Thank you. And good afternoon to you all, and thank you for joining the fiscal 2020 third quarter fiscal results conference call. I am joined here today with Lakeland’s Chief Operating Officer, Charles Robertson, and our Chief Financial Officer, Allen Dillard. For today's call, we are first going to discuss the status of operations and our financial results. Then the call will be opened up, so that we may respond to your questions. Now onto the formal remarks. For the second consecutive quarter, our revenues exceeded $27 million, which puts us on a high trajectory to the highest annual top-line results in the company's history. Third quarter revenue came in just under the second quarter level, which was the highest in the company history excluding emergency demand. The strength of our third quarter top-line performance was even more pronounced than second quarter revenues benefited from catch-up orders associated with shipping delays stemming from our ERP implementation. Approximately, $500,000 in revenues were recorded in the second quarter of the fiscal 2020 for orders that had been ERP delayed. Excluding this approximated amount, second quarter revenues would have been $27 million. So we would have been seen sequential growth of about 2% for the third quarter. We are now two quarters into using the ERP system at nearly full speed in our U.S. operations only. This represents a little more than half of our global business. We are delivering orders on time, managing our inventories better and generating other sustainable improvements. Our COO, Charles Robertson has been one of our leading ERP proponents and he noted that as an example of the benefits we are now realizing from the ERP installation, we are coming upon an important and unexpected benefit that I would like to share. Through analysis made possible by our…

Thank you, Chris. The following address is my review of the fiscal 2020 third quarter ended October 31, 2019. Net sales were $27.5 million for the three months ended October 31, 2019, essentially flat with the second quarter and up 14%, as compared to $24 million for the three months ended October 31, 2018. On a consolidated basis for the third quarter of fiscal 2020, domestic sales were $14.2 million or 52% of total revenues and international sales were $13.3 million or 48% of total revenues. In the prior year period, domestic sales were $11.8 million or 49% of the total and international sales were $12.2 million or 51% of the total. The company experienced strong sales growth domestically benefiting from easing of earlier delivery challenges associated with the ERP implementation and solid economic activity in the U.S. We experienced 20% year-over-year growth in the U.S. In Mexico, sales of $900,000 increased by 12%. Sales in Canada of $2.6 million, increased 25%. Latin American sales of $1.9 million grew 19%. Europe and the U.K. sales of $2.4 million increased 8%, and other foreign sales led by Russia and Kazakhstan, but excluding Asia of under $1 million was just up from $100,000 and sales from our Asian region, which is dominated by China had sales of $4.6 million which declined by 15% from $5.4 million. Foreign currency - foreign exchange currency translations negatively impacted sales in the UK, Europe, Canada and China as reported on a consolidated basis by approximately 2% or $250,000 under $180,000 was recorded for FX adjustments in third quarter 2020 versus $235,000 in the prior year period. The company has used minimal hedging year-to-date in fiscal 2020. As we mentioned last quarter with respect to the market in China, we do not anticipate a recovery unless the…

Thanks, Allen. We remain very encouraged by the company's direction and progress, including potential cash flow generation, which would be an even greater catalyst to encourage us to buy more shares utilizing the existing buyback program in place. As we work toward the close of fiscal 2020, we believe we are very well-positioned with an impressive array of products for basic daily use and specialized applications. The diversified and optimized manufacturing presence around the world that provides us with flexibility to navigate the current macroeconomic environment, improved financial health and a solid global team to capitalize on the opportunities ahead. That concludes my remarks. I will turn the call back to the operator to begin the Q&A session.

[Operator Instructions] Thank you. Ladies and gentlemen. We'll move first to Dave King at ROTH Capital Partners.

Thanks. Good afternoon. I guess, first on the China promotion, do you have with the basis point impact to gross margin was in the quarter and then, I guess more importantly do you plan to continue that promotion either in Q4 or as we look forward to kind of capture market share, given some of the macro things you talked about? Thanks.

Alex or Dave, this is Charlie Robertson.

Hey, Charlie.

The second part of your question first, no, that was a celebration for the 70th anniversary of the People's Republic of China and we do not anticipate it - in continuing - it ended at the end of October. The discount was up between 7% and 10% and it netted us about an additional $580,000 in sales. So, we're looking at about $58,000 in discounts. So, we are talking about maybe what, 30 basis points. Somewhat like that.

Okay. That’s helpful. And then, okay, that makes sense. And then, so it sounds like that was a specific promotion, but no other plans in terms of any other kind of China promotions as we as we move forward to try to capture share.

No. No it's our plan to - one of the things that we're - one of the headwinds we are encountering there is, Chinese nationalism. We've always built our products as a premium and as a U.S. company. So we are adjusting to that. Our products are as Chinese as any Chinese product that’s made from their Chinese raw materials by Chinese people in Chinese plants. So, we are now repositioning our product line as a Chinese product line.

Okay. That helps. Then, switching gears a bit, bookings, backlog, everything is going up, but obviously there is some of these macro pressures in China. But then also just the PPNE industry disruption. Just how should we be thinking about the pace of top-line growth moving forward, just all-in in the fourth-quarter, but then also year ahead? Just what are the high-level thoughts there? Thank you.

We anticipate a continuation of the current growth rate. We are actually building and have strategic plans that we're developing to support that into the future. A critical element of that is continuing the ERP rollout. We've seen unexpected and unanticipated benefits that actually make us or provide opportunities that we had never anticipated into the future. The key for us is going to be aligning our current inventory reduction and reducing the right parts of our inventory, so that we can continue to support this growth trajectory and that's the hard part internationally, because we don't yet have ERP to assist with that. And as we roll it out, that will be the tailwind for growth.

Okay. That helps. And then, last one for me. On India and Vietnam, should we be expecting some of the margin pressures that occurred in the quarter to continue at all into Q4? And then, do you – is the plan to move any of your existing production from China to those countries? Or it sounds like now, it might be more about putting incremental growth there. I guess just where do things stand? And what's the strategy for those two markets on a production side moving forward? Thank you.

Well, I think, we've largely, in the comments, we talked about $2.7 million overbuilding because of ERP. That led to our overbuilding in our India and Vietnam plants. We've now lost a 100 people, I believe it was Allen’s number. That amounts to a rightsizing of those operations in my estimation. So, I don't think we're going to continue to see those levels of curtailment. What we may see is a slowdown, reduced workdays, but we're not going to see out and out curtailment. Especially, given the growth trajectory that we anticipate while we opened Vietnam because of pricing pressures from China and not because of international trade, one of the things that the trade war has done is accelerated our move - our transfer of technology from China into Vietnam. And Vietnam is dealing with that at an accelerated rate. So I think we've got the majority of what we're going to move there already in place. Now it is a question of ramp up on sales team and the other more complex technologies.

Okay. That helps. Alright. Well, thanks for taking my questions and good luck for rest of the year.

Thank you.

[Operator Instructions] We’ll move next to Alex Fuhrman Craig-Hallum Capital.

Great. Thank you very much for taking my question and congratulations on another really strong quarter. Just from a high-level perspective, would love to understand as you build your business back up here and it looks like you're on pace to exceed a $100 billion# in revenue. Can you give us a sense of, what does your customer file looked like in terms of industry groups you're targeting today compared to what it was four or five years ago? Is it a similar mix? Or have there been certain end-user groups that have really helped to drive that growth?

It decidedly does not look to same. What was it? Five years ago, we – when the fracking shutdown, we were about 25% to 26% dependent on oil and gas and we determined at that point that we didn't want to repeat that scenario. Not just the fact that the business was down and we had to replace that in and of itself necessitated our going elsewhere. The places we're looking and we've talked about this in prior calls, pharmaceutical cleanrooms, electric utilities, we're just barely scratching the surface of those markets right now. The bulk of our growth has come across a broader spectrum of our businesses. It is industrial. It’s not all oil and gas. It's not the cleanroom markets. We're seeing a general lift. When you report, 14% growth in the U.S., 9% growth internationally, it’s a - we're not seeing the economic problems that are being reported about production slowdowns in industrial output. We are not seeing that yet.

Okay. Thanks. That's really helpful. And then, if I could get a little bit more color on something that was mentioned in the prepared remarks, I think this might have been your comments, Chris. But just about as you're going through the benefits of the ERP system, it sounds like you've identified some pretty significant savings on containers. Can you can you talk a little bit more about that? And I think you had mentioned Chris 200 basis points is basically how much cost could conceivably be taken out based on some of these extra container fees that you paid in 2019? That's obviously a pretty huge number. Can you give us a sense of when you might start to see those savings? And then, are there any offsetting costs that you need to spend in order to get the containers free sooner to be able to return them? Just anything you can tell us to help us make sense of that and when we should expect to see the benefits will be very helpful?

Okay. Prior to putting in this ERP system, we generally carried a fairly heavy inventories. The ERP system is allowing us and there's still about another year of improvements we can make on the supply chain and the supply chain, for the most part can start in China and end at the end-user's door, which is our ultimate customer. That can be a 180 days. And the ERP should allow us to reduce that by almost 90 days. And so that reduces a lot of expenses. It reduces the amount of inventory you are carrying. But the ERP basically allows you to do better production planning, which reduces inventory, reduces expenses, reduces the time in the supply chain, which means faster inventory turns, which means higher return on equity. And we still have a good year of improvements left in the United States only. Okay. That's half the business. But it's basically moving stuff from China through our warehouses in the U.S., to the end-user directly or indirectly through the distributor, much, much faster. And that just really improves your margins, improves your earnings, improves your return on equity, improves everything. Then we've got a foreign part. In other words, getting China online, because it's the big production operation. And so, that their inventories are moving faster. They are being able to cut and manufacture better, because when you have a - when you have the big day, when you're able to analyze the big data of a good relational database, you can sit there and say, well, I've got ten different orders from ten different Lakeland countries. And you can put the manufacturing together more efficiently. All of a sudden you realize, I've got seven orders from seven countries and they all want the same thing. Let's cut and sell them all at the same time. Okay, even though we're going to split them up in China, they're going to go out to different places. We don't see that right now. Because it's just too much data to analyze by hand and we were far behind. But now we've got a relatively modern ERP system. So, it is the whole supply chain, expense and turning the inventories quicker. And once you turn inventories quicker, the cash flow really picks up. And most people, particularly the quant see that immediately.

Okay. That's great. That's really helpful. Thank you. Chris.

[Operator Instructions] I currently have no other questions holding. I'll turn the conference back to management for any additional or closing comments

Well, we appreciate your participation on Lakeland's fiscal 2020 third quarter financial results conference call. We continue to be poised for continued growth of sales, market share attainment and profitability in fiscal 2020, which we believe will deliver value for our shareholders. If you are an institutional shareholder or potential investor, we will be presenting at the LD Micro Conference tomorrow in Los Angeles and look forward to seeing you there. Indeed, we are here right now. Thank you and good bye.

Ladies and gentlemen, that will conclude today's conference. We thank you for your participation. You may disconnect your phone line at this time and have a great day.