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Logitech Announces Fourth Quarter and Full-Year Financial Results for FY 2013

  Logitech Announces Fourth Quarter and Full-Year Financial Results for FY
  2013

                 Improved Profitability Expected for FY 2014

Business Wire

NEWARK, Calif. & MORGES, Switzerland -- April 24, 2013

Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial
results for the fourth quarter and full year of Fiscal Year 2013.

Sales for Q4 FY 2013 were $469 million, down 12 percent from $532 million in
Q4 FY 2012. Excluding the unfavorable impact of exchange rates, sales were
down by 11 percent compared to the prior year. The Company posted an operating
loss for the fourth quarter of $37 million compared to operating income of $24
million in the same quarter a year ago. The operating loss included $16
million in restructuring charges and $6 million related to the impairment of
goodwill and other assets. The net loss for Q4 FY 2013 was $36 million ($0.23
per share) compared to net income of $28 million ($0.17 per share) in the
prior year. Gross margin for Q4 FY 2013 was 33.5 percent, down from 36.4
percent a year ago.

Logitech’s retail sales for Q4 FY 2013 decreased by 10 percent year over year,
up 2 percent in Asia, down 2 percent in the Americas and down 25 percent in
EMEA. OEM sales decreased by 21 percent and sales for the LifeSize division
decreased by 19 percent.

For the full 2013 fiscal year, ending March 31, 2013, sales were $2.1 billion,
compared to $2.3 billion in FY 2012. The Company posted an operating loss of
$252 million. Excluding impairment and restructuring charges, FY 2013 non-GAAP
operating income would have been $8 million. The net loss for the full fiscal
year was $228 million ($1.44 per share) compared to net income of $71 million
($0.41 per share) in FY 2012. Gross margin for FY 2013 was 33.7 percent
compared to 33.5 percent in FY 2012.

“Regionally, with the exception of EMEA, our retail business has begun to
stabilize,” said Bracken P. Darrell, Logitech president and chief executive
officer. “In Europe, the combination of the difficult macro-economic
environment and the very slow PC market stalled our business in Q4. For the
rest of our retail business (Americas and Asia), sales of our mice and
keyboards grew 6 percent, much better than the market for PCs, which was down
globally nearly 14 percent year over year. I was also pleased with the strong
momentum of our tablets accessories during the fourth quarter. We recently
launched a version of our best-selling Ultrathin Keyboard Cover for the iPad
mini as well as a range of new tablet folios.”

“In closing FY 2013, I believe we have taken appropriate actions to effect a
turnaround,” said Mr. Darrell. “We have narrowed our strategic focus;
restructured the company, including our LifeSize division; and prioritized our
resources to create great new products for tablets. While the PC market
continues to weigh upon parts of our business, and the ongoing economic
uncertainty in much of Europe shows no signs of improvement, our product
portfolio and indications of stabilization in the Americas and Asia, combined
with the cost savings resulting from our FY 2013 restructuring initiatives,
position us for improved profitability in FY 2014.”

Outlook

For Fiscal Year 2014, ending March 31, 2014, Logitech currently expects sales
of approximately $2 billion, operating income of approximately $50 million and
gross margin of approximately 34 percent.

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 results
for Q4 FY 2013 on Thursday, April 25, 2013 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 within the meaning of
the federal securities laws, including, without limitation, statements
regarding: improved profitability, the stabilization and turnaround of our
business, momentum of our tablets accessories, new product development, and
Fiscal Year 2014 sales, operating income and gross margin. 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; the demand of our
customers and our consumers for our products and our ability to accurately
forecast 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 in our new product
categories and sales in emerging market geographies; if sales of PC
peripherals in mature markets are less 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 there is a deterioration of business and economic conditions in one or more
of our sales regions or operating segments, 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, 2012, 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.

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               2013         2012
                                                                   
Net sales                                            $ 469,087     $ 531,962
Cost of goods sold                                    312,129     338,075 
Gross profit                                          156,958     193,887 
% of net sales                                         33.5    %     36.4    %
                                                                   
Operating expenses:
Marketing and selling                                  107,480       100,302
Research and development                               36,582        40,948
General and administrative                             28,982        28,896
Impairment of goodwill and other assets                5,688         -
Restructuring charges                                 15,506      -       
Total operating expenses                              194,238     170,146 
                                                                   
Operating income (loss)                                (37,280 )     23,741
                                                                   
Interest income, net                                   255           466
Other income, net                                     2,139       6,481   
                                                                   
Income (loss) before income taxes                      (34,886 )     30,688
Provision for income taxes                            1,028       2,402   
                                                                   
Net income (loss)                                    $ (35,914 )   $ 28,286  
                                                                   
Shares used to compute net income (loss) per
share:
Basic                                                  158,716       169,387
Diluted                                                158,716       170,401
Net income (loss) per share:
Basic                                                $ (0.23   )   $ 0.17
Diluted                                              $ (0.23   )   $ 0.17
                                                                             


LOGITECH INTERNATIONAL S.A.
                                                              
(In thousands, except per share amounts) - Unaudited
                                                                 
                                                 Twelve Months Ended March 31,
CONSOLIDATED STATEMENTS OF OPERATIONS           2013           2012
                                                                 
Net sales                                        $ 2,099,883     $ 2,316,203
Cost of goods sold                                1,392,581     1,539,614 
Gross profit                                      707,302       776,589   
% of net sales                                     33.7      %     33.5      %
                                                                 
Operating expenses:
Marketing and selling                              431,598         423,854
Research and development                           153,922         162,331
General and administrative                         113,824         118,423
Impairment of goodwill and other assets            216,688         -
Restructuring charges                             43,704        -         
Total operating expenses                          959,736       704,608   
                                                                 
Operating income (loss)                            (252,434  )     71,981
                                                                 
Interest income, net                               907             2,674
Other income (expense), net                       (2,198    )    16,622    
                                                                 
Income (loss) before income taxes                  (253,725  )     91,277
Provision for (benefit from) income taxes         (25,588   )    19,819    
                                                                 
Net income (loss)                                $ (228,137  )   $ 71,458    
                                                                 
Shares used to compute net income (loss) per
share:
Basic                                              158,468         174,648
Diluted                                            158,468         175,591
Net income (loss) per share:
Basic                                            $ (1.44     )   $ 0.41
Diluted                                          $ (1.44     )   $ 0.41
                                                                             


LOGITECH INTERNATIONAL S.A.
                                                           
(In thousands) - Unaudited
                                                              
CONSOLIDATED BALANCE SHEETS                 March 31, 2013  March 31, 2012
                                                              
Current assets
Cash and cash equivalents                    $   333,824      $   478,370
Accounts receivable                              179,565          223,104
Inventories                                      261,083          297,072
Other current assets                             57,036           65,990
Assets held for sale                            13,002          -
Total current assets                             844,510          1,064,536
Non-Current assets
Property, plant and equipment                    87,649           94,884
Goodwill                                         340,132          560,523
Other intangible assets                          26,024           53,518
Other assets                                    75,796          83,033
Total assets                                 $   1,374,111    $   1,856,494
                                                              
Current liabilities
Accounts payable                             $   265,995      $   301,111
Accrued liabilities                              185,848          186,680
Liabilities held for sale                       1,342           -
Total current liabilities                        453,185          487,791
Non-current liabilities                         187,222         218,462
Total liabilities                                640,407          706,253
                                                              
Shareholders' equity                             733,704          1,150,241
                                                             
Total liabilities and shareholders' equity   $   1,374,111    $   1,856,494
                                                                  


LOGITECH INTERNATIONAL S.A.
                                                                
(In thousands) - Unaudited
                                                                   
                                                  Three Months Ended March 31,
CONSOLIDATED STATEMENTS OF CASH FLOWS            2013             2012
                                                                   
Cash flows from operating activities:
Net income (loss)                                 $  (35,914  )    $ 28,286
Non-cash items included in net income (loss):
Depreciation                                         10,558          10,767
Amortization of other intangible assets              5,159           6,325
Impairment of goodwill and other assets              5,688           -
Investment impairment                                -               -
Inventory valuation adjustment                       4,970           -
Share-based compensation expense                     6,539           8,149
Gain on disposal of property and plant               -               (4,063  )
Loss on sale of investments                          -               9
Excess tax benefits from share-based                 -               (4      )
compensation
Deferred income taxes and other                      2,154           1,135
Changes in assets and liabilities, net of
acquisitions:
Accounts receivable                                  86,238          92,371
Inventories                                          18,632          (901    )
Other assets                                         1,012           7,232
Accounts payable                                     (75,962  )      (78,351 )
Accrued liabilities                                 (16,280  )     (28,981 )
Net cash provided by operating activities           12,794        41,974  
                                                                   
Cash flows from investing activities:
Purchases of property, plant and equipment           (7,208   )      (16,390 )
Investment in privately-held company                 (450     )      -
Proceeds from sale of property and plant             -               4,063
Purchases of trading investments                     (1,902   )      (1,928  )
Proceeds from sales of trading investments          2,154         1,879   
Net cash used in investing activities               (7,406   )     (12,376 )
                                                                   
Cash flows from financing activities:
Payment of cash dividends                            -               -
Purchases of treasury shares                         -               (82,902 )
Proceeds from sale of shares upon exercise of        7,139           7,739
options and purchase rights
Tax withholdings related to net share                (380     )      (76     )
settlements of restricted stock units
Excess tax benefits from share-based                -             4       
compensation
Net cash provided by (used) in financing            6,759         (75,235 )
activities
                                                                   
Effect of exchange rate changes on cash and         (322     )     674     
cash equivalents
Net increase (decrease) in cash and cash             11,825          (44,963 )
equivalents
Cash and cash equivalents at beginning of           321,999       523,333 
period
Cash and cash equivalents at end of period        $  333,824      $ 478,370 
                                                                             


LOGITECH INTERNATIONAL S.A.
                                                               
(In thousands) - Unaudited
                                                                  
                                                 Twelve Months Ended March 31,
CONSOLIDATED STATEMENTS OF CASH FLOWS           2013             2012
                                                                  
Cash flows from operating activities:
Net income (loss)                                $  (228,137  )   $ 71,458
Non-cash items included in net income (loss):
Depreciation                                        44,419          45,968
Amortization of other intangible assets             23,073          26,534
Impairment of goodwill and other assets             216,688         -
Investment impairment                               3,600           -
Inventory valuation adjustment                      4,970           34,074
Share-based compensation expense                    25,198          31,529
Gain on disposal of property and plant              -               (8,967   )
Gain on sale of investments                         (831      )     (6,109   )
Excess tax benefits from share-based                (26       )     (37      )
compensation
Deferred income taxes and other                     11,552          137
Changes in assets and liabilities, net of
acquisitions:
Accounts receivable                                 44,928          29,279
Inventories                                         20,076          (36,621  )
Other assets                                        (1,189    )     (4,621   )
Accounts payable                                    (36,289   )     3,622
Accrued liabilities                                (11,042   )    9,896    
Net cash provided by operating activities          116,990       196,142  
                                                                  
Cash flows from investing activities:
Purchases of property, plant and equipment          (46,945   )     (47,807  )
Acquisitions, net of cash acquired                  -               (18,814  )
Investment in privately-held companies              (4,420    )     -
Proceeds from sale of property and plant            -               8,967
Proceeds from sale of available-for-sale            917             6,550
securities
Purchases of trading investments                    (4,196    )     (7,505   )
Proceeds from sales of trading investments         4,463         7,399    
Net cash used in investing activities              (50,181   )    (51,210  )
                                                                  
Cash flows from financing activities:
Payment of cash dividends                           (133,462  )     -
Purchases of treasury shares                        (89,955   )     (156,036 )
Proceeds from sale of shares upon exercise of       15,982          17,591
options and purchase rights
Tax withholdings related to net share               (2,375    )     (966     )
settlements of restricted stock units
Excess tax benefits from share-based               26            37       
compensation
Net cash used in financing activities              (209,784  )    (139,374 )
                                                                  
Effect of exchange rate changes on cash and        (1,571    )    (5,119   )
cash equivalents
Net increase (decrease) in cash and cash            (144,546  )     439
equivalents
Cash and cash equivalents at beginning of          478,370       477,931  
period
Cash and cash equivalents at end of period       $  333,824      $ 478,370  
                                                                             


LOGITECH INTERNATIONAL S.A.
                                                            
(In thousands, except per share amounts) - Unaudited
                                                                 
                     Quarter Ended               Twelve Months Ended
                     March 31,                   March 31,
SUPPLEMENTAL
FINANCIAL           2013         2012          2013           2012
INFORMATION
                                                                 
Depreciation         $ 10,558      $ 10,767      $ 44,419        $ 45,968
Amortization of
other intangible       5,159         6,325         23,073          26,534
assets
Capital                7,208         16,390        46,945          47,807
expenditures
Impairment of
goodwill and other     5,688         -             216,688         -
assets
Restructuring          15,506        -             43,704          -
charges
                                                                 
Total operating      $ 194,238     $ 170,146     $ 959,736       $ 704,608
expenses - GAAP
Less: Impairment
of goodwill and        5,688         -             216,688         -
other assets
Less:
Restructuring         15,506      -           43,704        -         
charges
Total operating
expenses before
impairment of
goodwill and other   $ 173,044    $ 170,146    $ 699,344      $ 704,608   
assets and
restructuring
charges - Non-GAAP
                                                                 
Operating income     $ (37,280 )   $ 23,741      $ (252,434  )   $ 71,981
(loss) - GAAP
Less: Impairment
of goodwill and        5,688         -             216,688         -
other assets
Less:
Restructuring         15,506      -           43,704        -         
charges
Operating income
(loss) before
impairment of
goodwill and other   $ (16,086 )   $ 23,741     $ 7,958        $ 71,981    
assets and
restructuring
charges - Non-GAAP
                                                                 
Income (loss)
before income        $ (34,886 )   $ 30,688      $ (253,725  )   $ 91,277
taxes - GAAP
Less: Impairment
of goodwill and        5,688         -             216,688         -
other assets
Less:
Restructuring         15,506      -           43,704        -         
charges
Income (loss)
before income
taxes and
impairment of        $ (13,692 )   $ 30,688     $ 6,667        $ 91,277    
goodwill and other
assets and
restructuring
charges - Non-GAAP
                                                                 
Net income (loss)    $ (35,914 )   $ 28,286      $ (228,137  )   $ 71,458
- GAAP
Less: Impairment
of goodwill and        5,688         -             216,688         -
other assets
Less:
Restructuring         15,506      -           43,704        -         
charges
Net income (loss)
before impairment
of goodwill and      $ (14,720 )   $ 28,286     $ 32,255       $ 71,458    
other assets and
restructuring
charges - Non-GAAP
                                                                 
Net sales by
channel:
Retail               $ 407,690     $ 455,398     $ 1,821,657     $ 1,982,783
OEM                    32,493        40,993        141,186         185,959
LifeSize              28,904      35,571      137,040       147,461   
Total net sales      $ 469,087    $ 531,962    $ 2,099,883    $ 2,316,203 
                                                   -
                                                                 
Net retail sales
by product
family^(**):
Retail - Pointing    $ 128,809     $ 132,335     $ 521,083       $ 559,366
Devices
Retail - Keyboards     105,596       101,458       407,896         404,298
& Desktops
Retail - Tablet        30,783        7,128         119,804         43,693
Accessories
Retail - Audio -       57,039        70,964        271,197         309,896
PC
Retail - Audio -
Wearables &            8,542         14,069        65,826          53,140
Wireless
Retail - Video         41,063        50,017        179,340         216,387
Retail - PC Gaming     23,618        41,109        142,184         170,948
Retail - Remotes       11,382        16,895        71,641          91,000
Retail - Other        858         21,423      42,686        134,055   
Total net retail     $ 407,690    $ 455,398    $ 1,821,657    $ 1,982,783 
sales
__________________
* * Certain products within the retail product families as presented in prior
years have been reclassified to conform to the current year presentation, with
no impact on previously reported total net retail sales.
                                                                 
                     Quarter Ended               Twelve Months Ended
                     March 31,                   March 31,
Share-based
Compensation        2013          2012          2013            2012
Expense ^ (*)
                                                                 
Cost of goods sold   $ 398         $ 562         $ 2,499         $ 3,620
Marketing and          2,447         3,371         7,825           12,716
selling
Research and           1,513         1,823         7,532           7,187
development
General and            2,181         2,393         7,342           8,006
administrative
Income tax benefit    (1,266  )    (1,699  )    (5,356    )    (6,294    )
Total share-based
compensation         $ 5,273      $ 6,450      $ 19,842       $ 25,235    
expense after
income taxes
                                                                 
Share-based
compensation
expense net of       $ 0.03        $ 0.04        $ 0.13          $ 0.14
tax, per share
(diluted)
__________________
* Share-based compensation expense for the quarter ended March 31, 2013 and
twelve months ended March 31, 2013 includes a reduction of $0 and $2.2m in
expense applicable to employees terminated as a result of the restructuring
plans announced in April 2012 and March 2013.
                                                                             
Constant dollar sales (sales excluding impact of exchange rate changes) and
Non-GAAP operating income (loss), income (loss) before income taxes and net
income (loss) (excluding the FY 2013 impairment and restructuring charges)
We refer to our net sales excluding the impact of foreign currency exchange
rates as constant dollar sales. We also report non-GAAP operating expenses,
operating income (loss), income (loss) before income taxes and net income
(loss) in this press release and related materials, excluding the FY 2013
impairment of goodwill and other assets and restructuring charges. Constant
dollar sales and non-GAAP operating expenses, operating income (loss), income
(loss) before income taxes and net income (loss) are non-GAAP financial
measures, which are 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, operating expenses,
operating income (loss), income (loss) before income taxes and net income
(loss). 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. Non-GAAP operating expenses, operating income (loss), income (loss)
before income taxes and net income (loss) before impairment of goodwill and
other assets and restructuring charges can be reconciled to GAAP operating
expenses, operating income (loss), income (loss) before income taxes and net
income (loss), respectively, by adding the amount of the impairment and
restructuring charges.


(LOGIIR)

Contact:

Logitech International
Joe Greenhalgh
Vice President, Investor Relations – USA
510-713-4430
or
Nancy Morrison
Vice President, Corporate Communications – USA
510-713-4948
or
Laura Scorza
Sr. Public Relations Manager – Europe
+41-(0) 21-863-5336