Christopher Ryan - Chief Executive Officer Teri Hunt - Chief Financial Officer.

Dave King - Roth Capital Alex Fuhrman - Craig-Hallum Capital Group Jeff Briggs - Singular Research Peter Muckerman - Raymond James.

Good morning and welcome to the Lakeland Industries, Third Quarter Fiscal Year 2018 Earnings Release and Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]Please note that this event is being recorded.

Before we begin, parties are reminded that statements made during this call contain forward-looking information within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934.

Forward-looking statements are all statements other than statements of historical facts, which reflects management’s expectations regarding future events and operating performance, and speaks only as of today, December 15, 2017.

Forward-looking statements are based on current assumptions and analysis made by the company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate under circumstances.

These statements are subject to a number of assumptions, risks and uncertainties, and factored in the company’s filings with the Securities and Exchange Commission, general economic and business conditions, the business opportunities that may be presented to you and pursued by the company, changes in law or regulations and other factors, many of which are beyond the control of the company.

Listeners are cautioned that these statements are not guarantees of future performance and the actual results or developments may differ materially from those projected in any forward-looking statements.

All subsequent forward-looking statements attributable to the company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. At this time, I would like to introduce your host for this call, Lakeland Industries’ Chief Executive Officer, Christopher J. Ryan. Mr. Ryan, you may begin..

Good afternoon to you all, and thank you for joining our fiscal 2018 third quarter financial results conference call. We are going to provide opening statements on the status of operations and on our financial results. The call will then be opened up, so that we may respond to your questions. Now on to my formal remarks.

We are very pleased with our performance in the third quarter of fiscal 2018, which demonstrates the momentum of our core business while we gear up for accelerated growth and continued market share attainment.

Similar to the second quarter, we showed effective management in all facets of our operations, and improved our profitability in the third quarter as compared to the prior year. For the fourth consecutive quarter, we delivered very solid performance which resulted from the implementation of the diversified growth strategy.

Here are some of our more important aspects of our third quarter performance.

Revenues continued to increase; we had sales growth in all major operating regions; our Amazon distribution strategy has gained meaningful traction; our gross margin, operating margin and net margin, all increased; our cash balance at the end of the quarter was up more than a 100% from the beginning of the year; subsequent to the end of the quarter, we paid down all of the $2.3 million of debt; new lower cost manufacturing operations are underway in India and Vietnam; new products and vertical markets are showing progress as part of our strategy for achieving permanent increases in our consolidated gross margin levels.

During the last call, I mentioned that in the more than 30 years that I have been involved with Lakeland, the company has never been better positioned and presented with more global opportunities than it is today.

In the third quarter, we advanced our mission of fortifying our business for many years ahead and have positioned the company for meaningful growth in top and bottom-line results.

During the third quarter, with the backdrop of favorable trends, for our opening performance, and improving economies globally, we took decisive action to capitalize on the appreciation of our share price by raising over $10 million in net proceeds from the issuance of common stock.

The offering proceeds along with our operating performance have enabled us to substantially bolster our financial position. We have been very active in putting the offering proceeds to work. First as I mentioned, we eliminated the remaining high interest bank debt on our books.

We have been hiring sales people and have continued to do invest in our information systems to accommodate anticipated growth, as well as to better respond to customer requirements anywhere in the world. An Amazon Fulfillment platform has been developed for the U.S.

operations and we have been very busy in building additional overseas manufacturing facility, as well as purchasing new equipment to increase our capacity and lower our cost base. The takeaway perspective investors should have on this spending is that it’s intended to drive growth today and far into the future.

Now I will provide additional color on our third quarter performance and address some of the initiatives to drive future growth in the sales and profitability. In the third quarter, among the more mature markets for personal protective equipment, our sales in the U.S. continued to grow. This suggests we are attaining market share.

We’ve talked in the past about our new product and new vertical market initiatives and this process has continued to pace. A component of our growth in the third quarter while currently representing less than 1% of the total company sales is derived from the distribution of our products for Amazon.

We view Amazon as another distributor for the company which enabled us to capture sales to which we previously did not have access. From a standing still position a few months ago, as we continued the investments in marketing and fulfillment capabilities, we are now seeing very accelerated order growth.

Over 16 pages of Lakeland branded products have been populated on the Amazon website. Sales range from the order of one chemical jump suit to boxes of coveralls. These orders are shipped by the next day. I’d like to take this opportunity to congratulate our U.S. team for doing a great job in this new aspect of our business up and running.

We intend to mirror this process in Canada, Australia and India. Moving on to other operations, growth in the UK and Europe finally seen a post-Brexit rebound. In Germany, we effectively entered about six months ago with the hiring of a sales person to cover the country. We recently signed on two major distributors in Germany.

In Australia, we also hired our first sales person. Overall, our international markets are picking up as former economically challenged and sanction-filled operations in South America and Russia are beginning to take-off.

In faster growing and less competitive regions, our sales in Canada continue to reach new record levels and China revenues have been expanding. We are very excited by the high level of interest in Lakeland products in South America, Russia, Kazakhstan, Australia and other Asian markets and sales in Chile and Argentina are growing rapidly.

Across the board we experienced the heightened demand from a resurgence of the oil and gas sector. Amid that global growth, we are making investments to increase manufacturing capacity, lowering our cost structure, and accelerating our entry into some very attractive markets around the world.

From a manufacturing standpoint, we have begun the process of adding facilities in India and Vietnam, which we believe will provide us with years of lower level cost and favorable tariffs that will enhance our gross margins while bringing products closer to new markets that we are now entering throughout Asia and the Pacific Rim.

These facilities will start to come online at the end of fiscal 2019 first quarter or about six months from now. Collectively, these facilities will provide Lakeland with the capability to nearly doubling its manufacturing capacity once new operators and management are trained and attain standard proficiency.

Our diversifications for manufacturing and new feet on the street enables us to attack specific higher growing markets by product, vertical customer orientation and geographic segment and to establish foothold for other operational benefits.

The added manufacturing will provide Lakeland with ample capacity to achieve a continuation of growth trajectory and to continue to respond successfully to black swan or emergency events as they arise.

We are also building out our IT operations and marketing infrastructure to integrate with not only Amazon in multiple countries, but Jet, Tmall and JD.com. Essentially, Lakeland intends to make online marketing a core competency in a very nice complement to our traditional direct and indirect sales channels.

Lakeland’s competitive position has continued to improve throughout the first three quarters of fiscal 2018. Diversification of business lines and the management of expenses are driving our financial performance. With a very solid third quarter behind us, we look excitedly toward the fourth quarter and into next year.

Lakeland is essentially debt free and has a strong cash position and deep management team, world-class manufacturing, a respected and flourishing global brand and have well-diversified in both established and developing markets. We are very encouraged by our prospects for continued global growth on the top and bottom-line. That concludes my remarks.

I will now pass the call over to our CFO, Teri Hunt to provide a more thorough review of the company’s financial results. .

Disposables gross margins increased 4.6 percentage points due to product mix and increased volume. Chemical gross margin increased by 7.5 percentage points primarily due to a reduction in force in the U.S. as production was moved to more cost effective facilities in Mexico, China in the prior period.

Fire protection gross margin decreased 2.5 percentage points as the Company prepares for the upcoming change to the NFPA standards by discounting products produced under the old standard and due to product mix. Woven’s gross margins increased 18.0 percentage points due to market price increases on contractor FR coveralls.

Reflective gross margins increased 14.3 percentage points as a result of increased pricing on some products and the product mix. Operating expense increased from $6.3 million for the three months ended October 31, 2016 to $6.4 million for the three months ended October 31, 2017.

Operating expense as a percentage of net sales was 26.7% for the three months ended October 31, 2017 and 2016 respectively, but down from 27.2% in the second quarter.

The main factors for the higher operating expenses are increases in salaries for additional sales personnel as the Company expands internationally, freight costs, and AR allowances for several slow paying customers partially offset by lower commission fees due to a large international order in the prior year period and a decrease in officer salaries resulting from the reduction of one officer due to retirement.

As in the second quarter, we’ve committed to spending as part of our building out process of sales and marketing and related infrastructure for some of our faster growing international operations.

Operating income increased to $2.7 million for the three months ended October 31, 2017, from $2.3 million for the three months ended July 31, 2017, and $2.3 million for the three months ended October 31, 2016. Operating margins were 11.1%, compared to 9.1% for the three months ended July 31, 2017 and 9.7% for the three months ended October 31, 2016.

Net income increased to $1.8 million for the three months ended October 31, 2017 from $1.5 million for October 31, 2016.

The results for three months ended October 31, 2017 are primarily due to continuing cost containment efforts and increases in sales volume as the industrial sector showed marked performance improvements and the global economy improved.

Income tax expense for the third quarter of fiscal 2018 was $0.8 million, compared with $0.6 million in income tax expense for the prior year period. The increase in tax expense was a result of significantly higher operating income in the U.S., as well as overall improved profitability.

The Company also has the benefit of the tax credit from the worthless stock deduction relating to its exit from Brazil, so there should be no cash taxes in the U.S. for approximately the next two years, depending on profitability in these periods and assuming no changes to the U.S. tax code.

The Company may also be required to pay local taxes on certain country operations when those operations are profitable on a local basis. On the balance sheet, cash and equivalents at the end of the third quarter increased to $21.5 million from $13.2 million at the end of the second quarter and $10.4 million at the beginning of the fiscal year.

Cash and cash equivalents increased $11.1 million or 107% from the beginning of the fiscal year, which included $10.1 million from the net proceeds of the common stock offering in the third quarter of fiscal 2018 as well as cash flow from operations.

Free cash flow was very strong in the third quarter at $2.6 million or 39% of year-to-date free cash flow of $6.7 million. Fiscal 2018 third quarter free cash flow increased by 26% from the prior year period.

Working capital of $64.7 million at the end of the third quarter increased by $17 million for an improvement of 36% from the beginning of the fiscal year.

At October 31, 2017 the balance of borrowings under our revolving credit facilities stood at a zero balance, down from $4.9 million at the beginning of the fiscal year and total debt was $2.3 million. Total debt outstanding at July 31, 2017 was $2.8 million, down from $5.8 million at January 31, 2017 and $13.4 million at January 31, 2016.

The Company incurred capital expenditures of approximately $171,000 during the third quarter of fiscal year 2018. Third quarter CapEx principally relate to the addition of equipment in China and for new manufacturing facilities in India and Vietnam.

While year-to-date CapEx was $619,000, total CapEx for the fiscal year is budgeted at approximately $1.2 million, which includes the cost for a phased global rollout of a new Enterprise Resource Planning or ERP system. The global ERP implementation uses the SAGE X3 platform to aid into digital evolution of Lakeland by leveraging cloud technologies.

With SAGE X3, we will be able to increase efficiency by accelerating all four business processes with one business management solution and gain visibility across the business with real-time information which will assist in management decision-making.

Our quarterly and annual results reporting process will become more efficient with simplified compliance and automated reporting as the system supports global walls and restrictions across currencies, regions and regulations. This will be particularly helpful given our current sales activities in 20 countries around the world.

The numerous analytical capabilities and the supply chain management improvements that we expect from the system will support our top-line growth strategies with product pricing and information availability, while aiding in cash flow management through inventory turns in related performance enhancing features.

Moving back to the balance sheet, our current ratio improved to 6.4 to 1 at the end of the third quarter from 5.1 to 1 at the end of the second quarter and 4.9 to 1 at the beginning of the year.

Total shareholders’ equity of $87.1 million at October 31, 2017 improved from $75.4 million at the end of the second quarter and $71.5 million at the beginning of the year. That concludes my remarks. I will turn the call back to the operator to begin the Q&A session. .

Thank you. We will now begin the question and answer session. [Operator Instructions] First question will come from Dave King with Roth Capital. Please go ahead. .

Thanks and good morning. I guess, first off on the revenue side. How much of a benefit do you think you had from the hurricanes? And then, on the China side, it seems like the – reducing the backlog, I think has been a benefit now.

How big is that backlog versus normal, how many more quarters do you think that should provide a benefit as you sort of work that down? Any color there would be appreciated. Thanks..

On the hurricanes, we did not see a lot of business. They cleaned up Houston very, very quickly. I think we’ll see more business over a long period of time when we look at Puerto Rico, the Dominican Republic and the Virgin Island. They’ve don’t even have power yet for the most part has been the – almost six to seven weeks. So they can’t fix anything.

So that will probably go – probably over the course of a year or two to do the fix ups in those places. They will use a certain amount of governance. But I don’t think it will be enough to make a big swing in sales. As the backlogs, we work them down pretty well. We probably have seven months of backlogs right now, okay. .

Okay. That’s seven months, sorry, go ahead, Chris..

Seven months, it’s about $7 million. .

So we are seeing it ease up and that was part of the improvements you saw in China was the easing of backlog. It reached a high earlier in the year of almost $13 million. So we are working through it. .

Okay.

And then, what’s typical versus that seven months?.

What’s typical is, is more like a half of the backlog that we are looking at right now. .

Okay..

So we also have to keep in mind that we are getting towards the end of the year. So people are depleting their inventories, but it will start picking back up in January and February as people begin to restock. So that’s why we are saying, probably seven months, because it’s going to get larger before it really runs down. .

Okay. Okay, that helps.

And then on the gross margin side, what’s driving the mix improvement within the disposables category and is that a sustainable trend there, just within that category?.

We think it is sustainable. We are saying as we are – as we work through some on – we have a very specific initiative where we are running down some of our SKUs. We are streamlining the processes. We are seeing improved margins in some of the markets we haven’t been before. We are moving into clean rooms.

So we are specifically targeting higher margin products in our mix. So it is an intentional improvement in the margins and we do think it’s sustainable. .

Okay..

And when you’ll have blips from quarter-to-quarter, it’s totally on product mix..

Some of which we are obviously have nothing to rollover. .

Okay. And then I guess lastly from me, where is the cash balance now as of December 15, versus where it was at quarter end? Where are you on the deployment of capital raise proceeds? It sounds like, you expect CapEx to ramp, but that’s for the ERP system and then I think, Chris, you said, where debt might be as of now.

I know there is lots of parts to that question, but I am also – I think another piece of that as when we spoke last I think, Vietnam, you’d already rented the facility. I guess, I am just trying to get a sense of where we are in this whole process? Thanks. .

As far as the cash balance, I can answer that part of the question. The mix of the cash hasn’t changed significantly. We still have a large portion of cash in China. We have not declared dividends intentionally. We don’t need the cash in the U.S. and we are waiting on the – to see what’s going to happen with changes in the U.S.

tax codes if we do bring in dividends, we do take the – even though there is no there is no cash taxes, as I stated in the U.S., it’s still is a non-cash charge to expense. So, we are kind of waiting – we are sitting on tall until we see what’s going to happen with this move on, this new tax overhaul. .

Understood. Okay. .

As far as deployment of the cash, you are going to see that really start picking up in the January, February, timeframe. We won’t be hiring people in Vietnam until late February, early March and you are going to see a lot of capital expenditures there for setting machines and air-conditioning and cutting tables, things like that.

India probably won’t pick up for about another six months. So we’ll probably be hiring in India out in the July, August timeframe. And then you will see a lot of the capital expenditures as deployment of the cash at that point. The ERP is an ongoing thing for the next two years. .

Right, right, and we will probably ultimately see a cash outlay of approximately $2 million on the ERP. We are already done maybe $600,000, $700,000 entering that. So it will be a gradual phasing of CapEx..

Okay, okay. That’s great color. Thanks for taking on my questions and good luck closing out the fiscal year. .

Thank you..

The next question will come from Alex Fuhrman of Craig-Hallum Capital Group. Please go ahead..

Great, thank you very much for taking my question. Just a little bit more, kind of curious about the new facilities you are putting together in India, in Vietnam.

Do you have a timeline in mind of when we are actually going to start to see finished products coming from those facilities? And thinking about the different opportunities to improve margin there, I mean, it sounds like you guys have talked about improved manufacturing cost and lower tariffs in certain instances and as well as potentially being closer to some of your customers and presumably saving on shipping cost.

Can you kind of give us a sense just an order of magnitude between the manufacturing cost, the tariffs in the shipping, what is the biggest bucket of potential savings and what could be actual net impact to gross margin be and would that be kind of a back half 2018 event or more of a 2019 when we could see that in the numbers?.

It’s certainly going to be 2019. I mean, we’ll probably be hiring ladies in Vietnam as I said in March. We probably won’t be hiring in India until July or August.

So you are going to see them really up and running at full speed, probably about a year from now, okay? Where you will have everybody hitting a standard, what we call a standard in the selling industry. What this does to is, really reduce our direct labor cost substantially, okay.

So, if we look at something like, a $2 million total investment in Vietnam, and we can save $3 a box, we only have to have ship 700,000 cases to pay for the whole thing. So the direct labor is going to be a substantial savings, not only in Vietnam, but also in India, okay.

Over current Chinese costs, which are really just continuing to go up and up and they will be up higher next year. So, we will see a very, very big change in our direct labor cost which will increase our gross margins. And I said, the payback will be probably within 18 months on the investment. So they are very sort of high return investments.

The ERP is going to be the same thing in terms of being able to knock down our inventory, okay, be able to process everything much more efficiently.

We spent too many man hours pooling with Excel and Spreadsheets whereas once this system is totally implemented, and it will take a year or two to really be – to where everybody is operating at a top level, it will save lot of money.

I can’t put my finger on that, because what it does is that just saves hours and hours of white collar time that can be devoted to other things. And certainly with the sales force, it’s going to make that more efficient, because they spend way too much time moving around with sort of old IT standard. This should really boost their productivity.

Hard to put a number on that unlike the manufacturing. And I’d give you an example. Currently in China, we are paying about $2.50 an hour. In Vietnam, it’s more like $1.15 to $1.20 and in India it’s $0.85. So when you combine this with millions of man hours, it’s a big, big savings to the gross margin.

As to Vietnam, it has great tariff deals with most of the world. For instance, if we ship something from - our typical product goes from China to say, the European theater, there is a 12% tariff. Okay, from Vietnam in 2020 it will be zero.

The same is true of Vietnam to Russia, Kazakhstan as I said, all of Europe, the tariffs go to zero, whereas prior to this, they were 18% in Russia to China, 20% in Canada to China. So we’ll save a lot on tariffs. So, we either can choose to lower our price which I don’t think we really want to do, but really just collect more margin again, so. .

Great, that’s really helpful, Chris. I appreciate that.

And then, if I could also ask just about the European market and in general from a demand perspective, I mean, it sounds like, things, you said have picked up a little bit now, kind of after some of the post-Brexit slowdown, it also sounds like maybe, I am not sure if that was new distributor relationships, it sounds like there was a sell-in there.

During the quarter, do you feel like, Europe and the UK has finally kind of started to turn the quarter and would you expect that region to be back to growth next year?.

Yes, we do, because, a large segment of our sales in Europe are in the UK. That’s where our warehouse is. We hired a guy in Germany. He is now signing on new distributor, new customers. The Brexit thing, I guess, will sort of solve itself, but that’s another thing. The currency dropped by 15% the day Brexit was passed. That should change over time.

But Europe looks good, right now. And we really just have to work harder on, really the sales management. In terms of customer pricing and customer acquisition, which we are doing at this very moment. So, yes, I expect Europe to improve over time..

Great, that’s really helpful. Thank you very much..

The next question will be from Jeff Briggs of Singular Research. Please go ahead..

Hi guys, very good quarter..

Hi. .

Hi. .

So the question I have is, in regards to the investments and sort of maybe some of the operational changes that go along with the Amazon strategy that you guys have.

I know there is lot of different ways to go about it, whether it’s filling individual orders around your own fulfillment centers versus having it sort of their warehouses and things of that nature.

Can you describe a little bit sort of, what you have to do to make that work and maybe how the margins compare with other sales channels and any additional expenses that might go along with that sales channel?.

Well, typically what we are really interested in is Amazon’s new B2B platform. But they’ve always had a consumer platform where guys like you and me might order something be it a book or one of our suits.

But as the B2B platform, it’s the business is – real business is starting to order off the Amazon platform which really interests us, because, in the consumer type situation, Amazon buys our goods, puts it in their own inventory, stores it, picks it, ships it, bills it, okay. And we agree on a price between us.

In this, in the B2B, we are keeping the inventory. We ship it. We pick it. We bill it. So we know where the – at least the end-user is in all of this, okay. Margins are better in the B2B platform, because we get to set the price at the end-user and we generally set prices that are typically the same or even higher than our own distributors.

The difference being is, is that we pick up and then another 5% to 10% in margin on this B2B business as opposed to, say, a typical distributor.

I mean, that might change, but right now, it’s very, very attractive, because it increases our margins and it also gives us a view at the end-user, so that we can really talk to the end-user about what they want in terms of new products. This is very helpful.

Because in many instances, when we are dealing through distributors, we don’t know who the end-user is or where our product is going. .

Yes, it’s very helpful. One very short follow-up to that. How do you see, since you are selling to end-users in this case, how do you see sort of the average order size? Is it – are you guys picking and packing for selling a lot of smaller orders? Or are they generally good size? I know you said it’s everything from one unit to cases, but..

Well, assuming typically when you are servicing the consumer market, it’s 1Z, 2Zs. So, but that’s what Amazon serves. On the B2B, you are looking at – you are really looking at small businesses. So, rather than 1Z, 2Z is all I want a pair of gloves, I mean, it’s ridiculous.

But, when you are dealing with small businesses, they are going to be ordering boxes, cases of 25, cases of 50 and that’s even a small construction business.

If you get in and occasionally, I’ve seen General Electric go out there and do Dutch auctions on $5 million bids, that’s the type of thing you’d really want to go after is the larger end-users just placing orders directly, because then you are able to call on that end-user and you are able really to create a relationship, brand your products with the end-user and also really have some on, what’s wrong, what’s that you need.

This is the greatest way to develop new products is when you have a big end-user like a General Electric telling you, this is what we need. .

And one more quick question.

So, is the way that, you pay Amazon, right, is it basically just like a commission, if there is orders placed through the platform?.

Yes, as a percent of the sale price..

Okay. Sounds good. Thank you very much..

Okay. .

The next questions will come from Dennis Amato a private investor. Please go ahead..

Hey, Chris. .

Hi. .

Would you be able to comment on the progress if any in penetrating both utility and pharma markets that was initiated a while back?.

Okay. The pharma is about three or four months behind, but we will be penetrating, we will be in there in the spring. Utility again, we’ll be in there in the spring. It’s only about a month or two behind. You run into these problems primarily because, fabric suppliers are not very efficient.

I mean, we have guys to sit there and tell us, well, that’s a 12 week lead time. I mean, our customers want it next day. We never tell them 12 weeks from now. But that’s what most of the loss of a couple months has been. So they are both going to be introduced very hard in the spring. .

Okay, thanks. .

[Operator Instructions] The next question will come from Peter Muckerman with Raymond James. Please go ahead. .

Hey, good afternoon you all and you’ve answered the questions that I had. So, I was here thinking what can I ask. So, I guess, I’ll ask this. It’s two-fold. When you are talking to manufacturers out there, are they a little – I guess, I would love to hear some feedback in regards to what they are thinking.

I am speaking mostly to your foreign customers in relation to what’s going on in Washington. And then, to follow-on to that, does any of the, this makes me a little bit nervous, so I just thought I’d ask, does the re – kind of jiggering of trade policies that have been in place for so many years, all of a sudden they are all going to be renegotiated.

Do you see any impact in 2018 and beyond in regards to that?.

Not for us specifically. The most active negotiation is NAFTA, okay. And we are not seeing any real negotiation going on in the apparel business, simply because, apparel has not been made in this country for close to thirty years. So there is no jobs, there is no job issue.

What you are seeing in NAFTA is a big, big to do about the automobile industry and a lot because Mexico has made deals with Europe all over the world, much like Vietnam has, to be able to export automobiles duty free.

So Mexico has built about 20 auto plants and lot of them being American, but not only American, it’s German, it’s Korean, it’s Japanese and I think that’s what Mr. Trump is after, to try to get some of those auto jobs back, because those are the high paying jobs that Americans have done historically.

As to the rest of the world, the European, they look at the – it’s hard to say, most of them are not too happy. But it doesn’t affect trade simply because, we operate in ten countries.

So the fact that the United States is dropped out of the Pacific, the PAN Pacific agreement or Trans-Pacific agreement, it doesn’t affect us at all, because we will be manufacturing in Vietnam and they are a member, okay. .

Gotcha. .

We are manufacturing in Chile. We sell out of Chile. They are a member. So, the fact that the Trans-Pacific agreement, we’ve dropped out of, it doesn’t affect us at all..

Okay, all right. Thank you and congratulations on all your progress..

The apparel business is not what Mr. Trump is trying to change..

Gotcha, okay. .

Ladies and gentlemen, as there are no further questions, this concludes our question and answer session. I would like to turn the conference back to management for closing remarks. .

Okay. We appreciate your participation on Lakeland’s fiscal 2018 third quarter financial results conference call.

As we are committed to delivering value for our shareholders, we believe this is the best achievement for Lakeland Industries through the continued implementation of strategies for effectively managing its balance sheet, controlling expenses and capitalizing on long-term global growth initiatives.

We have made significant progress in the year-to-date toward optimizing our balance sheet, improving our cost structure and importantly, enhancing our competitive market position. It’s our intent to continue on this path. Thank you again, and goodbye..

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect..