Lakeland Fire + Safety Reaches Settlement Resolving Monterrey, Mexico Facility Lease Matter

About this update from Lakeland Industries, Inc.

Settlement Fully Terminates the Lease and Concludes Related Litigation Resolution Removes Legacy Overhang and Further Simplifies the Business as the Company Remains Focused on its Core Fire Services and Industrial Operations HUNTSVILLE, Ala., July 07, 2026 (GLOBE NEWSWIRE) -- Lakeland Industries, Inc. ("Lakeland Fire + Safety" or "Lakeland") (NASDAQ: LAKE), a leading global manufacturer of protective clothing and apparel for industry, healthcare and first responders, today announced that it has reached a settlement resolving the previously disclosed matter relating to its leased manufacturing facility within the Monterrey, Mexico metropolitan area. The lease has been terminated in its entirety, and the parties have agreed to conclude the related litigation. Financial terms of the settlement were not disclosed. The facility was originally established to expand the Company's regional manufacturing capacity and to shorten delivery times to customers across Latin America and North America. As previously disclosed, structural defects at the newly constructed facility prevented the Company from utilizing the property for its intended purpose. In June 2025, the Company commenced legal proceedings against the lessor seeking rescission of the lease and the return of amounts paid under it. In connection with this matter, the Company recorded a non-cash lease impairment charge of approximately $3.6 million during the fiscal year ended January 31, 2026, related to the right-of-use asset associated with the facility. The settlement brings the matter to a close. The resolution eliminates the Company's remaining obligations under the lease, as well as the ongoing legal and administrative costs associated with the dispute. "Resolving the Monterrey matter removes a legacy overhang and marks another step in our ongoing effort to simplify the business and strengthen our financial foundation," said Jim Jenkins, President and Chief Executive Officer of Lakeland Fire + Safety. "This facility was never able to serve its intended purpose, and reaching a resolution on terms that carry no penalty to the Company allows us to put the matter behind us and concentrate our resources on our core Fire product and services and Industrial protective products businesses. Together with the divestiture of our HPFR and HiViz product lines and the sale-leaseback of our Decatur, Alabama facility, this settlement reflects our continued focus on a simpler, more disciplined operating model." "With the right-of-use asset associated with this facility already impaired, this settlement removes the remaining lease obligations and the carrying and legal costs tied to the dispute," said J. Calven Swinea, Chief Financial Officer of Lakeland Fire + Safety. "Any remaining financial effects of the settlement will be reflected in our results for the period in which the matter is finalized. Eliminating this liability is consistent with the steps we are taking to improve utilization, reduce complexity, and strengthen our balance sheet."

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