SOURCE: Ironclad Performance Wear Corporation

May 16, 2008 15:18 ET

Update: Ironclad Performance Wear Reports First Quarter 2008 Financial Results

Company Sustains Sales Growth; Reiterates Profitability Guidance for 2008

EL SEGUNDO, CA--(Marketwire - May 16, 2008) - Ironclad Performance Wear Corporation (OTCBB: ICPW), a leader in high-performance gloves and apparel, today reported financial results for the first quarter ended March 31, 2008.

Net sales for the first quarter of 2008 were $1,851,103, essentially flat when compared to $1,849,932 from the corresponding period in 2007.

Gross profit for the first quarter of 2008 was $793,997, a decrease of approximately 14% versus $924,552 from the corresponding period in 2007. The decrease in gross profit for the quarter was due in large part to an increase in accruals for product returns of 4.5% (primarily from one customer), and a change in the product and customer sales mix that resulted in lower average selling prices of approximately 2.4%. However, these were offset by a 0.9% benefit from relocating apparel production to overseas factories. In the first quarter of 2007 the Company benefited from a one time special purchase of inventory that increased gross profit by 1%.

"Despite a challenging economic environment and rising raw material costs, primarily from petroleum, we're pleased that we continued to achieve sales growth for the tenth consecutive quarter," said Ed Jaeger, President and CEO of Ironclad.

Operating expenses for the first quarter of 2008 were $1,919,189, a decrease of 8.8% versus $2,105,297 from the first quarter of 2007. The improvement in operating expenses was primarily related to increased operating efficiencies within SG&A, as well as lower legal and accounting costs.

Interest expense decreased slightly in 2008 versus the same period of 2007, due to slightly reduced borrowings on our credit line, while interest income decreased by 85.5% in the first quarter of 2008 as a result of seasonally lower cash balances on the Company's Balance Sheet as compared to the first quarter of 2007.

The Company's net loss decreased by 2.0% to $1,151,860 in the first quarter of 2008 compared with $1,175,585 during the same period of 2007, primarily due to a reduction in operating expenses.

"We continue to focus our efforts at managing our operating expenses, particularly as they track to our sales," said Tom Kreig, Ironclad's Interim Chief Financial Officer. "We remain committed to achieving profitability in 2008."

In April of 2008, the Company completed a $1.4 million private placement to facilitate an expansion in its product production and marketing efforts.

In addition, the Company is looking to expand its working-capital facility, which it believes will provide added production and manufacturer pricing flexibility.

Ironclad Performance Wear Corporation will hold a conference call to discuss its first quarter 2008 financial results on Thursday, May 15, 2008 at 1:15 p.m. Pacific Time (4:15 p.m. Eastern Time). To participate in the conference call, interested parties should dial (866) 452-2901 ten minutes prior to the call, then enter PIN 47925485. International callers should dial (1+) (706) 679-4930 and enter the same PIN. If you are unable to participate in the live call, a replay will be available through May 17, 2008. To access the replay, dial 1 (800) 642-1687, followed by passcode 47925485. International callers should dial (1+) (706) 645-9291 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 for two weeks.

About Ironclad Performance Wear Corporation

Ironclad, which created the performance work glove category in 1998, engineers, manufactures and sells a comprehensive line of task-specific gloves and performance-fabric apparel. With its focus on innovation, design, advanced material science and durability, the company is leveraging its leadership position in the construction and industrial markets through an expansion into the cross-over action sports and outdoor enthusiast markets. Ironclad. Ironclad's products are available at hardware stores, home centers, industrial suppliers, lumber yards, and sporting goods retailers nationwide, and in Australia, Canada, Japan, Hungary, and the United Kingdom.

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. For a more detailed description of the risk factors and uncertainties affecting Ironclad, please refer to the Company's recent Securities and Exchange 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.

                      Ironclad Performance Wear Corp.
                        CONSOLIDATED BALANCE SHEET
                              March 31, 2008


ASSETS
  Current Assets
     Cash and cash equivalents                                 $   266,848
     Accounts receivable net of allowance for doubtful
      accounts of $98,000                                        2,102,856
     Inventory                                                   3,743,333
     Prepaid and other                                             163,136
                                                               -----------

  Total current assets                                           6,276,173

  Property, Plant and equipment
     Computer equipment and software                               205,531
     Vehicles                                                       43,680
     Office equipment and furniture                                142,972
     Leasehold improvements                                         34,110
     Less: accumulated amortization                               (181,933)
                                                               -----------

  Total property, plant and equipment                              244,360

     Trademarks, net of $6,467 of accumulated amortization          86,485
     Deposits                                                       44,122
                                                               -----------

Total Assets                                                   $ 6,651,140
                                                               ===========

LIABILITIES & STOCKHOLDERS' EQUITY
  Current Liabilities
     Accounts payable and accrued expenses                       3,099,426
     Line of credit                                              1,720,881
     Current portion of captial lease                                  674
                                                               -----------

  Total current liabilities                                      4,820,981

  Long Term Liabilities                                                  0
                                                               -----------

  Total Liabilities                                              4,820,981

  Stockholder's Equity
     Common stock, $.001 par value; 172,744,750 million shares
     authorized; 30,064,060 share issued and outstanding            35,390
     Additional paid In capital                                 14,092,274
     Accumulated deficit                                       (12,297,505)
                                                               -----------

  Total Stockholders' Equity                                     1,830,159
                                                               -----------

Total Liabilities & Stockholders' Equity                       $ 6,651,140
                                                               ===========




                      Ironclad Performance Wear Corp.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                              March 31, 2008


                                                Three Months  Three Months
                                                    Ended         Ended
                                                  March 31,     March 31,
                                                    2008          2007
                                                ------------  ------------
REVENUES
  Net sales                                     $  1,851,103  $  1,849,932

COST OF SALES
  Cost of sales                                    1,057,106       925,380
                                                ------------  ------------

GROSS PROFIT                                         793,997       924,552

OPERATING EXPENSES
  General and administrative                         678,279       944,859
  Sales and marketing                                899,031       893,936
  Research and development                           104,914       101,680
  Operations                                         212,934       149,875
  Depreciation and amortization                       24,031        14,947
                                                ------------  ------------

  Total Operating Expenses                         1,919,189     2,105,297

LOSS FROM OPERATIONS                              (1,125,192)   (1,180,745)

OTHER INCOME(EXPENSE)
  Interest expense                                   (35,017)      (38,563)
  Change in fair value of warrant liability                -        20,564
  Interest income                                      3,235        22,273
  Unrealized loss on financing activities             (3,090)            -
  Other income(expense), net                           9,014           885
                                                ------------  ------------

  Total Other Income(Expense), Net                   (25,858)        5,159
                                                ------------  ------------

NET LOSS BEFORE INCOME TAXES                      (1,151,050)   (1,175,586)

PROVISION FOR (BENEFIT FROM) INCOME TAXES               (810)            -
                                                ------------  ------------

NET LOSS                                        $ (1,150,240) $ (1,175,586)
                                                ============  ============

BASIC AND DILUTED NET LOSS PER COMMON SHARE     $      (0.03) $      (0.04)
                                                ------------  ------------

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING        35,389,504    30,064,060
                                                ------------  ------------

Contact Information

  • Contacts:

    Ironclad:
    Ed Jaeger
    CEO
    (310) 643-7800 X106

    Silver Public Relations:
    David Silver
    (213) 488-6161