EX-99 2 c99567exv99.txt PRESS RELEASE EXHIBIT 99 [IKONICS CORPORATION LOGO] NEWS CONTACT: Bill Ulland FOR IMMEDIATE RELEASE Chairman, President & CEO October 31, 2005 (218) 628-2217 IKONICS REPORTS 40% INCREASE IN PROFITS ON RECORD THIRD QUARTER SALES DULUTH, MN - IKONICS Corporation, a Duluth based imaging technology company, reported record third quarter sales of $3,462,000, a 4% increase over the third quarter of 2004. Earnings for the third quarter of 2005 increased by 40% over the same period in 2004 to $287,000, or $0.14 per diluted share. Bill Ulland, IKONICS CEO, said that the strong earnings reflect higher margins related to an improved product mix and reduced expenses. He added, "I am pleased with these bottom line results in an environment of increasing raw material costs, and I am optimistic for the rest of the year." IKONICS recently introduced a new patent applied for photoresist film called UltraVinyl targeted at the monument and architectural markets. According to Ulland, UltraVinyl opens up new market opportunities for the company and market tests here and in Europe have been very encouraging. This press release contains forward-looking statements regarding sales, net earnings, and new products that involve risks and uncertainties. The Company's actual results could differ materially as a result of domestic and global economic conditions, competitive market conditions, acceptance of new products, the ability to identify and make suitable acquisitions, as well as the factors described in the Company's Form 10-KSB, Forms 10-QSB and other reports on file with the SEC. IKONICS CORPORATION CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) For the Three Months and Nine Months Ended September 30, 2005 and 2004
THREE MONTHS ENDED NINE MONTHS ENDED 9/30/05 9/30/04 9/30/05 9/30/04 ------- ------- ------- ------- Net sales $ 3,462,253 $ 3,324,135 $ 10,532,775 $ 10,390,348 Costs and expenses net of interest income 3,045,639 3,045,228 9,702,465 9,520,748 ------------ ------------- ------------ ------------ Income before income taxes 416,614 278,907 830,310 869,600 Income tax expense 129,150 73,672 243,929 229,294 ------------ ------------- ------------ ------------ Net income $ 287,464 $ 205,235 $ 586,381 $ 640,306 ============ ============= ============ ============ Earnings per common share-diluted $ .14 $ .10 $ .30 $ .32 ============ ============= ============ ============ Average shares outstanding-diluted 1,986,033 2,014,707 1,980,151 2,008,202
CONDENSED BALANCE SHEETS As of September 30, 2005 and December 31, 2004
ASSETS 9/30/05 12/31/04 ------- -------- (UNAUDITED) Current assets $7,373,868 $ 6,906,349 Property, plant and equipment, net 899,502 1,028,830 Intangible assets 304,034 292,349 Deferred income taxes 65,000 65,000 Investment in non-marketable equity securities 450,790 197,460 ---------- ----------- $9,093,194 $ 8,489,988 ========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $1,008,707 $ 1,075,772 Long term debt 0 0 Stockholders' equity 8,084,487 7,414,216 ---------- ----------- $9,093,194 $ 8,489,988 ========== ===========
CONDENSED STATEMENTS OF CASH FLOW (UNAUDITED) For Nine Months Ended September 30, 2005 and 2004
9/30/05 9/30/04 ------- ------- Cash flows provided by operating activities $ 606,004 $ 1,079,265 Cash flows used in investing activities (334,476) (152,410) Cash flows provided by financing activities 55,094 182,372 ----------- ----------- Net increase in cash and cash equivalents 326,622 1,109,227 Cash and cash equivalents at beginning of period 2,737,460 1,507,794 ----------- ----------- Cash and cash equivalents at end of period $ 3,064,082 $ 2,617,021 =========== ===========