|
|
|
|
|
|
|
|
Note 1 — Basis of Presentation
The consolidated financial statements include the accounts of Logitech International S.A. and its subsidiaries (“Logitech” or “the Company”). All intercompany balances and transactions have been eliminated. The consolidated financial statements are presented in accordance with U.S. GAAP (accounting principles generally accepted in the United States of America) for interim financial information and therefore do not include all the information required by U.S. GAAP for complete financial statements. They should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2012 included in its Annual Report on Form 10-K.
In the quarter ended June 30, 2012, the Company recorded a reduction in deferred tax assets and a decrease to retained earnings of $6.3 million, related to vested unexercised non-qualified stock options for former employees who terminated in fiscal year 2012 and prior. The Company reviewed this accounting error utilizing SEC Staff Accounting Bulletin No. 99, Materiality, and SEC Staff Accounting Bulletin No. 108, Effects of Prior Year Misstatements on Current Year Financial Statements, and determined the impact of the error to be immaterial to any period presented.
Certain prior period financial statement amounts have been reclassified to conform to the current period presentation with no impact on previously reported net income (loss).
In the opinion of management, these consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the periods presented. Operating results for the three and nine months ended December 31, 2012 are not necessarily indicative of the results that may be expected for the year ending March 31, 2013, or any future periods.
Fiscal Year
The Company’s fiscal year ends on March 31. Interim quarters are thirteen-week periods, each ending on a Friday. For purposes of presentation, the Company has indicated its quarterly periods as ending on the month end.
Changes in Significant Accounting Policies
There have been no significant changes to the nature of the critical accounting policies, and no significant changes in the critical accounting estimates that were disclosed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2012, except for Valuation of Long-Lived Assets described in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this Form 10-Q.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect reported amounts of assets, liabilities, net sales and expenses, and the disclosure of contingent assets and liabilities. Although these estimates are based on management’s best knowledge of current events and actions that may impact the Company in the future, actual results could differ from those estimates.
|
Note 3 — Employee Benefit Plans
Employee Share Purchase Plans and Stock Incentive Plans
As of December 31, 2012, the Company offers the 2006 ESPP (2006 Employee Share Purchase Plan (Non-U.S.)), the 1996 ESPP (1996 Employee Share Purchase Plan (U.S.)), the 2006 Plan (2006 Stock Incentive Plan) and the 2012 Plan (2012 Stock Inducement Equity Plan). The 2012 Plan was approved by the Board of Directors in April 2012. On April 13, 2012, the Company filed Registration Statements to register 5.0 million additional shares to be issued pursuant to the 2006 ESPP, and 1.8 million shares under the 2012 Plan. On September 5, 2012, at the fiscal year 2012 Annual General Meeting of Shareholders, Logitech shareholders approved amendments to and restatement of the 2006 Stock Incentive Plan, which included the increase of 7.3 million additional shares to be issued under this plan and to prohibit the repricing of options or stock appreciation rights. On October 25, 2012, the Company filed a registration statement to register the 7.3 million additional shares under the 2006 Stock Incentive Plan. Shares issued to employees as a result of purchases or exercises under these plans are generally issued from shares held in treasury.
The following table summarizes share-based compensation expense and related tax benefit recognized for the three and nine months ended December 31, 2012 and 2011 (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cost of goods sold |
|
$ |
704 |
|
$ |
948 |
|
$ |
2,101 |
|
$ |
3,058 |
|
Share-based compensation expense included in gross profit |
|
704 |
|
948 |
|
2,101 |
|
3,058 |
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
| ||||
Marketing and selling |
|
953 |
|
2,380 |
|
5,377 |
|
9,345 |
| ||||
Research and development |
|
2,430 |
|
1,802 |
|
6,018 |
|
5,364 |
| ||||
General and administrative |
|
1,135 |
|
1,797 |
|
5,163 |
|
5,613 |
| ||||
Share-based compensation expense included in operating expenses |
|
4,518 |
|
5,979 |
|
16,558 |
|
20,322 |
| ||||
Total share-based compensation expense |
|
5,222 |
|
6,927 |
|
18,659 |
|
23,380 |
| ||||
Income tax provision (benefit) |
|
(1,043 |
) |
70 |
|
(4,090 |
) |
(4,595 |
) | ||||
Share-based compensation expense, net of income tax |
|
$ |
4,179 |
|
$ |
6,997 |
|
$ |
14,569 |
|
$ |
18,785 |
|
Share-based compensation expense for the three and nine months ended December 31, 2012 includes a reduction of $0 and $2.2 million in expense applicable to employees terminated as a result of the restructuring plan announced in April 2012. As of December 31, 2012 and 2011, $0.2 million and $0.5 million of share-based compensation cost were capitalized in inventory.
Defined Contribution Plans
Certain of the Company’s subsidiaries have defined contribution employee benefit plans covering all or a portion of their employees. Contributions to these plans are discretionary for certain plans and are based on specified or statutory requirements for others. The charges to expense for these plans for the three months ended December 31, 2012 and 2011 were $2.0 million and $2.5 million and for the nine months ended December 31, 2012 and 2011 were $6.6 million and $8.1 million.
Defined Benefit Plans
Certain of the Company’s subsidiaries sponsor defined benefit pension plans or non-retirement post-employment benefits covering substantially all of their employees. Benefits are provided based on employees’ years of service and earnings, or in accordance with applicable employee benefit regulations. The Company’s practice is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax regulations.
During the quarter ended September 30, 2012, the Company’s Swiss defined benefit pension plan was subject to re-measurement due to the number of plan participants affected by the April 2012 restructuring described in Note 13. The re-measurement resulted in the realization of $2.2 million in previously unrecognized losses which resided within accumulated other comprehensive loss and which the Company entirely recognized during the three months ended September 30, 2012.
The net periodic benefit cost for defined benefit pension plans and non-retirement post-employment benefit obligations for the three and nine months ended December 31, 2012 and 2011 were as follows (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Service cost |
|
$ |
1,770 |
|
$ |
1,520 |
|
$ |
5,371 |
|
$ |
4,752 |
|
Interest cost |
|
440 |
|
531 |
|
1,351 |
|
1,668 |
| ||||
Expected return on plan assets |
|
(378 |
) |
(277 |
) |
(996 |
) |
(930 |
) | ||||
Amortization of net transition obligation |
|
1 |
|
1 |
|
3 |
|
3 |
| ||||
Amortization of net prior service cost |
|
39 |
|
37 |
|
115 |
|
114 |
| ||||
Recognized net actuarial loss |
|
271 |
|
210 |
|
950 |
|
669 |
| ||||
Settlement cost |
|
— |
|
— |
|
2,254 |
|
— |
| ||||
Net periodic benefit cost |
|
$ |
2,143 |
|
$ |
2,022 |
|
$ |
9,048 |
|
$ |
6,276 |
|
|
Note 4 — Income Taxes
The Company is incorporated in Switzerland but operates in various countries with differing tax laws and rates. Further, a portion of the Company’s income before taxes and the provision for income taxes are generated outside of Switzerland.
In determining the annual effective tax rate, both the restructuring described in Note 13 and the goodwill impairment described in Note 7 were treated as discrete events as they were significantly unusual and infrequent in nature. As such, related charges and costs were excluded from ordinary income in determining the annual effective tax rate. The tax benefit associated with the restructuring is approximately $0.2 million. There was no tax benefit associated with goodwill impairment as the goodwill is not tax-deductible.
The income tax provision for the three months ended December 31, 2012 was $11.4 million based on an effective income tax rate of 6.2% of pre-tax loss. For the three months ended December 31, 2011, the income tax provision was $22.1 million based on an effective income tax rate of 28.5% of pre-tax income. The income tax benefit for the nine months ended December 31, 2012 was $26.6 million based on an effective income tax rate of 12.2% of pre-tax loss. For the nine months ended December 31, 2011, the income tax provision was $17.4 million based on an effective income tax rate of 28.7% of pre-tax income. The change in the effective income tax rate for the three and nine months ended December 31, 2012 compared with the same periods in fiscal year 2012 is primarily due to the mix of income and losses in the various tax jurisdictions in which the Company operates, and a discrete tax benefit of $32.1 million and $3.5 million during the fiscal quarter ended September 30, 2012 and December 31, 2012, respectively, related to the reversal of uncertain tax positions resulting from the closure of federal income tax examinations in the United States.
The American Taxpayer Relief Act of 2012, which was enacted on January 2, 2013, extends the Federal research tax credit retroactively for two years from January 1, 2012 through December 31, 2013. An estimated tax benefit of approximately $2.5 million from the extension of the Federal research tax credit will be reflected in the income tax provision in the quarter ending March 31, 2013.
As of December 31 and March 31, 2012, the total amount of unrecognized tax benefits and related accrued interest and penalties due to uncertain tax positions was $102.5 million and $143.3 million, of which $89.2 million and $125.4 million would affect the effective income tax rate if recognized. The decline in unrecognized tax benefits associated with uncertain tax positions in the amount of $40.8 million is primarily due to $42.8 million from the settlement of income tax examinations in the United States.
The Company continues to recognize interest and penalties related to unrecognized tax positions in income tax expense. As of December 31 and March 31, 2012, the Company had approximately $6.8 million and $7.5 million, respectively, of accrued interest and penalties related to uncertain tax positions.
The Company files Swiss and foreign tax returns. For all these tax returns, the Company is generally not subject to tax examinations for years prior to 2000. In the fiscal quarter ended September 30, 2012, the Company effectively settled the examinations of fiscal years 2006 and 2007 with the IRS (U.S. Internal Revenue Service). The Company reversed $33.8 million of unrecognized tax benefits associated with uncertain tax positions and recorded a $1.7 million tax provision from the proposed revised assessments as a result of the closure, resulting in a net tax benefit of $32.1 million. There was no cash tax liability from the settlement due to utilization of net operating loss carryforwards.
In addition, the IRS completed its field examination of the Company’s U.S. subsidiary for fiscal years 2008 and 2009 during the fiscal quarter ended September 30, 2012. The Company received Notices of Proposed Adjustments related to various domestic and international tax issues on August 15, 2012 and subsequently, received final letters dated October 17, 2012 which effectively settled the examinations. As a result of the closure of income tax examinations for fiscal years 2008 and 2009, the Company reversed $9.0 million of unrecognized tax benefits associated with uncertain tax positions and recorded a $5.5 million tax provision from the assessments, resulting in a net tax benefit of $3.5 million. There was no cash tax liability from the settlement due to utilization of net operating loss carryforwards.
The Company is also under examination and has received assessment notices in other tax jurisdictions. At this time, the Company is not able to estimate the potential impact that these examinations may have on income tax expense. If the examinations are resolved unfavorably, there is a possibility they may have a material negative impact on the Company’s consolidated operating results.
Although the Company has adequately provided for uncertain tax positions, the provisions on these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved. It is not possible at this time to reasonably estimate the decrease of the unrecognized tax benefits within the next twelve months.
|
Note 5 — Balance Sheet Components
The following table presents the components of certain balance sheet asset amounts as of December 31 and March 31, 2012 (in thousands):
|
|
December 31, 2012 |
|
March 31, 2012 |
| ||
Accounts receivable, net: |
|
|
|
|
| ||
Accounts receivable |
|
$ |
450,376 |
|
$ |
376,917 |
|
Allowance for doubtful accounts |
|
(2,368 |
) |
(2,472 |
) | ||
Allowance for returns |
|
(23,509 |
) |
(24,599 |
) | ||
Allowances for cooperative marketing arrangements |
|
(32,129 |
) |
(24,109 |
) | ||
Allowances for customer incentive programs |
|
(55,488 |
) |
(42,262 |
) | ||
Allowances for pricing programs |
|
(72,293 |
) |
(60,371 |
) | ||
|
|
$ |
264,589 |
|
$ |
223,104 |
|
Inventories: |
|
|
|
|
| ||
Raw materials |
|
$ |
33,408 |
|
$ |
38,613 |
|
Work-in-process |
|
4 |
|
73 |
| ||
Finished goods |
|
244,065 |
|
258,386 |
| ||
|
|
$ |
277,477 |
|
$ |
297,072 |
|
Other current assets: |
|
|
|
|
| ||
Tax and value-added tax refund receivables |
|
$ |
18,292 |
|
$ |
19,360 |
|
Deferred taxes |
|
22,647 |
|
25,587 |
| ||
Prepaid expenses and other |
|
18,869 |
|
21,043 |
| ||
|
|
$ |
59,808 |
|
$ |
65,990 |
|
Property, plant and equipment, net: |
|
|
|
|
| ||
Plant, buildings and improvements |
|
$ |
68,749 |
|
$ |
48,555 |
|
Equipment |
|
162,671 |
|
148,059 |
| ||
Computer equipment |
|
43,989 |
|
40,353 |
| ||
Computer software |
|
79,445 |
|
75,758 |
| ||
|
|
354,854 |
|
312,725 |
| ||
Less: accumulated depreciation |
|
(276,946 |
) |
(249,657 |
) | ||
|
|
77,908 |
|
63,068 |
| ||
Construction-in-progress |
|
8,343 |
|
28,968 |
| ||
Land |
|
2,877 |
|
2,848 |
| ||
|
|
$ |
89,128 |
|
$ |
94,884 |
|
Other assets: |
|
|
|
|
| ||
Deferred taxes |
|
$ |
55,925 |
|
$ |
61,358 |
|
Trading securities |
|
15,135 |
|
14,301 |
| ||
Deposits and other |
|
6,961 |
|
7,374 |
| ||
|
|
$ |
78,021 |
|
$ |
83,033 |
|
In the three months ended June 30, 2011, an inventory valuation adjustment of $34.1 million was charged to cost of goods sold, as the result of management’s decision in early July 2011 to reduce the retail price of Logitech Revue. The reduction in construction-in-progress balance from March 31, 2012 to December 31, 2012 was from leasehold improvement costs related to the new Americas headquarters which were placed into service during this period.
The following table presents the components of certain balance sheet liability amounts as of December 31 and March 31, 2012 (in thousands):
|
|
December 31, 2012 |
|
March 31, 2012 |
| ||
Accrued liabilities: |
|
|
|
|
| ||
Accrued personnel expenses |
|
$ |
52,133 |
|
$ |
42,809 |
|
Accrued marketing expenses |
|
11,006 |
|
7,097 |
| ||
Indirect customer incentive programs |
|
33,570 |
|
26,112 |
| ||
Accrued restructuring |
|
917 |
|
— |
| ||
Deferred revenue |
|
21,778 |
|
19,358 |
| ||
Accrued freight and duty |
|
11,624 |
|
11,376 |
| ||
Value-added tax payable |
|
8,659 |
|
7,140 |
| ||
Accrued royalties |
|
4,986 |
|
6,243 |
| ||
Warranty accrual |
|
3,397 |
|
5,184 |
| ||
Non-retirement post-employment benefit obligations |
|
4,490 |
|
4,129 |
| ||
Income taxes payable - current |
|
4,554 |
|
6,047 |
| ||
Other accrued liabilities |
|
47,414 |
|
51,185 |
| ||
|
|
$ |
204,528 |
|
$ |
186,680 |
|
Non-current liabilities: |
|
|
|
|
| ||
Income taxes payable - non-current |
|
$ |
100,358 |
|
$ |
137,319 |
|
Obligation for deferred compensation |
|
15,199 |
|
14,393 |
| ||
Defined benefit pension plan liability |
|
34,435 |
|
39,337 |
| ||
Deferred rent |
|
23,931 |
|
16,042 |
| ||
Other long-term liabilities |
|
12,740 |
|
11,371 |
| ||
|
|
$ |
186,663 |
|
$ |
218,462 |
|
Assets Held for Sale
During the third quarter of fiscal year 2013, the Company made a strategic decision to divest its remote controls and digital video security product categories by the end of calendar year 2013, both of which are included in the Company’s peripherals operating segment. This decision primarily resulted from the Company’s belief that these product categories would not make a meaningful contribution to improving either the Company’s growth or profitability because they are not critical to the Company’s plans for improved future performance. As a result, assets and liabilities of the remote controls and digital video security product categories have been classified as held for sale as of December 31, 2012. The components of assets and liabilities held for sale at December 31, 2012 were as follows:
|
|
December 31, 2012 |
| |
|
|
|
| |
Assets held for sale: |
|
|
| |
Inventory |
|
$ |
12,561 |
|
Property, plant and equipment, net |
|
520 |
| |
Goodwill |
|
4,116 |
| |
Other intangible assets, net |
|
500 |
| |
|
|
$ |
17,697 |
|
|
|
|
| |
Liabilities held for sale: |
|
|
| |
Warranty and other liabilities |
|
$ |
2,020 |
|
|
|
$ |
2,020 |
|
Allowance for Doubtful Accounts
The following table presents the changes in the allowance for doubtful accounts during the three and nine months ended December 31, 2012 and 2011 (in thousands):
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Allowance for doubtful accounts, beginning of period |
|
$ |
(2,239 |
) |
$ |
(3,726 |
) |
$ |
(2,472 |
) |
$ |
(4,086 |
) |
Bad debt expense (credit) |
|
(141 |
) |
267 |
|
48 |
|
313 |
| ||||
Write-offs, net |
|
12 |
|
399 |
|
56 |
|
713 |
| ||||
Allowance for doubtful accounts, end of period |
|
$ |
(2,368 |
) |
$ |
(3,060 |
) |
$ |
(2,368 |
) |
$ |
(3,060 |
) |
|
Note 6 — Financial Instruments
Fair Value Measurements
The Company considers fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company utilizes the following three-level fair value hierarchy to establish the priorities of the inputs used to measure fair value:
· Level 1 — Quoted prices in active markets for identical assets or liabilities.
· Level 2 — Observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
· Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
The following table presents the Company’s financial assets and liabilities that were accounted for at fair value, excluding assets related to the Company’s defined benefit pension plans, classified by the level within the fair value hierarchy on a recurring basis (in thousands):
|
|
December 31, 2012 |
|
March 31, 2012 |
| ||||||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
|
$ |
321,999 |
|
$ |
— |
|
$ |
— |
|
$ |
478,370 |
|
$ |
— |
|
$ |
— |
|
Trading investments for deferred compensation plan: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Money market funds |
|
3,319 |
|
— |
|
— |
|
3,383 |
|
— |
|
— |
| ||||||
Mutual funds |
|
11,816 |
|
— |
|
— |
|
10,918 |
|
— |
|
— |
| ||||||
Available-for-sale securities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Collateralized debt obligations |
|
— |
|
— |
|
— |
|
— |
|
— |
|
429 |
| ||||||
Foreign exchange derivative assets |
|
— |
|
518 |
|
— |
|
— |
|
658 |
|
— |
| ||||||
Total assets at fair value |
|
$ |
337,134 |
|
$ |
518 |
|
$ |
— |
|
$ |
492,671 |
|
$ |
658 |
|
$ |
429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Foreign exchange derivative liabilities |
|
$ |
— |
|
$ |
1,088 |
|
$ |
— |
|
$ |
— |
|
$ |
245 |
|
$ |
— |
|
Total liabilities at fair value |
|
$ |
— |
|
$ |
1,088 |
|
$ |
— |
|
$ |
— |
|
$ |
245 |
|
$ |
— |
|
The following table presents the changes in the Company’s Level 3 financial assets for the three and nine months ended December 31, 2012 and 2011 (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Available-for-sale securities, beginning balance |
|
$ |
— |
|
$ |
1,695 |
|
$ |
429 |
|
$ |
1,695 |
|
Proceeds from sales of securities |
|
— |
|
(6,550 |
) |
(917 |
) |
(6,550 |
) | ||||
Realized gain on sales of securities |
|
— |
|
6,050 |
|
831 |
|
6,050 |
| ||||
Reversal of unrealized gains previously recognized in accumulated other comprehensive income |
|
— |
|
— |
|
(343 |
) |
— |
| ||||
Available-for-sale securities, ending balance |
|
$ |
— |
|
$ |
1,195 |
|
$ |
— |
|
$ |
1,195 |
|
Cash and Cash Equivalents
Cash and cash equivalents consist of bank demand deposits and time deposits. The time deposits have original maturities of three months or less. Cash and cash equivalents are carried at cost, which approximates fair value.
Investment Securities
The Company’s investment securities portfolio currently consists of marketable securities (money market and mutual funds) related to a deferred compensation plan.
The marketable securities related to the deferred compensation plan are classified as non-current other assets. Since participants in the deferred compensation plan may select the mutual funds in which their compensation deferrals are invested within the confines of the Rabbi Trust which holds the marketable securities, the Company has designated these marketable securities as trading investments, although there is no stated intent to actively buy and sell securities with the objective of generating profits on short-term differences in market prices. Management has classified the investments as non-current assets because final sale of the investments or realization of proceeds by plan participants is not expected within the Company’s normal operating cycle of one year. The marketable securities are recorded at a fair value of $15.1 million and $14.3 million as of December 31 and March 31, 2012, based on quoted market prices. Quoted market prices are observable inputs that are classified as Level 1 within the fair value hierarchy. Earnings, gains and losses on trading investments are included in other income (expense), net. Unrealized trading gains (losses) of $(0.1) million and $0.1 million are included in other income (expense), net for the three and nine months ended December 31, 2012 and relate to trading securities held at December 31, 2012.
Derivative Financial Instruments
The following table presents the fair values of the Company’s derivative instruments and their locations on its consolidated balance sheets as of December 31 and March 31, 2012 (in thousands):
|
|
Asset Derivatives |
|
Liability Derivatives |
| ||||||||||||
|
|
|
|
Fair Value |
|
|
|
Fair Value |
| ||||||||
|
|
|
|
December 31, |
|
March 31, |
|
|
|
December 31, |
|
March 31, |
| ||||
|
|
Location |
|
2012 |
|
2012 |
|
Location |
|
2012 |
|
2012 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Derivatives designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash flow hedges |
|
Other assets |
|
$ |
24 |
|
$ |
250 |
|
Other liabilities |
|
$ |
984 |
|
$ |
— |
|
|
|
|
|
24 |
|
250 |
|
|
|
984 |
|
— |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Derivatives not designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Foreign exchange forward contracts |
|
Other assets |
|
174 |
|
341 |
|
Other liabilities |
|
31 |
|
148 |
| ||||
Foreign exchange swap contracts |
|
Other assets |
|
320 |
|
67 |
|
Other liabilities |
|
73 |
|
97 |
| ||||
|
|
|
|
494 |
|
408 |
|
|
|
104 |
|
245 |
| ||||
|
|
|
|
$ |
518 |
|
$ |
658 |
|
|
|
$ |
1,088 |
|
$ |
245 |
|
The following table presents the amounts of gains and losses on the Company’s derivative instruments for the three months ended December 31, 2012 and 2011 and their locations on its consolidated statements of operations (in thousands):
|
|
Net amount of gain/(loss) |
|
Location of |
|
Amount of gain/(loss) |
|
Location of |
|
Amount of gain/(loss) |
| ||||||||||||
|
|
2012 |
|
2011 |
|
loss into income |
|
2012 |
|
2011 |
|
immediately |
|
2012 |
|
2011 |
| ||||||
Derivatives designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flow hedges |
|
$ |
222 |
|
$ |
(1,411 |
) |
Cost of goods sold |
|
$ |
1,137 |
|
$ |
(1,672 |
) |
Other income/expense |
|
$ |
70 |
|
$ |
21 |
|
|
|
222 |
|
(1,411 |
) |
|
|
1,137 |
|
(1,672 |
) |
|
|
70 |
|
21 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Derivatives not designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Foreign exchange forward contracts |
|
— |
|
— |
|
|
|
— |
|
— |
|
Other income/expense |
|
122 |
|
(1,535 |
) | ||||||
Foreign exchange swap contracts |
|
— |
|
— |
|
|
|
— |
|
— |
|
Other income/expense |
|
744 |
|
227 |
| ||||||
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
866 |
|
(1,308 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
$ |
222 |
|
$ |
(1,411 |
) |
|
|
$ |
1,137 |
|
$ |
(1,672 |
) |
|
|
$ |
936 |
|
$ |
(1,287 |
) |
The following table presents the amounts of gains and losses on the Company’s derivative instruments for the nine months ended December 31, 2012 and 2011 and their locations on its consolidated statements of operations (in thousands):
|
|
Net amount of gain/(loss) |
|
Location of |
|
Amount of gain/(loss) |
|
Location of |
|
Amount of gain/(loss) |
| ||||||||||||
|
|
2012 |
|
2011 |
|
loss into income |
|
2012 |
|
2011 |
|
immediately |
|
2012 |
|
2011 |
| ||||||
Derivatives designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flow hedges |
|
$ |
(2,462 |
) |
$ |
6,489 |
|
Cost of goods sold |
|
$ |
(440 |
) |
$ |
2,345 |
|
Other income/expense |
|
$ |
242 |
|
$ |
(237 |
) |
|
|
(2,462 |
) |
6,489 |
|
|
|
(440 |
) |
2,345 |
|
|
|
242 |
|
(237 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Derivatives not designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Foreign exchange forward contracts |
|
— |
|
— |
|
|
|
— |
|
— |
|
Other income/expense |
|
(715 |
) |
(1,341 |
) | ||||||
Foreign exchange swap contracts |
|
— |
|
— |
|
|
|
— |
|
— |
|
Other income/expense |
|
1,179 |
|
(393 |
) | ||||||
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
464 |
|
(1,734 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
$ |
(2,462 |
) |
$ |
6,489 |
|
|
|
$ |
(440 |
) |
$ |
2,345 |
|
|
|
$ |
706 |
|
$ |
(1,971 |
) |
Cash Flow Hedges
The Company enters into foreign exchange forward contracts to hedge against exposure to changes in foreign currency exchange rates related to its subsidiaries’ forecasted inventory purchases. The Company has one entity with a euro functional currency that purchases inventory in U.S. dollars. The Company is currently hedging against a weaker euro relative to U.S. dollars in that entity. The primary risk managed by using derivative instruments is the foreign currency exchange rate risk. The Company has designated these derivatives as cash flow hedges. Logitech does not use derivative financial instruments for trading or speculative purposes. These hedging contracts mature within four months, and are denominated in the same currency as the underlying transactions. Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of accumulated other comprehensive loss until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. The Company assesses the effectiveness of the hedges by comparing changes in the spot rate of the currency underlying the forward contract with changes in the spot rate of the currency in which the forecasted transaction will be consummated. If the underlying transaction being hedged fails to occur or if a portion of the hedge does not generate offsetting changes in the foreign currency exposure of forecasted inventory purchases, the Company immediately recognizes the gain or loss on the associated financial instrument in other income (expense), net. Such gains and losses were immaterial during the three and nine months ended December 31, 2012 and 2011. Cash flows from such hedges are classified as operating activities in the consolidated statements of cash flows. The notional amounts of foreign exchange forward contracts outstanding related to forecasted inventory purchases were $49.7 million (€37.7 million) and $54.9 million (€42.4 million) at December 31, 2012 and 2011. The notional amount represents the future cash flows under contracts to purchase foreign currencies.
Other Derivatives
The Company also enters into foreign exchange forward contracts to reduce the short-term effects of foreign currency fluctuations on certain foreign currency receivables or payables. These forward contracts generally mature within three months. The Company may also enter into foreign exchange swap contracts to economically extend the terms of its foreign exchange forward contracts. The primary risk managed by using forward and swap contracts is the foreign currency exchange rate risk. The gains or losses on foreign exchange forward contracts are recognized in earnings based on the changes in fair value.
The notional amounts of foreign exchange forward contracts outstanding at December 31, 2012 and March 31, 2012 relating to foreign currency receivables or payables were $38.6 million and $18.7 million. Open forward contracts as of December 31, 2012 consisted of contracts in euros to sell British pounds, contracts in Australian dollars to purchase U.S. dollars, contracts in Taiwanese dollars to sell U.S. dollars and contracts in Canadian dollars to purchase U.S. dollars at future dates at pre-determined exchange rates. Open forward contracts as of March 31, 2012 consisted of contracts in euros to sell British pounds and contracts in Australian dollars to purchase U.S. dollars at future dates at pre-determined exchange rates. The notional amounts of foreign exchange swap contracts outstanding at December 31, 2012 and March 31, 2012 were $14.4 million and $22.4 million. Swap contracts outstanding at December 31, 2012 consisted of contracts in Mexican pesos and Japanese yen. Swap contracts outstanding at March 31, 2012 consisted of contracts in Taiwanese dollars, Mexican pesos and Japanese yen.
The fair value of all foreign exchange forward contracts and foreign exchange swap contracts is determined based on observable market transactions of spot currency rates and forward rates. Cash flows from these contracts are classified as operating activities in the consolidated statements of cash flows.
Financial Instruments Measured at Fair Value on a Nonrecurring Basis
During the second quarter of fiscal year 2013, the Company invested $4.0 million in a privately-held company in exchange for convertible preferred stock. The Company accounts for this investment under the cost method of accounting since it has less than a 20% ownership interest and it lacks the ability to exercise significant influence over the operating and financial policies of the investee. The Company will periodically assess the investment for other-than-temporary impairment. If it determines that an other-than-temporary impairment has occurred, it will write down this investment to its fair value. The Company will estimate fair value of this investment considering all available information such as pricing in recent rounds of financing, current cash positions, earnings and cash flow forecasts, recent operational performance and any other readily available market data. During the third quarter of fiscal 2013, the Company performed an impairment assessment of this investment due to significant deterioration of its financial results and financial position, determining that an other-than-temporary impairment had occurred and, consequently recorded a $3.6 million investment impairment charge during this period.
|
Note 7 — Goodwill and Other Intangible Assets
The Company performs its annual goodwill impairment test of each reporting unit as of December 31 and completes the assessment during its fiscal fourth quarter, or more frequently, if certain events or circumstances warrant. Events or changes in circumstances which might indicate potential impairment in goodwill include the company-specific factors, including, but not limited to, stock price volatility, market capitalization relative to net book value, and projected revenue, market growth and operating results. Determining the number of reporting units and the fair value of a reporting unit requires the Company to make judgments and involves the use of significant estimates and assumptions. The Company has two reporting units: peripherals and video conferencing. The allocation of assets and liabilities to each of its reporting units also involves judgment and assumptions.
The goodwill impairment assessment involves three tests, Step 0, Step 1 and Step 2. The Step 0 test involves performing an initial qualitative assessment to determine whether it is more likely than not that the asset is impaired and thus whether it is necessary to proceed to Step 1 and calculate the fair value of the respective reporting unit. The Company may proceed directly to the Step 1 test without performing the Step 0 test. The Step 1 test involves measuring the recoverability of goodwill at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. The fair value is estimated using an income approach employing both a discounted cash flow (“DCF”) and a market-based model. The DCF model is based on projected cash flows from the Company’s most recent forecast (“assessment forecast”) developed in connection with each of its reporting units to perform the goodwill impairment assessment. The assessment forecast is based on a number of key assumptions, including, but not limited to, discount rate, compound annual growth rate (“CAGR”) during the forecast period, and terminal value. The terminal value is based on an exit price at the end of the assessment forecast using an earnings multiple applied to the final year of the assessment forecast. The discount rate is applied to the projected cash flows to reflect the risks inherent in the timing and amount of the projected cash flows, including the terminal value, and is derived from the weighted average cost of capital of market participants in similar businesses. The market approach model is based on applying certain revenue and earnings multiples of comparable companies relevant to each of its reporting units to the respective revenue and earnings metrics of the Company’s reporting units. To test the reasonableness of the fair values indicated by the income approach and the market-based approach, the Company also assess the implied premium of the aggregate fair value over the market capitalization considered attributable to an acquisition control premium, which is the price in excess of a stock market’s price that investors would typically pay to gain control of an entity. The discounted cash flow model and the market approach model require the exercise of significant judgment, including assumptions about appropriate discount rates, long-term growth rates for purposes of determining a terminal value at the end of the discrete forecast period, economic expectations, timing of expected future cash flows, and expectations of returns on equity that will be achieved. Such assumptions are subject to change as a result of changing economic and competitive conditions. If the carrying amount of the reporting unit exceeds its fair value as determined by these assessments, goodwill is considered impaired, and the Step 2 test is performed to measure the amount of impairment loss. The Step 2 test measures the impairment loss by allocating the reporting unit’s fair value to its assets and liabilities other than goodwill, comparing the resulting implied fair value of goodwill with its carrying amount, and recording an impairment charge for the difference.
The Company performed its annual goodwill impairment analysis of each of its reporting units as of December 31, 2012 using the income approach and market approach described above. The Company chose not to perform the Step 0 test and to proceed directly to the Step 1 test. This assessment resulted in the Company determining that its peripherals reporting unit passed the Step 1 test because the estimated fair value exceeded its carrying value by more than 75%. By contrast, the video conferencing reporting unit failed the Step 1 test because the estimated fair value was less than its carrying value, thus requiring a Step 2 assessment of this reporting unit. This impairment primarily resulted from a decrease in the expected CAGR during the assessment forecast period based on greater evidence of the overall enterprise video conferencing industry experiencing a slowdown in recent quarters, combined with lower demand related to new product launches, increased competition in fiscal year 2013 and other market data. These factors had an adverse effect on the Company’s recent video conferencing operating results and are anticipated to have an adverse effect on its future outlook. The Company was unable to fully complete the Step 2 analysis prior to filing of this Form 10-Q due to the complexities of determining the implied fair value of goodwill of its video conferencing reporting unit. Based on the work performed as of this filing date, the Company recorded a non-cash goodwill impairment charge estimate of $211.0 million related to its video conferencing reporting unit. The accounting write down, which was performed as part of this annual impairment test, was required to reflect the carrying amount of the reporting unit had exceeded its implied fair value due to the slowdown in the enterprise video conferencing industry in recent quarters.
The video conferencing reporting unit encompasses the integrated operations of the Company’s acquisitions of SightSpeed Inc., LifeSize Communications, Inc., Paradial AS and Mirial S.r.l.
Management continues to evaluate and monitor all key factors impacting the carrying value of the Company’s recorded goodwill and long-lived assets. Further adverse changes in the Company’s actual or expected operating results, market capitalization, business climate, economic factors or other negative events that may be outside the control of management could result in a material non-cash impairment charge in the future.
The following table summarizes the activity in the Company’s goodwill balance during the nine months ended December 31, 2012:
|
|
Peripheral |
|
Video Conferencing |
|
Total |
| |||
Balance at March 31, 2012 |
|
$ |
220,860 |
|
$ |
339,663 |
|
$ |
560,523 |
|
Impairment |
|
|
|
(211,000 |
) |
(211,000 |
) | |||
Foreign currency movements |
|
78 |
|
(172 |
) |
(94 |
) | |||
|
|
$ |
220,938 |
|
$ |
128,491 |
|
$ |
349,429 |
|
Reclassified to Assets Held for Sale: |
|
|
|
|
|
|
| |||
Goodwill - Digital Video Security and Remote Controls |
|
(4,116 |
) |
— |
|
(4,116 |
) | |||
Balance at December 31, 2012 |
|
$ |
216,822 |
|
$ |
128,491 |
|
$ |
345,313 |
|
The Company’s acquired other intangible assets subject to amortization were as follows (in thousands):
|
|
December 31, 2012 |
|
March 31, 2012 |
| ||||||||||||||
|
|
Gross Carrying |
|
Accumulated |
|
Net Carrying |
|
Gross Carrying |
|
Accumulated |
|
Net Carrying |
| ||||||
|
|
Amount |
|
Amortization |
|
Amount |
|
Amount |
|
Amortization |
|
Amount |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Trademark/tradename |
|
$ |
32,085 |
|
$ |
(28,162 |
) |
$ |
3,923 |
|
$ |
32,104 |
|
$ |
(26,095 |
) |
$ |
6,009 |
|
Technology |
|
91,904 |
|
(73,114 |
) |
18,790 |
|
91,954 |
|
(62,548 |
) |
29,406 |
| ||||||
Customer contracts |
|
39,908 |
|
(27,088 |
) |
12,820 |
|
39,926 |
|
(21,823 |
) |
18,103 |
| ||||||
|
|
$ |
163,897 |
|
$ |
(128,364 |
) |
$ |
35,533 |
|
$ |
163,984 |
|
$ |
(110,466 |
) |
$ |
53,518 |
|
Reclassified to Assets Held for Sale: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Trademark/tradename - Digital Video Security |
|
(1,300 |
) |
1,300 |
|
— |
|
— |
|
— |
|
— |
| ||||||
Technology - Digital Video Security |
|
(6,700 |
) |
6,200 |
|
(500 |
) |
— |
|
— |
|
— |
| ||||||
Customer contracts - Digital Video Security |
|
(200 |
) |
200 |
|
— |
|
— |
|
— |
|
— |
| ||||||
|
|
$ |
155,697 |
|
$ |
(120,664 |
) |
$ |
35,033 |
|
$ |
163,984 |
|
$ |
(110,466 |
) |
$ |
53,518 |
|
Amortization expense for other intangible assets was $5.7 million and $6.7 million for the three months ended December 31, 2012 and 2011 and $17.9 million and $20.2 million for the nine months ended December 31, 2012 and 2011. The Company expects that amortization expense for the remaining three months of fiscal year 2013 will be $6.3 million, and annual amortization expense for fiscal years 2014, 2015 and 2016 will be $17.9 million, $9.1 million, $1.2 million and $0.5 million thereafter.
|
Note 8 — Financing Arrangements
In December 2011, the Company entered into a Senior Revolving Credit Facility Agreement with a group of primarily Swiss banks that provides for a revolving multicurrency unsecured credit facility in an amount of up to $250.0 million. The Company may, upon notice to the lenders and subject to certain requirements, arrange with existing or new lenders to provide up to an aggregate of $150.0 million in additional commitments, for a total of $400.0 million of unsecured revolving credit. The credit facility may be used for working capital, general corporate purposes, and acquisitions. There were no outstanding borrowings under the credit facility at December 31, 2012.
The credit facility matures on October 31, 2016. The Company may prepay the loans under the credit facility in whole or in part at any time without premium or penalty. Borrowings under the credit facility will accrue interest at a per annum rate based on LIBOR (London Interbank Offered Rate), or EURIBOR (Euro Interbank Offered Rate) in the case of loans denominated in euros, plus a variable margin determined quarterly based on the ratio of senior debt-to-earnings before interest, taxes, depreciation and amortization for the preceding four-quarter period, plus, if applicable, an additional rate per annum intended to compensate the lenders for the cost of compliance with regulatory reserve requirements and other banking regulations. The Company also pays a quarterly commitment fee of 40% of the applicable margin on the available commitment. In connection with entering into the credit facility, the Company incurred non-recurring fees totaling $1.5 million, which are amortized on a straight-line basis over the term of the credit facility.
The facility agreement contains representations, covenants, including threshold financial covenants, and events of default customary in Swiss credit markets. Affirmative covenants include covenants regarding reporting requirements, maintenance of insurance, maintenance of properties and compliance with applicable laws and regulations, and financial covenants that require the maintenance of net senior debt, interest cover and adjusted equity ratios determined in accordance with the terms of the facility. Negative covenants limit the ability of the Company and its subsidiaries, among other things, to grant liens, make investments, incur debt, make restricted payments, enter into a merger or acquisition, or sell, transfer or dispose of assets, in each case subject to certain exceptions. As of December 31, 2012, the Company was in compliance with all covenants and conditions of this facility.
This facility stipulates that, upon an uncured event of default under the facility, the lenders may declare all or a portion of the outstanding obligations payable by the Company to be immediately due and payable, terminate their commitments and exercise other rights and remedies provided for under the facility. The events of default under the facility include, among other things, payment defaults, covenant defaults, inaccuracy of representations and warranties, cross defaults with certain other indebtedness, bankruptcy and insolvency events and events that have a material adverse effect (as defined in the facility). Upon a change of control of the Company, lenders whose commitments aggregate more than two-thirds of the total commitments under the facility may terminate the commitments and declare all outstanding obligations to be due and payable.
The Company had several uncommitted, unsecured bank lines of credit aggregating $76.8 million at December 31, 2012. There are no financial covenants or cross default provisions under these lines of credit with which the Company must comply. At December 31, 2012, the Company had no outstanding borrowings under these lines of credit. The Company also had available credit lines related to corporate credit cards totaling $30.2 million as of December 31, 2012. The outstanding borrowings under these credit lines are recorded in other current liabilities. There are no financial covenants or cross default provisions under these credit lines.
|
Note 9 — Commitments and Contingencies
Operating Leases
The Company leases facilities under operating leases, certain of which require it to pay property taxes, insurance and maintenance costs. Operating leases for facilities are generally renewable at the Company’s option and usually include escalation clauses linked to inflation. Future minimum annual rentals under non-cancelable operating leases at December 31, 2012 amounted to $102.4 million. In the nine months ended December 31, 2012, the Company recognized additional rent expense of $3.4 million, representing the fair value of future rent obligations on its former Americas headquarters, which are no longer used by the Company.
In connection with its leased facilities, the Company has recognized a liability for asset retirement obligations representing the present value of estimated remediation costs to be incurred at lease expiration. The following table describes changes to the Company’s asset retirement obligation liability for the three and nine months ended December 31, 2012 and 2011 (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Asset retirement obligations, beginning of period |
|
$ |
1,870 |
|
$ |
1,679 |
|
$ |
1,918 |
|
$ |
1,636 |
|
Liabilities incurred |
|
63 |
|
27 |
|
63 |
|
65 |
| ||||
Liabilities settled |
|
(200 |
) |
(27 |
) |
(200 |
) |
(53 |
) | ||||
Accretion expense |
|
5 |
|
17 |
|
21 |
|
56 |
| ||||
Foreign currency translation |
|
32 |
|
(25 |
) |
(32 |
) |
(33 |
) | ||||
Asset retirement obligations, end of period |
|
$ |
1,770 |
|
$ |
1,671 |
|
$ |
1,770 |
|
$ |
1,671 |
|
Product Warranties
Certain of the Company’s products are covered by warranty to be free from defects in material and workmanship for periods ranging from one year to five years. At the time of sale, the Company accrues a warranty liability for estimated costs to provide products, parts or services to repair or replace products in satisfaction of the warranty obligation. The Company’s estimate of costs to fulfill its warranty obligations is based on historical experience and expectations of future conditions. When the Company experiences changes in warranty claim activity or costs associated with fulfilling those claims, the warranty liability is adjusted accordingly. Changes in the Company’s warranty liability for the three and nine months ended December 31, 2012 and 2011 were as follows (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Warranty liability, beginning of period |
|
$ |
4,243 |
|
$ |
4,832 |
|
$ |
5,184 |
|
$ |
4,970 |
|
Provision for warranties issued during the period |
|
5,251 |
|
5,218 |
|
13,942 |
|
14,630 |
| ||||
Settlements made during the period |
|
(5,258 |
) |
(4,687 |
) |
(14,890 |
) |
(14,237 |
) | ||||
Less: Amount classified as Liabilities Held for Sale |
|
(839 |
) |
— |
|
(839 |
) |
— |
| ||||
Warranty liability, end of period |
|
$ |
3,397 |
|
$ |
5,363 |
|
$ |
3,397 |
|
$ |
5,363 |
|
During the third quarter of fiscal year 2013, the Company determined that the warranty provision and settlement amounts previously reported for the first and second quarter of fiscal year 2013 were not properly stated. The table below presents revised amounts along with amounts previously reported in its Form 10-Q for the first and second quarter of fiscal year 2013. These revisions have no impact on the previously reported consolidated statements of operations, consolidated balance sheet, or other consolidated financial statements.
|
|
Three months ended |
|
Three months ended |
| ||||||||
|
|
June 30, 2012 |
|
September 30, 2012 |
| ||||||||
|
|
As Reported |
|
As Revised |
|
As Reported |
|
As Revised |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Warranty liability, beginning of period |
|
$ |
5,184 |
|
$ |
5,184 |
|
$ |
4,821 |
|
$ |
4,821 |
|
Provision for warranties issued during the period |
|
1,632 |
|
4,575 |
|
(215 |
) |
4,116 |
| ||||
Settlements made during the period |
|
(1,995 |
) |
(4,938 |
) |
(363 |
) |
(4,694 |
) | ||||
Warranty liability, end of period |
|
$ |
4,821 |
|
$ |
4,821 |
|
$ |
4,243 |
|
$ |
4,243 |
|
Purchase Commitments
At December 31, 2012, the Company had the following outstanding purchase commitments (in thousands):
|
|
December 31, 2012 |
| |
|
|
|
| |
Inventory purchases |
|
$ |
131,990 |
|
Operating expenses |
|
63,986 |
| |
Capital expenditures |
|
18,608 |
| |
Total purchase commitments |
|
$ |
214,584 |
|
Commitments for inventory purchases are made in the normal course of business to original design manufacturers, contract manufacturers and other suppliers and are expected to be fulfilled by March 2013. Operating expense commitments are for consulting services, marketing arrangements, advertising, outsourced customer services, information technology maintenance and support services, and other services. Fixed purchase commitments for capital expenditures primarily related to commitments for computer hardware and leasehold improvements. Although open purchase orders are considered enforceable and legally binding, the terms generally allow the Company the option to reschedule and adjust its requirements based on the business needs prior to delivery of goods or performance of services.
Guarantees
Logitech International S.A., the parent holding company, has guaranteed payment of the purchase obligations of various subsidiaries from certain component suppliers. These guarantees generally have an unlimited term. The maximum potential future payment under the guarantee arrangements is limited to $36.0 million. At December 31, 2012, there were no purchase obligations outstanding for which the parent holding company was required to guarantee payment.
Logitech Europe S.A., a subsidiary of the parent holding company, has guaranteed the purchase obligations of another Logitech subsidiary under three guarantee agreements. Two of these guarantees do not specify a maximum amount. The remaining guarantee has a total limit of $7.0 million. As of December 31, 2012, $0.1 million of guaranteed purchase obligations were outstanding under these guarantees. Logitech Europe S.A. has also guaranteed payment of the purchase obligations of a third-party contract manufacturer under three guarantee agreements. The maximum amount of these guarantees was $5.3 million as of December 31, 2012. As of December 31, 2012, $0.6 million of guaranteed purchase obligations were outstanding under these agreements.
Logitech International S.A. and Logitech Europe S.A. have guaranteed certain contingent liabilities of various subsidiaries related to transactions occurring in the normal course of business. The maximum amount of the guarantees was $36.4 million as of December 31, 2012. As of December 31, 2012, $9.9 million of guaranteed liabilities were subject to these guarantees.
Indemnifications
Logitech indemnifies certain of its suppliers and customers for losses arising from matters such as intellectual property disputes and product safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances, includes indemnification for damages and expenses, including reasonable attorneys’ fees. No amounts have been accrued for indemnification provisions at December 31, 2012. The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under its indemnification arrangements.
Logitech also indemnifies its current and former directors and certain of its current and former officers. Certain costs incurred for providing such indemnification may be recoverable under various insurance policies. Logitech is unable to reasonably estimate the maximum amount that could be payable under these arrangements because these exposures are not capped, the obligations are conditional in nature, and the facts and circumstances involved in any situation that might arise are variable.
Legal Proceedings
From time to time the Company is involved in claims and legal proceedings which arise in the ordinary course of its business. The Company is currently subject to several such claims and a small number of legal proceedings. The Company believes that these matters lack merit and intends to vigorously defend against them. Based on currently available information, the Company does not believe that resolution of pending matters will have a material adverse effect on its financial condition, cash flows or results of operations. However, litigation is subject to inherent uncertainties, and there can be no assurances that the Company’s defenses will be successful or that any such lawsuit or claim would not have a material adverse impact on the Company’s business, financial condition, cash flows and results of operations in a particular period. Any claims or proceedings against us, whether meritorious or not, can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors. Any failure to obtain necessary license or other rights, or litigation arising out of intellectual property claims, could adversely affect the Company’s business.
|
Note 11 — Segment Information
Net sales by product family, excluding intercompany transactions, were as follows (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 (*) |
|
2012 |
|
2011 (*) |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Peripherals |
|
|
|
|
|
|
|
|
| ||||
Retail - Pointing Devices |
|
$ |
153,921 |
|
$ |
171,920 |
|
$ |
392,274 |
|
$ |
427,031 |
|
Retail - PC Keyboards & Desktops |
|
110,671 |
|
117,507 |
|
302,299 |
|
302,840 |
| ||||
Retail - Tablet Accessories |
|
39,398 |
|
17,976 |
|
89,021 |
|
36,565 |
| ||||
Retail - Audio - PC |
|
75,366 |
|
92,766 |
|
214,158 |
|
238,932 |
| ||||
Retail - Audio - Wearables & Wireless |
|
23,577 |
|
23,233 |
|
57,284 |
|
39,071 |
| ||||
Retail - Video |
|
51,664 |
|
58,343 |
|
138,276 |
|
166,370 |
| ||||
Retail - PC Gaming |
|
45,111 |
|
56,177 |
|
118,567 |
|
129,839 |
| ||||
Retail - Remotes |
|
30,094 |
|
39,706 |
|
60,260 |
|
74,105 |
| ||||
Retail - Other |
|
12,586 |
|
53,245 |
|
41,829 |
|
112,632 |
| ||||
OEM |
|
35,300 |
|
45,527 |
|
108,693 |
|
144,966 |
| ||||
Total Peripherals |
|
577,688 |
|
676,400 |
|
1,522,661 |
|
1,672,351 |
| ||||
Video Conferencing |
|
36,812 |
|
38,196 |
|
108,136 |
|
111,890 |
| ||||
Total net sales |
|
$ |
614,500 |
|
$ |
714,596 |
|
$ |
1,630,797 |
|
$ |
1,784,241 |
|
(*)In the third quarter of fiscal year 2013, the Company changed the product category classification for a number of its retail products in an effort to help investors more clearly track the progress of its various product initiatives. Products within the retail product categories as presented in the three and nine months ended December 31, 2011 have been reclassified to conform to the fiscal year 2013 presentation, with no impact on previously reported total net retail sales.
The Company has two operating segments, peripherals and video conferencing, based on product markets and internal organizational structure. The peripherals segment encompasses the design, manufacturing and marketing of peripherals for PCs (personal computers), tablets and other digital platforms. The video conferencing segment encompasses the design, manufacturing and marketing of LifeSize video conferencing products, infrastructure and services for the enterprise, public sector and other business markets. The Company’s operating segments do not record revenue on sales between segments, as such sales are not material.
Operating performance measures for the peripherals segment and the video conferencing segment are reported separately to Logitech’s Chief Executive Officer, who is considered to be the Company’s chief operating decision maker. These operating performance measures do not include share-based compensation expense and amortization of intangible assets. Share-based compensation expense and amortization of intangible assets are presented in the following financial information by operating segment as “all other.” Assets by operating segment are not presented since the Company does not present such data to the chief operating decision maker. Net sales, operating loss and depreciation and amortization for the Company’s operating segments were as follows (in thousands):
|
|
Three months ended December 31, |
|
Nine months ended December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net sales by operating segment |
|
|
|
|
|
|
|
|
| ||||
Peripherals |
|
$ |
577,688 |
|
$ |
676,400 |
|
$ |
1,522,661 |
|
$ |
1,672,351 |
|
Video Conferencing |
|
36,812 |
|
38,196 |
|
108,136 |
|
111,890 |
| ||||
Total net sales |
|
$ |
614,500 |
|
$ |
714,596 |
|
$ |
1,630,797 |
|
$ |
1,784,241 |
|
|
|
|
|
|
|
|
|
|
| ||||
Operating income (loss) by segment |
|
|
|
|
|
|
|
|
| ||||
Peripherals |
|
$ |
41,915 |
|
$ |
83,949 |
|
$ |
35,219 |
|
$ |
95,702 |
|
Video Conferencing |
|
(211,054 |
) |
(592 |
) |
(213,799 |
) |
(3,873 |
) | ||||
All other |
|
(10,878 |
) |
(13,580 |
) |
(36,572 |
) |
(43,589 |
) | ||||
Total operating income (loss) |
|
$ |
(180,017 |
) |
$ |
69,777 |
|
$ |
(215,152 |
) |
$ |
48,240 |
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization by segment |
|
|
|
|
|
|
|
|
| ||||
Peripherals |
|
$ |
11,878 |
|
$ |
11,980 |
|
$ |
35,932 |
|
$ |
40,194 |
|
Video Conferencing |
|
5,333 |
|
5,281 |
|
15,843 |
|
15,216 |
| ||||
Total depreciation and amortization |
|
$ |
17,211 |
|
$ |
17,261 |
|
$ |
51,775 |
|
$ |
55,410 |
|
Net sales to unaffiliated customers by geographic region were as follows (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Americas |
|
$ |
263,398 |
|
$ |
286,661 |
|
$ |
683,920 |
|
$ |
745,473 |
|
EMEA |
|
233,132 |
|
291,089 |
|
595,188 |
|
642,355 |
| ||||
Asia Pacific |
|
117,970 |
|
136,846 |
|
351,689 |
|
396,413 |
| ||||
Total net sales |
|
$ |
614,500 |
|
$ |
714,596 |
|
$ |
1,630,797 |
|
$ |
1,784,241 |
|
Sales are attributed to countries on the basis of the customers’ locations. The United States represented more than 10% of the Company’s total consolidated net sales for each of the quarters ended December 31, 2012 and 2011. No other single country represented more than 10% of the Company’s total consolidated net sales for the three months ended December 31, 2012 and 2011. One customer group represented 11% and 12% of net sales in each of the quarters ended December 31, 2012 and 2011. The United States represented more than 10% of the Company’s total consolidated net sales for each of the nine months ended December 31, 2012 and 2011. No other single country represented more than 10% of the Company’s total consolidated net sales for the nine months ended December 31, 2012 and 2011. One customer group represented 12% and 13% of net sales in each of the nine month periods ended December 31, 2012 and 2011.
Long-lived assets, primarily fixed assets, by geographic region were as follows (in thousands):
|
|
December 31, 2012 |
|
March 31, 2012 |
| ||
|
|
|
|
|
| ||
Americas |
|
$ |
44,700 |
|
$ |
49,365 |
|
EMEA |
|
8,234 |
|
9,304 |
| ||
Asia Pacific |
|
41,990 |
|
41,576 |
| ||
Total long-lived assets |
|
$ |
94,924 |
|
$ |
100,245 |
|
Long-lived assets in China and the United States each represented more than 10% of the Company’s total consolidated long-lived assets at December 31, 2012 and March 31, 2012.
|
Note 12 — Acquisitions and Divestitures
On July 18, 2011, the Company acquired all of the outstanding shares of Mirial S.r.l., a Milan-based privately-held provider of personal and mobile video conferencing solutions, for a total consideration of $18.8 million (€13.0 million), net of cash acquired of $1.4 million (€1.0 million). In addition, Logitech incurred $0.4 million in transaction costs, which are included in operating expenses in fiscal year 2012. Mirial has been integrated into the video conferencing reporting unit, and expect that its technology will be used to enhance video connection capabilities on a variety of mobile devices and networks.
The acquisition has been accounted for using the purchase method of accounting. Accordingly, the total consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Fair values were determined by Company management based on information available at the date of acquisition. The results of operations of Mirial were included in Logitech’s consolidated financial statements from the date of acquisition, and were not material to the Company’s reported results.
The allocation of total consideration to the assets acquired and liabilities assumed based on the estimated fair value of Mirial were as follows (in thousands):
|
|
July 18, 2011 |
|
Estimated Life |
| |
|
|
|
|
|
| |
Tangible assets acquired |
|
$ |
3,332 |
|
|
|
Intangible assets acquired |
|
|
|
|
| |
Existing technology |
|
4,200 |
|
5 years |
| |
Customer relationships and other |
|
1,600 |
|
3 years |
| |
Trademark/trade name |
|
200 |
|
4 years |
| |
Goodwill |
|
14,068 |
|
— |
| |
|
|
23,400 |
|
|
| |
Liabilities assumed |
|
(1,358 |
) |
|
| |
Deferred tax liability, net |
|
(1,821 |
) |
|
| |
Total consideration |
|
$ |
20,221 |
|
|
|
The existing technology of Mirial relates to the software and architecture which provides the ability to engage in high quality video conferencing on mobile phones, tablets and personal computers. The value of the technology was determined based on the present value of estimated expected future cash flows attributable to the technology. Customer relationships and other relates to the ability to sell existing, in-process, and future versions of the technology to Mirial’s existing customer base, valued based on projected discounted cash flows generated from customers in place. The intangible assets acquired are amortized on a straight-line basis over their estimated useful lives. The goodwill associated with the acquisition is not subject to amortization and is not expected to be deductible for income tax purposes.
|
Note 13 — Restructuring
On April 25, 2012, Logitech announced a restructuring plan to simplify the Company’s organization, to better align costs with its current business, and to free up resources to pursue growth opportunities. A majority of the restructuring activity was completed during the three months ended June 30, 2012. As part of this restructuring plan, the Company reduced its worldwide non-direct-labor workforce by approximately 340 employees. Charges and other costs related to the workforce reduction are presented as restructuring charges in the consolidated statements of operations.
The following table summarizes restructuring related activities during the three and nine months ended December 31, 2012 (in thousands):
|
|
Total |
|
Termination |
|
Lease Exit |
|
Other |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Accrual balance at March 31, 2012 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
| ||||
Charges |
|
31,227 |
|
28,655 |
|
1,472 |
|
1,100 |
| ||||
Cash payments |
|
(5,195 |
) |
(4,766 |
) |
— |
|
(429 |
) | ||||
Foreign exchange |
|
63 |
|
63 |
|
— |
|
— |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Accrual balance at June 30, 2012 |
|
$ |
26,095 |
|
$ |
23,952 |
|
$ |
1,472 |
|
$ |
671 |
|
|
|
|
|
|
|
|
|
|
| ||||
Charges (credits) |
|
(2,671 |
) |
(3,816 |
) |
48 |
|
1,097 |
| ||||
Cash payments |
|
(17,652 |
) |
(16,642 |
) |
(52 |
) |
(958 |
) | ||||
Foreign exchange |
|
14 |
|
— |
|
— |
|
14 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Accrual balance at September 30, 2012 |
|
$ |
5,786 |
|
$ |
3,494 |
|
$ |
1,468 |
|
$ |
824 |
|
|
|
|
|
|
|
|
|
|
| ||||
Charges (credits) |
|
(358 |
) |
(188 |
) |
(182 |
) |
12 |
| ||||
Cash payments |
|
(4,511 |
) |
(2,633 |
) |
(1,104 |
) |
(774 |
) | ||||
Foreign exchange |
|
— |
|
— |
|
— |
|
— |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Accrual balance at December 31, 2012 |
|
$ |
917 |
|
$ |
673 |
|
$ |
182 |
|
$ |
62 |
|
During the three months ended December 31, 2012, the Company incurred a $0.2 million credit related to termination benefits to affected employees due to the further refinement of estimates which were previously accrued during the three months ended June 30, 2012. For the nine months ended December 31, 2012, the Company incurred $24.7 million charge in termination benefits to affected employees under this plan. In addition, the Company incurred legal, consulting, and other costs of $2.2 million as a result of the terminations during the nine months ended December 31, 2012. The Company also incurred a $0.2 million credit and a $1.3 million charge related to lease exit costs associated with the closure of existing facilities during the three and nine months ended December 31, 2012.
During the nine months ended December 31, 2012, charges of approximately $3.0 million related to discontinuance of certain product development efforts are included in cost of goods sold in the consolidated statements of operations. During the second quarter of fiscal year 2013, the Company also incurred $2.2 million from the re-measurement of its Swiss defined benefit pension plan caused by the number of plan participants affected by this restructuring. This amount was not included in restructuring charge since it related to prior services.
Termination benefits were calculated based on regional benefit practices and local statutory requirements. Lease exit costs primarily relate to costs associated with the closure of existing facilities. Other charges primarily consist of legal, consulting and other costs related to employee terminations.
|
Note 1 — Basis of Presentation
The consolidated financial statements include the accounts of Logitech International S.A. and its subsidiaries (“Logitech” or “the Company”). All intercompany balances and transactions have been eliminated. The consolidated financial statements are presented in accordance with U.S. GAAP (accounting principles generally accepted in the United States of America) for interim financial information and therefore do not include all the information required by U.S. GAAP for complete financial statements. They should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2012 included in its Annual Report on Form 10-K.
In the quarter ended June 30, 2012, the Company recorded a reduction in deferred tax assets and a decrease to retained earnings of $6.3 million, related to vested unexercised non-qualified stock options for former employees who terminated in fiscal year 2012 and prior. The Company reviewed this accounting error utilizing SEC Staff Accounting Bulletin No. 99, Materiality, and SEC Staff Accounting Bulletin No. 108, Effects of Prior Year Misstatements on Current Year Financial Statements, and determined the impact of the error to be immaterial to any period presented.
Certain prior period financial statement amounts have been reclassified to conform to the current period presentation with no impact on previously reported net income (loss).
In the opinion of management, these consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the periods presented. Operating results for the three and nine months ended December 31, 2012 are not necessarily indicative of the results that may be expected for the year ending March 31, 2013, or any future periods.
Fiscal Year
The Company’s fiscal year ends on March 31. Interim quarters are thirteen-week periods, each ending on a Friday. For purposes of presentation, the Company has indicated its quarterly periods as ending on the month end.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect reported amounts of assets, liabilities, net sales and expenses, and the disclosure of contingent assets and liabilities. Although these estimates are based on management’s best knowledge of current events and actions that may impact the Company in the future, actual results could differ from those estimates.
|
The following table summarizes share-based compensation expense and related tax benefit recognized for the three and nine months ended December 31, 2012 and 2011 (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cost of goods sold |
|
$ |
704 |
|
$ |
948 |
|
$ |
2,101 |
|
$ |
3,058 |
|
Share-based compensation expense included in gross profit |
|
704 |
|
948 |
|
2,101 |
|
3,058 |
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
| ||||
Marketing and selling |
|
953 |
|
2,380 |
|
5,377 |
|
9,345 |
| ||||
Research and development |
|
2,430 |
|
1,802 |
|
6,018 |
|
5,364 |
| ||||
General and administrative |
|
1,135 |
|
1,797 |
|
5,163 |
|
5,613 |
| ||||
Share-based compensation expense included in operating expenses |
|
4,518 |
|
5,979 |
|
16,558 |
|
20,322 |
| ||||
Total share-based compensation expense |
|
5,222 |
|
6,927 |
|
18,659 |
|
23,380 |
| ||||
Income tax provision (benefit) |
|
(1,043 |
) |
70 |
|
(4,090 |
) |
(4,595 |
) | ||||
Share-based compensation expense, net of income tax |
|
$ |
4,179 |
|
$ |
6,997 |
|
$ |
14,569 |
|
$ |
18,785 |
|
The net periodic benefit cost for defined benefit pension plans and non-retirement post-employment benefit obligations for the three and nine months ended December 31, 2012 and 2011 were as follows (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Service cost |
|
$ |
1,770 |
|
$ |
1,520 |
|
$ |
5,371 |
|
$ |
4,752 |
|
Interest cost |
|
440 |
|
531 |
|
1,351 |
|
1,668 |
| ||||
Expected return on plan assets |
|
(378 |
) |
(277 |
) |
(996 |
) |
(930 |
) | ||||
Amortization of net transition obligation |
|
1 |
|
1 |
|
3 |
|
3 |
| ||||
Amortization of net prior service cost |
|
39 |
|
37 |
|
115 |
|
114 |
| ||||
Recognized net actuarial loss |
|
271 |
|
210 |
|
950 |
|
669 |
| ||||
Settlement cost |
|
— |
|
— |
|
2,254 |
|
— |
| ||||
Net periodic benefit cost |
|
$ |
2,143 |
|
$ |
2,022 |
|
$ |
9,048 |
|
$ |
6,276 |
|
The following table presents the components of certain balance sheet asset amounts as of December 31 and March 31, 2012 (in thousands):
|
|
December 31, 2012 |
|
March 31, 2012 |
| ||
Accounts receivable, net: |
|
|
|
|
| ||
Accounts receivable |
|
$ |
450,376 |
|
$ |
376,917 |
|
Allowance for doubtful accounts |
|
(2,368 |
) |
(2,472 |
) | ||
Allowance for returns |
|
(23,509 |
) |
(24,599 |
) | ||
Allowances for cooperative marketing arrangements |
|
(32,129 |
) |
(24,109 |
) | ||
Allowances for customer incentive programs |
|
(55,488 |
) |
(42,262 |
) | ||
Allowances for pricing programs |
|
(72,293 |
) |
(60,371 |
) | ||
|
|
$ |
264,589 |
|
$ |
223,104 |
|
Inventories: |
|
|
|
|
| ||
Raw materials |
|
$ |
33,408 |
|
$ |
38,613 |
|
Work-in-process |
|
4 |
|
73 |
| ||
Finished goods |
|
244,065 |
|
258,386 |
| ||
|
|
$ |
277,477 |
|
$ |
297,072 |
|
Other current assets: |
|
|
|
|
| ||
Tax and value-added tax refund receivables |
|
$ |
18,292 |
|
$ |
19,360 |
|
Deferred taxes |
|
22,647 |
|
25,587 |
| ||
Prepaid expenses and other |
|
18,869 |
|
21,043 |
| ||
|
|
$ |
59,808 |
|
$ |
65,990 |
|
Property, plant and equipment, net: |
|
|
|
|
| ||
Plant, buildings and improvements |
|
$ |
68,749 |
|
$ |
48,555 |
|
Equipment |
|
162,671 |
|
148,059 |
| ||
Computer equipment |
|
43,989 |
|
40,353 |
| ||
Computer software |
|
79,445 |
|
75,758 |
| ||
|
|
354,854 |
|
312,725 |
| ||
Less: accumulated depreciation |
|
(276,946 |
) |
(249,657 |
) | ||
|
|
77,908 |
|
63,068 |
| ||
Construction-in-progress |
|
8,343 |
|
28,968 |
| ||
Land |
|
2,877 |
|
2,848 |
| ||
|
|
$ |
89,128 |
|
$ |
94,884 |
|
Other assets: |
|
|
|
|
| ||
Deferred taxes |
|
$ |
55,925 |
|
$ |
61,358 |
|
Trading securities |
|
15,135 |
|
14,301 |
| ||
Deposits and other |
|
6,961 |
|
7,374 |
| ||
|
|
$ |
78,021 |
|
$ |
83,033 |
|
The following table presents the components of certain balance sheet liability amounts as of December 31 and March 31, 2012 (in thousands):
|
|
December 31, 2012 |
|
March 31, 2012 |
| ||
Accrued liabilities: |
|
|
|
|
| ||
Accrued personnel expenses |
|
$ |
52,133 |
|
$ |
42,809 |
|
Accrued marketing expenses |
|
11,006 |
|
7,097 |
| ||
Indirect customer incentive programs |
|
33,570 |
|
26,112 |
| ||
Accrued restructuring |
|
917 |
|
— |
| ||
Deferred revenue |
|
21,778 |
|
19,358 |
| ||
Accrued freight and duty |
|
11,624 |
|
11,376 |
| ||
Value-added tax payable |
|
8,659 |
|
7,140 |
| ||
Accrued royalties |
|
4,986 |
|
6,243 |
| ||
Warranty accrual |
|
3,397 |
|
5,184 |
| ||
Non-retirement post-employment benefit obligations |
|
4,490 |
|
4,129 |
| ||
Income taxes payable - current |
|
4,554 |
|
6,047 |
| ||
Other accrued liabilities |
|
47,414 |
|
51,185 |
| ||
|
|
$ |
204,528 |
|
$ |
186,680 |
|
Non-current liabilities: |
|
|
|
|
| ||
Income taxes payable - non-current |
|
$ |
100,358 |
|
$ |
137,319 |
|
Obligation for deferred compensation |
|
15,199 |
|
14,393 |
| ||
Defined benefit pension plan liability |
|
34,435 |
|
39,337 |
| ||
Deferred rent |
|
23,931 |
|
16,042 |
| ||
Other long-term liabilities |
|
12,740 |
|
11,371 |
| ||
|
|
$ |
186,663 |
|
$ |
218,462 |
|
|
|
December 31, 2012 |
| |
|
|
|
| |
Assets held for sale: |
|
|
| |
Inventory |
|
$ |
12,561 |
|
Property, plant and equipment, net |
|
520 |
| |
Goodwill |
|
4,116 |
| |
Other intangible assets, net |
|
500 |
| |
|
|
$ |
17,697 |
|
|
|
|
| |
Liabilities held for sale: |
|
|
| |
Warranty and other liabilities |
|
$ |
2,020 |
|
|
|
$ |
2,020 |
|
The following table presents the changes in the allowance for doubtful accounts during the three and nine months ended December 31, 2012 and 2011 (in thousands):
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Allowance for doubtful accounts, beginning of period |
|
$ |
(2,239 |
) |
$ |
(3,726 |
) |
$ |
(2,472 |
) |
$ |
(4,086 |
) |
Bad debt expense (credit) |
|
(141 |
) |
267 |
|
48 |
|
313 |
| ||||
Write-offs, net |
|
12 |
|
399 |
|
56 |
|
713 |
| ||||
Allowance for doubtful accounts, end of period |
|
$ |
(2,368 |
) |
$ |
(3,060 |
) |
$ |
(2,368 |
) |
$ |
(3,060 |
) |
|
The following table presents the Company’s financial assets and liabilities that were accounted for at fair value, excluding assets related to the Company’s defined benefit pension plans, classified by the level within the fair value hierarchy on a recurring basis (in thousands):
|
|
December 31, 2012 |
|
March 31, 2012 |
| ||||||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
|
$ |
321,999 |
|
$ |
— |
|
$ |
— |
|
$ |
478,370 |
|
$ |
— |
|
$ |
— |
|
Trading investments for deferred compensation plan: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Money market funds |
|
3,319 |
|
— |
|
— |
|
3,383 |
|
— |
|
— |
| ||||||
Mutual funds |
|
11,816 |
|
— |
|
— |
|
10,918 |
|
— |
|
— |
| ||||||
Available-for-sale securities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Collateralized debt obligations |
|
— |
|
— |
|
— |
|
— |
|
— |
|
429 |
| ||||||
Foreign exchange derivative assets |
|
— |
|
518 |
|
— |
|
— |
|
658 |
|
— |
| ||||||
Total assets at fair value |
|
$ |
337,134 |
|
$ |
518 |
|
$ |
— |
|
$ |
492,671 |
|
$ |
658 |
|
$ |
429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Foreign exchange derivative liabilities |
|
$ |
— |
|
$ |
1,088 |
|
$ |
— |
|
$ |
— |
|
$ |
245 |
|
$ |
— |
|
Total liabilities at fair value |
|
$ |
— |
|
$ |
1,088 |
|
$ |
— |
|
$ |
— |
|
$ |
245 |
|
$ |
— |
|
The following table presents the changes in the Company’s Level 3 financial assets for the three and nine months ended December 31, 2012 and 2011 (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Available-for-sale securities, beginning balance |
|
$ |
— |
|
$ |
1,695 |
|
$ |
429 |
|
$ |
1,695 |
|
Proceeds from sales of securities |
|
— |
|
(6,550 |
) |
(917 |
) |
(6,550 |
) | ||||
Realized gain on sales of securities |
|
— |
|
6,050 |
|
831 |
|
6,050 |
| ||||
Reversal of unrealized gains previously recognized in accumulated other comprehensive income |
|
— |
|
— |
|
(343 |
) |
— |
| ||||
Available-for-sale securities, ending balance |
|
$ |
— |
|
$ |
1,195 |
|
$ |
— |
|
$ |
1,195 |
|
The following table presents the fair values of the Company’s derivative instruments and their locations on its consolidated balance sheets as of December 31 and March 31, 2012 (in thousands):
|
|
Asset Derivatives |
|
Liability Derivatives |
| ||||||||||||
|
|
|
|
Fair Value |
|
|
|
Fair Value |
| ||||||||
|
|
|
|
December 31, |
|
March 31, |
|
|
|
December 31, |
|
March 31, |
| ||||
|
|
Location |
|
2012 |
|
2012 |
|
Location |
|
2012 |
|
2012 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Derivatives designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash flow hedges |
|
Other assets |
|
$ |
24 |
|
$ |
250 |
|
Other liabilities |
|
$ |
984 |
|
$ |
— |
|
|
|
|
|
24 |
|
250 |
|
|
|
984 |
|
— |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Derivatives not designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Foreign exchange forward contracts |
|
Other assets |
|
174 |
|
341 |
|
Other liabilities |
|
31 |
|
148 |
| ||||
Foreign exchange swap contracts |
|
Other assets |
|
320 |
|
67 |
|
Other liabilities |
|
73 |
|
97 |
| ||||
|
|
|
|
494 |
|
408 |
|
|
|
104 |
|
245 |
| ||||
|
|
|
|
$ |
518 |
|
$ |
658 |
|
|
|
$ |
1,088 |
|
$ |
245 |
|
The following table presents the amounts of gains and losses on the Company’s derivative instruments for the three months ended December 31, 2012 and 2011 and their locations on its consolidated statements of operations (in thousands):
|
|
Net amount of gain/(loss) |
|
Location of |
|
Amount of gain/(loss) |
|
Location of |
|
Amount of gain/(loss) |
| ||||||||||||
|
|
2012 |
|
2011 |
|
loss into income |
|
2012 |
|
2011 |
|
immediately |
|
2012 |
|
2011 |
| ||||||
Derivatives designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flow hedges |
|
$ |
222 |
|
$ |
(1,411 |
) |
Cost of goods sold |
|
$ |
1,137 |
|
$ |
(1,672 |
) |
Other income/expense |
|
$ |
70 |
|
$ |
21 |
|
|
|
222 |
|
(1,411 |
) |
|
|
1,137 |
|
(1,672 |
) |
|
|
70 |
|
21 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Derivatives not designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Foreign exchange forward contracts |
|
— |
|
— |
|
|
|
— |
|
— |
|
Other income/expense |
|
122 |
|
(1,535 |
) | ||||||
Foreign exchange swap contracts |
|
— |
|
— |
|
|
|
— |
|
— |
|
Other income/expense |
|
744 |
|
227 |
| ||||||
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
866 |
|
(1,308 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
$ |
222 |
|
$ |
(1,411 |
) |
|
|
$ |
1,137 |
|
$ |
(1,672 |
) |
|
|
$ |
936 |
|
$ |
(1,287 |
) |
|
|
Net amount of gain/(loss) |
|
Location of |
|
Amount of gain/(loss) |
|
Location of |
|
Amount of gain/(loss) |
| ||||||||||||
|
|
2012 |
|
2011 |
|
loss into income |
|
2012 |
|
2011 |
|
immediately |
|
2012 |
|
2011 |
| ||||||
Derivatives designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flow hedges |
|
$ |
(2,462 |
) |
$ |
6,489 |
|
Cost of goods sold |
|
$ |
(440 |
) |
$ |
2,345 |
|
Other income/expense |
|
$ |
242 |
|
$ |
(237 |
) |
|
|
(2,462 |
) |
6,489 |
|
|
|
(440 |
) |
2,345 |
|
|
|
242 |
|
(237 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Derivatives not designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Foreign exchange forward contracts |
|
— |
|
— |
|
|
|
— |
|
— |
|
Other income/expense |
|
(715 |
) |
(1,341 |
) | ||||||
Foreign exchange swap contracts |
|
— |
|
— |
|
|
|
— |
|
— |
|
Other income/expense |
|
1,179 |
|
(393 |
) | ||||||
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
464 |
|
(1,734 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
$ |
(2,462 |
) |
$ |
6,489 |
|
|
|
$ |
(440 |
) |
$ |
2,345 |
|
|
|
$ |
706 |
|
$ |
(1,971 |
) |
|
|
|
Peripheral |
|
Video Conferencing |
|
Total |
| |||
Balance at March 31, 2012 |
|
$ |
220,860 |
|
$ |
339,663 |
|
$ |
560,523 |
|
Impairment |
|
|
|
(211,000 |
) |
(211,000 |
) | |||
Foreign currency movements |
|
78 |
|
(172 |
) |
(94 |
) | |||
|
|
$ |
220,938 |
|
$ |
128,491 |
|
$ |
349,429 |
|
Reclassified to Assets Held for Sale: |
|
|
|
|
|
|
| |||
Goodwill - Digital Video Security and Remote Controls |
|
(4,116 |
) |
— |
|
(4,116 |
) | |||
Balance at December 31, 2012 |
|
$ |
216,822 |
|
$ |
128,491 |
|
$ |
345,313 |
|
The Company’s acquired other intangible assets subject to amortization were as follows (in thousands):
|
|
December 31, 2012 |
|
March 31, 2012 |
| ||||||||||||||
|
|
Gross Carrying |
|
Accumulated |
|
Net Carrying |
|
Gross Carrying |
|
Accumulated |
|
Net Carrying |
| ||||||
|
|
Amount |
|
Amortization |
|
Amount |
|
Amount |
|
Amortization |
|
Amount |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Trademark/tradename |
|
$ |
32,085 |
|
$ |
(28,162 |
) |
$ |
3,923 |
|
$ |
32,104 |
|
$ |
(26,095 |
) |
$ |
6,009 |
|
Technology |
|
91,904 |
|
(73,114 |
) |
18,790 |
|
91,954 |
|
(62,548 |
) |
29,406 |
| ||||||
Customer contracts |
|
39,908 |
|
(27,088 |
) |
12,820 |
|
39,926 |
|
(21,823 |
) |
18,103 |
| ||||||
|
|
$ |
163,897 |
|
$ |
(128,364 |
) |
$ |
35,533 |
|
$ |
163,984 |
|
$ |
(110,466 |
) |
$ |
53,518 |
|
Reclassified to Assets Held for Sale: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Trademark/tradename - Digital Video Security |
|
(1,300 |
) |
1,300 |
|
— |
|
— |
|
— |
|
— |
| ||||||
Technology - Digital Video Security |
|
(6,700 |
) |
6,200 |
|
(500 |
) |
— |
|
— |
|
— |
| ||||||
Customer contracts - Digital Video Security |
|
(200 |
) |
200 |
|
— |
|
— |
|
— |
|
— |
| ||||||
|
|
$ |
155,697 |
|
$ |
(120,664 |
) |
$ |
35,033 |
|
$ |
163,984 |
|
$ |
(110,466 |
) |
$ |
53,518 |
|
|
The following table describes changes to the Company’s asset retirement obligation liability for the three and nine months ended December 31, 2012 and 2011 (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Asset retirement obligations, beginning of period |
|
$ |
1,870 |
|
$ |
1,679 |
|
$ |
1,918 |
|
$ |
1,636 |
|
Liabilities incurred |
|
63 |
|
27 |
|
63 |
|
65 |
| ||||
Liabilities settled |
|
(200 |
) |
(27 |
) |
(200 |
) |
(53 |
) | ||||
Accretion expense |
|
5 |
|
17 |
|
21 |
|
56 |
| ||||
Foreign currency translation |
|
32 |
|
(25 |
) |
(32 |
) |
(33 |
) | ||||
Asset retirement obligations, end of period |
|
$ |
1,770 |
|
$ |
1,671 |
|
$ |
1,770 |
|
$ |
1,671 |
|
Changes in the Company’s warranty liability for the three and nine months ended December 31, 2012 and 2011 were as follows (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Warranty liability, beginning of period |
|
$ |
4,243 |
|
$ |
4,832 |
|
$ |
5,184 |
|
$ |
4,970 |
|
Provision for warranties issued during the period |
|
5,251 |
|
5,218 |
|
13,942 |
|
14,630 |
| ||||
Settlements made during the period |
|
(5,258 |
) |
(4,687 |
) |
(14,890 |
) |
(14,237 |
) | ||||
Less: Amount classified as Liabilities Held for Sale |
|
(839 |
) |
— |
|
(839 |
) |
— |
| ||||
Warranty liability, end of period |
|
$ |
3,397 |
|
$ |
5,363 |
|
$ |
3,397 |
|
$ |
5,363 |
|
|
|
Three months ended |
|
Three months ended |
| ||||||||
|
|
June 30, 2012 |
|
September 30, 2012 |
| ||||||||
|
|
As Reported |
|
As Revised |
|
As Reported |
|
As Revised |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Warranty liability, beginning of period |
|
$ |
5,184 |
|
$ |
5,184 |
|
$ |
4,821 |
|
$ |
4,821 |
|
Provision for warranties issued during the period |
|
1,632 |
|
4,575 |
|
(215 |
) |
4,116 |
| ||||
Settlements made during the period |
|
(1,995 |
) |
(4,938 |
) |
(363 |
) |
(4,694 |
) | ||||
Warranty liability, end of period |
|
$ |
4,821 |
|
$ |
4,821 |
|
$ |
4,243 |
|
$ |
4,243 |
|
At December 31, 2012, the Company had the following outstanding purchase commitments (in thousands):
|
|
December 31, 2012 |
| |
|
|
|
| |
Inventory purchases |
|
$ |
131,990 |
|
Operating expenses |
|
63,986 |
| |
Capital expenditures |
|
18,608 |
| |
Total purchase commitments |
|
$ |
214,584 |
|
|
Net sales by product family, excluding intercompany transactions, were as follows (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 (*) |
|
2012 |
|
2011 (*) |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Peripherals |
|
|
|
|
|
|
|
|
| ||||
Retail - Pointing Devices |
|
$ |
153,921 |
|
$ |
171,920 |
|
$ |
392,274 |
|
$ |
427,031 |
|
Retail - PC Keyboards & Desktops |
|
110,671 |
|
117,507 |
|
302,299 |
|
302,840 |
| ||||
Retail - Tablet Accessories |
|
39,398 |
|
17,976 |
|
89,021 |
|
36,565 |
| ||||
Retail - Audio - PC |
|
75,366 |
|
92,766 |
|
214,158 |
|
238,932 |
| ||||
Retail - Audio - Wearables & Wireless |
|
23,577 |
|
23,233 |
|
57,284 |
|
39,071 |
| ||||
Retail - Video |
|
51,664 |
|
58,343 |
|
138,276 |
|
166,370 |
| ||||
Retail - PC Gaming |
|
45,111 |
|
56,177 |
|
118,567 |
|
129,839 |
| ||||
Retail - Remotes |
|
30,094 |
|
39,706 |
|
60,260 |
|
74,105 |
| ||||
Retail - Other |
|
12,586 |
|
53,245 |
|
41,829 |
|
112,632 |
| ||||
OEM |
|
35,300 |
|
45,527 |
|
108,693 |
|
144,966 |
| ||||
Total Peripherals |
|
577,688 |
|
676,400 |
|
1,522,661 |
|
1,672,351 |
| ||||
Video Conferencing |
|
36,812 |
|
38,196 |
|
108,136 |
|
111,890 |
| ||||
Total net sales |
|
$ |
614,500 |
|
$ |
714,596 |
|
$ |
1,630,797 |
|
$ |
1,784,241 |
|
(*)In the third quarter of fiscal year 2013, the Company changed the product category classification for a number of its retail products in an effort to help investors more clearly track the progress of its various product initiatives. Products within the retail product categories as presented in the three and nine months ended December 31, 2011 have been reclassified to conform to the fiscal year 2013 presentation, with no impact on previously reported total net retail sales.
Net sales, operating loss and depreciation and amortization for the Company’s operating segments were as follows (in thousands):
|
|
Three months ended December 31, |
|
Nine months ended December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net sales by operating segment |
|
|
|
|
|
|
|
|
| ||||
Peripherals |
|
$ |
577,688 |
|
$ |
676,400 |
|
$ |
1,522,661 |
|
$ |
1,672,351 |
|
Video Conferencing |
|
36,812 |
|
38,196 |
|
108,136 |
|
111,890 |
| ||||
Total net sales |
|
$ |
614,500 |
|
$ |
714,596 |
|
$ |
1,630,797 |
|
$ |
1,784,241 |
|
|
|
|
|
|
|
|
|
|
| ||||
Operating income (loss) by segment |
|
|
|
|
|
|
|
|
| ||||
Peripherals |
|
$ |
41,915 |
|
$ |
83,949 |
|
$ |
35,219 |
|
$ |
95,702 |
|
Video Conferencing |
|
(211,054 |
) |
(592 |
) |
(213,799 |
) |
(3,873 |
) | ||||
All other |
|
(10,878 |
) |
(13,580 |
) |
(36,572 |
) |
(43,589 |
) | ||||
Total operating income (loss) |
|
$ |
(180,017 |
) |
$ |
69,777 |
|
$ |
(215,152 |
) |
$ |
48,240 |
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization by segment |
|
|
|
|
|
|
|
|
| ||||
Peripherals |
|
$ |
11,878 |
|
$ |
11,980 |
|
$ |
35,932 |
|
$ |
40,194 |
|
Video Conferencing |
|
5,333 |
|
5,281 |
|
15,843 |
|
15,216 |
| ||||
Total depreciation and amortization |
|
$ |
17,211 |
|
$ |
17,261 |
|
$ |
51,775 |
|
$ |
55,410 |
|
Net sales to unaffiliated customers by geographic region were as follows (in thousands):
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Americas |
|
$ |
263,398 |
|
$ |
286,661 |
|
$ |
683,920 |
|
$ |
745,473 |
|
EMEA |
|
233,132 |
|
291,089 |
|
595,188 |
|
642,355 |
| ||||
Asia Pacific |
|
117,970 |
|
136,846 |
|
351,689 |
|
396,413 |
| ||||
Total net sales |
|
$ |
614,500 |
|
$ |
714,596 |
|
$ |
1,630,797 |
|
$ |
1,784,241 |
|
Long-lived assets, primarily fixed assets, by geographic region were as follows (in thousands):
|
|
December 31, 2012 |
|
March 31, 2012 |
| ||
|
|
|
|
|
| ||
Americas |
|
$ |
44,700 |
|
$ |
49,365 |
|
EMEA |
|
8,234 |
|
9,304 |
| ||
Asia Pacific |
|
41,990 |
|
41,576 |
| ||
Total long-lived assets |
|
$ |
94,924 |
|
$ |
100,245 |
|
|
The allocation of total consideration to the assets acquired and liabilities assumed based on the estimated fair value of Mirial were as follows (in thousands):
|
|
July 18, 2011 |
|
Estimated Life |
| |
|
|
|
|
|
| |
Tangible assets acquired |
|
$ |
3,332 |
|
|
|
Intangible assets acquired |
|
|
|
|
| |
Existing technology |
|
4,200 |
|
5 years |
| |
Customer relationships and other |
|
1,600 |
|
3 years |
| |
Trademark/trade name |
|
200 |
|
4 years |
| |
Goodwill |
|
14,068 |
|
— |
| |
|
|
23,400 |
|
|
| |
Liabilities assumed |
|
(1,358 |
) |
|
| |
Deferred tax liability, net |
|
(1,821 |
) |
|
| |
Total consideration |
|
$ |
20,221 |
|
|
|
|
The following table summarizes restructuring related activities during the three and nine months ended December 31, 2012 (in thousands):
|
|
Total |
|
Termination |
|
Lease Exit |
|
Other |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Accrual balance at March 31, 2012 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
| ||||
Charges |
|
31,227 |
|
28,655 |
|
1,472 |
|
1,100 |
| ||||
Cash payments |
|
(5,195 |
) |
(4,766 |
) |
— |
|
(429 |
) | ||||
Foreign exchange |
|
63 |
|
63 |
|
— |
|
— |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Accrual balance at June 30, 2012 |
|
$ |
26,095 |
|
$ |
23,952 |
|
$ |
1,472 |
|
$ |
671 |
|
|
|
|
|
|
|
|
|
|
| ||||
Charges (credits) |
|
(2,671 |
) |
(3,816 |
) |
48 |
|
1,097 |
| ||||
Cash payments |
|
(17,652 |
) |
(16,642 |
) |
(52 |
) |
(958 |
) | ||||
Foreign exchange |
|
14 |
|
— |
|
— |
|
14 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Accrual balance at September 30, 2012 |
|
$ |
5,786 |
|
$ |
3,494 |
|
$ |
1,468 |
|
$ |
824 |
|
|
|
|
|
|
|
|
|
|
| ||||
Charges (credits) |
|
(358 |
) |
(188 |
) |
(182 |
) |
12 |
| ||||
Cash payments |
|
(4,511 |
) |
(2,633 |
) |
(1,104 |
) |
(774 |
) | ||||
Foreign exchange |
|
— |
|
— |
|
— |
|
— |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Accrual balance at December 31, 2012 |
|
$ |
917 |
|
$ |
673 |
|
$ |
182 |
|
$ |
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|