Full Press Release Details
| 3555 Veterans Memorial Highway, Suite C, | |
| Ronkonkoma, NY 11779 | |
| (631) 981-9700 - www.lakeland.com |
Lakeland Industries, Inc. Reports Fiscal
2016 First Quarter Financial Results
Net Income from Continuing Operations Grows
Free Cash Flow From Continuing Operations
RONKONKOMA, NY - June 15, 2015 --
Lakeland Industries, Inc. (NASDAQ: LAKE), 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 2016 first quarter ended
For financial reporting presentation purposes,
the operating results in Brazil are excluded from many of the statements in this announcement because the Company's recent
determination to exit Brazil has resulted in discontinued operations accounting. Commencing with its first fiscal quarter 2016
ended April 30, 2015, historical and future financial results from the Brazilian operations will be reflected as discontinued operations
in accordance with Generally Accepted Accounting Principles ("GAAP"). Discontinued operations accounting entails the
reclassification of all of the financial results of the Brazil operations within the consolidated financial results of the parent
company, and a restatement of prior periods to reflect the same treatment. The global operations of Lakeland Industries, excluding
Brazil is shown in financial reports as Continuing Operations. All information below has been restated to exclude Brazil, except
Fiscal 2016 First Quarter Financial Results Highlights
(from Continuing Operations, unless otherwise noted)
*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 first quarter of fiscal 2016 continued if not accelerated the momentum
from the second half of last year.
Effective in the first quarter, we
implemented discontinued operations that reflects our decision to exit Brazil. The pending exit from our business unit in
Brazil is making progress and we believe it will be completed within the second quarter of our current fiscal year. The
Company's impressive performance in the first quarter is more evident now that we have removed Brazil from our
consolidated global operations and report results from continuing operations on a year-over-year basis. Upon completion of
the Brazil transaction, we will have essentially completed the turnaround strategy that commenced approximately three (almost
four as the DuPont license terminations was July 2011) years ago. The impact from this turnaround can be seen across the
board in our financial performance metrics, which has been further aided by higher margin sales relating to the Ebola
"In the first quarter of fiscal 2016,
revenues from continuing operations increased 14% from the prior year. Less than 10% of fiscal 2016 first quarter revenues of $24.8
were derived from protective chemical and disposable garment purchased in connection with the Ebola outbreak. Despite the strong
dollar that reduces sales on a reported basis in the U.S. and weakness in the global petrochemical market resulting from lower
oil prices, we delivered organic sales excluding Ebola-related garments which is consistent with our annual growth plans.
"Lakeland's continuing operations
delivered tremendous improvement. Beyond the top line growth, we also benefited from the manufacturing leverage in our business
and disciplined expense management to drive improvements in our efficiencies and profitability. Net income from continuing operations
increased by over 500%, while we also reported significant growth in free cash flow and Adjusted EBITDA.
"With our exit from Brazil nearing
completion, we'll be able to sharpen our focus on organic growth initiatives, including new product introductions, further
development of the global healthcare sector, and otherwise attaining market share in the 10 countries where we have continuing
operations. The organic growth strategies that have been implemented continue to bear positive results, while we remain focused
on expense management, profitability enhancements and cash flow generation. We reiterate that the Company's financial performance
outlook from continuing operations remains very encouraging."
Operating Results as Restated for Discontinued Operations ($ 000)
Reconciliation to GAAP Results
| Quarterly results | Q1 FY16 | Q1 FY15 | ||||||
| Net sales from continuing operations | $ | 24,819 | $ | 21,758 | ||||
| Year over year growth | 14.1 | % | ----- | |||||
| Gross profit from continuing operations | 9,279 | 6,505 | ||||||
| Gross profit % | 37.4 | % | 29.9 | % | ||||
| Operating expenses from continuing operations | 6,059 | 5,647 | ||||||
| Operating expenses as a percentage of sales | 24.4 | % | 26.0 | % | ||||
| Operating income from continuing operations | 3,220 | 858 | ||||||
| Operating income as a percentage of sales | 13.0 | % | 3.9 | % | ||||
| Interest expense from continuing operations | 183 | 486 | ||||||
| Other (income) expense from continuing operations | 15 | (5 | ) | |||||
| Pretax income (loss) from continuing operations | 3,052 | 377 | ||||||
| Income tax expense (benefit) from continuing operations | 892 | 23 | ||||||
| Net income from continuing operations | 2,160 | 354 | ||||||
| Net loss from discontinued operations | (931 | ) | (354 | ) | ||||
| Net income (loss) | $ | 1,229 | $ | ----- | ||||
| Weighted average shares for EPS | 7,062,144 | 5,923,224 | ||||||
| Net income (loss) per share from continuing operations | $ | 0.31 | $ | 0.06 | ||||
| Net loss per share from discontinued operations | $ | (0.14 | ) | $ | (0.06 | ) | ||
| Net income (loss) per share | $ | 0.17 | $ | ----- | ||||
| Operating income from continuing operations | $ | 3,220 | $ | 858 | ||||
| Depreciation and amortization | 246 | 300 | ||||||
| Other (income) expense from continuing operations | 15 | (5 | ) | |||||
| EBITDA from continuing operations | 3,481 | 1,153 | ||||||
| Equity Compensation | 128 | 24 | ||||||
| Inventory reserve in USA and China - discontinued product lines raw material/finished goods | ----- | 300 | ||||||
| PA plant shutdown costs | ----- | 235 | ||||||
| Adjusted EBITDA | 3,609 | 1,712 | ||||||
| Cash paid for taxes (foreign) | 604 | 307 | ||||||
| Capital expenditures | 307 | 89 | ||||||
| Free cash flow | $ | 2,698 | $ | 1,316 |
Financial Results Conference Call
Lakeland will host a conference
call at 4:30 pm eastern today to discuss the Company's fiscal 2016 first quarter 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 888-347-6609 (Domestic) or 412-902-4291 (International) or 855-669-9657
(Canada), Pass Code 10067144.
For a replay of this call through
June 22, 2015, dial 877-344-7529 (Domestic) or 412-317-0088 (International) or 855-669-9658 (Canada), Pass Code 10067144.
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
1,000 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
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 Free Cash Flow all
from continuing operations. The presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in
accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision making and as
a means to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating
results, enhance the overall understanding of past financial performance and future prospects, and allow for greater
transparency with respect to key metrics used by management in its financial and operational decision making. The non-GAAP
financial measures used by the Company in this press release may be different from the methods used by other companies.
For more information on the non-GAAP financial
measures, please see the Reconciliation of GAAP to non-GAAP Financial Measures tables in this press release. These accompanying
tables include details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the
related reconciliations between these financial measures.
LAKELAND INDUSTRIES, INC. AND
CONDENSED CONSOLIDATED BALANCE
2015 and January 31, 2015
| ASSETS | April 30, | January 31, | ||||||
| 2015 | 2015* | |||||||
| Current assets | ($000's) | ($000's) | ||||||
| Cash and cash equivalents | $ | 8,721 | $ | 6,709 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $538 and $484 at April 30, 2015 and January 31, 2015, respectively | 14,769 | 13,277 | ||||||
| Inventories, net of reserves of approximately $2,460 and $2,273at April 30, 2015 and January 2015, respectively | 39,495 | 37,092 | ||||||
| Deferred income taxes | 1,015 | 1,144 | ||||||
| Assets of discontinued operations in Brazil | 6,447 | 6,335 | ||||||
| Prepaid VAT tax | 1,216 | 1,717 | ||||||
| Other current assets | 3,184 | 2,361 | ||||||
| Total current assets | 74,847 | 68,635 | ||||||
| Property and equipment, net | 10,311 | 10,144 | ||||||
| Deferred income tax, noncurrent | 13,101 | 13,101 | ||||||
| Prepaid VAT and other taxes | 173 | 173 | ||||||
| Security deposits | 86 | 113 | ||||||
| Intangibles, prepaid bank fees and other assets, net | 141 | 171 | ||||||
| Goodwill | 871 | 871 | ||||||
| Total assets | $ | 99,530 | $ | 93,208 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 8,512 | $ | 7,763 | ||||
| Accrued compensation and benefits | 854 | 1,120 | ||||||
| Other accrued expenses | 1,798 | 1,462 | ||||||
| Liabilities of discontinued operations in Brazil | 6,692 | 6,574 | ||||||
| Current maturity of long-term debt | 50 | 50 | ||||||
| Current maturity of accrued arbitration award | 1,000 | 1,000 | ||||||
| Short-term borrowing | 3,446 | 2,611 | ||||||
| Borrowings under revolving credit facility | 8,666 | 5,642 | ||||||
| Total current liabilities | 31,018 | 26,222 | ||||||
| Accrued arbitration award, less current portion | 2,637 | 2,870 | ||||||
| Long-term portion of Canada loan | 830 | 800 | ||||||
| VAT taxes payable long term | 130 | 60 | ||||||
| Total liabilities | 34,615 | 29,952 | ||||||
| Stockholders' equity | ||||||||
| Preferred stock, $.01 par; authorized 1,500,000 shares (none issued) | ----- | ----- | ||||||
| Common stock, $.01 par; authorized 10,000,000 shares, issued 7,428,220 and 7,414,037; outstanding 7,071,779 and 7,057,596 at April 30, 2015 and January 31, 2015 respectively | 74 | 74 | ||||||
| Treasury stock, at cost; 356,441 shares at April 30, 2015 and January 31, 2015 | (3,352 | ) | (3,352 | ) | ||||
| Additional paid-in capital | 64,680 | 64,594 | ||||||
| Retained earnings (accumulated deficit) | 5,883 | 4,654 | ||||||
| Accumulated other comprehensive loss | (2,370 | ) | (2,714 | ) | ||||
| Total stockholders' equity | 64,915 | 63,256 | ||||||
| Total liabilities and stockholders' equity | $ | 99,530 | $ | 93,208 |
* Restated for discontinued operations
Numbers may not add due to rounding