- Business Wire
Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the second quarter of Fiscal Year 2019.
- Q2 sales were $691 million, up 9 percent in US dollars and 10 percent in constant currency, compared to Q2 of the prior year.
- Q2 GAAP operating income reached $65 million, compared to $59 million in the same quarter a year ago. Q2 GAAP earnings per share (EPS) grew 15 percent to $0.38, compared to $0.33 in the same quarter a year ago.
- Q2 non-GAAP operating income grew 18 percent to $85 million, compared to $71 million in the same quarter a year ago. Q2 non-GAAP EPS grew 26 percent to $0.49, compared to $0.39 in the same quarter a year ago.
- Q2 cash flow from operations was $85 million, up 24 percent compared to Q2 of the prior year. Cash flow from operations for the fiscal year to date was $97 million, compared to $67 million for the same period a year ago.
"Q2 showcased the power and diversity of our portfolio," said Bracken Darrell, Logitech president and chief executive officer. "We delivered our highest ever sales for a second quarter, with double-digit growth in both Gaming and Video Collaboration and solid growth in our PC Peripherals categories. Our innovation engine is on display as we move into the holiday quarter with a line-up of new, innovative products already well-received by consumers."
Vincent Pilette, chief financial officer, said, "With healthy sales growth of 10 percent in constant currency, we delivered a strong gross margin, above our long-term target. Our constant and obsessive focus on operational efficiency allowed us to continue to invest for future growth while growing non-GAAP operating profit 18 percent and once again delivering strong leverage to the bottom line."
Outlook
Logitech confirmed its Fiscal Year 2019 outlook of 9 to 11 percent sales growth in constant currency and $325 million to $335 million in non-GAAP operating income.
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 Q2 FY 2019 on Tuesday, October 23, 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), loss (gain) on investments in privately held companies, 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, Blue Microphones, 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 and six months ended September 30, 2018, product portfolio, sales for the third quarter of Fiscal Year 2019, new products and consumer reception, target range for gross margin, growth investments, 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; 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, 2018 and our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2018, 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.
(LOGIIR)
| LOGITECH INTERNATIONAL S.A. | ||||||||||||||||||||
| PRELIMINARY RESULTS * | ||||||||||||||||||||
| (In thousands, except per share amounts) - unaudited | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (A) | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
| Net sales (B) | $ | 691,146 | $ | 632,470 | $ | 1,299,626 | $ | 1,162,416 | ||||||||||||
| Cost of goods sold | 432,063 | 402,722 | 814,234 | 737,496 | ||||||||||||||||
| Amortization of intangible assets and purchase accounting effect on inventory | 2,966 | 2,011 | 5,338 | 3,515 | ||||||||||||||||
| Gross profit | 256,117 | 227,737 | 480,054 | 421,405 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Marketing and selling | 121,801 | 107,386 | 236,385 | 209,764 | ||||||||||||||||
| Research and development | 39,542 | 36,647 | 78,529 | 71,746 | ||||||||||||||||
| General and administrative | 25,206 | 25,266 | 50,679 | 50,675 | ||||||||||||||||
| Amortization of intangible assets and acquisition-related costs | 4,317 | 2,491 | 6,838 | 3,881 | ||||||||||||||||
| Change in fair value of contingent consideration for business acquisition | — | (2,930 | ) | — | (4,908 | ) | ||||||||||||||
| Restructuring charges (credits), net | 119 | (61 | ) | 10,040 | (116 | ) | ||||||||||||||
| Total operating expenses | 190,985 | 168,799 | 382,471 | 331,042 | ||||||||||||||||
| Operating income | 65,132 | 58,938 | 97,583 | 90,363 | ||||||||||||||||
| Interest income | 1,858 | 1,048 | 4,227 | 2,223 | ||||||||||||||||
| Other income (expense), net | 3,389 | 459 | 1,818 | (570 | ) | |||||||||||||||
| Income before income taxes | 70,379 | 60,445 | 103,628 | 92,016 | ||||||||||||||||
| Provision for (benefit from) income taxes | 6,203 | 4,087 | 986 | (1,349 | ) | |||||||||||||||
| Net income | $ | 64,176 | $ | 56,358 | $ | 102,642 | $ | 93,365 | ||||||||||||
| Net income per share: | ||||||||||||||||||||
| Basic | $ | 0.39 | $ | 0.34 | $ | 0.62 | $ | 0.57 | ||||||||||||
| Diluted | $ | 0.38 | $ | 0.33 | $ | 0.61 | $ | 0.55 | ||||||||||||
| Weighted average shares used to compute net income per share: | ||||||||||||||||||||
| Basic | 165,630 | 164,120 | 165,474 | 163,765 | ||||||||||||||||
| Diluted | 169,234 | 169,078 | 168,996 | 168,710 | ||||||||||||||||
| Cash dividend per share | $ | 0.69 | $ | 0.63 | $ | 0.69 | $ | 0.63 | ||||||||||||
| LOGITECH INTERNATIONAL S.A. | ||||||||||
| PRELIMINARY RESULTS * | ||||||||||
| (In thousands) - unaudited | ||||||||||
| September 30, | March 31, 2018 | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (A) | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 424,950 | $ | 641,947 | ||||||
| Accounts receivable, net (B) | 459,689 | 214,885 | ||||||||
| Inventories | 358,774 | 259,906 | ||||||||
| Other current assets (B) | 70,412 | 56,362 | ||||||||
| Total current assets | 1,313,825 | 1,173,100 | ||||||||
| Non-current assets: | ||||||||||
| Property, plant and equipment, net | 83,731 | 86,304 | ||||||||
| Goodwill | 346,548 | 275,451 | ||||||||
| Other intangible assets, net | 130,538 | 87,547 | ||||||||
| Other assets | 131,565 | 120,755 | ||||||||
| Total assets | $ | 2,006,207 | $ | 1,743,157 | ||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 440,564 | $ | 293,988 | ||||||
| Accrued and other current liabilities (B) | 434,615 | 281,732 | ||||||||
| Total current liabilities | 875,179 | 575,720 | ||||||||
| Non-current liabilities: | ||||||||||
| Income taxes payable | 34,456 | 34,956 | ||||||||
| Other non-current liabilities | 84,408 | 81,924 | ||||||||
| Total liabilities | 994,043 | 692,600 | ||||||||
| Shareholders' equity: | ||||||||||
| Registered shares, CHF 0.25 par value: | 30,148 | 30,148 | ||||||||
| Issued shares — 173,106 at September 30 and March 31, 2018 | ||||||||||
| Additional shares that may be issued out of the conditional capitals — 50,000 at September 30 and March 31, 2018 | ||||||||||
| Additional shares that may be issued out of the authorized capital — 36,621 at September 30, 2018 and none at March 31, 2018 | ||||||||||
| Additional paid-in capital | 33,160 | 47,234 | ||||||||
| Shares in treasury, at cost — 7,384 at September 30, 2018 and 8,527 at March 31, 2018 | (163,481 | ) | (165,686 | ) | ||||||
| Retained earnings (B) | 1,210,105 | 1,232,316 | ||||||||
| Accumulated other comprehensive loss | (97,768 | ) | (93,455 | ) | ||||||
| Total shareholders' equity | 1,012,164 | 1,050,557 | ||||||||
| Total liabilities and shareholders' equity | $ | 2,006,207 | $ | 1,743,157 | ||||||
| LOGITECH INTERNATIONAL S.A. | ||||||||||||||||||||
| PRELIMINARY RESULTS * | ||||||||||||||||||||
| (In thousands) - unaudited | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (A) | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net income | $ | 64,176 | $ | 56,358 | $ | 102,642 | $ | 93,365 | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation | 11,196 | 10,220 | 21,895 | 19,368 | ||||||||||||||||
| Amortization of intangible assets | 5,448 | 3,645 | 10,341 | 6,238 | ||||||||||||||||
| Gain on investments in privately held companies | (395 | ) | (695 | ) | (382 | ) | (436 | ) | ||||||||||||
| Share-based compensation expense | 12,049 | 10,978 | 25,308 | 21,683 | ||||||||||||||||
| Deferred income taxes | (156 | ) | (2,054 | ) | (9,815 | ) | (11,933 | ) | ||||||||||||
| Change in fair value of contingent consideration for business acquisition | — | (2,930 | ) | — | (4,908 | ) | ||||||||||||||
| Other | (49 | ) | 15 | 75 | 12 | |||||||||||||||
| Changes in assets and liabilities, net of acquisitions: | ||||||||||||||||||||
| Accounts receivable, net | (64,918 | ) | (56,016 | ) | (133,475 | ) | (91,718 | ) | ||||||||||||
| Inventories | (66,201 | ) | (37,689 | ) | (84,401 | ) | (58,078 | ) | ||||||||||||
| Other assets | (6,831 | ) | (5,402 | ) | (11,056 | ) | (8,490 | ) | ||||||||||||
| Accounts payable | 86,998 | 71,489 | 138,186 | 110,136 | ||||||||||||||||
| Accrued and other liabilities | 43,621 | 20,464 | 37,902 | (7,739 | ) | |||||||||||||||
| Net cash provided by operating activities | 84,938 | 68,383 | 97,220 | 67,500 | ||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Purchases of property, plant and equipment | (9,624 | ) | (7,153 | ) | (18,368 | ) | (17,188 | ) | ||||||||||||
| Investment in privately held companies | (281 | ) | (160 | ) | (506 | ) | (520 | ) | ||||||||||||
| Acquisitions, net of cash acquired | (133,665 | ) | (85,000 | ) | (133,908 | ) | (85,000 | ) | ||||||||||||
| Proceeds from return of investment in privately held companies | — | 237 | — | 237 | ||||||||||||||||
| Purchases of short-term investments | (1,505 | ) | (6,789 | ) | (1,505 | ) | (6,789 | ) | ||||||||||||
| Purchases of trading investments | (1,222 | ) | (390 | ) | (3,722 | ) | (999 | ) | ||||||||||||
| Proceeds from sales of trading investments | 1,327 | 410 | 4,194 | 1,057 | ||||||||||||||||
| Net cash used in investing activities | (144,970 | ) | (98,845 | ) | (153,815 | ) | (109,202 | ) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Payment of cash dividends | (113,971 | ) | (104,248 | ) | (113,971 | ) | (104,248 | ) | ||||||||||||
| Purchases of registered shares | (9,919 | ) | (10,058 | ) | (19,901 | ) | (10,682 | ) | ||||||||||||
| Proceeds from exercises of stock options | 8,903 | 17,431 | 10,007 | 30,000 | ||||||||||||||||
| Tax withholdings related to net share settlements of restricted stock units | (2,299 | ) | (2,023 | ) |
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