EX-99 2 c09812exv99.txt PRESS RELEASE EXHIBIT 99 [IKONICS CORPORATION LOGO] NEWS RELEASE NEWS CONTACT: Bill Ulland FOR IMMEDIATE RELEASE Chairman, President & CEO October 31, 2006 (218) 628-2217 IKONICS POSTS RECORD THIRD QUARTER SALES, WHILE NEW PRODUCT EXPENSES FLATTEN EARNINGS DULUTH, MN - IKONICS Corporation, a Duluth based imaging technology company, announced today record third quarter 2006 sales of $3,674,000, a 6% increase over the third quarter of 2005. Earnings were $285,000, or $0.14 cents per share, down slightly from 2005 third quarter earnings of $287,000, or $0.14 per share. Year to date sales are up 6% and earnings are up 25% over the first three quarters of 2005. Bill Ulland, IKONICS CEO, said that the flat earnings for the quarter reflected heavy new product development and launch expenses in addition to expenses related to IKONICS' bi-annual screen print trade show. "Our new product initiatives, particularly our industrial ink jet and industrial etching technologies, continue to show considerable promise while requiring significant R&D and product launch expenses. I anticipate these expenses to lessen in the fourth quarter," said Ulland. Ulland also added that earnings could be negatively impacted in the fourth quarter as IKONICS incurs expenses related to Sarbanes Oxley compliance. This press release contains forward-looking statements regarding sales, expenses, 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, 2006 and 2005
THREE MONTHS ENDED NINE MONTHS ENDED 9/30/06 9/30/05 9/30/06 9/30/05 ----------- ----------- ------------- ------------ Net Sales $ 3,673,830 $ 3,462,253 $ 11,145,304 $ 10,532,775 Costs and expenses net of interest income 3,262,067 3,045,639 10,086,829 9,702,465 ----------- ----------- ------------- ------------ Income before income taxes 411,763 416,614 1,058,475 830,310 Income tax expense 126,810 129,150 327,751 243,929 ----------- ----------- ------------ ------------ Net income $ 284,953 $ 287,464 $ 730,724 $ 586,381 =========== =========== ============ ============ Earnings per common share-diluted $ 0.14 $ 0.14 $ 0.36 $ 0.30 =========== =========== ============ ============ Average shares outstanding-diluted 2,043,981 1,986,033 2,029,732 1,980,151
CONDENSED BALANCE SHEETS As of September 30, 2006 and December 31, 2005
9/30/06 12/31/05 ------------ ----------- (unaudited) ASSETS Current assets $ 8,464,823 $ 7,728,358 Property, plant and equipment, net 862,987 951,565 Investment in non-marketable equity securities 865,160 450,790 Intangible assets 283,868 279,086 Deferred taxes 61,000 61,000 ----------- ----------- $10,537,838 $ 9,470,799 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 1,073,382 $ 992,294 Long term debt - - Stockholders' equity 9,464,456 8,478,505 ----------- ----------- $10,537,838 $ 9,470,799 =========== ===========
CONDENSED STATEMENTS OF CASH FLOW (UNAUDITED) For Nine Months Ended September 30, 2006 and 2005
9/30/06 9/30/05 ----------- ----------- Net cash provided by operating activities $ 797,419 $ 606,004 Net cash used in investing activities ($446,247) (334,476) Net cash provided by financing activities $ 223,047 55,094 ----------- ----------- Net increase in cash and cash equivalents $ 574,219 326,622 Cash and cash equivalents at beginning of period 3,412,072 2,737,460 ----------- ----------- Cash and cash equivalents at end of period $ 3,986,291 $ 3,064,082 =========== ===========