SEC Filing Summary: SYNNEX CORPORATION (Form 8-K)
Business Context and Reporting Period
This Current Report on Form 8-K was filed on December 12, 2012, by SYNNEX Corporation (the "Company"). The report details a material definitive agreement entered into on the same date involving the Company's wholly-owned subsidiary, SYNNEX Infotec Corporation ("Infotec Japan").
Key Financial Metrics and Debt Structure
The filing focuses on the refinancing of Infotec Japan's credit facility. The new Infotec Credit Agreement establishes the following financial terms:
- Total Maximum Commitment: JP¥14.0 billion
- Long-Term Loan: JP¥6.0 billion (repayable at any time prior to maturity without penalty)
- Revolving Credit Facility: JP¥8.0 billion
- Interest Rate: Tokyo Interbank Offered Rate (TIBOR) plus 1.90% per annum
- Maturity Date: December 2015
- Collateral: Secured by Infotec Japan's accounts receivable and inventories
- Guarantee: Obligations are guaranteed by SYNNEX Corporation
The filing does not provide specific revenue, profit, cash flow, or margin figures for the Company or the subsidiary.
Material Changes and Covenants
The refinancing introduces specific financial covenants and operational restrictions for Infotec Japan:
- Fixed Charge Coverage Ratio: Must maintain a ratio of at least 1.10 to 1.0.
- Minimum Net Worth: Must maintain a minimum net worth as defined in the agreement.
- Restrictive Covenants: Limitations on creating liens, disposing of assets, paying dividends, merging, or changing the nature of the business.
Outlook, Risks, and Management Commentary
Management commentary is limited to the description of the refinancing transaction. The primary risk identified is the potential breach of the new financial covenants (Fixed Charge Coverage Ratio and Minimum Net Worth), which could restrict Infotec Japan's operational flexibility. The agreement is secured by specific assets, creating a direct financial obligation for the registrant through the corporate guarantee.
Key Facts for Investor Verification
- Verify the impact of the new 1.90% margin over TIBOR on Infotec Japan's interest expense compared to the previous facility.
- Confirm Infotec Japan's current Fixed Charge Coverage Ratio to ensure compliance with the new 1.10 to 1.0 covenant.
- Review the specific "minimum net worth" threshold defined in the attached Facility Agreement (Exhibit 10.1).
- Assess the liquidity implications of the JP¥8.0 billion revolving facility availability versus the JP¥6.0 billion term loan.