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CA-LOGITECH

23.1.2024 03:01:34 CET | Business Wire | Press release

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Logitech Announces Third Quarter Fiscal Year 2024 Results

SIX Swiss Exchange Ad hoc announcement pursuant to Art. 53 LR — Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the third quarter of Fiscal Year 2024.

  • Sales were $1.26 billion, down 1 percent in US dollars and 3 percent in constant currency, compared to the prior year.
  • GAAP operating income was $222 million, up 26 percent compared to the prior year. Non-GAAP operating income was $248 million, up 22 percent compared to the prior year.
  • GAAP earnings per share (EPS) was $1.55, up 80 percent compared to the prior year. Non-GAAP EPS was $1.53, up 34 percent compared to the prior year.
  • Cash flow from operations was $443 million, up 58 percent compared to the prior year. The quarter-ending cash balance was $1.41 billion. In the quarter, the Company returned $188 million of cash to shareholders through share repurchases.

“We delivered solid results in our third quarter,” said Hanneke Faber, Logitech chief executive officer. “Our teams executed well, continuing our long record of exceptional product innovation, market share gains, strong operational discipline and prudent financial management. But we will not be satisfied until we return to top line growth.”

“Our third-quarter results show our continued focus on operational discipline,” said Chuck Boynton, Logitech chief financial officer. “While revenue declined 3% in constant currency, we delivered strong gross margins of 42.3% and grew profitability. We generated $443 million in operating cash flow in the quarter and returned a total of $188 million to our shareholders through share repurchases.”

Outlook

Logitech raised its full-year outlook for Fiscal Year 2024:

 

Previous FY24 outlook

New FY24 outlook

Sales

$4.0 - $4.15 billion

$4.2 - $4.25 billion

Sales growth / (decline) (in US dollars, year over year)

(12%) - (9%)

(7%) - (6%)

Non-GAAP operating income

$525 - $575 million

$610 - $660 million

Non-GAAP op. inc. growth / (decline) (year over year)

(11%) - (2%)

4% - 12%

Financial Results Videoconference and Webcast

Logitech will hold a financial results videoconference to discuss the results for Q3 Fiscal Year 2024 on Tuesday, January 23, 2024 at 8:30 a.m. Eastern Standard Time and 2:30 p.m. Central European Time. A livestream of the event will be available on the Logitech corporate website at https://ir.logitech.com. This press release and the Q3 Fiscal Year 2024 Shareholder Letter are also available there.

Use of Non-GAAP Financial Information and Constant Currency

To facilitate comparisons to Logitech’s historical results, Logitech has included non-GAAP adjusted measures in this press release, which exclude share-based compensation expense, amortization of intangible assets, acquisition-related costs, restructuring charges, net, loss on investments, non-GAAP income tax adjustment, and other items detailed under “Supplemental Financial Information” after the tables below and posted to our website at https://ir.logitech.com. Logitech also presents percentage sales growth in constant currency (“CC”), a non-GAAP measure, 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, outlook 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 the full Fiscal Year 2024 non-GAAP operating income outlook.

Public Dissemination of Certain Information

Recordings of Logitech’s earnings videoconferences and certain events Logitech participates in or hosts, with members of the investment community are posted on the company’s investor relations website at https://ir.logitech.com. Additionally, Logitech provides notifications of news or announcements regarding its operations and financial performance, including its filings with the Securities and Exchange Commission (SEC), investor events, and press and earnings releases as part of its investor relations website. Logitech intends to use its investor relations website as means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD. Logitech’s corporate governance information also is available on its investor relations website.

About Logitech

Logitech helps all people pursue their passions and is committed to doing so in a way that is good for people and the planet. We design hardware and software solutions that help businesses thrive and bring people together when working, creating, gaming and streaming. Brands of Logitech include Logitech, Logitech G, Streamlabs and Ultimate Ears. 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 U.S. federal securities laws, including, without limitation, statements regarding: our preliminary financial results for the three and nine months ended December 31, 2023, Fiscal Year 2024 outlook for sales and non-GAAP operating income, and related assumptions. The forward-looking statements in this press release are subject to 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: macroeconomic and geopolitical conditions and other factors and their impact, for example changes in inflation levels and monetary policies; our expectations regarding our expense reduction efforts, including the timing thereof; changes in secular trends that impact our business; 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 demand variability, supply shortages and other supply chain challenges; the effect of logistics challenges, including disruptions in transportation lines; 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 we are not able to maintain and enhance our brands; if our products and marketing strategies fail to separate our products from competitors’ products; if we do not efficiently manage our spending; our expectations regarding our restructuring efforts, including the timing thereof; 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 regulations, policies and agreements and the imposition of tariffs that affect our products or operations and our ability to mitigate; if we do not successfully execute on strategic acquisitions and investments; risks associated with acquisitions; and the effect of changes to our effective income tax 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 (“SEC”), including our Annual Report on Form 10-K for the fiscal year ended March 31, 2023, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, and other reports filed with the SEC, 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
December 31,

 

Nine months ended
December 31,

GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

1,255,473

 

 

$

1,269,925

 

$

3,286,980

 

 

$

3,578,741

 

Cost of goods sold

 

 

726,252

 

 

 

789,489

 

 

 

1,937,367

 

 

 

2,193,735

 

Amortization of intangible assets

 

 

2,441

 

 

 

3,168

 

 

 

8,569

 

 

 

9,355

 

Gross profit

 

 

526,780

 

 

 

477,268

 

 

 

1,341,044

 

 

 

1,375,651

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Marketing and selling

 

 

189,175

 

 

 

196,653

 

 

 

544,716

 

 

 

628,122

 

Research and development

 

 

72,704

 

 

 

65,640

 

 

 

211,822

 

 

 

210,166

 

General and administrative

 

 

39,711

 

 

 

29,766

 

 

 

116,546

 

 

 

92,215

 

Amortization of intangible assets and acquisition-related costs

 

 

2,276

 

 

 

2,810

 

 

 

8,279

 

 

 

9,052

 

Restructuring charges, net

 

 

839

 

 

 

5,654

 

 

 

2,562

 

 

 

16,471

 

Total operating expenses

 

 

304,705

 

 

 

300,523

 

 

 

883,925

 

 

 

956,026

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

222,075

 

 

 

176,745

 

 

 

457,119

 

 

 

419,625

 

Interest income

 

 

12,826

 

 

 

4,665

 

 

 

34,508

 

 

 

9,573

 

Other income (expense), net

 

 

189

 

 

 

1,406

 

 

 

(13,827

)

 

 

(18,367

)

Income before income taxes

 

 

235,090

 

 

 

182,816

 

 

 

477,800

 

 

 

410,831

 

Provision for (benefit from) income taxes

 

 

(9,594

)

 

 

42,663

 

 

 

33,272

 

 

 

87,751

 

Net income

 

$

244,684

 

 

$

140,153

 

 

$

444,528

 

 

$

323,080

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

1.57

 

 

$

0.87

 

 

$

2.82

 

 

$

1.98

 

Diluted

 

$

1.55

 

 

$

0.86

 

 

$

2.80

 

 

$

1.96

 

 

 

 

 

 

 

 

 

 

Weighted average shares used to compute net income per share:

 

 

 

 

 

 

 

 

Basic

 

 

155,933

 

 

 

161,244

 

 

 

157,568

 

 

 

163,042

 

Diluted

 

 

157,440

 

 

 

162,529

 

 

 

158,843

 

 

164,427

LOGITECH INTERNATIONAL S.A.

 

 

 

 

PRELIMINARY RESULTS*

 

 

 

 

(In thousands, except per share amounts) - unaudited

 

 

 

 

 

 

 

 

 

 

 

December 31

 

March 31,

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

2023

 

 

 

2023

 

 

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

1,412,650

 

 

$

1,149,023

 

Accounts receivable, net

 

 

685,777

 

 

 

630,382

 

Inventories

 

 

447,262

 

 

 

682,893

 

Other current assets

 

 

150,754

 

 

 

142,876

 

Total current assets

 

 

2,696,443

 

 

 

2,605,174

 

 

 

 

 

 

Non-current assets:

 

 

 

 

Property, plant and equipment, net

 

 

119,200

 

 

 

121,503

 

Goodwill

 

 

463,978

 

 

 

454,610

 

Other intangible assets, net

 

 

53,724

 

 

 

63,173

 

Other assets

 

 

326,594

 

 

 

316,293

 

Total assets

 

$

3,659,939

 

 

$

3,560,753

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

527,988

 

 

$

406,968

 

Accrued and other current liabilities

 

 

673,435

 

 

 

643,139

 

Total current liabilities

 

 

1,201,423

 

 

 

1,050,107

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

Income taxes payable

 

 

111,924

 

 

 

106,391

 

Other non-current liabilities

 

 

156,491

 

 

 

146,695

 

Total liabilities

 

 

1,469,838

 

 

 

1,303,193

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

Registered shares, CHF 0.25 par value:

 

 

30,148

 

 

 

30,148

 

Issued shares — 173,106 at December 31, 2023 and March 31, 2023

 

 

 

 

Additional shares that may be issued out of conditional capital — 50,000 at December 31, 2023 and March 31, 2023

 

 

 

 

Additional shares that may be issued out of authorized capital — 17,311 at December 31, 2023 and March 31, 2023

 

 

 

 

Additional paid-in capital

 

 

60,892

 

 

 

127,380

 

Shares in treasury, at cost — 18,108 at December 31, 2023 and 13,763 at March 31, 2023

 

 

(1,251,314

)

 

 

(977,266

)

Retained earnings

 

 

3,434,904

 

 

 

3,177,575

 

Accumulated other comprehensive loss

 

 

(84,529

)

 

 

(100,277

)

Total shareholders’ equity

 

 

2,190,101

 

 

 

2,257,560

 

Total liabilities and shareholders’ equity

 

$

3,659,939

 

 

$

3,560,753

 

LOGITECH INTERNATIONAL S.A.

 

 

 

 

 

 

 

 

PRELIMINARY RESULTS*

 

 

 

 

 

 

 

 

(In thousands) - unaudited

 

 

 

 

 

 

 

 

 

 

Three months ended
December 31,

 

Nine months ended
December 31,

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

244,684

 

 

$

140,153

 

 

$

444,528

 

 

$

323,080

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

14,739

 

 

 

19,410

 

 

 

48,874

 

 

 

56,698

 

Amortization of intangible assets

 

 

5,074

 

 

 

5,929

 

 

 

16,583

 

 

 

18,173

 

Loss on investments

 

 

604

 

 

 

1,488

 

 

 

12,213

 

 

 

13,065

 

Share-based compensation expense

 

 

20,613

 

 

 

15,805

 

 

 

64,192

 

 

 

51,740

 

Deferred income taxes

 

 

(20,623

)

 

 

21,188

 

 

 

(9,515

)

 

 

24,228

 

Other

 

 

236

 

 

 

1,293

 

 

 

336

 

 

 

1,411

 

Changes in assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(11,424

)

 

 

(1,638

)

 

 

(46,786

)

 

 

(123,547

)

Inventories

 

 

91,600

 

 

 

104,519

 

 

 

237,969

 

 

 

126,309

 

Other assets

 

 

(8,301

)

 

 

16,161

 

 

 

3,698

 

 

 

20,918

 

Accounts payable

 

 

32,361

 

 

 

(56,494

)

 

 

120,383

 

 

 

(134,848

)

Accrued and other liabilities

 

 

73,389

 

 

 

12,097

 

 

 

13,536

 

 

 

(60,060

)

Net cash provided by operating activities

 

 

442,952

 

 

 

279,911

 

 

 

906,011

 

 

 

317,167

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(10,854

)

 

 

(23,738

)

 

 

(45,585

)

 

 

(69,122

)

Investment in privately held companies

 

 

(50

)

 

 

(351

)

 

 

(406

)

 

 

(2,626

)

Acquisitions, net of cash acquired

 

 

 

 

 

(2,688

)

 

 

(14,138

)

 

 

(8,527

)

Purchases of deferred compensation investments

 

 

(5,345

)

 

 

(2,687

)

 

 

(7,893

)

 

 

(5,186

)

Proceeds from sales of deferred compensation investments

 

 

5,571

 

 

 

2,314

 

 

 

8,193

 

 

 

4,750

 

Net cash used in investing activities

 

 

(10,678

)

 

 

(27,150

)

 

 

(59,829

)

 

 

(80,711

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Payment of cash dividends

 

 

 

 

 

 

 

 

(182,305

)

 

 

(158,680

)

Payment of contingent consideration for business acquisition

 

 

 

 

 

 

 

 

(5,002

)

 

 

(5,954

)

Purchases of registered shares

 

 

(187,834

)

 

 

(90,170

)

 

 

(376,775

)

 

 

(327,731

)

Proceeds from exercises of stock options and purchase rights

 

 

 

 

 

3,214

 

 

 

15,319

 

 

 

16,064

 

Tax withholdings related to net share settlements of restricted stock units

 

 

(2,372

)

 

 

(1,992

)

 

 

(28,596

)

 

 

(28,734

)

Other financing activities

 

 

 

 

 

 

 

 

(1,116

)

 

 

 

Net cash used in financing activities

 

 

(190,206

)

 

 

(88,948

)

 

 

(578,475

)

 

 

(505,035

)

Effect of exchange rate changes on cash and cash equivalents

 

 

6,678

 

 

 

3,817

 

 

 

(4,080

)

 

 

(24,006

)

Net increase (decrease) in cash and cash equivalents

 

 

248,746

 

 

 

167,630

 

 

 

263,627

 

 

 

(292,585

)

Cash and cash equivalents, beginning of the period

 

 

1,163,904

 

 

 

868,501

 

 

 

1,149,023

 

 

 

1,328,716

 

Cash and cash equivalents, end of the period

 

$

1,412,650

 

 

$

1,036,131

 

 

$

1,412,650

 

 

$

1,036,131

 

LOGITECH INTERNATIONAL S.A.

 

 

 

 

 

 

 

 

 

 

 

 

PRELIMINARY RESULTS*

 

 

 

 

 

 

 

 

 

 

(In thousands) - unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL FINANCIAL INFORMATION

 

Three months ended December 31,

 

Nine months ended December 31,

NET SALES

 

2023

 

2022 (1)

 

Change

 

2023

 

2022 (1)

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales by product category:

 

 

 

 

 

 

 

 

 

 

 

 

Gaming (2)

 

$

409,043

 

$

411,927

 

(1

)%

 

$

957,576

 

$

1,031,876

 

(7

)%

Keyboards & Combos

 

 

229,432

 

 

220,059

 

4

 

 

 

605,201

 

 

648,632

 

(7

)

Pointing Devices

 

 

206,180

 

 

199,106

 

4

 

 

 

572,310

 

 

567,589

 

1

 

Video Collaboration

 

 

169,522

 

 

173,516

 

(2

)

 

 

461,257

 

 

534,347

 

(14

)

Webcams

 

 

85,851

 

 

94,252

 

(9

)

 

 

249,273

 

 

305,532

 

(18

)

Tablet Accessories

 

 

64,239

 

 

65,157

 

(1

)

 

 

198,252

 

 

185,945

 

7

 

Headsets

 

 

41,762

 

 

46,736

 

(11

)

 

 

123,023

 

 

137,429

 

(10

)

Other (3)

 

 

49,444

 

 

59,172

 

(16

)

 

 

120,088

 

 

167,391

 

(28

)

Total Net Sales

 

$

1,255,473

 

$

1,269,925

 

(1

)%

 

$

3,286,980

 

$

3,578,741

 

(8

)%

(1)

 

The Company has reclassified certain prior period amounts to conform to the current period presentation.

(2)

 

Gaming includes streaming services revenue generated by Streamlabs.

(3)

 

Other primarily consists of mobile speakers and PC speakers.

LOGITECH INTERNATIONAL S.A.

 

 

 

 

 

 

 

 

PRELIMINARY RESULTS*

 

 

 

 

 

 

 

 

(In thousands, except per share amounts) - unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL FINANCIAL INFORMATION

 

Three months ended
December 31,

 

Nine months ended
December 31,

GAAP TO NON-GAAP RECONCILIATION(A)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

 

Gross profit - GAAP

 

$

526,780

 

 

$

477,268

 

 

$

1,341,044

 

 

$

1,375,651

 

Share-based compensation expense

 

 

2,189

 

 

 

1,324

 

 

 

6,066

 

 

 

4,228

 

Amortization of intangible assets

 

 

2,441

 

 

 

3,168

 

 

 

8,569

 

 

 

9,355

 

Gross profit - Non-GAAP

 

$

531,410

 

 

$

481,760

 

 

$

1,355,679

 

 

$

1,389,234

 

 

 

 

 

 

 

 

 

 

Gross margin - GAAP

 

 

42.0

%

 

 

37.6

%

 

 

40.8

%

 

 

38.4

%

Gross margin - Non-GAAP

 

 

42.3

%

 

 

37.9

%

 

 

41.2

%

 

 

38.8

%

 

 

 

 

 

 

 

 

 

Operating expenses - GAAP

 

$

304,705

 

 

$

300,523

 

 

$

883,925

 

 

$

956,026

 

Less: Share-based compensation expense

 

 

18,424

 

 

 

14,481

 

 

 

58,126

 

 

 

47,512

 

Less: Amortization of intangible assets and acquisition-related costs

 

 

2,276

 

 

 

2,810

 

 

 

8,279

 

 

 

9,052

 

Less: Restructuring charges, net

 

 

839

 

 

 

5,654

 

 

 

2,562

 

 

 

16,471

 

Operating expenses - Non-GAAP

 

$

283,166

 

 

$

277,578

 

 

$

814,958

 

 

$

882,991

 

 

 

 

 

 

 

 

 

 

% of net sales - GAAP

 

 

24.3

%

 

 

23.7

%

 

 

26.9

%

 

 

26.7

%

% of net sales - Non-GAAP

 

 

22.6

%

 

 

21.9

%

 

 

24.8

%

 

 

24.7

%

 

 

 

 

 

 

 

 

 

Operating income - GAAP

 

$

222,075

 

 

$

176,745

 

 

$

457,119

 

 

$

419,625

 

Share-based compensation expense

 

 

20,613

 

 

 

15,805

 

 

 

64,192

 

 

 

51,740

 

Amortization of intangible assets and acquisition-related costs

 

 

4,717

 

 

 

5,978

 

 

 

16,848

 

 

 

18,407

 

Restructuring charges, net

 

 

839

 

 

 

5,654

 

 

 

2,562

 

 

 

16,471

 

Operating income - Non-GAAP

 

$

248,244

 

 

$

204,182

 

 

$

540,721

 

 

$

506,243

 

 

 

 

 

 

 

 

 

 

% of net sales - GAAP

 

 

17.7

%

 

 

13.9

%

 

 

13.9

%

 

 

11.7

%

% of net sales - Non-GAAP

 

 

19.8

%

 

 

16.1

%

 

 

16.5

%

 

 

14.1

%

 

 

 

 

 

 

 

 

 

Net income - GAAP

 

$

244,684

 

 

$

140,153

 

 

$

444,528

 

 

$

323,080

 

Share-based compensation expense

 

 

20,613

 

 

 

15,805

 

 

 

64,192

 

 

 

51,740

 

Amortization of intangible assets and acquisition-related costs

 

 

4,717

 

 

 

5,978

 

 

 

16,848

 

 

 

18,407

 

Restructuring charges, net

 

 

839

 

 

 

5,654

 

 

 

2,562

 

 

 

16,471

 

Loss on investments

 

 

604

 

 

 

1,488

 

 

 

12,213

 

 

 

13,065

 

Non-GAAP income tax adjustment

 

 

(29,963

)

 

 

16,230

 

 

 

(22,033

)

 

 

23,296

 

Net income - Non-GAAP

 

$

241,494

 

 

$

185,308

 

 

$

518,310

 

 

$

446,059

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

Diluted - GAAP

 

$

1.55

 

 

$

0.86

 

 

$

2.80

 

 

$

1.96

 

Diluted - Non-GAAP

 

$

1.53

 

 

$

1.14

 

 

$

3.26

 

 

$

2.71

 

 

 

 

 

 

 

 

 

 

Shares used to compute net income per share:

 

 

 

 

 

 

 

 

Diluted - GAAP and Non-GAAP

 

 

157,440

 

 

 

162,529

 

 

 

158,843

 

 

 

164,427

 

LOGITECH INTERNATIONAL S.A.

 

 

 

 

 

 

 

 

PRELIMINARY RESULTS*

 

 

 

 

 

 

 

 

(In thousands) - unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL FINANCIAL INFORMATION

 

Three months ended
December 31,

 

Nine months ended
December 31,

SHARE-BASED COMPENSATION EXPENSE

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

 

Share-based Compensation Expense

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

2,189

 

 

$

1,324

 

 

$

6,066

 

 

$

4,228

 

Marketing and selling

 

 

8,878

 

 

 

8,014

 

 

 

28,623

 

 

 

25,240

 

Research and development

 

 

4,421

 

 

 

2,756

 

 

 

13,568

 

 

 

11,568

 

General and administrative

 

 

5,125

 

 

 

3,711

 

 

 

15,935

 

 

 

10,704

 

Total share-based compensation expense

 

 

20,613

 

 

 

15,805

 

 

 

64,192

 

 

 

51,740

 

Income tax benefit

 

 

(3,391

)

 

 

(3,276

)

 

 

(11,257

)

 

 

(7,496

)

Total share-based compensation expense, net of income tax benefit

 

$

17,222

 

 

$

12,529

 

 

$

52,935

 

 

$

44,244

 

*Note: These preliminary results for the three and nine months ended December 31, 2023 are subject to adjustments, including subsequent events that may occur through the date of filing our Quarterly Report on Form 10-Q.

(A) Non-GAAP Financial Measures

To supplement our condensed consolidated financial results prepared in accordance with GAAP, we use a number of financial measures, both GAAP and non-GAAP, in analyzing and assessing our overall business performance, for making operating decisions and for forecasting and planning future periods. We consider the use of non-GAAP financial measures helpful in assessing our current financial performance, ongoing operations and prospects for the future as well as understanding financial and business trends relating to our financial condition and results of operations.

While we use non-GAAP financial measures as a tool to enhance our understanding of certain aspects of our financial performance and to provide incremental insight into the underlying factors and trends affecting both our performance and our cash-generating potential, we do not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial measures. Consistent with this approach, we believe that disclosing non-GAAP financial measures to the readers of our financial statements provides useful supplemental data that, while not a substitute for GAAP financial measures, can offer insight in the review of our financial and operational performance and enables investors to more fully understand trends in our current and future performance. In assessing our business during the quarter ended December 31, 2023 and prior periods presented, we excluded items in the following general categories, each of which are described below:

Share-based compensation expense. We believe that providing non-GAAP measures excluding share-based compensation expense, in addition to the GAAP measures, allows for a more transparent comparison of our financial results from period to period. We prepare and maintain our budgets and forecasts for future periods on a basis consistent with this non-GAAP financial measure. Further, companies use a variety of types of equity awards as well as a variety of methodologies, assumptions and estimates to determine share-based compensation expense. We believe that excluding share-based compensation expense enhances our ability and the ability of investors to understand the impact of non-cash share-based compensation on our operating results and to compare our results against the results of other companies.

Amortization of intangible assets. We incur intangible asset amortization expense, primarily in connection with our acquisitions of various businesses and technologies. The amortization of purchased intangibles varies depending on the level of acquisition activity. We exclude these various charges in budgeting, planning and forecasting future periods and we believe that providing the non-GAAP measures excluding these various non-cash charges, as well as the GAAP measures, provides additional insight when comparing our gross profit, operating expenses, and financial results from period to period.

Acquisition-related costs. We incurred expenses and credits in connection with our acquisitions which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. Acquisition-related costs include certain incremental expenses incurred to effect a business combination. We believe that providing the non-GAAP measures excluding these costs and credits, as well as the GAAP measures, assists our investors because such costs are not reflective of our ongoing operating results.

Restructuring charges (credits), net. These expenses are associated with restructuring plans, and will vary based on the initiatives in place during any given period. Restructuring charges may include costs related to employee terminations, facility closures and early cancellation of certain contracts as well as other costs resulting from our restructuring initiatives. We believe that providing the non-GAAP measures excluding these items, as well as the GAAP measures, assists our investors because such charges (credits) are not reflective of our ongoing operating results.

Loss (gain) on investments. We recognize losses (gains) related to our investments in various companies, which vary depending on the operational and financial performance of the companies in which we invest. These amounts include our losses (earnings) on equity method investments, investment impairments and losses (gains) resulting from sales or other events related to our investments. We believe that providing the non-GAAP measures excluding these items, as well as the GAAP measures, assists our investors because such losses (gains) are not reflective of our ongoing operations.

Non-GAAP income tax adjustment. Non-GAAP income tax adjustment primarily measures the income tax effect of non-GAAP adjustments excluded above as well as the income tax impact of non-recurring deferred taxes, tax settlements, and other non-routine tax events, the determination of which is based upon the nature of the underlying items. For the three and nine months ended December 31, 2023, non-GAAP income tax adjustment included the tax benefit from a remeasurement of the tax basis of goodwill under the Swiss Federal Act on Tax Reform and AHV Financing (“TRAF”) based on an agreement reached with the Swiss Tax Authority during the three months ended December 31, 2023.

Each of the non-GAAP financial measures described above, and used in this press release, should not be considered in isolation from, or as a substitute for, a measure of financial performance prepared in accordance with GAAP. Further, investors are cautioned that there are inherent limitations associated with the use of each of these non-GAAP financial measures as an analytical tool. In particular, these non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and many of the adjustments to the GAAP financial measures reflect the exclusion of items that are recurring and may be reflected in the Company’s financial results for the foreseeable future. We compensate for these limitations by providing specific information in the reconciliation included in this press release regarding the GAAP amounts excluded from the non-GAAP financial measures. In addition, as noted above, we evaluate the non-GAAP financial measures together with the most directly comparable GAAP financial information.

Additional Supplemental Financial Information - Constant Currency

In addition, Logitech 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.

(LOGIIR)

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