Management is responsible for
establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act. Our internal control system is designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with US GAAP.
Due to inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree
of compliance with the policies or procedures may deteriorate.
A material weakness is a deficiency,
or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that
a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely
basis.
Management has assessed the effectiveness
of the Company’s internal control over financial reporting as of January 31, 2018. In making this assessment, management
used the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). Based upon an evaluation performed, our management concluded that as of January 31, 2018 our
internal control over financial reporting was effective.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
1.
|
BUSINESS AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Business
Lakeland Industries, Inc. and
Subsidiaries (“Lakeland,” the “Company,” “we,” “our” or “us”), a Delaware
corporation organized in April 1986, manufactures and sells a comprehensive line of safety garments and accessories for the industrial
protective clothing market.
For purposes of these financial
statements, FY refers to a fiscal year ended January 31; thus, FY18 refers to the fiscal year ended January 31, 2018.
Basis
of Presentation
The Company prepares its financial
statements in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).
The following is a description of the Company’s significant accounting policies.
Summary of Significant Accounting
Policies
Principles of Consolidation
The accompanying consolidated
financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated.
Use
of Estimates and Assumptions
The preparation of consolidated
financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and liabilities at the balance sheet date, and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is reasonably
possible that events could occur during the upcoming year that could change such estimates.
Cash
and Cash Equivalents
The Company considers highly
liquid temporary cash investments with original maturities of three months or less to be cash equivalents. Cash equivalents consist
of money market funds.
Accounts Receivable, net
Trade accounts receivable are
stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments. The Company recognizes losses when information available
indicates that it is probable that a receivable has been impaired based on criteria noted above at the date of the consolidated
financial statements, and the amount of the loss can be reasonably estimated. Management considers the following factors when determining
the collectability of specific customer accounts: Customer creditworthiness, past transaction history with the customers, current
economic industry trends, changes in customer payment terms. Past due balances over 90 days and other less creditworthy accounts
are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate,
adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment,
the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances
that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation
allowance and a credit to accounts receivable.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Inventories, net
Inventories include freight-in,
materials, labor and overhead costs and are stated at the lower of cost (on a first-in, first-out basis) or net realized value.
Provision is made for slow-moving, obsolete or unusable inventory.
Property and Equipment
Property and equipment is stated
at cost. Depreciation and amortization are provided for in amounts sufficient to relate the cost of depreciable assets to operations
over their estimated service lives on a straight-line basis. Leasehold improvements and leasehold costs are amortized over the
term of the lease or service lives of the improvements, whichever is shorter. The costs of additions and improvements which substantially
extend the useful life of a particular asset are capitalized. Repair and maintenance costs are charged to expense. When assets
are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the account,
and the gain or loss on disposition is reflected in operating income.
Assets held for sale are measured
at the lower of carrying value or fair value less cost to sell. Gains or losses are recognized for any subsequent changes to fair
value less cost to sell. However, gains are limited to cumulative losses previously recognized. Assets classified as held for sale
are not depreciated.
Goodwill
Goodwill represents the future
economic benefits arising from other assets acquired in a business combination that are not individually identified and separately
recognized. Goodwill is evaluated for impairment at least annually; however, this evaluation may be performed more frequently when
events or changes in circumstances indicate the carrying amount may not be recoverable. Factors that the Company considers important
that could identify a potential impairment include: significant changes in the overall business strategy and significant negative
industry or economic trends. Management assesses whether it is more likely than not that goodwill is impaired and, if necessary,
compares the fair value of the reporting unit to the carrying value. Fair value is generally determined by management either based
on estimating future discounted cash flows for the reporting unit or by estimating a sales price for the reporting unit based on
multiple of earnings. These estimates require the Company's management to make projections that can differ from actual results.
As of January 31, 2018 and January 31, 2017, no impairment was recorded.
Impairment of Long-Lived Assets
The Company evaluates the carrying
value of long-lived assets to be held and used when events or changes in circumstances indicate the carrying value may not be recoverable.
The Company measures any potential impairment on a projected undiscounted cash flow method. Estimating future cash flows requires
the Company’s management to make projections that can differ materially from actual results. The carrying value of a long-lived
asset is considered impaired when the total projected undiscounted cash flows from the asset is less than its carrying value. In
that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset.
Revenue Recognition
The Company derives its sales
primarily from its limited use/disposable protective clothing and secondarily from its sales of reflective clothing, high-end chemical
protective suits, firefighting and heat protective apparel, reusable woven garments and gloves and arm guards. Sales are recognized
when goods are shipped, at which time title and the risk of loss pass to the customer. Sales are reduced for sales returns and
allowances. Payment terms are generally net 30 days for United States sales and net 90 days for international sales.
Substantially, all of the Company's
sales are made through distributors. There are no significant differences across product lines or customers in different geographical
areas in the manner in which the Company's sales are made.
Lakeland offers a growth
rebate to certain distributors each year on a calendar-year basis. Sales are traced on a monthly basis, and accruals are
based on sales growth over the prior year. The growth rebate accrual is adjusted either up or down on a monthly basis as a
reduction (increase) to revenue and an increase (reduction) to the accrual based on monthly sales trends as compared with
prior year. Based on volume and products purchased, distributors can earn anywhere from 1% to 6% in rebates in the form of
either a quarterly or annual credit to their account, depending on the specific agreement. In estimating the accrual needed,
management tracks sales growth over the prior year.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Our sales are generally final;
however, requests for return of goods can be made and must be received within 90 days from invoice date. No returns will be accepted
without a written authorization. Return products may be subject to a restocking charge and must be shipped freight prepaid. Any
special made-to-order items are not returnable. Customer returns have historically been insignificant.
Customer pricing is subject to
change on a 30-day notice; exceptions based on meeting competitors' pricing are considered on a case-by-case basis. Revenue is
recorded net of taxes collected from customers. The related taxes that are remitted to governmental authorities, with the collected
taxes recorded as current liabilities until remitted to the relevant government authority.
For larger orders, except in
its Lakeland Fire product line, the Company absorbs the cost of shipping and handling. For those customers who are billed the cost
of shipping and handling fees, such amounts are included in net sales. Shipping and handling costs associated with the outbound
freight are included in operating expenses and aggregated approximately $2.2 million in FY18, $2.0 million in FY17 and $2.5 million
for FY16.
Advertising Costs
Advertising costs are expensed
as incurred and included in operating expenses on the consolidated statement of operations. Advertising and co-op costs amounted
to $443,000, $342,000 and $326,000 in FY18, FY17 and FY16, respectively, net of a co-op advertising allowance received from a supplier.
Stock-Based Compensation
The Company records the cost
of stock-based compensation plans based on the fair value of the award on the grant date. For awards that contain a vesting provision,
the cost is recognized over the requisite service period (generally the vesting period of the equity award) which approximates
the performance period. For awards based on services already rendered, the cost is recognized immediately.
Research and Development Costs
Research and development costs
include labor, equipment and materials costs and are expensed as incurred and included in operating expenses. Research and development
expenses aggregated were approximately $280,000, $463,000 and $165,000 in FY18, FY17 and FY16, respectively.
Income Taxes
The Company is required to estimate
its income taxes in each of the jurisdictions in which it operates as part of preparing the consolidated financial statements.
This involves estimating the actual current tax in addition to assessing temporary differences resulting from differing treatments
for tax and financial accounting purposes. These differences, together with net operating loss carryforwards and tax credits, are
recorded as deferred tax assets or liabilities on the Company’s consolidated balance sheet. A judgment must then be made
of the likelihood that any deferred tax assets will be recovered from future taxable income. A valuation allowance may be required
to reduce deferred tax assets to the amount that is more likely than not to be realized. In the event the Company determines that
it may not be able to realize all or part of its deferred tax asset in the future, or that new estimates indicate that a previously
recorded valuation allowance is no longer required, an adjustment to the deferred tax asset is charged or credited to income in
the period of such determination.
The Company recognizes tax positions
that meet a “more likely than not” minimum recognition threshold. If necessary, the Company recognizes interest and
penalties associated with tax matters as part of the income tax provision and would include accrued interest and penalties with
the related tax liability in the consolidated balance sheets.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Foreign Operations and Foreign
Currency Translation
The Company maintains manufacturing
operations in Mexico, India, Argentina and the People’s Republic of China and can access independent contractors in China,
Vietnam, Argentina and Mexico. It also maintains sales and distribution entities located in India, Canada, the U.K., Chile, China,
Argentina, Russia, Kazakhstan and Mexico. The Company is vulnerable to currency risks in these countries. The functional currency
for the United Kingdom subsidiary is the Euro; the trading company in China, the RMB; the Canadian Real Estate subsidiary, the
Canadian dollar; the Russian operation, the Russian Ruble, and the Kazakhstan operation the Kazakhstan Tenge. All other operations
have the US dollar as its functional currency.
Pursuant to US GAAP, assets and
liabilities of the Company’s foreign operations with functional currencies, other than the US dollar, are translated at the
exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average rates prevailing during
the periods. Translation adjustments are reported in accumulated other comprehensive loss, a separate component of stockholders’
equity. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the consolidated
statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.
Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the
functional currency are included in the results of operations as incurred. Foreign currency transaction gains included in net income
for the years ended January 31, 2018, 2017 and 2016, were approximately $1.1 million, $0.4 million and $0.1 million, respectively.
Fair Value of Financial Instruments
US GAAP defines fair value, provides
guidance for measuring fair value and requires certain disclosures utilizing a fair value hierarchy which is categorized into three
levels based on the inputs to the valuation techniques used to measure fair value.
The following is a brief description
of those three levels:
Level 1:
|
Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
Level 2:
|
Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
Level 3:
|
Unobservable inputs that reflect management’s own assumptions.
|
Foreign currency forward and
hedge contracts are recorded in the consolidated balance sheets at their fair value as of the balance sheet dates based on current
market rates as further discussed in Note 11.
The financial instruments of
the Company classified as current assets or liabilities, including cash and cash equivalents, accounts receivable, short-term borrowings,
borrowings under revolving credit facility, accounts payable and accrued expenses, are recorded at carrying value, which approximates
fair value based on the short-term nature of these instruments.
The Company believes that the fair values
of its long-term debt approximates its carrying value based on the effective interest rate compared to the current market rate
available to the Company.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Earnings Per Share
Basic earnings per share are
based on the weighted average number of common shares outstanding without consideration of common stock equivalents. Diluted earnings
per share are based on the weighted average number of common shares and common stock equivalents. The diluted earnings per share
calculation takes into account unvested restricted shares and the shares that may be issued upon exercise of stock options, reduced
by shares that may be repurchased with the funds received from the exercise, based on the average price during the fiscal year.
Reclassifications
Certain reclassifications have
been made to the prior year’s consolidated financial statements to conform to the current year presentation. These reclassifications
have no effect on the accompanying consolidated financial statements.
Recent Accounting Pronouncements
The Company considers the applicability
and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that
are issued.
New Accounting Pronouncements
Recently Adopted
In July 2015, the Financial Accounting
Standards Board (“FASB”) issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.”
This update requires an entity that determines the cost of inventory by methods other than last-in, first-out and the retail inventory
method to measure inventory at the lower of cost and net realizable value. The Company adopted this guidance in the first quarter
of FY18 using a prospective application. The adoption of this guidance did not have a material impact to the consolidated financial
statements and related disclosures.
In March 2016, the FASB issued
ASU 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.”
This update addresses several aspects of the accounting for share-based compensation transactions including: (a) income tax
consequences when awards vest or are settled, (b) classification of awards as either equity or liabilities, (c) a policy
election to account for forfeitures as they occur rather than on an estimated basis and (d) classification of excess tax impacts
on the statement of cash flows. The Company adopted this guidance in the first quarter of FY18, which did not have a material impact
to the consolidated financial statements and related disclosures. The amendments requiring recognition of excess tax benefits and
tax deficiencies in the income statement will be applied prospectively. The inclusion of excess tax benefits and deficiencies as
a component of our income tax expense will increase volatility within our provision for income taxes as the amount of excess tax
benefits or deficiencies from share-based compensation awards are dependent on our stock price at the date the awards are exercised
or settled. The Company does not expect the impact to be material to the consolidated results of operations; however, such determination
is subject to change based on facts and circumstances at the time when awards vest or settle. The Company accounts for forfeitures
of share-based awards when they occur. The Company will apply the amendments related to the presentation of excess tax benefits
on the consolidated statement of cash flows using a retrospective transition method, and as a result, excess tax benefits related
to share-based awards which had been previously classified as cash flows from financing activities will be reclassified as cash
flows from operating activities.
New Accounting Pronouncements
Not Yet Adopted
In
May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU
2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the
transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in
US GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The
guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows
arising from customer contracts. In August 2015, the FASB issued ASU No. 2015-14, “Deferral of the Effective
Date” (“ASU 2015-14”), which defers the effective date for ASU 2014-09 by one year. For public entities,
the guidance in ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 (including
interim reporting periods within those periods), which means it will be effective for the Company’s fiscal year
beginning February 1, 2018. In March 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations
(Reporting Revenue versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal
versus agent considerations in the new revenue recognition standard. In April 2016, the
FASB issued ASU No. 2016-10,
“Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which reduces the complexity
when applying the guidance for identifying performance obligations and improves the operability and understandability of the
license implementation guidance. In May 2016, the FASB issued ASU No. 2016-12 “Narrow-Scope Improvements and Practical
Expedients” (“ASU 2016-12”), which amends the guidance on transition, collectability, noncash consideration
and the presentation of sales and other similar taxes. In December 2016, the FASB further issued ASU 2016-20,
“Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” (“ASU
2016-20”), which makes minor corrections or minor improvements to the Codification that are not expected to have a
significant effect on current accounting practice or create a significant administrative cost to most entities. The
amendments are intended to address implementation and provide additional practical expedients to reduce the cost and
complexity of applying the new revenue standard. These amendments have the same effective date as the new revenue
standard.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company will adopt Topic
606 in the first quarter of its fiscal 2019 using the retrospective transition method. The Company continues to assess the impact
of the new standard and design of internal control over financial reporting, but based upon the terms of our agreements we do not
expect the adoption to have a material effect on our consolidated financial results. The standard’s core principle is that
a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration
that the company expects to be entitled in exchange for those goods or services. While the Company’s evaluation has not been
completed, the Company has not identified any information that would indicate that the new guidance will have a material impact
on its consolidated financial position, results of operations and cash flows upon adoption in its first quarter of fiscal 2019.
In February 2016, the FASB issued
ASU No. 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02
requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in
this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early
application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or
entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently
evaluating the impact of this new standard on its consolidated financial statements but has not determined the effects that the
adoption of the pronouncement may have on its consolidated financial statements and related disclosures.
In February 2017, the FASB issued
ASU No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets” to clarify the
scope of Subtopic 610-20 and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May
2014 as a part of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and
losses from the transfer of nonfinancial assets in contracts with noncustomers. For public entities, the amendments are effective
for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period.
For all other entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2018,
and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company does not expect that
adoption of this guidance will have a material impact on its consolidated financial statements and related disclosures.
In May 2017, the FASB issued ASU
2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendment amends
the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms
or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718.
For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods,
beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company does not
expect that the adoption of this guidance will have a material impact on its consolidated financial statements and related disclosures.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In July 2017, the FASB issued
ASU No. 2017-11, “Earnings per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging
(Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite
Deferral for Mandatorily Redeemable Financial Instruments of Certain Non-public Entities and Certain Mandatorily Redeemable Noncontrolling
Interests with a Scope Exception.” The amendments in Part I of ASU No. 2017-11 change the classification analysis of certain
equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial
instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification
when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure
requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion
option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature.
For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS)
in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as
a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion
options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features
(in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments
in Part II of ASU No. 2017-11 recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented
as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business
entities, the amendments in Part I of ASU No. 2017-11 are effective for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2018. For all other entities, the amendments in Part I of this ASU are effective for fiscal years
beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is
permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period,
any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company does
not expect that the adoption of this guidance will have a material impact on its consolidated financial statements and related
disclosures.
In August 2017, the FASB issued
ASU 2017-12,
Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities
(ASU 2017-12),
which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk
management activities in the financial statements. For public entities, the amendments are effective for annual reporting periods
beginning after December 15, 2018, including interim reporting periods within that reporting period. For all other entities, the
amendments in this Update are effective for annual reporting periods beginning after December 15, 2019, including interim reporting
periods within that reporting period. The Company does not expect that adoption of this guidance will have a material impact on
its consolidated financial statements and related disclosures.
In February 2018, the FASB issued
ASU 2018-02,
Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects From
Accumulated Other Comprehensive Income,”
which allows institutions to elect to reclassify the stranded tax effects from
AOCI to retained earnings, limited only to amounts in AOCI that are affected by the tax reform law. For public entities, the amendments
are effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within that reporting
period. For all other entities, the amendments in this Update are effective for annual reporting periods beginning after December
15, 2019, including interim reporting periods within that reporting period. The Company does not expect that adoption of this guidance
will have a material impact on its consolidated financial statements and related disclosures.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Inventories, net consist of the
following (in $000s):
|
|
January 31, 2018
|
|
|
January 31, 2017
|
|
|
|
|
|
|
|
|
Raw materials
|
|
$
|
14,767
|
|
|
$
|
14,312
|
|
Work-in-process
|
|
|
2,357
|
|
|
|
1,233
|
|
Finished goods
|
|
|
25,795
|
|
|
|
19,990
|
|
|
|
$
|
42,919
|
|
|
$
|
35,535
|
|
|
3.
|
PROPERTY AND
EQUIPMENT, NET
|
Property and equipment from continuing
operations consists of the following:
|
|
Useful Life in Years
|
|
January 31, 2018
|
|
|
January 31, 2017
|
|
|
|
|
|
(000’s)
|
|
|
(000’s)
|
|
Machinery and equipment
|
|
3-10
|
|
$
|
6,116
|
|
|
$
|
6,442
|
|
Furniture and fixtures
|
|
3-10
|
|
|
328
|
|
|
|
306
|
|
Leasehold improvements
|
|
Lease term
|
|
|
1,217
|
|
|
|
1,207
|
|
Land and building (China)
|
|
20-30
|
|
|
1,764
|
|
|
|
1,764
|
|
Land and building (Canada)
|
|
30
|
|
|
1,982
|
|
|
|
1,864
|
|
Land and buildings (USA)
|
|
30
|
|
|
3,460
|
|
|
|
3,417
|
|
Land and buildings (Mexico)
|
|
30
|
|
|
2,070
|
|
|
|
2,070
|
|
|
|
|
|
|
16,937
|
|
|
|
17,070
|
|
Less accumulated depreciation and amortization
|
|
|
|
|
(8,907
|
)
|
|
|
(8,805
|
)
|
Assets held for sale
|
|
|
|
|
150
|
|
|
|
901
|
|
Construction-in-progress
|
|
|
|
|
759
|
|
|
|
262
|
|
|
|
|
|
$
|
8,939
|
|
|
$
|
9,428
|
|
Depreciation and amortization
expense from continuing operations for FY18, FY17 and FY16 amounted to $774,742, $1,194,000 and $985,863, respectively.
The estimated cost to complete
construction-in-progress at January 31, 2018 is approximately $2,000,000.
During FY18, conditions in the
Brazilian economy caused management to believe that the Company’s assets held for sale in that country should be analyzed
for impairment. The analysis resulted in an impairment write-down of $0.7 million for assets that have been identified as held-for-sale
by the Company. The write-down is included in operating expenses in the Company’s FY18 consolidated statement of operations.
The estimated fair value less costs to sell of the assets written down in FY18, consisting primarily of buildings and land, was
approximately $0.2 million. In determining fair value the Company relied upon third party appraisals discounted for economic uncertainties
and lack of comparable sales in the area. Of the original approximately $1.1 million, the estimated fair value less costs to sell
of the assets held for sale at January 31, 2018 is approximately $0.2 million.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On August 1, 2005, the Company
purchased Mifflin Valley, Inc., a Pennsylvania manufacturer, the operations of which now comprise the Company’s Reflective
division. This acquisition resulted in the recording of $0.9 million in goodwill in FY06. The Company believes that there was no
impairment of goodwill for the years ended January 31, 2018, 2017 and 2016. This goodwill is included in the US segment for reporting
purposes.
Revolving Credit Facility
On June 28, 2013, as amended
on March 31, 2015 and June 3, 2015, Lakeland Industries, Inc. and its wholly owned Canadian subsidiary, Lakeland Protective Wear
Inc. (collectively the “Borrowers”), entered into a Loan and Security Agreement (the “AloStar Loan Agreement”)
with AloStar Business Credit, a division of AloStar Bank of Commerce (“AloStar”). The AloStar Loan Agreement provided
the Borrowers with a $15 million revolving line of credit (the “AloStar Credit Facility”), at a variable interest rate
based on LIBOR, with a first priority lien on substantially all of the United States and Canada assets of the Company, except for
its Mexican plant and the Canadian warehouse. After these amendments the maturity date of the AloStar Credit Facility was
extended to June 28, 2017 and the minimum interest rate floor became 4.25% per annum. On May 10, 2017, the AloStar Loan Agreement
was terminated, and the existing balance due was repaid with the proceeds from a new loan agreement with SunTrust Bank.
On May 10, 2017, the Company
entered into a Loan Agreement (the “Loan Agreement”) with SunTrust Bank (“Lender”). The Loan Agreement
provides the Company with a secured (i) $20.0 million revolving credit facility, which includes a $5.0 million letter of credit
sub-facility, and (ii) $1,575,000 term loan with Lender. The Company may request from time to time an increase in the revolving
credit loan commitment of up to $10.0 million (for a total commitment of up to $30.0 million). Borrowing pursuant to the revolving
credit facility is subject to a borrowing base amount calculated as (a) 85% of eligible accounts receivable, as defined, plus (b)
an inventory formula amount, as defined, minus (c) an amount equal to the greater of (i) $1,500,000 or (ii) 7.5% of the then current
revolver commitment amount, minus (d) certain reserves as determined by the Loan Agreement. The credit facility matures on May
10, 2020 (subject to earlier termination upon the occurrence of certain events of default as set forth in the Loan Agreement).
At the closing, the Company’s existing financing facility with AloStar was fully repaid and terminated using proceeds of
the revolver in the amount of approximately $3.0 million.
Borrowings under the term loan
and the revolving credit facility bear interest at an interest rate determined by reference whether the loan is a base rate loan
or Eurodollar loan, with the rate election made by the Company at the time of the borrowing or at any time the Company elects
pursuant to the terms of the Loan Agreement. The term loan is payable in equal monthly principal installments of $13,125 each,
beginning on June 1, 2017, and on the first day of each succeeding month, with a final payment of the remaining principal and
interest on May 10, 2020 (subject to earlier termination as provided in the Loan Agreement). For that portion of the term loan
that consists of Eurodollar loans, the term loan shall bear interest at the LIBOR Market Index Rate (“LIBOR”) plus
2.0% per annum, and for that portion of the term loan that consists of base rate loans, the term loan shall bear interest at the
base rate then in effect plus 1.0% per annum. All principal and unpaid accrued interest under the revolver credit facility shall
be due and payable on the maturity date of the revolver. For that portion of the revolver loan that consists of Eurodollar loans,
the revolver shall bear interest at LIBOR plus a margin rate of 1.75% per annum for the first six months and thereafter between
1.5% and 2.0%, depending on the Company’s “availability calculation” (as defined in the Loan Agreement) and,
for that portion of the revolver that consists of base rate loans, the revolver shall bear interest at the base rate then in effect
plus a margin rate of 0.75% per annum for the first six months and thereafter between 0.50% and 1.0%, depending on the availability
calculation. As of the closing, the Company elected all borrowings under the Loan Agreement to accrue interest at LIBOR which,
as of that date, was 0.99500%. As such, the initial rate of interest for the revolver is 2.745% per annum and the initial rate
of interest for the term loan is 2.995% per annum. The Loan Agreement provides for payment of an unused line fee of between 0.25%
and 0.50%, depending on the amount by which the revolving credit loan commitment exceeds the amount of the revolving credit loans
outstanding (including letters of credit), which shall be payable monthly in arrears on the average daily unused portion of the
revolver. There was a $0 balance on revolver at January 31, 2018 and $4.8 million at January 31, 2017.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company agreed to maintain
a minimum “fixed charge coverage ratio” (as defined in the Loan Agreement) as of the end of each fiscal quarter, commencing
with the fiscal quarter ended July 31, 2017, of not less than 1.10 to 1.00 during the applicable fiscal quarter, and agreed to
certain negative covenants that are customary for credit arrangements of this type, including restrictions on the Company’s
ability to enter into mergers, acquisitions or other business combination transactions, conduct its business, grant liens, make
certain investments, incur additional indebtedness, and make stock repurchases.
In connection with the Loan Agreement,
the Company entered into a security agreement, dated May 10, 2017, with Lender pursuant to which the Company granted to Lender
a first priority perfected security interest in substantially all real and personal property of the Company.
Borrowings in UK
On December 31, 2014, the Company
and Lakeland Industries Europe, Ltd, (“Lakeland UK”), a wholly owned subsidiary of the Company, amended the terms of
its existing line of credit facility with HSBC Bank to provide for (i) a one-year extension of the maturity date of the existing
financing facility to December 19, 2016, (ii) an increase in the facility limit from £1,250,000 (approximately USD $1.9 million,
based on exchange rates at time of closing) to £1,500,000 (approximately USD $2.3 million, based on exchange rates at time
of closing), and (iii) a decrease in the annual interest rate margin from 3.46% to 3.0%. In addition, pursuant to a letter agreement
dated December 5, 2014, the Company agreed that £400,000 (approximately USD $0.6 million, based on exchange rates at time
of closing) of the note payable by the UK subsidiary to the Company shall be subordinated in priority of payment to the subsidiary’s
obligations to HSBC under the financing facility. The balance under this loan outstanding at January 31, 2018 and January 31, 2017
was USD $0.2 million and USD $0.1 million, respectively, and is included in short-term borrowings on the consolidated balance sheet.
On December 31, 2016, Lakeland UK entered into an extension of the maturity date of its existing facility with HSBC Invoice Finance
(UK) Ltd. to December 19, 2017. Other than the extension of the maturity date and a small reduction of the service charge from
0.9% to 0.85%, all other terms of the facility remained the same. On September 4, 2017 the facility was amended to include Algeria
as an approved country. On December 4, 2017 the facility was extended to March 31, 2018 for the next review period and, as of March
9, 2018 the facility was extended to mature on March 31, 2019 with no additional changes to the terms.
Canada
Loans
In September 2013, the Company
refinanced its loan with the Development Bank of Canada (“BDC”) for a principal amount of approximately $1.1 million
in both Canadian dollars and USD (based on exchange rates at time of closing). Such loan was for a term of 240 months at an interest
rate of 6.45% per annum with fixed monthly payments of approximately USD $6,048 (CAD $8,169) including principal and interest.
It was collateralized by a mortgage on the Company's warehouse in Brantford, Ontario. This loan was paid in full on September 26,
2017. The amount outstanding at January 31, 2017 was USD $716,000 (CAD $1.0 million) in long term borrowings, net of current maturities
of USD $50,000.
Argentina Loan
In April 2015, Lakeland
Argentina S.R.L. (“Lakeland Argentina”), the Company’s Argentina subsidiary was granted a $300,000 line of
credit denominated in Argentine pesos, pursuant to a standby letter of credit granted by the parent company. The line of
credit outstanding at January 31, 2018, was approximately $31,000 noted below.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following three
loans were made under the $300,000 facility stated above:
On July 1, 2016, Lakeland Argentina
and Banco de la Nación Argentina (“BNA”) entered into an agreement for Lakeland Argentina to obtain a loan in
the amount of ARS 569,000 (approximately USD $38,000, based on exchange rates at time of closing); such loan was for a term of
one year at an interest rate of 27.06% per annum. This agreement was paid in full prior to January 31, 2018.
May 19, 2017 Lakeland Argentina
and BNA entered into an agreement for Lakeland Argentina to obtain a loan in the amount of ARS 1.8 million (approximately USD $112,000,
based on exchange rates at time of closing); such loan is for a term of one year at an interest rate of 20.0% per annum. The amount
outstanding at January 31, 2018 was ARS $0.6 million (approximately USD $31,000 which is included as short-term borrowings on the
consolidated balance sheet.)
Below is a table to summarize
the debt amounts above (in 000’s):
|
|
Short-Term
|
|
|
Long-term
|
|
|
Current Maturity of Long-
term
|
|
|
Revolving Credit
Facility
|
|
|
|
1/31/2018
|
|
|
1/31/2017
|
|
|
1/31/2018
|
|
|
1/31/2017
|
|
|
1/31/2018
|
|
|
1/31/2017
|
|
|
1/31/2018
|
|
|
1/31/2017
|
|
Argentina
|
|
$
|
31
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Canada
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
716
|
|
|
|
—
|
|
|
|
50
|
|
|
|
—
|
|
|
|
—
|
|
UK
|
|
|
180
|
|
|
|
126
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
USA
|
|
|
—
|
|
|
|
—
|
|
|
|
1,312
|
|
|
|
—
|
|
|
|
158
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,865
|
|
Totals
|
|
$
|
211
|
|
|
$
|
153
|
|
|
$
|
1,312
|
|
|
$
|
716
|
|
|
$
|
158
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
4,865
|
|
Five-year Debt Payout Schedule
This schedule reflects the liabilities as of January 31, 2018,
and does not reflect any subsequent event (in 000’s):
|
|
Total
|
|
|
1 Year or
less
|
|
|
2 Years
|
|
|
3 Years
|
|
|
4 Years
|
|
|
5 Years
|
|
|
After 5
Years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving credit facility
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Borrowings in USA
|
|
|
1,470
|
|
|
|
158
|
|
|
|
158
|
|
|
|
1,154
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Borrowings in Canada
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Borrowings in UK
|
|
|
180
|
|
|
|
180
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Borrowings in Argentina
|
|
|
31
|
|
|
|
31
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
$
|
1,681
|
|
|
$
|
369
|
|
|
$
|
158
|
|
|
$
|
1,154
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Credit
Risk
Financial instruments, which
potentially subject the Company to concentration of credit risk, consist principally of cash and cash equivalents, and trade receivables.
Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising
the Company’s customer base and their dispersion across geographic areas principally within the United States. The Company
routinely addresses the financial strength of its customers and, as a consequence, believes that its receivable credit risk exposure
is limited. The Company does not require customers to post collateral.
The Company’s
foreign financial depositories are Bank of America; China Construction Bank; Bank of China; China Industrial and Commercial Bank;
HSBC; Rural Credit Cooperative of Shandong; Postal Savings Bank of China; Punjab National Bank; HSBC in India, Argentina and UK;
Raymond James in Argentina; TD Canada Trust; Banco Itaú S.A., Banco Credito Inversione in Chile; Banco Mercantil Del Norte
SA in Mexico; ZAO KB Citibank Moscow in Russia, and JSC Bank Centercredit in Kazakhstan. The Company monitors its financial depositories
by their credit rating which varies by country. In addition, cash balances in banks in the United States of America are insured
by the Federal Deposit Insurance Corporation subject to certain limitations. There is approximately $12.0 million total included
in the U.S. bank accounts and approximately $3.8 million total in foreign bank accounts as of January 31, 2018.
Major Customer
No customer accounted for more
than 10% of net sales during FY18, FY17 and FY16.
Major Supplier
Our largest supplier, Precision
Fabrics Group, accounted for 11%, 13% and 10% of total purchases in FY18, FY17 and FY16, respectively. There were no other vendors
over 10% for either FY18, FY17 or FY16.
The 2017, 2015 and 2012 Stock
Plans
On June 21, 2017, the stockholders
of the Company approved the Lakeland Industries, Inc. 2017 Equity Incentive Plan (the “2017 Plan”) at the Annual Meeting
of Stockholders. The executive officers and all other employees and directors of the Company, including its subsidiaries are eligible
to participate in the 2017 Plan. The 2017 Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”),
except that with respect to all non-employee directors, the Committee shall be deemed to include the full Board. The 2017 Plan
provides for the grant of equity-based compensation in the form of stock options, restricted stock, restricted stock units, performance
shares, performance units, or stock appreciation rights.
The 2017 Plan also permits the
grant of awards that qualify for “performance-based compensation” within the meaning of Section 162(m) of the U.S.
Internal Revenue Code. The Committee has the authority to determine the type of award, as well as the amount, terms and conditions
of each award, under the 2017 Plan, subject to the limitations and other provisions of the 2017 Plan. An aggregate of 360,000 shares
of the Company’s common stock are authorized for issuance under the 2017 Plan, subject to adjustment as provided in the 2017
Plan for stock splits, dividends, distributions, recapitalizations and other similar transactions or events. If any shares subject
to an award are forfeited, expire, lapse or otherwise terminate without issuance of such shares, such shares shall, to the extent
of such forfeiture, expiration, lapse or termination, again be available for issuance under the 2017 Plan. The following table
summarizes the unvested shares granted on September 12, 2017, which have been made under the 2017 Plan.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
Number of shares awarded total
|
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
Cap
|
|
Employees
|
|
|
21,145
|
|
|
|
31,718
|
|
|
|
42,291
|
|
|
|
50,748
|
|
Non-Employee Directors
|
|
|
7,246
|
|
|
|
10,870
|
|
|
|
14,493
|
|
|
|
17,391
|
|
Total
|
|
|
28,391
|
|
|
|
42,588
|
|
|
|
56,784
|
|
|
|
68,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value at grant date (numbers below are rounded to the nearest $100)
|
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
Cap
|
|
Employees
|
|
$
|
291,800
|
|
|
$
|
437,700
|
|
|
$
|
583,600
|
|
|
$
|
700,300
|
|
Non-Employee Directors
|
|
|
100,000
|
|
|
|
150,000
|
|
|
|
200,000
|
|
|
|
240,000
|
|
Total
|
|
$
|
391,800
|
|
|
$
|
587,700
|
|
|
$
|
783,600
|
|
|
$
|
940,300
|
|
Of the total number of shares
awarded at Maximum, there are an aggregate of 56,784 shares underlying restricted stock awards and in addition in the 2017 Plan
there are 6,376 shares underlying awards of stock appreciation rights with a base price of $13.80 per share. These stock appreciation
rights are classified as liability awards and are remeasured at fair value each reporting period until the award is settled. As
of January 31, 2018 the Company has recorded a liability in the amount of $1,913 related to these stock appreciation rights.
The actual number of shares of
common stock of the Company, if any, to be earned by the award recipients is determined over a full three fiscal year performance
period commencing on February 1, 2017 and ending on January 31, 2020, based on the level of earnings before interest, taxes, depreciation
and amortization (“EBITDA”) achieved by the Company over this period. The EBITDA targets have been set for each of
the Minimum, Target, Maximum and Cap levels, at higher amounts for each of the higher levels. The actual EBITDA amount achieved
is determined by the Committee and may be adjusted for items determined to be unusual in nature or infrequent in occurrence, which
items may include, without limitation, the charges or costs associated with restructurings of the Company or any subsidiary, discontinued
operations, and the cumulative effects of accounting changes.
Under the 2017 Plan, as described
above, the Company awarded performance-based restricted stock and stock appreciation rights to eligible employees and directors.
Such awards were at either Minimum, Target, Maximum or Cap levels, based on three year EBITDA targets. The Company recognizes expense
related to performance-based restricted share awards over the requisite performance period using the straight-line attribution
method based on the most probable outcome (minimum, target, maximum, cap or zero) at the end of the performance period and the
price of the Company’s common stock price at the date of grant. The Company is recognizing expense related to awards under
the 2017 Plan at Maximum and these expenses were $143,010 for the year ended January 31, 2018.
The 2017 Plan is the successor
to the Lakeland Industries, Inc. 2015 Stock Plan (the “2015 Plan”). The executive officers and all other employees
and directors of the Company and its subsidiaries were eligible to participate in the 2015 Plan. The 2015 Plan authorized the issuance
of awards of restricted stock, restricted stock units, performance shares, performance units and other stock-based awards. The
2015 Plan also permitted the grant of awards that qualify for “performance-based compensation” within the meaning of
Section 162(m) of the U.S. Internal Revenue Code. The aggregate number of shares of the Company’s common stock that was issuable
under the 2015 Plan was 100,000 shares. Under the 2015 Plan, as of January 31, 2018, there were 67,000 shares vested; of which
43,029 shares were issued and 23,971 shares were returned to the Company to pay employee taxes.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The 2015 Plan, was the successor
to the Company’s 2012 Stock Incentive Plan (the “2012 Plan”). The Company’s 2012 Plan authorized the issuance
of up to a maximum of 310,000 shares of the Company’s common stock to employees and directors of the Company and its subsidiaries
in the form of restricted stock, restricted stock units, performance shares, performance units and other share-based awards. Under
the 2012 Plan, as of January 31, 2018, the Company issued 293,887 fully vested shares of common stock, and at January 31, 2018,
there are no outstanding shares to vest according to the terms of the 2012 Plan.
Under the 2012 Plan and the 2015
Plan, the Company generally awarded eligible employees and directors with either performance-based or time-based restricted shares.
Performance-based restricted shares were awarded at either baseline (target), maximum or zero amounts. The number of restricted
shares subject to any award was not tied to a formula or comparable company target ranges, but rather was determined at the discretion
of the Committee at the end of the applicable performance period, which was two years under the 2015 Plan and had been three years
under the 2012 Plan. The Company recognized expense related to performance-based restricted share awards over the requisite performance
period using the straight-line attribution method based on the most probable outcome (baseline, maximum or zero) at the end of
the performance period and the price of the Company’s common stock price at the date of grant.
As of January 31, 2018, unrecognized
stock-based compensation expense totaled $0 pursuant to both the 2012 and 2015 Plans and $730,503 pursuant to the 2017 Plan based
on the maximum performance award level. Such unrecognized stock-based compensation expense totaled $0 for both the 2012 and 2015
Plans and $294,703 for the 2017 Plan at the minimum performance award level. The cost of these non-vested awards is expected to
be recognized over a weighted-average period of three years for the 2017 Plan.
The Company recognized total
stock-based compensation costs, which are reflected in operating expenses:
|
|
Year Ended January 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
2012 Plan
|
|
$
|
206
|
|
|
$
|
(9,354
|
)
|
|
$
|
332,691
|
|
2015 Plan
|
|
|
197,284
|
|
|
|
285,354
|
|
|
$
|
253,296
|
|
2017 Plan
|
|
|
227,075
|
|
|
|
—
|
|
|
|
—
|
|
Total stock-based compensation
|
|
$
|
424,565
|
|
|
$
|
276,000
|
|
|
$
|
585,987
|
|
Total income tax benefit recognized for stock-based compensation arrangements
|
|
$
|
153,203
|
|
|
$
|
99,360
|
|
|
$
|
210,995
|
|
Shares issued under 2017,
2015 and 2012 Stock Plans
|
|
Outstanding
Unvested Grants
at Maximum at
Beginning of
FY18
|
|
|
Granted during
FY18 through
January 31,
2018
|
|
|
Becoming
Vested during
FY18 through
January 31,
2018
|
|
|
Forfeited
during
FY18 through
January 31,
2018
|
|
|
Outstanding
Unvested Grants at
Maximum at End
of
January 31, 2018
|
|
Restricted stock grants – employees
|
|
|
67,619
|
|
|
|
42,291
|
|
|
|
40,570
|
|
|
|
27,049
|
|
|
|
42,291
|
|
Restricted stock grants – non-employee directors
|
|
|
—
|
|
|
|
14,493
|
|
|
|
—
|
|
|
|
—
|
|
|
|
14,493
|
|
Retainer in stock –
non-employee directors
|
|
|
32,372
|
|
|
|
7,568
|
|
|
|
27,151
|
|
|
|
—
|
|
|
|
12,789
|
|
Total restricted stock
|
|
|
99,991
|
|
|
|
64,352
|
|
|
|
67,721
|
|
|
|
27,049
|
|
|
|
69,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average grant date fair value
|
|
$
|
10.18
|
|
|
$
|
13.91
|
|
|
$
|
10.18
|
|
|
$
|
10.19
|
|
|
$
|
13.63
|
|
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Other Compensation Plans/Programs
Pursuant
to the Company’s restrictive stock program, all directors are eligible to elect to receive any director fees in shares of
restricted stock in lieu of cash. Such restricted shares are subject to a two-year vesting period. The valuation is based on the
stock price at the grant date and is amortized to expense over the two-year period, which approximates the performance period.
Since the director is giving up cash for unvested shares, and is subject to a vesting requirement, the amount of shares awarded
is 133% of the cash amount based on the grant date stock price. As of January 31, 2018, unrecognized stock-based compensation expense
related to these restricted stock awards totaled $0 for the 2015 Plans and $26,323 for the 2017 Plan. The cost of these non-vested
awards is expected to be recognized over a two-year weighted-average period. In addition, as of January 31, 2018, the Company granted
awards for up to an aggregate of 5,221 for the 2015 Plan and 7,568 for the 2017 Plan.
Stock Repurchase Program
On July 19, 2016, the Company’s
board of directors approved a stock repurchase program under which the Company may repurchase up to $2,500,000 of its outstanding
common stock. The Company has not repurchased any stock under this program as of the date of this filing.
Warrant
In October 2014, the Company
issued a five-year warrant that is immediately exercisable to purchase up to 55,500 shares of the Company’s common stock
at an exercise price of $11.00 per share. As of January 31, 2018 and 2017, the warrant to purchase up to 55,500 shares remains
outstanding.
Shelf Registration
On March 24, 2017, the Company filed a
shelf registration statement on Form S-3 (File No. 333-216943) which was declared effective by the SEC on April 11, 2017 (the “Shelf
Registration Statement”). The shelf registration statement permits the Company to sell, from time to time, up to an aggregate
of $30.0 million of various securities, including shares of common stock, shares of preferred stock, debt securities, warrants
to purchase common stock, preferred stock, debt securities, and/or units, rights to purchase common stock, preferred stock, debt
securities, warrants and/or units, units of two or more of the foregoing, or any combination of such securities, not to exceed
one-third of the Company's public float in any 12-month period.
Public Offering
On August 17, 2017, the Company
entered into an underwriting agreement (the “Underwriting Agreement”) with Roth Capital Partners, LLC and Craig-Hallum
Capital Group LLC, as underwriters (collectively, the “Underwriters”), to issue and sell 725,000 shares of common stock,
par value $0.01 per share (“Common Stock”), of the Company at a public offering price of $13.80 per share (the “Offering
Price”) in a firm commitment underwritten public offering. The underwriting discount was $0.966 per share sold in the Offering.
The Offering with respect to the sale of the 725,000 shares of Common Stock closed on August 22, 2017. Pursuant to the Underwriting
Agreement, the Underwriters had the option, exercisable for a period of 45-days after execution of the Underwriting Agreement,
to purchase up to an additional 108,750 shares of the Common Stock at the Offering Price. In September 2017, the Underwriters exercised
their option to purchase 83,750 shares of Common Stock. The net proceeds to the Company from the Offering, including the overallotment,
were approximately $10.1 million, after deducting underwriting discounts and estimated offering expenses payable by the Company.
The offer and sale of shares
of Common Stock in the Offering have been registered under the Securities Act of 1933, as amended, pursuant to the Shelf Registration
Statement. The offer and sale of the shares of Common Stock in the Offering are described in the Company’s prospectus constituting
a part of the Shelf Registration Statement, as supplemented by a final prospectus supplement filed with the Commission on August
18, 2017.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The provision for income taxes
is based on the following pretax income (loss):
Domestic and Foreign Pretax Income (Loss)
|
|
FY18
|
|
|
FY17
|
|
|
FY16
|
|
Domestic
|
|
$
|
7,480
|
|
|
$
|
1,833
|
|
|
$
|
6,140
|
|
Foreign
|
|
|
863
|
|
|
|
4,439
|
|
|
|
(572
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
8,343
|
|
|
$
|
6,272
|
|
|
$
|
5568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense (Benefit)
|
|
|
FY18
|
|
|
|
FY17
|
|
|
|
FY16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
600
|
|
|
$
|
(49
|
)
|
|
$
|
225
|
|
State and other taxes
|
|
|
20
|
|
|
|
29
|
|
|
|
(41
|
)
|
Foreign
|
|
|
1,325
|
|
|
|
1,577
|
|
|
|
1,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred:
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
$
|
5,955
|
|
|
$
|
823
|
|
|
$
|
157
|
|
Valuation allowance-deferred tax asset
|
|
|
3
|
|
|
|
—
|
|
|
|
(181
|
)
|
Foreign
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
$
|
7,903
|
|
|
$
|
2,380
|
|
|
$
|
1,714
|
|
The following is a reconciliation
of the effective income tax rate to the Federal statutory rate:
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
Statutory rate
|
|
|
33.81
|
%
|
|
|
34.00
|
%
|
|
|
34.00
|
%
|
State Income Taxes, Net of Federal Tax Benefit
|
|
|
2.27
|
|
|
|
0.59
|
|
|
|
1.77
|
|
Adjustment to Deferred
|
|
|
—
|
|
|
|
—
|
|
|
|
8.86
|
|
Foreign Dividend and Subpart F Income
|
|
|
(17.19
|
)
|
|
|
2.15
|
|
|
|
10.93
|
|
Transition Tax (net of FTC from Transition Tax)
|
|
|
26.53
|
|
|
|
—
|
|
|
|
—
|
|
Argentina Flow Through Loss
|
|
|
0.38
|
|
|
|
(0.38
|
)
|
|
|
(1.76
|
)
|
Brazil Worthless Stock Deduction
|
|
|
—
|
|
|
|
—
|
|
|
|
(14.21
|
)
|
Permanent Differences
|
|
|
(1.32
|
)
|
|
|
0.46
|
|
|
|
(8.78
|
)
|
Valuation Allowance-Deferred Tax Asset
|
|
|
0.34
|
|
|
|
—
|
|
|
|
(3.26
|
)
|
Rate Change
|
|
|
47.17
|
|
|
|
—
|
|
|
|
—
|
|
Other
|
|
|
2.74
|
|
|
|
1.12
|
|
|
|
3.22
|
|
Effective Rate
|
|
|
94.73
|
%
|
|
|
37.94
|
%
|
|
|
30.77
|
%
|
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The tax effects of temporary
differences which give rise to deferred tax assets at January 31, 2018 and 2017 are summarized as follows:
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
$
|
866
|
|
|
$
|
1,122
|
|
|
$
|
1,267
|
|
US tax loss carryforwards, including work opportunity credit*
|
|
|
4,411
|
|
|
|
8,613
|
|
|
|
9,336
|
|
Accounts receivable and accrued rebates
|
|
|
242
|
|
|
|
266
|
|
|
|
238
|
|
Accrued compensation and other
|
|
|
190
|
|
|
|
109
|
|
|
|
266
|
|
India reserves - US deduction
|
|
|
19
|
|
|
|
75
|
|
|
|
75
|
|
Equity based compensation
|
|
|
126
|
|
|
|
286
|
|
|
|
202
|
|
Foreign tax credit carry-forward
|
|
|
2,199
|
|
|
|
3,698
|
|
|
|
3,388
|
|
State and local carry-forwards
|
|
|
1,017
|
|
|
|
791
|
|
|
|
900
|
|
Argentina timing difference
|
|
|
37
|
|
|
|
51
|
|
|
|
116
|
|
Depreciation and other
|
|
|
90
|
|
|
|
80
|
|
|
|
103
|
|
Amortization
|
|
|
(174
|
)
|
|
|
(240
|
)
|
|
|
(218
|
)
|
Brazil write-down
|
|
|
181
|
|
|
|
—
|
|
|
|
—
|
|
Allowance for Note Receivable - Brazil
|
|
|
552
|
|
|
|
834
|
|
|
|
835
|
|
Deferred tax asset
|
|
|
9,756
|
|
|
|
15,685
|
|
|
|
16,508
|
|
Less valuation allowance
|
|
|
2,199
|
|
|
|
2,170
|
|
|
|
2,170
|
|
Net deferred tax asset - USA
|
|
$
|
7,557
|
|
|
$
|
13,515
|
|
|
$
|
14,338
|
|
*The federal net operating
loss (“NOL”) that is left after FY18 will expire after 1/31/2034 (20 years from the generated date of 1/31/2014). The
credits will begin to expire after 1/31/2020 (10 years from the 1st carryover year generated date of 1/31/2010) and will fully
expire after 1/31/2028.
The state NOLs will begin
to expire after 1/31/2025 and will continue to expire at various periods up until 1/31/2038 when they will be fully expired. The
states have a larger spread because some only carryforward for 15 years and some allow 20 years.
Tax Reform
On December 22, 2017, new federal
tax reform legislation was enacted in the United States, resulting in significant changes from previous tax law. The 2017
Tax Cuts and Jobs Act (the Tax Act) reduces the federal corporate income tax rate to 21% from 35% effective January 1, 2018.
As a result of the Tax Act, we applied a blended U.S. statutory federal income tax rate of 33.811%. The Tax Act requires
us to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax (see below),
re-measuring our US deferred tax assets as well as reassessing the net realizability of our deferred tax assets. The Company
completed this re-measurement and reassessment in the fiscal year. The rate change, along with certain immaterial changes
in tax basis resulting from the 2017 Tax Act, resulted in a reduction of our net deferred tax asset to $7.6 million with related
income tax expense of $5.1 million, thus dramatically increasing our effective tax rate in the fiscal year ended January 31, 2018.
Transition Tax
Upon enactment, there is a one-time
deemed repatriation tax on undistributed foreign earnings and profits (the “transition tax”). This tax is assessed
on the U.S. Shareholder’s share of the foreign corporation’s accumulated foreign earnings and profits that have not
previously been taxed. Earnings in the form of cash and cash equivalents will be taxed at a rate of 15.5% and all other earnings
and profits will be taxed at a rate of 8.0%. We recognized tax expense of $5,120,928 related to the transition tax in 2017.
However, foreign tax credits were used in the amount of $5,120,928 to fully offset this transition tax and the Company will not
incur any cash outlay related to this tax.
We previously considered substantially
all of the earnings in our non-U.S. subsidiaries to be indefinitely reinvested outside the U.S. and, accordingly, recorded no deferred
income taxes on such earnings. At this time, and until we fully analyze the applicable provisions of the Tax Act, our intention
with respect to unremitted foreign earnings is to continue to indefinitely reinvest outside the U.S. those earnings needed for
working capital or additional foreign investment. Apart from the Transition Tax, any incremental deferred income taxes on
the unremitted foreign earnings and profits are not expected to be material.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Income Tax Audits
The Company is subject to US
federal income tax, as well as income tax in multiple US state and local jurisdictions and a number of foreign jurisdictions. Returns
for the years since FY2015 are still open based on statutes of limitation only.
Chinese tax authorities have
performed limited reviews on all Chinese subsidiaries as of tax years 2008 through 2015 with no significant issues noted and we
believe our tax positions are reasonably stated as of January 31, 2018. Weifang Meiyang Products Co., Ltd. (“Meiyang”),
one of our Chinese operations, was changed to a trading company from a manufacturing company in Q1 FY16 and all direct workers
and equipment were transferred from Meiyang to Weifang Lakeland Safety Products Co., Ltd., (“WF”), another entity of
our Chinese operation thereby reducing our tax exposure.
Lakeland Protective Wear, Inc.,
our Canadian subsidiary, is subject to Canadian federal income tax, as well as income tax in the Province of Ontario. Income tax
returns for the 2014 fiscal year and subsequent years are still within the normal reassessment period and open to examination by
tax authorities.
In connection with the exit
from Brazil (Note 13), the Company claimed a worthless stock deduction which generated a tax benefit of approximately USD $9.5
million, net of a USD $2.2 million valuation allowance in FY16. While the Company and its tax advisors believe that this deduction
is valid, there can be no assurance that the IRS will not challenge it and, if challenged, there is no assurance that the Company
will prevail.
The Company’s Board of
Directors has instituted a plan subject to declaration and approval each year to elect to pay annual dividends to the Company from
a portion of Weifang’s future profits, a portion of Meiyang’s future profits and a portion of the UK’s future
profits starting in FY15 and likely from a portion of Beijing’s future profits starting in FY19. In the fiscal year ended
January 31, 2018, a dividend in the amount of $5.0 million was declared, approved and distributed from Weifang China. It is the
Company’s practice and intention to reinvest the earnings of our non-US subsidiaries in their operations with the exception
of the dividend plan
Change in Valuation
Allowance
We record net deferred tax
assets to the extent we believe these assets will more likely than not be realized. The valuation allowance was approximately
$2.2 million for the years ended January 31, 2018, 2017 and 2016.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table sets forth
the computation of basic and diluted earnings per share for “income from continuing operations” and “discontinued
operations” for the years ended January 31, 2018, 2017 and 2016 as follows:
|
|
Years Ended January 31,
(000’s except share information)
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations
|
|
$
|
440
|
|
|
$
|
3,893
|
|
|
$
|
7,790
|
|
Net loss from discontinued operations
|
|
|
—
|
|
|
|
—
|
|
|
$
|
(3,936
|
)
|
Net income
|
|
$
|
440
|
|
|
$
|
3,893
|
|
|
$
|
3,854
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic earnings per share (weighted-average shares which reflect 356,441 shares in the treasury)
|
|
|
7,638,264
|
|
|
|
7,257,553
|
|
|
|
7,171,965
|
|
Effect of dilutive securities from restricted stock plan and from dilutive effect of stock options
|
|
|
53,289
|
|
|
|
69,695
|
|
|
|
82,375
|
|
Denominator for diluted earnings per share (adjusted weighted average shares)
|
|
|
7,691,553
|
|
|
|
7,327,248
|
|
|
|
7,254,340
|
|
Basic earnings per share from continuing operations
|
|
$
|
0.06
|
|
|
$
|
0.54
|
|
|
$
|
1.09
|
|
Basic loss per share from discontinued operations
|
|
|
—
|
|
|
|
—
|
|
|
$
|
(0.55
|
)
|
Basic earnings per share
|
|
$
|
0.06
|
|
|
$
|
0.54
|
|
|
$
|
0.54
|
|
Diluted earnings per share from continuing operations
|
|
$
|
0.06
|
|
|
$
|
0.53
|
|
|
$
|
1.07
|
|
Diluted loss per share from discontinued operations
|
|
|
—
|
|
|
|
—
|
|
|
$
|
(0.54
|
)
|
Diluted earnings per share
|
|
$
|
0.06
|
|
|
$
|
0.53
|
|
|
$
|
0.53
|
|
Defined Contribution
Plan
Pursuant to the terms of the
Company’s 401(k) plan, substantially all US employees over 21 years of age with a minimum period of service are eligible
to participate. The 401(k) plan is administered by the Company and provides for voluntary employee contributions ranging from 1%
to 15% of the employee’s compensation. Beginning in January 2016 the Company changed to a Safe Harbor tiered matching plan
equal to 100% of the first 1% of eligible participant’s compensation contributed to the Plan and 50% of the next 5% of eligible
participant’s compensation contributed to the Plan (maximum Company match 3.5% of salary) and totaled approximately $206,000,
$193,000 and $120,000 in the years ended January 31, 2018, 2017 and 2016, respectively.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
11.
|
Derivative Instruments
and Foreign Currency Exposure
|
The Company is exposed to foreign
currency risk. Management has commenced a derivative instrument program to partially offset this risk by purchasing forward contracts
to sell the Canadian Dollar and the Euro other than the cash flow hedge discussed below. Such contracts are largely timed to expire
with the last day of the fiscal quarter, with a new contract purchased on the first day of the following quarter, to match the
operating cycle of the Company. We designated the forward contracts as derivatives but not as hedging instruments, with loss and
gain recognized in current earnings.
The Company accounts for its
foreign exchange derivative instruments by recognizing all derivatives as either assets or liabilities at fair value, which may
result in additional volatility in current period earnings or other comprehensive income, depending whether the instrument was
designated as a cash flow hedge, as a result of recording recognized and unrecognized gains and losses from changes in the fair
value of derivative instruments.
We have two types of derivatives
to manage the risk of foreign currency fluctuations.
We entered into forward contracts
with financial institutions to manage our currency exposure related to net assets and liabilities denominated in foreign currencies.
Those forward contract derivatives, not designated as hedging instruments, were generally settled quarterly. Gain and loss on those
forward contracts are included in current earnings. There were no outstanding forward contracts at January 31, 2018 or 2017.
We also entered into cash flow
hedge contracts with financial institutions to manage our currency exposure on future cash payments denominated in foreign currencies.
The effective portion of gain or loss on cash flow hedge is reported as a component of accumulated other comprehensive loss. The
notional amount of these contracts was $0.0 million and $1.5 million at January 31, 2018 and 2017, respectively. The corresponding
unrealized income or loss is recorded in the consolidated statements of comprehensive income. The corresponding liability amounted
to $0.0 and $25,826 at January 31, 2018 and 2017, respectively.
|
12.
|
RELATED PARTIES AND TRANSACTIONS
|
The Company paid approximately
$236,000 in FY16 to a printing company owned in part, at that time, by managers of the Company. On October 28, 2015 those managers
of the Company resigned from the board of directors of the printing company, so that they then became independent parties.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
13.
|
THE COMPANY’S EXIT FROM BRAZIL
|
On March 9, 2015, Lakeland Brazil,
S.A. changed its legal form to a Limitada and changed its name to Lake Brasil Industria E Comercio de Roupas E Equipamentos de
Protecao Individual LTDA (“Lakeland Brazil”).
Transfer of Shares Agreement
On July 31, 2015 (the “Closing
Date”), Lakeland and Lakeland Brazil, completed a conditional closing of a Shares Transfer Agreement (the “Shares Transfer
Agreement”) with Zap Comércio de Brindes Corporativos Ltda (“Transferee”), a company owned by an existing
Lakeland Brazil manager, entered into on June 19, 2015. Pursuant to the Shares Transfer Agreement, the Transferee has acquired
all of the shares of Lakeland Brazil owned by the Company. Pursuant to the Shares Transfer Agreement, Transferee paid R$1.00 to
the Company and assumed all liabilities and obligations of Lakeland Brazil, whether arising prior to, on or after the Closing Date.
In order to help enable Lakeland Brazil to have sufficient funds to continue to operate for a period of at least two years following
the Closing Date, the Company provided funding to Lakeland Brazil in the aggregate amount of USD $1,130,000, in cash, in the form
of a capital raise, on or prior to the Closing Date, and agreed to provide an additional R$582,000 (approximately USD $188,000)
(the “Additional Amount”), in the form of a capital raise, to be utilized by Lakeland Brazil to pay off certain specified
liabilities and other potential contingent liabilities. Pursuant to the Shares Transfer Agreement, the Company paid R$992,000 (approximately
USD $320,000) in cash, on July 1, 2015 and issued a non-interest bearing promissory note for the payment to be due for the Additional
Amount (R$582,000) (approximately USD $188,000) on the Closing Date which was paid to Lakeland Brazil in two (2) installments of
(i) R$288,300 (approximately USD $82,000) which was paid on August 1, 2015, and (ii) R$294,500 (approximately USD $84,000) on September
1, 2015. The closing of this agreement was subject to Brazilian government approval of the shares transfer, which was received
in October 2015 (The “Final Closing Date”).
The Company understands that
under the laws of Brazil, a concept of fraudulent conveyance exists, which may hold a parent company liable for the liabilities
of a former Brazilian subsidiary in the event some level of fraud or misconduct is shown during the period that the parent company
owned the subsidiary. While the Company believes that there has been no such fraud or misconduct relating to operations of and
their exit from Brazil, there can be no assurance that the courts of Brazil will not make such a finding. The risk of exposure
to the Company continues to diminish as the former subsidiary continues to operate, as the statute of limitations for claiming
fraudulent conveyance has now expired, as labor cases pre-dating the expiration of the statute of limitations are concluded, except
for the four still open, so as to preclude any such finding, and as pre-shares transfer agreement liabilities are satisfied. As
the former subsidiary has stayed in operation for a period of greater than two years, the Company believes the risk of a finding
of fraudulent conveyance has virtually been eliminated.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following tables summarize
the results of the Brazil business included in the statements of operations for the fiscal year ended January 31, 2016. The Company
did not recognize any income (loss) from discontinued operations during the fiscal years ended January 31, 2017 or January 31,
2018.
|
|
2016 (in 000’s)
|
|
Net sales from discontinuing operations
|
|
$
|
869
|
|
Gross profit from discontinuing operations
|
|
|
164
|
|
Operating expenses from discontinuing operations
|
|
|
763
|
|
Operating loss from discontinuing operations
|
|
|
(599
|
)
|
Interest expense from discontinuing operations
|
|
|
256
|
|
Other expense from discontinuing operations
|
|
|
2,683
|
|
Loss from operation of discontinuing operations (includes a $0.1 million tax benefit from Q1)
|
|
|
(3,538
|
)
|
Non-cash reclassification of Other Comprehensive Income to Statement of Operations (no impact on stockholders’ equity)
|
|
|
(1,286
|
)
|
Loss from disposal of discontinued operations
|
|
|
(515
|
)
|
Loss before taxes for discontinued operations
|
|
|
(5,339
|
)
|
Income tax benefit from discontinued operations
|
|
|
(1,403
|
)
|
Net loss from discontinued operations
|
|
$
|
(3,936
|
)
|
Settlement Agreement –
Arbitration Debt
On June 18, 2015, Lakeland and
its then wholly owned subsidiary Lakeland Brazil (together with Lakeland, the “Brazil Co”), entered into an Amendment
(the “Amendment”) to a Settlement Agreement, dated as of September 11, 2012 (the “Settlement Agreement”),
with two former officers (the “former officers”) of Lakeland Brazil. As part of the original Settlement Agreement,
the parties resolved all alleged outstanding claims against Lakeland Brazil arising from an arbitration proceeding in Brazil involving
Lakeland Brazil and the former officers of Lakeland Brazil for an aggregate amount of approximately USD $8.5 million payable by
Lakeland Brazil to the former officers over a period of six (6) years. As of the June 18, 2015 settlement date, there was a balance
of USD $3.75 million (the “Outstanding Amount”) owed under the Settlement Agreement, which Outstanding Amount was to
be paid by the Company in quarterly installments of USD $250,000 through December 31, 2018.
Pursuant to the Amendment, the
former officers agreed to fully and finally settle the Outstanding Amount owed by the Company for an aggregate lump sum payment
of USD $3.41 million, resulting in a gain of USD $224,000 after allowing for imputed interest on the original Settlement Agreement.
Within five days of receipt of such payment, the former officers provided to Lakeland Brazil the documents needed to have their
lien securing payment of the Outstanding Amount removed on certain real estate owned by Lakeland Brazil and such lien was removed.
The Amendment also contains a general release of claims by the former officers in favor of the Company and its past or present
officers, directors, and other affiliates. The Company’s senior lender at the time, AloStar Bank of Commerce, consented to
the transactions in the Amendment.
Loan Agreement with Transferee
of Brazil Operations
The Company had entered into
a loan agreement (the “Loan Agreement”) on December 11, 2015 with Lakeland Brazil for the amount of R$8,584,012 (approximately
USD $2.29 million) for the purpose of providing funds necessary for Lakeland Brazil to settle its largest outstanding VAT claim
with the State of Bahia. The Company determined that a reserve against the collection of this loan in full was prudent and recorded
this charge in the fiscal year ended January 31, 2016.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
VAT Tax Issues in Brazil
Value Added Tax (“VAT”)
in Brazil is charged at the state level. We commenced operations in Brazil in May 2008 through an acquisition of Qualytextil, S.A.,
which subsequently became Lake Brasil Indústria e Comércio de Roupas e Equipamentos de Proteção Individual
Ltda. (referred to in this Form 10-K as “Lakeland Brazil”). An audit performed on the VAT for the 2007-2009 period
was completed by the State of Bahia (state of domicile for the Lakeland operations in Brazil). In October 2010, the Company
received four claims for 2007-2009 from the State of Bahia, the largest of which was for taxes of R$6.2 million (USD $2.3 million)
and interest, penalties and fees of R$8.3 million (USD $3.1 million), for a total of R$14.6 million (USD $5.4 million). This
large VAT claim was settled in the fiscal year ended January 31, 2016 using funds from the loan described above. Of other claims,
our attorney informed us that three claims totaling R$1.3 million (USD $0.5 million) excluding interest, penalties and fees
of R$2.7 million (USD $0.9 million) were likely to be successfully defended based on state auditor misunderstanding. Any liabilities
hereunder are the responsibility of Lakeland Brazil which, as described above, is no longer owned by the Company.
Labor Claims in Brazil
As disclosed in our periodic
filings with the SEC, we agreed to make certain payments in connection with ongoing labor litigation involving our former Brazilian
subsidiary. While the vast majority of these labor suits have been resolved, there are four which remain active.
The first case was initially
filed in 2010 claiming USD $100,000 owed to plaintiff. This case is on its final appeal to the Brazilian Supreme Court, having
already been ruled upon in favor of Lakeland three (3) times, most recently by the Labor Court Supreme Court. The claimant having
lost four (4) times previously, management firmly believes that Lakeland will continue to prevail in this case. A second case filed
against Lakeland by a former principle in the Brazilian Company purchased by Lakeland, was filed in Labor court in 2014 claiming
Lakeland owed USD $300,000. The Labor court ruled last month that the claimant’s case was outside of the scope of the
Labor court and the case was dismissed. The claimant is appealing within the Labor court system. A third case filed by a former
Lakeland Brazil manager in 2014 was ruled upon in civil court and awarded the claimant USD $100K. Both the claimant and Lakeland
have appealed this decision. In the last case a former employee of our former Brazilian subsidiary filed a claim seeking
approximately US $700,000 that he alleges is due him against an unpaid promissory note. Management firmly believes these claims
to be without any merit and does not anticipate a negative outcome resulting in significant expense to us (see Note 14).
|
14.
|
COMMITMENTS AND CONTINGENCIES
|
Certain conditions may exist
as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only
be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess
such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related
to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s
legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of
the amount of relief sought or expected to be sought therein.
If the assessment of a contingency
indicates that it is probable that a material loss has been or is probable of being incurred and the amount of the liability can
be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment
indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be
estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable
and material, would be disclosed.
Loss contingencies considered
remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Employment Contracts
The Company has employment contracts
expiring through fiscal year ending January 31, 2020, with four principal officers. Pursuant to such contracts, the Company is
committed to aggregate annual base remuneration of $885,529 and $404,439 for FY19 and FY20, respectively.
Leases
Total rental costs under all
operating leases are summarized as follows:
Year ended January 31,
|
|
Gross rental
|
|
2018
|
|
$
|
682,640
|
|
2017
|
|
$
|
506,507
|
|
2016
|
|
$
|
422,487
|
|
Minimum annual rental
commitments for the remaining term of the Company’s noncancelable operating leases relating to manufacturing facilities,
office space and equipment rentals at January 31, 2018, including lease renewals subsequent to year end, are summarized as follows:
Year ending January 31,
|
|
|
|
|
|
|
|
2019
|
|
|
860,011
|
|
2020
|
|
|
516,108
|
|
2021
|
|
|
431,686
|
|
2022
|
|
|
431,686
|
|
2023
|
|
|
311,436
|
|
and thereafter
|
|
|
23,902
|
|
Total
|
|
$
|
2,574,829
|
|
Labor
contingencies in Brazil
Lakeland Brazil, the Company’s
former subsidiary, is currently named in four labor proceedings in Brazilian courts and, due to certain liability assumption provisions
specified in the Shares Transfer Agreement, the Company recorded a liability totaling $150,000 in the fiscal year ended January
31, 2018 to reflect this contingency. The accrual on the balance sheet at January 31, 2018 is $0.2 million (see Note 13).
General
litigation contingencies
The Company is involved in various
litigation proceedings arising during the normal course of business which, in the opinion of the management of the Company, will
not have a material effect on the Company’s financial position, results of operations or cash flows; however, there can be
no assurance as to the ultimate outcome of these matters. As of January 31, 2018, to the best of the Company’s knowledge,
there were no outstanding claims or litigation, except for the labor contingencies in Brazil described above.
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Domestic and international sales
from continuing operations are as follows in millions of dollars:
|
|
Years Ended January 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
Domestic
|
|
$
|
50.45
|
|
|
|
52.55
|
%
|
|
$
|
46.54
|
|
|
|
54.00
|
%
|
|
$
|
56.54
|
|
|
|
56.74
|
%
|
International
|
|
$
|
45.54
|
|
|
|
47.45
|
%
|
|
$
|
39.64
|
|
|
|
46.00
|
%
|
|
$
|
43.11
|
|
|
|
43.26
|
%
|
Total
|
|
$
|
95.99
|
|
|
|
100.00
|
%
|
|
$
|
86.18
|
|
|
|
100.00
|
%
|
|
$
|
99.65
|
|
|
|
100.00
|
%
|
We manage our operations by
evaluating each of our geographic locations. Our US operations include a facility in Alabama (primarily the distribution to customers
of the bulk of our products and the light manufacturing of our chemical, wovens, reflective, and fire products). The Company also
maintains one manufacturing company in China (primarily disposable and chemical suit production), a manufacturing facility in Mexico
(primarily disposable, reflective, fire and chemical suit production) and a small manufacturing facility in India. Our China facilities
produce the majority of the Company’s products and China generates a significant portion of the Company’s international
revenues. We evaluate the performance of these entities based on operating profit, which is defined as income before income taxes,
interest expense and other income and expenses. We have sales forces in the USA, Canada, Mexico, Europe, Latin America, India,
Russia, Kazakhstan and China, which sell and distribute products shipped from the United States, Mexico, India or China. The table
below represents information about reported segments for the years noted therein:
|
|
Year Ended January 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|
(in 000’s)
|
|
USA
|
|
$
|
54.79
|
|
|
$
|
50.46
|
|
|
$
|
60.33
|
|
Other foreign
|
|
|
18.61
|
|
|
|
15.17
|
|
|
|
13.32
|
|
Europe (UK)
|
|
|
9.11
|
|
|
|
8.97
|
|
|
|
14.53
|
|
Mexico
|
|
|
3.87
|
|
|
|
3.27
|
|
|
|
3.65
|
|
China
|
|
|
52.63
|
|
|
|
40.64
|
|
|
|
50.32
|
|
Corporate
|
|
|
1.60
|
|
|
|
1.76
|
|
|
|
1.71
|
|
Less intersegment sales
|
|
|
(44.62
|
)
|
|
|
(34.09
|
)
|
|
|
(44.21
|
)
|
Consolidated sales
|
|
$
|
95.99
|
|
|
$
|
86.18
|
|
|
$
|
99.65
|
|
External Sales from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
|
50.45
|
|
|
$
|
46.54
|
|
|
$
|
56.54
|
|
Other foreign
|
|
|
16.87
|
|
|
|
14.20
|
|
|
|
12.85
|
|
Europe (UK)
|
|
|
9.07
|
|
|
|
8.97
|
|
|
|
14.52
|
|
Mexico
|
|
|
2.48
|
|
|
|
1.66
|
|
|
|
1.61
|
|
China
|
|
|
17.12
|
|
|
|
14.81
|
|
|
|
14.13
|
|
Consolidated external sales
|
|
$
|
95.99
|
|
|
$
|
86.18
|
|
|
$
|
99.65
|
|
Intersegment Sales from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
|
4.34
|
|
|
$
|
3.92
|
|
|
$
|
3.79
|
|
Other foreign
|
|
|
1.74
|
|
|
|
0.97
|
|
|
|
0.47
|
|
Europe (UK)
|
|
|
0.04
|
|
|
|
—
|
|
|
|
0.01
|
|
Mexico
|
|
|
1.39
|
|
|
|
1.61
|
|
|
|
2.04
|
|
China
|
|
|
35.51
|
|
|
|
25.83
|
|
|
|
36.19
|
|
Corporate
|
|
|
1.60
|
|
|
|
1.76
|
|
|
|
1.71
|
|
Consolidated intersegment sales
|
|
$
|
44.62
|
|
|
$
|
34.09
|
|
|
$
|
44.21
|
|
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended January 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|
(in 000’s)
|
|
Operating Profit (Loss) from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
|
10.15
|
|
|
$
|
8.09
|
|
|
$
|
11.38
|
|
Other foreign
|
|
|
2.54
|
|
|
|
1.55
|
|
|
|
(0.12
|
)
|
Europe (UK)
|
|
|
0.16
|
|
|
|
0.34
|
|
|
|
2.65
|
|
Mexico
|
|
|
(0.02
|
)
|
|
|
(0.02
|
)
|
|
|
0.04
|
|
China
|
|
|
3.28
|
|
|
|
4.09
|
|
|
|
4.69
|
|
Corporate
|
|
|
(7.69
|
)
|
|
|
(7.35
|
)
|
|
|
(6.65
|
)
|
Less intersegment profit
|
|
|
0.06
|
|
|
|
0.15
|
|
|
|
(0.18
|
)
|
Consolidated operating profit (loss)
|
|
|
8.48
|
|
|
$
|
6.85
|
|
|
$
|
11.81
|
|
Depreciation and Amortization Expense from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
|
0.12
|
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
Other foreign
|
|
|
0.15
|
|
|
|
0.15
|
|
|
|
0.06
|
|
Europe (UK)
|
|
|
0.01
|
|
|
|
—
|
|
|
|
0.02
|
|
Mexico
|
|
|
0.11
|
|
|
|
0.12
|
|
|
|
0.12
|
|
China
|
|
|
0.25
|
|
|
|
0.25
|
|
|
|
0.38
|
|
Corporate
|
|
|
0.18
|
|
|
|
0.57
|
|
|
|
0.43
|
|
Less intersegment
|
|
|
(0.05
|
)
|
|
|
(0.05
|
)
|
|
|
(0.17
|
)
|
Consolidated depreciation and amortization expense
|
|
$
|
0.77
|
|
|
$
|
1.19
|
|
|
$
|
0.99
|
|
Interest Expense from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Other foreign
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.13
|
|
Europe (UK)
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
0.02
|
|
China
|
|
|
—
|
|
|
|
0.12
|
|
|
|
0.14
|
|
Corporate
|
|
|
0.10
|
|
|
|
0.39
|
|
|
|
0.50
|
|
Consolidated interest expense
|
|
$
|
0.16
|
|
|
$
|
0.62
|
|
|
$
|
0.79
|
|
Income Tax Expense (Benefit) from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
USA (shown in Corporate)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Other foreign
|
|
$
|
0.67
|
|
|
$
|
0.23
|
|
|
$
|
0.21
|
|
Europe (UK)
|
|
|
0.05
|
|
|
|
0.14
|
|
|
|
0.49
|
|
Mexico
|
|
|
—
|
|
|
|
0.08
|
|
|
|
(0.21
|
)
|
China
|
|
|
0.60
|
|
|
|
1.11
|
|
|
|
1.11
|
|
Corporate
|
|
|
6.58
|
|
|
|
0.80
|
|
|
|
1.56
|
|
Less intersegment
|
|
|
0.00
|
|
|
|
0.02
|
|
|
|
(0.04
|
)
|
Consolidated income tax expense (benefit)
|
|
$
|
7.90
|
|
|
$
|
2.38
|
|
|
$
|
3.12
|
|
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended January 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|
(in 000’s)
|
|
Total Assets: *
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
|
67.02
|
|
|
$
|
56.34
|
|
|
|
|
|
Other foreign
|
|
|
20.30
|
|
|
|
18.16
|
|
|
|
|
|
Europe (UK)
|
|
|
4.63
|
|
|
|
3.61
|
|
|
|
|
|
Mexico
|
|
|
4.69
|
|
|
|
3.99
|
|
|
|
|
|
China
|
|
|
31.59
|
|
|
|
30.54
|
|
|
|
|
|
India
|
|
|
(0.85
|
)
|
|
|
(1.36
|
)
|
|
|
|
|
Corporate
|
|
|
22.27
|
|
|
|
26.00
|
|
|
|
|
|
Less intersegment
|
|
|
(55.12
|
)
|
|
|
(52.73
|
)
|
|
|
|
|
Consolidated assets
|
|
$
|
94.53
|
|
|
$
|
84.55
|
|
|
|
|
|
Total Assets Less Intersegment:*
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
|
33.16
|
|
|
$
|
30.94
|
|
|
|
|
|
Other foreign
|
|
|
12.61
|
|
|
|
10.17
|
|
|
|
|
|
Europe (UK)
|
|
|
4.63
|
|
|
|
3.58
|
|
|
|
|
|
Mexico
|
|
|
4.84
|
|
|
|
4.07
|
|
|
|
|
|
China
|
|
|
16.97
|
|
|
|
18.44
|
|
|
|
|
|
India
|
|
|
0.98
|
|
|
|
0.43
|
|
|
|
|
|
Corporate
|
|
|
21.34
|
|
|
|
16.92
|
|
|
|
|
|
Consolidated assets
|
|
$
|
94.53
|
|
|
$
|
84.55
|
|
|
|
|
|
Property and Equipment (excluding assets held for sale at $0.2 million):
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
|
1.99
|
|
|
$
|
2.09
|
|
|
|
|
|
Other foreign
|
|
|
1.50
|
|
|
|
1.55
|
|
|
|
|
|
Europe (UK)
|
|
|
0.03
|
|
|
|
0.03
|
|
|
|
|
|
Mexico
|
|
|
1.99
|
|
|
|
2.05
|
|
|
|
|
|
China
|
|
|
1.92
|
|
|
|
2.05
|
|
|
|
|
|
India
|
|
|
0.15
|
|
|
|
0.03
|
|
|
|
|
|
Corporate
|
|
|
1.18
|
|
|
|
0.75
|
|
|
|
|
|
Less intersegment
|
|
|
0.03
|
|
|
|
(0.02
|
)
|
|
|
|
|
Consolidated long-lived assets
|
|
$
|
8.79
|
|
|
$
|
8.53
|
|
|
|
|
|
Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
|
0.03
|
|
|
$
|
0.04
|
|
|
$
|
0.06
|
|
Other foreign
|
|
|
—
|
|
|
|
0.01
|
|
|
|
0.08
|
|
Europe (UK)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Mexico
|
|
|
0.06
|
|
|
|
0.05
|
|
|
|
0.04
|
|
China
|
|
|
0.12
|
|
|
|
0.06
|
|
|
|
0.16
|
|
India
|
|
|
0.14
|
|
|
|
0.02
|
|
|
|
—
|
|
Corporate
|
|
|
0.56
|
|
|
|
0.23
|
|
|
|
0.50
|
|
Consolidated capital expenditure
|
|
$
|
0.91
|
|
|
$
|
0.41
|
|
|
$
|
0.84
|
|
Goodwill:
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
|
0.87
|
|
|
$
|
0.87
|
|
|
|
|
|
Consolidated goodwill
|
|
$
|
0.87
|
|
|
$
|
0.87
|
|
|
|
|
|
* Negative assets reflect intersegment amounts eliminated in
consolidation
Lakeland Industries, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
16.
|
UNAUDITED QUARTERLY RESULTS OF OPERATIONS (
In
thousands, except for per share amounts):
|
|
|
01/31/18
|
|
|
10/31/2017
|
|
|
7/31/2017
|
|
|
4/30/2017
|
|
|
Total
|
|
Net sales from continuing operations
|
|
$
|
25,157
|
|
|
$
|
23,960
|
|
|
$
|
23,909
|
|
|
$
|
22,961
|
|
|
$
|
95,987
|
|
Gross profit from continuing operations
|
|
$
|
9,902
|
|
|
$
|
9,053
|
|
|
$
|
8,690
|
|
|
$
|
8,558
|
|
|
$
|
36,203
|
|
Operating profit from continuing operations
|
|
$
|
1,157
|
|
|
$
|
2,665
|
|
|
$
|
2,182
|
|
|
$
|
2,473
|
|
|
$
|
8,477
|
|
Net income (loss) from continuing operations
|
|
$
|
(4,919
|
)
|
|
$
|
1,806
|
|
|
$
|
1,842
|
|
|
$
|
1,711
|
|
|
$
|
440
|
|
Basic net earnings (loss) per share – continuing operations
|
|
$
|
(0.64
|
)
|
|
$
|
0.23
|
|
|
$
|
0.25
|
|
|
$
|
0.24
|
|
|
$
|
0.06
|
|
Diluted net earnings (loss) per share – continuing operations
|
|
$
|
(0.64
|
)
|
|
$
|
0.23
|
|
|
$
|
0.25
|
|
|
$
|
0.23
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2017
|
|
|
|
10/31/2016
|
|
|
|
7/31/2016
|
|
|
|
4/30/2016
|
|
|
|
|
|
Net sales from continuing operations
|
|
$
|
20,302
|
|
|
$
|
23,243
|
|
|
$
|
22,269
|
|
|
$
|
20,369
|
|
|
$
|
86,183
|
|
Gross profit from continuing operations
|
|
$
|
7,752
|
|
|
$
|
8,519
|
|
|
$
|
8,590
|
|
|
$
|
6,776
|
|
|
$
|
31,637
|
|
Operating profit (loss) from continuing operations
|
|
$
|
1,799
|
|
|
$
|
2,248
|
|
|
$
|
2,631
|
|
|
$
|
169
|
|
|
$
|
6,847
|
|
Net income from continuing operations
|
|
$
|
946
|
|
|
$
|
1,513
|
|
|
$
|
1,431
|
|
|
$
|
3
|
|
|
$
|
3,893
|
|
Basic net earnings per share – continuing operations
|
|
$
|
0.13
|
|
|
$
|
0.21
|
|
|
$
|
0.20
|
|
|
$
|
0.00
|
|
|
$
|
0.54
|
|
Diluted net earnings per share – continuing operations
|
|
$
|
0.13
|
|
|
$
|
0.21
|
|
|
$
|
0.20
|
|
|
$
|
0.00
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2016
|
|
|
|
10/31/2015
|
|
|
|
7/31/2015
|
|
|
|
4/30/2015
|
|
|
|
|
|
Net sales from continuing operations
|
|
$
|
20,474
|
|
|
$
|
24,888
|
|
|
$
|
29,465
|
|
|
$
|
24,819
|
|
|
$
|
99,646
|
|
Gross profit from continuing operations
|
|
$
|
6,011
|
|
|
$
|
9,248
|
|
|
$
|
11,795
|
|
|
$
|
9,279
|
|
|
$
|
36,333
|
|
Operating profit (loss) from continuing operations
|
|
$
|
(300
|
)
|
|
$
|
3,192
|
|
|
$
|
5,700
|
|
|
$
|
3,220
|
|
|
$
|
11,812
|
|
Net income (loss) from continuing operations
|
|
$
|
(78
|
)
|
|
$
|
2,120
|
|
|
$
|
3,588
|
|
|
$
|
2,160
|
|
|
$
|
7,790
|
|
Basic net earnings (loss) per share – continuing operations
|
|
$
|
(0.01
|
)
|
|
$
|
0.29
|
|
|
$
|
0.50
|
|
|
$
|
0.31
|
|
|
$
|
1.09
|
|
Diluted net earnings (loss) per share – continuing operations
|
|
$
|
(0.01
|
)
|
|
$
|
0.29
|
|
|
$
|
0.50
|
|
|
$
|
0.30
|
|
|
$
|
1.07
|
|