Operator
Hello, and welcome everyone joining today's LIAT Corp. Second Quarter 2026 Results Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask a question during the question and answer session. To register to ask a question at any time, please press star 1 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. Please go ahead.
Thanks, Leslie. Good morning and welcome to the Liat Corporation Investor Conference Call to discuss the financial results for the second quarter, 2026. The company issued a press release today, Friday, August 14, 2026, at 8 a.m. Eastern and filed its report with the FCC. The press release is posted on Liat's website at liat-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 1-412-317-6671 for international callers. The replay PIN number is 111-62418. A replay of the webcast will be available immediately following this call and will continue for seven days. Certain statements made during this call regarding Liat Corporation are within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, are included, such as forward-looking statements. These forward-looking statements may be identified by the use of forward-looking terminology such as believes, expects, anticipates, seeks, should, could, intends, or projects, or similar expressions, and involve known and unknown risks and uncertainties. These statements are based upon the company's current expectations and speak only as of the date hereof. 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 Liat Corporation. Good afternoon to you in Cape Town, Sean.
Thank you, Mike, and thank you all for joining us today.
The second quarter of 2026 was another solid quarter for Liat, despite some temporary supply chain timing challenges that have since been fully cleared.
Global consumer demand for our innovative products remains strong and has fueled our sell-through and reordering patents.
International and domestic sales continue to show promising trends and encouraging traction at the consumer and dealer level.
Total global revenues for the quarter were $16.39 million, only a slight increase over last year due to supply chain timing issues. But second quarter numbers don't reflect the momentum that we are achieving.
U.S. revenues grew by about 11% to $6.15 million. International revenues were $10.24 million, an increase of 4% over last year. Consumer direct sales continued to be a highlight and grew strongly, increasing by 68% or $962,000 during the quarter.
In terms of product sales, body, arm and helmet sales were the leaders, up by $462,000 and $444,000 respectively.
Multi-shipments of apparel, boots, and helmets that were scheduled for the last half of the second quarter were delayed due to timing challenges, resulting in a decrease in sales to our global distributors of 6% or $653,000. Again, this has been resolved and we continue to fulfill strong global orders. It is also worth noting that prior year Q2 global distribution revenues increased by a staggering 79%. A tough comparative. Gross profit for the quarter increased by 8% to $7.44 million. And gross profit as a percentage of sales increased by 2% to 45%. Get income was $909,000.
Total operating costs increased by 16% in the quarter. as we continue to build out a diverse and professional global team of sales and marketing professionals and intensify our brand awareness activities around the world. On a year-to-date basis, total global revenues were up by $4.35 million, or 14%, to $35.9 million.
Net income was $2.68 million, an improvement of $420,000, or 19%, compared to the first six months of 2025. and consumer direct sales increased by 61%. Cash increased by $6.29 million to $19.53 million with cash flows provided by operations of $7.44 million for the first six months of 2026. Our current ratio as of June 30th, 2026 was 7.4 to 1 and we believe we have sufficiently strong liquidity to fuel future growth. We are continuing our previously announced board-authorized share repurchase program of up to $750,000 of outstandingly at common stock.
We believe that this demonstrates our continued confidence in the strength of the 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 second quarter of 2026 compared to the second quarter of 2025. This is our flagship neck brace designed to prevent potentially devastating sports injuries to the cervical spine with $542,000, a 23% decrease, due primarily to a 43% decrease in neck braces solved. Neck braces represented 3% of revenues for the second quarter.
Our body armor products are comprised of chest protectors, full upper body protectors, knee braces, limb protectors, off-road motorcycle boots, and mountain biking shoes.
Body armor revenues were $8.75 million, a 6% increase due primarily to a 21% increase in revenues generated in the sale of our innovative Motone ADB boot range designed for off-road and adventure motorcycle riding.
Body armor products represented 53% of our revenues for the quarter.
Helmet sales totaled $3.56 million, a 14% increase due primarily to a 15% increase in revenues generated from the sale of off-road motor and ADV helmets sold during the quarter, as global demand for these exceptional product categories continues to grow.
Helmet sales represented 22% of our revenues for the quarter.
Our other products, parts and accessories category is comprised of goggles, hydration bags, apparel, sunglasses and bicycle components.
Other products, parts and accessory sales were $3.54 million. A 13% decrease due primarily to a 20% decrease in revenues from sales of MTB, ADB and motor apparel. It was partially offset by a 16% increase in revenues from the sale of bicycle components. Other products, parts and accessories represented 22% of our revenues for the second quarter. Now I will turn to our financial results in a bit more detail. Revenues for the quarter ended June 30th, 2026 were $16.39 million, a 1% increase compared to $16.18 million for the quarter ended June 30th, 2025. This increase in worldwide revenues is attributable to a $462,000 increase in body armor cells and a $444,000 increase in health itself that were partially offset by a $550,000 decrease in other product parts and accessory cells and a $162,000 decrease in Necro sales.
Net income for the second quarter of 2026 was $909,000 or 15 cents per basic and 14 cents per diluted share down by 20% as compared to 1.14 million dollars or $0.18 per basic and $0.18 per dilute to check for the second quarter of 2025. Revenues for the six months ended June 3, 2026 with $35.9 million, a 14% increase compared to $31.54 million for the six months ended June 3, 2025. This increase in worldwide revenue is attributable to a $2.18 million increase in body armor cells and a $2.43 million increase in helmet sales that were partially offset by a $151,000 decrease in other products, parts, and accessories sales and a $111,000 decrease in net price sales. Net income after taxes for the six-month period in the June 5th, 2026 was $2.68 million, an increase of 19% when compared to net income after taxes of $2.26 million for the six-month period end of June 30th, 2025.
LEAD continued to meet its working capital needs from cash on hand and internally generated cash flows from operations and at June 30th, 2026, company at cash and cash equivalents of $19.53 million. Turning to recent news, just after the quarter closed, we announced the partnership with Carter Systems, global leader in motorcycle communication systems, to integrate their wireless real-time mesh communication system into our innovative Moto A.5 helmet.
We see this as another example of the expertise and competency of our design and engineering team.
Our goal is always to be on the cutting edge of industry innovation, and when it's mutually beneficial, collaborate with leading partners in our industry. We look forward to releasing our integrated helmet offering in the second half of the year.
And in product category expansion use, We have developed an exciting range of bike care products through the establishment and acquisition of Bike Care Technologies, a Polish entity that will develop, distribute and market premium bike care products around the world.
We expect sales to start to forward through to revenues during the third quarter of 2026 when we launch this new exciting venture. Looking forward, while there are some potential headwinds globally, participation in consumer demand for our products around the world remains strong. Ordering patterns fueled by sell-through remain robust and very encouraging, and direct-to-consumer sales are growing rapidly.
We plan to continue to invest in building a diverse global team of sales and marketing professionals, and in the development of a pipeline of exceptional products.
We believe that these investments will continue to fuel strong gains in market share and growth. In conclusion, our team remains very excited and enthusiastic about the future, driven by our innovative head-to-toe product portfolio, our plans to amplify the brand to reach a much wider rider audience, and a strong balance sheet that is well-positioned to fuel growth and shareholder value.
As always, we'd like to thank our entire Lea family, our dedicated employees, business partners, and team riders for their continued strong support.
And with that, I'd like to turn the call over for questions. Operator?
Operator
Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. To leave the queue at any time, press star 2. Once again, that is star 1 to ask a question. Our first question comes from Chris Mueller, private investor. Please go ahead. Your line is open.
Hi, Sean. Hope you're doing well today. Just a few questions, if I may.
Hey, Chris. Thanks a lot. first regarding the supply chain issue was there any material revenue lost as a result of this or should essentially all of it shift into into q3 and can you maybe quantify what the scale of this impact was yes absolutely i think it's a really good question there was absolutely no revenue lost this is really just weeks in terms of shipping so instead of shipping in the last few weeks of Q2, which is what the stock was earmarked to ship in. The stock shipped at the beginning of Q3. It already has shipped. It's all cleared out. So we absolutely have not lost any revenue. Just means that Q3 got off to a hot blazing start. So it's good news for Q3.
All right. And regarding the Cardo Venture announcement, this is obviously very exciting from a product development perspective. Could you maybe speak to how Liat participates economically in that partnership and maybe what that opportunity can look like going forward?
Yeah, absolutely. I mean, I think this is going to be, you know, we're going to be earning our revenues here, you know, due to the sales that we make of Carta Venture Helmets to Carta. So those are Liat helmets that have got Carta technology built in. And of course, we'll be making a strong margin on those products. And I think it's economic in terms of the margin, but it's also a very good collaboration in terms of the two leaders in the industry in terms of communication and in terms of protection and how the technology working together. So there's, of course, a brand-building element to it. But we'll be earning margin on the products that we sell to Cardo. They've got a distribution network that is slightly different to ours, so there's additional customers that they can reach.
All right, great. Regarding the acquisition of Bike Care Technologies, could you maybe speak to the scale of investment here aside from the nominal purchase price disclosed in the filing? And is this going to be a subsidiary funded exclusively by LIAT and just flowing through the OPEX? Or is this a partnership with your Polish distributor or some other entity?
This is going to be 100% funded by LIAT. Just looking at the revenues in terms of pre-orders that we already have, I don't expect that there's going to be any significant funding that's going to be needed by Liet, you know, in the long term. This is going to be pretty much self-funded through BiCare as soon as things get moving. But 100% are in subsidiary by Liet. Of course, it's based in Poland because we manufacture these products in Poland and then we distribute around the world. So I don't think This is going to mean that we're going to have significant OPEX investment in this entity. Of course, it is a consumable type of product that we are going to be selling, so there will be some investment in inventory in order to make sure that we have the product available to sell. But we're really excited about it, and the response so far from our global distribution and dealer network has been well beyond what we expected.
Great. That sounds great. And last for me, I believe many in the industry recognized their tariff refunds in Q2. I didn't see any mention of this in the filing. Are you expecting any kind of meaningful refund of tariff paid last year?
Yes, we are expecting to get some tariff refunds in, and I think I'll talk to that in Q3.
Well, thanks for the time, Sean. Chat soon.
Operator
Thank you for your question. Our next question comes from Olivier Colombo, private investor. Please go ahead. Your line is open.
I really appreciate what you mentioned and answered the questions of Chris. And actually, those were the three that I had as well. But I would like to maybe go a bit further on that. But before that, I would like to actually congratulate you on the quarter, even though it was up only 1%, but just to remind investors and potential listeners here on the call that last year your Q2 was up 60%, and I think what you achieved today is quite remarkable. What I like also the most is your cash position, 19.5 at this level is very appealing to grow the brand. So my first question is regarding the supply chain issue that you faced in moto shipments. Can you tell us a bit more about those issues and how they came?
Yes, absolutely, no problem. So I think it's a good question. I mean, you know, they really do relate to some of the geopolitical things that we've been seeing going on around the world at the moment. nothing to do with our production, nothing to do with our manufacturing, and nothing to do with our planning. So there was a bit of a container shortage that was reported to us by our shipping companies. On a global basis, some of the shipping lanes have had to change because of some of the blockages that we've seen in a few different areas. And the result of that has taken a bit longer for shipping containers to get back from the destination back into Asia and because of that there was there was high demand and shipping containers and now I think we took a long-term decision we could have air freighted the products because the products were ready to ship so we could have air freighted the products of course that would have you know that might have improved our sales for Q2 but I think on a long-term basis that would not have been beneficial and we took a decision that we would we would hold the shipments over and ship them as planned via sea when the containers became available which happened to be in the first few weeks of Q3 okay that's perfect thank you very much and
to add on Chris's questions regarding cardio system is this an exclusive deal that you have with them or then could other helmet manufacturers do the same I think it's also a good question, and of course, we're very excited about the agreement and the deal that we have with them.
I think there's some elements of the agreement that are relatively confidential, but what I can say, Olivia, is that we have a very strong relationship with Carter Systems. It takes a lot to jointly develop a helmet. There's an investment in tooling, there's an investment in terms of the time and the it takes years to do so I think our relationship with Carter is what's important in terms of answering that question and I'm really looking forward to that relationship continuing with different products moving forward and yeah I think that's pretty much as much as I can say right now.
Okay thank you very much. Those were all the questions that I had. Thank you.
Thanks for the chat soon.
Operator
Thank you for your question at this time. There are no further questions in the queue. I would now like to turn our meeting back to Sean MacDonald for closing remarks.
Thank you all for joining the call today. I look forward to meeting again to discuss the results of Q3.
Operator
Thank you at this time. This is the end of our call. Thank you for your attention and your participation today. Please disconnect.
