Improved Profitability Expected for FY 2014
NEWARK, Calif. - April 24, 2013 and MORGES, Switzerland, April 25, 2013 - Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the fourth quarter and full year of Fiscal Year 2013.
Sales for Q4 FY 2013 were $469 million, down 12 percent from $532 million in Q4 FY 2012. Excluding the unfavorable impact of exchange rates, sales were down by 11 percent compared to the prior year. The Company posted an operating loss for the fourth quarter of $37 million compared to operating income of $24 million in the same quarter a year ago. The operating loss included $16 million in restructuring charges and $6 million related to the impairment of goodwill and other assets. The net loss for Q4 FY 2013 was $36 million ($0.23 per share) compared to net income of $28 million ($0.17 per share) in the prior year. Gross margin for Q4 FY 2013 was 33.5 percent, down from 36.4 percent a year ago.
Logitech's retail sales for Q4 FY 2013 decreased by 10 percent year over year, up 2 percent in Asia, down 2 percent in the Americas and down 25 percent in EMEA. OEM sales decreased by 21 percent and sales for the LifeSize division decreased by 19 percent.
For the full 2013 fiscal year, ending March 31, 2013, sales were $2.1 billion, compared to $2.3 billion in FY 2012. The Company posted an operating loss of $252 million. Excluding impairment and restructuring charges, FY 2013 non-GAAP operating income would have been $8 million. The net loss for the full fiscal year was $228 million ($1.44 per share) compared to net income of $71 million ($0.41 per share) in FY 2012. Gross margin for FY 2013 was 33.7 percent compared to 33.5 percent in FY 2012.
"Regionally, with the exception of EMEA, our retail business has begun to stabilize," said Bracken P. Darrell, Logitech president and chief executive officer. "In Europe, the combination of the difficult macro-economic environment and the very slow PC market stalled our business in Q4. For the rest of our retail business (Americas and Asia), sales of our mice and keyboards grew 6 percent, much better than the market for PCs, which was down globally nearly 14 percent year over year. I was also pleased with the strong momentum of our tablets accessories during the fourth quarter. We recently launched a version of our best-selling Ultrathin Keyboard Cover for the iPad mini as well as a range of new tablet folios.
"In closing FY 2013, I believe we have taken appropriate actions to effect a turnaround," said Mr. Darrell. "We have narrowed our strategic focus; restructured the company, including our LifeSize division; and prioritized our resources to create great new products for tablets. While the PC market continues to weigh upon parts of our business, and the ongoing economic uncertainty in much of Europe shows no signs of improvement, our product portfolio and indications of stabilization in the Americas and Asia, combined with the cost savings resulting from our FY 2013 restructuring initiatives, position us for improved profitability in FY 2014.
Outlook
For Fiscal Year 2014, ending March 31, 2014, Logitech currently expects sales of approximately $2 billion, operating income of approximately $50 million and gross margin of approximately 34 percent.
Prepared Remarks Available Online
Logitech has made its prepared written remarks for the financial results teleconference available online on the Logitech corporate Web site at http://ir.logitech.com. The remarks are posted in the Calendar section on the Investor home page.
Financial Results Teleconference and Webcast
Logitech will hold a financial results teleconference to discuss the results for Q4 FY 2013 on Thursday, April 25, 2013 at 8:30 a.m. Eastern Daylight Time and 14:30 Central European Summer Time. A live webcast of the call will be available on the Logitech corporate website at http://ir.logitech.com.
About Logitech
Logitech is a world leader in products that connect people to the digital experiences they care about. Spanning multiple computing, communication and entertainment platforms, Logitech's combined hardware and software enable or enhance digital navigation, music and video entertainment, gaming, social networking, audio and video communication over the Internet, video security and home-entertainment control. Founded in 1981, Logitech International is a Swiss public company listed on the SIX Swiss Exchange (LOGN) and on the Nasdaq Global Select Market (LOGI).
This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding: improved profitability, the stabilization and turnaround of our business, momentum of our tablets accessories, new product development, and Fiscal Year 2014 sales, operating income and gross margin. The forward-looking statements in this release involve risks and uncertainties that could cause Logitech's actual results and events to differ materially from those anticipated in these forward-looking statements, including, without limitation: if our product offerings, marketing activities and investment prioritization decisions do not result in the sales, profitability or profitability growth we expect, or when we expect it; the demand of our customers and our consumers for our products and our ability to accurately forecast it; if we fail to innovate and develop new products in a timely and cost-effective manner for our new and existing product categories; if we do not successfully execute on our growth opportunities in our new product categories and sales in emerging market geographies; if sales of PC peripherals in mature markets are less than we expect; the effect of pricing, product, marketing and other initiatives by our competitors, and our reaction to them, on our sales, gross margins and profitability; if our products and marketing strategies fail to separate our products from competitors' products; if there is a deterioration of business and economic conditions in one or more of our sales regions or operating segments, or significant fluctuations in exchange rates. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in Logitech's periodic filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2012, available at www.sec.gov, under the caption Risk Factors and elsewhere. Logitech does not undertake any obligation to update any forward-looking statements to reflect new information or events or circumstances occurring after the date of this press release.
Logitech, the Logitech logo, and other Logitech marks are registered in Switzerland and other countries. All other trademarks are the property of their respective owners. For more information about Logitech and its products, visit the company's Web site at www.logitech.com.
(LOGIIR)
Editorial Contacts:
Joe Greenhalgh, Vice President, Investor Relations - USA (510) 713-4430
Nancy Morrison, Vice President, Corporate Communications - USA (510) 713-4948
Laura Scorza, Sr. Public Relations Manager - Europe +41-(0) 21-863-5336