SEC Filing | Synaptics Incorporated

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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 25, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number 000-49602

SYNAPTICS INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware

77-0118518

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

1109 McKay Drive

San Jose, California 95131

(Address of principal executive offices) (Zip code)

(408) 904-1100

(Registrant’s telephone number, including area code)

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


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.001 per share	SYNA	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 28, 2023, the Company had 39,523,948 shares of Common Stock outstanding.

SYNAPTICS INCORPORATED

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 25, 2023

TABLE OF CONTENTS


			Page
Part I. Financial Information

	Item 1.	Condensed Consolidated Financial Statements (Unaudited):

		Condensed Consolidated Balance Sheets—March 25, 2023 and June 25, 2022	3

		Condensed Consolidated Statements of Income—Three and Nine Months Ended March 25, 2023 and March 26, 2022	4

		Condensed Consolidated Statements of Comprehensive Income—Three and Nine Months Ended March 25, 2023 and March 26, 2022	5

		Condensed Consolidated Statements of Stockholders’ Equity—Three and Nine Months Ended March 25, 2023 and March 26, 2022	6

		Condensed Consolidated Statements of Cash Flows—Nine Months Ended March 25, 2023 and March 26, 2022	8

		Notes to Condensed Consolidated Financial Statements	9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32

	Item 4.	Controls and Procedures	32

Part II. Other Information

	Item 1.	Legal Proceedings	33

	Item 1A.	Risk Factors	33

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

	Item 6.	Exhibits	35

Signatures			36

PART I—FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except par value and share amounts)

(unaudited)


	March			June
	2023			2022
ASSETS
Current Assets:
Cash and cash equivalents	$	898.0		$	824.0
Short-term investments		35.9			52.0
Accounts receivable, net		218.2			322.1
Inventories, net		147.8			169.7
Prepaid expenses and other current assets		34.4			35.6
Total current assets		1,334.3			1,403.4
Property and equipment at cost, net of accumulated depreciation of $135.3 and $122.8 at March 2023 and June 2022, respectively		69.0			62.9
Goodwill		816.4			806.6
Acquired intangibles, net		331.4			390.0
Right-of-use assets		51.2			61.2
Non-current other assets		112.4			134.0
	$	2,714.7		$	2,858.1
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	60.8		$	141.8
Accrued compensation		43.6			90.6
Income taxes payable		64.8			79.7
Other accrued liabilities		93.7			145.3
Current portion of long-term debt		6.0			6.0
Total current liabilities		268.9			463.4
Long-term debt		972.9			975.7
Other long-term liabilities		151.8			152.6
Total liabilities		1,393.6			1,591.7
Stockholders' Equity:
Common stock:
$0.001 par value; 120,000,000 shares authorized, 68,629,861 and 67,745,800 shares issued, and 39,512,364 and 39,621,179 shares outstanding, at March 2023 and June 2022, respectively		0.1			0.1
Additional paid-in capital		981.2			924.1
Treasury stock: 29,117,497 and 28,124,621 common shares at March 2023 and June 2022, respectively, at cost		(794.6	)		(694.5	)
Accumulated other comprehensive loss		(1.1	)		(1.8	)
Retained earnings		1,135.5			1,038.5
Total stockholders' equity		1,321.1			1,266.4
	$	2,714.7		$	2,858.1

See accompanying notes to condensed consolidated financial statements (unaudited)

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data)

(unaudited)


	Three Months Ended						Nine Months Ended
	March						March
	2023			2022			2023			2022
Net revenue	$	326.6		$	470.1		$	1,127.8		$	1,263.3
Cost of revenue		154.3			216.3			513.1			586.3
Gross margin		172.3			253.8			614.7			677.0
Operating expenses:
Research and development		87.9			98.2			266.7			273.2
Selling, general, and administrative		41.7			44.2			128.8			130.1
Acquired intangibles amortization		8.5			12.0			26.9			29.6
Restructuring costs		-			11.3			-			17.8
Total operating expenses		138.1			165.7			422.4			450.7
Operating income		34.2			88.1			192.3			226.3
Interest and other expense, net		(7.0	)		(6.7	)		(22.0	)		(18.3	)
Gain on sale and leaseback transaction		-			5.4			-			5.4
Loss on redemption of convertible notes		-			-			-			(8.1	)
Income before provision for income taxes and equity investment gain		27.2			86.8			170.3			205.3
Provision for income taxes		16.8			24.4			73.3			32.3
Equity investment gain		-			2.5			-			1.6
Net income	$	10.4		$	64.9		$	97.0		$	174.6
Net income per share:
Basic	$	0.26		$	1.64		$	2.44		$	4.50
Diluted	$	0.26		$	1.59		$	2.41		$	4.29
Shares used in computing net income:
Basic		39.4			39.5			39.7			38.8
Diluted		39.9			40.7			40.3			40.7

See accompanying notes to condensed consolidated financial statements (unaudited)

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

(unaudited)


	Three Months Ended					Nine Months Ended
	March					March
	2023		2022				2023		2022
Net income	$	10.4	$	64.9			$	97.0	$	174.6
Other comprehensive income (loss), net of tax
Unrealized income (loss) on available-for-sale-securities		0.4		(1.2	)			0.7		(1.3	)
Comprehensive income	$	10.8	$	63.7			$	97.7	$	173.3

See accompanying notes to condensed consolidated financial statements (unaudited)

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except share amounts)

(unaudited)


	Common Stock
	Shares		Amount		Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive loss			Retained Earnings		Total Stockholders' Equity
Balance at June 2022		67,745,800	$	0.1	$	924.1		$	(694.5	)	$	(1.8	)	$	1,038.5	$	1,266.4
Net income		—		—		—			—			—			64.6		64.6
Other comprehensive loss		—		—		—			—			(0.1	)		—		(0.1	)
Issuance of common stock for share-based award compensation plans		483,713		—		8.5			—			—			—		8.5
Payroll taxes for deferred stock units		—		—		(31.4	)		—			—			—		(31.4	)
Common stock repurchased		—		—		—			(13.4	)		—					(13.4	)
Share-based compensation		—		—		30.5			—			—			—		30.5
Balance at September 2022		68,229,513		0.1		931.7			(707.9	)		(1.9	)		1,103.1		1,325.1
Net income		—		—		—			—			—			22.0		22.0
Other comprehensive income		—		—		—			—			0.4			—		0.4
Issuance of common stock for share-based award compensation plans		229,972		—		0.3			—			—			—		0.3
Payroll taxes for deferred stock units		—		—		(17.7	)		—			—			—		(17.7	)
Common stock repurchased		—		—		—			(61.1	)		—			—		(61.1	)
Share-based compensation		—		—		31.4			—			—			—		31.4
Balance at December 2022		68,459,485		0.1		945.7			(769.0	)		(1.5	)		1,125.1		1,300.4
Net income		—		—		—			—			—			10.4		10.4
Other comprehensive income		—		—		—			—			0.4			—		0.4
Issuance of common stock for share-based award compensation plans		170,376		—		8.8			—			—			—		8.8
Payroll taxes for deferred stock units		—		—		(3.1	)		—			—			—		(3.1	)
Common stock repurchased		—		—		—			(25.6	)		—			—		(25.6	)
Share-based compensation		—		—		29.8			—			—			—