Leatt Corp Announces Record Breaking Year; Reports Results for Fourth Quarter and Full Year 2020
Leatt Corporation (OTCQB: LEAT) announced record financial results for Q4 and the full year ending December 31, 2020. Q4 revenues hit $12.7 million, a 75% increase year-over-year, with net income soaring 6444% to $1.8 million. For 2020, total revenues reached $38.6 million, a 36% rise, and net income increased 222% to $4.4 million. Despite a 5% rise in operating expenses, the earnings per share surged to $0.82. The company highlighted significant growth in body armor and helmets while preparing for more innovation and market expansion.
- Q4 revenues increased by 75% to $12.7 million.
- Net income for Q4 surged 6444% to $1.8 million.
- Total 2020 revenues rose 36% to $38.6 million.
- Net income for 2020 increased 222% to $4.4 million.
- Earnings per share rose to $0.82, up 215%.
- Cash and cash equivalents increased to $3.0 million.
- Neck brace sales declined by 17% due to conservative buying patterns.
CAPE TOWN, South Africa, March 24, 2021 /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 record financial results for the fourth quarter and full year ending December 31, 2020. All financial numbers are in U.S. dollars.
2020 Highlights
- Record Fourth quarter revenues of
$12.7 million , up75% , compared to 2019. - Record Fourth quarter net income of
$1.8 million , up6444% , compared to 2019. - Record full year revenues of
$38.6 million , up36% , compared to 2019. - Record full year net income of
$4.4 million , up222% , compared to 2019. - Record increase in earnings per share to
$0.82 per basic share, up215% compared to 2019. - Total operating expenses increased
5% , while revenues increased by36% . - Income from operations of
$5.8 million , up195% compared to 2019. - Cash and cash equivalents increased to
$3.0 million , compared to$2.1 million in 2019. - Design & Innovation Award 2021 for Velocity 4.0 MTB Goggles.
- Powersports Nifty 50 Award for X-Frame Hybrid Knee Brace.
CEO Sean Macdonald commented: "By nearly every measure, 2020 was our best year ever, topped off by a fantastic fourth quarter, the best quarter in our history in terms of revenue and profitability. Global revenues for the fourth quarter were
"Total revenues for 2020 were
"We believe that these results demonstrate the resilience and agility of our business model in the midst of the turmoil brought on by the Covid-19 pandemic, as consumers continued to participate in outdoor activities. Meanwhile, our expanding line of products have defined Leatt as a genuine 'head-to-toe' brand with a full offering of cutting-edge products that appeal to an increasingly wider rider audience around the world."
Founder and Chairman Dr. Christopher Leatt remarked: "We are always at work refining our product categories and, thanks to the diligence and creativity of our engineering team and our professional riders, we have created a strong pipeline of innovative products going forward. We are especially proud of the recognition that some of our newest products have won in the marketplace, including the Powersports Business Nifty 50 Award, given to our X-Frame Hybrid Knee Brace, and the Design & Innovation Award, won by our Velocity 4.0 MTB Goggles."
Financial Summary
Total revenues for the fourth quarter of 2020 increased to
Fourth quarter income from operations increased to
Net income for the fourth quarter of 2020 was
Revenues increased by
Gross profit for 2020 was
Income from operations for 2020 was
Net income for 2020 increased
Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. At December 31, 2020, the Company had cash and cash equivalents of
Business Outlook
Mr. Macdonald added, "While we are achieving outstanding growth, and both ordering patterns and consumer demand are promising, we have a long runway ahead of us. Our market share potential is still in its infancy in the majority of categories that we sell. We are especially encouraged by the consumer demand, the reviews and the performance in the field of our recent product launches in goggles, boots, shoes, helmets and other protective gear. In particular, we believe that our investment in the re-engineering of our Moto helmet line will contribute to significant revenue gains.
"Based on our promising 2020 results and the momentum that we have achieved, we will continue to do what we have been doing: investing in innovative 'head-to-toe' products and engaging marketing campaigns, and developing a professional, multi-channel sales organization. We believe that these investments are arming our dealers with the product and marketing tools that are key contributors to Leatt global brand recognition and revenue growth.
"We are also excited by the acceptance our protective gear is receiving in the highly competitive professional racing marketplace. We recently signed a multi-year partnership with the SmarTop/BullFrogSpas/MotoConcepts Honda racing team, one of the leading teams in global motocross racing. The deal means that team riders will be outfitted in our 'head-to-toe' protective gear as they compete in elite racing around the world. We see this as a premium endorsement from the highest levels of the industry, that our products not only keep riders safe but also give them the confidence to push faster, harder, and further. We believe that the backing of some of the finest riders in the world will prove to be an important factor in consumer buying decisions."
Conference Call
The Company will host a conference call at 10:00 am ET on Wednesday, March 24, 2021, to discuss the 2020 fourth quarter and full year 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 13717624.
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 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 will continue to deliver, and financially benefit from global market acceptance of, its pipeline of new revolutionary branded products; the extent to which the Company's partnership with the SmarTop/BullFrogSpas/MotoConcepts Honda racing team will influence consumer buying decisions and positively impact on the financial outlook of the Company; the impact of the Company's award-winning goggle range and knee braces on the Company's results of operation; 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, including its ability to mitigate the future impact of COVID-19 on the Company's business operations; 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 | ||||
DECEMBER 31, 2020 AND 2019 | ||||
ASSETS | ||||
2020 | 2019 | |||
Current Assets | ||||
Cash and cash equivalents | $ 2,967,042 | $ 2,072,864 | ||
Short-term investments | 58,257 | 58,239 | ||
Accounts receivable, net | 7,173,829 | 2,956,012 | ||
Inventory, net | 9,670,036 | 8,655,176 | ||
Payments in advance | 805,098 | 447,476 | ||
Income tax refunds receivable | 2,964 | - | ||
Prepaid expenses and other current assets | 2,109,190 | 1,129,067 | ||
Total current assets | 22,786,416 | 15,318,834 | ||
Property and equipment, net | 3,052,276 | 2,431,061 | ||
Operating lease right-of-use assets, net | 285,932 | 411,956 | ||
Deferred tax asset, net | 78,700 | - | ||
Other Assets | ||||
Deposits | 33,699 | 26,642 | ||
Total Assets | $ 26,237,023 | $ 18,188,493 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Liabilities | ||||
Accounts payable and accrued expenses | $ 8,008,925 | $ 5,425,681 | ||
Note payable to bank | - | 300,000 | ||
Operating lease liabilities, current | 207,824 | 190,765 | ||
Income taxes payable | 1,654,200 | 592,661 | ||
Short term loan, net of finance charges | 677,601 | 576,474 | ||
Total current liabilities | 10,548,550 | 7,085,581 | ||
Deferred compensation | 240,000 | 160,000 | ||
Operating lease liabilities, net of current portion | 78,108 | 221,191 | ||
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, 5,430,374 and 5,386,723 shares issued and outstanding | 130,111 | 130,068 | ||
Additional paid - in capital | 8,338,158 | 8,079,774 | ||
Accumulated other comprehensive loss | (562,700) | (529,045) | ||
Retained earnings | 7,461,796 | 3,037,924 | ||
Total stockholders' equity | 15,370,365 | 10,721,721 | ||
Total Liabilities and Stockholders' Equity | $ 26,237,023 | $ 18,188,493 | ||
LEATT CORPORATION | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 | ||||
2020 | 2019 | |||
Revenues | ||||
Cost of Revenues | 21,215,669 | 15,311,013 | ||
Gross Profit | 17,388,620 | 13,006,804 | ||
Product Royalty Income | 88,748 | 46,460 | ||
Operating Expenses | ||||
Salaries and wages | 3,480,181 | 3,271,018 | ||
Commissions and consulting expenses | 586,509 | 357,460 | ||
Professional fees | 793,859 | 725,986 | ||
Advertising and marketing | 2,167,445 | 1,989,959 | ||
Office lease and expenses | 306,855 | 279,827 | ||
Research and development costs | 1,522,758 | 1,491,155 | ||
Bad debt expense | 71,862 | 203,253 | ||
General and administrative expenses | 1,879,286 | 1,952,121 | ||
Intangible asset write-off | - | 41,511 | ||
Depreciation | 832,216 | 760,217 | ||
Total operating expenses | 11,640,971 | 11,072,507 | ||
Income from Operations | 5,836,397 | 1,980,757 | ||
Other Income (Expenses) | ||||
PPP loan forgiveness income | 210,732 | - | ||
Interest and other income (expenses), net | (4,724) | (38,300) | ||
Total other income (expenses) | 206,008 | (38,300) | ||
Income Before Income Taxes | 6,042,405 | 1,942,457 | ||
Income Taxes | 1,618,533 | 566,729 | ||
Net Income Available to Common Shareholders | $ 4,423,872 | $ 1,375,728 | ||
Net Income per Common Share | ||||
Basic | $ 0.82 | $ 0.26 | ||
Diluted | $ 0.74 | $ 0.25 | ||
Weighted Average Number of Common Shares Outstanding | ||||
Basic | 5,390,420 | 5,385,249 | ||
Diluted | 5,990,798 | 5,546,098 | ||
Comprehensive Income | ||||
Net Income | $ 4,423,872 | $ 1,375,728 | ||
Other comprehensive income (loss), net of | ||||
Foreign currency translation | (33,655) | 80,258 | ||
Total Comprehensive Income | $ 4,390,217 | $ 1,455,986 | ||
LEATT CORPORATION | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 | ||||
2020 | 2019 | |||
Cash flows from operating activities | ||||
Net income | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation | 832,216 | 760,217 | ||
Deferred income taxes | (78,700) | (170,900) | ||
Stock-based compensation | 242,093 | 196,670 | ||
Bad debts reserve | (2,819) | 21,305 | ||
Inventory reserve | 7,464 | 26,123 | ||
Gain on sale of property and equipment | (22,189) | (2,592) | ||
PPP loan forgiveness income | (210,732) | - | ||
Intangible asset write-off | - | 41,511 | ||
(Increase) decrease in: | ||||
Accounts receivable | (4,214,998) | (927,986) | ||
Inventory | (1,022,324) | (3,866,084) | ||
Payments in advance | (357,622) | 25,810 | ||
Prepaid expenses and other current assets | (980,123) | 118,166 | ||
Income tax refunds receivable | (2,964) | - | ||
Deposits | (7,057) | (1,262) | ||
Increase (decrease) in: | ||||
Accounts payable and accrued expenses | 2,599,578 | 2,646,499 | ||
Income taxes payable | 1,061,539 | 522,403 | ||
Deferred compensation | 80,000 | 80,000 | ||
Net cash provided by operating activities | 2,347,234 | 845,608 | ||
Cash flows from investing activities | ||||
Capital expenditures | (1,477,454) | (874,104) | ||
Proceeds from sale of property and equipment | 25,713 | 11,088 | ||
Increase in short-term investments, net | (18) | (7) | ||
Net cash used in investing activities | (1,451,759) | (863,023) | ||
Cash flows from financing activities | ||||
Issuance of common stock | - | 15,000 | ||
Proceeds from note payable to bank, net | (300,000) | 300,000 | ||
Proceeds from Paycheck Protection Program Loan | 210,732 | - | ||
Proceeds from (repayments of ) short-term loan, net | 101,127 | (5,654) | ||
Net cash provided by financing activities | 11,859 | 309,346 | ||
Effect of exchange rates on cash and cash equivalents | (13,156) | 71,033 | ||
Net increase in cash and cash equivalents | 894,178 | 362,964 | ||
Cash and cash equivalents - beginning of year | 2,072,864 | 1,709,900 | ||
Cash and cash equivalents - end of year | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid for interest | $ 32,015 | $ 22,814 | ||
Cash paid for income taxes | $ 617,282 | $ 264,381 | ||
Other noncash investing and financing activities | ||||
Common stock issued for services | $ 242,093 | $ 196,670 | ||
Common stock issued for accrued leave | $ 16,334 | $ - | ||
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SOURCE Leatt Corporation
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