Lakeland Industries Inc. Announces Fiscal 2025 First Quarter Financial Results

Executive Summary

On June 7, 2024, Lakeland Industries Inc. (Ticker: LAKE), a leading provider in the apparel manufacturing sector, reported its financial results for the first quarter of fiscal 2025. The report, published on April 30, 2024, and filed on June 6, 2024, provides a comprehensive overview of the company's performance.

Key Financial Highlights

• Net sales for Q1 FY 2025 increased by 27% year-over-year to $36.3M, compared to $28.7M in the prior year.
• Organic revenue growth of 13%, driven by fire, chemical, wovens, and disposable products.
• Gross profit reached $16.2M, representing a 30% increase year-over-year, with a margin improvement to 44.6% from 43.4% in Q1 FY 2024.
• Operating income came in at $2.2M, up from $1.9M in the prior year, with an operating margin slightly down at 6.1% from 6.8% due to increased SG&A costs.
• Net income grew by 25% to $1.7M, equating to $0.22 per diluted share, compared to $0.18 in Q1 FY 2024.

Geographical Performance

Lakeland recorded robust growth in multiple regions, with North American operations up by 18% and Latin American operations surging by 54% year-over-year. However, performance in Asia remained subdued, partially offsetting gains from other regions.

Product Line Performance

The fire services business was a standout performer, growing 92% compared to Q1 FY 2024, driven by strategic acquisitions and superior lead times. Disposables, though traditionally a smaller part, saw a 6% year-over-year increase, demonstrating resilience despite market challenges in Asia.

Strategic Acquisitions

Significant M&A activity marked the quarter. The acquisition of Jolly Boots and Pacific Helmets contributed $3.9M to total sales, aiding in the company’s diversification into high-value strategic product segments. Additionally, an agreement to acquire LHD Group's fire service business was signed, which is expected to further bolster the company's competitive portfolio in the coming quarters.

Guidance for Fiscal 2025

Given the strong start to the fiscal year, Lakeland Industries has raised its full-year revenue guidance to a range of $150M to $155M. Adjusted EBITDA is expected to be between $17M and $20M, reflecting the company's confidence in its growth strategy and operational efficiencies.

Management Commentary

Jim Jenkins, Lakeland's President and CEO, expressed optimism about the company's trajectory, highlighting the integration of recent acquisitions and strategic initiatives aimed at driving sustainable growth. Roger Shannon, CFO, reinforced the emphasis on maintaining strong gross margins and enhancing operational efficiency.

Financial Health and Ratios

Lakeland’s financial health remains solid, with a current market cap of $162.68M and a total working capital of $92.39M. Key financial ratios demonstrate the company's strong positioning, including a current ratio of 5.38x and a quick ratio of 2.38x. The company maintains excellent liquidity with cash and cash equivalents of $28.37M.

Comparative Performance

When compared to its peers, Lakeland Industries stands out in several financial metrics. The gross profit margin of 41.03% is well above the industry average of 36.90%, and its net profit margin of 4.35% also surpasses the peer average of 3.65%. The company's prudent financial management is reflected in its debt-to-equity ratio of 12.09%, significantly better than the average of 70.13% within the apparel manufacturing sector.

For further details, please refer to the full financial report here.