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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 25, 2023
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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)
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Delaware |
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77-0118518 |
(State or other jurisdiction of incorporation or organization) |
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(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:
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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.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
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Page |
Part I. Financial Information |
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Item 1. |
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Condensed Consolidated Financial Statements (Unaudited): |
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Condensed Consolidated Balance Sheets—March 25, 2023 and June 25, 2022 |
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3 |
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Condensed Consolidated Statements of Income—Three and Nine Months Ended March 25, 2023 and March 26, 2022 |
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4 |
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Condensed Consolidated Statements of Comprehensive Income—Three and Nine Months Ended March 25, 2023 and March 26, 2022 |
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5 |
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Condensed Consolidated Statements of Stockholders’ Equity—Three and Nine Months Ended March 25, 2023 and March 26, 2022 |
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6 |
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Condensed Consolidated Statements of Cash Flows—Nine Months Ended March 25, 2023 and March 26, 2022 |
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8 |
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Notes to Condensed Consolidated Financial Statements |
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9 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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24 |
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Item 3. |
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Quantitative and Qualitative Disclosures About Market Risk |
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32 |
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Item 4. |
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Controls and Procedures |
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32 |
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Part II. Other Information |
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Item 1. |
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Legal Proceedings |
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33 |
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Item 1A. |
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Risk Factors |
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33 |
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Item 2. |
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Unregistered Sales of Equity Securities and Use of Proceeds |
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34 |
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Item 6. |
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Exhibits |
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35 |
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Signatures |
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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)
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March |
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June |
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2023 |
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2022 |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
898.0 |
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$ |
824.0 |
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Short-term investments |
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35.9 |
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52.0 |
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Accounts receivable, net |
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218.2 |
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322.1 |
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Inventories, net |
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147.8 |
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169.7 |
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Prepaid expenses and other current assets |
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34.4 |
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35.6 |
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Total current assets |
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1,334.3 |
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1,403.4 |
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Property and equipment at cost, net of accumulated depreciation of $135.3 and $122.8 at
March 2023 and June 2022, respectively |
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69.0 |
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62.9 |
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Goodwill |
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816.4 |
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806.6 |
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Acquired intangibles, net |
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331.4 |
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390.0 |
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Right-of-use assets |
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51.2 |
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61.2 |
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Non-current other assets |
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112.4 |
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134.0 |
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$ |
2,714.7 |
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$ |
2,858.1 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current Liabilities: |
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Accounts payable |
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$ |
60.8 |
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$ |
141.8 |
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Accrued compensation |
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43.6 |
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90.6 |
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Income taxes payable |
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64.8 |
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79.7 |
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Other accrued liabilities |
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93.7 |
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145.3 |
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Current portion of long-term debt |
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6.0 |
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6.0 |
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Total current liabilities |
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268.9 |
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463.4 |
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Long-term debt |
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972.9 |
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975.7 |
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Other long-term liabilities |
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151.8 |
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152.6 |
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Total liabilities |
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1,393.6 |
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1,591.7 |
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Stockholders' Equity: |
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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 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
29.8 |
|
Balance at March 2023 |
|
|
68,629,861 |
|
|
$ |
|
