LeapFrog has reported net sales of $144 million for the third quarter, down $40 million on the same period last year.
Sales for the US segment dropped by 20 per cent from 138.5 million to $109.5 million; international sales also dropped by almost 24 per cent to $30.2 million.
However, the firm’s net loss improved substantially from almost $50 million for Q3 in 2006 to just $2.8 million for the period which ended September 30th, 2007.
LeapFrog’s operating loss improved by about $12 million to a loss of $3.1 million for the quarter, while its cash and investments totalled almost $98 million.
Gross profit for the firm improved from $49.2 million in 2006 to $60.8 million, despite the drop in sales.
Jeffrey Katz, president and CEO of LeapFrog said Q3 sales were weaker than expected.
“However, we're encouraged by the good results from several of our new products and our Leapster handheld business continues to perform very well. With the launch of our 2008 product line, we expect to see the business grow in 2008 and beyond," Katz said.
Bill Chiasson, chief financial officer for the firm added: "We're positioned well to enter the "Grow" phase of our strategic plan with improved gross margins, a strong cash position, and prudent inventory levels. We expect continued improvements in our business fundamentals over the next 12 months,"
LeapFrog expects its full year 2007 results will include a decrease in revenue between 10 per cent and 15 per cent but a “significant improvement” in gross margin and net loss. The firm also expects to reduce its overall operating expenses.