Q3 2025 Leatt Corp Earnings Call

At this time, all participants are in a listen-only mode.

Operator: 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. 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.

Later, you will have the opportunity to ask questions during the question and answer session.

Operator: 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.

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Please note, this call is being 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.

Michael Mason: Thanks, Nikki. Good morning, welcome to the Leatt Corporation Investor Conference Call to discuss the financial results for Q3 2025. The company issued a press release today, Thursday, 6 November 2025, at 8:00 AM Eastern, and filed its report with the SEC. The press release is posted on Leatt's website at www.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 7 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 7 days.

Michael Mason: Thanks, Nikki. Good morning and welcome to the Leatt Corporation investor conference call to discuss the financial results for the third quarter 2025. The company issued a press release today, Thursday, 6 November 2025, at 8:00AM 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.

Good morning and welcome to the leak Corporation investor conference call to discuss the financial results for the third quarter 2025.

The company issued, a press release today. Thursday, November 6th 2025 at 8:00 am Eastern and filed its Report with the SEC.

The press release is posted on Leah's website. At Leah 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 7 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 1 111 635 0. A replay of the webcast will be available immediately.

Following with this call and we'll continue for 7 days.

Michael Mason: 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 6 November 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.

Michael Mason: 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 6 November 2025. The company will make a presentation on the quarterly results, 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.

Certain statements in this conference call May constitute forward-looking statements actual results could differ materially from those discussed in this, call leas 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 6th 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. Char McDonald CEO of the corporation. Good afternoon to you and Cape Town John.

Good morning and thank you Mike and thank you all for joining us today.

Sean Macdonald: Good morning, thank you, Michael Mason, and 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 continue 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.

Sean MacDonald: 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 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 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.

The third quarter of 2025 was a solid quarter on a global basis. We achieve double digit Revenue growth for the fourth consecutive quarter and double digit profitability.

It was the first consecutive quarter of year of the Year growth, following the postco industrywide, revenue contraction, and inventory, overhang revenues for the quarter were 14.34 million and 18% increase over last year's third quarter. Net income was 539,000 at 366% increase.

International distributor sells increased by 17% as demand for our products and market conditions, continue 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.

Sean Macdonald: Our recent expansion into the ADV market with a range of products designed for off-road adventure riding has been exceptional. 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 Q3 as domestic trading conditions continue to improve despite some tariff uncertainty. Our US moto and MTB sales teams are gaining momentum at the dealer level. 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 brands 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.

Sean MacDonald: 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 third quarter, 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 bowling and driving iconic global brands.

Our recent extension into the ADV Market with a range of products designed for off-road adventure, riding has been exceptional, and we believe 80 years of 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 tariffs on certainty.

Our us Moto and MPV 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 Brands and have added some promising, new team members, like our new head of brand marketing and Creator. Nick Lawson, who has a proven track record of Bowling and driving our pick Global brands.

Sean Macdonald: Continuing to build out a great team is a cornerstone of our future growth plans, and we are excited to have Nick as a team member of our team. For the first 9 months of 2025, our revenues increased by $13 million or 40% to $45.89 million. Net income for the 9 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 30%, helmets by 60%. Other products, parts, and accessories, including apparel, goggles, and components, by 49% and Neck braces by 18%.

Sean MacDonald: Continuing to build out a great team is a cornerstone of our future growth plans, 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.

Continuing to build out a great team of the Cornerstone of our future growth plans and we are excited to have make a team member of our team.

For the first 9 months of 2025 our revenues increased by 13 million or 40% to 45.89 million.

Net income, for the 9 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.

By 49% and neck braces by 18%.

Sean Macdonald: 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 Q3 2025, consumer direct sales increased by 61%, and over the first 9 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 Q3 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 Q3 2024. Neck braces represented 6% of our total revenues for the quarter.

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.

Sean MacDonald: 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.

For the third quarter of 2025 consumer direct sales increased by 61%, and over the first 9 months of 2025 sales increased by 37% our digital team continues to focus on bowling Innovative digital platforms and consumer engagement strategies.

Now, I will turn to more details on sales of our product categories.

sales of our flag Flagship neck. Brace were 860,000 at 14% increase primarily attributable to a 39% increase in the volume of neck rates are sold when compared to the third quarter of 2024

Neck braces, represented 6% of our total revenues for the quarter.

Sean Macdonald: 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 Q3. Our other products, parts, and accessories category is comprised of goggles, hydration bags, and apparel items, including jerseys, pants, shorts, and jackets.

Our body armor products are comprised of chest protectors full upper body. Protectors back protectors knee. Braces neon elbow guards, off-road motorcycle, boots and mountain biking shoes.

Sean MacDonald: 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 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 third quarter of 2024. Other product parts and accessories accounted for 28% of our revenues for the quarter.

Buddy on the revenues were 6.1 million. The 6% increase primarily attributable to a 46% increase in revenues from the sales of Footwear including motorcycle boots and mountain biking shoes.

Body armor cells represented, 43% of our revenues for the quarter.

Over sales, were 3.33 million and 11% increase, primarily attributable to strong, ADV helmet sells, our 80v helmets are designed for off-road adventure, riding helmet cells 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.

Sean Macdonald: Revenues were $4 million, a 53% increase, primarily attributable to a 49% increase in sales of MTB, ADV, and moto apparel when compared to Q3 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 Q3 2025 were $14.34 million, up by 18% compared to $12.14 million for Q3 2024.

Revenues were 4 million dollars, a 53% increase, primarily attributable to a 49% increase in sales of MTV ADB and Moto apparel. When compared to the third quarter of 2024 other products, parts, and accessories, accounted for 28% of our revenues for the quarter,

Sean MacDonald: 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 product parts and accessory sales, and a $110,000 increase in neck brace sales. Income from operations for the third quarter was $630,000, up by 2,353% 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 share, up by 366% as compared to net income of $116,000, or $0.02 per basic and $0.02 per diluted share for the third quarter of 2024.

Now I will turn to our financial results in a bit more detail. Total revenues for the third quarter of 2025 with 14.34 million up by 18% compared to 1 2. 1 4 4.

Sean Macdonald: 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 accessory sales, and a $110,000 increase in net pro sales. Income from operations for Q3 was $650,000, up by 2,353% compared to $20,000 for Q3 of 2024.

This increase in worldwide revenues is primarily attributable to a 360,000 increase. In body armor, sells a 320,000 increase in helmet sells a 1.41 million increase in other products, parts and accessory cells and 110,000 increase in neckro sells income from operations. For the third quarter was 650,000 up by 233% compared to 20,000 dollars for the third quarter of 2024.

Sean Macdonald: Net income for Q3 was $559,000 or $0.09 per basic and $0.08 per diluted share, up by 366% as compared to net income of $116,000 or $0.02 per basic and $0.02 per diluted share for Q3 of 2024. Leatt continued to meet its working capital needs from cash on hand and internally generated cash flows from operations. At 30 September 2025, the company had 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.

Net income for the third quarter was 559,000 or 9 cents per day. Second 8 cents per due to chair up by 366% as compared to net income of $116,000 or 2 cents per basic. And 2 cents per diluted share for the third quarter of 2024

Sean MacDonald: Leatt continued to meet its working capital needs from cash on hand and internally generated cash flows from operations, and at 30 September 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 Leatt products around the world. We expect this trend to continue.

Let's continue to meet his 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.

Sean Macdonald: 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 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 rider community.

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.

The passion 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 lead products around the world.

Sean MacDonald: 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, 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, wider community. With a strong portfolio of innovative products in the market and in the pipeline, a return to profitability, and a robust energy 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.

We expect this trend to continue in conclusion while we monitor the international trade situation. We are continuing to invest in lead with a global consumer facing brand and to build out a strong and diversified Global multi-channel sales organization.

All of us, at least are energized by the growth of our product categories, and our pipeline of cutting edge products, and categories for a much wider, right? Of community.

Sean Macdonald: With a strong portfolio of innovative products in the market and in the pipeline, a return to profitability, and a robust energy 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 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?

Change the profitability and a robust energy 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 their 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.

Operator: Thank you. At this time, if you would like to ask a question, please press star and 1 on your telephone keypad. You may withdraw your question from the queue by pressing star 2. Once again, to ask a question, please press star and 1 on your telephone keypad. We'll take our first question from Nick Fisher with Pilot Capital. Please go ahead. Your line is open.

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'll take our first question from Nick Fisher with Pilot Capital. Please go ahead. Your line is open.

Thank you. And at this time, if you would like to ask a question, please press the star and 1 on your telephone keypad.

You may withdraw your question from the queue, by pressing star 2.

Once again to ask a question, please press the star and 1 on your telephone keypad.

I will take our first question from next feature. With pilot Capital, please go ahead. Your line is open

Hi Sean. Thanks so much for taking my question.

so, um, first

Nick Fisher: Hi, Sean. Thanks so much for taking my question.

[Analyst]: Hi, Sean. Thanks so much for taking my question.

Sean Macdonald: Sure.

Michael Mason: Sure.

Nick Fisher: 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.

[Analyst]: First of all, just wanted to get some color on the plan for stock buybacks, what your framework is, etc. I see that you were able to purchase some shares here in the quarter.

First of all just uh wanted to get some color on the the the plan for stock BuyBacks. Uh what your framework is ETC. Um, I see that you um, were able to purchase some shares here in the quarter.

Sean Macdonald: Yes, correct. We did manage to purchase some shares in the quarter. I believe that'll 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.

Sean MacDonald: Yes, correct. We did manage to purchase some shares in the quarter. I believe that will be open until the end of December, and we're going to continue, obviously, through our plan with the broker to try and buy back some shares within a range.

That is correct. So we, we did manage to purchase some shares, um, in the quarter. Um, and I believe that will be open until, um, the end of uh, December. Um, and uh, we're going to continue, uh, obviously through our through our plan, uh, with a broker to try and buy back, um, some shares, uh, within a range.

Gotcha. Okay, thank you. Appreciate that. Um,

Nick Fisher: 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?

[Analyst]: 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 future plans and investments from that perspective, if you're able to?

uh, obviously marketing and sales, uh, has been a, a focus here. I, I was a little bit surprised to see advertising and marketing, decrease in the quarter. Uh, could you just talk a little bit about, um, you know, future plans and, and Investments, uh, from that perspective if you're able to

Sean Macdonald: 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.

Sean MacDonald: 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, and I'm expecting to get really great return on investment on all of our marketing activities moving forward. Things are going to 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.

No. Absolutely. So I mean, marketing, sure was down a lot of that is is primarily. Um, just for timing reasons. And some some cost efficiencies that we've had on the marketing side was video production and and photographic production. Um, having brought Nick Lawson on board. He's a very focused and experienced, uh, marketing, professional. Um, and I'm expecting to get really great return on investment on all of our marketing activities. Moving forward. Things are going to be a lot more focused a lot more driven in terms of creating uh, more consumer demand creating more brand awareness uh, to a much wider, uh, Rider audience. Uh, so you can expect a strong Drive uh to add uh fuel uh to the marketing fire and to the brand fire uh, to

Generates a demand for your products moving forward.

Nick Fisher: I see. Gotcha. 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?

[Analyst]: I see. Gotcha. My last question is, with regards to impact of inflation and tariffs and things like that, are you able to comment on plans for price increases and the like?

I see, gotcha. Um, and then my last question is, um, you know, with regards to impact of inflation and and tariffs and things like that. Uh, are you able to comment on, you know, plans for price increases and and, and the like

Sean MacDonald: Sure. We have increased pricing marginally across the board, 8% to 10%, which is very much in line with industry norms at the moment. We've been following the competitive landscape very, very carefully. We've managed to increase pricing without having too much of an impact on sales and inventory holdings at the dealer level. I think it's obviously expected that pricing will go up. I think from a general inflationary perspective, quite a lot of inflation has still been filtered through into the market. 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, on our profitability, or on our demand.

Sean Macdonald: Sure. We have increased pricing marginally across the board 8% to 10%, which is very much in line with industry norms at the moment. We've been following the competitive landscape very, very carefully. We've managed to increase pricing without having too much of an impact on sales and inventory holdings at the dealer level. I think it's obviously expected, you know, that pricing will go up. I think from a general inflationary perspective, I think quite a lot of inflation has still 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.

Sure. Um, so we, we had increased pricing, um, marginally across the board, 8 to 10%, which is very much in line, um, with um, with industry Norms at the moment. We've been following the, the competitive landscape very, very carefully. Um, so we've managed to, to, to increase pricing without having too much of an impact, um, on on sales, um, Andy Holdings, at the dealer level,

Sean Macdonald: 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.

Sean MacDonald: 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 we're over the worst of it, and moving forward, things will continue to improve.

Um, I think it's obviously expected, um, you know, that, uh, pricing with the app. Um, I think from a general inflationary perspective, I think quite a lot of inflation has still been has got your score to 4, to 3 into the market. Uh, you know, just generally, I think a lot of consumers that have been shielded by, um, basically by companies up until now. Uh, so the is expected to see inflation potentially increasing in the, in the short to medium term. We don't expect it to have a huge impact on our margins, or on, or on our profitability or on our uh demand. Um, I think if the tariffs remain relatively stable, moving forward, uh, I think we'll be in a in a strong.

Position to to have strong margins um and also to, um, retain um, strong demand. Uh, so I think, um, hopefully the uh, the impact of tariffs, uh so far has been um, you know, we're over the worst of it uh and moving forward things uh will continue to improve

Very good. Thank you, Sean. I appreciate the the color there and and that's that's all I have for now. Thanks.

Nick Fisher: Very good. Thank you, Sean. I appreciate the color there. That's all I have for now. Thanks.

[Analyst]: Very good. Thank you, Sean. Appreciate the color there, and that's all I have for now. Thanks.

Thanks. Thanks.

Thank you.

Sean Macdonald: Thanks, Nick. Chat soon.

Sean MacDonald: Thanks, Nick. Chat soon.

Operator: 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 Muller, private investor. Please go ahead. Your line is open.

Operator: 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 Muller, Private Investor. Please go ahead. Your line is open.

And once again, that is star and 1 on your telephone keypad, if you would like to join the queue,

We will move next with Christopher Muller private investor. Please go ahead. Your line is open.

Good to speak with you. Uh, just a few questions if I may

Christopher Muller: Hi, Sean. Good to speak with you. Just a few questions, if I may.

Christopher Muller: Hi, Sean. Good to speak with you. Just a few questions, if I may.

Hi Chris. Yep, good to hear from you sure?

Sean Macdonald: Hi, Chris. Yep, good to hear from you. Sure.

Sean MacDonald: Hi, Chris. Yep, good to hear from you. Sure.

Um, you first with regards to the um, International distributor revenues. Um,

Christopher Muller: First, with regards to the international distributor revenues, 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.

Christopher Muller: First, with regards to the international distributor revenues, 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.

I, I believe you historically had some seasonality there, um, with a stronger back half of the year, um, Q3 and Q4 benefiting from the, uh, the initial stocking of, um, next year's line, looking at the modest sequential decline. Um, today in Q3, I'm trying to understand whether those orders were pushed more into Q4 this year, um, or if those, uh, distributor order Cycles have changed, um, or, or whether that passed seasonality is even applicable to the business today,

Sean Macdonald: I think you can expect a strong Q4 international distributor deliveries. A little 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.

Sean MacDonald: 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 going to be a strong part of the business as our distributors continue to restock with demand increasing.

Yeah, I mean, I think, um, you can expect, um, a strong, uh, Q4 International, uh, distributor, uh, deliveries. Um, a little bit of a timing impact there. I think, um, some of the, the, um, seasonality is moved slightly into Q4. Um, I'm certainly, I'm expecting, as I said, uh, strong, uh, distributor, uh, revenues, uh, in Q4 and that should all, of course, um, even out over the year. So, when you look at the whole year, uh, International distribution is going to be a strong, a strong part of the business, um, as our Distributors, continue to restock, uh, with demand increasing.

Christopher Muller: Very good. Second, regarding the MTB components line, how is that performing relative to your expectations at last year's launch?

Christopher Muller: Okay. Very good. Then second, regarding the MTB components line, how well is that performing relative to your expectations at last year's launch?

Okay. Very, very good. Um, and then the second um regarding the um MTB components line um half of that performing um relative to your expectations um at last year's launch

Sean Macdonald: Yeah, I mean, we're continuing to push there. I think exceeded our expectations in terms of the initial push. 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.

Sean MacDonald: Yeah, 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 refining a lot of those products and a lot of the supply chain around those products, which I think is going to 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.

Yeah, we we continue to push their I think exceeded our expectations in terms of the initial push. Um, and we're busy right now. Um, you know, refining a lot of those products and a lot of the supply chain around those products which I think is going to help us to be able to meet the demand. Uh, that is out there. So I think performing well um expecting further growth uh in the future. As we continue to improve uh efficiencies around that product line.

Christopher Muller: 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?

Christopher Muller: 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?

Okay. Very, very good. Um, regarding the uh, the share repurchase. Um, could you maybe speak to the board's decision making that led to the, um, the the 750,000 size? Um, was it dictated by by market factors like the The Limited training volume and and and Float? Um, or was this just fairly the board's assessment of um, excess cash after your operational needs?

Sean Macdonald: Yeah, I think, you know, obviously, 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.

Sean MacDonald: Yeah. I think, obviously, we had some, we do have cash on our balance sheet, and I think there's no better investment than Leatt. 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 give some of that cash for those shareholders out there that would like some kind of an exit with the limited liquidity, and it really just made sense 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. We felt that it was a good valuation opportunity right now.

Yeah, I think, you know, obviously, we had some, we we do have cash on our balance sheet and, um, I think there's no better investment in yet, um, you know, we do, we do believe, um, that we, there's still a lot of, um, value potential, uh, in the stock price. Um, we just thought 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.

Sean Macdonald: That's really why we took the decision. You know, we felt that it was a good valuation opportunity right now.

Um so the decision was taken to, you know, to give some of that cash. Um, for those shareholders out there um they would like some kind of an exit with the limited liquidity and they really just made sense, uh, you know, in terms of the Optics right now, uh, for us to to reinvest back, um, into the and into the shareholders. Uh, so that's really why we took the decision. Um, you know, we felt that it was a good valuation opportunity right now.

Christopher Muller: Okay, understood. 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, 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?

Christopher Muller: Okay. Understood. 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. I'm just wondering today, when you're thinking about product expansion, marketing spend, pricing discipline, how does the competitive environment feel today relative to recent years?

Okay. I understand, um then then finally, for me, um it was quite a wide range of of outlooks and forecasts. Um, being being issued by bicycle Brands this year, uh, and and really across the uh outdoor recreation space.

You've been in a strong financial position to to reinvest in um, in recent years when others have been pulling back, you know? So I'm just wondering today, you know, when when you're thinking about, you know, product expansion, uh, marketing spend uh, pricing discipline, how does the competitive environment feel today? Um, relative to recent years

Sean Macdonald: Yeah, I mean, I think on the bicycle side, it's, I mean, I think it's still tough for many bicycle brands. I do feel that there's a huge amount of opportunity. 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 us to reach a much wider group. You know, we still have market share in 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.

Sean MacDonald: Yeah, I mean, I think on the bicycle side, I think it's still tough for many bicycle brands, but I do feel that there's a huge amount of opportunity. 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. 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, and I think that's really what we are focusing on. We do believe that riding is the future, and off-road riding, which is where our focus is, has been very strong for us. It continues to be strong. MTB is recovering quite nicely.

Yeah, I mean, I think on the bicycle side it's um, I mean I think it's it's it's still tough, uh, for many bicycle Brands. Um, but I do feel that there's a huge amount of opportunity. So we are continuing to invest, um, in in product development and research and development, for new exciting products. Uh, and absolutely and marketing, I think is a huge amount of potential for all you have to reach a much wider group. Um, you know, we still have uh,

Sean Macdonald: 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 and market and that's also, you know, that's also growing on a year-to-date basis, so that's great to see. Of course, ADV has been fantastic. You know, we're quite diversified now, of course, you know, with these three different markets, different demographics that we're selling to. I think that diversification is a strength. Of course, with MTB coming back, I think that's gonna really have a positive impact on our results moving forward, Chris.

Sean MacDonald: Moto is our most established category and market, and that's also growing on a year-to-date basis, so that's great to see. Of course, ADV has been fantastic. We're quite diversified now, of course, with these three different markets, different demographics that we're selling to, and I think that's it. Diversification is a strength, and of course, with MTB coming back, I think that's going to really have a positive impact on our results moving forward, Chris.

Um, you know, that's also growing on a year-to-date basis. So that's great to see. Uh, and of course, add has been fantastic. Um, you know, we quite Diversified now. Of course, you know, with these 3 different markets um, different demographics that we selling to. Um and I think I think that that justification is a strength and of course with MTV coming back, I think that's going to really have a positive impact on our results. Moving forward. Chris

Great, that's all for me. Thanks, Sean chat soon.

Christopher Muller: Great. That's all for me. Thanks, Sean. Chat soon.

Christopher Muller: Great. That's all for me. Thanks, Sean. Chat soon.

Thanks, Chris, I'll talk to you soon. Cheers.

Sean Macdonald: Thanks, Chris. I'll chat to you soon. Cheers.

Sean MacDonald: Thanks, Chris. I'll chat to you soon. Cheers.

Thank you.

Operator: Thank you. We will move next with Aaron Gelband with Orange Street Capital. Please go ahead.

Operator: Thank you. We will move next with Aaron Gelband with Warren Street Capital. Please go ahead.

We will move next. We have Aaron Galpin with Warren Street Capital. Please go ahead.

Hey Sean. How you doing?

Hey good. A new Aaron.

Aaron Gelband: Hey, Sean. How you doing?

[Analyst]: Hey, Sean. How are you doing?

Sean Macdonald: Oh, good evening, Aaron.

Sean MacDonald: Hey. Good, and you, Aaron?

Aaron Gelband: Yeah, doing well, thanks.

[Analyst]: Yeah. Doing well. Thanks. I had one question on the direct business. 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 big acceleration? Is it sustainable? Is it concentrated in any specific products, or is it just the result of a digital marketing campaign? Any color on that would be very helpful.

Sean Macdonald: Right.

Aaron Gelband: I had one question on the direct business. 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, 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 specific products, or is it just the result of a digital marketing campaign? Any color on that would be very helpful.

Yeah, doing well. Thanks. Um, I had 1 question on the Direct business. Uh 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. Uh, 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. Um, is it sustainable? Is it concentrated any pro in any specific products or is it just the result of

A digital marketing campaign, any caller, and that would be very helpful.

Sean Macdonald: 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, and that's been pretty strong for us. Also, 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.

Sean MacDonald: 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 across the internet, and 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 this is targeted marketing. It's very specialized. There's a blend between, of course, reaching end consumers with targeted online campaigns and email campaigns. 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.

Sean Macdonald: And also, of course, the website is also the home of the brand, so there's fantastic content on there now. So 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. And I think, you know, I'm talking primarily in the US and in South Africa, where, you know, we have direct online channels. And I think it's, as I said, of course, there's the selling opportunity, but there's also the marketing opportunity.

Sure. I mean, there's a couple of reasons. Um, I mean, particularly in in, in Q3, we actually launched a new web platform. Uh, we're using a new platform now, um, which has got a lot of capabilities in terms of um, consumer engagement, um, and, and creating brand awareness, um, you know, across the internet, and that's been, um, pretty strong for us. Um, and also, I think a lot of this is about Focus. Uh, Aaron we have a new digital Department that we set up, um, at the beginning of the year, um, and they are driven by consumer Direct business. Um, and that means, um, you know, this is targeted marketing. It's very specialized. Um, there's a blend, uh, between, um, you know, of course, reaching and consumers, um, with with targeted, um, online campaigns and email campaigns. Um, and also, of course, um, the website is also the home of the brand, so there's fantastic content on there now. Um, so I think it's really about Focus. The new digital team is, is

Sean MacDonald: 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 going to 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 I'm talking primarily in the US and in South Africa where we have direct online channels. I think, 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 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 do marketing campaigns that are targeted, and to see that filtering through to your revenue.

Doing really really well exceeding, our expectations uh, in terms of growth, um, I think moving forward direct, uh, to Consumer businesses is going to be uh, a more important, uh, area of our business. Um, it just in terms of growth and also just in terms of contribution, um, to to overall revenues. Um, and I think, you know, I'm talking primarily in the US and in South Africa where, you know, we have

Direct um, online channels.

Um, and I think it's uh, as I said, of course there's a selling opportunity but there's also the marketing opportunity. I think it creates

Sean Macdonald: I think it creates a lot of brand equity, you know, when you can, 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 specialist skills on board, and we're pulling 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, when you are used to being a distribution business.

Sean MacDonald: We've 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 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. 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, 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's a growing area. It's a focus area for us.

Sean Macdonald: 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. We have a full customer service department now in the US and also in South Africa to take care of consumers' direct needs. It's a growing area. It's 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.

Um, a lot of brand Equity, uh, you know, when you can, when you can actually Target, uh, consumers and it's been exciting to see how the demand has continued to Surge online. Uh, it's really exciting to be able to see the return on investment when you do do marketing campaigns that are targeted and to see that filtering through, um, you know, to your Revenue. So, we got some, some Specialists, um, skills on board, um, and we, we pulling, you know, pulled that all together. Now into a strong digital team that's very focused on the direct to Consumer business. Of course, it's, it's not only about the website. It's also about, uh, um, having customer service in the back end, um, that can, um, you know, satisfy the needs of consumers. Um, when you, when you are used to being a, a distribution business and traditionally we've been in distribution and funding, of course, to, to dealers, we might have been online or brick and mortar. Um, you know, in order to move on to the consumer space. Um,

Sean MacDonald: We've been putting a lot of energy into it, and it's great to see the increase in demand, and we do expect this to be an important area for us going forward, where we are expecting double-digit growth.

Um, especially with consumers these days that I've got very high expectations in terms of service levels. Um, you know, we've had to invest in in customer service, um, and we have a full customer service department now, in the US and also in South Africa, to take care of, um, consumers, um, direct needs. So it's a growing area. It's a focus area for us. We've been putting a lot of energy into it and it's great to see um, the, the increase, uh, in in demand and we do expect this to be an important um, area for us going forward, where we are expecting uh uh double digit price.

Aaron Gelband: The, I'd also assume that the gross margins are higher on that. If this becomes a much meaningful piece of the business, would you expect that to have a positive impact on the company gross margins?

[Analyst]: I'd 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?

Company. Gross margins.

Sean MacDonald: 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 because you're selling full-price items. When you have Black Friday and those kinds of events, of course, it's also an opportunity 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. For sure, it should have a positive impact on margins moving forward.

Sean Macdonald: Absolutely. When you're selling direct, your margins are better. There are costs involved, obviously, in terms of the marketing. There's a blend in terms of the margins, 'cause you're selling full price items. You know, when you have Black Friday and those kinds 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. For sure it should have a positive impact on margins moving forward.

Absolutely, um, when you're selling direct, your margins are are better. Uh, there are costs involved obviously in terms of the marketing, um, and there's a blend in terms of the margins because you're selling full price, um, items. But, you know, when you have black Friday and those kinds of events, um, of course, um, it's just an opportunity to, um, you know, to turn some of your, um, inventory into cash. If it's maybe a little bit, slow moving, we don't have a lot of back, but if it is a bit slow moving, it's it's an opportunity because you have margin available. Um, so for, for sure, it should have a positive impact on margins moving forward.

Aaron Gelband: Got it. One more question on, 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 kinda 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, are you, are you just talking in an absolute sense?

[Analyst]: Got it. One more question on 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 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 seems, be inconsistent with kind of saying that the ordering pattern's continuing to improve, but maybe you just give some color on that, and maybe that just ties into Chris's question about the timing of shipments.

Got it. And then, um, 1 more question on. Um, so, you know, overall performance of the company 18% growth. I think what we'd be happy with that, uh, if that continues, uh, for sure. But there was a big, kind of deceleration, especially in international, which had grown 79% 74%, and then it dropped off to 17% and so, I think, and, and you've been, you know, very positive on your comments for international ordering, patterns, both the last quarter and this quarter and so so maybe just to parse your language a little bit. I mean, when you talk about good International ordering patterns,

uh,

Aaron Gelband: I mean, a big deceleration from 74% to 17% would, you know, it seems inconsistent with kind of saying that the ordering pattern's continuing to improve. Maybe you just give some color on that and maybe that just, you know, ties into Chris's question about kind of the timing of shipments.

Are you are you just talking in an absolute sense? I mean, a big deceleration from 74 to 17%.

Would, uh, you know, it seems inconsistent with kind of saying that the ordering patterns continuing to improve, uh, but maybe you just give some color on that and maybe that just, you know, ties into Chris's question about kind of the timing of shipments.

Sean Macdonald: 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 3-month period of 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, 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 at on the international side.

Sean MacDonald: Yeah. Sure. I mean, I think when I talk about ordering patterns continuing to improve, I'm talking about on an annual basis. I'm not talking about a three-month period, a particular quarter. When I look at the ordering patterns 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.

Sean MacDonald: I don't think that our current ordering patterns at 17% is really a reflection of where we're at on the international side, and 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 how the international distribution business has grown on a year-to-date basis at 31 December.

Sean Macdonald: 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. 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 businesses has grown on a year-to-date basis at 31 December.

Yeah, sure. I mean, I think when I talk about ordering packages, um, you know, continue to improve on talking about, like, on an annual basis. I'm not talking about a 3-month period, a particular quarter. So when I look at the, the ordering patterns, um, you know, um, in general, um, there's a real strong Improvement, so if you get look at it on the yesterday basis, and we've had fantastic growth in terms of ordering patterns and I do expect that to continue, um, a little bit of it is timing, as I said, um, I don't think that, um, our current ordering patterns at 17% is really a reflection of where we at, uh, on the international side. Um, and uh, I think it'll be good to, to also discuss this maybe when we get to the end of Q4 and then we can look back on the year, uh, and we can make a real solid assessment because that'll take into account all of the seasonality and all of the shifting timing differences, we're able to see um, you know, how the how the um the international distribution businesses has grown uh on a year to date basis at at 31, December.

Aaron Gelband: 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.

[Analyst]: 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.

Sean Macdonald: Oh, the shipping. Sorry, yeah.

Sean MacDonald: The shipping. Sorry. The shipping. I meant the shipping. Correct. I meant the shipping. Correct. The shipping, which is obviously driven by the orders that we got actually probably a few quarters ago. Absolutely, it's the shipping.

Aaron Gelband: was up 17%.

Sean Macdonald: The shipping. I meant the Correct. I meant the Yeah, correct. I meant the shipping. Correct. 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.

Got it that's helpful and just to, to be clear in your response, you said the ordering pattern was up 17%, but you meant that the uh, shipping shipping, the shipping on this is correct. I'm at this. Yes. Correct. I'm at the shipping, correct. So the shipping which is obviously driven by, you know, the orders that we got, uh, actually probably a few quarters ago. So, absolutely. It's uh, it's the shipping

Aaron Gelband: Understood. Very helpful. All right. Well, thank you. Congrats on this quarter and talk to you soon.

Understood very helpful. All right. Well, thank thank you. Congrats on the next quarter and talk to you soon.

[Analyst]: Understood. Very helpful. All right. Well, thank you. Congrats on the next quarter, and talk to you soon.

Thanks a lot. Appreciate it.

Thank you.

Sean MacDonald: Thanks a lot. Appreciate it.

Sean Macdonald: Thanks a lot. Appreciate it.

Operator: Thank you. This concludes our Q&A session. I will now turn the call over to Sean Macdonald for closing remarks.

Operator: Thank you. This concludes our Q&A session. I will now turn the call over to Sean MacDonald for closing remarks.

Luna or Q&A session. I will now turn the call over to Sean McDonald for closing remarks.

Sean MacDonald: Thank you all for joining us today. We look forward to our next call to review the results of the Q4 2025.

Sean Macdonald: Thank you all for joining us today. We look forward to our next call to review the results of the 2025 Q4.

Thank you all for joining us today. We look forward to our next call to review the results of the 2025 football quarter.

Thank you. And this is conclude today's program.

Operator: Thank you. This does conclude today's program. Thank you for your participation. You may disconnect at any time.

Operator: Thank you. This does conclude today's program. Thank you for your participation. You may disconnect at any time.

Thank you for your participation. You may disconnect at any time.