Ironclad Performance Wear Reports Second Quarter 2013 Financial Results Mixed Performance Results in Flat Net Sales

LOS ANGELES, Aug. 7, 2013 /PRNewswire/ -- Ironclad Performance Wear Corporation (ICPW.OB), the recognized leader in high-performance task-specific gloves, announced financial results for the second quarter ended June 30, 2013.

Second quarter 2013 Results
The company reported Net Sales for the second quarter of $4.52 million, a slight decrease from $4.55 million in the second quarter of 2012.

Gross Profit decreased to $1.56 million, or 34.5% of Net Sales, compared to $1.78 million, or 39.3% of Net Sales in the second quarter of 2012.  The decrease in Gross Profit was due primarily to an increase in lower margin private label, retail and international business, as well as lower sales of higher margin gloves during the quarter.

Operating Expenses as a percent of Net Sales increased to 42.6%, or $1.93 million, compared to 38.7% of Net Sales, or $1.76 million, during the same period last year.  This increase in Operating Expenses is the result of increased marketing spend, research & development costs and operating services, such as distribution and quality control expenses, to support the Company's continuing growth and planned strategic investing for the long-term.

As a result of the above, Income (Loss) from Operations was ($369,121), compared to an Income from Operations of $26,821 during the same period in 2012.

Net Income (Loss) for the quarter was ($214,788) compared to a slight profit of $18,983 in the same period last year.

"For the first half of 2013, Net Sales were relatively flat when compared to the same period in 2012," said Scott Jarus, Chairman and CEO of Ironclad. "Generally speaking, this is due to softness of KONG sales to our exclusive distributor.  Conversely, we are seeing very strong performance in the retail automotive markets.  Unfortunately, there is a significant difference between the Gross Margins for KONG and those in the retail space, which translates into a greater impact on the Company's bottom line."

Mr. Jarus added: "In addition to adding four new task-specific KONG gloves styles by the end of this year, we are working on a plan which will expand the marketing, sales and distribution of KONG worldwide."

Guidance for 2013
The uncertainty of the aforementioned changes we are making with our KONG glove line prevents us from providing clear guidance for the remainder of 2013, and we are therefore withdrawing our previous guidance.  That being said, we do believe that there will be a need for additional spending in 2013 to support the new sales and marketing efforts for KONG and the Company's continuing international expansion efforts.  As we gain greater visibility into the results of our efforts, we will make you aware of any change to our view for the rest of the year.

"As a result of increased competition and worldwide demand, fundamental changes to the marketing, sales and distribution of our KONG gloves within the oil & gas industry are needed," said Mr. Jarus.  "KONG remains the 'gold standard' within the industry, but our current structure does not enable us to take advantage of certain opportunities, nor aggressively compete.  We expect to make a material change to this structure in the near future."

Conference Call
Ironclad Performance Wear will hold a conference call to discuss second quarter 2013 financial results today, Wednesday, August 7, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To participate in the conference call, dial (877) 941-1428 ten minutes prior to the call. International callers should dial 1+ (480) 629-9665.

If you are unable to participate in the live call, a replay will be available through August 21, 2013. To access the replay, dial (877) 870-5176 (passcode: 4634523). 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 August 21, 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, material changes to the ways in which Ironclad's products are marketed, sold and distributed 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.

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

 

Ironclad Performance Wear Corporation

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)



June 30, 2013


December 31, 2012

ASSETS




  Current Assets




     Cash and cash equivalents

$                  228,653


$                  721,589

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

3,711,423


6,423,670

     Due from factor without recourse

-


915,492

     Inventory net of reserve of $619,000

8,119,175


5,281,445

     Deposits on inventory 

787,023


716,273

     Prepaid and other

440,229


308,814

     Deferred tax assets - current

857,500


857,500

  Total current assets

14,144,003


15,224,783





  Property and Equipment




     Computer equipment and software

521,570


515,058

     Vehicles

43,680


43,680

     Office equipment and furniture

220,490


179,835

     Leasehold improvements

95,455


47,381

     Less: accumulated depreciation

(609,765)


(529,917)

  Total property and equipment, net

271,430


256,037





  Other Assets




     Trademarks and patents, net of accumulated amortization of $44,692 and $40,318

132,694


132,168

     Deposits

10,204


10,204

  Total other assets

142,898


142,372





Total Assets

$            14,558,331


$            15,623,192





LIABILITIES & STOCKHOLDERS' EQUITY




  Current Liabilities




     Accounts payable and accrued expenses

$               2,116,545


$               4,932,648

     Line of credit

3,399,277


1,483,883

  Total current liabilities

5,515,822


6,416,531





  Total Liabilities

5,515,822


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 June 30, 2013 and December 31, 2012, respectively

76,704


76,448

     Additional paid-in capital

19,092,835


18,920,811

     Accumulated deficit

(10,127,030)


(9,790,598)

  Total Stockholders' Equity

9,042,509


9,206,661





Total Liabilities & Stockholders' Equity

$            14,558,331


$            15,623,192

 

Ironclad Performance Wear Corporation

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

















Three Months Ended


Six Months Ended



June 30, 2013


June 30, 2012


June 30, 2013


June 30, 2012










REVENUES









Net sales

$         4,519,211


$      4,546,595


$      9,834,867


$    9,894,460










COST OF SALES









Cost of sales

2,960,998


2,761,916


6,296,768


6,156,432










GROSS PROFIT

1,558,213


1,784,679


3,538,099


3,738,028










OPERATING EXPENSES









General and administrative

611,897


734,905


1,418,469


1,356,913


Sales and marketing

799,235


601,739


1,571,873


1,286,310


Research and development

181,610


126,454


365,354


256,161


Purchasing, warehousing and distribution

289,832


254,755


578,481


504,538


Depreciation and amortization

44,760


40,005


85,316


78,789











Total operating expenses

1,927,334


1,757,858


4,019,493


3,482,711










INCOME (LOSS) FROM OPERATIONS

(369,121)


26,821


(481,394)


255,317










OTHER INCOME (EXPENSE)









Interest expense

(21,905)


(4,888)


(31,359)


(13,965)


Interest income

41


8,569


74


20,461


Other income, net

1


27,481


1


82,156


Gain on disposition of equipment

-


-


50


-











Total other income (expense), net

(21,863)


31,162


(31,234)


88,652










NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES

(390,984)


57,983


(512,628)


343,969










PROVISION FOR (BENEFIT FROM) INCOME TAXES

(176,196)


39,000


(176,196)


78,000










NET INCOME (LOSS)

$           (214,788)


$           18,983


$       (336,432)


$       265,969










NET INCOME (LOSS) PER COMMON SHARE









Basic

($0.00)


$0.00


($0.00)


$0.00


Diluted

($0.00)


$0.00


($0.00)


$0.00










WEIGHTED AVERAGE COMMON SHARES OUTSTANDING









Basic

76,704,277


76,354,001


76,658,341


75,670,166


Diluted

85,735,188


84,907,124


85,689,252


84,223,287

SOURCE Ironclad Performance Wear Corporation



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