SYNAPTICS INCORPORATED 
SAN JOSE, Calif., Jan. 29, 2015 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its second quarter ended December 27, 2014. Results for the period reflect the first quarter of consolidated results from the acquisition of Renesas SP Drivers, Inc. (RSP), completed on October 1, 2014.
Net revenue for the second quarter of fiscal 2015 grew 125% over the comparable quarter last year to $463.7 million. Net income for the second quarter of fiscal 2015 was $20.0 million, or $0.52 per diluted share. Non-GAAP net income for the second quarter of fiscal 2015 was $55.8 million, or $1.46 per diluted share. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)
"Synaptics achieved record top-line results for the second quarter, which included strong contributions from our new display drivers business," stated Rick Bergman, President and CEO. "We continue to execute across our strategic growth initiatives, with our new area touch fingerprint sensor and the market's first touch and display driver integrated (TDDI) solution now in mass production. We are very optimistic regarding our outlook for the second half of fiscal 2015 and are tracking well towards our combined operating model following the integration of RSP."
Second Quarter 2015 Business Metrics
-- Revenue mix from mobile and PC products was approximately 86% and 14%,
respectively. Fingerprint ID products have been classified according to
type of device.
-- Revenue from mobile products was up 198% year-over-year to $398.3
million. Mobile products revenue includes all touchscreen, display
driver, and applicable fingerprint ID products.
-- Revenue from PC products totaled $65.4 million, a decrease of 9%
year-over-year, and includes applicable fingerprint ID products.
Cash at December 31, 2014 was $327.5 million, a decrease of $122 million from the prior quarter. The decrease in cash was due to the purchase of RSP early in the quarter. In the second quarter of fiscal 2015, cash flow from operations was a negative $16.5 million as a result of the purchase of RSP inventory totaling $115 million from Renesas post-acquisition. Year-to-date, the company has used $91 million to repurchase approximately 1.3 million shares of its common stock, or roughly 3.5% of the total shares outstanding.
Kathy Bayless, CFO, added, "Considering our backlog of $245 million entering the March quarter, customer forecasts and the resulting expected product mix, we anticipate revenue to be in the range of $450 to $490 million, an increase of 120% to 140% over the prior year period. We expect the revenue mix from mobile and PC to be similar to the preceding quarter."
Earnings Call Information
The Synaptics second quarter fiscal 2015 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 29, 2015, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 1-888-337-8198 (conference ID: 6552336) 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.
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.
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,
2014 2014
---- ----
Assets
Current assets:
Cash and cash equivalents $327,546 $447,205
Accounts receivables, net of allowances of $1,165
and $883, respectively 335,023 195,057
Inventories 145,215 82,311
Prepaid expenses and other current assets 35,196 17,858
------
Total current assets 842,980 742,431
Property and equipment at cost, net 115,145 80,849
Goodwill 214,443 61,030
Purchased intangibles, net 283,349 82,111
Non-current other assets 52,058 53,912
------ ------
Total assets $1,507,975 $1,020,333
========== ==========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $149,535 $97,109
Accrued compensation 33,474 30,682
Income taxes payable 11,830 12,538
Acquisition related liabilities 97,549 57,388
Other accrued liabilities 94,433 56,691
Current portion of long-term debt 7,500 -
Total current liabilities 394,321 254,408
Long-term debt 242,500 -
Non-current portion acquisition related liabilities 85,626 52,734
Deferred tax liability 57,342 -
Other liabilities 13,609 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;
56,997,204 and 55,911,513 shares
issued, and 36,662,018 and
36,863,802 shares outstanding,
respectively 57 56
Additional paid in capital 798,203 740,282
Less: 20,335,186 and 19,047,711 treasury shares,
respectively, at cost (621,027) (530,422)
Accumulated other comprehensive income 8,105 8,560
Retained earnings 529,239 482,681
-------
Total stockholders' equity 714,577 701,157
------- -------
Total liabilities and stockholders' equity $1,507,975 $1,020,333
========== ==========
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
------------ ------------
2014 2013 2014 2013
---- ---- ---- ----
Net revenue $463,705 $205,763 $746,446 $428,370
Acquisition and integration related costs (1) 39,492 2,170 43,562 2,170
Cost of revenue 297,382 109,048 455,864 222,376
------- ------- ------- -------
Gross margin 126,831 94,545 247,020 203,824
Operating expenses
Research and development 77,223 45,931 134,748 86,373
Selling, general, and administrative 37,427 21,807 68,067 41,900
Acquisition related costs (2) (894) 4,729 (5,101) 6,280
Foreign currency adjustment (3) (15,395) - (15,395) -
Total operating expenses 98,361 72,467 182,319 134,553
------ ------ ------- -------
Operating income 28,470 22,078 64,701 69,271
Interest and other income, net 497 476 1,121 906
Interest expense (1,212) (5) (1,212) (9)
Income before provision for income taxes 27,755 22,549 64,610 70,168
Provision for income taxes 7,783 5,215 18,052 17,895
Net income $19,972 $17,334 $46,558 $52,273
======= ======= ======= =======
Net income per share:
Basic $0.55 $0.51 $1.26 $1.56
=====
Diluted $0.52 $0.48 $1.20 $1.47
=======
Shares used in computing net income per share:
Basic 36,500 33,990 36,895 33,475
=====
Diluted 38,248 36,059 38,882 35,586
======
These acquisition and
integration related
costs consist primarily
of amortization
associated with certain
acquired intangible
assets and integration
costs associated with
(1) acquisitions.
These acquisition related
costs consist primarily
of changes in contingent
consideration and
amortization associated
with certain acquired
(2) intangible assets.
These foreign currency
adjustments include
currency remeasurement
adjustments related to
(3) our acquisition of RSP.
SYNAPTICS INCORPORATED
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
------------ ------------
2014 2013 2014 2013
---- ---- ---- ----
GAAP gross margin $126,831 $94,545 $247,020 $203,824
Acquisition
and
integration
related
costs 39,492 2,170 43,562 2,170
Share-based
compensation 336 262 638 516
Non-GAAP gross margin $166,659 $96,977 $291,220 $206,510
======== ======= ======== ========
GAAP gross margin -percentage of
revenue 27.4% 45.9% 33.1% 47.6%
Acquisition
and
integration
related
costs -
percentage
of revenue 8.5% 1.1% 5.8% 0.5%
Share-based
compensation
-
percentage
of revenue 0.1% 0.1% 0.1% 0.1%
Non-GAAP gross margin - percentage of
revenue 35.9% 47.1% 39.0% 48.2%
==== ==== ==== ====
GAAP research and development expense $77,223 $45,931 $134,748 $86,373
Acquisition
and
integration
related
costs (1,399) - (1,731) -
Share-based
compensation (5,951) (4,241) (11,351) (8,168)
Non-GAAP research and development
expense $69,873 $41,690 $121,666 $78,205
======= ======= ======== =======
GAAP selling, general, and
administrative expense $37,427 $21,807 $68,067 $41,900
Acquisition
and
integration
related
costs (4,418) - (7,447) -
Share-based
compensation (4,441) (3,119) (8,234) (5,980)
Non-GAAP selling, general, and
administrative expense $28,568 $18,688 $52,386 $35,920
======= ======= ======= =======
GAAP operating income $28,470 $22,078 $64,701 $69,271
Acquisition
and
integration
related
costs 44,415 6,899 47,639 8,450
Share-based
compensation 10,728 7,622 20,223 14,664
Foreign
currency
adjustment (15,395) - (15,395) -
Non-GAAP operating income $68,218 $36,599 $117,168 $92,385
======= ======= ======== =======
GAAP net income $19,972 $17,334 $46,558 $52,273
Acquisition
and
integration
related
costs 44,415 6,899 47,639 8,450
Recovery of
investment
impairment (179) - (179) -
Share-based
compensation 10,728 7,622 20,223 14,664
Foreign
currency
adjustments (15,395) - (15,395) -
Non-cash
interest
income, net (92) (254) (417) (473)
Tax
adjustments (3,647) (484) (1,750) 2,117
Non-GAAP net income $55,802 $31,117 $96,679 $77,031
======= ======= ======= =======
GAAP net income per share - diluted $0.52 $0.48 $1.20 $1.47
Acquisition
and
integration
related
costs 1.16 0.19 1.23 0.23
Recovery of
investment
impairment - - - -
Share-based
compensation 0.28 0.21 0.52 0.41
Foreign
currency
adjustments (0.40) - (0.40) -
Non-cash
interest
income - (0.01) (0.01) (0.01)
Tax
adjustments (0.10) (0.01) (0.05) 0.06
Non-GAAP net income per share - diluted $1.46 $0.86 $2.49 $2.16
===== ===== ===== =====
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SOURCE Synaptics Inc.
