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Logitech Delivers Highest Retail Sales Growth in Six Years; Profit Hits Nine-Year High

Logitech International (SIX:LOGN) (Nasdaq:LOGI) today announced financial results for the fourth quarter and full year of Fiscal Year 2017.

Q4 closed a strong fiscal year with sales for the quarter reaching $496 million. Q4 retail sales grew 17 percent in constant currency, GAAP operating income more than doubled to $22 million and non-GAAP operating income grew 61 percent to $36 million.

For the full Fiscal Year 2017, ended March 31, 2017:

  • Retail sales grew 14 percent in constant currency, the highest annual retail sales growth in six years. Retail sales grew 13 percent in USD; also a six-year high.
  • Sales were $2.21 billion, up 9 percent in USD compared to the prior year, which still included OEM sales, the business the Company exited in Q3 of the prior fiscal year.
  • GAAP operating income grew 53 percent to $197 million - the highest in nine years - compared to $129 million a year ago. GAAP earnings per share (EPS) grew 51 percent to $1.16, compared to $0.77 a year ago.
  • Non-GAAP operating income grew 33 percent to $238 million - also the highest in nine years - compared to $179 million a year ago. Non-GAAP EPS grew 35 percent to $1.32, compared to $0.98 a year ago.
  • Cash flow from operations grew 52 percent to $279 million, the highest level in seven years.

Bracken Darrell, Logitech president and chief executive officer, said, “Our FY 2017 performance demonstrates the strength of our strategy. For the fourth consecutive year, we accelerated growth in retail sales. We grew across almost all our product categories and in all our regions. Many categories - Video Collaboration, Mobile Speakers, Gaming, and Smart Home - grew double digits, and PC Peripherals saw solid growth too. And we’re just getting started. I’m excited by our pipeline of innovative products and the amazing world of opportunities unfolding in front of us.”

Vincent Pilette, Logitech CFO, said, “This is a watershed year for Logitech. We improved our financial fundamentals, delivering our highest gross margin in Company history while growing the business by 14%. That, combined with our continued investment in growth initiatives, gives Logitech a strong and exciting platform for the future.”

Outlook

Logitech confirmed its Fiscal Year 2018 outlook of high single-digit retail sales growth in constant currency and $250 to $260 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 Q4 and the full FY 2017 on Weds., April 26, 2017 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 .

Continued Operations

Logitech separated its Lifesize division from the Company on Dec. 28, 2015. Since then, the results of Lifesize have not been included in our financial statements. Except as otherwise noted, all of the results reported in this press release as well as comparisons between periods are focused on results from continuing operations and do not address the performance of Lifesize, which is reported in the Company’s financial statements under discontinued operations or total Logitech including discontinued operations for all the periods prior to the disposition of Lifesize. For more information on the impact of the Lifesize separation on Logitech’s historical results, please refer to the Financial Reporting section of Logitech’s Financial History, 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), gain (loss) on equity-method investment, investigation and related expenses, 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 2018.

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 Jaybird , Logitech G 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 the federal securities laws, including, without limitation, statements regarding: our strategy, pipeline of products, innovation, opportunities, investment in growth opportunities, platform for the future, future performance, and outlook for Fiscal Year 2018 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; 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 or our growth opportunities are more limited than we expect; if sales of PC peripherals 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 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. 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, 2016 and our Quarterly Report on Form 10-Q for fiscal quarter ended December 31, 2016, 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.

2017 Logitech, Logicool, Logi and other Logitech marks are owned by Logitech and may be registered. 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 Fiscal Years Ended
March 31, March 31,

GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

2017 2016 2017 2016
 
Net sales $ 496,165 $ 430,841 $ 2,207,040 $ 2,018,100
Cost of goods sold 311,303 288,741 1,395,211 1,337,053
Amortization of intangible assets and purchase accounting effect on inventory 1,470     6,175    
Gross profit 183,392   142,100   805,654   681,047  
Operating expenses:
Marketing and selling 99,941 77,091 379,641 319,015
Research and development 33,658 27,287 130,525 113,176
General and administrative 24,683 23,046 100,270 101,012
Amortization of intangible assets and acquisition-related costs 1,279 537 5,814 984
Change in fair value of contingent consideration for business acquisition 1,833 (8,092 )
Restructuring charges, net 67   3,784   23   17,802  
Total operating expenses 161,461   131,745   608,181   551,989  
Operating income 21,931   10,355   197,473   129,058  
Interest income, net 1,189 241 1,452 790
Other income, net 734   2,518   1,677   1,624  
Income before income taxes 23,854 13,114 200,602 131,472
Provision for (benefit from) income taxes (1,184 ) (3,896 ) 9,113   3,110  
Net income from continuing operations 25,038   17,010   191,489   128,362  
Gain (loss) from discontinued operations, net of income taxes   11,687     (9,045 )
Net income $ 25,038   $ 28,697   $ 191,489   $ 119,317  
 
Net income (loss) per share - basic:
Continuing operations $ 0.15 $ 0.10 $ 1.18 $ 0.79
Discontinued operations   0.08     (0.06 )
Net income per share - basic $ 0.15   $ 0.18   $ 1.18   $ 0.73  
 
Net income (loss) per share - diluted:
Continuing operations $ 0.15 $ 0.10 $ 1.16 $ 0.77
Discontinued operations   0.07     (0.05 )
Net income per share - diluted $ 0.15   $ 0.17   $ 1.16   $ 0.72  
 
Weighted average shares used to compute net income (loss) per share:
Basic 162,023 162,671 162,058 163,296
Diluted 166,526 165,365 165,540 165,792
 
Cash dividend per share $ $ $ 0.57 $ 0.53
 
       
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS
(In thousands) - unaudited
 
March 31, March 31,
CONDENSED CONSOLIDATED BALANCE SHEETS 2017 2016
 
Current assets:
Cash and cash equivalents $ 547,533 $ 519,195
Accounts receivable, net 174,854 142,778
Inventories 253,401 228,786
Other current assets 41,732   35,488  
Total current assets 1,017,520 926,247
Non-current assets:
Property, plant and equipment, net 85,408 92,860
Goodwill 249,741 218,224
Other intangible assets, net 47,564
Other assets 88,119   86,816  
Total assets $ 1,488,352   $ 1,324,147  
 
Current liabilities:
Accounts payable $ 274,805 $ 241,166
Accrued and other current liabilities 236,432   173,764  
Total current liabilities 511,237 414,930
Non-current liabilities:
Income taxes payable 51,797 59,734
Other non-current liabilities 83,691   89,535  
Total liabilities 646,725 564,199
 
Shareholders' equity:
Registered shares, CHF 0.25 par value: 30,148 30,148
Issued and authorized shares—173,106 at March 31, 2017 and 2016
Conditionally authorized shares—50,000 at March 31, 2017 and 2016
Additional paid-in capital 26,596 6,616
Less shares in treasury, at cost—10,727 at March 31, 2017 and 10,697 at March 31, 2016 (174,037 ) (128,407 )
Retained earnings 1,059,723 963,576
Accumulated other comprehensive loss (100,803 ) (111,985 )
Total shareholders' equity 841,627   759,948  
Total liabilities and shareholders' equity $ 1,488,352   $ 1,324,147  
 
               
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS
(In thousands) – unaudited
 
Three Months Ended Fiscal Years Ended
March 31, March 31,
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS * 2017 2016 2017 2016
 
Cash flows from operating activities:
Net income $ 25,038 $ 28,697 $ 191,489 $ 119,317
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 8,642 14,224 41,121 51,108
Amortization of intangible assets 2,749 349 9,367 1,885
Share-based compensation expense 9,536 7,476 35,890 27,351
Gain on equity method investment (22 ) (645 ) (569 ) (469 )
Loss on disposal of property, plant and equipment 107 107
Net gain on divestiture of discontinued operations (13,684 ) (13,684 )
Excess tax benefits from share-based compensation (3,304 ) (9,661 ) (2,084 )
Deferred income taxes (1,924 ) 3,690 (2,397 ) 6,604
Change in fair value of contingent consideration for business acquisition 1,833 (8,092 )
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, net 103,116 141,327 (36,298 ) 25,513
Inventories (234 ) 13,900 (15,428 ) 31,966
Other assets 1,037 7,354 (5,309 ) (1,975 )
Accounts payable (84,636 ) (126,867 ) 24,459 (58,104 )
Accrued and other liabilities (17,500 ) (43,561 ) 54,049   (4,317 )
Net cash provided by operating activities 44,438   32,260   278,728   183,111  
Cash flows from investing activities:
Purchases of property, plant and equipment (8,432 ) (6,172 ) (31,804 ) (56,615 )
Investment in privately held companies (320 ) (320 ) (960 ) (2,419 )
Payments for divestiture of discontinued operations, net of cash sold (1,395 ) (1,395 )
Changes in restricted cash (715 ) 715 (715 )
Acquisitions, net of cash acquired (66,987 )
Purchases of trading investments (1,184 ) (5,224 ) (7,052 ) (9,619 )
Proceeds from sales of trading investments 1,212   5,405   7,124   10,073  
Net cash used in investing activities (8,724 ) (8,421 ) (98,964 ) (60,690 )
Cash flows from financing activities:
Payment of cash dividends (93,093 ) (85,915 )
Purchases of treasury shares (20,022 ) (21,556 ) (83,786 ) (70,358 )
Proceeds from sales of shares upon exercise of options and purchase rights 19,219 7,205 39,574 19,767
Tax withholdings related to net share settlements of restricted stock units (5,358 ) (1,890 ) (18,412 ) (7,247 )
Excess tax benefits from share-based compensation 3,304     9,661   2,084  
Net cash used in financing activities (2,857 ) (16,241 ) (146,056 ) (141,669 )
Effect of exchange rate changes on cash and cash equivalents 1,098     2,610   (5,370 ) 1,405  
Net increase (decrease) in cash and cash equivalents 33,955     10,208   28,338   (17,843 )
Cash and cash equivalents at beginning of period 513,578   508,987   519,195   537,038  
Cash and cash equivalents at end of period $ 547,533   $ 519,195   $ 547,533   $ 519,195  
 
*Statements of consolidated cash flows include discontinued operations for the three months and the year ended March 31, 2016.
 
                       
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS
(In thousands) – unaudited
 

NET SALES

Three Months Ended Fiscal Years Ended
March 31, March 31,

SUPPLEMENTAL FINANCIAL INFORMATION

2017 2016 Change 2017 2016 Change
 
Net sales by channel:
Retail $ 496,165 $ 430,841 15 % $ 2,207,040 $ 1,947,059 13 %
OEM    

NM 

  71,041   (100 )
Total net sales $ 496,165   $ 430,841   15 $ 2,207,040   $ 2,018,100   9
 
Net retail sales by product category:
Mobile Speakers $ 37,983 $ 23,543 61 % $ 299,029 $ 229,718 30 %
Audio-PC & Wearables 59,191 46,672 27 245,249 196,013 25
Gaming 69,006 56,102 23 311,880 245,101 27
Video Collaboration 37,091 21,862 70 125,389 89,322 40
Home Control 15,216 10,527 45 65,132 59,075 10
Pointing Devices 115,912 111,179 4 498,161 492,543 1
Keyboards & Combos 118,225 105,732 12 478,049 430,190 11
Tablet & Other Accessories 16,963 30,664 (45 ) 76,314 103,886 (27 )
PC Webcams 26,470 23,952 11 106,542 98,641 8
Other (1) 108   608   (82 ) 1,295   2,570   (50 )
Total net retail sales $ 496,165   $ 430,841   15 $ 2,207,040   $ 1,947,059   13
__________________
(1) Other category includes products that we currently intend to transition out of, or have already transitioned out of, because they are no longer strategic to our business.
 
NM=Not Meaningful.
 
 
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS
(In thousands, except per share amounts) - Unaudited
       
GAAP TO NON GAAP RECONCILIATION (A) Three Months Ended Fiscal Years Ended
March 31, March 31,
SUPPLEMENTAL FINANCIAL INFORMATION 2017 2016 2017 2016
 
Gross profit – GAAP $ 183,392 $ 142,100 $ 805,654 $ 681,047
Share-based compensation expense 733 692 2,663 2,340
Amortization of intangible assets and purchase accounting effect on inventory 1,470     6,175    
Gross profit - Non-GAAP $ 185,595   $ 142,792   $ 814,492   $ 683,387  
 
Gross margin – GAAP 37.0 % 33.0 % 36.5 % 33.7 %
Gross margin - Non-GAAP 37.4 % 33.1 % 36.9 % 33.9 %
 
Operating expenses - GAAP $ 161,461 $ 131,745 $ 608,181 $ 551,989
Less: Share-based compensation expense 8,803 7,036 33,227 24,672
Less: Amortization of intangible assets and acquisition-related costs 1,279 537 5,814 984
Less: Change in fair value of contingent consideration for business acquisition 1,833 (8,092 )
Less: Restructuring charges, net 67 3,784 23 17,802
Less: Investigation and related expenses   19   612   4,140  
Operating expenses - Non-GAAP $ 149,479   $ 120,369   $ 576,597   $ 504,391  
 
% of net sales – GAAP 32.5 % 30.6 % 27.6 % 27.4 %
% of net sales - Non - GAAP 30.1 % 27.9 % 26.1 % 25.0 %
 
Operating income – GAAP $ 21,931 $ 10,355 $ 197,473 $ 129,058
Share-based compensation expense 9,536 7,728 35,890 27,012
Amortization of intangible assets 2,749 1 9,367 448
Purchase accounting effect on inventory 1,160
Acquisition-related costs 536 1,462 536
Change in fair value of contingent consideration for business acquisition 1,833 (8,092 )
Restructuring charges, net 67 3,784 23 17,802
Investigation and related expenses   19   612   4,140  
Operating income - Non - GAAP $ 36,116   $ 22,423   $ 237,895   $ 178,996  
 
% of net sales – GAAP 4.4 % 2.4 % 8.9 % 6.4 %
% of net sales - Non - GAAP 7.3 % 5.2 % 10.8 % 8.9 %
 
Net income from continuing operations - GAAP $ 25,038 $ 17,010 $ 191,489 $ 128,362
Share-based compensation expense 9,536 7,728 35,890 27,012
Amortization of intangible assets 2,749 1 9,367 448
Purchase accounting effect on inventory 1,160
Acquisition-related costs 536 1,462 536
Change in fair value of contingent consideration for business acquisition 1,833 (8,092 )
Restructuring charges, net 67 3,784 23 17,802
Investigation and related expenses 19 612 4,140
Loss (gain) on equity-method investment (22 ) (645 ) (569 ) (469 )
Non-GAAP income tax adjustment (4,226 ) (5,452 ) (12,875 ) (15,413 )
Net income from continuing operations - Non - GAAP $ 34,975   $ 22,981   $ 218,467   $ 162,418  
 
Net income from continuing operations per share:
Diluted – GAAP $ 0.15 $ 0.10 $ 1.16 $ 0.77
Diluted - Non – GAAP $ 0.21 $ 0.14 $ 1.32 $ 0.98
 
Shares used to compute net income per share:
Diluted - GAAP and Non - GAAP 166,526 165,365 165,540 165,792
 
       
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS
(In thousands) – unaudited
 
SHARE-BASED COMPENSATION EXPENSE Three Months Ended Fiscal Years Ended
March 31, March 31,
SUPPLEMENTAL FINANCIAL INFORMATION 2017 2016 2017 2016
 
Share-based Compensation Expense
Cost of goods sold $ 733 $ 692 $ 2,663 $ 2,340
Marketing and selling 4,036 2,728 14,723 9,273
Research and development 1,193 872 4,200 3,046
General and administrative 3,574 3,436 14,304 12,353
Restructuring       7  
Total share-based compensation expense 9,536 7,728 35,890 27,019
Income tax benefit (2,444 ) (2,354 ) (8,536 ) (6,297 )
Total share-based compensation expense, net of income tax $ 7,092   $ 5,374   $ 27,354   $ 20,722  
 

Note: These preliminary results for the three months and fiscal year ended March 31, 2017 are subject to adjustments, including subsequent events that may occur through the date of filing our Annual Report on Form 10-K.

(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 and year ended March 31, 2017, we excluded items in the following general categories, each of which are described below:

Share-based compensation expenses . 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 operating expenses and financial results from period to period.

Purchase accounting effect on inventory. Business combination accounting principles require us to measure acquired inventory at fair value. The fair value of inventory reflects the acquired company’s cost of manufacturing plus a portion of the expected profit margin. The non-GAAP adjustment excludes the expected profit margin component that is recorded under business combination accounting principles associated with our business acquisitions. We believe the adjustment is useful to investors because such charges are not reflective of our ongoing operations.

Acquisition-related costs and change in fair value of contingent consideration for business acquisition. 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 all incremental expenses incurred to effect a business combination. Fair value of contingent consideration is associated with our estimates of the value of earn-outs in connection with certain acquisitions. 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). These expenses are associated with re-aligning our business strategies based on current economic conditions. We have undertaken several restructuring plans in recent years. In connection with our restructuring initiatives, we incurred restructuring charges related to employee terminations, facility closures and early cancellation of certain contracts. We believe that providing the non-GAAP measures excluding these charges, as well as the GAAP measures, assists our investors because such charges (credits) are not reflective of our ongoing operating results in the current period.

Gain (loss) on equity-method investment. We recognized gain (loss) related our investments in various privately-held companies, which varies depending on the operational and financial performance of the privately-held companies in which we invested. We believe that providing the non-GAAP measures excluding these charges, as well as the GAAP measures, assists our investors because such charges are not reflective of our ongoing operations.

Investigation and related expenses. These expenses are forensic accounting, audit, consulting and legal fees related to the Audit Committee’s investigation and the formal investigation by and settlement with the Securities and Exchange Commission (SEC), together with accruals based on settlement with the SEC. We believe that providing the non-GAAP measures excluding these charges, as well as the GAAP measures, assists our investors because such charges 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 and other events; the determination of which is based upon the nature of the underlying items, the mix of income and losses in jurisdictions and the relevant tax rates in which we operate.

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)

Contact:

Logitech International
Ben Lu
Vice President, Investor Relations - USA
510-713-5568
or
Krista Todd
Vice President, External Communications - USA
510-713-5834
or
Ben Starkie
Corporate Communications - Europe
+41 (0) 79-292-3499

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