Brazil Navy contract brings $5M deal to LI firm

Shares of Lakeland Industries Inc. rose slightly in early trading Friday, after the Ronkonkoma fire-protection clothing maker said it expects to show a quarterly loss--and also disclosed that it has a newly-signed $5.3 million purchase order to supply fire-resistant coveralls to the Brazilian Navy.

The loss is expected for the quarter ended Jan. 31, a date that also marks the fiscal year's end, Lakeland said in a statement released before the market opened Friday. It will report quarterly and annual results later this month.

Lakeland's shares rose as much as 18 cents in early trading, to $10.50, after news of the expected loss was made public.

Deliveries for the Brazil purchase order, and other factors, should bring an earnings turnaround by the first quarter of the new fiscal year, which began Feb. 1, the company said.

Lakeland also said another agency in Brazil, which it did not name, has signed $2.3 million in purchase orders for firefighting gear, and deliveries on those orders should improve earnings during the first two quarters.

"Looking past the fourth quarter and into fiscal 2013, we are quite pleased with our operating position," Christopher J. Ryan, the company's president and chief executive, said in a prepared statement.

"We will have a new start domestically with a comprehensive, higher margin product line, and we will have reduced our cost structure and overhead, while reaping the benefits of our accelerating international revenue growth.

The near-term profit setback is mostly due to a downturn in U.S. sales caused, in part, by the termination of its longtime arrangement to manufacture clothing for the DuPont brand, Lakeland said.

Another factor in the expected quarterly loss are costs associated with Lakeland's shutdown of a U.S. plant, now based in Missouri, and the relocation of its operations to Mexico, the company said. Once established in Mexico, the manufacturing operation will reduce Lakeland's recurrent overhead costs due to lower labor expenses, the company said.

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