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)            February 20, 2020          

 

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 February 20, 2020, IKONICS Corporation (the “Company”) reported its financial results for the quarter and fiscal year ended December 31, 2019. See the Company’s press release dated February 20, 2020, 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 February 20, 2020

 

 

 

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: February 20, 2020 

By:

/s/ Jon Gerlach

 

 

 

Jon Gerlach

Chief Financial Officer

and Vice President of Finance

 

 

 

 

     

 

 

 

ex_173523.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:

Glenn Sandgren

For Immediate Release

  CEO February 20, 2020
  (218) 628-2217  

 

IKONICS ANNOUNCES 2019 RESULTS

 

 

DULUTH, MN - IKONICS Corporation (NASDAQ:IKNX), a Duluth-based imaging technology company, announced 2019 and fourth quarter financial results. IKONICS had 2019 revenue of $17,619,000, down 3.3% from the prior year. Earnings fell from $139,000, or $0.07 per diluted share in 2018 to a loss of $814,000, or $0.41 per diluted share in 2019. Fourth quarter sales were $4,963,000, up 2.2% over the same quarter in 2018 with a 2019 fourth quarter net loss of $80,000, or $0.04 per diluted share, versus a profit of $150,000, or $0.08 per diluted share in 2018.

 

Glenn Sandgren, IKONICS’ new CEO said, “Our 2019 results were significantly impacted by a perfect storm of negative factors including extended cold weather-related events, tariffs, and weak customer demand in key business units. The company did see an improving business environment in the fourth quarter, but a less favorable product mix resulted in a small quarterly loss.”

 

Sandgren concluded, “Excluding one-time first quarter 2020 executive transition costs, 2020 looks far more promising, as we have several exciting new prospects. Our IKONART® craft product will be fully ramped, and interest remains strong. The aerospace unit has multiple new opportunities, and our screen printing division’s revised commercial and manufacturing strategy should drive improved results as well. With these prospects, as well as tight cost control, I see 2020 as a year where IKONICS will transition back toward profitability.”

 

 

 

 

 

 

 

This press release contains forward-looking statements regarding sales, gross profits, net earnings, balance sheet position, new products, new business initiatives, customer behavior and market trends 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, delays in completing planned expansions, 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

For the Three and Twelve Months Ended December 31, 2019 and 2018

 

   

Three Months Ended

   

Twelve Months Ended

 
   

12/31/19

   

12/31/18

   

12/31/19

   

12/31/18

 
   

(unaudited)

   

(unaudited)

   

(unaudited)

         

Net sales

  $ 4,963,097     $ 4,856,640     $ 17,618,559     $ 18,213,653  
                                 

Cost of goods sold

    3,415,517       3,154,166       12,221,370       11,959,626  
                                 

Gross profit

    1,547,580       1,702,474       5,397,189       6,254,027  
                                 

Operating expenses

    1,617,862       1,510,954       6,353,865       6,028,208  
                                 

(Loss) income from operations

    (70,282 )     191,520       (956,676 )     225,819  
                                 

Interest expense

    (22,469 )     (23,543 )     (90,058 )     (90,583 )
                                 

Other Income

    11,454       15,243       61,176       50,229  
                                 

(Loss) income before income taxes

    (81,297 )     183,220       (985,558 )     185,465  
                                 

Income tax (benefit) expense

    (1,225 )     33,601       (172,000 )     46,000  
                                 

Net (loss) income

  $ (80,072 )   $ 149,619     $ (813,558 )   $ 139,465  
                                 

(Loss) Income per common share-basic and diluted

  $ (0.04 )   $ 0.08     $ (0.41 )   $ 0.07  
                                 

Average diluted shares outstanding

    1,976,354       1,983,553       1,980,253       1,983,553  

 

CONDENSED BALANCE SHEETS

As of December 31, 2019 and 2018

 

     

12/31/2019

   

12/31/2018

 

 

 

(unaudited)

         
Assets              

Current assets

  $ 8,692,188     $ 8,958,070  

Property, plant, and equipment, net

    7,915,984       8,084,742  

Intangible assets, net

    271,369       376,406  
      $ 16,879,541     $ 17,419,218  

Liabilities and Stockholders' Equity

               

Current liabilities

  $ 1,934,486     $ 1,303,531  

Long-term debt

    2,688,357       2,821,657  

Deferred income taxes

          183,000  

Stockholders' equity

    12,256,698       13,111,030  
      $ 16,879,541     $ 17,419,218  

 

CONDENSED STATEMENTS OF CASH FLOWS

For the Twelve Months Ended December 31, 2019 and 2018

 

   

12/31/2019

   

12/31/2018

 
   

(unaudited)

         

Net cash (used in) provided by operating activities

  $ (477,031 )   $ 1,224,765  

Net cash provided by (used in) investing activities

    7,578       (393,115 )

Net cash used in financing activities

    (190,035 )     (138,213 )
                 

Net (decrease) increase in cash and cash equivalents

    (659,488 )     693,437  

Cash and cash equivalents at beginning of period

    1,623,137       929,700  
                 

Cash and cash equivalents at end of period

  $ 963,649     $ 1,623,137