TD SYNNEX Corporation (NYSE:SNX) Q4 2022 Earnings Call Transcript

Rich Hume: Thank you.

Operator: Our next question comes from Matt Sheerin with Stifel.

Matt Sheerin: Thanks, and good morning, everyone. Just a couple of questions for me. One, just on the pricing environment. Last year, we saw price increases across all your hardware product categories, including Advanced Solutions and PCs. We’re hearing about pricing pressure on PCs, particularly as memory and other component costs come through. What’s your take there? And how does that flow through in terms of your top line or any impact on your business?

Rich Hume: Yes, Matt, thanks for the question. So with the overall supply chain profile sort of returning to pre-COVID levels for the PC ecosystem, I would suggest that we’re going to see those dynamics in pricing sort of return to pre-COVID levels. As someone had mentioned earlier, I believe that there’s ample supply in PC. And to the extent there’s shorts, some longs, that’s going to dictate what will happen in the overall pricing environment for that PC ecosystem category, if you will, going forward. My view is, is that there may be some, but a bit more limited pricing activity within Advanced Solutions when compared to last year. But I would suspect that by the time we get to the mid of the year that those dynamics would return to normal.

Just one last point of note. In Q4, on a year-to-year basis, we had commented that the Endpoint Solutions segment was marginally down. I would say that with the backdrop of that, actually, ASPs were up in both the Americas as well as Europe, even in Q4. But I think there’s a point in time where that lapse and then we’re kind of over it. I would speculate that maybe there’s still some stability in ASP in the first quarter, but we get back to traditional dynamics after that would be my crystal ball.

Matt Sheerin: Okay. Thank you. And then regarding the cost synergies, you’re ahead of plan. You’ve got $60 million left. How should we think about how that flows through your P&L this year? Is this more back-end loaded because of the ERP implementation?

Marshall Witt: That’s correct. The ERP is expected to complete in the second half. And then with that comes two elements. One is the system-related costs that should go away. And then two is the duplicative costs around supporting two systems, and that efficiency should also play through primarily in the second half of ’23.

Matt Sheerin: Okay. Thank you.

Marshall Witt: Thank you.

Operator: There are no further questions at this time, which concludes today’s call. You may now disconnect.