2009 1st Quarter Report

DULUTH, MN – IKONICS Corporation (NASDAQ:IKNX), a Duluth based imaging technology company, reported 2009 first quarter earnings of $53,000, or $0.03 per share, on sales of $3,563,000. Compared to the first quarter of 2008, sales were down 6%. Earnings also decreased from the $106,000, or $0.05 per share, earned during the same period last year.

Bill Ulland, IKONICS CEO, said, “We continue to be affected by the worldwide recession. Although our new business initiatives continue to show great promise and our domestic screen print segment performed very well during the quarter, export shipments and sales to the domestic awards and recognition market were poor. There is normally some volatility in export sales in the first quarter, but I do not expect sales to the awards and recognition industry to recover until the economy returns to growth.

“Our strategic plan is for our new business initiatives of Photo Machining, Acoustics, Digital Texturing, and Industrial Solutions to add new sales and profits to the company. This is happening, but not yet at a rate to compensate for the recession-related declines in our traditional markets. Our customers for the new businesses are giving us encouragement that we should see a pick up in orders in the second half of 2009, but some of them also are affected by the recession,” Ulland said.

“We are financially healthy and continue to generate a strong cash flow. We remain committed to our strategic plan and support for our traditional markets,” he continued. “I am optimistic that once this economic storm has passed, we will be well positioned for growth.”

 

IKONICS Corporation

CONDENSED STATEMENTS OF OPERATIONS (unaudited)

For the Three Months Ended March 31, 2009 and 2008

                                                           

                                                                                          Three Months Ended                        

                                                                                        3/31/09              3/31/08         

  

Net Sales                                                                       $3,563,212         $3,780,848

 

Cost of Goods Sold                                                          2,157,898          2,151,793

 

Gross Profit                                                                     1,405,314          1,629,055

 

Operating expenses                                                          1,388,864          1,581,935

 

Income from operations                                                          16,450               47,120

 

Gain on sale of non-marketable equity securities                        20,131                         –

 

Interest income                                                                            70              43,675

 

Income before income taxes                                                    36,651              90,765

 

Income tax benefit                                                               (16,484)            (14,843)

 

Net income                                                                     $     53,135        $   105,638

 

Earnings per common share-diluted                                                $         0.03       $         0.05

 

Average shares outstanding-diluted                                               1,989,866           2,069,129

 

Condensed Balance Sheets

As of March 31, 2009 and December 31, 2008

 

                                                                                      3/31/09          12/31/08        

                                                                                 (unaudited)

Assets 

Current assets                                                    $   5,472,184      $  5,562,130

Property, plant and equipment, net                             5,543,384         5,602,063

Investment in non-marketable equity securities                918,951            918,951

Intangible assets, net                                                  378,561            403,285

$12,313,080       $12,486,429

Liabilities and Stockholders’ Equity                                                                                

Current liabilities                                                 $    713,749       $     909,789

Deferred income taxes                                                178,000              143,000

Long term debt                                                                   –                           –

Stockholders’ equity                                             11,421,331         11,433,640

 $12,313,080       $12,486,429

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