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Synaptics Reports Fourth Quarter and Fiscal 2007 Results
SANTA CLARA, Calif., Aug 09, 2007 /PRNewswire-FirstCall via COMTEX News Network/ --
Synaptics (Nasdaq: SYNA), a leading developer of human interface solutions for mobile computing, communications, and entertainment devices, today reported financial results for the fourth quarter and year ended June 30, 2007. The Company's GAAP results reflect the expensing of non-cash share-based compensation for all periods presented.
Net revenue for the fourth quarter of fiscal 2007 was $71.6 million, an increase of approximately 63% over the $43.9 million for the fourth quarter of fiscal 2006. Net income for the fourth quarter of fiscal 2007 was $7.4 million, or $0.27 per diluted share, compared with net income of $1.8 million, or $0.07 per diluted share, for the fourth quarter of fiscal 2006. Net income, excluding share-based compensation, was $10.0 million, or $0.36 per diluted share, for the fourth quarter of fiscal 2007, compared with $4.2 million, or $0.15 per diluted share, for the fourth quarter of fiscal 2006.
Net revenue for fiscal 2007 was $266.8 million, an increase of approximately 45% over the $184.6 million for fiscal 2006. Net income for fiscal 2007 was $26.5 million, or $0.94 per diluted share. This compares with net income of $13.7 million, or $0.51 per diluted share, for fiscal 2006. Net income, excluding share-based compensation and non-recurring items for fiscal 2007, was $37.6 million, or $1.31 per diluted share, compared with net income, excluding share-based compensation, of $24.0 million, or $0.85 per diluted share, for fiscal 2006.
"Fiscal 2007 was a stellar year for Synaptics as we achieved record annual revenue, growing our top line 45%, and almost doubling our net income compared with fiscal 2006," stated Francis Lee, president and chief executive officer of Synaptics. "Our solid performance reflects strong growth in all of our target markets. During the year, we also introduced our configurable OneTouch offering. We believe the addition of OneTouch to our solutions portfolio enhances our ability to serve our customers' needs and to compete in multiple fast-growing markets. The growing mobility and digital lifestyle trends play into our strengths as emerging products and applications require intuitive, easy-to-use interface solutions. We are very excited by the expanding opportunities in front of us and believe we are well positioned to deliver record revenues and profits in fiscal 2008."
Russ Knittel, the Company's chief financial officer, added, "Based on our backlog of $46.9 million entering the September quarter and anticipated new orders during the period, we expect revenue for our first fiscal quarter to be up 16% to 19% sequentially, representing a 51% to 55% increase over the comparable period last year. Looking out to the seasonally strong December quarter, current data points lead us to believe that revenues will increase 10% to 15% sequentially as compared to our September quarter expectations."
Earnings Call Information
The Synaptics fourth quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, August 9, 2007, 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 http://www.synaptics.com.
About Synaptics Incorporated
Synaptics is a leading developer of human interface solutions for mobile computing, communications, and entertainment devices. 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 a majority 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. http://www.synaptics.com
NOTE: Synaptics, TouchPad, and the Synaptics logo are trademarks of Synaptics in the United States and/or other countries.
Use of Non-GAAP Financial Information
In evaluating our business, we consider and use net income per share excluding share-based compensation and non-recurring items as a supplemental measure of operating performance. Net income excluding share-based compensation and non-recurring items 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 and non-recurring items 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 and non-recurring items. Net income excluding share-based compensation and non-recurring items 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.
Forward-Looking Statements
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, revenue growth rates and anticipated customer orders in the first half of fiscal 2008; 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, (b) market demand for OEMs' products using Synaptics' solutions, (c) changing market demand trends in the markets it serves, 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.
(Tables to Follow)
SYNAPTICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
June 30, June 30,
2007 2006
Assets
Current assets:
Cash and cash equivalents $45,915 $38,724
Short term investments 219,102 206,452
Total cash, cash equivalents,
and short-term investments 265,017 245,176
Receivables, net of allowances of
$419 and $189, respectively 56,721 34,034
Inventories 12,034 10,010
Prepaid expenses and other current assets 4,245 3,407
Total current assets 338,017 292,627
Property and equipment, net 19,400 16,038
Goodwill 1,927 1,927
Other assets 13,968 20,829
Total assets $373,312 $331,421
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $21,552 $16,542
Accrued compensation 5,372 4,842
Income taxes payable 3,400 8,078
Other accrued liabilities 6,272 5,377
Note payable to a related party 1,500 -
Total current liabilities 38,096 34,839
Note payable to a related party - 1,500
Convertible senior subordinated notes 125,000 125,000
Other liabilities 2,129 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; 29,666,660 and
27,462,125 shares issued, respectively 30 27
Additional paid in capital 180,746 134,217
Less: 3,588,100 and 2,306,100
treasury shares, respectively, at cost (72,345) (39,999)
Retained earnings 99,795 73,261
Accumulated other comprehensive loss (139) (464)
Total stockholders' equity 208,087 167,042
Total liabilities and stockholders' equity $373,312 $331,421
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30,
2007 2006 2007 2006
Net revenue $71,576 $43,912 $266,787 $184,557
Cost of revenue (1) 43,635 25,010 160,913 101,704
Gross margin 27,941 18,902 105,874 82,853
Operating expenses
Research and development (1) 10,755 9,616 39,386 35,356
Selling, general, and
administrative (1) 10,180 7,426 36,247 28,019
Restructuring costs - - 915 -
Total operating expenses 20,935 17,042 76,548 63,375
Operating income 7,006 1,860 29,326 19,478
Interest income 2,825 2,353 11,055 7,984
Interest expense (487) (485) (1,950) (1,939)
Income before income taxes 9,344 3,728 38,431 25,523
Provision for income taxes (2) 1,913 1,965 11,897 11,822
Net income $7,431 $1,763 $26,534 $13,701
Net income per share:
Basic $0.29 $0.07 $1.04 $0.55
Diluted $0.27 $0.07 $0.94 $0.51
Shares used in computing net income
per share:
Basic 25,710 25,028 25,558 24,708
Diluted 27,678 29,263 29,064 29,075
(1) Includes share-based
compensation charges of:
Cost of revenue $258 $157 $750 $682
Research and development 1,355 1,099 5,091 4,799
Selling, general, and
administrative 2,284 1,967 8,453 7,719
$3,897 $3,223 $14,294 $13,200
(2) Includes tax benefit for
share-based compensation charges
of:
$1,365 $755 $4,140 $2,940
Non-GAAP net income per share
Basic $0.39 $0.17 $1.47 $0.97
Diluted $0.36 $0.15 $1.31 $0.85
SYNAPTICS INCORPORATED
Computation of Basic and Diluted Net Income Per Share
(in thousands except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30,
2007 2006 2007 2006
Numerator:
Basic net income $7,431 $1,763 $26,534 $13,701
Interest expense and
amortization of debt issuance
costs on convertible notes
(net of tax) 76 266 878 1,064
Diluted net income $7,507 $2,029 $27,412 $14,765
Denominator:
Shares, basic 25,710 25,028 25,558 24,708
Effect of dilutive share-based
awards 1,261 1,761 1,465 1,893
Effect of convertible notes 707 2,474 2,041 2,474
Shares, diluted 27,678 29,263 29,064 29,075
Net income per share:
Basic $0.29 $0.07 $1.04 $0.55
Diluted $0.27 $0.07 $0.94 $0.51
Computation of non-GAAP basic and diluted net income per
share (unaudited):
Numerator:
Reported net income $7,431 $1,763 $26,534 $13,701
Non-GAAP adjustments:
Restructuring costs (net of
tax) - - 890 -
Share-based compensation
(net of tax) 2,532 2,468 10,154 10,260
Non-GAAP basic net income 9,963 4,231 37,578 23,961
Interest expense and
amortization of debt issuance
costs on convertible notes
(net of tax) 76 266 878 1,064
Non-GAAP diluted net income $10,039 $4,497 $38,456 $25,025
Denominator:
Shares, basic 25,710 25,028 25,558 24,708
Effect of dilutive share-based
awards 1,587 1,997 1,763 2,142
Effect of convertible notes 707 2,474 2,041 2,474
Shares, diluted 28,004 29,499 29,362 29,324
Non-GAAP net income per share:
Basic $0.39 $0.17 $1.47 $0.97
Diluted $0.36 $0.15 $1.31 $0.85
For more information contact:
Jennifer Jarman
The Blueshirt Group
415-217-7722
jennifer@blueshirtgroup.com
SOURCE Synaptics Incorporated
Jennifer Jarman of The Blueshirt Group, +1-415-217-7722, jennifer@blueshirtgroup.com, for Synaptics Incorporated
http://www.synaptics.com
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