Lakeland Industries Reports 16.3% Revenue Growth, Net Loss in Latest Quarter

Lakeland Industries, Inc. reported significant financial changes in its latest 10-Q filing for the quarter ending July 31, 2024. The company achieved net sales of $38.5 million, marking a 16.3% increase from $33.1 million in the same period of 2023. For the six months ended July 31, 2024, net sales reached $74.8 million, up from $61.8 million, representing a 21.0% increase. The growth was primarily driven by strong performance in the fire service product line, which saw an increase of $8.0 million, bolstered by recent acquisitions and organic growth.

Despite the increase in sales, the company faced challenges in profitability. Gross profit for the three months ended July 31, 2024, was $15.2 million, a 7.0% increase from $14.2 million in the prior year, but the gross profit margin decreased to 39.6% from 42.9%. Operating expenses surged by 61.5% to $16.8 million, leading to an operating loss of $1.6 million, compared to an operating profit of $3.7 million in the same quarter of 2023. For the six-month period, operating profit fell to $0.6 million from $5.7 million, with operating margins declining to 0.8% from 9.2%.

The net loss for the three months ended July 31, 2024, was $(1.4) million, a stark contrast to the net income of $2.5 million reported in the same quarter of the previous year. For the six months, net income decreased to $0.3 million from $3.8 million in 2023. The effective tax rate for the quarter was 23.4%, down from 32.7% in the prior year.

Strategically, Lakeland Industries has been active in expanding its portfolio through acquisitions. The company acquired LHD Group for $15.9 million on July 1, 2024, and Jolly Scarpe for $9.6 million on February 5, 2024. Additionally, it purchased Pacific Helmets for approximately $8.6 million on November 30, 2023. These acquisitions are expected to enhance the company’s offerings in protective gear, particularly in firefighting equipment.

As of July 31, 2024, Lakeland reported cash and cash equivalents of approximately $24.9 million, with working capital at about $98.2 million. The company has a secured revolving credit facility of $25.0 million, which can be increased to $30.0 million, and it remains in compliance with all financial covenants. The company also declared a quarterly cash dividend of $0.03 per share, totaling approximately $0.2 million, paid on August 22, 2024.