Logitech International S A : Q2 2022 Press Release

Editorial Contacts:

Nicole Noutsios, Investor Relations - [e-mail]

Nicole Kenyon, Head of Global Corporate & Employee Communications - USA [phone] Ben Starkie, Corporate Communications - Europe [phone]

Logitech Delivers Record Q2 Sales

Company Confirms FY 2022 Outlook

LAUSANNE, Switzerland, Oct. 26, 2021 and NEWARK, Calif., Oct. 25, 2021 - SIX Swiss Exchange Ad hoc announcement pursuant to Art. 53 LR -

Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the second quarter of Fiscal Year 2022.

• Q2 sales were $1.31 billion, up 4 percent in US dollars and 2 percent in constant currency, compared to Q2 of the prior year.
• Q2 GAAP operating income declined 44 percent to $179 million, compared to $322 million in the same quarter a year ago. Q2 GAAP earnings per share (EPS) declined 48 percent to $0.81, compared to $1.56 in the same quarter a year ago.
• Q2 non-GAAP operating income declined 40 percent to $211 million, compared to $354 million in the same quarter a year ago. Q2 non-GAAP EPS declined 44 percent to $1.05, compared to $1.87 in the same quarter a year ago.

"In Q2 we delivered record sales which beat last year's exceptional sales levels, growing 4% in the quarter and 82% compared to two years ago. We also grew market share in the majority of our key product categories," said Bracken Darrell, Logitech president and chief executive officer. "We are confirming our full year outlook, despite unprecedented supply chain industry challenges. I am excited about the long-term growth potential of Logitech."

Outlook

Logitech confirmed its Fiscal Year 2022 outlook of flat sales growth in constant currency, plus or minus five percent, and $800 million to $850 million in non-GAAP operating income.

Prepared Remarks Available Online

Logitech has made its prepared written remarks for the financial results videoconference available online on the Logitech corporate website at http://ir.logitech.com.

Financial Results Videoconference and Webcast

Logitech will hold a financial results videoconference to discuss the results for Q2 Fiscal Year 2022 on Tuesday, October 26, 2021 at 8:30 a.m. Eastern Daylight Time and 2:30 p.m. Central European Summer Time. A livestream of the event will be available on the Logitech corporate website at http://ir.logitech.com.

Use of Non-GAAP Financial Information and Constant Currency

To facilitate comparisons to Logitech's historical results, Logitech has included non-GAAP adjusted measures, which exclude share-based compensation expense, amortization of intangible assets, acquisition-related costs, change in fair value of contingent consideration for business acquisition, restructuring charges (credits), loss (gain) on investments, non-GAAP income tax adjustment, 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, used together with the GAAP financial information, will help investors to evaluate its current period performance and trends in its business. With respect to the Company's 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 the GAAP amounts has been provided for the Fiscal Year 2022 outlook.

Public Dissemination of Certain Information

Logitech webcasts its earnings calls, and certain events Logitech participates in or hosts, with members of the investment community on its investor relations website at https://ir.logitech.com. Additionally, Logitech provides notifications of news or announcements regarding its operations and financial performance, including its filings with the Securities and Exchange Commission (SEC), investor events, and press and earnings releases as part of its investor relations website. Logitech intends to use its investor relations website as means of disclosing material

nonpublic information and for complying with its disclosure obligations under Regulation FD. Logitech's corporate governance information also is available on its investor relations website.

About Logitech

Logitech helps all people pursue their passions by designing experiences so everyone can create, achieve, and enjoy more. Logitech designs and creates products that bring people together through computing, gaming, video, streaming and creating, and music. Brands of Logitech include Logitech,Logitech G,ASTRO Gaming,Streamlabs,Blue Microphones,Ultimate Earsand Jaybird. Founded in 1981, and headquartered in Lausanne, Switzerland, Logitech International is a Swiss public company listed on the SIX Swiss Exchange (LOGN) and on the Nasdaq Global Select Market (LOGI). Find Logitech at www.logitech.com, the company blogor @Logitech.

# # #

This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding: our preliminary financial results for the three and six months ended September 30, 2021, long-term growth trends, and outlook for Fiscal Year 2022 operating income and sales growth. The forward-looking statements in this press 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; 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 or our growth opportunities are more limited than we expect; the effect of demand variability, supply shortages and other supply chain challenges; 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 we are not able to maintain and enhance our brands; if our products and marketing strategies fail to separate our products from competitors' products; the COVID- 19 pandemic and its potential impact; if we do not efficiently manage our spending; if there is a deterioration of business and economic conditions in one or more of our sales regions or product categories, or significant fluctuations in exchange rates; changes in trade regulations, policies and agreements and the imposition of tariffs that affect our products or operations and our ability to mitigate; risks associated with acquisitions; and 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 SEC, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2021, our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2021, and our subsequent reports filed with the SEC, 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 and other Logitech marks are trademarks or registered trademarks of Logitech Europe S.A. and/or its affiliates in the U.S. 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 website at www.logitech.com.

(LOGIIR)

LOGITECH INTERNATIONAL S.A.

PRELIMINARY RESULTS*

(In thousands, except per share amounts) - unaudited

			Three Months Ended			Six Months Ended
			September 30,			September 30,
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS		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			(925)					-				(2,399)				5,716
acquisition
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

LOGITECH INTERNATIONAL S.A.

PRELIMINARY RESULTS*

(In thousands) - unaudited

				September 30,			March 31,
	CONDENSED CONSOLIDATED BALANCE SHEETS			2021				2021
	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
	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
	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,				(413,345)				(279,541)
	2021
	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