New body armour product sales grow 17% at Leatt Corp

For the 2013 third quarter, sales were $ 2.2 million, with a net loss of $568,931 or $0.11 loss per share, as compared to sales of $2.7 million with a net loss of $755,584 or $0.15 loss per share in the 2012 third quarter. In spite of lower sales, the net loss was 25% lower in the 2013 third quarter due to expense reductions and improving margins. 

Operating expense decreased by 10% from 2012 to 2013 in spite of a 7% increase in R&D and product development.  Litigation expense was down, which is primarily reflected in a 36% decrease in professional fees during the quarter.

For the nine months ended September 30, 2013, sales were $9.1 million with a net loss of $1.96 million or $0.38 loss per share, versus sales of $10.5 million with a net loss of $552,204 or $0.11 loss per share in the first nine months of 2012.  It is worth noting that the largest portion of the loss year-to-date was incurred prior to the third quarter and reported in the first two quarters of the year.

Gross profit margin improved in the third quarter, partly as a result of improved freight costs and conditions.  The newer products continued to produce lower gross profit margins than the classic neck brace system, but we believe that the newly introduced Five.Five neck brace and body armor products should improve on that trend. 

Macdonald further commented, “We have already announced our plan to bring a revolutionary knee brace to market early in 2014, and our expectation is that this product will also produce a better margin than the body armor products.  In short, we are approximately where we thought we would be at this time, and our new-product introductions and the uptake trends are encouraging.  As with most consumer products, the fourth quarter is anticipated to be our most important and largest quarter.”

At September 30, the company had no outstanding bank debt or amounts owed to lenders, other than in connection with our premium financing.  Cash was down modestly from the opening balance sheet for 2013, but that is largely due to an increase in inventory to support the expected shipment of larger amounts of product during the autumn months. The current ratio at September 30, 2013 was a robust 3.12:1, which is in keeping with the conservative management of cash and assets that has been a primary goal of management. 

Leatt Corporation develops and sells protective equipment and ancillary products for all forms of sports, especially extreme high-velocity sports. The Leatt-Brace is an award-winning neck brace system considered to be the gold standard in neck protection for anyone wearing a crash helmet as a form of protection.

The latest generation of the Leatt-Brace introduced this year, the Five.Five neck brace, is also designed for participants in high-velocity sports such as motorcycling, bicycling, mountain bicycling, driving all-terrain vehicles, snowmobiles and other vehicles, and has potential applications in any downhill or freestyle high-velocity sports.

Leatt Corporation