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Synaptics Inc. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: August 24, 2009 04:01PM

Synaptics Inc. (SYNA) filed Annual Report for the period ended 2009-06-30. Synaptics is a leading developer of human interface solutions for a wide variety of mobile computing and communications devices and is the leading supplier of TouchPads to the notebook computer market. Products include the TouchPad input device TouchStyk pointing stick Dual Pointing combination input solution ClearPad touch screen Spiral pen input solution and QuickStroke Chinese handwriting software. Synaptics Inc. has a market cap of $874.75 million; its shares were traded at around $25.5 with a P/E ratio of 14.66 and P/S ratio of 1.85. Synaptics Inc. had an annual average earning growth of 5.3% over the past 5 years.

Highlight of Business Operations:

The aggregate market value of Common Stock held by nonaffiliates of the registrant (28,377,263 shares), based on the closing price of the registrant’s Common Stock as reported on the Nasdaq Global Select Market on December 26, 2008 of $14.66, was $416,010,676. For purposes of this computation, all officers, directors, and 10% beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed to be an admission that such officers, directors, or 10% beneficial owners are, in fact, affiliates of the registrant.

The latest industry projections for notebook unit growth for the period 2009-2013 show a compound annual growth rate of 18% compared with 1% for desktop computers, reflecting the continued migration of desktops to notebooks fueled by users’ desire for mobile computing and on-the-go access to applications, information, and digital content, which is expanding on a daily basis. Within the notebook market, mini notebooks designed primarily for wireless communications and access to the internet, or netbooks, are expected to grow 128% in calendar 2009 over 2008 and are expected to account for 17% of the overall notebook market for calendar 2009. Based on the strength of our technology and engineering know-how, we believe we are well positioned to take advantage of the growth opportunity in the notebook market and to provide innovative, value-added human interface solutions for each of the key end-user preferences, which will be enhanced by the adoption of multifunction touch pads, including additional functionality, such as multi-touch gesture recognition. We also believe we are well positioned within the netbook market as our notebook product lines of touch pads and pointing sticks allow us to address 100% of the notebook market.

Industry projections for the mobile phone market for the 2009-2013 period show a compound annual growth rate of 7% for the overall market and a compound annual growth rate of 17% for the mobile smartphone market, reflecting the trend towards increased interest among non-business consumers and the trend towards greater functionality in smartphone products to meet and address the expanded needs and expectations of the consumer oriented market.

Industry projections for the portable digital music player market for the 2008-2011 period suggest that the market is declining at an annual rate of 2% for the overall market but growing at a compound annual rate of 47% for the video capable MP3 players market, reflecting the trend towards portable digital entertainment devices with advanced capabilities, such as built-in video playback capabilities. These products require a simple, durable, and intuitive human interface solution to enable the user to navigate efficiently through menus and scroll through extensive play lists, songs, and videos contained in the host device. We believe we are well positioned to take advantage of this growing market based on our technology, engineering know-how, and the acceptance of our human interface solutions by OEMs in this market.

Read the The complete Report

SYNA is in the portfolios of Richard Perry of Perry Capital, Richard Perry of Perry Capital, Richard Perry of Perry Capital, John Hussman of Hussman Economtrics Advisors, Inc., Kenneth Fisher of Fisher Asset Management, LLC, Ken Heebner of CAPITAL GROWTH MANAGEMENT LP.

Stocks Discussed: SYNA,
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