LEAPFROG ENTERPRISES, INC.

LEAPFROG ENTERPRISES, INC.

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Company Overview
LeapFrog Enterprises, Inc. is the world’s leading designer, developer and marketer of innovative, technology-based educational products and related proprietary content. The company’s corporate headquarters is located in Emeryville, California in the United States. The company was founded in 1995 by Michael Wood as a toy enterprise that initially offered a range of electronic toys designed to aid children in reading and mastering other academic skills. Since then, LeapFrog has grown to become one of the largest toy companies in the United States offering more than 100 interactive educational toys and books spanning a broad array of subjects ranging from math to music.
LeapFrog is completely focused on developing products that will provide the most engaging, effective learning experience – for all ages, in school or home, around the world. The company’s product portfolio includes the LeapStart Learning Table, iQuest, Turbo Twist, LeapPad talking books, and many other interactive toys appropriate for children from preschool age through middle school. The company’s electronic books are available in French, Italian, Spanish, and Japanese.
LeapFrog’s guiding principle is to put learning first, a philosophy that distinguishes the company from its competitors and fuels the entire organization. The company’s vision is to inspire in children and families a lifelong love of learning. That’s why LeapFrog is committed to developing the highest quality educational toys – unique electronic interactive toys that are not only fun to play with but also are great teaching tools. The LeapFrog learning experience is brought to life by its highly specialized teams who unite the three key elements that truly set its products apart: a rigorous learning methodology, multi-layered content, and intuitive technology.
LeapFrog operates in more than 25 countries worldwide. The company’s manufacturing and R&D facilities are located in Emeryville, California in the United States. Some of the company’s products are sold directly to schools through its SchoolHouse division. The company also sells its products through mass marketers, club stores, electronic and office supply stores, distributors, retailers, and educational institutions. The company has a network of sales offices in the United States, Canada, Mexico, United Kingdom, France, South Korea, New Zealand, Australia, Latin America, and other European countries.
Business Summary
LeapFrog Enterprises Inc. (LeapFrog), incorporated in 1997, designs, develops and markets a family of technology-based learning platforms and related content for infants through age twelve, both at home and in schools worldwide. The Company’s product portfolio consists of standalone learning toys, interactive reading systems, educational gaming systems, and software-based book and game content. The Company operates in two business segments: United States and International. The Company’s products are available in four languages and are sold through retailers, distributors, directly to consumers via the leapfrog.com Web-store and directly to schools.
Description and history
LeapFrog Enterprises Inc. (LeapFrog), incorporated in 1997, designs, develops and markets a family of technology-based learning platforms and related content for infants through age twelve, both at home and in schools worldwide. The Company’s product portfolio consists of standalone learning toys, interactive reading systems, educational gaming systems, and software-based book and game content. The Company operates in two business segments: United States and International. The Company’s products are available in four languages and are sold through retailers, distributors, directly to consumers via the leapfrog.com Web-store and directly to schools.

The Company’s Tag reading system is a pen-based reading system that leverages the technology of optical hardware and optical character reading software. The Tag reading system focuses on fundamental reading skills and offers a library of interactive books based on both children’s classic book titles and licensed characters, such as Dr. Seuss’ Cat in the Hat, Disney Princess, and Nickelodeon’s SpongeBob Squarepants. The Company’s LeapPad learning system (LeapPad) product includes devices that introduce basic vocabulary and reading concepts for preschool and kindergarten children through music, talking characters, engaging narration and interactive play, and that can also be used to reinforce learning English as a second language.

LeapFrog produces educational gaming products for children ages four to eight years old. In 2008, the Company introduced the Leapster2 platform, a Web-connected version of its Leapster handheld, which connects to the LeapFrog Learning Path. It also launched five Leapster software titles, including Star Wars: The Clone Wars and Disney’s Wall-e. Its Leapster L-MAX, a television compatible version of the Leapster platform, has been phasing out in the United States and some international retail markets in 2008. LeapFrog introduced an educational gaming line, Didj Custom Gaming System (Didj) in 2008. Didj is a Web-connected handheld device that allows for customization of curriculum and game play. The Didj software library contains approximately 15 titles, including some licensed content, such as LucasArts’ Clone Wars, and Hannah Montana, by Disney.

The Company’s Learning Toys help develop motor skills, color, and sound and letter recognition for infants and children through age five. In 2009, Scout collection was launched. It is a line of toys themed around Scout puppy dog character and targets children ages six months and up. The line includes My Pal Scout and My Pal Violet which are customizable, interactive plush puppies that are web-enabled and connect to the Learning Path. The line also includes Text & Learn, Scribble & Write and Chat & Count.

United States

The United States segment is responsible for developing, designing, marketing and selling of its products through retail channels and through the Company’s Website in the United States. LeapFrog markets and sells its products directly to national and regional mass-market and specialty retailers and other retail stores, distributors, and directly through sales representatives. It also sells its products through online store and other Internet-based channels. The United States segment accounted for approximately 81% of LeapFrog’s consolidated net sales during the year ended December 31, 2009.

International

The International segment is responsible for the localization, marketing and sales of the Company’s products originally developed for the United States, sold in retail channels outside of the United States. The Company markets and sells its products to retailers outside the United States through various distribution arrangements. It has sales offices in Canada, France, Mexico and the United Kingdom. The Company’s International segment accounted for approximately 19% of consolidated net sales in 2009.

The Company competes with Mattel, Inc., Hasbro, Inc., Vtech Holdings Ltd., Sony, Microsoft and Nintendo.

Founded by Michael Wood as a toy enterprise that initially offered a range of electronic toys designed to aid children in reading and mastering other academic skills

Business Line
Designer, developer and marketer of innovative, technology-based educational products and related proprietary content
Subsidiary
LEAP FROG TOYS (UK) LIMITED
Advisor
ERNST & YOUNG LLP
IPO date
7/25/2002
US SIC Code
3944
Company Address
Suite 100
6401, Hollis Street
City province or state postal code
94608, EMERYVILLE, CA
Phone: +1 510 420 5150
Fax:
Country address: UNITED STATES OF AMERICA
Website url: www.leapfrog.com