Table of Contents
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
July 27, 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 | (Commission File Number) | (IRS Employer | ||
| Jurisdiction of Incorporation) | 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 July 27, 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 July 27, 2006, entitled “Synaptics Reports Fourth Quarter and Fiscal 2006 Financial Results” |
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: July 27, 2006 | 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 July 27, 2006, entitled “Synaptics Reports Fourth Quarter and Fiscal 2006 Financial Results” |
Exhibit 99.1
| For more information contact: | ||||
|
Russ Knittel | Jennifer Jarman | ||
| Synaptics Incorporated | The Blueshirt Group | |||
| 408-454-5140 | 415-217-7722 | |||
| russk@synaptics.com | jennifer@blueshirtgroup.com | |||
Synaptics Reports Fourth Quarter and Fiscal 2006 Financial Results
Santa Clara, CA — July 27, 2006 — Synaptics (Nasdaq: SYNA), a leading developer of interface
solutions for mobile computing, communications, and entertainment devices, today reported financial
results for the fourth quarter and fiscal year ended June 30, 2006. The Company’s fiscal 2006 GAAP
results reflect the adoption of SFAS 123(R) regarding the expensing of non-cash share-based
compensation.
Net revenue for the fourth quarter of fiscal 2006 was $43.9 million compared with $56.8 million for
the fourth quarter of fiscal 2005. Net income for the fourth quarter of fiscal 2006 was $1.8
million, or $0.07 per diluted share, compared with net income of $12.2 million, or $0.41 per
diluted share, for the fourth quarter of fiscal 2005, which included the benefit of a non-recurring
item related to patent licensing. Net income excluding share-based
compensation and non-recurring items for the fourth quarter of fiscal 2006 was $4.2 million, or $0.15 per diluted
share, compared with net income excluding share-based compensation
and non-recurring items of $9.9 million, or $0.34 per diluted share, for the
fourth quarter of fiscal 2005.
Net revenue for fiscal 2006 was $184.6 million compared with $208.1 million for fiscal 2005. Net
income for fiscal 2006 was $13.7 million, or $0.51 per diluted share. This compares with net
income of $38.0 million, or $1.30 per diluted share, for fiscal 2005. Net income excluding share-based
compensation and non-recurring items for
fiscal 2006 was $24.0 million, or
$0.85 per diluted share, compared with net income excluding share-based compensation
and non-recurring items of $35.9 million, or $1.23 per diluted
share, for fiscal 2005.
“Our fiscal fourth quarter performance caps off another positive year for Synaptics, despite the
tough comparison to last year’s record-breaking results,” stated Francis Lee, President and Chief
Executive Officer of Synaptics. “During fiscal 2006, we expanded our industry-leading market share
in the notebook market and further leveraged our technology into new, emerging digital lifestyle
applications. As we enter fiscal 2007, we are very excited by the opportunities ahead of us and
are well poised to meet the challenges within the dynamic, fast-growing markets we serve. We look
forward to achieving strong year over year revenue growth, continued profitability and further
progress towards our long-term growth and diversification strategy.”
Russ Knittel, Synaptics’ Chief Financial Officer, added, “Based on our current visibility, which
includes a significant improvement in our backlog to $28.7 million at year end, we are raising our
guidance for sequential revenue growth in the September quarter to 20% to 25%. This outlook is
predicated on expected seasonality and, in particular, strong demand for our PC applications.
Looking ahead to the seasonally strong December quarter, current indicators suggest revenue may be
approximately 8% to 10% above our September quarter guidance levels. Any meaningful increase in
demand from the portable digital entertainment market,
where our visibility and predictability are
limited, would represent upside to our current outlook.”
Earnings Call Information
The Synaptics fourth quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific
Time, on Thursday, July 27, 2006, 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 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
In evaluating our business, our management considers and uses net income excluding share-based
compensation and non-recurring items and net income per share excluding share-based compensation
and non-recurring items as a supplemental measure of operating performance. Net income excluding
share-based compensation and non-recurring items is not a measurement of our financial performance
under GAAP and should not be considered as an alternative to net income. We present net income
excluding share-based compensation and non-recurring items because we consider it an important
supplemental measure of our performance. We believe this measure facilitates operating performance
comparisons from period to period by eliminating potential differences in net income caused by the
existence and timing of non-cash compensation charges and non-recurring items. Net income
excluding share-based compensation and non-recurring items has limitations as an analytical tool,
and you should not consider it in isolation or as a substitute for our GAAP net income. The
principal limitations of this measure are that it does not reflect our actual expenses and may thus
have the effect of inflating our net income and net income per share. We address these limitations
by relying primarily on our GAAP net income and using net income excluding share-based compensation
and non-recurring items only supplementally.
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 first and second quarters
of fiscal 2007, its
beliefs regarding the markets it serves, its assessment of market demands and
trends in target markets, and its assessment of consumer
demands for various applications. 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 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)
| June 30, | June 30, | |||||||
| 2006 | 2005 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 38,724 | $ | 72,232 | ||||
Short term investments |
206,452 | 156,689 | ||||||
Total cash, cash equivalents, and short-term investments |
245,176 | 228,921 | ||||||
Receivables, net of allowances of $189 and $165, respectively |
34,034 | 33,790 | ||||||
Inventories |
10,010 | 7,731 | ||||||
Prepaid expenses and other current assets |
3,407 | 3,046 | ||||||
Total current assets |
292,627 | 273,488 | ||||||
Property and equipment, net |
16,038 | 14,615 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Other assets |
20,829 | 21,175 | ||||||
Total assets |
$ | 331,421 | $ | 311,205 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 16,542 | $ | 12,390 | ||||
Accrued compensation |
4,842 | 5,638 | ||||||
Income taxes payable |
8,078 | 14,867 | ||||||
Other accrued liabilities |
5,377 | 5,353 | ||||||
Total current liabilities |
34,839 | 38,248 | ||||||
Note payable to a related party |
1,500 | 1,500 | ||||||
Convertible senior subordinated notes |
125,000 | 125,000 | ||||||
Other liabilities |
3,040 | 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; 27,462,125
and 26,419,447 shares issued, respectively |
27 | 26 | ||||||
Additional paid in capital |
134,217 | 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 |
73,261 | 59,560 | ||||||
Accumulated other comprehensive loss |
(464 | ) | (129 | ) | ||||
Total stockholders’ equity |
167,042 | 144,660 | ||||||
Total liabilities and stockholders’ equity |
$ | 331,421 | $ | 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 | Twelve Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
Net revenue |
$ | 43,912 | $ | 56,837 | $ | 184,557 | $ | 208,139 | ||||||||
Cost of revenue (1) |
25,010 | 30,555 | 101,704 | 112,090 | ||||||||||||
Gross margin |
18,902 | 26,282 | 82,853 | 96,049 | ||||||||||||
Operating expenses |
||||||||||||||||
Research and development (1) |
9,616 | 6,543 | 35,356 | 24,991 | ||||||||||||
Selling, general, and administrative (1) |
7,426 | 5,332 | 28,019 | 18,423 | ||||||||||||
Other operating expense (income) |
— | (3,800 | ) | — | (3,800 | ) | ||||||||||
Amortization of deferred stock
compensation |
— | 70 | — | 328 | ||||||||||||
Total operating expenses |
17,042 | 8,145 | 63,375 | 39,942 | ||||||||||||
Operating income |
1,860 | 18,137 | 19,478 | 56,107 | ||||||||||||
Interest income |
2,353 | 1,587 | 7,984 | 3,370 | ||||||||||||
Interest expense |
(485 | ) | (485 | ) | (1,939 | ) | (1,145 | ) | ||||||||
Income before income taxes |
3,728 | 19,239 | 25,523 | 58,332 | ||||||||||||
Provision for income taxes (2) |
1,965 | 7,083 | 11,822 | 20,347 | ||||||||||||
Net income |
$ | 1,763 | $ | 12,156 | $ | 13,701 | $ | 37,985 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.07 | $ | 0.47 | $ | 0.55 | $ | 1.48 | ||||||||
Diluted |
$ | 0.07 | $ | 0.41 | $ | 0.51 | $ | 1.30 | ||||||||
Shares used in computing net income
per share: |
||||||||||||||||
Basic |
25,028 | 25,717 | 24,708 | 25,736 | ||||||||||||
Diluted |
29,263 | 30,316 | 29,075 | 29,761 | ||||||||||||
(1) Includes share-based compensation charges of: |
||||||||||||||||
Cost of revenue |
$ | 157 | $ | — | $ | 682 | $ | — | ||||||||
Research and development |
1,099 | — | 4,799 | — | ||||||||||||
Selling, general, and administrative |
1,967 | — | 7,719 | — | ||||||||||||
| $ | 3,223 | $ | — | $ | 13,200 | $ | — | |||||||||
(2) Includes tax benefit for share-based compensation charges of: |
||||||||||||||||
| $ | 755 | $ | — | $ | 2,940 | $ | — | |||||||||
Non-GAAP net income per share |
||||||||||||||||
Basic |
$ | 0.17 | $ | 0.39 | $ | 0.97 | $ | 1.40 | ||||||||
Diluted |
$ | 0.15 | $ | 0.34 | $ | 0.85 | $ | 1.23 | ||||||||
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 | Twelve Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
Numerator: |
||||||||||||||||
Basic net income |
$ | 1,763 | $ | 12,156 | $ | 13,701 | $ | 37,985 | ||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
266 | 266 | 1,064 | 602 | ||||||||||||
Diluted net income |
$ | 2,029 | $ | 12,422 | $ | 14,765 | $ | 38,587 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
25,028 | 25,717 | 24,708 | 25,736 | ||||||||||||
Effect of dilutive stock based awards |
1,761 | 2,125 | 1,893 | 2,666 | ||||||||||||
Effect of convertible notes |
2,474 | 2,474 | 2,474 | 1,359 | ||||||||||||
Shares, diluted |
29,263 | 30,316 | 29,075 | 29,761 | ||||||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.07 | $ | 0.47 | $ | 0.55 | $ | 1.48 | ||||||||
Diluted |
$ | 0.07 | $ | 0.41 | $ | 0.51 | $ | 1.30 | ||||||||
Computation of non-GAAP basic and diluted net income per share (unaudited): |
||||||||||||||||
Numerator: |
||||||||||||||||
Reported net income |
$ | 1,763 | $ | 12,156 | $ | 13,701 | $ | 37,985 | ||||||||
Non-GAAP adjustments: |
||||||||||||||||
Other operating expense (income), net of tax |
— | (2,256 | ) | — | (2,256 | ) | ||||||||||
Amortization of deferred stock
compensation, net of tax |
— | 43 | — | 213 | ||||||||||||
Share-based compensation, net of tax |
2,468 | — | 10,260 | — | ||||||||||||
Non-GAAP basic net income |
4,231 | 9,943 | 23,961 | 35,942 | ||||||||||||
Interest expense and amortization of debt issuance
costs on convertible notes, net of tax |
266 | 266 | 1,064 | 602 | ||||||||||||
Non-GAAP diluted net income |
$ | 4,497 | $ | 10,209 | $ | 25,025 | $ | 36,544 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
25,028 | 25,717 | 24,708 | 25,736 | ||||||||||||
Effect of dilutive stock based awards |
1,997 | 2,125 | 2,142 | 2,666 | ||||||||||||
Effect of convertible notes |
2,474 | 2,474 | 2,474 | 1,359 | ||||||||||||
Shares, diluted |
29,499 | 30,316 | 29,324 | 29,761 | ||||||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.17 | $ | 0.39 | $ | 0.97 | $ | 1.40 | ||||||||
Diluted |
$ | 0.15 | $ | 0.34 | $ | 0.85 | $ | 1.23 | ||||||||
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.