Cover
Cover - shares | 3 Months Ended | |
Apr. 30, 2024 | May 31, 2024 | |
Cover [Abstract] | ||
Entity Registrant Name | LAKELAND INDUSTRIES, INC. | |
Entity Central Index Key | 0000798081 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Apr. 30, 2024 | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2025 | |
Entity Common Stock Shares Outstanding | 7,377,815 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 0-15535 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 13-3115216 | |
Entity Address Address Line 1 | 1525 Perimeter Parkway | |
Entity Address Address Line 2 | Suite 325 | |
Entity Address City Or Town | Huntsville | |
Entity Address State Or Province | AL | |
Entity Address Postal Zip Code | 35806 | |
City Area Code | 256 | |
Local Phone Number | 350-3873 | |
Security 12b Title | Common Stock | |
Trading Symbol | LAKE | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||
Net sales | $ 36,309 | $ 28,700 |
Cost of goods sold | 20,125 | 16,256 |
Gross profit | 16,184 | 12,444 |
Operating expenses | 13,982 | 10,506 |
Operating profit | 2,202 | 1,938 |
Other income (expense), net | 11 | (69) |
Interest expense | (172) | (8) |
Income before taxes | 2,041 | 1,861 |
Income tax expense | 388 | 541 |
Net income | $ 1,653 | $ 1,320 |
Net income per common share: | ||
Basic | $ 0.22 | $ 0.18 |
Diluted | $ 0.22 | $ 0.18 |
Weighted average common shares outstanding: | ||
Basic | 7,364,757 | 7,325,005 |
Diluted | 7,582,449 | 7,502,863 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) | ||
Net income | $ 1,653 | $ 1,320 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 158 | (718) |
Comprehensive income | $ 1,811 | $ 602 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Apr. 30, 2024 | Jan. 31, 2024 |
Current assets | ||
Cash and cash equivalents | $ 28,365 | $ 25,222 |
Accounts receivable, net of allowance for doubtful accounts of $927 and $857 at April 30, 2024 and January 31, 2024, respectively | 21,763 | 19,169 |
Inventories | 56,064 | 51,250 |
Prepaid VAT and other taxes | 2,212 | 2,753 |
Income tax receivable and other current assets | 5,364 | 3,111 |
Total current assets | 113,768 | 101,505 |
Property and equipment, net | 11,933 | 10,685 |
Operating leases right-of-use assets | 12,080 | 10,969 |
Deferred tax assets | 3,037 | 3,097 |
Other assets | 147 | 110 |
Goodwill | 15,215 | 13,669 |
Intangible assets, net | 7,922 | 6,830 |
Equity investments | 4,618 | 4,719 |
Convertible debt instruments | 2,800 | 2,161 |
Total assets | 171,520 | 153,745 |
Current liabilities | ||
Accounts payable | 9,051 | 7,378 |
Accrued compensation and benefits | 3,994 | 3,922 |
Other accrued expenses | 4,466 | 2,487 |
Income tax payable | 1,203 | 1,454 |
Short-term borrowings | 0 | 298 |
Accrued earnout agreement | 218 | 643 |
Current portion of operating lease liabilities | 2,164 | 2,164 |
Total current liabilities | 21,096 | 18,346 |
Deferred income taxes | 2,114 | 2,097 |
Loans payable - long term | 12,965 | 731 |
Long-term portion of operating lease liabilities | 10,236 | 9,121 |
Total liabilities | 46,411 | 30,294 |
Stockholders' equity | ||
Preferred stock, $0.01 par; authorized 1,500,000 shares (none issued) | 0 | 0 |
Common stock, $0.01 par; authorized 20,000,000 shares Issued 8,736,023 and 8,722,965; outstanding 7,377,815 and 7,364,757 at April 30, 2024 and January 31, 2024, respectively | 87 | 87 |
Treasury stock, at cost; 1,358,208 shares at April 30, 2024 and January 31, 2024, respectively | (19,979) | (19,979) |
Additional paid-in capital | 79,489 | 79,420 |
Retained earnings | 70,714 | 69,282 |
Accumulated other comprehensive loss | (5,202) | (5,360) |
Total stockholders' equity | 125,109 | 123,450 |
Total liabilities and stockholders' equity | $ 171,520 | $ 153,745 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Apr. 30, 2024 | Jan. 31, 2024 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts | $ 927 | $ 857 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,500,000 | 1,500,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 8,736,023 | 8,722,965 |
Common stock, shares outstanding | 7,377,815 | 7,364,757 |
Treasury stock, shares | 1,358,208 | 1,358,208 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated other comprehensive loss |
Balance, shares at Jan 31, 2023 at Jan. 31, 2023 | 8,655,699 | 1,330,694 | ||||
Balance, amount at Jan. 31, 2023 | $ 119,990 | $ 87 | $ (19,646) | $ 78,475 | $ 64,765 | $ (3,691) |
Net income | 1,320 | 0 | 0 | 0 | 1,320 | 0 |
Other comprehensive loss | (718) | 0 | 0 | 0 | 0 | (718) |
Dividends | 246 | $ 0 | 0 | 0 | 246 | 0 |
Restricted stock issued, shares | 53,557 | |||||
Restricted stock issued, amount | 0 | $ 0 | 0 | 0 | 0 | 0 |
Restricted stock plan, amount | 407 | 0 | 0 | 407 | 0 | 0 |
Return of shares in lieu of payroll withholding | (339) | 0 | $ 0 | (339) | 0 | 0 |
Treasury stock purchased, shares | (22,814) | |||||
Treasury stock purchased, amount | (276) | 0 | $ (276) | 0 | 0 | 0 |
Balance, amount at Apr. 30, 2023 | 120,138 | $ 87 | $ (19,922) | 78,543 | 65,839 | (4,409) |
Balance, shares at Apr 30, 2023 at Apr. 30, 2023 | 8,709,256 | 1,353,508 | ||||
Balance, shares at Jan 31, 2023 at Jan. 31, 2024 | 8,722,965 | 1,358,208 | ||||
Balance, amount at Jan. 31, 2024 | 123,450 | $ 87 | $ (19,979) | 79,420 | 69,282 | (5,360) |
Net income | 1,653 | 0 | 0 | 0 | 1,653 | 0 |
Other comprehensive loss | 158 | 0 | 0 | 0 | 0 | 158 |
Dividends | 221 | $ 0 | 0 | 0 | 221 | 0 |
Restricted stock issued, shares | 13,058 | |||||
Restricted stock issued, amount | 0 | $ 0 | 0 | 0 | 0 | 0 |
Restricted stock plan, amount | 198 | 0 | 0 | 198 | 0 | 0 |
Return of shares in lieu of payroll withholding | (129) | 0 | 0 | (129) | 0 | 0 |
Treasury stock purchased, amount | 0 | 0 | 0 | 0 | 0 | 0 |
Balance, amount at Apr. 30, 2024 | $ 125,109 | $ 87 | $ (19,979) | $ 79,489 | $ 70,714 | $ (5,202) |
Balance, shares at Apr 30, 2023 at Apr. 30, 2024 | 8,736,023 | 1,358,208 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 1,653 | $ 1,320 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Deferred income taxes | 77 | (176) |
Depreciation and amortization | 647 | 533 |
Stock based and restricted stock compensation | 198 | 407 |
Equity in (earnings) loss of equity investment | 101 | 147 |
Revaluation of earnout consideration | (711) | (493) |
(Increase) decrease in operating assets | ||
Accounts receivable | (404) | 955 |
Inventories | 433 | 178 |
Prepaid VAT and other taxes | 541 | (614) |
Other current assets | (2,255) | (1,644) |
Increase (decrease) in operating liabilities | ||
Accounts payable | 861 | 1,181 |
Accrued expenses and other liabilities | (852) | 1,854 |
Operating lease liabilities | 4 | 22 |
Net cash provided by operating activities | 293 | 3,670 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (466) | (690) |
Acquisitions, net of cash acquired | (8,141) | 0 |
Investments in convertible debt instruments | (639) | 0 |
Net cash (used in) investing activities: | (9,246) | (690) |
Cash flows from financing activities: | ||
Credit facility borrowings | 12,300 | 0 |
Payment on debt facilities | (364) | (290) |
Purchase of treasury stock under stock repurchase program | 0 | (276) |
Dividends paid | (221) | (246) |
Shares returned to pay employee taxes under restricted stock program | (129) | (339) |
Net cash provided by (used in) financing activities | 11,586 | (1,151) |
Effect of exchange rate changes on cash and cash equivalents | 510 | (447) |
Net increase (decrease) in cash and cash equivalents | 3,143 | 1,382 |
Cash and cash equivalents at beginning of period | 25,222 | 24,639 |
Cash and cash equivalents at end of period | 28,365 | 26,021 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 174 | 1 |
Cash paid for taxes | 397 | 893 |
Noncash investing and financing activities | ||
Leased assets obtained in exchange for operating lease liabilities | $ 1,411 | $ 91 |
Business
Business | 3 Months Ended |
Apr. 30, 2024 | |
Business | |
Business | 1. 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 2,000 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, countries within the European Economic Community (“EEC”), Canada, Chile, Argentina, Russia, Kazakhstan, Colombia, Mexico, Ecuador, India, Middle East and countries within Southeast Asia. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Apr. 30, 2024 | |
Basis of Presentation | |
Basis of Presentation | 2. Basis of Presentation The condensed consolidated financial statements of the Company are unaudited. These condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the Company's results. Intercompany accounts and transactions have been eliminated. The results reported in these condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the entire fiscal year ending January 31, 2025, or for any future period. The January 31, 2024, Condensed Consolidated Balance Sheet data was derived from the audited Consolidated Balance Sheet but does not include all disclosures required by accounting principles generally accepted in the United States of America (U.S. GAAP). The accompanying condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto as of January 31, 2024 and 2023, and for each of the two years in the period ended January 31, 2024, included in our most recent annual report on Form 10-K filed on April 11, 2024 In this Form 10-Q, (a) “FY” means fiscal year; thus, for example, FY25 refers to the fiscal year ending January 31, 2025, (b) “Q” refers to quarter; thus, for example, Q1 FY25 refers to the first quarter of the fiscal year ending January 31, 2025, (c) “Balance Sheet” refers to the unaudited condensed consolidated balance sheet, and (d) “Statement of Operations” refers to the unaudited condensed consolidated statement of operations. 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. Income Taxes In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance requires a public entity to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold. The guidance also requires all entities to disclose annually income taxes paid (net of refunds received) disaggregated by federal (national), state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. This guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted and this guidance should be applied prospectively but there is the option to apply it retrospectively. The Company plans to adopt the provisions of this guidance in conjunction with our Form 10-K for our fiscal year ending January 31, 2026. Segment Reporting In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This guidance requires a public entity to disclose for each reportable segment, on an interim and annual basis, the significant expense categories and amounts that are regularly provided to the chief operating decision-maker (“CODM”) and included in each reported measure of a segment’s profit or loss. Additionally, it requires a public entity to disclose the title and position of the individual or the name of the group or committee identified as the CODM. This guidance is effective for fiscal years beginning after December 31, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the guidance should be applied retrospectively to all periods presented in the financial statements, unless it is impracticable. The Company plans to adopt the provisions of this guidance in conjunction with our Form 10-K for the fiscal year ending January 31, 2025. |
Investments and Acquisitions
Investments and Acquisitions | 3 Months Ended |
Apr. 30, 2024 | |
Investments and Acquisitions | |
Investments and Acquisitions | 3. Investments and Acquisitions Bodytrak On October 18, 2021, the Company entered into an Investment Agreement (the “Investment Agreement”) with Inova Design Solutions Ltd, a private limited company incorporated under the laws of England and Wales and headquartered in the United Kingdom, doing business as Bodytrak ® On April 28, 2022, the Company, under the terms of the Investment Agreement, acquired an additional 381,679 Series A1 Shares of Bodytrak for £1,500,000 ($1.9 million). On October 26, 2022, the Company acquired an additional 254,452 Series A Shares of Bodytrak for £1,000,000 ($1.2 million). After completion of the additional investments, the Company owns 22.5% of Bodytrak’s total share capital. The investment in Bodytrak is accounted for under the equity method, given our board representation and the resulting ability to exercise significant influence. A substantial portion of our investment represents differences in our investment and our share of the underlying recognized net assets of Bodytrak. These differences are predominately attributable to non-amortizing intangible assets, including internally developed intellectual property, of Bodytrak. On May 19, 2023, the Company entered into an agreement with Bodytrak to provide an additional investment of up to an aggregate of £1,500,000 ($1.9 million on the date of initial investment) in the form of a secured convertible loan with an option for an additional £1,000,000 investment at the Company’s discretion. An initial investment funding of £500,000 ($0.6 million on the date of investment) was made on May 19, 2023. Additional investment fundings of £700,000 ($0.9 million on the date of investment), £500,000 ($0.6 million on the date of investment) and £500,000 ($0.6 million on the date of investment) were made on September 8, 2023, December 15, 2023 and February 13, 2024, respectively. The loaned amounts are due twenty-four months from the issue date, which can be extended upon mutual agreement. The convertible note bears interest at either an annual rate of 12% for cash interest or 15% for payment in kind interest on the outstanding amount under the note, such rate being selected by Bodytrak. The notes can be converted into equity shares of Bodytrak under a number of conditions, including a qualified equity financing as defined in the agreement, a change of control, an IPO, default or conversion at the discretion of the Company and upon the occurrence of the specified event. The convertible note is secured by Bodytrak’s intellectual property. Bodytrak provides wearable monitoring solutions for customers in industrial health, safety, defense and first responder markets wanting to achieve better employee health and performance. Bodytrak’s solution is provided as a platform as a service (PaaS), delivering real-time data, cloud-based analytics, and hardware that includes a patented earpiece for physiological monitoring and audio communications. The Company recognized losses of $0.1 million for each of the three months ended April 30, 2024 and 2023, as the Company’s share of Bodytrak’s net loss. The loss is reflected in other income (expense), net in the consolidated statements of operations. Acquisition of Jolly On February 5, 2024, the Company acquired Italy and Romania-based Jolly Scarpe S.p.A. and Jolly Scarpe Romania S.R.L. (collectively, "Jolly") in an all-cash transaction Total consideration was $9.6 million, of which $7.5 million was paid to the seller at closing, $0.6 million paid to retire the remainder of Jolly’s debt and $1.5 million remained unpaid subject to post-closing adjustments and customary holdback provisions. Jolly is a leading designer and manufacturer of professional footwear for the firefighting, military, police, and rescue markets. The company is headquartered in Montebelluna, Italy, with manufacturing operations in Bucharest, Romania, and has 150 employees. Jolly’s primary customers are based in Europe. Jolly’s operating results are included in our consolidated financial statements from the acquisition date. The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting. Jolly’s operating results and assets including acquired intangibles and goodwill will be reported as part of Europe in our geographic segment reporting. The following table summarizes the preliminary fair values of the Jolly assets acquired and liabilities assumed at the date of the acquisition: Net working capital acquired $ 5,582 Property, plant and equipment 1,277 Customer relationships 425 Trade names and trademarks 567 Technological know-how 250 Goodwill 1,546 Total assets acquired $ 9,647 Assets acquired and liabilities assumed in connection with the acquisition were recorded at estimated fair values. Estimated fair values were determined by management, based in part on an independent valuation performed by a third-party valuation specialist. The valuation methods used to determine the estimated fair value of intangible assets included the excess earnings approach for customer relationships using customer inputs and contributory charges; the relief from royalty method for trade names and trademarks and technological know-how; and the cost method for the assembled workforce was included in goodwill. Several significant assumptions and estimates were involved in the application of these valuation methods, including forecasted sales volumes and prices, royalty rates, costs to produce, tax rates, capital spending, discount rates, attrition rates and working capital changes. Cash flow forecasts were generally based on Jolly’s pre-acquisition forecasts. Identifiable intangible assets with finite lives are subject to amortization over their estimated useful lives. The customer relationships, trade names and trademarks and technological know-how acquired in the Jolly transaction are being amortized over periods of 14 years, 10 years and 10 years, respectively. Goodwill is calculated as the excess of the purchase price over the estimated fair value of net assets acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Among the factors that contributed to a purchase price in excess of the estimated fair value of the net tangible and intangible assets acquired were the acquisition of an assembled workforce, the expected synergies and other benefits that we believe will result from combining the operations of Jolly with our operations. Due to the timing of the completion of the acquisition, the purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, additional information obtained regarding assets acquired and liabilities assumed, and revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals, inventory, contractual relationships, tangible assets and intangible assets. These changes to the purchase price allocation could be significant. The purchase price allocation will be finalized within the measurement period of up to one year from the acquisition date. Acquisition of Pacific On November 30, 2023 the Company acquired New Zealand-based Pacific Helmets NZ Limited (“Pacific”) in an all-cash transaction valued at approximately NZ$14,000,000 ($8.6 million at the closing date exchange rate) including assumption of debt, subject to post-closing adjustments and customary holdback provisions. The acquisition enhances Lakeland’s product portfolio, particularly within fire service protective helmets. Headquartered in Whanganui, New Zealand, Pacific is a leading designer and provider of structural firefighting, wildland firefighting, and technical rescue helmets. The transaction was funded through the revolving credit facility and cash balances. Pacific’s operating results are included in our consolidated financial statements from the acquisition date. The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting. As part of the acquisition agreement, Pacific will pay from the holdback an amount equal to the amount by which Pacific’s revenue fell below NZ$11.1 million for Pacific’s fiscal year ended March 31, 2024 subject to certain conditions. The amount of the reduction to the holdback to be paid by Pacific is $0.3 million. Due to the timing of the completion of the acquisition, the purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, additional information obtained regarding assets acquired and liabilities assumed, and revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals, inventory, contractual relationships, tangible assets and intangible assets. These changes to the purchase price allocation could be significant. The purchase price allocation will be finalized within the measurement period of up to one year from the acquisition date. The following unaudited pro forma information presents our combined results as if the Jolly and Pacific acquisitions had occurred at the beginning of FY24. The unaudited pro forma financial information was prepared to give effect to events that are (1) directly attributable to the acquisition; (2) factually supportable; and (3) expected to have a continuing impact on the combined company's results. There were no material transactions between the Company, Jolly and Pacific during the periods presented that are required to be eliminated. The unaudited pro forma combined financial information does not reflect cost savings, operating synergies or revenue enhancements that the combined companies may achieve or the costs to integrate the operations or the costs necessary to achieve cost savings, operating synergies or revenue enhancements. Pro forma combined financial information (Unaudited) (in millions, except per share amount) Quarter Ended April 30, 2024 2023 Net sales $ 36.3 $ 34.4 Net income $ 1.7 $ 1.4 Basic earnings per share $ 0.22 $ 0.19 Diluted earnings per share $ 0.22 $ 0.19 The unaudited pro forma combined financial information is presented for information purposes only and is not intended to represent or be indicative of the combined results of operations or financial position that we would have reported had the acquisition been completed as of the date and for the periods presented and should not be taken as representative of our consolidated results of operations or financial condition following the acquisition. In addition, the unaudited pro forma combined financial information is not intended to project the future results of the combined company. The unaudited pro forma combined financial information was prepared using the acquisition method of accounting under existing U.S. GAAP. The Company has been treated as the acquirer. Acquisition of Eagle On December 2, 2022, the Company acquired 100% of Eagle Technical Products Limited’s (Eagle) common stock in an all-cash transaction valued at $10.5 million, net of net working capital acquired. Headquartered in Manchester, UK, Eagle is a leading designer and provider of protective apparel to the fire and industrial sectors. Eagle provides differentiated product offerings through its innovative and technical solutions. Eagle’s operating results are included in our consolidated financial statements from the acquisition date. The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting. As part of the Eagle acquisition agreement, the Company agreed to pay an earnout payment equal to the amount by which Eagle’s revenue exceeded 6 million GBP for the period May 1, 2022 through April 30, 2023. The Company will also pay an earnout payment equal to the amount by which Eagle’s revenue exceeded 6.3 million GBP for the period May 1, 2023 through April 30, 2024. Eagle did not reach the revenue threshold for the period May 1, 2022 through April 30, 2023 and received no payment for that period. At January 31, 2024, the Company had recorded $0.6 million for the earnout payment for the period May 1, 2023 through April 30, 2024, using a Monte Carlo simulation. Based on Eagle’s revenue for the period May 1, 2023 through April 30, 2024, the earnout payment was $0.2 million. The adjustment to the accrued earnout payment of $0.4 million was recorded in the quarter ended April 30, 2024 and reflected as a reduction in operating expenses. |
Inventories
Inventories | 3 Months Ended |
Apr. 30, 2024 | |
Inventories | |
Inventories | 4. Inventories Inventories consist of the following (in $000s): April 30, 2024 January 31, 2024 Raw materials $ 29,453 $ 27,417 Work-in-process 928 668 Finished goods 32,138 29,719 Excess and obsolete adjustments (6,455 ) (6,554 ) $ 56,064 $ 51,250 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets Net | 3 Months Ended |
Apr. 30, 2024 | |
Goodwill and Intangible Assets Net | |
Goodwill and Intangible Assets, Net | 5. Goodwill and Intangible Assets, Net Changes in goodwill during the quarters ended April 30, 2024 and 2023, were as follows (in $000s): 2024 2023 Balance at January 31 $ 13,669 $ 8,473 Measurement period adjustment - - Acquisitions 1,546 - Balance at April 30 $ 15,215 $ 8,473 Changes in intangible assets during the quarters ended April 30, 2024 and 2023, were as follows (in $000s): 2024 2023 Balance at January 31 $ 6,830 $ 6,042 Acquisitions 1,242 - Amortization (150 ) (102 ) Balance at April 30 $ 7,922 $ 5,940 |
Contract Advances
Contract Advances | 3 Months Ended |
Apr. 30, 2024 | |
Contract Advances | |
Contract Advances | 6. Contract Advances The Company receives advances under certain of its contracts for products sold by Eagle. Those advances are considered contract liabilities with revenues recorded upon delivery of promised goods to customers. These advances are included in Other Accrued Expenses on the Company’s consolidated balance sheet. The following is a roll-forward of the advances from January 31, 2024 through April 30, 2024 and from January 31, 2023 through April 30, 2023 (in $000s): 2024 2023 Contract liability – January 31 $ 104 $ 1,627 Increases to contract liability 173 212 Decreases to contract liability (102 ) (500 ) Contract liability – April 30 $ 175 $ 1,339 |
LongTerm Debt
LongTerm Debt | 3 Months Ended |
Apr. 30, 2024 | |
LongTerm Debt | |
Long-Term Debt | 7. Long-Term Debt Revolving Credit Facility On June 25, 2020, the Company entered into a Loan Agreement (the “Loan Agreement”) with Bank of America (the “Lender”). The Loan Agreement provided the Company with a secured $25.0 million revolving credit facility, which included a $5.0 million letter of credit sub-facility. The Company could request from time to time an increase in the revolving credit loan commitment of up to $5.0 million (for a total commitment of up to $30.0 million). Borrowing pursuant to the revolving credit facility was subject to a borrowing base amount calculated as (a) 80% of eligible accounts receivable, as defined, plus (b) 50% of the value of acceptable inventory, as defined, minus (c) certain reserves as the Lender may establish for the amount of estimated exposure, as reasonably determined by the Lender from time to time, under certain interest rate swap contracts. The borrowing base limitation only applied during periods when the Company’s quarterly funded debt to EBITDA ratio, as defined, exceeded 2.00 to 1.00. The Loan Agreement permitted, without the prior consent of the Lender, acquisitions of a business or its assets by the Company or its subsidiaries if there was no default under the Loan Agreement and the aggregate consideration did not exceed $7.5 million for any individual acquisition or $15.0 million on a cumulative basis for all such acquisitions. On March 3, 2023, the Company changed the benchmark interest rate in the credit facility from LIBOR to the Secured Overnight Financing Rate (“SOFR”). The credit facility was to mature on June 25, 2025. On November 30, 2023, the Company entered into Amendment No. 3 to the Loan Agreement by and between the Lender and the Company (the “Third Amendment”). Pursuant to the Third Amendment, the Lender consented to the Company’s acquisition of one hundred percent (100%) of the equity interests of Pacific. The Third Amendment further provided for certain amendments to the Loan Agreement to permit additional indebtedness to be made available to Pacific, to exempt Pacific from certain requirements of the Loan Agreement pertaining to subsidiary guaranty and asset pledges that would otherwise be required under the Loan Agreement and to waive the Company’s borrowing base limitations through January 31, 2024. The Third Amendment also provided for the reaffirmation of representations, warranties and covenants under the Loan Agreement as are customary in connection with similar amendments of credit documents. On March 28, 2024, the Company entered into Amendment No. 4 to the Loan Agreement by and between the Lender and the Company (the “Fourth Amendment”). Pursuant to the Fourth Amendment, the Lender and the Company agreed to, among other things, (i) extend the expiration date of the credit facility to March 28, 2029, (ii) increase the availability under the revolving credit facility to $40.0 million with an accordion feature providing for the potential funding of an additional $10.0 million, (iii) remove the borrowing base component of the credit facility; and (iv) modify the interest rate based on Daily SOFR plus the Applicable Rate. The Applicable Rate is based upon a Funded Debt to EBITDA Ratio and includes four (4) different levels constituting a SOFR margin range from 1.25% to 2.00%. In addition, the Fourth Amendment (i) modified the Funded Debt to EBITDA Ratio covenant so as not to exceed 3.5x (with step-downs to 3.25 and 3.0 in 2025 and 2026), (ii) modified the Basic Fixed Charge Coverage Ratio covenant to a minimum of 1.20x, (iii) includes a springing Asset Coverage Ratio covenant of at least 1.10x, but only to the extent that the maximum Total Leverage Ratio exceeds 3.00x at any reporting period, (iv) increases the sublimit for letters of credit to $10.0 million, and (v) imposes a floor to Daily SOFR of one percent (1.00%). The Fourth Amendment provides for additional indebtedness or the assumption of existing indebtedness for acquisitions of foreign subsidiaries (not to exceed $10.0 million in USD) and increased the size of Permitted Acquisitions, without prior approval from the Lender, to $17.5 million per occurrence and $35.0 million in the aggregate. We were in compliance with all financial covenants of the Loan Agreement as of April 30, 2024. As of April 30, 2024, the Company had no borrowings outstanding on the letter of credit sub-facility and borrowings of $12.3 million outstanding under the revolving credit facility. Borrowings in UK There were no borrowings outstanding under the Company’s credit facility with HSBC Bank at April 30, 2024 and January 31, 2024. Pacific Borrowings Pacific has two facilities with the Bank of New Zealand. Pacific has a trade finance facility where the lender finances vendor purchases. The trade finance facility has a limit of 500,000 New Zealand dollars and caries an interest rate at the prevailing base rate for the relevant currency of the vendor plus a margin of 3.00% per annum. The facility includes two term loans. The first term loan of 1,500,000 New Zealand dollars matures on December 17, 2025, carries an interest rate of 2.3% per annum and requires monthly payments of $19,350 New Zealand dollars. The second term loan of 550,000 New Zealand dollars matures on November 18, 2024, carries an interest rate of 3.5% per annum and requires monthly payments of $10,005 New Zealand dollars. The facilities expire in August 2026 and are secured by a security interest in Pacific’s real property. Borrowings under the trade finance facility and amounts due in FY25 under the term loans are reported as short-term borrowings. There were no borrowings under this facility at April 30, 2024 and $0.3 million at January 31, 2024. Borrowings under the term loans due after FY25 are reported as long-term borrowings and were $0.7 million and $0.7 million at April 30, 3024 and January 31, 2024, respectively. |
Concentration of Risk
Concentration of Risk | 3 Months Ended |
Apr. 30, 2024 | |
Concentration of Risk | |
Concentration of Risk | 8. 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); Royal Bank of Scotland, 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, JSC Bank Centercredit in Kazakhstan, BNL Banca Nazionale del Lavoro, Monte Dei Paschi di Siena and Banca delle Terre Venete in Italy and Bank of New Zealand in New Zealand. 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 $2.6 million total included in U.S. bank accounts and approximately $25.8 million total in foreign bank accounts as of April 30, 2024, of which $27.6 million was uninsured. Major Customer No customer accounted for more than 10% of net sales during the three-month periods ended April 30, 2024 and 2023. Major Supplier No vendor accounted for more than 10% of purchases during the three-month periods ended April 30, 2024 and 2023. |
Stockholders Equity
Stockholders Equity | 3 Months Ended |
Apr. 30, 2024 | |
Stockholders Equity | |
Stockholders' Equity | 9. Stockholders’ Equity On June 21, 2017, the stockholders of the Company approved the Lakeland Industries, Inc. 2017 Equity Incentive Plan (the “2017 Plan”). 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 2017 Plan is administered by 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 (“SARs”). On June 16, 2021, the stockholders of the Company approved Amendment No. 1 (the “Amendment”) to the 2017 Plan. The Amendment increases the number of shares of common stock, par value $0.01 per share, of the Company reserved for issuance under the 2017 Plan by 480,000 shares. An aggregate of 840,000 shares of the Company’s common stock are authorized for issuance under the 2017 Plan, as amended, 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. On June 13, 2024, the stockholders of the Company will vote on a proposed Amendment No. 2 to the 2017 Plan, which would increase the number of shares of common stock, par value $0.01 per share, of the Company reserved for issuance under the 2017 Plan by 400,000 shares. The Company recognized total stock-based compensation costs, which are reflected in operating expenses (in $000’s): Three Months Ended April 30, 2024 2023 2017 Plan: Total restricted stock and stock option programs $ 198 $ 407 Total income tax expense recognized for stock-based compensation arrangements $ 42 $ 85 Restricted Stock and Restricted Stock Units Under the 2017 Plan, as described above, the Company awarded performance-based and service-based shares of restricted stock and restricted stock units to eligible employees and directors. The following table summarizes the activity under the 2017 Plan for the three months ended April 30, 2024 and 2023. This table reflects the amount of awards granted and the number of shares that would be vested if the Company were to achieve the maximum performance level under the June 2021, June 2022, March 2023 and April 2024 grants. Performance- Based Service-Based Total Weighted Average Grant Date Fair Value Outstanding at January 31, 2024 82,330 112,890 195,220 $ 16.61 Awarded 12,799 48,461 61,260 $ 18.45 Vested - (20,274 ) (20,274 ) $ 17.92 Forfeited (4,281 ) (14,233 ) (18,514 ) Outstanding at April 30, 2024 90,848 126,844 217,692 $ 16.61 Performance- Based Service-Based Total Weighted Average Grant Date Fair Value Outstanding at January 31, 2023 127,480 40,665 168,145 $ 22.95 Awarded 64,953 63,302 128,255 $ 14.50 Vested (71,202 ) (8,931 ) (80,133 ) Forfeited (24,031 ) (14,379 ) (38,410 ) Outstanding at April 30, 2023 97,200 80,657 177,858 $ 16.38 The actual number of shares of common stock of the Company, if any, to be earned by the award recipients is determined over a three year performance measurement period based on measures that include revenue growth and Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) margin for the April 2022 grants. Performance measures for the March 2023 grants are revenue growth, EBITDA margin and return on invested capital. Performance measures for the April 2024 grants are revenue growth, EBITDA margin and free cash flow margin. The performance targets have been set for each of the Minimum, Target, and Maximum levels. The actual performance amount achieved is determined by the Committee and may be adjusted for items determined to be unusual in nature or infrequent in occurrence, at the discretion of the Committee. The compensation cost is based on the fair value at the grant date, is recognized over the requisite performance/service period using the straight-line method, and is periodically adjusted for the probable number of shares to be awarded. As of April 30, 2024, unrecognized stock-based compensation expense totaled $1.7 million pursuant to the 2017 Plan based on outstanding awards under the 2017 Plan. This expense is expected to be recognized over approximately two years. Stock Repurchase Program On February 17, 2021, the Company’s Board of Directors approved a stock repurchase program under which the Company may No shares were repurchased during the three months ended April 30, 2024, leaving $5.0 million remaining under the share repurchase program at April 30, 2024. The share repurchase program has no expiration date but may be terminated by the Board of Directors at any time. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 30, 2024 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The Company’s provision for income taxes for the three months ended April 30, 2024, and 2023 is based on the estimated annual effective tax rate, in addition to discrete items. The Company’s effective tax rate for the first quarter of FY25 was 19.0%, which differs from the U.S. federal statutory rate of 21% primarily due to rate differentials in foreign tax jurisdictions and Global Intangible Low-Taxed Income (“GILTI”) and impacts from the final earn-out adjustments related to the Pacific and Eagle acquisitions. The Company's effective tax rate for the first quarter of FY24 was 29.1% which differs from the U.S. federal statutory rate of 21%, primarily due to rate differentials in foreign tax jurisdictions and GILTI. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. The valuation allowance was $6.9 million and $6.7 million as of April 30, 2024 and January 31, 2024, respectively. With the exception of our UK and China subsidiaries for which we accrue relevant deferred tax impacts related to non-indefinitely reinvested cash, we consider the excess of the amount for financial reporting over the tax basis (including undistributed and previously taxed earnings) of investments in our other foreign subsidiaries as of April 30, 2024 to be indefinitely reinvested in the foreign jurisdictions on the basis of our specific plan for reinvestment and estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. Therefore, we have not provided for deferred taxes related to such excess or the relevant portions thereof and disclosed that the determination of any deferred taxes related to this excess is not practicable in those permanently reinvested jurisdictions. We have made no changes to our policy on indefinite reinvestment during the quarter ended April 30, 2024. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Apr. 30, 2024 | |
Net income per common share: | |
Net Income Per Share | 11. Net Income Per Share The following table sets forth the computation of basic and diluted net income per share as follows (in $000s except per share amounts): Three Months Ended April 30, 2024 2023 Numerator: Net income $ 1,653 $ 1,320 Denominator: Denominator for basic net income per share (weighted-average shares which exclude shares in the treasury, 1,358,208 and 1,353,508 at April 30, 2024 and 2023, respectively 7,364,757 7,325,005 Effect of dilutive securities from restricted stock plan 217,692 177,858 Denominator for diluted net income per share (adjusted weighted average shares) 7,582,449 7,502,863 Basic net income per share $ 0.22 $ 0.18 Diluted net income per share $ 0.22 $ 0.18 |
Contingencies
Contingencies | 3 Months Ended |
Apr. 30, 2024 | |
Contingencies | |
Contingencies | 12. 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 legal counsel assess such contingent liabilities, which inherently involve 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. During the third quarter of FY24, the Company sent a letter to the landlord outlining certain structural defects on the newly constructed facility in Monterrey, Mexico that would inhibit the Company from effectively utilizing the facility for its intended purpose. The Company has initiated discussions with the landlord as to potential remedies which may inform our decision-making process with respect to this property. Changes in our long-term intended use for the building may impact the carrying value of the currently recorded right of use asset. 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 April 30, 2024, to the best of the Company’s knowledge, there were no significant outstanding claims or litigation. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Apr. 30, 2024 | |
Segment Reporting | |
Segment Reporting | 13. Segment Reporting 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 Vietnam (primarily disposable production), a manufacturing facility in New Zealand (helmets) 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, Australia, New Zealand 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 three-month periods noted therein: Three Months Ended April 30, (in millions of dollars) 2024 2023 Net Sales: USA Operations (including Corporate) $ 15.9 $ 13.6 Other foreign 4.5 3.1 Europe 6.0 4.0 Mexico 1.6 1.2 Asia 10.4 11.1 Canada 3.0 2.5 Latin America 4.9 3.2 Less intersegment sales (10.0 ) (10.0 ) Consolidated sales $ 36.3 $ 28.7 External Sales: USA Operations (including Corporate) $ 14.3 $ 12.3 Other foreign 3.8 2.3 Europe 6.0 4.0 Mexico 1.1 0.8 Asia 3.2 3.7 Canada 3.0 2.5 Latin America 4.9 3.1 Consolidated external sales $ 36.3 $ 28.7 Intersegment Sales: USA Operations (including Corporate) $ 1.6 $ 1.3 Other foreign 0.7 0.8 Mexico 0.5 0.4 Asia 7.2 7.4 Latin America - 0.1 Consolidated intersegment sales $ 10.0 $ 10.0 Three Months Ended April 30, (in millions of dollars) 2024 2023 Operating Profit (Loss): USA Operations (including Corporate) $ (0.6 ) $ (1.8 ) Other foreign 0.6 0.7 Europe (0.4 ) 0.2 Mexico (0.4 ) (0.4 ) Asia 0.9 0.8 Canada 0.3 0.4 Latin America 1.7 0.9 Intersegment profit (loss) 0.1 1.1 Consolidated operating profit $ 2.2 $ 1.9 April 30, 2024 January 31, 2024 (in millions of dollars) Total Assets: USA Operations (including Corporate) $ 41.5 $ 47.1 Other foreign 19.8 19.6 Europe 46.6 27.2 Mexico 10.5 10.2 Asia 30.3 29.0 Canada 8.7 8.3 Latin America 14.1 12.3 Consolidated assets $ 171.5 $ 153.7 The table below presents external sales by product line: Three Months Ended April 30, (in millions of dollars) 2024 2023 External Sales by product lines: Disposables $ 13.2 $ 12.4 Chemical 6.3 5.4 Fire 10.5 5.5 Gloves 0.5 0.7 High Visibility 1.2 1.2 High Performance Wear 1.2 1.1 Wovens 3.4 2.3 Consolidated external sales $ 36.3 $ 28.7 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Apr. 30, 2024 | |
Subsequent Events | |
Subsequent Events | 14. Subsequent Events Acquisition of LHD Group On April 2, 2024, Lakeland Global Safety, Ltd. (“Lakeland Global”), a wholly-owned subsidiary the Company, entered into a Share Sale and Purchase Agreement (the “Purchase Agreement”), by and between Kantaras Investments Pte. Ltd., Lakeland Global, and the Company, pursuant to which Lakeland Global will acquire all of the shares of the fire and rescue business of LHD Group Deutschland GmbH, LHD Group Australia Pty Ltd and LHD Group Hong Kong Ltd., wholly-owned entities of Kantaras Investments Pte. Ltd. (collectively, the “LHD Group”) for a purchase price of EUR 15.4 million (approximately USD $16.7 million), subject to post-closing adjustments and customary holdback provisions. The LHD Group is a leader in firefighter turnout gear, accessories, and Total Care services, including laundry, repair, and maintenance. The transaction will be funded through the Company’s credit facility and is expected to close in June 2024. Second Quarter Dividend On May 1, 2024, the Company’s Board of Directors declared a quarterly cash dividend. The quarterly dividend of $0.03 per share or approximately $0.2 million, was paid on May 22, 2024, to stockholders of record as of May 15, 2024. |
Investments and Acquisitions (T
Investments and Acquisitions (Tables) | 3 Months Ended |
Apr. 30, 2024 | |
Investments and Acquisitions | |
Schedule of fair value of assets and liabilities acquired | Net working capital acquired $ 5,582 Property, plant and equipment 1,277 Customer relationships 425 Trade names and trademarks 567 Technological know-how 250 Goodwill 1,546 Total assets acquired $ 9,647 |
Schedule of Pro forma combined financial information | (in millions, except per share amount) Quarter Ended April 30, 2024 2023 Net sales $ 36.3 $ 34.4 Net income $ 1.7 $ 1.4 Basic earnings per share $ 0.22 $ 0.19 Diluted earnings per share $ 0.22 $ 0.19 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Apr. 30, 2024 | |
Inventories | |
Schedule of inventory | April 30, 2024 January 31, 2024 Raw materials $ 29,453 $ 27,417 Work-in-process 928 668 Finished goods 32,138 29,719 Excess and obsolete adjustments (6,455 ) (6,554 ) $ 56,064 $ 51,250 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets Net (Tables) | 3 Months Ended |
Apr. 30, 2024 | |
Goodwill and Intangible Assets Net | |
Schedule of changes in goodwill | 2024 2023 Balance at January 31 $ 6,830 $ 6,042 Acquisitions 1,242 - Amortization (150 ) (102 ) Balance at April 30 $ 7,922 $ 5,940 |
Schedule of changes in intangible assets | 2024 2023 Balance at January 31 $ 13,669 $ 8,473 Measurement period adjustment - - Acquisitions 1,546 - Balance at April 30 $ 15,215 $ 8,473 |
Contract Advances (Tables)
Contract Advances (Tables) | 3 Months Ended |
Apr. 30, 2024 | |
Contract Advances | |
Schedule of contract Advances | 2024 2023 Contract liability – January 31 $ 104 $ 1,627 Increases to contract liability 173 212 Decreases to contract liability (102 ) (500 ) Contract liability – April 30 $ 175 $ 1,339 |
Stockholders Equity (Tables)
Stockholders Equity (Tables) | 3 Months Ended |
Apr. 30, 2024 | |
Stockholders Equity | |
Schedule of share-based compensation, restricted stock units award activity | Three Months Ended April 30, 2024 2023 2017 Plan: Total restricted stock and stock option programs $ 198 $ 407 Total income tax expense recognized for stock-based compensation arrangements $ 42 $ 85 |
Schedule of restricted stock units | Performance- Based Service-Based Total Weighted Average Grant Date Fair Value Outstanding at January 31, 2024 82,330 112,890 195,220 $ 16.61 Awarded 12,799 48,461 61,260 $ 18.45 Vested - (20,274 ) (20,274 ) $ 17.92 Forfeited (4,281 ) (14,233 ) (18,514 ) Outstanding at April 30, 2024 90,848 126,844 217,692 $ 16.61 Performance- Based Service-Based Total Weighted Average Grant Date Fair Value Outstanding at January 31, 2023 127,480 40,665 168,145 $ 22.95 Awarded 64,953 63,302 128,255 $ 14.50 Vested (71,202 ) (8,931 ) (80,133 ) Forfeited (24,031 ) (14,379 ) (38,410 ) Outstanding at April 30, 2023 97,200 80,657 177,858 $ 16.38 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Apr. 30, 2024 | |
Net income per common share: | |
Schedule of earnings per share, basic and diluted | Three Months Ended April 30, 2024 2023 Numerator: Net income $ 1,653 $ 1,320 Denominator: Denominator for basic net income per share (weighted-average shares which exclude shares in the treasury, 1,358,208 and 1,353,508 at April 30, 2024 and 2023, respectively 7,364,757 7,325,005 Effect of dilutive securities from restricted stock plan 217,692 177,858 Denominator for diluted net income per share (adjusted weighted average shares) 7,582,449 7,502,863 Basic net income per share $ 0.22 $ 0.18 Diluted net income per share $ 0.22 $ 0.18 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Apr. 30, 2024 | |
Segment Reporting | |
Schedule of segment information | Three Months Ended April 30, (in millions of dollars) 2024 2023 Net Sales: USA Operations (including Corporate) $ 15.9 $ 13.6 Other foreign 4.5 3.1 Europe 6.0 4.0 Mexico 1.6 1.2 Asia 10.4 11.1 Canada 3.0 2.5 Latin America 4.9 3.2 Less intersegment sales (10.0 ) (10.0 ) Consolidated sales $ 36.3 $ 28.7 External Sales: USA Operations (including Corporate) $ 14.3 $ 12.3 Other foreign 3.8 2.3 Europe 6.0 4.0 Mexico 1.1 0.8 Asia 3.2 3.7 Canada 3.0 2.5 Latin America 4.9 3.1 Consolidated external sales $ 36.3 $ 28.7 Intersegment Sales: USA Operations (including Corporate) $ 1.6 $ 1.3 Other foreign 0.7 0.8 Mexico 0.5 0.4 Asia 7.2 7.4 Latin America - 0.1 Consolidated intersegment sales $ 10.0 $ 10.0 Three Months Ended April 30, (in millions of dollars) 2024 2023 Operating Profit (Loss): USA Operations (including Corporate) $ (0.6 ) $ (1.8 ) Other foreign 0.6 0.7 Europe (0.4 ) 0.2 Mexico (0.4 ) (0.4 ) Asia 0.9 0.8 Canada 0.3 0.4 Latin America 1.7 0.9 Intersegment profit (loss) 0.1 1.1 Consolidated operating profit $ 2.2 $ 1.9 April 30, 2024 January 31, 2024 (in millions of dollars) Total Assets: USA Operations (including Corporate) $ 41.5 $ 47.1 Other foreign 19.8 19.6 Europe 46.6 27.2 Mexico 10.5 10.2 Asia 30.3 29.0 Canada 8.7 8.3 Latin America 14.1 12.3 Consolidated assets $ 171.5 $ 153.7 |
Schedule of external sales by product line | Three Months Ended April 30, (in millions of dollars) 2024 2023 External Sales by product lines: Disposables $ 13.2 $ 12.4 Chemical 6.3 5.4 Fire 10.5 5.5 Gloves 0.5 0.7 High Visibility 1.2 1.2 High Performance Wear 1.2 1.1 Wovens 3.4 2.3 Consolidated external sales $ 36.3 $ 28.7 |
Investments and Acquisitions (D
Investments and Acquisitions (Details) - Acquisition of Jolly [Member] $ in Thousands | Apr. 30, 2024 USD ($) |
The Fair Values Of The Assets And Liabilities | $ 9,647 |
Customer Relationships Member | |
The Fair Values Of The Assets And Liabilities | 425 |
Net working capital | |
The Fair Values Of The Assets And Liabilities | 5,582 |
Goodwill | |
The Fair Values Of The Assets And Liabilities | 1,546 |
Property, plant and equipment | |
The Fair Values Of The Assets And Liabilities | 1,277 |
Technological know-how | |
The Fair Values Of The Assets And Liabilities | 250 |
Trade names and trademarks | |
The Fair Values Of The Assets And Liabilities | $ 567 |
Investments and Acquisitions _2
Investments and Acquisitions (Details 1) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
Basic earnings per share | $ 0.22 | $ 0.18 |
Diluted earnings per share | $ 0.22 | $ 0.18 |
Pro forma combined financial information [Member] | ||
Net sales | $ 36.3 | $ 34.4 |
Net income | $ 1.7 | $ 1.4 |
Basic earnings per share | $ 0.22 | $ 0.19 |
Diluted earnings per share | $ 0.22 | $ 0.19 |
Investments and Acquisitions _3
Investments and Acquisitions (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 15 Months Ended | |||||||||||||
Feb. 05, 2024 | Mar. 31, 2024 | Oct. 26, 2022 | Oct. 18, 2021 | Apr. 30, 2024 | Apr. 30, 2023 | Apr. 28, 2022 | Apr. 30, 2024 | Apr. 30, 2023 | Apr. 30, 2025 | Feb. 13, 2024 | Jan. 31, 2024 | Dec. 15, 2023 | Nov. 30, 2023 | Sep. 08, 2023 | May 19, 2023 | Dec. 02, 2022 | |
Revenue exceeds | $ 36,309,000 | $ 28,700,000 | |||||||||||||||
Recognized losses | $ 100,000 | $ 100,000 | |||||||||||||||
Investment amount | $ 4,618,000 | $ 4,618,000 | $ 4,719,000 | ||||||||||||||
Convertible series A shares issued | 0 | 0 | 0 | ||||||||||||||
Acquisition of Jolly [Member] | |||||||||||||||||
Cash transaction | $ 9,600,000 | ||||||||||||||||
Drew down on Credit Line | 7,500,000 | ||||||||||||||||
Estimated provision | 1,500,000 | ||||||||||||||||
Payment of debt amount | $ 600,000 | ||||||||||||||||
Acquisition Of Pacific [Member] | |||||||||||||||||
Revenue fall | $ 11,100,000 | ||||||||||||||||
Cash transaction | $ 8,600,000 | ||||||||||||||||
Description of Acquisition of eagle | The amount of the reduction to the holdback to be paid by Pacific is $0.3 million | ||||||||||||||||
Acquisition Of Eagle [Member] | |||||||||||||||||
Revenue exceeds | $ 630,000 | $ 6,000,000 | |||||||||||||||
Cash transaction | $ 1,050,000 | ||||||||||||||||
Description of revenue threshold | the Company had recorded $0.6 million for the earnout payment for the period May 1, 2023 through April 30, 2024, using a Monte Carlo simulation. Based on Eagle’s revenue for the period May 1, 2023 through April 30, 2024, the earnout payment was $0.2 million. The adjustment to the accrued earnout payment of $0.4 million was recorded in the quarter ended April 30, 2024 and reflected as a reduction in operating expenses | ||||||||||||||||
Investment Agreement [Member] | Bodytrak's [Member] | |||||||||||||||||
Payment of related party shares exchanged | $ 2,800,000 | ||||||||||||||||
Percentages of total share capital | 11.43% | ||||||||||||||||
Ownership percentage | 22.50% | ||||||||||||||||
Additional shares of series A, shares | 254,452 | ||||||||||||||||
Additional shares of series A, amount | $ 1,200,000 | ||||||||||||||||
Investment amount | $ 1,900,000 | ||||||||||||||||
Additional investment funding amount | $ 600,000 | $ 600,000 | $ 900,000 | ||||||||||||||
Investment funding amount | $ 600,000 | ||||||||||||||||
Series A shares acquired, shares | 381,679 | ||||||||||||||||
Series A shares acquired, amount | $ 1,900,000 | ||||||||||||||||
Convertible series A shares issued | 508,905 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Apr. 30, 2024 | Jan. 31, 2024 |
Inventories | ||
Raw materials | $ 29,453 | $ 27,417 |
Work-in-process | 928 | 668 |
Finished goods | 32,138 | 29,719 |
Excess and obsolete reserves | (6,455) | (6,554) |
Inventories, net | $ 56,064 | $ 51,250 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
Goodwill and Intangible Assets (Details) | ||
Balance at January 31 | $ 13,669 | $ 8,473 |
Measure period adjustment | 0 | 0 |
Acquisitions | 1,546 | 0 |
Balance at April 30 | $ 15,215 | $ 8,473 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
Goodwill and Intangible Assets (Details) | ||
Balance at January 31 | $ 6,830 | $ 6,042 |
Acquisitions | 1,242 | 0 |
Amortization expense | (150) | (102) |
Balance at April 30 | $ 7,922 | $ 5,940 |
Contract Advances (Details)
Contract Advances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
Contract Advances | ||
Opening Balance | $ 104 | $ 1,627 |
Increases to contract liability | 173 | 212 |
Decreases to contract liability | (102) | (500) |
Closing Balance | $ 175 | $ 1,339 |
LongTerm Debt (Details Narrativ
LongTerm Debt (Details Narrative) - USD ($) | 3 Months Ended | |
Apr. 30, 2024 | Jan. 31, 2024 | |
Short term borrowings | $ 0 | $ 298,000 |
Bank of New Zealand [Member] | ||
Description of term loan | The first term loan of 1,500,000 New Zealand dollars matures on December 17, 2025, carries an interest rate of 2.3% per annum and requires monthly payments of $19,350 New Zealand dollars | |
Bank of New Zealand [Member] | Seacond Term Loan [Member] | ||
Description of term loan | The second term loan of 550,000 New Zealand dollars matures on November 18, 2024, carries an interest rate of 3.5% per annum and requires monthly payments of $10,005 New Zealand dollars | |
Bank of New Zealand [Member] | January 31, 2024 [Member] | ||
Short term borrowings | $ 0 | 300,000 |
Long term borrowings | $ 700,000 | $ 700,000 |
Loan Agreement Amendment No 4 | Bank Of America | ||
Warranties to the Lender in the Loan Agreement | the Lender and the Company agreed to, among other things, (i) extend the expiration date of the credit facility to March 28, 2029, (ii) increase the availability under the revolving credit facility to $40.0 million with an accordion feature providing for the potential funding of an additional $10.0 million, (iii) remove the borrowing base component of the credit facility; and (iv) modify the interest rate based on Daily SOFR plus the Applicable Rate | |
Description of additional indebtedness | The Fourth Amendment provides for additional indebtedness or the assumption of existing indebtedness for acquisitions of foreign subsidiaries (not to exceed $10.0 million in USD) and increased the size of Permitted Acquisitions, without prior approval from the Lender, to $17.5 million per occurrence and $35.0 million in the aggregate | |
Loan Agreement Amendment No 4 | Bank Of America | Minimum | ||
Constituting SOFR margin range | 1.25% | |
Loan Agreement Amendment No 4 | Bank Of America | Maximum | ||
Constituting SOFR margin range | 2% | |
Loan Agreement | Minimum | ||
Revolving credit facility | $ 12,300,000 | |
Loan Agreement | Maximum | ||
Aggregate cumulative consideration | 7,500,000 | |
Revolving credit facility | $ 2,500,000,000 | |
Loan Agreement | Bank Of America | ||
Warranties to the Lender in the Loan Agreement | The Company could request from time to time an increase in the revolving credit loan commitment of up to $5.0 million (for a total commitment of up to $30.0 million). Borrowing pursuant to the revolving credit facility was subject to a borrowing base amount calculated as (a) 80% of eligible accounts receivable, as defined, plus (b) 50% of the value of acceptable inventory, as defined, minus (c) certain reserves as the Lender may establish for the amount of estimated exposure, as reasonably determined by the Lender from time to time, under certain interest rate swap contracts. The borrowing base limitation only applied during periods when the Company’s quarterly funded debt to EBITDA ratio, as defined, exceeded 2.00 to 1.00 | |
Revolving credit facility | $ 25,000,000 | |
Credit sub facility | $ 5,000,000 | |
Credit facility mature date | Jun. 25, 2025 | |
Cumulative consideration | $ 15,000,000 |
Concentration of Risk (Details
Concentration of Risk (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
Cash balances in banks in the United States of America | $ 2.6 | |
Cash balances in foreign bank accounts | 25.8 | |
Uninsured amount | $ 27.6 | |
Major Customer [Member] | ||
Concentration risk of net sales | 10% | 10% |
Major Supplier [Member] | ||
Concentration risk of net sales | 10% | 10% |
Stockholders Equity (Details)
Stockholders Equity (Details) - 2017 Plan [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
Total restricted stock and stock option programs | $ 198 | $ 407 |
Total income tax benefit recognized for stock-based compensation arrangements | $ 42 | $ 85 |
Stockholders Equity (Details 1)
Stockholders Equity (Details 1) - $ / shares | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
Performance Based [Member] | ||
Outstanding at beginning balance | 82,330 | 127,480 |
Awarded | 12,799 | 64,953 |
Vested | (71,202) | |
Forfeited | (4,281) | (24,031) |
Outstanding at ending balance | 90,848 | 97,200 |
Service Based [Member] | ||
Outstanding at beginning balance | 112,890 | 40,665 |
Awarded | 48,461 | 63,302 |
Vested | (20,274) | (8,931) |
Forfeited | (14,233) | (14,379) |
Outstanding at ending balance | 126,844 | 80,657 |
Weighted Average Grant Date Fair Value [Member] | ||
Weighted Average Grant Date Fair Value, Outstanding at beginning balance | $ 16.61 | $ 22.95 |
Weighted Average Grant Date Fair Value, Awarded | 18.45 | 14.50 |
Weighted Average Grant Date Fair Value, Vested | 17.92 | |
Weighted Average Grant Date Fair Value, Outstanding at ending balance | $ 16.61 | $ 16.38 |
Total [Member] | ||
Outstanding at beginning balance | 195,220 | 168,145 |
Awarded | 61,260 | 128,255 |
Vested | (20,274) | (80,133) |
Forfeited | (18,514) | (38,410) |
Outstanding at ending balance | 217,692 | 177,858 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | ||||||
Jan. 13, 2024 | Dec. 01, 2022 | Apr. 07, 2022 | Jul. 06, 2021 | Jun. 16, 2021 | Apr. 30, 2024 | Jan. 31, 2024 | Feb. 17, 2021 | |
Common stock, shares authorized | 20,000,000 | 20,000,000 | ||||||
2017 Plan [Member] | ||||||||
Common stock, shares authorized | 840,000 | |||||||
Repurchase of outstanding common stock | 400,000 | 480,000 | ||||||
Price per share | $ 0.01 | $ 0.01 | ||||||
Unrecognized stock-based compensation expense | $ 1.7 | |||||||
Stock Repurchase Program [Member] | ||||||||
Remaining value of repurchase of outstanding common stock | $ 5 | $ 5 | ||||||
Additional shares of common oitstanding | 5,000,000 | 5,000,000 | 5,000,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Millions | Apr. 30, 2024 | Jan. 31, 2024 |
Income Taxes | ||
Valuation allowance | $ 6.9 | $ 6.7 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
Net income per common share: | ||
Net income | $ 1,653 | $ 1,320 |
Denominator for basic net income per share | 7,364,757 | 7,325,005 |
Effect of dilutive securities from restricted stock plan and from dilutive effect of stock options | 217,692 | 177,858 |
Denominator for diluted net income per share (adjusted weighted average shares) | 7,582,449 | 7,502,863 |
Basic net income per share | $ 0.22 | $ 0.18 |
Diluted net income per share | $ 0.22 | $ 0.18 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2024 | Apr. 30, 2023 | Jan. 31, 2024 | |
Operating Profit (Loss) | $ 2,202 | $ 1,938 | |
Total assets | 171,520 | $ 153,745 | |
Asia | |||
Net sales | 10,400 | 11,100 | |
External sales | 3,200 | 3,700 | |
Intersegment sales | 7,200 | 7,400 | |
Operating Profit (Loss) | 900 | 800 | |
Total assets | 30,300 | 29,000 | |
Latin America | |||
Net sales | 4,900 | 3,200 | |
External sales | 4,900 | 3,100 | |
Intersegment sales | 0 | 100 | |
Operating Profit (Loss) | 1,700 | 900 | |
Total assets | 14,100 | 12,300 | |
Intersegment [Member] | |||
Net sales | (10,000) | (10,000) | |
Operating Profit (Loss) | 100 | 1,100 | |
USA | |||
Net sales | 15,900 | 13,600 | |
External sales | 14,300 | 12,300 | |
Intersegment sales | 1,600 | 1,300 | |
Operating Profit (Loss) | (600) | (1,800) | |
Total assets | 41,500 | 47,100 | |
Mexico | |||
Net sales | 1,600 | 1,200 | |
External sales | 1,100 | 800 | |
Intersegment sales | 500 | 400 | |
Operating Profit (Loss) | (400) | (400) | |
Total assets | 10,500 | 10,200 | |
Canada | |||
Net sales | 3,000 | 2,500 | |
External sales | 3,000 | 2,500 | |
Operating Profit (Loss) | 300 | 400 | |
Total assets | 8,700 | 8,300 | |
Total Segment [Member] | |||
Net sales | 36,300 | 28,700 | |
External sales | 36,300 | 28,700 | |
Intersegment sales | 10,000 | 10,000 | |
Operating Profit (Loss) | 2,200 | 1,900 | |
Total assets | 171,500 | 153,700 | |
Other Foreign [Member] | |||
Net sales | 4,500 | 3,100 | |
External sales | 3,800 | 2,300 | |
Intersegment sales | 700 | 800 | |
Operating Profit (Loss) | 600 | 700 | |
Total assets | 19,800 | 19,600 | |
Europe UK | |||
Net sales | 6,000 | 4,000 | |
External sales | 6,000 | 4,000 | |
Operating Profit (Loss) | (400) | $ 200 | |
Total assets | $ 46,600 | $ 27,200 |
Segment Reporting (Details 1)
Segment Reporting (Details 1) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
Total Segment [Member] | ||
External sales | $ 36.3 | $ 28.7 |
Fire | ||
External sales | 10.5 | 5.5 |
Disposables | ||
External sales | 13.2 | 12.4 |
Chemical | ||
External sales | 6.3 | 5.4 |
Gloves | ||
External sales | 0.5 | 0.7 |
High Visibility | ||
External sales | 1.2 | 1.2 |
High Performance Wear | ||
External sales | 1.2 | 1.1 |
Wovens | ||
External sales | $ 3.4 | $ 2.3 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | May 01, 2024 | Apr. 02, 2024 |
Subsequent Event [Member] | ||
Per share | $ 0.03 | |
Cash dividend | $ 0.2 | |
Lakeland Global Sefety Ltd [Member] | ||
Fully acquired of subsidiary company | $ 16.7 |