Lakeland Industries, Inc. · NASDAQ:LAKE
Lakeland Industries — Investor Presentation (July 2020)
31 slides from Lakeland Industries's investor presentation, Jul 15, 2020
Slide 1: Investor Presentation | July 15, 2020
Investor Presentation | July 15, 2020 Protect Your People TM NASDAQ: LAKE Charles D. Roberson, President and Chief Executive Officer Allen E. Dillard, Chief Financial Officer Protect Your People™
Slide 2: Safe Harbor Statement
Safe Harbor Statement With the exception of historical information, the statements set forth in this presentation include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risk and uncertainties. The company wishes to caution that a nu
Slide 3: Key Statistics
Key Statistics Q1FY21 Results Financials & Valuation LTM Revenue3 $128.7 million • Net sales of $45.6M, up 85% from 24.7M in Q1FY20 LTM EBITDA3 $20.3 million • Gross profit of $22.1M, compared with 1Q20 of $7.6M • Gross margin of 48.6%, compared to 30.6% in 1Q20 LTM Net Income3 $12.4 million • Opex
Slide 4: Uniquely Positioned to Respond to Global Crises
Uniquely Positioned to Respond to Global Crises Crisis Ebola Bird Flu COVID-19 (Coronavirus) LAKE Revenue Impact $4.6 million (FY16) $4.1 million (FY16) TBD (FY20/21) LAKE Role Supplied suits to the United Supplied protective clothing to Supplier to hospitals and industrial Kingdom Government DiVal
Slide 5: Coronavirus (COVID-19) Update
Coronavirus (COVID-19) Update • China Environment – Largely open for business; evaluating second wave of virus – Logistics – ocean freight remains challenging but improving – Raw materials available: prices are fluctuating • Global Environment – Demand shifting to Europe, Russia and Americas – Logis
Slide 6: Coronavirus (COVID-19) Impact
Coronavirus (COVID-19) Impact • Revenue – Impact will be spread over Q4FY20 and FY21 – Selling through distribution limits transparency into application of sales – Non-COVID related products slowly resuming order growth with economies • Manufacturing – China returned to work 4 days early and went to
Slide 7: LAKE Product Examples
LAKE Product Examples LAKE Cleanroom Suit LAKE Homeland Security Suit LAKE Disposable Suit LAKE Chemical Protection Suit 7
Slide 8: Leading Protective Clothing Manufacturer
Leading Protective Clothing Manufacturer Product Offering: Disposables Chemical Suits Wovens Fire/Reflectives Gloves % of Sales1 50% 21% 11% 15% 3% Sales by Geography: • Domestic: 52% of FY20 net sales • International: 48% of FY20 net sales Industries Served: • Chemical/petrochemical • Basic industr
Slide 9: Innovative Proprietary Products
Innovative Proprietary Products LAKE utilizes proprietary textiles and designs targeted to market needs and demands New Product Focus: • Proprietary high margin products for stable and recurring end markets (e.g. utilities, pharmaceuticals) Patents: • 20 patents & 1 patent in application1 • 56 trade
Slide 10: Optimized Global Presence
Optimized Global Presence Manufacturing Sites Decatur, AL (HQ) Jerez, Mexico Anqui (Weifang), China Buenos Aires, Argentina New Delhi, India Nahm Dinh, Vietnam Sales Presence Beijing, China Chongqing, China Decatur, AL (HQ) Europe (France, Germany, Netherlands, Poland, Spain, U.K.) Manufacturing Sit
Slide 11: Increasing Manufacturing Capacity
Increasing Manufacturing Capacity Deploying capital investment in new manufacturing facilities to build growth Key Differentiator Anqui (Weifang), China Facility capacity LAKE is unique in owning India and Vietnam locations are now online its manufacturing facilities and close to targeted growth
Slide 12: Strong Business Model
Strong Business Model Business Area Key Characteristic Products Proprietary / value-added / higher margin COGS / Raw Materials Multi-sourced, lower priced fabrics than DuPont Gross Margin1 35.2% and expanding Sales Channels Distributors and Key End Users Customer Breadth Diversified Number of Produc
Slide 13: Blue Chip Customers
Blue Chip Customers Distributors End Users 13
Slide 14: Favorable Industry Dynamics
Favorable Industry Dynamics Lakeland operates in a large and growing industry… Industry Tailwinds Protective Clothing Market1 ($ in billions) Global Economic Growth Global Oil Prices in Check Strong Increase in Manufacturing Robust Demand from Developing Industries Increased Global Focus o
Slide 15: Strong Presence in Large & Fragmented U.S. Market
Strong Presence in Large & Fragmented U.S. Market Lakeland’s US Sales are in excess of 50% of Total Sales in FY2020 Source of Graphic: Houlihan Lokey 15
Slide 16: Positioned for Further International Growth
Positioned for Further International Growth Leveraging its worldwide operating capabilities, LAKE plans deeper penetration into existing markets and selective expansion into new geographies… • Led by multinational corporations, developing countries are increasingly adopting OSHA-like standards • LAK
Slide 17: Growth and Performance Improvement Initiatives
Growth and Performance Improvement Initiatives • Investments in digital transformation – ERP implementation – CRM installation globally – Launch of new websites for nine global locations – Amazon platform in multiple countries • Investments in manufacturing – Vietnam (now largest facility for the Co
Slide 18: LAKE Shares Trade at Discount on Improving Financials
LAKE Shares Trade at Discount on Improving Financials Attractive Valuation* LAKE Improving Performance LAKE Trades at 7.0x EV/EBITDA Revenue Growth Gross Margin Based on TTM Results 14% 50% 12% 10% 40% 8% 30% 6% 4% 20% 2% 10% 0% Peers LAKE LAKE LAKE 0% '19-'21 FY19 FY20 4Q20 Peers LAKE LAKE LAKE CAG
Slide 19: Significant M&A Activity
Significant M&A Activity Notable Transactions Oct. 2015 EV / Revenue: 3.4x; EV / EBITDA: 19.5x Mar. 2015 EV / Revenue: 2.2x; EV / EBITDA: 9.0x Nov 2013 EV / Revenue: 2.1x; EV / EBITDA: 9.7x Source: Houlihan Lokey as of 5/15/20 and/or SEC public filings, company press releases and other publicly avai
Slide 20: Seasoned Management Team
Seasoned Management Team Management Bios Years at LAKE Christopher J. Ryan – Executive Chairman Upon his appointment as Executive Chairman in February 2020, Christopher J. Ryan served as our Chief Executive Officer and President since November 2003, Secretary since April 1991, and a director since M
Slide 21: Investment Highlights
Investment Highlights High Growth from Proprietary/Value Added Products 1 Strong Growth Masked by Wind Down of DuPont & Brazil Businesses Flexible Worldwide Operating Capabilities 2 Highly Leveragable Cost Structure including Global Manufacturing Sites Leader in Product Quality and Garment Innovatio
Slide 22: Financial Review
Protect Your People™ Financial Review 22
Slide 23: Income Statement – 1Q21
Income Statement – 1Q21 (UNAUDITED) ($000’s Except Share Information) ) Three Months Ended April 30, 2020 2019 Net sales $45,582 $24,684 Cost of goods sold 23,438 17,130 Gross profit 22,144 7,554 Operating expenses 9,774 7,869 Operating profit (loss) 12,370 (315) Other income (expense), net 6 (27) I
Slide 24: EBITDA Reconciliation – 1Q21
EBITDA Reconciliation – 1Q21 (UNAUDITED) ($000’s Except Share Information) ) Three Months Ended April 30, 2020 2019 Net Income (loss) to EBITDA Net Income (loss) $8,634 ($465) Interest 17 34 Taxes 3,725 89 Depreciation and amortization 453 383 Less Other income (expense), net 6 (27) EBITDA 12,823 68
Slide 25: Balance Sheet – 1Q21
Balance Sheet – 1Q21 (UNAUDITED) ($000’s Except Share Information) ) ASSETS April 30, January 31, 2020 2020 Current assets Cash and cash equivalents $23,473 $14,606 Accounts receivable, net of allowance for doubtful accounts of $647 and $497 at April 30, 2020 and January 31, 2020, respectively 25,07
Slide 26: Income Statement – Fiscal Year
Income Statement – Fiscal Year (UNAUDITED) ($000’s Except Share Information) ) Year Ended January 31, 2020 2019 Net sales $107,809 $99,011 Cost of goods sold 69,912 65,105 Gross profit 37,897 33,906 Operating expenses 32,021 30,341 Operating profit 5,876 3,565 Other income (expense), net (7) 41 Inte
Slide 27: EBITDA Reconciliation – Fiscal Year
EBITDA Reconciliation – Fiscal Year (UNAUDITED) ($000’s Except Share Information) ) Year Ended January 31, 2020 2019 Net Income to EBITDA Net Income $3,281 $1,459 Interest 116 125 Taxes 2,472 2,022 Depreciation and amortization 1,645 965 Other income (expense) (7) 41 EBITDA 7,521 4,530 EBITDA to Adj
Slide 28: Balance Sheet – Fiscal Year
Balance Sheet – Fiscal Year (UNAUDITED) ($000’s Except Share Information) ASSETS ) January 31, 2020 2019 Current assets Cash and cash equivalents $14,606 $12,831 Accounts receivable, net of allowance for doubtful accounts of $497 and $434 at January 31, 2020 and 2019, respectively 17,702 16,477 Inve
Slide 29: Appendix
Protect Your People™ Appendix 29
Slide 30: Strong Growth Masked By Wind-Down of DuPont & Brazil
Strong Growth Masked By Wind-Down of DuPont & Brazil Sales by Segment ($ in millions) $8.7 $99.0 $96.0 $99.6 $93.5 $8.7 $84.0 $86.2 $77.0 $76.1 $72.0 $60.0 $57.4 $61.3 $51.2 $54.7 $44.3 $41.7 $44.5 $35.6 $35.7 $28.1 $21.3 $19.9 $8.0 $6.2 $0.0 $0.0 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2
Slide 31: Real Estate
Real Estate Location Sq. Ft. Leased / Owned Primary Function Canada (Brantford) 22,092 Owned Sales / Warehouse 122,665 Owned Administration / Manufacturing / Warehouse / Sales China (Weifang) 16,145 Leased Warehouse 147,228 Owned Administration / Manufacturing / Sales Decatur, AL 21,000 Leased Wareh
Lakeland Industries — Investor Presentation (July 2020) on 6ix