LeapFrog 2003 Annual Report Download - page 40

U.S. Consumer. Our U.S. Consumer segment comprised 86% of total company net sales for the twelve
months ended December 31, 2002 and accounted for 78% of the increase in total company net sales from 2001 to
2002. Platform net sales in our U.S. Consumer segment increased 38%, from $149.9 million in 2001 to $207.1
million in 2002. Platform sales, as a percentage of total U.S. Consumer sales, were 45% and 52% in 2002 and
2001, respectively. The increase in net sales from platform products is primarily due to the successful
introduction of the Quantum Pad platform, the growth in our My First LeapPad and iQuest platforms, and to the
continued success in our LeapPad platform. Software net sales in our U.S. Consumer segment increased 126%,
from $61.8 million in 2001 to $139.6 million in 2002. Software sales, as a percentage of total U.S. Consumer
sales, were 31% and 21% in 2002 and 2001, respectively. The increase in net sales from software products is
primarily due to our LeapPad books, the introduction of Quantum Pad books and the growth in My First LeapPad
books and iQuest cartridges. Net sales of standalone products increased 44%, from $77.4 million in 2001 to
$111.3 million in 2002. Standalone sales, as a percentage of total U.S. Consumer sales, were 24% and 27% in
2002 and 2001, respectively. The increase in net sales from standalone products is primarily due to the
introduction of the LeapStart learning table and the LeapFrog shopping cart.
Net sales of platform, software and standalone products in dollars and as a percentage of total net sales were
as follows:
Sales %ofTotal
Year Ended December 31, Change Year Ended December 31,
2002(1) 2001(1) $(1) %2002 2001
Platform ............................. $207.1 $149.9 $ 57.2 38% 45.2% 51.8%
Software ............................. 139.6 61.8 77.8 126% 30.5% 21.4%
Standalone ........................... 111.3 77.4 33.9 44% 24.3% 26.8%
Net Sales ............................ $458.0 $289.1 $168.9 58% 100.0% 100.0%
(1) In millions.
Education and Training. Our Education and Training segment comprised 4% of total company net sales for
the twelve months ended December 31, 2002 and accounted for 5% of the increase in total company net sales.
We believe the year-over-year 129% increase in net sales for our Education and Training segment was the result
of our larger direct sales force and increased brand offerings and awareness.
International. Our International segment comprised 10% of total company’s net sales in 2002 and accounted
for 17% of the increase in total company net sales from 2001 to 2002. The year-over-year increase of 228% was
primarily due to sales into the United Kingdom, Japan and Canada. Sales into the United Kingdom accounted for
33% of the segment’s increase from 2001 to 2002. This increase is primarily due to strong advertising and
marketing campaigns and larger shelf space in the major toy retailers. Our sales into Japan accounted for 31% of
the segment’s increase in net sales. This increase was primarily the result of our strategic relationships with
Benesse Corporation and Sega Toys that commenced in January 2002. Our sales into Canada represented 23% of
the segment’s increase in net sales. The increase in net sales into Canada was primarily due to our transition from
an outside distributor to an internally controlled supply and distribution operation.
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