Logitech Q1 '09: Harmony Remotes Drive Growth

July 23, 2008

Logitech reported results for the first quarter of Fiscal Year 2009. Sales for Q1 were $509 million, up 18 percent from $430 million in the same quarter last year. Operating income was $30 million, up 24 percent from $24 million for the same quarter a year ago. Net income was $29 million ($0.16 per share) compared to $26 million ($0.14 per share) in Q1 of FY 2008. Gross margin was 34.1 percent, compared to 33.7 percent in Q1 of FY 2008. Cash flow from operations was $44 million, up by more than three times compared to Q1 of FY 2008.

Logitech was expected to post a 27 percent jump in net profit to $33 million.

Logitech’s retail sales for Q1 grew by 19 percent year over year, increasing by 20 percent in EMEA, 10 percent in the Americas and 41 percent in Asia. Retail sales growth was fueled by strong performance of Harmony remotes (up 74%) and pointing devices (up 34%). Performance of the retail video business continued to rebound with sales up 21 percent. OEM sales grew by 15 percent, driven primarily by strong demand for microphones for console gaming.

“We’re very pleased that Logitech’s Fiscal 2009 is off to a solid start in sales and profitability,” said Gerald P. Quindlen, president and chief executive officer. “With strong demand for our products, we delivered double digit revenue growth across all regions and accelerated momentum in the video category. As we proceed into Q2, we look forward to continued market momentum driven by new products that will be introduced over the next few months.”

The Company confirmed its financial targets of 15 percent growth in both sales and operating income for Fiscal Year 2009, ending March 31, 2009. FY 2009 gross margin is expected to be above the Company’s long-term target range of 32-34 percent. Logitech expects its effective tax rate for the year to be approximately 12 percent.

Gross margin in 2009 was expected to be above the company's long-term target range of 32-34 percent.