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Synaptics Reports Third Quarter Fiscal 2012 Results

SANTA CLARA, Calif., April 26, 2012 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions for mobile computing, communications, and entertainment devices, today reported financial results for its third fiscal quarter ended March 31, 2012. 

Net revenue for the third quarter of fiscal 2012 was $131.7 million compared with $142.4 million for the comparable quarter last year.  Net income for the third quarter of fiscal 2012 was $11.4 million, or $0.33 per diluted share, compared with net income of $13.5 million, or $0.38 per diluted share, for the comparable quarter last year. 

Non-GAAP net income for the third quarter of fiscal 2012 was $17.9 million, or $0.51 per diluted share, compared with non-GAAP net income of $19.5 million, or $0.55 per diluted share, for the third quarter of fiscal 2011.  (See attached table for a reconciliation of GAAP to non-GAAP results.)  Non-GAAP earnings per diluted share for the third quarter of fiscal 2012 included the impact of the higher average stock price during the quarter, which increased the diluted share count and reduced earnings per diluted share by $0.02.

"Our third quarter financial results were on target at the mid-point of our guidance range, and we posted continued strong gross margin performance, driving solid non-GAAP operating margins of 18%," stated Rick Bergman, President and CEO.  "During the quarter, we expanded our customer base with flagship designs at key mobile OEMs and achieved important milestones with the initial volume shipments of our first ClearPad 3250 in-cell solution in a smartphone and our ClearPad 7300 single-ASIC large touchscreen solution in multiple tablets."

Third Quarter 2012 Business Metrics

  • Revenue mix from PC and non-PC applications was approximately 49% and 51%, respectively.
  • PC revenue totaled $65.1 million, an increase of 6% year-over-year.
  • Non-PC revenue totaled $66.6 million, a decrease of 17% year-over-year, primarily reflecting mobile phone touchscreen applications.  Mobile unit volume continued to grow substantially with revenue impacted by the product mix transition from modules to lower priced, higher gross margin chip and tail touchscreen solutions. 
  • Non-GAAP gross margin was 47.4%, an increase of 670 basis points year-over-year.
  • Non-GAAP operating margin was 18%, up 200 basis points year-over-year.
  • Cash at March 31, 2012 totaled $324.1 million. 

Kathy Bayless, CFO, added, "We are beginning to see some signs of recovery in the notebook PC market; however, visibility remains limited in the mobile market, reflecting market share and sell-through dynamics within our mobile OEM customer base. Considering our backlog of approximately $60 million entering the quarter, customer forecasts, and the resulting expected product mix, we anticipate revenue for the fourth quarter to be up on a sequential basis in the range of $133 million to $140 million."

Earnings Call Information
The Synaptics third quarter fiscal 2012 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, April 26, 2012, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 877-941-8416 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 delivers innovative touch solutions for intelligent devices. As a leading developer of human interface solutions for the mobile computing, communications, and entertainment markets, Synaptics solutions enhance the user experience.  The ClearPad™ touchscreen product family supports devices ranging from entry-level mobile phones to tablets. The TouchPad™ family, including ClickPad™, is integrated into the majority of today's notebook PCs.  Synaptics has shipped over one billion capacitive touch solutions to date. (NASDAQ: SYNA) www.synaptics.com

Synaptics, ClearPad, TouchPad, ClickPad, and the Synaptics logo are trademarks of Synaptics in the United States and/or other countries. All other marks are the property of their respective owners.

Use of Non-GAAP Financial Information
In evaluating its business, Synaptics considers and uses net income 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 GAAP 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 share-based 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. 

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 the company's belief that it has industry-leading technologies; the company's belief it is beginning to see signs of recovery in the notebook PC market; the company's belief that there is limited visibility in the mobile market; and the company's anticipated revenue for the fourth quarter of fiscal 2012, including that revenue is anticipated to be up on a sequential basis.  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 Synaptics serves, (d) the success of Synaptics' customers' products that utilize Synaptics' product solutions, (e) the development and launch cycles of Synaptics' customers' products, (f) market pressures on selling prices, (g) changes in product mix, (h) the market acceptance of Synaptics' product solutions compared with competitors' solutions, (i) general economic conditions, including consumer confidence and demand, and (j) 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, 2011. 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
415-217-5866 
jennifer@blueshirtgroup.com

 

(Tables to Follow)

 

SYNAPTICS INCORPORATED

 CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)









March 31,

June 30,


2012

2011





Assets




Current assets:



Cash and cash equivalents                                                                 

$ 324,118

$ 247,153

Receivables, net of allowances of $503 and $709, respectively

95,493

93,808

Inventories                                                                              

27,975

28,850

Prepaid expenses and other current assets                                                     

4,476

4,373

Total current assets                                                                    

452,062

374,184





Property and equipment, net                                                               

24,800

26,222

Goodwill                                                                             

1,927

1,927

Non-current auction rate securities

18,088

25,876

Other assets                                                                                 

26,333

27,992

Total assets                                                                              

$ 523,210

$ 456,201


Liabilities and stockholders' equity


Current liabilities:



Accounts payable                                                                          

$  47,062

$  44,930

Accrued compensation                                                                      

11,469

13,210

Income taxes payable

8,788

11,808

Other accrued liabilities                                                                    

27,598

22,813

Total current liabilities                                                                  

94,917

92,761





Notes payable

2,305

2,305

Other liabilities                                                                            

23,600

21,142





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;  





48,432,280 and 46,832,208 shares issued, and 33,674,481 and 





33,465,732 shares outstanding, respectively

48

47

Additional paid in capital

460,714

406,653

Less:  14,757,799 and 13,366,476 treasury shares, respectively, at cost

(385,666)

(352,142)

Retained earnings

324,759

282,915

Accumulated other comprehensive income

2,533

2,520

Total stockholders' equity                                                                

402,388

339,993

Total liabilities and stockholders' equity                                              

$ 523,210

$ 456,201

 

SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)
























Three Months Ended

Nine Months Ended


March 31,

March 31,


2012

2011

2012

2011









Net revenue                                                 

$ 131,705

$ 142,406

$ 410,621

$ 455,172

Cost of revenue (1)                                

69,525

84,790

218,458

269,690

Gross margin                                                  

62,180

57,616

192,163

185,482

Operating expenses








Research and development (1)                           

29,415

25,956

87,478

77,516

Selling, general, and administrative (1)           

18,031

17,244

52,461

51,750

Total operating expenses                                       

47,446

43,200

139,939

129,266









Operating income                                   

14,734

14,416

52,224

56,216

Interest income

231

242

682

679

Interest expense                                                

(4)

(4)

(13)

(13)

Impairment recovery on investments, net

46

10

59

20

Income before income taxes                 

15,007

14,664

52,952

56,902

Provision for income taxes (2)                                    

3,561

1,168

11,108

7,029

Net income                                         

$  11,446

$  13,496

$  41,844

$  49,873









Net income per share:








Basic                                                      

$    0.34

$    0.40

$    1.27

$    1.46

Diluted                                                     

$    0.33

$    0.38

$    1.22

$    1.40









Shares used in computing net income per share:








Basic                                                          

33,389

33,992

32,935

34,118

Diluted                                                      

35,179

35,346

34,374

35,565































(1) Includes share-based compensation charges of:




















Cost of revenue

$     313

$     355

$     903

$   1,032

Research and development

3,769

3,377

11,209

10,129

Selling, general, and administrative

4,915

4,619

13,551

14,547


$   8,997

$   8,351

$  25,663

$  25,708









(2) Includes tax benefit for share-based compensation charges of:




















$   2,539

$   2,347

$   7,419

$   7,426































Non-GAAP net income per share:









Basic

$    0.53

$    0.57

$    1.82

$    2.03

Diluted

$    0.51

$    0.55

$    1.75

$    1.94

 

 

 

SYNAPTICS INCORPORATED

Reconciliation of Non-GAAP Net Income and Net Income Per Share

(In thousands, except per share data)

(Unaudited)









































Three Months Ended

Nine Months Ended

March 31,

March 31,

2012

2011

2012

2011








Reported net income

$ 11,446

$ 13,496

$ 41,844

$ 49,873

Non-GAAP adjustments (net of tax):








Nonrecurring CEO resignation costs

-

-

-

1,006

Net recovery on investments

(46)

(10)

(59)

(20)

Share-based compensation

6,458

6,004

18,244

18,282

Non-GAAP basic and diluted net income

$ 17,858

$ 19,490

$ 60,029

$ 69,141








Non-GAAP net income per share:








Basic

$   0.53

$   0.57

$   1.82

$   2.03

Diluted

$   0.51

$   0.55

$   1.75

$   1.94

 

SOURCE Synaptics

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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