Lakeland loses Tyvek sales deal, shares drop

The protective-clothing maker Lakeland Industries Inc. on Thursday reported a quarterly loss, mostly due to the termination of a $4.7 million annual agreement to sell DuPont's branded Tyvek and Tychem garments.

Lakeland, based in Ronkonkoma, offset the disclosure of the DuPont contract loss with positive news of a $5.3 million signed purchase order to supply the Brazilian Navy with fire-resistant coveralls.

In its earnings report for the fourth quarter ended Jan. 31, Lakeland showed a loss of about $1 million on sales of $20.2 million, compared to a profit of $1.2 million on sales of $24.8 million for the same quarter the previous year. In terms of earnings per share, the company reports a loss of 19 cents, compared to income of 23 cents per share in the year-ago quarter.

Lakeland shares fell 20 cents to $10.80 in early trading Thursday, at the upper end of its 52-week range of $6.57-$11.

Lakeland said DuPont had terminated its contract to sell protective garments made with fabrics that resist air and water penetration but are permeable enough to allow moisture vapor to escape.

The company said other factors in the quarterly loss included costs related to closing a glove factory in India; and costs of closing a Missouri facility and moving its manufacturing operations to Mexico and its warehousing to Decatur, Ala.

With a total of about $8 million in new purchase orders from several customers in Brazil, Christopher J. Ryan, the company's president and chief executive, said in a Securities and Exchange Commission filing, "we are pleased to have emerged from fiscal 2012 with a strengthened global platform and to no longer be dragged down by a deteriorating, low margin licensed product line domestically."

The company on Thursday also issued its 2011 annual report. Lakeland said it earned $1.1 million on sales of $96.3 million for the year, compared to earnings of $1.4 million on sales of $99.5 million for the previous year. The net decrease in sales was mainly due to a $9 million decrease in domestic sales, which was partially offset by a $5.8 million increase in foreign sales, the company said.

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