Leatt Corporation CEO Sean Macdonald said the company was very encouraged by the results of the 2024 third quarter and called it a “pivotal quarter” as global revenues returned to growth, “albeit still marginal at this stage.”

Total global revenues for the quarter were $12.1 million, a 1 percent increase year over year. Body armor sales were up $0.27 million, helmet sales were up $0.14 million and neck braces were up $0.04 million.

International sales were $8.58 million, up 5 percent as inventory continues to be digested and an uptick in ordering begins to filter through to revenues.

South Africa-based Leatt Corp. reports in U.S. dollars ($).

“During the quarter we continued to ship orders for our new ADV (Adventure) apparel product line, designed for motorcycle enthusiasts seeking comfort and safety while riding in all weather conditions and terrains,” Macdonald noted. “We remain confident that we have the initial distribution, track record, core competencies and talent to deliver a pipeline of other innovative ADV product categories to reach this substantial segment.”

Footwear, comprising MTB shoe and MOTO boot revenues, reportedly contracted globally during the quarter. Macdonald said footwear has been particularly constrained in the current environment, with aggressive competitive pricing and high inventory levels causing very cautious buying at the dealer level.

“We do expect this area to improve as inventory is digested and ordering continues to pick up,” he said.

Direct-to-consumer sales increased 12 percent year-over-year in the third quarter.

“We continue to see very encouraging trends at the direct-to-consumer level as consumer direct sales increased by 12 percent. Our consumer direct platform in South Africa continued to display strong sales, exceeding our expectations,” Macdonald noted.

“Overall, despite some constrained brick-and-mortar MOTO dealer sales in the U.S., our team remains enthusiastic about the pivotal moment in our recovery that is currently in play,” Macdonald said. “We strongly believe that our strategy of investing in talent, innovative product development and the brand, and our distribution capabilities will fuel growth moving forward.”

Company Founder and R&D Lead Dr. Christopher Leatt remarked: “As evidenced by our new ADV apparel line and our new range of bicycle components, which will commence initial shipment in the coming months, our pipeline of innovative head-to-toe products continues to be very strong.”

Gross profit for the third quarter was $5.2 million and gross profit margins reportedly increased 4 percent sequentially compared to the second quarter of 2024.

“Our margins also continued to improve on a quarterly basis, increasing by 4 percent sequentially over the second quarter of 2024, as we manage clearing older inventory and selling newer stock at higher margins,” Macdonald shared. “Our inventory levels continue to stabilize, decreasing by $4.62 million, or 23 percent, over the last nine months, as we continue to seek opportunities to turn over slower-moving inventory and replenish stock levels in preparation for stronger ordering.”

Income from operations for the third quarter of 2024 was $25,898, down 96 percent, compared to $620,395 for the third quarter of 2023.

Net income for the third quarter was $115,837, or 2 cents per basic and diluted share, down 75 percent year-over-year, as compared to net income of $460,474, or 8 cents per basic and 7 cents per diluted share, for the third quarter of 2023.

“Despite current industry-wide conditions, re-investments in working capital, and our push to invest in long-term growth, cash increased by $1.12 million to $12.47 million, with cash flows provided by operations of $2.98 million for the nine months ended September 30, 2024. Our liquidity continues to improve as our team continues to manage working capital efficiently.”

Leatt said it continued to meet its working capital needs from cash on hand and internally generated cash flow from operations.

At September 30, 2024, the company had cash and cash equivalents of $12.47 million and a current ratio of 6.5:1.

Image courtesy Leatt Corporation