Leatt Corp Financial Results for the Third Quarter 2016:
For the three months ended September 30, 2016, revenues were $4.6 million, with net income of $39,000, or $0.01 per share, as compared to revenues of $4.7 million, with net income of $179,000, or $0.03 per share, for the 2015 third quarter.
For the nine months ended September 30, 2016, revenues were $13.2 million, with net income of $141,000, or $0.03 per share, as compared to revenues of $13.9 million, with net income of $657,000, or $0.13 per share, for the 2015 third quarter.
Total sales in the U.S. in the third quarter were up 33 percent over the third quarter of 2015, and up 19 percent over the first nine months of 2016, compared to the year earlier. Leatt neck brace revenues in the U.S. were up 12 percent for the third quarter compared to the same quarter of 2015.
“We are making solid progress in our overall strategic goal to broaden the scope of Leatt product design and development, targeting new and larger growth markets, year-round sports, and both pro and amateur athletes,” said CEO Sean Macdonald. “We continue to be encouraged during the quarter by our progress in the U.S., the world’s largest geographic market. Our sales and marketing results in the U.S. represents the best example of our strategy, our execution and our operational effectiveness. The U.S. is where we have our closest ties to the consumer and we believe that the progress we are seeing so far there bodes well for our future success.
“We shipped our first ever line of GPX motorcycle apparel to customers around the world during the third quarter, which we view as a tremendous accomplishment. We plan to commence shipping of this product line to the U.S. during the fourth quarter. This product line includes apparel such as gloves, jerseys, pants and jackets, expanding beyond our award-winning protective gear such as neck braces, helmets, knee braces, body armor, hydration systems and other parts and accessories. These new products are already generating an exciting reception in the media and among consumers, which has us all encouraged. In addition, we have a wide variety of other new, innovative products that we plan to launch into the global marketplace in the coming months.”
Founder and Chairman, Dr. Christopher Leatt, added, “Our dedicated team of engineers and designers have created the most extensive pipeline of new products in the history of Leatt. Commencing in the fourth quarter and continuing throughout 2017, we plan to reveal lighter, slimmer, yet more robust knee braces, designed for adults and juniors; the lightest and most comfortable helmets we have ever created for off-road moto sports; new full-face helmets with chin bars and visors for bicyclists; new all mountain and enduro helmets, a modification of our first helmets for more mainstream bicycle use; and our DBX bicycle apparel line. We are excited about the innovations that are queued up for future rollout in the marketplace.”
Mr. Macdonald went on to say that helmet sales, including the GPX 5.5 Composite helmet, the GPX 6.5 Carbon helmet, the DBX 6.0 Carbon helmet and the DBX 5.0 Composite helmets, accounted for $1.3 million dollars of revenues for the year to date.
“Our body armor and neck brace sales outside the U.S. continue to be negatively impacted by the strengthening of the U.S. dollar against the local currencies of our customers,” remarked Macdonald, “But we believe that our ongoing efforts will return improved results in 2017 and beyond.”
Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. At September 30, 2016, the Company had cash and cash equivalents of $1 million and there was no long term debt.
“The early reviews for our new products, including new helmets and new apparel, have been very positive,” said Macdonald. “That reception has given us confidence that we can continue to build on the traction we have developed in the U.S., and throughout the world in the longer term. Dr. Leatt and his team of engineers continue to advance the Leatt brand, known worldwide for safety and performance, and for the second year in a row the Leatt neck brace was rated Number 1 neck protection to buy in the VitalMX audience review. We expect that with our planned launch of new products in the coming months, we will create new revenue streams in a variety of new and more consumer-oriented markets.
“Finally, our riders continue to be our best ambassadors. We are extremely proud of the accomplishments this year of team rider Danny Hart, who won an unprecedented three UCI Downhill World Cup rounds in a row and the 2016 UCI Mountain Bike World championships. Our riders are our grassroots innovators and marketers and it is an honor to have them as part of the Leatt family.”
The Company will host a conference call at 10:00 am ET on November 11, 2016, to discuss the 2016 third quarter results.
Participants should dial in to the call ten minutes before the scheduled time, using the following numbers: 1-888-348-8777 (USA) or +1-412-902-4245 (international) to access the call.
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.
An audio replay of the conference call will be available for seven days and can be accessed by dialing 1-844-512-2921 (USA) or +1-412-317-6671 (international) and using passcode 10096164.
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.