Core Viewpoint - Glancy Prongay & Murray LLP has initiated an investigation into Lakeland Industries, Inc. regarding potential violations of federal securities laws affecting investors [1] Company Summary - Lakeland Industries, Inc. is under scrutiny for possible legal issues that may have led to financial losses for its investors [1] - The investigation is being conducted on behalf of investors who may have lost money on Lakeland's stock [1]

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Core Points - Lake Medical Industries experienced a significant pre-market drop of 22.7%, with shares priced at $11.6 [1] - The company reported a diluted net loss per share of $1.64 for Q3 of fiscal year 2025, contrasting sharply with analyst expectations of a profit of $0.23 per share and a previous year's earnings of $0.01 per share [1] - Due to various macroeconomic factors, the company has withdrawn its previously issued guidance for fiscal year 2026 and will no longer provide financial forecasts in the future [1]

Core Viewpoint - Lake Medical Industries (LAKE.US) experienced a significant pre-market decline of 22.7% to $11.6 following the announcement of a substantial earnings miss for Q3 of fiscal year 2025, with a diluted net loss per share of $1.64 compared to analyst expectations of a profit of $0.23 and a prior year earnings of $0.01 [1] Financial Performance - The company reported a diluted net loss per share of $1.64 for Q3 of fiscal year 2025, which is a significant deviation from analyst expectations of a profit of $0.23 [1] - The previous year's earnings were reported at $0.01 per share, indicating a substantial decline in performance year-over-year [1] Future Outlook - Due to various macroeconomic factors, the company has decided to withdraw its previously issued guidance for fiscal year 2026 and will not provide future financial guidance [1]

Core Insights - Lakeland Industries reported a quarterly loss of $0.7 per share, significantly missing the Zacks Consensus Estimate of $0.17, representing an earnings surprise of -511.76% [1] - The company posted revenues of $47.59 million for the quarter ended October 2025, which was 10.05% below the Zacks Consensus Estimate, compared to $45.76 million in the same quarter last year [2] - The stock has underperformed, losing approximately 41.3% year-to-date, while the S&P 500 has gained 16.4% [3] Financial Performance - Over the last four quarters, Lakeland Industries has only surpassed consensus EPS estimates once [2] - The current consensus EPS estimate for the upcoming quarter is $0.29 on revenues of $57.9 million, and for the current fiscal year, it is $0.50 on revenues of $213.5 million [7] Market Outlook - The company's earnings outlook will be crucial for future stock performance, with management's commentary expected to influence investor sentiment [4][6] - The Zacks Rank for Lakeland Industries is currently 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Security and Safety Services industry, to which Lakeland Industries belongs, is currently in the top 14% of Zacks industries, suggesting a favorable industry outlook [8]

Group 1 - The article does not provide any relevant content regarding the company or industry [1]

Financial Data and Key Metrics Changes - The company achieved net sales of $47.6 million, representing a 4% year-over-year increase driven by a 31% increase in fire services products [4][21] - Adjusted EBITDA, excluding FX, was $200,000, a decrease of $4.5 million, or 95%, compared to $4.7 million for the comparable year-ago period [5][22] - Adjusted gross profit as a percentage of net sales in the third quarter was 31.3%, down from 41.7% in the comparable year-ago period [5][21] - Net loss was $16 million, or $1.64 per basic and diluted earnings per share, compared to a net income of $100,000 or $0.01 per basic and diluted earnings per share for the third quarter of fiscal 2025 [22] Business Line Data and Key Metrics Changes - Sales from the fire services product line increased by $6 million year-over-year, driven by $3.4 million in sales from the recent Veridian acquisition and organic fire services growth of $3 million [23][29] - Adjusted gross profit for the third quarter was $14.9 million, a decrease of $4.2 million, or 22%, compared to $19.1 million for the third quarter of fiscal 2025 [24][27] - The industrial demand softened across several channels, with distributors reducing inventory and certain customers deferring purchases [19] Market Data and Key Metrics Changes - Revenue softness was visible across the U.S., Canada, Latin America, and parts of EMEA, with North America facing challenges and Latin America coming in below plan due to macroeconomic conditions [10][29] - U.S. revenue decreased 3% to $15 million from $15.4 million, driven by declines in the industrial business due to tariff uncertainty [29] - European revenue, including Eagle, Jolly, and the recently acquired LHD business, increased 6% to $15.2 million [29] Company Strategy and Development Direction - The company is focused on recent acquisition synergies, increasing market share within the fragmented $2 billion fire protection sector, and growing the industrial products business [4] - The strategic acquisitions of California PPE and Arizona PPE expanded the company's global fire footprint into the U.S. personal protective equipment market [8] - The company plans to maintain a focus on operating and manufacturing efficiencies to deliver higher margins and improve free cash flow [36][37] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of tariff uncertainty, inflation effects, and associated mitigation strategies on performance [10] - The company remains optimistic about underlying demand signals, including a robust global fire tender pipeline and signs of pent-up demand across nearly every region [14] - Management has withdrawn formal guidance and is shifting to a more disciplined operating model focused on measurable execution, cash generation, and transparency [12] Other Important Information - The company completed a $6.1 million sale and partial leaseback of its Decatur, Alabama warehouse property, resulting in a gain of $4.3 million [9] - Inventory at the end of Q3 was $87.9 million, down from $90.2 million at the end of Q2 fiscal year 2026 [11][32] - The company has suspended its quarterly cash dividend to reinvest profits into growth opportunities [32] Q&A Session Summary Question: What makes the $38 million fire service tenders high probability? - Management indicated that high probability is based on being the incumbent, competitor struggles, multiple-brand strategy, and strong relationships with fire departments [42][44] Question: Can margins recover through higher absorption or production levels? - Management confirmed that recovery is linked to achieving full capacity and operating leverage, with a shift in product mix affecting margins [48][49] Question: What is the status of certification delays? - Management noted that certification delays are due to a backlog at certification agencies, affecting all manufacturers [57][70] Question: How are pricing opportunities being addressed? - Management is implementing annual pricing increases strategically across different business segments while managing inventory levels [62][64]

Financial Data and Key Metrics Changes - Net sales for Q3 2026 were $47.6 million, a 4% year-over-year increase, driven by a 31% increase in fire services products [4][21] - Adjusted EBITDA, excluding FX, was $200,000, a decrease of $4.5 million, or 95%, compared to $4.7 million for the same period last year [5][24] - Adjusted gross profit as a percentage of net sales decreased to 31.3% from 41.7% in the comparable year-ago period [5][23] - The net loss for the quarter was $16 million, or $1.64 per share, compared to a net income of $100,000, or $0.01 per share, for Q3 2025 [21][22] Business Line Data and Key Metrics Changes - Fire services revenue increased by $6 million year-over-year, driven by $3.4 million in sales from the Veridian acquisition and organic growth of $3 million [22][27] - Adjusted gross profit for the fire services segment decreased due to lower sales, higher product costs, and tariffs [23][25] - Industrial demand softened across several channels, with distributors reducing inventory and certain customers deferring purchases [17][18] Market Data and Key Metrics Changes - Domestic sales were $19.2 million, representing 40% of total revenues, while international sales were $28.4 million, accounting for 60% of total revenues [22] - Sales in Latin America decreased from $5 million to $4.2 million due to political uncertainty affecting purchase decisions [28] - Sales in Asia decreased 19% year-over-year from $3.6 million to $2.9 million [28] Company Strategy and Development Direction - The company is focused on expanding its market share in the fragmented $2 billion fire protection sector and growing its industrial products business [4][7] - Strategic acquisitions of California PPE and Arizona PPE are expected to enhance the North American service segment of the global fire services market [7][8] - The company plans to navigate macroeconomic challenges while expanding top-line revenue in fire services and industrial verticals [33][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of tariff uncertainty, inflation, and supply chain costs on revenue and gross margin [9][12] - The company remains optimistic about long-term demand signals and expects headwinds to ease as it moves into calendar year 2026 [12][35] - Management has withdrawn formal guidance and is shifting to a more disciplined operating model focused on measurable execution and cash generation [11][13] Other Important Information - The company completed a $6.1 million sale and partial leaseback of its Decatur, Alabama warehouse, resulting in a gain of $4.3 million [8] - Inventory at the end of Q3 was $87.9 million, down from $90.2 million at the end of Q2 [10][31] - The company has suspended its quarterly cash dividend to reinvest profits into growth opportunities [31] Q&A Session Summary Question: What makes the $38 million fire service tenders high probability? - The company believes these tenders are high probability due to existing relationships with fire departments, competitor struggles, and being written into specifications [37] Question: What is the status of certification delays? - Certification delays are due to a backlog at certification agencies, affecting all manufacturers, with no further delays expected [44] Question: How is the company addressing pricing opportunities? - The company is implementing annual pricing increases strategically across fire and industrial segments while managing competitive pressures [46][48]

Financial Performance - Net sales for the three months ended October 31, 2025, were $47.6 million, an increase of $1.8 million or 4.0% compared to $45.8 million for the same period in 2024[126]. - Net sales for the nine months ended October 31, 2025, were $146.8 million, an increase of 21.8% from $120.6 million for the same period in 2024, driven by acquisitions and organic growth[133]. - Net loss for the three months ended October 31, 2025, was $(16.0) million, compared to net income of $0.1 million for the same period in 2024[132]. Gross Profit and Operating Loss - Gross profit for the three months ended October 31, 2025, was $14.1 million, a decrease of $4.5 million or 23.9% compared to $18.6 million for the same period in 2024, with gross profit as a percentage of net sales decreasing to 29.7% from 40.6%[127]. - Gross profit for the nine months ended October 31, 2025, was $48.6 million, a decrease of $1.4 million or 2.8% from $50.0 million in 2024, with gross profit margin dropping to 33.1% from 41.4%[134]. - Operating loss for the nine months ended October 31, 2025, was $(10.3) million, compared to operating income of $1.4 million for the same period in 2024, resulting in an operating margin of (7.0%)[138]. Operating Expenses - Operating expenses increased by $2.3 million or 13.1% to $20.1 million for the three months ended October 31, 2025, primarily due to acquisitions and increased stock-based compensation[128]. - Operating expenses increased by $11.1 million or 22.8% to $59.6 million for the nine months ended October 31, 2025, with operating expenses as a percentage of net sales rising to 40.6%[135]. Income Tax Expense - Income tax expense for the three months ended October 31, 2025, was $13.7 million, significantly higher than $0.1 million for the same period in 2024, resulting in an effective tax rate of (597.9%)[131]. - Income tax expense for the nine months ended October 31, 2025, was $7.3 million, compared to $0.1 million for the same period in 2024[139]. Acquisitions - The company acquired Arizona PPE for approximately $4.1 million and California PPE for a combination of $2.4 million in cash and $3.3 million in stock in September 2025[118][119]. - The company also acquired Veridian for approximately $26.1 million in December 2024, which had an annual revenue of approximately $21.0 million[120]. Cash Flow and Liquidity - Cash and cash equivalents as of October 31, 2025, were approximately $17.2 million, with a decrease of $0.3 million from January 31, 2025[142]. - Cash used in operations was $17.6 million due to a net loss of $(19.1) million and an increase in working capital of $7.9 million[144]. - The Company expects its current cash, cash equivalents, and borrowing capacity to meet projected operating and investing requirements for at least the next twelve months[145]. Sales by Region - Net sales attributable to customers outside the U.S. were $28.4 million for the three months ended October 31, 2025, compared to $30.4 million for the same period in 2024[123]. - Sales in Russia accounted for approximately 2.2% of consolidated sales for the nine months ended October 31, 2025, with no significant sales in Ukraine[125]. Cost Challenges - The company is facing increased costs due to tariffs and higher manufacturing costs, which are expected to continue affecting operating results and margins[124].