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Logitech To Exit Remote Control, Video Security

Newark, Calif. — After yet another disappointing financial period, Logitech announced it was divesting its remote control and video security categories, as well discontinuing other products.

Sales for the fiscal-year third quarter were $615 million, down 14 percent from the prior-year period. The company posted an operating loss of $180 million, which included a non-cash goodwill impairment charge, estimated to be $211 million.

Retail sales decreased 14 percent for the fiscal third quarter vs. the prior-year period. Sales in the Americas were down 8 percent. They were down 11 percent in Asia and 20 percent in EMEA. OEM sales decreased by 23 percent, and sales for the LifeSize division decreased by 4 percent.

According to a slide presentation on Logitech’s website, the company plans to divest the remote control and digital video security categories, and “discontinue other non-strategic products.” It will also “eliminate associated costs and seek additional opportunities for cost reductions in fiscal year 2014.”

Sales for remote controls were down 24 percent despite Logitech’s launch of its first high-end remote in more than four year, it noted.

In a statement, Logitech president/CEO Bracken Darrell said: “As we articulated when we started the third quarter, continued weakness in the global PC market was the primary factor in our disappointing Q3 results. These results are unacceptable, and we are taking decisive action as an outcome of my strategic review.”

Logitech will discontinue speaker docks and console gaming peripherals by the end of the year. According to Darrell, it will focus on tablet accessories instead. Its Ultrathin keyboard cover was again its No. 1 selling product for the quarter, and the company’s tablet accessory sales have nearly doubled in the Americas.

Net loss for the fiscal third quarter was $195 million ($1.24 per share) compared with net income of $55 million ($0.32 per share) in the prior-year period. Gross margin for the quarter was 34.2 percent, down from 36.2 percent.