CAPE TOWN, SOUTH AFRICA: Leatt Corporation, a Nevada corporation (PINKSHEETS: LEAT.PK) (Company), and the distributor of the Leatt-Brace®, a Neck Brace System designed to help prevent potentially devastating motor sport injuries to the cervical spine (neck), today announced unaudited financial results for its fiscal 2010 third quarter ended September 30, 2010 (“Q3 FY2010”). The Company posted gross revenues of $ 4,012,145 and a net quarterly profit before tax of $ 159,585. These results compare to gross revenue of $ 3,044,940 and net quarterly loss before tax of $ 678,218 in the year-ago quarter. A summary of financial results is set forth below.
"We are encouraged to see that we made a modest quarterly profit for Quarter Three of 2010 and that the steps that we have taken as a result of the recession are beginning to filter through to the bottom line," said Chief Executive Officer Sean Macdonald.
Since 2006, we have sold a line of Neck Brace Systems for adults and children that are designed to help prevent potentially devastating motor sport injuries to the cervical spine (neck) among motorcycle, ATV, bicycle and other motor vehicles worldwide. The Company product line is set forth at our sales/product URL: http://www.leatt-brace.com.
A financial summary of the Q3 FY2010 results appears below, which summary is qualified in its entirety by reference to the Q3 FY2010 financial results posted on https://www.leatt-corp.com. One should not rely on the following summary as a complete presentation of financial results and condition for Q3 FY2010.
The Summarized Consolidated Statements of Operations (unaudited) for the periods ending September 30, 2010 and 2009 are:
| Three Months Ended | Nine Months Ended | |||||||
| September 30, 2010 | September 30, 2010 | |||||||
| 2010 | 2009 | 2010 | 2009 | |||||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||
| Revenues | $4,012,145 | $3,044,940 | $9,825,465 | $10,496,463 | ||||
| Cost of Revenues | 1,561,043 | 1,083,357 | 3,784,527 | 3,782,925 | ||||
| Gross Profit | 2,451,102 | 1,961,583 | 6,040,938 | 6,713,538 | ||||
| Operating Expenses | ||||||||
| Salaries and wages | 828,145 | 876,744 | 2,634,975 | 2,609,985 | ||||
| Commissions and consulting expenses | 123,565 | 167,408 | 358,951 | 385,881 | ||||
| Professional fees | 422,040 | 522,315 | 848,810 | 1,143,957 | ||||
| Advertising and marketing | 328,364 | 476,456 | 867,108 | 1,215,652 | ||||
| Office rent and expenses | 46,588 | 55,641 | 159,545 | 168,250 | ||||
| Research and development costs | 116,248 | 72,154 | 177,858 | 113,992 | ||||
| General and administrative expenses | 349,055 | 372,043 | 1,052,545 | 1,042,782 | ||||
| Depreciation | 87,043 | 104,696 | 253,972 | 329,606 | ||||
| Total operating expenses | 2,301,048 | 2,647,457 | 6,353,764 | 7,010,105 | ||||
| Income / (Loss) from Operations | 150,054 | (685,874) | (312,826) | (296,567) | ||||
| Other Income (Expense) | ||||||||
| Interest and other income, net | 1,758 | 7,656 | 4,442 | 35,576 | ||||
| Other expenses, net | 7,773 | – | (9,756) | – | ||||
| Total other income (expense) | 9,531 | 7,656 | (5,314) | 35,576 | ||||
| Income / (Loss) Before Income Taxes | 159,585 | (678,218) | (318,140) | (260,991) | ||||
| Income Taxes | – | 308,504 | 2,400 | – | ||||
| Net Income / (Loss) Available to Common Shareholders | $159,585 | $(369,714) | $(320,540) | $(260,991) | ||||
| Net Income (Loss) per Common share | ||||||||
| Basic | $ 0.0012 | $ 0.00 | $ 0.00 | $ 0.00 | ||||
| Diluted | $ 0.0012 | $ 0.00 | $ 0.00 | $ 0.00 | ||||
| Weighted Average Number of Common Shares Outstanding | ||||||||
| Basic | 132,255,669 | 131,922,336 | 132,255,669 | 131,922,336 | ||||
| Diluted | 132,255,669 | 131,922,336 | 132,255,669 | 131,922,336 | ||||
| Comprehensive Income (Loss) | ||||||||
| Net Income (Loss) | $159,585 | $(369,714) | $(320,540) | $(260,991) | ||||
| Other comprehensive loss net of $ 0 income taxes | ||||||||
| Foreign currency translation | 175,626 | 56,503 | 103,170 | 447,254 | ||||
| Total Comprehensive Income (Loss) | $335,211 | $(313,211) | $(217,370) | $186,263 | ||||
Litigation. The Company has also been named as a defendant in a lawsuit in the U.S. District Court for the Western District of Kentucky. The claim is for alleged strict liability and breach of product warranties. The Company does not believe the claims in this case have merit.
The Company’s insurer initially filed a declaratory judgment in federal court to seek a court declaratory judgment that the insurer did not have to provide any coverage for the Kentucky lawsuit, but the insurer has since indicated that the insurer will provide coverage for the Kentucky lawsuit, including paying for legal defense, without withdrawing and subject to the claims in the declaratory lawsuit. The insurer declaratory action alleges, in part, that the Company failed to timely inform the insurer of the Kentucky lawsuit. The Company denies that allegation and will aggressively litigate.
The Company cannot predict at this time the outcome of any current litigation and as of the date hereof intends to defend these legal actions.
NOTICE: This press release may contain forward-looking statements under the Private Securities Litigation Reform Act of 1995, as amended. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include, without limitation, the effect of competitive and economic factors, and the Company’s reaction to those factors; on consumer and business buying decisions with respect to the Company’s products; the ability of the Company to deliver to the marketplace and stimulate customer demand for products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need from time to time to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; product quality control issues; the absence of a strong e-commerce website for products; the continued service and availability of key executives and employees; unfavorable results of legal proceedings, especially personal injury or product liability lawsuits or intellectual property rights lawsuits; and the Company’s dependency on the sales performance of distributors and other resellers of the Company’s products. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public disclosures at http:www.leatt-corp.com. The Company’s common stock quotes on The Pink OTC Market and said stock is a "penny stock" under SEC rules. The Company is not an SEC reporting company. As such, any investment in the common stock is highly risky. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates, unless applicable laws require otherwise. Neither any URLs referenced herein nor their contents are incorporated herein or made a part of this press release.
Contact:
IR Agent – PW Richter
3901 Dominion Townes Circle
Richmond, Virginia USA 23223
Tel: 804 644 2182
Fax: 804 644 2181
prosage@comcast.net
