LeapFrog Reports Preliminary Fourth Quarter and Full Year 2004 Financial Results Tuesday February 15, 4:52 pm ET Highlights - Preliminary net sales for the year were $639 million, down 6% from 2003; excluding the benefit of foreign currency, sales were down 8% - Net sales from the Education and Training segment were $55.2 million 2004, up 47% over 2003 - Lower gross margins and higher operating expenses resulted in net loss of $8.0 million for full year 2004, compared to net income of $72.7 million for 2003 - Loss per diluted share for 2004 year was $0.13 compared to $1.20 of earnings per diluted share in 2003 - The company announced the resignation of its Chief Operating Officer, Fred Forsyth, the hiring of a new Chief Information Officer, Rob Moon, and the initiation of a search for a new Senior Vice President of Supply Chain - The company announced a realignment plan to restore profitability, strengthen infrastructure and generate growth EMERYVILLE, Calif., Feb. 15 /PRNewswire-FirstCall/ -- LeapFrog Enterprises, Inc. (NYSE: LF - News), a leading developer of innovative technology- based educational products, today reported preliminary financial results for the fourth quarter and full year ended December 31, 2004. For the year, the company recorded a net loss of $8.0 million, or a net loss of $0.13 per diluted share compared to net income of $72.7 million and diluted earnings per share of $1.20 for 2003. For the fourth quarter, the company recorded a net loss of $9.0 million, or a net loss of $0.15 per diluted share compared to net income of $44.2 million and fully diluted earnings per share of $0.72 for the fourth quarter of 2003. "2004 was a challenging year for LeapFrog. Operational issues and increased operating costs negatively impacted our business which was further compounded by an industry-wide lack of retailer re-orders around the critical Thanksgiving period," said Tom Kalinske, Chief Executive Officer. "Despite these difficulties, we remain confident about the long term direction of the company. We have initiated our realignment plan to restore profitability, strengthen our infrastructure and business processes and generate profitable growth of the business. We have already begun implementing this plan, which included a reduction in our worldwide workforce by over 180 people earlier this month. In addition, we recently announced changes to our executive management team, which will help us strengthen our operations, with the hiring of a new Chief Information Officer. Also, our Chief Operating Officer is leaving and we are in the process of hiring a new supply chain expert.""We are also excited about our entry into screen-based learning later this year with our new Leapster L-Max handheld and the launch of our FLY pentop computer," added Jerry Perez, LeapFrog's President. "We are encouraged by the growth of our SchoolHouse business and international consumer business, and the continuing sales increases in our Leapster and Infant/Toddler product lines." http://biz.yahoo.com/prnews/050215/sftu159_1.htmlOriginally this company was estimating it was going to earn over $1 per share in 2004. Now they are reporting a loss! In after-hours trading the shares are down...JT :-)
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