Leatt Corp Announces Results for the Second Quarter 2023
CAPE TOWN, South Africa, (August 10 , 2023) – Leatt Corporation (OTCQB: LEAT), a leading developer and marketer of protective equipment and ancillary products for many forms of sports, especially extreme high-velocity sports, today announced financial results for the second quarter ending June 30, 2023. All financial numbers are in U.S. dollars.
Second Quarter 2023 Snapshot
Global revenues were $12.35 million, down 31%, compared to the second quarter of 2022.
Gross profit margins increased from 41% to 44% for the first six months of 2023, compared to same period of 2022.
Net Income was $776,139, down 72%, compared to the second quarter of 2022.
Helmet sales were $3.52 million, an increase of 48%, compared to the second quarter of 2022.
Cash and cash equivalents for the first six months increased 69% to $12 million.
Cash flow generated from operations was $6.82 million for the first six months of 2023.
Leatt brand momentum continues at consumer level despite constrained industry wide ordering patterns.
Global shipping and logistic costs continue to stabilize.
Chief Executive Officer, Sean Macdonald commented: “Compared to 2022, the best year in our Company’s history, 2023 continues to be challenging for the entire MOTO and MTB industry due largely to post-Covid stocking and sell through dynamics. Although international distribution remains constrained, we are enthusiastic about the momentum that the Leatt brand continues to maintain and expect the early stages of a moderate recovery in domestic consumer sales to continue to appear in results over the next several quarters.
“Total global sales for the second quarter were $12.35 million, a decrease of 31%, compard to the second quarter of 2022. Total global revenues for the first six months of 2023 were $25.43 million, a decrease of 40% compared to the first six months of 2022. Gross profit for the second quarter was $5.34 million. Net income after taxes for the second quarter was $776,139. The sales decreases come in the context of continued temporary distributor and dealer adjustments to ordering patterns as high Covid-era inventory levels continue to be digested and participation remains strong.
“We are particularly enthused by global sales of our helmets featuring our innovative 360 Turbine technology. Overall helmet sales increased by 48% to $3.52 million over last year’s second quarter and accounted for 29% of our total revenues for the second quarter of 2023. Our award-winning MTB helmet lineup was our leader, generating a sales revenue increase of 116% led by initial shipments of our highly-anticipated MTB 3.0 helmet designed to reach a wide rider audience of elite and amateur athletes. Additionally, our redesigned MOTO helmets also generated strong demand, with sales volumes increasing by 141%.
“We remain energized by continued growth in consumer and athlete direct sales in the U.S. and moderate improvement in buying activity at the domestic dealer level as inventory is digested. Our leatt.com site activity and consumer purchasing continued to grow during the second quarter, increasing by 11%, and representing 7% of our global revenues year-to-date.
“Other important highlights include our improvements in gross margins from 41% to 44%, year-to-date, as we continue to maintain brand equity; global supply and shipping costs stabilized, and cash and cash equivalents increased from $5 million to $12 million, which we see as a testament to the resilience of our business model.”
Financial Summary
Total revenues for the second quarter of 2023 were $12.35 million, down 31%, compared to $ 17.94 million for the second quarter of 2022.
The decrease in global revenues during the 2023 period is attributable to a $4.14 million decrease in body armor sales, a $1.82 million decrease in other products, parts, and accessories sales, and a $0.77 million decrease in neck brace sales, that was partially offset by a $1.15 million increase in helmet sales.
Income from operations for the second quarter of 2023 was $1.31 million, down 65%, compared to $3.73 million for the second quarter of 2022.
Net income for the second quarter of 2023 was $776,139 or $0.13 per basic and $0.12 per diluted share, down 72%, as compared to net income of $ 2.73 million, or $0.47 per basic and $0.44 per diluted share, for the second quarter of 2022.
Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. At June 30, 2023, the Company had cash and cash equivalents of $12.0 million and a current ratio of 6:1.
Founder and Chairman Dr. Christopher Leatt remarked: “Our design and engineering team continues to focus on innovating products to add to our growing pipeline of exceptional products to reach a much wider audience around the world.”
Business Outlook
Mr. Macdonald added: “While industry-wide inventory stocking dynamics continue to delay new orders, we continue to focus heavily on areas that we believe will stimulate growth moving forward.
“We are actively refining and building our multi-channel sales organization in established and emerging markets, building internal and partner-level e-commerce capabilities, and investing in product launch and brand-building campaigns that leverage the tremendous momentum that the Leatt brand has achieved.
“Our international distributors continue to evaluate dealer purchasing patterns and report that Leatt brand momentum remains positive as the riding season gains traction.
“We are looking forward to the launch of some exciting new market segment opportunities and a return to revenue growth as stock is digested and riders continue to participate in outdoor activities around the world.
“We believe that a clear focus on financial resilience and cashflow and our ability to attract and invest in world class industry talent forms the foundation of our strong position to gain market share and deliver strong long term shareholder value moving forward.”
Conference Call
The Company will host a conference call at 10:00 am ET on Thursday, August 10, 2023, to discuss the second quarter 2023 results.
Participants should dial in to the call ten minutes before the scheduled time, using the following numbers: 1-877-407-9716 (U.S.A) or +1-201-493-6779 (international) to access the call.
Audio Webcast
There will also be a simultaneous live webcast through the Company’s website, www.leatt-corp.com. Participants should register on the website approximately ten minutes prior to the start of the webcast.
Replay
An audio replay of the conference call will be available for seven days and can be accessed by dialing 1-844-512-2921 (U.S.A) or +1-412-317-6671 (international) and using passcode 13740487.
For those unable to attend the call, a recording of the live webcast will be archived shortly following the event for 30 days on the Company’s website.
About Leatt Corp
Leatt Corporation develops personal protective equipment and ancillary products for all forms of sports, especially extreme motorsports. The Leatt-Brace® is an award-winning neck brace system considered the gold standard for neck protection for anyone wearing a crash helmet in two-wheeled sports as a form of protection. It was designed for participants in extreme sports or riding motorcycles, bicycles, mountain bicycles, all-terrain vehicles, snowmobiles, and other vehicles. For more information, visit www.leatt.com.
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Forward-looking Statements
This press release may contain forward-looking statements regarding Leatt Corporation (the “Company”) within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are “forward-looking statements” including statements regarding the likelihood that the Company’s double digit revenue growth will continue; the ability of the Company to continue to building its multi-channel sales organization and e-commerce capabilities in the market; the likelihood that the Company will maintain its innovative and cutting-edge pipeline of branded products or leverage this momentum into new market segment opportunities and return revenue growth; the financial outlook of the Company, including the likelihood that customer ordering patterns will stabilize in the near term; the general ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects,” “anticipates,” “seeks,” “should,” “could,” “intends,” or “projects” or similar expressions, and involve known and unknown risks and uncertainties. These statements are based upon the Company’s current expectations and speak only as of the date hereof. Any indication of the merits of a claim does not necessarily mean the claim will prevail at trial or otherwise. Financial performance in one period does not necessarily mean continued or better performance in the future. The Company’s actual results in any endeavor may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, which factors or uncertainties may be beyond our ability to foresee or control. Other risk factors include the status of the Company’s common stock as a “penny stock” and those listed in other reports posted on The OTC Markets Group, Inc.
Contact:
Michael Mason
Investor Relations
[email protected]
(917) 841-8371