Lakeland Industries (LAKE) 5 Dec 242025 Q3 Earnings call transcript

Good day, and welcome to the Lakeland Industries Fiscal 2025 Third Quarter Financial Results Conference Call. [Operator Instructions] 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 expectations for future performance that constitute forward-looking statements under federal securities law. 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. We undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this call. On this call, we will also discuss financial measures derived from our financial statements that are not determined in accordance with U.S. excluding adjusted EBITDA, margin. excluding adjusted including FX EBITDA, and FX GAAP, is earnings reconciliation non-GAAP most to measure the each directly in discussed GAAP A of call measures of release. on this comparable presented our the and A Chief our afternoon the is Chairman, this Officer the for Executive and introduce ir.lakeland.com. At website, call, detailing Executive this press Industries' section would available this of your Shannon. and like these to release Jenkins; Relations crossed Chief wire Secretary, results and Investor Officer company's in President, time, Lakeland Jim I host Financial Roger Mr. Jenkins, is the floor yours.

Thank the and afternoon, results for XXXX. quarter you discuss fiscal you, our XX, operator, third XXXX everyone. us Thank of ended to good today October joining

and For protective those PPE. of mission-critical our of global apparel are equipment, premium and of a personal manufacturer a fire you we new head-to-toe story industrial accessories Lakeland strategy, with and brands portfolio service to the

leading is global on team fire management acquisition implementing focus term, the a leverage higher-margin accelerate and billion the accelerate protection, gear the growth markets an in sector PPE growth strategy position accretive our markets. M&A turnout Our to industrial industry. Near fire is to premium brands profitable protection fire within with $X largest to the fragmented in fire global in and strategies market margins and

year-over-year growth fiscal to with efficiencies to PPE single-digit Our are manufacturing served. These performance team's mid- with experienced company-owned into long-term focusing this strategy grow is them higher year and at operating top faster strong our our ahead. guidance positioning strategically organic to positioning and growth verticals with management located high for and XXXX strategies line to markets Fire equating to translating least XX% industrial grow of financial both execution margins model, than on Services with capital-light achieve

to guidance. flow strategy We are free and above and initiatives current a Fire growth capitalized strong with acquisition sheet our fund cash balance expanding well Services

executed create blocking growth successfully North product a gear, similar for particulate focus fire a and acquisitions accelerate mission-critical fire team American and efficiency Lakeland tenured accretive our has and with globally and our turnaround Lakeland's, value. strategy boots, helmets, Fire fire includes and safety to hoods gloves Importantly, turnout certified management Services new portfolio segment. safety's to synergies and

industrial garments that and of brands of through XX our safety the comprised firefighter and a combined our Australia. includes Our regional segment and premium high-quality FR/AR on and a globally including countries scale. distribution partners Services operate Fire Germany wide woven available global slide products, boots. This a suits, coveralls, range global serve safety across chemical high-performance disposable focus PPE with products head-to-toe America, shows portfolio gear, North and markets strategic customers in turnout for are Fire largest X X

Middle in strong does Asia. in brand the East LHD our presence has Additionally, a Eagle as

marked was led customer quarter XX% head-to-toe a sales a to third by increase. robust sequential growing geographic by base XXX% year-over-year The our and segment Fire Services with

strong visibility U.S. expectations supported times by strong met and European, was a believe and and set compared this segment strategy rebound other Asian become growth fragmented we dominant to sales to lead player. opportunities better Services leadership Services by our expanding million, as business new sales to organic Gross strong Latin Services $XX.X and quarter XX% Latin without acquisition profit and products. Asia million a superior through by growth America, results. To Fire net ongoing quarter, the X is led Services Europe service. expanding Lakeland growing remain American increasing Fire in well as due Fire a increase organic saw in brands, Overall, improvement. and confident summarize, third in opportunities Services competitor shipment focus margins an in industrial highly margin XXX% with customer and segments, Fire in products. expected and in on growth and a market market inorganic the our global Our can XX% of our and $XX.X strategy revenue in and contributed our competitive safety a top Fire growth we has increased a sales family driven as We to in to large robust

the remains I'm unwavering, commitment fiscal and year. this Our about excited remainder of

maintaining outlook and to Looking global revenue fiscal Please in our XXXX and backlog of Helmets sales the Group our our -- these year, remain on we boots, for million. ahead we announced XXXX, of include fiscal and at expectations for LHD our that are acquisitions. year. existing Pacific note are reaffirming fiscal the the guidance remainder the of the for Jolly based 'XX ability platforms $XXX ability least year, and and earning year We confident expectations quarter for last

it results financial EBITDA, over cover year Additionally, of to like to adjusted Roger million. With for our at 'XX we $XX our reaffirm FX, year. an and outlook for the excluding rest that, I'd expectations fiscal the to pass least to provide be

Thanks, Jim, and hello, everyone.

total sales sales sales million were or and delivered international at for the $XX.X last compared XX% comprised XX% $XX.X third the million Organic quarter of third or On million Looking year. fiscal million XX% XXXX, to of million and revenue of compares our This XXXX. the in $XX.X international from were of recent acquisitions. XX% a our sales QX of quarter of XX% domestic consolidated $XX.X came of of quarter sales. of for of or third total sales our XX% revenue Lakeland fiscal total fiscal or with the million basis, revenues, our XXXX, total $XX.X revenues. year $XX.X of quarter third domestic

the as total XX-month TTM quarter an XXXX. Adjusted to the is EBITDA, and XX.X% particularly LHD, of third as a third of of significant to to sales contributed on which results Reviewing XXXX of increase gross TTM $XX.X or compared of trailing increase of performance, excluding anticipation third in million we quarter Lakeland's company inorganic Operating our of Organic margin the $XX.X expenses million, overall, quarter share $X.X new third quarter Organic back $X.X $XX.X million margin from $X.X excluding percentage for fiscal the driving quarter America, year-over-year adjusted or EBITDA, points open in third LHD an profit by million. On XX.X% focus income the for or compared on fourth compared third compared the of due step-up Revenues acquired million third we $XX.X for our for of to Pacific versus XXXX for margins compared excluding and QX of results fiscal professional net the quarter. driven the and excluding an the and basis XX, the third revenue QX FX delivering on saw expenses of organic XXXX a additional -- third increased fiscal a QX year of XXX North LHD, of or sales the has fees. third $X.X earnings revenue of of revenue revenue million $XX.X profit impacts XXXX, $X.X to fiscal 'XX and third diluted of of million. in Slide changes America, XXXX opportunities. and was quarter third an an third to declined third increase SG&A FX $XXX,XXX quarter a performance operating third in Jolly, we growth third and continue million, fourth margin of This increase of XXXX the $XXX.X million quarter XXXX. details XXXX, multiyear combined quarter of July million, per the fiscal profit increased on provide FX. million XXXX. diluted from adjusted growth quarter recent fiscal of efficiencies. Gross X.X% Jolly the the X.X% per shipping for higher XX.X% for third the fiscal while orders million showing for mentioned inbound FY began freight for XX% These and $XX.X $X.X Jolly XXXX X.X% fiscal or XXXX excluding net fiscal by for remain Eagle our versus challenges was The by third of This to growth LHD, fire XX.X% margins of the accelerate for primarily some the from basis, or organic of During of due quarter contributions Latin of that quarter deliver was projections. fiscal fiscal both delayed in in QX to quarter acquisition by Lakeland's of XX.X% in XX.X% fiscal of third saw improvement in decreased $X.X gross Asia for resumed, $X.XX confident nonrecurring fiscal from Operating expenses. On we to full to XX.X% Europe. expenses, basis, accelerating EBITDA, quarters. $XX the the fiscal the EBITDA, the was those million $XXX.X a amortization orders we of million In EBITDA, of from anticipation Helmets our fiscal fiscal higher acquisition, increased we the adjusted quarter, impacted On quarter orders further of for of Gross per in impacts. the and inventory expenses the the as XXXX margins to XXXX million $X.XX quarter due increase and is lower fourth XX-month of previously the X, we to by quarter for XXXX fiscal fiscal of Operating for million results. Sales sales quarter fiscal expect was second FY fiscal and XXXX. Operating fiscal offset sales. to late FX, income and compared trailing was results, quarter expenses, share quarter X.X% of yet XXXX. TTM as our face total profit production adjusted mix to our in third XXXX third basis to are substantial partially XXXX. growth, for XXXX acquired driven in TTM we in of $X increased 'XX the were XXXX. Net and increased compared our of million quarter million. cross-selling fiscal Gross $X.X million for to million. or FX, $XX.X had expense to the percentage of the the of Jolly primarily QX operating XXXX year $X.X million SG&A $XX.X is and for to quarter were orders overall

Looking a continue of were and Latin encouraged our now in at operations to growth increase represents total in they we by sales our XX% very organic again American XX% year-over-year. the with LATAM sales, grow. business, Lakeland's

continually expect new and team region. identifying We're region Lakeland to expect forward. the capitalizing in growth offering Our is LATAM, products into going portfolio LATAM our to on industrial that Services and further that opportunities, Fire we outstanding introduce expand new from we market in and working

XX% We they Even up their management team, we also so, optimistic our sales year-over-year. American sales Mexico operations country. recently have our that success that in are QX Latin put Mexico under our replicate in were can and

in place new year-over-year in both also put seeing we about China. We're and growth We Asian the encouraged double-digit of are outside new saw the by and in China that very we're sales Asia, in we've markets leadership Asia. sales growth excited

Eagle, growth see and acquired XXX% revenue, grew including to recently European its million. committed our very LHD by good opportunities million $XX.X are in and Our We $XX.X sales Jolly or business, to Europe trajectory.

the second rebound Fire driven we pleased our quarter see by in transition, Lakeland business. our LineDrive in to Service $XX.X to slowdown to revenue the U.S. due a growth million, our Following were continued

was U.S. growth growth $X X%, or million our or While our $X.X revenue XX%. was quarter-over-quarter U.S. year-over-year million revenue

start Services Fire by our driven or our and the the quarter, last gains grew year, our XXX% third organic and to $XX.X million the in LHD we period same acquisition from U.S. see for gains head-to-toe business mix as product recent Regarding strategy. from versus Eagle

XX% XX% represented wear, Our led accounted fire year-over-year. XX% for high chemical products, high-performance X% last for X.X% while high to revenue the product grew remainder or of the our decreased same vis high XX%. XX% was and of quarter, products performance and of grew sales. respectively, our by $X.X period and the and industrial million over chemical grew X%, The including while year, which industrial lines Disposables vis FR/AR

XXXX. XXXX, $X.X cash of industrial million in partially in $X.X as The in facility. Net XXXX. $XX.X October up XXXX on $XX.X Now sales was previously QX, decrease of ended increase due our sales a was the forecasted equivalents equipment. At of XXXX. With and $XX.X the in million the fiscal turn $X.X turning were well cash orders October during used questions. debt deliver debt working of ended in Jim preparation to credit orders quarter driven $XX.X in mainly fiscal by cash manufacturing $XX.X mentioned the cash expenditures $XX.X we Capital the our inventory end months primarily to first to X compares Year-over-year, debt in organic October and in build ended and increase was to million was provided of million, the that activities million quarter $X.X in quarter with of X long-term from the QX for for and This back our sales first over to the as in XXXX, quarter long-term inventory at $XX.X to for year. ended XXXX million months to XX, organic of Jolly, the the ended long-term on The sheet. the build expected of Eagle million of quarter of by offset we million. July due of ship XX, the of of net to due saw QX approximately million operating debt fourth inventory was the primarily in like in repayments versus in October and begin XX, the compared Lakeland the Group capital at months million FY acquisition net the to cash fourth ramping repayment to backlog and was XX, LHD fiscal as in million, XXXX. LHD The Jolly related of I fiscal overview, $XX.X and increases July, the cash and call to quarter increase X XXXX. million multiyear end primarily the a in inventory before primarily 'XX, reduction would taking XX, balance LHD,

our has saying driven growth by our of in well on very visibility our increase Services results X a of quarter line Thank in XX% XXXX, high these strategy. this are year-over-year organic come the single-digit that net communicated there fruition by to you, America. It was with rebounding reaffirmed Asia outlook Roger. I'll and by fiscal third conclude our XXX% main that sequential growth and strong is last now call and on clear demonstrated based growth and long-term Europe, Fire across our global sales Latin and progressing themes near-term and significant

competition, respect anyone First, this our our we strength business. our to is and with believe Fire market to than faster driving Services in time in else is

markets. for sales global third, offering, is X our to fire well competitive we we in are to team. largest of customers, global believe the Second, this, speed And highly our a positioned we fire coupled are head-to-toe take with share. And market disruptive a delivery differentiator because positioned

entities acquired our our and from As Roger all negotiate cash implement position in towards favorable business, consolidate the to the to the corner with we believe and of financial begin turning opportunities, legacy are recent previously mostly direction we trending generation. our business operations terms as metrics right vendors mentioned, cross-selling are also

Conference of is a increases in and foundation, seeing for preparation the the in in to fruit the capital quarter share market to look the to now deployed to the positioned forecasted seeing Company more year shareholder story questions. are the sharing Investor call bright. couldn't Annual XXXX. It Deer our and Lakeland Benchmark Annual Conference. With forward primarily most will the ROTH sales drive visibility working Discovery week quarter first buildup teams and of fourth in due We are generation those now quarters management value. of time The part Operator? XXth now for on cash and inventory Institutional more global quarter is strategies the growth, development third the We at we importantly, that, Valley bear in fiscal open be and XXth sales building, be next better to -- One-on-One realigned as story penetration, subsequent

Instructions] [Operator comes from question of Our first ROTH Capital. Sweeney with line the Gerry

depth, to winded probably understand think going So longer first you'll in little I bit where this. it's going question, a I'm with but be

of then of So your quarter, million fourth Jolly into appears there's But to we to the your have will million EBITDA. exceeded to significantly starting there's that in have have think of inventory, far the also direction. that this the million rebounding. are EBITDA. step-up to it legs have revenue But U.S. $XX of in quarter And and will get $XXX guidance, either right them. we guidance the in jump cetera. confidence million going and of $XX I basis Eagle Obviously, be underneath know the get fourth I everything or up revenue is et going $XXX margins

achieve give you could bit a all into everything how ]? as accelerating more with granularity little to these [ So year-end this we and operations guidance maybe us

is This Gerry. Roger. Sure,

our time, we of in recovery we recall and revenue. that Vietnam produce inventory inventory as operate is year of ending You'll reduced in talked inventory of And the expectation would margins that plants about to out for we But and that, and turn negative orders the these China. the our EBITDA, gross kind and QX, QX, the of at did we released. levels coming over builds second high visibility be the due really to. in still to profit In capacity ending to efficiently that have inventory same have that this the continue the to shipments impact our particularly half profit very on inventory in

of but profit quarter. there inventory in of almost of directly was because release in didn't like So was quarter, that, build sales what no no last it was inventory. the us it through this by hurt of QX the there third It benefit because was ending moved inventory actually for from either did offset

profit significant Given you expecting what to said, that, QX, visibility we have shipping, what we these effect of will, release do that just QX in which orders a that that ending as we in are increase inventory see to are in in margin.

be large will would very from that that we're backlog ending be inventory, a profit Because including EBITDA. part to So still release the this that multiyear some LHD. revenue we our which expect facilities, expecting in orders see from at significant QX, of a we accretive what in of production

So Got get inventory that what quarters. by just basis a apples-to-apples adjustments a I'm the trying pure clearer different made, to you cleaner, Is to see is it. because all say, And this and this being time this an really the should fair... margin. all we say on released, is correct? this to releases, fair of It's is reallocated accounting acquisitions you

this you that Yes. of a there's noise I mean, that's Gerry, once normalcy when white for then experience while. through there's there of this some of there's acquisitions, -- And as had then of stuff that I and do sort these clear at financial yourself you a yourself you of Transcat, through you -- lot level clear a returns. sort know,

just to light shine of I Got wanted that's sort I on what a it. it. And assumed.

So hear. that's to what expected I

but -- in and a your hoping my maybe LineDrive, How -- was there hear is playing XQ, on a basis? over Separately, So the bit I obviously, out go-forward -- agreement. friction little words, transitioning of words, and that to not LineDrive was expected.

grow. continues Performance Very has quarter-over-quarter improved. well. to Pipeline

salespeople to with brought salespeople There's VP Our sales regional Industrial a that Sales of weekly. relationship. meeting discipline LineDrive's Global -- are that our regional has

Our been well. been business and also what been leader he's as I've development with quite has doing pushing pleased aggressively very

really we little first were quarter disappointed a momentum we're kickoff with So see starting that now. I in -- some starting to -- them, couldn't to but

line. in know believe, you're then big tuned? the Got on That's and biggest fire bigger it. jump I stay Any U.S. U.S., I thoughts in more getting question, turnout fair. market. looking I'll Obviously, gear, that And the one opportunity, or at

Yes.

we're said we've United We I have -- opportunities before, this in States. pursuing actively think the

to run We Gerry. that continue out,

from Instructions] line Our the Matthew question Maxim. comes [Operator with of Galinko next

can you're of year? much you name? the next it color Maybe around give the predominantly multiyear through could I it but firstly, year? that little you to into is working backlog we this acquired addressable just know last quarter, well more you think about a something talked from it Is that us this And still Is flush how you? bit through something

Yes, Thanks Roger. question. Matt, it's for the

as kind start Hong with pleased the of Australia shipments, did the from of I -- were Kong. the particularly guess, LHD. we shipments beginning So LHD of did well

If that in you you were vendors. doing essentially cash in doing nothing recall advance some Germany they from conversations -- were backlog multiyear, mentioned, They because multiyear LHD with was was And financial our this had previous distress. developed. as or worse

down. XX% a as level make gives in confidence turn of And as QX. be quarter. working percentage So in XX% a and significant ship balances fourth our on, quarter, saw large expect and speak. we're And in QX on build our we'll orders again us to production again cash back inventory we now, the of that start a shipping those will going still as Right thinking receivables, to revenue in the multiyear into to you again, fast that come of with and backlog the very collect a our sale are inventory we We that back importantly, Germany, there that those cash. was number. And as will ramp do for and capital that high ramp third that

or working very at as a relationships. -- quarter, also them just in in the the jump-start a as them hire basically we of and third-party that manufacturers comments. made bring well LHD was legacy it on significant it on mention the to And from of LHD. having kind And new we this life. parties script hard But matter didn't team the with really to we our brought back So very is we've

Manager. had posts Hawerkamp, I had the left to an about individual were for years we largest competitor be to company were work brought a there. think some but acquisition, and very to it, Lakeland's ago. and with to and we XX taking He on go Germany in November business. General there about able in the back back, him a for significant their worked saw Klaus been growth responsible He'd he started X, over He return,

XX% again, fiscal backlog So expect ship to of year. to XX% that we before the our end of

follow-up the it. the being longer your and And more bit services little to with through Got work on that sort Or the to you in of my your of bringing is, around into a see those way I that going geographic opportunity it opportunities? year? is can more something take of Is comprehensive next -- guess, fiscal reach. that

in business LATAM, LHD in of I we've I meet for greenfielding -- -- people. market. purchasing call, said Matt, I or together the sort actually already it that space. a this been that visit with example, to look out folks know So decontamination services case business a the our so that She's are think on begun to LATAM at I think is had in putting last in that Australia to that interacting -- to a Australian -- run leader

how the or Germany, is are will a we the seeing their at there's because this is significant protective I be us. I in don't Germany you fiscal that's be in gear really correctly. running rapidly there's this think I 'XX. who So what actually sure service incremental just leader going that liability have done associated to tell because can't this don't area contaminants on the do you, a to with that how in gains I'm much correctly priority important that for can doing it of both that tell this correctly, in becoming criminal future brigade commanders in it's to in it I are start and also learning particular, space fire point but business, into because making folks Europe, harm's way, tell And is you that those environment, need -- in protected. be getting can But in

to this for -- those we're So it's pure next out. us, running us and a area seize that, that year on a to point, at it's something we I be trying it a would or just start an is but can't give imperative growth are for I number know guesstimate you to opportunities.

question-and-answer reached the end have of We the session.

back to Now Jenkins the remarks. call turn over for I'll Mr. closing

Thank you, operator. Thank on safety. also your would joining thank us and lives you call. distributor all to I trusting like and us for customers today's worldwide our partners with for

team continue than unable assist. to the growth firm, as MZ to trust to we change enthusiasm our appreciate reach we we would I and heroes, more company our are please and customers to work for I happy continued to to hard and Group, granted. of your any never the questions initiatives strategic Our dedicated our during their want that on further who members take execute and this answer growth out our across quarter. for team we strategies. also from quarter, If thank Lakeland delivered commitment were our as continued IR this Lakeland significant today, be experience

time. may conference, today's you lines concludes and this participation. Thank And you at disconnect for your your this