LeapFrog Enterprises has revealed its Q3 2014 results, and for the quarter ended September 30th, 2014 compared to the quarter ended September 30th, 2013, consolidated net sales were $113.6 million, down 43 per cent.
Elsewhere, US segment net sales were down 47 per cent, and international segment net sales were down 33 per cent.
Net loss per basic and diluted share was $0.03, compared to net income per diluted share of $0.37 a year ago.
Cash and cash equivalents were $111.3 million as of September 30th, 2014, up 42 per cent compared to $78.4 million as of September 30th, 2013.
Despite these challenges, the company is confident it will enjoy a brighter Q4.
"Our business year-to-date has been negatively impacted by the significant retail inventory carry-over of tablets from Holiday 2013, the planned later launch of our major new products compared to last year, many of our retail partners around the world running far tighter inventories this year and retail sales softness in some of our key product categories," said John Barbour, chief executive officer.
"In addition, our fiscal second quarter net sales were hampered with the slippage of first shipments of LeapTV into the fiscal third quarter, which is the primary reason our fiscal second quarter net sales results were below our guidance range.
"Despite these challenges, we believe we are well-positioned for the all-important holiday season with our biggest ever line of fun educational content, filled with lots of new games, books and videos; the exciting launch of our innovative new active educational video game system, LeapTV; two new feature-filled tablets in our LeapPad line, which continues to be the #1 best-selling line of children's tablets in our major markets based on unit sales; and a strong line-up of learning toys and interactive reading platforms.
"In October, we began shipping LeapTV and early retail sales and reviews have been very encouraging. With limited distribution, LeapTV has already hit the Top 25 selling list this week in one major retailer, and it has been named on many retailer, media and industry top toy lists for this holiday. We are very excited about the platform's potential to diversify and expand our business into a sizeable new entertainment category.
"Additionally, an important part of Fiscal 2015 is the significant strategic investments we are making into building operational foundations that will support our growth plans into the future. In addition to implementing a new company-wide ERP system, we are investing in developing new platforms and content, international expansion and building online communities. We believe these investments will position us for long-term growth and continued leadership in educational entertainment."