Leatt (LEAT) 29 Oct 242024 Q3 Earnings call transcript

Greetings and welcome to the Third Quarter 2020 Results Conference Call.

[Operator Instructions]

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host. Michael Mason, Investor Relations of Leatt Corporation. you. Thank

begin. may You

today, morning, the of to may This this to for be for and discuss website The XXX-XXXX Leatt's by filed press international being quarter Good X:XX XXXX, is investor for Eastern The a.m. on An the Leatt press conference XXXX. and release a available issued call call the audio will callers. calling XXX-XXXX at website. report call leatt-corp.com. company October replay on be and Tanya. X XX, accessed may live the at from posted with the be (XXX) welcome its company and North Corporation third (XXX) Tuesday, SEC. broadcast days or accessed Thanks, financial is results release America

from does release The forward-looking Actual to not in XXXXXXXX. number in available days. refer following replay this regarding press call. statements webcast the for the conference and this in XX, made differ is October complete call Certain immediately of statements. X will undertake Leatt will call. to this results constitute forward-looking continue could Corporation be those call materially such statements obligation statements cautionary replay update today's pin any A statement this dated XXXX. discussed in Please may

to The company will open make a presentation on questions. then the the quarterly results call and

turn Good to call to MacDonald, over like now the you Town, to afternoon Corporation. would in Sean. of I Leatt Mr. Sean Cape CEO

for you Good morning, Mike, and joining us all today. thank

return million, increase sales early the gross global were marginal $XXX,XXX, fiscal a quarter for net of putter $XX,XXX. Total results to the sales up up revenues quarter the We year-over-year. encouraged sales revenues were XXXX. see the by We were global still stage. as X% $XXX,XXX $XX.XX were at growth, up albeit very and a Farima of are all this as third

begin in million. and to to for be third International $X.XX as X% inventory to Gross continues profit uptick sales were the our $X.XX revenues. million, ordering digested the filter was up by quarter through

monitor are strong certain areas of Although remains to economic is as point to our improve. participation ordering continue the continue impact encouraging pillar headwinds patterns to growth potential and we and the the of inventory, of important start inflation when there

We are coming that continue through will believe that quarters. these trends the

also margins increased quarter quarterly improve second sequentially XX% as the older to Our we inventory margins. carrying manage continued U.S. on selling basis a over and at [ higher stock ]

and turn continue by last million inventory opportunities see levels over to stabilize, stronger ordering. decreasing to and XX% Our continue over or preparation stock as months slow $X.XX a medium to we the levels X inventory in for is repair

constrained particularly and remain product the our have global Adventure been boot We and of Apparel categories Footwear the talent levels, conditions to MTB the We that market on aggressive pipeline ship all a the a and multiple causing environment dealer and for ADB riding terrains. product track enthusiasts, delivering core seeking an continue line continue innovative comfort orders to for initial distribution, designed weather and line, in a safety while we record, motorcycle confident high of to level. competitive and at shoes current buying with during Leatt in quarter. segment. comprising revenues inventory very pricing basis ADB substantial cautious reach contracted has competencies

continues as pick to expect ordering We is and to this improve area digested up. inventory

the at firms direct-to-consumer the quarter. XX% growing We to continue see during level, by very encouraging

flows X invest push for $X.XX provided XXXX. of expectations. cash $XX.X to Our conditions, continues XX, industry-wide operations in South and million months increased consumer by current in by million in working September with our our sales to capital Africa display the million $X.X growth, long-term platform exceeding to direct reinvestment strong ended Despite cash

in motor capital the public dealer working in will recovery talent, Our fuel about our innovative forward. investments team that growth constrained brick-and-mortar U.S. enthusiastic strongly brand going believe product in continues capabilities is development the as our during our efficiently. despite this currently at sales continues play. as We that to distribution manage in well to improve moments our team some our liquidity and quarter, Overall, remains the

Now I to product turn of our details third on the sales will of to quarter XXXX. quarter the categories when compared more for third

primarily sales X.X% as were X% X% [indiscernible] grows. year-over-year was Flagship of partially Net net our XX% sales pros for premium total offset quarter. rates a in XXX% net by $XXX,XXX, to the of of a our increase in increase a sales our revenues attributable decrease

boots protectors, upper iBasis, Our body cycle product, biking were increase quarter protectors, $X.XX Alma million, shoes. the XXXX X% Otomoto Minova mountain third golds, Saanichest and year-over-year. Body full a for Banarevenues

the primarily were of biking XX% increase by in made shoes a as were upper of X% here XX% The our of our for products [indiscernible] revenues the Body offset our protection, body decrease EV revenues. sales mountain in motor increase present motorcycle and of result of a up of of the by sales partners comprising offset XX% sales Home year-over-year a was XX% increase inventory. XX% a XX% Armetale total boots a to homes. million, footwear, decrease digest Yama continue our partially in $X to quarter. our sale primarily homes partially and distribution itself

well accessories year-over-year. and were our comprised XX% up the to manage jerseys apparel parts stocking revenues Our of jackets decrease decrease as of sorts of our category and items, was XX% distribution apparel goals XX% ordering partners NPV a due parts made quarter. Other support for million, a result aftermarket to and sales continue accessories of The $X.X and in including MTV is decrease dynamics. products and migration items, partially an other products, as as and category bags revenues

financial that XXXX to $XXX,XXX income by or $XX.X to XXX,XXX per flow united increase armor $X.XX million, of Net third quarter in turn basic income of for to the home down Net revenues third were our quarter primarily Total continued XXXX. will a parts sales more the were third compared This increase was detail. net in hand and $X.XX cells, the share revenues working is of diluted share, per the and and a in I of X% in to $X.XX quarter million as basic per increase a from cash quarter Now results increase offset of in for $XX,XXX for compared $XX third sales. its XXXX. $XXX,XXX by in worldwide up XXXX $X.XX and bit XX% on cash needs internally to or other accessories sales, capital partially generated $XXX,XXX product $XXX,XXX from operations. a decrease meet a net base attributable body for

the that equivalents have to cash anticipation of continue million Inventory This -- challenging revenue our $XX.XX extent, a impact and revenues XXXX, to XX, some company had be we international filter headwinds expect and beyond. September globally X.X a and although and cash and continues some over few ordering is to position. demand economic through may At periods -- saw the of ratio current remains improve distribution ultimately, trend strong to statically patterns to next continue and our we digested. that

few emerging through partnerships new to very Kingdom, revenues the quarters. some next in and Europe exciting United have that filter markets, the distributor should we over Additionally,

continue marketing team world. will of adding carbides and growing We near around selling the professionals building optimize talent. opportunity by continue by the industry-wide presents a to sale as to family our capabilities an

balance future on results out portfolio innovation all strong increase typically are as we well cornerstone our value. a that believe investments and robust organization with an years revenue a some and take of growing multichannel these brand growth our pipeline, time the shareholder that to to great positioned make our -- future a do remain growth, but we sheet enthusiastic is conclusion, fuel impression about developing of for confident growth plans. and very are global sales Although In and building team future we we

our entire dedicated for like team to partners support. new continued always, for and our their As riders thank business I'd family, strong Leatt

With that, over to floor turn I'd like Operator? any for questions. the

Instructions] [Operator

first Private Alava Investor. Our comes question from Colombo

the I for low in year see you. of And again. marks a inventory couple questions company this of grow to cycle. have hopefully, the point this Nice

like few is are back. yes, stabilized it if The and has first you Have Europe also? anecdotes one And can looks a provide seen this coming customers you

in of And you'll see still we mean And then marginal confident terms the albeit look I with latest if improvement starting consumer consistently. coming an spending. interest a more a October, think bit to the confidence uptick. little rates and you an uptick have I down, seen was also in decent, at sentiments. that feel a indexes, inflation sentiment Yes, starting I there consumer certainly in think are definitely people

an you mean Inventory consumers of certainly through lot cost the better. our that a has There's Ordering see of expecting more the that level of I get side. rates, of side course, quite on is the uptick customers fueling things consumer of is interest the spending. on then, That's and business decrease is now. always return a with with selling better. capital been decreases, looking start in it course, in a Europe, a looking And lot are in positive to I And think digested. to ordering things can inventory.

improve we nicely. in think for are things to I Europe quite well So positioned

cash, particular in question coming which now next million. you to money any Do increase at and use $XX.X the regarding your continues this is My months? to is plans have

of we're that in which at we with start U.S. mean, I factory with and again. terms, an good and we're of on to hopefully, a look in working in and couple it's It's come ordering and capital quite return, something question, to will Olivier, Africa And a growth. intensify focused sustainable obviously position to South investment it. the do expecting internally,

of working we're is, I into of that great go have into a of couple capital, I on currently looking there's think So at. cash. things use the a our will of some which cash other mean that course, hand we back

Of on are course, spending our we marketing. intensifying

very in are the And people. costs I Marketing We're beginning results. and good on people. can bringing great that talent. mean some see sales strong you in on we're also and up.

you And there in needed. some sales spending organization will for on So sales our marketing costs can definitely selling increase be some as build side. we and the where the and particularly an out certainly expect area world, around are us marketing

certainly cash allocated be will So to that.

at course, the are areas, cash. interesting we categories then, any there look to that lookout we invest will on come always There that if add, can And our are of opportunities hard around.

thinking We are we that about. something certainly plans. do some have it's So

the for past. in in investing think move brand us Meat us. is a gained brand It I certainly momentum the smart

her be has And organization smart accounts also forward. investing new of a extensive is course, our our of receivable a in inventory, can product categories sell creditors also and use moving selling to that us. cash factory And up building very strong for to wise

you will is headwinds? see some my the quarter? did proud makes question what actually That's like finally, last what you this most And perfect. or of you kind And not in

That's an interesting one.

It's are cash there constrained really huge In think, higher QX a selling our still part we're fact basis, that of the into I environment, inventory. the a up course, we've proud margins team look of fact we're managed and to revenues inventory the margins. that new that very inventory for of current to margins sequential by -- of we just if on of compare out the the at returned of sequentially some some of that increase proud focus. at growth, at our setup lower balancing ask. and older areas to QX, converting revenues are very you balancing

well. been I really, that's think managed really

obviously that we were to the people regions that at the think the a we tough growth make team, results, growth proud there. sales the manage are we But active if look I'm capital in monitoring, working sure we we've moving to in Brick-and-mortar are in forward. I'm something that hard to all, right involved certainly our started certain the our our U.S. which drive for level on will in carefully, little sales of something to return working that we of proud order products, a I wells, fact are and right of bit fuel

question Private comes Mesa. from next of Nick Fisher The

your you how little of of much inflation over that of a and efforts. revolves XX% X post over marketing then if the sales . really cost But X kind the and just could the bit months of structure is increase COVID of last in provide in strategic and color XX% intensifying mentioned salaries around marketing whatnot? investment months. on the obviously, question My just increase new does with last and

Sure. problem. No

mean primary on the I salary and already increases sales So stack. marketing

that changed We got in so on come type full U.S. our a and in reforce also thing. So of some We've of and now -- salaried course, the terms of costs costs model. there's with employee capital that that

that going feel of talent the fuel We managers a form available reps an that are some strategic was became sales on and that So the people marketplace there's moving growth of opportunity move. forward. to bring in in the to that

say can see conditions the Tang quarters which to will several that was you move, So we as a improve. over strategic that, continue health next

want On obviously a It's an around ADG feel it pay making spend MTB off future. that Moto in is important did the anything take brand our huge addressable also the we market, from motorcycle ABD brand side marketing is that for to had so away not level, and we've the -- us. and on the definitely we will the investing and And line the funding area. in area side in because Martin to Lit

off far brand. budgets for marketing year-to-date basis, to paying really towards as our So in well I ABB sales. a been us. ADB is XX% of on mean, so increased a build we looking nicely has that to as AV that X% our

really that's see. to nice So

think market I in off the are investments conditions. So paying those current

terms to on And managers In a organization this all focused areas. some strong I is global also and mean we've different back is brought salaries, of on and the sales building the of out U.S. managers brand outside about that brand sales

the a for those care in take salespeople again. areas. So to and managed in professional our few can our in increased, areas areas to seeing, of you our uptick due achieve customers those on some sense where bring makes we've we're sales that that is have look there's that it if the ordering at that of focus to us

Next from . Chris Investor. Private comes question Muller

Maybe questions today. X X or

again First, it growth some revenues. is to good international with see

For the heavily Moto the all more initial is for revenue . distributor Or third weighted clarity, side? include quarter does third lines? stocking orders quarter XXXX to the

It motor will be the side.

but Chris. we'll some several included, ourselves, the over primarily that by So NPD are quarters. be shipping There sales next MTB it's

just in particular of difficult. especially helpful. product and categories, is the it -- because number those at notable And of That's discounting sheer the else these weakness makes gains offsetting commented nature to elsewhere. play discretionary and on that categories? particularly footwear is purchases those the something there more overhang there second, Is you apparel of inventory in or competitors the Or

when just in inventory I is shoes investments full it think food have I'm just at some nature, looking to range comes the of to mean than and to footwear, boots, areas. a it comes got you've size I larger so on course, areas care, other in when those

brands then factor. one to factor think inventory. they drop that's biggest on many shoes competitors the But move, competitors inventory boots pricing have needed huge and and and afraid So strongest that is and I hand some we're that our of the motorcycle the huge of strongest has amounts significantly some of our in that to on of amount not

lot of of market And a creates else. that turmoil course, everybody the in for

there. deliveries certain of ordering category changes and and leading a to inventory it the of they inventory means for If of pricing if kind storm decrease forced And the that a at scenario. distribution they're model that creates because of same you because lot willing they employ. have And brand, pricing time, to a a out dropping are brand high go-to kind a there's that perfect the in

big is that U.S. what and which us we and industry is the particularly quite particularly boots, ourselves a category And motorcycle of, big with a for found the in quite middle in category.

for been So through to quite it's trade difficult us that.

I of of our reasons that competitors extremely in our one think of and to strong mean, we opportunity the margins But activity there. promotional that move dropping to out inventory completely of it has some certainly in all bits. there We has some got has took on I are our pricing, excess with are why the that's that by are lot market been a deal been general,

spiked I appreciate gains? product category higher Is you partnership those a quarters. there. that there Could recent the comment particular for the any on primarily maybe that's color new responsible in royalty income or product

partnerships some that new our and the some products on got licensed emerging developed we are markets. that in side Yes, some distribution we of in

And for been actually. that increase of seems us royalty licensing really, in port our course, well really to So they've doing then, be revenues. products and the

on hiring on team back. been X any you any broadly, reach more about U.S. an the could sales maybe you months there the the the update since progress lastly, made And update U.S.? in additional last the MTB And just provide announcement and dealer expanding Has in

Sure.

team of hires the MTB side. the. new. a the sales So reps mean on he's have those in course, manager a on sales been national some across we of building Ritchie Joe and are U.S. -- of He's employee the board now. mix And new or I And relatively independent

those So that We And selling the next side. through course, quarters. a we on but people not to intensify expect bringing can in marketing do really revenues new be to in revenues U.S., Ananda. on MTB yet, that our the focus going the assets to are manager reflected are you several over have of activities TV

order moment very Joe marketing and NPD working U.S. to sure make specific. closely is that material she's at the branding in And with our our

that the started over We'll MTB and started it. the forward some some quite we've you sales in a more could to on some next traction that we we to the Sales as increase have gain brought quarters on strongly dealer see definitely start the nicely to few see uptick, looking bit sales new paying off in start to and staff gain actually. reps And penetration new of some So the say. U.S. increased

our next turn like MacDonald floor This for questions conclude results back forward XXXXX Sean call We us There the you to all to at Thank this teleconference. review you. are further fourth of to Thank does remarks. quarter. today's no joining closing the would I for the time. look to today.

participation, time. your a lines great have this disconnect your and Thank for You you day. at may