Lakeland Industries, Inc. (LAKE) on Q1 2022 Results - Earnings Call Transcript
Operator: Before we begin, parties are reminded that statements made during this call contain forward-looking information within the meanings of the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements are all statements other than statements of historical facts, which reflect management's expectations regarding future events and operating performance and speak only as of today, June 9, 2021. Forward-looking statements are based on current assumptions and analysis made by the company in light of its experience and its perception of historical trends, current conditions, including business affairs, pertaining to the COVID-19 pandemic, expect future developments and other factors that believes are appropriate under circumstances. These statements are subject to a number of assumptions, risks, and uncertainties that are factored into the company's filings with the Securities and Exchange Commission; general economic and business conditions, the business opportunities that may be presented to you and pursued by the company, changes in law or regulations and other factors, many of which are beyond the control of the company. Charles D. Roberson: Thank you and good afternoon. I'm joined here today by Lakeland's Chief Financial Officer, Alan Diller. We appreciate you taking the time to join our fiscal 2022 first quarter financial results conference call. After a tremendous fiscal 2021, the sustainability of our financial performance was on display as we delivered very strong results in the first quarter of fiscal 2022 ended April 30, 2021. We're now beginning to see the impact of the improvements made to our business over the past year, as COVID-19 demand subsides. Business process improvements accelerated due to COVID-19 and we believe that our first quarter fiscal year 2022 results demonstrate the durability and magnitude of these improvements. In fact, while there's no question that COVID-19 pandemic had a positive impact on our performance through the entirety of fiscal year 2021 and into the first quarter of fiscal year 2022, we believe it has also largely masked the value we derive from the significant operational and process improvements we have made. Only now in the second consecutive quarter of declining pandemic sales does the significance of our improvements become apparent. Through my formal remarks on today's conference call, I'd like to provide some perspective on our progress and strategy for our post-COVID business environment. Later, Allen will review our financial results for the quarter and related developments in more detail. Prior to the onset of the global pandemic, we began a business transformation and put in place a five-year growth plan that assumed successful implementation of our development plans. COVID-19 accelerated the pace of progress by approximately one year and in the process elevated our cash balance to over $60 million today. We expect continued free cash flow generation for the foreseeable future, which factors in, the elimination of all COVID-19 demand as early as the end of the present quarter. The critical elements of our plan include, the strengthening of our leadership team, investing in capacity expansion in higher margin product development and focusing on profit enhancement initiatives led by a new data centric approach to planning and supporting our addressable markets. Allen Dillard: Thank you, Charlie. From a financial results perspective, fiscal 2022 first quarter showed consistency based on the progress made to improve our performance as key measures, track to expectations and our balance sheet strength improved. For each of the past five quarters our revenues have been in excess of $34 million. We are indeed winding down from COVID related sales and are benefiting from a strong resurgence in traditional industrial demand, while we also tap into certain opportunities in the healthcare segment for non-pandemic related needs that historically we would not have attempted to enter. For all of fiscal 2021 COVID related sales accounted for 30% to 35% of consolidated revenues. In Q1 2022, we estimate 13% of sales were related to COVID. As Charlie mentioned, we expect to continue to see decreases in this demand in the current quarter, since most regions have sufficient supply, except India, which is still experiencing outbreaks resulting in demand that may outpace the traditional availability of PPE from the healthcare supply chain. We reiterate that our fiscal year 2022 revenue will not decline proportionally to declines in COVID-19 sales by focusing on the industrial market early on and throughout the pandemic, we believe we have set the stage to emerge post COVID-19 well-positioned with a larger book of business that targets a much larger and faster growing overall market. Our first quarter results indicate our successful execution of this strategy thus far. Due to the scaling back in most major markets for COVID-19 related product. Our first quarter sales for disposables and chemicals were down 30% as compared with our first quarter 2021 sales, which represented our highest level of COVID sales. As we have already rapidly emerge from the COVID impacted sales periods, one of our more recent garment lines known as high-performance ware grew last year and was up nearly 200% in the first quarter of fiscal 2022, as compared to the prior year period. At nearly 900,000 in the first quarter 2022 sales, revenues were more than half of all high-performance wear sales in fiscal 2021, $1.7 million, and fiscal 2020, $1.6 million. Operator: Thank you. Our first question comes from Alex Fuhrman with Craig-Hallum Capital Group. Please state your question. Alex Fuhrman: Great. Guys thanks for taking my question and congratulations on a very nice start to the year. You know, wanted to ask about the breakdown of revenue between the COVID and the non-COVID related business. It sounds like you had about $30 million of non-COVID related revenue here in the first quarter. Can we be thinking about that as sort of the baseline that you're going to be growing off of as industrial production starts to pick up? Or is it maybe a little bit higher as customers start making more non-COVID purchases and you start to bring some SKUs back? Charles D. Roberson: Alex, I don't think that we have seen the economic recovery in the industrial market come to fruition yet. So I don't think that, 30 million is the new baseline industrial sales number for us. It will be a little bit higher than that. Alex Fuhrman: Okay. That's helpful, thanks. And then on the M&A front, it looks like you guys made a great hire bringing Josh onboard. Can you talk a little bit more about what you're seeing out there in terms of opportunities? Are there any particular product categories or distribution channels that you have in mind that you're targeting? Charles D. Roberson: We're not quite that far down the road with Josh yet, Alex. Right now we're still making sure that we have our own objectives and the potential benefits that we would be interested in acquiring. We're still in that defining process. He's also working to put in place the processes and procedures internally that we'll use for evaluation. That said we have seen some opportunities come our way and we're starting a funnel already. We are aware of the challenges that an acquisition brings given our current multiple and what that might mean for us. So we are quite cognizant of the fact that we need to look for acquisitions that are going to be synergistic as well. And that's kind of what we're working for as to how we define those synergies and where they might be. Alex Fuhrman: Okay. Thanks. That makes sense. And then, I'd love to ask about the 500 new customers that you brought on in the past year. I mean, it sounds like you're on a path to retain something close to 80% of those customers. Can you give us a little bit more sense of who these new customers are? Are there any particular industries that they gravitate or cater towards, and then just thinking about the COVID demand that you saw last year and the $4 million and change of COVID demand that you saw in Q1, how much of that demand were coming from those 500 new customers? Charles D. Roberson: Quantifying that because of our lack of transparency is pretty difficult. We estimated earlier at the end of Q4, I believe we – Allen, we put their sales revenue at between $10 million and $12 million? Allen Dillard: That's correct. Charles D. Roberson: I can't remember exactly whether it was $10 million or $12 million, but it was in that range. As to what kind of customers they are. They largely resemble our existing customer base Alex. We’ve had our sales team focused on taking orders for industrial applications before we took COVID applications. So they're not very readily distinguishable. What I will say about them is, 75% of those are only order of that are international new customers. And that's reflected of course in our revenue distribution, both in domestic and international sales. So that's also why we keep referring to our increased market penetration internationally as that's where we were most successful. Alex Fuhrman: Okay. That's really helpful. Thanks. Thanks guys. Charles D. Roberson: Thank you, sir. Operator: Thank you. And our next question comes from Cam Johnson with Phoenix Capital Management. Please state your question. Unidentified Analyst: Hi, thanks for taking the call. Can you discuss the newer products in the portfolio, what they're made from, where are the raw materials sourced from? And talk a little bit about the gross margin profile and how it relates to the rest of the business? Charles D. Roberson: All right. I can talk about the raw materials pretty readily as there's no issues with competitors there. I don't want to get too deep into details on our margins other than to say that they typically run about 10% to 15% above our target margin. So, which is, we've said repeatedly, we expect to emerge from COVID with a gross margin that begins with four probably in the lower half of the 40%. As for the fabrics, they are actually laminated constructions. The raw materials for which it's a – polyethylene and microporous film on spun-bonded polypropylene sourced in China, but easily sources in India or anywhere in the world. These are products that are largely used by the diaper business. So anywhere they have disposable diapers, we can source it. The barrier to entry the hard part of this market is validation of your clean manufacturing process and product sterility that's a minimum of a six month long process and requires that you conform to statistical process control, which means you have to make a full run. Let it age for three months to grow bioburden and you may fail it, and if you do, you've got a whole run of trash. Unidentified Analyst: Okay. Thanks. One another question I had is, is can you discuss the near shoring strategies you mentioned and the benefits it brings to your competitive positioning and cost basis? Charles D. Roberson: Sure. We are watching the U.S. Congress very closely. The U.S. stockpiling efforts have gone – for lack of a better word have gone dormant for the last month – six weeks that has been predicated by the rejection of 25 million of 26 million garment source for the stockpile that didn't meet the AAMI Standards for isolation gowns. As a result, they're not rushing out to replace those products right now. Congress is in the process of writing what it means – what made in, how made in USA is defined or the USA PPE Act. All of the variations of that legislation that we've seen to date starts off with at least a Berry Amendment or Made in USA if U.S. grown or sourced materials. And then provides exceptions, should pricing quality or availability not be a problem for you to go to a Tier 2, which is a foreign Made of U.S. product tier and failing that if they still have unmet demand, it is foreign made of foreign raw materials. So what we're looking to do is to come in where we can enter into that Tier 2 level, which would be foreign made of U.S. raw materials, which makes manufacturing in the Caribbean base in Canada or Mexico very attractive. We are not looking. We do not believe that we can be successful long-term manufacturing in the United States, while initial stockpiling orders will be huge. They will only turn 20% of that stockpile every year. So in year two, your volume falls to 20% of that level, and that's just not sustainable for a continuing operation. And it is highly unlikely that the private sector will pay the prices that the government is going to have to pay to get Made in USA. Unidentified Analyst: Thank you. Operator: Thank you. There are no further questions at this time. I'll turn it back to management for closing remarks. Charles D. Roberson: Okay. Thank you. We appreciate your participation in Lakeland's fiscal 2022 first quarter financial results conference call. As we look ahead to the balance of fiscal 2022, we continue to be well-positioned as the new standard of excellence for PPE manufacturers, anywhere in the world. Within even stronger balance sheet from the beginning of the year, and an outlook for continued free cash flow for the foreseeable future. Our data centric, operating culture is enabling sustainable financial performance to unlock additional growth opportunities. We're excited for what lies ahead and look forward to sharing our story at the Sidoti Virtual Investor Conference on June the 24th. Thank you again for joining us on today's conference call, and have a nice day. Operator: Thank you. And with that this concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation, and have a wonderful day.
Lakeland Industries, Inc. (NASDAQ:LAKE) Reports Fiscal Q1 2026 Financial Results
- Lakeland Industries, Inc. (NASDAQ:LAKE) achieved record net sales of $46.7 million, a 29% increase year-over-year, driven by a significant rise in Fire Services products.
- Despite facing challenges in Latin America and Canada, the company remains optimistic about future growth in these regions as tariff uncertainties diminish.
- Lakeland expects fiscal 2026 revenue to range between $210 million and $220 million, with adjusted EBITDA expected to be at the lower end of $24 million to $29 million.
Lakeland Industries, Inc. (NASDAQ:LAKE) is a prominent player in the protective clothing and apparel industry. The company recently reported a notable increase in its fiscal first-quarter 2026 financial results, achieving record net sales of $46.7 million, a 29% rise from the previous year. This growth was largely fueled by a 100% increase in Fire Services products, which now account for 45% of total revenue.
U.S. net sales climbed by 42% to $22.5 million, while European sales saw a remarkable 102% surge to $12.1 million. However, Lakeland faced challenges in Latin America and Canada due to shipment timing and tariff-related delays, impacting margins. Despite these hurdles, the company remains optimistic about future growth in these regions as tariff uncertainties diminish.
Lakeland's President and CEO, Jim Jenkins, highlighted the company's focus on overcoming tariff challenges and expanding revenue in fire services and industrial verticals. The company has completed four acquisitions, enhancing its product lines and global market reach. Financially, Lakeland reported a gross profit of $15.6 million, a decrease from the previous year, attributed to geographic revenue mix and higher manufacturing costs.
Operating expenses increased due to acquisitions and other costs, resulting in an operating loss of $4.6 million. The net loss for the quarter was $3.9 million, compared to a net income of $1.7 million in the prior year. Despite these setbacks, Lakeland expects fiscal 2026 revenue to range between $210 million and $220 million, with adjusted EBITDA excluding foreign exchange expected to be at the lower end of $24 million to $29 million.
Lake Street maintained its "Buy" grade for Lakeland, although the action is currently on hold, as highlighted by Lake Street. The stock price was $15.07 at the time of this announcement, with a revised price target lowered from $30 to $26. Lakeland's CFO, Roger Shannon, noted that the company's acquisition strategy and operational improvements are expected to drive accelerated growth over the next few years, focusing on expanding EBITDA margins.
Lakeland Industries, Inc. (NASDAQ: LAKE) Overview
- Lakeland Industries' stock target price remains stable at $28, indicating a consistent outlook from analysts.
- The acquisition of Veridian is expected to contribute an additional $21 million in annual revenue, aligning with Lakeland's expansion strategy.
- Despite a significant revenue increase, Lakeland's earnings per share fell short of expectations, reporting at $0.01 compared to the Zacks Consensus Estimate of $0.40.
Lakeland Industries, Inc. (NASDAQ: LAKE) is a global leader in the manufacturing and sale of industrial protective clothing and accessories. Their diverse product line includes disposable protective clothing, chemical protective suits, firefighting apparel, and high visibility clothing. These products serve a wide range of industries such as oil, chemical, automotive, and construction, as well as governmental agencies.
The stock target price for Lakeland has remained stable, with the average price target holding at $28 over the last month and quarter, up slightly from $27 a year ago. This stability indicates a consistent outlook from analysts regarding the company's performance and growth potential. D.A. Davidson has set a price target of $28, reflecting their expectations for the stock's future performance.
Lakeland's recent acquisition of Veridian, a U.S.-based company known for firefighter protective apparel, is a strategic move to expand its global fire services portfolio. This acquisition, valued at $25 million and financed through a revolving credit facility with Bank of America, is expected to contribute an additional $21 million in annual revenue. This aligns with Lakeland's strategy to enhance its offerings in the protective clothing sector.
Despite a significant 44.5% increase in fiscal third-quarter 2025 revenues, driven by strong international operations, Lakeland's earnings fell short of expectations. The company reported earnings per share of $0.01, below the Zacks Consensus Estimate of $0.40, and a decline from $0.34 per share in the same quarter last year. This earnings miss has not altered the price target set by D.A. Davidson, which remains at $28.
Lakeland Industries has experienced a notable stock price increase of approximately 70% over the past year, rising from $15.22 to $26.10, before settling at $22.64. This growth is attributed to revenue growth and operational efficiency. However, the company faces challenges with profitability, leading to a cautious "hold" rating from analysts. Despite these challenges, management remains optimistic about meeting fiscal year 2025 projections, which could potentially lead to an upgrade in the company's rating.
Lakeland Industries, Inc. (NASDAQ: LAKE) Overview
- Lakeland Industries' stock target price remains stable at $28, indicating a consistent outlook from analysts.
- The acquisition of Veridian is expected to contribute an additional $21 million in annual revenue, aligning with Lakeland's expansion strategy.
- Despite a significant revenue increase, Lakeland's earnings per share fell short of expectations, reporting at $0.01 compared to the Zacks Consensus Estimate of $0.40.
Lakeland Industries, Inc. (NASDAQ: LAKE) is a global leader in the manufacturing and sale of industrial protective clothing and accessories. Their diverse product line includes disposable protective clothing, chemical protective suits, firefighting apparel, and high visibility clothing. These products serve a wide range of industries such as oil, chemical, automotive, and construction, as well as governmental agencies.
The stock target price for Lakeland has remained stable, with the average price target holding at $28 over the last month and quarter, up slightly from $27 a year ago. This stability indicates a consistent outlook from analysts regarding the company's performance and growth potential. D.A. Davidson has set a price target of $28, reflecting their expectations for the stock's future performance.
Lakeland's recent acquisition of Veridian, a U.S.-based company known for firefighter protective apparel, is a strategic move to expand its global fire services portfolio. This acquisition, valued at $25 million and financed through a revolving credit facility with Bank of America, is expected to contribute an additional $21 million in annual revenue. This aligns with Lakeland's strategy to enhance its offerings in the protective clothing sector.
Despite a significant 44.5% increase in fiscal third-quarter 2025 revenues, driven by strong international operations, Lakeland's earnings fell short of expectations. The company reported earnings per share of $0.01, below the Zacks Consensus Estimate of $0.40, and a decline from $0.34 per share in the same quarter last year. This earnings miss has not altered the price target set by D.A. Davidson, which remains at $28.
Lakeland Industries has experienced a notable stock price increase of approximately 70% over the past year, rising from $15.22 to $26.10, before settling at $22.64. This growth is attributed to revenue growth and operational efficiency. However, the company faces challenges with profitability, leading to a cautious "hold" rating from analysts. Despite these challenges, management remains optimistic about meeting fiscal year 2025 projections, which could potentially lead to an upgrade in the company's rating.
Lakeland Industries, Inc. (NASDAQ:LAKE) Raises $46 Million in Public Offering and Sees Insider Confidence
- Lakeland Industries, Inc. (NASDAQ:LAKE) successfully completed a public offering, raising approximately $46 million.
- CFO Shannon Roger D's purchase of 1,000 shares signals insider confidence in the company's future.
- Financial metrics present a mixed picture, with a strong liquidity position but challenges in profitability and cash flow generation.
Lakeland Industries, Inc. (NASDAQ:LAKE), a leading provider of protective clothing and safety gear, trading under the name Lakeland Fire + Safety, recently announced the completion of a public offering of common stock. The company raised approximately $46 million in gross proceeds through the offering of 2,093,000 shares at $22.00 each, with significant participation from institutional investors and company insiders.
On January 24, 2025, Shannon Roger D, the CFO of LAKE, demonstrated his belief in the company's potential by purchasing 1,000 shares at $23.23 per share, thereby increasing his total holdings to 36,839 shares. This insider purchase is a strong indicator of confidence in the company's future prospects, despite its current financial challenges. The stock offering, managed by Roth Capital Partners, Lake Street Capital Markets, LLC, and Maxim Group LLC, further indicates robust investor interest.
LAKE's financial metrics reveal a mixed picture. The price-to-sales ratio of 1.11 suggests that investors are paying $1.11 for every dollar of sales, while the enterprise value to sales ratio of 1.31 accounts for the company's debt and cash on hand. The debt-to-equity ratio of 0.37 indicates a low level of debt, and a current ratio of 4.23 signals strong liquidity. Additionally, the enterprise value to operating cash flow ratio of -21.29 underscores difficulties in generating positive cash flow from operations, as highlighted by the company's financial data.
Lakeland Industries, Inc. (NASDAQ:LAKE) Raises $46 Million in Public Offering and Sees Insider Confidence
- Lakeland Industries, Inc. (NASDAQ:LAKE) successfully completed a public offering, raising approximately $46 million.
- CFO Shannon Roger D's purchase of 1,000 shares signals insider confidence in the company's future.
- Financial metrics present a mixed picture, with a strong liquidity position but challenges in profitability and cash flow generation.
Lakeland Industries, Inc. (NASDAQ:LAKE), a leading provider of protective clothing and safety gear, trading under the name Lakeland Fire + Safety, recently announced the completion of a public offering of common stock. The company raised approximately $46 million in gross proceeds through the offering of 2,093,000 shares at $22.00 each, with significant participation from institutional investors and company insiders.
On January 24, 2025, Shannon Roger D, the CFO of LAKE, demonstrated his belief in the company's potential by purchasing 1,000 shares at $23.23 per share, thereby increasing his total holdings to 36,839 shares. This insider purchase is a strong indicator of confidence in the company's future prospects, despite its current financial challenges. The stock offering, managed by Roth Capital Partners, Lake Street Capital Markets, LLC, and Maxim Group LLC, further indicates robust investor interest.
LAKE's financial metrics reveal a mixed picture. The price-to-sales ratio of 1.11 suggests that investors are paying $1.11 for every dollar of sales, while the enterprise value to sales ratio of 1.31 accounts for the company's debt and cash on hand. The debt-to-equity ratio of 0.37 indicates a low level of debt, and a current ratio of 4.23 signals strong liquidity. Additionally, the enterprise value to operating cash flow ratio of -21.29 underscores difficulties in generating positive cash flow from operations, as highlighted by the company's financial data.
Lakeland Industries, Inc. (NASDAQ:LAKE) Financial Overview and Market Position
- Earnings Per Share (EPS) of $0.38 met the estimated EPS, showcasing Lakeland's ability to meet financial expectations.
- The stock price has seen a significant increase of approximately 70% over the past year, indicating strong market confidence and potential for further appreciation.
- Lakeland exhibits a strong financial health with a low debt-to-equity ratio of 0.24 and a current ratio of 4.24, suggesting good liquidity and conservative debt usage.
Lakeland Industries, Inc. (NASDAQ:LAKE) is a key player in the global market for protective clothing and apparel, serving industries such as healthcare and emergency response. The company operates in North America, China, India, and Brazil, providing safety garments essential for industrial markets. Lakeland's competitors include other safety apparel manufacturers, but its focus on operational efficiency and revenue growth sets it apart.
On December 5, 2024, Lakeland reported earnings per share (EPS) of $0.38, meeting the estimated EPS of $0.38. The company also achieved actual revenue of $44.3 million, perfectly aligning with the forecasted revenue. This consistency in meeting financial expectations reflects Lakeland's stable performance and effective management strategies.
Lakeland's stock has seen a significant price increase of approximately 70% over the past year, rising from $15.22 to $26.10, before settling at $22.64. This growth is largely due to the company's revenue growth and operational efficiency. The investment thesis for Lakeland is based on its addressable market and continued revenue growth, indicating potential for further stock appreciation.
The company's financial metrics provide additional insights into its performance. Lakeland has a price-to-earnings (P/E) ratio of 88.94, suggesting high market expectations for future earnings. Its price-to-sales ratio of 1.24 and enterprise value to sales ratio of 1.38 indicate a reasonable market valuation relative to its sales. The enterprise value to operating cash flow ratio of 64.16 highlights the company's valuation in relation to its cash flow from operations.
Lakeland's financial health is further supported by a low debt-to-equity ratio of 0.24, indicating conservative debt usage. The current ratio of 4.24 suggests strong liquidity, with the company well-positioned to cover its short-term liabilities. These financial metrics, combined with the company's operational efficiency, underscore Lakeland's potential for continued growth and stability in the market.
Lakeland Industries, Inc. (NASDAQ:LAKE) Financial Overview and Market Position
- Earnings Per Share (EPS) of $0.38 met the estimated EPS, showcasing Lakeland's ability to meet financial expectations.
- The stock price has seen a significant increase of approximately 70% over the past year, indicating strong market confidence and potential for further appreciation.
- Lakeland exhibits a strong financial health with a low debt-to-equity ratio of 0.24 and a current ratio of 4.24, suggesting good liquidity and conservative debt usage.
Lakeland Industries, Inc. (NASDAQ:LAKE) is a key player in the global market for protective clothing and apparel, serving industries such as healthcare and emergency response. The company operates in North America, China, India, and Brazil, providing safety garments essential for industrial markets. Lakeland's competitors include other safety apparel manufacturers, but its focus on operational efficiency and revenue growth sets it apart.
On December 5, 2024, Lakeland reported earnings per share (EPS) of $0.38, meeting the estimated EPS of $0.38. The company also achieved actual revenue of $44.3 million, perfectly aligning with the forecasted revenue. This consistency in meeting financial expectations reflects Lakeland's stable performance and effective management strategies.
Lakeland's stock has seen a significant price increase of approximately 70% over the past year, rising from $15.22 to $26.10, before settling at $22.64. This growth is largely due to the company's revenue growth and operational efficiency. The investment thesis for Lakeland is based on its addressable market and continued revenue growth, indicating potential for further stock appreciation.
The company's financial metrics provide additional insights into its performance. Lakeland has a price-to-earnings (P/E) ratio of 88.94, suggesting high market expectations for future earnings. Its price-to-sales ratio of 1.24 and enterprise value to sales ratio of 1.38 indicate a reasonable market valuation relative to its sales. The enterprise value to operating cash flow ratio of 64.16 highlights the company's valuation in relation to its cash flow from operations.
Lakeland's financial health is further supported by a low debt-to-equity ratio of 0.24, indicating conservative debt usage. The current ratio of 4.24 suggests strong liquidity, with the company well-positioned to cover its short-term liabilities. These financial metrics, combined with the company's operational efficiency, underscore Lakeland's potential for continued growth and stability in the market.
