LOGITECH INTERNATIONAL SA - Shareholder.com

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Table of Contents LOGITECH INTERNATIONAL S.A. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Logitech indemnifies some of its suppliers and customers for losses arising from matters such as intellectual property rights 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. No amounts have been accrued for indemnification provisions at March 31, 2007. The Company does not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under its indemnification arrangements. In May 2004, the Company acquired Intrigue Technologies, Inc., a privately held provider of advanced remote controls. The purchase agreement provides for deferred payments to Intrigue’s former shareholders based on the highest net sales from products incorporating Intrigue’s technology during the revenue measurement period, defined as any consecutive four-quarter period beginning in April 2006 through September 2007. The total deferred payment amount will vary with net sales in the revenue measurement period. The payment amount would approximate 27% of such net sales at the highest net sales level, although the percentage could be higher at lower net sales levels. Based on the net sales of remote controls for fiscal year 2007, the Company will be obligated to make a deferred payment of at least $33.7 million. The total deferred payment amount could be higher, and will not be known until the end of the revenue measurement period. The total deferred payment will be paid by December 31, 2007. As of March 31, 2007, a deferred payment of $33.7 million has been recorded as an adjustment to goodwill. All of the Company’s products are subject to the European Union’s (“EU”) Waste Electrical and Electronic Equipment Directive (“WEEE”), which came into effect in August 2004 and requires producers of electrical goods to be financially responsible for specified collection, recycling, treatment and disposal of covered products. Producer obligations also include specified collection, recycling, treatment and disposal of equipment that had been placed in the EU marketplace prior to August 2005, and has reached its end of life. To date, specific legal requirements have not been finalized by all member states, with certain member states delaying implementation until 2007 or beyond. In those countries where legislation is not in effect, the Company has concluded that the costs of managing and recycling historical and future waste equipment are not reasonably estimable, and no liability has been recognized. In those countries which have enacted legislation, the Company has provided for the costs of managing and recycling historical and future waste equipment. These costs, which are not material, are based on the Company’s estimated market share of the total cost, which depends on a number of factors, including administration and treatment costs as well as the commercial cost of recycling. The Company is involved in a number of lawsuits and claims relating to commercial matters that arise in the normal course of business. The Company believes these lawsuits and claims are without merit and intends to vigorously defend against them. However, there can be no assurances that its defenses will be successful, or that any judgment or settlement in any of these lawsuits would not have a material adverse impact on the Company’s business, financial condition and results of operations. F-29
Table of Contents Note 17 — Interest and Other Income LOGITECH INTERNATIONAL S.A. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Interest and other income, net was comprised of the following (in thousands): Year ended March 31, 2007 2006 2005 Interest income $ 9,083 $ 5,512 $ 3,771 Interest expense (350 ) (1,921 ) (3,630 ) Interest income, net $ 8,733 $ 3,591 $ 141 Foreign currency exchange gains, net $ 6,190 $ 7,580 $ 3,522 Gain on sale of investments, net 9,048 560 — Write-off of investments — (1,168 ) — Other, net 724 380 269 Other income, net $ 15,962 $ 7,352 $ 3,791 Note 18 — Segment Information The Company operates in one operating segment, which is the design, manufacturing and marketing of personal peripherals for personal computers and other digital platforms. Geographic net sales information in the table below is based on the location of the selling entity. Longlived assets, primarily fixed assets, are reported below based on the location of the asset. Retail and OEM net sales to unaffiliated customers by geographic region were as follows (in thousands): Year ended March 31, 2007 2006 2005 Europe $ 1,027,852 $ 887,736 $ 733,667 North America 729,207 617,942 503,356 Asia Pacific 309,510 291,037 245,603 Total net sales $ 2,066,569 $ 1,796,715 $ 1,482,626 In fiscal years 2007 and 2005, no single country other than the United States represented more than 10% of the Company’s total consolidated net sales. In fiscal year 2006, no single country other than the United States and Germany represented more than 10% of the Company’s total consolidated net sales. In fiscal year 2007, one customer represented 14% of net sales. In fiscal year 2006, two customers represented 14% and 11% of net sales. In fiscal year 2005, two customers represented 14% and 10% of net sales. As of March 31, 2007, one customer represented 16% of total accounts receivable. As of March 31, 2006, two customers represented 16% and 12% of total accounts receivable. F-30
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Table of Contents Part I TABLE OF C
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Table of Contents Customer Service
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Page 65 and 66: Table of Contents ITEM 17. FINANCIA
Page 67 and 68: Table of Contents SIGNATURES The re
Page 69 and 70: Table of Contents REPORT OF THE IND
Page 71 and 72: Table of Contents LOGITECH INTERNAT
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Page 103 and 104: CONSENT OF INDEPENDENT REGISTERED P
Page 105 and 106: REPORT ON CORPORATE GOVERNANCE Logi
Page 107 and 108: An additional 40 million shares hav
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Page 113 and 114: is responsible for leading the tran
Page 115 and 116: (4) Mr. Okamoto will retire from th
Page 117 and 118: Compensation Committee The Compensa
Page 119 and 120: the Chairman and the Chief Executiv
Page 121 and 122: eight years at Weiser Lock, a divis
Page 123 and 124: During 2007, stock option grants to
Page 125 and 126: proceedings that may arise by reaso
Page 127 and 128: 5.7 Additional Fees and Remuneratio
Page 129 and 130: Shareholders is sent and re-opens o
Page 131 and 132: Independent Registered Public Accou
Page 133 and 134: LOGITECH INTERNATIONAL S.A. Consoli
Page 135 and 136: I, Mark J. Hawkins, certify that: C
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