x
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ANNUAL
REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Delaware
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13-3115216
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S.
Employer Identification No.)
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701
Koehler Ave., Suite 7, Ronkonkoma, NY
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11779
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Large
accelerated filer ¨
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Accelerated
filer ¨
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Non-Accelerated
filer ¨
(Do not check if a smaller reporting company)
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Smaller reporting company
x
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Class
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Outstanding at April 14,
2010
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Common
Stock, $0.01 par value per share
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5,439,410
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Document
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Parts Into Which
Incorporated
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Annual
Report to Stockholders for the Fiscal Year
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Parts
[I, II, and IV]
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Ended
January 31, 2010 (Annual Report)
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Page
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|||
PART
1:
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|||
Cautionary Statement
regarding Forward-Looking Information
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Item
1
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Business
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3
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Overview
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3
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Industry
Overview
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4
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International and
Domestic Standards
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5
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Industry
Consolidation
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6
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Business
Strategy
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6
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Our Competitive
Strengths
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8
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Products
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9
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Quality
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13
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Marketing and
Sales
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14
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||
Research and
Development
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14
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Suppliers and
Materials
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14
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||
Internal
Audit
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15
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||
Competition
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15
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Seasonality
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15
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Patents and
Trademarks
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15
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Employees
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16
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Environmental
Matters
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16
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Available
Information
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16
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Item
1A
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Risk
Factors
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16
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Item
1B
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Unresolved Staff
Comments
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24
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Item
2
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Properties
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24
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Item
3
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Legal
Proceedings
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27
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Item
4
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[Removed and
Reserved]
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27
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PART
II
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|||
Item
5
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Market for the
Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
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27
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Item
6
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Selected Financial
Data
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29
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Item
7
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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30
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Item
7A
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Quantitative and
Qualitative Disclosures about Market Risk
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39
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Item
8
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Financial Statements
and Supplementary Data
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40
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Item
9
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Changes in and
Disagreements with Accountants on Accounting and Financial
Disclosure
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68
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Item
9A
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Controls and
Procedures
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68
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Item
9B
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Other
Information
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70
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PART
III
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|||
Item
10
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Directors, Executive
Officers and Corporate Governance
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70
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Item
11
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Executive
Compensation
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72
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Item
12
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Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder
Matters
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72
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Item
13
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Certain Relationships
and Related Transactions, and Director Independence
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72
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Item
14
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Principal Accounting
Fees and Services
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72
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PART
IV
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|||
Item
15
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Exhibits
and Financial Statement Schedules
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73
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Signatures
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76
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Certification under
Exchange Act Rules 13a – 14(b) and 15d – 14(b)
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·
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economies
of scale when selling to end users, either through the use of a direct
sales force or independent representation
groups;
|
·
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broader
product offerings that facilitate cross-selling
opportunities;
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·
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the
ability to employ dedicated protective apparel training and selling
teams;
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·
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the
ability to offer volume and growth incentives to safety distributors;
and
|
·
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access
to international sales.
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·
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Increase International Sales
Opportunities. We intend to aggressively increase our penetration
of the international markets for our product lines. In FY07 and FY08, we
opened sales offices in Beijing, Shanghai, Chongqing, Guangzhou and
Weifang, China; Tokyo, Japan; and Santiago, Chile. In FY10, we opened
sales offices in Argentina and began the process of opening in Russia and
Kazakhstan, and sales in our older United Kingdom operation were flat in
FY2010 but increased 18% in 2009, 34.6% in fiscal 2008, and 46.6% in 2007.
We expect our newer operations in Chile, China, and India to ramp up sales
on a similar basis to our UK operations. We also acquired
Qualytextil, a Brazilian manufacturer with FY08 sales of $10.0 million and
revenue growth of $8.4 million for the nine months in FY09 in which we
owned Qualytextil and a growth in the full year of FY10 of 18% (38.4% in
Q4). This strategy is driven by the fact that many Asian and South
American countries have adopted legislation similar to the 1970 U.S.
Occupational Health and Safety Act (OSHA) in order to facilitate their
entry into the World Trade Organization (WTO) which has as a requisite for
entry worker safety laws (like OSHA), social security, environmental and
tax laws similar to that of the USA and Europe. These new worker safety
laws have driven the demand for our products in these rapidly growing
economies.
|
·
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Acquisitions. We
believe that the protective clothing market is fragmented and presents the
opportunity to acquire businesses that offer comparable products or
specialty products that we do not offer. We intend to consider
acquisitions that afford us economies of scale, enhanced opportunity for
cross-selling, expanded product offerings and an increased market
presence. We acquired a facility in New Delhi, India in November 2006
where we are producing Nitrile gloves. We also acquired Mifflin
Valley, Inc., a manufacturer of high visibility protective clothing in
August 2005. We closed on our acquisition of Qualytextil, a Brazilian
manufacturer of fire protective clothing in May 2008. We continue to
entertain other opportunities but with an eye to increase
earnings.
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·
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Introduction of New
Products. We continue our history of product development and
innovation by introducing new proprietary products across all our product
lines. Our innovations have included Micromax®
disposable protective clothing line, our ChemMax®
line of chemical protective clothing, our Despro®
patented glove design, Microgard antimicrobial products for food service
and our engineered composite glove products for high cut and abrasion
protection, our Thermbar™
glove and sleeve products for heat protection, Grapolator™
sleeve lines for hand and arm cut protection and our Thermbar™
Mock Twist glove for hand and arm heat protection. We own 16 patents on
fabrics and production machinery and have 6 additional patents in
application. We will continue to dedicate resources to research and
development.
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·
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Decrease Manufacturing
Expenses by Moving Production to International Facilities. We have
additional opportunities to take advantage of our low cost production
capabilities in Brazil, Mexico and China. Beginning in 1995, we
successfully moved the labor intensive sewing operation for our limited
use/disposable protective clothing lines to the facilities in Mexico and
China. Beginning January 1, 2005, pursuant to the United States World
Trade Organization Treaty with China and the North American Free Trade
Agreement (“NAFTA”), the reduction in quota requirements and tariffs
imposed by the U.S. and Canada on textiles goods, such as our reusable
woven garments, have made it more cost effective to move production for
some of these product lines to our assembly facilities in China and
Mexico. We completed this process in fiscal 2008. As a result, we expect
to see profit margin improvements for these product lines, which will
allow us to compete more effectively as quota restrictions on China were
removed as of January 1, 2009 and tariffs
lowered. Additionally, due to the overcapacity resulting from
the recent drop in demand globally:
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1.
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We
continue to press our raw material and component suppliers for price
reductions and better payment
terms.
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2.
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We
are sourcing more raw materials and components from our China based
operations as opposed to sourcing in Europe and North
America.
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3.
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We
are re-engineering many products so as to reduce the amount of raw
materials used and reduce the direct labor in such
products.
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·
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Improve Marketing in Existing
Markets. We believe significant growth opportunities are
available to us through the better positioning, marketing and enhanced
cross-selling of our reusable woven protective clothing, glove and arm
guards and high-end chemical suit product lines, along with our limited
use/disposable lines as a bundled offering. This allows our
customers one stop shopping using combined freight
shipments.
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·
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Increase Sales to the First
Responder Market. Our high-end chemical protective suits meet all
of the regulatory standards and requirements and are particularly well
qualified to provide protection to first responders to chemical or
biological attacks. For example, our products have been used for response
to recent threats such as the 2001 anthrax letters, the 2003 SARS
epidemic, the 2004 ricin letters and the 2006 Avian Flu. A portion of
appropriations for the Fire Act of 2002 and the Bio Terrorism Act of 2002
with continuing funding through 2009 are available for purchase of
products for first responders that we manufacture, and we are aggressively
targeting this Homeland Security
market.
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·
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Emphasize Customer
Service. We continue to offer a high level of customer service to
distinguish our products and to create customer loyalty. We offer
well-trained and experienced sales and support personnel, on-time delivery
and accommodation of custom and rush orders. We also seek to advertise our
DuPont branded tradenames.
|
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·
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Industry Reputation. We
devote significant resources to creating customer loyalty by accommodating
custom and rush orders and focusing on on-time delivery. Additionally, our
ISO 9001 and 9002 certified facilities manufacture high-quality products.
As a result of these factors, we believe that we have an excellent
reputation in the industry.
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·
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International Manufacturing
Capabilities. We have operated our own manufacturing facilities in
Mexico since 1995 and in China since 1996. Our four facilities in China
total 454,000 sq. ft. of manufacturing, warehousing and administrative
space while our facility in Mexico totals over 43,000 sq. ft. of
manufacturing, warehousing and administrative space. Our facilities and
capabilities in China and Mexico allow access to a less expensive labor
pool than is available in the United States and permits us to purchase
certain raw materials at a lower cost than they are available
domestically.
|
|
·
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India. In
November 2006, we purchased three facilities comprising 47,408 square feet
in New Delhi, India where we are producing nitrile gloves which were sold
internationally in FY10. We have continued to enter the North
American and European markets in calendar 2009 with a newly designed line
of gloves, after a complete redesign and rebuild of the India machinery
and equipment during FY08 and FY09.
|
|
·
|
Brazil. In May 2008, we
acquired Qualytextil, S.A., a Brazilian manufacturer of fire protective
clothing which opens up the tariff protected Mercosur markets of Brazil,
Argentina, Uruguay, Paraguay and soon, by membership, Venezuela, for not
only Qualytextil’s fire protective products, but also many of the products
we make in the USA, China and
Mexico.
|
|
·
|
International Sales
Offices. We have sales offices around the world to
service various major markets, a greatly expanded Toronto, Canada facility
that went on line in January 2008 for the Canadian market, an expanded
Newport, United Kingdom office for the European Common Market that went on
line in late 2007, and new sales offices in Beijing, Weifang, Guangzhou,
Chongqing and Shanghai, China covering China, Australia and Southeast
Asia, Tokyo, Japan for Japan and Santiago, Chile and Jerez, Mexico for the
South American market. The Brazil acquisition in May 2008 completed the
infrastructure for our strategy for South America. In FY10, we opened a
sales office in Argentina as a spin off from our Chile
operations.
|
|
·
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Comprehensive
Inventory. We have a large product offering with numerous
specifications, such as size, styles and pockets, and maintain a large
inventory of each in order to satisfy customer orders in a timely manner.
Many of our customers traditionally make purchases of industrial
protective gear with expectations of immediate delivery. We believe our
ability to provide timely service for these customers enhances our
reputation in the industry and positions us strongly for repeat business,
particularly in our limited use/disposable protective clothing
lines.
|
|
·
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Manufacturing
Flexibility. By locating labor-intensive manufacturing processes
such as sewing in Brazil, Mexico, China, and India and by utilizing sewing
sub-contractors, we have the ability to increase production without
substantial additional capital expenditures. Our manufacturing systems
allow us flexibility for unexpected production surges and alternative
capacity in the event any of our independent contractors become
unavailable.
|
|
·
|
Experienced Management
Team. We have an experienced management team. Our executive
officers, other than the CFO, average greater than 23 years of experience
in the industrial protective clothing market. The knowledge, relationships
and reputation of our management team helps us maintain and build our
customer base.
|
Product
Line
|
Raw
Material
|
Protection
Against
|
End
Market
|
|||
Limited
use/disposable protective clothing
|
· Tyvek®
and laminates of Polyethylene, Spunlaced Polyester, SMS, Polypropylene,
and Company Micromax, Micromax NS, ChemMax 1, ChemMax 2, Pyrolon®,
and other non-woven fabrics
|
· Contaminants,
irritants, metals, chemicals, fertilizers, pesticides, acids, asbestos,
PCBs, lead, dioxin and many other hazardous chemicals
· Viruses
and bacteria (AIDS, streptococcus, SARS and hepatitis)
|
· Integrated
oil
· Chemical
industries
· Public
utilities
· Automotive
and pharmaceutical industries
· Government
(terrorist response)
· Janitorial
· Laboratories
|
|||
High-end
chemical protective suits
|
· TyChemâQC
· TyChem®
SL
· TyChem®
TK
· TyChem®
F
· TyChem®
BR
· ChemMax® 3
and 4
· Pyrolon®
CRFR
· Tencate® FR
cottons
· Other
Lakeland patented co-polymer laminates
|
· Chemical
spills
· Toxic
chemicals used in many varied manufacturing processes
· Terrorist
attacks, biological and chemical warfare (anthrax, ricin and
sarin)
|
· Integrated
oil chemical and nuclear industries
· Hazardous
material teams
· Fire
departments (hazmat)
· Government
(first responders)
|
|||
Fire
fighting and heat protective apparel
|
· Nomex®
· Aluminized
Nomex®
· Aluminized
Kevlar®
· PBI
Matrix
· Millenia®
· Basofil®
· Advance
· Indura®
Ultrasoft
|
· Fire,
burns and excessive heat
|
· Municipal,
corporate and volunteer fire departments
· Wildland
fire fighting
· Hot
equipment maintenance personnel and industrial fire
departments
· Oil
well fires
· Airport
crash rescue
|
|||
Hand
& Arm Protective Products
|
· Kevlar®
yarns
· Kevlar®
wrapped steel core yarns
· Spectra®
yarns
· Composite
engineered yarns
· Nitrile,
latex, natural rubber, neoprene compounds and mixtures
thereof
|
· Cuts,
lacerations, heat, hazardous chemicals and dermatological
irritants
|
· Integrated
oil
· Automotive,
glass and metal fabrication industries
· Chemical
plants
· Food
processing
· Electronic
industries
|
Product Line
|
Raw Material
|
Protection Against
|
End Market
|
|||
Reusable
woven garments
|
· Staticsorb
carbon thread with polyester
· Cotton
polyester blends
· Cotton
· Polyester
· Nomex®/FR
Cottons
· Nylon
|
· Protects
manufactured products from human contamination or static electrical
charge
· Bacteria,
viruses and blood borne pathogens
· Protection
from flash fires
|
· General
industrial applications
· Household
uses
· Clean
room environments
· Emergency
medical ambulance services
· Chemical
and oil refining
· Medical
and laboratory facilities
|
|||
High
Visibility Clothing
Reflective
vests
Jacket,
Coats
Jumpsuits
“T”
shirts, sweatshirts
· Raingear
· 70E
Vests
· Jumpsuits
with reflective trim
|
· Polyester
mesh
· Solid
polyester
· FR
polyester mesh
· FR
solid polyester
· Modacrylic
· Modacrylic
anti-static
§ FR
cotton
§ Nomex
§ FR
trims
|
· Lack
of visibility
· Heat,
flame, sparks
· Arc
flash
· Static
buildup, explosive atmospheres
· Fire,
heat explosions
|
· Highway
· Construction
· Maintenance
· Transportation
· Airports
· Police
· Fire,
EMS
· Electric,
coal and gas utilities
· Extrication
· Confined
space rescue
|
·
|
TyChem® TK
– a multi-layer film laminated to a durable non-woven substrate. This
garment offers the broadest temperature range for limited use garments of
-94°F to 194°F. This garment is an encapsulating design and is available
in National Fire Protection Agency 1991-2005 revision certified versions
and meets the requirements of the flash fire
option.
|
·
|
ChemMax® 3
– a multi-layer film laminated to a durable spunbonded substrate. This is
a non-encapsulating garment and meets the requirements of NFPA 1992, 2005
Revision. In addition to NFPA certified ensembles, we also manufacture
garments from our proprietary ChemMax® 1,
ChemMax® 2,
and ChemMax® 3
fabrics that are compliant with CE types 2, 3, and 4 for the international
markets.
|
·
|
Kiln
entry suit – to protect kiln maintenance workers from extreme
heat.
|
·
|
Proximity
suits – to give protection in high heat areas where exposure to hot
liquids, steam or hot vapors is
possible.
|
·
|
Approach
suits – to protect personnel engaged in maintenance, repair and
operational tasks where temperatures do not exceed 200°F ambient, with a
radiant heat exposure up to
2,000°F.
|
|
·
|
Fire
service station wear in multiple protective
fabrics
|
|
·
|
Fire
service extrication suits in FR
cotton
|
|
·
|
Additional
wildland firefighting apparel in multiple
fabrics
|
|
·
|
Flame
resistant arc/flash protective suits in FR
cotton
|
|
·
|
Flame
resistant shirts and pants in multiple protective
fabrics
|
|
·
|
Flame
resistant jackets in FR cotton
|
·
|
Electrostatic
dissipative apparel – used primarily in the pharmaceutical and automotive
industries.
|
·
|
Clean
room apparel – used in semiconductor manufacturing and pharmaceutical
manufacturing to protect against human
contamination.
|
·
|
Flame
resistant Nomex®/FR
Cotton coveralls/pants/jackets – used in chemical and petroleum plants and
for wild land firefighting.
|
·
|
Cotton
and Polycotton coveralls, lab coats, pants, and
shirts.
|
|
·
|
Interruptions
and delays in manufacturing and resulting cancellations of orders for our
products;
|
|
·
|
Increases
in fabrics or component prices that we may not be able to pass on to our
customers; and
|
|
·
|
Our
holding more inventory than normal because we cannot finish assembling our
products until we have all of the
components
|
|
·
|
Potential
adverse fluctuations in foreign currency exchange
rates;
|
|
·
|
Higher
credit risks;
|
|
·
|
Restrictive
trade policies of foreign
governments;
|
|
·
|
Currency
nullification and weak banking
institutions;
|
|
·
|
Changing
economic conditions in local
markets;
|
|
·
|
Political
and economic instability in foreign markets;
and
|
|
·
|
Changes
in leadership of foreign
governments.
|
|
·
|
A
one year, $23.5 million revolving credit facility which commenced January
2010, of which we had $9.5 million of borrowings outstanding as of January
31, 2010.
|
|
·
|
Our
financial condition, strength and credit
rating;
|
|
·
|
The
financial markets’ confidence in our management team and financial
reporting;
|
|
·
|
General
economic conditions and the conditions in the homeland security sector;
and
|
|
·
|
Capital
markets conditions.
|
|
·
|
Our
expansion of international
operations;
|
|
·
|
Competitive
pricing pressures;
|
|
·
|
Seasonal
buying patterns resulting from the cyclical nature of the business of some
of our customers;
|
|
·
|
The
size and timing of individual
sales;
|
|
·
|
Changes
in the mix of products and services
sold;
|
|
·
|
The
timing of introductions and enhancements of products by us or our
competitors;
|
|
·
|
Market
acceptance of new products;
|
|
·
|
Technological
changes in fabrics or production equipment used to make our
products;
|
|
·
|
Changes
in the mix of domestic and international
sales;
|
|
·
|
Personnel
changes; and
|
|
·
|
General
industry and economic conditions.
|
Address
|
Estimated
Square
Feet
|
Annual Rent
|
Lease Expiration
|
Principal Activity
|
||||
Weifang
Lakeland Safety Products Co., Ltd. – Plant #1
Xiao
Shi Village
AnQui
City, Shandong Province
PRC
262100
|
106,000
|
Owned(1)
|
N/A
|
Manufacturing
Administration Engineering
|
||||
Weifang
Lakeland Safety Products Co., Ltd. – Plant #2
Xiao
Shi Village
AnQui
City, Shandong Province
PRC
262100
|
215,355
|
$226,000
|
11/27/12
|
Manufacturing
Administration
|
||||
Qing
Dao Lakeland Protective Products Co., Ltd
Yinghai
Industrial Park
Jiaozhou,
Shandong Province
PRC
266318
|
121,675
|
Owned(1)
|
N/A
|
Manufacturing
Administration Warehousing
|
||||
Meiyang
Protective Products Co., Ltd.
Xiao
Shi Village
AnQui
City, Shandong Province
PRC
262100
|
11,296
|
$8,400
|
12/31/11
|
Manufacturing
|
||||
Lakeland
Industries, Inc.
Woven
Products Division
2401
SW Parkway
St.
Joseph, MO 64503
|
44,000
|
$96,000
|
7/31/12
|
Manufacturing
Administration Warehousing
|
||||
Lakeland
Mexico
Carretera
a Santa Rita
Calle
Tomas Urbina #1
Jerez
de Garcia, Salinas, Zacatecas
Mexico
|
43,000
|
$132,000
|
3/31/13
with
option to renew
|
Manufacturing
Administration Warehousing
|
||||
Lakeland
Protective Real Estate
59
Bury Court
Brantford,
ON N3S 0A9
Canada
|
22,092
|
Owned
|
N/A
|
Sales
Administration
Warehousing
|
Address
|
Estimated
Square
Feet
|
Annual Rent
|
Lease Expiration
|
Principal Activity
|
||||
Lakeland
Industries, Inc.
Headquarters
701-7
Koehler Avenue
Ronkonkoma,
NY 11779
|
6,250
|
Owned
|
N/A
|
Administration
Studio
Sales
|
||||
Lakeland
Industries, Inc.
202
Pride Lane
Decatur,
AL 35603
|
91,788
|
Owned
|
N/A
|
Manufacturing
Administration Engineering Warehousing
|
||||
Lakeland
Industries, Inc.
3420
Valley Ave.
Decatur,
AL 35603
|
49,500
|
Owned
|
N/A
|
Warehousing
Administration
|
||||
Lakeland
Industries, Inc.
201
Pride Lane, SW
Decatur,
AL 35603
|
2,400
|
$18,900
(Harvey Pride, Jr. –
officer related party)
|
3/31/11
|
Sales
Administration
|
||||
Lakeland
Industries, Inc.
3428
Pride Lane
Decatur,
AL 35603
|
7,000
|
$21,000
|
08/08/10
|
Warehouse
|
||||
Lakeland
Industries Europe Ltd.
Wallingfen
Park
236
Main Road
Newport,
East Yorkshire
HU15
2RH U United Kingdom
|
4,550
|
Approximately
$57,000 (varies with exchange rates) |
1/31/11
|
Warehouse
Sales
|
||||
Lakeland
Industries, Inc.
1100
Park Road
Blandon,
PA 19510
|
12,000
|
$40,200
(Leased from D. Gallen an employee)
|
Month
to month
|
Warehouse
|
||||
Lakeland
Industries, Inc.
31
South Sterley Street
Shillington,
PA 19607
|
18,520
|
$62,700
(Leased from M. Gallen an employee)
|
7/31/10
|
Manufacturing
Warehouse, Sales Administration
|
||||
Lakeland
Industries, Inc.
312
Hendle Street
Shillington,
PA 19607
|
1,760
|
$5,280
|
Month
to month
|
Warehouse
|
||||
Lakeland
Glove and Safety Apparel Private, Ltd.
Plots
81, 50 and 24
Noida
Special Economic Zone
New
Delhi, India
|
47,408
|
Owned
(2)
|
N/A
|
Manufacturing
Warehouse
|
Address
|
Estimated
Square
Feet
|
Annual Rent
|
Lease Expiration
|
Principal Activity
|
||||
Lakeland
Industries Inc., Agencia En Chile
Los
Algarrobos nº 2228
Comuna
de Santiago
Código
Postal 8361401
Santiago,
Chile
|
542
|
$17,208
|
03/01/11
|
Warehouse
Sales
|
||||
Qualytextil,
S.A.
Rua
do Luxemburgo, 260, Lotes 82/83, Condomicion
Industrial Presidente Vargas, Pirajá
Salvador,
Bahia 41230-130
Brazil
|
25,209
|
Owned
|
N/A
|
Manufacturing
Administration Engineering Warehousing
|
||||
Qualytextil,
S.A.
Curtume
Street, 708 Warehouse 10 Lapa de Baixo, Sao Paulo, Brazil
|
13,530
|
$124,699
|
10/31/13
|
Distribution
Center
Administration
|
||||
Qualytextil,
S.A.
Rui
Barbosa Street, 2237 - Store 09 Imbetiba, Macaè, Rio de
Janeiro, Brazil
|
1,259
|
$17,766
|
03/01/11
|
Store
|
||||
Lakeland
(Hong Kong) Trading Co., Ltd.
Unit
503 5/fl Silvercord Tower 2
30
Canton Road, Tsimshatsui, HK
|
N/A
|
N/A
|
N/A
|
Sales
|
||||
Lakeland
(Beijing) Safety Products Co., Ltd.
Unit
C412, Building C, Yeqing Plaza
No.
9 Wangjing Beilu, Chaoyang District
Beijing
100102 PRC
|
1,150
|
$17,988
|
06/30/2011
|
Sales
|
||||
Art
Prom, LLC
Varashilova
street 5/1,
Ust-Kamnogorsk,
Kazakhstan, 070002
|
54
|
$1,040
|
09/01/2010
|
Office
|
||||
Lakeland
Argentina, SRL
Centro
Industrial y Commercial Florida Oeste, Avda. Gral. Roca #4250
Pciade
Buenos Aires, Argentina
|
8,826
|
$35,765
|
08/18/2012
|
Office
|
(1)
|
We
own the buildings in which we conduct the majority of our manufacturing
operations in China and lease the land underlying the buildings from the
Chinese government. We have 36 years and 41 years remaining
under the leases with respect to the AnQui City and Jiaozhou facilities,
respectively.
|
(2)
|
The
annual total lease for the underlying land on plots 24, 81 and 50 in India
amounts to approximately $10,000 on a land lease expiring October 9,
2011.
|
ITEM 5.
|
MARKET FOR THE REGISTRANT’S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
|
Price Range of
Common Stock
|
||||||||
High
|
Low
|
|||||||
Fiscal
2011
|
||||||||
First
Quarter (through April 14, 2010)
|
$ | 9.86 | $ | 7.69 | ||||
Fiscal
2010
|
||||||||
First
Quarter
|
$ | 8.66 | $ | 5.03 | ||||
Second
Quarter
|
8.73 | 7.10 | ||||||
Third
Quarter
|
9.17 | 7.32 | ||||||
Fourth
Quarter
|
8.50 | 6.62 | ||||||
Fiscal
2009
|
||||||||
First
Quarter
|
$ | 13.38 | $ | 9.62 | ||||
Second
Quarter
|
13.62 | 11.60 | ||||||
Third
Quarter
|
14.00 | 8.38 | ||||||
Fourth
Quarter
|
11.25 | 5.90 |
Plan
Category
|
Number
of securities to be
issued
upon exercise of
outstanding
options,
warrants
and rights (1)
|
Weighted-average
exercise
price
per share of
outstanding
options,
warrants
and rights (1)
|
Number
of securities
remaining
available for
future
issuance under
equity
compensation plans
(excluding
securities
reflected
in column (a)(1))
|
|||||||||
Equity
Compensation plans approved by security holders
|
||||||||||||
Restricted
stock grants-employees
|
167,371 | $ | 0 | 66,214 | ||||||||
Restricted
stock grants-directors
|
63,184 | $ | 0 | 12,496 | ||||||||
Matching
award program
|
2,558 | $ | 0 | 58,459 | ||||||||
Bonus
in stock program-employees
|
23,311 | $ | 0 | 37,343 | ||||||||
Retainer
in stock program-directors
|
0 | $ | 0 | 20,704 | ||||||||
Total
Restricted Stock Plans
|
256,424 | $ | 0 | 195,216 |
Year
Ended January 31,
|
||||||||||||||||||||
2006
|
2007
|
2008
|
2009
|
2010
|
||||||||||||||||
(in
thousands, except share and per share data)
|
||||||||||||||||||||
Income
Statement Data:
|
||||||||||||||||||||
Net
sales
|
$ | 98,740 | $ | 100,171 | $ | 95,740 | $ | 102,268 | $ | 94,141 | ||||||||||
Costs
of goods sold
|
74,818 | 75,895 | 73,383 | 74,299 | 68,735 | |||||||||||||||
Gross
profit
|
23,922 | 24,276 | 22,357 | 27,969 | 25,406 | |||||||||||||||
Operating
expenses:
|
||||||||||||||||||||
Selling
and shipping
|
8,301 | 9,473 | 9,291 | 10,931 | 10,480 | |||||||||||||||
General
and administrative
|
6,119 | 8,081 | 8,082 | 10,766 | 12,468 | |||||||||||||||
Total
operating expenses
|
14,420 | 17,554 | 17,373 | 21,697 | 22,948 | |||||||||||||||
Operating
profit
|
9,502 | 6,722 | 4,984 | 6,272 | 2,458 | |||||||||||||||
Other
income (expense):
|
||||||||||||||||||||
Interest
expense
|
(167 | ) | (356 | ) | (330 | ) | (828 | ) | (1,111 | ) | ||||||||||
Interest
income
|
49 | 20 | 66 | 125 | (3 | ) | ||||||||||||||
Gain
on pension plan liquidation
|
— | 353 | — | — | — | |||||||||||||||
Other
income
|
384 | 191 | 145 | 494 | 92 | |||||||||||||||
Total
other income (expense)
|
266 | 208 | (119 | ) | (209 | ) | (1,022 | ) | ||||||||||||
Income
before income taxes
|
9,768 | 6,930 | 4,865 | 6,063 | 1,436 | |||||||||||||||
Income
tax expenses
|
3,439 | 1,826 | 1,574 | 1,514 | 406 | |||||||||||||||
Net
income
|
$ | 6,329 | $ | 5,104 | $ | 3,291 | $ | 4,549 | $ | 1,030 | ||||||||||
Net income per
common share (basic)(1)
|
$ | 1.15 | $ | 0.92 | $ | 0.60 | $ | 0.84 | $ | 0.19 | ||||||||||
Net income per
common share (diluted)(1)
|
$ | 1.15 | $ | 0.92 | $ | 0.59 | $ | 0.83 | $ | 0.19 | ||||||||||
Weighted average
common shares outstanding(1)
|
||||||||||||||||||||
Basic
|
5,518,751 | 5,520,881 | 5,522,751 | 5,435,829 | 5,426,784 | |||||||||||||||
Diluted
|
5,524,076 | 5,527,618 | 5,542,245 | 5,475,104 | 5,458,472 | |||||||||||||||
Balance
Sheet Data (at period end):
|
||||||||||||||||||||
Current
assets
|
$ | 63,719 | $ | 62,114 | $ | 70,269 | $ | 78,363 | $ | 64,827 | ||||||||||
Total
assets
|
72,464 | 74,198 | 84,623 | 101,615 | 90,020 | |||||||||||||||
Current
liabilities
|
3,839 | 4,326 | 4,997 | 7,452 | 15,921 | |||||||||||||||
Long-term
liabilities
|
7,829 | 3,813 | 10,753 | 25,852 | 1,675 | |||||||||||||||
Stockholders’
equity
|
60,796 | 66,059 | 68,873 | 68,311 | 72,424 |
Year
Ended January 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
Net
sales
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Cost
of goods sold
|
76.6 | % | 72.7 | % | 73.0 | % | ||||||
Gross
profit
|
23.4 | % | 27.3 | % | 27.0 | % | ||||||
Operating
expenses
|
18.2 | % | 21.2 | % | 24.4 | % | ||||||
Operating
profit
|
5.2 | % | 6.1 | % | 2.6 | % | ||||||
Interest
expense and other income, net
|
0.1 | % | .2 | % | 1.1 | % | ||||||
Income
tax expense
|
1.7 | % | 1.5 | % | 0.4 | % | ||||||
Net
income
|
3.4 | % | 4.4 | % | 1.1 | % |
For the Year
Ended January 31,
|
For the Three
Months
Ended January 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
sales
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Gross
profit
|
27.0 | % | 27.3 | % | 30.2 | % | 26.8 | % | ||||||||
Operating
expenses
|
24.4 | % | 21.2 | % | 24.7 | % | 24.2 | % | ||||||||
Operating
profit
|
2.6 | % | 6.1 | % | 5.5 | % | 2.6 | % | ||||||||
Income
before tax
|
1.5 | % | 5.9 | % | 5.2 | % | 3.9 | % | ||||||||
Net
income
|
1.1 | % | 4.4 | % | 4.5 | % | 3.0 | % |
|
·
|
Disposables
gross margin declined by 4.5 percentage points in FY10 compared with FY09.
This decline was mainly due to higher priced raw materials and an extreme
competitive pricing environment coupled with lower volume, partially
offset by labor cutbacks. Disposables margins in Q4 FY10 were increased by
a year-end reversal of rebates accrued earlier in the year, due to many
customers not meeting their year-end targets for
rebates.
|
|
·
|
Brazil
gross margin was 45.7% for FY10 this year compared with 51.4% last year.
Several dynamics were at play. There were several large sales which had
bid requirements for complete fire ensembles including boots and/or
helmets. This required Qualytextil to obtain these items from vendors.
There were several issues with these vendors causing Qualytextil to use
different vendors under delivery pressure, resulting in higher costs.
Qualytextil is presently negotiating with a boot vendor and also a helmet
vendor to obtain more reliable delivery and pricing and has begun
maintaining a stock of these items on hand in inventory to avoid such
problems in the future. Much of Qualytextil’s fabric used as raw materials
is imported from vendors in the U.S. which caused unfavorable costs
earlier in the year resulting from exchange rate differences. Since then
the exchange rates have changed to strengthen the Brazilian real which
should favorably impact the cost and margins in the future. Further, the
margins obtained in FY2009 were exceptional, partially due to a very weak
U.S. dollar and may not be achieved in the near future. In normal
conditions, in the future, the Qualytextil margins will be expected to be
between 42% and 46%. In Q4 FY10, Qualytextil achieved a 53.0% margin
resulting from a larger bid
contract.
|
|
·
|
Glove
division reduction in volume coupled with inventory write-offs resulting
in a gross loss of $0.1 million.
|
|
·
|
Continued
gross losses of $0.6 million from India in
FY10.
|
|
·
|
Reflective
margins were lower than the prior year mainly due to lower
volume.
|
|
·
|
Canada
gross margin increased by 16.1 percentage points primarily from more
favorable exchange rates and local competitive pricing
climate.
|
|
·
|
UK
and Europe margins increased by 8.2 percentage points primarily from
exchange rate differentials.
|
|
·
|
Chile
margins increased by 8.7 percentage points primarily from higher volume
and several larger sales orders.
|
·
|
$(0.7)
|
million
- sales commissions declined, mainly resulting from lower
volume.
|
|
·
|
(0.6)
|
million
- freight out declined, mainly resulting from lower volume and lower
prevailing carrier rates.
|
|
·
|
(0.6)
|
million
- officers salaries declined, reflecting the retirement of Ray Smith to
become a non-employee director and Chairman of the Board and also
reflecting an 8% across the board reduction in total officer
compensation.
|
|
·
|
(0.5)
|
million
– reduction in foreign exchange costs resulting from the Company’s hedging
program and more favorable rates.
|
|
·
|
(0.3)
|
million
- shareholder expenses declined, reflecting the proxy fight in the prior
year.
|
|
·
|
(0.3)
|
million
– consulting fees were reduced, resulting from using interns and revising
Sarbanes Oxley procedures.
|
|
·
|
(0.2)
|
million
reduction in employee benefits, mainly resulting from the suspension of
the employer match for the 401-K plan.
|
|
·
|
0.1
|
million
increase in property tax, largely resulting from the Canadian
warehouse.
|
·
|
0.1
|
million
increased depreciation largely resulting from the Canadian
warehouse.
|
|
·
|
0.2
|
million
increased bank fees resulting from higher volume of sales paid by credit
cards instead of customer checks
|
|
·
|
0.5
|
million
– professional fees increased resulting from analysis of tax issues and an
IRS audit. The Company has changed independent auditing firms in the
expectation that such professional fees will be reduced in the
future.
|
|
·
|
0.7
|
million
– in increased operating costs in China were the result of the large
increase in direct international sales made by China, which are now
allocated to SG&A costs, previously allocated to cost of goods
sold.
|
·
|
$1.1
|
million
– Brazil operating expenses in Q1 of this year. Brazil operations were not
included in Q1 last year, as it was acquired effective May 1,
2008.
|
|
·
|
1.0
|
million
– start-up expenses in connection with Qualytextil gearing up to sell
Lakeland branded products. This includes hiring 20 sales and logistical
support staff, printing of catalogs, lease of two new distribution centers
and increased travel expense.
|
|
·
|
0.3
|
million
– in additional employee benefits and payroll taxes resulting from hiring
as employees certain people who had been performing services on an
out-sourcing basis.
|
|
·
|
0.2
|
million
additional freight out costs mainly resulting from higher
volume.
|
|
·
|
0.2
|
million
in additional commissions resulting from higher volume and higher rates
paid on some larger bids.
|
For the Year
Ended January 31,
|
For the Three Months
Ended January 31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
sales
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Gross
profit
|
27.3 | % | 23.4 | % | 26.8 | % | 24.7 | % | ||||||||
Operating
expenses
|
21.2 | % | 18.1 | % | 24.2 | % | 17.8 | % | ||||||||
Operating
profit
|
6.1 | % | 5.2 | % | 2.6 | % | 6.9 | % | ||||||||
Income
before tax
|
5.9 | % | 5.1 | % | 3.9 | % | 6.6 | % | ||||||||
Net
income
|
4.4 | % | 3.4 | % | 3.0 | % | 4.0 | % |
·
|
$2.9
|
million
– operating costs in the acquired Brazilian operations not in previous
year.
|
|
·
|
0.4
|
million
– in additional freight out costs, excluding Brazil, resulting from higher
rates prevailing in most of FY09, due to higher fuel
surcharges.
|
|
·
|
0.4
|
Million
– in additional sales salaries, commissions and administrative salaries
resulting from expanded sales staff.
|
|
·
|
0.3
|
million
– in additional costs resulting from the proxy contest earlier in
FY09.
|
|
·
|
0.2
|
million
– in additional international travel expenses and sales meetings that
tracked international sales growth.
|
|
·
|
0.1
|
million
– in additional advertising and printing costs.
|
|
·
|
0.1
|
million
– in additional equity compensation resulting from additional grants
charged to expense over the vesting period of the Company’s Restricted
Stock Program.
|
|
·
|
0.1
|
million
– in additional currency fluctuation costs.
|
|
·
|
0.1
|
million
– in additional computer expenses.
|
|
·
|
0.1
|
million
– in other taxes – mainly property taxes on the Canada warehouse opened in
December 2007.
|
|
·
|
(0.1)
|
million
– in reduced medical insurance costs resulting from favorable
experience.
|
|
·
|
(0.3)
|
million
– reduction in professional fees and consulting expenses mainly resulting
from an expenditure in the previous fiscal year in India to set up the
proper production
processes.
|
·
|
A
one year, $23.5 million revolving credit facility, of which we had
borrowings outstanding as of January 31, 2010 amounting to $9.5
million
|
Payments Due by Period
|
||||||||||||||||||||
Less than
|
||||||||||||||||||||
Total
|
1 Year
|
1-3 Years
|
4-5 Years
|
After 5 Years
|
||||||||||||||||
Canada
facility loan
|
$ | 1,677,019 | $ | 93,601 | $ | 280,803 | $ | 187,202 | $ | 1,115,413 | ||||||||||
*Operating
leases
|
881,946 | 130,220 | 495,027 | 256,699 | — | |||||||||||||||
Other
liabilities
|
— | — | — | — | — | |||||||||||||||
Revolving
credit facility
|
9,518,000 | 9,518,000 | — | — | — | |||||||||||||||
Total
|
$ | 12,076,965 | $ | 9,741,821 | $ | 775,830 | $ | 443,901 | $ | 1,115,413 | ||||||||||
*NOTE:
We renewed the Mexico lease and rent for the next 3 years at 10% more than
the past.
|
Consolidated
Financial Statements:
|
|
Page
No.
|
|
Reports
of Independent Registered Public Accounting Firms
|
41-42
|
Consolidated
Balance Sheets - January 31, 2010 and 2009
|
43
|
Consolidated
Statements of Income for the years ended January 31, 2010, 2009 and
2008
|
44
|
Consolidated
Statements of Stockholders' Equity for the years ended January 31, 2010,
2009 and 2008
|
45
|
Consolidated
Statements of Cash Flows for the years ended January 31, 2010, 2009 and
2008
|
46
|
Notes
to Consolidated Financial Statements
|
47-67
|
Schedule
II – Valuation and Qualifying Accounts
|
68
|
All
other schedules are omitted because they are not applicable, not required
or because the required information is included in the consolidated
financial statements or notes thereto
|
/s/
Warren, Averett, Kimbrough and Marino, LLC
|
Birmingham,
Alabama
|
April
14, 2010
|
2010
|
2009
|
|||||||
Assets
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 5,093,380 | $ | 2,755,441 | ||||
Accounts
receivable, net of allowance for doubtful accounts of approximately
$200,200 and $104,500 at January 31, 2010 and 2009,
respectively
|
15,809,010 | 13,353,430 | ||||||
Inventories,
net of reserves of approximately $868,000 and $657,000 at January 31, 2010
and 2009, respectively
|
38,575,890 | 57,074,028 | ||||||
Deferred
income taxes
|
1,261,250 | 2,578,232 | ||||||
Prepaid
income tax
|
1,731,628 | 531,467 | ||||||
Other
current assets
|
2,355,506 | 2,070,825 | ||||||
Total
current assets
|
64,826,664 | 78,363,423 | ||||||
Property
and equipment, net
|
13,742,454 | 13,736,326 | ||||||
Intangibles
and other assets, net
|
5,622,120 | 4,405,833 | ||||||
Goodwill
|
5,829,143 | 5,109,136 | ||||||
Total
assets
|
$ | 90,020,381 | $ | 101,614,718 | ||||
Liabilities
and Stockholders' Equity
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable
|
$ | 3,882,730 | $ | 3,853,890 | ||||
Accrued
compensation and benefits
|
1,288,796 | 3,069,409 | ||||||
Other
accrued expenses
|
1,138,303 | 434,809 | ||||||
Borrowings
under revolving credit facility
|
9,517,567 | — | ||||||
Current
maturity of long-term debt
|
93,601 | 94,000 | ||||||
Total
current liabilities
|
15,920,997 | 7,452,108 | ||||||
Borrowings
under revolving credit facility
|
— | 24,408,466 | ||||||
Construction
loan payable net of current maturity
|
1,583,419 | 1,368,406 | ||||||
Other
liabilities
|
92,176 | 74,611 | ||||||
Total
liabilities
|
17,596,592 | 33,303,591 | ||||||
Commitments
and Contingencies
|
||||||||
Stockholders’
equity
|
||||||||
Preferred
stock, $.01 par; 1,500,000 shares authorized; none issued
|
— | — | ||||||
Common
stock, $.01 par; 10,000,000 shares authorized; 5,564,732 and 5,523,288
shares issued and outstanding at January 31, 2010 and 2009,
respectively
|
55,647 | 55,233 | ||||||
Less
treasury stock, at cost; 125,322 shares at January 31, 2010 and 107,317
shares at January 31, 2009
|
(1,353,247 | ) | (1,255,459 | ) | ||||
Additional
paid-in capital
|
49,622,632 | 49,511,896 | ||||||
Retained
earnings
|
25,221,050 | 24,191,258 | ||||||
Other
comprehensive loss
|
(1,122,293 | ) | (4,191,801 | ) | ||||
Total
stockholders' equity
|
72,423,789 | 68,311,127 | ||||||
Total
liabilities and stockholders' equity
|
$ | 90,020,381 | $ | 101,614,718 |
2010
|
2009
|
2008
|
||||||||||
Net
sales
|
$ | 94,140,819 | $ | 102,268,125 | $ | 95,740,068 | ||||||
Cost
of goods sold
|
68,735,076 | 74,298,935 | 73,382,713 | |||||||||
Gross
profit
|
25,405,743 | 27,969,190 | 22,357,355 | |||||||||
Operating
expenses
|
||||||||||||
Selling
and shipping
|
10,480,099 | 10,931,285 | 9,291,263 | |||||||||
General
and administrative
|
12,468,137 | 10,765,595 | 8,082,618 | |||||||||
Total
operating expenses
|
22,948,236 | 21,696,880 | 17,373,881 | |||||||||
Operating
profit
|
2,457,507 | 6,272,310 | 4,983,474 | |||||||||
Other
income (expense)
|
||||||||||||
Interest
expense
|
(1,111,456 | ) | (827,725 | ) | (330,268 | ) | ||||||
Interest
income
|
(2,614 | ) | 124,634 | 66,722 | ||||||||
Other
income – net
|
92,216 | 494,084 | 144,870 | |||||||||
Total
other income (expense)
|
(1,021,854 | ) | (209,007 | ) | (118,676 | ) | ||||||
Income
before income taxes
|
1,435,653 | 6,063,303 | 4,864,798 | |||||||||
Income
tax expense
|
405,861 | 1,513,835 | 1,573,936 | |||||||||
Net
income
|
$ | 1,029,792 | $ | 4,549,468 | $ | 3,290,862 | ||||||
Net
income per common share
|
||||||||||||
Basic
|
$ | 0.19 | $ | 0.84 | $ | 0.60 | ||||||
Diluted
|
$ | 0.19 | $ | 0.83 | $ | 0.59 | ||||||
Weighted
average common shares outstanding
|
||||||||||||
Basic
|
5,426,784 | 5,435,829 | 5,522,751 | |||||||||
Diluted
|
5,458,472 | 5,475,104 | 5,542,245 | |||||||||
Net
income
|
$ | 1,029,792 | $ | 4,549,468 | $ | 3,290,862 | ||||||
Translation
adjustments:
|
||||||||||||
Canada
Real Estate
|
76,899 | (55,152 | ) | (36,073 |
)
|
|||||||
Qualytextil,
S.A. Brazil
|
2,475,387 | (3,473,196 | ) | — | ||||||||
Lakeland
Industries Europe, Inc.
|
(110,238 | ) | — | — | ||||||||
Lakeland
(Beijing) Safety Products Co., Ltd.
|
80 | — | — | |||||||||
Interest
rate swap
|
627,380 | (627,380 | ) | — | ||||||||
Total
|
3,069,508 | (4,155,728 | ) | (36,073 | ) | |||||||
Total
comprehensive income
|
$ | 4,099,300 | $ | 393,740 | $ | 3,254,789 |
Common
Stock
|
Treasury
Stock
|
Additional
paid-in
|
Retained
|
Other
Comprehensive
|
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Earnings
|
Loss
|
Total
|
|||||||||||||||||||||||||
Balance,
January 31, 2007
|
5,521,824 | $ | 55,218 | — | $ | — | $ | 48,972,025 | $ | 17,031,928 | $ | — | $ | 66,059,171 | ||||||||||||||||||
Net
income
|
— | — | — | — | — | 3,290,862 | — | 3,290,862 | ||||||||||||||||||||||||
Effect
of adoption of FIN 48
|
— | — | — | — | — | (419,000 | ) | — | (419,000 | ) | ||||||||||||||||||||||
Effect
of adoption of SAB No.108
|
— | — | — | — | — | (262,000 | ) | — | (262,000 | ) | ||||||||||||||||||||||
Exercise
of stock option
|
1,464 | 15 | — | — | 6,675 | — | — | 6,690 | ||||||||||||||||||||||||
Other
comprehensive loss
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Translation
adjustments regarding Canadian Real Estate
|
— | — | — | — | — | — | (36,073 | ) | (36,073 | ) | ||||||||||||||||||||||
Stock
based compensation
|
— | — | — | — | 233,261 | — | — | 233,261 | ||||||||||||||||||||||||
Balance,
January 31, 2008
|
5,523,288 | 55,233 | — | — | 49,211,961 | 19,641,790 | (36,073 | ) | 68,872,911 | |||||||||||||||||||||||
Net
income
|
— | — | — | — | — | 4,549,468 | — | 4,549,468 | ||||||||||||||||||||||||
Stock
repurchase program
|
— | — | (107,317 | ) | (1,255,459 | ) | — | — | — | (1,255,459 | ) | |||||||||||||||||||||
Other
comprehensive loss
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Translation
adjustments
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Canadian
Real Estate
|
— | — | — | — | — | — | (55,152 | ) | (55,152 | ) | ||||||||||||||||||||||
Qualytextil,
S.A., Brazil
|
— | — | — | — | — | — | (3,473,196 | ) | (3,473,196 | ) | ||||||||||||||||||||||
Interest
rate swap
|
— | — | — | — | — | — | (627,380 | ) | (627,380 | ) | ||||||||||||||||||||||
Stock
based compensation
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuance
of director stock options
|
— | — | — | — | 31,544 | — | — | 31,544 | ||||||||||||||||||||||||
Restricted
stock plan
|
— | — | — | — | 268,391 | — | — | 268,391 | ||||||||||||||||||||||||
Balance,
January 31, 2009
|
5,523,288 | 55,233 | (107,317 | ) | (1,255,459 | ) | 49,511,896 | 24,191,258 | (4,191,801 | ) | 68,311,127 | |||||||||||||||||||||
Net
income
|
— | — | — | — | — | 1,029,792 | — | 1,029,792 | ||||||||||||||||||||||||
Stock
repurchase program
|
— | — | (18,005 | ) | (97,788 | ) | — | — | — | (97,788 | ) | |||||||||||||||||||||
Other
comprehensive loss
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Translation
adjustments
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Canada
|
— | — | — | — | — | — | 76,899 | 76,899 | ||||||||||||||||||||||||
Qualytextil,
S.A., Brazil
|
— | — | — | — | — | — | 2,475,387 | 2,475,387 | ||||||||||||||||||||||||
UK
|
— | — | — | — | — | — | (110,238 | ) | (110,238 | ) | ||||||||||||||||||||||
China
|
— | — | — | — | — | — | 80 | 80 | ||||||||||||||||||||||||
Interest
rate swap
|
— | — | — | — | — | — | 627,380 | 627,380 | ||||||||||||||||||||||||
Stock
based compensation
|
||||||||||||||||||||||||||||||||
Issuance
of director stock options
|
— | — | — | — | 47,068 | — | — | 47,068 | ||||||||||||||||||||||||
Restricted
stock plan
|
— | — | — | — | 169,640 | — | — | 169,640 | ||||||||||||||||||||||||
Director
options granted at fair market value
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Director
stock options exercised
|
3,267 | 33 | — | — | 23,529 | — | — | 23,562 | ||||||||||||||||||||||||
Shares
issued from Restricted Stock Plan
|
38,177 | 381 | — | — | — | — | — | 381 | ||||||||||||||||||||||||
Return
of shares in lieu of payroll tax withholding
|
— | — | — | — | (111,000 | ) | — | — | (111,000 | ) | ||||||||||||||||||||||
Cash
paid in lieu of issuing shares
|
— | — | — | — | (18,501 | ) | — | — | (18,501 | ) | ||||||||||||||||||||||
Balance,
January 31, 2010
|
5,564,732 | $ | 55,647 | (125,322 | ) | $ | (1,353,247 | ) | $ | 49,622,632 | $ | 25,221,050 | $ | (1,122,293 | ) | $ | 72,423,789 |
2010
|
2009
|
2008
|
||||||||||
Cash
flows from operating activities
|
||||||||||||
Net
income
|
$ | 1,029,792 | $ | 4,549,468 | $ | 3,290,862 | ||||||
Adjustments
to reconcile net income to net cash provided
by (used in) operating activities
|
||||||||||||
Provision
for inventory obsolescence
|
211,601 | 49,785 | 300,626 | |||||||||
Provision
for doubtful accounts
|
96,074 | 59,135 | (58,000 | ) | ||||||||
Deferred
income taxes
|
1,316,981 | (608,519 | ) | (641,575 | ) | |||||||
Depreciation
and amortization
|
1,744,113 | 1,633,846 | 1,186,840 | |||||||||
Stock
based and restricted stock compensation
|
198,588 | 299,935 | 233,261 | |||||||||
(Increase)
decrease in operating assets:
|
||||||||||||
Accounts
receivable
|
(2,551,654 | ) | 2,763,878 | (89,400 | ) | |||||||
Inventories
|
18,286,537 | (5,698,718 | ) | (7,723,060 | ) | |||||||
Prepaid
income taxes and other current assets
|
(1,731,628 | ) | — | 1,110,310 | ||||||||
Other
assets
|
692,476 | (422,309 | ) | (305,961 | ) | |||||||
Increase
(decrease) in operating liabilities
|
||||||||||||
Accounts
payable
|
28,840 | (1,418,602 | ) | 257,357 | ||||||||
Accrued
expenses and other liabilities
|
(644,011 | ) | 3,372 | 319,538 | ||||||||
Net
cash provided by (used in) operating activities
|
18,677,709 | 1,211,271 | (2,119,202 | ) | ||||||||
Cash
flows from investing activities
|
||||||||||||
Acquisition
of Qualytextil, S.A.
|
— | (13,780,205 | ) | — | ||||||||
Purchases
of property and equipment
|
(1,192,251 | ) | (2,371,914 | ) | (3,427,458 | ) | ||||||
Net
cash used in investing activities
|
(1,192,251 | ) | (16,152,119 | ) | (3,427,458 | ) | ||||||
Cash
flows from financing activities
|
||||||||||||
Net
borrowings (payments) under credit agreement
|
(14,890,899 | ) | 2,192,999 | 5,085,000 | ||||||||
Purchases
of stock under Stock Repurchase program
|
(97,788 | ) | (1,255,459 | ) | — | |||||||
Borrowing
to fund Qualytextil acquisition
|
— | 13,344,466 | — | |||||||||
Other
liabilities
|
17,566 | 74,611 | — | |||||||||
Net
proceeds (repayment) construction loan
|
(88,993 | ) | (88,000 | ) | 1,976,085 | |||||||
Proceeds
from exercise of stock options
|
23,562 | — | 6,690 | |||||||||
Shares
returned in lieu of taxes under Restricted Stock Program
|
(110,967 | ) | — | — | ||||||||
Net
cash provided by (used in) financing activities
|
(15,147,519 | ) | 14,268,617 | 7,067,775 | ||||||||
Net
(decrease) increase in cash and cash equivalents
|
2,337,939 | (672,231 | ) | 1,521,115 | ||||||||
Cash
and cash equivalents at beginning of year
|
2,755,441 | 3,427,672 | 1,906,557 | |||||||||
Cash
and cash equivalents at end of year
|
$ | 5,093,380 | $ | 2,755,441 | $ | 3,427,672 |
Fiscal Years Ended January 31,
|
||||||||||||||||||||||||
2010
|
2009
|
2008
|
||||||||||||||||||||||
Domestic
|
$ | 61,504,000 | 65.3 | % | $ | 76,695,000 | 75.0 | % | $ | 82,773,000 | 86.5 | % | ||||||||||||
International
|
32,637,000 | 34.7 | % | 25,573,000 | 25.0 | % | 12,967,000 | 13.5 | % | |||||||||||||||
Total
|
$ | 94,141,000 | 100.0 | % | $ | 102,268,000 | 100.0 | % | $ | 95,740,000 | 100.0 | % |
2010
|
2009
|
2008
|
||||||||||
Interest
paid
|
$ | 1,111,456 | $ | 827,725 | $ | 330,268 | ||||||
Income
taxes paid
|
$ | 625,204 | $ | 3,216,000 | $ | 699,456 |
2010
|
2009
|
|||||||
Raw
materials
|
$ | 18,727,993 | $ | 26,343,875 | ||||
Work-in-process
|
2,444,693 | 2,444,160 | ||||||
Finished
goods
|
17,403,204 | 28,285,993 | ||||||
$ | 38,575,890 | $ | 57,074,028 |
Useful life in years
|
2010
|
2009
|
|||||||||
Machinery
and equipment
|
3 –
10
|
$ | 9,020,453 | $ | 8,488,655 | ||||||
Furniture
and fixtures
|
3 –
10
|
494,464 | 389,746 | ||||||||
Leasehold
improvements
|
Lease
term
|
1,731,669 | 1,189,312 | ||||||||
Land
and building (China)
|
20
|
2,412,115 | 2,412,115 | ||||||||
Land,
building and equipment (India)
|
7 -
39
|
4,129,205 | 4,010,237 | ||||||||
Land
and building (Canada)
|
30
|
2,277,397 | 1,985,951 | ||||||||
Land
and buildings (USA)
|
39
|
3,655,764 | 3,654,008 | ||||||||
Land
and building (Brazil)
|
5
|
662,157 | 535,971 | ||||||||
24,383,224 | 22,665,995 | ||||||||||
Less
accumulated depreciation and amortization
|
(10,640,770 | ) | (8,929,669 | ) | |||||||
$ | 13,742,454 | $ | 13,736,326 |
Current assets
|
($000 USD)
|
|||
Cash
and equivalents
|
$ | 34 | ||
Accounts
receivable
|
1,199 | |||
Inventory
|
3,309 | |||
Other
current assets
|
210 | |||
Total
current assets
|
4,752 | |||
Deferred
tax asset
|
222 | |||
Fixed
assets
|
1,249 | |||
Intangible
(trademarks, tradenames)
|
186 | |||
Other
non-current assets
|
606 | |||
Total
assets
|
$ | 7,015 | ||
Current
Liabilities
|
||||
Loans
|
$ | 3,093 | ||
Trade
payables and other current liabilities
|
3,477 | |||
Total
current liabilities
|
6,570 | |||
Other
non-current liabilities
|
86 | |||
Net
assets acquired
|
359 | |||
$ | 7,015 | |||
Total
cost of acquisition of Qualytextil, SA
|
$ | 13,780 | ||
Less
net assets acquired
|
(359 | ) | ||
Less
debt repayment at closing
|
(3,890 | ) | ||
Less
additional values to reflect appraisal, assigned to (in
USD)
|
||||
Trademarks
|
(3,020 | ) | ||
Customer
contract
|
(373 | ) | ||
Goodwill
at closing
|
6,138 | |||
Foreign
currency translation
|
1,900 | |||
Goodwill
at January 31, 2009 arising from Qualytextil, SA
|
$ | 4,238 | ||
Effect
of foreign exchange in FY10
|
720 | |||
Goodwill
at January 31, 2010 arising from Qualytextil, S.A.
|
$ | 4,958 |
Fiscal
2009
|
Fiscal 2008
|
|||||||
Sales
|
$ | 104,233 | $ | 104,258 | ||||
Net
income
|
4,815 | 3,942 | ||||||
EPS
|
$ | 0.89 | $ | 0.71 |
2010
|
2009
|
|||||||
Trademarks
and tradenames, resulting from
|
||||||||
Qualytextil,
S.A. acquisition, per appraisal
|
$ | 3,972,157 | $ | 3,191,891 | ||||
Appraised
value of customer contracts acquired in Qualytextil, S.A. acquisition,
amortized over estimates remaining life of 39 months from January 31,
2010, net of accumulated amortization of $110,454 at 2010 and $20,716 at
2009
|
335,148 | 352,178 | ||||||
Bank
fees net of accumulated amortization of $0 at 2010 and $483,275 at
2009
|
71,761 | 83,550 | ||||||
Deferred
taxes non-current
|
705,102 | 519,211 | ||||||
Security
deposits
|
522,465 | 231,318 | ||||||
Other
|
15,487 | 27,685 | ||||||
$ | 5,622,120 | $ | 4,405,833 |
Directors’
Plan
|
||||||||||||||||
Number
of
shares
|
Weighted
average
exercise
price
|
Weighted
average
remaining
term
(years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Shares
under option
|
||||||||||||||||
Outstanding
at beginning of year
|
20,567 | $ | 13.42 | 2.27 | ||||||||||||
Granted
during FY10
|
8,000 | 6.88 | $ | 11,200 | ||||||||||||
Cancelled
during FY10
|
(1,000 | ) | 13.10 | |||||||||||||
Exercised
during FY10
|
(3,267 | ) | 7.22 | |||||||||||||
Outstanding
and exercisable at end of year
|
24,300 | $ | 12.11 | 2.34 | $ | 11,200 | ||||||||||
Weighted-average
fair value per share of options granted during:
|
||||||||||||||||
FY10
|
$ | 5.88 | ||||||||||||||
FY09
|
$ | 10.51 | ||||||||||||||
FY08
|
N/A | |||||||||||||||
Reserved
for future issuance:
|
||||||||||||||||
Directors’
Plan
|
6,000 |
2010
|
2009
|
2008
|
||||||||||
Domestic
|
$ | (1,208,641 | ) | $ | 2,826,365 | $ | 3,642,522 | |||||
Foreign
|
2,644,294 | 3,236,938 | 1,222,276 | |||||||||
Total
|
$ | 1,435,653 | $ | 6,063,303 | $ | 4,864,798 |
2010
|
2009
|
2008
|
||||||||||
Current
|
||||||||||||
Federal
|
$ | (1,228,449 | ) | $ | 1,063,383 | $ | 1,680,298 | |||||
State
|
(130,339 | ) | 154,558 | 174,369 | ||||||||
Foreign
|
447,668 | 904,413 | 343,864 | |||||||||
(911,120 | ) | 2,122,354 | 2,198,531 | |||||||||
Deferred
|
1,316,981 | (608,519 | ) | (624,595 | ) | |||||||
$ | 405,861 | $ | 1,513,835 | $ | 1,573,936 |
2010
|
2009
|
2008
|
||||||||||
Statutory
rate
|
34.0 | % | 34.0 | % | 34.0 | % | ||||||
State
income taxes, net of Federal tax benefit
|
(6.0 | )% | 1.7 | % | 2.4 | % | ||||||
Permanent
differences
|
— | — | (0.7 | )% | ||||||||
FIN48
adjustment
|
— | (3.4 | )% | — | ||||||||
Foreign
tax rate differential
|
(17.0 | )% | (6.2 | )% | (5.4 | )% | ||||||
India
tax credit valuation allowance
|
16.2 | % | — | — | ||||||||
Restricted
stock fair market value at vesting per tax compared with grant date per
books
|
6.2 | % | — | — | ||||||||
Various
tax credits
|
(4.7 | )% | — | — | ||||||||
Other
|
(0.4 | )% | (1.1 | )% | 2.0 | % | ||||||
Effective
rate
|
28.3 | % | 25.0 | % | 32.3 | % |
2010
|
2009
|
2008
|
||||||||||
Deferred
tax assets
|
||||||||||||
Inventories
|
$ | 902,809 | $ | 1,204,998 | $ | 1,120,426 | ||||||
Accounts
receivable
|
9,718 | 37,810 | 17,100 | |||||||||
Accrued
compensation and other
|
236,233 | 293,516 | 66,742 | |||||||||
Depreciation
|
26,935 | 22,304 | 35,666 | |||||||||
Stock
based compensation
|
85,555 | 262,502 | 130,000 | |||||||||
Losses
in India prior to restructuring
|
— | 757,102 | 599,779 | |||||||||
Deferred
tax assets
|
$ | 1,261,250 | $ | 2,578,232 | $ | 1,969,713 |
Accrued
as of January 31, 2008
|
$ | 439 | ||
Less
taxes refundable from1/04 per Company position written off in FY08 as part
of adjustment to reflect this guidance
|
(162 | ) | ||
Balance
as of January 31, 2008
|
$ | 277 | ||
Payments
made to settle the liability
|
(70 | ) | ||
Reduction
in tax expense in FY09 to reflect settlement with IRS
|
(207 | ) | ||
Uncertain
tax liability at January 31, 2009
|
$ | 0 |
Gross rental
|
Rentals paid to
related parties
|
|||||||
Year
ended January 31,
|
||||||||
2010
|
$ | 633,769 | $ | 127,080 | ||||
2009
|
$ | 550,513 | $ | 117,855 | ||||
2008
|
$ | 566,845 | $ | 167,904 |
Year ending January 31,
|
||||
2011
|
$ | 597,298 | ||
2012
|
454,973 | |||
2013
|
382,062 | |||
2014
|
129,015 |
Year ended January 31, 2010
Canadian
|
||||
2011
|
$ | 93,601 | ||
2012
|
93,601 | |||
2013
|
93,601 | |||
2014
|
93,601 | |||
2015
|
93,601 |
January 31, 2010
|
January 31, 2009
|
|||||||
Unrealized
gains:
|
||||||||
Foreign
currency exchange contracts
|
— | — | ||||||
Unrealized
(losses):
|
||||||||
Foreign
currency exchange contracts
|
— | — | ||||||
Interest
rate swaps
|
— | $ | (627,380 | ) |
2010
|
2009
|
2008
|
||||||||||
Net
Sales:
|
||||||||||||
North
America and other foreign
|
$ | 75,274,796 | $ | 92,408,341 | $ | 97,922,742 | ||||||
China
|
19,473,004 | 22,182,628 | 14,823,755 | |||||||||
India
|
824,083 | 489,755 | 132,350 | |||||||||
Brazil
|
13,173,777 | 8,383,726 | — | |||||||||
Less
inter-segment sales
|
(14,604,841 | ) | (21,196,325 | ) | (17,138,779 | ) | ||||||
Consolidated
sales
|
$ | 94,140,819 | $ | 102,268,125 | $ | 95,740,068 | ||||||
Operating
Profit:
|
||||||||||||
North
America and other foreign
|
$ | 21,288 | $ | 2,890,601 | $ | 3,262,062 | ||||||
China
|
2,578,057 | 3,071,886 | 2,082,988 | |||||||||
India
|
(852,335 | ) | (845,791 | ) | (624,042 | ) | ||||||
Brazil
|
298,374 | 1,469,542 | — | |||||||||
Less
intersegment profit
|
412,123 | (313,928 | ) | 262,466 | ||||||||
Consolidated
operating profit
|
$ | 2,457,507 | $ | 6,272,310 | $ | 4,983,474 | ||||||
Identifiable
Assets:
|
||||||||||||
North
America and other foreign
|
$ | 53,233,159 | $ | 70,302,861 | $ | 76,306,269 | ||||||
China
|
14,133,006 | 13,270,793 | 9,904,174 | |||||||||
India
|
3,875,781 | 4,351,075 | (1,587,590 | ) | ||||||||
Brazil
|
18,778,435 | 13,689,989 | — | |||||||||
Consolidated
assets
|
$ | 90,020,381 | $ | 101,614,718 | $ | 84,622,853 | ||||||
Depreciation:
|
||||||||||||
North
America and other foreign
|
$ | 790,555 | $ | 830,314 | $ | 665,182 | ||||||
China
|
320,999 | 286,773 | 352,009 | |||||||||
India
|
420,141 | 365,262 | 169,649 | |||||||||
Brazil
|
167,580 | 134,612 | — | |||||||||
Consolidated
depreciation
|
$ | 1,699,275 | $ | 1,616,961 | $ | 1,186,840 |
1/31/10
|
10/31/09
|
7/31/09
|
4/30/09
|
|||||||||||||
Net
sales
|
$ | 24,831 | $ | 22,285 | $ | 23,049 | $ | 23,976 | ||||||||
Cost
of sales
|
17,329 | 16,629 | 16,812 | 17,965 | ||||||||||||
Gross
profit
|
7,502 | 5,656 | 6,237 | 6,011 | ||||||||||||
Net
income
|
$ | 1,115 | $ | (190 | ) | $ | 8 | $ | 97 | |||||||
Basic
and diluted income per common
|
||||||||||||||||
Share
|
||||||||||||||||
Basic
|
$ | 0.20 | $ | (0.03 | ) | $ | 0.00 | $ | 0.02 | |||||||
Diluted
|
$ | 0.20 | $ | (0.03 | ) | $ | 0.00 | $ | 0.02 | |||||||
1/31/09
|
10/31/08
|
7/31/08
|
4/30/08
|
|||||||||||||
Net
sales
|
$ | 22,263 | $ | 25,160 | $ | 27,565 | $ | 27,280 | ||||||||
Cost
of sales
|
16,304 | 17,989 | 19,404 | 20,602 | ||||||||||||
Gross
profit
|
$ | 5,959 | $ | 7,171 | $ | 8,161 | $ | 6,678 | ||||||||
Net
income
|
$ | 659 | $ | 1,373 | $ | 1,625 | $ | 893 | ||||||||
Basic
and diluted income per common share*:
|
||||||||||||||||
Share
|
||||||||||||||||
Basic
|
$ | 0.12 | $ | 0.25 | $ | 0.30 | $ | 0.16 | ||||||||
Diluted
|
$ | 0.12 | $ | 0.25 | $ | 0.30 | $ | 0.16 |
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
|||||||||||
Additions
|
|||||||||||||||
Balance at
Beginning
of period
|
Charge to
costs and
expenses
|
Charged
to other
accounts
|
Additions /
Deductions
|
Balance at
end of
period
|
|||||||||||
Year ended January 31, 2010 | |||||||||||||||
Allowance
for doubtful accounts (a)
|
$ | 104,500 | $ | 95,700 | $ | 200,200 | |||||||||
Allowance
for slow moving inventory
|
657,000 | $ | 211,000 | $ | 868,000 | ||||||||||
Year ended January 31, 2009 | |||||||||||||||
Allowance
for doubtful accounts (a)
|
$ | 45,000 | $ | 59,500 | $ | 104,500 | |||||||||
Allowance
for slow moving inventory
|
$ | 607,000 | $ | 50,000 | $ | 657,000 | |||||||||
Year ended January 31, 2008 | |||||||||||||||
Allowance
for doubtful accounts (a)
|
$ | 103,000 | $ | (58,000 | ) | $ | 45,000 | ||||||||
Allowance
for slow moving inventory
|
$ | 306,000 | $ | 301,000 | $ | 607,000 |
ITEM
9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
ITEM
9A.
|
CONTROLS
AND PROCEDURES
|
Name
|
Age
|
Position
|
||
Raymond
J. Smith
|
71
|
Chairman
of the Board of Directors
|
||
Christopher
J. Ryan
|
58
|
Chief
Executive Officer, President, Secretary, General Counsel and
Director
|
||
Gary
Pokrassa
|
62
|
Chief
Financial Officer
|
||
Gregory
D. Willis
|
53
|
Executive
Vice President
|
||
Harvey
Pride, Jr.
|
63
|
Senior
Vice President - Manufacturing
|
||
Paul
C. Smith
|
43
|
Vice
President
|
||
Gregory
D. Pontes
|
49
|
Vice
President - Manufacturing
|
||
Charles
D. Roberson
|
49
|
Vice
President – International Sales
|
||
Phillip
L. Willingham
|
52
|
Vice
President - MIS
|
||
John
J. Collins
|
67
|
Director
|
||
Eric
O. Hallman
|
66
|
Director
|
||
A.
John Kreft
|
59
|
Director
|
||
Stephen
M. Bachelder
|
59
|
Director
|
||
Duane
W. Albro
|
63
|
Director
|
ITEM
11.
|
EXECUTIVE
COMPENSATION
|
ITEM
12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
ITEM
13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
ITEM
14.
|
PRINCIPAL
ACCOUNTING FEES AND SERVICES
|
1.
|
Consolidated
Financial Statements (see Page 40 of this report which includes an index
to the consolidated financial
statements)
|
Exhibit
|
Description
|
|
3.1
|
Restated
Certificate of Incorporation of Lakeland Industries, Inc., as amended,
(Incorporated by reference to Exhibit 3.1 of Lakeland Industries, Inc.’s
Form 8-K, dated April 15, 2008)
|
|
3.2
|
Bylaws
of Lakeland Industries Inc., as amended (Incorporated by reference to
Exhibit 3.2 of Lakeland Industries, Inc.’s Form 8-K, dated April 15,
2008)
|
|
10.1
|
Amendment
dated February 1, 2007 to the original lease Agreement, dated August 1,
2001, between Southwest Parkway, Inc., as lessor, and Lakeland Industries,
Inc., as lessee (Incorporated by reference to Exhibit 10.1 of
Lakeland Industries, Inc. Form 10-K for fiscal year ended January 31, 2008
filed April 14, 2008)
|
|
10.2
|
Lakeland
Industries, Inc. Stock Option Plan (Incorporated by reference to Exhibit
10(n) of Lakeland’s Registration Statement on Form S-18 (File No. 33-7512
NY))
|
|
10.5
|
Employment
Agreement, dated April 13, 2008, between Lakeland Industries, Inc. and
Christopher J. Ryan. (filed herein)
|
|
10.6
|
Lease
Agreement, dated April 1, 2008, amendment to the original lease Agreement,
dated March 1, 2004, between Harvey Pride, Jr., as lessor, and Lakeland
Industries, Inc., as lessee for the property at 201 Pride Lane, Decatur,
Al. (Incorporated by reference to Exhibit 10.6 of Lakeland Industries,
Inc. Form 10-K for fiscal year ended January 31, 2009 filed April 15,
2009
|
|
10.9
|
Employment
Agreement, dated May 1, 2009, between Lakeland Industries, Inc. and Paul
C. Smith (Incorporated by reference to Exhibit 10.9 of Lakeland
Industries, Inc. Form 10-K for fiscal year ended January 31, 2009 filed
April 15, 2009)
|
|
10.10
|
Employment
Agreement, dated January 31, 2010, between Lakeland Industries, Inc. and
Gary Pokrassa, CPA. (Incorporated by reference to exhibit 10.1
of Lakeland Industries, Inc. Form 8-K filed January 15,
2010)
|
|
10.11
|
Employment
Agreement, dated April 16, 2007, between Lakeland Industries Inc. and
Gregory D. Willis (filed herein)
|
|
10.12
|
Asset
Purchase Agreement, dated July, 2005, between Lakeland Industries, Inc.
and Mifflin Valley, Inc. and Lease Agreement and Employment Contract
between Lakeland Industries, Inc., and Michael Gallen (Incorporated by
reference to exhibit 10.15, 10.16, and 10.17 of Lakeland Industries,
Inc.’s Quarterly Report on Form 10-Q filed September 7,
2005)
|
10.13
|
Lease
Agreement, dated January 1, 2010, between Carlos Tornquist Bertrand, as
lessor, and Lakeland Industries, Inc., as lessee for Lakeland Chile (filed
herein)
|
|
10.14
|
Lease
Agreement, dated 2006, between Michael Robert Kendall, June Jarvis and
Barnett Waddingham Trustees Limited, as lessor, and Lakeland Industries,
Inc., as lessee (Incorporated by reference to exhibit 10.22 of Lakeland
Industries, Inc.’s 10-K for the year ended January 31,
2007)
|
|
10.15
|
Modification
letter dated January 15, 2010 modifying the original Lease Agreement,
dated November 10, 2008, between Mifflin Management, as Landlord, and
Lakeland Industries, Inc., as Tenant, for the property at 312 Hendel
Street, Shillington, PA (filed herein)
|
|
10.16
|
Employment
Agreement, dated December 1, 2008, between Lakeland Industries, Inc. and
Phillip Willingham (Incorporated by reference to Exhibit 10.16 of Lakeland
Industries, Inc. Form 10-K for fiscal year ended January 31, 2009 filed
April 15, 2009)
|
|
10.17
|
Lease
Agreement dated September 1, 2009 between LIK 5 Ballow LLC, as lessor, and
Lakeland Industries, Inc., as lessee for Art Prom, LLC in Kazakhstan
(filed herein)
|
|
10.18
|
Lease
Agreement Extension letter dated December 23, 2009, extending the original
lease dated February 5, 2007, between Gotham Enterprises & Affiliates,
LLC, as lesssor, and Lakeland Industries, Inc., as lessee for Industrias
Lakeland S.A. de C.V in Mexico. (filed herein)
|
|
10.19
|
Lease
Agreement, dated August 19, 2009, between Acrilicos Palopoli S.A, as
lessor and Lakeland Argentina, SRL, as lessee (filed
herein)
|
|
10.20
|
Lease
Agreement, dated June 2, 2009, between Beijing Yeshi Enterprise Group Co.,
Ltd, as lessor, and Lakeland (Beijing) Safety Products Limited, as lessee.
(filed herein)
|
|
14.1
|
Amendment
dated February 13, 2009 to the Lakeland Industries, Inc. Code of Ethics
(Incorporated by reference to Exhibit 14.1 of Lakeland Industries, Inc.
Form 10-K for fiscal year ended January 31, 2009 filed April 15,
2009)
|
|
21.1
|
Subsidiaries
of Lakeland Industries, Inc. (wholly-owned):
Lakeland
Protective Wear, Inc.
Lakeland
Protective Real Estate
Industrias
Lakeland S.A. de C.V.
Laidlaw,
Adams & Peck, Inc. and Subsidiary (Meiyang Protective Products Co.,
Ltd.)
Weifang
Lakeland Safety Products Co., Ltd.
Qing
Dao Lakeland Protective Products Co., Ltd.
Lakeland
Industries Europe Ltd.
Lakeland
Glove and Safety Apparel Private Ltd.
Lakeland
Industries, Inc. Agencia en Chile
Lakeland
Japan, Inc.
Qualytextil,
S.A.
Lakeland
Argentina, SRL
Art
Prom, LLC
Lakeland
(Beijing) Safety Products, Co., Ltd.
Lakeland
(Hong Kong) Trading Co., Ltd.
|
|
23.1
|
Consent
of Warren, Averett, Kimbrough & Marino, LLC, Independent Registered
Public Accounting Firm
|
|
23.2
|
Consent
of Holtz, Rubenstein, Reminick LLP, Independent Registered Public
Accounting Firm
|
|
31.1
|
Certification
of Christopher J. Ryan, Chief Executive Officer, President, Secretary and
General Counsel, pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
31.2
|
Certification
of Gary Pokrassa, Chief Financial Officer, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification
of Christopher J. Ryan, Chief Executive Officer, President, Secretary and
General Counsel, pursuant to Section 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2
|
Certification
of Gary Pokrassa, Chief Financial Officer, pursuant to Section 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
LAKELAND
INDUSTRIES, INC.
|
||
By:
|
/ s / Christopher J.
Ryan
|
|
Christopher
J. Ryan,
|
||
Chief
Executive Officer
|
||
and
President
|
Name
|
Title
|
Date
|
||
/s/ Raymond J. Smith
|
Chairman
of the Board
|
April
16, 2010
|
||
Raymond
J. Smith
|
||||
/s/ Christopher J. Ryan
|
Chief
Executive Officer, President,
|
April
16, 2010
|
||
Christopher
J. Ryan
|
General
Counsel, Secretary and Director
|
|||
/s/ Gary Pokrassa
|
Chief
Financial Officer
|
April
16, 2010
|
||
Gary
Pokrassa
|
||||
/s/ Eric O. Hallman
|
Director
|
April
16, 2010
|
||
Eric
O. Hallman
|
||||
/s/ John J. Collins, Jr
|
Director
|
April
16, 2010
|
||
John
J. Collins, Jr.
|
||||
/s/ John Kreft
|
Director
|
April
16, 2010
|
||
John
Kreft
|
||||
/s/ Stephen M. Bachelder
|
Director
|
April
16, 2010
|
||
Stephen
M. Bachelder
|
||||
/s/ Duane W. Albro
|
Director
|
April
16, 2010
|
||
Duane
W. Albro
|