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| 8-K - FORM 8-K - Leatt Corp | form8k.htm |
LEATT CORP REPORTS SECOND QUARTER AND FIRST HALF RESULTS
QUARTER REVENUE HIGHER BY 25%, 2015 PROFIT VS 2014 LOSS; CASH UP
NEARLY $500,000 SINCE DECEMBER 31
CAPE TOWN, South Africa, August 13, 2015 – Leatt Corporation (OTCQB: LEAT) today announced its financial results for the second quarter and six months ended June 30, 2015. Leatt Corporation develops and markets protective equipment and ancillary products for all forms of sports, especially extreme high-velocity sports. All financial numbers are in US dollars.
Second Quarter 2015 Financial Performance
Revenue for the second quarter of 2015 was $5.2 million, up 25
percent year-to-year, with net income of $423,937 or $0.08 per share, compared
to revenue of $4.2 million with a net loss of $29,834 or $0.01 loss per share
for the second quarter of 2014.
CEO Sean Macdonald commented, “The second quarter was very strong for Leatt Corp., partly due to our shipment of additional new products and the continued growth of our body armor sales. We saw a rewarding uptake on our new Airflex protective glove range, which we began shipping during the second quarter. Although neck brace sales were slightly down during the period, this decrease was more than offset by the continued growth of our body armor sales, which grew by 75 percent year-to-year. The body armor category includes the C-Frame knee brace that was first shipped in 2014, and which continues to find larger audiences and market share. C-Frame knee brace sales also had a positive impact on our gross profit margins, which remained steady at 55 percent, year-to-year, despite the increase in body armor sales which have historically generated lower margins. Despite this increase in revenue, operating expenditures decreased by $134,035 year-to-year. Research and development and G&A expense were both down, as were professional fees.”
Chairman, Dr. Christopher James Leatt added, “We are very happy with initial sales of our new Airflex protective glove range that is constructed of ultrathin nanofibers for maximum flexibility and strength, with the addition of injected protective materials to protect knuckles, thumbs and fingers. We believe that our gloves are the first in the downhill bicycle and motocross market that incorporates engineered protection. Meanwhile, we are still evaluating the C-Frame knee brace as an adjunct to medical procedures and diagnoses.”
Six Months 2015 Financial Performance
Revenue for the six months ended June 30, 2015 was $9.2
million, an increase of 20 percent compared to the first six months of 2014. Net
income was $478,042 or $0.09 per share, compared to a net loss of $370,720 or
$0.07 loss per share for the first half of 2014.
The Company’s cash balance was $1.2 million at June 30, 2015, up rewardingly from the $724,000 reported for December 31, 2014. The current ratio at June 30, 2015 was just below 5:1, stronger than the 3:1 at the end of 2014. The Company has no long-term debt.
Business Outlook
Mr. Macdonald said, “The strategy
to broaden our product lines, add new categories, and appeal to new sports seems
to be working as we hoped it would. The next step for us will be shipping of the
first Leatt helmets, which we expect will happen during the second half of 2015.
We are looking forward to this first shipment as the helmet market is the
largest segment of the worldwide market for protective sporting gear, and
extends from high-velocity sports through a variety of team sports, amateur and
professional. Worldwide concern for the long term implications of concussions
and blows to the head have made the helmet market even more prominent for
parents, educators and athletes. We believe that our reputation for excellence
and the broad recognition of our brand as the protective gear technological
leader should stand us in good stead with helmets. Our first helmet shipments
will be our full face motocross and bicycling helmets.”
Conference Call:
The Company will host a conference
call at 11:00 am Eastern Time on August 13, 2015, to discuss the second quarter
2015 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.
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 1-877-870-5176 (USA)
or +1-858-384-5517 (international) and using passcode 10070717.
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 Corporation:
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-corp.com |
http://www.leatt.com/.
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 will see increased revenue in connection with sales of its new knee
brace and gloves; the significance of the Company’s shipment of the new helmets
and the likelihood that helmet sales will benefit from the market acceptance of
other Leatt branded products; the financial outlook of the Company and the
likelihood that demand for the Company’s innovative new products will continue
to increase through 2015; the general ability of the Company to achieve its
commercial objectives, including its exploration of the new knee brace as a
medical devices; 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.
Contacts
DresnerAllenCaron
Michael Mason (investors)
michaelm@allencaron.com
(212) 691-8087
Len Hall (Media)
len@allencaron.com
(949)
474-4300
-- Financial Tables Follow --
LEATT CORPORATION
CONSOLIDATED BALANCE
SHEETS
| ASSETS | ||||||
| June 30, 2015 | December 31, 2014 | |||||
| Unaudited | Audited | |||||
| Current Assets | ||||||
| Cash and cash equivalents | $ | 1,218,963 | $ | 724,707 | ||
| Short-term investments | 58,161 | 58,153 | ||||
| Accounts receivable | 2,192,500 | 4,239,298 | ||||
| Inventory | 3,448,808 | 3,403,854 | ||||
| Payments in advance | 450,554 | 345,406 | ||||
| Income tax refunds receivable | 299 | 25,299 | ||||
| Deferred tax asset | 108,000 | 108,000 | ||||
| Prepaid expenses and other current assets | 769,100 | 994,003 | ||||
| Total current assets | 8,246,385 | 9,898,720 | ||||
| Property and equipment, net | 855,855 | 995,537 | ||||
| Other Assets | ||||||
| Other receivables | 150,000 | 210,000 | ||||
| Deposits | 17,693 | 17,980 | ||||
| Intangible assets | 76,848 | 81,323 | ||||
| Total other assets | 244,541 | 309,303 | ||||
| Total Assets | $ | 9,346,781 | $ | 11,203,560 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current Liabilities | ||||||
| Accounts payable and accrued expenses | $ | 1,077,310 | $ | 2,980,885 | ||
| Income taxes payable | 320,000 | 331,000 | ||||
| Short term loan, net of finance charges | 260,372 | 626,129 | ||||
| Total current liabilities | 1,657,682 | 3,938,014 | ||||
| Deferred tax liabilities | 88,192 | 88,468 | ||||
| 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, 5,231,823 and 5,200,623 shares issued and outstanding as of June 30, 2015 and December 31, 2014 |
130,040 | 130,008 | ||||
| Additional paid - in capital | 7,346,782 | 7,314,136 | ||||
| Accumulated other comprehensive loss | (465,322 | ) | (378,431 | ) | ||
| Retained earnings | 586,407 | 108,365 | ||||
| Total stockholders' equity | 7,600,907 | 7,177,078 | ||||
| Total Liabilities and Stockholders' Equity | $ | 9,346,781 | $ | 11,203,560 | ||
LEATT CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
| Three Months Ended | Six Months Ended | |||||||||||
| June 30 | June 30 | |||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||||||
| Revenues | $ | 5,193,056 | $ | 4,167,394 | $ | 9,214,511 | $ | 7,690,869 | ||||
| Cost of Revenues | 2,361,827 | 1,858,390 | 4,206,022 | 3,486,164 | ||||||||
| Gross Profit | 2,831,229 | 2,309,004 | 5,008,489 | 4,204,705 | ||||||||
| Product Royalty Income | 20,668 | 50,448 | 72,201 | 71,263 | ||||||||
| Operating Expenses | ||||||||||||
| Salaries and wages | 542,467 | 576,177 | 1,148,645 | 1,103,223 | ||||||||
| Commissions and consulting expenses | 151,468 | 141,234 | 337,376 | 307,251 | ||||||||
| Professional fees | 246,392 | 280,466 | 461,165 | 614,522 | ||||||||
| Advertising and marketing | 363,313 | 389,659 | 624,755 | 675,053 | ||||||||
| Office rent and expenses | 62,543 | 61,867 | 123,051 | 121,985 | ||||||||
| Research and development costs | 293,666 | 333,035 | 586,383 | 614,327 | ||||||||
| Bad debt expense | 19,461 | 223 | 19,461 | 22,295 | ||||||||
| General and administrative expenses | 489,116 | 541,284 | 914,332 | 1,046,238 | ||||||||
| Depreciation | 91,473 | 69,989 | 184,276 | 147,508 | ||||||||
| Total operating expenses | 2,259,899 | 2,393,934 | 4,399,444 | 4,652,402 | ||||||||
| Income (Loss) from Operations | 591,998 | (34,482 | ) | 681,246 | (376,434 | ) | ||||||
| Other Income | ||||||||||||
| Interest and other income, net | 7,539 | 4,528 | 7,981 | 5,594 | ||||||||
| Total other income | 7,539 | 4,528 | 7,981 | 5,594 | ||||||||
| Income (Loss) Before Income Taxes | 599,537 | (29,954 | ) | 689,227 | (370,840 | ) | ||||||
| Income Taxes | 175,600 | (120 | ) | 211,185 | (120 | ) | ||||||
| Net Income (Loss) Available to Common Shareholders | $ | 423,937 | $ | (29,834 | ) | $ | 478,042 | $ | (370,720 | ) | ||
| Net Income (Loss) per Common Share | ||||||||||||
| Basic | $ | 0.08 | $ | (0.01 | ) | $ | 0.09 | $ | (0.07 | ) | ||
| Diluted | $ | 0.08 | $ | (0.01 | ) | $ | 0.09 | $ | (0.07 | ) | ||
| Weighted Average Number of Common Shares Outstanding | ||||||||||||
| Basic | 5,201,663 | 5,200,623 | 5,201,143 | 5,200,623 | ||||||||
| Diluted | 5,476,017 | 5,200,623 | 5,475,497 | 5,200,623 | ||||||||
| Comprehensive Income (Loss) | ||||||||||||
| Net Income (Loss) | $ | 423,937 | $ | (29,834 | ) | $ | 478,042 | $ | (370,720 | ) | ||
| Other comprehensive income (loss), net of $0 and $0 deferred income taxes in 2015 and 2014 | ||||||||||||
| Foreign currency translation | (40,422 | ) | 3,884 | (86,891 | ) | 9,055 | ||||||
| Total Comprehensive Income (Loss) | $ | 383,515 | $ | (25,950 | ) | $ | 391,151 | $ | (361,665 | ) | ||