UNITED STATES SECURITIES AND EXCHANGE COMMISSION
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
April 20, 2006
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))
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 April 20,
2006.
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) | Shell Company Transactions. | ||
| Not applicable. | |||
| (d) | Exhibits. |
| Exhibit | ||
| Number | ||
99.1
|
Press release from Synaptics Incorporated, dated April 20, 2006, entitled “Synaptics Reports Third Quarter Results” |
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: April 20, 2006
|
By: | /s/ Russell J. Knittel | ||||
| Russell J. Knittel | ||||||
| Senior Vice President, Chief Financial Officer, | ||||||
| Chief Administrative Officer, and Secretary | ||||||
EXHIBIT INDEX
| Exhibit | ||
| Number | Description | |
99.1
|
Press release from Synaptics Incorporated, dated April 20, 2006, entitled “Synaptics Reports Third Quarter Results” |
EXHIBIT 99.1
| For more information contact: | ||
| Jennifer Jarman | ||
| The Blueshirt Group | ||
| 415-217-7722 | ||
| jennifer@blueshirtgroup.com |
Synaptics Reports Third Quarter Results
Santa Clara, CA – April 20, 2006 – Synaptics (Nasdaq: SYNA), a leader in interface solutions
for mobile computing, communications, and entertainment devices, today reported financial results
for the third fiscal quarter ended March 31, 2006. The Company’s GAAP results reflect the adoption
of SFAS 123(R) regarding the expensing of non-cash share-based compensation.
Net revenue for the third quarter of fiscal 2006 was $40.4 million, compared with $56.7 million
of net revenue for the third quarter of fiscal 2005. Net income for the third quarter of fiscal
2006 was $1.6 million, or $0.06 per diluted share, compared with $11.7 million, or $0.38 per
diluted share, for the third quarter of fiscal 2005.
Non-GAAP net income for the third quarter of fiscal 2006, which excludes non-cash share-based
compensation net of tax, was $4.1 million, or $0.15 per diluted share, compared with non-GAAP
net income of $11.7 million, or $0.38 per diluted share, for the third quarter of fiscal 2005.
“Revenue for the third quarter was below our expectations primarily due to weaker than expected
demand in the digital music player market, which has been broadly reported within the industry.
Our performance in the notebook sector was within our anticipated range, but at the lower end of
our expectations. Despite this near-term shortfall, we believe that our market leadership in
notebooks and ongoing activity within the PC industry positions us well moving forward. At the
same time, we continue to capitalize on growing opportunities to leverage our technology within
emerging digital lifestyle applications,” stated Francis Lee, President and Chief Executive Officer
of Synaptics.
Russ Knittel, Synaptics’ Chief Financial Officer, added, “Based on current indicators and our
backlog entering the fourth fiscal quarter, we anticipate top-line growth of up to 10%
sequentially. This outlook is predicated on expected seasonality and strength within our core PC
market. As we look out into the September quarter, we anticipate
continued
strong demand for our PC solutions, where we see increasing interest for our multi-media oriented
products offering dual functionality in notebook computers, and anticipate that our revenue may grow 10% to 20% from June
quarter guidance. Our visibility in the portable digital entertainment market remains very
limited, but any meaningful increased demand would represent upside to our current outlook.”
Earnings Call Information
The Synaptics third quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific
Time, on Thursday, April 20, 2006, during which the Company will provide forward-looking
information. To participate on the live call, analysts and investors should dial 800-240-2430 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.
(Tables to Follow)
SYNAPTICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| March 31, | June 30, | |||||||
| 2006 | 2005 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 57,254 | $ | 72,232 | ||||
Short term investments |
180,214 | 156,689 | ||||||
Total cash, cash equivalents, and short-term investments |
237,468 | 228,921 | ||||||
Receivables, net of allowances of $189 and $165, respectively |
29,720 | 33,790 | ||||||
Inventories |
10,646 | 7,731 | ||||||
Prepaid expenses and other current assets |
3,692 | 3,046 | ||||||
Total current assets |
281,526 | 273,488 | ||||||
Property and equipment, net |
15,786 | 14,615 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Other assets |
23,819 | 21,175 | ||||||
Total assets |
$ | 323,058 | $ | 311,205 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 14,007 | $ | 12,390 | ||||
Accrued compensation |
4,889 | 5,638 | ||||||
Income taxes payable |
11,489 | 14,867 | ||||||
Other accrued liabilities |
5,483 | 5,353 | ||||||
Total current liabilities |
35,868 | 38,248 | ||||||
Note payable to a related party |
1,500 | 1,500 | ||||||
Convertible senior subordinated notes |
125,000 | 125,000 | ||||||
Other liabilities |
1,888 | 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; 27,212,044
and 26,419,447 shares issued, respectively |
27 | 26 | ||||||
Additional paid in capital |
127,629 | 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 |
71,498 | 59,560 | ||||||
Accumulated other comprehensive loss |
(353 | ) | (129 | ) | ||||
Total stockholders’ equity |
158,802 | 144,660 | ||||||
Total liabilities and stockholders’ equity |
$ | 323,058 | $ | 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 | Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
Net revenue |
$ | 40,365 | $ | 56,668 | $ | 140,645 | $ | 151,302 | ||||||||
Cost of revenue (1) |
22,257 | 30,481 | 76,694 | 81,535 | ||||||||||||
Gross margin |
18,108 | 26,187 | 63,951 | 69,767 | ||||||||||||
Operating expenses |
||||||||||||||||
Research and development (1) |
9,106 | 6,157 | 25,740 | 18,448 | ||||||||||||
Selling, general, and administrative (1) |
6,952 | 4,937 | 20,593 | 13,091 | ||||||||||||
Amortization of deferred stock
compensation |
— | 71 | — | 258 | ||||||||||||
Total operating expenses |
16,058 | 11,165 | 46,333 | 31,797 | ||||||||||||
Operating income |
2,050 | 15,022 | 17,618 | 37,970 | ||||||||||||
Interest income |
2,179 | 1,118 | 5,631 | 1,783 | ||||||||||||
Interest expense |
(485 | ) | (483 | ) | (1,454 | ) | (660 | ) | ||||||||
Income before income taxes |
3,744 | 15,657 | 21,795 | 39,093 | ||||||||||||
Provision for income taxes (2) |
2,121 | 3,983 | 9,857 | 13,264 | ||||||||||||
Net income |
$ | 1,623 | $ | 11,674 | $ | 11,938 | $ | 25,829 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.07 | $ | 0.44 | $ | 0.49 | $ | 1.00 | ||||||||
Diluted |
$ | 0.06 | $ | 0.38 | $ | 0.44 | $ | 0.88 | ||||||||
Shares used in computing net income per share: |
||||||||||||||||
Basic |
24,737 | 26,315 | 24,602 | 25,743 | ||||||||||||
Diluted |
29,201 | 31,464 | 29,002 | 29,588 | ||||||||||||
(1) Includes share-based compensation charges of: |
||||||||||||||||
Cost of revenue |
$ | 145 | $ | — | $ | 525 | $ | — | ||||||||
Research and development |
1,165 | — | 3,700 | — | ||||||||||||
Selling, general, and administrative |
1,967 | — | 5,752 | — | ||||||||||||
| $ | 3,277 | $ | — | $ | 9,977 | $ | — | |||||||||
(2) Includes tax benefit for share-based compensation charges of: |
||||||||||||||||
| $ | 771 | $ | — | $ | 2,185 | $ | — | |||||||||
Non-GAAP net income per share |
||||||||||||||||
Basic |
$ | 0.17 | $ | 0.45 | $ | 0.80 | $ | 1.01 | ||||||||
Diluted |
$ | 0.15 | $ | 0.38 | $ | 0.70 | $ | 0.89 | ||||||||
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 | Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
Numerator: |
||||||||||||||||
Basic net income |
$ | 1,623 | $ | 11,674 | $ | 11,938 | $ | 25,829 | ||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
266 | 266 | 798 | 335 | ||||||||||||
Diluted net income |
$ | 1,889 | $ | 11,940 | $ | 12,736 | $ | 26,164 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
24,737 | 26,315 | 24,602 | 25,743 | ||||||||||||
Effect of dilutive stock based awards |
1,990 | 2,675 | 1,926 | 2,857 | ||||||||||||
Effect of convertible notes |
2,474 | 2,474 | 2,474 | 988 | ||||||||||||
Shares, diluted |
29,201 | 31,464 | 29,002 | 29,588 | ||||||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.07 | $ | 0.44 | $ | 0.49 | $ | 1.00 | ||||||||
Diluted |
$ | 0.06 | $ | 0.38 | $ | 0.44 | $ | 0.88 | ||||||||
Computation of non-GAAP basic and diluted net income per share (unaudited): |
||||||||||||||||
Numerator: |
||||||||||||||||
Reported net income |
$ | 1,623 | $ | 11,674 | $ | 11,938 | $ | 25,829 | ||||||||
Non-GAAP adjustments: |
||||||||||||||||
Amortization of deferred stock
compensation (net of tax) |
— | 58 | — | 170 | ||||||||||||
Share-based compensation (net of tax) |
2,506 | — | 7,792 | — | ||||||||||||
Non-GAAP basic net income |
4,129 | 11,732 | 19,730 | 25,999 | ||||||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
266 | 266 | 798 | 335 | ||||||||||||
Non-GAAP diluted net income |
$ | 4,395 | $ | 11,998 | $ | 20,528 | $ | 26,334 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
24,737 | 26,315 | 24,602 | 25,743 | ||||||||||||
Effect of dilutive stock based awards |
2,334 | 2,675 | 2,196 | 2,857 | ||||||||||||
Effect of convertible notes |
2,474 | 2,474 | 2,474 | 988 | ||||||||||||
Shares, diluted |
29,545 | 31,464 | 29,272 | 29,588 | ||||||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.17 | $ | 0.45 | $ | 0.80 | $ | 1.01 | ||||||||
Diluted |
$ | 0.15 | $ | 0.38 | $ | 0.70 | $ | 0.89 | ||||||||
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.