Lakeland Industries (LAKE) FY2026 10-K Risk Factors: 57 New, 32 Dropped

What the changes say

New disclosures highlight $44.3 million of credit-facility borrowings supporting acquisitions and working capital.
Acquisitions created valuation risk for customer relationships and goodwill, including a $2.6 million LHD impairment charge.
Internal-control reporting is impaired by a material weakness as of January 31, 2026.
Prior broad international, supply-chain, climate, pandemic, customer-demand and competition risks were removed from the shown section.

What changed since the prior 10-K

New

New
Net cash used in investing activities of $1.2 million for the year ended January 31, 2026 includes the acquisitions of Arizona PPE and California PPE for $6.2 million and purchases of equipment of $0.7 million, offset by the proceeds from the sale of the Decatur warehouse facilities of $5.7 million
Acquisitions, inventory growth and $44.3 million of credit-facility borrowings increased cash needs, while FY26 operating cash flow was negative $15.9 million.
New
Revolving Credit Facility
The secured revolving credit facility is limited to $40.0 million, constraining liquidity available for acquisitions and working capital.
New
January 2025 Equity Issuance
The January 2025 offering raised $42.6 million and diluted shareholders; proceeds were used to repay credit-facility debt.
New
The Company did not repurchase any shares during FY26 or FY25 and has $5.0 million remaining under the share repurchase program at January 31, 2026
FY27 capital spending is expected to rise to $3.2 million for equipment replacement and expanded fire-services manufacturing capacity.
New
Disaggregation of Income Statement Expenses
New expense-disaggregation rules will require more granular income-statement disclosures, increasing reporting requirements after adoption.
New
Accounting for Internal-Use Software
New internal-use software accounting guidance could change capitalization and expense treatment; Lakeland is still assessing the impact.
New
Opinion on the Financial Statements
The financial statements received an unqualified audit opinion, but the disclosure adds audit-related information rather than a business risk.
New
Acquired customer relationship intangible assets were valued using the excess earnings approach. Several significant assumptions and estimates were involved in the application of this valuation method, including forecasts of revenue growth rates, operating margins, attrition rates, and discount rates
Valuing customer-relationship intangibles from the LHD, Veridian and California acquisitions depends on uncertain growth, margins, attrition and discount-rate estimates.
New
We evaluated the reasonableness of management’s revenue growth rates and operating margin forecasts, and attrition rates by comparing the projections to historical results as well as industry benchmarks and tested the underlying data for accuracy and completeness
Audit testing focused on whether acquired customer-relationship forecasts, industry comparisons and underlying valuation data were accurate and reasonable.
New
Developing an analysis of the discount rates and compared that analysis to the discount rates selected by management
Goodwill valuation depends on reporting-unit revenue, cash-flow margins, discount rates and comparable-company multiples; LHD incurred a $2.6 million impairment.
New
We evaluated the reasonableness of management’s revenue and operating cash flow projections by comparing them to actual results and historical trends and tested the underlying data for accuracy and completeness
Goodwill impairment conclusions require complex discounted-cash-flow calculations and judgments about forecasts, discount rates and selected public-company multiples.
New
Opinion on the Internal Control Over Financial Reporting
A material weakness means Lakeland did not maintain effective internal control over financial reporting at January 31, 2026.
New
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the years ended January 31, 2026 and 2025, of the Company and our report dated April 16, 2026 expressed an unqualified opinion
New
Definition and Limitations of Internal Control Over Financial Reporting
New
Use of Estimates and Assumptions
New
The Company considers highly liquid temporary cash investments with original maturities of three months or less to be cash equivalents. Cash equivalents consist of money market funds
New
Intangible assets with a finite useful life are amortized on a straight-line basis over their useful lives. Indefinite lived intangible assets are assessed for possible impairment annually on November 1st or whenever circumstances change such that the carrying value of the asset may not be recoverable
New
Foreign Operations and Foreign Currency Translation
New
Fair Value of Financial Instruments
New
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities
New
There were no foreign currency forward or hedge contracts at January 31, 2026 or January 31, 2025
New
3. PROPERTY AND EQUIPMENT, NET
New
5. GOODWILL AND INTANGIBLE ASSETS
New
Acquisition of Arizona PPE Recon, Inc
New
Acquisition of California PPE Recon, Inc
New
During FY26, the Company finalized the purchase price allocation for the LHD acquisition. Measurement period adjustments totaling $ 2.3 million from the initial preliminary estimates resulted in changes to net working capital, customer relationship intangible assets, lease liabilities, other liabilities and goodwill
New
Total acquisition-related costs were $ 3.2 million and $ 2.0 million for the years ended January 31, 2026 and 2025, respectively. Transactional costs and acquisition-related amortization is included in operating expenses in the Consolidated Statements of Operations
New
Pacific Helmets Borrowings
New
Income Tax Expense (Benefit)
New
Indefinite Reinvestment Assertion
New
We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. The valuation allowance as of January 31, 2026 and January 31, 2025 was $ 18.3 million and $ 6.6 million, respectively
New
COMMITMENTS AND CONTINGENCIES
New
General litigation contingencies
New
Cash paid for amounts included in the
New
Maturity of Lease Liabilities
New
Gross profit and Operating profit are the measures used by the chief operating decision maker, identified as our President and Chief Executive Officer , to evaluate segment performance and identify opportunities when allocating resources
New
Consolidated gross profit
New
Consolidated operating expenses
New
Evaluation of Disclosure Controls and Procedures
New
Management’s Report on Internal Control over Financial Reporting
New
Remediation of Material Weakness
New
Implementing an enterprise resource planning (“ERP”) system, which is expected to roll out in phases over the next several years
New
Migrating substantially all of our operations to a common accounting system and utilizing a common chart of accounts and improved accounting close and review procedures
New
We are currently undertaking a significant multi-year ERP implementation to upgrade our information technology platforms and
New
ITE M 10. DIRECTORS, EXECUTIVE OFF ICERS AND CORPORATE GOVERNANCE
New
Code of Ethics for CEO and Senior Financial Officers
New
ITE M 11. EXECUTIVE C OMPENSATION
New
ITE M 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
New
Equity Compensation Plans
New
ITE M 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
New
ITE M 14, PRINCIPAL ACCOUNTA NT FEES AND SERVICES
New
Stock Purchase Agreement, by and between William A. Van Lent and Lakeland Industries, Inc., dated as of December 16, 2024 (incorporated by reference to Exhibit 2.5 of Lakeland Industries, Inc.'s Form 10-K filed April 17, 2025)
New
Amendment to Agreement for Purchase of Debts, dated effectively as of December 3, 2014 between HSBC Invoice Finance (UK) Limited and Lakeland Industries Europe Limited (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 8-K filed December 8, 2014)
New
Global Policy on Insider Trading (filed herewith)
New
Certification of the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
New
Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)
New
President and Chief Executive Officer and Executive Chairman

Dropped

DroppedRisks Related to Our Business and Industry
We are subject to risk as a result of our international manufacturing operations
International manufacturing risks from facilities in China, Vietnam, Mexico, Argentina, New Zealand, Romania and India.
DroppedRisks Related to Our Business and Industry
Our global operations are susceptible to global events, including acts or threats of war or terrorism, international conflicts, political instability, and natural disasters. The occurrence of any of these events could have an adverse effect on our business results and financial condition
War, terrorism, international conflicts, political instability, natural disasters and Ukraine-related disruptions.
DroppedRisks Related to Our Business and Industry
We have significant international operations and are subject to the risks of doing business in foreign countries, particularly in China and Vietnam, which could affect our ability to manufacture or sell our products, obtain products from foreign suppliers or control the costs of our products
Foreign-country operating risks, especially in China and Vietnam, affecting manufacturing, sales, suppliers and costs.
DroppedRisks Related to Our Business and Industry
pandemics and similar disasters
Pandemics, trade tensions, labor costs, weather and disasters disrupting China and Vietnam manufacturing.
DroppedRisks Related to Our Business and Industry
Our results of operations may vary widely from quarter to quarter
Quarterly earnings volatility from currency, crises, competition, seasonality, product mix and timing.
DroppedRisks Related to Our Business and Industry
Disruption in our supply chain, manufacturing or distribution operations could adversely affect our business
Natural disasters, outages, fires, strikes, terrorism, disease, import restrictions and other supply-chain disruptions.
DroppedRisks Related to Our Business and Industry
Climate change and other sustainability matters may adversely affect our business and operations
Climate-transition and physical risks from greenhouse-gas effects, extreme weather and changing regulation.
DroppedRisks Related to Our Business and Industry
Pandemics or disease outbreaks, such as COVID-19, may cause unfavorable economic or market conditions, which could impact demand patterns and/or disrupt global supply chains and manufacturing operations
Pandemics reducing industrial-market demand and disrupting global supply chains and manufacturing.
DroppedRisks Related to Our Business and Industry
Because we do not have long-term commitments from many of our customers, we must estimate customer demand, and errors in our estimates could negatively impact our inventory levels and net sales
Forecasting customer demand and inventory without long-term purchase commitments.
DroppedRisks Related to Our Business and Industry
The markets we compete in are highly competitive, and some of our competitors have greater financial and other resources than we do
Competition from better-funded rivals, new products, technology and pricing changes.
DroppedRisks Related to Our Business and Industry
Our operations are substantially dependent upon key personnel
Dependence on senior executives and other key personnel.
DroppedRisks Related to Our Business and Industry
Technological change could negatively affect sales of our products and our performance
Rapid fabric-technology changes reducing product effectiveness, sales or development opportunities.
DroppedRisks Related to Our Business and Industry
Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information and adversely impact our reputation and results of operations
DroppedRisks Related to Our Business and Industry
As a global organization that accesses and processes personal data in the course of its business, we are subject to U.S. and international data privacy, security and data breach notification laws, as well as contractual requirements that may govern the collection, use, disclosure and protection of personal data
DroppedRisks Related to Our Business and Industry
Our success depends in part on our proprietary technology, and if we fail to successfully obtain or enforce our intellectual property rights, our competitive position may be harmed
DroppedRisks Related to Our Business and Industry
Our inability to successfully identify, consummate and integrate current and future acquisitions and strategic investments or to realize anticipated cost savings and other benefits could adversely affect our business
DroppedRisks Related to Our Business and Industry
Changes in financial accounting standards or policies have affected, and in the future may affect, our reported financial condition or results of operations; there are inherent limitations to our system of internal controls; changes in corporate governance requirements, policies and practices may impact our business
DroppedRisks Related to Our Business and Industry
We are implementing a new enterprise resource planning system, and challenges with the planning or implementation of the system may impact our internal control over financial reporting, business and operations
DroppedRisks Related to Our Business and Industry
We have identified a material weakness in our internal control over financial reporting which, if not remediated appropriately or in a timely manner, could result in a loss of investor confidence and adversely impact the trading price of our securities
DroppedFinancial Risks
Our results of operations could be negatively affected by potential fluctuations in foreign currency exchange rates
DroppedFinancial Risks
Due to our purchases and sales in other countries, we are exposed to changes in foreign currency exchange rates. To manage this volatility, we seek to limit, to the extent possible, our non-US dollar-denominated purchases and sales
DroppedFinancial Risks
Covenants in our credit facilities may restrict our financial and operating flexibility
DroppedFinancial Risks
Our operations require significant amounts of cash, and we may be required to seek additional capital, whether from sales of equity or by borrowing money, to fund acquisitions for the future growth and development of our business or to fund our operations and inventory, particularly in the event of a market downturn
DroppedFinancial Risks
Capital markets conditions
DroppedFinancial Risks
Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial condition or results of operations
DroppedFinancial Risks
If our goodwill, other intangible assets and long-lived assets become impaired, we may be required to record significant charges to earnings
DroppedLegal and Regulatory Risks
We deal in countries where corruption is an obstacle
DroppedLegal and Regulatory Risks
We are subject to various U.S. and foreign tax laws, and any changes in these laws related to the taxation of businesses and resolutions of tax disputes could adversely affect our results of operations
DroppedLegal and Regulatory Risks
We may be subject to product liability claims, and insurance coverage could be inadequate or unavailable to cover these claims
DroppedLegal and Regulatory Risks
Environmental laws and regulations may subject us to significant liabilities
DroppedLegal and Regulatory Risks
Provisions in our restated certificate of incorporation, by-laws, and Delaware law could make a merger, tender offer or proxy contest difficult
DroppedRisks Relating to Our Common Stock
The market price of our common stock may fluctuate widely

All 57 risk factors

Headings as the filing states them, in filing order.

Other

01Net cash used in investing activities of $1.2 million for the year ended January 31, 2026 includes the acquisitions of Arizona PPE and California PPE for $6.2 million and purchases of equipment of $0.7 million, offset by the proceeds from the sale of the Decatur warehouse facilities of $5.7 millionNew
02Revolving Credit FacilityNew
03January 2025 Equity IssuanceNew
04The Company did not repurchase any shares during FY26 or FY25 and has $5.0 million remaining under the share repurchase program at January 31, 2026New
05Disaggregation of Income Statement ExpensesNew
06Accounting for Internal-Use SoftwareNew
07Opinion on the Financial StatementsNew
08Acquired customer relationship intangible assets were valued using the excess earnings approach. Several significant assumptions and estimates were involved in the application of this valuation method, including forecasts of revenue growth rates, operating margins, attrition rates, and discount ratesNew
09We evaluated the reasonableness of management’s revenue growth rates and operating margin forecasts, and attrition rates by comparing the projections to historical results as well as industry benchmarks and tested the underlying data for accuracy and completenessNew
10Developing an analysis of the discount rates and compared that analysis to the discount rates selected by managementNew
11We evaluated the reasonableness of management’s revenue and operating cash flow projections by comparing them to actual results and historical trends and tested the underlying data for accuracy and completenessNew
12Opinion on the Internal Control Over Financial ReportingNew
13We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the years ended January 31, 2026 and 2025, of the Company and our report dated April 16, 2026 expressed an unqualified opinionNew
14Definition and Limitations of Internal Control Over Financial ReportingNew
15Use of Estimates and AssumptionsNew
16The Company considers highly liquid temporary cash investments with original maturities of three months or less to be cash equivalents. Cash equivalents consist of money market fundsNew
17Intangible assets with a finite useful life are amortized on a straight-line basis over their useful lives. Indefinite lived intangible assets are assessed for possible impairment annually on November 1st or whenever circumstances change such that the carrying value of the asset may not be recoverableNew
18Foreign Operations and Foreign Currency TranslationNew
19Fair Value of Financial InstrumentsNew
20Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilitiesNew
21There were no foreign currency forward or hedge contracts at January 31, 2026 or January 31, 2025New
223. PROPERTY AND EQUIPMENT, NETNew
235. GOODWILL AND INTANGIBLE ASSETSNew
24Acquisition of Arizona PPE Recon, IncNew
25Acquisition of California PPE Recon, IncNew
26During FY26, the Company finalized the purchase price allocation for the LHD acquisition. Measurement period adjustments totaling $ 2.3 million from the initial preliminary estimates resulted in changes to net working capital, customer relationship intangible assets, lease liabilities, other liabilities and goodwillNew
27Total acquisition-related costs were $ 3.2 million and $ 2.0 million for the years ended January 31, 2026 and 2025, respectively. Transactional costs and acquisition-related amortization is included in operating expenses in the Consolidated Statements of OperationsNew
28Pacific Helmets BorrowingsNew
29Income Tax Expense (Benefit)New
30Indefinite Reinvestment AssertionNew
31We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. The valuation allowance as of January 31, 2026 and January 31, 2025 was $ 18.3 million and $ 6.6 million, respectivelyNew
32COMMITMENTS AND CONTINGENCIESNew
33General litigation contingenciesNew
34Cash paid for amounts included in theNew
35Maturity of Lease LiabilitiesNew
36Gross profit and Operating profit are the measures used by the chief operating decision maker, identified as our President and Chief Executive Officer , to evaluate segment performance and identify opportunities when allocating resourcesNew
37Consolidated gross profitNew
38Consolidated operating expensesNew
39Evaluation of Disclosure Controls and ProceduresNew
40Management’s Report on Internal Control over Financial ReportingNew
41Remediation of Material WeaknessNew
42Implementing an enterprise resource planning (“ERP”) system, which is expected to roll out in phases over the next several yearsNew
43Migrating substantially all of our operations to a common accounting system and utilizing a common chart of accounts and improved accounting close and review proceduresNew
44We are currently undertaking a significant multi-year ERP implementation to upgrade our information technology platforms andNew
45ITE M 10. DIRECTORS, EXECUTIVE OFF ICERS AND CORPORATE GOVERNANCENew
46Code of Ethics for CEO and Senior Financial OfficersNew
47ITE M 11. EXECUTIVE C OMPENSATIONNew
48ITE M 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSNew
49Equity Compensation PlansNew
50ITE M 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCENew
51ITE M 14, PRINCIPAL ACCOUNTA NT FEES AND SERVICESNew
52Stock Purchase Agreement, by and between William A. Van Lent and Lakeland Industries, Inc., dated as of December 16, 2024 (incorporated by reference to Exhibit 2.5 of Lakeland Industries, Inc.'s Form 10-K filed April 17, 2025)New
53Amendment to Agreement for Purchase of Debts, dated effectively as of December 3, 2014 between HSBC Invoice Finance (UK) Limited and Lakeland Industries Europe Limited (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 8-K filed December 8, 2014) New
54Global Policy on Insider Trading (filed herewith)New
55Certification of the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)New
56Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)New
57President and Chief Executive Officer and Executive ChairmanNew

Other Lakeland Industries 10-Ks

FY2025 10-K risk factors
32 risks
International manufacturing operations in China, Vietnam, Mexico, and other countries dominate the risk profile. Internal control weaknesses over foreign reporting packages and SAP ERP implementation create material reporting risks. Heavy reliance on short-term purchase orders without long-term customer commitments creates demand uncertainty.
Filed Apr 17, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.