[Leica] Leica Finances

[Larry Kopitnik <kopitnil@marketingcomm.com>]

Reading Leica's 3rd Quarter Financial Report is quite interesting (a PDF
file can be downloaded from their web site at
http://www.leica-camera.com/untern/ir/ir_e.htm#3q9899 ).

Overall, the report takes an optimistic tone. Leica lost just 1/2 million
DM in the 3rd quarter (October - December, 1998) compared to 2 million DM
in the second quarter. But they have lost a total of 6.75 million DM (after
taxes) so far for the year.

Comparing the first 9 months of this fiscal year to the first 9 months of
the last fiscal year, total sales are up 0.9% (hardly keeping pace with
inflation, I'd guess). But the breakout by product line is more telling: M
system sales are up 5.8%. Compact camera sales are up 54.5%. Binocular
sales are up 12.9%. Projector sales are up 5.4%.

And R system sales are down 33.6%.

Last year, compact camera sales were less that half R sales. This year
they're selling about 3% greater than the entire R system. In fact, if you
deduct R sales altogether from the figures for the first 9 months of both
this year and last, culmative sales for all other product lines are up
almost 12.5% this year.

Comparing just this year's 3-month 3rd quarter (which includes the
Christmas selling season) with last year's is equally telling. Net sales
are up 6%. The breakout by product line: M system sales up 18.7%. Compact
camera sales up 30.6%. Binocular sales up 18.2%.

Projector sales down 6.6%. R system sales down 33.9%.

In the text of the report, financial results of all product lines are
described by a full paragraph, except the R system, which gets just one
terse sentence: "Sales of SLR cameras and lenses of the Leica R system
amounting to DM 32.3 million are at the level of the long-term average
attained by this product range."

I suspect Leica didn't develop the R8 with the expectation of sales
dropping back to "the level of the long-term average attained by this
product range" in just 3 years.

Larry