New President Initiates Transformation to Simpler, Faster, More Consumer-Centric Company, Including Restructuring
Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced
financial results for the fourth quarter and full year of Fiscal Year
2012.
Sales for Q4 FY 2012 were $532 million, down 3 percent from $548 million
in Q4 FY 2011. Excluding the unfavorable impact of exchange rates, sales
decreased by 2 percent compared to the prior year. Operating income was
$24 million compared to $4 million in the same quarter a year ago. Net
income for Q4 FY 2012 was $28 million ($0.17 per share) compared to net
income of $3 million ($0.02 per share) in Q4 of FY 2011. Gross margin
for the quarter was 36.4 percent compared to 32.8 percent in the same
quarter one year ago.
Logitech’s retail sales for Q4 FY 2012 decreased year over year by 2
percent, with an increase in EMEA of 13 percent, an increase in Asia of
12 percent, and a decrease in the Americas of 17 percent. OEM sales
decreased by 9 percent. Sales for the LifeSize division decreased by 10
percent.
For the full fiscal year, sales were $2.32 billion, compared to $2.36
billion in FY 2011. Operating income was $72 million, down 50 percent
from $143 million a year ago. Net income for the full fiscal year was
$71 million ($0.41 per share), down 44 percent from $128 million ($0.72
per share) in FY 2011. Gross margin for FY 2012 was 33.5 percent
compared to 35.4 percent in FY 2011.
“I look forward to leading Logitech to improved performance,” said
Bracken Darrell, Logitech president. “To get back to sustained,
profitable growth, we need to be simpler, faster and more
consumer-centric. Some of this transformation has already begun, with
the management team’s work to reinvigorate the product portfolio. We now
need to simplify the organization through restructuring. With board
approval, I have eliminated a layer of business and sales executive
management; the leaders of our business groups and sales regions now
report directly to me. In addition, we will consolidate brand management
and product portfolio management under the leadership of the business
groups, and streamline most other functions. I expect most of this
restructuring to be completed by the end of the current quarter, freeing
up resources to pursue our growth opportunities. The restructuring
should result in a reduction of approximately $80 million in annual
operating costs.”
“I believe the organizational streamlining that Bracken is driving is a
decisive step for Logitech’s future,” said Guerrino De Luca, Logitech
chairman and chief executive officer. “Looking ahead, I am also excited
about what I believe is a strong lineup of new products with a much
clearer value proposition to consumers. We expect that increasingly
differentiated products will provide strong up-sell opportunities across
all of our businesses. The majority of these new products will launch in
Q2.”
The company expects to benefit from a stronger product portfolio, the
simplification of the organization and processes, and cost savings from
the restructuring, resulting in improved financial performance in the
second half of Fiscal 2013.
Prepared Remarks Available Online
Logitech has made its prepared written remarks for the financial results
teleconference available online on the Logitech corporate Web site at http://ir.logitech.com.
The remarks are posted in the Calendar section on the Investor home page.
Financial Results Teleconference and Webcast
Logitech will hold a financial results teleconference to discuss the Q4
and full-year results for FY 2012 and its restructuring and
simplification plans on Thursday, April 26, 2012 at 8:30 a.m. Eastern
Daylight Time and 14:30 Central European Summer Time. A live webcast of
the call will be available on the Logitech corporate website at http://ir.logitech.com.
About Logitech
Logitech is a world leader in products that connect people to the
digital experiences they care about. Spanning multiple computing,
communication and entertainment platforms, Logitech’s combined hardware
and software enable or enhance digital navigation, music and video
entertainment, gaming, social networking, audio and video communication
over the Internet, video security and home-entertainment control.
Founded in 1981, Logitech International is a Swiss public company listed
on the SIX Swiss Exchange (LOGN) and on the Nasdaq Global Select Market
(LOGI).
This press release contains forward-looking statements, including the
statements regarding performance, sustainable and profitable growth,
organizational structure, the timing of completing the restructuring,
the availability of resources to pursue growth opportunities, the
reduction in annual operating costs and the amount of those cost savings
available in Fiscal Year 2013, the lineup of new products, the timing of
their launches and their value propositions, up-sell opportunities and
financial performance in the second half of Fiscal Year 2013. The
forward-looking statements in this release involve risks and
uncertainties that could cause Logitech’s actual results to differ
materially from those anticipated in these forward-looking statements.
Factors that could cause actual results to differ materially include:
the demand of our customers and our consumers for our products and our
ability to accurately forecast it; if our investment prioritization
decisions do not result in the sales or profitability growth we expect,
or when we expect 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; the sales mix among our lower-
and higher-margin products and our geographic sales mix; if our product
offerings and marketing activities do not result in the sales and
profitability we expect, or when we expect it; if we fail to
successfully develop and market products for mobile computing devices
such as smartphones and tablets with touch interfaces, or if significant
demand for peripherals to use with tablets and other mobile devices with
touch interfaces does not develop; if there is a deterioration of
business and economic conditions in one or more of our sales regions or
operating segments, or significant fluctuations in currency exchange
rates; if the sales growth in emerging markets for our PC peripherals
and other products does not increase as much as we expect; in digital
music, if we fail to introduce differentiated product and marketing
strategies to separate ourselves from competitors; competition in the
video conferencing and communications industry, including from companies
with significantly greater resources, sales and marketing organizations,
installed base and name recognition; if the restructuring fails to
produce the intended performance and cost savings results or is not
implemented in the contemplated timeframe; as well as those additional
factors set forth 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, 2011 and our Quarterly Report on Form 10-Q
for the fiscal quarter ended December 31, 2011, available at www.sec.gov.
Logitech does not undertake to update any forward-looking statements,
which speak as of their respective dates.
Logitech, the Logitech logo, and other Logitech marks are registered in
Switzerland 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.
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
(In thousands, except per share amounts) - Unaudited
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
531,962
|
|
|
$
|
547,618
|
|
|
Cost of goods sold
|
|
|
338,075
|
|
|
|
368,248
|
|
|
Gross profit
|
|
|
193,887
|
|
|
|
179,370
|
|
|
|
% of net sales
|
|
|
36.4
|
%
|
|
|
32.8
|
%
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Marketing and selling
|
|
|
100,302
|
|
|
|
106,777
|
|
|
|
Research and development
|
|
|
40,948
|
|
|
|
38,119
|
|
|
|
General and administrative
|
|
|
28,896
|
|
|
|
30,836
|
|
|
Total operating expenses
|
|
|
170,146
|
|
|
|
175,732
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
23,741
|
|
|
|
3,638
|
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
|
466
|
|
|
|
621
|
|
|
Other income, net
|
|
|
6,481
|
|
|
|
2,679
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
30,688
|
|
|
|
6,938
|
|
|
Provision for income taxes
|
|
|
2,402
|
|
|
|
4,162
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
28,286
|
|
|
$
|
2,776
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
|
169,387
|
|
|
|
178,562
|
|
|
|
|
Diluted
|
|
|
170,401
|
|
|
|
180,423
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.17
|
|
|
$
|
0.02
|
|
|
|
|
Diluted
|
|
$
|
0.17
|
|
|
$
|
0.02
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
(In thousands, except per share amounts) - Unaudited
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended March 31,
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
2,316,203
|
|
|
$
|
2,362,886
|
|
|
Cost of goods sold
|
|
|
1,539,614
|
|
|
|
1,526,380
|
|
|
Gross profit
|
|
|
776,589
|
|
|
|
836,506
|
|
|
|
% of net sales
|
|
|
33.5
|
%
|
|
|
35.4
|
%
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Marketing and selling
|
|
|
423,854
|
|
|
|
420,580
|
|
|
|
Research and development
|
|
|
162,331
|
|
|
|
156,390
|
|
|
|
General and administrative
|
|
|
118,423
|
|
|
|
116,880
|
|
|
Total operating expenses
|
|
|
704,608
|
|
|
|
693,850
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
71,981
|
|
|
|
142,656
|
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
|
2,674
|
|
|
|
2,316
|
|
|
Other income, net
|
|
|
16,622
|
|
|
|
3,476
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
91,277
|
|
|
|
148,448
|
|
|
Provision for income taxes
|
|
|
19,819
|
|
|
|
19,988
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
71,458
|
|
|
$
|
128,460
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
|
174,648
|
|
|
|
176,928
|
|
|
|
|
Diluted
|
|
|
175,591
|
|
|
|
178,790
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.41
|
|
|
$
|
0.73
|
|
|
|
|
Diluted
|
|
$
|
0.41
|
|
|
$
|
0.72
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
(In thousands) - Unaudited
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS
|
|
March 31, 2012
|
|
March 31, 2011
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
478,370
|
|
$
|
477,931
|
|
|
Accounts receivable
|
|
|
223,104
|
|
|
258,294
|
|
|
Inventories
|
|
|
297,072
|
|
|
280,814
|
|
|
Other current assets
|
|
|
65,990
|
|
|
59,347
|
|
|
Total current assets
|
|
|
1,064,536
|
|
|
1,076,386
|
|
Property, plant and equipment
|
|
|
86,773
|
|
|
84,160
|
|
Intangible assets
|
|
|
|
|
|
|
Goodwill
|
|
|
560,523
|
|
|
547,184
|
|
|
Other intangible assets
|
|
|
53,518
|
|
|
74,616
|
|
Other assets
|
|
|
83,033
|
|
|
79,210
|
|
Total assets
|
|
$
|
1,848,383
|
|
$
|
1,861,556
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
301,111
|
|
$
|
298,160
|
|
|
Accrued liabilities
|
|
|
178,569
|
|
|
172,560
|
|
|
Total current liabilities
|
|
|
479,680
|
|
|
470,720
|
|
Other liabilities
|
|
|
218,462
|
|
|
185,835
|
|
Total liabilities
|
|
|
698,142
|
|
|
656,555
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
1,150,241
|
|
|
1,205,001
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
1,848,383
|
|
$
|
1,861,556
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
(In thousands) - Unaudited
|
|
|
|
|
|
|
|
Twelve Months Ended March 31,
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income
|
|
$
|
71,458
|
|
|
$
|
128,460
|
|
|
Non-cash items included in net income:
|
|
|
|
|
|
Depreciation
|
|
|
45,968
|
|
|
|
48,191
|
|
|
Amortization of other intangible assets
|
|
|
26,534
|
|
|
|
27,800
|
|
|
Inventory valuation adjustment
|
|
|
34,074
|
|
|
|
-
|
|
|
Share-based compensation expense
|
|
|
31,529
|
|
|
|
34,846
|
|
|
Gain on sale of investments
|
|
|
(6,109
|
)
|
|
|
-
|
|
|
Gain on disposal of fixed assets
|
|
|
(8,967
|
)
|
|
|
(838
|
)
|
|
Excess tax benefits from share-based compensation
|
|
|
(37
|
)
|
|
|
(3,455
|
)
|
|
Deferred income taxes and other
|
|
|
137
|
|
|
|
(9,350
|
)
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
|
29,279
|
|
|
|
(54,684
|
)
|
|
Inventories
|
|
|
(36,621
|
)
|
|
|
(60,482
|
)
|
|
Other assets
|
|
|
(4,621
|
)
|
|
|
5,825
|
|
|
Accounts payable
|
|
|
3,622
|
|
|
|
37,714
|
|
|
Accrued liabilities
|
|
|
13,090
|
|
|
|
2,715
|
|
|
Net cash provided by operating activities
|
|
|
199,336
|
|
|
|
156,742
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(51,001
|
)
|
|
|
(43,039
|
)
|
|
Acquisitions and investments, net of cash acquired
|
|
|
(18,814
|
)
|
|
|
(7,300
|
)
|
|
Proceeds from sale of property, plant and equipment
|
|
|
8,967
|
|
|
|
2,688
|
|
|
Proceeds from sale of available-for-sale securities
|
|
|
6,550
|
|
|
|
-
|
|
|
Purchases of trading investments
|
|
|
(7,505
|
)
|
|
|
(19,075
|
)
|
|
Sales of trading investments
|
|
|
7,399
|
|
|
|
6,470
|
|
|
Proceeds from cash surrender of life insurance policies
|
|
|
-
|
|
|
|
11,313
|
|
|
Proceeds from sale of business
|
|
|
-
|
|
|
|
9,087
|
|
|
Premiums paid on cash surrender value of life insurance policies
|
|
|
-
|
|
|
|
(5
|
)
|
|
Net cash used in investing activities
|
|
|
(54,404
|
)
|
|
|
(39,861
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Purchases of treasury shares
|
|
|
(156,036
|
)
|
|
|
-
|
|
|
Proceeds from sale of shares upon exercise of options and purchase
rights
|
|
|
17,591
|
|
|
|
43,001
|
|
|
Tax withholdings related to net share settlements of restricted
stock units
|
|
|
(966
|
)
|
|
|
(223
|
)
|
|
Excess tax benefits from share-based compensation
|
|
|
37
|
|
|
|
3,455
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(139,374
|
)
|
|
|
46,233
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(5,119
|
)
|
|
|
(5,127
|
)
|
|
Net increase in cash and cash equivalents
|
|
|
439
|
|
|
|
157,987
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
477,931
|
|
|
|
319,944
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
478,370
|
|
|
$
|
477,931
|
|
|
|
|
LOGITECH INTERNATIONAL S.A.
|
|
|
|
(In thousands, except per share amounts) - Unaudited
|
|
|
|
|
|
Quarter Ended
|
|
Twelve Months Ended
|
|
|
|
March 31,
|
|
March 31,
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
$
|
10,767
|
|
|
$
|
12,526
|
|
|
$
|
45,968
|
|
|
$
|
48,191
|
|
|
Amortization of other intangible assets
|
|
|
6,325
|
|
|
|
6,635
|
|
|
|
26,534
|
|
|
|
27,800
|
|
|
Operating income
|
|
|
23,741
|
|
|
|
3,638
|
|
|
|
71,981
|
|
|
|
142,656
|
|
|
Operating income before depreciation and amortization
|
|
|
40,833
|
|
|
|
22,799
|
|
|
|
144,483
|
|
|
|
218,647
|
|
|
Capital expenditures
|
|
|
19,584
|
|
|
|
11,204
|
|
|
|
51,001
|
|
|
|
43,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales by channel:
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
$
|
455,398
|
|
|
$
|
463,232
|
|
|
$
|
1,982,783
|
|
|
$
|
2,005,210
|
|
|
|
OEM
|
|
|
40,993
|
|
|
|
45,026
|
|
|
|
185,959
|
|
|
|
223,775
|
|
|
|
LifeSize
|
|
|
35,571
|
|
|
|
39,360
|
|
|
|
147,461
|
|
|
|
133,901
|
|
|
|
|
Total net sales
|
|
$
|
531,962
|
|
|
$
|
547,618
|
|
|
$
|
2,316,203
|
|
|
$
|
2,362,886
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net retail sales by product family:
|
|
|
|
|
|
|
|
|
|
|
Retail - Pointing Devices
|
|
$
|
147,567
|
|
|
$
|
146,181
|
|
|
$
|
619,505
|
|
|
$
|
618,404
|
|
|
|
Retail - Keyboards & Desktops
|
|
|
108,586
|
|
|
|
104,037
|
|
|
|
447,991
|
|
|
|
386,968
|
|
|
|
Retail - Audio
|
|
|
112,676
|
|
|
|
96,079
|
|
|
|
483,485
|
|
|
|
466,927
|
|
|
|
Retail - Video
|
|
|
50,083
|
|
|
|
61,721
|
|
|
|
215,657
|
|
|
|
255,015
|
|
|
|
Retail - Gaming
|
|
|
19,170
|
|
|
|
23,007
|
|
|
|
111,480
|
|
|
|
104,545
|
|
|
|
Retail - Digital Home
|
|
|
17,316
|
|
|
|
32,207
|
|
|
|
104,665
|
|
|
|
173,351
|
|
|
|
|
Total net retail sales
|
|
$
|
455,398
|
|
|
$
|
463,232
|
|
|
$
|
1,982,783
|
|
|
$
|
2,005,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
March 31,
|
|
March 31,
|
|
Share-based Compensation Expense
|
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
$
|
562
|
|
|
$
|
1,313
|
|
|
$
|
3,620
|
|
|
$
|
4,223
|
|
|
Marketing and selling
|
|
|
3,371
|
|
|
|
3,747
|
|
|
|
12,716
|
|
|
|
12,030
|
|
|
Research and development
|
|
|
1,823
|
|
|
|
2,436
|
|
|
|
7,187
|
|
|
|
7,829
|
|
|
General and administrative
|
|
|
2,393
|
|
|
|
3,374
|
|
|
|
8,006
|
|
|
|
10,764
|
|
|
Income tax benefit
|
|
|
(1,699
|
)
|
|
|
(2,752
|
)
|
|
|
(6,294
|
)
|
|
|
(8,279
|
)
|
|
Total share-based compensation expense after income taxes
|
|
$
|
6,450
|
|
|
$
|
8,118
|
|
|
$
|
25,235
|
|
|
$
|
26,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense net of tax, per share (diluted)
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
$
|
0.14
|
|
|
$
|
0.15
|
|
|
|
Constant dollar sales (sales excluding impact of
exchange rate changes)
We refer to our net sales excluding the impact of foreign currency
exchange rates as constant dollar sales. Constant dollar sales are a
non-GAAP financial measure, which is information derived from
consolidated financial information but not presented in our financial
statements prepared in accordance with U.S. GAAP. Our management uses
these non-GAAP measures in its financial and operational
decision-making, and believes these non-GAAP measures, when considered
in conjunction with the corresponding GAAP measures, facilitate a better
understanding of changes in net sales. Constant dollar sales are
calculated by translating prior period sales in each local currency at
the current period's average exchange rate for that currency.
(LOGIIR)
