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GREAT seeking alpha article on LF: http://seekingalpha.com/article/1204371-leapfrog-s-threats-and-opportunities-are-widely-misunderstood?source=yahoo
(LF) last night announced a phenomenal quarter that exceeded even the high end of analyst expectations. I see this stock moving significantly higher over the course of 2013. LF reported adjusted EPS of $0.60 versus the analyst estimate of $0.48. Here are the highlights of the results provided by YahooFinance:
Highlights of full year 2012 results compared to full year 2011 results:
Consolidated net sales were up 28%.
U.S. segment net sales were up 24%, and international segment net sales were up 38%.
Income from operations was up 170%.
Income from operations as a percentage of net sales was 11.0%, more than double the prior year.
Net income was $86.5 million, up 334%.
Net income per diluted share was $1.24, up $0.94.
Adjusted EBITDA was $93.1 million, up 89%.1
Cash and cash equivalents were $120.0 million as of December 31, 2012, up 67% compared to the balance as of December 31, 2011
These numbers were in spite of doubts ahead of the earnings calls from the bear side citing poor performance results from other toy companies that are in the sector such as Hasbro (HAS) and Mattel (MAT). I believe that those companies however do not directly compete with LF as LF is in a niche market that provides educational materials in a fun way to children, emphasizing the education part of play.
After being up as much as 6% AH, LF was punished in morning trading, trading as low as $8.15. I believe this would have been a great opportunity to buy as I feel these shares are undervalued going forward after this great quarter and the outlook for the future.
LF products struggled to stay on the store shelves as demand during the holiday season was strong. LF actually had 3 products in the top 5 selling toys, and 4 out of the top 10 this holiday season. (Article)
LF was able to do all this in a weak global economy and a declining toy industry.
Going Forward
LF held the number one spot for best selling toy with its cartridges for the Leappad devices. Digital downloads, which are the highest-margin item for LF, grew by 4x compared to 2011, which will bode well for the company's earnings into the future. LF is a fundamentally healthy company with confident management that is investing in the future. LF has been making deals with digital download content providers such as Disney (DIS) and Festival Five Records to expand available content for purchase. LeapFrog also has room for International growth and has shown its strength in the International Market as they had 2 of the top 10 selling toys in the UK. Some argue that market share will receive competition from iPads and other tablet devices. Personally I would not give an iPad to a child, but for those who are willing to take that risk, LF is now launching a learn-to-read system that will be an app for the iPhone and iPad and will be available as well for the new Leappad tablet devices. Ray Arthur, CFO, showed the growth initiative of the company when providing guidance:
To support our market-leading growth and our ongoing business transformation, we plan to make long-term investments in content, international expansion, online communities, systems and new platforms. Even with this investment for the future, we expect our operating margin as a percentage of net sales to remain consistent with 2012.
This focus on maintaining strong margins while facilitating growth is why I believe LF is a great pick for 2013. I believe and entry under $9.00 would provide great room for growth as the market is yet to reward LeapFrog and their management for the great quarter they provided us.
About LeapFrog
LeapFrog Enterprises, Inc. is the leader in educational entertainment for children. LeapFrog's award-winning product portfolio helps millions of children achieve their potential by delivering best-in-class curriculum through engaging content, fun multimedia learning platforms and toys. The Learning Path, LeapFrog's proprietary online destination for parents and extended family, provides personalized feedback on a child's learning progress and offers recommendations to enhance each child's learning experience. Through the power of play, LeapFrog's products and curriculum help children of all ages prepare for school and life success. LeapFrog's products are available in more than 45 countries and have been used by teachers in more than 100,000 U.S. classrooms. LeapFrog is based in Emeryville, California, and was founded in 1995 by a father who revolutionized technology-based learning solutions to help his child learn how to read.
http://seekingalpha.com/article/1169131-a-hoppin-pick-for-2013?source=yahoo
10.00 March calls on the discount rack today...
.25 x .30
LF130316C00010000
LeapFrog Reports 2012 Income From Operations Increased 170%
EMERYVILLE, Calif., Feb. 6, 2013 /PRNewswire/ -- LeapFrog Enterprises, Inc. (NYSE:LF) today announced financial results for the fourth quarter and full year ended December 31, 2012.
Highlights of full year 2012 results compared to full year 2011 results:
Consolidated net sales were up 28%.
U.S. segment net sales were up 24%, and international segment net sales were up 38%.
Income from operations was up 170%.
Income from operations as a percentage of net sales was 11.0%, more than double the prior year.
Net income was $86.5 million, up 334%.
Net income per diluted share was $1.24, up $0.94.
Adjusted EBITDA was $93.1 million, up 89%.1
Cash and cash equivalents were $120.0 million as of December 31, 2012, up 67% compared to the balance as of December 31, 2011.
"The quality of execution from the LeapFrog team was exceptional this past year. Despite a tough global economy and a declining U.S. toy industry,2 we achieved a third straight year of sales growth and nearly tripled our income from operations, continuing to drive shareholder value," said John Barbour, Chief Executive Officer.
"Our focus on creating the best children's educational entertainment platforms and content resulted in our award-winning line of cartridge content becoming the #1 top-selling toy in the U.S. and a Top 10 selling toy in the U.K. in 2012 based on sales according to NPD data.2 In addition, net sales of digital download content from our curated selection of over 475 titles, including LeapFrog-developed content and content from 30 media partners, were nearly four times the prior year as families took advantage of our 24x7 online App Center.
"We had more products in NPD's list of U.S. 2012 Top 10 selling toys than any other manufacturer, with three of the top four and four of the Top 10.2 In the U.K., we also had two of the Top 10 selling toys.2 We also achieved significant market share growth in all the major markets in which we operate and built solid foundations for more growth in 2013."
"LeapFrog is in a very exciting position and I am optimistic about our continued growth in 2013," continued Mr. Barbour. "More and more parents around the world are searching for effective learning solutions to supplement their children's education. We have 18 years of experience creating the best learning solutions in the market and are uniquely positioned to take advantage of this opportunity.
"I am very excited about the quality of the team we have assembled and developed at LeapFrog over the last two years. I believe our market-leading performance in 2012 is a direct result of our world-class talent, our wonderful brand that is loved by millions of families, and the fun and engaging entertainment experiences we create that provide children with life-changing learning."
Financial Overview for the Fourth Quarter 2012 Compared to the Fourth Quarter 2011
Fourth quarter 2012 net sales were $244.7 million, up 16% compared to $210.2 million last year, and were not materially impacted by changes in currency exchange rates. Net sales growth was primarily driven by strong content sales, high consumer demand for the LeapPad learning tablets and accessories, and the introduction of the LeapsterGS game system. In the U.S. segment, net sales were $177.8 million, up 11% compared to $160.6 million last year. In the International segment, net sales were $67.0 million, up 35% compared to $49.6 million last year, and included a 2% positive impact from changes in currency exchange rates.
Income from operations for the fourth quarter was $43.2 million, up 28% compared to $33.7 million reported a year ago. Income from operations as a percentage of net sales was 17.7%, up 170 basis points compared to 16.0% a year ago.
Net income for the fourth quarter was $62.3 million, up 90% compared to $32.8 million a year ago. Net income per diluted share was $0.89, up 82% compared to $0.49 a year ago. Net income in the fourth quarter of 2012 included a tax benefit of $20.3 million, or $0.29 per diluted share, as a result of recording the expected tax benefit of a portion of the company's past accumulated net operating losses due to improved historical results and future prospects.
Adjusted EBITDA for the fourth quarter was $50.4 million, up 24% compared to $40.7 million a year ago.
Financial Overview for the Full Year 2012 Compared to the Full Year 2011
Full year 2012 net sales were $581.3 million, up 28% compared to $455.1 million last year, and were not materially impacted by changes in currency exchange rates. Net sales growth was primarily driven by strong content sales, high consumer demand for the LeapPad learning tablets and accessories, and the introduction of the LeapsterGS game system. In the U.S. segment, net sales were $424.8 million, up 24% compared to $342.0 million last year. In the International segment, net sales were $156.5 million, up 38% compared to $113.1 million last year, and included a 1% negative impact from changes in currency exchange rates.
Income from operations was $64.1 million in 2012, up $40.4 million or 170% compared to 2011. Income from operations as a percentage of net sales was 11.0%, up 112%, or 580 basis points, compared to 5.2% a year ago.
Net income was $86.5 million in 2012, more than four times the net income of $19.9 million in 2011. Net income per diluted share was $1.24, more than four times the net income per share of $0.30 in 2011. Net income in 2012 included a tax benefit of $20.3 million, or $0.29 per diluted share, as a result of recording the expected tax benefit of a portion of the company's past accumulated net operating losses due to improved historical results and future prospects. Net income in 2012 also included a $6.4 million, or $0.09 per diluted share, tax benefit due to expiring statute of limitations.
Adjusted EBITDA for the full year was $93.1 million, up 89% compared to $49.3 million a year ago.
"We delivered a terrific performance in 2012 with strong sales, earnings, and cash growth," said Ray Arthur, Chief Financial Officer. "Consumer demand for our educational entertainment was robust, resulting in good consumer sell-through and healthy year-end retail inventory levels. Our balance sheet also improved with inventory and receivables balances growing at a lower rate than our net sales growth, and our accounts payable balance actually declining. Working capital improved by 42%, allowing us to self-fund our operations without accessing our asset-based credit line."
Guidance
"We are excited about our market-leading portfolio and new product launches for 2013, including a new learn-to-read system, new iPhone and iPad app activity products and new LeapPad tablets," stated Mr. Arthur. "As a result, despite a global economy that remains sluggish and a U.S. toy industry that declined in 2012,2 we plan to continue to grow our business at a pace significantly ahead of the market and expect net sales to increase at a high single-digit percentage growth rate. Like 2012, we will be prepared to chase upside whenever possible.
"To support our market-leading growth and our ongoing business transformation, we plan to make long-term investments in content, international expansion, online communities, systems and new platforms. Even with this investment for the future, we expect our operating margin as a percentage of net sales to remain consistent with 2012.
"Additional guidance will be provided at a later date when we have more clarity regarding our book tax accounting position. The ultimate outcome of our book tax accounting position will have no impact on cash taxes paid. We do not expect to pay any significant amount of U.S. federal taxes in the next several years."3
First quarter 2013 guidance is as follows:
We expect:
Net sales to increase by about 10% compared to the first quarter of 2012.
Net loss per share to be in the range of $0.07 to $0.09, which includes a tax benefit at a 37.5% effective tax rate, compared to a net loss per share of $0.14 in the first quarter of 2012. First quarter 2012 results did not include a net tax benefit related to the period operating loss.
Conference Call and Webcast
LeapFrog will hold a conference call to discuss fourth quarter and full year 2012 financial results on February 6, 2013, at 2:00 p.m. Pacific Standard Time (5:00 p.m. Eastern Standard Time). The conference call will be webcast live and can be accessed at LeapFrog's investor relations web site at www.leapfroginvestor.com. An archive of the webcast will be available on the web site approximately three hours after completion of the call. In addition, more information about LeapFrog, including this press release and other financial and investor information, is also available on the investor relations web site.
To participate in the call, please dial (706) 634-0183 and request conference ID 88607415. A telephonic replay of the call will be available for one month. To access the replay, please dial (404) 537-3406 and use conference ID 88607415.
About LeapFrog
LeapFrog Enterprises, Inc. is the leader in educational entertainment for children. LeapFrog's award-winning product portfolio helps millions of children achieve their potential by delivering best-in-class curriculum through engaging content, fun multimedia learning platforms and toys. The Learning Path, LeapFrog's proprietary online destination for parents and extended family, provides personalized feedback on a child's learning progress and offers recommendations to enhance each child's learning experience. Through the power of play, LeapFrog's products and curriculum help children of all ages prepare for school and life success. LeapFrog's products are available in more than 45 countries and have been used by teachers in more than 100,000 U.S. classrooms. LeapFrog is based in Emeryville, California, and was founded in 1995 by a father who revolutionized technology-based learning solutions to help his child learn how to read. Come see the learning at www.leapfrog.com.
TM & © 2013 LeapFrog Enterprises, Inc. All rights reserved.
LeapFrog Enterprises Inc. (LF) Tops Q4 EPS by 41c, Guides Q1 Above Street
4:05 PM 2/6/2013 - StreetInsider
LeapFrog Enterprises Inc. (NYSE: LF) reported Q4 EPS of $0.89, $0.41 better than the analyst estimate of $0.48. Revenue for the quarter came in at $244.7 million versus the consensus estimate of $221.19 million.
LeapFrog Enterprises Inc. sees Q1 2013 EPS of $(0.07)-($0.09), versus the consensus of ($0.12).
"(LF) share price has entered into oversold territory with a stochastic value of 8.827. The Zacks Consensus Estimate on the company’s earnings for year ending December 2012 increased by 3 cents over the past month to 86 cents per share. LeapFrog Enterprises, Inc. is a Zacks #1 Rank (“Strong Buy”) company."
http://finance.yahoo.com/news/leapfrog-enterprises-inc-enters-oversold-155227758.html
Some consolidation after a 30% run up in a month is normal and healthy IMO.
LF-Motley Fool today: "leaping higher in 2013:"
"The company recently introduced LeapPad2, a new version of their electronic learning tablet in advance of the holiday season. Channel checks indicate the toy was a top seller at retailers during the Black Friday holiday weekend in late November. While Black Friday is known for promotional pricing, LeapPad2 devices were in high demand at the $99 MSRP given a complete sellout on Amazon, Target, Toys’R’Us, and Wal-Mart.
During 2011, the company’s original LeapPad became an industry best seller. Since this time, competitors simply haven’t done enough to neutralize LeapFrog’s new leadership in children’s toys. The company’s main tablet competitors are Barnes and Noble's Nook Color and Amazon.com's Kindle Fire, which are seeing low adoption given higher price points and unnecessary technology for children ages 3 through 9.
Boutique investment research firm Monness Crespi Hardt recently initiated coverage of LeapFrog Enterprises on January 14 with a buy rating and $12 price target. Monness Crespi is based in New York City and its client base consists solely of investors seeking portfolio advice, not corporations.
Wall Street analysts are unanimously positive on LeapFrog. The consensus analyst opinion on LeapFrog is overweight and the mean price target is $14.00. The high price target is $15 and the low price target is $12, all above the current market price. Notable value investor Karen Finerman also maintains a large position in the stock.
When LeapFrog issued third quarter results back on November 7, the company crushed Wall Street expectations on both earnings and revenue. However, the stock moved lower following the earnings release, as investors expressed concerns over increased product inventories and moderate guidance. LeapFrog had $115 million in inventories on its balance sheet as of September 30, a $34 million increase over the prior year. Analysts believe this former negative is becoming a positive as LeapFrog is able to replenish emptying shelves at toy retailers nationwide. In addition, management’s initial guidance ($535 – $550 million revenue; $0.75 – $0.81 EPS) appears conservative as Wall Street is factoring in higher sales across the board."
http://beta.fool.com/johnmacris/2013/01/22/toy-maker-should-leap-higher-2013/22221/?ticker=LF&source=eogyholnk0000001
I agree. He had one good year, which most analysts have, and he's a guru, LOL. Thing is, he is most followed by shorters who go for the spike he gets mentioning a stock, waning. Which is the main reason I posted it. We now have shorter interest.
hopefully end of his influence on pps: http://seekingalpha.com/article/1116581-cramer-s-mad-money-the-dollar-store-debacle-1-16-13
2:22 PM The toy industry ended the year with an uptick as late holiday sales helped the sector bring in $16.5B in revenue, down just a bit down from the $16.6B recorded in 2011. With domestic sales gains hard to come by, toy makers Hasbro (HAS +0.9%) and Mattel (MAT +0.6%) continue to look to global markets for growth or by creating new products which interact with mobile devices. LeapFrog (LF +1.6%) ended the year with 3 of the 4 hottest sellers.
Thanks. We also may be a takeover candidate as I am sure you are well aware of, so either way, it is a very interesting stock to own and a solid company.
same back at you. And hopefully, there is other stuff LF has in the works they aren't advertising to keep ahead of the competition for a nice surprise.
Yes,I agree. If we break the $12 target they gave, I believe in my opinion, that we will break away and it should get to $15. Or maybe even higher, but I guess let's see what the next earnings report looks like.
Good luck.
LOL, the pps rarely moves in the direction the analysts bark, especially the same day. Built on the posted financials, which don't take into consideration disasters, new contracts and products that have been kept under wraps, or even investor's moods. Look at Linked In. Until a few days ago, analysts always screamed it wasn't worth the pps. Finally one gave it a for-real decent p/t. Amazing. They only do p/ts to try and drive the pps anyway, there's nothing non-biased about it.
I would take $12, but $15 is my target.
Monness, Crespi, Hardt starts LeapFrog (NYSE: LF) at Buy and price target of $12.
LeapFrog + Schoolastic (+++)
LeapFrog Launches New Developer Program For Award-Winning Platforms With Exclusive Interactive Games Produced By Scholastic
Today : Wednesday 9 January 2013
EMERYVILLE, Calif., Jan. 9, 2012 /PRNewswire/ -- LeapFrog Enterprises, Inc. (NYSE:LF), the leader in educational entertainment, today announced a new program to allow external developers to create interactive games and apps for its award-winning learning platforms. This new program will start with the release of exclusive interactive games from Scholastic, the global children's publishing, education and media company. "Clifford's Rhyme Race" and "The Magic School Bus Dino Shuffle" were developed and produced by Scholastic solely for LeapFrog and are now available for purchase in the "Games" section of the LeapFrog App Center for the kids' learning tablets, LeapPad1™ and LeapPad2™, and learning video game systems, Leapster Explorer™ and LeapsterGS™.
"We are thrilled to make our base of millions of connected platforms available to the vast number of talented independent content developers and gaming studios around the world," said Greg Ahearn, chief marketing officer at LeapFrog. "Scholastic has been a long time partner and we are excited they took the opportunity to develop new games and apps exclusively for LeapFrog. Working closely with our highly experienced team of educational experts , these truly unique and engaging games are age-appropriate and introduce key skills such as reading, writing, social studies and science. We believe that the combination of education, creativity and great game play from Scholastic and LeapFrog will continue to produce exclusive development projects that provide the best selection of educational entertainment to kids."
The all-new interactive games, "Clifford's Rhyme Race" and "The Magic School Bus Dino Shuffle," are now available in the LeapFrog App Center. In "Clifford's Rhyme Race" kids will rhyme with Clifford The Big Red Dog as they navigate fun mazes, learn rhyming words, develop logic skills and collect lost packages. "The Magic School Bus Dino Shuffle" introduces kids to everything they want to learn about dinosaurs in a game focused on social studies and science. Kids will also test their dinosaur knowledge in two fast-paced games, Quick Quiz and Skeleton Memory.
"We are delighted to once again offer children and families quality interactive learning experiences for LeapFrog's award winning platforms," said Leslye Schaefer, Senior Vice President of Marketing & Consumer Products for Scholastic Media. "These new games are welcome additions to the highly successful Scholastic library of titles that deliver educational and entertaining content."
The new games join LeapFrog's vast library of learning games, eBooks, videos, music and more that have been developed and approved by LeapFrog's highly experienced team of educational experts.
Availability
"Clifford's Rhyming Race" and "The Magic School Bus Dino Shuffle" games are available for purchase (MSRP $7.50, for children four to nine years) in the LeapFrog App Center. The LeapFrog App Center can be accessed through the LeapFrog Connect Application for LeapPad1, LeapPad2, Leapster Explorer and LeapsterGS.
For more information on LeapPad1, LeapPad2, Leapster Explorer, LeapsterGS and other LeapFrog products, visit www.leapfrog.com.
About LeapFrog
LeapFrog Enterprises, Inc. is the leader in educational entertainment for children. LeapFrog's award-winning product portfolio helps millions of children achieve their potential by delivering best-in-class curriculum through engaging content, fun multimedia learning platforms and toys. The Learning Path, LeapFrog's proprietary online destination for parents and extended family, provides personalized feedback on a child's learning progress and offers product recommendations to enhance each child's learning experience. Through the power of play, LeapFrog's products and curriculum help children of all ages prepare for school and life success. LeapFrog's products are available in more than 45 countries and have been used by teachers in more than 100,000 U.S. classrooms. LeapFrog is based in Emeryville, California, and was founded in 1995 by a father who revolutionized technology-based learning solutions to help his child learn how to read. Come see the learning at www.leapfrog.com.
TM & © 2012 LeapFrog Enterprises, Inc. All rights reserved.
About Scholastic
Scholastic Corporation (NASDAQ: SCHL) is the world's largest publisher and distributor of children's books and a leader in educational technology and related services and children's media. Scholastic creates quality books and ebooks, print and technology-based learning materials and programs, magazines, multi-media and other products that help children learn both at school and at home. The Company distributes its products and services worldwide through a variety of channels, including school-based book clubs and book fairs, retail stores, schools, libraries, on-air, and online at www.scholastic.com.
MEDIA CONTACTS
Monica Ma
LeapFrog
510-596-3437
mma@leapfrog.com Meghan Newton
Goodman Media for Scholastic Media
212-576-2700
Scholastic@goodmanmedia.com
SOURCE LeapFrog Enterprises, Inc.
Copyright 2012 PR Newswire
LF: "3 Stocks Defying the Dow's Cliff-Dive": LeapFrog Entertainment (NYSE: LF ) jumped more than 4%. The maker of educational toys has been riding high on the back of its LeapPad 2 tablet, and even though the company has seen some competition from Toys R Us, its strong reputation and first-mover status give it fundamental strength that more than justifies its quite reasonable earnings multiple.
http://www.fool.com/investing/general/2012/12/28/3-stocks-defying-the-dows-cliff-dive.aspx
The Wild Card Pick: LeapFrog (LF)
http://finance.yahoo.com/blogs/breakout/two-sectors-stock-pick-2013-132859976.html
Here's your wildcard stock and it's a doozy. As most parents know LeapFrog makes educational toys and devices for kids. The company has been a constant through all the changes in handheld devices since 1995 when it was founded. Its LeapPad tablet device actually teaches kids something, putting the stock in prime position to rise, according to Kilburg.
This makes them one of the few device makers with largely undeveloped competition in the kid arena.
We like LeapFrog (LF) because it:
Is gaining market share
Has significant optionality, with several initiatives that could make this not just a double, but a multi-bagger
Has a cash-rich/debt-free balance sheet and NOLs that create a substantial margin of safety
Would be extremely accretive to multiple potential acquirers
Trades at a low multiple, under 10x consensus 2012 EPS of $0.83
we expect EPS to ultimately be closer to $1.00
Consistently beats analyst estimates (7 consecutive quarters) and should do so again in 4Q
Has had widespread insider buying.
http://seekingalpha.com/article/1083261-leapfrog-shares-could-double-in-2013?source=yahoo
LF to double article: http://seekingalpha.com/article/1083261-leapfrog-shares-could-double-in-2013?source=yahoo
LeapFrog (LF) is exactly the type of stock we love. It's cheap, has optionality that could create meaningful upside, is gaining significant market share, has an underappreciated margin of safety, and with significant short interest, is not uniformly loved by the street. Given the company's significant insider buying, outstanding track record over the last 2 years - including 7 consecutive earnings beats - we are shocked shares currently trade at $8.03 and have experienced a recent spike in short interest. With $3+ in projected cash per share at the end of 1Q and $4 of NOLs per share based on NPV value (we have not seen this mentioned in sell-side reports), we see limited downside. We believe shares should double or more, over the next 12 months, and would not be surprised by a positive 4Q earnings preannouncement.
When we first wrote a bullish piece about LeapFrog last January, shares were trading at $5.57. Since then, they more than doubled to a high of $12.28, but have since pulled back to $8.03 - a 44% gain. Our thesis at the time was that LeapFrog's LeapPad tablet represented a game changer, with LeapFrog having identified and claimed the educational/entertainment tablet segment for ages 3-9. Further, like Apple (AAPL), it had the potential to create an ecosystem with strong IP/content partners and high margin apps. To date, this thesis is playing out ahead of our expectations.
As we assess LeapFrog today, we think it's a compelling story. Specifically, we like LeapFrog because it:
Is gaining market share
Has significant optionality, with several initiatives that could make this not just a double, but a multi-bagger
Has a cash-rich/debt-free balance sheet and NOLs that create a substantial margin of safety
Would be extremely accretive to multiple potential acquirers
Trades at a low multiple, under 10x consensus 2012 EPS of $0.83 - we expect EPS to ultimately be closer to $1.00
Consistently beats analyst estimates (7 consecutive quarters) and should do so again in 4Q
Has had widespread insider buying.
We detail several of these points below.
LeapFrog is Gaining Significant Market Share
LeapFrog's revenue is up 37% y/y through the end of 3Q, in the backdrop of a toy industry that has seen revenues decline versus 2011. There has been an ongoing shift from traditional games and toys toward tablets.
We believe LeapFrog has achieved a truly extraordinary accomplishment in what they have done in the tablet market. They have established a clear identity in the market by defining themselves as the educational/entertaining tablet platform for ages 3-9. The magnitude of this accomplishment should not be underappreciated. When we look at Microsoft's (MSFT) Surface, Amazon's (AMZN) Kindle or Barnes and Noble's (BKS) Nook, we wonder what their consumer proposition is. Originally the Kindle and Nook existed as outstanding e-readers. Now, other than lower price, it is hard to identify why a consumer would choose Kindle or Nook versus Apple's iPad. Apple has created a perception, some would say undeserved, of a superior, more innovative product, with a better ecosystem. Similarly, in its niche, LeapFrog has become the de facto leader - and with over 325 apps from dozens of partners that now include Disney (DIS) and Hasbro (HAS), LeapFrog is developing an ever expanding ecosystem.
To put it in perspective, by our estimates, Microsoft's 2013 Surface sales are likely to be lower than LeapFrog's LeapPad 2 sales - despite the fact that Microsoft is spending $400 million on Surface advertising, almost 20 times LeapFrog's entire annual advertising budget.
Optionality
While LeapFrog is enjoying strong organic growth, we believe there are several things that could materially accelerate their story.
LeapFrog has announced a partnership with Lionsgate to release 4 films starting in 2014. While it is unclear precisely what will develop from this, the move into content creation offers asymmetric possibilities - with limited cost and risk, while potentially becoming a large new profit center.
In addition, while the LeapPad 2 is growing significantly, LeapFrog is not stagnating. Just like the LeapPad 2 quickly replaced the original LeapPad, it appears that LeapFrog has something exciting in the works in 2013
"And as we sit and looked at it, we got a couple of things we're working on that we're investing some money on for the future. But we're really excited, and you guys will see all of those when we launch them in April of next year."
Source: LeapFrog CEO John Barbour, 3Q earnings conference call
Finally, the development of the LeapPad 2 ecosystem creates very exciting possibilities. The more the ecosystem develops, the more insulated LeapFrog becomes from emerging competition. Further, the more LeapFrog may look like a software company, with expanding margins and better cash cycle dynamics.
Excellent balance sheet - could support buyback - and significant NOLs
Superficially, LeapFrog does not appear to be a cash rich company - at least at the end of 3Q. However, LeapFrog operates in a highly seasonal business, and we believe the best metric to measure continued cash improvement is by analyzing growth in working capital - or looking at quarters on a y/y basis. Given the expected growth in cash, we believe at these levels, a share repurchase program would be compelling and could be instituted in 1Q.
As of the end of 3Q, LeapFrog had $49 million of cash, almost $217 million in working capital, and no debt, versus $25 million and $150 million of working capital in the same period a year earlier. In 4Q 2011, LeapFrog used $35 million of its $75 million credit facility to support growth, whereas management said it would not need its credit facility this year. Given the extreme seasonality of LeapFrog's operations, cash peaks in 1Q as receivables are collected and inventory is low. For example, at the end of 1Q 2012, LeapFrog had almost $135 million of cash. By our estimates, at the end of 1Q 2013, cash is likely to exceed $210 million - over $3 of cash per share. We believe that in 1H 2013 LeapFrog will be in a position to announce a $50-$75 million share buyback (approximately 10% of shares outstanding), should shares remain significantly undervalued.
LeapFrog 4 quarters trailing balance sheet
(click to enlarge)
Source: Yahoo Finance
In addition to its cash, LeapFrog also has significant NOLs. We calculate the NPV of NOLs based on LeapFrog's 2011 10-K which indicates that at the end of 2011 the company had $202 million of Federal net operating loss carryforwards, and $220 million on the state level. Considering the profits in 2012 and the allowed usage based on the IRS 382 limitation, by our estimates, the NPV of the amount of NOLs usable by an acquirer is approximately $4 per share - in the event LeapFrog remains standalone the value is closer to $5.
(click to enlarge)Source: LeapFrog 2011 Form 10-K
In total, between its cash and the value of its NOLs, we believe LeapFrog's downside is $7+. Since we have not seen NOLs discussed in sell-side research, the significant upcoming cash balance or the potential for buybacks, we believe short sellers must be missing these points as we are mystified as to what they're playing for.
Attractive to acquirers
We believe LeapFrog would make a very attractive bolt-on acquisition to several acquirers. Specifically, we think both Hasbro and Mattel (MAT) would be very interested in LeapFrog.
According to leading toy industry analyst Sean McGowen of Needham, discussing current toy industry dynamics with The Financial Times, "The top two guys, Mattel and Hasbro, they are terrified. They should be terrified, but the official party line is they're not terrified."
Neither Hasbro nor Mattel has an entry in the tablet space. To develop, advertise, find partners, and take share could be a long, costly and uncertain process.
By our estimate, LeapFrog will have approximately $70 million of operating income in 2012, and $160-$170 million of operating expenses. We estimate that approximately $40 million of op-ex could be eliminated in an acquisition - duplicative executive management, headquarters, sales operations, accounting/audit/public listing, etc. We believe realistically a buyer could expect $110 million in "normalized" trailing operating income. In addition, top-line would likely continue to enjoy rapid organic growth in 2013 and benefit from a broader sales capability. We think a buyer could easily pay 8x "normalized" operating income, or $880 million (approximately $13 per share). In addition, the buyer would buy $3 per share in cash and $4 of NOLs. Therefore we think LeapFrog could be acquired for $19-$20.
Consistently beats estimates
According to Zacks research, LeapFrog has now exceeded analyst earnings estimates 7 quarters in a row. We expect this pattern to continue in 4Q as well. Management guided full year revenues of $535-$550 million, implying 4Q revenues of $198-$213 million. The street is at $217 million and $0.47 (3Q was $0.60, including approximately $0.08 of tax benefits). Revenues of $217 million represents a deceleration to 12% y/y growth versus the 37% y/y growth achieved through the first 9 months. While management cited the potential for some pull-in into 3Q on its 3Q earnings call negatively impacting 4Q, we think they were being quite conservative - especially considering the magnitude of recent earnings beats. Management also attributed caution about the economy in providing 4Q guidance. At the same time, they noted that they had a far stronger inventory position than 2011 to service upside, should there be upside demand.
Looking at LeapFrog's year-to-date results is striking. When they reported 4Q11 results they guided 6-8% y/y revenue growth and EPS of $0.40-$0.45. After 3Q12 their full-year guidance stood at 18-21% y/y revenue growth and EPS of $0.75-$0.81. Not only has LeapFrog beaten, they continuously revised higher by a significant magnitude.
We think any 4Q caution from management has proved unwarranted as all evidence points to the LeapPad 2 being virtually sold out throughout the holiday season despite higher initial inventory and a supply chain far more prepared to replenish inventory.
Despite constant restocking, the top selling green LeapPad 2, and pink LeapPad 2 princess bundle was unavailable at Walmart (WMT) on December 22nd.
(click to enlarge)Source: Walmart Website 12/22/12
In addition, the pink was sold out and no longer listed on the LeapFrog website and the green was limited to 2 per purchase because of demand.
(click to enlarge)
Source: LeapFrog Website
Whether at Target (TGT), Amazon, Toys R Us, or elsewhere, the LeapPad 2 has been consistently sold out. An exploration of top education or learning toys on Amazon was filled with a wide variety of LeapFrog products throughout 4Q.
In addition, momentum appears robust internationally as well, including in the UK, where the LeapPad 2 was the number 1 selling tablet device in early December.
Unquestionably, LeapFrog continues to enjoy substantial business momentum. We believe 4Q revenues could approach $240-$250 million and EPS could be $0.60-$0.65, resulting in full year EPS of approximately $1.00.
Widespread insider buying
Over the last 6 months there has been widespread insider buying. Notably, following 3Q earnings in early November, CEO John Barbour, CFO Arthur Raymond and Chief Marketing Officer Greg Ahearn purchased, 15,000, 12,600, and 6,570 shares, respectively. In addition, Board directors Owen Rissman and Stanton McKee bought 50,000 and 25,000 shares respectively. In fact, since July 9, other than a sale of 50,000 shares by Board member Thomas Kalinske in August at $11.60, there has been consistent buying - including 10,000 shares by Arthur Raymond at $10.35 on August 3rd. Any other sales were to pay taxes associated with option exercises. Clearly management and the Board appear quite confident regarding the company's prospects.
Consistent Insider Buying
(click to enlarge)
Source: Nasdaq.com
Growing short interest
In recent months, LeapFrog's short interest has grown dramatically, from 2 million shares in July, to 11 million shares on November 30th.
We are mystified as to the reason for this sharp increase in short interest. While we are well aware of the many toy, gaming, and electronics companies that have gone out of business over the years, and the potential for fad products, we think the shorts are getting it wrong. We have already covered LeapFrog's accelerating momentum and an expanding ecosystem. However we think the shorts are taking a static view of the balance sheet. With cash likely to exceed $3 per share at the end of 1Q and $4 per share of NOLs, we don't know what shorts are playing for. We see no more than $1 of downside and the potential for a buyout anytime at 2x the current price, in a transaction that would be accretive for the buyer.
Source: Nasdaq.com
Conclusion
We believe shares of LeapFrog will double (or more) in 2013. LeapFrog has numerous leading educational products, but clearly LeapPad is the key growth driver. We are aware that the fortunes of a hot toy can change quickly - which is probably the main thesis among shorts - but having successfully defined their tablet, we see LeapFrog's growth prospects as exceptionally solid - especially considering the secular interest and growth in tablets. In our view, upside significantly outweighs the risk, with downside protected by cash and NOLs.
In our view, the biggest near-term risk is simply that LeapFrog will provide conservative 2013 guidance when they report 4Q. We believe they may guide to 5-8% revenue growth and $1.05-$1.15, versus our expectation of $1.50 in 2013 and versus $1.00 for 2012 - street is at $0.83 for 2012 and $0.84 for 2013.
In our opinion, 2013 EPS is likely to be at least $1.50 which may seem like a significant variance from potential guidance and the current street estimate. However, recall that LeapFrog guided 2012 to be $0.40-$0.45 and the Street now sits at $0.83 - on revenue only 12% (approximately $50 million) higher than original guidance. This model has tremendous leverage, and we expect the company to continue to under promise and meaningfully over deliver. We would not be surprised to see LeapFrog acquired at a huge premium. Should they continue as a standalone, we believe that 12 months from today shares should sit at 10x-15x 2013 EPS of $1.50, or $15-$22.
Additional disclosure: We conduct thorough research on our ideas, but our views are our own. Please do your own research.
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LF: "It has beaten analyst estimates in 10 consecutive quarters; yet its stock price flounders around $8 per share. LeapFrog had a tremendous 2012 and 2013 looks no different. Its earnings per share are expected to grow 20% per annum for the next five years. If it achieves this growth rate, it should deliver $1.87 per share in earnings in fiscal 2017. That's a forward P/E of 4.2, far lower than either Mattel (Nasdaq:MAT) or Hasbro (Nasdaq:HAS), where both companies have an earnings growth rate that is half LeapFrog's.
Mattel's botched purchase of The Learning Company for $3.5 billion in 1999 is considered one of the worst M&A deals in U.S. history. Although this makes the world's largest toy company an unlikely candidate to go after LeapFrog, I have to believe it has a better understanding of what it would be buying a second time around. More than a decade later, educational toys utilizing electronics are hotter than ever. This acquisition is potentially as important as Mattel's purchase of Fisher Price was back in 1993."
Read more: http://www.investopedia.com/stock-analysis/2012/possible-acquisitions-for-2013-lf-beam-mnst-ko1224.aspx#ixzz2FzVGvYTe
LF: "big run in LeapFrog in 2013." http://www.fool.com/investing/general/2012/12/19/3-stocks-to-get-on-your-watchlist-12.aspx
LeapFrog Enterprises (NYSE: LF )
If there's anything I've learned over my years of following retailers, it's that people have very few limits when it comes to spending for their pets or their children. That's why I feel LeapFrog Enterprises, the company behind the $100 LeapPad educational tablet for kids, could be a steal of a deal this Christmas.
One of LeapFrog's biggest challenges throughout the years had been its business cyclicality. The LeapPad is a cyclically independent product that's going to help push this company beyond just its traditional retail business. LeapFrog's management also has plans to transform the next-generation LeapPad 2 from just a learning tablet to an almost iPad-like device through which children (and their parents) can download educational apps, providing an even greater source of revenue for LeapFrog and locking in customers for life.
As the Fool's Rich Duprey notes, LeapFrog isn't without its own set of challenges as Toys R Us' Tabeo tablet has crept into the marketplace, powered by Google's (NASDAQ: GOOG ) Android operating system. But as Rich also opines, the simple fact that the Tabeo has Internet access is one reason enough why parents may shun the tablet in favor of the LeapPad 2. With an expected five-year growth rate of 20% and a forward P/E of less than 10, I have to think there's a good chance for a big run in LeapFrog in 2013.
Plus lots of INSIDER BUYS in November
IMO a great stock to own or as the article says "get on your watchlist"
Happy holidays to all.
Ray
LF: insiders in Nov. buy 3/4 million $$ worth
Nov 18, 2012 AHEARN GREGORY BOfficer 6,570 Direct Purchase at $7.60 per share. 49,932
Nov 15, 2012 MCKEE E STANTON JRDirector 25,000 Direct Purchase at $7.16 per share. 179,000
Nov 14, 2012 BARBOUR JOHNOfficer 15,000 Direct Purchase at $7.23 per share. 108,450
Nov 13, 2012 ARTHUR RAYMOND LOfficer 10,000 Direct Purchase at $7.69 per share. 76,900
Nov 11, 2012 ARTHUR RAYMOND LOfficer 2,607 Direct Purchase at $7.66 per share. 19,969
Nov 8, 2012 RISSMAN OWEN RANDALLDirector 25,000 Direct Purchase at $8.27 per share. 206,750
Nov 7, 2012 RISSMAN OWEN RANDALLDirector 25,000 Direct Purchase at $8.18 per share. 204,500
TAKEOVER TALK AGAIN: (NYSE: LF) "That's right, a possible takeover make be in the works for Mattel. Here's why: LeapFrogs is only worth $560 million and trades compellingly at 10x. Better yet, the target has no long-term debt on the balance sheet and can be paid off easily through growth alone, as evidenced by the incredible 0.5 PEG ratio. The maker of educational toys has struggled in recent years and would be in a more desperate position to sell itself. In early August, one analyst put out a "strong buy" report that increased the price target from $13 to $15--almost double the current valuation. This gives Mattel strong room to negotiate that offers LeapFrog shareholders a solid premium while allowing the Barbie maker upside from the value discount plus added synergies. It also fits well with the company's attempt on "merg[ing] the physical and digital toy landscape" with new technology, such as the iPad--LeapFrog has a reputation for interactive toys."
http://beta.fool.com/takeoveranalyst/2012/12/12/2-excellent-high-performing-consumer-stocks/18733/?ticker=LF&source=eogyholnk0000001
LeapFrog's Award-Winning LeapPad 2™ is #1 Selling Tablet and #1 Toy in the UK
EMERYVILLE, Calif., Dec. 10, 2012 /PRNewswire/ -- LeapFrog Enterprises, Inc. (NYSE:LF), the leader in educational entertainment, today announced LeapPad2™ as the #1 selling tablet and #1 toy in the UK, according to recent NPD data (NPD, YTD Week 45 2012).
(Logo: http://photos.prnewswire.com/prnh/20090219/LFLOGO)
"LeapPad2 is a global phenomenon that continues to experience strong momentum as we head into the holiday season," said Greg Ahearn, chief marketing officer at LeapFrog. "Parents, kids and teachers around the world have all recognized LeapPad2 as a best-in-class learning solution with an extensive library of learning games, eBooks, videos, music and more, all developed and reviewed by our highly experienced learning team. LeapFrog's performance in the UK is a testament of our commitment to being the world's leader in educational entertainment for kids."
LeapFrog is the fastest growing toy company in the UK in the top ten with impressive growth of 33 percent year over year by value of goods sold. Worldwide, LeapPad2 has won more than 67 industry and parenting awards and is now the #1 tablet in the UK market and the #1 UK toy by value (NPD, YTD Week 45 2012).
About LeapPad2
LeapPad2 offers kids more engaging learning experiences than ever before. New features include front-and-back cameras and video recorders, a faster LF 2000 processor and double the on-board memory of LeapPad1™ (4GB), all wrapped in a high-tech styled kid-tough tablet design. LeapPad2 also has improved battery life and is compatible with a recharger pack, available separately (MSRP $99.99, ages 3 to 9 years).
For more information on LeapPad2, visit www.leapfrog.com/leappad2
About LeapFrog
LeapFrog Enterprises, Inc. is the leader in educational entertainment for children. LeapFrog's award-winning product portfolio helps millions of children achieve their potential by delivering best-in-class curriculum through engaging content, fun multimedia learning platforms and toys. The Learning Path, LeapFrog's proprietary online destination for parents and extended family, provides personalized feedback on a child's learning progress and offers recommendations to enhance each child's learning experience. Through the power of play, LeapFrog's products and curriculum help children of all ages prepare for school and life success. LeapFrog's products are available in more than 45 countries and have been used by teachers in more than 100,000 U.S. classrooms. LeapFrog is based in Emeryville, California, and was founded in 1995 by a father who revolutionized technology-based learning solutions to help his child learn how to read. Come see the learning at leapfrog.com.
LF: "LeapFrog is an ideal takeover target". "LeapFrog is the right investment to make. It trades at only 10.7x past earnings and a PEG ratio of 0.55x. There is an absence of long-term debt on the balance sheet, which is a bright spot in the relatively highly leveraged toy & game industry. Moreover, analysts forecast 19.5% annual EPS growth over the next five years, which is well above the 11.9% industry average.
Perhaps most excitingly, LeapFrog is an ideal takeover target. With a valuation of just $600 million, the maker of educational toys could be easily bought out by toy producers, like Hasbro and Mattel, that are seeking faster growth and more diversified product portfolios. The greater marketing spend of these larger producers could also generate meaningful revenue synergies in the process. Their substantial free cash flow generation would also make financing a takeover relatively cheap. Given that LeapFrog more than doubled in the last 12 months alone, it is safe to say that Mattel or Hasbro missed an opportunity earlier. With that said, LeapFrog is at an even more compelling multiple today. Let's hope Mattel or Hasbro will seize the moment and drive fantastic return for current LeapFrog shareholders."
http://beta.fool.com/takeoveranalyst/2012/12/09/holiday-toy-stock-roundup-good-bad/18460/?ticker=LF&source=eogyholnk0000001
You are welcome and thanks again for that article.
LF is a SOLID company.
Good luck.
Ray
GREAT LF article.
A Hot Christmas Item To Make Your Portfolio Leap Ahead
http://seekingalpha.com/article/1040921-a-hot-christmas-item-to-make-your-portfolio-leap-ahead?source=yahoo
LF #1 as America Names LeapPad2™ A Top Holiday Pick In Time to Play's 'People's Play Awards'
EMERYVILLE, Calif., Nov. 30, 2012 /PRNewswire/ -- LeapFrog Enterprises, Inc. (LF), the leader in educational entertainment, today announced LeapPad2™ was the top voted item in the Educational Toys category of the prestigious Time to Play "People's Play" Awards. LeapPad2, the next generation of the #1 kid's learning tablet, was nominated among hundreds of holiday favorites.
The Time to Play "People's Play" Awards recognize the hottest and most popular toys of the holiday season. Winning products create "America's Wish List," a compilation of favorite toys of the year as voted by consumers across the country. Every product on the "People's Play" awards ballot is carefully reviewed and selected by the Time to Play editorial team of industry experts and veterans.
"LeapFrog has done it again this holiday season with a solid line-up of learning solutions particularly with their popular kid's tablet, LeapPad2," said Jim Silver, editor-in-chief of TimetoPlayMag.com. "LeapPad2 was a runaway 'People's Play Award' winner, the consumers overwhelmingly voted this tablet their favorite new item in the Educational Toy category. With a durable and kid-friendly design and a learning library of terrific content experiences, it will continue to be in high-demand this holiday."
"It is a tremendous honor to win the hearts of Americans and have LeapPad2 selected as one of the most wanted toys this holiday," said John Barbour, chief executive officer at LeapFrog. "We strive to create products that offer compelling learning experiences, and winning the 'People's Play Award' is a testament of parents' trust in the quality of learning and entertainment LeapPad2 provides. Our team of learning experts has developed and reviewed our entire content library – whether a game, eBook, video or song – to ensure kids will be learning and having fun."
Yes, LF is the leader and should stay there IMO.
Thanks. I figure they will continue to grow and quickly. Parents got to have those tech toys but can handle the abuse by toddlers and up. I don't see Toys R Us launching their own to put a huge dampener on LF, since they're ahead of the game here.
GREAT stock! $14 is my 1 year target. Good luck
LeapFrog Learning Products Awarded The National Parenting Center's Seal Of Approval
EMERYVILLE, Calif., Nov. 28, 2012 /PRNewswire/ -- LeapFrog Enterprises, Inc. (NYSE:LF), the leader in educational entertainment, today announced five LeapFrog products won The National Parenting Center's highly coveted 2013 Seal of Approval. The next generation of the #1 kid's learning tablet, LeapPad2, the educational handheld video game system, LeapsterGS, the interactive Tag Get Ready for Kindergarten book for the #1 selling Tag™ Learn to Read System and the touch-enabled Touch Magic Learning Bus and Counting Train toys were all recipients of the prestigious seal.
(Logo: http://photos.prnewswire.com/prnh/20090219/LFLOGO)
Since 1998, LeapFrog has won more than 75 Seals of Approval from The National Parenting Center, exceeding any other educational entertainment company. Testers with The National Parenting Center are comprised of parents and educators who identify the best products for parents in search of age-appropriate and engaging toys.
"LeapFrog's superb lineup of educational entertainment continues to connect with both parents and children. Parents tell us that with LeapFrog they trust their kids are staying entertained as they learn," said David Katzner, president and general partner of The National Parenting Center. "LeapPad2, LeapsterGS, the Tag Get Ready for Kindergarten book and the Touch Magic Learning Bus and Counting Train were further examples of the ingenious design and forward thinking of the LeapFrog team. Products were commended for encouraging imagination, creativity and both independent and interactive play. Year after year our parent testers are impressed and enthusiastic about LeapFrog's product line."
"The National Parenting Center is a well-regarded foundation by parents and we are honored that five of our top products have received such high recognition with their Seal of Approval," said John Barbour, chief executive officer at LeapFrog. "Our in-house team of educational experts are involved in the development and review of our learning solutions to ensure each experience is packed with quality learning, whether on a tablet, while playing a video game, reading an interactive book or exploring a touch-enabled toy. Winning this seal is a testament of our efforts to deliver top educational entertainment to every child."
About LeapPad2
LeapPad2 offers kids more engaging learning experiences than ever before. New features include front-and-back cameras and video recorders, a faster LF 2000 processor and double the on-board memory of LeapPad1™ (4GB), all wrapped in a high-tech styled kid-tough tablet design. LeapPad2 also has improved battery life and is compatible with a recharger pack, available separately (MSRP $99.99, ages 3 to 9 years).
About LeapsterGS
LeapsterGS, the newest addition to the award-winning Leapster® family, is a revolutionary new handheld video gaming system that offers fast-action gameplay packed with rich learning in a sleek and kid-tough design. LeapsterGS keeps kids engaged in learning by putting them in charge of the action with updated features including motion-based play, a built-in camera and video recorder and kid-friendly controls (MSRP $69.99, ages 4 to 9 years).
About Tag Get Ready for Kindergarten
Tag Get Ready for Kindergarten is an interactive book designed to introduce nearly 40 essential kindergarten skills using the #1 selling Tag Learn to Read System. It includes a broad range of curriculum including science, social studies, early number sense, comparing sets, phonics and more. The Tag library features more than 80 interactive books, puzzles, maps and more, organized by series: Get Ready to Read, Early Reading, Read on Your Own and Learn Through Reading. Tag Get Ready for Kindergarten is part of the Learn Through Reading series which is designed to help kids apply critical reading skills to explore topics like science, geography, writing and more (MSRP $13.99, ages 4 to 8 years).
About Touch Magic
Touch Magic™ is a new line of interactive toys that encourage learning and exploration through intuitive touch technology. These unique touch-enabled toys bring colorful graphics and popular kid themes together to deliver a fun, interactive experience. Touch Magic was developed with LeapFrog's learning experts to ensure the curriculum is age-appropriate for preschoolers. The Touch Magic line introduces early literacy, musical creativity, numbers and early vocabulary. The launch portfolio includes Touch Magic™ Learning Bus, Touch Magic™ Counting Train, Touch Magic™ Rockin' Guitar and Touch Magic™ Discovery Town (MSRP $21.99, ages 2 years and up).
LeapPad 2™ Scores High Marks In Toy Industry Winning Nearly Two Dozen Awards Worldwide
EMERYVILLE, Calif., Nov. 21, 2012 /PRNewswire/ --LeapFrog Enterprises, Inc. (NYSE:LF), the leader in educational entertainment, today announced LeapPad2 was the most recognized kid's tablet of the year leading into the all-important holiday season. LeapPad2 was selected as a top toy by more kid, parenting and industry experts and retailers than any other kid's tablet, receiving 20 awards from prestigious U.S. organizations including the Dr. Toy, Oppenheim Toy Portfolio, Parents' Choice Foundation and Time to Play, among many more, and key awards in the UK and Canada.
(Logo: http://photos.prnewswire.com/prnh/20090219/LFLOGO)
LeapPad2 continues to win multiple industry awards and top major retailer lists, and be recognized as the must-have quality educational tablet that offers best-in-class learning. Consumer reviews on top e-commerce sites rate LeapPad2 4.5 stars and feedback on social sites including Facebook tout LeapPad2 as a breakthrough tablet for kids.
"LeapPad2 is an exceptional kid's tablet and we are very proud of the positive recognition it has received around the world," said John Barbour, chief executive officer at LeapFrog. "Last year we launched LeapPad1, the hottest kid's product of the year and most sought-after toy during the holidays, and we are doing it again this year with LeapPad2. With hours of learning fun for kids and a library filled with top-quality educational entertainment designed and approved by our team of educational experts, kids, parents, educators and industry veterans all agree that LeapPad2 is the best educational product to hit the market this year."
Since launching in August, LeapPad2 has been in high-demand and has proven to be one of the hottest products for kids this year.
U.S. awards for LeapPad2 include:
"10 Best Children's Software/Hi Tech," Dr. Toy
"100 Best Children's Products," Dr. Toy
"Gold Winner," National Parenting Publication Awards
"Platinum Award," Oppenheim Toy Portfolio
"Preschool Toy of the Year," Parents Magazine
"Recommended Award," Parents' Choice Foundation
LeapPad2 has topped respected industry lists including Time to Play's "Most Wanted" holiday list and The Toy Insider's "Hot 20" list. Both predict the most in-demand toys for the 2012 holiday season. LeapPad2 was also named on all major retailer holiday lists such as Toys"R"Us' "Fabulous 15," Walmart's "Top 20," Kmart's "Fab 15" and Amazon's Holiday Toy List.
LeapPad2's prestige spans the globe and is highly regarded internationally. The U.K. Toy Retailers Association included the learning tablet on its highly acclaimed "Dream Dozen" toy list.
LeapPad2's international recognition:
"Best Bet Awards," Canadian Toy Testing Council (Canada)
"Bronze Award for Best Electronic Toy," Independent Toy Awards (UK)
"Overall Winner and Electronic Toy," Mums Choice Awards (UK)
"Gold Award Electronic Toys and New Technology," Practical Preschool Awards (UK)
"Overall Winner for Electronic Toy," Rainbow Awards (UK)
"Overall Winner for Best Electronic Toy," Toy Talk (UK)
About LeapPad2
LeapPad2 offers kids more engaging learning experiences than ever before. New features include front-and-back cameras and video recorders, a faster LF 2000 processor and double the on-board memory (4GB), all wrapped in a high-tech styled kid-tough tablet design. LeapPad2 also has improved battery life and is compatible with a recharger pack, available separately.
About the LeapFrog Learning Library
LeapPad2 has an extensive library of hundreds of games, eBooks, videos, music and more that are carefully designed and approved by LeapFrog's highly experienced team of educational experts. These include a combination of LeapFrog's top quality educational entertainment and engaging content from the biggest names in children's entertainment. LeapFrog's own learning content is grounded in the latest research and draws on a comprehensive curriculum that covers more than 2,500 skills across 100 skill categories.
Availability
LeapPad2 is sold at MSRP $99.99. It is recommended for children 3 to 9 years. Downloadable apps are priced at MSRP $5.00 and up and game cartridges at MSRP $24.99. LeapPad2 is now available at leapfrog.com, online and at major retailers in the U.S., Canada, UK and Ireland, and in other select other countries such as Australia, New Zealand, South Africa, Hong Kong, Singapore, Philippines, Korea, Thailand and other Asian countries later this year. The LeapFrog App Center can be accessed through the LeapFrog Connect Application for LeapPad2. For more information on LeapPad2, visit www.leapfrog.com/leappad2.
About LeapFrog
LeapFrog Enterprises, Inc. is the leader in educational entertainment for children. LeapFrog's award-winning product portfolio helps millions of children achieve their potential by delivering best-in-class curriculum through engaging content, fun multimedia learning platforms and toys. The Learning Path, LeapFrog's proprietary online destination for parents and extended family, provides personalized feedback on a child's learning progress and offers recommendations to enhance each child's learning experience. Through the power of play, LeapFrog's products and curriculum help children of all ages prepare for school and life success. LeapFrog's products are available in more than 45 countries and have been used by teachers in more than 100,000 U.S. classrooms. LeapFrog is based in Emeryville, California, and was founded in 1995 by a father who revolutionized technology-based learning solutions to help his child learn how to read. Come see the learning at leapfrog.com.
MEDIA CONTACTS
Monica Ma
LeapFrog PR
510-596-3437
mma@leapfrog.com
Kathryn Green
LeapFrog PR
510-596-3405
kgreen@leapfrog.com
SOURCE LeapFrog Enterprises, Inc.
LeapFrog's LeapPad 2™ and Leapster GS™ Nominated for Prestigious 2013 Toy of The Year Awards
EMERYVILLE, Calif., Nov. 19, 2012 /PRNewswire/ -- LeapFrog Enterprises, Inc. (NYSE:LF), the leader in educational entertainment, today announced that LeapPad2™ and LeapsterGS™ were selected among the hundreds of entries received by the Toy Industry Association for the 2013 Toy of the Year Awards. LeapPad2, the next generation of the #1 kid's learning tablet, was nominated in the categories of "Educational Toy of the Year," "Innovative Toy of the Year" and "Preschool Toy of the Year." LeapsterGS, the ultimate learning video game system, was also nominated for "Educational Toy of the Year."
(Logo: http://photos.prnewswire.com/prnh/20090219/LFLOGO)
Since the start of the Toy of the Year Awards in 2000, LeapFrog has been recognized multiple times by the Toy Industry Association for its best-in-class products, including three awards for LeapPad1, the #1 kid's learning tablet: "Educational Toy of the Year," "Preschool Toy of the Year" and the ultimate recognition of "2012 Toy of the Year."
"The Toy Industry Association's Toy of the Year Awards are one of the most prestigious programs of the industry, and we are honored to have two of our best learning products recognized for providing world-class educational entertainment," said John Barbour, chief executive officer at LeapFrog. "Consumers will help determine what products receive these great awards along with members of the industry, media and other toy experts. We are confident that the millions of LeapFrog parents and fans that have confidently put our solutions in their children's hands will vote for LeapPad2 and LeapsterGS. All of our products and our library of hundreds of learning games, eBooks, videos, music and more have been designed and approved by our highly experienced team of learning experts, and continue to be favorites among kids, parents, educators and industry veterans."
The Toy of the Year Awards program is the Toy Industry Association's annual event in support of the Toy Industry Foundation. Nominees are selected from the hundreds of submissions received by the Toy Industry Association. Winning products are selected based on popular votes from consumers, journalists and bloggers, retailers (mass and specialty) and members of the Toy Industry Association, and announced during the February awards ceremony in New York, marking the kick-off to the 110th annual American International Toy Fair.
Consumers can vote for LeapFrog beginning today through January 13, 2013 at www.toyawards.org. LeapFrog nominated products and categories are:
LeapPad2: Educational Toy of the Year
LeapPad2: Innovative Toy of the Year
LeapPad2: Preschool Toy of the Year
LeapsterGS: Educational Toy of the Year
About LeapPad2
LeapPad2 offers kids more engaging learning experiences than ever before. New features include front-and-back cameras and video recorders, a faster LF 2000 processor and double the on-board memory (4GB), all wrapped in a high-tech styled kid-tough tablet design. LeapPad2 also has improved battery life and is compatible with a recharger pack, available separately (MSRP $99.99, ages 3 to 9 years).
About LeapsterGS
LeapsterGS, the newest addition to the award-winning Leapster® family, is a revolutionary new video gaming handheld that offers fast-action gameplay packed with rich learning in a sleek and kid-tough design. LeapsterGS keeps kids engaged in learning by putting them in charge of the action with updated features including motion-based play, a built-in camera and video recorder and kid-friendly controls (MSRP $69.99, ages 4-9 years).
For more information on and availability of LeapFrog products visit www.leapfrog.com.
About LeapFrog
LeapFrog Enterprises, Inc. is the leader in educational entertainment for children. LeapFrog's award-winning product portfolio helps millions of children achieve their potential by delivering best-in-class curriculum through engaging content, fun multimedia learning platforms and toys. The Learning Path, LeapFrog's proprietary online destination for parents and extended family, provides personalized feedback on a child's learning progress and offers recommendations to enhance each child's learning experience. Through the power of play, LeapFrog's products and curriculum help children of all ages prepare for school and life success. LeapFrog's products are available in more than 45 countries and have been used by teachers in more than 100,000 U.S. classrooms. LeapFrog is based in Emeryville, California, and was founded in 1995 by a father who revolutionized technology-based learning solutions to help his child learn how to read. Come see the learning at leapfrog.com.
MEDIA CONTACTS
Monica Ma
Kathryn Green
LeapFrog PR
510-596-3437
510-596-3405
mma@leapfrog.com
kgreen@leapfrog.com
SOURCE LeapFrog Enterprises, Inc.
Copyright 2012 PR Newswire
LeapFrog banking on new devices to bounce back
By Miguel Helft, senior writer June 18, 2012: 8:30 PM ET
FORTUNE -- "You know the difference between this and an iPad," asks John Barbour, the convivial CEO of LeapFrog Enterprises. Barbour, a burly man of 53 with a thick Scottish accent, is holding a LeapPad, the educational company's made-for-kids tablet computer, which is playing the background tune to one of its learning games. Before I get a chance to say "what," Barbour flings the LeapPad at me as if it were a Frisbee.
I duck reflexively as the LeapPad misses the top of my head by just a few inches and crashes against the wall behind me, sending Barbour into a full-throated, good-natured guffaw. I turn to look at the LeapPad, which is intact and still playing the children's jingle, and notice a handful of gashes on the wall. Clearly Barbour has played this trick before. "That may not seem to be a big point," Barbour says after his "ha-ha-ha-ha-ha-ha" dies down. "That is a big point. You want me to try that with an iPad?"
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http://tech.fortune.cnn.com/2012/06/18/leapfrog/?source=yahoo_quote
Toys R Us loses marketing chief to LeapFrog
Mon, Jun 18 2012
By Dhanya Skariachan
http://www.reuters.com/article/2012/06/18/leapfrog-toysrus-ahearn-idUSL1E8HI2Y620120618?feedType=RSS&feedName=cyclicalConsumerGoodsSector&rpc=43
NEW YORK, June 18 (Reuters) - Educational toymaker LeapFrog Enterprises Inc named Toys R Us executive Greg Ahearn as its chief marketing officer effectively immediately, just months before the all-important holiday selling season.
Ahearn was most recently the chief marketing officer of Toys R Us, the world's largest specialty toy retailer. He has also worked at toymakers Hasbro Inc and Mattel Inc.
In his new position, Ahearn will be in charge of the LeapFrog brand globally with responsibilities including product marketing, licensing, content development and public relations. He will report directly to LeapFrog CEO John Barbour.
Peter Reiner, senior vice president of marketing at Toys R Us' U.S. division, who previously reported to Ahearn, is now leading the marketing function at the retailer, company spokeswoman Kathleen Waugh said in an e-mail to Reuters.
The holiday season is very important to toy companies as many of them make more than one-third of their annual sales in the key buying season.
Ahearn is the latest high-profile executive to leave Toys R Us. Neil Friedman, president of U.S. operations for Toys R Us, resigned in February, less than a year after he joined the company.
Chief Administrative Officer Deborah Derby and Chief Merchandising Officer Karen Dodge also left Toys R Us earlier this year, following a lackluster 2011 holiday season. Two other senior vice presidents in merchandising have also departed, led by CEO Gerald "Jerry" Storch.
Toys R Us, based in Wayne, New Jersey, filed its IPO plans with regulators in May 2010, but has yet to go public.
LeapFrog Announces LeapPad 2™ And Leapster GS™
LeapFrog Enterprises, Inc. (NYSE: LF), the leader in educational entertainment, today announced two revolutionary new platforms: LeapPad2, the next generation of the #1 kid's learning tablet LeapPad™, and LeapsterGS, the ultimate learning video game system.
ih.advfn.com/p.php?pid=nmona&article=52810372&symbol=LF
To view the multimedia assets associated with this release, please click:
http://www.multivu.com/mnr/54819-leapfrog-announces-leappad-2-and-leapster-gs
The #1 Kid's Learning Tablet Just Got Better Within a year of launch, LeapPad has received more than 20 accolades, including three prestigious awards from the Toy Industry Association (Educational Toy of the Year, Preschool Toy of the Year, and the ultimate recognition - Toy of the Year). LeapFrog introduces LeapPad2, the next generation of its magical tablet that delivers education filled with entertainment and fun creative exploration for kids.
"We were surprised by the incredible consumer demand for the LeapPad from the day it launched," said John Barbour, chief executive officer at LeapFrog. "It was one of the hottest and hardest-to-find kids' products last holiday season, and it received significant praise from parents, educators and the industry. With the introduction of the innovative LeapPad2 platform, LeapFrog continues to revolutionize and lead the category with engaging entertainment experiences filled with life-changing education that help children reach their potential."
The new LeapPad2 features higher resolution front-and-back cameras and video recorders, the new faster LF 2000 processor and double the memory (4 GB), all housed in a durable, kid-friendly design. LeapPad2 also has improved battery life and is compatible with a new internal battery system and recharger pack available separately.
LeapPad2 includes extensive free content: a music player with five LeapFrog Learning Songs, a new Cartoon Director creativity app, an Art Studio creativity app, the popular Pet Pad writing app and choice of an additional app. LeapPad2's exclusive Cartoon Director app makes the most out of the new features, letting kids develop their inner director by creating and starring in their very own cartoons, as well as sharing their masterpieces with family and friends.
By year's end, the LeapPad content library will feature more than 325 game cartridges, apps, music, videos, eBooks and more. LeapPad2 is compatible with LeapFrog Explorer cartridges and LeapFrog App Center digital content.
The Ultimate Learning Game SystemTo date, LeapFrog's Leapster video gaming products have garnered more than 50 awards. In 2011 Leapster Explorer, the #1 selling learning game handheld, was awarded Educational Toy of the Year from the Toy Industry Association. LeapsterGS, the newest addition to the Leapster family, will offer fast-action gameplay packed with rich learning in a revolutionary new learning video game system.
"Kids are exposed to and desire video games at an earlier age than ever. While a gaming system is sometimes inevitable, many parents would prefer to have an education-filled alternative," said Barbour. "With LeapsterGS, we have created a video gaming system that parents and kids can agree on. Kids will love the action-packed gameplay and parents will feel confident that their child is learning while doing something they love."
LeapsterGS is a substantial improvement over the current Leapster Explorer. It has a new thinner sleek design, larger screen, built-in motion sensor plus camera and video recorder, the new faster LF 2000 processor and 4x the internal memory (2 GB). LeapsterGS is compatible with a new internal battery system and recharger pack available separately.
This new generation Leapster provides the ultimate educational video gaming experience. Kids can take charge of the action with the built-in motion sensor by tilting, turning and shaking their way through the game. They can also bring the real world into their play—and put themselves right into the game—with the built-in camera, video recorder and microphone. LeapsterGS delivers on fast-action gameplay while building core skills for success in school and in life.
LeapsterGS comes with free content including the new "Escape of the Sillies" game app, the popular Pet Pad writing app and choice of an additional app. Exclusive to LeapsterGS, the "Escape of the Sillies" app immerses kids into the game with the built-in camera and face-morphing technology, where they will customize faces of silly monsters while building their math skills.
By year's end, the LeapsterGS content library will feature more than 300 action-packed game cartridges, apps, music, videos, eBooks and more. LeapsterGS is compatible with LeapFrog Explorer cartridges and LeapFrog App Center digital content.
A Robust Content LibraryLeapPad2 and LeapsterGS open the door to a shared library full of engaging and educational content. To help parents navigate the massive amount of children's digital content of vastly varying degrees of quality that are available today, LeapFrog has created a complete solution of high-quality content that is safe and age-appropriate. This robust library is a combination of LeapFrog educational entertainment content designed by in-house educational and gaming experts, and engaging content from some of the biggest names in children's entertainment, carefully selected by LeapFrog's experts for educational value and age appropriateness.
Whether kids want fast-action gaming or to explore their inner artist, every LeapFrog game cartridge and app is embedded with core learning skills. The LeapFrog App Center, which launched in 2011, is filled with high-quality collections of educational apps, music, and videos from content partners to original LeapFrog properties including LeapSchool. The aspirational gaming features of LeapsterGS put kids into the action and keep them practicing important academic skills. The intuitive tablet format of LeapPad2 inspires kids to explore creativity and build skills including phonics, vocabulary, math, science and more—in addition to offering them their very own video and music player.
AvailabilityLeapPad2 will be sold at MSRP $99.99 and is recommended for children 3 to 9 years. LeapsterGS will be sold at MSRP $69.99 and is recommended for children 4 to 9 years. Downloadable apps are priced at MSRP $5.00 and up and game cartridges at MSRP $24.99. LeapPad2 and LeapsterGS will be available for pre-sale at leapfrog.com* and at major online retailers in the U.S., Canada, UK and Ireland beginning July 18. They will be available at major retail locations early August and in select other countries such as Australia, New Zealand, South Africa, Hong Kong, Singapore, Philippines, Korea, Thailand and other Asian countries later in the fall. The LeapFrog App Center can be accessed through the LeapFrog Connect Application for LeapPad2 and LeapsterGS platforms. For more information on LeapPad2 and LeapsterGS, visit leapfrog.com/nextgen.
*Purchases at leapfrog.com are available only in the U.S. and Canada.
About LeapFrog LeapFrog Enterprises, Inc. is the leader in educational entertainment for children. LeapFrog's award-winning product portfolio helps millions of children achieve their potential by delivering best-in-class curriculum through engaging content, fun multimedia learning platforms, and toys. The Learning Path, LeapFrog's proprietary online destination for parents and extended family, provides personalized feedback on a child's learning progress and offers recommendations to enhance each child's learning experience. Through the power of play, LeapFrog's products and curriculum help children of all ages prepare for school and life success. LeapFrog's products are available in more than 45 countries and have been used by teachers in more than 100,000 U.S. classrooms. LeapFrog is based in Emeryville, California and was founded in 1995 by a father who revolutionized technology-based learning solutions to help his child learn how to read. Come see the learning at leapfrog.com.
NOTE: LEAPFROG and the LeapFrog logo are trademarks or registered trademarks of LeapFrog Enterprises, Inc.
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