Logitech 2003 Annual Report Download - page 134

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repurchase of 1,509,000 shares for $52.4 million in open market transactions under this program. In February 2003,
the Board of Directors authorized an additional repurchase plan for up to CHF 75 million (approximately $55 million
based on exchange rates at the date of announcement) of the Company’s registered shares over the next twelve
months. At March 31, 2003, the Company had repurchased 238,000 shares under the new plan for $7.6 million in
open market transactions. During fiscal year 2003, the Company realized $15.6 million of proceeds from the sale of
shares pursuant to employee stock purchase and stock option plans.
The Company’s financing activities provided cash of $13.2 million for the year ended March 31, 2002. In April
2001, the Company borrowed $55 million under a bridge loan, bringing the total bridge loan for the Labtec
acquisition to $90 million. During the first quarter of fiscal 2002, the Company repaid short-term Labtec borrowings
of $19 million and long-term Labtec borrowings of $27 million. In June 2001, the Company sold 1% convertible
bonds denominated in Swiss francs in a registered offering in Switzerland. Net proceeds of $93 million were used to
repay the $90 million bridge loan. The Company also realized $16.4 million of proceeds from the sale of registered
shares and treasury shares to fulfill employee stock option and stock purchase plan requirements. In August through
October 2001, under a previously announced registered share buyback program, the Company repurchased 628,704
Logitech shares for $15.0 million in open market transactions.
Net cash provided by financing activities for the year ended March 31, 2001 was $45.2 million. In March 2001,
$35 million was borrowed from banks for the acquisition of Labtec. Also included in fiscal 2001 were $11.0 million
of proceeds from the sale of registered shares and treasury shares to fulfill employee stock option and stock purchase
plan requirements. This was partially offset by the repurchase of 39,000 registered shares for $1.1 million as part of a
stock buy-back program in the first quarter of fiscal 2001.
Contractual Obligations and Commitments
The following summarizes Logitech’s contractual obligations at March 31, 2003, and the effect such obligations
have on its liquidity and cash flow in future periods.
Total 2004 2005-2006 2007-2008 After
Convertible bonds........................................ 127,722$ -$ -$ 127,722$ -$
Swiss mortgage loan.................................... 3,409 - - - 3,409
Lines of credit.............................................. 8,856 8,856 - - -
Capital leases............................................... 1,730 1,246 484 - -
Operating leases........................................... 17,977 5,675 8,841 1,562 1,899
Fixed purchase commitments-inventory...... 71,875 71,875 - - -
Fixed purchase commitments-capital........... 9,093 6,183 2,794 116 -
Acquisition.................................................. 7,400 7,400 - - -
Total contractual obligations....................... 248,062$ 101,235$ 12,119$ 129,400$ 5,308$
Year ended March 31,
(in thousands)
The convertible bonds are convertible at any time into shares of Logitech registered shares at the conversion
price of CHF 62.40 (US $46.05) per share. Early redemption is permitted at any time at the accreted redemption
amount with the 5% redemption premium accreting ratably over five years. The bonds were denominated in Swiss
francs and as a result of the strengthening of the Swiss franc against the U.S. dollar since the issuance of the bonds,
the convertible bond liability has increased from $93 million to $127.7 million at March 31, 2003. Fixed purchase
commitments relate primarily to purchase commitments for inventory and capital expenditures. The capital
expenditure commitments are primarily for computer hardware and software, warehouse facilities and tooling. The
inventory purchase commitments are made in the normal course of operations and are to original design
manufacturers, contract manufacturers and other suppliers.
We have guaranteed the obligations of some of our contract manufacturers and original design manufacturers to
certain component suppliers. These guarantees have a term of one year and are automatically extended for one or
more additional years as long as a liability exists. The amount of the purchase obligations of these manufacturers
varies over time, and therefore the amounts subject to our guarantees similarly varies. At March 31, 2003, the
amount of these outstanding guaranteed purchase obligations was approximately $.9 million. Logitech does not
believe, based on historical experience and information currently available, that it is probable that any amounts will
be required to be paid under these guarantee arrangements.
Logitech indemnifies some of its suppliers and customers for losses arising from matters such as intellectual