36% Increase in Global Revenues to $38.6 million
222% Increase in Net Income to $4.4 million
215% increase in Earnings Per Share
CAPE TOWN, South Africa, (March 24, 2021) – 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, 2020. All financial numbers are in U.S. dollars.
- Record Fourth quarter revenues of $12.7 million, up 75%, compared to 2019.
- Record Fourth quarter net income of $1.8 million, up 6444%, compared to 2019.
- Record full year revenues of $38.6 million, up 36%, compared to 2019.
- Record full year net income of $4.4 million, up 222%, compared to 2019.
- Record increase in earnings per share to $0.82 per basic share, up 215% compared to 2019.
- Total operating expenses increased 5%, while revenues increased by 36%.
- Income from operations of $5.8 million, up 195% compared to 2019.
- Cash and cash equivalents increased to $3.0 million, compared to $2.1 million in 2019.
- Design & Innovation Award 2021 for Velocity 4.0 MTB Goggles.
- Powersports Nifty 50 Award for X-Frame Hybrid Knee Brace.
CEO Sean Macdonald commented: “By nearly every measure, 2020 was our best year ever, topped off by a fantastic fourth quarter, the best quarter in our history in terms of revenue and profitability. Global revenues for the fourth quarter were $12.7 million, an increase of $5.4 million or 75%, compared to the fourth quarter of 2019, driven by break-out sales of our innovative products for upper body and limb protection, and our off-road motorcycle boots and helmets for off-road motorcycle and mountain biking use.
“Total revenues for 2020 were $38.6 million, up $10.3 million or 36% over 2019. The year saw strong double-digit growth in all our product categories, except neck braces, which were affected by conservative buying patterns with the Covid-19 outbreak at the start of the year. Net income for 2020 was $4.4 million, an increase of 222%, and earnings per share more than tripled, up 215% compared to 2019, highlighting our ability to operate efficiently while achieving strong revenue growth. Thanks to stellar work from our entire team, we only saw a 5% increase in operating costs.
“We believe that these results demonstrate the resilience and agility of our business model in the midst of the turmoil brought on by the Covid-19 pandemic, as consumers continued to participate in outdoor activities. Meanwhile, our expanding line of products have defined Leatt as a genuine “head-to-toe” brand with a full offering of cutting-edge products that appeal to an increasingly wider rider audience around the world.”
Founder and Chairman Dr. Christopher Leatt remarked: “We are always at work refining our product categories and, thanks to the diligence and creativity of our engineering team and our professional riders, we have created a strong pipeline of innovative products going forward. We are especially proud of the recognition that some of our newest products have won in the marketplace, including the Powersports Business Nifty 50 Award, given to our X-Frame Hybrid Knee Brace, and the Design & Innovation Award, won by our Velocity 4.0 MTB Goggles.”
Total revenues for the fourth quarter of 2020 increased to $12.7 million, up 75%, compared to $7.3 million for the 2019 fourth quarter.
Fourth quarter income from operations increased to $2.3 million, up 2173% compared to $101,000 in 2019.
Net income for the fourth quarter of 2020 was $1.8 million or $0.33 per basic and $0.30 per diluted share, compared to a loss of $(28,000) or $(0) per basic and $(0) per diluted share, for the three months ended December 31, 2019.
Revenues increased by $10.3 million or 36%, for 2020, to $38.6 million, up from $28.3 million for 2019. The increase during 2020 was driven by a 61% increase in body armor sales, a 34% increase in sales of other products, parts and accessories sales, and a 32% increase in helmet sales that were partially offset by a 17% decrease in neck brace sales.
Gross profit for 2020 was $17.4 million, or 45% of revenues, up 34%, compared to $13.0 million, or 46% of revenues for 2019.
Income from operations for 2020 was $5.8 million, a $3.9 million increase, compared to $2.0 million for 2019.
Net income for 2020 increased 222% to $4.4 million, or $0.82 per basic share and $0.74 per diluted share, compared to $1.4 million, or $0.26 per basic share and $0.25 per diluted share, for 2019.
Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. At December 31, 2020, the Company had cash and cash equivalents of $3.0 million, a current ratio of 2.2:1 and there was no long-term debt.
Mr. Macdonald added, “While we are achieving outstanding growth, and both ordering patterns and consumer demand are promising, we have a long runway ahead of us. Our market share potential is still in its infancy in the majority of categories that we sell. We are especially encouraged by the consumer demand, the reviews and the performance in the field of our recent product launches in goggles, boots, shoes, helmets and other protective gear. In particular, we believe that our investment in the re-engineering of our Moto helmet line will contribute to significant revenue gains.
“Based on our promising 2020 results and the momentum that we have achieved, we will continue to do what we have been doing: investing in innovative “head-to-toe” products and engaging marketing campaigns, and developing a professional, multi-channel sales organization. We believe that these investments are arming our dealers with the product and marketing tools that are key contributors to Leatt global brand recognition and revenue growth.
“We are also excited by the acceptance our protective gear is receiving in the highly competitive professional racing marketplace. We recently signed a multi-year partnership with the SmarTop/BullFrogSpas/MotoConcepts Honda racing team, one of the leading teams in global motocross racing. The deal means that team riders will be outfitted in our “head-to-toe” protective gear as they compete in elite racing around the world. We see this as a premium endorsement from the highest levels of the industry, that our products not only keep riders safe but also give them the confidence to push faster, harder, and further. We believe that the backing of some of the finest riders in the world will prove to be an important factor in consumer buying decisions.”
The Company will host a conference call at 10:00 am ET on Wednesday, March 24, 2021, to discuss the 2020 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 13717624.
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 likelihood that the Company will continue to deliver, and financially benefit from global market acceptance of, its pipeline of new revolutionary branded products; the extent to which the Company’s partnership with the SmarTop/BullFrogSpas/MotoConcepts Honda racing team will influence consumer buying decisions and positively impact on the financial outlook of the Company; the impact of the Company’s award-winning goggle range and knee braces on the Company’s results of operation; 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 ability to mitigate the future impact of COVID-19 on the Company’s business operations; 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.