Financial Analysis of Logitech

1. OVERVIEW

Logitech International SA (Logitech) is Switzerland-based company engaged in the provision of peripherals for personal computers and other digital platforms. Logitech is a world leader in computer products that connect people to their computers and to each other. Spanning multiple computing, communication and entertainment platforms, the company develops innovative hardware and software that enables or enhances digital navigation, music and video entertainment, gaming, social networking, audio and video communication over the internet, video security and home-entertainment control. It has two operating divisions, peripherals and video conferencing.

NOTE: It is important to consider that Logitech’s 2012 fiscal year began 1 Apr 2011 and ended 31 Mar 2012. This is a 3 Qtr delta from most of the companies in this industry and can cause some confusion in comparing across the industry at a particular point in time.

1.1. Peripherals

Logitech’s peripherals division is responsible for the design, manufacturing and marketing of peripherals for personal computers, tablets and other digital platforms. Its products include mice, trackballs, keyboards, interactive gaming controllers, multimedia speakers, headsets, webcams, and lapdesks. Their tablet accessories include keyboards, keyboard cases and covers, headsets, wireless speakers, and stands. Internet communications products include webcams, headsets, video communications services, and digital video security systems. Digital music products include speakers, earphones, custom in-ear monitors and Squeezebox Wi-Fi music players. For home entertainment systems, they offer the Harmony line of advanced remote controls. For gaming they produce a range of game controllers, microphones, and other accessories.

Historically, the vast majority of its revenues have resulted from sales of peripheral products to individual consumers. OEM customers include the majority of the world’s largest PC manufacturers. Sales to OEM customers were 8% and 9% of net sales for the fiscal years 2012 and 2011.

1.2. Video Conferencing

Logitech’s video conferencing segment encompasses the design, manufacturing and marketing of LifeSize® video-conferencing products, infrastructure and services for the enterprise, public, and other business markets. The LifeSize® division maintains a separate marketing and sales organization, which sells these products and services worldwide. Product development/management organizations are separate, but coordinated with Logitech’s peripherals business. Sales of LifeSize® products were 6% of net sales for the fiscal years 2012 and 2011.

2. Notes on Financial Data and Industry Averages

During my research, I found that some sources of financial indicators (ratios, growth, and value) were at odds with