Logitech International S.A 10-Q for FY2021 Q3

Logitech International S.A. (LOGI)

10-Q 2021-01-21 For: 2020-12-31

Added on April 12, 2026

About this 10-Q

Logitech International S.A filed this 10-Q on January 21, 2021, covering the quarter ended December 31, 2020 (FY2021 Q3).

Headline figures

Quarter ended December 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.67B; up 84.7% from $902.69M a year earlier
Diluted EPS: $2.22; up 221.7% from $0.69 a year earlier

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Canton of Vaud,	Switzerland	None
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Registered Shares	LOGN	SIX Swiss Exchange
Registered Shares	LOGI	Nasdaq Global Select Market


		Page

Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2020 and 2019	4
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended December 31, 2020 and 2019	5
	Condensed Consolidated Balance Sheets as of December 31, 2020 and March 31, 2020	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2020 and 2019	7
	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended December 31, 2020 and 2019	8
	Notes to the Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 3.	Defaults Upon Senior Securities	61
Item 4.	Mine Safety Disclosures	61
Item 5.	Other Information	61
Item 6.	Exhibit Index	62
Signatures


	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Net sales	$	1,667,302	$	902,687	$	3,716,354	$	2,266,603
Cost of goods sold	914,851		564,283		2,082,088		1,410,605
Amortization of intangible assets	3,441		3,951		9,800		10,493
Gross profit	749,010		334,453		1,624,466		845,505

Operating expenses:
Marketing and selling	204,485		134,950		496,520		392,138
Research and development	53,910		43,292		157,014		127,499
General and administrative	37,606		22,344		98,341		68,551
Amortization of intangible assets and acquisition-related costs	4,946		5,084		13,886		12,898
Change in fair value of contingent consideration for business acquisition	—		—		5,716		—
Restructuring charges (credits), net	—		(45)		(54)		69
Total operating expenses	300,947		205,625		771,423		601,155

Operating income	448,063		128,828		853,043		244,350
Interest income	311		2,063		1,444		7,006
Other income, net	6,483		1,101		9,661		2,852
Income before income taxes	454,857		131,992		864,148		254,208
Provision for income taxes	72,334		14,467		142,638		18,405
Net income	$	382,523	$	117,525	$	721,510	$	235,803

Net income per share:
Basic	$	2.26	$	0.70	$	4.28	$	1.41
Diluted	$	2.22	$	0.69	$	4.21	$	1.39

Weighted average shares used to compute net income per share:
Basic	169,050		167,063		168,448		166,678
Diluted	172,587		169,685		171,378		169,173


	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Net income	$	382,523	$	117,525	$	721,510	$	235,803
Other comprehensive income (loss):
Currency translation gain (loss), net of taxes	19,500		1,736		23,944		(2,639)
Reclassification of currency translation loss included in other income, net	—		—		(1,738)		—
Defined benefit plans:
Net loss and prior service costs, net of taxes	(863)		(231)		(319)		(274)
Amortization included in other income, net	178		53		523		160
Hedging gain (loss):
Deferred hedging gain (loss), net of taxes	(6,326)		(1,381)		(9,752)		56
Reclassification of hedging loss included in cost of goods sold	3,446		(739)		5,085		(1,097)
Total other comprehensive income (loss)	15,935		(562)		17,743		(3,794)
Total comprehensive income	$	398,458	$	116,963	$	739,253	$	232,009


	December 31, 2020		March 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	1,388,743	$	715,566
Accounts receivable, net	894,937		394,743
Inventories	476,802		229,249
Other current assets	117,741		74,920
Total current assets	2,878,223		1,414,478
Non-current assets:
Property, plant and equipment, net	96,683		76,119
Goodwill	400,993		400,917
Other intangible assets, net	103,314		126,941
Other assets	333,733		345,019
Total assets	$	3,812,946	$	2,363,474
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	811,786	$	259,120
Accrued and other current liabilities	704,573		455,024
Total current liabilities	1,516,359		714,144
Non-current liabilities:
Income taxes payable	60,799		40,788
Other non-current liabilities	134,021		119,274
Total liabilities	1,711,179		874,206
Commitments and contingencies (Note 10)
Shareholders’ equity:
Registered shares, CHF 0.25 par value:	30,148		30,148
Issued shares — 173,106 at December 31 and March 31, 2020
Additional shares that may be issued out of conditional capitals — 50,000 at December 31 and March 31, 2020
Additional shares that may be issued out of authorized capital — 17,311 at December 31 and 34,621 at March 31, 2020
Additional paid-in capital	108,140		75,097
Shares in treasury, at cost — 4,243 at December 31, 2020 and 6,210 at March 31, 2020	(198,435)		(185,896)
Retained earnings	2,264,831		1,690,579
Accumulated other comprehensive loss	(102,917)		(120,660)
Total shareholders’ equity	2,101,767		1,489,268
Total liabilities and shareholders’ equity	$	3,812,946	$	2,363,474


	December 31, 2020		March 31, 2020
Accounts receivable, net:
Accounts receivable	$	1,196,050	$	597,939
Allowance for doubtful accounts	(1,328)		(1,894)
Allowance for sales returns	(14,665)		(6,599)
Allowance for cooperative marketing arrangements	(53,387)		(38,794)
Allowance for customer incentive programs	(91,863)		(55,741)
Allowance for pricing programs	(139,870)		(100,168)
	$	894,937	$	394,743
Inventories:
Raw materials	$	94,748	$	56,052
Finished goods	382,054		173,197
	$	476,802	$	229,249
Other current assets:
Value-added tax receivables	$	60,746	$	33,616
Prepaid expenses and other assets	56,995		41,304
	$	117,741	$	74,920
Property, plant and equipment, net:
Property, plant and equipment at cost	$	392,478	$	346,506
Accumulated depreciation and amortization	(295,795)		(270,387)
	$	96,683	$	76,119
Other assets:
Deferred tax assets	$	219,145	$	240,528
Right-of-use assets	31,532		25,557
Trading investments for deferred compensation plan	24,056		20,085
Investments in privately held companies	44,634		45,949
Other assets	14,366		12,900
	$	333,733	$	345,019


	December 31, 2020		March 31, 2020
Accrued and other current liabilities:
Accrued personnel expenses	$	138,735	$	104,423
Accrued sales return liability	33,540		30,267
Accrued customer marketing, pricing and incentive programs	163,335		130,220
Operating lease liability	12,620		10,945
Accrued freight and duty	43,477		13,284
Warranty accrual	32,128		25,905

Income taxes payable	81,547		8,823
Contingent consideration	537		23,284
Other current liabilities	198,654		107,873
	$	704,573	$	455,024
Other non-current liabilities:
Warranty accrual	$	15,464	$	14,134
Obligation for deferred compensation plan	24,056		20,085
Employee benefit plan obligations	66,420		61,303
Operating lease liability	22,537		19,536
Deferred tax liability	1,931		1,931
Other non-current liabilities	3,613		2,285
	$	134,021	$	119,274


	December 31, 2020						March 31, 2020
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	465,838	$	—	$	—	$	564,952	$	—	$	—

Trading investments for deferred compensation plan included in other assets:
Cash	$	75	$	—	$	—	$	846	$	—	$	—
Common stock	1,544		—		—		—		—		—
Money market funds	7,147		—		—		7,147		—		—
Mutual funds	15,290		—		—		12,092		—		—
Total of trading investments for deferred compensation plan	$	24,056	$	—	$	—	$	20,085	$	—	$	—

Currency exchange derivative assets included in other current assets	$	—	$	—	$	—	$	—	$	129	$	—

Liabilities:

Contingent consideration for business acquisition included in accrued and other current liabilities	$	—	$	—	$	—	$	—	$	—	$	23,284
Currency exchange derivative liabilities included in accrued and other current liabilities	$	—	$	4,523	$	—	$	—	$	719	$	—


	Nine Months Ended December 31, 2020
Beginning of the period	$	23,284
Change in fair value of contingent consideration	5,716
Settlement of contingent consideration	(28,463)
End of the period (1)	$	537


	Three Months Ended December 31,
	Amount of Gain (Loss) Deferred as a Component of Accumulated Other Comprehensive Loss				Amount of Loss (Gain) Reclassified from Accumulated Other Comprehensive Loss to Costs of Goods Sold
	2020		2019		2020		2019

Cash flow hedges	$	(6,326)	$	(1,381)	$	3,446	$	(739)


As of March 31, 2020	$	400,917

Currency translation	76
As of December 31, 2020	$	400,993


	December 31, 2020						March 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademark and trade names	$	45,570	$	(23,615)	$	21,955	$	45,570	$	(19,061)	$	26,509
Developed technology	118,807		(86,922)		31,885		118,807		(77,126)		41,681
Customer contracts/relationships	90,610		(41,136)		49,474		90,610		(31,859)		58,751
Total	$	254,987	$	(151,673)	$	103,314	$	254,987	$	(128,046)	$	126,941


	Accumulated Other Comprehensive Income (Loss)
	Cumulative Translation Adjustment		Defined Benefit Plan		Deferred Hedging Losses		Total
March 31, 2020	$	(100,418)	$	(20,016)	$	(226)	$	(120,660)
Other comprehensive income (loss)	22,206		204		(4,667)		17,743
December 31, 2020	$	(78,212)	$	(19,812)	$	(4,893)	$	(102,917)


	December 31, 2020		March 31, 2020
Americas	$	21,859	$	26,636
EMEA	6,998		5,052
Asia Pacific	67,826		44,431
Total property, plant and equipment, net	$	96,683	$	76,119


	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Pointing Devices	$	213,638	$	154,540	$	503,228	$	409,293
Keyboards & Combos	218,269		156,333		565,246		424,061
PC Webcams	131,700		32,165		295,020		89,041
Tablet & Other Accessories	138,052		31,256		267,186		103,442
Gaming (1)	436,426		245,736		916,040		541,265
Video Collaboration	292,500		91,964		659,278		254,941
Mobile Speakers	72,566		92,969		145,156		200,617
Audio & Wearables	152,952		81,934		338,592		208,576
Smart Home	10,593		15,790		25,976		35,088
Other (2)	606		—		632		279
Total sales	$	1,667,302	$	902,687	$	3,716,354	$	2,266,603


	Three Months Ended December 31,						Nine Months Ended December 31,
	2020		2019		Change		2020		2019		Change
Pointing Devices	$	213,638	$	154,540	38	%	$	503,228	$	409,293	23	%
Keyboards & Combos	218,269		156,333		40		565,246		424,061		33
PC Webcams	131,700		32,165		309		295,020		89,041		231
Tablet & Other Accessories	138,052		31,256		342		267,186		103,442		158
Gaming (1)	436,426		245,736		78		916,040		541,265		69
Video Collaboration	292,500		91,964		218		659,278		254,941		159
Mobile Speakers	72,566		92,969		(22)		145,156		200,617		(28)
Audio & Wearables	152,952		81,934		87		338,592		208,576		62
Smart Home	10,593		15,790		(33)		25,976		35,088		(26)
Other (2)	606		—		—		632		279		127


Total sales	$	1,667,302	$	902,687	85	%	$	3,716,354	$	2,266,603	64	%


	Three Months Ended December 31,
	2020	2019
Days sales in accounts receivable (“DSO”) (Days) (1)	48	53
Days accounts payable outstanding (“DPO”) (Days) (2)	80	70
Inventory turnover (“ITO”) (x)(3)	7.7	7.4


Share Buyback Program	Shares Approved	Approved Amounts

May 2020	17,311	$	250,000


	Sales Growth Rate				Constant Dollar Sales Growth Rate
	Three Months Ended December 31, 2020		Nine Months Ended December 31, 2020		Three Months Ended December 31, 2020		Nine Months Ended December 31, 2020
Americas	85	%	65	%	87	%	67	%
EMEA	77	%	59	%	67	%	55	%
Asia Pacific	95	%	68	%	89	%	66	%


	As of December 31,
	2020		2019
Accounts receivable, net	$	894,937	$	531,309
Accounts payable	$	811,786	$	439,035
Inventories	$	476,802	$	307,494


	Total Number of Shares Repurchased	Weighted Average Price Paid Per Share				Remaining Amount that May Yet Be Repurchased under the Program
During the three months ended December 31, 2020		CHF (LOGN)		USD (LOGI)
Month 1
September 26, 2020 to October 23, 2020	—	$	—	$	—	$	227,635
Month 2
October 24, 2020 to November 20, 2020	—	—		—		227,635
Month 3
November 21, 2020 to December 25, 2020
Nasdaq	110			84.99		177,634
SIX	493	75.10
	603	$	—	$	—	$	177,634


Exhibit No.		Description

3.1		Organization al Regulations of Logitech International S.A., as amended as of December 2, 2020

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1	*	Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Definition Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


									LOGITECH INTERNATIONAL S.A.


January 21, 2021									/s/ Bracken Darrell
Date									Bracken Darrell
									President and
									Chief Executive Officer


January 21, 2021									/s/ Nate Olmstead
Date									Nate Olmstead
									Chief Financial Officer