Leapfrog Company

Mattel Inc. didn't violate a LeapFrog Enterprises Inc. patent, a federal district court in Delaware ruled Thursday. LeapFrog had sued Mattel unit Fisher-Price in October 2003, alleging that its PowerTouch toy infringed a patent related to LeapPad electronic books. U.S. District Judge Gregory M. Sleet said Fisher-Price hadn't violated the patent. The ruling comes after sales slumped 48% in LeapFrog's education and training unit and 29% in the international division in the fourth quarter of 2005.

Once upon a time, this frog was a prince. About three years ago, educational toy maker LeapFrog Enterprises Inc. was enjoying its status as an industry darling. Its stock was trading at about $47 a share, and its signature LeapPad electronic learning toys were gobbling up competitors' formerly secure shelf space. Today, the stock is down about 85% from its 2003 high. Like the prince from the fairy tale, LeapFrog is suffering an identity crisis.

Leapfrog Enterprises Inc., the maker of LeapPad electronic-learning books, said Tuesday it cut more than 180 jobs after fourth-quarter sales dropped 23%. Shares fell in after-hours trading. The Emeryville, Calif.-based company said it had a fourth-quarter net loss of $9 million, or 15 cents a share, compared with a profit of $44.2 million, or 72 cents, a year earlier. In a preliminary earnings statement, it also said sales fell to $255.3 million from $331.4 million.

A lawyer for LeapFrog Enterprises Inc. told a jury Monday that Mattel Inc. copied LeapFrog's technology for electronic books that helps children learn to read. LeapFrog, which makes LeapPad electronic books, is seeking $78 million in damages on a claim that Mattel's Fisher-Price unit infringed its patent on books in which children can push letters in a word to hear how they sound. Mattel said that its PowerTouch books used different technology and that the LeapFrog patent was invalid.

A federal judge declared a mistrial Friday in LeapFrog Enterprises Inc.'s lawsuit seeking $58 million from Mattel Inc.'s Fisher-Price unit over a patent for interactive books that help children learn to read. U.S. District Judge Gregory M. Sleet in Wilmington, Del., issued the ruling after jurors reported that they were deadlocked. Lawyers for both companies told Sleet that they agreed he should decide the case on his own. The judge did not say when he would rule.

LeapFrog Enterprises Inc. said Tuesday that fourth-quarter profit rose 50%, on record sales of its learning toys. The Emeryville, Calif.-based company also said it shuffled top management: Jerry Perez, former head of Mattel Inc.'s Fisher-Price unit, was named president. Michael Wood, who has been president and chief executive, is becoming "chief vision and creative officer," and Chairman Thomas Kalinske is taking the CEO title. Leapfrog said earnings rose to $44.

Educational toy maker LeapFrog Enterprises Inc. said Wednesday that it would miss analysts' sales and earnings estimates for the first quarter, citing the "difficult financial position" of some retailers and reduced gross margin. The announcement, which sent shares plunging more than 30% in after-hours trading, was the latest in a string of bad news released by the Emeryville, Calif.-based company best known for its LeapPad, a junior-sized laptop system that holds interactive workbooks.

LeapFrog Enterprises Inc. is learning a tough lesson in the ways of Wall Street. Management of the leading educational toy maker came under fire Thursday after disclosing again that its business would trail expectations -- an announcement that sparked a 25% plunge in its stock. "A substantial part of the sell-off is a loss of investor confidence" in the creator of LeapPad laptop games and other interactive toys, said Natalie Walrond, an analyst with Pacific Growth Equities Inc.

Ryland Group Inc., a Calabasas-based home builder, said its quarterly profit soared 37% to $52.4 million, or $2.06 a share. Sales rose 14% to $754.6 million. Ryland ended the quarter with a backlog of 7,773 homes contracted for and waiting to be built -- up 16%. The backlog's value jumped 35% to $2 billion, the highest in Ryland's history. The company raised its outlook for the year to earnings in excess of $11 a share -- up from its previous prediction of more than $10 a share.

* Educational toy maker LeapFrog Enterprises Inc. of Emeryville, Calif., said its loss widened to $7.4 million, or 12 cents a share, from $3.9 million, or 7 cents, a year earlier. Sales rose 19% to $80.8 million.