SAN JOSE, Calif., April 23, 2015 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), the 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.
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.
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)
For more information contact:
Jennifer Jarman
The Blueshirt Group
415-217-5866
jennifer@blueshirtgroup.com
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 57 56 36,863,802 shares outstanding, respectively 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) Includes 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 ===== ===== ===== =====
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SOURCE Synaptics Inc.