Good day, ladies and gentlemen. We appreciate your patience. Welcome to the Lakeland Industries Fourth Quarter Fiscal 2020 Financial Results Conference Call. All lines have been placed in a listen-only mode and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host for today, Mr. Charles Robertson. Sir, the floor is yours.

Okay. I'd like to begin with our safe harbor statement. Before we begin, parties are reminded that statements made during this call can contain forward-looking information within the meaning of the Securities Act of 1933 and the Securities Act of 1934. Forward-looking statements are all statements other than statements of historical facts, which reflect management's expectations regarding future events and operating performance and speak only as of today, April the 15, 2020. Forward-looking statements are based on current assumptions and analyses made by the company in light of its experience and its perception of historical trends, current conditions, including business affairs pertaining to the COVID-19 pandemic, expected future developments and other factors it believes are appropriate under the circumstances. These statements are subject to a number of assumptions, risks, and uncertainties and are factored into the company's filings with the Securities and Exchange Commission; general economic and business conditions; the business opportunities that may be presented to you and pursued by the company; changes in law or regulations; and other factors, many of which are beyond the control of the company. Listeners are cautioned that these statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in any forward-looking statements. All subsequent forward-looking statements attributable to the company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. With that, I'll move on to our comments. Good afternoon. I'd like to thank you for joining our fiscal 2020 fourth quarter and full-year financial results call. I'm joined here today by Lakeland's Chief Financial Officer, Allen Dillard. As many of our followers know, I was appointed President and Chief Executive Officer of Lakeland Industries on February 1 of this year. This is the first quarterly earnings call in nearly two decades that is not being led by Chris Ryan. It is an honor to succeed Chris as our CEO. He held the title through the end of our fiscal year 2020 and it is fitting that it was a historic year, marked by the highest levels of revenue in the company's history for the fourth quarter and full year alike. Under Chris' leadership, we've made incredible progress in replacing DuPont and Tyvek-related sales with our own products and taking considerable market share away from them and others, while expanding and transforming the company to become a major player in the global personal protective equipment, or PPE market. As a founding investor in Lakeland and a member of its leadership team for more than 30 years, we are fortunate to continue to drive forward with Chris as our Executive Chairman as of February 1. I'm fortunate to have worked alongside him for the past 16 years, most recently as Chief Operating Officer before being appointed CEO, and I share his vision for growth for Lakeland. So with a focus on strengthening our management team and introducing new perspectives into Lakeland, we were pleased to add Allen Dillard as our Chief Financial Officer in the middle of fiscal 2020. This team has made considerable operational and financial progress this year, and we continue to work very hard to address our organic growth initiatives as well as our response to the COVID-19 pandemic. Lakeland's leadership team is bolstered by a deep bench of talent globally, particularly within our senior and middle management ranks. Our managers coordinate and direct the efforts of approximately 2,400 employees worldwide. The differentiating term here is employees, since our key competitors rely predominantly on outsourcing manufacturing. Owning our manufacturing facilities, managing our own supplier relationships, and having our own employees is a significant competitive strength. In the aggregate, it equates to manufacturing resilience. Our employees have risen to the challenges presented by COVID-19. We have been able to add production capacity, move production between facilities, work with our supply chain partners to assure timely delivery of raw materials, and distribute garments from our various manufacturing and warehousing facilities around the world as demand and market conditions necessitate. In so doing, we remain focused on supporting our day-to-day customers and responsibly addressing COVID-19-related demand. We are confident in our ability to build on the success achieved in fiscal 2020 to navigate the challenges and opportunities presented by COVID-19. However, before we can service that demand, our first duty is to ensure the safety of our team globally. We are pleased to report thus far that our workforce is healthy and continues to abide by all relevant safety guidelines. I'd like to congratulate our employees who have risen to the occasion to keep our workplaces and their communities and families safe, while contributing to our efforts to increase production. Lakeland's manufacturing facilities in China, Vietnam, and India produced disposable protective garments and chemical suits, including our popular line of sealed seam garments. These types of garments afford the wearer maximum protection from infectious agents and are commonly requested during viral outbreaks such as coronavirus. The company is experiencing heightened demand for these products, and last month we announced that Lakeland was accelerating its previously planned expansion of our sealed seam manufacturing capacity by 30%. In the last two years, Lakeland has invested approximately $6 million to expand its global manufacturing footprint into Vietnam and India, update and add IT systems, improve efficiencies, and increase margins. These investments have proven not only timely but effective as evidenced by our current results. Our fourth quarter saw a continuation of strong demand we experienced in the third quarter in the Americas and an improvement in our sales in China to the extent that we were on pace for another quarter with revenue in excess of $27 million and record annual revenue of about $107 million. This is before the addition of late fourth-quarter demand of approximately $1 million for the coronavirus outbreak in China. In our fourth quarter results, we reported not only an increase in revenues to a record level but improvements in our gross and operating margins as well as all major financial performance metrics including further improvements to our balance sheet. Allen will address many of these in his remarks. We have ample liquidity to advance our ongoing business initiatives while aiding in the exigent circumstances relating to the coronavirus outbreak by moving our previously planned capacity expansion forward by approximately nine months from the first quarter of fiscal year 2022 to mid-April and May of this year. The increase in our seam sealing capacity allows us to meet our immediate coronavirus-related demand, combined with our regular industrial demand and have increased capacity required to continue revenue growth when the coronavirus demand subsides. Our manufacturing approach even for times of emergency has always been to place a priority on satisfying the needs of our traditional customers. Our organic growth has been robust for a few quarters now. COVID-19 demand, significant as it is, remains incremental and requires management of our growth so that we do not trade one customer's protection for another customer's protection. It is our mission to continue to grow organically in excess of the overall market, which is estimated at approximately 7% worldwide. We've exceeded this growth rate in both our fiscal 2020 third and fourth quarters even without estimated COVID-19-related sales. Since late January 2020, we have fielded orders in connection with what we believe is demand arising from the coronavirus outbreak. Since the large majority of our orders come in through our globally diversified customer base of distributors who then resell the garments, it's difficult for us to ascertain whether products are being purchased for stocking purposes in anticipation of future orders or for immediate use by end-users. For this reason, we are not disclosing specifics on the orders being received prior to our quarterly results report as some of these orders are likely being held in inventory by distributors and end-users for future use. This is often the case during crisis situations. But the COVID-19 pandemic is having an unprecedented impact on most businesses in the overall global economy. In China, Lakeland personnel returned to work four days prior to the end of their scheduled Chinese New Year holiday in order to meet the demand for protective garments in Wuhan. Since returning to work in China, our facility has been running at full capacity for 12 hours a day on all coronavirus-related lines. Our first shipments for coronavirus-related orders took place in the last two weeks of our fiscal fourth quarter. On February 14, 2020, we increased our hours of operation in our Vietnam and India plants, which were previously curtailed in order to draw down inventories from approximately 40 to 45 hours per week to 12 hours per day seven days per week. In aggregate, we estimate these schedule changes amount to a nearly 50% increase in capacity above our curtailment schedule and about 20% above our normal operating schedule for products with COVID-19 applications. The additional seam sealing equipment, once installed, will further increase this capacity in Vietnam. Lakeland was well positioned for an emergency response at the onset of the coronavirus. We have leveraged our inventory position, previous investments in ERP planning and logistics tools, and flexible manufacturing platform with our considerable experience in other emergency events to formulate a COVID-19 response plan that will sustain our strategic growth plans so that we emerge from this event in a position to continue our healthy organic growth rate. To this end, Lakeland's priority through these kinds of events is to remain focused on satisfying the needs of our traditional customers and to service emergency demand to the extent that we have excess capacity or to the extent that we can quickly increase capacity. This focus on our traditional markets allows us to develop additive new customer relationships and increased market penetration that serves as a hedge against economic downturns or excess inventories within distribution channels. Our plan is working. Our current order backlogs have filled our manufacturing capacity through July and August for some products. This has not only ended our manufacturing curtailment but now has us running at maximum capacity with inventories reduced to more normal operational levels as we seek to balance COVID-19 emergency needs with the additional demand that is not coronavirus-driven within some of our vertical markets. We have orders contracted for delivery beyond August 1, 2020, and additionally, we have significant new accounts that are in development for the second half of the year. Forward bookings and potential new accounts combined with our many market drivers, market diversification, and resilient manufacturing capability position us well for the second half of the fiscal year FY 2021. But these are extraordinary times and we must be prepared for any eventuality. This includes the possibility of temporary closure of our customers' or suppliers' manufacturing facilities and the uncertainty of the oil sector, a market from which we derive approximately 20% of our sales. Perhaps the preliminary oil production reduction agreement between OPEC and its allies announced last week will boost this industry. Our focus will remain on organic growth initiatives, inventory management, and the generation as well as preservation of cash, so that we may invest accordingly to build upon the terrific year that we had in fiscal 2020. That concludes my remarks. I will now pass the call to Allen to provide a more thorough review of the company's financial results.

Thank you, Charlie. The following address is my review of the fiscal 2020 fourth quarter and full year ended January 31, 2020. Net sales were $28.2 million for the three months ended January 31, 2020 as compared to $25 million for the three months ended January 31, 2019. For the third consecutive quarter, our revenues exceeded $27 million. Coronavirus-related demand, as best we can tell, added approximately $1 million to our fiscal 2020 fourth quarter sales, which were recorded in the final two weeks of that period. The majority of these orders were fulfilled with products already in inventory. Without the incremental COVID-19 demand, fourth quarter revenue would still have reached a record level for the period with an increase of 9% from the prior year, a growth rate that is well in excess of what we believe to be the industry growth rate. Net sales increased to $107.8 million for the fiscal year ended January 31, 2020, up 9% as compared to $99 million for the prior year. Sales in the second and fourth quarters reached the highest levels in the company's history for their respective periods. On a consolidated basis for the year, domestic sales were $55.9 million or 52% of total revenues and international sales were $51.9 million or 48% of total revenues. This compares with domestic revenues of $49.9 million or 50% of the total and international sales of $49.1 million or 50% of the total in fiscal 2019. In fiscal 2020 versus 2019, sales in the U.S. increased by approximately $6 million or 12%, while international sales increased $2.8 million or 5.7%. Among our major international operations, sales in the U.K. were down less than 1% at nearly $9.4 million due to concerns related to Brexit. Sales in Mexico were down $700,000 or 20% due primarily to the loss of a large customer. Sales in Asia were up just under 1% at nearly $18.2 million, where China is our largest market and continues to experience limited economic growth. Sales in Canada were up $1.1 million or 12.6%, driven by demand for fire products or turnout gear. And finally, sales in Latin America increased $1.7 million or 25.3% as we expanded our customer base in Chile and Uruguay. As previously disclosed in the third quarter of fiscal 2020, we initiated a curtailment of production and staff in Vietnam after having built up sufficient inventories that we believed would be needed given the disruption we had anticipated with the ERP system implementation. The curtailment added to our gross margins during the middle of the fiscal year. The ERP system has now been in use for three quarters and is yielding most of the intended improvements to enable enhanced efficiencies and productivity, as nearly half of our total revenues are processed using these capabilities. That said, we did have a material weakness in our control over financial reporting pertaining to inventory valuation that has been reported in accordance with SEC reporting guidelines and have identified and implemented a specific review and remediation program. We will provide updates on that remediation as we progress. Aside from this issue, the ERP system, higher revenue levels, and margin improvement strategies, including a price increase for select products during the year, have led to higher gross margins. Tariff increases on products made in China and sold in the U.S. had minimal impact on our financial results, since we have been able to ship most of the manufacturing of these products to our Vietnam and Mexico plants or instituted price increases to cover the differential. Gross profit of $10.6 million for our fiscal 2020 fourth quarter increased from $6.9 million for the same period of the prior year. Gross profit as a percentage of net sales was 37.7% for fiscal 2020 fourth quarter, an increase of 10 percentage points compared to the same period in 2019, and was driven by volume, price increases, and fully reserved stock that we were able to sell into the COVID-19 demand. For fiscal 2020, gross profit was $37.9 million, an increase of $4 million or 11.8% from $33.9 million in 2019. As a percentage of net sales in fiscal 2020, gross margin was 35.2%, up from 34.2% in 2019. Operating expenses increased in the quarter and for the full year as our business substantially grew, but decreased as a percentage of revenue, a reflection of our vigorous attention to cost management efforts. Operating expenses increased 5.5% to $8.9 million for the three months ended January 31, 2020 from $8.4 million for the three months ended January 31, 2019. Operating expenses as a percentage of net sales was 31.6% for the three months ended January 31, 2020 as compared to 33.7% for the three months ended January 31, 2019. The increase in operating expenses primarily relates to higher shipping, currency adjustments, and commission and compensation pertaining to the higher sales volumes, partially offset by reduced G&A expenses, primarily equity compensation and legal fees. Operating expenses of $32 million in fiscal 2020 increased $1.9 million, or 5.6% from $30.6 million in 2019 while remaining at approximately 30% and 31% of sales respectively. Lakeland reported operating profit of $1.7 million in Q4 2020, up from a loss of $1.5 million in the prior period. Operating margins were 6.1% for Q4 2020 and were a negative 6% for the prior year. Operating income in fiscal 2020 of $5.9 million increased $2.3 million or 65.4% from $3.6 million in 2019. All major operating regions, except Mexico, were profitable or breakeven in fiscal 2020. On the higher pre-tax income, overall taxes increased. Income tax expense consists of federal, state, and foreign income taxes. Income tax expense was $500,000 for Q4 2020 and $2.5 million for the full year of fiscal 2020 as compared to $400,000 in Q4 2019 and $2 million for all of fiscal 2019. Fiscal 2020 income tax expense included a non-cash charge of $1 million associated with the GILTI component of the Tax Act of 2017. This is more completely discussed in our SEC filings. As a reminder, we have substantial tax shields pertaining to our U.S. and corporate income tax. However, we are subject to taxational profits in certain of our foreign subsidiaries, as well as the new GILTI tax, which has been impacting us this fiscal year. Lakeland's net operating loss was approximately $15.9 million at January 31st, 2020, down from $20.6 million at the beginning of the fiscal year. Fourth quarter 2020 net income was $1.2 million or $0.15 per basic and diluted share compared to a net loss of $1.9 million or $0.24 per basic share in the prior year. Net income for fiscal 2020 was $3.3 million or $0.41 for basic and diluted share, which included the non-cash GILTI tax expense compared to net income in fiscal 2019 of $1.5 million or $0.18 per basic and diluted share. The improved results in fiscal 2020 reflect higher sales and gross margin expense management, and operating efficiencies due in part to the ERP system and factory utilization. The company had 8,005,927 basic shares outstanding at January 31st, 2020. 37,953 shares were repurchased in the fourth quarter as part of the company's $2.5 million stock buyback program that was approved in July of 2016. Approximately $500,000 was spent to repurchase shares in fiscal 2020. To date, $1.7 million has been spent to repurchase shares with just over $800,000 remaining available under the buyback program. At January 31st, 2020, Lakeland had cash and cash equivalents of $14.6 million, up from $9.5 million at the end of fiscal third quarter and an increase of $1.8 million or 14% from $12.8 million at the beginning of the fiscal year. Inventories were increased by $1.9 million year-over-year, but were down over $3 million from Q3 as we continue to focus on improving cash conversion. We actually benefited from this increase in inventories as we began to respond to COVID-19 demand in late Q4. At the present time, our sealed seam finished goods inventories remain below normal stocking levels in all of our warehouses around the world and we are now quoting July deliveries for new orders in many cases. We're servicing coronavirus orders only to the extent we have capacity beyond what is required to service our traditional customers and organic growth targets. We believe this process upholds our long-term growth strategies, supports our commitment to our customers, and contributes to the COVID-19 response. Accounts receivable at year-end increased by nearly $1.2 million due to higher sales as DSOs remain relatively steady at 60 days or less. Accounts payable increased by $1 million and shareholders' equity increased by $1.9 million. Total assets reported increased $4.7 million in the year from $94.7 million to $99.4 million in part due to the impact of the new lease accounting requirements. Total debt outstanding at January 31st, 2020 was $1.2 million, down $100,000 from $1.3 million at the end of fiscal 2019. The company has no borrowings outstanding on its $20 million revolving credit facility. The company is currently negotiating a new revolving credit facility to provide for greater financial flexibility and reduced administration expense. Working capital of $66.9 million, including cash at January 31, 2020, increased $1.8 million during the fiscal year. Capital expenditures were approximately $300,000 during the fourth quarter of fiscal 2020, down from $600,000 in the prior year period. For the year, capital expenditures were $1 million, down from $3.1 million in fiscal 2019. Major investments were made in prior years, as Charlie mentioned during his remarks. The majority of the spending in fiscal 2020 was allocated towards extending the global rollout of the ERP system and additional manufacturing capacity in Vietnam and India, which most of which has been substantially completed. Fiscal 2021 CapEx is budgeted at approximately $2 million, primarily for global ERP rollout and strategic capacity increases. Adjusted free cash flow in fiscal 2020 was over $4 million, an increase of $3.8 million from $500,000 in the prior year driven by increased profitability and the reduction in capital expenditures. We have seen efficiencies come into play to enhance our results and we will continue to manage all areas of expenses as we invest in our growth. The operating leverage in our business on higher sales volume has enabled us to drive better returns in 2020. We believe there remain opportunities for top-line growth and further performance improvements using the ERP system along with other means for increasing margins and cash flow through fiscal 2021. This is of course amid the current business conditions, which seem unpredictable given the economic impact globally from COVID-19. Challenges remain particularly with COVID-19, which has been modifying the outlooks and the business decisions for many industries around the world. In turn, we have seen in the fourth quarter and upon entering into the first quarter that certain of our newer high-margin products are not the priority with demand globally centered around disposable and chemical product lines. In any case, Lakeland is in the best operating and financial condition it has ever been and we are excited for what lies ahead in fiscal 2021. That concludes my remarks. I will turn the call back to the operator to open the call for questions.

Thank you. We'll go first to Alex Fuhrman at Craig-Hallum Capital Group.

Thank you for taking my question, and congratulations on a strong year as everyone steps into their new roles heading into 2020. I wanted to inquire about the core business beyond the impacts of coronavirus. It appears that, aside from emergency demand, the business has had a very strong quarter. Could you provide some insight into the sources of that growth? Are there specific industry groups that have significantly contributed to the growth observed in the last few quarters? I'm interested in your outlook for the business outside of any emergency demand.

It's challenging for us to distinguish that, as many of our sales have come through our standard distribution channels. One aspect related to COVID-19 that may persist even after the pandemic is the increase in institutional cleaning services utilizing our products. We've received some substantial orders from that sector. Conversely, our chemical and fire sales are not linked to COVID-19, and as part of our growth strategy, we are focusing on those higher-margin product lines for the second half of the year.

Okay. That's really helpful. Thanks. And then just thinking about the different geographies where you're active. I know you have a lot of your resources for sales and marketing geared towards emerging markets. Can you talk about the growth that you've been seeing in emerging markets and what your outlook would be there for the next couple of years and what you're doing to go after those opportunities?

We are in the process of revising our sales strategy for international markets. We have implemented some changes in North America that we believe will enhance performance in other developed markets, particularly in Europe. We are already utilizing these systems in China and Asia, with plans to roll them out in South America next. We identify India, the Middle East, and Latin America as the regions with the most significant growth potential as we move ahead. We are aiming to bolster our efforts in these areas with additional sales staff and are utilizing our ERP system to gain improved visibility and modeling of demand to better serve these markets.

Okay. That's really helpful. I appreciate those answers and look forward to catching up again soon.

All right, Alex. Thank you.

We'll move next to Gerry Sweeney at Roth Capital.

Good afternoon, gentlemen. Thank you for taking my call, I really appreciate it. I wanted to discuss the COVID aspect of the business. I understand you may be hesitant to elaborate, but could you provide any qualitative insights regarding inbound calls or orders to distributors that are related to COVID now compared to the end of January or the beginning of the quarter, if you feel comfortable doing so?

Yes. Yes, Gerry, calls certainly haven't dried up. There's still people looking for product, but I think that the most interesting dynamic that's going with that is looking at the second half of the year. There are a number of industries, pharmaceuticals, medical that have run into supply issues, not necessarily with our products, but masks, medicines, and that kind of thing that are looking to assure that they don't repeat the situation in the future. To that end, we talked about booking business out into the second half of the year and we have a number of people, and this is unusual for us, that are booking months in advance, willing to wait for the product, because I can only assume that their demand is not based on what they see as a business or an immediate use of it, but it's for stockpiling and preparation, and I'm not talking government stockpiling here. I'm talking about individual companies.

Got it. Filling their own sort of stockpiles.

Yes.

Got it. And then sort of the next step was I think we discussed in the past, COVID potentially giving you an opportunity to move in with new customers. And I think you even touched upon it slightly with the previous answers with companies that may not have been able to be supplied by their normal or their previous suppliers, et cetera. So, it opens the door essentially. Have you seen any of that coming through?

Yes, we have successfully managed that. If you look back at the timeline of COVID-19 and the point when the World Health Organization declared it a pandemic, you'll notice that considering where our products are made in China, there is a 45-day window from identifying the emergency to delivering the first products to the U.S. or Europe. Those products are only just starting to arrive, unless they are shipped via air freight. Therefore, the demand is just beginning to be met.

Got it. Okay. Switching gears slightly, on the last call you mentioned that the ERP system provides better visibility into logistics and has helped with issues like penalties for excess unloading times. You suggested there might be a potential improvement of about 200 basis points in gross margin. Gross margins have increased this quarter, so I’m wondering if that improvement is related to the ERP system. You highlighted some specifics; how should we view this moving forward?

Gerry, if you don't mind I'll pass that to Allen. He is the expert on all things margin-related.

Yes.

Yes, Gerry, that was a contributing factor to our margin improvement as we had planned. However, there were several factors we experienced during the quarter, including product mix, pricing, and our ability to use the system for manufacturing allocations, which helped improve margins. We also utilized existing stock. So, it was a combination of factors that really drove our margin improvement. We believe that the ERP and some of the pricing and product mix will continue to support this increase as we move forward. Overall, it was the interplay of all these factors that contributed. It's difficult to precisely quantify the impact of the ERP on that improvement, but it certainly enabled us to adopt a more aggressive strategy in managing our manufacturing allocations.

Got it.

If I can add to that, it's only installed in half of our business at this point.

Yes.

So we have a lot of low-hanging fruit elsewhere within the company to go get with this.

To summarize the margin situation, it appears to be largely influenced by a mix of ERP and pricing, which seem to have a more lasting impact, while some aspects related to inventory or current stock may be more temporary in terms of their effect on margins. Would you say that's an accurate summary?

That's exactly right. Very fair.

Okay. And then, obviously, I think the second half of the ERP rollout is more focused on international markets. The first half was primarily centered on North America.

Yes, we are nearly fully installed in the U.S., which represents about half of our business throughput. We will begin the first stages of our international rollout in the latter half of this year. We have a strong plan in place for this. Our objective is to gradually reduce the number of different systems we use to manage our business. With seven or eight international markets, consolidating to a single system will greatly enhance our management capabilities and improve our manufacturing allocation efficiencies.

I appreciate taking the time to answer my questions and congratulations on a great quarter and year.

Thank you, Gerry.

We'll go next to Andrew Pike at AN Valuations.

Hi. Good day everybody. My name is Andrew Pike. First of all, I'd like to say this is a very impressive company, it really looks great. This is my first time on one of your conference calls, so there might be some things that you've discussed in previous calls that I'm not privy to. I apologize if a question seems to be more familiar to some of the other people on the call. I'm trying to get a better understanding of what the factories look like from the inside. Do you have textile mills where you're producing cloth, or are you just cutting cloth that you've sourced from others? Is it mostly manual assembly with long benches and people working, or is there heavy machinery involved?

No, we're light industrial. We're not a textile mill. We are a cut-and-sew operation assembling garments in various countries around the world. The raw materials we use are partly our own design but manufactured to our specifications by several different textile companies in the U.S., Europe, China, India, and various other places around the globe. One of the things we take pride in, especially with our core products, is the development and qualification of multiple suppliers for our products. That's one of the reasons we won't.

No, sorry, go ahead.

That's one of the reasons we won't manufacture our own fabrics. We would become too reliant on suppliers of a polymer, and there are far fewer of those compared to spunbonded polypropylene or film.

Right. Okay. So, when there was $6 million of CapEx spent over the past two years focused on Vietnam, India, and IT systems which I believe to be the ERP systems. If I understand that it's light manufacturing mostly cut and sew, is it correct that Vietnam and India that was just an expansion of the plants that you expanded it? Or how does that happen?

No. Those were new plants, new plant installs. Startups.

That's new locations?

India was an existing location, but it was a glove plant. We refitted it and turned it into a cut-and-sew operation, and Vietnam was a ground-up operation. Greenfield.

Fantastic. Awesome. And sorry, just flipping pages here. I believe you said $2 million coming up in 2021 if I understood correctly. Is that going to be ERP? Or are you building out more plants?

A portion of that will involve the international expansion of ERP. Another part will focus on increasing capacity at existing facilities, and some will go toward routine maintenance capital to replace old and worn machines along with other plant equipment.

Thank you. Before I take up too much time, I have one more question. I'm trying to understand your competitive strategy because there are some significant players in this market. Are you focusing on speed and customization to compete with them, or are you looking to reduce production costs, which seems challenging? What is your strategy for competing against these larger companies? How do you plan to succeed in this environment?

Our advantage against the major players in the market, such as DuPont, Kimberly-Clark, and Ansell, is that we own our manufacturing. They rely on contract manufacturers and usually operate on a three-month rolling forecast. In the event of an emergency, the fastest they can respond is within 30 days, which adds another 30 days to the timeline.

Right.

Owning our own product allows us to be agile in markets like China and Vietnam. When we encountered a trade war, we simply shifted our production from China to Vietnam without incurring any duties, effectively resolving the issue. By owning our own plants, we also ensure better control over the supply of raw materials. This gives us authority over our vendors and helps us maintain strong relationships with them, rather than relying solely on our suppliers.

Okay. Okay. So you can react faster. And you've got better control over the quality for example?

Correct. We also manufacture an extremely wide range of products compared to our competitors. In disposable and chemical categories, we compete with DuPont and Kimberly-Clark. In turnout gear, we face competition from MSA and Globe, Fire-Dex. We also compete in electric arc flash clothing, and there are very few companies that offer as broad a range of PPE as we do. In fact, I can't think of anyone.

Thank you for answering my questions. I wish you much success in the coming year and hope everyone stays healthy.

Well, thank you, sir.

And that's all the time we have for questions today. I'll turn the conference back to management for any additional or closing comments.

Thank you very much. We appreciate your participation in Lakeland's fiscal 2020 fourth quarter and year-end financial results conference call. As we look ahead to fiscal 2021, we continue to be poised for growth in sales, market share attainment and margin expansion, which we believe will deliver value for our shareholders. Thank you again for joining us on today's conference call. Goodbye.

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