Lakeland Industries, Inc.

Q1 FY2027 net sales were $47.4 million, up $0.7 million or 1.4% from $46.7 million in the prior-year period. Fire Services revenue was $23.4 million, up $2.4 million or 11%, and adjusted gross margin was 33.6% versus 35.2% a year ago (and 33.5% sequentially in Q4 FY2026). Net income was approximately $0.4 million, or $0.04 per diluted share, versus a net loss of $3.9 million, or $0.41 per diluted share, last year; adjusted EBITDA excluding FX was $1.1 million versus $0.6 million, and adjusted EBITDA excluding FX margin was 2.3% versus 1.3%. Cash and cash equivalents were $17.4 million, up from $12.5 million at fiscal 2026 year-end, and operating cash flow was $5.8 million versus a use of $4.8 million a year ago. Management reiterated expectations for high single-digit revenue growth and positive cash flow from operations in fiscal 2027, with margins expected to improve through the year and visibility improving in the back half.

Jim Jenkins framed the quarter as progress against a longer transformation plan rather than a pure demand issue. He emphasized that Fire Services demand, service revenue, and industrial improvement are healthy, and said the main task is converting visible opportunities into revenue, margin, and delivery performance. He was upbeat on the NFPA-certified head-to-toe portfolio, the growing ISP footprint, and the company’s plan to strengthen margins, cash generation, and balance sheet flexibility, including an ABL refinancing effort.

Calven Swinea highlighted that adjusted gross margin was 33.6% versus 35.2% last year, and adjusted operating expenses excluding FX fell to $14.8 million from $15.9 million, helping adjusted EBITDA excluding FX improve to $1.1 million. He said the quarter included identifiable margin pressure from mix, NFPA certification and transition costs, capitalized freight release, and Fresno startup costs, which he described as timing-related or investment-related rather than structural. He also noted cash and cash equivalents of $17.4 million, borrowings of $23.8 million under the revolver, $16.2 million of available credit, compliance with covenants, and $77.7 million of inventory, down from $82.5 million at fiscal year-end mainly due to the HPFR/HiViz sale. The divestiture generated about $14 million in cash proceeds, and he said the company is working toward an asset-based lending structure for more flexibility.

Analysts pressed on how quickly the expanded Fire Services backlog can convert into revenue, and management said backlog is tied mainly to turnout gear, with manufacturing ramping in Mexico and the U.S. and order pace still running ahead of production capacity. On the service side, management said the ISP business is running about $4 million to $5 million per quarter globally, with U.S. activity a little less than half of that and room to expand through Fresno, Denver, Phoenix, Australia, and other sites. Questions also focused on margins, inventory, and capital allocation; management said Q1 margin pressure was mostly temporary, that trade show costs should ease in the second half, and that cash will first support inventory for fire growth and greenfield service expansion, while an ABL is being pursued but not rushed.