Logitech International (SWX:LOGN) (Nasdaq:LOGI) today announced
final financial results for the second quarter of Fiscal Year 2008,
updating the Company´s Oct. 17, 2007 announcement.
Consistent with the range in the previous announcement, the
Company recorded an impairment loss of $67.4 million on the value of
its short-term investment portfolio as of September 30, 2007. As a
result, net income for Q2 FY 2008 was $12 million ($0.06 per share).
Excluding this charge, non-GAAP net income for the quarter was $79
million ($0.42 per share), compared to $49 million ($0.26 per share)
in Q2 FY 2007.
Subsequent to quarter end, the Company sold, at par, fifty per
cent of each of the securities in the portfolio. As a result, the
Company will recover half of the loss and will record it as a gain of
$33.7 million in the Q3 FY 2008 income statement under Other Income.
The sale was part of a confidential settlement agreement and the sale
price is not necessarily indicative of current market prices or fair
value for the securities.
About Logitech
Logitech is a world leader in personal peripherals, driving
innovation in PC navigation, Internet communications, digital music,
home-entertainment control, gaming and wireless devices. Founded in
1981, Logitech International is a Swiss public company traded on the
SWX Swiss Exchange (LOGN) and on the Nasdaq Global Select Market
(LOGI).
Logitech, the Logitech logo, and other Logitech marks are
registered in the United States 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.
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LOGITECH INTERNATIONAL S.A.
(In thousands, except per share amounts) - Unaudited
Quarter Ended September 30,
CONSOLIDATED STATEMENTS OF INCOME 2007 2006
------------------------------------------ ------------- -------------
Net sales $ 595,490 $ 502,041
Cost of goods sold 379,536 329,076
------------- -------------
Gross profit 215,954 172,965
------------- -------------
% of net sales 36.3% 34.5%
Operating expenses:
Marketing and selling 76,463 70,445
Research and development 30,939 26,118
General and administrative 28,149 24,225
------------- -------------
Total operating expenses 135,551 120,788
------------- -------------
Operating income 80,403 52,177
Interest income, net 3,925 1,930
Other income (expense), net (65,023) 1,107
------------- -------------
Income before income taxes 19,305 55,214
Provision for income taxes 7,743 6,010
------------- -------------
Net income $ 11,562 $ 49,204
============= =============
Shares used to compute net income per
share:
Basic 181,459 182,502
Diluted 188,293 190,276
Net income per share:
Basic $ 0.06 $ 0.27
Diluted $ 0.06 $ 0.26
Other income (expense), net for the quarter ended September 30, 2007
includes an impairment loss of $67.4 million related to the decline
in fair value of short-term investments.
Subsequent to the balance sheet date, the Company sold, at par, 50% of
each of its short-term investments and as a result recovered 50% of
the loss or $33.7 million during the third quarter. The sale was part
of a confidential settlement agreement and the sale price is not
necessarily indicative of current market prices or fair value for the
securities.
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LOGITECH INTERNATIONAL S.A.
(In thousands, except per share amounts) - Unaudited
Six Months Ended
September 30,
CONSOLIDATED STATEMENTS OF INCOME 2007 2006
-------------------------------------------- ------------- -----------
Net sales $ 1,025,027 $ 895,323
Cost of goods sold 664,287 601,446
------------- -----------
Gross profit 360,740 293,877
------------- -----------
% of net sales 35.2% 32.8%
Operating expenses:
Marketing and selling 141,250 121,643
Research and development 59,704 51,046
General and administrative 55,471 45,220
------------- -----------
Total operating expenses 256,425 217,909
------------- -----------
Operating income 104,315 75,968
Interest income, net 7,463 3,476
Other income (expense), net (63,704) 9,838
------------- -----------
Income before income taxes 48,074 89,282
Provision for income taxes 10,958 9,931
------------- -----------
Net income $ 37,116 $ 79,351
============= ===========
Shares used to compute net income per share:
Basic 181,630 182,575
Diluted 188,699 190,466
Net income per share:
Basic $ 0.20 $ 0.43
Diluted $ 0.20 $ 0.42
Other income (expense), net for the six months ended September 30,
2007 includes an impairment loss of $67.4 million related to the
decline in fair value of short-term investments.
Subsequent to the balance sheet date, the Company sold, at par, 50% of
each of its short-term investments and as a result recovered 50% of
the loss or $33.7 million during the third quarter. The sale was part
of a confidential settlement agreement and the sale price is not
necessarily indicative of current market prices or fair value for the
securities.
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LOGITECH INTERNATIONAL S.A.
(In thousands) - Unaudited
CONSOLIDATED BALANCE SHEETS September 30, March 31, September 30,
2007 2007 2006
----------------------------- ----------------------------------------
Current assets
Cash and cash equivalents $ 265,388 $ 196,197 $ 149,831
Short term investments 101,181 214,625 95,000
Accounts receivable 425,052 310,377 397,198
Inventories 263,396 217,964 258,417
Other current assets 62,437 68,257 56,599
------------- ------------ -------------
Total current assets 1,117,454 1,007,420 957,045
Investments 14 14 11,968
Property, plant and equipment 97,414 87,054 84,962
Intangible assets
Goodwill 186,577 179,991 136,523
Other intangible assets 16,484 18,920 9,270
Other assets 32,932 34,064 26,507
------------- ------------ -------------
Total assets $ 1,450,875 $ 1,327,463 $ 1,226,275
============= ============ =============
Current liabilities
Short-term debt $ - $ 11,856 $ 12,322
Accounts payable 340,786 218,129 278,870
Accrued liabilities 161,613 235,080 181,207
------------- ------------ -------------
Total current liabilities 502,399 465,065 472,399
Other liabilities 99,505 17,874 12,389
------------- ------------ -------------
Total liabilities 601,904 482,939 484,788
Shareholders´ equity 848,971 844,524 741,487
------------- ------------ -------------
Total liabilities and
shareholders´ equity $ 1,450,875 $ 1,327,463 $ 1,226,275
============= ============ =============
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LOGITECH INTERNATIONAL S.A.
(In thousands) - Unaudited
SUPPLEMENTAL FINANCIAL INFORMATION Quarter Six Months
Ended Ended
September 30 September 30
Reconciliation of GAAP to non-GAAP Financial
Measures 2007 2007
----------------------------------------------------------------------
GAAP net income $ 11,562 $ 37,116
Adjustments:
Impairment loss on short-term
investments 67,419 67,419
------------ ------------
Non-GAAP net income $ 78,981 $ 104,535
============ ============
GAAP net income per share:
Basic $ 0.06 $ 0.20
Diluted $ 0.06 $ 0.20
Impairment loss on short-term investments
per share
Basic $ 0.38 $ 0.38
Diluted $ 0.36 $ 0.36
Non-GAAP net income per share:
Basic $ 0.44 $ 0.58
Diluted $ 0.42 $ 0.56
We sometimes use information derived from consolidated financial
information but not presented in our financial statements prepared in
accordance with U.S. generally accepted accounting principles (GAAP).
Certain of these data are considered "non-GAAP financial measures"
under the U.S. Securities and Exchange Commission rules. The
adjustments between the GAAP and non-GAAP financial measures
presented above consist of the impairment loss related to an other-
than-temporary decline in fair value of short-term investments during
the quarter ended September 30, 2007. There were no adjustments to
our GAAP net income during the three and six months ended September
30, 2006 and accordingly our financial results for those periods are
presented in the accompanying earnings release on a GAAP basis only.
Our management uses these non-GAAP measures in its financial and
operational decision-making. Our management believes these non-GAAP
measures, when considered in conjunction with the corresponding GAAP
measures, facilitate better comparison by our investors of our
current period results with corresponding prior periods.
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LOGITECH INTERNATIONAL S.A.
(In thousands) - Unaudited
Quarter Ended Six Months Ended
September 30 September 30
SUPPLEMENTAL FINANCIAL
INFORMATION 2007 2006 2007 2006
---------------------------- -----------------------------------------
Depreciation $ 11,176 $ 8,765 $ 20,002 $ 16,266
Amortization of other
acquisition-related
intangibles 1,219 952 2,437 1,905
Operating income 80,403 52,177 104,315 75,968
Operating income before
depreciation and
amortization 92,798 61,894 126,754 94,139
Capital expenditures 9,945 12,309 29,917 26,058
Net sales by channel:
Retail $518,441 $446,932 $ 887,668 $788,048
OEM 77,049 55,109 137,359 107,275
--------- --------- ----------- ---------
Total net sales $595,490 $502,041 $1,025,027 $895,323
========= ========= =========== =========
Net sales by product family:
Retail - Pointing Devices $155,490 $136,796 $ 265,143 $232,819
Retail - Keyboards &
Desktops 114,500 85,087 196,089 152,313
Retail - Video 64,469 87,726 111,744 163,652
Retail - Audio 123,628 89,723 216,694 156,628
Retail - Gaming 35,726 30,831 57,928 50,348
Retail - Remotes 24,628 16,769 40,070 32,288
OEM 77,049 55,109 137,359 107,275
--------- --------- ----------- ---------
Total net sales $595,490 $502,041 $1,025,027 $895,323
========= ========= =========== =========
Quarter Ended Six Months Ended
September 30 September 30
Stock-based Compensation
Expense for Employee Stock
Options and Employee Stock
Purchases 2007 2006 2007 2006
---------------------------- --------- --------- ----------- ---------
Cost of goods sold $ 636 $ 731 $ 1,340 $ 1,449
Marketing and selling 1,699 1,910 3,645 3,761
Research and development 741 819 1,507 1,606
General and administration 1,415 1,766 3,443 3,536
Income tax benefit (1,662) (1,113) (2,631) (2,031)
--------- --------- ----------- ---------
Total stock-based
compensation expense after
income taxes $ 2,829 $ 4,113 $ 7,304 $ 8,321
========= ========= =========== =========
Stock-based compensation
expense for employee stock
options and employee stock
purchases, net of tax, per
share (diluted) $ 0.02 $ 0.02 $ 0.04 $ 0.04
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(LOGI - IR)
