Company’s Q1 Sales Grow 66% and Profits
Double
SIX Swiss Exchange Ad hoc announcement pursuant to Art. 53 LR
—
Logitech International (SIX: LOGN) (Nasdaq: LOGI) today
announced financial results for the first quarter of Fiscal Year
2022.
- Q1 sales were $1.31 billion, up 66 percent in US dollars and 58
percent in constant currency, compared to Q1 of the prior
year.
- Q1 GAAP operating income grew 143 percent to $203 million,
compared to $83 million in the same quarter a year ago. Q1 GAAP
earnings per share (EPS) grew 160 percent to $1.09, compared to
$0.42 in the same quarter a year ago.
- Q1 non-GAAP operating income grew 100 percent to $235 million,
compared to $117 million in the same quarter a year ago. Q1
non-GAAP EPS grew 91 percent to $1.22, compared to $0.64 in the
same quarter a year ago.
“We’ve started strong in Fiscal Year 2022, with Q1 sales up 58%
in constant currency and profits doubling versus last year,” said
Bracken Darrell, Logitech president and chief executive officer.
“Our key categories grew high double digits. This performance
demonstrates the strength of our capabilities, excellent
operational execution, and ability to capitalize on long-term
trends, like gaming, streaming and creating, hybrid work and video
everywhere.”
Outlook
Logitech confirmed its Fiscal Year 2022 outlook of flat sales
growth in constant currency, plus or minus five percent, and $800
million to $850 million in non-GAAP operating income.
Prepared Remarks Available Online
Logitech has made its prepared written remarks for the financial
results videoconference available online on the Logitech corporate
website at http://ir.logitech.com.
Financial Results Videoconference and Webcast
Logitech will hold a financial results videoconference to
discuss the results for Q1 Fiscal Year 2022 on Tuesday, July 27,
2021 at 8:30 a.m. Eastern Daylight Time and 2:30 p.m. Central
European Summer Time. A livestream of the event 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, 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, 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 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 Fiscal
Year 2022 outlook.
About Logitech
Logitech helps all people pursue their passions by designing
experiences so everyone can create, achieve, and enjoy more.
Logitech designs and creates products that bring people together
through computing, gaming, video, streaming and creating, and
music. Brands of Logitech include Logitech, Logitech G, ASTRO
Gaming, Streamlabs, Blue Microphones, Ultimate Ears and Jaybird.
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 preliminary financial results
for the three months ended June 30, 2021, long-term growth trends,
Logitech’s potential, and outlook for Fiscal Year 2022 operating
income and sales growth. The forward-looking statements in this
press 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 demand variability and supply shortages; 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; the COVID-19 pandemic and
its potential impact; if we do not efficiently manage our spending;
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;
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, 2021 and our subsequent 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
June 30,
GAAP CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
2021
2020
Net sales
$
1,312,058
$
791,894
Cost of goods sold
739,066
482,638
Amortization of intangible assets
4,066
3,523
Gross profit
568,926
305,733
Operating expenses:
Marketing and selling
252,314
133,238
Research and development
69,246
49,725
General and administrative
40,542
29,071
Amortization of intangible assets and
acquisition-related costs
5,217
4,609
Change in fair value of contingent
consideration for business acquisition
(1,474)
5,716
Restructuring credits, net
—
(53)
Total operating expenses
365,845
222,306
Operating income
203,081
83,427
Interest income
316
620
Other income, net
8,435
2,029
Income before income taxes
211,832
86,076
Provision for income taxes
24,991
14,003
Net income
$
186,841
$
72,073
Net income per share:
Basic
$
1.11
$
0.43
Diluted
$
1.09
$
0.42
Weighted average shares used to compute
net income per share:
Basic
168,372
167,612
Diluted
172,020
170,127
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) - unaudited
June 30,
March 31,
CONDENSED CONSOLIDATED BALANCE
SHEETS
2021
2021
Current assets:
Cash and cash equivalents
$
1,497,721
$
1,750,327
Accounts receivable, net
545,907
612,225
Inventories
778,596
661,116
Other current assets
158,130
135,650
Total current assets
2,980,354
3,159,318
Non-current assets:
Property, plant and equipment, net
114,693
114,060
Goodwill
449,732
429,604
Other intangible assets, net
112,229
115,148
Other assets
338,485
324,248
Total assets
$
3,995,493
$
4,142,378
Current liabilities:
Accounts payable
$
709,741
$
823,233
Accrued and other current liabilities
702,589
858,617
Total current liabilities
1,412,330
1,681,850
Non-current liabilities:
Income taxes payable
62,968
59,237
Other non-current liabilities
147,704
139,502
Total liabilities
1,623,002
1,880,589
Shareholders’ equity:
Registered shares, CHF 0.25 par value:
30,148
30,148
Issued shares — 173,106 at June 30 and
March 31, 2021
Additional shares that may be issued out
of conditional capitals — 50,000 at June 30 and March 31, 2021
Additional shares that may be issued out
of authorized capital — 17,311 at June 30 and March 31, 2021
Additional paid-in capital
74,948
129,519
Shares in treasury, at cost — 4,407 at
June 30, 2021 and 4,799 at March 31, 2021
(302,606)
(279,541)
Retained earnings
2,677,419
2,490,578
Accumulated other comprehensive loss
(107,418)
(108,915)
Total shareholders’ equity
2,372,491
2,261,789
Total liabilities and shareholders’
equity
$
3,995,493
$
4,142,378
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) – unaudited
Three Months Ended
June 30,
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
2021
2020
Cash flows from operating
activities:
Net income
$
186,841
$
72,073
Adjustments to reconcile net income to net
cash provided by/ (used in) operating activities:
Depreciation
20,462
11,747
Amortization of intangible assets
8,843
8,132
Gain on investments
(1,071)
(174)
Share-based compensation expense
23,651
20,115
Deferred income taxes
(4,158)
3,589
Change in fair value of contingent
consideration for business acquisition
(1,474)
5,716
Other
1,045
9
Changes in assets and liabilities, net of
acquisitions:
Accounts receivable, net
73,308
(102,092)
Inventories
(115,166)
(40,385)
Other assets
(30,796)
(15,770)
Accounts payable
(115,620)
168,346
Accrued and other liabilities
(160,835)
(12,459)
Net cash provided by / (used in)
operating activities
(114,970)
118,847
Cash flows from investing
activities:
Purchases of property, plant and
equipment
(24,514)
(12,308)
Investment in privately held companies
(501)
(30)
Acquisition, net of cash acquired
(15,586)
—
Purchases of trading investments
(1,091)
(2,424)
Proceeds from sales of trading
investments
1,345
2,362
Net cash used in investing
activities
(40,347)
(12,400)
Cash flows from financing
activities:
Purchases of registered shares
(54,872)
—
Proceeds from exercises of stock options
and purchase rights
2,750
9,992
Tax withholdings related to net share
settlements of restricted stock units
(50,411)
(23,121)
Net cash used in financing
activities
(102,533)
(13,129)
Effect of exchange rate changes on cash
and cash equivalents
5,244
511
Net increase / (decrease) in cash and
cash equivalents
(252,606)
93,829
Cash and cash equivalents, beginning of
the period
1,750,327
715,566
Cash and cash equivalents, end of the
period
$
1,497,721
$
809,395
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) – unaudited
SUPPLEMENTAL FINANCIAL
INFORMATION
Three Months Ended
June 30,
NET SALES
2021
2020
Change
Net sales by product category:
Pointing Devices
$
182,878
$
120,469
52
%
Keyboards & Combos
218,357
145,360
50
PC Webcams
109,918
60,851
81
Tablet & Other Accessories
79,272
46,048
72
Gaming (1)
335,397
181,903
84
Video Collaboration
234,885
130,074
81
Mobile Speakers
28,484
29,009
(2)
Audio & Wearables
116,607
71,365
63
Smart Home
6,172
6,810
(9)
Other (2)
88
5
1,660
Total Sales
$
1,312,058
$
791,894
66
%
(1) Gaming includes streaming services revenue generated by
Streamlabs.
(2) Other includes products that the Company currently intends
to phase out, or has already phased out, because they are no longer
strategic to the Company's business.
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands, except per share
amounts) – unaudited
SUPPLEMENTAL FINANCIAL
INFORMATION
Three Months Ended
June 30,
GAAP TO NON GAAP RECONCILIATION
(A)
2021
2020
Gross profit – GAAP
$
568,926
$
305,733
Share-based compensation expense
1,369
1,400
Amortization of intangible assets
4,066
3,523
Gross profit - Non-GAAP
$
574,361
$
310,656
Gross margin – GAAP
43.4
%
38.6
%
Gross margin - Non-GAAP
43.8
%
39.2
%
Operating expenses – GAAP
$
365,845
$
222,306
Less: Share-based compensation expense
22,282
18,715
Less: Amortization of intangible assets
and acquisition-related costs
5,217
4,609
Less: Change in fair value of contingent
consideration for business acquisition
(1,474)
5,716
Less: Restructuring credits, net
—
(53)
Operating expenses - Non-GAAP
$
339,820
$
193,319
% of net sales – GAAP
27.9
%
28.1
%
% of net sales - Non – GAAP
25.9
%
24.4
%
Operating income – GAAP
$
203,081
$
83,427
Share-based compensation expense
23,651
20,115
Amortization of intangible assets and
acquisition-related costs
9,283
8,132
Change in fair value of contingent
consideration for business acquisition
(1,474)
5,716
Restructuring credits, net
—
(53)
Operating income - Non – GAAP
$
234,541
$
117,337
% of net sales – GAAP
15.5
%
10.5
%
% of net sales - Non – GAAP
17.9
%
14.8
%
Net income – GAAP
$
186,841
$
72,073
Share-based compensation expense
23,651
20,115
Amortization of intangible assets and
acquisition-related costs
9,283
8,132
Change in fair value of contingent
consideration for business acquisition
(1,474)
5,716
Restructuring credits, net
—
(53)
Gain on investments
(1,071)
(174)
Non-GAAP income tax adjustment
(7,416)
3,048
Net income - Non – GAAP
$
209,814
$
108,857
Net income per share:
Diluted – GAAP
$
1.09
$
0.42
Diluted - Non – GAAP
$
1.22
$
0.64
Shares used to compute net income per
share:
Diluted - GAAP and Non – GAAP
172,020
170,127
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) – unaudited
SUPPLEMENTAL FINANCIAL
INFORMATION
Three Months Ended
June 30,
SHARE-BASED COMPENSATION
EXPENSE
2021
2020
Share-based Compensation
Expense
Cost of goods sold
$
1,369
$
1,400
Marketing and selling
8,530
8,792
Research and development
5,061
3,103
General and administrative
8,691
6,820
Total share-based compensation
expense
23,651
20,115
Income tax benefit
(16,594)
(8,111)
Total share-based compensation expense,
net of income tax benefit
$
7,057
$
12,004
*Note: These preliminary results for the three months ended June
30, 2021 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
June 30, 2021 and previous periods, 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 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 items, 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 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 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)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210726005806/en/
Ben Lu, CFA Vice President, Investor Relations
lir@logitech.com
Nicole Kenyon Head of Global Corporate & Employee
Communications - USA (510) 988-8553
Ben Starkie Corporate Communications - Europe +41 (0)
79-292-3499
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