Q3 Retail Revenue Up 12%; Company Raises Sales and Profit Outlook
NEWARK, Calif. & LAUSANNE, Switzerland--(BUSINESS WIRE)--
Logitech International (SIX:LOGN) (Nasdaq:LOGI) today announced
better-than-expected preliminary financial results for the third quarter
of Fiscal Year 2017.
-
Q3 retail sales grew 13 percent in constant currency, reaching the
highest level ever in the Company’s history. Q3 retail sales grew 12
percent in USD.
-
Q3 sales were $667 million, up 7 percent compared to Q3 of the prior
year, which still included OEM sales.
-
Q3 GAAP operating income grew 41% to $96 million, compared to $69
million a year ago. Q3 GAAP earnings per share (EPS) were $0.59,
compared to $0.41 a year ago.
-
Q3 non-GAAP operating income grew 34% to $99 million, compared to $74
million a year ago. Q3 non-GAAP EPS grew 37% to $0.56, compared to
$0.41 a year ago.
-
Cash flow from operations for the first nine months of Fiscal Year
2017 was $234 million, compared to $151 million for same period a year
ago.
“This Q3, our results exceeded expectations and were outstanding, with
broad-based growth across all our regions and almost all product
categories,” said Bracken Darrell, Logitech president and chief
executive officer. “We delivered both the highest retail revenue and the
highest non-GAAP gross margin in Logitech’s 35-year history. Our
strategy is working, and we are just at the beginning of our path to
deliver what we’re capable of. We have significantly raised our outlook
on the back of this performance.”
Outlook
Logitech raised its Fiscal Year 2017 outlook to 12 to 13 percent retail
sales growth in constant currency, up from its previous range of 8 to 10
percent retail sales growth in constant currency. The Company also
increased its non-GAAP operating income outlook for Fiscal Year 2017 to
a range of $225 to $230 million, up from its prior range of $195 million
to $205 million.
Preliminary Statement
These preliminary results for the three and nine months ended December
31, 2016 are subject to adjustments, including completion of our
evaluation of the changes in the fair value of contingent consideration
for our acquisition of Jaybird LLC and other subsequent events that may
occur through the date of filing our Quarterly Report on Form 10-Q.
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 2017 on Weds., January 25, 2017 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.
Continued Operations
Logitech separated its Lifesize division from the Company on Dec. 28,
2015. 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 now reported in the Company’s financial statements
under discontinued operations, or total Logitech including discontinued
operations. 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
2017.
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: our strategy, our capabilities, and our outlook
for Fiscal Year 2017 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
September 30, 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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|
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LOGITECH INTERNATIONAL S.A.
|
|
PRELIMINARY RESULTS
|
|
(In thousands, except per share amounts) – unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (A)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
666,707
|
|
|
$
|
621,079
|
|
|
$
|
1,710,875
|
|
|
$
|
1,587,259
|
|
|
Cost of goods sold
|
|
|
418,015
|
|
|
|
412,582
|
|
|
|
1,083,908
|
|
|
|
1,048,312
|
|
|
Amortization of intangible assets and purchase accounting effect on
inventory
|
|
|
1,929
|
|
|
|
—
|
|
|
|
4,705
|
|
|
|
—
|
|
|
Gross profit
|
|
|
246,763
|
|
|
|
208,497
|
|
|
|
622,262
|
|
|
|
538,947
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Marketing and selling
|
|
|
102,036
|
|
|
|
87,295
|
|
|
|
279,700
|
|
|
|
241,924
|
|
|
Research and development
|
|
|
32,284
|
|
|
|
29,161
|
|
|
|
96,867
|
|
|
|
85,889
|
|
|
General and administrative
|
|
|
24,631
|
|
|
|
24,080
|
|
|
|
75,587
|
|
|
|
77,966
|
|
|
Amortization of intangible assets and acquisition-related costs
|
|
|
1,494
|
|
|
|
112
|
|
|
|
4,535
|
|
|
|
447
|
|
|
Change in fair value of contingent consideration for business
acquisition
|
|
|
(9,925
|
)
|
|
|
—
|
|
|
|
(9,925
|
)
|
|
|
—
|
|
|
Restructuring charges (credits), net
|
|
|
(33
|
)
|
|
|
(666
|
)
|
|
|
(44
|
)
|
|
|
14,018
|
|
|
Total operating expenses
|
|
|
150,487
|
|
|
|
139,982
|
|
|
|
446,720
|
|
|
|
420,244
|
|
|
Operating income
|
|
|
96,276
|
|
|
|
68,515
|
|
|
|
175,542
|
|
|
|
118,703
|
|
|
Interest income, net
|
|
|
202
|
|
|
|
105
|
|
|
|
263
|
|
|
|
549
|
|
|
Other income (expense), net
|
|
|
2,634
|
|
|
|
862
|
|
|
|
943
|
|
|
|
(894
|
)
|
|
Income before income taxes
|
|
|
99,112
|
|
|
|
69,482
|
|
|
|
176,748
|
|
|
|
118,358
|
|
|
Provision for income taxes
|
|
|
1,647
|
|
|
|
1,442
|
|
|
|
10,297
|
|
|
|
7,006
|
|
|
Net income from continuing operations
|
|
|
97,465
|
|
|
|
68,040
|
|
|
|
166,451
|
|
|
|
111,352
|
|
|
Loss from discontinued operations, net of taxes
|
|
|
—
|
|
|
|
(2,954
|
)
|
|
|
—
|
|
|
|
(20,732
|
)
|
|
Net income
|
|
$
|
97,465
|
|
|
$
|
65,086
|
|
|
$
|
166,451
|
|
|
$
|
90,620
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - basic:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.60
|
|
|
$
|
0.42
|
|
|
$
|
1.03
|
|
|
$
|
0.68
|
|
|
Discontinued operations
|
|
|
—
|
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
(0.13
|
)
|
|
Net income per share – basic
|
|
$
|
0.60
|
|
|
$
|
0.40
|
|
|
$
|
1.03
|
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - diluted:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.59
|
|
|
$
|
0.41
|
|
|
$
|
1.01
|
|
|
$
|
0.67
|
|
|
Discontinued operations
|
|
|
—
|
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
(0.12
|
)
|
|
Net income per share – diluted
|
|
$
|
0.59
|
|
|
$
|
0.39
|
|
|
$
|
1.01
|
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used to compute net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
161,977
|
|
|
|
162,669
|
|
|
|
162,070
|
|
|
|
163,521
|
|
|
Diluted
|
|
|
165,901
|
|
|
|
165,168
|
|
|
|
165,211
|
|
|
|
165,951
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividend per share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.57
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
PRELIMINARY RESULTS
|
|
(In thousands) – unaudited
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
March 31,
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (A)
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
513,578
|
|
|
$
|
519,195
|
|
|
Accounts receivable, net
|
|
|
277,677
|
|
|
|
142,778
|
|
|
Inventories
|
|
|
250,286
|
|
|
|
228,786
|
|
|
Other current assets
|
|
|
43,339
|
|
|
|
35,488
|
|
|
Total current assets
|
|
|
1,084,880
|
|
|
|
926,247
|
|
|
Non-current assets:
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
84,194
|
|
|
|
92,860
|
|
|
Goodwill
|
|
|
249,721
|
|
|
|
218,224
|
|
|
Other intangible assets, net
|
|
|
50,313
|
|
|
|
—
|
|
|
Other assets
|
|
|
85,728
|
|
|
|
86,816
|
|
|
Total assets
|
|
$
|
1,554,836
|
|
|
$
|
1,324,147
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
358,196
|
|
|
$
|
241,166
|
|
|
Accrued and other current liabilities
|
|
|
247,963
|
|
|
|
173,764
|
|
|
Total current liabilities
|
|
|
606,159
|
|
|
|
414,930
|
|
|
Non-current liabilities:
|
|
|
|
|
|
Income taxes payable
|
|
|
55,573
|
|
|
|
59,734
|
|
|
Other non-current liabilities
|
|
|
91,709
|
|
|
|
89,535
|
|
|
Total liabilities
|
|
|
753,441
|
|
|
|
564,199
|
|
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
Registered shares, CHF 0.25 par value:
|
|
|
30,148
|
|
|
|
30,148
|
|
|
Issued and authorized shares —173,106 at December 31 and March 31,
2016
|
|
|
|
|
|
Conditionally authorized shares — 50,000 at December 31 and March
31, 2016
|
|
|
|
|
|
Additional paid-in capital
|
|
|
16,336
|
|
|
|
6,616
|
|
|
Less shares in treasury, at cost — 11,298 at December 31, 2016 and
10,697 at March 31, 2016
|
|
|
(167,342
|
)
|
|
|
(128,407
|
)
|
|
Retained earnings
|
|
|
1,034,685
|
|
|
|
963,576
|
|
|
Accumulated other comprehensive loss
|
|
|
(112,432
|
)
|
|
|
(111,985
|
)
|
|
Total shareholders’ equity
|
|
|
801,395
|
|
|
|
759,948
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
1,554,836
|
|
|
$
|
1,324,147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
PRELIMINARY RESULTS
|
|
(In thousands) – unaudited
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (A)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
97,465
|
|
|
$
|
65,086
|
|
|
$
|
166,451
|
|
|
$
|
90,620
|
|
|
Non-cash items included in net income:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
8,863
|
|
|
|
14,647
|
|
|
|
32,479
|
|
|
|
36,884
|
|
|
Amortization of intangible assets
|
|
|
2,751
|
|
|
|
310
|
|
|
|
6,618
|
|
|
|
1,536
|
|
|
Loss (gain) on equity-method investment
|
|
|
(375
|
)
|
|
|
(4
|
)
|
|
|
(547
|
)
|
|
|
176
|
|
|
Share-based compensation expense
|
|
|
9,387
|
|
|
|
6,618
|
|
|
|
26,354
|
|
|
|
19,875
|
|
|
Excess tax benefits from share-based compensation
|
|
|
(2,227
|
)
|
|
|
(926
|
)
|
|
|
(6,357
|
)
|
|
|
(2,089
|
)
|
|
Deferred income taxes
|
|
|
(88
|
)
|
|
|
1,962
|
|
|
|
(473
|
)
|
|
|
2,914
|
|
|
Change in fair value of contingent consideration for business
acquisition
|
|
|
(9,925
|
)
|
|
|
—
|
|
|
|
(9,925
|
)
|
|
|
—
|
|
|
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(42,413
|
)
|
|
|
(20,411
|
)
|
|
|
(139,414
|
)
|
|
|
(115,814
|
)
|
|
Inventories
|
|
|
13,123
|
|
|
|
73,508
|
|
|
|
(15,194
|
)
|
|
|
18,066
|
|
|
Other assets
|
|
|
(1,608
|
)
|
|
|
(818
|
)
|
|
|
(6,346
|
)
|
|
|
(9,329
|
)
|
|
Accounts payable
|
|
|
25,419
|
|
|
|
18,402
|
|
|
|
109,095
|
|
|
|
68,763
|
|
|
Accrued and other liabilities
|
|
|
46,162
|
|
|
|
7,334
|
|
|
|
71,549
|
|
|
|
39,244
|
|
|
Net cash provided by operating activities
|
|
|
146,534
|
|
|
|
165,708
|
|
|
|
234,290
|
|
|
|
150,846
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(8,614
|
)
|
|
|
(19,166
|
)
|
|
|
(23,372
|
)
|
|
|
(50,443
|
)
|
|
Investment in privately held companies
|
|
|
(160
|
)
|
|
|
(1,619
|
)
|
|
|
(640
|
)
|
|
|
(2,099
|
)
|
|
Acquisitions, net of cash acquired
|
|
|
—
|
|
|
|
—
|
|
|
|
(66,987
|
)
|
|
|
—
|
|
|
Release of restricted cash
|
|
|
—
|
|
|
|
—
|
|
|
|
715
|
|
|
|
—
|
|
|
Purchases of trading investments
|
|
|
(597
|
)
|
|
|
(1,746
|
)
|
|
|
(5,868
|
)
|
|
|
(4,395
|
)
|
|
Proceeds from sales of trading investments
|
|
|
616
|
|
|
|
1,813
|
|
|
|
5,912
|
|
|
|
4,668
|
|
|
Net cash used in investing activities
|
|
|
(8,755
|
)
|
|
|
(20,718
|
)
|
|
|
(90,240
|
)
|
|
|
(52,269
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Payment of cash dividends
|
|
|
—
|
|
|
|
—
|
|
|
|
(93,093
|
)
|
|
|
(85,915
|
)
|
|
Purchases of treasury shares
|
|
|
(20,870
|
)
|
|
|
—
|
|
|
|
(63,764
|
)
|
|
|
(48,802
|
)
|
|
Proceeds from sales of shares upon exercise of options and purchase
rights
|
|
|
5,871
|
|
|
|
1,459
|
|
|
|
20,355
|
|
|
|
12,562
|
|
|
Tax withholdings related to net share settlements of restricted
stock units
|
|
|
(2,007
|
)
|
|
|
(1,855
|
)
|
|
|
(13,054
|
)
|
|
|
(5,357
|
)
|
|
Excess tax benefits from share-based compensation
|
|
|
2,227
|
|
|
|
926
|
|
|
|
6,357
|
|
|
|
2,089
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(14,779
|
)
|
|
|
530
|
|
|
|
(143,199
|
)
|
|
|
(125,423
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(4,623
|
)
|
|
|
(2,307
|
)
|
|
|
(6,468
|
)
|
|
|
(1,205
|
)
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
118,377
|
|
|
|
143,213
|
|
|
|
(5,617
|
)
|
|
|
(28,051
|
)
|
|
Cash and cash equivalents, beginning of the period
|
|
|
395,201
|
|
|
|
365,774
|
|
|
|
519,195
|
|
|
|
537,038
|
|
|
Cash and cash equivalents, end of the period
|
|
$
|
513,578
|
|
|
$
|
508,987
|
|
|
$
|
513,578
|
|
|
$
|
508,987
|
|
|
|
|
|
|
|
|
|
|
|
|
The following amounts reflected in the statements of cash flows
are included in discontinued operations:
|
|
Depreciation
|
|
$
|
—
|
|
|
$
|
787
|
|
|
$
|
—
|
|
|
$
|
2,207
|
|
|
Amortization of other intangible assets
|
|
$
|
—
|
|
|
$
|
198
|
|
|
$
|
—
|
|
|
$
|
1,089
|
|
|
Share-based compensation expense
|
|
$
|
—
|
|
|
$
|
156
|
|
|
$
|
—
|
|
|
$
|
584
|
|
|
Purchases of property, plant and equipment
|
|
$
|
—
|
|
|
$
|
681
|
|
|
$
|
—
|
|
|
$
|
1,431
|
|
|
Cash and cash equivalents, beginning of the period
|
|
$
|
—
|
|
|
$
|
4,639
|
|
|
$
|
—
|
|
|
$
|
3,659
|
|
|
Cash and cash equivalents, end of the period
|
|
$
|
—
|
|
|
$
|
3,905
|
|
|
$
|
—
|
|
|
$
|
3,905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
PRELIMINARY RESULTS
|
|
(In thousands) - unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales by channel:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
$
|
666,707
|
|
|
$
|
594,567
|
|
|
12
|
%
|
|
$
|
1,710,875
|
|
|
$
|
1,516,218
|
|
|
13
|
%
|
|
OEM
|
|
|
—
|
|
|
|
26,512
|
|
|
(100
|
)
|
|
|
—
|
|
|
|
71,041
|
|
|
(100
|
)
|
|
Total net sales
|
|
$
|
666,707
|
|
|
$
|
621,079
|
|
|
7
|
|
|
$
|
1,710,875
|
|
|
$
|
1,587,259
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net retail sales by product category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile Speakers
|
|
$
|
106,578
|
|
|
$
|
85,081
|
|
|
25
|
%
|
|
$
|
261,046
|
|
|
$
|
206,175
|
|
|
27
|
%
|
|
Audio-PC & Wearables
|
|
|
67,225
|
|
|
|
57,300
|
|
|
17
|
|
|
|
186,058
|
|
|
|
149,341
|
|
|
25
|
|
|
Gaming
|
|
|
107,181
|
|
|
|
77,706
|
|
|
38
|
|
|
|
242,874
|
|
|
|
189,000
|
|
|
29
|
|
|
Video Collaboration
|
|
|
35,807
|
|
|
|
26,216
|
|
|
37
|
|
|
|
88,298
|
|
|
|
67,460
|
|
|
31
|
|
|
Home Control
|
|
|
26,942
|
|
|
|
25,684
|
|
|
5
|
|
|
|
49,916
|
|
|
|
48,548
|
|
|
3
|
|
|
Pointing Devices
|
|
|
142,166
|
|
|
|
139,711
|
|
|
2
|
|
|
|
382,249
|
|
|
|
381,364
|
|
|
—
|
|
|
Keyboards & Combos
|
|
|
125,289
|
|
|
|
116,531
|
|
|
8
|
|
|
|
359,824
|
|
|
|
324,458
|
|
|
11
|
|
|
Tablet & Other Accessories
|
|
|
24,852
|
|
|
|
35,873
|
|
|
(31
|
)
|
|
|
59,351
|
|
|
|
73,222
|
|
|
(19
|
)
|
|
PC Webcams
|
|
|
30,503
|
|
|
|
29,648
|
|
|
3
|
|
|
|
80,072
|
|
|
|
74,689
|
|
|
7
|
|
|
Other (1)
|
|
|
164
|
|
|
|
817
|
|
|
(80
|
)
|
|
|
1,187
|
|
|
|
1,961
|
|
|
(39
|
)
|
|
Total net retail sales
|
|
$
|
666,707
|
|
|
$
|
594,567
|
|
|
12
|
|
|
$
|
1,710,875
|
|
|
$
|
1,516,218
|
|
|
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.
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
PRELIMINARY RESULTS
|
|
(In thousands, except per share amounts) – Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
GAAP TO NON GAAP RECONCILIATION (A)(B)
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit – GAAP
|
|
$
|
246,763
|
|
|
$
|
208,497
|
|
|
$
|
622,262
|
|
|
$
|
538,947
|
|
|
Share-based compensation expense
|
|
|
617
|
|
|
|
464
|
|
|
|
1,930
|
|
|
|
1,648
|
|
|
Amortization of intangible assets and purchase accounting effect on
inventory
|
|
|
1,929
|
|
|
|
—
|
|
|
|
4,705
|
|
|
|
—
|
|
|
Gross profit – Non-GAAP
|
|
$
|
249,309
|
|
|
$
|
208,961
|
|
|
$
|
628,897
|
|
|
$
|
540,595
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin – GAAP
|
|
|
37.0
|
%
|
|
|
33.6
|
%
|
|
|
36.4
|
%
|
|
|
34.0
|
%
|
|
Gross margin – Non-GAAP
|
|
|
37.4
|
%
|
|
|
33.6
|
%
|
|
|
36.8
|
%
|
|
|
34.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses – GAAP
|
|
$
|
150,487
|
|
|
$
|
139,982
|
|
|
$
|
446,720
|
|
|
$
|
420,244
|
|
|
Less: Share-based compensation expense
|
|
|
8,770
|
|
|
|
5,998
|
|
|
|
24,424
|
|
|
|
17,636
|
|
|
Less: Amortization of intangible assets and acquisition-related costs
|
|
|
1,494
|
|
|
|
112
|
|
|
|
4,535
|
|
|
|
447
|
|
|
Less: Change in fair value of contingent consideration for business
acquisition
|
|
|
(9,925
|
)
|
|
|
—
|
|
|
|
(9,925
|
)
|
|
|
—
|
|
|
Less: Restructuring charges (credits), net
|
|
|
(33
|
)
|
|
|
(666
|
)
|
|
|
(44
|
)
|
|
|
14,018
|
|
|
Less: Investigation and related expenses
|
|
|
—
|
|
|
|
(249
|
)
|
|
|
612
|
|
|
|
4,121
|
|
|
Operating expenses – Non-GAAP
|
|
$
|
150,181
|
|
|
$
|
134,787
|
|
|
$
|
427,118
|
|
|
$
|
384,022
|
|
|
|
|
|
|
|
|
|
|
|
|
% of net sales – GAAP
|
|
|
22.6
|
%
|
|
|
22.5
|
%
|
|
|
26.1
|
%
|
|
|
26.5
|
%
|
|
% of net sales – Non-GAAP
|
|
|
22.5
|
%
|
|
|
21.7
|
%
|
|
|
25.0
|
%
|
|
|
24.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income – GAAP
|
|
$
|
96,276
|
|
|
$
|
68,515
|
|
|
$
|
175,542
|
|
|
$
|
118,703
|
|
|
Share-based compensation expense
|
|
|
9,387
|
|
|
|
6,462
|
|
|
|
26,354
|
|
|
|
19,284
|
|
|
Amortization of intangible assets
|
|
|
2,751
|
|
|
|
112
|
|
|
|
6,618
|
|
|
|
447
|
|
|
Purchase accounting effect on inventory
|
|
|
457
|
|
|
|
—
|
|
|
|
1,160
|
|
|
|
—
|
|
|
Acquisition-related costs
|
|
|
215
|
|
|
|
—
|
|
|
|
1,462
|
|
|
|
—
|
|
|
Change in fair value of contingent consideration for business
acquisition
|
|
|
(9,925
|
)
|
|
|
—
|
|
|
|
(9,925
|
)
|
|
|
—
|
|
|
Restructuring charges (credits), net
|
|
|
(33
|
)
|
|
|
(666
|
)
|
|
|
(44
|
)
|
|
|
14,018
|
|
|
Investigation and related expenses
|
|
|
—
|
|
|
|
(249
|
)
|
|
|
612
|
|
|
|
4,121
|
|
|
Operating income – Non-GAAP
|
|
$
|
99,128
|
|
|
$
|
74,174
|
|
|
$
|
201,779
|
|
|
$
|
156,573
|
|
|
|
|
|
|
|
|
|
|
|
|
% of net sales – GAAP
|
|
|
14.4
|
%
|
|
|
11.0
|
%
|
|
|
10.3
|
%
|
|
|
7.5
|
%
|
|
% of net sales – Non-GAAP
|
|
|
14.9
|
%
|
|
|
11.9
|
%
|
|
|
11.8
|
%
|
|
|
9.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations – GAAP
|
|
$
|
97,465
|
|
|
$
|
68,040
|
|
|
$
|
166,451
|
|
|
$
|
111,352
|
|
|
Share-based compensation expense
|
|
|
9,387
|
|
|
|
6,462
|
|
|
|
26,354
|
|
|
|
19,284
|
|
|
Amortization of intangible assets
|
|
|
2,751
|
|
|
|
112
|
|
|
|
6,618
|
|
|
|
447
|
|
|
Purchase accounting effect on inventory
|
|
|
457
|
|
|
|
—
|
|
|
|
1,160
|
|
|
|
—
|
|
|
Acquisition-related costs
|
|
|
215
|
|
|
|
—
|
|
|
|
1,462
|
|
|
|
—
|
|
|
Change in fair value of contingent consideration for business
acquisition
|
|
|
(9,925
|
)
|
|
|
—
|
|
|
|
(9,925
|
)
|
|
|
—
|
|
|
Restructuring charges (credits), net
|
|
|
(33
|
)
|
|
|
(666
|
)
|
|
|
(44
|
)
|
|
|
14,018
|
|
|
Investigation and related expenses
|
|
|
—
|
|
|
|
(249
|
)
|
|
|
612
|
|
|
|
4,121
|
|
|
Loss (gain) on equity-method investment
|
|
|
(375
|
)
|
|
|
(4
|
)
|
|
|
(547
|
)
|
|
|
176
|
|
|
Non-GAAP income tax adjustment
|
|
|
(7,595
|
)
|
|
|
(6,709
|
)
|
|
|
(8,649
|
)
|
|
|
(9,961
|
)
|
|
Net income from continuing operations – Non-GAAP
|
|
$
|
92,347
|
|
|
$
|
66,986
|
|
|
$
|
183,492
|
|
|
$
|
139,437
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations per share:
|
|
|
|
|
|
|
|
|
|
Diluted – GAAP
|
|
$
|
0.59
|
|
|
$
|
0.41
|
|
|
$
|
1.01
|
|
|
$
|
0.67
|
|
|
Diluted – Non-GAAP
|
|
$
|
0.56
|
|
|
$
|
0.41
|
|
|
$
|
1.11
|
|
|
$
|
0.84
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute net income per share:
|
|
|
|
|
|
|
|
|
|
Diluted – GAAP and Non-GAAP
|
|
|
165,901
|
|
|
|
165,168
|
|
|
|
165,211
|
|
|
|
165,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
PRELIMINARY RESULTS
|
|
(In thousands) – unaudited
|
|
|
|
|
|
|
|
|
|
|
|
SHARE-BASED COMPENSATION EXPENSE
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Share-based Compensation Expense
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
$
|
617
|
|
|
$
|
464
|
|
|
$
|
1,930
|
|
|
$
|
1,648
|
|
|
Marketing and selling
|
|
|
4,006
|
|
|
|
2,484
|
|
|
|
10,687
|
|
|
|
6,545
|
|
|
Research and development
|
|
|
1,176
|
|
|
|
846
|
|
|
|
3,007
|
|
|
|
2,174
|
|
|
General and administrative
|
|
|
3,588
|
|
|
|
2,668
|
|
|
|
10,730
|
|
|
|
8,917
|
|
|
Restructuring
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7
|
|
|
Total share-based compensation expense
|
|
|
9,387
|
|
|
|
6,462
|
|
|
|
26,354
|
|
|
|
19,291
|
|
|
Income tax benefit
|
|
|
(2,391
|
)
|
|
|
(1,446
|
)
|
|
|
(6,092
|
)
|
|
|
(2,479
|
)
|
|
Total share-based compensation expense, net of income tax
|
|
$
|
6,996
|
|
|
$
|
5,016
|
|
|
$
|
20,262
|
|
|
$
|
16,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: These preliminary results for the three and nine months ended
December 31, 2016 are subject to adjustments, including completion of
our evaluation of the changes in the fair value of contingent
consideration for our acquisition of Jaybird LLC and other subsequent
events that may occur through the date of filing our Quarterly Report on
Form 10-Q.
(A) Preliminary valuation from the business acquisitions
The preliminary purchase price allocations from the business
acquisitions during the current periods are included in the tables. The
fair value of identifiable intangible assets acquired was based on
estimates and assumptions made by us at the time of acquisitions. As
additional information becomes available, such as finalization of the
estimated fair value of the assets acquired and liabilities assumed and
the fair value of contingent consideration, we may revise our
preliminary or interim purchase price allocations during the remainder
of the measurement periods (which will not exceed 12 months from the
acquisition dates). Any such revisions or changes may be material as we
finalize the fair values of the tangible and intangible assets acquired
and liabilities assumed, and may have a material impact over the results
of operations.
(B) 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
June 30, 2016, 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)
View source version on businesswire.com: http://www.businesswire.com/news/home/20170124006618/en/
Source: Logitech International