Lakeland(US:LAKE)2023-06-06 16:00PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Presents unaudited condensed consolidated financial statements, including operations, balance sheets, cash flows, and detailed notes for Q1 FY23 and Q1 FY22 Condensed Consolidated Statements of Operations | Metric | Three Months Ended April 30, 2023 ($000s) | Three Months Ended April 30, 2022 ($000s) | | :----------------------- | :--------------------------------------- | :--------------------------------------- | | Net sales | 28,700 | 27,278 | | Cost of goods sold | 16,256 | 16,222 | | Gross profit | 12,444 | 11,056 | | Operating expenses | 10,506 | 9,607 | | Operating profit | 1,938 | 1,449 | | Income before taxes | 1,861 | 1,414 | | Income tax expense | 541 | 285 | | Net income | 1,320 | 1,129 | | Basic EPS | $0.18 | $0.15 | | Diluted EPS | $0.18 | $0.14 | Condensed Consolidated Statements of Comprehensive Income (Loss) | Metric | Three Months Ended April 30, 2023 ($000s) | Three Months Ended April 30, 2022 ($000s) | | :------------------------------ | :--------------------------------------- | :--------------------------------------- | | Net income | 1,320 | 1,129 | | Foreign currency translation adjustments | (718) | (760) | | Comprehensive income | 602 | 369 | Condensed Consolidated Balance Sheets | Metric | April 30, 2023 ($000s) | January 31, 2023 ($000s) | | :-------------------------- | :--------------------- | :--------------------- | | Cash and cash equivalents | 26,021 | 24,639 | | Total current assets | 107,942 | 104,982 | | Total assets | 145,094 | 142,327 | | Total current liabilities | 20,533 | 17,988 | | Total liabilities | 24,956 | 22,337 | | Total stockholders' equity | 120,138 | 119,990 | Condensed Consolidated Statements of Stockholders' Equity | Change in Equity | Three Months Ended April 30, 2023 ($000s) | Three Months Ended April 30, 2022 ($000s) | | :----------------------- | :--------------------------------------- | :--------------------------------------- | | Net Income | 1,320 | 1,129 | | Other comprehensive loss | (718) | (760) | | Dividends | (246) | - | | Stock-based compensation | 407 | 407 | | Treasury stock purchased | (276) | (406) | Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended April 30, 2023 ($000s) | Three Months Ended April 30, 2022 ($000s) | | :------------------------- | :--------------------------------------- | :--------------------------------------- | | Operating activities | 3,670 | 1,911 | | Investing activities | (690) | (2,356) | | Financing activities | (1,151) | (1,084) | | Effect of exchange rate changes | (447) | (336) | | Net increase (decrease) in cash | 1,382 | (1,865) | | Cash and cash equivalents at end of period | 26,021 | 50,854 | Notes to Condensed Consolidated Financial Statements 1. Business - Lakeland Industries, Inc. manufactures and sells industrial protective clothing and accessories globally, serving over 1,600 distributors and end-users across various industries and governmental agencies23 - The company's products are sold in more than 50 countries, with significant sales in China, the European Economic Community, Canada, Chile, Argentina, Russia, Kazakhstan, Colombia, Mexico, Ecuador, India, Middle East, and Southeast Asia23 2. Basis of Presentation - The condensed consolidated financial statements are unaudited and include normal recurring adjustments, with intercompany accounts and transactions eliminated24 - Results are not necessarily indicative of the full fiscal year ending January 31, 2024, and should be read in conjunction with the audited consolidated financial statements from the most recent Form 10-K24 3. Investments and Acquisitions - Lakeland acquired 100% of Eagle Technical Products Limited for $10.5 million in December 2022, enhancing its fire and industrial protective apparel portfolio and expanding sales in the Middle East and Europe3233 - The estimated earnout payment for the Eagle acquisition was reduced by $0.5 million in Q1 FY24, as Eagle did not meet the revenue threshold for the period May 1, 2022, through April 30, 20233435 - The company recognized losses of $0.1 million and $27,000 for the three months ended April 30, 2023, and 2022, respectively, as its share of Bodytrak's net loss, accounted for under the equity method29 Pro forma combined financial information (Unaudited) | (in millions, except per share amount) | Quarter Ended April 30, 2023 | Quarter Ended April 30, 2022 | | :------------------------------------- | :--------------------------- | :--------------------------- | | Net sales | $28.7 | $28.2 | | Net income | $1.3 | $1.1 | | Basic earnings per share | $0.18 | $0.15 | | Diluted earnings per share | $0.18 | $0.15 | 4. Inventories | Inventory Component | April 30, 2023 ($000s) | January 31, 2023 ($000s) | | :-------------------- | :--------------------- | :--------------------- | | Raw materials | 29,473 | 29,036 | | Work-in-process | 992 | 952 | | Finished goods | 32,378 | 32,855 | | Excess and obsolete adjustments | (4,947) | (4,668) | | Total Inventories | 57,896 | 58,176 | 5. Goodwill and Intangible Assets, Net | Intangible Assets | Amount ($000s) | | :------------------------ | :------------- | | Balance at February 1, 2023 | 6,042 | | Amortization expense | (102) | | Balance at April 30, 2023 | 5,940 | - There were no material changes to goodwill during the quarter ended April 30, 202341 6. Contract Advances | Contract Liability Activity | Amount ($000s) | | :-------------------------- | :------------- | | Contract liability – January 31, 2023 | 1,627 | | Increases to contract liability | 212 | | Decreases to contract liability | (500) | | Contract liability – April 30,