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Logitech Announces Second Quarter Results for FY 2013

NEWARK, Calif. & MORGES, Switzerland--(BUSINESS WIRE)-- Logitech International (SIX: LOGN) (NASDAQ: LOGI) today announced financial results for the second quarter of Fiscal Year 2013.

Sales for Q2 FY 2013 were $548 million, down 7 percent from $589 million in Q2 FY 2012. Excluding the unfavorable impact of exchange rates, sales were down 4 percent compared to the same quarter in the prior year. Operating income was $24 million, up 3 percent from operating income of $23 million in the same quarter a year ago. Net income for Q2 FY 2013 was $55 million ($0.35 per share) compared to net income of $17 million ($0.10 per share) in Q2 FY 2012. Net income for Q2 FY 2013 includes a net tax benefit of $32 million from the closure of an income tax audit. Gross margin for the quarter was 35.8 percent, compared to 33.7 percent in the same quarter one year ago.

Logitech’s retail sales for Q2 FY 2013 decreased by 5 percent year over year, down 3 percent in EMEA, 6 percent in the Americas and 7 percent in Asia. OEM sales decreased by 27 percent. Sales for the LifeSize division decreased by 7 percent.

"In Q2, the PC market weakened more significantly than anticipated, in advance of the launch of Windows 8,” said Guerrino De Luca, Logitech chairman and chief executive officer. “This factor, as well as a general slowdown in emerging markets, negatively impacted our Q2 sales. Despite this environment, we executed effectively during the quarter, improving our gross margin and operating results. We also recently launched compelling new products for tablets, smartphones, the digital home, Macs and Windows 8 PCs in time for the holiday season.

“Looking ahead, given the uncertainty in the PC market, we are now planning for continued strong headwinds in all of our PC-related categories for the remainder of the fiscal year. We expect this weakness to more than offset the positive impact of our new product launches, and consequently, we now anticipate our sales and operating income for the second half of FY 2013 will be below that of the second half of the prior fiscal year. In addition to managing our spending in line with the current environment, we are also in the process of reassessing the strategy within each of our PC-related product categories to deliver improved performance.”

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 http://ir.logitech.com. 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 FY 2013 on Thursday, Oct. 25, 2012 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 http://ir.logitech.com.

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 within the meaning of the federal securities laws, including, without limitation, statements regarding: our outlook for the remainder of FY 2013, year-over-year financial performance for the second half of FY 2013, our strategy within our product categories, and our ability to deliver improved financial performance. The forward-looking statements in this 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; the demand of our customers and our consumers for our products and our ability to accurately forecast 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 in our new product categories and sales in emerging market geographies; if sales of PC peripherals in mature markets are less than we expect; 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 our products and marketing strategies fail to separate our products from competitors’ products; 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 exchange rates; if the restructuring fails to produce the intended performance and cost savings results or is not implemented in the contemplated timeframe; if the reassessment of strategy within the PC-related product categories fails to deliver improved financial performance. 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, including our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012 and our Annual Report on Form 10-K for the fiscal year ended March 31, 2012, 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.

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 www.logitech.com.

LOGITECH INTERNATIONAL S.A.

(In thousands, except per share amounts) - Unaudited

Quarter Ended September 30, CONSOLIDATED STATEMENTS OF OPERATIONS 2012 2011 Net sales Cost of goods sold Gross profit 195,995 198,421 Operating expenses: Total operating expenses 171,850 174,926 Operating income 24,145 23,495 Income before income taxes 23,789 22,333 Net income $ 54,865 $ 17,445 LOGITECH INTERNATIONAL S.A. (In thousands, except per share amounts) - Unaudited Six Months Ended September 30, CONSOLIDATED STATEMENTS OF OPERATIONS 2012 2011 Net sales Cost of goods sold Gross profit 340,247 324,028 Operating expenses: Total operating expenses 375,382 345,565 Operating loss (35,135 ) (21,537 ) Loss before income taxes (35,266 ) (16,818 ) Net income (loss) $ 2,720 $ (12,161 ) LOGITECH INTERNATIONAL S.A. (In thousands) CONSOLIDATED BALANCE SHEETS September 30, 2012 March 31, 2012 September 30, 2011 (Unaudited) (Audited) (Unaudited) Current assets Non-Current assets Total assets Current liabilities Non-current liabilities Total liabilities Shareholders' equity Total liabilities and shareholders' equity LOGITECH INTERNATIONAL S.A. (In thousands) - Unaudited Three Months Ended September 30, CONSOLIDATED STATEMENTS OF CASH FLOWS 2012 2011 Cash flows from operating activities: Net cash provided by (used in) operating activities 16,151 (2,110 ) Cash flows from investing activities: Net cash used in investing activities (14,869 ) (29,143 ) Cash flows from financing activities: Net cash used in financing activities (125,306 ) (63,980 ) Cash and cash equivalents at end of period $ 237,033 $ 379,450 LOGITECH INTERNATIONAL S.A. (In thousands) - Unaudited Six Months Ended September 30, CONSOLIDATED STATEMENTS OF CASH FLOWS 2012 2011 Cash flows from operating activities: Net cash provided by operating activities 9,095 1,634 Cash flows from investing activities: Net cash used in investing activities (33,585 ) (34,845 ) Cash flows from financing activities: Net cash used in financing activities (215,022 ) (63,525 ) Cash and cash equivalents at end of period $ 237,033 $ 379,450 LOGITECH INTERNATIONAL S.A. (In thousands, except per share amounts) - Unaudited Quarter Ended Six Months Ended September 30, September 30, SUPPLEMENTAL FINANCIAL INFORMATION 2012 2011 2012 2011 (**)

** Certain products within the retail product families as presented in prior years have been reclassified to conform to the current year presentation, with no impact on previously reported total net retail sales.

Quarter Ended Six Months Ended September 30, September 30, (*) 2012 2011 2012 2011

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.

(LOGIIR)

Logitech International
Joe Greenhalgh
510-713-4430
Vice President, Investor Relations – USA
Nancy Morrison
510-713-4948
Vice President, Corporate Communications – USA
or
Cumulus Communications – Switzerland
Ben Starkie
+41 79 292 3499

Source: Logitech International