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LeapFrog Enterprises Inc. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: February 22, 2011 05:24PM
LeapFrog Enterprises Inc. (LF) filed Annual Report for the period ended 2010-12-31. Leap Frog Enterprises Inc. Cla has a market cap of $289.87 million; its shares were traded at around $4.49 with a P/E ratio of 89.8 and P/S ratio of 0.67.Hedge Fund Gurus that owns LF: Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC. Mutual Fund and Other Gurus that owns LF: Pioneer Investments.
Highlight of Business Operations:
The aggregate market value of the common equity held by non-affiliates of the registrant as of June 30, 2010 calculated using the closing market price as of that day, was approximately $103.6 million. Shares of common stock held by each current executive officer and director and by each person who is known by the registrant to own 5% or more of the outstanding voting power of the registrants common stock have been excluded from this computation in that such persons may be deemed to be affiliates of the registrant. Share ownership information of certain persons known by the registrant to own greater than 5% of the outstanding voting power of the registrants common stock for purposes of the preceding calculation is based solely on information on Schedule 13G filed with the Commission and is as of June 30, 2010. This determination of affiliate status is not a conclusive determination for other purposes.
Net sales for the first three quarters of 2010 were 27% higher than the same period of 2009, growing 42%, 26% and 23%, for the first, second and third quarters, respectively. The high year-over-year growth rates were partially a result of the high 2008 retail inventory levels that reduced retailer demand for our products in 2009. In addition, we also launched several new products that contributed to the growth of net sales in 2010. Although the fourth quarter of 2010 included a strong start to the holiday season with a successful Black Friday, consumer demand in December softened relative to our expectations and net sales for the quarter ended flat as compared to the same quarter in 2009. The weaker than expected fourth quarter consumer demand resulted in higher retail inventory levels at the end of the year than we had planned, which we expect will affect net sales growth in the first half of 2011.
The U.S. segment represented approximately 80%, 81% and 79% of LeapFrogs consolidated net sales in 2010, 2009 and 2008, respectively. The vast majority of this segments net sales are to a few large retailers. Sales invoiced to Wal-Mart, Toys R Us and Target in aggregate accounted for approximately 65%, 65% and 69% of the segments gross sales in 2010, 2009 and 2008, respectively. Each of these customers accounted for more than 10% of our consolidated and U.S. segments gross sales in each of 2010, 2009 and 2008. Accordingly, the loss of any of these three customers would have a material adverse effect on our business.
Our International segment represented approximately 20%, 19% and 21% of our consolidated net sales in 2010, 2009 and 2008, respectively. No single country represented 10% or more of our consolidated net sales in any of those three years. Sales invoiced to Wal-Mart and Toys R Us in aggregate accounted for approximately 32%, 25% and 23% of the segments gross sales in 2010, 2009 and 2008, respectively.
Stocks Discussed: LF,