Logitech Q4 Sales Down 12% - Twice

Logitech Q4 Sales Down 12%

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Newark, Calif. — Logitech International reported yet another down quarter, with declining worldwide sales, but the computer accessories company said sales in the Americas have stabilized and it is now better positioned for growth after restructuring efforts.

Sales for the fiscal fourth quarter were $469 million, down 12 percent from $532 million in the prior-year period. The company, which put its remote control and video security divisions on the market earlier this year, posted an operating loss of $37 million for the period vs. operating income of $24 million in prior-year period. This loss included $16 million in restructuring charges and $6 million related to the impairment of goodwill and other assets, Logitech said.

Logitech eliminated 5 percent of its workforce in March.

Net loss for the quarter was $36 million compared with net income of $28 million in the prior year. Gross margin was 33.5 percent vs. 36.4 percent.

Worldwide retail sales decreased by 10 percent for quarter. Breakdown was as follows: Asia, up 2 percent; Americas, down 2 percent; EMEA, down 25 percent. OEM sales decreased by 21 percent, and sales for the LifeSize division decreased by 19 percent.

For the fiscal year 2013, sales were $2.1 billion vs. $2.3 billion for the 2012 fiscal year. Logitech reported an operating loss of $252 million. Excluding impairment and restructuring charges, non-GAAP operating income would have been $8 million, Logitech said.

The net loss for the full year was $228 million vs. net income of $71 million in the previous year. Gross margin was 33.7 percent vs. 33.5 percent.

Despite the dismal report, Logitech president/CEO Bracken P. Darrell said that although he wasn’t pleased with the financial performance, he was encouraged that the company’s retail business had started stabilizing. He pointed out that sales of mice and keyboards grew 6 percent in the Americas in the face of a down PC market. A slide presentation for investors stated that sales of tablet accessories tripled in the Americas.

“Across all three of our regions, I was very pleased with the continued strong growth of sales of our tablet accessories,” Darrell said in an investors call.

Its wearable audio and wireless speakers category was down 39 percent, and Darrell noted that the company attempted to launch too many products in too many markets. “We spread ourselves too thin by launching a relatively large number of new products in highly competitive categories.” 

Darrell said the company would narrow its focus to concentrate on small-form-factor wireless speakers, such as the UE Mobile boomboox, and its UE 900 earphones.

Despite its plans to sell off remote controls, Logitech debuted two new high-end devices earlier this month. Slides during the investors conference call indicated the company intends to transition out of the category by the end of fiscal year 2014. Sales for remote controls were down 33 percent for the fiscal fourth quarter and 21 percent for the year. 

“I believe we have taken appropriate action to effect a turnaround,” said Darrell. “We have narrowed our strategic focus, restructured the company, and prioritized our resources to create great new products for mobility platforms. We’re moving forward with urgency and clear priorities. Any turnaround takes time, but given our expectation for normal seasonality of the new fiscal year, I expect our progress will not become tangible until the second half of 2014.”

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