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

April 23, 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 April 23, 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 April 23, 2015, entitled “Synaptics Reports Results for Third 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: April 23, 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 April 23, 2015, entitled “Synaptics Reports Results for Third 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 Third Quarter Fiscal 2015

Record revenue of $478 million for the quarter, up 134% year-over-year

San Jose, CA – April 23, 2015 – Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its third quarter ended March 28, 2015.

Net revenue for the third quarter of fiscal 2015 grew 134% over the comparable quarter last year to $477.6 million. Net income for the third quarter of fiscal 2015 was $31.5 million, or $0.82 per diluted share. Non-GAAP net income for the third quarter of fiscal 2015 was $63.5 million, or $1.65 per diluted share. Results for the period reflect consolidated results from the acquisition of Renesas SP Drivers, Inc. (RSP). See attached table for a reconciliation of GAAP to non-GAAP financial measures.

“Synaptics delivered record financial performance in the third quarter as we continued to execute across our expanding growth opportunities,” stated Rick Bergman, President and CEO. “We see strong demand for our broad product portfolio, particularly as the momentum for fingerprint ID as well as touch and display driver integrated (TDDI) solutions continues to build. In addition, we continue to benefit from strength in our display driver business and efforts to expand the customer base and solutions set. We continue to elevate our position as the leading human interface provider and are poised to achieve our robust revenue growth forecast of over 75% as we close out the fiscal year.”

Third Quarter 2015 Business Metrics

 

•

Revenue mix from mobile and PC products was approximately 87% and 13%, respectively. Fingerprint ID products have been classified according to type of device.

 

•

Revenue from mobile products was up 177% year-over-year to $417.4 million. Mobile products revenue includes all touchscreen, display driver, and applicable fingerprint ID products.

 

•

Revenue from PC products totaled $60.2 million, an increase of 12% year-over-year, and includes applicable fingerprint ID products.

Cash at March 31, 2015 was $381 million, an increase of $53 million from the prior quarter. The cash balance reflects the payment of $48 million during the quarter for the settlement of the working capital holdback liability related to the RSP acquisition. In the third quarter of fiscal 2015, cash flow from operations was $128 million. Year-to-date, the company has used $111 million to repurchase approximately 1.5 million shares of its common stock, or 4.2% of the total shares outstanding.

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Kathy Bayless, CFO, added, “Considering our backlog of $248 million entering the June quarter, customer forecasts and the resulting expected product mix, we anticipate revenue to be in the range of $460 to $500 million, an increase of 46% to 59% over the prior year period. This outlook reflects positive trends on a sequential basis in our touch and fingerprint products, partially offset by product cycle trends in display driver products.”

Earnings Call Information

The Synaptics third quarter fiscal 2015 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, April 23, 2015, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 1-888-438-5524 (conference ID: 2556376) 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)

 

		March 31,				June 30,
		2015				2014
Assets
Current assets:
Cash and cash equivalents		$	380,579			$	447,205
Accounts receivables, net of allowances of $1,800 and $883, respectively			319,567				195,057
Inventories			152,261				82,311
Prepaid expenses and other current assets			27,634				17,858
Total current assets			880,041				742,431
Property and equipment at cost, net			117,692				80,849
Goodwill			215,244				61,030
Purchased intangibles, net			254,357				82,111
Non-current other assets			43,883				53,912
Total assets		$	1,511,217			$	1,020,333
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	182,021			$	97,109
Accrued compensation			32,217				30,682
Income taxes payable			34,136				12,538
Acquisition-related liabilities			42,976				57,388
Other accrued liabilities			96,908				56,691
Current portion of long-term debt			9,375				—
Total current liabilities			397,633				254,408
Long-term debt			234,581				—
Acquisition-related liabilities			72,734				52,734
Deferred tax liability			43,341				—
Other liabilities			14,634				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; 57,392,290 and 55,911,513 shares issued, and 36,798,673 and 36,863,802 shares outstanding, respectively			57				56
Additional paid in capital			819,462				740,282
Less: 20,593,617 and 19,047,711 treasury shares, respectively, at cost			(641,022	)			(530,422	)
Accumulated other comprehensive income			8,075				8,560
Retained earnings			561,722				482,681
Total stockholders’ equity			748,294				701,157
Total liabilities and stockholders’ equity		$	1,511,217			$	1,020,333

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SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

		Three Months Ended								Nine Months Ended
		March 31,								March 31,
		2015				2014				2015 (4)				2014
Net revenue		$	477,598			$	204,271			$	1,224,044			$	632,641
Acquisition and integration related costs (1)			16,180				2,378				59,742				4,548
Cost of revenue			297,073				109,463				752,937				331,839
Gross margin			164,345				92,430				411,365				296,254
Operating expenses
Research and development			78,719				49,412				213,467				135,785
Selling, general, and administrative			35,799				25,803				103,866				69,703
Acquisition related costs (2)			(2,026	)			53,358				(8,673	)			57,638
Foreign currency adjustment (3)			—				—				(15,395	)			—
Total operating expenses			112,492				128,573				293,265				263,126
Operating income			51,853				(36,143	)			118,100				33,128
Interest and other income, net			349				516				1,470				1,422
Interest expense			(1,317	)			—				(2,529	)			(9	)
Income/(loss) before provision for income taxes			50,885				(35,627	)			117,041				34,541
Provision for income taxes			19,407				4,429				38,000				22,324
Net income/(loss)		$	31,478			$	(40,056	)		$	79,041			$	12,217
Net income/(loss) per share:
Basic		$	0.86			$	(1.12	)		$	2.15			$	0.36
Diluted		$	0.82			$	(1.12	)		$	2.04			$	0.33
Shares used in computing net income/(loss) per share:
Basic			36,726				35,685				36,839				34,212
Diluted			38,535				35,685				38,797				36,532

 

 

(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.

(4)	Inlcudes retrospective application of measurement period adjustments to amounts provisionally recorded in the quarter ended December 31, 2014 related to our acquisition of RSP in accordance with US GAAP.

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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								Nine Months Ended
		March 31,								March 31,
		2015				2014				2015				2014
GAAP gross margin		$	164,345			$	92,430			$	411,365			$	296,254
Acquisition and integration related costs			16,180				2,378				59,742				4,548
Share-based compensation			369				328				1,007				844
Non-GAAP gross margin		$	180,894			$	95,136			$	472,114			$	301,646
GAAP gross margin - percentage of revenue			34.4	%			45.2	%			33.6	%			46.8	%
Acquisition and integration related costs - percentage of revenue			3.4	%			1.2	%			4.9	%			0.7	%
Share-based compensation - percentage of revenue			0.1	%			0.2	%			0.1	%			0.2	%
Non-GAAP gross margin - percentage of revenue			37.9	%			46.6	%			38.6	%			47.7	%
GAAP research and development expense		$	78,719			$	49,412			$	213,467			$	135,785
Acquisition and integration related costs			—				—				(1,731	)			—
Share-based compensation			(6,455	)			(4,951	)			(17,806	)			(13,119	)
Non-GAAP research and development expense		$	72,264			$	44,461			$	193,930			$	122,666
GAAP selling, general, and administrative expense		$	35,799			$	25,803			$	103,866			$	69,703
Acquisition and integration related costs			—				—				(7,447	)			(2,000	)
Share-based compensation			(4,790	)			(3,496	)			(13,024	)			(9,476	)
Non-GAAP selling, general, and administrative expense		$	31,009			$	22,307			$	83,395			$	58,227
GAAP operating income		$	51,853			$	(36,143	)		$	118,100			$	33,128
Acquisition and integration related costs			14,154				55,736				60,247				64,186
Share-based compensation			11,614				8,775				31,837				23,439
Foreign currency adjustment			—				—				(15,395	)			—
Non-GAAP operating income		$	77,621			$	28,368			$	194,789			$	120,753
GAAP net income		$	31,478			$	(40,056	)		$	79,041			$	12,217
Acquisition and integration related costs			14,154				55,736				60,247				64,186
Share-based compensation			11,614				8,775				31,837				23,439
Foreign currency adjustments			—				—				(15,395	)			—
Other non-cash items, net			(126	)			(278	)			(722	)			(751	)
Tax adjustments			6,398				(434	)			5,189				1,683
Non-GAAP net income		$	63,518			$	23,743			$	160,197			$	100,774
GAAP net income per share - diluted		$	0.82			$	(1.12	)		$	2.04			$	0.33
Acquisition and integration related costs			0.37				1.56				1.55				1.76
Share-based compensation			0.30				0.25				0.82				0.64
Foreign currency adjustments			—				—				(0.40	)			—
Other non-cash items, net			—				(0.01	)			(0.02	)			(0.02	)
Tax adjustments			0.16				(0.01	)			0.14				0.05
Non-GAAP share adjustment			—				(0.04	)			—				—
Non-GAAP net income per share - diluted		$	1.65			$	0.63			$	4.13			$	2.76