Q3 Retail Revenue Up 12%; Company Raises Sales
and Profit Outlook
Logitech International (SIX:LOGN) (Nasdaq:LOGI) today announced
better-than-expected preliminary financial results for the third
quarter of Fiscal Year 2017.
- Q3 retail sales grew 13 percent in
constant currency, reaching the highest level ever in the Company’s
history. Q3 retail sales grew 12 percent in USD.
- Q3 sales were $667 million, up 7
percent compared to Q3 of the prior year, which still included OEM
sales.
- Q3 GAAP operating income grew 41% to
$96 million, compared to $69 million a year ago. Q3 GAAP earnings
per share (EPS) were $0.59, compared to $0.41 a year ago.
- Q3 non-GAAP operating income grew 34%
to $99 million, compared to $74 million a year ago. Q3 non-GAAP EPS
grew 37% to $0.56, compared to $0.41 a year ago.
- Cash flow from operations for the first
nine months of Fiscal Year 2017 was $234 million, compared to $151
million for same period a year ago.
“This Q3, our results exceeded expectations and were
outstanding, with broad-based growth across all our regions and
almost all product categories,” said Bracken Darrell, Logitech
president and chief executive officer. “We delivered both the
highest retail revenue and the highest non-GAAP gross margin in
Logitech’s 35-year history. Our strategy is working, and we are
just at the beginning of our path to deliver what we’re capable of.
We have significantly raised our outlook on the back of this
performance.”
Outlook
Logitech raised its Fiscal Year 2017 outlook to 12 to 13 percent
retail sales growth in constant currency, up from its previous
range of 8 to 10 percent retail sales growth in constant currency.
The Company also increased its non-GAAP operating income outlook
for Fiscal Year 2017 to a range of $225 to $230 million, up from
its prior range of $195 million to $205 million.
Preliminary Statement
These preliminary results for the three and nine months ended
December 31, 2016 are subject to adjustments, including completion
of our evaluation of the changes in the fair value of contingent
consideration for our acquisition of Jaybird LLC and other
subsequent events that may occur through the date of filing our
Quarterly Report on Form 10-Q.
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 2017 on Weds., January 25, 2017 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.
Continued Operations
Logitech separated its Lifesize division from the Company on
Dec. 28, 2015. Except as otherwise noted, all of the results
reported in this press release 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. 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 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), gain (loss) on equity-method investment, investigation
and related expenses, 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 2017.
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: our strategy, our capabilities,
and our outlook for Fiscal Year 2017 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 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, 2016 and our Quarterly Report on
Form 10-Q for fiscal quarter ended September 30, 2016, 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.
2017 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.
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)
2016 2015 2016 2015 Net sales $
666,707 $ 621,079 $ 1,710,875 $ 1,587,259 Cost of goods sold
418,015 412,582 1,083,908 1,048,312 Amortization of intangible
assets and purchase accounting effect on inventory 1,929
— 4,705 — Gross
profit 246,763 208,497 622,262
538,947 Operating expenses: Marketing and
selling 102,036 87,295 279,700 241,924 Research and development
32,284 29,161 96,867 85,889 General and administrative 24,631
24,080 75,587 77,966 Amortization of intangible assets and
acquisition-related costs 1,494 112 4,535 447 Change in fair value
of contingent consideration for business acquisition (9,925 ) —
(9,925 ) — Restructuring charges (credits), net (33 )
(666 ) (44 ) 14,018 Total operating expenses
150,487 139,982 446,720
420,244 Operating income 96,276
68,515 175,542 118,703 Interest
income, net 202 105 263 549 Other income (expense), net
2,634 862 943 (894 )
Income before income taxes 99,112 69,482 176,748 118,358 Provision
for income taxes 1,647 1,442
10,297 7,006 Net income from continuing
operations 97,465 68,040 166,451
111,352 Loss from discontinued operations, net
of taxes — (2,954 ) —
(20,732 ) Net income $ 97,465 $ 65,086 $ 166,451
$ 90,620 Net income (loss) per share - basic:
Continuing operations $ 0.60 $ 0.42 $ 1.03 $ 0.68 Discontinued
operations — (0.02 ) —
(0.13 )
Net income per share – basic
$ 0.60 $ 0.40 $ 1.03 $ 0.55 Net
income (loss) per share - diluted: Continuing operations $ 0.59 $
0.41 $ 1.01 $ 0.67 Discontinued operations —
(0.02 ) — (0.12 ) Net income per share –
diluted $ 0.59 $ 0.39 $ 1.01 $ 0.55
Weighted average shares used to compute net income (loss)
per share: Basic 161,977 162,669 162,070 163,521 Diluted 165,901
165,168 165,211 165,951 Cash dividend per share $ — $ — $
0.57 $ 0.53
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS (In thousands) – unaudited
December 31,
March
31,
CONDENSED CONSOLIDATED BALANCE SHEETS (A) 2016
2016 Current assets: Cash and cash equivalents
$ 513,578 $ 519,195 Accounts receivable, net 277,677 142,778
Inventories 250,286 228,786 Other current assets 43,339
35,488 Total current assets 1,084,880 926,247
Non-current assets: Property, plant and equipment, net
84,194 92,860 Goodwill 249,721 218,224 Other intangible assets, net
50,313 — Other assets 85,728 86,816
Total assets $ 1,554,836 $ 1,324,147
Current liabilities: Accounts payable $ 358,196 $ 241,166
Accrued and other current liabilities 247,963
173,764 Total current liabilities 606,159 414,930
Non-current liabilities: Income taxes payable 55,573 59,734
Other non-current liabilities 91,709 89,535
Total liabilities 753,441 564,199
Shareholders’ equity: Registered shares, CHF 0.25 par value:
30,148 30,148 Issued and authorized shares —173,106 at December 31
and March 31, 2016 Conditionally authorized shares — 50,000 at
December 31 and March 31, 2016 Additional paid-in capital 16,336
6,616 Less shares in treasury, at cost — 11,298 at December 31,
2016 and 10,697 at March 31, 2016 (167,342 ) (128,407 ) Retained
earnings 1,034,685 963,576 Accumulated other comprehensive loss
(112,432 ) (111,985 )
Total shareholders’
equity 801,395 759,948
Total
liabilities and shareholders’ equity $ 1,554,836 $
1,324,147
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) 2016
2015 2016 2015 Cash flows
from operating activities: Net income $ 97,465 $ 65,086 $
166,451 $ 90,620 Non-cash items included in net income:
Depreciation 8,863 14,647 32,479 36,884 Amortization of intangible
assets 2,751 310 6,618 1,536 Loss (gain) on equity-method
investment (375 ) (4 ) (547 ) 176 Share-based compensation expense
9,387 6,618 26,354 19,875 Excess tax benefits from share-based
compensation (2,227 ) (926 ) (6,357 ) (2,089 ) Deferred income
taxes (88 ) 1,962 (473 ) 2,914 Change in fair value of contingent
consideration for business acquisition (9,925 ) — (9,925 ) —
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net (42,413 ) (20,411 ) (139,414 ) (115,814 )
Inventories 13,123 73,508 (15,194 ) 18,066 Other assets (1,608 )
(818 ) (6,346 ) (9,329 ) Accounts payable 25,419 18,402 109,095
68,763 Accrued and other liabilities 46,162
7,334 71,549 39,244
Net cash
provided by operating activities 146,534 165,708 234,290
150,846
Cash flows from investing activities: Purchases of
property, plant and equipment (8,614 ) (19,166 ) (23,372 ) (50,443
) Investment in privately held companies (160 ) (1,619 ) (640 )
(2,099 ) Acquisitions, net of cash acquired — — (66,987 ) — Release
of restricted cash — — 715 — Purchases of trading investments (597
) (1,746 ) (5,868 ) (4,395 ) Proceeds from sales of trading
investments 616 1,813 5,912
4,668
Net cash used in investing
activities (8,755 ) (20,718 ) (90,240 )
(52,269 )
Cash flows from financing activities:
Payment of cash dividends — — (93,093 ) (85,915 ) Purchases of
treasury shares (20,870 ) — (63,764 ) (48,802 ) Proceeds from sales
of shares upon exercise of options and purchase rights 5,871 1,459
20,355 12,562 Tax withholdings related to net share settlements of
restricted stock units (2,007 ) (1,855 ) (13,054 ) (5,357 ) Excess
tax benefits from share-based compensation 2,227
926 6,357 2,089
Net
cash provided by (used in) financing activities (14,779
) 530 (143,199 ) (125,423 ) Effect of
exchange rate changes on cash and cash equivalents (4,623 )
(2,307 ) (6,468 ) (1,205 )
Net
increase (decrease) in cash and cash equivalents 118,377
143,213 (5,617 ) (28,051
) Cash and cash equivalents, beginning of the period 395,201
365,774 519,195 537,038
Cash and cash equivalents, end of the period $ 513,578
$ 508,987 $ 513,578 $ 508,987
The following amounts reflected in the statements of cash flows
are included in discontinued operations: Depreciation $ — $ 787
$ — $ 2,207 Amortization of other intangible assets $ — $ 198 $ — $
1,089 Share-based compensation expense $ — $ 156 $ — $ 584
Purchases of property, plant and equipment $ — $ 681 $ — $ 1,431
Cash and cash equivalents, beginning of the period $ — $ 4,639 $ —
$ 3,659 Cash and cash equivalents, end of the period $ — $ 3,905 $
— $ 3,905
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS (In thousands) - unaudited
NET SALES Three Months
Ended Nine Months Ended December 31, December
31, SUPPLEMENTAL FINANCIAL INFORMATION 2016
2015 Change 2016 2015 Change
Net sales by channel: Retail $ 666,707 $ 594,567 12 %
$ 1,710,875 $ 1,516,218 13 % OEM — 26,512
(100 ) — 71,041 (100 )
Total
net sales $ 666,707 $ 621,079 7 $ 1,710,875
$ 1,587,259 8
Net retail sales by product
category: Mobile Speakers $ 106,578 $ 85,081 25 % $ 261,046 $
206,175 27 % Audio-PC & Wearables 67,225 57,300 17 186,058
149,341 25 Gaming 107,181 77,706 38 242,874 189,000 29 Video
Collaboration 35,807 26,216 37 88,298 67,460 31 Home Control 26,942
25,684 5 49,916 48,548 3 Pointing Devices 142,166 139,711 2 382,249
381,364 — Keyboards & Combos 125,289 116,531 8 359,824 324,458
11 Tablet & Other Accessories 24,852 35,873 (31 ) 59,351 73,222
(19 ) PC Webcams 30,503 29,648 3 80,072 74,689 7 Other (1)
164 817 (80 ) 1,187 1,961
(39 )
Total net retail sales $ 666,707 $
594,567 12 $ 1,710,875 $ 1,516,218 13
__________________
(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)(B) Three Months Ended Nine
Months Ended December 31, December 31,
SUPPLEMENTAL FINANCIAL INFORMATION 2016 2015
2016 2015
Gross profit – GAAP
$ 246,763 $ 208,497 $ 622,262 $ 538,947 Share-based compensation
expense 617 464 1,930 1,648 Amortization of intangible assets and
purchase accounting effect on inventory 1,929
— 4,705 —
Gross profit – Non-GAAP
$ 249,309 $ 208,961 $ 628,897 $ 540,595
Gross margin – GAAP 37.0 % 33.6 % 36.4 % 34.0 %
Gross margin – Non-GAAP
37.4 % 33.6 % 36.8 % 34.1 %
Operating expenses – GAAP
$ 150,487 $ 139,982 $ 446,720 $ 420,244 Less: Share-based
compensation expense 8,770 5,998 24,424 17,636 Less: Amortization
of intangible assets and acquisition-related costs 1,494 112 4,535
447 Less: Change in fair value of contingent consideration for
business acquisition (9,925 ) — (9,925 ) — Less: Restructuring
charges (credits), net (33 ) (666 ) (44 ) 14,018 Less:
Investigation and related expenses — (249 )
612 4,121
Operating expenses – Non-GAAP
$ 150,181 $ 134,787 $ 427,118 $ 384,022
% of net sales – GAAP 22.6 % 22.5 % 26.1 % 26.5 %
% of net sales – Non-GAAP
22.5 % 21.7 % 25.0 % 24.2 %
Operating income – GAAP $
96,276 $ 68,515 $ 175,542 $ 118,703 Share-based compensation
expense 9,387 6,462 26,354 19,284 Amortization of intangible assets
2,751 112 6,618 447 Purchase accounting effect on inventory 457 —
1,160 — Acquisition-related costs 215 — 1,462 — Change in fair
value of contingent consideration for business acquisition (9,925 )
— (9,925 ) — Restructuring charges (credits), net (33 ) (666 ) (44
) 14,018 Investigation and related expenses —
(249 ) 612 4,121
Operating income – Non-GAAP
$ 99,128 $ 74,174 $ 201,779 $ 156,573
% of net sales – GAAP 14.4 % 11.0 % 10.3 % 7.5 %
% of net sales – Non-GAAP
14.9 % 11.9 % 11.8 % 9.9 %
Net income from continuing
operations – GAAP $ 97,465 $ 68,040 $ 166,451 $ 111,352
Share-based compensation expense 9,387 6,462 26,354 19,284
Amortization of intangible assets 2,751 112 6,618 447 Purchase
accounting effect on inventory 457 — 1,160 — Acquisition-related
costs 215 — 1,462 — Change in fair value of contingent
consideration for business acquisition (9,925 ) — (9,925 ) —
Restructuring charges (credits), net (33 ) (666 ) (44 ) 14,018
Investigation and related expenses — (249 ) 612 4,121 Loss (gain)
on equity-method investment (375 ) (4 ) (547 ) 176 Non-GAAP income
tax adjustment (7,595 ) (6,709 ) (8,649 )
(9,961 )
Net income from continuing operations –
Non-GAAP
$ 92,347 $ 66,986 $ 183,492 $ 139,437
Net income from continuing operations per share:
Diluted – GAAP $ 0.59 $ 0.41 $ 1.01 $ 0.67
Diluted – Non-GAAP
$ 0.56 $ 0.41 $ 1.11 $ 0.84
Shares used to compute net
income per share:
Diluted – GAAP and Non-GAAP
165,901 165,168 165,211 165,951
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 2016 2015 2016
2015 Share-based Compensation Expense Cost of
goods sold $ 617 $ 464 $ 1,930 $ 1,648 Marketing and selling 4,006
2,484 10,687 6,545 Research and development 1,176 846 3,007 2,174
General and administrative 3,588 2,668 10,730 8,917 Restructuring
— — — 7
Total share-based compensation expense 9,387 6,462 26,354
19,291 Income tax benefit (2,391 ) (1,446 )
(6,092 ) (2,479 )
Total share-based compensation expense,
net of income tax $ 6,996 $ 5,016 $ 20,262
$ 16,812
Note: These preliminary results for the three and nine months
ended December 31, 2016 are subject to adjustments, including
completion of our evaluation of the changes in the fair value of
contingent consideration for our acquisition of Jaybird LLC and
other subsequent events that may occur through the date of
filing our Quarterly Report on Form 10-Q.
(A) Preliminary valuation from the business acquisitions
The preliminary purchase price allocations from the business
acquisitions during the current periods are 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
acquisitions. As additional information becomes available, such as
finalization of the estimated fair value of the assets acquired and
liabilities assumed and the fair value of contingent consideration,
we may revise our preliminary or interim purchase price allocations
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 as we finalize the fair values of the
tangible and intangible assets acquired and liabilities assumed,
and may have a material impact over the results of operations.
(B) 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
June 30, 2016, 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 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.
Gain (loss) on equity-method
investment. We recognized gain (loss) related 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.
Investigation and related expenses.
These expenses are forensic accounting, audit, consulting and legal
fees related to the Audit Committee’s investigation and the formal
investigation by and settlement with the Securities and Exchange
Commission (SEC), together with accruals based on settlement 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 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 InternationalBen LuVice President, Investor Relations -
USA510-713-5568orKrista ToddVice President, External Communications
- USA510-713-5834orBen StarkieCorporate Communications - Europe+41
(0) 79-292-3499
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