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

January 29, 2015

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 a press release released on January 29, 2015 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 “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any registration document or other document filed by the registrant.

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 29, 2015, entitled “Synaptics Reports Results for Second Quarter Fiscal 2015”

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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: January 29, 2015				By:		/s/ Kathleen A. Bayless
						Kathleen A. Bayless
						Senior Vice President, Chief Financial Officer, and Treasurer

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press release from Synaptics Incorporated, dated January 29, 2015, entitled “Synaptics Reports Results for Second Quarter Fiscal 2015”

Exhibit 99.1

 

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

Synaptics Reports Results for Second Quarter Fiscal 2015

 

•

Record December quarter revenue of $464 million up more than double year-over-year

 

•

Second consecutive calendar year of over 50% revenue growth

San Jose, CA – January 29, 2015 – Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its second quarter ended December 27, 2014. Results for the period reflect the first quarter of consolidated results from the acquisition of Renesas SP Drivers, Inc. (RSP), completed on October 1, 2014.

Net revenue for the second quarter of fiscal 2015 grew 125% over the comparable quarter last year to $463.7 million. Net income for the second quarter of fiscal 2015 was $20.0 million, or $0.52 per diluted share. Non-GAAP net income for the second quarter of fiscal 2015 was $55.8 million, or $1.46 per diluted share. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)

“Synaptics achieved record top-line results for the second quarter, which included strong contributions from our new display drivers business,” stated Rick Bergman, President and CEO. “We continue to execute across our strategic growth initiatives, with our new area touch fingerprint sensor and the market’s first touch and display driver integrated (TDDI) solution now in mass production. We are very optimistic regarding our outlook for the second half of fiscal 2015 and are tracking well towards our combined operating model following the integration of RSP.”

Second Quarter 2015 Business Metrics

 

•

Revenue mix from mobile and PC products was approximately 86% and 14%, respectively. Fingerprint ID products have been classified according to type of device.

 

•

Revenue from mobile products was up 198% year-over-year to $398.3 million. Mobile products revenue includes all touchscreen, display driver, and applicable fingerprint ID products.

 

•

Revenue from PC products totaled $65.4 million, a decrease of 9% year-over-year, and includes applicable fingerprint ID products.

Cash at December 31, 2014 was $327.5 million, a decrease of $122 million from the prior quarter. The decrease in cash was due to the purchase of RSP early in the quarter. In the second quarter of fiscal 2015, cash flow from operations was a negative $16.5 million as a result of the purchase of RSP inventory totaling $115 million from Renesas post-acquisition. Year-to-date, the company has used $91 million to repurchase approximately 1.3 million shares of its common stock, or roughly 3.5% of the total shares outstanding.

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Kathy Bayless, CFO, added, “Considering our backlog of $245 million entering the March quarter, customer forecasts and the resulting expected product mix, we anticipate revenue to be in the range of $450 to $490 million, an increase of 120% to 140% over the prior year period. We expect the revenue mix from mobile and PC to be similar to the preceding quarter.”

Earnings Call Information

The Synaptics second quarter fiscal 2015 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 29, 2015, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 1-888-337-8198 (conference ID: 6552336) 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 the pioneer and leader of the human interface revolution, bringing innovative and intuitive user experiences to intelligent devices. Synaptics’ broad portfolio of touch, display, and biometrics products is built on the company’s rich R&D and supply chain capabilities. With solutions designed for mobile, PC and automotive industries, Synaptics combines ease of use, functionality and aesthetics to enable products that help make our digital lives more productive, secure and enjoyable. (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, change in contingent consideration, and certain non-cash or non-recurring items as a supplemental measure of operating performance. Net income excluding share-based compensation, change in contingent consideration, 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, change in contingent consideration, 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, change in contingent consideration, and certain non-cash or non-recurring items. Net income excluding share-based compensation, change in contingent consideration liability, 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.

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Forward-Looking Statements

This press release 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 the fiscal year ended June 28, 2014 and our Quarterly Report on Form 10-Q for the quarter ended September 27, 2014, 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.

(Tables to Follow)

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SYNAPTICS INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

		December 31,				June 30,
		2014				2014
Assets
Current assets:
Cash and cash equivalents		$	327,546			$	447,205
Accounts receivables, net of allowances of $1,165 and $883, respectively			335,023				195,057
Inventories			145,215				82,311
Prepaid expenses and other current assets			35,196				17,858
Total current assets			842,980				742,431
Property and equipment at cost, net			115,145				80,849
Goodwill			214,443				61,030
Purchased intangibles, net			283,349				82,111
Non-current other assets			52,058				53,912
Total assets		$	1,507,975			$	1,020,333
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	149,535			$	97,109
Accrued compensation			33,474				30,682
Income taxes payable			11,830				12,538
Acquisition related liabilities			97,549				57,388
Other accrued liabilities			94,433				56,691
Current portion of long-term debt			7,500				—
Total current liabilities			394,321				254,408
Long-term debt			242,500				—
Non-current portion acquisition related liabilities			85,626				52,734
Deferred tax liability			57,342				—
Other liabilities			13,609				12,034
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; 56,997,204 and 55,911,513 shares issued, and 36,662,018 and 36,863,802 shares outstanding, respectively			57				56
Additional paid in capital			798,203				740,282
Less: 20,335,186 and 19,047,711 treasury shares, respectively, at cost			(621,027	)			(530,422	)
Accumulated other comprehensive income			8,105				8,560
Retained earnings			529,239				482,681
Total stockholders’ equity			714,577				701,157
Total liabilities and stockholders’ equity		$	1,507,975			$	1,020,333

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SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

		Three Months Ended								Six Months Ended
		December 31,								December 31,
		2014				2013				2014				2013
Net revenue		$	463,705			$	205,763			$	746,446			$	428,370
Acquisition and integration related costs (1)			39,492				2,170				43,562				2,170
Cost of revenue			297,382				109,048				455,864				222,376
Gross margin			126,831				94,545				247,020				203,824
Operating expenses
Research and development			77,223				45,931				134,748				86,373
Selling, general, and administrative			37,427				21,807				68,067				41,900
Acquisition related costs (2)			(894	)			4,729				(5,101	)			6,280
Foreign currency adjustment (3)			(15,395	)			—				(15,395	)			—
Total operating expenses			98,361				72,467				182,319				134,553
Operating income			28,470				22,078				64,701				69,271
Interest and other income, net			497				476				1,121				906
Interest expense			(1,212	)			(5	)			(1,212	)			(9	)
Income before provision for income taxes			27,755				22,549				64,610				70,168
Provision for income taxes			7,783				5,215				18,052				17,895
Net income		$	19,972			$	17,334			$	46,558			$	52,273
Net income per share:
Basic		$	0.55			$	0.51			$	1.26			$	1.56
Diluted		$	0.52			$	0.48			$	1.20			$	1.47
Shares used in computing net income per share:
Basic			36,500				33,990				36,895				33,475
Diluted			38,248				36,059				38,882				35,586

 

(1)	These acquisition and integration related costs consist primarily of amortization associated with certain acquired intangible assets and integration costs associated with acquisitions.

(2)	These acquisition related costs consist primarily of changes in contingent consideration and amortization associated with certain acquired intangible assets.

(3)	These foreign currency adjustments include currency remeasurement adjustments related to our acquisition of RSP.

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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								Six Months Ended
		December 31,								December 31,
		2014				2013				2014				2013
GAAP gross margin		$	126,831			$	94,545			$	247,020			$	203,824
Acquisition and integration related costs			39,492				2,170				43,562				2,170
Share-based compensation			336				262				638				516
Non-GAAP gross margin		$	166,659			$	96,977			$	291,220			$	206,510
GAAP gross margin - percentage of revenue			27.4	%			45.9	%			33.1	%			47.6	%
Acquisition and integration related costs - percentage of revenue			8.5	%			1.1	%			5.8	%			0.5	%
Share-based compensation - percentage of revenue			0.1	%			0.1	%			0.1	%			0.1	%
Non-GAAP gross margin - percentage of revenue			35.9	%			47.1	%			39.0	%			48.2	%
GAAP research and development expense		$	77,223			$	45,931			$	134,748			$	86,373
Acquisition and integration related costs			(1,399	)			—				(1,731	)			—
Share-based compensation			(5,951	)			(4,241	)			(11,351	)			(8,168	)
Non-GAAP research and development expense		$	69,873			$	41,690			$	121,666			$	78,205
GAAP selling, general, and administrative expense		$	37,427			$	21,807			$	68,067			$	41,900
Acquisition and integration related costs			(4,418	)			—				(7,447	)			—
Share-based compensation			(4,441	)			(3,119	)			(8,234	)			(5,980	)
Non-GAAP selling, general, and administrative expense		$	28,568			$	18,688			$	52,386			$	35,920
GAAP operating income		$	28,470			$	22,078			$	64,701			$	69,271
Acquisition and integration related costs			44,415				6,899				47,639				8,450
Share-based compensation			10,728				7,622				20,223				14,664
Foreign currency adjustment			(15,395	)			—				(15,395	)			—
Non-GAAP operating income		$	68,218			$	36,599			$	117,168			$	92,385
GAAP net income		$	19,972			$	17,334			$	46,558			$	52,273
Acquisition and integration related costs			44,415				6,899				47,639				8,450
Recovery of investment impairment			(179	)			—				(179	)			—
Share-based compensation			10,728				7,622				20,223				14,664
Foreign currency adjustments			(15,395	)			—				(15,395	)			—
Non-cash interest income, net			(92	)			(254	)			(417	)			(473	)
Tax adjustments			(3,647	)			(484	)			(1,750	)			2,117
Non-GAAP net income		$	55,802			$	31,117			$	96,679			$	77,031
GAAP net income per share - diluted		$	0.52			$	0.48			$	1.20			$	1.47
Acquisition and integration related costs			1.16				0.19				1.23				0.23
Recovery of investment impairment			—				—				—				—
Share-based compensation			0.28				0.21				0.52				0.41
Foreign currency adjustments			(0.40	)			—				(0.40	)			—
Non-cash interest income			—				(0.01	)			(0.01	)			(0.01	)
Tax adjustments			(0.10	)			(0.01	)			(0.05	)			0.06
Non-GAAP net income per share - diluted		$	1.46			$	0.86			$	2.49			$	2.16