Attached files

file filename
8-K - FORM 8-K - SYNAPTICS Incd914662d8k.htm

Exhibit 99.1

 

LOGO

For more information contact:

 

Jennifer Jarman

The Blueshirt Group

415-217-5866

jennifer@blueshirtgroup.com

Synaptics Reports Results for Third Quarter Fiscal 2015

Record revenue of $478 million for the quarter, up 134% year-over-year

San Jose, CA – April 23, 2015 – Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its third quarter ended March 28, 2015.

Net revenue for the third quarter of fiscal 2015 grew 134% over the comparable quarter last year to $477.6 million. Net income for the third quarter of fiscal 2015 was $31.5 million, or $0.82 per diluted share. Non-GAAP net income for the third quarter of fiscal 2015 was $63.5 million, or $1.65 per diluted share. Results for the period reflect consolidated results from the acquisition of Renesas SP Drivers, Inc. (RSP). See attached table for a reconciliation of GAAP to non-GAAP financial measures.

“Synaptics delivered record financial performance in the third quarter as we continued to execute across our expanding growth opportunities,” stated Rick Bergman, President and CEO. “We see strong demand for our broad product portfolio, particularly as the momentum for fingerprint ID as well as touch and display driver integrated (TDDI) solutions continues to build. In addition, we continue to benefit from strength in our display driver business and efforts to expand the customer base and solutions set. We continue to elevate our position as the leading human interface provider and are poised to achieve our robust revenue growth forecast of over 75% as we close out the fiscal year.”

Third Quarter 2015 Business Metrics

 

    Revenue mix from mobile and PC products was approximately 87% and 13%, respectively. Fingerprint ID products have been classified according to type of device.

 

    Revenue from mobile products was up 177% year-over-year to $417.4 million. Mobile products revenue includes all touchscreen, display driver, and applicable fingerprint ID products.

 

    Revenue from PC products totaled $60.2 million, an increase of 12% year-over-year, and includes applicable fingerprint ID products.

Cash at March 31, 2015 was $381 million, an increase of $53 million from the prior quarter. The cash balance reflects the payment of $48 million during the quarter for the settlement of the working capital holdback liability related to the RSP acquisition. In the third quarter of fiscal 2015, cash flow from operations was $128 million. Year-to-date, the company has used $111 million to repurchase approximately 1.5 million shares of its common stock, or 4.2% of the total shares outstanding.


LOGO

Kathy Bayless, CFO, added, “Considering our backlog of $248 million entering the June quarter, customer forecasts and the resulting expected product mix, we anticipate revenue to be in the range of $460 to $500 million, an increase of 46% to 59% over the prior year period. This outlook reflects positive trends on a sequential basis in our touch and fingerprint products, partially offset by product cycle trends in display driver products.”

Earnings Call Information

The Synaptics third quarter fiscal 2015 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, April 23, 2015, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 1-888-438-5524 (conference ID: 2556376) 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 is the pioneer and leader of the human interface revolution, bringing innovative and intuitive user experiences to intelligent devices. Synaptics’ broad portfolio of touch, display, and biometrics products is built on the company’s rich R&D and supply chain capabilities. With solutions designed for mobile, PC and automotive industries, Synaptics combines ease of use, functionality and aesthetics to enable products that help make our digital lives more productive, secure and enjoyable. (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, change in contingent consideration, and certain non-cash or non-recurring items as a supplemental measure of operating performance. Net income excluding share-based compensation, change in contingent consideration, 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, change in contingent consideration, 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, change in contingent consideration, and certain non-cash or non-recurring items. Net income excluding share-based compensation, change in contingent consideration liability, 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 that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business, and can be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements may include words such as “expect,” “anticipate,” “intend,” “believe,” “estimate,” “plan,” “target,” “strategy,” “continue,” “may,” “will,” “should,” variations of such words, or other words and terms of similar meaning. All forward-looking statements reflect our best judgment and are based on several factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Such factors include, but are not limited to, the risks as identified in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” sections of our Annual Report on Form 10-K for the fiscal year ended June 28, 2014 and our Quarterly Report on Form 10-Q for the quarter ended September 27, 2014, and other risks as identified from time to time in our Securities and Exchange Commission reports. Forward-looking statements are based on information available to us on the date hereof, and we do not have, and expressly disclaim, any obligation to publicly release any updates or any changes in our expectations, or any change in events, conditions, or circumstances on which any forward-looking statement is based. Our actual results and the timing of certain events could differ materially from the forward-looking statements. These forward-looking statements do not reflect the potential impact of any mergers, acquisitions, or other business combinations that had not been completed as of the date of this filing.

(Tables to Follow)


SYNAPTICS INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

     March 31,     June 30,  
     2015     2014  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 380,579      $ 447,205   

Accounts receivables, net of allowances of $1,800 and $883, respectively

     319,567        195,057   

Inventories

     152,261        82,311   

Prepaid expenses and other current assets

     27,634        17,858   
  

 

 

   

 

 

 

Total current assets

  880,041      742,431   

Property and equipment at cost, net

  117,692      80,849   

Goodwill

  215,244      61,030   

Purchased intangibles, net

  254,357      82,111   

Non-current other assets

  43,883      53,912   
  

 

 

   

 

 

 

Total assets

$ 1,511,217    $ 1,020,333   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$ 182,021    $ 97,109   

Accrued compensation

  32,217      30,682   

Income taxes payable

  34,136      12,538   

Acquisition-related liabilities

  42,976      57,388   

Other accrued liabilities

  96,908      56,691   

Current portion of long-term debt

  9,375      —     
  

 

 

   

 

 

 

Total current liabilities

  397,633      254,408   

Long-term debt

  234,581      —     

Acquisition-related liabilities

  72,734      52,734   

Deferred tax liability

  43,341      —     

Other liabilities

  14,634      12,034   

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; 57,392,290 and 55,911,513 shares issued, and 36,798,673 and 36,863,802 shares outstanding, respectively

  57      56   

Additional paid in capital

  819,462      740,282   

Less: 20,593,617 and 19,047,711 treasury shares, respectively, at cost

  (641,022   (530,422

Accumulated other comprehensive income

  8,075      8,560   

Retained earnings

  561,722      482,681   
  

 

 

   

 

 

 

Total stockholders’ equity

  748,294      701,157   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

$ 1,511,217    $ 1,020,333   
  

 

 

   

 

 

 


SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     March 31,     March 31,  
     2015     2014     2015 (4)     2014  

Net revenue

   $ 477,598      $ 204,271      $ 1,224,044      $ 632,641   

Acquisition and integration related costs (1)

     16,180        2,378        59,742        4,548   

Cost of revenue

     297,073        109,463        752,937        331,839   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

  164,345      92,430      411,365      296,254   

Operating expenses

Research and development

  78,719      49,412      213,467      135,785   

Selling, general, and administrative

  35,799      25,803      103,866      69,703   

Acquisition related costs (2)

  (2,026   53,358      (8,673   57,638   

Foreign currency adjustment (3)

  —        —        (15,395   —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  112,492      128,573      293,265      263,126   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

  51,853      (36,143   118,100      33,128   

Interest and other income, net

  349      516      1,470      1,422   

Interest expense

  (1,317   —        (2,529   (9
  

 

 

   

 

 

   

 

 

   

 

 

 

Income/(loss) before provision for income taxes

  50,885      (35,627   117,041      34,541   

Provision for income taxes

  19,407      4,429      38,000      22,324   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income/(loss)

$ 31,478    $ (40,056 $ 79,041    $ 12,217   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income/(loss) per share:

Basic

$ 0.86    $ (1.12 $ 2.15    $ 0.36   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

$ 0.82    $ (1.12 $ 2.04    $ 0.33   
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in computing net income/(loss) per share:

Basic

  36,726      35,685      36,839      34,212   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

  38,535      35,685      38,797      36,532   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

 

(1) These acquisition and integration related costs consist primarily of amortization associated with certain acquired intangible assets and integration costs associated with acquisitions.
(2) These acquisition related costs consist primarily of changes in contingent consideration and amortization associated with certain acquired intangible assets.
(3) These foreign currency adjustments include currency remeasurement adjustments related to our acquisition of RSP.
(4) Inlcudes retrospective application of measurement period adjustments to amounts provisionally recorded in the quarter ended December 31, 2014 related to our acquisition of RSP in accordance with US GAAP.


SYNAPTICS INCORPORATED

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     March 31,     March 31,  
     2015     2014     2015     2014  

GAAP gross margin

   $ 164,345      $ 92,430      $ 411,365      $ 296,254   

Acquisition and integration related costs

     16,180        2,378        59,742        4,548   

Share-based compensation

     369        328        1,007        844   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross margin

$ 180,894    $ 95,136    $ 472,114    $ 301,646   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP gross margin - percentage of revenue

  34.4   45.2   33.6   46.8

Acquisition and integration related costs - percentage of revenue

  3.4   1.2   4.9   0.7

Share-based compensation - percentage of revenue

  0.1   0.2   0.1   0.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross margin - percentage of revenue

  37.9   46.6   38.6   47.7
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP research and development expense

$ 78,719    $ 49,412    $ 213,467    $ 135,785   

Acquisition and integration related costs

  —        —        (1,731   —     

Share-based compensation

  (6,455   (4,951   (17,806   (13,119
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP research and development expense

$ 72,264    $ 44,461    $ 193,930    $ 122,666   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP selling, general, and administrative expense

$ 35,799    $ 25,803    $ 103,866    $ 69,703   

Acquisition and integration related costs

  —        —        (7,447   (2,000

Share-based compensation

  (4,790   (3,496   (13,024   (9,476
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP selling, general, and administrative expense

$ 31,009    $ 22,307    $ 83,395    $ 58,227   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP operating income

$ 51,853    $ (36,143 $ 118,100    $ 33,128   

Acquisition and integration related costs

  14,154      55,736      60,247      64,186   

Share-based compensation

  11,614      8,775      31,837      23,439   

Foreign currency adjustment

  —        —        (15,395   —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

$ 77,621    $ 28,368    $ 194,789    $ 120,753   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net income

$ 31,478    $ (40,056 $ 79,041    $ 12,217   

Acquisition and integration related costs

  14,154      55,736      60,247      64,186   

Share-based compensation

  11,614      8,775      31,837      23,439   

Foreign currency adjustments

  —        —        (15,395   —     

Other non-cash items, net

  (126   (278   (722   (751

Tax adjustments

  6,398      (434   5,189      1,683   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

$ 63,518    $ 23,743    $ 160,197    $ 100,774   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net income per share - diluted

$ 0.82    $ (1.12 $ 2.04    $ 0.33   

Acquisition and integration related costs

  0.37      1.56      1.55      1.76   

Share-based compensation

  0.30      0.25      0.82      0.64   

Foreign currency adjustments

  —        —        (0.40   —     

Other non-cash items, net

  —        (0.01   (0.02   (0.02

Tax adjustments

  0.16      (0.01   0.14      0.05   

Non-GAAP share adjustment

  —        (0.04   —        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income per share - diluted

$ 1.65    $ 0.63    $ 4.13    $ 2.76