EX-99.1 3 exhibit99_1.htm FORM 8-K EXHIBIT 99.1 exhibit99_1.htm
Exhibit 99.1
 
For Immediate Release                                                                                                                              Logitech Logo

Editorial Contacts:
Joe Greenhalgh, Vice President, Investor Relations – USA (510) 713-4430
Nancy Morrison, Vice President, Corporate Communications – USA (510) 713-4948
Laura Scorza, Public Relations Manager – Europe +41-(0) 21-863-5336


Logitech Announces Fourth Quarter and Full-Year Financial Results for FY 2010

Company Delivers 29% Revenue Growth in Q4

 
FREMONT, Calif., April 28, 2010 and ROMANEL-SUR-MORGES, Switzerland, April 29, 2010 — Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the fourth quarter and full year of Fiscal Year 2010.
 
Sales for Q4 FY 2010 were $525 million, up 29 percent from $408 million in the same quarter last year. Excluding the favorable impact of exchange rate changes, sales increased by 25 percent. Operating income was $28 million, compared to an operating loss of $43 million in the same quarter a year ago. Net income for Q4 was $24 million ($0.14 per share) compared to a net loss one year ago of $35 million ($0.20 per share). Gross margin for Q4 FY 2010 was 35.8 percent, up from 25.0 percent in Q4 FY 2009.
 
Logitech’s retail sales for the fourth quarter of FY 2010 grew by 27 percent year over year, with sales up by 54 percent in the Americas, 15 percent in EMEA, and 10 percent in Asia. OEM sales grew by 1 percent.
 
“After a challenging start to the year, we ended Fiscal Year 2010 with very strong sales and gross margin performance,” said Gerald P. Quindlen, Logitech president and chief executive officer. “I’m very pleased that in Q4 we delivered strong sell-through growth and achieved double-digit sales growth in our three retail regions, as well as double-digit sales growth across all of our retail product categories. And we delivered our highest Q4 gross margin ever.
 
“As we begin FY 2011, our focus shifts from emerging stronger from the downturn to returning to driving strong top-line and profitability growth by executing on our long-term strategy. We enter the new fiscal year with an improving economic outlook, a strong balance sheet and accelerating sales momentum in all retail sales regions. We’re well positioned for growth across our product portfolio. Most notably, we see continued strong double-digit sales growth in the digital home with our line of Harmony remotes, which now includes innovative new models at lower price points for a broader range of households. We also expect accelerating sales growth in FY 11 from our LifeSize video communications division, which in Q4 had its highest billings ever.”
 
Full-Year Financial Results
For the full fiscal year, sales were $2.0 billion, down from $2.2 billion in FY 2009. Operating income was $78 million, down from $110 million a year ago. Net income was $65 million ($0.36 per share), compared to $107 million ($0.59 per share) in the prior year. Gross margin for FY 2010 was 31.9 percent compared to 31.3 percent in FY 2009.
 
Outlook
For Fiscal Year 2011, ending March 31, 2011, Logitech targets sales of approximately $2.3 billion and gross margin of approximately 34 percent. The Company expects operating income to approximately double year over year. The tax rate for FY 2011 is expected to be approximately 18 percent.
 
For the first quarter of Fiscal Year 2011, ending June 30, 2010, Logitech targets sales in the range of $450 million to $465 million and gross margin of approximately 34 percent. The Company expects operating income for Q1 FY 2011 to be approximately $5 million.
 
Earnings Teleconference and Webcast
Logitech will hold an earnings teleconference on Thursday, April 29, 2010 at 8:30 a.m. Eastern Daylight Time and 14:30 Central European Summer Time. A live webcast of the call, along with presentation slides, will be available on the Logitech corporate Web site at http://ir.logitech.com.
 
About Logitech
 
Logitech is a world leader in personal peripherals, driving innovation in PC navigation, Internet communications, digital music, home-entertainment control, gaming and wireless devices. Founded in 1981, Logitech International is a Swiss public company listed on the SIX Swiss Exchange (LOGN) and on the Nasdaq Global Select Market (LOGI).
# # #
This press release contains forward-looking statements, including the statements regarding anticipated sales, operating income and gross margin for Q1 FY 2011, anticipated sales, operating income, gross margin and tax rate for FY 2011, returning to strong top-line and profitability growth, executing on our long-term strategy, being positioned for growth across our product portfolio, the rate of sales momentum in our retail sales regions and for our LifeSize video communications division, and anticipated strong double-digit sales growth in Harmony remotes. The forward-looking statements in this release involve risks and uncertainties that could cause Logitech’s actual results to differ materially from that anticipated in these forward-looking statements. Factors that could cause actual results to differ materially include: our inability to predict the timing and strength of the improvement in our business, operating results and financial condition; the demand of our customers and our consumers for our products and our ability to accurately forecast it; consumer reaction to our new products; 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 we fail to take advantage of long-term trends in the consumer electronics and personal computers industries; if we fail to successfully innovate in our current and emerging product categories and identify new feature or product opportunities; the sales mix among our lower- and higher-margin products and our geographic sales mix; if we fail to execute upon our long-term strategic plans and opportunities; our product introductions and marketing activities not resulting in the product or category growth we expect, or when we expect it; the retention of employees of LifeSize and the ability of Logitech to successfully integrate LifeSize’s market opportunities, technology, personnel and operations and to achieve anticipated results; competition in the video conferencing and communications industry, including from companies with significantly greater resources, sales and marketing organizations, installed base and name recognition; as well as those additional factors set forth 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, 2009, and our subsequent Quarterly Reports on Form 10-Q available at www.sec.gov. Logitech does not undertake to update any forward-looking statements.

Logitech, the Logitech logo, and other Logitech marks are registered in Switzerland and other countries. All other trademarks are the property of their respective owners. For more information about Logitech and its products, visit the company’s Web site at www.logitech.com.

(LOGI – IR)
 


 
 

 

LOGITECH INTERNATIONAL S.A.
           
             
(In thousands, except per share amounts) - Unaudited
           
             
             
   
Quarter Ended March 31,
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
2010
   
2009
 
             
Net sales
  $ 525,444     $ 407,948  
Cost of goods sold
    337,122       305,864  
Gross profit
    188,322       102,084  
% of net sales
    35.8 %     25.0 %
                 
Operating expenses:
               
Marketing and selling
    89,693       71,101  
Research and development
    39,697       29,744  
General and administrative
    30,943       23,901  
Restructuring charges
    290       20,547  
Total operating expenses
    160,623       145,293  
                 
Operating income (loss)
    27,699       (43,209 )
                 
Interest income, net
    475       1,089  
Other income, net
    723       702  
                 
Income (loss) before income taxes
    28,897       (41,418 )
Provision (benefit) for income taxes
    4,404       (6,340 )
                 
Net income (loss)
  $ 24,493     $ (35,078 )
                 
Shares used to compute net income per share:
               
Basic
    175,738       179,065  
Diluted
    177,967       179,065  
Net income (loss) per share:
               
Basic
  $ 0.14     $ (0.20 )
Diluted
  $ 0.14     $ (0.20 )


 
 

 

LOGITECH INTERNATIONAL S.A.
           
             
(In thousands, except per share amounts) - Unaudited
           
             
             
   
Twelve Months Ended March 31,
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
2010
   
2009
 
             
Net sales
  $ 1,966,748     $ 2,208,832  
Cost of goods sold
    1,339,852       1,517,606  
Gross profit
    626,896       691,226  
% of net sales
    31.9 %     31.3 %
                 
Operating expenses:
               
Marketing and selling
    304,788       319,167  
Research and development
    135,813       128,755  
General and administrative
    106,147       113,103  
Restructuring charges
    1,784       20,547  
Total operating expenses
    548,532       581,572  
                 
Operating income
    78,364       109,654  
                 
Interest income, net
    2,120       8,628  
Other income, net
    3,139       8,511  
                 
Income before income taxes
    83,623       126,793  
Provision for income taxes
    18,666       19,761  
                 
Net income
  $ 64,957     $ 107,032  
                 
Shares used to compute net income per share:
               
Basic
    177,279       178,811  
Diluted
    179,340       182,911  
Net income per share:
               
Basic
  $ 0.37     $ 0.60  
Diluted
  $ 0.36     $ 0.59  
                 
                 
 
 


 
 

 

LOGITECH INTERNATIONAL S.A.
           
             
(In thousands) - Unaudited
           
             
             
CONSOLIDATED BALANCE SHEETS
 
March 31, 2010
   
March 31, 2009
 
             
Current assets
           
Cash and cash equivalents
  $ 319,944     $ 492,759  
Short term investments
    -       1,637  
Accounts receivable
    195,247       213,929  
Inventories
    219,593       233,467  
Other current assets
    58,877       56,884  
Total current assets
    793,661       998,676  
Property, plant and equipment
    91,229       104,132  
Intangible assets
               
Goodwill
    553,462       242,909  
Other intangible assets
    95,396       32,109  
Other assets
    65,930       43,704  
Total assets
  $ 1,599,678     $ 1,421,530  
                 
Current liabilities
               
Accounts payable
  $ 257,955     $ 157,798  
Accrued liabilities
    182,336       131,496  
Total current liabilities
    440,291       289,294  
Other liabilities
    159,672       134,528  
Total liabilities
    599,963       423,822  
                 
Shareholders' equity
    999,715       997,708  
                 
Total liabilities and shareholders' equity
  $ 1,599,678     $ 1,421,530  


 
 

 

LOGITECH INTERNATIONAL S.A.
           
             
(In thousands) - Unaudited
           
             
             
   
Twelve Months Ended March 31,
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
2010
   
2009
 
             
Cash flows from operating activities:
           
Net income
  $ 64,957     $ 107,032  
Non-cash items included in net income:
               
Depreciation
    56,380       44,021  
Amortization of other intangible assets
    14,515       8,166  
Share-based compensation expense related to options,
               
  restricted stock units and purchase rights
    25,807       24,503  
Write-down of investments
    643       2,727  
Excess tax benefits from share-based compensation
    (2,814 )     (6,592 )
Loss (gain) on cash surrender value of life insurance policies
    (1,223 )     2,868  
In-process research and development
    -       1,000  
Deferred income taxes and other
    (18,458 )     (10,387 )
Changes in assets and liabilities:
               
Accounts receivable
    28,489       152,496  
Inventories
    30,942       (9,078 )
Other assets
    15,601       14,615  
Accounts payable
    94,155       (123,802 )
Accrued liabilities
    56,265       (6,982 )
Net cash provided by operating activities
    365,259       200,587  
                 
Cash flows from investing activities:
               
Purchases of property, plant and equipment
    (39,834 )     (48,263 )
Proceeds from cash surrender of life insurance policies
    813       -  
Acquisitions and investments, net of cash acquired
    (388,809 )     (64,430 )
Premiums paid on cash surrender value life insurance policies
    -       (427 )
Net cash used in investing activities
    (427,830 )     (113,120 )
                 
Cash flows from financing activities:
               
Repayments of debt
    (13,630 )     -  
Purchases of treasury shares
    (126,301 )     (78,870 )
Proceeds from sale of shares upon exercise of options and purchase rights
    28,917       31,119  
Excess tax benefits from share-based compensation
    2,814       6,592  
Net cash used in financing activities
    (108,200 )     (41,159 )
                 
Effect of exchange rate changes on cash and cash equivalents
    (2,044 )     (35,901 )
Net increase (decrease) in cash and cash equivalents
    (172,815 )     10,407  
Cash and cash equivalents at beginning of period
    492,759       482,352  
Cash and cash equivalents at end of period
  $ 319,944     $ 492,759  



 
 

 

LOGITECH INTERNATIONAL S.A.
                       
                         
(In thousands, except per share amounts) - Unaudited
                       
                         
   
Quarter Ended
   
Twelve Months Ended
 
   
March 31,
   
March 31,
 
SUPPLEMENTAL FINANCIAL INFORMATION
 
2010
   
2009
   
2010
   
2009
 
                         
Depreciation
  $ 14,528     $ 10,171     $ 56,380     $ 44,021  
Amortization of other acquisition-related intangibles
    6,913       2,358     $ 14,515     $ 8,166  
Operating income (loss)
    27,699       (43,209 )     78,364       109,654  
Operating income (loss) before depreciation and amortization
    49,140       (30,680 )     149,259       161,841  
Capital expenditures
    13,396       9,632       39,834       48,263  
                                 
                                 
Net sales by channel:
                               
Retail
  $ 454,426     $ 358,421     $ 1,745,152     $ 1,887,343  
OEM
    50,127       49,527       198,364       321,489  
LifeSize
    20,891       -       23,232       -  
Total net sales
  $ 525,444     $ 407,948     $ 1,966,748     $ 2,208,832  
                                 
                                 
Net retail sales by product family:
                               
Retail - Pointing Devices
  $ 140,687     $ 106,271     $ 528,236     $ 579,775  
Retail - Keyboards & Desktops
    86,499       72,485       329,038       384,809  
Retail - Audio
    113,894       92,901       454,957       445,362  
Retail - Video
    59,943       49,707       228,344       248,339  
Retail - Gaming
    25,594       19,404       107,595       127,052  
Retail - Remotes
    27,809       17,653       96,982       102,006  
Total net retail sales
  $ 454,426     $ 358,421     $ 1,745,152     $ 1,887,343  
                                 
                                 
   
Quarter Ended
   
Twelve Months Ended
 
Share-based Compensation Expense for Employee Stock
 
March 31,
   
March 31,
 
Options, Restricted Stock Units and Employee Stock Purchases
    2010       2009       2010       2009  
                                 
Cost of goods sold
  $ 938     $ 875     $ 3,073     $ 3,163  
Marketing and selling
    3,270       2,081       9,201       7,989  
Research and development
    1,854       1,222       4,902       4,488  
General and administration
    2,496       2,373       8,631       8,863  
Income tax expense (benefit)
    (1,611 )     1,482       (5,768 )     (3,102 )
Total share-based compensation expense after income taxes
  $ 6,947     $ 8,033     $ 20,039     $ 21,401  
                                 
Share-based compensation expense for employee stock options,
                               
restricted stock units, employee stock purchases, net of tax, per share (diluted)
  $ 0.04     $ 0.04     $ 0.11     $ 0.12  
                                 
                                 
Constant Currency
                               
The total Logitech net sales figure for Q4 FY 2010 excluding the impact of exchange rate changes is a non-GAAP financial
 
measure. It is calculated by translating prior period local currency results at the current period's average exchange rates.