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Synaptics Reports Second Quarter Results
SANTA CLARA, Calif., Jan 19, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- 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, 2005. The Company's GAAP results reflect the adoption of SFAS 123(R) regarding option expensing.
Net revenue for the second quarter of fiscal 2006 was $48.6 million, a decrease of approximately 14% compared with $56.5 million of net revenue for the second quarter of fiscal 2005.
Net income for the second quarter of fiscal 2006 was $4.8 million, or $0.18 per diluted share, a decrease of approximately 51% compared with $9.7 million, or $0.33 per diluted share, for the second quarter of fiscal 2005.
Non-GAAP net income for the second quarter of fiscal 2006, which excludes non-cash share-based compensation net of tax, was $7.5 million, or $0.27 per diluted share, a decrease of approximately 24% compared with non-GAAP net income of $9.8 million, or $0.34 per diluted share, for the second quarter of fiscal 2005.
"We are pleased to announce another solid quarter of execution with results within our expected guidance range," stated Francis Lee, President and Chief Executive Officer of Synaptics. "Design activity is strong across our target markets and general market trends continue to move in a direction favorable to Synaptics as we look to capitalize on the continuing shift towards mobility and multimedia applications in the PC sector, coupled with the growing adoption among consumers of digital lifestyle products, including portable audio and video devices."
Russ Knittel, Synaptics' Chief Financial Officer, added, "Based on current indicators and our backlog entering the third fiscal quarter, we anticipate revenue to be in the $42 to $45 million range. This guidance is based on expected seasonal declines following the holiday period. While our visibility beyond the March quarter is limited, we currently anticipate that revenue in the June quarter could be up sequentially from March quarter levels."
Earnings Call Information
The Synaptics second quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 19, 2006, during which the Company will provide forward-looking information. To participate on the live call, analysts and investors should dial 800-218-0204 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 interface solutions for the mobile computing, communications and entertainment industries. 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 more than 50 percent 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
Use of Non-GAAP Financial Information
Synaptics discloses non-GAAP financial measures of net income and net income per share and believes that this non-GAAP information provides historical comparability of its core operating results over multiple reporting periods. These non-GAAP financial measures should not be considered an alternative to net income and net income per share presented in conformity with U.S. generally accepted accounting principles ("U.S. GAAP"). Further, these non-GAAP financial measures are unlikely to be comparable to non-GAAP information provided by other companies. In accordance with SEC regulations, reconciliation of the Synaptics U.S. GAAP information to the non-GAAP information is provided in the tables attached. We will also make available on the investor relations page of our web site at www.synaptics.com this press release, which includes a reconciliation of the U.S. GAAP to non-GAAP financial measures and a replay of the webcast.
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 Synaptics' anticipated revenue for the third and forth quarters of fiscal 2006, its beliefs regarding the markets it serves, its assessment of market demands and trends in target markets, its view of its operating fundamentals, its assessment of consumer demands for various applications, its assessment of market conditions, and its competitive position in the notebook computer and portable audio and video device markets. 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 in the PC and portable digital entertainment markets, (b) market demand for OEMs' products using Synaptics' solutions, (c) the failure of Synaptics' products and OEMs' products to deliver commercially acceptable performance, (d) changing market demand trends in the markets it serves, and consumer demand, and (e) other risks as identified from time to time in Synaptics' SEC reports, including Quarterly Reports on Form 10-Q and current reports on Form 8-K as well as the Annual Report on Form 10-K for the fiscal year ended June 30, 2005. 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
408-454-5140 415-217-7722
russk@synaptics.com jennifer@blueshirtgroup.com
SYNAPTICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
December 31, June 30,
2005 2005
Assets
Current assets:
Cash and cash equivalents $29,991 $72,232
Short term investments 200,247 156,689
Total cash, cash equivalents,
and short-term investments 230,238 228,921
Receivables, net of allowances of
$166 and $165, respectively 31,865 33,790
Inventories 6,907 7,731
Prepaid expenses and other
current assets 3,416 3,046
Total current assets 272,426 273,488
Property and equipment, net 15,888 14,615
Goodwill 1,927 1,927
Other assets 25,054 21,175
Total assets $315,295 $311,205
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $12,652 $12,390
Accrued compensation 3,647 5,638
Income taxes payable 17,547 14,867
Other accrued liabilities 6,950 5,353
Total current liabilities 40,796 38,248
Note payable to a related party 1,500 1,500
Convertible senior subordinated
notes 125,000 125,000
Other liabilities 1,876 1,797
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; 26,687,672
and 26,419,447 shares
issued, respectively 27 26
Additional paid in capital 116,510 106,686
Less: 2,306,100 and 1,139,000
treasury shares, respectively,
at cost (39,999) (21,180)
Deferred stock compensation -- (303)
Retained earnings 69,875 59,560
Accumulated other comprehensive
loss (290) (129)
Total stockholders' equity 146,123 144,660
Total liabilities and stockholders'
equity $315,295 $311,205
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2005 2004 2005 2004
Net revenue $48,555 $56,543 $100,280 $94,634
Cost of revenue (1) 26,384 30,155 54,437 51,054
Gross margin 22,171 26,388 45,843 43,580
Operating expenses
Research and development (1) 8,345 6,248 16,634 12,291
Selling, general, and
administrative (1) 6,913 4,388 13,641 8,154
Amortization of deferred stock
compensation -- 85 -- 187
Total operating expenses 15,258 10,721 30,275 20,632
Operating income 6,913 15,667 15,568 22,948
Interest income 1,901 397 3,452 665
Interest expense (485) (151) (969) (177)
Income before income taxes 8,329 15,913 18,051 23,436
Provision for income taxes (2) 3,526 6,189 7,736 9,281
Net income $4,803 $9,724 $10,315 $14,155
Net income per share:
Basic $0.20 $0.38 $0.42 $0.56
Diluted $0.18 $0.33 $0.38 $0.50
Shares used in computing net income
per share:
Basic 24,299 25,816 24,534 25,457
Diluted 28,781 29,372 28,911 28,641
(1) Includes share-based compensation charges of:
Cost of revenue $188 $-- $380 $--
Research and development 1,243 -- 2,535 --
Selling, general, and
administrative 1,959 -- 3,785 --
$3,390 $-- $6,700 $--
(2) Includes tax benefit for share-
based compensation charges of:
$724 $-- $1,414 $--
Non-GAAP net income per share
Basic $0.31 $0.38 $0.64 $0.56
Diluted $0.27 $0.34 $0.55 $0.50
SYNAPTICS INCORPORATED
Computation of Basic and Diluted Net Income Per Share
(in thousands except per share data)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2005 2004 2005 2004
Numerator:
Basic net income $4,803 $9,724 $10,315 $14,155
Interest expense and amortization
of debt issuance costs on
convertible notes (net of tax) 266 69 532 69
Diluted net income $5,069 $9,793 $10,847 $14,224
Denominator:
Shares, basic 24,299 25,816 24,534 25,457
Effect of dilutive stock options 2,008 3,067 1,903 2,939
Effect of convertible notes 2,474 489 2,474 245
Shares, diluted 28,781 29,372 28,911 28,641
Net income per share:
Basic $0.20 $0.38 $0.42 $0.56
Diluted $0.18 $0.33 $0.38 $0.50
Computation of non-GAAP basic and
diluted net income per share
(unaudited):
Numerator:
Reported net income $4,803 $9,724 $10,315 $14,155
Non-GAAP adjustments:
Amortization of deferred stock
compensation (net of tax) -- 52 -- 112
Share-based compensation (net of
tax) 2,666 -- 5,286 --
Non-GAAP basic net income 7,469 9,776 15,601 14,267
Interest expense and amortization
of debt issuance
costs on convertible notes (net
of tax) 266 69 532 69
Non-GAAP diluted net income $7,735 $9,845 $16,133 $14,336
Denominator:
Shares, basic 24,299 25,816 24,534 25,457
Effect of dilutive stock options 2,228 3,067 2,198 2,939
Effect of convertible notes 2,474 489 2,474 245
Shares, diluted 29,001 29,372 29,206 28,641
Non-GAAP net income per share:
Basic $0.31 $0.38 $0.64 $0.56
Diluted $0.27 $0.34 $0.55 $0.50
SOURCE Synaptics Incorporated
Russ Knittel of Synaptics Incorporated, +1-408-454-5140, or russk@synaptics.com; or Jennifer Jarman of The Blueshirt Group, +1-415-217-7722, or jennifer@blueshirtgroup.com, for Synaptics Incorporated
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