2005 1st Quarter Report
DULUTH, MN – IKONICS Corporation, a Duluth based imaging technology company, announced net sales of $3,329,000 for the first quarter of 2005, a two percent decline from the first quarter of 2004. Net earnings fell 85% from $161,000 or $0.08 per diluted share in the first quarter of 2004 to $24,000 or $0.01 per diluted share in the first quarter of 2005.
Bill Ulland, IKONICS’ CEO, said, “Although weather-related shipping problems had some effect on sales for the quarter, the results were below our expectations and past performance.”
“The primary causes for the decline in net earnings are costs relating to compliance with the Sarbanes-Oxley Act and the promotional start up-costs of two new businesses. We expect these compliance costs will decline for the rest of the year as the SEC has granted an extension for companies of our size to comply with certain requirements of the Sarbanes-Oxley Act,” he said. “Additionally, the bulk of this year’s trade shows for the new businesses, IKON SignEtch and IKONImage, occurred in the first quarter.”
Ulland added that he anticipated sales growth will return in the second quarter, helped by Razor, a highresolution screen print photochemical emulsion introduced in March 2005, and IKON SignEtch, which is beginning to find wide acceptance in the signage industry.
In February 2005, the Company announced resumption of its stock repurchase program. The Company has a current board authorization to repurchase up to 150,000 shares of which a total of 75,000 shares have previously been purchased.