SYNAPTICS INCORPORATED SAN JOSE, Calif., Jan. 28, 2016 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its second quarter ended December 31, 2015.
Net revenue for the second quarter of fiscal 2016 increased 2 percent compared to the comparable quarter last year to $470.5 million. Net income for the second quarter of fiscal 2016 was $35.0 million, or $0.93 per diluted share.
Non-GAAP net income for the first quarter of fiscal 2016 grew 9 percent over the prior year period to $60.3 million, or $1.60 per diluted share. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)
"We are pleased to report record second quarter revenue and non-GAAP net income that were within our guidance range despite negative impacts due to macroeconomic uncertainty and resulting weakness at top smartphone OEMs," stated Rick Bergman, President and CEO. "We expect these factors to also slow our fiscal year growth from the levels we previously forecasted. However, we believe that our diversified product portfolio and the breadth of our global customer base should help cushion the effects of industry gyrations and enable us to continue to deliver solid revenue growth and profitability for the fiscal year."
Second Quarter 2016 Business Metrics
-- Revenue mix from mobile and PC products was approximately 87 percent and
13 percent, respectively. Fingerprint authentication products have been
classified according to type of device.
-- Revenue from mobile products of $407.8 million was up 2 percent
year-over-year. Mobile products revenue includes all touchscreen,
display driver, and applicable fingerprint authentication products.
-- Revenue from PC products totaled $62.7 million, a decrease of 4 percent
year-over-year, and includes applicable fingerprint authentication
products.
Wajid Ali, CFO, added, "Considering our backlog of $139 million entering the March quarter, subsequent bookings, customer forecasts, product sell-in and sell-through timing patterns, as well as expected product mix, we anticipate revenue in the March quarter to be in the range of $430 to $470 million, with the revenue mix from mobile and PC products to be approximately 90 percent and 10 percent, respectively. By prudently managing our operating expenses we expect to drive incremental earnings results in the March quarter relative to expected top-line performance. Despite the turbulence in the macroeconomic environment and specifically the mobile phone market, we believe we can preserve a more modest but healthy growth rate. Based on our current outlook for the remainder of fiscal 2016, we anticipate annual revenue growth in the range of 9 percent to 11 percent."
Cash at December 31, 2015 was $372 million. In the second quarter of fiscal 2016, cash flow from operations was $94.5 million.
Earnings Call Information
The Synaptics second quarter fiscal 2016 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 28, 2016, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 800-524-8950 (conference ID: 8104671) 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 Website 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, extensive IP and dependable 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 27, 2015 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 millions except share data)
(Unaudited)
December 31, June 30,
2015 2015
---- ----
Assets
Current assets:
Cash and cash equivalents $372.0 $399.9
Accounts receivables, net of allowances of $2.3
and $2.9, respectively 337.0 324.6
Inventories 136.6 140.2
Prepaid expenses and other current assets 46.7 51.3
----
Total current assets 892.3 916.0
Property and equipment at cost, net 116.0 123.4
Goodwill 206.8 206.8
Purchased intangibles, net 201.9 235.4
Non-current other assets 36.3 37.8
---- ----
Total assets $1,453.3 $1,519.4
======== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $166.6 $188.5
Accrued compensation 43.5 35.9
Income taxes payable 27.5 34.7
Acquisition-related liabilities 68.4 102.2
Other accrued liabilities 77.1 74.1
Current portion of long-term debt 15.0 11.3
Total current liabilities 398.1 446.7
Long-term debt 223.7 231.1
Deferred tax liabilities 25.8 33.9
Other long-term liabilities 41.9 14.6
Total liabilities 689.5 726.3
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; 59,038,874 and 58,249,107 shares
issued, and 36,650,662 and 37,529,608 shares
outstanding, respectively
0.1 0.1
Additional paid in capital 882.6 843.8
Less: 22,388,212 and 20,719,499 treasury shares,
respectively, at cost (776.7) (651.7)
Accumulated other comprehensive income 5.9 7.8
Retained earnings 651.9 593.1
-----
Total stockholders' equity 763.8 793.1
----- -----
Total liabilities and stockholders' equity $1,453.3 $1,519.4
======== ========
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions except per share data)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Net revenue $470.5 $463.7 $940.5 $746.5
Acquisition and integration related costs (1) 14.1 39.3 28.6 43.3
Cost of revenue 291.2 297.6 582.9 456.1
----- ----- ----- -----
Gross margin 165.2 126.8 329.0 247.1
Operating expenses
Research and development 78.6 77.3 159.1 134.8
Selling, general, and administrative 41.0 37.4 81.2 68.1
Acquisition related costs (2) 0.3 (2.5) 7.7 (6.7)
Foreign currency adjustment (3) - (15.4) - (15.4)
Restructuring costs (4) - - 1.9 -
Total operating expenses 119.9 96.8 249.9 180.8
----- ---- ----- -----
Operating income 45.3 30.0 79.1 66.3
Interest and other expense, net (0.8) (0.7) (1.6) (0.1)
Income before provision for income taxes 44.5 29.3 77.5 66.2
Provision for income taxes 9.5 8.3 18.7 18.6
Net income $35.0 $21.0 $58.8 $47.6
===== ===== ===== =====
Net income per share:
Basic $0.96 $0.57 $1.61 $1.29
=====
Diluted $0.93 $0.55 $1.55 $1.22
=======
Shares used in computing net income per share:
Basic 36.4 36.5 36.6 36.9
====
Diluted 37.7 38.2 38.0 38.9
====
(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) Restructuring
costs include
severance
costs
associated
with an
operational
restructuring.
SYNAPTICS INCORPORATED
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In millions except per share data)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
GAAP gross margin $165.2 $126.8 $329.0 $247.1
Acquisition and integration
related costs 14.1 39.6 28.6 43.6
Share-based compensation 0.4 0.3 0.8 0.6
Non-GAAP gross margin $179.7 $166.7 $358.4 $291.3
====== ====== ====== ======
GAAP gross margin -
percentage of revenue 35.1% 27.3% 35.0% 33.1%
Acquisition and integration
related costs -percentage of
revenue 3.0% 8.5% 3.0% 5.8%
Share-based compensation -
percentage of revenue 0.1% 0.1% 0.1% 0.1%
Non-GAAP gross margin -
percentage of revenue 38.2% 35.9% 38.1% 39.0%
==== ==== ==== ====
GAAP research and development
expense $78.6 $77.3 $159.1 $134.8
Acquisition and integration
related costs - (1.4) - (1.7)
Share-based compensation (7.5) (6.0) (14.0) (11.4)
Non-GAAP research and
development expense $71.1 $69.9 $145.1 $121.7
===== ===== ====== ======
GAAP selling, general, and
administrative expense $41.0 $37.4 $81.2 $68.1
Acquisition and integration
related costs - (4.3) - (7.4)
Share-based compensation (6.1) (4.4) (11.1) (8.2)
Non-GAAP selling, general,
and administrative expense $34.9 $28.7 $70.1 $52.5
===== ===== ===== =====
GAAP operating income $45.3 $30.0 $79.1 $66.3
Acquisition and integration
related costs 14.4 42.8 36.3 46.0
Share-based compensation 14.0 10.7 25.9 20.2
Foreign currency adjustments - (15.4) - (15.4)
Restructuring costs - - 1.9 -
Non-GAAP operating income $73.7 $68.1 $143.2 $117.1
===== ===== ====== ======
GAAP net income $35.0 $21.0 $58.8 $47.6
Acquisition and integration
related costs 14.4 42.8 36.3 46.0
Share-based compensation 14.0 10.7 25.9 20.2
Foreign currency adjustments - (15.4) - (15.4)
Other non-cash items, net (0.2) (0.3) (0.4) (0.6)
Restructuring costs - - 1.9 -
Tax adjustments (2.9) (3.3) (5.3) (1.3)
Non-GAAP net income $60.3 $55.5 $117.2 $96.5
===== ===== ====== =====
GAAP net income per share -
diluted $0.93 $0.55 $1.55 $1.22
Acquisition and integration
related costs 0.38 1.13 0.95 1.20
Share-based compensation 0.37 0.28 0.68 0.52
Foreign currency adjustments - (0.40) - (0.40)
Other non-cash items, net - (0.01) (0.01) (0.02)
Restructuring costs - - 0.05 -
Tax adjustments (0.08) (0.09) (0.14) (0.04)
Non-GAAP net income per
share - diluted $1.60 $1.46 $3.08 $2.48
===== ===== ===== =====
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SOURCE Synaptics Incorporated
