Full Press Release Details
Industries, Inc. Reports Fiscal 2019 Second Quarter Financial
NY September 10, 2018 -- 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 2019
second quarter ended July 31, 2018.
Fiscal 2019 Second Quarter Financial Results Highlights and Recent
of $25.6 million increased 7.1% from $23.9 million in
2Q19 of $9.2 million increased 5.3% from $8.7 million in
of $7.5 million in 2Q19 increased from $6.5 million in 2Q18 for
continued investment in growth and profitability enhancements
including one-time items relating to IT infrastructure, and
expansion in the sales force.
million in 2Q19 decreased from $1.8 million in 2Q18
million at the end of 2Q19 decreased from $15.8 million at the
beginning of the fiscal year due to increased inventory purchases,
capital expenditures for growth initiatives. and debt
reduced by 12.2% to $1.5 million at end 2Q19 from $1.7 million at
the beginning of the fiscal year
equity at the end of 2Q19 increased by 3.1% to $85.4 million from
$82.8 million at the beginning of fiscal year
digital transformation and global diversification
installation and IT infrastructure improvements
distribution platform
manufacturing ramping up; India next
Management's Comments
J. Ryan, President and Chief Executive Officer of Lakeland
Industries, stated, Second quarter fiscal 2019 sales were
7.1% higher than the year earlier period, which is a higher rate of
growth than the year-over-year improvement of 6.0% for the first
quarter. Reported revenue growth for the second quarter of this
year is even more impressive considering that we had no revenue for
three days from our US operations, representing roughly half of our
consolidated activities, due to the implementation of the initial
stage of an ERP system.
ERP implementation is part of a larger digital transformation that
is expected to improve our long term financial performance and
competitiveness on a global scale. This transformation includes
initiatives to generate higher sales from multiple product
categories and customer segments, improve gross margins, drive
operating leverage and yield sustainably higher long term financial
performance and management effectiveness. In the immediate term of
the second quarter and to a lesser degree in the third and fourth
quarters of fiscal 2019, the investments and cut-over adjustments
for the new system implemented in the US have negatively impacted
our financial results at the gross margin level as well as elevated
operating expenses. In the near future we also will be deploying
the ERP systems in our other major operations
component of our digital transformation is an e-commerce strategy
with sales and distribution on Amazon.com. This is an important
extension to our plans for long term revenue growth and customer
diversification, while potentially providing contributions to
margin enhancements and inventory management benefits. Our
e-commerce strategy utilizes Amazon.com as the cornerstone of our
cloud-based platform for online distribution, and serves as an
ideal complement to our longstanding practices of sales and
marketing on a business-to-business basis and through third party
distributors. We are in effect leveraging alternative distribution
channels, principally with Amazon, for retail and small business
customer sales. We began distributing a limited set of products
earlier this year on Amazon.com in the US. Distribution on the
Amazon platform will be rolled out in multiple subsidiaries
throughout our fiscal year, including Canada with a limited number
of products during the fiscal second quarter. Most recently, we
initiated sales on Amazon in Mexico. Our next launches on Amazon
will take place in Australia and Europe.
the board we are making solid progress as revenues increased in our
domestic and international operations and all major country
operations were profitable in the second quarter. An important
development in the second quarter was the ramping up and
commencement of operations of our new manufacturing facility in
Vietnam. Since the first quarter, we have nearly doubled the
workforce at this facility which had a staff of approximately 350
at July 31, 2018. Manufacturing in Vietnam should provide a lower
cost basis as compared to China and also presents more favorable
trade conditions for our sales into Asia-Pacific, Europe, Russia,
South America and North America. Approximately 70% of our $1.0
million in capital expenditures in the second quarter was for
equipment in Vietnam. We also have begun investing in India which
is expected to become a very large manufacturing hub for the
way through fiscal 2019, we have been incredibly busy and made
significant headway on all strategic fronts outlined during our
capital raise in August 2017. In addition, our success is in large
part drawn from our management team and we were pleased to have
strengthened our leadership with the promotion of Charlie Roberson
to the position of Chief Operating Officer in July 2018. With a
larger workforce and higher overall increased operating expenses
which included operating expenses that were incurred in the US as
part of the new system deployments along with our investments in
machinery, facilities, and the sales force, we are rapidly
implementing our long term growth strategies and are well
positioned to further improve top and bottom line
Fiscal 2019 Second Quarter Financial Results
sales increased to $25.6 million for the three months ended July
31, 2018 compared to $23.9 million for the three months ended July
31, 2017, an increase of 7.1%. On a consolidated basis for the
second quarter of fiscal 2019, domestic sales were $13.4 million or
52.2% of total revenues and international sales were $12.3 million
or 47.8% of total revenues. This compares with domestic sales of