Logitech Delivers a Strong Start to Fiscal Year 2020 with Robust Sales and Profit Growth
- Business Wire
Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the first quarter of Fiscal Year 2020.
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Logitech delivers a strong start to Fiscal Year 2020 with robust sales and profit growth. (Graphic: Business Wire)
- Q1 sales were $644 million, up 6 percent in US dollars and 9 percent in constant currency, compared to Q1 of the prior year.
- Q1 GAAP operating income grew 46 percent to $47 million, compared to $32 million in the same quarter a year ago. Q1 GAAP earnings per share (EPS) grew 17 percent to $0.27, compared to $0.23 in the same quarter a year ago.
- Q1 non-GAAP operating income grew 11 percent to $67 million, compared to $61 million in the same quarter a year ago. Q1 non-GAAP EPS grew 15 percent to $0.39, compared to $0.34 in the same quarter a year ago.
- Cash flow from operations was $37 million, compared to $12 million in the same period a year ago.
"We had a strong start to the year thanks to the consistent execution of our strategy," said Bracken Darrell, Logitech president and chief executive officer. "Our portfolio of innovative products continues to deliver. We achieved double-digit growth across a number of categories, including Video Collaboration, and growth in all three regions. I'm excited about our business and the innovation ahead of us."
Outlook
Logitech confirmed its Fiscal Year 2020 outlook of mid to high single-digit sales growth in constant currency and $375 million to $385 million in non-GAAP operating income.
CFO Search
Logitech today confirmed that Nate Olmstead is now the Company's new chief financial officer, effective immediately. Nate joined Logitech in 2019 as vice president of business finance, with over 16 years of financial management experience, most recently as the vice president of finance for global operations at Hewlett Packard Enterprise.
"Nate has proven to be a good fit for us as a chief financial officer," said Bracken Darrell, Logitech president and chief executive officer. "He has shown strong strategic insight, financial acumen, and practical operational experience. I look forward to building on our terrific partnership for many years to come."
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 Q1 FY 2020 on Tuesday, July 23, 2019 at 8:30 a.m. Eastern Daylight Time and 2:30 p.m. Central European Summer Time. A live webcast of the call will be 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), loss (gain) on investments, 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 2020.
About Logitech
Logitech designs products that have an everyday place in people´s lives, connecting them to the digital experiences they care about. More than 35 years ago, Logitech started connecting people through computers, and now it's a multi-brand company designing products that bring people together through music, gaming, video and computing. Brands of Logitech include Logitech, Logitech G, ASTRO Gaming, Ultimate Ears, Jaybird and Blue Microphones. Founded in 1981, and headquartered in Lausanne, Switzerland, 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 U.S. federal securities laws, including, without limitation, statements regarding: our preliminary financial results for the three months ended June 30, 2019, innovation, secular trends, opportunities, and outlook for Fiscal Year 2020 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; 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; 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; changes in trade policies and agreements and the imposition of tariffs that affect our products or operations and our ability to mitigate; risks associated with acquisitions. 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, 2019, 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.
Logitech and other Logitech marks are trademarks or registered trademarks of Logitech Europe S.A and/or its affiliates in the U.S. 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 website at www.logitech.com.
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS *
(In thousands, except per share amounts) - unaudited
Three Months Ended
June 30,
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
2019
2018
Net sales
$
644,225
$
608,480
Cost of goods sold
401,978
382,171
Amortization of intangible assets and purchase accounting effect on inventory
3,271
2,372
Gross profit
238,976
223,937
Operating expenses:
Marketing and selling
123,033
114,584
Research and development
42,243
38,987
General and administrative
22,159
25,473
Amortization of intangible assets and acquisition-related costs
3,596
2,521
Restructuring charges, net
478
9,921
Total operating expenses
191,509
191,486
Operating income
47,467
32,451
Interest income
2,553
2,369
Other income (expense), net
1,861
(1,571
)
Income before income taxes
51,881
33,249
Provision for (benefit from) income taxes (A)
6,536
(5,217
)
Net income
$
45,345
$
38,466
Net income per share:
Basic
$
0.27
$
0.23
Diluted
$
0.27
$
0.23
Weighted average shares used to compute net income per share:
Basic
166,302
165,317
Diluted
168,797
168,756
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS *
(In thousands) - unaudited
June 30, 2019
March 31, 2019
CONDENSED CONSOLIDATED BALANCE SHEETS
Current assets:
Cash and cash equivalents
$
596,956
$
604,516
Accounts receivable, net
418,816
383,309
Inventories
297,007
293,495
Other current assets
68,927
69,116
Total current assets
1,381,706
1,350,436
Non-current assets:
Property, plant and equipment, net
76,713
78,552
Goodwill
343,702
343,684
Other intangible assets, net
112,132
118,999
Other assets (B)
173,448
132,453
Total assets
$
2,087,701
$
2,024,124
Current liabilities:
Accounts payable
$
338,748
$
283,922
Accrued and other current liabilities (B)
394,675
433,897
Total current liabilities
733,423
717,819
Non-current liabilities:
Income taxes payable
36,133
36,384
Other non-current liabilities (B)
120,111
93,582
Total liabilities
889,667
847,785
Shareholders' equity:
Registered shares, CHF 0.25 par value:
30,148
30,148
Issued shares — 173,106 at June 30 and March 31, 2019
Additional shares that may be issued out of conditional capitals — 50,000 at June 30 and March 31, 2019
Additional shares that may be issued out of authorized capital — 34,621 at June 30 and March 31, 2019
Additional paid-in capital
35,048
56,655
Shares in treasury, at cost — 6,642 at June 30, 2019 and 7,244 at March 31, 2019
(170,140
)
(169,802
)
Retained earnings
1,410,381
1,365,036
Accumulated other comprehensive loss
(107,403
)
(105,698
)
Total shareholders' equity
1,198,034
1,176,339
Total liabilities and shareholders' equity
$
2,087,701
$
2,024,124
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS *
(In thousands) - unaudited
Three Months Ended
June 30,
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
2019