Revenue
4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
137607 127041 143,040 163324 230183 222607 205763 204,271
Cost of Revenue
4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
74203 66471 74010 82,241 115062 113328 109048 111841
Gross Margin
4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
63404 60570 69030 81083 115121 109279 94545 92,430
Net Income
4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
12300 6053 11114 36446 45320 34939 17334 (40,056)
EPS
4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
.36 .18 .33 1.07 1.29 1.00 .48 (1.12)
Diluted Shares
4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
34505 34014 33313 34135 35150 35020 36059 35,685
Inventories
4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
31667 31236 32124 43911 49948 57293 51746 70,188
Cash
4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
305005 312889 292531 315513 355303 331572 369424 391,481
Debt
4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
0 0 0 0 0 0 2.3 0
Cashflow
4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
19130 13532 10460 15618 14028 18906 30,820 9,056
I would like to thank Seekingalpha.com for the use of their transcripts.
Subject: Synaptics Incorporated (SYNA)
Author: Buynholdisdead
Date: 05/08/14
Sector: Technology
Industry: Computer Hardware
Synaptics Incorporated (SYNA) Closing Price $59.44
Dow:16,583.34
Nasdaq:4,071.87
SP500:1,878.48
Oil: $91.66
Nat Gas: $4.53
Gold: $1287.60
Silver: $19.12
Copper: $3.08
Corn: $507.50
Lean Hogs: $120.18
Feeder Cattle: $191.38
Coffee: $191.15
Cotton: $83.71
Lumber: $343.0
Today the Price is $59.75: The P/E ratio is 37.45
**August 2nd, 2012 4Q:2012 earnings highlights:
**Revenues were $137.6 million down 4% from $143.4 million
**TTM Revenues were $548.2 million down 8% from $598.5 million
**Cost of Revenues were $74.2 million down 10% from $82.8 million
**Gross Profit were $63.4 million up 4% from $60.6 million
**Gross Profit Margin were 46%
**TTM Gross Profit were $255.6 million up 4% from 246.1 million
**TTM Gross Profit Margin were 47%
**Net Income were $12.3 million down 12% from $13.9 million
**4Q Earnings per share were $.36 down 10% from $.40
**TTM Earnings per share were $1.57 down 13% from $1.80
**Diluted share count were 34,505,000 down 1% from 35,011,000 Quarter over Quarter
**Cash Flow for the quarter was $19.1 million up 218% from $6 million
**TTM cash flow was $91 million up 17% from $78 million
**Cash $305 million up from 247.2 million
**Debt 0
**Inventory for the quarter were 31,667,000 up 10% from 28,850,000
**R & D for the quarter were $30.5 million up 11% from $27.5 million
**Percentage of R&D to revenue 22%
**Trading range between $24.78 to $31.31
**P/E range 10.61 to 16.26
**P/S range 2.96 to 4.26
** Stock went up $4.40 the day after the report
**Purchased Pacinian Corporation
**Purchased IDT, video display, for $5.0 million
**Introduced ForcePad, ThinTouch Technology, and expanded ClearPad capabilities
**Revenue mix from PC and non-PC applications was approximately 56% and 44% respectively
**Backlog of approximately 50 million
**October 25th, 2012 1Q:2013 earnings highlights:
**Revenues were $127 million down 5% from $133.4 million
**TTM Revenues were $541.8 million down 6% from $578.7 million
**Cost of Revenues were $66.5 million down 8% from $72.2 million
**Gross Profit were $60.6 million down 1% from $61.3 million
**Gross Profit Margin were 48%
**TTM Gross Profit were $254.9 million up 4% from 244.6 million
**TTM Gross Profit Margin were 47%
**Net Income were $6.1 million down 53% from $13 million
**1Q Earnings per share were $.18 down 54% from $.39
**TTM Earnings per share were $1.57 down 13% from $1.80
**Diluted share count were 34,014,000 down 1% from 34,505,000 Quarter over Quarter
**Cash Flow for the quarter was $13.5 million down 51% from $27.4 million
**TTM cash flow was $77.1 million down 14% from $90.1 million
**Cash $312.9 million up from 305 million
**Debt 0
**Inventory for the quarter were 31,236,000 down from 31,667,000
**R & D for the quarter were $32.8 million up 16% from $28.2 million
**Percentage of R&D to revenue 26%
**Trading range between $22.60 to 31.56
**P/E range 14.39 to 20.10
**P/S range 1.42 to 1.98
** Stock went up $1.68 the day after the report
**Received Windows certification through oem’s such as Lenovo and Razer
**Revenue mix from PC and non-PC applications was approximately 49% and 51% respectively
**First Quarter non-pc sold more than pc
**Backlog of $74 million
**January 24th, 2013 2Q:2013 earnings highlights:
**Revenues were $143 million down 2% from $145.5 million
**TTM Revenues were $539.4 million down 4% from $564.7 million
**Cost of Revenues were $74 million down 4% from $76.7 million
**Gross Profit were $69 million up from $68.7 million
**Gross Profit Margin were 48%
**TTM Gross Profit were $254.9 million up 4% from 244.6 million
**TTM Gross Profit Margin were 47%
**Net Income were $11.1 million down 36% from $17.4 million
**2Q Earnings per share were $.33 down 35% from $.51
**TTM Earnings per share were $1.19 down 29% from $1.67
**Diluted share count were 33,313,000 down 2% from 34,005,000 Quarter over Quarter
**Cash Flow for the quarter was $10.5 million down 61% from $26.9 million
**TTM cash flow was $75.6 million down 8% from $81.9 million
**Cash $292.5 million down from 312.9 million
**Debt 0
**Inventory for the quarter were 32,124,000 down from 31,236,000
**R & D for the quarter were $34.3 million up 15% from $29.8 million
**Percentage of R&D to revenue 24%
**Trading range between $22.94 to $39.75
**P/E range 19.27 to 33.40
**P/S range 1.42 to 2.45
** Stock went up $3.88 the day after the report
**continue to shift into many of the flagship smartphones on the market
**Revenue mix from PC and non-PC applications was approximately 43% and 57% respectively
**Non-pc (mobile) continues to gain traction
**Net income continues to reflect additional operating expense from recent acquisitions
**Rick Bergman (CEO) on conference call states that topline growth is number one priority.
**Unidentified analyst said a competitor suggested that in 6 quarters the touch market will be monetized and declines may begin to flow. Rick Bergman states they have a several year roadmap and doesn’t see peer price play in that time frame.
**Backlog of approximately $79 million
**April 25th, 3Q:2013 earnings highlights:
**Revenues were $163.3 million up 24% from $131.7 million
**TTM Revenues were $571.3 million up 3% from $554 million
**Cost of Revenues were $82.2 million up 18% from $69.5 million
**Gross Profit were $81.1 million up 30% from $62.2 million
**Gross Profit Margin were 50%
**TTM Gross Profit were $274.1 million up 8% from 252.8 million
**TTM Gross Profit Margin were 48%
**Net Income were $36.4 million up 219% from $11.4 million
**3Q Earnings per share were $1.07 up 224% from $.33
**TTM Earnings per share were $1.94 up 20% from $1.62
**Diluted share count were 34,135,000 up 2% from 33,313,000 Quarter over Quarter
**Cash Flow for the quarter was $15.6 million down 11% from $17.6 million
**TTM cash flow was $58.7 million down 25% from $77.9 million
**Cash $315.5 million up from 292.5 million
**Debt 0
**Inventory for the quarter were 43,911,000 up from 32,124,000
**R & D for the quarter were $36.7 million up 37% from $29.4 million
**Percentage of R&D to revenue 22%
**Trading range between $33.56 to $45.40
**P/E range 17.30 to 23.40
**P/S range 2.00 to 2.71
** Stock went up $5.59 the day after the report
**One time non-recurring , non-cash item of $15.8 million driving up net income
**Revenue from mobile products totaled $104.7 million and was up 57.2% YoY.
**Mobile products revenue includes all touchscreen and video display products
**Revenue mix from PC and non-PC applications was approximately 36% and 64% respectively
**Non-pc (mobile) continues to gain traction
**Backlog of approximately $124 million
**Samsung AirView capabilities take advantage of next-gen ClearPad with patented 3d touch
**Kathy Bayless CFO Tablets growing nicely but not 10% yet
**August 1st, 4Q:2013 earnings highlights:
**Revenues were $230.2 million up 67% from $137.6 million
**TTM Revenues were $663.6 million up 21% from $548.2 million
**Cost of Revenues were $115.1 million up 55% from $74.2 million
**Gross Profit were $115.1 million up 82% from $63.4 million
**Gross Profit Margin were 50%
**TTM Gross Profit were $325.8 million up 27% from 255.6 million
**TTM Gross Profit Margin were 49%
**Net Income were $45.3 million up 268% from $12.3 million
**4Q Earnings per share were $1.29 up 258% from $.36
**TTM Earnings per share were $2.89 up 84% from $1.57
**Diluted share count were 35,150,000 up 3% from 34,135,000 Quarter over Quarter
**Cash Flow for the quarter was $14 million down 27% from $19.1 million
**TTM cash flow was $53.6 million down 41% from $91 million
**Cash $355.3 million up from 315.5 million
**Debt 0
**Inventory for the quarter were 49,948,000 up 14% from 43,911,000
**R & D for the quarter were $40.9 million up 34% from $30.5 million
**Percentage of R&D to revenue 18%
**Trading range between $34.98 to $44.99
**P/E range 12.10 to 15.57
**P/S range 1.85 to 2.38
**Increased buyback of stock by 100 million for a total authorization of $160 million
**Revenue mix from PC and non-PC applications was approximately 25% and 75% respectively
**Non-pc (mobile) continues to gain traction
**Backlog of approximately $96 million
**$46.3 million was used to repurchase 1.6 million shares bringing repurchases of shares to approximately 5% of shares outstanding.
**China vendors continue to edge up with Syna being well represented in 2nd tier phones
**With addition of Single Layer On-Cell multi-touch they are able to address the entry-level market.
**Launched ClearPad s7500 for large touchscreens up to 15.6 inches
**Smartphone market is huge with total units over 1 billion and unit growth forecast in excess of 20% over the next several years
**Given the technology advantages they see a long runway ahead in mobile.
**Pc’s are declining but they see growth rate in business for 2014 the same as 2013.
**Tablets are 5% of revenue expect that to grow
**China a little over 10% of revenue
**October 24th, 1Q:2014 earnings highlights:
**Revenues were $222.6 million up 75% from $127 million
**TTM Revenues were $759.2 million up 40% from $541.8 million
**Cost of Revenues were $113.3 million up 41% from $66.5 million
**Gross Profit were $109.3 million up 80% from $60.6 million
**Gross Profit Margin were 49%
**TTM Gross Profit were $374.5 million up 47% from 254.9 million
**TTM Gross Profit Margin were 49%
**Net Income were $34.9 million up 481% from $6 million
**1Q Earnings per share were $1.00 up 455% from $.18
**TTM Earnings per share were $3.71 up 173% from $1.36
**Diluted share count were 35,020,000 down from 35,150,000 Quarter over Quarter
**Cash Flow for the quarter was $18.9 million up 40% from $13.5 million
**TTM cash flow was $59 million down 23% from $77.1 million
**Cash $331.6 million up from 355.3 million
**Debt 0
**Inventory for the quarter were 57,293,000 up 15% from 49,948,000
**R & D for the quarter were $40.4 million up 19% from $32.8 million
**Percentage of R&D to revenue 18%
**Trading range between $38.33 to $56.55
**P/E range 10.33 to 15.24
**P/S range 1.77 to 2.6
**Stock went down $7.59 the day after the report
**Significant Mobile and Tablet design wins
**Revenue mix from PC and non-PC applications was approximately 27% and 73% respectively
**Backlog of approximately $117 million
**Announced acquisition of Validity which enters them into the fingerprint id market.
**Syna expects topline growth of over 50% over the same period last year.
**Rick Bergman states that volumes get really large in Q2 and Q3.
**Bought back 3.5% of shares outstanding but paid for the Validity transaction with stock. They used 50 million in stock buyback and still have 110 million authorization left.
**January 23rd, 2Q:2014 earnings highlights:
**Revenues were $205.8 million up 44% from $143 million
**TTM Revenues were $821.9 million up 52% from $539.4 million
**Cost of Revenues were $109 million up 47% from $74 million
**Gross Profit were $94.5 million up 37% from $69 million
**Gross Profit Margin were 46%
**TTM Gross Profit were $400 million up 57% from 255.2 million
**TTM Gross Profit Margin were 49%
**Net Income were $17.3 million up 56% from $11.1 million
**2Q Earnings per share were $.48 up 45% from $.33
**TTM Earnings per share were $3.83 up 219% from $1.20
**Diluted share count were 36,059,000 up 3% from 35,020,000 Quarter over Quarter
**Cash Flow for the quarter was $30.8 million up 193% from $10.5 million
**TTM cash flow was $98.2 million up 62% from $60.7 million
**Cash $369.4 million up 11% from 331.6 million
**Debt 2.3 million
**Inventory for the quarter were 51,746,000 down 10% from 57,293,000
**R & D for the quarter were $45.9 million up 34% from $34.3 million
**Percentage of R&D to revenue 22%
**Trading range between $43.94 to $63.76
**P/E range 11.47 to 16.65
**P/S range 1.93 to 2.80
**The stock went up $5.42 the day after the report
**Expect Validity acquisition to be accretive by end of fiscal year, earlier than previously anticipated.
**Revenue mix from PC and non-PC applications was approximately 35% and 65% respectively
**PC mix starting to come back a little.
**Backlog of approximately $117 million
**GAAP eps was impacted by additional operating costs and acquisition of Validity which closed November 7th
**Recent design wins with Amazon, Dell, Lenovo, Acer. ClearPad series 7 solution provided the most accurate finger and small object detection on the market.
**Finger print solution alone should grow from 30 million units last year to .5 billion units in two years. They essentially have full share in the market for enterprise notebooks incorporating fingerprint solutions.
**Expect to see a number of solutions in the second half of the year built around fingerprint technology on cellphones.
**They paid approximately $90.3 million in a combination of cash and 1.6 million shares of common stock for Validity. They also may pay up to an additional $162.5 million in earn-out payment primarily in cash
**They expect 20% fiscal growth per year and whatever Validity can add upon that.
**April 24th:2014 earnings highlights:
**3Q Revenues were $204.3 million up 25% from $163.3 million
**TTM Revenues were $862.9 million up 51% from $571 million
**Cost of Revenues were $111.8 million up 36% from $82.2 million
**Gross Profit were $92.4 million up 14% from $81.1 million
**Gross Profit Margin were 45%
**TTM Gross Profit were $411.3 million up 50% from 274.1 million
**TTM Gross Profit Margin were 48%
**Net Income were $(40,1) million down from $36.4 million
**3Q Earnings per share were (1.12) down from $1.07
**TTM Earnings per share were $1.64 down from $1.94
**Diluted share count were 35,685,000 down from 36,059,000 Quarter over Quarter
**Cash Flow for the quarter was $9.1 million down 41% from $15.6 million
**TTM cash flow was $91.7 million up 62% from $58.7 million
**Cash $391.5 million up 6% from 369.4 million
**Debt 0
**Inventory for the quarter were 70,188,000 up 36% from 51,746,000 QoQ
**R & D for the quarter were $49.4 million up 35% from $36.7 million
**Percentage of R&D to revenue 24%
**Trading range between $53.06 to $69.00
**P/E range 32.35 to 42.01
**P/S range 2.19. to 2.85
**Validity fingerprint ID business accretive to Non-GAAP results ahead of schedule
** up to 40% annual Revenue growth expected in fiscal 2014
**Charge for change to contingent consideration (Validity Acquisition) of 53 million
**Revenue mix from mobile and PC products was 74% and 26% respectively
** Dso’s were 66 days
**Inventory Turns were 6
This was a solid quarter for Revenues, up 25% YoY , but cost of revenues were up 36%. They need to get this under control. Gross profit was up 14%. Their net income was negative. This was due to the 53 million in contingent consideration that I discuss later. This also brought their EPS down. Their diluted share count was down negligible QoQ. Also their Cash Flow was down due to the contingent consideration. The balance sheet improved with cash up negligible and Debt down to 0. Their Inventory is up 26% QoQ. Also the share compensation was 4% of Revenue. They historically have issued shares for share-based compensation plans but they have treasury shares available from their share repurchase program. Their share compensation this quarter was 8.8 million and the 3rd quarter of last year it was 8.2 million. So as a percentage of revenue it should come down.
Well the Validity acquisition became accretive a full quarter earlier than predicted. The finger print solution is in the Samsung phone and Huawei phone. Also every notebook pc uses the fingerprint solution. This is the major reason they were EPS and Net Income negative because when they had to re-compute the contingent consideration and add 53 million onto it. The contingent consideration run out on March 31,2016 and can have payments up to $162.5 million more. I suspect that they will be paying the full 162.5 million this is on top of the 70.3 million they paid in stock. As of March31, 204 the estimated fair value of the contingent consideration was $96.5 million. As of this date they have made $35.7 million of revenue from Validity fingerprint authentication.
In connection with the acquisition of Pacinian in June 2012, They entered into a contingent consideration arrangement and paid 5.0 million of additional consideration to the former Pacinian stockholders upon customer acceptance of a Thintouch product. As of March 31,2014 they may owe up to $10.0 million of additional consideration the former Pacinian stockholders.
Based on industry estimates of unit shipments, the mobile smart phone market is anticipated to increase approximately 20%, the tablet market is anticipated to increase 22%, and the notebook market is to decrease approximately 4% in calendar year 2014 compared with 2013.
China makes up 44% of their Revenue followed by South Korea at 23%, the United States at 14%, Taiwan at 13 percent, Japan at 5% , and all others at 1%
Synaptics has 100% of the notebook market and in the mobile segment its very high as well, which is fueled by the great design win with the Samsung Galaxy s5.
Conclusion: With the acquisition of Validity Syna is now the leader in finger print technology. They have many uses for it, unlocking the phone, unlocking certain applications such as PayPal. They want to see this become a security and payment system application. They joined Fido Alliance. This is a industry consortium that is seamless to the end-users, so that if you want to make a purchase or some type of banking movement, then you can do that very securely with the fingerprint type or other authentication type of solution. Samsung and Arm both entered the Fido Alliance as board members recently. While their Revenue keeps growing it’s hard to predict what their net income will do because of the contingent consideration they have to pay. I do think that the Validity acquisition was a smart one because it strengthens their grip on the mobile market. That, with the swipe technology should give them wide market acceptance both in the low and high end markets. But this could cause their EPS and Net Income to be negative from one quarter to the next. But right now the market doesn’t seem to care and with all of the cash on their balance sheet I don’t think they will have any problems with keeping up with their bills. This is a great company to own for the mobile market and for notebooks and laptops they are the company to go to for any kind of user interface.
Andy
Long Syna
Analyst estimates
Jun 2014 $1.25
Sept. 2014 $1.26
Current year Jun 2014 $4.04
Next year Jun 2015 $4.63