Lakeland Industries, Inc.

Good afternoon and welcome to the Lakeland Fire and Safety Fiscal First Quarter 2027 Financial Results Conference Call. All lines have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. During today's call, we may make statements relating to our goals and objectives for future operations, including our goals for revenue and cash flow from operations for fiscal year 2027, 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 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 forwarding statements to reflect events or developments after the date of this call. On this call, we will also discuss financial measures derived from our financial statements that are not determined in accordance with US GAAP, including adjusted EBITDA, adjusted EBITDA excluding FX, adjusted EBITDA margin, adjusted EBITDA excluding FX margin, adjusted gross profit, adjusted gross margin, and adjusted operating expenses excluding FX. A reconciliation of each of the non-GAAP measures discussed on this call to the most directly comparable gap measure is presented in the supplemental slides of today's presentation. A fresh release detailing these results was issued this afternoon and is available in the Investor Relations section of our company's website, ir.lakeland.com. At this time, I would like to introduce your hosts for this call, Lakeland Fire and Safety's President, Chief Executive Officer and Executive Chairman, Jim Jenkins, Chief Financial Officer, Calvin Sweeney, Chief Commercial Officer, Global Industrials, Cameron Stokes, Chief Revenue Officer, Barry Phillips, and Executive Vice President of EMEA Fire Sales, Kevin Ray. Mr. Jenkins, the floor is yours.

Thank you, Operator, and good afternoon, everyone. Thank you for joining us today to discuss the results of our fiscal 2027 first quarter entered April 30, 2026. Our first quarter results reflect continued progress across several important areas of the business as we position Lakeland Fire and Safety for stronger performance through the balance of fiscal 2027. Calvin will walk through the financials and details shortly, so I will provide you with a brief overview here. Net sales for the quarter were 47.4 million, an increase of 0.7 million or 1.4% compared to 46.7 million in the prior year period, supported by 11% growth in fire services. Net income was approximately 0.4 million, or $0.04 per basic and diluted share, a meaningful improvement from a net loss of $3.9 million, or $0.41 per basic and diluted share in the first quarter of fiscal 2026. Adjusted EBITDA, excluding FX, improved to $1.1 million compared to $0.6 million in the prior year period, and adjusted gross margin improved modestly on a sequential basis to 33.6 percent compared to 33.5 percent in the fourth quarter of fiscal 2026. We are actively managing several identifiable timing, mix, certification, transition, and operational execution factors with clear actions underway to improve conversion of visible revenue opportunities into stronger profitability as the year progresses. Calvin will provide additional detail on our margin bridge shortly. Demand across our fire services platform remains encouraging. Our NFPA 1970-2025 certified head-to-toe fire portfolio was showcased at both FDIC 2026 And more recently at Intershoots, where customer engagement, tender activity, and sales opportunity were strong. We believe the breadth of our certified portfolio, including turnout gear, boots, gloves, hoods, and helmets, provides a meaningful competitive advantage as fire departments and distributors increasingly look for complete, reliable solutions from a global provider. Our service platform also continues to build momentum as an important recurring revenue and customer retention opportunity. Through our independent service provider, or ISP platform, we provide inspection, cleaning, repair, rental, and decontamination services for fire departments and other safety customers. We are deepening customer relationships, creating additional touch points with fire departments, and building a recurring service model that can support higher quality revenue over time. We continue to believe service can become an increasingly important differentiator for Lakeland fire and safety, not only as a revenue contributor, but as a way to strengthen retention, cross-selling, and long-term customer value. As part of this strategy, we expect to open another ISP location in Denver, Colorado, and we are expanding our Arizona PPE facility in Phoenix to support continued growth in the United States. We've also added a CO2 decontamination machine in Fresno, California to enhance our decontamination capabilities and broaden the services we can provide to fire departments and first responders. Unlike traditional wash-only service models, CO2 cleaning allows us to offer a more advanced decontamination solution designed to help remove harmful contaminants from turnout gear and related PPE while supporting faster turnaround, improved garment care, and broader customer service options. The addition of CO2 capability further differentiates our service platform and strengthens our position as a full-service fire safety partner. In addition, we are actively pursuing small strategic M&A candidates in attractive and growing geographies within North America, where we believe we can expand our service footprint, strengthen customer relationships, and build a more durable recurring revenue platform. In Europe, we continue to make meaningful progress repositioning LHD, including the relaunch of the LHD brand at Interschutz. We also appointed Sasha Mueller as LHD's Director of Sales. Sasha is a Veterans Fire and Safety Executive. We view the first and second quarters as transitional for LHD as we onboard new, highly regarded sales talent, right-size the German operation, and continue driving operational improvements. And while Middle East uncertainty has temporarily slowed project timing and frozen certain regional budgets, we remain focused on converting identified opportunities, improving margins, and positioning LHD for stronger performance in the back half of fiscal 2027. Kevin Ray will provide additional details on EMEA in a moment. EGLE also continues to be well-positioned following its recent notification of an intended award under the National Fire Chiefs Council National Fighter-Fighter PPE framework in the United Kingdom. And EGLE gloves, hoods, and turnout gear continue to gain strength in the United States, Latin America, and Asia as part of our broader global fire portfolio. More broadly, backlog across our U.S. fire business, including both Viridian and Legacy Lakeland fire products, continues to grow, and we are seeing similar fire-related opportunities develop across Latin America, Mexico, and Asia as the updated NFPA standards create additional customer interest in certified turnout gear, gloves, hoods, helmets, and boots. The breadth of this activity reinforces our confidence in the long-term growth potential of our global fire platform. On the industrial side of the business, we are seeing signs of improvement in areas such that had previously been affected by tariff uncertainty and broader macroeconomic headwinds. Our facilities in Vietnam and China, where we produce primarily industrial products, remain at capacity, supported by improving demand and better order visibility. We are encouraged by this progress, but remain disciplined in managing production, inventory, and customer demand to ensure that improved volumes translate into stronger operating performance. Our disposable business also remains an important part of the portfolio. While demand has improved in certain industrial channels, we have not yet seen a meaningful recovery in the United States, nor have we seen any meaningful uptick in oil and gas turnaround activity. We believe that our U.S. industrial business can gain traction in the latter half of the fiscal year 27, and the oil and gas business remains a future opportunity as maintenance and turnaround schedules normalize. But we are taking a measured view until order patterns become more consistent. In the meantime, we are focused on channel execution, pricing discipline, inventory alignment, and positioning the U.S. disposal business to benefit when end market demand strengthens. Separately, we are beginning to see emerging demand for certain protective products tied to Ebola preparedness planning, and we recently received related orders from hospitals in Europe, Hong Kong, and Latin America. While we view this as a positive indication of Lakeland's continued relevance in high-risk protective applications, we are treating this as an incremental opportunity rather than a core forecast driver. During the quarter, we completed the divestiture of our high-performance FR and high-vis product lines for approximately $14 million in cash proceeds. This transaction simplified the business, strengthened our balance sheet, improved liquidity, and allows us to concentrate resources more directly on our core fire services and industrial protective products businesses. The divestiture is consistent with our broader effort to reduce complexity, improve focus, and allocate capital toward the areas where we believe Lakeland has the strongest long-term growth and margin opportunities. We also strengthened our governance and executive team during the quarter with the appointment of Lee Rideau to our board of directors, the appointment of Calvin Sweeney as chief financial officer, and the appointment of Kevin Ray as executive vice president, EMEA Fire Sales. Lee previously served as chief executive officer of NASDAQ-listed Transcat, and his strategic and M&A integration experience in the industrial markets is a valuable addition to our board. As we look ahead, our priorities are clear. We are making meaningful progress in strengthening margin visibility, accountability, and operating discipline across each business, product line, and region. Our teams are focused on the key levers that drive performance, inventory management, cost control, price discipline, production efficiency, and improved sales conversion. As these actions continue to build momentum, we expect margins to improve over the course of fiscal year 27, supported by traction from tenders, new sales opportunities, and growing service revenue. We expect this momentum to begin showing through in the second quarter, although Q2 should be viewed as a stepping stone rather than the full measure of the improvement opportunity. As these actions continue to build, we expect revenue growth, margin improvement, and EBITDA expansion to become more visible in the back half of fiscal year 27, supported by inventory normalization, tender conversion, new sales opportunities, and growing service revenue. Based on our current demand trends, the strength of our FHIR services platform, the continued development of our services business, and the actions underway to improve margin and cash generation, we continue to expect high single-digit revenue growth and positive cash flow from operations in fiscal 2027. With that, I'd like to pass the call to our Chief Commercial Officer, Cameron Stokes, to provide an update on our industrial and chemical critical environment business.

Thank you, Jim. Turning now to industrial and chemical critical environment. Our industrial business showed improved momentum across most regions in the first quarter, with the U.S. and Canada the only businesses not exceeding budget. Latin America at 119% to plan and Asia at 132% to plan, delivered the strongest regional performances in Q1, attributable to disciplined commercial execution of Lakeland's safety story and tight alignment with our channel partners. The conflict in the Middle East has extended our lead times into Latin America, so we are focusing considerable efforts on mitigating any risk to our performance through tight alignment between our commercial and operations teams. Looking across product lines, chemical improved in most regions. Critical environment remains a recovery priority, but we anticipate a very strong second quarter that gets us back on plan for the year. The key actions are better forecasting, demand planning, capacity resolution, and a stronger end-user demand generation. Disposables performed well overall despite a significant U.S. miss, with pricing and portfolio actions expected to support continued momentum in Q2. Wovens remain on track from a demand standpoint, though the purchasing patterns of our largest Latin American customers have required some timing adjustments in our forecast. From an outlook standpoint, the US team is being reset around clearer expectations, stronger channel engagement, improved portfolio positioning, and a better pipeline discipline. We are building a stronger end user approach in the US, engaging departments and end users directly to create pull-through demand for our channel partners, improved specification influence, and helping our distributors win more business with Lakeland. We have strong indications that Canada will rebound in the second quarter, including a strong performance in May, and are confident Canada will achieve its budget expectations for the year. Structural changes and new leadership in Mexico and Europe continue to show strong returns as pipelines are robust and performance is becoming more consistent and predictable. Overall, we are cautiously bullish on the outlook for industrials this year, with heightened attention on accelerating the turnaround in the United States. I will now hand the call over to our Chief Revenue Officer, Barry Phillips, to provide an update on our fire services business.