Leatt Corp Announces Record Breaking Results for Third Quarter 2021

Rhea-AI Summary

Leatt Corporation (OTCQB: LEAT) reported record financial results for Q3 2021, with revenues reaching $22.1 million, up 94% year-over-year. Income from operations surged 170% to $5.8 million, and net income rose 166% to $4.3 million, translating to earnings per share of $0.79. The company achieved consistent year-over-year growth for the 14th quarter and opened a new 43,056 sq. ft. warehouse in Reno, enhancing U.S. operations. CEO Sean Macdonald expressed optimism for continued growth, fueled by strong demand for their protective gear.

Positive

• Record Q3 2021 revenues of $22.1 million, up 94% year-over-year.
• Net income increased to $4.3 million, representing a 166% growth.
• Earnings per share rose to $0.79, a 163% increase compared to Q2 2021.
• New warehouse in Reno, Nevada to enhance U.S. operational capacity.

Negative

• U.S. revenue growth was marginal due to temporary port congestions.

CAPE TOWN, South Africa, Nov. 12, 2021 /PRNewswire/ -- Leatt Corporation (OTCQB: LEAT), a leading developer and marketer of protective equipment and ancillary products for sports, especially extreme high-velocity sports, today announced record financial results for the 2021 third quarter. All financial numbers are in U.S. dollars.

Third Quarter 2021 Performance and Recent Highlights

• Record third quarter revenues of $22.1 million, up 94%, compared to the 2020 third quarter
• Income from operations of $5.8 million, up 170%, compared to the 2020 third quarter
• Record third quarter net income of $4.3 million, up 166% compared to the 2020 third quarter
• Earnings per share increased to $0.79, up 163%, compared to $0.30 in the 2020 second quarter
• New 43,056 square foot warehouse in Reno, Nevada to boost US operations

Chief Executive Officer, Sean Macdonald, commented: "By nearly every measure this was a ground-breaking quarter for Leatt, the best in our company's history. For the third quarter of 2021, revenues increased by 94%, gross profit increased by 93%, and net income increased by 166%, when compared to the 2020 third quarter, led by an exceptionally strong increase in international revenues from global orders of our highly anticipated 2022 line of products. 

"We have achieved record-breaking quarterly revenue for 5 consecutive quarters, and year-over-year revenue growth for the last 14 quarters, as we continue to build the Leatt brand and increase global recognition for the design and engineering of exceptional products for the sporting industry.  Despite the dynamic and challenging environment, we expect the year-over-year growth trend to continue in the fourth quarter, as our global supply chain team and manufacturing partners have kept pace with our inventory requirements to provide timely shipments of Leatt products to meet growing customer demand levels.

"Broken down by product category, third quarter growth was impressive across our entire "head-to-toe" line with a $6.6 million increase in body armor sales, a $1.5 million increase in neck brace sales, a $1.5 million increase in the sales of other products, parts and accessories and a $1.1 million increase in helmet sales. 

"Although revenues in the U.S. grew marginally during the third quarter due to temporary domestic port congestions, dealer and consumer demand for our products remains strong in this market, and we expect to fulfill significant orders in the current quarter in time for the holiday season. Our new warehouse in Reno, Nevada has the capacity for high volume order fulfilment which will be a key driver of our continued development in the U.S.

"This extraordinary 2021 third quarter has again demonstrated our ability to grow year to date revenues, remain operationally efficient and generate significant shareholder value. Revenues for the first nine months of 2021 were up 91%, to $49.3 million. Net income year to date grew by 231%, to $8.8 million, a return on revenue of 18% and earnings of $1.61 per basic share." 

Founder and Chairman, Dr. Christopher Leatt, remarked: "As we continue to design and build an innovative product pipeline, our team is adopting new technologies that change the way our products are sourced, produced and delivered.

Financial Summary

Total revenues for the third quarter of 2021 increased to $22.1 million, up 94%, compared to $11.4 million for the third quarter of 2020.

Gross profit for the third quarter of 2021 increased to $9.5 million, up 93%, compared to $4.9 million for the third quarter of 2020.

Income from operations for the third quarter of 2021 increased to $5.8 million, up 170%, compared to $2.1 million for the third quarter of 2020.

Net income for the third quarter of 2021 was $4.3 million, or $0.79 per basic and $0.69 per diluted share, up 166%, compared to $1.6 million, or $0.30 per basic and $0.27 per diluted share for the third quarter of 2020.

Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations.  At September 30, 2021, the Company had cash and cash equivalents of $2.6 million, a current ratio of 2:1, and there was no long-term debt.

Business Outlook

Mr. Macdonald added: "We continue to evolve the Company and the brand through our consistent focus on developing a diverse line of products, our growing sales and marketing efforts, and the nimble resilience of our global supply chain team during these dynamic times.

"Demand for our exceptional "head-to-toe" protective gear for off-road motorcycle and MTB riders continues to surge around the world. This sustained consumer demand, along with recognition by the media, athletes and our business partners, energizes our entire team to continue our efforts to increase our global market share and refine our already strong pipeline of attractive innovative products. We believe that we are well positioned to deliver an incredible financial performance in 2021 and beyond."

Conference Call

The Company will host a conference call on Friday, November 12 at 10:00 am ET to discuss the 2021 third quarter 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).  The replay PIN Number is 13724984.

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 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.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 diverse pipeline of branded products or to financially benefit from its sales and marketing efforts; the ability of the Company's global supply chain to remain stable to fulfill the Company's 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. 

 

LEATT CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS
		September  30, 2021		December 31, 2020
		Unaudited		Audited
Current Assets
Cash and cash equivalents		$                2,586,671		$              2,967,042
Short-term investments		58,261		58,257
Accounts receivable, net		17,164,890		7,173,829
Inventory, net		14,678,324		9,670,036
Payments in advance		1,757,165		805,098
Income tax refunds receivable		-		2,964
Prepaid expenses and other current assets		4,321,801		2,109,190
Total current assets		40,567,112		22,786,416
Property and equipment, net		3,178,888		3,052,276
Operating lease right-of-use assets, net		1,539,698		285,932
Deferred tax asset, net		78,700		78,700
Other Assets
Deposits		33,553		33,699
Total Assets		$              45,397,951		$            26,237,023
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses		$              16,421,446		$              8,008,925
Operating lease liabilities, current		399,314		207,824
Income taxes payable		2,925,216		1,654,200
Short term loan, net of finance charges		142,653		677,601
Total current liabilities		19,888,629		10,548,550
Deferred compensation		300,000		240,000
Operating lease liabilities, net of current portion		1,140,384		78,108
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, 5,471,669 and  5,430,374 shares issued
and outstanding		130,111		130,111
Additional paid - in capital		8,393,178		8,338,158
Accumulated other comprehensive loss		(676,444)		(562,700)
Retained earnings		16,219,093		7,461,796
Total stockholders' equity		24,068,938		15,370,365
Total Liabilities and Stockholders' Equity		$              45,397,951		$            26,237,023

 

LEATT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
		Three Months Ended				Nine Months Ended
		September 30				September 30
		2021		2020		2021		2020
		Unaudited		Unaudited		Unaudited		Unaudited
Revenues		$ 22,100,827		$ 11,370,946		$ 49,297,861		$ 25,855,950
Cost of Revenues		12,571,692		6,422,472		27,523,233		14,129,516
Gross Profit		9,529,135		4,948,474		21,774,628		11,726,434
Product Royalty Income		58,246		36,016		141,535		40,675
Operating Expenses
Salaries and wages		975,676		784,131		2,813,024		2,251,583
Commissions and consulting expenses		144,837		157,672		581,485		345,014
Professional fees		510,713		181,233		971,969		716,138
Advertising and marketing		633,915		543,020		1,669,648		1,524,251
Office lease and expenses		99,314		78,932		273,887		225,132
Research and development costs		468,922		404,723		1,319,183		1,129,535
Bad debt expense		42,197		32,172		56,290		59,092
General and administrative expenses		691,696		459,993		1,830,055		1,390,236
Depreciation		265,777		212,564		744,713		595,365
Total operating expenses		3,833,047		2,854,440		10,260,254		8,236,346
Income from Operations		5,754,334		2,130,050		11,655,909		3,530,763
Other Income
Interest and other income		1,413		19,727		1,354		1,621
Total other income		1,413		19,727		1,354		1,621
Income Before Income Taxes		5,755,747		2,149,777		11,657,263		3,532,384
Income Taxes		1,467,936		538,320		2,899,966		883,972
Net Income Available to Common Shareholders		$   4,287,811		$   1,611,457		$   8,757,297		$   2,648,412
Net Income per Common Share
Basic		$            0.79		$            0.30		$            1.61		$            0.49
Diluted		$            0.69		$            0.27		$            1.42		$            0.45
Weighted Average Number of Common Shares Outstanding
Basic		5,461,933		5,386,723		5,443,780		5,386,723
Diluted		6,190,748		5,860,428		6,172,596		5,860,428
Comprehensive Income
Net Income		$   4,287,811		$   1,611,457		$   8,757,297		$   2,648,412
Other comprehensive income, net of $0 income taxes in 2021 and 2020
Foreign currency translation		(146,285)		17,584		(113,744)		(239,806)
Total Comprehensive Income		$   4,141,526		$   1,629,041		$   8,643,553		$   2,408,606

 

LEATT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
		2021		2020
Cash flows from operating activities
Net income		$  8,757,297		$ 2,648,412
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation		744,713		595,365
Stock-based compensation		55,020		65,942
Bad debts reserve		32,423		47,639
Inventory reserve		51,840		(9,002)
(Gain) Loss on sale of property and equipment		5,767		(25,046)
(Increase) decrease in:
Accounts receivable		(10,023,484)		(2,712,168)
Inventory		(5,060,128)		1,792,014
Payments in advance		(952,067)		(457,097)
Prepaid expenses and other current assets		(2,212,611)		(719,419)
Income tax refunds receivable		2,964		-
Deposits		146		(5,949)
Increase (decrease) in:
Accounts payable and accrued expenses		8,412,521		582,176
Income taxes payable		1,271,016		266,948
Deferred compensation		60,000		60,000
Net cash provided by operating activities		1,145,417		2,129,815
Cash flows from investing activities
Capital expenditures		(892,658)		(697,625)
Proceeds from sale of property and equipment		-		25,745
Increase in short-term investments, net		(4)		(16)
Net cash used in investing activities		(892,662)		(671,896)
Cash flows from financing activities
Repayment of note payable to bank, net		-		(200,000)
Proceeds from Paycheck Protection Program loan		-		210,732
Repayments of short-term loan, net		(534,948)		(504,577)
Net cash used in financing activities		(534,948)		(493,845)
Effect of exchange rates on cash and cash equivalents		(98,178)		(168,277)
Net increase (decrease) in cash and cash equivalents		(380,371)		795,797
Cash and cash  equivalents - beginning of period		2,967,042		2,072,864
Cash and cash equivalents - end of period		$  2,586,671		$ 2,868,661
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest		$       21,741		$      26,446
Cash paid for income taxes		$  1,659,698		$    616,148
Other noncash investing and financing activities
Common stock issued for services		$       55,020		$      65,942

 

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SOURCE Leatt Corporation

FAQ

What were Leatt Corporation's Q3 2021 revenue results?

Leatt Corporation reported Q3 2021 revenues of $22.1 million, a 94% increase compared to Q3 2020.

How much did Leatt's net income grow in Q3 2021?

Leatt's net income for Q3 2021 was $4.3 million, a 166% increase year-over-year.

What is the earnings per share for Leatt in Q3 2021?

Leatt's earnings per share increased to $0.79 in Q3 2021 from $0.30 in Q3 2020.

What new facilities did Leatt open recently?

Leatt opened a new 43,056 square foot warehouse in Reno, Nevada, to improve U.S. operations.

What challenges did Leatt face in the U.S. market in Q3 2021?

Leatt experienced marginal revenue growth in the U.S. due to temporary port congestions.