Synaptics Reports Results for Third Quarter of Fiscal 2008
SANTA CLARA, Calif., April 24, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Synaptics (Nasdaq: SYNA), a leading developer of human interface solutions for mobile computing, communications, and entertainment devices, today reported financial results for the third quarter ended March 31, 2008. The Company's GAAP results reflect the expensing of non-cash share-based compensation for all periods presented and non-cash other-than-temporary impairment charges for all fiscal 2008 periods presented.
Net revenue for the third quarter of fiscal 2008 was $78.9 million, an increase of approximately 23% over $64.3 million in net revenue for the third quarter of fiscal 2007. Net income for the third quarter of fiscal 2008 was $3.0 million, or $0.12 per diluted share, compared with net income of $5.6 million, or $0.20 per diluted share, for the third quarter of fiscal 2007. Net income for the third quarter of fiscal 2008 included a non-cash other-than-temporary impairment charge of $2.2 million related to the Company's investment in auction rate securities. Excluding share-based compensation and the non-cash other-than-temporary impairment charge, net income for the third quarter of fiscal 2008 was $8.8 million, or $0.35 per diluted share, compared with $8.1 million, or $0.28 per diluted share, for the third quarter of fiscal 2007.
"During the fiscal third quarter, we experienced solid year-over-year revenue growth in our PC and non-PC markets of 20% and 34%, respectively. Revenue from mobile phone applications approached 10% of total net revenue, and we expect it to trend up through the remainder of the calendar year," stated Francis Lee, President and Chief Executive Officer of Synaptics. "During the quarter, we made progress in scaling the organization to support our growing pipeline of design opportunities. Additionally, we aggressively executed on our stock buyback program by purchasing 4 million shares, further underscoring our confidence in Synaptics' prospects as well as our commitment to delivering stockholder value."
Russ Knittel, Synaptics' Chief Financial Officer, added, "We exited the March quarter with a healthy backlog of $48.1 million, an increase of approximately 28% compared with the prior quarter end. Based on our backlog and current visibility, we anticipate revenue in the June quarter will be $90 million to $95 million, an increase of 26% to 33% over the comparable quarter last year. Although we are mindful of the broader macroeconomic concerns, looking out into the September quarter, current visibility suggests sequential revenue growth in the range of 8% to 14% relative to the mid-point of our anticipated June quarter revenue level."
Synaptics' cash and short-term investments at the end of March, excluding all auction rate securities, totaled $156.6 million. The Company's total investment in auction rate securities was $48.6 million, all of which are investment grade securities that are paying interest at the contractual rates. Based on a fair value analysis in accordance with U.S. GAAP, the Company has accounted for non-cash impairment of $7.3 million, of which $5.1 million is temporary and $2.2 million is other-than-temporary. "We will continue to monitor our investments in auction rate securities in light of the current debt market environment. We are confident that our existing cash and other short-term investments and our expected future cash flow from operations will be sufficient to allow us to continue to hold our current auction rate securities. If we hold our auction rate securities to term, and if the issuer pays all amounts due, the impairment charges would be reversed," stated Mr. Knittel.
Earnings Call Information
The Synaptics third quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, April 24, 2008, during which the Company will provide forward-looking information. To participate on the live call, analysts and investors should dial 800-257-1836 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 human interface solutions for mobile computing, communications, and entertainment devices. 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 a majority 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 Santa Clara, California. www.synaptics.com
NOTE: Synaptics, TouchPad, and the Synaptics logo are trademarks of Synaptics in the United States and/or other countries.
Use of Non-GAAP Financial Information
In evaluating its business, Synaptics considers and uses net income per share excluding share-based compensation and unusual or non-recurring items as a supplemental measure of operating performance. Net income excluding share- based compensation and unusual 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 net income. The Company presents net income excluding share- based compensation and unusual 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 non-cash compensation charges and unusual or non- recurring items. Net income excluding share-based compensation and unusual 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.
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' anticipated revenue, revenue growth rates, and cash flow from operations; its beliefs regarding the liquidity and quality of its investments in auction rates securities; its beliefs regarding the markets it serves; its position and opportunities in those markets; its assessment of market demands and trends in target markets; and its assessment of consumer demands for various applications. 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 it serves, and (d) 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, 2007. 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 415-217-7722 (Tables to Follow) SYNAPTICS INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended March 31, March 31, 2008 2007 2008 2007 Net revenue $78,861 $64,309 $264,203 $195,211 Cost of revenue (1) 46,688 39,162 155,521 117,278 Gross margin 32,173 25,147 108,682 77,933 Operating expenses Research and development (1) 13,560 9,485 35,655 28,631 Selling, general, and administrative (1) 12,181 9,339 34,346 26,067 Restructuring costs - - - 915 Total operating expenses 25,741 18,824 70,001 55,613 Operating income 6,432 6,323 38,681 22,320 Interest income 2,293 2,713 8,301 8,230 Interest expense (449) (488) (1,373) (1,463) Gain on settlement of debt - - 2,689 - Impairment of investment - - (4,000) - Impairment of auction rate securities investments (2,237) - (2,237) - Income before income taxes 6,039 8,548 42,061 29,087 Provision for income taxes (2) 3,031 2,913 13,595 9,984 Net income $3,008 $5,635 $28,466 $19,103 Net income per share: Basic $0.12 $0.22 $1.10 $0.75 Diluted $0.12 $0.20 $1.05 $0.67 Shares used in computing net income per share: Basic 24,760 25,823 25,932 25,509 Diluted 25,302 29,592 27,134 29,512 (1) Includes share-based compensation charges of: Cost of revenue $377 $160 $966 $492 Research and development 1,797 1,262 4,556 3,736 Selling, general, and administrative 2,680 1,966 7,146 6,169 $4,854 $3,388 $12,668 $10,397 (2) Includes tax benefit for share-based compensation charges of: $1,255 $896 $4,628 $2,775 Non-GAAP net income per share Basic $0.36 $0.31 $1.57 $1.08 Diluted $0.35 $0.28 $1.50 $0.95 SYNAPTICS INCORPORATED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) March 31, June 30, 2008 2007 Assets Current assets: Cash and cash equivalents $107,837 $45,915 Short term investments 77,906 219,102 Total cash, cash equivalents, and short-term investments 185,743 265,017 Receivables, net of allowances of $364 and $419, respectively 57,762 56,721 Inventories 20,284 12,034 Prepaid expenses and other current assets 14,250 4,245 Total current assets 278,039 338,017 Property and equipment, net 22,367 19,400 Goodwill 1,927 1,927 Non-current auction rate securities 12,246 - Other assets 4,999 13,968 Total assets $319,578 $373,312 Liabilities and stockholders' equity Current liabilities: Accounts payable $19,229 $21,552 Accrued compensation 6,055 5,372 Income taxes payable 5,969 3,400 Other accrued liabilities 8,522 6,272 Note payable - 1,500 Total current liabilities 39,775 38,096 Convertible senior subordinated notes 125,000 125,000 Other liabilities 15,819 2,129 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; 31,273,857 and 29,666,660 shares issued, respectively 31 30 Additional paid in capital 216,228 180,746 Less: 8,088,100 and 3,588,100 treasury shares, respectively, at cost (200,745) (72,345) Retained earnings 128,261 99,795 Accumulated other comprehensive loss (4,791) (139) Total stockholders' equity 138,984 208,087 Total liabilities and stockholders' equity $319,578 $373,312 SYNAPTICS INCORPORATED Computation of Basic and Diluted Net Income Per Share (in thousands except per share data) (Unaudited) Three Months Ended Nine Months Ended March 31, March 31, 2008 2007 2008 2007 Numerator: Basic net income $3,008 $5,635 $28,466 $19,103 Interest expense and amortization of debt issuance costs on convertible notes (net of tax) - 266 - 532 Diluted net income $3,008 $5,901 $28,466 $19,635 Denominator: Shares, basic 24,760 25,823 25,932 25,509 Effect of dilutive share-based awards 542 1,295 1,202 1,529 Effect of convertible notes - 2,474 - 2,474 Shares, diluted 25,302 29,592 27,134 29,512 Net income per share: Basic $0.12 $0.22 $1.10 $0.75 Diluted $0.12 $0.20 $1.05 $0.67 Computation of non-GAAP basic and diluted net income per share (unaudited): Numerator: Reported net income $3,008 $5,635 $28,466 $19,103 Non-GAAP adjustments (net of tax, if applicable): Gain on settlement of debt - - (2,078) - Impairment of investment - - 4,000 - Impairment of auction rate securities investments 2,237 - 2,237 - Restructuring costs - - - 890 Share-based compensation 3,599 2,492 8,040 7,622 Non-GAAP basic net income 8,844 8,127 40,665 27,615 Interest expense and amortization of debt issuance costs on convertible notes (net of tax) - 266 - 532 Non-GAAP diluted net income $8,844 $8,393 $40,665 $28,147 Denominator: Shares, basic 24,760 25,823 25,932 25,509 Effect of dilutive share-based awards 542 1,587 1,202 1,798 Effect of convertible notes - 2,474 - 2,474 Shares, diluted 25,302 29,884 27,134 29,781 Non-GAAP net income per share: Basic $0.36 $0.31 $1.57 $1.08 Diluted $0.35 $0.28 $1.50 $0.95
SOURCE Synaptics Incorporated
Copyright (C) 2008 PR Newswire. All rights reserved
News Provided by COMTEX