Everyone, and welcome to the Leatt Corporation Q3 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 is being recorded, and I will be standing 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 Leatt Corporation Investor Conference call to discuss the financial results for the Q3 2025. The company issued a press release today, Thursday, November 6, 2025, at 8:00 A.M. Eastern, and filed its report with the SEC. The press release is posted on Leatt's website at leatt-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. Leatt 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 MacDonald, CEO of Leatt Corporation. Good afternoon to you in Cape Town, Sean. Good morning, and thank you, Mike. Thank you all for joining us today. The Q3 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 fifth 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 Q3. 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 continued to improve from 43% to 44% when compared to last year's Q3, as domestic trading conditions continued to improve despite some tariff uncertainty. Our US Moto and MTB 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 Larsen, 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 were $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 product 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 Q3 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 Q3 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 Q3 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 Q3. Our other product 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, ADV, and Moto apparel when compared to the Q3 of 2024. Other product 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 Q3 of 2025 were $14.34 million, up by 18% compared to $12.14 million for the Q3 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 product parts and accessories sales, and a $110,000 increase in neck brace sales. Income from operations for the Q3 was $650,000, up by 2,353% compared to $20,000 for the Q3 of 2024. Net income for the Q3 was $539,000, or 9 cents per basic and 8 cents per diluted share, up by 366% as compared to net income of $116,000, or 2 cents per basic and 2 cents per diluted share for the Q3 of 2024. Leatt continued to meet its working capital needs from cash on hand and internally generated cash flows from operations, and at September 30, 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 U.S. 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 Leatt 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 Leatt as a global consumer-facing brand and to build out a strong and diversified global multi-channel sales organization. All of us at Leatt are energized by the growth of our product categories and our pipeline of cutting-edge products and categories for a much wider 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, I'd like to thank our entire Leatt 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. Thank you. At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw your question from the queue by pressing star two. Once again, to ask a question, please press the star and one on your telephone keypad. We will take our first question from Nick Fisher with Pilot Capital. Please go ahead. Your line is open. Hi, Sean. Thanks so much for taking my question. Sure. First of all, just wanted to get some color on the plan for stock buybacks, what your framework is, et cetera. I see that you were able to purchase some shares here in the quarter. Yes, correct. We did manage to purchase some shares in the quarter, and I believe that will be open until the end of December. We're gonna continue, obviously, through our plan with the broker to try and buy back some shares within a range. Gotcha. Okay. Thank you. Appreciate that. Obviously, marketing and sales has been a focus here. I was a little bit surprised to see advertising and marketing decrease in the quarter. Could you just talk a little bit about, you know, future plans and investments from that perspective, if you're able to? No, absolutely. I mean, marketing, sure, was down. A lot of that is primarily just for timing reasons and some cost efficiencies that we've had on the marketing side with video production and photographic production. Having brought Nick Larsen on board, he's a very focused and experienced marketing professional. I'm expecting to get really great return on investment on all of our marketing activities moving forward. Things are gonna be a lot more focused, a lot more driven in terms of creating more consumer demand, creating more brand awareness, to a much wider rider audience. You can expect a strong drive to add fuel to the marketing fire and to the brand fire, to generate demand for Leatt products moving forward. I see. Gotcha. And then my last question is, you know, with regards to impact of inflation and tariffs and things like that. Are you able to comment on, you know, plans for price increases and the like? Sure. We have increased pricing marginally across the board, 8%-10%, which is very much in line with industry norms at the moment. We have been following the competitive landscape very, very carefully. We have managed to increase pricing without having too much of an impact on sales and inventory holdings at the dealer level. I think it is obviously expected, you know, that pricing will go up. I think from a general inflationary perspective, I think quite a lot of inflation still is to filter through into the market. You know, just generally, I think a lot of consumers have been shielded by, basically by companies up until now. We are expecting to see inflation potentially increasing in the short to medium term. We don't expect it to have a huge impact on our margins or on our profitability or on our demand. I think if the tariffs remain relatively stable moving forward, I think we'll be in a strong position to have strong margins, and also to retain strong demand. I think, hopefully, the impact of tariffs so far has been, you know, we're over the worst of it. Moving forward, things will continue to improve. Very good. Thank you, Sean. Appreciate the color there. That's all I have for now. Thanks. Thanks, Nick. Chat soon. Thank you. Once again, that is star and one on your telephone keypad if you would like to join the queue. We will move next with Christopher Müller, private investor. Please go ahead. Your line is open. Hi, Sean. Good to speak with you. Just a few questions, if I may. Hi, Chris. Yep. Good to hear from you. Sure. Yeah, first, with regards to the international distributor revenues. Yeah. I believe you historically had some seasonality there, with a stronger back half of the year, Q3 and Q4 benefiting from the initial stocking of next year's line. Looking at the modest sequential decline today in Q3, I'm trying to understand whether those orders were pushed more into Q4 this year, or if those distributor order cycles have changed, or whether that past seasonality is even applicable to the business today. Yeah. I mean, I think you can expect a strong Q4 international distributor deliveries. A little bit of a timing impact there. I think some of the seasonality has moved slightly into Q4. I certainly am expecting, as I said, strong distributor revenues in Q4, and that should all, of course, even out over the year. When you look at the whole year, international distribution is gonna be a strong part of the business, as our distributors continue to restock, with demand increasing. Okay. Very good. And then second, regarding the MTB components line, how is that performing, relative to your expectations, at last year's launch? Yeah. We, I mean, we're continuing to push there. I think exceeded our expectations in terms of the initial push, and we're busy right now, you know, refining a lot of those products and a lot of the supply chain around those products, which I think is gonna help us to be able to meet the demand that is out there. I think performing well, expecting further growth in the future as we continue to improve efficiencies around that product line. Okay. Very good. Regarding the share repurchase, could you maybe speak to the board's decision-making that led to the $750,000 size? Was this dictated by market factors like the limited trading volume and float? Or was this just purely the board's assessment of excess cash after your operational needs? Yeah. I think, you know, obviously, we had some, we do have cash on our balance sheet, and I think there's no better investment than Leatt. You know, we do believe that there's still a lot of value potential in the stock price. We just felt that this would be a great investment, actually, for the company at the moment, considering some of the plans that we have in the pipeline moving forward. The decision was taken to, you know, to give some of that cash for those shareholders out there that would like some kind of an exit with the limited liquidity. It really just made sense, you know, in terms of the optics right now, for us to reinvest back into Leatt and into the shareholders. That's really why we took the decision. you know, we felt that it was a good valuation opportunity right now. Okay. Understood. And then, finally, for me, it seems like there's quite a wide range of outlooks and forecasts being issued by bicycle brands this year, and really across the outdoor recreation space. You've been in a strong financial position to reinvest in recent years when others have been pulling back. You know, so I'm just wondering today, you know, when you're thinking about, you know, product expansion, marketing spend, pricing discipline, how does the competitive environment feel today, relative to recent years? Yeah. I mean, I think on the bicycle side, it's, I mean, I think it's still tough for many bicycle brands, but I do feel that there's a huge amount of opportunity. So we are continuing to invest in product development, in research and development for new exciting products, and absolutely in marketing. I think there's a huge amount of potential for Leatt to reach a much wider group. You know, we still have market share in many, many categories that are still in its infancy, and we are doing solid numbers. My reading is that participation is still strong across the board in terms of riding. I think that's really what we are focusing on. You know, we do believe that, I mean, riding is the future, and off-road riding, which is where our focus is, has been very strong for us, continues to be strong. MTB is recovering quite nicely. Moto is our most established category in market. And that is also, you know, that is also growing on a year-to-date basis. That is great to see. And of course, ADV has been fantastic. You know, we are quite diversified now, of course, you know, with these three different markets, different demographics that we are selling to. I think that is it. Diversification is a strength. And of course, with MTB coming back, I think that is going to really have a positive impact on our results moving forward, Chris. Great. That's all for me. Thanks, Sean. Chat soon. Thanks, Chris. I'll chat to you soon. Cheers. Thank you. We will move next with Aaron Gelband with Warren Street Capital. Please go ahead. Hey, Sean. How you doing? Hey. Good, and you, Aaron? Yeah. Doing well, thanks. Right. I had one question on the direct business. So, big, you know, last quarter was pretty good with 35% year-on-year growth, and then we accelerated to 60% year-on-year growth. You talked a little bit about digital marketing initiatives, but can you just give a little more color on what's going on to drive that, you know, big acceleration? Is it sustainable? Is it concentrated in any pro, in any specific products, or is it just the result of a digital marketing campaign? Any color on that would be very helpful. Sure. I mean, there's a couple of reasons. I mean, particularly in Q3, we actually launched a new web platform. We're using a new platform now, which has got a lot of capabilities in terms of consumer engagement, and creating brand awareness, you know, across the internet. That's been pretty strong for us. I think a lot of this is about focus, Aaron. We have a new digital department that we set up at the beginning of the year, and they are driven by consumer direct business. That means, you know, this is targeted marketing. It's very specialized. There's a blend between, you know, of course, reaching end consumers with targeted online campaigns and email campaigns. Also, of course, the website is also the home of the brand, so there's fantastic content on there now. I think it's really about focus. The new digital team is doing really, really well, exceeding our expectations in terms of growth. I think moving forward, direct to consumer business is gonna be a more important area of our business, just in terms of growth and also just in terms of contribution to overall revenues. I think, you know, I'm talking primarily in the U.S. and in South Africa where, you know, we have direct online channels. I think it's, as I said, of course, there's the selling opportunity, but there's also the marketing opportunity. I think it creates a lot of brand equity, you know, when you can actually target consumers. It's been exciting to see how the demand has continued to surge online. It's really exciting to be able to see the return on investment when you do marketing campaigns that are targeted and to see that filtering through, you know, to your revenue. We got some specialist skills on board, and we've pulled that all together now into a strong digital team that's very focused on the direct-to-consumer business. Of course, it's not only about the website. It's also about having customer service in the back end that can, you know, satisfy the needs of consumers when you are used to being a distribution business. Traditionally, we've been in distribution and selling, of course, to dealers who might have been online or brick-and-mortar. You know, in order to move over to the consumer space, especially with consumers these days that have got very high expectations in terms of service levels, you know, we've had to invest in customer service, and we have a full customer service department now in the US and also in South Africa to take care of consumers' direct needs. It is a growing area. It is a focus area for us. We've been putting a lot of energy into it, and it's great to see the increase in demand. We do expect this to be an important area for us going forward where we are expecting double-digit growth. I also assume that the gross margins are higher on that. If this becomes a much more meaningful piece of the business, would you expect that to have a positive impact on the company gross margins? Absolutely. When you're selling direct, your margins are better. There are costs involved, obviously, in terms of the marketing. And there's a blend in terms of the margins 'cause you're selling full-price items, but, you know, when you have Black Friday and those kind of events, of course, it's also an opportunity to, you know, to turn some of your inventory into cash if it's maybe a little bit slow-moving. We don't have a lot of that, but if it is a bit slow-moving, it's an opportunity because you have margin available. So for sure, it should have a positive impact on margins moving forward. Got it. And then, one more question on, so, you know, overall performance of the company, 18% growth, I think we’d be happy with that, if that continues, for sure. There was a big kind of deceleration, especially in international, which had grown 79%, 74%, and then it dropped off to 17%. I think, and you’ve been, you know, very positive on your comments for international ordering patterns both last quarter and this quarter. Maybe just to parse your language a little bit, I mean, when you talk about good international ordering patterns, are you just talking in an absolute sense? I mean, a big deceleration from 74% to 17%. Would it, you know, it seems inconsistent with kind of saying that the ordering pattern’s continuing to improve. Maybe just give some color on that. And maybe that just, you know, ties into Chris's question about kind of the timing of shipments. Yeah. Sure. I mean, I think when I talk about ordering patterns, you know, continuing to improve, I'm talking about, like, on an annual basis. I'm not talking about a three-month period, a particular quarter. When I look at the ordering patterns, you know, in general, there's a real strong improvement. If you look at it on a year-to-date basis, I mean, we've had fantastic growth in terms of ordering patterns, and I do expect that to continue. A little bit of it is timing, as I said. I don't think that our current ordering patterns at 17% is really a reflection of where we're at on the international side. I think it'll be good to also discuss this maybe when we get to the end of Q4, and then we can look back on the year, and we can make a real solid assessment because that'll take into account all of the seasonality and all of the shipping timing differences. We'll be able to see, you know, how the international distribution business has grown, on a year-to-date basis at 31 December. Got it. That's helpful. Just to be clear in your response, you said the ordering pattern was up 17%, but you meant that the shipping. Oh, the shipping. Sorry. Yeah. The shipping. I meant the ship, correct. I meant the sh, yes. Correct. I meant the shipping. Correct. So the shipping, which is obviously driven by, you know, the orders that we got, actually probably a few quarters ago. Absolutely, it's the shipping. Understood. Very helpful. All right. Thank you. Congrats on the next quarter, and talk to you soon. Thanks a lot. Appreciate it. Thank you. This concludes our Q&A session. I will now turn the call over to Sean MacDonald for closing remarks. Thank you all for joining us today. We look forward to our next call to review the results of the 2025 fourth quarter. Thank you. This does conclude today's program. Thank you for your participation. You may disconnect at any time.