Attached files

file filename
8-K - 8-K - SYNAPTICS Incd577782d8k.htm

Exhibit 99.1

 

LOGO   

For more information contact:

 

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

Synaptics Reports Results for Fourth Quarter and Fiscal 2013

Record Revenue, Net Income and EPS in Fiscal 2013

 

   

Fourth quarter revenue growth of 67% over prior year; gross margin increase of 390 basis points over prior year

 

   

Fiscal 2013 revenue growth of 21%; gross margin increase of 250 basis points

 

   

Increases Stock Repurchase Authorization by $100 Million

San Jose, CA – August 1, 2013 – Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its fourth quarter and year ended June 30, 2013.

Net revenue for fiscal 2013 reached a record $663.6 million, an increase of 21% over net revenue of $548.2 million for fiscal 2012. Net income for fiscal 2013 of $98.9 million, or $2.89 per diluted share, was also a record and increased 83% over net income of $54.1 million, or $1.57 per diluted share, for fiscal 2012.

Non-GAAP net income for fiscal 2013 of $106.4 million, or $3.11 per diluted share, was also a record. Non-GAAP net income and diluted earnings per share for fiscal 2012 were $78.6 million and $2.28, respectively. (See attached table for a reconciliation of GAAP to non-GAAP results.)

Net revenue for the fourth quarter of fiscal 2013 was a record $230.2 million, an increase of 67% compared with $137.6 million for the comparable quarter last year. Net income for the fourth quarter of fiscal 2013 was a record $45.3 million, or $1.29 per diluted share, compared with net income of $12.3 million, or $0.36 per diluted share, for the comparable quarter last year.

Non-GAAP net income for the fourth quarter of fiscal 2013 of $48.9 million, or $1.39 per diluted share, was also a record. Non-GAAP net income was $18.6 million, or $0.54 per diluted share, for the fourth quarter of fiscal 2012. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)

“Our execution in fiscal 2013 was stellar as we successfully expanded our footprint at leading mobile customers, with our solutions included in many of the world’s best-selling phones and tablets,” stated Rick Bergman, President and CEO. “Our record performance reflects our ability to innovate and lead in our markets based on the depth and breadth of our technology and the scale required to seamlessly deliver differentiated solutions to our growing global customer base.”


LOGO

 

Fourth Quarter 2013 Business Metrics

 

   

Revenue mix from mobile and PC products was approximately 75% and 25%, respectively.

 

   

Revenue from mobile products totaled $173.2 million and was up 186% year-over-year. Mobile products revenue includes all touchscreen and video display products.

 

   

Revenue from PC products totaled $57.0 million, a decrease of 26% year-over-year.

 

   

Gross margin was 50.0%, an increase of 390 basis points year-over-year.

Cash at June 30, 2013 was $355.3 million. Cash flow from operations for the fiscal year was $102.2 million; $46.3 million was used to repurchase 1.6 million shares of common stock, including 359,400 shares at approximately $42 per share repurchased during the fourth quarter, bringing fiscal 2013 repurchases to approximately 5% of shares outstanding.

Kathy Bayless, CFO, added, “Our performance in the June quarter reflected a steep initial ramp of new designs across multiple mobile customers. Considering our backlog of approximately $96 million entering the typically back-end loaded September quarter, customer forecasts, and the resulting expected product mix, we anticipate revenue to be in the range of $210 million to $225 million for the first fiscal quarter, an increase of 65% to 77% on a year-over-year basis. We expect the revenue mix from mobile and PC products to be similar to the preceding quarter.”

Mr. Bergman added, “While our markets are dynamic, we believe that as the technology leader we are building a sustainable competitive advantage in touch. As we look ahead to fiscal 2014, the declining PC market will continue to impact our growth rate, but overall we feel confident that we can achieve another year of very strong annual revenue growth at a level similar to our growth rate in fiscal 2013.”

Synaptics also announced that in July, its board of directors increased and extended the authorization for stock repurchases by $100 million, for a total current authorization of $160 million available through October, 2015.

Earnings Call Information

The Synaptics fourth quarter fiscal 2013 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, August 1, 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.


LOGO

 

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.


LOGO

 

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 its record performance reflects the company’s ability to innovate and lead in its markets based on the depth and breadth of its technology and the scale required to seamlessly deliver differentiated solutions to its growing global customer base; the company’s anticipated revenue for the September quarter, including its expectation that the revenue mix in the September quarter from mobile and PC products will be similar to the preceding quarter; the company’s belief that it is the technology leader and is building a sustainable competitive advantage in touch; the company’s expectations that the declining PC market will continue to impact its growth rate; and the company’s confidence that it can achieve another year of very strong annual revenue growth at a level similar to its growth rate in fiscal 2013. 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.

(Tables to Follow)


SYNAPTICS INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

     June 30,
2013
    June 30,
2012
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 355,303      $ 305,005   

Accounts receivables, net of allowances of $883 and $567, respectively

     148,454        104,140   

Inventories

     49,948        31,667   

Prepaid expenses and other current assets

     6,715        5,365   
  

 

 

   

 

 

 

Total current assets

     560,420        446,177   

Property and equipment at cost, net

     58,035        24,903   

Goodwill

     20,695        18,995   

Purchased intangibles

     13,110        12,800   

Non-current auction rate securities

     16,969        15,321   

Other assets

     22,037        23,309   
  

 

 

   

 

 

 

Total assets

   $ 691,266      $ 541,505   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 83,710      $ 55,220   

Accrued compensation

     23,728        12,642   

Income taxes payable

     10,751        11,221   

Other accrued liabilities

     31,437        26,515   
  

 

 

   

 

 

 

Total current liabilities

     149,626        105,598   

Notes payable

     2,305        2,305   

Other liabilities

     17,480        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; 50,673,758 and 48,680,348 shares issued, and 33,289,826 and 32,896,256 shares outstanding, respectively

     51        49   

Additional paid in capital

     539,170        471,569   

Less: 17,383,932 and 15,784,092 treasury shares, respectively, at cost

     (460,160     (413,885

Accumulated other comprehensive income

     6,802        1,998   

Retained earnings

     435,992        337,059   
  

 

 

   

 

 

 

Total stockholders’ equity

     521,855        396,790   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 691,266      $ 541,505   
  

 

 

   

 

 

 


SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

     Three Months Ended
June 30,
    Twelve Months Ended
June 30,
 
     2013     2012     2013     2012  

Net revenue

   $ 230,183      $ 137,607      $ 663,588      $ 548,228   

Cost of revenue

     115,062        74,203        337,784        292,661   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

     115,121        63,404        325,804        255,567   

Operating expenses

        

Research and development

     40,900        30,476        144,699        117,954   

Selling, general, and administrative

     21,521        17,584        79,620        70,045   

Acquired intangibles amortization

     262        —          1,025        —     

Change in contingent consideration

     247        —          1,347        —     

Gain on sale of building

     (1,578     —          (1,578     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     61,352        48,060        225,113        187,999   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     53,769        15,344        100,691        67,568   

Interest income

     225        240        865        922   

Non-cash interest income

     194        —          194        —     

Interest expense

     (4     (4     (17     (17

Impairment recovery on investments

     —          18        —          77   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes

     54,184        15,598        101,733        68,550   

Provision for income taxes

     8,864        3,298        2,800        14,406   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 45,320      $ 12,300      $ 98,933      $ 54,144   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share:

        

Basic

   $ 1.37      $ 0.37      $ 3.03      $ 1.64   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 1.29      $ 0.36      $ 2.89      $ 1.57   
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in computing net income per share:

        

Basic

     32,979        33,321        32,658        33,030   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     35,150        34,505        34,239        34,435   
  

 

 

   

 

 

   

 

 

   

 

 

 


SYNAPTICS INCORPORATED

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)

 

     Three Months Ended
June 30,
    Twelve Months Ended
June 30,
 
     2013     2012     2013     2012  

GAAP gross margin

   $ 115,121      $ 63,404      $ 325,804      $ 255,567   

Share-based compensation

     221        226        911        1,129   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross margin

   $ 115,342      $ 63,630      $ 326,715      $ 256,696   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP gross margin—percentage of revenue

     50.0     46.1     49.1     46.6

Share-based compensation—percentage of revenue

     0.1     0.1     0.1     0.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross margin—percentage of revenue

     50.1     46.2     49.2     46.8
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP research and development expense

   $ 40,900      $ 30,476      $ 144,699      $ 117,954   

Share-based compensation

     (3,992     (4,300     (15,775     (15,509
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP research and development expense

   $ 36,908      $ 26,176      $ 128,924      $ 102,445   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP selling, general, and administrative expense

   $ 21,521      $ 17,584      $ 79,620      $ 70,045   

Share-based compensation

     (3,291     (3,972     (15,524     (17,523
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP selling, general, and administrative expense

   $ 18,230      $ 13,612      $ 64,096      $ 52,522   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP operating income

   $ 53,769      $ 15,344      $ 100,691      $ 67,568   

Acquired intangibles amortization

     262        —          1,025        —     

Change in contingent consideration

     247        —          1,347        —     

Share-based compensation

     7,504        8,498        32,210        34,161   

Gain on sale of building

     (1,578     —          (1,578     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

   $ 60,204      $ 23,842      $ 133,695      $ 101,729   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net income

   $ 45,320      $ 12,300      $ 98,933      $ 54,144   

Impairment recovery on investments

     —          (18     —          (77

Non-cash interest income

     (194     —          (194     —     

Acquired intangibles amortization

     262        —          1,025        —     

Change in contingent consideration

     247        —          1,347        —     

Share-based compensation

     7,504        8,498        32,210        34,161   

Gain on sale of building

     (1,578     —          (1,578     —     

Tax adjustments

     (2,620     (2,170     (25,365     (9,589
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 48,941      $ 18,610      $ 106,378      $ 78,639   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net income per share—diluted

   $ 1.29      $ 0.36      $ 2.89      $ 1.57   

Impairment recovery on investments

     —          —          —          —     

Non-cash interest income

     (0.01     —          (0.01     —     

Acquired intangibles amortization

     0.01        —          0.03        —     

Change in contingent consideration

     0.01        —          0.04        —     

Share-based compensation

     0.21        0.24        0.94        0.99   

Gain on sale of building

     (0.05     —          (0.05     —     

Tax adjustments

     (0.07     (0.06     (0.73     (0.28
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income per share—diluted

   $ 1.39      $ 0.54      $ 3.11      $ 2.28