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Lakeland Industries narrows fiscal 1Q loss, but misses on revenue

CEO Christopher J Ryan says sales in Vietnam and India are gaining traction after ramping up manufacturing operations in both the Asian countries
A group of workers wearing protective clothes
Lakeland makes a wide range of safety garments, including firefighting and heat protective apparel, chemical protective suits, and protective clothing like lab coats and coveralls as well as reflective apparel for those in need of high-visibility clothing

Lakeland Industries Inc (NASDAQ:LAKE) shares hadn’t budged Tuesday a day after the manufacturer of protective clothing narrowed its fiscal first quarter loss, but missed revenue expectations.  

For the fiscal first quarter ended April 2019, the Ronkonkoma, New York-based company posted a loss of $465,000, or $0.06 per share on revenue of $24.7 million. The consensus earnings estimate was $0.08 per share on revenue of $25.6 million. Revenue grew 1.4% on a year-over-year basis.

The stock closed flat at $12.15 on Monday.

READ: Lakeland Industries shares slip after missing Wall Street's fiscal 2Q earnings estimate

The company said that the quarter’s sales, profit margin and operating expenses were “negatively impacted” by enterprise resource planning implementation and a build-out of new factories and fulfillment facilities in Vietnam and India.

In the first quarter, the company increased its cash position to $14.3 million and modestly reduced the little debt that remains on its balance sheet.

“Results show important progress from the fourth quarter of last year,” said Lakeland Industries CEO Christopher J Ryan in a statement. "We are now on our way toward the completion of the ERP system installation for our domestic operations - more than half of our total business -- that ultimately should drive meaningful benefits throughout our global organization.”

Ryan explained that the challenges for “optimizing the system” led to significantly greater than anticipated costs in freight and labor, delivery delays and disruption in the company’s finance department which had been leading the ERP implementation process.

"Our efforts to strengthen our global marketing channels and manufacturing capabilities and improve our overall financial performance are gaining ground,” said Ryan, who indicated that sales within Vietnam and India are gaining traction.

Lakeland makes a wide range of safety garments, including firefighting and heat protective apparel, chemical protective suits, and protective clothing like lab coats and coveralls as well as reflective apparel for those in need of high-visibility clothing.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter@UttaraProactive 

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