Manufacturing concentration in China
Most products are produced by third-party subcontractors in China, so disruptions there can affect supply, lead times, and cost.
- Scope
- Product availability and gross margin
- Materiality
- high
Leatt Corp
Leatt Corp designs, develops, markets, and distributes personal protective equipment for riders in motorsports and action sports, with its best-known product being the Leatt-Brace neck protection system. The company sells through a global distributor network, e-commerce partners, and direct channels in the U.S. and South Africa, while also manufacturing products through outsourced third-party factories, primarily in China.
8,6 %
44,0 %
5,3 %
+40,6 %
4.87
2.73
| % | |
|---|---|
| Neck protection systems | 25% Leatt-Brace neck braces and related protection products sold under licensing arrangements. |
| Motorcycle protective gear | 35% Protective apparel and equipment for motorcycle riders, including impact and body protection. |
| Bicycle protective gear | 20% Protection products for mountain biking and other cycling use cases. |
| Other motorsport and leisure PPE | 15% Protection products for snowmobiles, ATVs, and other action-sport activities. |
| OEM and royalty income | 5% Original equipment manufacturing for third-party brands and small royalty streams. |
Leatt sells primarily to distributors, dealers, and e-commerce partners that then serve retailers and end consumers in...
- Distributors and dealersprimary
Buy Leatt products for resale into motorcycle and bicycle retail channels worldwide.
- Direct-to-consumer online buyerssecondary
Purchase directly in the U.S. and South Africa when dealer coverage is limited or convenience matters.
- E-commerce partnerssecondary
Online channel partners that extend reach and help convert end-user demand digitally.
- OEM brand customersemerging
Third-party brands that source protective equipment manufacturing from Leatt.
Leatt sells products worldwide through approximately 61 distributors and 6 e-commerce partners, with direct...
- •Worldwide sales through a distributor-led channel model
- •Direct U.S. distribution through a wholly owned subsidiary
- •Direct South Africa distribution through a local branch
- •Manufacturing is predominantly in China
- •Additional manufacturing capacity is being built in Thailand and Bangladesh
Leatt's near-term focus is to support working capital with cash flow, its revolving credit line, and inventory...
01
Expand sales in the U.S. and abroadmedium-term
Revenue growth depends on widening distribution and increasing brand penetration across rider categories.
02
Diversify manufacturing footprintshort-term
Reducing reliance on China lowers supply chain and geopolitical concentration risk.
03
Preserve liquidity and working capitalshort-term
The business is inventory- and channel-dependent, so cash and credit availability support operations.
Leatt faces supply-chain concentration risk because most products are manufactured by third-party subcontractors in...
Channel inventory and distributor dependence
Sales rely on distributors, dealers, and e-commerce partners, which can create order volatility and stocking cycles.
- Scope
- Revenue timing and working capital
- Materiality
- high
Royalty and licensing obligations
The company pays 4% and 1% royalties on neck brace sales, directly reducing profitability on a core product line.
- Scope
- Gross margin and operating income
- Materiality
- medium
Discretionary consumer demand
Motorcycle and cycling protective gear purchases can soften when consumer spending weakens.
- Scope
- Top-line growth
- Materiality
- medium
Revenue recognition timing
Affects quarterly revenue comparability and cut-off risk
Inventory valuation
Can affect gross margin and working capital
Allowance for doubtful accounts
Affects receivables and earnings
Income tax estimates
Can create volatility in tax expense and deferred tax assets
Royalty expense on neck brace sales
Directly reduces profitability on a core product line
: 28.4.2026