Lakeland Industries, Inc. Reports Fiscal 2021 Fourth Quarter and Year End Financial Results
Lakeland Industries (NASDAQ:LAKE) reported a remarkable financial performance for fiscal 2021, achieving record revenues of $159 million, a 47% increase from 2020, driven significantly by COVID-19 related demand. Net income soared by 970% to $35.1 million, equating to $4.40 per share. The company’s cash position strengthened to $52.6 million with no debt, highlighting improved operational efficiencies. International sales grew by 70%, outpacing domestic growth of 26%. Gross margin improved to 49.8%, reflecting better pricing and production management.
- Record fiscal 2021 revenues of $159 million, up 47% from 2020.
- Net income increased 970% to $35.1 million, or $4.40 per share.
- Strong cash position of $52.6 million with no debt.
- International sales increased 70%, outpacing 26% domestic growth.
- Gross margin improved to 49.8%, up from 35.2% in fiscal 2020.
- Operating expenses increased to $35.4 million, up from $32 million in fiscal 2020.
- Annual Revenues Increase for Fourth Consecutive Year as Fiscal 2021 Sales Reach Record
- Net Income for Fiscal 2021 Increases
- Revenues from International Markets Continue to Outpace Domestic Growth
- Performance Bolstered by Sustainable Improvements from:
- Technology Implementation
- Increased Market Penetration
- Inventory and Manufacturing Production Management
- Continuing SKU Rationalization
- Cash Jumps
DECATUR, AL / ACCESSWIRE / April 15, 2021 / Lakeland Industries, Inc. (NASDAQ:LAKE) (the "Company" or "Lakeland"), a leading global manufacturer of protective clothing for industry, healthcare and to first responders on the federal, state and local levels, today announced financial results for its fiscal 2021 fourth quarter and full year ended January 31, 2021.
Fiscal 2021 Fourth Quarter Financial Results Highlights
- Net sales for 4Q21 of
$36.9 million , up31% as compared with 4Q20 of$28.2 million - Gross profit for 4Q21 of
$18.1 million , up71% as compared with$10.6 million in 4Q20 - Gross margin as a percentage of net sales in 4Q21 was
48.9% , compared to37.7% in 4Q20 - Operating expenses of
$8.8 million in 4Q21, down from$8.9 million in 4Q20 - Operating profit of
$9.3 million in 4Q21, up447% from$1.7 million in 4Q20 - Net income of
$7.9 million or$0.99 per basic common share in 4Q21, up from$1.2 million or$0.15 per basic common share in 4Q20 - Earnings before interest, taxes, depreciation, and amortization (EBITDA)* of
$10.3 million in 4Q21, up348% from$2.3 million in 4Q20 - Capital expenditures for 4Q21 of
$0.4 million , up from$0.3 million in 4Q20
Fiscal 2021 Full Year Financial Results Highlights
- Net sales for fiscal 2021 of
$159.0 million , up from$107.8 million in fiscal 2020 - Fiscal 2021 sales include an estimated
$48 million to$56 million (30% to35% ) of demand related to COVID 19, up from$1 million in fiscal 2020 - Gross profit for fiscal 2021 of
$79.3 million , as compared with$37.9 million in fiscal 2020 - Gross margin as a percentage of net sales in fiscal 2021 was
49.8% , up from35.2% in fiscal 2020 - Operating expenses of
$35.4 million in fiscal 2021, up from$32.0 million in fiscal 2020 - Operating profit of
$43.9 million in fiscal 2021, up from$5.9 million in fiscal 2020 - Net income for fiscal 2021 of
$35.1 million or$4.40 /$4.31 per basic/diluted share compares with fiscal 2020 net income** of$3.3 million or$0.41 per basic/diluted share - Adjusted EBITDA* of
$47.5 million for fiscal 2021, up from$7.1 million in fiscal 2020 - Capital expenditures for fiscal 2021 were
$1.7 million , up from$1.0 million in fiscal 2020 - Cash of
$52.6 million at 1/31/21, up from$14.6 million at beginning of the fiscal year - Current ratio improves to 8.0:1 at 1/31/21, up
26% from 1/31/20 - No debt at 1/31/21, down from
$1.2 million at beginning of fiscal year - Stockholders' equity at the end of fiscal 2021 increased by
$37.8 million or44% to$122.9 million from$85.1 million at the beginning of fiscal year
Operational Highlights
- Sustainable Improvement Initiatives
- Investments in digital transformation: ERP, CRM and IT systems
- Vietnam and India manufacturing capacity increased
- New product development targeting higher margin niche markets
- Improved working capital and cash management
- Leadership Team Strengthened
- Christopher J. Ryan appointed Executive Chairman (effective 2/1/20)
- Charles D. Roberson appointed Chief Executive Officer (effective 2/1/20)
- Allen E. Dillard appointed Chief Financial Officer (effective 8/12/19)
- Steven L. Harvey appointed to new post of EVP Global Sales/Marketing (effective 1/24/21)
- Industry veteran Nikki L. Hamblin appointed to Board of Directors (effective 2/24/21)
$5 million stock repurchase program authorized on February 11, 2021; replaces prior program with$800,000 remaining
* EBITDA and Adjusted EBITDA are non-GAAP financial measures. Reconciliation is provided in the tables of this press release.
** Lakeland's fiscal 2020 financial results as reported on a U.S. GAAP basis was subject to non-cash income tax expense pertaining to Global Intangible Low-Taxed Income ("GILTI") accounting policies. GILTI relates to income earned by foreign affiliates of U.S. companies in excess of allowable returns from intangible assets associated with such operations, which went into effect in 2018 following the passage of the 2017 Tax Cuts and Jobs Act. The 2017 Act, among other things, lowered the U.S. federal corporate income tax rate from
Although this new US anti-deferral tax provision uses the words "Intangible Low-Taxed Income" in its' title, based on current regulations, the result is an inclusion of income from all of Lakeland's controlled foreign corporations (CFCs) into its consolidated corporate income tax return, regardless of the type of income or the tax rate in the foreign country. Final regulations have been issued regarding the mechanics of calculating GILTI, although there are "Proposed Regulations" that, if adopted, would cause the calculation to include only the income from Lakeland CFCs that are taxed at a rate lower than
Management's Comments
Charles D. Roberson, President and Chief Executive Officer of Lakeland Industries, stated, "Lakeland's fiscal 2021 has proven to be the most complex yet most rewarding year since our founding in 1982. We are grateful for the perseverance and dedication of our global workforce which increased by nearly
"Numerous financial performance records were achieved in fiscal 2021. We reached the highest annual revenues, gross profit, operating profit, and net income, to name a few of the key metrics for which record performance was attained. More importantly, we demonstrated the resiliency of our supply chain and manufacturing; and the sustainability of our improving operations, which, in combination, result in a significantly improved financial model that positions us well for a post-COVID 19 business environment. Revenues of
"Throughout the year, Lakeland was able to scale its manufacturing unlike any other PPE provider in the world. We showed how owning your manufacturing facilities is a sustainable strategic advantage. Our brand value has been magnified by our ability to source raw materials globally and deliver high quality garments, at competitive prices, from our strategically located manufacturing facilities. Our customer count grew during the year with the addition of over 500 new distributors and/or end users. Most of these new accounts are traditional industrial customers who are not ordering for pandemic defense purposes. Demonstrating our diversification, in fiscal 2021 our domestic revenues increased
"The progress made in fiscal 2021 sets the stage for Lakeland to exit the COVID 19 era with market share gains and an enhanced visibility into sustainable improvements that are expected to significantly elevate our business performance from pre-pandemic norms. The Company's positive trajectory should further benefit from the data-driven and technologically enhanced culture we have embraced and other growth-oriented measures. Toward the end of the fiscal year, we hired the Company's first Executive Vice President to lead a coordinated global sales, marketing and customer service strategy, and appointed our first global supply chain manager to further enhance our manufacturing resiliency and flexibility.
"These developments are consistent with our continued vertical alignment of our operational functions which are intended to provide agility within business disciplines allowing us capitalize on market opportunities, while yielding productivity efficiencies, and generating improved returns from capacity expansions at our production facilities. Each of these focus areas complements the others and when combined with the continued investments in our ERP system, Salesforce CRM rollout, and data-centric planning processes, is expected to serve as a catalyst for ongoing improvement in productivity, efficiencies and profitability. To date, most of our technology investments have only been partially implemented, primarily within the U.S. market. Rollout of these technologies into our international operations will continue over the next 18 to 24 months. Leveraging this base, our growth plans call for continued investments to increase production capacity of new product lines in Vietnam, India and Mexico. To the extent possible, we will be investing in near-shoring certain manufacturing to shorten lead times, add value for our customers, and improve inventory turns. All capacity expansions will be fungible between our primary product lines for disposable, chemical and Critical Environment, one of our more recent garment lines which grew during the year and contributes to our efforts to increased gross profits with differentiated, protective apparel.
"In the most challenging business climate in decades, we are pleased to have exited fiscal 2021 far better positioned than how we entered the year. We did not let the crisis go to waste. We used it to our advantage as a catalyst for transformation Now, as we enter fiscal 2022, Lakeland has a new roadmap to drive top line growth at improved profit levels, while meeting the needs of our growing customer base, optimizing our manufacturing and supply chain, and deploying our substantial and growing capital base to deliver solid returns for shareholders," concluded Mr. Roberson.
Allen E. Dillard, Chief Financial Officer of Lakeland Industries, added, "The Company's cash position grew with each successive quarter in fiscal year 2021. Our cash balance at January 31, 2021 was a record
Fiscal 2021 Fourth Quarter and Full Year Financial Results
Net sales were
On a consolidated basis for the fourth quarter of fiscal 2021, domestic sales were
During fiscal 2021 as compared to prior year periods, the Company experienced significant growth in sales of disposable and chemical garments primarily relating to COVID 19 demand and as a result of cultivating new industrial customers who could not procure these products from incumbent manufacturers or their subcontractors. In addition, global economic activity picked up from the first half of the fiscal year as many businesses, countries and industrial vertical markets eased earlier imposed temporary closures and lockdowns and due to a broader economic recovery. Foreign exchange currency translations positively impacted sales in the UK/Europe, Canada, and China as reported on a consolidated basis in U.S. dollars by approximately
Gross profit of
Lakeland reported operating profit of
The Company reported net income of
As of January 31, 2021, Lakeland had cash and cash equivalents of approximately
Working capital at January 31, 2021 was
Lakeland anticipates that its Annual Report on Form 10-K relating to the fiscal year ended January 31, 2021 will be timely filed on April 16, 2021.
Financial Results Conference Call
Lakeland will host a conference call at 4:30 pm eastern time today to discuss the Company's fiscal 2021 fourth quarter and full year financial results. The conference call will be hosted by Charles D. Roberson, President and CEO, and Allen E. Dillard, Chief Financial Officer. Investors can listen to the call by dialing 877-407-8033 (Domestic) or 201-689-8033 (International). For a replay of this call through April 22, 2021, dial 877-481-4010 (Domestic) or 919-882-2331 (International), Pass Code 40709.
About Lakeland Industries, Inc.:
We manufacture and sell a comprehensive line of industrial protective clothing and accessories for the industrial and public protective clothing market. Our products are sold globally by our in-house sales teams, our customer service group, and authorized independent sales representatives to a network of over 1,600 global safety and industrial supply distributors. Our authorized distributors supply end users, such as integrated oil, chemical/petrochemical, automobile, steel, glass, construction, smelting, cleanroom, janitorial, pharmaceutical, and high technology electronics manufacturers, as well as scientific, medical laboratories and the utilities industry. In addition, we supply federal, state and local governmental agencies and departments, such as fire and law enforcement, airport crash rescue units, the Department of Defense, the Department of Homeland Security and the Centers for Disease Control. Internationally, we sell to a mixture of end users directly, and to industrial distributors depending on the particular country and market. Sales are made to more than 50 countries, the majority of which were into the United States, China, the European Economic Community ("EEC"), Canada, Chile, Argentina, Russia, Kazakhstan, Colombia, Mexico, Ecuador, India, Uruguay and Southeast Asia.
For more information concerning Lakeland, please visit the Company online at www.lakeland.com.
Contacts:
Lakeland Industries, Inc.
256-445-4000
Allen Dillard
aedillard@lakeland.com
Darrow Associates
512-551-9296
Jordan Darrow
jdarrow@darrowir.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 Forms 8-K, registration statements, quarterly and annual reports and other 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," or other words which 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.
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles (GAAP), the Company uses the following non-GAAP financial measures: EBITDA, adjusted EBITDA and Free Cash Flow. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. The non-GAAP financial measures used by the Company in this press release may be different from the methods used by other companies.
For more information on the non-GAAP financial measures, please see the Reconciliation of GAAP to non-GAAP Financial Measures tables in this press release. These accompanying tables include details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.
(tables follow)
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(
ASSETS | ||||||||
Current assets | 2021 | 2020 | ||||||
Cash and cash equivalents | $ | 52,596 | $ | 14,606 | ||||
Accounts receivable, net of allowance for doubtful accounts of at January 31, 2021 and 2020, respectively | 21,702 | 17,702 | ||||||
Inventories | 43,833 | 44,238 | ||||||
Prepaid VAT and other taxes | 1,343 | 1,228 | ||||||
Other current assets | 4,134 | 2,033 | ||||||
Total current assets | 123,608 | 79,807 | ||||||
Property and equipment, net | 9,819 | 10,113 | ||||||
Operating leases right-of-use assets | 2,347 | 2,244 | ||||||
Deferred tax assets | 2,839 | 5,939 | ||||||
Prepaid VAT and other taxes | 329 | 333 | ||||||
Other assets | 112 | 98 | ||||||
Goodwill | 871 | 871 | ||||||
Total assets | $ | 139,925 | $ | 99,405 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 7,397 | $ | 7,204 | ||||
Accrued compensation and benefits | 3,902 | 1,300 | ||||||
Other accrued expenses | 1,793 | 2,445 | ||||||
Income tax payable | 1,534 | ----- | ||||||
Current maturity of long-term debt | ----- | 1,155 | ||||||
Current portion of operating lease liability | 768 | 835 | ||||||
Total current liabilities | 15,394 | 12,939 | ||||||
Long-term portion of debt | ----- | ----- | ||||||
Long-term portion of operating lease liability | 1,613 | 1,414 | ||||||
Total liabilities | 17,007 | 14,353 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred stock, | ----- | ----- | ||||||
Common stock, Issued 8,498,457 and 8,481,665; outstanding 7,984,518 and 7,972,423 at January 31, 2021 and 2020, respectively | 85 | 85 | ||||||
Treasury stock, at cost; 509,242 shares at January 31, 2021 and 2020 | (5,023 | ) | (5,023 | ) | ||||
Additional paid-in capital | 76,781 | 75,171 | ||||||
Retained earnings | 52,687 | 17,581 | ||||||
Accumulated other comprehensive loss | (1,612 | ) | (2,762 | ) | ||||
Total stockholders' equity | 122,918 | 85,052 | ||||||
Total liabilities and stockholders' equity | $ | 139,925 | $ | 99,405 | ||||
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(
| 2021 | 2020 | |||||||
Net sales | $ | 159,000 | $ | 107,809 | ||||
Cost of goods sold | 79,750 | 69,912 | ||||||
Gross profit | 79,250 | 37,897 | ||||||
Operating expenses | 35,397 | 32,021 | ||||||
Operating profit | 43,853 | 5,876 | ||||||
Other income (expense), net | 50 | (7 | ) | |||||
Interest expense | (23 | ) | (116 | ) | ||||
Income before taxes | 43,880 | 5,753 | ||||||
Income tax expense | 8,774 | 2,472 | ||||||
Net income | $ | 35,106 | $ | 3,281 | ||||
Net income per common share: | ||||||||
Basic | $ | 4.40 | $ | 0.41 | ||||
Diluted | $ | 4.31 | $ | 0.41 | ||||
Weighted average common shares outstanding: | ||||||||
Basic | 7,977,683 | 8,005,927 | ||||||
Diluted | 8,141,189 | 8,037,019 | ||||||
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
Operating Results (
Reconciliation to GAAP Results
Year Ended January 31, | ||||||||
| 2021 | 2020 | |||||||
Net sales | $ | 159,000 | $ | 107,809 | ||||
Year over year growth | 47.5 | % | 8.9 | % | ||||
Gross profit | 79,250 | 37,897 | ||||||
Gross profit % | 49.8 | % | 35.2 | % | ||||
Operating expenses | 35,397 | 32,021 | ||||||
Operating expenses as a percentage of sales | 22.3 | % | 29.7 | % | ||||
Operating profit | 43,853 | 5,876 | ||||||
Operating income as a percentage of sales | 27.6 | % | 5.5 | % | ||||
Other income (expense), net | 50 | (7 | ) | |||||
Interest expense | 23 | 116 | ||||||
Income before taxes | 43,880 | 5,753 | ||||||
Income tax expense | 8,774 | 2,472 | ||||||
Net income | $ | 35,106 | $ | 3281 | ||||
Weighted average shares for EPS-Basic | 7,978 | 8,006 | ||||||
Net income per share | $ | 4.40 | $ | 0.41 | ||||
Operating income | $ | 43,853 | $ | 5,876 | ||||
Depreciation and amortization | 1,965 | 1,645 | ||||||
EBITDA | 45,818 | 7,521 | ||||||
Stock-based compensation | 1,727 | (403 | ) | |||||
Adjusted EBITDA | $ | 47,545 | 7,118 | |||||
Cash paid for taxes (foreign) | 3,561 | 1,700 | ||||||
Capital expenditures | 1,662 | 1,033 | ||||||
Free cash flow | $ | 42,322 | $ | 4,385 | ||||
LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES
Operating Results (
Reconciliation of Non-GAAP Results
Year Ended January 31, | ||||||||
| 2021 | 2020 | |||||||
Net Income to EBITDA | ||||||||
Net Income | $ | 35,106 | $ | 3,281 | ||||
Interest | 23 | 116 | ||||||
Taxes | 8,774 | 2,472 | ||||||
Depreciation and amortization | 1,965 | 1,645 | ||||||
Other income (expense) | 50 | (7 | ) | |||||
EBITDA | $ | 45,818 | $ | 7,521 | ||||
EBITDA to Adjusted EBITDA | ||||||||
(excluding non-cash expenses) | ||||||||
Equity compensation | $ | 1,727 | $ | (403 | ) | |||
Adjusted EBITDA | $ | 47,545 | $ | 7,118 | ||||
Cash paid for taxes (foreign) | 3,561 | 1,700 | ||||||
Capital expenditures | 1,662 | 1,033 | ||||||
Free cash flow | $ | 42,322 | $ | 4,385 | ||||
SOURCE: Lakeland Industries, Inc.
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