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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.

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

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. ☐

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)

3


 

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)

4


 

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)

5


 

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