Leatt Corp Announces Record Breaking Results for Second Quarter 2021
CAPE TOWN, South Africa, Aug. 12, 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 2021 second quarter. All financial numbers are in U.S. dollars.
Second Quarter 2021 and Recent Highlights:
- Record second quarter revenues of $14.3 million, up 106%, compared to the 2020 second quarter
- Record second quarter net income of $2.4 million, up 257%, compared to the 2020 second quarter
- Income from operations of $3.1 million, up 246%, compared to the 2020 second quarter
- Cash and cash equivalents increased to $3.7 million, compared to $2.6 million in 2020
- Earnings per share increased to $0.44 up 238%, compared to $0.13 in the 2020 second quarter
CEO Sean Macdonald commented: "We are very pleased with our 2021 second quarter results as we continue to create awareness of Leatt as a global consumer brand to drive demand for our exceptional, award-winning products and reach a wider global audience. The second quarter was yet another ground-breaking and record-setting quarter for Leatt. We achieved strong double-digit growth across all of our 'Head-to-Toe' product categories and in every major geographical area in which we sell our products.
"Global revenues for the second quarter more than doubled to $14.3 million, an increase of 106% over the 2020 second quarter. Net income for the second quarter rose to $2.4 million, an increase of 257% over the 2020 second quarter.
"For the first six months of 2021, revenues were $27.2 million, up 88% over the same period last year. Net income for the first six months was $4.5 million, up 331% over the same period last year.
"The numbers for the quarter demonstrate our ability to grow revenues strongly while remaining operationally efficient. The increase in the second quarter of 2021 was driven by a 46% increase in neck brace sales, a 107% increase in body armor sales, a 91% increase in helmet sales, and a 165% increase in sales of other products, parts, and accessories.
"We continued to build steady momentum during the 2021 second quarter, which marked the fourth quarter in a row of record-breaking revenue growth, and the 13th consecutive quarter of year-on-year revenue growth. We believe that our ongoing growth is a testament to the success of our strategy that is focused on building Leatt into a global consumer brand by growing our product categories to anticipate and serve the needs of our riders.
"Consumer spending on outdoor products continues to increase as people around the world participate widely in outdoor activities that provide some escape from the Covid-19 pandemic, a trend that we expect to continue."
Founder and Chairman Dr. Christopher Leatt remarked: "Our design and engineering team continues to be energized by the surging consumer demand levels and the recognition our products are receiving from athletes around the world, the media and our business partners. We look forward to presenting our 2022 product line to consumers around the world in the second half of this year."
Financial Summary
Total revenues for the second quarter of 2021 increased to $14.3 million, up 106%, compared to $6.9 million for the second quarter of 2020.
Income from operations for the second quarter of 2021 increased to $3.1 million, up 246%, compared to $908,820 for the second quarter of 2020.
Net income for the second quarter of 2021 was $2.4 million, or $0.44 per basic and $0.39 per diluted share, compared to $674,507, or $0.13 per basic and $0.12 per diluted share.
Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. At June 30, 2021, the Company had cash and cash equivalents of $3.7 million, a current ratio of 4.3:1, and there was no long-term debt.
Business Outlook
Mr. Macdonald added: "We expect to continue making substantial progress in building the Leatt brand globally as we refine and expand our suite of protective gear to meet the surging demand around the world for our exceptional 'Head-to-Toe' offering of protective gear for off-road motorcycle and MTB riders.
"We are working closely with our global supply chain team, particularly in Asia, to streamline and optimize our processes to mitigate rising raw material and logistics costs to maintain a stable and predictable supply of our product pipeline. We continue to differentiate the Leatt brand and build on our ongoing momentum to create long-term shareholder value."
Conference Call
The Company will host a conference call at 10:00 am ET on Thursday, August 12, 2021, to discuss the 2021 second 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) and using passcode 13722133.
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 mitigate rising raw material and logistics costs to maintain a stable global supply chain; the ability of the Company to mitigate any future impact of COVID-19 on its business operations and continue to deliver, and financially benefit from global market acceptance of its pipeline of new revolutionary branded products; 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, 2021 | December 31, 2020 | |||
Unaudited | Audited | |||
Current Assets | ||||
Cash and cash equivalents | $ 3,748,580 | $ 2,967,042 | ||
Short-term investments | 58,259 | 58,257 | ||
Accounts receivable, net | 5,084,196 | 7,173,829 | ||
Inventory, net | 6,151,488 | 9,670,036 | ||
Payments in advance | 1,202,796 | 805,098 | ||
Income tax refunds receivable | - | 2,964 | ||
Prepaid expenses and other current assets | 6,098,975 | 2,109,190 | ||
Total current assets | 22,344,294 | 22,786,416 | ||
Property and equipment, net | 2,771,130 | 3,052,276 | ||
Operating lease right-of-use assets, net | 193,583 | 285,932 | ||
Deferred tax asset, net | 78,700 | 78,700 | ||
Other Assets | ||||
Deposits | 33,932 | 33,699 | ||
Total Assets | $ 25,421,639 | $ 26,237,023 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Liabilities | ||||
Accounts payable and accrued expenses | $ 2,631,184 | $ 8,008,925 | ||
Operating lease liabilities, current | 193,583 | 207,824 | ||
Income taxes payable | 2,029,579 | 1,654,200 | ||
Short term loan, net of finance charges | 359,881 | 677,601 | ||
Total current liabilities | 5,214,227 | 10,548,550 | ||
Deferred compensation | 280,000 | 240,000 | ||
Operating lease liabilities, net of current portion | - | 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, 5,442,774 shares issued | ||||
and outstanding | 130,111 | 130,111 | ||
Additional paid - in capital | 8,393,178 | 8,338,158 | ||
Accumulated other comprehensive loss | (530,159) | (562,700) | ||
Retained earnings | 11,931,282 | 7,461,796 | ||
Total stockholders' equity | 19,927,412 | 15,370,365 | ||
Total Liabilities and Stockholders' Equity | $ 25,421,639 | $ 26,237,023 | ||
LEATT CORPORATION | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30 | June 30 | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Unaudited | Unaudited | Unaudited | Unaudited | |||||
Revenues | $ 14,300,559 | $ 6,943,130 | $ 27,197,034 | $ 14,485,004 | ||||
Cost of Revenues | 8,107,020 | 3,688,623 | 14,951,541 | 7,707,044 | ||||
Gross Profit | 6,193,539 | 3,254,507 | 12,245,493 | 6,777,960 | ||||
Product Royalty Income | 58,479 | 3,182 | 83,289 | 4,659 | ||||
Operating Expenses | ||||||||
Salaries and wages | 912,811 | 622,846 | 1,837,348 | 1,467,452 | ||||
Commissions and consulting expenses | 215,986 | 103,906 | 436,648 | 187,342 | ||||
Professional fees | 123,501 | 213,318 | 461,256 | 534,905 | ||||
Advertising and marketing | 518,153 | 357,028 | 1,035,733 | 981,231 | ||||
Office lease and expenses | 87,200 | 72,386 | 174,573 | 146,200 | ||||
Research and development costs | 445,156 | 336,608 | 850,261 | 724,812 | ||||
Bad debt expense (recovery) | (51,732) | 41,900 | 14,093 | 26,920 | ||||
General and administrative expenses | 609,760 | 410,128 | 1,138,359 | 930,243 | ||||
Depreciation | 242,401 | 190,749 | 478,936 | 382,801 | ||||
Total operating expenses | 3,103,236 | 2,348,869 | 6,427,207 | 5,381,906 | ||||
Income from Operations | 3,148,782 | 908,820 | 5,901,575 | 1,400,713 | ||||
Other Income (Expenses) | ||||||||
Interest and other income (expenses), net | 3,948 | (9,477) | (59) | (18,106) | ||||
Total other income (expenses) | 3,948 | (9,477) | (59) | (18,106) | ||||
Income Before Income Taxes | 3,152,730 | 899,343 | 5,901,516 | 1,382,607 | ||||
Income Taxes | 744,082 | 224,836 | 1,432,030 | 345,652 | ||||
Net Income Available to Common Shareholders | $ 2,408,648 | $ 674,507 | $ 4,469,486 | $ 1,036,955 | ||||
Net Income per Common Share | ||||||||
Basic | $ 0.44 | $ 0.13 | $ 0.82 | $ 0.19 | ||||
Diluted | $ 0.39 | $ 0.12 | $ 0.72 | $ 0.19 | ||||
Weighted Average Number of Common Shares Outstanding | ||||||||
Basic | 5,438,686 | 5,386,723 | 5,434,553 | 5,386,723 | ||||
Diluted | 6,172,686 | 5,548,476 | 6,168,553 | 5,548,476 | ||||
Comprehensive Income | ||||||||
Net Income | $ 2,408,648 | $ 674,507 | $ 4,469,486 | $ 1,036,955 | ||||
Other comprehensive income, net of $0 income taxes in 2021 and 2020 | ||||||||
Foreign currency translation | 60,893 | 54,897 | 32,541 | (257,390) | ||||
Total Comprehensive Income | $ 2,469,541 | $ 729,404 | $ 4,502,027 | $ 779,565 | ||||
LEATT CORPORATION | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 | ||||
2021 | 2020 | |||
Cash flows from operating activities | ||||
Net income | $ 4,469,486 | $ 1,036,955 | ||
Adjustments to reconcile net income to net cash provided by (used in) | ||||
operating activities: | ||||
Depreciation | 478,936 | 382,801 | ||
Stock-based compensation | 55,020 | 65,942 | ||
Bad debts reserve | 11,763 | 24,975 | ||
Inventory reserve | 39,995 | (17,729) | ||
(Gain) Loss on sale of property and equipment | 5,767 | (351) | ||
(Increase) decrease in: | ||||
Accounts receivable | 2,077,870 | 453,023 | ||
Inventory | 3,478,553 | 3,025,131 | ||
Payments in advance | (397,698) | (208,455) | ||
Prepaid expenses and other current assets | (3,989,785) | (895,254) | ||
Income tax refunds receivable | 2,964 | - | ||
Deposits | (233) | 1,212 | ||
Increase (decrease) in: | ||||
Accounts payable and accrued expenses | (5,377,741) | (2,998,745) | ||
Income taxes payable | 375,379 | 275,651 | ||
Deferred compensation | 40,000 | 40,000 | ||
Net cash provided by operating activities | 1,270,276 | 1,185,156 | ||
Cash flows from investing activities | ||||
Capital expenditures | (191,443) | (107,570) | ||
Proceeds from sale of property and equipment | - | 351 | ||
Increase in short-term investments, net | (2) | (12) | ||
Net cash used in investing activities | (191,445) | (107,231) | ||
Cash flows from financing activities | ||||
Repayment of note payable to bank, net | - | (300,000) | ||
Proceeds from Paycheck Protection Program loan | - | 210,732 | ||
Repayments of short-term loan, net | (317,720) | (253,582) | ||
Net cash used in financing activities | (317,720) | (342,850) | ||
Effect of exchange rates on cash and cash equivalents | 20,427 | (180,501) | ||
Net increase in cash and cash equivalents | 781,538 | 554,574 | ||
Cash and cash equivalents - beginning of period | 2,967,042 | 2,072,864 | ||
Cash and cash equivalents - end of period | $ 3,748,580 | $ 2,627,438 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid for interest | $ 16,379 | $ 19,883 | ||
Cash paid for income taxes | $ 1,088,360 | $ 70,000 | ||
Other noncash investing and financing activities | ||||
Common stock issued for services | $ 55,020 | $ 65,942 | ||
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SOURCE Leatt Corporation