Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 01, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | IKONICS CORP | |
Entity Central Index Key | 1,083,301 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 1,983,553 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,162,188 | $ 929,700 |
Short-term investments | 2,675,000 | 2,895,000 |
Trade receivables, less allowances of $75,000 as of March 31, 2018 and $53,000 as of December 31, 2017 | 2,031,907 | 2,190,260 |
Inventories | 2,368,831 | 2,086,065 |
Prepaid expenses and other assets | 193,828 | 168,242 |
Income taxes receivable | 42,738 | 2,116 |
Total current assets | 8,474,492 | 8,271,383 |
PROPERTY, PLANT, AND EQUIPMENT, at cost: | ||
Land and building | 9,218,220 | 9,207,790 |
Machinery and equipment | 5,001,384 | 4,968,595 |
Office equipment | 1,578,976 | 1,573,191 |
Vehicles | 245,679 | 245,679 |
Gross property, plant, and equipment, at cost | 16,044,259 | 15,995,255 |
Less accumulated depreciation | (7,893,500) | (7,693,594) |
Total property, plant, and equipment, at cost | 8,150,759 | 8,301,661 |
INTANGIBLE ASSETS, less accumulated amortization of $181,470 as of March 31, 2018 and $174,991 as of December 31, 2017 | 360,278 | 351,186 |
Total assets | 16,985,529 | 16,924,230 |
CURRENT LIABILITIES: | ||
Current portion of long-term debt, net | 131,797 | 130,899 |
Accounts payable | 608,689 | 321,860 |
Accrued compensation | 232,690 | 360,554 |
Other accrued liabilities | 112,478 | 62,468 |
Total current liabilities | 1,085,654 | 875,781 |
LONG-TERM LIABILITIES | ||
Long-term debt, less current portion, net | 2,912,950 | 2,946,518 |
Deferred income taxes | 156,839 | 144,000 |
Total long-term liabilities | 3,069,789 | 3,090,518 |
Total liabilities | 4,155,443 | 3,966,299 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, par value $.10 per share; authorized 250,000 shares: none issued | ||
Common stock, par value $.10 per share; authorized 4,750,000 shares; issued and outstanding 1,983,553 shares as of March 31, 2018 and December 31, 2017 | 198,355 | 198,355 |
Additional paid-in capital | 2,712,283 | 2,709,390 |
Retained earnings | 9,919,448 | 10,050,186 |
Total stockholders' equity | 12,830,086 | 12,957,931 |
Total liabilities and stockholders' equity | $ 16,985,529 | $ 16,924,230 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
CONDENSED BALANCE SHEETS | ||
Trade receivables, allowance | $ 75,000 | $ 53,000 |
INTANGIBLE ASSETS, accumulated amortization | $ 181,470 | $ 174,991 |
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized | 250,000 | 250,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 4,750,000 | 4,750,000 |
Common stock, shares issued | 1,983,553 | 1,983,553 |
Common stock, shares outstanding | 1,983,553 | 1,983,553 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CONDENSED STATEMENTS OF OPERATIONS | ||
NET SALES | $ 4,071,478 | $ 3,628,992 |
COST OF GOODS SOLD | 2,709,059 | 2,538,764 |
GROSS PROFIT | 1,362,419 | 1,090,228 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 1,348,983 | 1,510,614 |
RESEARCH AND DEVELOPMENT EXPENSES | 154,076 | 165,770 |
LOSS FROM OPERATIONS | (140,640) | (586,156) |
INTEREST EXPENSE | (19,935) | (20,817) |
OTHER | 9,421 | 5,153 |
LOSS BEFORE INCOME TAXES | (151,154) | (601,820) |
INCOME TAX BENEFIT | (20,416) | (222,923) |
NET LOSS | $ (130,738) | $ (378,897) |
LOSS PER COMMON SHARE: | ||
Basic (in dollars per share) | $ (0.07) | $ (0.19) |
Diluted (in dollars per share) | $ (0.07) | $ (0.19) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||
Basic (in shares) | 1,983,553 | 2,018,753 |
Diluted (in shares) | 1,983,553 | 2,018,753 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (130,738) | $ (378,897) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation | 199,906 | 212,302 |
Amortization | 9,442 | 9,574 |
Stock based compensation | 2,893 | 5,461 |
Deferred income taxes | 12,839 | |
Changes in working capital components: | ||
Trade receivables | 158,353 | 405,542 |
Inventories | (282,766) | (246,362) |
Prepaid expenses and other assets | (25,586) | (29,930) |
Income tax receivable | (40,622) | (214,359) |
Accounts payable | 286,829 | 111,754 |
Accrued expenses | (77,854) | (120,476) |
Net cash provided by (used in) operating activities | 112,696 | (245,391) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant, and equipment | (49,004) | (60,417) |
Purchases of intangible assets | (15,572) | (7,682) |
Purchases of short-term investments | (1,205,000) | (1,225,000) |
Proceeds on sale of short-term investments | 1,425,000 | 1,133,000 |
Net cash provided by (used in) investing activities | 155,424 | (160,099) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on long-term debt | (35,632) | (34,883) |
Net cash used in financing activities | (35,632) | (34,883) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | 232,488 | (440,373) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 929,700 | 1,048,713 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 1,162,188 | 608,340 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 17,038 | 17,786 |
Cash paid for income taxes, net | $ 7,367 | $ 8,564 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Basis of Presentation | |
Basis of Presentation | 1. The condensed balance sheet of IKONICS Corporation (the “Company”) as of March 31, 2018, and the related condensed statements of operations for the three months ended March 31, 2018 and 2017, and cash flows for the three months ended March 31, 2018 and 2017, have been prepared without being audited. In the opinion of management, these statements reflect all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of IKONICS Corporation as of March 31, 2018, and the results of operations and cash flows for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted. Therefore, these statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations for interim periods are not necessarily indicative of results that will be realized for the full fiscal year. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue | |
Revenue | 2. The Company’s significant accounting policies are detailed in “Note 1: Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Topic 606. Revenue from Contracts with Customers (Topic 606), and in August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date , which deferred the effective date of ASU 2014-09 by one year. Topic 606 supersedes the revenue recognition requirements previously set forth in the Accounting Standards Codification (ASC) Topic 605, Revenue Recognition , and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. On January 1, 2018, the Company adopted Topic 606 for all customer contracts using the modified retrospective method. The adoption of Topic 606 did not result in a change to revenue previously recognized under prior revenue recognition rules. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company does not expect the adoption of the new revenue standard to have a material impact to its operating results on an ongoing basis. A majority of the Company’s sales revenue continues to be recognized when products are shipped from its manufacturing facility. However, depending on the individual terms of the agreement with the customer, some sales revenue may be recognized when the goods arrive at the customer’s location, the point at which control transfers. Changes to the Company’s significant accounting policies as a result of adopting Topic 606 are discussed below: Revenue recognition. Revenue is measured based on consideration specified in the contract with a customer, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, including noncash consideration, consideration paid or payable to customers and significant financing components. While most of the Company’s revenue is contracted with customers through one-time purchase orders and short-term contracts, the Company does have long-term arrangements with certain customers. Revenue from all customers is recognized when a performance obligation is satisfied by transferring control of a distinct good or service to a customer. Individually promised goods and services in a contract are considered a distinct performance obligation and accounted for separately if the customer can benefit from the individual good or service on its own or with other resources that are readily available to the customer and the good or service is separately identifiable from other promises in the arrangement. When an arrangement includes multiple performance obligations, the consideration is allocated between the performance obligations in proportion to their estimated standalone selling price. Costs related to products delivered are recognized in the period incurred, unless criteria for capitalization of costs are met. Costs of revenues consist primarily of direct labor, manufacturing overhead, materials and components. The Company does not incur significant upfront costs to obtain a contract. If costs to obtain a contract were to become material, the costs would be recorded as an asset and amortized to expense in a manner consistent with the related recognition of revenue. The Company excludes government assessed and imposed taxes on revenue generating transactions that are invoiced to customers from revenue. The Company includes freight billed to customers in revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold. The timing of revenue recognition, billings and cash collections results in accounts receivable on the balance sheet. Performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation in proportion to its standalone selling price and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s various performance obligations and the timing or method of revenue recognition are discussed below: The Company sells its products to both distributors and end-users. Each unit of product delivered under a customer order represents a distinct and separate performance obligation as the customer can benefit from each unit on its own or with other resources that are readily available to the customer and each unit of product is separately identifiable from other products in the arrangement. The transaction price for the Company’s products is the invoiced amount. The Company does not have variable consideration in the form of refunds, credits, rebates, price concessions, pricing incentives or other items impacting transaction price. The purchase order pricing in arrangements with customers is deemed to approximate standalone selling price; therefore, the Company does not need to allocate proceeds on a relative standalone selling price allocation between performance obligations. The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. There are no material obligations that extend beyond one year. Revenue is recognized when transfer of control occurs as defined by the terms in the customer agreement. The Company immediately recognizes incidental items that are immaterial in the context of the contract. The Company has applied the practical expedient in paragraph 606-10-25-16A and does not assess if immaterial items are promised goods or services. The Company has also applied the practical expedient in paragraph 606-10-32-18 regarding the adjustment of the promised amount of consideration for the effects of a significant financing component when the customer pays for that good or service within one year or less, as the Company does not have any significant financing components in its customer arrangements as payment is received at or shortly after the point of sale, generally thirty to ninety days. The Company estimates returns based on an analysis of historical experience if the right to return products is granted to its customers. The Company does not record a return asset as non-conforming products are generally not returned. The Company’s return policy does not vary by geography. The customer has no rotation or price protection rights, and the Company is not under a warranty obligation. Trade receivables. Trade receivables include amounts invoiced and currently due from customers. The amounts due are stated at their net estimated realizable value. The Company records an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based on a review of all outstanding amounts on an on-going basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considers a customer’s financial condition, credit history, and current economic conditions. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. Accounts are considered past due if payment is not received according to agreed-upon terms. Sales commissions . Sales commissions paid to sales representatives are eligible for capitalization as they are incremental costs that would not have been incurred without entering into a specific sales arrangement and are recoverable through the expected margin on the transaction. The Company has elected to apply the practical expedient provided by ASC 340-40-25-4 and recognize the incremental costs of obtaining contracts as an expense when incurred, as the amortization period of the assets that would have otherwise been recognized is one year or less. The Company records these costs in selling, general, and administrative expense. Product warranty . The Company offers warranties on various products and services. These warranties are assurance type warranties that are not sold on a standalone basis; therefore, they are not considered distinct performance obligations. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time the revenue is recognized for the product sale. International revenue. The Company markets its products to numerous countries in North America, Europe, Latin America, Asia and other parts of the world. Foreign sales were approximately 29% of total sales during the first three months of 2018 compared to 30% of sales for the first three months of 2017. |
Short-Term Investments
Short-Term Investments | 3 Months Ended |
Mar. 31, 2018 | |
Short-Term Investments | |
Short-Term Investments | 3. The Company’s $2.7 million of short-term investments at March 31, 2018 is comprised of 11 fully insured certificates of deposit with original maturities ranging from four to six months and interest rates ranging from 1.25% to 1.70% |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Inventories | 4. The major components of inventories are as follows: Mar 31, 2018 Dec 31, 2017 Raw materials $ 1,563,864 $ 1,428,924 Work-in-progress 359,337 423,186 Finished goods 1,632,650 1,416,547 Reduction to LIFO cost (1,187,020) (1,182,592) Total Inventories $ 2,368,831 $ 2,086,065 |
Earnings Per Common Share (EPS)
Earnings Per Common Share (EPS) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Common Share (EPS) | |
Earnings Per Common Share (EPS) | 5. Basic EPS is calculated using net loss divided by the weighted average of common shares outstanding. Diluted EPS is calculated similarly to Basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the potential dilutive common shares, such as those shares subject to options, had been issued. The options disclosed in Note 6 have been excluded from the computation because of their antidilutive effect. Shares used in the calculation of diluted EPS are summarized below: Three Months Ended Mar 31, 2018 Mar 31, 2017 Weighted average common shares outstanding 1,983,553 2,018,753 Dilutive effect of stock options — — Weighted average common and common equivalent shares outstanding 1,983,553 2,018,753 If the Company was in a net income position for the first three months of 2018, no options would have been included as part of the common and common equivalent shares outstanding, and 18,168 options with a weighted average exercise price of $13.81 would have remained excluded as the options were anti-dilutive. If the Company was in a net income position for the first three months of 2017, 250 options with a weighted average exercise price of $7.54 would have been included as part of the weighted average common and common equivalent shares outstanding as the options would have been dilutive while 15,918 options with a weighted average exercise price of $14.51 would have remained excluded as the options were anti-dilutive . |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Stock-based Compensation | |
Stock-Based Compensation | 6. The Company maintains a stock incentive plan which authorizes the issuance of up to 442,750 shares of common stock. Of those shares, 18,168 were subject to outstanding options and 101,989 were reserved for future grants at March 31, 2018. The plan provides for grants of stock options or other stock awards to eligible participants, as described by the plan, at option prices ranging from 85% to 110% of fair market value at the date of grant. Options granted expire up to seven years after the date of grant. Such options generally become exercisable over a one- to three-year period. The Company charged compensation cost of approximately $3,000 against income (loss) for the three months ended March 31, 2018 and $5,000 against income (loss) for the three months March 31, 2017. As of March 31, 2018, there was approximately $14,000 of unrecognized compensation cost related to unvested share-based compensation awards granted. That cost is expected to be recognized over the next three years. The Company receives a tax deduction for certain stock option exercises during the period in which the options are exercised, generally for the excess of the market price at the time the stock options are exercised over the exercise price of the options, which increases additional paid in capital and reduces income taxes payable. No stock options were exercised during the three months ended March 31, 2018 or 2017, and there were no options granted during the three months ended March 31, 2018 or 2017. Stock option activity during the three months ended March 31, 2018 was as follows: Weighted Average Exercise Shares Price Outstanding at January 1, 2018 18,168 $ 13.81 Outstanding at March 31, 2018 18,168 $ 13.81 Exercisable at March 31, 2018 12,166 $ 15.46 The aggregate intrinsic value of all options outstanding and exercisable at March 31, 2018 was $0. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Information | |
Segment Information | 7. The Company’s reportable segments are strategic business units that offer different products and have varied customer bases. There are five reportable segments: Domestic, Export, IKONICS Imaging, Digital Texturing (DTX) and Advanced Material Solutions (AMS). Domestic sells screen printing film, emulsions, and inkjet receptive film to distributors located in the United States and Canada. IKONICS Imaging sells photo resistant film, art supplies, glass, metal medium and related abrasive etching equipment to end user customers located in the United States and Canada. AMS provides sound deadening and weight reduction technology to the aerospace industry along with products and services for etched composites, ceramics, glass and silicon wafers. DTX includes products and customers related to patented and proprietary inkjet technology used for mold texturing and prototyping. Export sells primarily the same products as Domestic and the IKONICS Imaging products not related to AMS or DTX. The accounting policies applied to determine the segment information are the same as those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Management evaluates the performance of each segment based on the components of divisional income (loss). Assets and liabilities are not allocated to segments, except for trade receivables which are allocated based on the previous segmentation. Financial information with respect to the reportable segments follows: For the three months ended March 31, 2018: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 1,344,480 $ 1,158,340 $ 1,057,338 $ 88,666 $ 422,654 $ — $ 4,071,478 Cost of goods sold 834,341 897,060 557,088 25,392 395,178 — 2,709,059 Gross profit 510,139 261,280 500,250 63,274 27,476 — 1,362,419 Selling, general and administrative* 309,134 121,628 279,593 34,852 84,784 518,992 1,348,983 Research and development* — — — — — 154,076 154,076 Income (loss) from operations $ 201,005 $ 139,652 $ 220,657 $ 28,422 $ (57,308) $ (673,068) $ (140,640) For the three months ended March 31, 2017: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 1,303,569 $ 1,055,005 $ 989,986 $ 115,231 $ 165,201 $ — $ 3,628,992 Cost of goods sold 826,741 839,364 523,580 35,482 313,597 — 2,538,764 Gross profit (loss) 476,828 215,641 466,406 79,749 (148,396) — 1,090,228 Selling, general and administrative* 351,422 196,117 283,859 34,635 96,795 547,786 1,510,614 Research and development* — — — — — 165,770 165,770 Income (loss) from operations $ 125,406 $ 19,524 $ 182,547 $ 45,114 $ (245,191) $ (713,556) $ (586,156) * Trade receivables by segment as of March 31, 2018 and December 31, 2017 were as follows: Mar 31, 2018 Dec 31, 2017 Domestic $ 778,030 $ 1,119,228 Export 501,673 558,872 IKONICS Imaging 333,096 238,813 DTX 45,107 64,278 AMS 366,185 238,848 Unallocated 7,816 (29,779) Total $ 2,031,907 $ 2,190,260 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income taxes | |
Income Taxes | 8. The federal Tax Cut and Jobs Act of 2017 (the “Tax Reform Act”) was enacted December 22, 2017. Effective January 1, 2018, the Tax Reform Act reduced statutory corporate income tax rates from 35% to 21% in addition to other tax changes including re-valuation of deferred tax assets and liabilities. For the first quarter of 2018, the Company realized an income tax benefit of $20,000, or an effective rate of 13.5%, which reflects the new federal corporate rate of 21% versus the income tax benefit of $223,000, or an effective rate of 37.0%, for the first quarter of 2017. The Company’s 2018 and 2017 first quarter tax benefit was due to the year to date net loss. The income tax provision for the 2018 and 2017 periods differ from the expected benefit due to credits for research and development, and other non-deductible items. The Company’s federal net operating loss carryforward and research and development credit carryover as of March 31, 2018 was $167,000 and $27,000, respectively, and will begin to expire in 2036. The Company’s state net operating loss carryforwards and research and development credit carryover as of March 31, 2018 was $834,000 and $91,000, respectively and begin to expire in 2026. The valuation allowance balance of $91,000 at March 31, 2018, relates entirely to Minnesota research and development credit carryforwards that the Company does not expect to utilize and begin to expire in 2028. It has been the Company’s policy to recognize interest and penalties related to uncertain tax positions in income tax expense. As of March 31, 2018 and December 31, 2017, there was no liability for unrecognized tax benefits. The Company is subject to federal and state taxation. As of March 31, 2018, with few exceptions, the Company is no longer subject to examination prior to tax year 2014. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Schedule of major components of inventories | Mar 31, 2018 Dec 31, 2017 Raw materials $ 1,563,864 $ 1,428,924 Work-in-progress 359,337 423,186 Finished goods 1,632,650 1,416,547 Reduction to LIFO cost (1,187,020) (1,182,592) Total Inventories $ 2,368,831 $ 2,086,065 |
Earnings Per Common Share (EP15
Earnings Per Common Share (EPS) (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Common Share (EPS) | |
Summary of shares used in the calculation of diluted EPS | Three Months Ended Mar 31, 2018 Mar 31, 2017 Weighted average common shares outstanding 1,983,553 2,018,753 Dilutive effect of stock options — — Weighted average common and common equivalent shares outstanding 1,983,553 2,018,753 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock-based Compensation | |
Stock option activity | Weighted Average Exercise Shares Price Outstanding at January 1, 2018 18,168 $ 13.81 Outstanding at March 31, 2018 18,168 $ 13.81 Exercisable at March 31, 2018 12,166 $ 15.46 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Information | |
Schedule of financial information with respect to the reportable segments | For the three months ended March 31, 2018: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 1,344,480 $ 1,158,340 $ 1,057,338 $ 88,666 $ 422,654 $ — $ 4,071,478 Cost of goods sold 834,341 897,060 557,088 25,392 395,178 — 2,709,059 Gross profit 510,139 261,280 500,250 63,274 27,476 — 1,362,419 Selling, general and administrative* 309,134 121,628 279,593 34,852 84,784 518,992 1,348,983 Research and development* — — — — — 154,076 154,076 Income (loss) from operations $ 201,005 $ 139,652 $ 220,657 $ 28,422 $ (57,308) $ (673,068) $ (140,640) For the three months ended March 31, 2017: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 1,303,569 $ 1,055,005 $ 989,986 $ 115,231 $ 165,201 $ — $ 3,628,992 Cost of goods sold 826,741 839,364 523,580 35,482 313,597 — 2,538,764 Gross profit (loss) 476,828 215,641 466,406 79,749 (148,396) — 1,090,228 Selling, general and administrative* 351,422 196,117 283,859 34,635 96,795 547,786 1,510,614 Research and development* — — — — — 165,770 165,770 Income (loss) from operations $ 125,406 $ 19,524 $ 182,547 $ 45,114 $ (245,191) $ (713,556) $ (586,156) * |
Schedule of trade receivables by segment | Mar 31, 2018 Dec 31, 2017 Domestic $ 778,030 $ 1,119,228 Export 501,673 558,872 IKONICS Imaging 333,096 238,813 DTX 45,107 64,278 AMS 366,185 238,848 Unallocated 7,816 (29,779) Total $ 2,031,907 $ 2,190,260 |
Revenue (Details)
Revenue (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | ||
Disclosure information about remaining performance obligation Practical Expedient | true | |
Financing Component Practical Expedient | true | |
Sales Commissions Practical Expedient | true | |
International | Geographic Concentration Risk | Revenues | ||
Revenue | ||
Percentage of sales | 29.00% | |
International | Calculated under Revenue Guidance in Effect before Topic 606 | Geographic Concentration Risk | Revenues | ||
Revenue | ||
Percentage of sales | 30.00% |
Short-Term Investments (Details
Short-Term Investments (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | |
Short-term investments | ||
Short-term Investments. | $ | $ 2,675,000 | $ 2,895,000 |
Certificates of Deposit | ||
Short-term investments | ||
Number of fully insured certificates of deposit | item | 11 | |
Certificates of Deposit | Minimum | ||
Short-term investments | ||
Maturity period | 4 months | |
Interest rate (as a percent) | 1.25% | |
Certificates of Deposit | Maximum | ||
Short-term investments | ||
Maturity period | 6 months | |
Interest rate (as a percent) | 1.70% |
Inventories (Details)
Inventories (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Inventories | ||
Raw materials | $ 1,563,864 | $ 1,428,924 |
Work-in-progress | 359,337 | 423,186 |
Finished goods | 1,632,650 | 1,416,547 |
Reduction to LIFO cost | (1,187,020) | (1,182,592) |
Total inventories | $ 2,368,831 | $ 2,086,065 |
Earnings Per Common Share (EP21
Earnings Per Common Share (EPS) (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Shares used in calculation of diluted EPS | ||
Weighted average common shares outstanding | 1,983,553 | 2,018,753 |
Weighted average common and common equivalent shares outstanding | 1,983,553 | 2,018,753 |
Stock Options. | ||
Dilutive effect | ||
Based on the Company's net income position, dilutive effect of stock options (in shares) | 0 | 250 |
Based on the Company's net income position, dilutive effect of stock options, weighted average exercise price (in dollars per share) | $ 7.54 | |
Based on the Company's net income position, anti-dilutive securities (in shares) | 18,168 | 15,918 |
Based on the Company's net income position, anti-dilutive securities, weighted average exercise price (in dollars per share) | $ 13.81 | $ 14.51 |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plan and Expense Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Stock-Based Compensation | |||
Common stock reserved for future grants (in shares) | 101,989 | ||
Compensation cost recognized | $ 3,000 | $ 5,000 | |
Unrecognized compensation cost | $ 14,000 | ||
Period during which compensation cost is expected to be recognized | 3 years | ||
Maximum | |||
Stock-Based Compensation | |||
Number of shares of common stock authorized for issuance | 442,750 | ||
Stock Options. | |||
Stock-Based Compensation | |||
Outstanding options (in shares) | 18,168 | 18,168 | |
Exercise of stock options and related tax benefit (in shares) | 0 | 0 | |
Stock Options. | Minimum | |||
Stock-Based Compensation | |||
Price range of stock award (as a percent) | 85.00% | ||
Period over which options become exercisable | 1 year | ||
Stock Options. | Maximum | |||
Stock-Based Compensation | |||
Price range of stock award (as a percent) | 110.00% | ||
Expiration period of options granted | 7 years | ||
Period over which options become exercisable | 3 years |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions and Activity (Details) - Stock Options. - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Shares | ||
Outstanding at beginning of period (in shares) | 18,168 | |
Granted (in shares) | 0 | 0 |
Exercised (in shares) | 0 | 0 |
Outstanding at end of period (in shares) | 18,168 | |
Exercisable at end of period (in shares) | 12,166 | |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in dollars per shares) | $ 13.81 | |
Outstanding at end of period (in dollars per share) | 13.81 | |
Exercisable at end of period (in dollars per share) | $ 15.46 | |
Aggregate intrinsic value of all options outstanding | $ 0 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | ||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information | |||
Number of reportable segments | segment | 5 | ||
Financial information with respect to the reportable segments | |||
Net sales | $ 4,071,478 | $ 3,628,992 | |
Cost of goods sold | 2,709,059 | 2,538,764 | |
GROSS PROFIT | 1,362,419 | 1,090,228 | |
Selling general and administrative | 1,348,983 | 1,510,614 | |
Research and development | 154,076 | 165,770 | |
Income (loss) from operations | (140,640) | (586,156) | |
Trade receivables by segment | |||
Trade receivables | 2,031,907 | $ 2,190,260 | |
Unalloc. | |||
Financial information with respect to the reportable segments | |||
Selling general and administrative | 518,992 | 547,786 | |
Research and development | 154,076 | 165,770 | |
Income (loss) from operations | (673,068) | (713,556) | |
Trade receivables by segment | |||
Trade receivables | 7,816 | (29,779) | |
Domestic | |||
Financial information with respect to the reportable segments | |||
Net sales | 1,344,480 | 1,303,569 | |
Cost of goods sold | 834,341 | 826,741 | |
GROSS PROFIT | 510,139 | 476,828 | |
Selling general and administrative | 309,134 | 351,422 | |
Income (loss) from operations | 201,005 | 125,406 | |
Trade receivables by segment | |||
Trade receivables | 778,030 | 1,119,228 | |
Export | |||
Financial information with respect to the reportable segments | |||
Net sales | 1,158,340 | 1,055,005 | |
Cost of goods sold | 897,060 | 839,364 | |
GROSS PROFIT | 261,280 | 215,641 | |
Selling general and administrative | 121,628 | 196,117 | |
Income (loss) from operations | 139,652 | 19,524 | |
Trade receivables by segment | |||
Trade receivables | 501,673 | 558,872 | |
IKONICS Imaging | |||
Financial information with respect to the reportable segments | |||
Net sales | 1,057,338 | 989,986 | |
Cost of goods sold | 557,088 | 523,580 | |
GROSS PROFIT | 500,250 | 466,406 | |
Selling general and administrative | 279,593 | 283,859 | |
Income (loss) from operations | 220,657 | 182,547 | |
Trade receivables by segment | |||
Trade receivables | 333,096 | 238,813 | |
DTX | |||
Financial information with respect to the reportable segments | |||
Net sales | 88,666 | 115,231 | |
Cost of goods sold | 25,392 | 35,482 | |
GROSS PROFIT | 63,274 | 79,749 | |
Selling general and administrative | 34,852 | 34,635 | |
Income (loss) from operations | 28,422 | 45,114 | |
Trade receivables by segment | |||
Trade receivables | 45,107 | 64,278 | |
Micro-Machining | |||
Financial information with respect to the reportable segments | |||
Net sales | 422,654 | 165,201 | |
Cost of goods sold | 395,178 | 313,597 | |
GROSS PROFIT | 27,476 | (148,396) | |
Selling general and administrative | 84,784 | 96,795 | |
Income (loss) from operations | (57,308) | $ (245,191) | |
Trade receivables by segment | |||
Trade receivables | $ 366,185 | $ 238,848 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Jan. 01, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Deferred tax amounts included in balance sheet | ||||
U.S. federal income tax rate (as a percent) | 21.00% | 35.00% | ||
Income tax benefit | $ 20,416 | $ 222,923 | ||
Effective tax rate (as a percent) | 13.50% | 37.00% | ||
Unrecognized tax benefits | $ 0 | $ 0 | ||
Valuation allowance | 91,000 | |||
Federal | ||||
Deferred tax amounts included in balance sheet | ||||
Federal net operating loss carryforwards | 167,000 | |||
Research and development credit | 27,000 | |||
State | ||||
Deferred tax amounts included in balance sheet | ||||
State net operating loss carryforwards | 834,000 | |||
Research and development credit | $ 91,000 |