Retail Sales Grow 9 Percent in Constant Currency
Logitech International (SIX:LOGN) (Nasdaq:LOGI) today announced
financial results from continuing operations for the third quarter of
Fiscal Year 2016.
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Q3 sales were $621 million, up 3 percent compared to Q3 of the prior
year. Q3 retail sales (total sales excluding OEM) were $595
million and grew 9 percent in constant currency.
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Q3 GAAP operating income was $69 million. Q3 GAAP earnings per share
(EPS) were $0.41, compared to $0.40 in the same quarter a year ago.
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Q3 non-GAAP operating income was $74 million, with non-GAAP EPS
of $0.41, compared to $0.43 in the same quarter a year ago.
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Cash flow from operations in the quarter, including Lifesize, was $166
million.
“We delivered a strong performance in Q3, evident across the business,”
said Bracken P. Darrell, Logitech president and chief executive officer.
“In this milestone quarter for the company, a new Logitech emerged as we
completed the exit of our OEM business and separated Lifesize.
Logitech’s future business remains – and the future looks bright. We
grew 9 percent in constant currency and our operating income and
operating cash flow were strong. Combined, the Gaming, Mobile Speakers
and Video Collaboration categories grew 34 percent in constant currency
and each of them reached record high sales for a quarter. I’m delighted
to raise our outlook as we enter the last quarter of the year.”
Outlook
Logitech increased its profitability outlook for Fiscal Year 2016 to
approximately $170 million in non-GAAP operating income from $150
million, which included Lifesize. The Company also increased its outlook
for retail sales to 7 to 9 percent growth in constant currency, up from
7 percent.
Prepared Remarks Available Online
Logitech has made its prepared written remarks for the financial results
teleconference available online on the Logitech corporate website at http://ir.logitech.com.
Financial Results Teleconference and Webcast
Logitech will hold a financial results teleconference to discuss the
results for Q3 FY 2016 on Jan. 21, 2016 at 8:30 a.m. Eastern Standard
Time and 2:30 p.m. Central European Time. A live webcast of the call
will be available on the Logitech corporate website at http://ir.logitech.com.
Continuing Operations
Logitech separated its Lifesize division from the Company on Dec. 28,
2015. The Company’s third quarter of Fiscal Year 2016 ended on Dec. 25,
2015, even though, for purposes of presentation, the Company has
indicated its third quarter periods as ending on Dec. 31. Except as
otherwise noted, all of the results reported in this press release for
both the third quarter of Fiscal Year 2016 and the third quarter of
Fiscal Year 2015, as well as comparisons between periods, are focused on
results from continuing operations and do not address the performance of
Lifesize, which is now reported in the Company’s financial statements
under discontinued operations or total Logitech including discontinued
operations. Logitech’s previous outlook of $150 million in non-GAAP
operating income included outlook for Lifesize results. Logitech’s new
outlook does not include outlook for Lifesize results. For more
information on the impact of the Lifesize separation on Logitech’s
historical results, please refer to the Financial Reporting section of
Logitech’s Financial History, available on the Logitech corporate
website at http://ir.logitech.com.
Use of Non-GAAP Financial Information
To facilitate comparisons to Logitech’s historical results, Logitech has
included non-GAAP adjusted measures, which exclude share-based
compensation expense, amortization of other intangible assets,
restructuring charges (credits), investment impairment (recovery),
benefit from (provision for) income taxes, one-time special charges and
other items detailed under “Supplemental Financial Information” after
the tables below. Logitech also presents percentage sales growth in
constant currency, a non-GAAP measure, to show performance unaffected by
fluctuations in currency exchange rates. Percentage sales growth in
constant currency is calculated by translating prior period sales in
each local currency at the current period’s average exchange rate for
that currency and comparing that to current period
sales. Logitech believes this information will help investors to
evaluate its current period performance and trends in its business. With
respect to the Company’s outlook for non-GAAP operating income, most of
these excluded amounts pertain to events that have not yet occurred and
are not currently possible to estimate with a reasonable degree of
accuracy. Therefore, no reconciliation to the GAAP amounts has been
provided for Fiscal Year 2016.
About Logitech
Logitech designs products that have an everyday place in people's lives,
connecting them to the digital experiences they care about. Over 30
years ago Logitech started connecting people through computers, and now
it’s designing products that bring people together through music,
gaming, video and computing. Founded in 1981, Logitech International is
a Swiss public company listed on the SIX Swiss Exchange (LOGN) and on
the Nasdaq Global Select Market (LOGI). Find Logitech at www.logitech.com,
the company blog or @Logitech.
This press release contains forward-looking statements within the
meaning of the federal securities laws, including, without limitation
statements regarding: Logitech’s future and outlook for Fiscal Year 2016
operating income and sales growth. The forward-looking statements in
this release involve risks and uncertainties that could cause Logitech’s
actual results and events to differ materially from those anticipated in
these forward-looking statements, including, without limitation: if our
product offerings, marketing activities and investment prioritization
decisions do not result in the sales, profitability or profitability
growth we expect, or when we expect it; the demand of our customers and
our consumers for our products and our ability to accurately forecast
it; if we fail to innovate and develop new products in a timely and
cost-effective manner for our new and existing product categories; if we
do not successfully execute on our growth opportunities in our new
product categories or our growth opportunities are more limited than we
expect; if sales of PC peripherals are less than we expect; the effect
of pricing, product, marketing and other initiatives by our competitors,
and our reaction to them, on our sales, gross margins and profitability;
if our products and marketing strategies fail to separate our products
from competitors’ products; if we do not fully realize our goals to
lower our costs and improve our operating leverage; if there is a
deterioration of business and economic conditions in one or more of our
sales regions or product categories, or significant fluctuations in
exchange rates. A detailed discussion of these and other risks and
uncertainties that could cause actual results and events to differ
materially from such forward-looking statements is included in
Logitech’s periodic filings with the Securities and Exchange Commission,
including our Annual Report on Form 10-K for the fiscal year ended March
31, 2015 and our Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2015, available at www.sec.gov,
under the caption Risk Factors and elsewhere. Logitech does not
undertake any obligation to update any forward-looking statements to
reflect new information or events or circumstances occurring after the
date of this press release.
Note that unless noted otherwise, comparisons are year over year.
2016 Logitech, Logicool, Logi and other Logitech marks are owned by
Logitech and may be registered. All other trademarks are the property of
their respective owners. For more information about Logitech and its
products, visit the company’s website at www.logitech.com.
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LOGITECH INTERNATIONAL S.A.
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(In thousands, except per share amounts) - Unaudited
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Three Months Ended
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Nine Months Ended
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December 31
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December 31
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GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
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2015
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2014
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2015
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2014
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Net sales
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$
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621,079
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$
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604,322
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$
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1,587,259
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$
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1,562,625
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Cost of goods sold
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412,582
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391,715
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1,048,312
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998,842
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Gross profit
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208,497
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212,607
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538,947
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563,783
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Operating expenses:
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Marketing and selling
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87,295
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87,486
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241,924
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|
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246,103
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Research and development
|
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29,273
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27,397
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86,336
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80,009
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General and administrative
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24,080
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28,172
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77,966
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96,762
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Restructuring charges (credits), net
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(666
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)
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|
—
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14,018
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(35
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)
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Total operating expenses
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139,982
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|
|
|
|
143,055
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420,244
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|
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422,839
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Operating income
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68,515
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69,552
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118,703
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140,944
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Interest income, net
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105
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224
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549
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824
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Other income (expense), net
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862
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(2,688
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)
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(894
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)
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(3,702
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)
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Income from continuing operations before income taxes
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69,482
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|
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67,088
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|
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|
118,358
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|
|
|
|
138,066
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Provision for income taxes
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|
1,442
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|
|
|
|
670
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|
|
|
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7,006
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|
|
|
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8,455
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Net income from continuing operations
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68,040
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66,418
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111,352
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|
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129,611
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Loss from discontinued operations, net of taxes
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(2,954
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)
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(3,634
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)
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(20,732
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)
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(11,061
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)
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Net income
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$
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65,086
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$
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62,784
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$
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90,620
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$
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118,550
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Net income (loss) per share - basic:
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Continuing operations
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$
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0.42
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$
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0.41
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$
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0.68
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|
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$
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0.79
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Discontinued operations
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$
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(0.02
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)
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|
|
$
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(0.03
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)
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|
|
$
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(0.13
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)
|
|
|
$
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(0.06
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)
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Net income per share - basic
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$
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0.40
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|
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$
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0.38
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|
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$
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0.55
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$
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0.73
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Net income (loss) per share - diluted:
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Continuing operations
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$
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0.41
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$
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0.40
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$
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0.67
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$
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0.78
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Discontinued operations
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$
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(0.02
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)
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$
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(0.02
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)
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$
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(0.12
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)
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$
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(0.07
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)
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Net income per share - diluted
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$
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0.39
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$
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0.38
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$
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0.55
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$
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0.71
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Weighted average shares used to compute net income (loss) per share:
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Basic
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162,669
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163,533
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163,521
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163,261
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Diluted
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165,168
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166,321
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165,951
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166,076
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Cash dividends per share
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$
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—
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$
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0.27
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$
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0.53
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|
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$
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0.27
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|
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LOGITECH INTERNATIONAL S.A.
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(In thousands) - Unaudited
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|
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|
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|
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December 31
|
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March 31,
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CONSOLIDATED BALANCE SHEETS
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2015
|
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2015
|
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Current assets:
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Cash and cash equivalents
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$
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505,082
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$
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533,380
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Accounts receivable, net
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|
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284,089
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167,196
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Inventories
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239,962
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255,980
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Other current assets
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71,661
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63,362
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Current assets held for sale
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28,969
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32,102
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Total current assets
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1,129,763
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|
1,052,020
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Non-current assets:
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Property, plant and equipment, net
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99,145
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86,478
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Goodwill
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218,198
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|
|
|
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218,213
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Other assets
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57,271
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62,333
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Long-term assets held for sale
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5,506
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|
|
|
|
7,636
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Total assets
|
|
|
$
|
1,509,883
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|
|
$
|
1,426,680
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|
|
|
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|
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Current liabilities:
|
|
|
|
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|
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Accounts payable
|
|
|
$
|
363,781
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|
|
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$
|
292,797
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Accrued and other current liabilities
|
|
|
|
211,219
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|
|
|
|
163,344
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Current liabilities held for sale
|
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|
|
34,642
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|
|
|
|
38,766
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Total current liabilities
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|
|
|
609,642
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|
|
|
|
494,907
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Non-current liabilities:
|
|
|
|
|
|
|
Income taxes payable
|
|
|
|
67,885
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|
|
|
|
72,107
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Other non-current liabilities
|
|
|
|
85,347
|
|
|
|
|
91,195
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Long-term liabilities held for sale
|
|
|
|
10,063
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|
|
|
|
10,337
|
Total liabilities
|
|
|
|
772,937
|
|
|
|
|
668,546
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
|
736,946
|
|
|
|
|
758,134
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|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
|
$
|
1,509,883
|
|
|
|
$
|
1,426,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) - Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
December 31
|
|
|
December 31
|
CONSOLIDATED STATEMENTS OF CASH FLOWS *
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2015
|
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2014
|
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2015
|
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2014
|
|
|
|
|
|
|
|
|
|
|
|
|
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Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
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Net income
|
|
|
$
|
65,086
|
|
|
|
$
|
62,784
|
|
|
|
$
|
90,620
|
|
|
|
$
|
118,550
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
14,647
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|
|
|
|
9,867
|
|
|
|
|
36,884
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|
|
|
|
29,559
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Amortization of other intangible assets
|
|
|
|
310
|
|
|
|
|
2,266
|
|
|
|
|
1,536
|
|
|
|
|
7,624
|
|
Share-based compensation expense
|
|
|
|
6,618
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|
|
|
|
7,047
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|
|
|
|
19,875
|
|
|
|
|
20,046
|
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Investment impairment (recovery)
|
|
|
|
(4
|
)
|
|
|
|
2,154
|
|
|
|
|
176
|
|
|
|
|
2,259
|
|
Gain on disposal of property, plant and equipment
|
|
|
|
—
|
|
|
|
|
(34
|
)
|
|
|
|
—
|
|
|
|
|
(44
|
)
|
Excess tax benefits from share-based compensation
|
|
|
|
(926
|
)
|
|
|
|
(1,867
|
)
|
|
|
|
(2,089
|
)
|
|
|
|
(2,533
|
)
|
Deferred income taxes
|
|
|
|
1,962
|
|
|
|
|
(793
|
)
|
|
|
|
2,914
|
|
|
|
|
(3,151
|
)
|
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
(20,411
|
)
|
|
|
|
(57,465
|
)
|
|
|
|
(115,814
|
)
|
|
|
|
(131,026
|
)
|
Inventories
|
|
|
|
73,508
|
|
|
|
|
(3,187
|
)
|
|
|
|
18,066
|
|
|
|
|
(30,171
|
)
|
Other assets
|
|
|
|
(818
|
)
|
|
|
|
(952
|
)
|
|
|
|
(9,329
|
)
|
|
|
|
(6,592
|
)
|
Accounts payable
|
|
|
|
18,402
|
|
|
|
|
51,198
|
|
|
|
|
68,763
|
|
|
|
|
111,310
|
|
Accrued and other liabilities
|
|
|
|
7,334
|
|
|
|
|
5,336
|
|
|
|
|
39,244
|
|
|
|
|
21,227
|
|
Net cash provided by operating activities
|
|
|
|
165,708
|
|
|
|
|
76,354
|
|
|
|
|
150,846
|
|
|
|
|
137,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
(19,166
|
)
|
|
|
|
(9,813
|
)
|
|
|
|
(50,443
|
)
|
|
|
|
(34,777
|
)
|
Investment in privately held companies
|
|
|
|
(1,619
|
)
|
|
|
|
—
|
|
|
|
|
(2,099
|
)
|
|
|
|
(2,550
|
)
|
Purchase of trading investments
|
|
|
|
(1,746
|
)
|
|
|
|
(1,233
|
)
|
|
|
|
(4,395
|
)
|
|
|
|
(3,463
|
)
|
Proceeds from sales of trading investments
|
|
|
|
1,813
|
|
|
|
|
1,311
|
|
|
|
|
4,668
|
|
|
|
|
3,856
|
|
Net cash used in investing activities
|
|
|
|
(20,718
|
)
|
|
|
|
(9,735
|
)
|
|
|
|
(52,269
|
)
|
|
|
|
(36,934
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of cash dividends
|
|
|
|
—
|
|
|
|
|
(43,767
|
)
|
|
|
|
(85,915
|
)
|
|
|
|
(43,767
|
)
|
Contingent consideration related to prior acquisition
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(100
|
)
|
Purchases of treasury shares
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(48,802
|
)
|
|
|
|
—
|
|
Repurchase of ESPP awards
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,078
|
)
|
Proceeds from sales of shares upon exercise of options and purchase
rights
|
|
|
|
1,459
|
|
|
|
|
933
|
|
|
|
|
12,562
|
|
|
|
|
2,466
|
|
Tax withholdings related to net share settlements of restricted
stock units
|
|
|
|
(1,855
|
)
|
|
|
|
(6,133
|
)
|
|
|
|
(5,357
|
)
|
|
|
|
(7,456
|
)
|
Excess tax benefits from share-based compensation
|
|
|
|
926
|
|
|
|
|
1,867
|
|
|
|
|
2,089
|
|
|
|
|
2,533
|
|
Net cash provided by (used in) financing activities
|
|
|
|
530
|
|
|
|
|
(47,100
|
)
|
|
|
|
(125,423
|
)
|
|
|
|
(47,402
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(2,307
|
)
|
|
|
|
(3,128
|
)
|
|
|
|
(1,205
|
)
|
|
|
|
(5,521
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
143,213
|
|
|
|
|
16,391
|
|
|
|
|
(28,051
|
)
|
|
|
|
47,201
|
|
Cash and cash equivalents, beginning of the period
|
|
|
|
365,774
|
|
|
|
|
500,222
|
|
|
|
|
537,038
|
|
|
|
|
469,412
|
|
Cash and cash equivalents, end of the period
|
|
|
$
|
508,987
|
|
|
|
$
|
516,613
|
|
|
|
$
|
508,987
|
|
|
|
$
|
516,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following amounts reflected in the statements of cash flows
are included in discontinued operations:
|
Depreciation
|
|
|
$
|
787
|
|
|
|
$
|
630
|
|
|
|
$
|
2,207
|
|
|
|
$
|
1,930
|
|
Amortization of other intangible assets
|
|
|
$
|
198
|
|
|
|
$
|
2,100
|
|
|
|
$
|
1,089
|
|
|
|
$
|
7,027
|
|
Cash and cash equivalents, beginning of the period
|
|
|
$
|
4,639
|
|
|
|
$
|
1,397
|
|
|
|
$
|
3,659
|
|
|
|
$
|
1,894
|
|
Cash and cash equivalents, end of the period
|
|
|
$
|
3,905
|
|
|
|
$
|
8,128
|
|
|
|
$
|
3,905
|
|
|
|
$
|
8,128
|
|
__________________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*statements of cash flows include discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) - Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
December 31
|
|
|
December 31
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales by channel:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
|
$
|
594,567
|
|
|
|
$
|
574,025
|
|
|
|
4
|
%
|
|
|
$
|
1,516,218
|
|
|
|
$
|
1,471,301
|
|
|
|
3
|
%
|
OEM
|
|
|
|
26,512
|
|
|
|
|
30,297
|
|
|
|
(12
|
)
|
|
|
|
71,041
|
|
|
|
|
91,324
|
|
|
|
(22
|
)
|
Total net sales
|
|
|
$
|
621,079
|
|
|
|
$
|
604,322
|
|
|
|
3
|
|
|
|
$
|
1,587,259
|
|
|
|
$
|
1,562,625
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net retail sales by product category(*):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile Speakers
|
|
|
$
|
85,081
|
|
|
|
$
|
62,264
|
|
|
|
37
|
|
|
|
$
|
206,175
|
|
|
|
$
|
139,631
|
|
|
|
48
|
|
Gaming
|
|
|
|
77,706
|
|
|
|
|
70,188
|
|
|
|
11
|
|
|
|
|
189,000
|
|
|
|
|
164,570
|
|
|
|
15
|
|
Video Collaboration
|
|
|
|
26,216
|
|
|
|
|
16,935
|
|
|
|
55
|
|
|
|
|
67,460
|
|
|
|
|
45,968
|
|
|
|
47
|
|
Tablet & Other Accessories
|
|
|
|
35,873
|
|
|
|
|
55,100
|
|
|
|
(35
|
)
|
|
|
|
73,222
|
|
|
|
|
114,974
|
|
|
|
(36
|
)
|
Growth
|
|
|
|
224,876
|
|
|
|
|
204,487
|
|
|
|
10
|
|
|
|
|
535,857
|
|
|
|
|
465,143
|
|
|
|
15
|
|
Pointing Devices
|
|
|
|
139,711
|
|
|
|
|
141,789
|
|
|
|
(1
|
)
|
|
|
|
381,364
|
|
|
|
|
382,524
|
|
|
|
—
|
|
Keyboards & Combos
|
|
|
|
116,531
|
|
|
|
|
114,051
|
|
|
|
2
|
|
|
|
|
324,458
|
|
|
|
|
325,217
|
|
|
|
—
|
|
Audio-PC & Wearables
|
|
|
|
57,300
|
|
|
|
|
56,741
|
|
|
|
1
|
|
|
|
|
149,341
|
|
|
|
|
162,480
|
|
|
|
(8
|
)
|
PC Webcams
|
|
|
|
29,648
|
|
|
|
|
31,709
|
|
|
|
(6
|
)
|
|
|
|
74,689
|
|
|
|
|
77,454
|
|
|
|
(4
|
)
|
Home Control
|
|
|
|
25,684
|
|
|
|
|
25,116
|
|
|
|
2
|
|
|
|
|
48,548
|
|
|
|
|
56,224
|
|
|
|
(14
|
)
|
Profit Maximization
|
|
|
|
368,874
|
|
|
|
|
369,406
|
|
|
|
—
|
|
|
|
|
978,400
|
|
|
|
|
1,003,899
|
|
|
|
(3
|
)
|
Retail Strategic Sales
|
|
|
|
593,750
|
|
|
|
|
573,893
|
|
|
|
3
|
|
|
|
|
1,514,257
|
|
|
|
|
1,469,042
|
|
|
|
3
|
|
Non-Strategic
|
|
|
|
817
|
|
|
|
|
132
|
|
|
|
519
|
|
|
|
|
1,961
|
|
|
|
|
2,259
|
|
|
|
(13
|
)
|
Total net retail sales
|
|
|
$
|
594,567
|
|
|
|
$
|
574,025
|
|
|
|
4
|
|
|
|
$
|
1,516,218
|
|
|
|
$
|
1,471,301
|
|
|
|
3
|
|
__________________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Certain products within the retail product categories as
presented in prior periods have been reclassified to conform to
the current periods' presentation, with no impact on previously
reported total net retail sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share amounts) - Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP TO NON-GAAP RECONCILIATION (A)
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
December 31
|
|
|
December 31
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit - GAAP
|
|
|
$
|
208,497
|
|
|
|
$
|
212,607
|
|
|
|
$
|
538,947
|
|
|
|
$
|
563,783
|
|
Share-based compensation expense
|
|
|
|
464
|
|
|
|
|
560
|
|
|
|
|
1,648
|
|
|
|
|
1,725
|
|
Gross profit - Non-GAAP
|
|
|
$
|
208,961
|
|
|
|
$
|
213,167
|
|
|
|
$
|
540,595
|
|
|
|
$
|
565,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin - GAAP
|
|
|
|
33.6
|
%
|
|
|
|
35.2
|
%
|
|
|
|
34.0
|
%
|
|
|
|
36.1
|
%
|
Gross margin - Non-GAAP
|
|
|
|
33.6
|
%
|
|
|
|
35.3
|
%
|
|
|
|
34.1
|
%
|
|
|
|
36.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - GAAP
|
|
|
$
|
139,982
|
|
|
|
$
|
143,055
|
|
|
|
$
|
420,244
|
|
|
|
$
|
422,839
|
|
Less: Share-based compensation expense
|
|
|
|
5,998
|
|
|
|
|
5,837
|
|
|
|
|
17,636
|
|
|
|
|
17,004
|
|
Less: Amortization of other intangible assets
|
|
|
|
112
|
|
|
|
|
166
|
|
|
|
|
447
|
|
|
|
|
597
|
|
Less: Restructuring charges (credits), net
|
|
|
|
(666
|
)
|
|
|
|
—
|
|
|
|
|
14,018
|
|
|
|
|
(35
|
)
|
Less: One time special charge
|
|
|
|
(249
|
)
|
|
|
|
2,528
|
|
|
|
|
4,121
|
|
|
|
|
19,524
|
|
Operating expenses - Non-GAAP
|
|
|
$
|
134,787
|
|
|
|
$
|
134,524
|
|
|
|
$
|
384,022
|
|
|
|
$
|
385,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of net sales - GAAP
|
|
|
|
22.5
|
%
|
|
|
|
23.7
|
%
|
|
|
|
26.5
|
%
|
|
|
|
27.1
|
%
|
% of net sales - Non-GAAP
|
|
|
|
21.7
|
%
|
|
|
|
22.3
|
%
|
|
|
|
24.2
|
%
|
|
|
|
24.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income - GAAP
|
|
|
$
|
68,515
|
|
|
|
$
|
69,552
|
|
|
|
$
|
118,703
|
|
|
|
$
|
140,944
|
|
Share-based compensation expense
|
|
|
|
6,462
|
|
|
|
|
6,397
|
|
|
|
|
19,284
|
|
|
|
|
18,729
|
|
Amortization of other intangible assets
|
|
|
|
112
|
|
|
|
|
166
|
|
|
|
|
447
|
|
|
|
|
597
|
|
Restructuring charges (credits), net
|
|
|
|
(666
|
)
|
|
|
|
—
|
|
|
|
|
14,018
|
|
|
|
|
(35
|
)
|
One time special charge
|
|
|
|
(249
|
)
|
|
|
|
2,528
|
|
|
|
|
4,121
|
|
|
|
|
19,524
|
|
Operating income - Non-GAAP
|
|
|
$
|
74,174
|
|
|
|
$
|
78,643
|
|
|
|
$
|
156,573
|
|
|
|
$
|
179,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of net sales - GAAP
|
|
|
|
11.0
|
%
|
|
|
|
11.5
|
%
|
|
|
|
7.5
|
%
|
|
|
|
9.0
|
%
|
% of net sales - Non-GAAP
|
|
|
|
11.9
|
%
|
|
|
|
13.0
|
%
|
|
|
|
9.9
|
%
|
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations
|
|
|
$
|
68,040
|
|
|
|
$
|
66,418
|
|
|
|
$
|
111,352
|
|
|
|
$
|
129,611
|
|
Share-based compensation expense
|
|
|
|
6,462
|
|
|
|
|
6,397
|
|
|
|
|
19,284
|
|
|
|
|
18,729
|
|
Amortization of other intangible assets
|
|
|
|
112
|
|
|
|
|
166
|
|
|
|
|
447
|
|
|
|
|
597
|
|
Restructuring charges (credits), net
|
|
|
|
(666
|
)
|
|
|
|
—
|
|
|
|
|
14,018
|
|
|
|
|
(35
|
)
|
One time special charge
|
|
|
|
(249
|
)
|
|
|
|
2,528
|
|
|
|
|
4,121
|
|
|
|
|
19,524
|
|
Investment impairment (recovery)
|
|
|
|
(4
|
)
|
|
|
|
2,154
|
|
|
|
|
176
|
|
|
|
|
2,259
|
|
Provision for income taxes
|
|
|
|
(6,709
|
)
|
|
|
|
(6,063
|
)
|
|
|
|
(9,961
|
)
|
|
|
|
(6,934
|
)
|
Net income from continuing operations - Non-GAAP
|
|
|
$
|
66,986
|
|
|
|
$
|
71,600
|
|
|
|
$
|
139,437
|
|
|
|
$
|
163,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted - GAAP
|
|
|
$
|
0.41
|
|
|
|
$
|
0.40
|
|
|
|
$
|
0.67
|
|
|
|
$
|
0.78
|
|
Diluted - Non-GAAP
|
|
|
$
|
0.41
|
|
|
|
$
|
0.43
|
|
|
|
$
|
0.84
|
|
|
|
$
|
0.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted - GAAP and Non-GAAP
|
|
|
|
165,168
|
|
|
|
|
166,321
|
|
|
|
|
165,951
|
|
|
|
|
166,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) - Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARED BASED COMPENSATION EXPENSE
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
December 31
|
|
|
December 31
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based Compensation Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
$
|
464
|
|
|
|
$
|
560
|
|
|
|
$
|
1,648
|
|
|
|
$
|
1,725
|
|
Marketing and selling
|
|
|
|
2,484
|
|
|
|
|
2,552
|
|
|
|
|
6,545
|
|
|
|
|
6,659
|
|
Research and Development
|
|
|
|
846
|
|
|
|
|
765
|
|
|
|
|
2,174
|
|
|
|
|
1,780
|
|
General and administrative
|
|
|
|
2,668
|
|
|
|
|
2,520
|
|
|
|
|
8,917
|
|
|
|
|
8,565
|
|
Restructuring
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
7
|
|
|
|
|
—
|
|
Income tax benefit
|
|
|
|
(1,446
|
)
|
|
|
|
(1,391
|
)
|
|
|
|
(2,479
|
)
|
|
|
|
(4,285
|
)
|
Total share-based compensation expense, net of income taxes
|
|
|
$
|
5,016
|
|
|
|
$
|
5,006
|
|
|
|
$
|
16,812
|
|
|
|
$
|
14,444
|
|
__________________
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Non-GAAP Financial Measures
To supplement our condensed consolidated financial results prepared in
accordance with GAAP, we use a number of financial measures, both GAAP
and non-GAAP, in analyzing and assessing our overall business
performance, for making operating decisions and for forecasting and
planning future periods. We consider the use of non-GAAP financial
measures helpful in assessing our current financial performance, ongoing
operations and prospects for the future as well as understanding
financial and business trends relating to our financial condition and
results of operations.
While we use non-GAAP financial measures as a tool to enhance our
understanding of certain aspects of our financial performance and to
provide incremental insight into the underlying factors and trends
affecting both our performance and our cash-generating potential, we do
not consider these measures to be a substitute for, or superior to, the
information provided by GAAP financial measures. Consistent with this
approach, we believe that disclosing non-GAAP financial measures to the
readers of our financial statements provides useful supplemental data
that, while not a substitute for GAAP financial measures, can offer
insight in the review of our financial and operational performance and
enables investors to more fully understand trends in our current and
future performance. In assessing our business during the quarter ended
December 31, 2015, we excluded items in the following general
categories, each of which are described below:
Share-based compensation expenses. We believe that providing
non-GAAP measures excluding share-based compensation expense, in
addition to the GAAP measures, allows for a more transparent comparison
of our financial results from period to period. We prepare and maintain
our budgets and forecasts for future periods on a basis consistent with
this non-GAAP financial measure. Further, companies use a variety of
types of equity awards as well as a variety of methodologies,
assumptions and estimates to determine share-based compensation expense.
We believe that excluding share-based compensation expense enhances our
ability and the ability of investors to understand the impact of
non-cash share-based compensation on our operating results and to
compare our results against the results of other companies.
Amortization of other intangible assets. We incur intangible
asset amortization expense, primarily in connection with our
acquisitions of various businesses and technologies. The amortization of
purchased intangibles varies depending on the level of acquisition
activity. We exclude these various charges in budgeting, planning and
forecasting future periods and we believe that providing the non-GAAP
measures excluding these various non-cash charges, as well as the GAAP
measures, provides additional insight when comparing our operating
expenses and financial results from period to period.
Restructuring charges (credits). These expenses are associated
with re-aligning our business strategies based on current economic
conditions. We have undertaken several restructurings in recent years.
In connection with our restructuring initiatives, we incurred
restructuring charges related to employee terminations, facility
closures and early cancellation of certain contracts. We believe that
providing the non-GAAP measures excluding these charges, as well as the
GAAP measures, assists our investors because such charges are not
reflective of our ongoing operating results in the current period.
Investment impairment (recovery). We incur investment impairment
and recovery, primarily related to our investments in various
privately-held companies. The investment impairment or recovery varies
depending on the operational and financial performance of the
privately-held companies we invested in. We believe that providing the
non-GAAP measures excluding these charges, as well as the GAAP measures,
assists our investors because such charges are not reflective of our
ongoing operations.
One-time special charges: costs related to investigations and
related expenses. These expenses are forensic accounting, audit,
consulting and legal fees related to the Audit Committee’s investigation
and the ongoing formal investigation by and settlement discussion with
the Securities and Exchange Commission (SEC), together with accruals
based on settlement discussion with the SEC. We believe that providing
the non-GAAP measures excluding these charges, as well as the GAAP
measures, assists our investors because such charges are one-time in
nature and not reflective of our ongoing operations.
Other charges. We provided non-GAAP measures excluding the effect
of certain charges and income that are not reflective of our ongoing
operations.
In addition, Logitech presents percentage sales growth in constant
currency, a non-GAAP measure, to show performance unaffected by
fluctuations in currency exchange rates. Percentage sales growth in
constant currency is calculated by translating prior period sales in
each local currency at the current period’s average exchange rate for
that currency and comparing that to current period sales. Sales for the
three months ended December 31, 2015 compared to sales for the three
months ended December 31, 2014 grew 8 percent in constant currency and
grew 3 percent in U.S. Dollars. Retail sales for the three months ended
December 31, 2015 compared to retail sales for the three months ended
December 31, 2014 grew 9 percent in constant currency and grew 4 percent
in U.S. Dollars. Sales for the combined Gaming, Mobile Speakers and
Video Collaboration categories for the three months ended December 31,
2015 compared to sales for those combined categories for the three
months ended December 31, 2014 grew 34 percent in constant currency and
grew 27 percent in U.S. Dollars.
Each of the non-GAAP financial measures described above, and used in
this press release, should not be considered in isolation from, or as a
substitute for, a measure of financial performance prepared in
accordance with GAAP. Further, investors are cautioned that there are
inherent limitations associated with the use of each of these non-GAAP
financial measures as an analytical tool. In particular, these non-GAAP
financial measures are not based on a comprehensive set of accounting
rules or principles and many of the adjustments to the GAAP financial
measures reflect the exclusion of items that are recurring and may be
reflected in the Company’s financial results for the foreseeable future.
We compensate for these limitations by providing specific information in
the reconciliation included in this press release regarding the GAAP
amounts excluded from the non-GAAP financial measures. In addition, as
noted above, we evaluate the non-GAAP financial measures together with
the most directly comparable GAAP financial information.
(LOGIIR)
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