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Logitech Posts Record Sales, Operating Profit

Fremont, Calif. – Logitech International reported record double-digit gains in sales, operating profit in its fiscal second quarter ended September 30.

Sales were $595 million, up 19 percent from $502 million in the same quarter last year. Operating income was $80.4 million, up 54 percent from $52.2 million for the same quarter a year ago. Gross margin was 36.3 percent, compared to 34.5 percent in Q2 of fiscal 2007 and equal to the all-time high for the Company.

Cash flow from operations was $103 million, a year-over-year improvement of $80 million.

Logitech’s retail sales for the second quarter grew by 16 percent year over year, increasing by 17 percent in the Americas and Asia Pacific. Retail sales were driven by strong demand for Harmony remote controls, audio products, and keyboards and desktops. Harmony remote controls increased by 47 percent, the company reported.

Audio products increased by 38 percent, driven by the company’s best quarter ever for PC speakers. The keyboards and desktops category, which grew by 35 percent, achieved a record quarter, driven by robust sales of the new Wave comfort keyboard. OEM sales grew by 40 percent, driven by strong demand for microphones for console singing games.

“Our outstanding Q2 performance demonstrated the strength across our product portfolio,” said Guerrino De Luca, Logitech president and chief executive officer. “Our line of Harmony remotes has returned to strong growth, we achieved continued robust growth in audio and keyboards, and we made progress in webcams. We also achieved significant improvement in cash flow from operations. And, we are particularly pleased that the progress we have made in realigning our operating expense growth and gross profit growth positions us to exceed our FY 2008 goal for operating income growth.”

In a separate announcement, Logitech announced a transition plan for its executive leadership. Effective Jan. 1, 2008, Guerrino De Luca will become chairman, Gerald P. Quindlen, currently the company’s senior VP of worldwide sales and marketing, will become Logitech’s president/CEO, and Logitech co-founder Daniel Borel will step down from his role as chairman, remaining a member of the board.