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
April 24, 2008
Date of Report (Date of earliest event reported)
SYNAPTICS INCORPORATED
(Exact Name of Registrant as Specified in Its 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 April 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 April 24, 2008, entitled “Synaptics Reports Results for Third 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: April 24, 2008 | By: | /s/ Russell J. Knittel | ||
| Russell J. Knittel | ||||
| Executive Vice President, Chief Financial Officer, Secretary, and Treasurer |
||||
2
Table of Contents
EXHIBIT INDEX
| Exhibit | ||
| Number | Description | |
99.1
|
Press release from Synaptics Incorporated, dated April 24, 2008, entitled “Synaptics Reports Results for Third Quarter of Fiscal 2008” |
Exhibit 99.1
For more information contact:
Jennifer Jarman
The Blueshirt Group
415-217-7722
jennifer@blueshirtgroup.com
The Blueshirt Group
415-217-7722
jennifer@blueshirtgroup.com
Synaptics Reports Results for Third Quarter of Fiscal 2008
Santa Clara, CA — April 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 third quarter ended March 31, 2008. The Company’s GAAP results reflect
the expensing of non-cash share-based compensation for all periods presented and non-cash
other-than-temporary impairment charges for all fiscal 2008 periods presented.
Net revenue for the third quarter of fiscal 2008 was $78.9 million, an increase of approximately
23% over $64.3 million in net revenue for the third quarter of fiscal 2007. Net income for the
third quarter of fiscal 2008 was $3.0 million, or $0.12 per diluted share, compared with net income
of $5.6 million, or $0.20 per diluted share, for the third quarter of fiscal 2007. Net income for
the third quarter of fiscal 2008 included a non-cash other-than-temporary impairment charge of $2.2
million related to the Company’s investment in auction rate securities. Excluding share-based
compensation and the non-cash other-than-temporary impairment charge, net income for the third
quarter of fiscal 2008 was $8.8 million, or $0.35 per diluted share, compared with $8.1 million, or
$0.28 per diluted share, for the third quarter of fiscal 2007.
“During the fiscal third quarter, we experienced solid year-over-year revenue growth in our PC and
non-PC markets of 20% and 34%, respectively. Revenue from mobile phone applications approached 10%
of total net revenue, and we expect it to trend up through the remainder of the calendar year,”
stated Francis Lee, President and Chief Executive Officer of Synaptics. “During the quarter, we
made progress in scaling the organization to support our growing pipeline of design opportunities.
Additionally, we aggressively executed on our stock buyback program by purchasing 4 million shares,
further underscoring our confidence in Synaptics’ prospects as well as our commitment to delivering
stockholder value.”
Russ Knittel, Synaptics’ Chief Financial Officer, added, “We exited the March quarter with a
healthy backlog of $48.1 million, an increase of approximately 28% compared with the prior quarter
end. Based on our backlog and current visibility, we anticipate revenue in the June quarter will be
$90 million to $95 million, an increase of 26% to 33% over the comparable quarter last year.
Although we are mindful of the broader macroeconomic concerns, looking out into the September
quarter, current visibility suggests sequential revenue growth in the
range of 8% to 14% relative to
the mid-point of our anticipated June quarter revenue level.”
Synaptics’ cash and short-term investments at the end of March, excluding all auction rate
securities, totaled $156.6 million. The Company’s total investment in auction rate securities was
$48.6 million, all of which are investment grade securities that are paying interest at the
contractual rates. Based on a fair value analysis in accordance with U.S. GAAP, the Company has
accounted for non-cash impairment of $7.3 million, of which $5.1 million is temporary and $2.2
million is other-than-temporary. “We will continue to monitor our investments in auction rate
securities in light of the current debt market environment. We are confident that our existing cash
and other short-term investments and our expected future cash flow from operations will be
sufficient to allow us to continue to hold our current auction rate
securities. If we hold our auction rate securities to term, and if the issuer pays all amounts
due, the impairment charges would be reversed,” stated Mr. Knittel.
Earnings Call Information
The Synaptics third quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, April 24, 2008, during which the Company will provide forward-looking information. To participate on the live call, analysts and investors should dial 800-257-1836 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 24, 2008, during which the Company will provide forward-looking information. To participate on the live call, analysts and investors should dial 800-257-1836 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
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 its business, Synaptics considers and uses net income per share excluding share-based compensation and unusual or non-recurring items as a supplemental measure of operating performance. Net income excluding share-based compensation and unusual or non-recurring items is not a measurement of the Company’s financial performance under GAAP and should not be considered as an alternative to net income. The Company presents net income excluding share-based compensation and unusual or non-recurring items because it considers it an important supplemental measure of its performance. The Company believes 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 unusual or non-recurring items. Net income excluding share-based compensation and unusual or non-recurring items has limitations as an analytical tool and should not be considered in isolation or as a substitute for the Company’s GAAP net income. The principal limitations of this measure are that it does not reflect the Company’s actual expenses and may thus have the effect of inflating its net income and net income per share.
In evaluating its business, Synaptics considers and uses net income per share excluding share-based compensation and unusual or non-recurring items as a supplemental measure of operating performance. Net income excluding share-based compensation and unusual or non-recurring items is not a measurement of the Company’s financial performance under GAAP and should not be considered as an alternative to net income. The Company presents net income excluding share-based compensation and unusual or non-recurring items because it considers it an important supplemental measure of its performance. The Company believes 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 unusual or non-recurring items. Net income excluding share-based compensation and unusual or non-recurring items has limitations as an analytical tool and should not be considered in isolation or as a substitute for the Company’s GAAP net income. The principal limitations of this measure are that it does not reflect the Company’s actual expenses and may thus have the effect of inflating its 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 cash flow from operations; its beliefs regarding the liquidity and quality of its investments in auction rates securities; 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
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 cash flow from operations; its beliefs regarding the liquidity and quality of its investments in auction rates securities; 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.
(Tables to Follow)
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, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Net revenue |
$ | 78,861 | $ | 64,309 | $ | 264,203 | $ | 195,211 | ||||||||
Cost of revenue (1) |
46,688 | 39,162 | 155,521 | 117,278 | ||||||||||||
Gross margin |
32,173 | 25,147 | 108,682 | 77,933 | ||||||||||||
Operating expenses
Research and development (1) |
13,560 | 9,485 | 35,655 | 28,631 | ||||||||||||
Selling, general, and administrative (1) |
12,181 | 9,339 | 34,346 | 26,067 | ||||||||||||
Restructuring costs |
— | — | — | 915 | ||||||||||||
Total operating expenses |
25,741 | 18,824 | 70,001 | 55,613 | ||||||||||||
Operating income |
6,432 | 6,323 | 38,681 | 22,320 | ||||||||||||
Interest income |
2,293 | 2,713 | 8,301 | 8,230 | ||||||||||||
Interest expense |
(449 | ) | (488 | ) | (1,373 | ) | (1,463 | ) | ||||||||
Gain on settlement of debt |
— | — | 2,689 | — | ||||||||||||
Impairment of investment |
— | — | (4,000 | ) | — | |||||||||||
Impairment of auction rate securities investments |
(2,237 | ) | — | (2,237 | ) | — | ||||||||||
Income before income taxes |
6,039 | 8,548 | 42,061 | 29,087 | ||||||||||||
Provision for income taxes (2) |
3,031 | 2,913 | 13,595 | 9,984 | ||||||||||||
Net income |
$ | 3,008 | $ | 5,635 | $ | 28,466 | $ | 19,103 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.12 | $ | 0.22 | $ | 1.10 | $ | 0.75 | ||||||||
Diluted |
$ | 0.12 | $ | 0.20 | $ | 1.05 | $ | 0.67 | ||||||||
Shares used in computing net income
per share: |
||||||||||||||||
Basic |
24,760 | 25,823 | 25,932 | 25,509 | ||||||||||||
Diluted |
25,302 | 29,592 | 27,134 | 29,512 | ||||||||||||
(1) Includes share-based compensation charges of: |
||||||||||||||||
Cost of revenue |
$ | 377 | $ | 160 | $ | 966 | $ | 492 | ||||||||
Research and development |
1,797 | 1,262 | 4,556 | 3,736 | ||||||||||||
Selling, general, and administrative |
2,680 | 1,966 | 7,146 | 6,169 | ||||||||||||
| $ | 4,854 | $ | 3,388 | $ | 12,668 | $ | 10,397 | |||||||||
(2) Includes tax benefit for share-based compensation charges of: |
||||||||||||||||
| $ | 1,255 | $ | 896 | $ | 4,628 | $ | 2,775 | |||||||||
Non-GAAP net income per share |
||||||||||||||||
Basic |
$ | 0.36 | $ | 0.31 | $ | 1.57 | $ | 1.08 | ||||||||
Diluted |
$ | 0.35 | $ | 0.28 | $ | 1.50 | $ | 0.95 | ||||||||
SYNAPTICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| March 31, | June 30, | |||||||
| 2008 | 2007 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 107,837 | $ | 45,915 | ||||
Short term investments |
77,906 | 219,102 | ||||||
Total cash, cash equivalents, and short-term investments |
185,743 | 265,017 | ||||||
Receivables, net of allowances of $364 and $419, respectively |
57,762 | 56,721 | ||||||
Inventories |
20,284 | 12,034 | ||||||
Prepaid expenses and other current assets |
14,250 | 4,245 | ||||||
Total current assets |
278,039 | 338,017 | ||||||
Property and equipment, net |
22,367 | 19,400 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Non-current auction rate securities |
12,246 | — | ||||||
Other assets |
4,999 | 13,968 | ||||||
Total assets |
$ | 319,578 | $ | 373,312 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 19,229 | $ | 21,552 | ||||
Accrued compensation |
6,055 | 5,372 | ||||||
Income taxes payable |
5,969 | 3,400 | ||||||
Other accrued liabilities |
8,522 | 6,272 | ||||||
Note payable |
— | 1,500 | ||||||
Total current liabilities |
39,775 | 38,096 | ||||||
Convertible senior subordinated notes |
125,000 | 125,000 | ||||||
Other liabilities |
15,819 | 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; 31,273,857
and 29,666,660 shares issued, respectively |
31 | 30 | ||||||
Additional paid in capital |
216,228 | 180,746 | ||||||
Less: 8,088,100 and 3,588,100 treasury shares,
respectively, at cost |
(200,745 | ) | (72,345 | ) | ||||
Retained earnings |
128,261 | 99,795 | ||||||
Accumulated other comprehensive loss |
(4,791 | ) | (139 | ) | ||||
Total stockholders’ equity |
138,984 | 208,087 | ||||||
Total liabilities and stockholders’ equity |
$ | 319,578 | $ | 373,312 | ||||
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, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Numerator: |
||||||||||||||||
Basic net income |
$ | 3,008 | $ | 5,635 | $ | 28,466 | $ | 19,103 | ||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
— | 266 | — | 532 | ||||||||||||
Diluted net income |
$ | 3,008 | $ | 5,901 | $ | 28,466 | $ | 19,635 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
24,760 | 25,823 | 25,932 | 25,509 | ||||||||||||
Effect of dilutive share-based awards |
542 | 1,295 | 1,202 | 1,529 | ||||||||||||
Effect of convertible notes |
— | 2,474 | — | 2,474 | ||||||||||||
Shares, diluted |
25,302 | 29,592 | 27,134 | 29,512 | ||||||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.12 | $ | 0.22 | $ | 1.10 | $ | 0.75 | ||||||||
Diluted |
$ | 0.12 | $ | 0.20 | $ | 1.05 | $ | 0.67 | ||||||||
| Computation of non-GAAP basic and diluted net income per share (unaudited): | ||||||||||||||||
Numerator: |
||||||||||||||||
Reported net income |
$ | 3,008 | $ | 5,635 | $ | 28,466 | $ | 19,103 | ||||||||
Non-GAAP adjustments (net of tax, if applicable): |
||||||||||||||||
Gain on settlement of debt |
— | — | (2,078 | ) | — | |||||||||||
Impairment of investment |
— | — | 4,000 | — | ||||||||||||
Impairment of auction rate securities investments |
2,237 | — | 2,237 | — | ||||||||||||
Restructuring costs |
— | — | — | 890 | ||||||||||||
Share-based compensation |
3,599 | 2,492 | 8,040 | 7,622 | ||||||||||||
Non-GAAP basic net income |
8,844 | 8,127 | 40,665 | 27,615 | ||||||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
— | 266 | — | 532 | ||||||||||||
Non-GAAP diluted net income |
$ | 8,844 | $ | 8,393 | $ | 40,665 | $ | 28,147 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
24,760 | 25,823 | 25,932 | 25,509 | ||||||||||||
Effect of dilutive share-based awards |
542 | 1,587 | 1,202 | 1,798 | ||||||||||||
Effect of convertible notes |
— | 2,474 | — | 2,474 | ||||||||||||
Shares, diluted |
25,302 | 29,884 | 27,134 | 29,781 | ||||||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.36 | $ | 0.31 | $ | 1.57 | $ | 1.08 | ||||||||
Diluted |
$ | 0.35 | $ | 0.28 | $ | 1.50 | $ | 0.95 | ||||||||
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.