IKONICS Releases Third Quarter Results

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| Source: IKONICS Corporation

DULUTH, Minn., Nov. 03, 2017 (GLOBE NEWSWIRE) -- IKONICS Corporation (NASDAQ:IKNX), a Duluth-based imaging technology company, reported 2017 third quarter results. Compared to the third quarter of 2016, sales declined by 14% to $3,984,000. The company posted a net loss of $111,000, or $0.06 per diluted share, for the 2017 third quarter compared to net income of $82,000, or $0.04 per diluted share, for the same period in 2016.  For the nine months ended, sales declined by 4%, while the company posted a net loss of $0.30 per diluted share compared to a net loss of $0.04 per diluted share for 2016.

Bill Ulland, IKONICS’ CEO, said, “The year-to-date sales decline was greatest in our traditional businesses of decorative sandblasting and screen print supplies, both foreign and domestic. Our aerospace business was also down primarily due to a primary customer’s second quarter production problem, which we believe has now been rectified.”

Ulland added, “Our plan has been to invest and grow new profitable lines of business to offset the anticipated slowing of our legacy businesses and we believe this is working, as evidenced by the following:

  • Sales of DTX, our automotive business unit, are up by 131% in 2017 through the third quarter compared to the same period in 2016 with two new printers installed in Europe and others under negotiation. DTX is now profitable.
  • AMS, our aerospace business, is back on track with our two largest customers forecasting a 150% increase in purchases for 2018.
  • Our major new product development initiative for 2017 is a patent pending dye sublimation product (SubTHAT!) which we introduced at a large trade show last month. Initial market response has been very positive with 2017 sales of $258,000, all of which will be recognized during the fourth quarter of this year.

I anticipate that our legacy businesses will recover from the third quarter, but that the new businesses will continue to grow and become a more significant part our revenue.

In the meantime, we are taking strong measures to control costs. In addition to a wage freeze for most employees, we will be reducing trade shows, travel and consulting expenses.   I anticipate an annual reduction in these operating costs of approximately $230,000 during 2018 as compared to 2017.”

 

  IKONICS Corporation
  CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
  For the Three and Nine Months Months Ended September 30, 2017 and 2016
            
  Three Months Ended  Nine Months Ended
  9/30/17  9/30/16  9/30/17  9/30/16
Net Sales$3,984,100  $4,607,501  $12,298,453  $12,817,289 
            
Cost of goods sold 2,660,149   2,940,027   8,441,010   8,330,930 
            
Gross profit 1,323,951   1,667,474   3,857,443   4,486,359 
            
Operating Expenses 1,474,141   1,507,781   4,728,865   4,597,056 
            
Income (loss) from operations (150,190)  159,693   (871,422)  (110,697)
            
Interest Expense (20,832)    (21,721)    (62,475)    (36,720)
            
Other 6,309   4,519   17,364   6,681 
            
Income (loss) before income taxes (164,713)  142,491   (916,533)  (140,736)
            
Income tax expense (benefit) (53,760)  60,225   (321,617)  (69,415)
            
Net Income (loss)$(110,953) $82,266  $(594,916) $(71,321)
            
Income (loss) per common share-basic and diluted$(0.06) $0.04  $(0.30) $(0.04)
            
Average diluted shares outstanding 2,005,096   2,018,842   2,014,055   2,018,614 
            

 

 Condensed Balance Sheets
 As of September 30, 2017 and December 31, 2016
 
  9/30/2017  12/31/2016
Assets (unaudited)   
Current assets$8,538,727 $9,045,472
Property, plant, and equipment, net 8,467,713  8,912,395
Intangible assets, net 351,108  338,127
 $17,357,548 $18,295,994
Liabilities and Stockholders' Equity     
Current liabilities$1,282,127 $1,313,377
Long-term debt 2,979,614  3,077,457
Deferred income taxes 446,000  446,000
Stockholders' equity 12,649,807  13,459,160
  $17,357,548 $18,295,994
       

 

 CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
 For the Nine Months Ended September 30, 2017 and 2016
      
  9/30/2017  9/30/2016
Net cash provided by operating activities$147,620  $804,185 
Net cash provided by (used in) investing activities 1,141,249   (5,369,992)
Net cash (used in) provided by financing activities (336,338)  3,234,373 
          
Net increase (decrease) in cash and cash equivalents 952,531   (1,331,434)
Cash and cash equivalents at beginning of period 1,048,713   2,248,466 
          
Cash and cash equivalents at end of period$2,001,244  $917,032 
          

News Contact: 
Bill Ulland
Chairman, President & CEO
(218) 628-2217