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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
October 19, 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 | ||||||||
| 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 19,
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 October 19, 2006, entitled “Synaptics Reports First Quarter 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: October 19, 2006
|
By: | /s/ Russell J. Knittel | ||||
| Russell J. Knittel | ||||||
| Senior Vice President, Chief Financial Officer, | ||||||
| Chief Administrative Officer, and Secretary | ||||||
2
Table of Contents
EXHIBIT INDEX
| Exhibit | ||
| Number | Description | |
99.1
|
Press release from Synaptics Incorporated, dated October 19, 2006, entitled “Synaptics Reports First Quarter Results” |
EXHIBIT 99.1
| For more information contact: | ||
| Jennifer Jarman | ||
| The Blueshirt Group | ||
| 415-217-7722 | ||
| jennifer@blueshirtgroup.com |
Synaptics Reports First Quarter Results
Santa Clara, CA – October 19, 2006 – Synaptics (Nasdaq: SYNA), a leading developer of
interface solutions for mobile computing, communications, and entertainment devices, today reported
financial results for the first fiscal quarter ended September 30, 2006. The Company’s GAAP
results reflect the expensing of non-cash share-based compensation for all periods presented.
Net revenue for the first quarter of fiscal 2007 was $54.8 million, an increase of approximately 6%
over $51.7 million for the first quarter of fiscal 2006. Net income for the first quarter of
fiscal 2007 was $4.1 million, or $0.15 per diluted share, compared with net income of $5.5 million,
or $0.20 per diluted share, for the first quarter of fiscal 2006. Net income excluding share-based
compensation for the first quarter of fiscal 2007 was $6.4 million, or $0.23 per diluted share,
compared with net income excluding share-based compensation of $8.1 million, or $0.29 per diluted
share, for the first quarter of fiscal 2006.
“Revenue for the fiscal first quarter grew nearly 25% sequentially and was at the high end of our
guidance range,” stated Francis Lee, President and Chief Executive Officer of Synaptics. “Our
strong top line growth reflects general seasonality in our target markets and, in particular,
strong demand within our core PC market based on the ramp of new designs integrating our
multi-media oriented products. As anticipated, our product mix during the quarter resulted in lower
gross margin, although still within our target range. We expect to see continued momentum into the
holiday season and are anticipating record revenue in the December quarter.”
Russ Knittel, Synaptics’ Chief Financial Officer, added, “Based on our current visibility, which
includes a 53% increase in our backlog to $43.9 million, we now expect sequential revenue growth in
the fourteen week December quarter of 25% to 35%. This outlook is predicated on continued strong
seasonal trends, with increased demand from both PC and non-PC applications. We expect revenue in
the March quarter to approach September quarter levels, largely dependent on December quarter sell
through and consumer demand relative to seasonal trends in the first calendar quarter. Finally, we
are raising our outlook for fiscal 2007 revenue growth to a range of 25% to 30% over the prior
year.”
Earnings Call Information
The Synaptics first quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific
Time, on Thursday, October 19, 2006, during which the Company will provide forward-looking
information. To participate on the live call, analysts and investors should dial 800-240-6709 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 net income per share excluding share-based compensation as a supplemental measure
of operating performance. Net income excluding share-based compensation 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 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. Net income excluding share-based
compensation 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 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 and revenue growth rates for the
remainder 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) changing market demand trends in the markets it
serves, and consumer demand, and (d) 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, 2006. All forward-looking statements are based on information available to
Synaptics on the date hereof, and Synaptics assumes no obligation to update such statements.
SYNAPTICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| September 30, | June 30, | |||||||
| 2006 | 2006 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 51,796 | $ | 38,724 | ||||
Short term investments |
193,867 | 206,452 | ||||||
Total cash, cash equivalents, and short-term investments |
245,663 | 245,176 | ||||||
Receivables, net of allowances of $222 and $189, respectively |
41,813 | 34,034 | ||||||
Inventories |
9,017 | 10,010 | ||||||
Prepaid expenses and other current assets |
3,732 | 3,407 | ||||||
Total current assets |
300,225 | 292,627 | ||||||
Property and equipment, net |
16,099 | 16,038 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Other assets |
20,365 | 20,829 | ||||||
Total assets |
$ | 338,616 | $ | 331,421 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 16,152 | $ | 16,542 | ||||
Accrued compensation |
3,864 | 4,842 | ||||||
Income taxes payable |
10,969 | 8,078 | ||||||
Other accrued liabilities |
7,447 | 5,377 | ||||||
Note payable to a related party |
1,500 | — | ||||||
Total current liabilities |
39,932 | 34,839 | ||||||
Note payable to a related party |
— | 1,500 | ||||||
Convertible senior subordinated notes |
125,000 | 125,000 | ||||||
Other liabilities |
2,071 | 3,040 | ||||||
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; 27,575,943 |
||||||||
and 27,462,125 shares issued, respectively |
28 | 27 | ||||||
Additional paid in capital |
139,013 | 134,217 | ||||||
Less: 2,521,100 and 2,306,100 treasury shares,
respectively, at cost |
(44,611 | ) | (39,999 | ) | ||||
Deferred stock compensation |
— | — | ||||||
Retained earnings |
77,388 | 73,261 | ||||||
Accumulated other comprehensive loss |
(205 | ) | (464 | ) | ||||
Total stockholders’ equity |
171,613 | 167,042 | ||||||
Total liabilities and stockholders’ equity |
$ | 338,616 | $ | 331,421 | ||||
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, | ||||||||
| 2006 | 2005 | |||||||
Net revenue |
$ | 54,815 | $ | 51,725 | ||||
Cost of revenue (1) |
32,420 | 28,053 | ||||||
Gross margin |
22,395 | 23,672 | ||||||
Operating expenses |
||||||||
Research and development (1) |
9,188 | 8,289 | ||||||
Selling, general, and administrative (1) |
7,801 | 6,728 | ||||||
Total operating expenses |
16,989 | 15,017 | ||||||
Operating income |
5,406 | 8,655 | ||||||
Interest income |
2,539 | 1,551 | ||||||
Interest expense |
(487 | ) | (484 | ) | ||||
Income before income taxes |
7,458 | 9,722 | ||||||
Provision for income taxes (2) |
3,331 | 4,210 | ||||||
Net income |
$ | 4,127 | $ | 5,512 | ||||
Net income per share: |
||||||||
Basic |
$ | 0.16 | $ | 0.22 | ||||
Diluted |
$ | 0.15 | $ | 0.20 | ||||
Shares used in computing net income
per share: |
||||||||
Basic |
25,134 | 24,769 | ||||||
Diluted |
29,253 | 29,036 | ||||||
(1) Includes share-based compensation charges of: |
||||||||
Cost of revenue |
$ | 147 | $ | 192 | ||||
Research and development |
1,035 | 1,292 | ||||||
Selling, general, and administrative |
1,919 | 1,826 | ||||||
| $ | 3,101 | $ | 3,310 | |||||
(2) Includes tax benefit for share-based compensation charges of: |
||||||||
| $ | 781 | $ | 690 | |||||
Non-GAAP net income per share |
||||||||
Basic |
$ | 0.26 | $ | 0.33 | ||||
Diluted |
$ | 0.23 | $ | 0.29 | ||||
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, | ||||||||
| 2006 | 2005 | |||||||
Numerator: |
||||||||
Basic net income |
$ | 4,127 | $ | 5,512 | ||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
266 | 266 | ||||||
Diluted net income |
$ | 4,393 | $ | 5,778 | ||||
Denominator: |
||||||||
Shares, basic |
25,134 | 24,769 | ||||||
Effect of dilutive share-based awards |
1,645 | 1,793 | ||||||
Effect of convertible notes |
2,474 | 2,474 | ||||||
Shares, diluted |
29,253 | 29,036 | ||||||
Net income per share: |
||||||||
Basic |
$ | 0.16 | $ | 0.22 | ||||
Diluted |
$ | 0.15 | $ | 0.20 | ||||
Computation of non-GAAP basic and diluted net income per share (unaudited): |
||||||||
Numerator: |
||||||||
Reported net income |
$ | 4,127 | $ | 5,512 | ||||
Non-GAAP adjustments: |
||||||||
Share-based compensation, net of tax |
2,320 | 2,620 | ||||||
Non-GAAP basic net income |
6,447 | 8,132 | ||||||
Interest expense and amortization of debt issuance
costs on convertible notes, net of tax |
266 | 266 | ||||||
Non-GAAP diluted net income |
$ | 6,713 | $ | 8,398 | ||||
Denominator: |
||||||||
Shares, basic |
25,134 | 24,769 | ||||||
Effect of dilutive share-based awards |
1,780 | 1,960 | ||||||
Effect of convertible notes |
2,474 | 2,474 | ||||||
Shares, diluted |
29,388 | 29,203 | ||||||
Non-GAAP net income per share: |
||||||||
Basic |
$ | 0.26 | $ | 0.33 | ||||
Diluted |
$ | 0.23 | $ | 0.29 | ||||
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.