Full Press Release Details
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(631) 981-9700 - www.lakeland.com
Industries, Inc. Reports Fiscal 2020 Second Quarter Financial
Vietnam Successfully Expanded to Largest Manufacturing Operation,
Mexico and Latin America Providing Diversification and Global Trade
NY September 9, 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
second quarter ended July 31, 2019.
Fiscal 2020 Second Quarter Financial Results Highlights and Recent
Q2FY20 of $27.5 million, compared with Q2FY19 of $25.6 million and
Q1FY20 of $24.7 million
Q2FY20 of $10.4 million, compared with Q2FY19 of $9.2 million and
Q1FY20 of $7.6 million
percentage of net sales in Q2FY20 was 37.9%, compared to 35.7% in
Q2FY19 and 30.6% in Q1FY20
of $7.8 million in Q2FY20, compared with $7.5 million in Q2FY19 and
$7.9 million in Q1FY20
$2.6 million in Q2FY20 increased from $1.6 million in Q2FY19 and an
operating loss of $(0.3) million in Q1FY20
million in Q2FY20, compared with net income of $1.0 million in
Q2FY19 and a net loss of $(465,000) in Q1FY20
before interest, taxes, depreciation and amortization (EBITDA)* of
$2.6 million, as compared to $2.1 million in Q2FY19 and $269,000 in
expenditures for fiscal 2020 second quarter were $0.4 million as
compared with approximately $1.0 million in the fiscal 2019
million at end of Q2FY20, down from $12.8 million at end of fiscal
2019, primarily resulting from increased inventories which reflect
higher overall sales volume, the scaling up of manufacturing
activities in Vietnam, and fulfilment of orders that had been
backlogged due to prior delays in connection with ERP
$1,566,000 at end of Q2FY20, up from $1,319,000 at end of fiscal
repurchased during the three-month period ended July 31,
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, We delivered solid financial and
operating performance progress in the second quarter of fiscal
2020. Quarterly revenues reached the highest level in Company
history due in large part to filling backlog orders when not
including sales relating to emergency demand. Sales increased
across a wide array of product groups, including disposable
garments, chemical suits, fire retardant products and high
visibility apparel. These products can be made from several of our
manufacturing locations around world with diversified supply chains
to support our low-cost production practices. On a geographic
basis, there was growth in the Americas, while Europe and China
were negatively impacted by currencies as reported in US dollars.
The strong US dollar against certain foreign currencies reduced
consolidated revenues by approximately 3% or more. Canada, China,
and Europe have all provided currency headwinds to
$500,000 in revenues were recorded in the second quarter of fiscal
2020 for orders that had been delayed due to our enterprise
resource planning ( ERP ) implementation. New bookings
in the second quarter of $16.3 million increased 25% from the prior
year period and by nearly 7% from the first quarter. Backlog at
July 31, 2019 was $5.9 million, which increased from $5.4 million
at the end of the first quarter due to increased bookings during
are experiencing a more normalized operating environment due to the
confluence of two strategic imperatives which are gaining
meaningful traction. The first of these relates to the ERP
implementation which impacts our North American business that
represents roughly half of our revenues. Products sold into this
region are generally made in our manufacturing locations in Mexico,
China, India, the US and, increasingly, Vietnam. The ERP system is
finally beginning to get on track and we are beginning to derive
benefits in key performance indicators, such as order processing
and delivery, raw material management, and effective pricing and
second important operational objective was the expansion of our
manufacturing facility in Vietnam. While many manufacturers around
the world are contemplating a partial or complete exit from China
in light of the ongoing trade negotiations with the US government,
Lakeland's highly experienced management team further
extended the Company's global manufacturing to include
Vietnam. This was not done as a response to tariff wars but instead
was a matter of vigilantly managing our cost structure. Simply put,
China is far more expensive for manufacturing today as compared to
23-plus years ago when we first arrived there. We have a solid base
of sales domestically in China along with both manufacturing and
regional Southeast Asian sales which will be maintained and grown
as appropriate. Our China operations currently has a manufacturing
team of nearly 540, down from as high as 800 just a few years
years into executing our planned expansion into Vietnam, we now
have a manufacturing team of over 750 in this location. Our
manufacturing expansion into Vietnam is now essentially complete
including capital equipment purchases, investments in
property and plant, and hiring of staff and related organizational
expense additions while efficiencies are improving, we are
not expecting to be fully maximized until the second half of fiscal
2021. This gives us ample runway for continued growth in our
largest operating market, the US, where import tariffs are not
applicable, as well as other international markets.
aforementioned initiatives are aiding in our revenue growth and
profitability. Gross margin in the fiscal 2020 second quarter was
nearly 38%, an improvement sequentially from the first quarter and
from the year-ago period when we have seasonally stronger sales.