UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
January 20, 2005
SYNAPTICS INCORPORATED
| DELAWARE | 000-49602 | 77-0118518 | ||
| (State or Other | (Commission File Number) | (IRS Employer | ||
| Jurisdiction of Incorporation) | Identification No.) |
2381 BERING DRIVE
SAN JOSE, CALIFORNIA
95131
(408) 434-0110
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 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 20, 2005.
The information in this 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 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. |
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| (b) | Pro Forma Financial Information. Not applicable. |
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| (c) | Exhibits. | |||
| Exhibit Number |
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| 99.1 | Press release from Synaptics Incorporated, dated January 20, 2005, entitled “Synaptics Reports Record Second Quarter Results” |
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 20, 2005 | By: | /s/ Russell J. Knittel | ||
| Russell J. Knittel | ||||
| Senior Vice President, Chief Financial Officer, Chief Administrative Officer, and Secretary | ||||
EXHIBIT INDEX
| 99.1 | Press release from Synaptics Incorporated, dated January 20, 2005, entitled “Synaptics Reports Record Second Quarter Results” |
Exhibit 99.1
| For more information contact: | ||||
| Russ Knittel | Jennifer Jarman | |||
| Synaptics Incorporated | The Blueshirt Group | |||
| 408-434-0110x140 | 415-217-7722 | |||
| russk@synaptics.com | jennifer@blueshirtgroup.com | |||
Synaptics Reports Record Second Quarter Results
Revenue Grows 48% and Net Income More than Doubles from the Immediately
Preceding Quarter
San Jose, CA – January 20, 2005 – Synaptics (Nasdaq: SYNA), a leader in interface solutions for mobile computing, communications, and entertainment devices, today reported financial results for the second fiscal quarter ended December 31, 2004.
Net revenue for the second quarter of fiscal 2005 was $56.5 million, an increase of approximately 65% over the $34.3 million of net revenue for the second quarter of fiscal 2004. Net income for the second quarter of fiscal 2005 was $9.7 million, or $0.33 per diluted share. This represents an increase of approximately 178% compared with net income of $3.5 million, or $0.13 per diluted share, for the second quarter of fiscal 2004.
“We had a tremendous quarter and achieved our third consecutive quarter of record revenue and earnings,” stated Francis Lee, President and Chief Executive Officer of Synaptics. “Our results reflect robust demand for portable digital music players during the holiday season as revenue outside of the PC market grew sharply to 43% of total revenue compared with 33% in the immediately preceding quarter. Our performance in the notebook segment was also better than anticipated, as total PC revenue grew 26% sequentially, including contributions from our desktop and peripherals initiatives.”
Russ Knittel, Synaptics’ Chief Financial Officer, added, “We are entering the March quarter with a very strong backlog of approximately $35 million and, based on current indicators, are projecting revenue in the third fiscal quarter to be approximately flat compared to the December quarter. This projection is based on expected seasonal declines in the notebook sector, offset by continued robust demand for portable music players. We expect revenue in the June quarter to be up sequentially from March quarter levels based on our current visibility and typical consumer patterns. Fiscal 2005 is shaping up to be an outstanding year based on our record first half performance and current outlook for the second half of the year.”
Earnings Call Information
The Synaptics second quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 20, 2005, during which management may discuss forward-looking information. To participate on the live call, analysts and investors should dial 800-240-6709 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 http://www.synaptics.com/.
About Synaptics Incorporated
Synaptics is a leading developer of interface solutions for the mobile computing, communications, and entertainment industries. 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 more than 50% 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 San Jose, California. The company’s website is www.synaptics.com.
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’ revenue expectations and competitive position in the notebook computer market, portable music player market and new market initiatives. 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 in the PC and portable digital entertainment markets, (b) market demand for OEMs’ products using Synaptics’ solutions, (c) the failure of Synaptics’ products and OEMs’ products to deliver commercially acceptable performance, and (d) other risks as identified from time to time in Synaptics’ SEC reports, including the Quarterly Reports on Form 10-Q, current reports on Form 8-K, and the Annual Report on Form 10-K for the fiscal year ended June 30, 2004. 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 BALANCE SHEETS
(In thousands, except share data)
| December 31, | June 30, | |||||||
| 2004 | 2004 | |||||||
| (Unaudited) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 193,444 | $ | 59,489 | ||||
Short term investments |
36,460 | 36,810 | ||||||
Accounts receivable, net of allowances of $174 and $130 at December 31, 2004, and June 30, 2004, respectively |
34,629 | 21,875 | ||||||
Inventories |
10,934 | 6,525 | ||||||
Prepaid expenses and other current assets |
3,214 | 3,083 | ||||||
Total current assets |
278,681 | 127,782 | ||||||
Property and equipment, net |
2,129 | 1,829 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Other assets |
5,499 | 1,115 | ||||||
Total assets |
$ | 288,236 | $ | 132,653 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 11,352 | $ | 9,220 | ||||
Accrued compensation |
4,596 | 4,594 | ||||||
Accrued warranty |
451 | 704 | ||||||
Income taxes payable |
2,401 | 4,018 | ||||||
Other accrued liabilities |
4,541 | 2,594 | ||||||
Capital leases and equipment financing obligations |
— | 28 | ||||||
Total current liabilities |
23,341 | 21,158 | ||||||
Note payable to a related party |
1,500 | 1,500 | ||||||
Convertible senior subordinated notes |
125,000 | — | ||||||
Other liabilities |
866 | 855 | ||||||
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; 26,135,918 and 24,987,398 shares issued and outstanding, respectively |
26 | 25 | ||||||
Additional paid in capital |
102,348 | 88,334 | ||||||
Deferred stock compensation |
(447 | ) | (634 | ) | ||||
Retained earnings |
35,730 | 21,575 | ||||||
Accumulated other comprehensive loss |
(128 | ) | (160 | ) | ||||
Total stockholders’ equity |
137,529 | 109,140 | ||||||
Total liabilities and stockholders’ equity |
$ | 288,236 | $ | 132,653 | ||||
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
Net revenue |
$ | 56,543 | $ | 34,274 | $ | 94,634 | $ | 63,845 | ||||||||
Cost of revenue |
30,155 | 20,134 | 51,054 | 37,561 | ||||||||||||
Gross margin |
26,388 | 14,140 | 43,580 | 26,284 | ||||||||||||
Operating expenses
|
||||||||||||||||
Research and development
|
6,248 | 5,130 | 12,291 | 10,226 | ||||||||||||
Selling, general, and administrative |
4,388 | 3,293 | 8,154 | 6,367 | ||||||||||||
Amortization of deferred stock
compensation |
85 | 132 | 187 | 269 | ||||||||||||
Restructuring |
— | — | — | 432 | ||||||||||||
Total operating expenses |
10,721 | 8,555 | 20,632 | 17,294 | ||||||||||||
Operating income |
15,667 | 5,585 | 22,948 | 8,990 | ||||||||||||
Interest income |
397 | 229 | 665 | 455 | ||||||||||||
Interest expense |
(151 | ) | (34 | ) | (177 | ) | (68 | ) | ||||||||
Income before income taxes |
15,913 | 5,780 | 23,436 | 9,378 | ||||||||||||
Provision for income taxes |
6,189 | 2,279 | 9,281 | 3,610 | ||||||||||||
Net income |
$ | 9,724 | $ | 3,501 | $ | 14,155 | $ | 5,768 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.38 | $ | 0.15 | $ | 0.56 | $ | 0.24 | ||||||||
Diluted |
$ | 0.33 | $ | 0.13 | $ | 0.50 | $ | 0.22 | ||||||||
Shares used in computing net income
per share: |
||||||||||||||||
Basic |
25,816 | 24,113 | 25,457 | 24,064 | ||||||||||||
Diluted |
29,372 | 26,725 | 28,641 | 26,603 | ||||||||||||
Computation of basic and diluted net income per share:
(in thousands except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
Numerator for basic net income per share: |
||||||||||||||||
Net income |
$ | 9,724 | $ | 3,501 | $ | 14,155 | $ | 5,768 | ||||||||
Numerator for diluted net income per share: |
||||||||||||||||
Net income |
9,724 | 3,501 | 14,155 | 5,768 | ||||||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
69 | — | 69 | — | ||||||||||||
Numerator for diluted net income per share |
$ | 9,793 | $ | 3,501 | $ | 14,224 | $ | 5,768 | ||||||||
Denominator for basic net income per share: |
||||||||||||||||
Weighted average common shares outstanding |
25,816 | 24,113 | 25,457 | 24,064 | ||||||||||||
Denominator for diluted net income per share: |
||||||||||||||||
Shares used above, basic |
25,816 | 24,113 | 25,457 | 24,064 | ||||||||||||
Effect of dilutive stock options |
3,067 | 2,612 | 2,939 | 2,539 | ||||||||||||
Effect of convertible notes |
489 | — | 245 | — | ||||||||||||
Denominator for diluted net income per share |
29,372 | 26,725 | 28,641 | 26,603 | ||||||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.38 | $ | 0.15 | $ | 0.56 | $ | 0.24 | ||||||||
Diluted |
$ | 0.33 | $ | 0.13 | $ | 0.50 | $ | 0.22 | ||||||||
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.