Logitech (LOGI) Announces $211M Non-Cash Goodwill Impairment Charge
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Logitech International (Nasdaq: LOGI) announced that it will take a non-cash, non-tax-deductible goodwill impairment charge, estimated to be $211 million, in the third quarter of Fiscal Year 2013, related to its video conferencing reporting unit.
Logitech’s video conferencing reporting unit encompasses the integrated operations of the company’s acquisitions of Sightspeed, LifeSize, Paradial and Mirial, for approximately $440 million combined. Under generally accepted accounting principles (GAAP), companies are required to conduct an annual goodwill impairment test for each of their reporting units. Goodwill is considered impaired when its carrying amount exceeds its implied fair value. As a result of its annual impairment test, Logitech determined that a write down of its video conferencing reporting unit goodwill was required, with the bulk of the impairment related to its LifeSize acquisition.
The enterprise video conferencing industry has experienced a slowdown in recent quarters and consequently, through this period, the video conferencing reporting unit has not sustained the growth Logitech originally anticipated. Logitech does not expect this accounting write down to affect its business or financial performance beyond the recently completed third quarter.
Logitech’s video conferencing reporting unit encompasses the integrated operations of the company’s acquisitions of Sightspeed, LifeSize, Paradial and Mirial, for approximately $440 million combined. Under generally accepted accounting principles (GAAP), companies are required to conduct an annual goodwill impairment test for each of their reporting units. Goodwill is considered impaired when its carrying amount exceeds its implied fair value. As a result of its annual impairment test, Logitech determined that a write down of its video conferencing reporting unit goodwill was required, with the bulk of the impairment related to its LifeSize acquisition.
The enterprise video conferencing industry has experienced a slowdown in recent quarters and consequently, through this period, the video conferencing reporting unit has not sustained the growth Logitech originally anticipated. Logitech does not expect this accounting write down to affect its business or financial performance beyond the recently completed third quarter.
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