UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 2, 2019
IKONICS CORPORATION |
(Exact name of registrant as specified in its charter) |
Minnesota |
000-25727 |
41-0730027 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
4832 Grand Avenue Duluth, Minnesota |
55807 |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code (218) 628-2217
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock, par value $.10 per share |
IKNX |
Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On August 2, 2019, IKONICS Corporation (the “Company”) reported its financial results for the quarter ended June 30, 2019. See the Company’s press release dated August 2, 2019, which is furnished as Exhibit 99 hereto and incorporated by reference in this Item 2.02.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibit.
Exhibit Number |
Description |
99 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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IKONICS CORPORATION |
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Date: August 2, 2019 |
/s/ Jon Gerlach |
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Jon Gerlach |
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Chief Financial Officer |
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and Vice President of Finance |
Exhibit 99
4832 Grand Avenue Duluth, MN 55807 USA Phone: (218) 628-2217 Fax: (218) 628-3245 Email: info@ikonics.com Website: www.ikonics.com |
News Contact: |
Bill Ulland |
For Immediate Release |
Chairman, President & CEO | August 2, 2019 | |
(218) 628-2217 |
IKONICS ANNOUNCES SECOND QUARTER RESULTS
DULUTH, MN - IKONICS Corporation (Nasdaq:IKNX), a Duluth-based imaging technology company, announced 2019 second quarter sales of $4,600,000, down 1%, compared with the second quarter of 2018. Second quarter earnings fell from $145,000, or $0.07 per diluted share, in 2018 to a loss of $116,000, or $0.06, per diluted share in 2019. Earnings for the first six months of the year have also decreased from net income of $15,000, or $0.01 per diluted share, in 2018 to a loss of $571,000, or $0.29 per diluted share, in 2019.
Bill Ulland, IKONICS CEO, said, “The earnings decline for first half of 2019 was partially attributable to a $72,000 customer credit due to product damaged from freezing during shipping, and a $144,000 increase in medical insurance expense compared to the first six months of 2018. We do not anticipate a continuation of the increasing medical expense or shipping issues for the rest of this year.”
He continued: “The rest of 2019 looks better: Our new IKONART product is gaining traction with major distributors, and our aerospace business is seeing a record number of new development leads across several industries. In addition, it appears that the trade war, which has affected our sales to China, may be cooling down.”
Ulland concluded, “We have repurchased 2,742 shares this year under our stock buy-back program and the program has 97,258 shares remaining available for future purchases.”
This press release contains forward-looking statements regarding sales, gross profits, net earnings (losses), balance sheet position, industry trends, customer agreements, new products, technologies and business initiatives that involve risks and uncertainties. The Company's actual results could differ materially as a result of downturns in the aerospace industry, unexpected production delays by the Company’s customers, lack of acceptance of new products and technologies, failure of customers to enter into anticipated agreements, introduction of new products or technologies by competitors, domestic and global economic conditions, inherent risk and uncertainty in the protection of intellectual property rights, 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.
ISO 9001 Certified
NASDAQ Listed: IKNX
IKONICS Corporation |
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CONDENSED STATEMENTS OF OPERATIONS (Unaudited) |
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For the Three and Six Months Ended June 30, 2019 and 2018 |
Three Months Ended |
Six Months Ended |
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6/30/19 |
6/30/18 |
6/30/19 |
6/30/18 |
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Net sales |
$ | 4,596,411 | $ | 4,634,177 | $ | 8,125,102 | $ | 8,705,655 | ||||||||
Cost of goods sold |
3,167,982 | 2,971,862 | 5,687,554 | 5,680,921 | ||||||||||||
Gross profit |
1,428,429 | 1,662,315 | 2,437,548 | 3,024,734 | ||||||||||||
Operating expenses |
1,609,326 | 1,465,435 | 3,170,133 | 2,968,494 | ||||||||||||
(Loss) income from operations |
(180,897 | ) | 196,880 | (732,585 | ) | 56,240 | ||||||||||
Interest expense |
(22,515 | ) | (23,807 | ) | (44,790 | ) | (43,742 | ) | ||||||||
Other |
17,303 | 11,805 | 33,497 | 21,226 | ||||||||||||
(Loss) income before income taxes |
(186,109 | ) | 184,878 | (743,878 | ) | 33,724 | ||||||||||
Income tax (benefit) expense |
(70,398 | ) | 39,542 | (173,136 | ) | 19,126 | ||||||||||
Net (loss) income |
$ | (115,711 | ) | $ | 145,336 | $ | (570,742 | ) | $ | 14,598 | ||||||
(Loss) income per common share-basic and diluted |
$ | (0.06 | ) | $ | 0.07 | $ | (0.29 | ) | $ | 0.01 | ||||||
Average diluted shares outstanding |
1,982,275 | 1,983,553 | 1,982,910 | 1,983,553 |
CONDENSED BALANCE SHEETS |
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As of June 30, 2019 and December 31, 2018 |
6/30/2019 |
12/31/2018 |
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Assets |
(unaudited) |
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Current assets |
$ | 8,420,424 | $ | 8,958,070 | ||||
Property, plant, and equipment, net |
7,987,135 | 8,084,742 | ||||||
Intangible assets, net |
292,380 | 376,406 | ||||||
$ | 16,699,939 | $ | 17,419,218 | |||||
Liabilities and Stockholders' Equity |
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Current liabilities |
$ | 1,238,427 | $ | 1,303,531 | ||||
Long-term debt |
2,755,353 | 2,821,657 | ||||||
Deferred income taxes |
183,000 | 183,000 | ||||||
Stockholders' equity |
12,523,159 | 13,111,030 | ||||||
$ | 16,699,939 | $ | 17,419,218 |
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) |
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For the Six Months Ended June 30, 2019 and 2018 |
6/30/2019 |
6/30/2018 |
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Net cash (used in) provided by operating activities |
$ | (768,925 | ) | $ | 877,914 | |||
Net cash used in investing activities |
(466,296 | ) | (381,746 | ) | ||||
Net cash used in financing activities |
(90,730 | ) | (70,040 | ) | ||||
Net (decrease) increase in cash and cash equivalents |
(1,325,951 | ) | 426,128 | |||||
Cash and cash equivalents at beginning of period |
1,623,137 | 929,700 | ||||||
Cash and cash equivalents at end of period |
$ | 297,186 | $ | 1,355,828 |