Leatt Corp

and welcome to the LEAD Corporation third quarter 2025 results conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask questions by pressing the star and one on your telephone keypad. You may remove yourself from the questioning queue by pressing star two. Please note this call has been recorded and I will be sending by should you need any assistance. It is now my pleasure to turn the conference over to Michael Mason. Please go ahead.

Thanks, Nikki. Good morning and welcome to the LIAT Corporation Investor Conference Call to discuss the financial results for the third quarter 2025. The company issued a press release today, Thursday, November 6, 2025, at 8 a.m. Eastern, and filed its report with the SEC. The press release was posted on LIAT's website at liat-corp.com. This call is being broadcast live and may be accessed on the company's website. An audio replay of this call will be available for seven days and may be accessed from North America by calling 844-512-2921 or 412-317-6671 for international callers. The replay PIN number is 11160350. A replay of the webcast will be available immediately following this call and will continue for seven days. Certain statements in this conference call may constitute forward-looking statements. Actual results could differ materially from those discussed in this call. LEAC Corporation does not undertake any obligation to update such statements made in this call. Please refer to the complete cautionary statement regarding forward-looking statements in today's press release, dated November 6, 2025. The company will make a presentation on the quarterly results and then open the call to questions. I would now like to turn the call over to Mr. Sean McDonald, CEO of LEAC Corporation. Good afternoon to you in Cape Town, John.

Good morning and thank you, Mike, and thank you all for joining us today. The third quarter of 2025 was a solid quarter on a global basis. We achieved double-digit revenue growth for the fourth consecutive quarter and double-digit profitability. It was the first consecutive quarter of year-over-year growth following the post-COVID industry-wide revenue contraction and inventory overhang. Revenues for the quarter were $14.34 million, an 18% increase over last year's third quarter. Net income was $539,000, a 366% increase. International distributor sales increased by 17%, as demand for our products and market conditions continued to improve. All of our product categories and our core head-to-toe markets, Moto, MTB, and ADV, grew by double digits on a year-to-date basis compared to last year, which is especially encouraging. Our recent expansion into the ADV market with a range of products designed for off-road adventure riding has been exceptional, and we believe ADV is a growing and exciting market that represents an important growth opportunity for us. Gross profit as a percentage of sales continue to improve from 43% to 44% when compared to last year's third quarter, as domestic trading conditions continue to improve despite some tariff uncertainty. Our U.S. motor and MTV sales teams are gaining momentum at the dealer level, and our supply chain team is managing shipping costs and logistics costs efficiently. We continue to build and refine a multi-channel selling organization and consumer-facing brand and have added some promising new team members, like our new head of brand marketing and creative, Nick Larson, who has a proven track record of building and driving iconic global brands. Continuing to build out a great team is a cornerstone of our future growth plan, and we are excited to have Nick as a key member of our team. For the first nine months of 2025, our revenues increased by $13 million or 40% to $45.89 million. Net income for the nine months increased by $4.56 million or 259% to $2.8 million. Cash flows generated from operations was $1.45 million as our liquidity continues to improve. All of our product category revenues have grown by double digits on a year-to-date basis. Body armor has grown by 50%, helmets by 60%, other products, parts, and accessories, including apparel, goggles, and components by 49%, and neck braces by 18%. We are confident that consumer direct sales will continue to be a highlight in terms of growth as brand momentum continues and consumer demand remains strong. For the third quarter of 2025, consumer direct sales increased by 61%, and over the first nine months of 2025, sales increased by 37%. Our digital team continues to focus on building innovative digital platforms and consumer engagement strategies. Now I will turn to more details on sales of our product categories for the third quarter of 2025 compared to 2024. Sales of our flagship neck brace, were $860,000, a 14% increase, primarily attributable to a 39% increase in the volume of neck braces sold when compared to the third quarter of 2024. Neck braces represented 6% of our total revenues for the quarter. Our body armor products are comprised of chest protectors, full upper body protectors, back protectors, knee braces, knee and elbow guards, off-road motorcycle boots, and mountain biking shoes. Body armor revenues were $6.1 million, a 6% increase, primarily attributable to a 46% increase in revenues from the sales of footwear, including motorcycle boots and mountain biking shoes. Body armor sales represented 43% of our revenues for the quarter. Helmet sales were $3.33 million, an 11% increase, primarily attributable to strong ADV helmet sales. Our ADV helmets are designed for off-road adventure riding. Helmet sales represented 23% of our revenues for the third quarter. Our other products, parts, and accessories category is comprised of goggles, hydration bags, and apparel items, including jerseys, pants, shorts, and jackets. Revenues were $4 million, a 53% increase, primarily attributable to a 49% increase in sales of MTB, ADB, and motor apparel when compared to the third quarter of 2024. Other products, parts, and accessories accounted for 28% of our revenues for the quarter. Now I will turn to our financial results in a bit more detail. Total revenues for the third quarter of 2025 were $14.34 million, up by 18% compared to $12.14 million for the third quarter of 2024. This increase in worldwide revenues is primarily attributable to a $360,000 increase in body armor sales, a $320,000 increase in helmet sales, a $1.41 million increase in other products, parts, and accessories sales, and a $110,000 increase in necro sales. Income from operations for the third quarter was $650,000, up by 2,333%, compared to $20,000 for the third quarter of 2024. Net income for the third quarter was $539,000, or $0.09 per basic and $0.08 per diluted chair, up by 366% as compared to net income of $116,000, or $0.02 per basic and $0.02 per diluted chair for the third quarter of 2024. Lear continued to meet its working capital needs from cash on hand and internally generated cash flows from operations. And at September 30th, 2025, the company had cash, cash equivalents and restricted cash of $12.39 million and a current ratio of 5 to 1. Looking forward, we remain very enthusiastic about our future. Although there are still some challenging geopolitical conditions globally, and economic risks in the US that may potentially impact inflation and demand. Inventory continues to be digested. Our domestic sales are gaining strong traction. Participation remains strong and international ordering patterns continue to improve and deliver strong revenue growth. The consistent growth in all of our product categories is being driven by strong demand for Lear products around the world. We expect this trend to continue. In conclusion, while we monitor the international trade situation, we are continuing to invest in Liat as a global consumer-facing brand and to build out a strong and diversified global multi-channel sales organization. All of us at Liat are energized by the growth of our product categories and our pipeline of cutting-edge products and categories for a much wider rider community. With a strong portfolio of innovative products in the market and in the pipeline, a return to profitability, and a robust balance sheet to fuel brand and revenue growth, we remain confident that we are very well positioned for future growth and profitability. As always, we'd like to thank our entire Lear family, our dedicated employees, business partners, and team riders for their continued strong support. With that, I'd like to turn the call over for any questions. Operator?