CAPE TOWN, South Africa, November 14, 2012 – Leatt Corporation (OTCQB: LEAT) today announced results for its third quarter and nine months ended September 30, 2012. Leatt Corp is a global developer, marketer and distributor of personal protective equipment for all forms of sports, especially extreme motor sports; products include the flagship Leatt-Brace®, a neck brace system designed to help prevent potentially devastating injuries to the cervical spine (neck) for helmeted sports.
“Our protective gear continued to make a larger revenue contribution for the period,” commented Sean Macdonald, Leatt Corp’s Chief Executive Officer. “But it was a challenging quarter for us as the third quarter of 2011 included stocking orders for a major new original equipment manufacturing (OEM) partner in Europe, and that customer is not expected to re-stock prior to the first quarter of 2013. In addition, during the second quarter of 2012, we terminated a relationship with a previous OEM partner, and although the replacement OEM partner is expected to show improved sales of our products, there was a period of time between the old and the new OEM partner when product sales languished. These changes impacted our year-over-year results, particularly for the Company’s flagship Leatt braces developed for OEM customers during the 2012 period. Our bottom line for the third quarter was also impacted by a significant increase in professional fees in connection with litigation and with the implementation of several steps toward our new status as a fully reporting U.S. public company. We expect that there will be an upturn in sales for the fourth quarter, although the year overall is expected to be marginally down. We expect higher year-over-year comparisons in 2013.
For the nine months ended September 30, 2012, revenues were $10.5 million, with a net loss of $552,204, or $0.00 per share, as compared to $11.5 million, with net income of $318,575, or $0.0611 per share, for the first nine months of 2011. For the three months ended September 30, 2012, revenues were $2.7 million, with net loss of $755,584, or $0.00 per share, compared to revenues of $3.6 million, with net income of $147,443, or $0.0283 per share, for the third quarter of 2011.
Leatt’s cash and cash equivalents increased to $1.3 million as of September 30, 2012, and its current ratio was strong at 3:1. Cash generated from operating activities during the first nine months of 2012 was $1.0 million. The Company has no long-term debt, and a short-term note for $617,000 reported on the December 31, 2011 balance sheet was paid off.
Mr. Macdonald went on to say, “We are pleased with our increasing cash position which has enabled us to continue development of new products for introduction to the market. We have developed revised versions of our GPX Club and Adventure off-road braces, our new Race and Trail line, to make them more comfortable for the athletes who use them and to stimulate brace sales. These new braces were introduced to the market, along with our new body protection products a few weeks ago and have seen some success in the market place. We expect to introduce new body protection products for mountain bikes and motor sports within the next year.”
The Company has had a number of successes during the last three quarters, including the following highlights:
- New SFI Approval: On November 1, 2012, the SFI Foundation, Inc. (SFI) notified the Company that its new MRX neck brace for automobile racing had been certified in the SFI’s 38.1 Head and Neck Restraint System Program through October 2014. SFI is a non-profit organization established to issue and administer standards for specialty/performance automotive and racing equipment, and SFI testing is compulsory for neck protection used in automotive racing in the United States.
- Jörn Steffens: Leatt welcomed the addition of Jörn Steffens to its research and development team as a product development and design consultant. Mr. Steffens brings over 20 years of knowledge and experience of the research and development processes in the motorcycle clothing and accessories industries and functional clothing in general, as well as of global design, sourcing and production management. Prior to joining Leatt, Mr. Steffens was a part of the management team at the MAT Group, where he served two years as the Business Unit Manager for its Apparel and Body Protection department, and three years as its Business Development Manager, and prior to that Mr. Steffens served as Manager of Leidel & Kracht Schaumstoff-Technik GmbH’s Body Protection Division.
- Patent Victory: On October 10, 2012, the Opposition Division of the European Patent Office upheld the validity of the Company’s licensed European patent for its neck brace and rejected Alpinestars S.P.A.’s challenge of its validity.
- London Summer Games: A number of the competitors in both men’s and women’s BMX events in the London Summer Games wore custom Leatt Braces, including 4 of the 8 finalists in the women’s event.
- SEC Reporting: Leatt became an SEC reporting Company at the end of the second 2012 quarter and timely filed its first periodic report (a Form 10-Q) with the SEC on August 13, 2012. The Company’s change in status also resulted in an upgrade of the Company’s stock quotation to the QB tier of the OTC Market.
Leatt anticipates that the market demand for its products, especially its new protective products, will increase through the next twelve months, despite the volatile macro-economic environment.
“While we expect continued fluctuations in orders for products developed for OEM customers, we plan to continue marketing our flagship Leatt Brace and our new protective products globally, and to seek ways to expand the range of sports in which our safety and protective products may be utilized,” continued Mr. Macdonald. “We expect to introduce our new SFI certified automobile brace to markets, which we expect will generate better results for the Company in the coming year. SFI testing is compulsory for neck protection used in automotive racing in the United States and we believe that SFI certification was a significant milestone in the introduction of our products into the U.S. automobile racing market.”
Conference Call / Webcast
Thursday, November 15 at 11:00 am ET (8 a.m. Pacific) a conference call will be held to review the LEAT third quarter 2012 results. Interested parties should call 877-317-6789 (domestic) or +1-412-317-6789 (international), to access the call.
You may also access this call via the Internet by visiting the company’s website at www.leatt-corp.com and clicking on the webcast link. Access to the webcast will be available for 30 days.
For those who are unavailable to listen to the live broadcast, a replay will be available for one week and can be accessed by dialing 877-344-7529 (domestic) and 412-317-0088 (international) and using conference number 10021282.
About Leatt Corporation
Leatt Corporation develops, distributes and markets personal protective equipment and ancillary products for all forms of sports, especially extreme motor sports. The Leatt-Brace® is an award-winning neck brace system considered the gold standard for neck protection for anyone wearing a crash helmet 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: https://www.leatt-corp.com. | http://www.leatt.com.
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 financial outlook of the Company; the significance of SFI certification of the Company’s new MRX products; the ability of the Company to continue successful marketing of the Leatt Brace and its new protective products globally as well as expand the range of sports in which its products are used; the general ability of the Company to achieve its commercial objectives, including the Company’s plan to develop and introduce its new MRX and body armor products and in turn generate better results in the 2012 fourth quarter or in the coming year; 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, 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.
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