RONKONKOMA, N.Y., Dec. 21, 2015 /PRNewswire/ -- Lakeland Industries, Inc. (NASDAQ: LAKE) (the "Company"), a leading global manufacturer of protective clothing for industry, healthcare and to first responders on the federal, state and local levels, today provided an update on certain outstanding liabilities associated with its former business in Brazil which had been classified as discontinued operations.
On December 17, 2015, the Company announced that it entered into a Loan Agreement in the amount of nearly R$8.6 million (approximately US $2.3 million) the purpose of which was to permit its former subsidiary in Brazil ("Lakeland Brazil") to completely resolve, pay and close the two largest outstanding VAT (value added tax) claims under an amnesty agreement with the State of Bahia in Brazil. On December 18, 2015, the Company was notified that the amnesty agreement and payment were made. Whatever reserves may be needed against the $2.3 million loan will be reported in the fourth quarter of the current fiscal year as loss from discontinued operations and will not impact continuing operations results.
Commenting on recent developments, Christopher J. Ryan, President and Chief Executive Officer of Lakeland Industries, stated, "We are pleased that the improvement in performance from our continuing operations, the Company's strengthened balance sheet, and an outlook for continued growth have enabled the Company to have the financial fortitude to accelerate and likely resolve the remaining liabilities associated with our exit from Brazil. As previously disclosed, the Company was subject to certain liability and contingent liability exposure in connection with the prior operations of our former Brazilian subsidiary. As a result of the VAT settlement, Lakeland believes that it is unlikely to have to provide any further funds to, or in respect of the prior operations of, Lakeland Brazil, whether as payment of liabilities or contingent liabilities or as loans."
In separate developments in November 2015, Lakeland Brazil settled a labor case (the Lana dos Santos case) for R$1 million (or approximately US $250,000) which approximates the reserves on the books of the Company. Several other smaller cases also were settled for immaterial amounts. The Company does not anticipate any significant further charges for labor issues beyond what has been accrued.
About Lakeland Industries, Inc.: Lakeland Industries, Inc. (NASDAQ: LAKE) manufactures and sells a comprehensive line of safety garments and accessories for the industrial protective clothing market. The Company's products are sold by a direct sales force and through independent sales representatives to a network of over 1,000 safety and mill supply distributors. These distributors in turn supply end user industrial customers such as chemical/petrochemical, automobile, steel, glass, construction, smelting, janitorial, pharmaceutical and high technology electronics manufacturers, as well as hospitals and laboratories. In addition, Lakeland supplies federal, state, and local government agencies, fire and police departments, airport crash rescue units, the Department of Defense, the Centers for Disease Control and Prevention, and many other federal and state agencies. For more information concerning Lakeland, please visit the Company online at www.lakeland.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Forward-looking statements involve risks, uncertainties and assumptions as described from time to time in Press Releases and Forms 8-K, registration statements, quarterly and annual reports and other reports and filings filed with the Securities and Exchange Commission or made by management. All statements, other than statements of historical facts, which address Lakeland's expectations of sources or uses for capital or which express the Company's expectation for the future with respect to financial performance or operating strategies can be identified as forward-looking statements. As a result, there can be no assurance that Lakeland's future results will not be materially different from those described herein as "believed," "projected," "planned," "intended," "anticipated," "estimated" or "expected," or other words which reflect the current view of the Company with respect to future events. We caution readers that these forward-looking statements speak only as of the date hereof. The Company hereby expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company's expectations or any change in events conditions or circumstances on which such statement is based.
SOURCE Lakeland Industries, Inc.