LeapFrog 2013 Annual Report Download - page 63
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
7. Goodwill
The Company’s goodwill is related to its 1997 acquisition of substantially all the assets and business of its
predecessor, LeapFrog RBT, and its 1998 acquisition of substantially all the assets of Explore Technologies.
All of its goodwill is allocated to the Company’s U.S. segment.
The Company performed the qualitative assessment for impairment as of December 31, 2013 and 2012 and
concluded that its goodwill balance of $19,549 had not been impaired.
8. Other Intangible Assets
The Company’s other intangible assets as of December 31, 2013 and 2012 were as follows:
December 31,
2013 2012
Intellectual property, license agreements and other intangibles ........ $16,755 $ 16,755
Less: accumulated amortization ............................ (16,705) (15,805)
Total ............................................. $ 50 $ 950
In 2004, the Company entered into a ten-year license agreement with a third party to use the third party’s
technology in some of the Company’s products. The $6,000 license fee is included in intangible assets on the
balance sheet and is being amortized to operating expense on a straight-line basis over the life of the contract.
Amortization expense of other intangible assets is included in depreciation and amortization expense in the
statement of operations and totaled $900, $2,400 and $2,368 for the years ended December 31, 2013, 2012
and 2011, respectively.
The remaining balance of the Company’s intangible assets other than goodwill as of December 31, 2013 will
be fully amortized in 2014.
9. Accrued Liabilities
The Company’s accrued liabilities as of December 31, 2013 and 2012 were as follows:
December 31,
2013 2012
Employee-related expenses ............................... $ 7,674 $22,796
Advertising and promotion ................................ 11,356 10,613
Royalties payable ...................................... 6,626 8,385
Manufacturing and warehousing ............................ 1,693 1,675
Marketing, consulting and web-related ........................ 5,786 2,904
Other .............................................. 7,630 4,980
Total ............................................. $40,765 $51,353
Employee-related expense accruals decreased primarily due to a decrease in incentive compensation expense
for 2013 as compared to 2012.
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