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Logitech Announces Second Quarter Results for FY 2012

Logitech International (SIX:LOGN) (Nasdaq:LOGI) today announced financial results for the second quarter of Fiscal Year 2012.

Sales for Q2 FY 2012 were $589 million, up 1 percent from $582 million in Q2 FY 2011. Excluding the favorable impact of exchange rate changes, sales declined by 2 percent year over year. Operating income was $23 million compared to $51 million in the same quarter a year ago. Net income for Q2 FY 2012 was $17 million ($0.10 per share) compared to net income of $41 million ($0.23 per share) in Q2 of FY 2011. Gross margin for the quarter was 33.7 percent, down from 37.3 percent one year ago.

Logitech’s retail sales for Q2 FY 2012 increased by 2 percent, with an increase in Asia of 22 percent, and a decrease in the Americas and EMEA of 1 percent. OEM sales decreased by 17 percent. Sales for the LifeSize division grew 19 percent.

“Our Q2 results are consistent with our expectations and the full-year outlook we presented on September 22,” said Guerrino De Luca, Logitech chairman of the board and acting president and chief executive officer. “As we focus on reinvigorating our product offerings and executing in sales and marketing, we expect our initiatives will begin to contribute to improved performance as we move through the second half of FY 2012.”

Share Repurchase Program

Logitech has applied for an amendment of its $250 million buyback program to enable the future repurchase of shares for cancellation. The amendment is subject to the approval of the Swiss regulatory authorities. The Company has approximately $177 million remaining under the program after repurchasing approximately 7.6 million shares for a total of $73 million during Q2 FY 2012.


For Fiscal Year 2012, ending March 31, 2012, the Company continues to expect sales of approximately $2.4 billion and operating income of approximately $90 million. The gross margin for the full year, which factors in the very low margin previously reported for Q1, is estimated to reach approximately 33 percent. Gross margin in both Q3 and Q4 is expected to be well above the full year average.

Prepared Remarks Available Online

Logitech has made its prepared written remarks for the financial results teleconference available online on the Logitech corporate Web site at The remarks are posted in the Calendar section on the Investor home page.

Financial Results Teleconference and Webcast

Logitech will hold a financial results teleconference to discuss the results for Q2 and the Company’s outlook on Thursday, Oct. 27, 2011 at 8:30 a.m. Eastern Daylight Time and 14:30 Central European Summer Time. A live webcast of the call will be available on the Logitech corporate website at

About Logitech

Logitech is a world leader in products that connect people to the digital experiences they care about. Spanning multiple computing, communication and entertainment platforms, Logitech’s combined hardware and software enable or enhance digital navigation, music and video entertainment, gaming, social networking, audio and video communication over the Internet, video security and home-entertainment control. Founded in 1981, Logitech International is a Swiss public company listed on the SIX Swiss Exchange (LOGN) and on the Nasdaq Global Select Market (LOGI).

This press release contains forward-looking statements, including the statements regarding anticipated sales, operating income and gross margin for FY 2012, gross margin for the second half of FY 2012, and the impact of our product offering and sales and marketing initiatives on future performance. The forward-looking statements in this release involve risks and uncertainties that could cause Logitech’s actual results to differ materially from that anticipated in these forward-looking statements. Factors that could cause actual results to differ materially include: the demand of our customers and our consumers for our products and our ability to accurately forecast it; if our investment prioritization decisions do not result in the sales or profitability growth we expect, or when we expect it; the effect of pricing, product, marketing and other initiatives by our competitors, and our reaction to them, on our sales, gross margins and profitability; the sales mix among our lower- and higher-margin products and our geographic sales mix; if our product offerings and marketing activities do not result in the sales and profitability growth we expect, or when we expect it; if we fail to take advantage of trends in the consumer electronics and personal computers industries, including the growth of mobile computing devices such as smartphones and tablets with touch interfaces, or if significant demand for peripherals to use with tablets and other mobile devices with touch interfaces does not develop; if there is a deterioration of business and economic conditions in one or more of our sales regions or operating segments, or significant fluctuations in currency exchange rates; if the sales growth in emerging markets for our PC peripherals and other products does not increase as much as we expect; if our operational changes in our EMEA sales region are not completed when we expect, or do not result in the sales improvement in EMEA we expect; the adverse conclusion of one or more ongoing tax audits in various jurisdictions and a material assessment by a governing tax authority that adversely affects our profitability; competition in the video conferencing and communications industry, including from companies with significantly greater resources, sales and marketing organizations, installed base and name recognition; as well as those additional factors set forth 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, 2011 our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011, and the Quarterly Report on Form 10-Q we intend to file for the fiscal quarter ended September 30, 2011, available at Logitech does not undertake to update any forward-looking statements, which speak as of their respective dates.

Logitech, the Logitech logo, and other Logitech marks are registered in Switzerland 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 Web site at



(In thousands, except per share amounts) - Unaudited

Quarter Ended September 30,
Net sales $ 589,204 $ 581,884
Cost of goods sold 390,783 364,950
Gross profit198,421216,934
% of net sales33.7%37.3%
Operating expenses:
Marketing and selling 107,446 97,412
Research and development 39,491 40,927
General and administrative 27,989 27,420
Total operating expenses174,926165,759
Operating income23,49551,175
Interest income, net 601 635
Other expense, net (1,763 ) (1,794 )
Income before income taxes22,33350,016
Provision for income taxes 4,888 8,856
Net income$17,445$41,160
Shares used to compute net income per share:
Basic 176,878 176,359
Diluted 177,277 177,958
Net income per share:
Basic $ 0.10 $ 0.23
Diluted $ 0.10 $ 0.23


(In thousands, except per share amounts) - Unaudited

Six Months Ended September 30,
Net sales $ 1,069,645 $ 1,061,214
Cost of goods sold 745,617 675,251
Gross profit324,028385,963
% of net sales30.3%36.4%
Operating expenses:
Marketing and selling 207,239 188,889
Research and development 79,472 79,316
General and administrative 58,854 54,780
Total operating expenses345,565322,985
Operating income (loss)(21,537)62,978
Interest income, net 1,291 1,156
Other income, net 3,428 2
Income (loss) before income taxes(16,818)64,136
Provision (benefit) for income taxes (4,657 ) 3,454
Net income (loss)$(12,161)$60,682
Shares used to compute net income (loss) per share:
Basic 178,111 175,921
Diluted 178,111 177,588
Net income (loss) per share:
Basic $ (0.07 ) $ 0.34
Diluted $ (0.07 ) $ 0.34


(In thousands) - Unaudited

CONSOLIDATED BALANCE SHEETSSeptember 30, 2011March 31, 2011September 30, 2010
Current assets
Cash and cash equivalents $ 379,450 $ 477,931 $ 307,679
Accounts receivable 294,691 258,294 304,998
Inventories 325,053 280,814 343,021
Other current assets 85,004 59,347 63,482
Total current assets 1,084,198 1,076,386 1,019,180
Property, plant and equipment 78,416 84,160 91,122
Intangible assets
Goodwill 560,343 547,184 553,794
Other intangible assets 66,693 74,616 88,389
Other assets 74,053 79,210 66,877
Total assets $ 1,863,703 $ 1,861,556 $ 1,819,362
Current liabilities
Accounts payable $ 342,070 $ 298,160 $ 370,033
Accrued liabilities 187,017 172,560 198,727
Total current liabilities 529,087 470,720 568,760
Other liabilities 185,277 185,835 160,521
Total liabilities 714,364 656,555 729,281
Shareholders' equity 1,149,339 1,205,001 1,090,081
Total liabilities and shareholders' equity $ 1,863,703 $ 1,861,556 $ 1,819,362


(In thousands) - Unaudited

Six Months Ended September 30,
Cash flows from operating activities:
Net income (loss) $ (12,161 ) $ 60,682
Non-cash items included in net income (loss):
Depreciation 24,593 23,343
Amortization of other intangible assets 13,556 14,027
Inventory valuation adjustment 34,074 -
Share-based compensation expense 16,453 16,720
Gain on disposal of property and plant (4,904 ) (838 )
Excess tax benefits from share-based compensation (30 ) (676 )
Loss on cash surrender value of life insurance policies - 169
Deferred income taxes and other (8,554 ) 1,995
Changes in assets and liabilities:
Accounts receivable (36,517 ) (99,615 )
Inventories (59,589 ) (129,497 )
Other assets (6,886 ) (5,511 )
Accounts payable 45,088 110,775
Accrued liabilities (3,489 ) 13,316
Net cash provided by operating activities1,6344,890
Cash flows from investing activities:
Acquisitions and investments, net of cash acquired (18,814 ) (7,300 )
Purchases of property, plant and equipment (20,921 ) (25,419 )
Proceeds from sale of property and plant 4,904 2,688
Purchases of trading investments (4,536 ) -
Proceeds from sales of trading investments 4,522 -
Net cash used in investing activities(34,845)(30,031)
Cash flows from financing activities:
Purchases of treasury shares (73,134 ) -
Proceeds from sale of shares upon exercise of options and purchase rights 9,764 16,570
Tax withholdings related to net share settlements of restricted stock units (185 ) (223 )
Excess tax benefits from share-based compensation 30 676
Net cash provided by (used in) financing activities(63,525)17,023
Effect of exchange rate changes on cash and cash equivalents (1,745 ) (4,147 )
Net decrease in cash and cash equivalents (98,481 ) (12,265 )
Cash and cash equivalents at beginning of period 477,931 319,944
Cash and cash equivalents at end of period$379,450$307,679


(In thousands, except per share amounts) - Unaudited

Quarter Ended
September 30,
Six Months Ended
September 30,
Depreciation $ 11,421 $ 11,005 $ 24,593 $ 23,343
Amortization of other intangible assets 6,926 7,116 13,556 14,027
Operating income (loss) 23,495 51,175 (21,537 ) 62,978
Operating income before depreciation and amortization 41,842 69,296 16,612 100,348
Capital expenditures 10,360 13,501 20,921 25,419
Net sales by channel:
Retail $ 501,735 $ 489,721 $ 896,511 $ 883,587
OEM 50,261 60,850 99,439 119,186
LifeSize 37,208 31,313 73,695 58,441
Total net sales $ 589,204 $ 581,884 $ 1,069,645 $ 1,061,214
Net retail sales by product family:
Retail - Pointing Devices $ 148,386 $ 153,870 $ 280,448 $ 285,716
Retail - Keyboards & Desktops 109,325 94,507 203,921 169,788
Retail - Audio 130,815 119,965 212,379 215,611
Retail - Video 57,422 68,794 107,267 115,850
Retail - Gaming 29,152 21,207 52,545 36,658
Retail - Digital Home 26,635 31,378 39,951 59,964
Total net retail sales $ 501,735 $ 489,721 $ 896,511 $ 883,587
Quarter Ended
September 30,
Six Months Ended
September 30,
Share-based Compensation Expense 2011201020112010
Cost of goods sold $ 950 $ 919 $ 2,110 $ 1,910
Marketing and selling 3,448 3,091 6,965 6,168
Research and development 1,754 1,776 3,562 3,552
General and administrative 586 2,472 3,816 5,090
Income tax benefit (2,276 ) (2,442 ) (4,665 ) (4,337 )
Total share-based compensation expense after income taxes $ 4,462 $ 5,816 $ 11,788 $ 12,383
Share-based compensation expense net of tax, per share (diluted) $ 0.03 $ 0.03 $ 0.07 $ 0.07

Constant dollar sales (sales excluding impact of exchange rate changes)

We refer to our net sales excluding the impact of foreign currency exchange rates as constant dollar sales. Constant dollar sales are a non-GAAP financial measure, which is information derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. GAAP. Our management uses these non-GAAP measures in its financial and operational decision-making, and believes these non-GAAP measures, when considered in conjunction with the corresponding GAAP measures, facilitate a better understanding of changes in net sales. Constant dollar sales are calculated by translating prior period sales in each local currency at the current period's average exchange rate for that currency.


Logitech International
Joe Greenhalgh, 510-713-4430
Vice President, Investor Relations – USA
Nancy Morrison, 510-713-4948
Vice President, Corporate Communications – USA
Laura Scorza, +41-(0) 21-863-5336
Sr. Public Relations Manager – Europe
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