LeapFrog 2004 Annual Report Download - page 85

LEAPFROG ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31,
2004 2003 2002
Net income/(loss) ..................................................................... $ (6,528) $ 72,675 $ 43,444
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation ..................................................................... 16,186 15,481 11,274
Amortization .................................................................... 1,872 1,144 630
Unrealized foreign exchange gain .................................................... (5,029) — —
Loss on disposal of property and equipment ............................................ 141 21 176
Loss on sale of investment with related party ........................................... — 19 —
Provision for doubtful accounts ...................................................... 3,225 742 (187)
Deferred income taxes ............................................................. (19,252) 5,177 (11,263)
Deferred rent .................................................................... 727 22 305
Deferred revenue ................................................................. (1,053) (1,589) 756
Amortization of deferred compensation ............................................... 1,691 2,203 1,752
Conversion of stock appreciation rights to non-statutory stock options ....................... — — 1,341
Stock option compensation related to nonemployees and non recourse notes receivable .......... 426 1,093 349
Tax benefit from exercise of stock options and other ..................................... 9,179 39,130 4,908
Amortization of investment premium ................................................. 192 142 —
Other changes in operating assets and liabilities:
Accounts receivable ............................................................... 52,445 (112,864) (53,984)
Inventories ...................................................................... (38,488) (6,437) (38,357)
Prepaid expenses and other current assets .............................................. (3,172) (4,305) (2,007)
Notes receivable due from related parties .............................................. — 595 94
Other assets ..................................................................... 801 (764) (136)
Accounts payable ................................................................. (23,667) 27,317 24,433
Accrued liabilities ................................................................ 8,736 4,101 26,744
Income taxes payable .............................................................. 1,668 (17,103) 12,198
Net cash provided by operating activities .............................................. 100 26,800 22,470
Investing activities:
Purchases of property and equipment ................................................. (20,546) (15,810) (14,832)
Purchase of intangible assets ........................................................ (6,320) (3,000) (250)
Purchases of short-term investments .................................................. (260,467) (171,051) (9,900)
Sale of short-term investments ....................................................... 287,216 113,525 —
Sale of investment in related party .................................................... — 181 —
Net cash used in investing activities .................................................. (117) (76,155) (24,982)
Financing activities:
Borrowings under credit agreement ................................................... — — 182,000
Repayments under credit agreement .................................................. — — (243,163)
Proceeds from the payment of notes receivable from stockholders ........................... — 2,624 1,741
Proceeds from the issuance of common stock ........................................... — — 115,116
Proceeds from the exercise of stock options and employee stock purchase plan ................ 13,016 27,960 1,822
Net cash provided by financing activities .............................................. 13,016 30,584 57,516
Effect of exchange rate changes on cash ............................................... 2,241 663 154
Increase (decrease) in cash and cash equivalents ......................................... 15,240 (18,108) 55,158
Cash and cash equivalents at beginning of period ............................................ 45,319 63,427 8,269
Cash and cash equivalents at end of period ................................................. $ 60,559 $ 45,319 $ 63,427
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Income taxes .................................................................... $ 2,111 $ 15,716 $ 23,476
Interest ......................................................................... $ — $ — $ 1,163
Noncash investing and financing activities:
Issuance of restricted stock to employees .............................................. $ 1,523 $ — $ —
Amount payable related to technology license .......................................... $ 1,000 $ — $ —
Common stock issued in exchange for notes receivable ................................... $ — $ — $ 292
Issuance of warrant for services rendered and previously accrued ........................... $ — $ — $ 142
Issuance of stock options related to conversion of stock appreciation rights ................... $ — $ — $ 1,041
Issuance of Class A common stock related to conversion of redeemable convertible
Series A preferred stock ............................................................ $ — $ — $ 24,139
See accompanying notes.
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