RONKONKOMA, N.Y., June 22, 2015 /PRNewswire/ -- Lakeland
Industries, Inc. (NASDAQ: LAKE), a leading global manufacturer of
industrial protective clothing for industry, municipalities,
healthcare and to first responders on the federal, state and local
levels, today announced it has successfully amended the Settlement
Agreement (the "original Settlement Agreement") from September 11, 2012 relating to an arbitration
with the former management of its Brazil subsidiary. The amended
Settlement Agreement (the "new Settlement Agreement") includes a
discounted early payoff of the outstanding balance owed to the
former management of the Brazil
subsidiary pursuant to the original Settlement Agreement.
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Following the satisfaction of all regularly scheduled payments
of the original Settlement Agreement to date, the Company has
agreed to complete the payoff of the new Settlement Agreement by
June 30, 2015, which will satisfy the
remaining US$3,750,000 balance under
the original Settlement Agreement. The payoff amount of the
new Settlement Agreement is US$3,413,000, resulting in a gain of $224,000 after allowing for imputed interest on
the original Settlement Agreement. As part of the original
Settlement Agreement, all alleged outstanding claims against the
Company arising from an arbitration proceeding in Brazil involving the Company and the former
management of the Brazil
subsidiary were settled for an aggregate of approximately
US$8,500,000, which was payable by
the Company over a period of six years. Prior to the new
Settlement Agreement, the remaining amount owed under the original
Settlement Agreement was to be paid in quarterly installments of
US$250,000 through December 31, 2018.
The Amendment to the original Settlement Agreement contains a
general release of claims by the former management of the
Brazil subsidiary in favor of the
Company and its past or present officers, directors, and other
affiliates, as well as other closing conditions. Lakeland's
senior lender, Alostar Bank of Commerce, has consented to the
transactions contemplated by the Amendment.
Christopher J. Ryan, President
and Chief Executive Officer of Lakeland Industries, commented, "The
payoff and satisfaction of the Arbitration Settlement clears an
essential hurdle in our path for a complete exit from Brazil.
As a result, we have effectively removed a major
uncertainty with a potentially exploding default provision
resulting from the arbitration and saved $337,000 in future payments. With our exit
from Brazil expected to be
complete by the end of July, we'll be able to further sharpen our
focus on organic growth initiatives, enhancing profitability and
driving free cash flow generation from continuing
operations."
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.
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SOURCE Lakeland Industries, Inc.