Leatt Q2 Earnings Call Highlights

Second-quarter revenue rose 1% to $16.39 million , but net income fell 20% to $909,000. Delayed shipments to global distributors, caused by container shortages and shipping-route disruptions, pressured results; Leatt said the products shipped in the early Q3 and that no sales were lost. Growth was led by the U.S. market, which increased 11%, and direct-to-consumer sales, which jumped 68%. Body armor revenue rose 6% and helmet sales increased 14%, offsetting declines in apparel, accessories and neck braces. First-half performance remained strong: revenue grew 14% to $35.9 million, net income increased 19% to $2.68 million, and cash reached $19.53 million. Leatt is also expanding through a Cardo-integrated helmet partnership and its new Bike Care Technologies business, expected to begin contributing revenue in Q3. Leatt OTCMKTS: LEAT reported second-quarter revenue that rose modestly from a year earlier as delayed shipments to global distributors offset gains in U.S. sales, direct-to-consumer business, body armor and helmets. Total revenue for the quarter ended June 30 was $16.39 million, up 1% from $16.18 million in the prior-year period. Net income declined 20% to $909,000, or $0.15 per basic share and $0.14 per diluted share, compared with $1.14 million, or $0.18 per basic and diluted share, a year earlier. Chief Executive Officer Sean Macdonald said the quarter was affected by temporary supply-chain timing issues that delayed several shipments scheduled for the latter half of the second quarter. He said the issue has since been resolved and that the affected products have already shipped in the early weeks of the third quarter. “There was absolutely no revenue lost,” Macdonald said during the company’s earnings call. “This is really just weeks in terms of shipping.” U.S. revenue increased 11% to $6.15 million during the quarter, while international revenue rose 4% to $10.24 million. Direct-to-consumer sales increased 68%, or $962,000, which Macdonald described as a continuing highlight for the company. The delayed shipments primarily affected apparel, boots and helmets intended for global distributors. As a result, sales to global distributors fell 6%, or $653,000, during the quarter. Macdonald noted that global distribution revenue had increased 79% in the second quarter of 2025, creating a difficult comparison. During the question-and-answer session, Macdonald said the shipping delays were related to a shortage of containers and changes to global shipping routes amid geopolitical disruptions. Leatt opted to wait for sea freight rather than use air freight, which he said would have improved second-quarter revenue but would not have been beneficial from a longer-term cost perspective. “Nothing to do with our production, nothing to do with our manufacturing, and nothing to do with our planning,” Macdonald said of the delays. Body armor remained Leatt’s largest product category, accounting for 53% of quarterly revenue. Sales in the category rose 6% to $8.75 million, driven primarily by a 21% increase in revenue from its Moto and ADV boot range. Helmet sales increased 14% to $3.56 million and represented 22% of revenue. The company attributed the gain primarily to a 15% increase in off-road Moto and ADV helmet revenue. Sales of other products, parts and accessories declined 13% to $3.54 million. The category includes goggles, hydration bags, apparel, sunglasses and bicycle components. The decline reflected a 20% reduction in revenue from MTB, ADV and Moto apparel, partly offset by a 16% increase in bicycle component sales. Neck brace revenue decreased 23% to $542,000.