Logitech withdraws fiscal year 2009 targets, plans restructuring
06 Jan 2009
Swiss IT peripheral products maker Logitech International today said it was withdrawing its fiscal 2009 guidance for sales and operating income due to the deepening global recession.
The company will be revising its growth targets for the second time in two. In October 2008, it reduced its forecast for for 2009 sales growth to 6 to 8 per cent and operating income growth of 3 to 5 per cent from the earlier projected target of 15 per cent growth for both.
The company has yet to provide the revised targets and plans to update its investors on business conditions and performance during its briefing on third-quarter results on Jan. 20, 2009.
''During the December quarter, the retail environment deteriorated significantly,'' said Gerald P. Quindlen, Logitech president and chief executive officer.
''We experienced varying degrees of weakness across all geographies and channels as our customers reduced inventory levels in the face of weaker consumer demand. Moreover, we expect the economic environment to worsen in the coming months and we are therefore taking significant actions to align our cost structure with what is likely to be an extended downturn.'' he added.
The company aims at reducing operating expenses, cut its salaried workforce globally by approximately 15 per cent.
The company has offices in Switzerland and California with about 3,500 salaried employees in a total work force of about 9,000 in more than 30 countries.
The associated restructuring charge will be announced with the Company's Q3 FY 2009 results and booked in the fourth quarter of FY 2009.
The company expects the restructuring to show results in the first quarter of FY 2010.
''Although the external environment is more challenging than anything we've experienced before, we believe Logitech is very well positioned to manage through this downturn,'' continued Quindlen.
''We have a strong cash position, no debt, and we continue to maintain market share across multiple segments and geographies. We remain confident in our strategy for driving long-term double-digit growth and we believe the well-considered actions we're taking now will result in an even stronger Logitech when the economic recovery begins.''
The company had recently announced additions to its MetroFi line of Ultimate Ears by Logitech earphones. (See: Logitech introduces the new Ultimate Ears range)
