Fifth Consecutive Year of Strong Financial Performance
Sales for Video Collaboration up 44% and Gaming up 57%
NEWARK, Calif. & LAUSANNE, Switzerland--(BUSINESS WIRE)--
Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced
financial results for the fourth quarter and full year of Fiscal Year
2018, ended March 31, 2018.
For Fiscal Year 2018:
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Sales were the highest ever at $2.57 billion, up 16 percent in US
dollars and 13 percent in constant currency, compared to the prior
year.
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GAAP operating income grew 8 percent to $230 million, compared to $212
million a year ago. GAAP earnings per share (EPS) was $1.23, compared
to $1.24 a year ago. Fiscal Year 2018 GAAP EPS was impacted by a $22
million ($0.13 per share) one-time net tax expense following the
reduction in the U.S. federal income tax rate and other reforms.
-
Non-GAAP operating income grew 14 percent to $287 million, compared to
$252 million a year ago. Non-GAAP EPS grew 13 percent to $1.60,
compared to $1.41 a year ago.
-
Cash flow from operations grew 20 percent to $346 million – the
highest in eight years.
For Q4 Fiscal Year 2018:
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Sales grew to $592 million, up 16 percent in US dollars and 9 percent
in constant currency, compared to the prior year.
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GAAP operating income grew to $39 million, and non-GAAP operating
income grew to a better-than-expected $55 million.
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Cash flow from operations reached $90 million.
“Over the past five years we’ve built a business with sustainable
growth. We have a resilient and expanding portfolio. We are building
five scalable capabilities led by design and engineering,” said Bracken
Darrell, Logitech president and chief executive officer. “Fiscal Year
2018 delivered broad-based, double-digit growth led by Gaming and Video
Collaboration. Now, as we look to the next five years, we will go on the
offense to accelerate the creation of an amazing company.”
Vincent Pilette, Logitech chief financial officer, said, “We’ve
delivered a great fiscal year with record sales, and
better-than-expected profitability and cash flow from operations. We go
into Fiscal Year 2019 with strong momentum, our financial fundamentals
in place, and an eye toward shaping the portfolio and reallocating
resources to continuously transform.”
Outlook
Logitech confirmed its Fiscal Year 2019 outlook of high single-digit
sales growth in constant currency and $310 to $320 million in non-GAAP
operating income.
Management Update
On May 2, 2018, L. Joseph Sullivan, the Company’s senior vice president,
worldwide operations, announced his retirement and, effective
immediately, resigned from the Company’s Group Management Team. The
Company accepted this resignation. Mr. Sullivan’s retirement from
Logitech will be effective as of February 2, 2019, the end of his
contractual notice period.
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 Fiscal Year 2018 on Thursday, May 3, 2018 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.
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 investments in privately
held companies, 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 2019.
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 Logitech,
Ultimate
Ears, Jaybird,
Logitech
G and ASTRO
Gaming. 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 preliminary financial results for the three
months and fiscal year ended March 31, 2018, ability to grow and sustain
growth, product portfolio, capabilities and their scalability,
transformation and creation of an amazing company and its timing,
momentum, reallocation of resources, and outlook for Fiscal Year 2019
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; 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; 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 Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 2017 and our Annual Report on Form 10-K for
the fiscal year ended March 31, 2017, 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 and other Logitech marks are trademarks or registered
trademarks of Logitech Europe S.A and/or its affiliates in the U.S. 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 website at www.logitech.com.
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LOGITECH INTERNATIONAL S.A.
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PRELIMINARY RESULTS
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(In thousands, except per share amounts) - unaudited
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Three Months Ended
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Fiscal Years Ended
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March 31,
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March 31,
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GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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2018
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2017
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2018
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2017
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Net sales
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$
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592,426
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$
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510,552
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$
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2,566,863
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$
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2,221,427
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Cost of goods sold
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377,617
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311,303
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1,648,744
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1,395,211
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Amortization of intangible assets and purchase accounting effect on
inventory
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2,574
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1,470
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8,878
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|
|
6,175
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Gross profit
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212,235
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197,779
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909,241
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820,041
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Operating expenses:
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Marketing and selling
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109,572
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99,941
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435,489
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379,641
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Research and development
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37,616
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33,658
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143,760
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130,525
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General and administrative
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23,387
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24,683
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96,353
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100,270
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Amortization of intangible assets and acquisition-related costs
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2,553
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|
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1,279
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8,930
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5,814
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Change in fair value of contingent consideration for business
acquisition
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—
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|
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1,833
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(4,908
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)
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(8,092
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)
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Restructuring charges (credits), net
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—
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67
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(116
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)
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23
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Total operating expenses
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173,128
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161,461
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|
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679,508
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608,181
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Operating income
|
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39,107
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|
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36,318
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|
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229,733
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211,860
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Interest income
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1,872
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|
|
1,189
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|
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4,969
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|
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1,452
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Other income (expense), net
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(1,543
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)
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734
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|
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(2,437
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)
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1,677
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Income before income taxes
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39,436
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38,241
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|
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232,265
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|
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214,989
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Provision for (benefit from) income taxes
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5,032
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(1,184
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)
|
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23,723
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|
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9,113
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Net income
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$
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34,404
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|
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$
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39,425
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|
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$
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208,542
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$
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205,876
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Net income per share :
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Basic
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$
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0.21
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$
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0.24
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$
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1.27
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$
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1.27
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Diluted
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$
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0.20
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$
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0.24
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$
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1.23
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$
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1.24
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Weighted average shares used to compute net income per share:
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Basic
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164,374
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162,023
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164,038
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162,058
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Diluted
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169,387
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166,526
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168,971
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165,540
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Cash dividend per share
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$
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—
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$
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—
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$
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0.63
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$
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0.57
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LOGITECH INTERNATIONAL S.A.
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PRELIMINARY RESULTS
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(In thousands) - unaudited
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March 31,
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March 31,
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CONDENSED CONSOLIDATED BALANCE SHEETS
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2018
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2017
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Current assets:
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Cash and cash equivalents
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$
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641,947
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$
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547,533
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Accounts receivable, net
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214,885
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185,179
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Inventories
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259,906
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253,401
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Other current assets
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56,362
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41,732
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Total current assets
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1,173,100
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1,027,845
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Non-current assets:
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Property, plant and equipment, net
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86,304
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85,408
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Goodwill
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275,451
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249,741
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Other intangible assets, net
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87,547
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47,564
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Other assets
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120,755
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88,119
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Total assets
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$
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1,743,157
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$
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1,498,677
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Current liabilities:
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Accounts payable
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$
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293,988
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$
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274,805
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Accrued and other current liabilities
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281,732
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232,273
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Total current liabilities
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575,720
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507,078
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Non-current liabilities:
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Income taxes payable
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34,956
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51,797
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Other non-current liabilities
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81,924
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83,691
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Total liabilities
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692,600
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642,566
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Shareholders' equity:
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Registered shares, CHF 0.25 par value:
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30,148
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30,148
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Issued and authorized shares—173,106 at March 31, 2018 and 2017
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Conditionally authorized shares—50,000 at March 31, 2018 and 2017
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Additional paid-in capital
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47,234
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26,596
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Treasury shares, at cost—8,527 and 10,727 shares at March 31, 2018
and 2017, respectively
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(165,686
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)
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(174,037
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)
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Retained earnings
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1,232,316
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1,074,110
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Accumulated other comprehensive loss
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(93,455
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)
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(100,706
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Total shareholders' equity
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1,050,557
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856,111
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Total liabilities and shareholders' equity
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$
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1,743,157
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$
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1,498,677
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LOGITECH INTERNATIONAL S.A.
|
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|
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|
|
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|
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PRELIMINARY RESULTS
|
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(In thousands) - unaudited
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
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Fiscal Years Ended
|
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|
|
March 31,
|
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March 31,
|
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
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2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
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Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
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Net income
|
|
$
|
34,404
|
|
|
$
|
39,425
|
|
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$
|
208,542
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|
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$
|
205,876
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|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
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|
|
|
|
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Depreciation
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11,077
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|
|
8,642
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|
41,295
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|
|
41,121
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Amortization of intangible assets
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4,954
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|
|
2,749
|
|
|
15,607
|
|
|
9,367
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|
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Share-based compensation expense
|
|
10,899
|
|
|
9,536
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|
|
44,138
|
|
|
35,890
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|
|
Gain on investments in privately held companies
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(119
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)
|
|
(22
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)
|
|
(669
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)
|
|
(569
|
)
|
|
Deferred income taxes
|
|
413
|
|
|
(1,924
|
)
|
|
7,141
|
|
|
(2,397
|
)
|
|
Change in fair value of contingent consideration for business
acquisition
|
|
—
|
|
|
1,833
|
|
|
(4,908
|
)
|
|
(8,092
|
)
|
|
Other
|
|
(18
|
)
|
|
107
|
|
|
(11
|
)
|
|
107
|
|
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
137,665
|
|
|
92,861
|
|
|
(26,363
|
)
|
|
(46,553
|
)
|
|
Inventories
|
|
21,739
|
|
|
(234
|
)
|
|
16,047
|
|
|
(15,428
|
)
|
|
Other assets
|
|
2,045
|
|
|
1,037
|
|
|
(16,908
|
)
|
|
(5,309
|
)
|
|
Accounts payable
|
|
(134,016
|
)
|
|
(84,636
|
)
|
|
17,695
|
|
|
24,459
|
|
|
Accrued and other liabilities
|
|
1,134
|
|
|
(21,632
|
)
|
|
44,655
|
|
|
49,917
|
|
|
Net cash provided by operating activities
|
|
90,177
|
|
|
|
47,742
|
|
|
346,261
|
|
|
288,389
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|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
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Purchases of property, plant and equipment
|
|
(12,155
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)
|
|
(8,432
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)
|
|
(39,748
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)
|
|
(31,804
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)
|
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Acquisitions, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(88,323
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)
|
|
(66,987
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)
|
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Investment in privately held companies
|
|
(360
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)
|
|
(320
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)
|
|
(1,240
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)
|
|
(960
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)
|
|
Proceeds from return of investment in privately held companies
|
|
—
|
|
|
—
|
|
|
237
|
|
|
—
|
|
|
Changes in restricted cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
715
|
|
|
Purchases of short-term investments
|
|
—
|
|
|
—
|
|
|
(6,789
|
)
|
|
—
|
|
|
Sales of short-term investments
|
|
—
|
|
|
—
|
|
|
6,789
|
|
|
—
|
|
|
Purchases of trading investments
|
|
(3,211
|
)
|
|
(1,184
|
)
|
|
(6,053
|
)
|
|
(7,052
|
)
|
|
Proceeds from sales of trading investments
|
|
3,214
|
|
|
1,212
|
|
|
6,423
|
|
|
7,124
|
|
|
Net cash used in investing activities
|
|
(12,512
|
)
|
|
|
(8,724
|
)
|
|
(128,704
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)
|
|
(98,964
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Payment of cash dividends
|
|
—
|
|
|
—
|
|
|
(104,248
|
)
|
|
(93,093
|
)
|
|
Payment of contingent consideration for business acquisition
|
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|
—
|
|
|
Purchases of registered shares
|
|
(10,314
|
)
|
|
(20,022
|
)
|
|
(30,722
|
)
|
|
(83,786
|
)
|
|
Proceeds from exercise of stock options and purchase rights
|
|
10,963
|
|
|
19,219
|
|
|
41,910
|
|
|
39,574
|
|
|
Tax withholdings related to net share settlements of restricted
stock units
|
|
(4,308
|
)
|
|
(5,358
|
)
|
|
(29,813
|
)
|
|
(18,412
|
)
|
|
Net cash used in financing activities
|
|
(3,659
|
)
|
|
(6,161
|
)
|
|
(127,873
|
)
|
|
(155,717
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
3,053
|
|
|
1,098
|
|
|
4,730
|
|
|
(5,370
|
)
|
|
Net increase in cash and cash equivalents
|
|
77,059
|
|
|
33,955
|
|
|
94,414
|
|
|
28,338
|
|
|
Cash and cash equivalents at beginning of period
|
|
564,888
|
|
|
513,578
|
|
|
547,533
|
|
|
519,195
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
641,947
|
|
|
$
|
547,533
|
|
|
$
|
641,947
|
|
|
$
|
547,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRELIMINARY RESULTS
|
|
|
|
|
|
(In thousands) - unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES
|
|
Three Months Ended
|
|
Fiscal Years Ended
|
|
|
|
March 31,
|
|
March 31,
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales by product category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pointing Devices
|
|
$
|
129,937
|
|
|
$
|
119,313
|
|
|
9
|
%
|
|
$
|
516,637
|
|
|
$
|
501,562
|
|
|
3
|
%
|
|
Keyboards & Combos
|
|
136,787
|
|
|
120,488
|
|
|
14
|
|
|
498,472
|
|
|
480,312
|
|
|
4
|
|
|
PC Webcams
|
|
31,776
|
|
|
27,015
|
|
|
18
|
|
|
112,147
|
|
|
107,087
|
|
|
5
|
|
|
Tablet & Other Accessories
|
|
27,292
|
|
|
17,528
|
|
|
56
|
|
|
107,942
|
|
|
76,879
|
|
|
40
|
|
|
Video Collaboration
|
|
54,709
|
|
|
38,711
|
|
|
41
|
|
|
182,717
|
|
|
127,009
|
|
|
44
|
|
|
Mobile Speakers
|
|
13,974
|
|
|
39,975
|
|
|
(65
|
)
|
|
314,817
|
|
|
301,021
|
|
|
5
|
|
|
Audio-PC & Wearables
|
|
55,248
|
|
|
60,332
|
|
|
(8
|
)
|
|
252,330
|
|
|
246,390
|
|
|
2
|
|
|
Gaming
|
|
126,763
|
|
|
71,489
|
|
|
77
|
|
|
491,995
|
|
|
314,362
|
|
|
57
|
|
|
Smart Home
|
|
15,892
|
|
|
15,594
|
|
|
2
|
|
|
89,373
|
|
|
65,510
|
|
|
36
|
|
|
Other (1)
|
|
48
|
|
|
107
|
|
|
(55
|
)
|
|
433
|
|
|
1,295
|
|
|
(67
|
)
|
|
Total net retail sales
|
|
$
|
592,426
|
|
|
$
|
510,552
|
|
|
16
|
|
|
$
|
2,566,863
|
|
|
$
|
2,221,427
|
|
|
16
|
|
|
__________________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
|
Three Months Ended
|
|
Fiscal Years Ended
|
|
|
|
March 31,
|
|
March 31,
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit - GAAP
|
|
$
|
212,235
|
|
|
$
|
197,779
|
|
|
$
|
909,241
|
|
|
$
|
820,041
|
|
|
Share-based compensation expense
|
|
971
|
|
|
733
|
|
|
3,733
|
|
|
2,663
|
|
|
Amortization of intangible assets and purchase accounting effect on
inventory
|
|
2,574
|
|
|
1,470
|
|
|
8,878
|
|
|
6,175
|
|
|
Gross profit - Non-GAAP
|
|
$
|
215,780
|
|
|
$
|
199,982
|
|
|
$
|
921,852
|
|
|
$
|
828,879
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin - GAAP
|
|
35.8
|
%
|
|
38.7
|
%
|
|
35.4
|
%
|
|
36.9
|
%
|
|
Gross margin - Non-GAAP
|
|
36.4
|
%
|
|
39.2
|
%
|
|
35.9
|
%
|
|
37.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - GAAP
|
|
$
|
173,128
|
|
|
$
|
161,461
|
|
|
$
|
679,508
|
|
|
$
|
608,181
|
|
|
Less: Share-based compensation expense
|
|
9,928
|
|
|
8,803
|
|
|
40,405
|
|
|
33,227
|
|
|
Less: Amortization of intangible assets and acquisition-related costs
|
|
2,553
|
|
|
1,279
|
|
|
8,930
|
|
|
5,814
|
|
|
Less: Change in fair value of contingent consideration for business
acquisition
|
|
—
|
|
|
1,833
|
|
|
(4,908
|
)
|
|
(8,092
|
)
|
|
Less: Restructuring charges (credit), net
|
|
—
|
|
|
67
|
|
|
(116
|
)
|
|
23
|
|
|
Less: Investigation and related expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
612
|
|
|
Operating expenses - Non-GAAP
|
|
$
|
160,647
|
|
|
$
|
149,479
|
|
|
$
|
635,197
|
|
|
$
|
576,597
|
|
|
|
|
|
|
|
|
|
|
|
|
% of net sales - GAAP
|
|
29.2
|
%
|
|
31.6
|
%
|
|
26.5
|
%
|
|
27.4
|
%
|
|
% of net sales - Non - GAAP
|
|
27.1
|
%
|
|
29.3
|
%
|
|
24.7
|
%
|
|
26.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income - GAAP
|
|
$
|
39,107
|
|
|
$
|
36,318
|
|
|
$
|
229,733
|
|
|
$
|
211,860
|
|
|
Share-based compensation expense
|
|
10,899
|
|
|
9,536
|
|
|
44,138
|
|
|
35,890
|
|
|
Amortization of intangible assets
|
|
4,954
|
|
|
2,749
|
|
|
15,607
|
|
|
9,367
|
|
|
Purchase accounting effect on inventory
|
|
173
|
|
|
—
|
|
|
789
|
|
|
1,160
|
|
|
Acquisition-related costs
|
|
—
|
|
|
—
|
|
|
1,412
|
|
|
1,462
|
|
|
Change in fair value of contingent consideration for business
acquisition
|
|
—
|
|
|
1,833
|
|
|
(4,908
|
)
|
|
(8,092
|
)
|
|
Restructuring charges (credit), net
|
|
—
|
|
|
67
|
|
|
(116
|
)
|
|
23
|
|
|
Investigation and related expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
612
|
|
|
Operating income - Non - GAAP
|
|
$
|
55,133
|
|
|
$
|
50,503
|
|
|
$
|
286,655
|
|
|
$
|
252,282
|
|
|
|
|
|
|
|
|
|
|
|
|
% of net sales - GAAP
|
|
6.6
|
%
|
|
7.1
|
%
|
|
8.9
|
%
|
|
9.5
|
%
|
|
% of net sales - Non - GAAP
|
|
9.3
|
%
|
|
9.9
|
%
|
|
11.2
|
%
|
|
11.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net income - GAAP
|
|
$
|
34,404
|
|
|
$
|
39,425
|
|
|
$
|
208,542
|
|
|
$
|
205,876
|
|
|
Share-based compensation expense
|
|
10,899
|
|
|
9,536
|
|
|
44,138
|
|
|
35,890
|
|
|
Amortization of intangible assets
|
|
4,954
|
|
|
2,749
|
|
|
15,607
|
|
|
9,367
|
|
|
Purchase accounting effect on inventory
|
|
173
|
|
|
—
|
|
|
789
|
|
|
1,160
|
|
|
Acquisition-related costs
|
|
—
|
|
|
—
|
|
|
1,412
|
|
|
1,462
|
|
|
Change in fair value of contingent consideration for business
acquisition
|
|
—
|
|
|
1,833
|
|
|
(4,908
|
)
|
|
(8,092
|
)
|
|
Restructuring charges (credit), net
|
|
—
|
|
|
67
|
|
|
(116
|
)
|
|
23
|
|
|
Investigation and related expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
612
|
|
|
Gain on investments in privately held companies
|
|
(119
|
)
|
|
(22
|
)
|
|
(669
|
)
|
|
(569
|
)
|
|
Non-GAAP income tax adjustment
|
|
4,249
|
|
|
(4,226
|
)
|
|
6,282
|
|
|
(12,875
|
)
|
|
Net income - Non - GAAP
|
|
$
|
54,560
|
|
|
$
|
49,362
|
|
|
$
|
271,077
|
|
|
$
|
232,854
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
Diluted - GAAP
|
|
$
|
0.20
|
|
|
$
|
0.24
|
|
|
$
|
1.23
|
|
|
$
|
1.24
|
|
|
Diluted - Non - GAAP
|
|
$
|
0.32
|
|
|
$
|
0.30
|
|
|
$
|
1.60
|
|
|
$
|
1.41
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute net income per share:
|
|
|
|
|
|
|
|
|
|
Diluted - GAAP and Non - GAAP
|
|
169,387
|
|
|
166,526
|
|
|
168,971
|
|
|
165,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Share-based Compensation Expense
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
$
|
971
|
|
|
$
|
733
|
|
|
$
|
3,733
|
|
|
$
|
2,663
|
|
|
Marketing and selling
|
|
4,417
|
|
|
4,036
|
|
|
17,765
|
|
|
14,723
|
|
|
Research and development
|
|
1,584
|
|
|
1,193
|
|
|
6,381
|
|
|
4,200
|
|
|
General and administrative
|
|
3,927
|
|
|
3,574
|
|
|
16,259
|
|
|
14,304
|
|
|
Total share-based compensation expense
|
|
10,899
|
|
|
9,536
|
|
|
44,138
|
|
|
35,890
|
|
|
Income tax benefit
|
|
(4,077
|
)
|
|
(2,444
|
)
|
|
(15,998
|
)
|
|
(8,536
|
)
|
|
Total share-based compensation expense, net of income tax
|
|
$
|
6,822
|
|
|
$
|
7,092
|
|
|
$
|
28,140
|
|
|
$
|
27,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: These preliminary results for the three months and fiscal year
ended March 31, 2018 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, 2018, 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 gross profit, 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 affect 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 investments in privately held companies. We
recognized gain (loss) related to 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. For
example, we recognized more GAAP income tax expense in the third and
fourth quarter of fiscal year 2018 as a result of the U.S. tax reform
that we have excluded as a one-time charge on a non-GAAP basis.
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)
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Source: Logitech International