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IKONICS Reports Record Sales for 2014

DULUTH, Minn., Feb. 24, 2015 (GLOBE NEWSWIRE) -- IKONICS Corporation (Nasdaq:IKNX), a Duluth-based imaging technology company, reported record sales of $18,490,000, a 6% increase over 2013. Earnings in 2014 were down 5% compared to 2013 to $649,000, or $0.32 per diluted share.

"While our Domestic and IKONICS Imaging businesses performed well for the year, our Export business was hurt by weak foreign markets and the strength of the U.S. dollar," said IKONICS CEO Bill Ulland.

The company recognized improved fourth quarter sales for both DTX, which works primarily with the automotive industry, and Advanced Materials Solutions (AMS), which serves the aerospace and electronics industries.

For the year, AMS adversely affected corporate earnings as it incurred increased expenses as it geared up to meet existing and anticipated orders. Ulland said that IKONICS was pleased with the strong fourth quarter performance of both DTX and AMS and the potential for continued growth in those businesses.

"DTX, which supplies texturing and prototyping technology primarily to the automotive industry, turned its first profitable quarter with a sales increase of 132% over the same quarter of 2013," he said.

"AMS continued to increase its visibility in the aerospace and electronics industries and ended the quarter with a 20% increase in sales over the comparable quarter of 2013, and for the first time is doing significant long-term production which we believe will extend into 2016 and beyond," he continued.

Among AMS' ongoing production projects are:

  • A supply agreement to use IKONICS' technology to manufacture parts for the Airbus A350, which entered commercial service in December 2014. The agreement runs into 2016, and IKONICS believes it will be extended since A350 production is planned through 2023.
  • Production of sound suppression technology for another commercial aircraft entering the market this year, which business IKONICS also believes could continue for many years as this project is in its initial stages.
  • Orders from Honeywell to machine parts for defense-related technology.

AMS' purchase orders are subject to cancellation by customers.

In addition to its growing purchase orders, AMS is machining fuselage parts for a next generation helicopter, which is expected to enter the market this year. AMS's unique technology results in significant weight reduction for this aircraft.

"Other contracts are under negotiation and technical feasibility studies are underway with a number of major companies," Ulland reported. "We recently applied for a patent relating to a technical breakthrough made by IKONICS staff that enhances our potential to earn this business," added Ulland.

Additionally, Ulland said, "AMS continues to grow its wafer business with the electronics industry."

This press release contains forward-looking statements regarding sales, gross profits, net earnings, balance sheet position, new products and new business initiatives 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, 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.

IKONICS Corporation
CONDENSED STATEMENTS OF INCOME
For the Three Months and Twelve Months Ended December 31, 2014 and 2013
Three Months Ended Twelve Months Ended
12/31/14 12/31/13 12/31/14 12/31/13
Net sales $4,622,500 $4,597,266 $18,489,837 $17,491,408
Cost of goods sold 3,017,261 2,649,196 11,786,608 10,553,553
Gross profit 1,605,239 1,948,070 6,703,229 6,937,855
Operating expenses 1,476,585 1,417,133 5,789,763 6,017,725
Income from operations 128,654 530,937 913,466 920,130
Other 1,691 1,712 5,304 7,043
Income before income taxes 130,345 532,649 918,770 927,173
Income tax expense 23,893 172,000 270,000 245,000
Net income $106,452 $360,649 $648,770 $682,173
Earnings per common share-diluted $0.05 $0.18 $0.32 $0.34
Average shares outstanding-diluted 2,018,802 2,014,691 2,018,334 2,010,659
CONDENSED BALANCE SHEETS
As of December 31, 2014 and 2013
12/31/14 12/31/13
Assets
Current assets $8,857,243 $8,045,060
Property, plant and equipment, net 5,416,848 5,634,096
Intangible assets 353,871 322,647
$14,627,962 $14,001,803
Liabilities and Stockholders' Equity
Current liabilities $744,497 $874,985
Deferred income taxes 545,000 527,000
Long term debt -- --
Stockholders' equity 13,338,465 12,599,818
$14,627,962 $14,001,803
CONDENSED STATEMENTS OF CASH FLOWS
For the Twelve Months Ended December 31, 2014 and 2013
12/31/14 12/31/13
Net cash provided by operating activities $916,748 $1,466,532
Net cash used in investing activities (730,821) (819,573)
Net cash provided by financing activities 45,987 89,398
Net increase in cash and cash equivalents 231,914 736,357
Cash and cash equivalents at beginning of period 1,704,300 967,943
Cash and cash equivalents at end of period $1,936,214 $1,704,300

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

Source:IKONICS Corporation