• Concentrix Reports Fiscal 2020 Fourth Quarter and Full Year Results

    ソース: Nasdaq GlobeNewswire / 11 1 2021 16:19:25   America/New_York

    FREMONT, Calif., Jan. 11, 2021 (GLOBE NEWSWIRE) -- Concentrix Corporation (NASDAQ: CNXC), a leading global provider of customer experience (CX) solutions and technology, today announced financial results for the fiscal fourth quarter and fiscal year ended November 30, 2020.

     Three Months Ended  
     November 30, 2020 November 30, 2019 Change
    Revenue ($M) $1,300.9  $1,212.8  7.3%
    Operating income ($M) $120.2  $101.5  18.4%
    Non-GAAP operating income ($M) (1)$175.4  $165.0  6.3%
    Operating margin9.2% 8.4% 80 bps
    Non-GAAP operating margin (1)13.5% 13.6% -10 bps
    Net income ($M)$64.6  $31.9  102.5%
    Non-GAAP net income ($M) (1)$106.8  $80.0  33.5%
    Adjusted EBITDA ($M) (1)$211.2  $197.7  6.8%
    Adjusted EBITDA margin (1)16.2% 16.3% -10 bps
    Basic and diluted earnings per share (2)$1.25  $0.62  101.6%
    Non-GAAP basic and diluted earnings per share (2)$2.07  $1.55  33.5%

    (1) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non- GAAP measure to its most directly comparable GAAP measure.
    (2) Weighted average number of shares used for both basic and diluted EPS is based on the number of common shares issued in connection with the spin-off.

    Fourth Quarter Fiscal 2020 Highlights:

    • Revenue was $1,300.9 million, up 7.3% from the prior fiscal year fourth quarter and 6.3% on a constant currency basis, compared with $1,212.8 million in the prior fiscal year fourth quarter.
    • Operating income was $120.2 million, or 9.2% of revenue, compared with $101.5 million, or 8.4% of revenue in the prior fiscal year fourth quarter.
    • Non-GAAP operating income was $175.4 million, or 13.5% of revenue, compared with $165.0 million, or 13.6% of revenue, in the prior fiscal year fourth quarter.
    • Adjusted EBITDA was $211.2 million, or 16.2% of revenue, compared with $197.7 million, or 16.3% of revenue, in the prior fiscal year fourth quarter.

    "We are pleased with our execution in the fourth quarter with revenue growth and profitability exceeding expectations,” said Chris Caldwell, Concentrix President and CEO. “During the fourth quarter we were able to capitalize on our robust signings in the third quarter, and we believe we also gained share on in-period volumes. Entering 2021 as an independent industry leader, we see opportunities for additional innovation and our ability to enhance value creation for shareholders.”

    Fiscal Year 2020 Summary

     Fiscal Year Ended  
     November 30, 2020 November 30, 2019  Change
    Revenue ($M) $4,719.5  $4,707.9  0.2%
    Operating income ($M) $308.8  $294.3  4.9%
    Non-GAAP operating income ($M) (1)$509.4  $542.0  (6.0)%
    Operating margin6.5% 6.3% 20 bps
    Non-GAAP operating margin (1)10.8% 11.5% -70 bps
    Net income ($M)$164.8  $117.2  40.6%
    Non-GAAP net income ($M) (1)$316.5  $304.7  3.9%
    Adjusted EBITDA ($M) (1)$638.5  $676.8  (5.7)%
    Adjusted EBITDA margin (1)13.5% 14.4% -90 bps
    Basic and diluted earnings per share (2)$3.19  $2.27  40.5%
    Non-GAAP basic and diluted earnings per share (2)$6.13  $5.90  3.9%

    (1) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non- GAAP measure to its most directly comparable GAAP measure.
    (2) Weighted average number of shares used for both basic and diluted EPS is based on the number of common shares issued in connection with the spin-off.

    Fiscal Year 2020 Highlights:

    • Revenue was $4,719.5 million, up 0.2% from the prior fiscal year and 0.7% on a constant currency basis, compared with $4,707.9 million in the prior fiscal year.
    • Operating income was $308.8 million, or 6.5% of revenue, compared with $294.3 million, or 6.3% of revenue, in the prior fiscal year.
    • Non-GAAP operating income was $509.4 million, or 10.8% of revenue, compared with $542.0 million, or 11.5% of revenue, in the prior fiscal year.
    • Adjusted EBITDA was $638.5 million, or 13.5% of revenue, compared with $676.8 million, or 14.4% of revenue, in the prior fiscal year.
    • On a net basis, COVID expenses were approximately $86.0 million for fiscal year 2020.

    First Quarter Fiscal 2021 Outlook:
    The following statements are based on Concentrix’ current expectations for the fiscal 2021 first quarter. Non-GAAP financial measures exclude the impact of acquisition-related and integration expenses, spin-off related expenses, the amortization of intangibles, depreciation, share based compensation and the related tax effects thereon. These statements are forward-looking and actual results may differ materially.

    • Revenue is expected to be in the range of $1.260 billion to $1.310 billion as reported.
    • Operating income is expected to be in the range of $107 million to $121 million and non-GAAP operating income is expected to be in the range of $148 million to $162 million.
    • The effective tax rate is expected to approximate 29%.

    Conference Call and Webcast
    Concentrix will host a conference call for investors to review its fiscal 2020 fourth quarter results tomorrow morning Tuesday, January 12, 2021 at 9:00 a.m. (ET)/6:00 a.m. (PT)

    The live conference call will be webcast in listen-only mode in the Investor Relations section of the Concentrix website under “Events and Presentations” at https://ir.concentrix.com/events-and-presentations. A replay will also be available on the website following the conference call.

    About Concentrix
    Concentrix Corporation (Nasdaq: CNXC), is a leading technology-enabled global business services company specializing in customer engagement and improving business performance for some of the world’s best brands including over 95 Global Fortune 500 clients and over 90 global disruptor clients. Every day, from more than 40 countries and across 6 continents, our staff delivers next generation customer experience and helps companies better connect with their customers. We create better business outcomes and help differentiate our clients through technology, design, data, process, and people. Concentrix provides services to clients in our key industry verticals: technology & consumer electronics; retail, travel & ecommerce; banking, financial services & insurance; healthcare; communications & media; automotive; and energy & public sector. We are Different by Design. Visit concentrix.com to learn more.

    Use of Non-GAAP Information
    In addition to disclosing financial results that are determined in accordance with GAAP, we also disclose certain non-GAAP financial information, including:

    • Constant currency revenue growth, which is revenue growth adjusted 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 business performance. Constant currency revenue growth is calculated by translating the revenue of each fiscal year in the billing currency using their comparable prior year’s currency conversion rate in comparison to prior year’s revenue. Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates or adjusting for currency will be higher or lower than growth reported at actual exchange rates.
    • Non-GAAP operating income, which is operating income, adjusted to exclude acquisition-related and integration expenses, including related restructuring costs, spin-off related expenses, amortization of intangible assets and share-based compensation.
    • Non-GAAP operating margin, which is non-GAAP operating income, as defined above, divided by revenue.
    • Adjusted earnings before interest, taxes, depreciation, and amortization, or adjusted EBITDA, which is non-GAAP operating income, as defined above, plus depreciation.
    • Adjusted EBITDA margin, which is adjusted EBITDA, as defined above, divided by revenue.
    • Free cash flow, which is cash flows from operating activities less capital expenditures. We believe that free cash flow is a meaningful measure of cash flows since capital expenditures are a necessary component of ongoing operations. However, free cash flow has limitations because it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not incorporate payments for business acquisitions.

    We believe that providing this additional information is useful to the reader to better assess and understand our base operating performance, especially when comparing results with previous periods and for planning and forecasting in future periods, primarily because management typically monitors the business adjusted for these items in addition to GAAP results. Management also uses these non-GAAP measures to establish operational goals and, in some cases, for measuring performance for compensation purposes. These non-GAAP financial measures exclude amortization of intangible assets. Although intangible assets contribute to our revenue generation, the amortization of intangible assets does not directly relate to the services performed for our clients. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of our acquisition activity. Accordingly, we believe excluding the amortization of intangible assets, along with the other non-GAAP adjustments which neither relate to the ordinary course of our business nor reflect our underlying business performance, enhances our and our investors’ ability to compare our past financial performance with its current performance and to analyze underlying business performance and trends. These non-GAAP financial measures also exclude share-based compensation expense. Given the subjective assumptions and the variety of award types that companies can use when calculating share-based compensation expense, management believes this additional information allows investors to make additional comparisons between our operating results and those of our peers. 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 used as a complement to, and in conjunction with, data presented in accordance with GAAP.

    Safe Harbor Statement
    This news release includes 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. Forward-looking statements include, but are not limited to, statements regarding the Company’s expected future financial condition, results of operations, including revenue and operating income, effective tax rate, cash flows, leverage, liquidity, business strategy, competitive position, acquisition opportunities, capital allocation, growth opportunities, market forecasts and statements that include words such as believe, expect, may, will, provide, could and should and other similar expressions. These forward-looking statements are inherently uncertain and involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Risks and uncertainties include, among other things: risks related to general economic conditions, including uncertainty related to the COVID-19 pandemic and its impact on the global economy; the level of outsourced business services; the level of business activity of the Company’s clients and the market acceptance and performance of their products and services; consolidation of the Company’s competitors; competitive conditions in the Company’s industry; currency exchange rate fluctuations; variability in demand by the Company’s clients or the early termination of the Company’s client contracts; competition in the customer experience solutions industry; political and economic stability in the countries in which the Company operates; the outbreak of communicable disease or other public health crises; cyberattacks on the Company’s networks and information technology systems; the inability to protect personal and proprietary information; increases in the cost of labor; the operability of the Company’s communication services and information technology systems and networks; changes in law, regulations or regulatory guidance; investigative or legal actions; the loss of key personnel; natural disasters, adverse weather conditions, terrorist attacks, work stoppages or other business disruptions; and other factors contained in the Company’s Registration Statement on Form 10 filed with the Securities and Exchange Commission and subsequent SEC filings. The Company does not undertake a duty to update forward-looking statements, which speak only as of the date on which they are made.

    Copyright 2021 Concentrix Corporation. All rights reserved. Concentrix, the Concentrix logo, and all other Concentrix company, product and services names and slogans are trademarks or registered trademarks of Concentrix Corporation. Concentrix and the Concentrix logo Reg. U.S. Pat. & Tm. Off. Other names and marks are the property of their respective owners.


    CONCENTRIX
    (CUSTOMER EXPERIENCE SERVICES BUSINESS OF SYNNEX CORPORATION)

    COMBINED STATEMENTS OF OPERATIONS (unaudited)
    (currency and share amounts in thousands, except per share amounts)
    (Amounts may not add due to rounding)

     
     Three Months Ended   Fiscal Year Ended  
     November 30, 2020 November 30, 2019 % Change November 30, 2020 November 30, 2019 % Change
    Revenue           
    Technology and consumer electronics$410,542  $343,700  19% $1,422,817  $1,283,084  11%
    Communications and media239,268  273,108  (12)% 954,234  1,142,242  (16)%
    Retail, travel and ecommerce237,912  198,749  20% 796,324  763,265  4%
    Banking, financial services and insurance185,522  177,362  5% 712,469  676,246  5%
    Healthcare118,558  101,159  17% 392,686  369,187  6%
    Other109,056  118,758  (8)% 441,004  473,888  (7)%
    Total revenue1,300,858  1,212,836  7% 4,719,534  4,707,912  %
    Cost of revenue842,226  754,405  12% 3,058,009  2,959,464  3%
    Gross profit458,632  458,431  % 1,661,525  1,748,448  (5)%
    Selling, general and administrative expenses(338,425) (356,977) (5)% (1,352,764) (1,454,116) (7)%
    Operating income120,207  101,454  18% 308,761  294,332  5%
    Interest expense (primarily related to borrowings from Parent) and finance charges, net(8,798) (20,226) (57)% (48,313) (92,196) (48)%
    Other income (expense), net3,164  (401) (889)% 7,447  2,280  227%
    Income before income taxes114,573  80,827  42% 267,895  204,416  31%
    Provision for income taxes(49,946) (48,957) 2% (103,084) (87,252) 18%
    Net income$64,627  $31,870  103% $164,811  $117,164  41%
    Earnings per common share:           
    Basic$1.25  $0.62    $3.19  $2.27   
    Diluted$1.25  $0.62    $3.19  $2.27   
    Weighted-average common shares outstanding           
    Basic51,602  51,602    51,602  51,602   
    Diluted51,602  51,602    51,602  51,602   
     

    CONCENTRIX
    (CUSTOMER EXPERIENCE SERVICES BUSINESS OF SYNNEX CORPORATION)

    COMBINED BALANCE SHEETS (unaudited)
    (currency in thousands)
    (Amounts may not add due to rounding)

     
     November 30, 2020 November 30, 2019
    ASSETS   
    Current assets:   
    Cash and cash equivalents$152,656  $79,656 
    Accounts receivable, net1,079,065  931,082 
    Receivable from SYNNEX Corporation (“Parent”)2,416  17,495 
    Loan receivable from Parent  67,676 
    Other current assets189,239  203,696 
    Total current assets1,423,376  1,299,605 
    Property and equipment, net451,649  411,465 
    Goodwill1,836,050  1,829,328 
    Intangible assets, net798,959  934,123 
    Deferred tax assets47,423  64,879 
    Other assets620,099  114,355 
    Total assets$5,177,556  $4,653,755 
        
    LIABILITIES AND EQUITY   
    Current liabilities:   
    Accounts payable$140,575  $106,147 
    Current portion of long-term debt33,750   
    Payable to Parent22,825  85,898 
    Loans payable to Parent  1,981,385 
    Accrued compensation and benefits419,715  319,065 
    Other accrued liabilities371,072  189,605 
    Income taxes payable20,725  16,209 
    Total current liabilities1,008,662  2,698,308 
    Long-term debt1,111,362   
    Other long-term liabilities601,887  297,034 
    Deferred tax liabilities153,560  188,572 
    Total liabilities2,875,471  3,183,914 
    Equity:   
    Parent company investment2,305,899  1,519,923 
    Accumulated other comprehensive income (loss)(3,814) (50,082)
    Total Parent equity2,302,085  1,469,841 
    Total liabilities and equity$5,177,556  $4,653,755 
     

    CONCENTRIX
    (CUSTOMER EXPERIENCE SERVICES BUSINESS OF SYNNEX CORPORATION)

    RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited)
    (currency in thousands)
    (Amounts may not add due to rounding)

     
     Three Months Ended
     Fiscal Year Ended
     November 30, 2020 November 30, 2019
     November 30, 2020 November 30, 2019
    Revenue$1,300,858  $1,212,836  $4,719,534  $4,707,912 
    Revenue growth, as reported under U.S. GAAP7.3% 24.7% 0.2% 91.1%
    Foreign exchange impact(1.0)% 1.1% 0.5% 2.2%
    Constant currency revenue growth6.3% 25.8% 0.7% 93.3%


     Three Months Ended
     Fiscal Year Ended
     November 30, 2020 November 30, 2019
     November 30, 2020 November 30, 2019
    Operating income$120,207  $101,454  $308,761  $294,332 
    Acquisition-related and integration expenses6,552  18,042  27,982  70,473 
    Spin-off related expenses7,694    9,483   
    Amortization of intangibles37,093  41,425  147,283  166,606 
    Share-based compensation3,883  4,074  15,914  10,554 
    Non-GAAP operating income$175,429  $164,995  $509,423  $541,965 
     

    CONCENTRIX
    (CUSTOMER EXPERIENCE SERVICES BUSINESS OF SYNNEX CORPORATION)

    RECONCILIATION OF GAAP TO NON-GAAP MEASURES
    (unaudited)
    (currency in thousands)
    (Amounts may not add due to rounding)

     
     Three Months Ended Fiscal Year Ended
     November 30, 2020 November 30, 2019 November 30, 2020 November 30, 2019
    Net income$64,627  $31,870  $164,811  $117,164 
    Interest expense and finance charges, net8,798  20,226  48,313  92,196 
    Provision for income taxes49,946  48,957  103,084  87,252 
    Other (income) expense, net(3,164) 401  (7,447) (2,280)
    Acquisition-related and integration expenses6,552  18,042  27,982  70,473 
    Spin-off related expenses7,694    9,483   
    Amortization of intangibles37,093  41,425  147,283  166,606 
    Share-based compensation3,883  4,074  15,914  10,554 
    Depreciation (excluding accelerated depreciation included in acquisition-related and integration expenses above)35,795  32,697  129,126  134,823 
    Adjusted EBITDA$211,224  $197,692  $638,549  $676,788 


     Three Months Ended Fiscal Year Ended
     November 30, 2020 November 30, 2019 November 30, 2020 November 30, 2019
    Operating margin9.2% 8.4% 6.5% 6.3%
    Non-GAAP operating margin13.5% 13.6% 10.8% 11.5%
    Adjusted EBITDA margin16.2% 16.3% 13.5% 14.4%
                

    CONCENTRIX
    (CUSTOMER EXPERIENCE SERVICES BUSINESS OF SYNNEX CORPORATION)

    RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited)
    (currency in thousands)
    (Amounts may not add due to rounding)

       
     Three Months Ended
     Fiscal Year Ended
     November 30, 2020 November 30, 2019
     November 30, 2020 November 30, 2019
    Net income$64,627  $31,870  $164,811  $117,164 
    Acquisition-related and integration expenses6,552  18,042  27,982  70,473 
    Spin-off related expenses7,694    9,483   
    Amortization of intangibles37,093  41,425  147,283  166,606 
    Share-based compensation3,883  4,074  15,914  10,554 
    Income taxes related to the above (1)
    (13,037) (15,453) (49,010) (60,118)
    Non-GAAP net income$106,812  $79,958  $316,463  $304,679 
                   

    CONCENTRIX
    (CUSTOMER EXPERIENCE SERVICES BUSINESS OF SYNNEX CORPORATION)

    RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited)
    (currency in thousands, except per share amounts)
    (Amounts may not add due to rounding)

       
     Three Months Ended
     Fiscal Year Ended
     November 30, 2020 November 30, 2019
     November 30, 2020 November 30, 2019
    Basic and diluted earnings per common share (“EPS”) (2)$1.25  $0.62  $3.19  $2.27 
    Acquisition-related and integration expenses$0.13  $0.35  $0.54  $1.37 
    Spin-off related expenses$0.15  $  $0.18  $ 
    Amortization of intangibles$0.72  $0.80  $2.85  $3.23 
    Share-based compensation$0.08  $0.08  $0.31  $0.20 
    Income taxes related to the above (1)
    $(0.26) $(0.30) $(0.94) $(1.17)
    Non-GAAP basic and diluted EPS (2)$2.07  $1.55  $6.13  $5.90 


     Three Months Ended Fiscal Year Ended
     November 30, 2020 November 30, 2019 November 30, 2020 November 30, 2019
    Net cash provided by operating activities$ 119,037   $166,848  $ 507,614   $449,736 
    Purchases of property and equipment(65,083) (40,148) (171,332) (111,122)
    Free cash flow$ 53,954  $126,700  $ 336,282   $338,614 
                    

    CONCENTRIX
    (CUSTOMER EXPERIENCE SERVICES BUSINESS OF SYNNEX CORPORATION)

    RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited)
    (currency in thousands)
    (Amounts may not add due to rounding)

     
     Forecast
     Three Months Ended February 28, 2021
     Low High
    Operating income$107,000  $121,000 
    Amortization of intangibles34,000  34,000 
    Share-based compensation7,000  7,000 
    Non-GAAP operating income (3)$148,000  $162,000 
        

    (1) The tax effect of taxable and deductible non-GAAP adjustments was calculated using the tax-deductible portion of the expenses and applying the entity-specific, statutory tax rates applicable to each item during the respective fiscal years.

    (2) Weighted average number of shares used for both basic and diluted EPS is based on number of common shares issued and outstanding in connection with the spin-off of 51.6 million for all periods presented.

    (3) Adjustments related to acquisition-related and integration expenses and spin-off related expenses are not expected to be material for the three months ended February 28, 2021.


    Investor Contact:
    David Stein
    Investor Relations
    Concentrix Corporation
    david.stein@concentrix.com
    (513) 703-9306

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