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Synaptics Reports Results for Second Quarter Fiscal 2015

SAN JOSE, Calif., Jan. 29, 2015 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its second quarter ended December 27, 2014.  Results for the period reflect the first quarter of consolidated results from the acquisition of Renesas SP Drivers, Inc. (RSP), completed on October 1, 2014.

Net revenue for the second quarter of fiscal 2015 grew 125% over the comparable quarter last year to $463.7 million. Net income for the second quarter of fiscal 2015 was $20.0 million, or $0.52 per diluted share.  Non-GAAP net income for the second quarter of fiscal 2015 was $55.8 million, or $1.46 per diluted share.  (See attached table for a reconciliation of GAAP to non-GAAP financial measures.) 

"Synaptics achieved record top-line results for the second quarter, which included strong contributions from our new display drivers business," stated Rick Bergman, President and CEO. "We continue to execute across our strategic growth initiatives, with our new area touch fingerprint sensor and the market's first touch and display driver integrated (TDDI) solution now in mass production. We are very optimistic regarding our outlook for the second half of fiscal 2015 and are tracking well towards our combined operating model following the integration of RSP."

Second Quarter 2015 Business Metrics

  • Revenue mix from mobile and PC products was approximately 86% and 14%, respectively. Fingerprint ID products have been classified according to type of device.
  • Revenue from mobile products was up 198% year-over-year to $398.3 million. Mobile products revenue includes all touchscreen, display driver, and applicable fingerprint ID products.
  • Revenue from PC products totaled $65.4 million, a decrease of 9% year-over-year, and includes applicable fingerprint ID products.

Cash at December 31, 2014 was $327.5 million, a decrease of $122 million from the prior quarter. The decrease in cash was due to the purchase of RSP early in the quarter. In the second quarter of fiscal 2015, cash flow from operations was a negative $16.5 million as a result of the purchase of RSP inventory totaling $115 million from Renesas post-acquisition. Year-to-date, the company has used $91 million to repurchase approximately 1.3 million shares of its common stock, or roughly 3.5% of the total shares outstanding.

Kathy Bayless, CFO, added, "Considering our backlog of $245 million entering the March quarter, customer forecasts and the resulting expected product mix, we anticipate revenue to be in the range of $450 to $490 million, an increase of 120% to 140% over the prior year period. We expect the revenue mix from mobile and PC to be similar to the preceding quarter."

Earnings Call Information
The Synaptics second quarter fiscal 2015 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 29, 2015, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 1-888-337-8198 (conference ID: 6552336) 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 is the pioneer and leader of the human interface revolution, bringing innovative and intuitive user experiences to intelligent devices. Synaptics' broad portfolio of touch, display, and biometrics products is built on the company's rich R&D and supply chain capabilities. With solutions designed for mobile, PC and automotive industries, Synaptics combines ease of use, functionality and aesthetics to enable products that help make our digital lives more productive, secure and enjoyable. (NASDAQ: SYNA) www.synaptics.com. 

Use of Non-GAAP Financial Information
In evaluating its business, Synaptics considers and uses net income excluding share-based compensation, change in contingent consideration, and certain non-cash or non-recurring items as a supplemental measure of operating performance.  Net income excluding share-based compensation, change in contingent consideration, 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, change in contingent consideration, 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, change in contingent consideration, and certain non-cash or non-recurring items. Net income excluding share-based compensation, change in contingent consideration liability, 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 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 the fiscal year ended June 28, 2014 and our Quarterly Report on Form 10-Q for the quarter ended September 27, 2014, 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.

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)















December 31,

June 30,



2014

2014






Assets





Current assets:




Cash and cash equivalents                                                                 

$    327,546

$    447,205

Accounts receivables, net of allowances of $1,165 and $883, respectively 

335,023

195,057

Inventories                                                                              

145,215

82,311

Prepaid expenses and other current assets                                                     

35,196

17,858

Total current assets                                                                    

842,980

742,431






Property and equipment at cost, net                                                               

115,145

80,849

Goodwill                                                                             

214,443

61,030

Purchased intangibles, net

283,349

82,111

Non-current other assets                                                                                 

52,058

53,912

Total assets                                                                              

$  1,507,975

$  1,020,333


Liabilities and stockholders' equity


Current liabilities:



Accounts payable                                                                          

$    149,535

$     97,109

Accrued compensation                                                                      

33,474

30,682

Income taxes payable

11,830

12,538

Acquisition related liabilities

97,549

57,388

Other accrued liabilities                                                                    

94,433

56,691

Current portion of long-term debt

7,500

-

Total current liabilities                                                                  

394,321

254,408














Long-term debt

242,500

-

Non-current portion acquisition related liabilities

85,626

52,734

Deferred tax liability

57,342

-

Other liabilities                                                                            

13,609

12,034






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;  





56,997,204 and 55,911,513 shares issued, and 36,662,018 and 





36,863,802 shares outstanding, respectively

57

56

Additional paid in capital

798,203

740,282

Less: 20,335,186 and 19,047,711 treasury shares, respectively, at cost

(621,027)

(530,422)

Accumulated other comprehensive income

8,105

8,560

Retained earnings

529,239

482,681

Total stockholders' equity                                                                

714,577

701,157

Total liabilities and stockholders' equity                                              

$  1,507,975

$  1,020,333

 


SYNAPTICS INCORPORATED


CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(In thousands, except per share data)


(Unaudited)











Three Months Ended

Six Months Ended

December 31,

December 31,

2014

2013

2014

2013






Net revenue                                                 

$   463,705

$   205,763

$   746,446

$   428,370

Acquisition and integration related costs (1)

39,492

2,170

43,562

2,170

Cost of revenue                             

297,382

109,048

455,864

222,376

Gross margin                                                  

126,831

94,545

247,020

203,824

Operating expenses







Research and development               

77,223

45,931

134,748

86,373

Selling, general, and administrative

37,427

21,807

68,067

41,900

Acquisition related costs (2)

(894)

4,729

(5,101)

6,280

Foreign currency adjustment (3)

(15,395)

-

(15,395)

-

Total operating expenses                                       

98,361

72,467

182,319

134,553






Operating income                                   

28,470

22,078

64,701

69,271

Interest and other income, net

497

476

1,121

906

Interest expense                                                

(1,212)

(5)

(1,212)

(9)

Income before provision for income taxes                 

27,755

22,549

64,610

70,168

Provision for income taxes             

7,783

5,215

18,052

17,895

Net income                                         

$    19,972

$    17,334

$    46,558

$    52,273






Net income per share:







Basic                                                      

$      0.55

$      0.51

$      1.26

$      1.56

Diluted                                                     

$      0.52

$      0.48

$      1.20

$      1.47






Shares used in computing net income per share:







Basic                                                          

36,500

33,990

36,895

33,475

Diluted                                                      

38,248

36,059

38,882

35,586














(1)

These acquisition and integration related costs consist primarily of amortization associated with certain acquired intangible assets and integration costs associated with acquisitions.

(2)

These acquisition related costs consist primarily of changes in contingent consideration and amortization associated with certain acquired intangible assets.





(3)

These foreign currency adjustments include currency remeasurement adjustments related to our acquisition of RSP.

 

SYNAPTICS INCORPORATED

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)













Three Months Ended

Six Months Ended


December 31,

December 31,


2014

2013

2014

2013









GAAP gross margin

$ 126,831

$  94,545

$ 247,020

$ 203,824

Acquisition and integration related costs

39,492

2,170

43,562

2,170

Share-based compensation

336

262

638

516

Non-GAAP gross margin

$ 166,659

$  96,977

$ 291,220

$ 206,510




















GAAP gross margin - percentage of revenue

27.4%

45.9%

33.1%

47.6%

Acquisition and integration related costs - percentage of revenue

8.5%

1.1%

5.8%

0.5%

Share-based compensation - percentage of revenue

0.1%

0.1%

0.1%

0.1%

Non-GAAP gross margin - percentage of revenue

35.9%

47.1%

39.0%

48.2%




















GAAP research and development expense

$  77,223

$  45,931

$ 134,748

$  86,373

Acquisition and integration related costs

(1,399)

-

(1,731)

-

Share-based compensation

(5,951)

(4,241)

(11,351)

(8,168)

Non-GAAP research and development expense

$  69,873

$  41,690

$ 121,666

$  78,205




















GAAP selling, general, and administrative expense

$  37,427

$  21,807

$  68,067

$  41,900

Acquisition and integration related costs

(4,418)

-

(7,447)

-

Share-based compensation

(4,441)

(3,119)

(8,234)

(5,980)

Non-GAAP selling, general, and administrative expense

$  28,568

$  18,688

$  52,386

$  35,920




















GAAP operating income

$  28,470

$  22,078

$  64,701

$  69,271

Acquisition and integration related costs

44,415

6,899

47,639

8,450

Share-based compensation

10,728

7,622

20,223

14,664

Foreign currency adjustment 

(15,395)

-

(15,395)

-

Non-GAAP operating income

$  68,218

$  36,599

$ 117,168

$  92,385




















GAAP net income

$  19,972

$  17,334

$  46,558

$  52,273

Acquisition and integration related costs

44,415

6,899

47,639

8,450

Recovery of investment impairment 

(179)

-

(179)

-

Share-based compensation

10,728

7,622

20,223

14,664

Foreign currency adjustments

(15,395)

-

(15,395)

-

Non-cash interest income, net

(92)

(254)

(417)

(473)

Tax adjustments

(3,647)

(484)

(1,750)

2,117

Non-GAAP net income

$  55,802

$  31,117

$  96,679

$  77,031




















GAAP net income per share - diluted

$    0.52

$    0.48

$    1.20

$    1.47

Acquisition and integration related costs

1.16

0.19

1.23

0.23

Recovery of investment impairment 

-

-

-

-

Share-based compensation

0.28

0.21

0.52

0.41

Foreign currency adjustments

(0.40)

-

(0.40)

-

Non-cash interest income

-

(0.01)

(0.01)

(0.01)

Tax adjustments

(0.10)

(0.01)

(0.05)

0.06

Non-GAAP net income per share - diluted

$    1.46

$    0.86

$    2.49

$    2.16

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/synaptics-reports-results-for-second-quarter-fiscal-2015-300028047.html

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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