21 unchanged sentences
The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
−Removed: Over time, controls may become inadequate because of changes in conditions
+Added: Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
+Added: Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Logitech International S.A.
| Fiscal 2023 Form 10-K | 51
−Removed: or deterioration in the degree of compliance with policies or procedures.
−Removed: Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
OTHER INFORMATION
9 unchanged sentences
The new code was posted to the investor relations section of the Company's website.
−Removed: Logitech's code of ethics is available on the Company's website at www.logitech.com, and for no charge, a copy of the Company's code of ethics can be requested via the following address or phone number:
+Added: Logitech's code of ethics is available on the Company's website at www.logitech.com, and for no charge, a copy of the Company's code of ethics can be requested through the following address or phone number:
Investor Relations
31 unchanged sentences
Filing Date Exhibit No.
−Removed: 2.1 *** Stock Purchase Agreement, dated as of July 30, 2018, by and among Blue Microphones Holding Corporation, Riverside Micro-Cap Fund II, L.P.
−Removed: the other stockholders and option holders of Blue Microphones Holding Corporation, Logitech Europe S.A.
−Removed: and Logitech Inc.
−Removed: 10-Q 0-29174 10/25/2018 2.1
−Removed: 2.2 *** Agreement and Plan of Merger, dated as of September 26, 2019, by and among Logitech International S.A., Clip Acquisition Sub, Inc., General Workings Inc., and Fortis Advisors LLC
−Removed: 10-Q 0-29174 10/24/2019 2.1
3.1 Articles of Incorporation of Logitech International S.A., as amended
−Removed: 10-Q 0-29174 10/22/2020 3.1
3.2 Organizational Regulations of Logitech International S.A., as amended
22 unchanged sentences
10-Q 0-29174 11/4/2009 10.2
−Removed: 10.10 ** 2012 Stock Inducement Equity Plan
−Removed: S-8 333-180726 4/13/2012 10.1
10.10 ** Representative form of performance stock option agreement (executives and other employees) under the Logitech International S.A.
7 unchanged sentences
10-K 0-29174 5/26/2017 10.33
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 60
10.13 ** Representative form of performance share unit agreement (executives and other employees) under the Logitech International S.A.
10 unchanged sentences
10-Q 0-29174 7/23/2020 10.1
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 55
10.17 ** Employment Agreement between Logitech Inc.
1 unchanged sentence
10-Q 0-29174 7/23/2020 10.2
+Added: 10.18 ** Employment Agreement between Logitech Inc.
+Added: and Charles Boynton, dated as of February 6, 2023
+Added: 10.19 ** Offer Letter between Logitech Inc, and Charles Boynton, dated January 30, 2023
+Added: 10.20 ** Representative form of restricted stock unit agreement (Leadership Team and other employees) under the Logitech International S.A.
+Added: 2006 Stock Incentive Plan
+Added: 10-Q 0-29174 7/28/2022 10.1
+Added: 10.21 ** Representative form of performance share unit agreement (Group Management Team (executive officers), Leadership Team and other employees) under the Logitech International S.A.
+Added: 2006 Stock Incentive Plan
+Added: 10-Q 0-29174 7/28/2022 10.2
21.1 List of Subsidiaries
14 unchanged sentences
Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we explicitly incorporate it by reference.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 61
** Indicates management compensatory plan, contract or arrangement.
−Removed: *** Confidential treatment has been requested for certain provisions omitted from this exhibit pursuant to Rule 406 promulgated under the Securities Act of 1933, as amended.
−Removed: The omitted information has been filed separately with the Securities and Exchange Commission .
Logitech International S.A.
5 unchanged sentences
President and Chief Executive Officer
−Removed: /s/ NATE OLMSTEAD
−Removed: Nate Olmstead
+Added: /s/ Charles Boynton
+Added: Charles Boynton
Chief Financial Officer
2 unchanged sentences
POWER OF ATTORNEY AND SIGNATURES
−Removed: KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Bracken Darrell and Nate Olmstead, jointly and severally, his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.
+Added: KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Bracken Darrell and Charles Boynton, jointly and severally, his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
4 unchanged sentences
Bracken Darrell
−Removed: President, Chief Executive Officer and Director May 18, 2022
−Removed: /s/ NATE OLMSTEAD
−Removed: Nate Olmstead
+Added: President, Chief Executive Officer and Director (Principal Executive Officer) May 17, 2023
+Added: /s/ Charles Boynton
+Added: Charles Boynton
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) May 17, 2023
5 unchanged sentences
Director May 17, 2023
−Removed: /s/ RIET CADONAU
−Removed: Director May 18, 2022
/s/ Guy Gecht
Director May 17, 2023
−Removed: /s/ NEIL HUNT
+Added: /s/ Christopher Jones
+Added: Christopher Jones
Director May 17, 2023
4 unchanged sentences
Director May 17, 2023
+Added: /s/ Kwok Wang Ng
+Added: Director May 17, 2023
/s/ Michael Polk
3 unchanged sentences
Director May 17, 2023
+Added: /s/ Sascha Zahnd
+Added: Director May 17, 2023
Logitech International S.A.
36 unchanged sentences
A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made
+Added: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
Logitech International S.A.
| Fiscal 2023 Form 10-K | 60
−Removed: only in accordance with authorizations of management and directors of the company;
+Added: with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
6 unchanged sentences
Evaluation of the significant assumptions underlying the breakage rates for certain Customer Programs
−Removed: As discussed in Notes 2 and 8 to the consolidated financial statements, the Company recorded accounts receivable allowances totaling $274.6 million as of March 31, 2022 for various cooperative marketing arrangements and customer incentive and pricing programs (collectively, Customer Programs).
+Added: As discussed in Notes 2 and 8 to the consolidated financial statements, the Company recorded accounts receivable allowances totaling $211.0 million and accrued Customer Program liabilities totaling $206.5 million as of March 31, 2023 for various cooperative marketing arrangements and customer incentive and pricing programs (collectively, Customer Programs).
The Company estimates the percentage of Customer Programs that will not be claimed or will not be earned by customers, which is commonly referred to as “breakage”.
−Removed: Breakage reduces the Company’s accruals for certain Customer Programs and it is applied at the time of sale.
+Added: Breakage reduces the Company’s allowances and accruals for certain Customer Programs and it is applied at the time of sale.
The Company uses judgment in assessing the period in which claims are expected to be submitted and the relevance of historical claim experience.
12 unchanged sentences
The Company records these accruals as a reduction of revenue at the time of sale.
−Removed: The Company estimated these accruals based on historical data or future commitments that are planned and controlled by the Company.
−Removed: The Company uses judgment in analyzing historical trends, inventories owned by and located at the customers, products sold by the direct customers to end customers or resellers, known product quality issues, negotiated terms, and other relevant customer and product information, such as stage of product life-cycle, which are expected to experience unusually high discounting.
−Removed: We identified the assessment of the accruals for certain Customer Programs as a critical audit matter.
−Removed: Historical experience being predictive of Customer Programs’ earned amounts is the significant assumption used to estimate
+Added: For certain of these accruals, the Company estimated the amounts based on historical data or future commitments that are planned and controlled by the Company.
+Added: The Company uses judgment in analyzing historical trends, inventories owned by and located at the customers, products sold by the direct customers to end customers or resellers, known product quality issues, negotiated terms, and
Logitech International S.A.
| Fiscal 2023 Form 10-K | 61
−Removed: the accruals for Customer Programs.
+Added: other relevant customer and product information, such as stage of product life-cycle, which are expected to experience unusually high discounting.
+Added: We identified the assessment of the accruals for certain Customer Programs as a critical audit matter.
+Added: Historical experience being predictive of Customer Programs’ earned amounts is the significant assumption used to estimate the accruals for Customer Programs.
Due to the inherent uncertainties related to the relevance of the predictive historical experience to the determination of the estimate, the testing required a high degree of auditor judgment.
32 unchanged sentences
Income before income taxes 463,522 775,818 1,148,120
−Removed: Provision for (benefit from) income taxes 131,305 200,863 ( 125,397 )
+Added: Provision for income taxes 98,947 131,305 200,863
Net income $ 364,575 $ 644,513 $ 947,257
24 unchanged sentences
Reclassification of hedging loss (gain) included in cost of goods sold ( 8,391 ) ( 8,221 ) 8,043
−Removed: Total other comprehensive income (loss) 4,792 11,745 ( 14,962 )
+Added: Total other comprehensive income 3,846 4,792 11,745
Total comprehensive income $ 368,421 $ 649,305 $ 959,002
31 unchanged sentences
Issued shares — 173,106 at March 31, 2023 and 2022
−Removed: Additional shares that may be issued out of conditional capitals — 50,000 at March 31, 2022 and 2021
+Added: Additional shares that may be issued out of conditional capital — 50,000 at March 31, 2023 and 2022
Additional shares that may be issued out of authorized capital — 17,311 at March 31, 2023 and 2022
20 unchanged sentences
Impairment of intangible assets — 7,000 —
−Removed: Investment impairment — 2,011 —
Loss on investments 14,073 1,683 5,910
2 unchanged sentences
Change in fair value of contingent consideration for business acquisition — ( 3,509 ) 5,716
−Removed: Gain on sale of investment in a privately held company — — ( 39,767 )
+Added: Pension curtailment gains ( 4,225 ) — —
Other 1,005 1,140 ( 1,784 )
13 unchanged sentences
Proceeds from the sale of short-term investments — 8,260 —
−Removed: Proceeds from sale of property, plant and equipment — — 1,037
Purchases of deferred compensation investments ( 6,702 ) ( 5,058 ) ( 12,336 )
9 unchanged sentences
Effect of exchange rate changes on cash and cash equivalents ( 24,620 ) ( 5,247 ) ( 3,966 )
−Removed: Net increase (decrease) in cash and cash equivalents ( 421,611 ) 1,034,761 111,050
+Added: Net (decrease) increase in cash and cash equivalents ( 179,693 ) ( 421,611 ) 1,034,761
Cash and cash equivalents at beginning of the period 1,328,716 1,750,327 715,566
3 unchanged sentences
Property, plant and equipment purchased during the period and included in period end liability accounts $ 8,593 $ 11,890 $ 16,819
−Removed: Non-cash contingent consideration for acquisition $ 292 $ 28,463 $ —
−Removed: Equity and debt investment in a privately held company $ — $ — $ 42,350
+Added: Non-cash payment for contingent consideration for acquisition $ — $ 292 $ 28,463
Fair value of contingent consideration in accrued and other liabilities $ 2,151 $ 9,013 $ —
6 unchanged sentences
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
−Removed: (In thousands)
+Added: (In thousands, except per share amounts)
Registered shares Additional
4 unchanged sentences
March 31, 2020 173,106 $ 30,148 $ 75,097 6,210 $ ( 185,896 ) $ 1,690,579 $ ( 120,660 ) $ 1,489,268
+Added: Cumulative effect of adoption of new accounting standard — — — — — ( 553 ) — ( 553 )
Total comprehensive income — — — — — 947,257 11,745 959,002
2 unchanged sentences
Issuance of shares upon vesting of restricted stock units — — ( 53,093 ) ( 1,080 ) 21,011 — — ( 32,082 )
+Added: Issuance of shares from contingent consideration — — 18,847 ( 390 ) 9,616 — — 28,463
Share-based compensation — — 85,538 — — — — 85,538
2 unchanged sentences
March 31, 2021 173,106 $ 30,148 $ 129,519 4,799 $ ( 279,541 ) $ 2,490,578 $ ( 108,915 ) $ 2,261,789
−Removed: Cumulative effect of adoption of new accounting standard — — — — — ( 553 ) — ( 553 )
Total comprehensive income — — — — — 644,513 4,792 649,305
11 unchanged sentences
Issuance of shares upon vesting of restricted stock units — — ( 68,710 ) ( 968 ) 39,547 — — ( 29,163 )
−Removed: Issuance of shares from contingent consideration — — 116 ( 4 ) 176 — — 292
Share-based compensation — — 71,801 — — — — 71,801
8 unchanged sentences
Note 1— The Company
−Removed: Logitech International S.A, together with its consolidated subsidiaries ("Logitech" or the "Company"), designs, manufactures and markets products that help connect people to digital and cloud experiences.
−Removed: Forty years ago, Logitech created products to improve experiences around the personal computer ("PC") platform, and today it is a multi-brand, multi-category company designing products that enable better experiences consuming, sharing and creating any digital content such as computing, gaming, video, and music, whether it is on a computer, mobile device or in the cloud.
−Removed: The Company sells its products to a broad network of domestic and international customers, including direct sales to retailers, e-tailers and enterprise customers, and indirect sales through distributors.
+Added: Logitech International S.A, together with its consolidated subsidiaries ("Logitech" or the "Company"), designs, manufactures and sells products that help businesses thrive and bring people together when working, creating, gaming and streaming.
+Added: The Company sells its products to a broad network of international customers, including direct sales to retailers, e-tailers and end consumers through the Company's e-commerce platform, and indirect sales to end customers through distributors.
Logitech was founded in Switzerland in 1981 and Logitech International S.A.
20 unchanged sentences
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 materially from those estimates.
−Removed: Risks and Uncert ainties
−Removed: The Company is subject to risks and uncertainties as a result of the coronavirus ("COVID-19").
−Removed: Capital markets and economies worldwide have been negatively impacted by COVID-19 and it is still unclear how lasting and deep the economic impacts will be.
−Removed: During fiscal year 2022, the COVID-19 pandemic had mixed effects on the Company’s results of operations.
−Removed: While the Company continued to experience increased sales during fiscal year 2022, compared to fiscal year 2021, the Company also experienced supply and demand volatility, as the COVID-19 pandemic and related safety measures and restrictions have evolved differently across the world.
−Removed: In addition, the
+Added: Risks and Uncertainties
+Added: Impacts of Macroeconomic and Geopolitical Conditions on the Company's Business
+Added: In fiscal year 2023, the Company's business was impacted by adverse macroeconomic and geopolitical conditions.
+Added: These conditions included inflation, foreign currency fluctuations, and slowdown of economic activity around the world, in part due to rising interest rates, and lower consumer and enterprise spending.
+Added: In addition, the war in Ukraine resulted in global supply chain, logistics, and inflationary challenges.
+Added: The Company had no revenue in Russia and Ukraine in fiscal year 2023 as it has indefinitely ceased all sales and shipments to Russia and sales in Ukraine have also been halted due to the ongoing military operations on the Ukrainian territory.
Logitech International S.A.
| Fiscal 2023 Form 10-K | 68
−Removed: Company has experienced industry-wide supply chain challenges, including manufacturing, transportation and logistics.
−Removed: 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, remains 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 and variants, the availability and effectiveness of treatments and vaccines, the vaccination progress, the imposition of effective public safety and other protective measures and the public's response to such measures, the impact of COVID-19 on the global economy and demand for the Company's products and services.
−Removed: 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.
−Removed: Reclassifications
−Removed: The Company has reclassified certain prior-year amounts to conform to the current-year presentation.
+Added: The global and regional economic and political conditions adversely affect demand for the Company's products.
+Added: These conditions also had an impact on the Company's suppliers, contract manufacturers, logistics providers, and distributors, causing volatility in cost of materials and shipping and transportation rates, and as a result impacting the pricing of the Company's products.
The functional currency of the Company's operations is primarily the U.S.
23 unchanged sentences
Extended payment terms are sometimes offered to a limited number of customers during the second and third fiscal quarters.
−Removed: The Company does not modify payment terms on existing receivables.
+Added: The Company generally does not modify payment terms on existing receivables.
The Company's contracts with customers do not include significant financing components as the period between the satisfaction of performance obligations and timing of payment are generally within one year.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 75
The transaction price received by the Company from sales to its distributors, retail companies ("retailers"), and authorized resellers is calculated as selling price net of variable consideration which may include product returns and the Company’s payments for Customer Programs related to current period product revenue.
1 unchanged sentence
Customer Programs require management to estimate the percentage of those programs which will not be claimed in the current period or will not be earned by customers, which is commonly referred to as "breakage." Breakage is estimated based on historical claim experience, the period in which customer claims are expected to be submitted, specific terms and conditions with customers and other factors.
−Removed: The Company accounts for breakage as part of variable consideration, subject to constraint, and records the estimated impact in the same period when revenue is recognized at the expected value.
+Added: The Company accounts for breakage as part of variable consideration, subject to constraint, and records the estimated impact in the same
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 69
+Added: period when revenue is recognized at the expected value.
Assessing the period in which claims are expected to be submitted and the relevance of the historical claim experience require significant management judgment to estimate the breakage of Customer Programs in any accounting period.
17 unchanged sentences
However, the Company continues to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 76
The Company regularly evaluates the adequacy of its estimates for Customer Programs and product returns.
3 unchanged sentences
Sales taxes and value-added taxes (“VAT”) collected from customers, if applicable, which are remitted to governmental authorities are not included in revenue, and are reflected as a liability on the consolidated balance sheets.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 70
Shipping and Handling Costs
18 unchanged sentences
Cash Equivalents
−Removed: The Company classifies all highly liquid instruments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents.
+Added: The Company classifies all highly liquid instruments purchased, such as bank time deposits, with an original maturity of three months or less at the date of purchase, to be cash equivalents.
Cash equivalents are carried at cost, which approximates their fair value.
−Removed: All of the Company's bank time deposits have an original maturity of three months or less and are classified as cash equivalents and are recorded at cost, which approximates their fair value.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 77
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable.
−Removed: The Company maintains cash and cash equivalents with various financial institutions to limit exposure with any one financial institution, but is exposed to credit risk in the event of default by financial institutions to the extent that cash balances with individual financial institutions are in excess of amounts that are insured.
+Added: The Company maintains cash and cash equivalents with various creditworthy financial institutions and has a policy to limit exposure with any one financial institution, but is exposed to credit risk in the event of default by financial institutions to the extent that cash balances with individual financial institutions are in excess of amounts that are insured.
+Added: The Company periodically assesses the credit risk associated with these financial institutions.
The Company sells to large distributors, retailers, and e-tailers and, as a result, maintains individually significant receivable balances with such customers.
The Company had the following customers that individually comprised 10% or more of its gross sales:
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 71
Years Ended March 31,
3 unchanged sentences
Customer C (1)
−Removed: (1) The Company's two customers merged during fiscal year 2022 and the percentage for fiscal year 2022 reflects the gross sales to the combined company.
−Removed: Percentages for fiscal year 2021 and 2020 are not disclosed as gross sales to each customer accounted for less than 10% of the Company's gross sales.
+Added: 15 % 14 % N/A (1)
+Added: (1) The Company's two customers merged during fiscal year 2022 and the percentages for fiscal year 2023 and 2022 reflect the gross sales to the combined company.
+Added: The percentage for fiscal year 2021 is not disclosed as gross sales to each customer accounted for less than 10% of the Company's gross sales.
The Company had the following customers that individually comprised 10% or more of its accounts receivable:
2 unchanged sentences
Customer C 15 % 15 %
−Removed: (1) The Company's two customers merged during fiscal year 2022.
−Removed: The percentage as of March 31, 2022 reflects accounts receivable from the combined company.
−Removed: The percentage as of March 31, 2021 reflects accounts receivable from one of them only as the other customer accounted for less than 10% of the Company's accounts receivable.
The Company manages its accounts receivable credit risk through ongoing credit evaluation of its customers' financial conditions.
9 unchanged sentences
Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.
−Removed: At the time of loss
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 78
−Removed: recognition, new cost basis per unit and lower-cost basis for that inventory are established and subsequent changes in facts and circumstances would not result in an increase in the cost basis.
−Removed: As of March 31, 2022 and 2021, the Company also recorded a liability of $ 46.4 million and $ 11.8 million, respectively, arising from firm, non-cancelable, and unhedged inventory purchase commitments in excess of anticipated demand or net realizable value consistent with its valuation of excess and obsolete inventory.
+Added: At the time of loss recognition, new cost basis per unit and lower-cost basis for that inventory are established and subsequent changes in facts and circumstances would not result in an increase in the cost basis.
+Added: The Company recorded liabilities arising from firm, non-cancelable, and unhedged inventory purchase commitments in excess of anticipated demand or net realizable value consistent with its valuation of excess and obsolete inventory.
Such liability is included in accrued and other current liabilities on the consolidated balance sheets.
3 unchanged sentences
The Company capitalizes the cost of software developed for internal use in connection with major projects.
−Removed: Costs incurred during the preliminary and post implementation stage are expensed, whereas direct costs incurred during the application development stage are capitalized.
+Added: Costs incurred during the preliminary project stage and post implementation stage are expensed, whereas direct costs incurred during the application development stage are capitalized.
Depreciation expense is recognized using the straight-line method.
−Removed: Plant and buildings are depreciated over estimated useful lives of twenty-five years , equipment over useful lives from three to five years , internal-use software over useful lives from three to ten years , tooling over useful lives from six months to one year , and leasehold improvements over the lesser of the term of the lease or ten years .
+Added: Plant and buildings are depreciated over estimated useful lives of twenty-five years , equipment over useful lives from three to five years , internal-use
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 72
+Added: software over useful lives from three to ten years , tooling over useful lives from six months to one year , and leasehold improvements over the lesser of the term of the lease or ten years .
When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are relieved from the accounts and the net gain or loss is included in cost of goods sold or operating expenses, depending on the nature of the property and equipment.
3 unchanged sentences
Leases with an initial term of 12 months or less are not recorded on the balance sheet.
−Removed: For the Company's operating leases, the Company accounts for the lease and non-lease components as a single lease component.
+Added: For the Company's operating leases, the Company accounts for the lease component and related non-lease component as a single lease component.
Lease expense is recognized on a straight-line basis over the lease term.
For operating leases, the lease liability is initially measured at the present value of the unpaid lease payments at lease commencement date.
−Removed: As most of the leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate as the discount rate for the lease.
+Added: As most of the leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate as the discount rate for the leases.
The Company's incremental borrowing rate is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms.
Because the Company does not generally borrow in a collateralized basis, it uses its understanding of what its collateralized credit rating would be as an input to deriving an appropriate incremental borrowing rate.
−Removed: The operating lease right-of-use asset includes prepaid lease payments and excludes lease incentives.
+Added: The operating lease ROU assets include prepaid lease payments and exclude lease incentives.
Intangible Assets
2 unchanged sentences
Intangible assets with indefinite lives, which include only goodwill and i n-process research and development ("IPR&D") , are recorded at cost and evaluated at least annually for impairment.
+Added: IPR&D is reclassified as intangible assets with finite lives and amortized over its estimated useful life upon completion of the underlying projects.
Impairment of Long-Lived Assets
The Company reviews long-lived assets, such as property and equipment, and finite-lived intangible assets, for impairment whenever events indicate that the carrying amounts might not be recoverable.
−Removed: Recoverability of property and equipment and finite-lived intangible assets is measured by comparing the projected undiscounted net cash flows associated with those assets to their carrying values.
+Added: Recoverability of long-lived assets is measured by comparing the projected undiscounted net cash flows associated with those assets to their carrying values.
If an asset is considered impaired, it is written down to its fair value, which is determined based on the asset's projected discounted cash flows or appraised value, depending on the nature of the asset.
For purposes of recognition of impairment for assets held for use, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 79
Impairment of Goodwill
5 unchanged sentences
In reviewing goodwill for impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (greater than 50%) that the estimated fair value of a reporting unit is less than its carrying amount.
−Removed: The Company also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test.
+Added: The Company also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 73
+Added: impairment test.
The ultimate outcome of the goodwill impairment review for a reporting unit should be the same whether the Company chooses to perform the qualitative assessment or proceeds directly to the quantitative impairment test.
The Company operates as one reporting unit.
−Removed: For the year ended March 31, 2022, the Company elected to perform a qualitative assessment and determined that an impairment was not more likely than not and no further analysis was required.
+Added: For the year ended March 31, 2023, the Company elected to perform a qualitative assessment and concluded that it was more likely than not that the fair value of its reporting unit exceeds its carrying amount.
The Company provides for income taxes using the asset and liability method, which requires that deferred tax assets and liabilities be recognized for the expected future tax consequences of temporary differences resulting from differing treatment of items for tax and financial reporting purposes, and for operating losses and tax credit carryforwards.
12 unchanged sentences
Earnings, gains and losses on deferred compensation investments are included in other income (expense), net in the consolidated statements of operations.
−Removed: The Company also holds non-marketable investments in equity and other securities that are accounted for under the equity method, which are classified as other assets.
−Removed: In addition, the Company has certain investments without readily determinable fair values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment.
−Removed: The Company elected the measurement alternative to record these investments at cost and to adjust for impairments and observable price changes resulting from transactions with the same issuer within the statement of operations.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 80
+Added: The Company also holds certain non-marketable investments that are accounted for as equity method investments and included in other assets in the consolidated balance sheets.
+Added: In addition, the Company has certain equity investments without readily determinable fair values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment.
+Added: The Company elected the measurement alternative to record these investments at cost and to adjust for impairments and observable price changes resulting from transactions with the same issuer within the statements of operations.
Net Income per Share
1 unchanged sentence
Diluted net income per share is computed using the weighted average outstanding shares and dilutive share equivalents.
−Removed: Dilutive share equivalents consist of share-based awards, including stock options, purchase rights under employee share purchase plan, and restricted stock units ("RSUs").
+Added: Dilutive share equivalents consist of share-based awards, including stock options, purchase rights under employee share purchase plan, and restricted stock units.
The dilutive effect of in-the-money share-based compensation awards is calculated based on the average share price for each fiscal period using the treasury stock method.
2 unchanged sentences
The grant date fair value for stock options and stock purchase rights is estimated using the Black-Scholes-Merton option-pricing valuation model.
−Removed: The grant date fair value of RSUs which vest upon meeting certain market conditions is estimated using the Monte-Carlo simulation method.
−Removed: The grant date fair value of time-based and performance-based RSUs is calculated based on the market price on the date of grant, reduced by estimated dividend yield prior to vesting.
−Removed: With respect to awards with service conditions only, compensation expense is recognized ratably over the respective requisite service periods of the awards.
−Removed: For performance-based RSUs, the Company recognizes the estimated expense using a graded-vesting method over requisite service periods of three years when the performance condition is determined to be probable.
−Removed: The performance period and the service period of the market-based grants of the Company are both approximately three years and the estimated expense is recognized ratably over the service period.
−Removed: Forfeitures are accounted for when they occur.
−Removed: Product Warranty Accrual
−Removed: All 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 three years .
+Added: The grant date fair value of service-based restricted stock units ("RSUs") is calculated based on the market price on the date of grant, reduced by estimated dividend yield
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 74
+Added: prior to vesting.
+Added: The grant date fair value of restricted stock units which vest upon meeting certain market- and performance-based conditions ("PSUs") is estimated using the Monte-Carlo simulation method including the effect of the market condition.
+Added: Stock-based compensation expense is recognized ratably over the respective requisite service periods of the awards and forfeitures are accounted for when they occur.
+Added: For PSUs, the Company recognizes compensation expense using its estimate of probable outcome at the end of the performance period (i.e., the estimated performance against the performance targets).
+Added: The Company periodically adjusts the cumulative stock-based compensation expense recorded when the probable outcome for the PSUs is updated based upon changes in actual and forecasted financial results.
+Added: Product Warranty
+Added: All of the Company's products are covered by standard warranty to be free from defects in material and workmanship for periods ranging from one year to three years .
The warranty period varies by product and by region.
−Removed: The Company’s warranty does not provide a service beyond assuring that the product complies with agreed-upon specifications and is not sold separately.
−Removed: The warranty the Company provides qualifies as an assurance warranty and is not treated as a separate performance obligation.
+Added: The Company’s standard warranty does not provide a service beyond assuring that the product complies with agreed-upon specifications and is not sold separately.
+Added: The standard warranty the Company provides qualifies as an assurance warranty and is not treated as a separate performance obligation.
The Company estimates cost of product warranties at the time the related revenue is recognized based on historical warranty claim rates, historical costs, and knowledge of specific product failures that are outside of the Company's typical experience.
2 unchanged sentences
When the Company experiences changes in warranty claim activity or costs associated with fulfilling those claims, the warranty liability is adjusted accordingly.
−Removed: If actual product failure rates or repair costs differ from estimates, revisions to the estimated warranty liabilities would be required and could materially affect the Company's results of operations.
Comprehensive Income (Loss)
6 unchanged sentences
Shares repurchased are recorded at cost as a reduction of total shareholders' equity.
−Removed: Treasury shares held may be reissued to satisfy the exercise of employee stock options and purchase rights and the vesting of restricted stock units, or may be canceled with shareholder approval.
+Added: Treasury shares held may be reissued to satisfy the exercise of employee stock options and purchase rights, the vesting of restricted stock units, and acquisitions, or may be canceled with shareholder approval.
Treasury shares that are reissued are accounted for using the first-in, first-out basis.
1 unchanged sentence
The Company enters into foreign exchange forward contracts to reduce the short-term effects of currency fluctuations on certain foreign currency receivables or payables and to hedge against exposure to changes in currency exchange rates related to its subsidiaries' forecasted inventory purchases.
−Removed: Gains and losses for changes in the fair value of the effective portion of the Company's forward contracts related to forecasted inventory purchases are deferred as a component of accumulated other comprehensive
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 81
−Removed: income (loss) until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold.
+Added: Gains or losses from changes in the fair value of forward contracts that offset transaction losses or gains on foreign currency receivables or payables are recognized immediately and included in other income (expense), net in the consolidated statements of operations.
+Added: Gains and losses for changes in the fair value of the effective portion of the Company's forward contracts related to forecasted inventory purchases 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 presents the earnings impact from forward points in the same line item that is used to present the earnings impact of the hedged item (i.e.
cost of goods sold) for hedging forecasted inventory purchases.
−Removed: Gains or losses from changes in the fair value of forward contracts that offset transaction losses or gains on foreign currency receivables or payables are recognized immediately and included in other income (expense), net in the consolidated statements of operations.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 75
Restructuring Charges
3 unchanged sentences
Ongoing benefits are expensed when restructuring activities are probable and the benefit amounts are estimable.
−Removed: Other costs primarily consist of legal, consulting, and other costs related to employee terminations are expensed when incurred.
+Added: Other costs primarily consist of legal, consulting, and other costs related to employee terminations, and are expensed when incurred.
Termination benefits are calculated based on regional benefit practices and local statutory requirements.
Recent Accounting Pronouncements Adopted
−Removed: In December 2019, the Financial Accounting Standard Board ("FASB") issued ASU 2019-12, "Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes" ("ASU 2019-12"), which eliminates certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods.
−Removed: This ASU also includes guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group.
−Removed: The Company adopted this standard effective April 1, 2021.
−Removed: The adoption of ASU 2019-12 did not have a material impact on the Company's consolidated financial statements.
−Removed: Recent Accounting Pronouncements To Be Adopted
−Removed: In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805):
+Added: In October 2021, the Financial Accounting Standard Board issued Accounting Standards Update 2021-08, "Business Combinations (Topic 805):
Accounting for Contract Assets and Contract Liabilities from Contracts with Customers " ("ASU 2021-08").
1 unchanged sentence
The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.
−Removed: The Company early adopted the standard effective April 1, 2022 and will apply the standard prospectively to business combinations that occur on or after April 1, 2022.
−Removed: Note 3— Business Acquisitions
−Removed: Fiscal Year 2022 Acquisition
−Removed: On May 19, 2021, the Company made a technology acquisition for a total cash consideration of $ 25.6 million, including $ 10.0 million earn-out payable in cash upon the achievement of three technical development milestones required to be completed as of December 31, 2021, June 30, 2022 and June 30, 2023.
−Removed: The acquisition was accounted for using the acquisition method.
−Removed: The Company retained 6 % of the total consideration for the purpose of ensuring seller's representations and warranties.
−Removed: See Note 9 for more information on the contingent consideration liabilities related to this acquisition.
−Removed: Fiscal Year 2021 Acquisitions
−Removed: On February 17, 2021, the Company acquired all equity interests of Mevo Inc.
−Removed: ("Mevo") for a total upfront cash consideration of $ 33.2 million, which included a working capital adjustment, plus additional contingent consideration of up to $ 17.0 million payable in cash only upon the achievement of certain net revenues for the period beginning on December 26, 2020 and ending on December 31, 2021 (the "Mevo Acquisition").
−Removed: See Note 9 for more information on the contingent consideration liabilities related to this acquisition.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 82
−Removed: The Mevo Acquisition is complementary to the Company’s PC Webcams portfolio and will better enable the Company to offer end-to-end solutions for streaming and content creation.
−Removed: The acquisition is accounted for using the acquisition method.
−Removed: On January 4, 2021, the Company made a technology acquisition for a total cash consideration of $ 11.0 million, including $ 3.0 million earn-out payable in cash upon the achievement of two technical development milestones required to be completed for periods ending December 31, 2021 and March 31, 2022.
−Removed: The acquisition was accounted for using the acquisition method.
−Removed: On February 11, 2021, the Company made a technology acquisition for a total cash consideration of $ 3.5 million, which was accounted for as an asset acquisition.
−Removed: Fiscal Year 2020 Acquisitions
−Removed: Streamlabs Acquisition
−Removed: On October 31, 2019 (the "Streamlabs Acquisition Date"), the Company acquired all equity interests of Streamlabs for a total consideration of $ 105.7 million (as described in the table below), which included a working capital adjustment, plus additional contingent consideration of $ 29.0 million payable in stock only upon the achievement of certain net revenues for the period beginning on January 1, 2020 and ending on June 30, 2020 (the "Streamlabs Acquisition").
−Removed: Streamlabs is a leading provider of software and tools for professional streamers.
−Removed: The Streamlabs Acquisition is complementary to the Company's Gaming portfolio.
−Removed: Streamlabs met the definition of a business, and therefore the acquisition is accounted for using the acquisition method.
−Removed: The fair value of consideration transferred for the Streamlabs Acquisition consists of the following (in thousands):
−Removed: Consideration
−Removed: Purchase price (cash) $ 105,645
−Removed: Fair value of contingent consideration (earn-out) 37
−Removed: Fair value of total consideration transferred $ 105,682
−Removed: The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Streamlabs Acquisition Date, and the value of goodwill resulting from the measurement period adjustments in the three months ending March 31, 2020 (in thousands):
−Removed: Estimated Fair Value
−Removed: Cash and cash equivalents $ 17,014
−Removed: Intangible assets 37,000
−Removed: Other identifiable liabilities assumed, net ( 3,701 )
−Removed: Net identifiable assets acquired $ 50,313
−Removed: Contingent consideration (earn-out) $ ( 37 )
−Removed: Goodwill 55,406
−Removed: Net assets acquired $ 105,682
−Removed: Goodwill related to the acquisition was primarily attributable to opportunities and economies of scale from combining the operations and technologies of Logitech and Streamlabs, and is not deductible for tax purposes.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 83
−Removed: The following table summarizes the estimated fair values and estimated useful lives of the components of identifiable intangible assets acquired as of the Streamlabs Acquisition Date (Dollars in thousands):
−Removed: Fair Value Estimated Useful Life (years)
−Removed: Developed technology $ 21,800 6.0
−Removed: Customer relationships 6,000 2.0
−Removed: Trade name 9,200 8.0
−Removed: Total identifiable intangible assets acquired $ 37,000
−Removed: Intangible assets acquired as a result of the Streamlabs Acquisition are being amortized over their estimated useful lives using the straight-line method of amortization, which materially approximates the distribution of the economic value of the identified intangible assets.
−Removed: Developed technology relates to the software platform which existing Streamlabs services are provided on.
−Removed: The economic useful life was determined based on the technology cycle related to developed technology of the software platform, as well as the cash flows anticipated over the forecasted periods.
−Removed: Customer relationships represent the fair value of future projected revenue that will be derived from sales to existing customers of Streamlabs.
−Removed: The economic useful life was determined based on historical customer turnover rates and industry benchmarks.
−Removed: Trade name relates to the “Streamlabs” trade name.
−Removed: The economic useful life was determined based on the expected life of the trade name and the cash flows anticipated over the forecasted periods.
−Removed: The fair value of developed technology was estimated using the excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows.
−Removed: To reflect the fact that certain other assets contributed to the cash flows generated, the returns for these contributory assets were removed to arrive at estimated cash flows solely attributable to the developed technology, which were discounted at a rate of 25 %.
−Removed: The fair value of trade name was estimated using the relief-from-royalty method, an income approach (Level 3), which estimates the cost savings that accrue to the owner of the intangible assets that would otherwise be payable as royalties or license fees on revenues earned through the use of the asset.
−Removed: A royalty rate is applied to the projected revenues associated with the intangible assets to determine the amount of savings, which is then discounted to determine the fair value.
−Removed: Trade name was valued using royalty rate of 5 % and was discounted at a rate of 25 %.
−Removed: The fair value of customer relationships was estimated primarily using the with and without scenario, a discounted cash flow method (Level 3).
−Removed: Under this method, the Company calculated the present value of the after-tax cash flows expected to be generated by the business with and without the customer relationships using a discount rate of 20 %.
−Removed: The without scenario incorporates lost revenue and lost profits over the period necessary to retain the asset.
−Removed: The Company believes the fair values of acquired intangible assets recorded above represents their fair values and approximates the amounts a market participant would pay for these intangible assets as of the Streamlabs Acquisition Date.
−Removed: The Company included Streamlabs' estimated fair value of assets acquired and liabilities assumed in its consolidated financial statements beginning on the Streamlabs Acquisition Date.
−Removed: The results of operations for Streamlabs subsequent to the Streamlabs Acquisition Date have been included in, but are not material to, the Company's consolidated statements of operations in fiscal year 2020.
−Removed: On October 31, 2019, the Company also made a technology acquisition for a total cash consideration of $ 3.6 million, which was accounted for using the acquisition method.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 84
−Removed: Acquisition-related costs and pro forma results of operations
−Removed: The Company incurred acquisition-related costs of approximately $ 0.8 million, $ 0.6 million and $ 1.5 million, in aggregate, for the years ended March 31, 2022 , 2021 and 2020, respectively.
−Removed: The acquisition-related costs are included in amortization of intangible assets and acquisition-related costs in the consolidated statements of operations.
−Removed: Pro forma results of operations for acquisitions completed in fiscal year 2022, 2021 and 2020 have not been presented because the effects of these acquisitions, individually or in aggregate, are not material to the consolidated statements of operations for each year.
+Added: The Company early adopted the standard effective April 1, 2022 and applied the standard prospectively to business combinations that occurred on or after April 1, 2022.
+Added: The adoption of ASU 2021-08 did not have a material impact on the Company's consolidated financial statements.
Note 3— Net Income Per Share
10 unchanged sentences
Diluted $ 2.23 $ 3.78 $ 5.51
−Removed: Share equivalents attributable to outstanding stock options, RSUs and employee share purchase plans ("ESPP") totaling 2.0 million, 0.1 million, and 1.7 million shares during fiscal years 2022, 2021 and 2020, respectively, were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive.
−Removed: Except for fiscal year 2021, certain performance-based awards in the periods presented were excluded because all necessary conditions had 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 .
−Removed: Note 5— Employee Benefit Plans
−Removed: Employee Share Purchase Plans and Stock Incentive Plans
−Removed: As of March 31, 2022, 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"), and the 2006 Stock Incentive Plan ("2006 Plan") as amended and restated.
−Removed: The 2012 Stock Inducement Equity Plan ("2012 Plan") expired on March 28, 2022.
+Added: Share equivalents attributable to outstanding stock options, RSUs, PSUs and employee share purchase plans ("ESPP") totaling 2.0 million , 2.0 million, and 0.1 million shares during fiscal years 2023, 2022 and 2021, respectively, were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive.
+Added: For fiscal years 2023 and 2022, a small number of performance-based awards were not included in the dilutive net income per share calculation because all necessary conditions had 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.
+Added: Note 4— Employee Stock-Based Compensation
+Added: As of March 31, 2023, the Company offers the 2006 Employee Share Purchase Plan (Non-U.S.), as amended and restated ("2006 ESPP)", the 1996 Employee Share Purchase Plan (U.S.), as amended and restated ("1996 ESPP"), and the 2006 Stock Incentive Plan ("2006 Plan") as amended and restated.
Shares issued to employees as a result of purchases or exercises under these plans are generally issued from shares held in treasury stock.
1 unchanged sentence
| Fiscal 2023 Form 10-K | 76
+Added: Under the 1996 ESPP and 2006 ESPP plans, eligible employees may purchase shares at the lower of 85 % of the fair market value at the beginning or the end of each offering period, which is generally six months .
+Added: Subject to continued participation in these plans, purchase agreements are automatically executed at the end of each offering period.
+Added: An aggregate of 29.0 million shares were reserved for issuance under the 1996 and 2006 ESPP plans.
+Added: As of March 31, 2023, a total o f 3.6 million sha res were available for new awards under these plans.
+Added: The 2006 Plan provides for the grant to eligible employees and non-employee directors of stock options, stock appreciation rights, and restricted stock units.
+Added: Awards under the 2006 Plan may be conditioned on continued employment, the passage of time or the satisfaction of performance and market vesting criteria.
+Added: The 2006 Plan, as amended, has no expiration date.
+Added: On June 29, 2022, the Board authorized 3.3 million additional shares for issuance under the 2006 Plan.
+Added: An aggregate of 33.8 million shares were reserved for issuance under the 2006 Plan.
+Added: As of March 31, 2023, a total of 8.4 million shares were available for new awards under this plan.
+Added: Stock options granted to employees under the 2006 Plan have terms not exceeding ten years and are issued at exercise prices not less than the fair market value on the date of grant.
+Added: Service-based restricted stock units ("RSUs") granted to employees under the 2006 Plan generally vest in four equal annual installments on the grant date anniversary.
+Added: RSUs granted to non-executive board members under the 2006 Plan vest on the grant date anniversary, or if earlier and only if the non-executive board member is not re-elected as a director at such annual general meeting, the date of the next annual general meeting following the grant date.
+Added: Restricted stock units with certain market- and performance-based conditions ("PSUs") granted to employees under the 2006 Plan vest at the end of the three-year performance period upon meeting predetermined financial metrics over three years , with the number of shares to be received upon vesting determined based on weighted average constant currency revenue growth rate and the Company's total shareholder return ("TSR") relative to the performance of companies in the Russell 3000 Index over the same three years period.
The following table summarizes share-based compensation expense and total income tax benefit recognized for fiscal years 2023, 2022 and 2021 (in thousands):
8 unchanged sentences
Total share-based compensation expense, net of income tax benefit $ 61,032 $ 66,492 $ 66,547
−Removed: As of March 31, 2022, 2021 and 2020, the balance of capitalized stock-based compensation included in inventory was $ 1.1 million, $ 1.1 million, and $ 0.9 million, respectively.
−Removed: The following table summarizes total unamortized share-based compensation expense and the remaining period over which such expense is expected to be recognized, on a weighted-average basis by type of grant (in thousands, except number of months):
−Removed: March 31, 2022
−Removed: Expense Remaining
−Removed: ESPP $ 2,341 4
−Removed: Stock Options 19,746 35
−Removed: Time-based RSUs 109,637 24
−Removed: Market-based and performance-based RSUs 36,669 21
−Removed: Total unamortized share-based compensation expense $ 168,393
−Removed: Under the 1996 ESPP and 2006 ESPP plans, eligible employees may purchase shares at the lower of 85 % of the fair market value at the beginning or the end of each offering period, which is generally six months .
−Removed: Subject to continued participation in these plans, purchase agreements are automatically executed at the end of each offering period.
−Removed: An aggregate of 29.0 million shares were reserved for issuance under the 1996 and 2006 ESPP plans.
−Removed: As of March 31, 2022, a total o f 4.1 million sha res were available for new awards under these plans.
−Removed: The 2006 Plan provides for the grant to eligible employees and non-employee directors of stock options, stock appreciation rights, restricted stock and RSUs.
−Removed: Awards under the 2006 Plan may be conditioned on continued employment, the passage of time or the satisfaction of performance and market vesting criteria.
−Removed: The 2006 Plan, as amended, has no expiration date.
−Removed: All stock options under this plan have terms not exceeding ten years and are issued at exercise prices not less than the fair market value on the date of grant.
−Removed: An aggregate of 30.6 million shares were reserved for issuance under the 2006 Plan.
−Removed: As of March 31, 2022, a total of 6.4 million shares were available for new awards under this plan.
−Removed: Time-based RSUs granted to employees under the 2006 Plan generally vest in three to four equal annual installments on the grant date anniversary.
−Removed: Time-based RSUs granted to non-executive board members under the 2006 Plan vest on the grant date anniversary, or if earlier and only if the non-executive board member is not re-elected as a director at such annual general meeting, the date of the next annual general meeting following the grant date.
−Removed: In fiscal years 2022, 2021 and 2020, the Company granted RSUs with both performance and market conditions, which vest at the end of the three-year performance period upon meeting predetermined financial metrics over three years , with the number of shares to be received upon vesting determined based on weighted average constant currency revenue growth rate and the Company's Total Shareholder Return ("TSR") relative to the performance of companies in the Russell 3000 Index for fiscal years 2022 and 2021 and NASDAQ-100 Index for fiscal year 2020 over the same three years period.
−Removed: The Company presents shares granted and vested at 100 percent of the target of the number of stock units that may potentially vest.
−Removed: The aggregate fair value of shares that
+Added: Share-based compensation costs capitalized as part of inventory were $ 5.6 million , $ 5.2 million, and $ 4.3 million for the fiscal year ended March 31, 2023, 2022 and 2021, respectively.
+Added: As of March 31, 2023, there was $ 125.2 million of total future stock-based compensation cost to be recognized over a weighted-average period of 2.4 years.
+Added: The estimates of share-based compensation expense require a number of complex and subjective assumptions including stock price volatility, employee exercise patterns, probability of achievement of the set performance condition, dividend yield, related tax effects and the selection of an appropriate fair value model.
+Added: The grant date fair value of the stock options and ESPP using the Black-Scholes-Merton option-pricing valuation model and the grant date fair value of the PSUs using the Monte-Carlo simulation method are determined with the following assumptions and values:
Logitech International S.A.
| Fiscal 2023 Form 10-K | 77
−Removed: actually vested during the year is based on the actual number of stock units vested during the year based on the achievement of the financial metrics over the performance period.
−Removed: Under the 2012 Plan, stock options and RSUs may be granted to eligible employees to serve as an inducement to enter into employment with the Company.
−Removed: Awards under the 2012 Plan may be conditioned on continued employment, the passage of time or the satisfaction of market stock performance criteria, based on individually written employment offer letter.
−Removed: An aggregate of 1.8 million shares were reserved for issuance under the 2012 Plan, and all of the reserved shares had been issued before the 2012 Plan expired on March 28, 2022.
−Removed: The estimates of share-based compensation expense require a number of complex and subjective assumptions including stock price volatility, employee exercise patterns, probability of achievement of the set performance condition, dividend yield, related tax effects and the selection of an appropriate fair value model.
−Removed: The grant date fair value of the awards using the Black-Scholes-Merton option-pricing valuation model and Monte-Carlo simulation method is determined with the following assumptions and values:
−Removed: Stock Options Employee Stock Purchase Plans
−Removed: Years Ended March 31, Years Ended March 31,
+Added: Stock Options (1)
+Added: Employee Stock Purchase Plans
+Added: Year Ended March 31, Years Ended March 31,
2022 2023 2022 2021
−Removed: Dividend yield 1.18 % * * 1.03 % 1.04 % 1.74 %
+Added: Expected dividend rate 1.18 % 1.78 % 1.03 % 1.04 %
Risk-free interest rate 1.99 % 3.86 % 0.27 % 0.10 %
Expected volatility 34 % 46 % 35 % 47 %
−Removed: Expected life (years) 6.2 * * 0.5 0.5 0.5
+Added: Expected term (years) 6.2 0.5 0.5 0.5
Weighted average grant date fair value per share $ 25.88 $ 16.32 $ 23.55 $ 24.67
−Removed: * Not applicable as no stock options were granted for fiscal year 2021 and 2020.
−Removed: RSUs with Market Conditions Years Ended March 31,
+Added: (1) No stock options were granted for fiscal years 2023 and 2021.
+Added: PSUs Years Ended March 31,
2023 2022 2021
−Removed: Dividend yield 0.78 % 1.24 % 1.76 %
+Added: Expected dividend rate 1.46 % 0.78 % 1.24 %
Risk-free interest rate 2.78 % 0.31 % 0.21 %
Expected volatility 39 % 37 % 31 %
−Removed: Expected life (years) 3.0 3.0 3.0
−Removed: The dividend yield assumption is based on the Company's history and future expectations of dividend payouts.
−Removed: The unvested RSUs or unexercised options are not eligible for these dividends.
−Removed: The expected life is based on the purchase offerings periods expected to remain outstanding for employee stock purchase plan, or the performance period for RSUs with market conditions.
−Removed: The expected life for stock options represents the estimated period of time until option exercise.
−Removed: Since the Company has limited historical stock option exercise experience, the Company used the simplified method in estimating the expected life, which is calculated as the average of the sum of the vesting term and the original contractual term of the stock options.
−Removed: Expected volatility is based on historical volatility using the Company's daily closing prices, or including the volatility of components of the NASDAQ 100 index or the Russell 3000 Index for market-based RSUs, over the expected life.
+Added: Expected term (years) 3.0 3.0 3.0
+Added: The expected dividend rate assumption is based on the Company's history and future expectations of dividend payouts.
+Added: The unvested PSUs or unexercised options are not eligible for these dividends.
+Added: The expected term is based on the purchase offerings periods expected to remain outstanding for employee stock purchase plan or the performance period for PSUs.
+Added: The expected term for stock options represents the estimated period of time until option exercise.
+Added: Since the Company has limited historical stock option exercise experience, the Company used the simplified method in estimating the expected term, which is calculated as the average of the sum of the vesting term and the original contractual term of the stock options.
+Added: Expected volatility is based on historical volatility using the Company's daily closing prices, or including the volatility of components of the Russell 3000 Index for PSUs, over the expected term.
The Company considers the historical price volatility of its shares as most representative of future volatility.
The risk-free interest rate assumptions are based upon the implied yield of U.S.
−Removed: Treasury zero-coupon issues appropriate for the expected life of the Company's share-based awards.
−Removed: For RSUs with performance conditions, the Company estimates the probability and timing of the achievement of the set performance condition at the time of the grant based on the historical financial performance and the financial forecast in the remaining performance period and reassesses the probability in subsequent periods when actual results or new information become available.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 87
+Added: Treasury zero-coupon issues appropriate for the expected term of the Company's share-based awards.
+Added: For PSUs, the Company estimates the probability and timing of the achievement of the set performance condition at the time of the grant based on the historical financial performance and the financial forecast in the remaining performance period and reassesses the probability in subsequent periods when actual results or new information become available.
A summary of the Company's stock option activities under all stock plans for fiscal years 2023, 2022 and 2021 is as follows:
−Removed: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term
−Removed: Aggregate Intrinsic Value
+Added: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value
(In thousands) (Years) (In thousands)
1 unchanged sentence
Exercised ( 1,347 ) $ 68,596
−Removed: Canceled or expired ( 65 )
Outstanding, March 31, 2021 622
1 unchanged sentence
Outstanding, March 31, 2022 1,393 $ 62 8.3 $ 21,830
−Removed: Granted 842 $ 80
Exercised ( 155 ) $ 21 $ 6,482
+Added: Forfeited ( 118 ) $ 80
Outstanding, March 31, 2023 1,120 $ 66 7.6 $ 7,491
Vested and exercisable, March 31, 2023 396 $ 39 5.2 $ 7,491
−Removed: As of March 31, 2022, the exercise price of outstanding options ranged from $ 8 to $ 80 per share option.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 78
The tax benefit realized for the tax deduction from options exercised during fiscal years 2023, 2022 and 2021 was $ 0.1 million, $ 1.2 million and $ 0.6 million, respectively.
−Removed: A summary of the Company's time-based, market-based and performance-based RSU activities for fiscal years 2022, 2021 and 2020 is as follows:
−Removed: Number of Shares Weighted-Average Grant Date Fair Value Weighted-Average Remaining Vesting Period Aggregate
−Removed: (In thousands) (Years) (In thousands)
+Added: A summary of the Company's RSU and PSU activities for fiscal years 2023, 2022 and 2021 is as follows:
+Added: Number of Shares Weighted-Average Grant Date Fair Value Aggregate
+Added: (In thousands) (In thousands)
Outstanding, March 31, 2020 3,951 $ 36
−Removed: Granted—time-based 1,431 $ 38
−Removed: Granted—market and performance-based 365 $ 40
+Added: Granted—RSUs 1,046 $ 60
+Added: Granted—PSUs 303 $ 67
Vested ( 1,444 ) $ 168,816
−Removed: Canceled or expired ( 561 )
+Added: Forfeited ( 213 )
Outstanding, March 31, 2021 3,643 $ 45
−Removed: Granted—time-based 1,046 $ 60
−Removed: Granted—market and performance-based 303 $ 67
+Added: Granted—RSUs 868 $ 103
+Added: Granted—PSUs 203 $ 124
Vested ( 1,463 ) $ 133,977
−Removed: Canceled or expired ( 213 )
+Added: Forfeited ( 205 )
Outstanding, March 31, 2022 3,046 $ 68
−Removed: Granted—time-based 868 $ 103
−Removed: Granted—market and performance-based 203 $ 124
+Added: Granted—RSUs 1,584 $ 53
+Added: Granted—PSUs 407 $ 69
Vested ( 1,143 ) $ 48 $ 85,152
−Removed: Canceled or expired ( 205 ) $ 62
+Added: Forfeited ( 438 ) $ 68
Outstanding, March 31, 2023 3,456 $ 66
−Removed: The RSUs outstanding as of March 31, 2022 above include 0.8 million shares with both market-based and performance-based vesting conditions.
−Removed: The tax benefit realized for the tax deduction from RSUs that vested during fiscal years 2022, 2021 and 2020 was $ 25.2 million, $ 16.3 million and $ 12.1 million, respectively.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 88
−Removed: Defined Contribution Plans
−Removed: Certain of the Company's subsidiaries have defined contribution employee benefit plans covering all or a portion of their employees.
−Removed: Contributions to these plans are discretionary for certain plans and are based on specified or statutory requirements for others.
−Removed: The charges to expense for these plans for fiscal years 2022, 2021 and 2020, were $ 13.9 million, $ 10.6 million and $ 8.6 million, respectively.
+Added: The shares outstanding as of March 31, 2023 above include 0.8 million shares of PSUs.
+Added: The Company presents the number of PSUs at 100 percent of the performance target;
+Added: however, the aggregate fair value of shares vested during the year is based on the actual number of stock units vested based on the achievement of the financial metrics over the performance period.
+Added: The tax benefit realized for the tax deduction from RSUs and PSUs that vested during fiscal years 2023, 2022 and 2021 was $ 11.1 million, $ 25.2 million and $ 16.3 million, respectively.
+Added: Note 5— Employee Benefit Plans
Defined Benefit Plans
3 unchanged sentences
The Company recognizes the overfunded or underfunded status of defined benefit pension plans and non-retirement post-employment benefit obligations as an asset or liability in its consolidated balance sheets and recognizes changes in the funded status of defined benefit pension plans in the year in which the changes occur through accumulated other comprehensive income (loss), which is a component of shareholders' equity.
−Removed: Each plan's assets and benefit obligations are remeasured as of March 31 each year.
+Added: Each plan's assets and benefit obligations are generally remeasured as of March 31 each year.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 79
The net periodic benefit cost of the defined benefit pension plans and the non-retirement post-employment benefit obligations for fiscal years 2023, 2022 and 2021 was as follows (in thousands):
7 unchanged sentences
Net actuarial loss (gain) recognized ( 3,047 ) ( 2,158 ) 2,144
−Removed: Settlement — — ( 97 )
+Added: Curtailment gain ( 4,225 ) — —
+Added: Settlement gain ( 339 ) — —
Total net periodic benefit cost $ 3,780 $ 10,060 $ 12,310
6 unchanged sentences
Plan participant contributions 6,870 6,092
−Removed: Actuarial (gains) losses ( 31,198 ) 15,762
+Added: Actuarial gain ( 22,965 ) ( 31,198 )
Benefits paid ( 2,646 ) ( 3,904 )
Transfer of prior vested benefits 11,579 14,963
+Added: Settlement ( 15,348 ) —
+Added: Curtailment ( 3,923 ) —
Administrative expense paid ( 147 ) ( 130 )
−Removed: Currency exchange rate changes and other 3,767 4,292
+Added: Currency exchange rate changes ( 1,238 ) 3,767
Projected benefit obligations, end of the year $ 195,336 $ 207,551
The accumulated benefit obligation for all defined benefit pension plans as of March 31, 2023 and 2022 was $ 170.3 million and $ 178.5 million, respectively.
+Added: Actuarial gains related to the change in the benefit obligation for the Company's pension plans for fiscal years 2023 and 2022 w ere primarily due to an increase in discount rate.
Logitech International S.A.
| Fiscal 2023 Form 10-K | 80
−Removed: Actuarial gains related to the change in the benefit obligation for the Company's pension plans for fiscal year 2022 was primarily due to an increase in discount rate.
−Removed: Actuarial losses related to the change in benefit obligation for fiscal year 2021 was primarily due to the decrease in the discount rate.
The following table presents the changes in the fair value of defined benefit pension plan assets for fiscal years 2023 and 2022 (in thousands):
7 unchanged sentences
Transfer of prior vested benefits 11,579 14,963
+Added: Settlement ( 15,348 ) —
Administrative expenses paid ( 147 ) ( 130 )
23 unchanged sentences
| Fiscal 2023 Form 10-K | 81
−Removed: Amounts recognized on the balance sheet for the plans were as follows (in thousands):
+Added: Amounts recognized on the balance sheets for the plans were as follows (in thousands):
Current liabilities $ 1,407 $ 1,677
1 unchanged sentence
Total liabilities $ 32,737 $ 51,433
−Removed: Amounts recognized in accumulated other comprehensive loss related to defined benefit pension plans were as follows (in thousands):
−Removed: 2022 2021 2020
+Added: Amounts recognized in accumulated other comprehensive income (loss) related to defined benefit pension plans were as follows (in thousands):
Net prior service credits $ 2,201 $ 2,883
−Removed: Net actuarial loss ( 4,304 ) ( 27,553 ) ( 22,722 )
−Removed: Accumulated other comprehensive loss ( 1,421 ) ( 24,290 ) ( 19,075 )
+Added: Net actuarial gain (loss) 5,690 ( 4,304 )
+Added: Accumulated other comprehensive income (loss) 7,891 ( 1,421 )
Deferred taxes ( 3,366 ) ( 2,074 )
−Removed: Accumulated other comprehensive loss, net of tax $ ( 3,495 ) $ ( 23,200 ) $ ( 20,016 )
+Added: Accumulated other comprehensive income (loss), net of tax $ 4,525 $ ( 3,495 )
The actuarial assumptions for the defined benefit plans were as follows:
9 unchanged sentences
2023 2022 2021
−Removed: Periodic Costs:
+Added: Net Periodic Costs:
Discount rate 0.50 % - 6.75 %
18 unchanged sentences
2024 $ 26,765
−Removed: Thereafter 67,605
+Added: Next five fiscal years 66,302
Total expected benefit payments by the plan $ 144,053
The Company expects to contribute $ 9.4 million to its defined benefit pension plans during fiscal year 2024.
+Added: Defined Contribution Plans
+Added: Certain of the Company's subsidiaries have defined contribution employee benefit plans covering all or a portion of their employees.
+Added: Contributions to these plans are discretionary for certain plans and are based on specified or statutory requirements for others.
+Added: The charges to expense for these plans for fiscal years 2023, 2022 and 2021, were $ 14.4 million, $ 13.9 million and $ 10.6 million, respectively.
Deferred Compensation Plan
2 unchanged sentences
The deferred compensation plan's assets consist of marketable securities and are included in other assets on the consolidated balance sheets.
−Removed: The marketable securities were recorded at a fair value of $ 28.4 million and $ 24.8 million as of March 31, 2022 and 2021, respectively, based on quoted market prices.
−Removed: The Company also had $ 28.4 million and $ 24.8 million in deferred compensation liability as of March 31, 2022 and 2021, respectively.
−Removed: Earnings, gains and losses on deferred compensation investments are included in other income (expense), net and corresponding changes in deferred compensation liability are included in operating expenses and cost of goods sold.
+Added: The marketable securities were recorded at a fair value of $ 28.2 million and $ 28.4 million as of March 31, 2023 and 2022, respectively, based on quoted market prices (see Note 9).
+Added: The Company also had deferred compensation liability of $ 28.2 million and $ 28.4 million, which are included in other non-current liabilities on the consolidated balance sheets as of March 31, 2023 and 2022, respectively.
+Added: Earnings, gains and losses on deferred compensation investments are included in other income (expense), net and corresponding changes in deferred compensation liability are included in operating expenses and cost of goods sold in the consolidated statements of operations (see Note 6).
Note 6— Other Income (Expense), net
2 unchanged sentences
2023 2022 2021
−Removed: Investment gain (loss) related to the deferred compensation plan $ 1,231 $ 5,916 $ ( 831 )
+Added: Investment (loss) gain related to the deferred compensation plan $ ( 1,961 ) $ 1,231 $ 5,916
Currency exchange loss, net ( 7,337 ) ( 4,604 ) ( 2,688 )
−Removed: Gain (loss) on investments, net (1)
+Added: Loss on investments, net (1)
( 14,073 ) ( 1,683 ) ( 5,910 )
+Added: Non-service cost net pension income (expense) and other (2)
10,093 5,616 893
Other income (expense), net $ ( 13,278 ) $ 560 $ ( 1,789 )
−Removed: (1) Includes realized gain (loss) on sales of investments, unrealized gain (loss) from the change in fair value of investments and gain (loss) on equity-method investments, as applicable.
−Removed: On March 2, 2020, the Company sold its $ 5.5 million investment, in a privately held company, for proceeds with a total fair value of $ 45.3 million consisting of cash, a subordinated note and an equity interest in another privately held company.
−Removed: As a result, the Company recognized a gain of $ 39.8 million related to the sale of this investment in fiscal year 2020.
−Removed: (2) Includes the components of net periodic benefit cost of defined pension plans other than the service cost component (see Note 5).
+Added: (1) Includes realized gain (loss) on sales of investments, unrealized gain (loss) from the change in fair value of investments, gain (loss) on equity-method investments, and impairment of investments during the periods presented, as applicable, (see Note 9).
+Added: (2) Includes the components of net periodic benefit cost of defined benefit plans other than the service cost component (see Note 5).
Logitech International S.A.
16 unchanged sentences
Non-Swiss 4,085 ( 1,646 ) 3,050
−Removed: Provision for (benefit from) income taxes $ 131,305 $ 200,863 $ ( 125,397 )
+Added: Provision for income taxes $ 98,947 $ 131,305 $ 200,863
The difference between the provision for (benefit from) income taxes and the expected tax provision (tax benefit) at the statutory income tax rate of 8.5 % is reconciled below (in thousands):
8 unchanged sentences
Valuation allowance 908 887 ( 247 )
+Added: Impairment 1,881 — —
Restructuring charges / (credits) ( 1,764 ) — ( 5 )
2 unchanged sentences
Other, net 439 670 ( 973 )
−Removed: Provision for (benefit from) income taxes $ 131,305 $ 200,863 $ ( 125,397 )
+Added: Provision for income taxes $ 98,947 $ 131,305 $ 200,863
Logitech International S.A.
19 unchanged sentences
The Company had a valuation allowance of $ 30.8 million as of March 31, 2023 against deferred tax assets in the state of California, an increase from $ 29.7 million as of March 31, 2022 from activities during the year.
−Removed: The remaining valuation allowance primarily represents $ 0.2 million for various tax attribute carryforwards.
The Company determined that it is more likely than not that the Company would not generate sufficient taxable income in the future to utilize such deferred tax assets.
−Removed: As of March 31, 2022, the Company had foreign net operating loss and tax credit carryforwards for income tax purposes of $ 81.9 million and $ 74.0 million, respectively.
+Added: As of March 31, 2023, the Company had net operating loss carryforwards in Switzerland for income tax purposes of $ 17.7 million which will begin to expire in fiscal year 2028.
+Added: The Company had net operating loss and tax credit carryforwards in the United States for income tax purposes of $ 60.2 million and $ 74.6 million, respectively.
Unused net operating loss carryforwards will expire at various dates beginning in fiscal year 2030.
15 unchanged sentences
Lapse of statute of limitations ( 4,024 )
−Removed: Decreases in balances related to tax positions taken during prior years ( 679 )
Increases in balances related to tax positions taken during the year 23,780
1 unchanged sentence
Lapse of statute of limitations ( 4,232 )
−Removed: Decreases in balances related to tax positions taken during prior years —
+Added: Settlements with taxing authorities ( 2,015 )
Increases in balances related to tax positions taken during the year 22,366
1 unchanged sentence
Lapse of statute of limitations ( 3,586 )
−Removed: Settlements with taxing authorities ( 2,015 )
Increases in balances related to tax positions taken during the year 15,214
48 unchanged sentences
Right-of-use assets 67,330 40,661
−Removed: Investments for deferred compensation plan 28,431 24,809
Investments in privately held companies 33,323 43,068
+Added: Investments for deferred compensation plan 28,213 28,431
Other assets 15,438 14,933
7 unchanged sentences
Accrued sales return liability 49,462 40,507
+Added: Accrued loss for inventory purchase commitments 46,608 46,361
VAT payable 33,328 39,602
+Added: Warranty liabilities 28,861 32,987
Income taxes payable 18,788 35,355
−Removed: Warranty accrual 32,987 33,228
−Removed: Accrued payables - non-inventory 26,722 52,392
Operating lease liabilities 12,655 13,690
3 unchanged sentences
Other non-current liabilities:
+Added: Operating lease liabilities $ 58,361 $ 28,207
Employee benefit plan obligations 32,421 50,741
Obligation for deferred compensation plan 28,213 28,431
−Removed: Operating lease liabilities 28,207 21,319
−Removed: Warranty accrual 13,232 15,604
−Removed: Contingent consideration 4,217 —
+Added: Warranty liabilities 12,025 13,232
Deferred tax liabilities 2,803 1,962
+Added: Contingent consideration — 4,217
Other non-current liabilities 12,872 5,343
1 unchanged sentence
Note 9— Fair Value Measurements
+Added: 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.
22 unchanged sentences
Currency derivative liabilities included in accrued and other current liabilities $ — $ 2,187 $ — $ — $ 165 $ —
−Removed: The following table summarizes the change in the fair value of the Company's contingent consideration balance during fiscal year 2022 and 2021 (in thousands):
+Added: Contingent Consideration for Business Acquisitions
+Added: The following table summarizes the change in the Company's contingent consideration balance during fiscal year 2023 and 2022 (in thousands):
Year Ended March 31,
−Removed: Contingent consideration, beginning of the year $ 6,967 $ 23,284
+Added: Beginning of the period $ 12,259 $ 6,967
Fair value of contingent consideration upon acquisition 2,151 9,973
1 unchanged sentence
Settlements of contingent consideration ( 5,954 ) ( 1,172 )
−Removed: ( 1,172 ) ( 28,463 )
−Removed: Contingent consideration, end of the year $ 12,259 $ 6,967
−Removed: (1) The amount for fiscal year 2022 relates to the technology acquisition in fiscal year 2022.
−Removed: The amount for fiscal year 2021 relates to the Mevo acquisition and the other technology acquisition in fiscal year 2021.
−Removed: See Contingent Consideration for Business Acquisition section below for more information.
−Removed: (2) As of June 30, 2020, the earn-out period was completed in connection with the Company's acquisition of Streamlabs as disclosed below.
−Removed: The fair value of contingent consideration of $ 29.0 million as of June 30, 2020 is based on the actual net sales of Streamlabs services during the earn-out period and is no longer subject to fair value measurement and was accordingly transferred out of Level 3.
−Removed: During the third quarter of fiscal year 2021, $ 28.5 million of the contingent consideration was transferred from other current liabilities to equity upon settlement of the contingent consideration through the issuance of shares out of treasury stock.
−Removed: During the fourth quarter of fiscal year 2022, an additional $ 0.3 million of the contingent consideration was transferred from other current liabilities to equity upon settlement of the contingent consideration through the issuance of shares out of treasury stock.
−Removed: The remaining $ 0.2 million is held back in escrow for claims made against the escrow and for the payment of taxes.
+Added: Effect of foreign currency exchange rate changes $ ( 1,827 ) —
+Added: End of the period $ 6,629 $ 12,259
+Added: On May 19, 2021, the Company made a technology acquisition for a total cash consideration of $ 25.6 million, which included contingent consideration of $ 10.0 million payable in cash upon the achievement of three technical development milestones to be completed as of December 31, 2021, June 30, 2022, and June 30, 2023.
+Added: The fair value of the contingent consideration was $ 10.0 million at the acquisition date, which was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt.
+Added: During fiscal year 2022, the Company paid $ 0.9 million for the contingent consideration related to the first technical development milestone.
+Added: During fiscal year 2023, the Company paid $ 4.0 million for the contingent consideration related to the second technical development milestone.
+Added: The Company expects to pay the contingent consideration for the third technical development milestone within the next twelve months.
+Added: On February 17, 2021, the Company acquired all equity interests of Mevo Inc.
+Added: ("Mevo") for a total cash consideration of $ 33.2 million, plus additional contingent consideration of up to $ 17.0 million payable in cash only upon the achievement of certain net revenues for the period from December 26, 2020 to December 31, 2021.
+Added: The fair value of the contingent consideration as of the acquisition date was $ 3.4 million, which was determined by using a Black-Scholes-Merton valuation model to calculate the probability of the earn-out threshold being met, times the
Logitech International S.A.
| Fiscal 2023 Form 10-K | 89
−Removed: Investments for Deferred Compensation Plan
−Removed: The marketable securities for the Company's deferred compensation plan are recorded at a fair value of $ 28.4 million and $ 24.8 million as of March 31, 2022 and 2021, respectively, based on quoted market prices.
−Removed: Quoted market prices are observable inputs that are classified as Level 1 within the fair value hierarchy.
−Removed: Unrealized gains related to marketable securities for fiscal years 2022, 2021 and 2020 are included in other income (expense), net in the consolidated statements of operations (see Note 6).
−Removed: Contingent Consideration for Business Acquisitions
−Removed: The contingent consideration arising from the technology acquisition on May 19, 2021 (see Note 3) represents the future potential earn-out payments of up to $ 10.0 million payable in cash upon the achievement of three technical development milestones required to be completed as of December 31, 2021, June 30, 2022, and June 30, 2023.
−Removed: The fair value of the contingent consideration as of the acquisition date was $ 10.0 million, which was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt.
−Removed: During the third quarter of fiscal year 2022, $ 0.9 million of the contingent consideration was released from other current liabilities upon cash settlement of the contingent consideration for the first technical development milestone.
−Removed: The contingent consideration arising from the Mevo Acquisition on February 17, 2021 (see Note 3) represents the future potential earn-out payments of up to $ 17.0 million payable in cash only upon the achievement of certain net sales for the period beginning on December 26, 2020 and ending on December 31, 2021.
−Removed: The fair value of the contingent consideration as of the acquisition date was $ 3.4 million, which was determined by using a Black-Scholes-Merton valuation model to calculate the probability of the earn-out threshold being met, times the value of the earn-out payment, and discounted at the risk-free rate.
+Added: 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 Mevo over the earn-out period, risk-free rate, and the net sales volatility.
2 unchanged sentences
As of December 31, 2021, the fair value of the contingent consideration was released from other current liabilities as the net sales milestone was not achieved upon completion of the earn-out period.
−Removed: The contingent consideration arising from the technology acquisition on January 4, 2021 (see Note 3) represents the future potential earn-out payments of up to $ 3.0 million payable in cash upon the achievement of two technical development milestones required to be completed as of December 31, 2021 and March 31, 2022.
+Added: On January 4, 2021, the Company made a technology acquisition for a total cash consideration of $ 11.0 million, which included contingent consideration of $ 3.0 million payable in cash upon the achievement of two technical development milestones to be completed as of December 31, 2021 and March 31, 2022.
The fair value of the contingent consideration was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt.
−Removed: The contingent consideration is expected to be paid in the first two quarters of fiscal year 2023.
−Removed: In connection with the acquisition of Streamlabs on October 31, 2019 (see Note 3), the Company agreed to pay a total earn out payment of $ 29.0 million, payable in stock, only upon the achievement of certain net revenues for the period beginning on January 1, 2020 and ending on June 30, 2020.
−Removed: The fair value of the contingent consideration as of the 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, times the value of the earn-out payment, and discounted at the risk-free rate.
−Removed: The fair value was increased by $ 5.7 million to $ 29.0 million as of June 30, 2020, based on actual sales.
−Removed: During the third quarter of fiscal year 2021 and the fourth quarter of fiscal year 2022, the Company issued 390,397 and 4,010 shares, respectively, out of treasury stock to former security holders of Streamlabs, in satisfaction of payment of the contingent consideration that was earned during the earn-out period.
+Added: During fiscal year 2023, the Company paid $ 2.0 million for the contingent consideration related to the first technical development milestone.
+Added: The Company expects to pay the remaining $ 1.0 million for the second technical development milestone within the next twelve months.
+Added: In connection with the acquisition of Streamlabs on October 31, 2019, the Company agreed to pay a total earn-out payment of $ 29.0 million, payable in stock, only upon the achievement of certain net revenues for the period from January 1, 2020 to June 30, 2020.
+Added: During fiscal year 2021 and 2022, the Company issued 390,397 and 4,010 shares, respectively, out of treasury stock to former security holders of Streamlabs, in satisfaction of payment of the contingent consideration that was earned during the earn-out period.
The issuances of such shares were deemed to be exempt from registration under the Securities Act of 1933 (the "Securities Act"), in reliance on Regulation D of the Securities Act as transactions by an issuer not involving a public offering.
Although the estimate of contingent consideration is based on management’s best knowledge of current events, the estimate could change significantly from period to period.
−Removed: Actual results that differ from the assumptions used and any changes to the significant assumptions and unobservable inputs used could have a material impact on future results of operations.
+Added: Actual results that differ from the assumptions used and any changes to the significant assumptions and unobservable inputs used could have an impact on future results of operations.
+Added: Investments for Deferred Compensation Plan
+Added: The marketable securities for the Company's deferred compensation plan are recorded at a fair value of $ 28.2 million and $ 28.4 million as of March 31, 2023 and 2022, respectively, based on quoted market prices.
+Added: Quoted market prices are observable inputs that are classified as Level 1 within the fair value hierarchy.
+Added: Unrealized gains (losses) related to marketable securities for fiscal years 2023, 2022 and 2021 are included in other income (expense), net in the consolidated statements of operations (see Note 6).
Equity Method Investments
−Removed: 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 $ 40.2 million and $ 40.7 million as of March 31, 2022 and 2021, respectively.
−Removed: Unrealized gains (losses) related to equity investments for fiscal years 2022, 2021 and 2020 are included in other income (expense), net in the Company's consolidated statements of operations.
−Removed: There was no impairment of these assets during fiscal years 2022, 2021 and 2020.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 99
−Removed: On March 2, 2020, the Company sold its $ 5.5 million investment, in a privately held company, for proceeds with a total fair value of $ 45.3 million consisting of cash, a 6 % subordinated note due in five years , and a Series A preferred units and Series B common units in Marlin-SL Topco, LP ("Marlin").
−Removed: As of March 31, 2022, the investment represents an ownership interest of approximately 8.9 % in Marlin.
−Removed: The Company has evaluated whether Marlin qualifies as a variable interest entity ("VIE") pursuant to the accounting guidance of ASC 810, Consolidations .
−Removed: On the basis that the total equity investment in Marlin may not be sufficient to absorb its expected losses, the Company concluded that Marlin is currently a VIE.
−Removed: However, considering the Company's minority interest and limited involvement with the Marlin business, the Company concluded it is not required to consolidate Marlin.
−Removed: Rather, the Company accounts for this investment under the equity method as it represents an ownership interest in a limited partnership that is more than minor.
−Removed: The promissory note is accounted for as a loan receivable and is included in other assets in the consolidated balance sheets.
−Removed: The Company's maximum exposure to any losses incurred by Marlin is limited to its investment.
−Removed: As of March 31, 2022 and 2021, the carrying value of the investment in Marlin was $ 21.4 million and $ 26.7 million, respectively.
−Removed: The Company's investment related to this VIE was not individually significant to the Company's consolidated financial statements.
+Added: The Company has certain non-marketable investments included in other assets that are accounted for as equity method investments, with a carrying value of $ 20.5 million and $ 40.2 million as of March 31, 2023 and 2022, respectively.
+Added: G ains (losses) related to equity method investments for fiscal years 2023, 2022 and 2021 were not material and are included in other income (expense), net in the Company's consolidated statements of operations (see Note 6).
+Added: During fiscal year 2023, the Company recorded an impairment charge, before tax, of $ 21.4 million for one of its equity method investments as it was determined that the carrying value of the investment was not recoverable.
+Added: The impairment charge is included in other income (expense), net in the Company's consolidated statement of operations for fiscal year 2023.
+Added: There was no impairment of equity method investments during fiscal years 2022 and 2021 .
Assets Measured at Fair Value on a Nonrecurring Basis
Financial Assets.
−Removed: The Company has certain investments without readily determinable fair values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment.
+Added: The Company has certain equity investments without readily determinable fair values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment.
When certain events or circumstances indicate that impairment may exist, the Company revalues the investments using various assumptions, including the financial metrics and ratios of comparable public companies.
The carrying value is also adjusted for observable price changes with the same or similar security from the same issuer.
−Removed: The amount of these investments included in other assets was not material as of March 31, 2022 and 2021.
−Removed: There is no impairment recorded in fiscal year 2022.
−Removed: During fiscal year 2021, the Company recorded impairment charges of $ 2.0 million for its equity securities without readily determinable fair values, which had an initial cost basis of $ 2.0 million, as it was determined the carrying value of the investments were not recoverable.
+Added: The amount of these equity investments without readily determinable fair value included in other assets was $ 12.6 million and $ 2.9 million as of March 31, 2023 and 2022, respectively.
+Added: During fiscal year 2023, the Company recorded an unrealized gain, before tax, of $ 6.9 million for its investment in a private company as a result of observable price changes for similar securities issued by this
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 90
+Added: company (level 2 fair value measurement).
+Added: There was no impairment of these investments during fiscal year 2022 and the impairment charges related to these investments were not material during fiscal years 2023 and 2021.
Non-Financial Assets.
Goodwill, intangible assets, and property, plant and equipment, are not required to be measured at fair value on a recurring basis.
−Removed: 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 during such period.
+Added: However, if the Company is required to evaluate these non-financial assets for impairment, whether due to certain triggering events or because of the required annual impairment test, and a resulting impairment is recorded to reduce the carrying value to the fair value, the non-financial assets are measured at fair value during such period.
See Note 2 for additional information about how the Company tests various asset classes for impairment.
−Removed: During the year ended March 31, 2022, the Company recorded impairment charges of $ 7.0 million for the Jaybird-related intangible assets (see Note 11).
+Added: There was no impairment of non-financial assets during the fiscal years of 2023 and 2021.
+Added: During fiscal year 2022, the Company recorded impairment charges of $ 7.0 million for the Jaybird-related intangible assets (see Note 11).
Note 10— 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.
−Removed: However, the Company presents its derivative assets and derivative liabilities on a gross basis in other current assets or accrued and other current liabilities on the consolidated balance sheets as of March 31, 2022 and 2021.
−Removed: See Note 9 for the fair values of the Company’s derivative instruments as of March 31, 2022 or 2021.
−Removed: The following table presents the amounts of gains and losses on the Company's derivative instruments designated as hedging instruments for fiscal years 2022, 2021 and 2020 and their locations on its consolidated statements of operations and consolidated statements of comprehensive income (in thousands):
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 100
+Added: However, the Company presents its derivative assets and derivative liabilities on a gross basis in other current assets and accrued and other current liabilities on the consolidated balance sheets as of March 31, 2023 and 2022.
+Added: See Note 9 for the fair values of the Company’s derivative instruments as of March 31, 2023 and 2022.
+Added: Cash Flow Hedges
+Added: The Company enters into cash flow hedge contracts to protect against exchange rate exposure of forecasted inventory purchases.
+Added: These hedging contracts mature within approximately four months .
+Added: 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.
+Added: Cash flows from such hedges are classified as operating activities in the consolidated statements of cash flows.
+Added: Hedging relationships are discontinued when hedging contract is no longer eligible for hedge accounting, or is sold, terminated or exercised, or when the Company removes hedge designation for the contract.
+Added: Gains and losses in the fair value of the effective portion of the discontinued hedges continue to be reported in accumulated other comprehensive loss until the hedged inventory purchases are sold, unless it is probable that the forecasted inventory purchases will not occur by the end of the originally specified time period or within an additional two-month period of time thereafter.
+Added: The notional amounts of foreign currency exchange forward contracts outstanding related to forecasted invento ry purch ases were $ 72.6 million and $ 125.4 million as of March 31, 2023 and 2022, respectively.
+Added: The Company had $ 3.9 million of net losses related to its cash flow hedges included in accumulated other comprehensive loss as of March 31, 2023, which will be reclassified into earnings within the next twelve months.
+Added: The following table presents the amounts of gain (loss) on the Company's derivative instruments designated as hedging instruments for fiscal years 2023, 2022 and 2021 and their locations on its consolidated statements of operations and consolidated statements of comprehensive income (in thousands):
Gain (Loss) Deferred as
7 unchanged sentences
2023 2022 2021 2023 2022 2021
−Removed: Designated as hedging instruments:
Cash flow hedges $ 2,625 $ 6,308 $ ( 4,071 ) $ ( 8,391 ) $ ( 8,221 ) $ 8,043
1 unchanged sentence
cost of goods sold, for hedging forecasted inventory purchases and such amount is not material for all periods presented.
−Removed: Cash Flow Hedges:
−Removed: The Company enters into cash flow hedge contracts to protect against exchange rate exposure of forecasted inventory purchases.
−Removed: These hedging contracts mature within four months .
−Removed: Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of accumulated other comprehensive income (loss) until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold.
−Removed: Cash flows from such hedges are classified as operating activities in the consolidated statements of cash flows.
−Removed: Hedging relationships are discontinued when hedging contract is no longer eligible for hedge accounting, or is sold, terminated or exercised, or when the Company removes hedge designation for the contract.
−Removed: Gains and losses in the fair value of the effective portion of the discontinued hedges continue to be reported in accumulated other comprehensive loss until the hedged inventory purchases are sold, unless it is probable that the forecasted inventory purchases will not occur by the end of the originally specified time period or within an additional two-month period of time thereafter.
−Removed: As of March 31, 2022 and 2021, the notional amounts of foreign currency exchange forward contracts outstanding related to forecasted invento ry purchases were $ 125.4 million and $ 164.5 million, respectively.
−Removed: The Company estimates that $ 1.8 million of net gain related to its cash flow hedges included in accumulated other comprehensive loss as of March 31, 2022 will be reclassified into earnings within the next twelve months.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 91
Other Derivatives
The Company also enters into foreign currency exchange forward and swap contracts to reduce the short-term effects of currency exchange rate fluctuations on certain receivables or payables denominated in currencies other than the functional currencies of its subsidiaries.
−Removed: These contracts generally mature within a month.
+Added: These contracts generally mature within approximately a month.
The primary risk managed by using forward and swap contracts is the currency exchange rate risk.
−Removed: The gains or losses on these contracts are recognized in other income (expense), net in the consolidated statements of operations based on the changes in fair value.
+Added: The gains or losses on these contracts are not material and included in other income (expense), net in the consolidated statements of operations based on the changes in fair value.
The notional amounts of these contracts outstanding as of March 31, 2023 and 2022 were $ 111.2 million and $ 226.5 million, respectively.
−Removed: Open forward and swap contracts as of March 31, 2022 and 2021 consisted of contracts in Japanese Yen, Australian Dollars, Canadian Dollars, Mexican Pesos, and Taiwanese Dollar s to be settled at future dates at pre-determined exchange rates.
−Removed: Open forward and swap contracts outstanding as of March 31, 2022 additionally consisted of contracts in Chinese Renminbi and Brazilian Real to be settled at future dates at pre-determined exchange rates.
+Added: Foreign currency exchange forward and swap contracts outstanding as of March 31, 2023 primarily consisted of contracts in Brazilian Real, Japanese Yen, and Mexican Peso 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.
Cash flows from these contracts are classified as operating activities in the consolidated statements of cash flows.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 101
Note 11— Goodwill and Other Intangible Assets
−Removed: The Company conducts its impairment analysis of goodwill and indefinite life intangible assets annually at December 31 or more frequently 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.
−Removed: The Company conducted its annual impairment analysis of goodwill and indefinite life intangible assets as of December 31, 2021 by performing a qualitative assessment and concluded that it was more likely than not that the fair value of its reporting unit exceeded its carrying amount.
−Removed: In assessing the qualitative factors, the Company considered the impact of these key factors:
−Removed: change in industry and competitive environment, growth in market capitalization, and budgeted-to-actual revenue performance for the twelve months ended December 31, 2021.
−Removed: There have been no triggering events identified affecting the valuation of goodwill and indefinite life intangible assets subsequent to the annual impairment test.
+Added: The Company conducts its impairment analysis of goodwill annually at December 31 or more frequently 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.
+Added: The Company conducted its annual impairment analysis of goodwill as of December 31, 2022 by performing a qualitative assessment and concluded that it was more likely than not that the fair value of its reporting unit exceeded its carrying amount.
+Added: In assessing the qualitative factors, the Company considered the impact of change in industry and competitive environment, the Company's market capitalization and budgeted-to-actual revenue performance for the twelve months ended December 31, 2022.
+Added: There have been no triggering events identified affecting the valuation of goodwill subsequent to the annual impairment test.
The following table summarizes the activities in the Company's goodwill balance (in thousands):
2 unchanged sentences
Acquisitions 7,976 20,721
−Removed: 20,721 28,667
Effects of foreign currency translation ( 1,541 ) ( 2,150 )
End of the period $ 454,610 $ 448,175
−Removed: (1) See Note 3 for more information related to acquisitions.
The Company's acquired intangible assets were as follows (in thousands):
7 unchanged sentences
Effects of foreign currency translation ( 1,021 ) 292 ( 729 ) ( 634 ) 86 ( 548 )
−Removed: ( 634 ) 86 ( 548 ) — — —
−Removed: $ 230,499 $ ( 146,720 ) $ 83,779 $ 275,012 $ ( 159,864 ) $ 115,148
−Removed: (1) Related to a technology acquisition in May 2021.
−Removed: See Note 3 for more information related to the acquisition.
−Removed: During the third quarter of fiscal year 2022, the Company decided to discontinue Jaybird-branded products.
−Removed: As a result of this decision, the Company performed an analysis to compare the fair value of Jaybird-related intangible assets to their carrying amount.
−Removed: As the fair value using estimated discounted cash flows was less than the carrying amount, the Company recognized a pre-tax impairment charge in the consolidated statement of operations of $ 7.0 million, which was primarily related to customer contracts and relationships.
−Removed: See Note 16 for further information regarding the exit plan.
+Added: Total $ 232,135 $ ( 168,962 ) $ 63,173 $ 230,499 $ ( 146,720 ) $ 83,779
+Added: During fiscal year 2022, the Company recognized a pre-tax impairment charge of $ 7.0 million to Jaybird-related intangible assets, primarily related to customer contracts and relationships, as a result of its decision to discontinue Jaybird-branded products.
For fiscal years 2023, 2022 and 2021, amortization expense for intangible assets was $ 24.4 million , $ 30.2 million and $ 31.8 million, respectively.
−Removed: The Company expects that annual amortization expense for fiscal years 2023, 2024, 2025, 2026 and 2027 will be $ 23.2 million, $ 19.9 million, $ 17.7 million, $ 10.7 million and $ 4.5 million, respectively, and $ 4.0 million thereafter.
−Removed: The intangible assets as of March 31, 2022 and 2021 include IPR&D $ 3.8 million and $ 3.5 million, respectively, from asset acquisitions.
−Removed: IPR&D is capitalized at fair value and the amortization commences upon completion of the underlying projects.
−Removed: Once research and development efforts are completed, the corresponding amount of IPR&D is reclassified as an amortizable purchased intangible asset and is amortized over its estimated useful life.
−Removed: As of March 31, 2022 and 2021 , there was no IPR&D amortized.
+Added: The Company expects that annual amortization expense for fiscal years
Logitech International S.A.
| Fiscal 2023 Form 10-K | 92
+Added: 2024, 2025, 2026, 2027 and 2028 will be $ 20.3 million, $ 18.2 million, $ 11.9 million, $ 4.9 million and $ 3.3 million, respectively, and $ 1.0 million thereafter.
Note 12— Financing Arrangements
5 unchanged sentences
Product Warranties
−Removed: Changes in the Company's warranty liability for fiscal years 2022 and 2021 were as follows (in thousands):
+Added: Changes in the Company's warranty liabilities for fiscal years 2023 and 2022 were as follows (in thousands):
Years Ended March 31,
Beginning of the period $ 46,219 $ 48,832
−Removed: Assumed from business acquisition — 231
Provision 31,089 29,812
11 unchanged sentences
Legal Proceedings
−Removed: From time to time the Company is involved in claims and legal proceedings which arise in the ordinary course of its business.
+Added: From time to time the Company is involved in claims and legal proceedings that 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.
−Removed: Based on currently available information, the Company does not believe that resolution of pending matters will have a material adverse effect on its financial position, cash flows or results of operations.
−Removed: 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 position, cash flows or results of operations in a particular period.
+Added: 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.
+Added: 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 or results of operations in a particular period.
Any claims or proceedings against the Company, whether meritorious or not, can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors.
3 unchanged sentences
The Company's nominal share capital is CHF 43.3 million, consisting of 173,106,620 issued shares with a par value of CHF 0.25 each, of which 13,763,347 were held in treasury shares as of March 31, 2023.
−Removed: 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
Logitech International S.A.
| Fiscal 2023 Form 10-K | 93
−Removed: purposes, representing the issuance of up to 25,000,000 shares to cover any conversion rights under a future convertible bond issuance.
−Removed: 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.
−Removed: Pursuant to Swiss corporate law, the payment of dividends is limited to certain amounts of unappropriated retained earnings (approximately CHF 1.7 billion, or $ 1.8 billion as of March 31, 2022) and is subject to shareholder approval.
−Removed: In May 2022, the Board of Directors recommended that the Company pay cash dividends for fiscal year 2022 of approximately CHF 0.96 per share (USD equivalent of approximately $ 1.04 per share, which would result in a gross aggregate dividend of $ 172.1 million, based on the exchange rate and shares outstanding, net of treasury shares, on March 31, 2022).
−Removed: In September 2021, the Company paid gross cash dividends of CHF 0.87 (USD equivalent of $ 0.95 ) per common share, totaling $ 159.4 million in U.S.
−Removed: Dollars, on the Company's outstanding common stock.
−Removed: In September 2020, the Company paid gross cash dividends of CHF 0.79 (USD equivalent of $ 0.87 ) per common share, totaling $ 146.7 million in U.S.
−Removed: Dollars, on the Company’s outstanding common stock.
−Removed: In September 2019, the Company paid gross cash dividends of CHF 0.73 (USD equivalent of $ 0.74 ) per common share, totaling $ 124.2 million in U.S.
−Removed: Dollars, on the Company's outstanding common stock.
+Added: 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.
+Added: 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, which was authorized at the 2022 Annual General Meeting to be extended to September 14, 2024.
+Added: Pursuant to Swiss corporate law, the payment of dividends is limited to certain amounts of unappropriated retained earnings (approximately CHF 1.2 billion, or USD equivalent of $ 1.3 billion as of March 31, 2023) and is subject to shareholder approval.
+Added: In May 2023, the Board of Directors recommended that the Company pay cash dividends for fiscal year 2023 of CHF 1.06 per share (USD equivalent of approximately $ 1.16 per share, which would result in a gross aggregate dividend of approximately $ 184.2 million, based on the exchange rate and shares outstanding, net of treasury shares, on March 31, 2023).
+Added: In September 2022, the Company paid gross cash dividends of CHF 0.96 (USD equivalent of $ 0.98 ) per common share, totaling $ 158.7 million on the Company's outstanding common shares.
+Added: In September 2021, the Company paid cash dividends of CHF 0.87 (USD equivalent of $ 0.95 ) per common share, totaling $ 159.4 million on the Company’s outstanding common shares.
+Added: In September 2020, the Company paid cash dividends of CHF 0.79 (USD equivalent of $ 0.87 ) per common share, totaling $ 146.7 million on the Company's outstanding common shares.
Any future dividends will be subject to the approval of the Company's shareholders.
3 unchanged sentences
Share Repurchases
−Removed: In March 2017, the Company's Board of Directors approved the 2017 share repurchase program, which authorizes the Company to use up to $ 250.0 million to purchase up to 17.3 million of Logitech shares.
−Removed: This share repurchase program expired in April 2020.
In May 2020, the Company's Board of Directors approved the 2020 share repurchase program, which authorized the Company to use up to $ 250.0 million to purchase up to 17.3 million of Logitech shares.
−Removed: The Company's share repurchase program is expected to remain in effect for a period of three years through July 27, 2023.
Shares may be repurchased from time to time on the open market, through block trades or otherwise.
2 unchanged sentences
The Swiss Takeover Board approved this increase and it beca me effective on May 21, 2021.
+Added: In July 2022, the Company’s Board of Directors approved an increase of $ 500 million to the 2020 share repurchase program, to an aggregate amount of up to $ 1.5 billion to purchase up to 17.3 million of Logitech shares.
+Added: The Swiss Takeover Board approved this increase and it became effective on August 19, 2022.
+Added: The 2020 share repurchase program is expected to remain in effect for a period of three years through July 27, 2023.
As of March 31, 2023 , $ 505.8 million was available for repurchase under the 2020 repurchase program.
−Removed: A summary of the approved and active share repurchase program during fiscal year 2022 is shown in the following table (in thousands, excluding transaction costs):
+Added: A summary of the approved and active share repurchase program in fiscal year 2023 is shown in the following table (in thousands, excluding transaction costs):
Approved Repurchased
2 unchanged sentences
May 2020 17,311 $ 1,500,000 14,014 $ 994,156
−Removed: (1) The approval of each of the share repurchase programs by the Swiss Takeover Board limits the number of shares that the Company may repurchase to no more than 10 % of its authorized share capital and voting rights.
+Added: (1) The approval of the share repurchase program by the Swiss Takeover Board limits the number of shares that the Company may repurchase to no more than 10 % of its authorized share capital and voting rights.
Logitech International S.A.
2 unchanged sentences
The components of accumulated other comprehensive loss were as follows (in thousands):
−Removed: Accumulated Other Comprehensive Income (Loss)
Currency Translation
6 unchanged sentences
Note 15— Segment Information
−Removed: The Company operates in a single operating segment that encompasses the design, manufacturing and marketing of peripherals for PCs, tablets and other digital platforms.
+Added: The Company operates in a single operating segment that encompasses the design, manufacturing and marketing of peripherals for PCs, tablets, gaming, video conferencing, and other digital platforms.
Operating performance measures are provided directly to the Company's CEO, who is considered to be the Company’s Chief Operating Decision Maker.
The CEO periodically reviews information such as sales and adjusted operating income (loss) to make business decisions.
−Removed: These operating performance measures do not include restructuring charges (credits), net, share-based compensation expense, amortization and impairment of intangible assets, acquisition-related costs and change in fair value of contingent consideration from business acquisition.
−Removed: Sales by product categories and sales channels, excluding intercompany transactions were as follows (in thousands):
+Added: These operating performance measures do not include restructuring charges (credits), net, share-based compensation expense, amortization and impairment of intangible assets, acquisition-related costs and change in fair value of contingent consideration from business acquisitions.
+Added: Sales by product categories were as follows (in thousands):
Years Ended March 31,
8 unchanged sentences
Audio & Wearables 274,231 401,424 468,776
−Removed: Smart Home 18,463 34,394 43,404
+Added: 7,081 18,665 35,107
Total Sales $ 4,538,818 $ 5,481,101 $ 5,252,279
(1) Gaming includes streaming services revenue generated by Streamlabs.
−Removed: (2) Other includes products that the Company phased out because they are no longer strategic to the Company's business.
+Added: (2) Other includes Smart Home.
Sales by geographic region (based on the customers' locations) for fiscal years 2023, 2022 and 2021 were as follows (in thousands):
5 unchanged sentences
Total Sales $ 4,538,818 $ 5,481,101 $ 5,252,279
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 105
Revenues from sales to customers in the United States represented 35 %, 34 % and 35 % of sales in fiscal years 2023, 2022 and 2021, respectively.
Revenues from sales to customers in Germany represented 14 %, 15 % and 16 % of sales in fiscal years 2023 , 2022 and 2021, respectively.
−Removed: Revenues from sales to customers in China represented 10 % of sales in fiscal year 2022.
−Removed: No other country represented more than 10% of sales during these periods presented herein.
−Removed: Revenues from sales to customers in Switzerland, the Company's home domicile, represented 3 %, 3 % and 4 % of sales in fiscal years 2022, 2021 and 2020, respectively.
+Added: Revenues from sales to customers in China represented 11 % and 10 % of sales in fiscal years 2023 and 2022, respectively.
+Added: No other country represented more
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 95
+Added: than 10% of sales during these periods presented herein.
+Added: Revenues from sales to customers in Switzerland, the Company's country of domicile, represented 3 % of sales in each of fiscal years 2023, 2022 and 2021.
Property, plant and equipment, net (excluding software) and right-of-use assets by geographic region were as follows (in thousands):
2 unchanged sentences
Asia Pacific 69,939 87,265
−Removed: Total property, plant and equipment $ 133,673 $ 131,795
−Removed: Property, plant and equipment, net (excluding software) and right-of-use assets in the United States and China were $ 21.7 million and $ 66.8 million, respectively, as of March 31, 2022, and $ 17.2 million and $ 77.6 million, respectively, as of March 31, 2021.
−Removed: Property, plant and equipment, net (excluding software) and right-of-use assets in Switzerland, the Company's home domicile, were $ 13.6 million and $ 9.5 million as of March 31, 2022 and 2021, respectively.
+Added: Total $ 168,012 $ 133,673
+Added: Property, plant and equipment, net (excluding software) and right-of-use assets in the United States, China, and Ireland were $ 58.7 million, $ 48.8 million, and $ 17.7 million, respectively, as of March 31, 2023.
+Added: Property, plant and equipment, net (excluding software) and right-of-use assets in the United States and China were $ 21.7 million and $ 66.8 million, respectively, as of March 31, 2022.
+Added: Property, plant and equipment, net (excluding software) and right-of-use assets in Switzerland, the Company's country of domicile, were $ 13.7 million and $ 13.6 million as of March 31, 2023 and 2022, respectively.
No other countries represented more than 10% of the Company's total consolidated property, plant and equipment, net (excluding software) and right-of-use assets as of March 31, 2023 or 2022.
Note 16— Restructuring
−Removed: During the first quarter of fiscal year 2019, the Company implemented a restructuring plan to streamline and realign the Company's overall organizational structure and reallocate resources to support long-term growth opportunities.
−Removed: During the first quarter of fiscal year 2020, the Company had substantially completed this restructuring plan.
−Removed: During the third quarter of fiscal year 2022, as part of the Company's strategic review, the Company decided to cease future product launches under the Jaybird-brand within the Audio & Wearables product category.
−Removed: As a result, the Company recorded pre-tax restructuring charges of $ 2.1 million during fiscal year 2022, which are included in restructuring charges (credits), net in the consolidated statement of operations.
−Removed: Total charges related to the exit of Jaybird-branded products were $ 16.7 million, which included restructuring charges and other costs, for fiscal year 2022.
−Removed: The restructuring charges consisted of $ 1.3 million, primarily related to costs of production cancellation, and $ 0.8 million related to cash severance and termination benefits.
−Removed: The Company also recorded $ 7.6 million in cost of goods sold related to write-offs for excess inventories.
−Removed: In addition, as disclosed in Note 11, the Company recognized a pre-tax impairment charge of $ 7.0 million, related to intangible assets acquired as part of the Jaybird acquisition.
−Removed: The Company expects to substantially complete this restructuring within the next nine months.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 106
The following table summarizes restructuring-related activities during fiscal years 2023 and 2022 (in thousands):
−Removed: Restructuring - Continuing Operations
−Removed: Benefits Other Total
−Removed: Accrual balance at March 31, 2019 $ 4,389 $ — $ 4,389
−Removed: Charges, net 144 — 144
−Removed: Cash payments ( 3,852 ) — ( 3,852 )
−Removed: Accrual balance at March 31, 2020 $ 681 $ — $ 681
+Added: Benefits Contract Termination and Other Total
+Added: Accrued restructuring liability at March 31, 2021 (1)
+Added: $ 627 $ — $ 627
Charges, net 879 1,286 2,165
Cash payments ( 945 ) ( 390 ) ( 1,335 )
−Removed: Accrual balance at March 31, 2021 $ 627 $ — $ 627
+Added: Accrued restructuring liability at March 31, 2022 (1)
+Added: $ 561 $ 896 $ 1,457
Charges, net 27,631 6,942 34,573
Cash payments ( 14,015 ) ( 2,481 ) ( 16,496 )
−Removed: Accrual balance at March 31, 2022 $ 561 $ 896 $ 1,457
+Added: Accrued restructuring liability at March 31, 2023 (1)
+Added: $ 14,177 $ 5,357 $ 19,534
(1) The accrual balances are included in accrued and other current liabilities on the Company’s consolidated balance sheets.
+Added: During the second quarter of fiscal year 2023, the Company initiated a restructuring plan to realign its business group and engineering structure with its go-to-market strategy to more effectively compete within the enterprise market and to better serve end-users.
+Added: During the fourth quarter of fiscal year 2023, the Company undertook further actions to remove organization layers as well as streamline its marketing organization to increase efficiency.
+Added: These actions resulted in charges related to employee severance and other termination benefits as well as contract termination and other costs.
+Added: The Company recorded pre-tax charges totaling $ 34.6 million in restructuring charges, net in the consolidated statement of operations for the year ended March 31, 2023 .
+Added: The Company expects to substantially complete these restructuring activities within the next twelve months.
+Added: During the third quarter of fiscal year 2022, as part of the Company's strategic review, the Company decided to cease future product launches under the Jaybird brand within the Audio & Wearables product category.
+Added: As a result, the Company recorded $ 7.6 million in cost of goods sold related to write-offs for excess inventories, $ 7.0 million impairment to the intangible assets acquired as part of the Jaybird acquisition (see Note 11), and $ 2.2 million in restructuring charges, net, related to production cancellation costs and employee severance and other termination benefits, for the year ended March 31, 2022.
+Added: This restructuring plan has been substantially completed during fiscal year 2023.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 96
Note 17 — Leases
−Removed: The Company is a lessee in various noncancellable operating leases, primarily real estate facilities for office space and for transportation and office equipment.
−Removed: As of March 31, 2022, t he Company's lease arrangements comprise of operating leases with various expiration dates through June 30, 2031.
+Added: The Company is a lessee in various noncancellable operating leases, primarily real estate facilities for office space.
+Added: As of March 31, 2023, t he Company's lease arrangements are comprised of operating leases with various expiration dates through November 30, 2033 .
The lease term for all of the Company’s leases includes the noncancellable period of the lease.
1 unchanged sentence
The Company's leases do not contain any material residual value guarantees.
−Removed: The total operating lease costs were $ 17.3 million , $ 15.0 million and $ 14.1 million as of March 31, 2022, 2021, and 2020, respectively, and included short-term lease costs and sublease income.
+Added: The total operating lease costs including short-term lease costs were $ 21.2 million, $ 17.3 million and $ 15.0 million as of March 31, 2023, 2022, and 2021, respectively.
Total variable lease costs were not material during the year ended March 31, 2023, 2022 and 2021.
−Removed: The total operating and variable lease costs were included in cost of goods sold, marketing and selling, research and development, and general and administrative in the Company's consolidated statement of operations.
+Added: The total operating and variable lease costs were included in cost of goods sold, marketing and selling, research and development, and general and administrative in the Company's consolidated statements of operations.
Supplemental cash flow information related to operating leases (in thousands):
3 unchanged sentences
ROU assets obtained in the exchange for operating lease liabilities $ 43,093 $ 22,174 $ 15,659
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 107
Future lease payments included in the measurement of operating lease liabilities as of March 31, 2023 for the following five fiscal years and thereafter are as follows (in thousands):
3 unchanged sentences
Total lease payments $ 97,986
−Removed: Less interest ( 2,807 )
+Added: imputed interest ( 15,416 )
+Added: tenant improvement allowance (1)
Present value of lease liabilities $ 71,016
−Removed: As of March 31, 2022, the Company had entered into a lease for office space that has not yet commenced with future lease payments of $ 26.7 million, which are not reflected in the table above.
−Removed: This lease will commence in fiscal year 2023 with a lease term of 20 years and will be recorded in the financial statements upon lease commencement.
+Added: (1) The operating leases for two real estate facilities in the Americas region provide for tenant improvement allowances, for which the lessors reimburse the Company for the costs of constructing leasehold improvements up to $ 11.6 million.
Weighted-average lease terms and discount rates were as follows:
39 unchanged sentences
(1) The amounts for fiscal years 2023, 2022 and 2021 include immaterial impacts from the business acquisitions during the year.
−Removed: Refer to Note 3 to the consolidated financial statements.
Logitech International S.A.
1 unchanged sentence
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.