Q4 2025 Lakeland Industries Inc Earnings Call
Operator: following the present. 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 security For more information visit www.fema.gov Any such forward-looking statements reflect management expectations based upon currently available information and are not guaranteed the future performance and involve certain risks and uncertainties that are more fully described in our SEC file. Our actual results, performance, or achievements may differ materially from those expressed in or implied by such forward-looking data.
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 may constitute forward looking statements under federal Securities laws.
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. T filings, our actual results performance or achievements may differ materially from those expressed in or implied by such forward.
Looking statements.
Operator: We undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this recording. On this call, we will also discuss financial measures derived from our financial statements that are not determined in accordance with the U.S. GAAP, including adjusted EBITDA, including FX and adjusted EBITDA excluding FX margin, organic sales, organic gross margin, organic SG&A operating expenses, and adjusted operating expenses.
We undertake no obligation to update or revise any forward looking statements to reflect events or developments. After the date of this call.
On this call. We will also discuss financial measures derived from our financial statements that are not determined in accordance with U S GAAP, including adjusted EBITA, including FX and adjusted EBITA, Excluding FX margin work.
<unk> sales organic gross margin organic SG&A operating expenses adjusted operating expenses.
Operator: 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 The press release detailing these results crossed the wire this afternoon and is available on the Investor Relations section of our company's website.
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.
A press release detailing these.
Results crossed the wire this afternoon and is available on the Investor Relations section of our company's website IR Dot Lakeland dotcom.
Jim Jenkins: ir.lakeland.com At this time, I would like to introduce your host for this Lakeland Fire and Safety's President, Chief Executive Officer and Executive Chairman Jim Jenkins and Chief Financial Officer and Secretary Roger Shannon. Mr. Jenkins, the floor is yours. Thank you, operator. And good afternoon, everyone. Thank you for joining us today to discuss the results of our physical 2025 fourth quarter and year end January 31, 2025.
Jim Jenkins: At this time I would like to introduce your host for this call Lakeland fire and safety President Chief Executive Officer, and Executive Chairman, Jim Jenkins, Chief Finance Officer, and Secretary Roger Shannon Mr. Jenkins the floor is yours.
Jim Jenkins: Thank you operator, and good afternoon, everyone. Thank you for joining us today to discuss the results of our physical 2025 fourth quarter and year ended January 31 2025.
Jim Jenkins: For those of you new to the Lakeland story and our strategy, we are a global manufacturer of personal protective equipment, apparel and accessories with a head to toe portfolio of premium fire service brands and mission critical industrial PPE. Our management team is implementing strategies to accelerate growth and margins within the global fire turnout gear and industrial PPE markets with an acquisition focus on the fragmented fire industry. Our product portfolio includes firefighter protective apparel and accessories. high-end chemical protective suits, limited-use disposable protective clothing, durable woven garments, high-visibility clothing, gloves, and protective sleeves across our globally recognized brands, Lakeland Fire and Safety, Viridian, Eagle, LHD, Jolly, and Pacific Helmets.
Jim Jenkins: For those of you new to the Lakeland story and our strategy. We are a global manufacturer of personal protective equipment apparel and accessories with a head to toe portfolio, our premium fire service brands and mission critical industrial PPE.
Jim Jenkins: Our management team is implementing strategies to accelerate growth and margins wouldn't a global fire turnout gear and industrial PPE markets with an acquisition to focus on the fragmented fire industry.
Jim Jenkins: Our product portfolio includes firefighter protective apparel and accessories.
Jim Jenkins: Hi, and chemical protective suits limited use disposable protective clothing durable woven garmin high visibility clothing gloves and protective sleeves across our globally recognized brands Lakeland fire and safety.
Jim Jenkins: Eagle L H D Jolly and Pacific helmets over.
Jim Jenkins: Over the last year and a half, we have closed four strategic acquisitions that have improved Lakeland's competitive advantage within our focus markets, which I will speak to momentarily. Finally, we operate from 18 locations in 14 countries with sales representatives in 23 countries outside the U.S. and product sales in more than 50 countries. Lakeland Fire and Safety's mission-critical product portfolio includes North American and globally certified fire turnout gear, safety helmets, fire boots, particulate blocking hoods, and fire gloves for our fire services segment. Our industrial segment includes a wide range of high-quality safety products, including chemical suits, PPE, and disposable coveralls, high-performance FRAR, and woven garments and safety gloves.
Speaker Change: Over the last year and a half we've closed four strategic acquisitions that improve <unk> competitive advantage within our focused markets, which I will speak to momentarily.
Speaker Change: Finally, we operate from 18 locations in 14 countries with sales Representatives in 23 countries outside the U S and product sales and more than 50 countries.
Speaker Change: Michael Fire and safety mission critical product portfolio includes North American and globally certified fire turnout gear safety helmets fire boots, particularly blocking hoods and fire gloves for our C store fire services segment. Our industrial segment includes a wide range of high quality safety products, including.
Speaker Change: Chemical suits, PPE and disposable Coveralls high performance F. R. R.
Speaker Change: And woven garments and safety boots and.
Jim Jenkins: In the past year, we have completed four strategic acquisitions that added product line extensions and innovative new products and expanded our global markets, channels, and customers. The acquisitions have expanded our footprint in North America, Europe, Asia, Oceania, LATAM, and the Middle East, with strategic distributors and partnerships in each region. These acquisitions are part of our initiative to build a portfolio of premium global fire brands under Lakeland Fire and Safety in this fragmented market, available globally through strategic distribution partners across 78 countries. These include Viridian closed in December 2024, LHD closed in July 2024, Jolly Scarpay closed in February 2024, and Pacific Helmets closed in November 2023, plus Eagle closed in December 2022.
Speaker Change: In the past year, we have completed four strategic acquisitions that added product line extensions and innovative new products and expanded our global markets channels and customers. The acquisitions have expanded our footprint in North America, Europe, Asia, Oceania, Latam and the middle East with strategic distributors and partnerships in each region to region.
Speaker Change: These acquisitions are a part of our initiative to build a portfolio of premium global firebrands under Lakeland fire and safety and it's fragmented market available globally through strategic distribution partners across 78 countries.
Speaker Change: These include Meridian closed in December 2024, L. H D closed in July 2020 for Julian.
Speaker Change: <unk> closed in February 2024, and Pacific how much closed in November 2023, plus Eagle closed in December 2022.
Jim Jenkins: Each of these acquisitions has placed our company in a strong position across our focused product categories and markets, supported by continued and increasing investment in our global fire footprint, owning and operating our own manufacturing facilities, acquiring complementary companies or products that expand, and enhancing product offerings and or geographic customer territories, and investing in sales and marketing resources in countries around the world. We feel this provides Lakeland with a strong competitive position with respect to delivery lead time. With a company-owned manufacturing footprint and strong market share positions in top global markets that create a barrier to entry, Lakeland is positioning itself as the acquirer of choice.
Speaker Change: Each of these acquisitions has placed our company in a strong position across our focused product categories and markets supported by continued and increasing investment in our global fire footprint owning and operating our own manufacturing facilities acquiring complementary companies or products that expand.
Speaker Change: And enhancing product offerings, <unk> geographic customer territories, and investing in sales and marketing resources in countries around the world.
Speaker Change: We feel this provides <unk> with a strong competitive position with respect to delivery lead times with our company owned manufacturing footprint and strong market share positions in top global markets that create a barrier to entry.
Speaker Change: <unk> is positioning itself as the acquirer of choice. In addition to the owned 14 patents with the U S patent and trademark office and 76 trademarks.
Jim Jenkins: In addition, we own 14 patents with the U.S. Patent and Trademark Office and 76 trademarks.
Speaker Change: Hi.
Jim Jenkins: 2025 and 2026 to date has been a momentous period of transition and progress for Lakeland. During the quarter, we closed an oversubscribed $46 million public equity offering, the proceeds utilized to pay down our loan agreement, substantially improving our balance sheet and improving net debt ratio, and resulting in expected cash interest savings of approximately $2.5 million annually. The capital also positioned us to accelerate further growth in the fragmented, higher margin, $2 billion fire protection segment in the largest global market. We completed strategic acquisitions that added product-line extensions, innovative new products, and expanded global markets, channels, and customers as part of our initiative to build a portfolio of premier global fire brands under Lakeland Fire and Safety in these fragmented markets, including Viridian, LHD, Jolly Scarpe, and previously Pacific Helmet.
Speaker Change: 2025, and 2026 to date has been a momentous period of transition and progress for Lakeland.
Speaker Change: During the quarter, we closed an oversubscribed $46 million public equity offering the proceeds utilized to pay down our loan agreements substantially improving our balance sheet and improving net debt ratio and resulting in expected cash interest savings of approximately $2 5 million annually.
Speaker Change: <unk> also positioned us to accelerate further growth in a fragmented higher margin 2 billion dollar fire protection segment, and the largest global markets. We completed strategic acquisitions that added product line extensions innovative new products and expanded global markets channels and customers as part of our initiative to build a portfolio of premier.
Speaker Change: Global Firebrands under Lakeland fire and safety in these fragmented markets, including Viridian L. H D Jellies Sky bet in previously Pacific elements.
Jim Jenkins: To further support our growth and profitability, we have embarked on a project to enhance, modernize, and consolidate our company-wide ERP. Our acquisitions of five new entities over the past two years has resulted in eight additional ERP systems that need to be brought under Lakeland's IT control environment. In December, we began implementing a company-wide enterprise resource planning system, which will roll out in phases over the next several years. We expect to complete the first phase by the end of this fiscal year. Likewise, we are also undertaking an integration of our global operating and manufacturing resources, which includes certification, integration, procurement integration, and production capacity layout.
Speaker Change: To support our growth and profitability, we have embarked on a project to enhance modernize and consolidate our company wide ERP systems are acquisitions of five new entities over the past two years has resulted in eight additional ERP systems that need to be brought under lake was it control environment in December we began implementing a company wide enterprise risk.
Speaker Change: <unk> planning system.
Speaker Change: Which will roll out in phases over the next several years, we expect to complete the first phase by the end of this fiscal year.
Speaker Change: Likewise, we are also undertaking an integration of our global operating and manufacturing resources, which includes certification integration procurement integration and production capacity lay out.
Jim Jenkins: We have kicked off a company-wide Lean Six Sigma project on the direction of a master black belt within our operations. On the logistics front, we have deployed strategies that focus on a worldwide approach to shipping and distribution, including the completed centralization of our European warehouses at Venlo, Netherlands, the negotiation of the 2025-2026 freight contract, and a global logistics optimization program.
Speaker Change: Have kicked off a company wide lean six Sigma project on the direction of a master black belt within our operations team.
Speaker Change: On the logistics front, we have deployed strategies that focus on a worldwide approach to shipping and distribution, including the completed the centralization of our European warehouses at Venlo, Netherlands, the negotiation of the $2025 126 freight contract and a global logistics optimization program.
Jim Jenkins: We assembled a new and experienced management team, including myself, Roger Shannon as CFO, and Helena Ahn as COO. We have all executed strategy like Lakeland's, a turnaround efficiency focus with accretive acquisitions and synergies to accelerate growth and value. We appointed Barry Phillips as Chief Revenue Officer, and Cameron Stokes as the newly created role of Chief Commercial Officer, Global Industrial, to drive sales initiatives for revenue growth, strategic market development, and expanding market share. Finally, with our global employee base of over 2,000 team members, we have brought on Laurel Yarts as our CHRO to help manage our most important asset, our people.
Speaker Change: We assembled a new and experienced managing management team, including myself, Roger Shannon, our CFO and Helena honest C. O L. We have all all executed strategy you'd like to take a turnaround.
Speaker Change: Efficiency focus with accretive acquisitions and synergies to accelerate growth and value.
Speaker Change: Appointed Barry Phillips, as Chief revenue Officer, and Cameron Stokes as a newly created role of Chief Commercial Officer Global industrial to drive sales initiatives for revenue growth strategic market development and expanding market share finally, with our global employee base of over 2000 team members, we have brought on Laurel yards.
Speaker Change: H R O to help manage our most important asset our people.
Jim Jenkins: So I'm going to go off script just briefly and say that we're going to discuss tariffs. Obviously the world changed again today at 118 with a true social tweet, and I'll go back on script now, but I just want to advise everyone that this is obviously a fluid situation as we sit at this moment. I will discuss tariffs in more detail later, but I want to highlight that we have initiated measures to minimize the tariff impacts through inventory buildup and production shifts. As global conditions continue to evolve, we remain focused on navigating a dynamic macroeconomic environment with resilience and agility.
Speaker Change: So I'm Gonna go off script, just briefly and say that we're going to discuss tariffs obviously the world changed again today at 118 with or without truth social tweets.
Speaker Change: And I'll go back on script now, but I just want to advise everyone that this is obviously.
Speaker Change: A fluid situation as we.
Speaker Change: At this moment I will discuss discuss tariffs in more detail later, but I want to highlight that we have initiated measures to minimize the tariff impacts through inventory buildup and production shifts.
Speaker Change: As globe global conditions continue to evolve we remain focused on navigating a dynamic macroeconomic environment with resilience and agility, while increasing tariff pressures and broader economic uncertainties exist. We view these as opportunities to further strengthen our operations and adaptability.
Jim Jenkins: While increasing tariff pressures and broader economic uncertainties exist, we view these as opportunities to further strengthen our operations and adaptability. Recent trade tensions and new tariff announcements have added complexity to global markets. However, our diversified manufacturing footprint positions us well to respond to these changes and minimize disruption. By staying proactive, we are working to ensure continuity, stability, and efficiency across our procurement and production networks. While some leading indicators suggest the potential for a cyclical slowdown, we are preparing thoughtfully for a range of economic scenarios. Through a continued focus on financial discipline, deepening customer partnerships, and driving operational excellence, we are building a stronger, more resilient foundation for a longer-term success.
Speaker Change: Trade tensions and new tariff announcements that added complexity to global markets. However, our diversified manufacturing footprint positions us well to respond to these changes and minimize disruption.
Speaker Change: By staying proactive we are working to ensure continuity stability and efficiency across our procurement and production networks.
Speaker Change: While some leading indicators suggest the potential for a cyclical slowdown we are preparing thoughtfully for a range of economic scenarios through.
Speaker Change: Through a continued focus on financial discipline deepening customer partnerships and driving operational excellence. We are building a stronger more resilient foundation for longer term success.
Jim Jenkins: Importantly, we are well-positioned with two relatively recession-resistant sectors, industrial and fire, giving us confidence in our ability to weather near-term challenges. While we are not completely insulated from the uncertainty surrounding global tariff developments, we are moving forward with clarity and confidence. We have taken a number of steps to mitigate the effects these tariffs might have. First, we increased net inventory by $14.2 million, which as of January 31, 2025, totaled $82.7 million. While developments are changing by the day, including just a few hours ago, where the majority of the tariffs were paused for 90 days, we are focusing on production shifts to incur the lowest possible tariffs on our products.
Speaker Change: Importantly, we are well positioned with two relatively recession resistant sectors, industrial and fire, giving us confidence in our ability to weather near term challenges. While we are not completely insulated from the uncertainty surrounding global tariff developments, we are moving forward with clarity and confidence we have taken a number of steps to mitigate the effects of these tariffs might have first we increased.
Speaker Change: Net inventory by $14 2 million, which as of January 31.
Speaker Change: 2025 totaled $82 $7 million, while developments are changing by the day, including just a few hours ago, where the majority of the tariffs were paused for 90 days, we are focusing on production shifts to incur the lowest possible tariffs on our products.
Jim Jenkins: In the North American marketplace, our tariff mitigation initiatives include cross-certification of Lakeland's Mexico-produced fire turnout gear by Viridian for production in the U.S. All Viridian turnout gear is currently manufactured in the U.S., and these facilities have the capacity to manufacture the Lakeland brand of turnout gear. Additionally, our Mexico facility is becoming certified to produce Viridian turnout gear for the Canadian and LATAM markets in our Mexico facility. Immediately following our acquisition of Viridian, Lakeland's Mexico and Viridian's U.S. operations began sharing compliance under NFPA 1970 and technical documentation to facilitate cross-production initiatives. We are also pleased to learn that over 90% of our Mexico-produced products that fall under the provisions of the U.S.
Speaker Change: In the North American marketplace, our tariff mitigation initiatives include cross certification of Lakeland, Mexico produced fire turnout gear by Viridian for production in the U S. Already in turn out gear is currently manufactured in the U S. And these facilities have the capacity to manufacture the Lakeland brand of turnout gear.
Speaker Change: Additionally, our Mexico facilities, becoming certified to produce viridian turnout gear.
Speaker Change: Canadian and Latam markets in our Mexico facility immediately following our acquisition of Viridian, Lakeland, Mexico, and very against U S operations began sharing compliance under NFPA 1970, and technical documentation to facilitate facilitate cross production initiatives. We're also pleased to learn that over 90% of our Mexico produced.
Speaker Change: That fall under the provisions of the U S MCA trade agreement.
Jim Jenkins: MCA trade agreement are not subject to additional tariff. In Asia, these measures include exploring other lower tariff regions. for manufacturing industrial products, along with communicating expected price increase or surcharges to channel partners for products made in Vietnam and China. We are continuing to closely monitor the Vietnam tariff situation as a significant portion of our U.S. disposable products are manufactured at our Vietnam facility, and we are hopeful that the just-announced pause in tariffs for Vietnam and most other countries will become permanent. In the meantime, we are continuing to assess the possibility of manufacturing disposable products at our newly-acquired U.S.
Speaker Change: Are not subject to additional tariffs.
Speaker Change: In Asia. These measures include exploring other lower tariff reasons regions.
Speaker Change: For manufacturing industrial products.
Speaker Change: Along with communicating expected price increases.
Speaker Change: Our surcharges to channel partners for products made in Vietnam, and China, where currently we are continuing to closely monitor the Vietnam tariff situations I think significant portion of our U S. Disposable products are manufactured at our Vietnam facility and we are hopeful that the just announced pause in tariffs for Vietnam and most other countries will become.
Speaker Change: Permanent in the meantime, we are continuing to access assess the possibility of manufacturing disposable products at our newly acquired U S manufacturing facilities or other vacant facilities around the world.
Jim Jenkins: manufacturing facilities or other Lakeland facilities around the world. One final note is that only a limited range of China-produced products are imported into the U.S., and we believe that we do not have a material risk of retaliatory tariffs from foreign entities as we manufacture only a limited set of products in the U.S. for non-U.S. countries, primarily Viridian Turnouts.
Speaker Change: One final note is that only a limited range of China produced products are imported into the U S. And we believe that we do not have a material risk of retaliatory tariffs from foreign entity entities as we manufacture only a limited set of products in the U S for non U S countries, primarily viridian turnout gear.
Jim Jenkins: Looking back at fiscal 25 and ahead to fiscal year 26, I can confidently say that we now have the right management team in place to execute our strategies, focusing on strategic acquisitions and synergies to accelerate growth and create value. These strategic acquisitions have grown our global presence and head-to-toe portfolio brands. The completed acquisition of Viridian in particular has expanded Lakeland's global fire service portfolio with Viridian's leading firefighter protective apparel office. We still have a very robust M&A pipeline and we are focused on new opportunities to further consolidate the fragmented fire market with a newly raised capital and are accelerating free cash flow to support this acquisition strategy.
Speaker Change: Looking back at fiscal 'twenty, five and ahead to fiscal year 'twenty six I can confidently say that we now have the right management team in place to execute our strategies, focusing on strategic acquisitions and synergies to accelerate growth and create value.
Speaker Change: These strategic acquisitions have grown our global presence and head to toe portfolio of brands. The completed acquisition of Meridian in particular has expanded Lakeland global fire service portfolio with meridian, leading firefighter protective apparel offerings.
Speaker Change: We still have a very robust M&A pipeline and we are focused on new opportunities to further consolidate the fragmented fire market with newly raised capital and are accelerating free cash flow to support this acquisition strategy.
Jim Jenkins: We also made two key sales leadership appointments in Fiscal 25 and as well as new regional sales leaders in Asia and Europe, and we are already very encouraged by the early performance from these professionals. We have also successfully combined the North American sales forces for Viridian and Lakeland's fire turnout offerings and implemented a global fire sales strategy. As I just spoke to, our tariff mitigation strategy is already underway with an inventory build-up and production shifts across the U.S., Mexico, and Asia that will incur the lightest burden possible on Lakeland and our customers. We have also employed logistics strategies that focus on a worldwide approach for shipping and distribution to optimize efficiencies and lower costs.
Speaker Change: We also made two key sales leadership appointments in fiscal 'twenty, five and as well as well as new regional sales leaders in Asia, and Europe, and we are already very encouraged by the early performance from these professionals. We have also successfully combined the north American sales forces for Iridium and lay conspire turnout offerings and implemented a global sales fires fire sales.
Speaker Change: <unk> as I just spoke to our tariff mitigation strategy is already underway with an inventory buildup and project production shifts across the U S, Mexico, and Asia that will incur the lightest burden possible on Lakeland and our customers.
Speaker Change: We have also employ logistics strategies that focus on a worldwide approach for shipping and distribution to optimize efficiencies and lower costs.
Jim Jenkins: These strategies and our experience management team's execution of them are translating into strong financial performance. We are well capitalized with a strong balance sheet and expanding free cash flow growth to fund our fire services acquisition strategy and initiatives.
Speaker Change: These strategies and our experienced management teams execution of them are translating into strong financial performance, we are well capitalized with a strong balance sheet and expanding free cash flow growth to fund our fire services acquisition strategy and initiatives with that I'd like to pass it over to Roger to cover our financial results.
Roger Shannon: With that, I'd like to pass it over to Roger to cover our financial. Thanks, Jim, and hello, everyone. I'll provide a quick overview of our fourth quarter and fiscal year 2025 financials before diving into the details. Revenue for the quarter grew $15.4 million, or 49.3%, compared to the fourth quarter of fiscal 2024. For the fiscal full year 2025, revenues increased $42.5 million, or 34.1%, to $167.2 million. Consolidated gross margin increased by 420 margin points versus Q4 of last year from 40.1 percent.
Roger: Thanks, Jim and Hello, everyone.
Roger: I'll provide a quick overview of our fourth quarter and fiscal year 2025 financials before diving into the details.
Roger: Revenue for the quarter grew $15 4 million or 49, 3% compared to the fourth quarter and fiscal 2024.
Roger: For the fiscal full year, 2025 revenues increased $42 5 million or 34, 1% to $167 $2 million.
Roger: Consolidated gross margin increased by 420 margin points versus Q4 of last year from 41%.
Roger Shannon: at 241.1% from 35.9% and held at 41.1% for both fiscal years 2025 and 2024. Operating expenses increased by $4.3 million or 29.7% from $14.5 million to $18.8 million in the fourth quarter of fiscal 2025 and by $22.2 million or 49.1% from $45.2 million in the fiscal year 2024 to $67.4 million in fiscal 2025 due to inorganic growth, acquisition expenses, restructuring and other non-recurring expenses, and increased organic SG&A operating expenses, primarily compensation and professional. Net loss was $18.4 million or negative $2.42 per diluted earnings per share for the fourth quarter of fiscal 2025 compared to $1 million or a loss of 13 cents per share per diluted share for the fourth quarter of fiscal 2024.
Roger: 241, 1% from 35, 9% and held at 41, 1% for both fiscal years 2025 and 2024.
Roger: Operating expenses increased by $4 $3 million or 29, 7% from $14 5 million to $18 8 million in the fourth quarter of fiscal 2025, and by $22 2 million or 49, 1% from $45 2 million in the fiscal year 2020.
Roger: Four to $67 4 million in fiscal 2025, due to inorganic growth acquisition expenses restructuring and other nonrecurring expenses and increased organic SG&A operating expenses, primarily compensation and professional fees.
Roger: Net loss was $18 4 million or negative $2 42 per diluted earnings per share for the fourth quarter and fiscal 2025 compared to $1 million or a loss of 13 cents per share per diluted share for the fourth quarter and fiscal 2024.
Roger Shannon: For fiscal 2025, net loss was $18.1 million, or $2.43 per diluted earnings per share, compared to net income of $5.4 million, or $0.72 per diluted earnings per share, for fiscal year 2024.
Roger: For fiscal 2025, net loss was $18 1 million or $2 43 per diluted earnings per share compared to net income of $5 4 million or <unk> 72 cents per diluted earnings per share for fiscal year 2024.
Roger Shannon: Both Q4 in fiscal 2025 were affected by a $10.5 million goodwill impairment at EGLE and Pacific Helmets and a $7.6 million write-off of our investment in body trauma. Adjusted EBITDA excluding FX was $6.1 million for the quarter and $17.4 million for the full fiscal year 2025.
Roger: Both Q4 in fiscal 2025 were affected by a $10 $5 million goodwill impairment at Eagle and Pacific helmets, and a $7 6 million write off of our investment in body track.
Roger: Adjusted EBITDA, excluding FX was $6 1 million for the quarter and $17 $4 million for the full fiscal year 2025.
Roger Shannon: Cash and cash equivalents were $17.5 million on January 31, 2025, compared to $25.2 million on January 31, 2024. Looking at our fourth fiscal quarter of 2025, net sales were $46.6 million for the fourth quarter fiscal 2025, an increase of $15.4 million or 49.3 percent compared to $31.2 million for the fourth quarter of fiscal 2024. Sales from our recent acquisitions accounted for $12.1 million at the increase, while organic sales increased $3.3 million or 11% over the prior year. Sales of the fire services product line increased $14.7 million year over year due to $8.2 million in sales from LHD acquired in July 2024 and organic fire services growth of $2.6 million.
Roger: Cash and cash equivalents were $17 $5 million on January 31, 2025, compared to $25 $2 million on January 31 2024.
Roger: Looking at our fourth fiscal quarter of 2025 net sales were $46 6 billion for the fourth quarter fiscal 2025, an increase of $15 4 million or 49, 3% compared to $31 2 million for the fourth quarter and fiscal 2024.
Roger: Sales from our recent acquisitions accounted for $12 $1 million of the increase while organic sales increased $3 $3 million or 11% over the prior year.
Roger: Sales to the fire services product line increased $14 $7 million year over year due to $8 $2 million in sales from LHC acquired in July 2024, and organic fire services growth of $2 6 million.
Roger Shannon: Jolly acquired in February of 2024, also contributed to our growth in fire service. The significant increase in fire services was complemented by a $1.5 million or 12% increase in disposable sales.
Roger: Jolley acquired in February of 2024 also contributed to our growth in fire services.
Roger: The significant increase in fire services complemented by $1.5 million or 12% increase in disposable sales.
Roger Shannon: primarily in the U.S., partially offset by seasonal weakness in high performance in woven. On a consolidated basis, for the fourth quarter of fiscal year 2025, domestic sales were $18.3 million, or 39% of total revenues, and international sales were $28.3 million, or 61% of total revenues, as our recent acquisitions continue to skew growth internationally. This compares with domestic sales of $12.7 million, or 41% of the total, and international sales of $18.5 million, or 59%, in the fourth quarter of fiscal 2024. Gross profit for the fourth quarter of fiscal 2025 was $18.7 million, an increase of $7.5 million, or 67%, compared to $11.2 million for the fourth quarter of fiscal 2024.
Roger: Primarily in the U S, partially offset by seasonal weakness in high performance and woven.
Roger: On a consolidated basis for the fourth quarter of fiscal year 2025, domestic sales were $18 3 million or 39% of total revenues and international sales were $28 3 million or 61% of total revenues as our recent acquisitions continued to skew growth.
Roger: Wally.
Roger: This compares with domestic sales of $12 7 million or 41% of the total and international sales of $18 5 million or 59% in the fourth quarter and fiscal 2024.
Roger: Gross profit for the fourth quarter and fiscal 2025 was $18 $7 million, an increase of $7 5 million or 67% compared to $11 2 million for the fourth quarter of fiscal 2024.
Roger Shannon: Gross profit as a percentage of net sales increased to 40.1% for the fourth quarter of fiscal 2025 from 35.9% for the fourth quarter of fiscal 2024. Gross margin percentage increased in the fourth quarter of fiscal 2025 due to strong organic sales results, partially offset by lower gross margins from our recent acquisition. Organic gross margin percentage increased to 48.5% from 35.8% for the fourth quarter of fiscal 2024, due primarily to a 2.2 million dollar reversal of profit in the inventory and positive product Operating expenses increased by $4.3 million or 29.7% from $14.5 million for the fourth quarter of fiscal 2024 to $18.8 million for the fourth quarter of fiscal 2025.
Roger: Gross profit as a percentage of net sales increased to 41% for the fourth quarter of fiscal 2025 from 35, 9% for the fourth quarter of fiscal 2024.
Roger: Gross margin percentage increased in the fourth quarter of fiscal 2025 due to strong organic sales results, partially offset by lower gross margins from our recent acquisitions.
Roger: Organic gross margin percentage increased to 48, 5% from 35, 8% for the fourth quarter and fiscal 2024.
Roger: Due primarily to a $2 $2 million reversal of profit at any inventory and positive product mix.
Roger: Operating expenses increased by $4 3 million or 29, 7% from $14 $5 million for the fourth quarter of fiscal 2024.
Roger: The $18 8 million for the fourth quarter of fiscal 2025.
Roger Shannon: Operating expenses increased due to inorganic growth, acquisition expenses, various non-recurring expenses, and increased organic SG&A operating expenses, primarily compensation of professional Adjusted operating expenses increased $3 million, primarily due to inorganic growth. Operating loss was $10.7 million for the fourth quarter of fiscal 2025 compared to an operating loss of $3.3 million for the fourth quarter of fiscal 2024.
Roger: Operating expenses increased due to inorganic growth acquisition expenses, various nonrecurring expenses and increased organic SG&A operating expenses, primarily compensation and professional fees.
Roger: Okay.
Roger: Adjusted operating expenses increased $3 million, primarily due to inorganic growth.
Roger: Operating loss was $10 $7 million for the fourth quarter of fiscal 2025 compared to an operating loss of $3 3 million for the fourth quarter fiscal 2024.
Roger Shannon: due primarily to impairments of goodwill at our EGLE and Pacific subsidiaries into the above-mentioned impact. Operating margins were negative 22.9 million dollars for the fourth quarter of fiscal 25 compared to negative 10.5 for the fourth quarter of fiscal 2024. Net loss for the quarter was $18.4 million, or negative $2.42 per diluted earnings per share, for the fourth quarter of fiscal 2025, compared to $1 million in the prior year, primarily due to non-cash goodwill impairment at Eagle and Pacific Helmets and an equity investment impairment related to the investment in BodyTrack, which has generated losses since initial acquisition and has required repeated rounds of financing to maintain operation.
Due primarily to impairments of goodwill at our Eagle and Pacific subsidiaries into the above mentioned impacts.
Roger: Operating margins were negative $22 9 million for the fourth quarter and fiscal 'twenty five compared to negative $10 five for the fourth quarter of fiscal 2024.
Roger: Net loss for the quarter was $18 $4 million or a negative $2 42 per diluted earnings per share for the fourth quarter of fiscal 2025 compared to $1 million in the prior year, primarily due to noncash goodwill impairment at Eagle and Pacific helmets and equity impairment.
Roger: Equity investment impairment related to the investment in body track, which is generated losses. Since this initial acquisition and his required repeated rounds of financing to maintain operations.
Roger Shannon: In February 2025, BODYTRACK entered insolvency proceedings in the United Kingdom. Through January 31, 2025, we recognized a total of 1.5 million in losses from our investment in body. As of January 31, 2025, we recorded an impairment loss of $7.6 million for the remaining recorded value of the equity method in convertible notes invested.
Roger: In February 2025 body track entered insolvency proceedings in the United Kingdom.
Roger: Through January 31, 2025, we recognized a total of $1 5 million in losses from our investment in body track.
Roger: As of January 31, 2025, we recorded an impairment loss of $7 6 million for the remaining recorded value the equity method and convertible notes investment.
Roger Shannon: as part of the liquidation process. We secured the intellectual property rights and all existing inventory, and we intend to devote some resources to BodyTrak in a way that does not take away from our core business, as we believe it is a viable connected worker workplace safety system that has not been properly positioned. Adjusted EBITDA excluding FX for the fourth quarter of fiscal year 2025 was $6.1 million, an increase of $2.7 million or 79.4 percent compared to $3.4 million for the fourth quarter of fiscal year 2024. The increase was driven by higher revenue, including contributions from LHD, the expected reversal of profit in ending inventory, and margin improvements in our organic sales mix, partially offset by higher manufacturing.
Roger: As part of the liquidation process.
Roger: We secured the intellectual property rights and all existing inventory and we intend to devote some resources to body track in a way that does not take away from our core business. As we believe it is a viable connected worker workplace safety system that has not been properly positioned.
Roger: Adjusted EBITDA, excluding FX for the fourth quarter of fiscal year, 2025 was $6 1 million, an increase of $2 7 million or 79, 4% compared to $3 4 million for the fourth quarter and fiscal year 2024.
Roger: The increase was driven by higher revenue, including contributions from LH D. The.
Roger: The expected reversal of profit in ending inventory and margin improvements in our organic sales mix, partially offset by higher manufacturing expenses.
Roger Shannon: Moving on to our fiscal full year 2025 results, net sales were $167.2 million for the fiscal year 2025, an increase of $42.5 million or 34.1% compared to $124.7 million for the fiscal year 2024. Fire services line was a key driver of revenue growth, increasing $36.5 million or 137.7% year over year. The execution of the company's acquisition strategy and the acquisitions of Pacific in November 2023 and Jolly, LHD, and Viridian in FY25 accounted for $33.1 million in the increase. The significant increase in fire services was complemented by an $8.1 million increase in our wovens, disposables, and chemical products, partially offset by a $1.1 million decline in our high-visibility process.
Roger: Moving on to our fiscal full year 2025 results net sales were $167 $2 million for the fiscal year 2025, an increase of $42 5 million.
Roger: 34, 1% compared to $124 7 million for fiscal year 2024.
Roger: Fire services line was a key driver of revenue growth, increasing $36 5 million or 137, 7% year over year.
Roger: The execution of the Companys acquisition strategy and the acquisitions of Pacific in November 2023, and Jolly LHC and Meridian in FY 'twenty five.
Roger: Accounted for $33 $1 million of the increase.
Roger: The significant increase in fire services was complemented by an $8 $1 million increase in our woven disposables and chemical products, partially offset by a $1 $1 million decline in our high visibility products.
Roger Shannon: On a consolidated basis for the fiscal year 2025, domestic sales were $60.4 million or 36% of total revenue. and international sales were $106.8 million or 64% of total revenue. as our recent acquisitions continue to skew growth internationally. This compares with domestic sales of $55.2 million or 44% of the total and international sales of $69.5 million or 56% of the total in fiscal year 2024. Gross profit from fiscal year 2025 was $68.7 million, an increase of $17.5 million, or 34.2%, compared to $51.2 million for fiscal year 2024. Gross profit as a percentage in net sales was 41.1% for fiscal years 2025 and 2024.
Roger: On a consolidated basis for the fiscal year 2025, domestic sales were $60 4 million or 36% of total revenues.
Roger: And international sales were $106 8 million or 64% of total revenues.
Roger: As our recent acquisitions continue to skew growth internationally.
Roger: This compares with domestic sales of $55 2 million or 44% of the total.
Roger: And international sales of $69 5 million or 56% of the total in fiscal year 2018 before.
Roger: Gross profit for the fiscal year 2025 was $68 7 million, an increase of $17 5 million or <unk> 34, 2% compared to $51 2 million for fiscal year 2024.
Roger: Gross profit as a percentage of net sales was 41, 1% for fiscal years 2025 and 2024.
Roger Shannon: Organic gross margin percentage increased to 45.3% from 41.1% for fiscal year 2024, driven by increases in fire services and favorable product Operating expenses increased by $22.2 million, or 49.1%, from $45.2 million for fiscal year 2024 to $67.4 million for fiscal year 2025. Operating expenses increased due to inorganic growth, acquisition expenses, restructuring, and other non-recurring expenses, and increased organic SG&A operating expenses, primarily compensation and professional fees. Adjusted operating expenses increased from $38.9 million in FY24 to $53.7 million in FY25, driven by inorganic growth, higher sales expenses from increased revenue, and higher compensation of professional fees. Operating loss was $9.3 million for fiscal year 2025 compared to operating profit of $6 million for fiscal year 2024 due to the above-mentioned impact.
Roger: Organic gross margin percentage increased to 45, 3% from 41, 1% for fiscal year 2024, driven by increases in fire services and favorable product mix.
Roger: Operating expenses increased by $22 2 million or <unk> 49, 1% from $45 2 billion.
Roger: For the fiscal year 2024 to $67 4 million for fiscal year 2025.
Roger: Operating expenses increased due to inorganic growth acquisition expenses restructuring and other nonrecurring expenses and increased organic SG&A operating expenses, primarily compensation and professional fees.
Roger: Adjusted operating expenses increased from $38 $9 million in FY 'twenty four to $53 $7 million in FY 'twenty five driven by inorganic growth higher sales expenses from increased revenue and higher compensation and professional fees.
Roger: Operating loss was $9 3 million for fiscal year 2025, compared to operating profit of $6 million for fiscal year 2024.
Roger: Due to the above mentioned impacts.
Roger Shannon: Operating margins were minus 5.5% for the fiscal year 2025 compared to 4.8% for fiscal year 2024. Net loss was $18.1 million or negative $2.43 per diluted earnings per share for the fiscal year 2025 compared to net income of $5.4 million or 72 cents per diluted earnings per share for fiscal year 2024. Adjusted EBITDA excluding FX for the fiscal year 2025 was $17.4 million, an increase of $1.7 million or 10% compared with $15.7 million for fiscal year 2024. The increase was driven by higher revenue, including contributions from LHD, and margin improvements in our organic sales mix, partially offset by higher SG&A expenses and the impacts of foreign exchange.
Roger: Operating margins were minus five 5% for fiscal year 2025, compared to four 8% for fiscal year 2024.
Roger: Net loss was $18 1 million or negative $2 43 per diluted earnings per share for the fiscal year 2025, compared to net income of $5 4 million or 72 cents per diluted earnings per share for fiscal year 2024.
Roger: Adjusted EBITDA, excluding FX for the fiscal year 2025 was $17 4 million, an increase of $1 7 million.
Roger: Or 10% compared with $15 7 million for fiscal year 2024.
Roger: The increase was driven by higher revenue, including contributions from <unk> HD and margin improvements in our organic sales mix, partially offset by higher SG&A expenses and the impacts of foreign exchange.
Roger Shannon: Cash and cash equivalents were $17.5 million on January 31, 2025, and working capital was approximately $101.6 million. Cash and cash equivalents decreased by $7.7 million and working capital increased by $18.4 million from January 31, 2024, reflecting the impact of the company's acquisition strategy with the purchase of Jolly, LHD, and Viridian in 2025. Net cash used in operating activities was $15.9 million in the year ended January 31, 2025, compared to net cash provided of $10.9 million in the year ended January 31, 2024. The increase was driven by increases in working capital, primarily due to the inventory buildup in preparation for forecasted increases in sales in the first half of fiscal 2026.
Roger: Cash and cash equivalents were $17 $5 million on January 31, 2025, and working capital was approximately $101 6 million cash.
Roger: Cash and cash equivalents decreased by $7 $7 million in working capital increased by $84 million from January 31, 2024, reflecting the impact of the Companys acquisition strategy with the purchase of <unk> HD and viridian in 2025.
Roger: Net cash used in operating activities was $15 $9 million in the year ended January 31, 2025, compared to net cash provided of $10 $9 million in the year ended January 31 2024.
Roger: The increase was driven by increases in working capital primarily due to the inventory buildup in preparation for forecasted increases in sales in the first half of fiscal 2026.
Roger Shannon: A large increase in accounts receivable resulting from LHD's catch-up of a multi-year backlog and the delayed shipment of a large boot order from Jolly. As we collect on these sales, we expect this cash to be recovered in the first half of fiscal year 2026. Revenue for the trailing 12 months into January 31st, 2025 is $167.2 million or an increase of $42.5 million or 34% versus the FY24 TTM revenue of $124.7. with our recent fire services acquisition supporting Lakeland's continued revenue growth. Trailing 12 months adjusted EBITDA excluding the impacts of FX was $17.4 million. This increase of $1.7 million or 10% versus full year of fiscal 2024.
Roger: The large increase in accounts receivable, resulting from <unk> catch up of a multiyear backlog.
Roger: And the delayed shipment of a large big quarter from Jolly.
Roger: As we collect on these sales we expect this cash to be recovered in the first half of fiscal year 2026.
Roger: Revenue for the trailing 12 months ended January 31, 2025 to $167 2 million or an increase of $42 5 million or 34%.
Roger: Versus the FY 'twenty for TTM revenue at $124 seven.
Roger: With our recent fire services acquisitions supporting Lakeland has continued revenue growth.
Roger: Trailing 12 months suggested EBITDA, excluding the impacts of FX was $17 4 million.
Roger: This increase of $1 7 million or 10% versus full year of fiscal 2024.
Roger Shannon: The shortfall in our annual adjusted EBITDA guidance was the direct result of the slippage of a large boot order at Jolly into fiscal year 2026. Taking into account that we completed four major acquisitions in the past 12 months, the full integration and implementation of which does take some time, we believe those benefits will begin translating into even greater improved financial performance that will be recognized in the coming fiscal year. Our fourth quarter consolidated gross margin increased by 420 margin points versus Q4 of last year to 40.1 percent due to improved organic margin, the profit in ending inventory reversal and the impact of inventory write-off in the fourth quarter of last year, partially offset by lower inorganic gross margin, higher manufacturing and freight costs.
Roger: The shortfall in our annual adjusted EBITDA guidance was the direct result of the slippage of a large boot order is jolly into fiscal year 2026.
Roger: Taking into account that we completed four major acquisitions in the past 12 months, the full integration and implementation of which does take some time, we believe those benefits will begin translating into even greater improved financial performance that will be recognized in the coming fiscal year.
Roger: Our fourth quarter consolidated gross margin increased by 420 margin points versus Q4 of last year to 41% due to improved organic margin.
Roger: Profit in ending inventory reversal and the impact to the inventory write off in the fourth quarter of last year, partially offset by lower inorganic gross margin higher manufacturing and freight costs.
Roger Shannon: Meanwhile, organic gross margins saw a strong improvement from 35.8% to 48.5% year over year due to a positive product mix and the reversal of the previously mentioned profit-ending inventory. Gross profit as a percentage of net sales was 41.1% for fiscal years 2025 and 2024. Organic gross margin increased from 45.3% increased to 45.3% from 41.1% for fiscal year 2024 driven by increases in fire services and a favorable product Adjusted EBITDA excluding FX for the fourth quarter of fiscal year 2025 was $6.1 million, an increase of $2.7 million or 79.4 percent compared to $3.4 million for the fourth quarter of fiscal year 2024.
Roger: Meanwhile, organic gross margins saw a strong improvement from 35 to an 8% to 48, 5% year over year due to a positive product mix and the reversal of the previously mentioned profit and in the inventory.
Roger: Gross profit as a percentage of net sales was 41, 1% for fiscal years 2025 in 2024 orgs.
Roger: Organic gross margin increased from 45, 3% increased 245, 3% from 41, 1% for fiscal year 2024, driven by increases in fire services and a favorable product mix.
Roger: Adjusted EBITDA, excluding FX for the fourth quarter fiscal year, $2025 $6 1 million.
Roger: An increase of $2 7 million or 79, 4% compared to $3 4 million for the fourth quarter of fiscal year 2020 for.
Roger Shannon: The increase was driven by higher revenue, including contributions from LHD, the expected reversal of profit at ending inventory, and margin improvements in our organic sales mix, partially offset by higher manufacturing costs.
Roger: The increase was driven by higher revenue, including contributions from <unk> HD. The expected reversal of profit it ending inventory and margin improvements in our organic sales mix, partially offset by higher manufacturing cost.
Roger Shannon: Reviewing our performance, while we saw significant revenue growth overall, we continue to face some challenges that impacted our results, yet we remain confident in our full year projection. In the fourth quarter, Jolly had substantial fire orders delayed to the first half of fiscal year 2026. Our most recent acquisition, Viridian, contributed $1.9 million in the fourth quarter. Revenues for LHD, Jolly, Pacific Helmets, and Viridian were a combined $13.2 million, and we expect those to accelerate as we deliver on open orders and cross-selling opportunities.
Roger: Reviewing our performance, while we saw significant revenue growth overall, we continue to face some challenges that impacted our results yet we remain confident in our full year projections.
Roger: In the fourth quarter <unk> had substantial fire orders delayed to the first half of fiscal year 2026.
Roger: Our most recent acquisition viridian contributed $1 $9 million in the fourth quarter.
Roger: Revenues for LHC, Jolly Pacific helmets, and Viridian, we're a combined $13 $2 million and we expect those to accelerate as we deliver on open orders and cross selling opportunities.
Roger Shannon: Looking at our organic business, our Latin American operations decreased $7 million in sales year-over-year due to customer seasonal buying patterns. The TAM now represents 13% of Lakeland's total sales, and they continue to grow. Our outstanding Latin American team is continually identifying and capitalizing on new market opportunities, and we expect further growth in that region. We're working to expand our fire services offering in the TAM, and we expect to introduce new industrial products from the Lakeland portfolio into that region going forward. We've also recently put our Mexico sales operations under our entertainment management team and we're optimistic that they can replicate their success in that country.
Roger: Looking at our organic business, our Latin American operations decreased $7 million in sales year over year due to customer seasonal buying patterns.
Roger: <unk> now represents 13% of Lakeland total sales and they continue to grow.
Roger: Our outstanding Latin American team is continually identifying and capitalizing on new market opportunities and we expect further growth in that region.
Roger: We are working to expand our fire services offering and the Tam.
Roger: And we expect to introduce new industrial products from the legacy portfolio into that region going forward.
Roger: We've also recently put our Mexico sales operations under our senior management team and were optimistic that they can replicate their success in that country.
Roger Shannon: However, our Q4 sales in Mexico were down 15% year over year, where we are in the process of making sales team enhancements.
Roger: However, our Q4 sales in Mexico were down 15% year over year, where we are in the process of making sales team enhancements.
Roger Shannon: We also saw sales decrease year over year in Asia. We are very excited about the new sales leadership we've put in place in Asia. We're encouraged by the growth we're seeing both in China and in the new Asian markets outside of China. Our European revenue, including EGLE, JALI, and our recently acquired LHD business grew by $10.8 million, or 292% to $14.5 million. We see very good sales opportunities in Europe and are committed to its growth trajectory.
Roger: We also saw sales decrease year over year in Asia.
Roger: We are very excited about the new sales leadership, we've put in place in Asia.
Roger: We're encouraged by the growth, we're seeing both in China and in the New Asian markets outside of China.
Roger: Our European revenue, including Eagle Jolly and our recently acquired <unk> business grew by $10 8 million or 292% to $14 $5 million.
Roger: We see very good sales opportunities in Europe and are committed to its growth trajectory.
Roger Shannon: Following a slowdown in the second quarter due to our line drive transition, we were pleased to see our U.S. revenue rebound to $18.3 million, or 36%, driven by continued growth in our Lakeland Fire Services business and in disposable. Regarding product mix for the fourth quarter, our fire services business grew $14.7 million or 226% versus the same period last year, driven by our recent LHD acquisition and organic gains in the U.S. and from EGLE as we start to see gains from our head-to-toe strategy. Our industrial product lines grew $700,000, or 3%, over the same period last year, led by disposables, which grew 12% and represented 38% of the revenue for the quarter.
Roger: Following a slowdown in the second quarter due to our line draw transition. We were pleased to see our U S revenue rebound to $18 3 million or 36% driven by continued growth in our Lakeland fire services business and in disposables.
Roger: Regarding product mix for the fourth quarter, our fire services business grew to $14 7 million or 226% versus the same period last year driven by our recent <unk> acquisition and organic gains in the U S and from Eagle as we start to see gains from our head to toe strategy.
Roger: Our industrial product lines grew $700000 or 3% over the same period last year led by disposables, which grew 12% and represented 38% of the revenue for the quarter.
Roger Shannon: Chemicals represented 10% of revenue for the quarter, while the remainder of our industrial products, including FRAR, high-performance and high-vis, accounted for 15% of sales.
Roger: Chemicals represented 10% of revenue for the quarter, while the remainder of our industrial products, including FRE, Our high performance and high this accounted for 15% of sales.
Roger Shannon: Now turning to the balance sheet, Lakeland ended the quarter with cash and cash equivalents of approximately $17.5 million and long-term debt of $16.4 million. This compares to $15.8 million in cash and $31.1 million in long-term debt as of October 31, 2024. The decrease in cash was primarily due to the buildup of inventory for 2026 growth initiatives, tariff mitigation, and the JOLI backlog.
Roger: Now turning to the balance sheet.
Roger: <unk> ended the quarter with cash and cash equivalents of approximately $17 $5 million and long term debt of $16 4 million.
Roger: This compares to $15 $8 million in cash and $31 1 million in long term debt as of October 31 2024.
Roger: The decrease in cash was primarily due to the buildup of inventory for 2026 growth initiatives tariff mitigation and the Jolly backlog.
Roger Shannon: On January 24, 2025, we closed a public offering of common stock and full exercise of underwriters' option to purchase additional shares with gross proceeds of approximately $46 million. We use the net proceeds of the offering to pay down the outstanding principal under our loan agreement. As of January 31st, 2025, we had borrowings of $13.2 million outstanding under the revolving credit facility, and there was $26.8 million of additional available credit under the loan agreement. Net cash used in operating activities was $15.9 million in the year ended January 31, 2025, compared to net cash provided of $10.9 million in the year ended January 31, 2024.
Roger: On January 24, 2025, we closed a public offering of common stock and full exercise of underwriters option to purchase additional shares with growth gross proceeds of approximately $46 million.
Roger: We used the net proceeds of the offering to pay down the outstanding principal under our loan agreement.
Roger: As of January 31, 2025, we had borrowings of $13 $2 million outstanding under the revolving credit facility.
Roger: And there was $26 $8 million of additional available credit under the loan agreement.
Roger: Net cash used in operating activities was $15 $9 million in the year ended January 31, 2025 compared to net cash provided of $10 9 million in the year ended January 31 2024.
Roger Shannon: The increase was driven by an increase in net inventories of $14.2 million, an increase in accounts receivable of $2.8 million, and an increase in net income. Reduction in accrued expenses and other liabilities of $3.5 million offset by an increase in accounts payable of $6 million.
Roger: The increase was driven by an increase in net inventories of $14 2 million an increase in accounts receivable of $2 $8 million.
Roger: Reduction in accrued expenses and other liabilities of $3 5 million offset by an increase in accounts payable of $6 million.
Roger Shannon: Capital expenditures were $1.9 million for the year ended January 31st, 2025, primarily for manufacturing. With respect to cash usage, although elevated during the quarter, this suggests strong demand from our customers as the usage was driven by increases in working capital of $18.4 million, primarily due to a built-in inventory in preparation for the forecasted increase in sales in the first half of FY26 and the impact of clearing approximately 85% of the multi-year backlog at LHD, which we expect to recover in the first half of fiscal 2026. At the end of Q4, inventory was $82.7 million, up from $72.7 million at the end of Q3 FY 2025.
Roger: Capital expenditures were $1 $9 million for the year ended January 31, 2025, primarily for manufacturing equipment.
Roger: With respect to cash usage, although elevated during the quarter. This suggest strong demand from our customers as the usage was driven by increases in working capital of $18 4 million, primarily due to a build in inventory in preparation for the forecasted increase in sales in the first half of that 526 and the impact of clearing.
Roger: Really 85% of the multiyear backlog at <unk>, which we expect to recover in the first half of fiscal 2026.
Roger: At the end of Q4 inventory was $82 7 million up from $72 7 million at the end of Q3 fiscal year 2025, due to the inventory build in preparation for the forecasted increases in sales in the first half of fiscal 'twenty six.
Roger Shannon: Due to the inventory build in preparation for the forecasted increases in sales in the first half of FY 26, A large increase in AR resulting from LHD's catch-up of a multi-year backlog and the delayed shipment of a large food order from Jolly and tariff mitigation initiatives.
Roger: A large increase in <unk>, resulting from Lhc's catch up of multiyear backlog and the delayed shipment of a large food order from Jolly and tariff mitigation initiatives.
Roger Shannon: January 31. 2024. Inventory of acquired companies total $24.4 million. Year over year, we saw an increase in our organic inventory of $8 million versus the quarter ended January 31st, 2024. Organic finished goods were $28.7 million in Q4 2025, up $3.5 million year-over-year and up $2.3 million quarter-over-quarter. Organic raw materials were $28.5 million in Q4 2025, up $3.9 million year-over-year and up $600,000 quarter-over-quarter.
Roger: <unk> 31.
Roger: 2020 for inventory of acquired companies totaled $24 4 million.
Roger: Year over year, we saw an increase in our organic inventory of $8 million versus the quarter ended January 31 2024.
Roger: Organic finished goods were $28 $7 million in Q4, 2025 up $3 $5 million year over year, and up $2 3 billion quarter over quarter.
Roger: Organic raw materials were $28 $5 million in Q4, 2025 up $3 $9 million year over year and up $600000 quarter over quarter.
Roger Shannon: Now turning to our fiscal 2026 guide. Based on our current backlog of orders and current expectations, we expect FY 2026 revenue of $210 to $220 million. This revenue expectation includes the recent Viridian LHD, Jolly Scarpae, and Pacific Hellman acquisitions. We expect FY 2026 adjusted EBITDA, excluding any material negative impact from foreign exchange, of $24 to $29 million. This expectation also includes the Viridian, LHC, Jolly Scarpa, and Pacific Helmets acquisitions.
Roger: Now turning to our fiscal 2026 guidance.
Roger: Based on our current backlog of orders and current expectations, we expect FY 2026 revenue of $210 million to $220 million.
Roger: This revenue expectation includes the recent viridian LHC jellies scarp a M Pacific Helman acquisitions.
Roger: We expect FY 2026, adjusted EBITDA, excluding any material negative impact from foreign exchange of 24% to $29 million. This expectation also includes the viridian LHC Jai Scarfpin Pacific elements acquisitions.
Jim Jenkins: With that overview, I'd like to turn the call back over to Jim before we begin taking questions. Thank you, Roger. I'll conclude by saying that we continue to demonstrate strong net sales growth driven by 10% sequential and significant 226% year-over-year increase in our fire services line and rebounding global growth across Europe, Asia, and Latin America. As I previously mentioned, near term our strategy is to leverage a leading market position in fire protection, premium brands, and M&A to accelerate profitable growth in a higher margin $2 billion fire protection sector in the largest global markets. Our long-term strategy is to grow both our fire services and industrial PPE verticals with our strategically located company-owned capital light model focusing on operating and manufacturing efficiencies to achieve higher margins with positioning to grow faster than the market served.
Roger: With that overview I'd like to turn the call back over to Jim before we begin taking questions.
Jim Jenkins: Thank you Roger.
Jim Jenkins: I'll conclude by saying that we continue to demonstrate strong net sales growth driven by 10% sequential and significant 226% year over year increase in our fire services line and rebounding global growth across Europe, Asia, and Latin America and.
Jim Jenkins: As I previously mentioned near term our strategy is to leverage our leading market position in fire protection premium brands.
Jim Jenkins: In M&A to accelerate profitable growth in our higher margin $2 billion of fire protection sector.
Jim Jenkins: The largest global markets. Our long term strategy is to grow both our fire services and industrial PPE verticals with our strategically located company owned capital light model, focusing on operating and manufacturing efficiencies to achieve higher margins with positioning to grow faster than the market served with a fortified balance sheet.
Jim Jenkins: With a fortified balance sheet from our recent $46 million oversubscribed capital raise and growing top-line revenue in our fire services and industrial verticals combined with operating and manufacturing efficiencies, we are targeting fiscal year 2026 revenue of $210 to $220 million and adjusted EBITDA excluding FX of $24 to $29 million.
Jim Jenkins: From our recent $46 million oversubscribed capital raise and growing top line revenue and our fire services and industrial verticals combined with operating and manufacturing efficiencies. We are targeting fiscal year 2026 revenue of $210 million to $220 million.
Jim Jenkins: And adjusted EBIT, excluding FX of 24% to $29 million.
Jim Jenkins: Before we move on to Q&A, I'd like to take a moment to address the Goodwill Impairment Charge we recorded this quarter related to EGLE and Pacific Helmets, as well as the equity investment write-off of BodyTrack. We invested in BodyTrack in early calendar 2021 when we were flush with COVID cash. We viewed it as a venture investment in the connected workplace. We believe the product remains cutting edge, but the sales strategy needs improvement. Once we secure the IP and other assets, we intend to focus on a strategy to monetize BodyTrack. This could include patent infringement enforcement, a modified channel strategy with specific end users in the Middle East and Latin American markets, where worker safety in high temperature environments is vitally important for employers to understand on a real-time basis.
Jim Jenkins: Before we move onto Q&A.
Speaker Change: I'd like to take a moment to address the goodwill impairment charge, we recorded this quarter related to Eagle and Pacific helmets, as well as the equity investment write off a body track.
Speaker Change: We invested in body track in early calendar 2021, when they were flushed with Covid cash we viewed it as the best as a venture investment in the connected workplace. We believe the product remains cutting edge, but the sales strategy needs improvement once we security IP and other assets will tend to focus on our strategy to monetize body track. This could include.
Speaker Change: Patent infringement enforcement, a modified channel strategy with specific end users in the middle East and Latin American markets, where worker safety and high temperature environments is vitally important for employers to understand on a real time basis.
Jim Jenkins: About EGLE, the goodwill impairment really reflects the fact that a substantial amount of the purchase price was allocated to goodwill given that EGLE had very few fixed assets utilizing a subcontractor manufacturing model. There is also a certain lumpiness associated with EGLE's primary tender business. In fiscal year 2024, EGLE exceeded our forecast for it but missed an aggressive earn-out target. That earn-out, $3.5 million, was then added to an already significant goodwill number. Eagle performed profitably for us in fiscal year 2025 but missed its targets and sales were lower against fiscal year 2024, thus the write-off. We believe as we continue to introduce Eagle in markets they were not otherwise selling in, Black Tam and Asia specifically, the lumpiness associated with Eagle's tender business will With respect to both EGLE and Pacific Helmet, some of the impairment related to certain intercompany sales that excluded a substantial amount of their respective gross margin.
Speaker Change: About eagle the goodwill impairment really reflects the fact that a substantial amount of the purchase price was allocated to goodwill given that eagle had very few fixed assets utilizing a subcontractor manufacturing model.
Speaker Change: There was also a certain lumpiness associated with Eagle's primary tender business in fiscal year 2024 exceeded our forecast for it but missed an aggressive earn out target that earn out $3 $5 million with an added to an already significant goodwill number.
Speaker Change: Eagle performed properly profitably for us in fiscal year 2025, but missed this targets and sales were lower against fiscal year 2024. Thus the write offs. We believe as we continue to introduce Eagle in markets, we're not others.
Speaker Change: Selling in Latam and Asia, specifically, the Lumpiness associated with Eagle's tender business will ease.
Speaker Change: With respect to both Egon Pacific held at some of the impairment related to certain intercompany sales that excluded a substantial amount of their respective gross margins.
Jim Jenkins: The non-cash adjustments resulted from a routine valuation reassessment under current market conditions at a moment in time. It's important to emphasize that this change does not reflect a decline in our confidence in the strategic value of EGLE or Pacific Helmets, nor does it impact our cash flow, liquidity, or ability to invest in future growth.
Speaker Change: The noncash adjustments resulted from a routine valuation reassessment under current market conditions at any moment in time.
Speaker Change: It's important to emphasize that this change does not reflect a decline in our confidence in the strategic value of Eagle or Pacific comments, nor does it impact our cash flow liquidity or ability to invest in future growth.
Jim Jenkins: As for Pacific Helmets, the underlying fundamentals of the acquired business remain solid and it continues to align well with our long-term vision. Since the acquisition, we've seen encouraging performance, potential, and opportunities to unlock greater synergy. To ensure we're driving the most value from this asset, we've taken several key actions. We've refined our integration plan to sharpen execution and improve cost efficiency. To that end, we've hired a Lean Six Sigma black belt to drive Lean Six Sigma throughout the Pacific Helmet organization. We hired a managing director to lead these improvements. We have restructured certain parts of the business to better align with our growth priorities, including a rollout of a new wildland and structural helmet in the APAC region in time for the next tender season in early calendar 2026.
Speaker Change: For Pacific helmets, the underlying fundamentals of the acquired business remains solid and continues to align well with our long term vision since the acquisition, we've seen encouraged encouraging performance potential and opportunities to unlock greater synergies to ensure we are driving the most value from this asset you've taken several key actions we've refined our inner.
Speaker Change: <unk> planned to sharpen execution and improved cost efficiency.
Speaker Change: And we've hired a lean six Sigma black belt to drive lean six Sigma throughout the Pacific talent organization we.
Speaker Change: We hired a managing director to lead these improvements we have restructured certain parts of the business to better align with our growth priorities, including a rollout of a new wildland and structural helmet in the APAC region in time for the next tender season in early calendar 2026. We also are reintroducing our civic helmet for the U S markets.
Jim Jenkins: We also are reintroducing our Pacific helmet for the U.S. markets at FDIC today, where Roger and I are at the moment. And we're closely monitoring Pacific performance metrics to ensure accountability and momentum. We believe these steps will enhance long-term value for our shareholders and strengthen our overall position in the market. This impairment charge reflects prudent accounting at a specific point in time, but our strategic focus remains unchanged, delivering a sustainable growth, disciplined capital management, and long-term shareholder value.
Speaker Change: I see today, where Roger and I are at the moment.
Speaker Change: And we're closely monitoring Pacific performance metrics to ensure accountability and momentum. We believe these steps will enhance long term value for our shareholders and strengthen our overall position in the market. This impairment charge reflects prudent accounting at a specific point in time, but our strategic focus remains unchanged delivering sustainable growth disciplined capital management.
Speaker Change: And long term shareholder value.
Operator: With that, we will now open the call for questions, operator. Thank you. We'll now be conducting a question and answer.
Speaker Change: With that we will now open the call for questions operator.
Speaker Change: Thank you, we'll now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Operator: If you would like to ask a question, please press star 1 on your telephone. The confirmation tone will indicate your line is in the You may press star 2 if you'd like to remove your question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. One moment, please, while we call for questions. Thank you.
Speaker Change: Confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing with Barclays.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: Thank you our first question from Mike <unk> with D. A Davidson. Please proceed with your question.
Mike Schliske: Our first question is from Mike Schliske with D.A. Davidson. Please proceed with your question. Good afternoon. Thank you for taking my question. Sorry for any background noise. We can't hear you all that well. I want to start with a question about the guidance that you put out. What date or even time of day was that guidance made? And are you... I guess, you know, I guess given what happened a few hours ago, do you think now things shift because of the way costs are going to go for the first quarter or two year? Are you pulling towards the higher end of guidance just from that alone?
Speaker Change: Good afternoon, taking my question sorry for any background noise can you hear me that all of that.
Speaker Change: Well.
Speaker Change: I wanted to start with a question about the guidance that you put out I guess.
Speaker Change: What date or even time of day was that guidance made.
Speaker Change: How are you.
Speaker Change: I guess I.
Speaker Change: I guess given what happened.
Speaker Change: Hours ago.
Speaker Change: Do you think now things just because of the costs are going to go to the first quarter of two year.
Speaker Change: Ah you're pointing towards the higher end of guidance just from that alone.
Jim Jenkins: Or just some thoughts as to where the, you know, key variables are on tariffs as to how that might turn out? That guidance did not change as a result of what happened today. And frankly, there's still that uncertainty. And I think the guidance stands as is. I mean, we're one tweet away from a 46% tariff again. So, you know, I guess I'm of the view at this point that we're sticking with our current guidance.
Speaker Change: Just your thoughts as to where the.
Speaker Change: Key variables as to how that might somehow.
Speaker Change: That guidance did not change as a result of what happened today.
Speaker Change: And frankly, there is still that uncertainty and I think the guidance stands as is.
Speaker Change: Once we get away from a 46% tariff again so.
Speaker Change: I guess I'm of the view at this point that we're sticking with our current guidance.
Roger Shannon: Can I ask... I would agree with that. You know, we, it's hard to know for minutes what's going to happen, but I think, you know, when we originally kind of thought about our guidance, anticipated it, you know, we, we, The combination of the mitigation steps that we had taken, you know, an optimism that there would be cooler heads prevailing, and the fact that we would pass along the increase to customers all kind of factored in. Now, you know, had the, or, you know, if the increased tariffs at the higher level take place, then, of course, you know, you could expect revenue numbers to be higher, but possibly the margins to be lower, and then, you know, adjusted EBITDA probably would still, well, it's just that it's kind of hard to model that, really, given all the different possibilities.
Speaker Change: Can I ask.
Speaker Change: Sorry, Matt.
Speaker Change: Okay.
Speaker Change: Agree with that.
Speaker Change: Great.
Speaker Change: We already.
Speaker Change: Hard to know for minutes bit of what's going to happen.
Speaker Change: When we originally kind of thought about our guidance anticipated it.
Speaker Change: We.
Speaker Change: Combination.
Speaker Change: Mitigation steps that we had taken.
Speaker Change: The optimism that there would be cooler heads prevailing and the fact that we would.
Speaker Change: Pass it along.
Speaker Change: The increase to two customers all kind of factored in now had had the ore.
Speaker Change: If the increased tariffs it at a higher level take place then.
Speaker Change: Of course, you could expect revenue numbers to be higher, but possibly the margins to be lower and then.
Speaker Change: Adjusted EBITDA, probably would still.
Speaker Change: Well I'll just.
Speaker Change: It's kind of hard to model that really given all the different possibilities. So, let's just kind of leave it with.
Roger Shannon: So, let's just kind of leave it with, you know, we're confident with the range that we gave at this point in time, and we'll continue to keep everyone updated as we go throughout the year. Cordly. Okay. That's fair.
Speaker Change: We're confident with the range that we gave at this point in time and we'll continue to keep everyone updated as we go throughout the year.
Speaker Change: Quarterly okay.
Speaker Change: That's fair that's fair and I just wanted to follow up on your comments earlier in the call and just at the very end there Jim about job.
Jim Jenkins: And I just want to follow up on your comments both earlier in the call and just at the very end there, Jim, about VoluTrack. I am relatively new here, so it sounds like you intend to revamp it or keep that going or is this more of a, hopefully, a profitable wind-up for that business? No, I think what we've done is we've basically taken the company's assets and we've got, we believe we've got an ability to utilize that asset in a way that, you know, it could be a revenue generator for us in a couple of different avenues.
Speaker Change: Hey track I am relatively new here so.
Speaker Change: It's not like you do.
Speaker Change: Tend to revamp it or.
Speaker Change: Or keep that going or is this more of a hopefully a profitable windup with that business.
Speaker Change: Thanks.
Speaker Change: What we've done is we've basically taken the company's assets and those we've got.
Speaker Change: We believe we've got an ability to utilize that asset in a way that it could be a revenue generator for us.
Speaker Change: And a couple of different avenues, obviously.
Jim Jenkins: Obviously, you know, when you take an asset like that with the multiple patents it has, you want to take a harder review as to, you know, whether anybody might be infringing that patent. There's certainly a way to monetize it that way. But I guess more importantly and the easiest way to monetize it, you know, is to sell it differently. You know, BodyTrack had a sales model that required, you know, the end user to pay a significant upfront fee, and that was a result of a balance sheet that couldn't support that kind of a relationship. So Roger and I are of the view that we're going to roll it out a little differently, a little more strategically in regions where the reception for it was relatively strong, and we're going to do it utilizing, you know, our financial strength and the relationships that we have with channel partners and end users to that end.
Speaker Change: When you take an asset like that with multiple patents. It has you want to take a harder review as to whether anybody might be infringing our patent and there is certainly a way to monetize it that way, but I guess more importantly in the easiest way to monetize it.
Speaker Change: Is to sell it differently.
Speaker Change: <unk> had sales model that required.
Speaker Change: The end user to pay a significant upfront fee and that was a result of a balance sheet that couldnt support that kind of a relationship.
Speaker Change: So Roger and I are of the view that we're going to roll it out a little differently, a little more strategically in regions, where the reception for it was relatively strong.
Speaker Change: And we're going to do it utilizing our financial strength.
Speaker Change: And the relationships that we have with channel partners and end users to that end I've already had a discussion with my Latam team, who is excited about our getting that asset in the door.
Roger Shannon: And I've already had a discussion with my LATAM team who is excited about our getting that asset in the door. I would just add that, you know, that BodyTrack was adding customers, you know, even in business, even through their last day of business, as a company like that grows, cash flow becomes an issue and, you know, for the factors that Jim just mentioned, we were willing to put more cash into their model and with the most recent rounds of investment that we did contribute was secure convertible loans. So that enabled us to, you know, to call that asset and to take that on.
Speaker Change: I would just add that.
Speaker Change: <unk> was adding customers.
Speaker Change: And the business even through the last day of dosing.
Speaker Change: Company like that grows cash flow becomes an issue.
Kevin: For the factors that Kevin just mentioned.
Speaker Change: We're willing to put more cash into their model and we can.
Speaker Change: Most recent rounds of investment that we did.
Speaker Change: Contribute was.
Speaker Change: Secured convertible loan so.
Speaker Change: Enabled us to.
Speaker Change: To call net asset and to take that off and so now that we do own that IP and we own that inventory.
Mike Schliske: So now that we do own that IP and we own that inventory. Got it. Very helpful. I will pass it along. Thank you so much. Sure, thank you. Safe travels.
Speaker Change: Got it very helpful.
Speaker Change: Thank you so much.
Speaker Change: Thank you safe travels.
Speaker Change: Okay.
Jerry Sweeney: Our next question is from Jerry Sweeney with Roth Capital. Good afternoon.
Speaker Change: Our next question is from Gerry Sweeney with Roth Capital partners.
Speaker Change: Yeah. Good afternoon, James Thanks, Hi.
Roger Shannon: What's your name, sir? Roger. How are you guys doing? Um, so obviously terrorists are going to be top of everyone's mind. It's we've already seen questions. But as you look at mitigation strategies, what are the bigger challenges you face there? Obviously, you're a little bit more asset-light manufacturing, a lot of it's sewing. How challenging is it to move maybe some...
Speaker Change: How are you guys doing.
Speaker Change: It's additive.
Speaker Change: So obviously tariffs are going to be top of everyone's mind as we've already seen questions you discussed but.
Speaker Change: As you look at the mitigation strategies, what are what are the bigger challenges you face there, obviously, you're a little bit more asset light manufacturing a lot of its selling.
How challenging is it to move maybe some.
Speaker Change: Disposable manufacturing to the U S and.
Jim Jenkins: Ann Waukes in Rapid City, NN Yeah, a couple of ways we're exploring this, only until recently, I just had this discussion with my COO earlier again today, so I want to make sure I was aligned with where she's looking at this, but we used to have a very large disposable operation in Mexico. We shifted strategically to fire turnout gear, primarily in Mexico, a couple of years ago. And I think it was a decision that was made by the prior management team. And I think it was a smart one. But we've got people who are trained to do disposables there.
Speaker Change: Yeah, and then secondarily, yes.
Speaker Change: Go ahead I'll ask another one but yes so.
Speaker Change: A couple of ways. We are exploring this we only until recently.
Speaker Change: I just had this discussion with my CFO earlier again today, so I want to make sure I was aligned with where she is looking at this but we used to have a very large disposable operation in Mexico.
Speaker Change: We shifted.
Speaker Change: Strategically to fire turnout gear, primarily in Mexico.
Speaker Change: A couple of years ago, and I think it was a it was a decision that was made by the prior management team and I think it was a smart one.
Yeah, but but we've got people who are trained to do disposals there.
Jim Jenkins: And with the viridian capacity that we have, if these tariffs become, you know, look, 10% is something we can live with, okay? But if something were to go a little higher than that for Vietnam, the idea would be to train back up those folks in Mexico. And then see if they can't thrive. Some of the stuff that they'd be utilizing would be under the USMCA, and would allow us to do that tariff-free. So, you know, Helena's got a plan for that. I mean, I think the worst case plan for us, frankly, would be a US operation.
Speaker Change: And with the Caribbean capacity that we have if these if these tariffs become.
Speaker Change: Hi.
Speaker Change: 10% is something we can live with okay, but if something were to go a little higher than that for Vietnam.
The idea would be to two train back up those folks in Mexico.
Speaker Change: And then see if they can drive to some of the stuff that they would be they would be.
Speaker Change: Maybe utilize them would be under the U S MCA and would allow us to do that tariff free. So Helane has got a plan for that I mean, I think that the worst case plan for us frankly would be a U S. Operation I think it would take us a lot longer to do it.
Jim Jenkins: I think it would take us a lot longer to do it, and to bring people up to speed. And we were looking very carefully at that. And even with the tariff from Vietnam, you know, it probably still would have been cost prohibitive for us to utilize the US markets for those types of garments. So, but I mean, there is real opportunity. We've got high performance we can manufacture in the US. And then we can also move the disposables from Vietnam, if we need to, to Mexico for the US market. And even, you know, prior to that, when the Vietnam tariffs were, I think, at 46%, India, I think, was in the mid-20s.
Speaker Change: Bring people up to speed.
Speaker Change: And we were looking very carefully at that and even with that.
Speaker Change: The tariffs from Vietnam.
Speaker Change: It probably still would've been.
Cost prohibitive for us to utilize the U S market for.
Speaker Change: Those types of garments.
Speaker Change: So, but but I mean, there is there is real opportunity. We've got high performance, we can manufacture in the U S.
Speaker Change: And then we can also move to disposables.
Speaker Change: From Vietnam, if we need to to Mexico for the U S markets and even prior to that when the Vietnam tariffs, where I think at 46%, India. I think was in the mid <unk> and we were also looking at options for utilizing India as well and training those folks up Helane is already got them working on piecework.
Jim Jenkins: And, you know, we were also looking at options for utilizing India as well, and training those folks up. Helena's already got them working on piecework, which means you're going to start to see, I think, a more productive flow of manufacturing from India. So, we do have some, you know, optionality here. And I think you're right, it doesn't happen overnight. The elves don't just magically sprinkle pixie dust, and we turn to pivot. But I have been overwhelmed in terms of how impressed I've been with Helena and her ability and resiliency to drive her team in ways I couldn't have imagined.
Speaker Change: Which means youre going to start to see we're going to start to see I think a more productive flow manufacturing from India. So we do have some optionality here.
Speaker Change: And I think youre right. It doesn't happen overnight the else don't just magically sprinkle pixie dust and we turn that we turned to pivot, but I have been overwhelmed.
Speaker Change: In terms of how impressed ive been with Helena and her ability and resiliency to drive her team in ways I Couldnt have imagined.
Jim Jenkins: And I think she's certainly as prepared as she needs to be to drive this pivot if it becomes necessary.
Speaker Change: And I think she certainly is preparedness he needs to be to drive this pivot.
Speaker Change: If it becomes necessary.
Jim Jenkins: And my follow-up was, I basically answered it, but it was, at what point does it not make sense to even move to the U.S.? Sounds like the U.S. is the worst case scenario. Mexico by itself. Yes, so Mexico's got enough protection, not too bad. No, they would be a USMCA compliant use of PPE, which would allow us to be able to sell that without a tariff. So, yeah. Okay, got it.
Speaker Change: Okay and then my follow up was that was it.
Speaker Change: Yes, basically answered it but it was at what point does it not make sense, even moved to the U S or and it sounds like the U S is the worst case scenario, but.
Speaker Change: Mexico by itself.
Speaker Change: Yes.
Correct got enough, it's actually not too bad.
Speaker Change: No they would be they would be a U S MCA compliant.
Speaker Change: Use of PPE, which would allow us to be able to sell that without a tariff.
Speaker Change: Got it so.
Speaker Change: Yes.
Speaker Change: Okay got it and then you also talked about optimization programs, I think manufacturing logistics et cetera, but some of it sounded like it was around specific comments, but I'm, assuming this maybe companywide at some point.
Jim Jenkins: And then you also talked about optimization programs, I think manufacturing. Some of it sounded like it was around Pacific Helmets, but I'm assuming this may be company-wide at some point. It is. Our Lean Six Sigma program will be rolled out company-wide. Roger has properly brought our Lean Six Sigma leader onto our ERP team to make sure that processes are not conflicting when we start putting business processes in with our ERP.
Speaker Change: It is our lean six Sigma program will be rolled out companywide and Roger has properly brought our lean six Sigma leader onto our ERP team to make sure that processes are not conflicting when we start putting business processes in with our ERP systems.
Jim Jenkins: Got to ask a question very well could be early, but any idea of how much friction I Mars. I-E-A's Yeah, I mean, we've already done it. We've already done it at LHD, right? So we've, you know, we'll be looking at other alternatives. Pacific is certainly something we'll be looking at. You know, as we look at other improvements, you know, I will tell you that the owner of Viridian believes that we've got some options there as well to consolidate. I mean, the part of the, you know, part of the longer term plan is to consolidate the operations of Viridian into probably one-ish operation in Iowa.
Speaker Change: Got to ask the question very well could be early but any idea of how much friction E margin or.
Speaker Change: So they can improve or cost takeout.
Speaker Change: Obviously, you've made a lot of acquisitions. So there's probably some low hanging fruit that you can fix up move around et cetera, Yes, I mean, we've already done it we've already done at IHT right. So we have.
Speaker Change: We will be looking at other alternatives specific it's certainly something we'll be looking at.
Speaker Change: <unk>.
Speaker Change: We look at other improvements.
Speaker Change: I will tell you that the owner of Iridium believes that we've got some options there as well to consolidate I mean look part of the part of the longer term plan is to consolidate the operations of <unk>.
Speaker Change: Viridian into probably one ish operation in Iowa.
Jim Jenkins: But given the current tariff environment, you know, we haven't really accelerated that. And until we have a little more clarity on that, we're not going.
Speaker Change: But given the current tariff environment, we haven't really accelerated that and until we have a little more clarity on that we're not going to.
Speaker Change: That makes sense.
Jim Jenkins: Finally, that Jolly Order, how big of an order was that in terms of revenue? 3 million euros. And that's just a push. It's built, ready to ship, and the latest is the customer is doing the inspections and the sign-off as we speak. So it's been frustrating that it's pushed once already. We had thought with a pretty good level of certainty that it was going to happen in Q4, but obviously it didn't. But it is teed up for the first half of this year. on it. So it's already manufactured. So that would have been, you know, that whole three million.
Speaker Change: Finally, the Jolly order, how big of an order was that interest and maybe revenue and EBIT potential EBITDA.
Speaker Change: <unk> million dollars.
Speaker Change: <unk>, two 3 billion euro.
Speaker Change: Got it.
Speaker Change: That's just a push correct.
Speaker Change: Yes, yes, yes.
Speaker Change: I mean, it's built ready to ship and the latest is the customer is.
Speaker Change: Doing the inspections and to sign off as we speak again, so it's been frustrating that push once already we had thought.
Speaker Change: With a pretty good level of certainty that it was going to happen in Q4, but obviously didn't.
Speaker Change: But it is teed up for the first half of this year.
Speaker Change: Got it so it is already manufactured so that would've been.
Speaker Change: That whole three milling.
Jim Jenkins: We should have been. We would have been. The expectation was forthcoming. Correct, and that would have, that would have, we would have made guidance with that. Okay, I'll jump back in line.
Speaker Change: Potentially we should have been we would have the expectation was fourth quarter.
Speaker Change: Correct and that would have that would have we would've made guidance with that.
Speaker Change: Got it okay.
Speaker Change: Jump back in line thanks, guys.
Speaker Change: Sure.
Mark Smith: Our next question is from Mark Smith with Lake Street Capital. Hi guys, just back on that, that jolly boot order. So that's not shipped yet. But are there any other, you know, backlogs or orders or anything that we should be looking at that's sitting out there today that maybe was delayed or that we would would look for any shifts? Like we mentioned in the prepared notes, LHD did a phenomenal job of catching up what was an average of two and a half years. There were some orders that were four years past due, and we've made a strategic decision to deliver on those.
Speaker Change: Our next question is from Mark Smith with Lake Street capital.
Speaker Change: Hi, guys just back on that that Jolly boot order. So that's not shipped yet but are there any other backlogs or orders or anything that we should be looking at that sitting out there today that maybe what's delayed or that we would look for any shifts.
Speaker Change: And that's all I'm aware of no no no no that's the big one.
Speaker Change: Like we mentioned in the prepared notes.
Speaker Change: <unk> did a phenomenal job of catching up to what was an average of two and a half years. There were some orders that were for years.
Speaker Change: Past due and we've made a strategic decision to deliver on those two we think that the.
Jim Jenkins: We think that Lakeland and the LHD name is valuable, and those people deserve to get their equipment. So, you know, we made a phenomenal strides in getting 85% of that done. We've made operational efficiencies and improvements there, and Australia and Hong Kong are really clicking along. So we are very happy with that acquisition.
Speaker Change: <unk> and the <unk> name is valuable and those people deserve to get their equipment.
Speaker Change: So we made a phenomenal <unk>.
Speaker Change: <unk> and getting 85% of that done.
Speaker Change: We've made operational efficiencies and improvements there in.
Speaker Change: Australia and Hong Kong are are really clicking along so we are very happy with that acquisition.
Roger Shannon: Okay. And the next question, just any thoughts you can give around gross profit margins, and this is kind of excluding any changes from tariffs, but just gross profit margins with strong organic margins mixed in with acquisitions. You know, if we saw steady state today, any thoughts around kind of where you feel like gross profit margin really moves to. Yeah, that's a good question. We are very intently focused on the previously discussed aspirational targets of mid to high teens and adjusted EBITDA margin. I certainly understand why you're asking and need that. We were very, very pleased with the organic gross margins being close to 50%.
Speaker Change: Okay and the next question just any thoughts you can give around gross profit margins and this is kind of excluding any changes on.
Speaker Change: Tariffs, but just gross profit margins were strong organic margins mixed in with acquisitions. If we saw steady state today any thoughts around kind of where you feel like gross profit margin really most of it.
Speaker Change: Yes.
Speaker Change: Good question.
Speaker Change: Are very intently focused on the.
Speaker Change: Kind of the previously discussed aspirational targets of mid to high teens.
Speaker Change: <unk> EBITDA margin.
Speaker Change: Certainly no I understand why you are asking a need that we were very very pleased with the organic gross margins being close to 50%.
Roger Shannon: Our challenge certainly is these operational improvements at Pacific and then Viridian that we're just now undertaking. Viridian is currently in the low 30s in gross margin. Jolly's gross margins were absolutely impacted in Q4 by not shipping those orders. Factory, Shop Floor, Lean Six Sigma initiatives going on there. So either the long and short of it is, you know, I think it's a first step. I'd like to see the acquisition gross margins kind of get into the mid 30s and start to, you know, kind of move up the 30s. At the same time, you know, we talked about the efficiencies we expect to start getting from the ERP project and the fact that Viridian and Eagle and LHD for that matter run very leanly, so their EBITDA margins are quite positive compared to their gross margin.
Speaker Change: Our challenge certainly as these operational improvements at Pacific.
Speaker Change: Bridie and that we're just now undertaking.
Speaker Change: Radians and kind of currently in the low thirties and gross margin.
Speaker Change: <unk> gross margins were absolutely impacted in Q4 by by not shipping those orders we've got some.
Speaker Change: Factory shop floor, Lee lean six Sigma initiatives going on there.
Speaker Change: So the long and short of it is I think is the first step I would like to see the acquisition gross margins kind of get.
Speaker Change: Into the mid Thirty's and start to kind of move up to <unk>.
Speaker Change: At the same time.
Speaker Change: We talked about the efficiencies that we expect to start getting from the ERP project and the fact that viridian and Eagle.
Steve: Steve for that matter run very lean Lee so.
Speaker Change: Their EBITDA margins are.
Steve: We are quite positive compared to there.
Speaker Change: Gross margins.
Roger Shannon: And the last question for me is just as we think about the year, obviously, there's been a lot of acquisitions and changes over the last 12 months here. Just can you walk us through any kind of cadence of revenue or any maybe lumpiness that you have any insight into today that we should be watching for? Yeah, so on the lumpiness front, look, we've got... You know, part of the fire biz is sort of the tenders, right? So, you've got multiple tenders all over the world that we're trying to participate in. You know, with the number of brands we have, we believe that our win rate is going to be, is going to increase.
Steve: Okay.
Steve: And the last question for me is just as we think about the year, obviously, there's been a lot of acquisitions and changes over the last 12 months here.
Steve: Could you walk us through any kind of cadence of revenue or any maybe.
Steve: <unk> do you have any insight into to date.
Steve: Yes, so on the Lumpiness front look we've got.
Steve: Part of the fire base is sort of it's tenders right. So you've got multiple tenders all over the world.
Steve: That we're trying to participate in.
Steve: Yes.
Steve: With the number of brands, we have we believe that our win rate is going to be is going to increase.
Jim Jenkins: But you know, as we start, and I think I mentioned this even maybe six, nine months ago in Q2 when we had similar issues with Jolly, you know, you've got some lumpiness associated with this stuff. And you know, until we get to that critical mass component, which I think is going to be in the next 12 months as we start seeing revenue start with a two, that those, that lumpiness component, I'm not going to be dependent upon, you know, a Jolly boot order to ship, you know, on January 28th as opposed to February 4th to worry about whether I'm going to make that number.
Steve: But.
Steve: As we start and I think I mentioned this even maybe six nine months ago in Q2, when we we had similar issues with Jolly.
Steve: You've got some lumpiness associated with this stuff and.
Steve: Till we get to that critical mass component, which I think is going to be in the next 12 months as we start seeing revenue start with it too.
Steve: That does.
Steve: That lumpiness component I'm not going to be dependent upon.
Steve: Jalili boot order to ship on.
Steve: January 28 as opposed to February 4th.
Steve: To worry about whether I'm going to make that number so that's sort of where Roger and I said I think.
Roger Shannon: So, that's sort of where Roger and I sit, I think. Yeah, and just to give you, you know, just a little bit of context, as we look at this year, you know, we expect Q1 to be the lightest quarter. And then improving Q2 and then to Q3, Q3, you know, we would expect to be the strongest quarter and then Q4 maybe just a hair below Q2. Excellent, that's helpful.
Steve: Just give you just a little bit of context as.
Steve: As we look at this year, we expect Q1 to be the lightest quarter.
Steve: And then improving in Q2 and into Q3.
Steve: Q3.
Steve: You expect to be the strongest quarter and in Q4, maybe just a hair below Q2.
Steve: Excellent that's helpful. Thank you.
Matthew Galinko: Thank you.
Steve: Terrific.
Matthew Galinko: Our next question is from Matthew Galinko with Max. I'm at. Hey, good afternoon, guys. Thanks for taking my questions.
Matthew: Our next question is from Matthew <unk> with Maxim Group.
Steve: Hey, Matt Hey, Matt.
Speaker Change: Afternoon, guys. Thanks for taking my questions.
Jim Jenkins: Maybe post-clearing the backlog at LHD in Europe, I guess what are the prospects, or how should we think about the run rate of that business? Or are you rebuilding that pipeline as you sort of clear the backlog, or how is business there? Thank you. Yeah, so you know, when you think about LHD, you've got the Germany business, the Australia business in Hong Kong, and of course, the the Australia as well as the Hong Kong includes service. You know, we've got, with the clearing of the backlog, you know, we're probably still in the. I'd call it the 8 million euro range for this year as we, you know, win new tenders, win new awards.
Speaker Change: Maybe post clearing the backlog and in IHT in Europe.
Speaker Change: I guess both prospects.
Speaker Change: Perhaps should we think about the run rate of that sorry.
Speaker Change: The building that that pipeline as you sort of clear the backlog or how much business there.
Speaker Change: Yes, so when you think about LHC, you've got the Germany business, the Australia business in Hong Kong and of course, the the Australia as well as the Hong Kong include services.
Speaker Change: We've got.
Speaker Change: With the clearing of the backlog.
Speaker Change: Probably still in the.
Speaker Change: I'd call it the <unk>.
Speaker Change: 8 million Euro range for this year is we win.
Speaker Change: When new tenders when the awards there are some very interesting rfps that.
Jim Jenkins: There are some very interesting RFPs that I can tell you that we have not factored in to winning, but that we're, and we think about our, you know, guided some budget numbers, but that we are, that we know we're coming up, that we're going to bid on, and that our team there feels, you know, feels good about getting a good look at. So, you know, we've mentioned before that, you know, we would be disappointed if we only double the revenue in Germany from LHD. Of course, that's not going to happen overnight, and we're not, you know, like we did with others, we don't put a lot of, you know, hockey stick growth on the first year, really, we're kind of getting past the backlog and going through some operational efficiencies.
Speaker Change: I can tell you that we have not factored in to winning but where.
Speaker Change: When we think about our guidance and budget numbers, but that we are do we know we're coming up we're going to bid on an net and that our team.
Speaker Change: They are feels feels good about getting a good look at so.
We've mentioned before that.
Speaker Change: We would be disappointed if we only double the revenue in Germany <unk> HD.
Speaker Change: That's not going to happen overnight and we're not like we did with others. We don't put a lot of.
Speaker Change: You have a hockey stick growth on the first year really we're kind of getting past the backlog and going through some operational efficiencies. We've got this first year really kind of flat from a for me.
Jim Jenkins: We've got this first year really kind of flat from a projection perspective, but there certainly is potential upside there. Got it. Thank you.
Speaker Change: <unk> perspective, but there certainly is potential upside there.
Speaker Change: Got it thank you.
Jim Jenkins: And I guess my follow up is thematically, it seems, you know, obviously a lot of focus on tariffs and, you know, operations, but maybe if you could touch a little bit on, you know, growth initiatives, as you see it, is M&A still up in play this year? You know, is the services business still in play this year? Kind of what are you thinking about? And, you know, back to driving Yeah, look, on the organic front, we've got, we've got the right team in place. You know, we've really been together for about seven or eight months.
Speaker Change: I guess, yes.
Speaker Change: Just follow up is dramatically it seems.
Speaker Change: Obviously, a lot of focus on tariffs.
Speaker Change: Operations, but maybe.
Speaker Change: Maybe if you could touch a little bit on.
Speaker Change: Growth initiatives.
Speaker Change: You see it in M&A to fill up in play this year.
Speaker Change: As a services.
Speaker Change: Business still in play this year kind of what are you thinking about.
Speaker Change: Factors driving.
Speaker Change: Yes look on the.
Speaker Change: The organic front we've got.
Speaker Change: We've got the right team in place, we've really been together for about seven or eight months.
Jim Jenkins: And, you know, now this is the year I think where we're starting to, you know, move with, you know, with a real purpose together. So that, so on the organic front, I'm very optimistic with what we're doing. I look at what our industrial team's doing in Europe right now. And Europe has been a real disappointment on the industrial side for us for many, many years. And I now have the right leadership and the right focus in that market. On the M&A front, you know, what we've acquired and the cross-selling magic that, you know, my Chief Revenue Officer, Barry Phillips, is working is really quite impressive.
Speaker Change: And.
Speaker Change: Now this is the year I think what we're starting to move.
Speaker Change: Move with weather.
Speaker Change: With a real purpose together so that so on the organic front I'm very optimistic with.
Speaker Change: With what we're doing I look at what our industrial team is doing in Europe right now.
Speaker Change: And Europe has been a real disappointment on the industrial side for us for many many years and I now have the right leadership and the right focus in that market on the M&A front.
Speaker Change: What we've acquired and the cross selling.
Speaker Change: <unk> My Chief revenue.
Speaker Change: The New officer, Barry Phillips is working is really quite impressive.
Jim Jenkins: And, you know, where I was at FDIC today, which is the largest fire trade show, you know, in North America. And, you know, Barry knows everyone. I mean, he literally knows everybody there. So including most of the firefighters. So I'm really, really energized by what he and Cameron are trying to do with our teams. And, you know, we mentioned obviously in the, you know, during the call that we've added a lot of sort of middle management in our sales staff that, you know, I look at and I get even more energized when I see that.
Speaker Change: And was that an FDIC today, which is the largest.
Speaker Change: Fire.
Speaker Change: Tradeshow in North America, and Barry knows everyone, I mean literally knows everybody there so including most of the firefighters. So I'm really really energized by what he and Cameron are trying to do.
Speaker Change: With our teams and we mentioned obviously in that.
Speaker Change: During the call that we had.
Speaker Change: <unk> added a lot of sort of middle management.
Speaker Change: Sales staff that.
Speaker Change: I look at and I get even more energized when I see that so that's sort of the organic front on the M&A side, Roger and I think.
Jim Jenkins: So that's sort of the organic front. On the M&A side, you know, Roger and I, I think, have a number of initiatives and our pipeline is still significant and quite robust. But the focus is going to be, you know, I think the deals will be a little smaller over the course of the next 12 to 18 months. I think we're looking at, you know, what we would call the decontamination business, you know, the service business. So we would, you know, we would anticipate probably the next 12 to 18 months looking at two or three of those.
Speaker Change: A number of initiatives and our pipeline is still significant and quite robust, but the but the focus is going to be I think the deals will be a little smaller over the course of the next 12 months to 18 months I think we're looking at.
Speaker Change: What we would call it the decontamination business the service business.
Speaker Change: So we would we would.
Speaker Change: We would anticipate probably the next 12 to 18 months.
Speaker Change: Looking at two or three of those and as I think I've said before those are those companies are generally doing $3 million to $5 million in revenue.
Jim Jenkins: And as I think I said before, those are, those companies are generally doing $3 to $5 million in revenue. There's a nice opportunity to scale those companies in markets where we have existing customers. So we're, you know, we think we're going to do, you know, something to the tune of two or three of those in the next 12 to 18 months.
Speaker Change: There's a nice opportunity to scale those companies.
Speaker Change: In markets, where we have <unk>.
Speaker Change: Listing customers so.
Speaker Change: Sure.
Speaker Change: We think we're going to do.
Speaker Change: Something to the tune of two or three of those in the next 12 to 18 months.
Matthew Galinko: And, you know, we see those as, you know, real, you know, nice opportunities for us to generate recurring revenue, high margin, and sort of a sticky customer. Great, thank you.
Speaker Change: We see those as.
Real nice opportunities for us to generate recurring revenue high margin and sort of a sticky customer.
Speaker Change: Great. Thank you and maybe if I could sneak one last one in there.
Jim Jenkins: And maybe if I could sneak one last one in there. It sounds like LineDrive is doing well now. Are we kind of moving at full speed on that front, or is there still work to be done? No, we're in a really good place with LineDrive. They're walking the halls of the Fastenalls and the Valens and the Grangers of the world. So I just had a call with my colleague there late last week. We were trying to, at that point, work on a tariff strategy, and he was quite helpful on that front. But as we start getting more clarity, and hopefully these 10% tariffs are all that we're going to see, he's been very helpful, they've been very helpful, and our teams have really been working closely together.
Speaker Change: Line drive is doing well now.
Speaker Change: Are we kind of moving at full speed on that front or is there still work to be done.
Speaker Change: No.
Speaker Change: <unk> really been placed with line drive they are getting they are walking the halls of the fast at all and the Valens and the <unk> of the world. So.
Speaker Change: I just had a call with with.
Speaker Change: My colleague there.
Late last week, we were.
Speaker Change: We're trying to at that point work on it on a tariff strategy.
Speaker Change: And he was quite helpful on that front, but.
Speaker Change: As we start getting more clarity and hopefully these 10% tariffs R. R.
Speaker Change: All of that we're going to see.
Speaker Change: He is.
Speaker Change: He has been very helpful. They've been very helpful. In our teams have really been working closely together.
Operator: So, yeah, our optimism is not waning at all, and in fact is increasing with every day that we work with LineDrive. Great, thank you. Thank you. There are no further questions at this time.
Speaker Change: So our optimism has not landing at all and in fact is increasing with with everyday that we work with line drive.
Speaker Change: Great. Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you there are no further questions at this time I would now like to turn the call back over to Mr. Jenkins for closing remarks.
Jim Jenkins: I would now like to turn the call back over to Mr. Jenkins for his closing remarks. Thank you all for joining. Thank you operators. Thank you all for joining us on today's call. I would also like to thank our customers and distributor partners worldwide for trusting us with your lives and safety. Our customers are heroes and we never take that trust for granted. I also want to thank our Lakeland team members across the company for their continued commitment and enthusiasm as we further delivered on our strategic initiatives this quarter. Lakeland continued to experience significant growth and change during this quarter and I appreciate the hard work from our dedicated team as we continue to execute our growth strategies.
Jim Jenkins: Thank you all for joining thank you operator, thank you all for joining us on today's call I would also like to thank our customers and distributor partners worldwide for trusting us with your lives and safety our customers are heroes and we never.
Jim Jenkins: Take that trust for granted I also want to thank our Lakeland team members across the company for their continued commitment and enthusiasm as we further delivered on our strategic initiatives. This quarter <unk> continued to experience significant growth and change during this quarter and I appreciate the hard work from our dedicated team as we continue to execute our growth strategies.
Operator: If we were unable to answer any of your questions today, please reach out to our IR firm MZ group. We would be more than happy to help and assist. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.
Jim Jenkins: If we were unable to answer any of your questions today.
Jim Jenkins: Please reach out to our IR firm MZ group, we'd be more than happy to helping assist you.
Jim Jenkins: Thank you.
Jim Jenkins: This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.