UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 10, 2014
__________________________________________
Lakeland Industries, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 0-15535 | 13-3115216 |
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |
701 Koehler Avenue, Suite 7, Ronkonkoma, New York 11779-7410
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (631) 981-9700
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition |
On September 10, 2014, Lakeland Industries, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended July 31, 2014. A copy of the press release is attached hereto as Exhibit 99.1.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 99.1 | Press Release, dated September 10, 2014 |
The financial information contained in the exhibit to this Form 8-K is being furnished in accordance with Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LAKELAND INDUSTRIES, INC. | ||
| Date: September 10, 2014 | ||
| /s/ Christopher J. Ryan | ||
| Christopher J. Ryan | ||
| President & CEO | ||
EXHIBIT INDEX
| Exhibit | |||
| Number | Description | ||
| 99.1 | Press Release, dated September 10, 2014 | ||
Exhibit 99.1
Lakeland Industries Inc. Reports Fiscal 2015 Second Quarter Financial Results
Manufacturing and Operational Efficiencies Drive
Gross Margin to Highest Level in Company History
RONKONKOMA, NY – September 10, 2014 -- 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 fiscal 2015 second quarter ended July 31, 2014. For financial reporting presentation purposes, the operating results in Brazil are excluded from many of the statements in this announcement because the Company’s commercial lender has excluded Brazil from most covenant calculations as well as other related factors and due to the restructuring of those operations which has resulted in significant losses for the past two years that distorts analysis for the balance of the global businesses.
Financial Results Highlights -- Second Quarter Fiscal 2015 and Recent Company Developments*
| o | Sales worldwide were $24.6M this year and $24.6M last year. Excluding Brazil, sales were $22.8M this year compared with $22.9M last year. |
| o | Sales growth achieved in China/Asia Pacific, UK, Latin America and Canada |
| o | Gross margin worldwide was 32.8%, compared to 30.3% last year. Excluding Brazil, gross margin increased from 32.0% last year to 32.6% this year. Consolidated gross margin reaches highest level ever. |
| o | Operating expenses worldwide increased by $0.4M and increased as a percent of sales to 26.8% from 25.0% last year. Operating expenses for Lakeland worldwide, excluding Brazil, increased by $0.5M, mainly as a result of foreign exchange losses in Argentina, an ongoing Enterprise Resource Planning (ERP) System conversion in the US, higher amortization of bank fees resulting from the financing closed in Q2 last year and new sales staff in Mexico. Operating expenses as a percent of sales, excluding Brazil, increased from 22.5% to 24.7%. |
| o | Operating income was $1.5M vs. $1.3M last year. Excluding Brazil, operating income was $1.8M this year vs. $2.2M last year. |
| o | Brazil Q2 operating loss was reduced to $331K this year vs. $881K last year. |
| o | Adjusted EBITDA worldwide was $1.8M vs. $1.9M last year. Excluding Brazil, Adjusted EBITDA was $2.1M this year vs. $2.7M last year. The reduction in EBITDA was due to the operating expenses as described above. |
| o | Net loss of $(0.4)M, $(0.07) per share vs. income of $4.1M, $0.74 per share last year. |
| o | Net loss this year included a non-cash tax charge of $325K (or $0.06 per share) for a dividend from the Company’s China subsidiary, $0.5M (or $0.08 per share) charge in Brazil for labor litigation and a VAT tax charge; last year’s net income benefited from a reversal of a deferred tax valuation allowance of $4.5M or $0.79 per share. |
| o | Net income this year, without Brazil and without the tax on the dividend, would have been $0.15 per share in Q2 and $0.22 per share for the six-months ended July 31, 2014, compared with $0.10 and $0.28 for the Q2 and six-month periods of the prior year without the reversal of the tax valuation allowance. |
| o | Prepaid $500,000 toward subordinated debt with prepayment penalty waived. |
| o | Completed first phase of the refinancing of Lakeland Brazil. |
| o | The banking covenants are mainly based on world-wide adjusted EBITDA, excluding Brazil. Further there is a covenant prohibiting any new cash investment or advances from the parent company into Brazil. The bank has structured this in a way that allows management the freedom to restructure in Brazil. |
*Includes non-GAAP measures – see table included herein for reconciliation to GAAP measures
Management’s Comments
Christopher J. Ryan, President and Chief Executive Officer of Lakeland Industries, stated, “The growth in our international operations, including Brazil, remain intact. At the same time, while business mix and large order flows resulted in a modest decline in year-over-year domestic sales, business activity remains robust and we foresee increased global demand. To capitalize on this favorable outlook, we continued our strategy from the first quarter of increasing spending on business development activities while aggressively managing our other costs to drive improved profitability. We are beginning to experience the desired results as consolidated gross margin reached the highest level ever for Lakeland and operating profit increased 13% year-over-year amid substantially higher selling, general and administrative expenses intended to drive future sales growth and the operating loss from our subsidiary in Brazil which is seeking to go through a turnaround.
“In Brazil, the turnaround is showing steady indications of progress as it nears completion, with second quarter sales increasing by 6%. For the second consecutive quarter, operating losses declined by over 60% as compared with prior year periods. Breakeven is now within reach for our Brazil subsidiary, although it is still absorbing non-operating expenses due to the resolution of prior issues. After the end of the quarter, we completed the first phase of the refinancing of Lakeland Brazil. This represents a significant step in establishing the subsidiary as financially self-sustaining while maintaining the financial integrity of the parent company through the non-recourse nature of subsidiary financing facilities, although the lending environment in Brazil is more difficult lately due to the recent recessionary economy.
“Given Mexico’s new spending on oil and gas exploration with foreign partners, we expect Mexican sales to grow nicely over the next few years. We have realigned and upgraded the Mexican sales staff to accommodate the economic growth trends in the region. As we look ahead, we remain encouraged by the global growth trends and our strengthening operational and financial condition which should enable us to drive improved profitability from the leverage in our business.”
| Operating Earnings and Adjusted EBITDA - Lakeland |
| Consolidated with and without Brazil |
| ($000) | Quarter Ended July 31, 2014 | Quarter Ended July 31, 2013 | |||||||||||||||||||||||
| Lakeland consolidated | Brazil | Lakeland worldwide excluding Brazil | Lakeland consolidated | Brazil | Lakeland worldwide excluding Brazil | ||||||||||||||||||||
| Sales | $ | 24,610 | $ | 1,798 | $ | 22,812 | $ | 24,639 | $ | 1,701 | $ | 22,938 | |||||||||||||
| Year over Year growth | (0.1 | )% | 5.7 | % | (0.5 | )% | 4.9 | % | (63.8 | )% | 22.0 | % | |||||||||||||
| Gross Profit | 8,062 | 625 | 7,437 | 7,462 | 118 | 7,345 | |||||||||||||||||||
| Gross Margin | 32.8 | % | 34.8 | % | 32.6 | % | 30.3 | % | 6.9 | % | 32.0 | % | |||||||||||||
| Operating Expenses | 6,596 | 956 | 5,640 | 6,165 | 999 | 5,166 | |||||||||||||||||||
| Operating expense as % of sales | 26.8 | % | 53.2 | % | 24.7 | % | 25.0 | % | 58.7 | % | 22.5 | % | |||||||||||||
| Operating Income | 1,468 | (331 | ) | 1,799 | 1,297 | (881 | ) | 2,178 | |||||||||||||||||
| Other income (loss), net-mainly labor litigation and VAT tax in Brazil in current year and foreign exchange losses in Brazil last year | (468 | ) | (450 | ) | (18 | ) | (296 | ) | (360 | ) | 64 | ||||||||||||||
| Add Other Income | (25 | ) | (25 | ) | ----- | 27 | ----- | 27 | |||||||||||||||||
| Add Depreciation and Amortization | 325 | 67 | 258 | 343 | 77 | 266 | |||||||||||||||||||
| EBITDA | 1,300 | (739 | ) | 2,039 | 1,371 | (1,164 | ) | 2,535 | |||||||||||||||||
| Equity Compensation | 25 | ----- | 25 | 84 | ----- | 84 | |||||||||||||||||||
| Financing Fees in Other Expense | ----- | ----- | ----- | (75 | ) | ----- | (75 | ) | |||||||||||||||||
| Qingdao plant relocation costs and costs of sale | ----- | ----- | ----- | 160 | ----- | 160 | |||||||||||||||||||
| Brazil additional Foreign Exchange losses | 25 | 25 | ----- | 360 | 360 | ----- | |||||||||||||||||||
| Brazil additional VAT tax charge | 76 | 76 | ----- | ----- | ----- | ----- | |||||||||||||||||||
| Brazil Labor Litigation | 374 | 374 | ----- | ----- | ----- | ----- | |||||||||||||||||||
| ADJUSTED EBITDA | $ | 1,800 | $ | (264 | ) | $ | 2,064 | $ | 1,900 | $ | (804 | ) | $ | 2,704 | |||||||||||
Numbers may not add due to rounding
*This table is a reconciliation of GAAP to non-GAAP Financial Measures.
**Brazil numbers, as presented in this table, include immaterial intercompany transactions.
| Operating Earnings and Adjusted EBITDA - Lakeland |
| Consolidated with and without Brazil |
| ($000) | Six-Months Ended July 31, 2014 | Six-Months Ended July 31, 2013 | ||||||||||||||||||||||
| Lakeland consolidated | Brazil | Lakeland worldwide excluding Brazil | Lakeland consolidated | Brazil | Lakeland worldwide excluding Brazil | |||||||||||||||||||
| Sales | $ | 48,118 | $ | 3,546 | $ | 44,572 | $ | 46,376 | $ | 3,484 | $ | 42,892 | ||||||||||||
| Year over Year growth | 3.8 | % | 1.8 | % | 3.9 | % | (2.3 | )% | (64.8 | )% | 14.1 | % | ||||||||||||
| Gross Profit | 15,162 | 1,220 | 13,943 | 13,542 | 416 | 13,126 | ||||||||||||||||||
| Gross Margin | 31.5 | % | 34.4 | % | 31.3 | % | 29.2 | % | 11.9 | % | 30.6 | % | ||||||||||||
| Operating Expenses | 13,112 | 1,827 | 11,285 | 12,482 | 2,227 | 10,255 | ||||||||||||||||||
| Operating expense as % of sales | 27.2 | % | 51.5 | % | 25.3 | % | 26.9 | % | 63.9 | % | 23.9 | % | ||||||||||||
| Operating Income | 2,050 | (606 | ) | 2,656 | 1,060 | (1,811 | ) | 2,871 | ||||||||||||||||
| Other income (loss), net-mainly labor litigation and VAT tax in Brazil in current year and foreign exchange losses in Brazil last year | (426 | ) | (411 | ) | (15 | ) | (452 | ) | (387 | ) | (65 | ) | ||||||||||||
| Add Other Income (Expense) | 13 | (25 | ) | 38 | 28 | ----- | 28 | |||||||||||||||||
| Add Depreciation and Amortization | 700 | 142 | 558 | 777 | 167 | 610 | ||||||||||||||||||
| EBITDA | 2,337 | (900 | ) | 3,237 | 1,413 | (2,031 | ) | 3,444 | ||||||||||||||||
| Equity Compensation | 49 | ----- | 49 | 159 | ----- | 159 | ||||||||||||||||||
| Brazil Additional Severance and Executive Recruiter Fees | ----- | ----- | ----- | 80 | 50 | 30 | ||||||||||||||||||
| Financing Fees in Other Expense (adjustments) | ----- | ----- | ----- | 75 | ----- | 75 | ||||||||||||||||||
| Qingdao plant relocation costs and costs of sale | ----- | ----- | ----- | 480 | ----- | 480 | ||||||||||||||||||
| Brazil additional Foreign Exchange losses (gains) | (13 | ) | (13 | ) | ----- | 387 | 387 | ----- | ||||||||||||||||
| Brazil additional VAT tax charge | 76 | 76 | ----- | ----- | ----- | ----- | ||||||||||||||||||
| Brazil Labor Litigation | 374 | 374 | ----- | ----- | ----- | ----- | ||||||||||||||||||
| Inventory Reserve in USA and China-discontinued product lines raw material/finished goods | 300 | ----- | 300 | ----- | ----- | ----- | ||||||||||||||||||
| PA plant shutdown costs | 235 | ----- | 235 | ----- | ----- | ----- | ||||||||||||||||||
| ADJUSTED EBITDA | $ | 3,358 | $ | (463 | ) | $ | 3,821 | $ | 2,594 | $ | (1,594 | ) | $ | 4,188 | ||||||||||
Numbers may not add due to rounding
*This table is a reconciliation of GAAP to non-GAAP Financial Measures.
**Brazil numbers, as presented in this table, include immaterial intercompany transactions.
| Earnings and EPS - Lakeland - Consolidated with and without Brazil |
| Lakeland consolidated | Brazil | Lakeland worldwide excluding Brazil | Lakeland consolidated | Brazil | Lakeland worldwide excluding Brazil | |||||||||||||||||||
| ($000) | Quarter Ended July 31, 2014 | Quarter Ended July 31, 2013 | ||||||||||||||||||||||
| EARNINGS AND EPS: | ||||||||||||||||||||||||
| Operating Income | 1,468 | (331 | ) | 1,799 | 1,297 | (881 | ) | 2,178 | ||||||||||||||||
| Other (Expenses) Income | (468 | ) | (450 | ) | (18 | ) | (296 | ) | (360 | ) | 64 | |||||||||||||
| Add Other Income | (25 | ) | (25 | ) | ----- | 27 | ----- | 27 | ||||||||||||||||
| Interest Expense | (683 | ) | (166 | ) | (517 | ) | (467 | ) | 320 | (787 | ) | |||||||||||||
| Pretax Income | 292 | (972 | ) | 1,264 | 561 | (921 | ) | 1,482 | ||||||||||||||||
| Income Tax (Expense) benefit | (676 | ) | ----- | (676 | ) | 3,611 | ----- | 3,611 | ||||||||||||||||
| Net Income | (384 | ) | (972 | ) | 588 | 4,171 | (921 | ) | 5,093 | |||||||||||||||
| # Shares For Basic EPS (000s) | 5,925 | 5,925 | 5,925 | 5,560 | 5,560 | 5,560 | ||||||||||||||||||
| EPS | $ | (0.065 | ) | $ | (0.164 | ) | $ | 0.099 | $ | 0.750 | $ | (0.166 | ) | $ | 0.916 | |||||||||
| FY14 Includes Reversal of Deferred Tax Valuation $4.5M | ----- | ----- | ----- | 4,544 | ----- | 4,544 | ||||||||||||||||||
| EPS Effect | ----- | ----- | ----- | $ | 0.817 | ----- | $ | 0.817 | ||||||||||||||||
| EPS Without Valuation Reserve Reversal | ----- | ----- | ----- | $ | (0.067 | ) | $ | (0.166 | ) | $ | 0.099 | |||||||||||||
| Six-Months Ended July 31, 2014 | Six-Months Ended July 31, 2013 | |||||||||||||||||||||||
| Operating Income | 2,050 | (606 | ) | 2,656 | 1,060 | (1,811 | ) | 2,871 | ||||||||||||||||
| Other (Expenses) Income | (426 | ) | (411 | ) | (15 | ) | (452 | ) | (387 | ) | (65 | ) | ||||||||||||
| Add Other Income | 13 | (25 | ) | 38 | 28 | ----- | 28 | |||||||||||||||||
| Interest Expense | (1,323 | ) | (328 | ) | (995 | ) | (741 | ) | (562 | ) | (179 | ) | ||||||||||||
| Pretax Income | 314 | (1,370 | ) | 1,684 | (105 | ) | (2,760 | ) | 2,655 | |||||||||||||||
| Income Tax (Expense) benefit | (699 | ) | ----- | (699 | ) | 3,432 | ----- | 3,432 | ||||||||||||||||
| Net Income | (385 | ) | (1,370 | ) | 985 | 3,327 | (2,760 | ) | 6,087 | |||||||||||||||
| # Shares For Basic EPS (000s) | 5,924 | 5,924 | 5,924 | 5,445 | 5,445 | 5,445 | ||||||||||||||||||
| EPS | $ | (0.065 | ) | $ | (0.231 | ) | $ | 0.166 | $ | 0.611 | $ | (0.507 | ) | $ | 1.118 | |||||||||
| FY 14 Includes Reversal of Deferred Tax Valuation $4.5 mm | ----- | ----- | ----- | 4,544 | ----- | 4,544 | ||||||||||||||||||
| EPS Effect | ----- | ----- | ----- | $ | 0.835 | ----- | $ | 0.835 | ||||||||||||||||
| EPS Without Valuation Reserve Reversal | ----- | ----- | ----- | $ | (0.224 | ) | $ | (0.507 | ) | $ | 0.283 | |||||||||||||
Numbers may not add due to rounding
*This table is a reconciliation of GAAP to non-GAAP Financial Measures.
**Brazil numbers, as presented in this table, include immaterial intercompany transactions.
Table continued on next page
Table continued from preceding page
| Lakeland consolidated | Brazil | Lakeland worldwide excluding Brazil | Lakeland consolidated | Brazil | Lakeland worldwide excluding Brazil | |||||||||||||||||||
| Quarter Ended July 31, 2014 | Quarter Ended July 31, 2013 | |||||||||||||||||||||||
| Other Impact on EPS: | ||||||||||||||||||||||||
| Tax Charge for WF Dividend | 325 | ----- | 325 | ----- | ----- | ----- | ||||||||||||||||||
| EPS | $ | 0.055 | ----- | $ | 0.055 | ----- | ----- | ----- | ||||||||||||||||
| Brazil Labor Charge and VAT Settlement | 450 | 450 | ----- | ----- | ----- | ----- | ||||||||||||||||||
| EPS | $ | 0.076 | $ | 0.076 | ----- | ----- | ----- | ----- | ||||||||||||||||
| EPS Without Brazil and Without Tax on WF Dividend / Without Tax Valuation Reserve PY | $ | 0.065 | $ | (0.088 | ) | $ | 0.153 | $ | (0.067 | ) | $ | (0.166 | ) | $ | 0.099 | |||||||||
| Six-Months Ended July 31, 2014 | Six-Months Ended July 31, 2013 | |||||||||||||||||||||||
| Tax Charge for WF Dividend | 325 | ----- | 325 | ----- | ----- | ----- | ||||||||||||||||||
| EPS | $ | 0.055 | ----- | $ | 0.055 | ----- | ----- | ----- | ||||||||||||||||
| EPS Without Brazil and Without Tax on WF Dividend / Without Tax Valuation Reserve PY | $ | (0.011 | ) | $ | (0.231 | ) | $ | 0.220 | $ | (0.224 | ) | (0.507 | ) | $ | 0.283 | |||||||||
Numbers may not add due to rounding
*This table is a reconciliation of GAAP to non-GAAP Financial Measures.
**Brazil numbers, as presented in this table, include immaterial intercompany transactions.
Financial Results Conference Call
Lakeland will host a conference call at 4:30 PM (EDT) today to discuss the Company’s second quarter fiscal 2015 financial results. The conference call will be hosted by Christopher J. Ryan, Lakeland’s Chief Executive Officer and Gary Pokrassa, Lakeland’s Chief Financial Officer. Investors can listen to the call by dialing 877-870-4263 (Domestic) or 412-317-0790 (International) or 855-669-9657 (Canada), Pass Code 10052047.
For a replay of this call, dial 877-344-7529 (Domestic) or 412-317-0088 (International) or 855-669-9658 (Canada), Pass Code 10052047.
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.
Contacts:
| Lakeland Industries | Darrow Associates |
| 631-981-9700 | 631-367-1866 |
| Christopher Ryan, CJRyan@lakeland.com | Jordan Darrow, jdarrow@darrowir.com |
| Gary Pokrassa, GAPokrassa@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, 2014 and January 31, 2014
| July 31, | January 31, | |||||||
| 2014 | 2014 | |||||||
| ASSETS | (Unaudited) | (Unaudited) | ||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 6,173 | $ | 4,555 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $376,700 and $588,800 at July 31, 2014 and January 31, 2014, respectively | 15,988 | 13,795 | ||||||
| Inventories, net | 39,510 | 39,844 | ||||||
| Deferred income taxes | 4,634 | 4,707 | ||||||
| Prepaid income tax | 1,417 | 471 | ||||||
| Other current assets | 2,204 | 2,108 | ||||||
| Total current assets | 69,926 | 65,481 | ||||||
| Property and equipment, net | 11,973 | 12,069 | ||||||
| Prepaid VAT and other taxes, noncurrent | 2,488 | 2,379 | ||||||
| Security deposits | 1,452 | 1,415 | ||||||
| Intangibles, prepaid bank fees and other assets, net | 1,239 | 1,533 | ||||||
| Goodwill | 871 | 871 | ||||||
| Total assets | $ | 87,949 | $ | 83,750 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 8,226 | $ | 8,181 | ||||
| Accrued compensation and benefits | 2,015 | 1,189 | ||||||
| Other accrued expenses | 2,321 | 1,554 | ||||||
| Current maturity of long-term debt | 50 | 50 | ||||||
| Current maturity of arbitration settlement | 1,000 | 1,000 | ||||||
| Short-term borrowing | 4,465 | 2,559 | ||||||
| Borrowings under revolving credit facility | 13,385 | 12,415 | ||||||
| Total current liabilities | 31,462 | 26,949 | ||||||
| Accrued arbitration award in Brazil (net of current maturities) | 3,336 | 3,759 | ||||||
| Long-term portion of Canada and Brazil loans | 1,031 | 1,111 | ||||||
| Subordinated debt, net of OID, including PIK interest | 1,735 | 1,525 | ||||||
| Other liabilities - accrued legal fees in Brazil | 77 | 71 | ||||||
| VAT taxes payable long term | 3,328 | 3,329 | ||||||
| Total liabilities | 40,969 | 36,744 | ||||||
| Stockholders’ equity | ||||||||
| Preferred stock, $.01 par; authorized 1,500,000 shares (none issued) | ----- | ------ | ||||||
| Common stock, $.01 par; authorized 10,000,000 shares, issued 5,717,122 and 5,713,180; outstanding 5,360,681 and 5,356,739 at July 31, 2014 and January 31, 2014, respectively | 57 | 57 | ||||||
| Treasury stock, at cost; 356,441 shares at July 31, 2014 and January 31, 2014. | (3,352 | ) | (3,352 | ) | ||||
| Additional paid-in capital | 53,402 | 53,365 | ||||||
| Accumulated deficit | (978 | ) | (592 | ) | ||||
| Accumulated other comprehensive loss | (2,149 | ) | (2,472 | ) | ||||
| Total stockholders' equity | 46,980 | 47,006 | ||||||
| Total liabilities and stockholders' equity | $ | 87,949 | $ | 83,750 | ||||
Numbers may not add due to rounding
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share data)
(Unaudited)
For the Three Months Ended July 31, 2014 and 2013
| Three Months Ended | Six Months Ended | |||||||||||||||
| July 31, | July 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Net sales | $ | 24,610 | $ | 24,639 | $ | 48,118 | $ | 46,376 | ||||||||
| Cost of goods sold | 16,548 | 17,177 | 32,955 | 32,834 | ||||||||||||
| Gross profit | 8,062 | 7,462 | 15,162 | 13,542 | ||||||||||||
| Operating expenses | 6,595 | 6,165 | 13,112 | 12,482 | ||||||||||||
| Operating profit | 1,467 | 1,297 | 2,050 | 1,060 | ||||||||||||
| Foreign Exchange gain (loss) Brazil | (25 | ) | (360 | ) | 13 | (387 | ) | |||||||||
| Other income (loss), net-mainly labor litigation and VBAT tax in Brazil | (468 | ) | 92 | (426 | ) | (37 | ) | |||||||||
| Interest expense | (683 | ) | (467 | ) | (1,323 | ) | (741 | ) | ||||||||
| Income (loss) before taxes | 291 | 561 | 314 | (105 | ) | |||||||||||
| Income tax expense (benefit) | 676 | (3,611 | ) | 700 | (3,432 | ) | ||||||||||
| Net income (loss) | $ | (386 | ) | $ | 4,171 | $ | (386 | ) | $ | 3,327 | ||||||
| Net income (loss) per common share: | ||||||||||||||||
| Basic | $ | (0.07 | ) | $ | 0.75 | $ | (0.07 | ) | $ | 0.61 | ||||||
| Diluted | $ | (0.07 | ) | $ | 0.74 | $ | (0.07 | ) | $ | 0.60 | ||||||
| Weighted average common and common equivalent shares outstanding: | ||||||||||||||||
| Basic | 5,924,524 | 5,559,573 | 5,923,885 | 5,445,348 | ||||||||||||
| Diluted | 5,924,524 | 5,668,236 | 5,923,885 | 5,519,073 | ||||||||||||
Numbers may not add due to rounding