IKONICS Announces First Quarter 2019 Results
April 25 2019 - 11:40AM
IKONICS Corporation (Nasdaq:IKNX), a Duluth-based imaging
technology company, reported that 2019 first quarter sales declined
by 13% to $3,529,000. The company posted a loss of $0.23
cents per diluted share for the quarter compared to a loss of $0.07
per diluted share for the first quarter of 2018.
Bill Ulland, IKONICS CEO, said: “Our first quarter normally is
slow because of cold weather in Duluth, which limits our ability to
ship certain liquid products, and the Chinese New Year, which
affects sales to parts of Asia. This year was exacerbated by
bitterly cold weather that pushed significant export sales into the
second quarter. We also were affected by the timing of orders from
some of our larger customers.”
Ulland added: “I believe this is a temporary blip. Our aerospace
sales were down based on the timing of orders from our largest
customer, which accounts for approximately 80% of the sales in this
segment. However, this customer has told us to expect a 30%
increase in orders over 2018, and we are starting to see that ramp
up.
“IKONICS Imaging sales also were down for the quarter due to the
timing of trade show sales; expected to improve in the second
quarter, and we expect an additional increase in sales from our new
IKONART product,” he said. “We have held off marketing this
product until we could build inventory because one of the raw
materials has a long lead time. We are now flush with raw materials
and are in the process of making 500 IKONART kits and are shipping
kits and film. We are actively evaluating other opportunities for
this unique product.
“We have mentioned the ability of our technology to reduce noise
and aeronautical drag from commercial aircraft engines. A study
done by NASA indicates 50% reduction in engine drag by machining
slots into engine liners. NASA now is investigating increased
use of this technology in jet engines. Major aerospace companies
are also evaluating the technology. We believe this is a major
opportunity for IKONICS,” he said.
“We expect to restart purchases under our previously-authorized
share buyback program in May, subject to market conditions,” he
concluded. This program has 66,500 shares remaining available
for future repurchases.
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.
ISO 9001 CertifiedNASDAQ Listed: IKNX
IKONICS Corporation |
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited) |
For the Three Months
Ended March 31, 2019 and 2018 |
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
3/31/19 |
|
|
3/31/18 |
Net sales |
$ |
3,528,691 |
|
|
$ |
4,071,478 |
|
|
|
|
|
|
|
Cost of goods sold |
|
2,519,572 |
|
|
|
2,709,059 |
|
|
|
|
|
|
|
Gross profit |
|
1,009,119 |
|
|
|
1,362,419 |
|
|
|
|
|
|
|
Operating expenses |
|
1,560,807 |
|
|
|
1,503,059 |
|
|
|
|
|
|
|
Loss from
operations |
|
(551,688 |
) |
|
|
(140,640 |
) |
|
|
|
|
|
|
Interest expense |
|
(22,275 |
) |
|
|
(19,935 |
) |
|
|
|
|
|
|
Other |
|
16,194 |
|
|
|
9,421 |
|
|
|
|
|
|
|
Loss before income
taxes |
|
(557,769 |
) |
|
|
(151,154 |
) |
|
|
|
|
|
|
Income tax benefit |
|
(102,738 |
) |
|
|
(20,416 |
) |
|
|
|
|
|
|
Net loss |
$ |
(455,031 |
) |
|
$ |
(130,738 |
) |
|
|
|
|
|
|
Loss per common
share-basic and diluted |
$ |
(0.23 |
) |
|
$ |
(0.07 |
) |
|
|
|
|
|
|
Average diluted shares
outstanding |
|
1,983,553 |
|
|
|
1,983,553 |
|
|
|
|
|
|
|
CONDENSED BALANCE
SHEETS |
As of March 31, 2019 and
December 31, 2018 |
|
|
|
|
|
|
|
|
3/31/2019 |
|
|
12/31/2018 |
Assets |
|
(unaudited) |
|
|
|
Current assets |
$ |
8,591,696 |
|
$ |
8,958,070 |
Property, plant, and
equipment, net |
|
8,034,875 |
|
|
8,084,742 |
Intangible assets,
net |
|
372,693 |
|
|
376,406 |
|
$ |
16,999,264 |
|
$ |
17,419,218 |
Liabilities and
Stockholders' Equity |
|
|
|
|
|
Current
liabilities |
$ |
1,369,642 |
|
$ |
1,303,531 |
Long-term debt |
|
2,788,703 |
|
|
2,821,657 |
Deferred income
taxes |
|
183,000 |
|
|
183,000 |
Stockholders'
equity |
|
12,657,919 |
|
|
13,111,030 |
|
$ |
16,999,264 |
|
$ |
17,419,218 |
|
|
|
|
|
|
CONDENSED
STATEMENTS OF CASH FLOWS (Unaudited) |
For the Three Months
Ended March 31, 2019 and 2018 |
|
|
|
|
|
|
|
|
3/31/2019 |
|
|
3/31/2018 |
Net cash (used in)
provided by operating activities |
$ |
(617,996 |
) |
|
$ |
112,696 |
|
Net cash (used in)
provided by investing activities |
|
(352,476 |
) |
|
|
155,424 |
|
Net cash used in
financing activities |
|
(35,419 |
) |
|
|
(35,632 |
) |
|
|
|
|
|
|
Net (decrease) increase
in cash and cash equivalents |
|
(1,005,891 |
) |
|
|
232,488 |
|
Cash and cash
equivalents at beginning of period |
|
1,623,137 |
|
|
|
929,700 |
|
|
|
|
|
|
|
Cash and cash
equivalents at end of period |
$ |
617,246 |
|
|
$ |
1,162,188 |
|
|
|
|
|
|
|
News Contact: Bill Ulland Chairman,
President & CEO (218) 628-2217
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