Stockholders Equity

6 Months Ended

Jul. 31, 2024

Stockholders Equity

Stockholders' Equity

9. Stockholders’ Equity

On June 21, 2017, the stockholders of the Company approved the Lakeland Industries, Inc. 2017 Equity Incentive Plan (the “2017 Plan”). The executive officers and all other employees and directors of the Company, including its subsidiaries, are eligible to participate in the 2017 Plan. The 2017 Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), except that with respect to all non-employee directors, the 2017 Plan is administered by the full Board. The 2017 Plan provides for the grant of equity-based compensation in the form of stock options, restricted stock, restricted stock units, performance shares, performance units, or stock appreciation rights (“SARs”).

On June 16, 2021, the stockholders of the Company approved Amendment No. 1 ( “Amendment No. 1”) to the 2017 Plan. Amendment No. 1 increased the number of shares of common stock, par value $0.01 per share, of the Company reserved for issuance under the 2017 Plan from 360,000 to 840,000 shares.

On June 13, 2024, the stockholders of the Company approved Amendment No. 2 (“Amendment No. 2”) to the 2017 Plan. Amendment No. 2 increased the number of shares of common stock, par value $0.01 per share, of the Company reserved for issuance under the 2017 Plan from 840,000 to 1,240,000 shares.

An aggregate of 1,240,000 shares of the Company’s common stock are authorized for issuance under the 2017 Plan, as amended, subject to adjustment as provided in the 2017 Plan for stock splits, dividends, distributions, recapitalizations and other similar transactions or events. If any shares subject to an award are forfeited, expire, lapse or otherwise terminate without issuance of such shares, such shares shall, to the extent of such forfeiture, expiration, lapse or termination, again be available for issuance under the 2017 Plan.

The Company recognized total stock-based compensation costs, which are reflected in operating expenses (in $000’s): 

	Three Months Ended July 31,				Six Months Ended July 31,
	2024		2023		2024		2023
2017 Plan:
Total restricted stock and stock option programs	$	428	$	38	$	627	$	445
Total income tax expense recognized for stock-based compensation arrangements	$	90	$	8	$	132	$	94

Restricted Stock and Restricted Stock Units

Under the 2017 Plan, as described above, the Company has awarded performance-based and service-based shares of restricted stock and restricted stock units to eligible employees and directors. The following table summarizes the activity under the 2017 Plan for the six months ended July 31, 2024 and 2023. This table reflects the amount of awards granted and the number of shares that would be vested if the Company were to achieve the maximum performance level under the June 2022, March 2023 and April 2024 grants.

	Performance- Based			Service-Based			Total			Weighted Average Grant Date Fair Value
Outstanding at January 31, 2024		82,330			112,890			195,220		$	16.61
Awarded		27,042			112,256			139,298		$	19.18
Vested	-				(39,062	)		(39,062	)	$	20.27
Forfeited		(4,281	)		(14,234	)		(18,515	)
Outstanding at July 31, 2024		105,091			171,850			276,941		$	17.08

	Performance- Based			Service-Based			Total			Weighted Average Grant Date Fair Value
Outstanding at January 31, 2023		127,480			40,665			168,145		$	22.95
Awarded		64,953			105,818			170,771		$	14.20
Vested		(71,202	)		(24,603	)		(95,805	)	$	14.90
Forfeited		(32,112	)		(28,518	)		(60,630	)
Outstanding at July 31, 2023		89,119			93,362			182,481		$	19.49

The actual number of shares of common stock of the Company, if any, to be earned by the award recipients is determined over a three year performance measurement period based on measures that include revenue growth and Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) margin for the April 2022 grants. Performance measures for the March 2023 grants are revenue growth, EBITDA margin and return on invested capital. Performance measures for the April 2024 grants are revenue growth, EBITDA margin and free cash flow margin. The performance targets have been set for each of the Minimum, Target, and Maximum levels. The actual performance amount achieved is determined by the Committee and may be adjusted for items determined to be unusual in nature or infrequent in occurrence, at the discretion of the Committee.

The compensation cost is based on the fair value at the grant date, is recognized over the requisite performance/service period using the straight-line method, and is periodically adjusted for the probable number of shares to be awarded.  As of July 31, 2024, unrecognized stock-based compensation expense totaled $3.0 million pursuant to the 2017 Plan based on outstanding awards under the 2017 Plan.  This expense is expected to be recognized over approximately two years.

Stock Repurchase Program

On February 17, 2021, the Company’s Board of Directors approved a stock repurchase program under which the Company may repurchase up to $5 million of its outstanding common stock. On July 6, 2021, the Board of Directors authorized an increase in the Company’s stock repurchase program of up to an additional $5 million of its outstanding common stock.  On April 7, 2022, the Board of Directors authorized a new stock repurchase program under which the Company may repurchase up to $5 million of its outstanding common stock, which became effective upon the completion of the prior share repurchase program.  On December 1, 2022, the Board of Directors authorized an increase in the Company’s stock repurchase program, under which the Company may repurchase up to an additional $5 million of its outstanding common stock. 

No shares were repurchased during the six months ended July 31, 2024, leaving $5.0 million remaining under the share repurchase program at July 31, 2024.  The share repurchase program has no expiration date but may be terminated by the Board of Directors at any time.