Leatt (OTC:LEAT) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.

This content is powered by Benzinga APIs. For comprehensive financial data and transcripts, visit https://www.benzinga.com/apis/.

View the webcast at https://viavid.webcasts.com/starthere.jsp?ei=1763211&tp_key=b67a20f5db

Summary

Leatt reported strong financial performance for Q1 2026 with global revenues of $19.51 million, a 27% increase from Q1 2025.

Consumer direct sales grew by 49%, driven by increased demand for the company's products, particularly helmets, which saw a 59% revenue increase.

Net income rose to $1.77 million, marking a 58% increase over the previous year, while gross profit margins remained stable at 44%.

The company continues to invest in emerging markets and brand development, with cash reserves increasing by $3.96 million to $17.19 million.

Leatt is maintaining its share repurchase program, reflecting confidence in its strategic plan and commitment to enhancing shareholder value.

Operational highlights include significant growth in helmet sales and strong international sales performance across Europe, Latin America, and other regions.

Management remains optimistic about future growth despite global economic challenges, emphasizing strong consumer engagement and robust market demand.

Full Transcript

OPERATOR

Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press star zero and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press star zero and a member of our team will be happy to help you. Please stand by. Your program is about to begin. Hello and welcome everyone joining Today's Leatt Corporation first quarter 2026 results conference call. At this time, all participants are in a listen only mode. Later, you'll have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star then one on your telephone keypad. Please note this call is being recorded. We are standing by should you need any assistance. It is now my pleasure to turn the meeting over to Michael Mason, Investor Relations. Please go ahead.

Michael Mason (Investor Relations)

Thanks Aaron Good morning and welcome to the Leatt Corporation investor Conference call to discuss the financial results for the first quarter 2026. The Company issued a press release today, Tuesday, May 12, 2026 at 8:00am Eastern and filed its report with the SEC. The press release is posted on Leatt's website at leat-corp.com this call is being broadcast live and may be accessed on the Company's website. An audio replay of this call will be available for seven days and may be accessed from North America by calling 1-844-512-2921 or 141-231-7671 for international callers, the replay PIN number is 111-61813. A replay of the webcast will be available immediately following this call and will continue for seven days. Certain statements in this conference call may constitute forward looking statements. Actual results could differ materially from those discussed in this call. Leatt Corporation does not undertake any obligation to update such statements made in this call. Please refer to the complete cautionary statement regarding forward looking statements in today's press release dated May 12, 2026. The Company will make a presentation on the quarterly results and then open the call to questions. I would now like to turn the call over to Mr. Sean McDonald, CEO of Leatt Corporation. Good afternoon to you in Cape Town.

Sean McDonald (CEO)

Sean Good morning and thank you Mike and thank you all for joining us today. The first quarter of 2026 was a great start to the year for our company. Strong revenue growth continues as global demand for our products fueled robust reordering patterns and domestic sales showed very encouraging traction at the dealer and consumer levels. We continue to accelerate our investments in developing emerging markets as well as in developing Leatt as a global consumer brand that compels riders to engage with us. Global revenues for the first quarter were $19.51 million, an increase of 27% compared to the first quarter of 2025. Consumer direct sales increased by 49%, which we believe is a testament to the tremendous momentum of the Liart brand at the consumer level. International sales to our distribution partners increased by 24%, dealer direct sales increased by 30% as our reorganized and reenergized motor and MTV domestic sales force continues to develop and build a strong, sustainable and committed dealer network and gain substantial traction with our head to toe product offerings. We grew revenues year over year in all of our major product categories. Helmet revenues increased by 59%, neck brace revenues increased by 7%, body armour revenues increased by 25% and other product parts and accessory revenues increased by 9%. Net income for the quarter was $1.77 million, an increase of 58% over the 2025 first quarter and income before tax was $2.39 million, an increase of $880,000. Gross profit as a percentage of sales remained stable at 44% as domestic sales continued to grow and we continue to sharpen our global logistics efficiencies despite strong investments in our marketing and selling capabilities, product and brand development that will fuel future growth. Cash increased by $3.96 million to $17.19 million with cash flows provided by operations of $4.55 million. We do expect working capital investments to grow in the coming periods as ordering patterns continue to signal growth and we have sufficient liquidity to fuel this growth. We are continuing our previously announced board authorized share repurchase program of up to $750,000 of outstanding Leatt common stock. This demonstrates our continued confidence in the strength of our company and our business plan as well as our commitment to enhance long term shareholder value. Now I will turn to more details on sales of our product categories. For the first quarter of 2026, sales of our flexible neck brace designed to prevent potentially devastating sports injuries to the cervical spine were $730,000, a 7% increase compared to the first quarter of 2025. The increase was primarily due to an 11% increase in the volume of neck braces sold. Neck braces represented 4% of revenues for the quarter. Our body armour products are comprised of chest protectors for upper body protectors, knee braces, knee and elbow guards, off road motorcycle boots and mountain biking shoes. Body Armor revenues were $8.59 million, a 25% increase compared to the first quarter of 2025. This increase was primarily due to a 54% increase in the volume of footwear sales in the quarter, comprising of motorcycle boots and mountain biking shoes. Body armor products represented 44% of our revenues for the first quarter. Helmet sales totaled $5.39 million, a 69% increase compared to the first quarter of 2025. The increase in helmet sales was primarily due to a 61% increase in sales of helmets designed for mountain biking and adventure motorcycle riding. Helmet sales represented 28% of our revenues for the quarter. Our other products, parts and accessories categories is comprised of goggles, hydration bags and apparel items including jerseys, pants, shorts and jackets, sunglasses, bicycle components as well as aftermarket support items. The category was $4.8 million in sales, a 9% increase compared to the first quarter of 2025. primarily due to 132% increase in the sale of eyewear including sunglasses and goggles. Other products, parts and accessories represented 24% of our revenues for the quarter. Now I will turn to our financial results in a bit more detail. Revenues for the three months ended March 31, 2026 were $19.51 million, a 27% increase compared to revenues of $15.37 million for the same 2025 quarter. This increase in worldwide revenues is primarily attributable to a $1.99 million increase in helmet sales, $1.72 million increase in body armour sales, a $380,000 increase in other product parts and accessory sales and a $50,000 increase in neck brace sales. Net income for the three months ended March 31, 2026 was $1.77 million, or $0.28 per basic and $0.27 per diluted share, 58% increase compared to $1.12 million for the same 2025 quarter. Viet continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. Cash cash equivalents and restricted cash increased by $3.96 million, or 30% for the three months ended March 31, 2026 when compared to $13.23 million of cash, cash equivalents and restricted cash on hand at December 31, 2025 and a current ratio of 8.2 to 1. Looking forward, our entire team is Excited about the future of Leatt. While there are some potentially challenging global headwinds, domestic sales are gaining traction, consumer participation remains strong and international ordering patterns remain robust, all driven by strong global demand for our products. There is real excitement about the LIAT brand in the US. I have just attended the 2026 US National Sales Meeting and I've returned energised and encouraged by the strength of the team that we have built and their strong culture of results driven collaboration. On the marketing front, we are elevating everything, athletes, content, media impact and people. I'm very enthusiastic about sharing the results of this shift in the coming quarters. We have recently sponsored the new Proof team which is proving to be an extremely strong partnership that we believe will result in disruptive content and consumer engagement well beyond our previous capabilities. In conclusion, we are very excited about our future with a focus on investing in our innovative product portfolio, the drive to accelerate and amplify our brand to meet a much wider audience, and a robust balance sheet to fuel growth. We remain confident that we are well positioned for future growth and shareholder value. As always, we'd like to thank our entire Elliott family, our dedicated employees, business partners and team riders for their continued strong support. With that, I'd like to turn the call over for questions.

OPERATOR

Thank you. If you'd like to ask a question, press Star one on your keypad. To leave the queue at any time, press Star two. Once again, that is Star one to ask a question. And we'll pause for just a moment to allow everyone a chance to queue and we can take our first question from investor Oliver Colombo. Your line is open.

Oliver Colombo

Good afternoon, Sean. Hello, Olivier. How are you doing? Fine, thanks. And you? Congratulations on the very impressive Q1.

Sean McDonald (CEO)

Thank you.

Oliver Colombo

I had three questions for you this afternoon. The first one is regarding your comments on the share buyback that you just mentioned. I didn't hear it properly. Are you initiating 750 million share buyback or did I not understand correctly? No. So we're going to be. We still have some funds available as part of the original $750,000 that we originally announced. And we're going to continue buying back shares to the limit of $750,000 in total. Perfect. Thank you very much. I had a question regarding the helmet revenues that increased 59% this quarter, which is quite impressive. Impressive and now represent 28% of the overall revenues. So it looks like the mountain bike and the adventure side went very well. How did the motocross helmet perform during that period?

Sean McDonald (CEO)

I mean, still strong, but not as strong as MTB and ADV during the period. I mean, I think, you know, Moto is our most established category or market since we started in Moto. So although we obviously are still growing there, we are seeing slightly stronger growth levels on the ADV, which is a lot newer and the MTB category, but certainly no issues on the motor side. Still a very viable area for Leatt. And motor helmet sales are expected to continue to grow. We've got some really interesting products coming in the pipeline which I think are going to stimulate the growth there as well. So certainly maybe didn't grow quite as strongly as ADV and MTB, but still looking really good.

Oliver Colombo

Excellent. Thank you very much. And my last question is regarding the international sales that were very good once more. Which regions or channels are showing the strongest demand right now and where do you see the biggest white space opportunity?

Sean McDonald (CEO)

It's really interesting, actually. We're seeing strong growth in Europe, in Latin America, in the uk, in Eastern Europe. We've got some really good growth levels in Eastern Europe as well and in Australia. So actually, I mean, this is really across the board. International sales is in emerging markets and in more developed markets, like for example in the UK on the mountain biking side, we've got new distributor there. That's going really, really well for us. We continue to sell to Eastern Europe. It's still a strong and viable market for us. And Europe in general still remains a really strong area for us across all of our core markets. So I'd say across the board, Olivier, there's no single area that stands out as contributing in excess of the kind of growth that we're seeing in all of the countries on the international side. Still a lot of potential in those areas.

Oliver Colombo

Okay, thank you very much. That's very helpful. And I wish you and your team a very good Q2 as well. Thank you very much.

Sean McDonald (CEO)

Thank you so much, Olivier.

OPERATOR

And there are no additional questions at this time. I'd like to turn the program back over to Sean McDonald for any closing remarks.

Sean McDonald (CEO)

Thank you all for joining us today. We are looking forward to our next call to review the results of the 2026 second quarter.

OPERATOR

This brings us to the end of today's meeting and we appreciate your time and participation. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.