Ironclad Performance Wear Corporation reported net sales for the third quarter ended Sept. 30 were $3.38 million, a decrease of 6.0% from the third quarter of 2009 of $3.60 million. The company said the decrease is primarily the result of lower international and seasonal promotional orders partially offset by increased specialty-branded glove styles.


Gross profit increased 3.1% to $1.43 million, or 42.4% of sales, compared to $1.39 million, or 38.7% of sales in the third quarter of 2009. The improvement in gross profit is principally due to decreased lower margin international and promotional sales in 2010.


Operating expenses as a percent of sales decreased to 37.6%, or $1.27 million, compared to 37.9% of sales, or $1.36 million during the same period last year.


Net income from operations increased 468% to $163,007 compared to $28,722 during the same period in 2009. This continuing improvement in net income from operations reflects the increasing financial strength and discipline of the Company, and its ability to execute consistently on its business plan.


Net income increased $131,428 to $140,862 in the third quarter 2010, a 1,393% increase, compared to $9,434 in the same period last year.


Year-to-Date 2010 Results


The company reported net sales for the first nine months of 2010 of $9.30 million, an increase of 1.1% from the corresponding period in 2009 of $9.20 million.


Gross profit increased 11.4% to $3.88 million, or 41.8% of sales, compared to $3.49 million, or 37.9% of sales for the first nine months of 2009.


Operating expenses as a percent of sales decreased to 43.6%, or $4.05 million, compared to 45.4% of sales, or $4.18 million during the same period last year.


Net loss from operations decreased 75.7% to ($163,523) compared to ($694,007) during the same period of 2009.


Net loss decreased $539,081 to ($231,563) in the first nine months of 2010 from ($770,644) in the first nine months of 2009. This decreased loss is the result of the combination of each of the factors discussed above, principally the reduction in sales adjustments and operating expenses, and increased profit margins.


Balance Sheet Highlights


Cash at Sept. 30, 2010 was $871,524 compared to $212,240 in the prior year. Accounts receivable net, factored and non-factored, at Sept. 30, 2010 were $1.49 million compared to $1.29 million in the prior year, primarily due to the timing of sales. Inventory and deposits on inventory were $4.50 million at Sept. 30, 2010 compared to $5.17 million in the prior year. Net working capital at Sept. 30, 2010 was $3.43 million compared to $3.20 million in the prior year. The company had $1.49 million outstanding on its bank line of credit at Sept. 30, 2010 compared to $1.43 million in the prior year.


“Ironclad's financial and operational performance during the third quarter of this year continues to demonstrate the Company's ongoing success in managing its business,” said Scott Jarus, Chairman and CEO of Ironclad. “Ironclad's disciplined focus on profitable growth and controlled costs has proven to be a successful recurring model for the Company.”


Guidance for 2010


Ironclad reaffirms its expectations that EBITDA, including non-cash stock option expenses (Earnings Before Interest, Taxes, Depreciation, Amortization and ASC 718 stock option expense) will be positive.


Jarus concluded, “We continue to see excellent sustained growth with several Ironclad branded gloves, most notably the KONG glove line built for the oil and gas industry, and licensed gloves, such as those built under the Snap-on label. In addition, there are a number of new business opportunities occurring in the fourth quarter of this year, particularly in the retail consumer sector, which should further propel the Ironclad brand and the company's financial success.”