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Synaptics Reports Results for Fourth Quarter and Fiscal 2013

SAN JOSE, Calif., Aug. 1, 2013 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its fourth quarter and year ended June 30, 2013. 

Net revenue for fiscal 2013 reached a record $663.6 million, an increase of 21% over net revenue of $548.2 million for fiscal 2012. Net income for fiscal 2013 of $98.9 million, or $2.89 per diluted share, was also a record and increased 83% over net income of $54.1 million, or $1.57 per diluted share, for fiscal 2012.  

Non-GAAP net income for fiscal 2013 of $106.4 million, or $3.11 per diluted share, was also a record. Non-GAAP net income and diluted earnings per share for fiscal 2012 were $78.6 million and $2.28, respectively. (See attached table for a reconciliation of GAAP to non-GAAP results.)

Net revenue for the fourth quarter of fiscal 2013 was a record $230.2 million, an increase of 67% compared with $137.6 million for the comparable quarter last year. Net income for the fourth quarter of fiscal 2013 was a record $45.3 million, or $1.29 per diluted share, compared with net income of $12.3 million, or $0.36 per diluted share, for the comparable quarter last year. 

Non-GAAP net income for the fourth quarter of fiscal 2013 of $48.9 million, or $1.39 per diluted share, was also a record. Non-GAAP net income was $18.6 million, or $0.54 per diluted share, for the fourth quarter of fiscal 2012. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.) 

"Our execution in fiscal 2013 was stellar as we successfully expanded our footprint at leading mobile customers, with our solutions included in many of the world's best-selling phones and tablets," stated Rick Bergman, President and CEO.  "Our record performance reflects our ability to innovate and lead in our markets based on the depth and breadth of our technology and the scale required to seamlessly deliver differentiated solutions to our growing global customer base." 

Fourth Quarter 2013 Business Metrics

  • Revenue mix from mobile and PC products was approximately 75% and 25%, respectively.
  • Revenue from mobile products totaled $173.2 million and was up 186% year-over-year.  Mobile products revenue includes all touchscreen and video display products.
  • Revenue from PC products totaled $57.0 million, a decrease of 26% year-over-year.
  • Gross margin was 50.0%, an increase of 390 basis points year-over-year.

Cash at June 30, 2013 was $355.3 million. Cash flow from operations for the fiscal year was $102.2 million; $46.3 million was used to repurchase 1.6 million shares of common stock, including 359,400 shares at approximately $42 per share repurchased during the fourth quarter, bringing fiscal 2013 repurchases to approximately 5% of shares outstanding.

Kathy Bayless, CFO, added, "Our performance in the June quarter reflected a steep initial ramp of new designs across multiple mobile customers.  Considering our backlog of approximately $96 million entering the typically back-end loaded September quarter, customer forecasts, and the resulting expected product mix, we anticipate revenue to be in the range of $210 million to $225 million for the first fiscal quarter, an increase of 65% to 77% on a year-over-year basis.  We expect the revenue mix from mobile and PC products to be similar to the preceding quarter."

Mr. Bergman added, "While our markets are dynamic, we believe that as the technology leader we are building a sustainable competitive advantage in touch.  As we look ahead to fiscal 2014, the declining PC market will continue to impact our growth rate, but overall we feel confident that we can achieve another year of very strong annual revenue growth at a level similar to our growth rate in fiscal 2013."

Synaptics also announced that in July, its board of directors increased and extended the authorization for stock repurchases by $100 million, for a total current authorization of $160 million available through October, 2015. 

Earnings Call Information

The Synaptics fourth quarter fiscal 2013 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, August 1, 2013, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 1-877-941-1427 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

As a leading developer of human interface solutions which enhance the user experience, Synaptics provides the broadest touch solutions portfolio in the industry.  The ClearPad™ family supports touchscreen solutions for devices ranging from entry-level mobile phones to flagship premium smartphones, tablets, and notebook PCs.  The TouchPad™ family, including ClickPad™ and ForcePad™, is integrated into the majority of today's notebook PCs.  Synaptics' wide portfolio also includes ThinTouch™, supporting thin and light keyboard solutions, as well as key technologies for next generation touch-enabled video and display applications. 
(NASDAQ: SYNA) www.synaptics.com

Synaptics, ClearPad, TouchPad, ClickPad, ForcePad, ThinTouch, and the Synaptics logo are trademarks of Synaptics in the United States and/or other countries. All other marks are the property of their respective owners.

Use of Non-GAAP Financial Information

In evaluating its business, Synaptics considers and uses net income excluding share-based compensation and certain non-cash or non-recurring items as a supplemental measure of operating performance.  Net income excluding share-based compensation and certain non-cash 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 and certain non-cash 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 and certain non-cash or non-recurring items. Net income excluding share-based compensation and certain non-cash 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 belief that its record performance reflects the company's ability to innovate and lead in its markets based on the depth and breadth of its technology and the scale required to seamlessly deliver differentiated solutions to its growing global customer base; the company's anticipated revenue for the September quarter, including its expectation that the revenue mix in the September quarter from mobile and PC products will be similar to the preceding quarter; the company's belief that it is the technology leader and is building a sustainable competitive advantage in touch; the company's expectations that the declining PC market will continue to impact its growth rate; and the company's confidence that it can achieve another year of very strong annual revenue growth at a level similar to its growth rate in fiscal 2013.  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, 2013. 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:

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

(Tables to Follow)

 

 

SYNAPTICS INCORPORATED

 CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)







June 30,

June 30,

2013

2012




Assets


Current assets:



Cash and cash equivalents

$ 355,303

$ 305,005

Accounts receivables, net of allowances of $883 and $567, respectively

148,454

104,140

Inventories

49,948

31,667

Prepaid expenses and other current assets

6,715

5,365

Total current assets

560,420

446,177




Property and equipment at cost, net

58,035

24,903

Goodwill

20,695

18,995

Purchased intangibles

13,110

12,800

Non-current auction rate securities

16,969

15,321

Other assets

22,037

23,309

Total assets

$ 691,266

$ 541,505


Liabilities and stockholders' equity


Current liabilities:



Accounts payable

$  83,710

$  55,220

Accrued compensation

23,728

12,642

Income taxes payable

10,751

11,221

Other accrued liabilities

31,437

26,515

Total current liabilities

149,626

105,598




Notes payable

2,305

2,305

Other liabilities

17,480

36,812




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 shares authorized; 50,673,758 and 48,680,348 shares issued, and 33,289,826 and 32,896,256 shares outstanding, respectively

51

49

Additional paid in capital

539,170

471,569

Less:  17,383,932 and 15,784,092 treasury shares, respectively, at cost

(460,160)

(413,885)

Accumulated other comprehensive income

6,802

1,998

Retained earnings

435,992

337,059

Total stockholders' equity

521,855

396,790

Total liabilities and stockholders' equity

$ 691,266

$ 541,505





 

 

 

SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)











Three Months Ended

Twelve Months Ended

June 30,

June 30,

2013

2012

2013

2012








Net revenue

$ 230,183

$ 137,607

$ 663,588

$ 548,228

Cost of revenue

115,062

74,203

337,784

292,661

Gross margin

115,121

63,404

325,804

255,567

Operating expenses








Research and development

40,900

30,476

144,699

117,954

Selling, general, and administrative

21,521

17,584

79,620

70,045

Acquired intangibles amortization

262

-

1,025

-

Change in contingent consideration

247

-

1,347

-

Gain on sale of building

(1,578)

-

(1,578)

-

Total operating expenses

61,352

48,060

225,113

187,999








Operating income

53,769

15,344

100,691

67,568

Interest income

225

240

865

922

Non-cash interest income

194

-

194

-

Interest expense

(4)

(4)

(17)

(17)

Impairment recovery on investments

-

18

-

77

Income before provision for income taxes

54,184

15,598

101,733

68,550

Provision for income taxes

8,864

3,298

2,800

14,406

Net income

$  45,320

$  12,300

$  98,933

$  54,144








Net income per share:








Basic

$     1.37

$     0.37

$     3.03

$     1.64

Diluted 

$     1.29

$     0.36

$     2.89

$     1.57








Shares used in computing net income per share:








Basic

32,979

33,321

32,658

33,030

Diluted

35,150

34,505

34,239

34,435








 

 

 

SYNAPTICS INCORPORATED

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)











Three Months Ended

Twelve Months Ended

June 30,

June 30,

2013

2012

2013

2012








GAAP gross margin

$115,121

$63,404

$325,804

$255,567

Share-based compensation

221

226

911

1,129

Non-GAAP gross margin

$115,342

$63,630

$326,715

$256,696


















GAAP gross margin - percentage of revenue

50.0%

46.1%

49.1%

46.6%

Share-based compensation - percentage of revenue

0.1%

0.1%

0.1%

0.2%

Non-GAAP gross margin - percentage of revenue

50.1%

46.2%

49.2%

46.8%


















GAAP research and development expense

$ 40,900

$30,476

$144,699

$117,954

Share-based compensation

(3,992)

(4,300)

(15,775)

(15,509)

Non-GAAP research and development expense

$ 36,908

$26,176

$128,924

$102,445


















GAAP selling, general, and administrative expense

$ 21,521

$17,584

$ 79,620

$ 70,045

Share-based compensation

(3,291)

(3,972)

(15,524)

(17,523)

Non-GAAP selling, general, and administrative expense

$ 18,230

$13,612

$ 64,096

$ 52,522


















GAAP operating income

$ 53,769

$15,344

$100,691

$ 67,568

Acquired intangibles amortization

262

-

1,025

-

Change in contingent consideration

247

-

1,347

-

Share-based compensation

7,504

8,498

32,210

34,161

Gain on sale of building

(1,578)

-

(1,578)

-

Non-GAAP operating income

$ 60,204

$23,842

$133,695

$101,729


















GAAP net income

$ 45,320

$12,300

$ 98,933

$ 54,144

Impairment recovery on investments

-

(18)

-

(77)

Non-cash interest income

(194)

-

(194)

-

Acquired intangibles amortization

262

-

1,025

-

Change in contingent consideration

247

-

1,347

-

Share-based compensation

7,504

8,498

32,210

34,161

Gain on sale of building

(1,578)

-

(1,578)

-

Tax adjustments

(2,620)

(2,170)

(25,365)

(9,589)

Non-GAAP net income

$ 48,941

$18,610

$106,378

$ 78,639


















GAAP net income per share - diluted

$   1.29

$  0.36

$   2.89

$   1.57

Impairment recovery on investments

-

-

-

-

Non-cash interest income

(0.01)

-

(0.01)

-

Acquired intangibles amortization

0.01

-

0.03

-

Change in contingent consideration

0.01

-

0.04

-

Share-based compensation

0.21

0.24

0.94

0.99

Gain on sale of building

(0.05)

-

(0.05)

-

Tax adjustments

(0.07)

(0.06)

(0.73)

(0.28)

Non-GAAP net income per share - diluted

$   1.39

$  0.54

$   3.11

$   2.28








 

 

 

 

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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