2014

Leatt Corp Reports Financial Results for the 2013 Second Quarter

CAPE TOWN, South Africa, Aug. 15, 2013 /PRNewswire/ -- Leatt Corporation (OTCQB: LEAT) today announced financial results for the second quarter and six months ended June 30, 2013. Leatt is a global developer, marketer and distributor of personal protective equipment for all forms of sports, especially extreme motor sports; products include the flagship Leatt-Brace®, a widely recognized neck brace system designed to help prevent potentially devastating injuries to the cervical spine (neck) for helmeted sports. All financial numbers are in US dollars.

CEO Sean Macdonald commented, "For many years, the company's chief product has been our popular and globally-known Leatt-Brace neck brace system. Our transition to a more diverse consumer sporting goods company is well underway, as we continue to develop multiple product lines for a wide range of sports, including motor sports and mountain biking, while also attracting more athletes in different fields.  The procession of new products has already started, with announcements of two new junior products for children over the last two months. We expect to introduce multiple additional products in time for Black Friday and Cyber Monday, and believe, based on the recent strong acceptance of our body armor, that we will begin to show measurable market share over the holidays."

"Revenues were down year to year, due in part to a colder than usual spring season that kept inventory on dealer shelves.  This was especially true in the United States with Brace revenues.  In Europe, Brace sales were down due to abnormally cold weather and late snows.  This led to a lower level of orders from our European distributors who usually account for approximately 30% of worldwide revenues. 

"In addition, we decided to change our bicycle distribution partner in the United States due to ongoing performance issues.  We believe this step will improve conditions going forward.  We also anticipate signing new dealers and distributors in additional sports, and have now begun talks with professional sports leagues in the US where body contact creates a need for additional safety gear.

Mr. Macdonald added, "As we continue to diversify, our sales mix also continues to change.   Our body armor revenue increased by 100% in the six months ended June 30, 2013, when compared to the same period last year.  We believe that this increase in sales volume is attributable to the continued worldwide market acceptance of the Company's expanded body armor product range.

Second Quarter 2013 Financial Performance

For the six months ended June 30, 2013, revenues were $6.86 million, with a net loss of $1.39 million, or $0.27 loss per share, as compared to $7.79 million, with a net profit of $0.2 million, or $0.04 profit per share, for the first six months of 2012.

For the three months ended June 30, 2013, revenues were $3.62 million, with a net loss of $0.64 million or $0.12 loss per share, as compared to $4.47 million, with a net profit of $0.37 million or $0.07 profit per share, for the second quarter of 2012.

The decrease in gross profit margin was primarily due to the inclusion of more body armor products and fewer braces in the Company's sales mix during the 2013 period, compared to the 2012 period.  Body armor products continue to generate a lower gross margin than braces, and they represent 42% of total Company sales for the six months ended June 30, 2013, as compared to 19% in the 2012 comparable period.

Mr. Macdonald commented, "We continue to evaluate all possible measures in order to decrease the costs of the Company's revenues.  We are working hard to strengthen our financial position as we continue our transition, and we still have no long-term debt."

Business Outlook

Mr. Macdonald said, "The United States economy appears to be improving, with housing and securities appreciating, unemployment dropping, and new-job creation on the rise.  The same is beginning to be true in some countries in Europe, even though Europe as a whole remains cautious. We have identified new markets where we believe there is future growth potential for sales of our flagship Brace and continue to develop the Brace to increase demand in our core markets and geographical areas.

"We are an innovative company, focused on the development of new designs and new products as well as operational execution. Our transition to a more diverse, more sports-oriented company was driven by the global recognition of the quality of our flagship Leatt-Brace neck protection system. We believe that our reputation for innovation has already created consumer interest in our new product lines for a variety of sports and we look forward to an increasingly prosperous 2013.   

Mr. Macdonald concluded, "In June 2013, we met with institutional investors in the United States, and we believe we were well received.  We plan to continue our strategy to enlarge the investor market in the United States."

Conference Call:

On Thursday, August 15, 2013 at 10:00 am ET, a conference call will be held to review the Leatt second quarter 2013 results. Interested parties should dial into the call ten minutes before the scheduled time using the following numbers: 1-877-300-8521 (USA) or +1-412-317-6026 (international) to access the call.

Audio Webcast:

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.

Replay:

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 105712.

For those unable to attend the live webcast, it will be archived shortly following the event for 30 days on the Company's website.

About Leatt Corporation

Leatt Corporation develops, distributes and markets 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 | 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 financial outlook of the Company; the general ability of the Company to achieve its commercial objectives, including its transition to a diverse consumer sporting goods company; 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

Allen & Caron, Inc.
Michael Mason (Investors) 
michaelm@allencaron.com 
(212) 691-8087

Len Hall (Media)
len@allencaron.com 
(949) 474-4300

- Financial Tables Follow –


 

 


LEATT CORPORATION
CONSOLIDATED BALANCE SHEETS


ASSETS









June 30 2013



December 31 2012



Unaudited



Audited

Current Assets






 Cash and cash equivalents

$

631,420


$

667,671

 Short-term investments


311,495



311,263

 Accounts receivable


2,798,478



3,532,811

 Inventory


3,305,045



3,770,932

 Payments in advance


120,579



168,710

 Deferred tax asset


47,000



47,000

 Prepaid expenses and other current assets


352,961



874,113

   Total current assets


7,566,978



9,372,500







Property and equipment, net


874,270



1,127,707







Other Assets






 Deposits


41,622



44,495

 Intangible assets


95,615



111,358

   Total other assets


137,237



155,853







Total Assets

$

8,578,485


$

10,656,060







LIABILITIES AND STOCKHOLDERS' EQUITY







Current Liabilities






   Accounts payable and accrued expenses

$

2,062,801


$

2,000,554

   Income taxes payable


113,501



115,000

   Short term loan, net of finance charges


307,908



837,721

       Total current liabilities


2,484,210



2,953,275







Deferred tax liabilities


37,029



38,000







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, 5,200,623 shares issued and outstanding


130,008



130,008

   Additional paid - in capital


7,302,352



7,302,352

   Accumulated other comprehensive income (loss)


(52,299)



164,235

   Retained earnings (accumulated deficit)


(1,325,815)



65,190

       Total stockholders' equity


6,057,246



7,664,785







Total Liabilities and Stockholders' Equity

$

8,578,485


$

10,656,060

 

 


LEATT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS










Three Months Ended



Six Months Ended



June 30



June 30



2013



2012



2013



2012



Unaudited



Unaudited



Unaudited



Unaudited













Revenues

$

3,616,598


$

4,469,733


$

6,864,645


$

7,792,428













Cost of Revenues


1,830,720



1,941,179



3,483,754



3,398,360













Gross Profit


1,785,878



2,528,554



3,380,891



4,394,068













Product Royalty Income


142,224



39,258



179,686



73,433













Operating Expenses












   Salaries and wages


552,501



555,524



1,131,641



1,066,540

   Commissions and consulting expenses


159,996



111,392



283,169



248,070

   Professional fees


451,516



311,751



816,111



553,752

   Advertising and marketing


403,688



307,691



730,325



539,080

   Office rent and expenses


59,411



62,001



132,814



140,333

   Research and development costs


276,747



255,993



565,605



521,455

   Bad debt expense (recovery)


-



(123,838)



-



(123,838)

   General and administrative expenses


559,511



527,920



1,100,684



1,046,243

   Depreciation


97,429



108,551



191,455



215,894

      Total operating expenses


2,560,799



2,116,985



4,951,804



4,207,529













Income (Loss) from Operations


(632,697)



450,827



(1,391,227)



259,972













Other Income












   Interest and other income, net


(2,647)



31,605



1,142



49,368

       Total other income


(2,647)



31,605



1,142



49,368













Income (Loss) Before Income Taxes


(635,344)



482,432



(1,390,085)



309,340













Income Taxes


920



105,000



920



105,960













Net Income (Loss) Available to












Common Shareholders

$

(636,264)


$

377,432


$

(1,391,005)


$

203,380













Net Income (Loss) per Common Share












   Basic

$

(0.12)


$

0.07


$

(0.27)


$

0.04

   Diluted

$

(0.12)


$

0.07


$

(0.27)


$

0.04

Weighted Average Number of Common Shares Outstanding












   Basic


5,200,623



5,200,623



5,200,623



5,200,623

   Diluted


5,200,623



5,200,623



5,200,623



5,200,623













Comprehensive Income (Loss)












   Net Income (Loss)

$

(636,264)


$

377,432


$

(1,391,005)


$

203,380

   Other comprehensive income (loss), net of $-0- deferred income taxes












         Foreign currency translation


(101,109)



(136,971)



(216,534)



(8,662)













         Total Comprehensive Income (Loss)

$

(737,373)


$

240,461


$

(1,607,539)


$

194,718

 

 

LEATT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012









2013



2012







Cash flows from operating activities






   Net income (loss)

$

(1,391,005)


$

203,380

   Adjustments to reconcile net income (loss) to net cash provided by operating activities:






      Depreciation


191,455



215,894

      Deferred income taxes


(971)



(132)

      Stock-based compensation


-



10,325

      (Gain) loss on sale of property and equipment


366



(5,706)

   (Increase) decrease in:






      Accounts receivable


734,333



516,933

      Inventory


465,887



377,013

      Payments in advance


48,131



34,709

      Prepaid expenses and other current assets


521,152



518,341

      Deposits


2,873



(30)

   Increase (decrease) in:






      Accounts payable and accrued expenses


62,247



(904,196)

      Income taxes payable


(1,499)



(44,991)

      Customer deposits


-



(265)

         Net cash provided by operating activities


632,969



921,275







Cash flows from investing activities






   Capital expenditures


(51,316)



(94,201)

   Proceeds from sale of property and equipment


2,844



5,706

   Increase in short-term investments, net


(232)



(387)

         Net cash used in investing activities


(48,704)



(88,882)







Cash flows from financing activities






   Repayments of short-term loan, net


(529,813)



(528,866)

         Net cash used in financing activities


(529,813)



(528,866)







Effect of exchange rates on cash and cash equivalents


(90,703)



11,189







Net (decrease) increase in cash and cash equivalents


(36,251)



314,716







Cash and cash equivalents - beginning of period


667,671



1,084,806







Cash and cash equivalents - end of period

$

631,420


$

1,399,522

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:






   Cash paid for interest

$

7,994


$

27

   Cash paid for income taxes

$

2,419


$

960







   Other noncash investing and financing activities






      Common stock issued for services

$

-


$

10,325

 

SOURCE Leatt Corporation



RELATED LINKS
http://www.leatt-corp.com

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