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Industries, Inc. Reports Fourth Quarter and Full Fiscal Year 2009 Financial
17th Consecutive Year of Profitability on Highest Annual Revenue in Company
History Amid Global Recession
NY -- April 15, 2009 -- Lakeland Industries, Inc. (NASDAQ: LAKE) today announced
financial results for its fourth quarter and full fiscal year 2009 ended January
Financial Results Highlights
and Recent Company Developments
Fourth Quarter Fiscal Year
2009 Financial Results
were $22.3 million in the fourth quarter of 2009, a decrease of 10.8% from $25.0
million in the comparable 2008 period, and a decrease of 11.5% as compared to
the third quarter of 2009. The decrease in revenue was a result of a
substantial reduction of disposable products sales in the US partially offset by
increased domestic demand for the Company's emerging line of reflective products
and growth in international operations. Domestic revenues were $15.4
million in the fourth quarter of 2009, a 28.5% decline from $21.5 million in the
prior year period; international revenues were $6.9 million in the 2009 quarter,
an increase of 99.6% from $3.4 million in 2008. The strength of the
US dollar against foreign currencies resulted in a diminished impact from the
growth of international sales on a reported basis. On a constant
currency basis from the second quarter of FY2009, international revenues would
have increased by 26% to $8.6 million in the fourth quarter FY2009.
profit decreased $0.2 million, or 3.4%, to $6.0 million for the fourth quarter
2009, as compared to $6.2 million for the same period in 2008. Gross
profit as a percentage of net sales increased to 26.8% for the quarter ended
January 31, 2009 from 24.7% in same period of the prior fiscal
year. Operating profit decreased to $0.6 million from $1.7 million
for the fourth quarter of 2008. Operating income as a percentage of
net sales decreased to 2.6% for the fourth quarter of 2009 from 6.9% for the
same period in fiscal 2008. The decrease in operating profit is
primarily due to the drop in US domestic revenue in fourth quarter 2009. Net
income for the fourth quarter of FY09 was $0.7 million compared with $1.0
million for the fourth quarter FY08. EPS for the fourth quarter of
FY2009 was $0.12, compared with $0.18 for the fourth quarter of
on the financial results, Lakeland Industries President and Chief Executive
Officer Christopher J. Ryan said, "Lakeland delivered remarkable results in an
otherwise devastating period for many companies around the world. The
unprecedented global economic slowdown was severe in the months corresponding
with our fourth quarter (November 1, 2008 through January 31,
2009). Our domestic operations, in particular, experienced
significant challenges, primarily relating to demand for our products from the
automotive supply chain. Despite these issues, the investments we
made during the past few years to diversify operations outside of the US have
delivered their intended results. We are pleased to have reported
record annual revenues in 2009 as well as achieving another milestone of
profitability for the 17th consecutive year, including strong profits in the
diversification strategy we implemented relied on the basic tenets of expanding
our international operations and product lines. We now have a
presence in most of the major developing economies around the
world. Furthermore, with manufacturing operations in 10 locations on
three continents, we believe we are the industry's lowest cost
producer. At a time when corporate and government customers around
the world are seeking ways to lower spending, we believe we are well positioned
with a cost structure and quality of product that is second to
none. This has helped us to weather the storm and enables us to
quickly grow our revenues and profits even further as global business conditions
product lines and expanded geographic reach have provided avenues of
growth. Although US sales of disposable garments remains soft, our
product lines of high visibility/reflective garments, fire gear and chemical
suits are not as negatively impacted since they are supported by government
spending which appears to be intact for the foreseeable
future. International sales are still a bright spot with GDP growth
in China, Brazil and India consistently strong and well in excess of the
US. Nonetheless, we have rationalized our US overhead and hope to
come out of this crisis quite well with both domestic and international
operations primed for growth."
Fiscal Year 2009 Financial
sales increased $6.5 million, or 6.8%, to $102.3 million for the year ended
January 31, 2009 compared to $95.7 million for the year ended January 31,
increase was comprised mainly of $8.4 million in sales of Qualytextil, S.A.
included in FY09 for the nine months following the acquisition, sales growth of
$3.0 million at the Company's China, Asia Pacific Rim and related operations, an
increase of $.6 million in European sales, $2.5 million in increased reflective
sales in the US, $.1 million increased sales of chemical protection garments in
the US, $.5 million increase in sales in Chile, and increased sales of $.4
million in India. These growth areas were offset by decreases in sales of $7.7
million for disposable products in the US, $.3 million in sales of gloves in the
US, $1.0 million in sales of woven products in the US, and $.3 million of
Gross Profit. Gross profit
increased $5.6 million, or 25.1%, to $28.0 million for the year ended January
31, 2009 from $22.4 million for the year ended January 31,
2008. Gross profit as a percentage of net sales increased to 27.3%
for the year ended January 31, 2009 from 23.4% for the year ended January 31,
2008, primarily due to the inclusion of Qualytextil, S.A. sales in 2009, which
operated at a 51.4% margin for the nine months in FY09 in which the Brazil
operations were included, and a sales rebate program in the prior year to meet
competitive conditions resulting in a reduction in sales and higher Tyvek fabric
costs. Such higher Tyvek costs resulted from Tyvek purchased earlier with no
rebate, charged to costs of goods sold for the months of April, May and into
early June 2007 resulting in higher costs. Start-up expenses included in gross
profits costs related to the new foreign subsidiaries of approximately $.6
million were partially offset by ongoing cost reduction programs in component
and service-purchasing, shifting production from the US to China and Mexico, and
a completion of the plant restructuring in Mexico, rework expenses on a chemical
suit contract, and reduced volumes in lower margin US fire gear and gloves
Expenses. Operating expenses increased $4.3 million, or 24.9%,
to $21.7 million for the year ended January 31, 2009 from $17.4 million for the
year ended January 31, 2008. As a percent of net sales, operating