Financial: Logitech Posts Record Q3 Revenue; Breadth of Product Portfolio drives Growth - Company Financial Information

Edge: Work-Group Computing Report, Feb 1, 1999

Logitech International (Nasdaq:LOGIY; Switzerland:LOGN, LOGZ), a market leader in human interface devices designed to provide a natural, intuitive link between people and computers, Thursday announced record sales of $146.2 million for the third quarter of fiscal 1999 ending Dec. 31, 1998, compared with sales of $114.8 million in the same quarter last year. Net income was $9.6 million, or $4.85 per share ($0.49 per ADS), compared with net income of $9.1

million, or $4.58 per share ($0.46 per ADS), in the same quarter last year. Sales grew 27 percent over the same quarter last year (or 46 percent excluding the since discontinued scanner line). In the retail channels, growth was driven by the introduction of the Company's newest mouse, trackball, keyboard, entertainment and video products. Revenue growth was also strong in the OEM channel due to healthy sales of new PCs, coupled with Logitech's ongoing success as a supplier to major systems vendors worldwide and its broader penetration into the second-tier PC vendor base. Operating income was the highest ever, reaching $12.4 million, a 52 percent increase over same quarter last year. Gross margin growth more than offset the increase in operating expenses, as the Company continued to significantly invest in marketing programs to support the numerous product launches and strengthen the Logitech brand, as well as to fund ongoing new product development and product cost reductions. The moderate increase in net income reflects unfavorable exchange rates, reduced interest income, and scanner inventory charges in Europe. "We are very pleased with these results; they indicate that Logitech is back on a solid growth path," said Guerrino De Luca, president and chief executive officer. "We are starting to see the pay-off of the choices and investments made in the past 12 months. As we have substantially broadened our product line and positioned Logitech as the `interface company,' consumers have responded with enthusiasm to our new products. "We have seen increasing demand for our cordless mice and keyboards, as PC users discover the freedom and flexibility that they bring to the desktop; our new force feedback joysticks and steering wheels are receiving widespread editorial and customer acclaim and have scored high marks in numerous reviews. In addition, the newest members of the QuickCam family of PC video cameras, including products acquired as part of the QuickCam PC Video business in September, have been well received. "All of these elements, coupled with Logitech's continuing strong position as an OEM supplier, give us reasons for optimism in the coming quarters." Founded in 1981, Logitech designs, manufactures and markets human interface devices that connect people and computers in an intuitive and natural way. Retail and OEM product offerings include pointing devices such as mice and trackballs, control devices for entertainment and professional use, keyboards, multimedia speakers and PC video cameras. Logitech is headquartered in Fremont, and maintains regional headquarters in Romanel, Switzerland, and Hsinchu, Taiwan, R.O.C. In addition, the company has manufacturing facilities in Asia and offices in major cities in North America, Europe and Asia Pacific. Logitech International is a Swiss public company traded on the Nasdaq National Market System (LOGIY) and in Switzerland under the symbols LOGN and LOGZ. FMI: www.logitech.com.