2014

Synaptics Reports First Quarter Fiscal 2014 Results Record September Quarter Revenue

- Revenue growth of 75% over prior year

- Operating profit up more than 3X over prior year

- Significant Mobile and Tablet Design Wins

- Entering Fingerprint ID market through proposed acquisition of Validity Sensors

SAN JOSE, Calif., Oct. 24, 2013 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its first quarter ended September 30, 2013. 

Net revenue of $222.6 million for the first quarter of fiscal 2014 was a record for a September quarter and increased 75% compared with $127.0 million for the comparable quarter last year. Net income for the first quarter of fiscal 2014 was $34.9 million, or $1.00 per diluted share, compared with net income of $6.1 million, or $0.18 per diluted share, for the comparable quarter last year. 

Non-GAAP net income for the first quarter of fiscal 2014 was $45.9 million, or $1.31 per diluted share. Non-GAAP net income was $12.7 million, or $0.37 per diluted share, for the first quarter of fiscal 2013. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.) 

"In addition to posting substantial revenue growth during the fiscal first quarter, we made strong progress on a number of fronts," stated Rick Bergman, President and CEO.  "We saw a growing number of devices deploy our on-cell and in-cell display integrated solutions, continued to gain traction in the China mobile market, and broadened our customer base in large touchscreens through key new design wins in tablets and touch-enabled notebooks.  Following a strong first quarter, the first half of the fiscal year is tracking according to plan, and we expect to post top-line growth in excess of 50% over the same period last year." 

"We recently announced Synaptics' entry into the fast growing fingerprint ID market through a definitive agreement to acquire Validity. We believe this acquisition reinforces our market leadership in human interface technology while significantly expanding our market opportunity," concluded Mr. Bergman.  

First Quarter 2014 Business Metrics

  • Revenue mix from mobile and PC products was approximately 73% and 27%, respectively.
  • Revenue from mobile products of $162.7 million was up 152% year-over-year and down 6% sequentially. Mobile products revenue includes all touchscreen and video display products.
  • Revenue from PC products totaled $59.9 million, a decrease of 4% year-over-year and an increase of 5% sequentially.
  • Gross margin was 49.1%, an increase of 140 basis points year-over-year.

Cash at September 30, 2013 was $331.6 million. Cash flow from operations for the first quarter was $28.9 million. The company used $50.0 million to repurchase 1.2 million shares of common stock.

Kathy Bayless, CFO, added, "The September quarter benefitted from greater strength in mobile revenue than anticipated based on the timing of customer channel fill ahead of the holiday season. Considering our backlog of approximately $117.0 million entering the typically front-end loaded December quarter, customer forecasts, and the resulting expected product mix, we anticipate revenue (exclusive of the impending closure of the acquisition of Validity) to be in the range of $192.0 million to $208.0 million for the second quarter, an increase of 34% to 45% on a year-over-year basis."

Earnings Call Information
The Synaptics first quarter fiscal 2014 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, October 24, 2013, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 1-877-941-1427 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 company's Web site at www.synaptics.com.

About Synaptics Incorporated
As a leading developer of human interface solutions which enhance the user experience, Synaptics provides the broadest touch solutions portfolio in the industry.  The ClearPad™ family supports touchscreen solutions for devices ranging from entry-level mobile phones to flagship premium smartphones, tablets, and notebook PCs.  The TouchPad™ family, including ClickPad™ and ForcePad™, is integrated into the majority of today's notebook PCs.  Synaptics' wide portfolio also includes ThinTouch™, supporting thin and light keyboard solutions, as well as key technologies for next generation touch-enabled video and display applications. 
(NASDAQ: SYNA) www.synaptics.com

Synaptics, ClearPad, TouchPad, ClickPad, ForcePad, ThinTouch, and the Synaptics logo are trademarks of Synaptics in the United States and/or other countries. All other marks are the property of their respective owners.

Use of Non-GAAP Financial Information
In evaluating its business, Synaptics considers and uses net income excluding share-based compensation and certain non-cash or non-recurring items as a supplemental measure of operating performance.  Net income excluding share-based compensation and certain non-cash or non-recurring items 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 net income excluding share-based compensation and certain non-cash 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 and certain non-cash or non-recurring items. Net income excluding share-based compensation and certain non-cash or non-recurring items 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. 

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 company's belief that it has made strong progress on a number of fronts, including the growing number of devices deployed with its on-cell and in-cell display integrated solutions, continuing to gain traction in the China mobile market, and broadening its customer base in large touchscreens through key new design wins in tablets and touch-enabled notebooks; the company's expectation that it will post top-line growth in the first half of the fiscal year in excess of 50% over the same period last year; the company's belief that its acquisition of Validity reinforces its market leadership in human interface technology while significantly expanding its market opportunity; the company's anticipated revenue for its second quarter.  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 Synaptics serves, (d) the success of Synaptics' customers' products that utilize Synaptics' product solutions, (e) the development and launch cycles of Synaptics' customers' products, (f) market pressures on selling prices, (g) changes in product mix, (h) the market acceptance of Synaptics' 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, 2013. All forward-looking statements are based on information available to Synaptics on the date hereof, and Synaptics assumes no obligation to update such statements.

For more information contact:

Jennifer Jarman
The Blueshirt Group
415-217-5866
jennifer@blueshirtgroup.com

(Tables to follow)

 



SYNAPTICS INCORPORATED

 CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)












September 30,


June 30,





2013


2013








Assets




Current assets:





Cash and cash equivalents     

$    331,572


$ 355,303


Accounts receivables, net of allowances of $883

153,939


148,454


Inventories                                                                              

57,293


49,948


Prepaid expenses and other current assets                           

7,212


6,715

Total current assets                                                                    

550,016


560,420








Property and equipment at cost, net        

61,225


58,035

Goodwill                                    

20,695


20,695

Purchased intangibles

12,848


13,110

Non-current auction rate securities

17,536


16,969

Other assets                                      

21,648


22,037

Total assets                                                

$    683,968


$ 691,266





Liabilities and stockholders' equity




Current liabilities:





Accounts payable                      

$     77,955


$  83,710


Accrued compensation                

15,074


23,728


Income taxes payable

15,098


10,751


Other accrued liabilities              

34,108


31,437

Total current liabilities                            

142,235


149,626








Notes payable

2,305


2,305

Other liabilities                                                                            

17,944


17,480








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;  







51,094,508 and 50,673,758 shares issued, and 32,493,672 and 







33,289,826 shares outstanding, respectively

51


51


Additional paid in capital

553,509


539,170


Less:  18,600,836 and 17,383,932 treasury shares, respectively, at cost

(510,157)


(460,160)


Accumulated other comprehensive income

7,150


6,802


Retained earnings

470,931


435,992

Total stockholders' equity                                                                

521,484


521,855

Total liabilities and stockholders' equity         

$    683,968


$ 691,266
















SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)













 

Three Months Ended






September 30,






2013


2012










Net revenue   


$   222,607


$   127,041


Cost of revenue    


113,328


66,471


Gross margin


109,279


60,570


Operating expenses







Research and development 


40,442


32,802



Selling, general, and administrative


21,124


18,908



Acquired intangibles amortization


262


240



Change in contingent consideration


258


287


Total operating expenses   


62,086


52,237










Operating income    


47,193


8,333


Interest income


211


218


Non-cash interest income


219


-


Interest expense           


(4)


(4)


Income before provision for income taxes 


47,619


8,547


Provision for income taxes   


12,680


2,494


Net income     


$    34,939


$     6,053










Net income per share:







Basic     


$      1.06


$      0.18



Diluted     


$      1.00


$      0.18










Shares used in computing net income per share:







Basic        


32,958


32,941



Diluted      


35,020


34,014










 

SYNAPTICS INCORPORATED

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)










Three Months Ended




September 30,




2013


2012







GAAP gross margin

$109,279


$60,570


Share-based compensation

254


243

Non-GAAP gross margin

$109,533


$60,813













GAAP gross margin - percentage of revenue

49.1%


47.7%


Share-based compensation - percentage of revenue

0.1%


0.1%

Non-GAAP gross margin - percentage of revenue

49.2%


47.8%













GAAP research and development expense

$ 40,442


$32,802


Share-based compensation

(3,927)


(3,911)

Non-GAAP research and development expense

$ 36,515


$28,891













GAAP selling, general, and administrative expense

$ 21,124


$18,908


Acquisition related costs

(1,031)


-


Share-based compensation

(2,861)


(4,313)

Non-GAAP selling, general, and administrative expense

$ 17,232


$14,595













GAAP operating income

47,193


$ 8,333


Acquisition related costs

1,031


-


Acquired intangibles amortization

262


240


Change in contingent consideration

258


287


Share-based compensation

7,042


8,467

Non-GAAP operating income

$ 55,786


$17,327













GAAP net income

$ 34,939


$ 6,053


Non-cash interest income

(219)


-


Acquisition related costs

1,031


-


Acquired intangibles amortization

262


240


Change in contingent consideration

258


287


Share-based compensation

7,042


8,467


Tax adjustments

2,601


(2,304)

Non-GAAP net income

$ 45,914


$12,743













GAAP net income per share - diluted

$   1.00


0.18


Non-cash interest income

(0.01)


-


Acquisition related costs

0.03


-


Acquired intangibles amortization

0.01


-


Change in contingent consideration

0.01


0.01


Share-based compensation

0.20


0.25


Tax adjustments

0.07


(0.07)

Non-GAAP net income per share - diluted

$   1.31


$  0.37

 

 

SOURCE Synaptics, Inc.



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