2012 Annual Report
Letter to Shareholders
The year ended on a strong note with 2012 fourth quarter sales up 8% compared to the fourth quarter of 2011, and earnings at $0.14 per share, representing a 109% increase compared to the fourth quarter of 2011. The Company ended 2012 with record sales of $17,312,000 – a 3% increase over 2011. Earnings for the year ended up at $0.35 per share – essentially the same as 2011.
While our patient investment in DTX and Micro-Machining technologies continues to depress earnings, significant progress was made, particularly with our Micro-Machining customers in the aerospace industry. In addition to ongoing business related to the Boeing 747-8, we have received a blanket order for product for the Airbus A350, which we expect to grow as the A350 is placed into production. We also have orders, beginning in 2013, for acoustic liners from a major jet engine manufacturer, and I anticipate that this product line will grow during the year. Consequently, we are expanding our manufacturing capability, adding both equipment and people. I believe that these exciting developments not only portend a profitable business for IKONICS, but are a validation of our unique technology by a very sophisticated industry.
During the year, we also invested significantly in strengthening our patent position for both Micro-Machining and DTX. Our domestic screen print market was also a star performer in 2012, with sales up 7% over last year while competing in a difficult market.
During the fourth quarter of 2012, we paid a $1.00 per share, one-time special cash dividend, amounting to approximately $2,000,000. As of December 31, 2012, we had $2.4 million of cash and short-term investments compared to $3.9 million at the end of the third quarter of 2012, and we continue to generate a strong cash flow. I believe our current cash and investments and their projected growth is more than sufficient to meet our growth plans. We have no long term debt.
William C. Ulland Chairman, President & CEO
March 19, 2013