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Logitech Announces Tenth Consecutive Record Quarter, Closes Another Record Year

Apr 24, 2001

Annual Sales Up 24%, Net Income Up 61%, Operating Income Up 41%

Romanel-sur-Morges, Switzerland; Fremont, CA - April 24, 2001 - Logitech International (NASDAQ:LOGIY) (Switzerland:LOGN, LOGZ) has delivered another record quarter, posting revenue of $197.4 million, a 12 percent growth over last year's Q4 sales of $175.9 million. Net income was $14.2 million ($3.01 per share; $0.30 per ADS), an increase of 51 percent over net income of $9.4 million posted for the same quarter last year. Fourth quarter operating income reached $16.4 million, a year-over-year increase of 20 percent. These figures exclude a $3.3 million one-time non-cash cost for the purchase of in-process R&D associated with the acquisition of Labtec.

For the fiscal year, which ended on March 31, 2001, the Company's revenue reached $761.4 million, an increase of 24 percent over the previous fiscal year. Net income of $48.4 million, excluding the $3.3 million one-time non-cash cost for the purchase of in-process R&D associated with the acquisition of Labtec, was 61 percent greater than fiscal 2000, while operating income of $57.9 million represented an increase of 41 percent over the previous year. Gross margin for the year was a strong 34.0 percent, an improvement over the prior year.

In contrast to the overall slowdown in the PC industry, the ongoing success of Logitech's retail business fueled a 30 percent increase in annual retail sales, which accounted for 83 percent of the Company's Q4 revenue. This success in the retail sector, evidenced by the sale of more than 30 million units carrying the Logitech logo during fiscal 2001, is driven by Logitech's ability to offer compelling, innovative products to the huge installed base of PC users.

Logitech continues to be the market leader in PC video products and cordless solutions for the desktop. During the past year, the Company sold 6.9 million cordless products, a growth of more than 80 percent in units over the previous year. Performance in video set records as well: Logitech sold more than one million cameras each quarter, and for the first time during Q4, more than one million cameras in the retail sector.

"Our excellent performance underscores the strength of Logitech's position in the marketplace, the attractiveness of the products we offer to the hundreds of millions of existing PC users and our leadership position in fast-growing markets such as PC video and cordless solutions," said Guerrino De Luca, Logitech's president and chief executive officer.

"I am optimistic about our future," Mr. De Luca continued. "Our product pipeline is as healthy as ever, while the Labtec brand and audio product line add a highly complementary growth engine to our product portfolio and create significant commercial and operational synergies. At the same time that we continue to develop several promising opportunities around the PC, we are also entering the booming console market. In essence, we see significant potential for continuing growth as we enter the new fiscal year."

The Company said that it expects sales for fiscal 2002 to grow approximately 25 percent, with operating income increasing by 40 to 45 percent.

There will be an investor and analyst meeting in Zurich, Switzerland, at 4:00 A.M. Eastern Daylight Time/10:00 Central European Time on April 24 to discuss financial results for the fourth quarter and year-end. A live webcast of the meeting will be available at http://www.logitech.com. A replay of this webcast will be made available for five days following the meeting on the Logitech corporate web site.

There will also be an earnings teleconference at 10:00 A.M. Eastern Daylight Time and 16:00 Central European Time on April 24 to discuss these results. A live webcast of the teleconference can be accessed at http://www.logitech.com. A replay of this teleconference will be made available for 14 days following the call on the Logitech corporate web site.

Those interested in participating in either of these online opportunities are encouraged to visit the web site at least 15 minutes early to register for either event, and to download and install any necessary software.

About Logitech

Founded in 1981, Logitech designs, manufactures and markets human interface devices and software that link people to digital information and the Internet and enable them to work, play, learn and communicate more effectively in the digital world. The Company's product family includes Internet video cameras; mice, trackballs and keyboards; PC audio and telephony products; and interactive gaming controllers.

With operational headquarters through its U.S. subsidiary in Fremont, California, and regional headquarters through local subsidiaries in Romanel, Switzerland, and Hsinchu, Taiwan, R.O.C., Logitech International is a Swiss public company traded in Switzerland under the symbols LOGN and LOGZ, and in the U.S. on the Nasdaq National Market System (LOGIY). The company has manufacturing facilities in Asia and offices in major cities in North America, Europe and Asia Pacific.

This press release contains forward-looking statements, including statements regarding our expected sales and operating income for fiscal 2002 and the potential for continuing growth of the Company. These forward-looking statements involve risks and uncertainties. The Company's actual performance could differ materially from that anticipated in these forward-looking statements as a result of certain factors, including the timing of new product introductions by the Company and its competitors and their acceptance by the market, timely availability and pricing of products and components, price protection charges and product returns from customers, the impact of competition on the Company's average selling prices and operating expenses, inventory management and exposures, the outcome of ongoing intellectual property disputes, technological changes and their acceptance by the market, fluctuations in exchange rates, general economic conditions, the rate and success of the integration of Labtec as well as generally those additional factors set forth in the Company's Annual Report on Form 20-F dated July 17, 2000, and Form 6-K dated February 23, 2001, and Registration Statement on Form F-4 dated February 23, 2001, available from the SEC's Edgar database at http://www.sec.gov and upon request from Logitech by calling (510) 713-4220.

The revenue and operating income targets discussed in the press release constitute Logitech's goals as of the date of the release and are based on current conditions. Logitech undertakes no obligation to update these targets in any way or for any reason.

For more information about Logitech and its products, visit the Company's web site at http://www.logitech.com.

LOGITECH INTERNATIONAL S.A.

   
     

(In thousands of U.S. dollars, except share, per share and ADS amounts) - Unaudited

   
     
PRO FORMA Q4 INCOME STATEMENT

The following pro forma income statement at March 31, 2001 excludes the purchased in-process R&D expense related to the acquisition of Labtec as well as incremental number of shares issued to complete this acquisition.

     

Quarter Ending
March 31

2001

2000

     

Net sales

$ 197,393

$ 175,924

Cost of goods sold

130,107

115,719

Gross profit

67,286

60,205

     % of net sales

34.1%

34.2%

     

Operating expenses:

     Marketing and selling

32,775

28,565

     Research and development

9,926

8,814

     General and administration

8,210

9,173

Total operating expenses

50,911

46,552

     

Operating income

16,375

13,653

     

Interest income (expense), net

321

240

Other income (expense), net

1,026

(2,160)

     

Income before income taxes

17,722

11,733

Provision for income taxes

3,544

2,346

     

Net income

$ 14,178

$ 9,387

     

Shares used to compute net income per share:

     Basic

4,279,794

4,096,878

     Diluted

4,704,532

4,641,740

Net income per share:

     Basic

$3.31

$2.29

     Diluted

$3.01

$2.02

Net income per ADS (10 ADS : 1 Share):

     Basic

$0.33

$0.23

     Diluted

$0.30

$0.20





LOGITECH INTERNATIONAL S.A.

   
     

(In thousands of U.S. dollars, except share, per share and ADS amounts) - Unaudited

   
     
PRO FORMA FY01 INCOME STATEMENT

The following pro forma income statement at March 31, 2001 excludes the purchased in-process R&D expense incurred in Q4 related to the acquisition of Labtec. It also excludes incremental number of shares issued to complete this acquisition.

     

Year Ending
March 31

2001

2000

     

Net sales

$761,356

$615,664

Cost of goods sold

502,291

408,969

Gross profit

259,065

206,695

     % of net sales

34.0%

33.6%

     

Operating expenses:

     Marketing and selling

130,947

102,957

     Research and development

36,686

31,666

     General and administration

33,483

31,102

Total operating expenses

201,116

165,725

     

Operating income

57,949

40,970

     

Interest income (expense), net

(38)

(163)

Other income (expense), net

2,628

(3,252)

     

Income before income taxes

60,539

37,555

Provision for income taxes

12,108

7,511

     

Net income

$48,431

$30,044

     

Shares used to compute net income per share:

     Basic

4,221,368

3,976,990

     Diluted

4,692,761

4,375,994

Net income per share:

     Basic

$11.47

$7.55

     Diluted

$10.32

$6.87

Net income per ADS (10 ADS : 1 Share)

     Basic

$1.15

$0.76

     Diluted

$1.03

$0.69





LOGITECH INTERNATIONAL S.A.

     
       

(In thousands of U.S. dollars) - Unaudited

     
       
PRO FORMA BALANCE SHEET

The following pro forma balance sheet at March 31, 2001 excludes the effect of acquiring the net assets of Labtec, goodwill and other acquisition-related intangibles arising from the acquisition, the impact of acquisition financing, and the related impact on shareholders' equity.

 

 

 

       

 

March 31,
2001

December 31,
2000

March 31,
2000

       

Current assets

 

 

 

     Cash and cash equivalents

$ 51,676

$ 15,266

$ 49,426

     Accounts receivable

126,559

179,129

123,172

     Inventories

93,931

121,256

68,255

     Other current assets

29,360

28,707

25,354

     Total current assets

301,526

344,358

266,207

Investments

16,695

19,661

10,807

Property, plant and equipment

37,229

39,453

42,117

Intangible assets

 

 

 

     Goodwill

3,060

3,311

3,907

     Other intangible assets

7,919

8,282

10,100

Other assets

1,136

990

939

Total assets

$367,565

$416,055

$334,077

       

Current liabilities

 

 

 

     Short-term debt

$  6,256

$  6,707

$  6,990

     Accounts payable

72,836

117,944

92,430

     Accrued liabilites

50,553

67,224

51,049

     Total current liabilities

129,645

191,875

150,469

Long term debt

2,821

3,068

2,934

Other liabilities

1,058

524

705

Total liabilities

133,524

195,467

154,108

Shareholders' equity

234,041

220,588

179,969

Total liabilities and shareholders' equity

$367,565

$416,055

$334,077





LOGITECH INTERNATIONAL S.A.

   
     

SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
(In thousands of U.S. dollars) - Unaudited

Year Ending
March 31

 

2001

2000

     

Depreciation

$ 19,124

$ 15,775

Amortization of goodwill

694

694

Amortization of other acquisition-related intangibles

3,087

3,547

Purchased in-process research and development

3,275

-

Operating income excluding purchased IPR&D

57,949

40,970

Operating income before depreciation and amortization

80,854

60,986





LOGITECH INTERNATIONAL S.A.

   
     

CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except share, per share and ADS amounts) - Unaudited

Quarter Ending
March 31

 

2001

2000

     

Net sales

$ 197,393

$ 175,924

Cost of goods sold

130,107

115,719

Gross profit

67,286

60,205

     % of net sales

34.1%

34.2%

     

Operating expenses:

 

 

     Marketing and selling

32,775

28,565

     Research and development

9,926

8,814

     General and administration

8,210

9,173

     Purchased in-process research and development

3,275

-

Total operating expenses

54,186

46,552

     

Operating income

13,100

13,653

     

Interest income (expense), net

211

240

Other income (expense), net

1,026

(2,160)

     

Income before income taxes

14,337

11,733

Provision for income taxes

3,522

2,346

     

Net income

$ 10,815

$ 9,387

 

 

 

Shares used to compute net income per share:

 

 

     Basic

4,284,781

4,096,878

     Diluted

4,709,519

4,641,740

Net income per share:

 

 

     Basic

$2.52

$2.29

     Diluted

$2.30

$2.02

Net income per ADS (10 ADS : 1 Share):

 

 

     Basic

$0.25

$0.23

     Diluted

$0.23

$0.20





LOGITECH INTERNATIONAL S.A.

   
     

CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except share, per share and ADS amounts) - Unaudited

Year Ending
March 31

2001

2000

     

Net sales

$761,356

$615,664

Cost of goods sold

502,290

408,969

Gross profit

259,066

206,695

     % of net sales

34.0%

33.6%

     

Operating expenses:

     Marketing and selling

130,947

102,957

     Research and development

36,686

31,666

     General and administration

33,484

31,102

     Purchased in-process research and development

3,275

-

Total operating expenses

204,392

165,725

     

Operating income

54,674

40,970

     

Interest income (expense), net

(148)

(163)

Other income (expense), net

2,628

(3,252)

     

Income before income taxes

57,154

37,555

Provision for income taxes

12,086

7,511

     

Net income

$45,068

$30,044

     

Shares used to compute net income per share:

     Basic

4,222,626

3,976,990

     Diluted

4,694,019

4,375,994

Net income per share:

     Basic

$10.67

$7.55

     Diluted

$9.60

$6.87

Net income per ADS (10 ADS : 1 Share)

     Basic

$1.07

$0.76

     Diluted

$0.96

$0.69





LOGITECH INTERNATIONAL S.A.

     
       

CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars) - Unaudited

March 31,
2001

December 31,
2000

March 31,
2000

       

Current assets

 

 

 

     Cash and cash equivalents

$ 44,142

$ 15,266

$ 49,426

     Accounts receivable

144,781

179,129

123,172

     Inventories

111,612

121,256

68,255

     Other current assets

29,617

28,707

25,354

     Total current assets

330,152

344,358

266,207

Investments

16,649

19,661

10,807

Property, plant and equipment

38,160

39,453

42,117

Intangible assets

 

 

 

     Goodwill

92,053

3,311

3,907

     Other intangible assets

21,870

8,282

10,100

Other assets

6,291

990

939

Total assets

$505,175

$416,055

$334,077

       

Current liabilities

 

 

 

     Short-term debt

$  62,986

$  6,707

$  6,990

     Accounts payable

91,267

117,944

92,430

     Accrued liabilites

59,054

67,224

51,049

     Total current liabilities

213,307

191,875

150,469

Long term debt

26,908

3,068

2,934

Other liabilities

8,847

524

705

Total liabilities

249,062

195,467

154,108

Shareholders' equity

256,113

220,588

179,969

Total liabilities and shareholders' equity

$505,175

$416,055

$334,077

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