Retail Sales Momentum Continues with 5 Percent Growth in Constant
Currency
NEWARK, Calif. & LAUSANNE, Switzerland--(BUSINESS WIRE)--
Logitech International (SIX:LOGN) (Nasdaq:LOGI) today announced
financial results for the third quarter of Fiscal Year 2015.
-
Q3 sales were $634 million, up 1 percent compared to Q3 of the prior
year, with retail sales up 2 percent. Excluding the unfavorable impact
of currency exchange rates, Q3 retail sales grew 5 percent.
-
Q3 GAAP operating income was $65 million, with GAAP earnings per share
(EPS) of $0.38, compared to $0.29 in the same quarter a year ago.
-
Q3 non-GAAP operating income was $76 million, with non-GAAP EPS of
$0.41, compared to $0.35 a year ago.
-
Cash flow from operations in the quarter was $76 million. Cash flow
from operations for the last twelve months was approximately $232
million, up 86 percent compared to the same period a year ago.
"I'm excited about our strong performance in Q3," said Bracken P.
Darrell, Logitech president and chief executive officer. "We almost
doubled sales in Mobile Speakers and also posted healthy growth in PC
Gaming and Video Collaboration. Overall, despite the U.S. dollar's
strengthening, our retail sales and profitability continued to grow and
we generated robust cash flow. Based on these better-than-expected
results and the strength of our product offerings, we have increased our
full-year outlook for operating income for the second time this fiscal
year."
Outlook
Despite the unfavorable impact of exchange rates, Logitech increased its
profitability outlook for Fiscal Year 2015 from approximately $170
million to approximately $185 million in non-GAAP operating income. The
Company adjusted its sales outlook for Fiscal Year 2015 from
approximately $2.16 billion to approximately $2.11 billion to reflect
the U.S. dollar's appreciation compared to various other currencies.
Prepared Remarks Available Online
Logitech has made its prepared written remarks for the financial results
teleconference available online on the Logitech corporate Web site at http://ir.logitech.com.
Financial Results Teleconference and Webcast
Logitech will hold a financial results teleconference to discuss the
results for Q3 FY 2015 on Jan. 22, 2015 at 8:30 a.m. Eastern Standard
Time and 14:30 Central European Time. A live webcast of the call will be
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), other restructuring-related charges,
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 foreign
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 Fiscal Year 2015 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 amount has been provided.
About Logitech
Logitech is a world leader in products that connect people to the
digital experiences they care about. Spanning multiple computing,
communication and entertainment platforms, Logitech's combined hardware
and software enable or enhance digital navigation, music and video
entertainment, gaming, social networking, audio and video communication
over the Internet, video security and home-entertainment control.
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).
This press release contains forward-looking statements within the
meaning of the federal securities laws, including, without limitation
statements regarding: the Company's product offerings, Fiscal Year 2015
revenue and operating income, and currency exchange rates. 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 operating
segments, or significant fluctuations in exchange rates; the effect of
changes to our effective income tax 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, 2014, 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.
Logitech, the Logitech logo, and other Logitech marks are registered in
Switzerland and other countries. All other trademarks are the property
of their respective owners. For more information about Logitech and its
products, visit the company's Web site at www.logitech.com.
|
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|
|
|
|
|
|
(In thousands, except per share amounts) - Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
2014
|
|
2013 (1)
|
|
2014
|
|
2013 (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
634,204
|
|
|
$
|
628,719
|
|
|
$
|
1,646,718
|
|
|
$
|
1,638,392
|
|
|
Cost of goods sold
|
|
|
402,921
|
|
|
|
414,418
|
|
|
|
1,028,905
|
|
|
|
1,071,867
|
|
|
Gross profit
|
|
|
231,283
|
|
|
|
214,301
|
|
|
|
617,813
|
|
|
|
566,525
|
|
|
% of net sales
|
|
|
36.5
|
%
|
|
|
34.1
|
%
|
|
|
37.5
|
%
|
|
|
34.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Marketing and selling
|
|
|
103,307
|
|
|
|
94,273
|
|
|
|
290,215
|
|
|
|
288,817
|
|
|
Research and development
|
|
|
33,616
|
|
|
|
34,577
|
|
|
|
97,257
|
|
|
|
108,589
|
|
|
General and administrative
|
|
|
29,808
|
|
|
|
31,998
|
|
|
|
100,957
|
|
|
|
90,247
|
|
|
Restructuring charges (credit), net
|
|
|
(146
|
)
|
|
|
822
|
|
|
|
(146
|
)
|
|
|
8,621
|
|
|
Total operating expenses
|
|
|
166,585
|
|
|
|
161,670
|
|
|
|
488,283
|
|
|
|
496,274
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
64,698
|
|
|
|
52,631
|
|
|
|
129,530
|
|
|
|
70,251
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net
|
|
|
224
|
|
|
|
(1,022
|
)
|
|
|
837
|
|
|
|
(862
|
)
|
|
Other income (expense), net
|
|
|
(3,016
|
)
|
|
|
1,082
|
|
|
|
(4,099
|
)
|
|
|
1,361
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
61,906
|
|
|
|
52,691
|
|
|
|
126,268
|
|
|
|
70,750
|
|
|
Provision for (benefit from) income taxes
|
|
|
(878
|
)
|
|
|
4,807
|
|
|
|
7,718
|
|
|
|
7,064
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
62,784
|
|
|
$
|
47,884
|
|
|
$
|
118,550
|
|
|
$
|
63,686
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.38
|
|
|
$
|
0.30
|
|
|
$
|
0.73
|
|
|
$
|
0.40
|
|
|
Diluted
|
|
$
|
0.38
|
|
|
$
|
0.29
|
|
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
Shares used to compute net income per share :
|
|
|
|
|
|
|
|
|
Basic
|
|
|
163,533
|
|
|
|
160,871
|
|
|
|
163,261
|
|
|
|
160,051
|
|
|
Diluted
|
|
|
166,321
|
|
|
|
163,388
|
|
|
|
166,076
|
|
|
|
161,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) - Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
March 31,
|
|
December 31,
|
|
CONSOLIDATED BALANCE SHEETS
|
|
2014
|
|
2014
|
|
2013 (1)
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
516,613
|
|
$
|
469,412
|
|
$
|
379,865
|
|
|
Accounts receivable
|
|
|
306,866
|
|
|
182,029
|
|
|
312,947
|
|
|
Inventories
|
|
|
245,740
|
|
|
222,402
|
|
|
259,154
|
|
|
Other current assets
|
|
|
65,613
|
|
|
59,157
|
|
|
61,518
|
|
|
Total current assets
|
|
$
|
1,134,832
|
|
|
933,000
|
|
|
1,013,484
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
90,777
|
|
|
88,391
|
|
|
92,382
|
|
|
Goodwill
|
|
|
343,437
|
|
|
345,010
|
|
|
345,036
|
|
|
Other intangible assets
|
|
|
2,728
|
|
|
10,529
|
|
|
13,319
|
|
|
Other assets
|
|
|
67,005
|
|
|
74,460
|
|
|
70,459
|
|
|
Total assets
|
|
$
|
1,638,779
|
|
$
|
1,451,390
|
|
$
|
1,534,680
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
350,335
|
|
$
|
242,815
|
|
$
|
325,559
|
|
|
Accrued and other current liabilities
|
|
|
224,650
|
|
|
211,972
|
|
|
236,022
|
|
|
Total current liabilities
|
|
$
|
574,985
|
|
|
454,787
|
|
|
561,581
|
|
|
Non-current liabilities:
|
|
|
172,880
|
|
|
192,475
|
|
|
199,821
|
|
|
Total liabilities
|
|
$
|
747,865
|
|
|
647,262
|
|
|
761,402
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
890,914
|
|
|
804,128
|
|
|
773,278
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
1,638,779
|
|
$
|
1,451,390
|
|
$
|
1,534,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) - Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
2014
|
|
2013 (1)
|
|
2014
|
|
2013 (1)
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
62,784
|
|
|
$
|
47,884
|
|
|
$
|
118,550
|
|
|
$
|
63,686
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
Depreciation
|
|
|
9,867
|
|
|
|
10,913
|
|
|
|
29,559
|
|
|
|
32,755
|
|
|
Amortization of other intangible assets
|
|
|
2,266
|
|
|
|
4,472
|
|
|
|
7,624
|
|
|
|
14,990
|
|
|
Share-based compensation expense
|
|
|
7,047
|
|
|
|
8,913
|
|
|
|
20,046
|
|
|
|
17,412
|
|
|
Impairment of investments
|
|
|
2,154
|
|
|
|
38
|
|
|
|
2,259
|
|
|
|
568
|
|
|
Loss (gain) on disposal of property, plant and equipment
|
|
|
(34
|
)
|
|
|
1,422
|
|
|
|
(44
|
)
|
|
|
3,878
|
|
|
Excess tax benefits from share-based compensation
|
|
|
(1,867
|
)
|
|
|
(572
|
)
|
|
|
(2,533
|
)
|
|
|
(572
|
)
|
|
Deferred income taxes
|
|
|
(793
|
)
|
|
|
340
|
|
|
|
(3,151
|
)
|
|
|
(3,561
|
)
|
|
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(57,465
|
)
|
|
|
(54,566
|
)
|
|
|
(131,026
|
)
|
|
|
(130,871
|
)
|
|
Inventories
|
|
|
(3,187
|
)
|
|
|
35,169
|
|
|
|
(30,171
|
)
|
|
|
13,496
|
|
|
Other assets
|
|
|
(952
|
)
|
|
|
4,173
|
|
|
|
(6,592
|
)
|
|
|
(2,968
|
)
|
|
Accounts payable
|
|
|
51,198
|
|
|
|
22,830
|
|
|
|
111,310
|
|
|
|
61,423
|
|
|
Accrued and other liabilities
|
|
|
5,336
|
|
|
|
13,374
|
|
|
|
21,227
|
|
|
|
40,463
|
|
|
Net cash provided by operating activities
|
|
|
76,354
|
|
|
|
94,390
|
|
|
|
137,058
|
|
|
|
110,699
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(9,813
|
)
|
|
|
(9,724
|
)
|
|
|
(34,777
|
)
|
|
|
(34,910
|
)
|
|
Investments in privately held companies
|
|
|
—
|
|
|
|
261
|
|
|
|
(2,550
|
)
|
|
|
—
|
|
|
Acquisitions, net of cash acquired
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(650
|
)
|
|
Proceeds from return of investment from strategic investments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
261
|
|
|
Purchases of trading investments
|
|
|
(1,233
|
)
|
|
|
(1,685
|
)
|
|
|
(3,463
|
)
|
|
|
(7,831
|
)
|
|
Proceeds from sales of trading investments
|
|
|
1,311
|
|
|
|
1,709
|
|
|
|
3,856
|
|
|
|
8,311
|
|
|
Net cash used in investing activities
|
|
|
(9,735
|
)
|
|
|
(9,439
|
)
|
|
|
(36,934
|
)
|
|
|
(34,819
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
Payment of cash dividends
|
|
|
(43,767
|
)
|
|
|
—
|
|
|
|
(43,767
|
)
|
|
|
(36,123
|
)
|
|
Contingent cash payment of acquisition
|
|
|
—
|
|
|
|
—
|
|
|
|
(100
|
)
|
|
|
—
|
|
|
Repurchase of ESPP awards
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,078
|
)
|
|
|
—
|
|
|
Proceeds from sales of shares upon exercise of options and purchase
rights
|
|
|
933
|
|
|
|
2,330
|
|
|
|
2,466
|
|
|
|
8,465
|
|
|
Tax withholdings related to net share settlements of restricted
stock units
|
|
|
(6,133
|
)
|
|
|
(2,484
|
)
|
|
|
(7,456
|
)
|
|
|
(2,937
|
)
|
|
Excess tax benefits from share-based compensation
|
|
|
1,867
|
|
|
|
572
|
|
|
|
2,533
|
|
|
|
572
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(47,100
|
)
|
|
|
418
|
|
|
|
(47,402
|
)
|
|
|
(30,023
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(3,128
|
)
|
|
|
(300
|
)
|
|
|
(5,521
|
)
|
|
|
184
|
|
|
Net increase in cash and cash equivalents
|
|
|
16,391
|
|
|
|
85,069
|
|
|
|
47,201
|
|
|
|
46,041
|
|
|
Cash and cash equivalents, beginning of the period
|
|
|
500,222
|
|
|
|
294,796
|
|
|
|
469,412
|
|
|
|
333,824
|
|
|
Cash and cash equivalents, end of the period
|
|
$
|
516,613
|
|
|
$
|
379,865
|
|
|
$
|
516,613
|
|
|
$
|
379,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share amounts) - Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
NET RETAIL SALES BY PRODUCT CATEGORY
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
2014
|
|
2013 (1)
|
|
2014
|
|
2013 (1)
|
|
|
|
|
|
|
|
|
|
|
|
Net sales by channel:
|
|
|
|
|
|
|
|
|
|
Retail
|
|
$
|
574,025
|
|
$
|
564,221
|
|
|
$
|
1,471,301
|
|
$
|
1,442,085
|
|
|
OEM
|
|
|
30,297
|
|
|
34,542
|
|
|
|
91,323
|
|
|
106,581
|
|
|
Video conferencing
|
|
|
29,882
|
|
|
29,956
|
|
|
|
84,094
|
|
|
89,726
|
|
|
Total net sales
|
|
$
|
634,204
|
|
$
|
628,719
|
|
|
$
|
1,646,718
|
|
$
|
1,638,392
|
|
|
|
|
|
|
|
|
|
|
|
|
Net retail sales by product family(*):
|
|
|
|
|
|
|
|
|
|
PC Gaming
|
|
$
|
70,188
|
|
$
|
58,173
|
|
|
$
|
164,570
|
|
$
|
141,645
|
|
|
Tablet & Other Accessories
|
|
|
55,100
|
|
|
77,009
|
|
|
|
114,973
|
|
|
150,263
|
|
|
Mobile Speakers
|
|
|
62,264
|
|
|
34,198
|
|
|
|
139,631
|
|
|
68,032
|
|
|
Growth
|
|
|
187,552
|
|
|
169,380
|
|
|
|
419,174
|
|
|
359,940
|
|
|
Pointing Devices
|
|
|
141,789
|
|
|
141,757
|
|
|
|
382,524
|
|
|
387,064
|
|
|
PC Keyboards & Desktops
|
|
|
114,058
|
|
|
108,682
|
|
|
|
325,299
|
|
|
311,955
|
|
|
Audio-PC &Wearables
|
|
|
58,696
|
|
|
69,021
|
|
|
|
166,999
|
|
|
195,082
|
|
|
Video
|
|
|
46,682
|
|
|
38,154
|
|
|
|
118,822
|
|
|
105,740
|
|
|
Remotes
|
|
|
25,116
|
|
|
26,049
|
|
|
|
56,224
|
|
|
53,950
|
|
|
Profit Maximization
|
|
|
386,341
|
|
|
383,663
|
|
|
|
1,049,868
|
|
|
1,053,791
|
|
|
Other
|
|
|
132
|
|
|
11,178
|
|
|
|
2,259
|
|
|
28,354
|
|
|
Non-Strategic
|
|
|
132
|
|
|
11,178
|
|
|
|
2,259
|
|
|
28,354
|
|
|
Total net retail sales
|
|
$
|
574,025
|
|
$
|
564,221
|
|
|
$
|
1,471,301
|
|
$
|
1,442,085
|
|
|
__________________
|
|
|
|
|
|
|
|
|
|
* Certain products within the retail product families as presented
in prior years have been reclassified to conform to the current year
presentation, with no impact on previously reported total net retail
sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
2014
|
|
2013 1
|
|
2014
|
|
2013 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit - GAAP
|
|
$
|
231,283
|
|
|
$
|
214,301
|
|
|
$
|
617,813
|
|
|
$
|
566,525
|
|
|
Share-based compensation expense
|
|
|
560
|
|
|
|
672
|
|
|
|
1,724
|
|
|
|
1,843
|
|
|
Amortization of other intangible assets
|
|
|
532
|
|
|
|
2,190
|
|
|
|
1,626
|
|
|
|
7,361
|
|
|
Restructuring-related charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,194
|
|
|
Gross profit - Non-GAAP
|
|
$
|
232,375
|
|
|
$
|
217,163
|
|
|
$
|
621,163
|
|
|
$
|
580,923
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin - GAAP
|
|
|
36.5
|
%
|
|
|
34.1
|
%
|
|
|
37.5
|
%
|
|
|
34.6
|
%
|
|
Gross margin - Non-GAAP
|
|
|
36.6
|
%
|
|
|
34.5
|
%
|
|
|
37.7
|
%
|
|
|
35.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - GAAP
|
|
$
|
166,585
|
|
|
$
|
161,670
|
|
|
$
|
488,283
|
|
|
$
|
496,274
|
|
|
Less: Share-based compensation expense
|
|
|
6,487
|
|
|
|
8,241
|
|
|
|
18,322
|
|
|
|
15,569
|
|
|
Less: Amortization of other intangible assets
|
|
|
1,734
|
|
|
|
2,282
|
|
|
|
5,998
|
|
|
|
7,629
|
|
|
Less: Restructuring charges (credits), net
|
|
|
(146
|
)
|
|
|
822
|
|
|
|
(146
|
)
|
|
|
8,621
|
|
|
Less: One time special charge
|
|
|
2,520
|
|
|
|
—
|
|
|
|
19,520
|
|
|
|
—
|
|
|
Operating expenses - Non-GAAP
|
|
$
|
155,990
|
|
|
$
|
150,325
|
|
|
$
|
444,589
|
|
|
$
|
464,455
|
|
|
|
|
|
|
|
|
|
|
|
|
% of net sales - GAAP
|
|
|
26.3
|
%
|
|
|
25.7
|
%
|
|
|
29.7
|
%
|
|
|
30.3
|
%
|
|
% of net sales - Non - GAAP
|
|
|
24.6
|
%
|
|
|
23.9
|
%
|
|
|
27.0
|
%
|
|
|
28.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income - GAAP
|
|
$
|
64,698
|
|
|
$
|
52,631
|
|
|
$
|
129,530
|
|
|
$
|
70,251
|
|
|
Share-based compensation expense
|
|
|
7,047
|
|
|
|
8,913
|
|
|
|
20,046
|
|
|
|
17,412
|
|
|
Amortization of other intangible assets
|
|
|
2,266
|
|
|
|
4,472
|
|
|
|
7,624
|
|
|
|
14,990
|
|
|
Restructuring charges (credits), net
|
|
|
(146
|
)
|
|
|
822
|
|
|
|
(146
|
)
|
|
|
8,621
|
|
|
Restructuring related charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,194
|
|
|
One time special charge
|
|
|
2,520
|
|
|
|
—
|
|
|
|
19,520
|
|
|
|
—
|
|
|
Operating income - Non - GAAP
|
|
$
|
76,385
|
|
|
$
|
66,838
|
|
|
$
|
176,574
|
|
|
$
|
116,468
|
|
|
|
|
|
|
|
|
|
|
|
|
% of net sales - GAAP
|
|
|
10.2
|
%
|
|
|
8.4
|
%
|
|
|
7.9
|
%
|
|
|
4.3
|
%
|
|
% of net sales - Non - GAAP
|
|
|
12.0
|
%
|
|
|
10.6
|
%
|
|
|
10.7
|
%
|
|
|
7.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net income - GAAP
|
|
$
|
62,784
|
|
|
$
|
47,884
|
|
|
$
|
118,550
|
|
|
$
|
63,686
|
|
|
Share-based compensation expense
|
|
|
7,047
|
|
|
|
8,913
|
|
|
|
20,046
|
|
|
|
17,412
|
|
|
Amortization of other intangible assets
|
|
|
2,266
|
|
|
|
4,472
|
|
|
|
7,624
|
|
|
|
14,990
|
|
|
Restructuring related charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,194
|
|
|
Restructuring charges (credits), net
|
|
|
(146
|
)
|
|
|
822
|
|
|
|
(146
|
)
|
|
|
8,621
|
|
|
One time special charge
|
|
|
2,520
|
|
|
|
—
|
|
|
|
19,520
|
|
|
|
—
|
|
|
Investment impairment, net
|
|
|
2,154
|
|
|
|
38
|
|
|
|
2,259
|
|
|
|
568
|
|
|
Provision for income taxes
|
|
|
(8,350
|
)
|
|
|
(4,803
|
)
|
|
|
(12,257
|
)
|
|
|
(10,171
|
)
|
|
Net income - Non - GAAP
|
|
|
68,275
|
|
|
|
57,326
|
|
|
|
155,596
|
|
|
|
100,300
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
Diluted - GAAP
|
|
$
|
0.38
|
|
|
$
|
0.29
|
|
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
Diluted - Non - GAAP
|
|
$
|
0.41
|
|
|
$
|
0.35
|
|
|
$
|
0.94
|
|
|
$
|
0.62
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute net income per share:
|
|
|
|
|
|
|
|
Diluted - GAAP and Non GAAP
|
|
|
166,321
|
|
|
|
163,388
|
|
|
|
166,076
|
|
|
|
161,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share amounts) - Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
SHARED BASED COMPENSATION EXPENSE
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Share-based Compensation Expense
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
$
|
560
|
|
|
$
|
672
|
|
|
$
|
1,724
|
|
|
$
|
1,843
|
|
|
Marketing and selling
|
|
|
2,786
|
|
|
|
3,057
|
|
|
|
6,995
|
|
|
|
5,980
|
|
|
Research and Development
|
|
|
1,066
|
|
|
|
1,906
|
|
|
|
2,462
|
|
|
|
3,840
|
|
|
General and administrative
|
|
|
2,635
|
|
|
|
3,278
|
|
|
|
8,865
|
|
|
|
5,749
|
|
|
Income tax benefit
|
|
|
(1,623
|
)
|
|
|
(168
|
)
|
|
|
(4,720
|
)
|
|
|
(2,343
|
)
|
|
Total share-based compensation expense after income taxes
|
|
$
|
5,424
|
|
|
$
|
8,745
|
|
|
$
|
15,326
|
|
|
$
|
15,069
|
|
|
_______________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) As disclosed in the Company's Annual Report on Form 10-K for the
year ended March 31, 2014 and in the audited consolidated financial
statements contained therein, the Company has revised its financial
statements for the fiscal year ended March 31, 2013. The impact of the
adjustments also immaterially impact the financial statements for the
first three quarters of the fiscal year ended March 31, 2014 as
previously included in the Company's quarterly reports on Form 10-Q for
Fiscal 2014. Accordingly, the financial statements for the three and
nine months ended December 31, 2013 included in this earning release
have been revised.
(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 three and nine
months ended December 31, 2014, 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 and restructuring-related charges. 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. Our restructuring
initiatives also resulted in other costs related to restructurings not
qualifying for inclusion in restructuring charges. 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.
One-time special charges: costs related to investigations.
These expenses are forensic accounting, audit, consulting and legal fees
related to the Audit Committee's investigation and the ongoing formal
investigation by the Securities and Exchange Commission. 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 foreign 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. Retail sales
for the three months ended December 31, 2014 compared to retail sales
for the three months ended December 31, 2013 grew 5 percent in constant
currency, on a non-GAAP basis, and 2 percent on a GAAP basis, an
increase of 3 percentage points due to foreign currency exchange rates.
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)
Logitech International
Joe Greenhalgh
Vice President, Investor
Relations - USA
510-713-4430
or
Krista Todd
Sr.
Director, External Communications - USA
510-713-5834
or
Ben
Starkie
Corporate Communications - Europe
+41-(0) 79-292-3499
Source: Logitech International
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