Company Provides Full-Year and Updated
First-Half 2024 Outlook
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
2024.
- Sales were $974 million, down 16 percent in US dollars and 15
percent in constant currency, compared to the prior year.
- GAAP operating income was $78 million, down 32 percent compared
to the prior year. Non-GAAP operating income was $109 million, down
25 percent compared to the prior year.
- GAAP earnings per share (EPS) was $0.39, down 36 percent
compared to the prior year. Non-GAAP EPS was $0.65, down 12 percent
compared to the prior year.
- Cash flow from operations was $240 million, up $275 million
compared to the prior year. The quarter-ending cash balance was
$1.25 billion.
“While the markets are still challenging, I am proud of the
team's achievements during our first quarter,” said Guy Gecht,
Logitech interim chief executive officer. “Our high-caliber
seasoned team, design-led engineering and strong execution truly
sets us apart. Our latest innovations and elevated outlook are just
a glimpse of Logitech’s full potential as we execute our strategic
vision.”
“This solid first quarter highlights steady progress on many
important metrics,” said Charles Boynton, Logitech chief financial
officer. “We delivered another quarter of reduced inventory and
operating expenses while continuing to drive strong cash
generation, further fortifying our balance sheet. With one quarter
completed, we are pleased to provide a full-year and updated
first-half outlook.”
Outlook
Logitech raised its outlook for the first half of Fiscal Year
2024:
Previous H1 2024 outlook
New H1 2024 outlook
Sales
$1.8 - $1.9 billion
$1.875 - $1.975 billion
Sales decline (in US dollars, year over
year)
22% - 18%
19% - 14%
Non-GAAP operating income
$160 - $190 million
$180 - $220 million
Non-GAAP op. inc. decline (year over
year)
47% - 37%
40% - 27%
Logitech also provided an estimated full-year outlook for Fiscal
Year 2024:
Full FY 2024 outlook
Sales
$3.8 - $4.0 billion
Sales decline (in US dollars, year over
year)
16% - 12%
Non-GAAP operating income
$400 - $500 million
Non-GAAP op. inc. decline (year over
year)
32% - 15%
Financial Results Videoconference and Webcast
Logitech will hold a financial results videoconference to
discuss the results for Q1 Fiscal Year 2024 on Tuesday, July 25,
2023 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 in this press
release, which exclude share-based compensation expense,
amortization of intangible assets, acquisition-related costs,
restructuring charges, net, loss (gain) 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 http://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 first half of Fiscal Year 2024 and 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, ASTRO
Gaming, Streamlabs, Blue Microphones 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 months ended June 30, 2023, full year and first half
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 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, 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
2023
2022
Net sales
$
974,499
$
1,159,865
Cost of goods sold
595,712
697,220
Amortization of intangible assets
3,145
3,042
Gross profit
375,642
459,603
Operating expenses:
Marketing and selling
179,185
229,378
Research and development
70,559
75,517
General and administrative
41,297
35,860
Amortization of intangible assets and
acquisition-related costs
2,685
3,369
Restructuring charges, net
3,511
—
Total operating expenses
297,237
344,124
Operating income
78,405
115,479
Interest income
9,826
1,449
Other income (expense), net
(12,972
)
5,624
Income before income taxes
75,259
122,552
Provision for income taxes
12,532
21,716
Net income
$
62,727
$
100,836
Net income per share:
Basic
$
0.39
$
0.61
Diluted
$
0.39
$
0.61
Weighted average shares used to compute
net income per share:
Basic
158,859
164,679
Diluted
160,155
166,406
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands, except share amounts) -
unaudited
June 30,
March 31,
CONDENSED CONSOLIDATED BALANCE
SHEETS
2023
2023
Current assets:
Cash and cash equivalents
$
1,251,086
$
1,149,023
Accounts receivable, net
562,602
630,382
Inventories
572,344
682,893
Other current assets
111,572
142,876
Total current assets
2,497,604
2,605,174
Non-current assets:
Property, plant and equipment, net
126,965
121,503
Goodwill
453,922
454,610
Other intangible assets, net
57,230
63,173
Other assets
304,160
316,293
Total assets
$
3,439,881
$
3,560,753
Current liabilities:
Accounts payable
$
386,599
$
406,968
Accrued and other current liabilities
570,544
643,139
Total current liabilities
957,143
1,050,107
Non-current liabilities:
Income taxes payable
107,925
106,391
Other non-current liabilities
148,738
146,695
Total liabilities
1,213,806
1,303,193
Shareholders’ equity:
Registered shares, CHF 0.25 par value:
30,148
30,148
Issued shares — 173,106 at June 30, 2023
and March 31, 2023
Additional shares that may be issued out
of conditional capital — 50,000 at June 30, 2023 and March 31,
2023
Additional shares that may be issued out
of authorized capital — 17,311 at June 30, 2023 and March 31,
2023
Additional paid-in capital
49,734
127,380
Shares in treasury, at cost — 14,484 at
June 30, 2023 and 13,763 at March 31, 2023
(994,581
)
(977,266
)
Retained earnings
3,240,302
3,177,575
Accumulated other comprehensive loss
(99,528
)
(100,277
)
Total shareholders’ equity
2,226,075
2,257,560
Total liabilities and shareholders’
equity
$
3,439,881
$
3,560,753
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) - unaudited
Three months ended June
30,
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
2023
2022
Cash flows from operating
activities:
Net income
$
62,727
$
100,836
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation
17,498
18,626
Amortization of intangible assets
5,827
6,229
Loss (gain) on investments
11,823
(11,357
)
Share-based compensation expense
21,511
23,690
Deferred income taxes
2,962
265
Other
24
(124
)
Changes in assets and liabilities, net of
acquisitions:
Accounts receivable, net
65,390
(44,572
)
Inventories
110,440
(324
)
Other assets
34,342
4,932
Accounts payable
(18,420
)
(70,034
)
Accrued and other liabilities
(74,329
)
(63,835
)
Net cash provided by (used in)
operating activities
239,795
(35,668
)
Cash flows from investing
activities:
Purchases of property, plant and
equipment
(16,238
)
(19,563
)
Investment in privately held companies
(34
)
(2,088
)
Acquisitions, net of cash acquired
—
(5,839
)
Purchases of deferred compensation
investments
(1,069
)
(922
)
Proceeds from sales of deferred
compensation investments
1,071
943
Other investing activities
(1,260
)
—
Net cash used in investing
activities
(17,530
)
(27,469
)
Cash flows from financing
activities:
Purchases of registered shares
(95,076
)
(120,619
)
Proceeds from exercises of stock options
and purchase rights
2,113
—
Tax withholdings related to net share
settlements of restricted stock units
(24,196
)
(24,144
)
Net cash used in financing
activities
(117,159
)
(144,763
)
Effect of exchange rate changes on cash
and cash equivalents
(3,043
)
(14,159
)
Net increase (decrease) in cash and
cash equivalents
102,063
(222,059
)
Cash and cash equivalents, beginning of
the period
1,149,023
1,328,716
Cash and cash equivalents, end of the
period
$
1,251,086
$
1,106,657
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) - unaudited
SUPPLEMENTAL FINANCIAL
INFORMATION
Three months ended June
30,
NET SALES
2023
2022 (1)
Change
Net sales by product category:
Gaming (2)
$
266,429
$
297,921
(11
)%
Keyboards & Combos
180,855
227,720
(21
)
Pointing Devices
174,454
183,283
(5
)
Video Collaboration
139,346
181,632
(23
)
Webcams
75,200
109,262
(31
)
Tablet Accessories
70,336
66,585
6
Headsets
36,850
45,943
(20
)
Other (3)
31,029
47,519
(35
)
Total Net Sales
$
974,499
$
1,159,865
(16
)%
(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 June
30,
GAAP TO NON-GAAP RECONCILIATION
(A)
2023
2022
Gross profit - GAAP
$
375,642
$
459,603
Share-based compensation expense
1,415
1,461
Amortization of intangible assets
3,145
3,042
Gross profit - Non-GAAP
$
380,202
$
464,106
Gross margin - GAAP
38.5
%
39.6
%
Gross margin - Non-GAAP
39.0
%
40.0
%
Operating expenses - GAAP
$
297,237
$
344,124
Less: Share-based compensation expense
20,096
22,229
Less: Amortization of intangible assets
and acquisition-related costs
2,685
3,369
Less: Restructuring charges, net
3,511
—
Operating expenses - Non-GAAP
$
270,945
$
318,526
% of net sales - GAAP
30.5
%
29.7
%
% of net sales - Non-GAAP
27.8
%
27.5
%
Operating income - GAAP
$
78,405
$
115,479
Share-based compensation expense
21,511
23,690
Amortization of intangible assets and
acquisition-related costs
5,830
6,411
Restructuring charges, net
3,511
—
Operating income - Non-GAAP
$
109,257
$
145,580
% of net sales - GAAP
8.0
%
10.0
%
% of net sales - Non-GAAP
11.2
%
12.6
%
Net income - GAAP
$
62,727
$
100,836
Share-based compensation expense
21,511
23,690
Amortization of intangible assets and
acquisition-related costs
5,830
6,411
Restructuring charges, net
3,511
—
Loss (gain) on investments
11,823
(11,357
)
Non-GAAP income tax adjustment
(2,001
)
3,459
Net income - Non-GAAP
$
103,401
$
123,039
Net income per share:
Diluted - GAAP
$
0.39
$
0.61
Diluted - Non-GAAP
$
0.65
$
0.74
Shares used to compute net income per
share:
Diluted - GAAP and Non-GAAP
160,155
166,406
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) - unaudited
SUPPLEMENTAL FINANCIAL
INFORMATION
Three months ended June
30,
SHARE-BASED COMPENSATION
EXPENSE
2023
2022
Share-based Compensation
Expense
Cost of goods sold
$
1,415
$
1,461
Marketing and selling
10,483
9,797
Research and development
4,453
5,532
General and administrative
5,160
6,900
Total share-based compensation
expense
21,511
23,690
Income tax benefit
(5,318
)
(4,322
)
Total share-based compensation expense,
net of income tax benefit
$
16,193
$
19,368
*Note: These preliminary results for the three months ended June
30, 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
June 30, 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, 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 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 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/20230724190744/en/
Editorial Contacts: Nate Melihercik, Head of Global
Investor Relations - ir@logitech.com Nicole Kenyon, Head of Global
Corporate and Internal Communications - nkenyon@logitech.com (USA)
Ben Starkie, Corporate Communications - +41 (0) 79-292-3499,
bstarkie1@logitech.com (Europe)
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