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Logitech Posts Higher Q1 Sales Despite Web Cam Dip

Romanel-Sur-Morges, Switzerland — Logitech International reported higher sales but a slowdown in retail sales of Web cams in the Americas in its fiscal first quarter, ended June 30.

Sales for the quarter were $430 million, up 9 percent from $393 million in the same quarter last year. GAAP operating income was $24 million, up 1 percent from $23.8 million for the same quarter a year ago.

GAAP net income was $25.6 million, compared to $30.1 million in the first quarter of the previous year, which included an after-tax gain of $5.8 million from the sale of shares of Anoto Group AB. Excluding this gain in the prior year, net income increased by 5 percent. Gross margin was 33.7 percent, a year-over-year improvement of 300 basis points compared with 30.7 percent in last year’s first quarter.

Logitech’s retail sales for Q1 grew by 8 percent year-over-year, increasing in the Americas by 17 percent. With double-digit growth in most categories (led by audio at 39 percent and keyboards at 21 percent), retail sales were constrained by a year-over-year decline of 38 percent in the video category, due primarily to a 62 percent decline in some overseas markets.

Retail sales of webcams in the Americas declined only slightly year-over-year, and grew 46 percent sequentially, compared with the previous fiscal year’s fourth quarter.

Guerrino De Luca, Logitech president/CEO, said, “We have seen significant improvement in webcams in the Americas, we are working through the issue [in overseas markets] and we expect the video business to return to double-digit growth by Q4 of this fiscal year.”

He added, “Retail sales grew 21 percent for the quarter, excluding video, demonstrating the overall resilience of the portfolio. With a strong balance sheet, a full complement of innovative products being introduced this summer, and our plan to more closely align operating expense growth with gross profit growth, we expect to achieve our FY 2008 goals.”