Lakeland Industries - Earnings Call - Q2 2021

Transcript

Speaker 0

Good day, ladies and gentlemen, and welcome to the Lakeland Industries Incorporated Second Quarter Fiscal Year twenty twenty one Financials and Conduct Conference Call. All lines have been placed on a listen only mode and the floor will be opened for questions and comments following the presentation. Safe Harbor statements 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 eight ks, 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 addresses Lakeland's expectations of sources or uses for capital or which express the company's expectations 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 in other words, which reflect the current view of the company's respect for 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.

Speaker 1

Okay. This is Charlie Robertson. I'm CEO of Lakeland Industries. Good afternoon to you all, and thank you for joining our fiscal twenty twenty one second quarter financial results conference call. I'm joined here today by Lakeland's Chief Financial Officer, Alan Dillard.

Over the past two quarters of hosting Lakeland Industries earnings conference calls, I've talked about our company's efforts to advance our leadership position within the global personal protective equipment or PPE market. The outlook or the outbreak of the COVID-nineteen pandemic presents unprecedented challenge to all companies within the PPE marketplace. Many struggle to deliver products to service both pandemic and regular customer demand. Lakeland has not. We believe that our results for the 2021 validated our commitment to attaining this leadership position within the industry as we leveraged our diverse manufacturing facilities and resilient supply chain with our new centralized data driven planning systems to deliver unprecedented financial performance while increasing capacity to meet both pandemic and industrial demand for our products.

As we report our second quarter fiscal year twenty twenty one financial results, which again benefit from our COVID response efforts, I'm pleased to announce that we just exceeded the performance from our record setting first quarter. In turn, I believe that we have set the new standard of excellence for PPE manufacturers anywhere in the world. Measured by key indicators, the 2021 brought us to new heights and most importantly, we now have greater visibility and insight into our business that we believe will yield sustainable operational improvement in a post COVID-nineteen environment. However,

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for

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the time being, COVID-nineteen remains a very significant global concern, and we believe that it will continue to have an impact on our business and our financial results into the second half of next year sorry, into the first half of next year. We anticipate an economic recovery beginning in the 2021 and continuing through the 2022 that will drive increased industrial sales as COVID-nineteen direct sales begin to wane. Having successfully increased our penetration into our base industrial markets, we believe increased industrial sales will largely replace COVID sales. While this demand environment exists, we have and will continue to leverage our manufacturing resiliency to drive our profits and cash flow generation. In fact, we already have built a really nice cash war chest.

Our second quarter cash balance ended at $34,900,000 which is up 49% from the end of our first quarter. This cash level, which we expect to continue to grow, is equivalent to 20% of our recent market value. And this is after funding our capital investments for continued global expansion and paying down all outstanding borrowings. We have strengthened the Lakeland enterprise to bring value to our shareholders. While our stock has doubled in the past year, which in large part is attributable to being a COVID-nineteen beneficiary, we believe our financial performance supported by our favorable industry position and sustainable improvements should be more clearly evident in the post COVID-nineteen economy, which may contribute to valuation expansion.

Against the backdrop of these challenging times, I'm very proud of the efforts and achievements of our global team. We're delivering for our existing and new customers alike, our shareholders and perhaps most importantly, the health and safety of people around the world. On behalf of the entire management team, I praise our global workforce for their continued hard work and adherence to safety protocols. Our corporate tagline is protect your people, and our team is truly living up to it. For the third consecutive quarter, we experienced increased demand for our products relating to COVID-nineteen.

Specifically, this refers to our disposable and chemical product lines.

Speaker 2

Through the benefit of owning our manufacturing capacity around the world and having a resilient supply chain, virtually all of these orders were booked, manufactured and shipped within the quarter. By contrast, in the 2021, sales of approximately $11,000,000

Speaker 1

were filled from products already in inventory, resulting in total sales for the quarter that was significantly above our quarterly manufacturing capacity. Backing out inventory sales of approximately $11,000,000 from our first quarter fiscal year twenty twenty one revenue of $45,600,000 yields a manufacturing capacity of about $34,000,000 in terms of sales revenue. When comparing second quarter fiscal year twenty twenty one revenue of $35,000,000 to the first quarter revenue of $34,600,000 adjusted for sales filled from inventory on hand and adding the fact that we were able to increase our finished goods inventories from the end of the first quarter, it becomes apparent that we actually increased our manufacturing capacity quarter over quarter. Here are some other key performance measures. In addition to revenues, second quarter records were set for operating income, net income and free cash flow.

We have added more than 70 new customers who contributed approximately $3,900,000 in sales during the 2021. We were able to convert these customers to Lakeland products because of our competitors' inability to supply reliably. So we gained market share. Focus on new market verticals, highlighting our efforts to tap into niche markets for higher margin opportunities, produced substantial revenue growth. So we are showing select organic growth and execution of our initiatives to sustainably improve gross margins.

This in part led to our gross margin increase to the highest percentage in company history at 49.5%, an enviable level for a global diversified manufacturer. And our operating expenses declined as compared to our first quarter and the year earlier period. So we continue to demonstrate strong management of expenses, which leverages our investment in information systems that we have talked about for the past couple of quarters. Our record performance reflects improvements in profitability measures, factory floor and distribution efficiencies and operating leverage that delivered a 269% increase in operating profit. Clearly, this growth rate and certain other performance measures are not repeatable absent COVID-nineteen or some other black swan event.

However, that is not to say that improvements made during COVID-nineteen will pass with the virus. The difference this time around as compared to other crisis situations that temporarily increased our top line is the breadth and duration of this event. Resources and capacities were strained to a point where response necessitated challenging long held beliefs about product mix, purchasing, planning, manufacturing expansion, customer relationships and communications. Through this lens, we gained invaluable information about ourselves, our company and the real impact of long held beliefs and new ideas. COVID-nineteen provided us with a proving ground for change that will benefit Lakeland well into the future.

We are centralizing, rationalizing our product offering, implementing new programs and developing new data models, which we view as providing sustainable advantages long after COVID has passed. Thus, we believe we will emerge stronger and more globally competitive from

Speaker 2

both

Speaker 1

a balance sheet and operational perspectives. This confidence is supported by the improvements in our second quarter results as compared to our first quarter since both were COVID impacted. While first quarter had far greater revenue due to inventory sell through, which was not repeated in the second quarter, we still improved our gross margin and our operating margin. Similar to

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the

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first quarter, we've been running our factories that make disposable and chemical products at near maximum capacity, a schedule of twelve hours per day, days per week. As a result, during the second quarter, we were able to deliver products when our competitors, many of whom use third party contractors could not. Our ability to provide timely delivery of product enabled us to convert new customers to Lakeland products. Many of these new customers placed container sized orders for significant business that we believe may be captured in whole or in part going forward. Particularly because of this increase in market share, we believe that our factories will continue to run at near maximum capacity for the remainder of the third quarter.

We have not yet resumed production of a number of disposable and chemical SKUs or product variations that had been curtailed or eliminated in the first quarter, but anticipate that we will begin to slowly add additional SKUs in the coming quarters. The reintroduction of these products to our manufacturing schedule will be metered and managed so that we emerge from COVID-nineteen with a rationalized product offering that preserves the majority of the manufacturing efficiencies we have realized and the resultant impact on margins. This rationalization means that we expect to offer far fewer products than we have previously. This streamlining has led to reduced customer lead times, more efficient and higher volume manufacturer, stronger gross margins and improved inventory turns. Aiding our initiatives to permanently strengthen our gross margins is our enhanced focus on new high growth rate, high margin market verticals, specifically the critical environment and utilities markets.

Both of these markets have significant barriers to entry in terms of product testing and or validation and technical knowledge required to service the customers. Not all of the impact of COVID-nineteen on Lakeland is positive. Automotive manufacturing plants were closed for a significant portion of the second quarter, and this negatively impacted our sales for a few of our product lines. The oil and gas industry has been materially weakened given the price of oil and reduced travel, so spending within that vertical market has been reduced. Based on our channel checks, municipalities lack requisite funding for additional protective garments such as turnout gear.

So the California wildfires do not appear to be contributing to our sales in the second quarter. And the utility sector is working smaller crews resulting in a reduction or postponement of purchasing new protective clothing. With elevated demand overall expected into the first half of next year, we remain attentive to future organic growth and market share attainment initiatives, all of which will be self funded. This includes the emergence of Institutional Cleaning as a new market segment, secondary government driven demand as governments around the world seek to replenish and perhaps increase their PPE stockpiles and private sector stockpiling of PPE as supply channels catch up to demand. In large part, we are planning for this growth scenario through investments in our manufacturing capacity.

We plan to spend $2,000,000 this year on investments in our technology platform and capacity production increases. Investment in technology solutions, which commenced a few years ago, are delivering results with improvements in operating and factory floor efficiencies and greater visibility into customer requirements. Capacity increases for the balance of this year will focus on nearshoring certain manufacturing assets to bring capacity closer to where it's needed and increasing production for our faster growing, higher margin products. We also will be accelerating our build out in India, where sales and production output were increased in part due to COVID-nineteen outbreak. To put our capital expenditures into context, our investments for 2019 and 2020 combined were $4,100,000 And during that period, we had average quarterly revenue of nearly $26,000,000 per quarter.

With our improved operating capabilities and modifications in our planning amid heightened COVID related demand, we were able to deliver an increase in average quarterly revenue through the first half of this year of $40,500,000 for a nearly 56% improvement in quarterly sales. On the basis of operating profits, the average quarterly operating profit was approximately $1,200,000 during the two year period as compared with the average quarterly operating profit through the first half of this year of approximately 11,100,000 for an increase of nearly 852%. This demonstrates the impressive scalability and operating leverage for a manufacturing company while delivering enviable returns on invested capital. Based on the initiatives implemented and discussed today, which address many facets of our business, we have we've been delivering on sustainable improvements that bolster our profitability and balance sheet. Similar to what we conveyed last quarter, Lakeland has been developing a resilient and flexible global manufacturing platform, a diversified and expanding customer base and a growing brand for high quality competitively priced PPE.

We look forward to continuing upon the progress that has been made. That concludes my remarks. I will now pass the call to Alan to provide a more thorough review of the company's financial results. Alan? Thank you, Charlie.

The following addresses my review of the financial results of our fiscal twenty twenty one second quarter ended 07/31/2020. Net sales for the 2021 were $35,000,000 up 28% as compared to $27,500,000 for the same period of the prior year. For the fifth consecutive quarter, our revenues exceeded $27,000,000 And as Charlie indicated, we see sustainable increased levels in our business from prior periods. On a consolidated basis, for the 2021, U. S.

Sales were $14,500,000 or 41% of total revenues, and international sales were $20,600,000 or 59% of total revenues. This compares with U. S. Sales of $14,400,000 or 53% of the total and international sales of $13,000,000 or 47% of the total in Q2 fiscal twenty twenty. Sales were up significantly over the prior year period, but down as compared to the 2021, which reflects the immediate surge of orders from inventory that were in our distribution centers in the previous quarter.

Our business remains very well balanced from a geographic diversification standpoint. Drilling down in the second quarter of this year versus the second quarter of last year, sales in The U. S. Were increased by $100,000 while international sales increased $7,500,000 Among our major international operations, sales in The U. K.

Were $4,100,000 versus $2,500,000 last year. Sales in Mexico were up marginally at just over $600,000 Sales in Asia were up over 100% at $8,400,000 from $4,000,000 in the prior year. Sales in Canada were up marginally at $2,400,000 Latin America increased to $3,000,000 from $2,600,000 and sales in other foreign markets were $2,000,000 compared to $900,000 a year ago. As compared to the first quarter of this year, U. S.

And other key markets were lower, particularly absent COVID demand due to the pandemic shutting down factories and basic industrial usage, which are typically our mainstream customers. The COVID induced industrial decline was somewhat offset by growth in our new product categories and our winning business from new customers for disposable and chemical product lines when they could not get supply from other manufacturers anywhere in the world. As Charlie discussed, owning our manufacturing is a significant competitive advantage. When our competitors freeze, we adapt. And this incremental top line growth provides additional benefits throughout our income statement and cash flow, as I'll review shortly.

Now let's look at our product mix diversification. Disposables, which continue to be our largest product group, increased by 69% or nearly $10,000,000 to $23,800,000 from 14,300,000 last year. Chemical suits were $6,200,000 up from $5,600,000 Both product groups benefited from organic growth, but the primary driver was COVID-nineteen demand. Fire products declined to $1,700,000 from $2,400,000 Gloves were $500,000 versus $800,000 High Vis products were lower at $1,000,000 versus $2,600,000 and Woven's were $1,400,000 versus $1,300,000 All of these markets reflect the COVID-nineteen impact with temporary closure of many industrial businesses, particularly in the automotive and transportation sectors and the oil and gas sector, which has remained under pressure due to the price of oil. High Performance Wear, one of our newer product lines, contributed $500,000 in sales in this year's second quarter and was very early in its launch last year.

As was the case in the first quarter, we believe that PPE purchasing continued to be focused, if not refocused, in the second quarter to pandemic efforts at the expense of certain traditional industrial usage. As of this time, certain of these trends, including workplace closures and purchasing of disposable and chemical garments over other product groups in the wake of the pandemic, have eased somewhat but still persist. Most automotive manufacturers have resumed business, so we expect some pickup there going forward. Moving on to gross profit. Gross profit of $17,300,000 for fiscal twenty twenty one second quarter increased by $6,900,000 or 66% from $10,400,000 for the same period last year.

Gross profit as a percentage of net sales was 49.5% for the fiscal twenty twenty one second quarter, a company record for any quarter and an increase of nearly 12 percentage points from 37.9% in the second quarter last year. As compared with the first quarter this year, when revenues were higher and gross profit was 22,100,000 our second quarter gross margin increased by nearly one percentage point. The key drivers for our gross margin improvement over prior year period were fewer SKUs and longer operating hours leading to greater factory floor efficiencies, higher average selling prices, an increase in direct container sales and the inclusion and growth of our higher margin specialized product lines. As compared to the first quarter of this year, our second quarter gross margin benefited from improved product mix and incremental manufacturing efficiencies. With our substantially higher sales volume and gross margin contributions, the leverage in our operating model drove substantial increases in profits and cash flow.

At the same time, we are committed to improvements throughout the organization, which includes ongoing expense management. While investors might expect operating expenses to increase in the quarter due to higher sales over last year, such that we have more shipping and sales commission and compensation expenses, which indeed was the case, our total operating expenses were down year over year. Operating expenses decreased to $7,600,000 for the three months ended 07/31/2020, from $7,800,000 for the three months ended July 3139 and $9,800,000 in the first quarter of this year. Operating expenses as a percentage of net sales was 21.7% for the second quarter this year compared to 28.3% for the same period of the prior year and 21.4% in the 2021. In addition to the aforementioned factors influencing our operating expenses, there was reduced travel and marketing costs year over year due to COVID-nineteen limitations.

Lakeland reported record second quarter operating profit of $9,700,000 in second quarter fiscal 'twenty one, up from $2,600,000 in last year's second quarter. Operating margins were 27.8% for our second quarter fiscal twenty twenty one, up from 9.6% in the second quarter of prior year and up from 27.1% in 2021. Despite the higher pretax income, overall income taxes decreased. Income tax expense consists of federal, state and foreign income taxes. Income tax expense was 4 and $23,000 for the 2021 as compared with $1,200,000 in the 2020.

The company's foreign earnings are subject to taxation under the Global Intangible Low Tax Income or GILTI regime. During the second quarter, the GILTI regulations were modified with respect to the treatment of income subject to a high foreign tax rate and provided guidance on the treatment of these available exclusions. As a result of these modifications, the company will be able to amend past tax returns and capture certain NOLs that had been previously utilized. As a result of the recapture of these NOLs, the company recorded an estimated tax benefit of $1,600,000 for the three and the six months ended 07/31/2020. Lakeland's NOL for federal tax purposes is estimated at $8,600,000 as of 07/31/2020, down from $15,000,000 at the beginning of the fiscal year after considering the GILTI modifications and estimated utilization in the first six months of fiscal year 'twenty one.

The second quarter fiscal twenty twenty one net income was a record 9,300,000 or $1.17 per basic and $1.16 per diluted share compared to net income of $1,400,000 or $0.17 per basic and diluted share in the prior year. The improved results reflect higher sales, gross margins, expense management, enhanced operating efficiencies and factory utilizations and lower GAAP taxes. The company had 7,976,275 basic shares outstanding at 07/31/2020. No shares were repurchased in the second quarter as part of the company's $2,500,000 stock buyback program approved in July 2016. To date, dollars 1,700,000.0 has been spent to repurchase shares with over 800,000 remaining available under the buyback program.

As of 07/31/2020, Lakeland had cash and cash equivalents of $34,900,000 up from $23,500,000 at 04/30/2020, and $14,600,000 at the beginning of fiscal twenty twenty. Inventories were reduced by $1,100,000 from the beginning of the fiscal year due largely to a sell through of sealed seam finished goods into COVID demand. This product line remains slightly below normal stocking levels in all of our warehouses around the world, and we are now quoting deliveries in the fourth quarter for new orders in many cases. As we have stated, we are servicing coronavirus orders only to the extent we have capacity beyond what is required to service our traditional customers and organic growth targets. We believe this process upholds our long term growth strategies, supports our commitment to our customers and contributes to the COVID-nineteen response.

As compared to the beginning of the fiscal year, accounts receivable at the end of the 2021 increased by $2,500,000 due to higher sales as DSOs remained steady at approximately fifty three days. Accounts payable and account accrued expenses increased by $5,300,000 from the beginning of the year, and shareholders' equity increased by $18,300,000 Total assets increased over $20,000,000 from $99,400,000 to $121,600,000 The company had no debt outstanding at 07/31/2020, no borrowings outstanding on its new $12,500,000 revolving credit facility with Bank of America. The new revolving credit facility agreement provides greater financial flexibility with reduced administration and can be expanded to $17,500,000 if needed. In addition, the facility provides us with access to Bank of America's global platform for cash management. This facility and its enhanced features reflect our efforts to optimize all aspects of our business and financial operations aimed at better supporting our continued worldwide growth.

Working capital of 86,600,000 at 07/31/2020, was increased from $66,900,000 at the beginning of the fiscal year. Capital expenditures were approximately $500,000 during the 2021, up slightly from $400,000 in the prior year period. CapEx for the year is expected to be $2,000,000 as compared to $1,000,000 in fiscal twenty twenty and $3,100,000 in fiscal twenty nineteen. The majority of our CapEx in the current year is for strategic capacity increases as needed, enhancing manufacturing efficiencies and extending the phased global rollout of our ERP system. Adjusted free cash flow in the 2021 was $9,300,000 an increase of $7,700,000 from the prior year period, driven by higher sales margins and operating efficiencies as capital expenditures in both periods were relatively similar.

Our fundamentals of growth, profitability and efficiency will survive beyond COVID-nineteen. That concludes my remarks. I'll turn the call back to the operator to open the call for questions.

Speaker 0

Thank you. The floor is now open for questions. And our first question comes from Alex Fuhrman from Craig Hallum. Go ahead,

Speaker 3

Great. Thanks very much for taking my question and congratulations on another really strong quarter. I wanted to ask about gross margin. This is two quarters in a row now that it's been miles ahead of what you put up in the past. Do you think that's sustainable through the rest of this year given that it sounds like pandemic related demand is going to continue at least through the third quarter?

And as you think about next year, what is a reasonable base case for gross margins as COVID related demand naturally recedes at some point?

Speaker 1

Thank you, Alex. It's Charlie. Let me address the last part of your question first. And we've stated this goal, I think, in numerous calls is we think that target gross margin for our company is in the low 40s. That's hitting 40% and moving north of that had been goals of ours for a while, and that remains to be a goal of the company.

As for margins into Q3 and Q4, We currently have market intelligence that suggests that prices are going to remain or sustained at high levels at least through Q3 and most of Q4. We're in possession of information that tells us that our competitors have announced their customers, some recent price increases as well as recent notices that price increases and surcharges already in place, will remain in place for the foreseeable future and, at least through January. So right now, we're surprised by that. That can change. We're aware of it, but it makes us optimistic about our continued margin performance.

Speaker 3

Great. That's helpful. And then as you think about where that upside to margin has come from, can you give us a sense of how much of that has been pricing and just the amount of demand that there's been as well as competitors' prices versus how much is maybe the manufacturing efficiencies from reducing the number of SKUs that you've been producing? And I'm sure you're in touch with all of your big customers on this. Can you give us a sense of do you think it could be permanent that you can have a smaller number of SKUs without losing any of your customers?

Speaker 1

Yes. Hey, Alex, this is Alan. I'll repeat one thing that Charlie indicated in his comments, and that's that we've learned some valuable lessons in managing our SKUs throughout this COVID-nineteen demand. And we intend to emerge with fewer SKUs going forward. So we are going to permanently invest in some of those efficiencies that we're enjoying with respect to the way that we operate our facilities and the way that we manage our product mix.

The pricing, to Charlie's point, other point is that we expect to see that somewhat stay in place for the near term. And we believe some of the pricing is going to be sustainable, particularly as we again adjust our product mix to some of the higher growth opportunities that he mentioned such as clean room and high performance wear as those markets begin to emerge behind COVID-nineteen stronger than they are currently. So to quantify the specific mix between the pricing contribution versus the manufacturing efficiencies, I don't know that we can quantify it. I can just tell you that we're going to manage both very, very aggressively and try to make sure that we position ourselves to take advantage of the best available opportunities on the back end. I think to Alan's point, I mentioned that COVID has provided us with a proving ground for change.

And I think, some of what has emerged that our management team has gained a real appreciation for is the impact of, indirect costs on our product. I'm talking about increased inventory turns, running closer to your manufacturing, how shortening your lead time to the customer is a lever towards higher margins and reducing raw materials, inventory or SKUs, all of which don't get baked in at specific cost of product, but are all are real have real operational cost impacts, are tremendous within our business.

Speaker 3

Great. That's really helpful. Thank you very much.

Speaker 0

And our next question comes from Russell Greene from RPG Wealth Management. Go ahead, Russell.

Speaker 2

Great quarter, guys. It was good to see the earnings as high as they were. I just had a couple of politically related questions and then one about the stock buyback plan. You had mentioned that California has been delaying purchases of any sort of PPP and stuff with recent fires because of funding. Do you think there's like a pent up demand if there's ever a package that allows municipalities to get funding from the federal government?

Speaker 1

The short answer to that is yes. The federal government's long run had a program called the FIRE Act, where, they provide significant subsidies to state and local governments for purchase of turnout gear. Needless to say, I think COVID has distracted from that, largely this year, but that usually comes out in October, I believe. So, you know, we'll wait and see what happens there. But usually, purchasing begins in anticipation of Fire Act distributions.

Speaker 2

Alright. I appreciate that. The second question is, have you considered at all repatriating some of your foreign funds if there's a change in administration and a possible change in tax policy?

Speaker 1

This is Alan. Yes, we've stated this in our filings that currently, our plan is to continue to reinvest in those markets with respect to where just due to our expansion plan. So we have targeted application for those resources currently. But obviously, were there a change that provided an opportunity, we would have to consider it in light of those investment plans. So that's kind of that's a bit of a what if, and I don't know where the what if might land.

But we stay abreast of those opportunities and consider them in light of the other investment opportunities that we currently have on our plate.

Speaker 3

All right.

Speaker 2

I appreciate it. And finally, it doesn't look like you bought any shares back in the second quarter. Have you given any thought of some sort of cash dividend? I mean you could pay out $1,000,000 a quarter, dollars 4,000,000 a year or something and make $0.50 dividend, and that really didn't hurt your cash flow that much and may provide a different avenue for investors to look at the stock?

Speaker 1

Russell, we are just now beginning to get our arms around our position and how we are going to deploy that capital. We're obviously moving into a post COVID business environment where I think a number of what we've become have come to be accepted as market norms are going to shift significantly. I think we're very fortunate to have, the cash in place to be able to tailor and mold our business to be among the first to realize those changes and respond to them. So we're looking we're currently reviewing those needs along with, as you mentioned, share buyback, dividends and the lot. Have reached a conclusion.

Speaker 2

Well, I appreciate it. It's a great quarter. Thank you.

Speaker 1

Thank you.

Speaker 0

And at this time, I'd like to turn the call back over to management. Thank you very much.

Speaker 1

Thank you. We appreciate your participation on Lakeland's fiscal twenty twenty one second quarter financial results conference call. As we look ahead to the balance of fiscal twenty twenty one, we continue to be well positioned as the new standard of excellence for PPE manufacturers anywhere in the world. We look forward to sharing our exciting outlook as we meet with institutional investors at the Sidoti Virtual Conference on September 24 and the Craig Hallum Virtual Alpha Select Conference on November 17. Thank you again for joining us on today's conference call, and goodbye.

Speaker 0

Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.