Leatt Corp Announces Results for Fourth Quarter and Full Year 2023

CAPE TOWN, South Africa, March 13, 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 fourth quarter and full year ending December 31, 2023. All financial numbers are in U.S. dollars.

Full Year and Fourth Quarter 2023 and Recent Highlights

• Revenues for 2023 were $47.24 million, down 38%, compared to 2022.
• Net income for 2023 was $803,159, down 92%, compared to 2022.
• Fourth quarter 2023 revenues were $9.80 million, down 10% compared to 2022.
• Cash and cash equivalents for 2023 increased 60% to $11.35 million, compared to $7.10 million in 2022.
• Cash flow from operations increased 116% to $6.66 million, compared to $3.09 million in 2022.
• Winner of 2024 Design & Innovation Award for MTB All Mountain 5.0 Jersey and MTB All Mountain 4.0 Pants
• Launched new line of Adventure Gear (ADV) for motorcycle riders at EICMA, Milan

Chief Executive Officer, Sean Macdonald, commented: "Although 2023 was a challenging year for the cycling and motorcycle industries, the fourth quarter presented the first indicators of a recovery in certain areas, and we remain extremely optimistic that ordering patterns will improve over time as participation remains strong, globally. The increase in our operating cashflow and our ability to remain profitable in a constrained environment is testament to our commitment to create long term shareholder value. We believe that our continued investment in a strong pipeline of innovative products, global industry talent, and Leatt® as a consumer brand will fuel future growth."

"Global revenues for 2023 were $47.24 million, a 38% decrease, when compared to a strong 2022, as dealers and distributors continued to regulate ordering levels in the context of elevated industry-wide inventory levels that are being digested as participation remains robust. Revenues from international distributor sales were $33.27 million, a decrease of 44% year-over-year, and although revenues from dealer sales decreased by 26%, revenues from consumer direct sales grew by 18%, when compared to the same period in 2022.

"Revenues for the fourth quarter of 2023 were $9.80 million, a 10% decrease when compared to the 2022 fourth quarter. Although international revenues decreased by 15% during the fourth quarter as we continue to manage credit risk on a global level, dealer direct sales were encouraging, decreasing marginally by 2%, and consumer direct sales grew by 23%. We continue to strive to reach a wider group of consumers on a multi-channel basis that includes leveraging digital and traditional brick-and-mortar channels with our partners globally.

"This year we efficiently managed industry headwinds and the impact of sustained inflationary pressure. We kept spending under control, increased our margins and re-enforced our sales and marketing team. We also launched an entirely new line of Adventure (ADV) gear designed for all-weather and all-terrain conditions, representing a new milestone for Leatt and moving us into a significant crossover market that includes a wide community of riders globally.

Founder and Chairman, Dr. Christopher Leatt, remarked: "We continue to strive for design excellence and innovation in all that we do despite the headwinds that we have experienced, as evidenced by our win of the 2024 Design and Innovation Award, this time for the MTB All Mountain 5.0 jersey and All Mountain 4.0 pants."

Financial Summary

Total revenues for the fourth quarter of 2023 were $9.80 million, down 10%, compared to $10.91 million for the fourth quarter of 2022.

Net loss for the fourth quarter of 2023 was ($1.46) million, or ($0.24) per basic and ($0.23) per diluted share, as compared to net loss of ($1.08) million, or ($0.18) per basic and ($0.17) per diluted share, for the fourth quarter of 2022.

Total revenues for the full year 2023 were $47.24 million, down 38%, as compared to $76.34 million for the full year of 2022. The decrease in global revenues is attributable to a $2.64 million decrease in neck brace sales, a $3.36 million decrease in helmet sales, a $6.81 million decrease in other products, parts and accessory sales and a $16.29 million decrease in body armor sales.

Net Income for the full year 2023 was $803,159, or $0.13 per basic share and $0.13 per diluted share, down 92%, compared to $9.96 million, or $1.71 per basic share and $1.62 per diluted share, for 2022.

Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. At December 31, 2023, the Company had cash and cash equivalents of $11.35 million and a current ratio of 6:1.

Business Outlook

Mr. Macdonald added: "We remain optimistic about the progress that we continue to make towards a return to sustainable growth, as inventory continues to be digested and industry turbulence normalizes. We are in an industry that is adjusting, but participation remains strong, and our team remains energized about the future.

We believe that the fourth quarter of 2023 marks the beginning of a potential recovery period. Although revenues decreased by 10% during the quarter, we saw revenue growth in emerging market areas in Europe and domestic MOTO dealer sales in the United States increased marginally. Our E-commerce revenues overall grew by double digits, and we expect continued expansion in this area.

"We are also excited about ADV, our new Adventure line of motorcycle products, which represents a solid growth opportunity with a large total addressable market (TAM). It is our first ever entrance into the much wider global crossover motorcycle market, with products designed for a diverse community of riders around the world. We have developed core competencies that create significant opportunities to build new, innovative 'head-to-toe' offerings.

"Although we do still expect some headwinds in certain areas as industry consolidation continues in the short term, we are incredibly enthusiastic about the future of Leatt. We have a strong portfolio of innovative products in the market and in our development pipeline, a multi-channel sales organization that is growing and developing, and a robust balance sheet position to fuel brand and revenue growth."

Conference Call

The Company will host a conference call at 10:00 am ET on Wednesday, March 13, 2024, to discuss the 2023 fourth quarter and full-year 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 13744705.

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.

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 Company's ability to continue developing a pipeline of innovative products and global industry talent to fuel future growth of the Leatt brand; 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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SOURCE Leatt Corporation