10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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 December 24, 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.

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 ☒

As of January 26, 2023, the Company had 39,395,760 shares of Common Stock outstanding.

SYNAPTICS INCORPORATED

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED DECEMBER 24, 2022

TABLE OF CONTENTS


			Page
Part I. Financial Information

	Item 1.	Condensed Consolidated Financial Statements (Unaudited):

		Condensed Consolidated Balance Sheets—December 24, 2022 and June 25, 2022	3

		Condensed Consolidated Statements of Income—Three and Six Months Ended December 24, 2022 and December 25, 2021	4

		Condensed Consolidated Statements of Comprehensive Income—Three and Six Months Ended December 24, 2022 and December 25, 2021	5

		Condensed Consolidated Statements of Stockholders’ Equity—Three and Six Months Ended December 24, 2022 and December 25, 2021	6

		Condensed Consolidated Statements of Cash Flows—Six Months Ended December 24, 2022 and December 25, 2021	8

		Notes to Condensed Consolidated Financial Statements	9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

	Item 4.	Controls and Procedures	34

Part II. Other Information

	Item 1.	Legal Proceedings	35

	Item 1A.	Risk Factors	35

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

	Item 6.	Exhibits	36

Signatures			37

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)


	December			June
	2022			2022
ASSETS
Current Assets:
Cash and cash equivalents	$	818.8		$	824.0
Short-term investments		40.1			52.0
Accounts receivable, net		255.0			322.1
Inventories, net		177.5			169.7
Prepaid expenses and other current assets		32.6			35.6
Total current assets		1,324.0			1,403.4
Property and equipment at cost, net of accumulated depreciation of $128.7 and $122.8 at December 2022 and June 2022, respectively		65.9			62.9
Goodwill		816.4			806.6
Acquired intangibles, net		333.7			390.0
Right-of-use assets		53.0			61.2
Non-current other assets		132.3			134.0
	$	2,725.3		$	2,858.1
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	82.7		$	141.8
Accrued compensation		37.2			90.6
Income taxes payable		60.3			79.7
Other accrued liabilities		113.1			145.3
Current portion of long-term debt		6.0			6.0
Total current liabilities		299.3			463.4
Long-term debt		973.9			975.7
Other long-term liabilities		151.7			152.6
Total liabilities		1,424.9			1,591.7
Stockholders' Equity:
Common stock:
$0.001 par value; 120,000,000 shares authorized, 68,459,485 and 67,745,800 shares issued, and 39,581,687 and 39,621,179 shares outstanding, at December 2022 and June 2022, respectively		0.1			0.1
Additional paid-in capital		945.7			924.1
Treasury stock: 28,877,798 and 28,124,621 common shares at December 2022 and June 2022, respectively, at cost		(769.0	)		(694.5	)
Accumulated other comprehensive loss		(1.5	)		(1.8	)
Retained earnings		1,125.1			1,038.5
Total stockholders' equity		1,300.4			1,266.4
	$	2,725.3		$	2,858.1

See accompanying notes to condensed consolidated financial statements (unaudited)

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data)

(unaudited)


	Three Months Ended						Six Months Ended
	December						December
	2022			2021			2022			2021
Net revenue	$	353.1		$	420.5		$	801.2		$	793.2
Cost of revenue		166.4			195.4			358.8			370.0
Gross margin		186.7			225.1			442.4			423.2
Operating expenses:
Research and development		89.3			88.9			178.8			175.0
Selling, general, and administrative		42.4			44.3			87.1			85.9
Acquired intangibles amortization		8.9			9.2			18.4			17.6
Restructuring costs		-			5.1			-			6.5
Total operating expenses		140.6			147.5			284.3			285.0
Operating income		46.1			77.6			158.1			138.2
Interest and other expense, net		(6.7	)		(5.7	)		(15.0	)		(11.6	)
Loss on redemption of convertible notes		-			-			-			(8.1	)
Income before provision for income taxes and equity investment loss		39.4			71.9			143.1			118.5
Provision for income taxes		17.4			2.0			56.5			7.9
Equity investment loss		-			0.4			-			0.9
Net income	$	22.0		$	69.5		$	86.6		$	109.7
Net income per share:
Basic	$	0.55		$	1.76		$	2.18		$	2.85
Diluted	$	0.55		$	1.71		$	2.14		$	2.70
Shares used in computing net income:
Basic		39.8			39.4			39.8			38.5
Diluted		40.2			40.7			40.5			40.7

See accompanying notes to condensed consolidated financial statements (unaudited)

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

(unaudited)


	Three Months Ended					Six Months Ended
	December					December
	2022		2021				2022		2021
Net income	$	22.0	$	69.5			$	86.6	$	109.7
Other comprehensive income (loss), net of tax
Unrealized income (loss) on available-for-sale-securities		0.4		(0.1	)			0.3		(0.1	)
Comprehensive income	$	22.4	$	69.4			$	86.9	$	109.6

See accompanying notes to condensed consolidated financial statements (unaudited)

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except share amounts)

(unaudited)



	Common Stock
	Shares		Amount		Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive loss			Retained Earnings		Total Stockholders' Equity
Balance at June 2022		67,745,800	$	0.1	$	924.1		$	(694.5	)	$	(1.8	)	$	1,038.5	$	1,266.4
Net income		—		—		—			—			—			64.6		64.6
Other comprehensive loss		—		—		—			—			(0.1	)		—		(0.1	)
Issuance of common stock for share-based award compensation plans		483,713		—		8.5			—			—			—		8.5
Payroll taxes for deferred stock units		—		—		(31.4	)		—			—			—		(31.4	)
Common stock repurchased		—		—		—			(13.4	)		—					(13.4	)
Share-based compensation		—		—		30.5			—			—			—		30.5
Balance at September 2022		68,229,513		0.1		931.7			(707.9	)		(1.9	)		1,103.1		1,325.1
Net income		—		—		—			—						22.0		22.0
Other comprehensive income		—		—		—			—			0.4			—		0.4
Issuance of common stock for share-based award compensation plans		229,972		—		0.3			—			—			—		0.3
Payroll taxes for deferred stock units		—		—		(17.7	)		—			—			—		(17.7	)
Common stock repurchased		—		—		—			(61.1	)		—			—		(61.1	)
Share-based compensation		—		—		31.4			—			—			—		31.4
Balance at December 2022		68,459,485	$	0.1	$	945.7		$	(769.0	)	$	(1.5	)	$	1,125.1	$	1,300.4

See accompanying notes to condensed consolidated financial statements (unaudited)

SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except share amounts)

(unaudited)



	Common Stock
	Shares		Amount		Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive loss		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
Other comprehensive income		—		—		—			—			—		—		—
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		—