Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jan. 31, 2019 | Apr. 10, 2019 | Jul. 31, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jan. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | LAKELAND INDUSTRIES INC | ||
Entity Central Index Key | 0000798081 | ||
Current Fiscal Year End Date | --01-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Trading Symbol | LAKE | ||
Entity Public Float | $ 102,047,013 | ||
Entity Common Stock, Shares Outstanding | 8,013,840 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 99,011 | $ 95,987 |
Cost of goods sold | 65,105 | 59,784 |
Gross profit | 33,906 | 36,203 |
Operating expenses | 30,341 | 27,726 |
Operating profit | 3,565 | 8,477 |
Other income, net | 41 | 29 |
Interest expense | (125) | (163) |
Income before taxes | 3,481 | 8,343 |
Income tax expense | 2,022 | 7,903 |
Net income | $ 1,459 | $ 440 |
Net income per common share: | ||
Basic | $ 0.18 | $ 0.06 |
Diluted | $ 0.18 | $ 0.06 |
Weighted average common shares outstanding: | ||
Basic | 8,111,458 | 7,638,264 |
Diluted | 8,170,401 | 7,691,553 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 1,459 | $ 440 |
Other comprehensive income (loss): | ||
Cash flow hedges | 0 | (26) |
Foreign currency translation adjustments | (601) | 757 |
Other comprehensive income (loss) | (601) | 731 |
Comprehensive income | $ 858 | $ 1,171 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 12,831 | $ 15,788 |
Accounts receivable, net of allowance for doubtful accounts of $434 and $480 at January 31, 2019 and 2018, respectively | 16,477 | 14,119 |
Inventories | 42,365 | 42,919 |
Prepaid VAT and other taxes | 1,478 | 2,119 |
Other current assets | 2,319 | 1,555 |
Total current assets | 75,470 | 76,500 |
Property and equipment, net | 10,781 | 8,789 |
Assets held for sale | 0 | 150 |
Deferred tax assets | 7,267 | 7,557 |
Prepaid VAT and other taxes | 176 | 310 |
Other assets | 158 | 354 |
Goodwill | 871 | 871 |
Total assets | 94,723 | 94,531 |
Current liabilities | ||
Accounts payable | 6,214 | 6,855 |
Accrued compensation and benefits | 1,137 | 1,771 |
Other accrued expenses | 2,825 | 1,384 |
Current maturity of long-term debt | 158 | 158 |
Short-term borrowings | 0 | 211 |
Total current liabilities | 10,335 | 10,379 |
Long-term portion of debt | 1,161 | 1,312 |
Total liabilities | 11,496 | 11,691 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock, $0.01 par; authorized 1,500,000 shares (none issued) | 0 | 0 |
Common stock, $0.01 par; authorized 10,000,000 shares, Issued 8,475,929 and 8,472,640; outstanding 8,013,840 and 8,116,199 at January 31, 2019 and 2018, respectively | 85 | 85 |
Treasury stock, at cost; 462,089 and 356,441 shares at January 31, 2019 and 2018, respectively | (4,517) | (3,352) |
Additional paid-in capital | 75,612 | 74,917 |
Retained earnings | 14,300 | 12,841 |
Accumulated other comprehensive loss | (2,252) | (1,651) |
Total stockholders' equity | 83,228 | 82,840 |
Total liabilities and stockholders' equity | $ 94,723 | $ 94,531 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 434 | $ 480 |
Preferred stock, par value | $ .01 | $ .01 |
Preferred stock, shares authorized | 1,500,000 | 1,500,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ .01 | $ 0.01 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 8,475,929 | 8,472,640 |
Common stock, shares outstanding | 8,013,840 | 8,116,199 |
Treasury stock, shares | 462,089 | 356,441 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Beginning balance, shares at Jan. 31, 2017 | 7,620,215 | (356,441) | ||||
Beginning balance, amount at Jan. 31, 2017 | $ 76 | $ (3,352) | $ 64,764 | $ 12,401 | $ (2,382) | $ 71,507 |
Net income | 440 | 440 | ||||
Other comprehensive income | 731 | 731 | ||||
Restricted stock issued, shares | 43,675 | |||||
Restricted stock issued, amount | $ 0 | 0 | ||||
Restricted stock plan | 424 | 424 | ||||
Return of shares in lieu of payroll tax withholding | (376) | (376) | ||||
Sale of common shares in a public offering, net of issuance costs, shares | 808,750 | |||||
Sale of common shares in a public offering, net of issuance costs, amount | $ 9 | 10,105 | 10,114 | |||
Ending balance, shares at Jan. 31, 2018 | 8,472,640 | (356,441) | ||||
Ending balance, amount at Jan. 31, 2018 | $ 85 | $ (3,352) | 74,917 | 12,841 | (1,651) | 82,840 |
Net income | 1,459 | 1,459 | ||||
Other comprehensive income | (601) | (601) | ||||
Restricted stock issued, shares | 3,289 | |||||
Restricted stock issued, amount | $ 0 | 0 | ||||
Restricted stock plan | 721 | 721 | ||||
Return of shares in lieu of payroll tax withholding | (26) | (26) | ||||
Treasury stock purchased, inclusive of commissions, shares | (105,648) | |||||
Treasury stock purchased, inclusive of commissions, amount | $ (1,165) | (1,165) | ||||
Ending balance, shares at Jan. 31, 2019 | 8,475,959 | (462,089) | ||||
Ending balance, amount at Jan. 31, 2019 | $ 85 | $ (4,517) | $ 75,612 | $ 14,300 | $ (2,252) | $ 83,228 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 1,459 | $ 440 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Provision for (recovery of) doubtful accounts | (45) | 63 |
Deferred income taxes | 290 | 5,957 |
Depreciation and amortization | 965 | 775 |
Stock based and restricted stock compensation | 744 | 424 |
Loss on disposal of property and equipment | 18 | 3 |
Impairment write-down on assets held for sale | 150 | 751 |
(Increase) decrease in operating assets: | ||
Accounts receivable | (2,549) | (3,068) |
Inventories | 152 | (6,992) |
Prepaid VAT and other taxes | 280 | (759) |
Other current assets | (199) | 550 |
Increase (decrease) in operating liabilities: | ||
Accounts payable | (372) | 1,753 |
Accrued expenses and other liabilities | 892 | 860 |
Net cash used by the sale of Brazil | 0 | (109) |
Net cash provided by operating activities | 1,785 | 648 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (3,103) | (905) |
Net cash used in investing activities | (3,103) | (905) |
Cash flows from financing activities: | ||
Net borrowings (repayments) under revolving credit facility | 0 | (4,865) |
Loan repayments, short-term | (206) | (147) |
Loan borrowings, short-term | 175 | 101 |
Loan repayments, long-term | (151) | (854) |
Loan borrowings, long-term | 0 | 1,575 |
UK borrowings (repayments) under line of credit facility and invoice financing facilities, net | (178) | 31 |
Purchase of Treasury Stock under stock repurchase program | (1,165) | 0 |
Shares returned to pay employee taxes under restricted stock program | (26) | (376) |
Proceeds from public offering, net of issuance costs | 0 | 10,114 |
Net cash (used in) provided by financing activities | (1,551) | 5,579 |
Effect of exchange rate changes on cash and cash equivalents | (88) | 101 |
Net increase in cash and cash equivalents | (2,957) | 5,423 |
Cash and cash equivalents at beginning of year | 15,788 | 10,365 |
Cash and cash equivalents at end of year | 12,831 | 15,788 |
Cash paid for interest | 125 | 163 |
Cash paid for taxes | $ 1,667 | $ 1,260 |
BUSINESS AND SUMMARY OF SIGNIFI
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jan. 31, 2019 | |
Accounting Policies [Abstract] | |
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,manufacture and sell a comprehensive line of industrial protective clothing and accessories for the industrial and public protective clothing market. Our products are sold globally by our in-house sales teams, our customer service group, and authorized independent sales representatives to a network of over 1,600 global safety and industrial supply distributors. Our authorized distributors supply end users, such as integrated oil, chemical/petrochemical, automobile, steel, glass, construction, smelting, cleanroom, janitorial, pharmaceutical, and high technology electronics manufacturers, as well as scientific, medical laboratories and the utilities industry. In addition, we supply federal, state and local governmental agencies and departments, such as fire and law enforcement, airport crash rescue units, the Department of Defense, the Department of Homeland Security and the Centers for Disease Control. Internationally, we sell to a mixture of end users directly, and to industrial distributors depending on the particular country and market. Sales are made to more than 50 countries, the majority of which were into China, the European Economic Community (“EEC”), Canada, Chile, Argentina, Russia, Kazakhstan, Colombia, Mexico, Ecuador, India and Southeast Asia. For purposes of this Form 10-K, FY refers to a fiscal year ended January 31; for example, FY19 refers to the fiscal year ended January 31, 2019 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 Inventories 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. 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. 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. As of January 31, 2019, a non-cash impairment charge was recorded to reflect the change in the carrying value from $0.2 million to $0.0 million as the Company believes there is no recoverable value of the asset held for sale previously on the Company’s consolidated balance sheet. Revenue Recognition Substantially all the Company’s revenue is derived from product sales, which consist of sales of the Company’s personal protective wear products to distributors. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year, and virtually all of the Company’s contracts are short-term. The Company recognizes revenue for the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. Generally, payment is due from customers within 30 to 90 days of the invoice date, and the contracts do not have significant financing components. The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Shipping and handling costs associated with outbound freight are included in operating expenses, and for the years ended in FY19 and FY18 aggregated approximately $2.7 million and $2.2 million, respectively. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. The transaction price includes estimates of variable consideration, related to rebates, allowances, and discounts that are reductions in revenue. All estimates are based on the Company's historical experience, anticipated performance, and the Company's best judgment at the time the estimate is made. Estimates for variable consideration are reassessed each reporting period and are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur upon resolution of uncertainty associated with the variable consideration. All the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as quantity times price per unit. The Company has seven revenue generating reportable geographic segments under ASC Topic 280 “Segment Reporting” and 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. The Company believes disaggregation of revenue by geographic region best depicts the nature, amount, timing, and uncertainty of its revenue and cash flows (see table below). Net sales by geographic region and by product line are included below: Twelve Months Ended January 31, (in millions of dollars) 2019 2018 External Sales by region: USA $49.88 $50.45 Other foreign 3.02 2.40 Europe (UK) 9.42 9.07 Mexico 3.51 2.48 Asia 18.00 17.12 Canada 8.56 8.26 Latin America 6.62 6.21 Consolidated external sales $99.01 $95.99 Twelve Months Ended January 31, (in millions of dollars) 2019 2018 External Sales by product lines: Disposables $53.19 $51.56 Chemical 18.03 17.47 Fire 5.98 5.80 Gloves 3.22 3.12 Hi-Vis 6.99 11.26 Wovens 11.61 6.78 Consolidated external sales $99.01 $95.99 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 $802,000 and $443,000 in FY19 and FY18, 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 $182,000 and $280,000 in FY19 and FY18, 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. Foreign Operations and Foreign Currency Translation The Company maintains manufacturing operations in Mexico, India, Argentina, Vietnam 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, Uruguay 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 (loss) gain included in net income for the years ended January 31, 2019 and 2018, were approximately $(0.5) million and $1.1 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. 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. 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 May 2017, the Financial Accounting Standards Board (“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 will apply the amendments in this update prospectively to an award modified on or after February 1, 2018 and does not expect that application of this guidance will have a material impact on its consolidated financial statements and related disclosures. The Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) effective February 1, 2018 using the retrospective transition method. This new accounting standard outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific guidance from US GAAP. The core principle of the new accounting standard is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the adoption of this new accounting standard resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, the Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Adoption of this standard did not result in significant changes to the Company’s accounting policies, business processes, systems or controls, or have a material impact on the Company’s financial position, results of operations and cash flows or related disclosures. As such, prior period financial statements were not recast. New Accounting Pronouncements Not Yet Adopted 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. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases.” The amendments in ASU 2018-10 clarify, correct or remove inconsistencies in the guidance provided under ASU 2016-02 related to sixteen specific issues identified. Also in July 2018, the FASB issued ASU No. 2018-11 “Leases (Topic 842): Targeted Improvements” which now allows entities the option of recognizing the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. The effective date and transition requirements for these two ASUs are the same as the effective date and transition requirements as ASU 2016-02. While the Company continues to assess all potential impacts of the standard, the Company currently believes the most significant impact relates to recording right-to-use assets and related lease liabilities on the consolidated balance sheets. The new standard is effective for us on February 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We expect to adopt the new standard on February 1, 2019 and use the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before February 1, 2019. The new standard provides a number of optional practical expedients in transition. We expect to elect the "package of practical expedients", which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs as well as the practical expedient pertaining to land easements. We do not expect to elect the use-of-hindsight practical expedient. The new standard also provides practical expedients for an entity's ongoing accounting. We currently expect to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also currently expect to elect the practical expedient to not separate lease and non-lease components for all of our leases. We expect that this standard will have a material effect on our consolidated balance sheets, however, we do not expect a material effect on our consolidated statements of operation, comprehensive income, stockholders’ equity and cash flows. While we continue to assess all of the effects of adoption, we currently believe the most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our warehouse, office, and equipment operating leases; and (2) providing significant new disclosures about our leasing activities. On adoption, we currently expect to recognize additional operating liabilities which includes the present value of the total amount disclosed in "Note 12—Commitments and Contingencies", which constitute the remaining minimum rental payments under current leasing standards for our existing operating leases, discounted by our incremental borrowing rate for borrowings of a similar duration on a fully secured basis, with corresponding ROU assets of approximately the same amount. 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. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jan. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | Inventories consist of the following : January 31, 2019 2018 (in $000s) Raw materials $14,986 $14,767 Work-in-process 987 2,357 Finished goods 26,392 25,795 $42,365 $42,919 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Jan. 31, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |
PROPERTY AND EQUIPMENT, NET | Property and equipment consists of the following: January 31, Useful Life in Years 2019 2018 (000’s) (000’s) Machinery and equipment 3-10 $5,070 $3,932 Furniture and fixtures 3-10 316 328 Leasehold improvements Lease term 1,496 1,217 Computer equipment 3 2,669 2,184 Software costs 3 1,187 ----- Land and building (China) 20-30 1,764 1,764 Land and building (Canada) 30 1,856 1,982 Land and buildings (USA) 30 3,487 3,460 Land and buildings (Mexico) 30 2,070 2,070 19,915 16,937 Less accumulated depreciation and amortization (9,134) (8,907) Assets held for sale ----- 150 Construction-in-progress ----- 759 $10,781 $8,939 Depreciation and amortization expense for FY19 and FY18 amounted to $965,451 and $774,742, respectively. During FY19, conditions in Brazil, including the 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 $0.2 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 FY19 consolidated statement of operations. The estimated fair value less costs to sell of the assets written down in FY19, consisting primarily of buildings and land, was approximately $0.0 million. Of the original approximately $1.1 million, the estimated fair value less costs to sell of the assets held for sale at January 31, 2019 is $0.0 million. |
GOODWILL
GOODWILL | 12 Months Ended |
Jan. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | 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, 2019 and 2018. This goodwill is included in the US segment for reporting purposes. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Jan. 31, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 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 revolving 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 the revolver at January 31, 2019 and 2018. 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. 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. The balance under this loan outstanding at Janaury 31, 2019 and January 31, 2018 was USD $0.4 million and USD $0.2 million, respectively. The amount of $0.4 million is due from HSBC as of January 31, 2019, which is included in current assets on the accompanying consolidated balance sheet as of January 31, 2019. 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. 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 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. On 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. This agreement was paid in full in May 2018. On February 26, 2018 Lakeland Argentina and BNA entered into an agreement for Lakeland Argentina to obtain a loan in the amount of ARS $4.3 million (approximately USD $215,000, based on exchange rates at time of closing); such loan is for a term of one year at an interest rate of 32.0% per annum. This agreement was paid in full in January 2019. Below is a table to summarize the debt amounts above (in 000’s): Short-Term Long-term Current Maturity of Long-term 1/31/2019 1/31/2018 1/31/2019 1/31/2018 1/31/2019 1/31/2018 Argentina $----- $31 $----- $----- $ $ UK ----- 180 ----- ----- ----- ----- USA ----- ----- 1,161 1,312 158 158 Totals $----- $211 $1,161 $1,312 $158 $158 Five-year Debt Payout Schedule This schedule reflects the liabilities as of January 31, 2019, 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 Borrowings in USA $1,319 $158 $1,161 $----- $----- $----- $----- Total $1,319 $158 $1,161 $----- $----- $----- $----- |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 12 Months Ended |
Jan. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF RISK | 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 (UK); 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 was approximately $5.4 million total included in the U.S. bank accounts and approximately $7.8 million total in foreign bank accounts as of January 31, 2019. Major Customer No customer accounted for more than 10% of net sales during FY19 and FY18. Major Supplier Our largest supplier, Precision Fabrics Group, accounted for 7.63%, and 11% of total purchases in FY19 and FY18, respectively. There were no other vendors over 10% for either FY19 and FY18. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Jan. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 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 and June 7, 2018, which have been made under the 2017 Plan. Number of shares awarded total Minimum Target Maximum Cap Employees 42,061 63,095 84,126 101,001 Non-Employee Directors 14,414 21,622 28,829 34,595 Total 56,475 84,717 112,995 135,596 Value at grant date (numbers below are rounded to the nearest $100) Minimum Target Maximum Cap Employees $583,600 $875,400 $1,167,200 $1,401,300 Non-Employee Directors 200,000 300,000 400,000 480,000 Total $783,600 $1,175,400 $1,567,200 $1,881,300 Of the total number of shares awarded at Maximum, there are an aggregate of 112,995 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, 2019, and 2018 the Company has recorded a liability in the amount of $25,559, and $1,913, respectively 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, 2021, 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, including SARS, and these expenses were $743,757 for the year ended January 31, 2019 and $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, 2019, there were 72,221 shares vested; of which 46,319 shares were issued and 25,902 shares were returned to the Company to pay employee taxes. As of January 31, 2019, there are no outstanding shares to vest according to the terms of the 2015 Plan. 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, 2019, the Company issued 293,887 fully vested shares of common stock, and at January 31, 2019, 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, 2019, unrecognized stock-based compensation expense totaled $955,075 pursuant to the 2017 Plan based on the maximum performance award level. Such unrecognized stock-based compensation expense totaled $521,593 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, 2019 2018 2012 Plan $ ----- $ 206 2015 Plan ----- 197,284 2017 Plan $ 721,111 225,162 721,111 422,652 Stock appreciation rights (2017 Plan) $ 22,646 $ 1,913 Total stock-based compensation $ 743,757 $ 424,565 Total income tax benefit recognized for stock-based compensation arrangements $ 267,752 $ 153,203 Shares issued under 2017 and 2015 Stock Plans Outstanding Unvested Grants at Maximum at Beginning of FY19 Granted during FY19 Becoming Vested during FY19 Forfeited during FY19 Outstanding Unvested Grants at Maximum at End of January 31, 2019 Restricted stock grants – employees 42,291 41,835 ----- ----- 84,126 Restricted stock grants – non-employee directors 14,493 14,336 ----- ----- 28,829 Retainer in stock – non-employee directors 12,789 17,476 5,221 ----- 25,044 Total restricted stock 69,573 73,647 5,221 ----- 137,999 Weighted average grant date fair value $13.63 $13.66 $10.19 ----- $13.77 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, 2019, unrecognized stock-based compensation expense related to these restricted stock awards totaled $0 for the 2015 Plan and $55,765 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, 2019, the Company issued 5,221 shares from the 2015 Plan and granted awards for up to an aggregate of 25,044 shares 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 repurchased 105,649 shares of stock under this program as of the date of this filing which amounted to, inclusive of commissions, $1,161,736. 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, 2019 and 2018, 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 were 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. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jan. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The provision for income taxes is based on the following pretax income (loss): Domestic and Foreign Pretax Income (Loss) FY19 FY18 Domestic $ (1,116 ) $ 7,480 Foreign 4,597 863 Total $ 3,481 $ 8,343 Income Tax Expense (Benefit) FY19 FY18 Current: Federal $ 45 $ 600 State and other taxes 20 20 Foreign 1,667 1,325 $ 1,732 $ 1,945 Deferred: Domestic $ 290 $ 5,955 Valuation allowance-deferred tax asset ----- 3 Foreign ----- ----- 290 5,958 Total $ 2,022 $ 7,903 The following is a reconciliation of the effective income tax rate to the Federal statutory rate: 2019 2018 Statutory rate 21.00% 33.81% State Income Taxes, Net of Federal Tax Benefit 6.89 2.27 Adjustment to Deferred (0.92) ----- Foreign Dividend and Subpart F Income ----- (17.19) Transition Tax (net of FTC from Transition Tax) ----- 26.53 Argentina Flow Through Loss 1.37 0.38 GILTI 16.85 ----- Permanent Differences 0.63 (1.32) Valuation Allowance-Deferred Tax Asset (24.46) 0.34 Foreign Tax Credit 24.46 Foreign Rate Differential 20.16 Rate Change (5.63) 47.17 Other (2.25) 2.74 Effective Rate 58.09% 94.73% The tax effects of temporary cumulative differences which give rise to deferred tax assets at January 31, 2019 and 2018 are summarized as follows: 2019 2018 Deferred tax assets: Inventories $849 $866 US tax loss carryforwards, including work opportunity credit* 4,290 4,411 Accounts receivable and accrued rebates 233 242 Accrued compensation and other 314 190 India reserves - US deduction 46 19 Equity based compensation 299 126 Foreign tax credit carry-forward 1,348 2,199 State and local carry-forwards 1,116 1,017 Argentina timing difference 32 37 Depreciation and other 59 90 Amortization (193) (174) Brazil write-down 222 181 Allowance for Note Receivable - Brazil ----- 552 Deferred tax asset 8,615 9,756 Less valuation allowance 1,348 2,199 Net deferred tax asset $7,267 $7,557 *The federal net operating loss (“NOL”) that is left after FY19 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% in FY18. 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 FY18. 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. While the Tax Act provides for a modified territorial tax system, beginning in 2018 , 2019 . . The BEAT provisions in the Tax Act pertain to companies with average annual gross receipts of $500 million for the prior 3-year period and eliminate the deduction of certain base-erosion payments made to related foreign corporations and impose a minimum tax if greater than regular tax. Based on current guidelines the Company does not Transition Tax Upon enactment, there was a one-time deemed repatriation tax on undistributed foreign earnings and profits (the “transition tax”). This tax was assessed on the U.S. Shareholder’s share of the foreign corporation’s accumulated foreign earnings and profits that were not previously been taxed. Earnings in the form of cash and cash equivalents was taxed at a rate of 15.5% and all other earnings and profits were 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, the applicable provisions of the Tax Act have been fully analyzed and 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. As stated above, GILTI is recognized in the period it is incurred and is not considered with regard to deferred income tax on unremitted E&P. 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 FY16 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, 2019. 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 12), 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. As mentioned above, it’s the Company’s intention is to reinvest outside the US those earnings needed for working capital or foreign investment. As a result of the transition tax, $5.0 million of foreign income was repatriated at the end of FY18. However, the Company has no intention to repatriate earnings with regards with GILTI.In the fiscal year ended January 31, 2019, no dividends were declared. 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 decreased approximately $0.9 million and $0.0 for the years ended January 31, 2019 and 2018, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jan. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | The following table sets forth the computation of basic and diluted earnings per share for the years ended January 31, 2019 and 2018 as follows: Years Ended January 31, (000’s except share information) 2019 2018 Numerator Net income $1,459 $440 Denominator Denominator for basic earnings per share (weighted-average shares which reflect 362,840 shares in the treasury at January 31, 2019 and 356,441 shares in the treasury at January 31, 2018) 8,111,458 7,638,264 Effect of dilutive securities from restricted stock plan and from dilutive effect of stock options 58,943 53,289 Denominator for diluted earnings per share (adjusted weighted average shares) 8,170,401 7,691,553 Basic earnings per share $0.18 $0.06 Diluted earnings per share $0.18 $0.06 |
BENEFIT PLANS
BENEFIT PLANS | 12 Months Ended |
Jan. 31, 2019 | |
Retirement Benefits [Abstract] | |
BENEFIT PLANS | 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 100% 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 $209,100 and $198,000 in the years ended January 31, 2019 and 2018, respectively. |
DERIVATIVE INSTRUMENTS AND FORE
DERIVATIVE INSTRUMENTS AND FOREIGN CURRENCY EXPOSURE | 12 Months Ended |
Jan. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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 one type 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, 2019 or 2018. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jan. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
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. 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”). Although the Company formally completed the terms of the “Shares Transfer Agreement”, pursuant to which our entire equity interest in our former Brazilian subsidiary (“Lakeland Brazil”) was transferred during the fiscal year ended January 31, 2016, we may continue to be exposed to certain liabilities arising in connection with the operations of Lakeland Brazil, which was shut down in late March 2019. The Company understands that under the laws of Brazil, a parent company may be held liable for the liabilities of a former Brazilian subsidiary in the event of fraud, misconduct, or under various theories. In this respect, as regards labor claims, a parent company could conceivably be held liable for the liabilities of a former Brazilian subsidiary. Although the Company would have the right of adversary system, full defense and due process, in case of a potential litigation, there can be no assurance as to the findings of the courts in Brazil. 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. The Company determined in the current fiscal year ended January 31, 2019 this note would not be repaid and therefore wrote it off in its entirety. 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 labor cases that remain active and a civil case filed by a former officer of our former Brazilian subsidiary, in which Lakeland was named as a co-defendant. 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 officer of Lakeland Brazil , was filed in Labor court in 2014 claiming Lakeland owed USD $300,000. The Labor court ruled 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 $100,000. Both the claimant and Lakeland have appealed this decision. In the last case a former officer of our former Brazilian subsidiary filed a claim seeking approximately USD $700,000 that he alleges is due to him against an unpaid promissory note. Lakeland has not been served with process and no decision on the merits has been issued in this case yet. Management firmly believes these claims to be without any merit and does not anticipate a negative outcome resulting in significant expense to us. Lakeland Brazil may face new labor lawsuits in the short term as a result of the shutdown of its operations in March 2019. The Company has no obligation under the Shares Transfer Agreement to make any additional payments in connection with these potential new labor lawsuits. The Company also understands that under the labor laws of Brazil, a parent company may be held liable for the labor liabilities of a former Brazilian subsidiary in the case of fraud, misconduct, or under various theories. Although the Company would have the right of adversary system, full defense and due process in case of a potential litigation, there can be no assurance as to the findings of the courts of Brazil. There are additional cases in Labor and Civil courts against Lakeland Brazil in which Lakeland is not a party, and other outstanding monetary alligations of Lakeland Brazil. In FY19, the Company recorded an accrual of $1.2 million for professional fees and litigation reserves associated with labor claims in Brazil. The accrual on the balance sheet at January 31, 2019 is $1.2 million. 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 $0.4 million in the fiscal year ended January 31, 2019 to reflect this contingency. The accrual on the balance sheet at January 31, 2019 is $0.4 million (see Note 12). Update for additional $800K 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, 2019, to the best of the Company’s knowledge, there were no outstanding claims or litigation, except for the labor contingencies in Brazil described above. 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 $890,000 and $175,417 for FY20 and FY21, respectively. Leases Total rental costs under all operating leases are summarized as follows: Year ended January 31, Gross rental 2019 $1,022,162 2018 $841,235 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, 2019, including lease renewals subsequent to year end, are summarized as follows: Year ending January 31, 2020 761,350 2021 446,494 2022 435,310 2023 313,633 2024 8,418 and thereafter 8,944 Total $1,974,149 |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Jan. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | Domestic and international sales from continuing operations are as follows in millions of dollars: Years Ended January 31, 2019 2018 Domestic $49.88 50.38% $50.45 52.55% International 49.13 49.62% $45.54 47.45% Total $99.01 100.00% $95.99 100.00% Years Ended January 31, 2019 2018 (in 000’s) (in 000’s) USA $54.72 $54.79 Other foreign 5.52 3.85 Europe (UK) 9.42 9.11 Mexico 4.90 3.87 Asia 56.36 52.63 Canada 8.58 8.26 Latin America 7.05 6.50 Corporate 0.75 1.60 Less intersegment sales (48.29) (44.62) Consolidated sales $99.01 $95.99 External Sales USA $49.88 $50.45 Other foreign 3.02 2.40 Europe (UK) 9.42 9.07 Mexico 3.51 2.48 Asia 18.00 17.12 Canada 8.56 8.26 Latin America 6.62 6.21 Consolidated external sales $99.01 $95.99 Intersegment Sales USA $4.84 $4.34 Other foreign 2.52 1.45 Europe (UK) ----- 0.04 Mexico 1.38 1.39 Asia 38.35 35.51 Canada 0.02 ----- Latin America 0.43 0.29 Corporate 0.75 1.60 Consolidated intersegment sales $48.29 $44.62 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), a manufacturing facility in Veitnam (primarily disposable 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: Years Ended January 31, 2019 2018 (in 000’s) (in 000’s) Operating Profit (Loss): USA $7.02 $10.15 Other foreign 0.26 0.51 Europe (UK) 0.20 0.16 Mexico 0.07 (0.02) Asia 2.63 3.28 Canada 1.01 1.42 Latin America 0.70 0.61 Corporate (8.22) (7.69) Less intersegment profit (0.10) 0.06 Consolidated operating profit (loss) $3.57 $8.48 Depreciation and Amortization Expense: USA $0.22 $0.12 Other foreign 0.05 0.03 Europe (UK) 0.01 0.01 Mexico 0.13 0.11 Asia 0.27 0.25 Canada 0.06 0.08 Latin America 0.04 0.04 Corporate 0.22 0.18 Less intersegment (0.03) (0.05) Consolidated depreciation and amortization expense $0.97 $0.77 Interest Expense: Other foreign $----- $----- Europe (UK) 0.01 0.01 Canada ----- 0.04 Latin America 0.04 0.01 Corporate 0.08 0.10 Consolidated interest expense $0.13 $0.16 Income Tax Expense (Benefit): USA (shown in Corporate) $----- $----- Other foreign ----- 0.06 Europe (UK) 0.03 0.05 Mexico 0.12 ----- Asia 1.04 0.60 Canada 0.23 0.40 Latin America 0.26 0.21 Corporate 0.35 6.58 Less intersegment (0.01) 0.00 Consolidated income tax expense (benefit) $2.02 $7.90 Years Ended January 31, 2019 2018 (in 000’s) (in 000’s) Total Assets: * USA $67.26 $67.02 Other foreign 1.54 1.29 Europe (UK) 4.37 4.63 Mexico 5.00 4.69 Asia 39.52 31.59 Canada 7.47 6.07 Latin America 7.42 12.09 Corporate 25.07 22.27 Less intersegment (62.93) (55.12) Consolidated assets $94.72 $94.53 Total Assets Less Intersegment:* USA $29.76 $33.16 Other foreign 2.85 2.73 Europe (UK) 4.36 4.63 Mexico 5.13 4.84 Asia 20.97 16.97 Canada 6.64 5.27 Latin America 5.27 5.59 Corporate 19.74 21.34 Consolidated assets $94.72 $94.53 Property and Equipment (excluding asset held for sale at $0.2 million at January 31, 2018): USA $2.25 $1.99 Other foreign 0.19 0.16 Europe (UK) 0.01 0.03 Mexico 2.14 1.99 Asia 3.17 1.92 Canada 1.26 1.38 Latin America 0.07 0.11 Corporate 1.62 1.18 Less intersegment 0.07 0.03 Consolidated long-lived assets $10.78 $8.79 Capital Expenditures: USA $0.01 $0.03 Other foreign 0.07 0.14 Europe (UK) ----- ----- Mexico 0.28 0.06 Asia 1.64 0.12 Canada 0.03 ----- Latin America ----- ----- Corporate 1.07 0.56 Consolidated capital expenditure $3.10 $0.91 Goodwill: USA $0.87 $0.87 Consolidated goodwill $0.87 $0.87 Negative assets reflect intersegment amounts eliminated in consolidation |
BUSINESS AND SUMMARY OF SIGNI_2
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jan. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Lakeland Industries, Inc. and Subsidiaries (“Lakeland,” the “Company,” “we,” “our” or “us”), a Delaware corporation organized in April 1986,manufacture and sell a comprehensive line of industrial protective clothing and accessories for the industrial and public protective clothing market. Our products are sold globally by our in-house sales teams, our customer service group, and authorized independent sales representatives to a network of over 1,600 global safety and industrial supply distributors. Our authorized distributors supply end users, such as integrated oil, chemical/petrochemical, automobile, steel, glass, construction, smelting, cleanroom, janitorial, pharmaceutical, and high technology electronics manufacturers, as well as scientific, medical laboratories and the utilities industry. In addition, we supply federal, state and local governmental agencies and departments, such as fire and law enforcement, airport crash rescue units, the Department of Defense, the Department of Homeland Security and the Centers for Disease Control. Internationally, we sell to a mixture of end users directly, and to industrial distributors depending on the particular country and market. Sales are made to more than 50 countries, the majority of which were into China, the European Economic Community (“EEC”), Canada, Chile, Argentina, Russia, Kazakhstan, Colombia, Mexico, Ecuador, India and Southeast Asia. For purposes of this Form 10-K, FY refers to a fiscal year ended January 31; for example, FY19 refers to the fiscal year ended January 31, 2019 |
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. |
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 and 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. |
Inventories | 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. |
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. |
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. As of January 31, 2019, a non-cash impairment charge was recorded to reflect the change in the carrying value from $0.2 million to $0.0 million as the Company believes there is no recoverable value of the asset held for sale previously on the Company’s consolidated balance sheet. |
Revenue Recognition | Substantially all the Company’s revenue is derived from product sales, which consist of sales of the Company’s personal protective wear products to distributors. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year, and virtually all of the Company’s contracts are short-term. The Company recognizes revenue for the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. Generally, payment is due from customers within 30 to 90 days of the invoice date, and the contracts do not have significant financing components. The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Shipping and handling costs associated with outbound freight are included in operating expenses, and for the years ended in FY19 and FY18 aggregated approximately $2.7 million and $2.2 million, respectively. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. The transaction price includes estimates of variable consideration, related to rebates, allowances, and discounts that are reductions in revenue. All estimates are based on the Company's historical experience, anticipated performance, and the Company's best judgment at the time the estimate is made. Estimates for variable consideration are reassessed each reporting period and are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur upon resolution of uncertainty associated with the variable consideration. All the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as quantity times price per unit. The Company has seven revenue generating reportable geographic segments under ASC Topic 280 “Segment Reporting” and 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. The Company believes disaggregation of revenue by geographic region best depicts the nature, amount, timing, and uncertainty of its revenue and cash flows (see table below). Net sales by geographic region and by product line are included below: Twelve Months Ended January 31, (in millions of dollars) 2019 2018 External Sales by region: USA $49.88 $50.45 Other foreign 3.02 2.40 Europe (UK) 9.42 9.07 Mexico 3.51 2.48 Asia 18.00 17.12 Canada 8.56 8.26 Latin America 6.62 6.21 Consolidated external sales $99.01 $95.99 Twelve Months Ended January 31, (in millions of dollars) 2019 2018 External Sales by product lines: Disposables $53.19 $51.56 Chemical 18.03 17.47 Fire 5.98 5.80 Gloves 3.22 3.12 Hi-Vis 6.99 11.26 Wovens 11.61 6.78 Consolidated external sales $99.01 $95.99 |
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 $802,000 and $443,000 in FY19 and FY18, 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 $182,000 and $280,000 in FY19 and FY18, 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. |
Foreign Operations and Foreign Currency Translation | The Company maintains manufacturing operations in Mexico, India, Argentina, Vietnam 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, Uruguay 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 (loss) gain included in net income for the years ended January 31, 2019 and 2018, were approximately $(0.5) million and $1.1 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. |
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. |
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 May 2017, the Financial Accounting Standards Board (“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 will apply the amendments in this update prospectively to an award modified on or after February 1, 2018 and does not expect that application of this guidance will have a material impact on its consolidated financial statements and related disclosures. The Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) effective February 1, 2018 using the retrospective transition method. This new accounting standard outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific guidance from US GAAP. The core principle of the new accounting standard is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the adoption of this new accounting standard resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, the Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Adoption of this standard did not result in significant changes to the Company’s accounting policies, business processes, systems or controls, or have a material impact on the Company’s financial position, results of operations and cash flows or related disclosures. As such, prior period financial statements were not recast. New Accounting Pronouncements Not Yet Adopted 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. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases.” The amendments in ASU 2018-10 clarify, correct or remove inconsistencies in the guidance provided under ASU 2016-02 related to sixteen specific issues identified. Also in July 2018, the FASB issued ASU No. 2018-11 “Leases (Topic 842): Targeted Improvements” which now allows entities the option of recognizing the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. The effective date and transition requirements for these two ASUs are the same as the effective date and transition requirements as ASU 2016-02. While the Company continues to assess all potential impacts of the standard, the Company currently believes the most significant impact relates to recording right-to-use assets and related lease liabilities on the consolidated balance sheets. The new standard is effective for us on February 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We expect to adopt the new standard on February 1, 2019 and use the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before February 1, 2019. The new standard provides a number of optional practical expedients in transition. We expect to elect the "package of practical expedients", which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs as well as the practical expedient pertaining to land easements. We do not expect to elect the use-of-hindsight practical expedient. The new standard also provides practical expedients for an entity's ongoing accounting. We currently expect to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also currently expect to elect the practical expedient to not separate lease and non-lease components for all of our leases. We expect that this standard will have a material effect on our consolidated balance sheets, however, we do not expect a material effect on our consolidated statements of operation, comprehensive income, stockholders’ equity and cash flows. While we continue to assess all of the effects of adoption, we currently believe the most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our warehouse, office, and equipment operating leases; and (2) providing significant new disclosures about our leasing activities. On adoption, we currently expect to recognize additional operating liabilities which includes the present value of the total amount disclosed in "Note 12—Commitments and Contingencies", which constitute the remaining minimum rental payments under current leasing standards for our existing operating leases, discounted by our incremental borrowing rate for borrowings of a similar duration on a fully secured basis, with corresponding ROU assets of approximately the same amount. 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. |
BUSINESS AND SUMMARY OF SIGNI_3
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Accounting Policies [Abstract] | |
Disaggregation of revenue | Twelve Months Ended January 31, (in millions of dollars) 2019 2018 External Sales by region: USA $49.88 $50.45 Other foreign 3.02 2.40 Europe (UK) 9.42 9.07 Mexico 3.51 2.48 Asia 18.00 17.12 Canada 8.56 8.26 Latin America 6.62 6.21 Consolidated external sales $99.01 $95.99 Twelve Months Ended January 31, (in millions of dollars) 2019 2018 External Sales by product lines: Disposables $53.19 $51.56 Chemical 18.03 17.47 Fire 5.98 5.80 Gloves 3.22 3.12 Hi-Vis 6.99 11.26 Wovens 11.61 6.78 Consolidated external sales $99.01 $95.99 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | January 31, 2019 2018 (in $000s) Raw materials $14,986 $14,767 Work-in-process 987 2,357 Finished goods 26,392 25,795 $42,365 $42,919 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | January 31, Useful Life in Years 2019 2018 (000’s) (000’s) Machinery and equipment 3-10 $5,070 $3,932 Furniture and fixtures 3-10 316 328 Leasehold improvements Lease term 1,496 1,217 Computer equipment 3 2,669 2,184 Software costs 3 1,187 ----- Land and building (China) 20-30 1,764 1,764 Land and building (Canada) 30 1,856 1,982 Land and buildings (USA) 30 3,487 3,460 Land and buildings (Mexico) 30 2,070 2,070 19,915 16,937 Less accumulated depreciation and amortization (9,134) (8,907) Assets held for sale ----- 150 Construction-in-progress ----- 759 $10,781 $8,939 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Short-Term Long-term Current Maturity of Long-term 1/31/2019 1/31/2018 1/31/2019 1/31/2018 1/31/2019 1/31/2018 Argentina $----- $31 $----- $----- $ $ UK ----- 180 ----- ----- ----- ----- USA ----- ----- 1,161 1,312 158 158 Totals $----- $211 $1,161 $1,312 $158 $158 |
Schedule of maturities of long-term debt | Total 1 Year or less 2 Years 3 Years 4 Years 5 Years After 5 Years Borrowings in USA $1,319 $158 $1,161 $----- $----- $----- $----- Total $1,319 $158 $1,161 $----- $----- $----- $----- |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Equity [Abstract] | |
Schedule of nonvested share activity | Number of shares awarded total Minimum Target Maximum Cap Employees 42,061 63,095 84,126 101,001 Non-Employee Directors 14,414 21,622 28,829 34,595 Total 56,475 84,717 112,995 135,596 Value at grant date (numbers below are rounded to the nearest $100) Minimum Target Maximum Cap Employees $583,600 $875,400 $1,167,200 $1,401,300 Non-Employee Directors 200,000 300,000 400,000 480,000 Total $783,600 $1,175,400 $1,567,200 $1,881,300 |
Schedule of employee service share-based compensation | Year Ended January 31, 2019 2018 2012 Plan $ ----- $ 206 2015 Plan ----- 197,284 2017 Plan $ 721,111 225,162 721,111 422,652 |
Schedule of share-based compensation, restricted stock units award activity | Shares issued under 2017 and 2015 Stock Plans Outstanding Unvested Grants at Maximum at Beginning of FY19 Granted during FY19 Becoming Vested during FY19 Forfeited during FY19 Outstanding Unvested Grants at Maximum at End of January 31, 2019 Restricted stock grants – employees 42,291 41,835 ----- ----- 84,126 Restricted stock grants – non-employee directors 14,493 14,336 ----- ----- 28,829 Retainer in stock – non-employee directors 12,789 17,476 5,221 ----- 25,044 Total restricted stock 69,573 73,647 5,221 ----- 137,999 Weighted average grant date fair value $13.63 $13.66 $10.19 ----- $13.77 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | Domestic and Foreign Pretax Income (Loss) FY19 FY18 Domestic $ (1,116 ) $ 7,480 Foreign 4,597 863 Total $ 3,481 $ 8,343 Income Tax Expense (Benefit) FY19 FY18 Current: Federal $ 45 $ 600 State and other taxes 20 20 Foreign 1,667 1,325 $ 1,732 $ 1,945 Deferred: Domestic $ 290 $ 5,955 Valuation allowance-deferred tax asset ----- 3 Foreign ----- ----- 290 5,958 Total $ 2,022 $ 7,903 |
Schedule of effective income tax rate reconciliation | 2019 2018 Statutory rate 21.00% 33.81% State Income Taxes, Net of Federal Tax Benefit 6.89 2.27 Adjustment to Deferred (0.92) ----- Foreign Dividend and Subpart F Income ----- (17.19) Transition Tax (net of FTC from Transition Tax) ----- 26.53 Argentina Flow Through Loss 1.37 0.38 GILTI 16.85 ----- Permanent Differences 0.63 (1.32) Valuation Allowance-Deferred Tax Asset (24.46) 0.34 Foreign Tax Credit 24.46 Foreign Rate Differential 20.16 Rate Change (5.63) 47.17 Other (2.25) 2.74 Effective Rate 58.09% 94.73% |
Schedule of deferred tax assets and liabilities | 2019 2018 Deferred tax assets: Inventories $849 $866 US tax loss carryforwards, including work opportunity credit* 4,290 4,411 Accounts receivable and accrued rebates 233 242 Accrued compensation and other 314 190 India reserves - US deduction 46 19 Equity based compensation 299 126 Foreign tax credit carry-forward 1,348 2,199 State and local carry-forwards 1,116 1,017 Argentina timing difference 32 37 Depreciation and other 59 90 Amortization (193) (174) Brazil write-down 222 181 Allowance for Note Receivable - Brazil ----- 552 Deferred tax asset 8,615 9,756 Less valuation allowance 1,348 2,199 Net deferred tax asset $7,267 $7,557 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | Years Ended January 31, (000’s except share information) 2019 2018 Numerator Net income $1,459 $440 Denominator Denominator for basic earnings per share (weighted-average shares which reflect 362,840 shares in the treasury at January 31, 2019 and 356,441 shares in the treasury at January 31, 2018) 8,111,458 7,638,264 Effect of dilutive securities from restricted stock plan and from dilutive effect of stock options 58,943 53,289 Denominator for diluted earnings per share (adjusted weighted average shares) 8,170,401 7,691,553 Basic earnings per share $0.18 $0.06 Diluted earnings per share $0.18 $0.06 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease rental cost | Year ended January 31, Gross rental 2019 $1,022,162 2018 $841,235 |
Schedule of future minimum rental payments for operating leases | Year ending January 31, 2020 761,350 2021 446,494 2022 435,310 2023 313,633 2024 8,418 and thereafter 8,944 Total $1,974,149 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of revenue from external customers geographic areas | Years Ended January 31, 2019 2018 Domestic $49.88 50.38% $50.45 52.55% International 49.13 49.62% $45.54 47.45% Total $99.01 100.00% $95.99 100.00% |
Schedule of revenue from external customers and long-lived assets, by geographical areas | Years Ended January 31, 2019 2018 (in 000’s) (in 000’s) USA $54.72 $54.79 Other foreign 5.52 3.85 Europe (UK) 9.42 9.11 Mexico 4.90 3.87 Asia 56.36 52.63 Canada 8.58 8.26 Latin America 7.05 6.50 Corporate 0.75 1.60 Less intersegment sales (48.29) (44.62) Consolidated sales $99.01 $95.99 External Sales USA $49.88 $50.45 Other foreign 3.02 2.40 Europe (UK) 9.42 9.07 Mexico 3.51 2.48 Asia 18.00 17.12 Canada 8.56 8.26 Latin America 6.62 6.21 Consolidated external sales $99.01 $95.99 Intersegment Sales USA $4.84 $4.34 Other foreign 2.52 1.45 Europe (UK) ----- 0.04 Mexico 1.38 1.39 Asia 38.35 35.51 Canada 0.02 ----- Latin America 0.43 0.29 Corporate 0.75 1.60 Consolidated intersegment sales $48.29 $44.62 Years Ended January 31, 2019 2018 (in 000’s) (in 000’s) Operating Profit (Loss): USA $7.02 $10.15 Other foreign 0.26 0.51 Europe (UK) 0.20 0.16 Mexico 0.07 (0.02) Asia 2.63 3.28 Canada 1.01 1.42 Latin America 0.70 0.61 Corporate (8.22) (7.69) Less intersegment profit (0.10) 0.06 Consolidated operating profit (loss) $3.57 $8.48 Depreciation and Amortization Expense: USA $0.22 $0.12 Other foreign 0.05 0.03 Europe (UK) 0.01 0.01 Mexico 0.13 0.11 Asia 0.27 0.25 Canada 0.06 0.08 Latin America 0.04 0.04 Corporate 0.22 0.18 Less intersegment (0.03) (0.05) Consolidated depreciation and amortization expense $0.97 $0.77 Interest Expense: Other foreign $----- $----- Europe (UK) 0.01 0.01 Canada ----- 0.04 Latin America 0.04 0.01 Corporate 0.08 0.10 Consolidated interest expense $0.13 $0.16 Income Tax Expense (Benefit): USA (shown in Corporate) $----- $----- Other foreign ----- 0.06 Europe (UK) 0.03 0.05 Mexico 0.12 ----- Asia 1.04 0.60 Canada 0.23 0.40 Latin America 0.26 0.21 Corporate 0.35 6.58 Less intersegment (0.01) 0.00 Consolidated income tax expense (benefit) $2.02 $7.90 Years Ended January 31, 2019 2018 (in 000’s) (in 000’s) Total Assets: * USA $67.26 $67.02 Other foreign 1.54 1.29 Europe (UK) 4.37 4.63 Mexico 5.00 4.69 Asia 39.52 31.59 Canada 7.47 6.07 Latin America 7.42 12.09 Corporate 25.07 22.27 Less intersegment (62.93) (55.12) Consolidated assets $94.72 $94.53 Total Assets Less Intersegment:* USA $29.76 $33.16 Other foreign 2.85 2.73 Europe (UK) 4.36 4.63 Mexico 5.13 4.84 Asia 20.97 16.97 Canada 6.64 5.27 Latin America 5.27 5.59 Corporate 19.74 21.34 Consolidated assets $94.72 $94.53 Property and Equipment (excluding asset held for sale at $0.2 million at January 31, 2018): USA $2.25 $1.99 Other foreign 0.19 0.16 Europe (UK) 0.01 0.03 Mexico 2.14 1.99 Asia 3.17 1.92 Canada 1.26 1.38 Latin America 0.07 0.11 Corporate 1.62 1.18 Less intersegment 0.07 0.03 Consolidated long-lived assets $10.78 $8.79 Capital Expenditures: USA $0.01 $0.03 Other foreign 0.07 0.14 Europe (UK) ----- ----- Mexico 0.28 0.06 Asia 1.64 0.12 Canada 0.03 ----- Latin America ----- ----- Corporate 1.07 0.56 Consolidated capital expenditure $3.10 $0.91 Goodwill: USA $0.87 $0.87 Consolidated goodwill $0.87 $0.87 Negative assets reflect intersegment amounts eliminated in consolidation |
BUSINESS AND SUMMARY OF SIGNI_4
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Net sales | $ 99,011 | $ 95,987 |
Disposables | ||
Net sales | 53,190 | 51,560 |
Chemical | ||
Net sales | 18,030 | 17,470 |
Fire | ||
Net sales | 5,980 | 5,800 |
Gloves | ||
Net sales | 3,220 | 3,120 |
Hi-Vis | ||
Net sales | 6,990 | 11,260 |
Wovens | ||
Net sales | 11,610 | 6,780 |
USA | ||
Net sales | 49,880 | 50,450 |
Other Foreign | ||
Net sales | 3,020 | 2,400 |
Europe (UK) | ||
Net sales | 9,420 | 9,070 |
Mexico | ||
Net sales | 3,510 | 2,480 |
Asia | ||
Net sales | 18,000 | 17,120 |
Canada | ||
Net sales | 8,560 | 8,260 |
Latin America | ||
Net sales | $ 6,620 | $ 6,210 |
BUSINESS AND SUMMARY OF SIGNI_5
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Non-cash impairment charge | $ 200 | $ 0 |
Advertising costs | 802 | 443 |
Research and development expense | 182 | 280 |
Foreign currency transaction gain (loss) | $ (500) | $ 1,100 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 14,986 | $ 14,767 |
Work-in-process | 987 | 2,357 |
Finished goods | 26,392 | 25,795 |
Inventory, net | $ 42,365 | $ 42,919 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Property, plant and equipment, gross | $ 19,915 | $ 16,937 |
Less accumulated depreciation and amortization | (9,134) | (8,907) |
Assets held for sale | 0 | 150 |
Construction-in-progress | 0 | 759 |
Property, plant and equipment, net | 10,781 | 8,939 |
Machinery and Equipment [Member] | ||
Property, plant and equipment, gross | $ 5,070 | 3,932 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, plant and equipment, useful life | 3 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, plant and equipment, useful life | 10 years | |
Furniture and Fixtures [Member] | ||
Property, plant and equipment, gross | $ 316 | 328 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, plant and equipment, useful life | 3 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, plant and equipment, useful life | 10 years | |
Leasehold Improvements [Member] | ||
Property, plant and equipment, gross | $ 1,496 | 1,217 |
Property, plant and equipment, useful life | Lease term | |
Computer equipment [Member] | ||
Property, plant and equipment, gross | $ 2,669 | 2,184 |
Property, plant and equipment, useful life | 3 years | |
Software costs [Member] | ||
Property, plant and equipment, gross | $ 1,187 | 0 |
Property, plant and equipment, useful life | 3 years | |
Land and Building China [Member] | ||
Property, plant and equipment, gross | $ 1,764 | 1,764 |
Land and Building China [Member] | Minimum [Member] | ||
Property, plant and equipment, useful life | 20 years | |
Land and Building China [Member] | Maximum [Member] | ||
Property, plant and equipment, useful life | 30 years | |
Land and Building Canada [Member] | ||
Property, plant and equipment, gross | $ 1,856 | 1,982 |
Property, plant and equipment, useful life | 30 years | |
Land and Building Usa [Member] | ||
Property, plant and equipment, gross | $ 3,487 | 3,460 |
Property, plant and equipment, useful life | 30 years | |
Land and buildings Mexico [Member] | ||
Property, plant and equipment, gross | $ 2,070 | $ 2,070 |
Property, plant and equipment, useful life | 30 years |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | ||
Depreciation and amortization expense | $ 965,451 | $ 774,742 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Short-term | $ 0 | $ 211 |
Long-term | 1,161 | 1,312 |
Current maturity of long-term | 158 | 158 |
ARGENTINA | ||
Short-term | 0 | 31 |
Long-term | 0 | 0 |
Current maturity of long-term | 0 | 0 |
UNITED KINGDOM | ||
Short-term | 0 | 180 |
Long-term | 0 | 0 |
Current maturity of long-term | 0 | 0 |
UNITED STATES | ||
Short-term | 0 | 0 |
Long-term | 1,161 | 1,312 |
Current maturity of long-term | $ 158 | $ 158 |
LONG-TERM DEBT (Details 1)
LONG-TERM DEBT (Details 1) $ in Thousands | Jan. 31, 2019USD ($) |
1 year or less | $ 158 |
2 years | 1,161 |
3 years | 0 |
4 years | 0 |
5 years | 0 |
After 5 years | 0 |
Total | 1,319 |
Borrowings In Usa [Member] | |
1 year or less | 158 |
2 years | 1,161 |
3 years | 0 |
4 years | 0 |
5 years | 0 |
After 5 years | 0 |
Total | $ 1,319 |
CONCENTRATION OF RISK (Details
CONCENTRATION OF RISK (Details Narrative) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Concentration risk percentage | 100.00% | 100.00% |
Precision Fabrics Group [Member] | Purchases [Member] | ||
Concentration risk percentage | 7.63% | 11.00% |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 12 Months Ended |
Jan. 31, 2019USD ($)shares | |
Number of shares awarded total (shares) | shares | 135,596 |
Value at grant date | $ | $ 1,881,300 |
Minimum [Member] | |
Number of shares awarded total (shares) | shares | 56,475 |
Value at grant date | $ | $ 783,600 |
Weighted Average [Member] | |
Number of shares awarded total (shares) | shares | 84,717 |
Value at grant date | $ | $ 1,175,400 |
Maximum [Member] | |
Number of shares awarded total (shares) | shares | 112,995 |
Value at grant date | $ | $ 1,567,200 |
Employees [Member] | |
Number of shares awarded total (shares) | shares | 101,001 |
Value at grant date | $ | $ 1,401,300 |
Employees [Member] | Minimum [Member] | |
Number of shares awarded total (shares) | shares | 42,061 |
Value at grant date | $ | $ 583,600 |
Employees [Member] | Weighted Average [Member] | |
Number of shares awarded total (shares) | shares | 63,095 |
Value at grant date | $ | $ 875,000 |
Employees [Member] | Maximum [Member] | |
Number of shares awarded total (shares) | shares | 84,126 |
Value at grant date | $ | $ 1,167,200 |
Non Employee Directors [Member] | |
Number of shares awarded total (shares) | shares | 34,595 |
Value at grant date | $ | $ 480,000 |
Non Employee Directors [Member] | Minimum [Member] | |
Number of shares awarded total (shares) | shares | 14,414 |
Value at grant date | $ | $ 200,000 |
Non Employee Directors [Member] | Weighted Average [Member] | |
Number of shares awarded total (shares) | shares | 21,622 |
Value at grant date | $ | $ 300,000 |
Non Employee Directors [Member] | Maximum [Member] | |
Number of shares awarded total (shares) | shares | 28,829 |
Value at grant date | $ | $ 400,000 |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Total stock-based compensation | $ 743,757 | $ 424,565 |
Total income tax benefit recognized for stock-based compensation arrangements | 267,752 | 153,203 |
Two Thousand Twelve Plan [Member] | ||
Total stock-based compensation | 0 | 206 |
Two Thousand Fifteen Plan [Member] | ||
Total stock-based compensation | 0 | 197,284 |
Two Thousand Twelve Seventeen Plan [Member] | ||
Total stock-based compensation | 721,111 | 225,162 |
Stock Appreciation Rights [Member] | ||
Total stock-based compensation | $ 22,646 | $ 1,913 |
STOCKHOLDERS' EQUITY (Details 2
STOCKHOLDERS' EQUITY (Details 2) | 12 Months Ended |
Jan. 31, 2019$ / sharesshares | |
Outstanding unvested grants at maximum, beginning | 84,126 |
Outstanding unvested grants at maximum, granted | 73,647 |
Outstanding unvested grants at maximum, vested | 5,221 |
Outstanding unvested grants at maximum, forfeited | 0 |
Outstanding unvested grants at maximum, ending | 84,126 |
Outstanding weighted average grant date fair value, beginning | $ / shares | $ 13.63 |
Outstanding weighted average grant date fair value, granted | $ / shares | 13.66 |
Outstanding weighted average grant date fair value, vested | $ / shares | 10.19 |
Outstanding weighted average grant date fair value, forfeited | $ / shares | .00 |
Outstanding weighted average grant date fair value, ending | $ / shares | $ 13.77 |
Restricted Stock Grants Employees [Member] | |
Outstanding unvested grants at maximum, beginning | 42,291 |
Outstanding unvested grants at maximum, granted | 41,835 |
Outstanding unvested grants at maximum, vested | 0 |
Outstanding unvested grants at maximum, forfeited | 0 |
Restricted Stock Grants Non Employee Directors [Member] | |
Outstanding unvested grants at maximum, beginning | 14,493 |
Outstanding unvested grants at maximum, granted | 14,336 |
Outstanding unvested grants at maximum, vested | 0 |
Outstanding unvested grants at maximum, forfeited | 0 |
Outstanding unvested grants at maximum, ending | 28,829 |
Retainer In Stock Non Employee Directors [Member] | |
Outstanding unvested grants at maximum, beginning | 12,789 |
Outstanding unvested grants at maximum, granted | 17,476 |
Outstanding unvested grants at maximum, vested | 5,221 |
Outstanding unvested grants at maximum, forfeited | 0 |
Outstanding unvested grants at maximum, ending | 25,044 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Pretax income (loss) | $ 3,481 | $ 8,343 |
Income Tax Expense (Benefit) Current: | ||
Federal | 45 | 600 |
State and other taxes | 20 | 20 |
Foreign | 1,667 | 1,325 |
Current income tax expense (benefit) | 1,732 | 1,945 |
Income Tax Expense (Benefit) Deferred: | ||
Domestic | 290 | 5,955 |
Valuation allowance-deferred tax asset | 0 | 3 |
Foreign | 0 | 0 |
Deferred income tax expense (benefit) | 290 | 2,958 |
Total | 2,022 | 7,903 |
Domestic Tax Authority [Member] | ||
Pretax income (loss) | (1,116) | 7,480 |
Foreign Tax Authority [Member] | ||
Pretax income (loss) | $ 4,597 | $ 863 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Statutory rate | 21.00% | 33.81% |
State income taxes, net of federal tax benefit | 6.89% | 2.27% |
Adjustment to deferred | (0.92%) | 0.00% |
Foreign dividend and subpart F income | 0.00% | (17.19%) |
Transition tax (net of FTC from transition tax) | 0.00% | 26.53% |
Argentina flow through loss | 1.37% | 0.38% |
GILTI | 16.85% | 0.00% |
Permanent differences | 0.63% | (1.32%) |
Valuation allowance-deferred tax asset | (24.46%) | 0.34% |
Foreign tax credit | 24.46% | 0.00% |
Foreign rate differential | 20.16% | 0.00% |
Rate change | (5.63%) | 47.17% |
Other | (2.25%) | 2.74% |
Effective rate | 58.09% | 94.73% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Deferred tax assets: | ||
Inventories | $ 849 | $ 866 |
US tax loss carryforwards, including work opportunity credit | 4,290 | 4,411 |
Accounts receivable and accrued rebates | 233 | 242 |
Accrued compensation and other | 314 | 190 |
India reserves - US deduction | 46 | 19 |
Equity based compensation | 299 | 126 |
Foreign tax credit carry-forward | 1,348 | 2,199 |
State and local carry-forwards | 1,116 | 1,017 |
Argentina timing difference | 32 | 37 |
Depreciation and other | 59 | 90 |
Amortization | (193) | (174) |
Brazil write-down | 222 | 181 |
Allowance for note receivable - Brazil | 0 | 552 |
Deferred tax asset | 8,615 | 9,756 |
Less valuation allowance | 1,348 | 2,199 |
Net deferred tax asset - USA | $ 7,267 | $ 7,557 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Change in valuation allowance | $ 900 | $ 0 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Numerator | ||
Net income | $ 1,459 | $ 440 |
Denominator | ||
Denominator for basic earnings per share (weighted-average shares which reflect 362,840 shares in the treasury at January 31, 2019 and 356,441 shares in the treasury at January 31, 2018) | 8,111,458 | 7,638,264 |
Effect of dilutive securities from restricted stock plan and from dilutive effect of stock options | 58,943 | 53,289 |
Denominator for diluted earnings per share (adjusted weighted average shares) | 8,170,401 | 7,691,553 |
Basic earnings per share | $ 0.18 | $ 0.06 |
Diluted earnings per share | $ 0.18 | $ 0.06 |
BENEFIT PLANS (Details Narrativ
BENEFIT PLANS (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan, employer discretionary contribution amount | $ 209,100 | $ 198,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Gross rental | $ 1,022,162 | $ 841,235 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) | Jan. 31, 2019USD ($) |
Year ending January 31, | |
2020 | $ 761,350 |
2021 | 446,494 |
2022 | 435,310 |
2023 | 313,633 |
2024 | 8,418 |
2025 and thereafter | 8,944 |
Total | $ 1,974,149 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Net sales from continuing operations | $ 99,011 | $ 95,987 |
Sales revenue percentage | 100.00% | 100.00% |
Domestic [Member] | ||
Net sales from continuing operations | $ 49,880 | $ 50,450 |
Sales revenue percentage | 50.38% | 52.55% |
International [Member] | ||
Net sales from continuing operations | $ 49,130 | $ 45,540 |
Sales revenue percentage | 49.62% | 47.45% |
SEGMENT REPORTING (Details 1)
SEGMENT REPORTING (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Net sales | $ 99,010 | $ 95,990 |
External sales | 99,010 | 95,990 |
Intersegment sales | 48,290 | 44,620 |
Operating profit (loss) | 3,565 | 8,477 |
Depreciation and amortization expense | 965 | 775 |
Interest expense | 125 | 163 |
Income tax expense (benefit) | 2,022 | 7,903 |
Capital expenditures | 3,100 | 910 |
Total assets | 94,723 | 94,531 |
Total assets less intersegment | 94,720 | |
Property and equipment | 10,781 | 8,789 |
Goodwill | 871 | 871 |
USA | ||
Net sales | 54,720 | 54,790 |
External sales | 49,880 | 50,450 |
Intersegment sales | 4,840 | 4,340 |
Operating profit (loss) | 7,020 | 10,150 |
Depreciation and amortization expense | 220 | 120 |
Income tax expense (benefit) | 0 | 0 |
Capital expenditures | 10 | 30 |
Total assets | 67,260 | 67,020 |
Total assets less intersegment | 29,760 | 33,160 |
Property and equipment | 2,250 | 1,990 |
Goodwill | 870 | 870 |
Other Foreign | ||
Net sales | 5,520 | 3,850 |
External sales | 3,020 | 2,400 |
Intersegment sales | 2,520 | 1,450 |
Operating profit (loss) | 260 | 510 |
Depreciation and amortization expense | 50 | 30 |
Interest expense | 0 | 0 |
Income tax expense (benefit) | 0 | 60 |
Capital expenditures | 70 | 140 |
Total assets | 1,540 | 1,290 |
Total assets less intersegment | 2,850 | 2,730 |
Property and equipment | 190 | 160 |
Europe (UK) | ||
Net sales | 9,420 | 9,110 |
External sales | 9,420 | 9,070 |
Intersegment sales | 0 | 40 |
Operating profit (loss) | 200 | 160 |
Depreciation and amortization expense | 10 | 10 |
Interest expense | 10 | 10 |
Income tax expense (benefit) | 30 | 50 |
Capital expenditures | 0 | 0 |
Total assets | 4,370 | 4,630 |
Total assets less intersegment | 4,360 | 4,630 |
Property and equipment | 10 | 30 |
Mexico | ||
Net sales | 4,900 | 3,870 |
External sales | 3,510 | 2,480 |
Intersegment sales | 1,380 | 1,390 |
Operating profit (loss) | 70 | (20) |
Depreciation and amortization expense | 130 | 110 |
Income tax expense (benefit) | 120 | 0 |
Capital expenditures | 280 | 60 |
Total assets | 5,000 | 4,690 |
Total assets less intersegment | 5,130 | 4,840 |
Property and equipment | 2,140 | 1,990 |
Asia | ||
Net sales | 56,360 | 52,630 |
External sales | 18,000 | 17,120 |
Intersegment sales | 38,350 | 35,510 |
Operating profit (loss) | 2,630 | 3,280 |
Depreciation and amortization expense | 270 | 250 |
Income tax expense (benefit) | 1,040 | 600 |
Capital expenditures | 1,640 | 120 |
Total assets | 9,520 | 31,590 |
Total assets less intersegment | 20,970 | 16,970 |
Property and equipment | 3,170 | 1,920 |
Canada | ||
Net sales | 8,580 | 8,260 |
External sales | 8,560 | 8,260 |
Intersegment sales | 20 | 0 |
Operating profit (loss) | 1,010 | 1,420 |
Depreciation and amortization expense | 60 | 80 |
Interest expense | 0 | 40 |
Income tax expense (benefit) | 230 | 400 |
Capital expenditures | 30 | 0 |
Total assets | 7,470 | 6,070 |
Total assets less intersegment | 6,640 | 5,270 |
Property and equipment | 1,260 | 1,380 |
Latin America | ||
Net sales | 7,050 | 6,500 |
External sales | 6,620 | 6,210 |
Intersegment sales | 430 | 290 |
Operating profit (loss) | 700 | 610 |
Depreciation and amortization expense | 40 | 40 |
Interest expense | 40 | 10 |
Income tax expense (benefit) | 260 | 210 |
Capital expenditures | 0 | 0 |
Total assets | 7,420 | 12,090 |
Total assets less intersegment | 5,270 | 5,590 |
Property and equipment | 70 | 110 |
Corporate Segment [Member] | ||
Net sales | 750 | 1,600 |
Intersegment sales | 750 | 1,600 |
Operating profit (loss) | (8,220) | (7,690) |
Depreciation and amortization expense | 220 | 180 |
Interest expense | 80 | 100 |
Income tax expense (benefit) | 350 | 6,580 |
Capital expenditures | 1,070 | 560 |
Total assets | 22,270 | 25,070 |
Total assets less intersegment | 21,340 | 19,740 |
Property and equipment | 1,180 | 1,620 |
Intersegment | ||
Net sales | (48,290) | (44,620) |
Operating profit (loss) | (100) | 60 |
Depreciation and amortization expense | (30) | (50) |
Income tax expense (benefit) | (10) | 0 |
Total assets | (62,930) | (55,120) |
Property and equipment | $ 70 | $ 30 |