TD SYNNEX Corporation

Good afternoon. My name is David, and I will be your conference operator today. I would like to welcome everyone to the SYNNEX first quarter fiscal 2020 earnings call. Today's call is being recorded, and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. We ask each participant to limit their question to one question and one follow-up. At this time, for opening remarks, I would like to pass the call over to Ms. Mary Lai, Head of Investor Relations, Miss, you may begin.

Thank you, David. Good afternoon, everyone. Welcome to the SYNNEX first quarter fiscal 2020 earnings call. Joining me today to review our financial results are Dennis Polk, President and CEO, Marshall Witt, CFO, and Chris Caldwell, President of Concentrix. Before we continue, we remind everyone that today's discussion contains forward-looking statements within the meaning of the federal securities law. which statements include any predictions, estimates, projections, or other statements about future events including as to COVID-19 impacts and responses to them and the expected separation transaction. Actual results may differ materially from those mentioned in these forward-looking statements as a result of the risk and uncertainties discussed in today's earnings release in the Form 8-K we filed today and in the risk factor section of our Form 10-K and other reports and filings with the SEC. We do not intend to update any forward-looking statements. Also during this call, we will reference certain non-GAAP financial information. Reconciliation of non-GAAP and GAAP reporting is included in our earnings press release in the related form 8K available under the investor relations section of our website. This conference call is the property of SYNNEX Corporation and may not be recorded or rebroadcasted without our permission. And now, I will turn the call over to our CEO, Dennis.

Thank you, Mary, and thank you for joining our call today. As we all know, the recent events surrounding the COVID-19 virus has been extraordinary to say the least. All of us have been significantly impacted as individuals, communities, and organizations by this pandemic. I will provide additional commentary on the current state of our business in a few minutes. But first, I want to begin by sincerely thanking our teams throughout the globe who have worked tirelessly around the clock to ensure the safety and well-being of our associates. I also want to extend my sincere appreciation to the team for their efforts to run our business during this time. Most all have had to deal with significant uncertainty in personal lives and deal with rapid change in the business world, yet the cynics and concentric spirit has never shined brighter. And our associates have performed solidly under the circumstances for our customers, clients, and vendors. Given the current environment, we question the value of holding a live call today. But we believe in challenging times, it is best to have transparency and the most accurate information possible delivered to all stakeholders. Since we are in a suddenly different environment, we have altered our traditional format for our call. For today, I will briefly comment on our Q1 results and then discuss the current state of our TS business, and then turn over the call to Chris for our concentric current environment update. Marshall will follow with a few financial topics, and then I will close and transition us to Q&A. Our first quarter was very good. We delivered solid EPS and margin results. While the headline revenue growth appears muted, the underlying fundamentals were strong. Our concentric business grew to expectations and it would have been better likely if not for the initial phases of COVID-19 in Asia that impacted some of our operations starting in late January. Our TS distribution business was very solid with above market growth overall. Similar to Concentrix, there was some weakness at the end of the quarter likely due to the disruption in the supply chain related to the initial phases of the virus. Weighing on TS growth was our high cloud manufacturing business as we had a year-over-year top line decline. As we have indicated over the years, this can be a lumpy business. As you may recall, it was much higher than expected in Q4, thus likely just an offset in Q1. Starting off Q2, we had a very good order backlog and inventory in this part of our TS business. Moving to current quarter thoughts. Our top priority is the safety and health of our associates. We have implemented the necessary protocols to minimize business disruptions, and we have initiated business continuity plans. Like many others, we have been rapidly moving team members to work-at-home environments, instituted safety policies for those that can't work from home, and managed in an environment of rapidly changing government requirements across the globe. Given the uncertainty surrounding the situation in the U.S. and around the world, we are not in a position to provide Q2 guidance. As indicated earlier, though, I will provide a few thoughts on the TS business and then turn it over to Chris for a concentric update. In our TS business, at this point, we are seeing essentially normal to slightly positive March run rate demand. This is clearly due to the pandemic and the urgency for products to support work at home, learn at home, delivery to home, and all the health and safety personnel assisting in the crisis. In terms of our high business, our manufacturing operations are active. helping to support our main customers with their needs, which appear to have increased with the outbreak as well. Given the environment is so fluid, we don't have the visibility to know if these rates will continue or if a drop will occur once the initial burst of demand is over and the economy is still working through the effects of this shock. Either way, we will be supporting our marketplace for what it needs and be ready for a return This time has definitely shown how critical our place is in the IT supply chain and how important IT and our business model will be going forward. I will now turn over the call to Chris.