Ironclad Performance Wear Corporation reported that net sales for the second quarter totaled $4.55 million, a decline of 1.5 percent percent from $4.62 million in the second quarter of 2011. This marginal decline was primarily due to the timing of sales orders that resulted in an unusually high year-ago comparative period, as well as certain sales which occurred earlier than usual in the first quarter of this year.
Gross profit increased 1 percent to $1.78 million, or 39.3 percent of net sales, compared to $1.77 million, or 38.4 percent of net sales in the second quarter of 2011.
Operating expenses as a percent of net sales increased to 38.7 percent, or $1.76 million, compared to 32.6 percent of net sales, or $1.50 million, during the same period last year.
Income from operations was $26,821, compared with income from operations of $266,942 during the same period in 2011.
Net income was $18,983 in the second quarter 2012, compared with a net income of $230,430 in the same period last year.
“As noted above, the flat performance of Ironclad's second quarter sales is primarily a result of the timing of sales orders between the first and second quarters of this year. The company's first quarter sales were extraordinary, with a 57 percent increase over the same period in the previous year,” said Scott Jarus, Chairman and CEO of Ironclad.
“Additionally, it is important to note that Ironclad focused its attention on much higher margin sales in the second quarter, as is reflected by the almost 1 percent increase in gross profit. The trends demonstrated during the first half of 2012 bode well for Ironclad's ability to deliver on its top and bottom lines' guidance for the balance of the year.”
For the first half of 2012, compared with the same six month period in 2011, Ironclad's net sales are up 23 percent; gross profit is up 19 percent; income from operations is up 131 percent; and net income increased by $293,576, from ($27,607) to $265,969.
Guidance for 2012
Ironclad reaffirms its full-year guidance outlined on May 9, 2012. Net sales for 2012 are expected to increase 15 percent – 20 percent to $24.6 million to $25.7 million.
EBITDA+ASC718 (a non-GAAP term the company defines as Earnings Before Interest, Taxes, Depreciation, Amortization and ASC 718 non-cash stock option expense), is expected to be between approximately $2.0 million to $2.4 million, or a 19 percent to 42 percent increase over 2011. Earnings per share are expected to increase marginally.
This guidance is based solely upon the outlook for organic growth, and does not contemplate acquisition opportunities which, if identified and concluded, would be expected to be accretive to net sales and net income.
Mr. Jarus concluded: “Our financial results for the first half of 2012 demonstrated the company's ability to leverage the Ironclad brand and expertise to produce innovative products for growth and profitability. In addition, we are focused on delivering high quality, higher margin products which has meant, and may mean for the future, that we forego certain opportunities, such as big box retail, which may generate higher volume, but usually at a much lower margin. In addition, we expect our most technical gloves, such as the KONG glove line for the oil & gas industry, to experience continued market expansion around the world.”
