Videogame peripheral maker Mad Catz Interactive Inc. reported flat earnings for the third quarter and said it planned to restructure, cutting 37 percent of company staff.
Sales of peripherals for the Rock Band 4 game were lower than anticipated, and increased promotional activity cut into margins, said Karen McGinnis, the corporation’s new CEO.
The company announced the restructuring one day after it announced that three key leaders — its chairman, CEO and general counsel — had all agreed to resign. Mad Catz (NYSE: MCZ) reported 65 local employees in November. The Scripps Ranch business said that it would take a pretax restructuring charge of $3 million in the current quarter.
The $65 million in third-quarter sales was the second-highest quarterly sales figure in company history, McGinnis said. However, sales of other products were soft and Rock Band sell-through was lower than originally forecast, resulting in higher inventory balances. The $65 million in sales ultimately cost the company $53.6 million, resulting in $11.4 million of gross profit.
Mad Catz reported net income of $1.2 million or 2 cents per share on third-quarter net sales of $65 million. During the same quarter one year ago, the company had net income of $1.4 million, or 2 cents per share, on net sales of $30.5 million.