Lakeland Industries (LAKE) 9 Jun 222023 Q1 Earnings call transcript

Good day and welcome to the Lakeland Industries Fiscal 2023 First Quarter Financial Results Conference Call. All lines have been placed on a listen-only mode and the floor will be opened for your questions and comments following the presentation.

During today's call, we may make statements relating to our goals and objectives for future operations, financial and business trends, business prospects, and management's future performance that constitute forward-looking statements under federal securities laws. Any such forward-looking statements reflect management expectations based upon currently available information and are not guarantees of future performance and involve certain risks and uncertainties that are more fully described in our SEC filings.

Our actual results, performance, or achievements may differ materially from those expressed in or implied by such forward-looking statements. to or revise of developments obligation to forward-looking this no events reflect after undertake update any or statements call. We the date

like from reconciliation are this call, financial EBITDA, with discussed adjusted today's we this on to EBITDA is measure you to floor the Mr. time, discuss call in earnings for of I including release. comparable Roberson, would measures During Industries' Officer, margin. the and host A most measures will U.S. your presented GAAP, statements each At determined Lakeland Chief not introduce our to derived GAAP the that call, Charlie yours. EBITDA, in directly of accordance financial this our non-GAAP is Executive Roberson.

Good on and joining Chief earnings afternoon first quarter Operating for you Dillard. our Allen I'm Officer, XXXX operator. joined by us call. thank and Thank today Lakeland's fiscal you, Financial

afternoon's quarter continued our Lakeland As release, delivered on saw execute on solid to margin this gross our strategic a you objectives. maintained press improvements we as and

Our the first basis. up quarter-to-quarter a for $XX.X was on slightly million, quarter revenue

However, is profitability last the line gross with financial most out long-term in laid that targets we with quarter's of XX.X%, call. we importantly, in had margin strong which a

Utility of the our the seeing energy half improved in segments year. second which we strength from In we of pickup past two across will these topline currently Electrical end to Service terms quarters results of broader believe the base results continue revenue, in going are demand inclusive a constitute most our that anticipate of and from market. Fire with the and forward revenue the recent grow results fiscal We a markets in return

in the oil in rates quarter's gas to returned refinery we and the call, last the markets, and increase also been U.S. of activity yet some in see segment, the year for market the specifically see second levels have turnaround have we our to we advised as beginning in Europe, in that important While discussed industrial of pre-pandemic will are scheduling to half. second half order

gas remains end online. others we to business. as back comes market, potential availability note sorry, decline a supply to to face seen the workers the year, approximately particular in albeit process. results oil to of our operating at these by employee growth the demand ability labor, XXX,XXX as respect this down result that turnarounds market, labor and about in of pose and products. However, increase in Similar labor in of the workers of that return the leverage a has it a as the beneficial chain support. inclusive That continue the industry, in labor publications a remain segment, optimistic disruptions to More pandemic. to we've which that are increasingly increasing our specifically extrication will -- second specifically delay levels positive to and to our the the within various the number costs we be half pace markets, extraction believe our to that our and will the freight challenge with deliver will supply source the said, relates with risks U.S. We

of competitive is a we is is customer our margins. we which as a critical since or Our chain of as Lakeland management added in significant inventory material customer of challenged will manufacturing. event future. chain simply, day, future the planning is in Put has strategy inventory industry. advantage do becomes freight inventory more will to the requirement fashion, to level in on It our gross the ability international third ports the trumps beginning up who possess industry our to supply of our and and timely by pressures also customer product we a product pricing This have against potential target of accelerated sitting part the in-house have one high in as available $X.X maintaining in through we achieving the job the and in team service believe At raw business. a stated we those quarter an strong in year done warehouses the of be shortages satisfaction the and supply end effects in of the the these our availability price supply our not that have to base continuation which relative before, million mitigating not outstanding the protect last approximately held Quarter-to-quarter, actions.

As initiatives, it will detail. strategic Allen provide ongoing to our I let more relates

However, manufacturing has I'm product facilities, our out new build of to This and systems, centralized that pleased our marketing taken the development. not foot and team off say in investment team the includes data our gas. and sales

revenue plans results. confident of in now growth team's to in flow remarks. support That financial on long-term. a teens further free our and which priorities in levels low in to financial to XXs to annual and our provide I'll company's extremely the mid insight remain I our Allen the Allen? average on and to high call the low generation leading XXs, cash the core ahead, our strong Looking and levels margin operations ability growth gross into include single-digit over long-term the as to my targets, deliver high EBITDA reminder margin more levels pass concludes growing markets, to

good Thanks Charlie and afternoon, everyone.

a and were business quarter the period hard refine revenues operating of metrics first international profitability worked outside or in and key resiliency XXXX. total the sales On total $XX.X as This in to first remain million headwinds reflect results sales of fiscal of or despite strong, consolidated or of our of has control. our the of XX% with sales highlighted, or the million of XXXX, total same were compares and of revenues team fiscal revenues. sales XX% XX% million revenues total Charlie for million $XX.X the international domestic model $XX.X our As of domestic $XX.X XX% basis quarter of

terms of a the the product North America. at at in on In saw demonstrate wovens same chemical of shifts and quarter basis, strength That experienced with said make consolidated mix XX% mix for and essentially sales. last we did disposables geographically some XX% the fourth as year, fire continuing to quarter, with we see in we product

was direct once quarter. orders U.S. for distributors, been of quarter. since the These Gross We we has profit future XXXX industrial rate Distribution first percent rebalance to during order from XX.X% inventory net to the product see XX.X% XXXX. in traditional down it our periods late whose of our increased began towards order a intake XXXX from mix height the indicate depressed industrial COVID sales expect disposables quarter, for our are as fiscal for increase demand the began is first container as to correcting activity. continues fiscal to

We through proactive continue term costs manage and arrangements. our to negotiations raw material purchasing longer

production seek manufacturing and stocking flexibility efficiencies to reasonable balance our activities planning and goals. Our with product inventory

impacted with managing our successful We by in customers. costs, arrangements our fairly have but been freight this pricing via continue to be

operating facilities not first reported quarter operating and During interruptions. million continue levels our the XXXX, XXXX. capacity in prior of to operating in of in by in versus as of impacted contributors tradeshow revenues for absence the in the we currency down curtailments profit $X.X at to were Lakeland manufacturing period expect profits largest manufacturing based normal million expenses and plan, expenses, well first Negative travel drop unanticipated quarter quarter, on as the our in leverage from any increases lower $X.X COVID and were administrative the flux year-over-year.

corporate were result, for from $X.XX common Capital spending were Mexico, of quarter was for our $XXX,XXX. This common year $X.X As ended million or quarter million and new the our XXXX. spending first offices. our the expansion to Vietnam, per and India; figure in or investments $X infrastructure; per related to of share in facilities operating capital quarter XXXX. manufacturing $X.XX months for The majority at in share global Net first during compares April the XX.X% purchases X.X% the quarter was of $XXX,XXX. down to expenditures margins compared IT last income three

as the make year $X investments. these adjustments and to for continue We fiscal million expect be to CapEx approximately full we

compared at quarter, at the the ratio to Moving was million April XXXX the the $XXX XXth, current million at of up end of capital the $XXX.X a prior at at company's from quarter fiscal sheet, to working from balance end of first decreased of the XX.X:X the it's XXXX. X.X:X but The XXXX. X.X:X first quarter XXst, January to end

and has $XX.X no from the company of the cash to at $XX.X of bank million continued at $XX Our the to million facilities. at have end was the million compared end of quarter quarter the credit debt balance fiscal The year. the to available up end

result and preparation our quarter and quarter first completion reporting end for between of stock first XXXX its repurchase or year of the the window, ability quarter, a just to which repurchased of fiscal each over a During during our Notably, company XX,XXX common compressed year the shares $XXX,XXX we under fiscal in seasonally experienced we limited as reporting results back trading fiscal the were buy our program. shares period.

we However, now days window. expect as shortened authorization under the to open maximize it's we quarter, was of going available past future highly the purchase our the in active April remaining success. to this, XXth, us activity in market We this XXXX. company's approximately million remain the our important $X.X ultimately that for period note of current forward, Because the confidence to our in available trading have reaffirming in

share, to areas attractive As our focusing our market that committed growing Charlie enhancing alluded for to, drive already will remain our shareholders. we profitability, investments returns our in efforts, and

we cleanroom example, capabilities in are Vietnam. manufacturing expanding For our

a and for with also opportunities market facility disposable products. expand and not expand are our and cleanroom products, well the nearshore in our we woven in capacity down will Additionally, capacity only traditional fire our manufacturing that road but new Mexico we'll

reporting in like overview, deliver decision-making our efficiencies turn over I'd the Our coming These of capabilities with globally investments and open our in expanding improve to call With planning, call the and to expected XXXX. online the FY technology questions. to initiatives. growth investments the support to and are operating future operator are CRM, that for

you. [Operator first is with coming question Thank the open questions. Instructions] now and Alex for from the Craig-Hallum. And Ladies gentlemen, is Fuhrman floor

Your line is live.

the war like of labor taking the pretty was looks two gas you given nicely recovery it like about sounds and above under oil guys. and Wanted revenue ask the the of you've and continues last my some that be yet the Thanks for the quarter what and pressure for it Hey, modestly constraints quarters oil sector, mentioned. gas to reported question. to

to started the back going to of that based any back is of be oil very gas Or what on year market there more about and have coming your seeing You you gives half talked be and the conversations any this you're see helpful. in that is color, confidence you in signs yet? customers, would with that the

users. oil is and The garnering longer and here now. second with our pushed gas liked are everyone's primarily Gulf trying working to, with is Coast, to bulk businesses that would constraint we're and that they specifically off distributors those And primary our to have United the what than States, end Southern They the with in the maintenance have labor to California-oriented. regard talking deal of half

fuel going to individual efficiency labor's it's that why rapidly. plants as parts going to it's down produce we're for in pricing going likely full happen where to far going They're see second not think but to to see matter. I as getting be have think the As to come we're more So, going able turnarounds, I is the that is available to of half, to that

be how and they just the positive I pumping, side variable, OPEC+ They OPEC were -- work. announced that's to increasing a to increase our That's going it help. but Saudi going that was think did exactly they remains going that that to from -- is worked to supply announced perspective. or out. that's highly being were seen

margin long-term Okay, very those, that's thanks for really helpful, EBITDA that's talking providing your about helpful. then targets, Charlie. just Thanks. And

despite quarter a You range bit first in in margin were margin that EBITDA strong here the gross really quarter. quite below the

be couple leverage come you of scale to as levers the going So, come Just of those to numbers? talk what that should quarters we wondering Should where to in see can progress next we back? as model? that starts into is start towards incrementally demand about thinking the about you kind from over

at OpEx The is a biggest point. dollar-for-dollar our that growth. in doesn't financial leverage, be element We're revenue our to increase with Alex at going of revenue this where point

In fact, revenue sales a lot come expense only of that commissions. will being with additional

it. of the part biggest So, that's

end lower point. any adding that being watching we're at aware our of this SG&A are to with cost. costs our that at or We prudent those the leverage We're and are to

Okay, that's helpful. Charlie. Thank really you,

back for to closing the Okay, I'd remarks. to floor like [Operator turn Instructions] management

Thank you for all joining.

annual this and in mentioned to we base XXXX. which in We today's a quarter, I profitability, in and we single-digit over low confident in core to have the margin revenue successes fiscal of As XXs, EBITDA these gross low from remain ability the our the serve to growth will grow teens results will terms call, look believe as our high mid both high levels deliver remainder margin great day. next years. We sales five a in our forward of you with XXs to the in three levels markets, to and sharing

does today's and gentlemen. This ladies conclude conference call. Thank you,

a have may Thank disconnect phone lines your wonderful you day. You your for this participation. time and at