Business context and reporting period
TD SYNNEX’s Form 10-K covers the fiscal year ended November 30, 2022—not a standalone fourth-quarter report. The company is a global IT distributor and solutions aggregator, operating in the Americas, Europe, and Asia-Pacific and Japan (APJ). Results include Tech Data, acquired September 1, 2021; fiscal 2021 therefore includes only about three months of Tech Data and is not directly comparable. The Concentrix business was spun off effective December 1, 2020.
Financial performance and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $62.34 billion | $31.61 billion |
| Gross profit / margin | $3.90 billion / 6.26% | $1.89 billion / 5.98% |
| Operating income / margin | $1.05 billion / 1.69% | $623.2 million / 1.97% |
| Net income | $651.3 million | $395.1 million |
| Diluted EPS | $6.77 | $6.24 |
| Operating cash flow | $(49.6) million | $809.8 million |
Revenue grew 97.2%, primarily reflecting approximately $28 billion of sales added by the Tech Data merger and broad demand. Gross margin improved on product and customer mix, but operating margin declined as merger-related personnel, acquired-intangible amortization, and integration costs increased. Adjusted EBITDA, a non-GAAP measure, was $1.82 billion versus $946.4 million; adjusted diluted EPS was $11.94 versus $9.40.
Operating cash outflow reflected higher receivables and inventory associated with business growth, partly offset by higher payables. Capital expenditures were $117.0 million. Cash and equivalents were $522.6 million at year-end, down from $994.0 million. Total borrowings were approximately $4.1 billion, including $2.5 billion of senior notes and $1.4 billion of term loans. The $3.5 billion revolving credit facility and $1.5 billion U.S. receivables facility had no year-end borrowings; the company reported covenant compliance. Management said cash, operating cash flow, and available credit were sufficient for at least the next 12 months.
Working-capital measures weakened: the cash conversion cycle rose to 23 days from 14, with days inventory outstanding at 54 versus 41 and days sales outstanding at 53 versus 48. Receivables sold under supply-chain financing programs increased to $1.4 billion from $759.9 million; related discount fees rose to $26.2 million from $4.7 million.
Material changes, outlook, risks, and unusual items
- Merger-related acquisition, integration, and restructuring costs were $222.3 million. FY2022 also included $64.4 million of accelerated depreciation and amortization tied to IT-system consolidation.
- Foreign-exchange movements, including depreciation of the euro and yen against the U.S. dollar, weighed on Europe and APJ results. International operations generated about 45% of revenue, up from 37% in FY2021.
- The filing provides no specific revenue or earnings guidance. Management’s stated strategy emphasizes higher-growth technologies, cloud and security, recurring services, digital transformation, and operational efficiency.
- In January 2023, the board authorized a new three-year $1.0 billion share-repurchase program, replacing the prior $400 million program; the quarterly dividend was raised to $0.35 per share from $0.30.
- A French competition fine was reduced on appeal to €24.9 million (about $25.7 million) and paid; the company recorded a $10.8 million accrual reduction. A related civil lawsuit remains under evaluation, with potential loss not estimable.
- Management reported that a July 2022 cyber intrusion had no material impact after investigation, while noting further attacks or new information could change that assessment. Goodwill testing found no impairment, but Europe and APJ fair-value cushions were relatively narrow at 6% and 9%, respectively; the auditor identified Europe goodwill valuation as a critical audit matter.
- Key exposures include low distribution margins, intense competition, supplier and customer concentration, inventory obsolescence and supply constraints, customer credit risk, rising interest rates, foreign exchange, and integration execution. Apple and HP each represented at least 10% of FY2022 revenue; one customer represented 10%. Apollo affiliates held about 45% of shares at November 30, 2022.
Important facts for investors to verify
- Separate merger-driven growth from underlying organic growth; FY2021 is a limited post-acquisition comparison.
- Track inventory, receivables, the cash conversion cycle, and the continuing use and cost of receivables financing.
- Assess debt-service sensitivity to interest rates and the company’s ability to sustain liquidity, dividends, and buybacks amid working-capital needs.
- Monitor merger integration costs and savings, Europe/APJ goodwill headroom, and the outcome of the French-related civil litigation.
- Review customer and vendor concentration, currency exposure, and cybersecurity disclosures as conditions evolve.