Ironclad Performance Wear Corporation, 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."