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      Leatt Corp Announces Results for Third Quarter 2022


      News provided by

      Leatt Corporation

      Nov 09, 2022, 08:00 ET

      Share this article

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      Year-to-date revenues increase 33%;

      Year-to-date net income increases 26%;

      Year-to-date EPS increases to $1.90

      CAPE TOWN, South Africa, Nov. 9, 2022 /PRNewswire/ -- Leatt Corporation (OTCQB: LEAT), a leading developer and marketer of protective equipment and ancillary products for many forms of sports, especially extreme high-velocity sports, today announced financial results for the third quarter ending September 30, 2022. All financial numbers are in U.S. dollars.

      Third Quarter 2022 Highlights
      • Third quarter global revenues of $23.3 million, up 5%, compared to third quarter 2021
      • Year-to-date revenues of $65.4 million, up 33%, compared to same period of 2021
      • Year-to-date net income of 11.0 million, up 26%, compared to same period of 2021
      • Year-to-date EPS increased to $1.90

      Chief Executive Officer Sean Macdonald commented: "The 2022 third quarter was our 18th consecutive quarter of year-over-year revenue growth. Total global third quarter 2022 revenues were $23.3 million, an increase of 5% over the third quarter of 2021. Gross profit for the quarter was $10.1 million, up 6% over 2021. Our entire team, as well as our MTB and MOTO customers, remain enthusiastic about the solid momentum and market penetration that the Leatt brand and our 'head-to-toe' offering of exceptional protective gear has achieved over the past several years.

      "Global revenues for the first nine months of 2022 were $65.4 million, up 33% over the same period last year. Net income for the first nine months grew to $11.0 million, an increase of 26% over the prior year period. That's a tremendous achievement, compared to the very strong first nine months of 2021 when revenues grew by 91%. We maintained a return on revenue of 17% and earnings of $1.90 per basic share, once again displaying our ability to grow revenues, invest in growth, and remain operationally efficient in these challenging times of macroeconomic headwinds and some stocking congestion globally.

      "The increased revenue for the third quarter was primarily due to upticks in sales of helmets and in sales from our other products, parts and accessories category, offset by slight decreases in sales in our body armor and neck brace categories. We were particularly pleased with our results in the U.S. where revenues increased by $1.1 million or 26% over the  2021 third quarter, as we fulfilled pre-booked orders to re-stock dealer inventory around the country. We continue to invest heavily in our U.S. sales and distribution capacity are well stocked in our new U.S. warehouse to meet dealer demand on a on-going basis.

      "On a year-to-date basis we saw double digit revenue growth in all our expanding product categories, with the exception of neck braces, our most established product, where sales decreased in the 2022 period, compared to an extraordinary 74% increase in the prior year comparison period as a result of dealer pre-stocking to meet demand. Growth in sales of apparel, MOTO and MTB helmets and off-road motorcycle boots were also encouraging over the 2021 nine-month period."

      Founder and Chairman Dr. Christopher Leatt remarked: "As always, our engineers and designers are dedicated to creating products that protect the riders who use them, and saving lives. Safety is the core of our business."

      Financial Summary

      Total revenues for the third quarter of 2022 increased to $23.3 million, up 5%, compared to $22.1 million for the third quarter of 2021. 

      The increase was driven by an 88% increase in helmet sales, and a 38% increase in other products, parts and accessories, that were partially offset by a 15% decrease in body armor and a 30% decrease in neck brace sales.

      Income from operations for the third quarter of 2022 decreased to $5.5 million, down 5%, compared to $5.8 million for the third quarter of 2021.

      Net income for the third quarter of 2022 decreased to $4.1 million, or $0.70 per basic and $0.65 per diluted share, down 5%, compared to $4.3 million, or $0.79 per basic and $0.69 per diluted share, for the third quarter of 2021.

      Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations.  At September 30, 2022, the Company had cash and cash equivalents of $4.8 million and a current ratio of 3.1:1.

      Business Outlook

      Mr. Macdonald added: "We continue to grow despite the macroeconomic geo-political headwinds that have caused currency fluctuations and have impacted the sentiment of customers and consumers around the world. We are seeing some moderation in the extraordinary consumer demand levels that the global MOTO and MTB industry have enjoyed over the last several quarters, but these headwinds do not change the overall strategy and solid fundamentals that have contributed to our success. Consumers continue to ride and participate heavily in outdoor activities, and dealers continue to digest inventory and re-order. These are trends we that expect to continue.

      "In the U.S., our Reno, Nevada warehouse is now fully up and running and well-stocked to ship products to customers and consumers efficiently. The U.S. sales team continues to grow substantially as we reach and service a wider group of MOTO and MTB dealers around the country. 

      Internationally, our team of global sales and marketing managers in some of our most important regions continues to be an important focus as we aim to leverage the momentum that the Leatt brand has gained over the last several years and grow our multi-channel sales approach.

      "We remain proud of our operational efficiencies, resilience and ability to control costs, despite the strong global inflationary environment. We believe that the sales traction, market penetration and brand development that we have achieved over the last several years are testament to our team's ability to develop, market and sell innovative products to wider groups of consumers all over the world. Many of our innovative products are still in their infancy, in terms of market share, with significant opportunity for further gains, and we believe that we are well-positioned to deliver long-term growth and shareholder value.

      Conference Call

      The Company will host a conference call at 10:00 am ET on Wednesday, November 9, 2022, to discuss the third quarter 2022 results.

      Participants should dial in to the call ten minutes before the scheduled time, using the following numbers: 1-877-407-9716 (U.S.A) or +1-201-493-6779 (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 1-844-512-2921 (U.S.A) or +1-412-317-6671 (international) and using passcode 13733893.

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

      About Leatt Corp

      Leatt Corporation develops personal protective equipment and ancillary products for all forms of sports, especially extreme motorsports. 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.com. 

      Follow Leatt® on Facebook, Twitter, and Instagram.

      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's momentum of record-breaking revenue growth will continue; the ability of the Company to continue to maintain its innovative and cutting edge pipeline of branded products or to financially benefit from its sales and marketing efforts; the ability of the Company's global supply chain to withstand any adverse impact on global supply chains and to meet customer demand; the financial outlook of the Company; 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. 

      [FINANCIAL TABLES TO FOLLOW]

      LEATT CORPORATION

      CONSOLIDATED BALANCE SHEETS

      ASSETS








      September 30, 2022


      December 31, 2021



      Unaudited


      Audited

      Current Assets





        Cash and cash equivalents


      $                          4,835,268


      $                       5,022,436

        Short-term investments


      58,267


      58,262

        Accounts receivable, net


      22,504,973


      12,660,936

        Inventory, net


      25,021,494


      21,081,481

        Payments in advance


      1,201,454


      1,610,640

        Prepaid expenses and other current assets

      1,332,503


      4,178,427

          Total current assets


      54,953,959


      44,612,182






      Property and equipment, net


      3,066,304


      3,128,086

      Operating lease right-of-use assets, net


      1,163,782


      1,393,213






      Other Assets





        Deposits


      40,141


      33,339






      Total Assets


      $                        59,224,186


      $                     49,166,820






      LIABILITIES AND STOCKHOLDERS' EQUITY






      Current Liabilities





         Accounts payable and accrued expenses

      $                        12,481,062


      $                     14,617,671

         Note payable, current


      89,739


      83,270

         Operating lease liabilities, current


      286,564


      318,621

         Income taxes payable


      4,812,039


      2,738,818

         Short term loan, net of finance charges


      142,936


      975,025

            Total current liabilities


      17,812,340


      18,733,405






      Deferred compensation


      380,000


      320,000

      Note payable, net of current portion


      124,690


      189,249

      Operating lease liabilities, net of current portion

      877,218


      1,074,592

      Deferred tax liability, net


      228,600


      228,600






      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, 5,826,892 and 5,673,683 shares issued




            and outstanding


      130,280


      130,162

         Additional paid - in capital


      9,929,779


      9,230,847

         Accumulated other comprehensive loss

      (1,335,752)


      (779,268)

         Retained earnings


      31,074,031


      20,036,233

            Total stockholders' equity


      39,801,338


      28,620,974






      Total Liabilities and Stockholders' Equity


      $                        59,224,186


      $                     49,166,820











      The accompanying notes are an integral part of these consolidated financial statements.

      LEATT CORPORATION

      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME





      Three Months Ended

      Nine Months Ended


      September 30

      September 30


      2022

      2021

      2022

      2021


      Unaudited

      Unaudited

      Unaudited

      Unaudited






      Revenues

      $         23,258,752

      $         22,100,827

      $         65,425,170

      $         49,297,861






      Cost of Revenues

      13,122,213

      12,571,692

      38,017,469

      27,523,233






      Gross Profit

      10,136,539

      9,529,135

      27,407,701

      21,774,628






      Product Royalty Income

      74,411

      58,246

      200,221

      141,535






      Operating Expenses





         Salaries and wages

      1,274,554

      975,676

      3,897,693

      2,813,024

         Commissions and consulting expenses

      143,691

      144,837

      456,911

      581,485

         Professional fees

      166,537

      510,713

      505,305

      971,969

         Advertising and marketing

      1,166,804

      633,915

      2,526,808

      1,669,648

         Office lease and expenses

      145,499

      99,314

      546,398

      273,887

         Research and development costs

      501,604

      468,922

      1,516,147

      1,319,183

         Bad debt expense

      97,325

      42,197

      101,680

      56,290

         General and administrative expenses

      977,796

      691,696

      2,399,899

      1,830,055

         Depreciation

      264,923

      265,777

      829,790

      744,713

             Total operating expenses

      4,738,733

      3,833,047

      12,780,631

      10,260,254






      Income from Operations

      5,472,217

      5,754,334

      14,827,291

      11,655,909






      Other Income





         Interest and other expenses, net

      7,784

      1,413

      5,592

      1,354

            Total other income

      7,784

      1,413

      5,592

      1,354






      Income Before Income Taxes

      5,480,001

      5,755,747

      14,832,883

      11,657,263






      Income Taxes

      1,391,878

      1,467,936

      3,795,085

      2,899,966






      Net Income Available to Common Shareholders

      $           4,088,123

      $           4,287,811

      $         11,037,798

      $           8,757,297






      Net Income per Common Share





         Basic

      $                    0.70

      $                    0.79

      $                    1.90

      $                    1.61

         Diluted

      $                    0.65

      $                    0.69

      $                    1.77

      $                    1.42






      Weighted Average Number of Common Shares Outstanding




         Basic

      5,826,892

      5,461,933

      5,802,771

      5,443,780

         Diluted

      6,261,160

      6,190,748

      6,237,039

      6,172,596






      Comprehensive Income





          Net Income

      $           4,088,123

      $           4,287,811

      $         11,037,798

      $           8,757,297

          Other comprehensive income, net of $0 deferred income




              taxes in 2022 and 2021





             Foreign currency translation

      (431,436)

      (146,285)

      (556,484)

      (113,744)






             Total Comprehensive Income

      $           3,656,687

      $           4,141,526

      $         10,481,314

      $           8,643,553






      The accompanying notes are an integral part of these consolidated financial statements.



      LEATT CORPORATION

      CONSOLIDATED STATEMENTS OF CASH FLOWS

      FOR THE NINE MONTHS  ENDED SEPTEMBER 30, 2022 AND 2021


      2022

      2021




      Cash flows from operating activities



         Net income

      $        11,037,798

      $           8,757,297

         Adjustments to reconcile net income to net cash provided by



           operating activities:



           Depreciation

      829,790

      744,713

           Stock-based compensation

      443,250

      55,020

           Bad debts reserve

      81,305

      32,423

           Inventory reserve

      148,901

      51,840

           (Gain) loss on sale of property and equipment

      (23,047)

      5,767

          (Increase) decrease in:



             Accounts receivable

      (9,925,342)

      (10,023,484)

             Inventory

      (4,088,914)

      (5,060,128)

             Payments in advance

      409,186

      (952,067)

             Prepaid expenses and other current assets

      2,845,924

      (2,212,611)

             Income tax refunds receivable

      -

      2,964

             Deposits

      (6,802)

      146

          Increase (decrease) in:



             Accounts payable and accrued expenses

      (2,136,609)

      8,412,521

             Income taxes payable

      2,073,221

      1,271,016

             Deferred compensation

      60,000

      60,000

                Net cash provided by operating activities

      1,748,661

      1,145,417




      Cash flows from investing activities



          Capital expenditures

      (865,204)

      (892,658)

          Proceeds from sale of property and equipment

      43,469

      -

          Increase in short-term investments, net

      (5)

      (4)

                Net cash used in investing activities

      (821,740)

      (892,662)




      Cash flows from financing activities



          Issuance of common stock

      255,800

      -

          Repayment of note payable to bank

      (58,090)

      -

          Repayment of short-term loan, net

      (832,089)

      (534,948)

                Net cash used in financing activities

      (634,379)

      (534,948)




      Effect of exchange rates on cash and cash equivalents

      (479,710)

      (98,178)




      Net decrease in cash and cash equivalents

      (187,168)

      (380,371)




      Cash and cash  equivalents - beginning of period

      5,022,436

      2,967,042




      Cash and cash equivalents - end of period

      $          4,835,268

      $           2,586,671




      SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:



        Cash paid for interest

      $               37,427

      $                21,741

        Cash paid for income taxes

      $          1,721,864

      $           1,659,698




        Other noncash investing and financing activities



          Common stock issued for services

      $             443,250

      $                55,020







      The accompanying notes are an integral part of these consolidated financial statements.



      SOURCE Leatt Corporation

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