Logitech Delivers Record Q3 Results; Strong Growth in Audio, Video, Remotes Propels Quarterly Revenue Past Half Billion Dollar Mark for the First Time in the Company's History

For Logitech's third quarter of FY 2006, ended December 31, 2005,sales were $574 million, up 19 percent from $484 million in the samequarter last year. Operating income was $80.7 million, up 10 percentfrom $73.6 million last year. Net income for the quarter was $71.3million ($.71 per share), up 11 percent from $64.2 million ($.66 pershare) in the prior year. Gross margin was 32.3 percent, down from34.8 percent in Q3 FY 2005, and up sequentially from 31.4 percent inQ2 FY 2006.

Logitech's retail sales in the third quarter were up 19 percentover the prior year, driven by strong demand for audio, video andremote-control products. Retail sales growth was 15 percent in EMEA,26 percent in the Americas and 20 percent in Asia Pacific. TheCompany's OEM sales were up 15 percent over last year, primarily dueto sales of mice.

"Our strong sales growth during the important holiday-buyingseason confirms that Logitech is successfully executing our strategyto ride the wave of key consumer trends -- the popularity of digitalmusic, the pervasiveness of broadband connectivity, and the evolvingrole of the PC as an entertainment and communication platform," saidGuerrino De Luca, Logitech president and chief executive officer. "Ouraudio and video products continue to be key growth drivers. And theHarmony remotes product line has established itself as an additionaldriver, with significant future opportunities.

"Even with audio representing a higher proportion of the retailproduct mix compared to the previous two quarters, we still achieved asequential increase in gross margin of nearly 100 basis points, due inpart to continued improvements in the audio category."

Highlights for Logitech's Q3 FY 2006

-- Retail sales of Logitech's video products grew 44 percent year-over-year, reflecting the increasing use of video communications over the Internet and demand across the full line of Logitech's webcams, including the new QuickCam(R) Fusion.

-- Fueled by the growing popularity among consumers of audio communications over the Internet, using services such as Skype's, Logitech's retail sales of PC headsets grew by 90 percent year-over-year.

-- Retail sales of Logitech speakers grew by 144 percent compared to the same quarter last year. The mm50 portable speakers for iPod(R) were a significant growth driver for the Company's booming speaker business, achieving the highest-ever revenue for any Logitech speaker product in a single quarter.

-- Retail sales momentum continued to accelerate across the range of Logitech(R) Harmony(R) universal remote controls, with the Harmony 880 remaining the strongest performer.

-- Enthusiastic market response to the Logitech G7 Laser Cordless Mouse and the G5 Laser Mouse resulted in retail sales of Logitech's gaming mice nearly doubling, compared to the same quarter last year.

Outlook

For the current fiscal year, ending March 31, 2006, the Companytargets sales growth of at least 20 percent for the full fiscal year,compared to its previous target of 18-20 percent. The Companycontinues to expect operating income growth for the full fiscal yearto exceed 15 percent and gross margin to be at the low end of thecompany's long-term target range of 32 to 34 percent.

The company also provided preliminary financial targets for FiscalYear 2007, ending March 31, 2007, of 15 percent year-over-year growthin sales and operating income, excluding the impact of new accountingfor expensing stock-related compensation.

Earnings Teleconference

Logitech will hold an earnings teleconference on Thursday, Jan.19, 2006 at 14:00 Central European Time/8:00 a.m. Eastern StandardTime/5:00 a.m. Pacific Standard Time. A live webcast and replay of theteleconference, including presentation slides, will be available athttp://ir.logitech.com. Please visit the Web site at least 10 minutesearly to register for the teleconference webcast.

About Logitech

Founded in 1981, Logitech designs, manufactures and marketspersonal peripherals that enable people to effectively work, play, andcommunicate in the digital world. Logitech International is a Swisspublic company traded on the SWX Swiss Exchange (LOGN) and in the U.S.on the Nasdaq National Market System (LOGI). The company hasmanufacturing facilities in Asia and offices in major cities in NorthAmerica, Europe and Asia Pacific.

This press release contains forward-looking statements regardingexpected sales, operating income and gross margin for Fiscal Year2006, long-term gross margin target range and sales and operatingincome growth for Fiscal Year 2007. These forward-looking statementsinvolve risks and uncertainties that could cause Logitech's actualperformance to differ materially from that anticipated in theseforward-looking statements. Factors that could cause actual results todiffer materially include our ability to introduce successful productsin a timely manner, the effect of pricing, product, marketing andother initiatives by our competitors and our reaction to them on oursales, gross margins and profitability, our ability to matchproduction to demand and to coordinate the worldwide manufacturing anddistribution of our products in a timely and cost-effective manner,the sales mix between our lower- and higher-margin products, consumerdemand for our products and our ability to accurately forecast it, aswell as those additional factors set forth in our periodic filingswith the Securities and Exchange Commission, including our annualreport on Form 20-F for the fiscal year ended March 31, 2005, and ourquarterly reports on Form 6-K, available at www.sec.gov. Logitech doesnot undertake to update any forward-looking statements.

The operating income target for Fiscal Year 2007 excludingstock-related compensation is a non-GAAP financial measure under newaccounting rules that require the expensing of stock-relatedcompensation effective for Logitech beginning with its next fiscalyear, starting April 1, 2006. Under these rules, the Company isrequired to determine the appropriate fair value model to be used tovalue share-based payments, the amortization method for compensationcost and the transition method to be used at the date of adoption.Logitech is in the process of making these determinations and as aresult at this time management is unable to provide a non-GAAP to GAAPreconciliation of its Fiscal Year 2007 operating income target.

Logitech, the Logitech logo and other Logitech marks are owned byLogitech and may be registered. All other trademarks are the propertyof their respective owners. For more information about Logitech andits products, visit the Company's Web site at www.logitech.com.
LOGITECH INTERNATIONAL S.A.

(In thousands, except per share / ADS) -- Unaudited


Quarter Ended December 31
CONSOLIDATED STATEMENTS OF INCOME 2005 2004
----------------------------------------------------------------------

Net sales $573,856 $483,816
Cost of goods sold 388,349 315,488
-------------------------
Gross profit 185,507 168,328
-------------------------
% of net sales 32.3% 34.8%

Operating expenses:
Marketing and selling 66,380 61,020
Research and development 22,380 19,160
General and administration 16,074 14,547
-------------------------
Total operating expenses 104,834 94,727
-------------------------

Operating income 80,673 73,601

Interest income, net 1,182 233
Other income, net 1,108 1,682
-------------------------

Income before income taxes 82,963 75,516
Provision for income taxes 11,615 11,327
-------------------------

Net income $ 71,348 $ 64,189
=========================


Shares used to compute net income per share
and ADS:
Basic 92,897 87,657
Diluted 100,190 98,353
Net income per share and ADS:
Basic $ 0.77 $ 0.73
Diluted $ 0.71 $ 0.66

Note:
Share and per-share data for all periods presented have been adjusted
to give effect to the two-for-one stock split that took effect on June
30, 2005.



LOGITECH INTERNATIONAL S.A.

(In thousands, except per share / ADS) -- Unaudited


Nine Months Ended December 31
CONSOLIDATED STATEMENTS OF INCOME 2005 2004
----------------------------------------------------------------------

Net sales $1,330,659 $1,079,978
Cost of goods sold 905,418 711,515
-----------------------------
Gross profit 425,241 368,463
-----------------------------
% of net sales 32.0% 34.1%

Operating expenses:
Marketing and selling 170,376 149,822
Research and development 64,889 53,342
General and administration 45,836 40,575
-----------------------------
Total operating expenses 281,101 243,739
-----------------------------

Operating income 144,140 124,724

Interest income (expense), net 2,460 (282)
Other income, net 4,545 3,831
-----------------------------

Income before income taxes 151,145 128,273
Provision for income taxes 21,163 19,240
-----------------------------

Net income $ 129,982 $ 109,033
=============================


Shares used to compute net income per
share and ADS:
Basic 90,267 88,521
Diluted 100,040 99,035
Net income per share and ADS:
Basic $ 1.44 $ 1.23
Diluted $ 1.31 $ 1.12

Note:
Share and per-share data for all periods presented have been adjusted
to give effect to the two-for-one stock split that took effect on June
30, 2005.



LOGITECH INTERNATIONAL S.A.

(In thousands) -- Unaudited


December 31, March 31, December 31,
CONSOLIDATED BALANCE SHEETS 2005 2005 2004
----------------------------------------------------------------------


Current assets
Cash and cash equivalents $ 276,872 $ 341,277 $ 245,967
Accounts receivable 370,048 229,234 295,816
Inventories 257,577 175,986 186,003
Other current assets 49,631 50,364 46,229
------------ ------------ ------------
Total current assets 954,128 796,861 774,015
Investments 16,703 16,793 16,715
Property, plant and equipment 68,886 52,656 47,674
Intangible assets
Goodwill 135,399 134,286 134,807
Other intangible assets 12,335 15,816 17,504
Other assets 1,856 2,460 3,275
------------ ------------ ------------
Total assets $1,189,307 $1,018,872 $ 993,990
============ ============ ============

Current liabilities
Short-term debt $ 14,061 $ 9,875 $ 10,283
Accounts payable 242,641 177,748 189,063
Accrued liabilities 174,864 156,575 157,362
------------ ------------ ------------
Total current liabilities 431,566 344,198 356,708
Long-term debt 16 147,788 155,485
Other liabilities 949 737 876
------------ ------------ ------------
Total liabilities 432,531 492,723 513,069

Shareholders' equity 756,776 526,149 480,921

------------ ------------ ------------
Total liabilities and
shareholders' equity $1,189,307 $1,018,872 $ 993,990
============ ============ ============



LOGITECH INTERNATIONAL S.A.

(In thousands) -- Unaudited


Quarter Ended Nine Months Ended
December 31 December 31
------------------- -----------------------
SUPPLEMENTAL FINANCIAL
INFORMATION 2005 2004 2005 2004
---------------------------------------------- -----------------------

Depreciation $ 7,720 $ 6,702 $ 23,475 $ 18,858
Amortization of other
acquisition-related
intangibles 1,160 1,654 3,481 4,635
Operating income 80,673 73,601 144,140 124,724
Operating income before
depreciation and
amortization 89,553 81,957 171,096 148,217
Capital expenditures 13,531 9,194 37,617 27,522


Net sales by channel:
Retail $516,575 $433,840 $1,169,645 $ 942,235
OEM 57,281 49,976 161,014 137,743
--------- --------- ----------- -----------
Total net sales $573,856 $483,816 $1,330,659 $1,079,978
========= ========= =========== ===========


Net sales by product
family:
Retail -- Cordless $148,336 $158,625 $ 333,706 $ 336,275
Retail -- Corded 86,821 91,000 233,126 220,201
Retail -- Video 82,401 57,309 192,238 151,188
Retail -- Audio 117,602 51,405 247,000 106,011
Retail -- Gaming 56,552 66,639 108,136 107,823
Retail -- Other 24,863 8,862 55,439 20,737
OEM 57,281 49,976 161,014 137,743
--------- --------- ----------- -----------
Total net sales $573,856 $483,816 $1,330,659 $1,079,978
========= ========= =========== ===========

(LOGI - IR)