LOGITECH INTERNATIONAL SA, 10-Q filed on 10/27/2016
Quarterly Report
Document and Entity Information
6 Months Ended
Sep. 30, 2016
Oct. 7, 2016
Document and Entity Information
 
 
Entity Registrant Name
LOGITECH INTERNATIONAL SA 
 
Entity Central Index Key
0001032975 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2016 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--03-31 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
161,982,020 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q2 
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(USD ($))
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Income Statement [Abstract]
 
 
 
 
Net sales
$ 564,304 
$ 518,494 
$ 1,044,168 
$ 966,180 
Cost of goods sold
356,268 
345,977 
665,893 
635,730 
Amortization of intangible assets and purchase accounting effect on inventory
1,163 
2,776 
 
Gross profit
206,873 
172,517 
375,499 
330,450 
Operating expenses:
 
 
 
 
Marketing and selling
93,792 
78,833 
177,664 
154,629 
Research and development
32,632 
28,725 
64,583 
56,727 
General and administrative
25,216 
25,074 
50,956 
53,886 
Amortization of intangible assets and acquisition-related costs
1,748 
168 
3,041 
336 
Restructuring charges (credits), net
74 
3,146 
(11)
14,684 
Total operating expenses
153,462 
135,946 
296,233 
280,262 
Operating income
53,411 
36,571 
79,266 
50,188 
Interest income (expense), net
(90)
189 
61 
444 
Other expense, net
(683)
(737)
(1,691)
(1,756)
Income before income taxes
52,638 
36,023 
77,636 
48,876 
Provision for income taxes
5,593 
5,571 
8,650 
5,564 
Net income from continuing operations
47,045 
30,452 
68,986 
43,312 
Loss from discontinued operations, net of taxes
(12,355)
(17,778)
Net income
$ 47,045 
$ 18,097 
$ 68,986 
$ 25,534 
Net income (loss) per share - basic:
 
 
 
 
Continuing operations (in dollars per share)
$ 0.29 
$ 0.19 
$ 0.43 
$ 0.26 
Discontinued operations (in dollars per share)
$ 0.00 
$ (0.08)
$ 0.00 
$ (0.10)
Net income per share - basic (in dollars per share)
$ 0.29 
$ 0.11 
$ 0.43 
$ 0.16 
Net income (loss) per share - diluted:
 
 
 
 
Continuing operations (in dollars per share)
$ 0.28 
$ 0.18 
$ 0.42 
$ 0.26 
Discontinued operations (in dollars per share)
$ 0.00 
$ (0.07)
$ 0.00 
$ (0.11)
Net income per share - diluted (in dollars per share)
$ 0.28 
$ 0.11 
$ 0.42 
$ 0.15 
Weighted average shares used to compute net income (loss) per share:
 
 
 
 
Basic (in shares)
162,222 
163,515 
162,176 
163,957 
Diluted (in shares)
165,549 
165,841 
164,926 
166,352 
Cash dividend per share (in dollars per share)
$ 0.57 
$ 0.53 
$ 0.57 
$ 0.53 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 47,045 
$ 18,097 
$ 68,986 
$ 25,534 
Other comprehensive income (loss):
 
 
 
 
Currency translation gain (loss), net of taxes
550 
(8)
254 
2,610 
Defined benefit pension plans:
 
 
 
 
Net gain and prior service costs, net of taxes
17 
1,322 
327 
192 
Amortization included in operating expenses
432 
417 
865 
833 
Hedging gain (loss):
 
 
 
 
Deferred hedging gain (loss), net of taxes
564 
1,088 
1,529 
(1,174)
Reclassification of hedging loss (gain) included in cost of goods sold
155 
(28)
895 
(2,488)
Other comprehensive income (loss):
1,718 
2,791 
3,870 
(27)
Total comprehensive income
$ 48,763 
$ 20,888 
$ 72,856 
$ 25,507 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Mar. 31, 2016
Current assets:
 
 
Cash and cash equivalents
$ 395,201 
$ 519,195 
Accounts receivable, net
240,606 
142,778 
Inventories
268,110 
228,786 
Other current assets
40,201 
35,488 
Total current assets
944,118 
926,247 
Non-current assets:
 
 
Property, plant and equipment, net
84,797 
92,860 
Goodwill
249,765 
218,224 
Other intangible assets
53,063 
Other assets
84,517 
86,816 
Total assets
1,416,260 
1,324,147 
Current liabilities:
 
 
Accounts payable
333,543 
241,166 
Accrued and other current liabilities
213,910 
173,764 
Total current liabilities
547,453 
414,930 
Non-current liabilities:
 
 
Income taxes payable
60,360 
59,734 
Other non-current liabilities
92,413 
89,535 
Total liabilities
700,226 
564,199 
Commitments and contingencies (Note 12)
   
   
Shareholders’ equity:
 
 
Registered shares, CHF 0.25 par value: Issued and authorized shares - 173,106 at September 30 and March 31, 2016 Conditionally authorized shares - 50,000 at September 30 and March 31, 2016
30,148 
30,148 
Additional paid-in capital
8,851 
6,616 
Less shares in treasury, at cost — 11,009 at September 30, 2016 and 10,697 at March 31, 2016
(152,070)
(128,407)
Retained earnings
937,220 
963,576 
Accumulated other comprehensive loss
(108,115)
(111,985)
Total shareholders’ equity
716,034 
759,948 
Total liabilities and shareholders’ equity
$ 1,416,260 
$ 1,324,147 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (CHF)
In Thousands, except Per Share data, unless otherwise specified
Sep. 30, 2016
Mar. 31, 2016
Statement of Financial Position [Abstract]
 
 
Shares, par value (in CHF per share)
 0.25 
 0.25 
Shares, issued
173,106 
173,106 
Shares, authorized
173,106 
173,106 
Shares, conditionally authorized
50,000 
50,000 
Treasury, at cost, shares
11,009 
10,697 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Cash flows from operating activities:
 
 
Net income
$ 68,986 
$ 25,534 
Non-cash items included in net income:
 
 
Depreciation
23,616 
22,237 
Amortization of intangible assets
3,867 
1,226 
Loss (gain) on equity-method investment
(172)
180 
Share-based compensation expense
16,967 
13,257 
Excess tax benefits from share-based compensation
(4,130)
(1,163)
Deferred income taxes
(385)
952 
Changes in operating assets and liabilities, net of acquisitions:
 
 
Accounts receivable, net
(97,001)
(95,403)
Inventories
(28,317)
(55,442)
Other assets
(4,738)
(8,511)
Accounts payable
83,676 
50,361 
Accrued and other liabilities
25,387 
31,910 
Net cash provided by (used in) operating activities
87,756 
(14,862)
Cash flows from investing activities:
 
 
Purchases of property, plant and equipment
(14,758)
(31,277)
Investment in privately held companies
(480)
(480)
Acquisitions, net of cash acquired
(66,987)
Release of restricted cash
715 
Purchase of trading investments
(5,271)
(2,649)
Proceeds from sales of trading investments
5,296 
2,855 
Net cash used in investing activities
(81,485)
(31,551)
Cash flows from financing activities:
 
 
Payment of cash dividends
(93,093)
(85,900)
Purchases of treasury shares
(42,894)
(48,802)
Proceeds from sales of shares upon exercise of options and purchase rights
14,484 
11,103 
Tax withholdings related to net share settlements of restricted stock units
(11,047)
(3,502)
Excess tax benefits from share-based compensation
4,130 
1,163 
Net cash used in financing activities
(128,420)
(125,953)
Effect of exchange rate changes on cash and cash equivalents
(1,845)
1,102 
Net decrease in cash and cash equivalents
(123,994)
(171,264)
Cash and cash equivalents, beginning of the period
519,195 
537,038 
Cash and cash equivalents, end of the period
395,201 
365,774 
Non-cash investing activities:
 
 
Property, plant and equipment purchased during the period and included in period end liability accounts
4,008 
12,981 
The following amounts reflected in the statements of cash flows are included in discontinued operations:
 
 
Depreciation
1,420 
Amortization of other intangible assets
890 
Share-based compensation expense
428 
Purchases of property, plant and equipment
750 
Cash and cash equivalents, beginning of the period
3,659 
Cash and cash equivalents, end of the period
$ 0 
$ 4,639 
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $)
In Thousands, unless otherwise specified
Total
Registered Shares
Additional Paid-in Capital
Treasury Shares
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Balance at Mar. 31, 2015
$ 758,134 
$ 30,148 
$ 0 
$ (88,951)
$ 930,174 
$ (113,237)
Balance (in shares) at Mar. 31, 2015
 
173,106 
 
8,625 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
Total comprehensive income
25,507 
 
 
 
25,534 
(27)
Tax effects from share-based awards
(727)
 
(727)
 
 
 
Sales of shares upon exercise of options and purchase rights
11,103 
 
(2,452)
13,555 
 
 
Sales of shares upon exercise of options and purchase rights (in shares)
 
 
 
(987)
 
 
Issuance of shares upon vesting of restricted stock units
(3,502)
 
(8,363)
4,861 
 
Issuance of shares upon vesting of restricted stock units (in shares)
 
 
 
(411)
 
 
Share-based compensation expense
13,175 
 
13,175 
 
 
 
Purchase of treasury shares (in shares)
3,500 
 
 
3,502 
 
 
Purchase of treasury shares
(48,802)
 
 
(48,802)
 
 
Cash dividends
(85,915)
 
 
 
(85,915)
 
Balance at Sep. 30, 2015
668,973 
30,148 
1,633 
(119,337)
869,793 
(113,264)
Balance (in shares) at Sep. 30, 2015
 
173,106 
 
10,729 
 
 
Balance at Mar. 31, 2016
759,948 
30,148 
6,616 
(128,407)
963,576 
(111,985)
Balance (in shares) at Mar. 31, 2016
 
173,106 
 
10,697 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
Total comprehensive income
72,856 
 
 
 
68,986 
3,870 
Tax effects from share-based awards
(1,138)
 
(1,138)
 
 
 
Sales of shares upon exercise of options and purchase rights
14,484 
 
4,556 
9,928 
 
 
Sales of shares upon exercise of options and purchase rights (in shares)
 
 
 
(1,100)
 
 
Issuance of shares upon vesting of restricted stock units
(11,047)
 
(18,101)
9,303 
(2,249)
 
Issuance of shares upon vesting of restricted stock units (in shares)
 
 
 
(1,029)
 
 
Share-based compensation expense
16,918 
 
16,918 
 
 
 
Purchase of treasury shares (in shares)
2,400 
 
 
2,441 
 
 
Purchase of treasury shares
(42,894)
 
 
(42,894)
 
 
Cash dividends
(93,093)
 
 
 
(93,093)
 
Balance at Sep. 30, 2016
$ 716,034 
$ 30,148 
$ 8,851 
$ (152,070)
$ 937,220 
$ (108,115)
Balance (in shares) at Sep. 30, 2016
 
173,106 
 
11,009 
 
 
The Company and Summary of Significant Accounting Policies and Estimates
The Company and Summary of Significant Accounting Policies and Estimates
The Company and Summary of Significant Accounting Policies and Estimates

The Company
 
Logitech International S.A, together with its consolidated subsidiaries, ("Logitech" or the "Company") designs, manufactures and markets products that allow people to connect through music, gaming, video, computing, and other digital platforms.

The Company sells its products to a broad network of domestic and international customers, including direct sales to retailers and indirect sales through distributors.
Logitech was founded in Switzerland in 1981 and Logitech International S.A. has been the parent holding company of Logitech since 1988. Logitech International S.A. is a Swiss holding company with its registered office in Apples, Switzerland, which conducts its business through subsidiaries in the Americas, Europe, Middle East and Africa ("EMEA"), and Asia Pacific. Shares of Logitech International S.A. are listed on both the SIX Swiss Exchange under the trading symbol LOGN and the Nasdaq Global Select Market under the trading symbol LOGI.

Basis of Presentation
 
The condensed consolidated interim financial statements include the accounts of Logitech and its subsidiaries. All intercompany balances and transactions have been eliminated. The condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and therefore do not include all the information required by GAAP for complete financial statements. They should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2016, included in its Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on May 23, 2016. 

In the opinion of management, these condensed consolidated financial statements include all adjustments, consisting of only normal and recurring adjustments, necessary and in all material aspects, for a fair statement of the results of operations, comprehensive income, financial position, cash flows and changes in shareholders' equity for the periods presented. Operating results for the three and six months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2017, or any future periods.
 
Reclassification

Certain amounts from the comparative period in the accompanying unaudited condensed consolidated financial statements have been reclassified to conform to the condensed consolidated financial statement presentation as of and for the three and six months ended September 30, 2016.

Changes in Significant Accounting Policies
 
There have been no substantial changes in the Company’s significant accounting policies during the six months ended September 30, 2016 compared with the significant accounting policies described in its Annual Report on Form 10-K for the fiscal year ended March 31, 2016.
 
Use of Estimates
 
The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Examples of significant estimates and assumptions made by management involve the fair value of goodwill, intangible assets acquired from business acquisitions, warranty liabilities, accruals for discretionary customer programs, sales return reserves, allowance for doubtful accounts, inventory valuation, restructuring charges, contingent consideration from business acquisitions and periodical reassessment of its fair value, share-based compensation expense, uncertain tax positions, and valuation allowances for deferred tax assets. Although these estimates are based on management’s best knowledge of current events and actions that may impact the Company in the future, actual results could differ materially from those estimates.
 
Recent Accounting Pronouncements 

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-9, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-9"). ASU 2014-9 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 was originally to be effective for the Company on April 1, 2017. In July 2015, the FASB affirmed a one-year deferral of the effective date of the new revenue standard. The new standard will become effective for the Company on April 1, 2018. Early application is permitted but not before the original effective date of annual periods beginning after December 15, 2016. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The Company has not yet selected a transition method nor has it determined whether it will early adopt this guidance or the impact of the new standard on its condensed consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory (Topic 330)" ("ASU 2015-11"). Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market, with market value represented by replacement cost, net realizable value or net realizable value less a normal profit margin. The amendments in ASU 2015-11 require an entity to measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective in the first quarter of fiscal year 2018 for the Company, with early adoption permitted. The Company does not expect to early adopt this guidance and does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01 “Financial Instruments- Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10)”. The guidance is effective in the first quarter of fiscal year 2018 for the Company, with early adoption permitted. The Company does not expect to early adopt this guidance and does not believe that the adoption of this guidance will have a material impact on its condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)" ("ASU 2016-02"), which requires the recognition of lease assets and lease liabilities arising from operating leases in the statement of financial position. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the full effect that ASU 2016-02 will have on its condensed consolidated financial statements and will adopt the standard effective April 1, 2019.

In March 2016, the FASB issued ASU 2016-09 "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). The amendment simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. The Company is evaluating the effect that ASU 2016-09 will have on its condensed consolidated financial statements and the timing of the adoption of this standard.

In August 2016, the FASB issued ASU 2016-15 "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments". The amendment gives guidance and reduces diversity in practice with respect to certain types of cash flows. The Company has early adopted this guidance during the second quarter of fiscal year 2017 and the adoption did not impact its consolidated financial statements.
Discontinued operations
Discontinued operations
Discontinued operations

During the third quarter of fiscal year 2016, the Company's Board of Directors approved a plan to divest the Lifesize video conferencing business. Subsequently, on December 28, 2015 in the fourth quarter of fiscal year 2016, the Company and Lifesize, Inc.(“Lifesize”), a wholly owned subsidiary of the Company which held the assets of the Company’s video conferencing reportable segment, entered into a stock purchase agreement (the “Stock Purchase Agreement”) with entities affiliated with three venture capital firms - Redpoint Ventures, Sutter Hill Ventures and Meritech Capital Partners (the "Venture Investors"). Pursuant to the terms of the Stock Purchase Agreement, the Company sold 2.5 million shares of Series B Preferred Stock of Lifesize to the Venture Investors for cash proceeds of $2.5 million and retained 12 million non-voting shares of Series A Preferred Stock of Lifesize. The shares of Series A Preferred Stock of Lifesize retained by the Company represent 37.5% of the total shares outstanding immediately after the closing of the transactions (the "Closing"). Lifesize also issued 17.5 million shares of Series B Preferred Stock to the Venture Investors for cash proceeds of $17.5 million. The shares of Series B Preferred Stock held by the Venture Investors represent 62.5% of the total shares outstanding immediately after the Closing. In addition, Lifesize reserved 8 million shares of common stock for issuance pursuant to a stock plan to be adopted by Lifesize following the Closing, none of which are issued or outstanding at the Closing. The divestiture of the Lifesize video conferencing business was effective on December 28, 2015. The Stock Purchase Agreement contains representations, warranties and covenants of the parties and includes certain indemnification obligations of the Company to the Venture Investors. See “Note 12 - Commitments and Contingencies” to the condensed consolidated financial statements for more information. The Stock Purchase Agreement also contains certain post-closing working capital adjustments. Post-closing continuing involvement with the discontinued operations includes certain customary services and support which are expected to be provided to Lifesize during the transition period from December 28, 2015 until approximately the end of the third quarter of fiscal year 2017.

The Company has classified the results of its Lifesize video conferencing business as discontinued operations in its condensed consolidated statements of operations for all periods presented since the disposition of the Lifesize video conferencing business represents a strategic shift that has a major effect on the Company's operations and financial results. The retained Series A Preferred Stock gives the Company no voting rights or any other significant influence over the disposed Lifesize video conferencing business, and therefore is accounted for as a cost method investment which is initially recognized at fair value of $5.6 million at the date of disposition of the Lifesize video conferencing business.

Discontinued operations include results of the Lifesize video conferencing business. Discontinued operations also include other costs incurred by Logitech to effect the divestiture of the Lifesize video conferencing business. These costs include transaction charges, advisory and consulting fees and restructuring cost related to the Lifesize video conferencing business.

The following table presents financial results of the video conferencing segment classified as total discontinued operations for the three and six months ended September 30, 2015 (in thousands):

 
Three Months Ended
September 30,
 
Six Months Ended
September 30,

 
2015
 
2015
Net sales
 
$
21,368

 
$
44,002

Cost of goods sold
 
7,874

 
16,712

Gross profit
 
13,494

 
27,290

Operating expenses:
 
 

 


Marketing and selling
 
11,044

 
22,675

Research and development
 
6,005

 
11,668

General and administrative
 
1,777

 
3,469

Restructuring charges, net
 
5,550

 
7,007

Total operating expenses
 
24,376

 
44,819

Operating loss from discontinued operations
 
(10,882
)
 
(17,529
)
Interest expense and other expense, net
 
(40
)
 
(133
)
Loss from discontinued operations before income taxes
 
(10,922
)
 
(17,662
)
Provision for income taxes
 
1,433

 
116

Net loss from discontinued operations
 
$
(12,355
)
 
$
(17,778
)
Business Acquisitions
Business Acquisitions
Business Acquisitions

Jaybird Acquisition

On April 20, 2016 ("Acquisition Date"), the Company acquired all of the equity interest of JayBird, LLC (“Jaybird”), a Utah limited liability company that develops Bluetooth earbuds, activity trackers, and accessories for sports and active lifestyles, for a purchase price of $54.2 million in cash, including a working capital adjustment and payment of a line-of-credit on behalf of Jaybird, with an additional earn-out of up to $45.0 million based on the achievement of certain net revenue growth targets over approximately a two year period (the "Jaybird Acquisition"). If the net revenue growth targets are met, the Company will pay $25.0 million and $20.0 million in fiscal years 2018 and 2019, respectively. The Jaybird Acquisition is expected to accelerate the Company's entry into the wireless wearables space.

The Jaybird transaction meets the definition of a business and is accounted for using the acquisition method. The fair value of consideration transferred for the Jaybird Acquisition consists of the following (in thousands):
 
Purchase price
 
$
54,242

Fair value of contingent consideration (earn-out)
 
18,000

Fair value of total consideration transferred
 
$
72,242



The fair value of the earn-out payments at the Acquisition Date was determined by providing risk adjusted earnings projections using a Monte Carlo Simulation, which includes inputs that are not observable in the market, and therefore representing a Level 3 measurement. The fair value of this earn-out is discussed further in "Note 8 - Fair Value Measurements" to the condensed consolidated financial statements.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Acquisition Date (in thousands):
 
 
Estimated Fair Value
Cash and cash equivalents
 
$
255

Accounts receivable
 
272

Inventories
 
10,214

Other current assets
 
611

Property, plant, and equipment
 
1,165

Intangible assets
 
50,280

Other assets
 
27

Total identifiable assets acquired
 
62,824

Accounts payable
 
(10,513
)
Accrued liabilities
 
(1,227
)
Other current liabilities
 
(5,226
)
Other long-term liabilities
 
(283
)
Net identifiable assets acquired
 
$
45,575

Goodwill
 
26,667

Net assets acquired
 
$
72,242



Goodwill is primarily attributable to opportunities and economies of scale from combining the operations and technologies of Logitech and Jaybird. Goodwill is expected to be deductible for tax purposes.

Inventory is estimated at net realizable value, which uses the estimated selling prices, less the cost of disposal and a reasonable profit allowance for the selling efforts. Upon sales of the inventory, the difference between the fair value of the inventories and the amount recognized by the acquiree immediately before the acquisition date, which is $0.7 million, is recognized in "amortization of intangibles assets and purchase accounting effect on inventory" in the condensed consolidated statements of operations.

The Company included Jaybird's estimated fair value of assets acquired and liabilities assumed in its condensed consolidated balance sheets beginning April 20, 2016. The results of operations for Jaybird have been included in the Company's condensed consolidated statements of operations from the acquisition date. For the three and six months ended September 30, 2016, Jaybird contributed $15.6 million and $29.9 million of net sales, respectively.

The following table sets forth the components of identifiable intangible assets acquired at their estimated fair values and their estimated useful lives as of the Acquisition Date (Dollars in thousands):
 
Preliminary Fair Value
Estimated Useful Life (years)
Developed technology
$
18,450

4
In-process research & development ("IPR&D")
2,550

Not Applicable
Customer relationships
19,900

8
Trade name
9,380

6
Total intangible assets acquired
$
50,280

 


Except for IPR&D, intangible assets acquired as a result of the Jaybird Acquisition are being amortized over their estimated useful lives using the straight-line method of amortization. Amortization of developed technology of $1.2 million and $2.1 million, respectively, during the three and six months ended September 30, 2016 is included in "Amortization of intangible assets and purchase accounting effect of inventory" in the gross profit of the condensed consolidated statements of operations. Amortization of the intangible assets of customer relationship and trade name of $1.0 million and $1.8 million, respectively, during the three and six months ended September 30, 2016 is included in "amortization of intangible assets and acquisition-related costs" in the operating expense of the condensed consolidated statements of operations.

Developed technology relates to existing bluetooth wireless sports earbuds. The economic useful life was determined based on the technology cycle related to developed technology of existing products, as well as the cash flows anticipated over the forecasted periods.

Customer relationships represent the fair value of future projected revenue that will be derived from sales of products to existing customers of Jaybird. The economic useful life was determined based on historical customer turnover rates and the industry benchmarks.

Trade name relates to the “Jaybird” trade name. The economic useful life was determined based on the expected life of the trade name and the cash flows anticipated over the forecasted periods.

The value of developed technology and trade names was estimated using the relief-from-royalty method, an income approach (Level 3), which estimates the cost savings that accrue to the owner of the intangible assets that would otherwise be payable as royalties or license fees on revenues earned through the use of the asset. A royalty rate is applied to the projected revenues associated with the intangible assets to determine the amount of savings, which is then discounted to determine the fair value. The developed technology and trade names were valued using royalty rates of 10% and 2.5%, respectively, and both were discounted at a rate of 16%.

The value of customer relationships was estimated using the excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows. To reflect the fact that certain other assets contribute to the cash flows generated, the returns for these contributory assets were removed to arrive at estimated cash flows solely attributable to the customer relationships, which was discounted at a rate of 16%.

The IPR&D is accounted for as an indefinite-lived intangible asset and is not amortized until completion or abandonment of the associated research and development efforts. If the research and development efforts are completed, the IPR&D intangible asset will be amortized over the estimated useful life to be determined as of the date the efforts are completed. IPR&D is tested for impairment annually or periodically if an indicator of impairment exists during the period until completion. The expected release date of the IPR&D is during the period from fiscal year 2017 to fiscal year 2018.

The Company believes the amounts of purchased intangible assets recorded above represent the fair values of, and approximate the amounts a market participant would pay for, these intangible assets as of the Acquisition Date.

Saitek Acquisition

On September 15, 2016, the Company completed the acquisition of the Saitek product line for a total cash consideration of approximately $13.0 million (the "Saitek Acquisition"). Out of the total consideration, $6.7 million was attributed to intangible assets, $4.9 million was attributed to goodwill, and $1.4 million was attributed to net tangible assets acquired. The Saitek Acquisition is expected to enhance the breadth and depth of the Company's product offerings and expand the Company's engineering capabilities in simulation products. The amount of goodwill generated from the Saitek Acquisition is deductible for tax purposes and is not material. The Company did not generate any revenue from the Saitek product line during the reporting period.

The Company incurred acquisition-related costs for both the Jaybird Acquisition and the Saitek Acquisition of approximately $0.8 million and $1.2 million, in aggregate, for the three and six months ended September 30, 2016, respectively. The acquisition-related costs are included in "amortization of intangible assets and acquisition-related costs" in the operating expense of the condensed consolidated statements of operations.

Pro forma results of operations for both the Jaybird Acquisition and the Saitek Acquisition have not been presented because they are not material to the condensed consolidated statements of operations individually or in aggregate.

The fair value of identifiable intangible assets acquired was based on estimates and assumptions made by management at the time of the acquisitions. As additional information becomes available, such as finalization of the estimated fair value of the assets acquired and liabilities assumed and the fair value of contingent consideration, the Company may revise its preliminary purchase price allocations during the remainder of the measurement periods (which will not exceed 12 months from the acquisition dates). Any such revisions or changes may be material as we finalize the fair values of the tangible and intangible assets acquired and liabilities assumed.
Net Income per Share
Net Income per Share
Net Income per Share
 
The computations of basic and diluted net income per share for the Company were as follows (in thousands, except per share amounts):
 
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
 
2016
 
2015
 
2016
 
2015
Net Income (loss):
 
 
 
 
 
 
 
 
Continuing operations
 
$
47,045

 
$
30,452

 
$
68,986

 
$
43,312

Discontinued operations
 

 
(12,355
)
 

 
(17,778
)
Net income
 
$
47,045

 
$
18,097

 
$
68,986

 
$
25,534

 
 
 
 
 
 
 
 
 
Shares used in net income (loss) per share computation:
 
 

 
 

 
 

 
 

Weighted average shares outstanding - basic
 
162,222

 
163,515

 
162,176

 
163,957

Effect of potentially dilutive equivalent shares
 
3,327

 
2,326

 
2,750

 
2,395

Weighted average shares outstanding - diluted
 
165,549

 
165,841

 
164,926

 
166,352

 
 
 
 
 
 
 
 
 
Net income (loss) per share - basic:
 
 

 
 

 
 

 
 

Continuing operations
 
$
0.29

 
$
0.19

 
$
0.43

 
$
0.26

Discontinued operations
 

 
(0.08
)
 

 
(0.10
)
Net income per share - basic
 
$
0.29

 
$
0.11

 
$
0.43

 
$
0.16

 
 
 
 
 
 
 
 
 
Net income (loss) per share - diluted:
 
 
 
 
 
 
 
 
Continuing operations
 
$
0.28

 
$
0.18

 
$
0.42

 
$
0.26

Discontinued operations
 

 
(0.07
)
 

 
(0.11
)
Net income per share - diluted
 
$
0.28

 
$
0.11

 
$
0.42

 
$
0.15


 
Share equivalents attributable to outstanding stock options and restricted stock units ("RSUs") of 2.9 million and 7.8 million for the three months ended September 30, 2016 and 2015, respectively, and 3.1 million and 7.6 million for the six months ended September 30, 2016 and 2015, respectively, were anti-dilutive and excluded from the calculation of diluted net income per share.
Employee Benefit Plans
Employee Benefit Plans
Employee Benefit Plans
 
Employee Share Purchase Plans and Stock Incentive Plans
 
As of September 30, 2016, the Company offers the 2006 ESPP (2006 Employee Share Purchase Plan (Non-U.S.)), the 1996 ESPP (1996 Employee Share Purchase Plan (U.S.)), the 2006 Plan (2006 Stock Incentive Plan) and the 2012 Plan (2012 Stock Inducement Equity Plan).

The following table summarizes the share-based compensation expense and related tax benefit recognized for the three and six months ended September 30, 2016 and 2015, excluding balances classified as discontinued operations (in thousands):
 
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
 
2016
 
2015
 
2016
 
2015
Cost of goods sold
 
$
638

 
$
580

 
$
1,313

 
$
1,185

Marketing and selling
 
3,244

 
1,997

 
6,681

 
4,061

Research and development
 
917

 
655

 
1,831

 
1,328

General and administrative
 
3,651

 
3,074

 
7,142

 
6,248

Restructuring
 

 

 

 
7

Total share-based compensation expense
 
8,450

 
6,306

 
16,967

 
12,829

Income tax benefit
 
(1,886
)
 
(1,160
)
 
(3,701
)
 
(2,497
)
Total share-based compensation expense, net of income tax
 
$
6,564

 
$
5,146

 
$
13,266

 
$
10,332


 
As of September 30, 2016 and 2015, the Company capitalized $0.4 million of stock-based compensation expenses as inventory.
 
Defined Benefit Plans
 
Certain of the Company’s subsidiaries sponsor defined benefit pension plans or non-retirement post-employment benefits covering substantially all of their employees. Benefits are provided based on employees’ years of service and earnings, or in accordance with applicable employee benefit regulations. The Company’s practice is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax regulations. The cost recorded of $2.8 million and $2.9 million for the three months ended September 30, 2016 and 2015, respectively, and $5.6 million and $5.8 million for the six months ended September 30, 2016 and 2015, respectively, was primarily related to service costs.
Income Taxes
Income Taxes
Income Taxes
 
The Company is incorporated in Switzerland but operates in various countries with differing tax laws and rates. Further, a portion of the Company’s income before taxes and the provision for (benefit from) income taxes are generated outside of Switzerland.
 
The income tax provision for the three months ended September 30, 2016 was $5.6 million based on an effective income tax rate of 10.6% of pre-tax income, compared to an income tax provision of $5.6 million based on an effective income tax rate of 15.5% of pre-tax income for the three months ended September 30, 2015. The income tax provision for the six months ended September 30, 2016 was $8.7 million based on an effective income tax rate of 11.1% of pre-tax income, compared to an income tax provision of $5.6 million based on an effective income tax rate of 11.4% for the six months ended September 30, 2015

The change in the effective income tax rate for the three and six months ended September 30, 2016, compared to the three and six months ended September 30, 2015, is due to the mix of income and losses in the various tax jurisdictions in which the Company operates. In the six months ended September 30, 2015, there was a discrete tax benefit of $2.2 million from the preferential income tax rate reduction pursuant to the High and New Technology Enterprise Program in China.

As of September 30 and March 31, 2016, the total amount of unrecognized tax benefits due to uncertain tax positions was $72.0 million and $69.9 million, respectively, all of which would affect the effective income tax rate if recognized.
 
The Company had $60.4 million in non-current income taxes payable and $0.1 million in current income taxes payable, including interest and penalties, related to our income tax liability for uncertain tax positions as of September 30, 2016 compared to $59.7 million in non-current income taxes payable and $0.1 million in current income taxes payable as of March 31, 2016.
 
The Company recognizes interest and penalties related to unrecognized tax positions in income tax expense. As of September 30 and March 31, 2016, the Company had $3.8 million and $3.6 million, respectively, of accrued interest and penalties related to uncertain tax positions.
 
Although the Company has adequately provided for uncertain tax positions, the provisions on these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved. During fiscal year 2017, the Company will continue to review its tax positions and provide for or reverse unrecognized tax benefits as issues arise. During the next 12 months, it is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly due to changes in tax law in various jurisdictions, new tax audits and changes in the U.S. dollar as compared to other currencies. Excluding these factors, uncertain tax positions may decrease by as much as $15.5 million from the lapse of the statutes of limitations in various jurisdictions during the next 12 months.
Balance Sheet Components
Balance Sheet Components
Balance Sheet Components
 
The following table presents the components of certain balance sheet asset amounts as of September 30 and March 31, 2016 (in thousands): 
 
 
September 30,
2016
 
March 31,
2016
Accounts receivable, net:
 
 

 
 

Accounts receivable
 
$
446,430

 
$
332,553

Allowance for doubtful accounts
 
(805
)
 
(667
)
Allowance for sales returns
 
(22,090
)
 
(18,526
)
Allowance for cooperative marketing arrangements
 
(30,969
)
 
(28,157
)
Allowance for customer incentive programs
 
(57,472
)
 
(60,872
)
Allowance for pricing programs
 
(94,488
)
 
(81,553
)
 
 
$
240,606

 
$
142,778

Inventories:
 
 

 
 

Raw materials
 
$
35,805

 
$
48,489

Finished goods
 
232,305

 
180,297

 
 
$
268,110

 
$
228,786

Other current assets:
 
 

 
 

Income tax and value-added tax receivables
 
$
21,184

 
$
22,572

Prepaid expenses and other assets
 
19,017

 
12,916

 
 
$
40,201

 
$
35,488

Property, plant and equipment, net:
 
 

 
 

Property, plant and equipment at cost
 
$
376,287

 
371,212

Less: accumulated depreciation and amortization
 
(291,490
)
 
(278,352
)
 
 
$
84,797

 
$
92,860

Other assets:
 
 

 
 

Deferred tax assets
 
$
54,187

 
$
56,208

Trading investments for deferred compensation plan
 
14,826

 
14,836

Investments held in privately held companies
 
9,900

 
9,247

Other assets
 
5,604

 
6,525

 
 
$
84,517

 
$
86,816






The following table presents the components of certain balance sheet liability amounts as of September 30 and March 31, 2016 (in thousands): 
 
 
September 30,
2016
 
March 31,
2016
Accrued and other current liabilities:
 
 

 
 

Accrued personnel expenses
 
$
64,163

 
$
46,025

Indirect customer incentive programs
 
32,666

 
28,721

Warranty accrual
 
13,528

 
11,880

Employee benefit plan obligation
 
1,738

 
1,285

Income taxes payable
 
2,606

 
1,553

Contingent consideration for business acquisition - current portion
 
13,494

 

Other current liabilities
 
85,715

 
84,300

 
 
$
213,910

 
$
173,764

Non-current liabilities:
 
 

 
 

Warranty accrual
 
$
8,084

 
$
8,500

Obligation for deferred compensation plan
 
14,826

 
14,836

Employee benefit plan obligation
 
53,335

 
53,909

Deferred rent
 
8,656

 
9,424

Deferred tax liability
 
1,665

 
1,665

Contingent consideration for business acquisition - non-current portion
 
4,506

 

Other non-current liabilities
 
1,341

 
1,201

 
 
$
92,413

 
$
89,535

Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
 
Fair Value Measurements
 
The Company considers fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company utilizes the following three-level fair value hierarchy to establish the priorities of the inputs used to measure fair value:
 
Level 1 — Quoted prices in active markets for identical assets or liabilities.
 
Level 2 — Observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
 
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis, excluding assets related to the Company’s defined benefit pension plans, classified by the level within the fair value hierarchy (in thousands): 
 
 
September 30, 2016
 
March 31, 2016
 
 
Level 1
 
Level 2
 
Level 3
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 

 
 
 
 
 
 

 
 

 
 

Cash equivalents
 
$
100,742

 
$

 
$

 
$
10,000

 
$

 
$

 
 
 

 
 

 
 

 
 

 
 

 
 

Trading investments for deferred compensation plan:
 
 

 
 
 
 
 
 

 
 

 
 

Money market funds
 
$
3,051

 
$

 
$

 
$
3,467

 
$

 
$

Mutual funds
 
11,775

 

 

 
11,369

 

 

Total of trading investments for deferred compensation plan
 
$
14,826

 
$

 
$

 
$
14,836

 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
Currency exchange derivative assets
 
$

 
$
909

 
$

 
$

 
$
10

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related contingent consideration
 
$

 
$

 
$
18,000

 
$

 
$

 
$

Currency exchange derivative liabilities
 
$

 
$
41

 
$

 
$

 
$
1,132

 
$


 
Investment Securities
 
The marketable securities for the Company's deferred compensation plan are recorded at a fair value of $14.8 million as of September 30, 2016 and March 31, 2016, based on quoted market prices. Quoted market prices are observable inputs that are classified as Level 1 within the fair value hierarchy. Unrealized trading gains / (losses) related to trading securities for the three or six months ended September 30, 2016 and 2015 were not material and are included in "other expense, net" in the Company's condensed consolidated statements of operations.

Acquisition-related contingent consideration

The acquisition-related contingent consideration liability arising from the Jaybird Acquisition (see "Note 3 - Business Acquisitions" to the condensed consolidated financial statements for more information) represents the future potential earn-out payments of up to $45 million based on the achievement of certain net revenue growth targets over approximately a two year period. If the net revenue growth targets are met, the Company will pay $25 million and $20 million in fiscal years 2018 and 2019, respectively. The fair value of the earn-out as of the Acquisition Date was $18 million, which was determined by using a Monte Carlo Simulation that includes significant unobservable inputs such as a risk-adjusted discount rate of 16% and projected revenues of Jaybird over the earn-out period. Any changes to the significant unobservable inputs used could have a material impact on future results of operations. Actual payment of contingent consideration in the future could be different from the current fair value of the contingent consideration. The fair value of the contingent consideration is remeasured at each reporting period based on the inputs on the date of remeasurement. The fair value of the contingent consideration was $18 million as of September 30, 2016.
 
Assets Measured at Fair Value on a Nonrecurring Basis

The Company’s non-marketable cost method investments, and non-financial assets, such as goodwill, intangible assets and property, plant and equipment, are recorded at fair value only upon initial recognition or if an impairment is recognized. There were no impairments of long-lived assets during the three and six months ended September 30, 2016 or 2015.

Non-marketable cost method investments. These investments are classified as Level 3 due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment. When certain events or circumstances indicate that impairment may exist, the Company revalues the investments using various assumptions, including the financial metrics and ratios of comparable public companies.

The primary investment included in non-marketable investments is the Company’s investment in Series A Preferred Stock of Lifesize recorded at the fair value of $5.6 million on the date of the Lifesize divestiture.
 
The aggregate recorded amount of cost method investments included in other assets as of September 30, 2016 and March 31, 2016 was $7.4 million.
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments
 
Under certain agreements with the respective counterparties to the Company’s derivative contracts, subject to applicable requirements, the Company is allowed to net settle transactions of the same type with a single net amount payable by one party to the other. However, the Company presents its derivative assets and derivative liabilities on a gross basis on the condensed consolidated balance sheets as of September 30, 2016 and March 31, 2016.

The fair values of the Company’s derivative instruments not designated as hedging instruments were not material as of September 30, 2016 or March 31, 2016. The following table presents the fair values of the Company’s derivative instruments designated as hedging instruments on a gross basis in other current assets or accrued and other current liabilities on its condensed consolidated balance sheets as of September 30, 2016 and March 31, 2016 (in thousands):
 
 
Derivatives
 
 
Asset
 
Liability
 
 
September 30,
2016
 
March 31,
2016
 
September 30,
2016
 
March 31,
2016
Cash flow hedges
 
$
909

 
$
10

 
$

 
$
1,038


 
The amount of gain (loss) recognized on derivatives not designated as hedging instruments were not material in all periods presented herein. The following table presents the amounts of gains (losses) on the Company’s derivative instruments designated as hedging instruments and their locations on its condensed consolidated statements of operations and condensed consolidated statements of comprehensive income for the three and six months ended September 30, 2016 and 2015 (in thousands):

 
 
Three Months Ended
September 30,
 
 
Amount of Gain (Loss)
Deferred as a Component of Accumulated
Other Comprehensive Loss After Reclassification to Costs of Goods Sold
 
Amount of Loss (Gain)
Reclassified from Accumulated Other Comprehensive Loss to
Costs of Goods Sold
 
 
2016
 
2015
 
2016
 
2015
Cash flow hedges
 
$
719

 
$
1,060

 
$
155

 
$
(28
)


 
 
Six Months Ended
September 30,
 
 
Amount of Gain (Loss)
Deferred as a Component of Accumulated
Other Comprehensive Loss After Reclassification to Costs of Goods Sold
 
Amount of Loss (Gain)
Reclassified from Accumulated Other Comprehensive Loss to
Costs of Goods Sold
 
 
2016
 
2015
 
2016
 
2015
Cash flow hedges
 
$
2,424

 
$
(3,662
)
 
$
895

 
$
(2,488
)

 
Cash Flow Hedges
 
The Company enters into currency exchange forward contracts to hedge against exposure to changes in currency exchange rates related to its subsidiaries’ forecasted inventory purchases. The Company has one entity with a Euro functional currency that purchases inventory in U.S. Dollars. The primary risk managed by using derivative instruments is the currency exchange rate risk. However, there can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in currency exchange rates. The Company has designated these derivatives as cash flow hedges. These hedging contracts mature within four months, and are denominated in the same currency as the underlying transactions. Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of accumulated other comprehensive loss until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. The Company assesses the effectiveness of the hedges by comparing changes in the spot rate of the currency underlying the forward contract with changes in the spot rate of the currency in which the forecasted transaction will be consummated. If the underlying transaction being hedged fails to occur or if a portion of the hedge does not generate offsetting changes in the currency exposure of forecasted inventory purchases, the Company immediately recognizes the gain or loss on the associated financial instrument in other expense, net. Such gains and losses were not material during the three and six months ended September 30, 2016 and 2015. Cash flows from such hedges are classified as operating activities in the condensed consolidated statements of cash flows. The notional amounts of currency exchange forward contracts outstanding related to forecasted inventory purchases were $76.9 million and $39.8 million at September 30, 2016 and March 31, 2016, respectively. The Company estimates that $0.6 million of net gains related to its cash flow hedges included in accumulated other comprehensive loss as of September 30, 2016 will be reclassified into earnings within the next 12 months.
 
Other Derivatives
 
The Company also enters into currency exchange forward and swap contracts to reduce the short-term effects of currency exchange rate fluctuations on certain foreign currency receivables or payables. These contracts generally mature within one month. The primary risk managed by using forward and swap contracts is the currency exchange rate risk. The gains or losses on currency exchange contracts are recognized in other expense, net based on the changes in fair value.
 
The notional amounts of currency exchange forward and swap contracts outstanding as of September 30 and March 31, 2016 relating to foreign currency receivables or payables were $56.7 million and $63.7 million, respectively. Open forward and swap contracts outstanding as of September 30, 2016 and March 31, 2016 consisted of contracts in Mexican Pesos, Japanese Yen, British Pounds, Taiwanese Dollars and Australian Dollars to be settled at future dates at pre-determined exchange rates.
 
The fair value of all currency exchange forward and swap contracts is determined based on observable market transactions of spot currency rates and forward rates. Cash flows from these contracts are classified as operating activities in the condensed consolidated statements of cash flows.
Goodwill
Goodwill
Goodwill

The Company conducts its impairment analysis of goodwill annually at December 31 and as necessary if changes in facts and circumstances indicate that it is more likely than not that the fair value of the Company’s reporting units may be less than its carrying amount. There have been no events or circumstances during the six months ended September 30, 2016 that have required the Company to perform an interim assessment of goodwill.
 
The following table summarizes the activities in the Company’s goodwill balance during the six months ended September 30, 2016 (in thousands):
As of March 31, 2016
 
$
218,224

Business acquisitions (See Note 3)
 
31,553

Currency impact
 
(12
)
As of September 30, 2016
 
$
249,765

Financing Arrangements
Financing Arrangements
Financing Arrangements
 
The Company had several uncommitted, unsecured bank lines of credit aggregating $44.6 million as of September 30, 2016. There are no financial covenants under these lines of credit with which the Company must comply. As of September 30, 2016, the Company had outstanding bank guarantees of $12.4 million under these lines of credit. There was no borrowing outstanding under these lines of credit as of September 30, 2016 or March 31, 2016.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
 
Product Warranties
 
All of the Company’s peripherals products sold are covered by warranty to be free from defects in material and workmanship.  For products launched prior to April 1, 2014, the standard warranty period was up to five years. Starting from April 1, 2014, the standard warranty for all new products launched was changed to two years from date of purchase for European Countries and generally one year from date of purchase for all other countries. At the time of sale, the Company accrues a warranty liability for estimated costs to provide products, parts or services to repair or replace products in satisfaction of the warranty obligation. The Company’s estimate of costs to fulfill its warranty obligations is based on historical experience and expectations of future conditions. When the Company experiences changes in warranty claim activity or costs associated with fulfilling those claims, the warranty liability is adjusted accordingly.
 
Changes in the Company’s warranty liability for the three and six months ended September 30, 2016 and 2015 were as follows (in thousands): 
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Beginning of the period
$
21,752

 
$
21,284

 
$
20,380

 
$
21,710

Assumed from business acquisition
150

 

 
1,963

 

Provision
3,163

 
1,879

 
6,340

 
3,792

Settlements
(3,452
)
 
(2,677
)
 
(6,880
)
 
(5,245
)
Currency impact
(1
)
 
(87
)
 
(191
)
 
142

End of the period
$
21,612

 
$
20,399

 
$
21,612

 
$
20,399


 
Other Contingencies
 
In April 2016, the Company entered into a settlement with the SEC related to the accounting for Revue inventory valuation reserves that resulted in the restatement described in the Fiscal Year 2014 Annual Report on Form 10-K, revision to its consolidated financial statements concerning warranty accruals and amortization of intangible assets presented in its Amended Annual Report on Form 10-K/A, filed on August 7, 2013, and its transactions with a distributor for Fiscal Year 2007 through Fiscal Year 2009. The Company entered into the settlement without admitting or denying the findings of the SEC’s investigation and paid a civil penalty of $7.5 million in April 2016.
 
Guarantees
 
Logitech Europe S.A. guaranteed payments of certain third-party contract manufacturers’ purchase obligations. As of September 30, 2016, the maximum amount of this guarantee was $3.8 million, of which $1.9 million of guaranteed purchase obligations were outstanding.

Indemnifications
 
The Company indemnifies certain of its suppliers and customers for losses arising from matters such as intellectual property disputes and product safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances, includes indemnification for damages and expenses, including reasonable attorneys’ fees. As of September 30, 2016, no amounts have been accrued for these indemnification provisions. The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under its indemnification arrangements.
 
The Company also indemnifies its current and former directors and certain of its current and former officers. Certain costs incurred for providing such indemnification may be recoverable under various insurance policies. The Company is unable to reasonably estimate the maximum amount that could be payable under these arrangements because these exposures are not limited, the obligations are conditional in nature and the facts and circumstances involved in any situation that might arise are variable.

The Stock Purchase Agreement in connection with the investment by three venture capital firms in Lifesize, Inc. contains representations, warranties and covenants of Logitech and Lifesize, Inc. to the Investors. Logitech has agreed, subject to certain limitations, to indemnify the Investors and certain persons related to the Investors for certain losses resulting from breaches of or inaccuracies in such representations, warranties and covenants as well as certain other obligations, including third-party expenses, restructuring costs and pre-closing tax obligations of Lifesize.
 
Legal Proceedings
 
From time to time the Company is involved in claims and legal proceedings that arise in the ordinary course of its business. The Company is currently subject to several such claims and a small number of legal proceedings. The Company believes that these matters lack merit and intends to vigorously defend against them. Based on currently available information, the Company does not believe that resolution of pending matters will have a material adverse effect on its financial condition, cash flows or results of operations. However, litigation is subject to inherent uncertainties, and there can be no assurances that the Company’s defenses will be successful or that any such lawsuit or claim would not have a material adverse impact on the Company’s business, financial condition, cash flows or results of operations in a particular period. Any claims or proceedings against the Company, whether meritorious or not, can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors. Any failure to obtain necessary license or other rights, or litigation arising out of intellectual property claims, could adversely affect the Company’s business.
Shareholders' Equity
Shareholders' Equity
Shareholders’ Equity
 
Share Repurchase Program

In March 2014, the Company’s Board of Directors approved the 2014 share buyback program, which authorizes the Company to use up to $250.0 million to purchase its own shares. The Company’s share buyback program is expected to remain in effect for a period of three years. Shares may be repurchased from time to time on the open market, through block trades or trading plan or otherwise. Opportunistic share repurchases may be started or stopped at any time without prior notice depending on market conditions and other factors. During the six months ended September 30, 2016 and 2015, 2.4 million and 3.5 million shares were repurchased for $42.9 million and $48.8 million, respectively.  During the three months ended September 30, 2016 and 2015, 0.9 million and 2.9 million shares were repurchased for $18.4 million and $40.0 million, respectively.
 
Cash Dividend on Shares of Common Stock

During the three and six months ended September 30, 2016, the Company declared and paid cash dividends of CHF 0.56 (USD equivalent of $0.57) per common share, totaling $93.1 million on the Company's outstanding common stock. During the three and six months ended September 30, 2015, the Company declared and paid cash dividends of CHF 0.51 (USD equivalent of $0.53) per common share, totaling $85.9 million on the Company's outstanding common stock.

Any future dividends will be subject to the approval of the Company's shareholders.

Accumulated Other Comprehensive Loss
 
On total company basis, the components of accumulated other comprehensive income (loss) were as follows (in thousands):
 
 
Accumulated Other Comprehensive Income (Loss)
 
 
Cumulative
Translation
Adjustment (1)
 
Defined
Benefit
Plan (1)
 
Deferred
Hedging
Gains (Losses)
 
Total
March 31, 2016
 
$
(84,038
)
 
$
(26,171
)
 
$
(1,776
)
 
$
(111,985
)
Other comprehensive income
 
254

 
1,192

 
2,424

 
3,870

September 30, 2016
 
$
(83,784
)
 
$
(24,979
)
 
$
648

 
$
(108,115
)
 
(1)        Tax effect was not significant as of September 30 or March 31, 2016.
Segment Information
Segment Information
Segment Information
 
The Company has determined that it operates in a single operating segment that encompasses the design, manufacturing and marketing of peripherals for PCs, tablets and other digital platforms. Operating performance measures are provided directly to the Company's Chief Executive Officer (“CEO”), who is considered to be the Company’s Chief Operating Decision Maker (“CODM”). The CEO periodically reviews information such as net sales and operating income (loss) to make business decisions. These operating performance measures do not include restructuring charges (credits), net, share-based compensation expense and amortization of intangible assets, charges (credits) from the purchase accounting effect on inventory, and acquisition-related costs.

Net sales by product categories and sales channels, excluding intercompany transactions, for the three and six months ended September 30, 2016 and 2015 were as follows (in thousands):
 
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
 
2016
 
2015
 
2016
 
2015
Mobile Speakers
 
$
97,172

 
$
80,550

 
$
154,468

 
$
121,094

Audio-PC & Wearables
 
62,254

 
46,342

 
118,833

 
92,041

Gaming
 
79,193

 
67,624

 
135,693

 
111,294

Video Collaboration
 
28,581

 
20,059

 
52,491

 
41,235

Home Control
 
11,807

 
12,610

 
22,974

 
22,864

Pointing Devices
 
123,300

 
124,668

 
240,083

 
241,653

Keyboards & Combos
 
116,516

 
102,098

 
234,535

 
207,927

Tablet & Other Accessories
 
20,614

 
18,549

 
34,499

 
37,358

PC Webcams
 
24,307

 
23,360

 
49,569

 
45,041

Other (1)
 
560

 
403

 
1,023

 
1,144

Total net retail sales
 
564,304

 
496,263

 
1,044,168

 
921,651

OEM
 

 
22,231

 

 
44,529

Total net sales
 
$
564,304

 
518,494

 
$
1,044,168

 
$
966,180


(1)
Other category includes products that the Company currently intends to transition out of, or has already transitioned out of, because they are no longer strategic to the Company's business.

Net sales to unaffiliated customers by geographic region (based on the customers’ location) for the three and six months ended September 30, 2016 and 2015 were as follows (in thousands):
 
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
 
2016
 
2015
 
2016
 
2015
Americas
 
$
239,830

 
$
224,766

 
$
462,455

 
$
440,441

EMEA
 
200,636

 
169,162

 
343,558

 
288,774

Asia Pacific
 
123,838

 
124,566

 
238,155

 
236,965

Total net sales
 
$
564,304

 
$
518,494

 
$
1,044,168

 
$
966,180


 
Sales are attributed to countries on the basis of the customers’ locations.

The United States and Germany each represented more than 10% of the Company’s total consolidated net sales from continuing operations for the three and six months ended September 30, 2016. The United States represented more than 10% of the Company’s total consolidated net sales from continuing operations for the three and six months ended September 30, 2015.

Switzerland, the Company’s home domicile, represented 3% and 2%, respectively, of the Company’s total consolidated net sales from continuing operations for the three and six months ended September 30, 2016 and 2% for the three and six months ended September 30, 2015.

Two customer groups of the Company each represented more than 10% of total consolidated sales from continuing operations for the three and six months ended September 30, 2016. One customer group of the Company represented more than 10% of total consolidated sales from continuing operations for the three and six months ended September 30, 2015.
 
Long-lived assets by geographic region were as follows (in thousands):
 
 
September 30,
2016
 
March 31,
2016
Americas
 
$
38,157

 
$
40,221

EMEA
 
3,704

 
3,194

Asia Pacific
 
42,936

 
49,445

 
 
$
84,797

 
$
92,860


 
Long-lived assets in the United States and China were $38.0 million and $36.6 million as of September 30, 2016, respectively, and $40.0 million and $44.5 million as of March 31, 2016, respectively. No other countries represented more than 10% of the Company’s total consolidated long-lived assets as of September 30 or March 31, 2016. Long-lived assets in Switzerland, the Company’s home domicile, were $2.1 million and $1.7 million as of September 30 and March 31, 2016, respectively.
Restructuring
Restructuring
Restructuring

During the first quarter of fiscal year 2016, the Company implemented a restructuring plan to exit the OEM business, reorganize Lifesize to sharpen its focus on its cloud-based offering, and streamline the Company's overall cost structure through product, overhead and infrastructure cost reductions with a targeted resource realignment. Charges and other costs related to the workforce reduction and structure realignment are presented as restructuring charges in the condensed consolidated statements of operations. On a total company basis, including the Lifesize video conferencing business as reported in discontinued operations, the Company has incurred approximately $25.5 million under this restructuring plan, including approximately $24.4 million for cash severance and other personnel costs. The Company substantially completed this restructuring plan by the fourth quarter of fiscal year 2016.

The following table summarizes restructuring related activities during the three and six months ended September 30, 2016:
 
 
Restructuring
 
 
Termination
Benefits
 
Lease Exit
Costs
 
Total
Accrual balance at March 31, 2016
 
$
6,275

 
$
125

 
$
6,400

Credits, net
 
(85
)
 

 
(85
)
Cash payments
 
(1,908
)
 
(125
)
 
(2,033
)
Accrual balance at June 30, 2016
 
$
4,282

 
$

 
$
4,282

Charges
 
74

 

 
74

Cash payments
 
(1,473
)
 

 
(1,473
)
Accrual balance at September 30, 2016
 
$
2,883

 
$

 
$
2,883

The Company and Summary of Significant Accounting Policies and Estimates (Policies)
Basis of Presentation
 
The condensed consolidated interim financial statements include the accounts of Logitech and its subsidiaries. All intercompany balances and transactions have been eliminated. The condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and therefore do not include all the information required by GAAP for complete financial statements. They should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2016, included in its Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on May 23, 2016. 

In the opinion of management, these condensed consolidated financial statements include all adjustments, consisting of only normal and recurring adjustments, necessary and in all material aspects, for a fair statement of the results of operations, comprehensive income, financial position, cash flows and changes in shareholders' equity for the periods presented. Operating results for the three and six months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2017, or any future periods.
Use of Estimates
 
The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Examples of significant estimates and assumptions made by management involve the fair value of goodwill, intangible assets acquired from business acquisitions, warranty liabilities, accruals for discretionary customer programs, sales return reserves, allowance for doubtful accounts, inventory valuation, restructuring charges, contingent consideration from business acquisitions and periodical reassessment of its fair value, share-based compensation expense, uncertain tax positions, and valuation allowances for deferred tax assets. Although these estimates are based on management’s best knowledge of current events and actions that may impact the Company in the future, actual results could differ materially from those estimates.
Recent Accounting Pronouncements 

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-9, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-9"). ASU 2014-9 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 was originally to be effective for the Company on April 1, 2017. In July 2015, the FASB affirmed a one-year deferral of the effective date of the new revenue standard. The new standard will become effective for the Company on April 1, 2018. Early application is permitted but not before the original effective date of annual periods beginning after December 15, 2016. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The Company has not yet selected a transition method nor has it determined whether it will early adopt this guidance or the impact of the new standard on its condensed consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory (Topic 330)" ("ASU 2015-11"). Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market, with market value represented by replacement cost, net realizable value or net realizable value less a normal profit margin. The amendments in ASU 2015-11 require an entity to measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective in the first quarter of fiscal year 2018 for the Company, with early adoption permitted. The Company does not expect to early adopt this guidance and does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01 “Financial Instruments- Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10)”. The guidance is effective in the first quarter of fiscal year 2018 for the Company, with early adoption permitted. The Company does not expect to early adopt this guidance and does not believe that the adoption of this guidance will have a material impact on its condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)" ("ASU 2016-02"), which requires the recognition of lease assets and lease liabilities arising from operating leases in the statement of financial position. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the full effect that ASU 2016-02 will have on its condensed consolidated financial statements and will adopt the standard effective April 1, 2019.

In March 2016, the FASB issued ASU 2016-09 "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). The amendment simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. The Company is evaluating the effect that ASU 2016-09 will have on its condensed consolidated financial statements and the timing of the adoption of this standard.

In August 2016, the FASB issued ASU 2016-15 "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments". The amendment gives guidance and reduces diversity in practice with respect to certain types of cash flows. The Company has early adopted this guidance during the second quarter of fiscal year 2017 and the adoption did not impact its consolidated financial statements.
Discontinued operations (Tables)
Schedule of Discontinued Operations
The following table presents financial results of the video conferencing segment classified as total discontinued operations for the three and six months ended September 30, 2015 (in thousands):

 
Three Months Ended
September 30,
 
Six Months Ended
September 30,

 
2015
 
2015
Net sales
 
$
21,368

 
$
44,002

Cost of goods sold
 
7,874

 
16,712

Gross profit
 
13,494

 
27,290

Operating expenses:
 
 

 


Marketing and selling
 
11,044

 
22,675

Research and development
 
6,005

 
11,668

General and administrative
 
1,777

 
3,469

Restructuring charges, net
 
5,550

 
7,007

Total operating expenses
 
24,376

 
44,819

Operating loss from discontinued operations
 
(10,882
)
 
(17,529
)
Interest expense and other expense, net
 
(40
)
 
(133
)
Loss from discontinued operations before income taxes
 
(10,922
)
 
(17,662
)
Provision for income taxes
 
1,433

 
116

Net loss from discontinued operations
 
$
(12,355
)
 
$
(17,778
)
Business Acquisitions (Tables)
The Jaybird transaction meets the definition of a business and is accounted for using the acquisition method. The fair value of consideration transferred for the Jaybird Acquisition consists of the following (in thousands):
 
Purchase price
 
$
54,242

Fair value of contingent consideration (earn-out)
 
18,000

Fair value of total consideration transferred
 
$
72,242

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Acquisition Date (in thousands):
 
 
Estimated Fair Value
Cash and cash equivalents
 
$
255

Accounts receivable
 
272

Inventories
 
10,214

Other current assets
 
611

Property, plant, and equipment
 
1,165

Intangible assets
 
50,280

Other assets
 
27

Total identifiable assets acquired
 
62,824

Accounts payable
 
(10,513
)
Accrued liabilities
 
(1,227
)
Other current liabilities
 
(5,226
)
Other long-term liabilities
 
(283
)
Net identifiable assets acquired
 
$
45,575

Goodwill
 
26,667

Net assets acquired
 
$
72,242

The following table sets forth the components of identifiable intangible assets acquired at their estimated fair values and their estimated useful lives as of the Acquisition Date (Dollars in thousands):
 
Preliminary Fair Value
Estimated Useful Life (years)
Developed technology
$
18,450

4
In-process research & development ("IPR&D")
2,550

Not Applicable
Customer relationships
19,900

8
Trade name
9,380

6
Total intangible assets acquired
$
50,280

 
Net Income per Share (Tables)
Schedule of computations of basic and diluted net income per share
The computations of basic and diluted net income per share for the Company were as follows (in thousands, except per share amounts):
 
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
 
2016
 
2015
 
2016
 
2015
Net Income (loss):
 
 
 
 
 
 
 
 
Continuing operations
 
$
47,045

 
$
30,452

 
$
68,986

 
$
43,312

Discontinued operations
 

 
(12,355
)
 

 
(17,778
)
Net income
 
$
47,045

 
$
18,097

 
$
68,986

 
$
25,534

 
 
 
 
 
 
 
 
 
Shares used in net income (loss) per share computation:
 
 

 
 

 
 

 
 

Weighted average shares outstanding - basic
 
162,222

 
163,515

 
162,176

 
163,957

Effect of potentially dilutive equivalent shares
 
3,327

 
2,326

 
2,750

 
2,395

Weighted average shares outstanding - diluted
 
165,549

 
165,841

 
164,926

 
166,352

 
 
 
 
 
 
 
 
 
Net income (loss) per share - basic:
 
 

 
 

 
 

 
 

Continuing operations
 
$
0.29

 
$
0.19

 
$
0.43

 
$
0.26

Discontinued operations
 

 
(0.08
)
 

 
(0.10
)
Net income per share - basic
 
$
0.29

 
$
0.11

 
$
0.43

 
$
0.16

 
 
 
 
 
 
 
 
 
Net income (loss) per share - diluted:
 
 
 
 
 
 
 
 
Continuing operations
 
$
0.28

 
$
0.18

 
$
0.42

 
$
0.26

Discontinued operations
 

 
(0.07
)
 

 
(0.11
)
Net income per share - diluted
 
$
0.28

 
$
0.11

 
$
0.42

 
$
0.15

Employee Benefit Plans (Tables)
Summary of share-based compensation expense and related tax benefit recognized
The following table summarizes the share-based compensation expense and related tax benefit recognized for the three and six months ended September 30, 2016 and 2015, excluding balances classified as discontinued operations (in thousands):
 
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
 
2016
 
2015
 
2016
 
2015
Cost of goods sold
 
$
638

 
$
580

 
$
1,313

 
$
1,185

Marketing and selling
 
3,244

 
1,997

 
6,681

 
4,061

Research and development
 
917

 
655

 
1,831

 
1,328

General and administrative
 
3,651

 
3,074

 
7,142

 
6,248

Restructuring
 

 

 

 
7

Total share-based compensation expense
 
8,450

 
6,306

 
16,967

 
12,829

Income tax benefit
 
(1,886
)
 
(1,160
)
 
(3,701
)
 
(2,497
)
Total share-based compensation expense, net of income tax
 
$
6,564

 
$
5,146

 
$
13,266

 
$
10,332

Balance Sheet Components (Tables)
The following table presents the components of certain balance sheet asset amounts as of September 30 and March 31, 2016 (in thousands): 
 
 
September 30,
2016
 
March 31,
2016
Accounts receivable, net:
 
 

 
 

Accounts receivable
 
$
446,430

 
$
332,553

Allowance for doubtful accounts
 
(805
)
 
(667
)
Allowance for sales returns
 
(22,090
)
 
(18,526
)
Allowance for cooperative marketing arrangements
 
(30,969
)
 
(28,157
)
Allowance for customer incentive programs
 
(57,472
)
 
(60,872
)
Allowance for pricing programs
 
(94,488
)
 
(81,553
)
 
 
$
240,606

 
$
142,778

Inventories:
 
 

 
 

Raw materials
 
$
35,805

 
$
48,489

Finished goods
 
232,305

 
180,297

 
 
$
268,110

 
$
228,786

Other current assets:
 
 

 
 

Income tax and value-added tax receivables
 
$
21,184

 
$
22,572

Prepaid expenses and other assets
 
19,017

 
12,916

 
 
$
40,201

 
$
35,488

Property, plant and equipment, net:
 
 

 
 

Property, plant and equipment at cost
 
$
376,287

 
371,212

Less: accumulated depreciation and amortization
 
(291,490
)
 
(278,352
)
 
 
$
84,797

 
$
92,860

Other assets:
 
 

 
 

Deferred tax assets
 
$
54,187

 
$
56,208

Trading investments for deferred compensation plan
 
14,826

 
14,836

Investments held in privately held companies
 
9,900

 
9,247

Other assets
 
5,604

 
6,525

 
 
$
84,517

 
$
86,816



The following table presents the components of certain balance sheet liability amounts as of September 30 and March 31, 2016 (in thousands): 
 
 
September 30,
2016
 
March 31,
2016
Accrued and other current liabilities:
 
 

 
 

Accrued personnel expenses
 
$
64,163

 
$
46,025

Indirect customer incentive programs
 
32,666

 
28,721

Warranty accrual
 
13,528

 
11,880

Employee benefit plan obligation
 
1,738

 
1,285

Income taxes payable
 
2,606

 
1,553

Contingent consideration for business acquisition - current portion
 
13,494

 

Other current liabilities
 
85,715

 
84,300

 
 
$
213,910

 
$
173,764

Non-current liabilities:
 
 

 
 

Warranty accrual
 
$
8,084

 
$
8,500

Obligation for deferred compensation plan
 
14,826

 
14,836

Employee benefit plan obligation
 
53,335

 
53,909

Deferred rent
 
8,656

 
9,424

Deferred tax liability
 
1,665

 
1,665

Contingent consideration for business acquisition - non-current portion
 
4,506

 

Other non-current liabilities
 
1,341

 
1,201

 
 
$
92,413

 
$
89,535

Fair Value Measurements (Tables)
Schedule of financial assets and liabilities accounted for at fair value and classified by level within the fair value hierarchy
The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis, excluding assets related to the Company’s defined benefit pension plans, classified by the level within the fair value hierarchy (in thousands): 
 
 
September 30, 2016
 
March 31, 2016
 
 
Level 1
 
Level 2
 
Level 3
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 

 
 
 
 
 
 

 
 

 
 

Cash equivalents
 
$
100,742

 
$

 
$

 
$
10,000

 
$

 
$

 
 
 

 
 

 
 

 
 

 
 

 
 

Trading investments for deferred compensation plan:
 
 

 
 
 
 
 
 

 
 

 
 

Money market funds
 
$
3,051

 
$

 
$

 
$
3,467

 
$

 
$

Mutual funds
 
11,775

 

 

 
11,369

 

 

Total of trading investments for deferred compensation plan
 
$
14,826

 
$

 
$

 
$
14,836

 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
Currency exchange derivative assets
 
$

 
$
909

 
$

 
$

 
$
10

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related contingent consideration
 
$

 
$

 
$
18,000

 
$

 
$

 
$

Currency exchange derivative liabilities
 
$

 
$
41

 
$

 
$

 
$
1,132

 
$

Derivative Financial Instruments (Tables)
The following table presents the fair values of the Company’s derivative instruments designated as hedging instruments on a gross basis in other current assets or accrued and other current liabilities on its condensed consolidated balance sheets as of September 30, 2016 and March 31, 2016 (in thousands):
 
 
Derivatives
 
 
Asset
 
Liability
 
 
September 30,
2016
 
March 31,
2016
 
September 30,
2016
 
March 31,
2016
Cash flow hedges
 
$
909

 
$
10

 
$

 
$
1,038

The following table presents the amounts of gains (losses) on the Company’s derivative instruments designated as hedging instruments and their locations on its condensed consolidated statements of operations and condensed consolidated statements of comprehensive income for the three and six months ended September 30, 2016 and 2015 (in thousands):

 
 
Three Months Ended
September 30,
 
 
Amount of Gain (Loss)
Deferred as a Component of Accumulated
Other Comprehensive Loss After Reclassification to Costs of Goods Sold
 
Amount of Loss (Gain)
Reclassified from Accumulated Other Comprehensive Loss to
Costs of Goods Sold
 
 
2016
 
2015
 
2016
 
2015
Cash flow hedges
 
$
719

 
$
1,060

 
$
155

 
$
(28
)


 
 
Six Months Ended
September 30,
 
 
Amount of Gain (Loss)
Deferred as a Component of Accumulated
Other Comprehensive Loss After Reclassification to Costs of Goods Sold
 
Amount of Loss (Gain)
Reclassified from Accumulated Other Comprehensive Loss to
Costs of Goods Sold
 
 
2016
 
2015
 
2016
 
2015
Cash flow hedges
 
$
2,424

 
$
(3,662
)
 
$
895

 
$
(2,488
)
Goodwill (Tables)
Summary of activity in the goodwill account
The following table summarizes the activities in the Company’s goodwill balance during the six months ended September 30, 2016 (in thousands):
As of March 31, 2016
 
$
218,224

Business acquisitions (See Note 3)
 
31,553

Currency impact
 
(12
)
As of September 30, 2016
 
$
249,765

Commitments and Contingencies (Tables)
Schedule of warranty liability
Changes in the Company’s warranty liability for the three and six months ended September 30, 2016 and 2015 were as follows (in thousands): 
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Beginning of the period
$
21,752

 
$
21,284

 
$
20,380

 
$
21,710

Assumed from business acquisition
150

 

 
1,963

 

Provision
3,163

 
1,879

 
6,340

 
3,792

Settlements
(3,452
)
 
(2,677
)
 
(6,880
)
 
(5,245
)
Currency impact
(1
)
 
(87
)
 
(191
)
 
142

End of the period
$
21,612

 
$
20,399

 
$
21,612

 
$
20,399


Shareholders' Equity (Tables)
Schedule of components of accumulated other comprehensive income (loss)
On total company basis, the components of accumulated other comprehensive income (loss) were as follows (in thousands):
 
 
Accumulated Other Comprehensive Income (Loss)
 
 
Cumulative
Translation
Adjustment (1)
 
Defined
Benefit
Plan (1)
 
Deferred
Hedging
Gains (Losses)
 
Total
March 31, 2016
 
$
(84,038
)
 
$
(26,171
)
 
$
(1,776
)
 
$
(111,985
)
Other comprehensive income
 
254

 
1,192

 
2,424

 
3,870

September 30, 2016
 
$
(83,784
)
 
$
(24,979
)
 
$
648

 
$
(108,115
)
 
(1)        Tax effect was not significant as of September 30 or March 31, 2016.
Segment Information (Tables)
Net sales by product categories and sales channels, excluding intercompany transactions, for the three and six months ended September 30, 2016 and 2015 were as follows (in thousands):
 
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
 
2016
 
2015
 
2016
 
2015
Mobile Speakers
 
$
97,172

 
$
80,550

 
$
154,468

 
$
121,094

Audio-PC & Wearables
 
62,254

 
46,342

 
118,833

 
92,041

Gaming
 
79,193

 
67,624

 
135,693

 
111,294

Video Collaboration
 
28,581

 
20,059

 
52,491

 
41,235

Home Control
 
11,807

 
12,610

 
22,974

 
22,864

Pointing Devices
 
123,300

 
124,668

 
240,083

 
241,653

Keyboards & Combos
 
116,516

 
102,098

 
234,535

 
207,927

Tablet & Other Accessories
 
20,614

 
18,549

 
34,499

 
37,358

PC Webcams
 
24,307

 
23,360

 
49,569

 
45,041

Other (1)
 
560

 
403

 
1,023

 
1,144

Total net retail sales
 
564,304

 
496,263

 
1,044,168

 
921,651

OEM
 

 
22,231

 

 
44,529

Total net sales
 
$
564,304

 
518,494

 
$
1,044,168

 
$
966,180


(1)
Other category includes products that the Company currently intends to transition out of, or has already transitioned out of, because they are no longer strategic to the Company's business.
Net sales to unaffiliated customers by geographic region (based on the customers’ location) for the three and six months ended September 30, 2016 and 2015 were as follows (in thousands):
 
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
 
2016
 
2015
 
2016
 
2015
Americas
 
$
239,830

 
$
224,766

 
$
462,455

 
$
440,441

EMEA
 
200,636

 
169,162

 
343,558

 
288,774

Asia Pacific
 
123,838

 
124,566

 
238,155

 
236,965

Total net sales
 
$
564,304

 
$
518,494

 
$
1,044,168

 
$
966,180

Long-lived assets by geographic region were as follows (in thousands):
 
 
September 30,
2016
 
March 31,
2016
Americas
 
$
38,157

 
$
40,221

EMEA
 
3,704

 
3,194

Asia Pacific
 
42,936

 
49,445

 
 
$
84,797

 
$
92,860

Restructuring (Tables)
Summary of restructuring related activities
The following table summarizes restructuring related activities during the three and six months ended September 30, 2016:
 
 
Restructuring
 
 
Termination
Benefits
 
Lease Exit
Costs
 
Total
Accrual balance at March 31, 2016
 
$
6,275

 
$
125

 
$
6,400

Credits, net
 
(85
)
 

 
(85
)
Cash payments
 
(1,908
)
 
(125
)
 
(2,033
)
Accrual balance at June 30, 2016
 
$
4,282

 
$

 
$
4,282

Charges
 
74

 

 
74

Cash payments
 
(1,473
)
 

 
(1,473
)
Accrual balance at September 30, 2016
 
$
2,883

 
$

 
$
2,883

Discontinued operations - Narrative (Details) (USD $)
In Millions, except Share data, unless otherwise specified
0 Months Ended
Dec. 28, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
Number of venture firms invested in Lifesize
Lifesize
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
Ownership after transaction
37.50% 
Lifesize |
Series B Preferred Stock
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
Number of shares sold in transaction
2,500,000 
Proceeds from sale of shares
$ 2.5 
Lifesize |
Series A Preferred Stock
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
Number of shares retained
12,000,000 
Lifesize |
Series B Preferred Stock
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
Number of shares sold in transaction
17,500,000 
Proceeds from sale of shares
17.5 
Percentage of ownership from investor
62.50% 
Lifesize |
Common Stock
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized
8,000,000 
Lifesize |
Preferred Stock
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
Fair value of cost method investment
5.6 
Level 3 |
Lifesize |
Preferred Stock
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
Fair value of cost method investment
$ 5.6 
Discontinued operations - Video Conferencing Segment (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
Loss from discontinued operations, net of taxes
$ 0 
$ (12,355)
$ 0 
$ (17,778)
Lifesize |
Discontinued Operations, Disposed of by Sale |
Video conferencing
 
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
Net sales
 
21,368 
 
44,002 
Cost of goods sold
 
7,874 
 
16,712 
Gross profit
 
13,494 
 
27,290 
Marketing and selling
 
11,044 
 
22,675 
Research and development
 
6,005 
 
11,668 
General and administrative
 
1,777 
 
3,469 
Restructuring charges, net
 
5,550 
 
7,007 
Total operating expenses
 
24,376 
 
44,819 
Operating loss from discontinued operations
 
(10,882)
 
(17,529)
Interest expense and other expense, net
 
(40)
 
(133)
Loss from discontinued operations before income taxes
 
(10,922)
 
(17,662)
Provision for income taxes
 
1,433 
 
116 
Loss from discontinued operations, net of taxes
 
$ (12,355)
 
$ (17,778)
Business Acquisitions - Narrative (Details) (USD $)
3 Months Ended 6 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Mar. 31, 2016
Apr. 20, 2016
Jaybird
Jun. 30, 2016
Jaybird
Sep. 30, 2016
Jaybird
Sep. 30, 2016
Jaybird
Apr. 20, 2016
Jaybird
Sep. 30, 2016
Jaybird
Developed technology
Sep. 30, 2016
Jaybird
Developed technology
Apr. 20, 2016
Jaybird
Developed technology
Level 3
Apr. 20, 2016
Jaybird
Trade name
Level 3
Sep. 30, 2016
Jaybird
Customer Relationships and Trade Names
Sep. 30, 2016
Jaybird
Customer Relationships and Trade Names
Apr. 20, 2016
Jaybird
Customer relationships
Level 3
Apr. 20, 2016
Jaybird
Revenue Growth
Apr. 20, 2016
Jaybird
Revenue Growth
Level 3
Mar. 31, 2019
Jaybird
Revenue Growth
Scenario, Forecast
Mar. 31, 2018
Jaybird
Revenue Growth
Scenario, Forecast
Sep. 15, 2016
Saitek Acquisition
Sep. 15, 2016
Saitek Acquisition
Sep. 30, 2016
Fair Value, Measurements, Recurring
Level 3
Mar. 31, 2016
Fair Value, Measurements, Recurring
Level 3
Sep. 30, 2016
Fair Value, Measurements, Recurring
Jaybird
Revenue Growth
Apr. 20, 2016
Fair Value, Measurements, Recurring
Jaybird
Revenue Growth
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase price
 
 
 
 
 
$ 54,242,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 13,000,000 
 
 
 
 
 
Maximum earn-out
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
45,000,000 
 
 
 
 
 
 
 
 
 
Earn-out payments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,000,000 
25,000,000 
 
 
 
 
 
 
Acquisition-related contingent consideration
 
 
 
 
 
 
 
 
 
18,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
18,000,000 
18,000,000 
18,000,000 
Purchase accounting effect on inventories
 
 
 
 
 
 
700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
564,304,000 
518,494,000 
1,044,168,000 
966,180,000 
 
 
 
15,600,000 
29,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets
 
 
3,867,000 
1,226,000 
 
 
 
 
 
 
1,200,000 
2,100,000 
 
 
1,000,000 
1,800,000 
 
 
 
 
 
 
 
 
 
 
 
Royalty rate for value measurement
 
 
 
 
 
 
 
 
 
 
 
 
10.00% 
2.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discount rate for value measurement
 
 
 
 
 
 
 
 
 
 
 
 
16.00% 
16.00% 
 
 
16.00% 
 
16.00% 
 
 
 
 
 
 
 
 
Intangible assets
 
 
 
 
 
 
 
 
 
50,280,000 
 
 
 
 
 
 
 
 
 
 
 
 
6,700,000 
 
 
 
 
Goodwill
249,765,000 
 
249,765,000 
 
218,224,000 
 
 
 
 
26,667,000 
 
 
 
 
 
 
 
 
 
 
 
 
4,900,000 
 
 
 
 
Net tangible assets acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,400,000 
 
 
 
 
Acquisition-related costs
$ 800,000 
 
$ 1,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisitions - Schedule of Consideration in Business Combinations (Details) (Jaybird, USD $)
In Thousands, unless otherwise specified
0 Months Ended
Apr. 20, 2016
Apr. 20, 2016
Jaybird
 
 
Business Acquisition [Line Items]
 
 
Purchase price
$ 54,242 
 
Acquisition-related contingent consideration
 
18,000 
Fair value of total consideration transferred
$ 72,242 
 
Business Acquisitions - Recognized Identifiable Assets Acquired and Liabilities Assumed (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Mar. 31, 2016
Apr. 20, 2016
Jaybird
Business Acquisition [Line Items]
 
 
 
Cash and cash equivalents
 
 
$ 255 
Accounts receivable
 
 
272 
Inventories
 
 
10,214 
Other current assets
 
 
611 
Property, plant, and equipment
 
 
1,165 
Intangible assets
 
 
50,280 
Other assets
 
 
27 
Total identifiable assets acquired
 
 
62,824 
Accounts payable
 
 
(10,513)
Accrued liabilities
 
 
(1,227)
Other current liabilities
 
 
(5,226)
Other long-term liabilities
 
 
(283)
Net identifiable assets acquired
 
 
45,575 
Goodwill
249,765 
218,224 
26,667 
Net assets acquired
 
 
$ 72,242 
Business Acquisitions - Schedule of Intangible Assets Acquired (Details) (Jaybird, USD $)
In Thousands, unless otherwise specified
0 Months Ended
Apr. 20, 2016
Business Acquisition [Line Items]
 
Total intangible assets acquired
$ 50,280 
Developed technology
 
Business Acquisition [Line Items]
 
Fair value of finite-lived intangible assets
18,450 
Estimated Useful Life (years)
4 years 
Customer relationships
 
Business Acquisition [Line Items]
 
Fair value of finite-lived intangible assets
19,900 
Estimated Useful Life (years)
8 years 
Trade name
 
Business Acquisition [Line Items]
 
Fair value of finite-lived intangible assets
9,380 
Estimated Useful Life (years)
6 years 
In-process research & development (IPR&D)
 
Business Acquisition [Line Items]
 
Fair value of Indefinite-lived intangible assets
$ 2,550 
Net Income per Share - Computation of Basic and Diluted Net Income per Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Earnings Per Share [Abstract]
 
 
 
 
Continuing operations
$ 47,045 
$ 30,452 
$ 68,986 
$ 43,312 
Discontinued operations
(12,355)
(17,778)
Net income
$ 47,045 
$ 18,097 
$ 68,986 
$ 25,534 
Shares used in net income (loss) per share computation:
 
 
 
 
Weighted average shares outstanding - basic
162,222,000 
163,515,000 
162,176,000 
163,957,000 
Effect of potentially dilutive equivalent shares
3,327,000 
2,326,000 
2,750,000 
2,395,000 
Weighted average shares outstanding - diluted
165,549,000 
165,841,000 
164,926,000 
166,352,000 
Net income (loss) per share - basic:
 
 
 
 
Continuing operations (in dollars per share)
$ 0.29 
$ 0.19 
$ 0.43 
$ 0.26 
Discontinued operations (in dollars per share)
$ 0.00 
$ (0.08)
$ 0.00 
$ (0.10)
Net income per share - basic (in dollars per share)
$ 0.29 
$ 0.11 
$ 0.43 
$ 0.16 
Net income (loss) per share - diluted:
 
 
 
 
Continuing operations (in dollars per share)
$ 0.28 
$ 0.18 
$ 0.42 
$ 0.26 
Discontinued operations (in dollars per share)
$ 0.00 
$ (0.07)
$ 0.00 
$ (0.11)
Net income per share - diluted (in dollars per share)
$ 0.28 
$ 0.11 
$ 0.42 
$ 0.15 
Anti-dilutive equivalents shares excluded
2,900,000 
7,800,000 
3,100,000 
7,600,000 
Employee Benefit Plans - Narrative (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Share-based Compensation
 
 
 
 
Share-based compensation expenses capitalized as inventory
 
 
$ 0.4 
$ 0.4 
Defined benefit plans
 
 
 
 
Net periodic benefit cost
$ 2.8 
$ 2.9 
$ 5.6 
$ 5.8 
Income Taxes (Details) (USD $)
3 Months Ended 6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Mar. 31, 2016
Income Tax Disclosure [Line Items]
 
 
 
 
 
Provision for income taxes
$ 5,593,000 
$ 5,571,000 
$ 8,650,000 
$ 5,564,000 
 
Effective income tax rates
10.60% 
15.50% 
11.10% 
11.40% 
 
Unrecognized tax benefits
72,000,000 
 
72,000,000 
 
69,900,000 
Accrued interest and penalties related to uncertain tax positions
3,800,000 
 
3,800,000 
 
3,600,000 
Expected decrease in uncertain tax positions
15,500,000 
 
15,500,000 
 
 
China
 
 
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
 
 
Discrete tax benefit due to preferential income tax rate reduction
 
 
 
2,200,000 
 
Non-current income tax payable
 
 
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
 
 
Unrecognized tax benefits
60,400,000 
 
60,400,000 
 
59,700,000 
Current income tax payable
 
 
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
 
 
Unrecognized tax benefits
$ 100,000 
 
$ 100,000 
 
$ 100,000 
Balance Sheet Components - Components of Certain Balance Sheet Asset Amounts (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Mar. 31, 2016
Accounts receivable, net:
 
 
Accounts receivable
$ 446,430 
$ 332,553 
Accounts receivable, net
240,606 
142,778 
Inventories:
 
 
Raw materials
35,805 
48,489 
Finished goods
232,305 
180,297 
Inventory, net
268,110 
228,786 
Other current assets:
 
 
Income tax and value-added tax receivables
21,184 
22,572 
Prepaid expenses and other assets
19,017 
12,916 
Other current assets, total
40,201 
35,488 
Property, plant and equipment, net:
 
 
Property, plant and equipment, gross
376,287 
371,212 
Equipment
(291,490)
(278,352)
Property, plant and equipment, net
84,797 
92,860 
Other assets:
 
 
Deferred tax assets
54,187 
56,208 
Trading investments for deferred compensation plan
14,826 
14,836 
Investments held in privately held companies
9,900 
9,247 
Other assets
5,604 
6,525 
Other assets, total
84,517 
86,816 
Allowance for doubtful accounts
 
 
Accounts receivable, net:
 
 
Allowance for doubtful accounts
(805)
(667)
Allowance for sales returns
 
 
Accounts receivable, net:
 
 
Allowance for doubtful accounts
(22,090)
(18,526)
Allowance for cooperative marketing arrangements
 
 
Accounts receivable, net:
 
 
Allowance for doubtful accounts
(30,969)
(28,157)
Allowance for customer incentive programs
 
 
Accounts receivable, net:
 
 
Allowance for doubtful accounts
(57,472)
(60,872)
Allowance for pricing programs
 
 
Accounts receivable, net:
 
 
Allowance for doubtful accounts
$ (94,488)
$ (81,553)
Balance Sheet Components - Components of Certain Balance Sheet Liability Amounts (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Mar. 31, 2016
Accrued and other current liabilities:
 
 
Accrued personnel expenses
$ 64,163 
$ 46,025 
Indirect customer incentive programs
32,666 
28,721 
Warranty accrual
13,528 
11,880 
Employee benefit plan obligation
1,738 
1,285 
Income taxes payable
2,606 
1,553 
Contingent consideration for business acquisition - current portion
13,494 
Other current liabilities
85,715 
84,300 
Accrued and other current liabilities
213,910 
173,764 
Non-current liabilities:
 
 
Warranty accrual
8,084 
8,500 
Obligation for deferred compensation plan
14,826 
14,836 
Employee benefit plan obligation
53,335 
53,909 
Deferred rent
8,656 
9,424 
Deferred tax liability
1,665 
1,665 
Contingent consideration for business acquisition - non-current portion
4,506 
Other non-current liabilities
1,341 
1,201 
Non-current liabilities
$ 92,413 
$ 89,535 
Fair Value Measurements - Financial Assets and Liabilities, Classified by Level (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Mar. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading investments for deferred compensation plan
$ 14,826 
$ 14,836 
Fair Value, Measurements, Recurring |
Level 1
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
100,742 
10,000 
Trading investments for deferred compensation plan
14,826 
14,836 
Fair Value, Measurements, Recurring |
Level 1 |
Money market funds
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading investments for deferred compensation plan
3,051 
3,467 
Fair Value, Measurements, Recurring |
Level 1 |
Mutual funds
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading investments for deferred compensation plan
11,775 
11,369 
Fair Value, Measurements, Recurring |
Level 2 |
Foreign exchange contracts
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Currency exchange derivative assets
909 
10 
Currency exchange derivative liabilities
41 
1,132 
Fair Value, Measurements, Recurring |
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Acquisition-related contingent consideration
$ 18,000 
$ 0 
Fair Value Measurements - Narrative (Details) (USD $)
0 Months Ended
Sep. 30, 2016
Mar. 31, 2016
Dec. 28, 2015
Lifesize
Preferred Stock
Dec. 28, 2015
Level 3
Lifesize
Preferred Stock
Apr. 20, 2016
Jaybird
Apr. 20, 2016
Jaybird
Revenue Growth
Apr. 20, 2016
Jaybird
Revenue Growth
Level 3
Sep. 30, 2016
Fair Value, Measurements, Recurring
Level 1
Mar. 31, 2016
Fair Value, Measurements, Recurring
Level 1
Sep. 30, 2016
Fair Value, Measurements, Recurring
Level 3
Mar. 31, 2016
Fair Value, Measurements, Recurring
Level 3
Sep. 30, 2016
Fair Value, Measurements, Recurring
Jaybird
Revenue Growth
Apr. 20, 2016
Fair Value, Measurements, Recurring
Jaybird
Revenue Growth
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Trading investments for deferred compensation plan
$ 14,826,000 
$ 14,836,000 
 
 
 
 
 
$ 14,826,000 
$ 14,836,000 
 
 
 
 
Maximum earn-out
 
 
 
 
 
45,000,000 
 
 
 
 
 
 
 
Discount rate for value measurement
 
 
 
 
 
 
16.00% 
 
 
 
 
 
 
Acquisition-related contingent consideration
 
 
 
 
18,000,000 
 
 
 
 
18,000,000 
18,000,000 
18,000,000 
Fair value of cost method investment
 
 
5,600,000 
5,600,000 
 
 
 
 
 
 
 
 
 
Cost method investments at cost
$ 7,400,000 
$ 7,400,000 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments - Narrative (Details) (Foreign Exchange Forward, USD $)
In Millions, unless otherwise specified
6 Months Ended
Sep. 30, 2016
Mar. 31, 2016
Designated as hedging instruments |
Cash Flow Hedges
 
 
Derivative [Line Items]
 
 
Notional amount of derivatives
$ 76.9 
$ 39.8 
Cash flow hedge gain to be reclassified within twelve months
0.6 
 
Not Designated as Hedging Instrument [Member]
 
 
Derivative [Line Items]
 
 
Notional amount of derivatives
$ 56.7 
$ 63.7 
Derivative Financial Instruments - Fair Values of Company Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Other Current Assets
Designated as hedging instruments
Cash Flow Hedges
Mar. 31, 2016
Other Current Assets
Designated as hedging instruments
Cash Flow Hedges
Sep. 30, 2016
Accrued and Other Current Liabilities
Designated as hedging instruments
Cash Flow Hedges
Mar. 31, 2016
Accrued and Other Current Liabilities
Designated as hedging instruments
Cash Flow Hedges
Apr. 20, 2016
Jaybird
Sep. 30, 2016
Revenue Growth
Jaybird
Fair Value, Measurements, Recurring
Apr. 20, 2016
Revenue Growth
Jaybird
Fair Value, Measurements, Recurring
Sep. 30, 2016
Level 3
Fair Value, Measurements, Recurring
Mar. 31, 2016
Level 3
Fair Value, Measurements, Recurring
Derivative Financial Instruments
 
 
 
 
 
 
 
 
 
Asset
$ 909 
$ 10 
 
 
 
 
 
 
 
Liability
 
 
1,038 
 
 
 
 
 
Acquisition-related contingent consideration
 
 
 
 
$ 18,000 
$ 18,000 
$ 18,000 
$ 18,000 
$ 0 
Derivative Financial Instruments - Gains and Losses on Derivative Instruments (Details) (Designated as hedging instruments, Cash Flow Hedges, USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Amounts of gains and losses on the derivative instruments
 
 
 
 
Amount of Gain (Loss) Deferred as a Component of Accumulated Other Comprehensive Loss After Reclassification to Costs of Goods Sold
$ 719 
$ 1,060 
$ 2,424 
$ (3,662)
Cost of goods sold
 
 
 
 
Amounts of gains and losses on the derivative instruments
 
 
 
 
Amount of Loss (Gain) Reclassified from Accumulated Other Comprehensive Loss to Costs of Goods Sold
$ 155 
$ (28)
$ 895 
$ (2,488)
Goodwill - Summary of Activity In Goodwill Balance (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Sep. 30, 2016
Goodwill
 
Balance at the beginning of the period
$ 218,224 
Business acquisitions (See Note 3)
31,553 
Currency impact
(12)
Balance at the end of the period
$ 249,765 
Financing Arrangements (Details) (USD $)
Sep. 30, 2016
Mar. 31, 2016
Financing Arrangements
 
 
Outstanding borrowings
$ 0 
$ 0 
Unsecured bank lines of credit
 
 
Financing Arrangements
 
 
Maximum borrowing capacity
44,600,000.0 
 
Outstanding bank guarantees
$ 12,400,000 
 
Commitments and Contingencies - Narrative (Details) (USD $)
1 Months Ended 12 Months Ended 6 Months Ended
Apr. 30, 2016
Mar. 31, 2014
Dec. 28, 2015
firm
Sep. 30, 2016
Parent guarantee for purchase obligation of third party contract manufacturer
Sep. 30, 2016
Indemnification agreement
Sep. 30, 2016
European Countries
Sep. 30, 2016
All Other Countries
Other Commitments [Line Items]
 
 
 
 
 
 
 
Warranty period
 
5 years 
 
 
 
2 years 
1 year 
Civil penalty payment to settle an investigation
$ 7,500,000 
 
 
 
 
 
 
Maximum amount of the guarantees
 
 
 
3,800,000.0 
 
 
 
Guarantees outstanding
 
 
 
1,900,000 
 
 
 
Amount accrued for indemnification provisions
 
 
 
 
$ 0 
 
 
Number of venture firms invested in Lifesize
 
 
 
 
 
 
Commitments and Contingencies - Changes in Warranty Liability (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Changes in the warranty liability:
 
 
 
 
Beginning of the period
$ 21,752 
$ 21,284 
$ 20,380 
$ 21,710 
Assumed from business acquisition
150 
1,963 
Provision
3,163 
1,879 
6,340 
3,792 
Settlements
(3,452)
(2,677)
(6,880)
(5,245)
Currency impact
(1)
(87)
(191)
142 
End of the period
$ 21,612 
$ 20,399 
$ 21,612 
$ 20,399 
Shareholders' Equity - Narrative (Details)
Share data in Millions, except Per Share data, unless otherwise specified
1 Months Ended 3 Months Ended 6 Months Ended
Mar. 31, 2014
USD ($)
Sep. 30, 2016
USD ($)
Sep. 30, 2016
CHF
Sep. 30, 2015
USD ($)
Sep. 30, 2015
CHF
Sep. 30, 2016
USD ($)
Sep. 30, 2016
CHF
Sep. 30, 2015
USD ($)
Sep. 30, 2015
CHF
Stockholders' Equity Note [Abstract]
 
 
 
 
 
 
 
 
 
Authorized amount in buyback program
$ 250,000,000 
 
 
 
 
 
 
 
 
Period to complete share repurchase program
3 years 
 
 
 
 
 
 
 
 
Repurchase of shares (in shares)
 
0.9 
0.9 
2.9 
2.9 
2.4 
2.4 
3.5 
3.5 
Repurchase of shares, value
 
(18,400,000)
 
(40,000,000)
 
(42,894,000)
 
(48,802,000)
 
Cash dividend per share (per share)
 
$ 0.57 
 0.56 
$ 0.53 
 0.51 
$ 0.57 
 0.56 
$ 0.53 
 0.51 
Payment of cash dividends
 
$ 93,093,000 
 
$ 85,915,000 
 
$ 93,093,000 
 
$ 85,900,000 
 
Shareholders' Equity - Components of Accumulated Other Comprehensive Income (Loss) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Cumulative Translation Adjustment
Sep. 30, 2016
Defined Benefit Plan
Sep. 30, 2016
Deferred Hedging Gains (Losses)
Sep. 30, 2016
Total
Mar. 31, 2016
Total
Sep. 30, 2015
Total
Mar. 31, 2015
Total
Accumulated Other Comprehensive Income (Loss)
 
 
 
 
 
 
 
 
 
 
 
Balance
 
 
$ 759,948 
$ 758,134 
$ (84,038)
$ (26,171)
$ (1,776)
$ (108,115)
$ (111,985)
$ (113,264)
$ (113,237)
Other comprehensive income
1,718 
2,791 
3,870 
(27)
254 
1,192 
2,424 
 
 
 
 
Balance
$ 716,034 
$ 668,973 
$ 716,034 
$ 668,973 
$ (83,784)
$ (24,979)
$ 648 
$ (108,115)
$ (111,985)
$ (113,264)
$ (113,237)
Segment Information - Net Sales by Product Family- Excluding Intercompany Transactions (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
$ 564,304 
$ 518,494 
$ 1,044,168 
$ 966,180 
Mobile Speakers
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
97,172 
80,550 
154,468 
121,094 
Audio-PC & Wearables
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
62,254 
46,342 
118,833 
92,041 
Gaming
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
79,193 
67,624 
135,693 
111,294 
Video Collaboration
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
28,581 
20,059 
52,491 
41,235 
Home Control
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
11,807 
12,610 
22,974 
22,864 
Pointing Devices
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
123,300 
124,668 
240,083 
241,653 
Keyboards & Combos
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
116,516 
102,098 
234,535 
207,927 
Tablet & Other Accessories
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
20,614 
18,549 
34,499 
37,358 
PC Webcams
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
24,307 
23,360 
49,569 
45,041 
Other
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
560 
403 
1,023 
1,144 
Total net retail sales
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
564,304 
496,263 
1,044,168 
921,651 
OEM
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
$ 0 
$ 22,231 
$ 0 
$ 44,529 
Segment Information - Net Sales and Long-Lived Assets by Geographic Region (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Mar. 31, 2016
Net sales to unaffiliated customers and long-lived assets by geographic region
 
 
 
 
 
Net sales
$ 564,304 
$ 518,494 
$ 1,044,168 
$ 966,180 
 
Long lived assets
84,797 
 
84,797 
 
92,860 
Americas |
Operating Segments
 
 
 
 
 
Net sales to unaffiliated customers and long-lived assets by geographic region
 
 
 
 
 
Net sales
239,830 
224,766 
462,455 
440,441 
 
Long lived assets
38,157 
 
38,157 
 
40,221 
EMEA |
Operating Segments
 
 
 
 
 
Net sales to unaffiliated customers and long-lived assets by geographic region
 
 
 
 
 
Net sales
200,636 
169,162 
343,558 
288,774 
 
Long lived assets
3,704 
 
3,704 
 
3,194 
Asia Pacific |
Operating Segments
 
 
 
 
 
Net sales to unaffiliated customers and long-lived assets by geographic region
 
 
 
 
 
Net sales
123,838 
124,566 
238,155 
236,965 
 
Long lived assets
$ 42,936 
 
$ 42,936 
 
$ 49,445 
Segment Information - Narrative (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Sep. 30, 2016
Mar. 31, 2016
Sep. 30, 2016
United States
Mar. 31, 2016
United States
Sep. 30, 2016
Switzerland
Mar. 31, 2016
Switzerland
Sep. 30, 2016
China
Mar. 31, 2016
China
Sep. 30, 2016
Geographic Concentration
Consolidated net sales from continuing operations
Switzerland
Sep. 30, 2015
Geographic Concentration
Consolidated net sales from continuing operations
Switzerland
Sep. 30, 2016
Geographic Concentration
Consolidated net sales from continuing operations
Switzerland
Sep. 30, 2015
Geographic Concentration
Consolidated net sales from continuing operations
Switzerland
Sep. 30, 2016
Customer Concentration
Consolidated net sales from continuing operations
customer_group
Sep. 30, 2015
Customer Concentration
Consolidated net sales from continuing operations
customer_group
Sep. 30, 2016
Customer Concentration
Consolidated net sales from continuing operations
customer_group
Sep. 30, 2015
Customer Concentration
Consolidated net sales from continuing operations
customer_group
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of consolidated net sales
 
 
 
 
 
 
 
 
3.00% 
2.00% 
2.00% 
2.00% 
 
 
 
 
Number of major customer groups
 
 
 
 
 
 
 
 
 
 
 
 
Long lived assets
$ 84,797 
$ 92,860 
$ 38,000 
$ 40,000 
$ 2,100 
$ 1,700 
$ 36,600 
$ 44,500 
 
 
 
 
 
 
 
 
Restructuring (Details) (USD $)
3 Months Ended 6 Months Ended 3 Months Ended 18 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Continuing Operations
Jun. 30, 2016
Continuing Operations
Sep. 30, 2016
Continuing Operations
Termination Benefits
Jun. 30, 2016
Continuing Operations
Termination Benefits
Sep. 30, 2016
Continuing Operations
Lease Exit Costs
Jun. 30, 2016
Continuing Operations
Lease Exit Costs
Sep. 30, 2016
2016 Restructuring Plan
Sep. 30, 2016
2016 Restructuring Plan
Termination Benefits
Restructuring related charges:
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative restructuring costs incurred
 
 
 
 
 
 
 
 
 
 
$ 25,500,000 
$ 24,400,000 
Restructuring reserve
 
 
 
 
 
 
 
 
 
 
 
 
Accrual balance, beginning of the period
 
 
 
 
4,282,000 
6,400,000 
4,282,000 
6,275,000 
125,000 
 
 
Restructuring charges (credits), net
74,000 
3,146,000 
(11,000)
14,684,000 
74,000 
(85,000)
74,000 
(85,000)
 
 
Cash payments
 
 
 
 
(1,473,000)
(2,033,000)
(1,473,000)
(1,908,000)
(125,000)
 
 
Accrual balance, end of the period
 
 
 
 
$ 2,883,000 
$ 4,282,000 
$ 2,883,000 
$ 4,282,000 
$ 0 
$ 0