LeapFrog 2011 Annual Report Download - page 36
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Fiscal Year 2011 Compared to Fiscal Year 2010
SG&A expenses for 2011 increased 1% as compared to 2010, primarily due to an increase in compensation
expenses resulting from exceeding the overall Company performance targets set as a part of our employee
bonus programs, largely offset by lower rent expense and lower other employee-related expenses resulting
from a decrease in headcount during the year as well as the termination of a portion of our leased headquarter
facilities in Emeryville, California in the fourth quarter of 2010.
Fiscal Year 2010 Compared to Fiscal Year 2009
SG&A expenses declined 7% during 2010 as compared to 2009. The decrease was primarily driven by lower
compensation related expenses, including stock-based compensation, as a result of a lower average headcount
during 2010.
Research and Development Expenses
R&D expenses consist primarily of salaries, employee benefits, stock-based compensation and other
headcount-related expenses associated with content development, product development, product engineering,
third-party development and programming and localization costs to translate content for international markets.
We capitalize external third-party costs related to content development, which are subsequently amortized into
cost of sales in the statements of operations. The related prior period data has been recast to conform to the
current year presentation.
2011 2010 2009
% Change
2011 vs.
2010
% Change
2010 vs.
2009
(Dollars in millions)
R&D expenses ....................... $33.8 $33.4 $33.8 1% (1)%
As a percent of net sales ................ 7% 8% 9% (1)* (1)*
* Percentage point increase (decrease)
Fiscal Year 2011 Compared to Fiscal Year 2010
R&D expenses for 2011 remained relatively level, increasing 1% as compared to 2010 with no significant
offsetting items.
Fiscal Year 2010 Compared to Fiscal Year 2009
R&D expenses for 2010 remained relatively level, decreasing 1% as compared to 2009 with no significant
offsetting items.
Advertising Expenses
Advertising expense consists of costs associated with marketing, advertising and promoting our products,
including customer-related discounts and promotional allowances.
2011 2010 2009
% Change
2011 vs.
2010
% Change
2010 vs.
2009
(Dollars in millions)
Advertising expenses................... $39.5 $49.3 $39.3 (20)% 25%
As a percent of net sales ................ 9% 11% 10% (2)* 1*
* Percentage point increase (decrease)
26