SYNAPTICS INCORPORATED 
By SAN JOSE, Calif., Jan. 23, 2014 /PRNewswire/ -- Synaptics Inc. (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its second quarter ended December 31, 2013.
Net revenue for the second quarter of fiscal 2014 was $205.8 million, an increase of 44% compared with $143.0 million for the comparable quarter last year. Net income for the second quarter of fiscal 2014 was $17.3 million, compared with net income of $11.1 million for the comparable quarter last year. Diluted earnings per share for the second quarter of fiscal 2014 was $0.48, an increase of 45% compared with $0.33 for the comparable quarter last year.
Non-GAAP net income for the second quarter of fiscal 2014 was $31.1 million, compared with non-GAAP net income of $17.7 million for the comparable quarter last year. Diluted earnings per share for the second quarter of fiscal 2014 was $0.86, an increase of 62% compared with $0.53 for the second quarter of fiscal 2013. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)
"Excluding the impact of the acquisition of Validity, which closed in early November, our financial performance for the December quarter was above the mid-point of our guidance as we experienced strong year-over-year revenue growth in touchscreen and touchpad products," stated Rick Bergman, President and CEO. "As we enter the second half of fiscal 2014, we expect to benefit from continued strong organic growth, further augmented by growing contributions from our acquisitions and new product innovations. In addition, we are very excited with the progress of our new Fingerprint ID business and expect the acquisition to be accretive by the end of the fiscal year, earlier than previously anticipated."
Second Quarter 2014 Business Metrics
-- Revenue mix from mobile and PC products was approximately 65% and 35%,
respectively. Fingerprint ID products have been classified according to
type of device.
-- Revenue from mobile products of $133.6 million was up 64%
year-over-year. Mobile products revenue includes all touchscreen, video
display, and applicable fingerprint ID products.
-- Revenue from PC products totaled $72.2 million, an increase of 17%
year-over-year.
-- GAAP earnings per share reflects the impact of additional operating
expenses, including acquisition related costs and shares issued in
connection with the company's recent acquisition of Validity Sensors,
Inc., which closed on November 7, 2013.
Cash at December 31, 2013 was $369.4 million. In the first half of fiscal 2014, cash flow from operations was $85.8 million, and the company used $70.3 million to repurchase of approximately 1.7 million shares of common stock.
Kathy Bayless, CFO, added, "Considering our backlog, customer forecasts, and the resulting expected product mix, we anticipate revenue to be in the range of $180 million to $200 million for the March quarter. The March quarter outlook reflects seasonality, with incremental revenue from our new Fingerprint ID products."
Earnings Call Information
The Synaptics second quarter fiscal 2014 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 23, 2014, during which the company will provide forward-looking information. Analysts and investors should dial 1-877-941-1427 at least ten minutes prior to the call to participate. Synaptics will also offer a live and archived webcast of the conference call, accessible from the "Investor Relations" section of the company's website at www.synaptics.com.
About Synaptics Incorporated
As a leading developer of human interface solutions which enhance the user experience, Synaptics provides the broadest 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(TM) family, including ClickPad(TM) and ForcePad®, is integrated into the majority of today's notebook PCs. LiveFlex® fingerprint sensor technology enables authentication, mobile payments, and touch-based navigation for smartphones, tablets, and notebook computers. 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.
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 that involve risks and uncertainties. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify these statements by the fact that they do not relate strictly to historical or current facts and may include words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe" and other words and terms of similar meaning. All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements which reflect estimates and assumptions made by our management, all of which are difficult to predict and many of which are beyond our control, including statements related to our target business model, future performance, and revenue growth. Although we believe our estimates and assumptions to be reasonable, they are subject to a number of risks and uncertainties beyond our control and may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this press release are not guarantees of future performance, and actual results may differ materially from those anticipated or implied in the forward-looking statements due to various factors, including those factors identified from time to time in our Form 10-K for the fiscal year ended June 30, 2013, and our other current and periodic reports filed with the SEC. All forward-looking statements speak only as of the date of this press release. We do not intend to publicly update or revise any forward-looking statements as a result of new information or future events or otherwise, except as required by law. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.
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)
December 31, June 30,
2013 2013
---- ----
Assets
Current assets:
Cash and cash equivalents $369,424 $355,303
Accounts receivables, net of allowances of $883 133,022 148,454
Inventories 51,746 49,948
Prepaid expenses and other current assets 18,885 6,715
------ -----
Total current assets 573,077 560,420
Property and equipment at cost, net 64,666 58,035
Goodwill 59,670 20,695
Purchased intangibles 87,391 13,110
Non-current auction rate securities 18,260 16,969
Other assets 19,632 22,037
------ ------
Total assets $822,696 $691,266
======== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $68,578 $83,710
Accrued compensation 22,833 23,728
Income taxes payable 9,057 10,751
Notes payable 2,305 -
Current portion of contingent consideration 13,099 -
Other accrued liabilities 34,565 31,437
------ ------
Total current liabilities 150,437 149,626
Notes payable - 2,305
Other liabilities 47,260 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;
54,019,279 and 50,673,758 shares issued, and 34,971,568 and
33,289,826 shares outstanding, respectively 54 51
Additional paid in capital 659,482 539,170
Less: 19,047,711 and 17,383,932 treasury
shares, respectively, at cost (530,422) (460,160)
Accumulated other comprehensive income 7,620 6,802
Retained earnings 488,265 435,992
------- -------
Total stockholders' equity 624,999 521,855
------- -------
Total liabilities and stockholders' equity $822,696 $691,266
======== ========
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Six Months
Ended Ended
December 31, December 31,
------------ ------------
2013 2012 2013 2012
---- ---- ---- ----
Net revenue $205,763 $143,040 $428,370 $270,081
Acquisition related costs 2,170 - 2,170 -
Cost of revenue 109,048 74,010 222,376 140,481
------- ------ ------- -------
Gross margin 94,545 69,030 203,824 129,600
Operating expenses
Research and development 45,931 34,257 86,373 67,059
Selling, general, and
administrative 21,807 19,008 41,900 37,916
Acquisition related costs 4,729 837 6,280 1,364
Total operating expenses 72,467 54,102 134,553 106,339
------ ------ ------- -------
Operating income 22,078 14,928 69,271 23,261
Interest income 222 225 433 443
Non-cash interest income 254 - 473 -
Interest expense (5) (5) (9) (9)
Income before provision for income taxes 22,549 15,148 70,168 23,695
Provision for income taxes 5,215 4,034 17,895 6,528
Net income $17,334 $11,114 $52,273 $17,167
======= ======= ======= =======
Net income per share:
Basic $0.51 $0.34 $1.56 $0.52
=====
Diluted $0.48 $0.33 $1.47 $0.51
=======
Shares used in computing net income per share:
Basic 33,990 32,478 33,475 32,710
=====
Diluted 36,059 33,313 35,586 33,739
======
SYNAPTICS INCORPORATED
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
Three Months Six Months
Ended Ended
December 31, December 31,
------------ ------------
2013 2012 2013 2012
---- ---- ---- ----
GAAP gross margin $94,545 $69,030 $203,824 $129,600
Acquisition
related costs 2,170 - 2,170 -
Share-based
compensation 262 198 516 441
Non-GAAP gross margin $96,977 $69,228 $206,510 $130,041
======= ======= ======== ========
GAAP gross margin -percentage
of revenue 45.9% 48.3% 47.6% 48.0%
Share-based
compensation -
percentage of
revenue 1.2% 0.1% 0.6% 0.1%
Non-GAAP gross margin -
percentage of revenue 47.1% 48.4% 48.2% 48.1%
==== ==== ==== ====
GAAP research and development
expense $45,931 $34,257 $86,373 $67,059
Share-based
compensation (4,241) (3,879) (8,168) (7,790)
Non-GAAP research and
development expense $41,690 $30,378 $78,205 $59,269
======= ======= ======= =======
GAAP selling, general, and
administrative expense $21,807 $19,008 $41,900 $37,916
Share-based
compensation (3,119) (3,929) (5,980) (8,242)
Non-GAAP selling, general, and
administrative expense $18,688 $15,079 $35,920 $29,674
======= ======= ======= =======
GAAP operating income $22,078 $14,928 $69,271 $23,261
Acquisition
related costs 6,899 837 8,450 1,364
Share-based
compensation 7,622 8,006 14,664 16,473
Non-GAAP operating income $36,599 $23,771 $92,385 $41,098
======= ======= ======= =======
GAAP net income $17,334 $11,114 $52,273 $17,167
Acquisition
related costs 6,899 837 8,450 1,364
Share-based
compensation 7,622 8,006 14,664 16,473
Non-cash
interest
income (254) - (473) -
Tax adjustments (484) (2,273) 2,117 (4,577)
Non-GAAP net income $31,117 $17,684 $77,031 $30,427
======= ======= ======= =======
GAAP net income per share -
diluted $0.48 $0.33 $1.47 $0.51
Acquisition
related costs 0.19 0.03 0.23 0.04
Share-based
compensation 0.21 0.24 0.41 0.49
Non-cash
interest
income (0.01) - (0.01) -
Tax adjustments (0.01) (0.07) 0.06 (0.14)
Non-GAAP net income per share -
diluted $0.86 $0.53 $2.16 $0.90
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SOURCE Synaptics Inc.
