Leatt Corporation reported global revenues increased by 18 percent, to $11.4 million compared to the 2019 third quarter.

The increase in revenues for the third quarter was driven by a 76 percent increase in sales of other products, parts and accessories, and a 25 percent increase in body armor sales, that were partially offset by a 5 percent decrease in helmet sales, and a 39 percent decrease in neck brace sales due to orders that were placed during the initial phase of the COVID-19 pandemic. Those conservative buying patterns are expected to normalize over the next several quarters. Neck brace sales continue to generate a higher gross profit margin than our other product categories.

For the third quarter of 2020, gross profit was $4.9 million, or 44 percent of revenues, compared to $4.5 million, or 47 percent of revenues, for the third quarter of 2019. Total operating expenses were $2.9 million, up 4 percent, compared to $2.8 million for the third quarter of 2019.

Net income for the three months ended September 30, 2020 was $1.6 million, or $0.27 per diluted share, up 22 percent, compared to $1.3 million, or $0.24 per diluted share, for the third quarter of 2019.

CEO Sean Macdonald commented: “We had yet another ground-breaking quarter, the best third quarter in our history in terms of revenue and profitability. Global revenues were $11.4 million, up 18 percent over the third quarter of 2019. In the U.S., our most important market, revenues grew by a remarkable 47 percent over last year, driven by fantastic demand for our innovative protective gear from MOTO dealers, MTB dealers and ultimately end consumers who continue to participate strongly in outdoor activities, despite the turmoil caused by the global COVID pandemic.

“For the first nine-months of 2020, revenues were $25.9 million, an increase of $4.8 million or 23 percent, when compared to the comparative nine-month period. We are building a larger and more professional sales organization in both the MOTO and MTB areas, particularly in the United States where we believe we have the ability to reach more dealers around the country. Leatt as a “head to toe” brand has become an important revenue driver for more dealers – a trend that we are investing in.

“We saw break out revenue growth in our footwear, now consisting of Mountain biking shoes and Motorcycle boots, and our expanding line of body armor and goggle product categories. Although overall helmet sales were down slightly, we believe that our investment in re-engineering our helmet line will contribute to significant returns in the future in light of encouraging initial industry reviews, athlete feedback and consumer demand for our completely re-engineered line of MOTO helmets.”

Business Outlook
Macdonald said. “Although our business model continues to show strength, we are cautiously monitoring consumer buying trends during the pandemic to plan for any economic turbulence and industry headwinds that may arise.

“But based on our promising results to date in 2020, we are optimistic. We have worked hard to adjust to the new challenges brought on by the pandemic. Along with our larger and more professional sales and marketing team, we have focused on e-commerce and creating a new website that is much simpler for customers to navigate and make online purchases.

“We have a strong pipeline of cutting-edge products that will ship to our customers globally over the next several quarters. Recent launches of goggles, boots and other exceptional protective gear and now our MTB shoe and MOTO boot line have earned very positive reviews for performance in the field and very encouraging consumer demand levels. We believe that our portfolio of products defines Leatt as a premium ‘Head-to-Toe brand’ and are a testament to our team’s ability to develop a full offering of innovative products that appeal to a wide rider audience.

“We continue to redefine our product offerings and our market share potential in a majority of the new categories in which we compete. Our strong operating cash flow will be re-invested in our growth engine – developing innovative, cutting edge products – as well as in building our global consumer brand and refining our sales channels.”

Photo courtesy Leatt Corporation