Logitech International (SWX:LOGN) (Nasdaq:LOGI) today announced
record sales and operating profit for the third quarter of Fiscal Year
2008, ended Dec. 31, 2007. Sales were $744 million, up 13 percent from
$659 million in the same quarter last year. Operating income was $116
million, up 17 percent from $100 million for the same quarter a year
ago. Net income was $134 million ($0.71 per share), up from $94
million ($0.49 per share) one year ago. Gross margin reached an
all-time high for the company at 36.9 percent, compared to 36.2
percent in Q3 of FY 2007. Cash flow from operations was $177 million,
the highest ever for a quarter.
Logitech´s retail sales for Q3 grew by 9 percent year over year,
increasing by 9 percent in the Americas, 4 percent in EMEA and 44
percent in Asia Pacific. The growth in the Americas and EMEA was
restrained by continued weakness in the webcam category. Retail sales
in all regions were driven by strong demand for Harmony remote
controls, keyboards and mice. Sales of Harmony remote controls
increased by 72 percent, with strong growth in all regions. Keyboard
sales increased by 32 percent and mice sales increased by 22 percent.
OEM sales grew by 54 percent, driven by strong demand for microphones
for console singing games.
"We are very pleased with our Q3 performance," said Gerald. P.
Quindlen, Logitech president and chief executive officer. "We
delivered record sales and our best gross margin ever, despite a
highly promotional retail environment, and we continued to improve the
effectiveness of our working capital management as we finished Q3 with
half a billion dollars in cash. The strong momentum in core categories
such as keyboards and mice exemplifies how leadership in innovation
stimulates continued demand and supports improved margins. And the
robust sales of Harmony remotes underscores the promise of our
increasing attention on the digital home. The progress we have made in
realigning our operating expense growth and gross profit growth
positions us to exceed our FY 2008 goal for operating income growth."
Outlook
For the current fiscal year, ending March 31, 2008, the company
confirmed its sales target of 15 percent growth and increased its
year-over-year operating income growth goal to more than 20 percent.
The Company´s previously stated goal for operating income growth was
20 percent. FY 2008 gross margin is expected to be above the high end
of the Company´s long-term target range of 32-34 percent.
The Company also provided preliminary financial targets of 15
percent growth in both sales and operating income for Fiscal Year
2009, ending March 31, 2009.
Earnings Teleconference
Logitech will hold an earnings teleconference on Jan. 17, 2008 at
14:00 Central European Time/8:00 a.m. Eastern Standard Time/5:00 a.m.
Pacific Standard Time to discuss these results as well as the
Company´s outlook. A live webcast and replay of the teleconference,
including presentation slides, will be available on the Logitech
corporate Web site at http://ir.logitech.com. Please visit the Web
site at least 10 minutes early to register for the teleconference
webcast.
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).
This press release contains forward-looking statements, including
the statements regarding expected sales and operating income growth
and gross margin for Fiscal Year 2008, and preliminary expected sales
and operating income growth for Fiscal Year 2009. The forward-looking
statements in this release involve risks and uncertainties that could
cause Logitech´s actual performance and results to differ materially
from that anticipated in these forward-looking statements. Factors
that could cause actual results to differ materially include if we
fail to successfully innovate in our current and emerging product
categories and identify new feature or product opportunities; consumer
demand for our products and our ability to accurately forecast 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; our ability to continue to implement our plan to
control operating expenses while growing sales; the sales mix among
our lower- and higher-margin products and our geographic sales mix; as
well as those additional factors set forth in our periodic filings
with the Securities and Exchange Commission, including our annual
report on Form 20-F for the fiscal year ended March 31, 2007 and our
quarterly reports on Form 6-K available at www.sec.gov. Logitech does
not undertake to update any forward-looking statements.
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.
(LOGI - IR)
-0-
*T
LOGITECH INTERNATIONAL S.A.
(In thousands, except per share amounts) - Unaudited
Quarter Ended December 31,
CONSOLIDATED STATEMENTS OF INCOME 2007 2006
----------------------------------------------------------------------
Net sales $744,235 $658,512
Cost of goods sold 469,801 419,855
--------------------------
Gross profit 274,434 238,657
--------------------------
% of net sales 36.9% 36.2%
Operating expenses:
Marketing and selling 98,512 84,146
Research and development 31,378 28,778
General and administrative 28,318 26,137
--------------------------
Total operating expenses 158,208 139,061
--------------------------
Operating income 116,226 99,596
Interest income, net 4,301 2,045
Other income, net 26,182 2,593
--------------------------
Income before income taxes 146,709 104,234
Provision for income taxes 13,137 9,930
--------------------------
Net income $133,572 $ 94,304
==========================
Shares used to compute net income per
share:
Basic 181,549 182,652
Diluted 188,813 191,145
Net income per share:
Basic $0.74 $0.52
Diluted $0.71 $0.49
*T
-0-
*T
Other income, net for the quarter ended December 31, 2007 includes net
realized gain on sales of short-term investments of $27.8 million,
and an impairment loss of $5.5 million.
*T
-0-
*T
LOGITECH INTERNATIONAL S.A.
(In thousands, except per share amounts) - Unaudited
Nine Months Ended December 31,
CONSOLIDATED STATEMENTS OF INCOME 2007 2006
----------------------------------------------------------------------
Net sales $1,769,262 $1,553,835
Cost of goods sold 1,134,088 1,021,301
------------------------------
Gross profit 635,174 532,534
------------------------------
% of net sales 35.9% 34.3%
Operating expenses:
Marketing and selling 239,762 205,789
Research and development 91,082 79,824
General and administrative 83,789 71,357
------------------------------
Total operating expenses 414,633 356,970
------------------------------
Operating income 220,541 175,564
Interest income, net 11,764 5,521
Other income (expense), net (37,522) 12,431
------------------------------
Income before income taxes 194,783 193,516
Provision for income taxes 24,095 19,861
------------------------------
Net income $ 170,688 $ 173,655
==============================
Shares used to compute net income per
share:
Basic 181,602 182,601
Diluted 188,748 190,655
Net income per share:
Basic $ 0.94 $ 0.95
Diluted $ 0.90 $ 0.91
*T
-0-
*T
Other income (expense), net for the nine months ended December 31,
2007 includes an impairment loss of $72.9 million related to the
decline in fair value of short-term investments, and a net realized
gain of $27.8 million on the sales of short-term investments.
*T
-0-
*T
LOGITECH INTERNATIONAL S.A.
(In thousands) - Unaudited
December March 31, December
CONSOLIDATED BALANCE SHEETS 31, 2007 2007 31, 2006
----------------------------------------------------------------------
Current assets
Cash and cash equivalents $ 499,248 $ 196,197 $ 263,089
Short term investments 10,840 214,625 104,950
Accounts receivable 444,090 310,377 416,195
Inventories 252,661 217,964 234,944
Other current assets 63,510 68,257 59,024
---------- ---------- ----------
Total current assets 1,270,349 1,007,420 1,078,202
Investments 15 14 11,131
Property, plant and equipment 96,369 87,054 85,435
Intangible assets
Goodwill 194,552 179,991 146,186
Other intangible assets 23,465 18,920 20,510
Other assets 35,976 34,064 30,345
---------- ---------- ----------
Total assets $1,620,726 $1,327,463 $1,371,809
========== ========== ==========
Current liabilities
Short-term debt $ - $ 11,856 $ 12,185
Accounts payable 354,480 218,129 293,085
Accrued liabilities 199,043 235,080 220,985
---------- ---------- ----------
Total current liabilities 553,523 465,065 526,255
Other liabilities 105,832 17,874 18,190
---------- ---------- ----------
Total liabilities 659,355 482,939 544,445
Shareholders´ equity 961,371 844,524 827,364
---------- ---------- ----------
Total liabilities and shareholders´
equity $1,620,726 $1,327,463 $1,371,809
========== ========== ==========
*T
-0-
*T
LOGITECH INTERNATIONAL S.A.
(In thousands) - Unaudited
SUPPLEMENTAL FINANCIAL INFORMATION
Quarter Ended Nine Months Ended
Reconciliation of GAAP to non-GAAP December 31 December 31
Financial Measures 2007 2007
----------------------------------------------------------------------
GAAP net income $133,572 $170,688
Adjustments:
Impairment loss on short-term
investments 5,504 72,923
Realized gain on sale of short-term
investments (33,712) (33,712)
Realized loss on sale of short-term
investments 5,951 5,951
------------- -----------------
(22,257) 45,162
------------- -----------------
Non-GAAP net income $111,315 $215,850
============= =================
GAAP net income per share:
Basic $ 0.74 $ 0.94
Diluted $ 0.71 $ 0.90
Impairment loss on short-term
investments, net of realized gain per
share
Basic $ (0.12) $ 0.25
Diluted $ (0.12) $ 0.24
Non-GAAP net income per share:
Basic $ 0.62 $ 1.19
Diluted $ 0.59 $ 1.14
*T
-0-
*T
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 impact on Other Income (Expense) of
the impairment loss related to an other-than-temporary decline in
fair value of short-term investments during the quarters ended
December 31, 2007 and September 30, 2007, and the realized gain/loss
on sales of short-term investments during the quarter ended December
31, 2007. There were no adjustments to our GAAP net income during the
three and nine months ended December 31, 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.
*T
-0-
*T
LOGITECH INTERNATIONAL
S.A.
(In thousands) - Unaudited
Quarter Ended Nine Months Ended
SUPPLEMENTAL FINANCIAL December 31 December 31
INFORMATION 2007 2006 2007 2006
----------------------------------------------------------------------
Depreciation $ 13,028 $ 10,029 $ 33,030 $ 26,295
Amortization of other
acquisition-related
intangibles 1,218 1,380 3,655 3,285
Operating income 116,226 99,596 220,541 175,564
Operating income before
depreciation and
amortization 130,472 111,005 257,226 205,144
Capital expenditures 11,372 10,583 41,289 36,641
Net sales by channel:
Retail $652,619 $599,142 $1,540,287 $1,387,190
OEM 91,616 59,370 228,975 166,645
--------- --------- ----------- -----------
Total net sales $744,235 $658,512 $1,769,262 $1,553,835
========= ========= =========== ===========
Net sales by product
family:
Retail - Pointing Devices $189,093 $153,998 $ 454,236 $ 386,817
Retail - Keyboards &
Desktops 145,090 109,542 341,179 261,855
Retail - Video 66,469 95,882 178,213 259,534
Retail - Audio 148,510 153,133 365,204 309,761
Retail - Gaming 55,223 58,589 113,151 108,937
Retail - Remotes 48,234 27,998 88,304 60,286
OEM 91,616 59,370 228,975 166,645
--------- --------- ----------- -----------
Total net sales $744,235 $658,512 $1,769,262 $1,553,835
========= ========= =========== ===========
Stock-based Compensation
Expense for Employee Quarter Ended Nine Months Ended
Stock Options and December 31 December 31
Employee Stock Purchases 2007 2006 2007 2006
------------------------------------ --------- ----------- -----------
Cost of goods sold $ 662 $ 628 $ 2,002 $ 2,077
Marketing and selling 2,143 1,633 5,788 5,394
Research and development 947 721 2,454 2,327
General and administration 1,571 1,660 5,014 5,196
Income tax benefit (596) (279) (3,227) (2,310)
--------- --------- ----------- -----------
Total stock-based
compensation expense
after income taxes $ 4,727 $ 4,363 $ 12,031 $ 12,684
========= ========= =========== ===========
Stock-based compensation
expense for employee
stock options and
employee stock purchases,
net of tax, per share
(diluted) $ 0.03 $ 0.02 $ 0.06 $ 0.07
*T
