This is becoming a trend. After a disappointing Q4 saw Logitech reduce the price of its Revue it revealed today that after a net loss of $29.6 million for the first quarter it is cutting the price of the Revue to $99, as well as saying goodbye to CEO Gerald P. Quindlen. Quindlen had been an outspoken supporter of the Google TV box (see the video after the break) but according to Logitech this price cut and corresponding $34 million hit to its finances are necessary to "remove price as a barrier to broad customer acceptance." In the midst of these results -- as well as lowered sales in several regions and key products like Harmony remotes -- Chairman and former CEO Guerrino De Luca will assume the role of acting CEO while a long term replacement is sought. Until then, and before the Google TV Honeycomb update arrives, does anyone think the Revue will be more appealing for one Benjamin than it was for two, or three?
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Logitech Announces First Quarter Results for FY 2012 Company Takes $34M Q1 Charge for Planned Price Reduction on Logitech Revue
FREMONT, Calif., July 27, 2011 and MORGES, Switzerland, July 28, 2011 - Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the first quarter of Fiscal Year 2012.
Sales for Q1 FY 2012 were $480 million compared to $479 million in Q1 FY 2011. Excluding the favorable impact of exchange rate changes, sales declined by 4 percent year over year. The Company posted an operating loss of $45 million, compared to operating income of $12 million in the same quarter a year ago. Included in Logitech's Q1 FY 2012 operating loss is a $34 million charge to cost of goods sold due to a planned price reduction on Logitech Revue with Google TV. The net loss for Q1 FY 2012 was $30 million ($0.17 per share) compared to net income of $20 million ($0.11 per share) in Q1 of FY 2011. Gross margin for Q1 FY 2012, reflecting the charge related to repricing of Logitech Revue, was 26.1 percent, down from 35.3 percent one year ago
Logitech's retail sales for Q1 FY 2012 were flat year over year, with an increase in Asia of 29 percent, an increase in the Americas of 1 percent, and a decrease in EMEA of 14 percent. OEM sales decreased by 16 percent. Sales for the LifeSize division grew 34 percent.
In Q1, Logitech achieved strong growth in Asia, driven primarily by China. Also notable for the first quarter was continued sales momentum by the LifeSize division and a positive initial reception of the Company's new tablet accessories.
While Logitech is making progress in improving operations in the Company's EMEA sales region, the Q1 performance reflects sustained weakness in the region. The Company also experienced minimal sales growth in its Americas region, primarily due to very weak sales in the Digital Home category. Logitech's loss in Q1 was compounded by the significant impact of the decision to reduce the price of Logitech Revue from $249 to $99 during Q2. The action was taken with the goal of accelerating adoption of the Google TV platform by removing price as a barrier to broad consumer acceptance.
In a separate announcement today, Logitech said that Chairman Guerrino De Luca has assumed the additional role of acting president and chief executive officer, succeeding departing CEO Gerald P. Quindlen.
"I resume my former role as CEO, on an acting basis, with unwavering commitment to Logitech and strong confidence in the Company's future and growth potential," said Guerrino De Luca. "My priorities will be to pursue our many opportunities with a strong sense of urgency and to renew the confidence in Logitech among all stakeholders."
Outlook For Fiscal Year 2012, ending March 31, 2012, Logitech has lowered its sales outlook from approximately $2.6 billion to approximately $2.5 billion. The Company has lowered its FY 2012 target for operating income from approximately $185 million to equal to or greater than FY 2011 operating income of $143 million.
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 on Thursday, July 28, 2011 at 8:30 a.m. Eastern Daylight Time and 14:30 Central European Summer Time. A live webcast of the call, along with presentation slides, will be available on the Logitech corporate Web site 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).
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