Alleghany Capital Acquires Interest in Jazwares
Alleghany Capital Corporation, a wholly owned subsidiary of Alleghany Corporation, announced that it has acquired an interest in Jazwares, LLC.
“Jazwares has grown significantly over the past number of years by delivering high quality, must-have toys and consumer electronics to children worldwide,” said Judd Zebersky, president and CEO of Jazwares, in a statement. “As we pursue our next stage of growth, we are enthusiastic to partner with ACC given its unique long-term perspective and history of backing entrepreneurial management teams.”
David Van Geyzel, president and CEO of ACC, stated, “Over the past two decades, Jazwares has established a strong reputation for innovation in the licensed products industry.”
Valufinder Group, Inc., acted as financial advisor and Seyfarth Shaw, LLP acted as legal counsel to ACC. Marketing Management Group, Inc., acted as financial advisor and Pryor Cashman, LLP acted as legal counsel to Jazwares. Terms of the deal were not disclosed.
LeapFrog Announces Q1 Results; Acquires Kid-Safe Internet Browser KidZui
LeapFrog Enterprises, Inc., announced financial results for the first fiscal quarter ended June 30, 2014. In May, LeapFrog announced a fiscal year-end change from December 31 to March 31 in order to simplify business processes. As a result, the quarter ended June 30, 2014, is the first quarter of the new fiscal year ending March 31, 2015.
Here are the highlights of financial results for the quarter ended June 30, 2014, compared to the quarter ended June 30, 2013.
• Consolidated net sales were $47 million, down 43 percent. U.S. segment net sales were down 47 percent, and international segment net sales were down 34 percent.
• Net loss per basic and diluted share was $0.23, compared to a net loss per basic and diluted share of $0.05 a year ago.
• Cash and cash equivalents were $199.2 million as of June 30, 2014, up 10 percent compared to $181.4 million as of June 30, 2013.
“Our business so far this year has been significantly hindered by retail inventory carry-forward from holiday 2013, tough conditions in most of our key markets, and the planned later launch of our major new product introductions for the year,” said John Barbour, CEO. “While these difficulties have caused our financial performance to decline substantially during our seasonally slow quarters, we are making good progress on our growth initiatives, which should position us well for a strong holiday season, expansion into new major entertainment categories and profitable long-term growth.”
LeapFrog is introducing a number of key new products for this holiday season. In September, the company will introduce LeapBand, which is the first wearable activity tracker created for children that encourages active play and healthy habits while nurturing a personalized virtual pet.
In October, it will launch LeapTV, an educational, active video game console system for younger children that by year-end will offer more than 100 pieces of content, with games designed to get kids’ minds and bodies moving.
In addition, LeapFrog is launching two new versions of its LeapPad children’s tablets, the LeapPad3 and LeapPad Ultra XDi. It will also add more than 370 new pieces of content this year to its multimedia library.
Financial Overview for Q1 ended June 30, 2014, compared to quarter end June 30, 2013:
LeapFrog previously announced a fiscal year-end change from December 31 to March 31 in order to simplify business processes. As a result, the quarter ended June 30, 2014, is the first quarter of the new fiscal year ending March 31, 2015.
First fiscal quarter net sales were $47 million, down 43 percent compared to $83 million last year, and were not materially impacted by changes in currency exchange rates. In the U.S. segment, net sales were $30.7 million, down 47 percent compared to $58.4 million last year. In the international segment, net sales were $16.3 million, down 34 percent compared to $24.6 million last year, and were not materially impacted by changes in currency exchange rates.
Net sales for the first fiscal quarter were negatively impacted by high inventory levels at retail entering the fiscal year that were carried over from the 2013 holiday season, which drove retailers to discount products, cut replenishment orders, and required higher trade allowances, partially offset by the calendar shift of Easter. Net sales also faced an exceptionally tough sales comparison from last year’s exceptional June quarter sales performance, which was driven by new product introductions that will not occur until the September and December quarters of this year. In addition, net sales in the prior year were driven by high post-season demand for LeapPad tablets and content in spring 2013, following an exceptional holiday 2012.
Loss from operations for the first fiscal quarter was $25.7 million, compared to a loss from operations of $4.1 million last year.
Net loss for the first fiscal quarter was $16.4 million, compared to a net loss of $3.3 million last year. Net loss per basic and diluted share was $0.23, compared to a net loss per basic and diluted share of $0.05 last year.
Adjusted EBITDA (non-GAAP) for the first fiscal quarter was a loss of $16.2 million, compared to a gain of $3.4 million last year.
For the full fiscal year ending March 31, 2015, LeapFrog expects:
• Net sales to be in the range of $480 million to $505 million compared to $528 million for the 12-month period ended March 31, 2014.
• Net income (loss) per basic and diluted share to be in the range of a loss per share of $0.04 to an income per share of $0.10. For the 12-month period ended March 31, 2014, net income per diluted share (GAAP) was $1.07 and normalized net income per diluted share (non-GAAP) was $0.18. LeapFrog is providing normalized net income (loss) measures, which are non-GAAP measures, to help investors review the company’s performance and performance trends excluding discrete tax items, which have historically been significant.
• Capital expenditures to be in the range of $30 million to $40 million as it makes long-term, strategic investments in the business, particularly in information technology systems. Capital expenditures include purchases of property and equipment and capitalization of product costs.
For the second fiscal quarter ending September 30, 2014, LeapFrog expects:
• Net sales to be in the range of $125 million to $130 million.
• Net income (loss) per diluted share to be in the range of a loss per share of $0.03 to an income per share of $0.01.
In a separate announcement, LeapFrog says that it has acquired KidZui, the kid-friendly internet browser. Created in 2006, the KidZui technology offers a kid-safe web experience and currently powers LeapSearch on all LeapFrog Wi-Fi enabled children’s tablets, including the new LeapPad3 and LeapPad Ultra XDi.
“When we introduced LeapSearch on our Wi-Fi-enabled LeapPad tablets, we created an incredibly safe, innovative web experience for children,” said Greg Ahearn, CMO at LeapFrog, in a statement. “It is surprising how many parents let their young children play with tablets with minimal or no internet or email protection. LeapSearch protects children from inappropriate content and protects families from malware and identity theft.”
LeapSearch is a browsing tool that allows kids, including those who are not yet reading, to explore web content in an easy and safe way by categorizing content based on age and topic. Children can explore their interests through videos, pictures, and other web-based kid-appropriate content, all reviewed and approved by LeapFrog’s full-time in-house team.
TTPM Launches TTPMBaby
TTPM (that’s us) launched a new, separate section of its consumer review website targeting expectant and new parents called TTPMBaby. The site will feature trending items, blog posts, gift ideas under $100, and expert reviews of the latest in all types of baby gear including car seats, strollers, diaper bags, feeding and bathing products, sleep solutions, and all sorts of other essentials for life with an infant.
Trending on TTPM: Baby
TTPM is showcasing what’s trending in each specific product category. Today it’s Baby. This trending list is determined by consumers. It’s the number of page views for that item in the previous 30 days and is updated every 24 hours.