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Synaptics Reports Record Second Quarter Results
SAN JOSE, Calif., Jan 20, 2005 /PRNewswire-FirstCall via COMTEX/ -- Synaptics (Nasdaq: SYNA), a leader in interface solutions for mobile computing, communications, and entertainment devices, today reported financial results for the second fiscal quarter ended December 31, 2004.
Net revenue for the second quarter of fiscal 2005 was $56.5 million, an increase of approximately 65% over the $34.3 million of net revenue for the second quarter of fiscal 2004. Net income for the second quarter of fiscal 2005 was $9.7 million, or $0.33 per diluted share. This represents an increase of approximately 178% compared with net income of $3.5 million, or $0.13 per diluted share, for the second quarter of fiscal 2004.
"We had a tremendous quarter and achieved our third consecutive quarter of record revenue and earnings," stated Francis Lee, President and Chief Executive Officer of Synaptics. "Our results reflect robust demand for portable digital music players during the holiday season as revenue outside of the PC market grew sharply to 43% of total revenue compared with 33% in the immediately preceding quarter. Our performance in the notebook segment was also better than anticipated, as total PC revenue grew 26% sequentially, including contributions from our desktop and peripherals initiatives."
Russ Knittel, Synaptics' Chief Financial Officer, added, "We are entering the March quarter with a very strong backlog of approximately $35 million and, based on current indicators, are projecting revenue in the third fiscal quarter to be approximately flat compared to the December quarter. This projection is based on expected seasonal declines in the notebook sector, offset by continued robust demand for portable music players. We expect revenue in the June quarter to be up sequentially from March quarter levels based on our current visibility and typical consumer patterns. Fiscal 2005 is shaping up to be an outstanding year based on our record first half performance and current outlook for the second half of the year."
Earnings Call Information
The Synaptics second quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 20, 2005, during which management may discuss 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 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% 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 San Jose, California. The company's website is www.synaptics.com.
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' revenue expectations and competitive position in the notebook computer market, portable music player market and new market initiatives. 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) the failure of Synaptics' products and OEMs' products to deliver commercially acceptable performance, and (d) other risks as identified from time to time in Synaptics' SEC reports, including the Quarterly Reports on Form 10-Q, current reports on Form 8-K, and the Annual Report on Form 10-K for the fiscal year ended June 30, 2004. All forward-looking statements are based on information available to Synaptics on the date hereof, and Synaptics assumes no obligation to update such statements.
Russ Knittel Jennifer Jarman
Synaptics Incorporated The Blueshirt Group
408-434-0110x140 415-217-7722
russk@synaptics.com jennifer@blueshirtgroup.com
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31, June 30,
2004 2004
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $193,444 $59,489
Short term investments 36,460 36,810
Accounts receivable, net of allowances
of $174 and $130 at December 31, 2004,
and June 30, 2004, respectively 34,629 21,875
Inventories 10,934 6,525
Prepaid expenses and other current assets 3,214 3,083
Total current assets 278,681 127,782
Property and equipment, net 2,129 1,829
Goodwill 1,927 1,927
Other assets 5,499 1,115
Total assets $288,236 $132,653
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $11,352 $9,220
Accrued compensation 4,596 4,594
Accrued warranty 451 704
Income taxes payable 2,401 4,018
Other accrued liabilities 4,541 2,594
Capital leases and equipment financing
obligations -- 28
Total current liabilities 23,341 21,158
Note payable to a related party 1,500 1,500
Convertible senior subordinated notes 125,000 --
Other liabilities 866 855
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; 26,135,918 and
24,987,398 shares issued and
outstanding, respectively 26 25
Additional paid in capital 102,348 88,334
Deferred stock compensation (447) (634)
Retained earnings 35,730 21,575
Accumulated other comprehensive loss (128) (160)
Total stockholders' equity 137,529 109,140
Total liabilities and stockholders' equity $288,236 $132,653
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2004 2003 2004 2003
Net revenue $56,543 $34,274 $94,634 $63,845
Cost of revenue 30,155 20,134 51,054 37,561
Gross margin 26,388 14,140 43,580 26,284
Operating expenses
Research and development 6,248 5,130 12,291 10,226
Selling, general, and administrative 4,388 3,293 8,154 6,367
Amortization of deferred stock
compensation 85 132 187 269
Restructuring -- -- -- 432
Total operating expenses 10,721 8,555 20,632 17,294
Operating income 15,667 5,585 22,948 8,990
Interest income 397 229 665 455
Interest expense (151) (34) (177) (68)
Income before income taxes 15,913 5,780 23,436 9,378
Provision for income taxes 6,189 2,279 9,281 3,610
Net income $9,724 $3,501 $14,155 $5,768
Net income per share:
Basic $0.38 $0.15 $0.56 $0.24
Diluted $0.33 $0.13 $0.50 $0.22
Shares used in computing net income
per share:
Basic 25,816 24,113 25,457 24,064
Diluted 29,372 26,725 28,641 26,603
Computation of basic and diluted net income per share:
(in thousands except per share data)
Three Months Ended Six Months Ended
December 31, December 31,
2004 2003 2004 2003
Numerator for basic net income per
share:
Net income $9,724 $3,501 $14,155 $5,768
Numerator for diluted net income per
share:
Net income 9,724 3,501 14,155 5,768
Interest expense and amortization
of debt issuance costs on convertible
notes (net of tax) 69 -- 69 --
Numerator for diluted net income per
share $9,793 $3,501 $14,224 $5,768
Denominator for basic net income per
share:
Weighted average common shares
outstanding 25,816 24,113 25,457 24,064
Denominator for diluted net income
per share:
Shares used above, basic 25,816 24,113 25,457 24,064
Effect of dilutive stock options 3,067 2,612 2,939 2,539
Effect of convertible notes 489 -- 245 --
Denominator for diluted net income
per share 29,372 26,725 28,641 26,603
Net income per share:
Basic $0.38 $0.15 $0.56 $0.24
Diluted $0.33 $0.13 $0.50 $0.22
SOURCE Synaptics Incorporated
Russ Knittel of Synaptics Incorporated, +1-408-434-0110, ext. 140, or russk@synaptics.com; or Jennifer Jarman of The Blueshirt Group, +1-415-217-7722, or jennifer@blueshirtgroup.com, for Synaptics Incorporated
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