Company Press Release Exhibit 99.1
Lakeland Industries Announces Earnings; Earnings Up 15.4% For The Quarter Ended
July 31, 2004.
SOURCE: Lakeland Industries, Inc.
Q2 Net Income of $1.1 Million - Up 15.4% Over Q2 '03 of $1 Million
Q2 Earnings Per Share of $0.30 for both the 2004 and 2003 periods respectively
due to the issuance of an additional 1,280,750 shares during Q2'04
Six-Month Net Income of $2.6 Million - Up 38.5% Over '03 of $1.9 Million
Six-Month Earnings Per Share (Basic and Diluted) of $0.72 - Up 26.3% Over '03 of
$0.57
RONKONKOMA, NY, September 8, 2004 - Lakeland Industries, Inc. (National NASDAQ
Symbol: (LAKE), a leading manufacturer of industrial protective clothing, today
reported record earnings for its second quarter ended July 31, 2004.
Six Months
Net sales for the six months ended July 31, 2004 increased $2,600,000 or 5.5% to
$49,700,000 from $47,100,000 as compared to the six months ended July 31, 2003.
Earnings for the six months ended July 31, 2004 exceeded earnings for the six
months ended July 31, 2003 by 38.5%. Lakeland's net income for the six months
ended July 31, 2004 increased to $2.6 million from $1.9 million for the six
months ended July 31, 2003. As for net income per basic and diluted share,
Lakeland reported $0.72 for the six months ended July 31, 2004 - up 26.3% from
$0.57 for the six months of 2003.
The Company's earnings have continued their upward trend for four consecutive
years.
Three Months
Net sales for the second quarter ended July 31, 2004 decreased 1.9% to
$22,800,000 compared with the 2003 second quarter net sales of $23,300,000. This
was due to a difficult comparison against last year's second quarter which
included approximately $1,500,000 in SARS induced buying. We believe that many
of our customers increased their inventories of Tyvek products during our second
quarter ended July 31, 2003 in response to the outbreak of SARS in Toronto,
Canada and the anticipation that it would break out in the U.S.A.
When it became apparent by August of 2003 that SARS would not break out in the
US our customers used the inventory they had built up to meet their needs, into
our third quarter ended October 31, 2003.
We further believe this to be the case as August 2004 monthly sales exceeded
August 2003 monthly sales by almost 16%. This provides evidence of a return to
more historical buying trends, rather than the spikes and valleys caused by the
2003 SARS epidemic.
Additionally, this quarter we commenced moving some of the production of our
woven and fire products made at our Missouri facility to the Company's Chinese
subsidiaries. This caused us to turn away approximately $400,000 in sales while
we began moving these specific product lines overseas. Although these product
moves may impact the sales and earnings of this smaller wovens division in the
coming quarters, it should increase the Company's earnings significantly once
completed in early 2005.
Lakeland's net income for the second quarter ended July 31, 2004 increased to
$1.14 million from $.99 million compared to the second quarter of 2003 - up
15.4%. As for net income per basic and diluted share, Lakeland reported $0.30
for this second quarter and for the second quarter ended July 31, 2003. Weighted
average shares outstanding increased 594,310 in the second quarter of 2004
reflecting the impact of the Company's June 18, 2004 offering of 1,100,000 new
shares and its July 1, 2004 additional offering of 180,750 new green shoe shares
to the public.
At July 31, 2004, the Company's balance sheet included total assets of $58.7
million, cash and marketable securities of $10.6 working capital of $48.7
million, no short-term bank debt and stockholders' equity of $52.0 million or
$11.41 per share of book value.
Lakeland continues to make progress in the transfer of its USA made glove, fire,
and woven products to its other wholly-owned subsidiaries in Mexico and China.
We believe that such relocation of our manufacturing will continue to positively
increase our margins.
Homeland Security Sales of our high end chemical suits continued their rapid
sales growth of 60% in the second quarter 2004 versus the comparable prior year
quarter. We are beginning to see and procure larger orders of our high-end
chemical suits as evidenced by a $900,000 order that was received in the second
quarter 2004. This is the largest one time order we have received in the
Homeland Security area. We expect that once federal guidelines have been
promulgated for our Homeland Security products in 2005, we will begin to see
more of these million dollar plus orders from the states.
We also are continuing our search for compatible acquisitions.
Statements contained in this press release that are not historical facts are
forward-looking statements that are made pursuant to the safe harbor provisions
of the Private Securities and Litigation Reform Act of 1995. In addition, words
such as "believes," "anticipates," "expects" and similar expressions are
intended to identify forward-looking statements. Forward-looking statements
involve risks and uncertainties, including but not limited to the timely
development and acceptance of new products, the impact of competitive products
and pricing, changing market conditions, the successful integration of
acquisitions, continued availability and favorable pricing of raw materials, and
the other risks. Actual results may differ materially from those projected. The
company disclaims, however, any intent or obligation to update these
forward-looking statements. (Financial tables follow.)
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
July 31, July 31,
2004 2003 2004 2003
---- ---- ---- ----
Net sales .................................. $ 22,845,169 $ 23,289,944 $ 49,683,192 $ 47,114,830
Cost of goods sold ......................... 17,983,098 18,596,614 38,841,689 38,325,684
------------ ------------ ------------ ------------
Gross profit ............................... 4,862,071 4,693,330 10,841,503 8,789,146
Operating expenses ......................... 2,990,264 3,209,938 6,576,984 5,833,100
------------ ------------ ------------ ------------
Operating profit ........................... 1,871,807 1,483,392 4,264,519 2,956,046
Other income, net .......................... 849 29,784 10,309 45,226
Interest expense ........................... (69,316) (143,201) (206,457) (280,997)
------------ ------------ ------------ ------------
Income before income taxes ................. 1,803,340 1,369,975 4,068,371 2,720,275
Provision for income taxes ................. 485,000 379,829 1,206,000 865,829
------------ ------------ ------------ ------------
Income before minority interest ............ 1,318,340 990,146 2,862,371 1,854,446
Minority interest in Net Income of Variable
Interest Entities ........................ 175,710 -- 294,406 --
------------ ------------ ------------ ------------
Net income ................................. $ 1,142,630 $ 990,146 $ 2,567,965 $ 1,854,446
============ ============ ============ ============
Net income per common share*:
Basic ................................. $ .30 $ .30 $ .72 $ .57
============ ============ ============ ============
Diluted ............................... $ .30 $ .30 $ .72 $ .57
============ ============ ============ ============
Weighted average common shares outstanding*:
Basic ................................. 3,864,987 3,268,867 3,569,456 3,266,431
============ ============ ============ ============
Diluted ............................... 3,870,790 3,276,480 3,574,796 3,270,976
============ ============ ============ ============
*Adjusted for the 10% stock dividend to shareholders of record on July 31, 2003.
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS July 31, January 31,
2004 2004
(Unaudited)
Current assets:
Cash and cash equivalents .......................... $ 6,106,573 $ 2,445,271
Marketable securities .............................. 4,477,578 0
Accounts receivable, net of allowance for
doubtful accounts of $323,000 at July 31, 2004 and
at January 31, 2004 .............................. 12,032,648 12,570,320
Inventories ........................................ 29,214,216 26,265,807
Deferred income taxes .............................. 790,272 790,272
Other current assets ............................... 773,663 1,213,104
----------- -----------
Total current assets ...................... 53,394,950 43,284,774
Property and equipment, net of accumulated
depreciation of $4,864,000 at July 31, 2004
and $4,511,000 January 31, 2004 .................. 5,127,214 3,921,308
Other assets ....................................... 146,555 97,745
----------- -----------
$58,668,719
$47,303,827
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................... $ 2,945,838 $ 3,461,353
Current portion of long-term liabilities ........... -- 16,784,781
Accrued expenses and other current liabilities ..... 1,703,769 1,263,044
----------- -----------
Total current liabilities ..................... 4,649,607 21,509,178
Other long-term liabilities ........................ 522,147 517,147
Deferred income taxes .............................. 250,532 250,532
Minority interest in Variable Interest Entities .... 1,228,043 --
Commitments and contingencies
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
4,560,885 and 3,273,925shares at July 31, 2004
and at January 31, 2004, respectively ......... 45,609 32,739
Additional paid-in capital ......................... 36,273,046 11,862,461
Retained earnings .................................. 15,699,735 13,131,770
----------- -----------
Total stockholders' equity .................... 52,018,390 25,026,970
----------- -----------
$58,668,719 $47,303,827
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