Logitech International S.A 10-Q for FY2022 Q2

Logitech International S.A. (LOGI)

10-Q 2021-10-28 For: 2021-09-30

Added on April 12, 2026

About this 10-Q

Logitech International S.A filed this 10-Q on October 28, 2021, covering the quarter ended September 30, 2021 (FY2022 Q2).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.31B; up 3.9% from $1.26B a year earlier
Diluted EPS: $0.81; down 48.1% from $1.56 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)	5
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended September 30, 2021 and 2020	5
	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September 30, 2021 and 2020	6
	Condensed Consolidated Balance Sheets as of September 30, 2021 and March 31, 2021	7
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2021 and 2020	8
	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Six Months Ended September 30, 2021 and 2020	9
	Notes to the Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	41
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	42
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 September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Net sales	$	1,306,267	$	1,257,158	$	2,618,325	$	2,049,052
Cost of goods sold	760,268		684,599		1,499,334		1,167,237
Amortization of intangible assets	3,836		2,836		7,902		6,359
Gross profit	542,163		569,723		1,111,089		875,456

Operating expenses:
Marketing and selling	256,627		158,797		508,941		292,035
Research and development	68,661		53,379		137,907		103,104
General and administrative	33,271		31,664		73,813		60,735
Amortization of intangible assets and acquisition-related costs	5,107		4,331		10,324		8,940
Change in fair value of contingent consideration for business acquisition	(925)		—		(2,399)		5,716
Restructuring charges (credits), net	11		(1)		11		(54)
Total operating expenses	362,752		248,170		728,597		470,476

Operating income	179,411		321,553		382,492		404,980
Interest income	201		513		517		1,133
Other income (expense), net	(6,703)		1,149		1,732		3,178
Income before income taxes	172,909		323,215		384,741		409,291
Provision for income taxes	33,453		56,301		58,444		70,304
Net income	$	139,456	$	266,914	$	326,297	$	338,987

Net income per share:
Basic	$	0.83	$	1.58	$	1.94	$	2.02
Diluted	$	0.81	$	1.56	$	1.90	$	1.99

Weighted average shares used to compute net income per share:
Basic	168,389		168,645		168,380		168,140
Diluted	171,343		171,382		171,682		170,766


	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Net income	$	139,456	$	266,914	$	326,297	$	338,987
Other comprehensive income (loss):
Currency translation gain (loss), net of taxes	(4,731)		3,205		(3,927)		4,444
Reclassification of cumulative translation adjustment to other income (expense), net	5		(1,738)		1,051		(1,738)
Defined benefit plans:
Net gain (loss) and prior service costs, net of taxes	95		(434)		(405)		544
Amortization included in other income (expense), net	212		176		423		345
Hedging gain (loss):
Deferred hedging gain (loss), net of taxes	2,132		(1,059)		2,662		(3,426)
Reclassification of net hedging impact into cost of goods sold	(1,314)		1,969		(1,908)		1,639
Total other comprehensive income (loss)	(3,601)		2,119		(2,104)		1,808
Total comprehensive income	$	135,855	$	269,033	$	324,193	$	340,795


	September 30, 2021		March 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	1,137,296	$	1,750,327
Accounts receivable, net	728,074		612,225
Inventories	827,710		661,116
Other current assets	166,731		135,650
Total current assets	2,859,811		3,159,318
Non-current assets:
Property, plant and equipment, net	111,625		114,060
Goodwill	449,357		429,604
Other intangible assets, net	103,501		115,148
Other assets	331,870		324,248
Total assets	$	3,856,164	$	4,142,378
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	660,720	$	823,233
Accrued and other current liabilities	709,878		858,617
Total current liabilities	1,370,598		1,681,850
Non-current liabilities:
Income taxes payable	67,651		59,237
Other non-current liabilities	155,232		139,502
Total liabilities	1,593,481		1,880,589
Commitments and contingencies (Note 10)
Shareholders’ equity:
Registered shares, CHF 0.25 par value:	30,148		30,148
Issued shares — 173,106 at September 30 and March 31, 2021
Additional shares that may be issued out of conditional capitals — 50,000 at September 30 and March 31, 2021
Additional shares that may be issued out of authorized capital — 17,311 at September 30 and March 31, 2021
Additional paid-in capital	99,434		129,519
Shares in treasury, at cost — 5,331 at September 30, 2021 and 4,799 at March 31, 2021	(413,345)		(279,541)
Retained earnings	2,657,465		2,490,578
Accumulated other comprehensive loss	(111,019)		(108,915)
Total shareholders’ equity	2,262,683		2,261,789
Total liabilities and shareholders’ equity	$	3,856,164	$	4,142,378


	September 30, 2021		March 31, 2021
Accounts receivable, net:
Accounts receivable	$	1,034,726	$	867,868
Allowance for doubtful accounts	(249)		(1,161)
Allowance for sales returns	(10,857)		(14,438)
Allowance for cooperative marketing arrangements	(64,216)		(43,276)
Allowance for customer incentive programs	(94,413)		(76,200)
Allowance for pricing programs	(136,917)		(120,568)
	$	728,074	$	612,225
Inventories:
Raw materials	$	205,991	$	146,886
Finished goods	621,719		514,230
	$	827,710	$	661,116
Other current assets:
Value-added tax receivables	$	79,381	$	67,710
Prepaid expenses and other assets	87,350		67,940
	$	166,731	$	135,650
Property, plant and equipment, net:
Property, plant and equipment at cost	$	454,417	$	417,520
Accumulated depreciation and amortization	(342,792)		(303,460)
	$	111,625	$	114,060
Other assets:
Deferred tax assets	$	204,655	$	210,888
Right-of-use assets	41,234		31,169
Trading investments for deferred compensation plan	28,375		24,809
Investments in privately held companies	42,749		43,402
Other assets	14,857		13,980
	$	331,870	$	324,248


	September 30, 2021		March 31, 2021
Accrued and other current liabilities:
Accrued customer marketing, pricing and incentive programs	$	208,207	$	185,394
Accrued personnel expenses	113,818		173,360
VAT payable	61,441		50,620
Accrued sales return liability	45,064		43,178
Accrued payables - non-inventory	36,736		52,392
Warranty accrual	34,646		33,228
Income taxes payable	11,954		131,408

Operating lease liability	13,754		13,101

Contingent consideration	10,570		6,967
Other current liabilities	173,688		168,969
	$	709,878	$	858,617
Other non-current liabilities:
Employee benefit plan obligations	$	73,534	$	72,321
Obligation for deferred compensation plan	28,375		24,809
Operating lease liability	29,940		21,319
Warranty accrual	14,527		15,604
Contingent consideration	3,971		—
Deferred tax liability	1,679		1,679
Other non-current liabilities	3,206		3,770
	$	155,232	$	139,502


	September 30, 2021						March 31, 2021
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	402,219	$	—	$	—	$	669,759	$	—	$	—

Trading investments for deferred compensation plan included in other assets:
Cash	$	63	$	—	$	—	$	31	$	—	$	—
Common stock	1,850		—		—		1,569		—		—
Money market funds	7,661		—		—		6,734		—		—
Mutual funds	18,801		—		—		16,475		—		—
Total of trading investments for deferred compensation plan	$	28,375	$	—	$	—	$	24,809	$	—	$	—

Currency exchange derivative assets included in other current assets	$	—	$	2,153	$	—	$	—	$	5,452	$	—

Liabilities:
Contingent consideration for business acquisition included in accrued and other current liabilities	$	—	$	—	$	10,032	$	—	$	—	$	6,430
Contingent consideration for business acquisition included in other non-current liabilities	$	—	$	—	$	3,971	$	—	$	—	$	—
Currency exchange derivative liabilities included in accrued and other current liabilities	$	—	$	109	$	—	$	—	$	100	$	—


	Three Months Ended September 30,
	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
	2021		2020		2021		2020

Cash flow hedges	$	2,132	$	(1,059)	$	(1,314)	$	1,969


	Six Months Ended September 30,
	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
	2021		2020		2021		2020

Cash flow hedges	$	2,662	$	(3,426)	$	(1,908)	$	1,639


As of March 31, 2021	$	429,604

Acquisition	20,721
Effects of foreign currency translation	(968)
As of September 30, 2021	$	449,357


	September 30, 2021						March 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademark and trade names	$	46,170	$	(28,347)	$	17,823	$	46,070	$	(25,153)	$	20,917
Developed technology	140,407		(98,352)		42,055		134,406		(90,450)		43,956
Customer contracts/relationships	91,017		(50,649)		40,368		91,010		(44,261)		46,749
In-process R&D	3,526		—		3,526		3,526		—		3,526
Effects of foreign currency translation	(287)		16		(271)		—		—		—
Total	$	280,833	$	(177,332)	$	103,501	$	275,012	$	(159,864)	$	115,148


	Accumulated Other Comprehensive Income (Loss)
	Cumulative Translation Adjustment		Defined Benefit Plan		Deferred Hedging Losses		Total
March 31, 2021	$	(89,461)	$	(23,200)	$	3,746	$	(108,915)
Other comprehensive income (loss)	(2,876)		18		754		(2,104)
September 30, 2021	$	(92,337)	$	(23,182)	$	4,500	$	(111,019)


	September 30, 2021		March 31, 2021
Americas	$	19,235	$	20,810
EMEA	11,565		8,019
Asia Pacific	80,825		85,231
Total property, plant and equipment, net	$	111,625	$	114,060


	Sales Growth Rate				Constant Dollar Sales Growth Rate
	Three Months Ended September 30, 2021		Six Months Ended September 30, 2021		Three Months Ended September 30, 2021		Six Months Ended September 30, 2021
Americas	—	%	28	%	(1)	%	27	%
EMEA	3	%	26	%	—	%	21	%
Asia Pacific	12	%	28	%	9	%	24	%


	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Beginning of the period	$	49,093	$	39,450	$	48,832	$	40,039

Provision	8,095		9,494		16,541		14,883
Settlements	(7,848)		(7,541)		(16,163)		(13,702)
Effects of foreign currency translation	(167)		379		(37)		562
End of the period	$	49,173	$	41,782	$	49,173	$	41,782


	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Pointing Devices	$	189,014	$	169,121	$	371,892	$	289,590
Keyboards & Combos	236,272		201,617		454,629		346,977
PC Webcams	94,471		102,469		204,389		163,320
Tablet & Other Accessories	80,801		83,086		160,073		129,134
Gaming (1)	330,777		297,711		666,174		479,614
Video Collaboration	231,653		236,704		466,538		366,778
Mobile Speakers	39,492		43,581		67,976		72,590
Audio & Wearables	98,078		114,275		214,685		185,640
Smart Home	5,649		8,573		11,821		15,383
Other (2)	60		21		148		26
Total Sales	$	1,306,267	$	1,257,158	$	2,618,325	$	2,049,052


	Three Months Ended September 30,						Six Months Ended September 30,
	2021		2020		Change		2021		2020		Change
Pointing Devices	$	189,014	$	169,121	12	%	$	371,892	$	289,590	28	%
Keyboards & Combos	236,272		201,617		17		454,629		346,977		31
PC Webcams	94,471		102,469		(8)		204,389		163,320		25
Tablet & Other Accessories	80,801		83,086		(3)		160,073		129,134		24
Gaming (1)	330,777		297,711		11		666,174		479,614		39
Video Collaboration	231,653		236,704		(2)		466,538		366,778		27
Mobile Speakers	39,492		43,581		(9)		67,976		72,590		(6)
Audio & Wearables	98,078		114,275		(14)		214,685		185,640		16
Smart Home	5,649		8,573		(34)		11,821		15,383		(23)
Other (2)	60		21		186		148		26		469


Total Sales	$	1,306,267	$	1,257,158	4	%	$	2,618,325	$	2,049,052	28	%


	Three Months Ended September 30,
	2021	2020
Days sales in accounts receivable (“DSO”) (Days) (1)	50	54
Days accounts payable outstanding (“DPO”) (Days) (2)	78	87
Inventory turnover (“ITO”) (x)(3)	3.7	7.0


	As of September 30,
	2021		2020
Accounts receivable, net	$	728,074	$	750,749
Accounts payable	$	660,720	$	662,873
Inventories	$	827,710	$	394,708


Share Repurchase Program	Shares Approved	Approved Amounts (1)
May 2020	17,311	$	1,000,000


	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 September 30, 2021		CHF (LOGN)	USD (LOGI)
Month 1

July 3, 2021 to July 30, 2021	180	101.70	$	—	$	760,385

Month 2
July 31, 2021 to August 27, 2021
SIX	253	97.70			733,376
Nasdaq	240		107.79		707,519
Month 3
August 28, 2021 to October 1, 2021
SIX	415	89.29			661,023
Nasdaq	63		101.81
	1,151	95.29	$	103.70	$	661,023


Exhibit No.		Description

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.

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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.


October 28, 2021									/s/ Bracken Darrell
Date									Bracken Darrell
									President and Chief Executive Officer



October 28, 2021									/s/ Nate Olmstead
Date									Nate Olmstead
									Chief Financial Officer