2003 2nd Quarter Report
To Our Stockholders:
Sales in the second quarter of 2003 were $3,162,000, basically even with those of the 2002 quarter, but earnings improved significantly. Earnings increased by 19% over the second quarter of 2002 to $0.13 per share and are well over the $0.02 per share earned in the first quarter of this year.
Two non-recurring events were booked in the quarter. Our investment in Apprise Technologies Inc. was written down by $75,000, because Apprise had a recent stock placement at lower share price than our investment. We also experienced a refund of $42,000 on our extraterritorial income tax.
The flat sales are attributable to a fall-off in business to Asia and the discontinuance of some unprofitable domestic business. This was offset by increased sales of higher margin products in North America and Europe.
We anticipate a pick-up in sales to Asia in the third quarter. The SARS epidemic delayed the opening of our training center in Singapore by a month. The first session was held in June and was very well received. Further sessions in Singapore and India are scheduled for the fall. Asia remains an important part of our plans and we regard the second quarter slump to be an anomaly in the sales growth we have been seeing there.
During the quarter we completed the first redesign of the RapidMask technology we acquired from DuPont. This has given us three new products for the abrasive etching market which are being launched early in the third quarter. We are ahead of schedule with these products and I am increasingly optimistic they will grow sales and lead us into new markets.
I am very pleased to announce that Jon Gerlach has joined IKONICS as Vice President of Finance and Chief Financial Officer. Jon’s strong background in financial analysis and strategic planning is well suited to our growth plans. He joins us from the Cloquet, Minnesota division of SAPPI, where he was Finance Manager.
For the Board of Directors,
William C. Ulland Chairman, President & CEO