201,139 ) accumulated other comprehensive loss (719,710 ) (336,194 ) retained earnings 1,708,234 1,171,873 total stockholders' equity 8,025,506 7,905,975 total liabilities and equity $ 29,733,998 $ 27,666,380 td synnex corporation consolidated statements of operations (currency and share amounts in thousands, except per share amounts) (amounts may not add due to rounding) (unaudited) three months ended twelve months ended november 30, 2022 november 30, 2021 november 30, 2022 november 30, 2021 revenue $ 16,247,957 $ 15,611,266 $ 62,343,810 $ 31,614,169 cost of revenue (15,188,238 ) (14,668,096 ) (58,443,611 ) (29,724,635 ) gross profit 1,059,719 943,170 3,900,199 1,889,534 selling, general and administrative expenses (675,504 ) (655,719 ) (2,627,007 ) (1,154,166 ) acquisition, integration and restructuring costs (50,053 ) (102,086 ) (222,319 ) (112,150 ) operating income 334,162 185,365 1,050,873 623,218 interest expense and finance charges, net (80,148 ) (86,066 ) (222,578 ) (157,835 ) other income (expense), net 11,210 (1,608 ) (1,165 ) 1,102 income before income taxes 265,224 97,691 827,130 466,485 (provision) benefit for income taxes (43,993 ) 21,749 (175,823 ) (71,416 ) net income $ 221,231 $ 119,440 $ 651,307 $ 395,069 earnings per common share: basic $ 2.31 $ 1.24 $ 6.79 $ 6.28 diluted $ 2.31 $ 1.24 $ 6.77 $ 6.24 weighted-average common shares outstanding: basic 94,839 95,464 95,225 62,239 diluted 95,102 95,873 95,509 62,698 td synnex corporation regional financial highlights for the fiscal 2022 fourth quarter (currency in millions) (amounts may not add due to rounding) q4 fy22 q4 fy21 net change from q4 fy21 americas revenue $ 10,039.1 $ 9,311.2 7.8 % operating income $ 222.3 $ 124.9 78.0 % non-gaap operating income (1) $ 323.7 $ 270.3 19.8 % operating margin 2.21 % 1.34 % 87 bps non-gaap operating margin(1) 3.22 % 2.90 % 32 bps europe revenue $ 5,375.0 $ 5,512.8 (2.5) % operating income $ 77.1 $ 45.2 70.7 % non-gaap operating income (1) $ 134.6 $ 117.2 14.8 % operating margin 1.44 % 0.82 % 62 bps non-gaap operating margin(1) 2.50 % 2.13 % 37 bps asia-pacific and japan revenue $ 833.8 $ 787.3 5.9 % operating income $ 34.7 $ 15.3 126.7 % non-gaap operating income (1) $ 37.3 $ 20.4 82.5 % operating margin 4.17 % 1.95 % 222 bps non-gaap operating margin(1) 4.47 % 2.59 % 188 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 due to rounding) three months ended november 30, 2022 november 30, 2021 revenue in constant currency consolidated revenue $ 16,247,957 $ 15,611,266 foreign currency translation 1,006,657 — revenue in constant currency $ 17,254,614 $ 15,611,266 americas revenue $ 10,039,117 $ 9,311,165 foreign currency translation 92,310 — revenue in constant currency $ 10,131,427 $ 9,311,165 europe revenue $ 5,375,015 $ 5,512,828 foreign currency translation 830,795 — revenue in constant currency $ 6,205,810 $ 5,512,828 asia-pacific and japan revenue $ 833,825 $ 787,273 foreign currency translation 83,552 — revenue in constant currency $ 917,377 $ 787,273 three months ended twelve months ended november 30, 2022 november 30, 2021 november 30, 2022 november 30, 2021 gross profit and gross margin revenue $ 16,247,957 $ 15,611,266 $ 62,343,810 $ 31,614,169 gross profit $ 1,059,719 $ 943,170 $ 3,900,199 $ 1,889,534 purchase accounting adjustments 17,720 23,476 96,128 23,476 non-gaap gross profit $ 1,077,439 $ 966,646 $ 3,996,327 $ 1,913,010 gaap gross margin 6.52 % 6.04 % 6.26 % 5.98 % non-gaap gross margin 6.63 % 6.19 % 6.41 % 6.05 % td synnex corporation reconciliation of gaap to non-gaap financial measures (currency in thousands) (amounts may not add due to rounding) three months ended twelve months ended november 30, 2022 november 30, 2021 november 30, 2022 november 30, 2021 selling, general and administrative expenses gaap selling, general and administrative expenses $ 725,557 $ 757,805 $ 2,849,326 $ 1,266,316 acquisition, integration and restructuring costs 50,053 102,082 222,319 112,150 amortization of intangibles 75,080 77,204 299,162 105,332 share-based compensation 18,563 14,932 38,994 33,078 purchase accounting adjustments — 4,876 16,564 4,876 adjusted selling, general and administrative expenses $ 581,861 $ 558,711 $ 2,272,287 $ 1,010,880 three months ended twelve months ended november 30, 2022 november 30, 2021 november 30, 2022 november 30, 2021 operating income and operating margin - consolidated revenue $ 16,247,957 $ 15,611,266 $ 62,343,810 $ 31,614,169 gaap operating income $ 334,162 $ 185,365 $ 1,050,873 $ 623,218 acquisition, integration and restructuring costs 50,053 102,082 222,319 112,150 amortization of intangibles 75,080 77,204 299,162 105,332 share-based compensation 18,563 14,932 38,994 33,078 purchase accounting adjustments 17,720 28,353 112,691 28,353 non-gaap operating income $ 495,578 $ 407,936 $ 1,724,039 $ 902,131 gaap operating margin 2.06 % 1.19 % 1.69 % 1.97 % non-gaap operating margin 3.05 % 2.61 % 2.77 % 2.85 % three months ended twelve months ended november 30, 2022 november 30, 2021 november 30, 2022 november 30, 2021 operating income and operating margin - americas revenue $ 10,039,117 $ 9,311,165 $ 38,791,102 $ 23,317,274 gaap operating income $ 222,290 $ 124,864 $ 734,103 $ 497,964 acquisition, integration and restructuring costs 34,091 70,113 137,055 80,181 amortization of intangibles 44,752 44,306 175,371 72,434 share-based compensation 13,591 14,932 29,717 33,078 purchase accounting adjustments 8,985 16,095 65,117 16,095 non-gaap operating income $ 323,709 $ 270,310 $ 1,141,363 $ 699,752 gaap operating margin 2.21 % 1.34 % 1.89 % 2.14 % non-gaap operating margin 3.22 % 2.90 % 2.94 % 3.00 % td synnex corporation reconciliation of gaap to non-gaap financial measures (currency in thousands) (amounts may not add due to rounding) three months ended twelve months ended november 30, 2022 november 30, 2021 november 30, 2022 november 30, 2021 operating income and operating margin - europe revenue $ 5,375,015 $ 5,512,828 $ 20,289,211 $ 6,201,302 gaap operating income $ 77,132 $ 45,180 $ 227,249 $ 79,153 acquisition, integration and restructuring costs 14,522 27,515 76,634 27,515 amortization of intangibles 29,677 32,260 121,220 32,260 share-based compensation 4,540 — 7,906 — purchase accounting adjustments 8,735 12,258 47,574 12,258 non-gaap operating income $ 134,606 $ 117,213 $ 480,583 $ 151,186 gaap operating margin 1.44 % 0.82 % 1.12 % 1.28 % non-gaap operating margin 2.50 % 2.13 % 2.37 % 2.44 % three months ended twelve months ended november 30, 2022 november 30, 2021 november 30, 2022 november 30, 2021 operating income and operating margin - asia-pacific and japan revenue $ 833,825 $ 787,273 $ 3,263,497 $ 2,095,593 gaap operating income $ 34,740 $ 15,321 $ 89,521 $ 46,100 acquisition, integration and restructuring costs 1,440 4,454 8,630 4,454 amortization of intangibles 651 638 2,571 638 share-based compensation 432 — 1,371 — non-gaap operating income $ 37,263 $ 20,413 $ 102,093 $ 51,192 gaap operating margin 4.17 % 1.95 % 2.74 % 2.20 % non-gaap operating margin 4.47 % 2.59 % 3.13 % 2.44 % td synnex corporation reconciliation of gaap to non-gaap financial measures (currency in thousands, except per share amounts) (amounts may not add due to rounding) three months ended twelve months ended november 30, 2022 november 30, 2021 november 30, 2022 november 30, 2021 adjusted ebitda net income $ 221,231 $ 119,440 $ 651,307 $ 395,069 interest expense and finance charges, net 80,148 86,066 222,578 157,835 provision (benefit) for income taxes 43,993 (21,749 ) 175,823 71,416 depreciation(1) 31,643 27,432 164,203 44,232 amortization of intangibles 75,080 77,204 299,162 105,332 ebitda $ 452,095 $ 288,393 $ 1,513,073 $ 773,884 other (income) expense, net (11,210 ) 1,608 1,165 (1,102 ) acquisition, integration and restructuring costs 42,963 102,082 157,965 112,150 share-based compensation 18,563 14,932 38,994 33,078 purchase accounting adjustments 17,720 28,353 112,691 28,353 adjusted ebitda $ 520,131 $ 435,368 $ 1,823,888 $ 946,363 (1) includes depreciation recorded in acquisition, integration, and restructuring costs. three months ended twelve months ended november 30, 2022 november 30, 2021 november 30, 2022 november 30, 2021 net income and diluted eps net income $ 221,231 $ 119,440 $ 651,307 $ 395,069 acquisition, integration and restructuring costs 52,317 146,001 231,008 159,194 amortization of intangibles 75,080 77,204 299,162 105,332 share-based compensation 18,563 14,932 38,994 33,078 purchase accounting adjustments 17,720 28,353 112,691 28,353 legal settlements and other litigation, net (10,792 ) — (10,792 ) — income taxes related to the above (44,302 ) (65,184 ) (166,129 ) (80,375 ) income tax capital loss carryback benefit — (44,968 ) (8,299 ) (44,968 ) non-gaap net income $ 329,817 $ 275,778 $ 1,147,942 $ 595,683 diluted eps(1) $ 2.31 $ 1.24 $ 6.77 $ 6.24 acquisition, integration and restructuring costs 0.55 1.51 2.40 2.51 amortization of intangibles 0.78 0.80 3.11 1.66 share-based compensation 0.19 0.15 0.41 0.52 purchase accounting adjustments 0.18 0.29 1.17 0.45 legal settlements and other litigation, net (0.11 ) — (0.11 ) — income taxes related to the above (0.46 ) (0.67 ) (1.73 ) (1.27 ) income tax capital loss carryback benefit — (0.47 ) (0.09 ) (0.71 ) non-gaap diluted eps(1) $ 3.44 $ 2.86 $ 11.94 $ 9.40 (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 0.8% and 0.7% of net income for the three and twelve months ended november 30, 2022, respectively, and approximately 0.7% and 1% of net income for the three and twelve months ended november 30, 2021, respectively. td synnex corporation reconciliation of gaap to non-gaap financial measures (amounts may not add due to rounding) (continued) three months ended twelve months ended (currency in thousands) november 30, 2022 november 30, 2021 november 30, 2022 november 30, 2021 free cash flow net cash provided by (used in) operating activities $ 302,189 $ 560,993 $ (49,604 ) $ 809,787 purchases of property and equipment (38,527 ) (40,781 ) (117,049 ) (54,892 ) free cash flow $ 263,662 $ 520,211 $ (166,653 ) $ 754,895 forecast three months ending february 28, 2023 (currency in millions, except per share amounts) low high net income $ 139 $ 178 acquisition, integration and restructuring costs 50 50 amortization of intangibles 75 75 share-based compensation 13 13 purchase accounting adjustments 6 6 income taxes related to the above (35 ) (35 ) non-gaap net income $ 248 $ 287 diluted eps(1) $ 1.46 $ 1.86 acquisition, integration and restructuring costs 0.52 0.52 amortization of intangibles 0.79 0.79 share-based compensation 0.14 0.14 purchase accounting adjustments 0.06 0.06 income taxes related to the above (0.37 ) (0.37 ) non-gaap diluted eps $ 2.60 $ 3.00 (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 february 28, 2023. td synnex corporation calculation of financial metrics return on invested capital ("roic") (currency in thousands) (amounts may not add or compute due to rounding) november 30, 2022 november 30, 2021 roic operating income (trailing fiscal four quarters) $ 1,050,873 $ 623,218 income taxes on operating income(1) (223,384 ) (95,415 ) operating income after taxes $ 827,489 $ 527,803 total invested capital comprising equity and borrowings, less cash (last five quarters average) $ 11,668,007 $ 4,015,586 roic 7.1 % 13.1 % adjusted roic non-gaap operating income (trailing fiscal four quarters) $ 1,724,039 $ 902,131 income taxes on non-gaap operating income(1) (403,050 ) (223,999 ) non-gaap operating income after taxes $ 1,320,989 $ 678,132 total invested capital comprising equity and borrowings, less cash (last five quarters average) $ 11,668,007 $ 4,015,586 tax effected impact of cumulative non-gaap adjustments (last five quarters average) 620,266 212,535 total non-gaap invested capital (last five quarters average) $ 12,288,272 $ 4,228,121 adjusted roic 10.7 % 16.0 % (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 november 30, 2022 november 30, 2021 days sales outstanding revenue (a) $ 16,247,957 $ 15,611,266 accounts receivable, net (b) 9,420,999 8,310,032 days sales outstanding (c) = ((b)/(a))*the number of days during the period 53 48 days inventory outstanding cost of revenue (d) $ 15,188,238 $ 14,668,096 inventories (e) 9,066,620 6,642,915 days inventory outstanding (f) = ((e)/(d))*the number of days during the period 54 41 days payable outstanding cost of revenue (g) $ 15,188,238 $ 14,668,096 accounts payable (h) 13,988,980 12,034,946 days payable outstanding (i) = ((h)/(g))*the number of days during the period 84 75 cash conversion cycle (j) = (c)+(f)-(i) 23 14
