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

(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

Press Release dated August 2, 2019

 

 

 

 

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.

 

 

IKONICS CORPORATION

 

 

 

 

 

 

 

 

 

Date: August 2, 2019

/s/ Jon Gerlach

 

 

 

Jon Gerlach

 

 

 

Chief Financial Officer

 

    and Vice President of Finance  

 

ex_152757.htm

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

CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

For the Three and Six Months Ended June 30, 2019 and 2018

 

   

Three Months Ended

   

Six Months Ended

 
   

6/30/19

   

6/30/18

   

6/30/19

   

6/30/18

 

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

As of June 30, 2019 and December 31, 2018

 

   

6/30/2019

   

12/31/2018

 

Assets

 

(unaudited)

         

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

               

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)

For the Six Months Ended June 30, 2019 and 2018

 

   

6/30/2019

   

6/30/2018

 

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