Exhibit 99.1
[LOGO]Lakeland
Industries Inc.
711-2 Koehler Avenue, Suite 2 - Ronkonkoma, NY 11779
(631) 981-9700 - www.lakeland.com
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FOR IMMEDIATE RELEASE
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Lakeland Industries Q1 FY 2006 Net Income Increases 20.2%
RONKONKOMA, NY - June 9, 2005 -- Lakeland Industries, Inc. (NASDAQ: LAKE), today
announced that net income increased $0.28 million, or 20.2%, to $1.71 million
for the three months ended April 30, 2005 from $1.43 million for the three
months ended April 30, 2004. Lakeland is a leading manufacturer of industrial
protective clothing for industry, municipalities, and healthcare and for first
responders on the federal, state and local levels.
Net sales decreased $1.1 million, or 4.2%, to $25.7 million for the three months
ended April 30, 2005 from $26.8 million for the three months ended April 30,
2004, not entirely for lack of orders, but due to supply chain problems
precluding us from fulfilling all our orders. Gross profit decreased $0.2
million, or 3.2%, to $5.8 million for the three months ended April 30, 2005 from
$6.0 million for the three months ended April 30, 2004. However, gross profit as
a percentage of net sales increased to 22.5% for the three months ended April
30, 2005 from 22.3% for the three months ended April 30, 2004.
More significantly, operating profit increased 6.4% to $2.5 million for the
three months ended April 30, 2005 from $2.4 million for the three months ended
April 30, 2004. Operating margins increased to 9.9% for the three months ended
April 30, 2005 compared to 8.9% for the three months ended April 30, 2004.
Lakeland's operating margins are at the highest levels in the Company's history,
which were 8.0%, 6.5%, 5.6% and 4.8% in fiscal 2005, 2004, 2003 and 2002,
respectively.
Despite rising raw material prices, we have been able to increase profits over
last year due to tighter controls on our SG&A expenses and moving our domestic
U.S.A. manufacturing to our Mexican and Chinese subsidiaries.
During the second quarter ended July 31, 2004, the Company issued 1,285,750 new
shares to the public that helped solidify our balance sheet, and in April 2005
recorded a 10% stock split of 456,161 additional shares. These issuances of
shares had a negative impact on the Company's earnings per share, because the
weighted average shares outstanding increased 39% for the three months ended
April 30, 2005, compared to the three months ended April 30, 2004. Earnings were
$0.34 per basic and diluted share for the three months ended April 30, 2005,
compared to $0.40 per basic and diluted share for the three months ended April
30, 2004, even though net income increased $0.28 million, or 20.2%, to $1.71
million for the three months ended April 30, 2005 from $1.43 million for the
three months ended April 30, 2004.
On April 30, 2005, the Company's balance sheet included total assets of $63.9
million, cash and marketable securities of $8.7 million, working capital of
$49.8 million, no bank debt and stockholders' equity of $56.2 million or $11.20
per share of tangible book value.
"Fiscal 2006 will be a challenging year," stated Christopher J. Ryan, President
and CEO of Lakeland Industries. "Thus, it is our current expectation that it
will be difficult to improve upon FY05 earnings on a per share basis. Firstly,
as of April 2005 Tyvek(R) garment prices have not risen as fast as raw material
prices have, however, prices for garments (as opposed to raw material prices)
appear to be headed upward by July 2005 and more so from a net point of view
than the continually increasing raw material prices. Thus, it is not absolutely
clear yet, but as we see specific garment style price increases in the market
place we suspect these will increase our gross margins starting in July 2005 and
forward from what we are currently experiencing. Secondly, as stated in prior
releases, we will be absorbing an inordinate amount of professional fees and new
accounting salaries in order to comply with the minute dictates of Sarbanes
Oxley which we expect will cost us in FY 2006 approximately $700,000 in
additional expense plus $100,000 in software and hardware capital expenditures.
Therefore, year end results will be much clearer by the end of our third quarter
ended October 31, 2005.
Mr. Ryan added, "However, we do believe fiscal 07, ending on January 31, 2007,
will be a rewarding year as garment prices should climb more than raw material
prices, Sarbanes expenses and other operational expenses should be further
reduced and new streams of accretive earnings should come on as the result of
acquisitions hopefully made this coming summer and autumn," along with and our
drive to increase international sales in Asia, Europe and South America.
Lakeland will host a conference call at 4:30 PM (EST) on June 9, 2005 to discuss
the Company's first quarter results. The call will be hosted by Christopher J.
Ryan, Lakeland's President and CEO. Investors can listen to the call by dialing
(800) 370-0898 (Domestic) or (973) 409-9260 (International). For a replay of
this call, dial 877-519-4471 (Domestic) or 973-341-3080 (International) and give
the Pass Code of 6151539.
About Lakeland Industries, Inc.:
Lakeland is among one of the leading companies designing and manufacturing
protective garments for industry, municipalities, and the burgeoning homeland
security field. Lakeland Industries' products have established and maintained
their global reputation for overall quality. Indeed, our products have long been
recognized as the field's gold standard for quality - that essential, expected
and deserved constituent of any protective wear.
For more information concerning Lakeland, please visit us at: www.lakeland.com
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Contact:
Lakeland Industries Chris Ryan, (631) 981-9700, chrisr@lakeland-ind.com
Gary Pokrassa, (631)981-9700, garyp@lakeland-ind.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Forward-looking statements involve risks, uncertainties and assumptions as
described from time to time in Press Releases and 8-K(s), registration
statements, annual reports and other periodic reports and filings filed with the
Securities and Exchange Commission or made by management. All statements, other
than statements of historical facts, which address Lakeland's expectations of
sources or uses for capital or which express the Company's expectation for the
future with respect to financial performance or operating strategies can be
identified as forward-looking statements. As a result, there can be no assurance
that Lakeland's future results will not be materially different from those
described herein as "believed," "projected", "planned", "intended",
"anticipated," "estimated" or "expected," which words reflect the current view
of the Company with respect to future events. We caution readers that these
forward-looking statements speak only as of the date hereof. The Company hereby
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any such statements to reflect any change in the
Company's expectations or any change in events conditions or circumstances on
which such statement is based
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended
April 30,
2005 2004
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Net sales $ 25,709 $ 26,838
Cost of goods sold 19,915 20,859
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Gross profit 5,794 5,979
Operating expenses 3,248 3,587
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Operating profit 2,546 2,393
Other income, net 23 9
Interest expense -- (137)
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Income before minority interest 2,569 2,265
Minority interest in net income of
variable interest entities -- 119
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Income before income taxes 2,569 2,146
Provision for income taxes 856 721
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Net income $ 1,713 $ 1,425
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Net income per common share*:
Basic $ 0.34 $ 0.40
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Diluted $ 0.34 $ 0.40
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Weighted average common
shares outstanding*:
Basic 5,017,046 3,601,318
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Diluted 5,021,476 3,606,683
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* Adjusted for the 10% stock dividend to shareholders of record on April 30,
2005 and reflects 1,280,750 shares offered to the public in June and July 2004.
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
April 30, January 31,
2005 2005
ASSETS
Current assets:
Cash and cash equivalents $ 8,680 $ 9,185
Accounts receivable, net 14,997 13,117
Inventories 31,102 30,906
Deferred income taxes 961 961
Other current assets 1,162 959
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Total current assets 56,902 55,128
Property and equipment, net 6,774 5,014
Other assets 234 171
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$63,910 $60,313
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,078 $ 2,710
Accrued expenses and other current liabilities 2,058 1,442
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Total current liabilities 7,136 4,152
Other long-term liabilities 508 495
Deferred income taxes 86 86
Minority interest in Variable Interest Entities -- 1,113
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 par; authorized
1,500,000 shares (none issued)
Common stock, $0.01 par; authorized
10,000,000 shares; issued and outstanding
5,017,046 and 4,560,885 shares at April
30, 2005 and at January 31, 2005, respectively 50 46
Additional paid-in capital 42,431 36,273
Retained earnings 13,698 18,148
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Total stockholders' equity 56,180 54,467
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$63,910 $60,313
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