TORONTO -- Spin Master Corp. (TOY.TO) says its net income fell nearly 14 per cent in the first quarter due in part to the impact of a multi-million dollar Toys 'R' Us bad debt expense.

The company, which keeps its books in U.S. dollars, says its net income was $8.7 million or nine cents per share for the first quarter of its 2018 financial year, compared to $10.1 million or 10 cents per share for the same quarter the previous year.

The toy company says it incurred a $15.2 million bad debt expense, including administration costs, after Toys 'R' Us Inc. sought approval to wind down its American business and liquidate inventory, and Toys 'R' Us International closed and liquidated most of its U.K. business in the quarter.

Adjusted net income was $22 million or 22 cents a share for the quarter, compared to $13.6 million or 13 cents a share for the same quarter the previous year.

Co-CEO Ronnen Harary says in a statement the company's results are a testament to the team's effort in effectively managing the company through the industry-wide disruption caused by the Toys 'R' Us U.S. liquidation.
Spin Master says revenue for the quarter ended March 31, 2018 increased 25.5 per cent to $285.7 million from $227.7 million.

The company also updated its outlook for the 2018 financial year, saying it now expects organic gross product sales to grow in the mid-single digit range from the previous year rather than the mid- to high-single digit range.