Q3’26 Net Sales Increased 4% to $47.6 Million Led by 31% Increase in Fire Services Products, Representing 53% of Total Revenue
Completes Strategic Acquisitions with New Operational Facility to Expand Global Fire Footprint into the Western U.S. Personal Protective Equipment Decontamination, Repair and Rental Markets
Management to Host Conference Call Today at 4:30 p.m. Eastern Time
HUNTSVILLE, Ala., Dec. 09, 2025 (GLOBE NEWSWIRE) — Lakeland Industries, Inc. (“Lakeland Fire + Safety” or “Lakeland”) (NASDAQ:LAKE), a leading global manufacturer of protective clothing and apparel for industry, healthcare and first responders, has reported its financial and operational results for its fiscal third quarter ended October 31, 2025.
Key Fiscal 2026 Third Quarter and Subsequent Financial and Operational Highlights
| Q3 Comparison | 9M Comparison | ||||||||||||||||||||||||||||||
| ($ in millions) | FY | FY | $ Change YoY | % Change YoY | 9M FY2026 | 9M FY2025 | $ Change YoY | % Change YoY | |||||||||||||||||||||||
| Q3’26 | Q3’25 | ||||||||||||||||||||||||||||||
| Net Sales | $ | 47.6 | $ | 45.8 | $ | 1.8 | 4.0 | % | $ | 146.8 | $ | 120.6 | $ | 26.2 | 21.8 | % | |||||||||||||||
| Gross Profit | $ | 14.1 | $ | 18.6 | $ | (4.5 | ) | -23.9 | % | $ | 48.6 | $ | 50.0 | $ | (1.4 | ) | -2.8 | % | |||||||||||||
| Gross Margin | 29.7 | % | 40.6 | % | — | (1,086)BPS | 33.1 | % | 41.5 | % | — | (835)BPS | |||||||||||||||||||
| Net (Loss) Income | $ | (16.0 | ) | $ | 0.1 | $ | (16.0 | ) | -18652.0 | % | $ | (19.1 | ) | $ | 0.4 | $ | (19.5 | ) | -5362.0 | % | |||||||||||
| Adjusted EBITDA | $ | (0.7 | ) | $ | 4.3 | $ | (4.9 | ) | -116.0 | % | $ | 4.2 | $ | 9.9 | $ | 5.8 | -58.0 | % | |||||||||||||
| Adjusted EBITDA ex. FX | $ | 0.2 | $ | 4.7 | $ | (4.5 | ) | -95.0 | % | $ | 5.9 | $ | 11.2 | $ | 5.4 | -48.0 | % | ||||||||||||||
Management Commentary
“The third quarter was underscored by the acquisitions of Arizona PPE Recon and California PPE Recon, with 4% net sales revenue growth to $47.6 million as we continue to adapt to the global tariff and inflation effects coupled with certification delays in the U.S. and global tender delays,” said Jim Jenkins, President, Chief Executive Officer and Executive Chairman. “Revenue during the quarter was led by a 31% increase in Fire Services to $25.3 million. A large $5.6 million three-year contract to provide advanced decontamination, managed care and maintenance services for the Hong Kong Fire Services Department also contributed materially to the quarter. The strategic acquisitions of California PPE and Arizona PPE expanded our global fire footprint into the U.S. personal protective equipment decontamination, repair and rental markets, and added approximately $5 million of annual recurring revenue. In response to evolving market conditions, we are focused on implementing operating and manufacturing efficiencies to achieve higher margins and improved free cash flow as we look toward calendar 2026 where we see global opportunities to expand sales.
“Several macroeconomics factors, which are also affecting our peers, contributed to the quarter’s results, including tariffs, freight, raw material inflation and rising supply-chain costs that drove both revenue and gross margin shortfalls. For Lakeland, revenue softness was visible across our portfolio in the U.S., Canada, Latin America, and parts of EMEA. North America faced challenges with revenue down quarter over quarter and Latin America came in below our plan due to macro-economic conditions impacted by political uncertainty. Our acquired businesses also came in below our plan due to timing, certification delays, and material flow issues, rather than underlying demand. The revenue misses directly reduced gross profit dollars, removing the operating leverage we depend on to convert volume into earnings. While revenue has grown, margin pressure has driven a decline in adjusted EBITDA as freight, mix and tariffs weighed on results. Throughput and mix inefficiencies affected costs and labor, and our mix shifted away from higher-margin categories. In total, we believe that these are all correctable issues, not structural demand problems, and we are proactively working to address our challenges. However, these challenges have affected our forecasting ability and, as a result, we are withdrawing our previously issued financial guidance for FY2026 and will not be providing financial guidance going forward.
“Looking ahead, we are focused on navigating the continued challenges from tariff uncertainties and certification and tender delays while growing top-line revenue in our fire services and industrial verticals and implementing operating and manufacturing efficiencies to achieve higher margins and improved free cash flow. We are driving a substantial inventory reduction which will release working capital and reduce carrying costs, and prioritizing liquidity and debt reduction. We believe that our proactive approach to inventory management, combined with the upcoming tender cycle, will position us for stronger execution heading into FY27. Renewed tender activity is expected to increase demand for fire services in the U.S. and contribute to improved performance at Eagle and LHD Germany, which are well-positioned to participate in upcoming meaningful tenders. We have approximately $178 million of global tender opportunities in FY27, including $38 million over $100,000 in value with high probabilities of success. We remain confident that Lakeland is well-positioned to capitalize on long-term industry and structural shifts in global safety standards. We see a clear path to scaling our business profitably, achieving record levels of revenue, margin, and free cash flow, while deepening our role as a mission-critical partner for safety professionals worldwide. We look forward to sharing additional information on our quarterly conference call,” concluded Mr. Jenkins.
Fiscal 2026 Third Quarter Financial Highlights
- Net sales were $47.6 million for the third quarter of fiscal 2026, an increase of $1.8 million or 4.0% compared to $45.8 million for the third quarter of fiscal 2025, driven by a 31% increase in Fire Services.
- Organic revenue(1) decreased 3% to $37.5 million for the third quarter of fiscal 2026, compared to $38.6 million for the third quarter of fiscal 2025. This decline was driven by delays in the U.S. Industrials oil-and-gas turnaround season, slower conversion of Fire tenders due to National Fire Protection Association (NFPA) certification standard delays and extended tender timing globally, particularly in Europe and Latin America, impacting both Industrials and Fire with Argentina experiencing significant inflation and currency pressure tied to uncertainty surrounding the October elections. Canada was also affected by tariff-related headwinds.
- Organic gross margin(1) decreased by 10.6 margin points to 32.3% for the third quarter of fiscal 2026, compared to 42.9% for the third quarter of fiscal 2025. Gross margin was pressured by a higher mix of lower-margin Jolly sales, lower sales and lower margins in Latin America, and unfavorable purchase variance resulting from higher raw material costs.
- Sales of the Fire Services product line were $25.3 million for the third quarter of fiscal 2026, an increase of $6.0 million or 31% compared to $19.3 million for the third quarter of fiscal 2025.
- Fire segment as a percentage of revenue grew to 53%.
- U.S. sales were $19.2 million for the third quarter of fiscal 2026, an increase of $3.8 million or 25% compared to $15.4 million for the third quarter of fiscal 2025.
- Europe sales, including Eagle, Jolly and LHD, were $15.2 million for the third quarter of fiscal 2026, an increase of $0.8 million or 6% compared to $14.4 million for the third quarter of fiscal 2025.
- LATAM sales were $4.2 million for the third quarter of fiscal 2026, a decrease of $0.8 million or 16% compared to $5.0 million for the third quarter of fiscal 2025.
- Asia sales were $2.9 million for the third quarter of fiscal 2026, a decrease of $0.7 million or 19% compared to $3.6 million for the third quarter of fiscal 2025.
- Gross profit for the third quarter of fiscal 2026 was $14.1 million, a decrease of $4.5 million, or 24%, compared to $18.6 million for the third quarter of fiscal 2025.
- Adjusted EBITDA excluding FX(2) for the third quarter of fiscal year 2026 was $0.2 million, a decrease of $4.5 million, or 95%, compared with $4.7 million for the third quarter of fiscal 2025.
- Adjusted EBITDA excluding FX margin in the third quarter of fiscal year 2026 was 0.5%, a decrease of 988 basis points from 10.3% in the third quarter of fiscal 2025 and a decrease of 918 basis points from 9.6% in the second quarter of fiscal 2026.
Fiscal 2026 Third Quarter and Subsequent Operational Highlights
- Received an order from the Fire and Rescue Department of Malaysia for firefighter personal protective equipment, solidifying foothold in southeast Asia and highlighting compelling global cross-selling opportunities.
- Advanced growth strategy through California PPE Recon, Inc. (“California PPE”) expansion with new 8,000 square-foot facility in Fresno, California to enable enhanced services and position business for future offerings.
- Completed acquisitions of U.S.-based Arizona PPE Recon, Inc. (“Arizona PPE”) and California PPE via a combination of cash and stock valued at approximately $9.8 million, subject to post-closing adjustments and customary holdback provisions.
- Lakeland LHD awarded an approximately $5.6 million three-year contract to provide advanced decontamination, managed care and maintenance services for the Hong Kong Fire Services Department’s (HKFSD) firefighter protective gear, one of the largest emergency response organizations in Asia.
- Completed a $6.1 million sale and partial leaseback of its Decatur, Alabama, warehouse property to an unrelated party, in connection with capital reallocation initiatives, strengthening the balance sheet and providing financial flexibility for future growth.
- Continued expense reduction in the run rate of operational expenses driving a now anticipated $5 million annualized operating expense reduction.
| (1 | ) | Organic revenue and organic gross margin are non-GAAP financial measures representing total revenue and total gross margin, each excluding the effects of recent acquisitions, which management uses to assess the growth of its legacy business. Reconciliations are provided in the tables of this press release. |
| (2 | ) | Adjusted EBITDA and Adjusted EBITDA excluding FX are non-GAAP financial measures. Reconciliations are provided in the tables of this press release. |
Fiscal 2026 Third Quarter Financial Results
Net sales were $47.6 million for the third quarter of fiscal 2026, an increase of $1.8 million or 4.0% compared to $45.8 million for the third quarter of fiscal 2025. Sales from our recent acquisitions accounted for $4.1 million of the increase, while organic sales decreased $2.3 million, or 5%, over the prior year. Sales of the Fire Services product line increased by $6.0 million year-over-year, driven primarily by $4.1 million in sales from the Arizona PPE, California PPE and Veridian acquisitions.
On a consolidated basis, for the third quarter of fiscal year 2026, domestic sales were $19.2 million, or 40% of total revenues, and international sales were $28.4 million, or 60% of total revenues. This compares with domestic sales of $15.4 million, or 34% of the total, and international sales of $30.4 million, or 66%, in the third quarter of fiscal year 2025, as our recent Veridian acquisition contributed to increased U.S. revenue in the current quarter.
Gross profit for the third quarter of fiscal 2026 was $14.1 million, a decrease of $4.4 million, or 24%, compared to $18.6 million for the third quarter of fiscal 2025. Gross profit as a percentage of net sales decreased to 29.7% for the third quarter of fiscal 2026 from 40.6% for the third quarter of fiscal 2025. The gross profit percentage decreased in the third quarter of fiscal year 2026 primarily due to higher manufacturing costs, increased tariff, labor, and freight costs and amortization of the step-up in basis of acquired inventory. Margins in the acquired businesses were impacted by increased material costs and amortization of the write-up in inventory as part of purchase accounting. Organic gross margin percentage decreased to 32.3% from 42.9% for the third quarter of fiscal 2026, primarily due to increased sales in lower-margin regions, increased freight and the impact of tariffs.
Operating expenses increased by $2.3 million, or 13%, from $17.8 million for the third quarter of fiscal 2025 to $20.1 million for the third quarter of fiscal 2026. Operating expenses increased due to the acquisitions of Arizona PPE and California PPE in September 2025 and Veridian in December 2024, which resulted in an increase of $1.1 million in operating expenses, as well as higher equity compensation and depreciation and amortization expenses. These increases were offset by reductions in restructuring costs, PFAS litigation, and professional fees. Adjusted operating expenses excluding FX increased by $0.3 million, primarily due to acquired companies’ operating expenses. Operating loss was $1.6 million for the third quarter of fiscal 2026, compared to an operating income of $0.8 million for the third quarter of fiscal 2025, primarily due to the aforementioned impacts offset by the gain on the sale of the Decatur, Alabama property. Operating margins were (3.4%) for the third quarter of fiscal 2026, as compared to 1.8% for the second quarter of fiscal 2025.
Income tax expense was $13.7 million for the third quarter of fiscal 2026, compared to an expense of $0.1 million for the third quarter of fiscal 2025. The increase in income tax expense was due to the establishment of a valuation allowance against our U.S. deferred tax assets and from the mix of jurisdictional income at differing statutory rates.
Net loss was ($16.0) million, or ($1.64) per diluted earnings per share, for the third quarter of fiscal 2026, compared to net income of $0.1 million, or $0.01 per diluted earnings per share, for the third quarter of fiscal 2025.
Adjusted EBITDA excluding FX for the third quarter of fiscal year 2026 was $0.2 million, a decrease of $4.5 million, or 95%, compared with $4.7 million for the third quarter of fiscal year 2025. The decline was driven primarily by significant revenue shortfalls in Latin America, our highest margin region, and lower than expected sales in the U.S. Fire and Industrials. Veridian, LHD and Eagle were also impacted by NFPA certification delays and slower tender conversion globally. These factors more than offset the reductions achieved in operating expenses. We are currently implementing an additional $1.3 million of cost reductions for the fourth quarter of fiscal 2026.
Adjusted EBITDA excluding FX margin in the third quarter of fiscal year 2026 was 0.5%, a decrease of 988 basis points from 10.3% in the third quarter of fiscal 2025.
Cash and cash equivalents totaled $17.2 million as of October 31, 2025, and working capital was approximately $105.9 million. Cash and cash equivalents decreased by $0.3 million and working capital increased by $4.2 million from January 31, 2025, due primarily to increases in accounts receivable and inventories.
As of October 31, 2025, we had borrowings of $33.2 million outstanding under the revolving credit facility, with an additional $6.8 million of available credit under the Loan Agreement. We sold our Decatur, Alabama, property for $6.1 million, less customary commissions and closing fees, and applied 100% of the net proceeds to repay our revolving credit facility.
Net cash used in operating activities was $17.6 million in the nine months ended October 31, 2025, compared to $12.5 million in the nine months ended October 31, 2024. The increase was driven the net loss of $19.1 million, an increase in working capital of $7.9 million and non-cash charges of $9.4 million primarily due to inventory costs, ERP implementation costs and disposals of property and equipment.
The Company’s quarterly dividend of $0.03 per share was paid on November 24, 2025, to stockholders of record as of November 17, 2025. On December 9, 2025, the Company announced that the Board is suspending the Company’s quarterly cash dividend on its common stock.
Fiscal Third Quarter 2026 Financial Results Conference Call
Lakeland management will host the conference call, followed by a question-and-answer period. The conference call will be accompanied by a presentation, which can be viewed during the webcast or accessed via the investor relations section of the Company’s website here.
To access the call, please use the following information:
| Date: | Tuesday, December 9, 2025 |
| Time: |
4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) |
| Dial-in: |
1-877-407-9208 |
| International Dial-in: |
1-201-493-6784 |
| Conference Code: |
13756485 |
| Webcast: |
Fiscal Q3 2026 Financial Results Conference Call |
A telephone replay will be available commencing approximately three hours after the call and will remain available through March 9, 2026, by dialing 1-844-512-2921 from the U.S., or 1-412-317-6671 from international locations, and entering replay pin number: 13756485. The replay can also be viewed through the webcast link above, and the presentation utilized during the call will be available via the investor relations section of the Company’s website here.
| LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES Operating Results ($000) (Unaudited) Reconciliation of GAAP Results to Non-GAAP Results |
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| October 31, | October 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net (loss) income to EBITDA | ||||||||||||||||
| Net (loss) income | $ | (15,955 | ) | $ | 86 | $ | (19,102 | ) | $ | 363 | ||||||
| Interest expense | 502 | 490 | 1,530 | 1,032 | ||||||||||||
| Income tax expense | 13,669 | 148 | 7,256 | 116 | ||||||||||||
| Depreciation and amortization | 1,210 | 1,227 | 3,615 | 3,019 | ||||||||||||
| EBITDA | $ | (574 | ) | $ | 1,950 | $ | (6,701 | ) | $ | 4,529 | ||||||
| EBITDA to Adjusted EBITDA | ||||||||||||||||
| EBITDA | $ | (574 | ) | $ | 1,950 | $ | (6,701 | ) | $ | 4,529 | ||||||
| Equity compensation(1) | 1,282 | 455 | 3,022 | 1,081 | ||||||||||||
| Other income (expense)(2) | 162 | 84 | 18 | (93 | ) | |||||||||||
| Acquisition expenses(3) | 1,371 | 497 | 2,842 | 2,182 | ||||||||||||
| Earnout revaluation(4) | — | — | — | (689 | ) | |||||||||||
| Severance and restructuring(5) | 334 | 654 | 1,359 | 1,399 | ||||||||||||
| New Monterrey, Mexico facility start-up costs(6) | 526 | 447 | 1,651 | |||||||||||||