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 22, 2009
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.
SANTA CLARA, CALIFORNIA 95054
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)) |
| 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 22,
2009.
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 22, 2009, entitled “Synaptics Reports Record Revenue and Net Income for Second Quarter of Fiscal 2009” |
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 22, 2009 | By: | /s/ Russell J. Knittel | ||
| Russell J. Knittel | ||||
| Executive Vice President, Chief Financial Officer, Secretary, and Treasurer |
||||
2
EXHIBIT INDEX
| Exhibit | ||
| Number | Description | |
99.1
|
Press release from Synaptics Incorporated, dated January 22, 2009, entitled “Synaptics Reports Record Revenue and Net Income for Second Quarter of Fiscal 2009” |
Exhibit 99.1
| For more information contact: | ||
|
Jennifer Jarman The Blueshirt Group 415-217-7722 jennifer@blueshirtgroup.com |
Synaptics Reports Record Revenue and Net Income for Second Quarter of Fiscal 2009
Santa Clara, CA – January 22, 2009 – 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, 2008. The Company’s GAAP results
reflect the expensing of non-cash share-based compensation for all periods presented; non-operating
gains and non-cash impairment charges for all fiscal 2009 periods presented; and non-cash operating
gains and impairment charges for the six-month period ended December 31, 2007.
Net revenue for the second quarter of fiscal 2009 was $141.5 million, an increase of approximately
43% over $98.7 million of net revenue for the second quarter of fiscal 2008. Net income for the
second quarter of fiscal 2009 was $21.2 million, or $0.60 per diluted share, compared with net
income of $14.2 million, or $0.33 per diluted share, for the second quarter of fiscal 2008. Net
income for the second quarter of fiscal 2009 included a non-cash other-than-temporary impairment
charge of $6.5 million related to the Company’s investment in auction rate securities and a $3.6
million net gain on the early retirement of debt. Net income, excluding non-cash charges for
share-based compensation, the non-cash other-than-temporary impairment charge, and the net gain on
the early retirement of debt, was $29.5 million, or $0.84 per diluted share, for the second quarter
of fiscal 2009, compared with net income, excluding share-based compensation, of $17.0 million, or
$0.40 per diluted share, for the second quarter of fiscal 2008.
“In spite of the current macroeconomic environment, we posted the highest quarterly revenue, net
income and earnings per share in our history, driven by 43% revenue growth year-over-year,” stated
Francis Lee, Chairman and Chief Executive Officer of Synaptics. “The benefits of our revenue
diversification strategy are clearly evident in our operating performance as our penetration in the
mobile handheld markets more than offset a relatively small decline in PC based revenue in a
generally weak notebook market. We intend to continue to selectively invest to further strengthen
our competitive position emerging from the current economic downturn. Based on our strong first
half performance, we are on track to achieve record revenue and profits in fiscal 2009.”
Russ
Knittel, Synaptics’ Chief Financial Officer, added, “We are
expecting solid year-over-year growth for the fiscal third quarter
despite the challenging macroeconomic conditions. Based on our current visibility and backlog of $50.6 million exiting the December
quarter, we anticipate revenue in the March quarter will be $88 million to $98 million, an increase
of 12% to 24% over the comparable quarter last year.”
During the quarter, the Company retired $59.7 million of its outstanding convertible notes at a
discount of approximately 7%. After deducting the associated unamortized debt issuance costs, the
Company realized a $3.6 million net gain on retirement of debt.
Synaptics’ cash and short-term investments at the end of December, which excludes $29.4 million
book value of auction rate securities, totaled $136.8 million. Based on a fair value analysis in
accordance with U.S. GAAP, the Company has accounted for a net $6.5 million non-cash
other-than-temporary impairment charge to its quarterly earnings and a $611,000 net reduction of
temporary impairment through other comprehensive income in the equity section of its balance sheet.
“We will continue to monitor our investments in auction rate securities in light of the current
debt market environment,” stated Mr. Knittel.
Earnings Call Information
The Synaptics second quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific
Time, on Thursday, January 22, 2009, during which the Company will provide forward-looking
information. To participate on the live call, analysts and investors should dial 800-351-1564 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 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 GAAP 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 and revenue growth rates; the
success of our growth strategies; its beliefs regarding the markets it serves; its assessment of its competitive 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, 2008. 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)
| December 31, | June 30, | |||||||
| 2008 | 2008 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 109,604 | $ | 96,218 | ||||
Short term investments |
27,165 | 50,298 | ||||||
Total cash, cash equivalents, and short-term investments |
136,769 | 146,516 | ||||||
Receivables, net of allowances of $624 and $539, respectively |
81,665 | 69,362 | ||||||
Inventories |
22,121 | 21,065 | ||||||
Prepaid expenses and other current assets |
4,626 | 3,417 | ||||||
Total current assets |
245,181 | 240,360 | ||||||
Property and equipment, net |
25,568 | 22,459 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Non-current investments |
29,443 | 37,946 | ||||||
Other assets |
4,789 | 3,669 | ||||||
Total assets |
$ | 306,908 | $ | 306,361 | ||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 27,554 | $ | 27,784 | ||||
Accrued compensation |
7,255 | 6,510 | ||||||
Income taxes payable |
5,856 | 7,095 | ||||||
Convertible senior subordinated notes |
65,303 | — | ||||||
Other accrued liabilities |
13,341 | 9,120 | ||||||
Total current liabilities |
119,309 | 50,509 | ||||||
Convertible senior subordinated notes |
— | 125,000 | ||||||
Other liabilities |
19,338 | 17,075 | ||||||
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;
42,961,996 and 42,500,535 shares issued, and
33,873,896 and 33,412,435 shares outstanding,
respectively |
43 | 43 | ||||||
Additional paid in capital |
242,232 | 222,543 | ||||||
Less: 9,088,100 and 9,088,100 treasury shares,
respectively, at cost |
(237,387 | ) | (237,387 | ) | ||||
Retained earnings |
166,051 | 130,895 | ||||||
Accumulated other comprehensive loss |
(2,678 | ) | (2,317 | ) | ||||
Total stockholders’ equity |
168,261 | 113,777 | ||||||
Total liabilities and stockholders’ equity |
$ | 306,908 | $ | 306,361 | ||||
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, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Net revenue |
$ | 141,523 | $ | 98,650 | $ | 257,380 | $ | 185,342 | ||||||||
Cost of revenue (1) |
83,717 | 57,605 | 152,981 | 108,833 | ||||||||||||
Gross margin |
57,806 | 41,045 | 104,399 | 76,509 | ||||||||||||
Operating expenses |
||||||||||||||||
Research and development (1) |
15,940 | 11,693 | 31,745 | 22,095 | ||||||||||||
Selling, general, and administrative (1) |
13,714 | 11,415 | 28,284 | 22,165 | ||||||||||||
Total operating expenses |
29,654 | 23,108 | 60,029 | 44,260 | ||||||||||||
Operating income |
28,152 | 17,937 | 44,370 | 32,249 | ||||||||||||
Interest income |
974 | 3,013 | 2,232 | 6,008 | ||||||||||||
Interest expense |
(321 | ) | (449 | ) | (770 | ) | (924 | ) | ||||||||
Gain on settlement of debt |
— | — | — | 2,689 | ||||||||||||
Gain on early retirement of debt |
3,600 | — | 3,600 | — | ||||||||||||
Impairment of investment |
— | — | — | (4,000 | ) | |||||||||||
Impairment of auction rate securities investments |
(6,509 | ) | — | (6,509 | ) | — | ||||||||||
Income before income taxes |
25,896 | 20,501 | 42,923 | 36,022 | ||||||||||||
Provision for income taxes (2) |
4,699 | 6,305 | 7,767 | 10,564 | ||||||||||||
Net income |
$ | 21,197 | $ | 14,196 | $ | 35,156 | $ | 25,458 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.63 | $ | 0.35 | $ | 1.04 | $ | 0.64 | ||||||||
Diluted |
$ | 0.60 | $ | 0.33 | $ | 1.00 | $ | 0.61 | ||||||||
Shares used in computing net income per share: |
||||||||||||||||
Basic |
33,833 | 40,241 | 33,736 | 39,779 | ||||||||||||
Diluted |
35,057 | 42,480 | 35,311 | 42,030 | ||||||||||||
(1) Includes share-based compensation charges of: |
||||||||||||||||
Cost of revenue |
$ | 402 | $ | 350 | $ | 813 | $ | 589 | ||||||||
Research and development |
1,962 | 1,588 | 3,978 | 2,759 | ||||||||||||
Selling, general, and
administrative |
3,292 | 2,547 | 6,746 | 4,466 | ||||||||||||
| $ | 5,656 | $ | 4,485 | $ | 11,537 | $ | 7,814 | |||||||||
| (2) Includes tax benefit for share-based compensation charges of: | ||||||||||||||||
| $ | 1,769 | $ | 1,676 | $ | 3,737 | $ | 3,373 | |||||||||
Non-GAAP net income per share |
||||||||||||||||
Basic |
$ | 0.87 | $ | 0.42 | $ | 1.40 | $ | 0.80 | ||||||||
Diluted |
$ | 0.84 | $ | 0.40 | $ | 1.34 | $ | 0.76 | ||||||||
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, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Numerator: |
||||||||||||||||
Basic and diluted net income |
$ | 21,197 | $ | 14,196 | $ | 35,156 | $ | 25,458 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
33,833 | 40,241 | 33,736 | 39,779 | ||||||||||||
Effect of dilutive share-based awards |
1,224 | 2,147 | 1,575 | 2,251 | ||||||||||||
Effect of convertible notes |
— | 92 | — | — | ||||||||||||
Shares, diluted |
35,057 | 42,480 | 35,311 | 42,030 | ||||||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.63 | $ | 0.35 | $ | 1.04 | $ | 0.64 | ||||||||
Diluted |
$ | 0.60 | $ | 0.33 | $ | 1.00 | $ | 0.61 | ||||||||
| Computation of non-GAAP basic and diluted net income per share (unaudited): | ||||||||||||||||
Numerator: |
||||||||||||||||
Reported net income |
$ | 21,197 | $ | 14,196 | $ | 35,156 | $ | 25,458 | ||||||||
Non-GAAP adjustments (net of tax): |
||||||||||||||||
Gain on settlement of debt |
— | — | — | (2,078 | ) | |||||||||||
Impairment of investment |
— | — | — | 4,000 | ||||||||||||
Gain on early retirement
of debt |
(2,133 | ) | — | (2,133 | ) | — | ||||||||||
Impairment of auction
rate security investments |
6,509 | — | 6,509 | — | ||||||||||||
Share-based compensation |
3,887 | 2,809 | 7,800 | 4,441 | ||||||||||||
Non-GAAP basic and diluted net income |
29,460 | 17,005 | 47,332 | 31,821 | ||||||||||||
Denominator: |
||||||||||||||||
Shares, basic |
33,833 | 40,241 | 33,736 | 39,779 | ||||||||||||
Effect of dilutive share-based awards |
1,224 | 2,147 | 1,575 | 2,251 | ||||||||||||
Effect of convertible notes |
— | 92 | — | — | ||||||||||||
Shares, diluted |
35,057 | 42,480 | 35,311 | 42,030 | ||||||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.87 | $ | 0.42 | $ | 1.40 | $ | 0.80 | ||||||||
Diluted |
$ | 0.84 | $ | 0.40 | $ | 1.34 | $ | 0.76 | ||||||||
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.