Deirdre Skolfield - Director, Investor Relations Kevin Murai - President and CEO Dennis Polk - Chief Operating Officer Marshall Witt - Chief Financial Officer Chris Caldwell - EVP and President of Concentrix Corporation.

Matt Sheerin - Stifel Kevin McVeigh - Macquarie Louis Miscioscia - CLSA Jim Suva - Citi Brian Alexander - Raymond James Osten Bernardez - Cross Research David Ryzhik - Brean Capital Rich Kugele - Needham & Company.

Good afternoon. My name is Gabrielle and I will be your conference operator today. At this time, I would like to welcome everyone to the SYNNEX 2014 Fourth Quarter Earnings Conference Call. [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 Deirdre Skolfield, Director of Investor Relations at SYNNEX Corporation. Ms. Skolfield, you may begin your conference..

Thank you, Gabrielle. Good afternoon and welcome to the SYNNEX Corporation fiscal 2014 fourth quarter and year-end conference call for the period ended November 30, 2014. 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’ll hear today will consist of forward-looking statements, including without limitation those regarding revenue, net income, EPS, EBITDA, expenses, tax rate, ROIC, cash flows, growth, our ability to compete, vertical focus, demand in shareholder value.

Actual results or trends could differ materially from our forecast. For more information, please refer to the risk factors discussed in our Form 10-Q for the fiscal 2014 third quarter and our Form 8-K filed with the SEC today along with the associated press release.

We assume no obligation to update any forward-looking statements, which speak as of their respective date. Also during this call, we will reference certain non-GAAP financial information. Today’s earnings release and the related Form 8-K available on our website at www.synnex.com present the reconciliation between our non-GAAP and GAAP reporting.

This conference call is the property of SYNNEX Corporation and may not be recorded or rebroadcast without our specific written permission. Now, I’d like to turn the call over to Marshall for an update on our financial performance.

Marshall?.

depreciation expense was $11.8 million; amortization expense was $16.7 million; HP at approximately 24% of sales, down from 29% a year ago, was the only vendor accounting for more than 10% of sales. The percentage decrease was the effect of the IBM CRM acquisition and other mix changes. HP revenue grew year-over-year.

Capital expenditure for the quarter was approximately $20.1 million, which was primarily related to Concentrix facility expansion due to business growth. Annualized ROIC in Q4 of 2014 was 9.5%, including the impact of our acquisition-related expenses. Trailing fourth quarter ROIC was 8.3%, including the impact of our acquisition-related expenses.

Excluding the impact of one-time acquisition and integration expenses and amortization, the current fiscal quarter’s trailing ROIC was 10.7%.

Preliminary cash flow generated from operations was approximately $50 million for the fourth quarter due to positive cash flow generated from Concentrix and efficient Technology Solutions’ working capital management. For fiscal 2014, cash flow used in operations was $231 million.

Strong growth in Technology Solutions and funding Concentrix working capital requirements during the first half of 2014 resulted in a net outflow of cash. We intend to utilize CapEx of cash to invest in organic and strategic growth, pay down debt and return a percentage of excess cash to shareholders via dividends and share repurchases.

As described in our press release, the Board of Directors approved a regular quarterly cash dividend of $12.05 per common share to be paid on January 30, 2015 to stockholders of record as of the close of business on January 16, 2015. Now, moving to our first quarter 2015 expectations.

We expect revenue to be in the range of $3.375 billion to $3.475 billion. For non-GAAP net income, the forecast is expected to be in the range of $59.8 million to $61.8 million. Non-GAAP diluted EPS is anticipated to be in the range of $1.49 to a $1.54.

The non-GAAP diluted net income and non-GAAP EPS guidance excludes acquisition and integration-related expenses and the after-tax cost of approximately $8.7 million, or $0.22 per share related to amortization of intangibles. Weighted average shares estimated for diluted EPS are 39.5 million.

Please note that these statements of Q1 expectations are forward-looking and actual results may differ materially. I will now turn the call over to Kevin Murai, President and Chief Executive Officer for his perspective on the business and our quarterly results.

Kevin?.

Thank you, Marshall and good afternoon everyone. Thank you for joining our call today. I’m pleased to report a strong finish to the year and I’m thrilled with the accomplishments and results the entire SYNNEX team delivered in 2014. We have a strong track record of delivering excellent results quarter after quarter.

But equally important, we are realizing the benefits of our business strategy. I’m very proud of these headlines for 2014. Our financial performance was exceptional. Revenue increased 28% to $13.8 billion. Non-GAAP net income increased 48% to $242 million. Non-GAAP earnings per share increased 44% to $6.16.

Non-GAAP trailing four quarter ROIC increased to 10.7%. We also announced the initiation of a quarterly dividend program in September. The acquisition of the IBM CRM business has been a huge success and we are on track to exceed our first 12-month EBITDA target of $120 million.

The Technology Solutions division grew sales of almost 20%, with operating income growing 29%. So, we have clearly entered a new era in our business profile and financial results.

The acquisition of the IBM CRM business has transformed our Concentrix business into a global leader in customer care solutions and is now a significant generator of cash for our company.

As we complete the final stages of our integration work, our focus has shifted to building our sales pipeline, with an emphasis on higher value work in key industry verticals such as healthcare, insurance, banking and financial services and technology.

And our goals are clear to grow the business at or above market rate and enhance the quality of the business to drive improved operating margins through higher value add engagements and incremental efficiencies. And as we successfully integrated the IBM CRM business, we maintained our focus on the Technology Solutions business.

Last year, we grew faster than the overall market with all of our geographies, the U.S., Canada and Japan contributing. This growth came from both market share gains in core segments, as well as from emerging businesses in the communications, cloud and software spaces.

Our strategy of differentiating ourselves through deep technical and vertical industry knowledge is reaping benefit.

So while the results we delivered in 2014 were partly aided by market dynamics such as Windows XP and the support and the consumption tax increase in Japan, we remain excited about our profitable growth opportunities in 2015 and beyond.

I will now provide some highlights on our Q4 results before turning the call over to Chris Caldwell who will provide additional color on the Concentrix business. On a consolidated basis, we delivered strong growth of 25% and even stronger growth of 27% in constant currency.

Our adjusted operating income increased 62% to $125 million or 3.27% of revenues, a 74 basis point improvement and our non-GAAP fourth quarter ROIC was strong at almost 11%. In Technology Solutions, the U.S. led our regions with growth, well into the double-digits, aided by continued strong market demand.

Within the commercial space, our growth was broad based, with notable strengths in networking, security, mobile devices and PCs. The SMB market and public sector, including federal were also noteworthy.

The holiday season was more robust this year and our New Age Electronics business benefited by having the products that were in demand, such as tablets, game consoles and I/O products. As I mentioned last quarter, the majority of the Beats business has been moving to Apple direct. And going forward, we expect this business to be much smaller.

Our high solutions business was also a notable contributor, as we continued to capture growth in the ongoing buildout of the large scale data center market. In our Canadian business, Q4 sales were slightly better than a year ago and we believe we grew faster than the market.

And finally in our Japanese business, our sales were flat from a year ago despite the fact the Japanese economy fell back into recession. More importantly in both Canada and Japan, we achieved good growth and profitability year-on-year, which helped to drive 31% increase in operating income for the Technology Solutions division.

Now turning to the Concentrix segment, Concentrix delivered $342 million in sales, in line with our expectation. Profitability was solid with a non-GAAP operating income margin of 8.52%. As I mentioned earlier, our integration is well on track and our focus in 2015 is enhancing the sales pipeline in capturing incremental efficiencies.

We believe our success in signing new logos, baseline expansion and renewal will create sales and profit opportunity this year and beyond. For more color on the Concentrix business, I’ll now turn the call over to Chris Caldwell..

Thank you, Kevin. We continue to be extremely pleased with the execution of our Concentrix business.

We believe the strong platform we have built competes very, very effectively with any large global player and we continue to receive a very positive market response to our nimble clients and the past three months include Concentrix and Cisco winning top honors at the recent Contact Center World Global Best conference for outstanding partnership on our distinctive engagement and long-term relationship.

Gartner positioning Concentrix as a leader in its 2014 Magic Quadrant for North American Life Insurance Policy Administration Systems, due in part to our investments we’re making in insurance vertical that helps our clients respond effectively to rapidly changing markets.

And finally winning Canada’s -- China’s prestigious 2014 Golden Sound Award for best outsourcing customer contact center in the category of technical support. With our execution and key wins within our 10 verticals, this year our team passed the 55,000 mark.

It’s important to note however, that some of this increase was driven by volume peaking into December-January timeframe for some of our clients that have seasonality to their business.

A year into this new Concentrix, now I’m happy to say that the commercial terms for new contracts, expansion and renewals of existing contracts have not materially changed, demonstrating the value we deliver to our clients.

In our last call, I had mentioned this quarter our goal was to switch the remaining backend systems from IBM to Concentrix, as we finish off the integration of the IBM CRM business. As a reminder, the client facing systems, facilities and staff were seamlessly integrated day one.

I’m happy to say, we completed the remaining switch early in December and are now in the process of wrapping up the remaining small items this quarter, which is on plan. We do have duplicate expenses as mentioned during this time that will fade over the next three to four months.

Well, a portion of the savings are being reinvested in sales, marketing and subject matter experts to continue growing our key verticals, the remaining savings continue to support our goal of expanding our operating margins. With the integration work largely behind us, we’re focused on optimizing and continuing to grow our business.

From the sales perspective, within our 10 verticals, we are especially focused on healthcare, banking and insurance and technology as Kevin had mentioned. These represent areas of superior growth opportunities and margin performance, requiring our technology platforms, analytics, as well as high value processes.

You’ll see us make additional investments in these verticals in terms of staffing and infrastructure as discussed.

What we’re seeing driving continued demands are really around industry consolidation with client seeking service providers, who can take on additionally complex tasks and drive results and efficiencies on a consistent and measurable global delivery scale.

Our ability is to demonstrate cost efficiencies around managing entire end-to-end processes, driving a high value and lower cost of operation than the client can achieve internally and finally, our culture of being an extended partner to our clients, investing in their outcomes and success.

The sale cycle of our target verticals is a little longer and the upfront costs are little heavier on these deals where we're taking over an entire process from start to finish. But the end result has the opportunity for our higher financial return, once we go into full production. It’s been a very exciting time in Concentrix.

We enter 2015 with a very robust portfolio of world-class clients under contract and a strong pipeline of new opportunities to grow. We feel confident that we can grow at market while increasing our operating margin this year. I’d like to thank our team members who have worked so diligently and have been so committed to achieving these great results.

We’re all focused on building a stronger, bigger and better Concentrix for all of our stakeholders. I’ll now turn the call back to Kevin..

Thank you, Chris. And thank you for your leadership throughout the integration process. Now moving to our few on the current market environment and our first quarter guidance. In the Technology Solutions business, we expect to achieve continued strong sales and profit performance.

Although we will not experience the same benefits we had a year ago with the Windows XP end of support. We have increased our line card with key vendors such as Dell, Lenovo X series and Vaio and the underlying IT demand in the U.S. continues to be strong.

We anticipate a more muted demand environment in Canada and Japan and also expect foreign exchange headwinds in our translation to U.S. dollars. We have a proud history of performing better than the overall market and we expect to continue to do so.

We believe that we have the superior business strategy and we are invested in the right growth areas and that we have the right partners in both our vendor and customer portfolio. And we have a can do attitude deeply and still and what I believe, are the best people in the business.

So regardless of what markets we face, we will set our goal high and strive to exceed them. In the Concentrix business, we expect our momentum to continue with strong performance in revenue and profitability.

On a consolidated basis, it’s important to note that the seasonality of our business is changing, driven by acquisitions, shifts in the markets we serve, the success of our high solutions business and a seasonally stronger Q4 and Q1 for Concentrix. So in closing, we are very proud with what we’ve accomplished and are excited about our future.

These are exciting changes. There are exciting changes afoot in both the technology and services industries. And with our investments and strong execution, we believe, we can capture much of these opportunities, which will result in increased shareholder value through cash generation, margin expansion and EPS growth.

This is an exciting time for SYNNEX and I would like to acknowledge the hard work and dedication of all of our associates around the world on both our Technology Solutions and Concentrix businesses. I also want to thank our vendors, customers and shareholders for their continued partnership and support.

And with that, let's turn the call over to the operator for questions..

Thank you. [Operator Instructions] Our first question will come from Matt Sheerin with Stifel. Your line is now open..

Yes. Thanks and good afternoon.

So first question Kevin, regarding your guidance and talking about relative to softer growth rates and headwinds in both Japan and Canada, could you elaborate on that? And how much of that is concern on FX versus overall demand in macro issues in those markets?.

So, slightly different stories in both countries, Matt. First of all, just wanted to reiterate the overall demand in the U.S. is very strong. In Canada, we do see a softer overall demand environment and then that combined with a very strong U.S. dollar will create some decline just from the U.S. translation back to U.S. dollars perspective.

In Japan, as you're probably aware, the country went back into recession just a few months ago and we are seeing that in terms of a softer overall demand. Now we perform very, very well on our Q4 and believe we actually made significant gains in market share. So we believe, we’ll continue to do so.

However, that in combination with a very, very strong growth from a year ago, driven both by Windows XP expiration or end of support, as well as the increase in consumption tax, add into that again, FX headwinds for Japan Yen translation back to U.S. dollars just creates little bit more softness in our Japanese business too.

But overall, when you kind of look at the overall technology market and the environment translate that back to our business. We actually do see what I would consider to be normal seasonal change from Q4 to Q1, once you kind of navigate through all those different factors..

Okay. And on the Concentrix business, you are talking about -- I know there is 10% EBITDA margin target and you are running out, I guess EBIT margins of 8%.

Just walk us through the timing of getting to those targets, given that it also sounds like you are investing and building out some of the capabilities of that business, to grow the business?.

Hi, Matt. It’s Chris. We haven’t set sort of a firm target externally for when we are going to hit double-digit op income. But clearly that’s what we are striving for as we go forward and as we get rid of the duplicate costs and get some of our larger contracts into production. We see it as being in the horizon..

And how far -- sort of where are we in terms of the duplicative costs cut going away? I know most of the heavy lifting was last quarter?.

So, most of the heavy lifting was last quarter, although we have some of the tail end of it this quarter. As we talked about in, sort of prepared remarks, it’s really over the next three or four months that we will see that wind down to relatively nothing..

Okay.

Operator, next question?.

Thank you..

Our next question will come from Kevin McVeigh with Macquarie. Your line is now open..

Great. Thanks. Hey. Nice job.

If you could give us a sense just relative to expectations real strong margins in both businesses? Has any of that become the some of the early synergies you are seeing as you cross sell, or is it just kind of, just any color on that would be helpful?.

Yeah. Really, the strong performance in profitability was driven by the success of each independent business. On the distribution side and Technology Solutions was strong topline growth. We are able to carry a lot of that, our gross margin down to our bottom line. That in addition to continued movement on business mix itself.

And in the Concentrix business, just very, very strong performance, being able to leverage some seasonal growth opportunity and drive more efficiency in that business as well. And that in addition to the on boarding of business in some of this higher margin vertical segments there, Chris, had spoke to before..

Got it. And then just real quick on Concentrix.

How -- just kind of the renewal conversations gone as part of SYNNEX now as opposed to IBM? And are you seeing any vendor consolidation that you’ve been able to leverage as a result of the acquisition?.

So, Kevin, it is Chris..

Hey Chris..

The first conversation, the renewal conversations have gone incredibly positively and frankly no surprises. Clearly, the clients have had almost a year to interact with us and see how we’ve executed for them and have seen a lot of value we brought to the table and seen us invest pretty significantly in supporting their program.

So it’s been very positive experience from a renewals perspective. In terms of, sort of the other question regards to positive trends, we are seeing sort of additional growth as part of the renewal conversations, which is also helping us as we go..

Super. I’ll get back in the queue. Thanks..

Thank you..

Our next question will come from Louis Miscioscia with CLSA. Your line is now open..

Okay. Thanks. When we look at or you're looking at the U.S. business, obviously you mentioned it was very strong.

Any additional color you could possibly provide us? How much do you think is market share gain and how much do you think is just the end demand growth that you are seeing in the different sectors, SMB, public sector, commercial and so on?.

So, Lou, we believe it was a combination of both. As I said, the underlying demand in the U.S. is strong. As you probably know, the overall retail business through holiday buying season was better than a year ago. We were able to benefit from that by being in the right categories, having the right product. In addition to that, SMB continued to be strong.

And then on the commercial side of the business, our overall public sector did very well but we’ve also seen a return to growth in the federal business as well. So combining all three together, plus in addition to that, what we believe to be incremental market share gains really drove a good result for us..

Okay.

Are you getting any visibility on Microsoft’s Window server that’s going to expire in July 14th? And also you didn’t mentioned storage, maybe just wrap us too together if you could in that, was that also under good category or did you see slowing there?.

So, starting off with Windows Server refresh -- yeah, a lot of discussion, a lot of activity going on in terms of that. We are starting to see some of that business started to flow through. I believe the larger portion of that benefit is going to happen in the first half of this year and perhaps even trail along a little bit longer than that.

So there is good activity happening there. And in particular for Microsoft partners on the hardware side, certainly many of them lay programs in place with us on for their educating and also providing incremental programs to help drive that refresh.

The second part of your question again, Lou, was…?.

Storage..

So, storage -- so our footprint in storage is not as broad on the enterprise side. However, we did see growth in storage over the past quarter as well..

Okay. Great. I’ll get back in the queue and good luck on the New Year..

Thank you..

Operator?.

Our next question will come from Jim Suva with Citi. Your line is open..

Thank you. And congratulations to your team at SYNNEX and your outlook. One thing on the conference call that I wanted to follow-up for, was regarding the purchase price of the IBM CRM business. It went down and I think I heard you right to say $418 million versus $505 million or maybe I got the numbers wrong or mixed up.

But that looks like It’s about $87 million less expense over 17%, which is great. Don’t get me wrong.

But the question is why the delta, were there a cash collection of timing or there is some contracts that didn’t come in that were supposed to, or what happened to the original purchase prices versus where it looks like it’s ending out to be?.

Hey, Jim. This is Marshall. It’s part of the $505 million. There is also $100 million of net tangible assets that were part of the deal. In that reconciliation process, there were just certain assets that weren’t need and didn’t come over. So it was primarily just reconciliation true-ups to reflect the reduction in the purchase price..

And, Jim, just add on to it. It’s Chris. All the clients came over that were expected to come over. And really the health of the business of what we thought we were buying to what we bought was exactly as expected and frankly turned out to be a little better from what we moved across..

Great.

And my quick follow-up is now that you have some time with this under your watch as far as reigning operations, I would assume you’ve had some contract renewals coming up, as well as visibility on future contract renewals and then this business is pretty common for contracts to be renewed before the actual ending date, to ink them for another year or two before you actually hit the 12 o’ clock hour.

Can you let us know about some of those occasions, not necessarily the customer but more, have you been able to re-extend them? Have you extend them on to similar or favorable terms, or have you basically walked away and I think some -- because I know in the past, you said that there was some wind down of the business that we should think about and have those occurred? Thank you..

Thank you, Jim. So to answer your first question, I mean, clearly, we’ve had renewals since the businesses come across and as mentioned earlier, we frankly renewed them as like-for-like material commercial terms and in fact have seen some price increasing on some of them. So those have all done well.

We haven’t walked away from any business that we didn’t want to and frankly have seen good growth from it. And to follow up, Kevin had asked about vendor consolidation as part of this renewal process.

We haven’t been able to take share from some of the other vendors within this space and that sometimes is essentially done during renewals, when we sit down and look at what we can do for larger parts of the business. So it’s been quite favorable through the course of the year when we looked at the contracts coming up..

Thanks and congratulations to you and your team at SYNNEX..

Thank you..

Our next question will come from Brian Alexander with Raymond James. Your line is now open..

All right, thanks and nice results. Chris, I wanted to ask a question about profitability and how should we think about the pace of margin expansion in 2015 from where you sit today. You guys have been around $27 million to $29 million of operating income in the last three quarters.

But once we get passed the final stages of the integration this quarter, do you see a steady progression higher in terms of margins or is there a step function change that will occur post integration and post reinvestment period.

If you could just kind of give us a sense for timing and magnitude and ultimately where you see the business longer term over the next few years?.

Okay, Brian. I mean, the reality is that we are going to see -- our goal is obviously continued progression. There’s not significant step change that’s going to happen where you are going to see a large jump because we are investing in the business both in people and technology as we kind of build out our surface offerings for it.

But based on our verticals that we are going after and the success we are having in those verticals, they tend to provide superior financial returns and that’s really sort of a catalyst for driving what we see as margin expansion. And obviously as we go forward, we’ll hopefully continue to see more leverage within our cost structure.

As people had mentioned, we brought over the IBM business. We had not done any significant changes to that business because our goal was stability for our client base and now we’ll start to be able to see some leverage through that as we add more sales onto the top line.

I don’t really want to talk about guidance from a long-term perspective but clearly, we’ve invested in this area because we see the opportunities and we see a lot of vendor consolidation that’s happening in the marketplace and lot of transactions that are happening in the marketplace.

And with our strength of how well we’ve done this integration, we are frankly a safe port in the storm from any other clients who are similarly facing those challenges and so our expectation is that we can pick up some of that additional business..

So just to make sure we don’t get ahead of ourselves, the 10% margin target, is that something that you think is achievable this year or is that something that’s really more next year as you reinvest in the business.

And I just have one question on Technology Solutions?.

Yeah, Brian, I wouldn’t really comment on that. We continue to, kind of, march forward towards the goal but haven’t put a public stake in the sand..

Okay. And then Kevin, the tougher comparisons that you have this year and the issues you cited with currency and weakness in Canada and Japan. Your guidance for Q1 looks reasonably good. I think TS has expected to grow around 7%.

What’s your confidence level in growing above market in TS as we move beyond the first quarter and what specifically are the key drivers of that above market growth this year? What has you excited in terms of product categories or divisions like high-above New Age? Thanks..

Yeah. And Brian, I think in the last quarter or when I saw you last, we had talked about the inherent headwinds in Q1 to Q2 with tough comparison. But as I said both in my script as well as when we spoke, we set bars high for ourselves.

We -- it's a we do live in a what have you done for me lately world and even though we take credit for the good things that we have accomplished. We are fully focused on what we’re doing today and what we’re doing going forward. So you’re right. Our guidance does -- is a net growth over a year ago in TS and we fully expect to be able to get there.

Part of that is through market share gains but also we’ve enhanced our line card with some significant new business, some with new partners and some with exciting partners with net new categories that we believe are going to help us get there quite a bit. Plus there are number of emerging categories that we’ve made a lot of investments.

And broadly speaking, it’s around the internet of things, it’s around mobility, it’s around other parts of cloud buildout. But we do believe we’re investing in the right places and with business models that are not necessarily the same as traditional business model.

Our expectation is that we will leave the pack and we will gain incremental share because we have a better business model than the others and really again in those growth areas. So my confidence level is high that we’re going to grow faster than market. And as I said we do set our bars -- our bar high and we do our best to exceed that..

Thank you..

Thanks, Brian..

Our next question will come from Osten Bernardez with Cross Research. Your line is now open..

Hi. Thanks for taking my questions. I guess my first question if I may.

Marshall, would you maybe able to give me some sort of line of sight, as to your view on cash generation for 2015 and after the year, you had with respect to the investments in TS and that Concentrix which were understandable?.

Sure, Osten. Let me first just recap again. For Q4, I’m very proud of the overall positive cash flow we generated and if you think back a year ago, the year-over-year cash flow from the operations improved around a $100 million. Both segments are doing quite well and contributing to that.

So we are looking at Q1 and optimistic about our ability to continue to generate cash flow. But certainly as you know, with our business and how fast we grow, we also know that it takes investment and working capital but it has resulted in our profitable results and returns on our margin..

Okay..

Operator, next question?.

Our next question will come from David Ryzhik with Brean Capital. Your line is now open..

Hi, guys. Thanks so much for taking the questions. Dave Ryzhik for Ananda Baruah. So based on the commentary around Japan and Canada and potentially seeing PCs perhaps slightly at par ending this year due to a tough compare, what does that mean for mix in Tech Solutions of the ’15, how can we think about that? Thank you..

Yeah. Overall, we continue to manage our mix proactively. Obviously there are shifts that are happening too. I did mention though that in Q4, at least from a SYNNEX perspective, PCs and other devices were actually a strong growth category for us. I don’t want to attribute a lot of that necessarily to the tail end of the Win XP and support.

I think that they are just ongoing and refreshed and in particular with new products on the consumer side as well as the federal business strengthening again and that tends to drive at least for us good growth in the PC shipment overall.

But just in terms of overall mix change for us as well, as we continue to manage our portfolio, we have a significant new partnerships in the enterprise spaces, well both with the expanded Dell relationship as well as with Lenovo XP -- sorry, X series coming on board.

So with that, we do expect to continue to manage our mix more and more into the higher margin tech categories. But again, we do expect ongoing growth for much of the broader line categories as well on particular devices and things that are driven around connectivity in the Internet..

Great. And a quick one if I may. For Marshall, you have the anti-dilutive buyback program in place.

Is there any -- can we expect maybe that to become more than just anti-dilutive, perhaps even taking down share count or you are comfortable with where you are right now?.

David, we’ve got a $100 million three year program that we fully intend to use and its intent and purpose is to be anti-dilutive..

Great. Great. Thank you so much..

Thank you..

Question will come from Rich Kugele with Needham & Company. Your line is now open..

Hi. Good afternoon. I’m sorry for the background noise.

Just wanted Chris, if you could just elaborate on the critical capabilities that the players that are ranked above you today in the Concentrix business, what critical capabilities can you add over the next 12-18 months that can perhaps move you up in the rank? And certainly you’re winning share and doing right by the customers, I’m just interested in some of the features that we can expect?.

So Rich, I think the simplest way of putting is that there is nothing from a capabilities perspective that we frankly, currently lock within the realm of competitiveness. Where we’re looking and continuing to make investments is branching out within those areas.

So for instance, healthcare, insurance, banking financial services, we perform multiple types of processes and task. Some of our competitors perform more of those and have a broader offering and that’s what we’re in the process of building out across it.

But the fundamental, whether it’d be technology, analytics, process discipline, we would rank ourselves as equal with anyone that we compete within that space..

So we should assume that that’s the type of stuff that you can do organically just by investments that you would necessarily need to do M&A to enhance those capabilities?.

So Rich, I mean clearly, we’re doing organically and we’ll continue to do organically. But I would not rule out M&A where acquirer that looks for value. And if we find value in order to buying it faster than building it and it drives the right financial returns and we will certainly look at speeding up the growth by doing that..

Okay.

And just lastly, Marshall, comments on the inventory, are you comfortable with the heading into the seasonally softer period or anything notable in there?.

No. No issues and very comfortable..

Excellent. Great quarter and good outlook, guys. Thank you..

Okay. Thanks, Rich..

Okay. Thank you everyone for joining our call today. This concludes our call. Thank you..

And with that, we conclude today’s conference. Thank you for participating. You may disconnect your lines at this time..