LeapFrog 2006 Annual Report Download - page 22

Karen L. Luey has served as our Vice President, Controller and Principal Accounting Officer since
December 2005. Prior to joining us, Ms. Luey served as Vice President Finance and Corporate Controller of
Sharper Image Corporation, a multi-channel specialty retailer of consumer products, from July 2000 to December
2005. From August 1997 to July 2000, Ms. Luey served as Vice President, Controller with Discovery Channel
Retail, the retail division of Discovery Communications, a global media and entertainment company. From 1990
to August 1997, Ms. Luey served in various capacities at Sharper Image Corporation. Ms. Luey received her B.S.
from California State University, Hayward.
Available Information
We are subject to the information requirements of the Securities Exchange Act of 1934, or the Exchange
Act. Therefore, we file periodic reports, proxy statements and other information with the Securities and
Exchange Commission, or SEC. Such reports, proxy statements and other information may be obtained by
visiting the Public Reference Room of the SEC at 100 F Street, NE, Washington, DC 20549 or by calling the
SEC at 1-800-SEC-0330, by sending an electronic message to the SEC at [email protected] or by sending a
fax to the SEC at 1-202-777-1027. In addition, the SEC maintains a website (www.sec.gov) that contains reports,
proxy and information statements, and other information regarding issuers that file electronically.
We make our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K
and all amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act,
available (free of charge) on or through our website located at www.LeapFroginvestor.com, as soon as
reasonably practicable after they are filed with or furnished to the SEC. Information contained on or accessible
through our website is not deemed to be part of this report on Form 10-K.
Item 1A. Risk Factors.
Our business and the results of its operations are subject to many factors, some of which are beyond our
control. The following is a description of some of the risks and uncertainties that may affect our future financial
performance.
Our operating plan may not correct recent trends in our business.
In July 2006, our board of directors appointed Jeffrey G. Katz as our President and Chief Executive Officer.
Under Mr. Katz’s leadership, we commenced and completed a full strategic review of our business. The critical
strategic themes of the plan that resulted from this review are detailed in “Item 1—Business—Overview.”
We may encounter difficulties executing our new business strategy. Among other things, we may not have
sufficient resources to make the necessary investments to develop and implement the technological advances
required to maintain our competitive position in our industry. Therefore, we cannot provide any assurance that
we can successfully implement this strategic plan, or if implemented, that it will appreciably improve sales and
earnings. Failure to execute our operating plan may have an adverse impact on our operating results and financial
condition.
If we fail to predict consumer preferences and trends accurately, develop and introduce new products
rapidly or enhance and extend our existing core products, our sales will suffer.
Sales of our platforms, related software and stand-alone products typically have grown in the periods
following initial introduction, but we expect sales of specific products to decrease as they mature. For example,
net sales of the Classic LeapPad and My First LeapPad platforms in our U.S. Consumer business peaked in 2002
and have been declining since. Therefore, the introduction of new products and the enhancement and extension
of existing products, through the introduction of additional software or by other means, is critical to our future
sales growth. To remain competitive, we must continue to develop new technologies and products and enhance
existing technologies and product lines, as well as successfully integrate third-party technology with our own.
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