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Lakeland Inks Deals In Brazil

October 6, 2008

New subsidiary gains contracts worth $1 million.

Lakeland Industries, Inc., through its recently acquired Brazilian subsidiary Qualytextil, has received a contract worth approximately $1 million from Companhia Pulista de Forca e Luz, a major electrical utility in the state of Sao Paulo, for customized protective clothing. In addition, Lakeland received a contract from Petrobras, Brazil's largest oil company, for approximately $0.2 million as part of its ongoing relationship, which, so far this year has yielded approximately $1.6 million in sales. These awards build upon existing business with Lakeland and are representative of the high-caliber customers which came with Qualytextil. The company expects to sign another similar contract within the next 45 days.

“Long term supply contracts with companies such as Petrobras provide Lakeland greater visibility with regard to both sales and earnings—again highlighting the progress we've made improving our financial outlook by expanding internationally,” said Chris Ryan, the CEO of Lakeland. “As part of our restructuring program over the past two years, Lakeland has streamlined operations in the U.S. while adding manufacturing/sales facilities in the rapidly growing economies of Brazil and India, opened sales and warehousing facilities in China, Chile, and Japan, and expanded its U.K. and Canadian operations. The contract wins in Brazil are indicative of the many opportunities we see there, which will continue to drive strong top line growth and margin expansion going forward. The company remains well positioned for further performance improvement, even in these difficult times in the U.S."

With an in-house sales force of 20 employees and nearly 30 outside sales representatives, Qualytextil covers the entire country of Brazil, selling directly to end users. Qualytextil markets products to major state-owned companies and agencies and the main oil and chemical companies. The Brazilian operations, including manufacturing, sales and marketing, warehousing, and distribution, benefit from State provided tax incentives, favorable labor rates, and proximity to economical transportation for local and international distribution of garments. Lakeland expects its Brazilian sales and operating earnings to remain strong in their local currency for the fiscal third quarter ended October 31, 2008. Exchange rate fluctuations, such as the recent strengthening of the U.S. dollar against the Brazilian Real, may impact the Company's consolidated financial results.

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