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CAPE TOWN, South Africa, Aug. 9, 2024 /PRNewswire/ -- Leatt Corporation (OTCQB: LEAT ), a leading developer and marketer of head-to-toe protective equipment for Moto, MTB, and a wide range of extreme and high-velocity sports, today announced financial results for the second quarter ending June 30, 2024.
All financial numbers are in U.S. dollars.
Second Quarter 2024 Summary
Revenues for the second quarter were $10.08 million, down 18%, compared to the second quarter of 2023.
Cash flows provided by operations were $2.99 million for the six months ended June 30, 2024.
Income (loss) from operations for the second quarter was $(1.13) million, down 186%, compared to the second quarter of 2023.
Cash and cash equivalents increased 17% to $13.33 million for the six months ended June 30, 2024.
Successful launch of new product category, a portfolio of bicycle components including handlebars, grips, and ultra-light stems and pedals, at Eurobike Tradeshow.
Chief Executive Officer Sean Macdonald commented, "We are beginning to see progress in a return to sustainable growth. Encouraging growth in sales at the consumer and dealer direct level have started to filter through to ordering from our distributors and we have started to see a level of growth in some key product categories. While there are still some challenging industry and economic headwinds globally as inventory is digested, we believe that this promising uptick in ordering patterns will filter through to our results in due course and is a trend that will contribute to growth over the next few periods and beyond.
"Total global revenues for the second quarter of 2024 were $10.08 million, an 18% decrease from last year's second quarter. U.S. sales increased to $3.73 million and international sales decreased to $6.34 million. Consumer direct sales increased by 19% and dealer direct sales increased by 14%, which we believe is a testament to strong brand recognition and the success of our drive to reach a wider group of consumers globally. While sales to our global distributors decreased by 33% as distributors continued to manage industry-wide stocking dynamics, current ordering patterns and the addition of some very exciting new distributor partnerships in the United Kingdom, Europe, and emerging markets are a highlight that we believe will filter through to our results over the next several quarters.
"At a product level, declines in helmet sales and our other products, parts, and accessory category during the second quarter were partially offset by increases in body armor sales and neck braces. It was particularly encouraging to see neck brace, body and limb protection, knee brace, and MTB apparel returning to growth on a global basis. We also continued to ship promising ADV apparel orders during the quarter and look forward to delivering a pipeline of innovative product categories to the growing ADV market over the next several quarters.
"Cash increased by $1.98 million, to $13.33 million, with cash flows provided by operations of $2.99 million for the six months ended June 30, 2024. Our liquidity also continues to improve as our team continues to manage working capital efficiently.
"On a year-to-date basis, despite a decrease in revenues and an increase in costs, we generated cash flows from operating activities of $2.99 million as of June 30, 2024, reflecting the robustness of our business model.
"Our inventory levels continue to stabilize and have decreased by $5.65 million or 28% over the last six months, as we continue to seek opportunities to turn over slower moving inventory."
Financial Summary
Total revenues for the second quarter of 2024 were $10.08 million, down 18%, compared to $12.35 million for the second quarter of 2023. The decrease in worldwide revenues is attributable to a $2.09 million decrease in helmet sales and a $0.44 million decrease in other products, parts, and accessory sales, which were partially offset by a $0.21 million increase in body armor sales and a $0.05 million increase in neck brace sales, as our distributors continue to constrain ordering and manage industry-wide stocking dynamics.
Income (loss) from operations for the second quarter of 2024 was $(1.13) million, down 186%, compared to $1.31 million for the second quarter of 2023.
Net income (loss) for the second quarter of 2024 was $(1.06) million, or $(0.17) per basic and $(0.16) per diluted share, down 236%, as compared to net income of $776,139, or $0.13 per basic and $0.12 per diluted share, for the second quarter of 2023.
Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations.
At June 30, 2024, the Company had cash and cash equivalents of $13.33 million and a current ratio of 9.6:1, compared to a current ratio of 6.3:1 at June 30, 2023.
Founder and Chairman Dr. Christoper Leatt remarked, "Our new MTB portfolio of bicycle components including handlebars, grips, and ultra-light stems and pedals, are all more examples of Leatt innovation, design, and technical expertise."
Business Outlook
Mr. Macdonald added, "Although there are still some challenging industry and economic headwinds globally, inventory continues to be digested, participation remains strong, and ordering patterns continue to improve and have started to filter through to our international distributors. We also continue to see very encouraging growth trends at the dealer and consumer level as the demand for Leatt products continues to be very encouraging.
"We continue to invest heavily in consumer brand recognition and building out a high-performing team of sales and marketing professionals around the world as industry-wide turbulence presents an opportunity to grow the Leatt family by adding talented team members. Although these investments typically take time to add to our financial results, we believe that investing in brand momentum and building a great team remain cornerstones of our future growth plans.
"We look forward in the coming months to what we believe will be successful global launches of our 2025 product lines for MOTO, MTB, and ADV as our team of developers and engineers continue to strive for product excellence. We expect that the 2025 MTB lineup will include an exciting new category-top-level, innovative bicycle components.
"We are all enthusiastic about the future with our strong portfolio of innovative products in the market and in the pipeline, a multi-channel sales organization that is growing and developing, and a robust balance sheet to fuel brand and revenue growth. We remain confident we are well-positioned for future growth and shareholder value."
Conference Call
The Company will host a conference call at 10:00 am ET on Friday, August 9, 2024, to discuss the 2024 second-quarter results.
Participants should dial into 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, . 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 13748296.
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
Driven by the science of thrill, Leatt Corporation develops head-to-toe personal protective gear for various sports, with a focus on mountain biking and extreme motorsports. This includes the award-winning Leatt-Brace®, a neck brace system considered the gold standard for neck protection when worn in conjunction with a helmet. Leatt products are designed for participants in extreme sports that use motorcycles, bicycles, mountain bikes, all-terrain vehicles, snowmobiles, and other open-air vehicles.
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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 continued impact of the ADV range of products and direct-to-consumer sales on the Company's results of operations; the Company's ability to continue developing a pipeline of innovative products and global industry talent to fuel future growth; the general ability of the Company to achieve its commercial objectives, including development and growth of a multi-channel sales organization; the business strategy, plans and objectives of the Company; 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.
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