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LeapFrog Reports Second Quarter 2012 Net Sales Increased 31%
Bottom Line Results Improved by $0.09 Per Share
Raises Full Year 2012 Guidance
EMERYVILLE, Calif., Aug. 1, 2012 /PRNewswire/ -- LeapFrog Enterprises, Inc. (NYSE:LF) today announced financial results for the second quarter ended June 30, 2012.
(Logo: http://photos.prnewswire.com/prnh/20090219/LFLOGO)
Highlights of second quarter 2012 results compared to second quarter 2011 results:
-- Consolidated net sales were $71 million, up 31%.
-- Gross margin was 39.9%, up 500 basis points.
-- Net loss per share was $0.12, an improvement of $0.09.
-- Cash and cash equivalents were $127 million as of June 30, 2012, an
increase of $69 million compared to the balance as of June 30, 2011.
Highlights of six month 2012 results compared to six month 2011 results:
-- Consolidated net sales were $143 million, up 52%.
-- Gross margin was 40.6%, up 790 basis points.
-- Net loss per share was $0.26, an improvement of $0.29.
"We delivered terrific second quarter results, driven by the strong demand for LeapPad1 and its content," said John Barbour, Chief Executive Officer. "LeapPad1 continues to be the best-selling children's learning tablet in the USA, UK and Canada.
"This summer, we launched a new significantly enhanced LeapPad, the LeapPad2, plus the next generation of educational video gaming systems, the LeapsterGS. We are excited about the initial response to these two exciting new platforms - both will start shipping in early August.
"In addition, we have an extensive content library of hundreds of fun educational games, videos, apps, music and books all curated by our team of learning experts and available in cartridge or by digital download."
Financial Overview for the Second Quarter 2012 Compared to the Second Quarter 2011
Second quarter 2012 net sales were $71 million, up 31% compared to $54 million last year, and included a 1% negative impact from changes in currency exchange rates. Net sales growth was primarily driven by continued high consumer demand for LeapPad and strong content sales. Second quarter 2012 net sales increased 26% in the U.S. segment and increased 46% in the international segment, with international segment net sales including a 5% negative impact from changes in currency exchange rates. Gross profit was $29 million for the quarter, up 50% from a year ago. Gross margin was 39.9% for the second quarter 2012, up 500 basis points compared to a year ago. Loss from operations was $7 million for the second quarter 2012, an improvement of $6 million, or 43%, compared to a year ago.
"We are executing against our stated goal of growing our earnings and delivering strong cash flow through disciplined growth and diligent cost control," said Mark Etnyre, departing Chief Financial Officer. "As a result, we have grown our sales by 52%, improved our bottom line by $0.29 per share and increased our operating cash flow by $13 million during the first six months of this year compared to a year ago. With our award-winning educational entertainment portfolio, strong team, and commitment to innovation in technology, education, and content, we are well positioned to deliver earnings and cash flow growth in 2012 and beyond."
Guidance
"Given the strength of our second quarter results and improved visibility to the second half of the year, we are raising our full year 2012 guidance," continued Mr. Etnyre. "Our guidance is based on our best view as of today, but keep in mind that our full year 2012 results will be highly dependent on the economy and consumer sales during the all-important holiday season."
For the full year 2012, we now expect:
-- Net sales to increase by 13% to 15% compared to 2011.
-- Net income per diluted share to be in the range of $0.61 to $0.66
compared to $0.30 in 2011.
For the third quarter of 2012, we expect:
-- Net sales to increase by 10% to 15% compared to the third quarter of
2011.
-- Net income per share to be in the range of $0.36 to $0.41 compared to
$0.35 in the third quarter of 2011.
Conference Call and Webcast
LeapFrog will hold a conference call to discuss second quarter 2012 financial results on August 1, 2012, at 2:00 p.m. Pacific Daylight Time (5:00 p.m. Eastern Daylight Time). The conference call will be webcast and can be accessed at LeapFrog's investor web site at http://www.leapfroginvestor.com. To participate in the call, please dial (706) 634-0183 and request conference ID 13404560. A replay of the call will be available for one month. To access the replay, please dial (404) 537-3406 and use conference ID 13404560.
About LeapFrog
LeapFrog Enterprises, Inc. is the leader in educational entertainment for children. LeapFrog's award-winning product portfolio helps millions of children achieve their potential by delivering best-in-class curriculum through engaging content, fun multimedia learning platforms, and toys. The Learning Path, LeapFrog's proprietary online destination for parents and extended family, provides personalized feedback on a child's learning progress and offers recommendations to enhance each child's learning experience. Through the power of play, LeapFrog's products and curriculum help children of all ages prepare for school and life success. LeapFrog's products are available in more than 45 countries and have been used by teachers in more than 100,000 U.S. classrooms. LeapFrog is based in Emeryville, California and was founded in 1995 by a father who revolutionized technology-based learning solutions to help his child learn how to read. Come see the learning at leapfrog.com.
TM & © 2012 LeapFrog Enterprises, Inc. All rights reserved.
Forward-Looking Statements
This news release contains forward-looking statements that involve risks and uncertainties, including statements regarding anticipated financial results. Our actual results may differ materially from those expressed or implied by such forward-looking statements. The risks that could cause our results to differ include, without limitation, deterioration of global economic conditions, our ability to correctly predict highly changeable consumer preferences and product trends, our ability to continue to develop new products and services, our reliance on a small group of retailers for the majority of our gross sales, our dependence on our suppliers for our components and raw materials, the seasonality of our business, our growing focus on online products and services, system failures in our online services or web store, our reliance on a limited number of manufacturers, our ability to maintain sufficient inventory levels, our ability to compete effectively with competitors, our ability to maintain or acquire licenses, third parties who claim we are infringing on their intellectual property rights, errors or defects in our products, privacy concerns about our Internet-connected products, the sufficiency of our liquidity, the risk associated with international operations, continued compliance and associated costs with and/or changes in laws and regulations, negative political developments, natural disasters, armed hostilities, terrorism, labor strikes or public health issues, the loss of members of our executive management team, continued ownership by a few stockholders of a majority of voting power in us, and the volatility of our stock price. These risks and others are discussed under "Risk Factors" in our filings with the U.S. Securities and Exchange Commission, including our 2011 annual report on Form 10-K filed on February 29, 2012. All information provided in this release is as of the date hereof, and we undertake no obligation to update this information.
Contact Information
Investors: Media:
Karen Sansot, CFA Monica Ma
Investor Relations Media Relations
(510) 420-4803 (510) 596-3437
ksansot@leapfrog.com mma@leapfrog.com
LEAPFROG ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended June
June 30, 30,
------------------- ----------------------
2012 2011 2012 2011
---- ---- ---- ----
Net sales $71,480 $54,420 $143,490 $94,098
Cost of sales 42,925 35,438 85,203 63,360
Gross profit 28,555 18,982 58,287 30,738
Operating expenses:
Selling, general
and
administrative 20,204 17,650 43,901 38,137
Research and
development 8,849 8,141 17,738 16,372
Advertising 4,339 3,492 6,753 5,827
Depreciation and
amortization 2,633 2,791 5,913 5,344
Total operating
expenses 36,025 32,074 74,305 65,680
Loss from operations (7,470) (13,092) (16,018) (34,942)
Other income (expense):
Interest income 96 36 189 69
Interest expense - (44) - (80)
Other, net (449) (283) (1,116) (843)
Total other
income
(expense), net (353) (291) (927) (854)
Loss before income taxes (7,823) (13,383) (16,945) (35,796)
Provision for income taxes 287 387 622 160
Net loss $(8,110) $(13,770) $(17,567) $(35,956)
======= ======== ======== ========
Net loss per share:
Class A and B -
basic $(0.12) $(0.21) $(0.26) $(0.55)
Weighted average shares used to calculate net loss per
share:
Class A and B -
basic 66,928 65,293 66,662 65,027
LEAPFROG ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
June 30, December 31,
-------- ------------
2012 2011 2011
---- ---- ----
ASSETS
Current assets:
Cash and cash equivalents $126,926 $57,733 $71,863
Accounts receivable, net of
allowances for doubtful accounts of
$3,891, $840 and $659, respectively 51,360 48,964 157,418
Inventories 52,650 63,398 34,288
Prepaid expenses and other current
assets 9,325 9,266 8,078
Deferred income taxes 978 1,771 983
Total current assets 241,239 181,132 272,630
Long-term investments - 2,681 2,681
Deferred income taxes 1,281 980 1,311
Property and equipment, net 19,437 18,184 17,881
Capitalized product costs, net 11,319 13,253 12,511
Goodwill 19,549 19,549 19,549
Other intangible assets, net 2,150 4,589 3,350
Other assets 1,591 2,023 1,119
Total assets $296,566 $242,391 $331,032
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $32,200 $28,127 $34,629
Accrued liabilities 31,476 23,527 50,380
Income taxes payable 379 229 377
Total current liabilities 64,055 51,883 85,386
Long-term deferred income
taxes 3,713 3,394 3,542
Other long-term liabilities 8,988 12,013 9,360
Stockholders' equity:
Class A Common Stock, par value
$0.0001;
Authorized -139,500 shares; Issued
and 6 5 6
outstanding: 58,230, 49,758 and
54,923 , respectively
Class B Common Stock, par value
$0.0001;
Authorized -40,500 shares; Issued
and 1 2 1
outstanding: 8,953, 15,817 and
11,113, respectively
Treasury stock (185) (185) (185)
Additional paid-in capital 400,193 391,592 395,627
Accumulated other comprehensive
income (158) 2,025 (225)
Accumulated deficit (180,047) (218,338) (162,480)
Total stockholders' equity 219,810 175,101 232,744
Total liabilities and stockholders'
equity $296,566 $242,391 $331,032
LEAPFROG ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended June Six Months Ended June
30, 30,
------------------------ ----------------------
2012 2011 2012 2011
---- ---- ---- ----
Operating activities:
Net loss $(8,110) $(13,770) $(17,567) $(35,956)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities:
Depreciation
and
amortization 5,133 4,921 11,122 9,447
Deferred
income taxes 203 58 212 111
Stock-based
compensation
expense 1,567 1,196 3,039 2,424
Loss on sale
of long-term
investments,
net of tax - - 91 -
Loss on
disposal of
long-term
assets - - 2 53
Allowance for
doubtful
accounts (87) (132) 3,252 279
Other changes in operating assets and
liabilities:
Accounts
receivable,
net 5,742 (11,053) 102,842 108,835
Inventories (14,166) (8,384) (18,293) (15,191)
Prepaid
expenses and
other current
assets (114) 1,750 (1,234) (821)
Other assets (514) 152 (472) (236)
Accounts
payable 4,248 5,995 (2,435) (3,312)
Accrued
liabilities 1,380 2,120 (18,922) (18,100)
Other long-
term
liabilities (47) 312 (372) 388
Income taxes
payable 43 184 2 62
Net cash (used in) provided
by operating activities (4,722) (16,651) 61,267 47,983
------ ------- ------ ------
Investing activities:
Purchases of
property and
equipment (3,672) (2,662) (6,392) (7,284)
Capitalization
of product
costs (2,030) (2,171) (3,892) (4,340)
Sale of
investments 2,500 - 2,500 -
Other - - - 2
Net cash used in investing
activities (3,202) (4,833) (7,784) (11,622)
------ ------ ------ -------
Financing activities:
Proceeds from
stock option
exercises and
employee
stock
purchase
plans 1,074 1,682 2,739 1,944
Net cash paid
for payroll
taxes on
restricted
stock unit
releases (510) (74) (1,212) (610)
Net cash provided by
financing activities 564 1,608 1,527 1,334
--- ----- ----- -----
Effect of exchange rate changes on cash (470) 115 53 559
Net change in cash and cash equivalents (7,830) (19,761) 55,063 38,254
Cash and cash equivalents, beginning of
period 134,756 77,494 71,863 19,479
Cash and cash equivalents, end of period $126,926 $57,733 $126,926 $57,733
======== ======= ======== =======
LEAPFROG ENTERPRISES, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands)
(Unaudited)
Three Months Ended June 30, Six Months Ended June
30,
--------------------------- ----------------------
2012 2011 2012 2011
---- ---- ---- ----
Net sales $71,480 $54,420 $143,490 $94,098
Cost of sales (1) 42,925 35,438 85,203 63,360
Gross profit 28,555 18,982 58,287 30,738
Operating expenses: (2) (3)
Selling, general
and
administrative 20,204 17,650 43,901 38,137
Research and
development 8,849 8,141 17,738 16,372
Advertising 4,339 3,492 6,753 5,827
Depreciation and
amortization 2,633 2,791 5,913 5,344
Total operating
expenses 36,025 32,074 74,305 65,680
Loss from operations (7,470) (13,092) (16,018) (34,942)
Other income (expense):
Interest income 96 36 189 69
Interest expense - (44) - (80)
Other, net (449) (283) (1,116) (843)
Total other
income
(expense), net (353) (291) (927) (854)
Loss before income taxes (7,823) (13,383) (16,945) (35,796)
Provision for income taxes 287 387 622 160
Net loss $(8,110) $(13,770) $(17,567) $(35,956)
======= ======== ======== ========
(1) Includes
depreciation and
amortization 2,500 2,130 5,209 4,103
(2) Includes stock-
based
compensation as
follows:
Selling, general
and
administrative 1,335 1,016 2,644 2,120
Research and
development 232 180 395 304
(3) Includes severance
costs as follows:
Selling, general
and
administrative 78 55 260 2,421
Research and
development - 18 - 22
Segment data:
Net sales:
U.S. segment 49,141 39,123 101,359 65,475
International
segment 22,339 15,297 42,131 28,623
Income (loss) from operations*:
U.S. segment (11,021) (14,442) (22,722) (35,716)
International
segment 3,551 1,350 6,704 774
Certain corporate-level operating expenses associated with sales and
marketing, product support, human resources, legal, finance, information
technology, corporate development, procurement activities, research and
development, legal settlements and other corporate costs are charged
entirely to our U.S. segment, rather than being allocated between the U.S.
* and International segments.
SOURCE LeapFrog Enterprises, Inc.
Photo:http://photos.prnewswire.com/prnh/20090219/LFLOGO
http://photoarchive.ap.org/
LeapFrog Enterprises, Inc.
Web Site: http://www.leapfroginvestor.com
LeapFrog Reports Second Quarter 2012 Net Sales Increased 31%
Bottom Line Results Improved by $0.09 Per Share
Raises Full Year 2012 Guidance
EMERYVILLE, Calif., Aug. 1, 2012 /PRNewswire/ -- LeapFrog Enterprises, Inc. (NYSE:LF) today announced financial results for the second quarter ended June 30, 2012.
(Logo: http://photos.prnewswire.com/prnh/20090219/LFLOGO)
Highlights of second quarter 2012 results compared to second quarter 2011 results:
-- Consolidated net sales were $71 million, up 31%.
-- Gross margin was 39.9%, up 500 basis points.
-- Net loss per share was $0.12, an improvement of $0.09.
-- Cash and cash equivalents were $127 million as of June 30, 2012, an
increase of $69 million compared to the balance as of June 30, 2011.
Highlights of six month 2012 results compared to six month 2011 results:
-- Consolidated net sales were $143 million, up 52%.
-- Gross margin was 40.6%, up 790 basis points.
-- Net loss per share was $0.26, an improvement of $0.29.
"We delivered terrific second quarter results, driven by the strong demand for LeapPad1 and its content," said John Barbour, Chief Executive Officer. "LeapPad1 continues to be the best-selling children's learning tablet in the USA, UK and Canada.
"This summer, we launched a new significantly enhanced LeapPad, the LeapPad2, plus the next generation of educational video gaming systems, the LeapsterGS. We are excited about the initial response to these two exciting new platforms - both will start shipping in early August.
"In addition, we have an extensive content library of hundreds of fun educational games, videos, apps, music and books all curated by our team of learning experts and available in cartridge or by digital download."
Financial Overview for the Second Quarter 2012 Compared to the Second Quarter 2011
Second quarter 2012 net sales were $71 million, up 31% compared to $54 million last year, and included a 1% negative impact from changes in currency exchange rates. Net sales growth was primarily driven by continued high consumer demand for LeapPad and strong content sales. Second quarter 2012 net sales increased 26% in the U.S. segment and increased 46% in the international segment, with international segment net sales including a 5% negative impact from changes in currency exchange rates. Gross profit was $29 million for the quarter, up 50% from a year ago. Gross margin was 39.9% for the second quarter 2012, up 500 basis points compared to a year ago. Loss from operations was $7 million for the second quarter 2012, an improvement of $6 million, or 43%, compared to a year ago.
"We are executing against our stated goal of growing our earnings and delivering strong cash flow through disciplined growth and diligent cost control," said Mark Etnyre, departing Chief Financial Officer. "As a result, we have grown our sales by 52%, improved our bottom line by $0.29 per share and increased our operating cash flow by $13 million during the first six months of this year compared to a year ago. With our award-winning educational entertainment portfolio, strong team, and commitment to innovation in technology, education, and content, we are well positioned to deliver earnings and cash flow growth in 2012 and beyond."
Guidance
"Given the strength of our second quarter results and improved visibility to the second half of the year, we are raising our full year 2012 guidance," continued Mr. Etnyre. "Our guidance is based on our best view as of today, but keep in mind that our full year 2012 results will be highly dependent on the economy and consumer sales during the all-important holiday season."
For the full year 2012, we now expect:
-- Net sales to increase by 13% to 15% compared to 2011.
-- Net income per diluted share to be in the range of $0.61 to $0.66
compared to $0.30 in 2011.
For the third quarter of 2012, we expect:
-- Net sales to increase by 10% to 15% compared to the third quarter of
2011.
-- Net income per share to be in the range of $0.36 to $0.41 compared to
$0.35 in the third quarter of 2011.
Conference Call and Webcast
LeapFrog will hold a conference call to discuss second quarter 2012 financial results on August 1, 2012, at 2:00 p.m. Pacific Daylight Time (5:00 p.m. Eastern Daylight Time). The conference call will be webcast and can be accessed at LeapFrog's investor web site at http://www.leapfroginvestor.com. To participate in the call, please dial (706) 634-0183 and request conference ID 13404560. A replay of the call will be available for one month. To access the replay, please dial (404) 537-3406 and use conference ID 13404560.
About LeapFrog
LeapFrog Enterprises, Inc. is the leader in educational entertainment for children. LeapFrog's award-winning product portfolio helps millions of children achieve their potential by delivering best-in-class curriculum through engaging content, fun multimedia learning platforms, and toys. The Learning Path, LeapFrog's proprietary online destination for parents and extended family, provides personalized feedback on a child's learning progress and offers recommendations to enhance each child's learning experience. Through the power of play, LeapFrog's products and curriculum help children of all ages prepare for school and life success. LeapFrog's products are available in more than 45 countries and have been used by teachers in more than 100,000 U.S. classrooms. LeapFrog is based in Emeryville, California and was founded in 1995 by a father who revolutionized technology-based learning solutions to help his child learn how to read. Come see the learning at leapfrog.com.
TM & © 2012 LeapFrog Enterprises, Inc. All rights reserved.
Forward-Looking Statements
This news release contains forward-looking statements that involve risks and uncertainties, including statements regarding anticipated financial results. Our actual results may differ materially from those expressed or implied by such forward-looking statements. The risks that could cause our results to differ include, without limitation, deterioration of global economic conditions, our ability to correctly predict highly changeable consumer preferences and product trends, our ability to continue to develop new products and services, our reliance on a small group of retailers for the majority of our gross sales, our dependence on our suppliers for our components and raw materials, the seasonality of our business, our growing focus on online products and services, system failures in our online services or web store, our reliance on a limited number of manufacturers, our ability to maintain sufficient inventory levels, our ability to compete effectively with competitors, our ability to maintain or acquire licenses, third parties who claim we are infringing on their intellectual property rights, errors or defects in our products, privacy concerns about our Internet-connected products, the sufficiency of our liquidity, the risk associated with international operations, continued compliance and associated costs with and/or changes in laws and regulations, negative political developments, natural disasters, armed hostilities, terrorism, labor strikes or public health issues, the loss of members of our executive management team, continued ownership by a few stockholders of a majority of voting power in us, and the volatility of our stock price. These risks and others are discussed under "Risk Factors" in our filings with the U.S. Securities and Exchange Commission, including our 2011 annual report on Form 10-K filed on February 29, 2012. All information provided in this release is as of the date hereof, and we undertake no obligation to update this information.
Contact Information
Investors: Media:
Karen Sansot, CFA Monica Ma
Investor Relations Media Relations
(510) 420-4803 (510) 596-3437
ksansot@leapfrog.com mma@leapfrog.com
LEAPFROG ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended June
June 30, 30,
------------------- ----------------------
2012 2011 2012 2011
---- ---- ---- ----
Net sales $71,480 $54,420 $143,490 $94,098
Cost of sales 42,925 35,438 85,203 63,360
Gross profit 28,555 18,982 58,287 30,738
Operating expenses:
Selling, general
and
administrative 20,204 17,650 43,901 38,137
Research and
development 8,849 8,141 17,738 16,372
Advertising 4,339 3,492 6,753 5,827
Depreciation and
amortization 2,633 2,791 5,913 5,344
Total operating
expenses 36,025 32,074 74,305 65,680
Loss from operations (7,470) (13,092) (16,018) (34,942)
Other income (expense):
Interest income 96 36 189 69
Interest expense - (44) - (80)
Other, net (449) (283) (1,116) (843)
Total other
income
(expense), net (353) (291) (927) (854)
Loss before income taxes (7,823) (13,383) (16,945) (35,796)
Provision for income taxes 287 387 622 160
Net loss $(8,110) $(13,770) $(17,567) $(35,956)
======= ======== ======== ========
Net loss per share:
Class A and B -
basic $(0.12) $(0.21) $(0.26) $(0.55)
Weighted average shares used to calculate net loss per
share:
Class A and B -
basic 66,928 65,293 66,662 65,027
LEAPFROG ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
June 30, December 31,
-------- ------------
2012 2011 2011
---- ---- ----
ASSETS
Current assets:
Cash and cash equivalents $126,926 $57,733 $71,863
Accounts receivable, net of
allowances for doubtful accounts of
$3,891, $840 and $659, respectively 51,360 48,964 157,418
Inventories 52,650 63,398 34,288
Prepaid expenses and other current
assets 9,325 9,266 8,078
Deferred income taxes 978 1,771 983
Total current assets 241,239 181,132 272,630
Long-term investments - 2,681 2,681
Deferred income taxes 1,281 980 1,311
Property and equipment, net 19,437 18,184 17,881
Capitalized product costs, net 11,319 13,253 12,511
Goodwill 19,549 19,549 19,549
Other intangible assets, net 2,150 4,589 3,350
Other assets 1,591 2,023 1,119
Total assets $296,566 $242,391 $331,032
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $32,200 $28,127 $34,629
Accrued liabilities 31,476 23,527 50,380
Income taxes payable 379 229 377
Total current liabilities 64,055 51,883 85,386
Long-term deferred income
taxes 3,713 3,394 3,542
Other long-term liabilities 8,988 12,013 9,360
Stockholders' equity:
Class A Common Stock, par value
$0.0001;
Authorized -139,500 shares; Issued
and 6 5 6
outstanding: 58,230, 49,758 and
54,923 , respectively
Class B Common Stock, par value
$0.0001;
Authorized -40,500 shares; Issued
and 1 2 1
outstanding: 8,953, 15,817 and
11,113, respectively
Treasury stock (185) (185) (185)
Additional paid-in capital 400,193 391,592 395,627
Accumulated other comprehensive
income (158) 2,025 (225)
Accumulated deficit (180,047) (218,338) (162,480)
Total stockholders' equity 219,810 175,101 232,744
Total liabilities and stockholders'
equity $296,566 $242,391 $331,032
LEAPFROG ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended June Six Months Ended June
30, 30,
------------------------ ----------------------
2012 2011 2012 2011
---- ---- ---- ----
Operating activities:
Net loss $(8,110) $(13,770) $(17,567) $(35,956)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities:
Depreciation
and
amortization 5,133 4,921 11,122 9,447
Deferred
income taxes 203 58 212 111
Stock-based
compensation
expense 1,567 1,196 3,039 2,424
Loss on sale
of long-term
investments,
net of tax - - 91 -
Loss on
disposal of
long-term
assets - - 2 53
Allowance for
doubtful
accounts (87) (132) 3,252 279
Other changes in operating assets and
liabilities:
Accounts
receivable,
net 5,742 (11,053) 102,842 108,835
Inventories (14,166) (8,384) (18,293) (15,191)
Prepaid
expenses and
other current
assets (114) 1,750 (1,234) (821)
Other assets (514) 152 (472) (236)
Accounts
payable 4,248 5,995 (2,435) (3,312)
Accrued
liabilities 1,380 2,120 (18,922) (18,100)
Other long-
term
liabilities (47) 312 (372) 388
Income taxes
payable 43 184 2 62
Net cash (used in) provided
by operating activities (4,722) (16,651) 61,267 47,983
------ ------- ------ ------
Investing activities:
Purchases of
property and
equipment (3,672) (2,662) (6,392) (7,284)
Capitalization
of product
costs (2,030) (2,171) (3,892) (4,340)
Sale of
investments 2,500 - 2,500 -
Other - - - 2
Net cash used in investing
activities (3,202) (4,833) (7,784) (11,622)
------ ------ ------ -------
Financing activities:
Proceeds from
stock option
exercises and
employee
stock
purchase
plans 1,074 1,682 2,739 1,944
Net cash paid
for payroll
taxes on
restricted
stock unit
releases (510) (74) (1,212) (610)
Net cash provided by
financing activities 564 1,608 1,527 1,334
--- ----- ----- -----
Effect of exchange rate changes on cash (470) 115 53 559
Net change in cash and cash equivalents (7,830) (19,761) 55,063 38,254
Cash and cash equivalents, beginning of
period 134,756 77,494 71,863 19,479
Cash and cash equivalents, end of period $126,926 $57,733 $126,926 $57,733
======== ======= ======== =======
LEAPFROG ENTERPRISES, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands)
(Unaudited)
Three Months Ended June 30, Six Months Ended June
30,
--------------------------- ----------------------
2012 2011 2012 2011
---- ---- ---- ----
Net sales $71,480 $54,420 $143,490 $94,098
Cost of sales (1) 42,925 35,438 85,203 63,360
Gross profit 28,555 18,982 58,287 30,738
Operating expenses: (2) (3)
Selling, general
and
administrative 20,204 17,650 43,901 38,137
Research and
development 8,849 8,141 17,738 16,372
Advertising 4,339 3,492 6,753 5,827
Depreciation and
amortization 2,633 2,791 5,913 5,344
Total operating
expenses 36,025 32,074 74,305 65,680
Loss from operations (7,470) (13,092) (16,018) (34,942)
Other income (expense):
Interest income 96 36 189 69
Interest expense - (44) - (80)
Other, net (449) (283) (1,116) (843)
Total other
income
(expense), net (353) (291) (927) (854)
Loss before income taxes (7,823) (13,383) (16,945) (35,796)
Provision for income taxes 287 387 622 160
Net loss $(8,110) $(13,770) $(17,567) $(35,956)
======= ======== ======== ========
(1) Includes
depreciation and
amortization 2,500 2,130 5,209 4,103
(2) Includes stock-
based
compensation as
follows:
Selling, general
and
administrative 1,335 1,016 2,644 2,120
Research and
development 232 180 395 304
(3) Includes severance
costs as follows:
Selling, general
and
administrative 78 55 260 2,421
Research and
development - 18 - 22
Segment data:
Net sales:
U.S. segment 49,141 39,123 101,359 65,475
International
segment 22,339 15,297 42,131 28,623
Income (loss) from operations*:
U.S. segment (11,021) (14,442) (22,722) (35,716)
International
segment 3,551 1,350 6,704 774
Certain corporate-level operating expenses associated with sales and
marketing, product support, human resources, legal, finance, information
technology, corporate development, procurement activities, research and
development, legal settlements and other corporate costs are charged
entirely to our U.S. segment, rather than being allocated between the U.S.
* and International segments.
SOURCE LeapFrog Enterprises, Inc.
Photo:http://photos.prnewswire.com/prnh/20090219/LFLOGO
http://photoarchive.ap.org/
LeapFrog Enterprises, Inc.
Web Site: http://www.leapfroginvestor.com