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 21, 2010
Date of Report (Date of earliest event reported)
SYNAPTICS INCORPORATED
| DELAWARE | 000-49602 | 77-0118518 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer 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 21,
2010.
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 21, 2010, entitled “Synaptics Reports Results for Second 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: January 21, 2010 | By: | /s/ Kathleen A. Bayless | ||
| Kathleen A. Bayless | ||||
| Chief Financial Officer, Secretary, and Treasurer | ||||
2
EXHIBIT INDEX
| Exhibit | ||
| Number | Description | |
99.1
|
Press release from Synaptics Incorporated, dated January 21, 2010, entitled “Synaptics Reports Results for Second Quarter of Fiscal 2010” |
Exhibit 99.1
| For more information contact: | ||
 |
Alex Wellins | |
| The Blueshirt Group | ||
| 415-217-5861 | ||
| alex@blueshirtgroup.com |
Synaptics Reports Results for Second Quarter of Fiscal 2010
| • | Net revenue of $133.3 million, up 11% sequentially | ||
| • | Non-PC revenue grew 33% sequentially | ||
| • | Continued innovation with ScrybeTM and FuseTM introductions | ||
| • | Retired $63 million of debt; repurchased 783,000 shares of stock |
Santa Clara, CA — January 21, 2010 — Synaptics (Nasdaq: SYNA), a leading developer of human
interface solutions for mobile computing, communications, and entertainment devices, today reported
financial results for the second fiscal quarter ended December 31, 2009.
Net revenue for the second quarter of fiscal 2010 was $133.3 million, an increase of approximately
11% over net revenue of $119.6 million for the previous quarter and a decrease of approximately 6%
from net revenue of $141.5 million for the second quarter of fiscal 2009.
GAAP net income for the second quarter of fiscal 2010 was $12.2 million, or $0.35 per diluted
share, compared with net income of $9.8 million, or $0.27 per diluted share, for the previous
quarter and $17.6 million, or $0.50 per diluted share, for the second quarter of fiscal 2009.
Non-GAAP net income for the second quarter of fiscal 2010, which excludes non-cash charges for
interest expense and share-based compensation, was $21.7 million, or $0.62 per diluted share,
compared with net income of $17.2 million, or $0.48 per diluted share, for the previous quarter and
net income of $29.5 million, or $0.84 per diluted share, for the second quarter of fiscal 2009.
(See attached table for a reconciliation of GAAP to non-GAAP results.)
“Robust demand for Synaptics’ touch solutions drove solid results for the December quarter,” stated
Tom Tiernan, CEO. “Synaptics continues its leadership in innovation, and our design activity
remains strong. At the recent CES show, we experienced strong interest in our new Scrybe gesture
workflow solution and the Fuse concept phone, demonstrating new usage models made possible with our
technology. As a market leader in capacitive touch solutions, Synaptics is well positioned to
capitalize on expanding market opportunities by delivering advanced designs that generate
compelling value to leading OEMs and their customers.”
PC revenue of $73.6 million represented 55% of total revenue for the quarter. Synaptics continued
to drive increasing penetration of its multi-finger gesture enabled TouchPadsTM and
innovative product offerings, such as ClickPadTM.
Non-PC revenue of $59.7 million comprised 45% of total revenue for the quarter and grew 33%
sequentially. Non-PC revenue growth was driven by
increasing adoption of Synaptics’ capacitive
touchscreen solutions by major mobile handset manufacturers and strong demand for personal
entertainment devices.
Cash and short-term investments at December 31, 2009 totaled $140.0 million. Cash flow from
operations for the quarter was $25.7 million. The Company used $63.0 million to retire all but $2.3
million of its 0.75% convertible notes and used $19.1 million to buy back approximately 783,000
shares of its common stock under its stock repurchase program.
Kathy Bayless, CFO, added, “Considering backlog of approximately $58 million entering the quarter,
expected product mix, customer order patterns, and customer forecasts, we anticipate revenue in the
March quarter to be between $110 million and $115 million, an increase of 9% to 14% over the
comparable quarter last year. Taking into account first half results, design wins, customer
forecasts, and visibility into our pipeline of new business opportunities, we anticipate fiscal
2010 revenue to be in the range of $495 million to $505 million.”
In the December quarter, the Company identified a calculation error in the third-party equity
accounting software commonly used in industry, resulting in an understatement of previously
reported non-cash share-based compensation. The cumulative error to GAAP net income since the
adoption in fiscal 2006 of FAS123R was $3.1 million and was determined to be immaterial to
previously reported financial results. In accordance with current accounting guidance, the
December quarter GAAP results reflect the cumulative impact of correcting the calculation error.
The correction did not impact non-GAAP results.
Earnings Call Information
The Synaptics second quarter fiscal 2010 teleconference and webcast is scheduled to begin at 2:00
p.m., Pacific Time, on Thursday, January 21, 2010, during which the Company will provide
forward-looking information. To participate on the live call, analysts and investors should dial
877-941-2068 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, 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, Scrybe, Fuse, TouchPad, ClickPad, 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 the rapid expansion of interest in the Company’s leadership in
innovation and its strong design activity, the potential for success of the Company’s Scrybe
gesture solution and Fuse concept phone, the Company’s positioning to capitalize on current and
future market opportunities by delivering advanced designs that generate compelling value to
leading OEMs and their customers, the Company’s penetration of its multi-finger gesture enabled
touchpads in consumer laptops as well as the adoption of new product offerings, Synaptics’
anticipated revenue for the March 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 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’ reports filed with the Securities and Exchange Commission, 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)
SYNAPTICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| December 31, | June 30, | |||||||
| 2009 | 2009 * | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 140,033 | $ | 169,036 | ||||
Short term investments |
— | 22,934 | ||||||
Total cash, cash equivalents, and short-term investments |
140,033 | 191,970 | ||||||
Receivables, net of allowances of $513 and $513, respectively |
100,302 | 84,739 | ||||||
Inventories |
15,837 | 14,950 | ||||||
Prepaid expenses and other current assets |
4,171 | 3,094 | ||||||
Total current assets |
260,343 | 294,753 | ||||||
Property and equipment, net |
25,425 | 25,431 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Non-current auction rate securities |
28,952 | 28,767 | ||||||
Other assets |
18,110 | 25,272 | ||||||
Total assets |
$ | 334,757 | $ | 376,150 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 52,909 | $ | 32,210 | ||||
Accrued compensation |
8,069 | 8,450 | ||||||
Income taxes payable |
12,806 | 9,128 | ||||||
Current deferred tax liability |
— | 10,225 | ||||||
Other accrued liabilities |
15,464 | 11,813 | ||||||
Note payable |
— | 63,234 | ||||||
Total current liabilities |
89,248 | 135,060 | ||||||
Convertible senior subordinated notes |
2,305 | — | ||||||
Other liabilities |
19,238 | 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; 44,166,949 and
43,779,011 shares issued, and 33,295,636 and 34,690,911
shares outstanding, respectively |
44 | 44 | ||||||
Additional paid in capital |
315,954 | 293,666 | ||||||
Less: 10,871,313 and 9,088,100 treasury shares,
respectively, at cost |
(281,932 | ) | (237,387 | ) | ||||
Retained earnings |
188,185 | 166,154 | ||||||
Accumulated other comprehensive income |
1,715 | 129 | ||||||
Total stockholders’ equity |
223,966 | 222,606 | ||||||
Total liabilities and stockholders’ equity |
$ | 334,757 | $ | 376,150 | ||||
| * | Adjusted for retrospective application of ASC 470-20. Refer to our earnings release dated October 23, 2009 for the impact of the retrospective application of ASC 470-20. |
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, | |||||||||||||||
| 2009 | 2008 * | 2009 | 2008 * | |||||||||||||
Net revenue |
$ | 133,323 | $ | 141,523 | $ | 252,915 | $ | 257,380 | ||||||||
Cost of revenue (1) |
79,492 | 83,717 | 150,762 | 152,981 | ||||||||||||
Gross margin |
53,831 | 57,806 | 102,153 | 104,399 | ||||||||||||
Operating expenses |
||||||||||||||||
Research and development (1) |
22,442 | 15,940 | 42,417 | 31,745 | ||||||||||||
Selling, general, and administrative (1) |
16,575 | 13,714 | 30,339 | 28,284 | ||||||||||||
Total operating expenses |
39,017 | 29,654 | 72,756 | 60,029 | ||||||||||||
Operating income |
14,814 | 28,152 | 29,397 | 44,370 | ||||||||||||
Interest income |
241 | 974 | 572 | 2,232 | ||||||||||||
Interest expense |
(968 | ) | (1,739 | ) | (2,391 | ) | (4,280 | ) | ||||||||
Loss on early retirement of debt |
— | (1,053 | ) | — | (1,053 | ) | ||||||||||
Net loss on investments |
— | (6,509 | ) | (443 | ) | (6,509 | ) | |||||||||
Income before income taxes |
14,087 | 19,825 | 27,135 | 34,760 | ||||||||||||
Provision for income taxes (2) |
1,860 | 2,250 | 5,104 | 4,474 | ||||||||||||
Net income |
$ | 12,227 | $ | 17,575 | $ | 22,031 | $ | 30,286 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.36 | $ | 0.52 | $ | 0.65 | $ | 0.90 | ||||||||
Diluted |
$ | 0.35 | $ | 0.50 | $ | 0.62 | $ | 0.86 | ||||||||
Shares used in computing net income per share: |
||||||||||||||||
Basic |
33,611 | 33,833 | 33,976 | 33,736 | ||||||||||||
Diluted |
34,936 | 35,057 | 35,477 | 35,311 | ||||||||||||
(1) Includes share-based compensation charges of: |
||||||||||||||||
Cost of revenue |
$ | 815 | $ | 402 | $ | 1,263 | $ | 813 | ||||||||
Research and development |
4,646 | 1,962 | 7,444 | 3,978 | ||||||||||||
Selling, general, and administrative |
6,635 | 3,292 | 10,437 | 6,746 | ||||||||||||
| $ | 12,096 | $ | 5,656 | $ | 19,144 | $ | 11,537 | |||||||||
(2) Includes tax benefit for share-based compensation charges of: |
||||||||||||||||
| $ | 3,106 | $ | 1,769 | $ | 5,307 | $ | 3,737 | |||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.65 | $ | 0.87 | $ | 1.15 | $ | 1.40 | ||||||||
Diluted |
$ | 0.62 | $ | 0.84 | $ | 1.10 | $ | 1.34 | ||||||||
| * | Adjusted for retrospective application of ASC 470-20. Refer to our earnings release dated October 23, 2009 for the impact of the retrospective application of ASC 470-20. |
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, | |||||||||||||||
| 2009 | 2008 * | 2009 | 2008 * | |||||||||||||
Numerator: |
||||||||||||||||
Basic and diluted net income |
$ | 12,227 | $ | 17,575 | $ | 22,031 | $ | 30,286 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
33,611 | 33,833 | 33,976 | 33,736 | ||||||||||||
Effect of dilutive share-based awards |
1,325 | 1,224 | 1,501 | 1,575 | ||||||||||||
Shares, diluted |
34,936 | 35,057 | 35,477 | 35,311 | ||||||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.36 | $ | 0.52 | $ | 0.65 | $ | 0.90 | ||||||||
Diluted |
$ | 0.35 | $ | 0.50 | $ | 0.62 | $ | 0.86 | ||||||||
Computation of non-GAAP basic and diluted net income per share (unaudited):
Numerator: |
||||||||||||||||
Reported net income |
$ | 12,227 | $ | 17,575 | $ | 22,031 | $ | 30,286 | ||||||||
Non-GAAP adjustments (net of tax): |
||||||||||||||||
Loss on early retirement of debt |
— | 643 | — | 643 | ||||||||||||
Net loss on investments |
— | 6,509 | 443 | 6,509 | ||||||||||||
Non cash interest expense |
483 | 846 | 1,192 | 2,094 | ||||||||||||
One-time tax charge |
— | — | 1,445 | — | ||||||||||||
Share-based compensation |
8,990 | 3,887 | 13,837 | 7,800 | ||||||||||||
Non-GAAP basic and diluted net income |
$ | 21,700 | $ | 29,460 | $ | 38,948 | $ | 47,332 | ||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.65 | $ | 0.87 | $ | 1.15 | $ | 1.40 | ||||||||
Diluted |
$ | 0.62 | $ | 0.84 | $ | 1.10 | $ | 1.34 | ||||||||
| * | Adjusted for retrospective application of ASC 470-20. Refer to our earnings release dated October 23, 2009 for the impact of the retrospective application of ASC 470-20. |
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.