Retail Sales Grow 9 Percent in Constant
Currency
Logitech International (SIX:LOGN) (Nasdaq:LOGI) today announced
financial results from continuing operations for the third quarter
of Fiscal Year 2016.
- Q3 sales were $621 million, up 3
percent compared to Q3 of the prior year. Q3 retail sales (total
sales excluding OEM) were $595 million and grew 9 percent
in constant currency.
- Q3 GAAP operating income was $69
million. Q3 GAAP earnings per share (EPS) were $0.41, compared
to $0.40 in the same quarter a year ago.
- Q3 non-GAAP operating income
was $74 million, with non-GAAP EPS of $0.41, compared
to $0.43 in the same quarter a year ago.
- Cash flow from operations in the
quarter, including Lifesize, was $166 million.
“We delivered a strong performance in Q3, evident across the
business,” said Bracken P. Darrell, Logitech president and
chief executive officer. “In this milestone quarter for the
company, a new Logitech emerged as we completed the exit of our OEM
business and separated Lifesize. Logitech’s future business remains
– and the future looks bright. We grew 9 percent in constant
currency and our operating income and operating cash flow were
strong. Combined, the Gaming, Mobile Speakers and Video
Collaboration categories grew 34 percent in constant currency and
each of them reached record high sales for a quarter. I’m delighted
to raise our outlook as we enter the last quarter of the year.”
Outlook
Logitech increased its profitability outlook for Fiscal
Year 2016 to approximately $170 million in non-GAAP operating
income from $150 million, which included Lifesize. The Company also
increased its outlook for retail sales to 7 to 9 percent growth in
constant currency, up from 7 percent.
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 2016 on Jan. 21,
2016 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.
Continuing Operations
Logitech separated its Lifesize division from the Company on
Dec. 28, 2015. The Company’s third quarter of Fiscal Year 2016
ended on Dec. 25, 2015, even though, for purposes of presentation,
the Company has indicated its third quarter periods as ending on
Dec. 31. Except as otherwise noted, all of the results reported in
this press release for both the third quarter of Fiscal Year 2016
and the third quarter of Fiscal Year 2015, as well as comparisons
between periods, are focused on results from continuing operations
and do not address the performance of Lifesize, which is now
reported in the Company’s financial statements under discontinued
operations or total Logitech including discontinued operations.
Logitech’s previous outlook of $150 million in non-GAAP operating
income included outlook for Lifesize results. Logitech’s new
outlook does not include outlook for Lifesize results. For more
information on the impact of the Lifesize separation on Logitech’s
historical results, please refer to the Financial Reporting section
of Logitech’s Financial History, available on
the Logitech corporate website
at http://ir.logitech.com.
Use of Non-GAAP Financial Information
To facilitate comparisons to Logitech’s historical
results, Logitech has included non-GAAP adjusted
measures, which exclude share-based compensation expense,
amortization of other intangible assets, restructuring charges
(credits), investment impairment (recovery), benefit from
(provision for) income taxes, one-time special charges and other
items detailed under “Supplemental Financial Information” after the
tables below. Logitech also presents percentage sales
growth in constant currency, a non-GAAP measure, 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 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 2016.
About Logitech
Logitech designs products that have an everyday place in
people's lives, connecting them to the digital experiences they
care about. Over 30 years ago Logitech started connecting
people through computers, and now it’s designing products that
bring people together through music, gaming, video and
computing. 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). 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: Logitech’s future and outlook for
Fiscal Year 2016 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; the demand
of our customers and our consumers for our products and our ability
to accurately forecast 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 in our new product categories or our
growth opportunities are more limited than we expect; if sales of
PC peripherals are less than we expect; the effect of pricing,
product, marketing and other initiatives by our competitors, and
our reaction to them, on our sales, gross margins and
profitability; if our products and marketing strategies fail to
separate our products from competitors’ products; if we do not
fully realize our goals to lower our costs and improve our
operating leverage; if there is a deterioration of business and
economic conditions in one or more of our sales regions or product
categories, or significant fluctuations in exchange rates. A
detailed discussion of these and other risks and uncertainties that
could cause actual results and events to differ materially from
such forward-looking statements is included in Logitech’s periodic
filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the fiscal year ended March 31, 2015
and our Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2015, 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.
2016 Logitech, Logicool, Logi and other Logitech marks are owned
by Logitech and may be registered. 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.
LOGITECH
INTERNATIONAL S.A. (In thousands, except per share amounts)
- Unaudited Three Months Ended Nine Months
Ended December 31 December 31 GAAP
CONSOLIDATED STATEMENTS OF OPERATIONS 2015 2014
2015 2014 Net sales $ 621,079 $ 604,322
$ 1,587,259 $ 1,562,625
Cost of goods sold 412,582
391,715 1,048,312 998,842
Gross profit 208,497 212,607
538,947 563,783
Operating expenses: Marketing and selling 87,295 87,486
241,924 246,103 Research and development 29,273 27,397 86,336
80,009 General and administrative 24,080 28,172 77,966 96,762
Restructuring charges (credits), net (666 ) —
14,018 (35 )
Total operating expenses
139,982 143,055 420,244
422,839
Operating income 68,515 69,552 118,703
140,944 Interest income, net 105 224 549 824 Other income
(expense), net 862 (2,688 ) (894 )
(3,702 )
Income from continuing operations before income
taxes 69,482 67,088 118,358 138,066 Provision for income taxes
1,442 670 7,006
8,455
Net income from continuing operations
68,040 66,418 111,352
129,611 Loss from discontinued operations, net of taxes
(2,954 ) (3,634 ) (20,732 ) (11,061 )
Net income $ 65,086 $ 62,784 $ 90,620 $
118,550 Net income (loss) per share - basic:
Continuing operations $ 0.42 $ 0.41 $ 0.68 $ 0.79 Discontinued
operations $ (0.02 ) $ (0.03 ) $ (0.13 ) $ (0.06 ) Net income per
share - basic $ 0.40 $ 0.38 $ 0.55 $ 0.73
Net income (loss) per share - diluted: Continuing
operations $ 0.41 $ 0.40 $ 0.67 $ 0.78 Discontinued operations $
(0.02 ) $ (0.02 ) $ (0.12 ) $ (0.07 ) Net income per share -
diluted $ 0.39 $ 0.38 $ 0.55 $ 0.71
Weighted average shares used to compute net income (loss)
per share: Basic 162,669 163,533 163,521 163,261 Diluted 165,168
166,321 165,951 166,076 Cash dividends
per share $ — $ 0.27 $ 0.53 $ 0.27
LOGITECH INTERNATIONAL
S.A. (In thousands) - Unaudited December
31
March
31,
CONSOLIDATED BALANCE SHEETS 2015 2015
Current assets: Cash and cash equivalents $ 505,082 $
533,380 Accounts receivable, net 284,089 167,196 Inventories
239,962 255,980 Other current assets 71,661 63,362 Current assets
held for sale 28,969 32,102 Total current
assets 1,129,763 1,052,020
Non-current assets: Property,
plant and equipment, net 99,145 86,478 Goodwill 218,198 218,213
Other assets 57,271 62,333 Long-term assets held for sale
5,506 7,636
Total assets $ 1,509,883 $
1,426,680
Current liabilities: Accounts payable $
363,781 $ 292,797 Accrued and other current liabilities 211,219
163,344 Current liabilities held for sale 34,642
38,766 Total current liabilities 609,642 494,907
Non-current liabilities: Income taxes payable 67,885 72,107
Other non-current liabilities 85,347 91,195 Long-term liabilities
held for sale 10,063 10,337
Total
liabilities 772,937 668,546
Total shareholders'
equity 736,946 758,134
Total liabilities and
shareholders' equity $ 1,509,883 $ 1,426,680
LOGITECH
INTERNATIONAL S.A. (In thousands) - Unaudited
Three Months Ended Nine Months Ended December
31 December 31 CONSOLIDATED STATEMENTS OF CASH FLOWS
* 2015 2014 2015 2014
Operating activities: Net income $ 65,086 $ 62,784 $ 90,620
$ 118,550 Adjustments to reconcile net income to net cash provided
by operating activities: Depreciation 14,647 9,867 36,884 29,559
Amortization of other intangible assets 310 2,266 1,536 7,624
Share-based compensation expense 6,618 7,047 19,875 20,046
Investment impairment (recovery) (4 ) 2,154 176 2,259 Gain on
disposal of property, plant and equipment — (34 ) — (44 ) Excess
tax benefits from share-based compensation (926 ) (1,867 ) (2,089 )
(2,533 ) Deferred income taxes 1,962 (793 ) 2,914 (3,151 ) Changes
in operating assets and liabilities, net of acquisitions: Accounts
receivable, net (20,411 ) (57,465 ) (115,814 ) (131,026 )
Inventories 73,508 (3,187 ) 18,066 (30,171 ) Other assets (818 )
(952 ) (9,329 ) (6,592 ) Accounts payable 18,402 51,198 68,763
111,310 Accrued and other liabilities 7,334
5,336 39,244 21,227
Net cash
provided by operating activities 165,708
76,354 150,846 137,058
Investing activities: Purchases of property, plant and
equipment (19,166 ) (9,813 ) (50,443 ) (34,777 ) Investment in
privately held companies (1,619 ) — (2,099 ) (2,550 ) Purchase of
trading investments (1,746 ) (1,233 ) (4,395 ) (3,463 ) Proceeds
from sales of trading investments 1,813 1,311
4,668 3,856
Net cash used in
investing activities (20,718 ) (9,735 )
(52,269 ) (36,934 )
Financing activities:
Payment of cash dividends — (43,767 ) (85,915 ) (43,767 )
Contingent consideration related to prior acquisition — — — (100 )
Purchases of treasury shares — — (48,802 ) — Repurchase of ESPP
awards — — — (1,078 ) Proceeds from sales of shares upon exercise
of options and purchase rights 1,459 933 12,562 2,466 Tax
withholdings related to net share settlements of restricted stock
units (1,855 ) (6,133 ) (5,357 ) (7,456 ) Excess tax benefits from
share-based compensation 926 1,867
2,089 2,533
Net cash provided by
(used in) financing activities 530 (47,100
) (125,423 ) (47,402 ) Effect of exchange rate
changes on cash and cash equivalents (2,307 ) (3,128
) (1,205 ) (5,521 ) Net increase (decrease) in cash
and cash equivalents 143,213 16,391
(28,051 ) 47,201 Cash and cash equivalents,
beginning of the period 365,774 500,222
537,038 469,412
Cash and cash
equivalents, end of the period $ 508,987 $ 516,613
$ 508,987 $ 516,613
The following
amounts reflected in the statements of cash flows are included in
discontinued operations: Depreciation $ 787 $ 630 $ 2,207 $
1,930 Amortization of other intangible assets $ 198 $ 2,100 $ 1,089
$ 7,027 Cash and cash equivalents, beginning of the period $ 4,639
$ 1,397 $ 3,659 $ 1,894 Cash and cash equivalents, end of the
period $ 3,905 $ 8,128 $ 3,905 $ 8,128
__________________
*statements of cash flows include
discontinued operations
LOGITECH INTERNATIONAL S.A.
(In thousands) - Unaudited NET SALES Three
Months Ended Nine Months Ended December 31
December 31 SUPPLEMENTAL FINANCIAL INFORMATION
2015 2014 Change 2015 2014
Change Net sales by channel: Retail $ 594,567
$ 574,025 4 % $ 1,516,218 $ 1,471,301 3 % OEM 26,512
30,297 (12 ) 71,041 91,324
(22 )
Total net sales $ 621,079 $
604,322 3 $ 1,587,259 $ 1,562,625 2
Net retail sales by product category(*): Mobile
Speakers $ 85,081 $ 62,264 37 $ 206,175 $ 139,631 48 Gaming 77,706
70,188 11 189,000 164,570 15 Video Collaboration 26,216 16,935 55
67,460 45,968 47 Tablet & Other Accessories 35,873
55,100 (35 ) 73,222
114,974 (36 )
Growth 224,876
204,487 10 535,857 465,143
15 Pointing Devices 139,711 141,789 (1 ) 381,364 382,524 —
Keyboards & Combos 116,531 114,051 2 324,458 325,217 — Audio-PC
& Wearables 57,300 56,741 1 149,341 162,480 (8 ) PC Webcams
29,648 31,709 (6 ) 74,689 77,454 (4 ) Home Control 25,684
25,116 2 48,548 56,224
(14 )
Profit Maximization 368,874
369,406 — 978,400
1,003,899 (3 )
Retail Strategic Sales
593,750 573,893 3 1,514,257
1,469,042 3
Non-Strategic 817
132 519 1,961 2,259
(13 )
Total net retail sales $ 594,567
$ 574,025 4 $ 1,516,218 $ 1,471,301 3
__________________
* Certain products within the retail
product categories as presented in prior periods have been
reclassified to conform to the current periods' presentation, with
no impact on previously reported total net retail sales.
LOGITECH INTERNATIONAL S.A. (In thousands, except per
share amounts) - Unaudited
GAAP TO NON-GAAP RECONCILIATION
(A)
Three Months Ended Nine Months Ended December
31 December 31 SUPPLEMENTAL FINANCIAL INFORMATION
2015 2014 2015 2014 Gross
profit - GAAP $ 208,497 $ 212,607 $ 538,947 $ 563,783
Share-based compensation expense 464 560
1,648 1,725
Gross profit -
Non-GAAP $ 208,961 $ 213,167 $ 540,595 $
565,508 Gross margin - GAAP 33.6 % 35.2 % 34.0 % 36.1
% Gross margin - Non-GAAP 33.6 % 35.3 % 34.1 % 36.2 %
Operating expenses - GAAP $ 139,982 $ 143,055 $ 420,244 $
422,839 Less: Share-based compensation expense 5,998 5,837 17,636
17,004 Less: Amortization of other intangible assets 112 166 447
597 Less: Restructuring charges (credits), net (666 ) — 14,018 (35
) Less: One time special charge (249 ) 2,528
4,121 19,524
Operating expenses -
Non-GAAP $ 134,787 $ 134,524 $ 384,022 $
385,749 % of net sales - GAAP 22.5 % 23.7 % 26.5 %
27.1 %
% of net sales - Non-GAAP
21.7 % 22.3 % 24.2 % 24.7 %
Operating income - GAAP $
68,515 $ 69,552 $ 118,703 $ 140,944 Share-based compensation
expense 6,462 6,397 19,284 18,729 Amortization of other intangible
assets 112 166 447 597 Restructuring charges (credits), net (666 )
— 14,018 (35 ) One time special charge (249 ) 2,528
4,121 19,524
Operating income - Non-GAAP
$ 74,174 $ 78,643 $ 156,573 $ 179,759
% of net sales - GAAP 11.0 % 11.5 % 7.5 % 9.0 %
% of net sales - Non-GAAP
11.9 % 13.0 % 9.9 % 11.5 %
Net income from continuing
operations $ 68,040 $ 66,418 $ 111,352 $ 129,611 Share-based
compensation expense 6,462 6,397 19,284 18,729 Amortization of
other intangible assets 112 166 447 597 Restructuring charges
(credits), net (666 ) — 14,018 (35 ) One time special charge (249 )
2,528 4,121 19,524 Investment impairment (recovery) (4 ) 2,154 176
2,259 Provision for income taxes (6,709 ) (6,063 )
(9,961 ) (6,934 )
Net income from continuing operations -
Non-GAAP
$ 66,986 $ 71,600 $ 139,437 $ 163,751
Net income from continuing operations
per share:
Diluted - GAAP $ 0.41 $ 0.40 $ 0.67 $ 0.78
Diluted - Non-GAAP
$ 0.41 $ 0.43 $ 0.84 $ 0.99
Shares used to compute net
income per share:
Diluted - GAAP and Non-GAAP
165,168 166,321 165,951 166,076
LOGITECH INTERNATIONAL S.A.
(In thousands) - Unaudited SHARED BASED
COMPENSATION EXPENSE Three Months Ended Nine Months
Ended December 31 December 31 SUPPLEMENTAL
FINANCIAL INFORMATION 2015 2014 2015
2014 Share-based Compensation Expense Cost of
goods sold $ 464 $ 560 $ 1,648 $ 1,725 Marketing and selling 2,484
2,552 6,545 6,659 Research and Development 846 765 2,174 1,780
General and administrative 2,668 2,520 8,917 8,565 Restructuring —
— 7 — Income tax benefit (1,446 ) (1,391 )
(2,479 ) (4,285 )
Total share-based compensation expense,
net of income taxes $ 5,016 $ 5,006 $ 16,812
$ 14,444 __________________
(A) Non-GAAP Financial Measures
To supplement our condensed consolidated financial results
prepared in accordance with GAAP, we use a number of financial
measures, both GAAP and non-GAAP, in analyzing and assessing our
overall business performance, for making operating decisions and
for forecasting and planning future periods. We consider the use of
non-GAAP financial measures helpful in assessing our current
financial performance, ongoing operations and prospects for the
future as well as understanding financial and business trends
relating to our financial condition and results of operations.
While we use non-GAAP financial measures as a tool to enhance
our understanding of certain aspects of our financial performance
and to provide incremental insight into the underlying factors and
trends affecting both our performance and our cash-generating
potential, we do not consider these measures to be a substitute
for, or superior to, the information provided by GAAP financial
measures. Consistent with this approach, we believe that disclosing
non-GAAP financial measures to the readers of our financial
statements provides useful supplemental data that, while not a
substitute for GAAP financial measures, can offer insight in the
review of our financial and operational performance and enables
investors to more fully understand trends in our current and future
performance. In assessing our business during the quarter ended
December 31, 2015, 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 other 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 operating
expenses and financial results from period to period.
Restructuring charges (credits). These
expenses are associated with re-aligning our business strategies
based on current economic conditions. We have undertaken several
restructurings 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 are not
reflective of our ongoing operating results in the current
period.
Investment impairment (recovery). We
incur investment impairment and recovery, primarily related to our
investments in various privately-held companies. The investment
impairment or recovery varies depending on the operational and
financial performance of the privately-held companies we invested
in. 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.
One-time special charges: costs
related to investigations and related expenses. These expenses
are forensic accounting, audit, consulting and legal fees related
to the Audit Committee’s investigation and the ongoing formal
investigation by and settlement discussion with the Securities and
Exchange Commission (SEC), together with accruals based on
settlement discussion with the SEC. We believe that providing the
non-GAAP measures excluding these charges, as well as the GAAP
measures, assists our investors because such charges are one-time
in nature and not reflective of our ongoing operations.
Other charges. We provided non-GAAP
measures excluding the effect of certain charges and income that
are not reflective of our ongoing operations.
In addition, Logitech presents percentage sales growth in
constant currency, a non-GAAP measure, 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. Sales for the three months ended December 31,
2015 compared to sales for the three months ended December 31, 2014
grew 8 percent in constant currency and grew 3 percent in U.S.
Dollars. Retail sales for the three months ended December 31, 2015
compared to retail sales for the three months ended December 31,
2014 grew 9 percent in constant currency and grew 4 percent in U.S.
Dollars. Sales for the combined Gaming, Mobile Speakers and Video
Collaboration categories for the three months ended December 31,
2015 compared to sales for those combined categories for the three
months ended December 31, 2014 grew 34 percent in constant currency
and grew 27 percent in U.S. Dollars.
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.
(LOGIIR)
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160120006579/en/
Logitech InternationalJoe GreenhalghVice President, Investor
Relations – USA510-713-4430orKrista ToddVice President, External
Communications – USA510-713-5834orBen StarkieCorporate
Communications – Europe+41-(0) 79-292-3499
Logitech (NASDAQ:LOGI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Logitech (NASDAQ:LOGI)
Historical Stock Chart
From Apr 2023 to Apr 2024