What changed in this filing

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Item 1. Financial Statements

2020-10-22 compared with 2020-07-23 · 174 added, 84 removed, 383 unchanged (40% of the section changed)

4 unchanged sentences

Three Months Ended

September 30,

Six Months Ended

September 30,

Cost of goods sold

10 unchanged sentences

Interest income

Other income, net

Other income (expense), net

Income before income taxes

Provision for income taxes

Provision for (benefit from) income taxes

Net income per share:

5 unchanged sentences

Three Months Ended

September 30,

Six Months Ended

September 30,

Other comprehensive income (loss):

Currency translation loss, net of taxes

Currency translation gain (loss), net of taxes

Reclassification of currency translation gain included in other income (expense), net

Defined benefit plans:

Net gain (loss) and prior service costs, net of taxes

Amortization included in other income, net

Amortization included in other income (expense), net

Hedging gain (loss):

Deferred hedging loss, net of taxes

Deferred hedging gain (loss), net of taxes

Reclassification of hedging loss included in cost of goods sold

5 unchanged sentences

(In thousands, except per share amounts)

June 30, 2020

September 30, 2020

March 31, 2020

19 unchanged sentences

Registered shares, CHF 0.25 par value:

Issued shares — 173,106 at June 30 and March 31, 2020

Additional shares that may be issued out of conditional capitals — 50,000 at June 30 and March 31, 2020

Additional shares that may be issued out of authorized capitals — 34,621 at June 30 and March 31, 2020

Issued shares — 173,106 at September 30 and March 31, 2020

Additional shares that may be issued out of conditional capitals — 50,000 at September 30 and March 31, 2020

Additional shares that may be issued out of authorized capital — 17,311 at September 30 and 34,621 at March 31, 2020

Additional paid-in capital

Shares in treasury, at cost — 4,689 at June 30, 2020 and 6,210 at March 31, 2020

Shares in treasury, at cost — 4,357 at September 30, 2020 and 6,210 at March 31, 2020

Retained earnings

6 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

September 30,

Cash flows from operating activities:

1 unchanged sentence

Amortization of intangible assets

Gain on investments

Loss on investments

Share-based compensation expense

9 unchanged sentences

Investment in privately held companies

Acquisitions, net of cash acquired

Purchases of trading investments

2 unchanged sentences

Cash flows from financing activities:

Payment of cash dividends

Purchases of registered shares

13 unchanged sentences

(In thousands)

Three Months ended September 30, 2019

Additional Paid-in Capital

4 unchanged sentences

Retained Earnings

June 30, 2019

Total comprehensive income

Sales of shares upon exercise of stock options and purchase rights

Issuance of shares upon vesting of restricted stock units

Share-based compensation

Cash dividends ($0.74 per share)

September 30, 2019

Six Months ended September 30, 2019

Additional Paid-in Capital

Accumulated Other Comprehensive Loss

Total Shareholders’ Equity

Registered Shares

Treasury Shares

Retained Earnings

March 31, 2019

4 unchanged sentences

Share-based compensation

Cash dividends ($0.74 per share)

September 30, 2019

Three Months ended September 30, 2020

Additional Paid-in Capital

Accumulated Other Comprehensive Loss

Total Shareholders’ Equity

Registered Shares

Treasury Shares

Retained Earnings

June 30, 2020

Total comprehensive income

Purchases of registered shares

Sales of shares upon exercise of stock options and purchase rights

Issuance of shares upon vesting of restricted stock units

Share-based compensation

Cash dividends ($0.87 per share)

September 30, 2020

Six Months ended September 30, 2020

Additional Paid-in Capital

7 unchanged sentences

Cumulative effect of adoption of new accounting standard (Note 1)

Purchases of registered shares

Sales of shares upon exercise of stock options and purchase rights

1 unchanged sentence

Share-based compensation

June 30, 2020

Cash dividends ($0.87 per share)

September 30, 2020

The accompanying notes are an integral part of these condensed consolidated financial statements.

17 unchanged sentences

In the opinion of management, these condensed consolidated financial statements include all adjustments, consisting of only normal and recurring adjustments, necessary and in all material aspects, for a fair statement of the results of operations, comprehensive income, financial position, cash flows and changes in shareholders' equity for the periods presented.

Operating results for the three months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2021, or any future periods.

Operating results for the three and six months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2021, or any future periods.

Changes in Significant Accounting Policies

Other than the recent accounting pronouncements adopted and discussed below under Recent Accounting Pronouncements Adopted and Summary of Significant Accounting Policies , there have been no material changes in the Company’s significant accounting policies during the three months ended June 30, 2020 compared with the significant accounting policies described in its Annual Report on Form 10-K for the fiscal year ended March 31, 2020 .

Other than the recent accounting pronouncements adopted and discussed below under Recent Accounting Pronouncements Adopted and Summary of Significant Accounting Policies , there have been no material changes in the Company’s significant accounting policies during the six months ended September 30, 2020 compared with the significant accounting policies described in its Annual Report on Form 10-K for the fiscal year ended March 31, 2020 .

Use of Estimates

5 unchanged sentences

Risks and Uncertainties

We are subject to risks and uncertainties as a result of the novel coronavirus (COVID-19) and the measures taken by many countries in response have contributed to a general slowdown in the global economy and adversely affected, and could in the future continue to adversely affect, the Company's business and operations.

We are subject to risks and uncertainties as a result of the novel coronavirus (COVID-19).

The measures taken by many countries in response have contributed to a general slowdown in the global economy and adversely affected, and could in the future continue to adversely affect, the Company's business and operations.

Capital markets and economies worldwide have also been negatively impacted by COVID-19 and it is still unclear how lasting and deep the economic impacts will be.

During the three months ended June 30, 2020, as well as in the fourth quarter of fiscal year 2020, the COVID-19 pandemic had mixed effects on the Company’s results of operations, and it may continue to have mixed or adverse effects.

While there was high demand and consumption of certain of our products that led to increased sales and operating income during the fourth quarter of fiscal year 2020 and the first quarter of fiscal year 2021, at the same time the Company experienced disruptions to supply chain and logistics services, inventory constraints and increased logistics costs.

The ongoing and full extent of the impact of the COVID-19 pandemic on the Company's business and operational and financial performance and condition is uncertain and will depend on many factors outside the Company's control, including but not limited to the timing, extent, duration and effects of the virus and any of its mutations, the development and availability of effective treatments and vaccines, the imposition of effective public safety and other protective measures, the impact of COVID-19 on the global economy and demand for the Company's products and services.

During the three and six months ended September 30, 2020, as well as in the fourth quarter of fiscal year 2020, the COVID-19 pandemic had mixed effects on the Company’s results of operations, and it may continue to have mixed or adverse effects.

While there was high demand and consumption of certain of our products that led to increased sales and operating income during the fourth quarter of fiscal year 2020 and the three and six months ended September 30, 2020, at the same time the Company experienced disruptions to supply chain and logistics services, inventory constraints and increased logistics costs.

The ongoing and full extent of the impact of the COVID-19 pandemic on the Company's business and operational and financial performance and condition, including the sustainability of its effect on trends positive to the Company, is uncertain and will depend on many factors outside the Company's control, including but not limited to the timing, extent, duration and effects of the virus and any of its mutations, the development and availability of effective treatments and vaccines, the imposition of effective public safety and other protective measures, the impact of COVID-19 on the global economy and demand for the Company's products and services.

Should the COVID-19 pandemic or global economic slowdown not improve or worsen, or if the Company's attempt to mitigate its impact on its operations and costs is not successful, the Company's business, results of operations, financial condition and prospects may be adversely affected.

10 unchanged sentences

The Company adopted this standard effective April 1, 2020.

The adoption of ASU 2018-13 did not have a material impact to the Company's condensed consolidated financial statements.

The adoption of ASU 2018-13 did not have a material impact on the Company's condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefits Plans - General (Subtopic 715-20):

11 unchanged sentences

Note 2 — Net Income Per Share

The following table summarizes the computations of basic and diluted net income per share for the three months ended June 30, 2020 and June 30, 2019 (in thousands, except per share amounts):

The following table summarizes the computations of basic and diluted net income per share for the three and six months ended September 30, 2020 and September 30, 2019 (in thousands, except per share amounts):

Three Months Ended

September 30,

Six Months Ended

September 30,

Shares used in net income per share computation:

3 unchanged sentences

Net income per share:

Share equivalents attributable to outstanding stock options, restricted stock units ("RSUs") and employee share purchase rights (ESPP) totaling 1.4 million and 2.0 million for the three months ended June 30, 2020 and 2019 , respectively, were excluded from the calculation of diluted net income per share because the combined exercise price and average unamortized grant date fair value upon exercise of these options and ESPP or vesting of RSUs were greater than the average market price of the Company's shares during the periods presented herein, and therefore their inclusion would have been anti-dilutive.

Share equivalents attributable to outstanding stock options, restricted stock units ("RSUs") and employee share purchase plan ("ESPP") rights totaling 0.4 million and 1.9 million for the three months ended September 30, 2020 and 2019 , respectively, and 0.4 million and 2.0 million for the six months ended September 30, 2020 and 2019 , respectively, were excluded from the calculation of diluted net income per share because the combined exercise price and average unamortized grant date fair value upon exercise of these options and ESPP rights or vesting of RSUs were greater than the average market price of the Company's shares during the periods presented herein, and therefore their inclusion would have been anti-dilutive.

The majority of performance-based awards were not included because all necessary conditions have not been satisfied by the end of the respective period, and those shares were not issuable if the end of the reporting period were the end of the performance contingency period.

1 unchanged sentence

Employee Share Purchase Plans and Stock Incentive Plans

As of June 30, 2020 , the Company offers the 2006 Employee Share Purchase Plan, as amended and restated (Non-U.S.) (2006 ESPP), the 1996 Employee Share Purchase Plan (U.S.), as amended and restated (1996 ESPP), the 2006 Stock Incentive Plan, as amended and restated (2006 Plan), and the 2012 Stock Inducement Equity Plan (2012 Plan).

The following table summarizes the share-based compensation expense and total income tax benefit recognized for share-based awards for the three months ended June 30, 2020 and 2019 (in thousands):

As of September 30, 2020 , the Company offers the 2006 Employee Share Purchase Plan, as amended and restated (Non-U.S.) (2006 ESPP), the 1996 Employee Share Purchase Plan (U.S.), as amended and restated (1996 ESPP), the 2006 Stock Incentive Plan, as amended and restated (2006 Plan), and the 2012 Stock Inducement Equity Plan (2012 Plan).

The following table summarizes the share-based compensation expense and total income tax benefit recognized for share-based awards for the three and six months ended September 30, 2020 and 2019 (in thousands):

Three Months Ended

September 30,

Six Months Ended

September 30,

Cost of goods sold

6 unchanged sentences

The income tax benefit in the respective period primarily consists of tax benefit related to the share-based compensation expense for the period and direct tax benefit realized, including net excess tax benefits recognized from share-based awards vested or exercised during the period.

As of June 30, 2020 and 2019 , the balance of capitalized share-based compensation included in inventory was $ 0.9 million and $ 0.9 million , respectively.

As of September 30, 2020 and 2019 , the balance of capitalized share-based compensation included in inventory was $ 1.3 million and $ 0.9 million , respectively.

Defined Benefit Plans

2 unchanged sentences

The Company’s practice is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax regulations.

The costs recorded of $ 2.7 million and $ 2.4 million for the three months ended June 30, 2020 and 2019 , respectively, were primarily related to service costs.

The costs recorded of $ 2.7 million and $ 2.4 million for the three months ended September 30, 2020 and 2019 , respectively, and $ 5.4 million and $ 4.8 million for the six months ended September 30, 2020 and 2019 , respectively, were primarily related to service costs.

Note 4 — Income Taxes

3 unchanged sentences

The longstanding tax ruling from the canton of Vaud was applicable through December 31, 2019.

The income tax provision for the three months ended June 30, 2020 was $ 14.0 million based on an effective income tax rate of 16.3 % of pre-tax income, compared to an income tax provision of $ 6.5 million based on an effective income tax rate of 12.6 % of pre-tax income for the three months ended June 30, 2019 .

The change in the effective income tax rate for the three months ended June 30, 2020 , compared to the same period ended June 30, 2019 , was primarily due to the mix of income and losses in the various tax jurisdictions which the Company operates.

The Swiss income tax provision in each period represents the income tax provision at the full statutory income tax rate of 13.63 % .

In the three months ended June 30, 2019 when TRAF was yet to be enacted at the federal and cantonal levels, the transition income tax provision was quantified at the full statutory income tax rate of 13.63 % because at the time the canton of Vaud permitted the application of the longstanding tax ruling only through March 31, 2019.

There were discrete tax benefits of $ 5.0 million and $ 1.0 million from the recognition of excess tax benefits in the United States and reversal of uncertain tax positions from the expiration of statutes of limitations, respectively, in the three-month period ended June 30, 2020 , compared with $ 5.8 million and $ 1.2 million , respectively, in the three-month period ended June 30, 2019 .

As of June 30, 2020 and March 31, 2020 , the total amount of unrecognized tax benefits due to uncertain tax positions was $ 144.2 million and $ 140.8 million , respectively, all of which would affect the effective income tax rate if recognized.

As of June 30, 2020 and March 31, 2020 , the Company had $ 44.3 million and $ 40.8 million , respectively, in non-current income taxes payable including interest and penalties, related to the Company's income tax liability for uncertain tax positions.

The income tax provision for the three months ended September 30, 2020 was $ 56.3 million based on an effective income tax rate of 17.4 % of pre-tax income, compared to an income tax benefit of $ 2.6 million based on an effective income tax rate of ( 3.7 )% of pre-tax income for the three months ended September 30, 2019 .

The income tax provision for the six months ended September 30, 2020 was $ 70.3 million based on an effective income tax rate of 17.2 % of pre-tax income, compared to an income tax provision of $ 3.9 million based on an effective income tax rate of 3.2 % of pre-tax income for the six months ended September 30, 2019.

The change in the effective income tax rate for the three months ended September 30, 2020 , compared to the same period ended September 30, 2019 was primarily due to the mix of income and losses in the various tax jurisdictions in which the Company operates.

The Swiss income tax provision in the three months ended September 30, 2020 represents the income tax provision at the full statutory income tax rate of 13.63 % .

In the same period ended September 30, 2019 when TRAF was yet to be enacted at the federal and cantonal levels, the transition income tax provision reflects the application of the longstanding tax ruling through December 31, 2019 including a retroactive adjustment made to the preceding three-month period ended June 30, 2019 when the transition income tax provision was quantified at the full statutory income tax rate of 13.63 % because at the time the canton of Vaud permitted the application of the longstanding tax ruling only through March 31, 2019.

The retroactive adjustment resulted in a tax benefit of $ 5.9 million in the three months ended September 30, 2019.

In addition, there was a discrete tax benefit of $ 4.0 million from adjusting deferred tax assets and liabilities in Switzerland in the three months ended September 30, 2019.

The change in the effective income tax rate for the six months ended September 30, 2020 , compared to the same period ended September 30, 2019 was primarily due to the mix of income and losses in the various tax jurisdictions in which the Company operates.

The Swiss income tax provision in the six months ended September 30, 2020 represents the income tax provision at the full statutory income tax rate of 13.63 % .

The income tax provision in the six months ended September 30, 2019 reflects the application of the longstanding tax ruling through December 31, 2019 as stated above.

In the six months ended September 30, 2019, there was a discrete tax benefit of $ 1.7 million from adjusting deferred tax assets and liabilities in Switzerland.

Furthermore, there were discrete tax benefits of $ 5.8 million and $ 1.5 million from the recognition of excess tax benefits in the United States and reversal of uncertain tax positions from the expiration of statutes of limitations, respectively, in the six-month period ended September 30, 2020 , compared with $ 6.7 million and $ 1.8 million , respectively, in the six-month period ended September 30, 2019 .

As of September 30, 2020 and March 31, 2020 , the total amount of unrecognized tax benefits due to uncertain tax positions was $ 152.5 million and $ 140.8 million , respectively, all of which would affect the effective income tax rate if recognized.

As of September 30, 2020 and March 31, 2020 , the Company had $ 54.5 million and $ 40.8 million , respectively, in non-current income taxes payable including interest and penalties, related to the Company's income tax liability for uncertain tax positions.

The Company recognizes interest and penalties related to unrecognized tax positions in the income tax provision.

As of June 30, 2020 and March 31, 2020 , the Company had $ 4.7 million and $ 4.5 million , respectively, of accrued interest and penalties related to uncertain tax positions in non-current income taxes payable.

As of September 30, 2020 and March 31, 2020 , the Company had $ 4.8 million and $ 4.5 million , respectively, of accrued interest and penalties related to uncertain tax positions in non-current income taxes payable.

Although the Company has adequately provided for uncertain tax positions, the provisions related to these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved.

4 unchanged sentences

Note 5 — Balance Sheet Components

The following table presents the components of certain balance sheet asset amounts as of June 30 and March 31 , 2020 (in thousands):

June 30, 2020

The following table presents the components of certain balance sheet asset amounts as of September 30 and March 31 , 2020 (in thousands):

September 30, 2020

March 31, 2020

19 unchanged sentences

Investments in privately held companies

The following table presents the components of certain balance sheet liability amounts as of June 30 and March 31, 2020 (in thousands):

June 30, 2020

The following table presents the components of certain balance sheet liability amounts as of September 30 and March 31, 2020 (in thousands):

September 30, 2020

March 31, 2020

4 unchanged sentences

Operating lease liability

Accrued freight and duty

Warranty accrual

Income taxes payable

Contingent consideration

19 unchanged sentences

The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis, excluding assets related to the Company’s defined benefit pension plans, classified by the level within the fair value hierarchy (in thousands):

June 30, 2020

September 30, 2020

March 31, 2020

8 unchanged sentences

included in accrued and other current liabilities

The following table summarizes the change in the fair value of the Company's contingent consideration balance during the three months ended June 30, 2020 (in thousands):

Three Months Ended

The following table summarizes the change in the fair value of the Company's contingent consideration balance during the six months ended September 30, 2020 (in thousands):

Six Months Ended

September 30, 2020

Beginning of the period

1 unchanged sentence

End of the period (1)

(1) As of June 30, 2020 , the earn-out period is complete.

(1) As of June 30, 2020, the earn-out period was completed.

The earn-out payment of $ 29.0 million is based on the actual net sales of Streamlabs services and no longer subject to fair value measurement and was accordingly transferred out of Level 3.

1 unchanged sentence

Investment Securities

The marketable securities for the Company's deferred compensation plan were recorded at a fair value of $ 22.9 million and $ 20.1 million , as of June 30, 2020 and March 31, 2020 , respectively, based on quoted market prices.

The marketable securities for the Company's deferred compensation plan were recorded at a fair value of $ 24.6 million and $ 20.1 million , as of September 30, 2020 and March 31, 2020 , respectively, based on quoted market prices.

Quoted market prices are observable inputs that are classified as Level 1 within the fair value hierarchy.

Unrealized gains (losses) related to trading securities for the three months ended June 30, 2020 and 2019 were not material and are included in other income, net in the Company's condensed consolidated statements of operations.

Unrealized gains (losses) related to trading securities for the three and six months ended September 30, 2020 and 2019 were not material and are included in other income, net in the Company's condensed consolidated statements of operations.

Contingent Consideration for Business Acquisition

2 unchanged sentences

The contingent consideration for business acquisition arising from the Streamlabs Acquisition represents the future potential earn-out payments of $ 29.0 million payable in stock only upon the achievement of certain net sales for the period beginning on January 1, 2020 and ending on June 30, 2020.

The fair value of the earn-out as of the Streamlabs Acquisition Date was $ 0.04 million , and increased to $ 23.3 million as of March 31, 2020, which was determined by using a Black-Scholes-Merton valuation model to calculate the probability of the earn-out threshold being met and times the value of the earn-out payment, and discounted at

the risk-free rate.

The fair value of the earn-out as of the Streamlabs Acquisition Date was $ 0.04 million , and increased to $ 23.3

million as of March 31, 2020, which was determined by using a Black-Scholes-Merton valuation model to calculate the probability of the earn-out threshold being met and times the value of the earn-out payment, and discounted at the risk-free rate.

The valuation included significant assumptions and unobservable inputs such as the projected sales of Streamlabs over the earn-out period, the risk-free rate, and the net sales volatility.

The fair value was increased by $ 5.7 million to $ 29.0 million as of June 30, 2020, based on actual sales.

The stock payout is expected to be $ 29.0 million .

The fair value of the contingent consideration no longer needs to be remeasured at each reporting period, as the earn-out period has been completed.

Equity Method Investments

The Company has certain non-marketable investments included in other assets that are accounted for under the equity method of accounting, with a carrying value of $ 42.3 million and $ 42.1 million as of June 30, 2020 and March 31, 2020 , respectively.

Assets Measured at Fair Value on a Nonrecurring Basis

There was no impairment of these assets during the three and six months ended September 30, 2020 or 2019 .

Other Assets Measured at Fair Value on a Nonrecurring Basis

Financial Assets.

2 unchanged sentences

The carrying value is also adjusted for observable price changes with a same or similar security from the same issuer.

The amount of these investments included in other assets as of June 30, 2020 and March 31, 2020 was $ 3.9 million .

There was no impairment of these assets during the three months ended June 30, 2020 or 2019 .

The amount of these investments included in other assets was immaterial as of September 30, 2020 and March 31, 2020 .

There was no impairment of these assets during the three and six months ended September 30, 2020 or 2019 .

Non-Financial Assets.

Goodwill, intangible assets, property, plant and equipment, and notes receivable, are not required to be measured at fair value on a recurring basis.

Goodwill, intangible assets, and property, plant and equipment, are not required to be measured at fair value on a recurring basis.

However, if certain triggering events occur (or tested at least annually for goodwill) such that a non-financial instrument is required to be evaluated for impairment and an impairment is recorded to reduce the non-financial instrument's carrying value to the fair value as a result of such triggering events, the non-financial assets and liabilities are measured at fair value for the period such triggering events occur.

There was no impairment of these assets during the three months ended June 30, 2020 or 2019 .

There was no impairment of these assets during the three and six months ended September 30, 2020 or 2019 .

Note 7 — Derivative Financial Instruments

Under certain agreements with the respective counterparties to the Company’s derivative contracts, subject to applicable requirements, the Company is allowed to net settle transactions of the same type with a single net amount payable by one party to the other.

However, the Company presents its derivative assets and derivative liabilities on a gross basis on the condensed consolidated balance sheets as of June 30, 2020 and March 31, 2020 .

The fair value of the Company’s derivative instruments was not material as of June 30, 2020 or March 31, 2020 .

However, the Company presents its derivative assets and derivative liabilities on a gross basis on the condensed consolidated balance sheets as of September 30, 2020 and March 31, 2020 .

The fair value of the Company’s derivative instruments was not material as of September 30, 2020 or March 31, 2020 .

The amount of gain (loss) recognized on derivatives not designated as hedging instruments was not material in all periods presented herein.

The following table presents the amounts of gains (losses) on the Company’s derivative instruments designated as hedging instruments and their locations on its condensed consolidated statements of operations and condensed consolidated statements of comprehensive income for the three months ended June 30, 2020 and 2019 (in thousands):

The following table presents the amounts of gains (losses) on the Company’s derivative instruments designated as hedging instruments and their locations on its condensed consolidated statements of operations and condensed consolidated statements of comprehensive income for the three and six months ended September 30, 2020 and 2019 (in thousands):

Three Months Ended

September 30,

Amount of Gain (Loss)

5 unchanged sentences

Cash flow hedges

Six Months Ended

September 30,

Amount of Gain (Loss)

Deferred as a Component of Accumulated

Other Comprehensive Loss

Amount of Loss (Gain)

Reclassified from Accumulated Other Comprehensive Loss to

Costs of Goods Sold

Cash flow hedges

Cash Flow Hedges

The Company enters into cash flow hedge contracts to protect against exchange rate exposure of forecasted inventory purchases.

5 unchanged sentences

In all periods presented herein, there have been no forecasted inventory purchases that were probable to not occur by the end of the originally specified time period or within an additional two-month period of time thereafter.

The notional amounts of foreign currency exchange forward contracts outstanding related to forecasted inventory purchases were $ 93.1 million as of June 30, 2020 and $ 48.0 million as of March 31, 2020 .

The Company had $ 2.9 million of net losses related to its cash flow hedges included in accumulated other comprehensive loss as of June 30, 2020 which will be reclassified into earnings within the next 12 months.

The notional amounts of foreign currency exchange forward contracts outstanding related to forecasted inventory purchases were $ 155.5 million as of September 30, 2020 and $ 48.0 million as of March 31, 2020 .

The Company had $ 2.0 million of net losses related to its cash flow hedges included in accumulated other comprehensive loss as of September 30, 2020 , which will be reclassified into earnings within the next 12 months.

Other Derivatives

3 unchanged sentences

The gains or losses on these contracts are recognized in other income, net in the condensed consolidated statements of operations based on the changes in fair value.

The notional amounts of these contracts outstanding as of June 30, 2020 and March 31, 2020 were $ 73.3 million and $ 64.7 million , respectively.

Open forward and swap contracts outstanding as of June 30, 2020 and March 31, 2020 consisted of contracts in Mexican Pesos, Japanese Yen, Canadian Dollars, Taiwan New Dollars and Australian Dollars to be settled at future dates at pre-determined exchange rates.

The notional amounts of these contracts outstanding as of September 30, 2020 and March 31, 2020 were $ 86.5 million and $ 64.7 million , respectively.

Open forward and swap contracts outstanding as of September 30, 2020 and March 31, 2020 consisted of contracts in Mexican Pesos, Japanese Yen, Canadian Dollars, Taiwan New Dollars and Australian Dollars to be settled at future dates at pre-determined exchange rates.

The fair value of all foreign currency exchange forward and swap contracts is determined based on observable market transactions of spot currency rates and forward rates.

2 unchanged sentences

The Company conducts its impairment analysis of goodwill annually at December 31 and as necessary, if changes in facts and circumstances indicate that it is more likely than not that the fair value of the Company’s reporting unit may be less than its carrying amount.

There have been no events or circumstances during the three months ended June 30, 2020 that have required the Company to perform an interim assessment of goodwill.

The following table summarizes the activities in the Company’s goodwill balance during the three months ended June 30, 2020 (in thousands):

There have been no events or circumstances during the six months ended September 30, 2020 that have required the Company to perform an interim assessment of goodwill.

The following table summarizes the activities in the Company’s goodwill balance during the six months ended September 30, 2020 (in thousands):

As of March 31, 2020

Currency translation

As of June 30, 2020

As of September 30, 2020

The Company's acquired intangible assets subject to amortization were as follows (in thousands):

June 30, 2020

September 30, 2020

March 31, 2020

7 unchanged sentences

Note 9 — Financing Arrangements

The Company had several uncommitted, unsecured bank lines of credit aggregating $ 81.9 million as of June 30, 2020 .

The Company had several uncommitted, unsecured bank lines of credit aggregating $ 84.2 million as of September 30, 2020 .

There are no financial covenants under these lines of credit with which the Company must comply.

As of June 30, 2020 , the Company had outstanding bank guarantees of $ 28.5 million under these lines of credit.

There was no borrowing outstanding under these lines of credit as of June 30, 2020 or March 31, 2020 .

As of September 30, 2020 , the Company had outstanding bank guarantees of $ 22.9 million under these lines of credit.

There was no borrowing outstanding under these lines of credit as of September 30, 2020 or March 31, 2020 .

Note 10 — Commitments and Contingencies

Product Warranties

Changes in the Company’s warranty liability for the three months ended June 30, 2020 and 2019 were as follows (in thousands):

Changes in the Company’s warranty liability for the three and six months ended September 30, 2020 and 2019 were as follows (in thousands):

Three Months Ended

September 30,

Six Months Ended

September 30,

Beginning of the period

4 unchanged sentences

The scope of these indemnities varies, but in some instances, includes indemnification for damages and expenses, including reasonable attorneys’ fees.

As of June 30, 2020 , no amounts have been accrued for these indemnification provisions.

As of September 30, 2020 , no amounts have been accrued for these indemnification provisions.

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.

12 unchanged sentences

Share Repurchase Program

In March 2017, the Company's Board of Directors approved the 2017 share buyback program, which authorized the Company to use up to $ 250.0 million to purchase up to 17.3 million shares of its own shares.

This share buyback program expired in April 2020.

The Company did not repurchase any of its registered shares during the three months ended June 30, 2020.

In May 2020, the Company's Board of Directors approved the 2020 share buyback program, which authorized the Company to use up to $ 250.0 million to purchase up to 17.3 million of its own shares.

The new program will, upon implementation, replace the Company’s prior 2017 share buyback program.

The Company's share buyback program is expected to remain in effect for a period of three years from its implementation.

The Company did not repurchase any of its registered shares during April 2020.

In May 2020, the Company's Board of Directors approved the 2020 share buyback program, which authorized the Company to use up to $ 250.0 million to purchase up to 17.3 million of Logitech shares.

The Company's share buyback program is expected to remain in effect for a period of three years .

Shares may be repurchased from time to time on the open market, through block trades or otherwise.

Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors.

As of September 30, 2020 , $ 227.6 million is still available for repurchase under the 2020 buyback program.

During the three and six months ended September 30, 2020 , the Company declared and paid cash dividends of CHF 0.79 (USD equivalent of $ 0.87 ) per share, totaling $ 146.7 million on the Company's outstanding shares.

During the three and six months ended September 30, 2019 , the Company declared and paid cash dividends of CHF 0.73 (USD equivalent of $ 0.74 ) per share, totaling $ 124.2 million on the Company's outstanding shares.

Any future dividends will be subject to approval of the Company's shareholders.

Additional Authorized and Conditional Shares

The Company has reserved conditional capital of 25,000,000 shares for potential issuance on the exercise of rights granted under the Company's employee equity incentive plans and additional conditional capital for financing purposes, representing the issuance of up to 25,000,000 shares to cover any conversion rights under a future convertible bond issuance.

At the 2018 Annual General Meeting, the shareholders of the Company authorized the Board of Directors to issue up to an additional 34,621,324 shares of the Company until September 5, 2020, which authority expired on that date.

At the 2020 Annual General Meeting, the shareholders of the Company authorized the Board of Directors to issue up to an additional 17,310,662 shares of the Company until September 9, 2022.

Accumulated Other Comprehensive Income (Loss)

4 unchanged sentences

Other comprehensive income (loss)

June 30, 2020

September 30, 2020

Note 12 — Segment Information

3 unchanged sentences

These operating performance measures do not include restructuring charges (credits), net, share-based compensation expense, amortization of intangible assets, charges from the purchase accounting effect on inventory, acquisition-related costs or change in fair value of contingent consideration from business acquisition.

Sales by product categories and sales channels, excluding intercompany transactions, for the three months ended June 30, 2020 and 2019 were as follows (in thousands):

Sales by product categories and sales channels, excluding intercompany transactions, for the three and six months ended September 30, 2020 and 2019 were as follows (in thousands):

Three Months Ended

September 30,

Six Months Ended

September 30,

Pointing Devices

5 unchanged sentences

(1) Other category includes products that the Company currently intends to phase out, or has already phased out, because they are no longer strategic to the Company's business.

Sales by geographic region (based on the customers’ locations) for the three months ended June 30, 2020 and 2019 were as follows (in thousands):

Sales by geographic region (based on the customers’ locations) for the three and six months ended September 30, 2020 and 2019 were as follows (in thousands):

Three Months Ended

September 30,

Six Months Ended

September 30,

Sales are attributed to countries on the basis of the customers’ locations.

The United States, Germany, and China each represented more than 10% of the total consolidated sales for each of the periods presented herein.

The United States and Germany each represented 10% or more of the total consolidated sales for each of the periods presented herein.

No other countries represented 10% or more of the Company’s total consolidated sales for the periods presented herein.

Switzerland, the Company’s home domicile, represented 2 % of the Company's total consolidated sales for the three months ended June 30, 2020 and represented 3 % of the Company's total consolidated sales for the three months ended June 30, 2019.

Two customers of the Company each represented more than 10% of the total consolidated sales for each of the periods presented herein.

Switzerland, the Company’s home domicile, represented 3 % and 2 % of the Company's total consolidated sales for the three and six months ended September 30, 2020 , respectively, and represented 4 % and 3 % of the Company's total consolidated sales for the three and six months ended September 30, 2019 , respectively.

Two customers of the Company each represented 10% or more of the total consolidated sales for each of the periods presented herein.

Property, plant and equipment, net by geographic region were as follows (in thousands):

June 30, 2020

September 30, 2020

March 31, 2020

Total property, plant and equipment, net

Property, plant and equipment, net in the United States and China were $ 24.1 million and $ 41.5 million , respectively, as of June 30, 2020 , and $ 26.5 million and $ 36.6 million , respectively, as of March 31, 2020 .

No other countries represented 10% or more of the Company’s total consolidated property, plant and equipment, net as of June 30, 2020 or March 31, 2020 .

Property, plant and equipment, net in Switzerland, the Company’s home domicile, were $ 2.7 million and $ 2.3 million as of June 30, 2020 and March 31, 2020 , respectively.

Property, plant and equipment, net in the United States and China were $ 22.9 million and $ 48.9 million , respectively, as of September 30, 2020 , and $ 26.5 million and $ 36.6 million , respectively, as of March 31, 2020 .

No other countries represented 10% or more of the Company’s total consolidated property, plant and equipment, net as of September 30, 2020 or March 31, 2020 .

Property, plant and equipment, net in Switzerland, the Company’s home domicile, were $ 3.7 million and $ 2.3 million as of September 30, 2020 and March 31, 2020 , respectively.

Note 13 — Subsequent Event

During October 2020, Logitech issued or reserved 397,763 shares out of treasury shares to former security holders of Streamlabs related to the achievement of certain net sales milestones during the earn-out period of contingent consideration in connection with the business acquisition.

The issuances of such shares were deemed to be exempt from registration under the Securities Act, in reliance on Regulation D of the Securities Act as transactions by an issuer not involving a public offering.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements