CAPE TOWN, SOUTH AFRICA – May 13, 2011 -(Motor Sports Newswire) – Leatt Corporation, a Nevada corporation (PINKSHEETS: LEAT) (Company), and the distributor of the Leatt-Brace®, a Neck Brace System designed to help prevent potentially devastating motor sport injuries to the cervical spine (neck), today announced unaudited financial results for the first fiscal quarter ended March 31, 2011, (“Q1 FY2011”). The Company posted gross revenues of $2,924,698 and a net quarterly loss before taxes of $217,634. These results compare to gross revenue of $2,953,380 and net quarterly loss before taxes of $ 183,932 in the year-ago quarter. A summary of financial results is set forth below.
“Leatt Corporation has been working to return to profitability and a pro-growth strategy. The increase in net loss for the quarter is primarily due to shipments that were unable to ship during the Chinese New Year period as well as increased product liability insurance premiums and an advertising campaign aimed at growing the Company’s markets. Like many niche consumer product companies, the recession and downturn in consumer discretionary spending hurt our results and stalled our growth efforts. We believe that we are making progress in our efforts to return to profitability and then pursuing a growth strategy despite the continued negative economic environment. We are committed to pursuing a prudent plan for establishing a company that is capable of sustained and future profitability,” said Chief Executive Officer Sean Macdonald.
Since 2006, we have sold a line of Neck Brace Systems for adults and children that are designed to help prevent potentially devastating motor sport injuries to the cervical spine (neck) among motorcycle, ATV, bicycle and other motor vehicles worldwide. The Company product line is set forth at our sales/product URL: http://www.leatt-brace.com.
A financial summary of the Q1 FY2011 results appears below, which summary is qualified in its entirety by reference to the Q1 FY2011 financial results and footnotes thereto posted on http://www.leatt-corp.com. One should not rely on the following summary as a complete presentation of financial results and condition for Q1 FY2011, especially in any investment decision.
Three Months Ended 31-Mar 2011 2010 Unaudited Unaudited Revenues $2,924,698 $2,953,380 Cost of Revenues 1,045,164 1,151,463 ---------- ---------- Gross Profit 1,879,534 1,801,917 Operating Expenses 2,102,637 1,987,507 ---------- ---------- Loss from Operations (223,103) (185,590) Other Income (Expense) 5,469 1,658 ---------- ---------- Loss Before Income Taxes (217,634) (183,932) Income Taxes 800 2,400 ---------- ---------- Loss Available to Common Shareholders $ (218,434) $ (186,332) ========== ==========
NOTICE: This press release may contain forward-looking statements under the Private Securities Litigation Reform Act of 1995, as amended. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include, without limitation, the effect of competitive and economic factors, and the Company’s reaction to those factors; on consumer and business buying decisions with respect to the Company’s products; the ability of the Company to deliver to the marketplace and stimulate customer demand for products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need from time to time to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; product quality control issues; the absence of a strong e-commerce website for products; the continued service and availability of key executives and employees; unfavorable results of legal proceedings, especially personal injury or product liability lawsuits or intellectual property rights lawsuits; and the Company’s dependency on the sales performance of distributors and other resellers of the Company’s products. Increased financial performance in one or more quarters is not necessarily indicative of future financial performance. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public disclosures at http://www.leatt-corp.com. The Company’s common stock quotes on The OTC Markets Group, Inc. and said stock is a “penny stock” under SEC rules — all of which limits the liquidity of our common stock. The Company is not an SEC reporting company and its common stock is not extensively or actively traded. As such, any investment in the common stock is highly risky and has limited liquidity. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates, unless applicable laws require otherwise. Neither any URLs referenced herein nor their contents are incorporated herein or made a part of this press release.