Attached files
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| 8-K - FORM 8-K - LOGITECH INTERNATIONAL S.A. | d8k.htm |
Exhibit 99.1
| For Immediate Release |
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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 First Quarter Results for FY 2012
Company Takes $34M Q1 Charge for Planned Price Reduction on Logitech Revue
FREMONT, Calif., July 27, 2011 and MORGES, Switzerland, July 28, 2011 — Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the first quarter of Fiscal Year 2012.
Sales for Q1 FY 2012 were $480 million compared to $479 million in Q1 FY 2011. Excluding the favorable impact of exchange rate changes, sales declined by 4 percent year over year. The Company posted an operating loss of $45 million, compared to operating income of $12 million in the same quarter a year ago. Included in Logitech’s Q1 FY 2012 operating loss is a $34 million charge to cost of goods sold due to a planned price reduction on Logitech Revue with Google TV. The net loss for Q1 FY 2012 was $30 million ($0.17 per share) compared to net income of $20 million ($0.11 per share) in Q1 of FY 2011. Gross margin for Q1 FY 2012, reflecting the charge related to repricing of Logitech Revue, was 26.1 percent, down from 35.3 percent one year ago.
Logitech’s retail sales for Q1 FY 2012 were flat year over year, with an increase in Asia of 29 percent, an increase in the Americas of 1 percent, and a decrease in EMEA of 14 percent. OEM sales decreased by 16 percent. Sales for the LifeSize division grew 34 percent.
In Q1, Logitech achieved strong growth in Asia, driven primarily by China. Also notable for the first quarter was continued sales momentum by the LifeSize division and a positive initial reception of the Company’s new tablet accessories.
While Logitech is making progress in improving operations in the Company’s EMEA sales region, the Q1 performance reflects sustained weakness in the region. The Company also experienced minimal sales growth in its Americas region, primarily due to very weak sales in the Digital Home category. Logitech’s loss in Q1 was compounded by the significant impact of the decision to reduce the price of Logitech Revue from $249 to $99 during Q2. The action was taken with the goal of accelerating adoption of the Google TV platform by removing price as a barrier to broad consumer acceptance.
Logitech Announces Q1 FY 2012 Results – Page 2
In a separate announcement today, Logitech said that Chairman Guerrino De Luca has assumed the additional role of acting president and chief executive officer, succeeding departing CEO Gerald P. Quindlen.
“I resume my former role as CEO, on an acting basis, with unwavering commitment to Logitech and strong confidence in the Company’s future and growth potential,” said Guerrino De Luca. “My priorities will be to pursue our many opportunities with a strong sense of urgency and to renew the confidence in Logitech among all stakeholders.”
Outlook
For Fiscal Year 2012, ending March 31, 2012, Logitech has lowered its sales outlook from approximately $2.6 billion to approximately $2.5 billion. The Company has lowered its FY 2012 target for operating income from approximately $185 million to equal to or greater than FY 2011 operating income of $143 million.
Prepared Remarks Available Online
Logitech has made its prepared written remarks for the financial results teleconference available online on the Logitech corporate Web site at http://ir.logitech.com. The remarks are posted in the Calendar section on the Investor home page.
Financial Results Teleconference and Webcast
Logitech will hold a financial results teleconference on Thursday, July 28, 2011 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 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).
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This press release contains forward-looking statements, including the statements regarding anticipated sales and operating income for FY 2012 and the goal of the Logitech Revue price drop. 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; if our investment prioritization decisions do not result in the sales or profitability growth we expect, or when we expect 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; 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 the Logitech Revue price drop does not achieve its intended goal; 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 with touch interfaces, or if significant demand for peripherals to use with tablets and other mobile devices with touch interfaces does not develop; if there is a deterioration of business and economic conditions in one or more of our sales regions, 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, 2011 available at www.sec.gov. Logitech does not undertake to update any forward-looking statements, which speak as of their respective dates.
Logitech Announces Q1 FY 2012 Results – Page 3
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 June 30, | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS |
2011 | 2010 | ||||||
| Net sales |
$ | 480,441 | $ | 479,330 | ||||
| Cost of goods sold |
354,834 | 310,301 | ||||||
| Gross profit |
125,607 | 169,029 | ||||||
| % of net sales |
26.1 | % | 35.3 | % | ||||
| Operating expenses: |
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| Marketing and selling |
99,793 | 91,477 | ||||||
| Research and development |
39,981 | 38,389 | ||||||
| General and administrative |
30,865 | 27,360 | ||||||
| Total operating expenses |
170,639 | 157,226 | ||||||
| Operating income (loss) |
(45,032 | ) | 11,803 | |||||
| Interest income, net |
690 | 521 | ||||||
| Other income, net |
5,191 | 1,796 | ||||||
| Income (loss) before income taxes |
(39,151 | ) | 14,120 | |||||
| Benefit for income taxes |
(9,545 | ) | (5,402 | ) | ||||
| Net income (loss) |
$ | (29,606 | ) | $ | 19,522 | |||
| Shares used to compute net income (loss) per share: |
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| Basic |
179,331 | 175,492 | ||||||
| Diluted |
179,331 | 177,358 | ||||||
| Net income (loss) per share: |
||||||||
| Basic |
$ | (0.17 | ) | $ | 0.11 | |||
| Diluted |
$ | (0.17 | ) | $ | 0.11 | |||
LOGITECH INTERNATIONAL S.A.
(In thousands) - Unaudited
| CONSOLIDATED BALANCE SHEETS |
June 30, 2011 | March 31, 2011 | June 30, 2010 | |||||||||
| Current assets |
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| Cash and cash equivalents |
$ | 476,367 | $ | 477,931 | $ | 317,315 | ||||||
| Accounts receivable |
241,456 | 258,294 | 213,567 | |||||||||
| Inventories |
317,548 | 280,814 | 279,800 | |||||||||
| Other current assets |
90,117 | 59,347 | 63,031 | |||||||||
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| Total current assets |
1,125,488 | 1,076,386 | 873,713 | |||||||||
| Property, plant and equipment |
81,236 | 84,160 | 87,692 | |||||||||
| Intangible assets |
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| Goodwill |
547,184 | 547,184 | 553,462 | |||||||||
| Other intangible assets |
67,986 | 74,616 | 88,486 | |||||||||
| Other assets |
71,183 | 79,210 | 68,137 | |||||||||
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| Total assets |
$ | 1,893,077 | $ | 1,861,556 | $ | 1,671,490 | ||||||
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| Current liabilities |
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| Accounts payable |
$ | 328,305 | $ | 298,160 | $ | 316,881 | ||||||
| Accrued liabilities |
189,374 | 172,560 | 175,090 | |||||||||
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| Total current liabilities |
517,679 | 470,720 | 491,971 | |||||||||
| Other liabilities |
189,059 | 185,835 | 152,049 | |||||||||
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| Total liabilities |
706,738 | 656,555 | 644,020 | |||||||||
| Shareholders’ equity |
1,186,339 | 1,205,001 | 1,027,470 | |||||||||
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| Total liabilities and shareholders’ equity |
$ | 1,893,077 | $ | 1,861,556 | $ | 1,671,490 | ||||||
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LOGITECH INTERNATIONAL S.A.
(In thousands) - Unaudited
| Three Months Ended June 30, | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
2011 | 2010 | ||||||
| Cash flows from operating activities: |
||||||||
| Net income (loss) |
$ | (29,606 | ) | $ | 19,522 | |||
| Non-cash items included in net income (loss): |
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| Depreciation |
13,172 | 12,338 | ||||||
| Amortization of other intangible assets |
6,630 | 6,911 | ||||||
| Share-based compensation expense |
9,715 | 8,462 | ||||||
| Gain on disposal of fixed assets |
(4,904 | ) | (838 | ) | ||||
| Excess tax benefits from share-based compensation |
(24 | ) | (421 | ) | ||||
| Gain on cash surrender value of life insurance policies |
— | (440 | ) | |||||
| Deferred income taxes and other |
(13,701 | ) | (292 | ) | ||||
| Changes in assets and liabilities: |
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| Accounts receivable |
19,097 | (18,404 | ) | |||||
| Inventories |
(34,810 | ) | (66,019 | ) | ||||
| Other assets |
(6,015 | ) | (4,945 | ) | ||||
| Accounts payable |
29,346 | 60,525 | ||||||
| Accrued liabilities |
14,844 | (10,281 | ) | |||||
| Net cash provided by operating activities |
3,744 | 6,118 | ||||||
| Cash flows from investing activities: |
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| Purchases of property, plant and equipment |
(10,561 | ) | (11,918 | ) | ||||
| Purchases of trading investments |
(3,545 | ) | — | |||||
| Sales of trading investments |
3,500 | — | ||||||
| Proceeds from sale of property, plant and equipment |
4,904 | 2,688 | ||||||
| Net cash used in investing activities |
(5,702 | ) | (9,230 | ) | ||||
| Cash flows from financing activities: |
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| Proceeds from sale of shares upon exercise of options and purchase rights |
607 | 5,329 | ||||||
| Tax withholdings related to net share settlements of RSUs |
(176 | ) | (223 | ) | ||||
| Excess tax benefits from share-based compensation |
24 | 421 | ||||||
| Net cash provided by financing activities |
455 | 5,527 | ||||||
| Effect of exchange rate changes on cash and cash equivalents |
(61 | ) | (5,044 | ) | ||||
| Net decrease in cash and cash equivalents |
(1,564 | ) | (2,629 | ) | ||||
| Cash and cash equivalents at beginning of period |
477,931 | 319,944 | ||||||
| Cash and cash equivalents at end of period |
$ | 476,367 | $ | 317,315 | ||||
LOGITECH INTERNATIONAL S.A.
(In thousands, except per share amounts) - Unaudited
| Quarter Ended | ||||||||
| June 30, | ||||||||
| SUPPLEMENTAL FINANCIAL INFORMATION |
2011 | 2010 | ||||||
| Depreciation |
$ | 13,172 | $ | 12,338 | ||||
| Amortization of other intangible assets |
6,630 | 6,911 | ||||||
| Operating income (loss) |
(45,032 | ) | 11,803 | |||||
| Operating income before depreciation and amortization |
(25,230 | ) | 31,052 | |||||
| Capital expenditures |
10,561 | 11,918 | ||||||
| Net sales by channel: |
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| Retail |
$ | 394,776 | $ | 393,867 | ||||
| OEM |
49,178 | 58,335 | ||||||
| LifeSize |
36,487 | 27,128 | ||||||
| Total net sales |
$ | 480,441 | $ | 479,330 | ||||
| Net retail sales by product family: |
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| Retail - Pointing Devices |
$ | 132,062 | $ | 131,846 | ||||
| Retail - Keyboards & Desktops |
94,596 | 75,281 | ||||||
| Retail - Audio |
81,565 | 95,646 | ||||||
| Retail - Video |
49,845 | 47,057 | ||||||
| Retail - Gaming |
23,392 | 15,451 | ||||||
| Retail - Digital Home |
13,316 | 28,586 | ||||||
| Total net retail sales |
$ | 394,776 | $ | 393,867 | ||||
| Quarter Ended June 30, |
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| Share-based Compensation Expense |
2011 | 2010 | ||||||
| Cost of goods sold |
$ | 1,160 | $ | 991 | ||||
| Marketing and selling |
3,517 | 3,077 | ||||||
| Research and development |
1,808 | 1,776 | ||||||
| General and administrative |
3,230 | 2,618 | ||||||
| Income tax benefit |
(2,389 | ) | (1,895 | ) | ||||
| Total share-based compensation expense after income taxes |
$ | 7,326 | $ | 6,567 | ||||
| Share-based compensation expense net of tax, per share (diluted) |
$ | 0.04 | $ | 0.04 | ||||
Constant dollar sales (sales excluding impact of exchange rate changes)
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.