Good afternoon. My name is Iris and I will be your conference operator today for the SYNNEX 2017 First Quarter Earnings Call. All lines have been placed on listen-only mode to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]. Today’s conference is being recorded. If you have any objections, you may disconnect. Thank you. At this time I would like to pass the call over to Mike Vaishnav, Senior Vice President Corporate Finance and Treasurer at SYNNEX Corporation.

Thank you, Iris. Good afternoon and welcome to the SYNNEX Corporation’s earnings call for the fiscal 2017 first quarter ended February 28, 2017. Joining us on today’s call are Kevin Murai, President and CEO; Dennis Polk, COO; Marshall Witt, CFO; and Chris Caldwell, EVP and President of Concentrix Corporation. Please note that some of the information you will hear today consist of forward-looking statements within the meaning of the federal securities laws. Such statements may relate to, without limitation, market, demand, sales, growth, non-GAAP net income and EPS, margin, profit, revenue, cost, expenses, shares, tax rate, seasonality, strategy, over performance and cash conversion cycle. Actual results or trends could differ materially from our expectations. For more information, please refer to the risk factors discussed in our Form 10-K for the fiscal 2016 and discussion of forward-looking statements in our earnings release and Form 8-K filed with the SEC today. SYNNEX assumes no obligation to update any forward-looking statements, which speaks as of their respective date. Also during this call, we will reference certain non-GAAP information. Reconciliation of the non-GAAP and GAAP reporting is included in today’s earnings release and related Form 8-K available on our website at www.synnex.com. This conference call is the property of SYNNEX Corporation and may not be recorded or rebroadcast without our specific written permission. Now, I would like to turn over call to Marshall for an update on our financial performance. Marshall?

Thanks, Mike. First I will review our results of operations and key financial metrics, and then conclude with guidance for the second quarter of fiscal 2017 before turning the call over to Kevin. Our Q1 net income and EPS, both GAAP and non-GAAP, exceeded our expectation while revenue was in line with our expectation. On a consolidated basis, total revenue was 3.5 billion, up 12.6%, compared to 3.1 billion in the same quarter of the prior year. Adjusting for FX of 19 million, revenue in constant currency was 12% higher compared to the prior year quarter. Technology Solutions segment revenues were $3 billion, representing an increase of 9.4% compared to the prior year quarter. The TS revenue increase was mainly due to strong demand for our cloud base solution. On a constant currency basis, Technology Solutions segment revenues increased approximately 8.6% year-over-year. Concentrix revenues were $478.2 million, up 38.7% from $344.7 million in the prior year quarter. The Minacs acquisition contributed to the majority of the increase in revenue. Adjusting for the acquisition and the negative impact of FX, revenue in constant currency were comparable to the prior year quarter. Now turning to gross profit, our gross profit on Q1 revenues was $341.8 million, or 9.7% of revenues compared to $284.2 million, or 9.1% of revenues in Q1 of 2016. The increase in gross profit dollars was due to higher sales in our Concentrix segments and higher value added services. Q1 total adjusted, selling, general and administrative expenses was $223.3 million or 6.34% of our revenue, compared to 6.28% of revenue or $196.2 million in the first quarter of fiscal 2016. The increase was due to the Minacs acquisition, both segments effectively managed to forecast foregoing revenue. Consolidated non-GAAP operating income was $118.9 million, or 3.38% of revenue, compared to…

Thank you, Marshall, and good afternoon to everyone on the call. I'm pleased to report that SYNNEX had a successful start to fiscal 2017. The momentum that we created in 2016 continued into our first quarter with year-on-year revenue growth of over 12%, and with good execution we leveraged the scale and grew our non-GAAP EPS by over 30% delivering a $1.82 per share. I'll next provide an overview of our first quarter before turning the call over to Chris; I will then discuss the current market environment. Our Technology Solutions segment revenues grew by over 9% much better than the overall market. Our strong performance came from our focus on key product and market growth segment combined with our investments in systems integration, design, and cloud services capability. During the quarter we believe that we gained market share in the U.S. while maintaining our strong market position in Canada. The improvements we're making in Japan are starting to show result as our business there returned to profitability. Within our core technology business we experienced better than average growth in network security and software, while [indiscernible] devices and peripherals were below average. The industry shortage of SSDs and memory likely contributed to an overall flat market environment. From an end market perspective demand in commercial and SMB were stronger than average with consumer a bit weaker than average. Now turning to our Concentrix segment, the first quarter headlines were, we grew revenue by 38.7% with our new Minacs portfolio contributing and good results in the healthcare, banking, automotive and technology vertical. Our non-GAAP operating margin increased from the prior year quarter to 7.9% making good progress toward our goal of double digit margin. Now for more color on the Concentrix business I'll turn the call over to Chris Caldwell. Chris?

Thanks Kevin. I've been very happy with how we've executed over the quarter and the start we've had for our fiscal year for 2017. While our revenues grew over 38% year over year for the same quarter, adjusted EBITDA grew over 72% from the same period last year. This is in line with our focus on growing the bottom-line. Non-GAAP operating income at 7.9% is up approximately 210 basis points over the last year. Our focus is on our stated goal of leaving 2017 with double digit operating income run rate. There were a few drivers to our Q1 performance. We certainly have seen the benefits we expected from our latest acquisition both in terms of saving and leveraging the client base. But we're also seeing investments we made in the prior year in facilities and infrastructure starting to be fully utilized. Lastly we benefited from some of the contracts we won last year starting to come into full production now. From a sales perspective we signed eight new client relationships this quarter with a few that I'd like to call out for their unique and innovation solution. Within our Asia-Pac region we signed a multiyear deal that transforms how our business collects and manages toll revenue for their highways by putting in a new digital infrastructure as well as services to lower their cost of operations, but increasing their customer service levels. Within our insurance business we signed a 15 year deal, the largest in our history in this segment, to completely take over a client's back office with technology and services to service in North American market place. This solution encompasses full policy administration, bill collection, claims management and a customer service offering which will be running on our proprietary DS platform. In our European theater we signed…

Thank you, Chris. Now looking at our current quarter, we're forecasting our overall performance to be line with historical seasonality, within the technology market we see demand is stable across the U.S., Canada and Japan and expect our focused growth segments will continue to grow faster than the overall market. The market remains competitive but our principle of establishing strategic relationships with our partners continues to reap benefits, and within the BPO services market overall demand is stable and growing, and we see incremental growth opportunities with the expanded portfolio services we have. As I mentioned on last few calls, I feel positive about the investments we have made in both our business segment. The growth profile of the markets we serve is not homogeneous. So a key part of our strategy is to be where growth is. I believe that SYNNEX has done a good job in anticipating growth trends and adjusting our resources and capabilities to capture that growth. Our partner base is growing, our customer see the value we can bring to their businesses and we continue to be a stable and growing presence in a market that is experienced a significant amount of disruption over the past few quarters. For those of you that have been tracking our progress against the three year goals we established in 2015 at our last Analyst Day, we are coming down the home stretch and I feel we have the momentum to achieve these goals as we exit 2017. And finally, I want to take this opportunity to once again thank all of our employees around the world for their hard work and dedication and also thank our business partners and shareholders for their support. So with that let's turn the call over to the operator for questions.

Thank you. We now begin the question-and-answer session. [Operator Instruction] The first question is from Adam Tindle of Raymond James. Your line is open.

Just wanted to start Kevin, on the May guidance. So just 4% sequential revenue growth and a 3% sequential operating profit dollar decline, you did just significantly exceed your implied operating profit dollar forecast this quarter, was there anything temporary about this result or might there just be a more conservative cadence being establish here?

Well, I think we do have a -- we do take a conservative approach when we establish our guidance, but really that’s also to informed Adam, by number one, with a strong fourth quarter finish, we did reap some of the benefits in our first quarter, in particular in the Technology Solution segment, and that typically appears in our gross margin and ultimately in our operating margin. And then number two, with some level of flux or flux right now in FX rates and just go overall micro things that are going on in the world. We are a little bit conservative in our current view of the quarter.

Okay, and I wanted to ask Chris specifically, I think the guidance implies concentric specifically operating profit dollars will be down around 20% sequentially despite revenue looks like it going to be growing sequentially, so could you just help us understand what drives this trend I know you spoke about some of the headwinds, but hoping you can give us any further detail on anything you can help us to quantify in terms of temporary items here?

So generally, as we are go into the second quarter, we do have some clients who grab some seasonal business just within the second quarter that we ramp up and ramp down very quickly around. But we are focused right now on sort of on boarding our new clients and I mentioned in the opening remarks as well as others that as we always ramp those on, it takes a little bit to get them full production revenue.

Okay, and maybe one just final clarification. I know you don’t guide beyond the current quarter, but you did provide some color in your 10-K filing that suggests that concentric seasonality has become more weighted towards 2Q and 4Q, I think you previously said 3Q and 4Q? So I just wanted to clarify, does this perhaps suggest Concentrix revenue could be flat to down 3Q sequentially versus up historically?

Yes. I wouldn’t guide to quarters above what we're talking about. What I will tell you is that, as you’ve seen historically Q4 is our biggest quarter and that really is the big seasonality. We do have occasional clients that will add some seasonality within two, but I will really focus on Q4 has been a big seasonal quarter.

Thank you. Our next question is from Jim Suva of Citi. Your line is open.

It’s Jim Suva and I have two questions, I'll ask them both as the same time. The first is on the macro environment given the new administration and I know there is a lot of uncertainty out there. But is there -- is your on-shoring off-shoring in the Concentrix business like more active dialogue going on about their employees or located how to service them, it seems you turn on TV [ph] and these news report of company’s on-shoring versus off-shoring more and talk about that update on that? And then my second question is, you mentioned some of the upside in the EPS [ph] amount that was due to the cloud. Is that due to the Hyve business or like similarly cloud services? How should we think about that business? Thank you.

So, Jim, its Chris. In terms of the macro environment, we have seen and I mentioned this in prepared remarks that some buying decisions are taking a little longer, but is really not changing overall, the direction or strategy of the companies. And from our perspective, the way we engaged our clients is really not necessarily caring about where the work is placed, just that it's placed in the right place for the scale requirements and service that needs to deliver. So it hasn't had an impact to our business at this point.

And Jim on your second question. Really when you look at the profile of our technology solutions business today versus only a couple of years ago, it’s really changed quite a bit. We’ve been focused on moving more and more of our business towards where the high growth segments are, Hyve is certainly one component of that. But in addition to that network security software also other cloud services as part of our all clouds, all ecosystem those of all have been very high growth segments for us and collectively is really where it drove growth.

Thank you. Our next question is from Rich Kugele of Needham & Company. Your line is open.

So Kevin, can you just talk about the turnaround in Japan? I know last quarter you had talked about how you move some of expats over there. Can you just talk about how you’re able to bring it to profitability?

Sure and just to do a very quick recap on some of the changes that we’ve made. We did a point an individual TJ Trojan [ph], who was an Executive here in the U.S. for almost past 10 years to move over and lead our Japanese business. Really it’s been a focus on, actually very similar business strategy to what we’ve implemented here in North America, much tighter strategic relationships with key vendors more engagement with key customers and certainly some process work -- process improvement work as well. So still early days, TJ has actually been on-board in Japan since the beginning of December. But in that short period of time, we have seen some positive results and certainly in our first quarter, we did see profitability. So I’m optimistic about where he is taking the business. We are entering by the way, the slowest two quarters in Japan Q2 and Q3. But we expect that the improvements that he is making are going to continue to gain traction.

Okay. And then just lastly, we discuss how component availability may have impacted some demand you’re referring to on the TS side and getting components to the Hyve businesses is key, but have you had any issues within other vendors getting you false solutions?

Yeah that's really what my comment was referring to in the prepared remarks, which is, from a finished goods perspective in the legacy distribution business with the component shortages that have pretty well-known out there. We have had some level of product shortages and it certainly has I believe cost impact on overall demand.

Thank you. Our next question is from Shannon Cross of Cross Research. Your line is open.

Just had a follow-up on the Hyve question and memory, I'm curious from a pricing standpoint, I know some of your partners are put in place pricing increases to try to offset the higher memory and DRAM costs. And then I’m curious just to how your customers have reacted or what they are thinking about it just in terms of trying to gauge elasticity of demand given the tight memory environment?

Shannon this is Dennis. Yeah, there is quite a bit of activity going on in the market with the shortages around SSDs and memory and then the pricing challenges come out as result. Managing components in our business is a day-to-day challenge, not just in the most recent times with the shortages that we are seeing, but it's an everyday activity that we have to manage. So we work with our customers on strategies to address any memory or other pricing changes, SSDs, et cetera. And factor that into our long term relationship with them, long term pricing agreement where possible and then manage the shortages in due course with those arrangements.

And then just a follow-up on Hyve, HPE obviously had some challenges with one of their larger customers in the last quarter with regards to some Hyperscale orders and we’ve heard from some of the other large data center companies that they’re kind of -- they've built a lot of capacity in the last couple of years and now perhaps they’re trying to milk it to get a bit of leverage. I’m curious if you’re seeing that within your customer base or I know it’s always lumpy, but has there been any sort of change in sort of the overall demand per file when you look at some of the cloud vendors and work with?

Actually, if anything, we are seeing continued strong demand overall, and it’s really the view that we have on the growth in our business is not just leveraging the growth that our existing clients have, but also signing on net new client, where we have more of the tip of the iceberg opportunity to gain more and more share with them. So our prospects there are positive.

Okay, great. And then just one quick question Kevin. If you could talk a bit about what you’re thinking in terms of acquisitions and growth as you look forward in the next couple of years. I assume it still remains a focus, but I’m curious it’s what the market opportunity looks like these days?

Yeah, we’ll tell you Shannon, just to level set. We operate in two different markets that we love, both offer significant growth opportunities certainly in different ways and our focus has been on growth, with good growth it brings a lot of good things, including increased earnings growth and we have been acquisitive in the past, but we also invest pretty heavily in Greenfield opportunities where we see growth opportunities. So we're going to continue to do all of the above. We see good opportunities in both the Concentrix side of our business and Technology Solutions and we also see good opportunities in continuing to invest in Greenfield opportunities where we see good growth and trends driving this growth.

Thank you. [Operator Instructions] Our next question is from Matt Sheerin of Stifel. Your line is open.

I wanted to actually ask yet another question on the memory and PC component, that situation. I understand certainly with the Hyve business there's a lot of component pass through, but you also have a standalone component business selling into that market. And has that been beneficial to your margins since you've have had an inventory position and you've been in that business for many years, and that appear to be able to manage that business as well as others?

I mean as a general rule Matt no. Our margin, our profitability and our -- what we call our systems integration design components business has been relatively stable, and from time-to-time certain shortages and demand supply differences do generate profit opportunities, but at least right now it's been stable.

And then question for Chris on the Concentrix and the target to get to the double-digit EBIT margin by -- basically by the end of this fiscal year on a run rate, and so are we're talking about sort of sustainably through quarters or basically on an annual basis with some seasonality in there? And then in terms of how you get there, you talked about some puts and takes on the volume side, and the growth side, but do you need volume growth or is that also a function of mix and getting cost out of the Minacs acquisition and other things that you're doing?

So, Matt it's on an annual basis for the double-digit operating margin. Certainly you saw we achieved a very strong result in Q4, but annualized we want to make sure that we're above 10%. In terms of what drives us to get us there? It's a couple of things, one is mix of business, as we continue to grow some of our high value verticals, you'll see the margin expansion, it just takes a while to get those contracts closed, and they're heavier and more expensive to ramp up, but then once they get there they're clearly helping to contribute to grow that margin. Some of it is also taking out some of the costs, we clearly made a significant amount of investments in our infrastructure over the last year and a half, two years. We're starting to see the benefits of that, we'll continue to see some of the benefits of those investments over the next preceding quarters and that'll both be taking out costs as well as gaining more leverage within the existing business. So, it's a combination of those two that gives us the confidence of driving us to where we need to get to.

And just my last question, just regarding the Tech Data-Avnet acquisition, I know Kevin you talked last quarter about that'd be an opportunity for SYNNEX, now we're a few weeks into that deal having been done here, any update on your thoughts there and market share opportunity?

Well Matt I guess in addition to that there're other changes that have happened recently within the distribution landscape and for us we're the stable consistent performer and as I said, you know one thing that does make us different is the depth of relationships that we have with key partners and our ability to perform, so through any kind of disruption we certainly expect to reap the benefits out of the changes that are happening in the market place.

So will there be investments that you would need to put in place in order to really sort of take advantage of that and grow your market sales?

You know just the things that you would probably expect Matt, more of focus, perhaps a shift of resource against some of the key partner opportunities that we see out there, but beyond that we feel that we've already invested in the capabilities that we need to compete effectively.

Okay, alright, thanks a lot.

And I believe that was our last question so on behalf of all of us here at SYNNEX thank you every one for joining our call.

Thank you, and that concludes today's conference, thank you for your participation, you may now disconnect.