UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - Q
(Mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended, April 30, 1995
OR
____ TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number: 0-15535
LAKELAND INDUSTRIES, INC.
(Exact name of Registrant as specified in it's charter)
Delaware 13-3115216
(State of incorporation) (IRS Employer Identification Number)
711-2 Koehler Avenue, Ronkonkoma, New York 11779
(Address of principal executive offices)
(516) 981-9700
(Registrant's telephone number, including area code)
Indicate by check mark whether, the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO _____
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date:
Common Stock, $.01 par value, outstanding at June 8, 1995 -
2,550,000 shares.
LAKELAND INDUSTRIES, INC.
AND SUBSIDIARIES
FORM 10-Q
The following information of the Registrant and its subsidiaries
is submitted herewith:
PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements:
Page
Introduction 1
Condensed Consolidated Balance Sheets
- - - April 30, 1995 and January 31, 1995
2
Condensed Consolidated Statements
of Operations and Retained Earnings -
Three Months Ended April 30, 1995 and 1994 3
Condensed Consolidated Statements of
Cash Flows - Three Months Ended April 30, 1995
and 1994 4
Notes to Condensed Consolidated Financial
Statements 5
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II - OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K None
Signatures 7
LAKELAND INDUSTRIES, INC.
AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Introduction
The condensed consolidated financial statements included herein
have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission
and reflect all adjustments which are, in the opinion of
management, necessary to present fairly the consolidated
financial information required therein. Certain information and
note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the
disclosures are adequate to make the information presented not
misleading. It is suggested that these consolidated financial
statements be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's Annual
Report on Form 10-K filed with the Securities and Exchange
Commission for the year ended January 31, 1995.
The results of operations for the three month periods ended
April 30, 1995 and 1994 are not necessarily indicative of the
results to be expected for the full year.
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
April 30, January 31,
ASSETS 1995 1995
(unaudited)
Current Assets:
Cash $196,086 $119,919
Accounts receivable-trade,
net of allowance for
doubtful accounts of
$376,000 at April 30, 1995
and January 31, 1995 5,404,795 4,408,871
Inventories 9,315,664 8,858,298
Deferred income taxes 455,000 455,000
Other current assets 220,169 160,551
------- -------
Total current assets 15,591,714 14,002,639
Property and equipment, net
of accumulated depreciation
of $1,259,000 at April 30,
1995 and $1,208,000
January 31,1995 734,503 691,258
Excess of cost over the
fair value of net assets
acquired, net of accumulated
amortization of $124,000 at
April 30, 1995 and
$117,000 at January 31, 1995 389,019 396,428
Mortgage receivable 152,978 154,437
Other assets 312,945 317,086
------- -------
$17,181,159 $15,561,848
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $3,380,556 $2,824,548
Current portion of long-term
liabilities 4,577,302 3,615,873
Accrued expenses and other
current liabilities 224,253 372,416
--------- ---------
Total current liabilities 8,182,111 6,812,837
---------- ----------
Long-term liabilities 440,915 440,915
-------- ---------
Deferred income taxes 133,000 133,000
--------- ---------
Commitments and Contingency
Stockholders' Equity
Preferred stock, $.01 par;
authorized 1,500,000 shares
(none issued)
Common stock, $.01 par;
authorized 10,000,000 shares;
issued and outstanding
2,550,000 shares 25,500 25,500
Capital in excess of par value 5,981,226 5,981,226
Retained earnings 2,418,407 2,168,370
Total stockholders' equity 8,425,133 8,175,096
$17,181,159 $15,561,848
=========== ===========
See notes to condensed consolidated financial statements.
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (UNAUDITED)
THREE MONTHS ENDED
April 30,
1995 1994
Net Sales $10,660,593 $8,815,846
Cost of Goods Sold 8,776,628 7,142,309
Gross Profit 1,883,965 1,673,537
Operating Expenses 1,378,002 1,202,400
---------- ---------
Income from Operations 505,963 471,137
Other Income/(expense), net 22,534 8,114
Interest Expense (113,460) (57,931)
--------- --------
Income before income taxes 415,037 421,320
Provision for income taxes 165,000 135,000
--------- --------
Net Income 250,037 286,320
Retained earnings at
beginning of period 2,168,370 746,892
--------- -------
Retained earnings at end
of period $2,418,407 $1,033,212
========== ==========
Income per common and
common equivalent share $.09 $.11
==== ====
Number of common and common
equivalent shares outstanding 2,655,797 2,594,692
========= =========
See notes to condensed consolidated financial statements.
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited)
THREE MONTHS ENDED
April 30,
1995 1994
Cash Flows from Operating
Activities:
Net Income $250,037 $286,320
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and amortization 60,548 64,056
Decrease (increase) in
accounts receivable (995,924) (83,212)
Decrease (increase) in
inventories (457,366) (308,513)
Decrease in deferred income
tax assets 0 25,000
Decrease (increase) in other
current assets (59,618) 12,247
Decrease (increase) in other
assets 5,600 0
Increase (decrease) in
accounts payable, accrued
expenses and other current
liabilities 407,845 296,646
------- -------
Net cash provided by
operating activities (788,878) 292,544
Cash Flows from Investing
Activities -
Purchases of property and
equipment - net (96,384) (31,095)
Cash Flows from Financing
Activities:
Net borrowings (reduction)
under line of credit
agreement 961,429 (250,213)
------- ---------
Net increase (decrease)
in cash 76,167 11,236
Cash at beginning of
period 119,919 13,353
------- ------
Cash at end of period $196,086 $24,589
======== =======
See notes to condensed consolidated financial statements.
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A Inventories:
Inventories consist of the following:
April 30, January 31,
1995 1995
Raw materials $3,951,960 $3,097,052
Work in process 2,170,474 2,092,028
Finished goods 3,193,230 3,669,218
---------- ---------
$9,315,664 $8,858,298
========= =========
Inventories are stated at the lower of cost or market. Cost is
determined generally on the first-in, first-out method.
B. Earnings Per Common and Common Equivalent Share:
Earnings per share for the three month periods ended April 30,
1995 and 1994 is based on the weighted average number of common
shares outstanding and common share equivalents.
C. Revolving Credit Facility:
At April 30, 1995, the balance outstanding under the Company's
secured revolving credit facility amounted to $4,527,302. The
Company was not in compliance with the loan covenant regarding
the ratio of debt to net worth at April 30, 1995, but has
received a waiver form the lending institution. This facility
bears interest at the bank's prime rate, plus 1.5%, is
collateralized by the Company's inventory and accounts receivable
and expires on September 22, 1995. The Company is currently
reviewing several proposals related to the renewal or replacement
of its current credit facility.
LAKELAND INDUSTRIES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
Three months ended April 30, 1995 compared to the three months
ended April 30, 1994:
Net Sales for the quarter ended April 30, 1995 increased
$1,845,000 or 20.9% to $10,661,000 from $8,816,000 reported for
the corresponding period of the prior year. Widening of the
customer base, a price increase effective with orders received as
of February 1, 1995 and increased unit shipments of various
protective garment products are the principle reasons for the
upward trend. This industry continues to be highly competitive.
Net Sales increased 18.6% , during the quarter ended April 30,
1995 as compared to the immediate preceding quarter, principally
due to volume increases of various protective garments and the
price increase mentioned above.
However, gross profit as a percentage of net sales decreased to
17.7% for the quarter ended April 30, 1995 from 19% reported for
the corresponding period of the prior year, principally due to
the cost of material increasing at the commencement of the new
fiscal year, shipments to customers with the new price increase
shipping later in the quarter and the Company meeting competitive
pricing on it's most popular disposable products. Gross profit
margins increased 5.5% during the quarter ended April 30, 1995
from the immediate preceding quarter, principally due to the
recognition of certain raw and finished goods inventory write-
offs during the previous quarter.
Operating expenses as a percentage of net sales decreased, to
12.9% for the quarter ended April 30, 1995 from 13.6% for the
corresponding period of the prior year, as cost reduction
programs continue and sales continue to increase.
Interst expense increased as interest rates and borrowing
increased during the current year quarter.
As a result of the foregoing, operating income decreased
slightly to $250,000 for the quarter ended April 30, 1995 from
$286,000 from the corresponding period of the prior year.
LIQUIDITY and CAPITAL RESOURCES
Lakeland has historically met its cash requirements through
funds generated from operations and borrowings under a revolving
credit facility. In September 1993, the Company entered into a $5
million, two-year, secured revolving credit agreement with a
bank, replacing the $3.4 million line that was to expire in
November 1993. Borrowings under this credit facility bear
interest at a rate per annum equal to the higher of the prime
commercial lending rate (plus 1.5%) as specified by the bank or
the Federal Funds Rate (plus .5%). The Company's April 30, 1995
balance sheet shows strong current ratios and working capital
position with the Company receiving a waiver for non-compliance
with one covenant of its revolving credit agreement at April 31,
1995. This facility matures on September 22, 1995. Management is
in negotiations with the Bank and other lenders to renew the
facility or to replace this facility and believes it will
ultimately be successful in obtaining a new long-term credit
agreement. The Company's management believes that its positive
financial position, together with a new credit agreement, will
provide sufficient funds for operating purposes for the next
twelve months.
Item 6. Exhibits and Reports on Form 8-K:
a - None
b - No reports on Form 8-K were filed during the three month
period ended April 30, 1995
_________________SIGNATURES_________________
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
LAKELAND INDUSTRIES, INC.
(Registrant)
Date: June 9, 1995 Raymond J. Smith
Raymond J. Smith,
President and Chief Executive
Officer
Date: June 9, 1995 James M McCormick
James M. McCormick,
Vice President and Treasurer
(Principal Accounting Officer)