Good afternoon, and welcome to the Lakeland Industries fourth quarter fiscal year 2015 earnings conference call. [Operator Instructions] Before we begin, parties are reminded that statements made during this call contain forward-looking information within the meanings 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 reflect management's expectations regarding future events and operating performance and speak only as of today, May 18, 2015. 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, 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.

Thank you. Good afternoon to you all, and thank you for joining our fiscal 2015 fourth quarter and year-end financial results conference call. We are going to provide brief opening statements on the status of operations and on our financial results for the quarter and full year. The call will then be opened up so that we may respond to your questions. Now I’d like to discuss our operating strategies and the progress that has been made, along with our view of our objectives as we move forward. Fiscal year 2015 was remarkable on many fronts, including significant progress in raising awareness of the Lakeland brand worldwide: two Time Magazine pictures and multiple publication and news references to our garments and improving our financial performance and fiscal health. Among our global initiatives, we announced our determination to exit Brazil, which has been losing money for three years, during which time it has caused material hardships throughout the company. Elsewhere around the world, we experienced revenue growth in the U.S., U.K., Canada, and other countries as consolidated revenue for the year reached $100 million, an improvement of over 9% from fiscal 2014. This also marks the highest level of sales in six years, during which time we built back our lost DuPont sales in the U.S. that had been about 80% of the company’s total revenue, or $77 million, and before the demise of our Brazilian operations, which had contributed as much as $15.7 million for our international revenues in 2012. It is important to emphasize these distortions in our revenue composition, because it masks the true growth of the company and the execution by our management team and global workforce outside of Brazil. In the fourth quarter of fiscal 2015 alone, we reported an increase in sales over the prior…

Thank you, Chris. The following addresses my review of the fourth quarter and the full year to date in FY15, but before I get into that, I just want to point out that there’s one typo in our balance sheet in the press release. Don’t get too excited. The legal fees in Brazil are $64,000, not $64 million. We forgot to drop the three zeros. We will try and correct that. So as far as revenue growth, Q4 sales worldwide were $26.5 million this year and $22.2 million last year, an increase of 19.4%. Including Brazil, sales were $25.3 million this year compared with $20.4 million, an increase of 24%. Year to date sales were $99.7 million this year and $91.4 million last year, an increase of 9.1%. Worldwide sales excluding Brazil were $93.4 million this year compared with $84.1 million last year, an 11% increase. As far as margin improvement and expense management, the Q4 gross margin worldwide was a record 37.5% compared to 28.2% last year. Excluding Brazil, gross margin increased from 29.8% last year to 37.7% this year. Year to date, gross margin was 33.9% compared with 27.2% last year and excluding Brazil, gross was 33.9% this year and 29.9% last year. Q4 operating expenses worldwide increased by $1.1 million but decreased as a percent of sales to 29.2% from 29.9% last year. Operating expenses for Lakeland worldwide, excluding Brazil, increased by $700,000. As far as significant increases in operating income and adjusted EBITDA, the Q4 operating income increased to $2.2 million compared to an operating loss of $400,000 last year. Excluding Brazil, operating income was $3 million this year compared to $300,000 last year. Year to date operating income was $5 million compared with a loss of $400,000 last year. Excluding Brazil, operating income was $7…

[Operator instructions.] Our first question comes from Alex Fuhrman at Craig-Hallum Capital Group.

Congratulations on a great quarter and much more importantly congratulations on the news coming out of Liberia, I mean, clearly that’s – Lakeland played a major role in making that happen and that’s great certainly great to see the progress that they have made over there. The first question I have for you is you mentioned in your prepared remarks that there’s been new customers acquired during the Ebola crisis and a lot of them are starting to purchase other products from you. You mentioned gloves and other items like that. What else are these new customers starting to buy? And from your perspective, how many of these customers could just be regular everyday kind of customers over the next five, ten years, versus more just kind of emergency, crisis type customers?

What we’re seeing outside of West Africa itself is you see a little bit of stockpiling by government agencies around the world. They could buy more. They may not buy more. It all depends on their exigencies. But what we have seen or what we hope to see next year is really stockpiling by the U.S. government and hospitals. And that may be followed in Europe, and it may be followed to a lesser extent in other countries in the world that have experienced pandemics like this. For example, China with SARS. So in the future, yeah, we hope to be able to connect up to government agencies and medical type clients that we have not previously served. So it’s something that will be ongoing probably for a year or two.

I guess building on that, how many cities in the U.S., by your own estimation, do you think are appropriately ready to deal with Ebola versus really need to be ramping up? And I guess similarly, as you look at the rest of the developed world and the developing world, are there regions that stand out to you as being particularly unprepared, where you think you could have a big impact over the next two or three years?

Nobody in the United States is really ready for a pandemic, neither the hospitals nor the government. That’s the point of the Obama bill, is to stockpile and actually be ready for a pandemic illness, which probably won’t be Ebola, but it could be something airborne like SARS, which is much more infectious than Ebola was, or is currently. Where we’re going with this in the United States, the Health and Human Services has designated some 60 hospitals as Ebola centers, and the rest of the hospitals in the United States have to be prepared to accept pandemic-type infections into their emergency room, identify them, and then ship them out to these 50 or 60 hospitals which will be prepared to handle a pandemic crisis. So that’s what’s going on in the United States, and we’re following that closely. The other areas we’re gonna look for is probably Europe, to do somewhat similar things, perhaps the EEC as a general block, or individual countries, which would be more likely be France and the U.K. But as far as the developing world, they usually don’t do something until it’s started. But you know, China is the type of country, having been through SARS, that’s really gonna be prepared. And I suppose they’ll be upping their preparedness in the coming year. A country that would really be devastated by an infectious disease, which really needs to get going on this, is India. And we have been talking to some of the healthcare people in India, but their revenues and the ability to finance it is a loss less than in a developed country. Around the world, it’s generally true the developed countries don’t have the money, and the developed countries do. The developed countries generally prepare, and the undeveloped countries usually don’t.

And then lastly, if we could just touch on some new product, I think in the past we’ve spoken about a more green version of the ChemMAX One suit. Just kind of wondering what the timeline will be for some of these new product launches, and then are these products that you’re going to be marketing primarily to existing customers, or are these tools that you’re really looking at to help you reach out to new customers?

On some of our new products, green products, we’re looking for introductions next autumn. I think it’ll be a completely new product to our existing customer base, and that’s where we’re really gonna go with a lot of these new products. One product that’s doing pretty well, that’s actually growing as we speak, is an Arc Flash related protection product that most of the utilities are buying, and the utilities are a big market. Power transmission is one of the biggest safety markets in the United States, and the utilities are doing well these days, not paying that much for oil, so they’re somewhat flush with cash. And this is basically a new regulation that OSHA’s passed that they’ve got to have these protective garments. But on the green side, we hope to introduce a disposable garment that basically melts in water, so it’s very, very green, unlike all the other disposable garments that we make. Those are two examples of new products that we’re introducing or have introduced, and we’ll probably announce a few more in a couple of months.

The next question comes from Doug Ruth at Lenox Financial Services.

Hi, congratulations, Gary and Chris on a terrific report, I appreciate the details. Are you giving any information about a backlog?

No, we’ve never disclosed that.

Okay. We’re reading about a new epidemic now about the bird flu. Can you maybe comment about that?

My comment currently will be that the investment in our platform to build and deliver suits for Ebola put us in a strategic position to handle large scale orders any time a pandemic biological threat becomes evident, both in reacting to a shortage in our normal industrial markets and to help with any supply to pandemic outbreaks. We can simply move faster because of our manufacturing expertise in this area, to react without the high cost normally associated with building up capacity or finding contractors like our large competitors have. There’s been a lot of news about Ebola outbreaks, and it may or probably will be very significant in the coming months. And it may go on for a lot longer than most people think, because the birds migrate both in spring and come again in fall.

Could you maybe give us a little bit of detail as far as where the orders came from? We know the three biggest markets are the U.S., China, and other foreign. Was there any one area that seemed to record more revenue and earnings growth than another market? In general would be fine.

The U.S., U.K. and China are the main contributors to our revenue and profits. No change. They were, they have been, and they’ll continue to be.

What about the revenue from some of the foreign countries? Was that higher than you maybe had anticipated?

The U.K. certainly was. Argentina actually made a profit. Not much, but better than brackets around the number. So Argentina had a reasonable quarter. Chile is doing well. Canada rebounded a bit. Canada had a good strong quarter. So outside of the three main U.S., U.K., and China, other than Brazil, we’re pretty much clicking on all cylinders.

And the profits were up in China year over year?

Yes, sir.

And how are we doing in Mexico? Anything new to report there?

We’re basically setting up our selling operation there. We’re revamping the manufacturing facilities to be able to respond quickly to Mexican demand. We see Mexico as one of our probably biggest upsides in the next coming years. It was nicked a little bit by the price of oil dropping, because Mexico’s a big oil producer, but the economy down there really looks like it’s going to boom for the next four or five years. And of course, the price of oil will probably come back in one to two years, so it’s just a short term slowdown on that side. But Mexico really looks good.

And do you feel like you have enough capacity at this point, or are you still thinking about further expanding the capacity?

In Mexico, we have plenty of capacity. As you know, about two years ago, we almost doubled the size of the building. So we’ve been filling out the building with people, training them. They’re about ready to really explode in terms of the ability to manufacture more when the sales are there in Mexico. And they should be showing up fairly soon in Mexico.

The company has done everything that investors could ask. You increased the sales, you increased the margins, and you’re taking care of the problem in Brazil. We’re very grateful for what you’re doing, and thank you for an excellent report. And thank you for answering my questions.

The next question comes from Peter Muckerman at Raymond James.

The majority of my questions have been answered. I guess the only thing that kind of popped into my mind here a little bit was the rainy season in Western Africa is about to begin, and that is when Ebola really kind of took off, because I guess it makes it much harder for responders to track and get to these outer lying villages or whatever. But anyway, I was just curious, from the people possibly on the ground that maybe you’re talking to, I guess my question is, is this Ebola thing in Western Africa completely curable? I know that you can only speculate on this. Is it something that’s going to kind of linger? In other words, it only takes one case for spreading to kind of get out of hand. And I’ve been following several websites, the CDC and the WHO, and the SOS International, and my personal sense is that the reporting on the numbers is not very accurate between the three websites. Not that that’s really meaningful, but it seems like it’s very hard to get a clear picture of exactly what is going on over there. So that’s the only reason I ask. Thank you.

Well, you know, most of the governments, including the U.S. government, put a kibosh on all reporting about Ebola around mid-November to late-November, simply because I think it was embarrassing most of these governments, that they looked totally incompetent in their inability to deal with it. As far as the monsoons go, yes, it’s going to make it much tougher. It is still presenting in Sierra Leone and in Guinea because they’re much more difficult to get to than Liberia. Liberia has a big port and it’s a smaller country. So it can explode at any time, but it’s not likely, simply because they are aware that it’s there, they have marshalled a lot of assets to go after it. But the monsoons can spread it quickly, simply because the virus can live for a couple of hours, and if it can live for a couple of hours, it can live for a couple of hours in running water down the streets. So we’ll see what happens. In all likelihood, they’ll be able to probably put an end to this by autumn, but you cannot necessarily say there’s not going to be another outbreak, particularly if some people travel to a place like Nigeria, where it’s highly populated.

Just out of curiosity, have you all increased your sales staff?

Yeah, we have over the last couple of months. We’ve increased a few people in the United States and China. And we’re going to be looking at increasing sales operations in other countries, like Australia. So we will be increasing our sales staff over time, as, you know, basically meeting revenue, profits, and expenses, and balancing them out.

[Operator instructions.] There are no further questions. I will turn the call back to management for closing remarks.

We appreciate your participation in Lakeland’s fiscal 2015 fourth quarter and year-end financial results conference call. As we are committed to delivering value for our shareholders, we believe this is best achieved 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. Thank you again, and goodbye.