[LOGO] Lakeland
Industries, Inc.
701-7 Koehler Avenue, Suite 7 - Ronkonkoma, NY 11779
(631) 981-9700 - www.lakeland.com
FOR IMMEDIATE RELEASE
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Lakeland Industries Q2 FY 2006 Net Income Increases 44.3%
RONKONKOMA, NY - September 7, 2005 -- Lakeland Industries, Inc. (NASDAQ: LAKE),
today announced that net income increased $0.51 million, or 44.3%, to $1.65
million for the three months ended July 31, 2005 from $1.14 million for the
three months ended July 31, 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.
THREE MONTHS ENDED JULY 31, 2005
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Net sales increased $2.2 million, or 9.8%, to $25.1 million for the three months
ended July 31, 2005 from $22.8 million for the three months ended July 31, 2004.
Gross profit increased $0.93 million, or 19.2%, to $5.8 million for the three
months ended July 31, 2005 from $4.9 million for the three months ended July 31,
2004. Gross profit as a percentage of net sales increased to 23.1% for the three
months ended July 31, 2005 from 21.3% for the three months ended July 31, 2004.
Operating profit increased 17.9% to $2.2 million for the three months ended July
31, 2005 from $1.9 million for the three months ended July 31, 2004. Operating
margins increased to 8.8% for the three months ended July 31, 2005 compared to
8.2% for the three months ended July 31, 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.
SIX MONTHS ENDED JULY 31, 2005
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Net sales increased $1.1 million, or 2.2%, to $50.8 million for the six months
ended July 31, 2005 from $49.7 million for the six months ended July 31, 2004.
Gross profit increased $1.1 million, or 10.3%, to $12.0 million for the six
months ended July 31, 2005 from $10.8 million for the six months ended July 31,
2004. Gross profit as a percentage of net sales increased to 23.6% for the six
months ended July 31, 2005 from 21.8% for the six months ended July 31, 2004.
Operating profit increased 11.4% to $4.8 million for the six months ended July
31, 2005 from $4.3 million for the six months ended July 31, 2004. Operating
margins increased to 9.4% for the six months ended July 31, 2005 compared to
8.6% for the six months ended July 31, 2004.
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 international
production planning; in our non-Tyvek product lines.
During the second quarter ended July 31, 2004, the Company issued approximately
1.2 million new shares to the public that helped solidify its balance sheet, and
in April 2005 recorded a 10% stock split. These issuances of shares had a
negative impact on the Company's earnings per share, because the weighted
average shares outstanding increased 18% for the three months ended July 31,
2005, compared to the three months ended July 31, 2004. Earnings were $0.33 per
basic and diluted share for the three months ended July 31, 2005, compared to
$0.27 per basic and diluted share for the three months ended July 31, 2004,
while net income increased $0.51 million, or 44.3%, to $1.65 million for the
three months ended July 31, 2005 from $1.14 million for the three months ended
July 31, 2004. Earnings were $0.67 per basic and diluted share for the six
months ended July 31, 2005, compared to $0.65 per basic and diluted share for
the six months ended July 31, 2004, while net income increased $0.79 million, or
30.9%, to $3.4 million for the six months ended July 31, 2005 from $2.6 million
for the six months ended July 31, 2004.
On July 31, 2005, the Company's balance sheet included total assets of $66.9
million, cash and marketable securities of $7.1 million, working capital of
$51.8 million, bank debt of $1.88 million and stockholders' equity of $57.8
million or $11.53 per share of tangible book value.
Christopher Ryan, the CEO commented that, "our market share and margins in our
Tyvek business is always challenging, but most of our sales and earnings growth
have recently come from and will continue to come from our Non-Tyvek product
lines. An example of this is our recent acquisition of Mifflin Valley, Inc. We
have acquired both a new product line that runs at significantly higher margins
than our Tyvek lines, and additionally an excellent management team.
Thus, we plan to continue to acquire other product lines in the future and grow
them with our in place sales operations and our strong capital base. This is our
long range growth strategy and it does not happen in one or two quarters' time;
but rather in one or two year's time."
Lakeland will host a conference call at 4:30 PM (EST) on September 7, 2005 to
discuss the Company's second 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 6455212.
About Lakeland Industries, Inc.:
Lakeland manufactures and sells a comprehensive line of safety garments and
accessories for the industrial protective clothing market. Our products are sold
by our in-house sales force and independent sales representatives to a network
of over 800 safety and mill supply distributors. These distributors in turn
supply end user industrial customers such as chemical/petrochemical, automobile,
steel, glass, construction, smelting, janitorial, pharmaceutical and high
technology electronics manufacturers, as well as hospitals and laboratories. In
addition, we supply federal, state, and local government agencies and
departments such as fire and police departments, airport crash rescue units, the
Department of Defense, Central Intelligence Agency, Federal Bureau of
Investigation, U.S. Secret Service and the Centers for Disease Control and
Prevention. Net after tax earnings increased over the preceding year by 75.4%,
32.2%, 39.7%, and 37.9% for the fiscal years ended January 31, 2002, 2003, 2004
and 2005, respectively.
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
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Gary Pokrassa, (631) 981-9700, garyp@lakeland-ind.com
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"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 Six Months Ended
July 31, July 31,
2005 2004 2005 2004
---- ---- ---- ----
Net sales $ 25,089 $ 22,845 $ 50,798 $ 49,683
Cost of goods sold 19,293 17,983 38,836 38,842
----------- ----------- ----------- -----------
Gross profit 5,796 4,862 11,962 10,841
Operating expenses 3,590 2,990 7,210 6,577
----------- ----------- ----------- -----------
Operating profit 2,206 1,872 4,752 4,264
Interest and other income, net 66 1 89 10
Interest expense (4) (70) (4) (206)
----------- ----------- ----------- -----------
Income before minority interest 2,268 1,803 4,837 4,068
Minority interest in net income of
variable interest entities -- 175 -- 294
----------- ----------- ----------- -----------
Income before income taxes 2,268 1,628 4,837 3,774
Provision for income taxes 620 485 1,476 1,206
----------- ----------- ----------- -----------
Net income $ 1,648 $ 1,143 $ 3,361 $ 2,568
=========== =========== =========== ===========
Net income per common share*:
Basic $ 0.33 $ 0.27 $ 0.67 $ 0.65
=========== =========== =========== ===========
Diluted $ 0.33 $ 0.27 $ 0.67 $ 0.65
=========== =========== =========== ===========
Weighted average common
shares outstanding*:
Basic 5,017,046 4,251,486 5,017,046 3,926,402
=========== =========== =========== ===========
Diluted 5,021,058 4,257,869 5,021,267 3,932,276
=========== =========== =========== ===========
* 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)
July 31, January 31,
2005 2005
ASSETS
Current assets:
Cash and cash equivalents $ 7,117 $ 9,185
Accounts receivable, net 13,386 13,117
Inventories 35,983 30,906
Deferred income taxes 961 961
Other current assets 948 959
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Total current assets 58,395 55,128
Property and equipment, net 7,361 5,014
Other assets 1,222 171
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$66,933 $60,313
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,572 $ 2,710
Accrued expenses and other current liabilities 3,045 1,442
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Total current liabilities 6,617 4,152
Other long-term liabilities 520 495
Deferred income taxes 86 86
Minority interest in Variable Interest Entities -- 1,113
Amount Outstanding under revolving credit arrangement 1,882 --
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 July
31, 2005 and at January 31, 2005, respectively 50 46
Additional paid-in capital 42,431 36,273
Retained earnings 15,347 18,148
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Total stockholders' equity 57,828 54,467
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$66,933 $60,313
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