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
January 24, 2008
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 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 January 24,
2008.
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 Current 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 January 24,
2008, entitled “Synaptics Reports Record Revenue and Profits in Second Quarter
of Fiscal 2008” |
|||
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: January 24, 2008 | 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 January 24, 2008, entitled “Synaptics
Reports Record Revenue and Profits in Second Quarter of Fiscal 2008” |
|||
Exhibit 99.1
| For more information contact: | ||
|
Molly Plyler The Blueshirt Group 415-217-7722 molly@blueshirtgroup.com |
Synaptics Reports Record Revenue and Profits in Second
Quarter of Fiscal 2008
Quarter of Fiscal 2008
Santa Clara, CA — January 24, 2008 — Synaptics (Nasdaq: SYNA), a leading developer of human
interface solutions for mobile computing, communications, and entertainment devices, today reported
financial results for the second quarter ended December 31, 2007. The Company’s GAAP results
reflect the expensing of non-cash share-based compensation for all periods presented.
Net revenue for the second quarter of fiscal 2008 was a record $98.7 million, an increase of
approximately 30% over $76.1 million for the second quarter of fiscal 2007. Net income for the
second quarter of fiscal 2008 was a record $14.2 million, or $0.50 per diluted share, compared with
net income of $9.3 million, or $0.32 per diluted share, for the second quarter of fiscal 2007,
which included a non-recurring restructuring charge of $915,000. Net income, excluding share-based
compensation, was $17.0 million, or $0.60 per diluted share, for the second quarter of fiscal 2008,
compared with $13.0 million, or $0.44 per diluted share, for the second quarter of fiscal 2007,
which excludes the non-recurring restructuring charge.
“We are pleased to have delivered record revenue and profits in the second quarter and first half
of fiscal 2008 as we experienced strong year-over-year growth across all of our target markets.
Synaptics has helped lead the way as touch interfaces have been adopted across a wide variety of
consumer electronics devices, and our results demonstrate solid execution and the success of our
diversification strategy,” stated Francis Lee, President and Chief Executive Officer of Synaptics.
“Despite concerns regarding the current outlook for consumer spending, we believe that we are well
positioned to take advantage of the positive long-term trends for emerging digital life style
products focused on mobility, connectivity, feature-rich applications, and ease of use.”
Russ Knittel, Synaptics’ Chief Financial Officer, added, “It is clear that issues concerning the
economy are impacting the general business outlook and the behavior of our customers. Given the
34% decline in our backlog exiting the December quarter to $37.5 million and recent reductions in
customers’ forecasts, our current revenue outlook for the March quarter is in the range of $76 to
$82 million, representing an 18% to 27% increase over the comparable period last year. Looking out
to the June quarter, we currently anticipate sequential revenue growth in the range of 11% to 19%
relative to the mid-point of our March quarter outlook. Despite uncertainty in the market,
Synaptics is on track to exceed the 25-30% revenue growth outlook for fiscal 2008 that we provided
entering the fiscal year, along with record profitability.”
Earnings Call Information
The Synaptics second quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific
Time, on Thursday, January 24, 2008, during which the Company will provide forward-looking
information. To participate on the live call, analysts and investors should dial
800-218-0530 at least ten minutes prior to the call. Synaptics
800-218-0530 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™,
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 third and fourth quarters of fiscal 2008; its beliefs regarding
the markets it serves; its position and opportunities in those markets; 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, 2007. 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)
| December 31, | June 30, | |||||||
| 2007 | 2007 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 130,000 | $ | 45,915 | ||||
Short term investments |
156,315 | 219,102 | ||||||
Total cash, cash equivalents, and short-term investments |
286,315 | 265,017 | ||||||
Receivables, net of allowances of $364 and $419, respectively |
66,914 | 56,721 | ||||||
Inventories |
20,147 | 12,034 | ||||||
Prepaid expenses and other current assets |
13,518 | 4,245 | ||||||
Total current assets |
386,894 | 338,017 | ||||||
Property and equipment, net |
20,837 | 19,400 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Other assets |
6,353 | 13,968 | ||||||
Total assets |
$ | 416,011 | $ | 373,312 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 19,384 | $ | 21,552 | ||||
Accrued compensation |
5,262 | 5,372 | ||||||
Income taxes payable |
4,274 | 3,400 | ||||||
Other accrued liabilities |
8,032 | 6,272 | ||||||
Note payable |
— | 1,500 | ||||||
Total current liabilities |
36,952 | 38,096 | ||||||
Convertible senior subordinated notes |
125,000 | 125,000 | ||||||
Other liabilities |
14,620 | 2,129 | ||||||
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; 31,109,034
and 29,666,660 shares issued, respectively |
31 | 30 | ||||||
Additional paid in capital |
209,408 | 180,746 | ||||||
Less: 4,088,100 and 3,588,100 treasury shares,
respectively, at cost |
(91,296 | ) | (72,345 | ) | ||||
Retained earnings |
125,253 | 99,795 | ||||||
Accumulated other comprehensive loss |
(3,957 | ) | (139 | ) | ||||
Total stockholders’ equity |
239,439 | 208,087 | ||||||
Total liabilities and stockholders’ equity |
$ | 416,011 | $ | 373,312 | ||||
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 | Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Net revenue |
$ | 98,650 | $ | 76,087 | $ | 185,342 | $ | 130,902 | ||||||||
Cost of revenue (1) |
57,605 | 45,696 | 108,833 | 78,116 | ||||||||||||
Gross margin |
41,045 | 30,391 | 76,509 | 52,786 | ||||||||||||
Operating expenses |
||||||||||||||||
Research and development (1) |
11,693 | 9,958 | 22,095 | 19,146 | ||||||||||||
Selling, general, and administrative (1) |
11,415 | 8,927 | 22,165 | 16,728 | ||||||||||||
Restructuring costs |
— | 915 | — | 915 | ||||||||||||
Total operating expenses |
23,108 | 19,800 | 44,260 | 36,789 | ||||||||||||
Operating income |
17,937 | 10,591 | 32,249 | 15,997 | ||||||||||||
Interest income |
3,013 | 2,978 | 6,008 | 5,517 | ||||||||||||
Interest expense |
(449 | ) | (488 | ) | (924 | ) | (975 | ) | ||||||||
Gain on settlement of debt |
— | — | 2,689 | — | ||||||||||||
Impairment of investment |
— | — | (4,000 | ) | — | |||||||||||
Income before income taxes |
20,501 | 13,081 | 36,022 | 20,539 | ||||||||||||
Provision for income taxes (2) |
6,305 | 3,740 | 10,564 | 7,071 | ||||||||||||
Net income |
$ | 14,196 | $ | 9,341 | $ | 25,458 | $ | 13,468 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.53 | $ | 0.37 | $ | 0.96 | $ | 0.53 | ||||||||
Diluted |
$ | 0.50 | $ | 0.32 | $ | 0.91 | $ | 0.48 | ||||||||
Shares used in computing net income
per share: |
||||||||||||||||
Basic |
26,827 | 25,568 | 26,519 | 25,359 | ||||||||||||
Diluted |
28,320 | 29,692 | 28,020 | 29,468 | ||||||||||||
(1) Includes share-based compensation charges of: |
||||||||||||||||
Cost of revenue |
$ | 350 | $ | 185 | $ | 589 | $ | 332 | ||||||||
Research and development |
1,588 | 1,439 | 2,759 | 2,474 | ||||||||||||
Selling, general, and administrative |
2,547 | 2,284 | 4,466 | 4,203 | ||||||||||||
| $ | 4,485 | $ | 3,908 | $ | 7,814 | $ | 7,009 | |||||||||
(2) Includes tax benefit for share-based compensation charges of: |
||||||||||||||||
| $ | 1,676 | $ | 1,098 | $ | 3,373 | $ | 1,879 | |||||||||
Non-GAAP net income per share |
||||||||||||||||
Basic |
$ | 0.63 | $ | 0.51 | $ | 1.20 | $ | 0.77 | ||||||||
Diluted |
$ | 0.60 | $ | 0.44 | $ | 1.14 | $ | 0.67 | ||||||||
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 | Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Numerator: |
||||||||||||||||
Basic net income |
$ | 14,196 | $ | 9,341 | $ | 25,458 | $ | 13,468 | ||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
— | 266 | — | 532 | ||||||||||||
Diluted net income |
$ | 14,196 | $ | 9,607 | $ | 25,458 | $ | 14,000 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
26,827 | 25,568 | 26,519 | 25,359 | ||||||||||||
Effect of dilutive share-based awards |
1,432 | 1,650 | 1,501 | 1,635 | ||||||||||||
Effect of convertible notes |
61 | 2,474 | — | 2,474 | ||||||||||||
Shares, diluted |
28,320 | 29,692 | 28,020 | 29,468 | ||||||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.53 | $ | 0.37 | $ | 0.96 | $ | 0.53 | ||||||||
Diluted |
$ | 0.50 | $ | 0.32 | $ | 0.91 | $ | 0.48 | ||||||||
Computation of non-GAAP basic and diluted net income per share (unaudited): |
||||||||||||||||
Numerator: |
||||||||||||||||
Reported net income |
$ | 14,196 | $ | 9,341 | $ | 25,458 | $ | 13,468 | ||||||||
Non-GAAP adjustments: |
||||||||||||||||
Gain on settlement of debt, net of tax |
— | — | (2,078 | ) | — | |||||||||||
Impairment of investment, net of tax |
— | — | 4,000 | — | ||||||||||||
Restructuring costs (net of tax) |
— | 890 | — | 890 | ||||||||||||
Share-based compensation (net of tax) |
2,809 | 2,810 | 4,441 | 5,130 | ||||||||||||
Non-GAAP basic net income |
17,005 | 13,041 | 31,821 | 19,488 | ||||||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
— | 266 | — | 532 | ||||||||||||
Non-GAAP diluted net income |
$ | 17,005 | $ | 13,307 | $ | 31,821 | $ | 20,020 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
26,827 | 25,568 | 26,519 | 25,359 | ||||||||||||
Effect of dilutive share-based awards |
1,432 | 1,973 | 1,501 | 1,892 | ||||||||||||
Effect of convertible notes |
61 | 2,474 | — | 2,474 | ||||||||||||
Shares, diluted |
28,320 | 30,015 | 28,020 | 29,725 | ||||||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.63 | $ | 0.51 | $ | 1.20 | $ | 0.77 | ||||||||
Diluted |
$ | 0.60 | $ | 0.44 | $ | 1.14 | $ | 0.67 | ||||||||
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.