Lakeland Industries’ FY25 10‑K Deep Dive: A Transitional Year of Growth, Integrations and Challenges

Lakeland Industries, Inc. (NASDAQ: LAKE), doing business as Lakeland Fire + Safety, supplies personal protective equipment (PPE) across global industrial, clean‑room and fire‑services markets. FY25 (fiscal year ended January 31, 2025) was a transformational year: four strategic acquisitions expanded its fire‑services portfolio head to toe; a $46 million equity raise fortified the balance sheet; and an ERP implementation launched to professionalize global operations. Yet, heavy integration costs, one‑time impairments and continued macro volatility produced an operating and net loss in FY25. This blog answers:

Warren.AI 💰 6.0 / 10

1. Who is Lakeland? 2. How did the business perform in FY25 vs. FY24? 3. What did the acquisitions add? 4. How healthy is the balance sheet and liquidity? 5. Where are the risks and catalysts? 6. Investment Score: 6/10

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1. Business Overview

Founded: 1986, Delaware ("Lakeland Fire + Safety").
Headquarters: Huntsville, AL, USA
Global Footprint: 17 manufacturing sites in 8 countries (USA, Canada, Mexico, China, Romania, Vietnam, India, New Zealand) + 23 sales territories.
End Markets: Chemical, petrochemical, utilities, clean‑room, manufacturing, pharmaceuticals—and municipal & industrial fire departments.

Product lines:

• Disposable PPE: Coveralls, lab coats, hoods (MicroMax®, CleanMax®).
• High‑end chemical suits: NFPA/CE‑certified (ChemMax®, Interceptor).
• Durable woven garments: Launderable FR/AR apparel.
• Fire‑services: Turnout gear, boots, gloves, helmets.
• High‑performance wear & high‑visibility: Moisture‑wicking FR, ANSI‑certified reflective.

2. Financial Highlights (FY25 vs. FY24)

| Metric | FY25 | FY24 | %Δ | |-------:|-----:|-----:|-----:| | Net Sales | $167.2 M | $124.7 M | +34% | | Gross Margin | 41.1% | 41.1% | — | | Operating Expense | $67.4 M | $45.2 M | +49% | | Operating (Loss) | $(9.3) M | +$6.0 M| — | | Net (Loss) | $(18.1) M | +$5.4 M| — | | EPS (diluted) | $(2.43) | +$0.72 | — |

Revenue Drivers

• Fire‑services: +$36.5 M (137.7%)—acquisitions of Pacific, Jolly, LHD & Veridian.
• Wovens/Disposables/Chemical: +$8.0 M—healthy industrial order flow.
• High‑visibility: –$1.2 M—soft utility & telecom markets.

Margin & Costs

• Cost of Goods Sold up in line with revenues.
• OpEx Increase:
• Acquisition‑related integration costs: $3.7 M
• FX remeasurement (Argentine peso): $2.3 M
• Restructuring: $2.2 M
• PFAS litigation reserve: $0.7 M
• Facility start‑up (Monterrey plant): $1.3 M
• One‑time write‑downs:
• Goodwill impairment: $10.5 M (Pacific & Eagle reporting units)
• Equity‑method investment (Bodytrak): $7.6 M

Profit & Loss Summary

• Operating: Loss of $9.3 M vs. income of $6.0 M in FY24.
• Other: FY24 had a $3.8 M gain on sale of Canadian property; FY25 had none.
• Net: Loss of $18.1 M vs. +$5.4 M in FY24.

3. The Acquisitions

1. Pacific Helmets (Nov 2023, ALL‑cash, ~$6.3 M):

• Leading public‑safety helmet designer (structural, wildland)
• Adds design & supply capabilities

1. Jolly Scarpe (Feb 2024, ~$9.0 M):

• Italy & Romania fire & technical footwear
• Annual revenue ~$10 M; 150 employees

1. LHD Group (July 2024, ~$14.8 M net):

• German‑based manufacturer & service provider for rescue gear
• Access to servicing/repair margins

1. Veridian (Dec 2024, ~$26.1 M net):

• Des Moines‑based turnout gear, boots & gloves
• +$21 M pro forma revenue; 150 employees

Collectively, these acquisitions added $68 M+ in trailing 12‑month revenues, accelerated entry into key European markets, and built a head‑to‑toe fire‑services offering. They drove the +34% sales growth in FY25. Goodwill & Intangibles: Arising from assembled workforces, cross‑sell & back‑office synergies, brand/trademarks.
• Goodwill at 1/31/25: $16.2 M
• Identifiable finite‑lived intangibles: $25.5 M
Impairments: Pacific & Eagle reporting units amortized; partial ETP impairment in Q4.

4. Cash, Liquidity & Capital

| | Jan 31, 2025 | Jan 31, 2024 | |-----------|--------:|--------:| | Cash & Equivalents | $17.5 M | $25.2 M | | Working Capital |$101.6 M | $83.2 M | | Revolver Outstanding | $13.2 M | $1.0 M | | Revolver Capacity | $26.8 M | $38.0 M | | Total Debt | $16.4 M | $ 1.7 M |

Financing Highlights

• Equity Raise: $46.2 M net in January 2025 at $20.68/share
• Immediately paid down revolver borrowings
• Credit Facility (Bank of America): $40 M revolving, matures 2029
• SOFR +1.25–2.00% margin (6.47% at 1/31/25)
• Covenants: funded debt/EBITDA ≤ 3.5x; fixed charge coverage ≥ 1.2x
• Long‑term Debt: $1.7 M in equipment notes in NZ, Romania, US
• CapEx: $1.5 M in FY25
• FY26 guidance: ~$3 M for ERP, production tech & fire‑services expansion

Cash Flow Uses

Operating: –$15.9 M, driven by inventory build for FY26 growth
Investing: –$47.7 M (primarily acquisitions)
Financing: +$56.6 M (drawing on revolver & equity raise)

5. Risk Factors & Outlook

Risk profile remains elevated:

• International operations: China & Vietnam manufacturing—tariffs, politics, PRC IP rules, currency risks
• PFAS litigation: Firefighters alleging exposure in turnout gear—part of MDL in SC
• Systems migration: Multi‑year SAP ERP implementation—transition risk, internal controls
• Acquisition execution: Integration costs, cultural alignment, goodwill impairments
• Seasonality: Utility maintenance cycle (Q2–Q3) and first‑responder budgets
• Concentration: Top eight distributors < 15% sales, but market fragmentation remains high

Outlook & Opportunities:

• Leveraging global installed base for cross‑sell: fire‑services, chemical suits, disposables
• Higher‑margin after‑sales (gear services & repairs) through LHD
• Fire‑services roll‑ups: head‑to‑toe solution under one brand
• ERP rollout: improved margins, working capital efficiency & global reporting
• Wage inflation & raw material costs can be mitigated via automation, sourcing diversity

Catalysts:

• Successful ERP Phase I (FY26), further margin improvement
• Realization of purchase price synergies in European fire gear & helmets
• PFAS litigation resolution
• Continued cross‑sell traction in utilities & clean‑room markets

6. Investment Score: 6/10

Pros: Defensive PPE end markets, global footprint, brand equities, acquisition pipeline, improved balance sheet
Cons: Execution risk on ERP & integrations, one‑time cash burn, litigation exposure, FX/tariff volatility

Conclusion: Lakeland is investing for growth and has a compelling fire‑services strategy. However, FY25 was a step back from profitability. Execution on its ERP, synergy capture and PFAS resolution in FY26–FY27 will be pivotal. At 6/10, we remain cautiously optimistic.