LeapFrog 2004 Annual Report Download - page 4

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Strengthen Our Infrastructure and Business Processes. Fixing the operational troubles we have experienced, especially
in our supply chain, is a top priority. In response, we have hired a new head of supply chain and operations to improve
our manufacturing and distribution planning and execution.
In addition, we are installing new planning processes, collaborative team management practices, performance manage-
ment tools, improved forecasting, and stronger human resource management practices.
Each of the above requires a much better use of information systems, and therefore we have recently hired a new
Chief Information Offi cer to help re-engineer and improve our IT systems performance. We have also hired a new
Chief Financial Offi cer to further strengthen our business processes and fi nancial discipline.
Generate Growth. We are a company with the good fortune of having an abundance of exciting growth opportunities.
For example:
• We are developing new technology platforms for 2005 and beyond that will be successful in the
markets at profi t margins that are greater than our current margins.
• Internationally, we will focus on the markets in which we have been able to build our brand,
and further penetrate these consumer markets with high margin products.
• Our SchoolHouse division continues to be a very strong emerging business for us, and we
expect to continue to invest in the business through organic growth and, where appropriate,
through strategic transactions.
• We are excited about the upcoming launch of our new Fly pentop computer, which targets the
important “tween” (i.e., middle school) age group. This is a segment of the consumer market
that we have not focused on in the past.
• Also in Fall 2005, we are extending the product line for our Leapster system, our latest technology
platform, by launching the Leapster L-MAX system, which allows a child to have both a portable
as well as a connected-to-TV educational experience. It is our fi rst entry into television-based
entertainment and education platforms.
In summary, as a ten-year old company, we are pleased with the progress we have made. In a relatively short period
of time, we have created one of the world’s leading education brands, with a reach that extends into home and
school, in the United States and around the world. We have accomplished this by having a relentless focus on our
core mission and values.
2004 was a diffi cult year. Nonetheless, we understand what we need to do to turn things around, and we are taking
aggressive actions this year. All of our resources are directed toward a very specifi c set of actions that will restore
profi tability, improve our internal capabilities and build exciting growth educational product.
We look forward to 2005 and sharing our progress with you.
Respectfully,
Tom Kalinske Steven Fink
Chief Executive Offi cer Chairman of the Board