Synaptics Reports Record First Quarter Results SAN JOSE, Calif., Oct. 21 /PRNewswire-FirstCall/ -- Synaptics (NASDAQ: SYNA), a leader in interface solutions for mobile computing, communications, and entertainment devices, today reported financial results for the first fiscal quarter ended September 30, 2004. Net revenue for the first quarter of fiscal 2005 was $38.1 million, an increase of approximately 29% over the $29.6 million for the first quarter of fiscal 2004. GAAP net income for the first quarter of fiscal 2005 was $4.4 million, or $0.16 per diluted share. This represents an increase of approximately 95% compared with GAAP net income of $2.3 million, or $0.09 per diluted share, for the first quarter of fiscal 2004. "We achieved sequential revenue and net income growth in the first fiscal quarter of approximately 8% and 19%, respectively," stated Francis Lee, President and Chief Executive Officer of Synaptics. "Our performance exceeded our expectations and was driven by improved gross margins and continued momentum in the portable digital entertainment market. Revenues from our new market initiatives grew strongly to 33% of total revenues, the highest quarterly revenue to date. Design activity remains robust across our key target markets, and we are excited about our new solutions for desktop PCs and portable consumer devices as we enter the holiday period." Russ Knittel, Synaptics' Chief Financial Officer, added, "Our visibility entering the December quarter is greatly improved, evidenced by our record backlog of more than $39 million. We are projecting significant sequential revenue growth in the range of 35% to 45% in the second fiscal quarter primarily reflecting continued strong demand for portable digital music players. We expect revenues in the March quarter to be in excess of the September quarter levels but down sequentially based on seasonal patterns, the extent of which will depend largely on end device sell-through in the December quarter." Earnings Call Information The Synaptics first quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, October 21, 2004, during which management may discuss forward-looking information. To participate on the live call, analysts and investors should dial 800-218-8862 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 http://www.synaptics.com/ . About Synaptics Incorporated Synaptics is a leading developer of interface solutions for mobile computing, communications and entertainment devices, with its products found in over 50 percent of today's notebook computers. Synaptics' engineered solutions for device manufacturers include: TouchPad(TM) the industry standard notebook navigation device; MobileTouch(TM), a customizable scrolling, input and navigation solution for mobile handsets; TouchRing(TM), a one dimensional scrolling solution for MP3 devices; and QuickStroke(R), a proprietary Chinese handwriting recognition software. More information about Synaptics can be found on the web at http://www.synaptics.com/. This press release contains "forward-looking" statements, 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 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, (c) 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 Annual Report on Form 10-K for the fiscal year ended June 30, 2004. All forward- looking statements are based on information available to Synaptics on the date hereof, and Synaptics assumes no obligation to update such statements. For more information contact: Russ Knittel Jennifer Jarman Synaptics Incorporated The Blueshirt Group 408-434-0110x140 415-217-7722 SYNAPTICS INCORPORATED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) September 30, June 30, 2004 2004 (Unaudited) Assets Current assets: Cash and cash equivalents $59,837 $59,489 Short term investments 37,463 36,810 Accounts receivable, net of allowances of $164 and $130 at September 30, 2004, and June 30, 2004, respectively 29,462 21,875 Inventories 7,684 6,525 Prepaid expenses and other current assets 3,323 3,083 Total current assets 137,769 127,782 Property and equipment, net 1,853 1,829 Goodwill 1,927 1,927 Other assets 1,040 1,115 Total assets $142,589 $132,653 Liabilities and Stockholders' equity Current liabilities: Accounts payable $11,325 $9,220 Accrued compensation 3,143 4,594 Accrued warranty 596 704 Income taxes payable 7,102 4,018 Other accrued liabilities 3,296 2,594 Capital leases and equipment financing obligations -- 28 Total current liabilities 25,462 21,158 Note payable to a related party 1,500 1,500 Other liabilities 854 855 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; 25,165,274 and 24,987,398 shares issued and outstanding, respectively 25 25 Additional paid in capital 89,353 88,334 Deferred stock compensation (532) (634) Retained earnings 26,006 21,575 Accumulated other comprehensive loss (79) (160) Total stockholders' equity 114,773 109,140 Total liabilities and stockholders' equity $142,589 $132,653 SYNAPTICS INCORPORATED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share and share data) (unaudited) Three Months Three Months Ended Ended Sept. 30, Sept. 30, 2004 2003 Net revenue $38,091 $29,571 Cost of revenue 20,899 17,426 Gross margin 17,192 12,145 Operating expenses Research and development 6,043 5,096 Selling, general, and administrative 3,766 3,074 Amortization of deferred stock compensation 102 137 Restructuring -- 432 Total operating expenses 9,911 8,739 Operating income 7,281 3,406 Interest income 268 226 Interest expense (26) (34) Income before income taxes 7,523 3,598 Provision for income taxes 3,092 1,331 Net income $4,431 $2,267 Net income per share: Basic $0.18 $0.09 Diluted $0.16 $0.09 Shares used in computing net income per share: Basic 25,098,648 24,013,482 Diluted 27,693,808 26,526,878 Non-GAAP results (unaudited) Reported net income $4,431 $2,267 Non-GAAP adjustments: Amortization of deferred stock compensation 102 137 Restructuring, net of tax -- 272 Non-GAAP net income $4,533 $2,676 Non-GAAP earnings per share Basic $0.18 $0.11 Diluted $0.16 $0.10 DATASOURCE: Synaptics Incorporated CONTACT: Russ Knittel of Synaptics Incorporated, +1-408-434-0110, ext. 140, or ; or Jennifer Jarman of The Blueshirt Group, +1-415-217-7722, or , for Synaptics Incorporated Web site: http://www.synaptics.com/

Copyright