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Lakeland Industries Inc. Reports Fiscal 2015 Second Quarter Financial Results Manufacturing and Operational Efficiencies Drive Gross Margin to Highest Level in Company History RONKONKOMA, NY

Key Takeaway: Lakeland Industries Inc. Reports Fiscal 2015 Second Quarter Financial Results Manufacturing and Operational Efficiencies Gross Margin to Highest Level in Company RONKONKOMA, NY - September 10, 2014 -- Lakeland Industries, Inc. (NASDAQ: LAKE), a leading global manufacturer of

Full Press Release Details

Lakeland Industries Inc. Reports Fiscal
2015 Second Quarter Financial Results
Manufacturing and Operational Efficiencies
Gross Margin to Highest Level in Company
RONKONKOMA, NY - September 10, 2014
-- Lakeland Industries, Inc. (NASDAQ: LAKE), a leading global manufacturer of industrial protective clothing for industry, municipalities,
healthcare and to first responders on the federal, state and local levels, today announced financial results for its fiscal 2015
second quarter ended July 31, 2014. For financial reporting presentation purposes, the operating results in Brazil are excluded
from many of the statements in this announcement because the Company's commercial lender has excluded Brazil from most covenant
calculations as well as other related factors and due to the restructuring of those operations which has resulted in significant
losses for the past two years that distorts analysis for the balance of the global businesses.
Financial Results Highlights -- Second Quarter Fiscal
2015 and Recent Company Developments*
*Includes non-GAAP measures - see table included herein
for reconciliation to GAAP measures
Management's Comments
Christopher J. Ryan, President and Chief
Executive Officer of Lakeland Industries, stated, "The growth in our international operations, including Brazil, remain
intact. At the same time, while business mix and large order flows resulted in a modest decline in year-over-year domestic sales,
business activity remains robust and we foresee increased global demand. To capitalize on this favorable outlook, we continued
our strategy from the first quarter of increasing spending on business development activities while aggressively managing our
other costs to drive improved profitability. We are beginning to experience the desired results as consolidated gross margin reached
the highest level ever for Lakeland and operating profit increased 13% year-over-year amid substantially higher selling, general
and administrative expenses intended to drive future sales growth and the operating loss from our subsidiary in Brazil which is
seeking to go through a turnaround.
"In Brazil, the turnaround is showing
steady indications of progress as it nears completion, with second quarter sales increasing by 6%. For the second consecutive quarter,
operating losses declined by over 60% as compared with prior year periods. Breakeven is now within reach for our Brazil subsidiary,
although it is still absorbing non-operating expenses due to the resolution of prior issues. After the end of the quarter, we completed
the first phase of the refinancing of Lakeland Brazil. This represents a significant step in establishing the subsidiary as financially
self-sustaining while maintaining the financial integrity of the parent company through the non-recourse nature of subsidiary financing
facilities, although the lending environment in Brazil is more difficult lately due to the recent recessionary economy.
"Given Mexico's new spending
on oil and gas exploration with foreign partners, we expect Mexican sales to grow nicely over the next few years. We have realigned
and upgraded the Mexican sales staff to accommodate the economic growth trends in the region. As we look ahead, we remain encouraged
by the global growth trends and our strengthening operational and financial condition which should enable us to drive improved
profitability from the leverage in our business."
Operating Earnings and Adjusted EBITDA - Lakeland
Consolidated with and without Brazil
($000) Quarter Ended July 31, 2014 Quarter Ended July 31, 2013
Lakeland consolidated Brazil Lakeland worldwide excluding Brazil Lakeland consolidated Brazil Lakeland worldwide excluding Brazil
Sales $ 24,610 $ 1,798 $ 22,812 $ 24,639 $ 1,701 $ 22,938
Year over Year growth (0.1 )% 5.7 % (0.5 )% 4.9 % (63.8 )% 22.0 %
Gross Profit 8,062 625 7,437 7,462 118 7,345
Gross Margin 32.8 % 34.8 % 32.6 % 30.3 % 6.9 % 32.0 %
Operating Expenses 6,596 956 5,640 6,165 999 5,166
Operating expense as % of sales 26.8 % 53.2 % 24.7 % 25.0 % 58.7 % 22.5 %
Operating Income 1,468 (331 ) 1,799 1,297 (881 ) 2,178
Other income (loss), net-mainly labor litigation and VAT tax in Brazil in current year and foreign exchange losses in Brazil last year (468 ) (450 ) (18 ) (296 ) (360 ) 64
Add Other Income (25 ) (25 ) ----- 27 ----- 27
Add Depreciation and Amortization 325 67 258 343 77 266
EBITDA 1,300 (739 ) 2,039 1,371 (1,164 ) 2,535
Equity Compensation 25 ----- 25 84 ----- 84
Financing Fees in Other Expense ----- ----- ----- (75 ) ----- (75 )
Qingdao plant relocation costs and costs of sale ----- ----- ----- 160 ----- 160
Brazil additional Foreign Exchange losses 25 25 ----- 360 360 -----
Brazil additional VAT tax charge 76 76 ----- ----- ----- -----
Brazil Labor Litigation 374 374 ----- ----- ----- -----
ADJUSTED EBITDA $ 1,800 $ (264 ) $ 2,064 $ 1,900 $ (804 ) $ 2,704
Numbers may not add due to
*This table is a reconciliation
of GAAP to non-GAAP Financial Measures.
**Brazil numbers, as presented
in this table, include immaterial intercompany transactions.
Operating Earnings and Adjusted EBITDA - Lakeland
Consolidated with and without Brazil
($000) Six-Months Ended July 31, 2014 Six-Months Ended July 31, 2013
Lakeland consolidated Brazil Lakeland worldwide excluding Brazil Lakeland consolidated Brazil Lakeland worldwide excluding Brazil
Sales $ 48,118 $ 3,546 $ 44,572 $ 46,376 $ 3,484 $ 42,892
Year over Year growth 3.8 % 1.8 % 3.9 % (2.3 )% (64.8 )% 14.1 %
Gross Profit 15,162 1,220 13,943 13,542 416 13,126
Gross Margin 31.5 % 34.4 % 31.3 % 29.2 % 11.9 % 30.6 %
Operating Expenses 13,112 1,827 11,285 12,482 2,227 10,255
Operating expense as % of sales 27.2 % 51.5 % 25.3 % 26.9 % 63.9 % 23.9 %
Operating Income 2,050 (606 ) 2,656 1,060 (1,811 ) 2,871
Other income (loss), net-mainly labor litigation and VAT tax in Brazil in current year and foreign exchange losses in Brazil last year (426 ) (411 ) (15 ) (452 ) (387 ) (65 )
Add Other Income (Expense) 13 (25 ) 38 28 ----- 28
Add Depreciation and Amortization 700 142 558 777 167 610
EBITDA 2,337 (900 ) 3,237 1,413 (2,031 ) 3,444
Equity Compensation 49 ----- 49 159 ----- 159
Brazil Additional Severance and Executive Recruiter Fees ----- ----- ----- 80 50 30
Financing Fees in Other Expense (adjustments) ----- ----- ----- 75 ----- 75
Qingdao plant relocation costs and costs of sale ----- ----- ----- 480 ----- 480
Brazil additional Foreign Exchange losses (gains) (13 ) (13 ) ----- 387 387 -----
Brazil additional VAT tax charge 76 76 ----- ----- ----- -----
Brazil Labor Litigation 374 374 ----- ----- ----- -----
Inventory Reserve in USA and China-discontinued product lines raw material/finished goods 300 ----- 300 ----- ----- -----
PA plant shutdown costs 235 ----- 235 ----- ----- -----
ADJUSTED EBITDA $ 3,358 $ (463 ) $ 3,821 $ 2,594 $ (1,594 ) $ 4,188
Numbers may not add due to
*This table is a reconciliation
of GAAP to non-GAAP Financial Measures.
**Brazil numbers, as presented
in this table, include immaterial intercompany transactions.
Lakeland consolidated Brazil Lakeland worldwide excluding Brazil Lakeland consolidated Brazil Lakeland worldwide excluding Brazil
($000) Quarter Ended July 31, 2014 Quarter Ended July 31, 2013
EARNINGS AND EPS:
Operating Income 1,468 (331 ) 1,799 1,297 (881 ) 2,178
Other (Expenses) Income (468 ) (450 ) (18 ) (296 ) (360 ) 64
Add Other Income (25 ) (25 ) ----- 27 ----- 27
Interest Expense (683 ) (166 ) (517 ) (467 ) 320 (787 )
Pretax Income 292 (972 ) 1,264 561 (921 ) 1,482
Income Tax (Expense) benefit (676 ) ----- (676 ) 3,611 ----- 3,611
Net Income (384 ) (972 ) 588 4,171 (921 ) 5,093
# Shares For Basic EPS (000s) 5,925 5,925 5,925 5,560 5,560 5,560
EPS $ (0.065 ) $ (0.164 ) $ 0.099 $ 0.750 $ (0.166 ) $ 0.916
FY14 Includes Reversal of Deferred Tax Valuation $4.5M ----- ----- ----- 4,544 ----- 4,544
EPS Effect ----- ----- ----- $ 0.817 ----- $ 0.817
EPS Without Valuation Reserve Reversal ----- ----- ----- $ (0.067 ) $ (0.166 ) $ 0.099
Six-Months Ended July 31, 2014 Six-Months Ended July 31, 2013
Operating Income 2,050 (606 ) 2,656 1,060 (1,811 ) 2,871
Other (Expenses) Income (426 ) (411 ) (15 ) (452 ) (387 ) (65 )
Add Other Income 13 (25 ) 38 28 ----- 28
Interest Expense (1,323 ) (328 ) (995 ) (741 ) (562 ) (179 )
Pretax Income 314 (1,370 ) 1,684 (105 ) (2,760 ) 2,655
Income Tax (Expense) benefit (699 ) ----- (699 ) 3,432 ----- 3,432
Net Income (385 ) (1,370 ) 985 3,327 (2,760 ) 6,087
# Shares For Basic EPS (000s) 5,924 5,924 5,924 5,445 5,445 5,445
EPS $ (0.065 ) $ (0.231 ) $ 0.166 $ 0.611 $ (0.507 ) $ 1.118
FY 14 Includes Reversal of Deferred Tax Valuation $4.5 mm ----- ----- ----- 4,544 ----- 4,544
EPS Effect ----- ----- ----- $ 0.835 ----- $ 0.835
EPS Without Valuation Reserve Reversal ----- ----- ----- $ (0.224 ) $ (0.507 ) $ 0.283
Numbers may not add due to
*This table is a reconciliation
of GAAP to non-GAAP Financial Measures.
**Brazil numbers, as presented
in this table, include immaterial intercompany transactions.
Table continued on next page
Table continued from preceding page
Lakeland consolidated Brazil Lakeland worldwide excluding Brazil Lakeland consolidated Brazil Lakeland worldwide excluding Brazil
Quarter Ended July 31, 2014 Quarter Ended July 31, 2013
Other Impact on EPS:
Tax Charge for WF Dividend 325 ----- 325 ----- ----- -----
EPS $ 0.055 ----- $ 0.055 ----- ----- -----
Brazil Labor Charge and VAT Settlement 450 450 ----- ----- ----- -----
EPS $ 0.076 $ 0.076 ----- ----- ----- -----
EPS Without Brazil and Without Tax on WF Dividend / Without Tax Valuation Reserve PY $ 0.065 $ (0.088 ) $ 0.153 $ (0.067 ) $ (0.166 ) $ 0.099
Six-Months Ended July 31, 2014 Six-Months Ended July 31, 2013
Tax Charge for WF Dividend 325 ----- 325 ----- ----- -----
EPS $ 0.055 ----- $ 0.055 ----- ----- -----
EPS Without Brazil and Without Tax on WF Dividend / Without Tax Valuation Reserve PY $ (0.011 ) $ (0.231 ) $ 0.220 $ (0.224 ) (0.507 ) $ 0.283
Numbers may not add due to
*This table is a reconciliation
of GAAP to non-GAAP Financial Measures.
**Brazil numbers, as presented
in this table, include immaterial intercompany transactions.
Financial Results Conference Call
Lakeland will host a conference call at
4:30 PM (EDT) today to discuss the Company's second quarter fiscal 2015 financial results. The conference call will be hosted
by Christopher J. Ryan, Lakeland's Chief Executive Officer and Gary Pokrassa, Lakeland's Chief Financial Officer. Investors
can listen to the call by dialing 877-870-4263 (Domestic) or 412-317-0790 (International) or 855-669-9657 (Canada), Pass
For a replay of this call, dial 877-344-7529
(Domestic) or 412-317-0088 (International) or 855-669-9658 (Canada), Pass Code 10052047.
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. For more information concerning Lakeland, please visit the Company online at www.lakeland.com.
Lakeland Industries Darrow Associates
631-981-9700 631-367-1866
Christopher Ryan, CJRyan@lakeland.com Jordan Darrow, jdarrow@darrowir.com
Gary Pokrassa, GAPokrassa@lakeland.com
"Safe Harbor" Statement under
the Private Securities Litigation Reform Act of 1995: Forward-looking statements involve risks, uncertainties and assumptions as
described from time to time in Press Releases and Forms 8-K, registration statements, quarterly and annual reports and other reports
and filings filed with the Securities and Exchange Commission or made by management. All statements, other than statements of historical
facts, which address Lakeland's expectations of sources or uses for capital or which express the Company's expectation
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," or other words which 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.
Non-GAAP Financial Measures
To supplement its consolidated financial
statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles (GAAP), the Company uses
the following non-GAAP financial measures: EBITDA, Adjusted EBITDA and consolidated income, excluding Brazil. The presentation
Last updated: Sep 10, 2014