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Synaptics Reports Third Quarter Fiscal 2012 Results
Apr 26, 2012 (04:04 PM EDT)


- Strong year-over-year increase in gross margin

- Expansion of mobile OEM customer base

- First volume shipments of products utilizing the company's latest industry-leading technologies

SANTA CLARA, Calif., April 26, 2012 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions for mobile computing, communications, and entertainment devices, today reported financial results for its third fiscal quarter ended March 31, 2012. 

Net revenue for the third quarter of fiscal 2012 was $131.7 million compared with $142.4 million for the comparable quarter last year.  Net income for the third quarter of fiscal 2012 was $11.4 million, or $0.33 per diluted share, compared with net income of $13.5 million, or $0.38 per diluted share, for the comparable quarter last year. 

Non-GAAP net income for the third quarter of fiscal 2012 was $17.9 million, or $0.51 per diluted share, compared with non-GAAP net income of $19.5 million, or $0.55 per diluted share, for the third quarter of fiscal 2011.  (See attached table for a reconciliation of GAAP to non-GAAP results.)  Non-GAAP earnings per diluted share for the third quarter of fiscal 2012 included the impact of the higher average stock price during the quarter, which increased the diluted share count and reduced earnings per diluted share by $0.02.

"Our third quarter financial results were on target at the mid-point of our guidance range, and we posted continued strong gross margin performance, driving solid non-GAAP operating margins of 18%," stated Rick Bergman, President and CEO.  "During the quarter, we expanded our customer base with flagship designs at key mobile OEMs and achieved important milestones with the initial volume shipments of our first ClearPad 3250 in-cell solution in a smartphone and our ClearPad 7300 single-ASIC large touchscreen solution in multiple tablets."

Third Quarter 2012 Business Metrics

  • Revenue mix from PC and non-PC applications was approximately 49% and 51%, respectively.
  • PC revenue totaled $65.1 million, an increase of 6% year-over-year.
  • Non-PC revenue totaled $66.6 million, a decrease of 17% year-over-year, primarily reflecting mobile phone touchscreen applications.  Mobile unit volume continued to grow substantially with revenue impacted by the product mix transition from modules to lower priced, higher gross margin chip and tail touchscreen solutions. 
  • Non-GAAP gross margin was 47.4%, an increase of 670 basis points year-over-year.
  • Non-GAAP operating margin was 18%, up 200 basis points year-over-year.
  • Cash at March 31, 2012 totaled $324.1 million

Kathy Bayless, CFO, added, "We are beginning to see some signs of recovery in the notebook PC market; however, visibility remains limited in the mobile market, reflecting market share and sell-through dynamics within our mobile OEM customer base. Considering our backlog of approximately $60 million entering the quarter, customer forecasts, and the resulting expected product mix, we anticipate revenue for the fourth quarter to be up on a sequential basis in the range of $133 million to $140 million."

Earnings Call Information
The Synaptics third quarter fiscal 2012 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, April 26, 2012, 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 delivers innovative touch solutions for intelligent devices. As a leading developer of human interface solutions for the mobile computing, communications, and entertainment markets, Synaptics solutions enhance the user experience.  The ClearPad™ touchscreen product family supports devices ranging from entry-level mobile phones to tablets. The TouchPad™ family, including ClickPad™, is integrated into the majority of today's notebook PCs.  Synaptics has shipped over one billion capacitive touch solutions to date. (NASDAQ: SYNA) www.synaptics.com

Synaptics, ClearPad, TouchPad, ClickPad, 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 unusual or non-recurring items as a supplemental measure of operating performance.  Net income excluding share-based compensation 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 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 share-based compensation charges and unusual or non-recurring items. Net income excluding share-based compensation 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 the company's belief that it has industry-leading technologies; the company's belief it is beginning to see signs of recovery in the notebook PC market; the company's belief that there is limited visibility in the mobile market; and the company's anticipated revenue for the fourth quarter of fiscal 2012, including that revenue is anticipated to be up on a sequential basis.  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, 2011. 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

 

(Tables to Follow)

 

SYNAPTICS INCORPORATED

 CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)












March 31,


June 30,





2012


2011








Assets






Current assets:





Cash and cash equivalents                                                                 

$ 324,118


$ 247,153


Receivables, net of allowances of $503 and $709, respectively

95,493


93,808


Inventories                                                                              

27,975


28,850


Prepaid expenses and other current assets                                                     

4,476


4,373


Total current assets                                                                    

452,062


374,184








Property and equipment, net                                                               

24,800


26,222

Goodwill                                                                             

1,927


1,927

Non-current auction rate securities

18,088


25,876

Other assets                                                                                 

26,333


27,992

Total assets                                                                              

$ 523,210


$ 456,201





Liabilities and stockholders' equity




Current liabilities:





Accounts payable                                                                          

$  47,062


$  44,930


Accrued compensation                                                                      

11,469


13,210


Income taxes payable

8,788


11,808


Other accrued liabilities                                                                    

27,598


22,813


Total current liabilities                                                                  

94,917


92,761








Notes payable

2,305


2,305

Other liabilities                                                                            

23,600


21,142








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;  







48,432,280 and 46,832,208 shares issued, and 33,674,481 and 







33,465,732 shares outstanding, respectively

48


47


Additional paid in capital

460,714


406,653


Less:  14,757,799 and 13,366,476 treasury shares, respectively, at cost

(385,666)


(352,142)


Retained earnings

324,759


282,915


Accumulated other comprehensive income

2,533


2,520

Total stockholders' equity                                                                

402,388


339,993

Total liabilities and stockholders' equity                                              

$ 523,210


$ 456,201

 

SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)



























Three Months Ended


Nine Months Ended





March 31,


March 31,





2012


2011


2012


2011












Net revenue                                                 


$ 131,705


$ 142,406


$ 410,621


$ 455,172

Cost of revenue (1)                                


69,525


84,790


218,458


269,690

Gross margin                                                  


62,180


57,616


192,163


185,482

Operating expenses










Research and development (1)                           


29,415


25,956


87,478


77,516


Selling, general, and administrative (1)           


18,031


17,244


52,461


51,750

Total operating expenses                                       

47,446


43,200


139,939


129,266












Operating income                                   


14,734


14,416


52,224


56,216

Interest income


231


242


682


679

Interest expense                                                

(4)


(4)


(13)


(13)

Impairment recovery on investments, net


46


10


59


20

Income before income taxes                 


15,007


14,664


52,952


56,902

Provision for income taxes (2)                                    

3,561


1,168


11,108


7,029

Net income                                         


$  11,446


$  13,496


$  41,844


$  49,873












Net income per share:










Basic                                                      

$    0.34


$    0.40


$    1.27


$    1.46


Diluted                                                     

$    0.33


$    0.38


$    1.22


$    1.40












Shares used in computing net income per share:










Basic                                                          

33,389


33,992


32,935


34,118


Diluted                                                      

35,179


35,346


34,374


35,565


































(1) Includes share-based compensation charges of:






















Cost of revenue


$     313


$     355


$     903


$   1,032



Research and development


3,769


3,377


11,209


10,129



Selling, general, and administrative


4,915


4,619


13,551


14,547





$   8,997


$   8,351


$  25,663


$  25,708












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






















$   2,539


$   2,347


$   7,419


$   7,426


































Non-GAAP net income per share:











Basic


$    0.53


$    0.57


$    1.82


$    2.03



Diluted


$    0.51


$    0.55


$    1.75


$    1.94

 

 

 

SYNAPTICS INCORPORATED

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

(In thousands, except per share data)

(Unaudited)












































Three Months Ended


Nine Months Ended




March 31,


March 31,




2012


2011


2012


2011











Reported net income


$ 11,446


$ 13,496


$ 41,844


$ 49,873

Non-GAAP adjustments (net of tax):










Nonrecurring CEO resignation costs


-


-


-


1,006


Net recovery on investments


(46)


(10)


(59)


(20)


Share-based compensation


6,458


6,004


18,244


18,282

Non-GAAP basic and diluted net income


$ 17,858


$ 19,490


$ 60,029


$ 69,141











Non-GAAP net income per share:










Basic


$   0.53


$   0.57


$   1.82


$   2.03


Diluted


$   0.51


$   0.55


$   1.75


$   1.94

 

SOURCE Synaptics