Lakeland(US:LAKE)2025-04-09 20:30Financial Data and Key Metrics Changes - Revenue for Q4 2025 grew by $15.4 million, or 49.3%, compared to Q4 2024, totaling $46.6 million [31] - For the full fiscal year 2025, revenues increased by $42.5 million, or 34.1%, reaching $167.2 million [31] - Consolidated gross margin increased by 420 basis points year-over-year from 35.9% to 40.1% in Q4 2025 [32][49] - Net loss for Q4 2025 was $18.4 million, or negative $2.42 per diluted share, compared to a net loss of $1 million, or negative $0.13 per diluted share, in Q4 2024 [32][39] - Adjusted EBITDA excluding FX for Q4 2025 was $6.1 million, an increase of $2.7 million, or 79.4%, compared to Q4 2024 [40][50] Business Line Data and Key Metrics Changes - Fire services product line sales increased by $14.7 million year-over-year, driven by $8.2 million from the LHD acquisition and organic growth of $2.6 million [34] - Disposable sales increased by $1.5 million, or 12%, primarily in the U.S. [34] - Organic gross margin percentage increased to 48.5% from 35.8% for Q4 2024, driven by a positive product mix [36][49] Market Data and Key Metrics Changes - Domestic sales for Q4 2025 were $18.3 million, or 39% of total revenues, while international sales were $28.3 million, or 61% of total revenues [35] - For the full fiscal year 2025, domestic sales were $60.4 million, or 36% of total revenues, and international sales were $106.8 million, or 64% of total revenues [42] - European revenue grew by $10.8 million, or 292%, to $14.5 million [55] Company Strategy and Development Direction - The company is focused on accelerating growth and margins within the global fire turnout gear and industrial PPE markets through strategic acquisitions [7] - Recent acquisitions have expanded the company's footprint in North America, Europe, Asia, Oceania, LATAM, and the Middle East [10] - The company aims to leverage its market position in fire protection premium brands and M&A to accelerate profitable growth in the higher margin fire protection sector [65] Management's Comments on Operating Environment and Future Outlook - Management acknowledges increasing tariff pressures and broader economic uncertainties but views these as opportunities to strengthen operations [20][22] - The company is well-positioned in recession-resistant sectors, providing confidence in its ability to weather near-term challenges [22] - For fiscal year 2026, the company expects revenue of $210 to $220 million and adjusted EBITDA of $24 to $29 million [63][64] Other Important Information - The company completed a $46 million public equity offering to improve its balance sheet and net debt ratio [13] - Goodwill impairment charges of $10.5 million were recorded for Eagle and Pacific Helmets, impacting net loss [32][67] - The company is implementing a company-wide ERP system to enhance operational efficiency [15] Q&A Session Summary Question: Guidance and Tariff Impact - Analyst inquired about the timing of guidance and potential tariff impacts on costs and revenue [79] - Management confirmed that guidance remains unchanged despite tariff uncertainties [80][81] Question: BodyTrack Strategy - Analyst asked about the future of BodyTrack and its sales strategy [84] - Management indicated plans to monetize BodyTrack through patent enforcement and a revised sales strategy [86] Question: Tariff Mitigation Strategies - Analyst questioned the challenges of moving manufacturing to the U.S. [92] - Management discussed exploring options in Mexico and India for manufacturing to mitigate tariff impacts [95][98]