Lakeland(LAKE) - 2025 Q4 - Annual Results

Financial Performance - Q4'25 net sales reached a record $46.6 million, a 49.3% increase from $31.2 million in Q4'24, driven by a 226% increase in Fire Services products[1] - FY 2025 net sales increased 34.1% to $167.2 million compared to $124.7 million in FY 2024[1] - Q4'25 gross profit rose 67.0% to $18.7 million, with a gross margin of 40.1%, up from 35.9% in Q4'24[1][4] - Q4'25 adjusted EBITDA excluding FX was $6.1 million, a 79.4% increase from $3.4 million in Q4'24[1][4] - Net sales for Q4 fiscal 2025 were $46.6 million, a 49.3% increase from $31.2 million in Q4 fiscal 2024, driven by $12.1 million from acquisitions and $3.3 million in organic sales growth[24] - For fiscal year 2025, net sales were $167.2 million, a 34.1% increase from $124.7 million in fiscal year 2024, with Fire Services revenue increasing by 137.7%[30] - Adjusted EBITDA for the year was $15.0 million, with an adjusted EBITDA margin of 9.0%, compared to $12.0 million and 9.6% in 2024[56] Revenue Guidance and Projections - The company introduced FY 2026 revenue guidance of $210 million to $220 million and adjusted EBITDA excluding FX of $24 million to $29 million[1] - The company expects fiscal year 2026 revenue to be between $210 million and $220 million, with Adjusted EBITDA excluding FX projected to be between $24 million and $29 million[46][48] Operating Expenses and Losses - Operating expenses rose to $18.8 million in Q4 fiscal 2025, a 29.7% increase from $14.5 million in Q4 fiscal 2024, leading to an operating loss of $10.7 million compared to a loss of $3.3 million in the prior year[27] - Net loss for Q4 fiscal 2025 was $18.4 million, or ($2.42) per diluted share, compared to a net loss of $1.0 million, or ($0.13) per diluted share, in Q4 fiscal 2024[28] - The company reported a net loss of $18.1 million for the year, compared to a net income of $5.4 million in 2024, resulting in a diluted loss per share of $2.43[74] Asset and Liability Changes - Cash and cash equivalents were $17.5 million as of January 31, 2025, reflecting a decrease of $7.7 million from the previous year, while working capital increased by $18.4 million[36] - Total current assets increased to $136,531,000 in 2025 from $101,505,000 in 2024, representing a 34.5% growth[76] - Total liabilities rose to $65,905,000 in 2025 from $30,295,000 in 2024, marking a 117.5% increase[77] - Cash and cash equivalents decreased to $17,476,000 in 2025 from $25,222,000 in 2024, a decline of 30.9%[78] Impairments and Charges - The company recognized a $7.6 million impairment loss related to its investment in Bodytrak, which has faced ongoing financial difficulties[43] - The company incurred goodwill impairment charges of $10.5 million and impairment of equity method investment of $7.6 million during the year[74] Growth and Market Strategy - The acquisition of Veridian contributed $1.9 million in revenue during Q4'25, with integration progressing well[1][18] - The company is focused on new M&A opportunities in the fire suit rental and decontamination services market to consolidate the fragmented fire market[1][23] - Management expects continued growth and is focusing on strategic acquisitions and market expansion to enhance operational performance[72] Inventory and Receivables - Accounts receivable increased to $27,607,000 in 2025 from $19,169,000 in 2024, reflecting a 44.2% increase[76] - Inventories surged to $82,739,000 in 2025 from $51,250,000 in 2024, a rise of 61.5%[76] Other Financial Metrics - Organic revenue for Q4'25 increased 11% to $33.5 million, reflecting strong growth in the U.S., Canada, and Europe[1][16] - Organic revenue for the year was $133.0 million, an increase of 7.0% from $123.6 million in 2024[57] - The adjusted EBITDA excluding foreign exchange effects was $17.4 million, with an adjusted EBITDA excluding FX margin of 10.4%[57] - Secondary stock offering proceeds contributed $42,626,000 to financing activities in 2025, with no such proceeds reported in 2024[78]