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 fiscal 2015 first quarter ended April 30, 2014.
For financial reporting presentation purposes, the operating results in Brazil are excluded from many of the statements in this announcement because the Company's commercial lender has excluded Brazil from most covenant calculations as well as other related factors and due to the restructuring of those operations which has resulted in significant losses for the past two years that distorts analysis for the balance of the global businesses.
Financial Results Highlights -- First Quarter Fiscal 2015 and Recent Company Developments
Sales worldwide increased to $23.5M or 8.1% from $21.7M last year. Excluding Brazil, sales increased to $21.8M or 9.1% this year from $20.0M last year.
Sales growth achieved in China/Asia Pacific, UK, Latin America (excluding Brazil), and North America.
Gross margin worldwide was 30.2%, compared to 28.0% last year. Excluding Brazil, gross margin increased from 29.0% last year to 29.9% this year.
Operating expenses worldwide increased by $0.2 million and decreased as a percent of sales to 27.7% from 29.1% last year. Operating expenses for Lakeland worldwide, excluding Brazil, increased by $558,000. SGA as a percent of sales, excluding Brazil, increased from 25.5% to 26.0%.
Operating income was $582K vs. a loss of $237K last year. Excluding Brazil, operating income was $858K this year vs. $692K last year.
Brazil Q1 operating loss was reduced to $276K this year vs. $929K last year.
Adjusted EBITDA worldwide increased 124% to $1.6M vs. $0.7M last year. Excluding Brazil, Adjusted EBITDA was $1.8M this year vs. $1.5M last year.
Net loss of $(0.0) million, $(0.0) per share vs. $(0.8) million loss, $(0.16) per share, last year.
Christopher J. Ryan. President and Chief Executive Officer of Lakeland Industries, stated, "The Company's business rationalization and transition is nearly complete as we are experiencing solid growth internationally and domestically. We have made the necessary investments to grow our sales channels and enhance our product development, while reducing our cost structure and modifying operations for improved leverage.
Key initiatives that have impacted our performance in the quarter are the residual effects from the sale of a business unit in China in Q2 last fiscal year, the relocation of certain manufacturing to Mexico and the relocation of our facility in Pennsylvania. As a result, consolidated worldwide Adjusted EBITDA increased by 124% from last year.
"Adjusted EBITDA reached the highest level in three years – from when we first encountered challenges in Brazil. As previously disclosed, we believe the turnaround of Brazil to be on schedule and with the additional financing options we are exploring, we anticipate a reversal of losses year to date and for Brazil to finish FY15 at or near breakeven. In the first quarter of fiscal 2015, Brazil was close to breakeven on an Adjusted EBITDA basis with only a modest reduction in sales from last year.
"The operating loss in the quarter for Brazil was reduced by 70% from last year. We are beginning to benefit from the growth in most of our businesses around the world along with improvements in Brazil as our consolidated operating profit increased by nearly 340% to a $580,000 profit from a loss of $240,000 in the prior year. Global growth trends are positively impacting Lakeland Industries and we are in the best position in years to drive improved operating performance."
