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Synaptics Reports Results for Fourth Quarter and Fiscal 2015

2015-07-30 16:15 ET - News Release

- Record fiscal 2015 revenue of $1.7 billion up 80 percent
- Record June quarter revenue of $479 million up 52 percent year-over-year
- Record fiscal 2015 non-GAAP EPS of $5.69; GAAP EPS of $2.89
- Increases available stock repurchase authorization to $198 million

SAN JOSE, Calif., July 30, 2015 /PRNewswire/ -- Synaptics (NASDAQ: SYNA), a leading developer of human interface solutions, today reported financial results for its fourth quarter and year ended June 30, 2015.

"Synaptics posted a strong fourth quarter and a phenomenal fiscal year as we crossed the $1 billion annual revenue threshold," stated Rick Bergman, President and CEO. "During fiscal 2015 we surpassed the 3 billion milestone for unit shipments of our solutions, more than doubled the revenue contribution from China based mobile customers and also doubled revenue from our fingerprint ID business. We successfully completed and integrated the acquisition of our display driver business, strengthening our competitive position and accelerating our roadmap for touch and display driver integration.

"Our focus remains on growth, and we continue to invest in order to fully capitalize on our key fingerprint ID and touch and display driver integration (TDDI) growth pillars as we march towards becoming a $2 billion annual revenue company. With our continued commitment to growth and innovation, we expect to generate a strong top-line increase in fiscal 2016 of 20 percent to 25 percent, with growth weighted towards the second half of the fiscal year based on our strong product pipeline," concluded Mr. Bergman.

Net revenue for fiscal 2015 reached a record $1.7 billion, an increase of 80 percent over fiscal 2014.  Net income for fiscal 2015 was $112.3 million, or $2.89 per diluted share.

Non-GAAP net income for fiscal 2015 increased 40 percent from the prior year to a record $221.4 million, or $5.69 per diluted share. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)

Net revenue for the fourth quarter of fiscal 2015 grew 52 percent over the comparable quarter last year to a record $478.9 million. Net income for the fourth quarter of fiscal 2015 was $33.3 million, or $0.85 per diluted share.

Non-GAAP net income for the fourth quarter of fiscal 2015 grew 8 percent over the prior year period to $61.2 million, or $1.57 per diluted share.  (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)

Fourth Quarter 2015 Business Metrics

  • Revenue mix from mobile and PC products was approximately 89 percent and 11 percent respectively. Fingerprint ID products have been classified according to type of device.
  • Revenue from mobile products of $426.6 million was up 76 percent year-over-year. Mobile products revenue includes all touchscreen, display driver, and applicable fingerprint ID products.
  • Revenue from PC products totaled $52.3 million, a decrease of 27 percent year-over-year, and includes applicable fingerprint ID products.
  • Cash at June 30, 2015 was $400 million.

Wajid Ali, CFO, added, "Considering our backlog of $159 million entering the typically back-end loaded September quarter, subsequent bookings, customer forecasts and product sell-in and sell-through timing patterns, and the resulting expected product mix, we anticipate revenue to be in the range of $450 to $490 million, an increase of 59 percent to 73 percent over the prior year period. On a sequential basis, this outlook reflects positive trends in our touch and fingerprint products despite typical downward seasonality, offset by product cycle trends in display driver products. We expect the revenue mix from mobile and PC products to be roughly similar to the preceding quarter."

During fiscal 2015, Synaptics repurchased approximately 5 percent of its outstanding shares, similar to levels repurchased during each of the past several years. The company also announced that in July, its board of directors increased and extended the authorization for stock repurchases by $120 million, for a total current authorization of $198 million available through July 2017.

Earnings Call Information
The Synaptics fourth quarter fiscal 2015 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, July 30, 2015, during which the company will provide forward-looking information. To participate on the live call, analysts and investors should dial 888-455-2260 (conference ID: 2011227) 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 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)














June 30,


June 30,




2015


2014






Assets




Current assets:





Cash and cash equivalents                                                                 

$             399,905


$             447,205


Accounts receivables, net of allowances of $2,900 and $883, respectively 

324,634


195,057


Inventories                                                                              

140,170


82,311


Prepaid expenses and other current assets 

47,329


17,858

Total current assets

912,038


742,431






Property and equipment at cost, net

123,445


80,849

Goodwill

215,244


61,030

Purchased intangibles, net

235,386


82,111

Non-current other assets                                                                                 

37,974


53,912

Total assets                                                                              

$          1,524,087


$          1,020,333





Liabilities and stockholders' equity




Current liabilities:






Accounts payable                                                                          

$             188,459


$               97,109


Accrued compensation                                                                      

35,861


30,682


Income taxes payable

34,712


12,538


Acquisition-related liabilities

102,288


57,388


Other accrued liabilities                                                                    

74,130


56,691


Current portion of long-term debt

11,250


-

Total current liabilities                                                                  

446,700


254,408

















Long-term debt

231,062


-

Acquisition-related liabilities

-


52,734

Deferred tax liability

33,240


-

Other liabilities                                                                            

15,458


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;  







58,249,107 and 55,911,513 shares issued, and 37,529,608 and 







36,863,802 shares outstanding, respectively

58


56


Additional paid in capital

846,403


740,282


Less: 20,719,499 and 19,047,711 treasury shares, respectively, at cost

(651,705)


(530,422)


Accumulated other comprehensive income

7,873


8,560


Retained earnings

594,998


482,681

Total stockholders' equity                                                                

797,627


701,157

Total liabilities and stockholders' equity                                              

$          1,524,087


$          1,020,333

 

SYNAPTICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)
















Three Months Ended


Twelve Months Ended





June 30,


June 30,





2015


2014


2015


2014












Net revenue 


$         478,927


$         314,898


$         1,702,971


$        947,539

Acquisition and integration related costs (1)


14,314


2,378


73,788


6,926

Cost of revenue                             


297,346


172,694


1,050,551


504,533

Gross margin            


167,267


139,826


578,632


436,080

Operating expenses










Research and development               


79,690


56,896


293,157


192,681


Selling, general, and administrative


39,359


30,180


143,286


100,005


Acquisition related costs (2)


4,155


13,392


(4,579)


70,908


Foreign currency adjustment (3)


-


-


(15,395)


-

Total operating expenses


123,204


100,468


416,469


363,594












Operating income


44,063


39,358


162,163


72,486

Interest and other income, net


405


560


1,875


1,982

Interest expense


(1,303)


-


(3,832)


(9)

Income before provision for income taxes


43,165


39,918


160,206


74,459

Provision for income taxes 


9,889


5,446


47,889


27,770

Net income


$           33,276


$           34,472


$            112,317


$          46,689












Net income per share:










Basic                  


$               0.90


$               0.95


$                  3.04


$              1.34


Diluted 


$               0.85


$               0.89


$                  2.89


$              1.26












Shares used in computing net income per share:










Basic


37,156


36,411


36,918


34,761


Diluted


38,971


38,817


38,889


37,105
























(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.

 

 

SYNAPTICS INCORPORATED

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)
















Three Months Ended


Twelve Months Ended





June 30,


June 30,





2015


2014


2015


2014












GAAP gross margin


$        167,267


$         139,826


$        578,632


$         436,080


Acquisition and integration related costs


14,314


2,378


74,056


6,926


Share-based compensation


367


298


1,374


1,142

Non-GAAP gross margin


$        181,948


$         142,502


$        654,062


$         444,148























GAAP gross margin - percentage of revenue


34.9%


44.4%


34.0%


46.0%


Acquisition and integration related costs - percentage of revenue


3.0%


0.8%


4.3%


0.7%


Share-based compensation - percentage of revenue


0.1%


0.1%


0.1%


0.2%

Non-GAAP gross margin - percentage of revenue


38.0%


45.3%


38.4%


46.9%























GAAP research and development expense


$          79,690


$           56,896


$        293,157


$         192,681


Acquisition and integration related costs


-


-


(1,731)


-


Share-based compensation


(6,712)


(5,336)


(24,518)


(18,455)

Non-GAAP research and development expense


$          72,978


$           51,560


$        266,908


$         174,226























GAAP selling, general, and administrative expense


$          39,359


$           30,180


$        143,286


$         100,005


Acquisition and integration related costs


-


(3,639)


(7,508)


(5,761)


Share-based compensation


(5,153)


(3,788)


(18,177)


(13,264)

Non-GAAP selling, general, and administrative expense


$          34,206


$           22,753


$        117,601


$           80,980























GAAP operating income


$          44,063


$           39,358


$        162,163


$           72,486


Acquisition and integration related costs


18,469


19,409


78,716


83,595


Share-based compensation


12,232


9,422


44,069


32,861


Foreign currency adjustment 


-


-


(15,395)


-

Non-GAAP operating income


$          74,764


$           68,189


$        269,553


$         188,942























GAAP net income


$          33,276


$           34,472


$        112,317


$           46,689


Acquisition and integration related costs


18,469


19,409


78,716


83,595


Share-based compensation


12,232


9,422


44,069


32,861


Other non-cash items, net


(158)


(307)


(880)


(1,058)


Tax adjustments


(2,642)


(6,189)


2,547


(4,506)


Foreign currency adjustments


-


-


(15,395)


-

Non-GAAP net income


$          61,177


$           56,807


$        221,374


$         157,581























GAAP net income per share - diluted


$              0.85


$               0.89


$              2.89


$               1.26


Acquisition and integration related costs


0.47


0.50


2.02


2.25


Share-based compensation


0.31


0.24


1.13


0.89


Other non-cash items, net


-


(0.01)


(0.02)


(0.03)


Tax adjustments


(0.06)


(0.16)


0.07


(0.12)


Foreign currency adjustments


-


-


(0.40)


-

Non-GAAP net income per share - diluted


$              1.57


$               1.46


$              5.69


$               4.25

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/synaptics-reports-results-for-fourth-quarter-and-fiscal-2015-300121462.html

SOURCE Synaptics

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