Recent Updates
Recently added Catalysts
LAKE

701-7 Koehler Avenue, Suite 7 - Ronkonkoma,

Key Takeaway: 701-7 Koehler Avenue, Suite 7 - Ronkonkoma, (631) 981-9700 - www.lakeland.com LAKELAND INDUSTRIES ANNOUNCES SIGNIFICANT DEVELOPMENTS IN ITS GLOBAL TRANSFORMATION RONKONKOMA, NY - April 13, 2012, Lakeland Industries, Inc. (NASDAQ: LAKE), a leading global manufacturer of prote

Full Press Release Details

701-7 Koehler Avenue, Suite 7 - Ronkonkoma,
(631) 981-9700 - www.lakeland.com
LAKELAND INDUSTRIES ANNOUNCES SIGNIFICANT
DEVELOPMENTS IN ITS GLOBAL TRANSFORMATION
RONKONKOMA, NY - April 13, 2012,
Lakeland Industries, Inc. (NASDAQ: LAKE), a leading global manufacturer of protective clothing for industry, municipalities, healthcare
and to first responders on the federal, state and local levels, today announced several important developments in its continued
global transformation. These developments include consolidation of the Company's domestic manufacturing operations and a
significant traction for its Brazilian operations.
Christopher J. Ryan, Lakeland's President
and Chief Executive Officer, said, "In advance of reporting financial results for our full fiscal year 2012 ending January
31, we are announcing important developments that beginning in our first quarter of fiscal 2013 are expected to deliver an improvement
in the Company's cost structure, a reduction in overhead, and an acceleration of growth in Brazil that will drive a recovery
in our consolidated revenues and profits sooner than we had previously announced. Certain of these and other developments will
impact our fiscal 2012 fourth quarter financial results.
"First and most important among our
recent developments is the receipt of a signed purchase order valued at approximately $5.3 million net of VAT taxes from the Brazilian
Navy. This order pertains to the successful proposal for fire resistant coveralls developed by Lakeland specifically for use by
the Brazilian Navy that we had previously announced, although we could not accurately or definitively predict its contribution
to sales without signed purchase orders. Our prior internal forecasts did not factor in any large order activity from Brazil in
our first fiscal quarter. With the signed purchase order now in hand, we have begun to manufacture these garments and will make
shipments and recognize revenue in our first through third fiscal quarters. While earlier we had anticipated a softer first half
of fiscal 2013 based in part on less significant growth in Brazil and the loss of domestic US revenues, we now expect stronger
operating performance on a consolidated basis in the fiscal 2013 first and second quarters.
"We believe the order from the Brazilian
Navy is the single largest order we have received in that country - if not worldwide. As we have stated, there are a number
of large orders being pursued in Brazil. We also are pleased to announce the recent receipt of separate signed purchase orders
relating to a proposal for firefighting gear from another Brazilian agency valued at approximately $2.3 million net of VAT taxes,
with delivery of products and revenue recognition expected during the first half of the present fiscal year. All of the signed
purchase orders from our international operations combine to represent the largest backlog in the Company's history. To accommodate
this accelerating growth we needed to increase our working capital in advance of manufacturing and delivering large orders. We
have commenced borrowing in Brazil that presently totals approximately $1.6 million, primarily for the purchase of raw materials.
"Our traction in Brazil, in particular,
continues to improve and we are encouraged by the many opportunities for other large bid orders that we are actively pursuing.
We count on Brazil to make a meaningful contribution to our consolidated revenue growth. However, operating in Brazil does come
with its challenges, some of which are out of our control. In the fiscal 2012 fourth quarter, we will be taking a foreign currency
charge of approximately $200,000. From the beginning of the second half of 2011 and into the first quarter of 2013, Brazil's
currency weakened against the US dollar. We have taken steps to reduce our exposure to foreign exchange fluctuations in Brazil.
disclosed, we will continue to market our expanding product lines in India, although to enhance our consolidated profitability
we determined that our unprofitable India glove manufacturing subsidiary would be sold or shut down. To this end, we reclassified
the business as a discontinued operation with our third quarter financial results and recorded a pre-tax loss on disposal of approximately
$880,000 for write-downs and other related expenses. We anticipate that additional charges relating to the discontinuance and shutdown
of manufacturing operations in India will be limited to an additional $0.9 million for a total not to exceed $1.8 million. The
additional charges are expected to be recorded with our fourth quarter results.
"Another charge we will be taking in the fourth
quarter is for approximately $230,000 and pertains to the reduction of manufacturing capacity required in the US. Expenses
relating to the shutdown of the plant in Missouri and relocation of the production to Mexico and warehousing to Decatur, although the actual shutdown will not take place until April, so the overhead savings will be realized
beginning in our second fiscal quarter. The adjustments to our manufacturing capacity in the US are in large part a function
of the strategic changes we have had to make domestically. These changes reflect the sales levels in the US for discontinued
product lines and new Lakeland-branded products we have been introducing in the US. As previously disclosed, a significant
part of the Company's disposable and chemical product sales in the US will be removed as a result of DuPont terminating
our licensing relationship. The DuPont products being removed have yielded far lower margins than Lakeland branded products,
so the loss of this revenue is expected to have a less significant impact on our earnings. We are working toward the
replacement of DuPont products with our own Lakeland-branded offerings."
performance in the fourth quarter has been negatively impacted by the aforementioned charges and reduced volume in the US. With
the fourth quarter currency and plant closure charges announced today and the decline of sales in the US from the DuPont contract
termination, we expect to report a loss for the period. This financial performance has resulted in the Company triggering a technical
default of its bank loan covenants. We have an excellent banking partner in TD Bank. We have amended the loan agreements
with TD Bank to effect a change in the repayment terms on a portion of the debt, modify the minimum EBITDA requirements, modify
the debt-to-EBITDA requirements, and include other conditions which we believe are manageable while continuing to provide us with
access to borrowing facilities sufficient to accommodate our continued growth.
past the fourth quarter and into fiscal 2013, we are quite pleased with our operating position. We will have a new start domestically
with a comprehensive, higher margin product line, and we will have reduced our cost structure and overhead, while reaping
the benefits of our accelerating international revenue growth. Based on the improvements in our international operations including
the growth of our market leadership in Brazil, management expects to return to profitability in the first quarter. We are very
encouraged that our global transformation is setting the stage for strong growth going forward in our post-DuPont era."
Lakeland Industries expects to report earnings
and file its annual report on Form 10-K with the Securities and Exchange Commission later in the month of April. Prior to that
time, the Company will announce the reporting date and details for its fourth quarter and year end financial results conference
About Lakeland Industries, Inc.:
Lakeland Industries, Inc. (NASDAQ: LAKE)
manufactures and sells a comprehensive line of safety garments and accessories for the industrial protective clothing market. The
Company's products are sold by a direct sales force and through independent sales representatives to a network of over 1,200
safety and mill supply distributors. These distributors in turn supply end user industrial customers such as chemical/petrochemical,
automobile, steel, glass, construction, smelting, janitorial, pharmaceutical and high technology electronics manufacturers, as
well as hospitals and laboratories. In addition, Lakeland supplies federal, state, and local government agencies, fire and police
departments, airport crash rescue units, the Department of Defense, the Centers for Disease Control and Prevention, and many other
federal and state agencies.
Safe Harbor Statement
"Safe Harbor" Statement
under the Private Securities Litigation Reform Act of 1995: This press release contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including
statements, without limitation, regarding our expectations, beliefs, intentions or strategies regarding the future. Forward-looking
statements involve risks, uncertainties and assumptions as described from time to time in press releases reports and filings filed
with the Securities and Exchange Commission. All statements, other than statements of historical facts, which address Lakeland's
expectations for the future with respect to financial performance or operating strategies can be identified as forward-looking
statements. As a result, there can be no assurance that Lakeland's future results will not be materially different from those
described herein as "believed," "projected," "planned," "intended," "anticipated,"
"estimated" or "expected," which words reflect the current view of the Company with respect to future events.
We caution readers that these forward-looking statements speak only as of the date hereof. The Company hereby expressly disclaims
any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the
Company's expectations or any change in events conditions or circumstances on which such statement is based.
For more information concerning Lakeland,
please visit the Company online at www.lakeland.com.
Lakeland Industries Darrow Associates for Lakeland
631-981-9700 631-367-1866
Christopher Ryan, CEO, Jordan Darrow
CJRyan@lakeland.com jdarrow@darrowir.com
Gary Pokrassa, CFO,
GAPokrassa@lakeland.com
701-7 Koehler Avenue, Suite 7
Ronkonkoma, NY 11779
www.lakeland.com
Last updated: Apr 13, 2012