Synaptics Reports First Quarter Results
SANTA CLARA, Calif., Oct 19, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Synaptics (Nasdaq: SYNA), a leading developer of interface solutions for mobile computing, communications, and entertainment devices, today reported financial results for the first fiscal quarter ended September 30, 2006. The Company's GAAP results reflect the expensing of non-cash share-based compensation for all periods presented.
Net revenue for the first quarter of fiscal 2007 was $54.8 million, an increase of approximately 6% over $51.7 million for the first quarter of fiscal 2006. Net income for the first quarter of fiscal 2007 was $4.1 million, or $0.15 per diluted share, compared with net income of $5.5 million, or $0.20 per diluted share, for the first quarter of fiscal 2006. Net income excluding share-based compensation for the first quarter of fiscal 2007 was $6.4 million, or $0.23 per diluted share, compared with net income excluding share-based compensation of $8.1 million, or $0.29 per diluted share, for the first quarter of fiscal 2006.
"Revenue for the fiscal first quarter grew nearly 25% sequentially and was at the high end of our guidance range," stated Francis Lee, President and Chief Executive Officer of Synaptics. "Our strong top line growth reflects general seasonality in our target markets and, in particular, strong demand within our core PC market based on the ramp of new designs integrating our multi-media oriented products. As anticipated, our product mix during the quarter resulted in lower gross margin, although still within our target range. We expect to see continued momentum into the holiday season and are anticipating record revenue in the December quarter."
Russ Knittel, Synaptics' Chief Financial Officer, added, "Based on our current visibility, which includes a 53% increase in our backlog to $43.9 million, we now expect sequential revenue growth in the fourteen week December quarter of 25% to 35%. This outlook is predicated on continued strong seasonal trends, with increased demand from both PC and non-PC applications. We expect revenue in the March quarter to approach September quarter levels, largely dependent on December quarter sell through and consumer demand relative to seasonal trends in the first calendar quarter. Finally, we are raising our outlook for fiscal 2007 revenue growth to a range of 25% to 30% over the prior year."
Earnings Call Information
The Synaptics first quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, October 19, 2006, during which the Company will provide forward-looking information. To participate on the live call, analysts and investors should dial 800-240-6709 at least ten minutes prior to the call. Synaptics will also offer a live and archived webcast of the conference call, accessible from the "Investor Relations" section of the Company's Web site at www.synaptics.com.
About Synaptics Incorporated
Synaptics is a leading developer of interface solutions for the mobile computing, communications, and entertainment industries. The company creates interface solutions for a variety of devices including notebook PCs, PC peripherals, digital music players, and mobile phones. The TouchPad(TM), Synaptics' flagship product, is integrated into more than 50 percent of today's notebook computers. Consumer electronics and computing manufacturers use Synaptics' solutions to enrich the interaction between humans and intelligent devices through improved usability, functionality, and industrial design. The company is headquartered in Santa Clara, California. www.synaptics.com.
Use of Non-GAAP Financial Information
In evaluating our business, our management considers and uses net income excluding share-based compensation and net income per share excluding share- based compensation as a supplemental measure of operating performance. Net income excluding share-based compensation is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income. We present net income excluding share-based compensation because we consider it an important supplemental measure of our performance. We believe this measure facilitates operating performance comparisons from period to period by eliminating potential differences in net income caused by the existence and timing of non-cash compensation charges. Net income excluding share-based compensation has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for our GAAP net income. The principal limitations of this measure are that it does not reflect our actual expenses and may thus have the effect of inflating our net income and net income per share. We address these limitations by relying primarily on our GAAP net income and using net income excluding share-based compensation only supplementally.
This press release contains "forward-looking" statements about Synaptics, as that term is defined under the federal securities laws. Synaptics intends such forward-looking statements to be subject to the safe harbor created by those laws. Such forward-looking statements include, but are not limited to, statements regarding Synaptics' anticipated revenue and revenue growth rates for the remainder of fiscal 2007, its beliefs regarding the markets it serves, its assessment of market demands and trends in target markets, and its assessment of consumer demands for various applications. Synaptics cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward- looking statements contained herein. Such factors include, but are not limited to, (a) demand for Synaptics' products in the PC and portable digital entertainment markets, (b) market demand for OEMs' products using Synaptics' solutions, (c) changing market demand trends in the markets it serves, and consumer demand, and (d) other risks as identified from time to time in Synaptics' SEC reports, including Quarterly Reports on Form 10-Q and the Annual Report on Form 10-K for the fiscal year ended June 30, 2006. All forward-looking statements are based on information available to Synaptics on the date hereof, and Synaptics assumes no obligation to update such statements.
Contact: Jennifer Jarman of The Blueshirt Group, +1-415-217-7722, for Synaptics Incorporated. SYNAPTICS INCORPORATED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) September 30, June 30, 2006 2006 Assets Current assets: Cash and cash equivalents $51,796 $38,724 Short term investments 193,867 206,452 Total cash, cash equivalents, and short-term investments 245,663 245,176 Receivables, net of allowances of $222 and $189, respectively 41,813 34,034 Inventories 9,017 10,010 Prepaid expenses and other current assets 3,732 3,407 Total current assets 300,225 292,627 Property and equipment, net 16,099 16,038 Goodwill 1,927 1,927 Other assets 20,365 20,829 Total assets $338,616 $331,421 Liabilities and stockholders' equity Current liabilities: Accounts payable $16,152 $16,542 Accrued compensation 3,864 4,842 Income taxes payable 10,969 8,078 Other accrued liabilities 7,447 5,377 Note payable to a related party 1,500 - Total current liabilities 39,932 34,839 Note payable to a related party - 1,500 Convertible senior subordinated notes 125,000 125,000 Other liabilities 2,071 3,040 Commitments and contingencies Stockholders' equity: Preferred stock; $.001 par value; 10,000,000 shares authorized; no shares issued and outstanding - - Common stock; $.001 par value; 60,000,000 shares authorized; 27,575,943 and 27,462,125 shares issued, respectively 28 27 Additional paid in capital 139,013 134,217 Less: 2,521,100 and 2,306,100 treasury shares, respectively, at cost (44,611) (39,999) Deferred stock compensation - - Retained earnings 77,388 73,261 Accumulated other comprehensive loss (205) (464) Total stockholders' equity 171,613 167,042 Total liabilities and stockholders' equity $338,616 $331,421 SYNAPTICS INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) Three Months Ended September 30, 2006 2005 Net revenue $54,815 $51,725 Cost of revenue (1) 32,420 28,053 Gross margin 22,395 23,672 Operating expenses Research and development (1) 9,188 8,289 Selling, general, and administrative (1) 7,801 6,728 Total operating expenses 16,989 15,017 Operating income 5,406 8,655 Interest income 2,539 1,551 Interest expense (487) (484) Income before income taxes 7,458 9,722 Provision for income taxes (2) 3,331 4,210 Net income $4,127 $5,512 Net income per share: Basic $0.16 $0.22 Diluted $0.15 $0.20 Shares used in computing net income per share: Basic 25,134 24,769 Diluted 29,253 29,036 (1) Includes share-based compensation charges of: Cost of revenue $147 $192 Research and development 1,035 1,292 Selling, general, and administrative 1,919 1,826 $3,101 $3,310 (2) Includes tax benefit for share- based compensation charges of: $781 $690 Non-GAAP net income per share Basic $0.26 $0.33 Diluted $0.23 $0.29 SYNAPTICS INCORPORATED Computation of Basic and Diluted Net Income Per Share (in thousands, except per share data) (Unaudited) Three Months Ended September 30, 2006 2005 Numerator: Basic net income $4,127 $5,512 Interest expense and amortization of debt issuance costs on convertible notes (net of tax) 266 266 Diluted net income $4,393 $5,778 Denominator: Shares, basic 25,134 24,769 Effect of dilutive share-based awards 1,645 1,793 Effect of convertible notes 2,474 2,474 Shares, diluted 29,253 29,036 Net income per share: Basic $0.16 $0.22 Diluted $0.15 $0.20 Computation of non-GAAP basic and diluted net income per share (unaudited): Numerator: Reported net income $4,127 $5,512 Non-GAAP adjustments: Share-based compensation, net of tax 2,320 2,620 Non-GAAP basic net income 6,447 8,132 Interest expense and amortization of debt issuance costs on convertible notes, net of tax 266 266 Non-GAAP diluted net income $6,713 $8,398 Denominator: Shares, basic 25,134 24,769 Effect of dilutive share-based awards 1,780 1,960 Effect of convertible notes 2,474 2,474 Shares, diluted 29,388 29,203 Non-GAAP net income per share: Basic $0.26 $0.33 Diluted $0.23 $0.29
SOURCE Synaptics Incorporated
Jennifer Jarman of The Blueshirt Group, +1-415-217-7722, for Synaptics Incorporated
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