Logitech 2007 Annual Report Download - page 66

Labtec – Audio. In March 2001, we acquired Labtec Inc., a publicly traded provider of PC speakers,
headsets and microphones for $73 million in cash and stock, and $3.3 million in closing and transaction costs.
The acquisition strengthened our market presence in the audio interface space and furthered our expansion into
markets such as gaming, digital music and mobile telephony. We have also expanded the Labtec brand to
encompass additional product categories such as mice and webcams.
Connectix – Web Cameras. In September 1998, we acquired the QuickCam®PC Web camera business of
Connectix Corporation for $26.2 million in cash, including closing and other transaction costs. The acquisition
allowed us to take advantage of new technologies in digital imaging and to become a world leader in Web
cameras.
Principal Capital Expenditures
Our capital expenditures for property, plant and equipment for fiscal years 2007, 2006 and 2005 were
$47.2 million, $54.1 million and $40.5 million. During fiscal year 2007, our investments related primarily to
information system upgrades and normal expenditures for tooling costs, machinery and equipment and computer
equipment and software. During fiscal years 2006 and 2005, capital expenditures were mainly for construction of
a new factory in Suzhou, China as well as investments for information systems upgrades and normal
expenditures for tooling costs. Our capital requirements are primarily financed through cash flow from
operations.
Principal Equity Investments
As of March 31, 2007, the Company’s equity investments in various technology companies were
immaterial. During fiscal years 2007 and 2006, we did not make any equity investments. During fiscal year 2005,
we made an investment of $0.7 million. In fiscal year 2007, we sold our investment in Anoto Group AB for
$24.2 million and recognized a gain of $9.1 million. In fiscal year 2006, we sold or impaired investments
amounting to $1.6 million. We did not sell or impair any investments in fiscal year 2005.
B. Business Overview
Company Overview
Logitech is a world leader in personal peripherals for personal computers and other digital platforms,
developing and marketing innovative products in PC navigation, Internet communications, digital music, home-
entertainment control, interactive gaming and wireless devices. Our products include mice, keyboards, trackballs,
3D control devices, webcams, multimedia speakers, wireless and Internet music solutions for the home, headsets,
headphones, gaming controllers, gaming accessories, and advanced remote controls for home-entertainment
systems. We sell our products through a worldwide network of retail distributors and resellers, including
wholesale distributors, consumer electronics retailers, mass merchandisers, specialty electronics stores, computer
and telecom stores, value-added resellers, and online merchants, as well as original equipment manufacturers
(“OEMs”). Our sales through our retail channels to consumers comprise the significant majority of our revenues.
In fiscal year 2007, we generated net sales of $2.1 billion, operating income of $230.9 million, and net income of
$229.8 million.
We design our products to be easy to install and use, and to simplify the complexity of the user interaction
with technology. Often our products are the most frequent point of physical interaction between people and the
digital world. Consumers buy our retail products as add-on devices to enable or improve applications that require
dedicated devices, or as replacements that offer increased comfort, flexibility and functionality compared with
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