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2014

Synaptics Reports Results for First Quarter of Fiscal 2011

-- Record revenue, up 28% year-over-year

-- Revenue from mobile touchscreen applications more than doubles year-over-year, reaching new high

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SANTA CLARA, Calif., Oct. 21 /PRNewswire-FirstCall/ -- Synaptics (Nasdaq: SYNA), a leading developer of human interface solutions for mobile computing, communications, and entertainment devices, today reported financial results for its first fiscal quarter ended September 30, 2010.  

Net revenue of $153.2 million for the first quarter of fiscal 2011 was a record, an increase of 28% compared with $119.6 million in the comparable quarter last year, and an increase of 5% compared with $145.8 million in the prior quarter.  Net income for the first quarter of fiscal 2011 was $18.7 million, or $0.52 per diluted share, compared with net income of $9.8 million, or $0.27 per diluted share, in the comparable quarter last year and net income of $19.3 million, or $0.54 per diluted share, in the fourth quarter of fiscal 2010.  

Non-GAAP net income for the first quarter of fiscal 2011 was $24.2 million, or $0.67 per diluted share, compared with net income of $17.2 million, or $0.48 per diluted share, for the first quarter of fiscal 2010 and net income of $24.8 million, or $0.70 per diluted share, for the fourth quarter of fiscal 2010.  (See attached table for a reconciliation of GAAP to non-GAAP results.)  

“Fiscal 2011 is off to a strong start as we achieved record revenue during the first quarter,” stated Russ Knittel, Interim President and CEO. "Revenue from the PC market was weaker than anticipated, reflecting the widely reported softness in consumer notebook demand, while revenue from mobile touchscreen applications reached a new record level and more than doubled year-over-year.  The broad based adoption of touch technology in consumer electronics is just beginning, and we are making the necessary investments to meet the expanding opportunities in front of us.”  

PC revenue of $78.9 million represented 51% of total revenue for the first quarter and increased 6% over the comparable quarter last year.  Non-PC revenue of $74.3 million increased 65% from the comparable quarter last year and comprised 49% of total revenue for the quarter.  Mobile phone applications comprised 47% of the Company’s revenue, and the number of mobile phone models shipping with Synaptics’ touchscreen solutions reached a new high.  

Kathy Bayless, CFO, added, "Considering our backlog of approximately $81 million entering the December quarter, expected product mix, and customer forecasts, we anticipate record revenue of $154 million to $162 million, representing an increase of 16% to 22% over the comparable quarter last year.  While we are mindful of the current uncertainty relative to the consumer notebook market and the broader economic environment, we currently expect another quarter of strong demand for our mobile touchscreen solutions.”  

Earnings Call Information

The Synaptics first quarter fiscal 2011 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, October 21, 2010, during which the Company will provide forward-looking information. To participate on the live call, analysts and investors should dial 877-941-8416 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

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(TM), Synaptics' flagship product, is integrated into a majority of today's 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, Calif. www.synaptics.com  

NOTE: Synaptics, TouchPad™, and the Synaptics logo are trademarks of Synaptics in the United States and/or other countries.

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 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, 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 non-cash 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 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 Synaptics’ anticipated revenue for the second quarter of fiscal 2011, Synaptics’ assessment of expanding broad-based adoption of touch technology in consumer electronics, Synaptics’ expectations regarding expanding opportunities for touch technology in consumer electronics, and Synaptics’ expectations for increased revenue for mobile touchscreen applications.  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)














September 30,


June 30,






2010


2010









Assets




Current assets:





Cash and cash equivalents

$              230,620


$              209,858


Receivables, net of allowances of $616 and $500, respectively

115,960


101,509


Inventories

15,114


18,667


Prepaid expenses and other current assets

4,686


4,471

Total current assets

366,380


334,505









Property and equipment, net

27,110


25,821

Goodwill

1,927


1,927

Non-current auction rate securities

28,359


28,012

Other assets

26,013


24,414

Total assets

$              449,789


$              414,679





Liabilities and stockholders' equity




Current liabilities:





Accounts payable

$                64,035


$                65,618


Accrued compensation

10,163


11,330


Income taxes payable

13,104


10,061


Other accrued liabilities

20,574


18,962

Total current liabilities

107,876


105,971









Convertible senior subordinated notes

2,305


2,305

Other liabilities

20,708


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; 60,000,000 shares authorized; 45,414,898 and







44,891,834 shares issued, 34,543,585 and 34,020,521







shares outstanding, respectively

45


45


Additional paid in capital

360,917


347,764


Less: 10,871,313  treasury shares, at cost

(281,932)


(281,932)


Retained earnings

237,818


219,119


Accumulated other comprehensive income

2,052


1,515

Total stockholders' equity

318,900


286,511

Total liabilities and stockholders' equity

$              449,789


$              414,679




SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)










Three Months Ended




September 30,




2010


2009







Net revenue

$ 153,185


$ 119,592

Cost of revenue (1)

90,357


71,270

Gross margin

62,828


48,322

Operating expenses





Research and development (1)

24,920


19,975


Selling, general, and administrative (1)

15,548


13,764

Total operating expenses

40,468


33,739







Operating income

22,360


14,583

Interest income

211


331

Interest expense

(4)


(1,423)

Impairment (loss)/recovery on investments, net

10


(443)

Income before income taxes

22,577


13,048

Provision for income taxes (2)

3,878


3,244

Net income

$   18,699


$     9,804







Net income per share:





Basic

$       0.54


$       0.29


Diluted

$       0.52


$       0.27







Shares used in computing net income per share:





Basic

34,402


34,341


Diluted

35,900


35,968



















(1) Includes share-based compensation charges of:












Cost of revenue

$        308


$        448



Research and development

3,427


2,798



Selling, general, and administrative

4,171


3,802




$     7,906


$     7,048







(2) Includes tax benefit for share-based compensation charges of:













$     2,363


$     2,201



















Non-GAAP net income per share:






Basic

$       0.70


$       0.50



Diluted

$       0.67


$       0.48





SYNAPTICS INCORPORATED

Computation of Basic and Diluted Net Income Per Share

(in thousands, except per share data)

(Unaudited)










Three Months Ended




September 30,




2010


2009







Numerator:





Basic and diluted net income

$ 18,699


$   9,804







Denominator:





Shares, basic

34,402


34,341


Effect of dilutive share-based awards

1,498


1,627


Shares, diluted

35,900


35,968







Net income per share:





Basic

$     0.54


$     0.29


Diluted

$     0.52


$     0.27

























Computation of non-GAAP basic and diluted net income per share (unaudited):










Numerator:





Reported net income

$ 18,699


$   9,804


Non-GAAP adjustments (net of tax):






Net (gain)/loss on investments

(10)


443



Non-cash interest expense

-


709



Discrete tax items

-


1,445



Share-based compensation

5,543


4,847


Non-GAAP basic and diluted net income

$ 24,232


$ 17,248







Non-GAAP net income per share:





Basic

$     0.70


$     0.50


Diluted

$     0.67


$     0.48



For more information contact:


         Jennifer Jarman

         The Blueshirt Group

         415-217-7722

         jennifer@blueshirtgroup.com



SOURCE Synaptics Incorporated



RELATED LINKS
http://www.synaptics.com

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