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Synaptics Inc. Reports Operating Results (10-Q)

May 04, 2012 | About:
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10qk

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Synaptics Inc. (SYNA) filed Quarterly Report for the period ended 2012-03-31.

Synaptics Inc has a market cap of $1.09 billion; its shares were traded at around $28.71 with a P/E ratio of 20.4 and P/S ratio of 1.8. 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 $410.6 million for the nine months ended March 31, 2012 compared with $455.2 million for the nine months ended March 31, 2011, a decrease of $44.6 million, or 9.8%. Of our first nine months of fiscal 2012 net revenue, $201.0 million, or 49.0%, was from PC applications and $209.6 million, or 51.0%, was from digital lifestyle product applications, including $204.6 million from mobile products. The decrease in net revenue for the nine months ended March 31, 2012 was attributable to a $34.0 million, or 14.0%, decrease in net revenue from digital lifestyle product applications and a $10.6 million, or 5.0%, 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 21.3% from 17.0%, and the expenses for research and development activities increased $10.0 million, or 12.9%, to $87.5 million for the nine months ended March 31, 2012 compared with $77.5 million for the nine months ended March 31, 2011. The increase in research and development expenses primarily reflected a $10.2 million increase in employee-related costs associated with a 12.0% increase in research and development staffing and a $1.1 million increase in share-based compensation costs, partially offset by a $2.0 million decline in temporary services.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased as a percentage of net revenue to 13.7% from 12.1%, while the expenses for selling, general, and administrative activities increased $787,000, or 4.6%, to $18.0 million for the three-month period ended March 31, 2012 compared with $17.2 million for the three-month period ended March 31, 2011. The increase in selling, general, and administrative expenses primarily reflected a $609,000 increase in employee-related costs associated with a 2.5% increase in selling, general, and administrative staffing, and a $296,000 increase in share-based compensation costs.

Selling, general, and administrative expenses increased as a percentage of net revenue to 12.8% from 11.4%, while the expenses for selling, general, and administrative activities increased $711,000, or 1.4%, to $52.5 for the nine months ended March 31, 2012 compared with $51.8 million for the nine months ended March 31, 2011. The selling, general, and administrative expenses reflected a $2.0 million increase in employee-related costs associated with a 6.8% increase in selling, general, and administrative staffing, partially offset by a $1.0 million decrease in share-based compensation costs.

Cash Flows from Operating Activities. Operating activities during the nine months ended March 31, 2012 generated net cash of $79.7 million compared with $64.5 million of net cash generated during the nine months ended March 31, 2011. For the nine months ended March 31, 2012, net cash provided by operating activities was primarily attributable to net income of $41.8 million plus adjustments for non-cash charges of $32.9 million, and a net change of $5.0 million in operating assets and liabilities. The net change in operating assets and liabilities was primarily attributable to a $5.0 million increase in other accrued liabilities, and a $2.1 million increase in accounts payable, partially offset by a $1.7 million increase in accounts receivable. Our days sales outstanding increased from 59 to 65 days from June 30, 2011 to March 31, 2012, and our annual inventory turns declined slightly from 11 to 10 for the same period.

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