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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

     

ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2019or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Transition Period from to

Commission File Number: 0-29174

LOGITECH INTERNATIONAL S.A.

(Exactnameofregistrantasspecifiedinitscharter)

     Canton of Vaud, Switzerland(Stateorotherjurisdictionofincorporationororganization)

None(I.R.S.EmployerIdentificationNo.)

Logitech International S.A.EPFL - Quartier de l'InnovationDaniel Borel Innovation Center

1015 Lausanne, Switzerlandc/o Logitech Inc.

7700 Gateway BoulevardNewark, California 94560

(Addressofprincipalexecutiveofficesandzipcode)

(510) 795-8500

(Registrant'stelephonenumber,includingareacode)

SecuritiesregisteredpursuanttoSection12(b)oftheAct:

     Title of each class Name of each exchange on which registered

RegisteredSharesparvalueCHF0.25pershare TheNasdaqGlobalSelectMarket;SIXSwissExchange

SecuritiesregisteredortoberegisteredpursuanttoSection12(g)oftheAct:None

Indicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.YesýNoo

IndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct.YesoNoý

Indicatebycheckmarkwhethertheregistrant (1)hasfiledall reportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past90days.YesýNoo

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDatafilerequiredtobesubmittedpursuanttoRule405ofRegulationS-Tduringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles).YesýNoo

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Indicate by check mark if disclosure of delinquent filers pursuant to Item405of Regulation S-K (§229.405 of this chapter) is not contained herein, andwill not becontained,tothebestoftheregistrant'sknowledge,indefinitiveproxyorinformationstatementsincorporatedbyreferenceinPartIIIofthisForm10-KoranyamendmenttothisForm10-K.ý

Indicatebycheckmarkwhether theregistrant is alargeacceleratedfiler, anacceleratedfiler, anon-acceleratedfiler, asmaller reportingcompanyor anemerginggrowth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of theExchangeAct.

               Largeacceleratedfilerý Acceleratedfilero Non-acceleratedfilero Smallerreportingcompanyo EmergingGrowthCompanyo

Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.o

Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheAct).YesoNoý

Theaggregatemarketvalueofthevotingsharesheldbynon-affiliatesoftheregistrant,basedupontheclosingsalepriceofthesharesonSeptember28,2018,thelastbusinessdayoftheregistrant'ssecondfiscalquarterontheNasdaqGlobalSelectMarket,was$7,359,961,924.Forpurposesofthisdisclosure,votingsharesheldbypersonsknowntotheRegistranttobeneficiallyownmorethan5%oftheRegistrant'ssharesandsharesheldbyofficersanddirectorsoftheRegistranthavebeenexcludedbecausesuchpersonsmaybedeemedtobeaffiliates.Inthecaseof5%orgreatershareholders,wehavenotdeemedsuchshareholderstobeaffiliatesunlesstherearefactsand circumstances which would indicate that such shareholders exercise any control over the Registrant, or unless they hold 10% or more of Registrant’s share capitaloutstanding.Thisdeterminationisnotnecessarilyaconclusivedeterminationforotherpurposes.

AsofMay3,2019,therewere166,598,546sharesoftheRegistrant'ssharecapitaloutstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portionsoftheregistrant'sProxyStatementforthe2019AnnualMeetingofShareholdersareincorporatedhereinbyreferenceinPartIIIofthisAnnualReportonForm10-Ktotheextentstatedherein.SuchproxystatementwillbefiledwiththeSecuritiesandExchangeCommissionwithin120daysoftheregistrant'sfiscalyearendedMarch31,2019.

SecuritiesregisteredpursuanttoSection12(b)oftheAct:

Titleofeachclass TradingSymbol(s) Nameofeachexchangeonwhichregistered

RegisteredShares

LOGNLOGI

SIXSwissExchangeNasdaqGlobalSelectMarket

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TABLE OF CONTENTS

PagePart I Item1. Business 3Item1A. RiskFactors 16Item1B. UnresolvedStaffComments 32Item2. Properties 33Item3. LegalProceedings 33Item4. MineSafetyDisclosures 33

Part II  Item5. MarketforRegistrant'sCommonEquity,RelatedStockholderMattersandIssuerPurchasesof

EquitySecurities34

Item6. SelectedFinancialData 36Item7. Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations 38Item7A. QuantitativeandQualitativeDisclosuresAboutMarketRisk 55Item8. FinancialStatementsandSupplementaryData 56Item9. ChangesinandDisagreementsWithAccountantsonAccountingandFinancialDisclosure 56Item9A. ControlsandProcedures 56Item9B. OtherInformation 57

Part III  Item10. Directors,ExecutiveOfficersandCorporateGovernance 58Item11. ExecutiveCompensation 58Item12. SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholder

Matters 58Item13. CertainRelationshipsandRelatedTransactions,andDirectorIndependence 58Item14. PrincipalAccountantFeesandServices 59

Part IV  Item15. ExhibitsandFinancialStatementSchedules 59

Signatures  

Inthisdocument,unlessotherwiseindicated,referencestothe"Company","Logitech""we,""our,"and"us"aretoLogitechInternationalS.A.anditsconsolidatedsubsidiaries.Unlessotherwisespecified,allreferencestoU.S.Dollar,Dollaror$aretotheUnitedStatesDollar,thelegalcurrencyoftheUnitedStatesofAmerica.AllreferencestoCHFaretotheSwissFranc,thelegalcurrencyofSwitzerland.

Logitech,theLogitechlogo,andtheLogitechproductsreferredtohereinareeitherthetrademarksortheregisteredtrademarksofLogitech.Allothertrademarksarethepropertyoftheirrespectiveowners.

TheCompany'sfiscalyearendsonMarch31.Interimquartersaregenerallythirteen-weekperiods,eachendingonaFriday.Forpurposesofpresentation,theCompanyhasindicateditsquarterlyperiodsendonthelastdayofthecalendarquarter.

Theterm“Sales”meansnetsales,exceptasotherwisespecified.

Allreferencestoourwebsitesareintendedtobeinactivetextualreferencesonly,andthecontentofsuchwebsitesdonotconstituteapartofandarenotintendedtobeincorporatedbyreferenceintothisAnnualReportonForm10-K.

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FORWARD-LOOKING INFORMATION

ThisAnnualReportonForm10-Kcontains"forward-lookingstatements"withinthemeaningofthePrivateSecuritiesLitigationReformActof1995.Forward-lookingstatementsarebasedonbeliefsofourmanagementasofthefilingdateofthisAnnualForm10-K.Theseforward-lookingstatementsinclude,amongotherthings,statementsrelatedto:

• Ourstrategyforgrowth,futurerevenues,earnings,cashflow,usesofcashandothermeasuresoffinancialperformance,andmarketposition;

• Ourbusinessstrategyandinvestmentprioritiesinrelationtocompetitiveofferingsandevolvingconsumerdemandtrendsaffectingourproductsandmarkets,worldwideeconomicandcapitalmarketconditions,fluctuationsincurrencyexchangerates,andcurrentandfuturegeneralregionaleconomicconditionsforfiscalyear2020andbeyond;

• Thescope,natureorimpactofacquisition,strategicalliance,divestitureactivitiesandrestructuringofourorganizationalstructure;• Ourexpectationsregardingthesuccessofourstrategicacquisitions,includingintegrationofacquiredoperations,products,technology,

internalcontrols,personnelandmanagementteams;• Ourbusinessandproductplansanddevelopmentandproductinnovationandtheirimpactonfutureoperatingresultsandanticipated

operatingcostsforfiscalyear2020andbeyond;• Opportunitiesforgrowth,marketopportunitiesandourabilitytotakeadvantageofthem;• Potentialtariffs,theireffectsandourabilitytomitigatetheireffects;• Capitalinvestmentsandresearchanddevelopment;• Ourexpectationsregardingoursharebuybackanddividendprograms;• Thesufficiencyofourcashandcashequivalents,cashgeneratedfromoperations,andavailableborrowingsunderourbanklinesofcredit

tofundcapitalexpendituresandworkingcapitalneeds;and• TheeffectsofenvironmentalandotherlawsandregulationsintheUnitedStatesandothercountriesinwhichweoperate.

Forward-lookingstatementsalsoinclude,amongothers,thosestatementsincludingthewords"anticipate","believe","could","estimate","expect","forecast","intend","may","plan","project","predict","should","will"andsimilarlanguage.ThesestatementsreflectourviewsandassumptionsasofthedateofthisAnnualReportonForm10-K.Allforward-lookingstatementsinvolverisksanduncertaintiesthatcouldcauseouractualperformancetodiffermateriallyfromthoseanticipatedintheforward-lookingstatementsdependingonavarietyoffactors.ImportantinformationastothesefactorscanbefoundinthisAnnualReportonForm10-Kundertheheadingsof“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations”,“Overview”,“CriticalAccountingEstimates”and“LiquidityandCapitalResources”,amongothers.Factorsthatmightcauseorcontributetosuchdifferencesinclude,butarenotlimitedto,thosediscussedunderItem1A,RiskFactors,aswellaselsewhereinthisAnnualReportonForm10-KandinourotherfilingswiththeU.S.SecuritiesandExchangeCommission,or"SEC."Youarecautionednottoplaceunduerelianceontheforward-lookingstatements,whichspeakonlyasofthedateofthisAnnualReportonForm10-K.Weundertakenoobligationtopubliclyreleaseanyrevisionstotheforward-lookingstatementsorreflecteventsorcircumstancesafterthedateofthisdocument.

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PART I

ITEM 1. BUSINESS

Company Overview

Logitechisaworldleaderindesigning,manufacturingandmarketingproductsthathelpconnectpeopletodigitalandcloudexperiences.Morethan35yearsago,Logitechcreatedproductstoimproveexperiencesaroundthepersonalcomputer(PC)platform,andtodayitisamulti-brand,multi-categorycompanydesigningproductsthatenablebetterexperiencesconsuming,sharingandcreatingdigitalcontentforcomputing,gaming,videoandmusic,whetheritisonacomputer,mobiledeviceorinthecloud.Logitech'sbrandsincludeLogitech,Jaybird,UltimateEars,LogitechG,ASTROGamingandBlueMicrophones.

LogitechwasfoundedinSwitzerlandin1981,andLogitechInternationalS.A.hasbeentheparentholdingcompanyofLogitechsince1988.LogitechInternationalS.A.isaSwissholdingcompanywithitsregisteredofficeinApples,Switzerland,whichconductsitsbusinessthroughsubsidiariesintheAmericas(includingNorthandSouthAmerica),EMEA(Europe,MiddleEast,Africa)andAsiaPacific(including,amongothercountries,China,Taiwan,Japan,IndiaandAustralia).SharesofLogitechInternationalS.A.arelistedonboththeSIXSwissExchange,underthetradingsymbolLOGN,andtheNasdaqGlobalSelectMarket,underthetradingsymbolLOGI.ReferencesinthisAnnualReportonForm10-Ktothe"Company,""Logitech,""we,""our,"and"us"refertoLogitechInternationalS.A.anditsconsolidatedsubsidiaries.

Weoperateinasingleoperatingsegment:Peripherals.Formoreinformationaboutsegmentsandgeographicareas,pleaserefertoNote15ofourconsolidatedfinancialstatementsincludedinthisAnnualReportonForm10-K.Ourproductsparticipateinfivelargemarkets:Creativity&Productivity,Gaming,VideoCollaboration,MusicandSmartHome.Wesellourproductstoabroadnetworkofdomesticandinternationalcustomers,includingdirectsalestoretailersande-tailersandindirectsalesthroughdistributors.Ourworldwidechannelnetworkincludesconsumerelectronicsdistributors,retailers,massmerchandisers,specialtystores,computerandtelecommunicationsstores,value-addedresellersandonlinemerchants.

Acquisitions

OnAugust21,2018,weacquiredallequityinterestsinBlueMicrophonesHoldingCorporation(BlueMicrophones)foratotalconsiderationof$134.8millionincash(theBlueMicrophonesAcquisition),whichincludedaworkingcapitaladjustmentandrepaymentofdebtonbehalfofBlueMicrophones.BlueMicrophonesisaleadingaudiomanufacturerthatdesignsandproducesmicrophones,headphones,recordingtools,andaccessoriesforaudioprofessionals,musiciansandconsumers.TheBlueMicrophonesAcquisitionsupplementsourproductportfolio.

OnAugust11,2017,weacquiredcertainassetsandliabilitiesconstitutingtheASTROGamingbusiness(ASTRO)fromAGAcquisitionCorporationforapurchasepriceof$85.0millionincash(theASTROAcquisition).ASTROisaleadingconsolegamingaccessorybrandwithahistoryofproducingaward-winningheadsetsforprofessionalgamersandenthusiasts.ASTROprovidesastronggrowthplatformintheconsolegamingaccessoriesmarket.

Industry Overview

Historically,Logitech'sbusinesshasbeendrivenbythesametrendsthatdrovetheadoptionofdesktopandlaptopPCsforconsumers,businessesandinstitutionalapplications,includingthegrowthinaffordableprocessingpower,communicationsbandwidth,theincreasedaccessibilityofdigitalcontent,andthegrowingandpervasiveuseoftheInternetforproductivity,communicationandentertainment.Thesetrendshavecreatedopportunitiesfornewapplications,newusersanddramaticallyricherinteractionbetweenpeopleanddigitalcontent.

Inthelastseveralyears,newPCshipmentshavestagnatedand,combinedwithincreasedinterestinsmaller,mobilecomputingdevices(suchassmartphonesandtablets),themarketforPCperipheralshasrapidlychanged.WeseeopportunitieswithinthelargeinstalledbaseofPCs,createdbyconsumers'desiretorefreshtheircurrentPCswithnewperipherals,aswellasnewtrendsdevelopingwithintheconnecteddeviceecosystems.Inaddition,therefreshofoperatingsystemsandnewusecasescreatedbythegrowthofspecificcloud-basedservicesandapplicationsdrivenewperipheralsopportunities.Consumersarealsoenhancingtheirtabletexperiencewitharangeofkeyboardsandcasesthatenablethemtocreate,consumeanddomorewiththeirtabletsconvenientlyandcomfortably.

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Growingadoptionofcloud-basedexperiencesingaming,video,musicandsmarthomehasexpandedouraddressablemarketopportunities.Moreandmoreconsumerstodayinteractwithcloud-basedcontentplatforms,suchasSteamandTwitchforgaming,Spotify,AppleMusicandPandoraforstreamingmusic,orZoomorMicrosoftTeamsforvideocollaboration.Logitechoffersperipheralsandaccessoriestoenhancetheuseofsuchcloud-basedcontentplatforms.

Inthegamingmarket,therapidriseofelectronicsports(esports),andthedevelopmentofnewtechnologiesinsocial,virtualandaugmentedrealitypresentgrowthopportunities.Weleverageourdeepresearchanddevelopment(R&D)capabilitiesintheareaofPCperipheralstodevelopindustry-leadinggaminggearthatenhancesconsumers'overallgamingexperienceandperformance.Asconsumersincreasinglywatchvariousesportstournamentsorothergamingbroadcastsoncloud-basedplatformssuchasTwitch,thegamingindustryisbecomingbothasourceofentertainmentandparticipationbymainstreamconsumers.Wesponsorandworkcloselywithesportsathletestoimproveourbrandandthequalityandfunctionalityofourgamingproducts.Wealsooffergamingperipheralsthatenhancetheexperienceofmorecasualgamers.

Theuseofvideoacrossmultipleplatforms-PCs,laptopsandmobiledevicessuchastabletsandsmartphones-isacontinuingtrend.Thevideocommunicationindustrycontinuestomakeprogresstowardavisioninwhichpeoplecanconductavideocallfromanyoftheseplatformstoanyotherplatform.AndthistrendtoembracecloudvideoconferencingbybusinessesandinstitutionsisdrivingourVideoCollaborationcategoryandoffersalong-termgrowthopportunityforLogitech.Forbusinessesandinstitutions,videoconferencingisincreasinglysubstitutedfortravel,becauseofhightravelcostsaswellastheproductivitygainthatcanbeachievedbyahigh-qualityface-to-facemeetingthatdoesnotrequiretravelawayfromtheoffice.Further,withtheincreasedavailabilityofhighInternetbandwidth,videoconferencingisbecomingakeycomponentofUnifiedCommunications,whichistheintegrationofcommunicationssolutionssuchasvoicemail,e-mail,chat,presentationsharingandlivevideomeetings.Themarketopportunitytoprovideinnovative,affordable,andeasy-to-usevideocollaborationproductstothemillionsofsmall-tomedium-sizedmeetingroomslackingvideoissubstantial,andwearewell-positionedtotakeadvantageofthatopportunityandtoexpandintolarge-sizedmeetingrooms.

Cloud-basedmusicserviceshaveenjoyedtremendousgrowth,fueledbytheadoptionofsmartphones,tablets,andotherconnecteddevices.Consumersareoptimizingtheiraudioexperiencesontheirtabletsandsmartphoneswithwirelessmobilespeakersthatpaireasilywiththeirmobiledevicesandwithin-earandotherheadphones.Ourmobilespeakersandin-earheadphoneproductstargetalargeandgrowingmarketthatreflectstheincreasingpopularityofmobiledevicesorvariousvoiceassistantsforaccessingdigitalmusic.Additionally,withinthemusicmarket,consumersareincreasinglylisteningwithwirelessearphoneswhiletheyundertakeotheractivitiessuchassports.Theinnovationintrulywirelessheadphoneshasledtodouble-digitindustrygrowthinrevenueandaveragesellingprice,whichhighlightsamajoropportunityforLogitech.

Thehomeisalsoanimportantplacefortechnologicaldevelopment,particularlyasanincreasingnumberofobjectsbecomeconnectedsmarthomedevicessuchashomesecuritycameras,lightbulbs,securitylocks,thermostatsandothers.Logitech’slineofuniversalremotesandhubscontrolelectronicandconnecteddevicesaroundthehomeaswellastheseothersmartdevices.

Business Strategy

Logitech'sfoundationforfuturegrowthisbuiltonfivecorecapabilitiesthatapplytoallofourproductcategories:• Design;• Engineering;• Go-to-market;• Marketing;and• Operations.

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Design

Inthepastfewyears,Logitechhasstrengtheneditsdesigncapabilitiesbybuildingaworld-classteamofinternaldesigners.Ourdesignshaveaneverydayplaceinpeople’slives,connectingthemtothedigitalexperiencestheycareabout.Theseproductshavebeenearningprestigiousdesignawards-215designawardsduringthepastfivefiscalyears-andenthusiasticreviewsinthemedia.ThisisanimportantindicationthatLogitech’sstrategicaimtobecomeadesigncompanyisworking.Duringfiscalyear2019,wewon50designawardsspanningallofourproductcategories.AsLogitechestablishesitselfasadesigncompany,designthinkingandcultureareusedasastrategicandculturaldifferentiator.Designalsohelpstoreduceproductcoststhroughincreasedcollaborationbetweenourdesign,engineeringandmanufacturingteams.OurkeydesigncentersareinSwitzerland,Ireland,theUnitedStates,andTaiwan.

Engineering

Ourdecades-longexpertiseinkeyengineeringdisciplinessuchassensors,acoustics,optics,wireless,andpowermanagementisacorecompetitiveadvantageofLogitech.Furthermore,wecontinuetoextendourengineeringcapabilitiesintomoreadvancedtechnologiessuchassoftware,apps,cloud,dataanalyticsandmachinelearning.OurengineeringteamhasexpertiseindevelopingproductsforabroadarrayofplatformssuchasPCs,mobileandpersonalvoiceassistants(suchasAmazonAlexaandGoogleAssistant).Theseengineeringcapabilitiescombinedwithouraward-winningdesignteamformthebasisofLogitech'skeyinnovationengine.

Go-To-Market

Overthepast30-plusyears,Logitechhasbuiltanextensiveglobalgo-to-marketnetworkthatcanbeleveragedasweintroducenewproducts,enternewmarketcategoriesandoptimizethevalueofourexistingproductsandproductcategories.Wehavemultipleopportunitiestodrivegrowth-existingproductsinexistingretailers,newproductsinexistingretailers,existingproductsinnewretailers,andnewproductsinnewretailers.Beyondtraditionalretailanddistributionchannels,wehavealsocultivatedvariousnon-traditionalretailchannelsandarebuildingourdirectsalesforcetosellourproducts.Aswecontinuetoexpandintonewchannels,therearenumerouscross-sellingopportunitiesacrossourbroadproductportfolio.WehaveestablishedLogitechasaneutraltechnologysupplierthatcanworkwithleadingtechnologyvendorsandplatformsaswellasprovideconnectionsamongtheirproductsandecosystems.

Marketing

AsLogitechexpandsintomultiplecategorieswithmultiplebrands,wearefocusingonenhancingourmarketingcapabilitiesaroundbrandstrategyandexecution,digitalmarketing,andmarketingtechnology.Mostofthemarketingandcreativeeffortsthatwereonceoutsourcedtooutsidemarketingagenciesarenowexecutedthroughourinternalteamsfromconcepttoexecution,whichimprovesspeedandcostefficiency.Weareincreasingourleverageofdigitalmediachannelsandprogramstodriveconsumerbrandengagementandpurchase.Wearealsoincreasingourfocusonmarketinganalyticsplatformstoimproveourunderstandingofmarketinginvestmentsandtomaximizereturnoninvestment(ROI).Andwearemakinginvestmentstoupgradeandexpandallaspectsofourmarketingtechnologyinfrastructure,includingthere-platformingofourwebsitestosupporttheglobalexpansionofourbrandsacrosscountries,languagesanddevicesandprovidethefoundationfortheaccelerationofourdigitalmarketingeffortsandevolutiontopersonalizedconsumercommunication.

Operations

Logitech’soperationscapabilityconsistsofahybridmodelofin-housemanufacturingandthird-partycontractmanufacturers,whichallowsustoeffectivelyrespondtorapidlychangingdemandandleverageeconomiesofscale.Oursupplychain’sextensiveglobalreach,keydistribution,adoptionoffactoryautomationandstrategicbusinessrelationshipscombinedwithextensiveanalyticmodelingexpertise,optimizationtoolsandglobalprocessesprovideacompetitiveadvantageagainstmanyofourcompetitors.

Products

Logitechdesigns,manufacturesandmarketsproductsthatallowpeopletoconnectthroughmusic,gaming,video,computing,andotherdigitalplatforms.Thelargemajorityofourrevenuehashistoricallybeenderivedfromsalesofourproductsforusebyconsumers.

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Creativity & Productivity

Pointing Devices: Logitechoffersavarietyofpointingdevices.Someofourkeyproductsinthiscategoryinclude:

• TheLogitechMXMaster2SandMXAnywhere2Swirelessmice,ourflagshipwirelessmouseproducts.EnabledwithLogitechFlowcross-computercontrolsoftware,theseproductsrepresentthenewparadigmforprecise,fast,comfortablecross-computerdigitalnavigation.

• TheLogitechMXErgo,awirelesstrackballthatofferspersonalizedcomfortwithauniqueadjustablehinge,precisiontrackingandmulti-deviceconnectivity.

• TheLogitechMXVertical,awirelessmousewhichisangled57degreeandofferspersonalizedergonomiccomfortprecisiontrackingandmulti-deviceconnectivity.

• TheLogitechWirelessMouseM325,whichoffersmicro-precisescrolling,18-monthbatterylifeandcomfortabledesign.• TheLogitechWirelessMouseM185,awirelessmousewithnanoreceivertechnologythatiscompatiblewithanycomputer.

Keyboards & Combos: Logitechoffersavarietyofcordedandcordlesskeyboards,livingroomkeyboards,andcombos(keyboard-and-mousecombinations).Someofourproductsinthiscategoryinclude:

• TheLogitechCraftAdvancedWirelesskeyboard,apremiumbacklitkeyboardwithcustomizableinputdialtoaccessdirectlymenusandshortcutswithinleadingcreativityandproductivityapps.

• TheLogitechWirelessTouchKeyboardK400Plus,acompactkeyboardwithanintegratedtouchpadand10-meterwirelessrange,designedforuseinthelivingroom.

• TheLogitechWirelessComboMK270,afull-sizekeyboardandmousecombinationwithatinyUSBreceiver.

PC Webcams: OurPCWebcamscategorycomprisesPC-basedwebcamstargetedprimarilyatconsumers.TheLogitechHDProWebcamsC920&C922,whichofferrazor-sharpHD1080pvideorecordingsandstereosound,weretoprevenue-generatingwebcamsduringfiscalyear2019.

Tablet & Other Accessories: OurTablet&OtherAccessoriescategoryincludeskeyboardsfortabletsandsmartphonesaswellasotheraccessoriesformobiledevices.TheseproductsaremostlyforiPadsbutarealsoforselectSamsungandotherAndroidtablets.Someofourproductsinthiscategoryinclude:

• TheLogitechSlimComboBacklitKeyboardCasewithSmartConnectorfortheiPadPro12.9andiPadPro10.5thatprovidesthinandlightfrontandbackprotection,adetachablebacklitkeyboardandamulti-anglestandforoptimalviewingandface-time.

• TheLogitechSlimFolioKeyboardCasewithBluetoothfortheiPad6thGenerationthatprovidesthinandlightfrontandbackprotection,akeyboardwithshortcutkeysandanoptimizedangleforviewing.

• TheLogitechKeys-To-Go,anultra-portable,stand-alonekeyboard.

Gaming

LogitechGprovidesgamersofalllevelswithindustry-leadingkeyboards,mice,headsetsandsimulationproductssuchassteeringwheelsandflightsticks,incorporatinginnovativedesignandadvancedtechnologies.Someofourproductsinthiscategoryinclude:

• TheLogitechG513RGBMechanicalGamingKeyboard,whichfeatureshigh-performancemechanicalswitches,LIGHTSYNCintelligentRGBillumination,aleatherpalmrest,ametaltopcase,andaUSBpass-through.

• TheLogitechGPROWirelessGamingMousethatwasdesignedincollaborationwiththeworld'stopprofessionals,andfeaturesourLIGHTSPEEDTMprofessionalgradewirelesstechnology,ourexclusivehigh-performanceHEROgamingsensor,aflexibleambidextrousdesign,andsupportforourPOWERPLAYTMwirelesschargingsolution,formaximumperformanceandcomfortoverlonggameplaysessions.

• TheLogitechG29DrivingForceSteeringWheelforSonyPlayStation4,whichfeaturesapowerfuldual-motorforcefeedbacktransmission,hand-stitchedleather-wrappedrim,andstainlesssteelthrottle,brakeandclutchpedalsforanultra-realisticdrivingexperience.

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ASTROGamingisaperformancegamingandlifestylebrandfocusedontheconsolegamingperipheralsmarketwithacross-platformlineupconsistingoffourprimaryheadsetmodelsandahigh-performancecontrollerforPlaystation4andPC:

• TheA50WirelessHeadsetandBaseStationthattargetsthediscerning“prosumer”consumer,featuringintegratedMixAmptechnology,Dolby®DigitalsurroundsoundandtheASTROCommandCenterSoftwaresystem.

• TheA40TRandMixAmpPro,awiredsolutionthattargetstheesportprofessionalandlivestreamer,featuringDolby®Digitalsurroundsound,daisy-chainchat,livestreamportandtheASTROCommandCenterSoftwaresystem.

• TheA20WirelessHeadset,astereoheadsetdeliveringthesignatureASTROcomfortandaudiocustomizationviatheASTROCommandCenterSoftware.

• TheA10wiredheadset,anultra-durablerobustheadsetdeliveringASTROsignaturecomfortandsoundqualityatamoreaccessiblepricepoint.

• TheC40TR(TournamentReady)wirelesscontrollerforPlayStation4andPC,whichhasmodular,swappableandreplaceablejoysticksandd-pad,andalsousesaproprietarylow-latencywirelessconnectionthatsupportsadvancedwirelessaudiodirectlytothecontroller.

Video Collaboration

TheVideoCollaborationcategoryincludesLogitech’sConferenceCams,whichcombineenterprise-qualityaudioandhighdefinition(HD)1080pvideowithaffordabilitytobringvideoconferencingtobusinessesofanysize.Ourkeyproductsinthiscategoryinclude:

• LogitechRally,whichoffersbest-in-classvideoconferencingwithUltraHD4kvideoandprofessionalaudiothateasilyturnsmedium-tolarge-sizedconferenceroomsintovideo-enabledcollaborationrooms.

• LogitechMeetUpisLogitech’spremierConferenceCamdesignedforhuddlerooms,witharoom-capturing120°fieldofview(FOV),4Kopticsandexceptionalaudioperformance.

• LogitechBRIO,whichhas4Kvideo,RightLight3andhighdynamicrange(HDR)toimprovechallenginglighting,andWindowsHellofacialrecognitionsupportforsecureloginusingjustauser'sface.

Music

Mobile Speakers: OurMobileSpeakerscategorycomprisesportablewirelessBluetoothandWi-Fispeakers.Oneofourtoprevenue-generatingproductsintheMobileSpeakerscategoryduringfiscalyear2019wastheUltimateEarsWONDERBOOM,oursmallersizedadditiontoourline-upof360°portableBluetoothwirelessspeakersthatprovidebold,immersivesoundineverydirection.TheUltimateEarsWONDERBOOMwasakeydriverforsuccessinfiscalyear2018inthisproductcategoryalongwiththeUltimateEarsBOOM2,ourflagshipBluetoothspeaker,andMEGABOOM,whichhasmorebassandisalargerandmorepowerfulcomplementtotheUltimateEarsBOOM2.Infiscalyear2019,wereleasedourUltimateEarsBOOM3andUltimateEarsMEGABOOM3,whichcomparedwiththepriormodel,havebeenupdatedwithbettersound,moredurablefabricandaMagicButtonfeaturethatenablesdirectaccesstoaconsumer’spersonalplaylists.

Audio & Wearables: OurAudio&WearablescategorycomprisesPCspeakers,PCheadsets,in-earheadphonesandpremiumwirelessaudiowearablesdesignedtoenhancetheaudioexperienceandstudio-qualitymicrophonesforprofessionalsandconsumers.WeofferboththeJaybirdwirelessaudiowearablesforsportsandactivelifestylesandourcustomin-earheadphones,madebyUltimateEars.Jaybirdisadigitallynativebrandthatpioneeredthewirelessin-earheadphonespaceandcontinuestobealeadingbrandinheadphonesmadeforathletes.Designedforsport&IPX7rated,Jaybird’sTarahPro,Tarah,X4andRunXToffergreatsoundwiththedurabilitythatathletesdemand.AllJaybirdproductsareaccompaniedbysoftwaresupportedonbothAndroidandiOSthatoffersarichpersonalizedlisteningexperience.

OurBlueMicrophonesproductlinehasa20-yearlegacyofinnovative,designandperformanceacrossbothprofessionalandconsumermarkets.BlueMicrophonesoffersarangeofaudiotoolsforrecordingorbroadcastingapplication,fromYouTubeandpodcastproductiontomusicandgaming.ExamplesofproductsinBlueMicrophonesproductslineupinclude:

• Yeti:ApremiumUSBmicrophoneforgamestreaming,podcasting,YouTube,Skype/VoIPandmusic.Withitsproprietary3-capsulearray,itdeliversastoundingdetailsandpresenceandincludesfourrecordingpatterns(cardioid,omni,bi-directionalandstereo)forversatility.

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• YetiPro:Aversatilehigh-resolutionUSBandXLRmicrophone.TheYetiProisahigherresolutionversionofYetiandincludes24-bit/192kHzaudioresolutionforhigh-resolutionmusicrecording,sounddesignandpodcasting,anXLRbreakoutcableforconnectingtoexistinghomestudioaudiointerfacesormixersanda3-capsulearraywithcardioid,omni,bi-directionalandstereopickuppatterns.

• YetiNano:ApremiumUSBmicrophonewithbroadcastsoundqualityinamorecompactformat.Dualcapsuledesignenablescardioidandomnipatterns.

Smart Home

OurSmartHomecategoryincludesourHarmonylineofadvancedhomeentertainmentcontrollers,newproductsdedicatedtocontrollingemergingcategoriesofconnectedsmarthomedevicessuchaslighting,thermostatsanddoorlocks,andhomesecuritycameras.Examplesofproductsinthiscategoryinclude:

• TheLogitechHarmonyEliteandtheLogitechHarmonyCompanion,bothofwhichfeatureLogitech'sHarmonyHubandintegrationwiththemostpopularvoiceplatforms-GoogleandAmazon-forcompletecontrolofthehomeentertainmentsystem,includingBluetoothandIPdevicessuchasPS4andRoku.

• TheLogitechHarmony350,650and950remotes,whichofferinfrared(IR)-onlycontrolofhomeentertainmentdevicesandenableconsumerstoreplacemanyremoteswithone.

• Circle2,anindoorandoutdoor,weatherproof,wiredor100%wire-free1080pHDhomesecuritycamerawithnightvisionandupto180°field-of-view,whichconnectswithsmarthomeplatformsincludingAmazonAlexa,GoogleAssistantandAppleHomeKit.

Research and Development

Werecognizethatcontinuedinvestmentinproductresearchanddevelopment(includingdesign)iscriticaltofacilitateinnovationofnewandimprovedproducts,technologiesandexperiences.Ourresearchanddevelopmentexpensesforfiscalyears2019,2018and2017were$161.2million,$143.8millionand$130.5million,respectively.Weexpecttocontinuetodevotesignificantresourcestoresearch,developmentanddesign,includingdevicesfordigitalplatforms,videocommunications,wirelesstechnologies,powermanagement,userinterfacesanddevicedatabasemanagementtosustainourcompetitiveposition.

Sales and Distribution

Principal Markets

Salesbygeographicregionforfiscalyears2019,2018and2017(basedonthecustomers'location)areasfollows(inthousands):

  Year Ended March 31,

  2019   2018   2017Americas   $ 1,190,216   $ 1,118,324   $ 963,674EMEA   861,731   820,347   746,898AsiaPacific   736,375   628,192   510,855TotalSales   $ 2,788,322   $ 2,566,863   $ 2,221,427

RevenuesfromsalestocustomersinSwitzerland,ourhomedomicile,represented3%,2%and2%ofoursalesinfiscalyears2019,2018and2017,respectively.Infiscalyears2019,2018and2017,revenuesfromsalestocustomersintheUnitedStatesrepresented36%,37%and37%ofoursales,respectively.Infiscalyear2019,2018and2017,revenuesfromsalestocustomersinGermanyrepresented18%,16%and17%ofoursales,respectively.RevenuesfromsalestocustomersinChinarepresented10%ofoursalesforfiscalyear2019.Noothercountryrepresentedmorethan10%ofoursalesforfiscalyears2019,2018or2017.

Sales and Distribution

Oursalesandmarketingactivitiesareorganizedintothreegeographicregions:theAmericas(NorthandSouthAmerica),EMEA(Europe,MiddleEast,Africa)andAsiaPacific(China,Japan,Australia,Taiwan,Indiaandothercountries).

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Wesellourproductsprimarilytoanetworkofdistributors,retailersande-tailers.Wesupportthesechannelswithourdirectsalesforceandthird-partydistributioncenterslocatedinNorthAmerica,SouthAmerica,EuropeandAsiaPacific.

MajordistributorsinNorthAmericaincludeIngramMicroInc.,TechDataCorporation,D&HDistributingCompany,andSynnexCorporation.InEurope,majorPan-EuropeandistributorsincludeIngramMicro,TechData,andGemDistribution.WealsoselltomanyregionaldistributorssuchasActebisGmbHinGermany,LittlebitTechnologyPartnersAGintheNetherlands,CopacoDcB.V.intheNetherlandsandothers.InAsia,majordistributorsincludeWincheersInternationalTradingCo.,LtdinChina,BeijingDigitalChinaLimitedinChina,DaiwaboinJapan,SynnexinAustraliaandthePan-Asiandistributor,IngramMicro.Ourdistributorcustomerstypicallyresellproductstoretailers,value-addedresellers,systemsintegratorsandotherdistributorswithwhomLogitechdoesnothaveadirectrelationship.

Logitech'sproductscanbepurchasedinmostmajorretailchains,wherewetypicallyhaveaccesstosignificantshelfspace.IntheU.S.,thesechainsincludeBestBuy,Walmart,Staples,OfficeDepotandTarget.InEurope,chainsincludeMetroGroup(Media-SaturnGroup),Elkjop,FNAC,andDixonsStoresGroupPLC.Logitechalsosellsproductstonon-traditionalretailchannelssuchastelcos.Inaddition,LogitechproductscanbepurchasedonlineeitherdirectlyfromLogitech.comorthroughe-tailers,suchasAmazon.com,thewebsitesofourmajorretailchainsnotedpreviously,andothers.Logitechproductsarealsocarriedbybusiness-to-businessdirectmarketresellerssuchasCDW,Insight,Zones,PCConnection,andSHI.

Infiscalyears2019,2018and2017,IngramMicroanditsaffiliatedentitiestogetheraccountedfor13%,15%and15%ofourgrosssales,respectively.Infiscalyears2019,2018and2017,AmazonInc.anditsaffiliatedentitiestogetheraccountedfor14%,13%and12%ofourgrosssales,respectively.Noothercustomerindividuallyaccountedformorethan10%ofourgrosssalesduringfiscalyears2019,2018or2017.

ThematerialtermsofourdistributionagreementswithIngramMicroanditsaffiliatedentitiesaresummarizedasfollows:

• Theagreementsarenon-exclusiveintheparticularterritoryandcontainnominimumpurchaserequirements.• Eachagreementmaybeterminatedforconvenienceatanytimebyeitherparty.Mostagreementsprovideforterminationon30dayswritten

noticefromeitherparty,withtwoIngramMicroagreementsprovidingforterminationon90daysnotice.• Wegenerallyofferanallowanceformarketingactivitiesequaltoanegotiatedpercentageofsalesandvolumerebatesrelatedtopurchase

volumesorsalesofspecificproductstospecifiedretailers.Thesetermsvarybyagreement.• Agreementsallowpriceprotectioncreditstobeissuedforon-handorin-transitnewinventoryifwe,inoursolediscretion,lowerthepriceof

theproduct.• Wegrantlimitedstockrotationreturnrightsincertainterritories.

ThematerialtermsofourreselleragreementswithAmazonanditsaffiliatedentitiesaresummarizedasfollows:

• Eachagreementhasaoneyeartermfollowedbyone-yearautomaticrenewals.• Wegenerallyofferanallowanceformarketingactivitiesequaltoanegotiatedpercentageofsalesthroughtransactionsandadditional

rebatesrelatedtosalesofspecificproductstoendusers.Thesetermsvarybyagreement.• Agreementsallowpriceprotectioncreditstobeissuedforon-handorin-transitnewinventoryifwe,inoursolediscretion,lowerthepriceof

theproduct.

Throughouroperatingsubsidiaries,wemaintainmarketingandchannelsupportofficesinapproximately40countries.

Backlog

Inourexperience,theamountofbacklogatanyparticularfiscalperiod-endisnotameaningfulindicationofourfuturebusinessprospects,asthecyclebetweenorderandshipmentofoursalesisgenerallyrelativelyshort,andalsothebacklogisimpactedbythecommercialcycleofourproducts.

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Customer Service and Technical Support

Ourcustomerserviceorganizationprovidesusertechnicalsupport,supportrelatedtoproductinquiry,andordersupport.WesupportthesecustomerservicefunctionswithanoutsourcedoperationthathassupportcenterslocatedinChina,SouthKorea,India,thePhilippines,Mexico,BulgariaandNorthernIreland.Ourcustomerserviceandtechnicalpersonnelineachofourregionsprovidesupportservicestoretailpurchasersofproductsthroughtelephone,e-mail,forums,chat,andtheLogitechSupportwebsite.Forsomeofourbrands,dedicatedsupportwebsitesandchannelsareavailable.Logitechprovideswarrantiesonourbrandedproductsthatrangefromonetofiveyears.ForourVideoCollaborationbusiness,wealsoworkwithchannelpartnerstoofferbundledsupportserviceswithLogitechVideoCollaborationsolutions.

InKorea,India,andChina,therearemultiplelocationswhereconsumersmayobtainservicefortheirLogitechproducts.Theselocationsaremanagedbythird-partylogisticsproviders.ConsumerswhohavepurchasedLogitechproductscanvisittheselocationsforproductinspection,testingandreturnorexchangeofproducts.WithinChina,thereisalsoamail-incentertoprovidetheseservicesformoreremotelocationsinChina.

Manufacturing

Logitech'smanufacturingoperationsconsistprincipallyoffinalassemblyandtesting.Since1994,wehavehadourownmanufacturingoperationsinSuzhou,China,whichcurrentlyhandlesapproximatelyhalfofourtotalproductionofproducts.WecontinuetofocusonensuringtheefficiencyoftheSuzhoufacilities,throughtheimplementationofqualitymanagement,automation,processimprovements,andemployeeinvolvementprograms.WeoutsourcetheremainingproductiontocontractmanufacturersandoriginaldesignmanufacturerslocatedinAsia.Bothourin-houseandoutsourcedmanufacturingoperationsaremanagedbyourworldwideoperationsgroup.Theworldwideoperationsgroupalsosupportsthebusinessunitsandmarketingandsalesorganizationsthroughthemanagementofdistributioncentersandthesupplychainandtheprovisionoftechnicalsupportandotherservices.

Newproductlaunches,processengineering,commoditiesmanagement,logistics,qualityassurance,operationsmanagementandmanagementofLogitech'scontractmanufacturersoccurinChina,Taiwan,HongKongandMalaysia.CertaincomponentsaremanufacturedtoLogitech'sspecificationsbyvendorsinAsia,theUnitedStates,andEurope.Wealsousecontractmanufacturerstosupplementinternalcapacityandtoreducevolatilityinproductionvolumes.Inaddition,someproducts,includingmostkeyboards,certaingamingdevicesandcertainaudioproductsaremanufacturedbycontractmanufacturerstoLogitech'sspecifications.

Ourhybridmodelofin-housemanufacturingandcontractmanufacturersallowsustoeffectivelyrespondtorapidlychangingdemandandleverageeconomiesofscale.Throughourhigh-volumemanufacturingoperationslocatedinSuzhou,China,webelievewehavebeenabletomaintainstrongqualityprocesscontrolsandhaverealizedsignificantcostefficiencies.OurSuzhouoperationprovidesforincreasedproductioncapacity,manufacturingknow-how,IPprotectionandgreaterflexibilityinrespondingtoproductdemand.Further,byoutsourcingthemanufacturingofcertainproducts,weseektoreducevolatilityinproductionvolumesaswellasimprovetimetomarket.

Competition

Ourproductcategoriesarecharacterizedbylarge,well-financedcompetitors,shortproductlifecycles,continualperformanceenhancements,andrapidadoptionoftechnologicalandproductadvancementsbycompetitorsinourretailmarkets.Wehaveexperiencedaggressivepricecompetitionandotherpromotionalactivitiesfromourprimarycompetitorsandless-establishedbrands,includingbrandsownedbysomeretailcustomersknownashousebrands.Wemayalsoencountermorecompetitionifanyofourcompetitorsinoneormorecategoriesdecidetoenterothercategoriesinwhichwecurrentlyoperate.

Aswetargetopportunitiesinnewcategoriesandmarketsandassomeofourproductcategoriesdemonstrategrowth,weareconfrontingnewcompetitors,manyofwhichmayhavemoreexperienceinthecategoriesormarketsandhavegreatermarketingresourcesandbrandnamerecognitionthanwehave.Inaddition,becauseofthecontinuingconvergenceofthemarketsforcomputingdevicesandconsumerelectronics,weexpectgreatercompetitioninthefuturefromwell-establishedconsumerelectronicscompaniesinourdevelopingcategories,aswellasfutureoneswemightenter.Manyofthesecompanieshavegreaterfinancial,technical,sales,marketing,andotherresourcesthanwehave.

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Weexpectcontinuedcompetitivepressureinourbusiness,includinginthetermsandconditionsthatourcompetitorsoffercustomers,whichmaybemorefavorablethanourtermsandconditionsandmayrequireustotakeactionstoincreaseourcustomerincentiveprograms,whichcouldimpactoursalesandoperatingmargins.

Creativity and Productivity

Pointing Devices: Apple,MicrosoftCorporationandHPInc.areourmaincompetitorsworldwide.Wealsoexperiencecompetitionandpricingpressurefromless-establishedbrands,includinghousebrandsandlocalcompetitorsinAsianmarkets,suchasElecomCo.,Ltd.,BuffaloInc.,ShenzhenRapooTechnologyCo.,Ltd.,andXiaomiInc.

Keyboards & Combos: MicrosoftandApplearethemaincompetitorsinourPCkeyboardandcomboproductlines.Wealsoexperiencecompetitionandpricingpressureforcordedandcordlesskeyboardandcombosfromless-establishedbrands,includinghousebrandsandlocalcompetitorsinAsianmarkets.

Tablet & Other Accessories: CompetitorsinthetabletkeyboardmarketareApple,ZaggInc.,KensingtonComputerProductsGroup,BelkinInternational,Inc.,TargusCorporationandotherless-establishedbrands.Althoughweareoneoftheleadersinthetabletkeyboardmarketandcontinuetobringinnovativeofferingstothemarket,weexpectthecompetitionmayincrease.CompetitorsinthetabletcasemarketincludeApple,OtterProductsLLC,SpeckProductsandalargenumberofsmallbrands.

PC Webcams: OurprimarycompetitorsforPCwebcamsareMicrosoftandothermanufacturerstakingsmallermarketsharesuchasRazerInc.

Gaming

CompetitorsforourGamingproductsincludeRazerInc.,Corsair,SteelSeries,TurtleBeachCorporationandKingstonTechnologyCorporation,amongothers.

Video Collaboration

OurcompetitorsforVideoCollaborationproductsincludeCiscoSystems,Inc.,Polycom,Inc.(acquiredbyPlantronics,Inc.),GNNetcom/Jabra(whichrecentlyacquiredAltiaSystems),andAVerInformationInc.,amongothers.

Music

Mobile Speakers: OurcompetitorsforBluetoothwirelessspeakersincludeBoseCorporation,HarmanInternationalIndustries,Inc(ownedbySamsungElectronicsCo.,Ltd.),andBeatsElectronicsLLC(ownedbyAppleInc.),amongothers.Harmanisourlargestcompetitor.Personalvoiceassistantsandotherdevicesthatoffermusic,suchasSonos,Amazon'sEcho,GoogleHomeandAppleHomePod,alsocompetewithourproducts.Amazonisalsoasignificantcustomerofourproducts.

Audio & Wearables: ForPCspeakers,ourcompetitorsincludeBose,CyberAcoustics,Phillips,CreativeLabs,Inc,AppleandSamsung,amongothers.

ForPCheadsets,ourmaincompetitorsincludePlantronicsInc.andGNNetcom,amongothers.In-earheadphonescompetitorsincludeBeats,Bose,Apple,Sony,JBLandSennheiser,amongothers.Theplatformproviders(e.g.,AppleandSamsung)areabletocrafttighterexperiencesfortheirconsumersduetotheirabilitytocontrolbothendsoftheecosystem(theheadphoneandthemobiledevice).

OurcompetitorsforBlueMicrophonesproductsincludeRodeMicrophonesLLC,AudioTechnicaCorporation,SamsonTechnologies,ShureInc,RazerIncandApogeeElectronics,amongothers.

Smart Home

Directcompetitorsintheremotecontrolmarketincludepro-installer-focusedUniversalRemoteControlInc.,andnew“DIY”entrants.Indirectcompetitionexistsintheformoflow-end“replacementremotes”suchasSonyCorporation,RCACorporation,GeneralElectricCompany(GE),pureapp-basedsolutionssuchasPeelTechnologies,aswellasdeviceand/orsubscriber-specificsolutionsfromTVmakerssuchasSamsungandVizioandmultiple-systemoperators(MSOs)suchasComcastCorporationandDirecTV.CompetitioninthehomecontrolmarketalsoexistsintheformofhomeautomationplatformssuchasSmartThings(ownedbySamsung),AmazonwithitsEchoproduct,GoogleHomeandNest(ownedbyAlphabetInc.),Winkandmanyotherstartupsinthe

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space.ManyoftheseproductsandbrandsarepartnerswithLogitechaswellviaintegrationswithHarmonyremotes.

Intellectual Property and Proprietary Rights

IntellectualpropertyrightsthatapplytoLogitech'sproductsandservicesincludepatents,trademarks,copyrights,andtradesecrets.

WeholdvariousUnitedStatespatentsandpendingapplications,togetherwithcorrespondingpatentsandpendingapplicationsfromothercountries.Whilewebelievethatpatentprotectionisimportant,wealsobelievethatpatentsareoflesscompetitivesignificancethanfactorssuchastechnologicalinnovation,easeofuse,andqualitydesign.NosinglepatentisinitselfessentialtoLogitechasawhole.Fromtimetotimewereceiveclaimsthatwemaybeinfringingonpatentsorotherintellectualpropertyrightsofothers.Asappropriate,claimsarereferredtocounsel,andcurrentclaimsareinvariousstagesofevaluationandnegotiation.Ifnecessaryordesirable,wemayseeklicensesforcertainintellectualpropertyrights.ReferalsotothediscussioninItem1A,RiskFactors—"Wemaybeunabletoprotectourproprietaryrights.Unauthorizeduseofourtechnologymayresultinthedevelopmentofproductsthatcompetewithourproducts."and"Claimsbyothersthatweinfringetheirproprietarytechnologycouldadverselyaffectourbusiness."

TodistinguishgenuineLogitechproductsfromcompetingproductsandcounterfeitproducts,Logitechhasused,registered,orappliedtoregistercertaintrademarksandtradenamesintheUnitedStatesandothercountriesandjurisdictions.LogitechenforcesitstrademarkandtradenamerightsintheUnitedStatesandothercountries.Inaddition,thesoftwareforLogitech'sproductsandservicesisentitledtocopyrightprotection,andwegenerallyrequireourcustomerstoobtainasoftwarelicensebeforeprovidingthemwiththatsoftware.Wealsoprotectdetailsaboutourproductsandservicesastradesecretsthroughemployeetraining,licenseandnon-disclosureagreements,technicalmeasuresandotherreasonableeffortstopreserveconfidentiality.

Environmental Regulation

Wearesubjecttolawsandregulationsinmanyjurisdictionsregulatingthematerialsusedinourproductsand,increasingly,product-relatedenergyconsumption,andtherecyclingofourproducts,batteries,andpackaging.

Europe. InEurope,wearesubjecttotheEuropeanUnion's(EU's),RestrictionofUseofCertainHazardousSubstancesinElectricalandElectronicsEquipmentDirective2011/65/EU(RoHSDirective).ThisdirectiverestrictstheplacementintotheEUmarketofelectricalandelectronicequipmentcontainingcertainhazardousmaterialsincludinglead,mercury,cadmium,chromium,phthalatesandhalogenatedflame-retardants.AllLogitechproductsarecoveredbythedirectiveandhavebeenmodified,ifnecessary,tobecompliantwiththeRoHSDirective,weissueadeclarationofconformityandmarktheproductwiththe'CE'mark.

WearealsosubjecttotheEU'sEnergy-relatedProductsDirective(ErPDirective),whichaimstoencouragemanufacturersandimporterstoproduceproductsdesignedtominimizeoverallenvironmentalimpact.UndertheErPDirective,manufacturersmustensurethattheirenergy-relatedproductscomplywithapplicablerequirements,issueadeclarationofconformityandmarktheproductwiththe'CE'mark.

Wehaveassessedtheapplicabilityandimplementationoftheapplicablemeasuresonourrelevantproductlinesandhavetakenstepstoensurethatourproductsmeettherequirements.AdoptionoftheErPDirectivewillbealignedinallEUmemberstates.SimilarrequirementsexistinthefourmemberstatesoftheEuropeanFreeTradeAssociation(Iceland,Norway,LiechtensteinandSwitzerland).SuchrequirementsaresubstantiallymetbycompliancewiththeErPDirective.

WearealsosubjecttoanumberofEndofLifeStewardshipdirectivesincludingtheEU'sWasteElectricalandElectronicEquipmentDirective,theEUPackagingDirectiveandtheEUBatteryDirective,whichrequireproducersofelectricalgoods,packaging,andbatteriestobefinanciallyresponsibleforcostsofspecifiedcollection,recycling,treatmentanddisposalofcoveredproducts.Whereapplicable,wehaveprovidedfortheestimatedcosts,whicharenotmaterial,ofmanagingandrecyclinghistoricalandfuturewasteequipment,packagingandbatteries.WearealsosubjecttotheEuropeanREACHDirective(Regulation(EC)No.1907/2006forRegistration,Evaluation,Authorization,andRestrictionsofChemicals)(REACHDirective)andwehavetakenstepstoensurethatourrelevantproductlinesarecompliantwiththeapplicableprovisionoftheREACHDirective.

China. InChina,wearesubjecttoChina'slawsonManagementMethodsontheControlofPollutionCausedbyElectronicInformationProducts(theChinaRoHSlaws).TheChinaRoHSlawsaresubstantiallysimilartotheEU

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RoHSDirective,andassuch,ourproductsarealreadycompliant.TheChinaRoHSlawsrequireadditionallabelingofproductsthatwillbeshippedtoChinaandwehavetakenstepstoensurewecomplywiththeserequirements.

United States and Canada. IntheU.S.,wearesubjectto,amongotherlaws,theApplianceEfficiencyRegulationsadoptedviatheU.S.EnergyIndependenceandSecurityActof2007.TheregulationssetoutstandardsfortheenergyconsumptionperformanceofproductsandsuchstandardsapplytoappliancessoldorofferedforsalethroughouttheU.S.Wehaveredesignedorchangedcertainofourproductstoensurecompliancewiththeseregulations.WearealsosubjecttoCalifornia'sProposition65,whichrequiresthatclearandreasonablewarningsbegiventoconsumerswhoareexposedtocertainchemicalsdeemedbythestateofCaliforniatobedangerous.

LogitechisalsosubjecttotherequirementassetoutbytheDodd-FrankWallStreetReformandConsumerProtectionActof2010,specificallySection1502,whichaddressestheuseof"ConflictMinerals"inthesupplychain.Wehaveestablishedsystemswhichfacilitateourcompliancewiththesourcing,traceabilityandreportingobligationsandthereportingrequirementsofthisActalignedwithguidelinespublishedbytheSecuritiesandExchangeCommission.AsamemberoftheResponsibleBusinessAllianceorRBA(formerlytheEICC),weparticipateintheindustry-wideConflict-FreeSourcingInitiativeanditsConflict-FreeSmelterProgrambywhichtheserequirementsaremet.

Inaddition,theTransparencyinSupplyChainActof2010(S.B.657)iseffectivefromLogitech'sfiscalyear2012.ThelawrequiresallretailersandmanufacturersoftangibleproductswhodobusinessinCaliforniaandhaveannualworldwidegrossreceiptsexceeding$100milliontodiscloseontheircompanywebsitestheireffortstocombatforcedlaborandhumantraffickingintheirownsupplychains.Similarly,LogitechcomplieswiththerequirementsoftheUnitedKingdomModernSlaveryActof2015requiringcertaincommercialorganizationstotransparentlyreporttheireffortstoidentifyanderadicateslaveryandhumantraffickingintheirsupplychain.FurtherinformationisprovidedinourannualSustainabilityReportandLogitech'sdisclosurepostedonourwebsite,www.logitech.com.

WearesubjecttolawsinvariousCanadianprovincesandU.S.statesthatimposefeestocoverthecostofendofliferesponsibledisposalandrecyclingofpackaging,product,andbatteries.Theselawsrequireproducersofelectricalgoods,packaging,andbatteriestobefinanciallyresponsibleforcostsofspecifiedcollection,recycling,treatmentanddisposalofcoveredproducts.Whereapplicable,wehaveprovidedfortheestimatedcosts,whicharenotmaterial,ofmanagingandrecyclinghistoricalandfuturewasteequipment,packaging,andbatteries.

Australia and New Zealand. InAustraliaandNewZealand,wearesubjecttotheMinimumEnergyPerformanceStandardsregulations(MEPS).Theseregulationssetoutstandardsfortheenergyconsumptionperformanceofproductswithinthescopeoftheregulations,whichincludessomeofourproducts.WehavetakenstepstomodifyproductstoensuretheyareincompliancewithMEPS.

Weexpectfurtherlawsgoverningproductandpackagingrecyclingtobeintroducedinotherjurisdictions,manyormostofwhichcouldimposefeestocoverrecyclingcosts,thecumulativeimpactofwhichcouldbesignificant.Ifsuchlegislationisenactedinothercountries,Logitechintendstodevelopcomplianceprogramsasnecessary.However,untilthattime,wearenotabletoestimateanypossibleimpact.

TheeffectsonLogitech'sbusinessofcomplyingwithothergovernmentregulationsarelimitedtothecostofagencyfeesandtesting,aswellasthetimerequiredtoobtainagencyapprovals.Therearealsostewardshipcostsassociatedwiththeendoflifecollection,recyclingandrecoveryofLogitechproducts,packagingandbatterieswhereLogitechisrecognizedasthestewardandparticipatesinrelevantprograms.ThecostsandschedulerequirementsareindustryrequirementsandthereforedonotrepresentanundueburdenrelativetoLogitech'scompetitiveposition.Asregulationschange,wewillmodifyourproductsorprocessestoaddressthosechanges.

Inadditiontomonitoringandmanagingcompliancewithenvironmentalregulations,wealsomonitorandalignwithinternationalgoodpracticestandardsforenvironmental,socialandsustainabilityperformance.WejoinedtheRBA(formerlyEICC)in2007tocollaboratewithindustrypeerstodriveinternationalgoodpracticeacrosstheelectronicssector.Since2007,wehavefullyadoptedtheRBACodeofConductandwepublishanannualSustainabilityReport,inalignmentwiththegoodpracticestandardsoftheGlobalReportingInitiative.Formoreinformationonourapproachtosustainabilitymanagement,RBACodeofConductcomplianceandinternationalgoodpractice,refertoourannualSustainabilityReport,whichisavailablefromthesustainabilitypageonwww.logitech.com.

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Seasonality

Ourproductsalesaretypicallyseasonal.Salesaregenerallyhighestduringourthirdfiscalquarter(OctobertoDecember)primarilyduetotheincreasedconsumerdemandforourproductsduringtheyear-endholidaybuyingseasonandyear-endspendingbyenterprises.Duetothetimingofournewproductintroductions,webelievethatyear-over-yearcomparisonsaremoreindicativeofvariabilityinourresultsofoperationsthanthecurrentquartertopriorquartercomparisons.

Materials

Wepurchasecertainproductsandkeycomponentsusedinourproductsfromalimitednumberofsources.Ifthesupplyoftheseproductsorkeycomponents,suchasmicro-controllersandopticalsensors,weretobedelayedorconstrained,orifoneormoreofoursingle-sourcesuppliersgooutofbusiness,wemightbeunabletofindanewsupplieronacceptableterms,oratall,andourshipmentstoourcustomerscouldbedelayed.Inaddition,leadtimesformaterials,components,andproductsorderedbyusorbyourcontractmanufacturerscanvarysignificantlyanddependonfactorssuchascontractterms,demandforacomponent,ourabilitytoforecastproductdemand,andsuppliercapacity.Fromtimetotime,wehaveexperiencedcomponentshortagesandextendedleadtimesonsemiconductors,suchasmicro-controllersandopticalsensors,andbasemetalsusedinourproducts.Shortagesorinterruptionsinthesupplyofcomponentsorsubcontractedproducts,orourinabilitytoprocurethesecomponentsorproductsfromalternatesourcesatacceptablepricesinatimelymanner,coulddelayshipmentofourproductsorincreaseourproductioncosts.

Employees

AsofMarch31,2019,weemployedapproximately6,600regularemployees,ofwhichapproximately3,400employeesareinourSuzhoumanufacturingfacilities,andfromtheremaining3,200regularemployees,approximately740arededicatedtoresearchanddevelopment.NoneofLogitech'sU.S.employeesarerepresentedbyalaborunionoraresubjecttoacollectivebargainingagreement.Certainothercountries,suchasChina,providebylawforemployeerights,whichincluderequirementssimilartocollectivebargainingagreements.Webelievethatouremployeerelationsaregood.

Executive Officers of the Registrant

ThefollowingsetsforthcertaininformationregardingourexecutiveofficersasofMarch31,2019*:

Name   Age   Nationality   PositionGuerrinoDeLuca   66   ItalianandU.S.   ExecutiveChairmanoftheBoardBrackenDarrell   56   U.S.   PresidentandChiefExecutiveOfficerVincentPilette*   47   Belgian   ChiefFinancialOfficerNateOlmstead*   47   U.S.   InterimChiefFinancialOfficer

* OnApril29,2019,Mr.Piletteannouncedhisresignation,effectivefollowingthefilingofthisAnnualReportonForm10-K,andLogitechappointedMr.OlmsteadasinterimChiefFinancialOfficer,tobeeffectiveasofJune1,2019.Inaddition,MarcelStolk,ExecutiveChairman,LogitechEuropeS.A.andLogitech'sSeniorVicePresident,BusinessModelInnovation,resignedasanexecutiveofficer,effectiveasofMarch31,2019.

GuerrinoDeLucahasservedasChairmanoftheLogitechBoardofDirectorssince2008.Mr.DeLucaservedasChiefExecutiveOfficerfromApril2012toJanuary2013andactingPresidentandLogitech'sChiefExecutiveOfficerfromJuly2011toApril2012.Previously,Mr.DeLucaservedasLogitech'sPresidentandChiefExecutiveOfficerfromFebruary1998,whenhejoinedtheCompany,toJanuary2008.HehasbeenanexecutivememberoftheBoardofDirectorssinceJune1998.PriortojoiningLogitech,Mr.DeLucaservedasExecutiveVicePresidentofWorldwideMarketingforAppleComputer,Inc.,aconsumerelectronicsandcomputercompany,fromFebruary1997toSeptember1997,andasPresidentofClarisCorporation,aU.S.personalcomputingsoftwarevendor,fromMay1994toFebruary1997.PriortojoiningClaris,Mr.DeLucaheldvariouspositionswithAppleintheUnitedStatesandinEurope.Mr.DeLucaservesontheboardofdirectorsofNielsenHoldingsplc.Mr.DeLucaholdsaLaureadegreeinElectronicEngineeringfromtheUniversityofRome,Italy.

BrackenDarrelljoinedLogitechasPresidentinApril2012andbecameChiefExecutiveOfficerinJanuary2013.PriortojoiningLogitech,Mr.DarrellservedasPresidentofWhirlpoolEMEAandExecutiveVicePresidentofWhirlpoolCorporation,ahomeappliancemanufacturerandmarketingcompany,fromJanuary2009toMarch2012.

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Previously,Mr.DarrellhadbeenSeniorVicePresident,OperationsofWhirlpoolEMEAfromMay2008toJanuary2009.From2002toMay2008,Mr.DarrellwaswiththeProcter&GambleCompany(P&G),aconsumerbrandcompany,mostrecentlyasthePresidentofitsBraunGmbHsubsidiary.PriortorejoiningP&Gin2002,Mr.DarrellservedinvariousexecutiveandmanagerialpositionswithGeneralElectricCompanyfrom1997to2002,withP&Gfrom1991to1997,andwithPepsiCoInc.from1987to1989.Mr.DarrellholdsaBAdegreefromHendrixCollegeandanMBAfromHarvardUniversity.

VincentPilettejoinedLogitechinSeptember2013asChiefFinancialOfficer.PriortojoiningLogitech,Mr.PiletteservedasChiefFinancialOfficerofElectronicsforImaging,Inc.,adigitalprintinginnovationandsolutionscompany,fromJanuary2011throughAugust2013.FromJanuary2009throughDecember2010,heservedasVicePresidentofFinancefortheEnterpriseServer,StorageandNetworkingGroupatHewlett-PackardCompany(HP).Priortothisrole,Mr.PiletteservedasVicePresidentofFinancefortheHPSoftwareGroupfromDecember2005throughDecember2008.Mr.PiletteheldvariousotherfinancepositionsatHP,intheU.SandEurope,MiddleEastandAfrica,sincejoiningHPin1997.Mr.PiletteholdsanMSinEngineeringandBusinessfromUniversitéCatholiquedeLouvaininBelgiumandanMBAfromKelloggSchoolofManagementatNorthwesternUniversity.

NateOlmsteadjoinedLogitechinApril2019asVicePresidentofBusinessFinanceandwasappointedinterimChiefFinancialOfficertobeeffectiveasofJune2019.PriortojoiningLogitech,Mr.OlmsteadservedinvariousfinancialmanagementrolesatHewlett-PackardCompanyandHewlett-PackardEnterprise,amultinationalinformationtechnologycompany,mostrecentlyastheVicePresidentofFinanceforGlobalOperationsatHewlett-PackardEnterprisefromJune2017toMarch2019.HealsoservedasVicePresidentofFinance,EGGlobalSupplyChainandQualityfromFebruary2015toJune2017,VicePresidentofFinance,HPStorageandHPConvergedSystemsfrom2009toFebruary2015,andDirector,HPInvestorRelationsfrom2006to2009.Mr.OlmsteadholdsaBAdegreefromStanfordUniversityandanMBAfromHarvardBusinessSchool.

Available Information

OurInvestorRelationswebsiteislocatedathttps://ir.logitech.com.Wepostandmaintainanarchiveofourearningsandotherpressreleases,currentreports,annualandquarterlyreports,earningsreleaseschedule,informationregardingannualgeneralmeetings,furtherinformationoncorporategovernance,andotherinformationregardingtheCompanyontheInvestorRelationswebsite.TheinformationwepostincludesfilingswemakewiththeSEC,includingreportsonForms10-K,10-Q,8-K,andourproxystatementrelatedtoourannualshareholders'meetingandanyamendmentstothosereportsorstatementsfiledorfurnishedpursuanttoU.S.securitieslawsorSwisslaws.Allsuchfilingsandinformationareavailablefreeofchargeonthewebsite,andwemakethemavailableonthewebsiteassoonasreasonablypossibleafterwefileorfurnishthemwiththeSEC.Thecontentsofthesewebsitesarenotintendedtobeincorporatedbyreferenceintothisreportorinanyotherreportordocumentwefileandourreferencestothesewebsitesareintendedtobeinactivetextualreferencesonly.

Inaddition,LogitechpublishespressreleasesupontheoccurrenceofsignificanteventswithinLogitech.Shareholdersandmembersofthepublicmayelecttoreceivee-mailswhenLogitechissuespressreleasesupontheoccurrenceofsignificanteventswithinLogitechorotherpressreleasesbysubscribingthroughhttp://ir.logitech.com/alerts.cfm.

AsaSwisscompanytradedontheSIXSwissExchange,andasacompanysubjecttotheprovisionsofSection16oftheSecuritiesExchangeActof1934,asamended,wefilereportsontransactionsinLogitechsecuritiesbymembersofLogitech'sBoardofDirectorsandexecutiveofficers.ThereportsthatwefilewiththeSecuritiesandExchangeCommissiononForms3,4and5,alongwithourotherSECfilings,maybeaccessedonourwebsiteorontheSecuritiesandExchangeCommission'swebsiteathttp://www.sec.gov,andthereportswefilethatarepublishedbytheSIXSwissExchangemaybeaccessedathttp://www.six-exchange-regulation.com/obligations/management_transactions_en.html.

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ITEM 1A. RISK FACTORS

Our operating results are difficult to predict and fluctuations in results may cause volatility in the price of our shares.

Ourrevenuesandprofitabilityaredifficulttopredictduetothenatureofthemarketsinwhichwecompete,fluctuatinguserdemand,theuncertaintyofcurrentandfutureglobaleconomicconditions,andformanyotherreasons,includingthefollowing:

• Ouroperatingresultsarehighlydependentonthevolumeandtimingofordersreceivedduringthequarter,whicharedifficulttoforecast.

Customersgenerallyorderonanas-neededbasisandwetypicallydonotobtainfirm,long-termpurchasecommitmentsfromourcustomers.Asaresult,ourrevenuesinanyquarterdependprimarilyonordersbookedandshippedinthatquarter.

• Asignificantportionofourquarterlyretailsalestypicallyoccursinthelastweeksofeachquarter,furtherincreasingthedifficultyin

predictingquarterlyrevenuesandprofitability.• Oursalesareimpactedbyconsumerdemandandcurrentandfutureglobaleconomicandpoliticalconditions,includingtraderestrictions

andtariffs,andcan,therefore,fluctuateabruptlyandsignificantlyduringperiodsofuncertaineconomicconditionsorgeographicdistress,aswellasfromshiftsindistributorinventorypracticesandconsumerbuyingpatterns.

• Wemustincuralargeportionofourcostsinadvanceofsalesordersbecausewemustplanresearchandproduction,ordercomponents,buytoolingequipment,andenterintodevelopment,salesandmarketing,andotheroperatingcommitmentspriortoobtainingfirmcommitmentsfromourcustomers.Thismakesitdifficultforustorapidlyadjustourcostsduringthequarterinresponsetoarevenueshortfall,whichcouldadverselyaffectouroperatingresults.

• Weengageinacquisitionsanddivestitures,andsuchactivityvariesfromperiodtoperiod.Suchvariancemayaffectourgrowth,ourpreviousoutlookandexpectations,andcomparisonsofouroperatingresultsandfinancialstatementsbetweenperiods.

• Wehaveattemptedtosimplifyourorganization,toreduceoperatingcoststhroughexpensereductionandglobalworkforcereductions,toreducethecomplexityofourproductportfolio,andtobetteraligncostswithourcurrentbusinessasweexpandfromPCaccessoriestogrowthopportunitiesinaccessoriesandotherproductsformusic,gaming,videocollaboration,digitalhome,mobiledevicesandotherproductcategories.Wemaynotachievethecostsavingsorotheranticipatedbenefitsfromtheseefforts,andthesuccessorfailureofsucheffortsmaycauseouroperatingresultstofluctuateandtobedifficulttopredict.

• Fluctuationsincurrencyexchangeratescanimpactourrevenues,expensesandprofitabilitybecausewereportourfinancialstatementsinU.S.Dollars,whereasasignificantportionofourrevenuesandexpensesareinothercurrencies.Weattempttoadjustproductpricesovertimetooffsettheimpactofcurrencymovements.However,overshortperiodsoftime,duringperiodsofweaknessinconsumerspendingorgivenhighlevelsofcompetitioninmanyproductcategories,ourabilitytochangelocalcurrencypricestooffsettheimpactofcurrencyfluctuationsislimited.

Becauseouroperatingresultsaredifficulttopredict,ourresultsmaybebelowtheexpectationsoffinancialanalystsandinvestors,whichcouldcausethepriceofoursharestodecline.

If we fail to innovate and develop new products in a timely and cost-effective manner for our new and existing product categories, ourbusiness and operating results could be adversely affected.

Ourproductcategoriesarecharacterizedbyshortproductlifecycles,intensecompetition,frequentnewproductintroductions,rapidlychangingtechnology,dynamicconsumerdemandandevolvingindustrystandards.Asaresult,wemustcontinuallyinnovateinournewandexistingproductcategories,introducenewproductsandtechnologies,andenhanceexistingproductsinordertoremaincompetitive.

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Thesuccessofourproductportfoliodependsonseveralfactors,includingourabilityto:

• Identifynewfeatures,functionalityandopportunities;

• Anticipatetechnology,markettrendsandconsumerpreferences;

• Developinnovative,high-quality,andreliablenewproductsandenhancementsinacost-effectiveandtimelymanner;

• Distinguishourproductsfromthoseofourcompetitors;and

• Offerourproductsatpricesandontermsthatareattractivetoourcustomersandconsumers.

Ifwedonotexecuteonthesefactorssuccessfully,productsthatweintroduceortechnologiesorstandardsthatweadoptmaynotgainwidespreadcommercialacceptance,andourbusinessandoperatingresultscouldsuffer.Inaddition,ifwedonotcontinuetodifferentiateourproductsthroughdistinctive,technologicallyadvancedfeatures,designs,andservicesthatareappealingtoourcustomersandconsumers,aswellascontinuetobuildandstrengthenourbrandrecognitionandouraccesstodistributionchannels,ourbusinesscouldbeadverselyaffected.

Thedevelopmentofnewproductsandservicescanbeverydifficultandrequireshighlevelsofinnovation.Thedevelopmentprocessalsocan

belengthyandcostly.Therearesignificantinitialexpendituresforresearchanddevelopment,tooling,manufacturingprocesses,inventoryandmarketing,andwemaynotbeabletorecoverthoseinvestments.Ifwefailtoaccuratelyanticipatetechnologicaltrendsorourusers’needsorpreferences,areunabletocompletethedevelopmentofproductsandservicesinacost-effectiveandtimelyfashionorareunabletoappropriatelyincreaseproductiontofulfillcustomerdemand,wewillbeunabletosuccessfullyintroducenewproductsandservicesintothemarketorcompetewithotherproviders.Evenifwecompletethedevelopmentofournewproductsandservicesinacost-effectiveandtimelymanner,theymaynotbecompetitivewithproductsdevelopedbyothers,theymaynotachieveacceptanceinthemarketatanticipatedlevelsoratall,theymaynotbeprofitableor,eveniftheyareprofitable,theymaynotachievemarginsashighasourexpectationsorashighasthemarginswehaveachievedhistorically.

Asweintroduceneworenhancedproducts,integratenewtechnologyintoneworexistingproducts,orreducetheoverallnumberofproducts

offered,wefacerisksincluding,amongotherthings,disruptionincustomers’orderingpatterns,excessivelevelsofnewandexistingproductinventories,revenuedeteriorationinourexistingproductlines,insufficientsuppliesofnewproductstomeetcustomers’demand,possibleproductandtechnologydefects,andapotentiallydifferentsalesandsupportenvironment.Prematureannouncementsorleaksofnewproducts,featuresortechnologiesmayexacerbatesomeoftheserisksbyreducingtheeffectivenessofourproductlaunches,reducingsalesvolumesofcurrentproductsduetoanticipatedfutureproducts,makingitmoredifficulttocompete,shorteningtheperiodofdifferentiationbasedonourproductinnovation,strainingrelationshipswithourpartnersorincreasingmarketexpectationsfortheresultsofournewproductsbeforewehavehadanopportunitytodemonstratethemarketviabilityoftheproducts.Ourfailuretomanagethetransitiontonewproductsortheintegrationofnewtechnologyintoneworexistingproductscouldadverselyaffectourbusiness,resultsofoperations,operatingcashflowsandfinancialcondition.Our future growth will depend on our diversified product growth opportunities, and if we do not successfully execute on our growthopportunities, or if our growth opportunities are more limited than we expect, our operating results could be adversely affected.

WehavehistoricallytargetedperipheralsforthePCplatform.ConsumerdemandforPCs,especiallyinourtraditional,maturemarketssuchasNorthAmerica,WesternandNordicEurope,JapanandAustralia,hasbeendecliningorflatforseveralyears,anditmaycontinuetodeclineinthefuture.ThishasputpressureonconsumerdemandforPCperipheralsinmanyofourmarketsandmaycausesalesgrowthofourPCperipheralstoslowand,insomecases,decline.Weexpectthistrendmaycontinue.

OursalesofPCperipheralsmightbelessthanweexpectduetoadeclineinbusinessoreconomicconditionsinoneormoreofthecountriesor

regions,agreaterdeclinethanweexpectindemandforourproducts,ourinabilitytosuccessfullyexecuteoursalesandmarketingplans,orforotherreasons.Globaleconomicconcerns,suchasthevaryingpaceofglobaleconomicrecovery,politicaluncertaintiescreatedbypolicychangessuchasBrexit,tariffsandpoliciesthatinhibittrade,theimpactofsovereigndebtissuesinEurope,theimpactofoilpricesonRussiaand

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othercountries,conflictswitheitherlocalorglobalfinancialimplicationsandeconomicslowdowninChina,createunpredictabilityandaddrisktoourfutureoutlook.

Asaresult,weareattemptingtodiversifyourproductcategoryportfolioandfocusingmoreofourattention,whichmayincludepersonnel,

financialresourcesandmanagementattention,onproductinnovationsandgrowthopportunities,includingproductsforgaming,productsforvideocollaboration,productsfortheconsumptionofdigitalmusic,productsforthedigitalhome,andonotherpotentialgrowthopportunitiesinadditiontoourPCperipheralsproductcategories.Ourinvestmentsmaynotresultinthegrowthweexpect,orwhenweexpectit,foravarietyofreasonsincludingthosedescribedbelow.

Creativity & Productivity .DespiteslowingordeclinesinsalesofPCs,ourpointingdevices,keyboards,webcamsandotherPCperipheralshavecontinuedtoseesomegrowthasaresultofconsumersrefreshingtheirexistingPCs,productinnovationandnewconsumertrends,suchassocialcontentcreation.Ifthesetrendsandothergrowthdriversdonotcontinue,orresultinerraticperiodsofgrowth,ourresultsofoperationscouldbemoresusceptibletothetrendsinPCsandourbusinessandourresultscouldbeadverselyaffected.

Gaming .Wearebuildingadiversebusinessthatfeaturesavarietyofgamingperipherals.Therapidlyevolvingandchangingmarketandincreasingcompetitionincreasetheriskthatwedonotallocateourresourcesinlinewiththemarketandourbusinessandourresultsofoperationscouldbeadverselyaffected.

Video Collaboration. Whileweviewthesmallandmedium-sizedusergroupsopportunitytobelargeandrelativelyunaddressed,thisisanewandevolvingmarketsegmentthatweandourcompetitorsaredeveloping.Ifthemarketopportunityprovestobesustainable,weexpectincreasedcompetitionfromestablishedcompetitorsinthevideoconferencingmarketaswellasfromnewentrantswhoaregainingtractionastheindustrycomestoacceptnewtechnologyandnewsolutions.Inordertocontinuetogrowinthisopportunity,wemayneedtofurtherbuildandscaleourownenterprisesalesforce,acapabilitythatseveralofourcompetitorsinthiscategoryalreadyhave.

Music. Wearefocusedonproductsfortheconsumptionofdigitalmusicasasalesgrowtharea.Competitioninthemobilespeakerandheadphonecategoriesisintense,andweexpectittoincrease.Moreover,themarketformobilespeakersappearstobematuringwithslowergrowthorevendeclining.Ifwearenotabletogrowourexistingandacquiredproductlinesandintroducedifferentiatedproductsandmarketingstrategiestoseparateourproductsandbrandsfromcompetitors'productsandbrands,ourmobilespeakerandaudioheadphoneeffortswillnotbesuccessful,andourbusinessandresultsofoperationscouldbeadverselyaffected.

Smart Home .Whilewearealeaderinprogrammable,performanceremotecontrolsforhomeentertainment,thesmarthomemarketisstillinits

earlystagesanditisnotyetclearwhenthecategorywillproducedynamicgrowthorwhichproductswillsucceedandbeabletotakeadvantageofmarketgrowthortohelpdefineandgrowthemarket.Despiteitsearlystages,thesmarthomemarketalreadyisexperiencingincreasingcompetitionfromstrongcompetitors.

Inadditiontoourcurrentgrowthopportunities,ourfuturegrowthmaybereliantonourabilitytoidentifyanddeveloppotentialnewgrowthopportunities.Thisprocessisinherentlyriskyandwillresultininvestmentsintimeandresourcesforwhichwedonotachieveanyreturnorvalue.

Eachofthesegrowthcategoriesandmanyofthegrowthopportunitiesthatwemaypursuearesubjecttoconstantandrapidlychangingandevolvingtechnologiesandevolvingindustrystandardsandmaybereplacedbynewtechnologyconceptsorplatforms.Someofthesegrowthcategoriesandopportunitiesarealsocharacterizedbyshortproductcycles,frequentnewproductintroductionsandenhancementsandrapidlychangingandevolvingconsumerpreferenceswithrespecttodesignandfeaturesthatrequirecalculatedrisk-takingandfastresponsivenessandresultinshortopportunitiestoestablishamarketpresence.Inaddition,someofthesegrowthcategoriesandopportunitiesarecharacterizedbypricecompetition,erosionofpremium-pricedsegmentsandaveragesellingprices,commoditization,andsensitivitytogeneraleconomicconditionsandcyclicaldownturns.Thegrowthopportunitiesandstrengthandnumberofcompetitorsthatwefaceinallofourproductcategoriesmeansthatweareatriskofnewcompetitorscomingtomarketwithmoreinnovativeproductsthataremoreattractivetocustomersthanoursorpricedmorecompetitively.Ifwedonotdevelopinnovativeandreliableperipheralsandenhancementsinacost-effectiveandtimelymannerthatareattractivetoconsumersinthesemarkets,ifweareotherwiseunsuccessfulenteringandcompetinginthesegrowthcategoriesorrespondingtoourmanycompetitorsandtotherapidlychangingconditionsinthesegrowthcategories,ifthegrowthcategoriesinwhichweinvestour

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limitedresourcesdonotemergeastheopportunitiesordonotproducethegrowthorprofitabilityweexpect,orwhenweexpectit,orifwedonotcorrectlyanticipatechangesandevolutionsintechnologyandplatforms,ourbusinessandresultsofoperationscouldbeadverselyaffected.

If we are not able to maintain and enhance our brands, or if our brands or reputation are damaged, our reputation, business and operatingresults could be adversely affected.

Wehavedevelopedlong-termvalueinourbrandsandhaveinvestedsignificantlyindesignandinourexistingandnewbrandsoverthepastseveralyears.Webelievethatourdesignandbrandshavesignificantlycontributedtothesuccessofourbusinessandthatmaintainingandenhancingourbrandsisveryimportanttoourfuturegrowthandsuccess.Maintainingandenhancingourbrandswillrequiresignificantinvestmentsandwilldependlargelyonourfuturedesign,productsandmarketing,whichmaynotbesuccessfulandmaydamageourbrands.Ourbrandsandreputationarealsodependentonthirdparties,suchassuppliers,manufacturers,distributors,retailers,productreviewersandthemediaaswellasonlineconsumerproductreviews,consumerrecommendationsandreferrals.Itcantakesignificanttime,resourcesandexpensetoovercomenegativepublicity,reviewsorperception.Anynegativeeffectonourbrands,regardlessofwhetheritisinourcontrol,couldadverselyaffectourreputation,businessandresultsofoperations.

If we do not compete effectively, demand for our products could decline and our business and operating results could be adverselyaffected.

Theperipheralsindustryisintenselycompetitive.Mostofourproductcategoriesarecharacterizedbylarge,well-financedcompetitorswithstrongbrandnamesandhighlyeffectiveresearchanddevelopment,marketingandsalescapabilities,shortproductlifecycles,continualperformanceenhancements,andrapidadoptionoftechnologicalandproductadvancementsbycompetitorsinourretailmarkets.Manyofourcompetitorshavebroadproductportfoliosacrossseveralofourproductcategoriesandareabletousethestrengthoftheirbrandstomoveintoadjacentcategories.Ourcompetitorshavetheabilitytobringnewproductstomarketquicklyandatcompetitiveprices.Weexperienceaggressivepricecompetitionandotherpromotionalactivitiesfromourprimarycompetitorsandfromless-establishedbrands,includingbrandsownedbyretailcustomersknownashousebrands.Inaddition,ourcompetitorsmayoffercustomerstermsandconditionsthatmaybemorefavorablethanourtermsandconditionsandmayrequireustotakeactionstoincreaseourcustomerincentiveprograms,whichcouldimpactourrevenuesandoperatingmargins.

Inrecentyears,wehaveexpandedthecategoriesofproductswesellandenterednewmarkets.Weremainalerttoopportunitiesinnew

categoriesandmarkets.Aswedoso,weareconfrontingnewcompetitors,manyofwhichhavemoreexperienceinthecategoriesormarketsandhavegreatermarketingresourcesandbrandnamerecognitionthanwehave.Inaddition,becauseofthecontinuingconvergenceofthemarketsforcomputingdevicesandconsumerelectronics,weexpectgreatercompetitioninthefuturefromwell-establishedconsumerelectronicscompaniesinourdevelopingcategoriesaswellasinfuturecategorieswemightenter.Manyofthesecompanies,suchasMicrosoft,Apple,Google,Cisco,SonyCorporation,Samsungandothers,havegreaterfinancial,technical,sales,marketingandotherresourcesthanwehave.

Microsoft,Apple,GoogleandAmazonareleadingproducersofoperatingsystems,hardware,platformsandapplicationswithwhichourmice,

keyboards,wirelessspeakersandotherproductsaredesignedtooperate.Inaddition,Microsoft,Apple,GoogleandAmazoneachhassignificantlygreaterfinancial,technical,sales,marketingandotherresourcesthanLogitech,aswellasgreaternamerecognitionandalargercustomerbase.Asaresult,Microsoft,Apple,GoogleandAmazoneachmaybeabletoimprovethefunctionalityofitsproducts,ifany,ormaychoosetoshowpreferencetoourcompetitors'products,tocorrespondwithongoingenhancementstoitsoperatingsystems,hardwareandsoftwareapplicationsbeforeweareabletomakesuchimprovements.ThisabilitycouldprovideMicrosoft,Apple,Google,Amazonorothercompetitorswithsignificantlead-timeadvantages.Inaddition,Microsoft,Apple,Google,Amazonorothercompetitorsmaybeabletocontroldistributionchannelsorofferpricingadvantagesonbundledhardwareandsoftwareproductsthatwemaynotbeabletooffer,andmaybefinanciallypositionedtoexertsignificantdownwardpressureonproductpricesandupwardpressureonpromotionalincentivesinordertogainmarketshare.

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Creativity & Productivity

Pointing Devices. Apple,MicrosoftandHPareourmaincompetitorsworldwide.Wealsoexperiencecompetitionandpricingpressurefromless-establishedbrands,includinghousebrandsandlocalcompetitorsinAsianmarketssuchasElecom,Buffalo,RapooandXiaomi.

Keyboards & Combo .MicrosoftandAppleareourmaincompetitorsinourPCkeyboardandcomboproductlines.Wealsoexperiencecompetitionandpricingpressureforkeyboardandcombosfromless-establishedbrands,includinghousebrandsandlocalcompetitorsinAsianmarkets.

Tablet & Other Accessories .CompetitorsinthetabletkeyboardmarketareApple,Zagg,Kensington,Belkin,Targusandotherless-establishedbrands.Althoughweareoneoftheleadersinthetabletkeyboardmarketandcontinuetobringinnovativeofferingstothemarket,weexpectthecompetitionmayincrease.CompetitorsinthetabletcasemarketincludeApple,Otter,Speckandalargenumberofsmallbrands.

PC Webcams. OurprimarycompetitorsforPCwebcamsareMicrosoftandothermanufacturerstakingsmallermarketsharesuchasRazer.

Gaming

CompetitorsforourGamingproductsincludeRazer,Corsair,Component,SteelSeries,TurtleBeachandKingston,amongothers.

Video Collaboration

OurcompetitorsforVideoCollaborationproductsarenumerousacrossvariouscategorieswithmanynewentrants.CompetitorsincludeCiscoSystems,Polycom,Inc.(acquiredbyPlantronics),GNNetcom/Jabra(whichrecentlyacquiredAltiaSystems),AVerInformation,amongothers.

Music

Mobile Speakers. OurcompetitorsforBluetoothwirelessspeakersincludeBose,Harman(ownedbySamsung)andBeats(ownedbyApple)amongothers.Harmanisourlargestcompetitor.Apple'sownershipofBeatsmayimpactouraccesstoshelfspaceinAppleretailstoresandadverselyimpactourabilitytosucceedinthisimportantgrowthmarket.Personalvoiceassistantsandotherdevicesthatoffermusic,suchasSonos,Amazon'sEcho,GoogleHomeandAppleHomePodalsocompetewithourproducts.Amazonisalsoasignificantcustomerofourproducts.

Audio & Wearables .ForPCspeakers,ourcompetitorsincludeBose,CyberAcoustics,PhillipsandCreativeLabs,AppleandSamsung.ForPCheadset,wefacenumerouscompetitors,includingPlantronicsandGNNetcomamongothers.In-earheadphonescompetitorsincludeBeats,Bose,AppleSony,JBLandSennheiser,amongothers.OurcompetitorsforBlueMicrophonesproductsincludeRode,Audio-Technica,Samson,Shure,RazerandApogee,amongothers.

Smart Home

Directcompetitorsintheremotecontrolmarketincludepro-installer-focusedUniversalRemoteControlandnew“DIY”entrants.Indirectcompetitionexistsintheformoflow-end“replacementremotes”suchasSony,RCA,GE,pureapp-basedsolutionssuchasPeel,aswellasdeviceand/orsubscriber-specificsolutionsfromTVmakerssuchasSamsungandVizioandmultisystemoperators,orMSOs,suchasComcastandDirecTV.

CompetitioninthehomecontrolmarketalsoexistsinformofhomeautomationplatformssuchasSmartThings(ownedbySamsung),AmazonwiththeirEchoproduct,GoogleHomeandNest(ownedbyAlphabet),Winkandmanyotherstartups.ManyofthesecompaniesalsointegratetheirproductswithLogitech'ssmarthomeandHarmonyremoteproducts.

Our business depends in part on access to third-party platforms or technologies, and if the access is withdrawn, denied, or is notavailable on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating resultscould be adversely affected.

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OurperipheralsbusinesshashistoricallybeenbuiltlargelyaroundthePCplatform,whichovertimebecamerelativelyopen,anditsinputsand

operatingsystemstandardized.Withthegrowthofmobile,tablet,gamingandothercomputerdevices,digitalmusicandpersonalvoiceassistants,thenumberofplatformshasgrown,andwithitthecomplexityandincreasedneedforustohavebusinessandcontractualrelationshipswiththeplatformownersinordertoproduceproductscompatiblewiththeseplatforms.Ourproductportfolioincludescurrentandfutureproductsdesignedforusewiththird-partyplatformsorsoftware,suchastheAppleiPad,iPod,iPhoneandSiri,Androidphonesandtablets,GoogleAssistantandAmazonAlexa. Ourbusinessinthesecategoriesreliesonouraccesstotheplatformsofthirdparties,someofwhomareourcompetitors.Platformownersthatarecompetitorshaveacompetitiveadvantageindesigningproductsfortheirplatformsandmayproduceperipheralsorotherproductsthatworkbetter,orareperceivedtoworkbetter,thanourproductsinconnectionwiththoseplatforms.Asweexpandthenumberofplatformsandsoftwareapplicationswithwhichourproductsarecompatible,wemaynotbesuccessfulinlaunchingproductsforthoseplatformsorsoftwareapplications,wemaynotbesuccessfulinestablishingstrongrelationshipswiththenewplatformorsoftwareowners,orwemaynegativelyimpactourabilitytodevelopandproducehigh-qualityproductsonatimelybasisforthoseplatformsandsoftwareapplicationsorwemayotherwiseadverselyaffectourrelationshipswithexistingplatformorsoftwareowners.

Ouraccesstothird-partyplatformsmayrequirepayingaroyalty,whichlowersourproductmarginsormayotherwisebeontermsthatarenot

acceptabletous.Inaddition,thethird-partyplatformsortechnologiesusedtointeractwithourproductportfoliocanbedelayedinproductionorcanchangewithoutpriornoticetous,whichcanresultinourhavingexcessinventoryorlowermargins.

Ifweareunabletoaccessthird-partyplatformsortechnologies,orifouraccessiswithdrawn,denied,orisnotavailableontermsacceptableto

us,oriftheplatformsortechnologiesaredelayedorchangewithoutnoticetous,ourbusinessandoperatingresultscouldbeadverselyaffected.

If we do not accurately forecast market demand for our products, our business and operating results could be adversely affected.

Weuseourforecastsofproductdemandtomakedecisionsregardinginvestmentsofourresourcesandproductionlevelsofourproducts.Althoughwereceiveforecastsfromourcustomers,manyarenotobligatedtopurchasetheforecasteddemand.Also,actualsalesvolumesforindividualproductsinourretaildistributionchannelcanbevolatileduetochangesinconsumerpreferencesandotherreasons.Inaddition,ourproductshaveshortproductlifecycles,soafailuretoaccuratelypredicthighdemandforaproductcanresultinlostsalesthatwemaynotrecoverinsubsequentperiods,orhigherproductcostsifwemeetdemandbypayinghighercostsformaterials,productionanddelivery.Wecouldalsofrustrateourcustomersandloseshelfspace.Ourfailuretopredictlowdemandforaproductcanresultinexcessinventory,lowercashflowsandlowermarginsifwearerequiredtoreduceproductpricesinordertoreduceinventories.

Ifoursaleschannelpartnershaveexcessinventoryofourproductsordecidetodecreasetheirinventoriesforanyreason,theymaydecreasetheamountofproductstheyacquireinsubsequentperiods,causingdisruptioninourbusinessandadverselyaffectingourforecastsandsales.

Overthepastfewyears,wehaveexpandedthetypesofproductswesellandthegeographicmarketsinwhichwesellthem.Thechangesinourproductportfolioandtheexpansionofoursalesmarketshaveincreasedthedifficultyofaccuratelyforecastingproductdemand.

Inaddition,startinginfiscalyear2016,weincreasedthenumberofourproductsthatwemanufactureinourownfacilities.Thisincreasestheinventorythatwepurchaseandmaintaintosupportsuchmanufacturing.Wearealsoutilizingseashipmentsmoreextensivelythanairdelivery,whichwillcauseustobuildandshipproductstoourdistributioncentersearlierandwillalsoresultinincreasesininventory.Theseoperationalshiftsincreasetheriskthatwehaveexcessorobsoleteinventoryifwedonotaccuratelyforecastproductdemand.

Wehaveexperiencedlargedifferencesbetweenourforecastsandactualdemandforourproducts.Weexpectotherdifferencesbetweenforecastsandactualdemandtoariseinthefuture.Ifwedonotaccuratelypredictproductdemand,ourbusinessandoperatingresultscouldbeadverselyaffected.

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Our success largely depends on our ability to hire, retain, integrate and motivate sufficient numbers of qualified personnel, includingsenior management. Our strategy and our ability to innovate, design and produce new products, sell products, maintain operatingmargins and control expenses depend on key personnel that may be difficult to replace.

Oursuccessdependsonourabilitytoattractandretainhighlyskilledpersonnel,includingseniormanagementandinternationalpersonnel.Fromtimetotime,weexperienceturnoverinsomeofourseniormanagementpositions.

Wecompensateouremployeesthroughacombinationofsalary,bonuses,benefitsandequitycompensation.Recruitingandretainingskilled

personnel,includingsoftwareandhardwareengineers,ishighlycompetitive.Ifwefailtoprovidecompetitivecompensationtoouremployees,itwillbedifficulttoretain,hireandintegratequalifiedemployeesandcontractors,andwemaynotbeabletomaintainandexpandourbusiness.Ifwedonotretainourseniormanagersorotherkeyemployeesforanyreason,werisklosinginstitutionalknowledge,experience,expertiseandotherbenefitsofcontinuityaswellastheabilitytoattractandretainotherkeyemployees.Inaddition,wemustcarefullybalancethesizeofouremployeebasewithourcurrentinfrastructure,managementresourcesandanticipatedoperatingcashflows.Ifweareunabletomanagethesizeofouremployeebase,particularlyengineers,wemayfailtodevelopandintroducenewproductssuccessfullyandinacost-effectiveandtimelymanner.Ifourrevenuegrowthoremployeelevelsvarysignificantly,ouroperatingcashflowsandfinancialconditioncouldbeadverselyaffected.Volatilityorlackofpositiveperformanceinourstockprice,includingdeclinesinourstockpricesinthepastyear,mayalsoaffectourabilitytoretainkeyemployees,manyofwhomhavebeengrantedequityincentives.Logitech’spracticehasbeentoprovideequityincentivestoitsemployees,butthenumberofsharesavailableforequitygrantsislimited.Wemayfinditdifficulttoprovidecompetitiveequityincentives,andourabilitytohire,retainandmotivatekeypersonnelmaysuffer.

Recentlyandinpastyears,wehaveinitiatedreductionsinourworkforcetoalignouremployeebasewithourbusinessstrategy,ouranticipated

revenuebaseorwithourareasoffocus.Wehavealsoexperiencedturnoverinourworkforce.Thesereductionsandturnoverhaveresultedinreallocationsofduties,whichcouldresultinemployeeuncertaintyanddiscontent.Reductionsinourworkforcecouldmakeitdifficulttoattract,motivateandretainemployees,whichcouldadverselyaffectourbusiness.

Our gross margins can vary significantly depending on multiple factors, which can result in unanticipated fluctuations in our operatingresults.

Ourgrossmarginscanvaryduetoconsumerdemand,competition,productpricing,productlifecycle,productmix,newproductintroductions,unitvolumes,acquisitionsanddivestitures,commodity,supplychainandlogisticscosts,capacityutilization,geographicsalesmix,currencyexchangerates,tradepolicyandtariffs,thecomplexityandfunctionalityofnewproductinnovationsandotherfactors.Inparticular,ifwearenotabletointroducenewproductsinatimelymannerattheproductcostweexpect,orifconsumerdemandforourproductsislessthanweanticipate,orifthereareproductpricing,marketingandotherinitiativesbyourcompetitorstowhichweneedtoreactorthatareinitiatedbyustodrivesalesthatlowerourmargins,thenouroverallgrossmarginwillbelessthanweproject.

Inaddition,ourgrossmarginsmayvarysignificantlybyproductline,salesgeographyandcustomertype,aswellaswithinproductlines.When

themixofproductssoldshiftsfromhighermarginproductlinestolowermarginproductlines,tolowermarginsalesgeographies,ortolowermarginproductswithinproductlines,ouroverallgrossmarginsandourprofitabilitymaybeadverselyaffected.

Asweexpandwithinandintonewproductcategories,ourproductsinthosecategoriesmayhavelowergrossmarginsthaninourtraditional

productcategories.Consumerdemandintheseproductcategories,basedonstyle,colorandotherfactors,tendstobelesspredictableandtendstovarymoreacrossgeographicmarkets.Asaresult,wemayfacehigherup-frontinvestments,inventorycostsassociatedwithattemptingtoanticipateconsumerpreferences,andincreasedinventorywrite-offs.Ifweareunabletooffsetthesepotentiallylowermarginsbyenhancingthemarginsinourmoretraditionalproductcategories,ourprofitabilitymaybeadverselyaffected.

Theimpactofthesefactorsongrossmarginscancreateunanticipatedfluctuationsinouroperatingresults,whichmaycausevolatilityinthe

priceofourshares.

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As we continue our efforts to lower our costs and improve our operating leverage, we may or may not fully realize our goals.

Ourstrategyoverthepastseveralyearshasbeenbasedinpartonsimplifyingtheorganization,reducingoperatingcoststhroughglobalworkforcereductionsandareductioninthecomplexityofourproductportfolio,withthegoalofbetteraligningcostswithourcurrentbusiness.Werestructuredourbusinessinfiscalyears2014through2016,andwemaycontinuetodivestordiscontinuenon-strategicproductcategories.Duringthethirdquarteroffiscalyear2016,wedivestedourLifesizevideoconferencingbusinessandcompletedourexitfromtheOEMbusiness.Duringthefirstquarteroffiscalyear2019,weimplementedarestructuringplantostreamlineandrealignouroverallorganizationalstructureandreallocateresourcestosupportlong-termgrowthopportunities.Weexpecttohavesubstantiallycompletedthisrestructuringwithinthenextthreemonths.

Ourabilitytoachievethedesiredandanticipatedcostsavingsandotherbenefitsfromthesesimplification,cost-cuttingandrestructuringactivities,andwithinourdesiredandexpectedtimeframes,aresubjecttomanyestimatesandassumptions,andtheactualsavingsandtimingforthosesavingsmayvarymateriallybasedonfactorssuchaslocallaborregulations,negotiationswiththirdparties,andoperationalrequirements.Theseestimatesandassumptionsarealsosubjecttosignificanteconomic,competitiveandotheruncertainties,someofwhicharebeyondourcontrol.Therecanbenoassurancethatwewillfullyrealizethedesiredandanticipatedbenefitsfromtheseactivities.Totheextentthatweareunabletoimproveourfinancialperformance,furtherrestructuringmeasuresmayberequiredinthefuture.Furthermore,weareexpectingtobeabletousetheanticipatedcostsavingsfromtheseactivitiestofundandsupportourcurrentgrowthopportunitiesandincrementalinvestmentsforfuturegrowth.Ifthecost-savingsdonotmaterializeasanticipated,orwithinourexpectedtimeframes,ourabilitytoinvestingrowthmaybelimitedandourbusinessandoperatingresultsmaybeadverselyaffected.Aswegrow,explorenewopportunitiesandmarkets,hirenewmanagementandotherpersonnel,andfundresearchanddevelopment,marketing,branddevelopment,sales,operations,investmentsinintellectualpropertyandacquisitionstosupportthisgrowthandournewopportunities,someorallofwhichmaynotsucceed,weexpecttoexperiencecontinuedpressureonourcoststructureandexpenses.

Aspartoftherestructuringplans,wereducedthesizeofourproductportfolioandtheassortmentofsimilarproductsatsimilarpricepoints

withineachproductcategoryoverthepastseveralfiscalyears.Whileweareconstantlyreplacingproductsandaredependentonthesuccessofournewproducts,thisproductportfoliosimplificationhasmadeusevenmoredependentonthesuccessofthenewproductsthatweareintroducing.

As we focus on growth opportunities, we are divesting or discontinuing non-strategic product categories and pursuing strategicacquisitions and investments, which could have an adverse impact on our business.

Wecontinuetoreviewourproductportfolioandupdateournon-strategicproductcategoriesandproducts.Duringthethirdquarteroffiscalyear2016,wedivestedourLifesizevideoconferencingbusinessandcompletedourexitfromtheOEMbusiness.Ifweareunabletoeffectsalesonfavorabletermsorifrealignmentismorecostlyordistractingthanweexpectorhasanegativeeffectonourorganization,employeesandretention,thenourbusinessandoperatingresultsmaybeadverselyaffected.Discontinuingproductswithservicecomponentsmayalsocauseustocontinuetoincurexpensestomaintainserviceswithintheproductlifecycleortoadverselyaffectourcustomerandconsumerrelationshipsandbrand.Divestituresmayalsoinvolvewarranties,indemnificationorcovenantsthatcouldrestrictourbusinessorresultinlitigation,additionalexpensesorliabilities.Inaddition,discontinuingproductcategories,evencategoriesthatweconsidernon-strategic,reducesthesizeanddiversificationofourbusinessandcausesustobemoredependentonasmallernumberofproductcategories.

Asweattempttogrowourbusinessinstrategicproductcategoriesandemergingmarketgeographies,wewillconsidergrowththrough

acquisitionorinvestment.Wewillevaluateacquisitionopportunitiesthatcouldprovideuswithadditionalproductorserviceofferingsorwithadditionalindustryexpertise,assetsandcapabilities.Forexample,weacquiredASTROGamingtoexpandintotheconsolegamingmarket,weacquiredJaybirdtoexpandintothewirelessaudiowearablesmarket,weacquiredSaitektoexpandintothegamingsimulationandcontrollermarkets,andweacquiredBlueMicrophonestoexpandintothemicrophonesmarket.Acquisitionscouldresultindifficultiesintegratingacquiredoperations,products,technology,internalcontrols,personnelandmanagementteamsandresultinthediversionofcapitalandmanagement’sattentionawayfromotherbusinessissuesandopportunities.Ifwefailtosuccessfullyintegrateacquisitions,ourbusinesscouldbeharmed.Acquisitionscouldalsoresultintheassumptionofknownandunknownliabilities,product,regulatoryandothercomplianceissues,dilutiveissuancesofourequitysecurities,theincurrenceofdebt,disputesoverearn-outsorotherlitigation,andadverseeffectsonrelationshipswithourandourtarget’semployees,customersandsuppliers.Moreover,ouracquisitions

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maynotbesuccessfulinachievingourdesiredstrategy,product,financialorotherobjectivesorexpectations,whichwouldalsocauseourbusinesstosuffer.Acquisitionscanalsoleadtolargenon-cashchargesthatcanhaveanadverseeffectonourresultsofoperationsasaresultofwrite-offsforitemssuchasfutureimpairmentsofintangibleassetsandgoodwillortherecordingofshare-basedcompensation.Severalofourpastacquisitionshavenotbeensuccessfulandhaveledtoimpairmentcharges,includinga$122.7millionnon-cashgoodwillimpairmentchargeinfiscalyear2015relatedtoourLifesizevideoconferencingbusinesswhichisreportedindiscontinuedoperations.Acquisitionsanddivestituresmayalsocauseouroperatingresultstofluctuateandmakeitdifficultforinvestorstocompareoperatingresultsandfinancialstatementsbetweenperiods.Inaddition,fromtimetotimewemakestrategicventureinvestmentsinothercompaniesthatprovideproductsandservicesthatarecomplementarytoours.Iftheseinvestmentsareunsuccessful,thiscouldhaveanadverseimpactonourresultsofoperations,operatingcashflowsandfinancialcondition.

We rely on third parties to sell and distribute our products, and we rely on their information to manage our business. Disruption of ourrelationship with these channel partners, changes in or issues with their business practices, their failure to provide timely and accurateinformation, changes in distribution partners, practices or models, conflicts among our channels of distribution, or failure to build andscale our own sales force for certain product categories and enterprise channel partners could adversely affect our business, results ofoperations, operating cash flows and financial condition.

Weprimarilysellourproductstoanetworkofdistributors,retailersande-tailers(togetherwithourdirectsaleschannelpartners).Wearedependentonthosedirectsaleschannelpartnerstodistributeandsellourproductstoindirectsaleschannelpartnersandultimatelytoconsumers.Thesalesandbusinesspracticesofallsuchsaleschannelpartners,theircompliancewithlawsandregulations,andtheirreputations-ofwhichwemayormaynotbeaware-mayaffectourbusinessandourreputation.

Whileouroveralldistributionrelationshipsarediffuse,overaquarterofourgrosssalesareconcentratedwithtwocustomers-AmazonInc.andIngramMicro-andtheiraffiliatedentities.Ifonlinesalesgrowasapercentageofoverallsales,weexpectthatwewillbecomeevenmorereliantonAmazon.WhilewebelievethatwehavegoodrelationshipswithAmazonandIngramMicro,anyadversechangeineitherofthoserelationshipscouldhaveanadverseonourresultsofoperationsandfinancialcondition.

Theimpactofeconomicconditions,evolvingconsumerpreferences,andpurchasingpatternsonourdistributionpartners,orcompetitionbetweenoursaleschannels,couldresultinsaleschanneldisruption.Forexample,ifsalesatlargeretailstoresaredisplacedasaresultofbankruptcy,competitionfromInternetsaleschannelsorotherwise,ourproductsalescouldbeadverselyaffected.Anylossofamajorpartnerordistributionchannelorotherchanneldisruptioncouldmakeusmoredependentonalternatechannels,increasepricingandpromotionalpressuresfromotherpartnersanddistributionchannels,increaseourmarketingcosts,oradverselyimpactbuyingandinventorypatterns,paymenttermsorothercontractualterms.

Oursaleschannelpartnersalsosellproductsofferedbyourcompetitorsand,inthecaseofretailerhousebrands,mayalsobeourcompetitors.

Ifproductcompetitorsofferoursaleschannelpartnersmorefavorableterms,havemoreproductsavailabletomeettheirneeds,orutilizetheleverageofbroaderproductlinessoldthroughthechannel,orifoursaleschannelpartnersshowpreferencefortheirownhousebrands,oursaleschannelpartnersmayde-emphasizeordeclinetocarryourproducts.Inaddition,certainofoursaleschannelpartnerscoulddecidetode-emphasizetheproductcategoriesthatweofferinexchangeforotherproductcategoriesthattheybelieveprovidethemwithhigherreturns.Ifweareunabletomaintainsuccessfulrelationshipswiththesesaleschannelpartnersortomaintainourdistributionchannels,ourbusinesswillsuffer.

Asweexpandintonewproductcategoriesandmarketsinpursuitofgrowth,wewillhavetobuildrelationshipswithnewchannelpartnersand

adapttonewdistributionandmarketingmodels.Thesenewpartners,practicesandmodelsmayrequiresignificantmanagementattentionandoperationalresourcesandmayaffectouraccounting,includingrevenuerecognition,grossmargins,andtheabilitytomakecomparisonsfromperiodtoperiod.Entrenchedandmoreexperiencedcompetitorswillmakethesetransitionsdifficult.Certainproductscategories,suchasVideoCollaboration,mayalsorequirethatwefurtherbuildandscaleourownenterprisesalesforce.Severalofourcompetitorsalreadyhavelargeenterprisesaleforcesandexperienceandsuccesswiththatsalesmodel.Ifweareunabletobuildsuccessfuldistributionchannels,buildandscaleourownandenterprisesalesforceorsuccessfullymarketourproductsinthesenewproductcategories,wemaynotbeabletotakeadvantageofthegrowthopportunities,andourbusinessandourabilitytogrowourbusinesscouldbeadverselyaffected.

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Wereserveforcooperativemarketingarrangements,incentiveprogramsandpricingprogramswithoursaleschannelpartners.Thesereservesarebasedonjudgmentsandestimates,usinghistoricalexperiencerates,inventorylevelsindistribution,currenttrendsandotherfactors.Therecouldbesignificantdifferencesbetweentheactualcostsofsucharrangementsandprogramsandourestimates.

Weusesell-throughdata,whichrepresentssalesofourproductsbyourdirectretailerande-tailercustomerstoconsumers,andbyourdistributorcustomerstotheircustomers,alongwithothermetrics,toassessconsumerdemandforourproducts.Sell-throughdataissubjecttolimitationsduetocollectionmethodsandthethird-partynatureofthedataandthusmaynotbeanaccurateindicatorofactualconsumerdemandforourproducts.Inaddition,thecustomerssupplyingsell-throughdatavarybygeographicregionandfromperiodtoperiod,buttypicallyrepresentamajorityofourretailsales.Inaddition,werelyonchannelinventorydatafromoursaleschannelpartners.Ifwedonotreceivethisinformationonatimelyandaccuratebasis,orifwedonotproperlyinterpretthisinformation,ourresultsofoperationsandfinancialconditionmaybeadverselyaffected.

Our principal manufacturing operations and third-party contract manufacturers are located in China and Southeast Asia, which exposesus to risks associated with doing business in that geographic area as well as potential tariffs, adverse tax consequences and pressure tomove or diversify our manufacturing locations.

WeproduceapproximatelyhalfofourproductsatthefacilitiesweowninChina.Themajorityofourotherproductionisperformedbythird-partycontractmanufacturers,includingoriginaldesignmanufacturers,inChinaandMalaysia.

OurmanufacturingoperationsinChinacouldbeadverselyaffectedbychangesintheinterpretationandenforcementoflegalstandards,strains

onChina’savailablelaborpool,changesinlaborcostsandotheremploymentdynamics,highturnoveramongChineseemployees,infrastructureissues,import-exportissues,currencytransferrestrictions,naturaldisasters,conflictsordisagreementsbetweenChinaandTaiwanorChinaandtheUnitedStates,laborunrest,andothertradecustomsandpracticesthataredissimilartothoseintheUnitedStatesandEurope.InterpretationandenforcementofChina’slawsandregulationscontinuetoevolveandweexpectdifferencesininterpretationandenforcementtocontinueintheforeseeablefuture.

Ourmanufacturingoperationsatthird-partycontractorscouldbeadverselyaffectedbycontractualdisagreements,bylaborunrest,bynatural

disasters,bystrainsonlocalcommunications,trade,andotherinfrastructures,bycompetitionfortheavailablelaborpoolormanufacturingcapacity,byincreasinglaborandothercosts,andbyothertradecustomsandpracticesthataredissimilartothoseintheUnitedStatesandEurope.

Further,wemaybeexposedtofluctuationsinthevalueofthelocalcurrencyinthecountriesinwhichmanufacturingoccurs.Futureappreciationoftheselocalcurrenciescouldincreaseourcomponentandotherrawmaterialcosts.Inaddition,ourlaborcostscouldcontinuetoriseaswageratesincreaseandtheavailablelaborpooldeclines.Theseconditionscouldadverselyaffectourfinancialresults.

If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales.

Ourbusinessrequiresustocoordinatethemanufactureanddistributionofourproductsovermuchoftheworld.Werelyonthirdpartiestomanufacturemanyofourproducts,managecentralizeddistributioncenters,andtransportourproducts.Ifwedonotsuccessfullycoordinatethetimelymanufacturinganddistributionofourproducts,ifourmanufacturers,distributionlogisticsprovidersortransportprovidersarenotabletosuccessfullyandtimelyprocessourbusinessorifwedonotreceivetimelyandaccurateinformationfromsuchproviders,andespeciallyifweexpandintonewproductcategoriesorourbusinessgrowsinvolume,wemayhaveaninsufficientsupplyofproductstomeetcustomerdemand,wecouldlosesales,wemayexperienceabuild-upininventory,wemayincuradditionalcosts,andourfinancialperformanceandreportingmaybeadverselyaffected.

BylocatingourmanufacturinginChinaandSoutheastAsia,wearereliantonthirdpartiestogetourproductstodistributorsaroundtheworld.

Transportationcosts,fuelcosts,laborunrest,naturaldisastersandotheradverseeffectsonourability,timingandcostofdeliveringproductscanincreaseourinventory,decreaseourmargins,adverselyaffectourrelationshipswithdistributorsandothercustomersandotherwiseadverselyaffectourresultsofoperationsandfinancialcondition.

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Asignificantportionofourquarterlyretailordersandproductdeliveriesgenerallyoccurinthelastweeksofthefiscalquarter.Thisplacespressureonoursupplychainandcouldadverselyaffectourrevenuesandprofitabilityifweareunabletosuccessfullyfulfillcustomerordersinthequarter.

We purchase key components and products from a limited number of sources, and our business and operating results could be adverselyaffected if supply were delayed or constrained or if there were shortages of required components.

Wepurchasecertainproductsandkeycomponentsfromalimitednumberofsources.Ifthesupplyoftheseproductsorkeycomponents,suchasmicro-controllersandopticalsensors,weretobedelayedorconstrained,orifoneormoreofoursingle-sourcesuppliersgooutofbusinessasaresultofadverseglobaleconomicconditionsornaturaldisasters,wemightbeunabletofindanewsupplieronacceptableterms,oratall,andourproductshipmentstoourcustomerscouldbedelayed,whichcouldadverselyaffectourbusiness,financialconditionandoperatingresults.

Leadtimesformaterials,componentsandproductsorderedbyusorbyourcontractmanufacturerscanvarysignificantlyanddependonfactors

suchascontractterms,demandforacomponent,andsuppliercapacity.Fromtimetotime,wehaveexperiencedcomponentshortagesandextendedleadtimesonsemiconductors,suchasmicro-controllersandopticalsensors,andbasemetalsusedinourproducts.Shortagesorinterruptionsinthesupplyofcomponentsorsubcontractedproducts,orourinabilitytoprocurethesecomponentsorproductsfromalternatesourcesatacceptablepricesinatimelymanner,coulddelayshipmentofourproductsorincreaseourproductioncosts,whichcouldadverselyaffectourbusinessandoperatingresults.

The moral and regulatory imperatives to avoid purchasing conflict minerals are causing us to incur additional expenses, could limit thesupply and increase the cost of certain metals used in manufacturing our products and could adversely affect the distribution and salesof our products.

AspartoftheDodd-FrankWallStreetReformandConsumerProtectionAct,theSECadopteddisclosurerequirementsregardingtheuseofcertainminerals,knownasconflictminerals,whichareminedfromtheDemocraticRepublicofCongoandadjoiningcountries,aswellasproceduresregardingamanufacturer’seffortstoidentifyandpreventthesourcingofsuchmineralsandmetalsproducedfromthoseminerals.AdditionalreportingobligationsarebeingconsideredbytheEuropeanUnion.TheimplementationoftheexistingU.S.requirementsandanyadditionalrequirementsinEuropecouldaffectsourcingatcompetitivepricesandavailabilityinsufficientquantitiesofcertainmineralsusedinthemanufactureofourproducts.Thenumberofsupplierswhoprovideconflict-freemineralsmaybelimited,andtheimplementationoftheserequirementsmaydecreasethenumberofsupplierscapableofsupplyingourneedsforcertainmetals.Inaddition,theremaybematerialcostsassociatedwithcomplyingwiththedisclosurerequirements,suchascostsrelatedtotheduediligenceprocessofdeterminingthesourceofcertainmineralsusedinourproducts,aswellascostsofpossiblechangestoproducts,processes,orsourcesofsupplyasaconsequenceofsuchverificationactivities.Asoursupplychainiscomplexandweusecontractmanufacturersforsomeofourproducts,wemaynotbeabletosufficientlyverifytheoriginsoftherelevantmineralsusedinourproductsthroughtheduediligenceproceduresthatweimplement,whichmayadverselyaffectourreputation.Wemayalsoencounterchallengestosatisfythosecustomerswhorequirethatallofthecomponentsofourproductsbecertifiedasconflict-free,whichcould,ifweareunabletosatisfytheirrequirementsorpassthroughanyincreasedcostsassociatedwithmeetingtheirrequirementsplaceusatacompetitivedisadvantage,adverselyaffectourbusinessandoperatingresults,orboth.Wefiledourreportforthecalendaryear2017withtheSEConMay31,2018.

We conduct operations in a number of countries and have invested significantly in growing our sales and marketing activities in China,and the effect of business, legal and political risks associated with international operations could adversely affect us.

WeconductoperationsinanumberofcountriesandhaveinvestedsignificantlyingrowingourpersonnelandsalesandmarketingactivitiesinChinaand,toalesserextent,otheremergingmarkets.Wemayalsoincreaseourinvestmentstogrowsalesinotheremergingmarkets,suchasLatinAmerica,EasternEurope,theMiddleEastandAfrica.Therearerisksinherentindoingbusinessininternationalmarkets,including:

• Difficultiesinstaffingandmanaginginternationaloperations;

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• Compliancewithlawsandregulations,includingenvironmental,tax,import/exportandanti-corruptionlaws,whichvaryfromcountrytocountryandovertime,increasingthecostsofcomplianceandpotentialrisksofnon-compliance;

• Varyinglaws,regulationsandotherlegalprotections,uncertainandvaryingenforcementofthoselawsandregulations,dependenceon

localauthorities,andtheimportanceoflocalnetworksandrelationships;• Exposuretopoliticalandfinancialinstability,especiallywiththeuncertaintyassociatedwiththeongoingsovereigndebtcrisisincertain

EurozonecountriesandthestabilityoftheEuropeanUnion,whichmayleadtoreducedsales,currencyexchangelossesandcollectiondifficultiesorotherlosses;

• Politicalandeconomicuncertaintyaroundtheworld,includinguncertaintyresultingfromtherecentUnitedStatespresidentialandcongressionalelections,changeofadministrationintheUnitedStatesandtheUnitedKingdom'sreferenduminJune2016,andothernationalelectionsandpolicyshifts;

• Importorexportrestrictionsorlicensingrequirementsthatcouldaffectsomeofourproducts,includingthosewithencryptiontechnology;

• Tradeprotectionmeasures,customduties,tariffs,importorexportduties,andothertradebarriers,restrictionsandregulations;• Lackofinfrastructureorservicesnecessaryorappropriatetosupportourproductsandservices;• Exposuretofluctuationsinthevalueoflocalcurrencies;• Difficultiesandincreasedcostsinestablishingsalesanddistributionchannelsinunfamiliarmarkets,withtheirownmarketcharacteristics

andcompetition,includingentrenchedlocalcompetition;• Weakprotectionofourintellectualpropertyrights;• Highercreditrisks;• ChangesinVAT(value-addedtax)orVATreimbursement;

• Impositionofcurrencyexchangecontrols;• Delaysfromcustomsbrokersorgovernmentagencies;and• Abroadrangeofcustoms,consumertrends,andmore.

Anyoftheseriskscouldadverselyaffectourbusiness,financialconditionandoperatingresults.Salesgrowthinkeymarkets,includingChina,isanimportantpartofourexpectationsforourbusiness.Asaresult,ifeconomic,politicalor

businessconditionsdeteriorateinthesemarkets,orifoneormoreoftherisksdescribedabovematerializeinthesemarkets,ouroverallbusinessandresultsofoperationswillbeadverselyaffected.

Changes in trade policy in the United States and other countries, including changes in trade agreements and the imposition of tariffs andthe resulting consequences, may have adverse impacts on our business, results of operations and financial condition.

TheU.S.governmenthasindicatedanddemonstrateditsintenttoalteritsapproachtointernationaltradepolicythroughtherenegotiation,andpotentialtermination,ofcertainexistingbilateralormultilateraltradeagreementsandtreatieswith,andtheimpositionoftariffsonawiderangeofproductsandothergoodsfrom,China,countriesinEMEAandothercountries.Asnotedpreviously,wehaveinvestedsignificantlyinmanufacturingfacilitiesinChinaandSoutheastAsia.Givenourmanufacturinginthosecountries,andourlackofmanufacturingelsewhere,policychangesintheUnitedStatesorothercountries,suchasthetariffsalreadyproposed,implementedandthreatenedin2018and2019,presentparticularrisksforus.Tariffsalreadyannouncedandimplementedarehavinganadverseeffectoncertainofourproducts,tariffsannouncedbutnotyetimplemented

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mayhaveanadverseeffectonmanyofourproducts,andthreatenedtariffscouldadverselyaffectmoreorallofourproducts.Therearealsorisksassociatedwithretaliatorytariffsandresultingtradewars.Wecannotpredictfuturetradepolicy,thetermsofanyrenegotiatedtradeagreementsortreaties,ortariffsandtheirimpactonourbusiness.Atradewarcouldhaveasignificantadverseeffectonworldtradeandtheworldeconomy.TotheextentthattradetariffsandotherrestrictionsimposedbytheUnitedStatesorothercountriesincreasethepriceof,orlimittheamountof,ourproductsorcomponentsormaterialsusedinourproductsimportedintotheUnitedStatesorothercountries,orcreateadversetaxconsequences,thecostorgrossmarginofourproductsmaybeadverselyaffectedandthedemandfromourcustomersforproductsandservicesmaybediminished.Uncertaintysurroundinginternationaltradepolicyanddisputesandprotectionistmeasurescouldalsohaveanadverseeffectonconsumerconfidenceandspending.Ifwedeemitnecessarytoalteralloraportionofouractivitiesoroperationsinresponsetosuchpolicies,agreementsortariffs,ourcapitalandoperatingcostsmayincrease.Ourongoingeffortstoaddresstheserisksmaynotbeeffectiveandmayhavelong-termadverseeffectsonouroperationsandoperatingresultsthatwemaynotbeabletoreverse.Sucheffortsmayalsotaketimetoimplementortohaveaneffect,andmayresultinadversequarterlyfinancialresultsorfluctuationsinourquarterlyfinancialresults.Asaresult,changesininternationaltradepolicy,changesintradeagreementsandtariffscouldadverselyaffectourbusiness,resultsofoperationsandfinancialcondition.

Our financial performance is subject to risks associated with fluctuations in currency exchange rates.

AsignificantportionofourbusinessisconductedincurrenciesotherthantheU.S.Dollar.Therefore,wefaceexposuretomovementsincurrencyexchangerates.

Ourprimaryexposuretomovementsincurrencyexchangeratesrelatestonon-U.S.Dollar-denominatedsalesandoperatingexpensesworldwide.Forfiscalyear2019,approximately50%ofourrevenuewasinnon-U.S.denominatedcurrencies.TheweakeningofcurrenciesrelativetotheU.S.DollaradverselyaffectstheU.S.Dollarvalueofournon-U.S.Dollar-denominatedsalesandearnings.Ifweraiseinternationalpricingtocompensate,itcouldpotentiallyreducedemandforourproducts,adverselyaffectingoursalesandpotentiallyhavinganadverseimpactonourmarketshare.Marginsonsalesofourproductsinnon-U.S.Dollar-denominatedcountriesandonsalesofproductsthatincludecomponentsobtainedfromsuppliersinnon-U.S.Dollar-denominatedcountriescouldbeadverselyaffectedbycurrencyexchangeratefluctuations.Insomecircumstances,forcompetitiveorotherreasons,wemaydecidenottoraiselocalpricestofullyoffsettheU.S.Dollar’sstrengthening,whichwouldadverselyaffecttheU.S.Dollarvalueofournon-U.S.Dollar-denominatedsalesandearnings.Competitiveconditionsinthemarketsinwhichweoperatemayalsolimitourabilitytoincreasepricesintheeventoffluctuationsincurrencyexchangerates.Conversely,strengtheningofcurrencyratesmayalsoincreaseourproductcomponentcostsandotherexpensesdenominatedinthosecurrencies,adverselyaffectingoperatingresults.Wefurthernotethatalargerportionofoursalesthanofourexpensesaredenominatedinnon-U.S.denominatedcurrencies.

Weusederivativeinstrumentstohedgecertainexposurestofluctuationsincurrencyexchangerates.Theuseofsuchhedgingactivitiesmaynotoffsetany,ormorethanaportion,oftheadversefinancialeffectsofunfavorablemovementsincurrencyexchangeratesoverthelimitedtimethehedgesareinplaceanddonotprotectusfromlongtermshiftsincurrencyexchangerates.

Asaresult,fluctuationsincurrencyexchangeratescouldadverselyaffectourbusiness,operatingresultsandfinancialcondition.Moreover,theseexposuresmaychangeovertime.

As a company operating in many markets and jurisdictions, expanding into new growth categories and engaging in acquisitions, and as aSwiss, dual - listed company, we are subject to risks associated with new, existing and potential future laws and regulations.

Basedonourcurrentbusinessmodelandasweexpandintonewmarketsandproductcategoriesandacquirecompanies,businessesandassets,wemustcomplywithawidevarietyoflaws,standardsandotherrequirementsgoverning,amongotherthings,healthandsafety,hazardousmaterialsusage,product-relatedenergyconsumption,packaging,recyclingandenvironmentalmatters.Ourproductsmayberequiredtoobtainregulatoryapprovalsandsatisfyotherregulatoryconcernsinthevariousjurisdictionswheretheyaremanufactured,soldorboth.Companies,businessesandassetsthatweacquiremaynotbeincompliancewithregulationsinalljurisdictions.Theserequirementscreateprocurementanddesignchallenges,which,amongotherthings,requireustoincuradditionalcostsidentifyingsuppliersandcontractmanufacturerswhocanprovideorobtaincompliantmaterials,partsandendproducts.Failuretocomplywithsuchrequirementscansubjectustoliability,additionalcosts,andreputationalharmand,inseverecases,forceustorecallproductsorpreventusfromsellingourproductsincertainjurisdictions.

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AsaSwisscompanywithshareslistedonboththeSIXSwissExchangeandtheNasdaqGlobalSelectMarket,wearealsosubjecttoboth

SwissandUnitedStatescorporategovernanceandsecuritieslawsandregulations.Inadditiontotheextracostsandregulatoryburdensofourdualregulatoryobligations,thetworegulatoryregimesmaynotalwaysbecompatibleandmayimposedisclosureobligations,operatingrestrictionsortaxeffectsonourbusinesstowhichourcompetitorsandothercompaniesarenotsubject.Forexample,onJanuary1,2014,subjecttocertaintransitionalprovisions,theSwissFederalCouncilOrdinanceAgainstExcessiveCompensationatPublicCompanies(theOrdinance)becameeffectiveinconnectionwiththeMinderinitiativeapprovedbySwissvotersduring2013.TheOrdinance,amongotherthings,(a)requiresabindingshareholder“sayonpay”votewithrespecttothecompensationofmembersofourexecutivemanagementandBoardofDirectors,(b)generallyprohibitsthemakingofseverance,advance,transactionpremiumsandsimilarpaymentstomembersofourexecutivemanagementandBoardofDirectors,(c)imposesotherrestrictivecompensationpractices,and(d)requiresthatourarticlesofincorporationspecifyvariouscompensation-relatedmatters.Inaddition,during2013,Swissvotersconsideredaninitiativetolimitpayforachiefexecutiveofficertoamultipleofnomorethantwelvetimesthesalaryofthelowest-paidemployee.Althoughvotersrejectedthatinitiative,itdidreceivesubstantialvotersupport.TheOrdinance,potentialfutureinitiativesrelatingtocorporategovernanceorexecutivecompensation,andSwissvotersentimentinfavorofsuchregulationsmayincreaseournon-operatingcostsandadverselyaffectourabilitytoattractandretainexecutivemanagementandmembersofourBoardofDirectors.

WeprepareourconsolidatedfinancialstatementsinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStates(U.S.GAAP)whicharesubjecttointerpretationorchangesbytheFinancialAccountingStandardsBoard(FASB),theSECandothervariousbodiesformedtopromulgateandinterpretappropriateaccountingprinciples.Newaccountingpronouncementsandchangesinaccountingprincipleshaveoccurredinthepastandareexpectedtooccurinthefuturewhichmayhaveasignificanteffectonourfinancialresultsorourcompliancewithregulations.

As a result of changes in tax laws, treaties, rulings, regulations or agreements, or their interpretation, of Switzerland or any other countryin which we operate, the loss of a major tax dispute or a successful challenge to our operating structure, intercompany pricing policies orthe taxable presence of our key subsidiaries in certain countries, or other factors, our effective income tax rates may increase in thefuture, which could adversely affect our net income and cash flows.

Weoperateinmultiplejurisdictionsandourprofitsaretaxedpursuanttothetaxlawsofthesejurisdictions.Oureffectiveincometaxratemaybe

affectedbychangesinorinterpretationsoftaxlaws,treaties,rulings,regulationsoragreementsinanygivenjurisdiction,utilizationofnetoperatinglossandtaxcreditcarryforwards,changesingeographicalallocationofincomeandexpense,andchangesinmanagement’sassessmentofmatterssuchastherealizabilityofdeferredtaxassets.Inthepast,wehaveexperiencedfluctuationsinoureffectiveincometaxrate.Oureffectiveincometaxrateinagivenfiscalyearreflectsavarietyoffactorsthatmaynotbepresentinthesucceedingfiscalyearoryears.Thereisnoassurancethatoureffectiveincometaxratewillnotchangeinfutureperiods.

WeareincorporatedintheCantonofVaudinSwitzerlandandoureffectiveincometaxratebenefitsfromalongstandingrulingfromtheCanton

ofVaud.ThetaxrulesinSwitzerlandareexpectedtochangeinresponsetocertainguidanceanddemandsfromboththeEuropeanUnionandtheOrganizationforEconomicCo-operationandDevelopmentandthatcouldhaveanadverseeffectonourtaxrulingandeffectiveincometaxrate.ThesechangescontinuetoprogressthroughSwitzerlandlegislativeprocess.Switzerland’simplementationofanymaterialchangeintaxlawsorpoliciesoritsadoptionofnewinterpretationsofexistingtaxlawsandrulings,orchangesinourtaxrulingfromtheCantonofVaud,couldresultinahighereffectiveincometaxrateonourworldwideearningsandsuchchangecouldadverselyaffectournetincome.

WefileSwissandforeigntaxreturns.Wearefrequentlysubjecttotaxaudits,examinationsandassessmentsinvariousjurisdictions.Ifanytax

authoritysuccessfullychallengesouroperationalstructure,intercompanypricingpoliciesorthetaxablepresenceofourkeysubsidiariesincertaincountries,ifthetermsofcertainincometaxtreatiesareinterpretedinamannerthatisadversetoourstructure,orifweloseamaterialtaxdisputeinanycountry,oureffectiveincometaxratecouldincrease.Forexample,policychangesintheUnitedStatesorChinapredicatedonourpresenceinthosecountriescouldadverselyaffectwherewerecognizeprofitandoureffectiveincometaxrate.Amaterialassessmentbyagoverningtaxauthoritycouldadverselyaffectourprofitability.Ifoureffectiveincometaxrateincreasesinfutureperiods,ournetincomeandcashflowscouldbeadverselyaffected.

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Claims by others that we infringe their proprietary technology could adversely affect our business.

Wehavebeenexpandingthecategoriesofproductswesell,suchasenteringnewmarketsandintroducingproductsfortablets,othermobiledevices,digitalmusic,andvideocollaboration.Weexpecttocontinuetoenternewcategoriesandmarkets.Aswedoso,wefaceanincreasedriskthatclaimsallegingweinfringethepatentorotherintellectualpropertyrightsofothers,regardlessofthemeritoftheclaims,mayincreaseinnumberandsignificance.Infringementclaimsagainstusmayalsoincreaseasthefunctionalityofvideo,voice,dataandconferencingproductsbegintooverlap.Thisriskisheightenedbytheincreaseinlawsuitsbroughtbyholdersofpatentsthatdonothaveanoperatingbusinessorareattemptingtolicensebroadpatentportfoliosandbytheincreasingattemptsbycompaniesinthetechnologyindustriestoenjointheircompetitorsfromsellingproductsthattheyclaiminfringetheirintellectualpropertyrights.Intellectualpropertylawsuitsaresubjecttoinherentuncertaintiesduetothecomplexityofthetechnicalissuesinvolved,andwecannotbecertainthatwewillbesuccessfulindefendingourselvesagainstintellectualpropertyclaims.Asuccessfulclaimantcouldsecureajudgmentthatrequiresustopaysubstantialdamagesorpreventsusfromdistributingcertainproductsorperformingcertainservices.Wemightalsoberequiredtoseekalicensefortheuseofsuchintellectualproperty,whichmaynotbeavailableoncommerciallyacceptabletermsoratall.Alternatively,wemayberequiredtodevelopnon-infringingtechnology,whichcouldrequiresignificanteffortandexpenseandmayultimatelynotbesuccessful.Anyclaimsorproceedingsagainstus,whethermeritoriousornot,couldbetime-consuming,resultincostlylitigationorthediversionofsignificantoperationalresources,orrequireustoenterintoroyaltyorlicensingagreements,anyofwhichcouldmateriallyandadverselyaffectourbusinessandresultsofoperations.

We may be unable to protect our proprietary rights. Unauthorized use of our technology may result in the development of products thatcompete with our products.

Ourfuturesuccessdependsinpartonourproprietarytechnology,technicalknow-howandotherintellectualproperty.Werelyonacombinationofpatent,tradesecret,copyright,trademarkandotherintellectualpropertylaws,andconfidentialityproceduresandcontractualprovisionssuchasnondisclosuretermsandlicenses,toprotectourintellectualproperty.

WeholdvariousUnitedStatespatentsandpendingapplications,togetherwithcorrespondingpatentsandpendingapplicationsfromother

countries.Itispossiblethatanypatentownedbyuswillbeinvalidated,deemedunenforceable,circumventedorchallenged,thatthepatentrightsgrantedwillnotprovidecompetitiveadvantagestous,orthatanyofourpendingorfuturepatentapplicationswillnotbegranted.Inaddition,otherintellectualpropertylawsorourconfidentialityproceduresandcontractualprovisionsmaynotadequatelyprotectourintellectualproperty.Also,othersmayindependentlydevelopsimilartechnology,duplicateourproducts,ordesignaroundourpatentsorotherintellectualpropertyrights.Unauthorizedpartieshavecopiedandmayinthefutureattempttocopyaspectsofourproductsortoobtainanduseinformationthatweregardasproprietary.Anyoftheseeventscouldadverselyaffectourbusiness,financialconditionandoperatingresults.

Product quality issues could adversely affect our reputation, business and our operating results.

Themarketforourproductsischaracterizedbyrapidlychangingtechnologyandevolvingindustrystandards.Toremaincompetitive,wemustcontinuallyintroducenewproductsandtechnologies.Theproductsthatwesellcouldcontaindefectsindesignormanufacture.Defectscouldalsooccurintheproductsorcomponentsthataresuppliedtous.Therecanbenoassurancewewillbeabletodetectandremedyalldefectsinthehardwareandsoftwarewesell.Failuretodosocouldresultinproductrecalls,productliabilityclaimsandlitigation,productredesignefforts,lostrevenue,lossofreputation,andsignificantwarrantyandotherexpensestoremedy.

Whilewemaintainreservesforreasonablyestimableliabilitiesandpurchaseliabilityinsurance,ourreservesmaynotbeadequatetocoversuchclaimsandliabilitiesandourinsuranceissubjecttodeductiblesandmaynotbeadequatetocoversuchclaimsandliabilities.Furthermore,ourcontractswithdistributorsandretailersmaycontainwarranty,indemnificationandotherprovisionsrelatedtoproductqualityissues,andclaimsunderthoseprovisionsmayadverselyaffectourbusinessandoperatingresults.

Significant disruptions in, or breaches in security of, our websites or information technology systems could adversely affect ourbusiness.

Asaconsumerelectronicscompany,ourwebsitesareanimportantpresentationofourcompany,identityandbrandsandanimportantmeansofinteractionwithandsourceofinformationforconsumersofourproducts.We

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alsorelyonourcentralizedinformationtechnologysystemsforproduct-relatedinformationandtostoreintellectualproperty,forecastourbusiness,maintainfinancialrecords,manageoperationsandinventory,andoperateothercriticalfunctions.Weallocatesignificantresourcestomaintainourinformationtechnologysystemsanddeploynetworksecurity,dataencryption,trainingandothermeasurestoprotectagainstunauthorizedaccessormisuse.Nevertheless,ourwebsitesandinformationtechnologysystemsaresusceptibletodamage,disruptionsorshutdownsduetopoweroutages,hardwarefailures,structuraloroperationalfailures,computerviruses,attacksbycomputerhackers,otherdatasecurityissues,telecommunicationfailures,usererror,malfeasance,catastrophes,systemorsoftwareupgrades,integrationormigration,orotherforeseeableandunforeseenevents.Fromtimetotime,weandoursuppliershaveidentifiedvulnerabilitiesorotherissuesthatwebelievehavebeenaddressed,andweexpectsuchissuestocontinuetoarise.Breachesordisruptionsofourwebsitesorinformationtechnologysystems,breachesofconfidentialinformation,datacorruptionorotherdatasecurityissuescouldadverselyaffectourbrands,reputation,relationshipswithcustomersorbusinesspartners,orconsumerorinvestorperceptionofourcompany,businessorproductsorresultindisruptionsofouroperations,lossofintellectualpropertyorourcustomers’orourbusinesspartners’data,reducedvalueofourinvestmentsinourbrands,design,researchanddevelopmentorengineering,orcoststoaddressregulatoryinquiriesoractionsorprivatelitigation,torespondtocustomersorpartnersortorebuildorrestoreourwebsitesorinformationtechnologysystems.The collection, storage, transmission, use and distribution of user data could give rise to liabilities and additional costs of operation as aresult of laws, governmental regulation and risks of security breaches.

Inconnectionwithcertainofourproducts,wecollectdatarelatedtoourconsumers.Thisinformationisincreasinglysubjecttolegislationandregulationsinnumerousjurisdictionsaroundtheworld,andespeciallyinEurope.Forexample,theEuropeanUnionadoptedtheGeneralDataProtectionRegulation(GDPR),whichisapplicabletousandtoallcompaniesprocessingdataofEuropeanUnionresidents,becameeffectiveinMay2018andimposessignificantfinesandsanctionsforviolationoftheRegulation.Governmentactionsaretypicallyintendedtoprotecttheprivacyandsecurityofpersonalinformationanditscollection,storage,transmission,useanddistributioninorfromthegoverningjurisdiction.Inaddition,becausevariousjurisdictionshavedifferentlawsandregulationsconcerningtheuse,storageandtransmissionofsuchinformation,wemayfacerequirementsthatposecompliancechallengesinexistingmarketsaswellasnewinternationalmarketsthatweseektoenter.ThecollectionofuserdataheightenstheriskofsecuritybreachesandotherdatasecurityissuesrelatedtoourITsystemsandthesystemsofthird-partydatastorageandotherserviceandITproviders.Suchlawsandregulations,andthevariationbetweenjurisdictions,aswellasadditionalsecuritymeasuresandrisk,couldsubjectustocosts,allocationofadditionalresources,liabilitiesornegativepublicitythatcouldadverselyaffectourbusiness.

In previous periods, we identified material weaknesses in our internal control over financial reporting and, if we are unable to satisfyregulatory requirements relating to internal controls or if our internal control over financial reporting is not effective, our business andstock price could be adversely affected.

InconnectionwithSection404oftheSarbanes-OxleyAct,wehaveidentifiedinthepastandmay,fromtime-to-timeinthefuture,identifyissueswithourinternalcontrolsanddeficienciesinourinternalcontroloverfinancialreporting.ThemostrecentmaterialweaknesswasidentifiedduringthepreparationofourauditedfinancialstatementsfortheyearendedMarch31,2017,andwasrelatedtotheallowancesandaccrualsforcustomerincentives,cooperativemarketingandpricingprograms.Inthepast,wehaveidentifiedothermaterialweaknessesinourinternalcontroloverfinancialreporting,asdescribedinourAnnualReportsonForm10-Kforfiscalyear2017,certainofwhichresultedinlatefilingsofandanamendmenttoourperiodicreportsandinrestatementsofourfinancialresults.Amaterialweaknessisdefinedasadeficiency,orcombinationofdeficiencies,ininternalcontroloverfinancialreporting,suchthatthereisareasonablepossibilitythatamaterialmisstatementofourannualorinterimfinancialstatementswillnotbepreventedordetectedonatimelybasis.Ifourremediationeffortsarenoteffectiveorifadditionalmaterialweaknessesorsignificantdeficienciesinourinternalcontrolsarediscoveredoroccurinthefuture,ourconsolidatedfinancialstatementsmaycontainmaterialmisstatementsandwecouldberequiredtorestateourfinancialresults,wecouldbesubjecttolitigationwhich,whethermeritoriousornot,remediationeffortscouldbetime-consuming,costlyand/ordivertsignificantoperationalresources,wecouldloseinvestorconfidenceintheaccuracyandcompletenessofourfinancialreports,andourreputation,business,resultsofoperationsandstockpricecouldbeadverselyaffected.

We cannot ensure that our current share repurchase program will be fully utilized or that it will enhance long-term shareholder value.Share repurchases may also increase the volatility of the trading price of our shares. We similarly cannot ensure that we will continue toincrease our dividend payments or to pay dividends at all. Share repurchases and dividends diminish our cash reserves.

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InMarch2017,ourBoardofDirectorsauthorizedathree-year$250.0millionrepurchaseprogramofourregisteredshares.Wehavealsopaidcashdividendsandincreasedthesizeofourdividend,eachyearsincefiscalyear2013.Oursharerepurchaseprogramanddividendpolicymaybeaffectedbymanyfactors,includinggeneralbusinessandeconomicconditions,ourfinancialconditionandoperatingresults,ourviewsonpotentialfuturecapitalrequirements,restrictionsimposedinanyfuturedebtagreements,theemergenceofalternativeinvestmentoracquisitionopportunities,changesinourbusinessstrategy,legalrequirements,changesintaxlaws,andotherfactors.Oursharerepurchaseprogramdoesnotobligateustorepurchasealloranyofthedollarvalueofsharesauthorizedforrepurchase.Theprogramcouldalsoincreasethevolatilityofthetradingpriceofourshares.Similarly,wearenotobligatedtopaydividendsonourregisteredshares.UnderSwisslaw,wemayonlypaydividendsupontheapprovalofamajorityofourshareholders,whichisunderthediscretionofandgenerallyfollowsarecommendationbyourBoardofDirectorsthatsuchadividendisinthebestinterestsofourshareholders.TherecanbenoassurancethatourBoardofDirectorswillcontinuetorecommend,orthatourshareholderswillapprove,dividendincreasesoranydividendatall.Ifwedonotpayaregulardividend,wemaylosetheinterestofinvestorsthatfocustheirinvestmentsondividend-payingcompanies,whichcouldcreatedownwardpressureonourshareprice.Anyannouncementofterminationorsuspensionofoursharerepurchaseprogramordividendmayresultinadecreaseinourshareprice.Thesharerepurchaseprogramandpaymentofcashdividendscouldalsodiminishourcashreservesthatmaybeneededforinvestmentsinourbusiness,acquisitionsorotherpurposes.Withoutdividends,thetradingpriceofoursharesmustappreciateforinvestorstorealizeagainontheirinvestment.

Goodwill impairment charges could have an adverse effect on the results of our operations.

Goodwillassociatedwithanumberofpreviousacquisitionscouldresultinimpairmentcharges.Theslowdownintheoverallvideoconferencingindustrytogetherwiththecompetitiveenvironmentinfiscalyear2013resultedina$214.5millionnon-cashgoodwillimpairmentchargeinfiscalyear2013,whichsubstantiallyimpactedresultsofdiscontinuedoperations.Werecordedanadditionalimpairmentchargeofgoodwillof$122.7millionrelatedtoourLifesizevideoconferencingdiscontinuedoperationsinfiscalyear2015,reducingitsgoodwilltozero,whichsubstantiallyimpactedresultsofdiscontinuedoperationsagain.Ifwedivestordiscontinueproductcategoriesorproductsthatwepreviouslyacquired,orifthevalueofthosepartsofourbusinessbecomeimpaired,wemayneedtoevaluatethecarryingvalueofourgoodwill.Additionalimpairmentchargescouldadverselyaffectourresultsofoperations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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ITEM 2. PROPERTIES

OurheadquartersislocatedinLausanne,Switzerland,whereweoccupyapproximately50,500squarefeetunderaleasethatexpiresinJuly2020.Ourprincipalcorporateandadministrativeoffices,whichincludesourheadquartersinLausanne,Switzerland,andcorporateofficesinNewark,CaliforniaandHsinchu,Taiwan,togethermakeupapproximately286,000squarefeetofleasedspace.BothourLausanne,SwitzerlandandNewark,Californialocationsserveourresearchanddevelopment,productmarketing,salesmanagement,technicalsupportandadministrativefunctions.OurHsinchu,Taiwanlocationservesourmechanicalengineering,processengineering,manufacturingsupport,qualityassurance,design,researchanddevelopment,andadministrativefunctions.Wemaintainmarketingandchannelsupportofficesinapproximately77locationsand40countries,withleaseexpirationdatesfrom2019to2030.

AsofMarch31,2019,themajorityofourpropertiesareleased;however,wealsoownsomeofthemanufacturingunitsandemployeedormitoriesinSuzhou,China,fromwhichweoccupyapproximately722,000squarefeet.Weanticipatenodifficultyinextendingtheleasesofourfacilitiesorobtainingcomparablefacilitiesinsuitablelocations.Wealsocontractwithvariousthird-partydistributioncentersinNorthAmerica,SouthAmerica,EuropeandAsiaPacificforadditionalwarehousesinwhichwestoreinventory.Webelievethatourmanufacturinganddistributionfacilitiesareadequateforourongoingneedsandwecontinuetoevaluatetheneedforfacilitiestomeetcurrentandanticipatedfuturerequirements.

ITEM 3. LEGAL PROCEEDINGS

Fromtime-to-time,weareinvolvedinclaimsandlegalproceedingsthatariseintheordinarycourseofourbusiness.Wearecurrentlysubjecttoseveralsuchclaimsandasmallnumberoflegalproceedings.Webelievethatthesematterslackmeritandweintendtovigorouslydefendagainstthem.Basedonthecurrentlyavailableinformation,wedonotbelievethatresolutionofpendingmatterswillhaveamaterialadverseeffectonourfinancialcondition,cashflowsorresultsofoperations.However,litigationissubjecttoinherentuncertainties,andtherecanbenoassurancesthatourdefenseswillbesuccessfulorthatanysuchlawsuitorclaimwouldnothaveamaterialadverseimpactonourbusiness,financialcondition,cashflowsandresultsofoperationsinaparticularperiod.Anyclaimsorproceedingsagainstus,whethermeritoriousornot,canhaveanadverseimpactbecauseofdefensecosts,diversionofmanagementandoperationalresources,negativepublicityandotherfactors.Anyfailuretoobtainanecessarylicenseorotherrights,orlitigationarisingoutofintellectualpropertyclaims,couldadverselyaffectourbusiness.

ITEM 4. MINE SAFETY DISCLOSURES

None.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES

Logitech'ssharesarelistedandtradedonboththeSIXSwissExchange,wherethesharepriceisdenominatedinSwissfrancsandontheNasdaqGlobalSelectMarket,wherethesharepriceisdenominatedinU.S.Dollars.ThetradingsymbolforLogitechsharesisLOGNontheSIXSwissExchangeandLOGIontheNasdaqGlobalSelectMarket.AsofMay3,2019,therewere173,106,620sharesissued(including6,508,074sharesheldastreasurystock)heldby16,510holdersofrecord,andtheclosingpriceofourshareswasCHF41.21($40.45basedonexchangeratesonsuchdate)pershareontheSIXSwissExchangeand$40.35pershareasreportedbytheNasdaqGlobalSelectMarket.

Dividends

UnderSwisslaw,acorporationmayonlypaydividendsuponavoteofitsshareholders.Thisvotetypicallyfollowstherecommendationofthecorporation'sBoardofDirectors.InMay2019,theBoardofDirectorsrecommendedthattheCompanyincreasethecashdividendforfiscalyear2019byapproximately10%toCHF121.8million($122.4millionbasedontheexchangerateonMarch31,2019).OnSeptember5,2018,Logitech'sshareholdersapprovedacashdividendpaymentofCHF110.7millionoutofretainedearningstoLogitechshareholderswhoownedsharesonSeptember18,2018.EligibleshareholderswerepaidCHF0.67pershare($0.69pershareinU.S.Dollars),totaling$114.0millioninU.S.DollarsonSeptember21,2018.OnSeptember12,2017,Logitech'sshareholdersapprovedacashdividendpaymentofCHF100.0millionoutofretainedearningstoLogitechshareholderswhoownedsharesonSeptember22,2017.EligibleshareholderswerepaidCHF0.61pershare($0.63pershareinU.S.Dollars),totaling$104.2millioninU.S.DollarsonSeptember27,2017.

Dividendspaidandsimilarcashorin-kinddistributionsmadebyLogitechtoaholderofLogitechshares(includingdividendsorliquidationproceedsandstockdividends),otherthandistributionsofqualifyingadditionalpaid-in-capitalifitisavailableunderthecurrentSwisstaxregime,aresubjecttoaSwissfederalanticipatorytaxatarateof35%.TheanticipatorytaxmustbewithheldbyLogitechfromthegrossdistributionandpaidtotheSwissFederalTaxAdministration.

ASwissresidentholderandbeneficialownerofLogitechsharesmayqualifyforafullrefundoftheSwissanticipatorytaxwithheldfromsuchdividends.AholderandbeneficialownerofLogitechshareswhoisanon-residentofSwitzerland,butaresidentofacountrythatmaintainsadoubletaxtreatywithSwitzerland,mayqualifyforafullorpartialrefundoftheSwissanticipatorytaxwithheldfromsuchdividendsbyvirtueoftheprovisionsoftheapplicabletreatybetweenSwitzerlandandthecountryofresidenceoftheholderandbeneficialowneroftheLogitechshares.

InaccordancewiththetaxconventionbetweentheUnitedStatesandtheSwissConfederation(Treaty),amechanismisprovidedwherebyaU.S.resident(asdeterminedundertheTreaty),andU.S.corporations,otherthanU.S.corporationshavinga"permanentestablishment"orafixedbase,asdefinedintheTreaty,inSwitzerland,generallycanobtainarefundoftheSwissanticipatorytaxwithheldfromdividendsinrespectofLogitechshares,totheextentthat15%ofthegrossdividendiswithheldasfinalwithholdingtax(i.e.20%ofthegrossdividendmaygenerallyberefunded).Inspecificcases,U.S.companiesnothavinga"permanentestablishment"orafixedbaseinSwitzerlandowningatleast10%ofLogitechregisteredsharesmayreceivearefundoftheSwissanticipatorytaxwithheldfromdividendstotheextentitexceeds5%ofthegrossdividend(i.e.,30%ofthegrossdividendmayberefunded).Togetthebenefitofarefund,holdersmustbeneficiallyownLogitechsharesatthetimesuchdividendbecomesdue.

Share Repurchases

Infiscalyear2019,thefollowingapprovedsharebuybackprogramwasinplace(inthousands):

Share Buyback Program Approved Shares (1)   Approved AmountsMarch2017 17,311   $ 250,000

(1)TheapprovalofoursharebuybackprogramsbytheSwissTakeoverBoardlimitsthenumberofsharesthatwemayrepurchasetonomorethan10%ofourauthorizedsharecapitalandvotingrights.

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ThefollowingtablepresentscertaininformationrelatedtopurchasesmadebyLogitechofitsequitysecuritiesunderitspubliclyannouncedsharebuybackprograms(inthousands,exceptpershareamounts):

        Weighted Average Price Per Share   Remaining Amountthat May Yet Be

Repurchased underthe ProgramDuring Fiscal Year Ended  

SharesRepurchased   CHF (LOGN)   USD (LOGI)  

March31,2017   4,027   22.00   15.29   $ 94,642March31,2018   863   34.53   —   $ 219,893March31,2019   808   39.58   —   $ 187,433

   

Total Number ofShares

Repurchased

  Weighted Average Price Paid Per Share   RemainingAmount that May

Yet BeRepurchased

under the ProgramDuring the three months ended March 31, 2019     CHF (LOGN)   USD (LOGI)  Month1                December29,2018toJanuary25,2019   —   —   —   $ 197,428Month2                January26,2019toFebruary22,2019   276   35.95   —   187,433Month3                February23,2019toMarch31,2019   —   —   —   187,433    276   35.95   —   $ 187,433

Performance Graph

The information contained in the Performance Graph shall not be deemed to be "soliciting material" or "filed" with the SEC or subject to theliabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), except to the extent that we specifically incorporateit by reference into a document filed under the Securities Act of 1933, as amended (the Securities Act), or the Exchange Act .

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Thefollowinggraphcomparesthecumulativetotalstockholderreturnonourshares,theNasdaqCompositeIndex,andtheS&P500InformationandTechnologyIndex.Thegraphassumesthat$100wasinvestedinourLOGIshares,theNasdaqCompositeIndexandtheS&P500InformationandTechnologyIndexonMarch31,2014,andcalculatestheannualreturnthroughMarch31,2019.Thestockpriceperformanceonthefollowinggraphisnotnecessarilyindicativeoffuturestockpriceperformance.

________________________________________

*$100investedonMarch31,2014,instockorindex,includingreinvestmentofdividends.Copyright©2019Standard&Poor's,adivisionofS&PGlobal.Allrightsreserved.

  March 31,

  2014   2015   2016   2017   2018   2019Logitech   $ 100   $ 90   $ 113   $ 232   $ 273   $ 296NasdaqCompositeIndex   $ 100   $ 118   $ 119   $ 146   $ 176   $ 195S&P500InformationandTechnologyIndex   $ 100   $ 118   $ 128   $ 159   $ 204   $ 235

ITEM 6. Selected Financial Data

Thisfinancial datashouldbereadinconjunctionwithItem7, Management's DiscussionandAnalysis of Financial ConditionandResults ofOperations.Thesehistoricalresultsarenotnecessarilyindicativeoftheresultstobeexpectedinthefuture.

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  Years ended March 31,

  2019   2018   2017   2016 (1)   2015 (1)

                     

  (in thousands, except for per share amounts)Consolidated statement of operations and cashflow data           Netsales   $ 2,788,322   $ 2,566,863   $ 2,221,427   $ 2,018,100   $ 2,004,908Operatingincome   $ 263,194   $ 229,733   $ 211,860   $ 129,058   $ 154,184Netincomefromcontinuingoperations   $ 257,573   $ 208,542   $ 205,876   $ 128,362   $ 148,429

Lossfromdiscontinuedoperations(1)   $ —   $ —   $ —   $ (9,045)   $ (139,146)Netincome   $ 257,573   $ 208,542   $ 205,876   $ 119,317   $ 9,283Netincome(loss)pershare-basic:           Continuingoperations   $ 1.56   $ 1.27   $ 1.27   $ 0.79   $ 0.91Discontinuedoperations   $ —   $ —   $ —   $ (0.06)   $ (0.85)

Netincomepershare-basic   $ 1.56   $ 1.27   $ 1.27   $ 0.73   $ 0.06

NetIncome(loss)pershare-diluted:                    Continuingoperations   $ 1.52 $ 1.23   $ 1.24   $ 0.77   $ 0.89Discontinuedoperations   $ —   $ —   $ —   $ (0.05)   $ (0.83)

Netincomepershare-diluted   $ 1.52   $ 1.23   $ 1.24   $ 0.72   $ 0.06

                     

Cashdividendpershare   $ 0.69   $ 0.63   $ 0.57   $ 0.53   $ 0.27                     

Netcashprovidedbyoperatingactivities   $ 305,181   $ 346,261   $ 288,389   $ 185,195   $ 181,463

Netcashusedininvestingactivities(2)   $ (173,345)   $ (128,704)   $ (99,679)   $ (59,975)   $ (48,289)

  March 31,

  2019   2018   2017   2016 (3)   2015 (3)

Consolidated balance sheet data           Cashandcashequivalents   $ 604,516   $ 641,947   $ 547,533   $ 519,195   $ 533,380Totalassets   $ 2,024,124   $ 1,743,157   $ 1,498,677   $ 1,324,147   $ 1,426,680Totalshareholders'equity   $ 1,176,339   $ 1,050,557   $ 856,111   $ 759,948   $ 758,134

_______________________________________________________________________________

(1) OnDecember28,2015,wedivestedourLifesizevideoconferencingbusinessand,asaresult,wehavereflectedtheLifesizevideoconferencingbusinessasdiscontinuedoperationsinourconsolidatedstatementsofoperationsdataaboveforallperiodsnoted.Historicalcashflowsfromdiscontinuedoperationswerenotmaterialandareincludedinthecashflowdataabove.

(2) ThelineitempreviouslycalledChangeinrestrictedcashhasbeeneliminatedfromthestatementsofcashflowsandinsteadrestrictedcashhasbeenincludedinthecash,cashequivalentsandrestrictedcashlineitemstoconformtotheconsolidatedstatementsofcashflowsforfiscalyear2019duetotheadoptionofASU2016-18.Theimpactwasnotmaterial.

(3) TheaboveconsolidatedcashandcashequivalentsexcludeLifesizevideoconferencingbusiness.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statementsthat involve risks and uncertainties. Our actual results could differ materially from those anticipated in these statements as a result of certain factors,including those set forth above in Item 1A, Risk Factors, and below in Item 7A, Quantitative and Qualitative Disclosures about Market Risk. Pleaseread the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements andrelated notes included under Item 8 of this Annual Report on Form 10-K.

Overview of Our Company

Logitechisaworldleaderindesigning,manufacturingandmarketingproductsthathelpconnectpeopletodigitalandcloudexperiences.Morethan35yearsago,LogitechcreatedproductstoimproveexperiencesaroundthepersonalPCplatform,andtodayitisamulti-brand,multi-categorycompanydesigningproductsthatenablebetterexperiencesconsuming,sharingandcreatinganydigitalcontentsuchasmusic,gaming,videoandcomputing,whetheritisonacomputer,mobiledeviceorinthecloud.Logitech'sbrandsincludeLogitech,Jaybird,UltimateEars,LogitechG,ASTROGamingandBlueMicrophones.

Ourproductsparticipateinfivelargemarketopportunities:Creativity&Productivity,Gaming,VideoCollaboration,MusicandSmartHome.Wesellourproductstoabroadnetworkofdomesticandinternationalcustomers,includingdirectsalestoretailersande-tailers,andindirectsalesthroughdistributors.Ourworldwidechannelnetworkincludesconsumerelectronicsdistributors,retailers,massmerchandisers,specialtystores,computerandtelecommunicationsstores,value-addedresellersandonlinemerchants.

Fromtimetotime,wemayseektopartnerwithoracquirewhenappropriate,companiesthathaveproducts,personnel,andtechnologiesthatcomplementourstrategicdirection.Wecontinuallyreviewourproductofferingsandourstrategicdirectioninlightofourprofitabilitytargets,competitiveconditions,changingconsumertrendsandtheevolvingnatureoftheinterfacebetweentheconsumerandthedigitalworld.

OnAugust21,2018,weacquiredallequityinterestsinBlueMicrophonesHoldingCorporation(BlueMicrophones)foratotalconsiderationof$134.8millionincash(theBlueMicrophonesAcquisition),whichincludedaworkingcapitaladjustmentandrepaymentofdebtonbehalfofBlueMicrophones.BlueMicrophonesisaleadingaudiomanufacturerthatdesignsandproducesmicrophones,headphones,recordingtools,andaccessoriesforaudioprofessionals,musiciansandconsumers.TheBlueMicrophonesAcquisitionsupplementsourproductportfolio.

OnAugust11,2017,weacquiredcertainassetsandliabilitiesconstitutingtheASTROGamingbusiness(ASTRO)fromAGAcquisitionCorporationforapurchasepriceof$85.0millionincash(theASTROAcquisition).ASTROisaleadingconsolegamingaccessorybrandwithahistoryofproducingaward-winningheadsetsforprofessionalgamersandenthusiasts.ASTROprovidesastronggrowthplatformintheconsolegamingaccessoriesmarket.

Summary of Financial Results

Ourtotalsalesforfiscalyear2019increased9%incomparisontofiscalyear2018.Thegrowthwasbroad-basedacrossourregionsandacrossmostofourproductcategories.TheresultsofoperationsforBlueMicrophoneshavebeenincludedinourconsolidatedstatementsofoperationsfromtheacquisitiondate.Forfiscalyear2019,BlueMicrophonescontributedapproximately2percentagepointsofthesalesgrowthrate.

Salesforfiscalyear2019increased6%,5%and17%intheAmericas,EMEAandAsiaPacific,respectively.

Grossmarginincreasedby180basispointsto37.2%duringfiscalyear2019,comparedtofiscalyear2018.Theincreaseingrossmarginwasprimarilydrivenbyfavorableproductmixandcostreductions.Inaddition,extracostsfromthetransitionofthedistributioncenterinNorthAmericainthethirdquarteroffiscalyear2018negativelyaffectedthegrossmargininfiscalyear2018.

Operatingexpensesforfiscalyear2019were$773.8million,or27.8%ofsales,comparedto$679.5million,or26.5%ofsales,forfiscalyear2018.Theincreaseinoperatingexpenseswasprimarilydrivenby:$47.8millionhigherpersonnel-relatedcostduetorestructuringchargesinthecurrentperiod,increasedperformance-basedvariablecompensationandadditionalheadcountfrombusinessacquisitions;$32.6millionhigherthird-partycosts,primarilyadvertisingandmarketingexpensestosupportournewproductintroductionsandnewmarket

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opportunities;$5.0millionhigheramortizationofintangibleassetsfromthebusinessacquisitions;anda$4.9millionnon-recurringcreditforchangeinfairvalueofcontingentconsiderationfromanacquisitionrecordedinfiscalyear2018.

Netincomeforfiscalyear2019was$257.6million,comparedto$208.5millionforfiscalyear2018.

Trends in Our Business

Ourstrategyfocusesonfivelargemulti-categorymarketopportunitiesincludingCreativity&Productivity,Gaming,VideoCollaboration,MusicandSmartHome.Weseeopportunitiestodelivergrowthwithproductsinallthesemarkets.Thefollowingdiscussionrepresentskeytrendsspecifictoourmarketopportunities.

Trends Specific to Our Five Market Opportunities

Creativity & Productivity: AlthoughnewPCshipmentscontinuetobeweak,theinstalledbaseofPCusersremainslarge.WebelievethatinnovativePCperipherals,suchasourmiceandkeyboards,canrenewthePCusageexperience,thusprovidinggrowthopportunities.Increasingadoptionofvariouscloud-basedapplicationshasledtomultiplenewconsumerusecases,whichweareaddressingwithourinnovativeproductportfolio.TheincreasingpopularityofstreamingandbroadcastingprovidesadditionalgrowthopportunitiesforourWebcamproducts. Smallermobilecomputingdevices,suchastablets,havecreatednewmarketsandusagemodelsforperipheralsandaccessories.Weofferanumberofproductstoenhancetheuseofmobiledevices,includingacombobacklitkeyboardcasefortheiPadProandkeyboardfoliosfortheiPadandiPadmini.Infiscalyear2019,wehaveseenarecoveryoftheiPadtabletmarket,andourTablet&OtherAccessoriescategoryhasbenefitedfromtherecoveryalongwithourinnovativeproducts.

Gaming: ThePCgamingandconsolegamingplatformscontinuetoshowstronggrowthasonlinegaming,multi-platformexperiences,andesportsgaingreaterpopularityandgamingcontentbecomesincreasinglymoredemanding.WebelieveLogitechiswellpositionedtobenefitfromthegamingmarketgrowth.WithASTROGaming,wearealsostrengtheningourportfolioinadjacentcategories,suchastheconsolecontrollermarket.

Video Collaboration: Thenearandlong-termstructuralgrowthopportunitiesinthevideocollaborationmarketaresignificantandarealreadyattractingmorecompetition.Videomeetingsareontherise,andcompaniesincreasinglywantlower-cost,cloud-basedsolutions.Wearecontinuingoureffortstocreateandsellinnovativeproductstoaccommodatetheincreasingdemandfrommediumandlarge-sizedmeetingroomstosmall-sizedroomssuchashuddlerooms.Wewillcontinuetoinvestinselectbusiness-specificproducts,targetedproductmarketingandsaleschanneldevelopment.

Music: Themusicmarketgrewduringfiscalyear2019,drivenbygrowingconsumptionofmusicthroughmobiledevicessuchassmartphonesandtablets.Theintegrationofpersonalvoiceassistantshasbecomeincreasinglycompetitiveinthespeakercategories,butthemarketforthird-party,voice-enabledspeakershasnotyetgainedtraction.Moreover,themarketformobilespeakersappearstobematuring,whichledtoadeclineinUltimateEarssalesinfiscalyear2019.Infiscalyear2019,theheadphoneindustrycontinuedtoflourishwithstrongrevenuegrowth.ThelargestgrowthcameinTrueWirelessheadphoneswherethemarkettripledyearoveryearandaddedsubstantialincreasestoaveragesellingprice.Continuedgrowthintheheadphonecategoryisexpectedforthenextseveralyearsasconsumersincreasinglyadoptwirelessheadphonesoverwiredheadphones.WithBlueMicrophones,wearestrengtheningourportfolioinadjacentcategories,suchasthemicrophonesmarket.

Smart Home: Ourremotebusinessdeclinedsubstantiallyinfiscalyear2019astheattachmenttothevoiceassistantsofHarmonyHub-basedremotecontrolswasnotasustainabletrend.Ingeneral,thespaceisunderpressureasthewaypeopleconsumecontentischanging.WewillcontinuetoexploreotherinnovativeexperiencesfortheSmartHomecategory.

Business Seasonality, Product Introductions and Business Acquisitions

WehavehistoricallyexperiencedhighersalesinourthirdfiscalquarterendingDecember31,comparedtootherfiscalquartersinourfiscalyear,primarilyduetotheincreasedconsumerdemandforourproductsduringtheyear-endholidaybuyingseasonandyear-endspendingbyenterprises.Additionally,newproductintroductionsandbusinessacquisitionscansignificantlyimpactsales,productcostsandoperatingexpenses.Productintroductionscanalsoimpactoursalestodistributionchannelsasthesechannelsarefilledwithnewproductinventoryfollowingaproductintroduction,andoftenchannelinventoryofanearliermodelproductdeclinesasthenextrelatedmajorproductlaunchapproaches.Salescanalsobeaffectedwhenconsumersanddistributorsanticipateaproductintroductionorchangesinbusinesscircumstances.However,neitherhistoricalseasonalpatternsnorhistorical

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patternsofproductintroductionsshouldbeconsideredreliableindicatorsofourfuturepatternofproductintroductions,futuresalesorfinancialperformance.

Critical Accounting Estimates

ThepreparationoffinancialstatementsandrelateddisclosuresinconformitywithU.S.GAAPrequiresustomakejudgments,estimates,andassumptionsthataffectreportedamountsofassets,liabilities,salesandexpenses,andthedisclosureofcontingentassetsandliabilities.

Weconsideranaccountingestimatecriticalifit:(i)requiresmanagementtomakejudgmentsandestimatesaboutmattersthatareinherentlyuncertain;and(ii)isimportanttoanunderstandingofourfinancialconditionandoperatingresults.

Webaseourestimatesonhistoricalexperienceandonvariousotherassumptionswebelievetobereasonableunderthecircumstances.Althoughtheseestimatesarebasedonmanagement'sbestknowledgeofcurrenteventsandactionsthatmayimpactusinthefuture,actualresultscoulddifferfromthoseestimates.Managementhasdiscussedthedevelopment,selectionanddisclosureofthesecriticalaccountingestimateswiththeAuditCommitteeoftheBoardofDirectors.

Webelievethefollowingaccountingestimatesaremostcriticaltoourbusinessoperationsandtoanunderstandingofourfinancialconditionandresultsofoperationsandreflectthemoresignificantjudgmentsandestimatesusedinthepreparationofourconsolidatedfinancialstatements.

Accruals for Customer Programs and Product Returns

Werecordaccrualsforcooperativemarketing,customerincentive,pricingprograms(CustomerPrograms)andproductreturns.Theestimatedcostoftheseprogramsisusuallyrecordedasareductionofrevenue.Significantmanagementjudgmentsandestimatesmustbeusedtodeterminethecostoftheseprogramsinanyaccountingperiod.CertainCustomerProgramsrequiremanagementtoestimatethepercentageofthoseprogramswhichwillnotbeclaimedorwillnotbeearnedbycustomersbasedonhistoricalexperienceandonthespecifictermsandconditionsofparticularprograms.Thepercentageofthesecustomerprogramsthatwillnotbeclaimedorearnediscommonlyreferredtoas"breakage".Ifwereceiveaseparatelyidentifiablebenefitfromacustomerandcanreasonablyestimatethefairvalueofthatbenefit,thecostoftheCustomerProgramsisrecognizedinoperatingexpenses.

Cooperative Marketing Arrangements. Weenterintocustomermarketingprogramswithmanyofourcustomers,andwithcertainindirectpartners,allowingcustomerstoreceiveacreditequaltoasetpercentageoftheirpurchasesofourproducts,orafixeddollarcreditforvariousmarketingprograms.Theobjectiveofthesearrangementsistoencourageadvertisingandpromotionaleventstoincreasesalesofourproducts.

Customer Incentive Programs. Customerincentiveprogramsincludeperformance-basedincentivesandconsumerrebates.Weofferperformance-basedincentivestoourcustomersandindirectpartnersbasedonpre-determinedperformancecriteria.Consumerrebatesareofferedfromtimetotimeatourdiscretionfortheprimarybenefitofend-users.

Cooperativemarketingarrangementsandcustomerincentiveprogramsareconsideredvariableconsideration,whichweestimateandrecordasareductiontorevenueatthetimeofsalebasedonnegotiatedterms,historicalexperiences,forecastedincentives,theanticipatedvolumeoffuturepurchases,andinventorylevelsinthechannel.

Pricing Programs. Wehaveagreementswithcertaincustomersthatcontaintermsallowingpriceprotectioncreditstobeissuedintheeventofasubsequentpricereduction.Atourdiscretion,wealsoofferspecialpricingdiscountstocertaincustomers.Specialpricingdiscountsareusuallyofferedonlyforlimitedtimeperiodsorforsalesofselectedproductstospecificindirectpartners.Ourdecisiontomakepricereductionsisinfluencedbyproductlifecyclestage,marketacceptanceofproducts,thecompetitiveenvironment,newproductintroductionsandotherfactors.Accrualsforestimatedexpectedfuturepricingactionsarerecognizedatthetimeofsalebasedonanalysisofhistoricalpricingactionsbycustomerandbyproduct,inventoriesownedbyandlocatedatdistributorsandretailers,currentcustomerdemand,currentoperatingconditions,andotherrelevantcustomerandproductinformation,suchasstageofproductlife-cycle.

Product Returns. Wegrantlimitedrightstoreturnproducts.Returnrightsvarybycustomerandrangefromjusttherighttoreturnthedefectiveproducttostockrotationrightslimitedtoapercentageofsalesapprovedbymanagement.Estimatesofexpectedfutureproductreturnsarerecognizedatthetimeofsalebasedonanalysesof

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historicalreturntrendsbythecustomerandbyproduct,inventoriesownedbyandlocatedatcustomers,currentcustomerdemand,currentoperatingconditions,andotherrelevantcustomerandproductinformation.Uponrecognition,wereducesalesandcostofgoodssoldfortheestimatedreturn.Returntrendsareinfluencedbyproductlifecyclestatus,newproductintroductions,marketacceptanceofproducts,saleslevels,productsell-through,thetypeofcustomer,seasonality,productqualityissues,competitivepressures,operationalpoliciesandprocedures,andotherfactors.Returnratescanfluctuateovertimebutaresufficientlypredictabletoallowustoestimateexpectedfutureproductreturns.

WeapplyabreakageratetoreduceouraccrualsofCustomerProgramsbasedontheestimatedpercentageofthesecustomerprogramsthatwillnotbeclaimedorearned.Thebreakagerateisappliedatthetimeofsale.Significantmanagementjudgmentsandestimatesareusedtodeterminethebreakageoftheprogramsinanyaccountingperiod.

WeregularlyevaluatetheadequacyofouraccrualsforCustomerProgramsandproductreturns.Futuremarketconditionsandproducttransitionsmayrequireustotakeactiontoincreasesuchprograms.Inaddition,whenthevariablesusedtoestimatethesecostschange,orifactualcostsdiffersignificantlyfromtheestimates,wewouldberequiredtorecordincrementalincreasesorreductionstorevenueoroperatingexpenses.

Inventory Valuation

Wemustordercomponentsforourproductsandbuildinventoryinadvanceofcustomerorders.Further,ourindustryischaracterizedbyrapidtechnologicalchange,short-termcustomercommitmentsandrapidchangesindemand.

Werecordinventoriesatthelowerofcostandnetrealizablevalueandrecordwrite-downsofinventoriesthatareobsoleteorinexcessofanticipateddemandornetrealizablevalue.Areviewofinventoryisperformedeachfiscalquarterthatconsidersfactorsincludingthemarketabilityandproductlifecyclestage,productdevelopmentplans,componentcosttrends,historicalsalesanddemandforecastswhichconsidertheassumptionsaboutfuturedemandandmarketconditions.Inventoryonhandwhichisnotexpectedtobesoldorutilizedisconsideredexcess,andwerecognizethewrite-downinthecostofgoodssoldatthetimeofsuchdetermination.Thewrite-downisdeterminedbytheexcessofcostovernetrealizablevalue.Netrealizablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessreasonablypredictablecostsofcompletion,disposalandtransportation.Atthetimeoflossrecognition,newcostbasisperunitandthelower-costbasisforthatinventoryisestablishedandsubsequentchangesinfactsandcircumstanceswouldnotresultinanincreaseinthecostbasis.IfthereisanabruptandsubstantialdeclineindemandforLogitech'sproductsoranunanticipatedchangeintechnologicalorcustomerrequirements,wemayberequiredtorecordadditionalwrite-downsthatcouldadverselyaffectgrossmarginsintheperiodwhenthewrite-downsarerecorded.

Share-Based Compensation Expense

ThegrantdatefairvalueforstockoptionsandstockpurchaserightsisestimatedusingtheBlack-Scholes-Mertonoption-pricingvaluationmodel.Thegrantdatefairvalueofrestrictedstockunits(RSUs)thatvestuponmeetingcertainmarketconditionsisestimatedusingtheMonte-Carlosimulationmethod.Thegrantdatefairvalueoftime-basedRSUsandRSUswithperformanceconditionsiscalculatedbasedontheclosingmarketpriceonthedateofgrant,adjustedbyestimateddividendsyieldpriortovesting.

Ourestimatesofshare-basedcompensationexpenserequireanumberofcomplexandsubjectiveassumptionsincludingourstockpricevolatility,theprobabilityofachievementofthesetperformanceconditions,dividendyield,relatedtaxeffectsandtheselectionofanappropriatefairvaluemodel.Weestimateexpectedsharepricevolatilitybasedonhistoricalvolatilityusingdailypricesoverthetermofoptions,RSUsorpurchaseofferings,asweconsiderhistoricalsharepricevolatilityasmostrepresentativeoffuturevolatility.Thedividendyieldassumptionisbasedonourhistoryandexpectationsoffuturedividendpayouts.

Theassumptionsusedincalculatingthefairvalueofshare-basedcompensationexpenseandrelatedtaxeffectsrepresentourbestestimates,buttheseestimatesinvolveinherentuncertaintiesandtheapplicationofmanagementjudgments.Asaresult,iffactorschangeandweusedifferentassumptions,orifwedecidetouseadifferentvaluationmodel,ourshare-basedcompensationexpensecouldbemateriallydifferentinthefuturefromwhatwehaverecordedinthecurrentperiod,whichcouldmateriallyaffectourresultsofoperations.

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Accounting for Income Taxes

Weoperateinmultiplejurisdictionsandourprofitsaretaxedpursuanttothetaxlawsofthesejurisdictions.Oureffectiveincometaxratemaybeaffectedbythechangesinorinterpretationsoftaxlawsandtaxagreementsinanygivenjurisdiction,utilizationofnetoperatinglossandtaxcreditcarryforwards,changesingeographicalmixofincomeandexpense,andchangesinourassessmentofmatterssuchastheabilitytorealizedeferredtaxassets.Asaresultoftheseconsiderations,wemustestimateincometaxesineachofthejurisdictionsinwhichweoperate.Thisprocessinvolvesestimatingcurrenttaxexposuretogetherwithassessingtemporarydifferencesresultingfromthedifferenttreatmentofitemsfortaxandaccountingpurposes.Thesedifferencesresultindeferredtaxassetsandliabilities,whichareincludedintheconsolidatedbalancesheet.

Weassessthelikelihoodthatourdeferredtaxassetswillberecoveredfromfuturetaxableincome,consideringallavailableevidencesuchashistoricallevelsofincome,expectationsandrisksassociatedwithestimatesoffuturetaxableincomeandongoingprudentandfeasibletaxstrategies.Whenwedeterminethatitisnotmorelikelythannotthatwewillrealizeallorpartofourdeferredtaxassets,anadjustmentischargedtoearningsintheperiodwhensuchdeterminationismade.Likewise,ifwelaterdeterminethatitismorelikelythannotthatallorapartofourdeferredtaxassetswouldberealized,thepreviouslyprovidedvaluationallowancewouldbereversed.

Wemakecertainestimatesandjudgmentsabouttheapplicationoftaxlaws,theexpectedresolutionofuncertaintaxpositionsandothermatterssurroundingtherecognitionandmeasurementofuncertaintaxbenefits.Intheeventthatuncertaintaxpositionsareresolvedforamountsdifferentthanourestimates,ortherelatedstatutesoflimitationsexpirewithouttheassessmentofadditionalincometaxes,wewillberequiredtoadjusttheamountsoftherelatedassetsandliabilitiesintheperiodinwhichsucheventsoccur.Suchadjustmentsmayhaveamaterialimpactonourincometaxprovisionandourresultsofoperations.

Goodwill Impairment Analysis

WeconductagoodwillimpairmentanalysisannuallyatDecember31ormorefrequentlyifindicatorsofimpairmentexistorifadecisionismadetosellorexitabusiness.RefertoNote11totheconsolidatedfinancialstatementsincludedinthisAnnualReportonForm10-Kforthedisclosures.Significantjudgmentsareinvolvedindeterminingifanindicatorofimpairmenthasoccurred.Suchindicatorsmayincludedeteriorationingeneraleconomicconditions,negativedevelopmentsinequityandcreditmarkets,adversechangesinthemarketsinwhichanentityoperates,increasesininputcoststhathaveanegativeeffectonearningsandcashflows,atrendofnegativeordecliningcashflows,adeclineinactualorplannedrevenueorearningscomparedwithactualandprojectedresultsofrelevantpriorperiods,orotherrelevantentity-specificeventssuchaschangesinmanagement,keypersonnel,strategyorcustomers,contemplationofbankruptcy,orlitigation.Thefairvaluethatcouldberealizedinanactualtransactionmaydifferfromthatusedtoevaluatetheimpairmentofgoodwill.

Inreviewinggoodwillforimpairment,wehavetheoptiontofirstassessqualitativefactorstodeterminewhethertheexistenceofeventsorcircumstancesleadstoadeterminationthatitismorelikelythannot(greaterthan50%)thattheestimatedfairvalueofareportingunitislessthanitscarryingamount.FortheyearendedMarch31,2019,weelectedtoperformaqualitativeassessmentanddeterminedthatimpairmentwasnotmorelikelythannotandnofurtheranalysiswasrequired.Wealsomayelectnottoperformthequalitativeassessmentand,instead,proceeddirectlytothequantitativeimpairmenttest.Theultimateoutcomeofthegoodwillimpairmentreviewforareportingunitshouldbethesamewhetheranentitychoosestoperformthequalitativeassessmentorproceedsdirectlytothequantitativeimpairmenttest.Goodwillisallocatedamongandevaluatedforimpairmentatthereportingunitlevel,whichisdefinedasanoperatingsegmentoronelevelbelowanoperatingsegment.Wecurrentlyhaveonlyonereportingunit.

Product Warranty Accrual

Weestimatethecostofproductwarrantiesatthetimetherelatedrevenueisrecognizedbasedonhistoricalandprojectedwarrantyclaimrates,historicalandprojectedcosts,andknowledgeofspecificproductfailuresthatareoutsideofourtypicalexperience.Eachfiscalquarter,wereevaluateestimatestoassesstheadequacyofrecordedwarrantyliabilities.Whenweexperiencechangesinwarrantyclaimactivityorcostsassociatedwithfulfillingthoseclaims,thewarrantyliabilityisadjustedaccordingly.Ifactualproductfailureratesorrepaircostsdifferfromestimates,revisionstotheestimatedwarrantyliabilitieswouldberequiredandcouldmateriallyaffectourresultsofoperations.

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Business Acquisitions

Accountingforbusinessacquisitionsrequiresustomakesignificantestimatesandassumptions,especiallyattheacquisitiondatewithrespecttotangibleandintangibleassetsacquiredandliabilitiesassumedandpre-acquisitioncontingencies.Weuseourbestestimatesandassumptionstoaccuratelyassignfairvaluetothetangibleandintangibleassetsacquiredandliabilitiesassumedattheacquisitiondate.

Examplesofcriticalestimatesinvaluingcertainintangibleassetsandgoodwillwehaveacquiredincludebutarenotlimitedto:• assumptionsregardingroyaltyraterangeandforecastedrevenuegrowthrate;• assumptionsregardingtheestimatedusefullifeoftheacquiredintangibles;• discountrates.

Unanticipatedeventsandcircumstancesmayoccurthatmayaffecttheaccuracyorvalidityofsuchassumptions,estimatesoractualresults.

Theeconomicusefullifeofthedevelopedtechnologyfromthebusinessacquisitionswasdeterminedbasedonthetechnologycyclerelatedtodevelopedtechnologyofexistingproducts,aswellasthecashflowsovertheforecastedperiods.

Theeconomicusefullifeofthecustomerrelationshipsfromthebusinessacquisitionswasdeterminedbasedonhistoricalcustomerturnoverratesandtheindustrybenchmarks.

Theeconomicusefullifeofthetrademarksandtradenamesfromthebusinessacquisitionswasdeterminedbasedontheexpectedlifeofthetradenamesandthecashflowsanticipatedovertheforecastedperiods

Adoption of New Accounting Pronouncements

RefertoNote2totheconsolidatedfinancialstatementsincludedinthisAnnualReportonForm10-Kforrecentaccountingpronouncementsadoptedandtobeadopted.

Constant Currency

Werefertoournetsalesgrowthratesexcludingtheimpactofcurrencyexchangeratefluctuationsas"constantcurrency"salesgrowthrates.Percentageofconstantcurrencysalesgrowthiscalculatedbytranslatingpriorperiodsalesineachlocalcurrencyatthecurrentperiod’saverageexchangerateforthatcurrencyandcomparingthattocurrentperiodsales.

GivenourglobalsalespresenceandthereportingofourfinancialresultsinU.S.Dollars,ourfinancialresultscouldbeaffectedbysignificantshiftsincurrencyexchangerates.See“ResultsofOperations”forinformationontheeffectofcurrencyexchangeresultsonoursales.IftheU.S.Dollarappreciatesordepreciatesincomparisontoothercurrenciesinfutureperiods,thiswillaffectourresultsofoperationsinfutureperiodsaswell.

Reference to Sales

Theterm“sales”meansnetsales,exceptasotherwisespecifiedandthesalesgrowthdiscussionandsalesgrowthratepercentagesareinU.S.Dollars,exceptasotherwisespecified.

Results of Operations

Net Sales

Duringfiscalyear2019,salesincreased9%incomparisontofiscalyear2018.Ifcurrencyexchangerateshadbeenconstantin2019and2018,ourconstantcurrencysalesgrowthratewouldhavebeen10%.Wegrewacrossmostofourproductcategories,withdouble-digitgrowthinourGaming,VideoCollaboration,Tablet&OtherAccessoriesandAudio&WearablesproductcategoriesandstronggrowthinKeyboards&Combos.SalesdeclinedforMobileSpeakersandSmartHomeproductcategories.BlueMicrophonescontributedapproximately2percentagepointsofthesalesgrowthrate.TheadoptionofTopic606increasedoursalesforfiscalyear2019by$3.7million.

Duringfiscalyear2018,salesincreased16%incomparisontofiscalyear2017.Ifcurrencyexchangerateshadbeenconstantin2018and2017,ourconstantcurrencysalesgrowthratewouldhavebeen13%.Wegrewacrossalmostallourproductcategories.Tablet&OtherAccessories,VideoCollaboration,Gaming,andSmart

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Homegrewdoubledigits,withGamingcontributingmorethan8percentagepointsofthesalesgrowthrateduringtheyear,includingapproximately2percentagepointscontributedbyASTRO.

Sales Denominated in Other Currencies

AlthoughourfinancialresultsarereportedinU.S.Dollars,aportionofoursaleswasgeneratedincurrenciesotherthantheU.S.Dollar,suchastheEuro,ChineseRenminbi,JapaneseYen,CanadianDollar,TaiwanDollar,BritishPoundandAustralianDollar.Foreachofthefiscalyears2019,2018and2017,50%ofoursalesweredenominatedincurrenciesotherthantheU.S.Dollar.

Sales by Region

Thefollowingtablepresentsthechangeinsalesbyregionforfiscalyear2019comparedwithfiscalyear2018,andfiscalyear2018comparedwithfiscalyear2017:

  2019 vs. 2018   2018 vs. 2017

    SalesGrowthRate  SalesGrowthRateinConstantCurrency   SalesGrowthRate  

SalesGrowthRateinConstantCurrency

Americas   6%   7%   16%   16%EMEA   5   7   10   4AsiaPacific   17   19   23   22

Americas

Theincreaseinsalesinfiscalyear2019of6%comparedwithfiscalyear2018wasdrivenbygrowthinGaming,VideoCollaboration,Audio&Wearables,KeyboardsandCombos,Tablet&OtherAccessoriesandPCWebcams,partiallyoffsetbysalesdeclinesinMobileSpeakers,SmartHomeandPointingDevices.

Theincreaseinsalesinfiscalyear2018of16%comparedwithfiscalyear2017wasdrivenbygrowthinPointingDevices,Tablet&OtherAccessories,VideoCollaboration,Gaming,andSmartHome.

EMEA

Theincreaseinsalesinfiscalyear2019of5%comparedwithfiscalyear2018wasdrivenbyseveralofourproductcategories,withgrowthinVideoCollaboration,Gaming,PointingDevicesandTablet&OtherAccessories,partiallyoffsetbysalesdeclinesinMobileSpeakersandSmartHome.

Theincreaseinsalesinfiscalyear2018of10%comparedwithfiscalyear2017wasdrivenbyseveralofourproductcategories,withgrowthinVideoCollaboration,Gaming,andSmartHome,partiallyoffsetbyPointingDevicesandAudio&Wearables.

Asia Pacific

Theincreaseinsalesinfiscalyear2019of17%comparedwithfiscalyear2018wasprimarilydrivenbysalesincreasesinGaming,VideoCollaboration,Keyboard&CombosandPointingDevices,offsetbysalesdeclinesinMobileSpeakers.

Theincreaseinsalesinfiscalyear2018of23%comparedwithfiscalyear2017wasprimarilydrivenbysalesincreasesinPointingDevices,VideoCollaboration,MusicandGaming.

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Sales by Product Categories

Salesbyproductcategoriesforfiscalyears2019,2018and2017wereasfollows(Dollarsinthousands):

  Years Ended March 31,   Change

  2019   2018   2017   2019 vs. 2018   2018 vs. 2017PointingDevices   $ 536,890   $ 516,637   $ 501,562   4%   3%Keyboards&Combos   536,619   498,472   480,312   8   4PCWebcams   121,282   112,147   107,087   8   5Tablet&OtherAccessories   128,315   107,942   76,879   19   40VideoCollaboration   259,521   182,717   127,009   42   44MobileSpeakers   230,378   314,817   301,021   (27)   5Audio&Wearables   277,429   252,330   246,390   10   2Gaming   648,130   491,995   314,362   32   57SmartHome   49,344   89,373   65,510   (45)   36Other(1)   414   433   1,295   (4)   (67)TotalSales   $ 2,788,322   $ 2,566,863   $ 2,221,427   9   16

(1) Othercategoryincludesproductswhichwecurrentlyintendtophaseout,orhavealreadyphasedout,becausetheyarenolongerstrategictoourbusiness.

Sales by Product Categories:

Creativity & Productivity market:

Pointing Devices

OurPointingDevicescategorycomprisesPCandMac-relatedmiceincludingtrackballs,touchpadsandpresentationtools.

Duringfiscalyear2019,PointingDevicessalesincreased4%,comparedtofiscalyear2018.Theincreasewasprimarilydrivenbytheincreasesinsalesofcordlessmiceandpresentationtools.TheincreaseincordlessmicewasleadbystrongcontributionfromtheMXfamilyofpremiumcordlessmice,includingtheVerticalWirelessMouseintroducedinthesecondquarteroffiscalyear2019aswellascontinuedperformanceforMXMaster2SWirelessMouseandB220SilentMouse.

Duringfiscalyear2018,PointingDevicessalesincreased3%,comparedtofiscalyear2017.Theincreasewasprimarilydrivenbytheincreasesinsalesofcordlessmice,trackballandpresentationtools,partiallyoffsetbyadecreaseinthesalesofcordedmice.

Keyboards & Combos

OurKeyboards&ComboscategorycomprisesPCkeyboards,livingroomkeyboardsandkeyboard/micecomboproducts.

Duringfiscalyear2019,Keyboards&Combossalesincreased8%,comparedtofiscalyear2018.Theincreasewasprimarilydrivenbytheincreasesinsalesofwirelesskeyboard/micecombos,mainlyfromincreasedsalesofourMK540,MK270andMK110wirelesskeyboard/micecombo,andanincreaseinsalesofourwirelessPCkeyboard.

Duringfiscalyear2018,Keyboards&Combossalesincreased4%,comparedtofiscalyear2017.TheincreasewasprimarilydrivenbytheintroductionofCraftcordlesskeyboardandincreasedsalesofourMK270andMK235wirelesskeyboard/micecombo,partiallyoffsetbythedecreasesinsalesoftheMK710wirelesskeyboard/micecomboandK400Pluswirelesskeyboard.

PC Webcams

OurPCWebcamscategorycomprisesPC-basedwebcamstargetedprimarilyatconsumers.

Duringfiscalyear2019,PCWebcamssalesincreased8%,comparedtofiscalyear2018.TheincreasewasprimarilydrivenbytheincreasesinsalesofourHDProWebcamC920and1080ProSteamWebcam.

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Duringfiscalyear2018,PCWebcamssalesincreased5%,comparedtofiscalyear2017.Theincreasewasprimarilydrivenbytheincreasesinsalesofour1080PProStreamWebcam,partiallyoffsetbythedecreaseinsalesofourHDProWebcamC920andHDWebcamC525.

Tablet & Other Accessories

OurTablet&OtherAccessoriescategorycompriseskeyboardsfortabletsandsmartphonesaswellasotheraccessoriesformobiledevices.

Duringfiscalyear2019,Tablet&OtherAccessoriessalesincreased19%,comparedtofiscalyear2018.TheincreasewasprimarilydrivenbytheintroductionsofourSlimFoliokeyboardcasesfortheiPad5th/6thGeneration,education-basedRuggedCombo2,SlimCombokeyboardcasesfortheiPad5th/6thGeneration,Crayon(adigitalpencil)andPOWERED(awirelesschargingdockforiPhone)duringfiscalyear2019.

Duringfiscalyear2018,Tablet&OtherAccessoriessalesincreased40%,comparedtofiscalyear2017.TheincreasewasprimarilydrivenbytheintroductionofSlimFoliokeyboardcasesfortheiPad5thGeneration,SlimCombokeyboardcasesfortheiPadPro,andRuggedCombokeyboardcase,partiallyoffsetbyadecreaseinsalesofCreateandType+keyboardcases.

Gaming market:

Gaming

OurGamingcategorycomprisesgamingmice,keyboards,headsets,gamepads,steeringwheels,simulationcontrollers,consolegamingheadsetsandconsolegamingcontrollers.

Duringfiscalyear2019,Gamingsalesincreased32%,comparedtofiscalyear2018.TheincreasewasprimarilyduetoincreasesinsalesofourcorePCgamingproductsandconsolegamingheadsets,whichbenefitedfromthegrowinggamingmarket,growthineSports,expansionsinnewchannelsandregions,andexpansioninproductportfolios.Theincreaseforfiscalyear2019wasalsodrivenbythefactthattheASTROAcquisitionclosedonAugust11,2017,inthemiddleofourfiscalyear2018secondquarter,resultinginapartialcomparativeperiodimpact.Thegrowthwaspartiallyoffsetbyaslightdeclineinoursimulationproducts.

Duringfiscalyear2018,Gamingsalesincreased57%,comparedtofiscalyear2017.GrowthinGamingsaleswasbroad-based,especiallydrivenbytheASTROAcquisition,thesalesincreasesoftheG29DrivingForcesteeringwheel,theG502ProteusSpectrumgamingmouseandtheG203gamingmouse,andtheintroductionoftheG903gamingmouse.Forfiscalyear2018,ASTROcontributed$54.1milliontosales.

Video Collaboration market:

Video Collaboration

OurVideoCollaborationcategoryincludesLogitech’sConferenceCams,whichcombinesaffordableenterprise-qualityaudioandhighdefinition(HD)1080pvideotobringvideoconferencingtobusinessesofanysize.

Duringfiscalyear2019,VideoCollaborationsalesincreased42%,comparedtofiscalyear2018.TheincreasewasprimarilyduetoincreasesinsalesofourMeetUpandPTZPro2videoconferencecameras,BRIOProWebcamandC925EWebcam,andtheintroductionsofourRallyandRallyUltra-HDPTZConferenceCamerainthethirdquarteroffiscalyear2019.

Duringfiscalyear2018,VideoCollaborationsalesincreased44%,comparedtofiscalyear2017.TheincreasewasprimarilyduetotheintroductionsofMeetUpandPTZPro2videoconferencecamerasandincreasesinsalesofourLogitechGroupconferencecamera,C930eandBrio4KProwebcams.ThesalesincreasewaspartiallyoffsetbyadecreaseinsalesofourPTZProvideoconferencecamera.

Music market:

Mobile Speakers

OurMobileSpeakerscategorycomprisesportablewirelessBluetoothandWi-Fispeakers.

Duringfiscalyear2019,MobileSpeakerssalesdecreased27%,comparedtofiscalyear2018.ThedecreasewasprimarilyduetodecreasesinsalesofourexistingUltimateEarsspeakers.ThedecreasewaspartiallyoffsetbysalesfromtheintroductionsofourUltimateEarsMEGABOOM3andBOOM3mobilespeakersinthesecondquarteroffiscalyear2019.

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Duringfiscalyear2018,MobileSpeakerssalesincreased5%,comparedtofiscalyear2017.TheincreasewasprimarilyduetotheincreasesinsalesoftheUltimateEarsWONDERBOOMproductandtheintroductionsoftheUltimateEarsBLASTandMEGABLAST,whichwerebothreleasedinthethirdquarteroffiscalyear2018.ThesalesincreasewaspartiallyoffsetbyadecreaseinsalesofourUltimateEarsBOOM2,UltimateEarsMEGABOOM,andUltimateEarsROLL2.

Audio & Wearables

OurAudio&WearablescategorycomprisesPCspeakers,PCheadsets,in-earheadphones,premiumwirelessaudiowearablesandstudio-qualitymicrophonesforprofessionalsandconsumers.

Duringfiscalyear2019,Audio&Wearablessalesincreased10%,comparedtofiscalyear2018.TheincreasewasprimarilyduetotheincreaseinsalesofourcordedheadsetsandsalesfromproductsasaresultoftheBlueMicrophonesAcquisition(seeNote3totheconsolidatedfinancialstatements),partiallyoffsetbyadecreaseinsalesofourPCspeakersandJaybirdwirelessin-earheadphones.

Duringfiscalyear2018,Audio&Wearablessalesincreased2%,comparedtofiscalyear2017.TheincreasewasprimarilyduetotheincreaseinsalesfromourJaybirdwirelessin-earheadphones,partiallyoffsetbyadecreaseinsalesofourPCspeakers.

Smart Home market:

Smart Home

OurSmartHomecategorymainlycomprisesourHarmonylineofadvancedhomeentertainmentcontrollersandhomesecuritycameras.

Duringfiscalyear2019,SmartHomesalesdecreased45%,comparedtofiscalyear2018.ThedecreasewasprimarilyduetothedecreasesinsalesofourHarmonyremotesandhomesecuritycameras.

Duringfiscalyear2018,SmartHomesalesincreased36%,comparedtofiscalyear2017.TheincreasewasprimarilyduetotheintroductionsofourCircle2wiredandwirelesshomesecuritycameras,inadditiontotheincreaseinsalesofourHarmonyEliteremote,partiallyoffsetbyadecreaseinsalesofourHarmony650remote.

Gross Profit

Grossprofitforfiscalyears2019,2018and2017wasasfollows(Dollarsinthousands):

  Years Ended March 31,

  2019   2018   2017Netsales   $ 2,788,322   $ 2,566,863   $ 2,221,427Grossprofit   $ 1,037,011   $ 909,241   $ 820,041Grossmargin   37.2%   35.4%   36.9%

Grossprofitconsistsofsales,lesscostofgoodssold(whichincludesmaterials,directlaborandrelatedoverheadcosts,costsofmanufacturingfacilities,royalties,costsofpurchasingcomponentsfromoutsidesuppliers,distributioncosts,warrantycosts,customersupport,shippingandhandlingcosts,outsideprocessingcostsandwrite-downofinventories),amortizationofintangibleassetsandpurchaseaccountingeffectoninventory.

Grossmarginincreasedby180basispointsto37.2%duringfiscalyear2019,comparedtofiscalyear2018.Theincreaseingrossmarginwasprimarilydrivenbyfavorableproductmixandcostreductions.Inaddition,extracostsincurredduetothetransitionofthedistributioncenterinNorthAmericainthethirdquarteroffiscalyear2018negativelyaffectedthegrossmargininfiscalyear2018.

Grossmargindecreasedby150basispointsto35.4%duringfiscalyear2018,comparedtofiscalyear2017.ThedecreaseingrossmarginwasprimarilydrivenbyincreasesinCustomerProgramspend,additionalcostsincurredduetothetransitionofthedistributioncenterinNorthAmericainthethirdquarteroffiscalyear2018,andproductmix,partiallyoffsetbyproductcostreductionsandfavorablecurrencyexchangerates.Inaddition,infiscalyear2017,werecordedabenefitof$14.4millionprimarilyduetoachangeinestimatedbreakageattributabletoCustomerProgramaccrualsinEMEA.

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Operating Expenses

Operatingexpensesforfiscalyears2019,2018and2017wereasfollows(Dollarsinthousands):

  Years Ended March 31,

  2019   2018   2017Marketingandselling   $ 488,263   $ 435,489   $ 379,641%ofsales   17.5%   17.0%   17.1%

Researchanddevelopment   161,230   143,760   130,525%ofsales   5.8%   5.6%   5.9%

Generalandadministrative   98,732   96,353   100,270%ofsales   3.5%   3.8%   4.5%

Amortizationofintangibleassetsandacquisition-relatedcosts   14,290   8,930   5,814%ofsales   0.5%   0.3%   0.3%

Changeinfairvalueofcontingentconsiderationforbusinessacquisition   —   (4,908)   (8,092)%ofsales   —%   (0.2)%   (0.4)%

Restructuringcharges(credits),net   11,302   (116)   23%ofsales   0.4%   —%   —%Totaloperatingexpenses   $ 773,817   $ 679,508   $ 608,181

%ofsales   27.8%   26.5%   27.4%

Theincreaseintotaloperatingexpensesduringfiscalyear2019,comparedtofiscalyear2018,wasduetoincreasesinmarketingandsellingexpenses,researchanddevelopmentexpenses,restructuringcharges,amortizationofintangibleassetsfromthebusinessacquisitions,andacreditfromthechangeinfairvalueofcontingentconsiderationrecordedinfiscalyear2018forabusinessacquisitioncompletedinfiscalyear2017.

Theincreaseintotaloperatingexpensesduringfiscalyear2018,comparedtofiscalyear2017,wasduetoincreasesinmarketingandsellingexpenses,researchanddevelopmentexpenses,amortizationofintangibleassetsfromthebusinessacquisitions,andalowercreditfromthechangeinfairvalueofcontingentconsiderationforbusinessacquisition,partiallyoffsetbythedecreaseingeneralandadministrativeexpenses.

Marketing and Selling

Marketingandsellingexpensesconsistofpersonnelandrelatedoverheadcosts,corporateandproductmarketing,promotions,advertising,tradeshows,technicalsupportforcustomerexperiencesandfacilitiescosts.

Duringfiscalyear2019,marketingandsellingexpensesincreased$52.8million,comparedtofiscalyear2018.Theincreasewasprimarilyduetoanincreaseof$25.4millioninthird-partycostsincludingadvertisingandmarketingexpensestosupportournewproductsandanincreaseof$23.9millioninpersonnel-relatedcostsduetoincreasedheadcount,partlyresultingfromtheBlueMicrophonesAcquisition,andincreasedperformance-basedvariablecompensation.

Duringfiscalyear2018,marketingandsellingexpensesincreased$55.8million,comparedtofiscalyear2017.Theincreasewasprimarilyduetoanincreaseof$30.2millioninexpensesforexternaladvertisingandmarketingandanincreaseof$23.2millioninpersonnel-relatedcostsduetoincreasedheadcountduringthelasttwelvemonthstoexpandourmarketingteamtosupportourincreasedadvertisingandmarketingeffortsforourproducts,includingtheincreasedheadcountresultingfromtheASTROAcquisition.

Research and Development

Researchanddevelopmentexpensesconsistofpersonnelandrelatedoverheadcostsforcontractorsandoutsideconsultants,suppliesandmaterials,equipmentdepreciationandfacilitiescosts,allassociatedwiththedesignanddevelopmentofnewproductsandenhancementsofexistingproducts.

Duringfiscalyear2019,researchanddevelopmentexpensesincreased$17.5million,comparedtofiscalyear2018.Theincreasewasprimarilyduetoanincreaseof$9.6millioninpersonnel-relatedcostsforthedevelopment

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ofnewproductsandincreasedheadcount,partlyresultingfromtheBlueMicrophonesAcquisition,andanincreaseof$5.8millioninthird-partycosts.

Duringfiscalyear2018,researchanddevelopmentexpensesincreased$13.2million,comparedtofiscalyear2017.Theincreasewasprimarilyduetoanincreaseinhigherpersonnel-relatedcostsforthedevelopmentofnewproductsandincreasedheadcountfromtheASTROAcquisition.

General and Administrative

Generalandadministrativeexpensesconsistprimarilyofpersonnelandrelatedoverheadandfacilitiescostsforthefinance,informationsystems,executives,humanresourcesandlegalfunctions.

Duringfiscalyear2019,generalandadministrativeexpensesincreased$2.4million,comparedtofiscalyear2018.Theincreasewasprimarilyduetoanincreaseof$2.8millioninpersonnel-relatedcostsandanincreaseof$1.4millioninthird-partycostsincludingconsultingcosts,partiallyoffsetbyadecreaseof$1.9millionininfrastructurecosts.

Duringfiscalyear2018,generalandadministrativeexpensesdecreased$3.9million,comparedtofiscalyear2017.Thedecreasewasprimarilyduetoadecreaseof$6.8millioninthird-partycosts,includingmainlyconsultingcosts,partiallyoffsetbyanincreaseof$2.6millioninpersonnel-relatedcosts.

Amortization of Intangibles and Acquisition-Related Costs

Amortizationofintangiblesincludedinoperatingexpenseandacquisition-relatedcostsduringfiscalyears2019,2018and2017wereasfollows(inthousands):

  Years Ended March 31,

  2019   2018   2017Amortizationofintangibleassets   $ 12,594   $ 7,518   $ 4,352Acquisition-relatedcosts   1,696   1,412   1,462Total   $ 14,290   $ 8,930   $ 5,814

Amortizationofintangibleassetsconsistsofamortizationofacquiredintangibleassets,includingcustomerrelationshipsandtrademarksandtradenames.Acquisition-relatedcostsincludelegalexpense,duediligencecosts,andotherprofessionalcostsincurredforbusinessacquisitions.

Theincreaseinamortizationofintangibleassetsfromfiscalyear2018to2019wasprimarilyduetotheBlueMicrophonesAcquisitionandtheASTROAcquisition.Theincreaseinamortizationofintangibleassetsfromfiscalyear2018to2017wasprimarilydrivenbytheASTROAcquisition.

Change in Fair Value of Contingent Consideration for Business Acquisition

Thechangeinfairvalueofcontingentconsiderationforbusinessacquisitionduringfiscalyears2018and2017isprimarilyduetolower-than-expectedsalesofJaybirdproducts,andrevisedprojectedsalesofJaybirdproductsduringtheremainingJaybirdAcquisitionearn-outperiod,primarilydrivenbysupplyconstraints,anevolvingproductportfolioandchangesinthecompetitivetargetmarket.

InOctober2017,LogitechandthesellersofJaybirdenteredintoanagreementfully,irrevocablyandunconditionallyreleasingLogitechfromtheearn-outrightsandpaymentsinexchangefor$5.0millionincash.

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Restructuring Charges (Credits)

Thefollowingtablesummarizesrestructuring-relatedactivitiesduringfiscalyears2019,2018and2017fromcontinuingoperations(inthousands):

  Restructuring - Continuing Operations

 Termination

Benefits  Lease Exit

Costs   TotalAccrualbalanceatMarch31,2016   $ 5,907   $ 125   $ 6,032Charges,net   23   —   23Cashpayments   (5,195)   (125)   (5,320)

AccrualbalanceatMarch31,2017   735   —   735Credits,net   (116)   —   (116)Cashpayments   (619)   —   (619)

AccrualbalanceatMarch31,2018   —   —   —Charges,net   11,302   —   11,302Cashpayments   (6,913)   —   (6,913)

AccrualbalanceatMarch31,2019   $ 4,389   $ —   $ 4,389

Duringthefirstquarteroffiscalyear2019,weimplementedarestructuringplantostreamlineandrealignouroverallorganizationalstructureandreallocateresourcestosupportlong-termgrowthopportunities.InJuly2018,theBoardofDirectorsapprovedadditionalcostsunderthisrestructuringplan,totalingpre-taxchargesofapproximately$10.0millionto$15.0million,ofwhich$11.3millionwasrecognizedduringfiscalyear2019.Thetotalchargesconsistedofcashseveranceandotherpersonnelcostsandarepresentedasrestructuringcharges(credits),netintheConsolidatedStatementsofOperations.Weexpecttohavesubstantiallycompletedthisrestructuringwithinthenextthreemonths.

Therestructuring-relatedactivitiesfortheyearsendedMarch31,2018and2017includeactivitiesfromourrestructuringplanimplementedinfiscalyear2016.

Interest Income

Interestincomeforfiscalyears2019,2018and2017wasasfollows(inthousands):

  Years Ended March 31,

  2019   2018   2017InterestIncome   $ 8,375   $ 4,969   $ 1,452

Weinvestinhighlyliquidinstrumentswithanoriginalmaturityofthreemonthsorlessatthedateofpurchase,whichareclassifiedascashequivalents.Theincreasesininterestincomeforfiscalyears2019and2018comparedtothepriorperiodswerebothduetohigheryieldearnedonthoseinvestments.

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Other Income (Expense), Net

Otherincomeandexpenseforfiscalyears2019,2018and2017wasasfollows(inthousands):

  Years Ended March 31,

  2019   2018   2017Investmentincomerelatedtothedeferredcompensationplan   $ 664   $ 1,386   $ 1,343Currencyexchangegain(loss),net   (3,608)   (4,613)   169Other   2,508   790   165Total   $ (436)   $ (2,437)   $ 1,677

Investmentincomerelatedtothedeferredcompensationplanforfiscalyears2019,2018and2017representsearnings,gains,andlossesontradinginvestmentsrelatedtoadeferredcompensationplanofferedbyoneofoursubsidiaries.

Currencyexchangegainsorlossesrelatetobalancesdenominatedincurrenciesotherthanthefunctionalcurrencyinoursubsidiaries,aswellastothesaleofcurrencies,andtogainsorlossesrecognizedoncurrencyexchangeforwardcontracts.Wedonotspeculateincurrencypositions,butwearealerttoopportunitiestomaximizecurrencyexchangegainsandminimizecurrencyexchangelosses.

ThecomponentsofnetperiodicbenefitcostotherthantheservicecostcomponentfortheyearendedMarch31,2019areincludedintheline“Other”aboveasaresultofadoptingASU2017-07effectiveApril1,2018.Theimpacttothecomparativeperiodwasimmaterialandthereforethepriorperiodstatementsofoperationswerenotrevised.

Provision for Income Taxes

Theprovisionforincometaxesandtheeffectiveincometaxrateforfiscalyears2019,2018and2017wereasfollows(Dollarsinthousands):

  Years Ended March 31,

  2019   2018   2017Provisionforincometaxes   $ 13,560   $ 23,723   $ 9,113Effectiveincometaxrate   5.0%   10.2%   4.2%

Thechangeintheeffectiveincometaxratebetweenfiscalyears2019and2018wasprimarilyduetothemixofincomeandlossesinthevarioustaxjurisdictionsinwhichweoperateandprovisionalincometaxaccountingimpactfromtheenactmentofH.R.1,alsoknownasthe"TaxCutsandJobsAct"(theTaxAct)intheUnitedStatesonDecember22,2017.TheTaxActpermanentlyreducedthecorporateincometaxrateintheUnitedStatesfrom35%to21%.Werecordedaprovisionalincometaxchargeof$21.7million,netofvaluationallowanceagainsttaxcredits,infiscalyear2018toremeasurethedeferredtaxeffectsat21%.Furthermore,werecognized$10.1millionand$13.4millionofexcesstaxbenefits,netofshortfalls,infiscalyear2019and2018,respectively.Inthesameperiods,thereweretaxbenefitsof$2.9millionand$8.3million,respectively,fromthereversalofuncertaintaxpositionsfromtheexpirationofstatutesoflimitations.

Thechangeintheeffectiveincometaxratebetweenfiscalyears2018and2017wasprimarilydrivenbyprovisionalimpactsinfiscalyear2018fromtheTaxActdescribedabove.Werecognized$13.4millionofexcesstaxbenefits,netofshortfalls,infiscalyear2018aftertheadoptionofASU2016-09.Furthermore,therewasataxbenefitof$8.3millioninfiscalyear2018relatedtothereversalofuncertaintaxpositionsresultingfromtheexpirationofstatutesoflimitations,comparedto$15.4millioninfiscalyear2017.

AsofMarch31,2019and2018,thetotalamountsofunrecognizedtaxbenefitsduetouncertaintaxpositionswere$76.5millionand$69.1million,respectively,allofwhichwouldaffecttheeffectiveincometaxratesifrecognized.

AsofMarch31,2019and2018,wehad$36.4millionand$35.0million,respectively,innon-currentincometaxespayable,includinginterestandpenalties,relatedtoourincometaxliabilityforuncertaintaxpositions.Werecognized$0.6million,$0.6millionand$0.7millionininterestandpenaltiesrelatedtounrecognizedtaxpositions

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inincometaxexpenseduringfiscalyears2019,2018and2017,respectively.AsofMarch31,2019and2018,wehad$2.5millionand$2.3million,respectively,ofaccruedinterestandpenaltiesrelatedtouncertaintaxpositions.

WefileSwissandforeigntaxreturns.WereceivedfinaltaxassessmentsinSwitzerlandthroughfiscalyear2017.ForotherforeignjurisdictionssuchastheUnitedStates,wearegenerallynotsubjecttotaxexaminationsforyearspriortofiscalyear2016.Weareunderexaminationandhavereceivedassessmentnoticesinforeigntaxjurisdictions.Iftheexaminationsareresolvedunfavorably,thereisapossibilitythattheymayhaveamaterialnegativeimpactonourresultsofoperations.

Liquidity and Capital Resources

Cash Balances, Available Borrowings, and Capital Resources

AsofMarch31,2019,wehadcashandcashequivalentsof$604.5million,comparedwith$641.9millionasofMarch31,2018.Ourcashandcashequivalentsconsistofbankdemanddepositsandshort-termtimedeposits,ofwhich77%isheldinSwitzerlandand10%isheldinChina(includingHongKong).Wedonotexpecttoincuranymaterialadversetaximpact,exceptforwhathasbeenrecognized,orbesignificantlyinhibitedbyanycountryinwhichwedobusinessfromtherepatriationoffundstoSwitzerland,ourhomedomicile.

AsofMarch31,2019,ourworkingcapitalwas$632.6million,comparedwithworkingcapitalof$597.4millionasofMarch31,2018.Theincreaseinworkingcapitaloverfiscalyear2018wasprimarilyduetohigheraccountsreceivable,net,higherinventoriesandothercurrentassets,andlowerbalanceofaccountspayable,partiallyoffsetbylowerbalancesofcashandcashequivalentsandhigheraccruedandothercurrentliabilities.

Wehadseveraluncommitted,unsecuredbanklinesofcreditaggregatingto$80.6millionasofMarch31,2019.Therearenofinancialcovenantsundertheselinesofcreditwithwhichwemustcomply.AsofMarch31,2019,wehadoutstandingbankguaranteesof$34.3millionundertheselinesofcredit.

ThefollowingtablepresentsselectedfinancialinformationandstatisticsasofMarch31,2019,2018and2017(Dollarsinthousands):

  March 31,

  2019   2018   2017Accountsreceivable,net   $ 383,309   $ 214,885   $ 185,179Accountspayable   $ 283,922   $ 293,988   $ 274,805Inventories   $ 293,495   $ 259,906   $ 253,401Dayssalesinaccountsreceivable(DSO)(Days)(1)   55   33   33Daysaccountspayableoutstanding(DPO)(Days)(2)   65   70   79Inventoryturnover(ITO)(x)(3)   5.3   5.9   4.9

______________________________

(1) DSOisdeterminedusingendingaccountsreceivable,netasofthemostrecentquarter-endandsalesforthemostrecentquarter.(2) DPOisdeterminedusingendingaccountspayableasofthemostrecentquarter-endandcostofgoodssoldforthemostrecentquarter.(3) ITOisdeterminedusingendinginventoriesandtheannualizedcostofgoodssold(basedoncostofgoodssoldforthemostrecentquarter).

DSOasofMarch31,2019increasedby22daysto55days,ascomparedto33daysasofMarch31,2018.TheadoptionofTopic606negativelyimpactedourDSOfortheyearendedMarch31,2019by18days,mainlyasaresultofchangesinthebalancesheetpresentationofcertainreservebalancespreviouslyshownnetwithinaccountsreceivablewhicharenowpresentedasaccruedandothercurrentliabilities.TheadoptionofTopic606didnothaveanimpactoverthetotalcashflowsfromoperating,investingorfinancingactivities.RefertoNote2totheconsolidatedfinancialstatementsforthedetailsoftheadoptionimpactofTopic606.TimingofsalesalsoincreasedDSOby4days.DSOasofMarch31,2018wasconsistentwithDSOasofMarch31,2017.

DPOasofMarch31,2019decreased5days,comparedtoMarch31,2018,primarilyduetothetimingofpurchases.DPOasofMarch31,2018decreased9days,comparedtoMarch31,2017,primarilyduetothetimingofpurchasesandpayments.

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ITOasofMarch31,2019waslowercomparedtoMarch31,2018,duetohigherinventoryrelatedtonewproductintroductionsandinventoryfromtheBlueMicrophonesAcquisition.ITOasofMarch31,2018washighercomparedtoMarch31,2017,duetohighersalesgrowth(hencehighercostofgoodssold)thaninventoryincrease.

Ifwearenotsuccessfulinlaunchingandphasinginournewproductslaunchedduringthecurrentfiscalyear,orwearenotabletosellthenewproductsatthepricesplanned,itcouldhaveamaterialimpactonourrevenue,grossprofitmargin,operatingresultsincludingoperatingcashflow,andinventoryturnoverinthefuture.

Duringfiscalyear2019,wegenerated$305.2millionincashfromoperatingactivities.Ourmainsourcesofoperatingcashflowswerefromnetincome,afteraddingbacknon-cashexpensesofdepreciation,amortization,andshare-basedcompensationexpense,andfromchangesinoperatingassetsandliabilities.Theincreaseinaccountsreceivable,netwasprimarilydrivenbygrowthandtimingofsales.Thedecreaseinaccountspayablewasprimarilydrivenbythetimingofpurchases.Theincreaseininventoriesnetofeffectofacquisitionwasprimarilydrivenbynewproductintroductions.Theincreaseinaccruedandotherliabilitieswasprimarilyduetohigheraccruedpersonnelexpensesandincreaseinwarrantyliabilities.

Netcashusedininvestingactivitieswas$173.3million,primarilydueto$133.8millionofthepurchaseprice(netofcashacquired)forbusinessacquisitions,$35.9millionofpurchasesofproperty,plant,andequipment,and$2.7millionofinvestmentsinprivatelyheldcompanies.

Netcashusedinfinancingactivitieswas$159.1million,primarilydueto$114.0millionofcashdividendspaidduringtheyear,$32.4millionofrepurchasesofourregisteredsharesand$30.8millionoftaxwithholdingsrelatedtonetsharesettlementsofrestrictedstockunits,partiallyoffsetby$18.1millioninproceedsreceivedfromthesaleofsharesuponexerciseofstockoptionsandpurchaserights.

Ourexpendituresforproperty,plantandequipmentduringfiscalyears2019,2018and2017wereprimarilyfortoolingandequipment,computerhardwareandsoftwareandleaseholdimprovements.Ourexpendituresforproperty,plantandequipmentdecreasedduringfiscalyear2019,comparedtofiscalyear2018,primarilyduetoaloweramountoftoolingpurchases.Ourexpendituresforproperty,plantandequipmentincreasedduringfiscalyear2018,comparedtofiscalyear2017,primarilyduetoahigheramountoftoolingpurchases.

Ourpaymentsforacquisitions,netofcashacquired,duringfiscalyear2019wereprimarilyfortheBlueMicrophonesAcquisition.Ourpaymentsforacquisitions,netofcashacquired,duringfiscalyear2018,wereprimarilyfortheASTROAcquisition(referto"Note3-BusinessAcquisitions"totheconsolidatedfinancialstatements).Ourpaymentsforacquisitions,netofcashacquired,duringfiscalyear2017,werefortheJaybirdAcquisitionandtheSaitekAcquisition.

Thepurchasesandsalesoftradinginvestmentsduringfiscalyears2019,2018and2017representmutualfundactivitydirectedbyparticipantsinadeferredcompensationplanofferedbyoneofoursubsidiaries.ThemutualfundsareheldbyaRabbiTrust.

Duringfiscalyear2019,therewasa$10.1millionlossofcurrencytranslationexchangerateeffectoncashandcashequivalents,comparedtoagainof$4.7millionofcurrencytranslationexchangerateeffectduringfiscalyear2018,anda$5.4millionlossofcurrencytranslationexchangerateeffectduringfiscalyear2017.Currencytranslationexchangeeffectsduringfiscalyear2019wereprimarilyduetotheweakeningofEuroandChineseRenminbiversustheU.S.Dollarby9%and7%,respectively,infiscalyear2019.Currencytranslationexchangeeffectsduringfiscalyear2018wereprimarilyduetothestrengtheningoftheEuroversustheU.S.Dollarby15%infiscalyear2018.

Cash Outlook

Ourprincipalsourcesofliquidityareourcashandcashequivalents,cashflowgeneratedfromoperationsand,toamuchlesserextent,capitalmarketsandborrowings.Ourfutureworkingcapitalrequirementsandcapitalexpendituresmayincreasetosupportinvestmentsinproductinnovationsandgrowthopportunitiesortoacquireorinvestincomplementarybusinesses,products,services,andtechnologies.

InMay2019,theBoardofDirectorsrecommendedthattheCompanypayCHF121.8million($122.4millionbasedontheexchangerateonMarch31,2019)incashdividendsforfiscalyear2019.Infiscalyear2019,wepaidacashdividendofCHF110.7million(U.S.Dollaramountof$114.0million)outofretainedearnings.Infiscalyear2018,wepaidacashdividendofCHF100.0million(U.S.Dollaramountof$104.2million)outofretainedearnings.Duringfiscalyear2017,wepaidacashdividendofCHF90.2million(U.S.Dollaramountof$93.1million)outofretainedearnings.

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InMarch2017,ourBoardofDirectorsapprovedanewsharebuybackprogram,whichauthorizesustoinvestupto$250.0milliontopurchaseourownshares,followingtheexpirationdateofthe2014sharebuybackprogram.ThenewprogramwasapprovedbytheSwissTakeoverBoardinMay2017.Althoughweenterintotradingplansforsystematicrepurchases(e.g.10b5-1tradingplans)fromtimetotime,oursharebuybackprogramprovidesuswiththeopportunitytomakeopportunisticrepurchasesduringperiodsoffavorablemarketconditionsandisexpectedtoremainineffectforaperiodofthreeyears.Sharesmayberepurchasedfromtimetotimeontheopenmarket,throughblocktradesorotherwise.Opportunisticpurchasesmaybestartedorstoppedatanytimewithoutpriornoticedependingonmarketconditionsandotherfactors.AsofMarch31,2019,theremainingamountthatmayberepurchasedundertheprogramis$187.4million.

Forovertenyears,wehavegeneratedpositivecashflowsfromouroperatingactivities,includingcashfromoperationsof$305.2million,$346.3millionand$288.4millionduringfiscalyears2019,2018,and2017,respectively.Ifwedonotgeneratesufficientoperatingcashflowstosupportouroperationsandfutureplannedcashrequirements,ouroperationscouldbeharmedandouraccesstocreditfacilitiescouldberestrictedoreliminated.However,webelievethatthetrendofourhistoricalcashflowgeneration,ourprojectionsoffutureoperationsandouravailablecashbalanceswillprovidesufficientliquiditytofundouroperationsforatleastthenext12months.

Ourothercontractualobligationsandcommitmentsthatrequirecasharedescribedinthefollowingsections.

Contractual Obligations and Commitments

ThefollowingtablesummarizesourcontractualobligationsandcommitmentsasofMarch31,2019(inthousands):

    

Payments Due by Period

  March 31, 2019 <1 year   1-3 years   3-5 years   >5 yearsInventorypurchasecommitments   $ 227,609   $ 227,609   $ —   $ —   $ —Capitalpurchasecommitments   12,132   12,132   —   —   —Expectedcontributiontoemployeebenefitplan   5,456   5,456   *   *   *Operatingleasesobligations   39,620   11,849   17,884   6,241   3,646Total   $ 284,817   $ 257,046   $ 17,884   $ 6,241   $ 3,646

*Expectedcontributiontoemployeebenefitplan:Commitmentsundertheretirementplansrelatetoexpectedcontributionstobemadetoourdefinedbenefitplansforthenextyearonly.Wefundourpensionplanssothatwemeetatleasttheminimumcontributionrequirements,asestablishedbylocalgovernment,fundingandtaxingauthorities.Expectedcontributionsandpaymentstoourdefinedbenefitpensionplansandnon-retirementpost-employmentbenefitplansbeyondoneyearareexcludedfromthecontractualobligationstablebecausetheyaredependentonnumerousfactorsthatmayresultinawiderangeofoutcomesandthusareimpracticaltoestimate.Formoreinformationonourdefinedbenefitpensionplansandnon-retirementpost-employmentbenefitplans,seeNote5totheConsolidatedFinancialStatementsinItem8,whichisincorporatedhereinbyreference.

Purchase Commitments

AsofMarch31,2019,wehavenon-cancelablepurchasecommitmentsof$227.6millionforinventorypurchasesmadeinthenormalcourseofbusinessfromoriginaldesignmanufacturers,contractmanufacturersandothersuppliers,themajorityofwhichareexpectedtobefulfilledduringthefirsttwoquartersoffiscalyear2020.Werecordedaliabilityforfirm,non-cancelable,andunhedgedinventorypurchasecommitmentsinexcessofanticipateddemandornetrealizablevalueconsistentwithourvaluationofexcessandobsoleteinventory.AsofMarch31,2019,theliabilityforthesepurchasecommitmentswas$14.1millionandisrecordedinaccruedandothercurrentliabilitiesandisnotincludedintheprecedingtable.Wehavefirmpurchasecommitmentsof$12.1millionforcapitalexpenditures,primarilyrelatedtocommitmentsfortooling,computerhardwareandleaseholdimprovements.Weexpecttocontinuemakingcapitalexpendituresinthefuturetosupportproductdevelopmentactivitiesandongoingandexpandedoperations.Althoughopenpurchasecommitmentsareconsideredenforceableandlegallybinding,thetermsgenerallyallowustheoptiontorescheduleandadjustourrequirementsbasedonbusinessneedspriortodeliveryofgoods.

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Operating Leases Obligation

Weleasefacilitiesunderoperatingleases,certainofwhichrequireustopaypropertytaxes,insuranceandmaintenancecosts.Operatingleasesforfacilitiesaregenerallyrenewableatouroptionandusuallyincludeescalationclauseslinkedtoinflation.Theremainingtermsofournon-cancelableoperatingleasesexpireinvariousyearsthrough2030.

Income Taxes Payable

AsofMarch31,2019,wehad$36.4millioninnon-currentincometaxespayable,includinginterestandpenalties,relatedtoourincometaxliabilityforuncertaintaxpositions.Atthistime,weareunabletomakeareasonablyreliableestimateofthetimingofpaymentsinindividualyearsinconnectionwiththesetaxliabilities;therefore,suchamountsarenotincludedinthecontractualobligationtableabove.

Indemnifications

Weindemnifycertainofoursuppliersandcustomersforlossesarisingfrommatterssuchasintellectualpropertydisputesandproductsafetydefects,subjecttocertainrestrictions.Thescopeoftheseindemnitiesvaries,butinsomeinstancesincludesindemnificationfordamagesandexpenses,includingreasonableattorneys'fees.AsofMarch31,2019,noamountshavebeenaccruedforindemnificationprovisions.Wedonotbelieve,basedonhistoricalexperienceandinformationcurrentlyavailable,thatitisprobablethatanymaterialamountswillberequiredtobepaidunderourindemnificationarrangements.

Wealsoindemnifyourcurrentandformerdirectorsandcertainofourcurrentandformerofficers.Certaincostsincurredforprovidingsuchindemnificationmayberecoverableundervariousinsurancepolicies.Weareunabletoreasonablyestimatethemaximumamountthatcouldbepayableunderthesearrangementsbecausetheseexposuresarenotcapped,theobligationsareconditionalinnature,andthefactsandcircumstancesinvolvedinanysituationthatmightarisearevariable.

Off-Balance Sheet Arrangements

Wedonothaveanyoff-balancesheetarrangementsthathave,orarereasonablylikelytohave,acurrentorfutureeffectonourfinancialcondition,changesinfinancialcondition,revenuesorexpenses,resultsofoperations,liquidity,capitalexpendituresorcapitalresourcesthatarematerialtoinvestors.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

Marketriskrepresentsthepotentialforlossduetoadversechangesinthefairvalueoffinancialinstruments.Asaglobalconcern,wefaceexposuretoadversemovementsincurrencyexchangeratesandinterestrates.Theseexposuresmaychangeovertimeasbusinesspracticesevolveandcouldhaveamaterialadverseimpactonourfinancialresults.

Currency Exchange Rates

WereportourresultsinU.S.Dollars.ChangesincurrencyexchangeratescomparedtotheU.S.Dollarcanhaveamaterialimpactonourresultswhenthefinancialstatementsofournon-U.S.subsidiariesaretranslatedintoU.S.Dollars.ThefunctionalcurrencyofouroperationsisprimarilytheU.S.Dollar.CertainoperationsusetheSwissFrancorthelocalcurrencyofthecountryastheirfunctionalcurrencies.Accordingly,unrealizedcurrencygainsorlossesresultingfromthetranslationofnetassetsorliabilitiesdenominatedinothercurrenciestotheU.S.Dollarareaccumulatedinthecumulativetranslationadjustmentcomponentofothercomprehensiveincome(loss)inshareholders'equity.

Weareexposedtocurrencyexchangerateriskaswetransactbusinessinmultiplecurrencies,includingexposurerelatedtoanticipatedsales,anticipatedpurchasesandassetsandliabilitiesdenominatedincurrenciesotherthantheU.S.Dollar.Wetransactbusinessinover30currenciesworldwide,ofwhichthemostsignificanttooperationsaretheEuro,ChineseRenminbi,AustralianDollar,TaiwaneseDollar,BritishPound,BrazilianReal,CanadianDollar,JapaneseYenandMexicanPeso.FortheyearendedMarch31,2019,approximately50%ofoursaleswereinnon-U.S.denominatedcurrencies,with25%ofoursalesdenominatedinEuro.Themixofourcostofgoodssoldandoperatingexpensesbycurrencyaresignificantlydifferentfromthemixofoursales,withalargerportiondenominatedinU.S.DollarandlessdenominatedinEuroandothercurrencies.AstrengtheningU.S.Dollar

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hasamoreunfavorableimpactonoursalesthanthefavorableimpactonouroperatingexpenses,resultinginanadverseimpactonouroperatingresults.

Weenterintocurrencyforwardandswapcontractstoreducetheshort-termeffectsofcurrencyfluctuationsoncertainreceivablesorpayablesdenominatedincurrenciesotherthanthefunctionalcurrenciesofoursubsidiaries.Theseforwardcontractsgenerallymaturewithinonemonth.Thegainsorlossesonthesecontractsarerecognizedinearningsbasedonthechangesinfairvalue.

Ifanadverse10%foreigncurrencyexchangeratechangewasappliedtototalmonetaryassetsandliabilitiesdenominatedincurrenciesotherthanthefunctionalcurrenciesatthebalancesheetdates,itwouldhaveresultedinanadverseeffectonincomebeforeincometaxesofapproximately$7.8millionand$10.0millionasofMarch31,2019and2018,respectively.TheadverseeffectasofMarch31,2019and2018isafterconsiderationoftheoffsettingeffectofapproximately$4.2millionforbothperiodsfromopenforeignexchangecontractsinplaceasofMarch31,2019and2018.

Weenterintocashflowhedgecontractstoprotectagainstexchangerateexposureofforecastedinventorypurchases.Thesehedgingcontractsmaturewithinfourmonths.Gainsandlossesinthefairvalueoftheeffectiveportionofthehedgesaredeferredasacomponentofaccumulatedothercomprehensivelossuntilthehedgedinventorypurchasesaresold,atwhichtimethegainsorlossesarereclassifiedtocostofgoodssold.

IftheU.S.dollarweakenedby10%asofMarch31,2019,theamountrecordedinaccumulatedothercomprehensiveincome(AOCI)relatedtoourforeignexchangecontractsbeforetaxeffectwouldhavebeenapproximately$4.1millionlowerasofMarch31,2019.AsofMarch31,2018,therewerenocurrencyforwardcontractsoutstandingrelatedtoforecastedinventorypurchases.ThechangeinthefairvaluerecordedinAOCIwouldbeexpectedtooffsetacorrespondingforeigncurrencychangeincostofgoodssoldwhenthehedgedinventorypurchasesaresold.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Logitech'sfinancialstatementsandsupplementarydatarequiredbythisitemaresetforthasaseparatesectionofthisAnnualReportonForm10-K.SeeItem15(a)foralistingoffinancialstatementsandsupplementarydataprovidedinthesectiontitled"FinancialStatementsandSupplementaryData."

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Notapplicable.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

TheCompany'smanagement,withtheparticipationoftheCompany’sChiefExecutiveOfficer(CEO)andChiefFinancialOfficer(CFO),hasconductedanevaluationoftheeffectivenessofthedesignandoperationoftheCompany'sdisclosurecontrolsandprocedures(asdefinedinRules13a-15(e)and15d-15(e)undertheSecuritiesExchangeActof1934,asamended(theExchangeAct))asoftheendoftheperiodcoveredbythisAnnualReportonForm10-K(thisAnnualReport)requiredbyExchangeActRules13a-15(b)or15d-15(b).DisclosurecontrolsandproceduresaredesignedtoreasonablyassurethatinformationrequiredtobedisclosedinourreportsfiledorsubmittedundertheExchangeAct,suchasthisAnnualReportonForm10-K,isrecorded,processed,summarizedandreportedwithinthetimeperiodsspecifiedintheSecuritiesandExchangeCommission'srulesandforms.Disclosurecontrolsandproceduresarealsodesignedtoreasonablyassurethatthisinformationisaccumulatedandcommunicatedtoourmanagement,includingtheCEOandCFO,toallowtimelydecisionsregardingrequireddisclosure.Basedonthisevaluation,theCEOandCFOconcludedthat,asoftheendoftheperiodcoveredbythisAnnualReport,theCompany’sdisclosurecontrolsandprocedureswereeffectiveatareasonableassurancelevel.

TheCompanyacquiredBlueMicrophonesonAugust21,2018.ManagementexcludedfromitsevaluationoftheeffectivenessofitsinternalcontroloverfinancialreportingasofMarch31,2019theacquiredentity’sinternalcontroloverfinancialreportingassociatedwith8%oftotalassetsand2%oftotalsalesincludedintheconsolidatedfinancialstatementsasofandfortheyearendedMarch31,2019.

AttachedasexhibitstothisAnnualReportarecertificationsoftheCEOandCFO,whicharerequiredin

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accordancewithRule13a-14oftheExchangeAct.ThisControlsandProceduressectionincludestheinformationconcerningthecontrolsevaluationreferredtointhecertifications,anditshouldbereadinconjunctionwiththecertificationsforamorecompleteunderstandingofthetopicspresented.

(b) Management's Report on Internal Control over Financial Reporting

TheCompany'smanagementisresponsibleforestablishingandmaintainingadequateinternalcontroloverfinancialreportingasdefinedinRules13a-15(f)and15d-15(f)undertheExchangeAct.UnderthesupervisionandwiththeparticipationoftheCompany’smanagement,includingtheCEOandCFO,theCompanyconductedanevaluationoftheeffectivenessofitsinternalcontroloverfinancialreportingbasedonthecriteriaestablishedintheInternalControl-IntegratedFramework(2013),issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission.Basedonthisevaluation,managementhasconcludedthatourinternalcontroloverfinancialreportingwaseffectiveasofMarch31,2019.

TheeffectivenessoftheCompany'sinternalcontroloverfinancialreportingasofMarch31,2019hasbeenauditedbyKPMGLLP,anindependentregisteredpublicaccountingfirm,asstatedinitsreport,whichappearsinItem15.

(c) Changes in Internal Control over Financial Reporting

Therewerenochangesinourinternalcontroloverfinancialreportingduringthefourthquarteroffiscalyear2019thathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,ourinternalcontroloverfinancialreporting.

(d) Limitations on the Effectiveness of Controls

TheCompany'smanagement,includingtheCEOandCFO,doesnotexpectthattheCompany'sdisclosurecontrolsandproceduresorinternalcontroloverfinancialreportingwillpreventallerrorsandallfraud.Internalcontroloverfinancialreporting,nomatterhowwelldesignedandoperated,canprovideonlyreasonable,notabsolute,assurancethattheobjectiveswillbemet.Becauseoftheinherentlimitationsininternalcontroloverfinancialreporting,noevaluationofcontrolscanprovideabsoluteassurancethatallcontrolissuesandinstancesoffraud,ifany,withintheCompanyhavebeendetected.Theseinherentlimitationsincludetherealitiesthatjudgmentsindecisionmakingcanbefaultyandthatbreakdownscanoccurbecauseofsimpleerrorormistake.Controlscanalsobecircumventedbytheindividualactsofsomepersons,bycollusionoftwoormorepeople,orbymanagementoverrideofthecontrols.Thedesignofanysystemofcontrolsisbasedinpartoncertainassumptionsaboutthelikelihoodoffutureevents,andtherecanbenoassurancethatanydesignwillsucceedinachievingitsstatedgoalsunderallpotentialfutureconditions.Overtime,controlsmaybecomeinadequatebecauseofchangesinconditionsordeteriorationinthedegreeofcompliancewithpoliciesorprocedures.Becauseoftheinherentlimitationsinacost-effectivecontrolsystem,misstatementsduetoerrororfraudmayoccurandnotbedetected.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

InformationregardingourexecutiveofficersisincorporatedhereinbyreferencetoPartI,Item1,above.

OtherinformationrequiredbythisItemmaybefoundinthedefinitiveProxyStatementforthe2019AnnualMeetingofShareholdersandisincorporatedhereinbyreference.ThedefinitiveProxyStatementwillbefiledwiththeCommissionwithin120daysafterourfiscalyearendofMarch31,2019(theProxyStatement).

TheCompany'scodeofethicspolicyentitled,"LogitechCodeofConduct"coversmembersoftheCompany'sboardofdirectors,theprincipalexecutiveofficer,principalfinancialandaccountingofficerandotherexecutiveofficersaswellasallotheremployees.

AnyamendmentsorwaiversofthecodeofethicsformembersoftheCompany'sboardofdirectorsorexecutiveofficerswillbedisclosedintheinvestorrelationssectionoftheCompany'swebsitewithinfourbusinessdaysfollowingthedateoftheamendmentorwaiver.Duringfiscalyear2016,theCompanyupdatedandreviseditscodeofethics.ThenewcodewaspostedtotheinvestorrelationssectionoftheCompany'swebsite.

Logitech'scodeofethicsisavailableontheCompany'swebsiteatwww.logitech.com,andfornocharge,acopyoftheCompany'scodeofethicscanberequestedviathefollowingaddressorphonenumber:

LogitechInvestorRelations7700GatewayBoulevardNewark,CA94560USAMain(510)795-8500

ITEM 11. EXECUTIVE COMPENSATION

TheinformationrequiredbythisitemmaybefoundintheProxyStatementforthe2019AnnualMeetingofShareholdersandisincorporatedhereinbyreference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

TheinformationrequiredbythisitemmaybefoundintheProxyStatementforthe2019AnnualMeetingofShareholdersandisincorporatedhereinbyreference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

TheinformationrequiredbythisitemmaybefoundintheProxyStatementforthe2019AnnualMeetingofShareholdersandisincorporatedhereinbyreference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

TheinformationrequiredbythisitemmaybefoundintheProxyStatementforthe2019AnnualMeetingofShareholdersandisincorporatedhereinbyreference.

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ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) ThefollowingdocumentsarefiledaspartofthisAnnualReportonForm10-K:

1.FinancialStatementsandSupplementaryData

FinancialStatements:

ReportofIndependentRegisteredPublicAccountingFirm

ConsolidatedStatementsofOperations—YearsEndedMarch31,2019,2018and2017

ConsolidatedStatementsofComprehensiveIncome—YearsEndedMarch31,2019,2018and2017

ConsolidatedBalanceSheets—March31,2019and2018

ConsolidatedStatementsofCashFlows—YearsEndedMarch31,2019,2018and2017

ConsolidatedStatementsofChangesinShareholders'Equity—YearsEndedMarch31,2019,2018and2017

NotestoConsolidatedFinancialStatements

SupplementaryData:

UnauditedQuarterlyFinancialData

2.FinancialStatementSchedule

ScheduleII—ValuationandQualifyingAccounts

3.Exhibits

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Index to Exhibits

      Incorporated by Reference  

Exhibit No.     Exhibit   Form   File No.   Filing Date  Exhibit

No.  Filed

Herewith2.1

 

 

AgreementandPlanofMerger,datedasofNovember10,2009,asamendedbytheFirstAmendmenttoAgreementandPlanofMerger,enteredintoasofNovember16,2009,bothbyandamongLogitechInc.,AgoraAcquisitionCorporation,LifesizeCommunications,Inc.,ShareholderRepresentativeServicesLLC,asstockholderrepresentative,andU.S.BankNationalAssociation,asescrowagent.  

8-K

 

0-29174

 

12/14/2009

 

2.1

 

2.2

 

***

 

SecuritiesPurchaseAgreement,datedasofApril12,2016,byandamongLogitechEuropeS.A.,JayBird,LLC,theunitholdersofJayBird,LLC,andJuddArmstrong(asthesellers'representative)  

10-K

 

0-29174

 

5/23/2016

 

2.2

   2.3

 

***

 

AssetPurchaseAgreement,datedasofJuly10,2017,byandbetweenAGAcquisitionCorporationandLogitechEuropeS.A.

 

10-Q

 

0-29174

 

11/1/2017

 

2.1

   2.4

 

***

 

AmendmentNo.1toAssetPurchaseAgreement,datedasofAugust11,2017,byandbetweenAGAcquisitionCorporationandLogitechEuropeS.A.  

10-Q

 

0-29174

 

11/1/2017

 

2.2

   2.5

 

***

 

StockPurchaseAgreement,datedasofJuly30,2018,byandamongBlueMicrophonesHoldingCorporation,RiversideMicro-CapFundII,L.P.theotherstockholdersandoptionholdersofBlueMicrophonesHoldingCorporation,LogitechEuropeS.A.andLogitechInc.

 

10-Q

 

0-29174

 

10/25/2018

 

2.1

   3.1

 

 ArticlesofIncorporationofLogitechInternationalS.A.,asamended                  

X

3.2 

 OrganizationalRegulationsofLogitechInternationalS.A.,asamended                  

X

10.1 **

 1996StockPlan,asamended

 S-8

 333-

100854  5/27/2003

 4.2

 

10.2 **

 LogitechInternationalS.A.2006StockIncentivePlan,asamendedandrestatedeffectiveSeptember7,2016  

DEFA14A 

0-29174 

7/22/2016 

App.A 

10.3   **   LogitechInc.ManagementDeferredCompensationPlan   10-Q   0-29174   11/4/2008   10.1   10.4

 **

 1996EmployeeSharePurchasePlan(U.S.),asamendedandrestated  

DEFA14A 

0-29174 

7/23/2013 

App.A 

10.5 **

 2006EmployeeSharePurchasePlan(Non-U.S.),asamendedandrestated  

DEFA14A 

0-29174 

7/23/2013 

App.B   

10.6 **

 FormofDirectorandOfficerIndemnificationAgreementwithLogitechInternationalS.A.  

20-F 

0-29174 

5/21/2003 

4.1   

10.7 **

 FormofDirectorandOfficerIndemnificationAgreementwithLogitechInc.  

20-F 

0-29174 

5/21/2003 

4.2   

10.8 **

 LogitechManagementPerformanceBonusPlan,asamendedandrestated  

DEFA14A 

0-29174 

7/23/2013 

App.C   

10.9 **

 EmploymentagreementdatedJanuary28,2008betweenLogitechInc.andGuerrinoDeLuca  

10-K 

0-29174 

5/30/2008 

10.1   

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10.10

 

**

 

Representativeformofstockoptionagreement(employees)undertheLogitechInternationalS.A.2006StockIncentivePlan  

10-Q

 

0-29174

 

11/4/2009

 

10.2

   10.11

 **

 2012StockInducementEquityPlan

 S-8

 333-

180726  4/13/2012

 10.1

 

10.12 **

 Representativeformofstockoptionagreementunderthe2012StockInducementEquityPlan  

S-8 

333-180726  

4/13/2012 

10.2 

10.13

 

**

 

Representativeformofperformancestockoptionagreement(executivesandotheremployees)undertheLogitechInternationalS.A.2006StockIncentivePlan  

10-Q

 

0-29174

 

2/5/2013

 

10.2

   10.14

 

**

 

Representativeformofperformancerestrictedstockunitagreement(non-executiveemployees)undertheLogitechInternationalS.A.2006StockIncentivePlan  

10-Q

 

0-29174

 

2/5/2013

 

10.3

   10.15

 

**

 

Representativeformofperformanceshareunitagreement(executivesandotheremployees)undertheLogitechInternationalS.A.2006StockIncentivePlanforgrantsstartinginApril2013  

10-K

 

0-29174

 

5/30/2013

 

10.39

   10.16

 **

 EmploymentAgreementbetweenLogitechInc.andBrackenDarrell,datedasofDecember18,2015  

10-Q 

0-29174 

1/22/2016 

10.1   

10.17 **

 EmploymentAgreementbetweenLogitechInc.andVincentPilette,datedasofDecember18,2015  

10-Q 

0-29174 

1/22/2016 

10.2   

10.18 **

 EmploymentAgreementbetweenLogitechInc.andL.JosephSullivan,datedasofDecember18,2015  

10-Q 

0-29174 

1/22/2016 

10.3   

10.19

     

SeriesBPreferredStockPurchaseAgreement,datedasofDecember28,2015,byandbetweenLogitechInternationalS.A.,Lifesize,Inc.,andInvestorsassociatedwithRedpointVentures,SutterHillVenturesandMeritechCapitalPartners.  

10-Q

 

0-29174

 

1/22/2016

 

10.5

   10.20

 

**

 

Representativeformofrestrictedstockunitagreement(executivesandotheremployees)undertheLogitechInternationalS.A.2006StockIncentivePlan  

10-K

 

0-29174

 

5/23/2016

 

10.31

   10.21

 

**

 

Representativeformofperformanceshareunitagreement(executivesandotheremployees)undertheLogitechInternationalS.A.2006StockIncentivePlan  

10-K

 

0-29174

 

5/23/2016

 

10.32

   10.22

 

**

 

Representativeformofrestrictedstockunitagreement(executivesandotheremployees)undertheLogitechInternationalS.A.2006StockIncentivePlan  

10-K

 

0-29174

 

5/26/2017

 

10.33

   10.23

 

**

 

Representativeformofperformanceshareunitagreement(executivesandotheremployees)undertheLogitechInternationalS.A.2006StockIncentivePlan  

10-K

 

0-29174

 

5/26/2017

 

10.34

   10.24

 

**

 

Representativeformofrestrictedstockunitagreement(non-employeedirectors)undertheLogitechInternationalS.A.2006StockIncentivePlan  

10-K

 

0-29174

 

5/26/2017

 

10.35

   10.25

 **

 LetterAgreement,datedasofJuly22,2017,betweenLogitechEuropeS.A.andMarcelStolk  

10-Q 0-29174

 11/1/2017

 10.1

   

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10.26

 

**

 

Representativeformofrestrictedstockunitagreement(non-executiveboardmembers)undertheLogitechInternationalS.A.2006StockIncentivePlan  

10-Q

 

0-29174

 

10/25/2018

 

10.1

   21.1     ListofsubsidiariesofLogitechInternationalS.A.           X23.1     ConsentofIndependentRegisteredPublicAccountingFirm           X24.1

 

 PowerofAttorney(incorporatedbyreferencetothesignaturepageofthisAnnualReportonForm10-K)  

 

 

 

 

X

31.1 

 CertificationbyChiefFinancialOfficerpursuanttosection302oftheSarbanes-OxleyActof2002  

 

 

 

 

X

31.2 

 CertificationbyChiefExecutiveOfficerpursuanttosection302oftheSarbanes-OxleyActof2002  

 

 

 

 

X

32.1

 

*

 

CertificationbyChiefExecutiveOfficerandChiefFinancialOfficerpursuanttosection906oftheSarbanes-OxleyActof2002  

 

 

 

 

X

101.INS

 

 

XBRLInstanceDocument-theinstancedocumentdoesnotappearintheInteractiveDataFilebecauseitsXBRLtagsareembeddedwithintheInlineXBRLdocument  

 

 

 

 

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101.SCH     XBRLTaxonomyExtensionSchemaDocument                   X101.CAL     XBRLTaxonomyExtensionCalculationLinkbaseDocument                   X101.DEF     XBRLTaxonomyExtensionDefinitionLinkbaseDocument                   X101.LAB     XBRLTaxonomyExtensionLabelLinkbaseDocument                   X101.PRE

   XBRLTaxonomyExtensionPresentationLinkbaseDocument                  

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*Thisexhibitisfurnishedherewith,butnotdeemed"filed"forpurposesofSection18oftheSecuritiesExchangeActof1934,asamended,orotherwisesubjecttoliabilityunderthatsection.SuchcertificationwillnotbedeemedtobeincorporatedbyreferenceintoanyfilingundertheSecuritiesActortheExchangeAct,excepttotheextentthatweexplicitlyincorporateitbyreference.

**Indicatesmanagementcompensatoryplan,contractorarrangement.

***ConfidentialtreatmenthasbeenrequestedforcertainprovisionsomittedfromthisexhibitpursuanttoRule406promulgatedundertheSecuritiesActof1933,asamended.TheomittedinformationhasbeenfiledseparatelywiththeSecuritiesandExchangeCommission.

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SIGNATURES

PursuanttotherequirementsofSection13or15(d)oftheSecuritiesExchangeActof1934,theRegistranthasdulycausedthisReporttobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized.

     

LOGITECHINTERNATIONALS.A.    /s/BRACKENDARRELL

 

BrackenDarrell

President and Chief Executive Officer    /s/VINCENTPILETTE

 

VincentPilette

Chief Financial Officer    May17,2019

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POWER OF ATTORNEY

KNOWALLPERSONSBYTHESEPRESENTS,thateachpersonwhosesignatureappearsbelowconstitutesandappointsBrackenDarrellandVincentPilette,jointlyandseverally,hisorherattorney-in-fact,withthepowerofsubstitution,forhimorherinanyandallcapacities,tosignanyamendmentstothisAnnualReportonForm10-Kandtofilethesame,withexhibitstheretoandotherdocumentsinconnectiontherewith,withtheSecuritiesandExchangeCommission,herebyratifyingandconfirmingallthateachofsaidattorneys-in-fact,orhisorhersubstituteorsubstitutes,maydoorcausetobedonebyvirtuehereof.

PursuanttotherequirementsoftheSecuritiesExchangeActof1934,thisAnnualReportonForm10-KhasbeensignedbelowbythefollowingpersonsonbehalfoftheRegistrantandinthecapacitiesandonthedatesindicated.

         

Signature Title Date

/s/GUERRINODELUCAGuerrinoDeLuca ChairmanoftheBoard May17,2019

/s/BRACKENDARRELLBrackenDarrell President,ChiefExecutiveOfficerandDirector May17,2019

/s/VINCENTPILETTEVincentPilette

ChiefFinancialOfficer(PrincipalFinancialOfficerandPrincipalAccountingOfficer) May17,2019

/s/PATRICKAEBISCHERPatrickAebischer Director   May17,2019

/s/WENDYBECKERWendyBecker Director   May17,2019

/s/EDOUARDBUGNIONEdouardBugnion Director May17,2019/s/DIDIERHIRSCH

DidierHirsch Director May17,2019/s/NEILHUNT

NeilHunt Director   May17,2019/s/MARJORIELAO

MarjorieLao Director May17,2019/s/NEELAMONTGOMERY

NeelaMontgomery Director   May17,2019/s/DIMITRIPANAYOTOPOULOS

DimitriPanayotopoulos   Director   May17,2019/s/LUNGYEHLungYeh Director May17,2019

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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PageReportofIndependentRegisteredPublicAccountingFirm 66ConsolidatedStatementsofOperations—YearsEndedMarch31,2019,2018and2017 68

ConsolidatedStatementsofComprehensiveIncome—YearsEndedMarch31,2019,2018and201769

ConsolidatedBalanceSheets—March31,2019and2018 70ConsolidatedStatementsofCashFlows—YearsEndedMarch31,2019,2018and2017 71ConsolidatedStatementsofChangesinShareholders'Equity—YearsEndedMarch31,2019,2018and2017 72NotestoConsolidatedFinancialStatements 73

INDEX TO SUPPLEMENTARY DATA  UnauditedQuarterlyFinancialData 110

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Report of Independent Registered Public Accounting Firm

TotheShareholdersandBoardofDirectors

LogitechInternationalS.A.:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

WehaveauditedtheaccompanyingconsolidatedbalancesheetsofLogitechInternationalS.A.andsubsidiaries(“theCompany”)asofMarch31,2019and2018,therelatedconsolidatedstatementsofoperations,comprehensiveincome,changesinshareholders’equity,andcashflowsforeachoftheyearsinthethree-yearperiodendedMarch31,2019,andtherelatednotesandfinancialstatementschedule(collectively,the“consolidatedfinancialstatements”).WealsohaveauditedtheCompany’sinternalcontroloverfinancialreportingasofMarch31,2019,basedoncriteriaestablishedinInternal Control - Integrated Framework (2013) issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission.

Inouropinion,theconsolidatedfinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,thefinancialpositionoftheCompanyasofMarch31,2019and2018,andtheresultsofitsoperationsanditscashflowsforeachoftheyearsinthethree-yearperiodendedMarch31,2019,inconformitywithU.S.generallyacceptedaccountingprinciples.Alsoinouropinion,theCompanymaintained,inallmaterialrespects,effectiveinternalcontroloverfinancialreportingasofMarch31,2019basedoncriteriaestablishedinInternal Control - Integrated Framework (2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission.

TheCompanyacquiredBlueMicrophoneHoldingCorporation(BlueMicrophones)onAugust21,2018.ManagementexcludedfromitsevaluationoftheeffectivenessoftheCompany’sinternalcontroloverfinancialreportingasofMarch31,2019,theacquiredentity’sinternalcontroloverfinancialreportingassociatedwith8%oftotalassetsand2%oftotalsalesincludedintheconsolidatedfinancialstatementsoftheCompanyasofandfortheyearendedMarch31,2019.OurauditofinternalcontroloverfinancialreportingoftheCompanyalsoexcludedanevaluationoftheinternalcontroloverfinancialreportingofBlueMicrophones.

Change in Accounting Principle

AsdiscussedinNote2totheconsolidatedfinancialstatements,theCompanychangeditsmethodofaccountingforrevenuein2019duetotheadoptionoftheFASB’sAccountingStandardsCodification(“ASC”)Topic606,Revenue from Contracts with Customers anditsmethodofaccountingforexcesstaxbenefitsfromshare-basedpaymentsin2018duetotheadoptionofASCTopic718,Improvements to Employee Share-Based Payment Accounting .

Basis for Opinions

TheCompany’smanagementisresponsiblefortheseconsolidatedfinancialstatements,formaintainingeffectiveinternalcontroloverfinancialreporting,andforitsassessmentoftheeffectivenessofinternalcontroloverfinancialreporting,includedintheaccompanyingManagement’sReportonInternalControloverFinancialReportingincludedinItem9A.OurresponsibilityistoexpressanopinionontheCompany’sconsolidatedfinancialstatementsandanopinionontheCompany’sinternalcontroloverfinancialreportingbasedonouraudits.WeareapublicaccountingfirmregisteredwiththePublicCompanyAccountingOversightBoard(UnitedStates)(“PCAOB”)andarerequiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.

WeconductedourauditsinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperformtheauditstoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatementsarefreeofmaterialmisstatement,whetherduetoerrororfraud,andwhethereffectiveinternalcontroloverfinancialreportingwasmaintainedinallmaterialrespects.

Ourauditsoftheconsolidatedfinancialstatementsincludedperformingprocedurestoassesstherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetoerrororfraud,andperformingproceduresthatrespondtothoserisks.Suchproceduresincludedexamining,onatestbasis,evidenceregardingtheamountsanddisclosuresintheconsolidatedfinancialstatements.Ourauditsalsoincludedevaluatingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationof

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theconsolidatedfinancialstatements.Ourauditofinternalcontroloverfinancialreportingincludedobtaininganunderstandingofinternalcontroloverfinancialreporting,assessingtheriskthatamaterialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Ourauditsalsoincludedperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.Webelievethatourauditsprovideareasonablebasisforouropinions.

Definition and Limitations of Internal Control Over Financial Reporting

Acompany’sinternalcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany’sinternalcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(3)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

/s/KPMGLLP

WehaveservedastheCompany’sauditorsince2015.

SantaClara,California

May17,2019

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LOGITECH INTERNATIONAL S.A.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

  Years Ended March 31,

  2019   2018   2017Netsales   $ 2,788,322   $ 2,566,863   $ 2,221,427Costofgoodssold   1,737,969   1,648,744   1,395,211Amortizationofintangibleassetsandpurchaseaccountingeffectoninventory   13,342   8,878   6,175Grossprofit   1,037,011   909,241   820,041

Operatingexpenses:       Marketingandselling   488,263   435,489   379,641Researchanddevelopment   161,230   143,760   130,525Generalandadministrative   98,732   96,353   100,270Amortizationofintangibleassetsandacquisition-relatedcosts   14,290   8,930   5,814Changeinfairvalueofcontingentconsiderationforbusinessacquisition   —   (4,908)   (8,092)Restructuringcharges(credits),net   11,302   (116)   23

Totaloperatingexpenses   773,817   679,508   608,181Operatingincome   263,194   229,733   211,860Interestincome   8,375   4,969   1,452Otherincome(expense),net   (436)   (2,437)   1,677Incomebeforeincometaxes   271,133   232,265   214,989Provisionforincometaxes   13,560   23,723   9,113

Netincome   $ 257,573   $ 208,542   $ 205,876

             

Netincomepershare:       Basic   $ 1.56   $ 1.27   $ 1.27Diluted   $ 1.52   $ 1.23   $ 1.24

             

Weightedaveragesharesusedtocomputenetincomepershare:       Basic   165,609   164,038   162,058Diluted   168,965   168,971   165,540

Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.

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LOGITECH INTERNATIONAL S.A.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

  Years Ended March 31,

  2019   2018   2017Netincome   $ 257,573   $ 208,542   $ 205,876Othercomprehensiveincome(loss):       Currencytranslationgain(loss):      

Currencytranslationgain(loss),netoftaxes   (7,790)   5,860   (5,670)Reclassificationofcurrencytranslationlossincludedinotherincome(expense),net   (510)   —   —

Definedbenefitplans:       Netgain(loss)andpriorservicecredits(costs),netoftaxes   (7,353)   3,955   14,201Reclassificationofamortizationincludedinotherincome(expense),net   (181)   127   1,490

Hedginggain(loss):       Deferredhedginggain(loss),netoftaxes   1,781   (8,499)   2,928Reclassificationofhedgingloss(gain)includedincostofgoodssold   1,810   5,808   (1,670)

Totalothercomprehensiveincome(loss)   (12,243)   7,251   11,279Totalcomprehensiveincome   $ 245,330   $ 215,793   $ 217,155

Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.

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LOGITECH INTERNATIONAL S.A.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

  March 31,

  2019   2018Assets        

Currentassets:        Cashandcashequivalents   $ 604,516   $ 641,947Accountsreceivable,net   383,309   214,885Inventories   293,495   259,906Othercurrentassets   69,116   56,362

Totalcurrentassets   1,350,436   1,173,100Non-currentassets:     Property,plantandequipment,net   78,552   86,304Goodwill   343,684   275,451Otherintangibleassets,net   118,999   87,547Otherassets   132,453   120,755

Totalassets   $ 2,024,124   $ 1,743,157

Liabilities and Shareholders' Equity       Currentliabilities:       Accountspayable   $ 283,922   $ 293,988Accruedandothercurrentliabilities   433,897   281,732

Totalcurrentliabilities   717,819   575,720Non-currentliabilities:     Incometaxespayable   36,384   34,956Othernon-currentliabilities   93,582   81,924

Totalliabilities   847,785   692,600Commitmentsandcontingencies(Note13)    Shareholders'equity:       Registeredshares,CHF0.25parvalue:   30,148   30,148

Issuedshares—173,106atMarch31,2019and2018       Additionalsharesthatmaybeissuedoutofconditionalcapitals—50,000atMarch31,2019andMarch31,2018       Additionalsharesthatmaybeissuedoutofauthorizedcapital—34,621atMarch31,2019andnoneatMarch31,2018        

Additionalpaid-incapital   56,655   47,234Sharesintreasury,atcost—7,244and8,527sharesatMarch31,2019and2018,respectively   (169,802)   (165,686)Retainedearnings   1,365,036   1,232,316Accumulatedothercomprehensiveloss   (105,698)   (93,455)

Totalshareholders'equity   1,176,339   1,050,557Totalliabilitiesandshareholders'equity   $ 2,024,124   $ 1,743,157

Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.

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LOGITECH INTERNATIONAL S.A.

CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)

  Years Ended March 31,   2019   2018   2017Cash flows from operating activities:            Netincome   $ 257,573   $ 208,542   $ 205,876Adjustmentstoreconcilenetincometonetcashprovidedbyoperatingactivities:       Depreciation   43,471   41,295   41,121Amortizationofintangibleassets   24,180   15,607   9,367Share-basedcompensationexpense   50,265   44,138   35,890Gainoninvestments   (816)   (669)   (569)Deferredincometaxes   (12,257)   7,141   (2,397)Changeinfairvalueofcontingentconsiderationforbusinessacquisition   —   (4,908)   (8,092)Other   (230)   (11)   107Changesinassetsandliabilities,netofacquisitions:       Accountsreceivable,net   (58,798)   (26,363)   (46,553)Inventories   (21,551)   16,047   (15,428)Otherassets   (8,800)   (16,908)   (5,309)Accountspayable   (19,134)   17,695   24,459Accruedandotherliabilities   51,278   44,655   49,917

Net cash provided by operating activities   305,181   346,261   288,389Cash flows from investing activities:       Purchasesofproperty,plantandequipment   (35,930)   (39,748)   (31,804)Investmentinprivatelyheldcompanies   (2,717)   (1,240)   (960)Acquisitions,netofcashacquired   (133,814)   (88,323)   (66,987)Proceedsfromreturnofinvestments   124   237   —Purchasesofshort-terminvestments   (1,505)   (6,789)   —Salesofshort-terminvestments   —   6,789   —Purchasesoftradinginvestments   (5,203)   (6,053)   (7,052)Proceedsfromsalesoftradinginvestments   5,700   6,423   7,124

Net cash used in investing activities   (173,345)   (128,704)   (99,679)Cash flows from financing activities:       Paymentofcashdividends   (113,971)   (104,248)   (93,093)Purchasesofregisteredshares   (32,449)   (30,722)   (83,786)Paymentofcontingentconsiderationforbusinessacquisition   —   (5,000)   —Proceedsfromexercisesofstockoptionsandpurchaserights   18,057   41,910   39,574Taxwithholdingsrelatedtonetsharesettlementsofrestrictedstockunits   (30,770)   (29,813)   (18,412)

Net cash used in financing activities   (159,133)   (127,873)   (155,717)Effect of exchange rate changes on cash, cash equivalents and restricted cash   (10,134)   4,730   (5,370)

Net increase (decrease) in cash, cash equivalents and restricted cash   (37,431)   94,414   27,623Cash, cash equivalents and restricted cash at beginning of the period   641,947   547,533   519,910

Cash, cash equivalents and restricted cash at end of the period   $ 604,516   $ 641,947   $ 547,533

             Supplementary Cash Flow Disclosures:            Non-cashinvestingactivities:       Property,plantandequipmentpurchasedduringtheperiodandincludedinperiodendliabilityaccounts   $ 3,983   $ 3,869   $ 5,072

Supplemental cash flow information:      

Incometaxespaid,net   $ 15,312   $ 15,051   $ 11,323

Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.

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LOGITECH INTERNATIONAL S.A.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(In thousands)

Registered shares   Additionalpaid-incapital  

Treasury shares  Retainedearnings

  Accumulatedother

comprehensiveloss  

 

Shares   Amount   Shares   Amount     Total

March31,2016 173,106   $ 30,148   $ 6,616   10,697   $ (128,407)   $ 963,576   $ (111,985)   $ 759,948

Totalcomprehensiveincome —   —   —   —   —   205,876   11,279   217,155

Purchasesofregisteredshares —   —   —   4,027   (83,786)   —   —   (83,786)

Taxeffectsfromshare-basedawards —   —   (1,251)   —   —   —   —   (1,251)Saleofsharesuponexerciseofstockoptionsandpurchaserights —   —   15,403   (2,513)   24,171   —   —   39,574Issuanceofsharesuponvestingofrestrictedstockunits —   —   (30,148)   (1,484)   13,985   (2,249)   —   (18,412)

Share-basedcompensation —   —   35,976   —   —   —   —   35,976

Cashdividends($0.57pershare) —   —   —   —   —   (93,093)   —   (93,093)

March31,2017 173,106   $ 30,148   $ 26,596   10,727   $ (174,037)   $ 1,074,110   $ (100,706)   $ 856,111Cumulativeeffectofadoptionofnewaccountingstandard(Note2) —   —   3,297   —   —   53,912   —   57,209

Totalcomprehensiveincome —   —     —   —   208,542   7,251   215,793

Purchasesofregisteredshares —   —   —   863   (30,722)   —   —   (30,722)Saleofsharesuponexerciseofstockoptionsandpurchaserights —   —   21,315   (1,527)   20,595   —   —   41,910Issuanceofsharesuponvestingofrestrictedstockunits —   —   (48,291)   (1,536)   18,478     —   (29,813)

Share-basedcompensation —   —   44,317   —   —     —   44,317

Cashdividends($0.63pershare) —   —   —   —   —   (104,248)   —   (104,248)

March31,2018 173,106   $ 30,148   $ 47,234   8,527   $ (165,686)   $ 1,232,316   $ (93,455)   $ 1,050,557Cumulativeeffectofadoptionofnewaccountingstandard(Note2) —   —   —   —   —   (10,882)   —   (10,882)

Totalcomprehensiveincome —   —     —   —   257,573   (12,243)   245,330

Purchasesofregisteredshares —   —   —   808   (32,449)   —   —   (32,449)Saleofsharesuponexerciseofstockoptionsandpurchaserights —   —   10,526   (575)   7,531   —   —   18,057Issuanceofsharesuponvestingofrestrictedstockunits —   —   (51,572)   (1,516)   20,802     —   (30,770)

Share-basedcompensation —   —   50,467   —   —   —   —   50,467

Cashdividends($0.69pershare) —   —   —   —   —   (113,971)   —   (113,971)

March31,2019 173,106   $ 30,148   $ 56,655   7,244   $ (169,802)   $ 1,365,036   $ (105,698)   $ 1,176,339

Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.

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LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—The Company

LogitechInternationalS.A,togetherwithitsconsolidatedsubsidiaries(LogitechortheCompany),designs,manufacturesandmarketsproductsthathelpconnectpeopletodigitalandcloudexperiences.Morethan35yearsago,LogitechcreatedproductstoimproveexperiencesaroundthepersonalPCplatform,andtodayitisamulti-brand,multi-categorycompanydesigningproductsthatenablebetterexperiencesconsuming,sharingandcreatinganydigitalcontentsuchasmusic,gaming,videoandcomputing,whetheritisonacomputer,mobiledeviceorinthecloud.

TheCompanysellsitsproductstoabroadnetworkofdomesticandinternationalcustomers,includingdirectsalestoretailersande-tailers,andindirectsalesthroughdistributors.

LogitechwasfoundedinSwitzerlandin1981andLogitechInternationalS.A.hasbeentheparentholdingcompanyofLogitechsince1988.LogitechInternationalS.A.isaSwissholdingcompanywithitsregisteredofficeinApples,SwitzerlandandheadquartersinLausanne,Switzerland,whichconductsitsbusinessthroughsubsidiariesintheAmericas,EMEAandAsiaPacific.SharesofLogitechInternationalS.A.arelistedonboththeSIXSwissExchangeunderthetradingsymbolLOGNandtheNasdaqGlobalSelectMarketunderthetradingsymbolLOGI.

Business Acquisitions

InAugust2018,theCompanyacquiredBlueMicrophonesHoldingCorporation.Duringfiscalyear2018,theCompanyacquiredASTROGamingbusinessandanothersmalltechnologycompany.See"Note3-BusinessAcquisitions"formoreinformation.

Reference to Sales

Referencesto"sales"inthenotestotheconsolidatedfinancialstatementsmeansnetsales,exceptasotherwisespecified.

Note 2—Summary of Significant Accounting Policies

Basis of Presentation

TheconsolidatedfinancialstatementsincludetheaccountsofLogitechanditssubsidiaries.Allintercompanybalancesandtransactionshavebeeneliminated.TheconsolidatedfinancialstatementsarepresentedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStates(U.S.GAAP).

Fiscal Year

TheCompany'sfiscalyearendsonMarch31.Interimquartersaregenerallythirteen-weekperiods,eachendingonaFriday.Forpurposesofpresentation,theCompanyhasindicateditsquarterlyperiodsendonthelastdayofthecalendarquarter.

Reclassification

CertainamountsfromthecomparativeperiodsintheaccompanyingconsolidatedfinancialstatementshavebeenreclassifiedtoconformtotheconsolidatedfinancialstatementpresentationasofandfortheyearendedMarch31,2019,duetotheadoptionofthenewaccountingpronouncementsduringtheyear.

Use of Estimates

ThepreparationoffinancialstatementsinconformitywithU.S.GAAPrequiresmanagementtomakejudgments,estimatesandassumptionsthataffecttheamountsreportedintheconsolidatedfinancialstatements.Managementbasesitsestimatesonhistoricalexperienceandvariousotherassumptionsbelievedtobereasonable.Significantestimatesandassumptionsmadebymanagementinvolvethefairvalueofgoodwill,intangibleassetsacquiredfrombusinessacquisitions,warrantyliabilities,accrualsforcustomerincentives,cooperativemarketing,andpricingprograms(CustomerPrograms)andrelatedbreakagewhenappropriate,salesreturnreserves,allowancefordoubtfulaccounts,inventoryvaluation,contingentconsiderationfrombusinessacquisitionsandperiodicalreassessmentofitsfairvalue,share-basedcompensationexpense,uncertaintaxpositions,andvaluationallowancesfordeferredtaxassets.Althoughtheseestimatesarebasedonmanagement’s

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bestknowledgeofcurrenteventsandactionsthatmayimpacttheCompanyinthefuture,actualresultscoulddiffermateriallyfromthoseestimates.

Currencies

ThefunctionalcurrencyoftheCompany'soperationsisprimarilytheU.S.Dollar.CertainoperationsusetheEuro,ChineseRenminbi,SwissFranc,orotherlocalcurrenciesastheirfunctionalcurrencies.ThefinancialstatementsoftheCompany'ssubsidiarieswhosefunctionalcurrencyisotherthantheU.S.DollararetranslatedtoU.S.Dollarsusingperiod-endratesofexchangeforassetsandliabilitiesandmonthlyaverageratesforsales,incomeandexpenses.Cumulativetranslationgainsandlossesareincludedasacomponentofshareholders'equityinaccumulatedothercomprehensiveloss.Gainsandlossesarisingfromtransactionsdenominatedincurrenciesotherthanasubsidiary'sfunctionalcurrencyarereportedinotherincome(expense),netintheconsolidatedstatementsofoperations.

Revenue Recognition

RevenueisrecognizedwhenacustomerobtainscontrolofpromisedgoodsorserviceinanamountthatreflectsthetransactionpricetheCompanyexpectstoreceiveinexchangeforthosegoodsorservices.

SubstantiallyallrevenuerecognizedbytheCompanyrelatestothecontractswithcustomerstosellproductsthatallowpeopletoconnect

throughmusic,gaming,video,computing,andotherdigitalplatforms.Theseproductsarehardwaredevices,whichmayincludeembeddedsoftwarethatfunctiontogether,andareconsideredasoneperformanceobligation.Hardwaredevicesaregenerallyplugandplay,requiringnoconfigurationandlittleornoinstallation.Revenueisrecognizedatapointintimewhencontroloftheproductsistransferredtothecustomerwhichgenerallyoccursuponshipment.TheCompany’ssalescontractswithitscustomershaveaoneyearorshorterterm.TheCompanyappliesthepracticalexpedientofnotdisclosingthevalueofunsatisfiedperformanceobligationsforcontractswithanoriginalexpecteddurationofoneyearorless.

TheCompanyalsoprovidespost-contractcustomersupport(“PCS”)forcertainproductsandrelatedsoftware,whichincludesunspecifiedsoftwareupdatesandupgrades,bugfixesandmaintenance.Thetransactionpriceisallocatedtotwoperformanceobligationsinsuchcontracts,basedonarelativestandalonesellingprice.ThetransactionpriceallocatedtoPCSisrecognizedasrevenueonastraight-linebasis,whichreflectsthepatternofdeliveryofPCS,overtheestimatedtermofthesupportthatisbetweenonetotwoyears.DeferredrevenueassociatedwithremainingPCSperformanceobligationasofMarch31,2019andMarch31,2018wasnotmaterial.

TheCompanynormallyrequirespaymentfromcustomerswithinthirtytosixtydaysfromtheinvoicedate.However,termsmayvarybycustomertype,bycountryandbysellingseason.Extendedpaymenttermsaresometimesofferedtoalimitednumberofcustomersduringthesecondandthirdfiscalquarters.TheCompanydoesnotmodifypaymenttermsonexistingreceivables.TheCompany'scontractswithcustomersdonotincludesignificantfinancingcomponentsastheperiodbetweenthesatisfactionofperformanceobligationsandtimingofpaymentaregenerallywithinoneyear.

ThetransactionpricereceivedbytheCompanyfromsalestoitsdistributors,retailcompanies("retailers"),andauthorizedresellersiscalculatedassellingpricenetofvariableconsiderationwhichmayincludeproductreturnsandtheCompany’spaymentsforCustomerProgramsrelatedtocurrentperiodproductrevenue.TheestimatedimpactoftheseprogramsisrecordedasareductionoftransactionpriceorasanoperatingexpenseiftheCompanyreceivesadistinctgoodorservicefromthecustomerandcanreasonablyestimatethefairvalueofthatgoodorservicereceived.CertainCustomerProgramsrequiremanagementtoestimatethepercentageofthoseprogramswhichwillnotbeclaimedorwillnotbeearnedbycustomersbasedonhistoricalexperienceandonthespecifictermsandconditionsofparticularprograms.ThepercentageoftheseCustomerProgramsthatwillnotbeclaimedorearnediscommonlyreferredtoas"breakage".TheCompanyaccountsforbreakageaspartofvariableconsideration,subjecttoconstraint,andrecordstheestimatedimpactinthesameperiodwhenrevenueisrecognizedattheexpectedvalue.Significantmanagementjudgmentsandestimatesareusedtodeterminetheimpactoftheprogramandbreakageinanyaccountingperiod.

TheCompanyentersintocooperativemarketingarrangementswithmanyofitscustomersandwithcertainindirectpartners,allowingcustomerstoreceiveacreditequaltoasetpercentageoftheirpurchasesoftheCompany'sproducts,orafixeddollaramountforvariousmarketingandincentiveprograms.TheobjectiveofthesearrangementsistoencourageadvertisingandpromotionaleventstoincreasesalesoftheCompany'sproducts.

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Customerincentiveprogramsincludeconsumerrebatesandperformance-basedincentives.ConsumerrebatesareofferedtotheCompany'scustomersandindirectpartnersattheCompany'sdiscretionfortheprimarybenefitofend-users.Inaddition,theCompanyoffersperformance-basedincentivestomanyofitscustomersandindirectpartnersbasedonpredeterminedperformancecriteria.Atmanagement'sdiscretion,theCompanyalsooffersspecialpricingdiscountstocertaincustomers.Specialpricingdiscountsareusuallyofferedonlyforlimitedtimeperiodsorforsalesofselectedproductstospecificindirectpartners.

Cooperativemarketingarrangementsandcustomerincentiveprogramsareconsideredvariableconsideration,whichtheCompanyestimatesandrecordsasareductiontorevenueatthetimeofsalebasedonnegotiatedterms,historicalexperiences,forecastedincentives,anticipatedvolumeoffuturepurchases,andinventorylevelsinthechannel.

TheCompanyhasagreementswithcertaincustomersthatcontaintermsallowingpriceprotectioncreditstobeissuedintheeventofasubsequentpricereduction.Management'sdecisiontomakepricereductionsisinfluencedbyproductlifecyclestage,marketacceptanceofproducts,thecompetitiveenvironment,newproductintroductionsandotherfactors.Accrualsforestimatedexpectedfuturepricingactionsarerecognizedatthetimeofsalebasedonanalysesofhistoricalpricingactionsbycustomerandbyproduct,inventoriesownedbyandlocatedatcustomers,currentcustomerdemand,currentoperatingconditions,andotherrelevantcustomerandproductinformation,suchasstageofproductlife-cycle.

Productreturnrightsvarybycustomer.Estimatesofexpectedfutureproductreturnsqualifyasvariableconsiderationandarerecordedasareductionofthetransactionpriceofthecontractatthetimeofsalebasedonananalysesofhistoricalreturntrendsbycustomerandbyproduct,inventoriesownedbyandlocatedatcustomers,currentcustomerdemand,currentoperatingconditions,andotherrelevantcustomerandproductinformation.TheCompanyassessestheestimatedassetforrecoveryvalueforimpairment,andadjuststhevalueoftheassetforanyimpairment.Returntrendsareinfluencedbyproductlifecyclestatus,newproductintroductions,marketacceptanceofproducts,saleslevels,productsell-through,thetypeofcustomer,seasonality,productqualityissues,competitivepressures,operationalpoliciesandprocedures,andotherfactors.ReturnratescanfluctuateovertimebutaresufficientlypredictabletoallowtheCompanytoestimateexpectedfutureproductreturns.

Typically,variableconsiderationdoesnotneedtobeconstrainedasestimatesarebasedonpredictivehistoricaldataorfuturecommitmentsthatareplannedandcontrolledbytheCompany.However,theCompanycontinuestoassessvariableconsiderationestimatessuchthatitisprobablethatasignificantreversalofrevenuewillnotoccur.

TheCompanyregularlyevaluatestheadequacyofitsestimatesforCustomerProgramsandproductreturns.FuturemarketconditionsandproducttransitionsmayrequiretheCompanytotakeactiontochangesuchprogramsandrelatedestimates.Whenthevariablesusedtoestimatethesecostschange,orifactualcostsdiffersignificantlyfromtheestimates,theCompanywouldberequiredtoincreaseorreducerevenueoroperatingexpensestoreflecttheimpact.DuringtheyearendedMarch31,2019,changestotheseestimatesrelatedtoperformanceobligationssatisfiedinpriorperiodswerenotmaterial.

Salestaxesandvalue-addedtaxes(“VAT”)collectedfromcustomers,ifapplicable,whichareremittedtogovernmentalauthoritiesarenotincludedinrevenue,andarereflectedasaliabilityontheconsolidatedbalancesheets.

Shipping and Handling Costs

TheCompany'sshippingandhandlingcostsareincludedincostofgoodssoldintheconsolidatedstatementsofoperationsforallperiodspresented.

Contract Balances

TheCompanyrecordsaccountsreceivablefromcontractswithcustomerswhenithasanunconditionalrighttoconsideration,asaccountsreceivable,netontheconsolidatedbalancesheet.

TheCompanyrecordscontractliabilitieswhencashpaymentsarereceivedordueinadvanceofperformance,primarilyforimpliedsupportandsubscriptions.Contractliabilitiesareincludedinaccruedandothercurrentliabilitiesontheconsolidatedbalancesheets.

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AsofMarch31,2019andfortheyearthenended,andasofApril1,2018,theCompanydidnothaveanymaterialcontractliabilitiesbalancesorchanges.

Contract Costs

TheCompanyrecognizestheincrementalcostsofobtainingcontractsasanexpensewhenincurrediftheamortizationperiodoftheassetsthatotherwisewouldhavebeenrecognizedisoneyearorless.Thesecostsareincludedinmarketingandsellingexpensesintheconsolidatedstatementsofoperations.AsofMarch31,2019andMarch31,2018,theCompanydidnothaveanymaterialdeferredcontractcosts.

Research and Development Costs

Costsrelatedtoresearch,designanddevelopmentofproducts,whichconsistprimarilyofpersonnel,productdesignandinfrastructureexpenses,arechargedtoresearchanddevelopmentexpenseastheyareincurred.

Advertising Costs

Advertisingcostsarerecordedaseitheramarketingandsellingexpenseoradeductionfromrevenueastheyareincurred.AdvertisingcostspaidorreimbursedbytheCompanytodirectorindirectcustomersmusthaveanidentifiablebenefitandanestimablefairvalueinordertobeclassifiedasanoperatingexpense.Ifthesecriteriaarenotmet,thepaymentisclassifiedasareductionofrevenue.Advertisingcostsrecordedasmarketingandsellingexpenseareexpensedasincurred.Totaladvertisingcostsincludingthosecharacterizedasrevenuedeductionsduringfiscalyears2019,2018and2017were$278.2million,$233.7millionand$208.7million,respectively,outofwhich$58.8million,$36.7millionand$32.2million,respectively,wereincludedasoperatingexpenseintheconsolidatedstatementsofoperations.

Cash Equivalents

TheCompanyclassifiesallhighlyliquidinstrumentspurchasedwithanoriginalmaturityofthreemonthsorlessatthedateofpurchasetobecashequivalents.Cashequivalentsarecarriedatcost,whichapproximatestheirfairvalue.

AlloftheCompany'sbanktimedepositshaveanoriginalmaturityofthreemonthsorlessandareclassifiedascashequivalentsandarerecordedatcost,whichapproximatestheirfairvalue.

Concentration of Credit Risk

FinancialinstrumentsthatpotentiallysubjecttheCompanytoconcentrationsofcreditriskconsistprincipallyofcashandcashequivalentsandaccountsreceivable.TheCompanymaintainscashandcashequivalentswithvariousfinancialinstitutionstolimitexposurewithanyonefinancialinstitution,butisexposedtocreditriskintheeventofdefaultbyfinancialinstitutionstotheextentthatcashbalanceswithindividualfinancialinstitutionsareinexcessofamountsthatareinsured.

TheCompanysellstolargedistributorsandretailersand,asaresult,maintainsindividuallysignificantreceivablebalanceswithsuchcustomers.

TheCompanyhadthefollowingcustomersthatindividuallycomprised10%ormoreofitsgrosssales:

  Years Ended March 31,

  2019   2018   2017CustomerA   13%   15%   15%CustomerB   14%   13%   12%

TheCompanyhadthefollowingcustomersthatindividuallycomprised10%ormoreofaccountsreceivable:

  March 31,

  2019   2018CustomerA   14%   15%CustomerB   15%   12%CustomerC   *   11%

*Lessthan10% 

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Typicalpaymenttermsrequirecustomerstopayforproductsalesgenerallywithin30to60days;however,termsmayvarybycustomertype,bycountryandbysellingseason.Extendedpaymenttermsaresometimesofferedtoalimitednumberofcustomersduringthesecondandthirdfiscalquarters.TheCompanydoesnotmodifypaymenttermsonexistingreceivables.

TheCompanymanagesitsaccountsreceivablecreditriskthroughongoingcreditevaluationofitscustomers'financialconditions.TheCompanygenerallydoesnotrequirecollateralfromitscustomers.

Allowances for Doubtful Accounts

AllowancesfordoubtfulaccountsaremaintainedforestimatedlossesresultingfromtheCompany'scustomers'inabilitytomakerequiredpayments.TheallowancesarebasedontheCompany'sregularassessmentofthecredit-worthinessandfinancialconditionofspecificcustomers,aswellasitshistoricalexperiencewithbaddebtsandcustomerdeductions,receivablesaging,currenteconomictrends,geographicorcountry-specificrisksandthefinancialconditionofitsdistributionchannels.

Inventories

Inventoriesarestatedatthelowerofcostandnetrealizablevalue.Costsarecomputedunderthestandardcostmethod,whichapproximatesactualcostsdeterminedonthefirst-in,first-outbasis.TheCompanyrecordswrite-downsofinventorieswhichareobsoleteorinexcessofanticipateddemandornetrealizablevaluebasedonaconsiderationofmarketabilityandproductlifecyclestage,productdevelopmentplans,componentcosttrends,historicalsalesanddemandforecastswhichconsidertheassumptionsaboutfuturedemandandmarketconditions.Inventoryonhandwhichisnotexpectedtobesoldorutilizedisconsideredexcess,andtheCompanyrecognizesthewrite-downincostofgoodssoldatthetimeofsuchdetermination.Thewrite-downisdeterminedbytheexcessofcostovernetrealizablevalue.Netrealizablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessreasonablypredictablecostsofcompletion,disposalandtransportation.Atthetimeoflossrecognition,newcostbasisperunitandlower-costbasisforthatinventoryareestablishedandsubsequentchangesinfactsandcircumstanceswouldnotresultinanincreaseinthecostbasis.

AsofMarch31,2019and2018,theCompanyalsorecordedaliabilityof$14.1millionand$12.6million,respectively,arisingfromfirm,non-cancelable,andunhedgedinventorypurchasecommitmentsinexcessofanticipateddemandornetrealizablevalueconsistentwithitsvaluationofexcessandobsoleteinventory.Suchliabilityisincludedinaccruedandothercurrentliabilitiesontheconsolidatedbalancesheets.

Property, Plant and Equipment

Property,plantandequipmentarestatedatcost.Additionsandimprovementsarecapitalized,andmaintenanceandrepairsareexpensedasincurred.TheCompanycapitalizesthecostofsoftwaredevelopedforinternaluseinconnectionwithmajorprojects.Costsincurredduringthefeasibilitystageareexpensed,whereasdirectcostsincurredduringtheapplicationdevelopmentstagearecapitalized.

Depreciationexpenseisrecognizedusingthestraight-linemethod.Plantandbuildingsaredepreciatedoverestimatedusefullivesoftwenty-fiveyears,equipmentoverusefullivesfromthreetofiveyears,internal-usesoftwareoverusefullivesfromthreetosevenyears,toolingoverusefullivesfromsixmonthstooneyear,andleaseholdimprovementsoverthelesseroftheusefullifeoftheimprovementorthetermofthelease.

Whenpropertyandequipmentisretiredorotherwisedisposedof,thecostandaccumulateddepreciationarerelievedfromtheaccountsandthenetgainorlossisincludedinoperatingexpenses.

Intangible Assets

TheCompany'sintangibleassetsprincipallyincludegoodwill,acquiredtechnology,trademarks,andcustomerrelationshipsandcontracts.Intangibleassetswithfinitelives,whichincludeacquiredtechnology,trademarks,customerrelationshipsandcontracts,andothersarecarriedatcostandamortizedusingthestraight-linemethodovertheirusefullivesrangingfromfourtotenyears.Intangibleassetswithindefinitelives,whichincludeonlygoodwill,arerecordedatcostandevaluatedatleastannuallyforimpairment.

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Impairment of Long-Lived Assets

TheCompanyreviewslong-livedassets,suchaspropertyandequipment,andfinite-livedintangibleassets,forimpairmentwhenevereventsindicatethatthecarryingamountsmightnotberecoverable.Recoverabilityofpropertyandequipment,andotherfinite-livedintangibleassetismeasuredbycomparingtheprojectedundiscountednetcashflowsassociatedwiththoseassetstotheircarryingvalues.Ifanassetisconsideredimpaired,itiswrittendowntoitsfairvalue,whichisdeterminedbasedontheasset'sprojecteddiscountedcashflowsorappraisedvalue,dependingonthenatureoftheasset.Forpurposesofrecognitionofimpairmentforassetsheldforuse,theCompanygroupsassetsandliabilitiesatthelowestlevelforwhichcashflowsareseparatelyidentifiable.

Impairment of Goodwill

Goodwillrepresentstheexcessofthepurchasepriceoverthefairvalueofthenettangibleandidentifiableintangibleassetsacquiredineachbusinesscombination.TheCompanyconductsagoodwillimpairmentanalysisannuallyatDecember31ormorefrequentlyifindicatorsofimpairmentexistorifadecisionismadetosellorexitabusiness.Significantjudgmentsareinvolvedindeterminingifanindicatorofimpairmenthasoccurred.Suchindicatorsmayincludedeteriorationingeneraleconomicconditions,negativedevelopmentsinequityandcreditmarkets,adversechangesinthemarketsinwhichanentityoperates,increasesininputcoststhathaveanegativeeffectonearningsandcashflows,oratrendofnegativeordecliningcashflowsovermultipleperiods,amongothers.Thefairvaluethatcouldberealizedinanactualtransactionmaydifferfromthatusedtoevaluatetheimpairmentofgoodwill.

Inreviewinggoodwillforimpairment,theCompanyhastheoptiontofirstassessqualitativefactorstodeterminewhethertheexistenceofeventsorcircumstancesleadstoadeterminationthatitismorelikelythannot(greaterthan50%)thattheestimatedfairvalueofareportingunitislessthanitscarryingamount.FortheyearendedMarch31,2019,theCompanyelectedtoperformaqualitativeassessmentanddeterminedthatanimpairmentwasnotmorelikelythannotandnofurtheranalysiswasrequired.TheCompanyalsomayelectnottoperformthequalitativeassessmentand,instead,proceeddirectlytothequantitativeimpairmenttest.TheultimateoutcomeofthegoodwillimpairmentreviewforareportingunitshouldbethesamewhethertheCompanychoosestoperformthequalitativeassessmentorproceedsdirectlytothequantitativeimpairmenttest.

Income Taxes

TheCompanyprovidesforincometaxesusingtheassetandliabilitymethod,whichrequiresthatdeferredtaxassetsandliabilitiesberecognizedfortheexpectedfuturetaxconsequencesoftemporarydifferencesresultingfromdifferingtreatmentofitemsfortaxandfinancialreportingpurposes,andforoperatinglossesandtaxcreditcarryforwards.Inestimatingfuturetaxconsequences,expectedfutureeventsaretakenintoconsideration,withtheexceptionofpotentialtaxlawortaxratechanges.TheCompanyrecordsavaluationallowancetoreducedeferredtaxassetstoamountsmanagementbelievesaremorelikelythannottoberealized.

TheCompany'sassessmentofuncertaintaxpositionsrequiresthatmanagementmakesestimatesandjudgmentsabouttheapplicationoftaxlaw,theexpectedresolutionofuncertaintaxpositionsandothermatters.IntheeventthatuncertaintaxpositionsareresolvedforamountsdifferentthantheCompany'sestimates,ortherelatedstatutesoflimitationsexpirewithouttheassessmentofadditionalincometaxes,theCompanywillberequiredtoadjusttheamountsoftherelatedassetsandliabilitiesintheperiodinwhichsucheventsoccur.SuchadjustmentsmayhaveamaterialimpactontheCompany'sincometaxprovisionanditsresultsofoperations.

Fair Value of Financial Instruments

ThecarryingvalueofcertainoftheCompany'sfinancialinstruments,includingcashequivalents,accountsreceivableandaccountspayableapproximatestheirfairvalueduetotheirshortmaturities.

TheCompany'sinvestmentsecuritiesportfolioconsistsofbanktimedepositswithanoriginalmaturityofthreemonthsorlessandmarketablesecurities(moneymarketandmutualfunds)relatedtoadeferredcompensationplan.

TheCompany'stradinginvestmentsrelatedtothedeferredcompensationplanarereportedatfairvaluebasedonquotedmarketprices.Themarketablesecuritiesrelatedtothedeferredcompensationplanareclassifiedasnon-currenttradinginvestments,astheyareintendedtofundthedeferredcompensationplan'slong-termliability.SinceparticipantsinthedeferredcompensationplanmayselectthemutualfundsinwhichtheircompensationdeferralsareinvestedwithintheconfinesoftheRabbiTrustwhichholdsthemarketablesecurities,

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theCompanyhasdesignatedthesemarketablesecuritiesastradinginvestments,althoughthereisnointenttoactivelybuyandsellsecuritieswiththeobjectiveofgeneratingprofitsonshort-termdifferencesinmarketprices.Thesesecuritiesarerecordedatfairvaluebasedonquotedmarketprices.Earnings,gainsandlossesontradinginvestmentsareincludedinotherincome(expense),netintheconsolidatedstatementsofoperations.

TheCompanyalsoholdsnon-marketableinvestmentsinequityandothersecuritiesthatareaccountedundertheequitymethod,whichareclassifiedasotherassets.Inaddition,theCompanyhascertaininvestmentswithoutreadilydeterminablefairvaluesduetotheabsenceofquotedmarketprices,theinherentlackofliquidity,andthefactthatinputsusedtomeasurefairvalueareunobservableandrequiremanagement'sjudgment.TheCompanyelectedthemeasurementalternativetorecordtheseinvestmentsatcostandtoadjustforimpairmentsandobservablepricechangesresultingfromtransactionswiththesameissuerwithinthestatementofoperations.

Net Income per Share

Basicnetincomepershareiscomputedbydividingnetincomebytheweightedaverageoutstandingshares.Dilutednetincomepershareiscomputedusingtheweightedaverageoutstandingsharesanddilutiveshareequivalents.Dilutiveshareequivalentsconsistofshare-basedawards,includingstockoptions,purchaserightsunderemployeesharepurchaseplan,andrestrictedstockunits(RSUs).

Thedilutiveeffectofin-the-moneyshare-basedcompensationawardsiscalculatedbasedontheaveragesharepriceforeachfiscalperiodusingthetreasurystockmethod.

Share-Based Compensation Expense

Share-basedcompensationexpenseincludescompensationexpenseforshare-basedawardsgrantedbasedonthegrantdatefairvalue.ThegrantdatefairvalueforstockoptionsandstockpurchaserightsisestimatedusingtheBlack-Scholes-Mertonoption-pricingvaluationmodel.ThegrantdatefairvalueofRSUswhichvestuponmeetingcertainmarketconditionsisestimatedusingtheMonte-Carlosimulationmethod.Thegrantdatefairvalueoftime-basedandperformance-basedRSUsiscalculatedbasedonthemarketpriceonthedateofgrant,reducedbyestimateddividendsyieldpriortovesting.Withrespecttoawardswithserviceconditionsonly,compensationexpenseisrecognizedratablyoverthevestingperiodoftheawards.Forperformance-basedRSUs,theCompanyrecognizestheestimatedexpenseusingagraded-vestingmethodoverrequisiteserviceperiodsofonetothreeyearswhentheperformanceconditionisdeterminedtobeprobable.Theperformanceperiodandtheserviceperiodofthemarket-basedgrantsoftheCompanyarebothapproximatelythreeyearsandtheestimatedexpenseisrecognizedratablyovertheserviceperiod.

InMarch2016,theFASBissuedASU2016-09,"Compensation-StockCompensation(Topic718)":ImprovementstoEmployeeShare-BasedPaymentAccounting"(ASU2016-09).TheCompanyadoptedthisstandardeffectiveApril1,2017usingmodifiedretrospectiveapproach.Underthenewstandard,theCompanyaccountsforforfeituresastheyoccur.Thechangeinaccountingforforfeituresresultedinacumulative-effectadjustmenttodecreaseretainedearningsasofApril1,2017by$3.3million.TheCompanyfurtherrecognizedacumulative-effectadjustmenttoincreaseretainedearningsasofApril1,2017by$57.2millionuponadoptionofthenewguidancetoaccountforgrossexcesstaxbenefitsof$75.2millionthatwerepreviouslynotrecognizedbecausetherelatedtaxdeductionhadnotreducedcurrentincometaxes,offsetbyavaluationallowanceof$18.0milliontoreducethedeferredtaxassetstoamountsthataremorelikelythannottoberealized.

Product Warranty Accrual

AlloftheCompany'sproductsarecoveredbywarrantytobefreefromdefectsinmaterialandworkmanshipforperiodsrangingfromoneyeartofiveyears.Thewarrantyperiodvariesbyproductandbyregion.TheCompany’swarrantydoesn’tprovideaservicebeyondassuringthattheproductcomplieswithagreed-uponspecificationsandisnotsoldseparately.ThewarrantytheCompanyprovidesqualifiesasanassurancewarrantyandisnottreatedasaseparateperformanceobligation.TheCompanyestimatescostofproductwarrantiesatthetimetherelatedrevenueisrecognizedbasedonhistoricalwarrantyclaimrates,historicalcosts,andknowledgeofspecificproductfailuresthatareoutsideoftheCompany'stypicalexperience.TheCompanyaccruesawarrantyliabilityforestimatedcoststoprovideproducts,partsorservicestorepairorreplaceproductsinsatisfactionofthewarrantyobligation.Eachquarter,theCompanyreevaluatesestimatestoassesstheadequacyofrecordedwarrantyliabilities.WhentheCompanyexperienceschangesinwarrantyclaimactivityorcostsassociatedwithfulfillingthoseclaims,thewarrantyliabilityisadjustedaccordingly.Ifactualproductfailureratesorrepaircostsdifferfromestimates,revisionstotheestimatedwarrantyliabilitieswouldberequiredandcouldmateriallyaffecttheCompany'sresultsofoperations.

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Comprehensive Income (Loss)

Comprehensiveincome(loss)isdefinedasthetotalchangeinshareholders'equityduringtheperiodotherthanfromtransactionswithshareholders.Comprehensiveincome(loss)consistsofnetincome(loss)andothercomprehensiveincome(loss).Othercomprehensiveincome(loss)iscomprisedofcurrencytranslationadjustmentsfromthoseentitiesnotusingtheU.S.Dollarastheirfunctionalcurrency,netdeferredgainsandlossesandpriorservicecostsandcreditsfordefinedbenefitpensionplans,andnetdeferredgainsandlossesonhedgingactivity.

Treasury Shares

TheCompanyperiodicallyrepurchasessharesinthemarketatfairvalue.Sharesrepurchasedarerecordedatcostasareductionoftotalshareholders'equity.Treasurysharesheldmaybereissuedtosatisfytheexerciseofemployeestockoptionsandpurchaserightsandthevestingofrestrictedstockunits,ormaybecanceledwithshareholderapproval.Treasurysharesthatarereissuedareaccountedforusingthefirst-in,first-outbasis.

Derivative Financial Instruments

TheCompanyentersintoforeignexchangeforwardcontractstoreducetheshort-termeffectsofcurrencyfluctuationsoncertainforeigncurrencyreceivablesorpayablesandtohedgeagainstexposuretochangesincurrencyexchangeratesrelatedtoitssubsidiaries'forecastedinventorypurchases.

GainsandlossesforchangesinthefairvalueoftheeffectiveportionoftheCompany'sforwardcontractsrelatedtoforecastedinventorypurchasesaredeferredasacomponentofaccumulatedothercomprehensiveincome(loss)untilthehedgedinventorypurchasesaresold,atwhichtimethegainsorlossesarereclassifiedtocostofgoodssold.TheCompanypresentstheearningsimpactfromforwardpointsinthesamelineitemthatisusedtopresenttheearningsimpactofthehedgeditem,i.e.costofgoodssold,forhedgingforecastedinventorypurchases.

Gainsorlossesfromchangesinthefairvalueofforwardcontractsthatoffsettranslationlossesorgainsonforeigncurrencyreceivablesorpayablesarerecognizedimmediatelyandincludedinotherincome(expense),netintheconsolidatedstatementsofoperations.

Restructuring Charges

TheCompany'srestructuringchargesconsistofemployeeseverance,one-timeterminationbenefitsandongoingbenefitsrelatedtothereductionofitsworkforce,leaseexitcosts,andothercosts.Liabilitiesforcostsassociatedwitharestructuringactivityaremeasuredatfairvalueandarerecognizedwhentheliabilityisincurred,asopposedtowhenmanagementcommitstoarestructuringplan.One-timeterminationbenefitsareexpensedatthedatetheentitynotifiestheemployee,unlesstheemployeemustprovidefutureservice,inwhichcasethebenefitsareexpensedratablyoverthefutureserviceperiod.Ongoingbenefitsareexpensedwhenrestructuringactivitiesareprobableandthebenefitamountsareestimable.Coststoterminatealeasebeforetheendofitstermarerecognizedwhenthepropertyisvacated.Othercostsprimarilyconsistoflegal,consulting,andothercostsrelatedtoemployeeterminationsareexpensedwhenincurred.Terminationbenefitsarecalculatedbasedonregionalbenefitpracticesandlocalstatutoryrequirements.

Recent Accounting Pronouncements Adopted

InMay2014,theFinancialAccountingStandardsBoard("FASB")issuedAccountingStandardUpdate(ASU)No.2014-09,"RevenuefromContractswithCustomers(Topic606)"(ASU2014-09orTopic606)whichsupersedestherevenuerecognitionrequirementsunderASC605(Topic605),RevenueRecognition.ASU2014-09outlinesanew,single,comprehensivemodelforentitiestouseinaccountingforrevenuearisingfromcontractswithcustomersandsupersedesexistingrevenuerecognitionguidance,includingindustry-specificguidance.Underthenewguidance,recognitionofrevenueoccurswhenacustomerobtainscontrolofpromisedgoodsorservicesinanamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledinexchangeforthosegoodsorservices.Thenewstandardrequiresreportingcompaniestodisclosethenature,amount,timing,anduncertaintyofrevenueandcashflowsarisingfromcontractswithcustomers.OnApril1,2018,theCompanyadoptedthenewstandardandallrelatedamendmentsusingthemodifiedretrospectivemethodappliedtothosecontractsthatwerenotcompletedasofApril1,2018.ResultsforreportingperiodsbeginningafterApril1,2018arepresentedunderTopic606,whilepriorperiodamountsarenotadjustedandcontinuetobereportedinaccordancewithhistoricaccountingstandardsunderTopic605.

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Asaresultoftheadoptionofthenewstandard,theCompanyrecorded:a)areductiontoretainedearningsasofApril1,2018;andb)reclassificationsofcertainallowancesforsalesreturnsandcertainotherCustomerProgramsfromaccountsreceivable,nettoaccruedandothercurrentliabilitiesandothercurrentassets.

ThecumulativeeffectofthechangestotheconsolidatedbalancesheetfromtheadoptionofTopic606wasasfollows(inthousands):

   As of

March 31, 2018  Effect of Adoption of

Topic 606  As of

April 1, 2018Accountsreceivable,net   $ 214,885   $ 105,768   $ 320,653Othercurrentassets   56,362   6,195   62,557Accruedandothercurrentliabilities   281,732   122,845   404,577Retainedearnings   1,232,316   (10,882)   1,221,434

Net Reduction to Retained Earnings as of April 1, 2018

• UnderTopic605,accrualsforcertainCustomerProgramswererecognizedasareductionofrevenueatthelaterofwhentherelatedrevenueisrecognizedorwhentheprogramisofferedtothecustomer.UnderTopic606,theseprogramsqualifyasvariableconsiderationandarerecordedasareductionofthetransactionpriceatthecontractinceptionbasedontheexpectedvaluemethod.TheCompanyisrequiredtoestimatetheaccrualsfortheseprogramsaheadofcommitmentdateifcustomarybusinesspracticecreatesanimpliedexpectationthatsuchactivitieswilloccurinthefuture.

• UnderTopic606,variableconsiderationmustbeestimatedattheoutsetofthearrangement,subjecttotheconstraintguidancetoensurethatasignificantrevenuereversalwillnotoccur.Asaresult,uponadoptionofTopic606,estimatedbreakageforaccrualsofcertainCustomerProgramsisrecognizedsoonerascomparedtoTopic605.

Balance Sheet Reclassifications

• UnderTopic605,thegrossamountofaccruedrevenuereservesforsalesreturnsof$31.4million,netofexpectedreturnedinventoryof$11.4millionwasincludedwithinaccountsreceivable,netasofMarch31,2018.Expectedscrapcostof$5.2millionforsuchexpectedreturnedinventorywasincludedinaccruedandothercurrentliabilitiesasofMarch31,2018.SubsequenttotheadoptionofTopic606,suchbalancesarepresentedonagrossbasisasaccruedrevenuereservefromreturnsof$31.4millionincludedinaccruedandothercurrentliabilitiesandasreturnassetsof$6.2millionincludedinothercurrentassets.

• UnderTopic605,revenuereservesforcertainCustomerProgramstotaling$76.7million,whichwereestimatedusingportfolioapproachbasedonaggregatedcustomerleveldata,wereincludedwithinaccountsreceivable,netasofMarch31,2018.SubsequenttotheadoptionofTopic606,suchbalancesarepresentedasaccruedcustomermarketing,pricingandincentiveprogramsincludedinaccruedandothercurrentliabilities.

CertainbalancesofallowancesforsalesreturnandaccrualsforCustomerProgramswhichwereaccruedbasedonCustomerProgramoffersmadetoindividualcustomers,mettherightofoffsetcriteriainaccordancewithASC210-20,"BalanceSheet(Topic210)",andarestillincludedwithinaccountsreceivable,net.

TheadoptionofTopic606didnothaveanimpactonthetotalcashflowsfromoperating,investing,orfinancingactivities.

ThefollowingtablessummarizetheimpactsofadoptingTopic606ontheCompany’sconsolidatedstatementsofoperationsfortheyearendedMarch31,2019,andconsolidatedbalancesheetasofMarch31,2019(inthousands):

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    Year Ended March 31, 2019

   As Reported Under

Topic 606  If Reported Under Topic

605   Effect of Change

Netsales   $ 2,788,322   $ 2,784,636   $ 3,686

    As of March 31, 2019

   As Reported Under

Topic 606  Balance Under Topic

605   Effect of Change

Accountsreceivable,net   $ 383,309   $ 260,401   $ 122,908Othercurrentassets   69,116   60,449   8,667Accruedandothercurrentliabilities   433,897   295,126   138,771Retainedearnings   1,365,036   1,372,232   (7,196)

InJanuary2016,theFASBissuedASU2016-01,"FinancialInstruments-RecognitionandMeasurementofFinancialAssetsandFinancialLiabilities(Subtopic825-10)"(ASU2016-01).ASU2016-01requiresequityinvestmentsthatarenotaccountedforundertheequitymethodordonotresultinconsolidationtoberecordedatfairvalueandanychangesinfairvaluetoberecognizedwithinthestatementofoperations.TheCompanyadoptedASU2016-01effectiveApril1,2018,onaprospectivebasisforitsprivatelyheldstrategicequityinvestmentswithoutreadilydeterminablefairvalues.TheCompanyelectedthemeasurementalternativetorecordtheseinvestmentsatcostandtoadjustforimpairmentsandobservablepricechangesresultingfromtransactionswiththesameissuerwithinthestatementofoperations.TheadoptionofASU2016-01didnothaveamaterialimpactontheCompany'sconsolidatedfinancialstatements.

InOctober2016,theFASBissuedASU2016-16,"IncomeTaxes(Topic740):Intra-EntityTransfersofAssetsOtherThanInventory"(ASU2016-16),whicheliminatesthedeferralofincometaxeffectsofintra-entityassettransfersuntilthetransferredassetissoldtoanunrelatedpartyorrecoveredthroughuse.However,thisstandarddoesnotapplytointra-entitytransferofinventory.TheCompanyadoptedthisstandardeffectiveApril1,2018onamodifiedretrospectivebasis,andtheadoptionofASU2016-16didnothaveamaterialimpactonitsconsolidatedfinancialstatements.

InDecember2016,theFASBissuedASU2016-18,"StatementofCashFlows(Topic230):RestrictedCash"(ASU2016-18),whichrequiresthatastatementofcashflowsexplainsthechangeduringtheperiodinthetotalofcash,cashequivalents,andamountsgenerallydescribedasrestrictedcashorrestrictedcashequivalents.TheCompanyadoptedthisstandardeffectiveApril1,2018,utilizingtheretrospectivetransitionmethodtoeachperiodpresentedandtheadoptionofASU2016-18didnothaveamaterialimpactonitsconsolidatedfinancialstatements.TheconsolidatedstatementofcashflowsfortheyearendedMarch31,2017hasbeenrevisedasaresultoftheadoptionandtheCompanyhasnorestrictedcashbalancesoractivitiessincethen.

InJanuary2017,theFASBissuedASU2017-01,"BusinessCombination(Topic805):ClarifyingtheDefinitionofaBusiness"(ASU2017-01),whichchangesthedefinitionofabusinesstoassistwithevaluatingwhenasetoftransferredassetsandactivitiesisabusiness.TheCompanyadoptedthisstandardeffectiveApril1,2018,andtheadoptionofASU2017-01didnothaveamaterialimpactonitsconsolidatedfinancialstatements.

InMarch2017,theFASBissuedASU2017-07,"Compensation-RetirementBenefit(Topic715):ImprovingthePresentationofNetPeriodicPensionCostandNetPeriodicPostretirementBenefitCost"(ASU2017-07),whichrequiresthattheCompanydisaggregatetheservicecostcomponentfromtheothercomponentsofnetbenefitcost,andalsoprovidesguidanceonhowtopresenttheservicecostcomponentandtheothercomponentsofnetbenefitcostintheincomestatementandallowonlytheservicecostcomponentofnetbenefitcosttobeeligibleforcapitalization.TheCompanyadoptedthisstandardeffectiveApril1,2018usingaretrospectiveadoptionmethod.Otherthantherevisedstatementofoperationspresentationfortheperiodsinthecurrentyear,theadoptionofASU2017-07didnothaveanimpactontheCompany’sconsolidatedfinancialstatements.Theimpacttothecomparativeperiodswasimmaterialandthereforethepriorperiodstatementsofoperationswerenotrevised.

InAugust2017,theFASBissuedASU2017-12,"DerivativesandHedging(Topic815):TargetedImprovementstoAccountingforHedgingActivities"(ASU2017-12),whichimprovesthefinancialreportingofhedgingrelationshipstobetterportraytheeconomicresultsofanentity’sriskmanagementactivitiesinitsfinancialstatementsand

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simplifiestheapplicationofthehedgeaccountingguidance.TheCompanyadoptedthisstandardprospectivelyeffectiveApril1,2018,andtheadoptionofASU2017-12didnothaveamaterialimpactonitsconsolidatedfinancialstatements.InaccordancewithASU2017-12,theCompanyhasstartedpresentingtheearningsimpactfromforwardpointsinthecostofgoodssoldlineitem,whichisusedtopresenttheearningsimpactofthehedgeditem.

Recent Accounting Pronouncements To Be Adopted

InFebruary2016,theFASBissuedASU2016-02,"Leases(Topic842)"(ASU2016-02orTopic842),whichgenerallyrequireslesseestorecognizeright-of-use(ROU)assetsandleaseliabilitiesarisingfromoperatingandfinancingleaseswithtermslongerthan12monthsintheconsolidatedbalancesheetsandandtodisclosekeyinformationaboutleasingarrangements.InJuly2018,theFASBissuedASU2018-11,"Leases(Topic842):TargetedImprovements(ASU2016-02orTopic842)",whichprovidesanalternativemodifiedtransitionmethod.Underthismethod,thecumulative-effectadjustmenttotheopeningbalanceofretainedearningsisrecognizedonthedateofadoptionwithcomparativepriorperiodsnotrestated.Thenewstandard,includingrelatedamendmentssubsequentlyissuedbytheFASB,iseffectiveforourinterimandannualperiodsbeginningApril1,2019.TheCompanywilladoptthenewguidanceinthefirstquarteroffiscalyear2020onthealternativemodifiedtransitionbasis,therebyrecognizingthecumulativeeffectofinitiallyapplyingTopic842asanadjustmenttoopeningretainedearningsontheadoptiondate,withoutrevisingthebalancesincomparativeperiods.TheCompanyplansonelectingthepackageoftransitionalpracticalexpedientsuponadoptionwhich,amongotherprovisions,allowstheCompanytonottoreassessunderthenewstandardourpriorconclusionsaboutleaseidentification,leaseclassificationandinitialdirectcost,foranyexistingleasesontheadoptiondate.Inaddition,forthefacilityleases,theCompanyintendstoelecttoaccountforleaseandnon-leasecomponentsasasingleleasecomponent.TheCompanywillalsomakeanaccountingpolicyelectionnottorecordleasesthat,attheleasecommencementdate,havealeasetermof12monthsorlessonthebalancesheet.TheCompanyhassubstantiallycompleteditsevaluationoftheeffectthattheadoptionofthisguidancewillhaveonitsconsolidatedfinancialstatements.Inconnectionwiththeadoptionofthenewguidance,theCompanyexpectstorecognizeROUassetsintherangeof$25millionto$35millionandleaseliabilitiesintherangeof$30millionto$40milliononitsstatementoffinancialpositionforoperatingleases,withlimitedimpacttoitsresultsofoperationsandcashflows.TheCompanybelievesthatsubstantiallyallofitsundiscountedfutureminimumoperatingleasecommitmentsbasedonitscurrentleaseportfoliothatwerenotrecognizedonitsconsolidatedbalancesheetasofMarch31,2019andasdisclosedinNote13totheconsolidatedfinancialstatements,willbesubjecttothenewstandard.

InAugust2018,theFASBissuedASU2018-13,"FairValueMeasurement(Topic820):DisclosureFramework-ChangestotheDisclosureRequirementsforFairValueMeasurements"(ASU2018-13),whichaimstoimprovetheoverallusefulnessofdisclosurestofinancialstatementusersandreduceunnecessarycoststocompanieswhenpreparingfairvaluemeasurementdisclosures.ASU2018-13iseffectiveforannualandinterimperiodsinfiscalyearsbeginningafterDecember15,2019.Earlyadoptionispermitted.Retrospectiveadoptionisrequired,exceptforcertaindisclosureswhichwillberequiredtobeappliedprospectivelyforonlythemostrecentinterimorannualperiodpresentedintheinitialfiscalyearofadoption.TheCompanydoesnotexpecttheadoptionofASU2018-13willhaveamaterialimpactonitsconsolidatedfinancialstatementsandwilladoptthestandardeffectiveApril1,2020.

InAugust2018,theFASBissuedASU2018-14,"Compensation-RetirementBenefits-DefinedBenefitsPlans-General(Subtopic715-20):DisclosureFramework-ChangestotheDisclosureRequirementsforDefinedBenefitPlans"(ASU2018-14),whichaimstoimprovetheoverallusefulnessofdisclosurestofinancialstatementusersandreduceunnecessarycoststocompanieswhenpreparingdefinedbenefitplandisclosures.ASU2018-14iseffectiveforannualperiodsinfiscalyearsendingafterDecember15,2020.Retrospectiveadoptionisrequiredandearlyadoptionispermitted.TheCompanydoesnotexpecttheadoptionofASU2018-14willhaveamaterialimpactonitsconsolidatedfinancialstatementsandwilladoptthestandardeffectiveApril1,2020.

InAugust2018,theFASBissuedASU2018-15,"Intangibles-GoodwillandOther-Internal-UseSoftware(Subtopic350-40):Customer'sAccountingforImplementationCostsIncurredinaCloudComputingArrangementThatIsaServiceContract"(ASU2018-15),whichclarifiesthatimplementationcostsincurredbycustomersincloudcomputingarrangementsaredeferrediftheywouldbecapitalizedbycustomersinsoftwarelicensingarrangementsundertheinternal-usesoftwareguidance.ASU2018-15iseffectiveforannualandinterimperiodsinfiscalyearsbeginningafterDecember15,2019,withearlyadoptionpermitted.Entitieshavetheoptiontoapplytheguidanceprospectivelytoallimplementationcostsincurredafterthedateofadoptionorretrospectively.TheCompanydoesnotexpecttheadoptionofASU2018-15willhaveamaterialimpactonitsconsolidatedfinancialstatementsandwilladoptthestandardprospectivelyeffectiveApril1,2019.

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Note 3—Business Acquisitions

Fiscal Year 2019 Acquisition

Blue Microphones Acquisition

OnAugust21,2018(the"BlueMicrophonesAcquisitionDate"),theCompanyacquiredallequityinterestsinBlueMicrophonesHoldingCorporation("BlueMicrophones")foratotalconsiderationof$134.8millionincash(the"BlueMicrophonesAcquisition"),whichincludedaworkingcapitaladjustmentandrepaymentofdebtonbehalfofBlueMicrophones.

BlueMicrophonesisaleadingaudiomanufacturerthatdesignsandproducesmicrophones,headphones,recordingtools,andaccessoriesforaudioprofessionals,musiciansandconsumers.TheBlueMicrophonesAcquisitionsupplementstheCompany'sproductportfolio.

BlueMicrophonesmetthedefinitionofabusiness,andthereforetheacquisitionisaccountedforusingtheacquisitionmethod.

ThefollowingtablesummarizestheestimatedfairvaluesoftheassetsacquiredandliabilitiesassumedattheBlueMicrophonesAcquisitionDate(inthousands):

    Estimated Fair ValueCashandcashequivalents   $ 1,110Accountsreceivable   10,979Inventories   19,546Othercurrentassets   997Property,plantandequipment   452Intangibleassets   55,567

Totalidentifiableassetsacquired   $ 88,651Accountspayable   (10,322)Accruedliabilities   (11,162)Otherlong-termliabilities   (661)

Netidentifiableassetsacquired   $ 66,506Goodwill   68,269Netassetsacquired   $ 134,775

GoodwillrelatedtotheacquisitionisprimarilyattributabletoopportunitiesandeconomiesofscalefromcombiningtheoperationsandtechnologiesofLogitechandBlueMicrophonesandisnotdeductiblefortaxpurposes.

Thefairvalueoftheinventoryacquiredisestimatedatitsnetrealizablevalue,whichusestheestimatedsellingprices,lessthecostofdisposalandareasonableprofitallowanceforthesellingefforts.ThedifferencebetweenthefairvalueoftheinventoriesandtheamountrecordedbyBlueMicrophonesimmediatelybeforetheacquisitiondateis$1.8million,whichhasbeenrecognizedin"amortizationofintangiblesassetsandpurchaseaccountingeffectoninventory"intheconsolidatedstatementsofoperationsuponthesaleoftheacquiredinventory.

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ThefollowingtablesummarizestheestimatedfairvaluesandestimatedusefullivesofthecomponentsofintangibleassetsacquiredasoftheBlueMicrophonesAcquisitionDate(Dollarsinthousands):

  Fair Value   Estimated Useful Life (years)Developedtechnology $ 17,967   5.0Customerrelationships 25,100   10.0Trademarkandtradename 12,500   7.0Totalintangibleassetsacquired $ 55,567   7.7

IntangibleassetsacquiredasaresultoftheBlueMicrophonesAcquisitionarebeingamortizedovertheirestimatedusefullivesusingthestraight-linemethodofamortization,whichmateriallyapproximatesthedistributionoftheeconomicvalueoftheintangibleassets.Amortizationofdevelopedtechnologyof$2.1millionduringtheyearendedMarch31,2019isincludedin"amortizationofintangibleassetsandpurchaseaccountingeffectofinventory"intheconsolidatedstatementsofoperations.Amortizationofcustomerrelationships,trademarkandtradenamesof$2.5millionduringtheyearendedMarch31,2019isincludedin"amortizationofintangibleassetsandacquisition-relatedcosts"intheconsolidatedstatementsofoperations.

DevelopedtechnologyrelatestoexistingBlueMicrophonesproducts.Theeconomicusefullifewasdeterminedbasedonthetechnologycyclerelatedtodevelopedtechnologyofexistingproducts,aswellasthecashflowsanticipatedovertheforecastedperiods.

CustomerrelationshipsrepresentthefairvalueoffutureprojectedrevenuethatwillbederivedfromsalesofproductstoexistingcustomersofBlueMicrophones.Theeconomicusefullifewasdeterminedbasedonhistoricalcustomerattritionratesandindustrybenchmarks.

Trademarkandtradenamerelatesto“BlueMicrophones”.Theeconomicusefullifewasdeterminedbasedontheexpectedlifeofthetradenameandthecashflowsanticipatedovertheforecastedperiods.

Thefairvaluesofdevelopedtechnologyandtradenamewereestimatedusingtherelief-from-royaltymethod,anincomeapproach(Level3),whichestimatesthecostsavingsthataccruetotheowneroftheintangibleassetsthatwouldotherwisebepayableasroyaltiesorlicensefeesonrevenuesearnedthroughtheuseoftheasset.Aroyaltyrateisappliedtotheprojectedrevenuesassociatedwiththeintangibleassetstodeterminetheamountofsavings,whichisthendiscountedtodeterminethefairvalue.Thedevelopedtechnologyandtradenamewerevaluedusingroyaltyratesof10%and3%,respectively,andbothwerediscountedatarateof11%.

Thefairvalueofcustomerrelationshipswasestimatedusingtheexcessearningsmethod,anincomeapproach(Level3),whichconvertsprojectedrevenuesandcostsintocashflows.Toreflectthefactthatcertainotherassetscontributedtothecashflowsgenerated,thereturnsforthesecontributoryassetswereremovedtoarriveatestimatedcashflowssolelyattributabletothecustomerrelationships,whichwerediscountedatarateof11%.

TheCompanybelievesthefairvalueoftheintangibleassetsrecordedaboveapproximatestheamountsamarketparticipantwouldpayfortheseintangibleassetsasoftheAcquisitionDate.

TheCompanyincludedBlueMicrophones'estimatedfairvalueofassetsacquiredandliabilitiesassumedinitsconsolidatedbalancesheetbeginningontheBlueMicrophonesAcquisitionDate.TheresultsofoperationsforBlueMicrophonessubsequenttotheacquisitiondatehavebeenincludedin,butarenotmaterialto,theCompany'sconsolidatedstatementsofoperations.FortheyearendedMarch31,2019,BlueMicrophonescontributed$45.7milliontosales,representingapproximately2%ofthesalesoftheCompany.

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Fiscal Year 2018 Acquisitions

ASTRO Acquisition

OnAugust11,2017(theASTROAcquisitionDate),theCompanyacquiredcertainassetsandliabilitiesconstitutingtheASTROGamingbusiness(ASTRO)fromAGAcquisitionCorporationforapurchasepriceof$85.0millionincash(theASTROAcquisition).ASTROisaleadingconsolegamingaccessorybrandwithahistoryofproducingaward-winningheadsetsforprofessionalgamersandenthusiasts.ASTROprovidestheCompanywithastronggrowthplatformintheconsolegamingaccessoriesmarket.

ASTROmeetsthedefinitionofabusiness,anditsacquisitionisaccountedforusingtheacquisitionmethod.ThefollowingtablesummarizestheestimatedfairvaluesoftheassetsacquiredandliabilitiesassumedattheASTROAcquisitionDate(inthousands):

    Estimated Fair ValueInventories   $ 10,331Property,plantandequipment   2,760Intangibleassets   52,520Otherassets   605

Totalidentifiableassetsacquired   66,216Accruedliabilities   (2,982)

Netidentifiableassetsacquired   63,234Goodwill   21,766Netassetsacquired   $ 85,000

GoodwillrelatedtotheacquisitionisprimarilyattributabletoopportunitiesandeconomiesofscalefromcombiningtheoperationsandtechnologiesofLogitechandASTRO.Goodwillisexpectedtobedeductiblefortaxpurposes.

Thefairvalueoftheinventoryacquiredisestimatedattheirnetrealizablevalue,whichusestheestimatedsellingprices,lessthecostsofdisposalandareasonableprofitallowanceforthesellingefforts.ThedifferencebetweenthefairvalueoftheinventoriesandtheamountrecordedbyASTROimmediatelybeforetheASTROAcquisitionDateis$0.8million,whichhasbeenrecognizedin"amortizationofintangiblesassetsandpurchaseaccountingeffectoninventory"intheconsolidatedstatementsofoperationsuponthesaleoftheacquiredinventory.

ThefollowingtablesummarizestheestimatedfairvaluesandestimatedusefullivesofthecomponentsofintangibleassetsacquiredasoftheASTROAcquisitionDate(Dollarsinthousands):

  Fair Value   Estimated Useful Life (years)Developedtechnology $ 12,540   4.0Customerrelationships 33,100   8.0Trademarkandtradename 6,880   6.0Totalintangibleassetsacquired $ 52,520   6.8

IntangibleassetsacquiredasaresultoftheASTROAcquisitionarebeingamortizedovertheirestimatedusefullivesusingthestraight-linemethodofamortization,whichmateriallyapproximatesthedistributionoftheeconomicvalueoftheintangibleassets.Amortizationofdevelopedtechnologyof$3.1millionand$2.0millionduringtheyearendedMarch31,2019and2018,respectively,isincludedin"amortizationofintangibleassetsandpurchaseaccountingeffectofinventory"intheconsolidatedstatementsofoperations.Amortizationofcustomerrelationshipsandtradenameof$5.3millionand$3.3millionduringtheyearendedMarch31,2019and2018,respectively,isincludedin"amortizationofintangibleassetsandacquisition-relatedcosts"intheconsolidatedstatementsofoperations.

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DevelopedtechnologyrelatestoexistingASTROgamingheadsetproducts.Theeconomicusefullifewasdeterminedbasedonthetechnologycyclerelatedtodevelopedtechnologyofexistingproducts,aswellasthecashflowsanticipatedovertheforecastedperiods.

CustomerrelationshipsrepresentthefairvalueoffutureprojectedrevenuethatwillbederivedfromsalesofproductstoexistingcustomersofASTRO.Theeconomicusefullifewasdeterminedbasedonhistoricalcustomerattritionratesandindustrybenchmarks.

Trademarkandtradenamerelatesto“ASTRO”.Theeconomicusefullifewasdeterminedbasedontheexpectedlifeofthetradenameandthecashflowsanticipatedovertheforecastedperiods.

Thefairvalueofdevelopedtechnologyandtradenamewasestimatedusingtherelief-from-royaltymethod,anincomeapproach(Level3),whichestimatesthecostsavingsthataccruetotheowneroftheintangibleassetsthatwouldotherwisebepayableasroyaltiesorlicensefeesonrevenuesearnedthroughtheuseoftheasset.Aroyaltyrateisappliedtotheprojectedrevenuesassociatedwiththeintangibleassetstodeterminetheamountofsavings,whichisthendiscountedtodeterminethefairvalue.Thedevelopedtechnologyandtradenamewerevaluedusingroyaltyratesof10%and2%,respectively,andbothwerediscountedatarateof13%.

Thefairvalueofcustomerrelationshipswasestimatedusingtheexcessearningsmethod,anincomeapproach(Level3),whichconvertsprojectedrevenuesandcostsintocashflows.Toreflectthefactthatcertainotherassetscontributedtothecashflowsgenerated,thereturnsforthesecontributoryassetswereremovedtoarriveatestimatedcashflowssolelyattributabletothecustomerrelationships,whichwerediscountedatarateof13%.

TheCompanybelievesthevalueofintangibleassetsrecordedaboveapproximatestheamountsamarketparticipantwouldpayfor,theseintangibleassetsasoftheASTROAcquisitionDate.

TheCompanyincludedASTRO'sestimatedfairvalueofassetsacquiredandliabilitiesassumedinitsconsolidatedbalancesheetsbeginningontheASTROAcquisitionDate.TheresultsofoperationsforASTROhavebeenincludedin,butarenotmaterialto,theCompany'sconsolidatedstatementsofoperationsfromtheASTROAcquisitionDate.

InNovember2017,theCompanyalsomadeasmalltechnologyacquisitionforatotalconsiderationof$5.2million,includingcashacquiredof$0.9million.

Change in fair value of contingent consideration for business acquisition

OnApril20,2016(theJaybirdAcquisitionDate),theCompanyacquiredalloftheequityinterestsofJayBird,LLC(Jaybird),aUtahlimitedliabilitycompanythatdevelopsBluetoothearbuds,activitytrackers,andaccessoriesforsportsandactivelifestyles,forapurchasepriceof$54.2millionincash,withanadditionalearn-outofupto$45.0millionbasedontheachievementofcertainnetrevenuegrowthtargetsoverapproximatelyatwoyearperiod(theJaybirdAcquisition).Ifthenetrevenuegrowthtargetswouldhavebeenmet,theCompanywouldhavepaidamaximumof$25.0millionand$20.0millioninfiscalyears2018and2019,respectively.Thefairvalueoftheearn-outasoftheJaybirdAcquisitionDatewas$18.0million.Thefairvalueofthecontingentconsiderationdecreasedby$4.9millionand$8.1millionfortheyearendedMarch31,2018and2017,respectively,resultingprimarilyfromJaybird'slower-than-expectedsalesandrevisedprojectedsalesintheremainingearn-outperiod.InOctober2017,LogitechandthesellersofJaybirdenteredintoanagreementfully,irrevocablyandunconditionallyreleasingLogitechfromtheearn-outrightsandpaymentsinexchangefor$5.0millionincash,whichwaspaidinNovember2017.

Acquisition-related costs and pro forma results of operations

TheCompanyincurredacquisition-relatedcostsofapproximately$1.7million,$1.4millionand$1.5million,inaggregate,fortheyearendedMarch31,2019, 2018and2017,respectively.Theacquisition-relatedcostsareincludedin"Amortizationofintangibleassetsandacquisition-relatedcosts"intheconsolidatedstatementsofoperations.

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Proformaresultsofoperationsforthealltheacquisitionscompletedinfiscalyear2019and2018havenotbeenpresentedbecausetheeffectsoftheseacquisitionsarenotmaterialtotheconsolidatedstatementsofoperationsindividuallyorinaggregateforeachyear.

Note 4—Net Income per Share

ThecomputationsofbasicanddilutednetincomepersharefortheCompanywereasfollows(inthousandsexceptpershareamounts):

  Years Ended March 31,

  2019   2018   2017Net Income   $ 257,573   $ 208,542   $ 205,876             

Shares used in net income per share computation:            Weightedaveragesharesoutstanding-basic   165,609   164,038   162,058Effectofpotentiallydilutiveequivalentshares   3,356   4,933   3,482Weightedaveragesharesoutstanding-diluted   168,965   168,971   165,540

        Net income per share:            Basic   $ 1.56   $ 1.27   $ 1.27Diluted   $ 1.52   $ 1.23   $ 1.24

Shareequivalentsattributabletooutstandingstockoptions,restrictedstockunits("RSUs")andemployeesharepurchaserightstotaling1.8million,1.1millionand1.4millionduringfiscalyears2019,2018and2017wereexcludedfromthecalculationofdilutednetincomepersharebecausethecombinedexercisepriceandaverageunamortizedgrantdatefairvalueoftheseoptionsandESPPorvestingofRSUsweregreaterthantheaveragemarketpriceoftheCompany'ssharesduringtheperiodspresentedherein,andthereforetheirinclusionwouldhavebeenanti-dilutive.Performance-basedawardswerenotincludedbecauseallnecessaryconditionshavenotbeensatisfiedbytheendoftherespectiveperiod,andthoseshareswerenotissuableiftheendofthereportingperiodweretheendofthecontingencyperiod.

Note 5—Employee Benefit Plans

Employee Share Purchase Plans and Stock Incentive Plans

AsofMarch31,2019,theCompanyoffersthe2006EmployeeSharePurchasePlan,asamendedandrestated(Non-U.S.)(2006ESPP),the1996EmployeeSharePurchasePlan(U.S.),asamendedandrestated(1996ESPP),the2006StockIncentivePlan(2006Plan)asamendedandrestatedandthe2012StockInducementEquityPlan(2012Plan).Sharesissuedtoemployeesasaresultofpurchasesorexercisesundertheseplansaregenerallyissuedfromsharesheldintreasurystock.

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Thefollowingtablesummarizesshare-basedcompensationexpenseandtotalincometaxbenefitrecognizedforfiscalyears2019,2018and2017(inthousands):

  Years Ended March 31,

  2019   2018   2017Costofgoodssold   $ 3,812   $ 3,733   $ 2,663Marketingandselling   20,630   17,765   14,723Researchanddevelopment   7,368   6,381   4,200Generalandadministrative   18,455   16,259   14,304Totalshare-basedcompensationexpense   50,265   44,138   35,890

Incometaxbenefit   (17,091)   (15,998)   (8,536)Totalshare-basedcompensationexpense,netofincometaxbenefit   $ 33,174   $ 28,140   $ 27,354

The income tax benefit in the respective period primarily consists of tax benefit related to the share-based compensation expense for theperiodanddirecttaxbenefitrealized,includingnetexcesstaxbenefitsrecognizedfromshare-basedawardsvestedorexercisedupontheadoptionofASU2016-09onApril1,2017.TheincometaxbenefitfortheyearendedMarch31,2018wasreducedbytheincometaxprovisionresultingfromtheremeasurementofapplicabledeferredtaxassetsandliabilitiesduetotheenactmentoftheTaxActintheUnitedStatesonDecember22,2017.See"Note7-IncomeTaxes"formoreinformation.

AsofMarch31, 2019 ,2018and2017, thebalanceof capitalizedstock-basedcompensationincludedininventorywas$0.9million,$0.7millionand$0.6million,respectively.

Thefollowingtablesummarizestotalunamortizedshare-basedcompensationexpenseandtheremainingperiodoverwhichsuchexpenseisexpectedtoberecognized,onaweighted-averagebasisbytypeofgrant(inthousands,exceptnumberofmonths):

  March 31, 2019

 Unamortized

Expense  Remaining

MonthsESPP   $ 1,515   4StockOptions   7,384   35Time-basedRSUs   65,798   33Market-basedandperformance-basedRSUs   16,277   20Totalunamortizedshare-basedcompensationexpense

  $ 90,974    

Underthe1996ESPPand2006ESPPplans,eligibleemployeesmaypurchasesharesatthelowerof85%ofthefairmarketvalueatthebeginningortheendofeachofferingperiod,whichisgenerallysixmonths.Subjecttocontinuedparticipationintheseplans,purchaseagreementsareautomaticallyexecutedattheendofeachofferingperiod.Anaggregateof29.0millionshareswasreservedforissuanceunderthe1996and2006ESPPplans.AsofMarch31,2019,atotalof5.4millionshareswasavailablefornewawardsundertheseplans.

The2006Planprovidesforthegranttoeligibleemployeesandnon-employeedirectorsofstockoptions,stockappreciationrights,restrictedstockandRSUs.Awardsunderthe2006Planmaybeconditionedoncontinuedemployment,thepassageoftimeorthesatisfactionofperformanceandmarketvestingcriteria.The2006Plan,asamended,hasnoexpirationdate.Allstockoptionsunderthisplanhavetermsnotexceedingtenyearsandareissuedatexercisepricesnotlessthanthefairmarketvalueonthedateofgrant.Anaggregateof30.6millionshareswasreservedforissuanceunderthe2006Plan.AsofMarch31,2019,atotalof9.2millionshareswasavailablefornewawardsunderthisplan.

Time-basedRSUsgrantedtoemployeesunderthe2006Plangenerallyvestinfourequalannualinstallmentsonthegrantdateanniversary.Time-basedRSUsgrantedtonon-executiveboardmembersunderthe2006Planvestonthegrantdateanniversary,orifearlierandonlyifthenon-executiveboardmemberisnotre-electedasadirectoratsuchannualgeneralmeeting,thedateofthenextannualgeneralmeetingfollowingthegrantdate.

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Performance-basedRSUsgrantedinfiscalyears2016and2017underthe2006Planvestcontingentupontheachievementofpredeterminedfinancialmetrics,theperformanceperiodofwhichisapproximatelythreeyears.Theperformanceconditioncanbeachievedbeforetheendoftheperformanceperiod.Market-basedoptionsgrantedunderthe2006PlanvestuponmeetingtheCompany'ssharepriceperformancecriteria.Thenumberofsharesofcommonstocktobereceivedatvestingformarket-basedRSUsgrantedinfiscalyears2016and2017underthe2006Planwillrangefrom0percentto150percentofthetargetnumberofstockunitsbasedontheCompany'stotalstockholderreturn(TSR)relativetotheperformanceofcompaniesintheNASDAQ-100Indexforeachmeasurementperiod,generallyoverathree-yearperiod.Infiscalyears2018and2019,theCompanygrantedRSUswithbothperformanceandmarketconditions,whichvestattheendofthethree-yearperformanceperioduponmeetingpredeterminedfinancialmetricsoverthreeyears,withthenumberofsharestobereceiveduponvestingdeterminedbasedonweightedaverageconstantcurrencyrevenuegrowthrateandtheCompany'sTSRrelativetotheperformanceofcompaniesintheNASDAQ-100Indexoverthesamethreeyearsperiod.TheCompanypresentssharesgrantedandvestedat100percentofthetargetofthenumberofstockunitsthatmaypotentiallyvest.

Underthe2012Plan,stockoptionsandRSUsmaybegrantedtoeligibleemployeestoserveasaninducementtoenterintoemploymentwiththeCompany.Awardsunderthe2012Planmaybeconditionedoncontinuedemployment,thepassageoftimeorthesatisfactionofmarketstockperformancecriteria,basedonindividuallywrittenemploymentofferletter.The2012PlanhasanexpirationdateofMarch28,2022.Anaggregateof1.8millionshareswasreservedforissuanceunderthe2012Plan.AsofMarch31,2019,noshareswereavailablefornewawardsunderthisplan.

Theestimatesofshare-basedcompensationexpenserequireanumberofcomplexandsubjectiveassumptionsincludingstockpricevolatility,employeeexercisepatterns,probabilityofachievementofthesetperformancecondition,dividendyield,relatedtaxeffectsandtheselectionofanappropriatefairvaluemodel.

ThegrantdatefairvalueoftheawardsusingtheBlack-Scholes-Mertonoption-pricingvaluationmodelandMonte-Carlosimulationmethodisdeterminedwiththefollowingassumptionsandvalues:

    Stock Options   Employee Stock Purchase Plans    Years Ended March 31,   Years Ended March 31,

  2019   2018   2017   2019   2018   2017Dividendyield   1.72%   *   *   1.73%   1.67%   2.50%Risk-freeinterestrate   2.45%   *   *   2.35%   1.37%   0.51%Expectedvolatility   33%   *   *   31%   27%   35%Expectedlife(years)   6.2   *   *   0.5   0.5   0.5Weightedaveragegrantdatefairvaluepershare   $ 11.55   *   *   $ 9.33   $ 8.69   $ 5.73

*Notapplicableasnostockoptionsweregrantedintheperiod.

RSUs with Market Conditions   Years Ended March 31,

  2019   2018   2017Dividendyield   1.59%   1.75%   3.29%Risk-freeinterestrate   2.51%   1.40%   0.86%Expectedvolatility   30%   31%   34%Expectedlife(years)   3.0   3.0   3.0

ThedividendyieldassumptionisbasedontheCompany'shistoryandfutureexpectationsofdividendpayouts.TheunvestedRSUsorunexercisedoptionsarenoteligibleforthesedividends.Theexpectedlifeisbasedonthepurchaseofferingsperiodsexpectedtoremainoutstandingforemployeestockpurchaseplan,ortheperformanceperiodforRSUswithmarketconditions.Theexpectedlifeforstockoptionsisbasedonhistoricalsettlementrates,whichtheCompanybelievesaremostrepresentativeoffutureexerciseandpost-vestingterminationbehaviors.ExpectedvolatilityisbasedonhistoricalvolatilityusingtheCompany'sdailyclosingprices,orincludingthevolatilityofcomponentsoftheNASDAQ100indexformarket-basedRSUs,overtheexpectedlife.TheCompanyconsidersthehistoricalpricevolatilityofitssharesasmostrepresentativeoffuturevolatility.Therisk-freeinterestrate

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assumptionsarebasedupontheimpliedyieldofU.S.Treasuryzero-couponissuesappropriatefortheexpectedlifeoftheCompany'sshare-basedawards.

ForRSUswithperformanceconditions,theCompanyestimatestheprobabilityandtimingoftheachievementofthesetperformanceconditionatthetimeofthegrantbasedonthehistoricalfinancialperformanceandthefinancialforecastintheremainingperformanceperiodandreassessestheprobabilityinsubsequentperiodswhenactualresultsornewinformationbecomeavailable.

AsummaryoftheCompany'sstockoptionactivitiesunderallstockplansforfiscalyears2019,2018and2017isasfollows:

  Number of Shares  Weighted-Average

Exercise Price  

Weighted-AverageRemaining Contractual

Term 

Aggregate IntrinsicValue

    (In thousands)       (Years)   (In thousands)Outstanding,March31,2016   5,334          Granted   —          Exercised   (1,784)         $ 14,627Canceledorexpired   (500)          

Outstanding,March31,2017   3,050          Granted   —          Exercised   (994)         $ 8,347Canceledorexpired   (16)          

Outstanding,March31,2018   2,040   $ 14    Granted   649   $ 39    Exercised   (82)   $ 21     $ 1,707Canceledorexpired   —      

Outstanding,March31,2019   2,607   $ 20   4.8   $ 51,005Vestedandexercisable,March31,2019   1,958   $ 13   3.1   $ 50,593

AsofMarch31,2019,theexercisepriceofoutstandingoptionsrangedfrom$2to$39pershareoption.

Thetaxbenefitrealizedforthetaxdeductionfromoptionsexercisedduringfiscalyears2019,2018and2017was$0.2million,$1.8millionand$4.2million,respectively.

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AsummaryoftheCompany'stime-based,market-based,andperformance-basedRSUactivitiesforfiscalyears2019,2018and2017isasfollows:

  Number of Shares  

Weighted-AverageGrant Date Fair

Value  

Weighted-AverageRemaining Vesting

Period  AggregateFair Value

    (In thousands)       (Years)   (In thousands)Outstanding,March31,2016   5,521          Granted—time-based   2,390   $ 16        Granted—market-based   160   $ 15        Granted-performance-based   604   $ 15        Vested   (2,126)         $ 48,644Canceledorexpired   (368)          

Outstanding,March31,2017   6,181   $ 14        Granted—time-based   1,212   $ 33        Granted-performance-based   409   $ 33        Vested   (2,248)         $ 81,582Canceledorexpired   (333)          

Outstanding,March31,2018   5,221   $ 20        Granted—time-based   1,290   $ 40        Granted—marketandperformance-based   381   $ 39        Vested   (2,148)   $ 17       $ 89,159Canceledorexpired   (323)   $ 26        Outstanding,March31,2019   4,421   $ 29   1.2   $ 173,970

TheRSUoutstandingasofMarch31,2019aboveincludes1.1millionshareswithmarket-basedandperformance-basedvestingconditions.

ThetaxbenefitrealizedforthetaxdeductionfromRSUsthatvestedduringfiscalyears2019,2018and2017was$16.2million,$20.3millionand$13.1million,respectively.

Defined Contribution Plans

CertainoftheCompany'ssubsidiarieshavedefinedcontributionemployeebenefitplanscoveringalloraportionoftheiremployees.Contributionstotheseplansarediscretionaryforcertainplansandarebasedonspecifiedorstatutoryrequirementsforothers.Thechargestoexpensefortheseplansforfiscalyears2019,2018and2017,were$8.7million,$7.6millionand$5.8million,respectively.

Defined Benefit Plans

CertainoftheCompany'ssubsidiariessponsordefinedbenefitpensionplansornon-retirementpost-employmentbenefitscoveringsubstantiallyalloftheiremployees.Benefitsareprovidedbasedonemployees'yearsofserviceandearnings,orinaccordancewithapplicableemployeebenefitregulations.TheCompany'spracticeistofundamountssufficienttomeettherequirementssetforthintheapplicableemployeebenefitandtaxregulations.

TheCompanyrecognizestheoverfundedorunderfundedstatusofdefinedbenefitpensionplansandnon-retirementpost-employmentbenefitobligationsasanassetorliabilityinitsconsolidatedbalancesheetsandrecognizeschangesinthefundedstatusofdefinedbenefitpensionplansintheyearinwhichthechangesoccurthroughaccumulatedothercomprehensiveincome(loss),whichisacomponentofshareholders'equity.Eachplan'sassetsandbenefitobligationsareremeasuredasofMarch31eachyear.

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Thenetperiodicbenefitcostofthedefinedbenefitpensionplansandthenon-retirementpost-employmentbenefitobligationsforfiscalyears2019,2018and2017wasasfollows(inthousands):

  Years Ended March 31,

  2019   2018   2017Servicecosts   $ 10,564   $ 9,715   $ 10,385Interestcosts   1,301   1,126   800Expectedreturnonplanassets   (2,167)   (1,792)   (1,724)Amortization:            Nettransitionobligation   —   —   4

Netpriorservicecreditrecognized   (443)   (51)   (117)Netactuariallossrecognized   450   242   1,032Settlement   (97)   —   —

Totalnetperiodicbenefitcost  $ 9,608   $ 9,240   $ 10,380

Thecomponentsofnetperiodicbenefitcostotherthantheservicecostscomponentareincludedintheline“otherincome(expense),net”intheconsolidatedstatementsofoperations.

Thechangesinprojectedbenefitobligationsforfiscalyears2019and2018wereasfollows(inthousands):

  Years Ended March 31,

  2019   2018Projectedbenefitobligations,beginningoftheyear   $ 128,915   $ 114,640Servicecosts   10,564   9,715Interestcosts   1,301   1,126Planparticipantcontributions   3,666   3,522Actuarialgains(losses)   9,506   (1,580)Benefitspaid   (3,793)   (1,202)Planamendmentrelatedtostatutorychange   (705)   (2,519)Settlementandcurtailment   (335)   —Administrativeexpensepaid   (142)   (144)Currencyexchangeratechangesandother   (5,315)   5,357

Projectedbenefitobligations,endoftheyear   $ 143,662   $ 128,915

TheaccumulatedbenefitobligationforalldefinedbenefitpensionplansasofMarch31,2019and2018was$118.7millionand$108.9million,respectively.

Thefollowingtablepresentsthechangesinthefairvalueofdefinedbenefitpensionplanassetsforfiscalyears2019and2018(inthousands):

  Years Ended March 31,

  2019   2018Fairvalueofplanassets,beginningoftheyear   $ 84,718   $ 71,376Actualreturnonplanassets   3,350   1,824Employercontributions   6,383   5,995Planparticipantcontributions   3,666   3,522Benefitspaid   (3,793)   (1,202)Settlementandcurtailment   (335)   —Administrativeexpensespaid   (142)   (144)Currencyexchangeratechanges   (3,482)   3,347Fairvalueofplanassets,endoftheyear   $ 90,365   $ 84,718

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TheCompany'sinvestmentobjectivesaretoensurethattheassetsofitsdefinedbenefitplansareinvestedtoprovideanoptimalrateofinvestmentreturnonthetotalinvestmentportfolio,consistentwiththeassumptionofareasonablerisklevel,andtoensurethatpensionfundsareavailabletomeettheplans'benefitobligationsastheybecomedue.TheCompanybelievesthatawell-diversifiedinvestmentportfoliowillresultinthehighestattainableinvestmentreturnwithanacceptablelevelofoverallrisk.Investmentstrategiesandallocationdecisionsarealsogovernedbyapplicablegovernmentalregulatoryagencies.TheCompany'sinvestmentstrategywithrespecttoitslargestdefinedbenefitplan,whichisavailableonlytoSwissemployees,istoinvestperthefollowingallocation:33%inequities,34%inbonds,28%inrealestate,2%incashandcashequivalentsandtheremaininginotherinvestments.TheCompanyalsocaninvestinrealestatefunds,commodityfunds,andhedgefundsdependinguponeconomicconditions.

ThefollowingtablespresentthefairvalueofthedefinedbenefitpensionplanassetsbymajorcategoriesandbylevelswithinthefairvaluehierarchyasofMarch31,2019and2018(inthousands):

  March 31,

  2019   2018

  Level 1   Level 2   Total   Level 1   Level 2   TotalCashandcashequivalents   $ 10,737   $ —   $ 10,737   $ 18,331   $ 24   $ 18,355Equitysecurities   27,559   —   27,559   26,204   —   26,204Debtsecurities   26,823   —   26,823   25,150   —   25,150Swissrealestatefunds   21,659   —   21,659   12,096   —   12,096Hedgefunds   —   912   912   —   —   —Other   2,377   298   2,675   2,623   290   2,913Totalfairvalueofplanassets

  $ 89,155   $ 1,210   $ 90,365   $ 84,404   $ 314   $ 84,718

Thefundedstatusoftheplanswasasfollows(inthousands):

  Years Ended March 31,   2019   2018Fairvalueofplanassets   $ 90,365   $ 84,718Less:projectedbenefitobligations   143,662   128,915Underfundedstatus   $ (53,297)   $ (44,197)

Amountsrecognizedonthebalancesheetfortheplanswereasfollows(inthousands):

  March 31,

  2019   2018Currentliabilities   $ 1,849   $ 1,763Non-currentliabilities   51,448   42,434Totalliabilities   $ 53,297   $ 44,197

Amountsrecognizedinaccumulatedothercomprehensivelossrelatedtodefinedbenefitpensionplanswereasfollows(inthousands):

  March 31,

  2019   2018   2017Netpriorservicecredits   $ 3,965   $ 3,843   $ 1,274Netactuarialloss   (17,630)   (9,821)   (11,407)Accumulatedothercomprehensiveloss   (13,665)   (5,978)   (10,133)

Deferredtax   (267)   (420)   (347)Accumulatedothercomprehensiveloss,netoftax   $ (13,932)   $ (6,398)   $ (10,480)

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ThefollowingtablepresentstheamountsincludedinaccumulatedothercomprehensivelossasofMarch31,2019,whichareexpectedtoberecognizedasacomponentofnetperiodicbenefitcostinfiscalyear2020(inthousands):

 Year Ending

March 31, 2020Amortizationofnetpriorservicecredits   $ (432)Amortizationofnetactuarialloss   645    $ 213

TheCompanyreassessesitsbenefitplanassumptionsonaregularbasis.Theactuarialassumptionsforthedefinedbenefitplansforfiscalyears2019and2018wereasfollows:

  Years Ended March 31,

  2019   2018Benefit Obligations:        Discountrate   0.55%-7.25%   0.85%-7.50%Estimatedrateofcompensationincrease   2.50%-10.00%   2.25%-10.00%Periodic Costs:        Discountrate   0.75%-7.50%   0.75%-7.00%Estimatedrateofcompensationincrease   2.50%-10.00%   2.50%-10.00%Expectedaveragerateofreturnonplanassets   0.75%-2.75%   1.00%-2.50%

Thediscountrateisestimatedbasedoncorporatebondyieldsorsecuritiesofsimilarqualityintherespectivecountry,withadurationapproximatingtheperiodoverwhichthebenefitobligationsareexpectedtobepaid.TheCompanybasesthecompensationincreaseassumptionsonhistoricalexperienceandfutureexpectations.TheexpectedaveragerateofreturnfortheCompany'sdefinedbenefitpensionplansrepresentstheaveragerateofreturnexpectedtobeearnedonplanassetsovertheperiodthatthebenefitobligationsareexpectedtobepaid,basedongovernmentbondnotesintherespectivecountry,adjustedforcorporateriskpremiumsasappropriate.

ThefollowingtablereflectsthebenefitpaymentsthattheCompanyexpectstheplanstopayintheperiodsnoted(inthousands):

Years Ending March 31,    2020   $ 7,9562021   7,2252022   7,5532023   7,2942024   7,6072025-2029   39,367    $ 77,002

TheCompanyexpectstocontribute$5.5milliontoitsdefinedbenefitpensionplansduringfiscalyear2020.

Deferred Compensation Plan

OneoftheCompany'ssubsidiariesoffersadeferredcompensationplanthatpermitseligibleemployeestomake100%vestedsalaryandincentivecompensationdeferralswithinestablishedlimits.TheCompanydoesnotmakecontributionstotheplan.

Thedeferredcompensationplan'sassetsconsistofmarketablesecuritiesandareincludedinotherassetsontheconsolidatedbalancesheets.Themarketablesecuritiesareclassifiedastradinginvestmentsandwererecordedatafairvalueof$20.4millionand$17.7millionasofMarch31,2019and2018,respectively,basedonquotedmarketprices.TheCompanyalsohad$20.4millionand$17.7millionindeferredcompensationliabilityasofMarch31,2019and2018,respectively.Earnings,gainsandlossesontradinginvestmentsareincludedinother

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income(expense),netandcorrespondingchangesindeferredcompensationliabilityareincludedinoperatingexpensesandcostofgoodssold.

Note 6—Other Income (Expense), net

Otherincome(expense),netcomprisesofthefollowing(inthousands):

  Years Ended March 31,

  2019   2018   2017Investmentincomerelatedtothedeferredcompensationplan   $ 664   $ 1,386   $ 1,343Currencyexchangegain(loss),net   (3,608)   (4,613)   169Other   2,508   790   165Otherincome(expense),net   $ (436)   $ (2,437)   $ 1,677

ThecomponentsofnetperiodicbenefitcostotherthantheservicecostcomponentfortheyearendedMarch31,2019areincludedintheline“Other”aboveasaresultofadoptingASU2017-07effectiveApril1,2018.Theimpacttothecomparativeperiodswasimmaterialandthereforethepriorperiodstatementsofoperationswerenotrevised.

Note 7—Income Taxes

TheCompanyisincorporatedinSwitzerlandbutoperatesinvariouscountrieswithdifferingtaxlawsandrates.Further,aportionoftheCompany'sincome(loss)beforetaxesandtheprovisionfor(benefitfrom)incometaxesisgeneratedoutsideofSwitzerland.

Incomefromcontinuingoperationsbeforeincometaxesforfiscalyears2019,2018and2017issummarizedasfollows(inthousands):

  Years Ended March 31,

  2019   2018   2017Swiss   $ 212,986   $ 177,935   $ 161,544Non-Swiss   58,147   54,330   53,445Incomebeforetaxes   $ 271,133   $ 232,265   $ 214,989

Theprovisionfor(benefitfrom)incometaxesissummarizedasfollows(inthousands):

    Years Ended March 31,    2019   2018   2017Current:            Swiss   $ 1,364   $ 3,526   $ 1,934Non-Swiss   24,334   13,142   9,774

Deferred:            Non-Swiss   (12,138)   7,055   (2,595)

Provisionforincometaxes   $ 13,560   $ 23,723   $ 9,113

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Thedifferencebetweentheprovisionforincometaxesandtheexpectedtaxprovisionatthestatutoryincometaxrateof8.5%isreconciledbelow(inthousands):

  Years Ended March 31,

  2019   2018   2017Expectedtaxprovisionatstatutoryincometaxrates   $ 23,046   $ 19,743   $ 18,274Incometaxesatdifferentrates   (10,113)   (9,611)   (5,247)Researchanddevelopmenttaxcredits   (5,432)   (4,124)   (2,309)Executivecompensation   3,344   1,835   654Stock-basedcompensation   (7,288)   (9,376)   1,794DeferredtaxeffectsfromTaxAct   —   22,325   —Valuationallowance   1,891   533   1,024Restructuringcharges/(credits)   961   (10)   2Taxreserves(releases),net   8,269   3,627   (5,570)Other,net   (1,118)   (1,219)   491Provisionforincometaxes   $ 13,560   $ 23,723   $ 9,113

Deferredincometaxassetsandliabilitiesconsistofthefollowing(inthousands):

  March 31,

  2019   2018Deferredtaxassets:     Netoperatinglosscarryforwards   $ 16,323   $ 15,476Taxcreditcarryforwards   52,263   45,421Accruals   52,304   42,765Depreciationandamortization   5,716   1,505Share-basedcompensation   8,703   7,479

Grossdeferredtaxassets   135,309   112,646Valuationallowance   (28,375)   (25,148)

Grossdeferredtaxassetsaftervaluationallowance   106,934   87,498Deferredtaxliabilities:     Acquiredintangibleassetsandother   (18,176)   (4,827)

Grossdeferredtaxliabilities   (18,176)   (4,827)Deferredtaxassets,net   $ 88,758   $ 82,671

TheTaxActenactedintheUnitedStatesinfiscalyear2018permanentlyreducedthecorporateincometaxratefrom35%to21%effectivefortaxyearsincludingorcommencingonJanuary1,2018.Italsorepealedcorporatealternativeminimumtax,limitedvariousbusinessdeductionssuchasexecutivecompensationunderIRC162(m)andmodifiedthemaximumdeductionofnetoperatinglosswithnocarrybackbutindefinitecarryforwardprovisionamongotherthings.TheCompanyrecordedaprovisionalincometaxchargeof$21.7million,netofvaluationallowanceagainsttaxcredits,infiscalyear2018toremeasurethedeferredtaxeffectsat21%.

TheCompanycompleteditsreview,inthethirdquarteroffiscalyear2019,ofpreviouslyrecordedprovisionalincometaxamountsrelatedtonetdeferredtaxassetsimpactedbytheTaxActandconcludedthatadditionalinformation,interpretationandguidancethatbecameavailableduringthetwelve-monthmeasurementperioddidnotaltertheCompany’sapplicationoftaxlawinremeasuringgrossdeferredtaxassetsandrelatedvaluationallowance.Therewerenoadjustmentsdeemednecessaryinfiscalyear2019.

ManagementregularlyassessestheabilitytorealizedeferredtaxassetsrecordedintheCompany'sentitiesbasedupontheweightofavailableevidence,includingsuchfactorsasrecentearningshistoryandexpectedfuturetaxableincome.IntheeventthattheCompanychangesitsdeterminationastotheamountofdeferredtaxassets

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thatcanberealized,theCompanywilladjustitsvaluationallowancewithacorrespondingimpacttotheprovisionforincometaxesintheperiodinwhichsuchdeterminationismade.

TheCompanyhadavaluationallowanceof$28.4millionatMarch31,2019,comparedto$25.1millionatMarch31,2018.Thefederalvaluationallowanceagainsttaxcreditswasreducedfrom$2.3millionasofMarch31,2018to$1.9millionasofMarch31,2019duetoareleaseof$0.4million.TheCompanyhadavaluationallowanceof$25.7millionasofMarch31,2019againstdeferredtaxassetsinthestateofCalifornia,anincreasefrom$22.1millionasofMarch31,2018.Theincreaseprimarilyrelatesto$2.3millionand$1.3millionfromactivitiesrelatedtodeferredtaxassetsandtheacquisitionofBlueMicrophones,respectively.Theremainingvaluationallowanceprimarilyrepresents$0.8millionforvarioustaxcreditcarryforwards.TheCompanydeterminedthatitismorelikelythannotthattheCompanywouldnotgeneratesufficienttaxableincomeinthefuturetoutilizesuchdeferredtaxassets.

AsofMarch31,2019,theCompanyhadforeignnetoperatinglossandtaxcreditcarryforwardsforincometaxpurposesof$252.6millionand$58.1million.Unusednetoperatinglosscarryforwardswillexpireatvariousdatesinfiscalyears2020to2039.CertainnetoperatinglosscarryforwardsintheUnitedStatesrelatetoacquisitionsand,asaresult,arelimitedintheamountthatcanbeutilizedinanyoneyear.Thetaxcreditcarryforwardswillbegintoexpireinfiscalyear2020.

Swissincometaxesandnon-Swisswithholdingtaxesassociatedwiththerepatriationofearningsorforothertemporarydifferencesrelatedtoinvestmentsinnon-Swisssubsidiarieshavenotbeenprovidedfor,astheCompanyintendstoreinvesttheearningsofsuchsubsidiariesindefinitelyortheCompanyhasconcludedthatnoadditionaltaxliabilitywouldariseonthedistributionofsuchearnings.IftheseearningsweredistributedtoSwitzerlandintheformofdividendsorotherwise,orifthesharesoftherelevantnon-Swisssubsidiariesweresoldorotherwisetransferred,theCompanymaybesubjecttoadditionalSwissincometaxesandnon-Swisswithholdingtaxes.AsofMarch31,2019,thecumulativeamountofunremittedearningsofnon-Swisssubsidiariesforwhichnoincometaxeshavebeenprovidedisapproximately$100.3million.Theamountofunrecognizeddeferredincometaxliabilityrelatedtotheseearningsisestimatedtobeapproximately$0.8million.

TheCompanyfollowsatwo-stepapproachinrecognizingandmeasuringuncertaintaxpositions.Thefirststepistoevaluatethetaxpositionforrecognitionbydeterminingiftheweightofavailableevidenceindicatesthatitismorelikelythannotthatthepositionwillbesustainedonaudit,includingresolutionofrelatedappealsorlitigationprocesses,ifany.Thesecondstepistomeasurethetaxbenefitasthelargestamountthatismorethan50%likelyofbeingrealizeduponultimatesettlement.

AsofMarch31,2019and2018,thetotalamountofunrecognizedtaxbenefitsduetouncertaintaxpositionswas$76.5millionand$69.1million,respectively,allofwhichwouldaffecttheeffectiveincometaxrateifrecognized.

AsofMarch31,2019and2018,theCompanyhad$36.4millionand$35.0million,respectively,innon-currentincometaxespayable,includinginterestandpenalties,relatedtotheCompany'sincometaxliabilityforuncertaintaxpositions.

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Theaggregatechangesingrossunrecognizedtaxbenefitsinfiscalyears2019,2018and2017wereasfollows(inthousands):

March31,2016   $ 69,879Lapseofstatuteoflimitations   (14,161)Decreasesinbalancesrelatedtotaxpositionstakenduringprioryears   (1,610)Increasesinbalancesrelatedtotaxpositionstakenduringtheyear   9,559

March31,2017   $ 63,667Lapseofstatuteoflimitations   (7,505)Decreasesinbalancesrelatedtotaxpositionstakenduringprioryears   (704)Increasesinbalancesrelatedtotaxpositionstakenduringtheyear   13,673

March31,2018   $ 69,131Lapseofstatuteoflimitations   (2,511)Decreasesinbalancesrelatedtotaxpositionstakenduringprioryears   (1,550)Increasesinbalancesrelatedtotaxpositionstakenduringtheyear   11,479

March31,2019   $ 76,549

TheCompanyrecognizesinterestandpenaltiesrelatedtounrecognizedtaxpositionsinincometaxexpense.TheCompanyrecognized$0.6million,$0.6millionand$0.7millionininterestandpenaltiesinincometaxexpenseduringfiscalyears2019,2018and2017,respectively.AsofMarch31,2019and2018,theCompanyhad$2.5millionand$2.3million,respectively,ofaccruedinterestandpenaltiesrelatedtouncertaintaxpositions.

TheCompanyfilesSwissandforeigntaxreturns.TheCompanyreceivedfinaltaxassessmentsinSwitzerlandthroughfiscalyear2017.ForotherforeignjurisdictionssuchastheUnitedStates,theCompanyisgenerallynotsubjecttotaxexaminationsforyearspriortofiscalyear2016.TheCompanyisunderexaminationandhasreceivedassessmentnoticesinforeigntaxjurisdictions.Iftheexaminationsareresolvedunfavorably,thereisapossibilitytheymayhaveamaterialnegativeimpactonitsresultsofoperations.

AlthoughtheCompanyhasadequatelyprovidedforuncertaintaxpositions,theprovisionsonthesepositionsmaychangeasrevisedestimatesaremadeortheunderlyingmattersaresettledorotherwiseresolved.Duringthenext12months,itisreasonablypossiblethattheamountofunrecognizedtaxbenefitscouldincreaseordecreasesignificantlyduetochangesintaxlawinvariousjurisdictions,newtaxauditsandchangesintheU.S.Dollarascomparedtoothercurrencies.Excludingthesefactors,uncertaintaxpositionsmaydecreasebyasmuchas$3.8millionprimarilyfromthelapseofthestatutesoflimitationsinvariousjurisdictionsduringthenext12months.

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Note 8—Balance Sheet Components

ThefollowingtablepresentsthecomponentsofcertainbalancesheetassetamountsasofMarch31,2019and2018(inthousands):

  March 31,

  2019   2018Accountsreceivable,net:       Accountsreceivable   $ 573,348   $ 482,872Allowancefordoubtfulaccounts   (84)   (122)Allowanceforsalesreturns(1)   (6,486)   (25,515)Allowanceforcooperativemarketingarrangements(1)   (35,080)   (30,389)Allowanceforcustomerincentiveprograms(1)   (60,036)   (70,592)Allowanceforpricingprograms(1)   (88,353)   (141,369)

    $ 383,309   $ 214,885

Inventories:     Rawmaterials   $ 40,970   $ 33,603Finishedgoods   252,525   226,303

    $ 293,495   $ 259,906

Othercurrentassets:     Value-addedtaxreceivables   $ 34,321   $ 29,477Prepaidexpensesandotherassets(1)   34,795   26,885

    $ 69,116   $ 56,362

Property,plantandequipment,net:     Plant,buildingsandimprovements   $ 65,219   $ 60,747Equipmentandtooling   197,540   183,466Computerequipment   24,132   22,752Software   62,663   65,723

    349,554   332,688Less:accumulateddepreciationandamortization   (280,793)   (260,284)

    68,761   72,404Construction-in-process   7,021   11,029Land   2,770   2,871

    $ 78,552   $ 86,304

Otherassets:     Deferredtaxassets   $ 90,808   $ 84,651Tradinginvestmentsfordeferredcompensationplan   20,363   17,748Investmentinprivatelyheldcompanies   16,022   12,448Otherassets   5,260   5,908

    $ 132,453   $ 120,755

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ThefollowingtablepresentsthecomponentsofcertainbalancesheetliabilityamountsasofMarch31,2019and2018(inthousands):

  March 31,

  2019   2018Accruedandothercurrentliabilities:     Accruedpersonnelexpenses   $ 103,166   $ 82,330Accruedsalesreturnliability(1)

  37,749   —Accruedcustomermarketing,pricingandincentiveprograms(1)   143,888   71,962Warrantyaccrual   21,524   16,279Incometaxespayable   6,207   4,354Othercurrentliabilities   121,363   106,807

    $ 433,897   $ 281,732

Othernon-currentliabilities:     Warrantyaccrual   $ 12,705   $ 11,294Obligationfordeferredcompensationplan   20,363   17,748Employeebenefitplanobligation   51,448   42,434Deferredtaxliability   2,050   1,980Othernon-currentliabilities   7,016   8,468

    $ 93,582   $ 81,924

(1)CertainallowancesforsalesreturnandcertainotherCustomerProgramswereincludedwithinaccountsreceivable,netbalanceasofMarch31,2018.UponadoptionofTopic606,suchbalancesarepresentedasaccruedrevenuereservefromreturnsandaccruedcustomermarketing,pricingandincentiveprogramsincludedinaccruedandothercurrentliabilities,andasreturnassetsincludedinothercurrentassets,respectively,ontheconsolidatedbalancesheetasofMarch31,2018.RefertoNote2totheconsolidatedfinancialstatementsformoreinformation.

Note 9—Fair Value Measurements

TheCompanyconsidersfairvalueastheexchangepricethatwouldbereceivedforanassetorpaidtotransferaliability(anexitprice)intheprincipalormostadvantageousmarketfortheassetorliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.TheCompanyutilizesthefollowingthree-levelfairvaluehierarchytoestablishtheprioritiesoftheinputsusedtomeasurefairvalue:

• Level1—Quotedpricesinactivemarketsforidenticalassetsorliabilities.• Level2—ObservableinputsotherthanquotedmarketpricesincludedinLevel1,suchasquotedpricesforsimilarassetsandliabilitiesin

activemarkets;quotedpricesforidenticalorsimilarassetsandliabilitiesinmarketsthatarenotactive;orotherinputsthatareobservableorcanbecorroboratedbyobservablemarketdata.

• Level3—Unobservableinputsthataresupportedbylittleornomarketactivityandthataresignificanttothefairvalueoftheassetsorliabilities.Thisincludescertainpricingmodels,discountedcashflowmethodologiesandsimilartechniquesthatusesignificantunobservableinputs.

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ThefollowingtablepresentstheCompany'sfinancialassetsandliabilitiesthatwereaccountedforatfairvalueonarecurringbasis,excludingassetsrelatedtotheCompany'sdefinedbenefitpensionplans,classifiedbythelevelwithinthefairvaluehierarchy(inthousands):

  March 31, 2019   March 31, 2018

  Level 1   Level 2   Level 3   Level 1   Level 2   Level 3Assets:                 Cashequivalents   $ 496,434   $ —   $ —   $ 492,535   $ —   $ —Tradinginvestmentsfordeferredcompensationplanincludedinotherassets:                 Moneymarketfunds   $ 4,080   $ —   $ —   $ 2,881   $ —   $ —Mutualfunds   16,283   —   —   14,867   —   —

Totaloftradinginvestmentsfordeferredcompensationplan   $ 20,363   $ —   $ —   $ 17,748   $ —   $ —

                         

Currencyderivativeassetsincludedinothercurrentassets   $ —   $ 455   $ —   $ —   $ —   $ —                         

Liabilities:                        Currencyderivativeliabilitiesincludedinaccruedandothercurrentliabilities   $ —   $ 36   $ —   $ —   $ 34   $ —

Investment Securities

ThemarketablesecuritiesfortheCompany'sdeferredcompensationplanarerecordedatafairvalueof$20.4millionand$17.7millionasofMarch31,2019and2018,respectively,basedonquotedmarketprices.QuotedmarketpricesareobservableinputsthatareclassifiedasLevel1withinthefairvaluehierarchy.Unrealizedtradinggainsrelatedtotradingsecuritiesforfiscalyears2019,2018and2017werenotmaterialandareincludedinotherincome(expense),netintheconsolidatedstatementsofoperations.

Equity Method Investments

TheCompanyhascertainnon-marketableinvestmentsincludedinotherassetsthatareaccountedforundertheequitymethodofaccounting,withacarryingvalueof$6.6millionand$5.1millionasofMarch31,2019and2018,respectively.

Assets Measured at Fair Value on a Nonrecurring Basis

TheCompany’snon-financialassets,suchasintangibleassetsandacquisition-relatedproperty,plantandequipment,arerecordedatfairvalueonlyuponinitialrecognitionorifanimpairmentisrecognized.Therewasnoimpairmentoflong-livedassetsduringfiscalyears2019,2018and2017.

Financial Assets. TheCompanyhascertaininvestmentsinequitysecuritiesofprivatelyheldentitieswithoutreadilydeterminablefairvaluesduetotheabsenceofquotedmarketprices,theinherentlackofliquidity,andthefactthatinputsusedtomeasurefairvalueareunobservableandrequiremanagement'sjudgment.Whencertaineventsorcircumstancesindicatethatimpairmentmayexist,theCompanyrevaluestheinvestmentsusingvariousassumptions,includingthefinancialmetricsandratiosofcomparablepubliccompanies.Thecarryingvalueisalsoadjustedforobservablepricechangeswiththesameorsimilarsecurityfromthesameissuer.TheamountoftheseinvestmentsincludedinotherassetsasofMarch31,2019andMarch31,2018was$9.5millionand$7.3million,respectively.Therewasnoimpairmentoftheseassetsduringfiscalyears2019and2018.

Non-Financial Assets. Goodwill,intangibleassets,andproperty,plantandequipment,arenotrequiredtobemeasuredatfairvalueonarecurringbasis.However,ifcertaintriggeringeventsoccur(ortestedatleastannuallyforgoodwill)suchthatanon-financialinstrumentisrequiredtobeevaluatedforimpairmentandanimpairmentisrecordedtoreducethenon-financialinstrument'scarryingvaluetothefairvalueasaresultofsuchtriggeringevents,thenon-financialassetsandliabilitiesaremeasuredatfairvaluefortheperiodsuchtriggeringeventsoccur.SeeNote2totheconsolidatedfinancialstatementsforadditionalinformationabouthowtheCompanytestsvariousassetclassesforimpairment.

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Note 10—Derivative Financial Instruments

UndercertainagreementswiththerespectivecounterpartiestotheCompany'sderivativecontracts,subjecttoapplicablerequirements,theCompanyisallowedtonetsettletransactionsofthesametypewithasinglenetamountpayablebyonepartytotheother.However,theCompanypresentsitsderivativeassetsandderivativeliabilitiesonagrossbasisinothercurrentassetsoraccruedandothercurrentliabilitiesontheconsolidatedbalancesheetsasofMarch31,2019and2018.

ThefairvaluesoftheCompany’sderivativeinstrumentswerenotmaterialasofMarch31,2019orMarch31,2018(refertoNote9totheconsolidatedfinancialstatementsformoreinformation).ThefollowingtablepresentstheamountsofgainsandlossesontheCompany'sderivativeinstrumentsdesignatedashedginginstrumentsforfiscalyears2019,2018and2017andtheirlocationsonitsconsolidatedstatementsofoperationsandconsolidatedstatementsofcomprehensiveincome(inthousands):

Amount of Gain (Loss) Deferred as

a Component of Accumulated Other

Comprehensive Loss  

Amount of Loss (Gain) Reclassified from

Accumulated Other Comprehensive Loss

to Costs of Goods Sold

2019   2018   2017   2019   2018   2017Designatedashedginginstruments:               Cashflowhedges $ 1,781   $ (8,499)   $ 2,928   $ 1,810   5,808   $ (1,670)

UponadoptionofASU2017-12,theCompanyhasstartedpresentingtheearningsimpactfromforwardpointsinthesamelineitemthatisusedtopresenttheearningsimpactofthehedgeditem,i.e.costofgoodssold,forhedgingforecastedinventorypurchasesandsuchamountisnotmaterialforallperiodspresented.

Cash Flow Hedges: TheCompanyentersintocashflowhedgecontractstoprotectagainstexchangerateexposureofforecastedinventorypurchases.Thesehedgingcontractsmaturewithinfourmonths.Gainsandlossesinthefairvalueoftheeffectiveportionofthehedgesaredeferredasacomponentofaccumulatedothercomprehensivelossuntilthehedgedinventorypurchasesaresold,atwhichtimethegainsorlossesarereclassifiedtocostofgoodssold.Cashflowsfromsuchhedgesareclassifiedasoperatingactivitiesintheconsolidatedstatementsofcashflows.Hedgingrelationshipsarediscontinuedwhenhedgingcontractisnolongereligibleforhedgeaccounting,orissold,terminatedorexercised,orwhentheCompanyremoveshedgedesignationforthecontract.Gainsandlossesinthefairvalueoftheeffectiveportionofthediscontinuedhedgescontinuetobereportedinaccumulatedothercomprehensivelossuntilthehedgedinventorypurchasesaresold,unlessitisprobablethattheforecastedinventorypurchaseswillnotoccurbytheendoftheoriginallyspecifiedtimeperiodorwithinanadditionaltwo-monthperiodoftimethereafter.AsofMarch31,2019,thenotionalamountsofcurrencyforwardcontractsoutstandingrelatedtoforecastedinventorypurchaseswas$41.4million.AsofMarch31,2018,therewerenocurrencyforwardcontractsoutstandingrelatedtoforecastedinventorypurchases.TheCompanyestimatesthat$0.4millionofnetgainrelatedtoitscashflowhedgesincludedinaccumulatedothercomprehensivelossasofMarch31,2019willbereclassifiedintoearningswithinthenexttwelvemonths.

Other Derivatives: TheCompanyalsoentersintocurrencyforwardandswapcontractstoreducetheshort-termeffectsofcurrencyfluctuationsoncertainreceivablesorpayablesdenominatedincurrenciesotherthanthefunctionalcurrenciesofitssubsidiaries.Theseforwardandswapcontractsgenerallymaturewithinonemonth.Theprimaryriskmanagedbyusingforwardandswapcontractsisthecurrencyexchangeraterisk.Thegainsorlossesonthesecontractsarerecognizedinotherincome(expense),netintheconsolidatedstatementsofoperationsbasedonthechangesinfairvalue.ThenotionalamountsofthesecontractsoutstandingasofMarch31,2019and2018were$50.4millionand$47.2million,respectively.OpenforwardandswapcontractsasofMarch31,2019and2018consistedofcontractsinTaiwaneseDollars,AustralianDollars,MexicanPesos,JapaneseYenandCanadianDollarstobesettledatfuturedatesatpre-determinedexchangerates.

Thefairvalueofallcurrencyforwardandswapcontractsisdeterminedbasedonobservablemarkettransactionsofspotcurrencyratesandforwardrates.Cashflowsfromthesecontractsareclassifiedasoperatingactivitiesintheconsolidatedstatementsofcashflows.

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Note 11—Goodwill and Other Intangible Assets

TheCompanyperformeditsannualimpairmentanalysisofgoodwillasofDecember31,2018byperformingaqualitativeassessmentandconcludedthatitwasmorelikelythannotthatthefairvalueofitsperipheralsreportingunit,exceededitscarryingamount.Inassessingthequalitativefactors,theCompanyconsideredtheimpactofthesekeyfactors:changeinindustryandcompetitiveenvironment,growthinmarketcapitalization,andbudgeted-to-actualrevenueperformanceforthetwelvemonthsendedDecember31,2018.Therehavebeennosignificanteventsorcircumstancesaffectingthevaluationofgoodwillsubsequenttotheannualimpairmenttest.

ThefollowingtablesummarizestheactivityintheCompany'sgoodwillbalanceduringfiscalyears2019and2018(inthousands):

  Years Ended March 31,   2019   2018Beginningoftheperiod   $ 275,451   $ 249,741Acquisitions   68,269   25,800Currencyexchangerateimpact   (36)   (90)

Endoftheperiod   $ 343,684   $ 275,451

TheCompany'sacquiredintangibleassetssubjecttoamortizationwereasfollows(inthousands):

  March 31,   2019   2018

 Gross Carrying

Amount  AccumulatedAmortization  

Net CarryingAmount  

Gross CarryingAmount  

AccumulatedAmortization  

Net CarryingAmount

Trademarksandtradenames   $ 36,370   $ (13,659)   $ 22,711   $ 23,870   $ (9,482)   $ 14,388Developedtechnology   95,207   (62,341)   32,866   77,175   (50,755)   26,420Customercontracts/relationships   84,610   (21,188)   63,422   59,510   (12,771)   46,739    $ 216,187   $ (97,188)   $ 118,999   $ 160,555   $ (73,008)   $ 87,547

Forfiscalyears2019,2018and2017,amortizationexpenseforintangibleassetswas,$24.2million,$15.6millionand$9.4million,respectively.TheCompanyexpectsthatannualamortizationexpenseforfiscalyears2020,2021,2022,2023and2024willbe$27.5million,$23.2million,$20.0million,$15.9millionand$13.0million,respectively,and$19.3millionthereafter.

Note 12—Financing Arrangements

TheCompanyhadseveraluncommitted,unsecuredbanklinesofcreditaggregating$80.6millionasofMarch31,2019.TherearenofinancialcovenantsundertheselinesofcreditwithwhichtheCompanymustcomply.AsofMarch31,2019,theCompanyhadoutstandingbankguaranteesof$34.3millionundertheselinesofcredit.TherewasnoborrowingoutstandingunderthelineofcreditasofMarch31,2019orMarch31,2018.

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Note 13—Commitments and Contingencies

Operating Leases

TheCompanyleasesfacilitiesunderoperatingleases,certainofwhichrequireittopaypropertytaxes,insuranceandmaintenancecosts.OperatingleasesforfacilitiesaregenerallyrenewableattheCompany'soptionandusuallyincludeescalationclauseslinkedtoinflation.Futureminimumannualrentalsundernon-cancelableoperatingleasesatMarch31,2019areasfollows(inthousands):

Years Ending March 31,    2020   $ 11,8492021   10,0022022   7,8822023   5,1112024   1,130Thereafter   3,646    $ 39,620

Rentexpenseforfiscalyears2019,2018and2017was$12.4million,$11.2millionand$9.9million,respectively.

Inconnectionwithitsleasedfacilities,theCompanyrecognizedaliabilityforassetretirementobligationsfor2019and2018representingthepresentvalueofestimatedremediationcoststobeincurredatleaseexpiration.TheliabilitiesforassetretirementobligationswerenotmaterialasofMarch31,2019and2018.

Product Warranties

ChangesintheCompany'swarrantyliabilityforfiscalyears2019and2018wereasfollows(inthousands):

  Years Ended March 31,

  2019   2018Beginningoftheperiod   $ 27,573   $ 21,911Assumedfrombusinessacquisition   351   1,230Provision   36,927   25,103Settlements   (29,874)   (21,766)Currencytranslation   (748)   1,095

Endoftheperiod   $ 34,229   $ 27,573

Indemnifications

TheCompanyindemnifiescertainofitssuppliersandcustomersforlossesarisingfrommatterssuchasintellectualpropertydisputesandproductsafetydefects,subjecttocertainrestrictions.Thescopeoftheseindemnitiesvaries,butinsomeinstancesincludesindemnificationfordamagesandexpenses,includingreasonableattorneys'fees.AsofMarch31,2019,noamountshavebeenaccruedfortheseindemnificationprovisions.TheCompanydoesnotbelieve,basedonhistoricalexperienceandinformationcurrentlyavailable,thatitisprobablethatanymaterialamountswillberequiredtobepaidunderitsindemnificationarrangements.

TheCompanyalsoindemnifiesitscurrentandformerdirectorsandcertainofitscurrentandformerofficers.Certaincostsincurredforprovidingsuchindemnificationmayberecoverableundervariousinsurancepolicies.TheCompanyisunabletoreasonablyestimatethemaximumamountthatcouldbepayableunderthesearrangementsbecausetheseexposuresarenotlimited,theobligationsareconditionalinnatureandthefactsandcircumstancesinvolvedinanysituationthatmightarisearevariable.

Legal Proceedings

FromtimetotimetheCompanyisinvolvedinclaimsandlegalproceedingswhichariseintheordinarycourseofitsbusiness.TheCompanyiscurrentlysubjecttoseveralsuchclaimsandasmallnumberoflegalproceedings.TheCompanybelievesthatthesematterslackmeritandintendstovigorouslydefendagainstthem.Basedoncurrentlyavailableinformation,theCompanydoesnotbelievethatresolutionofpendingmatterswillhaveamaterial

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adverseeffectonitsfinancialposition,cashflowsorresultsofoperations.However,litigationissubjecttoinherentuncertainties,andtherecanbenoassurancesthattheCompany'sdefenseswillbesuccessfulorthatanysuchlawsuitorclaimwouldnothaveamaterialadverseimpactontheCompany'sbusiness,financialposition,cashflowsorresultsofoperationsinaparticularperiod.AnyclaimsorproceedingsagainsttheCompany,whethermeritoriousornot,canhaveanadverseimpactbecauseofdefensecosts,diversionofmanagementandoperationalresources,negativepublicityandotherfactors.Anyfailuretoobtainanecessarylicenseorotherrights,orlitigationarisingoutofintellectualpropertyclaims,couldadverselyaffecttheCompany'sbusiness.

Note 14—Shareholders' Equity

Share Capital

TheCompany'snominalsharecapitalisCHF43.3million,consistingof173,106,620shareswithaparvalueofCHF0.25each,allofwhichwereissuedand7,243,733ofwhichwereheldintreasurysharesasofMarch31,2019.

TheCompany'shasreservedconditionalcapitalof25,000,000sharesforpotentialissuanceontheexerciseofrightsgrantedundertheCompany'semployeeequityincentiveplansandadditionalconditionalcapitalforfinancingpurposes,representingtheissuanceofupto25,000,000sharestocoveranyconversionrightsunderafutureconvertiblebondissuance.Thisconditionalcapitalwascreatedinordertoprovidefinancingflexibilityforfutureexpansion,investmentsoracquisitions.Duringthe2018AnnualGeneralMeeting,theshareholdersoftheCompanyauthorizedtheBoardofDirectorstoissueuptoanadditional34,621,324sharesoftheCompanyuntilSeptember5,2020.

Dividends

PursuanttoSwisscorporatelaw,thepaymentofdividendsislimitedtocertainamountsofunappropriatedretainedearnings(CHF940.9millionor$945.2millionbasedontheexchangerateatMarch31,2019)andissubjecttoshareholderapproval.

InMay2019,theBoardofDirectorsrecommendedthattheCompanypayCHF121.8million($122.4millionbasedontheexchangerateonMarch31,2019)incashdividendsforfiscalyear2019.InSeptember2018,theCompanydeclaredandpaidcashdividendsofCHF0.67(USDequivalentof$0.69)percommonshare,totaling$114.0millionontheCompany'soutstandingcommonstock.InSeptember2017,theCompanydeclaredandpaidcashdividendsofCHF0.61(USDequivalentof$0.63)percommonshare,totalingapproximately$104.2millioninU.S.Dollars,ontheCompany’soutstandingcommonstock.InSeptember2016,theCompanydeclaredandpaidcashdividendsofCHF0.56(USDequivalentof$0.57)percommonshare,totalingapproximately$93.1millioninU.S.Dollars,ontheCompany’soutstandingcommonstock.

AnyfuturedividendswillbesubjecttotheapprovaloftheCompany'sshareholders.

Legal Reserves

UnderSwisscorporatelaw,aminimumof5%oftheCompany'sannualnetincomemustberetainedinalegalreserveuntilthislegalreserveequals20%oftheCompany'sissuedandoutstandingaggregateparvaluepersharecapital.Theselegalreservesrepresentanappropriationofretainedearningsthatarenotavailablefordistributionandtotaled$9.6millionatMarch31,2019(basedontheexchangerateatMarch31,2019).

Share Repurchases

InMarch2014,theCompany'sBoardofDirectorsapprovedthe2014sharebuybackprogram,whichauthorizestheCompanytouseupto$250.0milliontopurchaseitsownshares.ThissharebuybackprogramexpiredinApril2017.InMarch2017,theCompany'sBoardofDirectorsapprovedthe2017sharebuybackprogram,whichauthorizestheCompanytouseupto$250.0milliontopurchaseitsownsharesfollowingtheexpirationdateof2014buybackprogram.TheCompany'ssharebuybackprogramisexpectedtoremainineffectforaperiodofthreeyears.Sharesmayberepurchasedfromtimetotimeontheopenmarket,throughblocktradesorotherwise.Purchasesmaybestartedorstoppedatanytimewithoutpriornoticedependingonmarketconditionsandotherfactors.AsofMarch31,2019, $187.4millionisstillavailableforrepurchaseunderthe2017buybackprogram.

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Asummaryoftheapprovedandactivesharebuybackprogramisshowninthefollowingtable(inthousands,excludingtransactioncosts):

  Approved   Repurchased

Share Buyback Program   Shares (1)   Amounts   Shares   AmountsMarch2014   17,311   $ 250,000   9,113   $ 155,983March2017   17,311   $ 250,000   1,651   $ 62,567

(1)TheapprovalofeachofthesharebuybackprogramsbytheSwissTakeoverBoardlimitsthenumberofsharesthattheCompanymayrepurchasetonomorethan10%ofitsauthorizedsharecapitalandvotingrights.

Accumulated Other Comprehensive Loss

Thecomponentsofaccumulatedothercomprehensivelosswereasfollows(inthousands):

  Accumulated Other Comprehensive Income (Loss)

 

CumulativeTranslation

Adjustment (1)  

DefinedBenefitPlans (1)  

DeferredHedging

Gains (Losses)   TotalMarch31,2018   $ (83,848)   $ (6,398)   $ (3,209)   $ (93,455)Othercomprehensiveincome(loss)   (8,300)   (7,534)   3,591   (12,243)March31,2019   $ (92,148)   $ (13,932)   $ 382   $ (105,698)

_______________________________________(1)TaxeffectwasnotsignificantasofMarch31,2019or2018.

Therewasa$0.5millionreclassificationofcurrencytranslationlossincludedinotherincome(expense),netfortheyearendedMarch31,2019duetotheliquidationofoneoftheCompany'ssubsidiaries.

Note 15—Segment Information

TheCompanyoperatesinasingleoperatingsegmentthatencompassesthedesign,manufacturingandmarketingofperipheralsforPCs,tabletsandotherdigitalplatforms.OperatingperformancemeasuresareprovideddirectlytotheCompany'sCEO,whoisconsideredtobetheCompany’sChiefOperatingDecisionMaker.TheCEOperiodicallyreviewsinformationsuchassalesandadjustedoperatingincome(loss)tomakebusinessdecisions.Theseoperatingperformancemeasuresdonotincluderestructuringcharges(credits),net,share-basedcompensationexpense,amortizationofintangibleassets,chargesfromthepurchaseaccountingeffectoninventory,acquisition-relatedcosts,orchangeinfairvalueofcontingentconsiderationfrombusinessacquisition.

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Salesbyproductcategorieswereasfollows(inthousands):

  Years Ended March 31,

  2019   2018   2017PointingDevices   $ 536,890   $ 516,637   $ 501,562Keyboards&Combos   536,619   498,472   480,312PCWebcams   121,282   112,147   107,087Tablet&OtherAccessories   128,315   107,942   76,879VideoCollaboration   259,521   182,717   127,009MobileSpeakers   230,378   314,817   301,021Audio&Wearables   277,429   252,330   246,390Gaming   648,130   491,995   314,362SmartHome   49,344   89,373   65,510Other(1)   414   433   1,295TotalSales   $ 2,788,322   $ 2,566,863   $ 2,221,427

(1) OthercategoryincludesproductsthattheCompanycurrentlyintendstophaseout,orhavealreadyphasedout,becausetheyarenolongerstrategictotheCompany'sbusiness.

Salesbygeographicregionforfiscalyears2019,2018and2017(basedonthecustomers'locations)wereasfollows(inthousands):

  Years Ended March 31,

  2019   2018   2017Americas   $ 1,190,216   $ 1,118,324   $ 963,674EMEA   861,731   820,347   746,898AsiaPacific   736,375   628,192   510,855TotalSales   $ 2,788,322   $ 2,566,863   $ 2,221,427

RevenuesfromsalestocustomersintheUnitedStatesrepresented36%,37%and37%ofsalesinfiscalyears2019,2018and2017,respectively.RevenuesfromsalestocustomersinGermanyrepresented18%,16%and17%ofsalesinfiscalyears2019, 2018and2017,respectively.RevenuesfromsalestocustomersinChinarepresented10%ofsalesinfiscalyear2019.Noothersinglecountryrepresentedmorethan10%ofsalesduringtheseperiods.RevenuesfromsalestocustomersinSwitzerland,theCompany'shomedomicile,represented3%,2%and2%ofsalesinfiscalyears2019,2018and2017,respectively.

Property,plantandequipment,netbygeographicregionwereasfollows(inthousands):

  March 31,

  2019   2018Americas   $ 29,813   $ 35,404EMEA   4,537   4,690AsiaPacific   44,202   46,210TotalProperty,plantandequipment,net   $ 78,552   $ 86,304

Property,plantandequipment,netintheUnitedStatesandChinawere$29.8millionand$36.4million,respectively,asofMarch31,2019,and$35.3millionand$37.9million,respectively,asofMarch31,2018.Noothercountriesrepresentedmorethan10%oftheCompany'stotalconsolidatedproperty,plantandequipment,netatMarch31,2019or2018.Property,plantandequipment,netinSwitzerland,theCompany'shomedomicile,were$1.7millionand$1.9millionatMarch31,2019and2018,respectively.

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Note 16—Restructuring

Duringthefirstquarteroffiscalyear2019,theCompanyimplementedarestructuringplantostreamlineandrealigntheCompany'soverallorganizationalstructureandreallocateresourcestosupportlong-termgrowthopportunities.InJuly2018,theCompany'sBoardofDirectorsapprovedadditionalcostsunderthisrestructuringplan,totalingpre-taxchargesofapproximately$10.0millionto$15.0million,ofwhich$11.3millionwasrecognizedduringfiscalyear2019.Thetotalchargesconsistedofcashseveranceandotherpersonnelcostsandarepresentedasrestructuringcharges(credits),netintheConsolidatedStatementsofOperations.TheCompanyexpectstohavesubstantiallycompletedthisrestructuringwithinthenextthreemonths.

Therestructuring-relatedactivitiesfortheyearsendedMarch31,2018and2017includeactivitiesfromtherestructuringplanimplementedinfiscalyear2016.

Thefollowingtablesummarizesrestructuring-relatedactivitiesduringfiscalyear2019,2018and2017(inthousands):

  Restructuring - Continuing Operations

 Termination

Benefits  Lease Exit

Costs   TotalAccrualbalanceatMarch31,2016   $ 5,907   $ 125   $ 6,032Charges,net   23   —   23Cashpayments   (5,195)   (125)   (5,320)

AccrualbalanceatMarch31,2017   735   —   735Credits,net   (116)   —   (116)Cashpayments   (619)   —   (619)

AccrualbalanceatMarch31,2018   —   —   —Charges,net   11,302   —   11,302Cashpayments   (6,913)   —   (6,913)

AccrualbalanceatMarch31,2019   $ 4,389   $ —   $ 4,389

TheaccrualbalancesareincludedinaccruedandothercurrentliabilitiesontheCompany’sconsolidatedbalancesheets.

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LOGITECH INTERNATIONAL S.A.

SUPPLEMENTARY DATA

QUARTERLY FINANCIAL DATA

(unaudited)

The following table contains selected unaudited quarterly financial data for fiscal years 2019 and 2018 (in thousands, except per shareamounts):

Year ended March 31, 2019 (1)   Year ended March 31, 2018 (1)

Q1   Q2   Q3   Q4   Q1   Q2   Q3   Q4

Netsales $ 608,480   $ 691,146   $ 864,388   $ 624,308   $ 529,946   $ 632,470   $ 812,021   $ 592,426

Costofgoodssold 382,171   432,063   535,707   388,028   334,774   402,722   533,631   377,617Amortizationofintangibleassetsandpurchaseaccountingeffectoninventory 2,372   2,966   4,699   3,305   1,504   2,011   2,789   $ 2,574

Grossprofit 223,937   256,117   323,982   232,975   193,668   227,737   275,601   212,235

Operatingexpenses:                      

Marketingandselling 114,584   121,801   132,250   119,628   102,378   107,386   116,153   109,572

Researchanddevelopment 38,987   39,542   40,591   42,110   35,099   36,647   34,398   37,616

Generalandadministrative 25,473   25,206   24,496   23,557   25,409   25,266   22,291   23,387Amortizationofintangibleassetsandacquisition-relatedcosts 2,521   4,317   3,539   3,913   1,390   2,491   2,496   2,553Changeinfairvalueofcontingentconsiderationforbusinessacquisition —   —   —   —   (1,978)   (2,930)   —   —

Restructuringcharges(credits),net 9,921   119   (278)   1,540   (55)   (61)   —   —

Totaloperatingexpenses 191,486   190,985   200,598   190,748   162,243   168,799   175,338   173,128

Operatingincome 32,451   65,132   123,384   42,227   31,425   58,938   100,263   39,107

Interestincome 2,369   1,858   1,482   2,666   1,175   1,048   874   1,872

Otherincome(expense),net (1,571)   3,389   (2,747)   493   (1,029)   459   (324)   (1,543)

Incomebeforeincometaxes 33,249   70,379   122,119   45,386   31,571   60,445   100,813   39,436

Provisionfor(benefitfrom)incometaxes (5,217)   6,203   9,309   3,265   (5,436)   4,087   20,040   5,032

NetIncome $ 38,466   $ 64,176   $ 112,810   $ 42,121   $ 37,007   $ 56,358   $ 80,773   $ 34,404

                               

Netincomepershare:                      

Basic $ 0.23   $ 0.39   $ 0.68   $ 0.25   $ 0.23   $ 0.34   $ 0.49   $ 0.21

Diluted $ 0.23   $ 0.38   $ 0.67   $ 0.25   $ 0.22   $ 0.33   $ 0.48   $ 0.20                               

Sharesusedtocomputenetincomepershare:                      

Basic 165,317   165,630   165,707   165,776   163,407   164,120   164,248   164,374

Diluted 168,756   169,234   168,907   168,956   168,339   169,078   169,079   169,387______________________________

(1)Financialresultsofalltheperiodsinfiscalyears2019and2018includedtheimpactfrombusinessesacquiredduringtheyear.RefertoNote3totheconsolidatedfinancialstatements.

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Schedule II

LOGITECH INTERNATIONAL S.A.

VALUATION AND QUALIFYING ACCOUNTS

For the Fiscal Years Ended March 31, 2019 , 2018 and 2017 (in thousands)

TheCompany'sScheduleIIincludesvaluationandqualifyingaccountsrelatedtoallowancesfordoubtfulaccounts,salesreturns,cooperativemarketingarrangements,customerincentiveprograms,andpricingprograms,fordirectcustomersandtaxvaluationallowances.TheCompanyalsohassalesincentiveprogramsforindirectcustomerswithwhomitdoesnothaveadirectsalesandreceivablerelationship.Theseprogramsarerecordedasaccruedliabilitiesandarenotconsideredvaluationorqualifyingaccounts.

   

Balance atBeginning of

Year  

Charged(Credited) toStatement of

Operations (1)(2)(3)  

Claims andAdjustments

Applied AgainstAllowances (1)  

Balance atEnd ofYear

Allowancefordoubtfulaccounts:         2019   $ 122   $ 840   $ (878)   $ 842018   $ 607   $ (404)   $ (81)   $ 1222017   $ 667   $ 47   $ (107)   $ 607

Allowanceforsalesreturns:         2019(2)   $ 25,515   $ 94,381   $ (113,410)   $ 6,4862018   $ 18,800   $ 111,969   $ (105,254)   $ 25,5152017   $ 18,526   $ 78,242   $ (77,968)   $ 18,800

Allowanceforcooperativemarketingarrangements:         2019(2)   $ 30,389   $ 176,323   $ (171,632)   $ 35,0802018   $ 28,022   $ 160,664   $ (158,297)   $ 30,3892017   $ 28,157   $ 144,656   $ (144,791)   $ 28,022

Allowanceforcustomerincentiveprograms:         2019(2)   $ 70,592   $ 237,580   $ (248,136)   $ 60,0362018   $ 60,857   $ 230,838   $ (221,103)   $ 70,5922017   $ 60,872   $ 196,363   $ (196,378)   $ 60,857

Allowanceforpricingprograms:         2019(2)   $ 141,369   $ 444,540   $ (497,556)   $ 88,3532018   $ 102,289   $ 445,048   $ (405,968)   $ 141,3692017   $ 81,553   $ 322,118   $ (301,382)   $ 102,289

Taxvaluationallowance:         2019   $ 25,148   $ 3,244   $ (17)   $ 28,3752018(3)   $ 6,626   $ 18,496   $ 26   $ 25,1482017   $ 5,338   $ 1,299   $ (11)   $ 6,626

(1)Theamountsforfiscalyears2019and2018bothincludeimmaterialimpactsfromthebusinessacquisitionsduringtheyear.RefertoNote3totheconsolidatedfinancialstatements.

(2)TheamountschargedtotheStatementofOperationsforallowancesforvariousCustomerProgramsandsalesreturnsinfiscalyear2019includetheimpactof$105.8millionreductionasaresultoftheadoptionofASU2014-09effectiveApril1,2018,ofwhich$20.0millionwasforallowanceforsalesreturns,$3.2millionwasfortheallowanceforcooperativemarketingarrangements,$18.7millionforallowanceforcustomerincentiveprogramsand$63.8millionforallowanceforpricingprograms.RefertoNote2totheconsolidatedfinancialstatements.

(3)TheamountchargedtotheStatementofOperationsforthetaxvaluationallowanceinfiscalyear2018primarilyincludestheimpactof$18.0millionfromtheadoptionofASU2016-09effectiveApril1,2017.

LogitechInternationalS.A.|Fiscal2019Form10-K|111

Exhibit 3.1

LOGITECH INTERNATIONAL S.A.

ARTICLES OF INCORPORATION

TITLE I

CORPORATE NAME – REGISTERED OFFICE – PURPOSE – DURATION

Article 1

There exists under the corporate name

" Logitech International S.A. "

a corporation ( société anonyme ) governed by these Articles of Incorporation and by Title twenty-six of the Swiss Code of Obligations (the"CO").

The duration of the Company shall be indefinite.

The registered office is in Apples.

Article 2

The Company shall  be  a  holding company with  the  purpose of  coordinating the  activities  of  various  Swiss  and foreign subsidiaries  of  theLogitech group.

In addition, it shall have as a purpose the acquisition and management of shareholdings in other companies, and in particular the acquisition,holding  and/or  assignment  of  shareholdings  in  other  commercial,  industrial,  financial  or  real  property  companies  and  enterprises,  inSwitzerland or abroad, directly or indirectly, in its own name and for its own account, or for the accounts of third parties, as investments orfor other reasons, as well as for the financing of affiliated companies.

The Company may conduct, in Switzerland or abroad, any manner of activities, create branch offices, and undertake any real estate, financialor commercial operations which relate directly or indirectly to its purpose.

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TITLE II

SHARE CAPITAL AND SHARES

Article 3

The  share  capital  is  fixed  at  CHF  43,276,655  (forty-three  million  two  hundred  seventy-six  thousand  six  hundred  fifty-five  Swiss  francs),entirely paid-in.

It is divided into 173,106,620 (one hundred seventy-three million one hundred and six thousand six hundred twenty) registered shares with anominal value of CHF 0.25 (twenty-five centimes) each.

Article 4

The shares shall be registered.

The general meeting of shareholders (the "General Meeting") shall have the authority to convert the registered shares into bearer shares bymeans of an amendment to these Articles of Incorporation.

Subject  to  the  paragraph  below,  the  registered  shares  of  the  Company  will  be  uncertificated  securities  (in  terms  of  the  Swiss  Code  ofObligations) and book entry securities (in terms of the Swiss Book Entry Securities Act).

A shareholder registered in the Company's shareholders' register may request from the Company a statement of the shareholder's registeredshares at any time. Shareholders do not have a right to the printing and delivery of share certificates. The Company may, however, print anddeliver  certificates  for  shares  at  any  time  at  its  option.  The  Company  may  also,  at  its  option,  withdraw  uncertificated  shares  from  thecustodian system where they have been registered and, with the consent of the shareholder, cancel issued certificates that are returned to theCompany.

Article 5

Each share shall confer the right to a proportional part of the profit resulting from the balance sheet and the proceeds of liquidation.

Shareholders shall only have those obligations specified in these Articles of Incorporation, and shall not be personally liable for the debts ofthe Company.

Shares shall be indivisible; the Company shall recognize only one representative per share.

The ownership of a share shall entail acceptance of the provisions of these Articles of Incorporation.

Article 6

The Company shall maintain a share register which lists the names of the owners and beneficiaries of the shares as well as their domiciles.

Only those persons entered in the share register as owners shall be deemed to be shareholders of the Company.

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The transfer of ownership of certificated shares shall require delivery of the properly endorsed share certificate to the purchaser.

The transfer of ownership of shares held as book entry securities shall  be carried out according to the provisions of the Swiss Book EntrySecurities Act.

Registered shares not incorporated into a certificate and that are not held as book entry securities as well as the respective rights associatedtherewith which are not incorporated into any certificate may be transferred only by assignment. Such assignment shall be valid only if theCompany has been notified thereof.

Article 7

Should a shareholder change his address, he must so inform the Company. As long as a shareholder has not provided notice of a change ofaddress to the Company, any written communication shall be validly made to his last address entered in the share register.

TITLE III

THE ORGANIZATION OF THE COMPANY

A. GENERAL MEETING OF SHAREHOLDERS

Article 8

The General Meeting shall be the supreme authority of the Company. It holds the inalienable rights provided by law.

The General Meeting shall convene at the place designated by the Board of Directors.

One or more shareholders who represent together at least ten percent of the share capital may demand that a General Meeting be called. Oneor  more  shareholders,  who  represent  together  shares  representing  at  least  the  lesser  of  (i)  one  (1)  percent  of  the  share  capital  or  (ii)  anaggregate  nominal  value  of  CHF  1,000,000  (one  million  Swiss  Francs),  may  demand  that  an  item  be  included  on  the  agenda  for  ashareholders'  meeting.  A  shareholder  demand  to  call  a  meeting  and  to  include  an  item  on  the  agenda  shall  be  made  in  writing  and  shalldescribe the matters to be considered and any proposals to be made to the shareholders. Such written request shall be received by the Board ofDirectors at least sixty (60) days before the date proposed for the General Meeting.

Article 9

General Meetings shall be called at least twenty days before the date of the meeting by a single notice published in the media specified inArticle 24 below.

A General Meeting can alternatively be called by means of a notice sent to shareholders at the address entered in the share register. In such acase, the twenty-day notice period referred to above shall begin on the day following the date on which the notice shall have been mailed.

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Article 10

Each share confers the right to one vote.

Article 11

Any shareholder may appoint a representative who need not be a shareholder, provided that person holds a written proxy. Members of theBoard of Directors who are present shall decide whether to accept or refuse such proxies.

Statutory provisions relating to the representations of shareholders by the independent proxy are reserved.

Article 12

The General Meeting shall be presided over by the Chairman of the Board of Directors or any other member of the Board of Directors. In theabsence of such persons, the chairman shall be appointed by the General Meeting.

The Chairman of the General Meeting shall appoint the secretary of the General Meeting and the scrutineers.

Article 13

In the absence of any provision to the contrary in the law or these Articles of Incorporation, the General Meeting shall make resolutions andproceed to elections by an absolute majority of the votes cast. In the event of a tie vote, the vote of the Chairman of the General Meeting shalldecide.

As a general rule, voting and elections shall be conducted by a show of hands; however, a secret ballot shall be used when the Chairman ofthe General Meeting so orders or when 25 shareholders present at the meeting shall so request. An electronic vote shall be deemed a secretballot.

B. BOARD OF DIRECTORS

Article 14

The Board of Directors of the Company shall be composed of at least three members elected individually by the General Meeting for a termof office expiring after completion of the subsequent Annual General Meeting and who shall be indefinitely re-eligible.

The Chairman of the Board of Directors shall also be appointed by the General Meeting for a term of office expiring after completion of thesubsequent Annual General Meeting and who shall be indefinitely re-eligible.

Unless provided otherwise in the law or these Articles of Incorporation, the Board of Directors shall organize itself. It shall be entitled to electone or more vice-chairmen, who shall assume the responsibilities of the Chairman of the Board of Directors if the latter is incapacitated.

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Article 15

The Board of Directors shall make decisions and proceed to elections by a majority vote of the members present at the meeting. In the eventof a tie vote, the vote of the Chairman shall decide.

The decisions of the Board of Directors may be made in the form of a written consent (given by letter, fax or telegram) to a proposal, suchconsent representing a majority of all the members of the Board of Directors inasmuch as the proposal was submitted to all the members ofthe Board of Directors, unless a discussion is requested by one of them.

Article 16

The Board of Directors shall have the non-transferable and inalienable powers provided for under Art. 716a of the CO.

It may make decisions on any matters which have not been reserved to another corporate body of the Company pursuant to the law or theseArticles of Incorporation.

Article 17

The  Board  of  Directors  may,  in  compliance  with  the  organizational  regulations,  entrust  the  management  and  the  representation  of  theCompany to one or more of its members or to other natural persons who need not be shareholders (the "Management Team").

Article 17 bis

No  member  of  the  Board  of  Directors  shall  assume  more  than  ten  (10)  mandates  in  supreme  management  or  supervisory  bodies  of  legalentities  outside  the  Logitech  group,  of  which  no  more  than  four  (4)  may  be  in  listed  companies.  In  addition,  Members  of  the  Board  ofDirectors may assume up to ten (10) mandates in the governing bodies of charitable or similar organizations. The Chairman of the Board ofDirectors must be informed of such mandates.

The limits contemplated in the preceding paragraph do not apply to mandates:a) for companies controlled by the Company or that control the Company;b) that a member of the Board of Directors assumes at the request of the Company or of a company controlled by it; andc) for companies that  are not required to be registered in the commercial  registry in Switzerland or in an equivalent  registry outside of

Switzerland.

Mandates for legal entities under common control or at the request of such legal entities are counted as one single mandate for the purpose ofthis Article 17 bis.

Article 17 ter

The Board of Directors shall establish a Compensation Committee. The Compensation Committee shall be composed of at least two membersof  the  Board  of  Directors,  who  shall  be  elected  individually  by  the  General  Meeting  for  a  term of  office  expiring  after  completion  of  thesubsequent Annual General Meeting and who shall be indefinitely re-eligible.

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The chairman of the Compensation Committee shall be appointed by the Board of Directors. The Compensation Committee shall otherwiseorganize itself.

The  Compensation  Committee  shall  support  the  Board  of  Directors  in  establishing  and  reviewing  the  Company's  compensation  strategy,guidelines and the performance targets, as well as in preparing the proposals to the General Meeting regarding the compensation of the Boardof Directors and of the Management Team. It may submit proposals to the Board of Directors in other compensation-related issues.

The Board of Directors shall set out in the organizational regulations (i) for which positions of the Board of Directors and of the ManagementTeam the Compensation Committee shall submit proposals for the compensation, and (ii) for which positions the Compensation Committeeshall determine such compensation in accordance with these Articles of Incorporation and the compensation guidelines.

The Board of Directors may delegate further tasks and powers to the Compensation Committee.

Article 18

In countries where laws or  customs require for  companies that  important  documents,  or  those subject  to certain conditions of  form have aseal, a seal may be affixed next to the signature.

The Board of Directors shall determine those seals and set the rules regarding the use thereof.

C. MANAGEMENT TEAM

Article 18 bis

The  Company  or  companies  controlled  by  it  may  enter  into  agreements  relating  to  the  compensation  of  the  members  of  the  ManagementTeam  (the  "employment  agreements").  Fixed-term  employment  agreements  shall  run  for  a  maximum  period  of  one  year.  Employmentagreements entered into for an indefinite period of time shall be subject to a maximum notice period of one year.

Employment  agreements  entered  into  with  members  of  the  Management  Team  may  contemplate  a  prohibition  of  competition  aftertermination of the relevant employment agreement. The total consideration for a prohibition of competition that applies after termination ofan employment  agreement  and expiration of  the applicable  notice  period,  if  any,  shall  not  exceed,  with  respect  to  the entire  period duringwhich the prohibition of competition applies, the total annual compensation of the relevant member of the Management Team.

Article 18 ter

No  member  of  the  Management  Team  may  assume  more  than  five  (5)  mandates  in  supreme  management  or  supervisory  bodies  of  legalentities outside the Logitech group, of which no more than two (2) may be in listed companies.  In addition,  Members of the ManagementTeam may assume up to five (5) mandates in the governing bodies of charitable or similar organizations. Any such mandate shall require theapproval of the Board of Directors.

This restriction does not include mandates:a) for companies controlled by the Company or that control the Company;

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b) that a member of the Management Team assumes at the request of the Company or of a company controlled by it; andc) for companies that  are not required to be registered in the commercial  registry in Switzerland or in an equivalent  registry outside of

Switzerland.

Mandates for legal entities under common control are counted as one single mandate for the purpose of this Article 18 ter.

D. AUDITORS

Article 19

The General Meeting shall appoint one or several auditors as statutory auditors. It may appoint substitute auditors.

The term of office of the auditors shall be one year; it shall end after completion of the subsequent Annual General Meeting. Reappointmentshall be possible.

TITLE IV

COMPENSATION

Article 19 bis

The compensation of the members of the Board of Directors who do not have delegated management responsibilities shall  consist  of  cashpayments  and  shares  or  share  equivalents.  The  value  of  cash  compensation  and  shares  or  share  equivalents  shall  correspond  to  a  fixedamount, which shall reflect the functions and responsibilities assumed. The value of shares or share equivalents shall be calculated at marketvalue.

Members  of  the Board of  Directors  who have delegated management  responsibilities  shall  be compensated in  the manner  contemplated inArticle 19 ter below.

The Company shall reimburse the expenses incurred by the members of the Board of Directors. Expenses reimbursements are not part of thecompensation.

Article 19 ter

The principal components of the compensation of the Management Team shall be: (i) base salary; (ii) performance-based cash compensation,in the form of incentive cash payments and (iii) equity incentive awards.

The  base  salary  shall  reward  the  relevant  members  of  the  Management  Team  for  their  individual  contribution  to  the  Company  and  theirexpected day-to-day services.

The  performance-based  cash  compensation  shall  take  appropriate  account  of  the  achievement  of  the  Company's,  individual  employees'  orother performance goals. The target level of the performance-based cash compensation elements shall be determined as a percentage of thebase salary. The performance-

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based cash compensation may amount up to a pre-determined multiplier of the target level. Its amount may also reflect an overall assessmentof the relevant employee's performance or the Company's objectives.

Equity incentive awards shall provide, in particular, a direct incentive for future performances and align the interest of the Management Teamwith those of the Company's shareholders. Equity incentive awards shall be governed by performance metrics that take into account strategicor other objectives of the Company or by reference to the duration of the relevant employee's service to the Company or companies controlledby it.

The Board of Directors or, to the extent delegated to it, the Compensation Committee, shall determine performance metrics and target levelsapplicable to performance-based cash compensation and equity incentive awards, as well as their achievement.

Compensation may be paid or granted in the form of cash, shares, other benefits or in kind; compensation to members of the ManagementTeam may also be paid or granted in the form of financial instruments or similar units. The Board of Directors or, to the extent delegated to it,the Compensation Committee shall decide upon each grant as well as the applicable vesting, blocking, exercise and forfeiture conditions; theymay provide for  continuation,  acceleration or  removal  of  vesting and exercise conditions,  for  payment or  grant  of  compensation assumingtarget achievement or for forfeiture in the event of pre-determined events such as termination of employment or office or change of control.Compensation may be paid by the Company or companies controlled by it.

Members of the Management Team may participate in share purchase plans established by the Company or companies controlled by it, underthe terms of which eligible employees may allocate a portion of their compensation to the purchase of shares of the Company at a discount tomarket price.

The Company shall reimburse the expenses incurred by the members of the Management Team. Expenses reimbursements are not part of thecompensation.

Article 19 quater

Upon proposal of the Board of Directors, the General Meeting approves the maximum aggregate amount of the compensation of:

a) the Board of Directors, for the period up to the next Annual General Meeting; andb) the Management Team, for the next business year.

The  Board  of  Directors  may  submit  to  the  General  Meeting  for  approval  proposals  in  respect  of  maximum  aggregate  amounts  and/orindividual compensation components for other time periods and/or propose the payment of additional amounts for special  or extraordinaryservices of some or all of the members of the Board of Directors or of the Management Team.

If the General Meeting rejects a proposal submitted by the Board of Directors, the latter shall submit an alternative proposal to the same or asubsequent General Meeting.

The Company or companies controlled by it may grant or pay compensation subject to subsequent ratification at a General Meeting and claw-back by the Company in case of rejection by the General Meeting.

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Article 19 quinquies

If the maximum aggregate amount of compensation already approved by the General Meeting is not sufficient to also cover the compensationof one or more persons who become members of the Management Team during a compensation period for which the General Meeting hasalready approved the compensation of the Management Team (new hire), the Company or companies controlled by it shall be authorized topay an additional amount with respect to the compensation period already approved. Such additional amount shall not exceed:

a) for the head of the Management Team (CEO), one hundred and forty percent (140%) of the total annual compensation of the formerCEO; and

b) for any new hire other than the CEO, one hundred and forty percent (140%) of the highest total annual compensation of any member ofthe Management Team other than the CEO.

Article 19 sexies

Subject to Article 19 quarter, paragraph 4, above, Members of the Board of Directors and the Management Team shall not receive credits orloans from the Company or from a company controlled by it.

Compensation  paid  to  members  of  the  Board  of  Directors  or  Management  Team  for  activities  in  companies  that  are  controlled  by  theCompany shall be permitted. This compensation shall be included in the total compensation payable to the Board of Directors or ManagementTeam, as applicable, which shall be subject to the approval of the General Meeting.

Pension contributions and benefits shall be made or provided in accordance with the regulations applicable to the pension schemes in whichthe Company or the companies controlled by it participate in Switzerland or abroad.

TITLE V

BUSINESS YEAR, ANNUAL ACCOUNTS AND ALLOCATION OF PROFITS

Article 20

The business year shall begin on April 1st and end on March 31st.

Article 21

Five  percent  of  the  annual  profits  shall  be  allocated  to  the  general  reserve  until  such  reaches  twenty  percent  of  the  paid  in  share  capital.Should the general reserve be used in any amount the allocation of profits shall be made until this level is reached again.

The  balance  of  the  profits  arising  from  the  balance  sheet  shall  be  distributed  according  to  the  resolutions  of  the  General  Meeting,  uponproposition of the Board of Directors; however, the mandatory legal provisions of the law relating to the legal reserve must be complied with.

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Article 22

Dividends  shall  be  paid  at  the  time specified  by the  Board of  Directors.  Any dividend which has  not  been claimed within  five  years  of  itbecoming due is time-barred by statute of limitations and shall be forfeited to the Company by simple right and automatically.

TITLE VI

LIQUIDATION

Article 23

The  General  Meeting  shall  retain  its  right  to  approve  the  accounts  at  the  time  of  liquidation  and  shall  have  the  authority  to  discharge  theliquidators with respect to their activities in connection therewith.

After payment of liabilities, the assets of the dissolved Company shall be distributed among the shareholders pro rata according to the parvalue of each such shareholders' shares.

TITLE VII

PUBLIC NOTICES – COMMUNICATIONS

Article 24

Public notices by the Company shall be made in the Feuille Officielle Suisse du Commerce (Swiss Official Commercial Gazette).

TITLE VIII

CONDITIONAL CAPITAL AND AUTHORIZED CAPITAL

Article 25

By  the  exercise  of  share  option  or  other  rights  granted  to  certain  employees,  officers  and  directors  of  the  group  according  to  the  group'semployee equity incentive plans, the share capital of the Company may be increased at most by CHF 6,250,000 (six million two hundred fiftythousand Swiss Francs) by way of the issue of 25,000,000 (twenty-five million) registered shares with a nominal value of CHF 0.25 (twenty-five centimes) each.

The shareholders' preferential subscription rights shall be eliminated for such new shares.

Article 26

By the exercise of conversion rights which are granted in relation with the issue of convertible bonds, the share capital of the Company shallbe increased by a maximum aggregate amount of CHF 6,250,000 (six million, two hundred fifty thousand Swiss Francs) through the issuanceto the holders of such bonds of a maximum of 25,000,000 (twenty-five million) fully paid-in registered shares with a nominal value of CHF0.25 (twenty-five centimes) each.

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The shareholders shall not have the right to subscribe by preference for the shares issuable on conversion of the bonds.

The Board of Directors may limit or withdraw the shareholders' right to subscribe for the bonds by preference for valid reasons, in particular(a) if the bonds are issued in connection with the financing or refinancing of the acquisition of one or more companies, businesses or parts ofbusinesses, or (b) to facilitate the placement of the bonds on the international markets or to increase the security holder base of the Company.

If the shareholders' right to subscribe for the bonds by preference is limited or withdrawn, the bonds must be issued at market conditions, theexercise period of the conversion rights must not exceed 7 (seven) years from the date of issuance of the bonds, and the conversion price mustbe set at a level that is not lower than the market price of the shares preceding the determination of the final conditions for the bonds.

Article 27

The  Board  of  Directors  is  authorized  at  any  time  until  September  5,  2020  to  increase  the  share  capital  of  the  Company  by  a  maximumaggregate amount of CHF 8,655,331 through the issuance of not more than 34,621,324 registered shares with a par value of CHF 0.25 each,which will have to be fully paid in.

Increases in partial amounts are permitted. The Board of Directors may authorize the issuance of new shares by means of an underwriting orsimilar process carried out by one or more banks or other financial institutions with a view to offering the new shares to existing shareholdersor to third parties. The Board of Directors shall determine the type of contributions, the issue price, the time of the issue, the conditions forthe exercise of the preferential subscription rights,  the use of unexercised preferential subscription rights and the date upon which the newshares shall become entitled to dividends. The Board of Directors may authorize, restrict or exclude the trading of preferential subscriptionrights.

If preferential subscription rights are granted, but not exercised, the Board of Directors shall use the rights associated with the relevant sharesin the interest of the Company.

The Board of Directors may restrict or withdraw the preferential subscription rights of existing shareholders, and allocate such rights to thirdparties  or  to  the  Company  for  valid  reasons,  in  particular  if  the  new  shares  are  being  issued  in  connection  with:  (a)  the  acquisition  ofcompanies, enterprises, participations, assets, intellectual property rights, licenses or new investment projects; (b) a public offering or privateplacement  of  shares  for  the financing and/or  refinancing of  an acquisition of  the  kind referred to  under  (a)  above;  (c)  a  public  offering orprivate placement of shares, under circumstances in which such public offering or private placement would be difficult to carry out or couldlikely  only  be  carried  out  under  less  favourable  terms if  the  preferential  subscription  rights  of  existing  shareholders  were  not  restricted  orwithdrawn; (d) the acquisition of a stake in the Company by a strategic partner; or (e) the broadening of the shareholder base of the Companyin certain jurisdictions or in the context of a listing or admission to trading on a domestic or foreign stock exchange.

***********

These articles of incorporation were approved on June 24 th , 1993, and modified on June 27 th , 1996, February 13 th , 1998, June 25 th , 1998,June 23 rd and June 29 th , 2000, March 19 th , 2001, May 1 st , 2001, June 1 st and 28 th , 2001, June 26 th and 27 th , 2002, June 24 th , 2004, June16 th , 2005, June 16 th , 2006, June 19 th , June 20 th , 2007, September 10, 2008, September 11, 2008, September 8, 2010, September 5, 2012,December 18, 2014, and September 5, 2018.

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The above text is a translation of the original French articles of incorporation ( statuts ), which constitute the definitive text and are binding inlaw.

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Exhibit 3.2

ORGANIZATIONAL REGULATIONS OF LOGITECH INTERNATIONAL SA

1. Governing principles

These organizational regulations (hereafter the " Regulations ") are adopted in accordance with Article 17 of theArticles of Incorporation of the Company.

They govern the organization, the voting procedure, as well as the powers and duties of the following organs of theCompany:

- Board of Directors (" Board ")

- Chairman of the Board

- Chief Executive Officer

- Group Management Team

2. The Board

2.1 Organization

The Board, constituted at a minimum by three members, is self-governed.

The members of the Board are elected for a 1-year term which is indefinitely renewable subject to the ageand tenure limits specified in Article 2.8 below. Employees may be members of the Board provided suchpersons do not receive compensation for their activities both as members of the Board and as employees.

At the first meeting following the ordinary general shareholders' meeting, the Board appoints one or twoVice-Chairmen  (if  any),  a  Lead  Independent  Director,  and  a  Secretary.  The  role  of  Chairman  or  Vice-Chairman, on the one hand, and Lead Independent Director, on the other hand, may be cumulated. It is notmandatory that the Secretary be a member of the Board or a shareholder.

The term of office of the Chairman, Vice-Chairman, and Lead Independent Director matches the term ofoffice of their appointment as members of the Board. These persons can be indefinitely re-elected to theirrespective positions subject to the age and tenure limits specified in Article 2.8 below.

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2.2 Meetings, convening of meetings and agenda

A meeting of the Board may be called by the Chairman as often as the business of the Company requires.

The Board may also be convened upon request  of  any one of the directors.  Such request  is  made to theChairman in writing, and it includes the reasons for which the Board meeting is being called. Upon receiptof  such  request,  the  Chairman  shall  convene  the  Board  without  delay.  When  necessary,  the  LeadIndependent Director may also convene the Board.

Where appropriate, but at least twice a year, the directors who meet the independence requirements of theNasdaq  Stock  Market  rules  and  regulations  shall  meet  in  executive  session.  Such  meetings  may  bescheduled in conjunction with the meetings of the Board.

The notice convening the Board meeting shall mention the day, the time and the place of the meeting, aswell  as  the  agenda.  The  relevant  documentation  relating  to  the  forthcoming  meeting  shall  be  deliveredreasonably in advance. Resolutions on items that were not mentioned in the agenda may only be taken ifall members of the Board have been consulted, except in case of emergency.

The  Board  is  chaired  by  the  Chairman  and,  in  case  of  his  absence,  by  the  Vice-Chairman  or,  if  he  isabsent,  by  the  Lead  Independent  Director  or  another  member  of  the  Board.  Meetings  of  independentdirectors  are  chaired  by the  Lead Independent  Director.  Board  meetings  may be validly  held  by way ofvideo conference or telephone conference.

2.3 Vote, minutes

2.3.1 Vote

The Board takes its resolutions by the approval of the absolute majority of the members who are present.In the event of a tie, the Chairman has a casting vote.

While  preparing  its  recommendations  to  the  general  shareholders'  meeting  for  election  or  removal  ofindependent  auditors,  the  Board  shall  pay  due  consideration  to  the  recommendations  of  the  AuditCommittee established pursuant to Article 2.4.3 below.

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The resolutions of the Board may be taken by way of circular letter, provided that no member requests adiscussion.

The resolutions  by way of  circular  letter  are  adopted  if  they have been approved by the  majority  of  themembers of the Board. In the event of a tie, the Chairman has a casting vote.

2.3.2 Minutes

The discussions and the resolutions of the Board are set forth in minutes, signed by the Chairman and theSecretary.  Each  member  of  the  Board  receives  a  copy  of  the  minutes.  The  resolutions  taken  by  way  ofcircular letter must be included in the minutes of the following meeting of the Board.

The minutes of each meeting must be ratified at the following meeting of the Board.

2.4 Attribution of powers

2.4.1 Powers delegated by the Board

The  Board  delegates  the  entire  management  of  the  Company  to  the  Chief  Executive  Officer  and  to  theGroup Management Team, except where the law, the Articles of Incorporation or the present Regulationsprovide differently.

2.4.2 Powers not delegated by the Board

The  Board  exercises  at  any  time  the  superior  management  and  supervision  of  the  Company.  It  issuesdirectives  concerning  the  business  policy  and  keeps  itself  regularly  informed  on  the  Company'sperformance.

In particular, the Board has the following non-transferable and inalienable powers and duties:

1. It ultimately oversees the Chief Executive Officer and the Group Management Team and issues thenecessary  guidelines;  this  includes  the  determination  of  strategic  objectives,  the  allocation  ofresources and the company policy;

2. It determines the organization structure;

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3. It establishes accounting and financial control principles as well as the financial plan;

4. It  appoints and dismisses the Chief Executive Officer and the members of the Group ManagementTeam and resolves on their signatory power; it appoints and dismisses the head of the Internal Auditfunction;

5. It exercises the ultimate supervision of the persons in charge of the management of the business inorder  to  ensure  that  their  activity  is  carried  out  in  compliance  with  the  law,  the  Articles  ofIncorporation, the internal regulations and the instructions given;

6. It  oversees the preparation of the annual report,  prepares the        shareholders'  meetings and carriesout its decisions;

7. It informs the judge in case of overindebtedness (technical insolvency);

8. It takes resolutions regarding the payment of non fully paid-in shares (Art. 634 a CO);

9. It publishes the report provided for under Article 132 para. 1 of the Swiss Federal Act on FinancialMarket Infrastructures setting out the position of the Board with respect to a public takeover offer;and

10. It is responsible for the compensation report.

The Board keeps the power to resolve itself on the following objects:

a) the signatory power of its members, if any;

b) the approval of the budget submitted by the Chief Executive Officer;

c) the approval of any type of investment or acquisition not included in the approved budgets; providedthat  management  may  from  time  to  time  request  authorization  to  make  investments  and/oracquisitions  up  to  an  aggregate  amount  of  USD  10,000,000  without  Board  approval,  subject  tomanagement’s obligation to conduct periodic post close reviews of such transactions and to presentthe findings of such reviews to the Board;

d) the  approval  of  the  acquisition  and  sale,  as  well  as  the  constitution  of  security  interests,  over  theCompany's real estate; and

e) the  approval  of  any  expenditure  of  more  than  USD  10,000,000  not  specifically  identified  in  theapproved budgets.

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2.4.3 Special committees

The members  of  the Compensation Committee  are elected individually  from among the members  of  theBoard  by  the  general  shareholders’  meeting.  In  addition,  the  Board  constitutes  within  its  ranks  thefollowing three committees in charge of specific issues:

a) Audit Committee

b) Nominating Committee

c) Technology and Innovation Committee

Except where otherwise contemplated in the charter of the applicable committee, the recommendations ofthese four committees are submitted to the Board for approval.

In  accordance  with  the  law  and  the  Articles  of  Incorporation  of  the  Company,  the  Board  shall  issuecharters  for  each  of  these  Committees  which  define  their  attributions  and  powers,  and  shall  appoint  theChairman of each of these Committees.

2.5 Right to information and consultation

Each  member  of  the  Board  has  the  right  to  obtain  information  on  the  entire  business  of  the  Company.During the meetings, each member of the Board may request information from the other members as wellas from the persons entrusted with the management.

Outside  of  the  meetings,  each  member  of  the  Board  may  request  from  the  persons  entrusted  with  themanagement information regarding the course of business and, with the authorization of the Chairman, onspecific business issues. To the extent it is necessary for the accomplishment of his duties, each memberof  the  Board  may  request  from  the  Chairman  to  review  the  books  and  files.  If  the  Chairman  rejects  arequest for information, for a hearing or for consultation, the Board decides.

2.5.1 Reports

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During each meeting, the Board must be informed by the Chief Executive Officer on the development ofthe current affairs and on important events. Extraordinary events are to be notified to the members of theBoard in the shortest possible time by circular letter.

2.6 Signatory rights

The Chairman and those members of the Board who shall have the right to represent the Company shallhave either:

a. Collective signature authority, to be exercised together with another person authorized to sign, or

b. Individual  signature  authority,  in  which  case  their  acts  require  prior  approval  of  another  personauthorized to sign.

The signature of a member of the Board is not necessary on documents signed on behalf of the Company.Any  two  authorized  officials  of  the  Company  registered  with  the  Register  of  Commerce,  includingmembers of the Board, may execute documents on behalf of the Company. In addition, other officials ofthe  Company  may  execute  certain  classes  of  documents  on  behalf  of  the  Company  together  withauthorized officials under limited powers of attorney granted by the Board.

2.7 Discretion, secrecy

Each member of the Board is accountable for the documents entrusted to him. Each member is under anobligation  to  maintain  absolute  confidence  towards  third  persons  on  the  facts  that  came  to  his  attentionduring the exercise of his directorship.

2.8 Age and tenure limits

No member of the Board of Directors can seek re-election after he or she has reached the age of 70 years,unless  a  specific  exception  is  approved  by  the  Board.  The  same  age  limit  is  applicable  to  the  Board  ofconsolidated subsidiaries.

No member of the Board can seek re-election after he or she has served on the Board as a non-employeemember for 12 years, unless a specific exception is approved by the Board.

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A member of the Board who has reached the age or tenure limit referred to above during the term of his orher directorship may remain a director until the expiration of his or her term.

2.9 Annual review

The Board shall review at least once a year its own structure, processes, and performance, including theadequacy of these Regulations.  Independent  directors  shall  assess the adequacy of their  relationship andcooperation with executive directors.

2.10 Compensation

Subject to the powers of the general shareholders’ meeting, the Board determines the compensation of itsnon-employee  members  on  the  recommendation  of  the  Compensation  Committee.  The  compensation  ofemployee members of the Board is determined by the Compensation Committee.

3. The Chairman of the Board

In urgent cases, the Chairman of the Board has the power to take on his own a decision which would otherwise fallin the competence of the Board, provided that a resolution by way of circular letter in accordance with Article 2.3.1above is not possible or practicable.

Decisions  taken  by  the  Chairman  of  the  Board  in  this  way  shall  be  immediately  notified  in  writing  to  the  othermembers of the Board, and are subject to ratification by the Board at its next meeting or by way of circular letter.

4. The Chief Executive Officer

4.1 General responsibilities

In application of Article 17 of the Articles of Incorporation and subject to     Article 2.4 above, theBoard delegates the entire management of the business to the Chief Executive Officer, who does not needto be a     member of the Board.

The  Chief  Executive  Officer  spends  his  full  time  in  this  capacity.  He  conducts  the  business  with  thesupport of the Group Management Team. He organizes the Group Management Team and presides at itsmeetings.

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4.2 Detailed list of responsibilities

The Chief Executive Officer has, in particular, the following responsibilities and prerogatives:

- define and implement the short and medium term strategy and plans;

- establish preliminary and final budgets for submission to the Board for approval;

- produce the Company's preliminary financial statements as well as the annual report for submissionto the Board for approval and subsequent presentation to shareholders;

- hire,  dismiss  and  promote  employees,  except  members  of  the  Group  Management  Team  and  thehead of the Internal Audit function;

- take immediate measures to protect the interests of the Company where a breach of duty is suspectedfrom a member of the Group Management Team, including suspending the relevant member of theGroup Management Team from office. In such a case, the Board must decide on the matter within areasonable period of time;

- implement the decisions taken by the Board;

- report regularly to the Chairman of the Board on the evolution of the business;

- prepare supporting documents for decisions which are to be made by the Board;

- decide on issues that are brought to his attention by the Group Management Team;

- keep the share register of the Company, under the supervision of the Board.

4.3 Reporting line

The Chief Executive Officer reports to the Board.

4.4 Compensation

Subject to the powers of the general shareholders’ meeting, the Compensation Committee determines thecompensation, including salary and bonus, of the Chief Executive Officer.

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5. The Group Management Team

5.1 Appointment, dismissal, remuneration

The Board appoints and dismisses the members of the Group Management Team.

5.2 Roles and responsibilities

The roles and responsibilities of the members of the Group Management Team are in the job descriptionsof each of the Managers.

5.3 Subordination

The members of the Group Management Team are directly subordinated to the Chief Executive Officer.They keep him informed on the development of the business in general, as well as on events that impactthe Company. The head of the Internal Audit function is directly subordinated to the Audit Committee.

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5.4 Compensation

Subject to the powers of the general shareholders’ meeting, the Compensation Committee determines thecompensation,  including salary and bonus,  of  the members  of  the Group Management  Team. Subject  tothe  powers  of  the  general  shareholders’  meeting,  the  Audit  Committee  determines  the  compensation,including salary and bonus, of the head of the Internal Audit function. The Audit Committee may delegatethis responsibility to its Chair.

6. Prohibition on Loans to Directors and Officers

The  Company  will  not,  directly  or  indirectly,  extend  or  maintain  credit,  arrange  for  the  extension  of  credit,  orrenew an extension of credit in the form of a personal loan to or for any member of the Group Management Teamor member of the Board of the Company.

7. Final provisions

7.1 Entry into force

The present Regulations shall take effect upon their approval by the Board.

7.2 Amendments

On the Chairman's request, the present Regulations, must be reviewed and, as the case may be, updated ona yearly basis, i.e. during the first meeting of the Board following the ordinary shareholders meeting or asoften as the business of the Company requires.

Decisions regarding amendments of the present Regulations need to be approved by the absolute majorityof the attending members.

Adopted as of the 24 th of April, 1996, and amended as of the 28 th of June, 1999, the 14 th day of October, 2003, the8 th day of April, 2004, the 15 th day of June, 2006, the 17 th day of June, 2008, the 5 th day of September, 2013, the25 th day of March, 2015, the 29 th day of June, 2016 and the 6 th day of December, 2018.

ROMANEL, SWITZERLAND

Guerrino De Luca    Bryan KoChairman of the Board    Secretary

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Exhibit 21.1

LOGITECH INTERNATIONAL S.A.

LIST OF SUBSIDIARIES

Name of Subsidiary Jurisdiction of Incorporation

AMERICAS    Logitech Argentina S.R.L.   ArgentinaLogitech Do Brasil Comercio de Accessorios de Informatica Ltda.

  Brazil

Logitech de Mexico S.A. de C.V.   MexicoLogitech Canada Inc.   CanadaLogitech Inc.    United States of AmericaLogitech (Streaming Media) Inc.    United States of AmericaLogitech (Slim Devices) Inc.    United States of AmericaWiLife, Inc.    United States of AmericaLogitech Servicios Latinoamérica, S.A de C.V

    Mexico

Ultimate Ears Incorporated   United States of AmericaSightSpeed, Inc.   United States of AmericaUE Acquisition Inc.   United States of AmericaLogitech Latin America, Inc.   United States of AmericaBlue Microphones Holding Corporation

 United States of America

Baltic Latvian Universal Electronics,LLC 

United States of America

EMEA    Labtec Europe S.A.   SwitzerlandLogitech U.K. Limited   United KingdomLogitech Espana BCN SL   SpainLogitech Europe S.A.   SwitzerlandSAS Logitech France   Republic of FranceLogitech GmbH   Federal Republic of GermanyLogitech Ireland Services Limited   IrelandLogitech Italia SRL   Republic of ItalyLogitech Nordic AB   SwedenLogitech Benelux B.V.   Kingdom of the NetherlandsLogitech Poland Spolka z.o.o   PolandLogitech S.A.   SwitzerlandLogitech Middle East FZ-LLC   United Arab EmiratesLogitech (Streaming Media) SA   SwitzerlandLogitech Hellas MEPE   GreeceLogitech Schweiz AG   SwitzerlandLogitech Upicto GmbH   SwitzerlandLimited Liability Company “Logitech”   RussiaLogi Peripherals Technologies (South Africa) (Proprietary) Limited  

South Africa

Logitech Norway AS   NorwayLogitech Turkey Computer Marketing Services LLC

 Turkey

Name of Subsidiary Jurisdiction of Incorporation

ASIA PACIFIC    LogiCool Co., Ltd   JapanLogitech Electronic (India) Private Ltd   IndiaLogitech Far East, Ltd   Taiwan, Republic of ChinaLogitech Hong Kong Limited   Hong KongLogitech Korea Ltd   KoreaLogitech New Zealand Co., Ltd   New ZealandLogitech Service Asia Pacific Pte Ltd   Republic of SingaporeLogitech Singapore Pte Ltd   Republic of SingaporeLogitech Technology (Suzhou) Co, Ltd   People’s Republic of ChinaLogitech (China) Technology Co Ltd   People’s Republic of ChinaLogitech Asia Logistics Limited   Hong KongLogitech Asia Pacific Limited   Hong KongLogitech Australia Computer Peripherals Pty, Limited   Commonwealth of AustraliaLogitech (Beijing) Trading Company Limited   People’s Republic of ChinaLogitech Technology (Shenzhen) Consulting Co Ltd   People’s Republic of ChinaLogitech Engineering & Designs India Private Limited   IndiaLogi Computer Peripherals (Malaysia) Sdn. Bhd   MalaysiaLogitech JB Australia Pty Ltd.   Commonwealth of Australia

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TheBoardofDirectorsLogitechInternationalS.A.:

WeconsenttotheincorporationbyreferenceintheregistrationstatementsonFormS-8(No.333-100854,No.333-140429,No.333-157038,No.333-163933,No.333-167143,No.333-180725,No.333-180726,No.333-184583,No.333-192728andNo.333-221269)ofLogitechInternationalS.A.ofourreportdatedMay17,2019,withrespecttotheconsolidatedbalancesheetsofLogitechInternationalS.A.andsubsidiaries(theCompany)asofMarch31,2019and2018,andtherelatedconsolidatedstatementsofoperations,comprehensiveincome,changesinshareholders’equity,andcashflowsandtherelatednotesandfinancialstatementschedule(collectively,the“consolidatedfinancialstatements”)foreachoftheyearsinthethree-yearperiodendedMarch31,2019,andtheeffectivenessofinternalcontroloverfinancialreportingasofMarch31,2019,whichreportappearsintheMarch31,2019annualreportonForm10-KoftheCompany.

OurreportcontainsanexplanatoryparagraphthatstatestheCompanyexcludedfromitsassessmentoftheeffectivenessoftheCompany’sinternalcontroloverfinancialreportinganacquiredentity’sinternalcontroloverfinancialreportingandourauditofinternalcontroloverfinancialreportingoftheCompanyalsoexcludedanevaluationoftheinternalcontroloverfinancialreportingofthisentity.

OurreportreferstoachangeintheCompany’smethodofaccountingforrevenuein2019andexcesstaxbenefitsfromshare-basedpaymentsin2018duetotheadoptionnewaccountingstandards.

/s/KPMGLLP

SantaClara,California

May17,2019

Exhibit 31.1

CERTIFICATIONS

I,BrackenDarrell,certifythat:

1.IhavereviewedthisannualreportonForm10-KofLogitechInternationalS.A.;

2.Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiodcoveredbythisreport;

3.Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairlypresentinallmaterialrespectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;

4.Theregistrant'sothercertifyingofficerandIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefinedinExchangeActRules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting(asdefinedinExchangeActRules13a-15(f)and15d-15(f))fortheregistrantandhave:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision,toensurethatmaterialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

b.Designedsuchinternalcontroloverfinancialreporting,orcausedsuchinternalcontroloverfinancialreportingtobedesignedunderoursupervision,toprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples;

c.Evaluatedtheeffectivenessoftheregistrant'sdisclosurecontrolsandproceduresandpresentedinthisreportourconclusionsabouttheeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuchevaluation;and

d.Disclosedinthisreportanychangeintheregistrant'sinternalcontroloverfinancialreportingthatoccurredduringtheregistrant'smostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomateriallyaffect,theregistrant'sinternalcontroloverfinancialreporting;and

5.Theregistrant'sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontroloverfinancialreporting,totheregistrant'sauditorsandtheauditcommitteeoftheregistrant'sBoardofDirectors(orpersonsperformingtheequivalentfunctions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonablylikelytoadverselyaffecttheregistrant'sabilitytorecord,process,summarizeandreportfinancialinformation;and

b.Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheregistrant'sinternalcontroloverfinancialreporting.

     

     

     

May17,2019    

/s/BRACKENDARRELL    

BrackenDarrellPresident and Chief Executive Officer    

Exhibit 31.2

CERTIFICATIONS

I,VincentPilette,certifythat:

1.     IhavereviewedthisannualreportonForm10-KofLogitechInternationalS.A.;

2.     Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiodcoveredbythisreport;

3.     Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairlypresentinallmaterialrespectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;

4.     Theregistrant'sothercertifyingofficerandIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefinedinExchangeActRules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting(asdefinedinExchangeActRules13a-15(f)and15d-15(f))fortheregistrantandhave:

a.          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision,toensurethatmaterialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

b.     Designedsuchinternalcontroloverfinancialreporting,orcausedsuchinternalcontroloverfinancialreportingtobedesignedunderoursupervision,toprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples;

c.     Evaluatedtheeffectivenessoftheregistrant'sdisclosurecontrolsandproceduresandpresentedinthisreportourconclusionsabouttheeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuchevaluation;and

d.     Disclosedinthisreportanychangeintheregistrant'sinternalcontroloverfinancialreportingthatoccurredduringtheregistrant'smostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomateriallyaffect,theregistrant'sinternalcontroloverfinancialreporting;and

5.     Theregistrant'sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontroloverfinancialreporting,totheregistrant'sauditorsandtheauditcommitteeoftheregistrant'sBoardofDirectors(orpersonsperformingtheequivalentfunctions):

a.          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonablylikelytoadverselyaffecttheregistrant'sabilitytorecord,process,summarizeandreportfinancialinformation;and

b.     Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheregistrant'sinternalcontroloverfinancialreporting.

     

     

     

May17,2019    /s/VINCENTPILETTE    

VincentPiletteChief Financial Officer    

Exhibit 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13A-14(B) OR RULE15D-14(B) AND SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

The certification set forth below is being submitted in connection with this annual report on Form 10-K (the "Report") of LogitechInternationalS.A.("theCompany")forthepurposeofcomplyingwithRule13a-14(b)orRule15d-14(b)oftheSecuritiesExchangeActof1934(the"ExchangeAct")andSection1350ofChapter63ofTitle18oftheUnitedStatesCode.

BrackenDarrell,ChiefExecutiveOfficeroftheCompany,andVincentPilette,ChiefFinancialOfficeroftheCompany,eachcertifythat,tothebestofhisknowledge:

(1) theReportfullycomplieswiththerequirementsofSection13(a)or15(d)oftheExchangeAct;and(2) theinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresultsofoperationsofthe

Company.

     

May17,2019    /s/BRACKENDARRELL    

BrackenDarrellPresident and Chief Executive Officer         

/s/VINCENTPILETTE    

VincentPiletteChief Financial Officer