UNITED STATES

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

October 24, 2013

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 Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)
1251 McKay Drive SAN JOSE, CALIFORNIA				95131
(Address of Principal Executive Offices)				(Zip Code)

(408) 904-1100

(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):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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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 24, 2013 and attached hereto as Exhibit 99.1.

The information in this Current Report on Form 8-K (including Exhibit 99.1) 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 24, 2013, entitled “Synaptics Reports First Quarter Fiscal 2014 Results”

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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 24, 2013				By:		/s/ Kathleen A. Bayless
						Kathleen A. Bayless
						Senior Vice President, Chief Financial Officer, Secretary, and Treasurer

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press release from Synaptics Incorporated, dated October 24, 2013, entitled “Synaptics Reports First Quarter Fiscal 2014 Results”

Exhibit 99.1

 

		For more information contact:   Jennifer Jarman The Blueshirt Group 415-217-5866 jennifer@blueshirtgroup.com

Synaptics Reports First Quarter Fiscal 2014 Results

Record September Quarter Revenue

 

•

Revenue growth of 75% over prior year

 

•

Operating profit up more than 3X over prior year

 

•

Significant Mobile and Tablet Design Wins

 

•

Entering Fingerprint ID market through proposed acquisition of Validity Sensors

San Jose, CA – October 24, 2013 – Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its first quarter ended September 30, 2013.

Net revenue of $222.6 million for the first quarter of fiscal 2014 was a record for a September quarter and increased 75% compared with $127.0 million for the comparable quarter last year. Net income for the first quarter of fiscal 2014 was $34.9 million, or $1.00 per diluted share, compared with net income of $6.1 million, or $0.18 per diluted share, for the comparable quarter last year.

Non-GAAP net income for the first quarter of fiscal 2014 was $45.9 million, or $1.31 per diluted share. Non-GAAP net income was $12.7 million, or $0.37 per diluted share, for the first quarter of fiscal 2013. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)

“In addition to posting substantial revenue growth during the fiscal first quarter, we made strong progress on a number of fronts,” stated Rick Bergman, President and CEO. “We saw a growing number of devices deploy our on-cell and in-cell display integrated solutions, continued to gain traction in the China mobile market, and broadened our customer base in large touchscreens through key new design wins in tablets and touch-enabled notebooks. Following a strong first quarter, the first half of the fiscal year is tracking according to plan, and we expect to post top-line growth in excess of 50% over the same period last year.”

“We recently announced Synaptics’ entry into the fast growing fingerprint ID market through a definitive agreement to acquire Validity. We believe this acquisition reinforces our market leadership in human interface technology while significantly expanding our market opportunity,” concluded Mr. Bergman.

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First Quarter 2014 Business Metrics

 

•

Revenue mix from mobile and PC products was approximately 73% and 27%, respectively.

 

•

Revenue from mobile products of $162.7 million was up 152% year-over-year and down 6% sequentially. Mobile products revenue includes all touchscreen and video display products.

 

•

Revenue from PC products totaled $59.9 million, a decrease of 4% year-over-year and an increase of 5% sequentially.

 

•

Gross margin was 49.1%, an increase of 140 basis points year-over-year.

Cash at September 30, 2013 was $331.6 million. Cash flow from operations for the first quarter was $28.9 million. The company used $50.0 million to repurchase 1.2 million shares of common stock.

Kathy Bayless, CFO, added, “The September quarter benefitted from greater strength in mobile revenue than anticipated based on the timing of customer channel fill ahead of the holiday season. Considering our backlog of approximately $117.0 million entering the typically front-end loaded December quarter, customer forecasts, and the resulting expected product mix, we anticipate revenue (exclusive of the impending closure of the acquisition of Validity) to be in the range of $192.0 million to $208.0 million for the second quarter, an increase of 34% to 45% on a year-over-year basis.”

Earnings Call Information

The Synaptics first quarter fiscal 2014 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, October 24, 2013, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 1-877-941-1427 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

As a leading developer of human interface solutions which enhance the user experience, Synaptics provides the broadest touch solutions portfolio in the industry. The ClearPad™ family supports touchscreen solutions for devices ranging from entry-level mobile phones to flagship premium smartphones, tablets, and notebook PCs. The TouchPad™ family, including ClickPad™ and ForcePad™, is integrated into the majority of today’s notebook PCs. Synaptics’ wide portfolio also includes ThinTouch™, supporting thin and light keyboard solutions, as well as key technologies for next generation touch-enabled video and display applications.

(NASDAQ: SYNA) www.synaptics.com

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Synaptics, ClearPad, TouchPad, ClickPad, ForcePad, ThinTouch, and the Synaptics logo are trademarks of Synaptics in the United States and/or other countries. All other marks are the property of their respective owners.

Use of Non-GAAP Financial Information

In evaluating its business, Synaptics considers and uses net income excluding share-based compensation and certain non-cash or non-recurring items as a supplemental measure of operating performance. Net income excluding share-based compensation and certain non-cash 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 certain non-cash 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 share-based compensation charges and certain non-cash or non-recurring items. Net income excluding share-based compensation and certain non-cash 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 company’s belief that it has made strong progress on a number of fronts, including the growing number of devices deployed with its on-cell and in-cell display integrated solutions, continuing to gain traction in the China mobile market, and broadening its customer base in large touchscreens through key new design wins in tablets and touch-enabled notebooks; the company’s expectation that it will post top-line growth in the first half of the fiscal year in excess of 50% over the same period last year; the company’s belief that its acquisition of Validity reinforces its market leadership in human interface technology while significantly expanding its market opportunity; the company’s anticipated revenue for its second quarter. 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 Synaptics serves, (d) the success of Synaptics’ customers’ products that utilize Synaptics’ product solutions, (e) the development and launch cycles of Synaptics’ customers’ products, (f) market pressures on selling prices, (g) changes in product mix, (h) the market acceptance of Synaptics’ 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, 2013. 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)

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SYNAPTICS INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

		September 30, 2013				June 30, 2013
Assets
Current assets:
Cash and cash equivalents		$	331,572			$	355,303
Accounts receivables, net of allowances of $883			153,939				148,454
Inventories			57,293				49,948
Prepaid expenses and other current assets			7,212				6,715
Total current assets			550,016				560,420
Property and equipment at cost, net			61,225				58,035
Goodwill			20,695				20,695
Purchased intangibles			12,848				13,110
Non-current auction rate securities			17,536				16,969
Other assets			21,648				22,037
Total assets		$	683,968			$	691,266
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	77,955			$	83,710
Accrued compensation			15,074				23,728
Income taxes payable			15,098				10,751
Other accrued liabilities			34,108				31,437
Total current liabilities			142,235				149,626
Notes payable			2,305				2,305
Other liabilities			17,944				17,480
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; 120,000,000 shares authorized; 51,094,508 and 50,673,758 shares issued, and 32,493,672 and 33,289,826 shares outstanding, respectively			51				51
Additional paid in capital			553,509				539,170
Less: 18,600,836 and 17,383,932 treasury shares, respectively, at cost			(510,157	)			(460,160	)
Accumulated other comprehensive income			7,150				6,802
Retained earnings			470,931				435,992
Total stockholders’ equity			521,484				521,855
Total liabilities and stockholders’ equity		$	683,968			$	691,266

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SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

		Three Months Ended September 30,
		2013				2012
Net revenue		$	222,607			$	127,041
Cost of revenue			113,328				66,471
Gross margin			109,279				60,570
Operating expenses
Research and development			40,442				32,802
Selling, general, and administrative			21,124				18,908
Acquired intangibles amortization			262				240
Change in contingent consideration			258				287
Total operating expenses			62,086				52,237
Operating income			47,193				8,333
Interest income			211				218
Non-cash interest income			219				—
Interest expense			(4	)			(4	)
Income before provision for income taxes			47,619				8,547
Provision for income taxes			12,680				2,494
Net income		$	34,939			$	6,053
Net income per share:
Basic		$	1.06			$	0.18
Diluted		$	1.00			$	0.18
Shares used in computing net income per share:
Basic			32,958				32,941
Diluted			35,020				34,014

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SYNAPTICS INCORPORATED

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)

 

		Three Months Ended September 30,
		2013				2012
GAAP gross margin		$	109,279			$	60,570
Share-based compensation			254				243
Non-GAAP gross margin		$	109,533			$	60,813
GAAP gross margin - percentage of revenue			49.1	%			47.7	%
Share-based compensation - percentage of revenue			0.1	%			0.1	%
Non-GAAP gross margin - percentage of revenue			49.2	%			47.8	%
GAAP research and development expense		$	40,442			$	32,802
Share-based compensation			(3,927	)			(3,911	)
Non-GAAP research and development expense		$	36,515			$	28,891
GAAP selling, general, and administrative expense		$	21,124			$	18,908
Acquisition related costs			(1,031	)			—
Share-based compensation			(2,861	)			(4,313	)
Non-GAAP selling, general, and administrative expense		$	17,232			$	14,595
GAAP operating income			47,193			$	8,333
Acquisition related costs			1,031				—
Acquired intangibles amortization			262				240
Change in contingent consideration			258				287
Share-based compensation			7,042				8,467
Non-GAAP operating income		$	55,786			$	17,327
GAAP net income		$	34,939			$	6,053
Non-cash interest income			(219	)			—
Acquisition related costs			1,031				—
Acquired intangibles amortization			262				240
Change in contingent consideration			258				287
Share-based compensation			7,042				8,467
Tax adjustments			2,601				(2,304	)
Non-GAAP net income		$	45,914			$	12,743
GAAP net income per share - diluted		$	1.00				0.18
Non-cash interest income			(0.01	)			—
Acquisition related costs			0.03				—
Acquired intangibles amortization			0.01				—
Change in contingent consideration			0.01				0.01
Share-based compensation			0.20				0.25
Tax adjustments			0.07				(0.07	)
Non-GAAP net income per share - diluted		$	1.31			$	0.37