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8-K - FORM 8-K - Leatt Corpform8k.htm

Leatt Corp Earnings for the First Quarter ended March 31, 2015

Revenue Up by 14.1%, Buoyed by New Products

CAPE TOWN, South Africa, May 13, 2015 – Leatt Corporation (OTCQB: LEAT) today announced its financial results for the first quarter ended March 31, 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.

First Quarter Highlights

  • Revenues were $4.0 million compared to $3.5 million in 2014 first quarter, representing a 14% increase in revenues year-to-year.

  • Sales of the Leatt C Frame Knee Brace boosted sales of the body armor category by 45% year-to- year.

  • Earnings of $54,105 or $0.01 per share for the quarter, versus a loss of $340,886 or $0.07 loss per share in the year-earlier period.

“The first-quarter growth and profit continues the upward growth trend reported over the past few quarters,” said Leatt CEO, Sean Macdonald. “And while the first quarter has historically been our weakest quarter, we were able to achieve a modest profit in the first quarter for the first time in 6 years. We are pleased with the enthusiastic acceptance of our new C Frame Knee Brace, and by the successful registration with the United States Food and Drug Administration (FDA) of our knee and shoulder brace as Class 1 Medical Devices in the USA. Not only is revenue increasing overall, but growth is continuing to build for our higher margin products.”

In spite of higher revenues and a modest increase in R&D expense, the Company kept a careful watch on expenses resulting in a 5.3% decline in overall operating expenses during the quarter, aided by a decline in litigation expenses year-to-year.

Cash and equivalents grew to $893,165 at March 31, 2015, compared to $724,707 at December 31, 2014. Current liabilities dropped steeply, resulting in a current ratio of 4.3:1. There were no long-term liabilities as of March 31, 2015, and stockholders’ equity was $7.2 million.

“We are proud of these first fruits of our product expansion strategy, which we believe are significant improvements on existing products in the market," added Dr. Christopher James Leatt, Leatt’s Head of Research and Development. "We are particularly proud of our innovative, lightweight and maximally-ventilated DBX and GPX helmets which we expect will be game-changers for the Company and its customers as they launch us, for the first time, into the arena of helmeted sports. We believe that our helmet design will help protect against concussion more effectively than other designs currently available on the market. We intend our helmets to follow in the footsteps of our neck braces to become the gold standard for sport safety worldwide.”


Conference Call:

The Company will host a conference call at 11:00 am Eastern Time on May 13, 2015, to discuss the first 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 or +1-858-384-5517 (international) and using passcode 10065530.

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 | 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 significance of United States approval of the Company's knee and shoulder braces, and the likelihood that the Company will see increased revenue in connection with sales of these products as medical devices; the financial outlook of the Company and the likelihood that demand for the Company’s innovative new products will continue to increase through 2015 and that these products will achieve the gold standard set by the Leatt Brace; the general ability of the Company to achieve its commercial objectives, including its plan to develop additional brace and protection lines that will protect more people in more sports; 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:

Leatt Corporation
Sean Macdonald
Chief Executive Officer
Sean.Macdonald@leatt-brace.com
+ (27) 21 557 7257

Allen & Caron, Inc.
Michael Mason (Investors)
michaelm@allencaron.com
(212) 691-8087

Len Hall (Media)
len@allencaron.com
(949) 474-4300

– Financial Tables Follow –


LEATT CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2015 and 2014

LEATT CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS

    March 31, 2015     December 31, 2014  

 

  Unaudited     Audited  

Current Assets

           

Cash and cash equivalents

$  893,165   $  724,707  

Short-term investments

  58,156     58,153  

Accounts receivable

  1,643,957     4,239,298  

Inventory

  4,119,980     3,403,854  

Payments in advance

  394,353     345,406  

Income tax refunds receivable

  299     25,299  

Deferred tax asset

  108,000     108,000  

Prepaid expenses and other current assets

  718,845     994,003  

   Total current assets

  7,936,755     9,898,720  

 

           

Property and equipment, net

  925,202     995,537  

 

           

Other Assets

           

Other receivables

  180,000     210,000  

Deposits

  17,798     17,980  

Intangible assets

  78,081     81,323  

   Total other assets

  275,879     309,303  

 

           

Total Assets

$  9,137,836   $  11,203,560  

 

           

LIABILITIES AND STOCKHOLDERS' EQUITY 

 

 

           

Current Liabilities

           

   Accounts payable and accrued expenses

$  1,318,373   $  2,980,885  

   Income taxes payable

  196,000     331,000  

   Short term loan, net of finance charges

  349,003     626,129  

         Total current liabilities

  1,863,376     3,938,014  

 

           

Deferred tax liabilities

  88,268     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, 5,200,623 shares issued and outstanding

  130,008     130,008  

   Additional paid - in capital

  7,315,614     7,314,136  

   Accumulated other comprehensive loss

  (424,900 )   (378,431 )

   Retained earnings

  162,470     108,365  

         Total stockholders' equity

  7,186,192     7,177,078  

 

           

Total Liabilities and Stockholders' Equity

$  9,137,836   $  11,203,560  


LEATT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

    Three Months Ended  
    March 31  
  2015     2014  
    Unaudited     Unaudited  
             

Revenues

$  4,021,455   $  3,523,475  

 

           

Cost of Revenues

  1,844,195     1,627,774  

 

           

Gross Profit

  2,177,260     1,895,701  

 

           

Product Royalty Income

  51,533     20,815  

 

           

Operating Expenses

           

Salaries and wages

  606,178     527,046  

Commissions and consulting expenses

  185,908     166,017  

Professional fees

  214,773     334,056  

Advertising and marketing

  261,442     285,394  

Office rent and expenses

  60,508     60,118  

Research and development costs

  292,717     281,292  

Bad debt expense

  -     22,072  

General and administrative expenses

  425,216     504,954  

Depreciation

  92,803     77,519  

   Total operating expenses

  2,139,545     2,258,468  

 

           

Income (Loss) from Operations

  89,248     (341,952 )

 

           

Other Income

           

Interest and other income, net

  442     1,066  

   Total other income

  442     1,066  

Income (Loss) Before Income Taxes

  89,690     (340,886 )

 

           

Income Taxes

  35,585     -  

 

           

Net Income (Loss) Available to Common Shareholders

$  54,105   $  (340,886 )

 

           

Net Income (Loss) per Common Share

           

Basic

$  0.01   $  (0.07 )

Diluted

$  0.01   $  (0.07 )

 

           

Weighted Average Number of Common Shares Outstanding

           

Basic

  5,200,623     5,200,623  

Diluted

  5,467,160     5,200,623  

 

           

Comprehensive Income (Loss)

           

   Net Income (loss)

$  54,105   $  (340,886 )

   Other comprehensive income (loss), net of $0 and $0 deferred income taxes in 2015 and 2014

       

         Foreign currency translation

  (46,469 )   5,171  

 

           

         Total Comprehensive Income (Loss)

$  7,636   $  (335,715 )