Leatt Corp Announces Results for the First Quarter 2023
First Quarter 2023 and Recent Highlights
- Global revenues of
$13.1 million 46% , compared to the record-breaking first quarter of 2022. - Gross Profit increased to
44% as supply chain constraints continue to improve. - Cash and cash equivalents increased
60% to$11.4 million $4.2 million - Cash provided by operating activities of
$5.3 million - 2023 Design & Innovation Awards for Mono Suit MTB HydraDri 5.0 and MTB Enduro Helmet.
- Partnership with Orbea Leatt Speed Company Racing Team and Expansion into Marathon Endurance Segment.
CEO, Sean Macdonald, commented: "The wider MOTO and MTB industry continues to experience a variety of post-Covid issues including supply chain dynamics that have created challenging stocking and inventory issues. Although we continue to see consumer demand for Leatt products, the first quarter of 2023 was particularly challenging in terms of growth in comparison with the 2022 period. The first quarter of 2022 was by far the strongest quarter in our company's history in terms of revenue, which increased
"Global revenues for the first quarter were
"Gross profit as a percentage of sales increased to
"We are very encouraged by the increased Leatt activity on both our own consumer direct channels and those of our international e-commerce partners. Increased Leatt.com consumer purchasing continued to grow during the first quarter of 2023, with consumer direct sales increasing by
"Our team of sales and brand managers covering key established and emerging global markets are working closely with our distribution partners to facilitate a strong Leatt presence at the dealer level and react to fluid market conditions. We continue to focus on building and refining a strong multi-channel sales organization that has the ability to leverage our 'head-to-toe' offering of exceptional products."
Founder and Chairman, Dr. Christopher Leatt, remarked: "Our design and engineering team, in collaboration with our team riders, continues to deliver an exceptional product pipeline and product offerings that are recognized throughout the industry. We believe that this continued focus on excellence in product innovation will allow us to gain market share moving forward."
Financial Summary
Total revenues for the first quarter of 2023 were
The decrease in global revenues is attributable to a
Income from operations for the first quarter of 2023 was
Net income for the first quarter of 2023 was
Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. At March 31, 2023, the Company had cash and cash equivalents of
Business Outlook
Mr. Macdonald added: "Despite the variety of post-Covid challenges, we continue to push hard and to focus on the areas that we can control—strong brand building, a global, multi-channel, professional sales organization, a pipeline of exceptional products, a plan to reach a much wider rider community and continued financial resilience. We believe that our strengths in these areas will overcome current industry stocking dynamics and product stock will get digested, rider participation will remain strong and we will return to our track record of double-digit growth.
"The increased activity on the leatt.com site, with consumer direct sales now representing
"Many of our product categories, such as our innovative helmets, knee braces, off-road motorcycle boots and mountain biking shoes, and other apparel, are still in their infancy and show potential to meet the needs of riders of all levels and contribute to exponential growth. We are particularly excited about our entries into much wider segments of the MTB and MOTO markets in the second half of the year. We believe that this continued expansion will appeal to large total addressable markets.
"Although the results of the first quarter of 2023 were particularly challenging in the context of distributor and dealer adjustments to ordering patterns as the industry continues to digest areas of elevated stocking levels due to post-Covid supply chain dynamics, we believe that the onset of the delayed spring season will mean strong consumer participation in outdoor activities as we look towards the second half of 2023."
Conference Call
The Company will host a conference call at 10:00 am ET on Thursday, May 11, 2023, to discuss the first quarter 2023 results.
Participants should dial in to the call ten minutes before the scheduled time, using the following numbers: 1-877-407-9716 (
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 (
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 in two-wheeled sports 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 double digit 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 to meet increased 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 | ||||
March 31, 2023 | December 31, 2022 | |||
Unaudited | Audited | |||
Current Assets | ||||
Cash and cash equivalents | $ 11,372,775 | $ 7,102,945 | ||
Accounts receivable, net | 9,529,007 | 12,839,597 | ||
Inventory, net | 19,826,662 | 22,805,462 | ||
Payments in advance | 1,015,125 | 1,047,137 | ||
Deferred asset, net | 240,879 | 1,016,815 | ||
Prepaid expenses and other current assets | 3,294,498 | 2,878,112 | ||
Total current assets | 45,278,946 | 47,690,068 | ||
Property and equipment, net | 3,151,033 | 3,104,336 | ||
Operating lease right-of-use assets, net | 1,018,609 | 1,092,170 | ||
Other Assets | ||||
Deposits | 40,304 | 40,796 | ||
Total Assets | $ 49,488,892 | $ 51,927,370 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Liabilities | ||||
Accounts payable and accrued expenses | $ 3,601,788 | $ 6,011,390 | ||
Notes payable, current | 109,436 | 108,398 | ||
Operating lease liabilities, current | 272,974 | 280,743 | ||
Deferred compensation, current | - | 400,000 | ||
Income taxes payable | 3,487,567 | 3,382,700 | ||
Short term loan, net of finance charges | 645,758 | 1,030,196 | ||
Total current liabilities | 8,117,523 | 11,213,427 | ||
Notes payable, net of current portion | 115,713 | 141,967 | ||
Operating lease liabilities, net of current portion | 745,635 | 811,427 | ||
Deferred tax liability, net | 66,200 | 66,200 | ||
Commitments and contingencies | ||||
Stockholders' Equity | ||||
Preferred stock, | ||||
authorized, 120,000 shares issued and outstanding | 3,000 | 3,000 | ||
Common stock, | ||||
authorized, 5,971,340 and 5,971,340 shares issued | ||||
and outstanding | 130,309 | 130,309 | ||
Additional paid - in capital | 10,645,497 | 10,645,497 | ||
Accumulated other comprehensive loss | (1,354,892) | (1,081,143) | ||
Retained earnings | 31,019,907 | 29,996,686 | ||
Total stockholders' equity | 40,443,821 | 39,694,349 | ||
Total Liabilities and Stockholders' Equity | $ 49,488,892 | $ 51,927,370 | ||
The accompanying notes are an integral part of these consolidated financial statements. | ||||
LEATT CORPORATION | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
Three Months Ended | ||||
March 31 | ||||
2023 | 2022 | |||
Unaudited | Unaudited | |||
Revenues | $ 13,079,343 | $ 24,228,108 | ||
Cost of Revenues | 7,306,573 | 14,601,018 | ||
Gross Profit | 5,772,770 | 9,627,090 | ||
Product Royalty Income | 13,136 | 78,839 | ||
Operating Expenses | ||||
Salaries and wages | 1,241,436 | 1,297,962 | ||
Commissions and consulting expenses | 96,324 | 162,586 | ||
Professional fees | 337,243 | 259,115 | ||
Advertising and marketing | 841,094 | 613,890 | ||
Office lease and expenses | 150,240 | 207,021 | ||
Research and development costs | 584,991 | 533,700 | ||
Bad debt expense | 49,395 | 18,324 | ||
General and administrative expenses | 818,179 | 711,752 | ||
Depreciation | 279,810 | 276,924 | ||
Total operating expenses | 4,398,712 | 4,081,274 | ||
Income from Operations | 1,387,194 | 5,624,655 | ||
Other Income (Expenses) | ||||
Interest and other expenses, net | (20,924) | 6,157 | ||
Total other income (expenses) | (20,924) | 6,157 | ||
Income Before Income Taxes | 1,366,270 | 5,630,812 | ||
Income Taxes | 343,049 | 1,408,057 | ||
Net Income Available to Common Shareholders | $ 1,023,221 | $ 4,222,755 | ||
Net Income per Common Share | ||||
Basic | $ 0.17 | $ 0.73 | ||
Diluted | $ 0.16 | $ 0.68 | ||
Weighted Average Number of Common Shares Outstanding | ||||
Basic | 5,971,340 | 5,765,461 | ||
Diluted | 6,279,677 | 6,246,325 | ||
Comprehensive Income | ||||
Net Income | $ 1,023,221 | $ 4,222,755 | ||
Other comprehensive income, net of | ||||
income taxes in 2023 and 2022 | ||||
Foreign currency translation | (273,749) | 257,734 | ||
Total Comprehensive Income | $ 749,472 | $ 4,480,489 | ||
The accompanying notes are an integral part of these consolidated financial statements. | ||||
LEATT CORPORATION | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022 | ||||
2023 | 2022 | |||
Cash flows from operating activities | ||||
Net income | $ 1,023,221 | $ 4,222,755 | ||
Adjustments to reconcile net income to net cash provided by (used in) | ||||
operating activities: | ||||
Depreciation | 279,810 | 276,924 | ||
Stock-based compensation | - | 202,770 | ||
Bad debts reserve | 41,284 | 14,526 | ||
Inventory reserve | 182,529 | 13,656 | ||
Deferred asset allowance | (26,827) | - | ||
(Gain) loss on sale of property and equipment | 13 | (21,590) | ||
(Increase) decrease in: | ||||
Accounts receivable | 3,269,306 | (5,097,249) | ||
Deferred asset | 802,763 | - | ||
Inventory | 2,796,271 | 1,151,008 | ||
Payments in advance | 32,012 | 68,865 | ||
Prepaid expenses and other current assets | (416,386) | 277,927 | ||
Deposits | 492 | (16,411) | ||
Increase (decrease) in: | ||||
Accounts payable and accrued expenses | (2,409,602) | (3,207,604) | ||
Income taxes payable | 104,867 | 1,407,703 | ||
Deferred compensation | (400,000) | 20,000 | ||
Net cash provided by (used in) operating activities | 5,279,753 | (686,720) | ||
Cash flows from investing activities | ||||
Capital expenditures | (368,497) | (260,912) | ||
Proceeds from sale of property and equipment | - | 35,848 | ||
Increase in short-term investments, net | - | (1) | ||
Net cash used in investing activities | (368,497) | (225,065) | ||
Cash flows from financing activities | ||||
Issuance of common stock | - | 255,800 | ||
Repayment of notes payable to bank | (25,216) | (14,394) | ||
Repayment of short-term loan, net | (384,438) | (313,958) | ||
Net cash used in financing activities | (409,654) | (72,552) | ||
Effect of exchange rates on cash and cash equivalents | (231,772) | 207,577 | ||
Net increase (decrease) in cash and cash equivalents | 4,269,830 | (776,760) | ||
Cash and cash equivalents - beginning of period | 7,102,945 | 5,022,436 | ||
Cash and cash equivalents - end of period | $ 4,245,676 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid for interest | $ 21,135 | $ 16,133 | ||
Cash paid for income taxes | $ 237,086 | $ 354 | ||
Other noncash investing and financing activities | ||||
Common stock issued for services | $ - | $ 202,770 | ||
The accompanying notes are an integral part of these consolidated financial statements. | ||||
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SOURCE Leatt Corporation
