Lakeland Industries, Inc. Reports Fiscal 2014 Second Quarter Financial Results

Lakeland Industries, Inc. Reports Fiscal 2014 Second Quarter Financial Results 
Reports Operating Income of $1.3 million in Q2 
Sales up 4.9% consolidated and 22.0%, excluding Brazil, over Q2 last year 
RONKONKOMA, N.Y., Sept. 12, 2013 /CNW/ - Lakeland Industries, Inc. (NASDAQ: 
LAKE), a leading global manufacturer of industrial protective clothing for 
industry, municipalities, healthcare and to first responders on the federal, 
state and local levels, today announced  financial results for its second 
quarter of fiscal year 2014 ended July 31, 2013. 
(Logo: http://photos.prnewswire.com/prnh/20120611/NY21959LOGO ) 
The Company completed a new financing of $15.0 million Senior debt and $3.5 
million Junior debt during the recently completed second quarter. Excluding 
operations in Brazil, the Company is reporting the most profitable quarter in 
many years. 
Financial Results Highlights-second quarter of fiscal 2014, and Recent Company 
Developments: 


       --  The Company has earned operating income in the US of $479,000
        in Q2 of the fiscal year ending January 31, 2014, compared with
        an operating loss in the US of $787,000 in Q2 of last year.
    --  Sales of Lakeland worldwide increased 4.9% and, excluding
        Brazil, increased 22.0% year over year.
    --  Gross margin for Lakeland worldwide was 30.3%, the same as last
        year, but excluding Brazil, increased from 30.9% last year to
        32.0% this year.
    --  Operating expenses worldwide decreased by $814,000 and
        decreased as a percent of sales to 25.0% from 29.7% last year.
        Operating expenses for Lakeland worldwide, excluding Brazil,
        decreased by $247,000 even as sales increased by $4,134,000.
        SGA as a percent of sales, excluding Brazil, decreased from
        28.8% to 22.5%.
    --  Adjusted EBITDA increased to $1.9 million this year from
        $543,000 last year. Adjusted EBITDA for Lakeland worldwide,
        excluding Brazil, increased from $721,000 last year to
        $2,704,000 this year.
    --  Most of this improvement was generated in the United States and
        China.
    --  The Company believes it has now completely recovered from the
        loss of the DuPont license in July 2011, as far as gross
        margins and profitability.
    --  Net sales (including Brazil) of $24.6 million in Q2FY14
        compared with $23.5 million in Q2FY13.
    --  Operating income of $1,297,000 Q2FY14 vs. operating income of
        $152,000 in Q2FY13, but this year includes $160,000 for plant
        relocation costs for its factory in Qingdao, China which has
        been sold.
    --  Q2 of fiscal 2014 included a benefit for income taxes of $3.6
        million, resulting from a reversal of a deferred tax asset
        valuation allowance of $4.5 million.
    --  Q2 of fiscal 2013 was positively affected due to a $2.1 million
        adjustment due to the settlement of the Brazilian arbitration
        at less than the amount awarded.
    --  Net profit of $4.2 million ($0.75 per share) this year vs. $3.3
        million profit ($0.61 per share) last year.
    --  The Company completed the sale of its plant in Qingdao, China
        and one of the plants in India.

Operating Earnings and Adjusted EBITDA - Lakeland Consolidated with and without
Brazil (000's)*
              Three Months Ended July 31 2013 || Three Months Ended July 31 2012
                                    Lakeland                           Lakeland
              Lakeland     Brazil** worldwide || Lakeland     Brazil** worldwide
              consolidated          excluding    consolidated          excluding
                                    Brazil                             Brazil

Sales         24,639       1,701    22,938    || 23,499       4,698    18,801

Year over
year growth   4.9%         (63.8)%  22.0%     || -----        -----    -----
(decline)

Gross profit  7,462        117      7,345     || 7,131        1,322    5,809

Gross margin  30.3%        6.9%     32.0%     || 30.3%        28.1%    30.9%

Operating     6,165        998      5,167     || 6,979        1,565    5,414
expenses

Operating
expense as %  25.0%        58.7%    22.5%     || 29.7%        33.3%    28.8%
of sales

Operating     1,297        (881)    2,178     || 152          (243)    395
income (loss)

Less other    (296)        (360)    64        || 1,750        1,750    -----
expenses

Other income  27           -----    27        || (26)         -----    (26)

Add
depreciation  343          77       266       || 371          65       306
and
amortization

EBITDA        1,371        (1,164)  2,535     || 2,247        1,572    675
                                              ||

Equity        84           -----    84        || 46                    46
compensation

Brazil
arbitration   -----        -----    -----     || (2,126)      (2,126)  -----
judgment

Fees relating (75)         -----    (75)      || -----        -----    -----
to financing

QingDao plant
relocation    160          -----    160       || -----        -----    -----
costs and
costs of sale

Brazil
foreign       360          360      -----     || 376          376      -----
exchange
losses
                                              ||

ADJUSTED      1,900        (804)    2,704     || 543          (178)    721
EBITDA
              Six Months Ended July 31 2013   || Six Months Ended July 31 2012

Sales         46,376       3,484    42,892    || 47,480       9,888    37,592

Year over
year growth   (2.3)%       (64.8)%  14.1%     || -----        -----    -----
(decline)
                                              ||

Gross profit  13,542       416      13,126    || 14,443       3,612    10,831

Gross margin  29.2%        11.9%    30.6%     || 30.4%        36.5%    28.8%

Operating     12,482       2,227    10,255    || 14,266       3,481    10,785
expenses

Operating
expense as %  26.9%        63.9%    23.9%     || 30.0%        35.2%    28.7%
of sales

Operating     1,060        (1,811)  2,871     || 177          131      46
income (loss)

Less other    (452)        (387)    (65)      || (8,565)      (8,565)  -----
expenses

Other Income  28           -----    28        || 33           -----    33

Depreciation
and           777          189      588       || 746          137      609
Amortization

EBITDA        1,413        (2,009)  3,422     || (7,609)      (8,297)  688
                                              ||

Equity        159          -----    159       || 177          -----    177
compensation

Brazil
arbitration   -----        -----    -----     || 7,874        7,874    -----
judgment

Additional
Brazil        80           80       -----     || -----        -----    -----
severance

Financing
Fees in Other 75           -----    75        || -----        -----    -----
Expense
(adjustments)

Qingdao plant
relocation    480          -----    480       || -----        -----    -----
costs and
costs of sale

Brazil
Foreign       387          387      -----     || 692          692      -----
Exchange
losses
                                              ||

ADJUSTED      2,594        (1,542)  4,136     || 1,134        269      865
EBITDA

*This table is a reconciliation of GAAP to non-GAAP Financial Measures.

**Brazil numbers, as presented in this table, include immaterial intercompany 
transactions.

Management's Comments

Christopher J. Ryan stated, "As I have said in previous public disclosures, 
our focus and time is being devoted to downsizing the expenses in Brazil to 
conform same to its existing sales and we hope to be there by our fiscal year 
end in January 2014.

"We decreased operating expenses by $1.8 million in the last six months and we 
will continue to reduce expenses where appropriate. In the fiscal year ended 
January 31, 2013, we had $17.0 million of DuPont product revenues and $28.0 
million of such revenues in FY11. In the current Q2, we lost $3.0 million in 
revenues in Brazilian operations compared to last year. We are responding by 
eliminating expenses that supported these revenues, while developing new 
revenues to replace these lost revenues. In spite of the lost DuPont and 
Brazilian revenues, overall sales increased 4.9% in Q2 of fiscal 2014 compared 
with Q2 last year. Most of the gains are in the US and China."

Financial Results Conference Call

Lakeland will host a conference call at 4:30 PM (EDT) today to discuss the 
Company's second quarter fiscal 2014 financial results. The conference call 
will be hosted by Christopher J. Ryan, Lakeland's President and CEO, and Gary 
Pokrassa, Lakeland's Chief Financial Officer.  Investors can listen to the 
call by dialing 800-860-2442 (Domestic), 412-858-4600 (International), or 
1-866-605-3852 (Canada) Pass Code 10033395.

A conference call replay will be available by dialing 877-344-7529 (Domestic) 
or 412-317-0088 (International), Pass Code 10033395.

About Lakeland Industries, Inc.: Lakeland Industries, Inc. (NASDAQ: LAKE) 
manufactures and sells a comprehensive line of safety garments and accessories 
for the industrial protective clothing market.  The Company's products are 
sold by a direct sales force and through independent sales representatives to 
a network of over 1,200 safety and mill supply distributors. These 
distributors in turn supply end user industrial customers such as 
chemical/petrochemical, automobile, steel, glass, construction, smelting, 
janitorial, pharmaceutical and high technology electronics manufacturers, as 
well as hospitals and laboratories. In addition, Lakeland supplies federal, 
state, and local government agencies, fire and police departments, airport 
crash rescue units, the Department of Defense, the Centers for Disease Control 
and Prevention, and many other federal and state agencies.  For more 
information concerning Lakeland, please visit the Company online at 
www.lakeland.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 
1995:  Forward-looking statements involve risks, uncertainties and assumptions 
as described from time to time in Press Releases and Forms 8-K, registration 
statements, quarterly and annual reports and other reports and filings filed 
with the Securities and Exchange Commission or made by management.  All 
statements, other than statements of historical facts, which address 
Lakeland's expectations of sources or uses for capital or which express the 
Company's expectation for the future with respect to financial performance or 
operating strategies can be identified as forward-looking statements.  As a 
result, there can be no assurance that Lakeland's future results will not be 
materially different from those described herein as "believed," "projected," 
"planned," "intended," "anticipated," "estimated" or "expected," or other 
words which reflect the current view of the Company with respect to future 
events.  We caution readers that these forward-looking statements speak only 
as of the date hereof.  The Company hereby expressly disclaims any obligation 
or undertaking to release publicly any updates or revisions to any such 
statements to reflect any change in the Company's expectations or any change 
in events conditions or circumstances on which such statement is based.

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and 
presented in accordance with Generally Accepted Accounting Principles (GAAP), 
the Company uses the following non-GAAP financial measures: EBITDA, Adjusted 
EBITDA and consolidated income, excluding Brazil. The presentation of this 
financial information is not intended to be considered in isolation or as a 
substitute for, or superior to, the financial information prepared and 
presented in accordance with GAAP. The Company uses these non-GAAP financial 
measures for financial and operational decision making and as a means to 
evaluate period-to-period comparisons. The Company believes that they provide 
useful information about operating results, enhance the overall understanding 
of past financial performance and future prospects, and allow for greater 
transparency with respect to key metrics used by management in its financial 
and operational decision making. The non-GAAP financial measures used by the 
Company in this press release may be different from the methods used by other 
companies.

For more information on the non-GAAP financial measures, please see the 
Reconciliation of GAAP to non-GAAP Financial Measures tables in this press 
release. These accompanying tables include details on the GAAP financial 
measures that are most directly comparable to non-GAAP financial measures and 
the related reconciliations between these financial measures.  
    Lakeland Industries, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands except share data)
                                         July 31, 2013 January 31, 2013

ASSETS                                   (Unaudited)

Current assets

Cash and cash equivalents                $5,834        $6,737

Accounts receivable, net                 13,644        13,783

Inventories                              40,418        39,271

Deferred income tax                      3,861         -----

Assets of discontinued operations in     206           813
India

Prepaid income tax                       1,484         1,565

Other current assets                     1,973         1,703

Total current assets                     67,420        63,872

Property and equipment, net              12,461        14,090

Prepaid VAT and other taxes, noncurrent  2,402         2,461

Security deposits                        1,189         1,546

Other assets, net                        1,663         478

Goodwill                                 871           871

Total assets                             $86,006       $83,318

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable                         $9,263        $6,704

Accrued compensation and benefits        991           976

Other accrued expenses                   2,421         2,409

Liabilities of discontinued operations   -----         25
in India

Current maturity of long-term debt       -----         100

Current maturity of arbitration          1,000         1,000
settlement

Short-term borrowing                     2,340         1,579

Term loans to TD Bank                    -----         5,550

Borrowings under revolving credit        10,403        9,559
facility

Total current liabilities                26,418        27,902

Accrued arbitration award in Brazil (net 4,259         4,711
of current maturities)

Canadian warehouse loan, net of current  -----         1,298
maturities

Subordinated debt, net of OID            1,302         -----

Other liabilities - accrued legal fees   76            87
in Brazil

VAT taxes payable long term              3,331         3,329

Total liabilities                        35,385        37,327

Stockholders' equity:

Preferred stock, $.01 par; authorized    -------       --------
1,500,000 shares - (none issued)

Common stock, $.01 par; authorized
10,000,000 shares, issued 5,707,422 and

5,688,600; outstanding 5,350,981 and     57            57
5,332,159 at July 31, 2013 and January
31,

2013, respectively

Treasury stock, at cost; 356,441 shares
at July 31, 2013 and January 31,         (3,352)       (3,352)

2013, respectively

Additional paid-in capital               53,341        50,973

Retained earnings deficit                2,854         (473)

Accumulated other comprehensive loss     (2,280)       (1,214)

Total stockholders' equity               50,620        45,991

Total liabilities and stockholders'      $86,006       $83,318
equity

LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three months and six months ended July 31, 2013 and 2012
                                THREE MONTHS ENDED  SIX MONTHS ENDED
                                July 31,            July 31,
                                2013      2012      2013      2012

Net sales                       $24,639   $23,499   $46,376   $47,480

Cost of goods sold              17,177    16,368    32,834    33,037

Gross profit                    7,462     7,131     13,542    14,443

Operating expenses              6,165     6,979     12,482    14,266

Operating profit                1,297     152       1,060     177

Foreign exchange charge (loss)  (360)     (376)     (387)     (692)
Brazil

Arbitration judgment in Brazil  --------  2,126     --------  (7,874)

Other expense and other income, 91        (26)      (37)      33
net

Interest expense                (467)     (259)     (741)     (495)

Income (loss) before income     561       1,617     (105)     (8,851)
taxes

Benefit from income taxes       3,610     27        3,432     373

Net income (loss)               $4,171    $1,644    $3,327    $(8,478)

Net income (loss) per common
share

Basic                           $0.75     $0.31     $0.61     $(1.62)

Diluted                         $0.74     $0.30     $0.60     $(1.62)

Weighted average common shares
outstanding:

Basic                           5,559,573 5,271,997 5,445,348 5,235,957

Diluted                         5,668,236 5,441,167 5,519,073 5,235,957



SOURCE  Lakeland Industries, Inc. 
Lakeland Industries, 631-981-9700, Christopher Ryan, CJRyan@lakeland.com, Gary 
Pokrassa, GAPokrassa@lakeland.com 
http://www.lakeland.com 
http://photos.prnewswire.com/prnh/20120611/NY21959LOGO 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/September2013/12/c6736.html 
CO: Lakeland Industries, Inc.
ST: New York
NI: TEX RET ERN CONF  
-0- Sep/12/2013 20:01 GMT
 
 
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