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Synaptics Reports Results for Second Quarter Fiscal 2017
- Revenue of
$461.3 million - GAAP net income per diluted share of
$0.64
- Non-GAAP net income per diluted share of
$1.49 , including tax rate benefit of$0.11 per diluted share - Strong contributions from TDDI and fingerprint; introduced OLED DDIC and optical fingerprint solutions
Net revenue for the second quarter of fiscal 2017 increased 19 percent sequentially and declined 2 percent from the comparable quarter last year to
Non-GAAP net income for the second quarter of fiscal 2017 increased 56 percent sequentially and declined 11 percent from the prior year period to
"We are pleased to report solid results for the second fiscal quarter," stated
Second Quarter 2017 Business Metrics
- Revenue mix from mobile and PC products was approximately 86 percent and 14 percent respectively. Fingerprint products have been classified according to type of device.
- Revenue from mobile products of
$397.5 million was up 20 percent sequentially and down 3 percent year-over-year. Mobile products revenue includes all touchscreen, display driver, and applicable fingerprint products. - Revenue from PC products totaled
$63.8 million , a sequential increase of 16 percent and an increase of 2 percent year-over-year, and includes applicable fingerprint products.
Cash at December 31, 2016 was $347 million. In the second quarter of fiscal 2017, the company generated
Earnings Call Information
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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
SYNAPTICS INCORPORATED | ||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||
(In millions except share data) | ||||||||||||
(Unaudited) | ||||||||||||
2016 | 2016 | |||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 347.2 | $ | 352.2 | ||||||||
Accounts receivables, net of allowances of | 259.7 | 252.6 | ||||||||||
Inventories | 159.7 | 146.4 | ||||||||||
Prepaid expenses and other current assets | 38.6 | 28.9 | ||||||||||
Total current assets | 805.2 | 780.1 | ||||||||||
Property and equipment at cost, net | 115.1 | 112.7 | ||||||||||
206.8 | 206.8 | |||||||||||
Purchased intangibles, net | 129.1 | 160.3 | ||||||||||
Non-current other assets | 46.3 | 40.3 | ||||||||||
Total assets | $ | 1,302.5 | $ | 1,300.2 | ||||||||
Liabilities and stockholders' equity | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 168.7 | $ | 172.8 | ||||||||
Accrued compensation | 33.8 | 39.9 | ||||||||||
Income taxes payable | 9.4 | 11.5 | ||||||||||
Acquisition-related liabilities | 8.7 | 25.5 | ||||||||||
Other accrued liabilities | 93.3 | 82.3 | ||||||||||
Current portion of long-term debt | 15.0 | 18.8 | ||||||||||
Total current liabilities | 328.9 | 350.8 | ||||||||||
Long-term debt | 209.7 | 216.7 | ||||||||||
Non-current portion of acquisition-related liabilities | 5.5 | 6.2 | ||||||||||
Deferred tax liabilities | 4.2 | 9.0 | ||||||||||
Other long-term liabilities | 13.9 | 12.5 | ||||||||||
Total liabilities | 562.2 | 595.2 | ||||||||||
Commitments and contingencies | ||||||||||||
Stockholders' equity: | ||||||||||||
Preferred stock; | ||||||||||||
no shares issued and outstanding | - | - | ||||||||||
Common stock; | ||||||||||||
60,129,621 and 59,532,148 shares issued, and 35,301,551 and | ||||||||||||
35,212,141 shares outstanding, respectively | 0.1 | 0.1 | ||||||||||
Additional paid in capital | 964.2 | 928.6 | ||||||||||
Less: 24,828,070 and 24,320,007 treasury shares, respectively, at cost | (917.3 | ) | (892.3 | ) | ||||||||
Accumulated other comprehensive income | 1.5 | 3.3 | ||||||||||
Retained earnings | 691.8 | 665.3 | ||||||||||
Total stockholders' equity | 740.3 | 705.0 | ||||||||||
Total liabilities and stockholders' equity | $ | 1,302.5 | $ | 1,300.2 | ||||||||
SYNAPTICS INCORPORATED | ||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||
Net revenue | $ | 461.3 | $ | 470.5 | $ | 847.5 | $ | 940.5 | ||||||||||
Acquisition related costs (1) | 12.0 | 14.1 | 24.2 | 28.6 | ||||||||||||||
Cost of revenue | 310.6 | 291.2 | 561.2 | 582.9 | ||||||||||||||
Gross margin | 138.7 | 165.2 | 262.1 | 329.0 | ||||||||||||||
Operating expenses | ||||||||||||||||||
Research and development | 73.5 | 78.6 | 146.9 | 159.1 | ||||||||||||||
Selling, general, and administrative | 32.3 | 41.0 | 66.9 | 81.2 | ||||||||||||||
Acquisition related costs, net (2) | 2.4 | 0.3 | 6.9 | 7.7 | ||||||||||||||
Restructuring costs (3) | 1.7 | - | 7.0 | 1.9 | ||||||||||||||
Total operating expenses | 109.9 | 119.9 | 227.7 | 249.9 | ||||||||||||||
Operating income | 28.8 | 45.3 | 34.4 | 79.1 | ||||||||||||||
Interest and other income/(expense), net | 0.6 | (0.8 | ) | (0.3 | ) | (1.6 | ) | |||||||||||
Income before provision for income taxes | 29.4 | 44.5 | 34.1 | 77.5 | ||||||||||||||
Provision for income taxes | 6.6 | 9.5 | 7.6 | 18.7 | ||||||||||||||
Net income | $ | 22.8 | $ | 35.0 | $ | 26.5 | $ | 58.8 | ||||||||||
Net income per share: | ||||||||||||||||||
Basic | $ | 0.65 | $ | 0.96 | $ | 0.76 | $ | 1.61 | ||||||||||
Diluted | $ | 0.64 | $ | 0.93 | $ | 0.74 | $ | 1.55 | ||||||||||
Shares used in computing net income per share: | ||||||||||||||||||
Basic | 35.1 | 36.4 | 35.0 | 36.6 | ||||||||||||||
Diluted | 35.9 | 37.7 | 35.7 | 38.0 | ||||||||||||||
(1 | ) | These acquisition related costs consist primarily of amortization of acquired intangible assets associated with acquisitions. | ||||||||||||||||
(2 | ) | These acquisition related costs, net consist primarily of changes in contingent consideration and amortization associated with certain acquired intangible assets. | ||||||||||||||||
(3 | ) | Restructuring costs primarily include severance costs and facility consolidation costs associated with operational restructurings. | ||||||||||||||||
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures | |||||||||||||||||||
(In millions except per share data) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
GAAP gross margin | $ | 138.7 | $ | 165.2 | $ | 262.1 | $ | 329.0 | |||||||||||
Acquisition related costs | 12.0 | 14.1 | 24.2 | 28.6 | |||||||||||||||
Share-based compensation | 0.6 | 0.4 | 1.1 | 0.8 | |||||||||||||||
Non-GAAP gross margin | $ | 151.3 | $ | 179.7 | $ | 287.4 | $ | 358.4 | |||||||||||
GAAP gross margin - percentage of revenue | 30.1 | % | 35.1 | % | 30.9 | % | 35.0 | % | |||||||||||
Acquisition related costs - percentage of revenue | 2.5 | % | 3.0 | % | 2.8 | % | 3.0 | % | |||||||||||
Share-based compensation - percentage of revenue | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | |||||||||||
Non-GAAP gross margin - percentage of revenue | 32.8 | % | 38.2 | % | 33.9 | % | 38.1 | % | |||||||||||
GAAP research and development expense | $ | 73.5 | $ | 78.6 | $ | 146.9 | $ | 159.1 | |||||||||||
Share-based compensation | (8.5 | ) | (7.5 | ) | (16.3 | ) | (14.0 | ) | |||||||||||
Non-GAAP research and development expense | $ | 65.0 | $ | 71.1 | $ | 130.6 | $ | 145.1 | |||||||||||
GAAP selling, general, and administrative expense | $ | 32.3 | $ | 41.0 | $ | 66.9 | $ | 81.2 | |||||||||||
Share-based compensation | (6.5 | ) | (6.1 | ) | (12.8 | ) | (11.1 | ) | |||||||||||
Non-GAAP selling, general, and administrative expense | $ | 25.8 | $ | 34.9 | $ | 54.1 | $ | 70.1 | |||||||||||
GAAP operating income | $ | 28.8 | $ | 45.3 | $ | 34.4 | $ | 79.1 | |||||||||||
Acquisition related costs | 14.4 | 14.4 | 31.1 | 36.3 | |||||||||||||||
Share-based compensation | 15.6 | 14.0 | 30.2 | 25.9 | |||||||||||||||
Restructuring costs | 1.7 | - | 7.0 | 1.9 | |||||||||||||||
Non-GAAP operating income | $ | 60.5 | $ | 73.7 | $ | 102.7 | $ | 143.2 | |||||||||||
GAAP net income | $ | 22.8 | $ | 35.0 | $ | 26.5 | $ | 58.8 | |||||||||||
Acquisition related costs | 14.4 | 14.4 | 31.1 | 36.3 | |||||||||||||||
Share-based compensation | 15.6 | 14.0 | 30.2 | 25.9 | |||||||||||||||
Restructuring costs | 1.7 | - | 7.0 | 1.9 | |||||||||||||||
Other non-cash items, net | (1.6 | ) | (0.2 | ) | (1.7 | ) | (0.4 | ) | |||||||||||
Tax adjustments | 0.5 | (2.9 | ) | (5.5 | ) | (5.3 | ) | ||||||||||||
Non-GAAP net income | $ | 53.4 | $ | 60.3 | $ | 87.6 | $ | 117.2 | |||||||||||
GAAP net income per share - diluted | $ | 0.64 | $ | 0.93 | $ | 0.74 | $ | 1.55 | |||||||||||
Acquisition related costs | 0.40 | 0.38 | 0.87 | 0.95 | |||||||||||||||
Share-based compensation | 0.44 | 0.37 | 0.84 | 0.68 | |||||||||||||||
Restructuring costs | 0.05 | - | 0.20 | 0.05 | |||||||||||||||
Other non-cash items, net | (0.05 | ) | - | (0.05 | ) | (0.01 | ) | ||||||||||||
Tax adjustments | 0.01 | (0.08 | ) | (0.15 | ) | (0.14 | ) | ||||||||||||
Non-GAAP net income per share - diluted | $ | 1.49 | $ | 1.60 | $ | 2.45 | $ | 3.08 | |||||||||||
CONDENSED CONSOLIDATED CASH FLOWS | ||||||||
(In millions) | ||||||||
(Unaudited) | ||||||||
Six Months Ended | ||||||||
2016 | 2015 | |||||||
Net Income | $ | 26.5 | $ | 58.8 | ||||
Non-cash operating items | 71.6 | 71.9 | ||||||
Changes in working capital | (45.7 | ) | (23.9 | ) | ||||
Provided by operations | 52.4 | 106.8 | ||||||
Fixed asset & intangible asset purchases | (20.3 | ) | (19.5 | ) | ||||
Proceeds from sales and maturities of investments | 7.5 | 0.6 | ||||||
Investment in direct financing lease | (15.8 | ) | - | |||||
Used in investing | (28.6 | ) | (18.9 | ) | ||||
(25.0 | ) | (125.0 | ) | |||||
Equity compensation, net | 9.4 | 13.0 | ||||||
Debt related, net | (11.3 | ) | (4.1 | ) | ||||
Used in financing | (26.9 | ) | (116.1 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (1.9 | ) | 0.3 | |||||
Net change in cash and cash equivalents | (5.0 | ) | (27.9 | ) | ||||
Cash and cash equivalents at beginning of period | 352.2 | 399.9 | ||||||
Cash and cash equivalents at end of period | $ | 347.2 | $ | 372.0 | ||||
Cash paid for taxes | $ | 15.8 | $ | 25.8 | ||||
Cash refund on taxes | $ | 9.9 | $ | 10.8 | ||||
For more information contact:Source:Jennifer Jarman The Blueshirt Group 415-217-5866 jennifer@blueshirtgroup.com
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