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     448  0 Kommentare Logitech Delivers Solid Second Quarter Growth and Profitability

    Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the second quarter of Fiscal Year 2020.

    • Q2 sales were $720 million, up 4 percent in US dollars and 6 percent in constant currency, compared to Q2 of the prior year.
    • Q2 GAAP operating income grew 4 percent to $68 million, compared to $65 million in the same quarter a year ago. Q2 GAAP earnings per share (EPS) grew 13 percent to $0.43, compared to $0.38 in the same quarter a year ago.
    • Q2 non-GAAP operating income grew 6 percent to $89 million, compared to $85 million in the same quarter a year ago. Q2 non-GAAP EPS grew 2 percent to $0.50, compared to $0.49 in the same quarter a year ago.
    • Cash flow from operations was $107 million, compared to $85 million in the same period a year ago.

    “Our solid Q2 demonstrates Logitech’s resilience as we continue to execute on our strategy,” said Bracken Darrell, Logitech president and chief executive officer. “This quarter, we delivered record sales in Video Collaboration, which grew nearly 60 percent, as well as strong growth in our PC Peripherals categories. We continue to perform in spite of the challenging macroeconomic environment and are confirming our annual guidance heading into the second half of the fiscal year.”

    Outlook

    Logitech confirmed its Fiscal Year 2020 outlook of mid to high single-digit sales growth in constant currency and $375 million to $385 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 Q2 FY 2020 on Tuesday, October 22, 2019 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.

    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), loss (gain) on investments, 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 2020.

    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 Logitech, Logitech G, ASTRO Gaming Ultimate Ears, Jaybird, and Blue Microphones. 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 U.S. federal securities laws, including, without limitation, statements regarding: our preliminary financial results for the three and six months ended September 30, 2019 and outlook for Fiscal Year 2020 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; 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 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; changes in trade policies and agreements and the imposition of tariffs that affect our products or operations and our ability to mitigate; risks associated with acquisitions. 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, 2019 and our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2019, 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

     

    Six Months Ended

     

     

    September 30,

     

    September 30,

    GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

     

    2019

     

    2018

     

    2019

     

    2018

     

     

     

     

     

     

     

     

     

    Net sales

     

    $

    719,691

     

     

    $

    691,146

     

     

    $

    1,363,916

     

     

    $

    1,299,626

     

    Cost of goods sold

     

    444,344

     

     

    432,063

     

     

    846,322

     

     

    814,234

     

    Amortization of intangible assets and purchase accounting effect on inventory

     

    3,271

     

     

    2,966

     

     

    6,542

     

     

    5,338

     

    Gross profit

     

    272,076

     

     

    256,117

     

     

    511,052

     

     

    480,054

     

     

     

     

     

     

     

     

     

     

    Operating expenses:

     

     

     

     

     

     

     

     

    Marketing and selling

     

    134,155

     

     

    121,801

     

     

    257,188

     

     

    236,385

     

    Research and development

     

    41,964

     

     

    39,542

     

     

    84,207

     

     

    78,529

     

    General and administrative

     

    24,048

     

     

    25,206

     

     

    46,207

     

     

    50,679

     

    Amortization of intangible assets and acquisition-related costs

     

    4,218

     

     

    4,317

     

     

    7,814

     

     

    6,838

     

    Restructuring charges (credit), net

     

    (364

    )

     

    119

     

     

    114

     

     

    10,040

     

    Total operating expenses

     

    204,021

     

     

    190,985

     

     

    395,530

     

     

    382,471

     

     

     

     

     

     

     

     

     

     

    Operating income

     

    68,055

     

     

    65,132

     

     

    115,522

     

     

    97,583

     

    Interest income

     

    2,390

     

     

    1,858

     

     

    4,943

     

     

    4,227

     

    Other income (expense), net

     

    (110

    )

     

    3,389

     

     

    1,751

     

     

    1,818

     

    Income before income taxes

     

    70,335

     

     

    70,379

     

     

    122,216

     

     

    103,628

     

    Provision for (benefit from) income taxes (A)

     

    (2,598

    )

     

    6,203

     

     

    3,938

     

     

    986

     

    Net income

     

    $

    72,933

     

     

    $

    64,176

     

     

    $

    118,278

     

     

    $

    102,642

     

     

     

     

     

     

     

     

     

     

    Net income per share:

     

     

     

     

     

     

     

     

    Basic

     

    $

    0.44

     

     

    $

    0.39

     

     

    $

    0.71

     

     

    $

    0.62

     

    Diluted

     

    $

    0.43

     

     

    $

    0.38

     

     

    $

    0.70

     

     

    $

    0.61

     

     

     

     

     

     

     

     

     

     

    Weighted average shares used to compute net income per share:

     

     

     

     

     

     

     

     

    Basic

     

    166,662

     

     

    165,630

     

     

    166,484

     

     

    165,474

     

    Diluted

     

    169,027

     

     

    169,234

     

     

    168,914

     

     

    168,996

     

    LOGITECH INTERNATIONAL S.A.

    PRELIMINARY RESULTS *

    (In thousands) - unaudited

     

    September 30,

    March 31,

    CONDENSED CONSOLIDATED BALANCE SHEETS

     

    2019

     

    2019

     

     

     

     

     

    Current assets:

     

     

     

     

    Cash and cash equivalents

     

    $

    574,464

     

     

    $

    604,516

     

    Accounts receivable, net

     

    465,969

     

     

    383,309

     

    Inventories

     

    338,314

     

     

    293,495

     

    Other current assets

     

    79,630

     

     

    69,116

     

    Total current assets

     

    1,458,377

     

     

    1,350,436

     

    Non-current assets:

     

     

     

     

    Property, plant and equipment, net

     

    75,568

     

     

    78,552

     

    Goodwill

     

    343,686

     

     

    343,684

     

    Other intangible assets, net

     

    105,264

     

     

    118,999

     

    Other assets (B)

     

    173,425

     

     

    132,453

     

    Total assets

     

    $

    2,156,320

     

     

    $

    2,024,124

     

     

     

     

     

     

    Current liabilities:

     

     

     

     

    Accounts payable

     

    $

    411,043

     

     

    $

    283,922

     

    Accrued and other current liabilities (B)

     

    424,963

     

     

    433,897

     

    Total current liabilities

     

    836,006

     

     

    717,819

     

    Non-current liabilities:

     

     

     

     

    Income taxes payable

     

    36,374

     

     

    36,384

     

    Other non-current liabilities (B)

     

    116,403

     

     

    93,582

     

    Total liabilities

     

    988,783

     

     

    847,785

     

     

     

     

     

     

    Shareholders’ equity:

     

     

     

     

    Registered shares, CHF 0.25 par value:

     

    30,148

     

     

    30,148

     

    Issued shares — 173,106 at September 30 and March 31, 2019

     

     

     

     

    Additional shares that may be issued out of conditional capital — 50,000 at September 30 and March 31, 2019

     

     

     

     

    Additional shares that may be issued out of authorized capital — 34,621 at September 30 and March 31, 2019

     

     

     

     

    Additional paid-in capital

     

    50,913

     

     

    56,655

     

    Shares in treasury, at cost — 6,203 at September 30, 2019 and 7,244 at March 31, 2019

     

    (163,728

    )

     

    (169,802

    )

    Retained earnings

     

    1,359,134

     

     

    1,365,036

     

    Accumulated other comprehensive loss

     

    (108,930

    )

     

    (105,698

    )

    Total shareholders’ equity

     

    1,167,537

     

     

    1,176,339

     

    Total liabilities and shareholders’ equity

     

    $

    2,156,320

     

     

    $

    2,024,124

     

    LOGITECH INTERNATIONAL S.A.

    PRELIMINARY RESULTS *

    (In thousands) - unaudited

     

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    September 30,

     

    September 30,

    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

     

    2019

     

    2018

     

    2019

     

    2018

     

     

     

     

     

     

     

     

     

    Cash flows from operating activities:

     

     

     

     

     

     

     

     

    Net income

     

    $

    72,933

     

     

    $

    64,176

     

     

    $

    118,278

     

     

    $

    102,642

     

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

     

     

     

     

     

     

     

     

    Depreciation

     

    10,584

     

     

    11,196

     

     

    21,386

     

     

    21,895

     

    Amortization of intangible assets

     

    6,868

     

     

    5,448

     

     

    13,735

     

     

    10,341

     

    Loss (gain) on investments

     

    274

     

     

    (395

    )

     

    63

     

     

    (382

    )

    Share-based compensation expense

     

    14,252

     

     

    12,049

     

     

    26,470

     

     

    25,308

     

    Deferred income taxes

     

    (5,597

    )

     

    (156

    )

     

    (8,978

    )

     

    (9,815

    )

    Other

     

    2

     

     

    (49

    )

     

    (2

    )

     

    75

     

    Changes in assets and liabilities, net of acquisitions:

     

     

     

     

     

     

     

     

    Accounts receivable, net

     

    (51,691

    )

     

    (64,918

    )

     

    (85,955

    )

     

    (133,475

    )

    Inventories

     

    (45,092

    )

     

    (66,201

    )

     

    (47,773

    )

     

    (84,401

    )

    Other assets

     

    (8,696

    )

     

    (6,831

    )

     

    (14,083

    )

     

    (11,056

    )

    Accounts payable

     

    73,509

     

     

    86,998

     

     

    129,101

     

     

    138,186

     

    Accrued and other liabilities

     

    39,157

     

     

    43,621

     

     

    (9,223

    )

     

    37,902

     

    Net cash provided by operating activities

     

    106,503

     

     

    84,938

     

     

    143,019

     

     

    97,220

     

    Cash flows from investing activities:

     

     

     

     

     

     

     

     

    Purchases of property, plant and equipment

     

    (8,752

    )

     

    (9,624

    )

     

    (18,092

    )

     

    (18,368

    )

    Investment in privately held companies

     

     

     

    (281

    )

     

    (170

    )

     

    (506

    )

    Acquisitions, net of cash acquired

     

    (366

    )

     

    (133,665

    )

     

    (366

    )

     

    (133,908

    )

    Purchases of short-term investments

     

     

     

    (1,505

    )

     

     

     

    (1,505

    )

    Purchases of trading investments

     

    (1,370

    )

     

    (1,222

    )

     

    (2,525

    )

     

    (3,722

    )

    Proceeds from sales of trading investments

     

    1,375

     

     

    1,327

     

     

    2,571

     

     

    4,194

     

    Net cash used in investing activities

     

    (9,113

    )

     

    (144,970

    )

     

    (18,582

    )

     

    (153,815

    )

    Cash flows from financing activities:

     

     

     

     

     

     

     

     

    Payment of cash dividends

     

    (124,180

    )

     

    (113,971

    )

     

    (124,180

    )

     

    (113,971

    )

    Purchases of registered shares

     

     

     

    (9,919

    )

     

    (15,127

    )

     

    (19,901

    )

    Proceeds from exercises of stock options and purchase rights

     

    8,938

     

     

    8,903

     

     

    9,331

     

     

    10,007

     

    Tax withholdings related to net share settlements of restricted stock units

     

    (1,538

    )

     

    (2,299

    )

     

    (20,908

    )

     

    (27,380

    )

    Net cash used in financing activities

     

    (116,780

    )

     

    (117,286

    )

     

    (150,884

    )

     

    (151,245

    )

    Effect of exchange rate changes on cash and cash equivalents

     

    (3,102

    )

     

    (1,848

    )

     

    (3,605

    )

     

    (9,157

    )

    Net decrease in cash and cash equivalents

     

    (22,492

    )

     

    (179,166

    )

     

    (30,052

    )

     

    (216,997

    )

    Cash and cash equivalents, beginning of the period

     

    596,956

     

     

    604,116

     

     

    604,516

     

     

    641,947

     

    Cash and cash equivalents, end of the period

     

    $

    574,464

     

     

    $

    424,950

     

     

    $

    574,464

     

     

    $

    424,950

     

    LOGITECH INTERNATIONAL S.A.

    PRELIMINARY RESULTS *

    (In thousands) - unaudited

     

     

     

     

     

     

     

     

     

     

     

     

     

    NET SALES

     

    Three Months Ended

     

    Six Months Ended

     

     

    September 30,

     

    September 30,

    SUPPLEMENTAL FINANCIAL INFORMATION

     

    2019

     

    2018

     

    Change

     

    2019

     

    2018

     

    Change

     

     

     

     

     

     

     

     

     

     

     

     

     

    Net sales by product category:

     

     

     

     

     

     

     

     

     

     

     

     

    Pointing Devices

     

    $

    132,770

     

     

    $

    128,337

     

     

    3

    %

     

    $

    254,753

     

     

    $

    256,127

     

     

    (1

    )%

    Keyboards & Combos

     

    139,049

     

     

    131,872

     

     

    5

     

     

    267,728

     

     

    260,094

     

     

    3

     

    PC Webcams

     

    28,748

     

     

    28,221

     

     

    2

     

     

    56,876

     

     

    57,895

     

     

    (2

    )

    Tablet & Other Accessories

     

    33,847

     

     

    36,710

     

     

    (8

    )

     

    72,186

     

     

    69,146

     

     

    4

     

    Video Collaboration

     

    89,553

     

     

    57,176

     

     

    57

     

     

    162,977

     

     

    115,968

     

     

    41

     

    Mobile Speakers

     

    57,232

     

     

    77,100

     

     

    (26

    )

     

    107,648

     

     

    111,427

     

     

    (3

    )

    Audio & Wearables

     

    68,018

     

     

    61,560

     

     

    10

     

     

    126,642

     

     

    113,714

     

     

    11

     

    Gaming

     

    161,014

     

     

    160,792

     

     

     

     

    295,529

     

     

    296,818

     

     

     

    Smart Home

     

    9,434

     

     

    9,241

     

     

    2

     

     

    19,298

     

     

    18,252

     

     

    6

     

    Other (1)

     

    26

     

     

    137

     

     

    (81

    )

     

    279

     

     

    185

     

     

    51

     

    Total sales

     

    $

    719,691

     

     

    $

    691,146

     

     

    4

    %

     

    $

    1,363,916

     

     

    $

    1,299,626

     

     

    5

    %

    (1) Other category includes products that we currently intend to phase out, or have already phased out, because they are no longer strategic to our business.

    LOGITECH INTERNATIONAL S.A.

    PRELIMINARY RESULTS *

    (In thousands, except per share amounts) - Unaudited

     

     

     

     

     

     

     

     

     

    GAAP TO NON-GAAP RECONCILIATION (C)

     

    Three Months Ended

     

    Six Months Ended

     

     

    September 30,

     

    September 30,

    SUPPLEMENTAL FINANCIAL INFORMATION

     

    2019

     

    2018

     

    2019

     

    2018

     

     

     

     

     

     

     

     

     

    Gross profit - GAAP

     

    $

    272,076

     

     

    $

    256,117

     

     

    $

    511,052

     

     

    $

    480,054

     

    Share-based compensation expense

     

    1,184

     

     

    791

     

     

    2,342

     

     

    1,921

     

    Amortization of intangible assets and purchase accounting effect on inventory

     

    3,271

     

     

    2,966

     

     

    6,542

     

     

    5,338

     

    Gross profit - Non-GAAP

     

    $

    276,531

     

     

    $

    259,874

     

     

    $

    519,936

     

     

    $

    487,313

     

     

     

     

     

     

     

     

     

     

    Gross margin - GAAP

     

    37.8

    %

     

    37.1

    %

     

    37.5

    %

     

    36.9

    %

    Gross margin - Non-GAAP

     

    38.4

    %

     

    37.6

    %

     

    38.1

    %

     

    37.5

    %

     

     

     

     

     

     

     

     

     

    Operating expenses - GAAP

     

    $

    204,021

     

     

    $

    190,985

     

     

    $

    395,530

     

     

    $

    382,471

     

    Less: Share-based compensation expense

     

    13,068

     

     

    11,258

     

     

    24,128

     

     

    23,387

     

    Less: Amortization of intangible assets and acquisition-related costs

     

    4,218

     

     

    4,317

     

     

    7,814

     

     

    6,838

     

    Less: Restructuring charges (credits), net

     

    (364

    )

     

    119

     

     

    114

     

     

    10,040

     

    Operating expenses - Non-GAAP

     

    $

    187,099

     

     

    $

    175,291

     

     

    $

    363,474

     

     

    $

    342,206

     

     

     

     

     

     

     

     

     

     

    % of net sales - GAAP

     

    28.3

    %

     

    27.6

    %

     

    29.0

    %

     

    29.4

    %

    % of net sales - Non - GAAP

     

    26.0

    %

     

    25.4

    %

     

    26.6

    %

     

    26.3

    %

     

     

     

     

     

     

     

     

     

    Operating income - GAAP

     

    $

    68,055

     

     

    $

    65,132

     

     

    $

    115,522

     

     

    $

    97,583

     

    Share-based compensation expense

     

    14,252

     

     

    12,049

     

     

    26,470

     

     

    25,308

     

    Amortization of intangible assets

     

    6,868

     

     

    5,448

     

     

    13,735

     

     

    10,341

     

    Purchase accounting effect on inventory

     

     

     

    379

     

     

     

     

    379

     

    Acquisition-related costs

     

    621

     

     

    1,456

     

     

    621

     

     

    1,456

     

    Restructuring charges (credits), net

     

    (364

    )

     

    119

     

     

    114

     

     

    10,040

     

    Operating income - Non - GAAP

     

    $

    89,432

     

     

    $

    84,583

     

     

    $

    156,462

     

     

    $

    145,107

     

     

     

     

     

     

     

     

     

     

    % of net sales - GAAP

     

    9.5

    %

     

    9.4

    %

     

    8.5

    %

     

    7.5

    %

    % of net sales - Non - GAAP

     

    12.4

    %

     

    12.2

    %

     

    11.5

    %

     

    11.2

    %

     

     

     

     

     

     

     

     

     

    Net income - GAAP

     

    $

    72,933

     

     

    $

    64,176

     

     

    $

    118,278

     

     

    $

    102,642

     

    Share-based compensation expense

     

    14,252

     

     

    12,049

     

     

    26,470

     

     

    25,308

     

    Amortization of intangible assets

     

    6,868

     

     

    5,448

     

     

    13,735

     

     

    10,341

     

    Purchase accounting effect on inventory

     

     

     

    379

     

     

     

     

    379

     

    Acquisition-related costs

     

    621

     

     

    1,456

     

     

    621

     

     

    1,456

     

    Restructuring charges (credits), net

     

    (364

    )

     

    119

     

     

    114

     

     

    10,040

     

    Loss (gain) on investments

     

    274

     

     

    (395

    )

     

    63

     

     

    (382

    )

    Non-GAAP income tax adjustment

     

    (9,506

    )

     

    (116

    )

     

    (8,599

    )

     

    (9,225

    )

    Net income - Non - GAAP

     

    $

    85,078

     

     

    $

    83,116

     

     

    $

    150,682

     

     

    $

    140,559

     

     

     

     

     

     

     

     

     

     

    Net income per share:

     

     

     

     

     

     

     

     

    Diluted - GAAP

     

    $

    0.43

     

     

    $

    0.38

     

     

    $

    0.70

     

     

    $

    0.61

     

    Diluted - Non - GAAP

     

    $

    0.50

     

     

    $

    0.49

     

     

    $

    0.89

     

     

    $

    0.83

     

     

     

     

     

     

     

     

     

     

    Shares used to compute net income per share:

     

     

     

     

     

     

     

     

    Diluted - GAAP and Non - GAAP

     

    169,027

    169,234

     

    168,914

     

    168,996

    LOGITECH INTERNATIONAL S.A.

    PRELIMINARY RESULTS *

    (In thousands) - unaudited

     

     

     

     

     

     

     

     

     

    SHARE-BASED COMPENSATION EXPENSE

     

    Three Months Ended

     

    Six Months Ended

     

     

    September 30,

     

    September 30,

    SUPPLEMENTAL FINANCIAL INFORMATION

     

    2019

     

    2018

     

    2019

     

    2018

     

     

     

     

     

     

     

     

     

    Share-based Compensation Expense

     

     

     

     

     

     

     

     

    Cost of goods sold

     

    $

    1,184

     

     

    $

    791

     

     

    $

    2,342

     

     

    $

    1,921

     

    Marketing and selling

     

    6,951

     

     

    4,864

     

     

    13,800

     

     

    10,650

     

    Research and development

     

    2,248

     

     

    1,935

     

     

    4,402

     

     

    3,484

     

    General and administrative

     

    3,869

     

     

    4,459

     

     

    5,926

     

     

    9,253

     

    Total share-based compensation expense

     

    14,252

     

     

    12,049

     

     

    26,470

     

     

    25,308

     

    Income tax benefit

     

    (2,723

    )

     

    (2,650

    )

     

    (9,523

    )

     

    (12,179

    )

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

     

    $

    11,529

     

     

    $

    9,399

     

     

    $

    16,947

     

     

    $

    13,129

     

    * Note: These preliminary results for the three and six months ended September 30, 2019 are subject to adjustments, including subsequent events that may occur through the date of filing our Quarterly Report on Form 10-Q.

    (A) Swiss Federal Tax Reform

    On May 19, 2019, the Swiss electorate approved the Federal Act on Tax Reform and AHV Financing ("TRAF"), a major reform to better align the Swiss tax system with international tax standards. The legislation was subsequently published in the federal register on August 6, 2019 to take effect on January 1, 2020. As of September 30, 2019, TRAF has not been enacted in all cantons, including the canton of Vaud, where the cantonal legislative procedures are in process.

    The change in the effective income tax rate for the three months ended September 30, 2019, compared to the same period ended September 30, 2018, was primarily due to the transitional income tax impact in Switzerland. We have benefited from a longstanding tax ruling from the canton of Vaud through March 31, 2019. During the second quarter, the canton of Vaud concluded the longstanding cantonal tax ruling will only continue to apply through December 31, 2019. The transitional income tax impact, which represents income tax provision at the current full statutory income tax rate of 13.63% without taking account of the tax reform yet to be enacted, resulted in a tax benefit of $5.9 million in the three-month period ended September 30, 2019. In addition, there was a discrete tax benefit of $4.0 million from adjusting deferred tax assets and liabilities in Switzerland in the three months ended September 30, 2019. We expect a gradual and modest increase in our cash tax payments in Switzerland each year until we fully reflect the new Swiss tax rate.

    (B) Adoption of ASC Topic 842

    We adopted the new standards for leases under Accounting Standards Codification ("ASC") Topic 842 using the modified retrospective approach as of April 1, 2019 and did not restate the financial statements of the comparative periods as is allowed by election of the transition option under ASC 842. Adoption of the standard resulted in the recognition of $30.1 million of right-of-use assets, $11.9 million of short-term lease liabilities and $24.1 million of long-term lease liabilities related to our leases on September 30, 2019.

    (C) 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 September 30, 2019 and previous periods, 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 gross profit, 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.

    Loss (gain) on investments. We recognized loss (gain) related to our investments in various companies, which varies depending on the operational and financial performance of those 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.

    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)



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    Logitech Delivers Solid Second Quarter Growth and Profitability Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the second quarter of Fiscal Year 2020. Q2 sales were $720 million, up 4 percent in US dollars and 6 percent in constant currency, compared to Q2 of the prior …