Logitech 2013 Annual Report Download - page 207

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
accounting. The total consideration paid of $7.3 million was allocated based on estimated fair values to $7.0 million
of identifiable intangible assets and $0.1 million of assumed liabilities, with the remaining balance allocated to
goodwill. The intangible assets acquired are amortized on a straight-line basis over their estimated useful lives
of five years. The goodwill associated with the acquisition is not subject to amortization and is not expected to be
deductible for income tax purposes.
3Dconnexion
On March 31, 2011, the Company sold its equity interest in certain 3Dconnexion subsidiaries, the provider
of the Company’s 3D controllers, and its intellectual property rights related to the manufacture and sale of certain
3Dconnexion products, to a group of third party individuals and certain 3Dconnexion employees. The sale price
was $9.1 million, not including cash retained. Under the sale agreement, the Company will continue to manufacture
3Dconnexion products and sell to the buyers for a period of three years. The loss resulting from the sale was
not material.
Note 15 — Restructuring
The Company’s restructuring activities were mainly attributable to the peripherals operating segment. The
following table summarizes restructuring related activities during year ended March 31, 2013 (in thousands):
Tota l
Termination
Benefits
Lease
Exit Costs Other
Accrual balance at March 31, 2012 .............. $ — $ — $ — $ —
Charges................................. 43,705 41,088 1,308 1,309
Cash payments ........................... (30,324) (27,768) (1,233) (1,323)
Foreign exchange ......................... 77 63 — 14
Accrual balance at March 31, 2013 .............. $ 13,458 $ 13,383 $ 75 $ —
During the first quarter of fiscal year 2013, Logitech implemented a restructuring plan to simplify the
Company’s organization, to better align costs with its current business, and to free up resources to pursue growth
opportunities. A majority of the restructuring activity was completed during the three months ended June 30, 2012.
As part of this restructuring plan, the Company reduced its worldwide non-direct-labor workforce by approximately
340 employees. Charges and other costs related to the workforce reduction are presented as restructuring charges
in the consolidated statements of operations. During the year ended March 31, 2013, restructuring charges under
this plan included $25.9 million in termination benefits to affected employees, $1.3 million in legal, consulting, and
other costs as a result of the terminations, and $1.3 million in lease exit costs associated with the closure of existing
facilities. The Company incurred $3.0 million related to the discontinuance of certain product development efforts,
which were included in cost of goods sold. The Company also incurred $2.2 million from the re-measurement of its
Swiss defined benefit pension plan caused by the number of plan participants affected by this restructuring. This
amount was not included in restructuring charge since it related to prior services.
During the fourth quarter of fiscal year 2013, Logitech implemented an additional restructuring plan to
align the organization to its strategic priorities of increasing focus on mobility products, improving profitability in
PC-related products and enhancing global operational efficiencies. As part of this restructuring plan, the Company
reduced its worldwide non-direct-labor workforce by approximately 220 employees. Restructuring charges under
this plan are expected to primarily consist of severance and other one-time termination benefits. Charges and other
costs related to the workforce reduction are presented as restructuring charges in the consolidated statements of
operations. During the year ended March 31, 2013, restructuring charges under this plan included $15.2 million
Note 14 — Acquisitions and Divestitures (Continued)
ANNUAL REPORT
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