LeapFrog 2011 Annual Report Download - page 20

Prior to this, he worked for Associated Newspapers (now part of A&N Media Limited) as Circulation Sales
Director from September 2001 to May 2006, Emap plc (now part of Eden Bidco Ltd) from November 1998
to September 2001, as well as a number of other fast moving consumer goods companies including The Coca-
Cola Company, PepsiCo, Inc. and Virgin Group Limited.
Available Information
We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy
statements and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange
Act of 1934, as amended (‘‘Exchange Act’’) with the U.S. Securities and Exchange Commission (‘‘SEC’’).
Such reports and other information filed with the SEC are available free of charge on the investor relations
section of our website located at www.leapfroginvestor.com under ‘‘Financial Information-SEC Filings’’ as
soon as reasonably practicable after they are filed with or furnished to the SEC. The public may read and
copy any materials filed by us with the SEC at the SEC’s Public Reference Room at 100 F Street, NE,
Washington, DC 20549. The public may obtain information regarding the operation of the Public Reference
Room of the SEC by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a website that
contains reports, proxy and information statements, and other information regarding issuers that file
electronically at www.sec.gov. The contents of these websites are not incorporated into this filing. Further, our
references to the URLs for these websites are intended to be inactive textual references only.
ITEM 1A. RISK FACTORS
Our business, financial condition and operating results can be affected by a number of factors, including those
described below, any one of which could cause our actual results to vary materially from recent results or
from our anticipated future results. In addition to the other information contained in this Annual Report on
Form 10-K and our other filings with the SEC, the following risk factors should be considered carefully
before you decide whether to buy, hold or sell our common stock. Additional risks not presently known to us
or that we currently deem immaterial may also impair our business, financial conditions, results of operations
and stock price.
If global economic conditions deteriorate, our business and financial results could be affected.
We develop and distribute educational entertainment for children. Our performance is impacted by the level of
discretionary consumer spending. Consumers’ discretionary purchases of educational entertainment items for
children may be impacted by unemployment, foreclosures, bankruptcies, reduced access to credit, falling home
prices, lower consumer confidence and other macroeconomic factors that affect consumer spending behavior.
In addition, the stability of the European Union and the debt crisis in certain of its member states poses a
significant threat to the global economy as a whole. Although discretionary consumer spending in the U.S. and
around the world has recovered from the lows experienced in the most recent economic recession,
deterioration of global economic conditions could potentially have a material adverse effect on our business
and operating results.
Our business depends on our ability to correctly predict highly changeable consumer preferences and
product trends.
We operate in an industry where consumer preferences can change drastically from year to year. Even our
successful products typically have a relatively short period of high demand followed by a decrease in demand
as the products mature. For example, net sales of the classic Leapster platform peaked in 2006 and are no
longer material to our overall sales. We depend on our ability to correctly identify changing consumer
sentiments well in advance and supply new products that respond to such changes on a timely basis. In
addition, we rely on our ability to identify third party entertainment media that is likely to be popular with
consumers and license rights to such media to incorporate into many of our products. Consumer preferences,
and particularly children’s preferences, are continually changing and are difficult to predict. Since our products
typically have a long development cycle, in some cases lasting over a year, it can be difficult to predict
correctly changing consumer preferences and technology, entertainment and education trends. If we are unable
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