8-K
falseSYNAPTICS Inc000081772000008177202022-05-052022-05-050000817720dei:FormerAddressMember2022-05-052022-05-05

 

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): May 05, 2022

 

 

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.)

 

 

 

 

 

1109 McKay Drive

 

San Jose, California

 

95131

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 408 904-1100

 

 

1251 McKay Drive

San Jose, California 95131

(Former Name or Former Address, if Changed Since Last Report)

 

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:

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))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Common Stock, par value $.001 per share

 

SYNA

 

NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 


Item 2.02 Results of Operations and Financial Condition.

On May 5, 2022, Synaptics Incorporated (the “Company”) issued a press release announcing the Company’s financial results for the fiscal quarter ended March 26, 2022 and posted supplemental earnings materials to the investor section of the Company’s website at www.synaptics.com. The press release and the supplemental earnings materials are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.

 

The information in this Current Report on Form 8-K (including Exhibit 99.1 and Exhibit 99.2) 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 Company.

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 May 5, 2022, titled “Synaptics Reports Third Quarter Fiscal 2022 Results”

99.2

Synaptics Third Quarter Fiscal 2022 Earnings Supplement

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


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 thereunto duly authorized.

 

 

 

SYNAPTICS INCORPORATED

 

 

 

 

Date:

May 5, 2022

By:

/s/ Dean Butler

 

 

 

Dean Butler
Senior Vice President and Chief Financial Officer

 


EX-99.1

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Exhibit 99.1

 

 

 

Synaptics Reports Third Quarter Fiscal 2022 Results

 

Q3’22 Financial Results and Recent Business Highlights

 

Revenue of $470.1 million
IoT revenue increased 99% YoY
Record GAAP gross margin of 54.0 percent
Record non-GAAP gross margin of 61.1 percent
GAAP diluted earnings per share of $1.59
Record non-GAAP diluted earnings per share of $3.75
GAAP operating margin of 18.7 percent
Record non-GAAP operating margin of 38.6 percent

 

SAN JOSE, Calif., – May 5, 2022– Synaptics Incorporated (Nasdaq: SYNA), today reported financial results for its third quarter of fiscal 2022 ended March 26, 2022.

 

Net revenue for the third quarter of fiscal 2022 was $470.1 million. GAAP net income for the third quarter of fiscal 2022 was $64.9 million, or $1.59 per diluted share. Non-GAAP net income for the third quarter of fiscal 2022 was a record $152.7 million, or $3.75 per diluted share.

 

“Synaptics reported another solid quarter with third quarter revenue above the mid-point of our guidance and record non-GAAP gross margin and non-GAAP diluted earnings per share, both above the high-end of our guidance. IoT product applications are now 64 percent of our revenue and continue to grow rapidly as we focus our efforts and resources in this area. Our design-win momentum remains solid, and our pipeline continues to grow as we target opportunities in new product categories.” said Michael Hurlston, Synaptics’ President and CEO.

 

Business Outlook
Dean Butler, Chief Financial Officer of Synaptics, added, “We are forecasting continued growth for our fourth quarter of fiscal 2022 driven by strong demand for the company’s IoT products. Our backlog remains strong with overall demand continuing to outpace our supply availability. We expect gross margins and operating profits to remain at near record levels for the June quarter, despite semiconductor supply chain constraints and changing input prices."

 

 


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For the fourth quarter of fiscal 2022, the company expects:

 

 

GAAP

Non-GAAP Adjustment

Non-GAAP

Revenue

$460M to $490M

N/A

N/A

Gross Margin*

55.0 percent to 56.0 percent

$27M

60.5 percent to
61.5 percent

Operating Expense**

$158M to $165M

$51M to $54M

$107M to $111M

 

*Projected Non-GAAP gross margin excludes $25.0 million of intangible asset amortization, $1.0 million of inventory fair value adjustments, and $1.0 million of share-based compensation.

 

**Projected Non-GAAP operating expense excludes $36.0 million to $39.0 million of share-based compensation, $2.5 million of prepaid development amortization, $0.5 million of restructuring costs, and $12.0 million of intangible asset amortization.

 

Earnings Call and Supplementary Materials
The Synaptics third quarter 2022 teleconference and webcast is scheduled to begin at 2:00 p.m. PT (5:00 p.m. ET), on Thursday, May 5, 2022, during which the company will provide forward-looking information.

 

Speakers:

Michael Hurlston, President and Chief Executive Officer
Dean Butler, Chief Financial Officer

 

To participate on the live call, analysts and investors should dial 833-614-1539 (conference ID: 4155715). Supplementary slides, a copy of the prepared remarks, and a live and archived webcast of the conference call will be accessible from the “Investor Relations” section of the company’s Website at https://investor.synaptics.com/.

 

 

 


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About Synaptics Incorporated:
Synaptics (Nasdaq: SYNA) is changing the way humans engage with connected devices and data, engineering exceptional experiences throughout the home, at work, in the car and on the go. Synaptics is the partner of choice for the world’s most innovative intelligent system providers who are integrating multiple experiential technologies into platforms that make our digital lives more productive, insightful, secure and enjoyable. These customers are combining Synaptics’ differentiated technologies in touch, display and biometrics with a new generation of advanced connectivity and AI-enhanced video, vision, audio, speech and security processing. Follow Synaptics on LinkedIn, Twitterand Facebook, or visit synaptics.com.

 

Use of Non-GAAP Financial Information

In evaluating its business, Synaptics considers and uses Non-GAAP Net Income, which we define as net income excluding share-based compensation, acquisition related costs, and certain other non-cash or recurring and non-recurring items the company does not believe are indicative of its core operating performance as a supplemental measure of operating performance. Non-GAAP Net Income 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 Non-GAAP Net Income because it considers it an important supplemental measure of its performance since it 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, acquisition related costs, and certain other non-cash or recurring and non-recurring items. Non-GAAP Net Income 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 as compared to its operating results reported under GAAP. In addition, the company presents components of Non-GAAP Net Income, such as Non-GAAP Gross Margin, Non-GAAP operating expenses and Non-GAAP operating margin, for similar reasons.

 

As presented in the “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures” tables that follow, Non-GAAP Net Income and each of the other Non-GAAP financial measures excludes one or more of the following items:

 

Acquisition related costs

Acquisition related costs primarily consist of:

amortization of purchased intangibles, which includes acquired intangibles such as developed technology, customer relationships, trademarks, backlog, licensed technology, patents, and in-process technology when post-acquisition development is determined to be substantively complete;
inventory adjustments affecting the carrying value of inventory acquired in an acquisition;

 


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transitory post-acquisition incentive programs negotiated in connection with an acquired business or designed to encourage post-acquisition retention of key employees; and
legal and consulting costs associated with acquisitions, including non-recurring post-acquisition costs and services.

 

These acquisition related costs are not factored into the company’s evaluation of its ongoing business operating performance or potential acquisitions, as they are not considered as part of the company’s principal operations. Further, the amount of these costs can vary significantly from period to period based on the terms of an earn-out arrangement, revisions to assumptions that went into developing the estimate of the contingent consideration associated with an earn-out arrangement, the size and timing of an acquisition, the lives assigned to the acquired intangible assets, and the maturity of the business acquired. Excluding acquisition related costs from Non-GAAP measures provides investors with a basis to compare Synaptics against the performance of other companies without the variability and potential earnings volatility associated with purchase accounting and acquisition related items.

 

Share-based compensation

Share-based compensation expense relates to employee equity award programs and the vesting of the underlying awards, which includes stock options, deferred stock units, market stock units, performance stock units, phantom stock units and the employee stock purchase plan. Share-based compensation settled with stock, which includes stock options, deferred stock units, market stock units, performance stock units and the employee stock purchase plan, is a non-cash expense, while share-based compensation settled with cash, which includes phantom stock units, is a cash expense. Settlement of all employee equity award programs whether settled with cash or stock varies in amount from period to period and is dependent on market forces that are often beyond the company’s control. As a result, the company excludes share-based compensation from its internal operating forecasts and models. The company believes that Non-GAAP measures reflecting adjustments for share-based compensation provide investors with a basis to compare the company’s principal operating performance against the performance of peer companies without the variability created by share-based compensation resulting from the variety of equity-linked compensatory awards used by other companies and the varying methodologies and assumptions used.

 

Amortization of prepaid development costs

Amortization of prepaid development costs represents the amortization of the estimated cost to develop certain future roadmap devices designed in advance process nodes in connection with an acquisition. The amortization of prepaid development costs represents a non-cash charge. As a result, the company excludes amortization of prepaid development costs from its internal operating forecasts and models when evaluating its ongoing business performance. The company believes that Non-GAAP measures reflecting adjustments for amortization of prepaid development costs provide investors with a basis to

 


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compare the company’s principal operating performance against the performance of other companies without the variability created by the amortization of prepaid development costs.

 

Restructuring costs

Restructuring costs are costs incurred to address cost structure inefficiencies of acquired or existing business operations and consist primarily of employee termination and office closure costs, including the reversal of such costs. These costs are generally cash-based. As a result, the company excludes restructuring costs from its internal operating forecasts and models when evaluating its ongoing business performance. The company believes that Non-GAAP measures reflecting adjustments for restructuring costs provide investors with a basis to compare the company’s principal operating performance against the performance of other companies without the variability created by restructuring costs designed to address cost structure inefficiencies of acquired or existing business operations.

 

Gain on sale of audio technology assets

Gain on sale of audio technology assets, includes the sale of certain intangible assets related to our audio business. From time to time, we may enter into a transaction to sell certain intangible assets from our intangible asset portfolio that we believe can be monetized in a manner that does not impact our product roadmap. Excluding the gain on sale of audio technology assets from our Non-GAAP measures provides investors with a basis to compare the company’s principal operating performance against the performance of other companies without the variability created by infrequent transactions that are not considered to be part of our core business.

 

Gain on sale and leaseback transaction

Gain on sale and leaseback transaction, includes the gain on the sale of our San Jose headquarters buildings and land. Excluding the gain on sale and leaseback transaction from our Non-GAAP measures provides investors with a basis to compare the company’s principal operating performance against the performance of other companies without the variability created by infrequent transactions that are not considered to be part of our core business.

 

Gain on supplier settlement

Gain on supplier settlement, represents a settlement with a supplier to resolve a business matter. Excluding gain on supplier settlement from our Non-GAAP measures provides investors with a basis to compare the company’s principal operating performance against the performance of other companies without the variability created by infrequent transactions that are not considered to be part of our core business.

 

Other non-cash items

Other non-cash items include non-cash amortization of debt discount and issuance costs. These items are excluded from Non-GAAP results as they are non-cash. Excluding other non-cash items from

 


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Non-GAAP measures provides investors with a basis to compare Synaptics against the performance of other companies without the variability associated with other non-cash items.

 

Loss on extinguishment of debt

Loss on extinguishment of debt represents a non-cash item based on the difference in the carrying value of the debt and the fair value of the debt when extinguished. Loss on extinguishment of debt is excluded from Non-GAAP results as it is non-cash. Excluding loss on extinguishment of debt from Non-GAAP measures provides investors with a basis to compare Synaptics against the performance of other companies without the variability associated with loss on extinguishment of debt.

 

Equity investment gain or loss

Equity investment gain represents a gain on the sale of an equity investment in a minority owned company. Equity investment loss represents an adjustment in the book value of an equity investment in a minority owned company. The equity investment loss is a non-cash item. The company excludes equity investment gain or loss from its internal operating forecasts and models when evaluating its ongoing business performance. The company believes that Non-GAAP measures reflecting adjustments for equity investment gain or loss provide investors with a basis to compare the company’s principal operating performance against the performance of other companies without the variability created by equity investment gain or loss.

 

Non-GAAP tax adjustments

The company forecasts its long-term Non-GAAP tax rate in order to provide investors with improved long-term modeling accuracy and consistency across financial reporting periods by eliminating the effects of certain items in our Non-GAAP net income and Non-GAAP net income per share, including the type and amount of share-based compensation, the taxation of post-acquisition intercompany intellectual property cross-licensing or transfer transactions, and the impact of other acquisition items that may or may not be tax deductible. The company intends to evaluate its long-term Non-GAAP tax rate annually for significant events, including material tax law changes in the major tax jurisdictions in which the company operates, corporate organizational changes related to acquisitions or tax planning opportunities, and substantive changes in our geographic earnings mix.

 

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, including our expectations regarding the potential impacts on our business of the COVID-19 pandemic, 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,”

 


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“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 risk that our business, results of operations and financial condition and prospects may be materially and adversely affected by the COVID-19 pandemic and that significant uncertainties remain related to the impact of COVID-19 on our business operations and future results, including our fourth quarter fiscal 2022 business outlook; global supply chain disruptions and component shortages that are currently affecting the semiconductor industry as a whole; 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 most recent Annual Report on Form 10-K and our most recent Quarterly Report on Form 10-Q (including that the impact of the COVID-19 pandemic may also exacerbate the risks discussed therein); 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 release.

 

For more information contact:
Munjal Shah

Head of Investor Relations

munjal.shah@synaptics.com

 

 


 

SYNAPTICS INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In millions except share data)

(Unaudited)

 

 

March

 

 

June

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

690.3

 

 

$

836.3

 

Short-term investments

 

 

64.6

 

 

 

-

 

Accounts receivable, net

 

 

298.3

 

 

 

228.3

 

Inventories

 

 

145.9

 

 

 

82.0

 

Prepaid expenses and other current assets

 

 

48.1

 

 

 

33.1

 

Total current assets

 

 

1,247.2

 

 

 

1,179.7

 

Property and equipment at cost, net

 

 

63.1

 

 

 

91.2

 

Goodwill

 

 

814.5

 

 

 

570.0

 

Acquired intangibles, net

 

 

409.5

 

 

 

301.5

 

Non-current other assets

 

 

163.7

 

 

 

84.4

 

 

 

$

2,698.0

 

 

$

2,226.8

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

135.6

 

 

$

97.6

 

Accrued compensation

 

 

80.1

 

 

 

76.4

 

Income taxes payable

 

 

38.0

 

 

 

29.4

 

Other accrued liabilities

 

 

139.3

 

 

 

96.2

 

Current portion of debt

 

 

-

 

 

 

487.1

 

Total current liabilities

 

 

393.0

 

 

 

786.7

 

Long-term debt

 

 

982.6

 

 

 

394.4

 

Other long-term liabilities

 

 

164.7

 

 

 

78.5

 

Total liabilities

 

 

1,540.3

 

 

 

1,259.6

 

Stockholders' Equity:

 

 

 

 

 

 

Common stock:

 

 

0.1

 

 

 

0.1

 

Additional paid-in capital

 

 

897.8

 

 

 

1,391.5

 

Treasury stock

 

 

(694.5

)

 

 

(1,205.4

)

Accumulated other comprehensive income

 

 

(1.3

)

 

 

-

 

Retained earnings

 

 

955.6

 

 

 

781.0

 

Total stockholders' equity

 

 

1,157.7

 

 

 

967.2

 

 

 

$

2,698.0

 

 

$

2,226.8

 

 

 


 

SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March

 

 

March

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net revenue

 

$

470.1

 

 

$

325.8

 

 

$

1,263.3

 

 

$

1,011.8

 

Acuqisition related costs (1)

 

 

32.4

 

 

 

23.2

 

 

 

73.3

 

 

 

86.5

 

Cost of revenue

 

 

183.9

 

 

 

147.1

 

 

 

513.0

 

 

 

484.9

 

Gross margin

 

 

253.8

 

 

 

155.5

 

 

 

677.0

 

 

 

440.4

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

98.2

 

 

 

77.5

 

 

 

273.2

 

 

 

235.7

 

Selling, general, and administrative

 

 

44.2

 

 

 

36.8

 

 

 

130.1

 

 

 

111.6

 

Acquired intangibles amortization (2)

 

 

12.0

 

 

 

8.7

 

 

 

29.6

 

 

 

24.1

 

Restructuring costs (3)

 

 

11.3

 

 

 

0.9

 

 

 

17.8

 

 

 

7.1

 

Gain on sale of audio technology assets

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(34.2

)

Total operating expenses

 

 

165.7

 

 

 

123.9

 

 

 

450.7

 

 

 

344.3

 

Operating income

 

 

88.1

 

 

 

31.6

 

 

 

226.3

 

 

 

96.1

 

Interest and other expense, net

 

 

(8.5

)

 

 

(7.0

)

 

 

(20.1

)

 

 

(17.7

)

Gain on sale and leaseback transaction

 

 

5.4

 

 

 

-

 

 

 

5.4

 

 

 

-

 

Gain on supplier commitment

 

 

1.8

 

 

 

-

 

 

 

1.8

 

 

 

-

 

Loss on redemption of convertible notes

 

 

-

 

 

 

-

 

 

 

(8.1

)

 

 

-

 

Income before provision for income taxes and equity investment loss

 

 

86.8

 

 

 

24.6

 

 

 

205.3

 

 

 

78.4

 

Provision for income taxes

 

 

24.4

 

 

 

10.4

 

 

 

32.3

 

 

 

16.4

 

Equity investment gain (loss)

 

 

2.5

 

 

 

(0.4

)

 

 

1.6

 

 

 

(1.4

)

Net income

 

$

64.9

 

 

$

13.8

 

 

$

174.6

 

 

$

60.6

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.64

 

 

$

0.39

 

 

$

4.50

 

 

$

1.75

 

Diluted

 

$

1.59

 

 

$

0.35

 

 

$

4.29

 

 

$

1.62

 

Shares used in computing net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

39.5

 

 

 

35.0

 

 

 

38.8

 

 

 

34.7

 

Diluted

 

 

40.7

 

 

 

39.1

 

 

 

40.7

 

 

 

37.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) These acquisition related costs consist primarily of amortization of acquired intangible assets and inventory fair value adjustments associated with acquisitions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2)These acquisition related costs consist primarily of amortization associated with certain acquired intangible assets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3) Restructuring costs primarily include severance related costs and facility consolidation costs associated with operational restructurings and acquisitions.

 

 

 


 

SYNAPTICS INCORPORATED

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In millions except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March

 

 

March

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

GAAP gross margin

 

$

253.8

 

 

$

155.5

 

 

$

677.0

 

 

$

440.4

 

Acquisition related costs

 

 

32.4

 

 

 

23.2

 

 

 

73.3

 

 

 

86.5

 

Recovery on supply commitment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.6

)

Share-based compensation

 

 

0.9

 

 

 

0.8

 

 

 

3.2

 

 

 

2.6

 

Non-GAAP gross margin

 

$

287.1

 

 

$

179.5

 

 

$

753.5

 

 

$

528.9

 

GAAP gross margin - percentage of revenue

 

 

54.0

%

 

 

47.7

%

 

 

53.6

%

 

 

43.5

%

Acquisition related costs - percentage of revenue

 

 

6.9

%

 

 

7.1

%

 

 

5.8

%

 

 

8.5

%

Recovery on supply commitment

 

 

0.0

%

 

 

0.0

%

 

 

0.0

%

 

 

-0.1

%

Share-based compensation - percentage of revenue

 

 

0.2

%

 

 

0.2

%

 

 

0.3

%

 

 

0.3

%

Non-GAAP gross margin - percentage of revenue

 

 

61.1

%

 

 

55.1

%

 

 

59.6

%

 

 

52.3

%

GAAP research and development expense

 

$

98.2

 

 

$

77.5

 

 

$

273.2

 

 

$

235.7

 

Share-based compensation

 

 

(18.0

)

 

 

(12.9

)

 

 

(57.4

)

 

 

(33.4

)

Retention costs

 

 

-

 

 

 

(0.1

)

 

 

-

 

 

 

(4.0

)

Amortization prepaid development costs

 

 

(2.5

)

 

 

(2.5

)

 

 

(7.5

)

 

 

(6.7

)

Integration related costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.9

)

Non-GAAP research and development expense

 

$

77.7

 

 

$

62.0

 

 

$

208.3

 

 

$

190.7

 

GAAP selling, general, and administrative expense

 

$

44.2

 

 

$

36.8

 

 

$

130.1

 

 

$

111.6

 

Share-based compensation

 

 

(15.2

)

 

 

(11.4

)

 

 

(45.7

)

 

 

(34.0

)

Acquisition/divestiture related costs

 

 

(1.1

)

 

 

-

 

 

 

(4.5

)

 

 

(2.4

)

Retention costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1.1

)

Non-GAAP selling, general, and administrative expense

 

$

27.9

 

 

$

25.4

 

 

$

79.9

 

 

$

74.1

 

GAAP operating income

 

$

88.1

 

 

$

31.6

 

 

$

226.3

 

 

$

96.1

 

Recovery on supply commitment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.6

)

Acquisition & integration related costs

 

 

45.5

 

 

 

31.9

 

 

 

107.4

 

 

 

113.9

 

Share-based compensation

 

 

34.1

 

 

 

25.1

 

 

 

106.3

 

 

 

70.0

 

Restructuring costs

 

 

11.3

 

 

 

0.9

 

 

 

17.8

 

 

 

7.1

 

Retention program costs

 

 

-

 

 

 

0.1

 

 

 

-

 

 

 

5.1

 

Amortization prepaid development costs

 

 

2.5

 

 

 

2.5

 

 

 

7.5

 

 

 

6.7

 

Gain on sale of audio technology assets

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(34.2

)

Non-GAAP operating income

 

$

181.5

 

 

$

92.1

 

 

$

465.3

 

 

$

264.1

 

GAAP net income

 

$

64.9

 

 

$

13.8

 

 

$

174.6

 

 

$

60.6

 

Recovery on supply commitment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.6

)

Acquisition & integration related costs

 

 

45.5

 

 

 

31.9

 

 

 

107.4

 

 

 

113.9

 

Share-based compensation

 

 

34.1

 

 

 

25.1

 

 

 

106.3

 

 

 

70.0

 

Restructuring costs

 

 

11.3

 

 

 

0.9

 

 

 

17.8

 

 

 

7.1

 

Retention program costs

 

 

-

 

 

 

0.1

 

 

 

-

 

 

 

5.1

 

Amortization prepaid development costs

 

 

2.5

 

 

 

2.5

 

 

 

7.5

 

 

 

6.7

 

Gain on sale of audio technology assets

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(34.2

)

Gain on supplier settlement

 

 

(1.8

)

 

 

-

 

 

 

(1.8

)

 

 

-

 

Other non-cash items

 

 

0.6

 

 

 

5.0

 

 

 

2.8

 

 

 

14.7

 

Gain on sale and leaseback transaction

 

 

(5.4

)

 

 

-

 

 

 

(5.4

)

 

 

-

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

8.1

 

 

 

-

 

Equity investment (gain) / loss

 

 

(2.5

)

 

 

0.4

 

 

 

(1.6

)

 

 

1.4

 

Non-GAAP tax adjustments

 

 

3.5

 

 

 

(0.4

)

 

 

(21.5

)

 

 

(14.9

)

Non-GAAP net income

 

$

152.7

 

 

$

79.3

 

 

$

394.2

 

 

$

229.8

 

GAAP net income per share - diluted

 

$

1.59

 

 

$

0.35

 

 

$

4.29

 

 

$

1.62

 

Recovery on supply commitment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.02

)

Acquisition/divestiture & integration related costs

 

 

1.11

 

 

 

0.82

 

 

 

2.63

 

 

 

3.04

 

Share-based compensation

 

 

0.84

 

 

 

0.64

 

 

 

2.62

 

 

 

1.87

 

Restructuring costs

 

 

0.28

 

 

 

0.02

 

 

 

0.44

 

 

 

0.19

 

Retention program costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

0.13

 

Amortization prepaid development costs

 

 

0.06

 

 

 

0.07

 

 

 

0.18

 

 

 

0.18

 

Gain on sale of audio technology assets

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.91

)

Gain on supplier settlement

 

 

(0.04

)

 

 

-

 

 

 

(0.04

)

 

 

-

 

Other non-cash items

 

 

0.01

 

 

 

0.13

 

 

 

0.07

 

 

 

0.39

 

Gain on sale and leaseback transaction

 

 

(0.13

)

 

 

-

 

 

 

(0.13

)

 

 

-

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

0.20

 

 

 

-

 

Equity investment (gain) / loss

 

 

(0.06

)

 

 

0.01

 

 

 

(0.04

)

 

 

0.04

 

Non-GAAP tax adjustments

 

 

0.09

 

 

 

(0.01

)

 

 

(0.53

)

 

 

(0.40

)

Non-GAAP net income per share - diluted

 

$

3.75

 

 

$

2.03

 

 

$

9.69

 

 

$

6.13

 

 

 


 

SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED CASH FLOWS

(In millions)

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

March

 

 

 

2022

 

 

2021

 

Net income

 

$

174.6

 

 

$

60.6

 

Non-cash operating items

 

 

164.5

 

 

 

126.3

 

Changes in working capital

 

 

(30.7

)

 

 

27.4

 

Provided by operations

 

 

308.4

 

 

 

214.3

 

 

 

 

 

 

 

 

Acquisitions and investments

 

 

(504.8

)

 

 

(631.5

)

Net gain on sale of audio technology assets

 

 

-

 

 

 

34.2

 

Net proceeds from sale of prooperty

 

 

55.9

 

 

 

-

 

Fixed asset and intangible asset purchases

 

 

(26.9

)

 

 

(15.5

)

Net proceeds from maturities of short-term investments

 

 

6.4

 

 

 

95.8

 

Used in investing

 

 

(469.4

)

 

 

(517.0

)

 

 

 

 

 

 

 

Payment of debt obligations

 

 

(507.1

)

 

 

(100.0

)

Proceeds from isusance of debt, net of issuance costs

 

 

588.8

 

 

 

394.1

 

Equity compensation, net

 

 

(51.0

)

 

 

(0.1

)

Refundable deposit paid to vendor, net

 

 

(13.8

)

 

 

-

 

Provided by financing

 

 

16.9

 

 

 

294.0

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(1.9

)

 

 

1.5

 

Net change in cash and cash equivalents

 

 

(146.0

)

 

 

(7.2

)

Cash and cash equivalents at beginning of period

 

 

836.3

 

 

 

763.4

 

Cash and cash equivalents at end of period

 

$

690.3

 

 

$

756.2

 

 

 


Slide 1

Third Quarter Fiscal 2022 Earnings SUPPLEMENTAL slides May 5, 2022 Exhibit 99.2


Slide 2

Safe Harbor Statement This presentation 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, including our expectations regarding the potential impacts on our business of the COVID-19 pandemic, 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 risk that our business, results of operations and financial condition and prospects may be materially and adversely affected by the COVID-19 pandemic and that significant uncertainties remain related to the impact of COVID-19 on our business operations and future results, including our fourth quarter fiscal 2022 business outlook; global supply chain disruptions and component shortages that are currently affecting the semiconductor industry as a whole; 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 most recent Annual Report on Form 10-K and our most recent Quarterly Report on Form 10-Q (including that the impact of the COVID-19 pandemic may also exacerbate the risks discussed therein); 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 release.


Slide 3

Q3’FY22 Financial Highlights Revenue of $470 million, above the midpoint of guidance range and up +44% YoY and +12% QoQ IoT Revenue increased 99% YoY and accounted for 64% of total revenue Record GAAP and non-GAAP gross margin GAAP gross margin of 54% Non-GAAP gross margin of 61.1%, up 160 basis points sequentially, above the high-end of guidance range; 10th quarter of sequential improvement GAAP diluted earnings per share of $1.59 Non-GAAP diluted earnings per share of $3.75, above high-end of guidance range Solid cash flow from operations of $128 million, cash and investments of $755 million on the balance sheet See the tables at the end of this presentation for a reconciliation of GAAP results to non-GAAP financial measures


Slide 4

Q3’FY22 Business Highlights IoT products continue to grow rapidly; almost doubled year-over-year Opened new Wireless research and development center in France Solid growth in Video Interface business across core and new applications Automotive design-wins ramping across all geographies New OEMs in China are adopting our Virtual Reality products Several cross-sell opportunities with DSP Group IoT 64% Q3’FY22 $470M


Slide 5

Q3’FY22 Financial Results See the tables at the end of this presentation for a reconciliation of GAAP results to non-GAAP financial measures $M (except EPS) Q1’21 Q4’21 Q1’22 QoQ YoY Revenue $328.4 $327.8 $372.7 13.7% 13.5% GAAP Gross Margin % 41.0% 52.1% 53.2% 110bps 1220bps GAAP Operating Expenses $128.5 $119.9 $137.5 15% 7% GAAP EPS ($0.08) $0.48 $0.99 106% NA Non-GAAP Gross Margin % 49.7% 57.5% 58.0% 50bps 830bps Non-GAAP Operating Expenses $87.5 $86.2 $88.4 3% 1% Non-GAAP EPS Diluted $1.85 $2.18 $2.68 23% 45% $M (except EPS) Q3’21 Q2’22 Q3’22 QoQ YoY Revenue $325.8 $420.5 $470.1 11.8% 44.3% GAAP Gross Margin % 47.7% 53.5% 54.0% 50 bps 630 bps GAAP Operating Expenses $123.9 $147.5 $165.7 12% 34% GAAP EPS Diluted $0.35 $1.71 $1.59 (7%) 354% Non-GAAP Gross Margin % 55.1% 59.5% 61.1% 160 bps 600 bps Non-GAAP Operating Expenses $87.4 $94.2 $105.6 12% 21% Non-GAAP EPS Diluted $2.03 $3.26 $3.75 15% 85%


Slide 6

Q4’FY22 Guidance See the tables at the end of this presentation for a reconciliation of GAAP results to non-GAAP financial measures $M (except EPS) GAAP Non-GAAP Revenue $390M - $420M $390M - $420M Gross Margin % 54.0% - 55.0% 58.5% 59.5% Operating Expenses $134M - $141M $90M - $93M EPS $1.25 - $1.65 $2.90 - $3.20 Revenue mix     IoT 58% 58% PC 22% 22% Mobile 20% 20% $M (except EPS) GAAP Non-GAAP Revenue $450M - $480M $450M - $480M Gross Margin % 52.5% - 53.5% 59.5% - 60.5% Operating Expenses $158M - $165M $104M - $108M EPS $1.25 - $1.55 $3.40 - $3.70 Revenue mix     IoT 64% 64% PC 19% 19% Mobile 17% 17% $M (except EPS) GAAP Non-GAAP Revenue $460M - $490M $460M - $490M Gross Margin % 55.0% - 56.0% 60.5% - 61.5% Operating Expenses $158M - $165M $107M - $111M EPS Diluted $1.55 - $1.85 $3.55 - $3.85 Revenue mix     IoT 69% 69% PC 17% 17% Mobile 14% 14%


Slide 7

Q3’FY22 Balance Sheet Balances are as of the end of each quarter presented Debt, net balance reflects debt net of discount and debt issuance costs In Millions Q1’22 Q2’22 Q3’22 Cash & ST Investments $347.3 $573.9 $754.9 AR $269.7 $312.2 $298.3 Inventory $88.7 $133.3 $145.9 PP&E $92.1 $56.9 $63.1 Other $984.4 $1,491.1 $1,435.8 Total Assets $1,782.2 $2,567.4 $2,698.0 Current Liabilities (excluding debt) $303.5 $365.2 $393.0 Debt, net $394.5 $983.5 $982.6 Other Liabilities $82.8 $154.8 $164.7 Shareholder’s Equity $1,001.4 $1,063.9 $1,157.7 Total Liabilities & Equity $1,782.2 $2,567.4 $2,698.0


Slide 8

Revenue Trend $ millions


Slide 9

Non-GAAP Net Income & EPS Fiscal Quarter Trend See the tables at the end of this presentation for a reconciliation of GAAP results to non-GAAP financial measures $ millions


Slide 10

Appendix


Slide 11

Synaptics Product Applications Smart Home Smart Workplace Smart Security Smart Health Smart Audio Note: Images are intended to illustrate product application types only and are not necessarily reflective of the actual products and brand into which Synaptics products are integrated.


Slide 12

Engineering Exceptional Experiences


Slide 13

GAAP to Non-GAAP Reconciliation Tables


Slide 14

GAAP to Non-GAAP Reconciliation Tables - continued

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 t