An Eye on Earnings Report: Lakeland Industries, Inc. (NASDAQ: LAKE)

Lakeland Industries, Inc. (NASDAQ: LAKE) closed with gain of +1.15% to $13.200 . Recent traded volume was 2,117 million shares versus to it an average volume of 24,833 million shares. The company holds 8.12M million shares outstanding and market cap of 107.134M billion. The stock’s day range was recorded between a low of $13.050 and a high $13.300. The one year high of the company is $16.850 and the one year low is $12.200.

After the last closing session, the bid price was seen at 12.650 x 1000.The ask price was registered at 14.500 x 1100 . The ask price indicates the lower price that a seller or sellers are willing to receive for the security.

Lakeland Industries, Inc. (NASDAQ: LAKE) reported financial results for its fiscal 2019 first quarter ended April 30, 2018.

Net sales increased to $24.3M for the three months ended April 30, 2018 contrast to $23.0M for the three months ended April 30, 2017, a raise of 6.0%.  On a consolidated basis for the first quarter of fiscal 2019, domestic sales were $12.3M or 51% of total revenues and international sales were $12.0M or 49% of total revenues. This compares with domestic sales of $12.7M or 55% of the total, and internationals sales of $10.3M or 45% of the total in the same period of fiscal 2018.

Sales in the US modestly reduced from the previous year period primarily Because of planned revenue mix adjustments with selective fulfillment of lower margin disposable product orders and renewals. Of the Company’s six major product lines marketed in the US, disposables represent about 51% of total domestic sales.  In addition, the Company allocated certain production capacity to international orders over domestic orders given the mandate to focus on higher margin sales.  Additional production capacity is being brought online in new manufacturing facilities in India and Vietnam, which positions the Company to increase sales globally.

Among the Company’s larger international operations, sales to external consumers in China and to the Asia Pacific Rim increased to $13.8M from $10.5M in the previous year period.  This growth is attributable to higher overall volume which increased inter-company sales (eliminated in consolidation) and increased industrial activity in the region.  Canada sales increased $0.4M or 19.4% to $2.2M from $1.8M in the previous year period as that country continues to experience an oil and gas turnabout together with demand for turnout gear and other safety apparel. UK/Europe sales increased by $0.4M or 21% to $2.6M from $2.2M in the fiscal 2018 first quarter as new distributors placed stocking orders, particularly for new partners in Germany. Russia and  Kazakhstan sales combined for a raise in sales of $0.5M.

Gross profit increased $0.9M or 11.1% to $9.5M for the three months ended April 30, 2018, from $8.6M for the three months ended April 30, 2017.  Gross profit as a percentage of net sales increased to 39.0% for the three-month period ended April 30, 2018, from 37.3% for the three months ended April 30, 2017. The gross margin increase benefited from a mix of sales of higher margin products, including chemical suits and other woven products, and higher pricing implemented in the US and select international markets for key product lines as the quarter progressed.

Operating expense increased 16.5% from $6.1M for the three months ended April 30, 2017 to $7.1M for the three months ended April 30, 2018. Operating expense as a percentage of net sales was  29.1% for the three months ended April 30, 2018, essentially flat as contrast to 29.0% for the fourth quarter of fiscal 2018 and up from 26.5% for the first quarter of fiscal 2018.  The main factors for the higher operating expenses are the currency fluctuations in Latin America, Russia, and China, increases in salaries for additional sales personnel as the Company expands internationally and domestically, and increased expenses for freight costs and commissions based on higher sales volumes and new product development costs.

Operating income reduced to $2.4M for the three months ended April 30, 2018 from $2.5M for the three months ended April 30, 2017 Operating margins were 9.9% for the three months ended April 30, 2018, contrast to 10.8% for the three months ended April 30, 2017.

Income tax expense for the first quarter of fiscal 2019 was $0.5M, contrast with $0.7M in income tax expense for the previous year period.  The decrease in income tax expense reflects the impact of the 2017 Tax Cuts and Jobs Act and the associated lower corporate income tax rate, partially offset by foreign income taxes. Lakeland subsidiaries may be required to pay local taxes on certain country operations where those operations were profitable on a local basis. Cash paid for foreign subsidiary taxes in the first quarter of fiscal 2019 was $0.3M, contrast to $0.4M for the first quarter of fiscal 2018.

Net income for the three months ended April 30, 2018 was $1.9M or $0.23 per basic and diluted share, as contrast to net income of $1.7M or $0.24 per basic share and $0.23 per diluted share in the same period of fiscal 2018. The 9.1% increase in net income is primarily attributable to higher sales and gross margin, partially offset by increased operating expenses for the Company’s global growth initiatives that included additional sales and marketing spending.

Lakeland Industries, Inc.’s (NASDAQ: LAKE) has price-to-cash ratio of 6.56 and price to sale ratio of 1.10. The company net profit margin is 0.60% and gross profit margin is 38.20%. A look on the firm performance, its monthly performance is -3.58% and a quarterly performance of -6.63%. The stock price is moving down from its 20 days moving average with -0.41% and isolated negatively from 50 days moving average with -2.16%.

 

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