INSERTING and REPLACING Logitech Announces Second Quarter Fiscal Year 2024 Results
Company Raises FY 2024 OutlookLAUSANNE, Switzerland & SAN JOSE, Calif.–(BUSINESS WIRE)–Insert after last paragraph of release: GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
The updated release reads:
LOGITECH ANNOUNCES SECOND QUARTER FISCAL YEAR 2024 RESULTS
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 second quarter of Fiscal Year 2024.
Sales were $1.06 billion, down 8 percent in US dollars and 9 percent in constant currency, compared to the prior year.
GAAP operating income was $157 million, up 23 percent compared to the prior year. Non-GAAP operating income was $183 million, up 17 percent compared to the prior year. In the quarter, the Company continued to reduce operating expenses, down 9 percent compared to the prior year, in line with the decline in net sales.
GAAP earnings per share (EPS) was $0.86, up 72 percent compared to the prior year. Non-GAAP EPS was $1.09, up 30 percent compared to the prior year.
Cash flow from operations was $223 million, up $150 million compared to the prior year. The quarter-ending cash balance was $1.16 billion. In the quarter, the Company returned $276 million of cash to shareholders through its annual dividend payment and share repurchases.
“The Logitech team stepped up execution this quarter and delivered results that demonstrate the underlying potential of our business,” said Guy Gecht, Logitech interim chief executive officer. “We made great progress toward a return to growth and exceeded our pre-pandemic profit levels. Our design-led innovation capabilities were on full display, with 16 new product introductions during the quarter. I’m proud of what our team has accomplished in this challenging environment. We remain focused on developing market leading products, operational excellence, and value creation for shareholders.”
“While our second quarter revenue was down compared to last year, we delivered expanded gross margins of 42.0% and operating margins of 17.3%,” said Chuck Boynton, Logitech chief financial officer. “Through strong operating execution and working capital management, we generated $223 million in operating cash flow and returned $276 million to our shareholders. Our focus on cost discipline with a customer-first mindset is paying off, with share growth in key categories. We remain cautiously optimistic on the balance of the year and are pleased to raise the annual outlook.”
CEO Search Update
Over the last four months, the board of directors, led by Wendy Becker, has been conducting a global CEO search looking at internal and external candidates across industries and geographies. The board has met with a number of strong, diverse and experienced candidates, and is moving closer to finalizing a decision.
Updated Full Year Outlook
Logitech raised its full-year outlook for Fiscal Year 2024:
Previous FY 2024 outlook
New FY 2024 outlook
Sales
$3.8 – $4.0 billion
$4.0 – $4.15 billion
Sales decline (in US dollars, year over year)
16% – 12%
12% – 9%
Non-GAAP operating income
$400 – $500 million
$525 – $575 million
Non-GAAP op. inc. decline (year over year)
32% – 15%
11% – 2%
H1 2024 Results Compared to H1 2024 Outlook
Logitech exceeded its outlook for the first half of Fiscal Year 2024:
H1 2024 outlook
H1 2024 results
Sales
$1.875 – $1.975 billion
$2.032 billion
Sales decline (in US dollars, year over year)
19% – 14%
12%
Non-GAAP operating income
$180 – $220 million
$292 million
Non-GAAP op. inc. decline (year over year)
40% – 27%
3%
Financial Results Videoconference and Webcast
Logitech will hold a financial results videoconference to discuss the results for Q2 Fiscal Year 2024 on Tuesday, October 24, 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 (credits), 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 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 and six months ended September 30, 2023, Fiscal Year 2024 outlook for sales and non-GAAP operating income, CEO search update, 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, our Quarterly Report on Form 10-Q for the quarter ended June 30, 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
September 30,
Six months ended
September 30,
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
2023
2022
2023
2022
Net sales
$
1,057,008
$
1,148,951
$
2,031,507
$
2,308,816
Cost of goods sold
615,403
707,026
1,211,115
1,404,246
Amortization of intangible assets
2,983
3,145
6,128
6,187
Gross profit
438,622
438,780
814,264
898,383
Operating expenses:
Marketing and selling
176,356
202,091
355,541
431,469
Research and development
68,559
69,009
139,118
144,526
General and administrative
35,538
26,589
76,835
62,449
Amortization of intangible assets and acquisition-related costs
3,318
2,873
6,003
6,242
Restructuring charges (credits), net
(1,788
)
10,817
1,723
10,817
Total operating expenses
281,983
311,379
579,220
655,503
Operating income
156,639
127,401
235,044
242,880
Interest income
11,856
3,459
21,682
4,908
Other income (expense), net
(1,044
)
(25,397
)
(14,016
)
(19,773
)
Income before income taxes
167,451
105,463
242,710
228,015
Provision for income taxes
30,334
23,372
42,866
45,088
Net income
$
137,117
$
82,091
$
199,844
$
182,927
Net income per share:
Basic
$
0.87
$
0.50
$
1.26
$
1.12
Diluted
$
0.86
$
0.50
$
1.25
$
1.11
Weighted average shares used to compute net income per share:
Basic
157,911
163,186
158,385
163,937
Diluted
158,934
164,328
159,545
165,371
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands, except per share amounts) – unaudited
September 30,
March 31,
CONDENSED CONSOLIDATED BALANCE SHEETS
2023
2023
Current assets:
Cash and cash equivalents
$
1,163,904
$
1,149,023
Accounts receivable, net
656,895
630,382
Inventories
532,943
682,893
Other current assets
138,482
142,876
Total current assets
2,492,224
2,605,174
Non-current assets:
Property, plant and equipment, net
122,027
121,503
Goodwill
461,401
454,610
Other intangible assets, net
58,081
63,173
Other assets
291,297
316,293
Total assets
$
3,425,030
$
3,560,753
Current liabilities:
Accounts payable
$
492,905
$
406,968
Accrued and other current liabilities
594,042
643,139
Total current liabilities
1,086,947
1,050,107
Non-current liabilities:
Income taxes payable
114,235
106,391
Other non-current liabilities
146,583
146,695
Total liabilities
1,347,765
1,303,193
Shareholders’ equity:
Registered shares, CHF 0.25 par value:
30,148
30,148
Issued shares — 173,106 at September 30, 2023 and March 31, 2023
Additional shares that may be issued out of conditional capital — 50,000 at September 30, 2023 and March 31, 2023
Additional shares that may be issued out of authorized capital — 17,311 at September 30, 2023 and March 31, 2023
Additional paid-in capital
47,311
127,380
Shares in treasury, at cost — 16,029 at September 30, 2023 and 13,763 at March 31, 2023
(1,083,468
)
(977,266
)
Retained earnings
3,190,220
3,177,575
Accumulated other comprehensive loss
(106,946
)
(100,277
)
Total shareholders’ equity
2,077,265
2,257,560
Total liabilities and shareholders’ equity
$
3,425,030
$
3,560,753
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) – unaudited
Three months ended
September 30,
Six months ended
September 30,
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
2023
2022
2023
2022
Cash flows from operating activities:
Net income
$
137,117
$
82,091
$
199,844
$
182,927
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
16,637
18,662
34,135
37,288
Amortization of intangible assets
5,682
6,015
11,509
12,244
Loss (gain) on investments
(214
)
22,934
11,609
11,577
Share-based compensation expense
22,068
12,245
43,579
35,935
Deferred income taxes
8,146
2,775
11,108
3,040
Other
76
242
100
118
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, net
(100,752
)
(77,337
)
(35,362
)
(121,909
)
Inventories
35,929
22,114
146,369
21,790
Other assets
(22,343
)
(175
)
11,999
4,757
Accounts payable
106,442
(8,320
)
88,022
(78,354
)
Accrued and other liabilities
14,476
(8,322
)
(59,853
)
(72,157
)
Net cash provided by operating activities
223,264
72,924
463,059
37,256
Cash flows from investing activities:
Purchases of property, plant and equipment
(18,493
)
(25,821
)
(34,731
)
(45,384
)
Investment in privately held companies
(322
)
(187
)
(356
)
(2,275
)
Acquisitions, net of cash acquired
(12,878
)
—
(14,138
)
(5,839
)
Purchases of deferred compensation investments
(1,479
)
(1,577
)
(2,548
)
(2,499
)
Proceeds from sales of deferred compensation investments
1,551
1,493
2,622
2,436
Net cash used in investing activities
(31,621
)
(26,092
)
(49,151
)
(53,561
)
Cash flows from financing activities:
Payment of cash dividends
(182,305
)
(158,680
)
(182,305
)
(158,680
)
Payment of contingent consideration for business acquisition
(5,002
)
(5,954
)
(5,002
)
(5,954
)
Purchases of registered shares
(93,865
)
(116,942
)
(188,941
)
(237,561
)
Proceeds from exercises of stock options and purchase rights
13,206
12,850
15,319
12,850
Tax withholdings related to net share settlements of restricted stock units
(2,028
)
(2,598
)
(26,224
)
(26,742
)
Other financing activities
(1,116
)
—
(1,116
)
—
Net cash used in financing activities
(271,110
)
(271,324
)
(388,269
)
(416,087
)
Effect of exchange rate changes on cash and cash equivalents
(7,715
)
(13,664
)
(10,758
)
(27,823
)
Net increase (decrease) in cash and cash equivalents
(87,182
)
(238,156
)
14,881
(460,215
)
Cash and cash equivalents, beginning of the period
1,251,086
1,106,657
1,149,023
1,328,716
Cash and cash equivalents, end of the period
$
1,163,904
$
868,501
$
1,163,904
$
868,501
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) – unaudited
SUPPLEMENTAL FINANCIAL INFORMATION
Three months ended September 30,
Six months ended September 30,
NET SALES
2023
2022 (1)
Change
2023
2022 (1)
Change
Net sales by product category:
Gaming (2)
$
282,104
$
322,028
(12
)%
$
548,533
$
619,949
(12
)%
Keyboards & Combos
194,914
200,853
(3
)
375,769
428,573
(12
)
Pointing Devices
191,676
185,200
3
366,130
368,483
(1
)
Video Collaboration
152,389
179,199
(15
)
291,735
360,831
(19
)
Webcams
88,222
102,018
(14
)
163,422
211,280
(23
)
Tablet Accessories
63,677
54,203
17
134,013
120,788
11
Headsets
44,411
44,750
(1
)
81,261
90,693
(10
)
Other (3)
39,615
60,700
(35
)
70,644
108,219
(35
)
Total Net Sales
$
1,057,008
$
1,148,951
(8
)%
$
2,031,507
$
2,308,816
(12
)%
(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
September 30,
Six months ended
September 30,
GAAP TO NON-GAAP RECONCILIATION (A)
2023
2022
2023
2022
Gross profit – GAAP
$
438,622
$
438,780
$
814,264
$
898,383
Share-based compensation expense
2,462
1,443
3,877
2,904
Amortization of intangible assets
2,983
3,145
6,128
6,187
Gross profit – Non-GAAP
$
444,067
$
443,368
$
824,269
$
907,474
Gross margin – GAAP
41.5
%
38.2
%
40.1
%
38.9
%
Gross margin – Non-GAAP
42.0
%
38.6
%
40.6
%
39.3
%
Operating expenses – GAAP
$
281,983
$
311,379
$
579,220
$
655,503
Less: Share-based compensation expense
19,606
10,802
39,702
33,031
Less: Amortization of intangible assets and acquisition-related costs
3,318
2,873
6,003
6,242
Less: Restructuring charges (credits), net
(1,788
)
10,817
1,723
10,817
Operating expenses – Non-GAAP
$
260,847
$
286,887
$
531,792
$
605,413
% of net sales – GAAP
26.7
%
27.1
%
28.5
%
28.4
%
% of net sales – Non-GAAP
24.7
%
25.0
%
26.2
%
26.2
%
Operating income – GAAP
$
156,639
$
127,401
$
235,044
$
242,880
Share-based compensation expense
22,068
12,245
43,579
35,935
Amortization of intangible assets and acquisition-related costs
6,301
6,018
12,131
12,429
Restructuring charges (credits), net
(1,788
)
10,817
1,723
10,817
Operating income – Non-GAAP
$
183,220
$
156,481
$
292,477
$
302,061
% of net sales – GAAP
14.8
%
11.1
%
11.6
%
10.5
%
% of net sales – Non-GAAP
17.3
%
13.6
%
14.4
%
13.1
%
Net income – GAAP
$
137,117
$
82,091
$
199,844
$
182,927
Share-based compensation expense
22,068
12,245
43,579
35,935
Amortization of intangible assets and acquisition-related costs
6,301
6,018
12,131
12,429
Restructuring charges (credits), net
(1,788
)
10,817
1,723
10,817
Loss (gain) on investments
(214
)
22,934
11,609
11,577
Non-GAAP income tax adjustment
9,933
3,607
7,930
7,066
Net income – Non-GAAP
$
173,417
$
137,712
$
276,816
$
260,751
Net income per share:
Diluted – GAAP
$
0.86
$
0.50
$
1.25
$
1.11
Diluted – Non-GAAP
$
1.09
$
0.84
$
1.74
$
1.58
Shares used to compute net income per share:
Diluted – GAAP and Non-GAAP
158,934
164,328
159,545
165,371
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) – unaudited
SUPPLEMENTAL FINANCIAL INFORMATION
Three months ended
September 30,
Six months ended
September 30,
SHARE-BASED COMPENSATION EXPENSE
2023
2022
2023
2022
Share-based Compensation Expense
Cost of goods sold
$
2,462
$
1,443
$
3,877
$
2,904
Marketing and selling
9,262
7,429
19,745
17,226
Research and development
4,694
3,280
9,147
8,812
General and administrative
5,650
93
10,810
6,993
Total share-based compensation expense
22,068
12,245
43,579
35,935
Income tax expense (benefit)
(2,548
)
102
(7,866
)
(4,220
)
Total share-based compensation expense, net of income tax expense (benefit)
$
19,520
$
12,347
$
35,713
$
31,715
*Note: These preliminary results for the three and six months ended September 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 t Contacts
Nate Melihercik, Head of Global Investor Relations – ir@logitech.comNicole 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) Read full story here
