Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
AUGUST 9, 2007
SYNAPTICS INCORPORATED
| 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
(408) 454-5100
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 Current 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 August 9,
2007.
The information in this Current 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 August 9,
2007, entitled “Synaptics Reports Fourth Quarter and Fiscal 2007 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: August 9, 2007 | By: | /s/ Russell J. Knittel | ||
| Russell J. Knittel | ||||
| Executive 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 August 9, 2007, entitled “Synaptics Reports
Fourth Quarter and Fiscal 2007 Results” |
|||
EXHIBIT
99.1
|
For more information contact: |
|
| Jennifer Jarman | ||
| The Blueshirt Group | ||
| 415-217-7722 | ||
| jennifer@blueshirtgroup.com |
Synaptics Reports Fourth Quarter and Fiscal 2007 Results
Record Annual Revenue Grows 45%; Net Income Increases 94% over Prior Fiscal Year
Santa Clara, CA — August 9, 2007 — Synaptics (Nasdaq: SYNA), a leading developer of human
interface solutions for mobile computing, communications, and entertainment devices, today reported
financial results for the fourth quarter and year ended June 30, 2007. The Company’s GAAP results
reflect the expensing of non-cash share-based compensation for all periods presented.
Net revenue for the fourth quarter of fiscal 2007 was $71.6 million, an increase of approximately
63% over the $43.9 million for the fourth quarter of fiscal 2006. Net income for the fourth
quarter of fiscal 2007 was $7.4 million, or $0.27 per diluted share, compared with net income of
$1.8 million, or $0.07 per diluted share, for the fourth quarter of fiscal 2006. Net income,
excluding share-based compensation, was $10.0 million, or $0.36 per diluted share, for the fourth
quarter of fiscal 2007, compared with $4.2 million, or $0.15 per diluted share, for the fourth
quarter of fiscal 2006.
Net revenue for fiscal 2007 was $266.8 million, an increase of approximately 45% over the $184.6
million for fiscal 2006. Net income for fiscal 2007 was $26.5 million, or $0.94 per diluted share.
This compares with net income of $13.7 million, or $0.51 per diluted share, for fiscal 2006. Net
income, excluding share-based compensation and non-recurring items for fiscal 2007, was $37.6
million, or $1.31 per diluted share, compared with net income,
excluding share-based compensation, of
$24.0 million, or $0.85 per diluted share, for fiscal 2006.
“Fiscal 2007 was a stellar year for Synaptics as we achieved record annual revenue, growing our top
line 45%, and almost doubling our net income compared with fiscal 2006,” stated Francis Lee,
president and chief executive officer of Synaptics. “Our solid performance reflects strong growth
in all of our target markets. During the year, we also introduced our configurable OneTouch
offering. We believe the addition of OneTouch to our solutions portfolio enhances our ability to
serve our customers’ needs and to compete in multiple fast-growing markets. The growing mobility
and digital lifestyle trends play into our strengths as emerging products and applications require
intuitive, easy-to-use interface solutions. We are very excited by the expanding opportunities in
front of us and believe we are well positioned to deliver record revenues and profits in fiscal
2008.”
Russ Knittel, the Company’s chief financial officer, added, “Based on our backlog of $46.9 million
entering the September quarter and anticipated new orders during the period, we expect revenue for
our first fiscal quarter to be up 16% to 19%
sequentially, representing a 51% to 55% increase over the comparable period last year. Looking out
to the seasonally strong December quarter, current data points lead us to believe that revenues
will increase 10% to 15% sequentially as compared to our September quarter expectations.”
Earnings Call Information
The Synaptics fourth quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific
Time, on Thursday, August 9, 2007, 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 human 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, we consider and use 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.
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, revenue growth rates and
anticipated customer orders in the first half of fiscal 2008; 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.
SYNAPTICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| June 30, | June 30, | |||||||
| 2007 | 2006 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 45,915 | $ | 38,724 | ||||
Short term investments |
219,102 | 206,452 | ||||||
Total cash, cash equivalents, and short-term investments |
265,017 | 245,176 | ||||||
Receivables, net of allowances of $419 and $189, respectively |
56,721 | 34,034 | ||||||
Inventories |
12,034 | 10,010 | ||||||
Prepaid expenses and other current assets |
4,245 | 3,407 | ||||||
Total current assets |
338,017 | 292,627 | ||||||
Property and equipment, net |
19,400 | 16,038 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Other assets |
13,968 | 20,829 | ||||||
Total assets |
$ | 373,312 | $ | 331,421 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 21,552 | $ | 16,542 | ||||
Accrued compensation |
5,372 | 4,842 | ||||||
Income taxes payable |
3,400 | 8,078 | ||||||
Other accrued liabilities |
6,272 | 5,377 | ||||||
Note payable to a related party |
1,500 | — | ||||||
Total current liabilities |
38,096 | 34,839 | ||||||
Note payable to a related party |
— | 1,500 | ||||||
Convertible senior subordinated notes |
125,000 | 125,000 | ||||||
Other liabilities |
2,129 | 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; 29,666,660
and 27,462,125 shares issued, respectively |
30 | 27 | ||||||
Additional paid in capital |
180,746 | 134,217 | ||||||
Less: 3,588,100 and 2,306,100 treasury shares,
respectively, at cost |
(72,345 | ) | (39,999 | ) | ||||
Retained earnings |
99,795 | 73,261 | ||||||
Accumulated other comprehensive loss |
(139 | ) | (464 | ) | ||||
Total stockholders’ equity |
208,087 | 167,042 | ||||||
Total liabilities and stockholders’ equity |
$ | 373,312 | $ | 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 | Twelve Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Net revenue |
$ | 71,576 | $ | 43,912 | $ | 266,787 | $ | 184,557 | ||||||||
Cost of revenue (1) |
43,635 | 25,010 | 160,913 | 101,704 | ||||||||||||
Gross margin |
27,941 | 18,902 | 105,874 | 82,853 | ||||||||||||
Operating expenses |
||||||||||||||||
Research and development (1) |
10,755 | 9,616 | 39,386 | 35,356 | ||||||||||||
Selling, general, and administrative (1) |
10,180 | 7,426 | 36,247 | 28,019 | ||||||||||||
Restructuring costs |
— | — | 915 | — | ||||||||||||
Total operating expenses |
20,935 | 17,042 | 76,548 | 63,375 | ||||||||||||
Operating income |
7,006 | 1,860 | 29,326 | 19,478 | ||||||||||||
Interest income |
2,825 | 2,353 | 11,055 | 7,984 | ||||||||||||
Interest expense |
(487 | ) | (485 | ) | (1,950 | ) | (1,939 | ) | ||||||||
Income before income taxes |
9,344 | 3,728 | 38,431 | 25,523 | ||||||||||||
Provision for income taxes (2) |
1,913 | 1,965 | 11,897 | 11,822 | ||||||||||||
Net income |
$ | 7,431 | $ | 1,763 | $ | 26,534 | $ | 13,701 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.29 | $ | 0.07 | $ | 1.04 | $ | 0.55 | ||||||||
Diluted |
$ | 0.27 | $ | 0.07 | $ | 0.94 | $ | 0.51 | ||||||||
Shares used in computing net income
per share: |
||||||||||||||||
Basic |
25,710 | 25,028 | 25,558 | 24,708 | ||||||||||||
Diluted |
27,678 | 29,263 | 29,064 | 29,075 | ||||||||||||
|
|
||||||||||||||||
(1) Includes share-based compensation charges of: |
||||||||||||||||
Cost of revenue |
$ | 258 | $ | 157 | $ | 750 | $ | 682 | ||||||||
Research and development |
1,355 | 1,099 | 5,091 | 4,799 | ||||||||||||
Selling, general, and administrative |
2,284 | 1,967 | 8,453 | 7,719 | ||||||||||||
| $ | 3,897 | $ | 3,223 | $ | 14,294 | $ | 13,200 | |||||||||
(2) Includes tax benefit for share-based compensation charges of: |
||||||||||||||||
| $ | 1,365 | $ | 755 | $ | 4,140 | $ | 2,940 | |||||||||
Non-GAAP net income per share |
||||||||||||||||
Basic |
$ | 0.39 | $ | 0.17 | $ | 1.47 | $ | 0.97 | ||||||||
Diluted |
$ | 0.36 | $ | 0.15 | $ | 1.31 | $ | 0.85 | ||||||||
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, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Numerator: |
||||||||||||||||
Basic net income |
$ | 7,431 | $ | 1,763 | $ | 26,534 | $ | 13,701 | ||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
76 | 266 | 878 | 1,064 | ||||||||||||
Diluted net income |
$ | 7,507 | $ | 2,029 | $ | 27,412 | $ | 14,765 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
25,710 | 25,028 | 25,558 | 24,708 | ||||||||||||
Effect of dilutive share-based awards |
1,261 | 1,761 | 1,465 | 1,893 | ||||||||||||
Effect of convertible notes |
707 | 2,474 | 2,041 | 2,474 | ||||||||||||
Shares, diluted |
27,678 | 29,263 | 29,064 | 29,075 | ||||||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.29 | $ | 0.07 | $ | 1.04 | $ | 0.55 | ||||||||
Diluted |
$ | 0.27 | $ | 0.07 | $ | 0.94 | $ | 0.51 | ||||||||
Computation of non-GAAP basic and diluted net income per share (unaudited): |
||||||||||||||||
Numerator: |
||||||||||||||||
Reported net income |
$ | 7,431 | $ | 1,763 | $ | 26,534 | $ | 13,701 | ||||||||
Non-GAAP adjustments: |
||||||||||||||||
Restructuring costs (net of tax) |
— | — | 890 | — | ||||||||||||
Share-based compensation (net of tax) |
2,532 | 2,468 | 10,154 | 10,260 | ||||||||||||
Non-GAAP basic net income |
9,963 | 4,231 | 37,578 | 23,961 | ||||||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
76 | 266 | 878 | 1,064 | ||||||||||||
Non-GAAP diluted net income |
$ | 10,039 | $ | 4,497 | $ | 38,456 | $ | 25,025 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
25,710 | 25,028 | 25,558 | 24,708 | ||||||||||||
Effect of dilutive share-based awards |
1,587 | 1,997 | 1,763 | 2,142 | ||||||||||||
Effect of convertible notes |
707 | 2,474 | 2,041 | 2,474 | ||||||||||||
Shares, diluted |
28,004 | 29,499 | 29,362 | 29,324 | ||||||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.39 | $ | 0.17 | $ | 1.47 | $ | 0.97 | ||||||||
Diluted |
$ | 0.36 | $ | 0.15 | $ | 1.31 | $ | 0.85 | ||||||||
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.