[Leica] Leica Financials Good Overall

[Larry Kopitnik <kopitnil@marketingcomm.com>]

In the past, some have complained of seeing financial reports. If 
that doesn't interest you, skip this message now. You've been warned.

Leica has posted to their web site a July 28th release with the last 
fiscal year's financial results (it can be downloaded as a pdf 
document). And it's mostly positive news. As previsously posted to 
the LUG, they turned a profit of almost DM 1 million, following years 
of losses. While Chairman of the Board Cohn has met with criticism 
here more than once, it seems to me he has earned praise. He was 
hired to return the company to profitability and he has done exactly 
that. The report's stated goal is to earn back over the next 3 years 
the DM 30 million lost over the last 2 years. And already sales for 
the first quarter of the new fiscal year are up by 20% over the first 
quarter of last year.

By product, the report says that the M system saw the largest sales 
increase last year, up 20% to DM 83.3 million. Compact cameras were 
up 13.8% to DM 44.3 million (they expect that segment to continue to 
grow with the introduction of an APS camera and a new digital compact 
camera). Minox sales were up 15.4% to DM 11.1 million.

But sales for 2 product groups dropped. Slide projectors fell 16.7% 
to DM 19.1 million. And R system sales, after falling 37% the 
previous year, fell another 12.3% last year to DM 37.4 million. The 
report says, "The exaggerated expectations, with which the high 
development costs were justified, have not been fulfilled with regard 
to the Leica R8 camera presented in 1996."

By region, US sales were up 12.7% to DM 63.9 million, noting 
specifically an increase in "sports optics products" (binoculars?). 
European sales were steady, down just 0.2% to DM 77.7 million. Asia 
and Australia were up 17.8% to DM 43.9 million.

German sales were down 9.2% to DM 79 .0 million which, they say, "was 
due primarily to the overproportional significance of the two 
declining product segments of SLR cameras and projectors." To counter 
the sales decline, Leica is increasing advertising in Germany 
including, for the first time, TV ads.

The report shows 1482 employees currently, down from 1585 a year ago, 
and says no further layoffs are planned. But apparently the 
restructuring was critically necessary, as the report states, 
"Without the restructuring measures, the result would have been 
approximately DM 13 million worse and would have resulted in a 
situation endangering the existence of the Company."

Larry