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8-K - FORM 8-K - SYNAPTICS Inc | c15798e8vk.htm |
Exhibit
99.1
For more information contact: Jennifer Jarman The Blueshirt Group 415-217-5866 jennifer@blueshirtgroup.com |
Synaptics Reports Results for Third Quarter of Fiscal 2011
| Record March quarter revenue, up 23% year-over-year |
| Revenue from mobile touchscreen applications more than doubles year-to-date
versus comparable period last year |
Santa Clara, CA April 21, 2011 Synaptics (NASDAQ: SYNA), a leading developer of human
interface solutions for mobile computing, communications, and entertainment devices, today reported
financial results for its third fiscal quarter ended March 31, 2011.
Net revenue for the third quarter of fiscal 2011 was $142.4 million, an increase of 23% over the
$116.2 million for the comparable quarter last year. Net income for the third quarter of fiscal
2011 was $13.5 million, or $0.38 per diluted share, compared with net income of $11.6 million, or
$0.33 per diluted share, for the comparable quarter last year.
Non-GAAP net income for the third quarter of fiscal 2011 was $19.5 million, or $0.55 per diluted
share, compared with non-GAAP net income of $16.3 million, or $0.46 per diluted share, for the
third quarter of fiscal 2010. (See attached table for a reconciliation of GAAP to non-GAAP
results.)
We achieved record revenue for the March quarter and for the first nine months of fiscal 2011, as
revenue from mobile applications more than doubled year-to-date over the comparable period last
year, stated Russ Knittel, Interim President and CEO. During the third quarter, we continued to
experience strong demand for our touchscreen solutions, partially offset by lower than expected
revenue from touchpad applications, reflecting the general softness in consumer notebook demand.
We also generated our first revenue from the emerging tablet category during the quarter.
Mr. Knittel added, Our current outlook assumes some near-term revenue headwinds from consumer
notebook market dynamics and, as previously indicated, the continuing mix shift within our
delivery model for touchscreen solutions. However, with that mix shift we also expect our gross
margin percentage to increase, providing additional operating leverage to our business model.
Moving forward, we are very pleased with the level of interest we have seen in our expanded product
portfolio. Design activity is robust across our customer base, and we are very well-positioned for
continued success in our long-term growth markets.
Non-PC revenue of $80.7 million represented 57% of total revenue for the third quarter, an increase
of 87% over the comparable quarter last year. Non-PC revenue consisted almost entirely of revenue
from mobile phone applications, reflecting continued strong unit growth. PC revenue of $61.7
million decreased 15% from the comparable quarter last year and represented 43% of total revenue
for the quarter.
Cash at March 31, 2011 totaled $246.3 million. Cash flow from operations for the quarter was $21.0
million.
Kathy Bayless, CFO, added, Considering our backlog of approximately $94 million, customer
forecasts, and the resulting expected product mix, we anticipate revenue to be in the range of $138
million to $146 million for the June quarter. Our outlook reflects a sequential increase in PC
revenue compared to the weaker than expected March quarter, offset by lower revenue from mobile
applications due to changes in product mix.
Earnings Call Information
The Synaptics third quarter fiscal 2011 teleconference and webcast is scheduled to begin at 2:00
p.m., Pacific Time, on Thursday, April 21, 2011, during which the company will provide
forward-looking information. To participate on the live call, analysts and investors should dial
877-941-2068 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 companys
Web site at www.synaptics.com.
About Synaptics Incorporated
Synaptics (NASDAQ: SYNA) is a leading developer of human interface solutions for the mobile
computing, communications, and entertainment industries. The company creates interface solutions
for a variety of devices including notebook PCs, PC peripherals, digital music players, and mobile
phones. The TouchPad, Synaptics flagship product, is integrated into a majority of todays
notebook computers. Consumer electronics and computing manufacturers use Synaptics solutions to
enrich the interaction between humans and intelligent devices through improved usability,
functionality, and industrial design. The company is headquartered in Santa Clara, California.
www.synaptics.com
Use of Non-GAAP Financial Information
In evaluating its business, Synaptics considers and uses net income per share excluding share-based
compensation, non-cash interest charges, and unusual or non-recurring items as a supplemental
measure of operating performance. Net income excluding share-based compensation, non-cash interest
charges, and unusual or non-recurring items is not a measurement of the companys 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, non-cash interest charges, and
unusual 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, non-cash interest charges, and unusual or non-recurring
items. Net income excluding share-based compensation, non-cash interest charges, and unusual or
non-recurring items has limitations as an analytical tool and should not be considered in isolation
or as a substitute for the companys GAAP net income. The principal limitations of this measure
are that it does not reflect the companys actual
expenses and may thus have the effect of inflating its net income and net income per share.
Forward-Looking Statements
This press release contains forward-looking statements about Synaptics, as that term is defined
under the federal securities laws. Synaptics intends such forward-looking statements to be subject
to the safe harbor created by those laws. Such forward-looking statements include, but are not
limited to, statements regarding the companys assessment of strong demand for touchscreen
solutions; the companys expectations of the near-term revenue impact of the consumer notebook
market dynamics and mix shift within its delivery model for touchscreen solutions; the companys
expectation that its gross margin percentage will increase as a result of the mix shift in its
delivery model for touchscreen solutions; the companys belief that it is very well-positioned for
continued success in its long-term growth markets; the companys anticipated revenue for the fourth
quarter of fiscal 2011; the companys expectations of its June quarter revenue reflecting an
increase in PC revenue compared with its March quarter offset by lower revenue from mobile
applications due to changes in product mix. Synaptics cautions that these statements are
qualified by important factors that could cause actual results to differ materially from those
reflected by the forward-looking statements contained herein. Such factors include, but are not
limited to, (a) demand for Synaptics products, (b) market demand for OEMs products using
Synaptics solutions, (c) changing market demand trends in the markets it serves, (d) the success
of our customers products that utilize our product solutions, (e) the development and launch
cycles of our customers products, (f) market pressures on selling prices, (g) changes in product
mix, (h) the market acceptance of our product solutions compared with competitors solutions, (i)
general economic conditions, including consumer confidence and demand, and (j) other risks as
identified from time to time in Synaptics SEC reports, including Quarterly Reports on Form 10-Q
and the Annual Report on Form 10-K for the fiscal year ended June 30, 2010. All forward-looking
statements are based on information available to Synaptics on the date hereof, and Synaptics
assumes no obligation to update such statements.
(Tables to Follow)
SYNAPTICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
March 31, | June 30, | |||||||
2011 | 2010 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 246,285 | $ | 209,858 | ||||
Receivables, net of allowances of $709
and $500, respectively |
97,661 | 101,509 | ||||||
Inventories |
32,624 | 18,667 | ||||||
Prepaid expenses and other current assets |
4,438 | 4,471 | ||||||
Total current assets |
381,008 | 334,505 | ||||||
Property and equipment, net |
27,260 | 25,821 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Non-current auction rate securities |
29,078 | 28,012 | ||||||
Other assets |
27,037 | 24,414 | ||||||
Total assets |
$ | 466,310 | $ | 414,679 | ||||
Liabilities and stockholders equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 60,107 | $ | 65,618 | ||||
Accrued compensation |
11,703 | 11,330 | ||||||
Income taxes payable |
6,293 | 10,061 | ||||||
Other accrued liabilities |
20,756 | 18,962 | ||||||
Total current liabilities |
98,859 | 105,971 | ||||||
Convertible senior subordinated notes |
2,305 | 2,305 | ||||||
Other liabilities |
20,443 | 19,892 | ||||||
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; 46,500,890 and 44,891,834 shares issued, 34,178,397 and 34,020,521 shares outstanding, respectively |
47 | 45 | ||||||
Additional paid in capital |
394,895 | 347,764 | ||||||
Less: 12,322,493 and 10,871,313 treasury
shares, respectively, at cost |
(322,142 | ) | (281,932 | ) | ||||
Retained earnings |
268,992 | 219,119 | ||||||
Accumulated other comprehensive income |
2,911 | 1,515 | ||||||
Total stockholders equity |
344,703 | 286,511 | ||||||
Total liabilities and stockholders equity |
$ | 466,310 | $ | 414,679 | ||||
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net revenue |
$ | 142,406 | $ | 116,212 | $ | 455,172 | $ | 369,127 | ||||||||
Cost of revenue (1) |
84,790 | 68,910 | 269,690 | 219,672 | ||||||||||||
Gross margin |
57,616 | 47,302 | 185,482 | 149,455 | ||||||||||||
Operating expenses |
||||||||||||||||
Research and development (1) |
25,956 | 21,212 | 77,516 | 63,629 | ||||||||||||
Selling, general, and
administrative (1) |
17,244 | 14,635 | 51,750 | 44,974 | ||||||||||||
Total operating expenses |
43,200 | 35,847 | 129,266 | 108,603 | ||||||||||||
Operating income |
14,416 | 11,455 | 56,216 | 40,852 | ||||||||||||
Interest income |
242 | 200 | 679 | 772 | ||||||||||||
Interest expense |
(4 | ) | (4 | ) | (13 | ) | (2,395 | ) | ||||||||
Impairment (loss)/recovery on
investments, net |
10 | | 20 | (443 | ) | |||||||||||
Income before income taxes |
14,664 | 11,651 | 56,902 | 38,786 | ||||||||||||
Provision for income taxes (2) |
1,168 | 45 | 7,029 | 5,149 | ||||||||||||
Net income |
$ | 13,496 | $ | 11,606 | $ | 49,873 | $ | 33,637 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.40 | $ | 0.35 | $ | 1.46 | $ | 0.99 | ||||||||
Diluted |
$ | 0.38 | $ | 0.33 | $ | 1.40 | $ | 0.95 | ||||||||
Shares used in computing net
income per share: |
||||||||||||||||
Basic |
33,992 | 33,526 | 34,118 | 33,826 | ||||||||||||
Diluted |
35,346 | 35,095 | 35,565 | 35,371 | ||||||||||||
(1) Includes share-based
compensation charges of: |
||||||||||||||||
Cost of revenue |
$ | 355 | $ | 553 | $ | 1,032 | $ | 1,816 | ||||||||
Research and development |
3,377 | 3,328 | 10,129 | 10,772 | ||||||||||||
Selling, general, and
administrative |
4,619 | 4,314 | 14,547 | 14,751 | ||||||||||||
$ | 8,351 | $ | 8,195 | $ | 25,708 | $ | 27,339 | |||||||||
(2) Includes tax benefit
for share-based
compensation charges of: |
||||||||||||||||
$ | 2,347 | $ | 1,735 | $ | 7,426 | $ | 7,042 | |||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.57 | $ | 0.48 | $ | 2.03 | $ | 1.63 | ||||||||
Diluted |
$ | 0.55 | $ | 0.46 | $ | 1.94 | $ | 1.56 | ||||||||
SYNAPTICS INCORPORATED
Computation of Basic and Diluted Net Income Per Share
(in thousands, except per share data)
(Unaudited)
Computation of Basic and Diluted Net Income Per Share
(in thousands, except per share data)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Numerator: |
||||||||||||||||
Basic and diluted
net income |
$ | 13,496 | $ | 11,606 | $ | 49,873 | $ | 33,637 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
33,992 | 33,526 | 34,118 | 33,826 | ||||||||||||
Effect of dilutive
share-based awards |
1,354 | 1,569 | 1,447 | 1,545 | ||||||||||||
Shares, diluted |
35,346 | 35,095 | 35,565 | 35,371 | ||||||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.40 | $ | 0.35 | $ | 1.46 | $ | 0.99 | ||||||||
Diluted |
$ | 0.38 | $ | 0.33 | $ | 1.40 | $ | 0.95 | ||||||||
Computation of non-GAAP
basic and diluted net
income per share (unaudited): |
||||||||||||||||
Numerator: |
||||||||||||||||
Reported net income |
$ | 13,496 | $ | 11,606 | $ | 49,873 | $ | 33,637 | ||||||||
Non-GAAP adjustments
(net of tax): |
||||||||||||||||
Non-recurring CEO
resignation costs |
| | 1,006 | | ||||||||||||
Net (gain)/loss on
investments |
(10 | ) | | (20 | ) | 443 | ||||||||||
Non-cash interest expense |
| | | 1,192 | ||||||||||||
Discrete tax items |
| (1,815 | ) | | (370 | ) | ||||||||||
Share-based compensation |
6,004 | 6,460 | 18,282 | 20,297 | ||||||||||||
Non-GAAP basic and
diluted net income |
$ | 19,490 | $ | 16,251 | $ | 69,141 | $ | 55,199 | ||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.57 | $ | 0.48 | $ | 2.03 | $ | 1.63 | ||||||||
Diluted |
$ | 0.55 | $ | 0.46 | $ | 1.94 | $ | 1.56 | ||||||||