Ironclad Performance Wear posts small 2Q loss
Glove maker also reaches an agreement in principle to settle lawsuit with ORR Safety Corporation.
Ironclad Performance Wear Corporation reported that net sales for the second quarter of $5.4 million increased 4.3 percent compared to the same quarter last year.
The increase for the quarter resulted from stronger sales from the industrial and retail segments and patent licensing fees.
For the quarter, the industrial segment recorded a 12% revenue increase. Notwithstanding the segment increase in sales driven by its expanding distributor base, Ironclad offset a 48% decrease in segment sales attributable to sales to ORR Safety. Ironclad is optimistic this trend will ease as a result of the settlement of the litigation between the parties.
The company also recorded a 48% increase in revenues for its retail segment, continuing to gain traction with new accounts and expanded placements nation-wide.
Net loss for the quarter was $608,783, or 1 cent per share.
The maker of work gloves also reached an agreement in principle to settle its lawsuit with ORR Safety Corporation. The terms of the agreement were not released. ORR will continue to distribute Ironclad's product, but Ironclad can also sell KONG through all distribution channels. Both Ironclad and ORR Safety emphasized their belief in the KONG brand, and intend to move forward together to sell KONG products. Both parties expressed that they are pleased with the terms of the settlement.
In 2015, Ironclad terminated its exclusive license and distributorship agreement with ORR Safety and filed a lawsuit against the Kentucky-based safety distributor seeking to remedy breaches of the agreement, and seeking declaratory relief regarding Ironclad’s rights and obligations under that and other agreements.
Ironclad also signed an agreement in 2015 to become Grainger's North American strategic supplier for mechanic and impact related products.
"In the midst of an extremely difficult industrial market, we continue to grow our business. As we continue to execute the roll out of our products across the North American Grainger network, we are also rapidly adding domestic and international distributors that are more than offsetting the former ORR Safety revenue. Retail clearly has also found traction with significant increases this quarter and new customers including Zoro, Boot Barn and Menards. It is exciting to see this business taking hold," said Ironclad's chief executive officer, Jeffrey Cordes.
Cordes added that while the quarter to quarter impact of a very depressed oil and gas market is uncertain, Ironclad's expansion of segments outside of oil and gas is placing the company on a path to solid growth.
"In regard to the litigation with ORR Safety, we are pleased to have reached an agreement in principle to settle the lawsuit, and we are thrilled to have this matter behind us," he said.