LEAT - Earnings call transcript Q1 2021

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Operator

Greetings and welcome to the Leatt Corporation First Quarter 2021 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] It is now my pleasure to introduce your host, Michael Mason, Investor Relations for Leatt Corporations. Thank you.

begin. may You

Michael Mason

the Town, call of press questions. this statements you in The Leatt dated the differ update Please presentation for the those made be not like audio on results is XXXX. release morning with Conference and call and statements Good and the to continue broadcast could Leatt in is available of webcast materially also afternoon the Leatt's be Leatt company's a will to will Sean. I conference regarding being a number the following An obligation any to from undertake may North quarter XX:XX on call. forward-looking days accessed This XX, leatt-corp.com. forward-looking Thanks, statements would Eastern posted America in does Corporation. SEC. am today's to over and Actual will X-XXX-XXX-XXXX may to in available The turn discuss such constitute website. complete Investor call. the callers, the this and international will refer press XXX company Sean issued by conference company Call XXXX. live call for and cautionary its may replay discussed accessed results statement seven for in to at open ID release Wednesday, call call the the immediately statements. and A Certain Corporation Corporation from this May of at report days. to XXXXX. Mr. calling then Doug. XX call make of be filed The welcome May Cape Macdonald, for XX, X-XXX-XXX-XXXX today the financial our Good on quarterly now website first to or be release results the press replay CEO

Sean Macdonald

end you, thank a today. XXXX side, to continued Good our am Mike, pleased that morning all, XXXX and report first I the us into for on your of at have joining performance quarter. record-breaking strong

for XXXX best First slow, $XX.X the exceeding This quarters have XXXX first was global to million, achieved traditionally quarter, this in We were quarter. our XX% up our compared company's revenue the the the but that fourth quarter head-to-toe best quarter previous XXXX history of quarter. been and range growth to strong off-road America for model. North testament a continues to are the our biking and brand momentum of in the across the believe effectiveness our motorcycle Leatt mountain these products, and achieve abroad. business riding results We revenues that

proud have very contributed staff Leatt are continued excellence. talented that team riders We and of our to the of

of While in increases of most body products. we revenue soothing during especially products armor saw in in our are the [ph] proud we period, the growth our

of body million includes revenue. compared quarter quarter shoe by which first $X increased XX% quarterly First armor for products, of XX% when a to and accounted sales complete XXXX our line and of or boot the

helmet sales demand helmet initial Our motorcycle continued to shipments encouraging, also last for innovative XXX% of and the due and award helmet increased MTB over quarter very from strong XX% revenues of strong first completely were use. XXXX off-road over our redesigned braces winning primarily year, motor a line, up neck for line

shipping rising a XXX% on war headline million, $X.X XX%, materials major at midst detail is Net income which consistent numbers get moment, of important in with the a actively remarkable. the costs as some Asia. in continue financial last year compared we costs achievement more manufacturing and to were remained the to and manage in Margins ago. some logistics of will We results of a but the increase quarter year was

is in-line which Our XX%, costs increased operating our by with expectations.

in investing marketing people, will are with to our which dividends more teams, As sales growth. in pay commissions we we we and fueling the increasing professional investing sales by and are in-line salaries now in we and future. believe And continue grow, growth

various media, and sports sponsor globally. to sponsor and help but and magazines motor of advertise increase awareness and not and to events us and number online design bicycle a We professional who proven riders in have our brand engineer products, continue only teams product

million, the the a in Now first Total fiscal of financial increased for quarter quarter to I'll quarter XX%, turn the to of the first compared $X.X revenues XXXX. more million detail. $XX.X to results up bit to XXXX for for

quarter share, compared was First compared quarter quarter $X.X the share $X.XX Net ended first income $X.XX or diluted to and for basic per income per XX, to XXXX. for from operations the $X.X the $X.XX or million, diluted XXX% $XXX,XXX, and for million, XXXX. $XXX,XXX per up first XXXX March months three of increased to basic of

increases, captured percentage provide by of I Although of highlights some product of I'll the a category. bit breakdown

neck generate than to as products [indiscernible] to the of XX% our increase brace continue abroad; We XX% revenue. quarter, XXXX higher due the product the The is with our of strong period for in demand gross both and a are for U.S. they categories. very during first pleased continued margin quarter other performance the

base-back in biking comprised Our and market in revenue. footwear mountain demand increase elbow body is the full attributable motorcycle Body for and and boots body this motorcycles revenue shoes. armor to to off-road armor as other strong armor accounts boots our of US category and both body XX% mountain well chest our shoes And of limb internationally. protectors, line XX% for biking and a the quarter protectors, as knee protectors, products of of braces, are body range guards and of protectors knee

the motor strong of for patented be completely cases, technology accounted And helmets our off-road wider XX% redesigned helmets helmet XXX% our our meet continue in needs redefined helmet and, brain contain to sales mentioned, around to the of a for revenue. to community. for in redesigned to world. motorcycle shipments these I demand for first [ph] some due turbine All Helmets line helmet degree completely of award-winning line. riding use refined XXX innovative As initial increase protection. is quarter our MTB our customers strong our

Our demand other of jerseys. our quarter and for edge of the and cutting comprised for of products, bags, apparel revenue. line strong to use. XX% our motorcycle bottles, pants the to apparel motor our category fiscal parts is line MTB accessory other due for biking parts and increase hydration first continued category and The XX% accounted mountain of and during is both products lines jackets, This and accessories

balance the sheet. to Turning

line requirements hand, from well balances and currently meeting meet generated operations are by believe capital the our revolving We of a as current We net least cash are equivalent as needs XX with through at the that cash anticipated generated on cash by along cash next credit our months. to cash operations. working cash sufficient internally

product beyond have XX production growing no for major intensive for of We plans any our months tooling the in the capital next range. expenditures

of and XXXX. As had we March $X XXXX, cash XX, on $X.XX March of equivalents XX, cash to million million compared

Our to current has debt. been X we long stands ratio, and remarkable term no have In a quarter. X.X at debt-to-equity truly closing, this

expect continue. COVID-XX spite in activities in trend to auto We in participation pandemic of the the worldwide

push range we a innovative and look need strategy XXXX, gear edge rely the of working Our XXXX and half protective presenting give are riders wide exceptionally of distributors can brand to cutting We of further pipeline to riders that by order our building consumer produced our themselves We single a a on. that confidence a a standard that gear to during XXXX. is our they consumers single brace from we well. and they believe forward for In the with of that dealers. the product, lineup appeals to gold global sentiments products initial product neck And second encouraged market. and award-winning a

an every later, part years produced that the array XX rider of products and virtually wide appeal we community. to of Now body a protect

a to products valuable stockholders persistent around head and finally exciting of rewards partner is for time its some as world. suite and Leatt investment of dealers decade toe hard the dedication the reaping our of a distributors of company to truly and excellence. are work our the Importantly, a been over This for has

for always, I'll over it has the the we'd turn thank a that, the to questions. Leatt success employees, Leatt to for and like making partners As our continued back in team operator entire With Operator? become. that few their family, dedicated call riders our business support

Operator

Olivier Thank you. [Operator [ph], a comes your of investor. from Colombo private Instructions] question. Please, proceed with Our line the first question

Unidentified Analyst

Good afternoon, Sean.

Sean Macdonald

Hello, Olivier. How are you doing?

Unidentified Analyst

especially doing for Leatt's We'd your I'm much. like QX slow quarter history well, the thank which in in very to extremely is and you and the you quarter. congratulate best team seasonally

congrats. So

Sean Macdonald

you. Thank

Unidentified Analyst

I four for questions you. had

you would is during The any in that? apply did And yes, face product QX. was first what if And QX? out-of-stock the question same category for one

Sean Macdonald

Okay.

bit stronger expected. network, distribution distributors sales and through also dealers a our across through demand So, was and than

they So, do now out-of-stock of categories. have stock. replenished some have They their sell. And certain were QX, our of course, stock dealers in to in

There is categories improving. weeks major the So, few were beyond affected out-of-stock. situation a that no were

So, certainly Olivier. the situation improved, has

Unidentified Analyst

you. excellent hear. That's to Thank

is The to you yourself? some over input strategy take racing pass retailers by cost. second Do to - the would to regarding I question your to a is like understand better costs that regarding plan or on

Sean Macdonald

doing. combination think, that I we'll Olivier, of there's your things a question, be answer to

Of costs increasing course, industry. input been have the across

are. Because respect very the off-road the pricing we the what have of we bicycle going prices to motorcycle realistic see the happen situation to and watching to carefully retail things. on of So, to retail are what's side course,

knock be costs, And cost in I So, have to direction. quarters in there avoid next out. be any everything balance to and the pass our so end order on far. increases because margins to expect that ultimately some moves some on of on there the distributors, we major significant in be will will if to and to managed effect ourselves absorbing a dealers market consumers don't over the we several

Unidentified Analyst

Excellent.

be during motor and Can of the mountain saw that ahead on armor management's body shoes expectations? boots incredible would question the you increase sales the were that say bike Third quarter.

Sean Macdonald

on many of say on armor body exceeded our expectations. in a grow, got expectations. for that I course, of continued motorcycle our continue go they been lineup that, absolutely many, sell Upper Yes. some they've boots products, and to of body our and so. Sales cells to that have and also years extremely lineup I shoes well. the protection But well. having say exceeded full said on We've would can

Unidentified Analyst

this quarter. were also regarding That's excellent, question helmets, you. thank the which And is last up the

the your initial of not mentioned helmets remarks shipments QX? get does regions some You mean that that motor helmets, that during in did those redesign its

Sean Macdonald

pass the There to it onto received be all distributor - helmets may They QX. has [ph] from the during dealer. the

there be of received distributors But stock fully areas some the dealership had all and not dealers in majority of vast level. at QX. their our may our that stock are So, the received

shipments really get helmets restocking we new of some soon strong these had good motor and to really we helmets. orders So, on hope

Unidentified Analyst

and had QX you I wanted that and questions the team great whole all us. to the were please an Those wish I as done excellent for you much. very work you that well the Thank Excellent. and have continue

Sean Macdonald

Thanks, Olivier. that. Appreciate

Unidentified Analyst

say that am I happy. personally very, very I could

Sean Macdonald

Olivier, Fantastic, you. thank

Operator

from comes question Corporation. the with your next Please, line Jares of Our [ph] with Chris proceed question. React

Unidentified Analyst

Hey, Sean.

yet. As employee don't proud as think I'm guys, But you an of that's officially fine. am I I

Sean Macdonald

to news That's me.

Unidentified Analyst

Yes. and cash balance anything are that's you on years, investment I echo to in that, to things think What has that? What beyond? before. given the guys? just kind looking back sit your company on ability is how - The next you greater sentiments of thinking level than you the things And the months you are in the that a afford quarter. do? balance you want now that were, ever Olivier's that had strong on of do XX, What new XX that

Sean Macdonald

a Yeah, question. Chris, good it's

these Of development categories in are lot product we still what categories the of terms in product into infancy a have. that that back and into product course, can in do refining will be of we plowing of the we market. Many their back

currently saw that a us categories growing kind So, help opportunity maintain gives refining categories are really of also fuel it to some and the marketing extensive the saw, we activities sales product to product we that momentum and engine will I the just it's of seeing. do we us that think an to combination the that add

Unidentified Analyst

Okay.

from the from that in continuing the doing the what fire? other from I are What to in have regards So, momentum you you one that strong assume are about of brands you what vein with to they environment? seeing brands are telling and marketplace on that distributors are what taking what to you're competitive pouring hearing share? fuel hearing you're of

Sean Macdonald

really, the doing and are really industry The of to outdoors course Yes. itself away people is pushing get because horrible the get from pandemic well, statistics. to and

of dealers. revenue Leatt for took much which is highly good has source So, as continue industry the maintain a a we network, really been environment. as I distribution and our important of for certainly movement active And has consolidation that as well. benefited the really we door products, Leatt foot possible decision certain very, on to to us. getting selling and doing beginning got do lockdown, business that at expect benefited from in as very much a We've has sure in plan our some And as the It that distributors and there the to feedback our become certainly forward. think the to that competitive we're lockdowns we whole, customers, making from areas, some a now. that that more moving continue in developing a is is we conscious The during our competitive. network being and our distribution continue servicing

Unidentified Analyst

Thank you. great. Okay,

Sean Macdonald

Thanks, Chris.

Operator

of the question. [ph], a Christopher Our next comes Please, with question Moore private from investor. your line proceed

Unidentified Analyst

congratulations the start year. Yes. great of the on Sean, Hi,

Sean Macdonald

Thanks, Chris. you. Glad hear to from

Unidentified Analyst

questions Just for two you today.

Obviously, broad Europe terms strength the and across areas have COVID on international much or First, stronger than Asia others? what you're varied region. to and could region time comment Is in performing recovery impacts of of some are it sales. line you Maybe there? seeing widely the

Sean Macdonald

and that So patterns surging areas Things many industry-wide where really, auto this the weakness And we're a some and the things of see don't are in trends major are generally, emerging demand. are looking new there's established, global. activities some for seeing in seen of trend our We continuing lineup, that around well auto areas many the industry or the at is toward current sustaining. and world. ordering the we've growth

Unidentified Analyst

consumer your But discussions product And of in perhaps longevity. product about And routinely up and already in for increasing maybe there the for terms interest and thanks Alright, you come given could color think in are reputation secondly, there. there, to seems on you're you of design product sustainability. both sustainability and in how the comment that dealers an and ahead be durability distributors? matters sourcing general, these with curve

Sean Macdonald

business of about that things. basis. products quite big is innovative make comes Absolutely. our sustainable packaging as now of you'll over extremely with to we continuously course, think up months. consumers. something the we the the manufacturers deal in a the footprint and obviously on Leatt material that distributors in are we important Asia. a plastic it's of swing dealers, those is sure a a which we particularly see to business as with next us we It a areas is with reviewing And with to the very, are, way I and It's the serious lot and cutting end being our in XX also, six use with which business, all are our It's edge very side that Leatt that built to sustainable something that And on important

Particularly a us. we area strategy that working in to important focus the to see we end moving it's very that is forward. one pillars that us. consumers is to the So of It's are in which important on and our certainly, actually grow industry, for something bicycle

Unidentified Analyst

great Well, That's today. in luck have I second again, to all for quarter. and Sean Thanks to that's hear. you you the good

Sean Macdonald

Nice Chris. chatting. Thanks,

Operator

line Our a with next proceed Hershman question comes [ph], of private Please, investor. your the question. Jason from

Unidentified Analyst

you are how doing? Sean, Hey,

Sean Macdonald

doing? hear Good good, I'm you to are Jason, from how thank you. you.

Unidentified Analyst

say to been what done. there's happy more say it and Leatt is and just I'm but than what fantastic congratulations, tremendous much have for I'm sure I And with just XXXX, really to things called have I journey. basically just don't you amazing just quarter to there entirely it's come. tremendous a and truly for you've a wonderful really having you the And everybody achieve team Chris so and to done.

in just I So, say early Las just really called to up basically, that Vegas, actually. woke

Sean Macdonald

Jason, that's the and for so Thank you in. much fantastic. calling call for

Unidentified Analyst

line got on anyway. you you If since I question, me don't asking the Right? one mind

Sean Macdonald

Go ahead.

Unidentified Analyst

so grow balance As improve in I a things continue you about in of money you in more ends talked a then? the little past the cash that and this was - moved discuss ends wondering can to forward. it I do inventory that percentage-wise know to I do turnover up sheet - we've you your know what maybe and you've on inventory? maybe you if bit, less bit up can little think

Sean Macdonald

one think are you selling we are all I of course, now are of products them commodity the - a more is call could the things we that lot that looking big at now based. of

So, they move bit a quicker. little

traditionally three that year. braces, one of you it's products like like things year. other can sold we like apparel, times more times a four to to have two and a sell them neck kind Whereas So gloves

So, more turnover just moving now are financial of, rates, selling we of the products towards inventory that see increasing. should we

is, other all thing to we get of turnover dealers rate. distributors things higher want we to more a the ecommerce of also the do. those between and decrease course to selling amount And ordering Of try delivery and time to that going are lead think inventory online the I and to contribute and

Unidentified Analyst

always is Wow. so for I'm well have and guys great. bright. Always done. happy a of Really, the and amazing, rest know great you I future so your year you'll

Sean Macdonald

you, pleasure. Thank Always hear you. Fantastic to from a Jason.

Operator

remarks. hand the no I'd in to like further management back are queue. to the questions for There call closing

Sean Macdonald

quarter again all, today. for look joining you, Thank XXXX. to forward to recap speaking us We the second with of you

Operator

gentlemen, participation. does teleconference. conclude Thank and your this for today's Ladies you

Leatt (LEAT) 12 May 212021 Q1 Earnings call transcript