Logitech Reports Highest Retail Revenue in Company’s History
Q3 Retail Revenue Up 12%; Company Raises Sales and Profit Outlook
NEWARK, Calif. — January 24, 2017 and LAUSANNE, Switzerland, January 25, 2017 — Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced better-than-expected preliminary financial results for the third quarter of Fiscal Year 2017.
- Q3 retail sales grew 13 percent in constant currency, reaching the highest level ever in the Company’s history. Q3 retail sales grew 12 percent in USD.
- Q3 sales were $667 million, up 7 percent compared to Q3 of the prior year, which still included OEM sales.
- Q3 GAAP operating income grew 41% to $96 million, compared to $69 million a year ago. Q3 GAAP earnings per share (EPS) were $0.59, compared to $0.41 a year ago.
- Q3 non-GAAP operating income grew 34% to $99 million, compared to $74 million a year ago. Q3 non-GAAP EPS grew 37% to $0.56, compared to $0.41 a year ago.
- Cash flow from operations for the first nine months of Fiscal Year 2017 was $234 million, compared to $151 million for same period a year ago.
“This Q3, our results exceeded expectations and were outstanding, with broad-based growth across all our regions and almost all product categories,” said Bracken Darrell, Logitech president and chief executive officer. “We delivered both the highest retail revenue and the highest non-GAAP gross margin in Logitech’s 35-year history. Our strategy is working, and we are just at the beginning of our path to deliver what we’re capable of. We have significantly raised our outlook on the back of this performance.”
Logitech raised its Fiscal Year 2017 outlook to 12 to 13 percent retail sales growth in constant currency, up from its previous range of 8 to 10 percent retail sales growth in constant currency. The Company also increased its non-GAAP operating income outlook for Fiscal Year 2017 to a range of $225 to $230 million, up from its prior range of $195 million to $205 million.
These preliminary results for the three and nine months ended December 31, 2016 are subject to adjustments, including completion of our evaluation of the changes in the fair value of contingent consideration for our acquisition of Jaybird LLC and other subsequent events that may occur through the date of filing our Quarterly Report on Form 10-Q.
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 2017 on Weds., January 25, 2017 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.
Logitech separated its Lifesize division from the Company on Dec. 28, 2015. Except as otherwise noted, all of the results reported in this press release 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. 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 and Constant Currency
To facilitate comparisons to Logitech’s historical results, Logitech has included non-GAAP adjusted measures, which exclude share-based compensation expense, amortization of intangible assets, purchase accounting effect on inventory, acquisition-related costs, change in fair value of contingent consideration for business acquisition, restructuring charges (credits), gain (loss) on equity-method investment, investigation and related expenses, non-GAAP income tax adjustment, and other items detailed under “Supplemental Financial Information” after the tables below. Logitech also 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. Logitech believes this information, used together with the GAAP financial 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 2017.
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.
This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding: our strategy, our capabilities, and our outlook for Fiscal Year 2017 operating income and sales growth. 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 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, 2016 and our Quarterly Report on Form 10-Q for fiscal quarter ended September 30, 2016, 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.
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