The following is a summary of the Leatt Corporation (LEAT) Q1 2024 Earnings Call Transcript:
Financial Performance:
Leatt Corporation reported a decline in Q1 2024 revenues of 19% to $10.61 million due to regulatory adjustments in dealer orders.
There was a growth of 15% and 9% in consumer and dealer direct sales respectively.
Gross margins experienced a slump due to short-term promotional activities, particularly in the US.
An increase in cash by $2.18 million to $13.53 million was seen, largely due to operational cash flows.
Q1 2024 saw a net loss of $817,000 or $0.13 per basic and diluted share, down by 180% against Q1 2023.
The company also incurred a loss from operations amounting to $791,000, a 157% decrease from Q1 2023.
Business Progress:
Despite industry challenges, Leatt noticed growth prospects due to active participation and a favourable inventory scenario.
The launch of the Adventure product line saw promising initial shipments.
There was a 21% rise in the sales for body armour products against Q1 2023.
Growth has been continued in their domestic direct-to-consumer platform with initial orders from their South African store surpassing expectations.
A decrease in inventory levels by $3.3 million or 16% reflects sound inventory management.
New distributor partnerships were established in the UK, Europe, and emerging markets promising potential future revenue.
The company has been successful in creating a robust salesforce in the US, focusing on improving the company's dealer level presence and dealer base expansion.
Hiring of product developers and a brand manager for Eastern Europe signifies focused efforts on product development and market expansion.
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