RONKONKOMA, N.Y., June 15, 2015 /PRNewswire/ -- 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
April 30, 2015.
![Lakeland Industries Logo. Lakeland Industries Logo.](http://photos.prnewswire.com/prnvar/20120611/NY21959LOGO)
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
where noted.
Fiscal 2016 First Quarter Financial Results Highlights (from
Continuing Operations, unless otherwise noted)
- Revenue Growth
- Q1 Sales worldwide were $24.8
million ("M") this year and $21.8M last year, an increase of 14.1%.
- Margin Improvement and Expense Management
- Q1 Gross margin worldwide was 37.4%, compared to 29.9% last
year.
- Q1 Operating expenses worldwide increased by $0.4M and decreased as a percent of sales to
24.4% from 26.0% last year.
- Significant Increases in Operating Income, Adjusted EBITDA and
Free Cash Flow*
- Q1 Operating income increased to $3.2M from operating income of $0.9M last year.
- Operating income as a percentage of sales increased to 13.0%
this year vs. 3.9% last year.
- Q1 Adjusted EBITDA worldwide this year was $3.6M vs. $1.7M
last year.
- Free cash flow (defined as adjusted EBITDA less cash paid for
taxes and less capital expenditures) increased from $1.3M last year to $2.7M this year.
- Net Income Growth
- Q1 Net income of $2.2M or
$0.31 per share vs $0.4M and $0.06 per
share last year.
- Net loss from discontinued operations of $(0.9)M or $(0.14)
per share vs. $(0.4)M and
$(0.06) per share last year.
- Net income this year $1.2M or
$0.17 per share vs. $0.0M and $0.00 per
share last year.
- Balance Sheet Strengthened
- Cash and equivalents increased from $6.7M at end of Q4 last year to $8.7M at end of Q1; in anticipation of a
$3.2M dividend from its Chinese
manufacturing subsidiary declared and paid in May 2015.
- Stockholders' equity increased by 2.6% from the beginning of
the fiscal year.
- Net book value per share at April 30,
2015 was $9.18.
*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 crisis.
"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.
"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
To supplement its
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 SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
April 30, 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
LAKELAND INDUSTRIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
Three Months Ended
April 30, 2015 and 2014
|
|
|
Three Months
Ended
|
|
April 30,
|
|
($000's)
except for share
information
|
|
2015
|
2014*
|
Net sales from
continuing operations
|
$24,819
|
$21,758
|
Cost of goods sold
from continuing operations
|
15,540
|
15,253
|
Gross profit from
continuing operations
|
9,279
|
6,505
|
Operating expenses
from continuing operations
|
6,059
|
5,647
|
Operating profit from
continuing
operations
|
3,220
|
858
|
Other income (loss),
net from continuing operations
|
15
|
(5)
|
Interest expense from
continuing operations
|
183
|
486
|
Income before taxes
from continuing operations
|
3,052
|
377
|
Income tax expense
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
|
$(0.00)
|
Net income (loss) per
common share – Basic:
|
|
|
Income from continuing
operations
|
$0.31
|
$0.06
|
Loss from
discontinued operations
|
$(0.14)
|
$(0.06)
|
Net income
(loss)
|
$0.17
|
$0.00
|
Net income (loss) per
common share – Diluted:
|
|
|
Income from continuing
operations
|
$0.30
|
$0.06
|
Loss from discontinued
operations
|
$(0.14)
|
$(0.06)
|
Net income
(loss)
|
$0.17
|
$(0.00)
|
Weighted average
common shares outstanding:
|
|
|
Basic
|
7,062,144
|
5,923,224
|
Diluted
|
7,235,385
|
5,923,224
|
*Restated for discontinued operations
Numbers may not add due to rounding
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SOURCE Lakeland Industries, Inc.