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Synaptics Reports Record Results for Fiscal 2011

SANTA CLARA, Calif., July 28, 2011 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions for mobile computing, communications, and entertainment devices, today reported financial results for its fourth fiscal quarter and year ended June 30, 2011.  

Net revenue for fiscal 2011 reached a record $598.5 million, an increase of 16% over net revenue of $514.9 million for fiscal 2010.  Net income for fiscal 2011 of $63.8 million, or $1.80 per diluted share, was also a record and increased 20% over net income of $53.0 million, or $1.50 per diluted share, for fiscal 2010.  

Non-GAAP net income for fiscal 2011 of $88.9 million, or $2.51 per diluted share, was also a record.  Non-GAAP net income and diluted earnings per share for fiscal 2010 were $80.0 million and $2.26, respectively. (See attached table for a reconciliation of GAAP to non-GAAP results.)

Net revenue for the fourth quarter of fiscal 2011 was $143.4 million compared with $145.8 million for the comparable quarter last year.  Net income for the fourth quarter of fiscal 2011 was $13.9 million, or $0.40 per diluted share, compared with net income of $19.3 million, or $0.54 per diluted share, for the comparable quarter last year.  

Non-GAAP net income for the fourth quarter of fiscal 2011 was $19.8 million, or $0.57 per diluted share, compared with non-GAAP net income of $24.8 million, or $0.70 per diluted share, for the fourth quarter of fiscal 2010.  (See attached table for a reconciliation of GAAP to non-GAAP results.)  

"We are pleased to report our third consecutive year of record results," stated Russ Knittel, Interim President and CEO.  "During the year, we made great progress in enhancing and broadening our product portfolio.  We are very pleased with our customers' response, evidenced by increased design activity, and enter fiscal 2012 well positioned to meet customer requirements and the expanding market opportunities."

For the fourth quarter of fiscal 2011, PC revenue of $77.8 million decreased 8% from the comparable quarter last year and represented 54% of total revenue.  Non-PC revenue of $65.6 million represented 46% of total revenue for the fourth quarter of fiscal 2011 and increased 7% over the comparable quarter last year.  Non-PC revenue consisted almost entirely of revenue from mobile phone applications, reflecting continued strong unit growth.  

Cash at June 30, 2011 totaled $247.2 million.  Cash flow from operations for the fourth quarter of fiscal 2011 was $25.2 million, and the company used $30 million to repurchase one million shares of common stock.  Cash flow from operations for the fiscal year was $89.7 million, and $70.2 million was used to repurchase 2.5 million shares of common stock.

Kathy Bayless, CFO, added, "Considering our backlog of approximately $76.0 million, customer forecasts, and the resulting expected product mix, we anticipate revenue to be in the range of $128.0 million to $136.0 million for the September quarter.  We expect PC revenue to be flat to down on a sequential basis, reflecting the timing difference between our sell-in and OEM sell-through, as well as lower revenue from mobile applications due to changes in product mix."  

Mr. Knittel added, "The ongoing product transition away from integrated touchscreen modules in the first half of fiscal 2012 will be evident in our top line comparisons year-over-year, resulting in lower revenue, but also expanding gross margin.  We anticipate returning to double-digit revenue growth in the second half of fiscal 2012, resulting in revenue of flat to slightly up for the fiscal year.  We expect gross margins to trend up toward the high end of our historical range, providing operating profit leverage."

Earnings Call Information

The Synaptics fourth quarter fiscal 2011 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, July 28, 2011, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 877-941-4774 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 (NASDAQ: SYNA) is a leading developer of human 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, tablets, and mobile phones. The TouchPad™, 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. www.synaptics.com

Use of Non-GAAP Financial Information

In evaluating its business, Synaptics considers and uses net income per share excluding share-based compensation, non-cash interest charges, and unusual or non-recurring items as a supplemental measure of operating performance.  Net income excluding share-based compensation, non-cash interest charges, and unusual or non-recurring items is not a measurement of the company's financial performance under GAAP and should not be considered as an alternative to GAAP net income. The company presents net income excluding share-based compensation, non-cash interest charges, and unusual or non-recurring items because it considers it an important supplemental measure of its performance. The company believes this measure facilitates operating performance comparisons from period to period by eliminating potential differences in net income caused by the existence and timing of share-based compensation charges, non-cash interest charges, and unusual or non-recurring items. Net income excluding share-based compensation, non-cash interest charges, and unusual or non-recurring items has limitations as an analytical tool and should not be considered in isolation or as a substitute for the company's GAAP net income.  The principal limitations of this measure are that it does not reflect the company's actual expenses and may thus have the effect of inflating its 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 the company's assessment of the progress it has made in enhancing and broadening its product portfolio; the response of the company's customers as evidenced by increased design activity; the company's belief that it is well positioned to meet customer requirements and expanding market opportunities; the company's belief that its ongoing product transition will be evident in its top line comparisons year-over-year, but also expanding gross margin; the company's anticipation of returning to double-digit revenue growth in the second half of fiscal 2012, resulting in revenue to be flat to slightly up for the fiscal year with gross margins trending up toward the high end of its historic range providing operating profit leverage; the company's anticipated revenue for the September quarter; the company's expectations that PC revenue for its September quarter will be flat to down from the June quarter due to timing differences; and the company's expectations that revenue from mobile applications for its September quarter will be lower than the June quarter due to changes in product mix.  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 Synaptics serves, (d) the success of Synaptics' customers' products that utilize Synaptics' product solutions, (e) the development and launch cycles of Synaptics' customers' products, (f) market pressures on selling prices, (g) changes in product mix, (h) the market acceptance of Synaptics' product solutions compared with competitors' solutions, (i) general economic conditions, including consumer confidence and demand, and (j) 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, 2010. 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)

For more information contact:

Jennifer Jarman
The Blueshirt Group
415-217-5866
jennifer@blueshirtgroup.com





SYNAPTICS INCORPORATED








CONSOLIDATED BALANCE SHEETS








(In thousands, except share data)








(Unaudited)

















June 30,


June 30,






2011


2010









Assets







Current assets:







Cash and cash equivalents                                                                

$ 247,153


$ 209,858


Receivables, net of allowances of $709 and $500, respectively

93,808


101,509


Inventories                                                                              

28,850


18,667


Prepaid expenses and other current assets                                                    

4,373


4,471

Total current assets                                                                    

374,184


334,505









Property and equipment, net                                                              

26,222


25,821

Goodwill                                                                            

1,927


1,927

Non-current auction rate securities

25,876


28,012

Other assets                                                                                

27,992


24,414

Total assets                                                                              

$ 456,201


$ 414,679





Liabilities and stockholders' equity




Current liabilities:






Accounts payable                                                                          

$   44,930


$   65,618


Accrued compensation                                                                      

13,210


11,330


Income taxes payable

11,808


10,061


Other accrued liabilities                                                                    

22,813


18,962

Total current liabilities                                                                  

92,761


105,971









Convertible senior subordinated notes

2,305


2,305

Other liabilities                                                                            

21,142


19,892









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; 120,000,000 and 60,000,000 shares authorized;  46,832,208 and







44,891,834 shares issued, and 33,465,732 and 34,020,521







shares outstanding, respectively

47


45


Additional paid in capital

406,653


347,764


Less:  13,366,476 and 10,871,313  treasury shares, respectively, at cost

(352,142)


(281,932)


Retained earnings

282,915


219,119


Accumulated other comprehensive income

2,520


1,515

Total stockholders' equity                                                                

339,993


286,511

Total liabilities and stockholders' equity                                              

$ 456,201


$ 414,679



SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)



























Three Months Ended


Twelve Months Ended





June 30,


June 30,





2011


2010


2011


2010












Net revenue                                                


$ 143,366


$ 145,763


$ 598,538


$ 514,890

Cost of revenue (1)                                


82,778


86,516


352,468


306,188

Gross margin                                                  


60,588


59,247


246,070


208,702

Operating expenses










Research and development (1)                          


27,487


22,923


105,003


86,552


Selling, general, and administrative (1)          


16,799


15,053


68,549


60,027

Total operating expenses                                      


44,286


37,976


173,552


146,579












Operating income                                  


16,302


21,271


72,518


62,123

Interest income


232


205


911


977

Interest expense                                                


(4)


(5)


(17)


(2,400)

Impairment (loss)/recovery on investments, net


39


-


59


(443)

Income before income taxes                


16,569


21,471


73,471


60,257

Provision for income taxes (2)                                    


2,646


2,143


9,675


7,292

Net income                                        


$   13,923


$   19,328


$   63,796


$   52,965












Net income per share:










Basic                                                      


$       0.41


$       0.57


$       1.87


$       1.57


Diluted                                                    


$       0.40


$       0.54


$       1.80


$       1.50












Shares used in computing net income per share:










Basic                                                          


33,816


33,867


34,042


33,836


Diluted                                                      


35,011


35,514


35,454


35,423


































(1) Includes share-based compensation charges of:






















Cost of revenue


$        262


$        491


$     1,294


$     2,307



Research and development


3,694


3,558


13,823


14,330



Selling, general, and administrative


4,261


3,988


18,808


18,739





$     8,217


$     8,037


$   33,925


$   35,376












(2) Includes tax benefit for share-based compensation charges of:
























$     2,319


$     2,600


$     9,745


$     9,642


































Non-GAAP net income per share:











Basic


$       0.58


$       0.73


$       2.61


$       2.36



Diluted


$       0.57


$       0.70


$       2.51


$       2.26



SYNAPTICS INCORPORATED

Reconciliation of Non-GAAP Net Income and Net Income Per Share

(In thousands, except per share data)

(Unaudited)
















Three Months Ended


Twelve Months Ended





June 30,


June 30,





2011


2010


2011


2010












Reported net income


$ 13,923


$ 19,328


$ 63,796


$ 52,965

Non-GAAP adjustments (net of tax):










Non-recurring CEO resignation costs


-


-


1,006


-


Net (gain)/loss on investments


(39)


-


(59)


443


Non-cash interest expense


-


-


-


1,192


Discrete tax items


-


-


-


(370)


Share-based compensation


5,898


5,437


24,180


25,734

Non-GAAP basic and diluted net income


$ 19,782


$ 24,765


$ 88,923


$ 79,964












Non-GAAP net income per share:










Basic


$     0.58


$     0.73


$     2.61


$     2.36


Diluted


$     0.57


$     0.70


$     2.51


$     2.26



SOURCE Synaptics Inc.

News Provided by Acquire Media

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This website contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business, and can be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements may include words such as "expect," "anticipate," "intend," "believe," "estimate," "plan," "target," "strategy," "continue," "may," "will," "should," variations of such words, or other words and terms of similar meaning. All forward-looking statements reflect our best judgment and are based on several factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Such factors include, but are not limited to, the risks as identified in the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" sections of our Annual Report on Form 10-K for our most recent fiscal year, and other risks as identified from time to time in our Securities and Exchange Commission reports. Forward-looking statements are based on information available to us on the date hereof, and we do not have, and expressly disclaim, any obligation to publicly release any updates or any changes in our expectations, or any change in events, conditions, or circumstances on which any forward-looking statement is based. Our actual results and the timing of certain events could differ materially from the forward-looking statements. These forward-looking statements do not reflect the potential impact of any mergers, acquisitions, or other business combinations that had not been completed as of the date of this filing.

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