Before we begin, parties are reminded that statements made during this call contain forward-looking information within the meanings of the Securities Act of 1933 and the Securities Exchange 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, December 9, 2021. Forward-looking statements are based on current assumptions and analysis made by the company in light of its experience and its perception of historical trends, current conditions, including business affairs, the COVID-19 pandemic and subsequent variants, expected future developments, and other factors that management believes are appropriate under the circumstances.
These statements are subject to a number of assumptions, risks, and uncertainties that are factored into the company's filings with the Securities and Exchange Commission, including 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 attributed to the company or person acting on its behalf are expressly qualified in their entirety as cautionary statements. At this time, I would like to introduce you to your host for this call, Lakeland Industries Chief Executive Officer, Charles D. Roberson. Mr. Roberson, the floor is yours.
Thank you and good afternoon. I'm joined here today by Lakeland's Chief Financial Officer, Allen Dillard. We appreciate you taking the time to join our fiscal 2022 third quarter financial results conference call. In our fiscal 2022 third quarter, Lakeland reported another quarter of consistently strong financial performance, further reinforcing the sustainability of the improvements that we have made to our business over the past two years. Revenues exceeded $30 million for the quarter, an increase of 9% sequentially from the second quarter. We maintained our gross margin improvement over pre-pandemic margins and continued to exercise discipline in our operational expenses, resulting in another profitable quarter. Concurrent with these efforts, we developed and implemented strategies to mitigate current business threats and prepare for our long-term growth and sustained profitability.
We increased our finished goods and raw materials inventories, bringing them in line with anticipated lead times to mitigate threats posed by increasing freight costs and supply chain disruptions. We continued moving forward with our planned near- market manufacturing expansion that will be required to meet future growth targets and to improve product lead times. We made a strategic investment in the connected worker market that we believe to be one of the fastest growing segments in worker safety. We repurchased approximately $900,000 of outstanding shares. Allen will provide greater detail about these developments in his comments, but we take pride in the fact that all of this has been accomplished amid the volatility in global business conditions resulting from the COVID-19 pandemic and its variants. In fact, we experienced this volatility in the third quarter.
Previously, we anticipated that COVID- driven sales would continue to diminish quarter-over-quarter as the pandemic ran to its conclusion. This is not the case in Q3. Third quarter FY 2022 COVID-19 sales were an estimated $6 million, or 20% of revenue, compared to our second quarter FY 2022 COVID sales of $3.5 million or 13% of revenue. This is a significant deviation from our expectation for a continuous decline in pandemic-related sales. We attribute this variance to regional differences in COVID-19 preparedness and response. Our third quarter saw a wave of COVID outbreaks in Southeast Asia that resulted in greater pandemic- driven sales than we had in the previous second quarter, which was the height of the Delta variant outbreak in the U.S.
As a result, we now anticipate that COVID-19 outbreaks in developing regions of the world are likely to generate greater pandemic- related sales due to lower vaccination rates, less access to therapeutics, and lower quantities of PPE stocking or stockpiling. In developed regions of the world like North America, Europe, and other regions where access to medicine and healthcare is better and stockpiles are larger, we believe demand will be lower and less urgent if not consuming product that is already in the distribution supply chain. Additionally, we anticipate there will also continue to be a difference in the use of shutdowns and regional quarantines between the developing and developed regions of the world.
Absent more robust healthcare systems, developing regions have little choice but to lean more heavily on shutdowns and regional quarantines to stem the spread of outbreaks. Greater access to testing, vaccines, therapeutics, and medical care makes developed regions of the world less dependent on quarantines and lockdowns. The use of shutdowns in Southeast Asia during the third quarter of fiscal year 2022 resulted in flat quarter-over-quarter non-COVID sales. More recently, with the discovery of the Omicron variant, we have noted that while use of shutdowns in developed regions of the world is frequently discussed, there is an increasing resistance to putting them in place, allowing industrial recoveries to continue without significant interruption. We believe this trend will likely repeat itself as the pandemic runs to conclusion. This does not change our strategy in terms of pandemic response and traditional industrial growth.
We are well-positioned to address spikes in demand for COVID-19 PPE around the world. Having adjusted our inventory levels to accommodate longer lead times, we can respond quickly and without delay to any additional outbreaks as they unfold. Given how significantly the distribution of our geographic sales favors developed regions of the world, approximately 57% of our year-to-date through the third quarter sales were into the U.S., Canada, and Europe. We believe our projections for recovery of the industrial market and our subsequent sales projections remain accurate. This being the case, we now regard COVID-19 outbreaks as additive to our sales and growth projections, and we have the inventory and manufacturing capacity to service both spikes in COVID demand and industrial market growth. In the second quarter of fiscal year 2022, we reported excess inventories accumulating within the U.S. distribution channels.
This negatively impacted Q2 and Q3 revenues. During the third quarter of fiscal year 2022, distribution channel inventory levels in the U.S. continued to correct themselves. Based on conversations with key distributors and on available data, sales, and order data, we believe that one more quarter of correction will be required before sales begin to return to normal rates in the U.S. In the latter half of Q3 fiscal year 2022, we saw a similar situation emerge in our European markets and received confirmation from several of our larger distributor partners. It is too early to determine if this will be a recurring event that will also emerge in China and then other parts of the world, or if this event is driven by the length of the supply chains.
We will monitor the situation going forward, but either way, we believe the impact on our consolidated sales will diminish as the U.S. or North American markets represent approximately 50% of our consolidated fiscal year-to-date sales and is already beginning to recover. Other regions of the world that may be impacted account for considerably lower percentages of year-to-date consolidated sales. Europe accounts for approximately 9.6% of year-to-date sales. China, Asia Pacific, approximately 24.5%. Latin America, approximately 9.7%. Based on our geographic sales dispersion, we believe that our consolidated sales will continue to recover as the North American market recovers, even if this pattern repeats itself around the world, simply because other regions represent significantly smaller components of consolidated sales.
To summarize, we believe that we have adjusted well to the decline in pandemic sales, and that future outbreak-driven sales should be accretive to revenue, as we had anticipated COVID sales diminishing to less than 10% of sales in the third quarter and even less in subsequent quarters. Based on increased vaccination rates, development of therapeutics and medicines to treat COVID-19, we believe that future economic shutdowns will be limited and are likely to only flatten industrial recovery, not reverse it, and that the worst of distribution channel inventory issues will be behind us sometime near the end of the fourth quarter of fiscal year 2022. That concludes my remarks. I'll now pass the call to Allen to provide more insight into the company's financial results.
Thank you, Charlie. Our fiscal 2022 third quarter clearly demonstrates the resiliency, durability, and consistency of the progress made to improve our performance. Year- to- date, we continue to deliver results that reflect changes implemented beginning a few years ago with the impact of COVID-19 and its variants making our improvements harder to distinguish from traditional business operations. For the third consecutive quarter, key measures tracked to expectations as our operating metrics and balance sheet remained extremely strong. During last quarter's earnings call, we talked about the reduced COVID-related demand from the heights of the pandemic. Even as additional outbreaks and variants emerge throughout the world, causing both acute demand for our products and potential deterrent from reversion to normal industrial growth where our products are traditionally used. We reiterated that our fiscal year 2022 revenue will not decline proportionally to declines in COVID-19 sales.
This assumes all of our other business operations remain fluid, which to date has not been the case. As previously disclosed, it is becoming increasingly difficult to distinguish COVID and non-COVID demand as the amounts are smaller, the distributors are more dispersed, and COVID response often negatively impacts local industrial sales. Shipping of finished goods and transportation logistics around the world has been challenging since early in our fiscal year and is expected to remain a headwind for at least the remainder of fiscal year 2022. In addition, we are dealing with excess disposable and certain chemical products on hand with our distributor customers in developed countries, and at least in the second and third quarters, new demand related to COVID driving sales in Southeast Asia.
On a consolidated basis for the third quarter of fiscal 2022, domestic sales were $10.6 million, or 35% of total revenues, and international sales were $19.4 million, or 65% of total revenues. This compares with domestic sales of $17 million or 41% of the total, and international sales of $24.4 million or 59% of the total in the same period of fiscal 2021. Our international revenues have remained in excess of our domestic revenues for the past four quarters. Our growth as a company is primarily based on our efforts as a global distributor, which is in line with our strategic priorities since industrial growth is greater in developing nations as compared with more mature countries such as the U.S., where the industrial economy is not only growing more slowly, but there is a heightened competitive marketplace.
The revenue disclosure I just provided compares year-over-year sales. During fiscal 2021, the company experienced significant growth in sales of disposable and chemical garments, primarily relating to COVID-19 demand. As a result of cultivating new industrial customers who could not procure these products from incumbent manufacturers or their subcontractors, which is partially offset by a decline in traditional industrial spending on these and other protective apparel product lines. A comparison of fiscal 2022 third quarter to the fiscal 2022 second quarter provides a more insightful view given the more normalized business environment during these periods, although certain atypical circumstances continue to be experienced.
For the sequential comparison, our third quarter domestic sales of $10.6 million and international sales of $19.4 million improved from the second quarter of this fiscal year, when we had domestic sales of $10.1 million and international sales of $17.3 million. Sequential growth was over 9%, which includes nearly 12% growth from the international sales, where we benefited from COVID demand in Southeast Asia and 5% domestic growth. This domestic growth masks true demand for more current PPE needs since there is inventory that had been stockpiled by our customers, and they are now selling through it as the traditional economic growth surges. Within our domestic sales, we have disposables and chemical products which have been the primary lines used in the defense of COVID.
Yet many of our other product lines are showing strong growth, albeit off a smaller base. As in the first half of the year, efforts to improve gross margins have shown durability. Revenue shifting into certain international markets and into diversified product lines, particularly outside of disposables, carry better margin profile characteristics. Gross margin of $12.6 million for our fiscal 2022 third quarter matched that of the second quarter, even though we have been dealing with significant shipping challenges and supply chain limitations where our materials are derived largely from North America. Gross profit as a percentage of net sales was 42.1% for the fiscal 2022 third quarter, down from 46.3% for the fiscal 2022 second quarter and 52.3% for the third quarter of fiscal 2021.
Gross profit performance in the fiscal 2021 period benefited from the higher volumes that included direct container shipments, related factory utilization, and an improved product mix with higher pricing power. Certain of these advantages have partially abated through the end of the third quarter of fiscal 2022. The gross margin as a percentage of sales in all periods continues to track above our stated goal of 40%. As compared with the fiscal 2021 Q3 gross margin, we improved from 33.9% on $27.5 million in sales in that period to 42.1% on $30 million in sales in 2022 Q3. Our revenue mix, along with our international reach, target efforts to manage our BOM costs, pricing strategies, and factory floor efficiencies are delivering intended and sustainable results.
Lakeland reported operating profit of $4.1 million in Q3 2022, up from $3.9 million in Q2 2022, but down from $12.5 million in the prior year period. Operating margins were 13.6% in third quarter 2022, compared to 14.3% for the three months ended July 31, 2021, and down from 30.1% for the third quarter of the prior fiscal year. Through the first nine months of fiscal 2022, when COVID demand has significantly declined, we maintained operating margins of 15.6% versus 28.3% last year. The first nine months of fiscal 2022 operating margin of 15.6% is vastly improved from the pre-pandemic levels of 5.5% for all of fiscal 2020, 3.6% in fiscal 2019, and 8.8% in fiscal 2018.
Income tax expense consists of federal, state, and foreign income taxes with an effective tax rate of 31.7% in the third quarter of 2022. Our income tax expense was approximately $1.3 million. This differs from the U.S. federal rate of 21%, primarily due to foreign tax differences. Lakeland's net operating loss for U.S. federal tax purposes was fully utilized during fiscal 2021. Net income of $2.8 million or $0.36 per basic common share increased from $2.6 million or $0.32 per basic common share in second quarter 2022, and was down from $9.3 million or $1.16 per share in third quarter fiscal 2021. Amid our flexing of production in fiscal 2021 to record levels, Lakeland remained a relatively asset-light business.
Capital expenditures for our fiscal 2022 are targeted at approximately $1 million, with $100,000 spent in the third quarter and more than $500,000 spent in the first nine months of the year. This annual level is relatively consistent with the spending last year of $1.7 million. The majority of our spending this year will be on technology infrastructure to further extend these solutions to the balance of our global business and to enhance strategic manufacturing capacities. Moving to the balance sheet. Working capital was $111 million at October 31, 2021, unchanged from July 31, 2021 and up from $108.2 million at the end of the fiscal year.
The company's current ratio at the end of the third quarter improved to 9.0 to 1 from 7.5 to 1 at the end of the second quarter, which was similar to the beginning of the year. Cash of $55.5 million at October 31 was up 6% from the beginning of the fiscal year, but down from the end of the second quarter as we repurchased shares and made a strategic investment. The company continues to have no debt at the end of the third quarter and has up to $25 million available from bank credit facilities. During the first quarter of this fiscal year, our board authorized an increase in our share repurchase program to a total of $5 million.
During the second quarter of fiscal 2022, we extended that $5 million, purchasing a total of 227,454 shares during the second quarter. On July 6th, our board authorized an additional $5 million for our repurchase program, bringing the total amount to spend on repurchases in this fiscal year to $10.8 million. During the fiscal 2022 third quarter, the company repurchased $900,000 or just over 43,000 shares of common stock under this repurchase program. Total shares repurchased in the nine months ended October 31, 2021 total 271,024 shares at a total cost of $5.9 million. At October 31, a total of $4.1 million is available to the company for the repurchase of its outstanding common stock.
Our current available capital, along with the expectations for future cash flow from operations, are adequate to continue to engage in our growth initiatives. These efforts include continued investments in global technology platforms, strategic manufacturing capacity expansion, and potential M&A transactions. As previously disclosed, we commenced our M&A initiatives with our first investment for a strategic minority position in Bodytrak for $2.8 million. As Charlie discussed in his remarks today, we are very excited about this investment and we are just getting started with the development of our opportunity pipeline. This concludes our remarks. I will turn the call back to the operator to open the call for questions.
Thank you, ladies and gentlemen. The floor is open for questions. If you have any questions or comments, please indicate so by pressing star one on your touch-tone phone. Pressing star two will remove you from the queue should your question be answered. Lastly, while posing your question, please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Our first question comes from the line of Alex Fuhrman from Craig-Hallum Capital Group. Your line is live.
Great. Thanks very much for taking my question. You know, wanted to ask, I guess, first and foremost about the revenue that you saw in the third quarter. You know, obviously, it sounds like you got more than expected, more than you were expecting to get in terms of a bump from some of these COVID outbreaks that have been happening around the world. On the flip side of that, have you seen any sort of a, I guess not maybe reversing to your point, but maybe slowing down of the economic recovery? Just curious if we were to back out that $6 million of pandemic- related sales, you know, that would put us pretty close to where you were in the second quarter if we backed out the pandemic sales there.
Just kind of curious your thoughts on that as you move through next year. Would you expect to see just kind of a slow, steady rebuild of the non-COVID related sales? Obviously, you know, the COVID sales kind of are what they are when they are. Should we expect that kind of $24 million quarterly run rate of non-COVID related revenue to kind of continue as is and build slowly over the course of next year?
Hey, Alex, this is Allen. Yeah, it's to Charles's remarks earlier, you know, it really depends on how these develop through each of these regions. If you look underneath those numbers, basically you'll see that the non-COVID revenues in Southeast Asia remained relatively stable, which is what we expected. If you look at the rest of the world, those numbers would show a decline, as they essentially consume stockpiles because we began to see the development and enhancement of those stockpiles in the rest of the world market, which is primarily Europe. If you look at the North American market, we began to see the uptick.
You know, if you kind of follow Charlie's remarks, you know, we're beginning to see more of the stockpiling consuming in the North American markets. You know, our expectation is that we'll continue to see that uptick continue. We hope to begin, if the European, the rest of the world market follows the North American market, we should begin to see that turn much as we did in Q3 in North America. You know, China has got a pretty, you know, stable base in the industrial activity. I don't think we're gonna see a decline there. At some point, we'll begin to see that uptick, hopefully in the next quarter or two. I don't know if Charlie's got any additional comments there.
No, that's exactly right. You know, what we're seeing is, you know, we saw the North American market begin to pick up in non-COVID sales. That was offset by a downturn during the second half, primarily in Europe, with Southeast Asia staying flat in spite of increased lockdowns. You know, the net of that is, you know, I think that the industrial economic recovery is underway. I think if you look at our sales, it's masked by the glut of the distribution channel inventory in the U.S. primarily. That is clearing, you know, given the percentage of our sales that is North America. You know, once that clears, you know, you're talking about 50% of our sales versus 9.7, I think, or 9.6 in Europe.
You know, the inventory levels are gonna be a lot lower, but.
Okay. That's really helpful. Thank you both for that. You know, I guess just thinking about gross margin. I mean, you guys obviously put up some pretty extraordinary gross margin numbers in, you know, last year and in the first half of this year. You know, starting to settle into, I guess, a more normalized rate, but you know, also a very strong gross margin at 42% in Q3. You know, based on everything you know today, I mean, what should we expect over the next couple of quarters? I mean, is it fair to assume that the inventory you have on your balance sheet right now reflects even higher container rates than what you were selling in the third quarter?
I mean, I'm just wondering, should we expect another leg down here in gross margin as you sell through what, you know, presumably was the most expensive inventory to position over the past few months?
Alex, there are two elements to answering that question, and I'll speak to the first one. When it actually gets to, you know, the percentage of our inventory that's represented by freight in, I'll let Allen talk about that. We did begin realizing those increased costs in our margin in Q3. The other element that is helpful to our margin is product mix. You know, Allen, in his comments, discussed the difference between our disposable and chemical with the distribution channel stuff, and the fact that that does not necessarily apply to our other product lines that have a higher margin. That is part of, you know, what's helping us. You know, now as far as freight, we've begun to see some freight costs decline.
They certainly are not back to where they were, but they're not 4x what they were now. I think it's 3x. You know, we are getting some relief in that regard. Right now, our biggest problem is, you know, just the time consumed in that ocean freight. You know, we can pass the cost on to customers. What we can't do is get it any faster, and that's why we keep harping on the additional inventory that we have laid in. We currently have our lead times, our forecast for existing lead times adequately covered with inventory.
Okay, that's really helpful as well. Then, you know, my last question for you guys is, you know, certainly seems like a big opportunity that you're just scratching the surface of with biometrics. I'm curious, you know, are any of your competitors already doing this in a big way? You know, just from a high level, can you talk about what you're hoping to get out of your investment in Bodytrak and, you know, when we might see those learnings start to impact your product offerings?
Yeah, thanks. That's a good question. Biometrics is still a nascent technology in our industry, so I wouldn't say that there's anyone that is, you know, leaps and bounds out front yet. I think people are still trying to realize how this is going to be where the value is for the end user, all right. For us, it's not just biometrics, though, that's certainly the focus of the Bodytrak investment. The broader aspect of it is the connected worker. Where we envision this ultimately leading is, you know, biomonitoring that, you know, is passive on the part of the worker and allows you to build individual profiles over time.
Then, as experience is gained with accidents, comparing, you know, profiles of people that had accidents, you can actually use, you know, artificial intelligence or predictive algorithms, you know, to, for the first time ever, really say that all accidents are preventable. I think that is going to have, you know, a tremendous impact, for instance, in the transportation industry, you know, hazardous materials handling and processing. You know, obviously, the greater the impact of, you know, whatever's being used or engaged in, the greater the value of this. You know, it goes down to, you know, someone getting burned or breaking a leg even. Biometrics is one smaller part of the connected worker, and, you know, all we've got right now is our toe in the water.
Well, that's great. We'll be excited to see how that unfolds. Thank you. Thank you very much.
Thank you, Alex.
Once again, if there are any remaining questions or comments, please indicate so now by pressing star one on your touchtone phone. There seems to be no further questions at this time, so I would like to turn the call back over to management for any closing remarks.
Thank you. We appreciate your participation on Lakeland's fiscal 2022 third quarter financial results conference call. As we look ahead to the balance of fiscal 2022 and next year, we are excited by our sustainably optimized financial performance and the leadership position we are taking with a future view of safety in the workplace. There are many attractive growth segments within this market, and we have the team, the capital base, and the operational footprint to have a global impact. Thank you again for joining us on today's conference call, and have a nice day.
With that, this concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation, and have a wonderful day.