Lakeland Industries Inc., a leading global manufacturer of industrial protective clothing for industry, municipalities, healthcare and to first responders on the federal, state and local levels, announced financial results for its second quarter and first half of fiscal year 2013 ended July 31, 2012. For all periods, the prior year financial results have been restated to reflect the Company's India glove manufacturing subsidiary as a discontinued operation.
Financial Results Highlights and Recent Company Developments
International revenues from continuing operations as a percentage of consolidated sales increased to 61.3% in the second quarter of FY13 from 47.6% in the second quarter of FY12 and 59.2% in the first quarter of FY13 Consolidated revenues were lower due to elimination of sales of DuPont products, stock shortage conditions and inefficiencies resulting from a facility relocation International sales of $14.4 million in the second quarter of FY13 increased by 17% from $12.3 million in the second quarter of FY12 and improved from $14.2 million in the first quarter of FY13 Cash balance of $6.5 million and bank debt of $18.2 million at July 31, 2012
Second Quarter Fiscal Year 2013 Financial Results
Net Sales: Net sales from continuing operations decreased $2.3 million, or 9%, to $23.5 million for the three months ended July 31, 2012, from $25.8 million for the three months ended July 31, 2011. The net decrease was due to a $4.5 million decrease in domestic sales. This reduction was partially offset by a $1.8 million increase in foreign sales.
US domestic sales of disposables decreased by $3.9 million, chemical suit sales decreased by $0.2 million, wovens decreased by $0.1 million and reflective sales decreased by $0.5 million.
The decrease in domestic sales was mainly due to the loss of DuPont product sales and, to a lesser extent, a shortage of certain products that management believes has been resolved (but may have continuing impact resulting from lost customers), and short-term operating inefficiencies resulting from a relocation of facilities from St. Joseph, MO to Decatur, AL and Mexico which resulted in additional lost sales.
The sales team continues to make progress in converting customers from DuPont's Tyvek to Lakeland branded products. While the Company's sales of Lakeland branded products show strong gains over the Lakeland branded product sales from the same period in the prior year, it will take time to rebuild the lost sales volume, for which there can be no assurance.
Domestic sales in China and to the Asia Pacific Rim remain strong with an increase of approximately $1.9 million or 23% for the second quarter of fiscal 2013 as compared with the same period in the prior year. UK sales increased by $1.0 million, or 69%. Chile and Argentina sales increased by 37% and sales in Brazil increased by $0.7 million or 16.7%. The increase in foreign sales is primarily due to increases in sales of high end chemical suits, FR (flame retardant) garments, and completion of some large contracts.
