Logitech Delivers Highest Retail Sales Growth in Six Years; Profit Hits Nine-Year High
FY 2017 Retail Sales Grow 14%; Non-GAAP Operating Income Grows 33%
Logitech International (SIX:LOGN) (Nasdaq:LOGI) today announced financial results for the fourth quarter and full year of Fiscal
Year 2017.
Q4 closed a strong fiscal year with sales for the quarter reaching $496 million. Q4 retail sales grew 17 percent in constant
currency, GAAP operating income more than doubled to $22 million and non-GAAP operating income grew 61 percent to $36 million.
For the full Fiscal Year 2017, ended March 31, 2017:
- Retail sales grew 14 percent in constant currency, the highest annual retail sales growth in six
years. Retail sales grew 13 percent in USD; also a six-year high.
- Sales were $2.21 billion, up 9 percent in USD compared to the prior year, which still included OEM
sales, the business the Company exited in Q3 of the prior fiscal year.
- GAAP operating income grew 53 percent to $197 million - the highest in nine years - compared to $129
million a year ago. GAAP earnings per share (EPS) grew 51 percent to $1.16, compared to $0.77 a year ago.
- Non-GAAP operating income grew 33 percent to $238 million - also the highest in nine years - compared
to $179 million a year ago. Non-GAAP EPS grew 35 percent to $1.32, compared to $0.98 a year ago.
- Cash flow from operations grew 52 percent to $279 million, the highest level in seven years.
Bracken Darrell, Logitech president and chief executive officer, said, “Our FY 2017 performance demonstrates the strength of our
strategy. For the fourth consecutive year, we accelerated growth in retail sales. We grew across almost all our product categories
and in all our regions. Many categories - Video Collaboration, Mobile Speakers, Gaming, and Smart Home - grew double digits, and PC
Peripherals saw solid growth too. And we’re just getting started. I’m excited by our pipeline of innovative products and the
amazing world of opportunities unfolding in front of us.”
Vincent Pilette, Logitech CFO, said, “This is a watershed year for Logitech. We improved our financial fundamentals, delivering
our highest gross margin in Company history while growing the business by 14%. That, combined with our continued investment in
growth initiatives, gives Logitech a strong and exciting platform for the future.”
Outlook
Logitech confirmed its Fiscal Year 2018 outlook of high single-digit retail sales growth in constant currency and $250 to $260
million in non-GAAP operating income.
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 Q4 and the full FY 2017 on Weds., April 26,
2017 at 8:30 a.m. Eastern Daylight Time and 2:30 p.m. Central European Summer Time. A live webcast of the call will be available on
the Logitech corporate website at http://ir.logitech.com.
Continued Operations
Logitech separated its Lifesize division from the Company on Dec. 28, 2015. Since then, the results of Lifesize have not been
included in our financial statements. Except as otherwise noted, all of the results reported in this press release as well as
comparisons between periods are focused on results from continuing operations and do not address the performance of Lifesize, which
is reported in the Company’s financial statements under discontinued operations or total Logitech including discontinued operations
for all the periods prior to the disposition of Lifesize. 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 and Constant Currency
To facilitate comparisons to Logitech’s historical results, Logitech has included non-GAAP adjusted measures, which exclude
share-based compensation expense, amortization of intangible assets, purchase accounting effect on inventory, acquisition-related
costs, change in fair value of contingent consideration for business acquisition, restructuring charges (credits), gain (loss) on
equity-method investment, investigation and related expenses, non-GAAP income tax adjustment, and other items detailed under
“Supplemental Financial Information” after the tables below. Logitech also presents percentage sales growth in constant currency 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, used together with the GAAP financial 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 2018.
About Logitech
Logitech designs products that have an everyday place in people's lives, connecting them to the digital experiences they care
about. More than 35 years ago, Logitech started connecting people through computers, and now it’s a multi-brand company designing
products that bring people together through music, gaming, video and computing. Brands of Logitech include Jaybird, Logitech G and Ultimate Ears. Founded in 1981, and headquartered in Lausanne, Switzerland, 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: our strategy, pipeline of products, innovation, opportunities, investment in growth
opportunities, platform for the future, future performance, and outlook for Fiscal Year 2018 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 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, 2016 and our Quarterly Report on Form 10-Q for fiscal quarter ended December 31, 2016, 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.
2017 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.
|
| PRELIMINARY RESULTS |
| (In thousands, except per share amounts) -
unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Fiscal Years Ended |
|
|
|
March 31, |
|
|
March 31, |
|
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net sales |
|
|
$ |
496,165 |
|
|
|
$ |
430,841 |
|
|
|
$ |
2,207,040 |
|
|
|
$ |
2,018,100 |
|
| Cost of goods sold |
|
|
311,303 |
|
|
|
288,741 |
|
|
|
1,395,211 |
|
|
|
1,337,053 |
|
| Amortization of intangible assets and purchase accounting effect on
inventory |
|
|
1,470 |
|
|
|
— |
|
|
|
6,175 |
|
|
|
— |
|
| Gross profit |
|
|
183,392 |
|
|
|
142,100 |
|
|
|
805,654 |
|
|
|
681,047 |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| Marketing and selling |
|
|
99,941 |
|
|
|
77,091 |
|
|
|
379,641 |
|
|
|
319,015 |
|
| Research and development |
|
|
33,658 |
|
|
|
27,287 |
|
|
|
130,525 |
|
|
|
113,176 |
|
| General and administrative |
|
|
24,683 |
|
|
|
23,046 |
|
|
|
100,270 |
|
|
|
101,012 |
|
| Amortization of intangible assets and acquisition-related costs |
|
|
1,279 |
|
|
|
537 |
|
|
|
5,814 |
|
|
|
984 |
|
| Change in fair value of contingent consideration for business acquisition |
|
|
1,833 |
|
|
|
— |
|
|
|
(8,092 |
) |
|
|
— |
|
| Restructuring charges, net |
|
|
67 |
|
|
|
3,784 |
|
|
|
23 |
|
|
|
17,802 |
|
| Total operating expenses |
|
|
161,461 |
|
|
|
131,745 |
|
|
|
608,181 |
|
|
|
551,989 |
|
| Operating income |
|
|
21,931 |
|
|
|
10,355 |
|
|
|
197,473 |
|
|
|
129,058 |
|
| Interest income, net |
|
|
1,189 |
|
|
|
241 |
|
|
|
1,452 |
|
|
|
790 |
|
| Other income, net |
|
|
734 |
|
|
|
2,518 |
|
|
|
1,677 |
|
|
|
1,624 |
|
| Income before income taxes |
|
|
23,854 |
|
|
|
13,114 |
|
|
|
200,602 |
|
|
|
131,472 |
|
| Provision for (benefit from) income taxes |
|
|
(1,184 |
) |
|
|
(3,896 |
) |
|
|
9,113 |
|
|
|
3,110 |
|
| Net income from continuing operations |
|
|
25,038 |
|
|
|
17,010 |
|
|
|
191,489 |
|
|
|
128,362 |
|
| Gain (loss) from discontinued operations, net of income taxes |
|
|
— |
|
|
|
11,687 |
|
|
|
— |
|
|
|
(9,045 |
) |
| Net income |
|
|
$ |
25,038 |
|
|
|
$ |
28,697 |
|
|
|
$ |
191,489 |
|
|
|
$ |
119,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) per share - basic: |
|
|
|
|
|
|
|
|
|
|
|
|
| Continuing operations |
|
|
$ |
0.15 |
|
|
|
$ |
0.10 |
|
|
|
$ |
1.18 |
|
|
|
$ |
0.79 |
|
| Discontinued operations |
|
|
— |
|
|
|
0.08 |
|
|
|
— |
|
|
|
(0.06 |
) |
| Net income per share - basic |
|
|
$ |
0.15 |
|
|
|
$ |
0.18 |
|
|
|
$ |
1.18 |
|
|
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) per share - diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
| Continuing operations |
|
|
$ |
0.15 |
|
|
|
$ |
0.10 |
|
|
|
$ |
1.16 |
|
|
|
$ |
0.77 |
|
| Discontinued operations |
|
|
— |
|
|
|
0.07 |
|
|
|
— |
|
|
|
(0.05 |
) |
| Net income per share - diluted |
|
|
$ |
0.15 |
|
|
|
$ |
0.17 |
|
|
|
$ |
1.16 |
|
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares used to compute net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
162,023 |
|
|
|
162,671 |
|
|
|
162,058 |
|
|
|
163,296 |
|
| Diluted |
|
|
166,526 |
|
|
|
165,365 |
|
|
|
165,540 |
|
|
|
165,792 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash dividend per share |
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
0.57 |
|
|
|
$ |
0.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
| LOGITECH INTERNATIONAL S.A. |
| PRELIMINARY RESULTS |
| (In thousands) - unaudited |
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
March 31, |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
| Cash and cash equivalents |
|
|
$ |
547,533 |
|
|
|
$ |
519,195 |
|
| Accounts receivable, net |
|
|
174,854 |
|
|
|
142,778 |
|
| Inventories |
|
|
253,401 |
|
|
|
228,786 |
|
| Other current assets |
|
|
41,732 |
|
|
|
35,488 |
|
| Total current assets |
|
|
1,017,520 |
|
|
|
926,247 |
|
| Non-current assets: |
|
|
|
|
|
|
| Property, plant and equipment, net |
|
|
85,408 |
|
|
|
92,860 |
|
| Goodwill |
|
|
249,741 |
|
|
|
218,224 |
|
| Other intangible assets, net |
|
|
47,564 |
|
|
|
— |
|
| Other assets |
|
|
88,119 |
|
|
|
86,816 |
|
| Total assets |
|
|
$ |
1,488,352 |
|
|
|
$ |
1,324,147 |
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
| Accounts payable |
|
|
$ |
274,805 |
|
|
|
$ |
241,166 |
|
| Accrued and other current liabilities |
|
|
236,432 |
|
|
|
173,764 |
|
| Total current liabilities |
|
|
511,237 |
|
|
|
414,930 |
|
| Non-current liabilities: |
|
|
|
|
|
|
| Income taxes payable |
|
|
51,797 |
|
|
|
59,734 |
|
| Other non-current liabilities |
|
|
83,691 |
|
|
|
89,535 |
|
| Total liabilities |
|
|
646,725 |
|
|
|
564,199 |
|
|
|
|
|
|
|
|
| Shareholders' equity: |
|
|
|
|
|
|
| Registered shares, CHF 0.25 par value: |
|
|
30,148 |
|
|
|
30,148 |
|
| Issued and authorized shares—173,106 at March 31, 2017 and 2016 |
|
|
|
|
|
|
| Conditionally authorized shares—50,000 at March 31, 2017 and 2016 |
|
|
|
|
|
|
| Additional paid-in capital |
|
|
26,596 |
|
|
|
6,616 |
|
| Less shares in treasury, at cost—10,727 at March 31, 2017 and 10,697 at March 31,
2016 |
|
|
(174,037 |
) |
|
|
(128,407 |
) |
| Retained earnings |
|
|
1,059,723 |
|
|
|
963,576 |
|
| Accumulated other comprehensive loss |
|
|
(100,803 |
) |
|
|
(111,985 |
) |
| Total shareholders' equity |
|
|
841,627 |
|
|
|
759,948 |
|
| Total liabilities and shareholders' equity |
|
|
$ |
1,488,352 |
|
|
|
$ |
1,324,147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LOGITECH INTERNATIONAL S.A. |
| PRELIMINARY RESULTS |
| (In thousands) – unaudited |
| |
|
|
|
Three Months Ended |
|
|
Fiscal Years Ended |
|
|
|
March 31, |
|
|
March 31, |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
* |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
$ |
25,038 |
|
|
|
$ |
28,697 |
|
|
|
$ |
191,489 |
|
|
|
$ |
119,317 |
|
| Adjustments to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation |
|
|
8,642 |
|
|
|
14,224 |
|
|
|
41,121 |
|
|
|
51,108 |
|
| Amortization of intangible assets |
|
|
2,749 |
|
|
|
349 |
|
|
|
9,367 |
|
|
|
1,885 |
|
| Share-based compensation expense |
|
|
9,536 |
|
|
|
7,476 |
|
|
|
35,890 |
|
|
|
27,351 |
|
| Gain on equity method investment |
|
|
(22 |
) |
|
|
(645 |
) |
|
|
(569 |
) |
|
|
(469 |
) |
| Loss on disposal of property, plant and equipment |
|
|
107 |
|
|
|
— |
|
|
|
107 |
|
|
|
— |
|
| Net gain on divestiture of discontinued operations |
|
|
— |
|
|
|
(13,684 |
) |
|
|
— |
|
|
|
(13,684 |
) |
| Excess tax benefits from share-based compensation |
|
|
(3,304 |
) |
|
|
— |
|
|
|
(9,661 |
) |
|
|
(2,084 |
) |
| Deferred income taxes |
|
|
(1,924 |
) |
|
|
3,690 |
|
|
|
(2,397 |
) |
|
|
6,604 |
|
| Change in fair value of contingent consideration for business acquisition |
|
|
1,833 |
|
|
|
— |
|
|
|
(8,092 |
) |
|
|
— |
|
| Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts receivable, net |
|
|
103,116 |
|
|
|
141,327 |
|
|
|
(36,298 |
) |
|
|
25,513 |
|
| Inventories |
|
|
(234 |
) |
|
|
13,900 |
|
|
|
(15,428 |
) |
|
|
31,966 |
|
| Other assets |
|
|
1,037 |
|
|
|
7,354 |
|
|
|
(5,309 |
) |
|
|
(1,975 |
) |
| Accounts payable |
|
|
(84,636 |
) |
|
|
(126,867 |
) |
|
|
24,459 |
|
|
|
(58,104 |
) |
| Accrued and other liabilities |
|
|
(17,500 |
) |
|
|
(43,561 |
) |
|
|
54,049 |
|
|
|
(4,317 |
) |
| Net cash provided by operating activities |
|
|
44,438 |
|
|
|
32,260 |
|
|
|
278,728 |
|
|
|
183,111 |
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Purchases of property, plant and equipment |
|
|
(8,432 |
) |
|
|
(6,172 |
) |
|
|
(31,804 |
) |
|
|
(56,615 |
) |
| Investment in privately held companies |
|
|
(320 |
) |
|
|
(320 |
) |
|
|
(960 |
) |
|
|
(2,419 |
) |
| Payments for divestiture of discontinued operations, net of cash sold |
|
|
— |
|
|
|
(1,395 |
) |
|
|
— |
|
|
|
(1,395 |
) |
| Changes in restricted cash |
|
|
— |
|
|
|
(715 |
) |
|
|
715 |
|
|
|
(715 |
) |
| Acquisitions, net of cash acquired |
|
|
— |
|
|
|
— |
|
|
|
(66,987 |
) |
|
|
— |
|
| Purchases of trading investments |
|
|
(1,184 |
) |
|
|
(5,224 |
) |
|
|
(7,052 |
) |
|
|
(9,619 |
) |
| Proceeds from sales of trading investments |
|
|
1,212 |
|
|
|
5,405 |
|
|
|
7,124 |
|
|
|
10,073 |
|
| Net cash used in investing activities |
|
|
(8,724 |
) |
|
|
(8,421 |
) |
|
|
(98,964 |
) |
|
|
(60,690 |
) |
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Payment of cash dividends |
|
|
— |
|
|
|
— |
|
|
|
(93,093 |
) |
|
|
(85,915 |
) |
| Purchases of treasury shares |
|
|
(20,022 |
) |
|
|
(21,556 |
) |
|
|
(83,786 |
) |
|
|
(70,358 |
) |
| Proceeds from sales of shares upon exercise of options and purchase rights |
|
|
19,219 |
|
|
|
7,205 |
|
|
|
39,574 |
|
|
|
19,767 |
|
| Tax withholdings related to net share settlements of restricted stock units |
|
|
(5,358 |
) |
|
|
(1,890 |
) |
|
|
(18,412 |
) |
|
|
(7,247 |
) |
| Excess tax benefits from share-based compensation |
|
|
3,304 |
|
|
|
— |
|
|
|
9,661 |
|
|
|
2,084 |
|
| Net cash used in financing activities |
|
|
(2,857 |
) |
|
|
(16,241 |
) |
|
|
(146,056 |
) |
|
|
(141,669 |
) |
| Effect of exchange rate changes on cash and cash equivalents |
|
|
1,098 |
|
|
|
2,610 |
|
|
|
(5,370 |
) |
|
|
1,405 |
|
| Net increase (decrease) in cash and cash equivalents |
|
|
33,955 |
|
|
|
10,208 |
|
|
|
28,338 |
|
|
|
(17,843 |
) |
| Cash and cash equivalents at beginning of period |
|
|
513,578 |
|
|
|
508,987 |
|
|
|
519,195 |
|
|
|
537,038 |
|
| Cash and cash equivalents at end of period |
|
|
$ |
547,533 |
|
|
|
$ |
519,195 |
|
|
|
$ |
547,533 |
|
|
|
$ |
519,195 |
|
| |
| *Statements of consolidated cash flows include discontinued operations
for the three months and the year ended March 31, 2016. |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LOGITECH INTERNATIONAL S.A. |
| PRELIMINARY RESULTS |
| (In thousands) – unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES
|
|
|
Three Months Ended |
|
|
Fiscal Years Ended |
|
|
|
March 31, |
|
|
March 31, |
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
|
2017 |
|
|
2016 |
|
|
Change |
|
|
2017 |
|
|
2016 |
|
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net sales by channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Retail |
|
|
$ |
496,165 |
|
|
|
$ |
430,841 |
|
|
|
15 |
% |
|
|
$ |
2,207,040 |
|
|
|
$ |
1,947,059 |
|
|
|
13 |
% |
| OEM |
|
|
— |
|
|
|
— |
|
|
|
NM
|
|
|
— |
|
|
|
71,041 |
|
|
|
(100 |
) |
| Total net sales |
|
|
$ |
496,165 |
|
|
|
$ |
430,841 |
|
|
|
15 |
|
|
|
$ |
2,207,040 |
|
|
|
$ |
2,018,100 |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net retail sales by product category: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Mobile Speakers |
|
|
$ |
37,983 |
|
|
|
$ |
23,543 |
|
|
|
61 |
% |
|
|
$ |
299,029 |
|
|
|
$ |
229,718 |
|
|
|
30 |
% |
| Audio-PC & Wearables |
|
|
59,191 |
|
|
|
46,672 |
|
|
|
27 |
|
|
|
245,249 |
|
|
|
196,013 |
|
|
|
25 |
|
| Gaming |
|
|
69,006 |
|
|
|
56,102 |
|
|
|
23 |
|
|
|
311,880 |
|
|
|
245,101 |
|
|
|
27 |
|
| Video Collaboration |
|
|
37,091 |
|
|
|
21,862 |
|
|
|
70 |
|
|
|
125,389 |
|
|
|
89,322 |
|
|
|
40 |
|
| Home Control |
|
|
15,216 |
|
|
|
10,527 |
|
|
|
45 |
|
|
|
65,132 |
|
|
|
59,075 |
|
|
|
10 |
|
| Pointing Devices |
|
|
115,912 |
|
|
|
111,179 |
|
|
|
4 |
|
|
|
498,161 |
|
|
|
492,543 |
|
|
|
1 |
|
| Keyboards & Combos |
|
|
118,225 |
|
|
|
105,732 |
|
|
|
12 |
|
|
|
478,049 |
|
|
|
430,190 |
|
|
|
11 |
|
| Tablet & Other Accessories |
|
|
16,963 |
|
|
|
30,664 |
|
|
|
(45 |
) |
|
|
76,314 |
|
|
|
103,886 |
|
|
|
(27 |
) |
| PC Webcams |
|
|
26,470 |
|
|
|
23,952 |
|
|
|
11 |
|
|
|
106,542 |
|
|
|
98,641 |
|
|
|
8 |
|
| Other (1) |
|
|
108 |
|
|
|
608 |
|
|
|
(82 |
) |
|
|
1,295 |
|
|
|
2,570 |
|
|
|
(50 |
) |
| Total net retail sales |
|
|
$ |
496,165 |
|
|
|
$ |
430,841 |
|
|
|
15 |
|
|
|
$ |
2,207,040 |
|
|
|
$ |
1,947,059 |
|
|
|
13 |
|
| __________________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) Other category includes products that we currently intend to transition out of,
or have already transitioned out of, because they are no longer strategic to our business. |
| |
| NM=Not Meaningful. |
| |
| |
| LOGITECH INTERNATIONAL S.A. |
| PRELIMINARY RESULTS |
| (In thousands, except per share amounts) -
Unaudited |
|
|
|
|
|
|
|
|
|
| GAAP TO NON GAAP RECONCILIATION (A) |
|
Three Months Ended |
|
Fiscal Years Ended |
|
|
March 31, |
|
March 31, |
| SUPPLEMENTAL FINANCIAL INFORMATION |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
| Gross profit – GAAP |
|
$ |
183,392 |
|
|
$ |
142,100 |
|
|
$ |
805,654 |
|
|
$ |
681,047 |
|
| Share-based compensation expense |
|
733 |
|
|
692 |
|
|
2,663 |
|
|
2,340 |
|
| Amortization of intangible assets and purchase accounting effect on
inventory |
|
1,470 |
|
|
— |
|
|
6,175 |
|
|
— |
|
| Gross profit - Non-GAAP |
|
$ |
185,595 |
|
|
$ |
142,792 |
|
|
$ |
814,492 |
|
|
$ |
683,387 |
|
|
|
|
|
|
|
|
|
|
| Gross margin – GAAP |
|
37.0 |
% |
|
33.0 |
% |
|
36.5 |
% |
|
33.7 |
% |
| Gross margin - Non-GAAP |
|
37.4 |
% |
|
33.1 |
% |
|
36.9 |
% |
|
33.9 |
% |
|
|
|
|
|
|
|
|
|
| Operating expenses - GAAP |
|
$ |
161,461 |
|
|
$ |
131,745 |
|
|
$ |
608,181 |
|
|
$ |
551,989 |
|
| Less: Share-based compensation expense |
|
8,803 |
|
|
7,036 |
|
|
33,227 |
|
|
24,672 |
|
| Less: Amortization of intangible assets and acquisition-related costs |
|
1,279 |
|
|
537 |
|
|
5,814 |
|
|
984 |
|
| Less: Change in fair value of contingent consideration for business acquisition |
|
1,833 |
|
|
— |
|
|
(8,092 |
) |
|
— |
|
| Less: Restructuring charges, net |
|
67 |
|
|
3,784 |
|
|
23 |
|
|
17,802 |
|
| Less: Investigation and related expenses |
|
— |
|
|
19 |
|
|
612 |
|
|
4,140 |
|
| Operating expenses - Non-GAAP |
|
$ |
149,479 |
|
|
$ |
120,369 |
|
|
$ |
576,597 |
|
|
$ |
504,391 |
|
|
|
|
|
|
|
|
|
|
| % of net sales – GAAP |
|
32.5 |
% |
|
30.6 |
% |
|
27.6 |
% |
|
27.4 |
% |
| % of net sales - Non - GAAP |
|
30.1 |
% |
|
27.9 |
% |
|
26.1 |
% |
|
25.0 |
% |
|
|
|
|
|
|
|
|
|
| Operating income – GAAP |
|
$ |
21,931 |
|
|
$ |
10,355 |
|
|
$ |
197,473 |
|
|
$ |
129,058 |
|
| Share-based compensation expense |
|
9,536 |
|
|
7,728 |
|
|
35,890 |
|
|
27,012 |
|
| Amortization of intangible assets |
|
2,749 |
|
|
1 |
|
|
9,367 |
|
|
448 |
|
| Purchase accounting effect on inventory |
|
— |
|
|
— |
|
|
1,160 |
|
|
— |
|
| Acquisition-related costs |
|
— |
|
|
536 |
|
|
1,462 |
|
|
536 |
|
| Change in fair value of contingent consideration for business acquisition |
|
1,833 |
|
|
— |
|
|
(8,092 |
) |
|
— |
|
| Restructuring charges, net |
|
67 |
|
|
3,784 |
|
|
23 |
|
|
17,802 |
|
| Investigation and related expenses |
|
— |
|
|
19 |
|
|
612 |
|
|
4,140 |
|
| Operating income - Non - GAAP |
|
$ |
36,116 |
|
|
$ |
22,423 |
|
|
$ |
237,895 |
|
|
$ |
178,996 |
|
|
|
|
|
|
|
|
|
|
| % of net sales – GAAP |
|
4.4 |
% |
|
2.4 |
% |
|
8.9 |
% |
|
6.4 |
% |
| % of net sales - Non - GAAP |
|
7.3 |
% |
|
5.2 |
% |
|
10.8 |
% |
|
8.9 |
% |
|
|
|
|
|
|
|
|
|
| Net income from continuing operations - GAAP |
|
$ |
25,038 |
|
|
$ |
17,010 |
|
|
$ |
191,489 |
|
|
$ |
128,362 |
|
| Share-based compensation expense |
|
9,536 |
|
|
7,728 |
|
|
35,890 |
|
|
27,012 |
|
| Amortization of intangible assets |
|
2,749 |
|
|
1 |
|
|
9,367 |
|
|
448 |
|
| Purchase accounting effect on inventory |
|
— |
|
|
— |
|
|
1,160 |
|
|
— |
|
| Acquisition-related costs |
|
— |
|
|
536 |
|
|
1,462 |
|
|
536 |
|
| Change in fair value of contingent consideration for business acquisition |
|
1,833 |
|
|
— |
|
|
(8,092 |
) |
|
— |
|
| Restructuring charges, net |
|
67 |
|
|
3,784 |
|
|
23 |
|
|
17,802 |
|
| Investigation and related expenses |
|
— |
|
|
19 |
|
|
612 |
|
|
4,140 |
|
| Loss (gain) on equity-method investment |
|
(22 |
) |
|
(645 |
) |
|
(569 |
) |
|
(469 |
) |
| Non-GAAP income tax adjustment |
|
(4,226 |
) |
|
(5,452 |
) |
|
(12,875 |
) |
|
(15,413 |
) |
| Net income from continuing operations - Non - GAAP |
|
$ |
34,975 |
|
|
$ |
22,981 |
|
|
$ |
218,467 |
|
|
$ |
162,418 |
|
|
|
|
|
|
|
|
|
|
| Net income from continuing operations per share: |
|
|
|
|
|
|
|
|
| Diluted – GAAP |
|
$ |
0.15 |
|
|
$ |
0.10 |
|
|
$ |
1.16 |
|
|
$ |
0.77 |
|
| Diluted - Non – GAAP |
|
$ |
0.21 |
|
|
$ |
0.14 |
|
|
$ |
1.32 |
|
|
$ |
0.98 |
|
|
|
|
|
|
|
|
|
|
| Shares used to compute net income per share: |
|
|
|
|
|
|
|
|
| Diluted - GAAP and Non - GAAP |
|
166,526 |
|
|
165,365 |
|
|
165,540 |
|
|
165,792 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LOGITECH INTERNATIONAL S.A. |
| PRELIMINARY RESULTS |
| (In thousands) – unaudited |
|
|
|
|
|
|
|
|
|
| SHARE-BASED COMPENSATION EXPENSE |
|
Three Months Ended |
|
Fiscal Years Ended |
|
|
March 31, |
|
March 31, |
| SUPPLEMENTAL FINANCIAL INFORMATION |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
| Share-based Compensation Expense |
|
|
|
|
|
|
|
|
| Cost of goods sold |
|
$ |
733 |
|
|
$ |
692 |
|
|
$ |
2,663 |
|
|
$ |
2,340 |
|
| Marketing and selling |
|
4,036 |
|
|
2,728 |
|
|
14,723 |
|
|
9,273 |
|
| Research and development |
|
1,193 |
|
|
872 |
|
|
4,200 |
|
|
3,046 |
|
| General and administrative |
|
3,574 |
|
|
3,436 |
|
|
14,304 |
|
|
12,353 |
|
| Restructuring |
|
— |
|
|
— |
|
|
— |
|
|
7 |
|
| Total share-based compensation expense |
|
9,536 |
|
|
7,728 |
|
|
35,890 |
|
|
27,019 |
|
| Income tax benefit |
|
(2,444 |
) |
|
(2,354 |
) |
|
(8,536 |
) |
|
(6,297 |
) |
| Total share-based compensation expense, net of income tax |
|
$ |
7,092 |
|
|
$ |
5,374 |
|
|
$ |
27,354 |
|
|
$ |
20,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: These preliminary results for the three months and fiscal year ended March 31, 2017 are subject to adjustments, including
subsequent events that may occur through the date of filing our Annual Report on Form 10-K.
(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 and year ended March 31, 2017, 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 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.
Purchase accounting effect on inventory. Business combination accounting principles require us to
measure acquired inventory at fair value. The fair value of inventory reflects the acquired company’s cost of manufacturing plus a
portion of the expected profit margin. The non-GAAP adjustment excludes the expected profit margin component that is recorded under
business combination accounting principles associated with our business acquisitions. We believe the adjustment is useful to
investors because such charges are not reflective of our ongoing operations.
Acquisition-related costs and change in fair value of contingent consideration for business
acquisition. We incurred expenses and credits in connection with our acquisitions which we generally would not have otherwise
incurred in the periods presented as a part of our continuing operations. Acquisition related costs include all incremental
expenses incurred to effect a business combination. Fair value of contingent consideration is associated with our estimates of the
value of earn-outs in connection with certain acquisitions. We believe that providing the non-GAAP measures excluding these costs
and credits, as well as the GAAP measures, assists our investors because such costs are not reflective of our ongoing operating
results.
Restructuring charges (credits). These expenses are associated with re-aligning our business
strategies based on current economic conditions. We have undertaken several restructuring plans 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 (credits) are not reflective of our ongoing operating results in the current
period.
Gain (loss) on equity-method investment. We recognized gain (loss) related our investments in various
privately-held companies, which varies depending on the operational and financial performance of the privately-held companies in
which we invested. 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.
Investigation and related expenses. These expenses are forensic accounting, audit, consulting and
legal fees related to the Audit Committee’s investigation and the formal investigation by and settlement with the Securities and
Exchange Commission (SEC), together with accruals based on settlement 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 not reflective of our ongoing
operations.
Non-GAAP income tax adjustment. Non-GAAP income tax adjustment primarily measures the income tax
effect of non-GAAP adjustments excluded above and other events; the determination of which is based upon the nature of the
underlying items, the mix of income and losses in jurisdictions and the relevant tax rates in which we operate.
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.
Additional Supplemental Financial Information - Constant Currency
In addition, Logitech presents percentage sales growth in constant currency 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.
(LOGIIR)
Logitech International
Ben Lu
Vice President, Investor Relations - USA
510-713-5568
or
Krista Todd
Vice President, External Communications - USA
510-713-5834
or
Ben Starkie
Corporate Communications - Europe
+41 (0) 79-292-3499
View source version on businesswire.com: http://www.businesswire.com/news/home/20170425006970/en/