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LeapFrog Reports Second Quarter 2005 Financial Results
Wednesday August 3, 4:06 pm ET

EMERYVILLE, Calif., Aug. 3 /PRNewswire-FirstCall/ --


-- Net sales for the quarter were $87.1 million, up 8% from the second quarter of 2004; excluding the benefit of foreign currency, sales were up 7%
- U.S. Consumer net sales were $54.5 million, up 14%
- International net sales were $17.5 million, up 27%
- Education and Training net sales were $15.1 million, down 22%
-- Operating loss was $15.1 million for the second quarter of 2005,
compared to net operating loss of $11.7 million for the second quarter of 2004
-- Loss per share for the second quarter of 2005 year was $0.16 compared to loss of $0.12 per share in the second quarter of 2004
-- FLY pentop computer is currently in production and on track to be in stores in October

LeapFrog Enterprises, Inc. (NYSE: LF - News), a leading developer of innovative technology-based educational products, today reported financial results for the quarter ended June 30, 2005. For the quarter, the company recorded a net loss of $9.8 million, or ($0.16) per share compared to a net loss of $7.4 million, or ($0.12) per share for the first quarter of 2004.

"While much of the year is still in front of us, we are pleased with our top line increase and our bottom line performance, which is on track with our plans," commented Tom Kalinske, Chief Executive Officer. "With the success of our Leapster handheld product, our U.S. consumer business experienced good growth. Our international business also continued to expand nicely. While the SchoolHouse division revenues were down compared to a strong 2004, we continue to be confident of the long-term growth of this important piece of our business." Mr. Kalinske continued, "In addition to the important overall sales increase, we are making progress toward strengthening our business processes, and we are on track with our eagerly awaited new product introductions for later this year. Specifically, our FLY pentop computer is in production and is on track for an October retail launch, while our Leapster L-Max handheld has just arrived in stores."

Financial Overview

"On a year-to-date basis, net sales have increased over 4%," added Bill Chiasson, Chief Financial Officer of LeapFrog. "Our financial condition remains strong with over $150 million of cash and short term investments on hand as of June 30, 2005."

I too have been considering selling this stock for a substantial loss. I don't have a lot of confidence in the Fly computer pen. I am still holding out some hope for some good news that would allow me to sell out and book a smaller loss.

JT :-)
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