- Business Wire
Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the fourth quarter and full year of Fiscal Year 2018, ended March 31, 2018.
For Fiscal Year 2018:
- Sales were the highest ever at $2.57 billion, up 16 percent in US dollars and 13 percent in constant currency, compared to the prior year.
- GAAP operating income grew 8 percent to $230 million, compared to $212 million a year ago. GAAP earnings per share (EPS) was $1.23, compared to $1.24 a year ago. Fiscal Year 2018 GAAP EPS was impacted by a $22 million ($0.13 per share) one-time net tax expense following the reduction in the U.S. federal income tax rate and other reforms.
- Non-GAAP operating income grew 14 percent to $287 million, compared to $252 million a year ago. Non-GAAP EPS grew 13 percent to $1.60, compared to $1.41 a year ago.
- Cash flow from operations grew 20 percent to $346 million – the highest in eight years.
For Q4 Fiscal Year 2018:
- Sales grew to $592 million, up 16 percent in US dollars and 9 percent in constant currency, compared to the prior year.
- GAAP operating income grew to $39 million, and non-GAAP operating income grew to a better-than-expected $55 million.
- Cash flow from operations reached $90 million.
"Over the past five years we've built a business with sustainable growth. We have a resilient and expanding portfolio. We are building five scalable capabilities led by design and engineering," said Bracken Darrell, Logitech president and chief executive officer. "Fiscal Year 2018 delivered broad-based, double-digit growth led by Gaming and Video Collaboration. Now, as we look to the next five years, we will go on the offense to accelerate the creation of an amazing company."
Vincent Pilette, Logitech chief financial officer, said, "We've delivered a great fiscal year with record sales, and better-than-expected profitability and cash flow from operations. We go into Fiscal Year 2019 with strong momentum, our financial fundamentals in place, and an eye toward shaping the portfolio and reallocating resources to continuously transform."
Outlook
Logitech confirmed its Fiscal Year 2019 outlook of high single-digit sales growth in constant currency and $310 to $320 million in non-GAAP operating income.
Management Update
On May 2, 2018, L. Joseph Sullivan, the Company's senior vice president, worldwide operations, announced his retirement and, effective immediately, resigned from the Company's Group Management Team. The Company accepted this resignation. Mr. Sullivan's retirement from Logitech will be effective as of February 2, 2019, the end of his contractual notice period.
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 Q4 and the full Fiscal Year 2018 on Thursday, May 3, 2018 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), gain (loss) on investments in privately held companies, 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 2019.
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, Ultimate Ears, Jaybird, Logitech G and ASTRO Gaming. 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 federal securities laws, including, without limitation, statements regarding: our preliminary financial results for the three months and fiscal year ended March 31, 2018, ability to grow and sustain growth, product portfolio, capabilities and their scalability, transformation and creation of an amazing company and its timing, momentum, reallocation of resources, and outlook for Fiscal Year 2019 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. 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 Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2017 and our Annual Report on Form 10-K for the fiscal year ended March 31, 2017, 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 | Fiscal Years Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net sales | $ | 592,426 | $ | 510,552 | $ | 2,566,863 | $ | 2,221,427 | ||||||||
| Cost of goods sold | 377,617 | 311,303 | 1,648,744 | 1,395,211 | ||||||||||||
| Amortization of intangible assets and purchase accounting effect on inventory | 2,574 | 1,470 | 8,878 | 6,175 | ||||||||||||
| Gross profit | 212,235 | 197,779 | 909,241 | 820,041 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Marketing and selling | 109,572 | 99,941 | 435,489 | 379,641 | ||||||||||||
| Research and development | 37,616 | 33,658 | 143,760 | 130,525 | ||||||||||||
| General and administrative | 23,387 | 24,683 | 96,353 | 100,270 | ||||||||||||
| Amortization of intangible assets and acquisition-related costs | 2,553 | 1,279 | 8,930 | 5,814 | ||||||||||||
| Change in fair value of contingent consideration for business acquisition | — | 1,833 | (4,908 | ) | (8,092 | ) | ||||||||||
| Restructuring charges (credits), net | — | 67 | (116 | ) | 23 | |||||||||||
| Total operating expenses | 173,128 | 161,461 | 679,508 | 608,181 | ||||||||||||
| Operating income | 39,107 | 36,318 | 229,733 | 211,860 | ||||||||||||
| Interest income | 1,872 | 1,189 | 4,969 | 1,452 | ||||||||||||
| Other income (expense), net | (1,543 | ) | 734 | (2,437 | ) | 1,677 | ||||||||||
| Income before income taxes | 39,436 | 38,241 | 232,265 | 214,989 | ||||||||||||
| Provision for (benefit from) income taxes | 5,032 | (1,184 | ) | 23,723 | 9,113 | |||||||||||
| Net income | $ | 34,404 | $ | 39,425 | $ | 208,542 | $ | 205,876 | ||||||||
| Net income per share : | ||||||||||||||||
| Basic | $ | 0.21 | $ | 0.24 | $ | 1.27 | $ | 1.27 | ||||||||
| Diluted | $ | 0.20 | $ | 0.24 | $ | 1.23 | $ | 1.24 | ||||||||
| Weighted average shares used to compute net income per share: | ||||||||||||||||
| Basic | 164,374 | 162,023 | 164,038 | 162,058 | ||||||||||||
| Diluted | 169,387 | 166,526 | 168,971 | 165,540 | ||||||||||||
| Cash dividend per share | $ | — | $ | — | $ | 0.63 | $ | 0.57 | ||||||||
| LOGITECH INTERNATIONAL S.A. | ||||||||
| PRELIMINARY RESULTS | ||||||||
| (In thousands) - unaudited | ||||||||
| March 31, | March 31, | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | 2018 | 2017 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 641,947 | $ | 547,533 | ||||
| Accounts receivable, net | 214,885 | 185,179 | ||||||
| Inventories | 259,906 | 253,401 | ||||||
| Other current assets | 56,362 | 41,732 | ||||||
| Total current assets | 1,173,100 | 1,027,845 | ||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | 86,304 | 85,408 | ||||||
| Goodwill | 275,451 | 249,741 | ||||||
| Other intangible assets, net | 87,547 | 47,564 | ||||||
| Other assets | 120,755 | 88,119 | ||||||
| Total assets | $ | 1,743,157 | $ | 1,498,677 | ||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 293,988 | $ | 274,805 | ||||
| Accrued and other current liabilities | 281,732 | 232,273 | ||||||
| Total current liabilities | 575,720 | 507,078 | ||||||
| Non-current liabilities: | ||||||||
| Income taxes payable | 34,956 | 51,797 | ||||||
| Other non-current liabilities | 81,924 | 83,691 | ||||||
| Total liabilities | 692,600 | 642,566 | ||||||
| Shareholders´ equity: | ||||||||
| Registered shares, CHF 0.25 par value: | 30,148 | 30,148 | ||||||
| Issued and authorized shares—173,106 at March 31, 2018 and 2017 | ||||||||
| Conditionally authorized shares—50,000 at March 31, 2018 and 2017 | ||||||||
| Additional paid-in capital | 47,234 | 26,596 | ||||||
| Treasury shares, at cost—8,527 and 10,727 shares at March 31, 2018 and 2017, respectively | (165,686 | ) | (174,037 | ) | ||||
| Retained earnings | 1,232,316 | 1,074,110 | ||||||
| Accumulated other comprehensive loss | (93,455 | ) | (100,706 | ) | ||||
| Total shareholders´ equity | 1,050,557 | 856,111 | ||||||
| Total liabilities and shareholders´ equity | $ | 1,743,157 | $ | 1,498,677 | ||||
| LOGITECH INTERNATIONAL S.A. | |||||||||||||||||
| PRELIMINARY RESULTS | |||||||||||||||||
| (In thousands) - unaudited | |||||||||||||||||
| Three Months Ended | Fiscal Years Ended | ||||||||||||||||
| March 31, | March 31, | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net income | $ | 34,404 | $ | 39,425 | $ | 208,542 | $ | 205,876 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation | 11,077 | 8,642 | 41,295 | 41,121 | |||||||||||||
| Amortization of intangible assets | 4,954 | 2,749 | 15,607 | 9,367 | |||||||||||||
| Share-based compensation expense | 10,899 | 9,536 | 44,138 | 35,890 | |||||||||||||
| Gain on investments in privately held companies | (119 | ) | (22 | ) | (669 | ) | (569 | ) | |||||||||
| Deferred income taxes | 413 | (1,924 | ) | 7,141 | (2,397 | ) | |||||||||||
| Change in fair value of contingent consideration for business acquisition | — | 1,833 | (4,908 | ) | (8,092 | ) | |||||||||||
| Other | (18 | ) | 107 | (11 | ) | 107 | |||||||||||
| Changes in assets and liabilities, net of acquisitions: | |||||||||||||||||
| Accounts receivable, net | 137,665 | 92,861 | (26,363 | ) | (46,553 | ) | |||||||||||
| Inventories | 21,739 | (234 | ) | 16,047 | (15,428 | ) | |||||||||||
| Other assets | 2,045 | 1,037 | (16,908 | ) | (5,309 | ) | |||||||||||
| Accounts payable | (134,016 | ) | (84,636 | ) | 17,695 | 24,459 | |||||||||||
| Accrued and other liabilities | 1,134 | (21,632 | ) | 44,655 | 49,917 | ||||||||||||
| Net cash provided by operating activities | 90,177 |
| 47,742 | 346,261 | 288,389 | ||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Purchases of property, plant and equipment | (12,155 | ) | (8,432 | ) | (39,748 | ) | (31,804 | ) | |||||||||
| Acquisitions, net of cash acquired | — | — | (88,323 | ) | (66,987 | ) | |||||||||||
| Investment in privately held companies | (360 | ) | (320 | ) | (1,240 | ) | (960 | ) | |||||||||
| Proceeds from return of investment in privately held companies | — | — | 237 | — | |||||||||||||
| Changes in restricted cash | — | — | — | 715 | |||||||||||||
| Purchases of short-term investments | — | — | (6,789 | ) | — | ||||||||||||
| Sales of short-term investments | — | — | 6,789 | — | |||||||||||||
| Purchases of trading investments | (3,211 | ) | (1,184 | ) | (6,053 | ) | (7,052 | ) | |||||||||
| Proceeds from sales of trading investments | 3,214 | 1,212 | 6,423 | 7,124 | |||||||||||||
| Net cash used in investing activities | (12,512 | ) |
| (8,724 | ) | (128,704 | ) | (98,964 | ) | ||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Payment of cash dividends | — | — | (104,248 | ) | (93,093 | ) | |||||||||||
| Payment of contingent consideration for business acquisition | — | — | (5,000 | ) | — | ||||||||||||
| Purchases of registered shares | (10,314 | ) | (20,022 | ) | (30,722 | ) | (83,786 | ) | |||||||||
| Proceeds from exercise of stock options and purchase rights | 10,963 | 19,219 | 41,910 | 39,574 | |||||||||||||
| Tax withholdings related to net share settlements of restricted stock units | (4,308 | ) | (5,358 | ) | (29,813 | ) | (18,412 | ) | |||||||||
| Net cash used in financing activities | (3,659 | ) | (6,161 | ) | (127,873 | ) | (155,717 | ) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 3,053 | 1,098 | 4,730 | (5,370 | ) | ||||||||||||
| Net increase in cash and cash equivalents | 77,059 | 33,955 | 94,414 | 28,338 | |||||||||||||
