8-K
Leatt Corp (LEAT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 ___________________________
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
March 10, 2022
LEATT CORP.(Exact name of registrant as specified in its charter)
| Nevada | 000-54693 | 20-2819367 |
|---|---|---|
| (State or other jurisdiction of | (Commission File | (IRS Employer Identification No.) |
| incorporation or organization) | Number) |
12 Kiepersol Drive, Atlas Gardens, Contermanskloof Road
Durbanville, Western Cape, South Africa
7550
\(Address of Principal Executive Offices\)
Registrant’s telephone number, including area code:
+27-21-557-7257
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class Tradings | Name of each exchange onwhich registered | Symbol(s) |
|---|---|---|
| — | — | — |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b -2 of this chapter)
Emerging growth company ☑
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On March 10, 2022, the Company issued a press release announcing its financial results for the year ended December 31, 2021. A copy of the press release, which the Company is furnishing to the Securities and Exchange Commission (the "Commission") is attached as Exhibit 99.1 and incorporated by reference herein.
In accordance with General Instruction B.2 of Current Report on Form 8-K, the information contained in this Report and the exhibit attached hereto shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information or such exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
ITEM 7.01 REGULATION FD DISCLOSURE.
The information set forth in Item 2.02 above is incorporated by reference herein.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release, dated March 10, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LEATT CORPORATION | ||
|---|---|---|
| Dated: March 10, 2022 | By: | /s/ Sean Macdonald |
| Sean Macdonald | ||
| Chief Executive Officer and Chief Financial Officer |
EXHIBIT INDEX
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release, dated March 10, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Leatt Corp.: Exhibit 99.1 - Filed by newsfilecorp.com
Leatt Corp Announces Record Breaking Year; Reports Results for FourthQuarter and Full Year 2021
88% Increase in Global Revenues to $72.5 million
184% Increase in Net Income to $12.6 million
179% increase in Earnings Per Share to $2.29
CAPE TOWN, South Africa, (March 10, 2022) - Leatt Corporation (OTCQB: LEAT), a leading developer and marketer of protective equipment and ancillary products for many forms of sports, especially extreme high-velocity sports, today announced record financial results for the fourth quarter and full year ending December 31, 2021. All financial numbers are in U.S. dollars.
2021 Highlights
• Record Fourth quarter revenues of $23.2 million, up 82%, compared to 2020.
• Fourth quarter net income of $3.8 million, up 115%, compared to 2020.
• Record full year revenues of $72.5 million, up 88%, compared to 2020.
• Record full year net income of $12.6 million, up 184%, compared to 2020.
• Record increase in earnings per share to $2.29 per basic share, up 179%, compared to 2020.
• Income from operations of $16.6 million, up 185%, compared to 2020.
• Cash and cash equivalents increased to $5.02 million, compared to $2.97 million in 2020.
• Recipient of Powersports Nifty 50 Award for 8.5 Moto Helmet Kit.
• Launched an initial line of high-performance eco-friendly MTB apparel.
Chief Executive Officer Sean Macdonald commented: "2021 was an absolutely exceptional year for Leatt, led by strong financial performance and global brand development in the context of surging demand for our innovative award-winning products. We closed out the year with a strong fourth quarter, the strongest quarter in our history in terms of revenue. Revenues for the fourth quarter of 2021 increased to $23.2 million, up 82%, compared to $12.7 million for the fourth quarter of 2020. We have now achieved record-breaking revenues for six consecutive quarters.
"Total global revenues for 2021 were $72.5 million, up 88%, compared to $38.6 million for 2020. We achieved very strong, double-digit revenue growth in all of our product categories in 2021 and in every major geographical region in which we sell our products. Net income for 2021 was $12.6 million, an increase of 184%, with earnings per share up to $2.29, compared to the prior year- a testament to our focus on driving revenues through category refinement and our ability to operate efficiently. Gross profit for 2021 increased to $31.4 million, up 81%, compared to $17.4 million for 2020. Total operating expenses increased 29% as we continue to invest in key drivers of future growth.
"Although we do continue to experience some challenging supply chain conditions globally due to port congestion, particularly in the U.S., as a result of the Covid-19 pandemic, our business has shown remarkable resilience and strength. We continue to develop and refine exceptional "head-to-toe" protective gear to enable rider freedom and to reach a wider rider audience, and consumers continue to enthusiastically participate in outdoor activities.
Founder and Chairman Dr. Christopher Leatt remarked: "Our development and engineering teams continue to strive for product excellence through innovation and cutting edge materials and manufacturing techniques, combined with professional and amateur rider engagement. Our team remains committed to striving for sustainable material usage and we are proud to be using eco-friendly bio-degradable packaging throughout our product line up. Our growing pipeline of products continues to be an important source of revenue for our customers globally and we are motivated by our most recent awards including the Powersports recognition of our 8.5 Moto helmet kit, which is an important part of our fully re-engineered off-road motorcycle helmet range."
Financial Summary
Total revenues for the fourth quarter of 2021 increased to $23.2 million, up 82%, compared to $12.7 million for the fourth quarter of 2020.
Fourth quarter income from operations increased to $5.0 million, up 115%, compared to $2.3 million for the fourth quarter of 2020.
Net income for the fourth quarter of 2021 increased to $3.8 million, or $0.68 per basic and $0.62 per diluted share, up 115%, compared to $1.8 million, or $0.33 per basic and $0.30 per diluted share, for the fourth quarter of 2020.
Revenues for 2021 increased to $72.5 million, up 88%, or $33.9 million, compared to $38.6 million for 2020, driven by a 73% increase in neck brace sales, an 85% increase in body armor sales, a 134% increase in helmet sales, and an 82% increase in other products, parts and accessories sales.
Gross Profit for 2021 increased to $31.4 million, up 81%, compared to $17.4 million for 2020.
Income from operations for 2021 increased to $16.6 million, up 185%, compared to $5.8 million for 2020.
Net income for 2021 increased to $12.6 million or $2.29 per basic share and $2.07 per diluted share, up 184%, compared to $4.4 million, or $0.82 per basic share and $0.74 per diluted share, for 2020.
Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. At December 31, 2021, the Company had cash and cash equivalents of $5.02 million and a current ratio of 2.4:1.
Business Outlook
Mr. Macdonald added: "While we will continue to monitor consumer buying patterns, macro-economic and geopolitical risks and the Covid-19 pandemic cautiously, our entire team is extremely optimistic about the future and our ongoing brand momentum. Consumer demand for our products continues to surge, and people around the world continue to participate in outdoor activities. We expect that our new partnership with the Pivot Factory Racing MTB Team, where their riders will race with our full range of protective gear and apparel, will be a tremendous boost in exposure for the Leatt brand.
"Our goals are to continue to refine our product categories to deliver exceptional products to a wider community of riders and to gain market share through product innovation and brand engagement. Many of our categories that have launched well are still in their infancy and show great potential to contribute to exponential growth.
"We still have a lot of work to do to remain at the forefront of product innovation and invest in building a global consumer brand in a competitive environment, but we are enthused by our team's resilience and our ability to gain market share, which we expect will continue in 2022 and beyond."
Conference Call
The Company will host a conference call at 10:00 am ET on Thursday, March 10, 2022, to discuss the 2021 fourth quarter and full year results.
Participants should dial in to the call ten minutes before the scheduled time, using the following numbers: 1-877-407-9716 (U.S.A) or +1-201-493-6779 (international) to access the call.
Audio Webcast
There will also be a simultaneous live webcast through the Company's website, www.leatt-corp.com. Participants should register on the website approximately ten minutes prior to the start of the webcast.
Replay
An audio replay of the conference call will be available for seven days and can be accessed by dialing 1-844-512-2921 (U.S.A) or +1-412-317-6671 (international) and using passcode 13727761.
For those unable to attend the call, a recording of the live webcast will be archived shortly following the event for 30 days on the Company's website.
About Leatt Corp
Leatt Corporation develops personal protective equipment and ancillary products for all forms of sports, especially extreme motorsports. The Leatt-Brace® is an award-winning neck brace system considered the gold standard for neck protection for anyone wearing a crash helmet as a form of protection. It was designed for participants in extreme sports or riding motorcycles, bicycles, mountain bicycles, all-terrain vehicles, snowmobiles and other vehicles. For more information, visit www.leatt.com. ****
Follow Leatt® on Facebook, Twitter, and Instagram.
Forward-looking Statements:
This press release may contain forward-looking statements regarding Leatt Corporation (the "Company") 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 included herein are "forward-looking statements" including statements regarding: the likelihood that the Company's momentum of record-breaking revenue growth will continue; the ability of the Company to continue to maintain its innovative and cutting edge pipeline of branded products or to financially benefit from its sales and marketing efforts; the ability of the Company's global supply chain to remain stable to fulfill the Company's customer demand; the financial outlook of the Company; the general ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often 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. Any indication of the merits of a claim does not necessarily mean the claim will prevail at trial or otherwise. Financial performance in one period does not necessarily mean continued or better performance in the future. The Company's actual results in any endeavor may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, which factors or uncertainties may be beyond our ability to foresee or control. Other risk factors include the status of the Company's common stock as a "penny stock" and those listed in other reports posted on The OTC Markets Group, Inc.
Contact:
Investor Relations
Investor-info@leatt.com
(917)-841-8371
[FINANCIAL TABLES TO FOLLOW]
| LEATT CORPORATION | |||||
|---|---|---|---|---|---|
| CONSOLIDATED BALANCE SHEETS | |||||
| DECEMBER 31, 2021 AND 2020 | |||||
| ASSETS | |||||
| 2021 | 2020 | ||||
| Current Assets | |||||
| Cash and cash equivalents | 5 022 436 | $ | 2 967 042 | ||
| Short-term investments | 58 262 | 58 257 | |||
| Accounts receivable, net | 12 660 936 | 7 173 829 | |||
| Inventory, net | 21 081 481 | 9 670 036 | |||
| Payments in advance | 1 610 640 | 805 098 | |||
| Income tax refunds receivable | - | 2 964 | |||
| Prepaid expenses and other current assets | 4 178 427 | 2 109 190 | |||
| Total current assets | 44 612 182 | 22 786 416 | |||
| Property and equipment, net | 3 128 086 | 3 052 276 | |||
| Operating lease right-of-use assets, net | 1 393 213 | 285 932 | |||
| Deferred tax asset, net | - | 78 700 | |||
| Other Assets | |||||
| Deposits | 33,339 | 33,699 | |||
| Total Assets | 49,166,820 | $ | 26,237,023 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Current Liabilities | |||||
| Accounts payable and accrued expenses | 14,617,671 | $ | 8,008,925 | ||
| Note payable, current | 83 270 | - | |||
| Operating lease liabilities, current | 318 621 | 207 824 | |||
| Income taxes payable | 2 738 818 | 1 654 200 | |||
| Short term loan, net of finance charges | 975,025 | 677,601 | |||
| Total current liabilities | 18,733,405 | 10,548,550 | |||
| Deferred compensation | 320,000 | 240,000 | |||
| Note payable, net of current portion | 189,249 | - | |||
| Operating lease liabilities, net of current portion | 1 074 592 | 78,108 | |||
| Deferred tax liability, net | 228 600 | - | |||
| Commitments and contingencies | |||||
| Stockholders' Equity | |||||
| Preferred stock, .001 par value, 1,120,000 shares | |||||
| authorized, 120,000 shares issued and outstanding | 3,000 | 3,000 | |||
| Common stock, .001 par value, 28,000,000 shares | |||||
| authorized, 5,673,683 and 5,430,374 shares issued | |||||
| and outstanding | 130,162 | 130,111 | |||
| Additional paid - in capital | 9,230,847 | 8,338,158 | |||
| Accumulated other comprehensive loss | (779 268 | ) | (562 700 | ) | |
| Retained earnings | 20 036 233 | 7 461 796 | |||
| Total stockholders' equity | 28,620,974 | 15,370,365 | |||
| Total Liabilities and Stockholders' Equity | 49,166,820 | $ | 26,237,023 |
All values are in US Dollars.
| LEATT CORPORATION | |||||
|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | |||||
| FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 | |||||
| 2021 | 2020 | ||||
| Revenues | 72,475,813 | $ | 38,604,289 | ||
| Cost of Revenues | 41,029,710 | 21,215,669 | |||
| Gross Profit | 31,446,103 | 17,388,620 | |||
| Product Royalty Income | 182 698 | 88 748 | |||
| Operating Expenses | |||||
| Salaries and wages | 5 003 640 | 3 480 181 | |||
| Commissions and consulting expenses | 812 097 | 586 509 | |||
| Professional fees | 1 072 912 | 793 859 | |||
| Advertising and marketing | 2 170 788 | 2 167 445 | |||
| Office lease and expenses | 428 608 | 306 855 | |||
| Research and development costs | 1 826 846 | 1 522 758 | |||
| Bad debt expense | 222 250 | 71 862 | |||
| General and administrative expenses | 2 450 376 | 1 879 286 | |||
| Depreciation | 1 025 536 | 832,216 | |||
| Total operating expenses | 15,013,053 | 11,640,971 | |||
| Income from Operations | 16 615 748 | 5 836 397 | |||
| Other Income (Expenses) | |||||
| PPP loan forgiveness income | - | 210 732 | |||
| Interest and other expenses, net | (163 | ) | (4 724 | ) | |
| Total other income (expenses) | (163 | ) | 206 008 | ||
| Income Before Income Taxes | 16 615 585 | 6 042 405 | |||
| Income Taxes | 4 041 148 | 1 618 533 | |||
| Net Income Available to Common Shareholders | 12 574 437 | $ | 4 423 872 | ||
| Net Income per Common Share | |||||
| Basic | 2.29 | $ | 0.82 | ||
| Diluted | 2.07 | $ | 0.74 | ||
| Weighted Average Number of Common SharesOutstanding | |||||
| Basic | 5,480,375 | 5,390,420 | |||
| Diluted | 6,068,276 | 5,990,798 | |||
| Comprehensive Income | |||||
| Net Income | 12 574 437 | $ | 4 423 872 | ||
| Other comprehensive income, net of (1,000) and 20,500 deferred income taxes in 2021 and 2020 | |||||
| Foreign currency translation | (216,568 | ) | (33,655 | ) | |
| Total Comprehensive Income | 12 357 869 | $ | 4 390 217 |
All values are in US Dollars.
| LEATT CORPORATION | ||||||
|---|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 | ||||||
| 2021 | 2020 | |||||
| Cash flows from operating activities | ||||||
| Net income | $ | 12 574 437 | $ | 4 423 872 | ||
| Adjustments to reconcile net income to net cash provided by | ||||||
| operating activities: | ||||||
| Depreciation | 1 025 536 | 832 216 | ||||
| Deferred income taxes | 307 300 | (78 700 | ) | |||
| Stock-based compensation | 866 740 | 242 093 | ||||
| Bad debts reserve | 189 699 | (2 819 | ) | |||
| Inventory reserve | (408 | ) | 7 464 | |||
| Gain (loss) on sale of property and equipment | 5 040 | (22 189 | ) | |||
| PPP loan forgiveness income | - | (210 732 | ) | |||
| (Increase) decrease in: | ||||||
| Accounts receivable | (5 676 806 | ) | (4 214 998 | ) | ||
| Inventory | (11 411 037 | ) | (1 022 324 | ) | ||
| Payments in advance | (805 542 | ) | (357 622 | ) | ||
| Prepaid expenses and other current assets | (2 069 237 | ) | (980 123 | ) | ||
| Income tax refunds receivable | 2 964 | (2 964 | ) | |||
| Deposits | 360 | (7 057 | ) | |||
| Increase (decrease) in: | ||||||
| Accounts payable and accrued expenses | 6 608 746 | 2 599 578 | ||||
| Income taxes payable | 1 084 618 | 1 061 539 | ||||
| Deferred compensation | 80 000 | 80 000 | ||||
| Net cash provided by operating activities | 2 782 410 | 2 347 234 | ||||
| Cash flows from investing activities | ||||||
| Capital expenditures | (1 139 298 | ) | (1 477 454 | ) | ||
| Proceeds from sale of property and equipment | 1 966 | 25 713 | ||||
| Increase in short-term investments, net | (5 | ) | (18 | ) | ||
| Net cash used in investing activities | (1 137 337 | ) | (1 451 759 | ) | ||
| Cash flows from financing activities | ||||||
| Issuance of common stock | 26 000 | - | ||||
| Proceeds from note payable | 272 519 | - | ||||
| Repayment of note payable to bank, net | - | (300 000 | ) | |||
| Proceeds from Paycheck Protection Program Loan | - | 210,732 | ||||
| Proceeds from short-term loan, net | 297 424 | 101 127 | ||||
| Net cash provided by financing activities | 595 943 | 11 859 | ||||
| Effect of exchange rates on cash and cash equivalents | (185 622 | ) | (13 156 | ) | ||
| Net increase in cash and cash equivalents | 2 055 394 | 894 178 | ||||
| Cash and cash equivalents - beginning of year | 2 967 042 | 2 072 864 | ||||
| Cash and cash equivalents - end of year | $ | 5 022 436 | $ | 2 967 042 | ||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||
| Cash paid for interest | $ | 28 276 | $ | 32 015 | ||
| Cash paid for income taxes | $ | 2 680 978 | $ | 617 282 | ||
| Other noncash investing and financing activities | ||||||
| Common stock issued for services | $ | 866 740 | $ | 242 093 | ||
| Common stock issued for accrued leave | $ | - | $ | 16 334 |