Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
July 28, 2008
Date of Report (Date of earliest event reported)
SYNAPTICS INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
| DELAWARE | 000-49602 | 77-0118518 | ||
| (State or Other | (Commission File Number) | (IRS Employer | ||
| Jurisdiction of Incorporation) | Identification No.) |
3120 SCOTT BLVD.
SUITE 130
SANTA CLARA, CALIFORNIA 95054
SUITE 130
SANTA CLARA, CALIFORNIA 95054
(Address of Principal Executive Offices) (Zip Code)
(408) 454-5100
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Table of Contents
Item 2.02. Results of Operations and Financial Condition.
The registrant is furnishing this Current Report on Form 8-K in connection with the disclosure
of information, in the form of the textual information from a press release released on July 31,
2008. The registrant’s press release is attached as Exhibit 99.1.
The information in this Current Report on Form 8-K (including the exhibit) is furnished
pursuant to Item 2.02 and shall not be deemed to be “filed” for the purpose of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.
The registrant does not have, and expressly disclaims, any obligation to release publicly any
updates or any changes in the registrant’s expectations or any change in events, conditions, or
circumstances on which any forward-looking statement is based.
The text included with this Current Report is available on the registrant’s website located at
www.synaptics.com, although the registrant reserves the right to discontinue that availability at
any time.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. | |
Resignation of W. Ronald Van Dell
On July 28, 2008, W. Ronald Van Dell announced his intent to resign effective October 31,
2008. Francis Lee, President and Chief Executive Officer of Synaptics stated, “On behalf of
myself, our board of directors, our stockholders, and our employees, I would like to thank Ron for
his years of service on Synaptics Board of Directors.”
Appointment of Thomas Tiernan
On
July 28, 2008, our Board of Directors appointed Thomas Tiernan
as a director, President, and Chief
Operating Officer effective immediately. Mr. Tiernan, 44, has been Executive Vice President and
General Manager of our company since July 2007. Mr. Tiernan served as Senior Vice President of our
company from March 2006 until July 2007. Prior to joining our company, Mr. Tiernan served as Vice
President and General Manager of Symbol Technologies’ Mobile Computing Division. From 1985 to 2004,
Mr. Tiernan held various management and executive positions at Hewlett-Packard, including running
the Network Storage business in the Americas, the Enterprise Systems business in Asia Pacific, and
the PC business in Japan. Mr. Tiernan holds a Bachelor’s Degree in Electrical Engineering from
California State Polytechnic University and a Masters of Science in Computer Engineering from Santa
Clara University.
There is no arrangement, understanding, or family relationship pursuant to which Mr. Tiernan
was selected as a director and our President and Chief Operating Officer. There are no related party transactions
between us and Mr. Tiernan reportable under Item 404(a) of
Regulation S-K.
Francis Lee will continue as our Chief Executive Officer.
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Item 8.01. Other Events.
On July 31, 2008, we announced a 3-for-2 stock split to be effected as a stock dividend. The
stock split will be effective for stockholders of record after the close of market on August 15,
2008 and will be payable on August 29, 2008. The registrant’s press release announcing the stock
split is attached as Exhibit 99.1.
Our Board of Directors has authorized the repurchase of up to an additional $80 million of
common stock from time to time in the open market or in privately negotiated transactions. The
timing and amount of any future purchases will depend upon market
conditions and other factors.
Item 9.01. Financial Statements and Exhibits.
| (a) | Financial Statements of Business Acquired. | ||
| Not applicable. | |||
| (b) | Pro Forma Financial Information. | ||
| Not applicable. | |||
| (c) | Shell Company Transactions. | ||
| Not applicable. | |||
| (d) | Exhibits. |
| Exhibit | ||
| Number | ||
99.1
|
Press release from Synaptics Incorporated, dated July 31, 2008, entitled “Synaptics Reports Record Revenue for Fiscal 2008; Announces 3-for-2 Stock Split” |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SYNAPTICS INCORPORATED |
||||
| Date: July 31, 2008 | By: | /s/ Russell J. Knittel | ||
| Russell J. Knittel | ||||
| Executive Vice President, Chief Financial Officer, Secretary, and Treasurer | ||||
Table of Contents
EXHIBIT INDEX
| Exhibit | ||
| Number | Description | |
99.1
|
Press release from Synaptics Incorporated, dated July 31, 2008, entitled “Synaptics Reports Record Revenue for Fiscal 2008; Announces 3-for-2 Stock Split” |
Exhibit 99.1
| For more information contact: | |||
|
Jennifer Jarman The Blueshirt Group 415-217-7722 jennifer@blueshirtgroup.com |
Synaptics Reports Record Revenue for Fiscal 2008; Announces
3-for-2 Stock Split
3-for-2 Stock Split
Company Also Expands Stock Repurchase Program
Santa Clara, CA — July 31, 2008 — Synaptics (Nasdaq: SYNA), a leading developer of human
interface solutions for mobile computing, communications, and entertainment devices, today reported
financial results for the fourth quarter and year ended June 30, 2008. The Company’s GAAP results
reflect the expensing of non-cash share-based compensation for all periods presented.
Net revenue for the fourth quarter of fiscal 2008 was $96.9 million, an increase of approximately
35% over $71.6 million in net revenue for the fourth quarter of fiscal 2007. Net income for the
fourth quarter of fiscal 2008 was $2.6 million, or $0.11 per diluted share, compared with net
income of $7.4 million, or $0.27 per diluted share, for the fourth quarter of fiscal 2007. Net
income for the fourth quarter of fiscal 2008 included a non-cash charge for other-than-temporary
impairment of $4.7 million related to the Company’s investment in auction rate securities. Net
income, excluding non-cash charges for share-based compensation and the other-than-temporary
impairment, was $10.7 million, or $0.46 per diluted share, for the fourth quarter of fiscal 2008,
compared with net income, excluding share-based compensation, of $10.0 million, or $0.36 per
diluted share, for the fourth quarter of fiscal 2007.
Net revenue for fiscal 2008 was $361.1 million, an increase of approximately 35% over $266.8
million for fiscal 2007. Net income for fiscal 2008 was $31.1 million, or $1.19 per diluted share.
This compares with net income of $26.5 million, or $0.94 per diluted share, for fiscal 2007. Net
income, excluding non-cash charges for share-based compensation and non-recurring items for fiscal
2008, was $51.4 million, or $1.96 per diluted share, compared with net income, excluding
share-based compensation and non-recurring items, of $37.6 million, or $1.31 per diluted share, for
fiscal 2007.
“Fiscal 2008 was a phenomenal year for Synaptics as we achieved both record annual revenue and
non-GAAP net income, which grew 35% and 37% year over year, respectively,” stated Francis Lee,
President and Chief Executive Officer of Synaptics. “Our strong performance reflects solid
execution and progress with regard to our diversification strategy as our investments in the mobile
phone market are beginning to pay off, generating material revenue for the first time starting in
the fiscal fourth quarter. Synaptics continues to benefit from the growing demand for innovative
touch interface solutions in today’s increasingly complex devices, and we believe we are
well-positioned to deliver record revenue and profits in fiscal 2009.”
Russ Knittel, Synaptics’ Chief Financial Officer, added, “As we look ahead to the current quarter
and new fiscal year, we remain mindful of the broader economic concerns and potential impact on
customer order patterns. We exited the June quarter with backlog of $50.3 million. Based on our
backlog and current visibility, we anticipate revenue in the September quarter will be $108 million to $114 million, an
increase of 25% to 31% over the comparable quarter last year. Additionally, our current outlook suggests that
revenue may grow 20% to 30% in fiscal 2009.”
The Company also announced that its Board of Directors has approved a three-for-two split of
Synaptics’ common stock to be effected as a stock dividend. Each shareholder of record at the close
of market on August 15, 2008 will receive one additional share for every two outstanding shares
held on the record date, the payable date will be August 29,
2008, and trading will begin on a split-adjusted
basis on September 2, 2008. The
Company’s Form 10-K for fiscal 2008 will include the effect of the split when filed. In addition,
the Board of Directors has authorized the repurchase of up to an additional $80 million of common
stock from time to time in the open market or in privately negotiated transactions. The timing and
amount of any future purchases will depend upon market conditions and other factors.
Mr. Lee continued, “I am pleased to report that we bought back an additional one million shares
during the fourth quarter. This buyback, in conjunction with our impending stock split and
authorization of additional stock repurchases, reflects our confidence in Synaptics’ prospects and
on-going commitment to enhancing long-term stockholder value.”
Synaptics’
cash and short-term investments at the end of June totaled
$146.5 million and exclude all auction rate securities, which
have been classified as non-current assets. The Company’s total investment in auction rate securities was
$47.4 million, all of which are investment grade securities that are paying interest at the
contractual rates. Based on a fair value analysis in accordance with U.S. GAAP, the Company has
accounted for non-cash impairment during fiscal 2008 of approximately $9.5 million, of which $2.5
million is temporary and $7.0 million is other-than-temporary.
“As we indicated last quarter we will continue to monitor our investments in auction rate
securities in light of the current debt market environment. We are confident that our existing cash
and other short-term investments and our expected cash flow from operations will be sufficient to
allow us to continue to hold our current auction rate securities until the liquidity issues are
resolved.” stated Mr. Knittel.
Earnings Call Information
The Synaptics fourth quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific
Time, on Thursday, July 31, 2008, during which the Company will provide forward-looking
information. To participate on the live call, analysts and investors should dial 800-257-2101 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 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. 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 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, revenue growth rates, and cash
flow from operations; its beliefs regarding the liquidity and quality of its investments in auction
rates securities; its beliefs regarding the markets it serves; its 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, 2007. 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)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| June 30, | June 30, | |||||||
| 2008 | 2007 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 96,218 | $ | 45,915 | ||||
Short term investments |
50,298 | 219,102 | ||||||
Total cash, cash equivalents, and short-term investments |
146,516 | 265,017 | ||||||
Receivables, net of allowances of $539 and $419, respectively |
69,362 | 56,721 | ||||||
Inventories |
21,065 | 12,034 | ||||||
Prepaid expenses and other current assets |
3,417 | 4,245 | ||||||
Total current assets |
240,360 | 338,017 | ||||||
Property and equipment, net |
22,459 | 19,400 | ||||||
Goodwill |
1,927 | 1,927 | ||||||
Non-current auction rate securities |
37,946 | — | ||||||
Other assets |
3,669 | 13,968 | ||||||
Total assets |
$ | 306,361 | $ | 373,312 | ||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 27,784 | $ | 21,552 | ||||
Accrued compensation |
6,510 | 5,372 | ||||||
Income taxes payable |
7,095 | 3,400 | ||||||
Other accrued liabilities |
9,120 | 6,272 | ||||||
Note payable |
— | 1,500 | ||||||
Total current liabilities |
50,509 | 38,096 | ||||||
Convertible senior subordinated notes |
125,000 | 125,000 | ||||||
Other liabilities |
17,075 | 2,129 | ||||||
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; 31,363,057 and 29,666,660 shares issued, respectively |
31 | 30 | ||||||
Additional paid in capital |
222,555 | 180,746 | ||||||
Less: 9,088,100 and 3,588,100 treasury shares,
respectively, at cost |
(237,387 | ) | (72,345 | ) | ||||
Retained earnings |
130,895 | 99,795 | ||||||
Accumulated other comprehensive loss |
(2,317 | ) | (139 | ) | ||||
Total stockholders’ equity |
113,777 | 208,087 | ||||||
Total liabilities and stockholders’ equity |
$ | 306,361 | $ | 373,312 | ||||
SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Net revenue |
$ | 96,854 | $ | 71,576 | $ | 361,057 | $ | 266,787 | ||||||||
Cost of revenue (1) |
58,085 | 43,635 | 213,606 | 160,913 | ||||||||||||
Gross margin |
38,769 | 27,941 | 147,451 | 105,874 | ||||||||||||
Operating expenses |
||||||||||||||||
Research and development (1) |
14,438 | 10,755 | 50,093 | 39,386 | ||||||||||||
Selling, general, and administrative (1) |
13,780 | 10,180 | 48,126 | 36,247 | ||||||||||||
Restructuring costs |
— | — | — | 915 | ||||||||||||
Total operating expenses |
28,218 | 20,935 | 98,219 | 76,548 | ||||||||||||
Operating income |
10,551 | 7,006 | 49,232 | 29,326 | ||||||||||||
Interest income |
1,351 | 2,825 | 9,652 | 11,055 | ||||||||||||
Interest expense |
(449 | ) | (487 | ) | (1,822 | ) | (1,950 | ) | ||||||||
Gain on settlement of debt |
— | — | 2,689 | — | ||||||||||||
Impairment of investment |
— | — | (4,000 | ) | — | |||||||||||
Impairment of auction rate securities investments |
(4,726 | ) | — | (6,963 | ) | — | ||||||||||
Income before income taxes |
6,727 | 9,344 | 48,788 | 38,431 | ||||||||||||
Provision for income taxes (2) |
4,093 | 1,913 | 17,688 | 11,897 | ||||||||||||
Net income |
$ | 2,634 | $ | 7,431 | $ | 31,100 | $ | 26,534 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.12 | $ | 0.29 | $ | 1.24 | $ | 1.04 | ||||||||
Diluted |
$ | 0.11 | $ | 0.27 | $ | 1.19 | $ | 0.94 | ||||||||
Shares used in computing net income
per share: |
||||||||||||||||
Basic |
22,646 | 25,710 | 25,111 | 25,558 | ||||||||||||
Diluted |
23,493 | 27,678 | 26,243 | 29,064 | ||||||||||||
(1) Includes share-based compensation charges of: |
||||||||||||||||
Cost of revenue |
$ | 136 | $ | 258 | $ | 1,102 | $ | 750 | ||||||||
Research and development |
1,765 | 1,355 | 6,321 | 5,091 | ||||||||||||
Selling, general, and administrative |
2,934 | 2,284 | 10,080 | 8,453 | ||||||||||||
| $ | 4,835 | $ | 3,897 | $ | 17,503 | $ | 14,294 | |||||||||
(2) Includes tax benefit for share-based compensation charges of: |
||||||||||||||||
| $ | 1,486 | $ | 1,365 | $ | 6,114 | $ | 4,140 | |||||||||
Non-GAAP net income per share |
||||||||||||||||
Basic |
$ | 0.47 | $ | 0.39 | $ | 2.05 | $ | 1.47 | ||||||||
Diluted |
$ | 0.46 | $ | 0.36 | $ | 1.96 | $ | 1.31 | ||||||||
SYNAPTICS INCORPORATED
Computation of Basic and Diluted Net Income Per Share
(in thousands except per share data)
(Unaudited)
Computation of Basic and Diluted Net Income Per Share
(in thousands except per share data)
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Numerator: |
||||||||||||||||
Basic net income |
$ | 2,634 | $ | 7,431 | $ | 31,100 | $ | 26,534 | ||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
— | 76 | — | 878 | ||||||||||||
Diluted net income |
$ | 2,634 | $ | 7,507 | $ | 31,100 | $ | 27,412 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
22,646 | 25,710 | 25,111 | 25,558 | ||||||||||||
Effect of dilutive share-based awards |
847 | 1,261 | 1,132 | 1,465 | ||||||||||||
Effect of convertible notes |
— | 707 | — | 2,041 | ||||||||||||
Shares, diluted |
23,493 | 27,678 | 26,243 | 29,064 | ||||||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.12 | $ | 0.29 | $ | 1.24 | $ | 1.04 | ||||||||
Diluted |
$ | 0.11 | $ | 0.27 | $ | 1.19 | $ | 0.94 | ||||||||
Computation of non-GAAP basic and diluted net income per share (unaudited): |
||||||||||||||||
Numerator: |
||||||||||||||||
Reported net income |
$ | 2,634 | $ | 7,431 | $ | 31,100 | $ | 26,534 | ||||||||
Non-GAAP adjustments: |
||||||||||||||||
Gain on settlement of debt, net of tax |
— | — | (2,078 | ) | — | |||||||||||
Impairment of investment, net of tax |
— | — | 4,000 | — | ||||||||||||
Impairment of auction rate securities investments |
4,726 | — | 6,963 | — | ||||||||||||
Restructuring costs (net of tax) |
— | — | — | 890 | ||||||||||||
Share-based compensation (net of tax) |
3,349 | 2,532 | 11,389 | 10,154 | ||||||||||||
Non-GAAP basic net income |
10,709 | 9,963 | 51,374 | 37,578 | ||||||||||||
Interest expense and amortization of debt issuance
costs on convertible notes (net of tax) |
— | 76 | — | 878 | ||||||||||||
Non-GAAP diluted net income |
$ | 10,709 | $ | 10,039 | $ | 51,374 | $ | 38,456 | ||||||||
Denominator: |
||||||||||||||||
Shares, basic |
22,646 | 25,710 | 25,111 | 25,558 | ||||||||||||
Effect of dilutive share-based awards |
847 | 1,587 | 1,132 | 1,763 | ||||||||||||
Effect of convertible notes |
— | 707 | — | 2,041 | ||||||||||||
Shares, diluted |
23,493 | 28,004 | 26,243 | 29,362 | ||||||||||||
Non-GAAP net income per share: |
||||||||||||||||
Basic |
$ | 0.47 | $ | 0.39 | $ | 2.05 | $ | 1.47 | ||||||||
Diluted |
$ | 0.46 | $ | 0.36 | $ | 1.96 | $ | 1.31 | ||||||||
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This website 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 our most recent fiscal year, 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.