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8-K - FORM 8-K - IKONICS CORP | c64369e8vk.htm |
Exhibit 99
News Contact:
|
Bill Ulland Chairman, President & CEO (218) 628-2217 |
For Immediate Release April 28, 2011 |
IKONICS REPORTS FIRST QUARTER RESULTS
DULUTH, MN IKONICS Corporation (NASDAQ:IKNX), a Duluth based imaging technology company,
announced sales for first quarter of 2011 of $3,653,000, down slightly from 2010 first quarter
sales of $3,685,000. Earnings fell from $148,000, or $0.08 per share, to $37,000, or $0.02 per
share.
Bill Ulland, Ikonics CEO, said weakness from two Domestic Chromaline products negatively affected
first quarter sales, but was partially offset by a significant increase in sales of new
technologies.
Although the first quarter is usually the companys most unpredictable because of cold weather
shipping out of Duluth and the effect of the Asian holiday season on the timing of ocean shipping,
this year we experienced some specific issues relating to our Domestic Chromaline business. Those
sales were down 11% due to weaker than expected sales primarily from two products. Ulland said, We
have plans to address these specific issues and put Domestic Chromaline back on a growth track.
The decline in Chromaline sales was partially offset by a 74% increase in sales of new
technologies, Micro Machining and Digital Texturing (DTX). This growth builds on the base
established last year, and I anticipate it will continue, Ulland said. The strategic rationale
for investing in these new technologies was to enter robust industrial markets with unique products
and, thereby, supplement our traditional more mature markets. I believe this investment is
beginning to pay off.
Earnings for the quarter also reflect higher personnel costs relating to the continued introduction
of the new technologies, and higher costs for petroleum based raw materials. I believe that higher
revenues will absorb the increased fixed costs, and that we will pass a portion of the higher raw
materials costs on to customers, as appropriate, he said.
A
challenge for the remainder of 2011 will be to manage the expected growth of our new technologies,
Ulland said. We currently are designing equipment to substantially increase our Micro Machining
capacity, and we are working with our DTX printer manufacturers to finalize their designs and get
printers into the hands of customers. We are also working on an alliance to increase our
distribution network for DTX.
This press release contains forward-looking statements regarding sales, gross profits, net
earnings, balance sheet position, and new products, technologies and businesses initiatives that
involve risks and uncertainties. The Companys actual results could differ materially as a result
of domestic and global economic conditions, competitive market conditions, acceptance of new
products and technologies, the ability to identify and make suitable acquisitions, capital
expenditure requirements, the ability to control operating costs without impacting growth as well
as the factors described in the Companys Form s 10-K, and 10-Q, and other reports on file with the
SEC.
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NASDAQ Listed: IKNX
NASDAQ Listed: IKNX
IKONICS Corporation
CONDENSED STATEMENTS OF INCOME (unaudited)
For the Three Months Ended March 31, 2011 and 2010
For the Three Months Ended March 31, 2011 and 2010
Three Months Ended | ||||||||
3/31/11 | 3/31/10 | |||||||
Net Sales |
$ | 3,653,099 | $ | 3,684,577 | ||||
Cost of Goods Sold |
2,186,256 | 2,200,782 | ||||||
Gross Profit |
1,466,843 | 1,483,795 | ||||||
Operating expenses |
1,443,552 | 1,361,093 | ||||||
Income from operations |
23,291 | 122,702 | ||||||
Interest income |
4,562 | 3,519 | ||||||
Income before income taxes |
27,853 | 126,221 | ||||||
Income tax benefit |
9,489 | 22,120 | ||||||
Net income |
$ | 37,342 | $ | 148,341 | ||||
Earnings per common share-diluted |
$ | 0.02 | $ | 0.08 | ||||
Average shares outstanding-diluted |
1,981,114 | 1,969,433 |
Condensed Balance Sheets
As of March 31, 2011 and December 31, 2010
As of March 31, 2011 and December 31, 2010
3/31/11 | 12/31/10 | |||||||
(unaudited) | ||||||||
Assets |
||||||||
Current assets |
$ | 7,984,949 | $ | 7,811,830 | ||||
Property, plant and equipment, net |
4,981,188 | 5,012,933 | ||||||
Intangible assets, net |
328,093 | 317,168 | ||||||
$ | 13,294,230 | $ | 13,141,931 | |||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities |
$ | 837,578 | $ | 948,984 | ||||
Deferred income taxes |
171,000 | 171,000 | ||||||
Long term debt |
| | ||||||
Stockholders equity |
12,285,652 | 12,192,947 | ||||||
$ | 13,294,230 | $ | 13,141,931 | |||||
CONDENSED STATEMENTS OF CASH FLOW (unaudited)
For the Three Months Ended March 31, 2011 and 2010
For the Three Months Ended March 31, 2011 and 2010
3/31/11 | 3/31/10 | |||||||
Net cash provided by (used in) operating activities |
$ | (500,000 | ) | $ | 184,442 | |||
Net cash used in investing activities |
(94,830 | ) | (73,256 | ) | ||||
Net cash provided by financing activities |
55,709 | | ||||||
Net increase (decrease) in cash |
(539,121 | ) | 111,186 | |||||
Cash at beginning of period |
1,291,383 | 1,304,586 | ||||||
Cash at end of period |
$ | 752,262 | $ | 1,415,772 | ||||