LEAT - Leatt Corp Announces Record Breaking Results for Third Quarter 2021

November, 12 2021 08:00 AM Leatt Corp

94% Increase in Global Revenues to $22.1 million;

166% Increase in Net Income to $4.3 million;

Global Year to Date Revenues of 49.3 million

PR Newswire

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

SOURCE Leatt Corporation

Company Name:	Leatt Corp
Stock Symbol:	LEAT
Market:	OTC
Website:	leatt.com