LeapFrog 2011 Annual Report Download - page 42

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Cash Sources and Uses
The table below shows our sources and uses of cash for the three fiscal years ended December 31, 2011, 2010
and 2009.
2011 2010 2009
% Change
2011 vs.
2010
% Change
2010 vs.
2009
(Dollars in millions)
Cash flows provided by (used in):
Operating activities .................. $70.2 $(22.6) $ (5.0) 410% (353)%
Investing activities................... (19.9) (21.2) (13.3) 7% (60)%
Financing activities .................. 2.2 1.6 (0.2) 38% 919%
Effect of exchange rate fluctuations on cash . (0.1) 0.1 1.0 (150)% (88)%
Increase (decrease) in cash and cash
equivalents .................... $52.4 $(42.1) $(17.5) 224% (141)%
Fiscal Year 2011 Compared to Fiscal Year 2010
Cash flow provided by operations for 2011 increased $92.8 million compared to 2010, primarily due to
significantly lower inventory purchases during the period as a result of higher than desired inventory levels at
the end of 2010. In addition, in 2011 our accounts payable payments were timely, while in 2010, we caught
up on delinquent accounts payable payments from 2009, which resulted in extra operating cash usage.
Increase in net income and improved accounts receivable collection efforts also contributed to the increase in
cash flow provided by operations for 2011.
Net cash used in investing activities for 2011 decreased $1.3 million compared to 2010, primarily due to a
$5.3 million purchase of intangible assets in 2010, partially offset by an increase in hardware and software
purchases in 2011 as well as the cash generated from sales of investments in 2010, of which there were
zero in 2011.
Net cash provided by financing activities for 2011 increased $0.6 million as compared to 2010 primarily due
to an increase in employee option exercises, partially offset by higher payroll taxes related to an increase in
employee restricted stock units released in the 2011 as compared to 2010.
Fiscal Year 2010 Compared to Fiscal Year 2009
Net cash used in operating activities for 2010 increased $17.6 million, as compared to 2009, primarily due to
a significantly higher inventory level purchased to support expected sales demand, and a decrease in
associated accounts payable due to timelier payments, offset partially by increased cash collected from our
accounts receivable.
Net cash used in investing activities increased $7.9 million, or 59%, for 2010 as compared to 2009, primarily
due to the purchase of $5.4 million of intangible assets related to the technology used in our Tag reading
system. The remaining increase is primarily related to various computer hardware and software upgrades and
maintenance, as well as new software purchases to further automate processes and better support operations.
Net cash provided by financing activities improved $1.8 million for 2010 as compared to 2009, primarily due
to an increase in employee stock option exercises in response to a higher average company stock price during
2010 as compared to 2009.
32