LeapFrog 2006 Annual Report Download - page 34

Item 6. Selected Financial Data.
The following selected consolidated financial data for the five years ended December 31, 2006, have been
derived from our audited consolidated financial statements. The following information is qualified by reference
to, and should be read in conjunction with, “Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and the consolidated financial statements and related notes thereto.
For the Year Ended December 31,
2006 2005 2004 2003 2002
(In thousands, except per share data)
Consolidated Statements of Operations Data:
Net sales ..................................... $502,255 $649,757 $640,289 $680,012 $531,772
Gross profit ................................... 147,034 279,636 259,045 340,144 270,041
Income (loss) from operations .................... (124,663) 20,953 (13,983) 109,458 71,351
Net income (loss) .............................. $(145,092) $ 17,500 $ (6,528) $ 72,675 $ 43,444
Net income (loss) per common share:
Basic .................................... $ (2.31) $ 0.28 $ (0.11) $ 1.27 $ 1.09
Diluted ................................... $ (2.31) $ 0.28 $ (0.11) $ 1.20 $ 0.86
Shares used in calculating net income (loss) per share:
Basic .................................... 62,818 61,781 59,976 57,246 39,695
Diluted ................................... 62,818 62,329 59,976 60,548 50,744
December 31,
2006 2005 2004 2003 2002
(In thousands, except per share data)
Consolidated Balance Sheet Data:
Cash, cash equivalents, and short-term investments .... $148,098 $ 72,072 $ 88,747 $112,603 $ 73,327
Restricted cash ................................ — 150 8,418 — —
Working capital (1) ............................. 289,984 410,740 376,610 368,456 224,685
Total assets ................................... 450,441 605,829 559,794 552,659 397,682
Long-term obligations – capital lease ............... 4 570 — — —
Total stockholders’ equity ....................... $333,962 $466,323 $434,500 $415,146 $268,798
(1) Current assets less current liabilities.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
Overview
LeapFrog creates and markets products which make learning fun with connected, innovative technology that
teaches and engages in the world’s largest markets. Our mission is to create educational products, content and
services that kids love, parents trust, and teachers value.
To date, we have established our brand and products primarily for children up to age 12 in the U.S. retail
market. We use the toy form and price points to make learning fun and cost-effective. As a result, sales in our
U.S. Consumer and International segments, our largest business segments, currently are generated in the toy
aisles of retailers. We have sold the products of our SchoolHouse (formerly referred to as “Education and
Training”) segment predominantly to educational institutions.
We design, develop and market technology-based educational platforms with curriculum interactive
software content and stand-alone products and these products are for sale through retailers, distributors and
directly to schools. We operate three business segments, which we refer to as U.S. Consumer, International, and
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