LAKELAND INDUSTRIES INC
For the period ended Apr 30, 2026. Filed Jun 9, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 30, 2026 · Filed Jun 9, 2026
LAKE$8.95+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-10-31; filed 2025-12-09.
0001193125-25-312871
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-04-30; filed 2026-06-09.
0001193125-26-264001
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 84 previous paragraphs and 81 current paragraphs.
44 unchanged; 21 reworded; 16 added; 18 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
our inability to successfully identify, consummate and integrate current and future acquisitions and strategic investments or to realize anticipated cost savings and other benefits could adversely affect our business;
Current report
covenants in our credit facilities may restrict our financial and operating flexibility;
Current report
we are subject to certain U.S. and foreign anti-corruption laws and other laws and regulations as a result of our international operations;
Current report
We sold our high performance FR/AR apparel line and our high visibility clothing line on March 27, 2026.
Current report
Since early 2025, the executive branch of the U.S. government has pursued a policy of imposing tariffs on imports from many foreign countries, including countries where the Company has manufacturing facilities, such as China, India, and Vietnam, among others. In response, China and other countries announced retaliatory tariffs against certain U.S. imports. These tariffs have been, and may continue to be, announced, amended, paused, reinstated and rescinded with little or no advance notice. On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”), and the U.S. Court of International Trade (“CIT”) subsequently ordered U.S. Customs and Border Protection to process refunds of tariffs paid under the IEEPA. While we have submitted claims for refunds related to certain eligible tariffs paid, the ultimate availability, timing, and amount of any potential refunds of such tariffs remain uncertain and are subject to further legal, regulatory, and administrative developments. No tariff refund receivables have been recorded in the accompanying condensed consolidated financial statements as of April 30, 2026. However, after April 30, 2026, we began receiving refunds, but the amount received to date is not material.
Current report
After the Supreme Court’s ruling on the IEEPA tariffs, the Trump Administration immediately imposed new global tariffs pursuant to Section 122 of the Trade Act of 1974, which allows for tariffs of up to 15% for a period of up to 150 days, and indicated its intention to consider other legal options for imposing tariffs. However, in May 2026, the CIT held that the tariffs imposed under Section 122 were unlawful. This ruling has been appealed and is subject to ongoing litigation.
Current report
Conflict in the Middle East
Current report
We are continually monitoring the potential financial impact of the U.S. and Israel coordinated military operation against Iran on our operations. Our sales in the Middle East were not significant during the three months ended April 30, 2026. However, ongoing supply chain disruptions or increased freight costs resulting from the reduction in shipping volume through the Strait of Hormuz could have material adverse effects on our business.
Current report
On March 27, 2026, the Company completed the sale of certain assets associated with its High Performance Wear and High Visibility product lines.
Current report
Operating Expenses. Operating expenses decreased by $1.2 million, or 6.0%, from $20.3 million for the three months ended April 30, 2025 to $19.1 million for the three months ended April 30, 2026. The decrease was primarily due to lower freight costs, incentive compensation and professional fees, partially offset by an increase in stock based compensation and amortization expense. Operating expenses as a percentage of net sales were 40.3% for the three months ended April 30, 2026, down from 43.4% for the three months ended April 30, 2025, primarily due to the factors noted above.
Current report
Gain on Sale of Certain Assets. On March 27, 2026, the Company completed the sale of High Performance and High Visibility inventory and intellectual property to an unrelated third party for $14.0 million yielding $13.2 million in cash proceeds after inventory adjustments. The Company, for a six-month period, will manufacture and ship such inventory on behalf of the buyer; accordingly, any gain associated with such inventory and the related profit has been deferred and will be recognized over the six-month contract period.
Current report
On April 13, 2026, the Company and the Lender entered into a limited waiver (the “Limited Waiver”), pursuant to which the Lender waived the Company’s non-compliance as of January 31, 2026 with respect to two financial covenants under the Amended Loan Agreement. The $40.0 million aggregate commitment amount of the Amended Loan Agreement, maturity date of December 12, 2029, and applicable interest rate of the Amended Loan Agreement remained unchanged. The Company was in compliance with all of its debt covenants as of April 30, 2026.
Current report
The Company also agreed to certain negative covenants under the Amended Loan Agreement that are customary for credit arrangements of this type, including restrictions regarding the ability of the Company and/or its subsidiaries to conduct business, grant liens, make certain investments, and incur additional indebtedness, which negative covenants are subject to certain exceptions. Moreover, the Amended Loan Agreement contains restrictions on the Company’s ability to enter into mergers and other business combination transactions and to purchase or acquire other businesses or their assets, although the Company may purchase a business or its assets without the consent of the Lender if the aggregate amount of consideration paid for by the Company is less than $26.0 million for any individual acquisition or $36.0 million on a cumulative basis for all such acquisitions or purchases subsequent to the date of Amendment No. 5. The Amended Loan Agreement also authorizes the Company to enter into additional lines of credit or incur liabilities in connection with the acquisitions of foreign subsidiaries in foreign countries where the Lender lacks a physical presence (such amounts not to exceed $10.0 million in the aggregate).
Current report
The Amended Loan Agreement contains customary events of default that include, among other things (subject to any applicable cure periods and materiality qualifier), non-payment of principal, interest or fees, defaults under related agreements with the Lender, cross-defaults under agreements for other indebtedness, violation of covenants, inaccuracy of representations and warranties, bankruptcy and insolvency events, material judgments and material adverse change. Upon the occurrence of an event of default, the Lender may terminate all loan commitments, declare all outstanding indebtedness owing under the Amended Loan Agreement and related documents to be immediately due and payable, and may exercise its other rights and remedies provided for under the Amended Loan Agreement.
Current report
In connection with the Amended Loan Agreement, the Company entered into with the Lender (i) a security agreement dated June 25, 2020, pursuant to which the Company granted to the Lender a first priority perfected security interest in substantially all of the personal property and the intangibles of the Company, and (ii) a pledge agreement, dated June 25, 2020, pursuant to which the Company granted to the Lender a first priority perfected security interest in the stock of its subsidiaries (limited to 65% of those subsidiaries that are considered “controlled foreign subsidiaries” as set forth in the Internal Revenue Code and regulations).
Current report
As of April 30, 2026, the Company had no borrowings outstanding on the letter of credit sub-facility and borrowings of $23.8 million outstanding under the revolving credit facility, and there was $16.2 million of additional available credit under the Loan Agreement. As of January 31, 2026, the Company had no borrowings outstanding on the letter of credit sub-facility and borrowings of $28.5 million outstanding under the revolving credit facility, and there was $11.5 million of additional available credit under the Loan Agreement. The interest rate on outstanding borrowings was 5.74% at April 30, 2026 and 5.76% at January 31, 2026.
Removed paragraphs (18)
Previous report
some of our sales are to foreign buyers, which exposes us to additional risks;
Previous report
we deal in countries where corruption is an obstacle;
Previous report
we may not achieve the expected benefits from strategic acquisitions, investments, joint ventures, capital investments and other corporate transactions that we have pursued or may pursue;
Previous report
On December 16, 2024, the Company acquired U.S.-based Veridian Limited (“Veridian”) for cash consideration of approximately $26.1 million subject to post-closing adjustments and customary holdback provisions. Founded in 1992, Veridian is a leading provider of firefighter protective apparel, including fire and rescue garments, gloves and boots, with an annual revenue of approximately $21.0 million. Veridian has approximately 150 employees and is headquartered in Des Moines, Iowa.
Previous report
On July 1, 2024, the Company acquired the fire and rescue business of LHD Group Deutschland GmbH and its subsidiaries in Hong Kong and Australia (collectively, "LHD") in an all-cash transaction subject to post-closing adjustments and customary holdback provisions. Total consideration was $14.8 million, net of $1.5 million cash acquired, of which $15.5 million was paid to retire LHD’s debt and $0.8 million was paid to the seller at closing. LHD is a leading provider of firefighter turnout gear, accessories, and personal protective equipment, as well as decontamination, repair and maintenance services. LHD has 111 employees worldwide and is headquartered in Wesseling, Germany, with operations in Hong Kong and Australia.
Previous report
On February 5, 2024, the Company acquired Italy and Romania-based Jolly Scarpe S.p.A. and Jolly Scarpe Romania S.R.L. (collectively, "Jolly") in an all-cash transaction. Total consideration was $9.0 million, of which $7.5 million was paid to the seller at closing, and $1.5 million remained unpaid subject to post-closing adjustments and customary holdback provisions. Jolly is a leading designer and manufacturer of professional footwear for the firefighting, military, police, and rescue markets. The company is headquartered in Montebelluna, Italy, with manufacturing operations in Bucharest, Romania, and has 150 employees. Jolly’s primary customers are based in Europe.
Previous report
Operating Expenses. Operating expenses increased by $2.3 million, or 13.1%, from $17.8 million for the three months ended October 31, 2024 to $20.1 million for the three months ended October 31, 2025. This increase is attributable to the acquisitions of Arizona PPE and California PPE in September 2025 and Veridian in December 2024, which resulted in an increase of $1.0 million in operating expenses. Stock-based compensation expense increased $0.8 million as a number of board members, executives and senior managers voluntarily elected to receive equity compensation in lieu of a portion of their cash compensation pursuant to a program approved by the Compensation Committee and the Board under the Lakeland Industries, Inc. 2017 Equity Incentive Plan. Depreciation and amortization expenses increased $0.2 million due to the acquisitions of Veridian, Arizona PPE and California PPE. Operating expenses as a percentage of net sales were 42.2% for the three months ended October 31, 2025, up from 38.8% for the three months ended October 31, 2024, primarily due to the factors noted above.
Previous report
Gain on Sale-Leaseback Transaction. On August 27, 2025, the Company completed the sale of the Decatur, Alabama warehouse facilities to an unrelated party for $6.1 million. The sale resulted in a pre-tax gain, after selling and asset disposal costs, of approximately $4.3 million.
Previous report
Net (Loss) Income. Net loss was $(16.0) million for the three months ended October 31, 2025, compared to net income of $0.1 million for the three months ended October 31, 2024.
Previous report
Nine Months ended October 31, 2025, Compared to the Nine Months Ended October 31, 2024
Previous report
Net Sales. Net sales were $146.8 million for the nine months ended October 31, 2025 as compared to $120.6 million for the nine months ended October 31, 2024, an increase of 21.8%. Our Fire Service product line increased by $30.1 million in the period due to the impact of the acquisitions of Arizona PPE, California PPE, Veridian and LHD, which contributed $23.4 million in sales growth coupled with organic growth of $6.7 million. Sales of our High Performance product line increased $1.0 million, which was offset by declines in our Woven products of $4.3 million and Glove products of $0.3 million. The growth of our remaining product lines remained essentially unchanged.
Previous report
Gross Profit. Gross profit was $48.6 million for the nine months ended October 31, 2025, a decrease of $1.4 million, or 2.8%, from $50.0 million for the nine months ended October 31, 2024. Gross profit as a percentage of net sales decreased to 33.1% for the nine months ended October 31, 2025, from 41.4% for the nine months ended October 31, 2024 primarily due to higher manufacturing costs, increased tariff, labor, and freight costs and the amortization of the step-up in basis of acquired inventory.
Previous report
Operating Expenses. Operating expenses increased $11.1 million, or 22.8%, to $59.6 million for the nine months ended October 31, 2025 from $48.6 million for the nine months ended October 31, 2024. The acquisitions of Arizona PPE, California PPE and Veridian accounted for $3.3 million of the increase in operating expenses. Stock-based compensation expense increased $1.9 million as a number of board members, executives and senior managers voluntarily elected to receive equity compensation in lieu of a portion of their cash compensation pursuant to a program approved by the Compensation Committee and the Board under the Lakeland Industries, Inc. 2017 Equity Incentive Plan. The remaining increase was related to additional selling expenses including travel and trade shows, professional services fees and administrative expenses of $5.0 million, partially offset by a decrease in bad debt expense of $0.6 million. Operating expenses as a percentage of net sales were 40.6% for the nine months ended October 31, 2025, up from 40.3% for the nine months ended October 31, 2024.
Previous report
Gain on Sale-Leaseback Transaction. On August 27, 2025, the Company completed the sale of the Decatur, Alabama warehouse facilities to an unrelated party for $6.1 million. The sale resulted in a pre-tax gain, after selling and asset disposal costs, of approximately $4.3 million.
Previous report
Lease Impairment. The Company recorded a $3.6 million impairment primarily related to the right-of-use asset for the Monterrey, Mexico facility during the nine months ended October 31, 2025. There were no lease impairment charges recorded for the nine months ended October 31, 2024.
Previous report
Operating (Loss) Income. Operating loss was $(10.3) million for the nine months ended October 31, 2025 compared to an operating income of $1.4 million for the nine months ended October 31, 2024, due to the impacts detailed above. Operating margins were (7.0%) for the nine months ended October 31, 2025, as compared to 1.2% for the nine months ended October 31, 2024.
Previous report
The Company’s effective rate was (61.3%) for the nine months ended October 31, 2025 and 24.2% for the nine months ended October 31, 2024. The primary drivers in the change between the periods was the decrease in consolidated pre-tax income, changes in the jurisdictional mix of income and the establishment of a full valuation allowance against our U.S. deferred tax assets during the nine months ended October 31, 2025.
Previous report
Quarterly Cash Dividend. On August 1, 2025, the Board of Directors declared a quarterly cash dividend. The quarterly dividend of $0.03 per share was paid on August 22, 2025, to stockholders of record as of August 15, 2025.
Reworded paragraphs (21)
Previous wording
a terrorist attack, other geopolitical crisis, or widespread outbreak of an illness or other health issue, such as the COVID-19 pandemic, could negatively impact our domestic and/or international operations;
Current wording
a terrorist attack, other geopolitical crisis, or widespread outbreak of an illness or other health issue could negatively impact our domestic and/or international operations;
Previous wording
adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial condition or results of operations; and
Current wording
adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial condition or results of operations;
Previous wording
provisions in our restated certificate of incorporation and by-laws and Delaware law could make a merger, tender offer or proxy contest difficult;
Current wording
provisions in our restated certificate of incorporation and by-laws and Delaware law could make a merger, tender offer or proxy contest difficult; and
Previous wording
the other factors referenced in this Form 10-Q, including, without limitation, in the sections entitled “Part I – Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II – Item 1A – Risk Factors” and the factors described under “Risk Factors” disclosed in our fiscal 2025 Form 10-K.
Current wording
the other factors referenced in this Form 10-Q, including, without limitation, in the sections entitled “Part I – Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the factors described under “Risk Factors” disclosed in our fiscal 2026 Form 10-K.
Previous wording
On September 15, 2025, the Company acquired 100% of U.S.-based California PPE Recon, Inc. (“California PPE”) for a combination of approximately $2.4 million in cash consideration and $3.3 million in Company stock, subject to post-closing adjustments and customary holdback provisions. Founded in 2022, California PPE is a leading and rapidly expanding UL-certified ISP in the California firefighting services market, one of the largest fire markets in the U.S. It also provides advanced decontamination, repair, and inspection of firefighting personal protective equipment, along with rental services and sales of cleaning detergents, extractors, and dryers.
Current wording
On September 15, 2025, the Company acquired 100% of U.S.-based California PPE Recon, Inc. (“California PPE”) for a combination of approximately $2.4 million in cash consideration and 227,728 unregistered shares of the Company's common stock with an estimated fair value of $3.3 million at the date of acquisition, subject to post-closing adjustments and customary holdback provisions. Founded in 2022, California PPE is a leading and rapidly expanding UL-certified ISP in the California firefighting services market, one of the largest fire markets in the U.S. It also provides advanced decontamination, repair, and inspection of firefighting personal protective equipment, along with rental services and sales of cleaning detergents, extractors, and dryers.
Previous wording
Our net sales attributable to customers outside the U.S. were $28.4 million and $30.4 million for the three months ended October 31, 2025 and 2024, respectively, and $84.8 million and $78.5 million for the nine months ended October 31, 2025 and 2024, respectively.
Current wording
Our net sales attributable to customers outside the U.S. were $27.3 million and $26.0 million for the three months ended April 30, 2026 and 2025, respectively.
Previous wording
Recently, the executive branch of the U.S. government has pursued a policy of imposing tariffs on imports from many foreign countries, including countries where the Company has manufacturing facilities, such as China, India, and Vietnam, among others. In response, China and other countries announced retaliatory tariffs against certain U.S. imports. These tariffs have been, and may continue to be, announced, amended, paused, reinstated and rescinded with little or no advance notice. As the situation remains fluid due to the rapidly changing global trade environment, we continue to evaluate the potential implications of these actions on our business, and we are uncertain about the ultimate impact that these policies will have on our business. Thus far, however, they have increased the cost of importing certain products, which has affected our operating results and margins. Therefore, we expect that, as long as such tariffs are in effect, they will continue to affect our operating results and margins, and as a result, our historical and current gross profit margins may not be indicative of our gross profit margins for future periods. We will mitigate these factors to the best of our abilities through supply chain and manufacturing site initiatives, however where annualized cost increases cannot be eliminated, strategic market price adjustments will be implemented.
Current wording
The extent and duration of increased tariffs and the resulting impact on general economic conditions and on our business are uncertain. As the situation remains fluid due to the rapidly changing global trade environment, we continue to evaluate the potential implications of these actions on our business, and we are uncertain about the ultimate impact that these policies will have on our business. Thus far, however, they have increased the cost of importing certain products, which has affected our operating results and margins. In prior years, the Company has been able to pass along a portion of costs resulting from tariffs to its customers, but there is no guarantee that we will be able to successfully do so in the future. Therefore, we expect that, as long as such tariffs are in effect, they will continue to affect our operating results and margins, and as a result, our historical and current gross profit margins may not be indicative of our gross profit margins for future periods. We will mitigate these factors to the best of our abilities through supply chain and manufacturing site initiatives. However, where annualized cost increases cannot be eliminated, strategic market price adjustments will be implemented.
Previous wording
We are continually monitoring the potential financial impact of the Russian invasion of Ukraine on our operations. For the nine months ended October 31, 2025, sales in Russia accounted for approximately 2.2% of our consolidated sales, and sales into Ukraine were not significant. We do not have any capital assets in Russia.
Current wording
We are continually monitoring the potential financial impact of the Russian invasion of Ukraine on our operations. For the three months ended April 30, 2026, sales in Russia accounted for approximately 2.3% of our consolidated sales, and sales into Ukraine were not significant. We do not have any capital assets in Russia.
Previous wording
Net Sales. Net sales were $47.6 million for the three months ended October 31, 2025, an increase of $1.8 million or 4.0%, compared to $45.8 million for the three months ended October 31, 2024. Sales of our Fire Service product line increased $6.0 million primarily due to $4.1 million in sales from the Arizona PPE, California PPE and Veridian acquisitions, as well as continued organic growth in our portfolio of fire turnout products. Sales declined for Woven products by $2.0 million, Disposable products by $1.5 million and High Visibility products by $0.3 million.
Current wording
Net Sales. Net sales were $47.4 million for the three months ended April 30, 2026, an increase of $0.7 million or 1.4%, compared to $46.7 million for the three months ended April 30, 2025. Sales of our Fire Service product line increased $2.4 million primarily due to $1.5 million in sales from Arizona PPE and California PPE, as well as continued organic growth in our portfolio of fire turnout products. Sales increased for Disposable products by $0.5 million and sales declined for Woven products by $0.6 million, Chemical products by $0.6 million, High Performance Wear by $0.7 million and High Visibility products by $0.3 million.
Previous wording
Gross Profit. Gross profit for the three months ended October 31, 2025 was $14.1 million, a decrease of $4.5 million, or 23.9%, compared to $18.6 million for the three months ended October 31, 2024. Gross profit as a percentage of net sales decreased to 29.7% for the three-month period ended October 31, 2025, from 40.6% for the three months ended October 31, 2024. 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.
Current wording
Gross Profit. Gross profit for the three months ended April 30, 2026 was $14.9 million, a decrease of $0.8 million, or 4.9%, compared to $15.6 million for the three months ended April 30, 2025. Gross profit as a percentage of net sales decreased to 31.4% for the three months ended April 30, 2026, from 33.5% for the three months ended April 30, 2025, primarily due to increased labor, rent and certification costs partially offset by lower production and material costs.
Previous wording
Operating (Loss) Income. Operating loss was $(1.6) million for the three months ended October 31, 2025, compared to an operating income of $0.8 million for the three months ended October 31, 2024, due to the impacts detailed above. Operating margins were (3.4%) for the three months ended October 31, 2025, as compared to 1.8% for the three months ended October 31, 2024.
Current wording
Operating Income (Loss). Operating income was $2.3 million for the three months ended April 30, 2026, compared to an operating loss of $(4.6) million for the three months ended April 30, 2025, due to the impacts detailed above. Operating margins were 4.8% for the three months ended April 30, 2026, as compared to (9.9)% for the three months ended April 30, 2025.
Previous wording
Income Tax Expense. Income tax expense consists of federal, state and foreign income taxes. Income tax expense was $13.7 million for the three months ended October 31, 2025, compared to an expense of $0.1 million for the three months ended October 31, 2024. The Company's effective tax rate for the third quarter of FY26 was (597.9%) which differs from the U.S. federal statutory rate of 21% primarily due to the forecasted allocation of income for the current fiscal year, the establishment of a valuation allowance of $7.8 million against our U.S. deferred tax assets and from the mix of jurisdictional income at differing statutory rates. The Company's effective tax rate for the third quarter of FY25 was 63.1%, which differs from the U.S. federal statutory rate of 21% primarily due to rate differentials in foreign tax jurisdictions, GILTI and the impacts from the vesting of stock-based awards during the quarter.
Current wording
Income Tax Expense (Benefit). Income tax expense consists of federal, state and foreign income taxes. Income tax expense was $1.3 million for the three months ended April 30, 2026, compared to a benefit of $1.2 million for the three months ended April 30, 2025. The Company's effective tax rate for the first quarter of FY26 was 78.5% which differs from the U.S. federal statutory rate of 21% primarily as a result of a valuation allowance against the Company’s U.S. operations.
Previous wording
Net (Loss) Income. Net loss was $(19.1) million for the nine months ended October 31, 2025 and net income was $0.4 million for the nine months ended October 31, 2024.
Current wording
Net Income (Loss). Net income was $0.4 million for the three months ended April 30, 2026, compared to a net loss of $(3.9) million for the three months ended April 30, 2025.
Previous wording
At October 31, 2025, cash and cash equivalents were approximately $17.2 million, and working capital was approximately $105.9 million. Cash and cash equivalents decreased $0.3 million, and working capital increased $4.2 million from January 31, 2025 due to the balance sheet fluctuations described below.
Current wording
At April 30, 2026, cash and cash equivalents were approximately $17.4 million, and working capital was approximately $92.8 million. Cash and cash equivalents increased $4.9 million, and working capital decreased $3.4 million from January 31, 2026 due to the balance sheet fluctuations described below.
Previous wording
Of the Company’s total cash and cash equivalents of $17.2 million as of October 31, 2025, cash held in Latin America of $1.5 million, cash held in the UK of $2.8 million, cash held in Russia and Kazakhstan of $1.4 million, cash held in the EEC of $4.1 million, cash held in India of $0.5 million, cash held in Vietnam of $0.7 million, and cash held in Hong Kong of $0.8 million would not be subject to additional U.S. tax in the event such cash was repatriated due to the change in the U.S. tax law as a result of the December 22, 2017 enactment of the 2017 Tax Cuts and Jobs Act (the “Tax Act”). When the Company repatriates cash from China, of the $3.0 million balance at October 31, 2025, an additional 10% withholding tax may be incurred in that country. The Company expects to repatriate cash from China during FY 26 and in anticipation of doing so, has accrued withholding tax expense of $0.2 million as of October 31, 2025.
Current wording
Of the Company’s total cash and cash equivalents of $17.4 million as of April 30, 2026, cash held in Latin America of $1.0 million, cash held in the UK of $1.3 million, cash held in Russia and Kazakhstan of $1.8 million, cash held in the EEC of $3.9 million, cash held in India of $0.6 million, cash held in Vietnam of $0.2 million, and cash held in Hong Kong of $0.4 million would not be subject to additional U.S. tax in the event such cash was repatriated due to the change in the U.S. tax law as a result of the December 22, 2017 enactment of the 2017 Tax Cuts and Jobs Act (the “Tax Act”). When the Company repatriates cash from China, of the $3.0 million balance at April 30, 2026, an additional 10% withholding tax may be incurred in that country. The Company expects to repatriate cash from China during FY 27 and in anticipation of doing so, has accrued withholding tax expense of $0.3 million as of April 30, 2026.
Previous wording
Cash used in operations was $17.6 million due to a net loss of $(19.1) million, an increase in working capital of $7.9 million primarily due to increases in inventory and other assets, partially offset by non-cash charges of $9.4 million. Net cash used in investing activities was $1.3 million, primarily due to the acquisitions of Arizona PPE and California PPE, partially offset by proceeds from the sale of the Decatur warehouse facilities and purchases of capital equipment. Net cash provided by financing activities was $18.4 million due to $36.4 million borrowed under our credit facility to fund working capital increases and the addition of a $2.1 million working capital loan for Jolly to support their operations, offset by dividends of $0.9 million, repayment of debt facilities of $18.8 million and $0.4 million in shares returned to pay income taxes on shares vested under our equity compensation program.
Current wording
Cash provided by operations was $5.8 million. Net income of $0.4 million was adjusted for non-cash charges of $4.5 million, primarily related to the gain on sale of inventory and intellectual property associated with our high performance and high visibility product lines and an increase in operating assets and liabilities of $9.6 million primarily related to changes in deferred revenue, inventory and other assets. Net cash provided by investing activities was $10.0 million, primarily due to the proceeds from the sale of the high-visibility and high-performance workwear styles partially offset by purchases of capital equipment. Net cash used in financing activities was $5.2 million due to $14.0 million borrowed under our credit facility to fund working capital increases offset by the repayment of debt facilities of $19.1 million and $0.2 million in shares returned to pay income taxes on shares vested under our equity compensation program.
Previous wording
The Amended Loan Agreement provides the Company with a secured revolving credit facility of up to $60.0 million of borrowings from December 12, 2024 through January 31, 2026 and of up to $50.0 million of borrowings from February 1, 2026 through January 31, 2027 (in each case, such limits remain subject to a reduction to no less than $40.0 million from the net proceeds of equity issuances if the Company raises capital during such periods). The revolving credit facility includes a $10.0 million letter of credit sub-facility. On January 24, 2025, as required by the Amended Loan Agreement, the Company used certain net proceeds of its equity issuance to reduce the principal amount outstanding under the Amended Loan Agreement. As a result thereof, the maximum principal amount under the revolving credit facility was reduced to $40.0 million. The credit facility matures on December 12, 2029.
Current wording
The Amended Loan Agreement provides the Company with a secured revolving credit facility of up to $40.0 million of borrowings (giving effect to the reduction of such limit following the application of the net proceeds from the Company's January 2025 equity issuance). The revolving credit facility includes a $10.0 million letter of credit sub-facility. The credit facility matures on December 12, 2029.
Previous wording
The Company made certain representations and warranties to the Lender in the Amended Loan Agreement that are customary for credit arrangements of this type. The Company also agreed to maintain, as of the end of each fiscal quarter a minimum “basic fixed charge coverage ratio” (as defined in the Amended Loan Agreement) of at least 1.20x and a “funded debt to EBITDA ratio” (as defined in the Amended Loan Agreement) not to exceed 3.5x (with step-downs to 3.25x and 3.0x on February 1, 2026 and February 1, 2027, respectively), in each case for the trailing 12-month period ending with the applicable quarterly reporting period. In addition, the Company has agreed to maintain a springing “asset coverage ratio” (as defined in the Amended Loan Agreement) of at least 1.10x, provided that this ratio is only applicable to the extent that the maximum funded debt to EBITDA ratio exceeds 3.25x at any reporting period. The Company was in compliance with all of its debt covenants as of October 31, 2025.
Current wording
The Company made certain representations and warranties to the Lender in the Amended Loan Agreement that are customary for credit arrangements of this type. The Company also agreed to maintain, as of the end of each fiscal quarter a minimum “basic fixed charge coverage ratio” (as defined in the Amended Loan Agreement) of at least 1.20x and a “funded debt to EBITDA ratio” (as defined in the Amended Loan Agreement) not to exceed 3.5x (with step-downs to 3.25x and 3.0x on February 1, 2026 and February 1, 2027, respectively), in each case for the trailing 12-month period ending with the applicable quarterly reporting period. In addition, the Company has agreed to maintain a springing “asset coverage ratio” (as defined in the Amended Loan Agreement) of at least 1.10x, but only to the extent that the maximum funded debt to EBITDA ratio exceeds 3.25x at any reporting period. The Company was in compliance with all of its debt covenants as of April 30, 2026.
Previous wording
No shares were repurchased in the nine months ended October 31, 2025 leaving $5.0 million remaining under the share repurchase program at October 31, 2025. The share repurchase program has no expiration date but may be terminated by the Board of Directors at any time.
Current wording
No shares were repurchased in the three months ended April 30, 2026 leaving $5.0 million remaining under the share repurchase program at April 30, 2026. The share repurchase program has no expiration date but may be terminated by the Board of Directors at any time.
Previous wording
Capital Expenditures. Our capital expenditures were $0.8 million for the nine months ended October 31, 2025 which primarily relates to replacement equipment for our manufacturing sites and developed technology projects. We expect to fund the capital expenditures from our cash flows from operations. The Company may also expend funds in connection with potential acquisitions.
Current wording
Capital Expenditures. Our capital expenditures were $1.4 million for the three months ended April 30, 2026 which primarily relates to replacement equipment for our manufacturing sites and developed technology projects. We expect to fund the capital expenditures from our cash flows from operations. The Company may also expend funds in connection with potential acquisitions.
Previous wording
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of our significant accounting policies is included in Note 1 to our consolidated financial statements in our fiscal year 2025 Form 10-K. Certain of our accounting policies are considered critical, as these policies are the most important to the depiction of our financial statements and require significant, difficult, or complex judgments, often employing the use of estimates about the effects of matters that are inherently uncertain. Such policies are summarized in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in our 2025 Form 10-K. There have been no significant changes in the application of our critical accounting policies and estimates during the nine months ended October 31, 2025.
Current wording
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of our significant accounting policies is included in Note 1 to our consolidated financial statements in our fiscal year 2026 Form 10-K. Certain of our accounting policies are considered critical, as these policies are the most important to the depiction of our financial statements and require significant, difficult, or complex judgments, often employing the use of estimates about the effects of matters that are inherently uncertain. Such policies are summarized in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in our 2026 Form 10-K. There have been no significant changes in the application of our critical accounting policies and estimates during the three months ended April 30, 2026.
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Previous report — wording carried elsewhere
Income Tax Expense. Income tax expense consists of federal, state and foreign income taxes. Income tax expense was $7.3 million for the nine months ended October 31, 2025, compared to an expense of $0.1 million for the nine months ended October 31, 2024.