Leatt Corporation has announced financial results for the second quarter ending 30th June 2019.
Revenues increased by 10% to $5.3 million for the quarter and year-to-date global revenues were up $1 million or 10% to $11.4 million. Net income was up 249% for the quarter and marketing and advertising investment for the first six months increased by 8% year-over-year, in preparation for global product launches in the second half of the year.
Leatt chief executive officer Sean Macdonald said: “We had a solid quarter and made substantial progress, particularly in terms of revenue growth and the market acceptance of our newest product lines in both the US and international markets. Global revenue for the 2019 second quarter was up 10% to $5.3 million, driven by double-digit increases in sales of our new, innovative knee braces and our array of body armour for riders’ safety and protection. Our full line of medically-proven, revolutionary knee braces continues to gain traction globally, with a 69% increase in sales, as compared to the second quarter of 2018.
“We are also very excited about the enthusiastic market acceptance of our new, bulletproof Velocity 6.5 goggle line, launched in March 2019. The demand has exceeded our expectations and our goggle category has become another important revenue contribution segment. Initial shipments and continued ordering patterns are showing great promise for future growth.
“It is also encouraging to see improved sales of our flagship neck brace, which remains the gold standard in extreme sports neck protection. Sales of our neck brace during the second quarter have increased by 5% over last year.”
Dr Christopher Leatt, chairman of the board and lead research and development consultant, added: “Our engineering and design team continues to operate at the cutting edge of research and development, and ranks among industry leaders in the development and refinement of safe and innovative technology for the world’s sports and sports apparel markets. We have already introduced two new revolutionary products in the first half of 2019 – our Z Frame knee brace and Velocity 6.5 goggles – and we are looking forward to introducing a new major product category in the second half of 2019.”
Total revenues for the three-month period ending 30th June 2019 increased to $5.3 million, up 10%, compared to $4.8 million for the 2018 second quarter.
The increase in revenues for the second quarter was driven by an 88% increase in sales of other products, parts and accessories, a 5% increase in neck brace sales and a 23% increase in body armour sales, that were partially offset by a 49% decrease in helmet sales. Neck brace sales continue to generate a higher gross profit margin than its other product categories, Leatt has said.
For the 2019 second quarter, gross profit was $2.6 million, or 50% of revenues, compared to $2.4 million, or 49% of revenues, for the 2018 second quarter. Second-quarter income from operations rose 284% to $102,476 compared to a loss of ($55,664) for the second quarter of 2018.
Net income rose 249% to $73,700 or $0.01 per basic and diluted share, compared to a loss of ($49,455), or ($0.01) per basic and diluted share, for the same 2018 period. During the quarter, Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. At 30th June 2019, the company had cash and cash equivalents of $1.5 million, a current ratio of 3.2:1, and there was no long-term debt, it said.
Macdonald added: “The early success of our newest products, in terms of market demand, media coverage and consumer acceptance, has our team excited about our prospects for the future. Our goal continues to be to expand our product catalogue and to add at least one new product category each season. The achievement of this goal will allow us to effectively extend our addressable markets and introduce new consumers to the Leatt brand. All our new product lines have wider addressable global markets that we believe will offer us exciting opportunities for future growth and profitability.
“We are also very excited about the second half of this year, with our planned introduction of another new product category. In preparation for these new product launches, we have increased our investments in marketing and advertising efforts and in bolstering our sales, marketing and distribution teams. We are confident that our new products will again prove our team’s ability to produce exceptional, revolutionary safety products that are trusted by many of the top athletes around the world.
“Finally, we are thankful for the superior efforts of our entire Leatt team during the first half of 2019, including the riders who we are very proud to sponsor. The 2019 Supercross Season came to an end in Las Vegas in May with Leatt athlete Marvin Musquin, finishing strong with a third overall in the 450 class for the Supercross Series, and with athlete Garrett Marchbanks being awarded Rookie of the Year in the 250 Supercross class. We are proud to have these athletes among the people bringing the promise of the Leatt products to the world.”