SANTA CLARA, Calif., Jan. 22 /PRNewswire-FirstCall/ -- Synaptics
(NASDAQ: SYNA), a leading developer of human interface solutions
for mobile computing, communications, and entertainment devices,
today reported financial results for the second quarter ended
December 31, 2008. The Company's GAAP results reflect the expensing
of non-cash share-based compensation for all periods presented;
non-operating gains and non-cash impairment charges for all fiscal
2009 periods presented; and non-cash operating gains and impairment
charges for the six-month period ended December 31, 2007. Net
revenue for the second quarter of fiscal 2009 was $141.5 million,
an increase of approximately 43% over $98.7 million of net revenue
for the second quarter of fiscal 2008. Net income for the second
quarter of fiscal 2009 was $21.2 million, or $0.60 per diluted
share, compared with net income of $14.2 million, or $0.33 per
diluted share, for the second quarter of fiscal 2008. Net income
for the second quarter of fiscal 2009 included a non-cash other-
than-temporary impairment charge of $6.5 million related to the
Company's investment in auction rate securities and a $3.6 million
net gain on the early retirement of debt. Net income, excluding
non-cash charges for share-based compensation, the non-cash
other-than-temporary impairment charge, and the net gain on the
early retirement of debt, was $29.5 million, or $0.84 per diluted
share, for the second quarter of fiscal 2009, compared with net
income, excluding share-based compensation, of $17.0 million, or
$0.40 per diluted share, for the second quarter of fiscal 2008. "In
spite of the current macroeconomic environment, we posted the
highest quarterly revenue, net income and earnings per share in our
history, driven by 43% revenue growth year-over-year," stated
Francis Lee, Chairman and Chief Executive Officer of Synaptics.
"The benefits of our revenue diversification strategy are clearly
evident in our operating performance as our penetration in the
mobile handheld markets more than offset a relatively small decline
in PC based revenue in a generally weak notebook market. We intend
to continue to selectively invest to further strengthen our
competitive position emerging from the current economic downturn.
Based on our strong first half performance, we are on track to
achieve record revenue and profits in fiscal 2009." Russ Knittel,
Synaptics' Chief Financial Officer, added, "We are expecting solid
year-over-year growth for the fiscal third quarter despite the
challenging macroeconomic conditions. Based on our current
visibility and backlog of $50.6 million exiting the December
quarter, we anticipate revenue in the March quarter will be $88
million to $98 million, an increase of 12% to 24% over the
comparable quarter last year." During the quarter, the Company
retired $59.7 million of its outstanding convertible notes at a
discount of approximately 7%. After deducting the associated
unamortized debt issuance costs, the Company realized a $3.6
million net gain on retirement of debt. Synaptics' cash and
short-term investments at the end of December, which excludes $29.4
million book value of auction rate securities, totaled $136.8
million. Based on a fair value analysis in accordance with U.S.
GAAP, the Company has accounted for a net $6.5 million non-cash
other-than-temporary impairment charge to its quarterly earnings
and a $611,000 net reduction of temporary impairment through other
comprehensive income in the equity section of its balance sheet.
"We will continue to monitor our investments in auction rate
securities in light of the current debt market environment," stated
Mr. Knittel. Earnings Call Information The Synaptics second quarter
teleconference and webcast is scheduled to begin at 2:00 p.m.,
Pacific Time, on Thursday, January 22, 2009, during which the
Company will provide forward-looking information. To participate on
the live call, analysts and investors should dial 800-351-1564 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
http://www.synaptics.com/. About Synaptics Incorporated Synaptics
is a leading developer of human interface solutions for mobile
computing, communications, and entertainment devices. The Company
creates interface solutions for a variety of devices including
notebook PCs, PC peripherals, digital music players, and mobile
phones. The TouchPad(TM), Synaptics' flagship product, is
integrated into a majority of today's notebook computers. Consumer
electronics and computing manufacturers use Synaptics' solutions to
enrich the interaction between humans and intelligent devices
through improved usability, functionality, and industrial design.
The Company is headquartered in Santa Clara, California.
http://www.synaptics.com/ NOTE: Synaptics, TouchPad, and the
Synaptics logo are trademarks of Synaptics in the United States
and/or other countries. Use of Non-GAAP Financial Information In
evaluating its business, Synaptics considers and uses net income
per share 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 non-cash 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 Synaptics' anticipated revenue and revenue
growth rates; the success of our growth strategies; its beliefs
regarding the markets it serves; its assessment of its competitive
position and opportunities in those markets; its assessment of
market demands and trends in target markets; and its assessment of
consumer demands for various applications. 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 it
serves, and (d) 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, 2008. All forward-looking statements are based on information
available to Synaptics on the date hereof, and Synaptics assumes no
obligation to update such statements. (Tables to Follow) SYNAPTICS
INCORPORATED CONSOLIDATED BALANCE SHEETS (In thousands, except
share data) (Unaudited) December 31, June 30, 2008 2008 Assets
Current assets: Cash and cash equivalents $109,604 $96,218 Short
term investments 27,165 50,298 Total cash, cash equivalents, and
short-term investments 136,769 146,516 Receivables, net of
allowances of $624 and $539, respectively 81,665 69,362 Inventories
22,121 21,065 Prepaid expenses and other current assets 4,626 3,417
Total current assets 245,181 240,360 Property and equipment, net
25,568 22,459 Goodwill 1,927 1,927 Non-current investments 29,443
37,946 Other assets 4,789 3,669 Total assets $306,908 $306,361
Liabilities and stockholders' equity Current liabilities: Accounts
payable $27,554 $27,784 Accrued compensation 7,255 6,510 Income
taxes payable 5,856 7,095 Convertible senior subordinated notes
65,303 - Other accrued liabilities 13,341 9,120 Total current
liabilities 119,309 50,509 Convertible senior subordinated notes -
125,000 Other liabilities 19,338 17,075 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; 60,000,000 shares
authorized; 42,961,996 and 42,500,535 shares issued, and 33,873,896
and 33,412,435 43 43 shares outstanding, respectively Additional
paid in capital 242,232 222,543 Less: 9,088,100 and 9,088,100
treasury shares, respectively, at cost (237,387) (237,387) Retained
earnings 166,051 130,895 Accumulated other comprehensive loss
(2,678) (2,317) Total stockholders' equity 168,261 113,777 Total
liabilities and stockholders' equity $306,908 $306,361 SYNAPTICS
INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In
thousands, except per share data) (Unaudited) Three Months Ended
Six Months Ended December 31, December 31, 2008 2007 2008 2007 Net
revenue $141,523 $98,650 $257,380 $185,342 Cost of revenue (1)
83,717 57,605 152,981 108,833 Gross margin 57,806 41,045 104,399
76,509 Operating expenses Research and development (1) 15,940
11,693 31,745 22,095 Selling, general, and administrative (1)
13,714 11,415 28,284 22,165 Total operating expenses 29,654 23,108
60,029 44,260 Operating income 28,152 17,937 44,370 32,249 Interest
income 974 3,013 2,232 6,008 Interest expense (321) (449) (770)
(924) Gain on settlement of debt - - - 2,689 Gain on early
retirement of debt 3,600 - 3,600 - Impairment of investment - - -
(4,000) Impairment of auction rate securities investments (6,509) -
(6,509) - Income before income taxes 25,896 20,501 42,923 36,022
Provision for income taxes (2) 4,699 6,305 7,767 10,564 Net income
$21,197 $14,196 $35,156 $25,458 Net income per share: Basic $0.63
$0.35 $1.04 $0.64 Diluted $0.60 $0.33 $1.00 $0.61 Shares used in
computing net income per share: Basic 33,833 40,241 33,736 39,779
Diluted 35,057 42,480 35,311 42,030 (1) Includes share-based
compensation charges of: Cost of revenue $402 $350 $813 $589
Research and development 1,962 1,588 3,978 2,759 Selling, general,
and administrative 3,292 2,547 6,746 4,466 $5,656 $4,485 $11,537
$7,814 (2) Includes tax benefit for share-based compensation
charges of: $1,769 $1,676 $3,737 $3,373 Non-GAAP net income per
share Basic $0.87 $0.42 $1.40 $0.80 Diluted $0.84 $0.40 $1.34 $0.76
SYNAPTICS INCORPORATED Computation of Basic and Diluted Net Income
Per Share (in thousands except per share data) (Unaudited) Three
Months Ended Six Months Ended December 31, December 31, 2008 2007
2008 2007 Numerator: Basic and diluted net income $21,197 $14,196
$35,156 $25,458 Denominator: Shares, basic 33,833 40,241 33,736
39,779 Effect of dilutive share-based awards 1,224 2,147 1,575
2,251 Effect of convertible notes - 92 - - Shares, diluted 35,057
42,480 35,311 42,030 Net income per share: Basic $0.63 $0.35 $1.04
$0.64 Diluted $0.60 $0.33 $1.00 $0.61 Computation of non-GAAP basic
and diluted net income per share (unaudited): Numerator: Reported
net income $21,197 $14,196 $35,156 $25,458 Non-GAAP adjustments
(net of tax): Gain on settlement of debt - - - (2,078) Impairment
of investment - - - 4,000 Gain on early retirement of debt (2,133)
- (2,133) - Impairment of auction rate security investments 6,509 -
6,509 - Share-based compensation 3,887 2,809 7,800 4,441 Non-GAAP
basic and diluted net income 29,460 17,005 47,332 31,821
Denominator: Shares, basic 33,833 40,241 33,736 39,779 Effect of
dilutive share-based awards 1,224 2,147 1,575 2,251 Effect of
convertible notes - 92 - - Shares, diluted 35,057 42,480 35,311
42,030 Non-GAAP net income per share: Basic $0.87 $0.42 $1.40 $0.80
Diluted $0.84 $0.40 $1.34 $0.76 For more information contact:
Jennifer Jarman The Blueshirt Group 415-217-7722 DATASOURCE:
Synaptics Incorporated CONTACT: Jennifer Jarman of The Blueshirt
Group, +1-415-217-7722, , for Synaptics Incorporated Web site:
http://www.synaptics.com/
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