Logitech Announces Best Quarter Ever
Revenue Up 13%, Operating Income Up 17%, Company Increases Operating Income Goal for Full Year
FREMONT, Calif., Jan. 16, 2008 and ROMANEL-SUR-MORGES, Switzerland, Jan. 17, 2008 — Logitech International (SWX: LOGN) (Nasdaq: LOGI) today announced record sales and operating profit for the third quarter of Fiscal Year 2008, ended Dec. 31, 2007. Sales were $744 million, up 13 percent from $659 million in the same quarter last year. Operating income was $116 million, up 17 percent from $100 million for the same quarter a year ago. Net income was $134 million ($0.71 per share), up from $94 million ($0.49 per share) one year ago. Gross margin reached an all-time high for the company at 36.9 percent, compared to 36.2 percent in Q3 of FY 2007. Cash flow from operations was $177 million, the highest ever for a quarter.
Logitech’s retail sales for Q3 grew by 9 percent year over year, increasing by 9 percent in the Americas, 4 percent in EMEA and 44 percent in Asia Pacific. The growth in the Americas and EMEA was restrained by continued weakness in the webcam category. Retail sales in all regions were driven by strong demand for Harmony remote controls, keyboards and mice. Sales of Harmony remote controls increased by 72 percent, with strong growth in all regions. Keyboard sales increased by 32 percent and mice sales increased by 22 percent. OEM sales grew by 54 percent, driven by strong demand for microphones for console singing games.
“We are very pleased with our Q3 performance,” said Gerald. P. Quindlen, Logitech president and chief executive officer. “We delivered record sales and our best gross margin ever, despite a highly promotional retail environment, and we continued to improve the effectiveness of our working capital management as we finished Q3 with half a billion dollars in cash. The strong momentum in core categories such as keyboards and mice exemplifies how leadership in innovation stimulates continued demand and supports improved margins. And the robust sales of Harmony remotes underscores the promise of our increasing attention on the digital home. The progress we have made in realigning our operating expense growth and gross profit growth positions us to exceed our FY 2008 goal for operating income growth.”
For the current fiscal year, ending March 31, 2008, the company confirmed its sales target of 15 percent growth and increased its year-over-year operating income growth goal to more than 20 percent. The Company’s previously stated goal for operating income growth was 20 percent. FY 2008 gross margin is expected to be above the high end of the Company’s long-term target range of 32-34 percent.
The Company also provided preliminary financial targets of 15 percent growth in both sales and operating income for Fiscal Year 2009, ending March 31, 2009.
Logitech will hold an earnings teleconference on Jan. 17, 2008 at 14:00 Central European Time/8:00 a.m. Eastern Standard Time/5:00 a.m. Pacific Standard Time to discuss these results as well as the Company’s outlook. A live webcast and replay of the teleconference, including presentation slides, will be available on the Logitech corporate Web site at http://ir.logitech.com. Please visit the Web site at least 10 minutes early to register for the teleconference webcast.
Logitech is a world leader in personal peripherals, driving innovation in PC navigation, Internet communications, digital music, home-entertainment control, gaming and wireless devices. Founded in 1981, Logitech International is a Swiss public company traded on the SWX Swiss Exchange (LOGN) and on the Nasdaq Global Select Market (LOGI).
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This press release contains forward-looking statements, including the statements regarding expected sales and operating income growth and gross margin for Fiscal Year 2008, and preliminary expected sales and operating income growth for Fiscal Year 2009. The forward-looking statements in this release involve risks and uncertainties that could cause Logitech’s actual performance and results to differ materially from that anticipated in these forward-looking statements. Factors that could cause actual results to differ materially include if we fail to successfully innovate in our current and emerging product categories and identify new feature or product opportunities; consumer demand for our products and our ability to accurately forecast it; the effect of pricing, product, marketing and other initiatives by our competitors, and our reaction to them, on our sales, gross margins and profitability; our ability to continue to implement our plan to control operating expenses while growing sales; the sales mix among our lower- and higher-margin products and our geographic sales mix; as well as those additional factors set forth in our periodic filings with the Securities and Exchange Commission, including our annual report on Form 20-F for the fiscal year ended March 31, 2007 and our quarterly reports on Form 6-K available at www.sec.gov. Logitech does not undertake to update any forward-looking statements.
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