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.
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 firstname.lastname@example.org email@example.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 firstname.lastname@example.org; or Jennifer Jarman of The Blueshirt Group, +1-415-217-7722, or email@example.com, for Synaptics Incorporated
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