Q3 2026 Lakeland Industries Inc Earnings Call

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

During today's call, we may make statements relating to our goals and objectives for future operations, financial and business trends.

Business prospects and management expectations for future performance that constitute for looking statements under Federal Securities laws.

Huh.

Any such forward looking statements reflect management expectations based upon currently available information and our not guarantees of the future performance and involves certain risk and uncertainties that are more fully described in our SEC filings, our actual results performance, or achievements May differ materially from those expressed in or implied by such forward-looking statements.

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

On this call, we will also discuss Financial measures. Derived from our financial statements that are not determined in accordance with the us gaap including adjusted evaa. Excluding FX and adjusted Eva excluding FX margin, organic sales, adjusted growth profit adjusted.

Organic gross margin and adjusted operating expenses.

A Reconciliation of each of the non-gaap measures discussed on this call.

On this call to the most directly comparable, gaap measure.

Is presented in our earnings release and or the supplemental slides, filled with our file with our earnings release.

A press release detailing. These results was issued this afternoon and is available in the industrial relations section of the company, website IR at lakeland.com.

At this time, I would like to introduce you to our host for this call. Lakeland fire and safeties. President, Chief Executive Officer and executive chairman Jim Jenkins, vice president, Finance, Calvin Sweeney,

Chief Revenue officer. Barry Phillips and chief commercial commercial. Commercial officer Cameron Stokes Mr. Jenkins! The floor is yours.

Mhm.

Thank you, operator and good afternoon, everyone. Thank you for joining us today to discuss the results of our physical 2026. Third quarter ended October 3112. We continued Revenue momentum in the third quarter of 2026 despite a challenging tariffs and macroeconomic environment as we focused on recent acquisition synergies increasing our market share within the fragmented 2 billion dollar. Fire protection sector in the largest global markets and growing our Industrial Products business

Calvin will go over the financials in more detail shortly. So I will provide you with a brief overview.

We achieved net sales of 47.6 million representing, a 4% year-over-year. Increase driven by a 31% increase in fire Services products.

In the US, our sales increased 25% year-over-year.

To 15.2 million.

We continue to anticipate growth in our fire Services, both organically and through our Acquisitions as well as our as well as in our industrial segments in the months and years ahead.

Adjusted Eva, excluding FX was $200,000. A decrease of 4.5 million or 95% compared with 4.7 million for the comparable year ago, period.

To sequentially. Our adjusted Eva decreased 4.8 million or 96%.

Adjusted gross profit as a percentage of net sales in the third quarter was 31.3% versus 41.7% in the comparable year ago. Period and decreased 612 basis points sequentially from 37.4% in the second quarter.

Our adjusted gross margin percentage. Decreased in the second quarter of fiscal 2026 compared to the same period. Last year primarily due to lower acquired company, gross margins, increased material and freight costs and tariffs.

Margins, in the acquired businesses were impacted by increased material costs.

This shortfall is Meaningful, and it's important to emphasize that the ibida impact. This quarter was driven by both revenue and growth margin shortfalls, the 2 are inseparable, the revenue, misses directly, produced, gross profit dollars, removing the operating leverage, we depend on to convert volume into earnings. Even if margins had held the lower Revenue base would have pressured ibida conversely, the margin compression, Amplified the effect.

Good day and welcome to the Lakeland Industries Inc. third quarter 2026 financial results conference call.

Eva to underperformance reflects the combined impact of lower volume and reduce margin for a dollar of Revenue, not margin deterioration alone.

All lines have been placed in listen-only mode, and the floor will open up for your questions following the presentation.

Sgna remained, disciplined and broadly in line with expectations, the quarter broke on revenue and gross profit dollars. Not on expense growth.

During today's call, we may make statements relating to our goals and objectives for future operations, as well as financial and business trends.

Compression Freight in and Terrace ran above forecast.

Good day and welcome to the Lakeland Industries, Inc. third quarter 2026 financial results conference call.

Business prospects and management expectations for future performance that constitute forward-looking statements under Federal Securities laws.

Through pit throughput and mix inefficiencies, affected, cogs labor, and our mixed shifted from higher margin categories.

All lines have been placed in listen-only mode, and the floor will open up for your questions following the presentation.

During today's call, we may make statements relating to our goals and objectives for future operations, as well as financial and business trends.

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

Business prospects and management expectations for future performance that constituteforward-looking statements under federal securities laws.

Moving on the Strategic Acquisitions of California PPE and Arizona PPE expanded. Our Global fire footprint into the US personal protective equipment, decontamination Repair and Rental markets and added approximately 5 million dollars of annual recurring Revenue. Arizona, PPE is the leading UL certified independent. Service provider for performing Advanced, decontamination inspection and repairs on firefighting garments for the Arizona Market.

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

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

California PPE is a leading and rapidly expanding. UL certified IST in the California firefighting Services Market, 1 of the largest fire markets in the United States.

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

On this call, we will also discuss Financial measures the rides from our financial statements that are not determined in accordance with the us gaap including adjusted evaa. Excluding FX and adjusted evaa excluding FX margin, organic sales, adjusted growth profit adjusted.

We do not take any obligation to update or revise any forward-looking statements to reflect events or developments after the date of this call.

Organic gross margin and adjusted operating expenses.

From these 2 outstanding companies, we intend to continue growing the North American Service segment of the global fired Services Market by leveraging, the combined strengths and experience of lakeland's lhd service offerings in Asia and Australia with the outstanding teams from Arizona, PPE and California. PPE to develop a strong North American platform.

Reconciliation of each of the non-GAAP measures discussed on this call.

On this call to the most directly comparable GAAP measure.

As presented in our earnings release and in the supplemental slides filed with our earnings release.

Discuss financial measures derived from our financial statements that are not determined in accordance with US GAAP, including Adjusted EVA excluding FX and Adjusted EVA excluding FX margin, organic sales, Adjusted Gross Profit, Adjusted Organic Gross Margin, and Adjusted Operating Expenses.

A press release detailing these results was issued this afternoon and is available in the industrial relations section of the company website, IR at lakeland.com.

Lakeland lhd was awarded in approximately USD 5.6 million 3-year contract to provide Advanced decontamination, managed care and maintenance services for the Hong Kong fire Services. Departments firefighter protective Gear 1 of the largest emergency response organizations in Asia. A contract running through 2028 covers Advanced decontamination Services as well as comprehensive care and maintenance of an estimated 14,500. Firefighter ensembles each year, this award underscores our strong presence in the asia-pacific market and reinforces the trust place in our services by 1 of the Region's most respected, fire Services organizations.

Chief Revenue Officer Barry Phillips and Chief Commercial Officer Cameron Stokes.

A press release detailing these results was issued this afternoon and is available in the industrial relations section of the company's website, IR at lakeland.com.

Mr. Jenkins, the floor is yours.

At this time, I would like to introduce you to our host for this call, Lakeland Fire and Safety's President, Chief Executive Officer, and Executive Chairman, Jim.

Thank you, operator, and good afternoon, everyone. Thank you for joining us today to discuss the results of our fiscal 2026 third quarter.

Additionally, we completed a 6.1 million sale in partial lease back of our, Dakar Alabama Warehouse property to an unrelated property in connection with capital reallocation and in initiatives, resulting in a gain of 4.3 million, as well as strengthening the balance sheet, and providing Financial flexibility for future growth.

The third quarter reflected the impact of tariff uncertainty inflation effects and the associated mitigation strategies, we have employed since the election the on tariffs. We also face raw, material inflation, and Rising supply chain costs, that also contributed to the impact.

On both revenue and gross margins.

Revenue softness was visible across our portfolio in the US Canada, Latin America and parts of the Mia.

James Jenkins: In Q3 2026, despite a challenging tariffs and macroeconomic environment, as we focused on recent acquisition synergies, increasing our market share within the fragmented $2 billion fire protection sector in the largest global markets and growing our industrial products business. Calvin will go over the financials in more detail shortly, so I'll provide you with a brief overview. We achieved net sales of $47.6 million, representing a 4% year-over-year increase driven by a 31% increase in fire services products. In the US, our sales increased 25% year-over-year to $15.2 million. We continue to anticipate growth in our fire services, both organically and through our acquisitions, as well as in our industrial segments in the months and years ahead. Adjusted EBITDA, excluding FX, was $200,000, a decrease of $4.5 million, or 95%, compared with $4.7 million for the comparable year-ago period.

Jim Jenkins: In Q3 2026, despite a challenging tariffs and macroeconomic environment, as we focused on recent acquisition synergies, increasing our market share within the fragmented $2 billion fire protection sector in the largest global markets and growing our industrial products business. Calvin will go over the financials in more detail shortly, so I'll provide you with a brief overview. We achieved net sales of $47.6 million, representing a 4% year-over-year increase driven by a 31% increase in fire services products. In the US, our sales increased 25% year-over-year to $15.2 million. We continue to anticipate growth in our fire services, both organically and through our acquisitions, as well as in our industrial segments in the months and years ahead. Adjusted EBITDA, excluding FX, was $200,000, a decrease of $4.5 million, or 95%, compared with $4.7 million for the comparable year-ago period.

North America faced challenges with Revenue down quarter over quarter and Latin. America came in below our plan due to macroeconomic conditions impacted by political uncertainty.

Our required businesses also came in below our plan due to timing certification delays and material flow issues rather than underlined demand.

In the third quarter of 2026, despite a challenging tariffs and macroeconomic environment, we focused on recent acquisition synergies, increasing our market share within the fragmented $2 billion fire protection sector in the largest global markets, and growing our Industrial Products business.

Calvin will go over the financials in more detail shortly, so I'll provide you with a brief overview.

We achieved net sales of $47.6 million, representing a 4% year-over-year increase driven by a 31% increase in Fire Services products.

As we step back it's important to knowledge. That this softness is not isolated to Lakeland, nearly all of our peers are reporting, similar challenges tariffs, Freight raw, material, inflation, and Rising supply chain costs. This is not an excuse but it is the reality of the environment, we are operating in and it reinforces that. The pressure on margins is broad-based, not unique to us.

In the U.S., our sales increased 25% year-over-year.

To 15.2 million.

At the end of Q3 inventory was 87.9 Million down from 90.2 million. At the end of Q2 fiscal year 2026.

We continue to anticipate growth in our Fire Services, both organically and through our acquisitions, as well as in our industrial segments in the months and years ahead.

James Jenkins: Sequentially, our adjusted EBITDA decreased $4.8 million, or 96%. Adjusted gross profit, as a percentage of net sales in the third quarter, was 31.3% versus 41.7% in the comparable year-ago period and decreased 612 basis points sequentially from 37.4% in the second quarter. Our adjusted gross margin percentage decreased in the second quarter of fiscal 2026 compared to the same period last year, primarily due to lower acquired company gross margins, increased material and freight costs, and tariffs. Margins in the acquired businesses were impacted by increased material costs. This shortfall is meaningful, and it's important to emphasize that the EBITDA impact this quarter was driven by both revenue and gross margin shortfalls. The two are inseparable. The revenue misses directly produced gross profit dollars, removing the operating leverage we depend on to convert volume into earnings. Even if margins had held, the lower revenue base would have pressured EBITDA.

Sequentially, our adjusted EBITDA decreased $4.8 million, or 96%. Adjusted gross profit, as a percentage of net sales in the third quarter, was 31.3% versus 41.7% in the comparable year-ago period and decreased 612 basis points sequentially from 37.4% in the second quarter. Our adjusted gross margin percentage decreased in the second quarter of fiscal 2026 compared to the same period last year, primarily due to lower acquired company gross margins, increased material and freight costs, and tariffs. Margins in the acquired businesses were impacted by increased material costs. This shortfall is meaningful, and it's important to emphasize that the EBITDA impact this quarter was driven by both revenue and gross margin shortfalls. The two are inseparable. The revenue misses directly produced gross profit dollars, removing the operating leverage we depend on to convert volume into earnings. Even if margins had held, the lower revenue base would have pressured EBITDA.

We have recently initiated a series of targeted actions to optimize inventory levels across our entire organization looking ahead. We are highly focused on the upcoming tender cycle, which will position us for stronger, execution and building. Momentum heading into calendar year 2026.

Adjusted EVA, excluding FX, was $200,000, a decrease of $4.5 million, worth 95%, compared with $4.7 million for the comparable year-ago period.

Sequentially, our adjusted EVA decreased $4.8 million, or 96%.

Renew tender activities expected to increase demand for fire services in the US and internationally and contribute to improved performance at Eagle and lhd Germany.

We have approximately 178 million of global tender opportunities, including 38 million over 100,000 value with high probabilities of success.

Adjusted gross profit as a percentage of net sales in the third quarter was 31.3% versus 41.7% in the comparable year ago period, and decreased 612 basis points sequentially from 37.4% in the second quarter.

These opportunities are positioning us for expanded operating leverage with expense reductions and expanded margins. As tenders deliver margins of normalized profile.

We are now starting to see tender wins for calendar, 1 2026 across our entire product portfolio.

Our adjusted gross margin percentage decreased in the second quarter of fiscal 2026 compared to the same period last year, primarily due to lower acquired company gross margins, increased material and freight costs, and tariffs.

Margins in the acquired businesses were impacted by increased material costs.

Taken together. This past quarter was unacceptable, we missed our targets across multiple areas and as CEO. I take full responsibility for that performance. Our forecasting has not been reliable and the gap between our internal expectations and actual results has grown too large.

James Jenkins: Conversely, the margin compression amplified the effect. EBITDA underperformance reflects the combined impact of lower volume and reduced margin per dollar of revenue, not margin deterioration alone. SG&A remained disciplined and broadly in line with expectations. The quarter broke on revenue and gross profit dollars, not on expense growth. Several factors contributed to the margin compression. Freight in and tariffs ran above forecast. Throughput and mix inefficiencies affected COGS labor, and our mix shifted from higher margin categories. Moving on, the strategic acquisitions of California PPE and Arizona PPE expanded our global fire footprint into the US personal protective equipment, decontamination, repair, and rental markets, and added approximately $5 million of annual recurring revenue. Arizona PPE is the leading UL-certified independent service provider for performing advanced decontamination, inspection, and repairs on firefighting garments for the Arizona market.

Conversely, the margin compression amplified the effect. EBITDA underperformance reflects the combined impact of lower volume and reduced margin per dollar of revenue, not margin deterioration alone. SG&A remained disciplined and broadly in line with expectations. The quarter broke on revenue and gross profit dollars, not on expense growth. Several factors contributed to the margin compression. Freight in and tariffs ran above forecast. Throughput and mix inefficiencies affected COGS labor, and our mix shifted from higher margin categories. Moving on, the strategic acquisitions of California PPE and Arizona PPE expanded our global fire footprint into the US personal protective equipment, decontamination, repair, and rental markets, and added approximately $5 million of annual recurring revenue. Arizona PPE is the leading UL-certified independent service provider for performing advanced decontamination, inspection, and repairs on firefighting garments for the Arizona market.

Because of this, we will be drawn with drawing formal guidance. Instead we are shifting to a more disciplined. Operating model focused on measurable execution, cash generation, and transparency.

This shortfall is meaningful, and it's important to emphasize the EBITDA impact. This quarter was driven by both revenue and gross margin shortfalls; the two are inseparable. The revenue misses directly produced lower gross profit dollars, removing the operating leverage we depend on to convert volume into earnings. Even if margins had held, the lower revenue base would have pressured EBITDA. Conversely, the margin compression amplified the effect.

Eva's underperformance reflects the combined impact of lower volume and reduced margin for a dollar of revenue.

Not margin deterioration alone.

Calvin in a moment.

Sdna remained disciplined and broadly in line with expectations. The quarter broke on revenue and gross profit dollars, not on expense growth.

Several factors contributed to the margin compression.

Freight in and tariffs ran above forecasts.

At the same time, it is important to recognize that this quarter occurred against a backdrop of unprecedented. Headwinds across virtually, all of our Global operations, these challenges affected, not just Lakeland, but our peers as well, many of whom have publicly acknowledged, similar pressures.

Through pit throughput and mixing, these affected costs of labor, and our mix shifted from higher-margin categories.

Despite this environment, our long-term fundamentals, remain intact, and our strategic conviction has not changed.

We remain extremely optimistic about the underlying demand signals. We are seeing a robust and Global fire. Tender pipeline, the necessary us refineries shut down cycle ahead.

Our discipline sales process and clear signs of pent-up demand across nearly every region.

James Jenkins: California PPE is a leading and rapidly expanding UL-certified ISP in the California firefighting services market, one of the largest fire markets in the United States. From these two outstanding companies, we intend to continue growing the North American service segment of the global fire services market by leveraging the combined strengths and experience of Lakeland's LHD service offerings in Asia and Australia, with the outstanding teams from Arizona PPE and California PPE to develop a strong North American platform. Lakeland LHD was awarded an approximately $5.6 million three-year contract to provide advanced decontamination, managed care, and maintenance services for the Hong Kong Fire Services Department's firefighter protective gear, one of the largest emergency response organizations in Asia. The contract, running through 2028, covers advanced decontamination services as well as comprehensive care and maintenance of an estimated 14,500 firefighter ensembles each year.

California PPE is a leading and rapidly expanding UL-certified ISP in the California firefighting services market, one of the largest fire markets in the United States. From these two outstanding companies, we intend to continue growing the North American service segment of the global fire services market by leveraging the combined strengths and experience of Lakeland's LHD service offerings in Asia and Australia, with the outstanding teams from Arizona PPE and California PPE to develop a strong North American platform. Lakeland LHD was awarded an approximately $5.6 million three-year contract to provide advanced decontamination, managed care, and maintenance services for the Hong Kong Fire Services Department's firefighter protective gear, one of the largest emergency response organizations in Asia. The contract, running through 2028, covers advanced decontamination services as well as comprehensive care and maintenance of an estimated 14,500 firefighter ensembles each year.

Moving on, the strategic acquisitions of California PPE and Arizona PPE expanded our global fire footprint into the U.S. personal protective equipment, decontamination, repair, and rental markets and added approximately $5 million of annual recurring revenue. Arizona PPE is the leading UL-certified independent service provider for performing advanced decontamination, inspection, and repairs on firefighting garments for the Arizona market.

We expect these headwinds to begin to ease as we move into calendar year 2026 and we continue to believe strongly in the long term potential of both our fire and Industrial strategies.

California PPE is a leading and rapidly expanding UL certified IST in the California firefighting services market, one of the largest fire markets in the United States.

This is not about lowering ambition, it's about rebuilding, trust to results. Not projections, we will provide regular updates on key. Operational Milestones inventory, reduction, progress, margin improvements, and the Erp and integration timelines, when our forecast forecasting, accuracy sales, Cadence and operational visibility improved to an acceptable standard. We will revisit reinstate and guidance.

From these two outstanding companies, we intend to continue growing the North American service segment of the global fire services market by leveraging the combined strengths and experience of Lakeland's LHD service offerings in Asia and Australia with the outstanding teams from Arizona, PPE, and California. PPE to develop a strong North American platform.

for now, our full focus is on running the core business with rigger, improving forecast, accuracy, and delivering sustainable predictable performance with that, I'd like to pass the call to Bry to provide an update on fire services,

Thank you. Jim looking at our fire Services. Revenue underperform primarily because certification cycles and tender timelines extended longer than anticipated across multiple regions.

James Jenkins: This award underscores our strong presence in the Asia-Pacific market and reinforces the trust placed in our services by one of the region's most respected fire services organizations. Additionally, we completed a $6.1 million sale and partial leaseback of our Decatur, Alabama, warehouse property to an unrelated party in connection with capital reallocation initiatives, resulting in a gain of $4.3 million, as well as strengthening the balance sheet and providing financial flexibility for future growth. Q3 reflected the impact of tariff uncertainty, inflation effects, and the associated mitigation strategies we have employed since the election. Beyond tariffs, we also faced raw material inflation and rising supply chain costs that also contributed to the impact on both revenue and gross margin. Revenue softness was visible across our portfolio in the US, Canada, Latin America, and parts of EMEA.

This award underscores our strong presence in the Asia-Pacific market and reinforces the trust placed in our services by one of the region's most respected fire services organizations. Additionally, we completed a $6.1 million sale and partial leaseback of our Decatur, Alabama, warehouse property to an unrelated party in connection with capital reallocation initiatives, resulting in a gain of $4.3 million, as well as strengthening the balance sheet and providing financial flexibility for future growth. Q3 reflected the impact of tariff uncertainty, inflation effects, and the associated mitigation strategies we have employed since the election. Beyond tariffs, we also faced raw material inflation and rising supply chain costs that also contributed to the impact on both revenue and gross margin. Revenue softness was visible across our portfolio in the US, Canada, Latin America, and parts of EMEA.

Lakeland LHD was awarded an approximately $5.6 million, three-year contract to provide advanced decontamination, managed care, and maintenance services for the Hong Kong Fire Services Department's firefighter protective gear, one of the largest emergency response organizations in Asia. The contract, running through 2028, covers advanced decontamination services as well as comprehensive care and maintenance of an estimated 14,500 firefighter ensembles each year.

The award underscores our strong presence in the Asia-Pacific market and reinforces the trust placed in our services by one of the region's most respected fire service organizations.

These are timing delays, rather than structural demand issues, the opportunities remain in the pipeline. The majority have not been lost. They've simply shifted later than expected. We continue to believe, the we have a high probability of success in securing 38 million of these opportunities within our total pipeline in, uh, of 178 million. Our tender activity, remains strong globally, current delays, reflect regulatory timing, and administrative bottlenecks. And as Jim mentioned competitors, have cited similar headwinds, the underlying demand environment for fire services and protected gear remains intact.

Additionally, we completed a $6.1 million sale in partial leaseback of our Dakar, Alabama warehouse property to an unrelated party in connection with capital reallocation and initiatives, resulting in a gain of $4.3 million. This also strengthens our balance sheet and provides financial flexibility for future growth.

The third quarter reflected the impact of tariff uncertainty, inflation effects, and the associated mitigation strategies we have employed since the election.

On both revenue and gross margins.

James Jenkins: North America faced challenges with revenue down quarter over quarter, and Latin America came in below our plan due to macroeconomic conditions impacted by political uncertainty. Our acquired businesses also came in below our plan due to timing, certification delays, and material flow issues rather than underlying demand. As we step back, it's important to acknowledge that this softness is not isolated to Lakeland. Nearly all of our peers are reporting similar challenges: tariffs, freight, raw material inflation, and rising supply chain costs. This is not an excuse, but it is the reality of the environment we are operating in, and it reinforces that the pressure on margins is broad-based, not unique to us. At the end of Q3, inventory was $87.9 million, down from $90.2 million at the end of Q2 fiscal year 2026.

North America faced challenges with revenue down quarter over quarter, and Latin America came in below our plan due to macroeconomic conditions impacted by political uncertainty. Our acquired businesses also came in below our plan due to timing, certification delays, and material flow issues rather than underlying demand. As we step back, it's important to acknowledge that this softness is not isolated to Lakeland. Nearly all of our peers are reporting similar challenges: tariffs, freight, raw material inflation, and rising supply chain costs. This is not an excuse, but it is the reality of the environment we are operating in, and it reinforces that the pressure on margins is broad-based, not unique to us. At the end of Q3, inventory was $87.9 million, down from $90.2 million at the end of Q2 fiscal year 2026.

Gravity softness was visible across our portfolio in the U.S., Canada, Latin America, and parts of AIA.

We remain highly confident in our major tenders currently in the late stages feedback from end users and procurement teams. Remain positive delays have been driven by certification cycles and administrative timing not competitive losses and our confidence remains high. So, we are not assigning timing commitments. To these opportunities except to say majority of the 38 million of opportunities, We Believe will hit in FY 27.

North America faced challenges with revenue down quarter over quarter, and Latin America came in below our plan due to macroeconomic conditions impacted by political uncertainty.

Fire service margins remain. Structurally sound the temporary compression came from the bombing volume timing and low absorption. During the delays as volume normalizes and tenders convert. Margins are expected to recover without requiring broad pricing actions.

Our required businesses also came in below our plan due to timing certification delays and material flow issues, rather than underlying demand.

For our sales team, the priority is to build a Dependable base of monthly sales. That is not dependent on large tenders or seasonal Cycles. This means expanding distributor engagement, tightening, forecast accuracy, strengthening bid coverage across Brands and accelerating new product, commercialization,

As we step back, it's important to acknowledge that this softness is not isolated to Lakeland. Nearly all of our peers are reporting similar challenges: tariffs, freight, raw material inflation, and rising supply chain costs. This is not an excuse, but it is the reality of the environment we are operating in, and it reinforces that the pressure on margins is broad-based, not unique to us.

James Jenkins: We have recently initiated a series of targeted actions to optimize inventory levels across our entire organization. Looking ahead, we are highly focused on the upcoming tender cycle, which will position us for stronger execution and building momentum heading into calendar year 2026. Renewed tender activity is expected to increase demand for fire services in the US and internationally, and contribute to improved performance at Eagle and LHD Germany. We have approximately $178 million of global tender opportunities, including $38 million over $100,000 in value, with high probabilities of success. These opportunities are positioning us for expanded operating leverage with expense reductions and expanded margins as tenders deliver margins above normalized profile. We are now starting to see tender wins for calendar Q1 2026 across our entire product portfolio. Taken together, this past quarter was unacceptable.

We have recently initiated a series of targeted actions to optimize inventory levels across our entire organization. Looking ahead, we are highly focused on the upcoming tender cycle, which will position us for stronger execution and building momentum heading into calendar year 2026. Renewed tender activity is expected to increase demand for fire services in the US and internationally, and contribute to improved performance at Eagle and LHD Germany. We have approximately $178 million of global tender opportunities, including $38 million over $100,000 in value, with high probabilities of success. These opportunities are positioning us for expanded operating leverage with expense reductions and expanded margins as tenders deliver margins above normalized profile. We are now starting to see tender wins for calendar Q1 2026 across our entire product portfolio. Taken together, this past quarter was unacceptable.

At the end of Q3, inventory was $87.9 million, down from $90.2 million. This is at the end of the fiscal year 2026.

Our Global fire strategy remains intact heading into next fiscal year. The product portfolio is broader and stronger than at any time of the company's history, the jelly and FBA launches. Progressing lhd Europe is stabilizing and we're positioning the entire fire platform across the upcoming Global cycle.

I'll now pass the call to camaron to cover our industrial and chemical critical environment sectors.

We have recently initiated a series of targeted actions to optimize inventory levels across our entire organization looking ahead. We are highly focused on the upcoming tender cycle, which will position us for stronger execution and building momentum heading into calendar year 2026.

Renewed tender activity is expected to increase demand for fire services in the U.S. and internationally.

And contribute to improved performance at Eagle and LHD Germany.

Thanks Barry. During the third quarter, industrial demand. Softened the cross several industrial channels faster than expected. Distributors, reduce inventory, certain customers, deferred purchases, and competitive pricing tightened In Pockets of the market.

Our forecasting did not capture these shifts, quickly enough, creating the variance between expected and actual performance.

We have approximately 178 million of global tender opportunities, including 38 million over 100,000 value with high probabilities of success.

We are seeing cyclical adjustments in certain channels, not long-term erosion.

These opportunities are positioning us for expanded operating leverage with expense reductions and expanded margins, as tenders deliver margins of a normalized profile.

Several customer segments and geography, show stabilization signals and we expect run rate, predictability to improve as customer inventories normalize.

We are now starting to see tender wins for calendar, 1 2026 across our entire product portfolio.

James Jenkins: We missed our targets across multiple areas, and as CEO, I take full responsibility for that performance. Our forecasting has not been reliable, and the gap between our internal expectations and actual results has grown too large. Because of this, we will be withdrawing formal guidance. Instead, we are shifting to a more disciplined operating model focused on measurable execution, cash generation, and transparency. To help lead us forward, we have also realigned our finance team with the appointment of Calvin Sweeney as interim CFO effective 1 January. You'll be hearing from Calvin in a moment. At the same time, it is important to recognize that this quarter occurred against a backdrop of unprecedented headwinds across virtually all of our global operations. These challenges affected not just Lakeland, but our peers as well, many of whom have publicly acknowledged similar pressures.

We missed our targets across multiple areas, and as CEO, I take full responsibility for that performance. Our forecasting has not been reliable, and the gap between our internal expectations and actual results has grown too large. Because of this, we will be withdrawing formal guidance. Instead, we are shifting to a more disciplined operating model focused on measurable execution, cash generation, and transparency. To help lead us forward, we have also realigned our finance team with the appointment of Calvin Sweeney as interim CFO effective 1 January. You'll be hearing from Calvin in a moment. At the same time, it is important to recognize that this quarter occurred against a backdrop of unprecedented headwinds across virtually all of our global operations. These challenges affected not just Lakeland, but our peers as well, many of whom have publicly acknowledged similar pressures.

In response, forecasting has been unified into a consistent process across all industrial regions with more. Rigorous mid-month, accuracy, checks and Tighter reconciliation with distributed data.

We've shifted to channel level segmentation, so forecasting, reflects real Behavior inside customer groups rather than broad regional assumptions.

Taken together, this past quarter was unacceptable. We missed our targets across multiple areas, and as CEO, I take full responsibility for that performance. Our forecasting has not been reliable, and the gap between our internal expectations and actual results has grown too large. Because of this, we will be drawing formal guidance. Instead, we are shifting to a more disciplined operating model focused on measurable execution, cash generation, and transparency.

Increased in spots where certain competitors have short-term tariffs or sourcing advantages.

To help lead us forward, we have also realigned our finance team with the appointment of Calvin Sweeney as interim CFO, effective January 1st. You'll be hearing from Calvin in a moment.

We are addressing this with Selective incentives, aimed at volume stability, while managing overall margin discipline.

James Jenkins: Despite this environment, our long-term fundamentals remain intact, and our strategic conviction has not changed. We remain extremely optimistic about the underlying demand signals we are seeing: a robust and global fire tender pipeline, the necessary US refinery shutdown cycle ahead, our disciplined sales process, and clear signs of pent-up demand across nearly every region. We expect these headwinds to begin to ease as we move into calendar year 2026, and we continue to believe strongly in the long-term potential of both our fire and industrial strategies. This is not about lowering ambition. It's about rebuilding trust through results, not projections. We will provide regular updates on key operational milestones, inventory reduction progress, margin improvements, and the ERP and integration timelines. When our forecasting accuracy, sales cadence, and operational visibility improve to an acceptable standard, we will revisit reinstating guidance.

Despite this environment, our long-term fundamentals remain intact, and our strategic conviction has not changed. We remain extremely optimistic about the underlying demand signals we are seeing: a robust and global fire tender pipeline, the necessary US refinery shutdown cycle ahead, our disciplined sales process, and clear signs of pent-up demand across nearly every region. We expect these headwinds to begin to ease as we move into calendar year 2026, and we continue to believe strongly in the long-term potential of both our fire and industrial strategies. This is not about lowering ambition. It's about rebuilding trust through results, not projections. We will provide regular updates on key operational milestones, inventory reduction progress, margin improvements, and the ERP and integration timelines. When our forecasting accuracy, sales cadence, and operational visibility improve to an acceptable standard, we will revisit reinstating guidance.

Our strategy, our sales strategy requires rebuilding distributor run rates, re-engaging customers who deferred purchases tightening CRM and channel discipline, and stabilizing the chemical and critical environment segments.

At the same time, it is important to recognize that this quarter occurred against a backdrop of unprecedented headwinds across virtually all of our global operations. These challenges affected not just Lakeland, but our peers as well, many of whom have publicly acknowledged similar pressures.

These actions, create a predictable sound Foundation of volume.

Despite this environment, our long-term fundamentals, remain intact, and our strategic conviction has not changed.

When delayed tenders certifications and turnaround activity, return that volume becomes upside, the drops directly to operating Leverage

We remain extremely optimistic about the underlying demand signals. We are seeing a robust and global fire tender pipeline, with the necessary U.S. refineries shut down cycle ahead.

Our disciplined sales process and clear signs of pent-up demand across nearly every region.

We expect these headwinds to begin to ease as we move into calendar year 2026, and we continue to believe strongly in the long-term potential of both our Fire and Industrial strategies.

The goal is stable predictable growth driven by improved forecasting accuracy stronger, distributor engagement recovery, and delayed chemical and critical environment orders and disciplined Channel management. We are focused on building consistency rather than volatility with that. I'd like to pass the call to Kelvin to cover our financial results.

Thank you, Cameron and hello everyone. I'll provide a quick overview of our fiscal 2026. Third quarter financials before diving into the details.

James Jenkins: For now, our full focus is on running the core business with rigor, improving forecast accuracy, and delivering sustainable, predictable performance. With that, I'd like to pass the call to Barry to provide an update on fire services.

For now, our full focus is on running the core business with rigor, improving forecast accuracy, and delivering sustainable, predictable performance. With that, I'd like to pass the call to Barry to provide an update on fire services.

This is not about lowering ambition; it's about rebuilding trust in results. Not projections. We will provide regular updates on key operational milestones: inventory reduction, progress, margin improvements, and the ERP and integration timelines. When our forecasting accuracy, sales cadence, and operational visibility improve to an acceptable standard, we will revisit and reinstate guidance.

revenue for the quarter, grew 1.8 million year-over-year, to 47.6 million, an increase of 4% compared to the third quarter of fiscal 2025,

[Company Representative 1] (Lakeland Industries): Thank you, Jim. Looking at our fire services, revenue underperformed primarily because certification cycles and tender timelines extended longer than anticipated across multiple regions. These are timing delays rather than structural demand issues. The opportunities remain in the pipeline. The majority have not been lost. They've simply shifted later than expected. We continue to believe we have a high probability of success in securing $38 million of these opportunities within our total pipeline of $178 million. Our tender activity remains strong globally. Current delays reflect regulatory timing and administrative bottlenecks, and as Jim mentioned, competitors have cited similar headwinds. The underlying demand environment for fire services and protective gear remains intact. We remain highly confident in our major tenders currently in the late stages. Feedback from end users and procurement teams remains positive.

Barry Phillips: Thank you, Jim. Looking at our fire services, revenue underperformed primarily because certification cycles and tender timelines extended longer than anticipated across multiple regions. These are timing delays rather than structural demand issues. The opportunities remain in the pipeline. The majority have not been lost. They've simply shifted later than expected. We continue to believe we have a high probability of success in securing $38 million of these opportunities within our total pipeline of $178 million.

For now, our full focus is on running the core business with Rigger, improving forecast accuracy, and delivering sustainable, predictable performance. With that, I'd like to pass the call to Bry to provide an update on Fire Services.

Thank you. Jim, looking at our Fire Services, revenue underperformed primarily because certification cycles and tender timelines extended longer than anticipated across multiple regions.

Consolidated gross margin decreased to 29.7% from 40.6% for the third quarter of fiscal 2025, while our adjusted gross margin decreased to 31.3% as compared to 41.7% in the year ago. Period adjusted operating expenses increased by 0.4 million from 14.3 million in Q3 of last year to 1 4. 7, 3 3.

Our tender activity remains strong globally. Current delays reflect regulatory timing and administrative bottlenecks, and as Jim mentioned, competitors have cited similar headwinds. The underlying demand environment for fire services and protective gear remains intact. We remain highly confident in our major tenders currently in the late stages. Feedback from end users and procurement teams remains positive.

Net loss was 16 million or $1.64 per basic and diluted earnings per share for the third quarter of fiscal 2026 compared to the net income of 100,000 or 1 cent per basic and diluted earnings per share for the third quarter of fiscal 2025.

Adjusted Eva diet, excluding FX was 0.2 million for the quarter, a decrease of 4.5 million or 95% compared to the 4.7 million for the third quarter of fiscal year 2025.

These are timing delays rather than structural demand issues; the opportunities remain in the pipeline. The majority have not been lost; they've simply shifted later than expected. We continue to believe in the hunt. We have a high probability of success in securing $38 million of these opportunities within our total pipeline of $100.178 million. Our tender activity remains strong globally. Current delays reflect regulatory timing and administrative bottlenecks. And as Jim mentioned, competitors have cited similar headwinds. The underlying demand environment for fire services and protective gear remains intact.

[Company Representative 1] (Lakeland Industries): Delays have been driven by certification cycles and administrative timing, not competitive losses, and our confidence remains high. So we are not assigning timing commitments to these opportunities, except to say the majority of the $38 million of opportunities we believe will hit in FY27. Fire service margins remain structurally sound. The temporary compression came from volume timing and low absorption during the delays. As volume normalizes and tenders convert, margins are expected to recover without requiring broad pricing actions. For our sales team, the priority is to build a dependable base of monthly sales that is not dependent on large tenders or seasonal cycles. This means expanding distributor engagement, tightening forecast accuracy, strengthening bid coverage across brands, and accelerating new product commercialization. Our global fire strategy remains intact heading into next fiscal year. The product portfolio is broader and stronger than at any time in the company's history.

Delays have been driven by certification cycles and administrative timing, not competitive losses, and our confidence remains high. So we are not assigning timing commitments to these opportunities, except to say the majority of the $38 million of opportunities we believe will hit in FY27. Fire service margins remain structurally sound. The temporary compression came from volume timing and low absorption during the delays. As volume normalizes and tenders convert, margins are expected to recover without requiring broad pricing actions. For our sales team, the priority is to build a dependable base of monthly sales that is not dependent on large tenders or seasonal cycles. This means expanding distributor engagement, tightening forecast accuracy, strengthening bid coverage across brands, and accelerating new product commercialization. Our global fire strategy remains intact heading into next fiscal year. The product portfolio is broader and stronger than at any time in the company's history.

Adjusted ibida. Excluding FX margin in the third quarter, fiscal 2026 was 5.5%. A decrease of 988 basis points from 10.3%. In the third quarter of fiscal 2025 and a decrease of 918 basis points from 9.6% in the second quarter of fiscal 2026.

Feedback from end users and procurement teams. Remain positive delays have been driven by certification cycles and administrative timing not competitive losses and our confidence remains high. So, we are not assigning timing commitments. To these opportunities except to say majority of the 38 million of opportunities, We Believe will hit in FY 27.

Cash and cash. Equivalents were 17. Million 2 million on October 31st 2025 compared to 17.5 million on January 31st 2025

Fire service margins remain structurally sound. The temporary compression came from the bombing volume, timing, and low absorption. During the delays, as volume normalizes and tenders convert, margins are expected to recover without requiring broad pricing actions.

On a Consolidated basis. For the third quarter of fiscal 2026, domestic sales were 19.42 million representing, 40% of total revenues and international sales were 28.4 million accounting for 60% of total revenues.

As our recent, videon acquisition contributed to increase us Revenue.

For our sales team, the priority is to build a dependable base of monthly sales that is not dependent on large tenders or seasonal cycles. This means expanding distributor engagement, tightening forecast accuracy, strengthening bid coverage across brands, and accelerating new product commercialization.

This Compares with domestic sales of 15.44 million, or 34% of the total and international sales of 30.4 million or 66% in the third quarter of fiscal 2025.

[Company Representative 1] (Lakeland Industries): The Jolly and FPA launch is progressing. LHD Europe is stabilizing, and we're positioning the entire fire platform across the upcoming global cycle. I'll now pass the call to Cameron to cover our industrial and chemical critical environment sectors.

The Jolly and FPA launch is progressing. LHD Europe is stabilizing, and we're positioning the entire fire platform across the upcoming global cycle. I'll now pass the call to Cameron to cover our industrial and chemical critical environment sectors.

Looking at our third fiscal quarter of 2026, our quarterly Revenue faced challenges globally sales from our recent recent acquisitions, accounted for 10.1% were 37.5 million.

Our global fire strategy remains intact heading into the next fiscal year. The product portfolio is broader and stronger than at any time in the company's history. The jelly and FDA launches are progressing. LHC Europe is stabilizing, and we're positioning the entire fire platform across the upcoming global cycle.

I'll now pass the call to Camaron to cover our industrial and chemical critical environment sectors.

[Company Representative 2] (Lakeland Industries): Thanks, Barry. During Q3, industrial demand softened across several industrial channels faster than expected. Distributors reduced inventory, certain customers deferred purchases, and competitive pricing tightened in pockets of the market. Our forecasting did not capture these shifts quickly enough, creating the variance between expected and actual performance. We are seeing cyclical adjustments in certain channels, not long-term erosion. Several customer segments and geographies show stabilization signals, and we expect run rate predictability to improve as customer inventories normalize. In response, forecasting has been unified into a consistent process across all industrial regions, with more rigorous mid-month accuracy checks and tighter reconciliation with distributor data. We've shifted to channel-level segmentation, so forecasting reflects real behavior inside customer groups rather than broad regional assumptions. Looking to our competitors, share movement has been limited and localized. Pricing pressure has increased in spots where certain competitors have short-term tariff or sourcing advantages.

Cameron Stokes: Thanks, Barry. During Q3, industrial demand softened across several industrial channels faster than expected. Distributors reduced inventory, certain customers deferred purchases, and competitive pricing tightened in pockets of the market. Our forecasting did not capture these shifts quickly enough, creating the variance between expected and actual performance. We are seeing cyclical adjustments in certain channels, not long-term erosion. Several customer segments and geographies show stabilization signals, and we expect run rate predictability to improve as customer inventories normalize.

Sales of the fire Services product line, increase by 6 million year-over-year driven by 3.4 million sales from videon as well as organic fire Services growth of 3 million.

Thanks, Barry. During the third quarter, industrial demand softened across. Several industrial channels faster than expected. Distributors reduced inventory. Certain customers deferred purchases and competitive pricing tightened In Pockets of the market.

Our forecasting did not capture these shifts quickly enough, creating the variance between expected and actual performance.

Adjusted gross profit for the third quarter of fiscal, 2026 was 14.9 million, a decrease of 4.2 million or 22% compared to 19.1 million, to the third quarter of fiscal 2025, due to lower sales, higher product costs, and tariffs, and, and impacted us gross profit by 3.2 million versus Q2.

We are seeing cyclical adjustments in certain channels, not long-term erosion.

In response, forecasting has been unified into a consistent process across all industrial regions, with more rigorous mid-month accuracy checks and tighter reconciliation with distributor data. We've shifted to channel-level segmentation, so forecasting reflects real behavior inside customer groups rather than broad regional assumptions. Looking to our competitors, share movement has been limited and localized. Pricing pressure has increased in spots where certain competitors have short-term tariff or sourcing advantages.

Adjusted gross profit is a percentage of net sales decreased to 31.3% for the third quarter of fiscal 2026 from 41.7% for the third quarter of fiscal 2025.

Several customers and geography, show stabilization signals and we expect run rate, predictability to improve as customer inventories normalize.

In response, forecasting has been unified into a consistent process across all industrial regions, with more rigorous mid-month accuracy checks and tighter reconciliation with distributed data.

On an adjusted basis. Operating expenses excluding foreign exchange were 14.7 million. In the fiscal third quarter more accurately, showcasing the decreases in both our organic and inorganic segments resulting from the new cost reduction initiatives.

We've shifted to channel level segmentation, so forecasting, reflects real Behavior inside customer groups rather than broad regional assumptions.

The expenses were stable increasing by 41 million or 1% due to focus cost control measures and the previously mentioned initiatives.

[Company Representative 2] (Lakeland Industries): We are addressing this with selective incentives aimed at volume stability while managing overall margin discipline. Our sales strategy requires rebuilding distributor run rates, re-engaging customers who deferred purchases, tightening CRM and channel discipline, and stabilizing the chemical and critical environment segments. These actions create a predictable foundation of volume. When delayed tenders, certifications, and turnaround activity return, that volume becomes upside that drops directly to operating leverage. The goal is stable, predictable growth driven by improved forecasting accuracy, stronger distributor engagement, recovery in delayed chemical and critical environment orders, and disciplined channel management. We are focused on building consistency rather than volatility. With that, I'd like to pass the call to Calvin to cover our financial results.

We are addressing this with selective incentives aimed at volume stability while managing overall margin discipline. Our sales strategy requires rebuilding distributor run rates, re-engaging customers who deferred purchases, tightening CRM and channel discipline, and stabilizing the chemical and critical environment segments. These actions create a predictable foundation of volume. When delayed tenders, certifications, and turnaround activity return, that volume becomes upside that drops directly to operating leverage. The goal is stable, predictable growth driven by improved forecasting accuracy, stronger distributor engagement, recovery in delayed chemical and critical environment orders, and disciplined channel management. We are focused on building consistency rather than volatility. With that, I'd like to pass the call to Calvin to cover our financial results.

Looking to our competitors, share movement has been limited and localized. Pricing pressure has increased in spots where certain competitors have short-term tariffs or sourcing advantages.

We are addressing this with selective incentives aimed at volume stability while managing overall margin discipline.

Adjusted to EBA excluding FX was 200,000 for the fiscal third quarter, a decrease of 4.5 million or 95% compared with compared with 4.7 million for the third quarter of fiscal 2025 and a decrease of 4.8 million or 98% compared with 5.1 billion for the second quarter of fiscal 2026.

This significant decrease was result of lower performance in North and South America.

Our strategy requires rebuilding distributor run rates, re-engaging customers who deferred purchases, tightening CRM and channel discipline, and stabilizing the chemical and critical environment segments.

These actions create a predictable foundation of volume.

When delayed tender certifications and turnaround activity occur, that volume becomes upside, which drops directly to operating leverage.

Adjusted Ava FX margin was 0.5% for the most recent quarter, a decrease of 988 basis points from 10.3%. In the third quarter of fiscal 2025, and a decrease of 918 basis points from 9.6% in the second quarter of fiscal 2026.

The goal is stable, predictable growth driven by improved forecasting accuracy, stronger distributor engagement recovery, and delayed chemical and critical environment orders, along with disciplined channel management. We are focused on building consistency rather than volatility with that. I'd like to pass the call to Kelvin to cover our financial results.

Calvin Sweeney: Thank you, Cameron. Hello, everyone. I'll provide a quick overview of our fiscal 2026 third quarter financials before diving into the details. Revenue for the quarter grew $1.8 million year-over-year to $47.6 million, an increase of 4% compared to the third quarter of fiscal 2025. Consolidated gross margin decreased to 29.7% from 40.6% for the third quarter of fiscal 2025, while our adjusted gross margin decreased to 31.3% as compared to 41.7% in the year-ago period. Adjusted operating expenses increased by $0.4 million from $14.3 million in Q3 of last year to $14.7 million in the third quarter of fiscal 2026, primarily due to inorganic growth.

Calven Swinea: Thank you, Cameron. Hello, everyone. I'll provide a quick overview of our fiscal 2026 third quarter financials before diving into the details. Revenue for the quarter grew $1.8 million year-over-year to $47.6 million, an increase of 4% compared to the third quarter of fiscal 2025. Consolidated gross margin decreased to 29.7% from 40.6% for the third quarter of fiscal 2025, while our adjusted gross margin decreased to 31.3% as compared to 41.7% in the year-ago period. Adjusted operating expenses increased by $0.4 million from $14.3 million in Q3 of last year to $14.7 million in the third quarter of fiscal 2026, primarily due to inorganic growth.

Revenue for the training. 12 months ended October, 31st 2025 was 193.5 million and increase of 41.7 million or 27% versus the Q3 fiscal. 2025 trading 12 months revenue of 151.8 million. With our recent fire service acquisition supporting lakeland's continued Revenue growth.

Thank you, Cameron, and hello everyone. I'll provide a quick overview of our fiscal 2026 third quarter financials before diving into the details.

Revenue for the quarter grew $1.8 million year-over-year, to $47.6 million, an increase of 4% compared to the third quarter of fiscal 2025.

2012 month, suggested evaa excluding the impacts of FX was 9.3 million compared to 1 1. 7 0.

considering we completed 4 Acquisitions in the past 12 months, the full immigration information implementation, which requires some time we believe the resulting synergies and efficiencies will begin to translate into stronger, financial performance, in the coming quarters

Calvin Sweeney: Net loss was $16 million, or $1.64, per basic and diluted earnings per share for the third quarter of fiscal 2026, compared to a net income of $100,000 or $0.01 per basic and diluted earnings per share for the third quarter of fiscal 2025. Adjusted EBITDA excluding FX was $0.2 million for the quarter, a decrease of $4.5 million, or 95%, compared to the $4.7 million for the third quarter of fiscal year 2025. Adjusted EBITDA excluding FX margin in the third quarter of fiscal 2026 was 5.5%, a decrease of 988 basis points from 10.3% in the third quarter of fiscal 2025, and a decrease of 918 basis points from 9.6% in the second quarter of fiscal 2026. Cash and cash equivalents were $17.2 million on 31 October 2025, compared to $17.5 million on 31 January 2025.

Net loss was $16 million, or $1.64, per basic and diluted earnings per share for the third quarter of fiscal 2026, compared to a net income of $100,000 or $0.01 per basic and diluted earnings per share for the third quarter of fiscal 2025. Adjusted EBITDA excluding FX was $0.2 million for the quarter, a decrease of $4.5 million, or 95%, compared to the $4.7 million for the third quarter of fiscal year 2025. Adjusted EBITDA excluding FX margin in the third quarter of fiscal 2026 was 5.5%, a decrease of 988 basis points from 10.3% in the third quarter of fiscal 2025, and a decrease of 918 basis points from 9.6% in the second quarter of fiscal 2026. Cash and cash equivalents were $17.2 million on 31 October 2025, compared to $17.5 million on 31 January 2025.

Consolidated gross margin decreased to 29.7% from 40.6%. For the third quarter of fiscal 2025, our adjusted gross margin decreased to 31.3% as compared to 41.7% in the year-ago period. Adjusted operating expenses increased by $0.4 million, from $14.3 million in Q3 of last year to $14.7 million in the third quarter of fiscal 2026, primarily due to inorganic growth.

Adjusted gross margin percentage. Decrease in the third quarter of fiscal 2026 to 31.3% compared to 41.7% in the same period last year, due to lower required company. Gross margins, increased material and supply chain, costs and tariffs,

Margins, in the acquired businesses were impact impacted by increased material costs.

Net loss was $16 million, or $1.64 for basic and diluted earnings per share for the third quarter of fiscal 2026, compared to a net income of $100,000, or 1 cent per basic and diluted earnings per share for the third quarter of fiscal 2025.

The third quarter of fiscal year 2025.

Adjusted Eva diet, suiting FX was 0.2 million for the fiscal third quarter, a decrease of 4.5 million 95% compared with 4.7 billion in the third quarter fiscal 2025 as a plan was driven primarily by significant Revenue. Shortfalls in Latin America. Our highest margin region and lower than expected sales in the US fire and Industrials. Meridian lhd and Eagle were also in P impacted by NFPA certification delays and slower tender conversion globally.

These factors more than offset, the reductions achieved in operating expenses.

Adjusted evaa excluding FX margin in the third quarter, fiscal 2026 was 5.5%. A decrease of 988 basis points from 10.3%. In the third quarter of fiscal 2025 and a decrease of 918 basis points from 9.6% in the second quarter of fiscal 2026.

We are currently implementing an additional 1.3 million of cost reductions for the fourth quarter.

Calvin Sweeney: On a consolidated basis, for the third quarter of fiscal 2026, domestic sales were $19.2 million, representing 40% of total revenues, and international sales were $28.4 million, accounting for 60% of total revenues, as our recent Veridian acquisition contributed to increased US revenue. This compares with domestic sales of $15.4 million, or 34% of the total, and international sales of $30.4 million, or 66%, in the third quarter of fiscal 2025. Looking at our third fiscal quarter of 2026, our quarterly revenue faced challenges globally. Sales from our recent acquisition accounted for $10.1 million, while organic sales were $37.5 million. Sales of the fire services product line increased by $6 million year-over-year, driven by $3.4 million in sales from Veridian, as well as organic fire services growth of $3 million.

On a consolidated basis, for the third quarter of fiscal 2026, domestic sales were $19.2 million, representing 40% of total revenues, and international sales were $28.4 million, accounting for 60% of total revenues, as our recent Veridian acquisition contributed to increased US revenue. This compares with domestic sales of $15.4 million, or 34% of the total, and international sales of $30.4 million, or 66%, in the third quarter of fiscal 2025. Looking at our third fiscal quarter of 2026, our quarterly revenue faced challenges globally. Sales from our recent acquisition accounted for $10.1 million, while organic sales were $37.5 million. Sales of the fire services product line increased by $6 million year-over-year, driven by $3.4 million in sales from Veridian, as well as organic fire services growth of $3 million.

Cash and cash equivalents were $17 million and $2 million on October 31, 2025, compared to $17.5 million on January 31, 2025.

Reviewing our performance for the third quarter, our most recent acquisitions reading and contributed 3.4 million in Revenue, during the quarter and lhd added 6 million across 3 subsidiaries Germany, Australia, and Hong Kong.

We expect sales from our fire services to accelerate as we fulfill open orders. Capitalized, on cross selling our opportunities and execute on our sales and dendra pipeline.

On a consolidated basis, for the third quarter of fiscal 2026, domestic sales were $19.42 million, representing 40% of total revenues, and international sales were $28.4 million, accounting for 60% of total revenues.

As our recent video acquisition contributed to an increase in our revenue.

looking at our organic business, our us Revenue decreased 3% to 15 million from 15.4 million driven by declines in our industrial business, due to tariff uncertainty

This compares with domestic sales of 15.44 million, or 34% of the total, and international sales of 30.4 million, or 66%, in the third quarter of fiscal 2026.

Our European Revenue, including Eagle jolly and our recently, acquired LHC business increased 6% to 15.2 million. We continue to see very good sales opportunities in Europe and are committed to its growth trajectory.

Looking at our third fiscal quarter of 2026, our quarterly revenue faced challenges. Global sales from our recent acquisitions accounted for 10.16%.

Our Latin American operations, experience of 0.8 million, 0.8 million decrease in sales from 5 million in the year ago. Period to 4.2 million in the current quarter primarily due to ongoing delayed purchase decisions, resulting from political uncertainty.

Calvin Sweeney: Adjusted gross profit for the third quarter of fiscal 2026 was $14.9 million, a decrease of $4.2 million, or 22%, compared to $19.1 million for the third quarter of fiscal 2025 due to lower sales, higher product costs, and tariffs and impacted US gross profit by $3.2 million versus Q2. Adjusted gross profit is a percentage of net sales decreased to 31.3% for the third quarter of fiscal 2026 from 41.7% for the third quarter of fiscal 2025. On an adjusted basis, operating expenses excluding foreign exchange were $14.7 million in the fiscal third quarter, more accurately showcasing the decreases in both our organic and inorganic segments resulting from the new cost reduction initiatives. On a sequential basis, adjusted operating expenses were stable, increasing by $0.1 million, or 1%, due to focused cost control measures in the previously mentioned initiatives.

Adjusted gross profit for the third quarter of fiscal 2026 was $14.9 million, a decrease of $4.2 million, or 22%, compared to $19.1 million for the third quarter of fiscal 2025 due to lower sales, higher product costs, and tariffs and impacted US gross profit by $3.2 million versus Q2. Adjusted gross profit is a percentage of net sales decreased to 31.3% for the third quarter of fiscal 2026 from 41.7% for the third quarter of fiscal 2025. On an adjusted basis, operating expenses excluding foreign exchange were $14.7 million in the fiscal third quarter, more accurately showcasing the decreases in both our organic and inorganic segments resulting from the new cost reduction initiatives. On a sequential basis, adjusted operating expenses were stable, increasing by $0.1 million, or 1%, due to focused cost control measures in the previously mentioned initiatives.

Sales of the Fire Services product line increased by $6 million year-over-year, driven by $3.4 million in sales from Videon, as well as organic Fire Services growth of $3 million.

In Asia, sales decreased 19% year-over-year from 3.6 million to 2.9 Million.

Regarding product mix for fiscal year to date 2026. Our fire Services. Businesses grew to 49% of revenues versus 39% for fiscal year. 20125 driven by full 9 months of region sales and organic gains in the US.

Adjusted gross profit for the third quarter of fiscal 2026 was $14.9 million, a decrease of $4.2 million or 22% compared to $19.1 million for the third quarter of fiscal 2025, due to lower sales, higher product costs, and tariffs, and impacted our gross profit by $3.2 million versus Q2.

For our industrial product line, disposables accounted for 26% of the year-to-date Revenue while chemicals accounted for 11% the remainder of our Industrial Products including high performance and high Vis accounting for 14% of sales.

Now, turned into the balance sheet.

Adjusted gross profit as a percentage of net sales decreased to 31.3% for the third quarter of fiscal 2026, down from 41.7% for the third quarter of fiscal 2025.

The 1745 million cash and 16.4 million in the long-term debt as of January 31st 2025.

On an adjusted basis, operating expenses excluding foreign exchange were $14.7 million in the fiscal third quarter, more accurately showcasing the decreases in both our organic and inorganic segments resulting from the new cost reduction initiatives.

Calvin Sweeney: Adjusted EBITDA excluding FX was $200,000 for the fiscal third quarter, a decrease of $4.5 million, or 95%, compared with $4.7 million for the third quarter of fiscal 2025, and a decrease of $4.8 million, or 98%, compared with $5.1 million for the second quarter of fiscal 2026. This significant decrease was a result of lower performance in North and South America. Adjusted EBITDA FX margin was 0.5% for the most recent quarter, a decrease of 988 basis points from 10.3% in the third quarter of fiscal 2025, and a decrease of 918 basis points from 9.6% in the second quarter of fiscal 2026. Revenue for the trailing 12 months ended 31 October 2025, was $193.5 million, an increase of $41.7 million, or 27%, versus the Q3 fiscal 2025 trailing 12 months revenue of $151.8 million, with our recent fire service acquisition supporting Lakeland's continued revenue growth.

Adjusted EBITDA excluding FX was $200,000 for the fiscal third quarter, a decrease of $4.5 million, or 95%, compared with $4.7 million for the third quarter of fiscal 2025, and a decrease of $4.8 million, or 98%, compared with $5.1 million for the second quarter of fiscal 2026. This significant decrease was a result of lower performance in North and South America. Adjusted EBITDA FX margin was 0.5% for the most recent quarter, a decrease of 988 basis points from 10.3% in the third quarter of fiscal 2025, and a decrease of 918 basis points from 9.6% in the second quarter of fiscal 2026. Revenue for the trailing 12 months ended 31 October 2025, was $193.5 million, an increase of $41.7 million, or 27%, versus the Q3 fiscal 2025 trailing 12 months revenue of $151.8 million, with our recent fire service acquisition supporting Lakeland's continued revenue growth.

On a sequential basis, adjusted operating expenses were stable, increasing by $4.1 million or 1% due to focused cost control measures and the previously mentioned initiatives.

As of October 31st 2025 our long-term debt of 37.1 million included, borrowings of 33.2 million outstanding under the revolving. Credit facility with an additional 6.8 million of available credit under the loan agreement.

We were in compliance with all our credit credit facility Covenants.

In August, we sold our decater Alabama, property for 162.1 million less customary commissions and closing, fees and applied 100% of the net proceeds to repay our revolving credit facilities.

Adjusted IBA, excluding FX, was $200,000 for the fiscal third quarter, a decrease of $4.5 million or 95% compared with $4.7 million for the third quarter of fiscal 2025, and a decrease of $4.8 million or 98% compared with $5.1 million for the second quarter of fiscal 2026.

This significant decrease was a result of lower performance in North and South America.

Net cash used in operating activities with 17.6 million in the 9 months into October, 31st 2025, compared to 1245 million, the 9 months ended October 31st 2024, the increase was driven by a decline in profitability for the disease. Discussed Erp implementation costs and an increase in working capital of 7.9 million.

Adjusted Ava FX margin was 0.5% for the most recent quarter, a decrease of 988 basis points from 10.3% in the third quarter of fiscal 2025, and a decrease of 918 basis points from 9.6% in the second quarter of fiscal 2026.

Capital expenditures, total 0.8 million for the 9 months into October. 31st 2025 primary related to a replacement equipment for our manufacturing sites and develop technology projects. We anticipate FY, 26, Capital expenditures to be approximately 1.2 million.

Calvin Sweeney: Trailing 12-month adjusted EBITDA, excluding the impacts of FX, was $9.3 million, compared to $11.7 million for the prior quarter's trailing 12 months. The decrease was driven by lower margin revenue mix, increased material and freight costs, and tariffs. Considering we completed four acquisitions in the past 12 months, the full integration implementation, which requires some time, we believe the resulting synergies and efficiencies will begin to translate into stronger financial performance in the coming quarters. Adjusted gross margin percentage decreased in Q3 of fiscal 2026 to 31.3%, compared to 41.7% in the same period last year due to lower acquired company gross margins, increased material and supply chain costs, and tariffs. Margins in the acquired businesses were impacted by increased material costs.

Trailing 12-month adjusted EBITDA, excluding the impacts of FX, was $9.3 million, compared to $11.7 million for the prior quarter's trailing 12 months. The decrease was driven by lower margin revenue mix, increased material and freight costs, and tariffs. Considering we completed four acquisitions in the past 12 months, the full integration implementation, which requires some time, we believe the resulting synergies and efficiencies will begin to translate into stronger financial performance in the coming quarters. Adjusted gross margin percentage decreased in Q3 of fiscal 2026 to 31.3%, compared to 41.7% in the same period last year due to lower acquired company gross margins, increased material and supply chain costs, and tariffs. Margins in the acquired businesses were impacted by increased material costs.

Revenue for the training for the 12 months ended October 31, 2025, was $193.5 million, an increase of $41.7 million, or 27%, versus the Q3 Fiscal 2025 trade. In the 12 months, revenue was $151.8 million, with our recent fire service acquisition supporting Lakeland's continued revenue growth.

2012 month suggested EVA, excluding the impacts of FX, was $9.3 million compared to $1.1 million.

Lastly given near-term headwinds and in order to prudently manage our cash, the company has made the decision to suspend its quarterly cash dividend on our common stock. We Believe reinvesting profit profits into growth opportunities such as Acquisitions are Market. Expansion, is a better return for shareholders in the future. The payment of any future dividends will be at the discretion of the board and will depend on the company's Financial conditions. Results of operations, Capital requirements, and any other factors deemed relevant by the board.

At the end of Q3 inventory was 87.9 Million down from 90.2 million. At the end of Q2 fiscal year 2026.

Considering we completed four acquisitions in the past twelve months, the full immigration information implementation, which requires some time, we believe the resulting synergies and efficiencies will begin to translate into stronger financial performance in the coming quarters.

Adjusted gross margin percentage decreased in the third quarter of fiscal 2026 to 31.3%, compared to 41.7% in the same period last year, due to lower required company gross margins, increased material and supply chain costs, and tariffs.

Calvin Sweeney: Adjusted EBITDA excluding FX was $0.2 million for the fiscal third quarter, a decrease of $4.5 million, or 95%, compared with $4.7 million in the third quarter of fiscal 2025. The decline was driven primarily by significant revenue shortfalls in Latin America, our highest margin region, and lower than expected sales in the US fire industrials. Veridian, LHD, and Eagle were also impacted by NFPA certification delays and slower tender conversion globally. These factors more than offset the reductions achieved in operating expenses. We are currently implementing an additional $1.3 million of cost reductions for the fourth quarter. Reviewing our performance for the third quarter, our most recent acquisition, Veridian, contributed $3.4 million in revenue during the quarter, and LHD added $6 million across three subsidiaries: Germany, Australia, and Hong Kong.

Adjusted EBITDA excluding FX was $0.2 million for the fiscal third quarter, a decrease of $4.5 million, or 95%, compared with $4.7 million in the third quarter of fiscal 2025. The decline was driven primarily by significant revenue shortfalls in Latin America, our highest margin region, and lower than expected sales in the US fire industrials. Veridian, LHD, and Eagle were also impacted by NFPA certification delays and slower tender conversion globally. These factors more than offset the reductions achieved in operating expenses. We are currently implementing an additional $1.3 million of cost reductions for the fourth quarter. Reviewing our performance for the third quarter, our most recent acquisition, Veridian, contributed $3.4 million in revenue during the quarter, and LHD added $6 million across three subsidiaries: Germany, Australia, and Hong Kong.

Margins in the acquired businesses were impacted by increased material costs.

We have recently initiated a series of targeted actions to optimize inventory levels across specific categories. Our immediate priorities include us industrial jolly lhd and videon where we see the greatest opportunity to align balances with demand and improved efficiency, inventory of required companies, total 14.3, million versus 7 million last year. 6 million acquired companies, increase came from the vision acquisition, and lhc's inventory increased by 1.3 million versus the last year.

Year-over-year. We saw an increase in our organic inventory of 7.9 million versus the quarter ended, October 31st 2024,

What $5 million, or 95%, compared with $4.7 billion in the third quarter of fiscal 2025 does the climb was driven primarily by significant revenue shortfalls in Latin America, our highest margin region, and lower than expected sales in the U.S. fire and industrials. Meridian, LHC, and Eagle were also impacted by NFPA certification delays and slower tender conversion globally.

Organic finished goods, were 38.8 million in the third quarter, fiscal 2026 of 5.6 million year-over-year and down 0.5 million quarter of a quarter, organic raw materials, were 33 million, and third quarter, fiscal 2026, 241 million year-over-year and down 0.4 million, quarter over quarter.

These factors more than offset the reductions achieved in operating expenses.

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

We are currently implementing an additional $1.3 million in cost reductions for the fourth quarter.

Thank you Calvin. In conclusion, we continue to demonstrate net sales, growth reflecting the strength of our underlying business. This growth is further supported by a 31% year-over-year, increase in our fire services, our robust pipeline of approximately 178 million,

Calvin Sweeney: We expect sales from our fire services to accelerate as we fulfill open orders, capitalize on cross-selling opportunities, and execute on our sales and tender pipeline. Looking at our organic business, our US revenue decreased 3% to $15 million from $15.4 million, driven by declines in our industrial business due to tariff uncertainty. Our European revenue, including Eagle, Jolly, and our recently acquired LHD business, increased 6% to $15.2 million. We continue to see very good sales opportunities in Europe and are committed to its growth trajectory. Our Latin American operations experienced a $0.8 million decrease in sales from $5 million in the year-ago period to $4.2 million in the current quarter, primarily due to ongoing delayed purchase decisions resulting from political uncertainty. In Asia, sales decreased 19% year-over-year from $3.6 million to $2.9 million.

We expect sales from our fire services to accelerate as we fulfill open orders, capitalize on cross-selling opportunities, and execute on our sales and tender pipeline. Looking at our organic business, our US revenue decreased 3% to $15 million from $15.4 million, driven by declines in our industrial business due to tariff uncertainty. Our European revenue, including Eagle, Jolly, and our recently acquired LHD business, increased 6% to $15.2 million. We continue to see very good sales opportunities in Europe and are committed to its growth trajectory. Our Latin American operations experienced a $0.8 million decrease in sales from $5 million in the year-ago period to $4.2 million in the current quarter, primarily due to ongoing delayed purchase decisions resulting from political uncertainty. In Asia, sales decreased 19% year-over-year from $3.6 million to $2.9 million.

Reviewing our performance for the third quarter, our most recent acquisitions contributed $3.4 million in revenue during the quarter. LHD added $6 million across three subsidiaries: Germany, Australia, and Hong Kong.

We expect sales from our fire services to accelerate as we fulfill open orders. Capitalize on cross-selling opportunities and execute on our sales and tender pipeline.

Include the approximately 38 million in near-term, high probability opportunities providing momentum heading into fiscal year 27. We are now starting to see tender wins for calendar, q1 2026 across the entire product portfolio. These opportunities are positioning us for expanded operating leverage with expense reductions and expanded margins. As tender as delivered margins above, normalized Pro profile.

Looking at our organic business, our U.S. revenue decreased 3% to $15 million, down from $15.4 million, driven by declines in our industrial business due to tariff uncertainty.

Our European revenue, including Eagle Jolly and our recently acquired LHC business, increased 6% to $15.2 million. We continue to see very good sales opportunities in Europe and are committed to its growth trajectory.

Our near-term strategy is focused on navigating the continued challenges from the evolving macro environment. While expanding Topline Revenue in our fire services and Industrial verticals. I'm maintaining a focus on operating and Manufacturing efficiencies, we believe we are well, positioned to deliver higher margins and improve free cash flow all against the backdrop of ongoing, macro uncertainties.

Our Latin American operations, experience of 08 million, 08 million, decreasing sales from 5 million in the year ago. Period to 4.2 million in the current quarter primarily due to ongoing delayed purchase decisions, resulting from political uncertainty.

Calvin Sweeney: Regarding product mix for fiscal year-to-date 2026, our fire services businesses grew to 49% of revenues versus 39% for fiscal year 2025, driven by full nine months of Veridian sales and organic gains in the US. For our industrial product line, disposables accounted for 26% of the year-to-date revenue, while chemicals accounted for 11%. The remainder of our industrial products, including high performance, and high viz, accounted for 14% of sales. Now, turning to the balance sheet. Lakeland ended the quarter with cash and cash equivalents of approximately $17.1 million and long-term debt of $37.1 million. This compares to $17.5 million in cash and $16.4 million in long-term debt as of 31 January 2025. As of 31 October 2025, our long-term debt of $37.1 million included borrowings of $33.2 million outstanding under the revolving credit facility, with an additional $6.8 million of available credit under the loan agreement.

Regarding product mix for fiscal year-to-date 2026, our fire services businesses grew to 49% of revenues versus 39% for fiscal year 2025, driven by full nine months of Veridian sales and organic gains in the US. For our industrial product line, disposables accounted for 26% of the year-to-date revenue, while chemicals accounted for 11%. The remainder of our industrial products, including high performance, and high viz, accounted for 14% of sales. Now, turning to the balance sheet. Lakeland ended the quarter with cash and cash equivalents of approximately $17.1 million and long-term debt of $37.1 million. This compares to $17.5 million in cash and $16.4 million in long-term debt as of 31 January 2025. As of 31 October 2025, our long-term debt of $37.1 million included borrowings of $33.2 million outstanding under the revolving credit facility, with an additional $6.8 million of available credit under the loan agreement.

In Asia, sales decreased 19% year-over-year, from 3.6 million to 2.9 million.

Looking long term, our strategy remains to grow both our fire services and Industrial PPE verticals through our strategically, located company owned Capital, light model, by maintaining a focus on operating and Manufacturing efficiencies, We believe We Are positioned to grow faster than the markets. We serve our acquisition pipeline also remains robust with active discussions underway in line with our overall growth strategy. Although challenges that affected our forecasting ability and we have withdrawn our formal guidance. We expect Topline Revenue growth in the high single digit.

Regarding product mix for fiscal year-to-date 2026, our Fire Services business grew to 49% of revenues versus 39% for fiscal year 2025, driven by a full 9 months of original sales and organic gains in the U.S.

Revenue growth across Global operations over the next 3 quarters.

For our industrial product line, disposables accounted for 26% of the year-to-date revenue, while chemicals represented 11%. The remainder of our industrial products, including high performance and high visibility, accounted for 14% of sales.

Now, turning to the balance sheet.

Lakeland entered the quarter with cash and cash equivalents of approximately $17 million and long-term debt of $37.1 million. This compares to $17.5 million in cash and $16.44 million in long-term debt as of January 31, 2025.

3 years to cost discipline operational, consolidation and targeted, commercial Investments, as we look forward to the future. We are confident that our continued focus on targeted. Acquisitions will serve as key growth drivers over the next 3 to 4 years we are actively engaging in discussions aligned with our decontamination rental and services growth strategy. We look forward to sharing upcoming milestones in the weeks and months ahead with that. We will now open the call for questions, operator.

Thank you.

Calvin Sweeney: We were in compliance with all our credit facility covenants. In August, we sold our Decatur, Alabama property for $6.1 million less customary commissions and closing fees and applied 100% of the net proceeds to repay our revolving credit facilities. Net cash used in operating activities was $17.6 million in the nine months ended 31 October 2025, compared to $12.5 million in the nine months ended 31 October 2024. The increase was driven by a decline in profitability previously discussed, ERP implementation costs, and an increase in working capital of $7.9 million. Capital expenditures totaled $0.8 million for the nine months ended 31 October 2025, primarily related to replacement equipment for our manufacturing sites and developed technology projects. We anticipate FY26 capital expenditures to be approximately $1.2 million.

We were in compliance with all our credit facility covenants. In August, we sold our Decatur, Alabama property for $6.1 million less customary commissions and closing fees and applied 100% of the net proceeds to repay our revolving credit facilities. Net cash used in operating activities was $17.6 million in the nine months ended 31 October 2025, compared to $12.5 million in the nine months ended 31 October 2024. The increase was driven by a decline in profitability previously discussed, ERP implementation costs, and an increase in working capital of $7.9 million. Capital expenditures totaled $0.8 million for the nine months ended 31 October 2025, primarily related to replacement equipment for our manufacturing sites and developed technology projects. We anticipate FY26 capital expenditures to be approximately $1.2 million.

As of October 31, 2025, our long-term debt of $37.1 million included borrowings of $33.2 million outstanding under the revolving credit facility, with an additional $6.8 million of available credit under the loan agreement.

We were in compliance with all our credit facility covenants.

And with that, this will now start the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 to remove yourself from the queue.

In August, we sold our Dakar, Alabama property for $162.1 million. After deducting customary commissions and fees, we applied 100% of the net proceeds to repay our revolving credit facilities.

For participants using speaker equipment and may be necessary to pick up the handset before pressing the star key.

1 moment while we pull for questions.

And our first question comes from the line of Jerry Sweeney with Roth Capital Partners. Please proceed with your question.

Uh, good afternoon, Jim. Thanks for taking my call.

Hey, Jerry.

Net cash used in operating activities was $17.6 million for the 9 months ended October 31st, 2025, compared to $12.5 million for the 9 months ended October 31st, 2024. The increase was driven by the decline in profitability previously discussed, ERP implementation costs, and an increase in working capital of $7.9 million.

Um just wanted to talk about the fire service, tenders 38 million high probability.

Calvin Sweeney: Lastly, given near-term headwinds and in order to prudently manage our cash, the company has made the decision to suspend its quarterly cash dividend on our common stock. We believe reinvesting profits into growth opportunities such as acquisitions or market expansion is a better return for shareholders in the future. The payment of any future dividends will be at the discretion of the board and will depend on the company's financial conditions, results of operations, capital requirements, and any other factors deemed relevant by the board. At the end of Q3, inventory was $87.9 million, down from $90.2 million at the end of Q2 fiscal year 2026. We have recently initiated a series of targeted actions to optimize inventory levels across specific categories. Our immediate priorities include US industrial, Jolly, LHD, and Veridian, where we see the greatest opportunity to align balances with demand and improve efficiency.

Lastly, given near-term headwinds and in order to prudently manage our cash, the company has made the decision to suspend its quarterly cash dividend on our common stock. We believe reinvesting profits into growth opportunities such as acquisitions or market expansion is a better return for shareholders in the future. The payment of any future dividends will be at the discretion of the board and will depend on the company's financial conditions, results of operations, capital requirements, and any other factors deemed relevant by the board. At the end of Q3, inventory was $87.9 million, down from $90.2 million at the end of Q2 fiscal year 2026. We have recently initiated a series of targeted actions to optimize inventory levels across specific categories. Our immediate priorities include US industrial, Jolly, LHD, and Veridian, where we see the greatest opportunity to align balances with demand and improve efficiency.

Capital expenditures total $0.8 million for the 9 months ending October 31, 2025, primarily related to the replacement of equipment for our manufacturing sites and development of technology projects. We anticipate FY 2026 capital expenditures to be approximately $1.2 million.

Lastly, given near-term headwinds, and in order to prudently manage our cash, the company has made the decision to suspend its quarterly cash dividend on our common stock. We believe reinvesting profits into growth opportunities such as acquisitions and market expansion is a better return for shareholders in the future.

The payment of any future dividends will be at the discretion of the board and will depend on the company's financial conditions, results of operations, capital requirements, and any other factors deemed relevant by the board.

You know what makes sense, what makes you think they're high probability and then the follow on to that was would be that 178 million total is there an opportunity for that to expand further especially with some of the NFPA determinations coming out in the next couple of hopefully in the next month or 2? Um yes yes Jerry. So yeah so um I'm gonna I'm gonna you know I'm glad Barry is here, is 1 of the reasons why I wanted to have Barry and Cameron here. Uh, was to talk about some of these opportunities and Barry, I'll let you sort of answer that because I know there's a number of buckets that those fall into those High probabilities. Yeah, thank you. Um, there are places where there's 4 buckets, um, 2 position results in a high probability position, is, would are we the incumbent? So, do we already have the business with that correlation with that and Department? Um, next would be is the competitor that's incumbent struggling in some manner.

Calvin Sweeney: Inventory of acquired companies totaled $14.3 million versus $7 million last year. $6 million of acquired companies' increase came from the Veridian acquisition, and LHD's inventory increased by $1.3 million versus last year. Year-over-year, we saw an increase in our organic inventory of $7.9 million versus the quarter ended 31 October 2024. Organic finished goods were $38.8 million in the third quarter of fiscal 2026, up $5.6 million year-over-year and down $0.5 million quarter-over-quarter. Organic raw materials were $33 million in the third quarter of fiscal 2026, up $2.1 million year-over-year and down $0.4 million quarter-over-quarter. With that overview, I'd like to turn the call back over to Jim before we begin taking questions. Thank you, Calvin. In conclusion, we continue to demonstrate net sales growth reflecting the strength of our underlying business. This growth is further supported by a 31% year-over-year increase in our fire services.

Inventory of acquired companies totaled $14.3 million versus $7 million last year. $6 million of acquired companies' increase came from the Veridian acquisition, and LHD's inventory increased by $1.3 million versus last year. Year-over-year, we saw an increase in our organic inventory of $7.9 million versus the quarter ended 31 October 2024. Organic finished goods were $38.8 million in the third quarter of fiscal 2026, up $5.6 million year-over-year and down $0.5 million quarter-over-quarter. Organic raw materials were $33 million in the third quarter of fiscal 2026, up $2.1 million year-over-year and down $0.4 million quarter-over-quarter. With that overview, I'd like to turn the call back over to Jim before we begin taking questions.

Increase came from the root and acquisition. And lhc's inventory increased by 1.3 million versus last year.

Um additionally we are also looking at where we can come in with multiple Brands strategy and with some of our portfolio that we have overlaps in year for example, that we can have 2 or more bids involved in the process. And lastly, if we're at positioned, well, with the department and we're written into the specifications. So, so Jerry that 38 million is where all of those those sort of 4 buckets fall for us. Um, so that's, that's why we view them as high probabilities and then that 178 million.

Year over year, we saw an increase in our organic inventory of $7.9 million versus the quarter ended October 31, 2024.

Organic finished goods were $38.8 million in the third quarter of fiscal 2026, up $5.6 million year-over-year and down $0.5 million quarter-over-quarter. Organic raw materials were $33 million in the third quarter of fiscal 2026, up $24.1 million year-over-year and down $4.44 million quarter-over-quarter.

Jim Jenkins: Thank you, Calvin. In conclusion, we continue to demonstrate net sales growth reflecting the strength of our underlying business. This growth is further supported by a 31% year-over-year increase in our fire services.

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

Calvin Sweeney: Our robust pipeline of approximately $178 million includes approximately $38 million in near-term high-probability opportunities, providing momentum heading into fiscal year 2027. We are now starting to see tender wins for calendar Q1, 2026, across the entire product portfolio. These opportunities are positioning us for expanded operating leverage with expense reductions and expanded margins as tenders deliver margins above normalized profile. Our near-term strategy is focused on navigating the continued challenges from the evolving macro environment while expanding top-line revenue in our fire services and industrial verticals. By maintaining a focus on operating and manufacturing efficiencies, we believe we are well-positioned to deliver higher margins and improve free cash flow, all against the backdrop of ongoing macro uncertainties. Looking long-term, our strategy remains to grow both our fire services and industrial PPE verticals through our strategically located, company-owned capital-light model.

Our robust pipeline of approximately $178 million includes approximately $38 million in near-term high-probability opportunities, providing momentum heading into fiscal year 2027. We are now starting to see tender wins for calendar Q1, 2026, across the entire product portfolio. These opportunities are positioning us for expanded operating leverage with expense reductions and expanded margins as tenders deliver margins above normalized profile. Our near-term strategy is focused on navigating the continued challenges from the evolving macro environment while expanding top-line revenue in our fire services and industrial verticals.

Thank you, Calvin. In conclusion, we continue to demonstrate net sales growth, reflecting the strength of our underlying business. This growth is further supported by a 31% year-over-year increase in our fire services and our robust pipeline of approximately $178 million.

Look, we win all the high probabilities and we'll win some of the others in 178 million. Um, but I think if, if you, if you talk to any of our competitors, they'll say the same thing, you know, um, once uh, once these certifications and standards are adopted, sort of the floodgates should open over a period of time. And and, and again, I think what we're trying to caution is, if it's not going to, it's going to happen and it's going to happen during physical 27, but it's going to happen, you know, over a period of time during that that fiscal year. Um, you know, I I, I look at certifications and standards and and they they appear, you know, over a very long period of time. There's there's a 10 year sort of window for these standards. Um, and, you know, they're kind of like the cicada, they show up every 17 years, these standards kind of show up. And when they do, um, there's a bit of a um,

Include the approximately $38 million in near-term, high probability opportunities providing momentum heading into fiscal year 2027. We are now starting to see tender wins for calendar Q1 2026 across the entire product portfolio. These opportunities are positioning us for expanded operating leverage with expense reductions and expanded margins. As tender delivered margins are above the normalized profile.

You know, a, a loggerhead here that kind of gets kind of slows it down on the decision-making front. I've talked about this in Prior calls, about the 25 year automobile model versus the 26, and waiting and this this is exactly what's happened.

By maintaining a focus on operating and manufacturing efficiencies, we believe we are well-positioned to deliver higher margins and improve free cash flow, all against the backdrop of ongoing macro uncertainties. Looking long-term, our strategy remains to grow both our fire services and industrial PPE verticals through our strategically located, company-owned capital-light model.

I think in the in the tender cycle that we're seeing is that these tenders particularly in the US and in areas where NFPA is becoming more rapidly accepted um those tenders have slowed and so we'll see those pick up as soon as those standards are issued originally, we believe the standards were going to come into play in March of 25. They were then extended to September.

Our near-term strategy is focused on navigating the continued challenges from the evolving macro environment. While expanding Topline Revenue in our fire services and Industrial verticals. I'm maintaining a focus on operating and Manufacturing efficiencies, we believe we are well, positioned to deliver higher margins and improve free cash flow all against the backdrop of ongoing, macro uncertainties.

Calvin Sweeney: By maintaining a focus on operating and manufacturing efficiencies, we believe we are positioned to grow faster than the markets we serve. Our acquisition pipeline also remains robust, with active discussions underway in line with our overall growth strategy. Although challenges have affected our forecasting ability and we have withdrawn our formal guidance, we expect top-line revenue growth and a high single-digit revenue growth across global operations over the next three quarters. We are targeting 10% to 12% adjusted EBITDA margins with incremental growth in EBITDA margins over the next three quarters. Looking farther ahead, we expect 15% to 17% adjusted EBITDA margins over the next three years through cost discipline, operational consolidation, and targeted commercial investments. As we look forward to the future, we are confident that our continued focus on targeted acquisitions will serve as key growth drivers over the next three to four years.

By maintaining a focus on operating and manufacturing efficiencies, we believe we are positioned to grow faster than the markets we serve. Our acquisition pipeline also remains robust, with active discussions underway in line with our overall growth strategy. Although challenges have affected our forecasting ability and we have withdrawn our formal guidance, we expect top-line revenue growth and a high single-digit revenue growth across global operations over the next three quarters. We are targeting 10% to 12% adjusted EBITDA margins with incremental growth in EBITDA margins over the next three quarters. Looking farther ahead, we expect 15% to 17% adjusted EBITDA margins over the next three years through cost discipline, operational consolidation, and targeted commercial investments. As we look forward to the future, we are confident that our continued focus on targeted acquisitions will serve as key growth drivers over the next three to four years.

Number of 25 and ultimately extended to March of 26. We have no reason to believe. And in fact, what we're hearing is that, that will be the date. The, the 26th should be the date. March 26th, should be the date. So, um, that's why we're feeling very bullish about where we're driving. Uh, our our, our fire opportunities.

Got it then on the Mars in front. Um, if I heard you correctly,

Obviously, there's a lot more calls, tariffs raw materials Logistics Etc. But it sounded also that

As sound as though.

Looking long term, our strategy remains to grow both our fire services and industrial PPE verticals through our strategically located company-owned capital light model, by maintaining a focus on operating and manufacturing efficiencies. We believe we are positioned to grow faster than the markets we serve. Our acquisition pipeline also remains robust, with active discussions underway in line with our overall growth strategy. Although challenges have affected our forecasting ability, we have withdrawn our formal guidance. We expect topline revenue growth in the high single digits.

you could recover those costs to just

Revenue growth across global operations over the next three quarters.

Calvin Sweeney: We are actively engaging in discussions aligned with our decontamination, rental, and services growth strategy. We look forward to sharing upcoming milestones in the weeks and months ahead. With that, we will now open the call for questions. Operator. Thank you. And with that, this will now start the question-and-answer session. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the Star keys. One moment while we poll for questions. And our first question comes from the line of Jerry Sweeney with Roth Capital Partners. Please proceed with your question. Good afternoon, Jim. Thanks for taking my call. Hey, Jerry.

We are actively engaging in discussions aligned with our decontamination, rental, and services growth strategy. We look forward to sharing upcoming milestones in the weeks and months ahead. With that, we will now open the call for questions. Operator.

We are targeting 10% to 12% adjusted EBITDA margins with incremental growth and even margins over the next 3 quarters. Looking farther ahead, we expect 15% to 17% adjusted EBITDA margins over the next 3 years due to cost discipline, operational consolidation, and targeted commercial investments. As we look forward to the future, we are confident that our continued focus on targeted acquisitions will serve as key growth drivers over the next 3 to 4 years. We are actively engaging in discussions aligned with our decontamination rental and services growth.

Operator: Thank you. And with that, this will now start the question-and-answer session. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the Star keys. One moment while we poll for questions. And our first question comes from the line of Jerry Sweeney with Roth Capital Partners. Please proceed with your question.

Strategy. We look forward to sharing upcoming milestones in the weeks and months ahead. With that, we will now open the call for questions. Operator.

Thank you.

Higher production levels and absorbing some of the overhead. Did I hear that correctly? Or could you walk through know that? That is, that is correct. It's a, it's a function of, uh, getting ourselves at full capacity at a certain dollar amount where that operating leverage kicks in. So that's, that's a critical, uh, component to it. The other is while you're waiting for tenders. You're selling hoods and gloves and boots. And, and frankly, lower margins, uh, products to, you know, your captive, customers who have, who have those needs, and occasionally replacing, you know, uh, turnout gear, but it's not 500 suits, or 5, or a thousand suits, its 50. And so, yeah, it's, it's actually a reflection of product mix. So it typically we'd be having a high range or more than 2/3 of our. Our fire sales would be in custom-made, turnout gear. Um, and the remainder being the commodity products, now we're in in the higher range in the, in the commodity

And with that, this will now start the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate that your line is in the question queue. You may press star 2 to remove yourself from the queue for participants using speaker equipment and may be necessary to pick up the handset before pressing the star keys.

1 moment while we pull for questions.

Gerry Sweeney: Good afternoon, Jim. Thanks for taking my call.

And our first question comes from the line of Jerry Sweeney with Roth Capital Partners, please receive with your question.

Jim Jenkins: Hey, Jerry.

Uh, good afternoon, Jim. Thanks for taking my call.

Calvin Sweeney: I wanted to talk about the fire service tenders, $38 million, high probability. What makes you think they're high probability? Then a follow-on to that would be that $178 million total. Is there an opportunity for that to expand further, especially with some of the NFPA determinations coming out in the next couple, hopefully in the next month or two? Yes. Yes, Jerry. So yeah. So I'm going to, I'm glad Barry is here. It's one of the reasons why I wanted to have Barry and Cameron here was to talk about some of these opportunities. And Barry, I'll let you sort of answer that because I know there's a number of buckets that those fall into, those high probabilities. Yeah. I can. There are, basically, there's four buckets. To position ourselves in a high-probability position is with R&D incumbent.

Gerry Sweeney: I wanted to talk about the fire service tenders, $38 million, high probability. What makes you think they're high probability? Then a follow-on to that would be that $178 million total. Is there an opportunity for that to expand further, especially with some of the NFPA determinations coming out in the next couple, hopefully in the next month or two?

Hey, Jerry.

Commodities while we're waiting for the turnout gear business to come back into with the new standard certification. And you kind of couple that in a perfect storm with what's transpired in Latin America, where we've had a significant Reliance on on Argentina whether that was shrewd or not, it was just the case and uh you dropped that high margin and you dropped the high margin. You know you see some softness in the high margin areas in in Canada and that generates sort of a perfect storm when you've got the Industrials that had that

Jim Jenkins: Yes. Yes, Jerry. So yeah. So I'm going to, I'm glad Barry is here. It's one of the reasons why I wanted to have Barry and Cameron here was to talk about some of these opportunities. And Barry, I'll let you sort of answer that because I know there's a number of buckets that those fall into, those high probabilities.

Um, have a have a geopolitical component. And, and then we have a, we have a tender delay, uh, I'm not suggesting those are excuses. Those are just, you know, we, we need, uh, we need to work our way around those excuses and or those those issues, and we are, and we're driving, uh, similar opportunities in industrial, and I can certainly have Cameron address that

Gotcha. Um,

Barry Phillips: Yeah. I can. There are, basically, there's four buckets. To position ourselves in a high-probability position is with R&D incumbent.

Um, I wanted to talk about the fire service, tenders, $38 million. High probability. You know what makes sense. What makes you think they're high probability? And then the follow-on to that would be that $178 million total. So, is there an opportunity for that to expand further, especially with some of the NFPA determinations coming out in the next couple of, hopefully, in the next month or two? Um, yes, yes, Jerry. So, yeah, so, um, I'm going to, you know, I'm glad Barry is here. It’s one of the reasons why I wanted to have Barry and Cameron here, uh, was to talk about some of these opportunities. And Barry, I'll let you sort of answer that because I know there's a number of buckets that...

1 more question. Obviously, you know, multiple International Acquisitions Global footprint?

Calvin Sweeney: So do we already have the business with that or relationship with that fire department? Next would be, is the competitor that's incumbent struggling in some manner? Additionally, we are also looking at where we can come in with a multiple-brand strategy and with some of our portfolio that we have overlaps in gear. For example, we can have two or more bids involved in the process. And lastly, if we're positioned well with the department and we're written into the specifications. So Jerry, that $38 million is where all of those sort of four buckets fall for us. So that's why we view them as high probabilities. And then that $178 million, look, we won't win all the high probabilities, and we'll win some of the others in the $178 million. But I think if you talk to any of our competitors, they'll say the same thing.

So do we already have the business with that or relationship with that fire department? Next would be, is the competitor that's incumbent struggling in some manner? Additionally, we are also looking at where we can come in with a multiple-brand strategy and with some of our portfolio that we have overlaps in gear. For example, we can have two or more bids involved in the process. And lastly, if we're positioned well with the department and we're written into the specifications.

You know how important is getting the Erp system up and running to really give you visibility on the mechanics, you know?

Those fall into those high probabilities. Yeah, I see, um, there are places where there's four buckets, um, to position ourselves in a high probability position. But are we the incumbent? So, do we already have the business with that correlation with that department? Um, next would be, is the competitor that's incumbent struggling in some manner?

The Erp system. So there's a couple places internationally where the Erp the systems you have are pretty solid, um, you know, China's uh, got a good, got a good system for Asia. Um, we've got a nice system in Argentina for Latin America. Um, and and so those are we look at those as lower priorities. Videon has a very solid, uh, Erp system as well. Um,

Jim Jenkins: So Jerry, that $38 million is where all of those sort of four buckets fall for us. So that's why we view them as high probabilities. And then that $178 million, look, we won't win all the high probabilities, and we'll win some of the others in the $178 million. But I think if you talk to any of our competitors, they'll say the same thing.

So the prioritization of this right now is North America um which we're driving towards a June July roll out for our for our sap implementation. Uh and then the next phase is our, our frankly to look at some of the Acquisitions and folding some of those in. Um and and then it's

It's Vietnam and some other areas. So it's going to take a, a, a prolonged period of time.

Calvin Sweeney: Once these certifications and standards are adopted, sort of the floodgates should open over a period of time. And again, I think what we're trying to caution is it's going to happen, and it's going to happen during fiscal 2027, but it's going to happen over a period of time during that fiscal year. I look at certifications and standards, and they appear over a very long period of time. There's a 10-year sort of window for these standards. And they're kind of like the cicadas. They show up every 17 years. These standards kind of show up. And when they do, there's a bit of a loggerhead here that kind of slows it down on the decision-making front. I've talked about this in prior calls about the 2025-year automobile model versus the 2026 and waiting.

Once these certifications and standards are adopted, sort of the floodgates should open over a period of time. And again, I think what we're trying to caution is it's going to happen, and it's going to happen during fiscal 2027, but it's going to happen over a period of time during that fiscal year. I look at certifications and standards, and they appear over a very long period of time. There's a 10-year sort of window for these standards. And they're kind of like the cicadas. They show up every 17 years. These standards kind of show up. And when they do, there's a bit of a loggerhead here that kind of slows it down on the decision-making front. I've talked about this in prior calls about the 2025-year automobile model versus the 2026 and waiting.

But getting the first step in place, which is North America, which is the sort of the, the brains of the organization. So, to speak the rest of the world, sort of the heart,

having the brains of the organization with a solid system in place is going to sort of serve us.

Mightily.

Would you recall? Yes, yeah.

I'll I'll jump back in line, thanks.

Thank you.

We can have 2 or more bids involved in the process, and lastly, if we're at positioned, well, with the department and we're written into the specifications. So, so Jerry that 38 million is where all of those, those sort of 4 buckets fall for us. Um, so that's that's why we view them as high probabilities and then that 178 million. And look, we win all the high probabilities and we'll win some of the others in 178 million. Um, but I think if, if you, if you talk to any of our competitors, they'll say the same thing that you know, um, once uh, once these certifications and standards are adopted, sort of the floodgates should open over a period of time. And and, and again, I think what we're trying to caution is, it's not going to, it's going to happen and it's going to happen during fiscal 27, but it's going to happen, you know? Oh, over a period of time during that that fiscal year. Um, you know, I I, I look at certifications and standards.

And our next question comes from the line of Mark Smith.

With Lake Street Capital please. Proceed with your question.

And and they they appear, you know, over a very long period of time. There's there's that 10 year sort of window for these standards. Um and you know, they're kind of like the cicada, they show up every 17 years, these standards kind of show up. And when they do, um, there's a bit of a um,

Hi guys. Uh I just wanted to ask about kind of certification delays um, you know, can you give us an update on anything that's that's changed on that since the end of the before?

yeah, so so the certification, uh,

Calvin Sweeney: This is exactly what's happened, I think, in the Tender Cycle that we're seeing: these tenders, particularly in the US and in areas where NFPA is becoming more rapidly accepted, have slowed. So we'll see those pick up as soon as those standards are issued. Originally, we believed the standards were going to come into play in March 2025. They were then extended to September 2025 and ultimately extended to March 2026. We have no reason to believe, and in fact, what we're hearing is that that will be the date. The 26 should be the date. March 2026 should be the date. So that's why we're feeling very bullish about where we're driving our fire opportunities. Got it. On the margin front, if I heard you correctly, obviously, there's a lot more costs: tariffs, raw materials, logistics, etc.

This is exactly what's happened, I think, in the Tender Cycle that we're seeing: these tenders, particularly in the US and in areas where NFPA is becoming more rapidly accepted, have slowed. So we'll see those pick up as soon as those standards are issued. Originally, we believed the standards were going to come into play in March 2025. They were then extended to September 2025 and ultimately extended to March 2026. We have no reason to believe, and in fact, what we're hearing is that that will be the date. The 26 should be the date. 26 March should be the date. So that's why we're feeling very bullish about where we're driving our fire opportunities.

You know, uh, a loggerhead here that kind of gets kind of slows it down on a decision-making front. I talked about this in Prior calls, about the 25 year automobile model versus the 26 and waiting and it's this is exactly what's happened.

The delays and certification. We knew that that that certification was coming in March of 26th. We also know that all of our products are in the queue for certification with all of our competitors and I don't believe there's any exceptions at this point, Barry. Um, so I'll let you, I mean, the extent that we don't expect any further delays, uh, on that Friday. The 1 thing that that is different, this cycle and most of my career in this in this space. So um, this is actually the combination of 4 standards that were brought together as as opposed to having.

Gerry Sweeney: Got it. On the margin front, if I heard you correctly, obviously, there's a lot more costs: tariffs, raw materials, logistics, etc.

I think in the in the tender cycle that we're seeing is that these tenders particularly in the US and in areas where NFPA is becoming more rapidly accepted um those tenders have slowed and so we'll see those pick up as soon as those standards are issued for originally we believe the standards were going to come into play in March of 25. They were then extended to September of 25 and ultimately extended to March of 26. We have no reason to believe. And in fact, what we're hearing is that, that will be the date. The, the 26th should be the date. March 26th, should be the date. So, um, that's why we're feeling very bullish about where we're driving. Uh, our our, our fire opportunities.

Got it then on the Mars in front. Um, if I heard you correctly,

Calvin Sweeney: But it sounded also as though you could recover those costs through just higher absorption or higher production levels and absorbing some of the overhead. Did I hear that correctly, or could you walk through that? No, that is correct. It's a function of getting ourselves at full capacity at a certain dollar amount where that operating leverage kicks in. So that's a critical component to it. The other is, while you're waiting for tenders, you're selling hoods, gloves, and boots and, frankly, lower-margin products to your captive customers who have those needs and occasionally replacing Turnout Gear, but it's not 500 suits or 1,000 suits. It's 50. And so yeah, it's actually a reflection of product mix.

But it sounded also as though you could recover those costs through just higher absorption or higher production levels and absorbing some of the overhead. Did I hear that correctly, or could you walk through that?

Obviously, there's a lot more calls tariffs for our materials Logistics, Etc. But it sounded also that

as sound as though.

You could recover those costs to just.

To address all these products that now need to be reified. So there's quite a backlog at the certification agencies, which has been causing some of this delay for all of us.

Jim Jenkins: No, that is correct. It's a function of getting ourselves at full capacity at a certain dollar amount where that operating leverage kicks in. So that's a critical component to it. The other is, while you're waiting for tenders, you're selling hoods, gloves, and boots and, frankly, lower-margin products to your captive customers who have those needs and occasionally replacing Turnout Gear, but it's not 500 suits or 1,000 suits. It's 50.

Okay. And again, if you think about kind of mitigation efforts to to improve growth stopped at margin. Can you talk about, you know, headwinds and and which ones maybe you expected to normalize first?

Barry Phillips: And so yeah, it's actually a reflection of product mix.

Calvin Sweeney: So typically, we'd be having a high range or more than 2/3 of our fire sales would be in custom-made turnout gear and the remainder being the commodity products. Now we're in the higher range in the commodities while we're waiting for the turnout gear business to come back into with the new standard certification. You kind of couple that in a perfect storm with what's transpired in Latin America, where we've had a significant reliance on Argentina, whether that was true or not; it was just the case. You drop that high margin, and you drop the high margin. You see some softness in the high-margin areas in Canada, and that generates sort of a perfect storm when you've got the industrials that have a geopolitical component, and then we have a tender delay. I'm not suggesting those are excuses.

So typically, we'd be having a high range or more than 2/3 of our fire sales would be in custom-made turnout gear and the remainder being the commodity products. Now we're in the higher range in the commodities while we're waiting for the turnout gear business to come back into with the new standard certification.

Higher absorption or higher production levels and absorbing some of the overhead. Did I hear that correctly? Or could you walk through know that? That that is, that is correct. It's a, it's a function of, uh, getting ourselves at full capacity at a certain dollar amount where that operating leverage kicks in. So that's, that's a critical, uh, component to it. The other is, while you're waiting for tenders. You're selling hoods and gloves and boots. And and frankly lower margin, uh, products to, you know, your captive, customers who have, who have those needs, and occasionally replacing, you know, uh, turnout gear, but it's not 500 suits, or 5, or a thousand suits, its 50. And so, yeah, it's actually a reflection of product mix. So it typically we'd be having a high range or more than 2/3 of our. Our fire sales would be in custom-made, turnout gear. Um and the remainder being the commodity products, now we're in in the IR

Jim Jenkins: You kind of couple that in a perfect storm with what's transpired in Latin America, where we've had a significant reliance on Argentina, whether that was true or not; it was just the case. You drop that high margin, and you drop the high margin. You see some softness in the high-margin areas in Canada, and that generates sort of a perfect storm when you've got the industrials that have a geopolitical component, and then we have a tender delay. I'm not suggesting those are excuses.

Um, look, I think the on the headwind front, you know, sort of the, the, the tariffs, I mean, you you've got you've got issues with. We've got issues with the tariffs, we're addressing that um, you know, as as best we can with sort of a a programs with our suppliers. Um we're simplifying the product lines and sort of Shifting production towards the higher margin categories as those certifications come online, which is a certification component. And you know, the idea here obviously is to do that. Do an SKU rationalization, which we're in the middle of, we, we're rationalizing. I mean, we've got sins of the past from a legacy perspective. We've had thousands of of, um, of skus, that, that Helena and her team are rationalizing. Now, down to a much more manageable number, and of course we've got the targeted inventory, reductions. And we're about a third of the way there towards year, end of about 6 million. And we're hoping we can get a little bit north of that. So, um, go ahead very yeah, but additionally, we are

Bringing third-party manufactured products into our own factors right in particular with our turnout gear production.

Range in the in the Commodities while we're waiting for the turnout of your business to come back into, put the new standard certification. And you kind of couple that in a perfect storm with what's transpired in Latin America, where we've had a significant Reliance on on Argentina whether that was true or not, it was just the case and uh you dropped that high margin and you dropped the high margin. You know you see some softness in the high margin areas in in Canada and that generates sort of a perfect storm when you've got

Okay.

Calvin Sweeney: Those are just we need to work our way around those excuses or those issues, and we are, and we're driving similar opportunities in industrial, and I can certainly have Cameron address that. Gotcha. One more question. Obviously, multiple international acquisitions, global footprint. How important is getting the ERP system up and running to really give you visibility on the mechanics? The ERP system, so there's a couple of places internationally where the ERP systems we have are pretty solid. China's got a good system for Asia. We've got a nice system in Argentina for Latin America. And so we look at those as lower priorities. Veridian has a very solid ERP system as well. So the prioritization of this right now is North America, which we're driving towards a June, July rollout for our SAP implementation.

Those are just we need to work our way around those excuses or those issues, and we are, and we're driving similar opportunities in industrial, and I can certainly have Cameron address that.

And then, lastly, for me too, I think that about, you know, parents highest credit. Can you just talk about, uh, pricing opportunities?

Are you talking about pricing increases?

Gerry Sweeney: Gotcha. One more question. Obviously, multiple international acquisitions, global footprint. How important is getting the ERP system up and running to really give you visibility on the mechanics?

The Industrials that had that, um, have a have a geopolitical component. And, and then we have a, we have a tender delay. Uh, I'm not suggesting those are excuses. Those are just, you know, we, we need, uh, we need to work our way around those excuses and or those those issues, and we are, and we're driving, uh, similar opportunities in industrial, and I can certainly have camera to address that.

Gotcha. Um,

One more question. Obviously, you know, multiple international acquisitions, global footprint?

Jim Jenkins: The ERP system, so there's a couple of places internationally where the ERP systems we have are pretty solid. China's got a good system for Asia. We've got a nice system in Argentina for Latin America. And so we look at those as lower priorities. Veridian has a very solid ERP system as well. So the prioritization of this right now is North America, which we're driving towards a June, July rollout for our SAP implementation.

You know how important it is to get the ERP system up and running to really give you visibility on the mechanics.

Um, we've got a nice system in Argentina for Latin America. Um, and

And so, those are, we look at those as lower priorities. Videon has a very solid ERP system as well.

Okay, so, yeah. So, um, we we have our annual pricing increases that are that have been are are being communicated in Fire, and in industrial, um, we've got a a different obviously. There are different businesses, so we're direct addressing them differently. Um, you know, it's not going to be a 1 size, fits all, um, you know, we have pivoted a little bit in the, in the Tariff, uh, range. Uh, because we have seen some competitive pressures on pricing in that regard. Uh, we still are sitting on a significant amount of inventory in the CE space. The critical environment space that we're we're looking to move on that is not. Um, you know it's it's not tariff driven because we we've had we've got it in the States now. So we are increasing prices. We're not going to do them across the board. We're going to do them strategically, we've done it in Fire and we're doing it in industrial. And those are those are driving some additional decisions. Cameron's got an inventory Reduction Program that he can certainly speak to that. You know, is is driving.

Calvin Sweeney: And then the next phases are, frankly, to look at some of the acquisitions and folding some of those in. And then it's Vietnam and some other areas. So it's going to take a prolonged period of time. But getting the first step in place, which is North America, which is sort of the brains of the organization, so to speak, the rest of the world's sort of the heart, having the brains of the organization with a solid system in place is going to serve us mightily. Would you agree, Calvin? Yes. Yeah. I'll jump back in line. Thanks. Thank you. And our next question comes from the line of Mark Smith with Lake Street Capital. Please proceed with your question. Hi, guys. I just wanted to ask about certification delays. Can you give us an update on anything that's changed on that since the end of the quarter?

And then the next phases are, frankly, to look at some of the acquisitions and folding some of those in. And then it's Vietnam and some other areas. So it's going to take a prolonged period of time. But getting the first step in place, which is North America, which is sort of the brains of the organization, so to speak, the rest of the world's sort of the heart, having the brains of the organization with a solid system in place is going to serve us mightily. Would you agree, Calvin?

So the prioritization of this right now is North America um which we're driving towards a June July roll out for our for our sap implementation. Uh and then the next phase is our, our frankly to look at some of the Acquisitions and folding some of those in. Um and and then it's it's Vietnam and some other areas. So it's going to take a, a, a prolonged period of time.

Decisions. Because our year end is February 1 and a lot of our Channel Partners have new budgets starting, January 1. So we're in, we're introducing some programs here to help Drive some, uh, some inventory, uh, towards the end of this fiscal year. Uh, with with customers that beginning, January 1, we'll have new money to to utilize for that.

Okay, thank you.

But getting the first step in place, which is North America, which is sort of the brains of the organization, so to speak; the rest of the world is sort of the heart.

Thank you.

Having the brains of the organization, with a solid system in place, is going to sort of serve us.

Calven Swinea: Yes. Yeah.

Mightily.

Gerry Sweeney: I'll jump back in line. Thanks.

Would you agree? Yes. Yeah.

Operator: Thank you. And our next question comes from the line of Mark Smith with Lake Street Capital. Please proceed with your question.

And our next question comes from the line of Mike sliski with da Davidson please proceed with your question.

I'll jump back in line, thanks.

Uh, yes. Hi. Good afternoon.

um,

Mark Smith: Hi, guys. I just wanted to ask about certification delays. Can you give us an update on anything that's changed on that since the end of the quarter?

Thank you. And our next question comes from the line of Mark Smith with Lake Street Capital. Please proceed with your question.

Calvin Sweeney: Yeah. So the delays in certification, we knew that that certification was coming in March 2026. We also know that all of our products are in the queue for certification with all of our competitors. And I don't believe there's any exceptions at this point, Barry. So I'll let you—I mean, to the extent that we don't expect any further delays on that front. The one thing that is different this cycle, and most of my career in this space, so this is actually the combination of four standards that were brought together. As opposed to having a specific certification standard for firefighting gear, it now was grouped together where it includes firefighting gear, it includes SCBA, PAS, or personal alert safety systems, as well as tactical apparel, all under one standard.

Jim Jenkins: Yeah. So the delays in certification, we knew that that certification was coming in March 2026. We also know that all of our products are in the queue for certification with all of our competitors. And I don't believe there's any exceptions at this point, Barry. So I'll let you—I mean, to the extent that we don't expect any further delays on that front.

Hi guys. Uh, that's just 1 to ask about kind of certification delays um you know, can you give us an update on anything that's that's changed on that since the end of the quarter,

Sorry I want to maybe ask for a quick uh NFPA 101 here. Um, as far as I can tell, you're a paying member or paying paying customer of this organization, you know, people on the board on the Committees that approve, all these products. And now their action or their lack of action is now causing your business to to struggle, uh, and other parts of the of the industry, as well. I get that they need time to make sure the firefighter safety is the most important priority. But do you know, what? Do you know what?

What they're doing at the NPA to increase their approval. Throughput, it just, it just seems like at this point. They're now affecting

Business activity among their members, and that sounds like a a real issue.

Barry Phillips: The one thing that is different this cycle, and most of my career in this space, so this is actually the combination of four standards that were brought together. As opposed to having a specific certification standard for firefighting gear, it now was grouped together where it includes firefighting gear, it includes SCBA, PAS, or personal alert safety systems, as well as tactical apparel, all under one standard.

Calvin Sweeney: So that's forced now all the manufacturers to hustle in and go to the same certifying agencies to address all these products that now need to be recertified. So there's quite a backlog at the certification agencies, which has been causing some of this delay for all of us. Okay. And then if you think about kind of mitigating efforts to improve growth profit margin, can you talk about headwinds and which ones maybe expect to normalize first? Look, I think on the headwind front, sort of the tariffs, I mean, you've got issues with, we've got issues with the tariffs. We're addressing that as best we can with sort of programs with our suppliers. We're simplifying the product lines and sort of shifting production towards the higher margin categories as those certifications come online, which is the certification component.

So that's forced now all the manufacturers to hustle in and go to the same certifying agencies to address all these products that now need to be recertified. So there's quite a backlog at the certification agencies, which has been causing some of this delay for all of us.

Yeah. So so the certification, uh, the delays and certification. We knew that that that certification was coming in March of 26. We also know that all of our products are in the queue for certification with all of our competitors and I don't believe there's any exceptions at this point, Barry. Um, so I'll let you, I mean, the extent that we don't expect any further delays, uh, on that front. The 1 thing that, that is different this cycle and most of my crew in this, in this space. So, um, this is actually the combination of 4 standards that were brought together as, as opposed to having a specific certification standard for uh, firefighting gear. It now was grouped together where it includes firefighting gear, it includes SCBA, uh, pass or personal alert, Safety Systems as well as tactical apparel all under 1 standard. So that's for now all the manufacturers to, to hustle in and go to the same certifying.

Mark Smith: Okay. And then if you think about kind of mitigating efforts to improve growth profit margin, can you talk about headwinds and which ones maybe expect to normalize first?

Agencies need to address all these products that now need to be rectified. There is quite a backlog at the certification agencies, which has been causing some of this delay for all of us.

5 year cycle. So once the standard is, is written peer reviewed and approved and in process. Um, then becomes the, the timing of of from a manufacturing perspective is building to that standard um submitting to that standard of third-party agency. And then basically waiting for the third part party agency to

Uh commit the approval or provide whatever actions need to take part if you will generally, right? And UL is has now all of our competitors and our products sitting there and they've got limited resources.

Jim Jenkins: Look, I think on the headwind front, sort of the tariffs, I mean, you've got issues with, we've got issues with the tariffs. We're addressing that as best we can with sort of programs with our suppliers. We're simplifying the product lines and sort of shifting production towards the higher margin categories as those certifications come online, which is the certification component.

Okay. And if you think about kind of mitigation efforts to improve growth, stopping at margin, can you talk about, you know, headwinds and which one may be expected to normalize first?

Okay. Okay. So now let's go next question. Then they're a public company at this point and they're uh,

their lack of action is now causing your business to suffer.

So have you heard anything from those folks about how fast they're going to increase the throughput of of approvals?

Calvin Sweeney: The idea here, obviously, is to do that, do an SKU rationalization, which we're in the middle of. We're rationalizing. I mean, we've got sins of the past from a legacy perspective. We've had thousands of SKUs that Helena and her team are rationalizing now down to a much more manageable number. And of course, we've got the targeted inventory reductions, and we're about 1/3 of the way there towards year-end of about $6 million, and we're hopeful we can get a little bit north of that. So go ahead, Barry. Yeah. Additionally, we are bringing third-party manufactured products into our own factories, in particular with our turnout gear production. Okay. And then lastly, for me, too, thinking about tariffs, highest plate cost, higher raw material cost, can you just talk about pricing opportunities? Are you talking about pricing increases? Yeah. Okay. So yeah.

The idea here, obviously, is to do that, do an SKU rationalization, which we're in the middle of. We're rationalizing. I mean, we've got sins of the past from a legacy perspective. We've had thousands of SKUs that Helena and her team are rationalizing now down to a much more manageable number. And of course, we've got the targeted inventory reductions, and we're about 1/3 of the way there towards year-end of about $6 million, and we're hopeful we can get a little bit north of that. So go ahead, Barry.

They are working with the resources that they have available to them and and working through the process, we have there are options to go to other certification agencies and we use different certification agencies around the world, but we find the same level of performance throughout we are um, committed to trying to push through as rapidly as possible and and uh, we'll continue to do so. Um, it is a third-party agency and it's outside of our control.

Okay, maybe that's what on this topic. Who's paying the bills, uh, the NFPA or Lakeland for the UL and other agency testing.

Each manufacturer pays for their certification activities.

Okay.

Barry Phillips: Yeah. Additionally, we are bringing third-party manufactured products into our own factories, in particular with our turnout gear production.

Um, look, I think the on the headwind front, you know, sort of the, the, the tariffs, I mean, you you've got you've got issues with. We've got issues with the tariffs, we're addressing that um, you know, as as best we can with sort of a a programs with our suppliers. Um we're simplifying the product lines and sort of Shifting production towards the higher margin categories as those certifications come online, which is a certification component. And you know, the idea here obviously is to do that. Do an SKU rationalization, which we're in the middle of we, we're rationalizing. I mean, we've got sins of the past from a legacy perspective. We've had thousands of of, um, of skus, that, that Helena and her team are rationalizing. Now, down to a much more manageable number, and of course we've got the targeted inventory, reductions. And we're about a third of the way there towards year, end of about 6 million. And we're hopeful, we can get a little bit north of that. So, um, go ahead. Yeah, but additionally, we are

Mark Smith: Okay. And then lastly, for me, too, thinking about tariffs, highest plate cost, higher raw material cost, can you just talk about pricing opportunities?

Bringing third-party manufactured products into our own factories, right in particular with our turnout gear production.

Um, thank you for all the information uh, moving on. Um, the the Hong Kong deal and Malaysia, do you think those are going to provide an outside margin benefit? Um, given the size and the footprint, you have there should be expect to see some really good margins. Um,

I guess starting in 2027 from those 2 contracts.

Jim Jenkins: Are you talking about pricing increases?

And then lastly, for me too, thinking about, you know, terrorists, higher freight costs, higher material costs. So you just talked about pricing opportunities.

Mark Smith: Yeah.

Jim Jenkins: Okay. So yeah.

Are you talking about pricing increases?

Yeah, the ma the Malaysia contract. Certainly that's a that's a high margin opportunity. Long-term opportunity for us Hong Kong continues to generate

Calvin Sweeney: So we have our annual pricing increases that are being communicated in fire and in industrial. We've got a different, obviously, they're different businesses, so we're addressing them differently. It's not going to be a one-size-fits-all. We have pivoted a little bit in the tariff range because we have seen some competitive pressures on pricing in that regard. We still are sitting on a significant amount of inventory in the CE space, the Critical Environment space, that we're looking to move on that is not tariff-driven because we've got it in the States now. So we are increasing prices. We're not going to do them across the board. We're going to do them strategically. We've done it in fire, and we're doing it in industrial. And those are driving some additional decisions.

So we have our annual pricing increases that are being communicated in fire and in industrial. We've got a different, obviously, they're different businesses, so we're addressing them differently. It's not going to be a one-size-fits-all. We have pivoted a little bit in the tariff range because we have seen some competitive pressures on pricing in that regard. We still are sitting on a significant amount of inventory in the CE space, the Critical Environment space, that we're looking to move on that is not tariff-driven because we've got it in the States now. So we are increasing prices. We're not going to do them across the board. We're going to do them strategically. We've done it in fire, and we're doing it in industrial. And those are driving some additional decisions.

Yes.

Really decent margins for us, the tragedy that occurred in Hong Kong and sadly, when you when you operate a business like this tragedies, end up generating, frankly opportunities. And, and in Hong Kong, uh, our team spent, uh, hours, and hours, and hours overtime. Um, helping that Hong Kong, uh, team as they, um,

You know as they fought those fires and those 4 buildings and uh hundreds of people lost their lives. Um they're going to need a lot of, they're going to need a lot of new suits. A lot of new uh turnout gear as a result of that. Um, and you know, we've been on the we've been on the phone periodically with our friends in Hong Kong driving that business. Um, and they're suggesting to us that we'll see a bump in business.

Their, uh, probably in the, you know, first quarter of fiscal 27.

Okay, great, sounds good. Um, and then um,

Calvin Sweeney: Cameron's got an inventory reduction program that he can certainly speak to that is driving decisions because our year-end is 1 February, and a lot of our channel partners have new budgets starting 1 January. So we're introducing some programs here to help drive some inventory towards the end of this fiscal year with customers that beginning 1 January will have new money to utilize for that. Okay. Thank you. Thank you. And our next question comes from the line of Mike Slisky with D.A. Davidson. Please proceed with your question. Yes. Hi. Good afternoon. Maybe I can just start with I want to maybe ask for a quick NFPA 101 here. As far as I can tell, you're a paying member or paying customer of this organization. You have people on the board, on the committees that approve all these products.

Cameron's got an inventory reduction program that he can certainly speak to that is driving decisions because our year-end is 1 February, and a lot of our channel partners have new budgets starting 1 January. So we're introducing some programs here to help drive some inventory towards the end of this fiscal year with customers that beginning 1 January will have new money to utilize for that.

I guess uh, keeping the status. I know there's some quite a few contracts in the pipeline on the fire side, but given the status of, and you mentioned, there's some customers. Some competitors that were struggling, are you concerned at all on the pricing environment for what's being bid on today and some of the other folks out there might get a little bit of rationale if they're in a bit of a pickle financially.

Mark Smith: Okay. Thank you.

Uh, we still are sitting on a significant amount of inventory in the CE space. The critical environment space that we're we're looking to move on. That is not, um, you know is not tariff driven because we we've had we've got it in the States now. So we are increasing prices. We're not going to do them across the board. We're going to do them strategically, we've done it in Fire and we're doing it in industrial. And those are those are driving some additional decisions. Cameron's got an inventory Reduction Program that he can certainly speak to that. You know, is is driving decisions because our year end is February 1 and a lot of our Channel Partners have new budgets starting, January 1. So we're in, we're introducing some programs here to help Drive some, uh, some inventory, uh, towards the end of this fiscal year. Uh, with with customers that beginning, January 1, we'll have new money to to utilize for that.

Operator: Thank you. And our next question comes from the line of Mike Slisky with D.A. Davidson. Please proceed with your question.

Okay, thank you.

Thank you.

Mike Slisky: Yes. Hi. Good afternoon. Maybe I can just start with I want to maybe ask for a quick NFPA 101 here. As far as I can tell, you're a paying member or paying customer of this organization. You have people on the board, on the committees that approve all these products.

And our next question comes from the line of Mike Sliski with DA Davidson. Please proceed with your question.

Uh, yes, hi, good afternoon. Um,

Well, struggling can be in at various different factors, sometimes it's struggling and just just to perform and support and provide the equipment kind of time and manner. Um, 1 of the things, the standard is also providing is, is there are requirements vary requirements in the Fabrics that are being used in, in the, in the, the products. So, it's changing the build up of those products and it's going to change the price point. I actually, uh, at a higher level, uh, in the marketplace because of the needs to incorporate these more advanced Fabrics in student of the year.

Okay.

Okay. Okay, makes sense. Um I'll pass it along. Thank you so much.

Calvin Sweeney: Now their action or their lack of action is now causing your business to struggle and other parts of the industry as well. I get that they need time to make sure that firefighter safety is obviously the most important priority. But do you know what they're doing at the NFPA to increase their approval throughput? It just seems like at this point, they're now affecting business activity among their members, and that sounds like a real issue. Go ahead, Barry. NFPA is a standard writing body. They are not the certification agencies that certify the product. And the NFPA standard writing process. It involves a combination of end users, manufacturers, and third-party experts that build up that committee and build up and write the standards that then go through the process and are reviewed on a five-year cycle.

Now their action or their lack of action is now causing your business to struggle and other parts of the industry as well. I get that they need time to make sure that firefighter safety is obviously the most important priority. But do you know what they're doing at the NFPA to increase their approval throughput? It just seems like at this point, they're now affecting business activity among their members, and that sounds like a real issue.

Thank you. And with that there, no further questions. I'd like to turn the call over back over back over to Mr. Jenkins for closing remarks.

I want to maybe ask for a quick uh NFPA and a 101 here. Um, as far as I can tell, you're paying member or paying paying customer of this organization, you know, people on the board on the Committees that approve, all these products. And now their action or their lack of action is now causing your business to to struggle, uh, and other parts of the of the industry, as well. I get that they need time to make sure the firefighters safety is obviously the most important priority. But do you know, what? Do you know what?

What they're doing at the NFPA to increase their approval throughput, it just seems like at this point, they're now affecting...

Jim Jenkins: Go ahead, Barry.

Thank you, operator. Thank you all for joining us. Uh for today's call and thank you to our customers and distributor Partners worldwide for trusting us with your lives and safety. Lakeland continues to be well positioned for long-term growth. If we are unable to answer any of your questions today, please reach out to our ERM MZ group, who will be more than happy to assist.

Barry Phillips: NFPA is a standard writing body. They are not the certification agencies that certify the product. And the NFPA standard writing process. It involves a combination of end users, manufacturers, and third-party experts that build up that committee and build up and write the standards that then go through the process and are reviewed on a five-year cycle.

Business activity among their members, and that sounds like a real issue.

Thank you. And with that this is conclude today's teleconference. We thank you for your participation and you may disconnect your lines at this time and have a wonderful day.

Calvin Sweeney: So once the standard is written, peer-reviewed, and approved, and in process, then it becomes the timing from a manufacturing perspective is building to that standard, submitting to that standard to a third-party agency, and then basically waiting for the third-party agency to commit the approval or provide whatever actions needed. And that's the part of UL, generally. And UL has now all of our competitors and our products sitting there, and they've got limited resources. Right. Okay. So now let's go to the next question. Then they're a public company at this point, and their lack of action is now causing your business to suffer. So have you heard anything from those folks about how fast they're going to increase the throughput of approvals? They're working with the resources that they have available to them and working through the process.

So once the standard is written, peer-reviewed, and approved, and in process, then it becomes the timing from a manufacturing perspective is building to that standard, submitting to that standard to a third-party agency, and then basically waiting for the third-party agency to commit the approval or provide whatever actions needed.

Um NFPA is a standard writing body. They are not the certification agencies that certify the product and the NF NFPA um standard writing process. So it it involves a combination of end users and manufacturers. Um and uh and and third-party um uh experts that build up that committee and build up and write the standards that then go through the process and are reviewed on a 5-year cycle. So, once the standard is, is written peer-reviewed and approved, and in process, um, then becomes the, the timing of of, from a manufacturer and perspective is building 2.

Jim Jenkins: And that's the part of UL, generally. And UL has now all of our competitors and our products sitting there, and they've got limited resources.

Mike Slisky: Right. Okay. So now let's go to the next question. Then they're a public company at this point, and their lack of action is now causing your business to suffer. So have you heard anything from those folks about how fast they're going to increase the throughput of approvals?

Standard um submitting to that standard to third party agency and then basically waiting for the third party party agency to uh commit the approval or provide whatever actions need according to well generally, right. And UL has has now all of our competitors and our products sitting there and they've got limited resources, okay?

Okay, so now let's go to the next question. There are public companies at this point, and they're uh,

Their lack of action is now causing your business to suffer.

Barry Phillips: They're working with the resources that they have available to them and working through the process.

So, have you heard anything from those folks about how fast they're going to increase the throughput of approvals?

Calvin Sweeney: There are options to go to other certification agencies, and we use different certification agencies around the world, but we find the same level of performance throughout. We are committed to trying to push through as rapidly as possible, and we'll continue to do so. It is a third-party agency, and it's outside of our control. Okay. Maybe last one on this topic. Who's paying the bill? The NFPA or Lakeland for the UL and other agency testing? Each manufacturer pays for their certification activities. Okay. Thank you for all the information. Moving on. The Hong Kong deal and Malaysia, do you think those are going to provide an outsized margin benefit given the size and the footprint you have there? Should we expect to see some really good margins, I guess, starting in fiscal 2027 from those two contracts? Yeah.

There are options to go to other certification agencies, and we use different certification agencies around the world, but we find the same level of performance throughout. We are committed to trying to push through as rapidly as possible, and we'll continue to do so. It is a third-party agency, and it's outside of our control.

Mike Slisky: Okay. Maybe last one on this topic. Who's paying the bill? The NFPA or Lakeland for the UL and other agency testing?

They are working with the resources that they have available to them and and working through the process, we have there are options to go to other certification agencies and we use different certification agencies around the world, but we find the same level of performance throughout we are um, committed to trying to push through as rapidly as possible and and uh, we'll continue to do so. Um, it is a third-party agency and it's outside of our control.

Barry Phillips: Each manufacturer pays for their certification activities.

Okay. Maybe that's one on this topic. Who's paying the bill, uh, the NPA or Lakeland for the UL and other agency testing?

Mike Slisky: Okay. Thank you for all the information. Moving on. The Hong Kong deal and Malaysia, do you think those are going to provide an outsized margin benefit given the size and the footprint you have there? Should we expect to see some really good margins, I guess, starting in fiscal 2027 from those two contracts?

Each manufacturer pays for their certification activities.

Okay.

Thank you for all that information.

Uh, moving on, um the Hong Kong deal and Malaysia, do you think those are going to provide an outsized margin benefit? Um, given the size and the footprint you have there? Should we expect to see some really good margins? Um,

Calvin Sweeney: The Malaysia contract, certainly, that's a high-margin opportunity, long-term opportunity for us. Hong Kong continues to generate really decent margins for us. The tragedy that occurred in Hong Kong, sadly, when you operate a business like this, tragedies end up generating, frankly, opportunities. In Hong Kong, our team spent hours and hours and hours overtime helping that Hong Kong team as they fought those fires in those four buildings, and hundreds of people lost their lives. They're going to need a lot of new suits, a lot of new turnout gear as a result of that. We've been on the phone periodically with our friends in Hong Kong driving that business, and they're suggesting to us that we'll see a bump in business there probably in Q1 of fiscal 2027. Okay. Great. Sounds good.

Jim Jenkins: The Malaysia contract, certainly, that's a high-margin opportunity, long-term opportunity for us. Hong Kong continues to generate really decent margins for us. The tragedy that occurred in Hong Kong, sadly, when you operate a business like this, tragedies end up generating, frankly, opportunities. In Hong Kong, our team spent hours and hours and hours overtime helping that Hong Kong team as they fought those fires in those four buildings, and hundreds of people lost their lives. They're going to need a lot of new suits, a lot of new turnout gear as a result of that. We've been on the phone periodically with our friends in Hong Kong driving that business, and they're suggesting to us that we'll see a bump in business there probably in Q1 of fiscal 2027.

I guess starting in 20 officially 27 from those 2 contracts.

Yeah. The the Malaysia contract certainly that's a that's a high margin opportunity. Long term opportunity for us, Hong Kong continues to generate

team as a, um,

Mike Slisky: Okay. Great. Sounds good.

You know as they fought those fires and those 4 buildings and uh hundreds of people lost their lives. Um they're going to need a lot of, they're going to need a lot of new suits. A lot of new turnout gear as a result of that. Um and you know, we've been on the we've been on the phone periodically with our friends in Hong Kong driving that business. Um, and they're suggesting to us that we'll see a bump in business there. Uh probably in the you know, first quarter of fiscal 27.

Calvin Sweeney: And then I guess, given the status, and there's quite a few contracts in the pipeline on the fire side, but given the status of, you mentioned there's some competitors that were struggling, are you concerned at all in the pricing environment for what's being bid on today? And are some of the other folks out there might get a little bit irrational if they're in a bit of a pickle financially? Well, struggling can be at various different factors. Sometimes it's struggling just to perform, support, and provide the equipment in a timely manner. One of the things the standard is also providing is there are varied requirements in the fabrics that are being used in the products.

And then I guess, given the status, and there's quite a few contracts in the pipeline on the fire side, but given the status of, you mentioned there's some competitors that were struggling, are you concerned at all in the pricing environment for what's being bid on today? And are some of the other folks out there might get a little bit irrational if they're in a bit of a pickle financially?

Okay, great. Sounds good. Um, and then, um,

Barry Phillips: Well, struggling can be at various different factors. Sometimes it's struggling just to perform, support, and provide the equipment in a timely manner. One of the things the standard is also providing is there are varied requirements in the fabrics that are being used in the products.

I guess, given the status and some quite a few Congress in the pipeline on the Bayou side, but given the status of you mentioned, there's some customers, some competitors that were struggling. Are you concerned at all about the pricing environment for what's being bid on today? And some of the other folks out there that might get a little bit of rationale if they're in a bit of a pickle financially.

Calvin Sweeney: So it's changing the buildup of those products, which is going to change the price point, actually, at a higher level in the marketplace because of the needs to incorporate these more advanced fabrics into the gear. Okay. Okay. Okay. Makes sense. I'll pass it along. Thank you so much. Thank you. And with that, there are no further questions. I'd like to turn the call over back over to Mr. Jenkins for closing remarks. Thank you, operator. Thank you all for joining us for today's call, and thank you to our customers and distributor partners worldwide for trusting us with your lives and safety. Lakeland continues to be well-positioned for long-term growth. If we are unable to answer any of your questions today, please reach out to our IR firm, MZ Group. We'll be more than happy to assist. Thank you. And with that, this does conclude today's teleconference.

So it's changing the buildup of those products, which is going to change the price point, actually, at a higher level in the marketplace because of the needs to incorporate these more advanced fabrics into the gear.

Mike Slisky: Okay. Okay. Okay. Makes sense. I'll pass it along. Thank you so much.

Well, struggling can be in at various different factors, sometimes it's struggling and just just to perform and support and provide the equipment kind of a time and manner, um, 1 of the things, the standard is also providing is, is there a requirements vary requirements in the Fabrics that are being used in, in the, in the products? So it's changing the build-up of those products and it's going to change the price point. I actually uh, at a higher level uh in the marketplace because of the needs to incorporate these more advanced Fabrics into the gear.

Operator: Thank you. And with that, there are no further questions. I'd like to turn the call over back over to Mr. Jenkins for closing remarks.

Okay. Okay, makes sense. Um, I'll pass it along. Thank you so much.

Jim Jenkins: Thank you, operator. Thank you all for joining us for today's call, and thank you to our customers and distributor partners worldwide for trusting us with your lives and safety. Lakeland continues to be well-positioned for long-term growth. If we are unable to answer any of your questions today, please reach out to our IR firm, MZ Group. We'll be more than happy to assist.

Thank you. And with that, there are no further questions. I'd like to turn the call back over to Mr. Jenkins for closing remarks.

Operator: Thank you. And with that, this does conclude today's teleconference.

Thank you, operator. Thank you all for joining us for today's call, and thank you to our customers and distributor partners worldwide for trusting us with your lives and safety. Lakeland continues to be well positioned for long-term growth. If we are unable to answer any of your questions today, please reach out to our IR firm, MZ Group, who will be more than happy to assist.

Calvin Sweeney: We thank you for your participation, and you may disconnect your lines at this time and have a wonderful day. Okay.

We thank you for your participation, and you may disconnect your lines at this time and have a wonderful day. Okay.

Thank you. And with that, this does conclude today's teleconference. We thank you for your participation, and you may disconnect your lines at this time. Have a wonderful day.