Press release

Logitech Grows 76% for Fiscal Year 2021, Q4 Revenue Doubles

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Sponsored by Businesswire

Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the fourth quarter and full year of Fiscal Year 2021, ended March 31, 2021.

For Fiscal Year 2021:

  • Sales were Logitech’s highest ever at $5.25 billion, up 76 percent in US dollars and 74 percent in constant currency compared to the prior year.
  • GAAP operating income grew 315 percent to $1.15 billion, compared to $276 million a year ago. GAAP earnings per share (EPS) grew 107 percent to $5.51, compared to $2.66 a year ago.
  • Non-GAAP operating income grew 229 percent to $1.27 billion, compared to $387 million a year ago. Non-GAAP EPS grew 199 percent to $6.42, compared to $2.15 a year ago.
  • Cash flow from operations was $1.46 billion, compared to $425 million a year ago.

For Q4 Fiscal Year 2021:

  • Sales were $1.54 billion, up 117 percent in US dollars and 108 percent in constant currency compared to Q4 of the prior year.
  • GAAP operating income grew 818 percent to $295 million, compared to Q4 of the prior year. Non-GAAP operating income grew 312 percent to $325 million, compared to Q4 of the prior year.

“Fiscal Year 2021 was our best year ever,” said Bracken Darrell, Logitech president and chief executive officer. “It has been rewarding to see Logitech’s products play an essential role enabling work, creation, connection and entertainment as our homes became schools, offices and playgrounds. Our powerful and resilient capabilities allowed us to both deliver remarkable performance in a challenging FY 2021 and, at the same time, invest in compelling plans for the future. The world has just caught a glimpse of what Logitech will become.”

“We delivered excellent financial performance, including record net sales, operating profit, gross margin and cash flow,” said Nate Olmstead, Logitech chief financial officer. “The trends that fueled our growth pre-pandemic – work from anywhere, video everywhere, esports and the democratization of content creation – all accelerated. As our market opportunities have expanded, and we have become a larger, more profitable company, we’re investing in our capabilities to accelerate our innovation, reach new customers and deliver strong financial returns over the long-term.”

Outlook

Logitech raised its Fiscal Year 2022 outlook for non-GAAP operating income to between $800 million and $850 million. Previously, it was expected to be between $750 million and $800 million. The outlook for sales growth in constant currency is still expected to be approximately flat, plus or minus 5 percent.

Increased Share Buyback Program and Proposed FY21 Dividend

Logitech’s board of directors has approved an increased share buyback authorization up to $1 billion. This expands the Company’s current $250 million, three-year share buyback authorization. To date, the Company has repurchased $165 million of shares in the current program. Following approval from the Swiss Takeover Board, the increase will give a total authorization of $835 million for repurchases over the remaining 27 months of the program through July 2023.

Logitech’s board of directors has also approved a proposal for a Fiscal Year 2021 dividend, which would be approximately a 10 percent annual increase versus last year’s dividend. Together with the new share buyback authorization, this demonstrates the Company’s continued commitment to consistently return cash to shareholders.

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 Q4 and the full Fiscal Year 2021 on Thursday, April 29, 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 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 2022.

About Logitech

Logitech designs products that have an everyday place in people’s lives, connecting them to the digital experiences they care about. Almost 40 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, 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 and full fiscal year ended March 31, 2021, long-term growth trends, Logitech’s potential, investing in our capabilities to accelerate our innovation, reach new customers and deliver strong financial returns over the long-term, our share repurchase program, share repurchases, our Fiscal Year 2021 dividend proposal, 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 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, 2020, our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2020 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

 

Fiscal Years Ended

 

 

March 31,

 

March 31,

GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Net sales

 

$

1,535,925

 

 

$

709,248

 

 

$

5,252,279

 

 

$

2,975,851

 

Cost of goods sold

 

821,127

 

 

428,080

 

 

2,903,215

 

 

1,838,685

 

Amortization of intangible assets

 

3,529

 

 

4,292

 

 

13,329

 

 

14,785

 

Gross profit

 

711,269

 

 

276,876

 

 

2,335,735

 

 

1,122,381

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Marketing and selling

 

273,764

 

 

141,186

 

 

770,284

 

 

533,324

 

Research and development

 

69,009

 

 

50,094

 

 

226,023

 

 

177,593

 

General and administrative

 

68,236

 

 

25,465

 

 

166,577

 

 

94,015

 

Amortization of intangible assets and acquisition-related costs

 

5,178

 

 

4,666

 

 

19,064

 

 

17,563

 

Change in fair value of contingent consideration for business acquisition

 

 

 

23,247

 

 

5,716

 

 

23,247

 

Restructuring charges (credits), net

 

 

 

74

 

 

(54

)

 

144

 

Total operating expenses

 

416,187

 

 

244,732

 

 

1,187,610

 

 

845,886

 

 

 

 

 

 

 

 

 

 

Operating income

 

295,082

 

 

32,144

 

 

1,148,125

 

 

276,495

 

Interest income

 

340

 

 

2,614

 

 

1,784

 

 

9,619

 

Other income (expense), net

 

(11,450

)

 

35,360

 

 

(1,789

)

 

38,212

 

Income before income taxes

 

283,972

 

 

70,118

 

 

1,148,120

 

 

324,326

 

Provision for (benefit from) income taxes

 

58,225

 

 

(143,802

)

 

200,863

 

 

(125,397

)

Net income

 

$

225,747

 

 

$

213,920

 

 

$

947,257

 

 

$

449,723

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

1.34

 

 

$

1.28

 

 

$

5.62

 

 

$

2.70

 

Diluted

 

$

1.31

 

 

$

1.26

 

 

$

5.51

 

 

$

2.66

 

 

 

 

 

 

 

 

 

 

Weighted average shares used to compute net income per share:

 

 

 

 

 

 

 

 

Basic

 

168,734

 

 

167,290

 

 

168,523

 

 

166,837

 

Diluted

 

172,954

 

 

169,981

 

 

171,775

 

 

169,381

 

LOGITECH INTERNATIONAL S.A.

 

 

 

 

PRELIMINARY RESULTS*

 

 

 

 

(In thousands) – unaudited

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

March 31,

CONDENSED CONSOLIDATED BALANCE SHEETS

 

2021

 

2020

 

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

1,750,327

 

 

$

715,566

 

Accounts receivable, net

 

612,225

 

 

394,743

 

Inventories

 

661,116

 

 

229,249

 

Other current assets

 

135,650

 

 

74,920

 

Total current assets

 

3,159,318

 

 

1,414,478

 

 

 

 

 

 

Non-current assets:

 

 

 

 

Property, plant and equipment, net

 

114,060

 

 

76,119

 

Goodwill

 

429,604

 

 

400,917

 

Other intangible assets, net

 

115,148

 

 

126,941

 

Other assets

 

324,248

 

 

345,019

 

Total assets

 

$

4,142,378

 

 

$

2,363,474

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

823,233

 

 

$

259,120

 

Accrued and other current liabilities

 

858,617

 

 

455,024

 

Total current liabilities

 

1,681,850

 

 

714,144

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

Income taxes payable

 

59,237

 

 

40,788

 

Other non-current liabilities

 

139,502

 

 

119,274

 

Total liabilities

 

1,880,589

 

 

874,206

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

Registered shares, CHF 0.25 par value:

 

30,148

 

 

30,148

 

Issued shares—173,106 at March 31, 2021 and 2020

 

 

 

 

Additional shares that may be issued out of conditional capitals — 50,000 at March 31, 2021 and March 31, 2020

 

 

 

 

Additional shares that may be issued out of authorized capital — 17,311 at March 31, 2021 and 34,621 March 31, 2020

 

 

 

 

Additional paid-in capital

 

129,519

 

 

75,097

 

Shares in treasury, at cost— 4,799 and 6,210 shares at March 31, 2021 and 2020, respectively

 

(279,541

)

 

(185,896

)

Retained earnings

 

2,490,578

 

 

1,690,579

 

Accumulated other comprehensive loss

 

(108,915

)

 

(120,660

)

Total shareholders’ equity

 

2,261,789

 

 

1,489,268

 

Total liabilities and shareholders’ equity

 

$

4,142,378

 

 

$

2,363,474

 

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

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

225,747

 

 

$

213,920

 

 

$

947,257

 

 

$

449,723

 

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

 

 

 

 

 

 

 

 

Depreciation

 

14,742

 

 

10,739

 

 

50,752

 

 

42,893

 

Amortization of intangible assets

 

8,191

 

 

8,900

 

 

31,818

 

 

30,858

 

Investment impairment

 

2,011

 

 

 

 

2,011

 

 

 

Share-based compensation expense

 

21,305

 

 

14,569

 

 

86,019

 

 

54,870

 

Loss (gain) on investments

 

(793

)

 

(16

)

 

3,899

 

 

756

 

Deferred income taxes

 

(3,199

)

 

(160,333

)

 

34,484

 

 

(159,853

)

Change in fair value of contingent consideration for business acquisition

 

 

 

23,247

 

 

5,716

 

 

23,247

 

Gain on sale of investment in privately held companies

 

 

 

(39,767

)

 

 

 

(39,767

)

Other

 

(114

)

 

76

 

 

(1,784

)

 

(936

)

Changes in assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

275,584

 

 

131,524

 

 

(201,220

)

 

(15,768

)

Inventories

 

(188,123

)

 

75,558

 

 

(427,501

)

 

60,388

 

Other assets

 

(14,427

)

 

15,453

 

 

(67,708

)

 

18,319

 

Accounts payable

 

12,936

 

 

(179,440

)

 

553,960

 

 

(24,250

)

Accrued and other liabilities

 

176,359

 

 

(13,584

)

 

440,935

 

 

(15,480

)

Net cash provided by operating activities

 

530,219

 

 

100,846

 

 

1,458,638

 

 

425,000

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

(30,026

)

 

(10,817

)

 

(76,189

)

 

(39,484

)

Investment in privately held companies

 

(590

)

 

(35

)

 

(4,115

)

 

(345

)

Acquisitions, net of cash acquired

 

(43,163

)

 

 

 

(43,523

)

 

(91,569

)

Proceeds from return of strategic investments

 

 

 

 

 

2,934

 

 

 

Proceeds from sale of property, plant and equipment

 

 

 

 

 

 

 

1,037

 

Purchases of trading investments

 

(1,664

)

 

(8,893

)

 

(12,336

)

 

(11,964

)

Proceeds from sales of trading investments

 

1,915

 

 

8,952

 

 

13,247

 

 

12,091

 

Net cash used in investing activities

 

(73,528

)

 

(10,793

)

 

(119,982

)

 

(130,234

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Payment of cash dividends

 

 

 

 

 

(146,705

)

 

(124,180

)

Purchases of registered shares

 

(92,227

)

 

(35,310

)

 

(164,952

)

 

(50,437

)

Proceeds from exercises of stock options and purchase rights

 

14,101

 

 

10,701

 

 

43,810

 

 

22,241

 

Tax withholdings related to net share settlements of restricted stock units

 

(2,607

)

 

(1,184

)

 

(32,082

)

 

(24,280

)

Net cash used in financing activities

 

(80,733

)

 

(25,793

)

 

(299,929

)

 

(176,656

)

Effect of exchange rate changes on cash and cash equivalents

 

(14,374

)

 

(4,740

)

 

(3,966

)

 

(7,060

)

Net increase in cash and cash equivalents

 

361,584

 

 

59,520

 

 

1,034,761

 

 

111,050

 

Cash and cash equivalents at beginning of the period

 

1,388,743

 

 

656,046

 

 

715,566

 

 

604,516

 

Cash and cash equivalents at end of the period

 

$

1,750,327

 

 

$

715,566

 

 

$

1,750,327

 

 

$

715,566

 

LOGITECH INTERNATIONAL S.A.

 

 

 

 

 

 

 

 

 

 

 

 

PRELIMINARY RESULTS*

 

 

 

 

 

 

 

 

 

 

(In thousands) – unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL FINANCIAL INFORMATION

 

Three Months Ended

 

Fiscal Years Ended

 

 

March 31,

 

March 31,

NET SALES

 

2021

 

2020

 

Change

 

2021

 

2020

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales by product category:

 

 

 

 

 

 

 

 

 

 

 

 

Pointing Devices

 

$

177,679

 

 

$

135,226

 

 

31

%

 

$

680,907

 

 

$

544,519

 

 

25

%

Keyboards & Combos

 

219,242

 

 

147,659

 

 

48

 

 

784,488

 

 

571,720

 

 

37

 

PC Webcams

 

144,845

 

 

40,152

 

 

261

 

 

439,865

 

 

129,193

 

 

240

 

Tablet & Other Accessories

 

117,115

 

 

31,867

 

 

268

 

 

384,301

 

 

135,309

 

 

184

 

Gaming (1)

 

322,965

 

 

148,909

 

 

117

 

 

1,239,005

 

 

690,174

 

 

80

 

Video Collaboration

 

385,657

 

 

110,675

 

 

248

 

 

1,044,935

 

 

365,616

 

 

186

 

Mobile Speakers

 

29,739

 

 

21,174

 

 

40

 

 

174,895

 

 

221,791

 

 

(21

)

Audio & Wearables

 

130,184

 

 

65,176

 

 

100

 

 

468,776

 

 

273,752

 

 

71

 

Smart Home

 

8,418

 

 

8,316

 

 

1

 

 

34,394

 

 

43,404

 

 

(21

)

Other (2)

 

81

 

 

94

 

 

(14

)

 

713

 

 

373

 

 

91

 

Total net retail sales

 

$

1,535,925

 

 

$

709,248

 

 

117

%

 

$

5,252,279

 

 

$

2,975,851

 

 

76

%

(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

 

Fiscal Years Ended

 

 

March 31,

 

March 31,

GAAP TO NON GAAP RECONCILIATION (A)

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Gross profit – GAAP

 

$

711,269

 

 

$

276,876

 

 

$

2,335,735

 

 

$

1,122,381

 

Share-based compensation expense

 

1,519

 

 

1,300

 

 

6,438

 

 

4,852

 

Amortization of intangible assets

 

3,529

 

 

4,292

 

 

13,329

 

 

14,785

 

Gross profit – Non-GAAP

 

$

716,317

 

 

$

282,468

 

 

$

2,355,502

 

 

$

1,142,018

 

 

 

 

 

 

 

 

 

 

Gross margin – GAAP

 

46.3

%

 

39.0

%

 

44.5

%

 

37.7

%

Gross margin – Non-GAAP

 

46.6

%

 

39.8

%

 

44.8

%

 

38.4

%

 

 

 

 

 

 

 

 

 

Operating expenses – GAAP

 

$

416,187

 

 

$

244,732

 

 

$

1,187,610

 

 

$

845,886

 

Less: Share-based compensation expense

 

19,786

 

 

13,269

 

 

79,581

 

 

50,018

 

Less: Amortization of intangible assets and acquisition-related costs

 

5,178

 

 

4,666

 

 

19,064

 

 

17,563

 

Less: Change in fair value of contingent consideration for business acquisition

 

 

 

23,247

 

 

5,716

 

 

23,247

 

Less: Restructuring charges (credits), net

 

 

 

74

 

 

(54

)

 

144

 

Operating expenses – Non-GAAP

 

$

391,223

 

 

$

203,476

 

 

$

1,083,303

 

 

$

754,914

 

 

 

 

 

 

 

 

 

 

% of net sales – GAAP

 

27.1

%

 

34.5

%

 

22.6

%

 

28.4

%

% of net sales – Non – GAAP

 

25.5

%

 

28.7

%

 

20.6

%

 

25.4

%

 

 

 

 

 

 

 

 

 

Operating income – GAAP

 

$

295,082

 

 

$

32,144

 

 

$

1,148,125

 

 

$

276,495

 

Share-based compensation expense

 

21,305

 

 

14,569

 

 

86,019

 

 

54,870

 

Amortization of intangible assets and acquisition-related costs

 

8,707

 

 

8,958

 

 

32,393

 

 

32,348

 

Change in fair value of contingent consideration for business acquisition

 

 

 

23,247

 

 

5,716

 

 

23,247

 

Restructuring charges (credits), net

 

 

 

74

 

 

(54

)

 

144

 

Operating income – Non – GAAP

 

$

325,094

 

 

$

78,992

 

 

$

1,272,199

 

 

$

387,104

 

 

 

 

 

 

 

 

 

 

% of net sales – GAAP

 

19.2

%

 

4.5

%

 

21.9

%

 

9.3

%

% of net sales – Non – GAAP

 

21.2

%

 

11.1

%

 

24.2

%

 

13.0

%

 

 

 

 

 

 

 

 

 

Net income – GAAP

 

$

225,747

 

 

$

213,920

 

 

$

947,257

 

 

$

449,723

 

Share-based compensation expense

 

21,305

 

 

14,569

 

 

86,019

 

 

54,870

 

Amortization of intangible assets and acquisition-related costs

 

8,707

 

 

8,958

 

 

32,393

 

 

32,348

 

Change in fair value of contingent consideration for business acquisition

 

 

 

23,247

 

 

5,716

 

 

23,247

 

Restructuring charges (credits), net

 

 

 

74

 

 

(54

)

 

144

 

Loss (gain) on investments

 

1,218

 

 

(39,783

)

 

5,910

 

 

(39,011

)

Non-GAAP income tax adjustment

 

(5,776

)

 

(150,048

)

 

25,788

 

 

(156,524

)

Net income – Non – GAAP

 

$

251,201

 

 

$

70,937

 

 

$

1,103,029

 

 

$

364,797

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

Diluted – GAAP

 

$

1.31

 

 

$

1.26

 

 

$

5.51

 

 

$

2.66

 

Diluted – Non – GAAP

 

$

1.45

 

 

$

0.42

 

 

$

6.42

 

 

$

2.15

 

 

 

 

 

 

 

 

 

 

Shares used to compute net income per share:

 

 

 

 

 

 

 

 

Diluted – GAAP and Non – GAAP

 

172,954

 

 

169,981

 

 

171,775

 

 

169,381

 

LOGITECH INTERNATIONAL S.A.

 

 

 

 

 

 

 

 

PRELIMINARY RESULTS*

 

 

 

 

 

 

 

 

(In thousands) – unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL FINANCIAL INFORMATION

 

Three Months Ended

 

Fiscal Years Ended

 

 

March 31,

 

March 31,

SHARE-BASED COMPENSATION EXPENSE

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Share-based Compensation Expense

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

1,519

 

 

$

1,300

 

 

$

6,438

 

 

$

4,852

 

Marketing and selling

 

9,229

 

 

6,819

 

 

36,788

 

 

26,835

 

Research and development

 

3,831

 

 

2,629

 

 

14,179

 

 

9,273

 

General and administrative

 

6,726

 

 

3,821

 

 

28,614

 

 

13,910

 

Total share-based compensation expense

 

21,305

 

 

14,569

 

 

86,019

 

 

54,870

 

Income tax benefit

 

(3,932

)

 

(1,451

)

 

(19,472

)

 

(14,109

)

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

 

$

17,373

 

 

$

13,118

 

 

$

66,547

 

 

$

40,761

 

*Note: These preliminary results for the three months and fiscal year ended March 31, 2021 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 ended March 31, 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)