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Synaptics Reports Third Fiscal Quarter Financial Results
Synaptics (Nasdaq: SYNA), a leader in touch pads and other human interface solutions for mobile computing and communications devices, today reported financial results for the third fiscal quarter ended March 31, 2003.
Net revenue for the third quarter of fiscal 2003 was $26.1 million compared to $24.4 million for the third quarter of the prior fiscal year. Actual (GAAP) net income for the third quarter of fiscal 2003 was $2.1 million, or $0.09 per basic share and $0.08 per diluted share. This compares with GAAP net income of $2.4 million, or $0.14 per basic share and $0.10 per diluted share, for the third quarter of fiscal 2002.
Pro forma net income for the third fiscal quarter, excluding non-cash charges related to the amortization of intangibles and deferred stock-based compensation, was $2.2 million, or $0.09 per basic and diluted share. This compares to pro forma net income of $2.6 million, or $0.15 per basic share and $0.11 per diluted share, for the third quarter of the prior fiscal year.
"We are pleased to report both sequential growth in revenue and profits as well as a return to year-over-year revenue growth," stated Francis Lee, President and Chief Executive Officer of Synaptics. "Our results reflect solid execution in what is still a challenging business environment and in a quarter that historically is seasonally down. Innovation and design activity in the notebook market remains strong, and we have more than doubled our revenue contributions from our new market initiatives through the first nine-months of this fiscal year."
Russ Knittel, Synaptics' Chief Financial Officer, added, "We enter our fourth fiscal quarter with a strong backlog and anticipate sequential revenue growth of up to four percent. We expect this upside to be driven primarily by shipments into the new markets, as industry estimates call for flat to slightly down notebook shipments. While new design activity in the notebook market remains highly competitive, our current visibility points to continued sequential revenue growth in the September quarter."
About Synaptics Incorporated
Synaptics develops advanced interface solutions for products as diverse as notebook and desktop computers, mobile computing and communications devices, automotive applications, and security solutions. Synaptics' products include TouchPad(TM), the industry standard notebook pointing device; ClearPad(TM), a capacitive touch screen solution; TouchStyk(TM), a modular and capacitive pointing stick solution; Spiral®, an inductive, proximity sensing pen input system; and QuickStroke®, a proprietary Chinese handwriting recognition software. More information about Synaptics can be found on the World Wide Web at www.synaptics.com.
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' revenue expectations, earnings expectations, cash flow expectations, and competitive position in both notebook computers and new market initiatives. 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) market demand for Synaptics' products, (b) market demand for OEMs' products using Synaptics' products, © the failure of Synaptics' products and OEMs' products to deliver commercially acceptable performance, and (d) other risks as identified from time to time in Synaptics' SEC reports, including Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and the Company's 10-K for the fiscal year ended June 30, 2002. All forward-looking statements are based on information available to Synaptics on the date hereof, and Synaptics assumes no obligation to update such statements.
Synaptics discloses pro forma or non-GAAP measures of net income and earnings per share. Synaptics believes that this pro forma information provides greater comparability regarding its ongoing operating performance. These measures should not be considered an alternative to measurements required by accounting principles generally accepted in the United States ("U.S. GAAP"), such as net income and earnings per share. These pro forma measures are unlikely to be comparable to pro forma information provided by other companies. In accordance with SEC regulations, reconciliation of the Synaptics U.S. GAAP information to the pro forma information is provided in the table attached. We will also make available on the investor relations page of our web site at www.synaptics.com this press release, a replay of the Webcast, and a reconciliation of the difference between the GAAP and non-GAAP financial measures.
CONTACT: Russ Knittel of Synaptics Incorporated, +1-408-434-0110, ext. 140, or russk@synaptics.com; or Jennifer Jarman of the blueshirt group, +1-415-217-7722, or jennifer@blueshirtgroup.com, for Synaptics Incorporated.
SYNAPTICS INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (unaudited)
Three Months Ended Nine Months Ended March 31, March 31, 2003 2002 2003 2002
Net revenue $26,103 $24,421 $72,479 $74,392 Cost of revenue 15,385 14,197 41,745 44,180 Gross margin 10,718 10,224 30,734 30,212 Operating expenses Research and development 4,942 4,072 15,077 11,880 Selling, general, and administrative 2,715 2,351 7,957 7,451 Amortization of intangible assets -- 29 40 104 Amortization of deferred stock compensation 137 121 363 363 Total operating expenses 7,794 6,573 23,437 19,798
Operating income 2,924 3,651 7,297 10,414 Interest income 259 151 815 232 Interest expense (35) (43) (121) (156) Income before income taxes 3,148 3,759 7,991 10,490 Provision for income taxes 1,079 1,321 2,877 3,663 Net income $2,069 $2,438 $5,114 $6,827
Net income per share: Basic $0.09 $0.14 $0.22 $0.66 Diluted $0.08 $0.10 $0.21 $0.31
Shares used in computing net income per share: Basic 23,537 17,653 23,407 10,329 Diluted 25,125 24,422 24,869 21,720
Pro forma results (unaudited) Reported net income $2,069 $2,438 $5,114 $6,827 Pro forma adjustments: Amortization of goodwill and other acquired intangible assets -- 29 40 104 Amortization of deferred stock compensation 137 121 363 363 Pro forma net income $2,206 $2,588 $5,517 $7,294
Pro forma earnings per share Basic $0.09 $0.15 $0.24 $0.71 Diluted $0.09 $0.11 $0.22 $0.34
SYNAPTICS INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
March 31, June 30, 2003 2002 (Unaudited)
Assets Current assets: Cash and cash equivalents $38,584 $45,491 Short term investments 34,314 19,689 Accounts receivable, net of allowances of $ 210 and $200 at March 31, 2003 and June 30, 2002, respectively 14,152 13,242 Inventories 5,782 5,867 Prepaid expenses and other current assets 3,745 2,964 Total current assets 96,577 87,253
Property and equipment, net 1,870 2,043 Goodwill 765 765 Other acquired intangible assets, net -- 40 Other assets 270 280 Total assets $99,482 $90,381
Liabilities and stockholders' equity Current liabilities: Accounts payable $6,806 $5,867 Accrued compensation 2,383 2,161 Accrued warranty 1,002 1,002 Income taxes payable 3,050 2,646 Other accrued liabilities 2,343 1,814 Capital leases and equipment financing obligations 286 445 Total current liabilities 15,870 13,935 Capital leases and equipment financing obligations, net of current portion 55 259 Note payable to a related party 1,500 1,500 Other liabilities 741 684
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; 23,567,455 and 23,182,757 shares issued and outstanding, respectively 24 23 Additional paid in capital 77,294 75,013 Deferred stock compensation (1,339) (1,085) Notes receivable from stockholders (755) (876) Retained earnings 5,979 865 Accumulated other comprehensive income 113 63 Total stockholders' equity 81,316 74,003 Total liabilities and stockholders' equity $99,482 $90,381
SOURCE Synaptics
Russ Knittel of Synaptics Incorporated, +1-408-434-0110, ext. 140, or russk@synaptics.com, or Jennifer Jarman of the blueshirt group, +1-415-217-7722, or jennifer@blueshirtgroup.com, for Synaptics Incorporated
http://www.synaptics.com
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