logi-20230630

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to

Commission File Number: 0-29174

LOGITECH INTERNATIONAL S.A.

(Exact name of registrant as specified in its charter)


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

Logitech International S.A.

EPFL - Quartier de l'Innovation

Daniel Borel Innovation Center

1015 Lausanne, Switzerland

c/o Logitech Inc.

3930 North First Street

San Jose, California 95134

(Address of principal executive offices and zip code)

(510) 795-8500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data file required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Smaller reporting company

☐

Accelerated filer

☐

Emerging Growth Company

☐

Non-accelerated filer

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ý

As of July 13, 2023, there were 158,146,980 shares of the Registrant’s share capital outstanding.

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		Page

Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 202 3 and 20 22	3
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended June 30, 2023 and 202 2	4
	Condensed Consolidated Balance Sheets as of June 30, 2023 and March 31 , 202 3	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2023 and 202 2	6
	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended June 30, 2023 and 202 2	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	35
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibit Index	40
Signatures

In this document, unless otherwise indicated, references to the “Company,” “Logitech,” "we," "our," and "us" are to Logitech International S.A. and its consolidated subsidiaries. Unless otherwise specified, all references to U.S. Dollar, Dollar or $ are to the United States Dollar, the legal currency of the United States of America. All references to CHF are to the Swiss Franc, the legal currency of Switzerland.

Logitech, the Logitech logo, and the Logitech products referred to herein are either the trademarks or the registered trademarks of Logitech. All other trademarks are the property of their respective owners.

Our fiscal year ends on March 31. Interim quarters are generally thirteen-week periods, each ending on a Friday of each quarter. The first quarter of fiscal year 2024 ended on June 30, 2023. The same quarter in the prior fiscal year ended on July 1, 2022. For purposes of presentation, we have indicated our quarterly periods end on the last day of the calendar quarter.

The term “sales” means net sales, except as otherwise specified.

We make available, free of charge on our website, access to our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we file or furnish them electronically with the Securities and Exchange Commission ("SEC").

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Recordings of our earnings videoconferences and certain events we participate in or host, with members of the investment community are posted on our investor relations website at https://ir.logitech.com. Additionally, we provide notifications of news or announcements regarding our operations and financial performance, including SEC filings, investor events, and press and earnings releases as part of our investor relations website. We intend to use our investor relations website as means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD. Our corporate governance information also is available on our investor relations website.

All references to our websites are intended to be inactive textual references only, and the contents of such websites do not constitute a part of and are not intended to be incorporated into this Quarterly Report on Form 10-Q.

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)


	Three months ended June 30,
		2023		2022
Net sales		$	974,499	$	1,159,865
Cost of goods sold		595,712		697,220
Amortization of intangible assets		3,145		3,042
Gross profit		375,642		459,603

Operating expenses:
Marketing and selling		179,185		229,378
Research and development		70,559		75,517
General and administrative		41,297		35,860
Amortization of intangible assets and acquisition-related costs		2,685		3,369


Restructuring charges, net		3,511		—
Total operating expenses		297,237		344,124

Operating income		78,405		115,479
Interest income		9,826		1,449
Other income (expense), net		(12,972)		5,624
Income before income taxes		75,259		122,552
Provision for income taxes		12,532		21,716
Net income		$	62,727	$	100,836

Net income per share:
Basic		$	0.39	$	0.61
Diluted		$	0.39	$	0.61

Weighted average shares used to compute net income per share:
Basic		158,859		164,679
Diluted		160,155		166,406

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(unaudited)


	Three months ended June 30,
		2023		2022
Net income		$	62,727	$	100,836
Other comprehensive income (loss):
Currency translation loss:
Currency translation loss, net of taxes		(1,529)		(21,220)

Defined benefit plans:
Net gain and prior service costs, net of taxes		—		84
Reclassification of amortization included in other income (expense), net		(4)		(113)
Hedging gain (loss):
Deferred hedging gain (loss), net of taxes		(704)		6,629
Reclassification of hedging gain (loss) included in cost of goods sold		2,986		(2,091)
Total other comprehensive income (loss)		749		(16,711)
Total comprehensive income		$	63,476	$	84,125

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(unaudited)


	June 30, 2023		March 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	1,251,086	$	1,149,023
Accounts receivable, net	562,602		630,382
Inventories	572,344		682,893
Other current assets	111,572		142,876
Total current assets	2,497,604		2,605,174
Non-current assets:
Property, plant and equipment, net	126,965		121,503
Goodwill	453,922		454,610
Other intangible assets, net	57,230		63,173
Other assets	304,160		316,293
Total assets	$	3,439,881	$	3,560,753
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	386,599	$	406,968
Accrued and other current liabilities	570,544		643,139
Total current liabilities	957,143		1,050,107
Non-current liabilities:
Income taxes payable	107,925		106,391
Other non-current liabilities	148,738		146,695
Total liabilities	1,213,806		1,303,193
Commitments and contingencies (Note 10)
Shareholders’ equity:
Registered shares, CHF 0.25 par value:	30,148		30,148
Issued shares — 173,106 at June 30, 2023 and March 31, 2023
Additional shares that may be issued out of conditional capital — 50,000 at June 30, 2023 and March 31, 2023
Additional shares that may be issued out of authorized capital — 17,311 at June 30, 2023 and March 31, 2023
Additional paid-in capital	49,734		127,380
Shares in treasury, at cost — 14,484 at June 30, 2023 and 13,763 at March 31, 2023	(994,581)		(977,266)
Retained earnings	3,240,302		3,177,575
Accumulated other comprehensive loss	(99,528)		(100,277)
Total shareholders’ equity	2,226,075		2,257,560
Total liabilities and shareholders’ equity	$	3,439,881	$	3,560,753

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)


	Three months ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	62,727	$	100,836
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	17,498		18,626
Amortization of intangible assets	5,827		6,229

Loss (gain) on investments	11,823		(11,357)

Share-based compensation expense	21,511		23,690
Deferred income taxes	2,962		265

Other	24		(124)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, net	65,390		(44,572)
Inventories	110,440		(324)
Other assets	34,342		4,932
Accounts payable	(18,420)		(70,034)
Accrued and other liabilities	(74,329)		(63,835)
Net cash provided by (used in) operating activities	239,795		(35,668)
Cash flows from investing activities:
Purchases of property, plant and equipment

SEC Form 10-Q filed by Logitech International S.A.