Q4 2024 Lakeland Industries Inc Earnings Call

Operator: Good day, and welcome to the Lakeland Industries Fiscal 2024 Fourth Quarter Financial Results Conference Call. All lines have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation.

Good day and welcome to the Lakeland Industries fiscal 2020 for fourth quarter financial results Conference call.

All lines have been placed on a listen only mode and the floor will be open for your questions and comments following the presentation.

Operator: During today's call, we will make statements relating to our goals and objectives for future operations, financial and business trends, business prospects, and management's expectations for future performance that constitute forward-looking statements under federal securities laws. Any such forward-looking statements reflect management expectations based upon currently available information and are not guarantees of future performance and involve certain risks and uncertainties that are more fully described in our SEC filings. Our actual results, performance, or achievements may differ materially from those expressed in or implied by such forward-looking statements. We undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this call.

During today's call, we will make statements relating to our goals and objectives for future operations financial and business trends business prospects and management's expectations for future performance that constitute forward looking statements under federal Securities laws.

Any such forward looking statements reflect management expectations based upon currently available information and are not guarantees of future performance and involve certain risks and uncertainties that are more fully described in our S. E C filings.

Our actual results performance or achievements may differ materially from those expressed in or implied by such forward looking statements.

We undertake no obligation to update or revise any forward looking statements to reflect events or developments. After the date of this call.

Operator: During today's call, we will discuss financial measures derived from our financial statements that are not determined in accordance with U.S. GAAP, including adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA excluding FX, adjusted EBITDA excluding FX margin, and gross margins excluding inventory adjustments. A reconciliation of each of the non-GAAP measures discussed on this call to the most directly comparable GAAP measure is presented in our At this time, I would like to introduce you to your host for this call, Lakeland Industries Acting President and Chief Executive Officer and Executive Chairman, Jim Jenkins. Mr. Jenkins, the floor is yours.

During today's call, we will discuss financial measures derived from our financial statements that are not determined in accordance with U S GAAP, including adjusted EBITDA adjusted EBITDA margin adjusted EBITDA, excluding FX adjusted EBITDA, excluding FX margin and gross.

Margins, excluding inventory adjustments.

A reconciliation of each of the non-GAAP measures discussed on this call to the most directly comparable GAAP measure is presented in our earnings release.

At this time I would like to introduce you to your host for this call Lakeland industries, acting President and Chief Executive Officer, and Executive Chairman, Jim Jenkins, Mr. Jenkins the floor is yours.

James M. Jenkins: Thank you, operator. Good morning, and thank you all for joining us for our fourth quarter fiscal 2024 earnings. First, I'd like to start by thanking customers and distributor partners around the world for trusting us with your lives. Our mission at Lakeland is to protect the world's workers, first responders, and communities by providing quality, protective solutions for the most critical situations. Our customers are heroes, and we never take that trust for granted.

James M. Jenkins: Thank you operator.

And thank you all for joining us for our fourth quarter fiscal 2024 earnings call.

James M. Jenkins: First I would like to start by thanking customers and distributor partners around the world for trusting US with your lives and safety are missing at Lakeland is to protect the world's workers first responders and communities by providing quality protective solutions for the most critical situations.

James M. Jenkins: Our customers are heroes, and we never take that trust for granted.

James M. Jenkins: I also want to thank our Lakeland team members across the company for their continued commitment and enthusiasm as we further deliver on our strategic initiatives this quarter. Our physical fourth quarter and our activities since January 31st have been very exciting and eventful as we continue to execute our previously communicated strategies and position Lakeland for profitable growth. I appreciate all the hard work put in by our dedicated employees.

Speaker Change: I also want to thank our team.

Team members across the company for their continued commitment and enthusiasm as we further delivered on our strategic initiatives this quarter.

Speaker Change: Our physical fourth quarter and our activity since January 31 have been very exciting and eventful as we continued to execute our previously communicated strategies and positioning <unk> for profitable growth into the future.

Speaker Change: I appreciate all the hard work put in by our dedicated team.

James M. Jenkins: We will talk more about those results and initiatives during this call. Our fiscal year 2024 was a good year for Lakeland, but also a great one. We are excited about the progress we are making and the work that lies ahead as we take Lakeland. Before beginning my comments about the business, I'd like to provide a brief update on our ongoing CEO search. Our board has been methodical and deliberate in its vetting and selection process for a leader who will continue to drive our business strategy and culture.

Speaker Change: We will talk more about those results and initiatives during this call.

Speaker Change: Our fiscal year 2024, it was a good year for Lakeland, but also a year of great change. We are excited about the progress, we're making and the work that lies ahead as we takeaway gone to new Heights.

Speaker Change: Before beginning my comments about the business I would like to provide a brief update on our <unk>.

Speaker Change: Ongoing CEO search.

Speaker Change: Our board has been methodical and deliberate and its vetting and selection process for a leader who will continue to drive our business strategy and culture Lakeland.

James M. Jenkins: Lakeland has a solid foundation in place with an exciting runway for growth, and the board and I expect to be in a position to make an announcement in our second fiscal year. As we discussed in our previous call, our team is doing an excellent job of executing our strategic plan of creating a high performance culture driven by our corporate values. We are investing resources in high-growth geographies and product segments, including building a premier global firebrand through product and marketing. We are also working to drive profitable growth in our other strategic product lines through product development, strategic pricing, channel diversification, and operations optimization. Finally, as we will discuss more, we are acquiring companies that improve Lakeland's competitive advantage in focused markets. On that front, we took a significant leap forward with the completion of our Pacific Helmets acquisition, which closed in Q4, and Jolly Scarf A Boots, which closed in early February.

Speaker Change: <unk> has a solid foundation in place with inside exciting runway for growth and the board and I expect to be in a position to make an announcement in our second fiscal quarter.

Speaker Change: As we discussed in our previous call. Our team is doing an excellent job of executing our strategic plan.

Speaker Change: <unk> high performance.

Speaker Change: Culture, driven by our corporate values, we are investing resources in high growth geographies and product segments, including building a premier global firebrand through product and marketing enhancements. We are also working to drive profitable growth and our other strategic product lines through product development strategic pricing channel diversification and operations optimization.

Speaker Change: Finally, as we will discuss more we're acquiring companies that improve <unk> competitive advantage in focused markets.

Speaker Change: On that front, we took a significant leap forward with the completion of our Pacific helmets acquisition, which closed in Q4, and Jollies Scarpa boots, which closed in early February. We also recently announced the signing of an agreement to acquire LHC group of Germany's by our service business.

James M. Jenkins: We also recently announced the signing of an agreement to acquire LHD Group of Germany's fire service business, which we expect to close in late May 2020, along with our Pacific Helmets acquisition, and the JALI acquisition. Lakeland's head-to-toe fire product offering strengthens our geographic diversity, presents exciting cross-selling opportunities, and offers global certifications across Lakeland's existing sales. Dolly Scarpay manufactures and sells a premium food product line with a global reputation for safety, design, and innovation, and we are excited to add their product to the Lakeland family.

Speaker Change: Which we expect to close in late May 2024.

Speaker Change: Along with our Pacific helmets acquisition, the <unk> acquisition completes <unk> head to toe fire product offerings strengthens our geographic diversity and presents exciting cross selling opportunities with global certifications across <unk> existing sales and distribution channels.

Speaker Change: <unk> manufactures and sells a premium leads product line with a global reputation for safety and design design and innovation and we're excited to add the products to the Lakeland family.

James M. Jenkins: LHD's fire and rescue offerings give us another premium product portfolio for fire services that complements our EGLE technical products and new Pacific and Jolly offers. Additionally, the LHD care service offerings provide us with attractive recurring revenues and growth margins that Lakeland will work to leverage. These acquisitions reflect our commitment to executing and accelerating the pace of our small, strategic, and quick M&A strategy. We still have a very attractive SSQ acquisition pipeline, and we continue to search for opportunities that further position Lakeland to execute our broad growth strategies. We expect to continue investing strategically to broaden and diversify Lakeland's range of products and end markets. I trust everyone has had the opportunity to review the press release and Q4 and full year earnings stack we published last week. I encourage you to follow along in Irming's presentation as Roger and I review our results.

Speaker Change: <unk> fire and rescue offerings give us another premium product portfolio for fire services that complements our eagle technical products, and new Pacific and Jolly offerings. Additionally, LHC care service offerings provide us with attractive recurring revenue streams and gross margins that we will work to leverage and expand.

Speaker Change: These acquisitions reflect our commitment to executing and accelerating the pace of small strategic and quick M&A strategy <unk> Q.

Speaker Change: We still have a very attractive <unk> assets acquisitions pipeline and we continue to search for opportunities that further position Lakeland to execute our broad growth strategies, we expect to continue investing strategically to broaden and diversify our <unk> range of products and end markets.

Speaker Change: I Trust, everyone has had the opportunity to review the press release in Q4 and full year earnings deck. We published last evening I encourage you to follow along in the earnings presentation as Roger and I review our results.

Speaker Change: Looking at our fourth quarter and full year results, our net sales for the fourth quarter of fiscal 2024 increased by seven 7% to $31 2 million compared to $29 million in the previous year.

James M. Jenkins: Looking at our fourth quarter and full year results, our net sales for the fourth quarter of fiscal 2024 increased by 7.7% to $31.2 million, compared to $29 million in the previous. For the full fiscal year ended January 31, 2024, Lakeland delivered solid revenue growth of $11.8 million or $10.5 million. However, a 44% decrease in our Asia business during the year, and weaker than expected for it to be. We were very pleased with the growth in our U.S. and Latin American operations this fiscal year. These important geographies grew 13% and 49% year-over-year.

Speaker Change: For the full fiscal year ended January 31, 2020 for Lakeland delivered solid revenue growth of $11 8 million or 10, 5% compared to last year. Despite a 44% decrease in our Asia business during the year and a weaker than expected fourth quarter. We were very pleased with the growth in our U S and Latin American operations. This fiscal year as these important geographies grew.

Speaker Change: 13% and 49% year over year.

James M. Jenkins: Our fire service business continues to deepen and broaden, having grown over 80%, driven by our strategic acquisitions, superior lead times from our manufacturing pipeline, and Onboarding Successes with New Designs. Our EGLE technical products business also had a very good performance, with growth of over 103% since being acquired by Lakeland. In terms of profitability, our fourth-quarter gross margin came in at 44.6%, excluding the effect of a one-time charge for inventory rightsizing and our adjusted EBITDA of $3.4 million, excluding the negative impact of foreign exchange losses, both of which Roger will discuss in more detail. Adjusted for the impact of negative effects in the corridor, our adjusted EBITDA would have been approximately 11% versus 6% and 6.7% last year.

Speaker Change: Our fire service business continues to deepen and broaden having grown over 80% versus last fiscal year, driven by our strategic acquisitions superior lead times from our manufacturing pipeline and Onboarding successes with new distributors, our Eagle technical products business also had a very good year with growth of over 103% since being acquired by late.

Speaker Change: In terms of profitability, our fourth quarter gross margin came in at 44, 6%, excluding the effect of a onetime charge for inventory right sizing and our adjusted EBITDA of $3 $4 million, excluding the negative impact of foreign exchange losses, both of which Roger will discuss in more detail later.

Speaker Change: Adjusted for the impact of negative FX in the quarter, our adjusted EBITDA would have been approximately 11% versus 6% six 7% last year.

James M. Jenkins: Our growth margins and adjusted EBITDA for the quarter benefited from the improving sales mix of our higher-value strategic products and improvements in our logistics and shipping operations. For the full fiscal year 2024, our revenue increased by almost $12 million, 10.5% against last year.

Speaker Change: Our gross margins and adjusted EBITDA for the quarter benefited from the improving sales mix of our higher value strategic products and improvements in our logistics and shipping operations.

Speaker Change: Full fiscal year 2024, our revenue increased by almost $12 million or 10, 5% against last year.

James M. Jenkins: This includes an 80% year-over-year growth in our fire services business. 8.3 million or 7.4% of our fiscal 24 growth, fiscal year 24 growth, came from our strategic acquisitions, while our organic business grew by 3.6 million or 3.2%. This despite a 44% year-over-year decline in our. As I mentioned previously, our Latin American business has also experienced significant growth, up 49% year over year. We experienced foreign exchange volatility from a significant devaluation in Argentina, but we believe that the country is making improvements in physical stability.

Speaker Change: This includes an 80% year over year growth in our fire services business.

Speaker Change: $8 3 million or seven 4% of our fiscal 'twenty four growth fiscal year 'twenty four growth came from our strategic acquisitions, while our organic business grew by $3 6 million or three 2% percent. This despite a 44% year over year decline in our Asia business as I mentioned previously our Latin American businesses also experienced significant.

Speaker Change: Both.

Speaker Change: Up 49% year over year.

Speaker Change: We experienced foreign exchange volatility from a significant devaluation in the Argentinian.

Peso this year.

Speaker Change: But we believe that the country is making improvements and fiscal stability.

Roger D. Shannon: We are very optimistic about Latin America, where we continue to invest and take markets. From an earnings perspective, our fiscal year 24 net income increased by $3.6 million to $5.4 million, resulting in net income per diluted share of $0.72 compared to $0.24 in the prior year, despite the previously mentioned inventory adjustment and FX log. Our adjusted EBITDA excluding FX losses increased by over $6 million to $15.7 million in FY24, resulting in an adjusted EBITDA margin excluding FX of 12.6%. In line with our growth trajectory and to further support our global portfolio of premium safety, we are gearing up to hire a new Senior Vice President of Sales. Additionally, we anticipate expanding our integration team to drive operational excellence across. Our commitment remains unwavering, and I'm excited to see where this coming year takes us. From here on, I'd like to pass it over to Roger to cover more of the financial results. Thanks, Jim, and hello everyone.

Speaker Change: We are very optimistic about Latin America, where we continue to invest and take market share.

Speaker Change: From an earnings perspective, our fiscal year 'twenty for net income increased by $3 6 million to $5 4 million, resulting in net income per diluted share of <unk> 72, compared to 24 in the prior year. Despite the previously mentioned inventory adjustments and FX loss.

Speaker Change: Our adjusted EBITDA, excluding FX loss increased by over $6 million.

Speaker Change: To $15 7 million in fiscal year 'twenty four.

<unk> and an adjusted EBITDA margin, excluding FX of 12, 6%.

Speaker Change: In line with our growth trajectory and to further support our global portfolio of premium safety brands. We are gearing up to hire a new senior Vice President sales this summer.

Speaker Change: Recently, we anticipate expanding our integration team to drive operational excellence across the organization.

Speaker Change: Our commitment remains unwavering and I'm excited to see where this coming year takes us from here I'd like to pass it over to Roger to cover more of the financials also for you and provide an outlook for the coming year.

Roger: Thanks, Jim and Hello, everyone.

Roger D. Shannon: First, covering the current period, Lakeland delivered sales of $31.2 million in the fourth quarter ending January 31, 2020, as noted in our earnings press release yesterday afternoon. We delivered solid year-over-year sales. Domestic sales were $12.7 million, or 40.6% of total revenue, and international sales were $18.5 million, or 59.4% of total revenue.

Roger: Covering the current period Lakeland delivered sales of $31 $2 million in the fourth quarter ended January.

Roger: 31 2024.

Roger: As noted in our earnings press release yesterday afternoon, we delivered solid year over year sales growth domestic.

Roger: Domestic sales were $12 7 million or 46% of the total revenues and international sales were $18 5 million or <unk> 59, 4% of total revenues.

Roger: This compares with domestic sales of $11 8 million or 48% of the total and international sales of $18 2 million or <unk> 59, 2% of the total in the fourth quarter.

Roger D. Shannon: This compares with domestic sales of $11.8 million, or 40.8% of the total, and international sales of $18.2 million, or 59.2% of the total in the fourth quarter, and others. While our geographic mix was relatively unchanged year over year, both our domestic and international sales grew, even with the 44% year-over-year decline. In terms of product mix for the fourth quarter, our fire service category continues to increase with an 18% year-over-year. Disposables continue to decrease as a percentage of Lakeland sales and represent 41% of total revenues compared to 48% in the year-ago period.

Roger: Of the previous year.

Roger: While our geographic mix was relatively unchanged year over year, both our domestic and international sales grew even with the 44% year over year decline in Asia.

Roger: In terms of product mix for the fourth quarter, our fire service category continues to increase with an 18% year over year growth.

Roger: Disposables continued to decrease as a percentage of liquid sales and represented 41% of total revenues compared to 48% in the year ago period.

Roger: This is a result of growth in our fire services and higher performance categories and the continued weakness in the disposables product line in Asia.

Roger D. Shannon: This is a result of growth in our fire services and high performance categories and the continued weakness in the disposable product line in Asia. However, as we discussed in the previous quarter, we do see excellent opportunities in both our disposables and woven product categories. We're having great success with our North American Direct Container Program, as well as with our oil and gas turnaround, which continued into the fourth quarter. We are also very optimistic about our critical environment opportunities as our excellent sales team continues to identify and close new opportunities. Additionally, we are taking steps to bolster our North American industrial sales channels, which we will have more to discuss later in the year. As Jim mentioned, revenue for the full fiscal year 2024 increased by almost $12 million, or 10.5% versus last year. For the fiscal year, our fire service business accounts for 21.3% of sales, and disposables are 39.8%.

Roger: As we discussed in the previous quarter, we do see excellent opportunities in both our disposables and woven product categories.

Roger: We're having great success with our North American direct container program as well as with our oil and gas turnaround business, which continued into the fourth quarter.

Roger: We are also very optimistic about our critical environment opportunities is our excellent sales team continues to identify and close new opportunities.

Roger: Additionally, we're taking steps to bolster our north American industrial sales channels, which we will have more to discuss later in the year.

Roger: As Jim mentioned revenue for the full fiscal year 2024 increased by almost $12 million or 10, 5% versus last year.

For the fiscal year, our fire service business is 21, 3% of sales and disposables are 39, 8%.

Roger D. Shannon: On slide 11 of our earnings presentation, we provide a comparison of our FY24 geographic and product line revenue versus FY23, as well as a depiction of our geographic and product revenue assuming we had owned Pacific Helmets, Jolly Boots, and LHD Fire and Rescue for the full year FY23. On a full year pro forma basis, with these acquisitions, our fire service business increases to 42% of revenue, the largest category, followed by disposables at 29%, chemical at 13%, and high performance at 12%. Our U.S. revenue percentages go to 32%, and Europe expands to 23%, led by JALI and LHD. Reported gross profit was $11.2 million for the fourth quarter of fiscal 2024, an increase of 0.3 million or 3.2% compared to $10.9 million in the fourth quarter of fiscal 2023.

Roger: On slide 11 of our earnings presentation, we provide a comparison of our FY 'twenty for geographic and product line revenue versus FY 'twenty, three as well as the pro forma depiction of our geographic and product revenue, assuming we had owned Pacific helmets, Jolly boots, and HD fire rescue for the full year.

Roger: <unk> FY 'twenty four.

Roger: On a full year pro forma basis with these acquisitions, our fire service business increases to 42% of revenue the largest category.

Roger: Followed by disposables at 29% chemical at 13% and high performance at 12%.

Roger: Our U S revenue percentages go to 32% and Europe expands to 23% led by Jolly NL HD.

Roger: Reported gross profit was $11 $2 million for the fourth quarter of fiscal 2024, an increase.

Roger: <unk> 3 million or three 2% compared to $10 9 million in the fourth quarter fiscal 2023.

Roger D. Shannon: Our reported gross profit as a percentage of net sales was 35.9% for the fourth quarter of fiscal 2024, compared to 37.5% for the fourth quarter of last year. Compared to the previous year, our gross profit margin was helped by a 3.7 percentage point improvement in sales mix from higher value products, and a 3.4% margin benefit, and improvements in freight costs, as we show on slide 7. As Jim mentioned, gross profit performance in the current period was negatively impacted by a one-time excess and obsolete inventory adjustment of $2.7 million.

Roger: Our reported gross profit as a percentage of net sales was 35, 9% for the fourth quarter of fiscal 2024 compared to 37, 5% for the fourth quarter of last year.

Roger: Versus the previous year, our gross profit margin was helped by three seven percentage point improvement in sales mix from higher value products.

Roger: And a three 4% margin benefit.

Roger: And improvements from freight cost as we show on slide seven.

Roger: As Jim mentioned gross profit performance in the current period was negatively impacted by onetime excess and obsolete inventory adjustment of $2 7 million.

Roger D. Shannon: Excluding the inventory adjustment, the fourth quarter gross profit would have been $44.6. As we discussed in prior quarters, we were not pleased with the level of inventory the company was carrying coming into fiscal 2020. We took strong steps to reduce it, first, by implementing better planning and operational improvements, led by our new Chief Operating Officer, Helena Ahn, and by working with sales on customer incentives for excess and reserved inventory. Those initiatives were quite successful during the fiscal year, particularly in the third quarter.

Roger: Excluding the inventory adjustment in the fourth quarter gross profit would have been 44, 6%.

Roger: As we discussed in prior quarters, we were not pleased with the level of inventory the company was carry coming into fiscal 2024.

Roger: We took strong steps to reduce it first by implementing better planning and operational improvements led by our new Chief operating officer, Elena on and by working with sales on customer incentives for excess and reserved inventory.

Roger: Those initiatives were quite successful during the fiscal year, particularly in the third quarter.

Roger D. Shannon: During the fourth quarter, we made a decision to clean up obsolete styles and non-strategic products, resulting in a $2.7 million one-time charge for inventory rights. We believe our inventory position going into fiscal year 2025 is much more aligned with the strategic focus of our business. As a reminder, fire services products are made to order, which is positive for our inventory and working capital. Lakeland reported an operating loss of $3.3 million for the physical. 4th quarter of 2024 compared to an operating profit of $100,000 for the 4th quarter of fiscal 2023. The main drivers for the difference between the two periods were the previously mentioned $2.7 million one-time inventory adjustment and a $1.7 million negative impact on operating expenses caused by currency fluctuations, primarily the devaluation in the Argentine peso. Additionally, higher SG&A costs, including non-recurring acquisition, severance, and restructuring costs, higher selling expenses from sales growth, acquired company operating expenses, and higher bonus expenses negatively affected SG&A and operating profit in the fourth quarter. Operating margins were minus 10.6 for the fourth quarter of fiscal 2024 compared to 0.3% for the fourth quarter of fiscal 2023.

Roger: During the fourth quarter, we made a decision to cleanup obsolete styles and nonstrategic products, resulting in a $2 $7 million, one time charge for inventory right sizing.

We believe our inventory position going into fiscal year 2025 is much more aligned with the strategic focus of our business.

Roger: As a reminder, fire services products are made to order, which is positive for our inventory and working capital positions.

Roger: Lakeland reported an operating loss of $3 $3 million for the fiscal.

Roger: The fourth quarter of 2024 compared to an operating profit.

Roger: For the fiscal fourth quarter of fiscal 2023.

Roger: The main drivers for the difference between the two periods were the previously mentioned $2 $7 million of one time inventory adjustment and a $1 7 million negative impact on operating expenses caused by the currency fluctuations primarily the devaluation in the Argentine peso.

Roger: Additionally, higher SG&A costs, including nonrecurring acquisition <unk>.

Roger: Severance and restructuring costs higher selling expenses from sales growth.

Acquired company operating expenses and higher bonus expenses negatively affected SG&A and operating profit in the fourth quarter.

Operating margins were minus 10, six for the fourth quarter of fiscal 2024 compared to 3% for the fourth quarter of fiscal 2023.

Roger D. Shannon: Excluding the negative impacts of the inventory adjustment, foreign exchange, severance, and acquisition expenses, our operating profit would have been $2.3 million, or 7.5% operating margin for the Corps. The company reported a net loss of $1 million, or $0.13 per basic share and $0.13 per diluted share, compared to a net income of $200,000 or $0.02 per basic and diluted share last year.

Excluding the negative impacts of the inventory adjustment foreign exchange severance and operate and acquisition expenses are operating profit would have been $2 3 million or seven 5% operating margin for the quarter.

Roger: The company reported a net loss of $1 million or <unk> <unk> per basic share and <unk> <unk> per diluted share compared to net income of 200000 or <unk> <unk> per basic and diluted share last year.

Roger D. Shannon: Net income was positively impacted by a $3.8 million gain from the sale of our Canadian warehouse in Q4 of 2020, and negatively impacted by an increased tax expense for the quarter, primarily driven by international jurisdictions, including the sale of our Canadian warehouse. In addition to the previously discussed inventory adjustment and FX, suggested EBITDA excluding FX lawsuits for the fourth quarter of fiscal 2024. $3.4 million, or a margin of 11% compared to $1.9 million for the fourth quarter of fiscal 2023. Foreign currency losses of $1.7 million negatively impacted adjusted EBIT.

Roger: Net income was positively impacted by $3 8 million gain from the sale of our Canada warehouse in Q4 of 2024 and.

Roger: And negatively impacted by an increased tax expense for the quarter, primarily driven by international jurisdictions, including the sale of our Canadian warehouse.

In addition to the previously discussed inventory adjustment in FX losses.

Roger: Adjusted EBITDA, excluding FX losses for the fourth quarter of fiscal 2024 was $3 $4 million or a margin of 11% compared to $1 9 million for the fourth quarter of fiscal 2023.

Foreign currency losses of $1 $7 million negatively impacted adjusted EBITDA, resulting in an as reported adjusted EBITDA of $1 8 million.

Roger D. Shannon: Resulting in an as reported adjusted EBITDA of 1.8. As shown on slide 7, our adjusted EBITDA for the quarter benefited from improvements in our higher value product sales mix and lower freight expense, although partially offset by higher selling expenses related to sales growth and acquired entity OPEC, higher professional fees, and higher bonuses, in addition to the previously mentioned foreign exchange. As we show on slides 8 and 9, for the full year fiscal 2024, Lakeland's adjusted EBITDA excluding FA.

Roger: As shown on slide seven our adjusted EBITDA for the quarter benefited from improvements in our higher value product sales mix and lower freight expense, partially offset by higher selling expenses related to sales growth and acquired into the opex higher professional fees and higher bonus expense. In addition to the previously mentioned foreign.

Roger: <unk> impact.

Roger: As we show on slides eight and nine for the full year fiscal 2024, <unk> adjusted EBITDA, excluding FX, a $15 7 million is an increase of 64% versus FY2023 adjusted EBITDA of $10 7 million.

Roger D. Shannon: $15.7 million is an increase of 64% versus FY23 adjusted to the $10.7. Full-year FX fluctuations, primarily from the Argentine peso, reduced FY24 adjusted EBITDA by $3.7 million, while sales were mixed, and improved freight and logistics bolstered adjusted EBITDA versus last year. Now turning to the ballot. Lakeland ended the year with cash and cash equivalents of approximately 25.2 million dollars, compared to our prior year-end cash balance of 24.6. Our focus on working capital improvements resulted in $3.2 million of cash flow from operations during the four-month period, $2.8 million of which was driven by an accelerated reduction of raw and finished goods inventory.

Roger: Full year FX fluctuations, primarily from the Argentine peso reduced FY 'twenty for adjusted EBITDA by $3 $7 million, while sales mix and improved freight and logistics bolstered adjusted EBITDA versus last year.

Roger: Now turning to the balance sheet.

Lakeland ended the year with cash and cash equivalents of approximately $25 $2 million compared to our prior year ended cash balance of $24 6 million.

Roger: Our focus on working capital improvements resulted in $3 $2 million of cash flow from operations. During the fourth quarter $2 8 million of which was driven by accelerated reduction of raw and finished goods inventory.

Roger: In FY 'twenty four we produced positive operating cash flow of $10 $9 million led by decreases in inventory of $7 $7 million to a level of $51 3 million of inventory at January.

Roger D. Shannon: In FY24, we produced a positive operating cash flow of $10.9 million, led by decreases in inventory of $7.7 million to a level of $51.3 million of inventory on January 31, 2024, along with Improved Gross Market. Our laser focus on cash further strengthens the company's financial position, particularly our robust balance sheet and cash position, which we believe will allow us to continue pursuing organic and inorganic growth opportunities. At January 31st, 2024, the company had $1 million of debt outstanding in a foreign subsidiary.

Roger: 31, 2024, along with improved gross margins.

Roger: Our laser focus on cash further strengthens the company's financial position, particularly our robust balance sheet and cash position, which.

Roger: Which we believe will allow us to continue pursuing organic and inorganic growth opportunities.

Roger: At January 31, 2024, the company had $1 million of debt outstanding at a foreign subsidiary.

Roger D. Shannon: As we mentioned in our press release in early February, we drew down a portion of our revolving line of credit in conjunction with the closing of our acquisition of Jolly Scarpa. In addition, on March 28, 2024, we completed an amendment to our existing revolver to extend the facility for five years and to expand our line of credit availability to $40 million, up from $25 million previously with improved terms. Capital expenditures for the three months ended January 31st, 2024, were $0.6 million and $2.1 million for the fiscal year 2020. We expect FY 25 capital expenditures to be approximately $3 million as we develop additional in-house fire service manufacturing capacity and replace existing equipment in the normal course of operation. Monterey expansion, which we discussed last quarter, remains on pause as we continue to assess weather-related damage to our leased land.

Roger: As we mentioned in our press release in early February we drew down a portion of our revolving line of credit in conjunction with the closing of our acquisition of <unk>.

Roger: In addition on March 28, 2024, we completed an amendment to our existing revolver to.

Roger: To extend the facility for five years and to expand our line of credit availability to $40 million up from $25 million previously with improved terms.

Roger: Capital expenditures for the three months ended January 31 2024.

Roger: Were <unk> 6 million and $2 $1 million for the fiscal year 2024.

Roger: We expect FY 'twenty five capital expenditures to be approximately $3 million as we develop additional in house fire service manufacturing capacity and replace existing equipment in the normal course of operations.

Roger: Monterrey expansion, which we discussed last quarter remains on pause as we continue to assess weather related damage to our leased building.

Roger D. Shannon: Finally, I'm very pleased to report that we continue to make significant enhancements to the skill set and capabilities of our global finance and accounting teams, and we will continue to invest in our global finance and IT sector. This becomes even more important as we continue to expand globally. I'm particularly happy to report that we have made significant improvements in our global control environment and we were able to quickly remediate and remove the material weakness that was identified at the end of fiscal 2023. Looking ahead to fiscal 2025, we are very pleased that, for the first time, Lakeland is providing forward-looking guidance for our fiscal 2025 fiscal year.

Roger: Finally, I'm very pleased to report that we continue making significant enhancements to the skill set and capabilities of our global finance and accounting teams and we will continue to invest in our global finance and it systems.

Roger: This becomes even more important as we continue to expand globally.

Roger: I'm, particularly happy to report that we have made significant improvements in our global control environment, and we were able to quickly remediate and remove.

Roger: The controlled material weakness.

Roger: Was identified at the end of fiscal 2023.

Roger: Looking ahead to fiscal 2025, we were very pleased that for the first time Lakeland is providing forward looking guidance for our fiscal 2025 fiscal year.

Roger D. Shannon: Please note that these expectations include the recently announced Jolly Scarpape and Pacific Helmets acquisitions but do not include the LHD Firebase, which we expect to close in late May 2024. We are becoming more confident in our global sales platforms and earnings ability, and we see FY 2025 revenue in the range of $140 million to $150 million. Additionally, we expect FY 2025 Adjusted EBITDA, excluding FX, to be in the range of $16.8 million to $18.5 million.

Roger: Please note that these expectations include the recently announced <unk> and Pacific <unk> acquisitions, but do not include the LHC fire business, which we expect to close in late May 2024.

Roger: We are becoming more confident in our global sales platforms at earnings ability and we see FY 2025 revenue in the range of $140 million to $150 million.

Roger: Additionally, we expect FY 2025, adjusted EBITDA, excluding FX to be in the range of $16 8 million to $18 5 million.

James M. Jenkins: We expect to update these expectations once we close the LHD transaction and as fiscal 2025 progresses. With that overview, I'd like to turn the call back over to Jim before we begin taking questions. Thank you, Roger.

We expect to update these expectations once we close the LHC transaction and as fiscal 2025 progresses.

Roger: With that overview I'd like to turn the call back over to Jim before we begin taking questions.

James M. Jenkins: Thank you Roger.

James M. Jenkins: Let me wrap up by taking a few minutes to talk about our ongoing strategy to emphasize the opportunities. The value proposition continues to be strong and unique, and we believe it will resonate in the market. We also believe our growing portfolio of product offerings in the FHIR, which will soon offer total care as a complementary service for their acquisition of LH, coupled with our growing ability to effectively leverage our other brands in areas of the world like Latin America where we once had little presence, can help drive more consistent performance over the long term. But we think there's a real opportunity to get even better, to take more markets. We also see an opportunity on the system, which This is a longer-term play. As I said on our last call, we are still in the very early innings of a 9-1-1.

James M. Jenkins: Let me wrap up by taking a few minutes to talk about our ongoing strategy to emphasize the opportunities we see for our business.

James M. Jenkins: Proposition continues to be strong and unique and we believe it will resonate in the market.

James M. Jenkins: We also believe our growing portfolio of product offerings, and the fire states, which which will soon offer total care complementary service with our acquisition of <unk>.

James M. Jenkins: Coupled with our growing ability to effectively leverage our other brands in areas of the world like Latin America, where we once had little presence should help drive more consistent performance over the long term.

James M. Jenkins: But we think theres, a real opportunity to get even better to take more market share. We also see an opportunity on the systems side, which is being addressed with a concentrated effort over the next couple of years to upgrade our systems and software to drive technology as a competitive advantage. This is a longer term play as I said on our last call. We are still in the very early innings of a nine inning game.

James M. Jenkins: Over time, we expect these investments to drive more productivity and efficiency that will not happen overnight. Our confidence is high that we will see anticipated mid to longer term productivity improvements associated EBIT margin expansion.

James M. Jenkins: Over time, we expect these investments to drive more productivity and efficiency. While it will not happen overnight, our confidence is high that we will see the anticipated mid to longer-term productivity improvements and Associated EVA to Marginalized. From an acquisition strategy perspective, the fire market continues to be fragmented, and acquisitions, both making them and driving organic growth after the acquisition is completed, will be an important element of our growth strategy. Our acquisition plan is supported by Healthy Cash. We will make concerted efforts to expand our integration programs as we add new employees to effectively consolidate our growing fire service. Our acquisition plan is both disciplined and strategic, and we believe we are the only company in our space actively acquiring with the end goal of comprehensive integration. We want to continue focusing on smaller companies as we believe the integration process to be less disruptive to these companies and others.

James M. Jenkins: From an acquisition strategy perspective, the fire market continues to be fragmented and acquisitions, both making them and driving organic growth. After the acquisition is completed we will be an important element of our growth strategy.

James M. Jenkins: Our acquisition plan is supported by healthy cash flow.

James M. Jenkins: Make concerted efforts to expand our integration programs as we add expertise to effectively consolidate our growing fiber services offerings.

Our acquisition plan is both disciplined and strategic and we believe we are the only company in our space actively acquiring with the end goal of comprehensive integration, we want to continue focusing on the smaller companies as we believe the integration process to be less disruptive as exhibited by our success this year with Eagle <unk>.

James M. Jenkins: You see us replicate in the Eagle model the Pacific helmet Jolly in IHT.

James M. Jenkins: That means we will drive to execute the sales and cost synergies from the acquisitions, we make while maintaining the brand value and key contributors from the companies we acquired.

We believe that is unique in the market I'll conclude by saying that the pipelines associated with both our organic and acquisitive growth are very strong and we remain confident in our direction and believe we will continue to be well positioned to capitalize on future growth opportunities. We also expect to be able to continue to generate positive short term results simultaneously to better position the company.

James M. Jenkins: Thank you. Thank you. You see us replicating the Eagle model with Pacific Helmets Jolly.

James M. Jenkins: That means we will drive to execute the sales and cost synergies from the acquisitions we make while maintaining the brand value. These are key contributors from the companies we acquired. We believe that this is unique in the market. I'll conclude by saying that the pipelines associated with both our organic and acquisitive growth are very strong, and we remain confident in our direction and believe we will continue to be well positioned to capitalize on future growth opportunities. We also expect to be able to continue to generate positive short-term results simultaneously to better... With that, we will now open the call for questions.

For the longer term.

Speaker Change: With that we will now open the call for questions operator.

Certainly at this time, we will be conducting a question and answer session.

Speaker Change: I would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the Q.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Operator: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker Change: Your first question for today is from Gerry Sweeney with Roth MKS.

Speaker Change: Okay.

Speaker Change: Morning, guys. This is Brian Rogers on for Jerry Sweeney, Thanks for taking my questions.

Operator: You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Your first question for today is from Jerry Sweeney on Roth MKM. Good morning, guys. This is Brandon Rogers on for Gerard Sweeney.

Hey, good morning, Brian.

Brian Rogers: Has it gone.

Brian Rogers: So I understand that there is a companywide focus on growing the service aspects for both fire and the core business as well.

Brian Rogers: How much of the current business has a service component and then will the service component growth growth organically or inorganically or both.

Brandon Rogers: Thanks for taking my question. Hey, you're welcome, Brandon. How's it going?

Speaker Change: So on the service and this is our first foray into the in service throughout the <unk> acquisition. So we do not have that offering but we're very excited about it.

James M. Jenkins: So I understand that there's a company-wide focus on growing the service aspects of both fire and the core business as well. How much of the current business has a service component? And then will the service component growth come organically or inorganically, or both?

Speaker Change: We've got a team sort of exploring whether thats, something we might greenfield and other areas of the world.

Speaker Change: But right now I think we're going to we're going to we're going to spend.

Speaker Change: Chunk of this year learning from <unk> and how that process has worked through that service component.

James M. Jenkins: So, on the service end, this is our first foray into service since the LHD acquisition, so we do not have that offering, but we're very excited about it. We have a team sort of exploring whether that's something we might greenfield in other areas of the world, but right now, I think we're going to spend a good chunk of this year learning from LHD and how they're processing that. And Brandon's Roger, I'd just add that, you know, there's something that we have talked about; we've been looking for an opportunity, and the fact that LHC has such a strong, what they call the LHC care program, in a number of countries, I think that gives us a leg up. And, you know, also, we'll have more information following acquisition, but the gross margins for that business, as you And then another one, can you provide just some of the details around the value proposition, the important benefits of providing the head-to-toe fire product offering?

Speaker Change: And Brian It's Roger I would just add that.

Roger: Something that we've talked about we've been looking for an opportunity and the fact that <unk> has such a strong what they call AHD care program.

Roger: A number of countries that people it gives us a leg up and also we will have more information.

Roger: Following the acquisition.

Roger: Gross margins for that business as you could expect or.

Roger: Well above company averages.

Speaker Change: Awesome. Thank you for that and then another one can you provide just some of the details around the value proposition. They are important and benefits of providing the head to toe fire product offering.

Speaker Change: Well.

Speaker Change: When you think about it a lot of these are tenders right. So they've got.

Speaker Change: In various countries certain opportunities to to to win the entire bid and having.

Speaker Change: That head to toe offerings, rather than having to find a partner to join in the bid.

James M. Jenkins: Well, we, you know, when you think about it, a lot of these are our tenders, right? So they've got, various countries, certain opportunities to win the entire bid, and having that head-to-toe offering rather than having to find a partner to join in the bid, we believe provides us with a significant competitive advantage. Yeah, and we mentioned this at your conference recently. I mean, we've got recent, very recent anecdotal evidence of that.

Speaker Change: <unk> provides us with a significant competitive advantage.

Speaker Change: Yes.

Speaker Change: We mentioned this at your conference recently I mean, we've got recent.

Speaker Change: Very recent anecdotal evidence that we gather.

<unk> bid.

Speaker Change: In Latam, so we have to get.

Speaker Change: We had much larger.

Speaker Change: Higher turn out where providers and the.

Roger D. Shannon: We've had a significant bid in LATAM going up against much larger fire turnout providers, and the fact that we were able to come to the tender with the Pacific Helmets and Jolly Boots resulted in us winning that tender, which is very exciting. Thank you, and then one more for me is just on FX. I know FX had a much more significant impact this year compared to last year, and is that strictly due to the devaluation of the Argentinian peso, or were there other aspects at play that had a material impact? So that's a great question. The FX that we called out was due almost exclusively to the Argentinian peso. So if you think about how FX impacts a global company, and we are incredibly global at this point, it can go through the balance sheet translation through OCI. It can certainly affect the top line revenue number, depending on one currency versus another. That's not what we're talking about here. The Argentinian situation arises, it's got a couple distinct features.

Speaker Change: <unk> that we were able to come to the tender with.

Speaker Change: With the Pacific elements, some jolly boots resulted in us winning that tender issues.

Speaker Change: We're excited.

Speaker Change: Thank you and then one more for me.

Speaker Change: Just on FX.

I know there was a FX had a much more significant impact this year compared to last year and is that strictly due to the devaluation of the argentinean peso or were there other aspects at play that had a material impact.

Speaker Change: So that's a great question and the FX that we called out was due almost exclusively to the Argentinian peso. So if you think about health.

Speaker Change: Sex impacts with global company and we are incredibly global at this point.

It can it can go through through the balance sheet translation through OCI that can certainly affect the topline revenue number depending on when currency versus another.

Speaker Change: That's not what we're talking about here and Thats just normal part of doing business.

Speaker Change: <unk> Argentinian situation arises it's got a couple a couple of distinct features one it arises because of the current high inflation rate in Argentina.

Roger D. Shannon: One, it arises because of the current high inflation rate in Argentina. Being above 100%, U.S. GAAP requires us to carry that operating entity in a U.S. dollar functional currency, not a local one. What that results in is when we re-measure our assets, particularly cash and receivables, that get that currency impact flows through OPEX. So, so not only was it a headwind; it's a headwind. And, you know, what I'd refer to as a bad place, and that's OPEX. That said, you know, we do see the situation improving there. There are steps being taken to get their fiscal house much more in order.

Speaker Change: Being above 100% U S. GAAP requires us to carry that a bit operating entity in the U S dollar functional currency local currency what that results in is when we re measure.

Speaker Change: Our assets, particularly cash and receivables.

Speaker Change: That get that currency impact flows through opex. So so not only was it a headwind it's a headwind.

Speaker Change: What I would refer to as a bad place and Thats Opex.

Speaker Change: That said.

We do see the situation improving there.

Speaker Change: There are steps being taken to get their physical house much more on order.

Roger D. Shannon: We are comprehensively reevaluating and looking at all of our functional currency designations. We'll manage that as best we can, but the reason that we called that one out is, you know, in addition to where it flows through OPEX. It was kind of compounded by the fact that, unlike most currencies, there's nothing you can do about it to hedge it. It just wasn't.

Speaker Change: Comprehensively re evaluating and looking at all of our functional currency designation.

Speaker Change: We'll manage that as best we can but the reason that we called that one out as you in addition to where it flows through opex.

Speaker Change: It was kind of compounded by the fact that there is.

Speaker Change: Unlike most currencies, there's nothing you can do about it to hedge it just was not hedgeable.

Roger D. Shannon: You know, that said, like Jim said, we're very bullish on that market. We are taking market share, it is profitable, and it's growing, and we are, you know, going to continue to invest in the Latin American economy. Thanks to you both. I appreciate you taking the questions. I can take the rest offline.

Speaker Change: That said like Jim said, we're very bullish on that market. We are taking market share. It is profitable and it's growing and we are.

You are going to continue to invest in the Latin American market.

Speaker Change: Thanks, Steve I appreciate you taking the questions.

Speaker Change: I'll take the rest offline.

Operator: Thank you. As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. At this time, there are no other questions in the queue.

Steve: Okay, great. Thank you.

Speaker Change: As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.

At this time there are no other questions in the queue.

Operator: Thank you, operator. Thank you all for joining us on today's call. We appreciate your continued interest in Lakeland. We look forward to building on the strong momentum Lakeland has and sharing our successes with you in Fiscal 2025. Have a great day. This concludes today's conference, and you may disconnect your lines at this time.

Speaker Change: Thank you operator, thank you all for joining us on today's call. We appreciate your continued interest in Lakeland, we look forward to building on the strong momentum Lakeland has.

Speaker Change: And sharing our successes with you in fiscal 2025 have a great day.

Speaker Change: This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

Operator: Thank you for your participation.....