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Synaptics Inc. Reports Operating Results (10-Q)

February 03, 2012 | About:
10qk

10qk

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Synaptics Inc. (SYNA) filed Quarterly Report for the period ended 2011-12-31.

Synaptics Inc. has a market cap of $1.2 billion; its shares were traded at around $37.33 with a P/E ratio of 22.2 and P/S ratio of 2. Synaptics Inc. had an annual average earning growth of 22.6% over the past 10 years. GuruFocus rated Synaptics Inc. the business predictability rank of 4-star.

Highlight of Business Operations:

Net revenue was $278.9 million for the six months ended December 31, 2011 compared with $312.8 million for the six months ended December 31, 2010, a decrease of $33.9 million, or 10.8%. Of our first half fiscal 2012 net revenue, $135.9 million, or 48.7%, was from PC applications and $143.0 million, or 51.3%, was from digital lifestyle product applications, including $139.9 million from mobile products. The decrease in net revenue for the six months ended December 31, 2011 was attributable to a $19.9 million, or 12.2%, decrease in net revenue from digital lifestyle product applications and a $14.0 million, or 9.3%, decrease in net revenue from PC applications. Net revenue from mobile products was down due to a shift in revenue from higher priced full sensor module solutions to lower priced chip or tail solutions, partially offset by an increase in mobile product unit shipments. Net revenue from PC applications was down due primarily to lower PC peripheral revenue.

Research and development expenses increased as a percentage of net revenue to 20.8% from 16.5%, and the expenses for research and development activities increased $6.5 million, or 12.6%, to $58.1 million for the six months ended December 31, 2011 compared with $51.6 million for the six months ended December 31, 2010. The increase in research and development expenses primarily reflected a $6.6 million increase in employee-related costs related to a 12.8% increase in research and development staffing, a $1.0 million increase in infrastructure and support costs, and a $687,000 increase in share-based compensation costs, partially offset by a $1.5 million decline in temporary services.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased as a percentage of net revenue to 12.2% from 11.9%, while the expenses for selling, general, and administrative activities decreased $1.2 million, or 6.5%, to $17.7 million for the three-month period ended December 31, 2011 compared with $19.0 million for the three-month period ended December 31, 2010. The decrease in selling, general, and administrative expenses primarily reflected a $2.7 million decrease in non-recurring costs related to the resignation of our former Chief Executive Officer (CEO) in October 2010, partially offset by a $1.8 million increase in continuing employee-related costs.

Selling, general, and administrative expenses increased as a percentage of net revenue to 12.3% from 11.0%, while the expenses for selling, general, and administrative activities remained relatively flat at $34.4 million for the six-month period ended December 31, 2011 compared with $34.5 million for the six-month period ended December 31, 2010. The selling, general, and administrative expenses reflected a $2.7 million decrease in non-recurring costs related to the resignation of our former CEO in October 2010, nearly entirely offset by a $2.5 million increase in continuing employee related costs related to a 9.0% increase in selling, general, and administrative staffing.

Cash Flows from Operating Activities. Operating activities during the six months ended December 31, 2011 generated net cash of $60.2 million compared with $43.5 million of net cash generated during the six months ended December 31, 2010. For the six months ended December 31, 2011, net cash provided by operating activities was primarily attributable to net income of $30.4 million plus adjustments for non-cash charges of $21.9 million, and an $8.0 million net decrease in operating assets and liabilities. The net decrease in operating assets and liabilities was primarily attributable to a $7.1 million decrease in accounts receivable, a $2.9 million increase in accounts payable, partially offset by a $2.2 million decrease in income taxes payable. Our days sales outstanding decreased from 59 to 54 days from June 30, 2011 to December 31, 2011 and our annual inventory turns remained at 11 for the same period.

Read the The complete Report

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