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
October 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 October 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 October 22, 2009, entitled “Synaptics Reports Results for First Quarter of Fiscal 2010” |
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: October 22, 2009 | By: | /s/ Kathleen Bayless | ||
| Kathleen Bayless | ||||
| Chief Financial Officer, Secretary, and Treasurer | ||||
2
EXHIBIT INDEX
| Exhibit | ||
| Number | Description | |
99.1
|
Press release from Synaptics Incorporated, dated October 22, 2009, entitled “Synaptics Reports Results for First Quarter of Fiscal 2010” |
Exhibit 99.1
| For more information contact: | ||
|
Alex Wellins The Blueshirt Group 415-217-7722 alex@blueshirtgroup.com |
Synaptics Reports Results for First Quarter of Fiscal 2010
| • | Record first fiscal quarter net revenue of $119.6 million | ||
| • | PC revenue up 14% sequentially | ||
| • | Non-PC revenue increased 39% year-over-year | ||
| • | 1 million shares of common stock repurchased |
Santa Clara, CA – October 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 first fiscal quarter ended September 30, 2009.
Net revenue for the first quarter of fiscal 2010 was $119.6 million, an increase of approximately
4% over $115.3 million of net revenue for the fourth quarter of fiscal 2009 and an increase of
approximately 3% over $115.9 million of net revenue for the first quarter of fiscal 2009.
GAAP net income for the first quarter of fiscal 2010 was $9.8 million, or $0.27 per diluted share,
compared with net income of $12.4 million, or $0.34 per diluted share, for the fourth quarter of
fiscal 2009 and $12.7 million, or $0.36 per diluted share, for the first quarter of fiscal 2009.
Non-GAAP net income for the first quarter of fiscal 2010, which excludes non-cash charges for
interest expense, share-based compensation, an investment write down, and a one-time income tax
charge, was $17.2 million, or $0.48 per diluted share, compared with net income of $17.2 million,
or $0.47 per diluted share, for the fourth quarter of fiscal 2009 and net income of $17.9 million,
or $0.50 per diluted share, for the first quarter of fiscal 2009. (See attached table for a
reconciliation of GAAP to non-GAAP results.)
“We are reporting the highest September quarter net revenue in our company’s history. We continue
to be the clear leader for touchpads in the notebook sector, with the industry’s most comprehensive
and innovative product lineup. We saw a sharp year-over-year increase in our mobile touchscreen
business, where we are working with the top handset makers to broaden penetration of capacitive
touchscreen phones around the world. Synaptics won a number of important new designs during the
quarter, and design activity remains robust,” said Tom Tiernan, CEO.
PC revenue of $74.6 million represented 62% of total revenue for the quarter, reflecting 14%
sequential growth. This growth was driven by solid penetration of Synaptics’ technology in
netbooks and continued strong
uptake of Synaptics’ multi-finger, gesture-enabled TouchPadsTM. New
1
product offerings
including ClickPadTM, which eliminates traditional mechanical buttons and incorporates
this functionality into the touchpad, are also seeing strong adoption in the market.
Non-PC revenue of $45.0 million comprised 38% of total revenue for the quarter and grew 39%
year-over-year. Growth was driven by increased adoption of capacitive touchscreen solutions among
major mobile handset manufacturers. Synaptics continues to work with the leading handset OEMs
globally to fuel mass market adoption of capacitive touchscreens.
Cash and short-term investments increased to $197.6 million at September 30, 2009. During the
quarter, the Company generated $29.9 million of cash flow from operations and bought back one
million shares of its common stock at an aggregate cost of approximately $25.5 million under its
stock repurchase program.
Kathy Bayless, CFO, added, “Looking ahead to the December quarter and considering the dynamic
nature of our markets, customer forecasts, and backlog of $71 million exiting September, we
anticipate revenue between $128 million and $134 million. Our revenue outlook for fiscal 2010 of $495
million to $525 million has not changed and is based on current customer forecasts and new design
wins combined with visibility into our pipeline of new business opportunities.”
The Company’s GAAP results reflect the adoption of ASC 470-20, previously referred to as FSP APB
14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion.”
The adoption of this accounting standard, which must be applied on a retrospective basis, results
in a non-cash interest charge to the current and all prior periods presented. (See attached table
for the impact of the new accounting standard on previously reported fiscal 2009 results.)
Earnings Call Information
The Synaptics first quarter fiscal 2010 teleconference and webcast is scheduled to begin at 2:00
p.m., Pacific Time, on Thursday, October 22, 2009, during which the Company will provide
forward-looking information. To participate on the live call, analysts and investors should dial
877-941-8416 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
TouchPadTM,
2
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, TouchPadTM, 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, non-cash interest charges, and unusual or non-recurring items as a supplemental
measure of operating performance. Net income excluding share-based compensation, non cash interest
charges, 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, non-cash interest charges, 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, non-cash interest charges, and unusual or non-recurring
items. Net income excluding share-based compensation, non-cash interest charges, 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 for the second quarter of fiscal
2010 and Synaptics’ anticipated revenue for fiscal 2010. 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, (d) the success
of our customers’ products that utilize our product solutions, (e) the development and launch
cycles of our customers’ products, (f) market pressures on selling prices, (g) changes in
3
product
mix, (h) the market acceptance of our product solutions compared with competitors solutions, (i)
general economic conditions, including consumer confidence and demand, and (j) 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, 2009. 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)
4
SYNAPTICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| September 30, | June 30, | |||||||
| 2009 | 2009 * | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 180,040 | $ | 169,036 | ||||
Short term investments |
17,580 | 22,934 | ||||||
Total cash, cash equivalents, and short-term investments |
197,620 | 191,970 | ||||||
Receivables, net of allowances of $513 and $513, respectively |
91,062 | 84,739 | ||||||
Inventories |
15,678 | 14,950 | ||||||
Prepaid expenses and other current assets |
3,899 | 3,094 | ||||||
Total current assets |
308,259 | 294,753 | ||||||
Property and equipment, net |
25,429 | 25,431 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Non-current auction rate securities |
28,854 | 28,767 | ||||||
Other assets |
23,519 | 25,272 | ||||||
Total assets |
$ | 387,988 | $ | 376,150 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 48,409 | $ | 32,210 | ||||
Accrued compensation |
8,379 | 8,450 | ||||||
Income taxes payable |
9,788 | 9,128 | ||||||
Current deferred tax liability |
8,483 | 10,225 | ||||||
Other accrued liabilities |
12,110 | 11,813 | ||||||
Note payable |
64,465 | 63,234 | ||||||
Total current liabilities |
151,634 | 135,060 | ||||||
Other liabilities |
18,549 | 18,484 | ||||||
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; 44,056,636 and 43,779,011 shares issued, and 33,968,536 and 34,690,911 shares outstanding, respectively |
44 | 44 | ||||||
Additional paid in capital |
303,349 | 293,666 | ||||||
Less: 10,088,100 and 9,088,100 treasury shares,
respectively, at cost |
(262,858 | ) | (237,387 | ) | ||||
Retained earnings |
175,958 | 166,154 | ||||||
Accumulated other comprehensive income |
1,312 | 129 | ||||||
Total stockholders’ equity |
217,805 | 222,606 | ||||||
Total liabilities and stockholders’ equity |
$ | 387,988 | $ | 376,150 | ||||
| * | Adjusted for retrospective application of ASC 470-20 |
5
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 | ||||||||
| September 30, | ||||||||
| 2009 | 2008 * | |||||||
Net revenue |
$ | 119,592 | $ | 115,857 | ||||
Cost of revenue (1) |
71,270 | 69,264 | ||||||
Gross margin |
48,322 | 46,593 | ||||||
Operating expenses |
||||||||
Research and development (1) |
19,975 | 15,805 | ||||||
Selling, general, and administrative (1) |
13,764 | 14,570 | ||||||
Total operating expenses |
33,739 | 30,375 | ||||||
Operating income |
14,583 | 16,218 | ||||||
Interest income |
331 | 1,258 | ||||||
Interest expense |
(1,423 | ) | (2,541 | ) | ||||
Net loss on investments |
(443 | ) | — | |||||
Income before income taxes |
13,048 | 14,935 | ||||||
Provision for income taxes (2) |
3,244 | 2,224 | ||||||
Net income |
$ | 9,804 | $ | 12,711 | ||||
Net income per share: |
||||||||
Basic |
$ | 0.29 | $ | 0.38 | ||||
Diluted |
$ | 0.27 | $ | 0.36 | ||||
Shares used in computing net income
per share: |
||||||||
Basic |
34,341 | 33,640 | ||||||
Diluted |
35,968 | 35,459 | ||||||
|
| ||||||||
(1) Includes share-based compensation charges of: |
||||||||
Cost of revenue |
$ | 448 | $ | 411 | ||||
Research and development |
2,798 | 2,016 | ||||||
Selling, general, and administrative |
3,802 | 3,454 | ||||||
| $ | 7,048 | $ | 5,881 | |||||
(2) Includes tax benefit for share-based compensation charges of: |
||||||||
| $ | 2,201 | $ | 1,968 | |||||
Non-GAAP net income per share: |
||||||||
Basic |
$ | 0.50 | $ | 0.53 | ||||
Diluted |
$ | 0.48 | $ | 0.50 | ||||
| * | Adjusted for retrospective application of ASC 470-20 |
6
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 | ||||||||
| September 30, | ||||||||
| 2009 | 2008 * | |||||||
Numerator: |
||||||||
Basic and diluted net income |
$ | 9,804 | $ | 12,711 | ||||
Denominator: |
||||||||
Shares, basic |
34,341 | 33,640 | ||||||
Effect of dilutive share-based awards |
1,627 | 1,819 | ||||||
Shares, diluted |
35,968 | 35,459 | ||||||
Net income per share: |
||||||||
Basic |
$ | 0.29 | $ | 0.38 | ||||
Diluted |
$ | 0.27 | $ | 0.36 | ||||
Computation of non-GAAP basic and diluted net income per share (unaudited):
Numerator: |
||||||||
Reported net income |
$ | 9,804 | $ | 12,711 | ||||
Non-GAAP adjustments: |
||||||||
Net loss on investments |
443 | — | ||||||
Non cash interest expense, net of tax |
709 | 1,248 | ||||||
One-time tax charge |
1,445 | — | ||||||
Share-based compensation, net of tax |
4,847 | 3,913 | ||||||
Non-GAAP basic and diluted net income |
$ | 17,248 | $ | 17,872 | ||||
Non-GAAP net income per share: |
||||||||
Basic |
$ | 0.50 | $ | 0.53 | ||||
Diluted |
$ | 0.48 | $ | 0.50 | ||||
| * | Adjusted for retrospective application of ASC 470-20 |
7
SYNAPTICS INCORPORATED
Impact of Retrospective Application of ASC 470-20
(in thousands, except per share data)
(Unaudited)
Impact of Retrospective Application of ASC 470-20
(in thousands, except per share data)
(Unaudited)
Impact on Previously Reported Fiscal 2009 Condensed Consolidated Statements of Income
| Accounting | ||||||||||||
| Standard | ||||||||||||
| As Reported | Impact | As Revised | ||||||||||
For the quarter ended September 30, 2008: |
||||||||||||
Interest expense |
(449 | ) | (2,092 | ) | (2,541 | ) | ||||||
Provision for income taxes |
(3,068 | ) | 844 | (2,224 | ) | |||||||
Net Income |
13,959 | (1,248 | ) | 12,711 | ||||||||
Net income per share: |
||||||||||||
Basic |
0.41 | (0.03 | ) | 0.38 | ||||||||
Diluted |
0.39 | (0.03 | ) | 0.36 | ||||||||
For the quarter ended December 31, 2008: |
||||||||||||
Interest expense |
(321 | ) | (1,418 | ) | (1,739 | ) | ||||||
Gain/ (loss) on early retirement
of debt |
3,600 | (4,653 | ) | (1,053 | ) | |||||||
Provision for income taxes |
(4,699 | ) | 2,449 | (2,250 | ) | |||||||
Net Income |
21,197 | (3,622 | ) | 17,575 | ||||||||
Net income per share: |
||||||||||||
Basic |
0.63 | (0.11 | ) | 0.52 | ||||||||
Diluted |
0.60 | (0.10 | ) | 0.50 | ||||||||
For the quarter ended March 31, 2009: |
||||||||||||
Interest expense |
(234 | ) | (1,140 | ) | (1,374 | ) | ||||||
Provision for income taxes |
(1,959 | ) | 460 | (1,499 | ) | |||||||
Net Income |
6,086 | (680 | ) | 5,406 | ||||||||
Net income per share: |
||||||||||||
Basic |
0.18 | (0.02 | ) | 0.16 | ||||||||
Diluted |
0.17 | (0.02 | ) | 0.15 | ||||||||
For the quarter ended June 30, 2009: |
||||||||||||
Interest expense |
(234 | ) | (1,165 | ) | (1,399 | ) | ||||||
Provision for income taxes |
(1,760 | ) | 470 | (1,290 | ) | |||||||
Net Income |
13,082 | (695 | ) | 12,387 | ||||||||
Net income per share: |
||||||||||||
Basic |
0.38 | (0.02 | ) | 0.36 | ||||||||
Diluted |
0.36 | (0.02 | ) | 0.34 | ||||||||
For the year ended June 30, 2009: |
||||||||||||
Interest expense |
(1,238 | ) | (5,815 | ) | (7,053 | ) | ||||||
Gain/ (loss) on early retirement
of debt |
3,600 | (4,653 | ) | (1,053 | ) | |||||||
Provision for income taxes |
(11,486 | ) | 4,223 | (7,263 | ) | |||||||
Net Income |
54,324 | (6,245 | ) | 48,079 | ||||||||
Net income per share: |
||||||||||||
Basic |
1.60 | (0.19 | ) | 1.41 | ||||||||
Diluted |
1.53 | (0.18 | ) | 1.35 | ||||||||
|
Impact on Previously Reported Consolidated Balance Sheets
|
||||||||||||
| As Reported | Accounting | As Revised | ||||||||||
| June 30, | Standard | June 30, | ||||||||||
| 2009 | Impact | 2009 | ||||||||||
Other assets |
25,343 | (71 | ) | 25,272 | ||||||||
Total assets |
376,221 | (71 | ) | 376,150 | ||||||||
Current deferred tax liability |
9,419 | 806 | 10,225 | |||||||||
Note payable |
65,303 | (2,069 | ) | 63,234 | ||||||||
Total current liabilities |
136,323 | (1,263 | ) | 135,060 | ||||||||
Additional paid in capital |
270,962 | 22,704 | 293,666 | |||||||||
Retained earnings |
187,666 | (21,512 | ) | 166,154 | ||||||||
Total stockholders’ equity |
221,414 | 1,192 | 222,606 | |||||||||
Total liabilities and
stockholders’ equity |
376,221 | (71 | ) | 376,150 | ||||||||
8
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.