CAPE TOWN, South Africa, Nov. 15, 2011 /PRNewswire/ -- Leatt Corporation (OTC: LEAT.PK), a global marketer and distributor of the Leatt-Brace®, a neck brace system designed to help prevent potentially devastating injuries to the cervical spine (neck) for helmeted sports, announced today unaudited financial results for the third fiscal quarter ended September 30, 2011, ("Q3 FY2011").
For the three months ended September 30, 2011 gross revenues were $3.6 million, compared to $4.0 million for the same period in 2010. The decrease is primarily a result of a change in the Company's customer order and fulfillment cycle. Cost of revenues and gross profit for Q3 FY2011 were $1.5 million and $2.1 million, or 58% of sales, respectively. For the same period in 2010, cost of revenues and gross profit were $1.6 million and $2.45 million, or 61% of sales, respectively.
"We are making progress in returning to sustained profitability, after a period of problems concurrent with a worldwide economic downturn," said CEO Sean Macdonald. "Looking to the future, we are optimistic about the potential for growth and we have some exciting new products in development, and plan to introduce them through the channels currently active with the Leatt Neck Brace.
"Extreme athletes and their fans trust us, and we intend to continue to earn that trust – and to pursue an expansion of the use of our braces to larger groups of children, teenagers, and adults who are daily exposed to a variety of falls and spills that could end badly without the appropriate safety equipment. Leatt is internationally known and respected for our Neck Brace – and now our Chest Protector is moving into the distribution channel. Additional protection products are planned to follow in 2012."
"Meanwhile," Mr. Macdonald added, "we are expanding our distribution network, and working hard to make quality assurance the heart and soul of our manufacturing process. We are shortening lead times, and improving our supply chain to get products from the factory to the end user in ever-faster time frames. Our customers trust us to protect them, and we take that trust seriously."
Strategic Plan for Enhancing Shareholder Liquidity. The Company will announce its plan to enhance shareholder liquidity at the upcoming annual shareholder meeting. Notice of the date and time of the annual shareholder meeting will be posted on the Company web site this month. Mr. Macdonald said: "We know that our shareholders wish us well, but we also know that the shareholders want to see progress in improving the liquidity of the public market for our Common Stock. We are dedicated to achieving this goal as well as sustained profitability and growth. While I am sure the shareholders appreciate the impact of the economic recession on our efforts and progress and the need to post solid financial results on a quarter-to-quarter basis in order to improve the market for our Common Stock, I want the shareholders to know that we are focused on addressing the need for a more liquid market as well."
Nine Month Period. Revenues for the nine months ended September 30, 2011 were $11.5 million, an increase of 17% compared to revenues of $9.8 million for the nine months ended September 30, 2010. Cost of revenues and gross profit for the nine months ended September 30, 2011, were $4.5 million and $7.0 million or 61% of sales respectively. For the same period in 2010, cost of revenues and gross profit were $3.8 million and $6.0 million or 61% of sales respectively. The increase in revenues is primarily the effect of increased worldwide selling activities as a result of new product releases, focused marketing campaigns and improved supply chain throughput.
The Company continues to develop new products in order to widen its product range and markets and has appointed additional distributors worldwide in order to further improve its global distribution network. Numerous well-known athletes use our braces, and support us in our growth – and we sponsor some athletes ourselves.
A financial summary of the Q3 FY2011 results appear below, which summary is qualified in its entirety by reference to the Q3 FY2011 financial results and footnotes thereto posted on http://www.leatt-corp.com. One should not rely on the following summary as a complete presentation of financial results and condition for Q3 FY2011, especially in any investment decision.
This press release may contain forward-looking statements under the Private Securities Litigation Reform Act of 1995, as amended. These statements include words like "expect," "hope," "anticipate," "wish," "hope," and similar words and involve risks and uncertainties that may be beyond Company ability to foresee or address. Actual results may differ significantly from actual results. 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. Increased financial performance in one or more quarters is not necessarily indicative of future financial performance and general optimism of management does not mean that the Company is or will continue to perform at any specific level. Introduction of new products does not indicate a future increase in revenues or profits and such introductions may hurt results by adding additional overhead without an adequate increase in revenues and profits. 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 OTC Markets Group, Inc. and said stock is a "penny stock" under SEC rules – all of which limits the liquidity of our common stock. The Company is not an SEC reporting company and its common stock is not extensively or actively traded. As such, any investment in the common stock is highly risky and has limited liquidity. 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 above nor their contents are incorporated herein or made a part of this press release and should not be relied upon by any investor.
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.
Len Hall (Media)
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Nine Months Ended
Cost of Revenues
Income / Loss from Operations
Other Income (Expense)
Income / Loss Before Income Taxes
Net Income / Loss Available
to Common Shareholders
SOURCE Leatt Corporation