LeapFrog 2015 Annual Report Download - page 66

LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
3. Fair Value of Financial Instruments and Investments − (continued)
contract at March 31, 2015, with notional value of $4,760 and maturity of approximately one month.
The fair market value of this instrument, based on quoted prices, was $22 at March 31, 2015 and
recorded in prepaid expenses and other current assets.
• Level 3 includes financial instruments for which fair value is derived from valuation techniques,
including pricing models and discounted cash flow models, in which one or more significant inputs,
including the Company’s own assumptions, are unobservable. The Company did not hold any
Level 3 assets as of March 31, 2015 and 2014.
The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair
value on a recurring basis as of March 31, 2015 and 2014:
Estimated Fair Value Measurements
Carrying
Value
Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
March 31, 2015:
Financial Assets:
Money market funds and certificate of deposit . . . $ 62,810 $ 62,810 $— $—
Collateral certificates of deposit* ............ 20,000 20,000 — —
Forward currency contracts ................ 22 — 22 —
Total financial assets ................... $82,832 $ 82,810 $22 $—
March 31, 2014:
Financial Assets:
Money market funds and certificate of
deposit ............................ $118,795 $118,795 $— $—
Total financial assets ................... $118,795 $118,795 $— $—
* These certificates of deposit were collateral under the Company’s asset-based revolving credit facility
arrangement. Refer to Note 12 — ‘‘Borrowing under Credit Agreement’’ for additional information on the
the revoling credit facility.
4. Inventories
The Company’s inventories, stated on a first-in, first-out basis at the lower of cost or market as of March 31,
2015 and 2014, were as follows:
March 31,
2015 2014
Raw materials ...................................... $ 3,120 $ 4,594
Finished goods ...................................... 68,807 47,699
Total ........................................... $71,927 $52,293
For the year ended March 31, 2015, the three months ended March 31, 2014 and the years ended
December 31, 2013 and 2012, the Company recorded net sales of inventory written down in the previous
year resulting in a benefit to gross margin of $582, $295, $2,463 and $1,814, respectively.
59