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Synaptics Reports First Quarter Fiscal 2014 Results

SAN JOSE, Calif., Oct. 24, 2013 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its first quarter ended September 30, 2013. 

Net revenue of $222.6 million for the first quarter of fiscal 2014 was a record for a September quarter and increased 75% compared with $127.0 million for the comparable quarter last year. Net income for the first quarter of fiscal 2014 was $34.9 million, or $1.00 per diluted share, compared with net income of $6.1 million, or $0.18 per diluted share, for the comparable quarter last year. 

Non-GAAP net income for the first quarter of fiscal 2014 was $45.9 million, or $1.31 per diluted share. Non-GAAP net income was $12.7 million, or $0.37 per diluted share, for the first quarter of fiscal 2013. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.) 

"In addition to posting substantial revenue growth during the fiscal first quarter, we made strong progress on a number of fronts," stated Rick Bergman, President and CEO.  "We saw a growing number of devices deploy our on-cell and in-cell display integrated solutions, continued to gain traction in the China mobile market, and broadened our customer base in large touchscreens through key new design wins in tablets and touch-enabled notebooks.  Following a strong first quarter, the first half of the fiscal year is tracking according to plan, and we expect to post top-line growth in excess of 50% over the same period last year." 

"We recently announced Synaptics' entry into the fast growing fingerprint ID market through a definitive agreement to acquire Validity. We believe this acquisition reinforces our market leadership in human interface technology while significantly expanding our market opportunity," concluded Mr. Bergman.  

First Quarter 2014 Business Metrics

  • Revenue mix from mobile and PC products was approximately 73% and 27%, respectively.
  • Revenue from mobile products of $162.7 million was up 152% year-over-year and down 6% sequentially. Mobile products revenue includes all touchscreen and video display products.
  • Revenue from PC products totaled $59.9 million, a decrease of 4% year-over-year and an increase of 5% sequentially.
  • Gross margin was 49.1%, an increase of 140 basis points year-over-year.

Cash at September 30, 2013 was $331.6 million. Cash flow from operations for the first quarter was $28.9 million. The company used $50.0 million to repurchase 1.2 million shares of common stock.

Kathy Bayless, CFO, added, "The September quarter benefitted from greater strength in mobile revenue than anticipated based on the timing of customer channel fill ahead of the holiday season. Considering our backlog of approximately $117.0 million entering the typically front-end loaded December quarter, customer forecasts, and the resulting expected product mix, we anticipate revenue (exclusive of the impending closure of the acquisition of Validity) to be in the range of $192.0 million to $208.0 million for the second quarter, an increase of 34% to 45% on a year-over-year basis."

Earnings Call Information
The Synaptics first quarter fiscal 2014 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, October 24, 2013, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 1-877-941-1427 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
As a leading developer of human interface solutions which enhance the user experience, Synaptics provides the broadest touch solutions portfolio in the industry.  The ClearPad™ family supports touchscreen solutions for devices ranging from entry-level mobile phones to flagship premium smartphones, tablets, and notebook PCs.  The TouchPad™ family, including ClickPad™ and ForcePad™, is integrated into the majority of today's notebook PCs.  Synaptics' wide portfolio also includes ThinTouch™, supporting thin and light keyboard solutions, as well as key technologies for next generation touch-enabled video and display applications. 
(NASDAQ: SYNA) www.synaptics.com

Synaptics, ClearPad, TouchPad, ClickPad, ForcePad, ThinTouch, 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 certain non-cash or non-recurring items as a supplemental measure of operating performance.  Net income excluding share-based compensation and certain non-cash 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 certain non-cash 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 certain non-cash or non-recurring items. Net income excluding share-based compensation and certain non-cash 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 made strong progress on a number of fronts, including the growing number of devices deployed with its on-cell and in-cell display integrated solutions, continuing to gain traction in the China mobile market, and broadening its customer base in large touchscreens through key new design wins in tablets and touch-enabled notebooks; the company's expectation that it will post top-line growth in the first half of the fiscal year in excess of 50% over the same period last year; the company's belief that its acquisition of Validity reinforces its market leadership in human interface technology while significantly expanding its market opportunity; the company's anticipated revenue for its second quarter.  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, 2013. 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)









September 30,

June 30,


2013

2013





Assets


Current assets:



Cash and cash equivalents     

$    331,572

$ 355,303

Accounts receivables, net of allowances of $883

153,939

148,454

Inventories                                                                              

57,293

49,948

Prepaid expenses and other current assets                           

7,212

6,715

Total current assets                                                                    

550,016

560,420





Property and equipment at cost, net        

61,225

58,035

Goodwill                                    

20,695

20,695

Purchased intangibles

12,848

13,110

Non-current auction rate securities

17,536

16,969

Other assets                                      

21,648

22,037

Total assets                                                

$    683,968

$ 691,266


Liabilities and stockholders' equity


Current liabilities:



Accounts payable                      

$     77,955

$  83,710

Accrued compensation                

15,074

23,728

Income taxes payable

15,098

10,751

Other accrued liabilities              

34,108

31,437

Total current liabilities                            

142,235

149,626





Notes payable

2,305

2,305

Other liabilities                                                                            

17,944

17,480





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;  





51,094,508 and 50,673,758 shares issued, and 32,493,672 and 





33,289,826 shares outstanding, respectively

51

51

Additional paid in capital

553,509

539,170

Less:  18,600,836 and 17,383,932 treasury shares, respectively, at cost

(510,157)

(460,160)

Accumulated other comprehensive income

7,150

6,802

Retained earnings

470,931

435,992

Total stockholders' equity                                                                

521,484

521,855

Total liabilities and stockholders' equity         

$    683,968

$ 691,266













SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)










 

Three Months Ended




September 30,




2013

2012








Net revenue   

$   222,607

$   127,041

Cost of revenue    

113,328

66,471

Gross margin

109,279

60,570

Operating expenses





Research and development 

40,442

32,802

Selling, general, and administrative

21,124

18,908

Acquired intangibles amortization

262

240

Change in contingent consideration

258

287

Total operating expenses   

62,086

52,237








Operating income    

47,193

8,333

Interest income

211

218

Non-cash interest income

219

-

Interest expense           

(4)

(4)

Income before provision for income taxes 

47,619

8,547

Provision for income taxes   

12,680

2,494

Net income     

$    34,939

$     6,053








Net income per share:





Basic     

$      1.06

$      0.18

Diluted     

$      1.00

$      0.18








Shares used in computing net income per share:





Basic        

32,958

32,941

Diluted      

35,020

34,014








 

SYNAPTICS INCORPORATED

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)







Three Months Ended

September 30,

2013

2012




GAAP gross margin

$109,279

$60,570

Share-based compensation

254

243

Non-GAAP gross margin

$109,533

$60,813










GAAP gross margin - percentage of revenue

49.1%

47.7%

Share-based compensation - percentage of revenue

0.1%

0.1%

Non-GAAP gross margin - percentage of revenue

49.2%

47.8%










GAAP research and development expense

$ 40,442

$32,802

Share-based compensation

(3,927)

(3,911)

Non-GAAP research and development expense

$ 36,515

$28,891










GAAP selling, general, and administrative expense

$ 21,124

$18,908

Acquisition related costs

(1,031)

-

Share-based compensation

(2,861)

(4,313)

Non-GAAP selling, general, and administrative expense

$ 17,232

$14,595










GAAP operating income

47,193

$ 8,333

Acquisition related costs

1,031

-

Acquired intangibles amortization

262

240

Change in contingent consideration

258

287

Share-based compensation

7,042

8,467

Non-GAAP operating income

$ 55,786

$17,327










GAAP net income

$ 34,939

$ 6,053

Non-cash interest income

(219)

-

Acquisition related costs

1,031

-

Acquired intangibles amortization

262

240

Change in contingent consideration

258

287

Share-based compensation

7,042

8,467

Tax adjustments

2,601

(2,304)

Non-GAAP net income

$ 45,914

$12,743










GAAP net income per share - diluted

$   1.00

0.18

Non-cash interest income

(0.01)

-

Acquisition related costs

0.03

-

Acquired intangibles amortization

0.01

-

Change in contingent consideration

0.01

0.01

Share-based compensation

0.20

0.25

Tax adjustments

0.07

(0.07)

Non-GAAP net income per share - diluted

$   1.31

$  0.37

 

 

SOURCE Synaptics, Inc.

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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