Logitech Delivers Better-Than-Expected Q3 Results and Raises FY 2016 Outlook
Retail Sales Grow 9 Percent in Constant Currency
NEWARK, Calif. — Jan. 20, 2016 and LAUSANNE, Switzerland, Jan. 21, 2016 — Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results from continuing operations for the third quarter of Fiscal Year 2016.
- Q3 sales were $621 million, up 3 percent compared to Q3 of the prior year. Q3 retail sales (total sales excluding OEM) were $595 million and grew 9 percent in constant currency.
- Q3 GAAP operating income was $69 million. Q3 GAAP earnings per share (EPS) were $0.41, compared to $0.40 in the same quarter a year ago.
- Q3 non-GAAP operating income was $74 million, with non-GAAP EPS of $0.41, compared to $0.43 in the same quarter a year ago.
- Cash flow from operations in the quarter, including Lifesize, was $166 million.
“We delivered a strong performance in Q3, evident across the business,” said Bracken P. Darrell, Logitech president and chief executive officer. “In this milestone quarter for the company, a new Logitech emerged as we completed the exit of our OEM business and separated Lifesize. Logitech’s future business remains – and the future looks bright. We grew 9 percent in constant currency and our operating income and operating cash flow were strong. Combined, the Gaming, Mobile Speakers and Video Collaboration categories grew 34 percent in constant currency and each of them reached record high sales for a quarter. I’m delighted to raise our outlook as we enter the last quarter of the year.”
Outlook
Logitech increased its profitability outlook for Fiscal Year 2016 to approximately $170 million in non-GAAP operating income from $150 million, which included Lifesize. The Company also increased its outlook for retail sales to 7 to 9 percent growth in constant currency, up from 7 percent.
Prepared Remarks Available Online
Logitech has made its prepared written remarks for the financial results teleconference available online on the Logitech corporate website at http://ir.logitech.com.
Financial Results Teleconference and Webcast
Logitech will hold a financial results teleconference to discuss the results for Q3 FY 2016 on Jan. 21, 2016 at 8:30 a.m. Eastern Standard Time and 2:30 p.m. Central European Time. A live webcast of the call will be available on the Logitech corporate website at http://ir.logitech.com.
Continuing Operations
Logitech separated its Lifesize division from the Company on Dec. 28, 2015. The Company’s third quarter of Fiscal Year 2016 ended on Dec. 25, 2015, even though, for purposes of presentation, the Company has indicated its third quarter periods as ending on Dec. 31. Except as otherwise noted, all of the results reported in this press release for both the third quarter of Fiscal Year 2016 and the third quarter of Fiscal Year 2015, as well as comparisons between periods, are focused on results from continuing operations and do not address the performance of Lifesize, which is now reported in the Company’s financial statements under discontinued operations or total Logitech including discontinued operations. Logitech’s previous outlook of $150 million in non-GAAP operating income included outlook for Lifesize results. Logitech’s new outlook does not include outlook for Lifesize results. For more information on the impact of the Lifesize separation on Logitech’s historical results, please refer to the Financial Reporting section of Logitech’s Financial History, available on the Logitech corporate website at http://ir.logitech.com.
Use of Non-GAAP Financial Information
To facilitate comparisons to Logitech’s historical results, Logitech has included non-GAAP adjusted measures, which exclude share-based compensation expense, amortization of other intangible assets, restructuring charges (credits), investment impairment (recovery), benefit from (provision for) income taxes, one-time special charges and other items detailed under “Supplemental Financial Information” after the tables below. Logitech also presents percentage sales growth in constant currency, 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 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 2016.
About Logitech
Logitech designs products that have an everyday place in people's lives, connecting them to the digital experiences they care about. Over 30 years ago Logitech started connecting people through computers, and now it’s designing products that bring people together through music, gaming, video and computing. 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). Find Logitech at www.logitech.com, the company blog or @Logitech.
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This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation statements regarding: Logitech’s future and outlook for Fiscal Year 2016 operating income and sales growth. The forward-looking statements in this release involves 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 or our growth opportunities are more limited than we expect; if sales of PC peripherals 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 we do not fully realize our goals to lower our costs and improve our operating leverage; 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. 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 Annual Report on Form 10-K for the fiscal year ended March 31, 2015 and our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2015, 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.
2016 Logitech, Logicool, Logi and other Logitech marks are owned by Logitech and may be registered.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.
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