Logitech 2005 Annual Report Download - page 52

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company’s independent public accountants to attest to and report on management’s evaluation of those controls.
As a foreign private issuer, we are not required to comply with the requirements of Section 404 until our fiscal
year ending March 31, 2007. We are currently in the process of documenting and testing our internal controls
over financial reporting to comply with the requirements of Section 404. As a result, we are committing
substantial time and resources to evaluate and assess the effectiveness of our internal controls. During this
process, we may identify deficiencies in our system of internal controls over financial reporting that may require
remediation. Our evaluation and testing is ongoing, and there can be no assurance that we will not identify
significant deficiencies or material weaknesses that would require remediation.
ITEM 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
Logitech International S.A. was incorporated under the laws of Switzerland in 1981. In 1988, the Company
listed its shares in an initial public offering in Switzerland. In March 1997, the Company sold 4,000,000
registered shares from treasury in a U.S. initial public offering in the form of 4,000,000 American Depositary
Shares (ADSs), which were listed on the Nasdaq National Market. The address of the Company’s registered
office is CH-1143 Apples, Switzerland; and the telephone number there is 41-(0)21-800-53-54. The Company
has manufacturing facilities in Asia and offices in major cities in North America, Europe and Asia Pacific.
Important Events
During the past few years, Logitech has significantly broadened its product offerings and the markets in
which it sells them. During the same period, the Company’s sales have grown significantly. Most of this growth
has been organic, a result of the Company’s own product and marketing development activities. However, its
business has also grown as a result of a limited number of acquisitions that have expanded the Company’s
business into new product categories.
Connectix – Web Cameras. In September 1998, the Company acquired the QuickCam®PC web camera
business of Connectix Corporation for $26.2 million in cash, including closing and other transaction costs. The
acquisition was part of the Company’s strategy to pursue new areas of growth and to enter the PC web camera
market. The Connectix business has been integrated into the Company’s video division. The acquisition allowed
the Company to take advantage of new technologies in digital imaging and the growth of the market for PC web
cameras. With the success of its line of PC web cameras, the Company has emerged as a market leader in this
product category.
Labtec – Audio. In March 2001, Logitech acquired Labtec Inc., a publicly traded provider of PC speakers,
headsets and microphones based in Vancouver, Washington, for $73 million in cash and stock, and $3.3 million
in closing and transaction costs. The acquisition strengthened Logitech’s market presence in the audio interface
space and furthered its strategy to move the Company beyond the PC platform and into markets such as mobile
telephony. The Company integrated the Labtec business, and has expanded the Labtec brand to encompass
additional product categories such as mice and web cameras.
Intrigue – Advanced Remote Controls. In May 2004, the Company acquired Intrigue Technologies, Inc., a
privately held provider of advanced remote controls, based in Mississauga, Canada. Under the terms of the
purchase agreement, Logitech acquired all the outstanding shares of Intrigue for $29 million in cash, and $1.6
million in closing and transaction costs. The agreement also provides for possible performance-based payments
to the former shareholders of Intrigue tied to the achievement of remote control revenue targets. The acquisition
was part of the Company’s strategy to pursue new opportunities in the living room environment, positioning
Logitech at the convergence of consumer electronics and personal computing in the digital living room. The
Company has integrated Intrigue’s business into its existing operations.
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