Ironclad Performance Wear Reports First Quarter 2013 Financial Results Financial Performance Meets Expectations

LOS ANGELES, May 14, 2013 /PRNewswire/ -- Ironclad Performance Wear Corporation (ICPW.OB), the recognized leader in high-performance task-specific gloves, announced financial results for the first quarter ended March 31, 2013.

First Quarter 2013 Results
The company reported Net Sales for the first quarter of $5.32 million, a slight decrease from $5.35 million in the first quarter of 2012.

Gross Profit increased slightly to $1.98 million, or 37.2% of Net Sales, compared to $1.95 million, or 36.5% of Net Sales in the first quarter of 2012.  The increase in Gross Profit was due primarily to a decrease in lower margin international business during the quarter.

Operating Expenses as a percent of Net Sales increased to 39.4%, or $2.09 million, compared to 32.3% of Net Sales, or $1.72 million, during the same period last year.  This increase in Operating Expenses is the result of increased headcount and operating services to support the company's continuing growth.

As a result of the above, Income (Loss) from Operations was ($112,273), a 149% decrease from an Income from Operations of $228,496 during the same period in 2012.

Net Income (Loss) decreased $368,630 or 149% to ($121,644) in the first quarter 2013, from a Net Income of $246,986 in the same period last year.

"Ironclad's sales performance for the first quarter was strong.  To appreciate the significance of this positive performance, consider that in 2012's first quarter, Net Sales grew by 57% over the previous year and we virtually replicated this same level of sales again in 2013," said Scott Jarus, Chairman and CEO of Ironclad. "Additionally, Operating Expenses are in line with our expectations as we structure the company for continued growth, including our international expansion efforts."

Mr. Jarus added: "It is important to note that the first half of each year is historically the most challenging for Ironclad.  Despite this, we saw significant growth in our Retail Automotive segment, though this was off-set by a slow-down in our Industrial channel due to larger-than-expected inventory levels during the quarter by one of our master distributors."

Guidance for 2013
Ironclad reaffirms its full-year guidance outlined on February 27, 2013. Ironclad expects that Net Sales for 2013 will increase 10% - 15% to approximately $28.8 million to $30.1 million.

EBITDA, a non-GAAP term which includes non-cash stock options expense (i.e. Earnings Before Interest, Taxes, Depreciation, Amortization and ASC 718 non-cash stock option expense), will be  approximately $2.8 million, or even with 2012's performance, primarily reflecting the Company's desire to increase spending on its international expansion and marketing.  Earnings per share are expected to increase marginally.  This guidance is based upon management's outlook for organic growth only, and does not contemplate acquisition opportunities which, if identified and concluded, would be expected to be accretive to this 2013 guidance on both a Net Sales and Net Income basis.

"We remain confident that our full-year financial results will continue to demonstrate the Company's ability to leverage the Ironclad brand and expertise to create and sustain growth and profitability," said Mr. Jarus.  "However, competition in 2013, particularly in the oil & gas industrial safety markets, has greatly intensified over the past year – a tribute to the stellar success of Ironclad's KONG line of gloves.  This competition is resulting in price pressures which we are addressing with the introduction of at least three new styles of re-featured, less expensive gloves for the oil & gas industry later this year."

Conference Call
Ironclad Performance Wear will hold a conference call to discuss first quarter 2013 financial results today, Tuesday, May 14, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To participate in the conference call, dial (877) 941-4774 ten minutes prior to the call. International callers should dial 1+ (480) 629-9760.

If you are unable to participate in the live call, a replay will be available through May 28, 2013. To access the replay, dial (877) 870-5176 (passcode: 4616086). International callers should dial 1+ (858) 384-5517 and use the same passcode.

In addition, the conference call will also be broadcast live over the Internet and can be accessed at www.ironclad.com. The Webcast will be archived on Ironclad's Website through May 28, 2013.

The company's financial results and other investor information are posted online at www.ironclad.com/investor-relations.

About Ironclad Performance Wear Corporation
Ironclad Performance Wear is a leader in high-performance task-specific work gloves.  It created the performance work glove category in 1998, and continues to leverage its leadership position in the safety, construction and industrial markets through the design, development and distribution of specialized task-specific gloves for industries such as oil & gas extraction; automotive; and police, fire, first-responder and military. Ironclad engineers and manufactures its products with a focus on innovation, design, advanced material science and durability. Ironclad's gloves and apparel are available through industrial suppliers, hardware stores, home centers, lumber yards, and sporting goods retailers nationwide; and through authorized distributors in North America, Europe, Australia and Asia.

Built Tough for the Industrial Athlete™

For more information on Ironclad, please visit the Company's Website at www.ironclad.com.

Information about Forward-Looking Statements
This release contains "forward-looking statements" that include information relating to future events and future financial and operating performance. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for Ironclad's products, the introduction of new products, Ironclad's ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of Ironclad's liquidity and financial strength to support its growth, and other information that may be detailed from time-to-time in Ironclad's filings with the United States Securities and Exchange Commission. Examples of such forward looking statements in this release include statements regarding guidance about and achievement of financial goals and performance for 2013, increasing interest and sales of Ironclad's products, market opportunities presented by new products and/or customers and Ironclad's profitability in 2013.  For a more detailed description of the risk factors and uncertainties affecting Ironclad, please refer to the Company's recent Securities and Exchange Commission filings, which are available at www.sec.gov. Ironclad undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Information about Non-GAAP Financial Measures
This release contains disclosure regarding the non-GAAP financial measure "EBITDA, which also includes non-cash stock option expense (i.e. Earnings Before Interest, Taxes, Depreciation, Amortization and ASC 718 stock option expense)."  The Company believes that disclosure regarding EBITDA, which also includes non-cash stock option expense, as a supplemental measure of performance improves the transparency of the Company's disclosures.  This non-GAAP financial measure is not a substitute for GAAP financial results, and should only be considered in conjunction with the Company's financial information that is presented in accordance with GAAP.

Contacts
Scott Jarus, CEO
scottj@ironclad.com
(310) 643-7800 x120

 

Ironclad Performance Wear Corporation

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)



March 31, 2013


December 31, 2012

ASSETS




  Current Assets




     Cash and cash equivalents

$           504,663


$                   721,589

     Accounts receivable net of allowance for doubtful accounts of $48,000

3,656,130


6,423,670

     Due from factor without recourse

187,113


915,492

     Inventory net of reserve of $619,000

7,286,047


5,281,445

     Deposits on inventory 

572,017


716,273

     Prepaid and other

400,758


308,814

     Deferred tax assets - current

857,500


857,500

  Total current assets

13,464,228


15,224,783





  Property and Equipment




     Computer equipment and software

515,610


515,058

     Vehicles

43,680


43,680

     Office equipment and furniture

187,270


179,835

     Leasehold improvements

88,457


47,381

     Less: accumulated depreciation

(567,201)


(529,917)

  Total property and equipment, net

267,816


256,037





  Other Assets




     Trademarks and patents, net of accumulated amortization of $42,496 and $40,318

133,090


132,168

     Deposits

10,204


10,204

  Total other assets

143,294


142,372





Total Assets

$      13,875,338


$             15,623,192





LIABILITIES & STOCKHOLDERS' EQUITY




  Current Liabilities




     Accounts payable and accrued expenses

$        2,616,571


$                4,932,648

     Line of credit

2,075,697


1,483,883

  Total current liabilities

4,692,268


6,416,531





  Total Liabilities

4,692,268


6,416,531





  Stockholders' Equity




     Common stock, $.001 par value; 172,744,750 shares authorized; 76,704,275 and 76,447,587 shares issued and outstanding at March 31, 2013 and




     December 31, 2012, respectively

76,704


76,448

     Additional paid-in capital

19,018,608


18,920,811

     Accumulated deficit

(9,912,242)


(9,790,598)

  Total Stockholders' Equity

9,183,070


9,206,661





Total Liabilities & Stockholders' Equity

$      13,875,338


$             15,623,192

 

Ironclad Performance Wear Corporation

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)










 Three Months Ended March 31, 2013 


 Three Months Ended March 31, 2012 













REVENUES






Net sales


$          5,315,656


$          5,347,865







COST OF SALES






Cost of sales


3,335,770


3,394,516







GROSS PROFIT


1,979,886


1,953,349







EXPENSES






General and administrative


806,571


622,008


Sales and marketing


772,639


684,571


Research and development


183,744


129,707


Purchasing, warehousing and distribution


288,649


249,783


Depreciation and amortization


40,556


38,784








Total operating expenses


2,092,159


1,724,853







INCOME (LOSS) FROM OPERATIONS


(112,273)


228,496







OTHER INCOME (EXPENSE)






Interest expense


(9,454)


(9,077)


Interest income


33


11,892


Other income, net


-


54,675


Gain on disposition of equipment


50


-








Total other income (expense), net


(9,371)


57,490







NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES


(121,644)


285,986







PROVISION FOR INCOME TAXES


-


39,000







NET INCOME (LOSS)


$            (121,644)


$             246,986







NET INCOME (LOSS) PER COMMON SHARE






Basic


($0.00)


$0.00


Diluted


($0.00)


$0.00







WEIGHTED AVERAGE COMMON SHARES OUTSTANDING






Basic


76,611,895


74,986,329


Diluted


85,902,094


83,539,450

SOURCE Ironclad Performance Wear Corporation



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