SANTA CLARA, Calif., July 29 /PRNewswire-FirstCall/ -- Synaptics (Nasdaq: SYNA), a leading developer of human interface solutions for mobile computing, communications, and entertainment devices, today reported financial results for the fourth quarter and year ended June 30, 2010.

Net revenue of $145.8 million in the fourth quarter of fiscal 2010 was a record, an increase of 26% over $115.3 million a year ago and an increase of 25% from $116.2 million, sequentially. Net income in the fourth quarter of fiscal 2010 was a record $19.3 million, or $0.54 per diluted share, compared with $12.4 million, or $0.34 per diluted share, a year ago and net income of $11.6 million, or $0.33 per diluted share, in the third quarter of fiscal 2010.

Non-GAAP net income in the fourth quarter of fiscal 2010 was $24.8 million, an increase of 44% over the prior year and an increase of 52% from the previous quarter. Non-GAAP net income per diluted share was $0.70 in the fourth quarter of fiscal 2010, an increase of 49% over the prior year and an increase of 52% compared with the previous quarter. (See attached table for a reconciliation of GAAP to non-GAAP results.)

"Synaptics capped off fiscal 2010 with the highest revenue quarter in our history as we experienced strong growth for both notebook and mobile applications," stated Tom Tiernan, President and CEO. "As the innovation leader in human interface solutions, Synaptics continues to win in the market based on our unique solutions approach, our portfolio fulfillment model, the strength and reliability of our technology, and our proven ability to execute."

Mr. Tiernan added, "Fiscal 2011 is off to a strong start, and we anticipate setting a new revenue record in the first quarter. We are pleased to have recently announced compelling new technology for large touchscreens and remote controls, both of which we expect to be new sources of revenue in fiscal 2011."

PC revenue of $84.6 million represented 58% of total revenue for the fourth quarter and increased 29% from the comparable quarter last year. Non-PC revenue of $61.2 million increased 23% from the comparable quarter last year and comprised 42% of total revenue for the quarter. Mobile phone applications comprised 40% of the Company's revenue, and the number of mobile phone models shipping with Synaptics' touchscreen solutions reached a new high.

Net revenue for fiscal 2010 was $514.9 million, an increase of 9% over $473.3 million for fiscal 2009. Net income for fiscal 2010 was $53.0 million, an increase of 10% over $48.1 million for fiscal 2009. Net income per diluted share was $1.50, an 11% increase over net income per diluted share of $1.35 for fiscal 2009.

Non-GAAP net income for fiscal 2010 was $80.0 million compared with $77.9 million for fiscal 2009. Non-GAAP net income per diluted share was $2.26 compared with $2.19 in 2009. (See attached table for a reconciliation of GAAP to non-GAAP results.)

Kathy Bayless, CFO, added, "Considering our backlog of approximately $85 million entering the September quarter, expected product mix, and customer forecasts, we anticipate revenue in the quarter of $148 million to $156 million, an increase of 24% to 30% over the comparable quarter last year. With a strong start to the year and anticipated continued solid demand for our core notebook and mobile phone applications, we expect our fiscal 2011 revenue growth rate to accelerate over last year to at least the low double-digits to mid-teens."

Earnings Call Information

The Synaptics fourth quarter fiscal 2010 teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, July 29, 2010, during which the Company will provide forward-looking information. To participate on the live call, analysts and investors should dial 1-877-941-2068 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 www.synaptics.com.

About Synaptics Incorporated

Synaptics (NASDAQ: SYNA) is a leading developer of human interface solutions for the mobile computing, communications, and entertainment industries. The company creates interface solutions for a variety of devices including notebook PCs, PC peripherals, digital music players, and mobile phones. The TouchPad(TM), Synaptics' flagship product, is integrated into a majority of today's notebook computers. Consumer electronics and computing manufacturers use Synaptics' solutions to enrich the interaction between humans and intelligent devices through improved usability, functionality, and industrial design. The company is headquartered in Santa Clara, Calif. www.synaptics.com.

NOTE: Synaptics, TouchPad, and the Synaptics logo are trademarks of Synaptics in the United States and/or other countries.

Use of Non-GAAP Financial Information

In evaluating its business, Synaptics considers and uses net income per share excluding share-based compensation and unusual or non-recurring items as a supplemental measure of operating performance. Net income excluding share-based compensation and unusual or non-recurring items is not a measurement of the Company's financial performance under GAAP and should not be considered as an alternative to GAAP net income. The Company presents net income excluding share-based compensation and unusual or non-recurring items because it considers it an important supplemental measure of its performance. The Company believes this measure facilitates operating performance comparisons from period to period by eliminating potential differences in net income caused by the existence and timing of non-cash compensation charges and unusual or non-recurring items. Net income excluding share-based compensation and unusual or non-recurring items has limitations as an analytical tool and should not be considered in isolation or as a substitute for the Company's GAAP net income. The principal limitations of this measure are that it does not reflect the Company's actual expenses and may thus have the effect of inflating its net income and net income per share.

Forward-Looking Statements

This press release contains "forward-looking" statements about Synaptics, 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' view of its position as the innovation leader in human interface solutions, Synaptics' view that it continues to win in the market based on its unique solutions approach and portfolio fulfillment model, Synaptics' view of its strength and reliability of its technology and its proven ability to execute, Synaptics' expectation that its new technology for large touchscreens and remote controls will result in new sources of revenue in fiscal 2011, Synaptics' anticipated revenue for the quarter ending September 30, 2010 and its anticipation of a record revenue quarter, Synaptics' anticipated continued solid demand for its core notebook and mobile phone applications and its expectation of accelerated revenue growth in fiscal 2011 over the prior fiscal year. 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) demand for Synaptics' products, (b) market demand for OEMs' products using Synaptics' solutions, (c) changing market demand trends in the markets Synaptics serves, (d) the success of customers' products that utilize Synaptics' product solutions, (e) the development and launch cycles of customers' products, (f) market pressures on selling prices, (g) changes in product mix, (h) the market acceptance of Synaptics' product solutions compared with competitors' solutions, (i) general economic conditions, including consumer confidence and demand, and (j) other risks as identified from time to time in Synaptics' reports filed with the Securities and Exchange Commission, including Quarterly Reports on Form 10-Q and the Annual Report on Form 10-K for the fiscal year ended June 30, 2009. All forward-looking statements are based on information available to Synaptics on the date hereof, and Synaptics assumes no obligation to update such statements.

                                  (Tables to Follow)

                          SYNAPTICS INCORPORATED
                        CONSOLIDATED BALANCE SHEETS
                     (In thousands, except share data)
                                (Unaudited)

                                                         June 30,
                                                              2010
                                                              ----

    Assets
    Current assets:
      Cash and cash equivalents                           $209,858
      Short term investments                                     -
                                                               ---
        Total cash, cash equivalents, and short-term
         investments                                       209,858
      Receivables, net of allowances of $500 and
       $513, respectively                                101,509
      Inventories                                         18,667
      Prepaid expenses and other current assets            4,471
                                                           -----
    Total current assets                                 334,505

    Property and equipment, net                           25,821
    Goodwill                                               1,927
    Non-current auction rate securities                   28,012
    Other assets                                          24,414
                                                          ------
    Total assets                                        $414,679
                                                        ========

    Liabilities and stockholders' equity
    Current liabilities:
      Accounts payable                                   $65,618
      Accrued compensation                                11,330
      Income taxes payable                                10,061
      Current deferred tax liability                           -
      Other accrued liabilities                           18,962
      Notes payable                                            -
                                                             ---
    Total current liabilities                            105,971

    Convertible senior subordinated notes                  2,305
    Other liabilities                                     19,892

    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; 44,891,834         45
        and 43,779,011 shares issued, and 34,020,521
         and
        34,690,911 shares outstanding, respectively

      Additional paid in capital                         347,764

      Less: 10,871,313 and 9,088,100 treasury
       shares,                                         (281,932)
        respectively, at cost
      Retained earnings                                  219,119
      Accumulated other comprehensive income               1,515
                                                           -----
    Total stockholders' equity                           286,511
                                                         -------
    Total liabilities and stockholders' equity          $414,679
                                                        ========

                                                         June 30,
                                                           2009 *
                                                           ------

    Assets
    Current assets:
      Cash and cash equivalents                           $169,036
      Short term investments                                22,934
                                                            ------
        Total cash, cash equivalents, and short-term
         investments                                       191,970
      Receivables, net of allowances of $500 and
       $513, respectively                                 84,739
      Inventories                                         14,950
      Prepaid expenses and other current assets            3,094
                                                           -----
    Total current assets                                 294,753

    Property and equipment, net                           25,431
    Goodwill                                               1,927
    Non-current auction rate securities                   28,767
    Other assets                                          25,272
                                                          ------
    Total assets                                        $376,150
                                                        ========

    Liabilities and stockholders' equity
    Current liabilities:
      Accounts payable                                   $32,210
      Accrued compensation                                 8,450
      Income taxes payable                                 9,128
      Current deferred tax liability                      10,225
      Other accrued liabilities                           11,813
      Notes payable                                       63,234
                                                          ------
    Total current liabilities                            135,060

    Convertible senior subordinated notes                      -
    Other liabilities                                     18,484

    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; 44,891,834         44
        and 43,779,011 shares issued, and 34,020,521
         and
        34,690,911 shares outstanding, respectively

      Additional paid in capital                         293,666

      Less: 10,871,313 and 9,088,100 treasury
       shares,                                         (237,387)
        respectively, at cost
      Retained earnings                                  166,154
      Accumulated other comprehensive income                 129
                                                             ---
    Total stockholders' equity                           222,606
                                                         -------
    Total liabilities and stockholders' equity          $376,150
                                                        ========

    *    Adjusted for retrospective application of ASC 470-20.  Refer to
    our earnings release dated
          October 23, 2009 for the impact of the retrospective application of
          ASC 470-20.

                                            SYNAPTICS INCORPORATED
                                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                     (In thousands, except per share data)
                                                  (Unaudited)

                                 Three Months Ended        Twelve Months Ended
                                      June 30,                  June 30,
                                      --------                  --------
                                  2010        2009*       2010        2009*
                                  ----        -----       ----        -----

    Net revenue               $145,763      $115,327  $514,890      $473,302
    Cost of revenue (1)         86,516        68,924   306,188       281,793
                                ------        ------   -------       -------
    Gross margin                59,247        46,403   208,702       191,509
    Operating expenses
      Research and
       development (1)          22,923        18,995    86,552        68,026
      Selling, general, and
       administrative (1)       15,053        12,944    60,027        54,014
                                ------        ------    ------        ------
    Total operating
     expenses                   37,976        31,939   146,579       122,040
                                ------        ------   -------       -------

    Operating income            21,271        14,464    62,123        69,469
    Interest income                205           452       977         3,222
    Interest expense                (5)       (1,399)   (2,400)       (7,053)
    Loss on early
     retirement of debt              -             -         -        (1,053)
    Net gain/(loss) on
     investments                     -           160      (443)       (9,243)
                                   ---           ---      ----        ------
    Income before income
     taxes                      21,471        13,677    60,257        55,342
    Provision for income
     taxes (2)                   2,143         1,290     7,292         7,263
    Net income                 $19,328       $12,387   $52,965       $48,079
                               =======       =======   =======       =======

    Net income per share:
      Basic                      $0.57         $0.36     $1.57         $1.41
                                 =====         =====     =====         =====
      Diluted                    $0.54         $0.34     $1.50         $1.35
                                 =====         =====     =====         =====

    Shares used in
     computing net income
     per share:
      Basic                     33,867        34,388    33,836        33,981
                                ======        ======    ======        ======
      Diluted                   35,514        36,348    35,423        35,577
                                ======        ======    ======        ======




    (1) Includes share-
     based compensation
     charges of:

        Cost of revenue           $491          $430    $2,307        $1,680
        Research and
         development             3,558         2,624    14,330         8,897
        Selling, general, and
         administrative          3,988         3,726    18,739        13,843
                                 -----         -----    ------        ------
                                $8,037        $6,780   $35,376       $24,420
                                ======        ======   =======       =======

    (2) Includes tax
     benefit for share-
     based compensation
     charges of:

                                $2,600        $2,523    $9,642        $7,972
                                ======        ======    ======        ======




    Non-GAAP net income
     per share:
        Basic                    $0.73         $0.50     $2.36         $2.29
                                 =====         =====     =====         =====
        Diluted                  $0.70         $0.47     $2.26         $2.19
                                 =====         =====     =====         =====

    *    Adjusted for retrospective application of ASC 470-20.  Refer to
    our earnings release dated
          October 23, 2009 for the impact of the retrospective application of
          ASC 470-20.

                                         SYNAPTICS INCORPORATED
                         Computation of Basic and Diluted Net Income Per Share
                                 (in thousands, except per share data)
                                              (Unaudited)
                                              ===========

                                          Three Months           Twelve Months
                                             Ended                   Ended
                                           June 30,                June 30,
                                           --------                --------
                                       2010       2009*      2010       2009*
                                       ----       -----      ----       -----

    Numerator:
      Basic and diluted net income  $19,328      $12,387  $52,965      $48,079
                                    =======      =======  =======      =======

    Denominator:
      Shares, basic                  33,867       34,388   33,836       33,981
      Effect of dilutive share-
       based awards                   1,647        1,960    1,587        1,596
                                      -----        -----
      Shares, diluted                35,514       36,348   35,423       35,577
                                     ======       ======   ======        =====

    Net income per share:
      Basic                           $0.57        $0.36    $1.57        $1.41
                                      =====        =====    =====        =====
      Diluted                         $0.54        $0.34    $1.50        $1.35
                                      =====        =====    =====        =====







    Computation of non-GAAP
     basic and diluted net
     income per share
     (unaudited):

    Numerator:
      Reported net income           $19,328      $12,387  $52,965      $48,079
      Non-GAAP adjustments (net
       of tax):
        Loss on early retirement of
         debt                             -            -        -          643
        Net (gain)/loss on
         investments                      -         (160)     443        9,243
        Non-cash interest expense         -          695    1,192        3,469
        Discrete tax items                -            -     (370)           -
        Share-based compensation      5,437        4,257   25,734       16,448
                                      -----        -----   ------       ------
      Non-GAAP basic and diluted
       net income                   $24,765      $17,179  $79,964      $77,882
                                    =======      =======  =======      =======

    Non-GAAP net income per
     share:
      Basic                           $0.73        $0.50    $2.36        $2.29
                                      =====        =====    =====        =====
      Diluted                         $0.70        $0.47    $2.26        $2.19
                                      =====        =====    =====        =====

    *    Adjusted for retrospective application of ASC 470-20.  Refer to
    our earnings release dated
          October 23, 2009 for the impact of the retrospective application of
          ASC 470-20.

    For more information contact:

    Jennifer Jarman
    The Blueshirt Group
    415-217-7722
    jennifer@blueshirtgroup.com

SOURCE Synaptics Inc.