LeapFrog 2003 Annual Report Download - page 81
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LEAPFROG ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share and percent data)
7. Intangible Assets
December 31,
2003 2002
Trademarks, patents and other intangibles ...................... $ 8,058 $ 5,058
Less accumulated amortization ............................... (2,559) (1,415)
5,499 3,643
Goodwill ................................................ 19,549 19,549
Intangible assets, net ................................... $25,048 $23,192
The Company adopted SFAS 142 on January 1, 2002. The Company ceased amortizing goodwill and other
indefinite-lived intangible assets on January 1, 2002. The amortization expense and adjusted net income for the
three years ended December 31, 2003 is as follows:
Year Ended December 31,
2003 2002 2001
Net income as reported ............................ $72,675 $43,444 $ 9,669
Add back amortization, net of tax ................... — — 502
Adjusted net income .............................. $72,675 $43,444 $10,171
Adjusted net income per common share—basic ........ $ 1.27 $ 1.09 $ 0.30
Adjusted net income per common share—diluted ....... $ 1.20 $ 0.86 $ 0.26
Amortization expense related to other intangible assets was $1,144, $630 and $260 for the years ended
December 31, 2003, 2002, and 2001, respectively. The estimated future amortization expense related to these
intangible assets is as follows:
Year Ended December 31,
2004 .............................................................. $1,244
2005 .............................................................. 1,091
2006 .............................................................. 1,034
2007 .............................................................. 817
2008 .............................................................. 317
Thereafter .......................................................... 996
$5,499
8. Investments in Affiliate and Related Parties
In 2000, the Company entered into a partnership agreement with an employee of the Company for the
purchase of real estate to be used as the executive’s primary residence. Under the terms of the agreement, the
Company invested $200, and in exchange was entitled to participate in any potential gains and losses attributable
to the property. In September 2003, the Company transferred 100% of its interest in the partnership to the
employee in exchange for a payment of $181. Accordingly, the Company recorded a loss of $19 in 2003. The
Company has no remaining rights or obligations under the partnership agreement.
F-13
FINANCIALS