Full Press Release Details
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Industries, Inc. Reports Earnings Per Share Increase of 67% for the Fiscal 2010
Quarter EPS Benefits from Growth of International Operations and Domestic
Recovery; Achieves 18th Consecutive Year of Profitability
NY -- April 16, 2010 -- Lakeland Industries, Inc. (NASDAQ: LAKE) today announced
financial results for its fourth quarter and full fiscal year 2010 ended January
Financial Results Highlights
and Recent Company Developments
Fourth Quarter Fiscal Year
2010 Financial Results
sales were $24.8 million in the fourth quarter of 2010, an increase of 11.5%
from $22.3 million in the comparable 2009 period, and an increase of 11.5% as
compared to revenues of $22.3 million in the third quarter of
2010. The year-over-year increase in revenue was mainly a result of a
38.4% increase in revenue from Brazil, along with strong growth in Chile and the
UK, and modest increases from India and China. Domestic revenues were
$15.1 million in the fourth quarter of 2010, a 1.5% decline from $15.4 million
in the prior year period, but an increase of 5.6% from $14.3 million in the
third quarter of fiscal 2010. International revenues were $9.7 million in the
2010 fourth quarter, an increase of 40.4% from $6.9 million in the 2009 period
and an increase of 21.3% from $8.0 million in the third quarter of fiscal
2010. As a percentage of 4QFY10 consolidated sales, international
revenues accounted for 39%, an increase from 31% for the same period of fiscal
2009, and domestic revenues accounted for 61%, a decrease from 69% in the 2009
growth was led by sales at Qualytextil, representing the Company's operations in
Brazil, which had fourth quarter revenues of $4.0 million, an increase from $2.9
million in 4QFY09 and $3.4 million in 3QFY10. Comparing regional
revenues in 4QFY10 with 4QFY09, Chile sales increased 45.9% to $0.4 million, UK
sales increased by 50% to $1.1 million, Canada sales decreased by 13% to $1.0
million, and China external sales increased by 29.0% to $2.3 million. Domestic
revenues reflect a 6.6% increase in 4QFY10 disposable product sales as compared
with the same quarter of 2009, offset in part by somewhat softer sales of
reflective and other product categories, but a 22% decrease for the full year
due to challenging business conditions and an extremely competitive pricing
Profit. Gross profit increased $1.5 million, or 25.9%, to $7.5
million for the fourth quarter 2010, as compared to $6.0 million for the same
period in 2009. Gross profit as a percentage of net sales increased
to 30.2% for the quarter ended January 31, 2010 from 26.8% in same period of the
prior fiscal year. The growth in year-over-year gross profit reflects
higher margin contributions from an increased level of international product
sales. In particular, the gross margin in Brazil of 53.0% for the
fourth quarter of 2010 was exceptionally high resulting from a larger bid
contract and favorable exchange rates.
Profit. Operating profit increased to $1.4 million from $0.6
million for the fourth quarter of 2009. Operating income as a percentage of net
sales increased to 5.5% for the fourth quarter of 2010 from 2.6% for the same
period in fiscal 2009. The increase in operating profit is primarily
due to the strong margins in Brazil, mainly resulting from a large bid contract,
increased profitability for certain other international operations as well as
reduced losses for the balance of the international businesses and the Company's
domestic operations.
income for the fourth quarter of fiscal 2010 was $1.1 million compared with $0.7
million for the fourth quarter of the prior year. Earnings per share
(EPS) for the fourth quarter of fiscal 2010 was $0.20, an increase of 67% from
EPS of $0.12 for the fourth quarter of the prior year.
on the financial results, Lakeland Industries President and Chief Executive
Officer Christopher J. Ryan said, "It is with perseverance and successful
implementation of our international growth strategy that Lakeland Industries
consecutive year of profitability. Our performance in the final
quarter of fiscal 2010 demonstrated the benefits of our global diversification
as we rebounded from a loss in the third quarter to produce our highest level of
fourth quarter earnings per share since fiscal 2007. Fourth quarter
sales reversed a year-long trend of declining revenue by increasing 11.5% from
sales in the U.S. have essentially stabilized after more than a year of
deterioration, we view our investments in our international operations that
commenced several years ago as being the key to our recently improved sales
performance as well as for creating a more balanced and diversified platform for
the long term. To this end, we believe we are positioned more
competitively on a global scale. Lakeland has put in place the
necessary infrastructure to target an addressable global market that dwarfs the
U.S. market in size while growing significantly faster. With our mix
of global distribution capabilities, manufacturing facilities, and a broad line
of high quality products, we are poised to attain increased international sales
and market share in fiscal 2011 and beyond.
element in our international growth strategy has been our entry into
Brazil. In the fourth quarter of fiscal 2010 our Brazil operations
delivered impressive growth, which capped off improved sales for all of fiscal
2010 at $13.2 million. We continue to improve upon our business in
Brazil through investment in new products and sales/marketing
support. Our sales in fiscal 2010 in Brazil compares very favorably
with calendar 2007 sales of $8.5 million, the last full year prior to our
acquisition of this business in 2008.
addition to Brazil, we are gaining traction in our businesses in China, which
until recently had only been a manufacturing base, India, Chile and the
UK. International sales in the fourth quarter improved by 25% over
the prior year and now comprise over 39% of our consolidated sales - up from
approximately 5% in fiscal 2007 and 31% in fiscal 2009. To
accommodate these sales channels, we have built, acquired and made capital
investments for manufacturing of products in the U.S., Brazil, Mexico, China,
and India, and presently offer 100 products worldwide. From this
platform we intend to add scale in existing markets and to leverage our presence
by broadening our reach into Argentina, which is already functioning, and into
Russia and Kazakhstan later in fiscal 2011. By this time next year, we
anticipate that new products and markets cultivated over the last four years
should account for 50% of our total revenues.
the enhancements to our sales, marketing and manufacturing efforts, we are also
pleased to have made significant progress in improving our balance sheet.
Earnings before interest, taxes, depreciation and amortization increased in the
fourth quarter as compared with the prior year period, while our inventory level
declined amid an increase in sales volume. This contributed to the