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IKONICS Announces Second Quarter Results

DULUTH, Minn., Aug. 02, 2019 (GLOBE NEWSWIRE) -- IKONICS Corporation (IKNX), a Duluth-based imaging technology company, announced 2019 second quarter sales of $4,600,000, down 1%, compared with the second quarter of 2018. Second quarter earnings fell from $145,000, or $0.07 per diluted share, in 2018 to a loss of $116,000, or $0.06, per diluted share in 2019. Earnings for the first six months of the year have also decreased from net income of $15,000, or $0.01 per diluted share, in 2018 to a loss of $571,000, or $0.29 per diluted share, in 2019.

Bill Ulland, IKONICS CEO, said, “The earnings decline for first half of 2019 was partially attributable to a $72,000 customer credit due to product damaged from freezing during shipping, and a $144,000 increase in medical insurance expense compared to the first six months of 2018. We do not anticipate a continuation of the increasing medical expense or shipping issues for the rest of this year.”

He continued: “The rest of 2019 looks better: Our new IKONART product is gaining traction with major distributors, and our aerospace business is seeing a record number of new development leads across several industries. In addition, it appears that the trade war, which has affected our sales to China, may be cooling down.”

Ulland concluded, “We have repurchased 2,742 shares this year under our stock buy-back program and the program has 97,258 shares remaining available for future purchases.”

This press release contains forward-looking statements regarding sales, gross profits, net earnings (losses), balance sheet position, industry trends, customer agreements, new products, technologies and business initiatives that involve risks and uncertainties. The Company's actual results could differ materially as a result of downturns in the aerospace industry, unexpected production delays by the Company’s customers, lack of acceptance of new products and technologies, failure of customers to enter into anticipated agreements, introduction of new products or technologies by competitors, domestic and global economic conditions, inherent risk and uncertainty in the protection of intellectual property rights, the ability to control operating costs without impacting growth as well as the factors described in the Company's Forms 10-K, and 10-Q, and other reports on file with the SEC.

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IKONICS Corporation

CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

For the Three and Six Months Ended June 30, 2019 and 2018

Three Months Ended

Six Months Ended

6/30/19

6/30/18

6/30/19

6/30/18

Net sales

$

4,596,411

$

4,634,177

$

8,125,102

$

8,705,655

Cost of goods sold

3,167,982

2,971,862

5,687,554

5,680,921

Gross profit

1,428,429

1,662,315

2,437,548

3,024,734

Operating expenses

1,609,326

1,465,435

3,170,133

2,968,494

(Loss) income from operations

(180,897

)

196,880

(732,585

)

56,240

Interest expense

(22,515

)

(23,807

)

(44,790

)

(43,742

)

Other

17,303

11,805

33,497

21,226

(Loss) income before income taxes

(186,109

)

184,878

(743,878

)

33,724

Income tax (benefit) expense

(70,398

)

39,542

(173,136

)

19,126

Net (loss) income

$

(115,711

)

$

145,336

$

(570,742

)

$

14,598

(Loss) income per common share-basic and diluted

$

(0.06

)

$

0.07

$

(0.29

)

$

0.01

Average diluted shares outstanding

1,982,275

1,983,553

1,982,910

1,983,553

CONDENSED BALANCE SHEETS

As of June 30, 2019 and December 31, 2018

6/30/2019

12/31/2018

Assets

(unaudited)

Current assets

$

8,420,424

$

8,958,070

Property, plant, and equipment, net

7,987,135

8,084,742

Intangible assets, net

292,380

376,406

$

16,699,939

$

17,419,218

Liabilities and Stockholders' Equity

Current liabilities

$

1,238,427

$

1,303,531

Long-term debt

2,755,353

2,821,657

Deferred income taxes

183,000

183,000

Stockholders' equity

12,523,159

13,111,030

$

16,699,939

$

17,419,218

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

For the Six Months Ended June 30, 2019 and 2018

6/30/2019

6/30/2018

Net cash (used in) provided by operating activities

$

(768,925

)

$

877,914

Net cash used in investing activities

(466,296

)

(381,746

)

Net cash used in financing activities

(90,730

)

(70,040

)

Net (decrease) increase in cash and cash equivalents

(1,325,951

)

426,128

Cash and cash equivalents at beginning of period

1,623,137

929,700

Cash and cash equivalents at end of period

$

297,186

$

1,355,828


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