Lakeland Industries Inc (LAKE) 2024 Q3 法說會逐字稿

Good day and welcome to the Lakeland Industries Fiscal 2024 Third Quarter Financial Results Conference Call. (Operator Instructions)

美好的一天，歡迎參加 Lakeland Industries 2024 財年第三季財務業績電話會議。 （操作員說明）

During today's call, we will make statements relating to our goals and objectives for future operations, financial and business trends, business prospects and management's expectations for future performance that constitute forward-looking statements under federal securities laws. Any such forward-looking statements reflect management's expectations based upon currently available information and are not guarantees of future performance and involve certain risks and uncertainties that are more fully described in our SEC filings. Our actual results, performance or achievements may differ materially from those expressed in or implied by such forward-looking statements. We undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this call.

在今天的電話會議中，我們將就我們未來營運的目標和目標、財務和業務趨勢、業務前景以及管理層對未來業績的預期發表聲明，這些聲明構成聯邦證券法規定的前瞻性聲明。任何此類前瞻性陳述均反映了管理層基於當前可用資訊的預期，並非對未來業績的保證，並且涉及我們向 SEC 提交的文件中更全面描述的某些風險和不確定性。我們的實際結果、績效或成就可能與此類前瞻性陳述中明示或暗示的結果、績效或成就有重大差異。我們沒有義務更新或修改任何前瞻性陳述以反映本次電話會議之後發生的事件或發展。

During today's call, we will discuss financial measures derived from our financial statements that are not determined in accordance with US GAAP, including adjusted EBITDA and adjusted EBITDA margin. A reconciliation of each of the non-GAAP measures discussed on this call to the most directly comparable GAAP measure is presented in our earnings release.

在今天的電話會議中，我們將討論從我們的財務報表中得出的並非根據美國公認會計準則確定的財務指標，包括調整後的 EBITDA 和調整後的 EBITDA 利潤率。我們的收益報告中列出了本次電話會議中討論的每項非公認會計原則指標與最直接可比較的公認會計原則指標的調節表。

At this time, I would like to introduce you to your host for this call, Lakeland Industries, Executive Chairman, Jim Jenkins. Mr. Jenkins, the floor is yours.

現在，我想向您介紹本次電話會議的主持人萊克蘭工業公司執行主席吉姆·詹金斯。詹金斯先生，請發言。

Thank you, operator. Good morning, and thank you all for joining us for our Third Quarter Fiscal 2024 earnings call. I would like to begin today's call by thanking and celebrating our Lakeland team members across the company for their commitment to delivering our strategic initiatives during the quarter. These efforts have helped drive revenue growth in key strategic markets, execute a continued shift in our revenue profile towards higher value products and carry out our small strategic and quick or SSQ acquisition strategy. As we enter the next chapter for Lakeland. I know I can speak for myself, our executive team and the Board when I say that we are excited about the Company's future supported by the strength and depth of our organization and leadership teams.

謝謝你，接線生。早安，感謝大家參加我們的 2024 財年第三季財報電話會議。在今天的電話會議開始時，我想感謝並慶祝整個公司的萊克蘭團隊成員致力於在本季度實施我們的策略計劃。這些努力幫助推動了關鍵策略市場的收入成長，將我們的收入狀況持續轉向更高價值的產品，並實施了我們的小型策略和快速或 SSQ 收購策略。當我們進入萊克蘭的下一章。我知道，當我說我們對公司的未來在我們組織和領導團隊的實力和深度的支持下感到興奮時，我可以代表我自己、我們的執行團隊和董事會說話。

Before turning to our third quarter results, I'd like to provide a brief update on our ongoing CEO search. The Board has following a very thorough vetting and selection process as engaging as executive recruiter that preliminarily identified a few candidates were eager to find the right leader, but we will be methodical and deliberate as we seek a candidate who will continue to drive our business strategy and culture. Lincoln has a solid foundation in place with exciting runway for growth in the board and I look forward to sharing more with you as the search process evolves.

在討論我們第三季的業績之前，我想先簡單介紹一下我們正在進行的執行長搜尋的最新情況。董事會遵循了非常徹底的審查和選拔流程，作為高管招聘人員，初步確定了一些渴望找到合適領導者的候選人，但我們在尋找能夠繼續推動我們業務戰略的候選人時將有條不紊、深思熟慮。和文化。林肯擁有堅實的基礎，在董事會中擁有令人興奮的成長跑道，我期待著隨著搜尋過程的發展與您分享更多資訊。

Now shifting gears to the quarter, our first third quarter results, our fiscal third quarter results were very positive and as we continue to see demand accelerate and growth within our key product lines and markets, Lakeland delivered net sales of $31.7 million, up 11.6% year over year. Notably, many of our high-value strategic product lines saw growth in the quarter, including fire, service and industrial products categories. Our Fire Service business continues to expand driven by our superior lead times versus our competitors, innovative designs from Elite, the Eagle team and onboarding successes with new distributors as expected, we also continue to see strong demand from oil and gas turnaround activity, which, as we discussed in previous quarters, is having extended season in 2023.

現在轉移到季度，我們的第一個第三季度業績，我們的第三財季業績非常積極，隨著我們繼續看到關鍵產品線和市場內的需求加速和增長，Lakeland 實現淨銷售額3170 萬美元，成長11.6%一年又一年。值得注意的是，我們的許多高價值策略產品線在本季都出現了成長，包括消防、服務和工業產品類別。與競爭對手相比，我們的交貨時間更優越，Elite、Eagle 團隊的創新設計以及新經銷商的入職成功如預期推動了我們的消防業務不斷擴大，我們還繼續看到石油和天然氣週轉活動的強勁需求，正如我們在前幾個季度中討論的那樣，2023 年的季節會延長。

Finally, we saw a significant increase in our direct to customer container business, which is a strategic focus for us. This growth highlights the significant momentum Lincoln is building in our high-value product lines, and our goal to increase penetration in high-value markets is producing positive results. We believe our recently announced Pacific helmets acquisition will further enhance our Fire Service growth.

最後，我們看到直接面向客戶的貨櫃業務顯著成長，這是我們的策略重點。這一成長凸顯了林肯在我們的高價值產品線中建立的巨大勢頭，而我們提高高價值市場滲透率的目標正在產生積極的成果。我們相信，我們最近宣布的太平洋頭盔收購將進一步促進我們消防服務的成長。

In terms of profitability, our third quarter gross margins remained strong at 42.2%. And importantly, our adjusted EBITDA grew by over $300,000 or 10.8% to $3.3 million in the quarter, even with the negative impact of foreign exchange in the quarter, which Roger will discuss later. This resulted in adjusted EBITDA margin of 10.4% compared to 10.4% last year. Adjusted for the impact of negative FX in the quarter, our adjusted EBITDA would have been approximately 14.2%.

在獲利能力方面，我們第三季的毛利率仍保持在 42.2% 的強勁水平。重要的是，我們調整後的 EBITDA 在本季度增長了 30 萬美元以上，即 10.8%，達到 330 萬美元，儘管本季度外匯帶來了負面影響，羅傑將在稍後討論這一點。調整後 EBITDA 利潤率為 10.4%，而去年為 10.4%。根據本季負外匯的影響進行調整後，我們調整後的 EBITDA 約為 14.2%。

With regard to our geographic markets, we continue to see strong demand trends in North America, particularly in the US and Latin America as well as our media markets. To a lesser extent. We also were encouraged to see increases in our India and Australian markets for the quarter as these are potential growth markets for us in North America, our sales teams continue to have success, adding new distributors and expanding our commercial reach. Additionally, our considerably shorter manufacturing lead times as compared to many of our competitors have resulted in Lincoln gaining traction as a preferred supplier in our fire service and industrial categories. As we have discussed in past calls, we continue to see our strategically located manufacturing as a competitive advantage in enabling our favorable lead times.

就我們的地理市場而言，我們繼續看到北美的強勁需求趨勢，特別是在美國和拉丁美洲以及我們的媒體市場。在較小的範圍上。我們也很高興看到本季印度和澳洲市場的成長，因為這些是我們在北美的潛在成長市場，我們的銷售團隊繼續取得成功，增加了新的經銷商並擴大了我們的商業範圍。此外，與許多競爭對手相比，我們的製造交貨時間要短得多，這使得林肯成為我們消防和工業領域的首選供應商。正如我們在過去的電話會議中所討論的那樣，我們繼續將策略性定位的製造視為實現有利交貨時間的競爭優勢。

Finally, our Latin American business continued its exceptionally strong performance from Europe as we are the market leader in several of the markets served as has been the case for the first half of the year, our Asian markets continued to perform below expectations as a result of ongoing macro economic weakness and an overhang of PPE. equipment from China's COVID-19 lockdowns. As a result, we expect our Asia Pacific business to remain below our initial projections over the last quarter of the year.

最後，我們的拉丁美洲業務繼續其歐洲市場的異常強勁表現，因為我們在幾個市場中都是市場領導者，就像今年上半年的情況一樣，我們的亞洲市場的表現繼續低於預期，因為持續的宏觀經濟疲軟和個人防護裝備的過剩。中國因 COVID-19 封鎖而採取的設備。因此，我們預計今年最後一個季度我們的亞太業務將繼續低於我們的最初預測。

Shifting gears a bit, I'd like to spend a few minutes discussing the company's small strategic and quick M&A strategy and our overall commitment to identifying and maintaining a robust acquisition pipeline with opportunities that enhance Lakeland's high value product portfolio.

稍微換個話題，我想花幾分鐘討論一下公司的小型策略和快速併購策略，以及我們對確定和維護強大的收購管道以及增強 Lakeland 高價值產品組合的機會的總體承諾。

Last week, we were pleased to announce the acquisition of Pacific helmets Pacific is a highly regarded global brand with a well-established reputation for quality and innovative design and manufacturing in the growing first responder safety helmet market. The Company has a broad range of helmet models, styles and certifications and have demonstrated the ability to develop new products and sell successfully around the world.

上週，我們很高興地宣布收購 Pacific 頭盔 Pacific 是一個備受推崇的全球品牌，在不斷增長的急救人員安全頭盔市場中在品質、創新設計和製造方面享有盛譽。該公司擁有廣泛的頭盔型號、款式和認證，並展示了開發新產品並在世界各地成功銷售的能力。

The acquisition of Pacific is a significant milestone in our efforts to build Lakeland as a premier global fire brand. As it enhances our product portfolio, it strengthens our ability to deliver exceptional fire turn-up protection offerings to our customers worldwide Pacific has one of the largest ranges of helmets, helmet models, styles and certifications of any international helmet manufacturer. The company currently produces 26-plus helmet models and has a significant number of new product innovations launching in the near future, like Lakeland's Pacific owns its own manufacturing facilities and has an in-house R&D team that enables it to customize and produce helmets specified to the customer's specific requirements more easily. Pacific helmet currently has a strong revenue and tender pipeline and global demand for safety helmets is growing. They already sell in over 40 countries. And we believe the business is further scalable through the addition of new distributors, particularly in the Northern Hemisphere in emerging markets, in which Lakeland already has a strong presence. We expect this acquisition to be immediately accretive to Vacon's bottom line results and are excited about the organic and cross-selling opportunities going forward. I'm excited to see our global sales team, execute on this opportunity, and we look forward to sharing more about the integration of the Pacific business into Lakeland platform in the future.

收購 Pacific 是我們努力將 Lakeland 打造成全球首屈一指的消防品牌的一個重要里程碑。它增強了我們的產品組合，增強了我們向全球客戶提供卓越的火災警報保護產品的能力。 Pacific 擁有國際頭盔製造商中頭盔、頭盔型號、款式和認證範圍最廣的公司之一。該公司目前生產 26 多種頭盔型號，並在不久的將來推出大量新產品創新，例如 Lakeland's Pacific 擁有自己的製造設施，並擁有一支內部研發團隊，使其能夠定制和生產指定的頭盔更容易滿足客戶的具體要求。太平洋頭盔目前擁有強勁的收入和招標管道，全球對安全帽的需求正在成長。它們已銷往 40 多個國家。我們相信，透過增加新的經銷商，業務可以進一步擴展，特別是在北半球的新興市場，萊克蘭在這些市場已經擁有強大的影響力。我們預計此次收購將立即增加 Vacon 的利潤，並對未來的有機和交叉銷售機會感到興奮。我很高興看到我們的全球銷售團隊抓住這個機會，我們期待將來分享更多有關太平洋業務整合到 Lakeland 平台的資訊。

I'd also like to welcome the Pacific team to Lakeland's family, and we're very excited to have you as part of our team and the potential for the future.

我還要歡迎太平洋團隊加入 Lakeland 的大家庭，我們非常高興您能成為我們團隊的一員，並發掘未來的潛力。

I also want to thank our team here at Lakeland for all their hard work recently.

我還要感謝萊克蘭團隊最近的辛勤工作。

In closing this deal, we continue to be very pleased with the performance of our Eagle acquisition, and we believe Eagle is an excellent template for our SSQ acquisition model. After delivering a large tender during Q2 of this year, we expect Eagle to ship another larger order in Q4. Additionally, we are continuing efforts to integrate E-Co Products into Lakeland's geographic markets as well as to accelerate the sales of even gloves, in particular, blocking hoods, Eagles, fire gloves, in particular, particle blocking hoods are progressing through the certification process and Lincoln has leveraged Eagle's in-house designers in the development of our next-generation NFPA turnout gear, which is currently underway.

在完成這筆交易時，我們仍然對 Eagle 收購的表現感到非常滿意，我們相信 Eagle 是我們 SSQ 收購模式的絕佳範本。在今年第二季交付大量招標後，我們預計 Eagle 將在第四季交付另一筆更大的訂單。此外，我們正在繼續努力將 E-Co 產品整合到萊克蘭的地域市場，並加速手套的銷售，特別是阻擋頭罩、Eagle、消防手套，特別是顆粒阻擋頭罩正在通過認證流程Lincoln 利用Eagle 的內部設計師開發了下一代NFPA 道岔裝備，目前正在進行中。

As we look to the balance of the fiscal year and beyond. I am confident in and impressed by our current management team. I am also encouraged by the exciting runway for growth this company has Lakeland is focused on solidifying our foundational business and investing our resources at high-growth geographies, which will include platform enhancements and the optimization of our operating and sales channels. Over the longer term, we are committed to building out a premier global fire brand. As I previously mentioned, this will include the release of new and innovative products additions to our global sales force and a renewed marketing focus. All of these efforts will benefit from the addition of Pacific to our existing platform.

當我們展望本財年及以後的餘額。我對我們目前的管理團隊充滿信心並印象深刻。我還對這家公司令人興奮的成長跑道感到鼓舞，Lakeland 專注於鞏固我們的基礎業務並將我們的資源投資於高成長地區，其中包括平台增強以及我們的營運和銷售管道的優化。從長遠來看，我們致力於打造全球首屈一指的消防品牌。正如我之前提到的，這將包括向我們的全球銷售團隊發布新的創新產品以及重新調整行銷重點。所有這些努力都將受益於將 Pacific 添加到我們現有的平台中。

Finally, Lincoln Lincoln is committed to expanding our products and capabilities through our small strategic and quick acquisition strategy. Continued M&A will help Lakeland's already diverse line of products, bring premier global brands onto the Lincoln platform and drive strong operating leverage through cross selling on Lincoln's vast distribution and sales network.

最後，林肯林肯致力於透過我們的小型策略和快速收購策略來擴展我們的產品和能力。持續的併購將有助於萊克蘭本已多樣化的產品線，將全球頂級品牌引入林肯平台，並透過林肯龐大的分銷和銷售網路上的交叉銷售來推動強大的營運槓桿。

I'll now pass the call to Roger to provide an overview of our financial results. Roger?

現在我將把電話轉給羅傑，概述我們的財務表現。羅傑？

Thank you, Jim, and hello, everyone. Before I get started with my comments on the financials. I'd like to remind everyone listening that we have posted investor slides that align with the explanation now present on our website at www.micron.com. likely delivered sales of $31.7 million in the third quarter ended October 31, 2020, for domestic sales were $15.1 million or 47.6% of total revenue and international sales were $16.6 million or 52.4% of total revenues. This compares with domestic sales of $14 million or 49.3% of the total and international sales of $14.4 million or 50.7% of the total in the third quarter of fiscal 2023.

謝謝吉姆，大家好。在我開始對財務狀況發表評論之前。我想提醒各位聽眾，我們已經發布了投資者幻燈片，這些幻燈片與我們網站 www.micron.com 上現有的解釋一致。截至2020 年10 月31 日的第三季度，該公司的銷售額可能為3,170 萬美元，其中國內銷售額為1,510 萬美元，佔總收入的47.6%，國際銷售額為1,660 萬美元，佔總收入的52.4%。相較之下，2023 財年第三季國內銷售額為 1,400 萬美元，佔總銷售額的 49.3%，國際銷售額為 1,440 萬美元，佔總銷售額的 50.7%。

As we noted in our earnings press release issued yesterday afternoon. We delivered strong year-over-year sales growth and continued strong profitability in terms of product mix for the quarter, our fire service category continues to increase as a percentage of Lakeland sales and represented 18% of the total revenue for the quarter compared to 12.5% in the year ago period. Disposables continued to decrease as a percentage of life and sales and represented 38% of total revenues compared to 50% in the year ago period. This reflects the efforts we've made to shift our product mix toward higher value, higher margin and less commoditized products, as we have discussed in prior calls, as well as continued weakness for this product line in Asia for the fiscal year to date, our Fire Service business is 21.4% of sales and disposables are 39%.

正如我們在昨天下午發布的收益新聞稿中指出的那樣。本季我們的產品組合實現了強勁的同比銷售成長和持續強勁的盈利能力，我們的消防服務類別在萊克蘭銷售額中所佔的比例繼續增加，佔本季度總收入的18%，而這一比例為12.5%。 % 於去年同期。一次性用品佔壽命和銷售額的百分比持續下降，佔總收入的 38%，而去年同期為 50%。正如我們在先前的電話會議中所討論的那樣，這反映了我們為將產品組合轉向更高價值、更高利潤和更少商品化的產品所做的努力，以及該產品線在本財年迄今為止在亞洲的持續疲軟，我們的消防服務業務佔銷售額的 21.4%，一次性用品業務佔 39%。

From a segment reporting standpoint, Lakeland saw strong sales growth in our US, European Canadian and Latin American markets. This growth was partially offset by softer Asian sales, particularly in China, which is a continuation of what we've seen over the last few quarters. For the current quarter, sales in the US were $15.1 million or 48% of total revenue, an increase of $1.1 million over the year ago period.

從分部報告的角度來看，萊克蘭在美國、歐洲、加拿大和拉丁美洲市場的銷售成長強勁。這一增長被亞洲銷售疲軟所部分抵消，特別是在中國，這是我們過去幾季所看到的延續。本季度，美國銷售額為 1,510 萬美元，佔總營收的 48%，比去年同期增加 110 萬美元。

Latin American sales grew $1.6 million to $4.2 million in the current quarter, an increase of 63% over Q3 of last year. All geographic regions, except for Asia, showed increases over the year ago period due to the inherent timing variability in our Fire Service business as a result of the timing of deliveries on large tenders. We have begun work closely tracking our trailing 12 months or TTM revenue. For the 12 months ended October 31, 2023, our TTM revenue was $122.4 million, an increase of $11.8 million or 11% over the trailing 12 months ended October 31, 2022. Gross profit for Q3 of this quarter was $13.4 million, an increase of $1.1 million or 9% over the year ago period. Gross profit as a percentage of net sales was 42.2% for the fiscal 2024 as compared to 43.3% a year ago. Gross profit performance in the current period was driven by increased revenue during the quarter, including sales of previously reserved excess inventory, partially offset by an adjustment for inter-company profit in ending inventory. Our gross margin percentage was affected by an adjustment for inter-company profit in ending inventory and amortization of previous year, adjustments of excess inventory for partially offset by improved product mix, lower freight costs, manufacturing cost improvements and a reduction of total inventory, including fully and partially reserved inventory.

本季拉丁美洲銷售額成長 160 萬美元至 420 萬美元，比去年第三季成長 63%。除亞洲外，所有地理區域均較上年同期成長，這是由於大型招標的交付時間導致我們的消防服務業務固有的時間變化。我們已開始密切追蹤過去 12 個月或 TTM 的收入。截至2023 年10 月31 日的12 個月，我們的TTM 收入為1.224 億美元，比截至2022 年10 月31 日的過去12 個月增加1,180 萬美元，即11%。本季第三季的毛利潤為1,340 萬美元，增加110 萬美元，比去年同期成長 9%。 2024 財年毛利佔淨銷售額的百分比為 42.2%，去年同期為 43.3%。本期毛利表現是由本季營收增加所推動的，包括銷售先前保留的過剩庫存，部分被期末庫存中公司間利潤的調整所抵銷。我們的毛利率百分比受到上年期末存貨和攤銷中公司間利潤調整、過剩庫存調整部分被產品結構改善、運輸成本降低、製造成本改善和庫存總量減少所抵消的影響，包括全部和部分保留庫存。

Lakeland reported operating profit of $3.6 million in Q3 '24 as compared to $2.1 million in Q3 of last year. As result, operating margins were 11.4% in the third quarter, up from 7.6% for the third quarter of last year. Our operating profit benefited from increases in sales and lower operating expenses. During the third quarter, Company evaluated the earn-out consideration accrual related to the Eagle acquisition and reduced this accrual by $1.5 million, which was recorded as a reduction in operating expense in the quarter. This decrease was offset by increases in currency fluctuations of $700,000, primarily related to the Argentine peso. Additionally, higher related higher sales-related costs, including increases in travel and tradeshow expenses were realized as we continue to invest in growth initiatives across the company. Lakeland delivered net income of $2.6 million or $0.35 per basic share and $0.34 per diluted share during the quarter. This compares to net income of $1.4 million or $0.19 per basic and diluted share in the prior year period. Adjusted EBITDA was $3.3 million in Q3 '24, an increase of 10.8% compared to $3 million in Q3 of '23. Adjusted EBITDA performance in the quarter was driven by higher sales, partially offset by the impact of the previously mentioned negative in FX impacts in operating expenses. Our adjusted EBITDA margin for Q3 of fiscal 2024 was 10.4% compared to the same number in the year ago period adjusted for the impact of negative FX in the quarter, our adjusted EBITDA would have been approximately 14.2% in the current quarter. On a trailing 12 month basis, Lakeland's adjusted EBITDA of $12.1 million is an increase of 21.2% versus the TTM adjusted EBITDA of $9.9 million as of October 31 of 2022.

Lakeland 報告稱，2024 年第三季營業利潤為 360 萬美元，而去年第三季為 210 萬美元。結果，第三季營業利潤率為 11.4%，高於去年第三季的 7.6%。我們的營業利潤受益於銷售額的增加和營業費用的下降。在第三季度，該公司評估了與 Eagle 收購相關的應計獲利對價，並將該應計費用減少了 150 萬美元，記錄為本季營運費用的減少。這一下降被主要與阿根廷比索相關的貨幣波動增加 70 萬美元所抵消。此外，隨著我們繼續投資於整個公司的成長計劃，與銷售相關的成本增加，包括差旅和貿易展覽費用的增加。 Lakeland 在本季實現淨利潤 260 萬美元，即每股基本收益 0.35 美元，每股稀釋收益 0.34 美元。相比之下，去年同期淨利潤為 140 萬美元，或每股基本股和稀釋股淨利 0.19 美元。 2024 年第三季調整後 EBITDA 為 330 萬美元，與 23 年第三季的 300 萬美元相比成長了 10.8%。本季調整後的 EBITDA 業績是由銷售增加所推動的，但部分被前面提到的外匯對營運費用的負面影響所抵銷。我們 2024 財年第三季的調整後 EBITDA 利潤率為 10.4%，與去年同期相比，根據本季負匯率的影響進行調整後，我們本季調整後 EBITDA 約為 14.2%。截至 2022 年 10 月 31 日，Lakeland 的調整後 EBITDA 為 1,210 萬美元，較過去 12 個月的調整後 EBITDA 成長了 21.2%，而 TTM 調整後 EBITDA 為 990 萬美元。

Now turning to the balance sheet. Lakeland ended the quarter with cash and cash equivalents of approximately $26.4 million, an increase of $1.8 million compared to our prior year-end cash balance of $24.6 million.

現在轉向資產負債表。截至本季末，Lakeland 的現金和現金等價物約為 2,640 萬美元，比上年末現金餘額 2,460 萬美元增加了 180 萬美元。

Lakeland delivered cash flow from operations during the quarter of $3.8 million, driven by profitable operations and a $2.6 million reduction of raw materials and finished goods inventory. Year to date, we have produced positive operating cash flow of $7.7 million, led by profitable operations and a $3.2 million decrease in inventory. Offsetting the operating cash flows were $3 million in investing activities, split between capital equipment and additional investment in body tracts financing activities for the fiscal year to date, primarily quarterly dividends, UK bank for payments and treasury stock purchases totaled $1.8 million.

在獲利營運以及原材料和成品庫存減少 260 萬美元的推動下，Lakeland 在本季度實現了 380 萬美元的營運現金流。今年迄今為止，我們已實現 770 萬美元的正營運現金流，這主要得益於營運獲利和庫存減少 320 萬美元。抵銷營運現金流的是 300 萬美元的投資活動，包括資本設備和本財年迄今的身體融資活動的額外投資，主要是季度股息、英國銀行支付和庫存股票購買總計 180 萬美元。

Finally, cash balances have been impacted by $1.1 million during the year to date due to currency fluctuations, primarily from the Chinese yuan in Argentine pesos. The Company continued to have no debt at the end of the quarter and has up to $25 million available from bank credit facility. Capital expenditures for the three months ended October 31, 2023 were $400,000 and $1.5 million year to date. As a reminder, we now expect CapEx to be approximately $2 million for the full fiscal year as we replace existing equipment in the normal course of operation. The Monterey expansion, which we discussed last quarter remains on pause as we continue to assess weather related damage to our leased buildings. Inventories declined $3 million quarter over quarter to $54.4 million from $57.4 million at the end of the second quarter of fiscal '24. We were pleased to see the acceleration of inventory reduction in the quarter, and this remains a top operating objective. During the quarter, we utilized various sales and marketing programs as well as price deviations, unreserved inventory to assist this effort, and we will continue to do so moving forward.

最後，由於貨幣波動（主要是阿根廷比索的人民幣），今年迄今現金餘額受到了 110 萬美元的影響。截至本季末，本公司仍沒有任何債務，並可從銀行信貸額度獲得高達 2,500 萬美元的可用資金。截至 2023 年 10 月 31 日止三個月的資本支出分別為 40 萬美元及 150 萬美元。提醒一下，我們現在預計整個財年的資本支出約為 200 萬美元，因為我們在正常營運過程中更換了現有設備。我們上季度討論的蒙特利擴建項目仍處於暫停狀態，因為我們繼續評估與天氣相關的租賃建築受損情況。庫存季減 300 萬美元，從 2024 財年第二季末的 5,740 萬美元降至 5,440 萬美元。我們很高興看到本季庫存減少速度加快，這仍然是首要營運目標。在本季度，我們利用了各種銷售和行銷計劃以及價格偏差、未預留庫存來協助這項工作，我們將繼續這樣做。

In closing, I'd like to briefly discuss two transactions that occurred subsequent to quarter end and their impact on Lakeland's financial profile versus the acquisition of New Zealand-based Pacific elements for $8.5 million, subject to post-closing adjustments and customary holdback provisions, which Jim already covered in detail. The transaction was funded through the Company's revolving credit facility and cash balance. We expect Pacific to add $7 million to $8 million of sales revenue to Lakeland in our next fiscal year and for the company to be immediately accretive to Lakeland's bottom line results.

最後，我想簡要討論季度末後發生的兩筆交易及其對 Lakeland 財務狀況的影響，以及以 850 萬美元收購新西蘭 Pacific elements 的影響，但須遵守交割後調整和慣例保留條款，吉姆已經詳細​​介紹過這一點。該交易透過公司的循環信貸額度和現金餘額提供資金。我們預計太平洋公司在下一財年將為萊克蘭增加 700 萬至 800 萬美元的銷售收入，該公司將立即增加萊克蘭的利潤。

Next is the sale of the Company's Brantford, Ontario warehouse. On November 27, 2023, the company sold its office and warehouse facility in Brantford, Ontario to an unrelated party for $4.9 million. This sale will result in a pretax gain after selling expenses of approximately $3.8 million that will be recognized in the fourth quarter of this year. Going forward, the company will utilize third party logistics providers for customer fulfillment in Canada.

接下來是出售該公司位於安大略省布蘭特福德的倉庫。 2023 年 11 月 27 日，該公司以 490 萬美元的價格將其位於安大略省布蘭特福德的辦公室和倉庫設施出售給無關方。此次出售將帶來約 380 萬美元的銷售費用後稅前收益，並將於今年第四季確認。展望未來，該公司將利用第三方物流提供者來履行加拿大的客戶需求。

And finally, on November 30, 2023, we entered into Amendment Number three to the loan agreement with Bank of America in this third amendment, the lender consented to our acquisition of the equity interest of Pacific and to permit additional indebtedness to be made available at Pacific Bank, its existing bank relationships. The amendment also waived Lakeland's borrowing base limitations through January 31, 2024. With that overview. I'd now like to turn the call over to the operator to open the call up for Q&A.

最後，2023 年 11 月 30 日，我們與美國銀行簽訂了貸款協議的第三號修正案，在第三次修正案中，貸方同意我們收購 Pacific 的股權，並允許在以下時間提供額外債務：太平洋銀行，其現有的銀行關係。該修正案也免除了 Lakeland 在 2024 年 1 月 31 日之前的借款基礎限制。我現在想將電話轉給接線員以打開電話進行問答。

(Operator Instructions) Gerry Sweeney, Roth Capital.

（操作員指令）Gerry Sweeney，Roth Capital。

Good morning, Jim, how are you guys doing?

早安，吉姆，你們好嗎？

Great.

偉大的。

Just a couple of quick questions. Obviously, fire service is doing quite well and there's a lot of talk about getting into distributors. Just curious, it's the fire or the fire gear products in all your distributors that you currently are want to be in? Or is there an opportunity to get into more meaning if you have some relationships with distributors or they are in those distributors that you have relationships with not new ones. I'm assuming sometimes it's easier to get into existing relationships, expanding float, but I think it's a combination.

只是幾個簡單的問題。顯然，消防服務做得很好，並且有很多關於進入經銷商的討論。只是好奇，您目前想要進入的是您所有經銷商中的火或消防裝備產品？或者，如果您與經銷商有一些關係，或者他們是與您有關係的經銷商，而不是新的經銷商，那麼是否有機會獲得更多意義。我認為有時更容易建立現有的關係，擴大流動資金，但我認為這是一個結合。

Yeah, I think it's a combination of both. At this point, Gerry. In particular with our North American sales team, they have done a tremendous job, some of developing additional distribution arrangements. And we are we've recently hired somebody in the West Coast to help further expand those relationships. So we've seen what I would consider more than modest success in developing our current distribution network, but also expanding it. And I give I give kudos to our North American sales team, the fire sales in particular for that. And then, of course, on the Eagle front. We've inherited a lot of relationships from them as they as they seek out bidding bidding opportunities throughout the world. And certainly with Pacific helmet, we'll we'll see the beneficiary of some very strong on APAC, some distributor relationships that they have. And then you sort of do the cross-selling with that. And and I get really excited about it because there's all kinds of opportunities that we might have had to partner with someone else to do that. Now we don't have to do that because we've got it. We've got that, that that service and product offering in-house.

是的，我認為這是兩者的結合。此時，格里.特別是我們的北美銷售團隊，他們做了很多工作，其中一些是製定額外的分銷安排。我們最近在西海岸聘請了某人來幫助進一步擴大這些關係。因此，我們在發展當前的分銷網絡方面取得了我認為不只是微不足道的成功，而且還在擴大它。我對我們的北美銷售團隊表示讚揚，尤其是減價銷售。當然，還有老鷹戰線。當他們在世界各地尋找投標機會時，我們從他們那裡繼承了很多關係。當然，對於太平洋頭盔，我們將看到亞太地區一些非常強大的公司以及他們擁有的一些經銷商關係的受益者。然後你用它來進行交叉銷售。我對此感到非常興奮，因為我們可能需要與其他人合作才能做到這一點。現在我們不必這樣做，因為我們已經擁有了。我們已經擁有了內部提供的服務和產品。

Got it. And I don't want to put words in your mouth, but sort of what I'm looking at it is distribution growth has been great. It sounds like there's still opportunities there, but you take your fire turnout gear. Our Eagle Pacific comment there is that you can layer on additional cross-selling opportunities and maybe even get into additional distributors in different regions of the world. So still some low hanging fruit maybe on the standard meters?

知道了。我不想對你說這些話，但我所看到的是發行量的成長非常好。聽起來那裡仍然有機會，但你帶上消防裝備。我們 Eagle Pacific 的評論是，您可以利用額外的交叉銷售機會，甚至可能進入世界不同地區的額外經銷商。那麼標準米上可能還有一些容易達成的目標嗎？

Look, I remain yes, I think that you're not putting words in our mouth. I think that's right on. And I think some weeks, we feel we're in the early stages of growing out this opportunity. And given that certain competitive advantages we have certainly on our sort of captive manufacturing, the additional product lines that we offer. Yes, this is a in a nine-inning game. I think we're at about the second inning.

聽著，我仍然是的，我認為你沒有把話放在我們嘴裡。我認為這是對的。我認為幾週後，我們感覺我們正處於抓住這一機會的早期階段。鑑於我們在自有製造、我們提供的附加產品線方面肯定具有一定的競爭優勢。是的，這是一場九局。我想我們已經到了第二局了。

Okay. That's very helpful. And then obviously maybe acquisitions right, totally get specific comments to absolutely make sense. Are there other opportunities out there that you would be looking for that sort of add, I don't know whether it's the fire gear or some other areas just add this cross-selling opportunity.

好的。這非常有幫助。然後顯然也許收購是對的，完全得到具體的評論才絕對有意義。是否還有其他機會讓您尋找這種添加，我不知道是消防裝備還是其他一些領域只是添加了這種交叉銷售機會。

Yeah, I mean, we see we see opportunities in industrials and in fire, being fire is where we've sort of found the low hanging fruit. We'd love to have a route. We want to round out our fire offering with other possible products so certainly, I'm certainly interested in that. And it's true in terms of the pipeline, I mean what it can mean for anybody's benefit on the call. My background is I really have been moving on a strategic plan for Transcat in the M&A circles where we have pretty much done what we're trying to do at Lakeland writers. And as I look at as I look at the two companies, there's lots of similarities there about opportunities that we can move the needle without betting the farm, right? You know, Pacific was an $8.5 million deal. We're going to get it right? I know we're going to get it right, but if we only get it a little right, we're going to be fine in fact, going to be better than five. So certainly well, is that I heard that right.

是的，我的意思是，我們看到我們在工業和火災方面看到了機會，火災是我們找到了一個容易實現的目標的地方。我們很想有一條路線。我們希望用其他可能的產品來完善我們的火祭，所以我當然對此很感興趣。就管道而言，這是真的，我的意思是這對電話會議中任何人的利益意味著什麼。我的背景是，我確實一直在為 Transcat 在併購領域制定策略計劃，我們幾乎已經完成了 Lakeland writers 想要做的事情。當我觀察這兩家公司時，我們發現有很多相似之處，我們可以在不押注農場的情況下推動發展，對嗎？你知道，太平洋航空​​是一筆 850 萬美元的交易。我們會做對嗎？我知道我們會做對的，但如果我們只做對一點，我們實際上會很好，會比五個更好。所以當然很好，我沒聽錯。

I was going to say Transcat do absolutely expanded the addressable market right through the asset management side. So that's sort of calculating here.

我想說的是，Transcat 確實透過資產管理方面擴大了潛在市場。這就是這裡的計算。

Yeah.

是的。

Maybe just a couple quick questions on disposables. Where does this go in terms of percentage of revenue. I imagine there's always some component, the sales for disposables, but some need. And I'm just curious, it's less important, there's less differentiation, et cetera. But I'm wondering where that goes longer term? And then maybe just talk about where inventory maybe of right inventory levels should be in terms of dollars on a constant basis. I know it's going to change over time, but I think so --

也許只是關於一次性用品的幾個簡單問題。就收入的百分比而言，這在哪裡？我想總是會有一些組件，即一次性用品的銷售，但也有一些需求。我只是好奇，它不那麼重要，差異化也更少，等等。但我想知道長期來看會怎麼樣？然後也許只是談論以美元為單位的持續庫存水準應該處於正確的庫存水準。我知道它會隨著時間的推移而改變，但我這麼認為——

So when this is interest, I should not make myself a fool, I'm going to have Roger answer that.

所以當這是興趣時，我不應該讓自己成為傻瓜，我會讓羅傑來回答這個問題。

I'd point out that a bit. But under Jim's and the Board's leadership, we have spent a lot of time and effort over the course of the summer and the fall. Of course, I joined in February, February 1 of this year, kind of looking at our strategy, strategic direction, how we compete and where we think we have competitive advantages and a question. We have talked about the benefits that in-house manufacturing brings. We don't want to give a message at all that we're minimizing disposables. Disposables even though it's down to 38% or so of the total revenue. That's because other revenue is growing. In addition, to course, the weakness in China that we've seen, but as we think about disposables, we don't want to give the message or the perspective. The disposables are not strategic or there are some places where it does not make sense to compete in disposables where we don't think we have a competitive advantage and we don't want to race to the bottom on pricing there. But as we think about what is strategic and how you know how best to use data where we have advantages. There are disposable products that we're very excited about, and we're going to that. We're going to continue to leverage. And a couple of things specifically that come to mind and we talked about this a bit last quarter is the of the clean room applications clean room, if not just your basic run-of-the-mill low level disposable item. We see opportunities in quick in semiconductor, the continued in health care and the Lakeland brand and the product. There's very good. The other we alluded to this a bit in our prepared remarks is our larger distributor direct to customer customer container program, and we saw an uptick in that this quarter. Our again, our large customer sales force is doing a great job of what that enables us to do. It's kind of strategically use certain disposable products to fill out a container that we ship directly to the customer. It's better margin and cost profile for us because we're not handling it and it results in more sales because they can go to one place one stop and kind of get the full range of needs that fall out that fill out the the container that gets shipped to us. So while while we see that the most growth, the most accelerated growth in growth percentages in fire and especially from an M&A perspective in fire servicing and also industrial disposables as it relates to new things like critical environment, clean room and direct-to-customer container programs is considered highly strategic for us.

我想指出一點。但在吉姆和董事會的領導下，我們在夏季和秋季花費了大量的時間和精力。當然，我是今年2月1日加入的，有點看我們的策略、策略方向、我們如何競爭以及我們認為我們在哪裡有競爭優勢，還有一個問題。我們已經討論了內部製造帶來的好處。我們根本不想傳達這樣的訊息：我們正在最大限度地減少一次性用品。儘管一次性商品佔總收入的比例已降至 38% 左右。這是因為其他收入正在成長。當然，此外，我們也看到了中國的弱點，但當我們考慮一次性用品時，我們不想給出資訊或觀點。一次性用品沒有戰略意義，或者在某些地方，我們認為自己沒有競爭優勢，而且我們不想在價格上競相壓底，所以在一次性用品領域進行競爭是沒有意義的。但當我們思考什麼是策略性的以及如何知道如何最好地在我們有優勢的地方使用數據時。我們對一些一次性產品感到非常興奮，我們將會這樣做。我們將繼續加槓桿。特別想到的幾件事，我們在上個季度討論過，是潔淨室應用潔淨室的問題，如果不僅僅是基本的普通低水平一次性物品。我們看到了半導體領域的快速發展機會、醫療保健領域的持續發展以及 Lakeland 品牌和產品的機會。有非常好的.我們在準備好的發言中提到的另一個問題是我們較大的經銷商直接面向客戶的客戶集裝箱計劃，我們看到本季度該計劃有所增加。再說一遍，我們龐大的客戶銷售團隊正在出色地完成我們能夠做的事情。這是一種策略性地使用某些一次性產品來填充我們直接運送給客戶的容器。這對我們來說是更好的利潤和成本狀況，因為我們不處理它，這會帶來更多的銷售，因為他們可以一站到達一個地方，並獲得全部的需求，從而填充到容器中運送給我們。因此，雖然我們看到火災增長最快、增長最快，特別是從消防服務和工業一次性用品的併購角度來看，因為它與關鍵環境、無塵室和直接面向客戶等新事物有關容器計劃對我們來說具有高度戰略意義。

Got it. Understood. I didn't mean disposable go all the way, but that's a great overview.

知道了。明白了。我並不是說一次性的，但這是一個很好的概述。

I'd just add, it's kind of hard to -- given the question, it's hard to say, You know what you think the percentage is going to be generally that gets down to when you see China recovering on one hand and the other hand, what the acquisitions look like because the acquisitions are going to be typically in the fire or the higher value industrial so that that revenue our channel, we just accept expect it to grow faster.

我想補充一點，考慮到這個問題，很難說，你知道你認為這個百分比一般會是多少，這取決於你一方面看到中國復甦，另一方面看到中國復甦，收購是什麼樣的，因為收購通常會發生在火熱或更高價值的工業中，因此我們的通路收入，我們只是接受期望它會成長得更快。

Understood. Yeah. Sorry, I didn't mean imply that it was going to absolutely go away, but I understand what you're saying. There's certainly --

明白了。是的。抱歉，我並不是暗示它會完全消失，但我明白你在說什麼。肯定有——

We didn't take it that way. It's just you gave us a great opportunity to kind of make it clear or how we think about the same.

我們不這麼認為。只是你給了我們一個很好的機會來澄清或我們如何看待同樣的事情。

And in a lot of ways it's math, right? A lot of ways. It's math here. You're right. I mean that as we continue to grow the higher end higher value. And we continue that we move can be that we don't we don't abandon in any way, shape or form the disposable market, but it just as a percentage of our portfolio, we just sort of naturally get a little bit smaller.

在很多方面它都是數學，對吧？有很多方法。這裡是數學。你說得對。我的意思是，隨著我們不斷發展高端更高的價值。我們繼續說，我們不會以任何方式放棄、塑造或形成一次性市場，但它只是我們投資組合的一部分，我們自然會變得更小一些。

Got it, which I don't think you just address what and the little housekeeping more for modeling, but where do you want to get inventory levels down? I think all things being equal, right? You're going to grow, continue to grow, et cetera. But just curious as to what level hedge?

明白了，我不認為您只是為了建模而解決更多的問題和小家務，但是您想在哪裡降低庫存水平？我認為一切都是平等的，對嗎？你會成長，繼續成長，等等。但只是好奇對沖水準是多少？

Gerry, I'll take that one as well. And again, it's what we'll need to kind of keep in mind is the caveat is that we we are starting to do the purchase accounting on Pacific, we will, of course, be bringing that. And so that will affect the offset inventory balance like kind of like Eagle like our fire products. These are made to order. So there's not there's not going to be significant if any finished goods that come along with Pacific. But of course, they have the raw materials and work-in-process that said we would have been very pleased at how we were able to reduce, give you the color to that. What are roughly circle that is the $58 million of inventory down to the [$54 million] level. As I think about that baseline, we would like to get another $2 million to $4 million out of that.

格里，我也拿那個。再說一次，我們需要記住的是，我們開始在太平洋上進行採購會計，我們當然會帶來這一點。因此，這將影響抵消庫存平衡，就像我們的消防產品一樣。這些是按訂單生產的。因此，即使太平洋公司附帶任何成品，也不會產生重大影響。但當然，他們擁有原材料和半成品，這表明我們對我們能夠減少的方式感到非常高興，並為您提供了顏色。大致就是將 5,800 萬美元的庫存降至 [5,400 萬美元] 水準。當我考慮這個基準時，我們希望從中再獲得 200 萬至 400 萬美元。

Okay, so you're pretty close.

好的，所以你已經很接近了。

Yeah. So now we we still have it's a call, we still have weekly. We have targets and programs underway, and it's still very much a high priority. And you can see the cash flow that's resulted in during the quarter.

是的。所以現在我們仍然有電話會議，我們仍然每週都有。我們正在製定目標和計劃，這仍然是一個高度優先事項。您可以看到該季度產生的現金流。

Got it. I appreciate.

知道了。我很欣賞。

I'll just add -- I'll editorialize on that just briefly, and that's really a testament to Roger and his team, our COO, Helena An and her team, they really have worked together on it and our sales team on forecasting and driving down that inventory number and it's become a significant priority for us. And under Roger's leadership, we're starting to see some real encouraging results kind of.

我只想補充一點——我將對此進行簡短的編輯，這確實證明了羅傑和他的團隊、我們的首席營運官、海倫娜安和她的團隊，他們確實在這方面進行了合作，我們的銷售團隊也在預測和預測方面進行了合作。降低庫存數量已成為我們的首要任務。在羅傑的領導下，我們開始看到一些真正令人鼓舞的結果。

Got it. I appreciate it, guys. Thanks for taking my call.

知道了。我很感激，夥計們。感謝您接聽我的電話。

Thanks, Gerry.

謝謝，格里。

Appreciate it.

欣賞它。

We have reached the end of the question and answer session, and I will now turn the call over to Jim for closing remarks, but thank you, operator, and thank you all for joining us on today's call.

我們的問答環節已經結束，我現在將把電話轉交給吉姆做總結發言，但謝謝接線員，也感謝大家參加今天的電話會議。

We appreciate your continued interest in legal and the global growth opportunities for our business are robust, and we look forward to building on the strong momentum Lakeland has built and sharing our successes with you in fiscal 2024. Have a great day.

我們感謝您對法律的持續關注，並且我們業務的全球成長機會強勁，我們期待在Lakeland 已建立的強勁勢頭的基礎上再接再厲，並在2024 財年與您分享我們的成功。祝您有美好的一天。

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，此時您可以掛斷電話了。感謝您的參與。