Full Press Release Details
3555 Veterans Memorial Highway, Suite C
Ronkonkoma, NY 11779
(631) 981-9700 - www.lakeland.com
Industries, Inc. Reports Fiscal 2019 Fourth Quarter and Year End
NY April 16, 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 2019
fourth quarter and year ended January 31, 2019.
Fiscal 2019 Fourth Quarter Financial Results Highlights and Recent
of $25.0 million, compared with 3Q19 of $24.0 million and 4Q18 of
4Q19 of $6.9 million, compared with 3Q19 of $8.3 million and 4Q18
percentage of net sales in 4Q19 was 27.7%, compared to 34.6% in
3Q19 and 39.4% in 4Q18
of $8.4 million in 4Q19 were down from $8.7 million in 4Q18 but up
from $7.3 million in 3Q19 due primarily to non-recurring
profit/margin and operating expenses were negatively impacted by
enterprise resource planning ( ERP )
charge and associated fees of $1.3 million included professional
fees and litigation reserves due to an accrual associated with
expected future labor claims in Brazil and a non-cash income tax
expense of $0.6 million in connection with the 2017 Tax Cuts and
Jobs Act ( Tax Act ) associated with the Global
Intangible Low-taxed Income ( GILTI )
$(1.9) million or $(0.24) per basic share, compared with net loss
of $(4.9) million or $(0.61) per basic share in 4Q18 and net income
of $0.5 million or $0.06 per basic share in 3Q19
fiscal 2019 of $99.0 million, up from $96.0 million in fiscal
international markets though experiencing significant pricing
pressure and concerns over trade negotiations; US sales negatively
impacted by delivery challenges associated with the ERP
implementation and some delays with new product
fiscal 2019 of $33.9 million, as compared with $36.2 million in
percentage of net sales in fiscal 2019 was 34.2%, down from 37.7%
of $30.3 million in fiscal 2019 includes $0.4 million relating to
additional costs for ERP implementation and $1.1 million for future
litigation reserve due to an accrual associated with labor claims
in Brazil, up from $27.7 million in fiscal 2018. Operating expenses
reflect continued investment to support expanded reach into
existing and new markets as well as product
including costs for ERP implementation, professional fees and
litigation reserve for expected future litigation associated with
labor claims in Brazil, as a percentage of consolidated sales in
fiscal 2019 were approximately 30.6% in FY19, as compared to 28.9%
fiscal 2019 of $1.5 million or $0.18 per basic shares compares with
fiscal 2018 net income of $0.4 million or $0.06 per basic share,
with each year including material one-time items and non-cash
expenditures for fiscal 2019 were $3.1, as compared with $0.9
million in fiscal 2018
million at the end of fiscal 2019 was up from $11.7 million at end
of 3Q19 but decreased from $15.8 million at the beginning of the
fiscal year due to capital expenditures for growth
million at end of fiscal 2019, down from $1.5 million at end of
3Q19 and $1.7 million at the beginning of the fiscal
equity at the end of fiscal 2019 increased by $0.4 million to $83.2
million from $82.8 million at the beginning of fiscal
spent to acquire 105,648 shares as part of the Company's $2.5
million stock repurchase program which was approved on July 19,
investments in digital transformation and global
installation and IT infrastructure improvements
manufacturing ramping up and pilot India facility
websites for nine global locations
development targeting higher margin niche markets
Management's Comments
J. Ryan, President and Chief Executive Officer of Lakeland
Industries, stated, Fiscal 2019 was a year of total
restructuring and significant development on a global scale with
our progress on a consolidated basis marred most notably by the
challenging costs and operational issues in connection with the
implementation of an ERP system. Total revenues increased for a
second year in a row driven by strength in all of our international
operations, while the ERP system in the US led to lower domestic
sales due to order processing and delivery delays. We ended the year
with the highest level of revenues since 2011 excluding sales
relating to emergency situations and began fiscal 2020 with a
consolidated order backlog of $10.5 million.
ERP installation, which is being deployed in the US where we have
about half of our total revenues, led to significant additional,
mostly non-recurring expenses in fiscal 2019 as well as a
degradation of margins due to associated delays and operational
inefficiencies. We expect the domestic installation to be completed
by mid-summer 2019, with full optimization to realize all of its
intended benefits contributing favorably to our financial
performance by January 2020. Beyond this critical program, we have
been addressing our long-term cost structure with the buildout of
our new manufacturing facilities in Vietnam and India. A new pilot
facility has been created in India, while Vietnam has been our
primary focus for new production capacity. In Vietnam, we invested
nearly $2.0 million in equipment and added in excess of 500
manufacturing employees in fiscal 2019. By the end of the fiscal
year 2021, we expect India to be equal to China in manufacturing
a result of the initiatives for adding lower cost manufacturing
capacity and improving productivity with the ERP system, we
experienced headwinds for our earnings of approximately $4 million
in the most recently completed fiscal year. This includes
additional inventory costs, temporary staff, lost or delayed
revenues and the associated impact to margins, and increased
salaries and other overhead for new manufacturing facilities that
are not yet fully efficient. Looking ahead to fiscal 2020, we