CAPE TOWN, South Africa, November 11, 2015 – Leatt Corporation (OTCQB: LEAT) has announced its financial results for the third quarter and nine months ended September 30, 2015. Leatt Corporation develops and markets protective equipment and ancillary products for all forms of sports, especially extreme high-velocity sports. All financial numbers are in US dollars.
Third Quarter 2015 Financial Performance:
During the quarter ended September 30, 2015, revenue grew 34 percent to $4.7 million, versus $3.5 million for the third quarter of 2014. Net income for the 2015 third quarter was $178,966 or $0.03 per share, up 168 percent from a net loss of $263,191 or $0.05 net loss per share for the third quarter of 2014.
CEO Sean Macdonald commented, “We are pleased to report a very strong third quarter with a 34 percent increase in revenues and continued profitability. Sales of the Company’s flagship neck brace for the 2015 third quarter reached $1.89 million, compared to $1.62 million in last year’s third quarter. Body armor sales for the third quarter were very strong at $2.43 million, up from $1.72 million in the third quarter 2014. The 41 percent increase in body armor sales was primarily the result of the initial successful shipment of the Company’s broadened body armor line and protective gloves during the 2015 period. Despite this increase in revenue, we have continued to keep operating expenditures low and this is reflected by the decrease in G&A expenses and professional fees.”
We have historically shipped our initial orders of our annual new product range to international customers in the fourth quarter of each year. Our team has been extremely focused on developing products efficiently and we are pleased to announce that we were able to ship our initial orders of our 2016 product range in the third quarter of 2015. This adjustment has been made to provide distributors with more time to stock dealers for the upcoming Christmas shopping season in line with the industry norm. We expect that this trend will continue and make the Company less dependent on fourth quarter sales”
Nine Months 2015 Financial Performance:
For the first nine months of 2015, revenues were $13.9 million, up 24 percent, as compared to $11.2 million in the same 2014 period. As with the third quarter, the nine months benefitted from increased customer demand for both major categories of products: neck braces and body armor. Overall, neck braces sales accounted for $6.1 million and body armor sales for $6.9 million. The body armor category increased 53 percent for the period, largely a result of strong sales for the C-Frame knee brace, as well as a 66 percent increase in the volume of body armor products sold.
Gross profit for the nine months of 2015 was $7.5 million, up 23 percent from $6.1 million in 2014. For the nine months, operating expenses were down slightly compared to the previous year, primarily due to decreased general and administrative expenses.
The net income for the nine months was $657,008 or $0.13 per share, an improvement of 204 percent from a net loss of $633,911 or $0.12 net loss per share for the nine months of 2014. The Company had cash and cash equivalents of $647,191 at the end of the 2015 nine-month period, and has no long-term debt.
Business Outlook:
CEO Sean Macdonald commented, “We are very excited to commence shipment of our helmets in the fourth quarter. The helmet market is the largest segment of the worldwide market for protective sporting equipment ranging from the amateur to the professional. Although we believe that we will ship the majority of our Helmet orders during the fourth quarter of 2015, we expect to be in a position to roll out the complete range of our helmets during the first quarter of 2016.
We are expecting our fourth quarter sales to be less robust than prior periods due to our decision to ship our initial orders of our 2016 product line during the third quarter of 2015. Additionally, as we continue to widen our product categories and expand our US dealer coverage, our OEM revenues are placed under pressure. Although we expect these factors to affect our fourth quarter revenues, we believe that these are short term costs of our long term strategy for sustained growth. We continue to evaluate our expenditure and costs of manufacturing closely and are committed to growing our range of innovative products in order to improve profitability for the benefit of our shareholders.
Earnings Call
Leatt’s management team will host a conference call to discuss the Company’s financial results at 10 am ET today. Participants should dial in to the call ten minutes before the scheduled time, using the following numbers: 1-888-348-8777 (USA) or +1-412-902-4245 (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.
For those unable to attend the call, an audio replay of the conference call will be available for seven days and can be accessed by dialing 1-877-870-5176 (USA) or +1-858-384-5517 (international) and using passcode 10075719. A recording of the live webcast will also be archived for 30 days following the call on the Company’s website.
About Leatt Corporation
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-corp.com | http://www.leatt.com/.
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 will see increased revenue in connection with sales of its new knee brace and gloves; the significance of the Company’s shipment of the new helmets and the likelihood that helmet sales will benefit from the market acceptance of other Leatt branded products; the financial outlook of the Company and the likelihood that demand for the Company’s innovative new products will continue to increase through 2016; 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.
Contacts:
Leatt Corporation
Sean Macdonald
Chief Executive Officer
Sean.Macdonald@leatt-brace.com
+ (27) 21 557 7257
DresnerAllenCaron
Michael Mason (Investors)
mmason@dresnerallencaron.com
(212) 691-8087
Len Hall (Media)
lhall@dresnerallencaron.com
(949) 474-4300
