Logitech 2005 Annual Report Download - page 69

Further, the EU has finalized the Waste Electrical and Electronic Equipment Directive, or WEEE. This
directive requires that producers of electrical goods be financially responsible for specified collection, recycling,
treatment and disposal of covered products. The original implementation date proposed by the WEEE Directive
for enactment of national legislation by EU member states was August 2004. Producers are to be financially
responsible under the WEEE Directive beginning in August 2005. Producer obligations also include specified
collection, recycling, treatment and disposal of equipment that had been placed in the EU marketplace prior to
August 2005, and has reached its end of life. To date, specific legal requirements have not been finalized by
many member states, with certain member states delaying implementation beyond August 2005. Until sufficient
national legislations are available for interpretation, it is not possible to accurately determine the financial impact
of complying with the WEEE Directive.
Similar environmental legislation may be enacted in other geographies, including federal and state
legislation in the United States, the cumulative impact of which could be significant. It is the Company’s policy
to apply strict standards for environmental protection to sites inside and outside the EU and the United States,
even if they are not subject to regulations imposed by local governments.
The effects on Logitech’s business of complying with other government regulations are limited to the cost
of allocation of the appropriate resources for agency fees and testing as well as the time it takes to obtain agency
approvals. The costs and schedule requirements are industry requirements and, therefore, do not represent an
undue burden relative to Logitech’s competitive position. As regulations change, the Company must modify its
products or processes to address these changes.
Seasonality
Sales of Logitech’s retail products are seasonal. Sales are typically highest during the third fiscal quarter,
due primarily to the increased demand for Logitech’s products during the year-end holiday buying season, and to
a lesser extent in the fourth fiscal quarter. Logitech sales in the first and second quarters can vary significantly as
a result of new product introductions and other factors. Accordingly, year-over-year comparisons are more
indicative of variability in the Company’s results of operations than quarter-over-quarter comparisons.
Materials
Logitech purchases some of its products and key components used in the Company’s products from single
or limited sources. In particular, a significant portion of Logitech’s cordless keyboards is single sourced. Refer to
the discussion in Item 3D Risk Factors – “We purchase key components and products from single or limited
sources, and our business and operating results could be harmed if supply were delayed or constrained or if there
were shortages of required components.”
C. Organizational Structure
The following lists the Company’s significant subsidiaries:
Name
Country of
Incorporation
Ownership
Interest
Logitech Inc. ......................................... U.S. 100%
Logitech Hong Kong, Ltd. .............................. HongKong 100%
Logitech Far East Ltd. .................................. Taiwan 100%
Suzhou Logitech Electronics Co. Ltd. ..................... China 100%
Logitech Europe S.A. .................................. Switzerland 100%
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