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.
| 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. | ||||||||||
| 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. | ||||||||||
| LOGITECH INTERNATIONAL S.A. | ||||||||||
| (In thousands) - Unaudited | ||||||||||
| CONSOLIDATED BALANCE SHEETS | September 30, 2007 | March 31, 2007 | September 30, 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 | ||||
| LOGITECH INTERNATIONAL S.A. | ||||||
| (In thousands) - Unaudited | ||||||
| SUPPLEMENTAL FINANCIAL INFORMATION | Quarter Ended | Six Months Ended | ||||
Reconciliation of GAAP to non-GAAP Financial Measures | September 30 | September 30 | ||||
| 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. | ||||||
| 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 | |||||||||||||||||
Stock-based Compensation Expense for Employee Stock Options and Employee Stock Purchases | September 30 | September 30 | ||||||||||||||||
| 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 | ||||||||||
(LOGI – IR)
Contacts:
Joe Greenhalgh, 510-713-4430
Vice
President, Investor Relations – USA
Ben
Starkie, +41-(0) 21-863-5195
Public Relations Manager –
Europe
Nancy Morrison, 510-713-4948
Director, Corporate
Communications – USA
