21% Increase in Revenues to $24.4 million;
404% Increase in Net Income to $1.2 million
CAPE TOWN, South Africa, (March 27, 2019) – 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 record financial results for the fourth quarter and full year ending December 31, 2018. All financial numbers are in U.S. dollars.
Full-Year 2018 Highlights
- Record revenues of $24.4 million, up $4.25 million or 21%, compared to 2017
- Net Income increased 404% to $1.2 million, or $0.22 per diluted share, compared to $237,000, or $0.04 per diluted share, in 2017
- Total operating expenses increased 8%, while revenues increased by 21%
- Income from Operations of $1.5 million, compared to $226,000 in 2017
- Cash and cash equivalents increased to $1.7 million, compared to $1.5 million in 2017
- Leatt DBX 2.0 Helmet and 3.5 Neck Brace recognized in a 2018 Design & Innovation Award
- Leatt DBX 4.0 Helmet wins Interbike Innovation Award in 2018
Fourth Quarter 2018 Highlights
- Revenues of $5.5 million, up 3% compared to 2017
- Total operating expenses increased 2%, while revenues increased 3%
- Net Loss of $864 which narrowed by $107,000 or 99%, compared to 2017
Leatt CEO, Sean Macdonald, said, “We are pleased to report that 2018 was another record year for Leatt. Global revenues grew by $4.25 million to $24.4 million, an increase of 21%, compared to 2017, and included double digit revenue growth worldwide. We saw revenue growth in every single major product category, but we are particularly encouraged by the increase in sales volumes of our flagship neck braces, our innovative knee braces, our apparel line and our upper body armor and helmets. Our range of award-winning products has increased substantially over the year, and we remain committed to offering our premium revolutionary technology to more riders globally at attractive price points.
“Our growth in 2018 was the result of the continued expansion of our entire global footprint. We have an evolving international distribution network that continues to add new top tier partners. We also now have a more potent in-house sales force, led by strong regional sales managers, as well as wider consumer brand reach and engagement. Our team is bolstered by our stable of exceptional protective products, as well as our new focus on the global bicycle market. We are developing an emerging bicycle distribution network and have added strong regional sales managers and bicycle sales reps to our team.
“Although operating costs have increased this year when compared to 2017, this increase was primarily attributable to increased marketing, advertising, selling and related staff costs targeted directly at building a global consumer brand and launching our exceptional products – areas that we believe will fuel our growth moving forward. We continue to focus on our favorable operating leverage.
“During the first quarter of 2019 we also added another highly anticipated product category that bodes well for future growth: our revolutionary bullet-proof line of protective eye goggles.”
Founder and Chairman, Dr. Christopher Leatt, added, “Leatt continues to pioneer the design and development of innovative products that mesh science and performance to provide bio-medically proven safety for athletes in extreme sports, as well as amateur riders. A prime example is our new award winning 3.5 neck brace, which utilizes advanced manufacturing techniques that combine an in-molded EPS and a polyamide core, to bring yet another revolutionary product to riders at an attractive price point.”
Total revenues for the three-month period ended December 31, 2018 increased to $5.5 million, up 3%, compared to $5.4 million for the 2017 fourth quarter.
For the year ended December 31, 2018, revenues increased by $4.3 million, or 21%, to $24.4 million, up from $20.1 million for the twelve months ended December 31, 2017. The increase for 2018 was driven by an 18% increase in Body armor sales, a 58% increase in helmet sales, an 18% increase in other product and accessories sales, and a 12% increase in Neck brace sales. Price fluctuations did not impact revenues as selling prices have not fluctuated by any significant level.
For the 2018 fourth quarter, gross profit was $2.5 million, or 45% of revenues, compared to $2.2 million, or 42% of revenues, for the 2017 fourth quarter. For the twelve months ended December 31, 2018, gross profit was $11.6 million, or 47% of revenues, up 22%, compared to $9.5 million, or 47% gross margin, for 2017.
Fourth quarter loss from operations was $(128,000), down from $(283,000) for 2017. For the twelve months ended December 31, 2018, income from operations was $1.5 million, compared to $226,000 for 2017.
Net loss for the three months ended December 31, 2018 was $(864), or $(0.00) per basic and diluted share, compared to $(107,000) or $(0.02) per basic and diluted share, during the three months ended December 31, 2017. Net income for the twelve months ended December 31, 2018 increased 404% to $1.2 million, or $0.22 per basic and diluted share, compared to $237,000, or $0.04 per basic and per diluted share, for 2017. The increase in net income for the twelve months ended December 31, 2018 was driven by a 21% increase in revenues.
Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. At December 31, 2018, the Company had cash and cash equivalents of $1.7 million, a current ratio of 3.02:1, and there was no long-term debt.
Mr. Macdonald said, “We believe that the momentum that we are now building will continue throughout 2019 and beyond. Most importantly, our customers around the world continue to enthusiastically support our existing and new 2019 product lines through their ongoing orders. In addition, our stable of exceptional award-winning products has increased substantially in the last year, as we continue to strive to make our premium revolutionary technology, which represent value at attractive price points, available to more riders globally. We plan to build on our strategy of targeted and focused product launches, building our global consumer brand and expanding our presence in new markets domestically and abroad.
“We are also very optimistic about our launch into our revolutionary goggle range. Our development of this new line not only represents the opportunity to protect another key area of a rider’s anatomy —the eyes—but is also a core branding tool with the prominent positioning of our branded goggle straps on the helmet. We are incredibly excited to be bringing a cutting edge, optically optimized goggle to the global market, and our initial orders indicates that our business partners share our enthusiasm.”
The Company will host a conference call at 10:00 am ET on Wednesday, March 27, 2019, to discuss the 2018 fourth quarter and full year 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.
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.
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 13688947.
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 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 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 impact of the Company’s new Goggle range on the Company’s results of operation; likelihood that the Company will continue to expand its product lines and to benefit from global market acceptance of its branded products; the ability of the Company to derive financial benefit from its receipt of awards; the financial outlook of the Company; the general ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries, including its ongoing strategy to diversify and extend its product line into new sports and markets; 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.