Synaptics Reports Second Quarter Fiscal 2013 Results - Revenue up 13% sequentially, driven by strength of mobile products

- Repurchased 3.5% of shares outstanding

SANTA CLARA, Calif., Jan. 24, 2013 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its second quarter ended December 31, 2012. 

Net revenue for the second quarter of fiscal 2013 was $143.0 million compared with $145.5 million for the comparable quarter last year.  Net income for the second quarter of fiscal 2013 was $11.1 million, or $0.33 per diluted share, compared with net income of $17.4 million, or $0.51 per diluted share, for the comparable quarter last year. 

Non-GAAP net income for the second quarter of fiscal 2013 was $17.7 million, or $0.53 per diluted share, compared with non-GAAP net income of $23.0 million, or $0.68 per diluted share, for the second quarter of fiscal 2012.  (See attached table for a reconciliation of GAAP to non-GAAP results.) 

"Second quarter revenue exceeded the high end of our guidance range, reflecting better than anticipated revenue from mobile phone touchscreen applications, partially offset by lower than expected PC revenue," stated Rick Bergman, President and CEO.  "Based on our strong product line-up, Synaptics is executing very well across our key markets, and we believe our ongoing technology roadmap positions us for continued success across future product generations.  We look forward to a return to year-over-year revenue growth in the third fiscal quarter."

Second Quarter 2013 Business Metrics

  • Revenue mix from mobile and PC products was approximately 57% and 43%, respectively.
  • Revenue from mobile products totaled $81.6 million and was up 4% year-over-year.  Mobile products revenue includes all touchscreen and video display products.
  • Revenue from PC products totaled $61.4 million, a decrease of 8% year-over-year.
  • Gross margin was 48.3%, an increase of 110 basis points year-over-year.
  • Net income reflects additional operating expenses associated with the company's recent acquisitions, as previously indicated.

Cash at December 31, 2012 was $292.5 million.  Cash flow from operations for the second quarter of fiscal 2013 was $15.3 million.  The company used $28.7 million to repurchase 1,155,299 shares of common stock and $5.0 million for a ThinTouch™ initial earn-out payment. 

Kathy Bayless, CFO, added, "Considering our backlog of approximately $79.0 million, customer forecasts, and the resulting expected product mix, we anticipate revenue to be in the range of $140.0 million to $148.0 million for the March quarter, an increase of 6% to 12% on a year-over-year basis.  We expect revenue from mobile products to be the primary growth driver."

Earnings Call Information
The Synaptics second quarter fiscal 2013 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 24, 2013, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 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 based on its strong product line-up it is executing very well across its key markets and that its ongoing technology roadmap positions it for continued success across future product generations; the company's expectation that it will return to year-over-year revenue growth in the third fiscal quarter; and the company's anticipated revenue for the March quarter, including its expectation that revenue from mobile products will be the primary growth driver.  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, 2012. 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

 

SYNAPTICS INCORPORATED

 CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)














December 31,


June 30,






2012


2012









Assets







Current assets:






Cash and cash equivalents                                                                 

$   292,531


$ 305,005


Receivables, net of allowances of $567

99,052


104,140


Inventories                                                                              

32,124


31,667


Prepaid expenses and other current assets                                                     

5,906


5,365

Total current assets                                                                    

429,613


446,177









Property and equipment, net                                                               

42,193


24,903

Goodwill                                                                             

20,695


18,995

Purchased intangibles

13,634


12,800

Non-current auction rate securities

15,009


15,321

Other assets                                                                                 

23,263


23,309

Total assets                                                                              

$   544,407


$ 541,505





Liabilities and stockholders' equity




Current liabilities:





Accounts payable                                                                          

$    53,027


$  55,220


Accrued compensation                                                                      

15,542


12,642


Income taxes payable

4,829


11,221


Other accrued liabilities                                                                    

33,927


26,515

Total current liabilities                                                                  

107,325


105,598









Convertible senior subordinated notes

2,305


2,305

Other liabilities                                                                            

32,669


36,812









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;  







49,039,675 and 48,680,348 shares issued, and  32,015,143 and 







32,896,256 shares outstanding, respectively

49


49


Additional paid in capital

489,162


471,569


Less:  17,024,532 and 15,784,092 treasury shares, respectively, at cost

(445,165)


(413,885)


Retained earnings

354,226


337,059


Accumulated other comprehensive income

3,836


1,998

Total stockholders' equity                                                                

402,108


396,790

Total liabilities and stockholders' equity                                              

$   544,407


$ 541,505






SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)



























Three Months Ended


Six Months Ended





December 31,


December 31,





2012


2011


2012


2011












Net revenue                                                 


$   143,040


$   145,470


$   270,081


$   278,916

Cost of revenue (1)                                


74,010


76,747


140,481


148,933

Gross margin                                                  


69,030


68,723


129,600


129,983

Operating expenses










Research and development (1)                           


34,257


29,837


67,059


58,063


Selling, general, and administrative (1)           


19,008


17,721


37,916


34,430


Acquired intangibles amortization


261


-


501


-


Change in contingent consideration


576


-


863


-

Total operating expenses                                       

54,102


47,558


106,339


92,493












Operating income                                   


14,928


21,165


23,261


37,490

Interest income


225


251


443


451

Interest expense                                                

(5)


(5)


(9)


(9)

Impairment (loss)/recovery on investments, net


-


(7)


-


13

Income before income taxes                 


15,148


21,404


23,695


37,945

Provision for income taxes (2)                                    

4,034


4,021


6,528


7,547

Net income                                         


$    11,114


$    17,383


$    17,167


$    30,398












Net income per share:










Basic                                                      

$      0.34


$      0.53


$      0.52


$      0.93


Diluted                                                     

$      0.33


$      0.51


$      0.51


$      0.89












Shares used in computing net income per share:










Basic                                                          

32,478


32,569


32,710


32,717


Diluted                                                      

33,313


34,005


33,739


33,972


































(1) Includes share-based compensation charges of:





















Cost of revenue


$       198


$       275


$       441


$       590



Research and development


3,879


3,899


7,790


7,440



Selling, general, and administrative


3,929


4,326


8,242


8,636





$     8,006


$     8,500


$    16,473


$    16,666












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























$     2,179


$     2,865


$     4,397


$     4,880


































Non-GAAP net income per share:











Basic


$      0.54


$      0.71


$      0.93


$      1.29



Diluted


$      0.53


$      0.68


$      0.90


$      1.24





SYNAPTICS INCORPORATED

Reconciliation of Non-GAAP Net Income and Net Income Per Share

(In thousands, except per share data)

(Unaudited)

















































Three Months Ended


Six Months Ended





December 31,


December 31,





2012


2011


2012


2011












Net income - as reported


$ 11,114


$ 17,383


$ 17,167


$ 30,398












Non-GAAP adjustments (net of tax):










Net gain on investments


-


7


-


(13)


Acquired intangibles amortization


167


-


321


-


Change in contingent consideration


576


-


863


-


Share-based compensation


5,827


5,635


12,076


11,786

Net income - non-GAAP


$ 17,684


$ 23,025


$ 30,427


$ 42,171












Net income per share - non-GAAP:










Basic


$   0.54


$   0.71


$   0.93


$   1.29


Diluted


$   0.53


$   0.68


$   0.90


$   1.24

SOURCE Synaptics



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