Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 20, 2005
Date of Report (Date of earliest event reported)
SYNAPTICS INCORPORATED
(Exact Name of Registrant as Specified in Charter)
| DELAWARE | 000-49602 | 77-0118518 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
3120 SCOTT BLVD.
SUITE 130
SANTA CLARA, CALIFORNIA
95054
SUITE 130
SANTA CLARA, CALIFORNIA
95054
(Address of Principal Executive Offices) (Zip Code)
(408) 454-5100
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
| Item 2.02. Results of Operations and Financial Condition | ||||||||
| Item 9.01. Financial Statements and Exhibits | ||||||||
| SIGNATURES | ||||||||
| EXHIBIT INDEX | ||||||||
| EX-99.1 | ||||||||
Table of Contents
Item 2.02. Results of Operations and Financial Condition.
The registrant is furnishing this Report on Form 8-K in connection with the disclosure of
information, in the form of the textual information from a press release released on October 20,
2005.
The information in this Report on Form 8-K (including the exhibit) is furnished pursuant to
Item 2.02 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that section.
The registrant does not have, and expressly disclaims, any obligation to release publicly any
updates or any changes in the registrant’s expectations or any change in events, conditions, or
circumstances on which any forward-looking statement is based.
The text included with this Report is available on the registrant’s website located at
www.synaptics.com, although the registrant reserves the right to discontinue that availability at
any time.
Item 9.01. Financial Statements and Exhibits.
(a)
|
Financial Statements of Business Acquired. | |
| Not applicable. | ||
(b)
|
Pro Forma Financial Information. | |
| Not applicable. | ||
(c)
|
Exhibits. |
| Exhibit | ||||||
| Number | ||||||
| 99.1 | Press release from Synaptics Incorporated, dated October 20, 2005, entitled “Synaptics Reports First Quarter Results; Expands Stock Repurchase Program” | |||||
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SYNAPTICS INCORPORATED |
||||
| Date: October 20, 2005 | By: | /s/ Russell J. Knittel | ||
| Russell J. Knittel | ||||
| Senior Vice President, Chief Financial Officer, Chief Administrative Officer, and Secretary |
||||
Table of Contents
EXHIBIT INDEX
| Exhibit | ||
| Number | Description | |
99.1
|
Press release from Synaptics Incorporated, dated October 20, 2005, entitled “Synaptics Reports First Quarter Results; Expands Stock Repurchase Program” |
Exhibit 99.1
| For more information contact: | ||||
|
Russ Knittel Synaptics Incorporated 408-454-5140 russk@synaptics.com |
Jennifer Jarman The Blueshirt Group 415-217-7722 jennifer@blueshirtgroup.com |
Synaptics Reports First Quarter Results; Expands Stock
Repurchase Program
Repurchase Program
Santa
Clara, CA — October 20, 2005 — Synaptics (Nasdaq: SYNA), a leader in interface solutions
for mobile computing, communications, and entertainment devices, today reported financial results
for the first fiscal quarter ended September 30, 2005. The Company’s GAAP results reflect the
adoption of SFAS 123(R) regarding option expensing.
Net revenue for the first quarter of fiscal 2006 was $51.7 million, an increase of approximately
36% over the $38.1 million of net revenue for the first quarter of fiscal 2005.
Net income for the first quarter of fiscal 2006, which includes $3.3 million in non-cash
share-based compensation charges partially offset by an associated tax benefit of $690,000, was
$5.5 million, or $0.20 per diluted share, an increase of approximately 24% compared with $4.4
million, or $0.16 per diluted share, for the first quarter of fiscal 2005.
Non-GAAP net income for the first quarter of fiscal 2006, which excludes non-cash share-based
compensation net of tax, was $8.1 million, or $0.29 per diluted share, an increase of approximately
81% compared with non-GAAP net income of $4.5 million, or $0.16 per diluted share, for the first
quarter of fiscal 2005.
“Results for the September quarter were generally as anticipated, with strong demand for our
solutions in PC-based applications countered by lower demand in portable music player applications,”
stated Francis Lee, President and Chief Executive Officer of Synaptics. “While we detect some
concern from customers regarding consumer spending, we remain cautiously optimistic regarding
overall demand levels as we enter the traditionally strong holiday period. As a total solutions
provider to a large number of OEMs, we have a proven track record of executing in dynamic market
conditions, and we look to further expand our product offerings and customer base in fiscal 2006.”
Russ Knittel, Synaptics’ Chief Financial Officer, added, “Based on our current visibility, we
expect revenue in the second fiscal quarter to be $46 million to $50 million, which is at the high
end of our previously provided guidance. This anticipates seasonal growth in the notebook market
and continued declines in revenue from the MP3 market.”
Synaptics also announced that its Board of Directors has authorized the repurchase of up to an
additional $40 million of the Company’s common stock in the open market or in privately negotiated
transactions, depending upon market conditions and other factors. The Company has completed its
previous $40 million stock repurchase program, buying back a total of 2.3 million shares.
Earnings Call Information
The Synaptics first quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific
Time, on Thursday, October 20, 2005, during which the Company will provide forward-looking
information. To participate on the live call, analysts and investors should dial 800-257-7063 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™,
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, its beliefs regarding the markets
it serves, its view of its operating fundamentals, its assessment of market conditions, and its
competitive position in the notebook computer and portable music player 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, and (d) 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.
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.
(Tables to Follow)
SYNAPTICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| September 30, | June 30, | |||||||
| 2005 | 2005 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 51,903 | $ | 72,232 | ||||
Short term investments |
167,861 | 156,689 | ||||||
Total cash, cash equivalents, and short-term investments |
219,764 | 228,921 | ||||||
Receivables, net of allowances of $194 and $165, respectively |
32,897 | 33,790 | ||||||
Inventories |
7,117 | 7,731 | ||||||
Prepaid expenses and other current assets |
2,895 | 3,046 | ||||||
Total current assets |
262,673 | 273,488 | ||||||
Property and equipment, net |
15,894 | 14,615 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Other assets |
21,499 | 21,175 | ||||||
Total assets |
$ | 301,993 | $ | 311,205 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 11,633 | $ | 12,390 | ||||
Accrued compensation |
3,334 | 5,638 | ||||||
Income taxes payable |
17,169 | 14,867 | ||||||
Other accrued liabilities |
5,469 | 5,353 | ||||||
Total current liabilities |
37,605 | 38,248 | ||||||
Note payable to a related party |
1,500 | 1,500 | ||||||
Convertible senior subordinated notes |
125,000 | 125,000 | ||||||
Other liabilities |
1,866 | 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; 26,533,529
and 26,419,447 shares issued, respectively |
27 | 26 | ||||||
Additional paid in capital |
111,085 | 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 |
65,072 | 59,560 | ||||||
Accumulated other comprehensive loss |
(163 | ) | (129 | ) | ||||
Total stockholders’ equity |
136,022 | 144,660 | ||||||
Total liabilities and stockholders’ equity |
$ | 301,993 | $ | 311,205 | ||||
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2005 | 2004 | |||||||
Net revenue |
$ | 51,725 | $ | 38,091 | ||||
Cost of revenue (1) |
28,053 | 20,899 | ||||||
Gross margin |
23,672 | 17,192 | ||||||
Operating expenses |
||||||||
Research and development (1) |
8,289 | 6,043 | ||||||
Selling, general, and administrative (1) |
6,728 | 3,766 | ||||||
Amortization of deferred stock
compensation |
— | 102 | ||||||
Total operating expenses |
15,017 | 9,911 | ||||||
Operating income |
8,655 | 7,281 | ||||||
Interest income |
1,551 | 268 | ||||||
Interest expense |
(484 | ) | (26 | ) | ||||
Income before income taxes |
9,722 | 7,523 | ||||||
Provision for income taxes (2) |
4,210 | 3,092 | ||||||
Net income |
$ | 5,512 | $ | 4,431 | ||||
Net income per share: |
||||||||
Basic |
$ | 0.22 | $ | 0.18 | ||||
Diluted |
$ | 0.20 | $ | 0.16 | ||||
Shares used in computing net income
per share: |
||||||||
Basic |
24,769 | 25,099 | ||||||
Diluted |
29,036 | 27,694 | ||||||
(1) Includes share-based compensation charges recognized in connection with accounting for our stock
option plans and employee stock purchase plan in conformity with SFAS 123R “Share-Based Payment” as follows: |
||||||||
Cost of revenue |
$ | 192 | $ | — | ||||
Research and development |
1,292 | — | ||||||
Selling, general, and administrative |
1,826 | — | ||||||
| $ | 3,310 | $ | — | |||||
(2) Includes tax benefit for share-based compensation charges of: |
||||||||
| $ | 690 | $ | — | |||||
Non-GAAP results (unaudited) |
||||||||
Reported net income |
$ | 5,512 | $ | 4,431 | ||||
Non-GAAP adjustments: |
||||||||
Amortization of deferred stock
compensation (net of tax) |
— | 60 | ||||||
Share-based compensation (net of tax) |
2,620 | — | ||||||
Non-GAAP net income |
$ | 8,132 | $ | 4,491 | ||||
Non-GAAP net income per share |
||||||||
Basic |
$ | 0.33 | $ | 0.18 | ||||
Diluted |
$ | 0.29 | $ | 0.16 | ||||
SYNAPTICS INCORPORATED
Computation of Basic and Diluted Net Income Per Share
(in thousands except per share data)
(Unaudited)
Computation of Basic and Diluted Net Income Per Share
(in thousands except per share data)
(Unaudited)
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2005 | 2004 | |||||||
Numerator: |
||||||||
Basic net income |
$ | 5,512 | $ | 4,431 | ||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
266 | — | ||||||
Diluted net income |
$ | 5,778 | $ | 4,431 | ||||
Denominator: |
||||||||
Shares, basic |
24,769 | 25,099 | ||||||
Effect of dilutive stock options |
1,793 | 2,595 | ||||||
Effect of convertible notes |
2,474 | — | ||||||
Shares, diluted |
29,036 | 27,694 | ||||||
Net income per share: |
||||||||
Basic |
$ | 0.22 | $ | 0.18 | ||||
Diluted |
$ | 0.20 | $ | 0.16 | ||||
| Computation of non-GAAP basic and diluted net income per share (unaudited): | ||||||||
Numerator: |
||||||||
Reported net income |
$ | 5,512 | $ | 4,431 | ||||
Non-GAAP adjustments: |
||||||||
Amortization of deferred stock
compensation (net of tax) |
— | 60 | ||||||
Share-based compensation (net of tax) |
2,620 | — | ||||||
Non-GAAP basic net income |
8,132 | 4,491 | ||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
266 | — | ||||||
Non-GAAP diluted net income |
$ | 8,398 | $ | 4,491 | ||||
Denominator: |
||||||||
Shares, basic |
24,769 | 25,099 | ||||||
Effect of dilutive stock options |
1,960 | 2,595 | ||||||
Effect of convertible notes |
2,474 | — | ||||||
Shares, diluted |
29,203 | 27,694 | ||||||
Non-GAAP net income per share: |
||||||||
Basic |
$ | 0.33 | $ | 0.18 | ||||
Diluted |
$ | 0.29 | $ | 0.16 | ||||
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.