IKONICS Announces Third Quarter 2020 Results
October 29 2020 - 4:20PM
IKONICS Corporation (the “Company” or “IKONICS”) (Nasdaq:IKNX), a
Duluth-based imaging technology company, announced third quarter
2020 earnings. IKONICS recorded third quarter 2020 revenue of
$3,135,000 compared to $4,530,000 in 2019, a decline of 31%.
IKONICS posted a third quarter 2020 loss of $274,000, or $0.14 per
diluted share, compared to a loss of $163,000, or $0.08 per diluted
share, for the same period in 2019. For the nine months ending
September 30, 2020, the Company realized a net loss of $0.96 per
diluted share compared to a net loss of $0.37 per diluted share for
the same period in 2019.
Glenn Sandgren, IKONICS President and CEO,
commenting on the third quarter noted, “We believe the Company has
turned a corner and is exiting this very challenging environment.
Sales continue to improve month over month, and we are seeing
strong order patterns in our core legacy businesses so far in the
fourth quarter. The sustainability actions taken earlier this year
have had a favorable impact on our ability to achieve cash-flow
break-even on lower than normal revenue levels as demonstrated in
year over year third quarter performance.”
Key points:
- Efforts to maintain a safe,
COVID-19 free workplace have been successful to date. Our team is
doing a remarkable job.
- IKONICS core legacy businesses are
experiencing sales momentum increases in the fourth quarter.
- As of September 30, 2020, cash and
cash equivalents were $3,500,000, well above second quarter
levels.
- The AMS business unit whose largest
customers are aircraft subcontractors has experienced an amplified
negative impact from the aerospace slowdown, after a solid start to
the year. Improvement in aerospace market conditions is not
expected until at least mid-2021.
- The IKONART® crafting product line
continues to exceed sales expectations, and our custom stencil kit
is now available on Amazon.
- IKONICS Inkjet Solutions received
favorable feedback during beta testing of our new DTX Dual-Print™
technology at multiple texturing facilities. Based on the
beta testing, the DTX Dual-Print system cuts the time in half for
application of multiple-layer patterns resulting in significant
labor savings for customers, as well as ensuring precise
layer-to-layer registration. DTX Dual-Print is expected to be
widely available in early 2021.
Sandgren continued, “Barring unforeseen COVID-19
related restrictions and market impact, we expect the business
climate for all our non-aerospace served markets to continue to
improve in 4th quarter 2020 and through 2021. The improvement in
business conditions, in conjunction with new product initiatives,
is expected to yield a marked improvement in 2021 financial
performance.”
This press release contains forward-looking
statements regarding sales, gross profits, net earnings, balance
sheet position, new products, new business initiatives, customer
behavior, market trends, and the impacts of the COVID-19 pandemic
and efforts to mitigate the same that involve risks and
uncertainties. The Company's actual results could differ materially
as a result of domestic and global economic conditions, downturns
in the aerospace or automotive industries, unexpected production
delays by customers using the Company’s products, competitive
market conditions, changes in consumer preferences, inability to
commercialize technologies the Company is developing on the
anticipated timeline or at all, acceptance of new products the
Company offers, introduction of new products or technologies by
competitors, unexpected capital expenditure requirements, delays in
completing planned expansions, 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.
News Contact: |
Glenn Sandgren |
|
Chief Executive Officer |
|
(218) 628-2217 |
|
|
IKONICS Corporation |
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited) |
For the Three and NIne Months Ended September 30, 2020 and
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
9/30/20 |
|
|
9/30/19 |
|
|
9/30/20 |
|
|
9/30/19 |
Net sales |
$ |
3,134,984 |
|
|
$ |
4,530,361 |
|
|
$ |
9,204,615 |
|
|
$ |
12,655,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
2,261,205 |
|
|
|
3,118,299 |
|
|
|
6,792,709 |
|
|
|
8,805,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
873,779 |
|
|
|
1,412,062 |
|
|
|
2,411,906 |
|
|
|
3,849,610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
1,116,293 |
|
|
|
1,565,871 |
|
|
|
4,484,434 |
|
|
|
4,736,004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(242,514 |
) |
|
|
(153,809 |
) |
|
|
(2,072,528 |
) |
|
|
(886,394 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(24,592 |
) |
|
|
(22,799 |
) |
|
|
(70,699 |
) |
|
|
(67,589 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other Income |
|
39 |
|
|
|
16,225 |
|
|
|
8,722 |
|
|
|
49,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
(267,067 |
) |
|
|
(160,383 |
) |
|
|
(2,134,505 |
) |
|
|
(904,261 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
6,929 |
|
|
|
2,361 |
|
|
|
(232,000 |
) |
|
|
(170,775 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(273,996 |
) |
|
$ |
(162,744 |
) |
|
$ |
(1,902,505 |
) |
|
$ |
(733,486 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share-basic and diluted |
$ |
(0.14 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.96 |
) |
|
$ |
(0.37 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Average diluted shares outstanding |
|
1,976,354 |
|
|
|
1,978,926 |
|
|
|
1,976,354 |
|
|
|
1,981,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED BALANCE SHEETS |
|
As of September 30, 2020 and December 31, 2019 |
|
|
|
|
|
|
|
|
|
|
9/30/2020 |
|
12/31/2019 |
Assets |
(unaudited) |
|
|
Current assets |
$ |
7,476,064 |
|
|
$ |
8,692,188 |
|
Property, plant, and equipment, net |
|
7,550,029 |
|
|
|
7,915,984 |
|
Intangible assets, net |
|
247,983 |
|
|
|
271,369 |
|
|
$ |
15,274,076 |
|
|
$ |
16,879,541 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
Current liabilities |
$ |
4,431,685 |
|
|
$ |
1,934,486 |
|
Long-term debt |
|
478,060 |
|
|
|
2,688,357 |
|
Stockholders' equity |
|
10,364,331 |
|
|
|
12,256,698 |
|
|
$ |
15,274,076 |
|
|
$ |
16,879,541 |
|
|
|
|
|
|
|
|
|
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited) |
For the Nine Months Ended September 30, 2020 and 2019 |
|
|
|
|
|
|
|
9/30/2020 |
|
9/30/2019 |
Net cash used in operating activities |
$ |
(630,117 |
) |
|
$ |
(619,563 |
) |
Net cash provided by (used in) investing activities |
|
2,060,405 |
|
|
|
(90,467 |
) |
Net cash provided by (used in) financing activities |
|
1,106,946 |
|
|
|
(154,368 |
) |
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
2,537,234 |
|
|
|
(864,398 |
) |
Cash and cash equivalents at beginning of period |
|
963,649 |
|
|
|
1,623,137 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
$ |
3,500,883 |
|
|
$ |
758,739 |
|
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