Lakeland Industries Reports Fiscal Fourth Quarter and Full Year 2025 Financial Results

Q4'25 Net Sales Increased 49% to a Record $46.6 Million Led by a 226% Increase in Fire Services Products; FY 2025 Net Sales Increased 34% to $167.2 Million

Q4'25 Gross Profit Increased 67% to $18.7 Million Due to Strong Organic Revenue Growth and Organic Mix Improvement

Q4'25 Net Income Decreased to ($18.4) Due to Non-Cash Goodwill Impairments and Equity Investment Write-off

Q4'25 Adjusted EBITDA Excluding FX of $6.1 Million and FY 2025 of $17.4 Million

Tariff Mitigation Measures Deployed with Acquired U.S. Manufacturing and Re-Positioned Global Manufacturing Production

Introducing FY 2026 Revenue Guidance Range of $210 Million to $220 Million and Adjusted EBITDA Excluding FX of $24 Million to $29 Million

Management to Host Conference Call Today at 4:30 p.m. Eastern Time

HUNTSVILLE, Ala., April 09, 2025 (GLOBE NEWSWIRE) -- Lakeland Industries, Inc. ("Lakeland Fire + Safety" or "Lakeland") (NASDAQ:LAKE), a leading global manufacturer of protective clothing and apparel for industry, healthcare and first responders, has reported its financial and operational results for its fiscal fourth quarter and year ended January 31, 2025.

Key Fiscal FY 2025 Fourth Quarter and Subsequent Financial and Operational Highlights

 

Q4 Comparison

 

FY Comparison

$ in millions

FY Q4'25

 

FY Q4'24

 

$ Change YoY

 

% Change YoY

 

FY 2025

 

FY 2024

 

$ Change YoY

 

% Change YoY

Net Sales

$46.6

 

$31.2

 

$15.4

 

49.3%

 

$167.2

 

$124.7

 

$42.5

 

34.1%

Gross Profit

$18.7

 

$11.2

 

$7.5

 

67.0%

 

$68.7

 

$51.2

 

$17.5

 

34.2%

Gross Margin

40.1%

 

35.9%

 

-

 

420BPS

 

41.1%

 

41.1%

 

-

 

0BPS

Net (Loss) Income

($18.4)

 

($1.0)

 

($17.4)

 

(1,740%)

 

($18.1)

 

$5.4

 

($23.5)

 

(435.2%)

Adjusted EBITDA

$5.1

 

$1.8

 

$3.3

 

183.3%

 

$15.0

 

$12.0

 

$3.0

 

25.0%

Adjusted EBITDA ex. FX

$6.1

 

$3.4

 

$2.7

 

79.4%

 

$17.4

 

$15.7

 

$1.7

 

10.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tariff Mitigation Measures

Inventory Buildup:

Increase in net inventories of $14.2 million ahead of imposed tariffs.

Inventories on January 31, 2025, totaled $82.7 million.

US and Mexico Production:

Majority of legacy Lakeland products manufactured in Mexico are exempt from additional tariffs under USMCA.

Domestic Lakeland U.S. Fire Services orders can be fulfilled by Veridian.

Lakeland & Veridian sharing fire turnout compliance under NFPA1970 standard requirements.

Lakeland Mexico and Veridian have begun sharing technical documentation to facilitate future cross-production initiatives.

Vietnam and China:

Expected price increase/surcharges communicated to channel partners for products made in Vietnam and China.

Monitoring real-time Vietnam tariff negotiations for potential renegotiation.

A limited range of China-produced products are imported into the U.S.

Retaliatory Tariffs:

The exposure of retaliatory tariffs by foreign entities against the U.S. is mitigated by primarily non-U.S. Lakeland facilities supplying products to non-U.S. markets.

Mexico facility to produce Veridian's Latin America and Canadian Fire Services orders.

 

Fiscal 2025 Fourth Quarter

Net sales were a record $46.6 million for the fourth quarter of fiscal 2025, an increase of $15.4 million or 49.3% compared to $31.2 million for the fourth quarter of fiscal 2024, driven by a 226% increase in Fire Services and 12% growth in Disposables.

Organic revenue(1) increased 11% to $33.5 million for the fourth quarter of fiscal 2025, compared to $30.2 million for the fourth quarter of fiscal 2024 due to strong growth in the US, Canada and Europe.

Organic gross margin(1) increased by 1,270 margin points to 48.5% for the fourth quarter of fiscal 2025, compared to 35.8% for the fourth quarter of fiscal 2024, driven by continued strength in U.S. industrial and Fire Services businesses and an expected reduction of Profit in Ending Inventory.

Sales of the Fire Services product line were $21.2 million for the fourth quarter of fiscal 2025, an increase of $14.7 million or 226% compared to $6.5 million for the fourth quarter of fiscal 2024.

Fire segment as a percentage of revenue grew to 46%.

U.S. revenue was $18.3 million for the fourth quarter of fiscal 2025, an increase of $5.6 million or 44.1% compared to $12.7 million for the fourth quarter of fiscal 2024.

Europe revenue, including Eagle, Jolly and LHD, was $14.5 million for the fourth quarter of fiscal 2025, an increase of $10.8 million or 292% compared to $3.7 million for the fourth quarter of fiscal 2024.

LATAM revenue was $4.0 million for the fourth quarter of fiscal 2025, a decrease of $0.3 million or 7% compared to $4.3 million for the fourth quarter of fiscal 2024. Asia revenue was $3.6 million for the fourth quarter of fiscal 2025, a decrease of $0.4 million or 10.0% compared to $4.0 million for the fourth quarter of fiscal 2024.

Gross profit for the fourth quarter of fiscal 2025 was $18.7 million, an increase of $7.5 million, or 67.0%, compared to $11.2 million for the fourth quarter of fiscal 2024.

Adjusted EBITDA excluding FX(2) for the fourth quarter of fiscal year 2025 was $6.1 million, an increase of $2.7 million, or 79.4%, compared with $3.4 million for the fourth quarter of fiscal 2024.

Completed acquisition of Veridian, expanding Lakeland's global Fire Services portfolio with Veridian's leading firefighter protective apparel offerings.

Closed a $46.0 million public offering of common stock including full exercise of underwriter's option to purchase additional shares.

Engaged MZ Group to lead strategic investor relations and shareholder communications program.

Attended 37th Annual Roth Conference, Oppenheimer 10th Annual Emerging Growth Conference, 13th Annual ROTH Deer Valley Event and Benchmark Company 13th Annual Discovery One-on-One Investor Conference.

Fiscal 2025 Full Year

Net sales increased 34.1% to $167.2 million compared to $124.7 million last year.

Gross margin was flat at 41.1% for fiscal year 2025 and fiscal year 2024.

Net loss was ($18.1) million or ($2.43) per basic and ($2.43) per diluted share, compared to net income of $5.4 million, or $0.74 per basic and $0.72 per diluted share last year.

Adjusted EBITDA excluding FX losses(2) was $17.4 million compared to $15.7 million last year with a margin of 10.4% compared to 12.6% last year. Including FX losses, Adjusted EBITDA(2) was $15.7 million with a margin of 9.0%.

(1)Organic revenue and organic gross margin are total revenue and total gross margin, each excluding the effects of recent acquisitions, which management uses to assess the growth of its legacy business. Reconciliations are provided in the tables of this press release.

(2)Adjusted EBITDA and Adjusted EBITDA excluding FX are non-GAAP financial measures. Reconciliations are provided in the tables of this press release.

Management Commentary

"The tariffs the current Presidential administration has imposed on a growing number of countries and trading partners are on the top of everyone's mind. To that end, we have taken several steps to help mitigate the effects these tariffs will or might have. First, in anticipation of the potential tariffs, we strategically pre-positioned certain Asian-produced inventory into the U.S., which also helps support our planned fiscal year 2026 growth. While developments on the ground seemingly change by the day, we are focusing on production shifts to incur the lowest possible tariffs on our products. In Asia, these measures include moving certain production from China to Vietnam and exploring other lower tariff regions for manufacturing industrial products and price increases. We are continuing to closely monitor the Vietnam tariff situation as a significant portion of our US disposable products are manufactured at our Vietnam facility, and we are hopeful that a reduced tariff agreement will soon be reached with that country. In the meantime, we are continuing to assess the possibility of manufacturing disposable products at our newly acquired US manufacturing facilities or other Lakeland facilities around the world.

In the North American marketplace, our tariff mitigation initiatives include cross-certification of Lakeland's Mexico-produced fire turnout gear by Veridian for production in the US. All Veridian turnout gear is currently manufactured in the US, and these facilities have the capacity to manufacture the Lakeland brand of turnout gear. Additionally, our Mexico facility is becoming certified to produce Veridian turnout gear for the Canadian and LATAM markets in our Mexico facility. Immediately following our acquisition of Veridian, Lakeland and Veridian began sharing compliance under the NFPA1970 certification requirements, while our Jerez, Mexico facility and Veridian have begun sharing technical documentation to facilitate cross-production initiatives. We were also pleased that over 90% of our Mexico-produced products that fall under the provisions of the USMCA trade agreement are not subject to additional tariffs. Finally, we believe that the Company is protected against potential retaliatory tariffs by foreign entities as non-U.S. Lakeland facilities supply the majority of Lakeland's products to non-U.S. markets.

"The fourth quarter of fiscal 2025 was underscored by continued strong sales revenue, driven by a 10% sequential and 226% year-over-year increase in Fire Services and ongoing global expansion in key industrial products," said Jim Jenkins, President, Chief Executive Officer and Executive Chairman. "Though a large Jolly fire boots order that was initially expected to ship in Q2 of FY25 has now slipped into FY26, our fourth quarter revenue still met our expectations as our organic and inorganic Fire Services growth was supported by a strong U.S., European and Canadian sales, partially offset by the Jolly boot shipment slippage and weakness in Latin America and Asia due to year-end seasonality and the Chinese New Year and at Pacific Helmets resulting from production issues and product offering updates. The customer for the Jolly boot order is in the process of inspecting the goods, and we are confident that the shipment will occur in the first half of FY26. We continue to focus on expanding opportunities in Latin America and expect a resumption of growth in FY26. Additionally, we are very encouraged by the early performance of our new sales leadership and team in Asia and Europe. We have recently hired a new managing director at Pacific Helmets, and we will be launching a new lineup of Fire Services helmets at the FDIC show this week.

"Sales from our recent acquisition, LHD, which we acquired on July 1, have accelerated, and we delivered on over 85% of the multi-year backorder as of our fiscal year-end. Our LHD Australia and Hong Kong businesses, including our market-leading "LHD Care" decontamination and services businesses, performed very well during the quarter, and we were pleased to announce that LHD Australia, through its New Zealand joint venture, secured a contract renewal of up to 12 years with Fire and Emergency New Zealand (FENZ), New Zealand's main firefighting and emergency services body, for a range of apparel and decontamination services.

"Our most recent acquisition, Veridian, contributed revenue of $1.9 million in the fourth quarter. Revenues for LHD, Jolly, Pacific Helmets and Veridian were a combined $13.2 million. Though we have owned Veridian for a short time, the integration is progressing extremely well, and we are very excited about the addition of the Veridian brand and U.S.-based manufacturing facilities to the Lakeland family. We have now integrated Veridian's and Lakeland's North American sales teams, and we are actively pursuing opportunities across both the U.S. and Latin America. While our fourth quarter results at Jolly and Pacific did not meet our expectations, we remain very excited and optimistic about these brands and expect sales to accelerate as we deliver on open orders, introduce new helmet and boot lines, and capitalize on cross-selling opportunities.

"We continued the transition of large North American channel partner accounts to LineDrive, our new industrial market representative, and those orders rebounded in the fourth quarter, as expected. LineDrive continues to build pipeline opportunities, and we believe these sales will continue to accelerate in FY26.

"With our premium Fire Services offering available around the world and selling within the three largest global markets for firefighter turnout gear, North America, Europe, and Asia Pacific, our growing brand recognition and global head-to-toe fire portfolio with the superior lead times has enabled Lakeland to grow revenue 226% year-over-year. Additionally, our acquisition pipeline within the Fire Services category remains very robust.

"During the quarter, we closed an oversubscribed $46.0 million public equity offering, with the proceeds utilized to pay down our revolving credit facility, substantially improving our balance sheet and net debt ratio, and resulting in expected cash interest savings of approximately $2.5 million annually. The capital also positioned us to accelerate further growth in the fragmented, higher margin, $2.0 billion fire protection sector in the largest global markets.

"Taken together, in the past year, we have completed four acquisitions that added product line extensions and innovative new products and expanded our global markets, channels, and customers. The acquisitions have expanded our footprint in North America, Europe, Asia, Oceania, Latin America, and the Middle East with strategic distributors and partnerships in each region. These strategic acquisitions are a part of our initiative to build a portfolio of premier global fire brands under Lakeland Fire + Safety in this fragmented market. Though the rollout of new products from Pacific Helmets and Jolly Boots has been slower than expected, we will be launching a new line of Pacific helmets and presenting our new Jolly NFPA structural firefighting boots this week at the FDIC fire trade show in Indianapolis.

"Looking ahead, we are focused on new M&A opportunities, particularly within the fire suit rental, decontamination and services business, to further consolidate the fragmented fire market with the newly raised capital and our accelerating free cash flow to support this acquisition strategy. We are growing top-line revenue in our fire services and industrial verticals, combined with operating and manufacturing efficiencies, to achieve higher margins. I look forward to sharing exciting new milestones in the year to come," concluded Mr. Jenkins.

Fiscal 2025 Fourth Quarter Financial Results

Net sales were $46.6 million for the fourth quarter of fiscal 2025, an increase of $15.4 million or 49.3% compared to $31.2 million for the fourth quarter of fiscal 2024. Sales from our recent acquisitions accounted for $12.1 million of the increase, while organic sales increased $3.3 million, or 11%, over the prior year. Sales of the Fire Services product line increased $14.7 million year-over-year due to $8.2 million in sales from LHD, acquired in July 2024, and organic Fire Services growth of $2.6 million. Jolly, acquired in February 2024, also contributed to our growth in Fire Services. The significant increase in Fire Services was complemented by a $1.5 million, or 12%, increase in Disposables sales, primarily in the U.S., partially offset by seasonal weakness in High Performance and Wovens.

On a consolidated basis, for the fourth quarter of fiscal year 2025, domestic sales were $18.3 million or 39% of total revenues, and international sales were $28.3 million or 61% of total revenues, as our recent acquisitions continue to skew growth internationally. This compares with domestic sales of $12.7 million or 41% of the total and international sales of $18.5 million or 59% in the fourth quarter of fiscal year 2024.

Gross profit for the fourth quarter of fiscal 2025 was $18.7 million, an increase of $7.5 million, or 67.0%, compared to $11.2 million for the fourth quarter of fiscal 2024. Gross profit as a percentage of net sales increased to 40.1% for the fourth quarter of fiscal 2025 from 35.9% for the fourth quarter of fiscal 2024. Gross margin percentage increased in the fourth quarter of fiscal 2025 due to strong organic sales results, partially offset by lower gross margins from our recent acquisitions. Organic gross margin percentage increased to 48.5% from 35.8% for the fourth quarter of fiscal 2024 due primarily to a $2.2 million reversal of profit in ending inventory and positive product mix.

Operating expenses increased by $4.3 million, or 29.7%, from $14.5 million for the fourth quarter of fiscal 2024 to $18.8 million for the fourth quarter of fiscal 2025. Operating expenses increased due to inorganic growth, acquisition expenses, various non-recurring expenses, and increased organic SG&A operating expenses, primarily compensation and professional fees. Adjusted operating expenses increased $3.0 million, due primarily to inorganic growth. Operating loss was $10.7 million for the fourth quarter of fiscal 2025, compared to an operating loss of $3.3 million for the fourth quarter of fiscal 2024, due primarily to impairments of goodwill at our Eagle and Pacific subsidiaries and to the above-mentioned impacts. Operating margins were (22.9%) for the fourth quarter of fiscal 2025, as compared to (10.6%) for the fourth quarter of fiscal 2024.

Net loss was $18.4 million, or ($2.42) per diluted earnings per share, for the fourth quarter of fiscal 2025, compared to $1.0 million, or ($0.13) per diluted earnings per share, for the fourth quarter of fiscal 2024. In addition to the impacts mentioned above, our net loss was affected by a $7.6 million write-off of our investment in Bodytrak.

Adjusted EBITDA excluding FX for the fourth quarter of fiscal year 2025 was $6.1 million, an increase of $2.7 million, or 79.4%, compared with $3.4 million for the fourth quarter of fiscal year 2024. The increase was driven by higher revenue, including contributions from LHD, the expected reversal of profit in ending inventory and margin improvements in our organic sales mix, partially offset by higher manufacturing expenses.

Fiscal Year 2025 Financial Results

Net sales were $167.2 million for fiscal year 2025, an increase of $42.5 million or 34.1% compared to $124.7 million for fiscal year 2024. Our Fire Services line was a key driver of revenue growth, increasing $36.5 million or 137.7%. The execution of the Company's acquisition strategy and the acquisitions of Pacific in November 2023 and Jolly, LHD and Veridian in FY25 accounted for $33.1 million of the increase. The significant increase in Fire Services was complemented by an $8.0 million increase in our Wovens, Disposables and Chemical products, partially offset by a $1.2 million decline in our High Visibility products.

On a consolidated basis, for fiscal year 2025, domestic sales were $60.4 million or 36% of total revenues, and international sales were $106.8 million or 64% of total revenues, as our recent acquisitions continue to skew growth internationally. This compares with domestic sales of $55.2 million or 44% of the total and international sales of $69.5 million or 56% in fiscal year 2024.

Gross profit for fiscal year 2025 was $68.7 million, an increase of $17.5 million, or 34.2%, compared to $51.2 million for fiscal year 2024. Gross profit as a percentage of ...