Lakeland Fire and Safety reports Q2 2027 mixed results amid margin recovery

Lakeland Fire and Safety (LAKE) reported fiscal second-quarter 2027 results on September 9, 2026, showing revenue of $50.1 million—down 4.5% year-over-year from $52.5 million but up 5.7% sequentially from $47.4 million. The company missed its $51.48 million forecast by approximately $1.38 million, or about 2.7%. Organic net sales growth was 2.8% year-over-year, excluding divestitures, while trailing 12-month revenue stood at roughly $191 million. Gross profit was $18.5 million, a 1.5% decline from the prior year but up from $18.8 million in Q1 2027. Gross margin improved to 37.0% from 35.9% year-over-year, with adjusted gross margin rising 410 basis points sequentially to 37.7%. Despite a $4.9 million net loss—equivalent to $0.50 per share—compared to a net income of $0.8 million ($0.08 per share) in the same period a year earlier, the company’s trailing 12-month loss narrowed to $2.16 per share. Adjusted EBITDA (excluding foreign exchange) was $2.7 million, a 5.4% margin, down from $5.1 million the prior year but up from $1.1 million in Q1. Operating cash flow improved to $5.4 million in the first half of fiscal 2027, a $15.1 million year-over-year gain. Cash reserves rose to $17.9 million, while total debt fell to $28.7 million from $32.3 million at year-end 2025. Inventory declined to $74.9 million, down sequentially and year-over-year. Operating expenses increased 7% year-over-year to $20.6 million, with adjusted operating expenses excluding FX rising to $16.2 million from $14.6 million. Key cost items included a $1.3 million FX headwind, a $3.2 million goodwill impairment charge for LHD Group Deutschland GmbH, and a $1.9 million gain from resolving the Monterrey lease matter, reducing quarterly cash usage by about $400,000. The company also absorbed $600,000 in expedited freight costs tied to strategic inventory builds, and spent roughly $0.5 million on trade show participation at Interschutz in Germany. Fire revenue grew 2% year-over-year to $26.1 million, representing 52% of net sales, with helmet sales up 41%, hoods up 66%, and turnout gear up 5.5%. Comparable fire revenue rose about 10%. Industrial revenue fell 10.8% to $24 million, though excluding divestments, it grew 3%, with chemical protective and critical environment segments up 9% and 28%, respectively. The ISP platform, which includes independent service provider locations, grew 78% year-over-year to $3.5 million, with Denver’s new location opening in September. The company secured a £220 million seven-year framework contract with the U.K. National Fire Chiefs Council for firefighter PPE, covering gloves, turnout gear, and boots. Additional contract awards were secured in nine countries across fire, disaster response, law enforcement, industrial, and utility markets, including in Asia-Pacific and Latin America. Share price closed at $11.07 after a 3.82% drop in regular trading, falling further 8.04% in after-hours trading to $10.16. Analysts forecast profitability returning in fiscal 2027 with earnings of $0.14 per share and price targets ranging from $13 to $19. The company’s financial health was rated