LAUSANNE, Switzerland & NEWARK, Calif.--(BUSINESS WIRE)--
Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced
financial results for the third quarter of Fiscal Year 2019.
-
Q3 sales were $864 million, up 6 percent in US dollars and 8 percent
in constant currency, compared to Q3 of the prior year.
-
Q3 GAAP operating income reached $123 million, compared to $100
million in the same quarter a year ago. Q3 GAAP earnings per share
(EPS) grew 40 percent to $0.67, compared to $0.48 in the same quarter
a year ago.
-
Q3 non-GAAP operating income grew 22 percent to $143 million, compared
to $117 million in the same quarter a year ago. Q3 non-GAAP EPS grew
22 percent to $0.79, compared to $0.65 in the same quarter a year ago.
-
Year-to-date cash flow from operations was $273 million, compared to
$256 million in the same period a year ago.
“We delivered record sales and profits in our biggest quarter of the
year,” said Bracken Darrell, Logitech president and chief executive
officer. “Our innovative, diverse portfolio drove double-digit growth
across Gaming, Video Collaboration, and Creativity & Productivity. On
the back of this powerful performance, we are raising our profit outlook
for the year.”
Outlook
Logitech raised its Fiscal Year 2019 profit outlook to between $340
million and $345 million in non-GAAP operating income, up from between
$325 million and $335 million, on an annual sales outlook of 9 to 11
percent growth in constant currency.
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 2019 on Tuesday, January 22, 2019 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.
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), loss (gain) on investments in privately
held companies, 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,
Blue
Microphones, ASTRO
Gaming and Logitech
G. 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
and nine months ended December 31, 2018, 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;
changes in trade policies and agreements and the imposition of tariffs
that affect our products or operations and our ability to mitigate;
risks associated with acquisitions. 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, 2018 and our Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2018, 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.
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Net sales (B) |
|
|
$
|
864,388
|
|
|
$
|
812,021
|
|
|
$
|
2,164,014
|
|
|
$
|
1,974,437
|
|
|
Cost of goods sold
|
|
|
535,707
|
|
|
533,631
|
|
|
1,349,941
|
|
|
1,271,127
|
|
|
Amortization of intangible assets and purchase accounting effect on
inventory
|
|
|
4,699
|
|
|
2,789
|
|
|
10,037
|
|
|
6,304
|
|
|
Gross profit
|
|
|
323,982
|
|
|
275,601
|
|
|
804,036
|
|
|
697,006
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Marketing and selling
|
|
|
132,250
|
|
|
116,153
|
|
|
368,635
|
|
|
325,917
|
|
|
Research and development
|
|
|
40,591
|
|
|
34,398
|
|
|
119,120
|
|
|
106,144
|
|
|
General and administrative
|
|
|
24,496
|
|
|
22,291
|
|
|
75,175
|
|
|
72,966
|
|
|
Amortization of intangible assets and acquisition-related costs
|
|
|
3,539
|
|
|
2,496
|
|
|
10,377
|
|
|
6,377
|
|
|
Change in fair value of contingent consideration for business
acquisition
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,908
|
)
|
|
Restructuring charges (credits), net
|
|
|
(278
|
)
|
|
—
|
|
|
9,762
|
|
|
(116
|
)
|
|
Total operating expenses
|
|
|
200,598
|
|
|
175,338
|
|
|
583,069
|
|
|
506,380
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
123,384
|
|
|
100,263
|
|
|
220,967
|
|
|
190,626
|
|
|
Interest income
|
|
|
1,482
|
|
|
874
|
|
|
5,709
|
|
|
3,097
|
|
|
Other expense, net
|
|
|
(2,747
|
)
|
|
(324
|
)
|
|
(929
|
)
|
|
(894
|
)
|
|
Income before income taxes
|
|
|
122,119
|
|
|
100,813
|
|
|
225,747
|
|
|
192,829
|
|
|
Provision for income taxes
|
|
|
9,309
|
|
|
20,040
|
|
|
10,295
|
|
|
18,691
|
|
|
Net income
|
|
|
$
|
112,810
|
|
|
$
|
80,773
|
|
|
$
|
215,452
|
|
|
$
|
174,138
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.68
|
|
|
$
|
0.49
|
|
|
$
|
1.30
|
|
|
$
|
1.06
|
|
|
Diluted
|
|
|
$
|
0.67
|
|
|
$
|
0.48
|
|
|
$
|
1.28
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used to compute net income per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
165,707
|
|
|
164,248
|
|
|
165,552
|
|
|
163,924
|
|
|
Diluted
|
|
|
168,907
|
|
|
169,079
|
|
|
168,966
|
|
|
168,832
|
|
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
|
|
PRELIMINARY RESULTS *
|
|
(In thousands) - unaudited
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
March 31,
2018
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(A)
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
584,488
|
|
|
$
|
641,947
|
|
|
Accounts receivable, net (B) |
|
484,204
|
|
|
214,885
|
|
|
Inventories
|
|
342,031
|
|
|
259,906
|
|
|
Other current assets (B) |
|
73,174
|
|
|
56,362
|
|
|
Total current assets
|
|
1,483,897
|
|
|
1,173,100
|
|
|
Non-current assets:
|
|
|
|
|
|
Property, plant and equipment, net
|
|
81,577
|
|
|
86,304
|
|
|
Goodwill
|
|
347,369
|
|
|
275,451
|
|
|
Other intangible assets, net
|
|
123,643
|
|
|
87,547
|
|
|
Other assets
|
|
129,287
|
|
|
120,755
|
|
|
Total assets
|
|
$
|
2,165,773
|
|
|
$
|
1,743,157
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
435,764
|
|
|
$
|
293,988
|
|
|
Accrued and other current liabilities (B) |
|
478,632
|
|
|
281,732
|
|
|
Total current liabilities
|
|
914,396
|
|
|
575,720
|
|
|
Non-current liabilities:
|
|
|
|
|
|
Income taxes payable
|
|
36,245
|
|
|
34,956
|
|
|
Other non-current liabilities
|
|
83,044
|
|
|
81,924
|
|
|
Total liabilities
|
|
1,033,685
|
|
|
692,600
|
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
Registered shares, CHF 0.25 par value:
|
|
30,148
|
|
|
30,148
|
|
|
Issued shares — 173,106 at December 31 and March 31, 2018
|
|
|
|
|
|
Additional shares that may be issued out of conditional capitals —
50,000 at December 31 and March 31, 2018
|
|
|
|
|
|
Additional shares that may be issued out of authorized capital —
34,621 at December 31, 2018 and none at March 31, 2018
|
|
|
|
|
|
Additional paid-in capital
|
|
42,250
|
|
|
47,234
|
|
|
Shares in treasury, at cost — 7,355 at December 31, 2018 and 8,527
at March 31, 2018
|
|
(164,932
|
)
|
|
(165,686
|
)
|
|
Retained earnings (B) |
|
1,322,915
|
|
|
1,232,316
|
|
|
Accumulated other comprehensive loss
|
|
(98,293
|
)
|
|
(93,455
|
)
|
|
Total shareholders’ equity
|
|
1,132,088
|
|
|
1,050,557
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
2,165,773
|
|
|
$
|
1,743,157
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
112,810
|
|
|
$
|
80,773
|
|
|
$
|
215,452
|
|
|
$
|
174,138
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
10,760
|
|
|
10,850
|
|
|
32,655
|
|
|
30,218
|
|
|
Amortization of intangible assets
|
|
|
6,895
|
|
|
4,415
|
|
|
17,236
|
|
|
10,653
|
|
|
Gain on investments in privately held companies
|
|
|
(207
|
)
|
|
(114
|
)
|
|
(589
|
)
|
|
(550
|
)
|
|
Share-based compensation expense
|
|
|
11,855
|
|
|
11,556
|
|
|
37,163
|
|
|
33,239
|
|
|
Deferred income taxes
|
|
|
93
|
|
|
18,661
|
|
|
(9,722
|
)
|
|
6,728
|
|
|
Change in fair value of contingent consideration for business
acquisition
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,908
|
)
|
|
Other
|
|
|
(453
|
)
|
|
(5
|
)
|
|
(378
|
)
|
|
7
|
|
|
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(25,469
|
)
|
|
(72,310
|
)
|
|
(158,944
|
)
|
|
(164,028
|
)
|
|
Inventories
|
|
|
15,238
|
|
|
52,386
|
|
|
(69,163
|
)
|
|
(5,692
|
)
|
|
Other assets
|
|
|
(42
|
)
|
|
(10,463
|
)
|
|
(11,098
|
)
|
|
(18,953
|
)
|
|
Accounts payable
|
|
|
(4,529
|
)
|
|
41,575
|
|
|
133,657
|
|
|
151,711
|
|
|
Accrued and other liabilities
|
|
|
49,272
|
|
|
51,260
|
|
|
87,174
|
|
|
43,521
|
|
|
Net cash provided by operating activities
|
|
|
176,223
|
|
|
188,584
|
|
|
273,443
|
|
|
256,084
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(9,936
|
)
|
|
(10,405
|
)
|
|
(28,304
|
)
|
|
(27,593
|
)
|
|
Investment in privately held companies
|
|
|
(2,036
|
)
|
|
(360
|
)
|
|
(2,542
|
)
|
|
(880
|
)
|
|
Acquisitions, net of cash acquired
|
|
|
—
|
|
|
(3,323
|
)
|
|
(133,908
|
)
|
|
(88,323
|
)
|
|
Proceeds from return of investment in privately held companies
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
237
|
|
|
Purchases of short-term investments
|
|
|
—
|
|
|
—
|
|
|
(1,505
|
)
|
|
(6,789
|
)
|
|
Sales of short-term investments
|
|
|
—
|
|
|
6,789
|
|
|
—
|
|
|
6,789
|
|
|
Purchases of trading investments
|
|
|
(613
|
)
|
|
(1,843
|
)
|
|
(4,335
|
)
|
|
(2,842
|
)
|
|
Proceeds from sales of trading investments
|
|
|
644
|
|
|
2,152
|
|
|
4,838
|
|
|
3,209
|
|
|
Net cash used in investing activities
|
|
|
(11,941
|
)
|
|
(6,990
|
)
|
|
(165,756
|
)
|
|
(116,192
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Payment of cash dividends
|
|
|
—
|
|
|
—
|
|
|
(113,971
|
)
|
|
(104,248
|
)
|
|
Payment of contingent consideration for business acquisition
|
|
|
—
|
|
|
(5,000
|
)
|
|
—
|
|
|
(5,000
|
)
|
|
Purchases of registered shares
|
|
|
(2,553
|
)
|
|
(9,726
|
)
|
|
(22,454
|
)
|
|
(20,408
|
)
|
|
Proceeds from exercises of stock options and purchase rights
|
|
|
128
|
|
|
947
|
|
|
10,135
|
|
|
30,947
|
|
|
Tax withholdings related to net share settlements of restricted
stock units
|
|
|
(1,731
|
)
|
|
(1,799
|
)
|
|
(29,111
|
)
|
|
(25,505
|
)
|
|
Net cash used in financing activities
|
|
|
(4,156
|
)
|
|
(15,578
|
)
|
|
(155,401
|
)
|
|
(124,214
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(588
|
)
|
|
24
|
|
|
(9,745
|
)
|
|
1,677
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
159,538
|
|
|
166,040
|
|
|
(57,459
|
)
|
|
17,355
|
|
|
Cash and cash equivalents, beginning of the period
|
|
|
424,950
|
|
|
398,848
|
|
|
641,947
|
|
|
547,533
|
|
|
Cash and cash equivalents, end of the period
|
|
|
$
|
584,488
|
|
|
$
|
564,888
|
|
|
$
|
584,488
|
|
|
$
|
564,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRELIMINARY RESULTS *
|
|
|
|
|
|
(In thousands) - unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales by product category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pointing Devices
|
|
$
|
149,123
|
|
|
$
|
140,983
|
|
|
6
|
%
|
|
405,250
|
|
|
386,700
|
|
|
5
|
%
|
|
Keyboards & Combos
|
|
144,169
|
|
|
126,372
|
|
|
14
|
|
|
404,263
|
|
|
361,685
|
|
|
12
|
|
|
PC Webcams
|
|
33,021
|
|
|
27,280
|
|
|
21
|
|
|
90,916
|
|
|
80,370
|
|
|
13
|
|
|
Tablet & Other Accessories
|
|
35,757
|
|
|
26,648
|
|
|
34
|
|
|
104,903
|
|
|
80,650
|
|
|
30
|
|
|
Video Collaboration
|
|
74,186
|
|
|
46,252
|
|
|
60
|
|
|
190,154
|
|
|
128,008
|
|
|
49
|
|
|
Mobile Speakers
|
|
96,263
|
|
|
147,377
|
|
|
(35
|
)
|
|
207,690
|
|
|
300,843
|
|
|
(31
|
)
|
|
Audio & Wearables
|
|
98,629
|
|
|
84,435
|
|
|
17
|
|
|
212,343
|
|
|
197,083
|
|
|
8
|
|
|
Gaming
|
|
213,663
|
|
|
173,802
|
|
|
23
|
|
|
510,481
|
|
|
365,232
|
|
|
40
|
|
|
Smart Home
|
|
19,577
|
|
|
38,692
|
|
|
(49
|
)
|
|
37,829
|
|
|
73,481
|
|
|
(49
|
)
|
|
Other (1)
|
|
—
|
|
|
180
|
|
|
(100
|
)
|
|
185
|
|
|
385
|
|
|
(52
|
)
|
|
Total net sales
|
|
$
|
864,388
|
|
|
$
|
812,021
|
|
|
6
|
%
|
|
$
|
2,164,014
|
|
|
$
|
1,974,437
|
|
|
10
|
%
|
|
(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)(C)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit - GAAP
|
|
|
$
|
323,982
|
|
|
$
|
275,601
|
|
|
$
|
804,036
|
|
|
$
|
697,006
|
|
|
Share-based compensation expense
|
|
|
953
|
|
|
960
|
|
|
2,874
|
|
|
2,762
|
|
|
Amortization of intangible assets and purchase accounting effect on
inventory
|
|
|
4,699
|
|
|
2,789
|
|
|
10,037
|
|
|
6,304
|
|
|
Gross profit - Non-GAAP
|
|
|
$
|
329,634
|
|
|
$
|
279,350
|
|
|
$
|
816,947
|
|
|
$
|
706,072
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin - GAAP
|
|
|
37.5
|
%
|
|
33.9
|
%
|
|
37.2
|
%
|
|
35.3
|
%
|
|
Gross margin - Non-GAAP
|
|
|
38.1
|
%
|
|
34.4
|
%
|
|
37.8
|
%
|
|
35.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - GAAP
|
|
|
$
|
200,598
|
|
|
$
|
175,338
|
|
|
$
|
583,069
|
|
|
$
|
506,380
|
|
|
Less: Share-based compensation expense
|
|
|
10,902
|
|
|
10,596
|
|
|
34,289
|
|
|
30,477
|
|
|
Less: Amortization of intangible assets and acquisition-related costs
|
|
|
3,539
|
|
|
2,496
|
|
|
10,377
|
|
|
6,377
|
|
|
Less: Change in fair value of contingent consideration for business
acquisition
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,908
|
)
|
|
Less: Restructuring charges (credits), net
|
|
|
(278
|
)
|
|
—
|
|
|
9,762
|
|
|
(116
|
)
|
|
Operating expenses - Non-GAAP
|
|
|
$
|
186,435
|
|
|
$
|
162,246
|
|
|
$
|
528,641
|
|
|
$
|
474,550
|
|
|
|
|
|
|
|
|
|
|
|
|
% of net sales - GAAP
|
|
|
23.2
|
%
|
|
21.6
|
%
|
|
26.9
|
%
|
|
25.6
|
%
|
|
% of net sales - Non - GAAP
|
|
|
21.6
|
%
|
|
20.0
|
%
|
|
24.4
|
%
|
|
24.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income - GAAP
|
|
|
$
|
123,384
|
|
|
$
|
100,263
|
|
|
$
|
220,967
|
|
|
$
|
190,626
|
|
|
Share-based compensation expense
|
|
|
11,855
|
|
|
11,556
|
|
|
37,163
|
|
|
33,239
|
|
|
Amortization of intangible assets
|
|
|
6,895
|
|
|
4,415
|
|
|
17,236
|
|
|
10,653
|
|
|
Purchase accounting effect on inventory
|
|
|
1,343
|
|
|
500
|
|
|
1,722
|
|
|
614
|
|
|
Acquisition-related costs
|
|
|
—
|
|
|
370
|
|
|
1,456
|
|
|
1,412
|
|
|
Change in fair value of contingent consideration for business
acquisition
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,908
|
)
|
|
Restructuring charges (credits), net
|
|
|
(278
|
)
|
|
—
|
|
|
9,762
|
|
|
(116
|
)
|
|
Operating income - Non - GAAP
|
|
|
$
|
143,199
|
|
|
$
|
117,104
|
|
|
$
|
288,306
|
|
|
$
|
231,520
|
|
|
|
|
|
|
|
|
|
|
|
|
% of net sales - GAAP
|
|
|
14.3
|
%
|
|
12.3
|
%
|
|
10.2
|
%
|
|
9.7
|
%
|
|
% of net sales - Non - GAAP
|
|
|
16.6
|
%
|
|
14.4
|
%
|
|
13.3
|
%
|
|
11.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net income - GAAP
|
|
|
$
|
112,810
|
|
|
$
|
80,773
|
|
|
$
|
215,452
|
|
|
$
|
174,138
|
|
|
Share-based compensation expense
|
|
|
11,855
|
|
|
11,556
|
|
|
37,163
|
|
|
33,239
|
|
|
Amortization of intangible assets
|
|
|
6,895
|
|
|
4,415
|
|
|
17,236
|
|
|
10,653
|
|
|
Purchase accounting effect on inventory
|
|
|
1,343
|
|
|
500
|
|
|
1,722
|
|
|
614
|
|
|
Acquisition-related costs
|
|
|
—
|
|
|
370
|
|
|
1,456
|
|
|
1,412
|
|
|
Change in fair value of contingent consideration for business
acquisition
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,908
|
)
|
|
Restructuring charges (credits), net
|
|
|
(278
|
)
|
|
—
|
|
|
9,762
|
|
|
(116
|
)
|
|
Loss (gain) on investments in privately held companies
|
|
|
(207
|
)
|
|
(114
|
)
|
|
(589
|
)
|
|
(550
|
)
|
|
Non-GAAP income tax adjustment
|
|
|
1,443
|
|
|
13,015
|
|
|
(7,782
|
)
|
|
2,033
|
|
|
Net income - Non - GAAP
|
|
|
$
|
133,861
|
|
|
$
|
110,515
|
|
|
$
|
274,420
|
|
|
$
|
216,515
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
Diluted - GAAP
|
|
|
$
|
0.67
|
|
|
$
|
0.48
|
|
|
$
|
1.28
|
|
|
$
|
1.03
|
|
|
Diluted - Non - GAAP
|
|
|
$
|
0.79
|
|
|
$
|
0.65
|
|
|
$
|
1.62
|
|
|
$
|
1.28
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute net income per share:
|
|
|
|
|
|
|
|
|
|
|
Diluted - GAAP and Non - GAAP
|
|
|
168,907
|
|
|
169,079
|
|
|
168,966
|
|
|
168,832
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Share-based Compensation Expense
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
$
|
953
|
|
|
$
|
960
|
|
|
$
|
2,874
|
|
|
$
|
2,762
|
|
|
Marketing and selling
|
|
4,600
|
|
|
4,624
|
|
|
15,250
|
|
|
13,348
|
|
|
Research and development
|
|
1,811
|
|
|
1,621
|
|
|
5,295
|
|
|
4,797
|
|
|
General and administrative
|
|
4,491
|
|
|
4,351
|
|
|
13,744
|
|
|
12,332
|
|
|
Total share-based compensation expense
|
|
11,855
|
|
|
11,556
|
|
|
37,163
|
|
|
33,239
|
|
|
Income tax provision (benefit)
|
|
(2,397
|
)
|
|
3,038
|
|
|
(14,576
|
)
|
|
(11,921
|
)
|
|
Total share-based compensation expense, net of income tax
provision (benefit)
|
|
$
|
9,458
|
|
|
$
|
14,594
|
|
|
$
|
22,587
|
|
|
$
|
21,318
|
|
* Note: These preliminary results for the three and nine months
ended December 31, 2018 are subject to adjustments, including subsequent
events that may occur through the date of filing our Quarterly Report on
Form 10-Q.
(A) Preliminary valuation from the business acquisition
The preliminary fair value of assets acquired and liabilities assumed
from the business acquisition in the second quarter of fiscal year 2019
is 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 the acquisition. As additional information becomes available,
such as the finalization of the estimated fair value of the assets
acquired and liabilities assumed, we may revise our preliminary or
interim estimated fair value of the assets acquired and liabilities
assumed 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, and may have a material impact over our
financial condition and results of operations.
(B) Adoption of ASC Topic 606
On April 1, 2018, we adopted the new revenue standards under Accounting
Standards Codification ("ASC") Topic 606. The adoption of Topic 606 did
not have an impact over the total cash flows from operating, investing,
or financing activities. The following tables summarize the impacts of
adopting Topic 606 on our condensed consolidated statements of
operations for the three and nine months ended as of December 31, 2018
and condensed consolidated balance sheets as of December 31, 2018
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2018
|
|
Nine Months Ended December 31, 2018
|
|
|
|
As Reported
Under Topic
606
|
|
If Reported
Under Topic
605
|
|
Effect of
Change
|
|
As Reported
Under Topic
606
|
|
If Reported
Under Topic
605
|
|
Effect of
Change
|
|
Net sales
|
|
|
$
|
864,388
|
|
|
$
|
853,563
|
|
|
$
|
10,825
|
|
|
$
|
2,164,014
|
|
|
$
|
2,158,267
|
|
|
$
|
5,747
|
|
|
|
|
|
As of December 31, 2018
|
|
|
As Reported Under
Topic 606
|
|
Balance Under
Topic 605
|
|
Effect of Change
|
|
Accounts receivable, net
|
|
484,204
|
|
|
345,055
|
|
|
139,149
|
|
|
Other current assets
|
|
73,174
|
|
|
65,758
|
|
|
7,416
|
|
|
Accrued and other current liabilities
|
|
478,632
|
|
|
326,932
|
|
|
151,700
|
|
|
Retained earnings
|
|
1,322,915
|
|
|
1,328,050
|
|
|
(5,135
|
)
|
C) 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
December 31, 2018 and previous periods, 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 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.
Loss (gain) on investments in privately held companies. We
recognized loss (gain) 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.
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)
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Logitech International
Ben Lu
Vice President, Investor
Relations - USA
(510) 713-5568
or
Krista Todd
Vice
President, Global Communications - USA
(510) 713-5834
or
Ben
Starkie
Corporate Communications - Europe
+41 (0) 79-292-3499
Source: Logitech International