Edit Symbol List
Enter up to 25 symbols separated by commas or spaces in the text box below. These symbols will be available during your session for use on applicable pages.
Don't know the stock symbol? Use the
Symbol Lookup tool.
Alphabetize the sort order of my symbols
Investing just got easier…
Sign up now to become a NASDAQ.com member and begin receiving instant notifications when key events occur that affect the stocks you follow.Access Now
Lakeland Industries, Inc. (LAKE)
Q1 2020 Earnings Conference Call
June 10, 2019 04:30 PM ET
Christopher Ryan - President
Charles Roberson - Chief Operating Officer
Conference Call Participants
Andrew Mali - Roth Capital
Mark Rosenkranz - Craig-Hallum
Pete Muckerman - Raymond James
Previous Statements by LAKE
» Lakeland Industries' (LAKE) CEO Christopher Ryan on Q4 2018 Results - Earning Call Transcript
» Lakeland Industries, Inc. (LAKE) CEO Christopher Ryan on Q3 2019 Results - Earnings Call Transcript
» Lakeland Industries, Inc. (LAKE) CEO Christopher Ryan on Q2 2019 Results - Earnings Call Transcript
At this time, it's my pleasure to turn the floor over to Mr. Christopher J. Ryan, President. Sir the floor is yours.
Thank you, and good afternoon to you all and thank you for joining us on our fiscal 2020 first quarter financial results conference call. I am joined here today with Lakeland's Chief Operating Officer, Charles Roberson. We are first going to discuss the status of operations on our financial results. Then the call will be opened up, so that we may respond to your questions.
Now onto the formal remarks. Our first quarter fiscal 2020 results show meaningful progress from the fourth quarter of last year, while setting the stage for important business decisions and continued execution toward achieving our growth objectives.
Most notable for quarterly performance sequentially, we did deliver an improvement in gross margin, a reduction in operating expenses, lower operating and net losses and a return to adjusted EBITDA profitability. The company continues to work toward the completion of the enterprise resource planning solution, or ERP restructuring, and business development on a global scale, to support our ERP installation, which largely commenced last year.
With the sequential performance measures providing perspective on the headway we have been making, we believe we are now past the most challenging aspect of our initiatives, although work remains to be done to fully capitalize on the many opportunities available in the markets in which we operate.
A critical component of our plan has included the implementation of an ERP. Today the ERP costs us $0.9 million for the technology suite, licensing and installation. There was an estimated $1.3 million in additional non-recurring expenses in fiscal 2019 relating to the installation and an estimated $0.1 million in first quarter of fiscal 2020 this quarter -- past quarter.
This does not include the business disruption, which is very difficult to quantify, but I can say that we believe it to be a material impact including the resignation of our Chief Financial Officer. We expect the domestic installation to be completed by the end of calendar 2019, with installation in our foreign subsidiaries to begin in the first half of fiscal 2020, beginning with our Mexico and Canada facilities. Thanks to our deep senior management bench, we have been able to drive forward in the face of these challenges.
In the absence of the CFO on today's call, here are some key financial performance data for the first quarter. Net sales for Q1 FY 2020 were $24.7 million, compared with $24.3 million in quarter one FY 2019 or last year and $25 million in Q4 FY 2019 or last quarter.
Gross profit for Q1 FY 2020 of $7.5 million compared with $9.5 million in Q1 FY 2019 or last year and $6.9 million in Q4 FY 2019 or last quarter. Since we are required to report all of our sales and earnings in USD, it should be no surprise that both these line items were hurt when translated back to USD from the approximately 10 material foreign currencies we deal in.
Gross margin as a percentage of net sales in Q1 FY 2020 was 30.6% compared to 30.90% in Q1 FY 2019 last year and 27.7% in Q4 FY 2019 or last quarter. Operating expenses of $7.9 million in Q1 FY 2020, up from $7.1 million in Q1 FY 2019 last year, but down from $8.4 million in Q4 FY 2019 or just last quarter.
Net loss of $465,000 or $0.06 a share – per basic share for the Q1 FY 2020 quarter compared with net income of $1.9 million, or $0.23 per basic share in Q1 FY 2019 last year and net loss of $1.9 million or $0.24 per share in Q4 FY 2019, or just last quarter. Adjusted EBITDA of $242,000 as compared to $2.1 million in Q1 FY 2019 and a loss of $932,000 in the last quarter. So what's really obvious here is that, we've picked up from last quarter in the first quarter. We are making some progress here.
Similar to the fourth quarter, the ERP system in the U.S. led to lower domestic sales and gross margins, due to order processing issues and the significant expense incurred to ensure to the extent possible that our customers received their shipments on time. This was particularly in the first quarter. The fact that our gross margins increased for the fourth quarter amid these challenges as well as pricing pressures in select markets and other macroeconomic concerns, demonstrates the potential for revenue growth and profitability expansion once conditions normalize.
On our year-end conference call, we mentioned that our investments in product development, quality control and positioning in the market are paying-off as evidenced by fiscal 2020 starting with the global order backlog of $10.5 million with U.S. backlog going from $5.5 million at the beginning of the fourth quarter and ending at $4 million –ending the year at $4 million.