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Leatt Corp Announces Results for Second Quarter 2022

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Leatt Corporation (OTCQB: LEAT) reported strong financial results for Q2 2022, achieving global revenues of $17.9 million, a 25% increase year-over-year. Year-to-date revenues surged 55% to $42.2 million, while net income for the same period rose 55% to $6.9 million, translating to an EPS of $1.20. Despite challenges such as port congestion affecting domestic sales, international revenues grew 45%. The company continues to invest in sales and distribution, aiming to expand its market presence in protective gear for extreme sports.

Positive
  • Q2 2022 global revenues of $17.9 million, up 25% YoY.
  • Year-to-date revenues of $42.2 million, a 55% increase.
  • Net income for the first six months increased to $6.9 million, up 55%.
  • EPS rose to $1.20 for the first half of 2022.
  • International revenues increased by 45% in Q2 2022.
Negative
  • Domestic sales contracted due to port congestion issues.
  • Neck brace sales decreased by 17% compared to Q2 2021.

Year-to-date revenues increase 55%;

Year-to-date net income increases 55%;

Year-to-date EPS increases to $1.20

CAPE TOWN, South Africa, Aug. 11, 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 second quarter ending June 30, 2022. All financial numbers are in U.S. dollars.

Second Quarter 2022 Highlights

  • Global revenues of $17.9 million, up 25%, compared to second quarter 2021
  • Income from operations of $3.7 million, up 18%, compared to second quarter 2021
  • Net income of $2.7 million, up 13%, compared to second quarter 2021
  • Earnings per basic share of $0.47 up 7%, compared to second quarter 2021
  • Solid investment in sales and distribution capacity globally to fuel growth

Chief Executive Officer, Sean Macdonald commented: "The 2022 second quarter was our 17th consecutive quarter of year-over-year revenue growth with results that continue to demonstrate our ability to grow revenue, gain sales traction in important product categories and build Leatt as a global consumer brand recognized for innovation and exhilaration.

"Global revenues for the first six months of 2022 were $42.2 million, up 55%, compared to $27.2 million for the same period last year.  Net income for the first six months was $6.9 million, up 55%, compared to $4.5 million for the comparative period and earnings per basic share increased to $1.20 as compared to $0.82 for the first six months of 2021.

"We continue to achieve double-digit revenue growth in all of our expanding product categories, with the exception of neck braces, our most established category, where sales decreased compared to a very strong second quarter of 2021. Apparel, helmet and off-road motorcycle boot sales have been particularly strong, energizing our entire team and our international distribution network. We continue to build out a global team of sales and brand managers who are focused on specific regional market dynamics and support for our distribution partners and dealer networks.

"Although port congestion created some restocking issues for our dealers that ulitmately resulted in a contraction in domestic sales during the second quarter and first six months of 2022, international revenues for the second quarter of 2022 were $13.9 million, up 45% over the same period last year. We have experienced an easing in these delays as we continue to drive consumer demand to stores with coordinated marketing campaigns and remain committed to investing heavily in our U.S. sales and distribution capacity to reach a wider group of MOTO and MTB dealers around the country."

Founder and Chairman Dr. Christopher Leatt remarked: "We continue to develop an exciting pipeline of innovative and consumer-centric products that are well-differentiated and rigorously tested by our team of dedicated product developers, engineers and passionate family of professional riders and athletes."

Financial Summary

Total revenues for the second quarter of 2022 increased to $17.9 million, up 25%, compared to $14.3 million for the second quarter of 2021. 

The increase was driven by a 11% increase in body armor sales, a 132% increase in helmet sales, and a 51% increase in other products, parts and accessories, that were partially offset by a 17% decrease in neck brace sales

Income from operations for the second quarter of 2022 increased to $3.7 million, up 18%, compared to $3.1 million for the second quarter of 2021.

Net income for the second quarter of 2022 increased to $ 2.7 million, or $0.47 per basic and $0.44 per diluted share, up 13%, compared to $2.4 million, or $0.44 per basic and $0.39 per diluted share, for the second quarter of 2021.

Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations.  At June 30, 2022, the Company had cash and cash equivalents of $4.95 million and a current ratio of 3.8:1.

Business Outlook

Mr. Macdonald added: "We are making strong progress and are very aware of the potential economic headwinds that the current environment may reveal, but we remain enthusiastic about our ability to gain traction.  Many of our new categories that have launched extremely well are still in their infancy in terms of market share and their potential to meet the needs of all levels of riders worldwide.

"Our MTB and MOTO customers around the world have remained enthusiastic about the Leatt brand and our 'head-to-toe' offerings of exceptional protective gear over the last several quarters, and we expect that the global trend of consumer participation in outdoor riding activities  will continue.

"Our team remains focused on our strong ability to invest in areas that fuel growth, control costs and operate efficiently in the midst of a widespread, global inflationary environment. We continue to monitor customer stocking, consumer buying patterns and worldwide economic and geo-political risks closely and are committed to building Leatt on a sustainable basis that creates lasting, on-going shareholder value."

Conference Call

The Company will host a conference call at 10:00 am ET on Thursday, August 11, 2022, to discuss the second 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 13731945.

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 FacebookTwitter, 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










June 30, 2022


December 31, 2021




Unaudited


Audited


Current Assets






  Cash and cash equivalents


$                  4,949,771


$                       5,022,436


  Short-term investments


58,263


58,262


  Accounts receivable, net


13,823,969


12,660,936


  Inventory, net


21,853,273


21,081,481


  Payments in advance


1,351,666


1,610,640


  Prepaid expenses and other current assets


3,449,089


4,178,427


    Total current assets


45,486,031


44,612,182








Property and equipment, net


2,959,009


3,128,086


Operating lease right-of-use assets, net


1,239,776


1,393,213








Other Assets






  Deposits


41,333


33,339








Total Assets


$                49,726,149


$                     49,166,820








LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities






   Accounts payable and accrued expenses


$                  7,967,771


$                     14,617,671


   Note payable, current


88,950


83,270


   Operating lease liabilities, current


301,640


318,621


   Income taxes payable


3,442,038


2,738,818


   Short term loan, net of finance charges


227,180


975,025


      Total current liabilities


12,027,579


18,733,405








Deferred compensation


360,000


320,000


Note payable, net of current portion


147,423


189,249


Operating lease liabilities, net of current portion


938,136


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


9,809,539


9,230,847


   Accumulated other comprehensive loss


(904,316)


(779,268)


   Retained earnings


26,985,908


20,036,233


      Total stockholders' equity


36,024,411


28,620,974








Total Liabilities and Stockholders' Equity


$                49,726,149


$                     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


Six Months Ended



June 30


June 30



2022


2021


2022


2021



Unaudited


Unaudited


Unaudited


Unaudited










Revenues


$        17,938,310


$        14,300,559


$        42,166,418


$        27,197,034










Cost of Revenues


10,294,238


8,107,020


24,895,256


14,951,541










Gross Profit


7,644,072


6,193,539


17,271,162


12,245,493










Product Royalty Income


46,971


58,479


125,810


83,289










Operating Expenses









   Salaries and wages


1,325,177


912,811


2,623,139


1,837,348

   Commissions and consulting expenses


150,634


215,986


313,220


436,648

   Professional fees


79,653


123,501


338,768


461,256

   Advertising and marketing


746,114


518,153


1,360,004


1,035,733

   Office lease and expenses


193,878


87,200


400,899


174,573

   Research and development costs


480,843


445,156


1,014,543


850,261

   Bad debt expense (recovery)


(13,969)


(51,732)


4,355


14,093

   General and administrative expenses


710,351


609,760


1,422,103


1,138,359

   Depreciation


287,943


242,401


564,867


478,936

       Total operating expenses


3,960,624


3,103,236


8,041,898


6,427,207










Income from Operations


3,730,419


3,148,782


9,355,074


5,901,575










Other Income (Expenses)









   Interest and other expenses, net


(8,349)


3,948


(2,192)


(59)

      Total other income (expenses)


(8,349)


3,948


(2,192)


(59)










Income Before Income Taxes


3,722,070


3,152,730


9,352,882


5,901,516










Income Taxes


995,150


744,082


2,403,207


1,432,030










Net Income Available to Common Shareholders


$          2,726,920


$          2,408,648


$          6,949,675


$          4,469,486










Net Income per Common Share









   Basic


$                   0.47


$                   0.44


$                   1.20


$                   0.82

   Diluted


$                   0.44


$                   0.39


$                   1.12


$                   0.72










Weighted Average Number of Common Shares Outstanding







   Basic


5,815,285


5,438,686


5,790,510


5,434,553

   Diluted


6,255,537


6,172,686


6,230,763


6,168,553










Comprehensive Income









    Net Income


$          2,726,920


$          2,408,648


$          6,949,675


$          4,469,486

    Other comprehensive income, net of $0 deferred income







        taxes in 2022 and 2021









       Foreign currency translation


(382,782)


60,893


(125,048)


32,541










       Total Comprehensive Income


$          2,344,138


$          2,469,541


$          6,824,627


$          4,502,027










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



















 

LEATT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS  ENDED JUNE 30, 2022 AND 2021



2022


2021

Cash flows from operating activities





   Net income


$          6,949,675


$           4,469,486

   Adjustments to reconcile net income to net cash provided by





     operating activities:





     Depreciation


564,867


478,936

     Stock-based compensation


323,010


55,020

     Bad debts reserve


(7,871)


11,763

     Inventory reserve


94,269


39,995

     (Gain) loss on sale of property and equipment


(22,905)


5,767

    (Increase) decrease in:





       Accounts receivable


(1,155,162)


2,077,870

       Inventory


(866,061)


3,478,553

       Payments in advance


258,974


(397,698)

       Prepaid expenses and other current assets


729,338


(3,989,785)

       Income tax refunds receivable


-


2,964

       Deposits


(7,994)


(233)

    Increase (decrease) in:





       Accounts payable and accrued expenses


(6,649,900)


(5,377,741)

       Income taxes payable


703,220


375,379

       Deferred compensation


40,000


40,000

          Net cash provided by operating activities


953,460


1,270,276






Cash flows from investing activities





    Capital expenditures


(435,537)


(191,443)

    Proceeds from sale of property and equipment


42,773


-

    Increase in short-term investments, net


(1)


(2)

          Net cash used in investing activities


(392,765)


(191,445)






Cash flows from financing activities





    Issuance of common stock


255,800


-

    Repayment of note payable to bank


(36,146)


-

    Repayment of short-term loan, net


(747,845)


(317,720)

          Net cash used in financing activities


(528,191)


(317,720)






Effect of exchange rates on cash and cash equivalents


(105,169)


20,427






Net increase (decrease)  in cash and cash equivalents


(72,665)


781,538






Cash and cash  equivalents - beginning of period


5,022,436


2,967,042






Cash and cash equivalents - end of period


$          4,949,771


$           3,748,580






SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:




  Cash paid for interest


$               30,178


$                16,379

  Cash paid for income taxes


$          1,699,987


$           1,088,360






  Other noncash investing and financing activities





    Common stock issued for services


$             323,010


$                55,020

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



 

Cision View original content:https://www.prnewswire.com/news-releases/leatt-corp-announces-results-for-second-quarter-2022-301604019.html

SOURCE Leatt Corporation

FAQ

What were Leatt Corporation's Q2 2022 revenues and growth?

Leatt Corporation reported Q2 2022 revenues of $17.9 million, reflecting a 25% increase compared to Q2 2021.

How did Leatt's year-to-date net income perform in 2022?

Year-to-date net income for Leatt increased 55% in 2022, reaching $6.9 million.

What was Leatt's EPS for the first half of 2022?

Leatt's earnings per share (EPS) increased to $1.20 for the first half of 2022.

How did international revenues perform for Leatt in Q2 2022?

In Q2 2022, Leatt's international revenues increased by 45% compared to the same period last year.

What challenges did Leatt face in 2022 regarding domestic sales?

Leatt experienced domestic sales contraction due to port congestion issues affecting inventory restocking.

LEATT CORP

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