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Synaptics Reports Record Second Quarter Results
SAN JOSE, Calif., Jan 22, 2004 /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, 2003.
Net revenue for the second quarter of fiscal 2004 was $34.3 million, a 42% increase compared to $24.2 million for the second quarter of the prior fiscal year. Actual (GAAP) net income for the second quarter of fiscal 2004 was $3.5 million, or $0.13 per diluted share, which includes non-cash charges related to the amortization of deferred stock-based compensation of $132,000, or $0.01 per diluted share. This represents a 90% increase from actual net income of $1.8 million, or $0.07 per diluted share, for the comparable quarter of the prior fiscal year.
"We achieved record profitability and our third consecutive quarter of record revenues in the December quarter as we benefited from strong notebook sales during the holiday period and exceptional growth in the non-notebook sector, which represented approximately 16% of total revenues," stated Francis Lee, President and Chief Executive Officer of Synaptics. "Design levels and implementations for our notebook TouchPad products remained very healthy and our non-notebook results were led by strong traction in the portable digital entertainment market. We are encouraged by our ongoing efforts in the portable digital device arena, which point to increasing design activity in the months ahead. We also continued to strengthen our balance sheet during the quarter, exiting December with over $84 million in cash and short-term investments."
Russ Knittel, Synaptics' Chief Financial Officer, added, "Our current assessment of the notebook market suggests that sell through levels in the December quarter were generally as expected, and we ended the period with a backlog of over $17 million. As we exit the seasonally strongest quarter of the calendar year, we expect to see the impact of seasonality in the notebook market in the March quarter, but believe it will be at the lower end of the historical range for the industry. We expect this trend to be offset by continued strength in the portable digital entertainment market and are forecasting revenues to be essentially flat in the March quarter and up slightly in the June quarter based on current visibility."
Earnings Call Information
The Synaptics second quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 22, 2004. To participate on the live call, analysts and investors should dial 800-257-7063 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/ . A telephonic replay of the conference call will also be available for 48 hours by dialing 800-405-2236 and entering the passcode: 566021.
About Synaptics Incorporated
Synaptics is a leading developer of interface solutions for mobile computing, communications and entertainment devices, with its products found in over 50 percent of today's notebook computers. Synaptics' engineered solutions for device manufacturers include: TouchPad(TM) the industry standard notebook pointing device; TouchStyk(TM), a modular capacitive pointing stick solution; SpeakerPad(TM), an integrated audio speaker and notebook TouchPad; LuxPad(TM), an illuminated TouchPad; TouchRing(TM), a one dimensional scrolling solution for MP3 devices; and QuickStroke(R), a proprietary Chinese handwriting recognition software. More information about Synaptics can be found on the World Wide Web at www.synaptics.com.
This press release contains "forward-looking" statements, 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, earnings expectations, cash flow expectations, and competitive position in both notebook computers 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) market demand for Synaptics' products, (b) market demand for OEMs' products using Synaptics' products, (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 Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2003. All forward-looking statements are based on information available to Synaptics on the date hereof, and Synaptics assumes no obligation to update such statements.
For more information contact:
Russ Knittel Jennifer Jarman
Synaptics Incorporated the blueshirt group
408-434-0110 x 140 415-217-7722
russk@synaptics.com jennifer@blueshirtgroup.com
SYNAPTICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
Dec. 31, June 30,
2003 2003
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $47,849 $41,697
Short term investments 36,222 35,589
Restricted cash 240 240
Accounts receivable, net of allowances
of $130 and $160 at December 31, 2003,
and June 30, 2003, respectively 17,717 13,181
Inventories 5,081 6,428
Prepaid expenses and other current assets 2,197 2,637
Total current assets 109,306 99,772
Property and equipment, net 1,755 1,934
Goodwill 1,891 1,968
Other assets 834 834
Total assets $113,786 $104,508
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $5,855 $6,893
Accrued compensation 3,424 2,808
Accrued warranty 937 1,002
Income taxes payable 4,419 1,661
Other accrued liabilities 2,922 3,362
Capital leases and equipment financing
obligations 94 231
Total current liabilities 17,651 15,957
Capital leases and equipment financing
obligations, net of current portion -- 28
Note payable to a related party 1,500 1,500
Other liabilities 829 759
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; 24,264,165 and 23,835,877
shares issued and outstanding,
respectively 24 24
Additional paid in capital 80,293 78,761
Deferred stock compensation (901) (1,184)
Notes receivable from stockholders -- (20)
Retained earnings 14,351 8,583
Accumulated other comprehensive income 39 100
Total stockholders' equity 93,806 86,264
Total liabilities and stockholders' equity $113,786 $104,508
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2003 2002 2003 2002
Net revenue $34,274 $24,199 $63,845 $46,376
Cost of revenue 20,134 13,917 37,560 26,360
Gross margin 14,140 10,282 26,285 20,016
Operating expenses
Research and
development 5,130 4,812 10,226 10,135
Selling, general,
and administrative 3,293 2,638 6,367 5,242
Amortization of
intangible assets -- 10 -- 40
Amortization of
deferred stock
compensation 132 116 269 226
Restructuring -- -- 432 --
Total operating
expenses 8,555 7,576 17,294 15,643
Operating income 5,585 2,706 8,991 4,373
Interest and other
income, net 229 279 455 556
Interest expense (34) (47) (68) (86)
Income before income
taxes 5,780 2,938 9,378 4,843
Provision for
income taxes 2,279 1,093 3,610 1,798
Net income $3,501 $1,845 $5,768 $3,045
Net income per share:
Basic $0.15 $0.08 $0.24 $0.13
Diluted $0.13 $0.07 $0.22 $0.12
Shares used in
computing net
income per
share:
Basic 24,112,862 23,386,723 24,063,583 23,309,271
Diluted 26,725,178 25,083,296 26,602,849 24,957,002
Pro forma results
(unaudited)
Reported net
income $3,501 $1,845 $5,768 $3,045
Pro forma
adjustments:
Amortization of
goodwill and
other acquired
intangible
assets -- 10 -- 40
Amortization of
deferred stock
compensation 132 116 269 226
Restructuring
(tax effected) -- -- 272 --
Pro forma net income $3,633 $1,971 $6,309 $3,311
Pro forma earnings
per share
Basic $0.15 $0.08 $0.26 $0.14
Diluted $0.14 $0.08 $0.24 $0.13
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
http://www.synaptics.com
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