Company Raises FY 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 third quarter of Fiscal Year
2024.
- Sales were $1.26 billion, down 1 percent in US dollars and 3
percent in constant currency, compared to the prior year.
- GAAP operating income was $222 million, up 26 percent compared
to the prior year. Non-GAAP operating income was $248 million, up
22 percent compared to the prior year.
- GAAP earnings per share (EPS) was $1.55, up 80 percent compared
to the prior year. Non-GAAP EPS was $1.53, up 34 percent compared
to the prior year.
- Cash flow from operations was $443 million, up 58 percent
compared to the prior year. The quarter-ending cash balance was
$1.41 billion. In the quarter, the Company returned $188 million of
cash to shareholders through share repurchases.
“We delivered solid results in our third quarter,” said Hanneke
Faber, Logitech chief executive officer. “Our teams executed well,
continuing our long record of exceptional product innovation,
market share gains, strong operational discipline and prudent
financial management. But we will not be satisfied until we return
to top line growth.”
“Our third-quarter results show our continued focus on
operational discipline,” said Chuck Boynton, Logitech chief
financial officer. “While revenue declined 3% in constant currency,
we delivered strong gross margins of 42.3% and grew profitability.
We generated $443 million in operating cash flow in the quarter and
returned a total of $188 million to our shareholders through share
repurchases.”
Outlook
Logitech raised its full-year outlook for Fiscal Year 2024:
Previous FY24 outlook
New FY24 outlook
Sales
$4.0 - $4.15 billion
$4.2 - $4.25 billion
Sales growth / (decline) (in US dollars,
year over year)
(12%) - (9%)
(7%) - (6%)
Non-GAAP operating income
$525 - $575 million
$610 - $660 million
Non-GAAP op. inc. growth / (decline) (year
over year)
(11%) - (2%)
4% - 12%
Financial Results Videoconference and Webcast
Logitech will hold a financial results videoconference to
discuss the results for Q3 Fiscal Year 2024 on Tuesday, January 23,
2024 at 8:30 a.m. Eastern Standard Time and 2:30 p.m. Central
European Time. A livestream of the event will be available on the
Logitech corporate website at https://ir.logitech.com. This press
release and the Q3 Fiscal Year 2024 Shareholder Letter are also
available there.
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 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 https://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 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,
Streamlabs 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 and nine months ended December 31, 2023, 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
logistics challenges, including disruptions in transportation
lines; 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, our Quarterly Report on Form 10-Q for the quarter
ended September 30, 2023, and other 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 December
31,
Nine months ended December
31,
GAAP CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
2023
2022
2023
2022
Net sales
$
1,255,473
$
1,269,925
$
3,286,980
$
3,578,741
Cost of goods sold
726,252
789,489
1,937,367
2,193,735
Amortization of intangible assets
2,441
3,168
8,569
9,355
Gross profit
526,780
477,268
1,341,044
1,375,651
Operating expenses:
Marketing and selling
189,175
196,653
544,716
628,122
Research and development
72,704
65,640
211,822
210,166
General and administrative
39,711
29,766
116,546
92,215
Amortization of intangible assets and
acquisition-related costs
2,276
2,810
8,279
9,052
Restructuring charges, net
839
5,654
2,562
16,471
Total operating expenses
304,705
300,523
883,925
956,026
Operating income
222,075
176,745
457,119
419,625
Interest income
12,826
4,665
34,508
9,573
Other income (expense), net
189
1,406
(13,827
)
(18,367
)
Income before income taxes
235,090
182,816
477,800
410,831
Provision for (benefit from) income
taxes
(9,594
)
42,663
33,272
87,751
Net income
$
244,684
$
140,153
$
444,528
$
323,080
Net income per share:
Basic
$
1.57
$
0.87
$
2.82
$
1.98
Diluted
$
1.55
$
0.86
$
2.80
$
1.96
Weighted average shares used to compute
net income per share:
Basic
155,933
161,244
157,568
163,042
Diluted
157,440
162,529
158,843
164,427
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands, except per share
amounts) - unaudited
December 31
March 31,
CONDENSED CONSOLIDATED BALANCE
SHEETS
2023
2023
Current assets:
Cash and cash equivalents
$
1,412,650
$
1,149,023
Accounts receivable, net
685,777
630,382
Inventories
447,262
682,893
Other current assets
150,754
142,876
Total current assets
2,696,443
2,605,174
Non-current assets:
Property, plant and equipment, net
119,200
121,503
Goodwill
463,978
454,610
Other intangible assets, net
53,724
63,173
Other assets
326,594
316,293
Total assets
$
3,659,939
$
3,560,753
Current liabilities:
Accounts payable
$
527,988
$
406,968
Accrued and other current liabilities
673,435
643,139
Total current liabilities
1,201,423
1,050,107
Non-current liabilities:
Income taxes payable
111,924
106,391
Other non-current liabilities
156,491
146,695
Total liabilities
1,469,838
1,303,193
Shareholders’ equity:
Registered shares, CHF 0.25 par value:
30,148
30,148
Issued shares — 173,106 at December 31,
2023 and March 31, 2023
Additional shares that may be issued out
of conditional capital — 50,000 at December 31, 2023 and March 31,
2023
Additional shares that may be issued out
of authorized capital — 17,311 at December 31, 2023 and March 31,
2023
Additional paid-in capital
60,892
127,380
Shares in treasury, at cost — 18,108 at
December 31, 2023 and 13,763 at March 31, 2023
(1,251,314
)
(977,266
)
Retained earnings
3,434,904
3,177,575
Accumulated other comprehensive loss
(84,529
)
(100,277
)
Total shareholders’ equity
2,190,101
2,257,560
Total liabilities and shareholders’
equity
$
3,659,939
$
3,560,753
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) - unaudited
Three months ended December
31,
Nine months ended December
31,
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
2023
2022
2023
2022
Cash flows from operating
activities:
Net income
$
244,684
$
140,153
$
444,528
$
323,080
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
14,739
19,410
48,874
56,698
Amortization of intangible assets
5,074
5,929
16,583
18,173
Loss on investments
604
1,488
12,213
13,065
Share-based compensation expense
20,613
15,805
64,192
51,740
Deferred income taxes
(20,623
)
21,188
(9,515
)
24,228
Other
236
1,293
336
1,411
Changes in assets and liabilities, net of
acquisitions:
Accounts receivable, net
(11,424
)
(1,638
)
(46,786
)
(123,547
)
Inventories
91,600
104,519
237,969
126,309
Other assets
(8,301
)
16,161
3,698
20,918
Accounts payable
32,361
(56,494
)
120,383
(134,848
)
Accrued and other liabilities
73,389
12,097
13,536
(60,060
)
Net cash provided by operating
activities
442,952
279,911
906,011
317,167
Cash flows from investing
activities:
Purchases of property, plant and
equipment
(10,854
)
(23,738
)
(45,585
)
(69,122
)
Investment in privately held companies
(50
)
(351
)
(406
)
(2,626
)
Acquisitions, net of cash acquired
—
(2,688
)
(14,138
)
(8,527
)
Purchases of deferred compensation
investments
(5,345
)
(2,687
)
(7,893
)
(5,186
)
Proceeds from sales of deferred
compensation investments
5,571
2,314
8,193
4,750
Net cash used in investing
activities
(10,678
)
(27,150
)
(59,829
)
(80,711
)
Cash flows from financing
activities:
Payment of cash dividends
—
—
(182,305
)
(158,680
)
Payment of contingent consideration for
business acquisition
—
—
(5,002
)
(5,954
)
Purchases of registered shares
(187,834
)
(90,170
)
(376,775
)
(327,731
)
Proceeds from exercises of stock options
and purchase rights
—
3,214
15,319
16,064
Tax withholdings related to net share
settlements of restricted stock units
(2,372
)
(1,992
)
(28,596
)
(28,734
)
Other financing activities
—
—
(1,116
)
—
Net cash used in financing
activities
(190,206
)
(88,948
)
(578,475
)
(505,035
)
Effect of exchange rate changes on cash
and cash equivalents
6,678
3,817
(4,080
)
(24,006
)
Net increase (decrease) in cash and
cash equivalents
248,746
167,630
263,627
(292,585
)
Cash and cash equivalents, beginning of
the period
1,163,904
868,501
1,149,023
1,328,716
Cash and cash equivalents, end of the
period
$
1,412,650
$
1,036,131
$
1,412,650
$
1,036,131
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) - unaudited
SUPPLEMENTAL FINANCIAL
INFORMATION
Three months ended December
31,
Nine months ended December
31,
NET SALES
2023
2022 (1)
Change
2023
2022 (1)
Change
Net sales by product category:
Gaming (2)
$
409,043
$
411,927
(1
)%
$
957,576
$
1,031,876
(7
)%
Keyboards & Combos
229,432
220,059
4
605,201
648,632
(7
)
Pointing Devices
206,180
199,106
4
572,310
567,589
1
Video Collaboration
169,522
173,516
(2
)
461,257
534,347
(14
)
Webcams
85,851
94,252
(9
)
249,273
305,532
(18
)
Tablet Accessories
64,239
65,157
(1
)
198,252
185,945
7
Headsets
41,762
46,736
(11
)
123,023
137,429
(10
)
Other (3)
49,444
59,172
(16
)
120,088
167,391
(28
)
Total Net Sales
$
1,255,473
$
1,269,925
(1
)%
$
3,286,980
$
3,578,741
(8
)%
(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 December
31,
Nine months ended December
31,
GAAP TO NON-GAAP
RECONCILIATION(A)
2023
2022
2023
2022
Gross profit - GAAP
$
526,780
$
477,268
$
1,341,044
$
1,375,651
Share-based compensation expense
2,189
1,324
6,066
4,228
Amortization of intangible assets
2,441
3,168
8,569
9,355
Gross profit - Non-GAAP
$
531,410
$
481,760
$
1,355,679
$
1,389,234
Gross margin - GAAP
42.0
%
37.6
%
40.8
%
38.4
%
Gross margin - Non-GAAP
42.3
%
37.9
%
41.2
%
38.8
%
Operating expenses - GAAP
$
304,705
$
300,523
$
883,925
$
956,026
Less: Share-based compensation expense
18,424
14,481
58,126
47,512
Less: Amortization of intangible assets
and acquisition-related costs
2,276
2,810
8,279
9,052
Less: Restructuring charges, net
839
5,654
2,562
16,471
Operating expenses - Non-GAAP
$
283,166
$
277,578
$
814,958
$
882,991
% of net sales - GAAP
24.3
%
23.7
%
26.9
%
26.7
%
% of net sales - Non-GAAP
22.6
%
21.9
%
24.8
%
24.7
%
Operating income - GAAP
$
222,075
$
176,745
$
457,119
$
419,625
Share-based compensation expense
20,613
15,805
64,192
51,740
Amortization of intangible assets and
acquisition-related costs
4,717
5,978
16,848
18,407
Restructuring charges, net
839
5,654
2,562
16,471
Operating income - Non-GAAP
$
248,244
$
204,182
$
540,721
$
506,243
% of net sales - GAAP
17.7
%
13.9
%
13.9
%
11.7
%
% of net sales - Non-GAAP
19.8
%
16.1
%
16.5
%
14.1
%
Net income - GAAP
$
244,684
$
140,153
$
444,528
$
323,080
Share-based compensation expense
20,613
15,805
64,192
51,740
Amortization of intangible assets and
acquisition-related costs
4,717
5,978
16,848
18,407
Restructuring charges, net
839
5,654
2,562
16,471
Loss on investments
604
1,488
12,213
13,065
Non-GAAP income tax adjustment
(29,963
)
16,230
(22,033
)
23,296
Net income - Non-GAAP
$
241,494
$
185,308
$
518,310
$
446,059
Net income per share:
Diluted - GAAP
$
1.55
$
0.86
$
2.80
$
1.96
Diluted - Non-GAAP
$
1.53
$
1.14
$
3.26
$
2.71
Shares used to compute net income per
share:
Diluted - GAAP and Non-GAAP
157,440
162,529
158,843
164,427
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) - unaudited
SUPPLEMENTAL FINANCIAL
INFORMATION
Three months ended December
31,
Nine months ended December
31,
SHARE-BASED COMPENSATION
EXPENSE
2023
2022
2023
2022
Share-based Compensation
Expense
Cost of goods sold
$
2,189
$
1,324
$
6,066
$
4,228
Marketing and selling
8,878
8,014
28,623
25,240
Research and development
4,421
2,756
13,568
11,568
General and administrative
5,125
3,711
15,935
10,704
Total share-based compensation
expense
20,613
15,805
64,192
51,740
Income tax benefit
(3,391
)
(3,276
)
(11,257
)
(7,496
)
Total share-based compensation expense,
net of income tax benefit
$
17,222
$
12,529
$
52,935
$
44,244
*Note: These preliminary results
for the three and nine months ended December 31, 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
December 31, 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 (credits), 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 (credits) 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 as well as the income
tax impact of non-recurring deferred taxes, tax settlements, and
other non-routine tax events, the determination of which is based
upon the nature of the underlying items. For the three and nine
months ended December 31, 2023, non-GAAP income tax adjustment
included the tax benefit from a remeasurement of the tax basis of
goodwill under the Swiss Federal Act on Tax Reform and AHV
Financing (“TRAF”) based on an agreement reached with the Swiss Tax
Authority during the three months ended December 31, 2023.
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/20240122556101/en/
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)
Logitech (NASDAQ:LOGI)
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