Full Press Release Details
Industries, Inc. Reports Fiscal 2020 First Quarter Financial
NY June 10, 2019 -- Lakeland Industries, Inc. (NASDAQ:
LAKE) (the Company or Lakeland ), a
leading global manufacturer of protective clothing for industry,
healthcare and to first responders on the federal, state and local
levels, today announced financial results for its fiscal 2020 first
quarter ended April 30, 2019.
Fiscal 2020 First Quarter Financial Results Highlights and Recent
Q1FY20 of $24.7 million, compared with Q1FY19 of $24.3 million and
Q4FY19 of $25.0 million
Q1FY20 of $7.6 million, compared with Q1FY19 of $9.5 million and
Q4FY19 of $6.9 million
percentage of net sales in Q1FY20 was 30.6%, compared to 39.0% in
Q1FY19 and 27.7% in Q4FY19
of $7.9 million in Q1FY20, up from $7.1 million in Q1FY19 but down
from $8.4 million in Q4FY19
profit/margin and operating expenses were negatively impacted by
enterprise resource planning ( ERP ) implementation and
reflect substantial build-out of new manufacturing and fulfillment
facilities in Vietnam and India during trailing 12-month
$(465,000) or $(0.06) per basic share for Q1FY20, compared with net
income of $1.9 million or $0.23 per basic share in Q1FY19 and net
loss of $(1.9) million or $(0.24) per basic share in
before interest, taxes, depreciation and amortization (EBITDA)* of
$269,000, as compared to $2.7 million in Q1FY19 and a loss of
$(932,000) in Q4FY19
expenditures for fiscal 2020 first quarter were $200,000 as
compared with approximately $300,000 in the fiscal 2019
million at end of Q1FY20, up from $12.8 million at end of fiscal
$1,279,000 at end of Q1FY20, down from $1,319,000 at end of fiscal
repurchased during the three-month period ended April 30,
Adjusted EBITDA is a non-GAAP financial measure. A reconciliation
is provided in the tables of this press release.
Management's Comments
J. Ryan, President and Chief Executive Officer of Lakeland
Industries, stated, Our first quarter fiscal 2020 results
show important progress from the fourth quarter of last year. Most
notable on a sequential basis, we delivered an improvement in gross
margin, a reduction of operating expenses, lower operating and net
losses, and a return to Adjusted EBITDA profitability. With the
sequential performance measures providing perspective on the
headway we have been making, we believe we are now past a major
part of the challenging aspects of our initiatives, although
significant work remains to be done to fully capitalize on the many
opportunities available in the markets in which we
are now on our way toward the completion of the ERP system
installation for our domestic operations more than half of
our total business -- that ultimately should drive meaningful
benefits throughout our global organization. However, the
challenges for optimizing the system let alone conduct business as
usual have led to significantly greater than anticipated costs in
freight and labor, delivery delays and disruption in our finance
department which had been leading this process. In May we engaged a
specialist to spearhead the ERP implementation program and are
conducting a search for a highly experienced Chief Financial
Officer. As a result, we now anticipate roll out of our ERP system
to foreign entities to begin in the first quarter of fiscal
to the fourth quarter, the ERP system in the US led to lower
domestic sales and gross margins due to order processing issues
and, particularly in the first quarter, the significant expense
incurred to ensure to the extent possible that our customers
received their shipments on time. That our gross margin increased
from the fourth quarter amid these challenges as well as pricing
pressure in select markets and other macroeconomic concerns
demonstrates the potential for revenue growth and profitability
expansion once conditions normalize. In hindsight it would have
been preferable to have delayed our ERP implementation. We cannot
rewrite history and are doing our utmost to bring operations back
other critical change to our business has been the ramping of our
Vietnam manufacturing and associated operations along with our new
facility in India. We have been investing in these facilities for
more than a year, while adding in-country sales and warehousing
capabilities. Capital expenditures for equipment peaked last year,
so we are now spending less in fiscal 2020. Staffing in Vietnam has
been elevated to near capacity and we are training the staff while
transitioning some of the production headcount from China to the
new facility. Following a training regimen to yield more efficient
output over the next few quarters, we expect a much lower cost
tariff-free manufacturing platform to further bolster our financial
performance. Sales within Vietnam and India are also gaining
efforts to strengthen our global marketing channels and
manufacturing capabilities and improve our overall financial
performance are gaining ground. At the same time, in the first
quarter of fiscal 2020, we increased our cash position and modestly
reduced the little debt that remains on our balance sheet. We are
encouraged by the Company's direction and
Fiscal 2020 First Quarter Financial Results
sales were $24.7 million for the three months ended April 30, 2019,
as compared to $24.3 million for the three months ended April 30,
2018 and $25.0 million for the three months ended January 31, 2019.
On a consolidated basis for the first quarter of fiscal 2020,
domestic sales were $12.9 million or 52% of total revenues and
international sales were $11.8 million or 48% of total revenues.
This compares with domestic sales of $12.3 million or 51% of the
total, and internationals sales of $12.0 million or 49% of the
total in the same period of fiscal 2019.
Company experienced sales growth domestically, despite delivery
challenges associated with the ERP implementation, as well as in
all operating regions in the Americas excluding Mexico. Sales in
Mexico were lower due to a large, recurring customer bid for FR