Hot Move to Watch: Lakeland Industries, Inc. (NASDAQ:LAKE)

On Sep 13 2019, Lakeland Industries, Inc. (NASDAQ:LAKE) shares price traded between $11.42 and $12.00 during the last trading session above/below with +3.30% at $11.88. The shares recorded a trading volume 10,366 shares as compared to its average volume of 26,282 shares.

Lakeland Industries, Inc. (LAKE) recently reported financial results for its fiscal 2020 second quarter ended July 31, 2019.

Fiscal 2020 Second Quarter Financial Results Highlights and Recent Developments

  • Net sales for Q2FY20 of $27.5M, contrast with Q2FY19 of $25.6M and Q1FY20 of $24.7M
  • Gross profit for Q2FY20 of $10.4M, contrast with Q2FY19 of $9.2M and Q1FY20 of $7.6M
  • Gross margin as a percentage of net sales in Q2FY20 was 37.9%, contrast to 35.7% in Q2FY19 and 30.6% in Q1FY20
  • Operating expenses of $7.8M in Q2FY20, contrast with $7.5M in Q2FY19 and $7.9M in Q1FY20
  • Operating profit of $2.6M in Q2FY20 increased from $1.6M in Q2FY19 and an operating loss of $(0.3)M in Q1FY20
  • Net income of $1.4M in Q2FY20, contrast with net income of $1.0M in Q2FY19 and a net loss of $(465,000) in Q1FY20
  • Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA)* of $2.6M, as contrast to $2.1M in Q2FY19 and $269,000 in Q1FY20
  • Capital expenditures for fiscal 2020 second quarter were $0.4M as contrast with about $1.0M in the fiscal 2019 period
  • Cash of $9.1M at end of Q2FY20, down from $12.8M at end of fiscal 2019, primarily resulting from increased inventories which reflect higher overall sales volume, the scaling up of manufacturing activities in Vietnam, and fulfilment of orders that had been backlogged Because of previous delays in connection with ERP implementation
  • Total debt was $1,566,000 at end of Q2FY20, up from $1,319,000 at end of fiscal 2019
  • 9,200 shares were repurchased during the three-month period ended July 31, 2019

Fiscal 2020 Second Quarter Financial Results

Net sales were $27.5M for the three months ended July 31, 2019, as contrast to $25.6M for the three months ended July 31, 2018 and $24.7M for the three months ended April 30, 2019. On a consolidated basis for the second quarter of fiscal 2020, domestic sales were $14.4M or 53% of total revenues and international sales were $13.0M or 47% of total revenues. This compares with domestic sales of $13.4M or 52% of the total and internationals sales of $12.3M or 48% of the total in the same period of fiscal 2019.

The Company experienced sales growth domestically, benefiting from easing of earlier delivery challenges associated with the ERP implementation, as well as in all operating regions in the Americas not including Mexico. Sales in Mexico were lower Because of a large, recurring consumer offer for FR (fire retardant) garments that was before won and filled but has not been republished yet this year. Foreign exchange currency translations negatively influenced sales in the UK/Europe, Canada, and China as stated on a consolidated basis in US dollars.

Gross profit of $10.4M for fiscal 2020 second quarter increased from $9.2M for the same period of the previous year and from $7.6M in the first quarter of fiscal 2020. Gross profit as a percentage of net sales was 37.9% for fiscal 2020 second quarter, up from 35.7% a year ago and importantly higher than 30.6% stated in the first quarter of fiscal 2020. Gross margin in dollars and as a percentage of sales benefited from higher volume which in part resulted from easing of ERP implementation issues, a more favorable mix of higher margin product sales, and improved contributions from the balancing of manufacturing between higher cost per unit and more efficient processing in China to lower cost but less efficient processing in Vietnam including substantial start-up expenses.

LAKE has price-to-cash ratio of 10.12 and price to sale ratio of 0.91. The company net profit margin is -0.50% and gross profit margin is 32.80%. A look on the firm performance, its monthly performance is 10.31% and a quarterly performance of -0.75%.

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