Lakeland Industries, Inc. · NASDAQ:LAKE
Lakeland Industries — Investor Presentation (March 2020)
30 slides from Lakeland Industries's investor presentation, Mar 4, 2020
Slide 1: Investor Presentation | March 4, 2020
Y ® = af\ = Investor Presentation | March 4, 2020 Protect Your People ™ NASDAQ: LAKE Charles D. Roberson, Chief Executive Officer Allen E. Dillard, Chief Financial Officer
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 Q3FY20 Results Financials & Valuation Net sales of $27.5M, up 14% from $24.0M in Q3FY19 LTM Revenue? $104.7 million + Gross profit of $9.3M, up from $8.3M in Q3FY19 LTM EBITDA? $3.9 million + Gross margin of 33.8%, compared to 34.6% in Q3FY19 LTM Net Income? $0.2 million * Opex of $7.
Slide 4: LAKE Product Examples
LAKE Product Examples LAKE Chemical Protection Suit
Slide 5: Leading Protective Clothing Manufacturer
Leading Protective Clothing Manufacturer Disposables. Chemical Suits Wovens Fire/Reflectives Gloves 54% 18% 12% 13% 3% es by Geography: [RMD 50% of FY19 net + International: 50% of FY19 net s PCa - Chemical/petrochemical + Basic industries: auto, steel, construction, electric & gas utilities + Healt
Slide 6: Innovative Proprietary Products
Innovative Proprietary Products LAKE utilizes proprietary textiles and designs targeted to market needs and demands Focus: Patents: Us12019. Lakeland ary high margin products for stable and recurring end markets (e.g. utilitie: aticals) Propri pharmac 20 patents & I patent in application! 56 tradema
Slide 7: Optimized Global Presence
Optimized Global Presence +k Manufacturing Sites @ Sales Presence i Decatur, AL Facility GLakeland Wy =) ill La Nh fey Anqui (Weifang), China Facility Decatur, AL Jerez, Mexico Anqui (Weifang), China Buenos Aires, Argentina New Dethi, India Nahm Dinh, Vietnam Beijing, China Chongging, Decatur, AL Eu
Slide 8: Increasing Manufacturing Capacity
Increasing Manufacturing Capacity ¥ Deploying capital investment in new manufacturing facilities to build growth capacity Y India and Vietnam locations are now online and close to targeted growth markets Y Low cost structures in new locations are accretive to gross margins 150% 125% 100% Manufacturi
Slide 9: Strong Business Model
Strong Business Model Products Proprietary / value-added / higher margin COGS / Raw Materials Multi-sourced, lower priced fabrics than DuPont Gross Margin! 34.2% and expanding Sales Channels Distributors and Key End Users Customer Breadth Diversified Number of Products >800 Sales Presence 21 countri
Slide 10: Blue Chip Customers
Blue Chip Customers Distributors Airgas ©) tisher Scientific GRAINGER PTT] ron te ones wio ceriroo (vandeputte 0 Wesfarmers End Users Chevron x Rel <> ix’ Ze i é a Honeywell = nationalgrid - NY) NIPPON STEEL & SUMITOMO METAL Shell CLakeland 10
Slide 11: Favorable Industry Dynamics
Favorable Industry Dynamics Lakeland operates in a large and growing industry... Industry Tailwinds Protective Clothing Market! (S in billions) Global Economic Growth 4 ¥ Global Oil Prices in Check ¥ Strong Increase in Manufacturing 10 8 ¥ — Robust Demand from Developing Industries 6 Y Increased Glo
Slide 12: Strong Presence in Large & Fragmented U.S. Market
Strong Presence in Large & Fragmented U.S. Market U.S. PPE Products & Service Composition (2079) Size A Respiratory Protection 19% B Hand Protection 18% C Protective Clothing 15% D Head Protection 11% E Fall Protection 7% F Ear Protection 3% CLakeland ‘Source of Graphic: Houlihan Lokey 12
Slide 13: 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 + L
Slide 14: Low Seasonality in Business
Low Seasonality in Business FY2016 FY2018 Based on external sales from continuing operations, excluding intersegment sales, ‘Company fiscal year ends January 31 GLakeland 14
Slide 15: Uniquely Positioned to Respond to Global Crises
Uniquely Positioned to Respond to Global Crise LAKE Role ition Timeline Product U: Ebola $4.6 million (FY 16) Supplied suits to the United Kingdom Government 2014: Ebola n “international alth emergency”; death toll reaches 1,000 September 11, 2014: LAKE announced increase in manufacturing capacity t
Slide 16: Growth and Performance Improvement Initiatives
Growth and Performance Improvement Initiatives ¢ Investments in digital transformation — ERP implementation — Launch of new websites for nine global locations — Amazon platform in multiple countries — Online marketing strategies ¢ Investments in manufacturing — Vietnam (now largest facility for the
Slide 17: LAKE Shares Trade at Discount on Improved Financials
Att Improving/Superior Performance: LAKE Shares Trade at Discount on Improved Financials E Trades at 9.5x EV/EBITDA Based on 3Q20 Annualized Results EV/EBITDA Personal Protective Equipment 18x 30% song li illi il 2013 2016 2015 2016 2017 2018 LTH. Revenue Growth 14.6% (over prior year period) Operat
Slide 18: Significant M&A Activity
Significant M&A Activity <P satete Sippy (> SANDERSON Nov. 2015, MSR a ae The Safety Company at. 2015 ine ee wont %cnour mp NIQSEAERN pe 4 wu = @ ee Evi ioe: BY DTD te pa KKR/ = aN ests Pp 2 = GFsionaia pe aes Ansell > wicroganD Mar. 2015 EV / Revenue: 22x; EV EBITDA: 9.05 €% curosafesoluions E> Sy
Slide 19: Seasoned Management Team
Seasoned Management Team 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 May 1986. Mr. Ryan was our Exec
Slide 20: Investment Highlights
Investment Highlights Lakeland GLakeland High Growth from Proprietary/Value Added Products Strong Growth Masked by Wind Down of DuPont & Brazil Businesses Flexible Worldwide Operating Capabilities Highly Leveragable Cost Structure including Global Manufacturing Sites Leader in Product Quality and Ga
Slide 21: Financial Review
ZLakeland Protect Your People™ Financial Review 21
Slide 22: Income Statement — Fiscal Year
Income Statement — Fiscal Year (S in thousands) GLakeland Net sales Cost of goods sold Gross profit Operating expenses Operating profit Other income net Interest expense Income before taxes Income tax expense Net income Net income per common share: Basic Diluted Weighted average common shares outsta
Slide 23: EBITDA Reconciliation — Fiscal Year
EBITDA Reconciliation — Fiscal Year GLakeland Net Income to EBITDA Net Income Interest Taxes Depreciation and amortization Less Other income EBITDA EBITDA to Adjusted EBITDA (excluding non-cash expenses) Equity compensation Adjusted EBITDA (excluding non-cash expenses) Adjusted EBITDA to Adjusted Fr
Slide 24: Balance Sheet — Fiscal Year
Balance Sheet — Fiscal Year (S in thousands) GLakeland ASSETS. Current assets (Cash and cash equivalents Accounts receivable, net of allowance for doubtful accounts of $434 and $480 at January 31, 2019 and 2018, respectively Inventories Prepaid VAT and other taxes Other current assets Total current
Slide 25: Income Statement — 3Q20
Income Statement — 3Q20 (Sin thousands) Three Months Ended Nine Months Ended October 31. October 31. 2019 2018 2019 2018 Net sales S27.464 $24,009 $79,620 $73,970 Cost of goods sold Is.166 15,691 2349 46,995 Gross profit 9.298 8,318 27,271 26,975 Operating expenses 7.451 2,305 23,101 21,898 Operatin
Slide 26: EBITDA Reconciliation — 3Q20
EBITDA Reconciliation — 3Q20 Net Income to EBITDA Net Income Interest Taxes Depreciation and amortization Equity compensation EBITDA EBITDA to Free Cash Flow EBITDA Cash paid for taxes Capital expenditures Free Cash Flow GLakeland ‘Three Months Ended October 31, 2019 2018 $1,146 $501 26 25 653 494 4
Slide 27: Balance Sheet — 3Q20
Balance Sheet — 3Q20 (Sin thousands) Assets ester, amy 31 2s male ‘Cohan ent qian ss sian Acoust, of allowan frStal acoun of Sa $494 Ob 39, 2019s Foamy 39,2018 rect any reg! WAT a ter te Ene a7 Teak coment met 2As2 rp an upto wa a7 ering eight eats Dan? Detar an st ‘00 ‘Pregid VAT and terete 1% Orr
Slide 28: Appendix
ZLakeland Protect Your People™ Appendix 28
Slide 29: Strong Growth Masked By Wind-Down of DuPont & Brazil
Strong Growth Masked By Wind-Down of DuPont & Brazil (S in millions) $99.0 $96.0 $99.6 $60.0 g57.4 FY2006 FY2007--FY2008»—-FY2009--- FY2010.-- FY2011_—- FY2012.—- FY2013.-FY2014.—-FY201S_—-FY2016.— FY2017_—-FY2018—-FY2019 = DuPont & Brazil Sales = Lakeland (Excluding DuPont & Brazil) = Ebola & Bird
Slide 30: Real Estate
Real Estate oO Canada (Brantford) China (Weifang) Decatur, AL Mexico (Zacatecas) Argentina (Buenos Aires) Chile (Santiago) China (Beijing) China (Shanghai) India (Noida) Kazak! tan (Us Ronkonkoma, NY Russia (Moscow) UX. (Newport, East Yorkshire) Vietnam (Nahm Dinh) GLakeland 16,145 147,228 21,000 74
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