LeapFrog Enterprises announced financial results for the third quarter fiscal year 2016. Consolidated net sales were $83.1 million, down 43%.
Article continues below
U.S. segment net sales were down 41%, and international segment net sales were down 46%.
Net loss per basic and diluted share was $0.62 compared to prior year net loss per basic and diluted share of $1.77, which included $0.23 per share of goodwill impairment, net of the associated tax benefit, and $1.29 per share of an additional deferred tax asset valuation allowance.
Total impact of foreign currency exchange rates on net sales was $2.6 million, or negative 2%.
Third fiscal quarter net sales were $83.1 million, down 43% compared to $144.6 million last year, and included a 2% negative impact from changes in currency exchange rates.
In the U.S. segment, net sales were $58.6 million, down 41% compared to $99.2 million last year. In the International segment, net sales were $24.5 million, down 46% compared to $45.4 million last year, and included a 6% negative impact from changes in currency exchange rates.
Operating expenses for the third fiscal quarter were $50.5 million, down 38% compared to $81.6 million last year. Operating expenses, excluding impairments and depreciation were $49.1 million, down 17% compared to $59.1 million in the prior year.
The improvements in our expense structure were offset by severance pay and higher professional and legal fees.
Loss from operations was $43.1 million, compared to prior year's loss of $36.5 million due to sales and gross margin declines. Adjusted loss from operations, which excludes impairment and depreciation, was $41.7 million, compared to the prior year's loss of $14 million.
The losses in the quarter included a series of one-off non-cash charges for lower of cost or market charges to write-down LeapTV to net realizable value and to impair capitalized content for discontinued LeapTV titles.
Net loss for the third fiscal quarter was $44.2 million, or $0.62 per basic and diluted share compared to prior year net loss of $124.2 million, or $1.77 per basic and diluted share.
Prior year net loss included non-cash charges of $19.5 million or $0.28 per share for goodwill impairment, associated non-cash tax benefits of $3.8 million or $0.05 per share, and $90.8 million or $1.29 per share for an additional non-cash deferred tax asset valuation allowance.
Adjusted net loss per basic and diluted share1, which excludes impairment of long-lived assets, goodwill impairment, the tax benefit associated with goodwill impairment and the deferred tax asset valuation allowance adjustment, was $0.61, compared to adjusted net loss per basic and diluted share1 of $0.25 a year ago.
Non-GAAP adjusted EBITDA2 for the quarter was negative $34.7 million compared to negative EBITDA of $7.3 million a year ago. ■