Logitech Exceeds Fiscal Year 2015 Expectations; Best Earnings in Seven Years
Q4 Growth Category up 45 Percent in Constant Currency; Company Announces Acceleration of Growth Transformation
NEWARK, Calif. — April 22, 2015 and LAUSANNE, Switzerland, April 23, 2015 — Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced preliminary financial results for the fourth quarter and full year of Fiscal Year 2015. Q4 closed a strong fiscal year with better-than-expected sales of $467 million – up 1 percent in constant currency – and GAAP operating income of $12 million, with non-GAAP operating income of $14 million.
For the full Fiscal Year 2015, ended March 31, 2015:
- Sales were $2.11 billion, down 1 percent compared to the previous fiscal year, and up 2 percent in constant currency. Importantly, Retail Strategic – sales in the Company’s Profit Maximization and Growth categories – grew by 6 percent in constant currency.
- GAAP operating income was $141 million, with GAAP earnings per share (EPS) of $0.81, compared to $0.46 a year ago. This was the Company’s best EPS since FY 2008.
- Non-GAAP operating income was $191 million, with non-GAAP EPS of $1.04, up from $0.75 a year ago (also the Company’s best since FY 2008).
- Cash flow from operations was $179 million.
“We closed Fiscal Year 2015 with a better-than-expected performance and good momentum in spite of currency headwinds,” said Bracken Darrell, Logitech president and chief executive officer. “Our Growth category – Gaming, Tablet and Other Accessories, Mobile Speakers and Video Collaboration – sales grew by 28 percent in constant currency over the full year, accelerating in the fourth quarter to 45 percent growth, the best performance of the fiscal year.
“Looking at Fiscal Year 2016, we’re playing offense. We will accelerate our transformation of Logitech into a simpler, faster, growing company. We will focus on our growing Retail Strategic business. Consequently, we plan to exit our OEM business and reorganize Lifesize to sharpen its focus on its cloud-based offering. We will also streamline our overall cost structure through product, overhead and infrastructure cost reductions, including a targeted resource realignment. As a result, over the coming year we expect restructuring charges of approximately $15 million to $20 million. The savings from all these actions will be used to offset currency headwinds and invest in future growth.”
Logitech confirmed its FY 2016 outlook of $150 million in non-GAAP operating income, despite the stronger currency headwinds, and 7% growth for Retail Strategic sales in constant currency.
These preliminary Q4 and full year FY15 results are subject to material adjustments, including completion of our evaluation of Lifesize goodwill, Lifesize asset impairment and other subsequent events that may occur through the date of filing our Annual Report on Form 10-K.
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, in the Calendar section.
Financial Results Teleconference and Webcast
Logitech will hold a financial results teleconference to discuss the results for Q4 and full-year FY 2015 on Thurs., April 23, 2015 at 8:30 a.m. Eastern Standard Time and 14:30 Central European Time. A live webcast of the call will be 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), other restructuring-related charges, 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 our 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 a GAAP amount has been provided for FY 2016.
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).
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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 momentum, transformation, growth, value and cost structure, exiting our OEM business, reorganizing Lifesize, product, overhead and infrastructure cost reductions, restructuring, the expected cost of and use of savings from restructuring, our ability to offset currency exchange rate fluctuations, investment in growth, and Fiscal Year 2016 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 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 operating segments, or significant fluctuations in exchange rates; 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, including our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2014 and our Annual Report on Form 10-K for the fiscal year ended March 31, 2014, 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, 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.