Leatt Corp Reports 2015 Third Quarter Results

Revenues increase; continued profitability

Helmets start to ship in Q4

11 Nov, 2015, 08:00 ET from Leatt Corporation

CAPE TOWN, South Africa, Nov. 11, 2015 /PRNewswire/ -- 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

– Financial Tables Follow –

 


LEATT CORPORATION

CONSOLIDATED BALANCE SHEETS


 ASSETS 









September 30, 2015



December 31, 2014



Unaudited



Audited

Current Assets






 Cash and cash equivalents

$

647,191


$

724,707

 Short-term investments


58,159



58,153

 Accounts receivable


3,708,170



4,239,298

 Inventory


3,646,222



3,403,854

 Payments in advance


310,136



345,406

 Income tax refunds receivable


299



25,299

 Deferred tax asset


108,000



108,000

 Prepaid expenses and other current assets


439,044



994,003

   Total current assets


8,917,221



9,898,720







Property and equipment, net


903,888



995,537







Other Assets






 Other receivables


120,000



210,000

 Deposits


16,879



17,980

 Intangible assets


67,294



81,323

   Total other assets


204,173



309,303







Total Assets

$

10,025,282


$

11,203,560







LIABILITIES AND STOCKHOLDERS' EQUITY 







Current Liabilities






   Accounts payable and accrued expenses

$

1,859,720


$

2,980,885

   Income taxes payable


399,000



331,000

   Short term loan, net of finance charges


37,226



626,129

       Total current liabilities


2,295,946



3,938,014







Deferred tax liabilities


87,603



88,468







Commitments and contingencies












Stockholders' Equity






     Preferred stock, $.001 par value, 1,120,000 shares authorized, 120,000 shares issued and outstanding


3,000



3,000

     Common stock, $.001 par value, 28,000,000 shares authorized, 5,231,823 and 5,200,623 shares issued and outstanding as of September 30, 2015 and December 31, 2014


130,040



130,008

   Additional paid - in capital


7,346,782



7,314,136

   Accumulated other comprehensive loss


(603,462)



(378,431)

   Retained earnings


765,373



108,365

       Total stockholders' equity


7,641,733



7,177,078







Total Liabilities and Stockholders' Equity

$

10,025,282


$

11,203,560

 

LEATT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)




Three Months Ended



Nine Months Ended



September 30



September 30



2015



2014



2015



2014



Unaudited



Unaudited



Unaudited



Unaudited













Revenues

$

4,655,450


$

3,468,761


$

13,869,961


$

11,159,630













Cost of Revenues


2,201,924



1,584,460



6,407,946



5,070,624













Gross Profit


2,453,526



1,884,301



7,462,015



6,089,006













Product Royalty Income


75,268



65,083



147,469



136,346













Operating Expenses












 Salaries and wages


501,156



547,955



1,649,801



1,651,178

 Commissions and consulting expenses


108,020



134,692



445,396



441,943

 Professional fees


126,407



209,168



587,572



823,690

 Advertising and marketing


504,017



320,449



1,128,772



995,502

 Office rent and expenses


60,775



61,807



183,826



183,792

 Research and development costs


298,200



288,904



884,583



903,231

 Bad debt expense


59,314



16,357



78,775



38,652

 General and administrative expenses


435,517



565,004



1,349,849



1,611,242

 Depreciation


95,677



67,075



279,953



214,583

     Total operating expenses


2,189,083



2,211,411



6,588,527



6,863,813













Income (Loss) from Operations


339,711



(262,027)



1,020,957



(638,461)













Other Income (Expense)












  Interest and other income (expense), net


18,840



(914)



26,821



4,680

    Total other income (expense)


18,840



(914)



26,821



4,680













Income (Loss) Before Income Taxes


358,551



(262,941)



1,047,778



(633,781)













Income Taxes


179,585



250



390,770



130













Net Income (Loss) Available to Common Shareholders

$

178,966


$

(263,191)


$

657,008


$

(633,911)













Net Income (Loss) per Common Share












 Basic

$

0.03


$

(0.05)


$

0.13


$

(0.12)

 Diluted

$

0.03


$

(0.05)


$

0.12


$

(0.12)













Weighted Average Number of Common Shares Outstanding












 Basic


5,231,823



5,200,623



5,211,370



5,200,623

 Diluted


5,542,844



5,200,623



5,522,391



5,200,623













Comprehensive Income (Loss)












   Net Income (Loss)

$

178,966


$

(263,191)


$

657,008


$

(633,911)

   Other comprehensive income (loss), net of $0 and $0 deferred income taxes in 2015 and 2014












     Foreign currency translation


(138,140)



(102,235)



(225,031)



(93,180)













     Total Comprehensive Income (Loss)

$

40,826


$

(365,426)


$

431,977


$

(727,091)

 

SOURCE Leatt Corporation



RELATED LINKS

http://www.leatt-corp.com