Concentrix Reports Third Quarter 2022 Results

Concentrix
Concentrix

Raises Quarterly Dividend 10 Percent

NEWARK, Calif., Sept. 28, 2022 (GLOBE NEWSWIRE) -- Concentrix Corporation (NASDAQ: CNXC), a leading global provider of customer experience (CX) solutions and technology, today announced financial results for the fiscal third quarter ended August 31, 2022. The Company also announced that the Board of Directors has declared a 10 percent increase in its regular quarterly dividend to $0.275 per share.

 

Three Months Ended

 

 

 

August 31, 2022

 

August 31, 2021

 

Change

Revenue($M)

$

1,579.6

 

 

$

1,397.3

 

 

13.1%

Operating income($M)

$

157.5

 

 

$

151.4

 

 

4.0%

Non-GAAP operating income($M)(1)

$

221.5

 

 

$

181.6

 

 

22.0%

Operating margin

 

10.0

%

 

 

10.8

%

 

-80 bps

Non-GAAP operating margin(1)

 

14.0

%

 

 

13.0

%

 

100 bps

Net income($M)

$

106.7

 

 

$

109.8

 

 

(2.8)%

Non-GAAP net income($M)(1)

$

154.4

 

 

$

131.7

 

 

17.2%

Adjusted EBITDA($M)(1)

$

258.4

 

 

$

214.8

 

 

20.3%

Adjusted EBITDA margin(1)

 

16.4

%

 

 

15.4

%

 

100 bps

Diluted earnings per common share

$

2.04

 

 

$

2.08

 

 

(1.9)%

Non-GAAP diluted earnings per common share(1)

$

2.95

 

 

$

2.49

 

 

18.5%

(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.

Third Quarter Fiscal 2022 Highlights:

  • Revenue was $1,579.6 million, up 13.1% from the prior year third quarter, including a 4.2-point negative impact of foreign exchange rates compared with the prior year period, compared with $1,397.3 million in the prior year third quarter, and up 7.5% on an adjusted constant currency basis.

  • Operating income was $157.5 million, or 10.0% of revenue, compared with $151.4 million, or 10.8% of revenue, in the prior year third quarter.

  • Non-GAAP operating income was $221.5 million, or 14.0% of revenue, compared with $181.6 million, or 13.0% of revenue, in the prior year third quarter.

  • Adjusted EBITDA was $258.4 million, or 16.4% of revenue, compared with $214.8 million, or 15.4% of revenue, in the prior year third quarter.

  • Cash flow from operations was $152.6 million in the quarter. Free cash flow for the quarter was $126.4 million.

  • Diluted earnings per common share (“EPS”) was $2.04 compared to $2.08 in the prior year third quarter.

  • Non-GAAP diluted EPS was $2.95 compared to $2.49 in the prior year third quarter.

"We executed well in the third quarter, delivering solid revenue growth and profit improvements even in the uncertain macro environment,” said Chris Caldwell, Concentrix President and CEO. "In addition to strong new business signings in the quarter, we recently closed two very large deals taking advantage of our CX operations and Catalyst capabilities and see opportunities for growth across our entire business portfolio over the medium- and long-term. During the quarter, we welcomed ServiceSource's world-class B2B sales team that hit the ground running and are integrating quickly. This acquisition continues to build out our differentiated offerings making us a go-to partner for Designing, Building and Running the Future of CX. We continue to see opportunities in the marketplace that we believe will allow us to achieve our long-term financial objectives.”

Quarterly Dividend and Share Repurchase Program:

  • Concentrix paid a $0.25 per share quarterly dividend on August 9, 2022. The Company’s Board of Directors has declared a quarterly dividend of $0.275 per share payable on November 8, 2022, to shareholders of record at the close of business on October 28, 2022.

  • Concentrix repurchased 0.4 million shares in the third quarter at a cost of $50.3 million under its previously announced share repurchase program at an average cost of $136.07 per share. At August 31, 2022, the Company’s remaining share repurchase authorization was $366.8 million.

Fourth Quarter and Full Year Fiscal 2022 Outlook
The following statements are based on Concentrix’ current expectations for the fourth quarter and full year fiscal 2022. Non-GAAP financial measures exclude the impact of acquisition-related and integration expenses, amortization of intangible assets, depreciation, share-based compensation and the related tax effects thereon. These statements are forward-looking and actual results may differ materially.

Fourth Quarter Fiscal 2022 Expectations:

  • Fourth quarter adjusted constant currency revenue growth is expected to approximate 7%. Based on current exchange rates, we expect an approximate 5-point negative impact of foreign exchange rates compared with the prior year. Additionally, we expect the contribution of approximately $175 million in fourth quarter revenue from businesses acquired since the beginning of the prior year fourth quarter.

  • Operating income is expected to exceed $180 million and non-GAAP operating income is expected to exceed $254 million.

  • The effective tax rate is expected to approximate 24% to 25%.

Full Year 2022 Expectations:
Based on our expectations for the fourth quarter, we expect the following full year fiscal 2022 results:

  • Full year adjusted constant currency revenue growth is expected to approximate 9%. Based on current exchange rates, we expect an approximate 4-point negative impact of foreign exchange rates compared with the prior year. Additionally, we expect full year revenue to include a net contribution of approximately $486 million from businesses acquired and divested since the beginning of fiscal year 2021.

  • Operating income is expected to exceed $642 million and non-GAAP operating income is expected to exceed $890 million.

  • The effective tax rate is expected to approximate 25%.

Conference Call and Webcast
Concentrix will host a conference call for investors to review its third quarter fiscal 2022 results tomorrow morning, Thursday, September 29, 2022 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 global provider of customer experience (CX) solutions and technology, improving business performance for some of the world’s best brands including over 100 Fortune Global 500 clients and more than 125 new economy 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 by reimagining everything CX through Strategy + Talent + Technology. 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. Visit www.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 to U.S. dollars using the comparable prior year’s currency conversion rate in comparison to prior year’s revenue. Generally, when the U.S. dollar either strengthens or weakens against other currencies, revenue growth at constant currency rates or adjusting for currency will be higher or lower than revenue growth reported at actual exchange rates.

  • Adjusted constant currency revenue growth, which is constant currency revenue growth excluding revenue for businesses acquired or divested since the beginning of the prior year period so that revenue growth can be viewed without the impact of acquisitions or divestitures, thereby facilitating period-to-period comparisons of our business performance.

  • Non-GAAP operating income, which is operating income, adjusted to exclude acquisition-related and integration expenses, including related restructuring costs, 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.

  • Non-GAAP net income, which is net income excluding the tax effected impact of acquisition-related and integration expenses, including related restructuring costs, amortization of intangible assets, and share-based compensation.

  • 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.

  • Non-GAAP diluted earnings per common share (“EPS”), which is diluted EPS excluding the per share, tax effected impact of acquisition-related and integration expenses, including related restructuring costs, amortization of intangible assets, and share-based compensation.

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 and growth, results of operations, including revenue and operating income, effective tax rate, margin expansion, capital allocation, business strategy, foreign currency exchange rate fluctuations, achievement of the Company’s long-term financial objectives 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, the conflict in Ukraine and their effects on the global economy, supply chains, inflation, the Company’s business and the business of the Company’s clients; other communicable diseases, natural disasters, adverse weather conditions or public health crises; cyberattacks on the Company’s or its clients’ networks and information technology systems; the inability to protect personal and proprietary information; the failure of the Company’s staff and contractors to adhere to the Company’s and its clients’ controls and processes; the inability to execute on the Company’s digital CX strategy; the inability to successfully identify, complete and integrate strategic acquisitions or investments, including the integration of ServiceSource International, Inc.; competitive conditions in the Company’s industry and consolidation of its competitors; geopolitical, economic and climate or weather related risks in regions with a significant concentration of the Company’s operations; higher than expected tax liabilities; the loss of key personnel; the demand for CX solutions and technology; variability in demand by clients or the early termination of the Company’s client contracts; the level of business activity of the Company’s clients and the market acceptance and performance of their products and services; the operability of communication services and information technology systems and networks; changes in law, regulations or regulatory guidance; currency exchange rate fluctuations; damage to the Company’s reputation through the actions or inactions of third parties; increases in the cost of labor; investigative or legal actions; and other factors contained in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021 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 2022 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 and its subsidiaries. Concentrix and the Concentrix logo Reg. U.S. Pat. & Tm. Off. and applicable non-U.S. jurisdictions. Other names and marks are the property of their respective owners.

CONCENTRIX CORPORATION
CONSOLIDATED BALANCE SHEETS
(currency and share amounts in thousands, except par value)

 

August 31, 2022

 

November 30, 2021

 

(unaudited)

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

176,082

 

 

$

182,038

 

Accounts receivable, net

 

1,355,065

 

 

 

1,207,953

 

Other current assets

 

186,256

 

 

 

153,074

 

Total current assets

 

1,717,403

 

 

 

1,543,065

 

Property and equipment, net

 

390,343

 

 

 

407,144

 

Goodwill

 

2,971,820

 

 

 

1,813,502

 

Intangible assets, net

 

1,025,776

 

 

 

655,528

 

Deferred tax assets

 

59,685

 

 

 

48,413

 

Other assets

 

584,847

 

 

 

578,715

 

Total assets

$

6,749,874

 

 

$

5,046,367

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

114,128

 

 

$

129,359

 

Current portion of long-term debt

 

6,250

 

 

 

 

Accrued compensation and benefits

 

465,137

 

 

 

453,434

 

Other accrued liabilities

 

397,226

 

 

 

351,642

 

Income taxes payable

 

45,472

 

 

 

33,779

 

Total current liabilities

 

1,028,213

 

 

 

968,214

 

Long-term debt, net

 

2,401,099

 

 

 

802,017

 

Other long-term liabilities

 

515,237

 

 

 

546,410

 

Deferred tax liabilities

 

158,698

 

 

 

109,471

 

Total liabilities

 

4,103,247

 

 

 

2,426,112

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.0001 par value, 10,000 shares authorized and no shares issued and outstanding as of August 31, 2022 and November 30, 2021, respectively

 

 

 

 

 

Common stock, $0.0001 par value, 250,000 shares authorized; 52,093 and 51,927 shares issued as of August 31, 2022 and November 30, 2021, respectively, and 51,016 and 51,594 shares outstanding as of August 31, 2022 and November 30, 2021, respectively

 

5

 

 

 

5

 

Additional paid-in capital

 

2,415,868

 

 

 

2,355,767

 

Treasury stock, 1,077 and 333 shares as of August 31, 2022 and November 30, 2021, respectively

 

(167,420

)

 

 

(57,486

)

Retained earnings

 

683,466

 

 

 

392,495

 

Accumulated other comprehensive loss

 

(285,292

)

 

 

(70,526

)

Total stockholders’ equity

 

2,646,627

 

 

 

2,620,255

 

Total liabilities and stockholders’ equity

$

6,749,874

 

 

$

5,046,367

 

 

 

 

 

 

 

 

 

CONCENTRIX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(currency and share amounts in thousands, except per share amounts)
(unaudited)

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

August 31,
2022

 

August 31,
2021

 

%
Change

 

August 31,
2022

 

August 31,
2021

 

%
Change

Revenue

 

 

 

 

 

 

 

 

 

 

 

Technology and consumer electronics

$

500,595

 

 

$

448,104

 

 

12

%

 

$

1,437,548

 

 

$

1,278,199

 

 

12

%

Retail, travel and ecommerce

 

299,595

 

 

 

241,662

 

 

24

%

 

 

879,537

 

 

 

712,629

 

 

23

%

Communications and media

 

274,424

 

 

 

256,461

 

 

7

%

 

 

808,884

 

 

 

760,111

 

 

6

%

Banking, financial services and insurance

 

234,844

 

 

 

210,730

 

 

11

%

 

 

733,673

 

 

 

648,630

 

 

13

%

Healthcare

 

143,085

 

 

 

113,749

 

 

26

%

 

 

441,473

 

 

 

354,391

 

 

25

%

Other

 

127,059

 

 

 

126,545

 

 

%

 

 

382,640

 

 

 

366,447

 

 

4

%

Total revenue

 

1,579,602

 

 

 

1,397,251

 

 

13

%

 

 

4,683,755

 

 

 

4,120,407

 

 

14

%

Cost of revenue

 

1,012,754

 

 

 

915,910

 

 

11

%

 

 

3,019,857

 

 

 

2,670,287

 

 

13

%

Gross profit

 

566,848

 

 

 

481,341

 

 

18

%

 

 

1,663,898

 

 

 

1,450,120

 

 

15

%

Selling, general and administrative expenses

 

409,303

 

 

 

329,962

 

 

24

%

 

 

1,201,696

 

 

 

1,035,628

 

 

16

%

Operating income

 

157,545

 

 

 

151,379

 

 

4

%

 

 

462,202

 

 

 

414,492

 

 

12

%

Interest expense and finance charges, net

 

20,272

 

 

 

4,868

 

 

316

%

 

 

42,015

 

 

 

19,316

 

 

118

%

Other expense (income), net

 

(12,086

)

 

 

(5,858

)

 

106

%

 

 

(22,247

)

 

 

(5,601

)

 

297

%

Income before income taxes

 

149,359

 

 

 

152,369

 

 

(2)%

 

 

442,434

 

 

 

400,777

 

 

10

%

Provision for income taxes

 

42,235

 

 

 

42,615

 

 

(1)%

 

 

111,738

 

 

 

119,308

 

 

(6)%

Net income before non-controlling interest

 

107,124

 

 

 

109,754

 

 

(2)%

 

 

330,696

 

 

 

281,469

 

 

17

%

Less: Net income attributable to non-controlling interest

 

434

 

 

 

 

 

100

%

 

 

591

 

 

 

 

 

100

%

Net income attributable to Concentrix Corporation

$

106,690

 

 

$

109,754

 

 

(3)%

 

$

330,105

 

 

$

281,469

 

 

17

%

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

2.05

 

 

$

2.10

 

 

 

 

$

6.32

 

 

$

5.41

 

 

 

Diluted

$

2.04

 

 

$

2.08

 

 

 

 

$

6.28

 

 

$

5.35

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

Basic

 

51,193

 

 

 

51,432

 

 

 

 

 

51,461

 

 

 

51,288

 

 

 

Diluted

 

51,549

 

 

 

52,061

 

 

 

 

 

51,834

 

 

 

51,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONCENTRIX CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(currency and share amounts in thousands, except per share amounts)
(unaudited)

 

Three Months Ended

 

Nine Months Ended

 

August 31, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Revenue

$

1,579,602

 

 

$

1,397,251

 

 

$

4,683,755

 

 

$

4,120,407

 

Revenue growth, as reported under U.S. GAAP

 

13.1

%

 

 

20.1

%

 

 

13.7

%

 

 

20.5

%

Foreign exchange impact

 

4.2

%

 

(2.0)%

 

 

2.9

%

 

(2.7)%

Constant currency revenue growth

 

17.3

%

 

 

18.1

%

 

 

16.6

%

 

 

17.8

%

Effect of excluding revenue of acquired and divested businesses

(9.8)%

 

 

1.1

%

 

(7.5)%

 

 

0.7

%

Adjusted constant currency revenue growth

 

7.5

%

 

 

19.2

%

 

 

9.1

%

 

 

18.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Three Months Ended

 

Nine Months Ended

 

August 31, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Operating income

$

157,545

 

$

151,379

 

 

$

462,202

 

$

414,492

 

Acquisition-related and integration expenses

 

12,565

 

 

 

 

 

15,213

 

 

 

Amortization of intangibles

 

41,500

 

 

33,997

 

 

 

121,025

 

 

103,195

 

Share-based compensation

 

9,862

 

 

9,457

 

 

 

37,678

 

 

25,858

 

Gain on divestitures and related transaction costs

 

 

 

(13,197

)

 

 

 

 

(13,197

)

Non-GAAP operating income

$

221,472

 

$

181,636

 

 

$

636,118

 

$

530,348

 


 

Three Months Ended

 

Nine Months Ended

 

August 31, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Net income

$

106,690

 

 

$

109,754

 

 

$

330,105

 

 

$

281,469

 

Net income attributable to non-controlling interest

 

434

 

 

 

 

 

 

591

 

 

 

 

Interest expense and finance charges, net

 

20,272

 

 

 

4,868

 

 

 

42,015

 

 

 

19,316

 

Provision for income taxes

 

42,235

 

 

 

42,615

 

 

 

111,738

 

 

 

119,308

 

Other expense (income), net

 

(12,086

)

 

 

(5,858

)

 

 

(22,247

)

 

 

(5,601

)

Acquisition-related and integration expenses

 

12,565

 

 

 

 

 

 

15,213

 

 

 

 

Gain on divestitures and related transaction costs

 

 

 

 

(13,197

)

 

 

 

 

 

(13,197

)

Amortization of intangibles

 

41,500

 

 

 

33,997

 

 

 

121,025

 

 

 

103,195

 

Share-based compensation

 

9,862

 

 

 

9,457

 

 

 

37,678

 

 

 

25,858

 

Depreciation

 

36,933

 

 

 

33,146

 

 

 

110,107

 

 

 

105,371

 

Adjusted EBITDA

$

258,405

 

 

$

214,782

 

 

$

746,225

 

 

$

635,719

 


 

Three Months Ended

 

Nine Months Ended

 

August 31, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Operating margin

10.0

%

 

10.8

%

 

9.9

%

 

10.1

%

Non-GAAP operating margin

14.0

%

 

13.0

%

 

13.6

%

 

12.9

%

Adjusted EBITDA margin

16.4

%

 

15.4

%

 

15.9

%

 

15.4

%


 

Three Months Ended

 

Nine Months Ended

 

August 31, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Net income

$

106,690

 

 

$

109,754

 

 

$

330,105

 

 

$

281,469

 

Acquisition-related and integration expenses

 

12,565

 

 

 

 

 

 

15,213

 

 

 

 

Amortization of intangibles

 

41,500

 

 

 

33,997

 

 

 

121,025

 

 

 

103,195

 

Share-based compensation

 

9,862

 

 

 

9,457

 

 

 

37,678

 

 

 

25,858

 

Gain on divestitures and related transaction costs

 

 

 

 

(13,197

)

 

 

 

 

 

(13,197

)

Income taxes related to the above(1)

 

(16,237

)

 

 

(8,315

)

 

 

(44,170

)

 

 

(20,742

)

Non-GAAP net income

$

154,380

 

 

$

131,696

 

 

$

459,851

 

 

$

376,583

 


 

Three Months Ended

 

Nine Months Ended

 

August 31, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Net income

$

106,690

 

 

$

109,754

 

 

$

330,105

 

 

$

281,469

 

Less: net income allocated to participating securities

 

(1,571

)

 

 

(1,649

)

 

 

(4,816

)

 

 

(3,945

)

Net income attributable to common stockholders

 

105,119

 

 

 

108,105

 

 

 

325,289

 

 

 

277,524

 

Acquisition-related and integration expenses allocated to common stockholders

 

12,380

 

 

 

 

 

 

14,991

 

 

 

 

Amortization of intangibles allocated to common stockholders

 

40,889

 

 

 

33,486

 

 

 

119,259

 

 

 

101,749

 

Share-based compensation allocated to common stockholders

 

9,717

 

 

 

9,315

 

 

 

37,128

 

 

 

25,496

 

Gain on divestitures and related transaction costs allocated to common stockholders

 

 

 

 

(12,999

)

 

 

 

 

 

(13,012

)

Income taxes related to the above allocated to common stockholders(1)

 

(15,998

)

 

 

(8,190

)

 

 

(43,526

)

 

 

(20,450

)

Non-GAAP net income attributable to common stockholders

$

152,107

 

 

$

129,717

 

 

$

453,141

 

 

$

371,307

 


 

Three Months Ended

 

Nine Months Ended

 

August 31, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Diluted earnings per common share (“EPS”)(2)

$

2.04

 

 

$

2.08

 

 

$

6.28

 

 

$

5.35

 

Acquisition-related and integration expenses

 

0.24

 

 

 

 

 

 

0.29

 

 

 

 

Amortization of intangibles

 

0.79

 

 

 

0.64

 

 

 

2.30

 

 

 

1.96

 

Share-based compensation

 

0.19

 

 

 

0.18

 

 

 

0.72

 

 

 

0.49

 

Gain on divestitures and related transaction costs

 

 

 

 

(0.25

)

 

 

 

 

 

(0.25

)

Income taxes related to the above(1)

 

(0.31

)

 

 

(0.16

)

 

 

(0.85

)

 

 

(0.40

)

Non-GAAP diluted EPS

$

2.95

 

 

$

2.49

 

 

$

8.74

 

 

$

7.15

 

 

 

 

 

 

 

 

 

Weighted-average number of common shares - diluted

 

51,549

 

 

 

52,061

 

 

 

51,834

 

 

 

51,914

 


 

Three Months Ended

 

Nine Months Ended

 

August 31, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Net cash provided by operating activities

$

152,557

 

 

$

93,010

 

 

$

365,041

 

 

$

332,125

 

Purchases of property and equipment

 

(26,110

)

 

 

(42,111

)

 

 

(97,276

)

 

 

(112,869

)

Free cash flow

$

126,447

 

 

$

50,899

 

 

$

267,765

 

 

$

219,256

 


 

Forecast

 

Three Months
Ending November
30, 2022

 

(To exceed)

Operating income

$

180,000

Acquisition-related and integration expenses

 

15,000

Amortization of intangibles

 

42,400

Share-based compensation

 

16,600

Non-GAAP operating income

$

254,000


 

Forecast

 

Fiscal Year
Ending November
30, 2022

 

(To exceed)

Operating income

$

642,087

Acquisition-related and integration expenses

 

30,213

Amortization of intangibles

 

163,400

Share-based compensation

 

54,300

Non-GAAP operating income

$

890,000

(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 periods presented.

(2) Diluted EPS is calculated using the two-class method. Unvested restricted stock awards granted to employees are considered participating securities. For the purposes of calculating diluted EPS, net income attributable to participating securities was approximately 1.5% of net income for both the three months ended August 31, 2022 and 2021 and 1.5% and 1.4% of net income, respectively, for the nine months ended August 31, 2022 and 2021, and was excluded from total net income to calculate net income attributable to common stockholders. In addition, the non-GAAP adjustments allocated to common stockholders were calculated based on the percentage of net income attributable to common stockholders.

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