Ironclad Performance Wear Reports Record Fourth Quarter and Fiscal Year 2012 Results 2012 Net Sales Up 22%, Driving Record Net Income and Earnings Per Share

LOS ANGELES, Feb. 27, 2013 /PRNewswire/ -- Ironclad Performance Wear Corporation (ICPW:OB), the recognized leader in high-performance task-specific work gloves, reported financial results for the fourth quarter and fiscal year ended December 31, 2012.

(Logo: http://photos.prnewswire.com/prnh/20060511/LATH052LOGO)

Fourth Quarter and Full Year 2012 Highlights

  • Fourth quarter Net Sales increased 40% to record $10.7 million, driving Net Income Before Taxes up 166% to a record $1.8 million.
  • Full year 2012 Net Sales were up 22% to a record $26.2 million, with Net Income up 174% to a record $3.1 million.
  • Major new product introductions in the fourth quarter included the Ironclad Mechanic glove, designed specifically for auto mechanics and technicians; and the Ironclad TouchScreen performance work glove that addresses the growing use of touchscreen devices. The Company also introduced the newest member to the KONG™ glove family, the Cut Resistant KONG, designed for the particular hazardous conditions found on an oil and gas platform.

Fourth Quarter 2012 Results
The Company reported Net Sales for the fourth quarter of 2012 of $10.7 million, an increase of 39.8% percent from the fourth quarter 2011 of $7.7 million.

Gross Profit increased 53.9% to $4.1 million, or 38.1% of Net Sales, compared to $2.7 million, or 34.6% of Net Sales in the fourth quarter of 2011. 

Operating Expenses as a percent of Net Sales decreased to 20.5%, or $2.2 million, compared to 24.8% of Net Sales, or $1.9 million during the same period last year. 

Income from Operations increased 151% to $1.9 million compared to $752,680 during the same period in 2011. 

Net Income increased $2.0 million to $2.6 million, or $0.03 per share, in the fourth quarter 2011, compared to $605,857, or $0.01 per share, in the same period last year.  $857,500 of this increase in Net Income is the result of recording a deferred tax benefit.

"As reported in our financial results, the fourth quarter was exceptional on virtually all fronts – sales, operating leverage and profitability," said Scott Jarus, Chairman and CEO of Ironclad.  "We experienced excellent growth within our international sales, industrial safety and co-branded private label channels, and the continuing growth in income from operations reflects the efficiencies and scalability of Ironclad's business model." 

Fiscal 2012 Year-End Results
Full-year Net Sales for 2012 were $26.2 million, representing a 22.3% increase from the 2011 Net Sales of $21.4 million.

Gross Profit increased 26.2% to $10.1 million or 38.4% of Net Sales in 2012, compared to $8.0 million, or 37.2% of Net Sales for full-year 2011.   

Operating Expenses as a percent of Net Sales decreased to 29.0%, or $7.6 million, compared to 30.4% of Net Sales, or $6.5 million for full-year 2011. 

Income from Operations increased 69.1% to $2.5 million compared to an Income from Operations of $1.5 million for fiscal year 2011.

Net Income for 2012 increased to $3.1 million, or $0.04 per share, representing a 174% growth when compared to a Net Income of $1.1 million or $0.02 per share, in the prior year.   A 30% reduction in the Company's valuation allowance for deferred tax assets, primarily net operating loss carry-forwards, contributed $0.01 per share to the increase.

Mr. Jarus added, "2012 was an exceptionally successful year for Ironclad.  The strength of the Ironclad brand, representing quality, innovation, performance and value, has drawn customers to our products and enabled us to not only grow business with our existing customers, but to add entirely new distribution channels, such as those in the retail automotive sector."

2013 Outlook
Ironclad expects that its Net Sales for 2013 will increase by 10% to 15%, to approximately $28.8 million to $30.1 million.  EBITDA, which also includes non-cash stock options expense (i.e. Earnings Before Interest, Taxes, Depreciation, Amortization and ASC 718 stock options 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 will marginally increase.  This guidance is based upon management's outlook for organic growth only, and does not contemplate any acquisition opportunities which, if identified and concluded, are expected to be accretive to this 2013 guidance on both a Net Sales and Net Income basis.

"Our financial results for 2012 demonstrated the Company's continuing ability to leverage its brand, innovative products and expertise to create and sustain growth and profitability," said Mr. Jarus.  "However, competition in 2013, particularly in the oil & gas industrial safety segment, 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 pricing pressures which we are actively addressing.  Additionally, Ironclad will be introducing a new 're-featured' less expensive line of KONG gloves for this industry which we believe will stunt any market share erosion caused by this increased competition.  Our guidance for 2013 reflects the changing competitive landscape.  We remain confident in our ability to continue to grow both our top and bottom lines and remain the industry leader in innovative high performance task-specific work gloves."

Conference Call
Ironclad Performance Wear will hold a conference call to discuss 2012 financial results on Wednesday, February 27th, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).  To participate in the conference call, interested parties should dial (877) 941-8416 ten minutes prior to the call.  International callers should dial 1+ (480) 629-9808. If you are unable to participate in the live call, a replay will be available from February 27th at 7:30 p.m. Eastern Time through 11:59 p.m. Eastern Time on March 13, 2013.  To access the replay, dial (877) 870-5176 (passcode: 4599257). 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. For those unable to participate during the live broadcast, the Webcast will be archived on this site through March 13, 2013.

The Company's financial results will be posted online at www.ironclad.com once they are publicly released.

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

Justin Vaicek
Liolios Group, Inc.
ICPW@liolios.com
(949) 574-3860

Ironclad Performance Wear Corp.

CONDENSED CONSOLIDATED BALANCE SHEETS



December 31, 2012


December 31, 2011

ASSETS




  Current Assets




     Cash and cash equivalents

$                   721,588


$               1,060,125

     Accounts receivable (net of allowance for doubtful accounts of $48,000 and $37,000)

6,423,670


798,004

     Due from factor

915,492


2,462,973

     Inventory net of reserve of $619,000 and $460,000

5,281,445


4,449,315

     Deposits on Inventory 

716,273


467,063

     Prepaid and other

308,815


265,652

     Deferred tax asset - Current

857,500


-

  Total Current Assets

15,224,783


9,503,132





  Property and Equipment




     Computer equipment and software

515,058


486,066

     Vehicles

43,680


43,680

     Office equipment and furniture

179,835


162,871

     Leasehold improvements

47,381


43,589

     Less: accumulated depreciation

(529,917)


(416,672)

  Total Property and Equipment, net

256,037


319,534





  Other Assets




     Trademarks and patents (net of accumulated amortization of $40,318 and $31,915)

132,168


131,412

     Deposits

10,204


11,354

  Total Other Assets

142,372


142,766





Total Assets

$             15,623,192


$               9,965,432





LIABILITIES & STOCKHOLDERS' EQUITY




  Current Liabilities




     Accounts payable and accrued expenses

$               4,932,648


$               2,560,504

     Line of credit

1,483,883


1,661,220

  Total current liabilities

6,416,531


4,221,724





  Total Liabilities

6,416,531


4,221,724





  Stockholder's Equity




     Common stock, $.001 par value; 172,744,750 shares authorized; 76,447,587 and 74,550,754 shares issued and outstanding at December 30, 2012 and December 31, 2011, respectively







76,448


74,551

     Additional paid in capital

18,920,811


18,538,563

     Accumulated deficit

(9,790,598)


(12,869,406)

  Total Stockholders' Equity

9,206,661


5,743,708





Total Liabilities & Stockholders' Equity

$             15,623,192


$               9,965,432

    

    

Ironclad Performance Wear Corp.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS









Three Months Ended


Twelve Months Ended




December 31, 2012


December 31, 2011


December 31, 2012


December 31, 2011





















REVENUES










Net sales


$             10,739,170


$               7,682,394


$             26,180,114


$             21,401,002











COST OF SALES










Cost of sales


6,646,450


5,023,271


16,129,474


13,439,562











GROSS PROFIT


4,092,720


2,659,123


10,050,640


7,961,440











OPERATING EXPENSES










General and administrative


1,020,850


795,336


3,185,662


2,566,152


Sales and marketing


673,308


721,009


2,591,725


2,583,111


Research and development


158,354


116,526


541,171


365,481


Purchasing, warehousing and distribution


307,905


239,908


1,112,492


858,758


Depreciation and amortization


40,233


33,665


158,069


132,483












Total Operating Expenses


2,200,650


1,906,444


7,589,119


6,505,985











INCOME FROM OPERATIONS


1,892,070


752,679


2,461,521


1,455,455











OTHER INCOME (EXPENSE)










Interest expense


(22,434)


(32,291)


(50,145)


(94,407)


Interest income


77


50


21,463


89


Other income (expense), net


(20,468)


-


55,419


700


Gain (Loss) on disposition of equipment


50


(24,582)


50


(25,720)












Total Other Income (Expense)


(42,775)


(56,823)


26,787


(119,338)











NET INCOME BEFORE INCOME TAXES


1,849,295


695,856


2,488,308


1,336,117











PROVISION FOR INCOME TAXES


(150,000)


(90,000)


(267,000)


(213,950)

DEFERRED INCOME TAX BENEFIT


857,500


-


857,500


-











NET INCOME 


$               2,556,795


$                   605,856


$               3,078,808


$               1,122,167











NET INCOME PER COMMON SHARE










Basic


$0.03


$0.01


$0.04


$0.02


Diluted


$0.03


$0.01


$0.04


$0.01











WEIGHTED AVERAGE COMMON SHARES










OUTSTANDING










Basic


76,403,179


73,816,955


76,028,200


73,446,414


Diluted


86,016,780


84,293,491


85,641,801


83,922,950

    

 

SOURCE Ironclad Performance Wear Corporation



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