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

Date of Report (Date of earliest event reported) January 23, 2014

 

 

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))

 

 

 

---

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 23, 2014 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 on Form 8-K 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		Exhibit
99.1		Press release from Synaptics Incorporated, dated January 23, 2014, entitled “Synaptics Reports Second Quarter Fiscal 2014 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 23, 2014				By:		/s/ Kathleen A. Bayless
						Kathleen A. Bayless
						Senior Vice President, Chief Financial Officer, Secretary, and Treasurer

---

EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press release from Synaptics Incorporated, dated January 23, 2014, entitled “Synaptics Reports Second Quarter Fiscal 2014 Results”

Exhibit 99.1

 

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

Synaptics Reports Second Quarter Fiscal 2014 Results

Revenue up 44% and GAAP EPS up 45% Year-over-Year;

Financial Results Reflect Partial Quarter Impact on Operations from new Fingerprint ID Business

San Jose, CA – January 23, 2014 – Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its second quarter ended December 31, 2013.

Net revenue for the second quarter of fiscal 2014 was $205.8 million, an increase of 44% compared with $143.0 million for the comparable quarter last year. Net income for the second quarter of fiscal 2014 was $17.3 million, compared with net income of $11.1 million for the comparable quarter last year. Diluted earnings per share for the second quarter of fiscal 2014 was $0.48, an increase of 45% compared with $0.33 for the comparable quarter last year.

Non-GAAP net income for the second quarter of fiscal 2014 was $31.1 million, compared with non-GAAP net income of $17.7 million for the comparable quarter last year. Diluted earnings per share for the second quarter of fiscal 2014 was $0.86, an increase of 62% compared with $0.53 for the second quarter of fiscal 2013. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)

“Excluding the impact of the acquisition of Validity, which closed in early November, our financial performance for the December quarter was above the mid-point of our guidance as we experienced strong year-over-year revenue growth in touchscreen and touchpad products,” stated Rick Bergman, President and CEO. “As we enter the second half of fiscal 2014, we expect to benefit from continued strong organic growth, further augmented by growing contributions from our acquisitions and new product innovations. In addition, we are very excited with the progress of our new Fingerprint ID business and expect the acquisition to be accretive by the end of the fiscal year, earlier than previously anticipated.”

Second Quarter 2014 Business Metrics

 

•

Revenue mix from mobile and PC products was approximately 65% and 35%, respectively. Fingerprint ID products have been classified according to type of device.

 

•

Revenue from mobile products of $133.6 million was up 64% year-over-year. Mobile products revenue includes all touchscreen, video display, and applicable fingerprint ID products.

---

 

•

Revenue from PC products totaled $72.2 million, an increase of 17% year-over-year.

 

•

GAAP earnings per share reflects the impact of additional operating expenses, including acquisition related costs and shares issued in connection with the company’s recent acquisition of Validity Sensors, Inc., which closed on November 7, 2013.

Cash at December 31, 2013 was $369.4 million. In the first half of fiscal 2014, cash flow from operations was $85.8 million, and the company used $70.3 million to repurchase of approximately 1.7 million shares of common stock.

Kathy Bayless, CFO, added, "Considering our backlog, customer forecasts, and the resulting expected product mix, we anticipate revenue to be in the range of $180 million to $200 million for the March quarter. The March quarter outlook reflects seasonality, with incremental revenue from our new Fingerprint ID products.”

Earnings Call Information

The Synaptics second quarter fiscal 2014 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 23, 2014, during which the company will provide forward-looking information. Analysts and investors should dial 1-877-941-1427 at least ten minutes prior to the call to participate. Synaptics will also offer a live and archived webcast of the conference call, accessible from the "Investor Relations" section of the company’s website at www.synaptics.com.

About Synaptics Incorporated

As a leading developer of human interface solutions which enhance the user experience, Synaptics provides the broadest 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. LiveFlex^® fingerprint sensor technology enables authentication, mobile payments, and touch-based navigation for smartphones, tablets, and notebook computers. 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.

---

 

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 that involve risks and uncertainties. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify these statements by the fact that they do not relate strictly to historical or current facts and may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning. All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements which reflect estimates and assumptions made by our management, all of which are difficult to predict and many of which are beyond our control, including statements related to our target business model, future performance, and revenue growth. Although we believe our estimates and assumptions to be reasonable, they are subject to a number of risks and uncertainties beyond our control and may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this press release are not guarantees of future performance, and actual results may differ materially from those anticipated or implied in the forward-looking statements due to various factors, including those factors identified from time to time in our Form 10-K for the fiscal year ended June 30, 2013, and our other current and periodic reports filed with the SEC. All forward-looking statements speak only as of the date of this press release. We do not intend to publicly update or revise any forward-looking statements as a result of new information or future events or otherwise, except as required by law. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

(Tables to Follow)

---

SYNAPTICS INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

		December 31,				June 30,
		2013				2013
Assets
Current assets:
Cash and cash equivalents		$	369,424			$	355,303
Accounts receivables, net of allowances of $883			133,022				148,454
Inventories			51,746				49,948
Prepaid expenses and other current assets			18,885				6,715
Total current assets			573,077				560,420
Property and equipment at cost, net			64,666				58,035
Goodwill			59,670				20,695
Purchased intangibles			87,391				13,110
Non-current auction rate securities			18,260				16,969
Other assets			19,632				22,037
Total assets		$	822,696			$	691,266
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	68,578			$	83,710
Accrued compensation			22,833				23,728
Income taxes payable			9,057				10,751
Notes payable			2,305				—
Current portion of contingent consideration			13,099				—
Other accrued liabilities			34,565				31,437
Total current liabilities			150,437				149,626
Notes payable			—				2,305
Other liabilities			47,260				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; 54,019,279 and 50,673,758 shares issued, and 34,971,568 and 33,289,826 shares outstanding, respectively			54				51
Additional paid in capital			659,482				539,170
Less: 19,047,711 and 17,383,932 treasury shares, respectively, at cost			(530,422	)			(460,160	)
Accumulated other comprehensive income			7,620				6,802
Retained earnings			488,265				435,992
Total stockholders’ equity			624,999				521,855
Total liabilities and stockholders’ equity		$	822,696			$	691,266

---

SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

		Three Months Ended								Six Months Ended
		December 31,								December 31,
		2013				2012				2013				2012
Net revenue		$	205,763			$	143,040			$	428,370			$	270,081
Acquisition related costs			2,170				—				2,170				—
Cost of revenue			109,048				74,010				222,376				140,481
Gross margin			94,545				69,030				203,824				129,600
Operating expenses
Research and development			45,931				34,257				86,373				67,059
Selling, general, and administrative			21,807				19,008				41,900				37,916
Acquisition related costs			4,729				837				6,280				1,364
Total operating expenses			72,467				54,102				134,553				106,339
Operating income			22,078				14,928				69,271				23,261
Interest income			222				225				433				443
Non-cash interest income			254				—				473				—
Interest expense			(5	)			(5	)			(9	)			(9	)
Income before provision for income taxes			22,549				15,148				70,168				23,695
Provision for income taxes			5,215				4,034				17,895				6,528
Net income		$	17,334			$	11,114			$	52,273			$	17,167
Net income per share:
Basic		$	0.51			$	0.34			$	1.56			$	0.52
Diluted		$	0.48			$	0.33			$	1.47			$	0.51
Shares used in computing net income per share:
Basic			33,990				32,478				33,475				32,710
Diluted			36,059				33,313				35,586				33,739

---

SYNAPTICS INCORPORATED

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)

 

		Three Months Ended December 31,								Six Months Ended December 31,
		2013				2012				2013				2012
GAAP gross margin		$	94,545			$	69,030			$	203,824			$	129,600
Acquisition related costs			2,170				—				2,170				—
Share-based compensation			262				198				516				441
Non-GAAP gross margin		$	96,977			$	69,228			$	206,510			$	130,041
GAAP gross margin—percentage of revenue			45.9	%			48.3	%			47.6	%			48.0	%
Share-based compensation—percentage of revenue			1.2	%			0.1	%			0.6	%			0.1	%
Non-GAAP gross margin—percentage of revenue			47.1	%			48.4	%			48.2	%			48.1	%
GAAP research and development expense		$	45,931			$	34,257			$	86,373			$	67,059
Share-based compensation			(4,241	)			(3,879	)			(8,168	)			(7,790	)
Non-GAAP research and development expense		$	41,690			$	30,378			$	78,205			$	59,269
GAAP selling, general, and administrative expense		$	21,807			$	19,008			$	41,900			$	37,916
Share-based compensation			(3,119	)			(3,929	)			(5,980	)			(8,242	)
Non-GAAP selling, general, and administrative expense		$	18,688			$	15,079			$	35,920			$	29,674
GAAP operating income		$	22,078			$	14,928			$	69,271			$	23,261
Acquisition related costs			6,899				837				8,450				1,364
Share-based compensation			7,622				8,006				14,664				16,473
Non-GAAP operating income		$	36,599			$	23,771			$	92,385			$	41,098
GAAP net income		$	17,334			$	11,114			$	52,273			$	17,167
Acquisition related costs			6,899				837				8,450				1,364
Share-based compensation			7,622				8,006				14,664				16,473
Non-cash interest income			(254	)			—				(473	)			—
Tax adjustments			(484	)			(2,273	)			2,117				(4,577	)
Non-GAAP net income		$	31,117			$	17,684			$	77,031			$	30,427
GAAP net income per share—diluted		$	0.48				0.33			$	1.47			$	0.51
Acquisition related costs			0.19				0.03				0.23				0.04
Share-based compensation			0.21				0.24				0.41				0.49
Non-cash interest income			(0.01	)			—				(0.01	)			—
Tax adjustments			(0.01	)			(0.07	)			0.06				(0.14	)
Non-GAAP net income per share—diluted		$	0.86			$	0.53			$	2.16			$	0.90