FORM 10-K - ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (Fee Required)
For the fiscal year ended JANUARY 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No fee required)
For the transition period from ________________ to _________________
COMMISSION FILE NUMBER: 0 - 15535
LAKELAND INDUSTRIES, INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 13-3115216
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(State of Incorporation) (I.R.S. Employer Identification Number)
711-2 KOEHLER AVE., RONKONKOMA, NY 11779
________________________________________________________________________________
(Address of Principal Executive Offices)
(631) 981-9700
________________________________________________________________________________
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
COMMON STOCK, $.01 PAR VALUE
________________________________________________________________________________
(Title of class)
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S - K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10 - K or any
amendment to this Form 10 - K __.
The aggregate market value of the Common Stock outstanding and held by
non-affiliates (as defined in Rule 405 under the Securities Exchange Act of
1934) of the Registrant, based upon the closing price of the Common Stock on
NASDAQ on the last day of the registrant's most recently completed second
quarter (July 31, 2002) was approximately $16,648,694 (based on 1,922,482 shares
held by non-affiliates).
The number of shares outstanding of the Registrant's common stock, $.01 par
value, on April 25, 2003 was 2,972,407.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the year ended January 31,
2003 are incorporated by reference in Items 5-7A of Part II and certain portions
of the Registrant's Definitive Proxy Statement, for the Annual Meeting of
Stockholders to be held June 18, 2003, are incorporated by reference in Items 10
- - 13 of Part III of this Annual Report on Form 10-K.
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THIS ANNUAL REPORT ON FORM 10-K MAY CONTAIN CERTAIN STATEMENTS THAT ARE
NOT HISTORICAL FACTS AND MAY BE FORWARD-LOOKING. SUCH STATEMENTS INVOLVE
ESTIMATES, ASSUMPTIONS, RISKS AND UNCERTAINTIES. THERE IS NO ASSURANCE THAT
FUTURE RESULTS WILL NOT DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY
FORWARD-LOOKING STATEMENTS.
PART I
ITEM 1. BUSINESS
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Lakeland Industries, Inc. (the "Company") believes that it is a leading
manufacturer of a comprehensive line of safety garments and accessories for the
industrial safety and protective clothing industries in the United States. The
Company's major product areas include disposable / limited use protective
industrial garments, specialty safety and industrial work gloves, reusable woven
industrial and medical apparel, fire and heat protective clothing along with
protective systems for personnel, full body suits for use by toxic waste, hazmat
clean up teams, and "first responders" to acts of terrorism. Products are
manufactured both domestically and internationally by the Company and by
contract manufacturers. Products are sold by Company personnel and 44
independent sales representatives, primarily to a network of safety and mill
supply distributors;
The Company's disposable protective garments are used primarily for: (i)
SAFETY AND HAZARD PROTECTION, to protect the wearer from contaminants or
irritants, such as, chemicals, pesticides, fertilizers, paint, grease, and dust
and from limited exposure to hazardous waste and toxic chemicals including
acids, asbestos, lead, and hydro-carbon's (PCB's) (ii) CLEAN ROOM ENVIRONMENTS,
for the prevention of human contamination of manufacturing processes in clean
room environments, (iii) HAND AND ARM PROTECTION, to protect the wearer's hand
and arms from lacerations, heat and chemical irritants without sacrificing
manual dexterity or comfort, (iv) HEAT AND FIRE PROTECTION, to protect municipal
fire fighters, military, airport and industrial fire fighting teams and for
maintenance of "hot" equipment, such as, coke ovens, kilns, glass furnaces,
refinery installations, and smelting plants, (v) PROTECTION FROM VIRAL AND
BACTERIAL MICROBIOLOGICALS, to protect the wearer from contagious diseases, such
as AIDS and hepatitis, at hospitals, clinics and emergency rescue sites, and
(vi) PROTECTION FROM HIGHLY CONCENTRATED AND POWERFUL CHEMICAL AND BIOLOGICAL
TOXINS, to protect the wearer from toxic wastes at Super Fund sites, accidental
toxic chemical spills or biological discharges, the handling of chemical or
biological warfare weapons and the cleaning and maintenance of chemical,
petro-chemical and nuclear facilities, and by "first responders" to acts of
terrorism.
These products are manufactured, distributed and sold through four
divisions and five wholly owned subsidiaries.
The Company was incorporated in New York in 1982 and later reincorporated
in Delaware in 1986. A new subsidiary, Fireland Industries, Inc. was formed
during fiscal 1994 to act as Trustee and Sponsor of the Fireland Industries,
Inc. Pension Plan. During fiscal 1998, the name of this subsidiary was changed
to Laidlaw, Adams & Peck, Inc.
Effective February 1, 1999, and October 1999 the China divisions, Weifang
Lakeland Safety Products Co., Ltd., and MeiYang Protective Products Co., Ltd.
were registered enterprises in China and were accounted for as a wholly owned
subsidiary of the Company and of the Company's subsidiary Laidlaw, Adams & Peck,
Inc., respectively and QingDao MayTung Healthcare Co. Ltd. was registered as a
business enterprise in China in August 20, 2001. Lakeland de Mexico S. A. de
C.V. was incorporated in Mexico on September 13, 1995 and Lakeland Protective
Wear, Inc. was incorporated in Canada on December 13, 1994 and Lakeland
Industries Europe Ltd. was incorporated in the U.K. on August 1, 2002. These are
accounted for as wholly owned subsidiaries of the Company.
BACKGROUND AND MARKET
The market for disposable industrial garments has increased substantially
in the past 20 years. In 1970, Congress enacted the Occupational Safety and
Health Act ("OSHA"), which requires employers to supply protective clothing in
certain work environments. At about the same time, DuPont developed Tyvek which,
for the first time, allowed for the economical production of lightweight,
disposable protective clothing. The attraction of disposable garments grew in
the late 1970's with the increases in both labor and material costs of producing
cloth garments and the promulgation of federal, state and local regulations
requiring that employees wear protective clothing to protect against exposure to
certain contaminants, such as asbestos and P.C.B.s.
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The use of disposable garments avoids the continuing costs of laundering
and decontaminating woven cloth work garments and reduces the overhead costs
associated with handling, transporting and replacing such garments. As
manufacturers have become aware of the advantages of disposable clothing, the
demand for such garments has increased. This has allowed for greater production
volume and, in turn, has reduced the cost of manufacturing disposable industrial
garments.
The Company believes that this market will grow due to the extensive
government legislation which mandates the continued clean up of toxic waste
sites and the elimination of hazardous materials from the environment as
promulgated under prior Congressional Super Fund Acts. The Environmental
Protection Agency ("EPA") designated OSHA to be responsible for the health and
safety of workers in and around areas of hazardous materials and contaminated
waste. OSHA responded by formulating an all encompassing compendium of safety
regulations that prescribe operating standards for all aspects of OSHA projects.
Almost 2 million people are affected by OSHA Standards today. Various states
have also enacted worker safety laws which are equal to or go beyond OSHA
standards and requirements, as it affects the Company's products.
In 1990, additional standards proposed and developed by the National Fire
Protection Association ("NFPA") and the American Society for Testing and
Materials ("ASTM") were accepted by OSHA. NFPA Standard 1991 set performance
requirements for total-encapsulating vapor-proof chemical suits and includes
rigid chemical and flame resistance tests and a permeability test against 17
challenge chemicals. The basic OSHA Standards call for 4 levels of protection, A
through D, and specify in detail the equipment and clothing required to
adequately protect the wearer at corresponding danger levels. A summary of these
four levels follows:
NFPA 1991 / LEVEL A calls for total encapsulation in a vapor-proof
chemical suit with "self-contained breathing apparatus" ("SCBA") and appropriate
accessories.
LEVEL B calls for SCBA or positive pressure supplied respirator with
escape SCBA, plus hooded chemical resistant clothing (overalls, and long sleeved
jacket; coveralls; one or two piece chemical-splash suit; or disposable
chemical-resistant overalls).
LEVEL C requires hooded chemical-resistant clothing (overalls; two-piece
chemical-splash suit; disposable chemical-resistant overalls).
LEVEL D is basically a work and/or training situation requiring minimal
coverall protection.
The growth in the markets for disposable/limited use garments in the
industrial safety market has resulted from the following factors:
o The Federal Government's response to the events of September 11, 2001.
Homeland Security legislation already passed by Congress include the
"Fire Act" and "Bioterrorism Act", which propose and provide for the
release of more than a billion dollars for the purchase of equipment by
fire, and police departments, hospitals, emergency medical personnel,
military and federal law enforcement personnel and other so called
"first responders" to a terrorist threat or attack from 2003 through
2005.
o lower cost of disposable/limited use garments as opposed to reusable
woven and cloth garments due to the elimination of costs associated with
laundering, decontaminating, handling, transporting and replacing
reusable woven or cloth garments;
o the promulgation of federal (OSHA) and state regulations requiring that
employees wear protective clothing to protect against exposure to
certain contaminants, such as, asbestos, PCB(s), lead, acids and other
numerous hazardous chemicals and radioactive materials;
o increasing workmen's compensation claims and large class action
liability suits instituted by both present and prior employees for
failure to be protected against hazardous agents found in the workplace.
In general, manufacturers of industrial and safety clothing were
considered to be highly fragmented, since they consisted of a large number of
closely held small family businesses. However, most of the companies that
competed directly with Lakeland in disposable limited use protective garments
have closed their doors over the last couple of years or sold their assets.
Accordingly, the Company believes that the few remaining companies making
disposable/limited use protective garments, industrial work gloves, reusable
woven industrial and medical apparel and fire and heat protective clothing could
present attractive acquisition opportunities.
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There are few, if any,dominant personal protective apparel manufacturers,
and the market is witnessing significant ongoing consolidation activity, both at
the manufacturing level and at the safety distributor customer level.
PRODUCTS - GENERAL
The following table summarizes the principal products manufactured and/or
sold by the Company, organized by the respective fabric's principal markets/uses
therefore:
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PRODUCT RAW MATERIAL PROTECTION AGAINST USER INDUSTRY
o Limited Use/Disposable o TyvekTM and Contaminants, irritants, o Chemical/petrochemical
Protective Clothing TyvekQCTM laminates chemicals, fertilizers, industries
of Polyethylene, pesticides, acids, o Automotive and pharma-
MicromaxTM, asbestos, PCB(s), lead ceutical industries
SMS,Polypropylene, and other hazardous o Public utilities
PyrolonTM,and other chemicals o Government
non-woven fabrics (Terrorist Response)
o Janitorial
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o Gloves o KevlarTM yarns Cuts, lacerations, heat o Automotive, glass and
o Arm guards o SpectraTM yarns and chemical irritants metal fabrication
o KevlarTM wrapped steel industries
core yarns o Chemical plants
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o Fire fighting apparel o PBITM Fire, burns and excessive o Municipal, corporate and
o NomexTM heat volunteer fire departments
o MilleniaTM o Wildland Fire Fighting
o BasofilTM
o Advance Indura Ultrasoft
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o Heat protective o Aluminized NomexTM Fire, burns and o Hot equipment maintenance
aluminized fire suits o Aluminized KevlarTM excessive heat personnel and industrial
fire departments
o Airport crash rescue
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o Protective woven o StaticsorbTM Carbon o Protects manufactured o Hospital and Industrial
reusable garments Thread with Polyester products from human Facilities
o Cotton Polyester blends contamination or static
o Clean room environments
electrical charge
o Cotton
o Emergency Medical
o Bacteria, viruses and
o Polyester Ambulance Services
blood borne pathogens
o FR Cottons/NomexTM o Chemical and Refining
o Protection from flash
fires
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o High end Chemical o TyChem SLTM Chemical spills o Hazardous material teams
protective suits o TyChem TKTM o Chemical and nuclear
Toxic chemicals used in
o TyChem BRTM manufacturing processes industries-various uses
o Other Company patented Terrorist Threat or o Government
Co-Polymer Laminates Attacks. (Terrorist Response)
_________________________________________________________________________________________________________________
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LIMITED USE/DISPOSABLE PROTECTIVE CLOTHING
The Company manufactures a complete line of disposable/limited use
protective garments at its U.S., Mexican and Chinese assembly facilities. These
garments are offered in coveralls, lab-coats, shirts, pants, hoods, aprons,
sleeves and smocks. The Company offers these garments in a number of sizes and
styles to fit the end users' needs. Limited-use garments can also be coated or
laminated to increase splash protection against many inorganic acids, bases, and
other liquid chemicals. Limited use garments are made from several non-woven
fabrics including Tyvek, TyvekQC, TyChem SL, TK, and BR, Pyrolon FR, (all DuPont
fabrics) and Company fabrics such as Pyrolon Plus 2 and XT, Micromax and
Safegard76, Zonegard, Body Guard, RyTex and TomTex which are made of
polypropylene and polyethylene materials, laminates, films, and derivatives.
The Company incorporates many seaming techniques depending on the level of
hold-out needed in the end use application. Seam types utilized include standard
serge seam, bound seam, and heat sealed seam.
Disposable/limited use industrial garments are used in a wide variety of
industries and applications. Typical industry users are chemical plants, petro
chemical refineries and related installations, automotive manufacturers,
pharmaceutical companies, construction companies, coal and oil power generation
utilities and telephone utility companies. There are many smaller industries
that use these garments for specific safety applications unique to their
situation.
The Company's limited use garments range in price from $.06 for
disposable/limited use shoe covers to approximately $14.00 for TyChem SL
laminated hood and booted coverall. The Company's largest selling item, a
standard white limited-use Tyvek coverall, costs the end user approximately
$2.75 to $3.75 per garment. By comparison, similar re-usable cloth coveralls
range in price from $20.00 to $60.00, exclusive of significant laundering,
maintenance and shrinkage expenses.
The Company cuts, warehouses and sells its disposable/limited use garments
primarily at its Decatur, Alabama and China facilities. The fabric is cut into
required patterns at its USA plant which is ISO 9001 certified or its Chinese
Plants which are presently or will be ISO 9002 certified. The cut fabric and any
necessary accessories, such as zippers or elastic, are then incorporated by the
Company's wholly owned assembly facilities or independent sewing contractors.
The Company's assembly facilities in China or Mexico and independent contractors
sew and package the finished garments at their own facilities and return them
primarily to the Company's USA plants, normally within one to eight weeks for
immediate shipment to the customer.
The Company presently utilizes over 11 independent sewing contractors
under agreements that are terminable at will by either party. These contractors
employ approximately 140 people full-time (both domestically and
internationally) and operate and maintain their own industrial sewing machines.
The Company believes that it is the only customer of the majority of its
independent sewing contractors and considers its relations with such contractors
to be excellent. In the fiscal year ended January 31, 2003, no independent
sewing contractors accounted for more than 5% of the Company's sales of
disposable/limited use garments. The Company believes that it can obtain
adequate alternative production capacity should any of its independent
contractors become unavailable. The Company believes that its manufacturing
system permits it considerable flexibility. Furthermore, by employing additional
sewing contractors, the Company can increase production without substantial
additional capital expenditures.
Management believes that by its use of its facilities complemented by the
use of independent sewing contractors, the Company is capable of reducing by 10%
or alternately increasing by 20% its production capacity without incurring large
on-going costs typical of many manufacturing operations. This allows the Company
to react quickly to changing unit demand for its products.
GLOVES AND ARM GUARDS
The Company manufacturers and sells specially designed gloves and sleeves
made from Kevlar. The Company is one of six companies licensed in North America
to sell 100% Kevlar gloves. Kevlar is a cut and heat resistant, high-strength
lightweight, flexible and durable material produced by Dupont. Kevlar, on an
equivalent weight basis, is five times stronger than steel and has increasingly
been used in manufacturing such diverse products as airplane fuselage components
and bullet-resistant vests.
Gloves made of Kevlar offer a better overall level of protection, lower
the injury rate and are more cost effective than work gloves made from such
traditional material as leather, canvas and coated gloves. Kevlar gloves can
withstand
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temperatures of up to 400 degrees Fahrenheit and are sufficiently cut-resistant
to allow workers to safely handle sharp or jagged unfinished sheet metal. Kevlar
gloves are used primarily in the automotive, glass and metal fabrication
industries.
The Company is devoting an increasing portion of its manufacturing
capacity to the production of Kevlar , Spectra and Company patented yarns to
make gloves, which carry a higher profit margin than commodity gloves. Spectra
is a cut resistant fiber made by Honeywell. In order to maintain a full line of
gloves, however, the Company intends to continue to produce some commodity
gloves as necessary to meet customer demand for its glove products. The Company
believes that there are adequate and reliable foreign manufacturers available to
meet the Company's import requirements of commodity gloves, if needed.
The Company's Kevlar and Spectra gloves range in price from $37.00 to
$240.00 for a dozen pair.
The Company manufactures gloves at its Decatur, Alabama facility.
Computerized robotic knitters are used to weave gloves from both natural and
synthetic materials, including Kevlar and Spectra on an automatic basis. These
robotic knitters are generally in operation 20 hours a day, 5-1/2 days a week.
The Company's robotic knitters allow flexibility in production as they can
be easily reprogrammed in minutes to produce gloves and sleeves in different
sizes, styles, weights, weaves or combinations of materials. Additionally, these
robotic knitters can produce gloves and sleeves separately or as a one-piece
garment. Gloves and sleeves can also be knitted in different weights and
combinations of yarns, such as Kevlar mixed with cotton or polyester.
The Company has applied for patents that allow its manufacturing process
to build in additional hand protection in the areas of a glove where it is
needed in various applications. Until now the same level of yarn protection was
uniform in the entire glove. For example, the top or back of a glove does not
usually need the same thickness as the palm or thumb of a glove. Consequently,
these patents will allow the company to produce its gloves more economically.
HEAT PROTECTIVE AND FIRE FIGHTING APPAREL
The Company's products protect individuals that must work in high heat
environments and the Company has been the creator, innovator and inventor of
protective systems for high heat or hazardous occupations for the last 14 years.
The brand name FYREPEL is recognized nationally and internationally. The Company
has completed an intensive redesign and engineering study to address the
ergonomic needs of stressful occupations. The Company's protective aluminized
fire suits include:
FIRE ENTRY SUIT - for total flame entry for industries dealing with
volatile and highly flammable products.
KILN ENTRY SUIT - to protect kiln maintenance workers from extreme heat.
PROXIMITY SUITS - designed for performance in high heat areas to give
protection where exposure to hot liquids, steam or hot
vapors is possible.
APPROACH SUITS - for personnel engaged in maintenance, repair and
operational tasks where temperatures do not exceed
200F degrees ambient, with a radiant heat exposure up
to 2,000F degrees.
The Company also manufactures fire fighters protective apparel for
domestic and foreign fire departments and developed the popular Sterling Heights
style (short coat and bib pants) bunker gear. Crash Rescue has been a major
market for this product division, which was the first to produce and supply
military and civilian markets with protection worn at airports, petrochemical
plants and in the marine industry. Each of the fire suits range in cost to the
end user from $450 for standard fire department turn-out gear to $2,000 for the
fire entry suit. All the manufacturing is done at the Company's facility in St.
Joseph, Missouri.
PROTECTIVE WOVEN REUSABLE GARMENTS
The Company also manufactures and markets a line of reusable and washable
woven cloth protective apparel which supplements both the firefighting apparel
and the disposable / limited use garments, giving the Company access to the much
larger woven industrial and health care related markets. Cloth reusable garments
are more appropriate in certain situations or applications because of worker
familiarity with and acceptance of these fabrics and woven cloth's
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heavier weight, durability and longevity. These products give the Company the
flexibility to supply and satisfy a wider range of safety and customer needs.
The Company designs and manufactures:
o special anti-static apparel, primarily for the automotive industry
(perceived as a premium-priced product)
o clean room apparel as used in the most sophisticated semiconductor manu-
facturing facilities, as well as pharmaceutical/manufacturing
o hospital garments for protection against blood borne pathogens
o jackets and bib overalls for use by emergency medical rescue teams
o flame resistant coveralls/pants/jackets for chemical and petroleum
plants and wild land firefighting
The Company's reusable wovens range in price from $10 to $100 per garment.
The Company manufactures and sells woven cloth garments at its facility in
St. Joseph, Missouri. After the Company receives fabrics from suppliers,
principally blends of polyester and cotton, the Company cuts and sews the
fabrics at its own facilities to meet customer purchase orders.
HIGH-END CHEMICAL PROTECTIVE SUITS
The Company manufactures heavy duty fully encapsulated chemical suits made
from Dupont TyChem TK and TyChem BR fabrics. These suits are worn to protect the
user from exposure to hazardous chemicals. Hazardous material teams or
individuals use chemical suits for toxic cleanups, chemical spills, or in
industrial, chemical and electronic plants. The Company's line of chemical suits
range in cost from $24 per coverall to $1,926. The chemical suits can be used in
conjunction with a fire protective shell manufactured by the Company which will
protect the user from both chemical and flash fire hazards. The Company has also
introduced two National Fire Protection Agency ("NFPA") approved garments for
varying levels of protection required depending on field conditions:
TYCHEM TK - is a co-polymer film laminated to a durable spunbonded
substrate. It offers the broadest temperature range for limited use garments
- -25F degrees to 225F degrees. TyChem TK meets all OSHA Level A requirements. It
is available in NFPA 1991-94 certified versions when worn with an aluminized
over cover.
TYCHEM BR - meets all OSHA Level B and all NFPA 1993 fabric requirements
and offers excellent splash protection against a wide array of chemicals.
The Company manufactures chemical protective clothing at its facilities in
Decatur, AL, St. Joseph, MO and Mexico. After the Company obtains fabrics such
as TyChem TK and TyChem BR, it designs, cuts, glues and/or sews the materials to
meet customer purchase orders.
Due to Homeland Security Measures and governmental funding of Personal
Protective Equipment for "first responders" to terrorist threats or attack, the
Company believes demand for these suits which can protect against chemical,
nuclear, and biological hazard will increase substantially over the next two
years.
In 2002, the federal government through the Federal Emergency Management
Agency (FEMA) has allocated $360 Million to fire departments in the United
States and its territories (the "Fire Act") to purchase among other things
"Personal Protective Equipment" which include two of the Company's product lines
"Heat Protective and Fire Fighting Apparel" and "High-end Chemical Protective
Suits". Such monies were not actually dispersed until January 2003. For 2003
appropriations under the Fire Act are expected to be $360 to $400 million while
it is believed that the "Bio Terrorism Preparedness and Response Act of 2002"
includes an additional $337 Million for Bio-Defense Equipment and another $770
Million to purchase equipment for "first responders" such as fire, police,
medical and military personnel. Such purchases of equipment will include
Personal Protective Equipment made by the Company. These "Bio Terrorism" monies
are expected to be disbursed in late 2004 and 2005.
QUALITY CONTROL
To assure quality, Company employees monitor the sewing of
disposable/limited use garments at its own Mexican and Chinese facilities and at
the facilities of independent sewing contractors and also inspect the garment
upon delivery to the Company's facilities. Finished product that is below
standard is returned to the contractor for reworking. The Company has been
required on a few occasions to return product to its independent sewing
contractors. The Company conducts quality control inspections of its industrial
gloves, cloth, fire and chemical garments
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throughout the manufacturing process. The Company's Alabama, Missouri, Mexico
and China manufacturing facilities are ISO 9001 or 9002 certified. ISO standards
are internationally recognized quality manufacturing standards established by
the International Organization for Standardization based in Geneva, Switzerland.
To obtain its ISO registration, the Company's factories were independently
audited to ensure compliance with the applicable standards, and to maintain
registration, the factories receive regular announced inspections by an
independent certification organization. The Company believes that the ISO 9001
and 9002 registration makes it more competitive in the marketplace, as customers
are increasingly recognizing the standard as an indication of product quality.
MARKETING AND SALES
The Company's products are sold primarily by over 500 safety and mill
supply distributors including four of the five leading North American
distributors. Sales of the Company's products are solicited by (16) agencies
engaging 44 independent sales representatives. The Company also employs an
in-house sales force of nine (9) people.
These independent representatives call on over 500 safety and industrial
distributors nationwide and promote and sell the Company's products to safety
and industrial distributors and provide product information. The distributors
buy the Company's products and maintain inventory at the local level in order to
assure quick response time and the ability to service accounts properly. The
independent representatives maintain regular interaction with end users and
decision makers at the distribution level, thereby providing the Company with
valuable feedback on market perception of the Company's products, as well as new
developments within the industry. During the year ended January 31, 2003, no one
distributor accounted for more than 5% of sales.
The Company's marketing plan is to maximize the efficiency of its
established distribution network by direct promotion at the end-user level.
Advertising is primarily through trade publications. Promotional activities
include sales catalogs, mailings to end users and a nationwide publicity program
and an Internet Web Page. See the Company's website at www.Lakeland.com. The
Company exhibits at both regional and national trade shows and was represented
at the National Safety Congress in (Fall of 2002) and at the American Industrial
Hygienists Convention (Spring of 2002).
RESEARCH AND DEVELOPMENT
The Company has a history of new product development and innovation and
has introduced the Grapolator and Kut Buster glove and sleeve lines which
combine a stainless steel wire core combined with high strength man made fibers
providing the ultimate in cut protection without sacrificing dexterity, and
additionally the patented Thermbar Mock Twist which provides heat protection for
temperatures up to 600F degrees. The Company has 14 patents on various fabrics,
patterns, and production machinery. The Company plans to continue to be an
innovator in protective apparel fabrics, manufacturing equipment, and intends to
introduce new products to the market place in the future. Specifically, the
Company plans to continue to expand its new specially knit and coated gloves,
woven gowns for industrial and medical uses, and new fire retardant cotton
fabrics. It will also continue to dedicate resources to research and development
of protective non-woven fabrics.
SUPPLIERS AND MATERIALS
The Company does not have long-term, formal agreements with unaffiliated
suppliers of non-woven fabric raw materials used by the Company in the
production of its product lines. Tyvek and Kevlar, however, are purchased from
Dupont under trademark licensing agreements. Polypropylene, Polyethylene,
Polyvinyl Chloride, Spunlaced Polyester and their derivatives are available from
thirty or more major mills, while flame retardant fabrics are also available
from a number of both domestic and international mills.
The accessories used in the production of the Company's disposable
garments such as thread, boxes, snaps and elastics are obtained from
unaffiliated suppliers. The Company has not experienced difficulty in obtaining
its requirements for these commodity component items. The Company also has not
experienced difficulty in obtaining materials, including cotton, polyester and
nylon, used in the production of reusable non-wovens and commodity gloves.
Kevlar, used in the production of the Company's specialty safety gloves, is
obtained from independent mills that purchase the fiber from Dupont. For the
last 20 years the Company has not experienced difficulty in obtaining its
requirements for its raw materials, fabrics or components on any of the above
described products. The Company obtains the Spectra yarn used in its Dextra
Guard gloves from Honeywell. The Company believes that Honeywell will be able to
meet the Company's needs for Spectra.
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In manufacturing its fire and heat protective suits, the Company uses
glass fabric, aluminized glass, Nomex, aluminized Nomex, Kevlar, aluminized
Kevlar, polybenzimidazole (PBI) and Gortex, as well as combinations utilizing
neoprene coatings. The chemical protective suits are made of Viton, butyl
rubber, PVC (available from multiple sources), proprietary and Company patented
laminates and Teflon, Tyvek QC, TyChemTK and TyChem BR from Dupont. The Company
has not experienced difficulty obtaining any of the aforementioned materials.
COMPETITION
The Company's business is in a highly competitive industry. The Company
believes that the barriers to entry in each of the fields in which it operates
are relatively low, except in Tyvek disposable limited use clothing and TyChem
High-end Chemical Protective Suits, because of the limited number of licensees
that DuPont sells these fabrics to. The Company faces competition in some of its
other product markets from large established companies that have greater
financial, managerial, sales and technical resources than the Company. Where
larger competitors offer products that are directly competitive with the
Company's products, particularly as part of an established line of products,
there can be no assurance that the Company can successfully compete for sales
and customers. Larger competitors also may be able to benefit from economies of
scale and technological innovation and may introduce new products that compete
with the Company's products.
SEASONALITY
The Company's quarterly operating results have varied and are expected to
continue to vary in the future. These fluctuations may be caused by many
factors, including seasonal buying patterns, demand for the Company's products,
competitive pricing and services, the size and timing of individual sales, the
lengthening of the Company's sales and production cycle, competitive pricing
pressures, customer order deferrals in anticipation of new products, or
government grants, changes in the mix of products and services sold, the timing
of introductions and enhancements of products by the Company or its competitors,
market acceptance of new products, technological changes in fabrics or
production equipment used to make the Company's products, changes in the
Company's operating expenses, changes in the mix of domestic and international
revenues, the Company's ability to complete fixed price government or private
long-term contracts within a budget, personnel changes, expansion of
international operations, changes in the Company's strategies, and general
industry and economic conditions. The Company's business has experienced, and is
expected to continue to experience, seasonal fluctuations due in large part to
the cyclical nature of certain industrial customers' businesses, and
governmental budget cycles.
PATENTS AND TRADEMARKS
At this time, there are no patents or trademarks which are significant to
the Company's operations; however, the Company has one exclusive ten year
licensing arrangement covering seven patents in the Company's name, seven
Company developed patents, three additional patents in the application and
approval process with the U.S. Patent and Trademark office, and has one
non-exclusive agreement with Dupont regarding patented materials used in the
manufacture of chemical suits, and one patent with Lavian Corporation providing
for exclusive rights to the North American markets and semi-exclusive rights to
other international markets subject to royalty payments based on yards sold and
annual dollar minimums.
As used here: Micromax(R), Safegard "76"(R) , Zone Gard (R), Body Gard
(TM), Pyrolon (R), RyTex (R), TomTex (R), Thermbar (TM), Grapolator Mock Twist
(TM), Despro(R), DextraGard (TM), Forcefield(TM) ,Kut Buster(TM), Interceptor
(TM), Checkmate (TM), Heatex (TM), Sterling Heights (TM), Fyrepel (TM), Highland
(TM), Chemland (TM) and Uniland (TM) are trademarks of Lakeland Industries, Inc.
Tyvek (R), Viton (R), Barricade (R), Nomex (R), Kevlar (R), Delrin (R),
TyChem(R) SL, TK and BR and Teflon (R) are registered trademarks of E.I.DuPont
de Nemours and Company. Saranex (R) is a registered trademark of Dow Chemical.
Spectra (R) is a registered trademark of Honeywell. Indura(R) is a registered
trademark of Westex,Inc. Basofil(R) is a registered trademark of BASF.
Millenia(R) is a registered trademark of Southern Mills.
A-9
EMPLOYEES
As of April 11, 2003, the Company had approximately 1,271 full-time
employees ( 77.7% or 988 of whom were international and 22.3% or 283 of whom
were domestic). The Company has experienced a low turnover rate among its
employees. The Company believes its employee relations to be excellent.
ITEM 2. PROPERTIES
________________________________________________________________________________
The Company leases three domestic manufacturing facilities, four foreign
manufacturing facilities, one each Canadian and United Kingdom warehouse
facility and a corporate office headquarters. The Company's 141,288 approximate
square foot manufacturing facilities in Decatur, Alabama, are used primarily in
the production and storage of disposable / limited use garments. The Alabama
facilities are leased entirely by the Company from partnerships consisting
primarily of Directors, certain officers and certain stockholders of the
Company, pursuant to two lease agreements expiring on May 31, 2004 and August
31, 2004.
Early in 1999, the Company entered into a one year (renewable for four
additional one year terms) lease agreement with an officer of the Company, for
2400 sq. ft. customer service office. This is located next to the existing
Decatur, Alabama facility mentioned above.
The Company leases 44,000 square feet of manufacturing space in St.
Joseph, Missouri, from a third party, which is used in the manufacturing of
chemical suits, woven cloth garments and other cloth products. This lease
expires on July 31, 2004.
The Company's Mexican subsidiary leases one 14,057 sq. ft. manufacturing
facility on a two year lease dated August 1, 2002, expiring August 1, 2004, at
an annual rent of $59,400. The employee manager of the Mexican subsidiary is the
landlord. The Company also utilizes a 46,000 square foot manufacturing facility
in China. There is a real estate appreciation rights and rent sharing agreement
with a consortium of American and Chinese individuals (which include the Company
itself, and certain officers, employees and the directors of the Company). This
agreement provided that in consideration of the Consortium's financing the
construction of the building and leasing of the real property in 1997, that
Weifang Lakeland Safety Products Co., Ltd. pay the Consortium $49,000 a year
starting in October 2002, or sooner, when all bank debt on the property is paid
off, and to release to the Consortium the proceeds of any sale of the building
and real property leases. The Company has a 28% interest in this Consortium. In
August 2002 this facility was appraised by an independent Chinese government
agency for $416,000 and was sold by the Consortium for $406,000 to the Company's
Chinese subsidiary Weifang Lakeland Safety Products Co., Ltd. on installment
basis with payments of $222,645 in December 2002, $89,000 in January 2003 with
the remainder of $94,355 to be paid by June 2003. A second auxiliary facility to
this main facility was rented on a annual basis starting April 10, 2001 at a
monthly rent of $1,109 for 16,000 square feet.
The Company leases a 8,250 square foot warehouse in Canada from a third
party under a lease expiring on November 30, 2007.
The Company leases 4,362 square feet of office space in Ronkonkoma, New
York, from a third party, in which its corporate, executive and sales offices
are located. This lease expires on June 30, 2004.
The Company's Chinese subsidiary Qing Dao MayTung Healthcare Products, Co.
Ltd. recently completed construction of and owns an 90,415 square foot facility
on a 313,600 square foot plot of land leased from the Chinese government for 50
years in Jiazhou City, China.
For the years ended January 31, 2003, 2002 and 2001, the Company paid
total rent on property and all leased equipment of approximately $852,000,
$858,000 and $891,000, respectively. The Company believes that these facilities
are adequate for its present operations.
A-10
ITEM 3. LEGAL PROCEEDINGS
________________________________________________________________________________
The Company and its subsidiaries are involved as plaintiffs in certain
receivable collection actions and claims arising in the ordinary course of
business, none of which individually or in the aggregate are of a material
nature. The Company is involved as a defendant in one product liability suit and
as a defendant and plaintiff in both the U.S. and China (involving two former
employees) none of which individually or in aggregate are of a material nature.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
________________________________________________________________________________
During the fourth quarter of the fiscal year covered by this report, no
matter was submitted to a vote of security holders of the Company.]
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
________________________________________________________________________________
Reference is made to Page 6 ("Market for the Registrant's Common Stock and
Related Stockholder Matters") of the Registrant's 2003 Annual Report to
Shareholders filed as Exhibit 13 hereto and incorporated herein by reference.
(See Part IV, Item 15(c) Exhibits.)
ITEM 6. SELECTED FINANCIAL DATA
________________________________________________________________________________
Reference is made to Page 1 ("Selected Financial Data") of the
Registrant's 2003 Annual Report to Shareholders filed as Exhibit 13 hereto and
incorporated herein by reference. (See Part IV, Item 15(c) Exhibits.)
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
________________________________________________________________________________
Reference is made to Page 2 ("Management's Discussion and Analysis of
Financial Condition and Results of Operations") of the Registrant's 2003 Annual
Report to Shareholders filed as Exhibit 13 hereto and incorporated herein by
reference. (See Part IV, Item 15(c) Exhibits.)
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
________________________________________________________________________________
Reference is made to Page 5 ("Quantitative and Qualitative Disclosures
about Market Risk") of the Registrant's 2003 Annual Report to Shareholders filed
as Exhibit 13 hereto and incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
________________________________________________________________________________
The following Consolidated Financial Statements are incorporated herein by
reference to Pages 7 to 26 of the Registrant's Annual Report to
Shareholders for the year ended January 31, 2003:
Report of Independent Accountants
Report of Independent Accountants
Consolidated Balance Sheets - January 31, 2003 and 2002
Consolidated Statements of Income for the years ended January 31, 2003,
2002 and 2001
Consolidated Statement of Stockholders' Equity for the years ended
January 31, 2003, 2002 and 2001
Consolidated Statements of Cash Flows for the years ended January 31,
2003, 2002 and 2001
Notes to Consolidated Financial Statements
A-11
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
________________________________________________________________________________
On October 15, 2002, the Registrant's Board of Directors dismissed Grant
Thornton, LLP as its independent accountants for its fiscal year ending January
31, 2003.
Grant Thornton, LLP's report, as previously issued, on the Registrant's
consolidated financial statements for either of the past two years did not
contain any adverse opinion or disclaimers of opinion, nor was it qualified or
modified as to uncertainty, audit scope or accounting principles.
The decision to change accountants was recommended and approved by the
Registrant's Audit Committee.
During the two most recent fiscal years and the subsequent interim periods
through the date or termination (October 15, 2002), there were no disagreements
with Grant Thornton, LLP, the Registrant's former independent accountants, on
any matter of accounting principles or practice, financial statement disclosure,
or auditing scope or procedures, which disagreements if not resolved to the
satisfaction of Grant Thornton, LLP would have caused it to make reference in
connectioin with its report to the subject matter of the disagreements.
During the two most recent fiscal years and the subsequent interim periods
through October 15, 2002, there have been no reportable events.
On October 29, 2002, the Registrant's Board of Directors engaged
PricewaterhouseCoopers LLP as its independent accountants for its fiscal year
ending January 31, 2003. During the two most recent fiscal years and the
subsequent interim periods through October 15, 2002, the Registrant has not
consulted with PricewaterhouseCoopers LLP regarding any matters referenced under
items 304(a)(2) of Regulation S-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
________________________________________________________________________________
See the information under the caption "Election of Directors" in the
Company's Proxy Statement relating to the 2003 Annual Meeting of Stockholders
("Proxy Statement"), which information is included in Exhibit 20 hereto and
incorporated herein by reference. (See Part IV, Item 15(c) Exhibits.) The
Company furnished to the SEC a definitive Proxy Statement within 120 days after
the close of the fiscal year ended January 31, 2003. Certain information
required by this item is incorporated herein by reference to the Proxy
Statement. Also see "Executive Officers of the Registrant" in Part 1 of this
Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
________________________________________________________________________________
See information under the caption "Compensation of Executive Officers" in
the Company's Proxy Statement, which information is included in Exhibit 20
hereto and incorporated herein by reference. (See Part IV, Item 15(c) Exhibits.)
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
________________________________________________________________________________
See the information under the caption "Voting Securities and Stock
Ownership of Officers, Directors and Principal Stockholders" in the Company's
Proxy Statement, which information is included in Exhibit 20 hereto and
incorporated herein by reference. (See Part IV, Item 15(c) Exhibits.)
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
________________________________________________________________________________
See the information under the caption "Certain Relationships and Related
Transactions" in the Company's Proxy Statement, which information is
incorporated herein by reference. (See Part IV, Item 15(c) Exhibits.)
A-12
ITEM 14. CONTROLS AND PROCEDURES
________________________________________________________________________________
(a) The Company's chief executive officer and principal accounting officer
have evaluated the effectiveness of our disclosure controls and procedures
(as defined in Rules 13a-14(c) and 15d-14(c) under the Exchange Act), as
of a date within 90 days of the filing date of this Annual Report on Form
10-K. Based on such evaluation, they have concluded that as of such date,
our disclosure controls and procedures are effective and designed to
ensure that information required to be disclosed by us in reports that we
file or submit under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in applicable SEC rules and
forms.
(b) There were no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to the
date of evaluation by our chief executive officer and principal accounting
officer.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8 - K
________________________________________________________________________________
(A) INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE:
1. FINANCIAL STATEMENTS:
The following Consolidated Financial Statements of the Registrant are
incorporated herein by reference to the Registrant's Annual Report to
Shareholders for the year ended January 31, 2003, as noted in Item 8 hereof:
Report of Independent Accountants
Report of Independent Accountants
Consolidated Balance Sheets - January 31, 2003 and 2002
Consolidated Statements of Income for the years ended January 31, 2003,
2002 and 2001
Consolidated Statement of Stockholders' Equity for the years ended
January 31, 2003, 2002 and 2001
Consolidated Statements of Cash Flows for the years ended January 31,
2003, 2002 and 2001
Notes to Consolidated Financial Statements
2. FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statement schedule is included in
Part IV of this report:
Schedule II - Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable, or not
required, or because the required information is included in the consolidated
financial statements or notes thereto.
(B) REPORTS ON FORM 8 - K.
No report on Form 8 - K has been filed for the quarter ended January 31,
2003.
(C) EXHIBITS:
3 (a) Restated Certificate of Incorporation*
3 (b) By-Laws, as amended*
10 (a) Lease agreements between POMS Holding Co., as lessor, and the
Company, as lessee, dated September 1,1999
10 (b) Lease agreement between Southwest Parkway, Inc., as lessor, and the
Company, as lessee, dated August 1,2001.
10 (c) The Company's Stock Option Plan*
10 (d) Asset Purchase Agreement, dated as of December 26, 1986, by and
among the Company, Fireland, Fyrepel Products, Inc. and John H.
Weaver, James R. Gauerke and Vernon W. Lenz**
10 (e) Asset Purchase Agreement, dated as of December 26, 1986, by and
among the Company, Chemland, Siena Industries, Inc. and John H.
Weaver, James R. Gauerke, Eugene R. Weir, John E. Oberfield and
Frank Randles**
A-13
10 (f) Asset Purchase Agreement, dated September 30, 1987 by and among the
Company and Walter H. Mayer & Co. (Incorporated by reference to the
report on Form 8 - K filed by the Company on October 14, 1987.)
10 (g) Employment agreement between the Company and Raymond J. Smith,
dated December 1, 2002, as revised March 2003.
10 (h) Employment agreement between the Company and Harvey Pride, Jr.,
dated December 1, 2002.
10 (i) Lease between Lakeland Industries, Inc. and JBJ Realty, dated April
16, 1999.
10 (j) Asset Purchase Agreement, dated November 19, 1990 by and
among the Company, Mayer and WHM Acquisition Corp. (Incorporated by
reference to the report on Form 10 - Q for the quarter ended
October 31, 1990, filed by the Company on December 14, 1990).
10 (k) Employment agreement between the Company and Christopher J. Ryan,
dated November 29, 2002.
10 (l) Loan agreement dated March 9, 2001 between the Company and Merrill
Lynch.
10 (m) Consulting and License Agreements between the Company and W. Novis
Smith dated December 10, 1991.
10 (n) Agreement dated June 17, 1993 between the Company and Madison
Manpower and Mobile Storage, Inc.
10 (o) Lease Agreement between River Group Holding Co., LLP, as lessor,
and the Company, as lessee, dated June 1, 1999.
10(p) Lease Agreement between Harvey Pride, Jr., as lessor, and the
Company, as lessee, dated March 1, 1999.
10(q) Term loan and security agreement between the Company and Merrill
Lynch, dated November 1, 1999.
10 (r) Employment Agreement between the Company and James M. McCormick
dated December 1, 2002.
11 Consents of Grant Thornton LLP and PricewaterhouseCoopers LLP dated
April 28, 2003 and April 21, 2003, respectively***
13 Annual Report to Shareholders for the year ended January 31, 2003
20 Proxy Statement of the Registrant for Annual Meeting of Stock-
holders - June 18, 2003
22 Subsidiaries of the Company (wholly-owned):
LAKELAND PROTECTIVE WEAR, INC.
LAKELAND DE MEXICO S.A. DE C.V.
LAIDLAW, ADAMS & PECK, INC. AND SUBSIDIARY
(MEIYANG PROTECTIVE PRODUCTS CO., LTD.)
WEIFANG LAKELAND SAFETY PRODUCTS CO. LTD.
QING DAO MAYTUNG HEALTHCARE CO., LTD.
LAKELAND INDUSTRIES EUROPE LTD.
All other exhibits are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
__________________
* Incorporated by reference to Registration Statement on Form S - 18 on file
with the Securities and Exchange Commission No.33-7512-NY.
** Incorporated by reference to report on Form 8 - K filed by the Company on
January 9, 1987.
*** Incorporated by reference to Registration Statement on Form S-8 on file with
the Securities & Exchange Commission No. 33-92564 - NY.
The Exhibits listed above (with the exception of the Annual Report to
Shareholders) have been filed separately with the Securities and Exchange
Commission in conjunction with this Annual Report on Form 10-K. On request,
Lakeland Industries, Inc. will furnish to each of its shareholders a copy of any
such Exhibit for a fee equal to Lakeland's cost in furnishing such Exhibit.
Requests should be addressed to the Office of the Secretary, Lakeland
Industries, Inc., 711-2 Koehler Avenue, Ronkonkoma, New York 11779.
A-14
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.
Dated: April 30, 2003
LAKELAND INDUSTRIES, INC.
By:
/s/ RAYMOND J. SMITH
_____________________
Raymond J. Smith,
CHAIRMAN OF THE BOARD
AND PRESIDENT
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT
HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND
IN THE CAPACITIES AND ON THE DATES INDICATED:
NAME TITLE DATE
/s/ RAYMOND J. SMITH
_______________________
Raymond J. Smith Chairman of the Board, April 30, 2003
President and Director
(Principal Executive Officer)
/s/ CHRISTOPHER J. RYAN
_______________________
Christopher J. Ryan Executive V. P.- General Counsel, April 30, 2003
Secretary and Director
/s/ JAMES M. MCCORMICK
_______________________
James M. McCormick Vice President and Treasurer April 30, 2003
(Principal Financial and
Accounting Officer)
/s/ ERIC O. HALLMAN
_______________________
Eric O. Hallman Director April 30, 2003
/s/ JOHN J. COLLINS, JR.
_______________________
John J. Collins, Jr. Director April 30, 2003
/s/ WALTER J. RALEIGH
_______________________
Walter J. Raleigh Director April 30, 2003
A-15
LAKELAND INDUSTRIES, INC.
AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Column A Column B Column C Column D Column E
___________________________ __________ ____________________________ __________ __________
Additions
Balance at Charge to Charged to Balance at
beginning costs and other end of
of period expenses accounts Deductions period
__________ _________ __________ __________ __________
Year ended January 31, 2003
Allowance for doubtful
account (a) $221,000 $369,717 247,717 (b) $343,000
Year ended January 31, 2002
Allowance for doubtful
account (a) $221,000 $ 83,965 83,965 (b) $221,000
Year ended January 31, 2001
Allowance for doubtful
account (a) $200,000 $ 30,176 9,176 (b) $221,000
<FN>
__________________
(a) Deducted from accounts receivable.
(b) Uncollectible accounts receivable charged against allowance.
</FN>
A-16
CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 AND SECURITIES AND
EXCHANGE COMMISSION RELEASE 34-46427
I, Raymond J. Smith, the president and chief executive officer of Lakeland
Industries, Inc., certify that:
1. I have reviewed this annual report on Form 10-K of Lakeland Industries, Inc.
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made not misleading with respect to the period covered by the report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report fairly present in all material
respects the financial condition, result of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities
particularly during the period in which this annuual report is being
prepared;
b. evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior filing date of this annual
report (the "Evaluation Date"); and
c. presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrar's ability to record
process, summarize and report financial data and have identified for the
registrant's auditors and material weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: April 30,2003
/s/ RAYMOND J. SMITH
_____________________________________
Raymond J. Smith
President and Chief Executive Officer
CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 AND SECURITIES AND
EXCHANGE COMMISSION RELEASE 34-46427
I, James M. McCormick, the principal accounting officer of Lakeland Industries,
Inc., certify that:
1. I have reviewed this annual report on Form 10-K of Lakeland Industries, Inc.
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made not misleading with respect to the period covered by
the report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report fairly present in all material
respects the financial condition, result of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities
particularly during the period in which this annual report is being
prepared;
b. evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior filing date of this annual
report (the "Evaluation Date"); and
c. presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrar's ability to record
process, summarize and report financial data and have identified for the
registrant's auditors and material weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: April 30,2003
/s/ JAMES M. MCCORMICK
__________________________________
James M. McCormick Vice President,
Treasurer and Principal Accounting
Officer
CERTIFICATION OF EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
AND SECURITIES AND EXCHANGE COMMISSION RELEASE 34-46427
I, Christopher J. Ryan, Executive Vice President, Secretary and General
Counsel of Lakeland Industries, Inc., certify that:
1. I have reviewed this annual report on Form 10-K of Lakeland Industries
Inc.
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made not misleading with respect to
the period covered by the report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report fairly present in all
material respects the financial condition, result of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities particularly during the period in which this annual report
is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior filing date of this
annual report (the "Evaluation Date"); and
c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrar's ability to record
process, summarize and report financial data and have identified for
the registrant's auditors and material weaknesses in internal controls;
and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: April 30,2003
/s/ CHRISTOPHER J. RYAN
_______________________________________
Christopher J. Ryan
Executive Vice President, Secretary and
General Counsel
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SS. 1350, AS ADOPTED PURSUANT TO
SS. 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the filing with the Securities and Exchange Commission
of the Annual Report of Lakeland Industries, Inc. (the "Company") on Form 10-K
for the year ending January 31, 2003 (the "Report"), I Raymond J. Smith, Chief
Executive Officer of the Company, certify, pursuant to 18 U.S.C.ss.1350, as
adopted pursuant toss.906 of the Sarbanes-Oxley Act of 2002, that to the best of
my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents in all
material respects, the financial condition and results of operations of
the Company.
/s/ RAYMOND J. SMITH
_______________________
Raymond J. Smith
Chief Executive Officer
April 30, 2003
CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO 18 U.S.C. SS. 1350, AS ADOPTED PURSUANT TO
SS. 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the filing with the Securities and Exchange Commission
of the Annual Report of Lakeland Industries, Inc. (the "Company") on Form 10-K
for the year ending January 31, 2003 (the "Report"), I James M. McCormick,
Principal Accounting Officer of the Company, certify, pursuant to 18
U.S.C.ss.1350, as adopted pursuant toss.906 of the Sarbanes-Oxley Act of 2002,
that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents in all
material respects, the financial condition and results of operations of
the Company.
/s/ JAMES M. MCCORMICK
____________________________
James M. McCormick
Principal Accounting Officer
April 30, 2003
CERTIFICATION OF EXECUTIVE VICE PRESIDENT,
SECRETARY AND GENERAL COUNSEL
PURSUANT TO 18 U.S.C. SS. 1350, AS ADOPTED PURSUANT TO SS. 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the filing with the Securities and Exchange Commission
of the Annual Report of Lakeland Industries, Inc. (the "Company") on Form 10-K
for the period ending January 31, 2003 (the "Report"), I Christopher J. Ryan
Executive Vice President, Secretary and General Counsel of the Company, certify,
pursuant to 18 U.S.C.ss.1350, as adopted pursuant toss.906 of the Sarbanes-Oxley
Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents in all
material respects, the financial condition and results of operations
of the Company.
/s/ CHRISTOPHER J. RYAN
___________________________________
Christopher J. Ryan
Executive Vice President, Secretary
and General Counsel
April 30, 2003