LeapFrog 2006 Annual Report Download - page 49
Download and view the complete annual report
Please find page 49 of the 2006 LeapFrog annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39 -
40 -
41 -
42 -
43 -
44 -
45 -
46 -
47 -
48 -
49 -
50 -
51 -
52 -
53 -
54 -
55 -
56 -
57 -
58 -
59 -
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
-
177
-
178
-
179
-
180
-
181
-
182
 |
 |
U.S. Consumer. The 3.8 percentage point increase in our U.S. Consumer segment’s gross profit percentage
year-over-year was primarily the result of the following:
• Shipments to retail customers in the third and fourth quarters of our FLY Pentop Computer and related
software and accessories, which have relatively strong margins.
• Reduced sales allowances in 2005 compared to 2004 when customers received allowances to offset
operational issues encountered during the start up of our new distribution facility in the third quarter of
2004.
• Lower freight costs in 2005 compared to 2004 when costs were incrementally higher due to the use of
air freight to address certain transition issues into our Fontana warehouse in the third quarter.
• Lower expense for excess and obsolete inventory compared to 2004 when we had higher expense
primarily related to raw materials at the factories and slow moving products.
These factors were partially offset by increased sales throughout 2005 of our screen-based platforms, which
have lower margins, and price reductions on our older platforms.
International. The 2.7 percentage point increase in our International segment’s gross profit percentage year-
over-year was primarily due to favorable product mix and lower freight, warehouse and royalty expenses.
SchoolHouse. The 1.2 percentage point increase in our SchoolHouse segment’s gross profit percentage year-
over-year was primarily due to favorable product mix and lower freight, warehouse and amortization of content
and video expenses.
Selling, General and Administrative Expense
The selling, general and administrative expense in dollars for each segment and the related percentage of
our total net sales were as follows:
Year Ended December 31,
2005 2004 Change
Segment $(1)
%of
Total
Segment’s
Net Sales $(1)
%of
Total
Segment’s
Net Sales $(1) %
U.S. Consumer ..................... $ 90.0 18.8% $ 82.9 19.2% $ 7.1 9%
International ....................... 14.7 11.2% 17.1 11.2% (2.4) (14)%
SchoolHouse ...................... 21.5 53.4% 20.8 37.6% 0.7 3%
Total Company ................... $126.2 19.4% $120.8 18.9% $ 5.4 5%
(1) In millions.
We record all indirect expenses in our U.S. Consumer segment and do not allocate these expenses to our
International and SchoolHouse segments.
The $5.4 million increase year-over-year in selling, general and administrative expense was primarily due to
the following factors affecting our U.S. Consumer segment:
• Higher legal expense of approximately $3.2 million primarily attributable to enforcing our patents.
• External support costs of approximately $2.8 million primarily related to process improvements within
our supply chain operation.
42