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| 8-K - FORM 8-K Q3 FY2011 PRESS RELEASE - LOGITECH INTERNATIONAL S.A. | q3fy118k.htm |
Exhibit 99.1
For Immediate Release
Editorial Contacts:
Joe Greenhalgh, Vice President, Investor Relations – USA (510) 713-4430
Nancy Morrison, Vice President, Corporate Communications – USA (510) 713-4948
Laura Scorza, Sr. Public Relations Manager – Europe +41-(0) 21-863-5336
Logitech Announces Third Quarter Financial Results for FY 2011
Company Delivers Record Revenue, Increases Full-Year Sales Outlook
FREMONT, Calif., Jan. 26, 2011 and MORGES, Switzerland, Jan. 27, 2011 — Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the third quarter of Fiscal Year 2011.
Sales for Q3 FY 2011 were $754 million, up 22 percent from $617 million in the same quarter last year. Excluding the unfavorable impact of exchange rate changes, sales increased by 26 percent. Operating income was $76 million, an increase of 30 percent compared to $58 million in the same quarter a year ago. Net income for Q3 was $65 million ($0.36 per share) compared to $57 million ($0.32 per share) in Q3 of FY 2010. Gross margin for Q3 FY 2011 was 36.0 percent, up from 33.9 percent one year ago.
Logitech’s retail sales for Q3 FY 2011 grew by 17 percent year over year, with an increase in Asia of 51 percent, an increase in the Americas of 31 percent, and a decrease in EMEA of 1 percent. OEM sales increased by 18 percent. The LifeSize division contributed 5 percentage points to the Company’s Q3 FY 2011 sales growth compared to the prior year.
“We are very pleased with our Q3 performance, which included our highest-ever quarterly sales and strong year-over-year growth in both sales and operating income,” said Gerald P. Quindlen, Logitech president and chief executive officer. “All of our retail product categories contributed to our sales growth, with double-digit increases in remote controls, pointing devices, video and gaming. OEM sales made a very solid contribution, and the momentum continued for our LifeSize division, which delivered the highest-ever quarterly sales in its history.
“A highlight of the quarter was the launch of Logitech Revue with Google TV and related peripherals. We are confident about the long-term potential of the Google TV platform and look forward to continued enhancements around the platform as we work with Google to push periodic over-the-air software updates.”
Outlook
For Fiscal Year 2011, ending March 31, 2011, Logitech has increased its sales outlook from the previous range of $2.35 to $2.4 billion to the new range of $2.4 to $2.42 billion. The target for operating income for the full year remains in the range of $170 to $180 million. Expected gross margin continues to be approximately 36 percent. The expected tax rate has been lowered to approximately 14 percent.
Earnings Teleconference and Webcast
Logitech will hold an earnings teleconference on Thursday, Jan. 27, 2011 at 8:30 a.m. Eastern Standard Time and 14:30 Central European 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 products that connect people to the digital experiences they care about. Spanning multiple computing, communication and entertainment platforms, Logitech’s combined hardware and software enable or enhance digital navigation, music and video entertainment, gaming, social networking, audio and video communication over the Internet, video security and home-entertainment control. Founded in 1981, Logitech International is a Swiss public company listed on the SIX Swiss Exchange (LOGN) and on the Nasdaq Global Select Market (LOGI).
# # #
This press release contains forward-looking statements, including the statements regarding anticipated sales, operating income, gross margin and tax rate for FY 2011, and the long-term potential and enhancements for the Google TV platform. 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: the demand of our customers and our consumers for our products and our ability to accurately forecast it; 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 consumer reaction to and demand for the Google TV platform and our products for it are less positive than we expect, or if Google fails to support or continue the Google TV platform; the sales mix among our lower- and higher-margin products and our geographic sales mix; if our product introductions and marketing activities do not result in the sales and profitability growth we expect, or when we expect it; if we fail to take advantage of trends in the consumer electronics and personal computers industries, including the growth of mobile computing devices such as smartphones and tablets, or if significant consumer demand for peripherals to use with tablets and other mobile devices does not develop; if there is a deterioration of business and economic conditions or significant fluctuations in currency exchange rates; 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, 2010, and our Quarterly Report on Form 10-Q for the quarters ended June 30, 2010 and September 30, 2010, 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)
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LOGITECH INTERNATIONAL S.A.
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||||||||
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(In thousands, except per share amounts) - Unaudited
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||||||||
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Quarter Ended December 31,
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||||||||
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CONSOLIDATED STATEMENTS OF INCOME
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2010
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2009
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||||||
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Net sales
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$ | 754,054 | $ | 617,101 | ||||
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Cost of goods sold
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482,881 | 408,137 | ||||||
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Gross profit
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271,173 | 208,964 | ||||||
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% of net sales
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36.0 | % | 33.9 | % | ||||
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Operating expenses:
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||||||||
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Marketing and selling
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124,914 | 87,322 | ||||||
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Research and development
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38,955 | 32,931 | ||||||
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General and administrative
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31,264 | 30,284 | ||||||
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Total operating expenses
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195,133 | 150,537 | ||||||
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Operating income
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76,040 | 58,427 | ||||||
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Interest income, net
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539 | 414 | ||||||
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Other income, net
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795 | 3,052 | ||||||
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Income before income taxes
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77,374 | 61,893 | ||||||
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Provision for income taxes
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12,372 | 4,807 | ||||||
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Net income
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$ | 65,002 | $ | 57,086 | ||||
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Shares used to compute net income per share:
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||||||||
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Basic
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177,233 | 175,426 | ||||||
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Diluted
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179,703 | 177,668 | ||||||
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Net income per share:
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||||||||
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Basic
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$ | 0.37 | $ | 0.33 | ||||
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Diluted
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$ | 0.36 | $ | 0.32 | ||||
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LOGITECH INTERNATIONAL S.A.
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(In thousands, except per share amounts) - Unaudited
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Nine Months Ended December 31,
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CONSOLIDATED STATEMENTS OF INCOME
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2010
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2009
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Net sales
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$ | 1,815,268 | $ | 1,441,304 | ||||
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Cost of goods sold
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1,158,132 | 1,002,730 | ||||||
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Gross profit
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657,136 | 438,574 | ||||||
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% of net sales
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36.2 | % | 30.4 | % | ||||
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Operating expenses:
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Marketing and selling
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313,803 | 215,095 | ||||||
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Research and development
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118,271 | 96,116 | ||||||
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General and administrative
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86,044 | 75,204 | ||||||
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Restructuring charges
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- | 1,494 | ||||||
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Total operating expenses
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518,118 | 387,909 | ||||||
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Operating income
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139,018 | 50,665 | ||||||
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Interest income, net
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1,695 | 1,645 | ||||||
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Other income, net
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797 | 2,416 | ||||||
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Income before income taxes
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141,510 | 54,726 | ||||||
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Provision for income taxes
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15,826 | 14,262 | ||||||
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Net income
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$ | 125,684 | $ | 40,464 | ||||
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Shares used to compute net income per share:
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||||||||
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Basic
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176,329 | 177,829 | ||||||
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Diluted
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178,306 | 179,866 | ||||||
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Net income per share:
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Basic
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$ | 0.71 | $ | 0.23 | ||||
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Diluted
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$ | 0.70 | $ | 0.22 | ||||
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LOGITECH INTERNATIONAL S.A.
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(In thousands) - Unaudited
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CONSOLIDATED BALANCE SHEETS
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December 31, 2010
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March 31, 2010
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December 31, 2009
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Current assets
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||||||||||||
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Cash and cash equivalents
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$ | 460,726 | $ | 319,944 | $ | 281,052 | ||||||
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Accounts receivable
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336,098 | 195,247 | 248,625 | |||||||||
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Inventories
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300,630 | 219,593 | 235,012 | |||||||||
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Other current assets
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58,469 | 58,877 | 71,803 | |||||||||
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Total current assets
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1,155,923 | 793,661 | 836,492 | |||||||||
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Property, plant and equipment
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85,833 | 91,229 | 92,452 | |||||||||
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Intangible assets
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||||||||||||
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Goodwill
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553,794 | 553,462 | 547,816 | |||||||||
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Other intangible assets
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81,251 | 95,396 | 102,307 | |||||||||
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Other assets
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71,212 | 65,930 | 66,798 | |||||||||
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Total assets
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1,948,013 | 1,599,678 | 1,645,865 | |||||||||
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Current liabilities
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||||||||||||
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Accounts payable
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386,485 | 257,955 | 316,651 | |||||||||
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Accrued liabilities
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213,170 | 182,336 | 192,234 | |||||||||
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Total current liabilities
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599,655 | 440,291 | 508,885 | |||||||||
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Other liabilities
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168,913 | 159,672 | 155,811 | |||||||||
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Total liabilities
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768,568 | 599,963 | 664,696 | |||||||||
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Shareholders' equity
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1,179,445 | 999,715 | 981,169 | |||||||||
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Total liabilities and shareholders' equity
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$ | 1,948,013 | $ | 1,599,678 | $ | 1,645,865 | ||||||
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(In thousands) - Unaudited
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Nine Months Ended December 31,
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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2010
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2009
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Cash flows from operating activities:
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Net income
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$ | 125,684 | $ | 40,464 | ||||
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Non-cash items included in net income:
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Depreciation
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35,665 | 41,852 | ||||||
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Amortization of other intangible assets
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21,165
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7,602
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||||||
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Share-based compensation expense
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23,976 | 17,249 | ||||||
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Gain on disposal of fixed assets
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(838 | ) | - | |||||
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Excess tax benefits from share-based compensation
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(2,735 | ) | (1,708 | ) | ||||
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Gain on cash surrender value of life insurance policies
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(901 | ) | (1,216 | ) | ||||
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Deferred income taxes and other
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(1,856 | ) | (23,414 | ) | ||||
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Changes in assets and liabilities:
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||||||||
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Accounts receivable
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(132,480 | ) | (22,470 | ) | ||||
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Inventories
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(82,636 | ) | 19,405 | |||||
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Other assets
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5,145 | 12,314 | ||||||
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Accounts payable
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128,586 | 151,042 | ||||||
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Accrued liabilities
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34,453 | 58,230 | ||||||
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Net cash provided by operating activities
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153,228 | 299,350 | ||||||
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Cash flows from investing activities:
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Purchases of property, plant and equipment
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(31,835 | ) | (26,438 | ) | ||||
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Purchase of trading investments
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(12,554 | ) | - | |||||
| Proceeds from cash surrender of life insurance policies | 11,313 | 813 | ||||||
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Acquisitions and investments, net of cash acquired
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(7,300 | ) | (388,807 | ) | ||||
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Proceeds from sale of property, plant and equipment
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2,688 | - | ||||||
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Other, net
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194 | - | ||||||
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Net cash used in investing activities
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(37,494 | ) | (414,432 | ) | ||||
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Cash flows from financing activities:
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||||||||
| Repayment of short- and long-term debt | - | (13,601 | ) | |||||
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Purchases of treasury shares
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- | (101,267 | ) | |||||
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Proceeds from sale of shares upon exercise of options and purchase rights
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28,336 | 15,979 | ||||||
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Excess tax benefits from share-based compensation
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2,735 | 1,708 | ||||||
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Net cash provided by (used in) financing activities
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31,071
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(97,181 | ) | |||||
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Effect of exchange rate changes on cash and cash equivalents
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(6,023 | ) | 556 | |||||
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Net increase (decrease) in cash and cash equivalents
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140,782 | (211,707 | ) | |||||
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Cash and cash equivalents at beginning of period
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319,944 | 492,759 | ||||||
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Cash and cash equivalents at end of period
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$ | 460,726 | $ | 281,052 | ||||
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(In thousands, except per share amounts) - Unaudited
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Quarter Ended
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Nine Months Ended
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December 31,
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December 31,
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SUPPLEMENTAL FINANCIAL INFORMATION
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2010
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2009
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2010
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2009
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Depreciation
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$ | 12,322 | $ | 15,795 | $ | 35,665 | $ | 41,852 | |||||||||
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Amortization of other intangibles
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7,138 | 2,999 | 21,165 | 7,602 | |||||||||||||
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Operating income
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76,040 | 58,427 | 139,018 | 50,665 | |||||||||||||
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Operating income before depreciation and amortization
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95,500 | 77,221 | 195,848 | 100,119 | |||||||||||||
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Capital expenditures
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6,416 |
8,294
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31,835 | 26,438 | |||||||||||||
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Net sales by channel:
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Retail
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$ | 658,392 | $ | 564,258 | $ | 1,541,978 | $ | 1,290,726 | |||||||||
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OEM
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59,563 | 50,502 | 178,749 | 148,237 | |||||||||||||
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LifeSize (1)
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36,099
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2,341 | 94,541 | 2,341 | |||||||||||||
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Total net sales
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$ | 754,054 | $ | 617,101 | $ | 1,815,268 | $ | 1,441,304 | |||||||||
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Net retail sales by product family:
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Retail - Pointing Devices
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$ | 186,507 | $ | 166,703 | $ | 472,222 | $ | 387,550 | |||||||||
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Retail - Keyboards & Desktops
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113,929 | 104,624 |
285,546
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242,539
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Retail - Audio
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155,239 | 147,945 | 370,848 | 341,066 | |||||||||||||
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Retail - Video
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77,445 | 67,321 | 193,293 | 168,398 | |||||||||||||
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Retail - Gaming
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46,634 | 36,359 | 81,460 | 82,001 | |||||||||||||
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Retail - Digital Home (2)
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78,638 | 41,306 | 138,609 | 69,172 | |||||||||||||
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Total net retail sales
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$ | 658,392 | $ | 564,258 | $ | 1,541,978 | $ | 1,290,726 | |||||||||
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Quarter Ended
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Nine Months Ended
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December 31,
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December 31,
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Share-based Compensation Expense
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2010 | 2009 | 2010 | 2009 | |||||||||||||
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Cost of goods sold
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$ | 1,000 | $ | 709 | $ | 2,910 | $ | 2,135 | |||||||||
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Marketing and selling
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2,115 | 2,018 | 8,283 | 5,931 | |||||||||||||
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Research and development
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1,842 |
1,139
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5,394 | 3,048 | |||||||||||||
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General and administrative
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2,299 | 2,217 |
7,389
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6,135 | |||||||||||||
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Income tax benefit
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(1,189 | ) | (3,324 | ) | (5,526 | ) | (4,157 | ) | |||||||||
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Total share-based compensation expense after income taxes
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$ | 6,067 | $ | 2,759 | $ | 18,450 | $ | 13,092 | |||||||||
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Share-based compensation expense net of tax, per share (diluted)
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$ | 0.03 | $ | 0.02 | $ | 0.10 | $ | 0.07 | |||||||||
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Constant dollar sales (sales excluding impact of exchange rate changes)
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We refer to our net sales excluding the impact of foreign currency exchange rates as constant dollar sales. Constant dollar sales are a non-GAAP financial measure, which is information derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. GAAP. Our management uses these non-GAAP measures in its financial and operational decision-making, and believes these non-GAAP measures, when considered in conjunction with the corresponding GAAP measures, facilitate a better understanding of changes in net sales. Constant dollar sales are calculated by translating prior period sales in each local currency at the current period's average exchange rate for that currency.
(1) The acquisition of LifeSize was completed on December 11, 2009. The results of operations of LifeSize are included in Logitech's consolidated financial statements from the date of acquisition.
(2) Digital Home is a new product family combining Harmony Remotes, Logitech Revue with Google TV and peripherals associated with the Google TV platform.