QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
The |
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Class | Outstanding as of March 31, 2022 | |||||||
Common Stock, $0.0001 par value |
Page | ||||||||
PART I | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 6. | ||||||||
February 28, 2022 | November 30, 2021 | ||||||||||
(unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Deferred tax assets | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Current portion of long-term debt | |||||||||||
Accrued compensation and benefits | |||||||||||
Other accrued liabilities | |||||||||||
Income taxes payable | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net | |||||||||||
Other long-term liabilities | |||||||||||
Deferred tax liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 14) | |||||||||||
Redeemable non-controlling interest | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Treasury stock, | ( | ( | |||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities, redeemable non-controlling interest, and stockholders’ equity | $ | $ |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
Revenue | $ | $ | |||||||||
Cost of revenue | |||||||||||
Gross profit | |||||||||||
Selling, general and administrative expenses | |||||||||||
Operating income | |||||||||||
Interest expense and finance charges, net | |||||||||||
Other expense (income), net | ( | ||||||||||
Income before income taxes | |||||||||||
Provision for income taxes | |||||||||||
Net income before non-controlling interest | |||||||||||
Less: Net income attributable to non-controlling interest | |||||||||||
Net income attributable to Concentrix Corporation | $ | $ | |||||||||
Earnings per common share: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Weighted-average common shares outstanding | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
Net income before non-controlling interest | $ | $ | |||||||||
Other comprehensive loss: | |||||||||||
Unrealized gains (losses) of defined benefit plans, net of taxes of $ | ( | ||||||||||
Unrealized losses on cash flow hedges during the period, net of taxes of $ | ( | ( | |||||||||
Reclassification of net gains on cash flow hedges to net income, net of taxes of $ | ( | ( | |||||||||
Total change in unrealized gains (losses) on cash flow hedges, net of taxes | ( | ( | |||||||||
Foreign currency translation adjustments, net of taxes of $ | ( | ||||||||||
Other comprehensive loss | ( | ( | |||||||||
Comprehensive income | |||||||||||
Less: Comprehensive income attributable to non-controlling interests | |||||||||||
Comprehensive income attributable to Concentrix Corporation | $ | $ |
Concentrix Corporation Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock | Treasury stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable non-controlling interest | Shares | Amount | Additional paid-in capital | Shares | Amount | Retained earnings | Former parent company investment | Accumulated other comprehensive loss | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, November 30, 2020 | $ | — | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of net former parent investment in Concentrix | — | — | — | — | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock at separation and spin-off | — | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation activity | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock for tax withholdings on equity awards | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, February 28, 2021 | $ | — | $ | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances, November 30, 2021 | $ | $ | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity awards issued as acquisition purchase consideration | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of non-controlling interest in subsidiary | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interest | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation activity | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock for tax withholdings on equity awards | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, February 28, 2022 | $ | $ | $ | $ | ( | $ | $ | $ | ( | $ |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income before non-controlling interest | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Non-cash share-based compensation expense | |||||||||||
Provision for doubtful accounts | ( | ||||||||||
Deferred income taxes | ( | ( | |||||||||
Unrealized foreign exchange loss | |||||||||||
Other | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, net | ( | ( | |||||||||
Payable to former parent | ( | ||||||||||
Accounts payable | ( | ( | |||||||||
Other operating assets and liabilities | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Acquisitions of business, net of cash acquired | ( | ||||||||||
Other investments | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from the Credit Facility - Term Loan | |||||||||||
Repayments of the Credit Facility - Prior Term Loan | ( | ( | |||||||||
Proceeds from the Securitization Facility | |||||||||||
Repayments of the Securitization Facility | ( | ( | |||||||||
Cash paid for debt issuance costs | ( | ||||||||||
Proceeds from exercise of stock options | |||||||||||
Repurchase of common stock for tax withholdings on equity awards | ( | ( | |||||||||
Dividends paid | ( | ||||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ( | |||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at beginning of year | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Supplemental disclosure of non-cash investing activities: | |||||||||||
Accrued costs for property and equipment purchases | $ | $ |
Cash consideration for PK stock (1) | $ | ||||
Cash consideration for PK vested equity awards (2) | |||||
Cash consideration for repayment of PK debt, including accrued interest (3) | |||||
Cash consideration for transaction expenses of PK (4) | |||||
Total cash consideration | |||||
Non-cash equity consideration for conversion of PK equity awards (5) | |||||
Total consideration transferred | |||||
Less: Cash acquired (6) | |||||
Total purchase price consideration | $ |
As of | |||||
December 27, 2021 | |||||
Assets acquired: | |||||
Cash and cash equivalents | $ | ||||
Accounts receivable | |||||
Property and equipment | |||||
Operating lease right-of-use assets | |||||
Identifiable intangible assets | |||||
Goodwill | |||||
Other assets | |||||
Total assets acquired | $ | ||||
Liabilities assumed and non-controlling interest: | |||||
Accounts payable and accrued liabilities | |||||
Operating lease liabilities | |||||
Deferred tax liabilities | |||||
Non-controlling interest | |||||
Total liabilities assumed and non-controlling interest | $ | ||||
Total consideration transferred | $ |
Revenue | $ | ||||
Income before income taxes |
Three Months Ended | |||||||||||
February 28, | |||||||||||
2022 | 2021 | ||||||||||
Revenue | $ | $ | |||||||||
Net income |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
Total share-based compensation | $ | $ | |||||||||
Tax benefit recorded in the provision for income taxes | ( | ( | |||||||||
Effect on net income | $ | $ |
As of | |||||||||||
February 28, 2022 | November 30, 2021 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash included in other current assets | |||||||||||
Cash, cash equivalents and restricted cash | $ | $ |
As of | |||||||||||
February 28, 2022 | November 30, 2021 | ||||||||||
Billed accounts receivable | $ | $ | |||||||||
Unbilled accounts receivable | |||||||||||
Less: Allowance for doubtful accounts | ( | ( | |||||||||
Accounts receivable, net | $ | $ |
Three Months Ended | |||||||||||
February 28, | |||||||||||
2022 | 2021 | ||||||||||
Balance at beginning of period | $ | $ | |||||||||
Net additions (reductions) | ( | ||||||||||
Write-offs and reclassifications | ( | ( | |||||||||
Balance at end of period | $ | $ |
As of | |||||||||||
February 28, 2022 | November 30, 2021 | ||||||||||
Land | $ | $ | |||||||||
Equipment, computers and software | |||||||||||
Furniture and fixtures | |||||||||||
Buildings, building improvements and leasehold improvements | |||||||||||
Construction-in-progress | |||||||||||
Total property and equipment, gross | $ | $ | |||||||||
Less: Accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
As of | |||||||||||
February 28, 2022 | November 30, 2021 | ||||||||||
Property and equipment, net: | |||||||||||
United States | $ | $ | |||||||||
Philippines | |||||||||||
India | |||||||||||
Others | |||||||||||
Total | $ | $ |
Balance as of November 30, 2021 | $ | ||||
Acquisition | |||||
Foreign exchange translation | ( | ||||
Balance as of February 28, 2022 | $ |
As of February 28, 2022 | As of November 30, 2021 | ||||||||||||||||||||||||||||||||||
Gross amounts | Accumulated amortization | Net amounts | Gross amounts | Accumulated amortization | Net amounts | ||||||||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Technology | ( | ( | |||||||||||||||||||||||||||||||||
Trade names | ( | ( | |||||||||||||||||||||||||||||||||
Non-compete agreements | ( | ||||||||||||||||||||||||||||||||||
$ | $ | ( | $ | $ | $ | ( | $ |
Fiscal years ending November 30, | |||||
2022 (remaining nine months) | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total | $ |
Three Months Ended February 28, 2022 and 2021 | |||||||||||||||||||||||
Unrecognized gains (losses) on defined benefit plan, net of taxes | Unrealized gains (losses) on cash flow hedges, net of taxes | Foreign currency translation adjustments, net of taxes | Total | ||||||||||||||||||||
Balance, November 30, 2020 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Other comprehensive income (loss) before reclassification | ( | ( | ( | ||||||||||||||||||||
Reclassification of gains from other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Balances at February 28, 2021 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Balance, November 30, 2021 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassification | ( | ( | ( | ||||||||||||||||||||
Reclassification of gains from other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Balances at February 28, 2022 | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended | |||||
February 28, 2022 and 2021 | |||||
Restructuring costs | Facility and exit costs | ||||
Accrued balance as of November 30, 2020 | $ | ||||
Cash payments | ( | ||||
Accrued balance as of February 28, 2021 | $ | ||||
Accrued balance as of November 30, 2021 | $ | ||||
Additional accrual during the period | |||||
Cash payments | ( | ||||
Accrued balance as of February 28, 2022 | $ |
Value as of | ||||||||||||||
Balance Sheet Line Item | February 28, 2022 | November 30, 2021 | ||||||||||||
Derivative instruments not designated as hedging instruments: | ||||||||||||||
Foreign exchange forward contracts (notional value) | $ | $ | ||||||||||||
Other current assets | ||||||||||||||
Other accrued liabilities | ||||||||||||||
Derivative instruments designated as cash flow hedges: | ||||||||||||||
Foreign exchange forward contracts (notional value) | $ | $ | ||||||||||||
Other current assets and other assets | ||||||||||||||
Other accrued liabilities and other long-term liabilities |
Three Months Ended | |||||||||||||||||
Locations of gain (loss) in statement of operations | February 28, 2022 | February 28, 2021 | |||||||||||||||
Derivative instruments designated as cash flow hedges | |||||||||||||||||
Losses recognized in OCI: | |||||||||||||||||
Foreign exchange forward contracts | $ | ( | $ | ( | |||||||||||||
Gains reclassified from AOCI into income: | |||||||||||||||||
Foreign exchange forward contracts | |||||||||||||||||
Gain reclassified from AOCI into income | Cost of revenue for services | $ | $ | ||||||||||||||
Gain reclassified from AOCI into income | Selling, general and administrative expenses | ||||||||||||||||
Total | $ | $ | |||||||||||||||
Derivative instruments not designated as hedging instruments: | |||||||||||||||||
Loss recognized from foreign exchange forward contracts, net(1) | Other expense (income), net | $ | ( | $ | ( |
As of February 28, 2022 | As of November 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurement category | Fair value measurement category | ||||||||||||||||||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Foreign government bond | |||||||||||||||||||||||||||||||||||||||||||||||
Forward foreign currency exchange contracts | |||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Forward foreign currency exchange contracts | $ | $ | $ | $ | $ | $ | $ | $ |
As of | |||||||||||
February 28, 2022 | November 30, 2021 | ||||||||||
Credit Facility - current portion of Term Loan component | $ | $ | |||||||||
Current portion of long term debt | |||||||||||
Credit Facility - Term Loan component | $ | $ | — | ||||||||
Credit Facility - Prior Term Loan component | — | ||||||||||
Securitization Facility | |||||||||||
Long-term debt, before unamortized debt discount and issuance costs | |||||||||||
Less: unamortized debt discount and issuance costs | ( | ( | |||||||||
Long-term debt, net | $ | $ |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
Basic earnings per common share: | |||||||||||
Net income | $ | $ | |||||||||
Less: net income allocated to participating securities(1) | ( | ( | |||||||||
Net income attributable to common stockholders | $ | $ | |||||||||
Weighted-average number of common shares - basic | |||||||||||
Basic earnings per common share | $ | $ | |||||||||
Diluted earnings per common share: | |||||||||||
Net income | $ | $ | |||||||||
Less: net income allocated to participating securities(1) | ( | ( | |||||||||
Net income attributable to common stockholders | $ | $ | |||||||||
Weighted-average number of common shares - basic | |||||||||||
Effect of dilutive securities: | |||||||||||
Stock options and restricted stock units | |||||||||||
Weighted-average number of common shares - diluted | |||||||||||
Diluted earnings per common share | $ | $ |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
Industry vertical: | |||||||||||
Technology and consumer electronics | $ | $ | |||||||||
Communications and media | |||||||||||
Retail, travel and ecommerce | |||||||||||
Banking, financial services and insurance | |||||||||||
Healthcare | |||||||||||
Other | |||||||||||
Total | $ | $ |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
Operating lease cost | $ | $ | |||||||||
Short-term lease cost | |||||||||||
Variable lease cost | |||||||||||
Sublease income | ( | ( | |||||||||
Total operating lease cost | $ | $ |
Fiscal Years Ending November 30, | |||||
2022 (remaining nine months) | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total payments | |||||
Less: imputed interest* | |||||
Total present value of lease payments | $ |
As of | ||||||||||||||||||||
February 28, 2022 | November 30, 2021 | |||||||||||||||||||
Operating lease ROU assets | $ | $ | ||||||||||||||||||
Current operating lease liabilities | ||||||||||||||||||||
Non-current operating lease liabilities |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | $ | |||||||||
Non-cash ROU assets obtained in exchange for lease liabilities |
As of | |||||||||||
February 28, 2022 | November 30, 2021 | ||||||||||
Weighted-average remaining lease term (years) | |||||||||||
Weighted-average discount rate | % | % |
Announcement Date | Record Date | Per Share Dividend Amount | Payment Date | ||||||||
September 27, 2021 | October 22, 2021 | $ | November 2, 2021 | ||||||||
January 18, 2022 | January 28, 2022 | $ | February 8, 2022 |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
($ in thousands) | |||||||||||
Revenue | $ | 1,536,052 | $ | 1,353,278 | |||||||
Cost of revenue | 997,918 | 867,228 | |||||||||
Gross profit | 538,134 | 486,050 | |||||||||
Selling, general and administrative expenses | 390,389 | 351,161 | |||||||||
Operating income | 147,745 | 134,889 | |||||||||
Interest expense and finance charges, net | 8,770 | 7,703 | |||||||||
Other expense (income), net | (7,616) | 3,803 | |||||||||
Income before income taxes | 146,591 | 123,383 | |||||||||
Provision for income taxes | 36,052 | 34,572 | |||||||||
Net income before non-controlling interest | 110,539 | 88,811 | |||||||||
Less: Net income attributable to non-controlling interest | 266 | — | |||||||||
Net income attributable to Concentrix Corporation | $ | 110,273 | $ | 88,811 |
Three Months Ended | % Change | ||||||||||||||||
February 28, 2022 | February 28, 2021 | 2022 to 2021 | |||||||||||||||
($ in thousands) | |||||||||||||||||
Industry vertical: | |||||||||||||||||
Technology and consumer electronics | $ | 470,199 | $ | 412,818 | 13.9 | % | |||||||||||
Communications and media | 260,643 | 248,790 | 4.8 | % | |||||||||||||
Retail, travel and ecommerce | 284,917 | 239,001 | 19.2 | % | |||||||||||||
Banking, financial services and insurance | 243,246 | 209,084 | 16.3 | % | |||||||||||||
Healthcare | 150,136 | 125,224 | 19.9 | % | |||||||||||||
Other | 126,911 | 118,361 | 7.2 | % | |||||||||||||
Total | $ | 1,536,052 | $ | 1,353,278 | 13.5 | % |
Three Months Ended | % Change | ||||||||||||||||
February 28, 2022 | February 28, 2021 | 2022 to 2021 | |||||||||||||||
($ in thousands) | |||||||||||||||||
Cost of revenue | $ | 997,918 | $ | 867,228 | 15.1 | % | |||||||||||
Gross profit | 538,134 | 486,050 | 10.7 | % | |||||||||||||
Gross margin % | 35.0 | % | 35.9 | % |
Three Months Ended | % Change | ||||||||||||||||
February 28, 2022 | February 28, 2021 | 2022 to 2021 | |||||||||||||||
($ in thousands) | |||||||||||||||||
Selling, general and administrative expenses | $ | 390,389 | $ | 351,161 | 11.2 | % | |||||||||||
Percentage of revenue | 25.4 | % | 25.9 | % |
Three Months Ended | % Change | ||||||||||||||||
February 28, 2022 | February 28, 2021 | 2022 to 2021 | |||||||||||||||
($ in thousands) | |||||||||||||||||
Operating income | $ | 147,745 | $ | 134,889 | 9.5 | % | |||||||||||
Operating margin | 9.6 | % | 10.0 | % |
Three Months Ended | % Change | ||||||||||||||||
February 28, 2022 | February 28, 2021 | 2022 to 2021 | |||||||||||||||
($ in thousands) | |||||||||||||||||
Interest expense and finance charges, net | $ | 8,770 | $ | 7,703 | 13.9 | % | |||||||||||
Percentage of revenue | 0.6 | % | 0.6 | % |
Three Months Ended | % Change | ||||||||||||||||
February 28, 2022 | February 28, 2021 | 2022 to 2021 | |||||||||||||||
($ in thousands) | |||||||||||||||||
Other expense (income), net | $ | (7,616) | $ | 3,803 | (300.3) | % | |||||||||||
Percentage of revenue | (0.5) | % | 0.3 | % |
Three Months Ended | % Change | ||||||||||||||||
February 28, 2022 | February 28, 2021 | 2022 to 2021 | |||||||||||||||
($ in thousands) | |||||||||||||||||
Provision for income taxes | $ | 36,052 | $ | 34,572 | 4.3 | % | |||||||||||
Percentage of income before income taxes | 24.6 | % | 28.0 | % |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
($ in thousands) | |||||||||||
Revenue | $ | 1,536,052 | $ | 1,353,278 | |||||||
Foreign currency translation | 25,610 | — | |||||||||
Revenue in constant currency | $ | 1,561,662 | $ | 1,353,278 | |||||||
Effect of excluding revenue of acquired and divested businesses | (83,196) | (15,947) | |||||||||
Revenue in adjusted constant currency | $ | 1,478,466 | $ | 1,337,331 |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
($ in thousands except per share amounts) | |||||||||||
Operating income | $ | 147,745 | $ | 134,889 | |||||||
Acquisition-related and integration expenses | 922 | — | |||||||||
Amortization of intangibles | 38,056 | 34,601 | |||||||||
Share-based compensation | 15,169 | 7,118 | |||||||||
Non-GAAP operating income | $ | 201,892 | $ | 176,608 | |||||||
Net income | $ | 110,273 | $ | 88,811 | |||||||
Net income attributable to non-controlling interest | 266 | — | |||||||||
Interest expense and finance charges, net | 8,770 | 7,703 | |||||||||
Provision for income taxes | 36,052 | 34,572 | |||||||||
Other expense (income), net | (7,616) | 3,803 | |||||||||
Acquisition-related and integration expenses | 922 | — | |||||||||
Amortization of intangibles | 38,056 | 34,601 | |||||||||
Share-based compensation | 15,169 | 7,118 | |||||||||
Depreciation | 36,037 | 35,999 | |||||||||
Adjusted EBITDA | $ | 237,929 | $ | 212,607 | |||||||
Operating margin | 9.6 | % | 10.0 | % | |||||||
Non-GAAP operating margin | 13.1 | % | 13.1 | % | |||||||
Adjusted EBITDA margin | 15.5 | % | 15.7 | % | |||||||
Net income | $ | 110,273 | $ | 88,811 | |||||||
Acquisition-related and integration expenses | 922 | — | |||||||||
Amortization of intangibles | 38,056 | 34,601 | |||||||||
Share-based compensation | 15,169 | 7,118 | |||||||||
Income taxes related to the above(1) | (13,753) | (10,567) | |||||||||
Non-GAAP net income | $ | 150,667 | $ | 119,963 | |||||||
Diluted earnings per common share (“EPS”) | $ | 2.09 | $ | 1.69 | |||||||
Acquisition-related and integration expenses | 0.02 | — | |||||||||
Amortization of intangibles | 0.72 | 0.66 | |||||||||
Share-based compensation | 0.29 | 0.14 | |||||||||
Income taxes related to the above(1) | (0.27) | (0.20) | |||||||||
Non-GAAP Diluted EPS | $ | 2.85 | $ | 2.29 |
Announcement Date | Record Date | Per Share Dividend Amount | Payment Date | ||||||||
September 27, 2021 | October 22, 2021 | $0.25 | November 2, 2021 | ||||||||
January 18, 2022 | January 28, 2022 | $0.25 | February 8, 2022 |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
($ in thousands) | |||||||||||
Net cash provided by operating activities | $ | 45,015 | $ | 35,884 | |||||||
Net cash used in investing activities | (1,610,823) | (41,950) | |||||||||
Net cash provided by (used in) financing activities | 1,527,353 | (30,618) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,395) | (471) | |||||||||
Net decrease in cash, cash equivalents and restricted cash | $ | (39,850) | $ | (37,155) | |||||||
Cash, cash equivalents and restricted cash at beginning of year | 183,010 | 156,351 | |||||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | 143,160 | $ | 119,196 |
Three Months Ended | |||||||||||
February 28, 2022 | February 28, 2021 | ||||||||||
($ in thousands) | |||||||||||
Net cash provided by operating activities | $ | 45,015 | $ | 35,884 | |||||||
Purchases of property and equipment | (45,393) | (41,950) | |||||||||
Free cash flow (a non-GAAP measure) | $ | (378) | $ | (6,066) |
Exhibit No. | Exhibit Description | |||||||
2.1 | ||||||||
2.2 | ||||||||
3.1 | ||||||||
3.2 | ||||||||
10.1 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
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101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Date: April 8, 2022 | CONCENTRIX CORPORATION | ||||||||||
By: | /s/ Christopher Caldwell | ||||||||||
Christopher Caldwell | |||||||||||
President and Chief Executive Officer | |||||||||||
By: | /s/ Andre Valentine | ||||||||||
Andre Valentine | |||||||||||
Chief Financial Officer | |||||||||||
April 8, 2022 | /s/ Christopher Caldwell | |||||||
Christopher Caldwell | ||||||||
President and Chief Executive Officer | ||||||||
April 8, 2022 | /s/ Andre Valentine | |||||||
Andre Valentine | ||||||||
Chief Financial Officer |
/s/ Christopher Caldwell | |||||
Date: April 8, 2022 | Christopher Caldwell President and Chief Executive Officer |
/s/ Andre Valentine | |||||
Date: April 8, 2022 | Andre Valentine Chief Financial Officer |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Feb. 28, 2022 |
Nov. 30, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 52,011,000 | 51,927,000 |
Common stock, shares outstanding (in shares) | 51,664,000 | 51,594,000 |
Treasury stock (in shares) | 348,000 | 333,000 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
|
Income Statement [Abstract] | ||
Revenue | $ 1,536,052 | $ 1,353,278 |
Cost of revenue | 997,918 | 867,228 |
Gross profit | 538,134 | 486,050 |
Selling, general and administrative expenses | 390,389 | 351,161 |
Operating income | 147,745 | 134,889 |
Interest expense and finance charges, net | 8,770 | 7,703 |
Other expense (income), net | (7,616) | 3,803 |
Income before income taxes | 146,591 | 123,383 |
Provision for income taxes | 36,052 | 34,572 |
Net income before non-controlling interest | 110,539 | 88,811 |
Less: Net income attributable to non-controlling interest | 266 | 0 |
Net income attributable to Concentrix Corporation | $ 110,273 | $ 88,811 |
Earnings per common share: | ||
Basic (in dollars per share) | $ 2.11 | $ 1.72 |
Diluted (in dollars per share) | $ 2.09 | $ 1.69 |
Weighted-average common shares outstanding | ||
Basic (in shares) | 51,629 | 51,155 |
Diluted (in shares) | 52,046 | 51,805 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Change in unrealized losses of defined benefit plans, tax | $ 0 | $ 98 |
Unrealized gains (losses) on cash flow hedges, tax | 947 | 2,255 |
Reclassification of net loss on cash flow hedges to net income, tax | 232 | 3,022 |
Foreign currency translation gain (loss), tax | $ 0 | $ 0 |
BACKGROUND AND BASIS OF PRESENTATION |
3 Months Ended |
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Feb. 28, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BACKGROUND AND BASIS OF PRESENTATION | BACKGROUND AND BASIS OF PRESENTATION: Background Concentrix Corporation (“Concentrix,” the “CX business” or the “Company”) is a leading global provider of Customer Experience (“CX”) solutions and technology that help iconic and disruptive brands drive deep understanding, full lifecycle engagement, and differentiated experiences for their end-customers around the world. The Company provides end-to-end capabilities, including CX process optimization, technology innovation and design engineering, front- and back-office automation, analytics and business transformation services to clients in five primary industry verticals. The Company’s primary verticals are technology and consumer electronics, communications and media, retail, travel and e-commerce, banking, financial services and insurance, and healthcare. On December 1, 2020, the separation of the CX business (the “separation”) from SYNNEX Corporation, now known as TD SYNNEX Corporation (“TD SYNNEX” or the “former parent”) was completed through a tax-free distribution of all of the issued and outstanding shares of the Company’s common stock to TD SYNNEX stockholders (the “distribution” and, together with the separation, the “spin-off”). TD SYNNEX stockholders received one share of the Company’s common stock for each share of TD SYNNEX common stock held as of the close of business on November 17, 2020. As a result of the spin-off, the Company became an independent public company and the Company’s common stock commenced trading on the Nasdaq Stock Market (“Nasdaq”) under the symbol “CNXC” on December 1, 2020. Basis of presentation The accompanying interim unaudited consolidated financial statements have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The amounts as of November 30, 2021 have been derived from the Company’s annual audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial position of the Company and its results of operations and cash flows as of and for the periods presented. These interim consolidated financial statements should be read in conjunction with the annual audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021. All intercompany balances and transactions have been eliminated in consolidation. Risks and uncertainties related to the COVID-19 pandemic In December 2019, there was an outbreak of a new strain of coronavirus (“COVID-19”), which was declared a pandemic by the World Health Organization in March 2020. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and labor force participation, and created significant volatility and disruption of financial markets. The Company successfully transitioned a significant portion of its workforce to a remote working environment throughout the second quarter of 2020 and implemented a number of safety and social distancing measures in the Company’s sites to protect the health and safety of the team. During the three months ended February 28, 2022, almost all of the Company’s workforce was productive, but the Company experienced the continued effects of the COVID-19 pandemic, as variants caused new waves of COVID-19 cases around the globe. The extent of the continued impact of the COVID-19 pandemic on the Company’s operational and financial performance, including its ability to execute business strategies and initiatives in the expected time frame, will depend on future developments, including the duration, spread and severity of the pandemic, the evolution of the virus and the effects of mutations in its genetic code, country and state restrictions regarding virus containment, the availability and effectiveness of vaccines and treatment options, accessibility to the Company’s delivery and operations locations, its continued utilization of remote work environments in response to future health and safety restrictions, and the effect on the Company’s clients’ businesses and the demand for their products and services, all of which are uncertain and cannot be predicted. The Company is unable to predict how long the pandemic conditions will persist in regions in which the Company operates, if or when countries or localities may experience an increase in COVID-19 cases, what additional measures may be introduced by governments or the Company’s clients in response to the pandemic generally or to an increase in COVID-19 cases in a particular country or locality, and the effect of any such additional measures on the Company’s business. As a result, many of the estimates and assumptions used in preparation of these consolidated financial statements required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve with respect to the pandemic and the global recovery from the pandemic, the Company’s estimates may materially change in future periods.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
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Feb. 28, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: For a discussion of the Company’s significant accounting policies, refer to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021. Accounting pronouncements adopted during the three months ended February 28, 2022 are discussed below. Concentration of credit risk For the three months ended February 28, 2022 and February 28, 2021, one client accounted for 10.3% and 11.9%, respectively, of the Company’s consolidated revenue. As of February 28, 2022 and November 30, 2021, one client comprised 12.3% and 15.3%, respectively, of the Company’s total accounts receivable balance. Recently adopted accounting pronouncements In December 2019, the Financial Accounting Standards Board (the “FASB”) issued new guidance that simplifies the accounting for income taxes. The guidance is effective for annual reporting periods beginning after December 15, 2020, and interim periods within those reporting periods. This standard became effective for fiscal year 2022 and did not have a material impact on the consolidated financial statements. In August 2018, the FASB issued new guidance to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The guidance requires the Company to disclose the weighted-average interest crediting rates used in cash balance pension plans. It also requires the Company to disclose the reasons for significant changes in the benefit obligation or plan assets, including significant gains and losses affecting the benefit obligation for the period. This standard became effective for fiscal year 2021 and did not have a material impact on the consolidated financial statements. In June 2016, the FASB issued a new credit loss standard that replaced the prior incurred loss impairment model with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. This standard became effective for fiscal year 2021 and did not have a material impact on the consolidated financial statements. Recently issued accounting pronouncements In March 2020, the FASB issued optional guidance to ease the potential burden for a limited time in accounting for or recognizing the effects of reference rate reform, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on financial reporting. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are elective and are effective upon issuance for all entities through December 31, 2022. The Company is currently evaluating the impact of this guidance.
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ACQUISITION |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITION | ACQUISITION: PK Acquisition Background On December 27, 2021, the Company completed its acquisition of PK, a leading CX design engineering company with more than 5,000 staff in four countries. PK creates pioneering experiences that accelerate digital outcomes for their clients’ customers, partners and staff. The acquisition of PK expands the Company’s scale in the digital IT services market and supports the Company’s growth strategy of investing in digital transformation to deliver exceptional customer experiences. The addition of the PK staff and technology to the Company’s team further strengthens its capabilities in CX design and development, artificial intelligence (“AI”), intelligent automation, and customer loyalty. Purchase price consideration The total purchase price, net of cash acquired, was $1,581.2 million, which was funded by proceeds from the Company’s new term loan (the “Term Loan”) under its amended senior secured credit facility (the “Credit Facility”) and additional borrowings under its accounts receivable securitization facility (the “Securitization Facility”). See Note 8—Borrowings for a further discussion of the Term Loan, the Credit Facility and the Securitization Facility. The preliminary purchase price consideration to acquire PK consisted of the following:
(1) Represents the cash consideration paid for the outstanding shares of PK’s common stock, which includes a preliminary estimate of the merger consideration adjustment to be paid pursuant to the merger agreement. (2) Represents the cash consideration paid for vested PK stock option awards and restricted stock awards. (3) Represents the cash consideration paid to retire PK’s outstanding third-party debt, including accrued interest. (4) Represents the cash consideration paid for expenses incurred by PK in connection with the merger and paid by Concentrix pursuant to the merger agreement. These expenses primarily related to third-party consulting services. (5) Represents the issuance of vested Concentrix stock options that were issued in conversion of certain vested PK stock options that were assumed by Concentrix pursuant to the merger agreement. (6) Represents the PK cash balance acquired at acquisition. Preliminary purchase price allocation The acquisition was accounted for as a business combination in accordance with Accounting Standards Codification Topic 805, Business Combinations. The purchase price was allocated to the assets acquired, liabilities assumed and non-controlling interest based on management’s estimate of the respective fair values at the date of acquisition. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill were the assembled workforce, comprehensive service portfolio delivery capabilities and strategic benefits that are expected to be realized from the acquisition. None of the goodwill is expected to be deductible for income tax purposes. The following table summarizes the preliminary estimates of fair values of the assets acquired, liabilities assumed and non-controlling interest as of the acquisition date:
As of February 28, 2022, the purchase price allocation is preliminary. The preliminary purchase price allocation was based upon a preliminary valuation, and the Company’s estimates and assumptions are subject to change within the measurement period (defined as the twelve months following the acquisition date). The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the valuation of identifiable intangible assets acquired, the fair value of certain tangible assets acquired and liabilities assumed, and deferred income taxes. The Company expects to continue to obtain information for the purpose of determining the fair value of the assets acquired and liabilities assumed on the acquisition date throughout the remainder of the measurement period. The preliminary purchase price allocation includes $469.3 million of acquired identifiable intangible assets, all of which have finite lives. The preliminary fair value of the identifiable intangible assets has been estimated using the income approach through a discounted cash flow analysis of certain cash flow projections. The cash flow projections are based on forecasts used by the Company to price the PK acquisition, and the discount rates applied were benchmarked by referencing the implied rate of return of the Company’s pricing model and the weighted average cost of capital. The intangible assets are being amortized over their estimated useful lives on either a straight-line basis or an accelerated method that reflects the economic benefit of the asset. The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future forecasted cash flows of the Company following the acquisition of PK. Impact on results of operations The results of the PK operations have been included in the consolidated financial statements since December 27, 2021. The following table provides the results of operations for PK included in the consolidated statement of operations from the acquisition date through February 28, 2022:
In connection with the acquisition of PK, the Company incurred a total of $0.9 million of acquisition-related and integration expenses for the three months ended February 28, 2022. These expenses primarily include legal and professional services, and severance and retention payments to integrate the business. These acquisition-related and integration expenses were recorded within selling, general and administrative expenses. Supplemental Pro Forma Information The supplemental pro forma financial information presented below is for illustrative purposes only, does not include the pro forma adjustments that would be required under Regulation S-X for pro forma financial information, is not necessarily indicative of the financial position or results of operations that would have been realized if the PK acquisition had been completed on the date indicated, does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position. The pro forma adjustments are based upon currently available information and certain assumptions that we believe are reasonable under the circumstances. The supplemental pro forma financial information reflects pro forma adjustments to present the combined pro forma results of operations as if the PK acquisition had occurred on December 1, 2020 to give effect to certain events that the Company believes to be directly attributable to the PK acquisition. These pro forma adjustments primarily include: •An increase in amortization expense that would have been recognized due to acquired identifiable intangible assets. •An adjustment to interest expense to reflect the additional borrowings of Concentrix on the amended credit facility and the repayment of PK’s historical debt in conjunction with the acquisition. •The related income tax effects of the adjustments noted above. The supplemental pro forma financial information for the periods presented is as follows:
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SHARE-BASED COMPENSATION |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION: In November 2020, in connection with the spin-off, TD SYNNEX, as sole stockholder of Concentrix, approved the Concentrix Corporation 2020 Stock Incentive Plan (the “Concentrix Stock Incentive Plan”) and the Concentrix Corporation 2020 Employee Stock Purchase Plan (the “Concentrix ESPP”), each to be effective upon completion of the spin-off. 4,000 shares of Concentrix common stock were reserved for issuance under the Concentrix Stock Incentive Plan, and 1,000 shares of Concentrix common stock were authorized for issuance under the Concentrix ESPP. In December 2021, 523 additional shares of Concentrix common stock were reserved for issuance under the Concentrix Stock Incentive Plan resulting from an automatic annual increase pursuant to the terms of the plan. In January 2022, the Company granted 137 restricted stock awards and restricted stock units and 129 performance-based restricted stock units under the Concentrix Stock Incentive Plan, which included annual awards to the Company’s senior executive team and retention and new hire awards to staff who joined the Company from PK. The restricted stock awards and restricted stock units awards had a weighted average grant date fair value of $181.09 per share and vest over a service period of four years. The performance-based restricted stock units will vest, if at all, upon the achievement of certain annual financial targets during the three-year period ending November 30, 2024. The performance-based restricted stock units had a grant date weighted average fair value of $178.58 per share. The Company recorded share-based compensation expense in the consolidated statements of operations for the three months ended February 28, 2022 and 2021 as follows:
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BALANCE SHEET COMPONENTS |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS: Cash, cash equivalents and restricted cash: The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:
Restricted cash balances relate primarily to restrictions placed on cash deposits by banks as collateral for the issuance of bank guarantees and the terms of a government grant. Accounts receivable, net: Accounts receivable, net is comprised of the following as of February 28, 2022 and 2021:
Allowance for doubtful trade receivables: Presented below is a progression of the allowance for doubtful trade receivables:
Property and equipment, net: The following tables summarize the carrying amounts and related accumulated depreciation for property and equipment as of February 28, 2022 and November 30, 2021:
Shown below are the countries where 10% or more of the Company’s property and equipment, net are located as of February 28, 2022 and November 30, 2021:
Goodwill: The following table summarizes the changes in the Company’s goodwill for the three months ended February 28, 2022:
Intangible assets, net: The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of February 28, 2022 and November 30, 2021:
Estimated future amortization expense of the Company’s intangible assets is as follows:
Accumulated other comprehensive income (loss): The components of accumulated other comprehensive income (loss) (“AOCI”), net of taxes, were as follows:
Refer to Note 6 for the location of gains and losses on cash flow hedges reclassified from other comprehensive income (loss) to the consolidated statements of operations. Reclassifications of amortization of actuarial (gains) losses of defined benefit plans is recorded in “Other expense (income), net” in the consolidated statement of operations. Restructuring: The following table presents the activity related to liabilities for restructuring charges of previous acquisitions for the three months ended February 28, 2022 and 2021:
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DERIVATIVE INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS: In the ordinary course of business, the Company is exposed to foreign currency risk and credit risk. The Company enters into transactions, and owns monetary assets and liabilities, that are denominated in currencies other than the legal entity’s functional currency. The Company may enter into forward contracts, option contracts, or other derivative instruments to offset a portion of the risk on expected future cash flows, earnings, net investments in certain non-U.S. legal entities and certain existing assets and liabilities. However, the Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange or interest rates. Generally, the Company does not use derivative instruments to cover equity risk and credit risk. The Company’s hedging program is not used for trading or speculative purposes. All derivatives are recognized on the consolidated balance sheets at their fair values. Changes in the fair value of derivatives are recorded in the consolidated statements of operations, or as a component of AOCI in the consolidated balance sheets, as discussed below. Cash Flow Hedges To mitigate the risk of fluctuations in foreign currency exchange rates on gross margins, certain of the Company’s legal entities with functional currencies that are not U.S. dollars may hedge a portion of forecasted revenue or costs not denominated in the entities’ functional currencies. These instruments mature at various dates through February 2024. Gains and losses on cash flow hedges are recorded in AOCI until the hedged item is recognized in earnings. Deferred gains and losses associated with cash flow hedges of foreign currency revenue are recognized as a component of “Revenue” in the same period as the related revenue is recognized, and deferred gains and losses related to cash flow hedges of foreign currency costs are recognized as a component of “Cost of revenue” or “Selling, general and administrative expenses” in the same period as the related costs are recognized. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Deferred gains and losses in AOCI associated with such derivative instruments are reclassified into earnings in the period of de-designation. Any subsequent changes in fair value of such derivative instruments are recorded in earnings unless they are re-designated as hedges of other transactions. Non-Designated Derivatives The Company uses short-term forward contracts to offset the foreign exchange risk of assets and liabilities denominated in currencies other than the functional currency of the Company’s legal entities that own the asset or liability. These contracts, which are not designated as hedging instruments, mature or settle within twelve months. Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates. Fair Values of Derivative Instruments in the Consolidated Balance Sheets The fair values of the Company’s derivative instruments are disclosed in Note 7 and summarized in the table below:
Volume of activity The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Philippine peso, the Indian rupee, the euro, the British pound, the Canadian dollar and the Japanese yen, that will be bought or sold at maturity. The notional amounts for outstanding derivative instruments provide one measure of the transaction volume outstanding and do not represent the amount of the Company’s exposure to credit or market loss. The Company’s exposure to credit loss and market risk will vary over time as currency exchange rates change. The Effect of Derivative Instruments on AOCI and the Consolidated Statements of Operations The following table shows the gains and losses, before taxes, of the Company’s derivative instruments designated as cash flow hedges and not designated as hedging instruments in other comprehensive income (“OCI”), and the consolidated statements of operations for the periods presented:
(1) The gains and losses largely offset the currency gains and losses that resulted from changes in the assets and liabilities denominated in nonfunctional currencies. There were no material gain or loss amounts excluded from the assessment of effectiveness. Existing net losses in AOCI that are expected to be reclassified into earnings in the normal course of business within the next twelve months are $6,376. Offsetting of Derivatives In the consolidated balance sheets, the Company does not offset derivative assets against liabilities in master netting arrangements. Credit exposure for derivative financial instruments is limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed the Company’s obligations to the counterparties. The Company manages the potential risk of credit losses through careful evaluation of counterparty credit standing and selection of counterparties from a limited group of financial institutions.
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS: The Company’s fair value measurements are classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following table summarizes the valuation of the Company’s investments and financial instruments that are measured at fair value on a recurring basis:
The Company’s cash equivalents consist primarily of highly liquid investments in money market funds and term deposits with maturity periods of three months or less. The carrying values of cash equivalents approximate fair value since they are near their maturity. Investment in foreign government bond classified as an available-for-sale debt security is recorded at fair value based on quoted market prices. The fair values of forward exchange contracts are measured based on the foreign currency spot and forward rates quoted by banks or foreign currency dealers. Fair values of long-term foreign currency exchange contracts are measured using valuations based upon quoted prices for similar assets and liabilities in active markets and are valued by reference to similar financial instruments, adjusted for terms specific to the contracts. The effect of nonperformance risk on the fair value of derivative instruments was not material as of February 28, 2022 and November 30, 2021. The carrying values of term deposits with maturities less than one year, accounts receivable and accounts payable approximate fair value due to their short maturities and interest rates that are variable in nature. The carrying values of the outstanding balance on the Term Loan under the Company’s Credit Facility and the outstanding balance on the Securitization Facility approximate their fair values since they bear interest rates that are similar to existing market rates. During the three months ended February 28, 2022 and 2021, there were no transfers between the fair value measurement category levels.
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BORROWINGS |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BORROWINGS | BORROWINGS: Borrowings consist of the following:
Credit Facility On December 27, 2021, in connection with the closing of the acquisition of PK, Concentrix entered into an amendment of its senior secured credit facility (the “Credit Facility”) (i) to refinance the previously existing term loan (the “Prior Term Loan”) with a new term loan, which was fully advanced, in the aggregate outstanding principal amount of $2,100,000 (the “Term Loan”), (ii) to increase the revolving credit facility to $1,000,000 (the “Revolver”), (iii) to extend the maturity of the Credit Facility from November 30, 2025 to December 27, 2026, (iv) to replace LIBOR with SOFR (the Secured Overnight Financing Rate) as the primary reference rate used to calculate interest on the loans under the Credit Facility, and (v) to modify the commitment fee on the unused portion of the Revolver and the margins in excess of the reference rates at which the loans under the Credit Facility bear interest. The proceeds from the Term Loan and additional borrowings on the Securitization Facility were used to repay the principal amounts outstanding on the Prior Term Loan and to finance the acquisition of PK, including the repayment of certain indebtedness of PK and the payment of fees and expenses in connection with the acquisition of PK. As amended, borrowings under the Credit Facility bear interest, in the case of SOFR rate loans, at a per annum rate equal to the applicable SOFR rate (but not less than 0.0%), plus an adjustment of between 0.10% and 0.25% depending on the interest period of each SOFR loan, plus an applicable margin, which ranges from 1.25% to 2.00%, based on Concentrix’ consolidated leverage ratio. Borrowings under the Credit Facility that are not SOFR rate loans bear interest at a per annum rate equal to (i) the greatest of (a) the Federal Funds Rate in effect on such day plus ½ of 1.00%, (b) the rate of interest last publicly announced by Bank of America as its “prime rate” and (c) the term SOFR rate plus 1.00%, plus (ii) an applicable margin, which ranges from 0.25% to 1.00%, based on Concentrix’ consolidated leverage ratio. As amended, the commitment fee on the unused portion of the Revolver ranges from 22.5 to 30 basis points, based on Concentrix’ consolidated leverage ratio. Beginning August 31, 2022, the outstanding principal of the Term Loan will be payable in quarterly installments of $26.25 million, with the unpaid balance due in full on the maturity date. Concentrix may request, subject to obtaining commitments from any participating lenders and certain other conditions, incremental commitments to increase the amount of the Revolver or the Term Loan available under the Credit Facility in an aggregate principal amount of up to $450,000, plus an additional amount, so long as after giving effect to the incurrence of such additional amount, the Company’s pro forma first lien leverage ratio (as defined in the Credit Facility) would not exceed 3.00 to 1.00. Obligations under the Credit Facility are secured by substantially all of the assets of Concentrix and certain of its U.S. subsidiaries and are guaranteed by certain of its U.S. subsidiaries. The Credit Facility contains various loan covenants that restrict the ability of Concentrix and its subsidiaries to take certain actions, including, incurrence of indebtedness, creation of liens, mergers or consolidations, dispositions of assets, repurchase or redemption of capital stock, making certain investments, entering into certain transactions with affiliates or changing the nature of their business. In addition, the Credit Facility contains financial covenants that require Concentrix to maintain at the end of each fiscal quarter, (i) a consolidated leverage ratio (as defined in the Credit Facility) not to exceed 3.75 to 1.0 and (ii) a consolidated interest coverage ratio (as defined in the Credit Facility) equal to or greater than 3.00 to 1.0. The Credit Facility also contains various customary events of default, including payment defaults, defaults under certain other indebtedness, and a change of control of Concentrix. Concentrix initially entered into the Credit Facility on October 16, 2020, and the Credit Facility initially provided for the extension of revolving loans of up to $600,000 and term loan borrowings of up to $900,000. On November 30, 2020, in connection with the spin-off, the Company incurred $900,000 of term loan borrowings under the Credit Facility. Substantially all of the proceeds from such indebtedness, net of debt issuance costs, were transferred to TD SYNNEX on November 30, 2020 to eliminate debt owed by Concentrix to TD SYNNEX and in exchange for the contribution of certain Concentrix trademarks from TD SYNNEX to Concentrix. Beginning May 31, 2021, the outstanding principal of the Prior Term Loan was payable in quarterly installments of $11,250, with the unpaid balance due in full on the maturity date. During the fiscal year ended November 30, 2021, the Company paid $200,000 of the principal balance on the Prior Term Loan, including $166,250 of voluntary prepayments, without penalty. At February 28, 2022 and November 30, 2021, no amounts were outstanding under the Revolver. Securitization Facility On October 30, 2020, Concentrix entered into a $350,000 accounts receivable securitization facility (the “Securitization Facility”) pursuant to certain agreements, including a Receivables Financing Agreement and a Receivables Purchase Agreement. On November 30, 2020, in connection with the spin-off, the Company incurred $250,000 of borrowings under the Securitization Facility. Substantially all of the proceeds from such indebtedness were transferred to TD SYNNEX on November 30, 2020 to eliminate debt owed by Concentrix to TD SYNNEX and in exchange for the contribution of certain Concentrix trademarks from TD SYNNEX to Concentrix. Under the Securitization Facility, Concentrix and certain of its subsidiaries (the “Originators”) sell or otherwise transfer all of their accounts receivable to a special purpose bankruptcy-remote subsidiary of Concentrix (the “Borrower”) that grants a security interest in the receivables to the lenders in exchange for available borrowings of up to $350,000. The amount received under the Securitization Facility is recorded as debt on the Company’s consolidated balance sheets. Borrowing availability under the Securitization Facility may be limited by the Company’s accounts receivable balances, changes in the credit ratings of the clients comprising the receivables, client concentration levels in the receivables, and certain characteristics of the accounts receivable being transferred (including factors tracking performance of the accounts receivable over time). The Securitization Facility has a termination date of October 28, 2022. Amounts drawn under this Securitization Facility have been classified as long-term debt within the consolidated balance sheet based on the Company’s ability and intent to refinance on a long-term basis as of February 28, 2022. Borrowings under the Securitization Facility bear interest with respect to loans that are funded through the issuance of commercial paper at the applicable commercial paper rate plus a spread of 1.05% and, otherwise, at a per annum rate equal to the applicable LIBOR rate plus a spread of 1.15%. Concentrix is also obligated to pay a monthly undrawn fee that ranges from 30 to 37.5 basis points based on the portion of the Securitization Facility that is undrawn. The Securitization Facility contains various affirmative and negative covenants, including a consolidated leverage ratio covenant that is consistent with the Credit Facility and customary events of default, including payment defaults, defaults under certain other indebtedness, a change in control of Concentrix, and certain events negatively affecting the overall credit quality of the transferred accounts receivable. The Borrower’s sole business consists of the purchase or acceptance through capital contributions of the receivables and related security from the Originators and the subsequent retransfer of or granting of a security interest in such receivables and related security to the administrative agent under the Securitization Facility for the benefit of the lenders. The Borrower is a separate legal entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of the Borrower’s assets prior to any assets or value in the Borrower becoming available to the Borrower’s equity holders, and the assets of the Borrower are not available to pay creditors of Concentrix and its subsidiaries. Covenant compliance As of February 28, 2022, Concentrix was in compliance with all covenants for the above arrangements.
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EARNINGS PER SHARE |
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EARNINGS PER SHARE | EARNINGS PER SHARE: Basic and diluted earnings per common share (“EPS”) are computed using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. The Company’s restricted stock awards are considered participating securities because they are legally issued at the grant date and holders have a non-forfeitable right to receive dividends.
(1)Restricted stock awards granted to employees by the Company are considered participating securities.
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REVENUE |
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REVENUE | REVENUE: Disaggregated revenue In the following table, the Company’s revenue is disaggregated by primary industry verticals:
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PENSION AND EMPLOYEE BENEFITS PLANS |
3 Months Ended |
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Feb. 28, 2022 | |
Retirement Benefits [Abstract] | |
PENSION AND EMPLOYEE BENEFITS PLANS | PENSION AND EMPLOYEE BENEFITS PLANS: The Company has a 401(k) plan in the United States under which eligible employees may contribute up to the maximum amount as provided by law. Employees become eligible to participate in the 401(k) plan on the first day of the month after their employment date. The Company may make discretionary contributions under the plan. Employees in most of the Company’s non-U.S. legal entities are covered by government mandated defined contribution plans. During the three months ended February 28, 2022 and 2021, the Company contributed $21,812 and $20,174, respectively, to defined contribution plans. Defined Benefit Plans The Company has defined benefit pension and retirement plans for eligible employees of certain non-U.S. legal entities. For eligible employees in the U.S., the Company maintains a frozen defined benefit pension plan (“the cash balance plan”), which includes both a qualified and non-qualified portion. The pension benefit formula for the cash balance plan is determined by a combination of compensation, age-based credits and annual guaranteed interest credits. The qualified portion of the cash balance plan has been funded through contributions made to a trust fund. The Company maintains funded or unfunded defined benefit pension or retirement plans for certain eligible employees in the Philippines, Malaysia, India, and France. Benefits under these plans are primarily based on years of service and compensation during the years immediately preceding retirement or termination of participation in the plans. Net benefit costs related to defined benefit plans were $5,722 and $3,311, during the three months ended February 28, 2022 and 2021, respectively. On an aggregate basis, the plans were underfunded by $102,276 and $104,689 at February 28, 2022 and November 30, 2021, respectively.
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INCOME TAXES |
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Feb. 28, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES: Income taxes consist of current and deferred tax expense resulting from income earned in domestic and international jurisdictions. The effective tax rates for the three months ended February 28, 2022 and 2021 were impacted by the geographic mix of worldwide income and certain discrete items. The liability for unrecognized tax benefits was $56,046 and $56,308 at February 28, 2022 and November 30, 2021, respectively, and is included in other long-term liabilities in the consolidated balance sheets. As of February 28, 2022 and November 30, 2021, the total amount of unrecognized tax benefits that would affect income tax expense if recognized in the consolidated financial statements was $48,241 and $48,438, respectively. This amount includes net interest and penalties of $8,884 and $8,861 for the respective periods. The net interest and penalties balance for November 30, 2021 includes an immaterial prior period disclosure adjustment to properly present the amount. This disclosure adjustment resulted in no impact to the Company’s consolidated balance sheets or consolidated statement of operations for any period presented. The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits could decrease between approximately $6,484 and $12,693 in the next twelve months; however, actual developments in this area could differ from those currently expected.
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LEASES |
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LEASES | LEASES: The Company leases certain of its facilities and equipment under operating lease agreements, which expire in various periods through 2035. The Company’s finance leases are not material. The following table presents the various components of operating lease costs:
The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next five fiscal years and thereafter as of February 28, 2022:
*Imputed interest represents the difference between undiscounted cash flows and discounted cash flows. The following amounts were recorded in the consolidated balance sheets related to the Company’s operating leases:
The following table presents supplemental cash flow information related to the Company’s operating leases. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:
The weighted-average remaining lease term and discount rate as of February 28, 2022 and November 30, 2021 were as follows:
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
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Feb. 28, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES: From time to time, the Company receives notices from third parties, including customers and suppliers, seeking indemnification, payment of money or other actions in connection with claims made against them. Also, from time to time, the Company has been involved in various bankruptcy preference actions where the Company was a supplier to the companies now in bankruptcy. In addition, the Company is subject to various other claims, both asserted and unasserted, that arise in the ordinary course of business. The Company evaluates these claims and records the related liabilities. It is possible that the liabilities ultimately incurred by the Company could differ from the amounts recorded. Under the separation and distribution agreement with TD SYNNEX, the Company agreed to indemnify TD SYNNEX, each of its subsidiaries and each of their respective directors, officers and employees from and against all liabilities allocated to Concentrix under the separation and distribution agreement, which are generally those liabilities that relate to the CX business and the Company’s business activities, whether incurred prior to or after the spin-off. Under the tax matters agreement with TD SYNNEX, if the spin-off fails to qualify for tax-free treatment, the Company is generally required to indemnify TD SYNNEX for any taxes resulting from the spin-off (and related costs and other damages) to the extent such amounts result from (1) an acquisition of all or a portion of the Company’s equity securities or assets by any means, (2) any action or failure to act by the Company after the distribution affecting the voting rights of the Company’s stock, (3) other actions or failures to act by the Company, or (4) certain breaches of the Company’s agreements and representations in the tax matters agreement. The Company’s indemnification obligations to TD SYNNEX and its subsidiaries, officers, directors and employees are not limited by any maximum amount. The Company does not believe that the above commitments and contingencies will have a material adverse effect on the Company’s results of operations, financial position or cash flows.
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STOCKHOLDERS' EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY: Share repurchase program In September 2021, the Company’s board of directors authorized the Company to purchase up to $500,000 of the Company’s outstanding shares of common stock from time to time as market and business conditions warrant, including through open market purchases or Rule 10b5-1 trading plans. The repurchase program has no termination date and may be suspended or discontinued at any time. During the three months ended February 28, 2022, the Company did not repurchase any shares under the program. At February 28, 2022, approximately $474,900 remained available for share repurchases under the existing authorization from the Company’s board of directors. Dividends During fiscal years 2022 and 2021, the Company has paid the following dividends per share approved by the Company’s board of directors:
On March 29, 2022, the Company announced a cash dividend of $0.25 per share to stockholders of record as of April 29, 2022, payable on May 10, 2022.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Feb. 28, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying interim unaudited consolidated financial statements have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The amounts as of November 30, 2021 have been derived from the Company’s annual audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial position of the Company and its results of operations and cash flows as of and for the periods presented. These interim consolidated financial statements should be read in conjunction with the annual audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021. All intercompany balances and transactions have been eliminated in consolidation.
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Risks and uncertainties related to the COVID-19 pandemic | Risks and uncertainties related to the COVID-19 pandemic In December 2019, there was an outbreak of a new strain of coronavirus (“COVID-19”), which was declared a pandemic by the World Health Organization in March 2020. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and labor force participation, and created significant volatility and disruption of financial markets. The Company successfully transitioned a significant portion of its workforce to a remote working environment throughout the second quarter of 2020 and implemented a number of safety and social distancing measures in the Company’s sites to protect the health and safety of the team. During the three months ended February 28, 2022, almost all of the Company’s workforce was productive, but the Company experienced the continued effects of the COVID-19 pandemic, as variants caused new waves of COVID-19 cases around the globe. The extent of the continued impact of the COVID-19 pandemic on the Company’s operational and financial performance, including its ability to execute business strategies and initiatives in the expected time frame, will depend on future developments, including the duration, spread and severity of the pandemic, the evolution of the virus and the effects of mutations in its genetic code, country and state restrictions regarding virus containment, the availability and effectiveness of vaccines and treatment options, accessibility to the Company’s delivery and operations locations, its continued utilization of remote work environments in response to future health and safety restrictions, and the effect on the Company’s clients’ businesses and the demand for their products and services, all of which are uncertain and cannot be predicted. The Company is unable to predict how long the pandemic conditions will persist in regions in which the Company operates, if or when countries or localities may experience an increase in COVID-19 cases, what additional measures may be introduced by governments or the Company’s clients in response to the pandemic generally or to an increase in COVID-19 cases in a particular country or locality, and the effect of any such additional measures on the Company’s business. As a result, many of the estimates and assumptions used in preparation of these consolidated financial statements required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve with respect to the pandemic and the global recovery from the pandemic, the Company’s estimates may materially change in future periods.
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Concentration of credit risk | Concentration of credit risk For the three months ended February 28, 2022 and February 28, 2021, one client accounted for 10.3% and 11.9%, respectively, of the Company’s consolidated revenue. As of February 28, 2022 and November 30, 2021, one client comprised 12.3% and 15.3%, respectively, of the Company’s total accounts receivable balance.
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Recently adopted accounting pronouncements and Recently issued accounting pronouncements | Recently adopted accounting pronouncements In December 2019, the Financial Accounting Standards Board (the “FASB”) issued new guidance that simplifies the accounting for income taxes. The guidance is effective for annual reporting periods beginning after December 15, 2020, and interim periods within those reporting periods. This standard became effective for fiscal year 2022 and did not have a material impact on the consolidated financial statements. In August 2018, the FASB issued new guidance to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The guidance requires the Company to disclose the weighted-average interest crediting rates used in cash balance pension plans. It also requires the Company to disclose the reasons for significant changes in the benefit obligation or plan assets, including significant gains and losses affecting the benefit obligation for the period. This standard became effective for fiscal year 2021 and did not have a material impact on the consolidated financial statements. In June 2016, the FASB issued a new credit loss standard that replaced the prior incurred loss impairment model with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. This standard became effective for fiscal year 2021 and did not have a material impact on the consolidated financial statements. Recently issued accounting pronouncements In March 2020, the FASB issued optional guidance to ease the potential burden for a limited time in accounting for or recognizing the effects of reference rate reform, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on financial reporting. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are elective and are effective upon issuance for all entities through December 31, 2022. The Company is currently evaluating the impact of this guidance.
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ACQUISITION (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | The preliminary purchase price consideration to acquire PK consisted of the following:
(1) Represents the cash consideration paid for the outstanding shares of PK’s common stock, which includes a preliminary estimate of the merger consideration adjustment to be paid pursuant to the merger agreement. (2) Represents the cash consideration paid for vested PK stock option awards and restricted stock awards. (3) Represents the cash consideration paid to retire PK’s outstanding third-party debt, including accrued interest. (4) Represents the cash consideration paid for expenses incurred by PK in connection with the merger and paid by Concentrix pursuant to the merger agreement. These expenses primarily related to third-party consulting services. (5) Represents the issuance of vested Concentrix stock options that were issued in conversion of certain vested PK stock options that were assumed by Concentrix pursuant to the merger agreement. (6) Represents the PK cash balance acquired at acquisition.
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Schedule of Business Acquisitions | The following table summarizes the preliminary estimates of fair values of the assets acquired, liabilities assumed and non-controlling interest as of the acquisition date:
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Business Acquisition, Pro Forma Information | The following table provides the results of operations for PK included in the consolidated statement of operations from the acquisition date through February 28, 2022:
The supplemental pro forma financial information for the periods presented is as follows:
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SHARE-BASED COMPENSATION (Tables) |
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Schedule of Share-based Compensation Expense | The Company recorded share-based compensation expense in the consolidated statements of operations for the three months ended February 28, 2022 and 2021 as follows:
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BALANCE SHEET COMPONENTS (Tables) |
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Feb. 28, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:
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Schedule of Restricted Cash and Cash Equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:
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Schedule of Accounts Receivable | Accounts receivable, net is comprised of the following as of February 28, 2022 and 2021:
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Schedule of Allowance for Doubtful Trade Receivables | Presented below is a progression of the allowance for doubtful trade receivables:
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Property, Plant and Equipment | The following tables summarize the carrying amounts and related accumulated depreciation for property and equipment as of February 28, 2022 and November 30, 2021:
Shown below are the countries where 10% or more of the Company’s property and equipment, net are located as of February 28, 2022 and November 30, 2021:
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Schedule of Goodwill | The following table summarizes the changes in the Company’s goodwill for the three months ended February 28, 2022:
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Schedule of Intangible Assets | The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of February 28, 2022 and November 30, 2021:
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Schedule of Intangible Assets, Future Amortization Expense | Estimated future amortization expense of the Company’s intangible assets is as follows:
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Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) (“AOCI”), net of taxes, were as follows:
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Liability for Restructuring Charges related to Acquisition | The following table presents the activity related to liabilities for restructuring charges of previous acquisitions for the three months ended February 28, 2022 and 2021:
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DERIVATIVE INSTRUMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair values of the Company’s derivative instruments are disclosed in Note 7 and summarized in the table below:
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Derivative Instruments, Gain (Loss) | The following table shows the gains and losses, before taxes, of the Company’s derivative instruments designated as cash flow hedges and not designated as hedging instruments in other comprehensive income (“OCI”), and the consolidated statements of operations for the periods presented:
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FAIR VALUE MEASUREMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the valuation of the Company’s investments and financial instruments that are measured at fair value on a recurring basis:
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BORROWINGS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Borrowings consist of the following:
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EARNINGS PER SHARE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share |
(1)Restricted stock awards granted to employees by the Company are considered participating securities.
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REVENUE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | In the following table, the Company’s revenue is disaggregated by primary industry verticals:
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LEASES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Cost | The following table presents the various components of operating lease costs:
The weighted-average remaining lease term and discount rate as of February 28, 2022 and November 30, 2021 were as follows:
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Operating Lease Liability Maturity Schedule | The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next five fiscal years and thereafter as of February 28, 2022:
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Schedule of Amounts Recorded In Consolidated Balance Sheet Related to Operating Leases | The following amounts were recorded in the consolidated balance sheets related to the Company’s operating leases:
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Schedule of Supplemental Cash Flow Information Related to Operating Leases | The following table presents supplemental cash flow information related to the Company’s operating leases. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:
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STOCKHOLDERS' EQUITY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends Declared | During fiscal years 2022 and 2021, the Company has paid the following dividends per share approved by the Company’s board of directors:
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BACKGROUND AND BASIS OF PRESENTATION (Details) |
Dec. 01, 2020 |
Feb. 28, 2022
market
|
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Primary industry verticals | 5 | |
Share ratio, received from distribution | 1 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Customer Concentration Risk - One Client |
3 Months Ended | |
---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
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Revenue | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 10.30% | 11.90% |
Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 12.30% | 15.30% |
ACQUISITIONS - Narrative (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Dec. 27, 2021
USD ($)
market
|
Feb. 28, 2022
USD ($)
|
Feb. 28, 2021
USD ($)
|
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Business Acquisition [Line Items] | |||
Acquisitions of business, net of cash acquired | $ 1,564,430 | $ 0 | |
PK | |||
Business Acquisition [Line Items] | |||
Number of staff members acquired | market | 5,000 | ||
Acquisitions of business, net of cash acquired | $ 1,581,203 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 469,300 | ||
Acquisition-related and integration expenses | $ 22,842 | $ 900 |
ACQUISITIONS - Consideration (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Dec. 27, 2021 |
Feb. 28, 2022 |
Feb. 28, 2021 |
|
Business Acquisition [Line Items] | |||
Acquisitions of business, net of cash acquired | $ 1,564,430 | $ 0 | |
PK | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross, Cash Consideration for Stock | $ 1,177,568 | ||
Payments to Acquire Businesses, Gross, Cash Consideration for Vested Equity Awards | 246,229 | ||
Payments to Acquire Businesses, Gross, Cash Consideration for Repayment of Debt, Including Accrued Interest | 148,492 | ||
Acquisition-related and integration expenses | 22,842 | $ 900 | |
Cash paid for acquisition | 1,595,131 | ||
Business Combination, Consideration Transferred, Other | 15,725 | ||
Purchase price | 1,610,856 | ||
Cash Acquired from Acquisition | 29,653 | ||
Acquisitions of business, net of cash acquired | $ 1,581,203 |
ACQUISITIONS - Pro Forma (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
|
Business Acquisition [Line Items] | ||
Revenue | $ 1,536,052 | $ 1,353,278 |
Income before income taxes | 146,591 | 123,383 |
PK | ||
Business Acquisition [Line Items] | ||
Revenue | 83,196 | |
Income before income taxes | 207 | |
Business Acquisition, Pro Forma Revenue | 1,569,013 | 1,448,752 |
Business Acquisition, Pro Forma Net Income (Loss) | $ 106,351 | $ 84,235 |
SHARE-BASED COMPENSATION - Share-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
|
Share-based Payment Arrangement [Abstract] | ||
Total share-based compensation | $ 15,169 | $ 7,118 |
Tax benefit recorded in the provision for income taxes | (3,852) | (1,780) |
Effect on net income | $ 11,317 | $ 5,338 |
BALANCE SHEET COMPONENTS - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Feb. 28, 2022 |
Nov. 30, 2021 |
Feb. 28, 2021 |
Nov. 30, 2020 |
---|---|---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||||
Cash and cash equivalents | $ 142,157 | $ 182,038 | ||
Restricted cash included in other current assets | 1,003 | 972 | ||
Cash, cash equivalents and restricted cash | $ 143,160 | $ 183,010 | $ 119,196 | $ 156,351 |
BALANCE SHEET COMPONENTS - Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
Feb. 28, 2022 |
Nov. 30, 2021 |
Feb. 28, 2021 |
Nov. 30, 2020 |
---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Less: Allowance for doubtful accounts | $ (6,904) | $ (5,421) | $ (6,239) | $ (8,963) |
Accounts receivable, net | 1,324,738 | 1,207,953 | ||
Billed accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable, gross | 781,807 | 714,032 | ||
Unbilled accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable, gross | $ 549,835 | $ 499,342 |
BALANCE SHEET COMPONENTS - Allowance for Doubtful Trade Receivables (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
Nov. 30, 2021 |
Nov. 30, 2020 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Accounts Receivable, Allowance for Credit Loss, Current | $ 6,904 | $ 6,239 | $ 5,421 | $ 8,963 |
Write-offs and reclassifications | (465) | (170) | ||
Provision for doubtful accounts | $ 1,948 | $ (2,554) |
BALANCE SHEET COMPONENTS - Goodwill (Details) $ in Thousands |
3 Months Ended |
---|---|
Feb. 28, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | $ 1,813,502 |
Acquisition | 1,132,017 |
Foreign exchange translation | (3,080) |
Goodwill, Ending Balance | $ 2,942,439 |
BALANCE SHEET COMPONENTS - Intangible Assets, Net (Details) - USD ($) $ in Thousands |
Feb. 28, 2022 |
Nov. 30, 2021 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross amounts | $ 1,833,371 | $ 1,365,520 |
Accumulated amortization | (747,429) | (709,992) |
Total | 1,085,942 | 655,528 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amounts | 1,745,122 | 1,347,961 |
Accumulated amortization | (729,092) | (694,701) |
Total | 1,016,030 | 653,260 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amounts | 74,328 | 10,835 |
Accumulated amortization | (11,400) | (8,900) |
Total | 62,928 | 1,935 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amounts | 11,721 | 6,724 |
Accumulated amortization | (6,807) | (6,391) |
Total | 4,914 | 333 |
Noncompete Agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amounts | 2,200 | 0 |
Accumulated amortization | (130) | 0 |
Total | $ 2,070 | $ 0 |
BALANCE SHEET COMPONENTS - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands |
Feb. 28, 2022 |
Nov. 30, 2021 |
---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||
2021 (remaining three months) | $ 124,838 | |
2023 | 154,781 | |
2024 | 140,805 | |
2025 | 129,176 | |
2026 | 113,544 | |
Thereafter | 422,798 | |
Total | $ 1,085,942 | $ 655,528 |
BALANCE SHEET COMPONENTS - Restructuring Costs (Details) - Facility Closing [Member] - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
Nov. 30, 2021 |
Nov. 30, 2020 |
|
Restructuring Reserve [Roll Forward] | ||||
Restructuring Reserve | $ 11,451 | $ 15,806 | $ 12,406 | $ 17,810 |
Restructuring Reserve, Accrual Adjustment | 47 | |||
-2004000 | $ (1,002) | $ (2,004) |
DERIVATIVE INSTRUMENTS - Effect of Derivative Instruments on AOCI and Statements of Operations (Details) - Foreign Exchange Forward - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
|
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Gain reclassified from AOCI into income | $ 905 | $ 12,193 |
(Losses) gains recognized in OCI | (3,707) | (9,325) |
Other expense (income), net | Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
(Loss) gain recognized from foreign exchange forward contracts, net | (1,012) | (2,767) |
Selling, general and administrative expenses | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Gain reclassified from AOCI into income | 490 | 3,358 |
Cost of revenue for services | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Gain reclassified from AOCI into income | $ 415 | $ 8,835 |
DERIVATIVE INSTRUMENTS - Narrative (Details) $ in Thousands |
3 Months Ended |
---|---|
Feb. 28, 2022
USD ($)
| |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Existing gains expected to be reclassified | $ 6,376 |
BORROWINGS - Schedule of Debt (Details) - USD ($) $ in Thousands |
Feb. 28, 2022 |
Nov. 30, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Credit Facility - current portion of Term Loan component | $ 78,750 | $ 0 |
Long-term debt, before unamortized debt discount and issuance costs | 2,275,250 | 805,000 |
Less: unamortized debt discount and issuance costs | (8,604) | (2,983) |
Long-term debt, net | 2,266,646 | 802,017 |
Securitization Facility | ||
Debt Instrument [Line Items] | ||
Credit Facility - Term Loan component | 254,000 | 105,000 |
Senior Secured Credit Facility | Term Loan | ||
Debt Instrument [Line Items] | ||
Credit Facility - current portion of Term Loan component | 78,750 | 0 |
Credit Facility - Term Loan component | $ 2,021,250 | $ 700,000 |
EARNINGS PER SHARE - Narrative (Details) - shares |
Feb. 28, 2022 |
Nov. 30, 2021 |
---|---|---|
Earnings Per Share [Abstract] | ||
Common stock, shares issued (in shares) | 52,011,000 | 51,927,000 |
REVENUE (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
|
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 1,536,052 | $ 1,353,278 |
Technology and consumer electronics | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 470,199 | 412,818 |
Communications and media | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 260,643 | 248,790 |
Retail, travel and ecommerce | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 284,917 | 239,001 |
Banking, financial services and insurance | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 243,246 | 209,084 |
Healthcare | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 150,136 | 125,224 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 126,911 | $ 118,361 |
PENSION AND EMPLOYEE BENEFITS PLANS (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
Nov. 30, 2021 |
|
Retirement Benefits [Abstract] | |||
Contributed amount | $ 21,812 | $ 20,174 | |
Net benefit costs | 5,722 | $ 3,311 | |
Plan underfunded amount | $ 102,276 | $ 104,689 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
Feb. 28, 2022 |
Nov. 30, 2021 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | $ 56,046 | $ 56,308 |
Unrecognized tax benefits that would affect income tax expense if recognized | 48,241 | 48,438 |
Interest and penalties accrued on unrecognized tax benefits | 8,884 | 8,861 |
Unrecognized tax benefits decrease amount | $ 6,484 | $ 12,693 |
LEASES - Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
|
Leases [Abstract] | ||
Operating lease cost | $ 50,802 | $ 51,441 |
Short-term lease cost | 4,337 | 3,708 |
Variable lease cost | 11,984 | 10,120 |
Sublease income | (735) | (472) |
Total operating lease cost | $ 66,388 | $ 64,797 |
LEASES - Operating Lease Liability Maturity (Details) $ in Thousands |
Feb. 28, 2022
USD ($)
|
---|---|
Leases [Abstract] | |
2022 (remaining nine months) | $ 145,077 |
2023 | 160,906 |
2024 | 121,676 |
2025 | 76,990 |
2026 | 32,099 |
Thereafter | 21,730 |
Total payments | 558,478 |
Less: imputed interest | 55,638 |
Total present value of lease payments | $ 502,840 |
LEASES - Operating Lease ROU Assets and Liabilities (Details) - USD ($) $ in Thousands |
Feb. 28, 2022 |
Nov. 30, 2021 |
---|---|---|
Leases [Abstract] | ||
Operating lease ROU assets | $ 483,083 | $ 489,171 |
Current operating lease liabilities | 158,865 | 153,329 |
Non-current operating lease liabilities | $ 343,975 | $ 354,471 |
Operating lease, right-of-use asset, statement of financial position | Other assets | Other assets |
Operating lease, liability, current, statement of financial position | Other accrued liabilities | Other accrued liabilities |
Operating Lease, liability, noncurrent, statement of financial position | Other long-term liabilities | Other long-term liabilities |
LEASES - Operating Lease Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Feb. 28, 2022 |
Feb. 28, 2021 |
|
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 50,044 | $ 54,004 |
Non-cash ROU assets obtained in exchange for lease liabilities | $ 37,492 | $ 14,873 |
LEASES - Operating Lease Weighted Average Remaining Lease Term and Discount Rate (Details) |
Feb. 28, 2022 |
Nov. 30, 2021 |
---|---|---|
Leases [Abstract] | ||
Weighted-average remaining lease term (years) | 3 years 8 months 4 days | 3 years 9 months 21 days |
Weighted-average discount rate | 5.50% | 5.82% |
STOCKHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands |
Mar. 29, 2022 |
Jan. 18, 2022 |
Sep. 27, 2021 |
Feb. 28, 2022 |
Sep. 30, 2021 |
---|---|---|---|---|---|
Equity [Abstract] | |||||
Stock Repurchase Program, Authorized Amount | $ 500,000 | ||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.25 | $ 0.25 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 474,900 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Common stock quarterly dividend declared (in dollars per share) | $ 0.25 |
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