Exhibit 99.1
FOR IMMEDIATE RELEASE
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Lakeland Industries Q3 FY 2006 Net Income Increases 10.3%
RONKONKOMA, NY - December 12, 2005 -- Lakeland Industries, Inc. (NASDAQ: LAKE),
today announced that net income increased $0.12 million, or 10.3%, to $1.31
million for the three months ended October 31, 2005 from $1.19 million for the
three months ended October 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.
Net sales increased $.3 million, or 1.3%, to $22.7 million for the three months
ended October 31, 2005 from $22.4 million for the three months ended October 31,
2004. Sales to multiple safety and mill supply distributors in the Gulf Coast
areas of Texas, Louisiana, Mississippi and parts of Alabama were slow as
hurricanes Katrina and Rita shut their operations down totally or partially
during the months of September and into October. However, we expect these sales
to return in the fourth quarter, and to perhaps accelerate with mold remediation
and petro-chemical plant clean-ups and maintenance being performed using our
disposable and fire retardant garments which are in many situations required to
repair these types of hurricane damage.
Gross profit increased $.76 million, or 15.4%, to $5.7 million for the three
months ended October 31, 2005 from $4.9 million for the three months ended
October 31, 2004. Gross profit as a percentage of net sales increased to 25.0%
for the three months ended October 31, 2005 from 22.0% for the three months
ended October 31, 2004.
Operating profit increased 1.4% to $2.03 million for the three months ended
October 31, 2005 from $2.00 million for the three months ended October 31, 2004.
Operating margins were 8.9% for the three months ended October 31, 2005 compared
to 8.9% for the three months ended October 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.
Despite rising raw material prices, we have been able to increase profits over
last year due to garment pricing, controls on our SG&A expenses and
international production planning.
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
additionally in April 2005 recorded a 10% stock dividend in the form of 456,161
additional shares issued to existing shareholders. These issuances of new shares
had a negative impact on the Company's earnings per share because the weighted
average shares outstanding increased 16.9% for the nine months ended October 31,
2005, compared to the nine months ended October 31, 2004.
Nonetheless, earnings were $0.93 per basic and diluted share for the nine months
ended October 31, 2005, compared to $0.88 per basic and diluted share for the
nine months ended October 31, 2004, while net income increased $0.92 million, or
24.4%, to $4.7 million for the nine months ended October 31, 2005 from $3.8
million for the nine months ended October 31, 2004.
Earnings were $0.26 per basic and diluted share for the three months ended
October 31, 2005, compared to $0.24 per basic and diluted share for the three
months ended October 31, 2004.
Thus, our dollar net income increased by 10.3% or $0.12 million to $1.31 million
for the three months ended October 31, 2005 from $1.19 million for the three
months ended October 31, 2004.
On October 31, 2005, the Company's balance sheet included total assets of $73.7
million, cash of $4.4 million, working capital of $59.6 million, bank debt of
$8.4 million and stockholders' equity of $59.1 million or $11.79 per share of
book value.
Our new Indian Company which will manufacture nitrile and latex supported and
unsupported gloves seems to be working well as sales orders being received are
in line with our sales projections for the fourth quarter ended January 31,
2006.
While our third quarter was better than last year's third quarter, management
expects an exceptionally strong fourth quarter. November sales were up
significantly, and Chemical Suit sales (which have lately been soft) in
particular were strong in November. We built up inventories significantly in
September, October, and November in anticipation of material and garment price
increases which did indeed take effect in late November.
Therefore, our margins in Q4 and well into FY 07 should reflect the benefits of
this very large accumulation of inventory at significantly lower costs than are
prevalent in the market today. Therefore, management is comfortable with the
analyst consensus earnings estimate of $1.30 for FY 06.
Lakeland will host a conference call at 9:00 AM (EST) on December 12, 2005 to
discuss the Company's third 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 6806512.
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
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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 Nine Months Ended
October 31, October 31,
2005 2004 2005 2004
---- ---- ---- ----
Net sales $ 22,717 $ 22,416 $ 73,515 $ 72,099
Cost of goods sold 17,034 17,491 55,870 56,333
----------- ----------- ----------- -----------
Gross profit 5,683 4,925 17,645 15,766
Operating expenses 3,653 2,923 10,862 9,501
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Operating profit 2,030 2,002 6,783 6,265
Other income, net 47 15 136 26
Interest expense (39) (1) (43) (207)
----------- ----------- ----------- -----------
Income before minority interest 2,038 2,016 6,876 6,084
Minority interest in net income of
variable interest entities -- 127 -- 422
----------- ----------- ----------- -----------
Income before income taxes 2,038 1,889 6,876 5,662
Provision for income taxes 725 699 2,202 1,904
----------- ----------- ----------- -----------
Net income $ 1,313 $ 1,190 $ 4,674 $ 3,758
=========== =========== =========== ===========
Net income per common share*:
Basic $ 0.26 $ 0.24 $ 0.93 $ 0.88
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Diluted $ 0.26 $ 0.24 $ 0.93 $ 0.88
=========== =========== =========== ===========
Weighted average common
shares outstanding*:
Basic 5,017,046 5,016,974 5,017,046 4,289,925
=========== =========== =========== ===========
Diluted 5,021,917 5,018,680 5,021,484 4,294,410
=========== =========== =========== ===========
* 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)
October 31, January 31,
2005 2005
ASSETS
Current assets:
Cash and cash equivalents $ 4,423 $ 9,185
Accounts receivable, net 12,875 13,117
Inventories 46,082 30,906
Deferred income taxes 961 961
Other current assets 785 959
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Total current assets 65,126 55,128
Property and equipment, net 7,429 5,014
Other assets 1,133 171
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$ 73,688 $ 60,313
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,100 $ 2,710
Accrued expenses and other current liabilities 1,427 1,442
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Total current liabilities 5,527 4,152
Other long-term liabilities 533 495
Deferred income taxes 86 86
Minority interest in Variable Interest Entities -- 1,113
Revolving Credit Outstanding 8,401 --
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 par; authorized
1,500,000 shares (none issued)
Common stock, $0.01 par; authorized
10,000,000 shares; issued and outstanding
5,017,046 and 4,560,885 shares at October
31, 2005 and at January 31, 2005, respectively 50 46
Additional paid-in capital 42,431 36,273
Retained earnings 16,660 18,148
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Total stockholders' equity 59,141 54,467
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$ 73,688 $ 60,313
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