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Lakeland Industries, Inc. (NASDAQ:LAKE)
Q3 2018 Earnings Conference Call
December 15, 2017 10:30 AM ET
Christopher Ryan - Chief Executive Officer
Teri Hunt - Chief Financial Officer
Dave King - Roth Capital
Alex Fuhrman - Craig-Hallum Capital Group
Jeff Briggs - Singular Research
Peter Muckerman - Raymond James
Previous Statements by LAKE
» Lakeland Industries' (LAKE) CEO Christopher J. Ryan on Q2 2018 Results - Earnings Call Transcript
» Lakeland Industries' (LAKE) CEO Christopher Ryan on Q1 2018 Results - Earnings Call Transcript
» Lakeland Industries' (LAKE) CEO Christopher Ryan on Q4 2017 Results - Earnings Call Transcript
Before we begin, parties are reminded that statements made during this call contain forward-looking information within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements are all statements other than statements of historical facts, which reflects management’s expectations regarding future events and operating performance, and speaks only as of today, December 15, 2017.
Forward-looking statements are based on current assumptions and analysis made by the company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate under circumstances. These statements are subject to a number of assumptions, risks and uncertainties, and factored in the company’s filings with the Securities and Exchange Commission, general economic and business conditions, the business opportunities that may be presented to you and pursued by the company, changes in law or regulations and other factors, many of which are beyond the control of the company.
Listeners are cautioned that these statements are not guarantees of future performance and the actual results or developments may differ materially from those projected in any forward-looking statements. All subsequent forward-looking statements attributable to the company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.
At this time, I would like to introduce your host for this call, Lakeland Industries’ Chief Executive Officer, Christopher J. Ryan. Mr. Ryan, you may begin.
Good afternoon to you all, and thank you for joining our fiscal 2018 third quarter financial results conference call. We are going to provide opening statements on the status of operations and on our financial results. The call will then be opened up, so that we may respond to your questions.
Now on to my formal remarks. We are very pleased with our performance in the third quarter of fiscal 2018, which demonstrates the momentum of our core business while we gear up for accelerated growth and continued market share attainment.
Similar to the second quarter, we showed effective management in all facets of our operations, and improved our profitability in the third quarter as compared to the prior year. For the fourth consecutive quarter, we delivered very solid performance which resulted from the implementation of the diversified growth strategy.
Here are some of our more important aspects of our third quarter performance. Revenues continued to increase; we had sales growth in all major operating regions; our Amazon distribution strategy has gained meaningful traction; our gross margin, operating margin and net margin, all increased; our cash balance at the end of the quarter was up more than a 100% from the beginning of the year; subsequent to the end of the quarter, we paid down all of the $2.3 million of debt; new lower cost manufacturing operations are underway in India and Vietnam; new products and vertical markets are showing progress as part of our strategy for achieving permanent increases in our consolidated gross margin levels.
During the last call, I mentioned that in the more than 30 years that I have been involved with Lakeland, the company has never been better positioned and presented with more global opportunities than it is today. In the third quarter, we advanced our mission of fortifying our business for many years ahead and have positioned the company for meaningful growth in top and bottom-line results.
During the third quarter, with the backdrop of favorable trends, for our opening performance, and improving economies globally, we took decisive action to capitalize on the appreciation of our share price by raising over $10 million in net proceeds from the issuance of common stock. The offering proceeds along with our operating performance have enabled us to substantially bolster our financial position.
We have been very active in putting the offering proceeds to work. First as I mentioned, we eliminated the remaining high interest bank debt on our books. We have been hiring sales people and have continued to do invest in our information systems to accommodate anticipated growth, as well as to better respond to customer requirements anywhere in the world.
An Amazon Fulfillment platform has been developed for the U.S. operations and we have been very busy in building additional overseas manufacturing facility, as well as purchasing new equipment to increase our capacity and lower our cost base. The takeaway perspective investors should have on this spending is that it’s intended to drive growth today and far into the future.
Now I will provide additional color on our third quarter performance and address some of the initiatives to drive future growth in the sales and profitability.
In the third quarter, among the more mature markets for personal protective equipment, our sales in the U.S. continued to grow. This suggests we are attaining market share. We’ve talked in the past about our new product and new vertical market initiatives and this process has continued to pace.