UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 26, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number 000-49602

SYNAPTICS INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware	77-0118518
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1109 McKay Drive

San Jose, California 95131

(Address of principal executive offices) (Zip code)

(408) 904-1100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.001 per share	SYNA	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of Common Stock outstanding at April 28, 2022: 39,607,181

SYNAPTICS INCORPORATED

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED March 26, 2022

TABLE OF CONTENTS

			Page
Part I. Financial Information
	Item 1.	Condensed Consolidated Financial Statements (Unaudited):	3
		Condensed Consolidated Balance Sheets—March 26, 2022 and June 26, 2021	3
		Condensed Consolidated Statements of Income—Three and nine months ended March 26, 2022 and March 27, 2021	4
		Condensed Consolidated Statements of Stockholders’ Equity—Three and nine months ended March 26, 2022 and March 27, 2021	5
		Condensed Consolidated Statements of Cash Flows—Nine months ended March 26, 2022 and March 27, 2021	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
	Item 4.	Controls and Procedures	37
Part II. Other Information
	Item 1.	Legal Proceedings	38
	Item 1A.	Risk Factors	38
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
	Item 6.	Exhibits	39
Signatures			40

PART I—FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except par value and share amounts)

(unaudited)

	March			June
	2022			2021
ASSETS
Current Assets:
Cash and cash equivalents	$	690.3		$	836.3
Short-term investments		64.6			-
Accounts receivable, net of allowances of $6.0 and $5.8 at March 2022   and June 2021, respectively		298.3			228.3
Inventories		145.9			82.0
Prepaid expenses and other current assets		48.1			33.1
Total current assets		1,247.2			1,179.7
Property and equipment at cost, net of accumulated depreciation of   $125.9 and $131.0 at March 2022 and June 2021, respectively		63.1			91.2
Goodwill		814.5			570.0
Acquired intangibles, net		409.5			301.5
Non-current other assets		163.7			84.4
	$	2,698.0		$	2,226.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	135.6		$	97.6
Accrued compensation		80.1			76.4
Income taxes payable		38.0			29.4
Other accrued liabilities		139.3			96.2
Convertible notes, net		-			487.1
Total current liabilities		393.0			786.7
Long-term debt		982.6			394.4
Other long-term liabilities		164.7			78.5
Total liabilities		1,540.3			1,259.6
Stockholders' Equity:
Common stock:
$0.001 par value; 120,000,000 shares authorized, 67,722,867 and 66,963,006 shares   issued, and 39,598,246 and 35,331,903 shares outstanding, at March 2022   and June 2021, respectively		0.1			0.1
Additional paid-in capital		897.8			1,391.5
Treasury stock: 28,124,621 and 31,631,103 common treasury shares at March 2022   and June 2021, respectively, at cost		(694.5	)		(1,205.4	)
Accumulated other comprehensive income		(1.3	)		-
Retained earnings		955.6			781.0
Total stockholders' equity		1,157.7			967.2
	$	2,698.0		$	2,226.8

See accompanying notes to condensed consolidated financial statements (unaudited).

3

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data)

(unaudited)

	Three Months Ended						Nine Months Ended
	March						March
	2022			2021			2022			2021
Net revenue	$	470.1		$	325.8		$	1,263.3		$	1,011.8
Cost of revenue		216.3			170.3			586.3			571.4
Gross margin		253.8			155.5			677.0			440.4
Operating expenses:
Research and development		98.2			77.5			273.2			235.7
Selling, general, and administrative		44.2			36.8			130.1			111.6
Acquired intangibles amortization		12.0			8.7			29.6			24.1
Restructuring costs		11.3			0.9			17.8			7.1
Gain on sale of audio technology assets		-			-			-			(34.2	)
Total operating expenses		165.7			123.9			450.7			344.3
Operating income		88.1			31.6			226.3			96.1
Interest and other expense, net		(6.7	)		(7.0	)		(18.3	)		(17.7	)
Gain on sale and leaseback transaction		5.4			-			5.4			-
Loss on redemption of convertible notes		-			-			(8.1	)		-
Income before provision for income taxes and equity investment loss		86.8			24.6			205.3			78.4
Provision for income taxes		24.4			10.4			32.3			16.4
Equity investment gain (loss)		2.5			(0.4	)		1.6			(1.4	)
Net income	$	64.9		$	13.8		$	174.6		$	60.6
Net income per share:
Basic	$	1.64		$	0.39		$	4.50		$	1.75
Diluted	$	1.59		$	0.35		$	4.29		$	1.62
Shares used in computing net income per share:
Basic		39.5			35.0			38.8			34.7
Diluted		40.7			39.1			40.7			37.5

See accompanying notes to condensed consolidated financial statements (unaudited).

4

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except share amounts)

(unaudited)

	Three and Nine months ended March 26, 2022
	Common Stock
	Shares		Amount		Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive Income			Retained Earnings		Total Stockholders' Equity
Balance at June 2021		66,963,006	$	0.1	$	1,391.5		$	(1,205.4	)	$	-		$	781.0	$	967.2
Net income		-		-		-			-			-			40.2		40.2
Issuance of common stock for share-based award compensation plans		384,866		-		7.8			-			-			-		7.8
Payroll taxes for deferred stock units		-		-		(27.7	)		-			-			-		(27.7	)
Redemption of convertible debt						(518.2	)		510.9			-					(7.3	)
Share-based compensation		-		-		21.2			-			-			-		21.2
Balance at September 2021		67,347,872		0.1		874.6			(694.5	)		-			821.2		1,001.4
Net income		-		-		-			-			-			69.5		69.5
Other comprehensive loss		-		-		-			-			(0.1	)		-		(0.1	)
Total comprehensive income		-		-		-			-			-			-		69.4
Issuance of common stock for share-based award compensation plans		295,796		-		0.8			-			-			-		0.8
Payroll taxes for deferred stock units		-		-		(35.8	)		-			-			-		(35.8	)
Share-based compensation attributable to acquisition		-		-		1.7			-			-			-		1.7
Share-based compensation		-		-		26.4			-			-			-		26.4
Balance at December 2021		67,643,668		0.1		867.7			(694.5	)		(0.1	)		890.7		1,063.9
Net income		-		-		-			-						64.9		64.9
Other comprehensive loss		-		-		-			-			(1.2	)		-		(1.2	)
Total comprehensive income		-		-		-			-			-			-		63.7
Issuance of common stock for share-based award compensation plans		79,199		-		6.5			-			-			-		6.5
Payroll taxes for deferred stock units		-		-		(2.6	)		-			-			-		(2.6	)
Share-based compensation		-		-		26.2			-			-			-		26.2
Balance at March 2022		67,722,867	$	0.1	$	897.8		$	(694.5	)	$	(1.3	)	$	955.6	$	1,157.7

See accompanying notes to condensed consolidated financial statements (unaudited).

5

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except share amounts)

(unaudited)

	Three and Nine months ended March 27, 2021
	Common Stock
	Shares		Amount		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Total Stockholders' Equity
Balance at June 2020		65,871,648	$	0.1	$	1,340.2		$	(1,222.6	)	$	701.4		$	819.1
Net loss		-		-		-			-			(2.8	)		(2.8	)
Issuance of common stock for share-based award compensation plans		296,917		-		10.4			-			-			10.4
Payroll taxes for deferred stock units		-		-		(5.6	)		-			-			(5.6	)
Share-based compensation attributable to acquisition		-		-		3.2			-			-			3.2
Share-based compensation		-		-		14.4			-			-			14.4
Balance at September 2020		66,168,565		0.1		1,362.6			(1,222.6	)		698.6			838.7
Net income		-		-	<