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
APRIL 26, 2007
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))
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 April 26,
2007.
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 26, 2007, entitled “Synaptics Reports Third Quarter Results; Company Expands Stock Repurchase Program; Elects Future Cash Settlement of Principal Portion of Convertible Senior Subordinated Notes” | |||||
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: April 26, 2007
|
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 April 26, 2007, entitled “Synaptics Reports Third Quarter Results; Company Expands Stock Repurchase Program; Elects Future Cash Settlement of Principal Portion of Convertible Senior Subordinated Notes” |
3
EXHIBIT 99.1
| For more information contact: | ||
|
Jennifer Jarman The Blueshirt Group 415-217-7722 jennifer@blueshirtgroup.com |
Synaptics
Reports Third Quarter Results
Company Expands Stock Repurchase Program; Elects Future Cash
Settlement of Principal Portion of Convertible Senior Subordinated Notes
Company Expands Stock Repurchase Program; Elects Future Cash
Settlement of Principal Portion of Convertible Senior Subordinated Notes
Santa Clara, CA – April 26, 2007 – Synaptics (Nasdaq: SYNA), a leading developer of interface
solutions for mobile computing, communications, and entertainment devices, today reported financial
results for the third fiscal quarter ended March 31, 2007. The Company’s GAAP results reflect the
expensing of non-cash share-based compensation for all periods presented.
Net revenue for the third quarter of fiscal 2007 was $64.3 million, an increase of approximately
59% over the $40.4 million for the third quarter of fiscal 2006. Net income for the third quarter
of fiscal 2007 was $5.6 million, or $0.20 per diluted share, compared with net income of $1.6
million, or $0.06 per diluted share, for the third quarter of fiscal 2006. Net income excluding
share-based compensation for the third quarter of fiscal 2007 was $8.1 million, or $0.28 per
diluted share, compared with net income excluding share-based compensation of $4.1 million, or
$0.15 per diluted share, for the third quarter of fiscal 2006. During the third quarter of fiscal
2007, the Company used $27.7 million to buy back approximately 1.1 million shares of its common
stock.
“The third quarter marks the second highest quarterly revenue in the Company’s history and reflects
continued strong demand across all of our markets,” stated Francis Lee, President and Chief
Executive Officer of Synaptics. “In the first nine months of our fiscal year, we have already
exceeded total revenue and net income for all of fiscal 2006, excluding stock-based compensation
and one-time charges. We expect to finish fiscal 2007 with record revenue and are aggressively
investing to scale our organization as we continue to rapidly expand our business.”
The Company’s balance sheet and internally generated cash flow remains strong with $245.2 million
of cash and cash equivalents as of March 31, 2007. The Company also announced that its Board of
Directors has authorized the repurchase of up to an additional $80 million of the Company’s common
stock over the next two years. Under the repurchase program, depending on market conditions and
other factors, shares may be purchased on the open market or in privately negotiated transactions.
In addition, the Company has determined to repay in cash any conversions of the principal portion
of its $125 million Convertible Senior Subordinated Notes. The Company believes these actions are
consistent with its confidence in the strong cash flow and long term growth prospects of the
Company and its desire to drive higher returns for stockholders. The election to cash settle the
principal amount of the Company’s convertible debt securities upon conversion will result in the
Company using the “treasury stock” method for calculating diluted shares. Going forward, the Company
will include diluted shares underlying the convertible notes in its diluted earnings per share
calculation only in those periods in which its average closing stock price exceeds the current
effective conversion price of $50.53 per share.
“Our recent stock buyback, authorization of additional repurchases, and election to settle any
conversions of the Convertible Senior Subordinated Notes in cash further demonstrates our ongoing
commitment to enhancing stockholder value while
maintaining a capital structure that allows us to continue investing in the growth of our
business,” concluded Mr. Lee.
Russ Knittel, the Company’s Chief Financial Officer, added, “Based on our backlog of $32.3 million
entering the June quarter and anticipated new orders during the period, we expect revenue for our
fourth fiscal quarter to be up sequentially 6% to 10%, representing a 55% to 61% increase over the
comparable period last year. Looking out into the September quarter, current data points and
general seasonal trends lead us to believe that revenues will increase on a similar percentage
basis sequentially as compared to our June quarter expectations.”
Earnings Call Information
The Synaptics third quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, April 26, 2007, during which the Company will provide forward-looking information. To participate on the live call, analysts and investors should dial 800-240-4186 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.
The Synaptics third quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, April 26, 2007, during which the Company will provide forward-looking information. To participate on the live call, analysts and investors should dial 800-240-4186 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 mobile computing, communications, and entertainment devices. 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 a majority 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
Synaptics is a leading developer of interface solutions for mobile computing, communications, and entertainment devices. 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 a majority 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
NOTE: Synaptics, TouchPad, and the Synaptics logo are trademarks of Synaptics in the United
States and/or other countries.
Use of Non-GAAP Financial Information
In evaluating our business, our management considers and uses net income per share excluding share-based compensation and restructuring costs as a supplemental measure of operating performance. Net income excluding share-based compensation and restructuring costs 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 restructuring costs 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 restructuring costs. Net income excluding share-based compensation and restructuring costs 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 restructuring costs only supplementally.
In evaluating our business, our management considers and uses net income per share excluding share-based compensation and restructuring costs as a supplemental measure of operating performance. Net income excluding share-based compensation and restructuring costs 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 restructuring costs 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 restructuring costs. Net income excluding share-based compensation and restructuring costs 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 restructuring costs 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, cash flow, and ability to generate stockholder returns, 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, (b) market demand for OEMs’ products using Synaptics’ solutions, (c) changing market demand trends in the markets it serves, 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.
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, cash flow, and ability to generate stockholder returns, 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, (b) market demand for OEMs’ products using Synaptics’ solutions, (c) changing market demand trends in the markets it serves, 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.
(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, | |||||||
| 2007 | 2006 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 47,456 | $ | 38,724 | ||||
Short term investments |
197,771 | 206,452 | ||||||
Total cash, cash equivalents, and short-term investments |
245,227 | 245,176 | ||||||
Receivables, net of allowances of $419 and $189, respectively |
49,103 | 34,034 | ||||||
Inventories |
9,125 | 10,010 | ||||||
Income taxes receviable |
8,736 | — | ||||||
Prepaid expenses and other current assets |
4,324 | 3,407 | ||||||
Total current assets |
316,515 | 292,627 | ||||||
Property and equipment, net |
18,252 | 16,038 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Other assets |
17,252 | 20,829 | ||||||
Total assets |
$ | 353,946 | $ | 331,421 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 18,186 | $ | 16,542 | ||||
Accrued compensation |
4,343 | 4,842 | ||||||
Income taxes payable |
8,153 | 8,078 | ||||||
Other accrued liabilities |
8,343 | 5,377 | ||||||
Note payable to a related party |
1,500 | — | ||||||
Total current liabilities |
40,525 | 34,839 | ||||||
Note payable to a related party |
— | 1,500 | ||||||
Convertible senior subordinated notes |
125,000 | 125,000 | ||||||
Other liabilities |
2,032 | 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; 29,003,393 and 27,462,125 shares issued, respectively |
29 | 27 | ||||||
Additional paid in capital |
166,451 | 134,217 | ||||||
Less: 3,588,100 and 2,306,100 treasury shares,
respectively, at cost |
(72,345 | ) | (39,999 | ) | ||||
Retained earnings |
92,364 | 73,261 | ||||||
Accumulated other comprehensive loss |
(110 | ) | (464 | ) | ||||
Total stockholders’ equity |
186,389 | 167,042 | ||||||
Total liabilities and stockholders’ equity |
$ | 353,946 | $ | 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 | Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Net revenue |
$ | 64,309 | $ | 40,365 | $ | 195,211 | $ | 140,645 | ||||||||
Cost of revenue (1) |
39,162 | 22,257 | 117,278 | 76,694 | ||||||||||||
Gross margin |
25,147 | 18,108 | 77,933 | 63,951 | ||||||||||||
Operating expenses |
||||||||||||||||
Research and development (1) |
9,485 | 9,106 | 28,631 | 25,740 | ||||||||||||
Selling, general, and administrative (1) |
9,339 | 6,952 | 26,067 | 20,593 | ||||||||||||
Restructuring costs |
— | — | 915 | — | ||||||||||||
Total operating expenses |
18,824 | 16,058 | 55,613 | 46,333 | ||||||||||||
Operating income |
6,323 | 2,050 | 22,320 | 17,618 | ||||||||||||
Interest income |
2,713 | 2,179 | 8,230 | 5,631 | ||||||||||||
Interest expense |
(488 | ) | (485 | ) | (1,463 | ) | (1,454 | ) | ||||||||
Income before income taxes |
8,548 | 3,744 | 29,087 | 21,795 | ||||||||||||
Provision for income taxes (2) |
2,913 | 2,121 | 9,984 | 9,857 | ||||||||||||
Net income |
$ | 5,635 | $ | 1,623 | $ | 19,103 | $ | 11,938 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.22 | $ | 0.07 | $ | 0.75 | $ | 0.49 | ||||||||
Diluted |
$ | 0.20 | $ | 0.06 | $ | 0.67 | $ | 0.44 | ||||||||
Shares used in computing net income
per share: |
||||||||||||||||
Basic |
25,823 | 24,737 | 25,509 | 24,602 | ||||||||||||
Diluted |
29,592 | 29,201 | 29,512 | 29,002 | ||||||||||||
(1) Includes share-based compensation charges of: |
||||||||||||||||
Cost of revenue |
$ | 160 | $ | 145 | $ | 492 | $ | 525 | ||||||||
Research and development |
1,262 | 1,165 | 3,736 | 3,700 | ||||||||||||
Selling, general, and administrative |
1,966 | 1,967 | 6,169 | 5,752 | ||||||||||||
| $ | 3,388 | $ | 3,277 | $ | 10,397 | $ | 9,977 | |||||||||
(2) Includes tax benefit for share-based compensation charges of: |
||||||||||||||||
| $ | 896 | $ | 771 | $ | 2,775 | $ | 2,185 | |||||||||
Non-GAAP net income per share |
||||||||||||||||
Basic |
$ | 0.31 | $ | 0.17 | $ | 1.08 | $ | 0.80 | ||||||||
Diluted |
$ | 0.28 | $ | 0.15 | $ | 0.95 | $ | 0.70 | ||||||||
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, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Numerator: |
||||||||||||||||
Basic net income |
$ | 5,635 | $ | 1,623 | $ | 19,103 | $ | 11,938 | ||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
266 | 266 | 798 | 798 | ||||||||||||
Diluted net income |
$ | 5,901 | $ | 1,889 | $ | 19,901 | $ | 12,736 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
25,823 | 24,737 | 25,509 | 24,602 | ||||||||||||
Effect of dilutive share-based awards |
1,295 | 1,990 | 1,529 | 1,926 | ||||||||||||
Effect of convertible notes |
2,474 | 2,474 | 2,474 | 2,474 | ||||||||||||
Shares, diluted |
29,592 | 29,201 | 29,512 | 29,002 | ||||||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.22 | $ | 0.07 | $ | 0.75 | $ | 0.49 | ||||||||
Diluted |
$ | 0.20 | $ | 0.06 | $ | 0.67 | $ | 0.44 | ||||||||
Computation of non-GAAP basic and diluted net income per share (unaudited): |
||||||||||||||||
Numerator: |
||||||||||||||||
Reported net income |
$ | 5,635 | $ | 1,623 | $ | 19,103 | $ | 11,938 | ||||||||
Non-GAAP adjustments: |
||||||||||||||||
Restructuring costs (net of tax) |
— | — | 890 | — | ||||||||||||
Share-based compensation (net of tax) |
2,492 | 2,506 | 7,622 | 7,792 | ||||||||||||
Non-GAAP basic net income |
8,127 | 4,129 | 27,615 | 19,730 | ||||||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
266 | 266 | 798 | 798 | ||||||||||||
Non-GAAP diluted net income |
$ | 8,393 | $ | 4,395 | $ | 28,413 | $ | 20,528 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
25,823 | 24,737 | 25,509 | 24,602 | ||||||||||||
Effect of dilutive share-based awards |
1,587 | 2,334 | 1,798 | 2,196 | ||||||||||||
Effect of convertible notes |
2,474 | 2,474 | 2,474 | 2,474 | ||||||||||||
Shares, diluted |
29,884 | 29,545 | 29,781 | 29,272 | ||||||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.31 | $ | 0.17 | $ | 1.08 | $ | 0.80 | ||||||||
Diluted |
$ | 0.28 | $ | 0.15 | $ | 0.95 | $ | 0.70 | ||||||||
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.