LAKELAND INDUSTRIES INC Q4 FY2025 earnings call

• Completed strategic acquisitions including Veridian, LHD, Jolly Scarpe, and Pacific Helmets, expanding global presence and product portfolio. • Initiated a company-wide ERP system implementation, with the first phase expected to complete by end of fiscal year. • Undertaken Lean Six Sigma project, logistics strategies including centralization of European warehouses and global logistics optimization. • Appointed new management team members, including Chief Revenue Officer, Chief Commercial Officer, and CHRO. • Implemented tariff mitigation strategies like inventory buildup and production shifts. • Embarked on ERP system enhancement, integration of global operating and manufacturing resources, and Lean Six Sigma project.

The Fire Services product line saw sales increase $14.7 million year-over-year, with $8.2 million from the LHD acquisition in July 2024 and organic growth of $2.6 million from Jolly. The Industrial segment had an $8.1 million increase in wovens disposables and chemical products, partially offset by a $1.1 million decline in high-visibility products. Fire Services was a key driver of revenue growth, increasing $36.5 million or 137.7% year-over-year. The Fire Services line accounted for a significant portion of revenue contribution, with acquisitions like Pacific, Jolly, LHD, and Veridian contributing to this growth.

• Expect FY 2026 revenue of $210 million to $220 million. • Expect FY 2026 adjusted EBITDA, excluding material negative impact from foreign exchange, of $24 million to $29 million. • Guidance includes contributions from recent acquisitions like Veridian, LHD, Jolly Scarpe, and Pacific Helmets.

• Uncertainties surrounding tariffs, which could impact costs and margins. • Economic uncertainties and cyclical slowdown potential. • Integration challenges from recent acquisitions, including ERP system integration and aligning multiple operating and manufacturing resources.

Q: About the guidance and tariffs, how has the guidance changed due to recent tariff events?

A: Jim Jenkins stated the guidance did not change as a result of recent tariff events, and they are sticking with current guidance. Roger Shannon added that it's hard to model minute-to-minute tariff impacts but the guidance factors in mitigation steps and optimism.

Q: What are the challenges in tariff mitigation, especially with disposable manufacturing?

A: Jim Jenkins discussed exploring options like training staff in Mexico to produce disposables compliant with USMCA, as well as considering India as an option. Helena has a plan for Mexico, and they are looking at consolidating operations in some areas but waiting for tariff clarity.

Q: Regarding the Jolly boot order, how big was the order and its impact?

A: Jim Jenkins and Roger Shannon mentioned the Jolly boot order was €3 million, and it was pushed to the first half of fiscal 2026 due to timing issues, which affected Q4 revenue expectations.

Q: Thoughts on growth initiatives and M&A for this year?

A: Jim Jenkins mentioned M&A is still in play, with focus on smaller deals in decontamination and service businesses. Organic growth initiatives include a strong management team and progress with LineDrive. Roger Shannon discussed LHD's business run rate and potential upside from winning new tenders.