Good day ladies and gentlemen and welcome to the Synnex Corporation fiscal 2007 fourth quarter and year end results conference call. (Operator Instructions) I would now like to introduce your host for today’s conference Mrs. Laura Crowley, Director of Investor Relations. You may begin your conference.

Good afternoon and welcome to the Synnex Corporation fiscal 2007 fourth quarter earnings conference call. Joining us on today’s call our Dennis Polk, Chief Operating Officer and Thomas Alsborg, Chief Financial Officer. Bob Huang unfortunately has a short term illness and is not able to join us today as talking without coughing is difficult for him right now. We expect Bob will be fully recovered in the next few days. Before we begin I would like to note that the statements on today’s call which are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward looking statements include but are not limited to statements regarding our Canadian consolidation expenses, our strategy for investing in higher gross businesses, seasonality, growth of our consumer electronics division, expectations of our revenues, growth margins, SG&A, net income, earnings per share and return on invested capital for the first quarter of fiscal 2008, our growth and profitability, our future benefits of our recent acquisitions, our goals for returns on invested capital are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in these forward-looking statements. Please refer to today’s press release and documents filed with the Securities & Exchange Commission specifically our most recent form 10Q for information on risk factors that could cause actual results to differ materially from those discussed in these forward-looking statements. Additionally this conference call is the property of Synnex Corporation and may not be recorded or rebroadcast without specific written permission from the company. Now I would like to turn the call over to Thomas Alsborg for an update on our financial performance. Thomas?

Good afternoon everyone and thank you for joining our call today. I am going to begin by summarizing our result of operation for the quarter. Total revenues for the fourth quarter of 2007 were $1.97 billion dollars a 13% increase over the fourth quarter 2006 and a 12% increase sequentially. These results well exceeded our stated guidance and analysis consensus for the quarter. Both our US and Canadian operations performed above expectations from the quarter which largely drove our strong increase in revenue. Fourth quarter net income was $20.2 million dollars or $0.61 cents per diluted share also surpassing guidance and consensus. In the fourth quarter fiscal 2007 year our gross margin once again expanded significantly to reach 5.35%. This represents an increase of 79 basis points compared to the prior year quarter and an increase of 17 basis points sequentially. Our core distribution business and are other business process services all contributed to our increased gross margin percentage for the fourth quarter illustrating continuing success as our transitioning business strategy and model. As always we remain focused and committed to improving all drivers of our gross margin. Execution of this plan is in part the reason we had company wide gross profit expense ration of 1.54 in the fourth quarter. Up 17 basis points from the third quarter. Fourth quarter 2007 selling general and administrative expense with $68.6 million dollars or 3.48% of revenue compared to $5.2 million or 2.9% in the fourth quarter or fiscal 2006. This change in percentage of revenue is in large part driven by our business process services acquisition which have a greater SGNA and gross margin profile than our core distribution business. I would like to report that the Canadian warehouse consolidation is nearly complete and any remaining expecting cost of completion are…

Thank you Thomas. God afternoon to everyone. As Laura noted Bob is not on the call today due to a short term bug and nothing more. Please do not read anything into his absence. We look forward to visiting with you in the near future to further discuss our solid results for this quarter. Regarding our performance for the fourth quarter 2007; Synnex produces several record making milestones our revenue was $1.97 billion the highest in the companies public history. Our growth margin was 5.35 % for the quarter, also the highest in the company’s public history. We achieved an operating margin of 1.87% likewise the highest in the company’s public history. We increased our continuing operations earnings per share by approximately 27% year-over-year to $0.61, also a record. Finally, we closed 2007 with ROIC of 9% and ROE of 14% in the fourth quarter, a solid reflection of the value we are creating for our investors. As Thomas noted our core US and Canadian distribution operations drove results pass our expectations however, we received very nice contributions from our recently acquired businesses as well. With regard to customer or product mix we did not see any material differences from historical patterns or form what is being reported in the marketplace today. We would not be achieving these results without the continued hard work and dedication of employees and the continue business and support from our customers and suppliers. I want to take this moment to recognize and thank them. With the completion of our fourth quarter 2007 Synnex achieved our 82nd consecutive quarter of profitability – 20 plus years of profit. I would like to begin our business update by providing some perspective on what we have accomplished at Synnex over the past several years. Afterwards I will share…

Thank you Dennis. Adrianne let’s go ahead and open up the line for questions.

(Operator Instructions) The first question is from Richard Gardner from Citigroup. Richard Gardner – Citigroup: Dennis and Thomas the consensus from your competition is that there is at least some modest slowing in the US FMB business market. I think some have talked about maybe a point or two of slowing in the end markets but definitely a discernable slowing. We’ve also heard that Dell for example is having a tough time in the US corporate market. It doesn’t sound like you’ve seen anything but can you just talk about whether you’ve seen any discernable change in the market at all in this quarter that we just had? Then, as a follow on to that it looks like excluding acquisitions you may have accelerated the growth of your US distribution business at the same time that you expanded gross margins. I would just like some perspective on how you achieved that.

Sure, let me just take the first part of the question and then maybe Tom can jump in on the second part. Regarding the FMB marketplace in North America as far as Q4 is concerned we tend to have a mix shift in our business toward large deals and larger customer because of the government selling season and the fact that we have a large retail business as well. So, our FMB business tends to become a smaller component of our business in Q4. That being said, I think it is fair to say and echo the comments of our competitors that there is, I’ll call it slight change in the demand patterns of the FMB. I wouldn’t call it a weakness by any stretch but the FMB market is not as strong as it was last year at this time. As far as our growth of our core business I’ll let Thomas take that question. Thomas I would just comment that as you can see by the numbers our core business did indeed grow particularly as we commented in North America, the US and Canadian distribution. We talked about on the call the seasonality of the consumer electronics and retail business that we experienced this quarter and we expect to experience in the fourth quarter of each of our coming fiscal years. But, I would tell you frankly that we are executing very well in this company so our growth in the business comes from good execution on all fronts in regards to both the core distribution business as well as the recent acquisitions that we’ve made for the company. To be clear, there are no special or one time circumstances that would have drove this other than ongoing operations.

The next question is from Sean Hannan from Needham & Company. Richard Kugele – Needham & Company : This is actually Rich Kugele. You’ve done a very good job over the years integrating a number of acquisitions and I was just hoping that now that we’re far along in so many of them you could update us on your ability to bring your internally developed IT systems to bear on these companies? And, how much as we look at our op backs which has not been rising as best as sales – you’ve been able to keep that contained, how much of that is really driven by those systems. Then, I guess in a broader sense how much of your costs do you think today are driven by your total IT costs?

From our acquisitions in 2007 from an integration standpoint I think it’s best to look at them in two categories. We have the PCW acquisition and the RGC acquisition in Canada. Those are both distribution centric businesses and for both of those businesses we did integrate them very quickly especially from an IT standpoint because IT is at the core of our low cost operations. We leverage that quite well. Each of those businesses again was integrated very quickly. They’ve been on our IT systems almost from day one and we are realizing the benefits of our IT systems and the integration of those businesses as is evident by our results today. The other camp of acquisitions [LinkToSupport] and HiChina those businesses are in different service categories and thus we don’t use our IT system as much in those businesses but we are looking at ways to leverage our IT systems and further gain synergies and drive down the costs in those businesses. Tom The only thing I would add to that is as you’re aware in this business, primarily the core distribution business, the IT system is a significant part of the backbone of the company and a significant part of the cost structure. But, I would just point out that you maybe sensing our IT system and the fact that we have an in house system that we’ve developed over the years is a hugely competitive differentiator in our space and it is one of the key driving reasons we have such a low SG&A profile and moreover that we have a highly competitive operating margin compared to the other players in this space. Richard Kugele – Needham & Company : Okay that’s helpful. Lastly, whether we’re going to a recession or whatever you want to call it, if we just have a continuation of relatively stable to small digit spending in the US as you get to be a bigger company do you think that you should be readdressing perhaps your participation in Asia in a different way? And, if you have any thoughts there about potentially expanding out there?

Right now our goal is still to grow our North American distribution business again, faster than the marketplace. We have been able to do that for many, many years in a row. We feel there’s a lot of opportunity to continue to do so. As far as from a distribution perspective, investing in Asia is not on our radar right now. As we did mention in the call we are doing business in China through our HiChina business as well as our internal business processing outsourcing services. So, our goal and our focus is to remain a leading North American distributor while looking at opportunities outside North American in businesses that are contributory to distribution and synergistic to distribution but not in a distribution environment.

The next question is from Ananda Baruah from Banc of America Securities. Ananda Baruah – Banc of America Securities: I was just wondering if you could drill down on gross margins just a little bit more. You mentioned that you saw incremental margin expansion from both distribution and from services. I was wondering if you could speak more specifically to some of the areas in both those categories. Tom I would point out that the newly acquired businesses are, if you will from a [inaudible] perspective and the fact that they weren’t here all year long is a bit of a noise factor when you look at the gross margin. But, the first thing I’d point to you is that our gross margin improvement was primarily driven by the core operations of the business. We had very nice complementary contributions from our recent acquisitions but I want to be clear that the gross margin is driven by the core business of Synnex. Having said that, also I’d just point out that many of the various initiatives that we talked about and that Dennis highlighted recently in this call are taking hold and they’re making nice contributions. So again, the consumer electronics and the retail space is growing very nicely with nice higher than average margins. Our technology solutions distribution service is also growing with very nice margins. So, the only way to characterize it is that again, we’re executing very well and this company is operating on all eight cylinders. Ananda Baruah – Banc of America Securities: It seems like each quarter for the last, I don’t know if it’s been four quarters now or so you’ve at least beat our estimates on the gross margin lines and just wondering if it’s exceeding your own internal expectations? Tom As far…

(Operator Instructions) The next question is from Ben Radinsky from Bear Stearns. Benjamin Radinsky – Bear Stearns: Can I dig into that question just a little bit further? If you look at your guidance for Q1, I think the implication is like somewhere of a 1.7% operating margin which would be down sequentially but it still would be a pretty nice operating margin relative to where you’ve been in the past. What should we think of now as the base line? Is Q4 a base line for where you think your business can be? Or, do you think that was really just a great quarter – not that it’s an anomaly, not saying it’s another business but perhaps the base line has materially changed? Tom Yes and yes. Q4 was a great quarter but the base line is materially changing. I wouldn’t focus your analysis Ben so much on a quarter-to-quarter basis. Again, we just talked about the fact that we’re going to see increased seasonality in this business. One of the reasons we’ve shared with you some of our annual targets now for 2008 in terms of EPS growing by more than 15% is because we want to draw your attention to the fact that this business model is changing. And, as I look out over 2008 and I look at the business model it looks a lot more like our Q4 results than it would prior quarters or for that matter fiscal 2007.

Okay just to be real clear Ben, Q4 was not an anomaly quarter at all. We executed very well and posted very strong results and we feel that we can continue too do that moving forward. Benjamin Radinsky – Bear Stearns: The next question is just more how we should think about your business if the economy were to turn? If we entered into a recession do you think that you would be able to maintain your EPS target simply by margin expansion?

Whatever the market conditions are we obviously can’t use that as an excuse. We have a fairy large market that we are participants in and we are not that large of a player currently. We think we can execute in almost all conditions all be it we have to be very cognizant of the market going into a recession type environment. We look forward to 2008, we are planning for the market to be more challenging but again we feel that though our execution we can hit the revenue and EPS guidance that we talked in Q1 and the EPS guidance for the full year. Benjamin Radinsky – Bear Stearns: Okay two last questions from me. The first is assuming the numbers that you have given us for 2008 we will be generating a nice amount of free cash flow, with that presumption what are your primary uses for that cash flow? What will you do with the cash that you generate?

Well obviously we are going to invest that cash to help achieve the higher double digit returns that we have been talking about all this time. In the short run, in some cases, that will mean just reducing our debt within the company but over the longer term we are going to be making continued investments in this business to drive ROIC.

To add to that Ben, we always are looking at acquisitions to improve our business and where we see opportunity we will defiantly invest our free cash flow in that. Benjamin Radinsky – Bear Stearns: The last question is your guidance for Q4 was substantially lower than where you actually came in. What would you attribute the greatest variance to? Where was your budge materially different than the actual result?

From a top line perspective Ben, the revenue achievement came from the distribution business and it came from both sides of the border in North America. Our Canadian and our US distribution executed very well and achieved results above our expectations for the quarter. Benjamin Radinsky – Bear Stearns: And, then on the margin side?

Consistent with the revenue comment as well. Benjamin Radinsky – Bear Stearns: I guess where I am trying to go is there a specific acquisition that outperformed, was there something specific that you can contribute it to rather than saying just the business is great.

There really is no outlier that contributed to the revenue or earnings achievements that we had. Again, we have consistent performance through our core business as well as our new business that we added, including the RGC business in Canada, link to support, HiChina and PCW.

The key thing or message that we are trying to get across here is our services and our business model is working very well here and is being recognized by our customers. We received an award during the quarter from CDW, we received an award during the quarter from Sun, we also received an award during the quarter acknowledging our government services. All the initiatives that we have been working on are starting to bear fruit.

The next question is from Brian Alexander from Raymond James.

I just have one clarification and a few questions so on the Q1 guidance if I hear you correctly the entire delta in terms of the sequential decline being below normal historical patterns is new seasonality driven by some of the acquisitions you have made and more exposure to consumer and retail and it is not new to any weakness in demand although you did say you are seeing signs of weakness, so I am just trying figure out whether you factored into your guidance the weakness that you talked about.

I think it is fair to say that in your question there is more weight on the seasonality aspect of that statement but we are always cognizant of the market place.

On that change in demand pattern that you characterize Dennis. Can you just give us a sense of when you started to see that? Is it across product lines and verticals or is it concentrated in any particular area?

I am sorry Brian was that a linearity question for Q4 or are we talking about Q1?

Just in general when you say that demand patterns have softened a little bit I am just wondering when you started to see that?

I am not exacting that demand patterns have softened I think you are referring back to the first question about the SMD marketplace.

Yes demand patterns within the SMD sector.

Again Bob noted on our call in the last quarter Q3 we did see some indications of that and that continued through Q4 but again it is just a lower growth pattern I am not suggesting a weakness in SMD.

If we switch years to the full year growing ETS by 15% and more implies that you are going to do or hope to do $2.22 cents or higher than that which is well above consensus. If we drill in to that 15% ETS growth can you just try and help us prioritize how much of your growth would come from your core distribution business and how much would come from your specialty business distribution, i.e. TST and how much do you think will come from BPO, if you are not going to quantify it then maybe just help us think about maybe where you think the most meaningful growth will come.

I am not going to break down the growth [inaudible] those categories necessarily but I can say that each one those categories is contributing to the growth as Thomas mentioned earlier in one of his responses our core business sis growing nicely our TST business is growing nicely and we continue to get solid benefits from our acquisitions and on top of that our Canadian business is growing nicely as well.

The only thing that I would like to add to that about Brian is as we talk about the model before again in addition to just the revenue opportunities that we have we are seeing good margin expansion which we expect to continue to see and so as we look out over the whole fiscal year 2008 we would expect to see a substantially nicer operating margin. Again not just similar to what we are experiencing in Q4 of 2007.

But if the likelihood of a meaningfully slower US IT environment materializes where industry growth instead of 5% to 7% drops down to lower digits. It sounds like you’re still very confident you can grow EPS 15% so I’m just trying to understand is there a base revenue growth that you would need to still maintain that confidence. In other words if industry growth dropped to 1 or 2% it sounds like you’re still confident you could drive that level of EPS growth and I’m not sure how that would materialize.

Of course I’m not going to you a minimal growth rate that we expect to incur in order to achieve our goals. I want to bring you back to the comment that Dennis said which is we’re committed to driving the results that we described to you. We have a history of growing at or above the rate of the distribution channel in the market overall. You can expect Synnex to continue to do that responsibly but the reason that we’re giving you guidance not so much on a top line basis but on a EPS basis and an ROIC basis is because we’re trying to bring your attention to where our focus is and we’re committed to profitable revenue growth, we’re committed to growing our EPS and we’re committed to growing ROIC. Those are our top priorities. Male Just a final clarification on that 15% target. I assume that does not include any future acquisitions that you haven’t already announced?

That’s correct. That does not include any future acquisitions.

(Operator Instructions) There are no further questions

Great. We’ll go ahead and conclude our conference call today. Thank you for joining our fourth quarter earnings conference call. We will have an instant replay of this call available for two weeks beginning today at approximately 5:00 pm pacific time through January 24, 2008 and as always should you have any follow up questions both Thomas and I are available to take your call. Thank you.

Ladies and gentlemen thank you for participating in today’s conference. This concludes the presentation. You may disconnect your lines.