Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Feb. 23, 2014 | Jun. 30, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'IKONICS CORP | ' | ' |
Entity Central Index Key | '0001083301 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $14,554,296 |
Entity Common Stock, Shares Outstanding | ' | 2,012,170 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents (Note 7) | $1,704,300 | $967,943 |
Short-term investments | 1,464,878 | 1,442,939 |
Trade receivables, less allowance of $62,000 in 2013 and $43,000 in 2012 (Notes 5, 7, and 8) | 2,050,853 | 2,060,312 |
Inventories (Note 8) | 2,554,942 | 2,678,864 |
Prepaid expenses and other assets | 103,687 | 124,983 |
Income tax receivable | 16,400 | ' |
Deferred income taxes (Note 2) | 150,000 | 142,000 |
Total current assets | 8,045,060 | 7,417,041 |
PROPERTY, PLANT, AND EQUIPMENT, at cost: | ' | ' |
Land and buildings | 6,123,890 | 6,063,965 |
Machinery and equipment | 3,781,282 | 3,219,598 |
Office equipment | 722,567 | 700,062 |
Vehicles | 237,194 | 237,488 |
Gross property, plant, and equipment, at cost | 10,864,933 | 10,221,113 |
Less accumulated depreciation | 5,230,837 | 4,759,235 |
Net property, plant, and equipment, at cost | 5,634,096 | 5,461,878 |
INTANGIBLE ASSETS, less accumulated amortization of $535,421 in 2013 and $482,107 in 2012 (Note 3) | 322,647 | 305,357 |
Total assets | 14,001,803 | 13,184,276 |
CURRENT LIABILITIES: | ' | ' |
Accounts payable | 532,294 | 593,922 |
Accrued compensation | 274,936 | 265,822 |
Other accrued liabilities | 67,755 | 81,635 |
Income taxes payable | ' | 82,152 |
Total current liabilities | 874,985 | 1,023,531 |
DEFERRED INCOME TAXES (Note 2) | 527,000 | 366,000 |
Total liabilities | 1,401,985 | 1,389,531 |
STOCKHOLDERS' EQUITY: | ' | ' |
Preferred stock, par value $.10 per share; authorized 250,000 shares: issued none | ' | ' |
Common stock, par value $.10 per share; authorized 4,750,000 shares: issued and outstanding 2,012,170 shares in 2013 and 1,998,475 shares in 2012 (Note 6) | 201,217 | 199,848 |
Additional paid-in capital | 2,592,038 | 2,470,507 |
Retained earnings | 9,806,563 | 9,124,390 |
Total stockholders' equity | 12,599,818 | 11,794,745 |
Total liabilities and stockholders' equity | $14,001,803 | $13,184,276 |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
CONDENSED BALANCE SHEETS | ' | ' |
Trade receivables, allowance (in dollars) | $62,000 | $43,000 |
INTANGIBLE ASSETS, accumulated amortization (in dollars) | $535,421 | $482,107 |
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 | 2,012,170 | 1,998,475 |
Common stock, shares outstanding | 2,012,170 | 1,998,475 |
STATEMENTS_OF_INCOME
STATEMENTS OF INCOME (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CONDENSED STATEMENTS OF INCOME | ' | ' |
NET SALES | $17,491,408 | $17,312,407 |
COST OF GOODS SOLD | 10,553,553 | 10,367,563 |
GROSS PROFIT | 6,937,855 | 6,944,844 |
SELLING, GENERAL AND ADMINSTRATIVE EXPENSES | 5,368,400 | 5,282,187 |
RESEARCH AND DEVELOPMENT EXPENSES | 649,325 | 629,776 |
OPERATING EXPENSES | 6,017,725 | 5,911,963 |
INCOME FROM OPERATIONS | 920,130 | 1,032,881 |
INTEREST INCOME | 7,043 | 12,050 |
INCOME BEFORE INCOME TAXES | 927,173 | 1,044,931 |
FEDERAL AND STATE INCOME TAXES (Note 2) | 245,000 | 351,000 |
NET INCOME | $682,173 | $693,931 |
EARNINGS PER COMMON SHARE: | ' | ' |
Basic (in dollars per share) | $0.34 | $0.35 |
Diluted (in dollars per share) | $0.34 | $0.35 |
WEIGHTED AVERAGE COMMON SHARES: | ' | ' |
Basic (in shares) | 2,006,843 | 1,988,066 |
Diluted (in shares) | 2,010,659 | 1,990,847 |
STATEMENTS_OF_STOCKHOLDERS_EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings |
BALANCE at Dec. 31, 2011 | $12,990,543 | $198,459 | $2,363,150 | $10,428,934 |
BALANCE (in shares) at Dec. 31, 2011 | ' | 1,984,587 | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' |
Net income | 693,931 | ' | ' | 693,931 |
Exercise of stock options | 89,028 | 1,389 | 87,639 | ' |
Exercise of stock options (in shares) | ' | 13,888 | ' | ' |
Cash dividend paid | -1,998,475 | ' | ' | -1,998,475 |
Tax benefit resulting from stock option exercises | 1,900 | ' | 1,900 | ' |
Stock based compensation and related tax benefit | 17,818 | ' | 17,818 | ' |
BALANCE at Dec. 31, 2012 | 11,794,745 | 199,848 | 2,470,507 | 9,124,390 |
BALANCE (in shares) at Dec. 31, 2012 | 1,998,475 | 1,998,475 | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' |
Net income | 682,173 | ' | ' | 682,173 |
Exercise of stock options | 89,398 | 1,369 | 88,029 | ' |
Exercise of stock options (in shares) | ' | 13,695 | ' | ' |
Tax benefit resulting from stock option exercises | 19,595 | ' | 19,595 | ' |
Stock based compensation and related tax benefit | 13,907 | ' | 13,907 | ' |
BALANCE at Dec. 31, 2013 | $12,599,818 | $201,217 | $2,592,038 | $9,806,563 |
BALANCE (in shares) at Dec. 31, 2013 | 2,012,170 | 2,012,170 | ' | ' |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $682,173 | $693,931 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation | 568,791 | 489,206 |
Amortization | 53,314 | 54,653 |
Stock based compensation | 13,907 | 17,818 |
Net gain on sale of vehicles and equipment exchange | -13,979 | -7,163 |
Loss on intangible asset abandonment | ' | 23,122 |
Deferred income taxes | 153,000 | 30,000 |
Changes in working capital components: | ' | ' |
Trade receivables | 9,459 | 120,635 |
Inventories | 123,922 | -444,030 |
Prepaid expenses and other assets | 21,296 | -42,060 |
Income tax refund receivable | -16,400 | 59,322 |
Accounts payable | -61,628 | 44,390 |
Accrued liabilities | -4,766 | 58,074 |
Income taxes payable | -62,557 | 84,052 |
Net cash provided by operating activities | 1,466,532 | 1,181,950 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment | -762,537 | -566,519 |
Proceeds from sale of equipment and vehicles | 35,507 | 59,500 |
Purchases of intangibles | -70,604 | -56,770 |
Purchases of short-term investments | -1,814,878 | -1,857,990 |
Proceeds from sale of short-term investments | 1,792,939 | 2,250,054 |
Net cash used in investing activities | -819,573 | -171,725 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Cash dividend paid | ' | -1,998,475 |
Proceeds from exercise of stock options | 89,398 | 89,028 |
Net cash provided by (used in) financing activities | 89,398 | -1,909,447 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 736,357 | -899,222 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 967,943 | 1,867,165 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 1,704,300 | 967,943 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ' | ' |
Cash paid for income taxes, net of refunds received of $13,026 and $61,650, respectively | $171,139 | $177,626 |
STATEMENTS_OF_CASH_FLOWS_Paren
STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CONDENSED STATEMENTS OF CASH FLOWS | ' | ' |
Income taxes, refunds received | $13,026 | $61,650 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Description of Business and Foreign Export Sales - IKONICS Corporation (the Company) develops and manufactures high-quality photochemical imaging systems for sale primarily to a wide range of printers and decorators of surfaces. Customers’ applications are primarily screen printing and abrasive etching. The Company’s principal markets are throughout the United States. In addition, the Company sells to Europe, Latin America, Asia, and other parts of the world. The Company extends credit to its customers, all on an unsecured basis, on terms that it establishes for individual customers. | ||||||||
Foreign export sales approximated 32.3% of net sales in 2013 and 31.9% of net sales in 2012. The Company’s trade receivables at December 31, 2013 and 2012 due from foreign customers were 32.5% and 34.4% of total trade receivables, respectively. The foreign export receivables are composed primarily of open credit arrangements with terms ranging from 30 to 90 days. No single customer or foreign country represented greater than 10% of net sales in 2013 or in 2012. | ||||||||
The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through March 5, 2014, the date the financial statements were issued. | ||||||||
A summary of the Company’s significant accounting policies follows: | ||||||||
Cash Equivalents - The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash equivalents consist of money market funds in which the carrying value approximates market value because of the short maturity of these instruments. The money market fund utilized by IKONICS invests in United States dollar denominated securities that present minimal credit risk and consist of investments in debt securities issued or guaranteed by the United States government or by United States government agencies or instrumentalities and repurchase agreements fully collateralized by the United States Treasury and United States government securities. | ||||||||
Short-Term Investments - Short-term investments consist of fully insured certificates of deposit with original maturities ranging from six to twelve months as of December 31, 2013 and 2012, respectively. | ||||||||
Trade Receivables — Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables 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 considering 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. | ||||||||
A small percentage of the trade receivables balance is denominated in a foreign currency with no concentration in any given country. At the end of each reporting period, the Company analyzes the receivable balance for customers paying in a foreign currency. These balances are adjusted to each quarter or year end spot rate in accordance with FASB ASC 830, Foreign Currency Matters. Foreign currency transactions and translation adjustments did not have a significant effect on the Balance Sheet or the Statements of Income, Stockholders’ Equity and Cash Flows for 2013 and 2012. | ||||||||
Inventories - Inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method. If the first-in, first-out (FIFO) cost method had been used, inventories would have been approximately $1,248,000 and $1,246,000 higher than reported at December 31, 2013 and 2012, respectively. The major components of inventories are as follows: | ||||||||
2013 | 2012 | |||||||
Raw materials | $ | 1,952,398 | $ | 2,072,540 | ||||
Work-in-progress | 389,501 | 373,512 | ||||||
Finished goods | 1,461,264 | 1,478,444 | ||||||
Reduction to LIFO cost | (1,248,221 | ) | (1,245,632 | ) | ||||
Total inventories | $ | 2,554,942 | $ | 2,678,864 | ||||
Depreciation - Depreciation of property, plant and equipment is computed using the straight-line method over the following estimated useful lives: | ||||||||
Years | ||||||||
Buildings | 15-40 | |||||||
Machinery and equipment | 10-May | |||||||
Office equipment | 10-Mar | |||||||
Vehicles | 3 | |||||||
Intangible Assets — Intangible assets consist of patents, licenses and covenants not to compete arising from business combinations. Intangible assets are amortized on a straight-line basis over their estimated useful lives or agreement terms. Intangible assets with indefinite lives are assessed for impairment whenever events or circumstances indicate the carrying value may not be fully recoverable by comparing the carrying value of the intangibles to their future undiscounted cash flows. To the extent the undiscounted cash flows are less than the carrying value, analysis is performed based on several criteria, including, but not limited to, revenue trends, discounted operating cash flows and other operating factors to determine the impairment amount. | ||||||||
As of December 31, 2013, the remaining estimated weighted average useful lives of intangible assets are as follows: | ||||||||
Years | ||||||||
Patents | 14.3 | |||||||
Licenses | 3.4 | |||||||
Non-compete agreements | 1.5 | |||||||
Fair Value of Financial Instruments — The carrying amounts of financial instruments, including cash and cash equivalents, short-term investments, trade receivables, accounts payable, and accrued liabilities approximate fair value due to the short maturities of these instruments. | ||||||||
Revenue Recognition - The Company recognizes revenue on sales of products when title passes which can occur at the time of shipment or when the goods arrive at the customer location depending on the agreement with the customer. The Company sells its products to both distributors and end-users. Sales to distributors and end-users are recorded based upon the criteria governed by the sales, delivery, and payment terms stated on the invoices from the Company to the purchaser. In addition to transfer of title / risk of loss, all revenue is recorded in accordance with the criteria outlined within SAB 104 and FASB ASC 605 Revenue Recognition: | ||||||||
(a) persuasive evidence of an arrangement (principally in the form of customer sales orders and the Company’s sales invoices, as generally there is no other formal agreement underlying the sale transactions) | ||||||||
(b) delivery and performance (evidenced by proof of delivery, e.g. the shipment of film and substrates with bill of lading used for proof of delivery for FOB shipping point terms, and the carrier booking confirmation report used for FOB destination terms. Once the finished product is shipped and physically delivered under the terms of the invoice and sales order, the Company has no additional performance or service obligations to complete) | ||||||||
(c) a fixed and determinable sales price (the Company’s pricing is established and is not based on variable terms, as evidenced in either the Company’s invoices or the limited number of distribution agreements; the Company rarely grants extended payment terms and has no history of concessions) | ||||||||
(d) a reasonable likelihood of payment (the Company’s terms are standard, and the Company does not have a substantial history of customer defaults or non-payment) | ||||||||
Sales are reported on a net basis by deducting credits, estimated normal returns and discounts. 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. Freight billed to customers is included in sales. Shipping costs are included in cost of goods sold. | ||||||||
Self-Funded Medical Insurance - Beginning in January 2012, the Company moved from a fully insured to a self-funded medical insurance plan. The Company contracted with an administrative service company or a “third party administrator” to supervise and administer the program and act as the Company’s fiduciary and representative. The Company has reduced its risk under this self-funded plan by purchasing both specific and aggregate stop-loss insurance coverage for individual claims and total annual claims in excess of prescribed limits. The Company records estimates for claim liabilities based on information provided by the third-party administrators, historical claims experience, the life cycle of claims, expected costs of claims incurred but not paid, and expected costs to settle unpaid claims. The Company regularly monitors its estimated insurance-related liabilities. Actual claims experience may differ from the Company’s estimates. Costs related to the administration of the plan and related claims are expensed as incurred. The total liability for self-funded medical insurance was $55,000 as of December 31, 2013 and $54,000 as of December 31, 2012. The liability related to self-funded medical insurance is included within other accrued liabilities in the balance sheet. | ||||||||
Deferred Taxes - Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company follows the accounting standard on accounting for uncertainty in income taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses derecognition, classification, interest and penalties on income taxes, and accounting in interim periods. | ||||||||
Earnings Per Common Share (EPS) - Basic EPS is calculated using net income divided by the weighted average of common shares outstanding. Diluted EPS is similar to Basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares, when dilutive, that would have been outstanding if the potential dilutive common shares, such as those shares subject to options, had been issued. | ||||||||
Shares used in the calculation of diluted EPS are summarized below: | ||||||||
2013 | 2012 | |||||||
Weighted average common shares outstanding | 2,006,843 | 1,988,066 | ||||||
Dilutive effect of stock options | 3,816 | 2,781 | ||||||
Weighted average common and common equivalent shares outstanding | 2,010,659 | 1,990,847 | ||||||
There were no anti-dilutive options at December 31, 2013 and 2012. | ||||||||
Employee Stock Plan - The Company accounts for employee stock options under the provision of ASC 718 Compensation — Stock Compensation. | ||||||||
Use of Estimates - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the allowance for doubtful trade receivables, the reserve for inventory obsolescence, self-funded health insurance, and the valuation allowance for deferred tax assets. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INCOME TAXES | ' | |||||||
INCOME TAXES | ' | |||||||
2. INCOME TAXES | ||||||||
Income tax expense for the years ended December 31, 2013 and 2012 consists of the following: | ||||||||
2013 | 2012 | |||||||
Current: | ||||||||
Federal | $ | 91,000 | $ | 319,000 | ||||
State | 1,000 | 2,000 | ||||||
92,000 | 321,000 | |||||||
Deferred | 153,000 | 30,000 | ||||||
$ | 245,000 | $ | 351,000 | |||||
The expected provision for income taxes, computed by applying the U.S. federal income tax rate of 34% in 2013 and 35% in 2012 to income before taxes, is reconciled to income tax expense as follows: | ||||||||
2013 | 2012 | |||||||
Expected provision for federal income taxes | $ | 315,000 | $ | 365,700 | ||||
State income taxes, net of federal benefit | 16,000 | (400 | ) | |||||
Domestic manufacturers deduction | (20,000 | ) | (31,800 | ) | ||||
Non-deductible meals, entertainment, and life insurance | 13,000 | 20,800 | ||||||
Prior year adjustments | (32,000 | ) | — | |||||
Research and development credit | (45,000 | ) | — | |||||
Other | (2,000 | ) | (3,300 | ) | ||||
$ | 245,000 | $ | 351,000 | |||||
Net deferred tax liabilities consist of the following as of December 31, 2013 and 2012: | ||||||||
2013 | 2012 | |||||||
Deferred tax assets: | ||||||||
Accrued vacation | $ | 23,000 | $ | 25,000 | ||||
Inventories reserve | 105,000 | 101,000 | ||||||
Allowance for doubtful accounts | 9,000 | 5,000 | ||||||
Allowance for sales returns | 13,000 | 11,000 | ||||||
Capital loss carryforward | 309,000 | 323,000 | ||||||
Research and development credit carryforward | 17,000 | — | ||||||
Less valuation allowance | (326,000 | ) | (323,000 | ) | ||||
150,000 | 142,000 | |||||||
Deferred tax liabilities: | ||||||||
Property and equipment and other assets | (468,000 | ) | (324,000 | ) | ||||
Intangible assets | (59,000 | ) | (42,000 | ) | ||||
Net deferred tax liabilities | $ | (377,000 | ) | $ | (224,000 | ) | ||
The deferred tax amounts described above have been included in the accompanying balance sheet as of December 31, 2013 and 2012 as follows: | ||||||||
2013 | 2012 | |||||||
Current assets | $ | 150,000 | $ | 142,000 | ||||
Noncurrent liabilities | (527,000 | ) | (366,000 | ) | ||||
$ | (377,000 | ) | $ | (224,000 | ) | |||
At December 31, 2013 and 2012, the Company recorded a valuation allowance of $326,000 and $323,000, respectively, related to Minnesota research and development credit and U.S. Federal capital loss carryovers as the company believes it is more likely than not that the deferred tax assets will not be realized. As of December 31, 2013, the capital loss can be carried forward one year and must be offset by a capital gain. | ||||||||
It has been the Company’s policy to recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2013 and 2012, there was no liability for unrecognized tax benefits. | ||||||||
The Company is subject to federal and state taxation. The material jurisdictions that are subject to examination by tax authorities primarily include Minnesota and the United States, for tax years 2010, 2011, 2012 and 2013. |
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
INTANGIBLE ASSETS | ' | |||||||||||||
INTANGIBLE ASSETS | ' | |||||||||||||
3. INTANGIBLE ASSETS | ||||||||||||||
Intangible assets consist of patents, patent applications, licenses and covenants not to compete arising from business combinations. Capitalized patent application costs are included with patents. Intangible assets are amortized on a straight-line basis over their estimated useful lives or terms of their agreement, whichever is shorter. The Company wrote off costs related to patent applications of $23,000 in 2012. No other impairment adjustments to intangible assets were made during the years ended December 31, 2013 or 2012. | ||||||||||||||
Intangible assets at December 31, 2013 and 2012 consist of the following: | ||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Gross Carrying | Accumulated | Gross Carrying | Accumulated | |||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||
Amortized intangible assets: | ||||||||||||||
Patents | $ | 455,068 | $ | (155,970 | ) | $ | 384,464 | $ | (141,447 | ) | ||||
Licenses | 100,000 | (86,459 | ) | 100,000 | (83,334 | ) | ||||||||
Non-compete agreements | 303,000 | (292,992 | ) | 303,000 | (257,326 | ) | ||||||||
$ | 858,068 | $ | (535,421 | ) | $ | 787,464 | $ | (482,107 | ) | |||||
2013 | 2012 | |||||||||||||
Aggregate amortization expense: | ||||||||||||||
For the years ended December 31 | $ | 53,314 | $ | 54,653 | ||||||||||
Estimated amortization expense for the years ending December 31: | ||||||||||||||
2014 | $ | 25,000 | ||||||||||||
2015 | 23,000 | |||||||||||||
2016 | 20,000 | |||||||||||||
2017 | 20,000 | |||||||||||||
2018 | 18,000 | |||||||||||||
In connection with the license agreements, the Company has agreed to pay royalties ranging from 3% to 5% on the sales of products subject to the agreements. The Company incurred $19,000 of expense under these agreements during 2013, and $87,000 during 2012 which have been included in selling, general and administrative expenses in the Statements of Income. |
RETIREMENT_PLAN
RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2013 | |
RETIREMENT PLAN | ' |
RETIREMENT PLAN | ' |
4. RETIREMENT PLAN | |
The Company has established a salary deferral plan under Section 401(k) of the Internal Revenue Code. Such deferrals accumulate on a tax-deferred basis until the employee withdraws the funds. The Company contributes up to 5% of each eligible employee’s compensation. Total retirement expense for the years ended December 31, 2013 and 2012 was approximately $208,000 and $204,000, respectively. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||||||||
5. SEGMENT INFORMATION | |||||||||||||||||||||||
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 Micro-Machining. 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. Micro-Machining provides sound deadening 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. Export sells primarily the same products as Domestic and the IKONICS Imaging products not related to Micro-Machining or DTX. In previous periods, the segment designated as Other included both Micro-Machining and DTX. Beginning in 2013, the Company began to report DTX and Micro-Machining as separate segments. The accounting policies of the segments are the same as those described in the summary of significant accounting policies included in Note 1. | |||||||||||||||||||||||
Management evaluates the performance of each segment based on the components of divisional income, and does not allocate assets and liabilities to segments except for trade receivables. Financial information with respect to the reportable segments follows: | |||||||||||||||||||||||
For the year ended December 31, 2013: | |||||||||||||||||||||||
IKONICS | Micro- | ||||||||||||||||||||||
Domestic | Export | Imaging | DTX | Machining | Unalloc. | Total | |||||||||||||||||
Net sales | $ | 7,260,934 | $ | 5,641,544 | $ | 3,836,762 | $ | 407,193 | $ | 344,975 | $ | — | $ | 17,491,408 | |||||||||
Cost of goods sold | 4,062,141 | 4,057,111 | 1,831,047 | 70,343 | 532,911 | — | 10,553,553 | ||||||||||||||||
Gross profit (loss) | 3,198,793 | 1,584,433 | 2,005,715 | 336,850 | (187,936 | ) | — | 6,937,855 | |||||||||||||||
Selling general and adminstrative* | 1,307,154 | 578,084 | 977,574 | 474,782 | 446,803 | 1,584,003 | 5,368,400 | ||||||||||||||||
Research and development* | — | — | — | — | — | 649,325 | 649,325 | ||||||||||||||||
Income (loss) from operations | $ | 1,891,639 | $ | 1,006,349 | $ | 1,028,141 | $ | (137,932 | ) | $ | (634,739 | ) | $ | (2,233,328 | ) | $ | 920,130 | ||||||
For the year ended December 31, 2012: | |||||||||||||||||||||||
IKONICS | Micro- | ||||||||||||||||||||||
Domestic | Export | Imaging | DTX | Machining | Unalloc. | Total | |||||||||||||||||
Net sales | $ | 7,118,912 | $ | 5,523,177 | $ | 3,708,987 | $ | 470,205 | $ | 491,126 | $ | — | $ | 17,312,407 | |||||||||
Cost of goods sold | 4,036,339 | 4,042,689 | 1,705,054 | 118,349 | 465,132 | — | 10,367,563 | ||||||||||||||||
Gross profit | 3,082,573 | 1,480,488 | 2,003,933 | 351,856 | 25,994 | — | 6,944,844 | ||||||||||||||||
Selling general and adminstrative* | 1,226,107 | 607,453 | 1,099,812 | 493,631 | 314,803 | 1,540,381 | 5,282,187 | ||||||||||||||||
Research and development* | — | — | — | — | — | 629,776 | 629,776 | ||||||||||||||||
Income (loss) from operations | $ | 1,856,466 | $ | 873,035 | $ | 904,121 | $ | (141,775 | ) | $ | (288,809 | ) | $ | (2,170,157 | ) | $ | 1,032,881 | ||||||
* The Company does not allocate all general and administrative expenses or any research and development expenses to its operating segments for internal reporting. | |||||||||||||||||||||||
Trade receivables by segment as of December 31, 2013 and December 31, 2012 were as follows: | |||||||||||||||||||||||
Dec 31, 2013 | Dec 31, 2012 | ||||||||||||||||||||||
Domestic | $ | 1,012,057 | $ | 928,698 | |||||||||||||||||||
Export | 667,343 | 708,933 | |||||||||||||||||||||
IKONICS Imaging | 339,537 | 272,346 | |||||||||||||||||||||
DTX | 26,910 | 117,552 | |||||||||||||||||||||
Micro-Machining | 40,222 | 57,122 | |||||||||||||||||||||
Unallocated | (35,216 | ) | (24,339 | ) | |||||||||||||||||||
Total | $ | 2,050,853 | $ | 2,060,312 |
STOCK_OPTIONS
STOCK OPTIONS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
STOCK OPTIONS | ' | |||||||||||||
STOCK OPTIONS | ' | |||||||||||||
6. STOCK OPTIONS | ||||||||||||||
The Company has a stock incentive plan for the issuance of up to 442,750 shares of common stock. The plan provides for granting eligible participants stock options or other stock awards, as described by the plan, at option prices ranging from 85% to 110% of fair market value at date of grant. Options granted expire up to seven years after the date of grant. Such options generally become exercisable over a three year period. A total of 115,573 shares of common stock are reserved for additional grants of options under the plan at December 31, 2013. | ||||||||||||||
Under the plan, the Company charged compensation cost of $13,907 and $17,818 against income in 2013 and 2012, respectively. | ||||||||||||||
As of December 31, 2013, there was approximately $20,000 of unrecognized compensation cost related to unvested share-based compensation awards granted which is expected to be recognized over the next three years. | ||||||||||||||
Proceeds from the exercise of stock options were $89,398 for 2013 and $89,028 for 2012. | ||||||||||||||
The fair value of options granted during 2013 and 2012 were estimated using the Black-Scholes option pricing model with the following assumptions: | ||||||||||||||
2013 | 2012 | |||||||||||||
Dividend yield | 0% | 0% | ||||||||||||
Expected volatility | 43.90% | 41.80% | ||||||||||||
Expected life of option | Five Years | Five Years | ||||||||||||
Risk-free interest rate | 0.70% | 0.80% | ||||||||||||
Fair value of each option on grant date | $4.72 | $2.73 | ||||||||||||
There were 4,250 options and 750 options granted during 2013 and 2012, respectively. | ||||||||||||||
FASB ASC 718, Compensation — Stock Compensation specifies that initial accruals be based on the estimated number of instruments for which the requisite service is expected to be rendered. Therefore, the Company is required to incorporate a preexisting forfeiture rate based on the historical forfeiture experience and prospective actuarial analysis, estimated at 3%. | ||||||||||||||
A summary of the status of the Company’s stock option plan as of December 31, 2013 and changes during the year then ended is presented below: | ||||||||||||||
Options | Shares | Weighted | Weighted | Aggregate | ||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise | Remaining | Value | ||||||||||||
Price | Contractual | |||||||||||||
Term (years) | ||||||||||||||
Outstanding at January 1, 2013 | 21,362 | $ | 6.72 | |||||||||||
Granted | 4,250 | 12.56 | ||||||||||||
Exercised | (13,695 | ) | 6.53 | |||||||||||
Expired and forfeited | (500 | ) | 12.56 | |||||||||||
Outstanding at December 31, 2013 | 11,417 | $ | 8.87 | 2.67 | $ | 66,876 | ||||||||
Vested or expected to vest at December 31, 2013 | 11,417 | $ | 8.87 | 2.67 | $ | 66,876 | ||||||||
Exercisable at December 31, 2013 | 4,166 | $ | 6.57 | 1.24 | $ | 33,977 | ||||||||
The weighted-average grant date fair value of options granted was $4.72 and $2.73 for the years ended December 31, 2013 and 2012, respectively. The total intrinsic value of options exercised was $95,477 for the year ended December 31, 2013 and $32,650 for the year ended December 31, 2012. | ||||||||||||||
The following table summarizes information about stock options outstanding at December 31, 2013: | ||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||
Weighted- | ||||||||||||||
Number | Average | Weighted- | Number | Weighted- | ||||||||||
Range of | Outstanding at | Remaining | Average | Exercisable at | Average | |||||||||
Exercise | December 31, | Contractual | Exercise | December 31, | Exercise | |||||||||
Price | 2013 | Life (years) | Price | 2013 | Price | |||||||||
$ 5.00 - $5.99 | 1,500 | 0.31 | $ | 5 | 1,500 | $ | 5 | |||||||
$ 7.00 - $7.99 | 6,167 | 2.24 | $ | 7.56 | 2,666 | $ | 7.45 | |||||||
$12.00 - $13.00 | 3,750 | 4.31 | $ | 12.56 | — | $ | — | |||||||
11,417 | 2.67 | $ | 8.87 | 4,166 | $ | 6.57 |
CONCENTRATION_OF_CREDIT_RISK
CONCENTRATION OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2013 | |
CONCENTRATION OF CREDIT RISK | ' |
CONCENTRATION OF CREDIT RISK | ' |
7. CONCENTRATION OF CREDIT RISK | |
The Company maintains its cash balances primarily in two financial institutions. As of December 31, 2013, the balance at each of the institutions exceeded the Federal Deposit Insurance Corporation coverage. | |
Trade receivables are financial instruments that also expose the Company to concentration of credit risk. The large number of customers comprising the Company’s customer base and their dispersion across different geographic areas limits such exposure. In addition, the Company routinely assesses the financial strength of its customers and maintains an allowance for doubtful accounts that management believes will adequately provide for credit losses. |
LINE_OF_CREDIT
LINE OF CREDIT | 12 Months Ended |
Dec. 31, 2013 | |
LINE OF CREDIT | ' |
LINE OF CREDIT | ' |
8. LINE OF CREDIT | |
The Company has a $1,250,000 bank line of credit that provides for working capital financing. This line of credit is subject to renewal on May 31, 2015, is collateralized by trade receivables and inventories, and bears interest at 2.5 percentage points over 30-day LIBOR. There were no outstanding borrowings under this line of credit at December 31, 2013 and 2012. There are no financial covenants related to the line of credit. |
NONMONETARY_TRANSACTION
NON-MONETARY TRANSACTION | 12 Months Ended |
Dec. 31, 2013 | |
NON-MONETARY TRANSACTION | ' |
NON-MONETARY TRANSACTION | ' |
9. NON-MONETARY TRANSACTION | |
During 2012, the Company entered into a like-kind exchange with a customer where the Company and the Company’s customer exchanged digital texturing printers. In addition to the Company receiving a printer from the customer, the Company also received $35,000. A loss of $16,000 was recognized by the Company on the exchange. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||
Cash Equivalents | ' | |||||||
Cash Equivalents - The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash equivalents consist of money market funds in which the carrying value approximates market value because of the short maturity of these instruments. The money market fund utilized by IKONICS invests in United States dollar denominated securities that present minimal credit risk and consist of investments in debt securities issued or guaranteed by the United States government or by United States government agencies or instrumentalities and repurchase agreements fully collateralized by the United States Treasury and United States government securities. | ||||||||
Short-Term Investments | ' | |||||||
Short-Term Investments - Short-term investments consist of fully insured certificates of deposit with original maturities ranging from six to twelve months as of December 31, 2013 and 2012, respectively. | ||||||||
Trade Receivables | ' | |||||||
Trade Receivables — Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables 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 considering 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. | ||||||||
A small percentage of the trade receivables balance is denominated in a foreign currency with no concentration in any given country. At the end of each reporting period, the Company analyzes the receivable balance for customers paying in a foreign currency. These balances are adjusted to each quarter or year end spot rate in accordance with FASB ASC 830, Foreign Currency Matters. Foreign currency transactions and translation adjustments did not have a significant effect on the Balance Sheet or the Statements of Income, Stockholders’ Equity and Cash Flows for 2013 and 2012. | ||||||||
Inventories | ' | |||||||
Inventories - Inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method. If the first-in, first-out (FIFO) cost method had been used, inventories would have been approximately $1,248,000 and $1,246,000 higher than reported at December 31, 2013 and 2012, respectively. The major components of inventories are as follows: | ||||||||
2013 | 2012 | |||||||
Raw materials | $ | 1,952,398 | $ | 2,072,540 | ||||
Work-in-progress | 389,501 | 373,512 | ||||||
Finished goods | 1,461,264 | 1,478,444 | ||||||
Reduction to LIFO cost | (1,248,221 | ) | (1,245,632 | ) | ||||
Total inventories | $ | 2,554,942 | $ | 2,678,864 | ||||
Depreciation | ' | |||||||
Depreciation - Depreciation of property, plant and equipment is computed using the straight-line method over the following estimated useful lives: | ||||||||
Years | ||||||||
Buildings | 15-40 | |||||||
Machinery and equipment | 10-May | |||||||
Office equipment | 10-Mar | |||||||
Vehicles | 3 | |||||||
Intangible Assets | ' | |||||||
Intangible Assets — Intangible assets consist of patents, licenses and covenants not to compete arising from business combinations. Intangible assets are amortized on a straight-line basis over their estimated useful lives or agreement terms. Intangible assets with indefinite lives are assessed for impairment whenever events or circumstances indicate the carrying value may not be fully recoverable by comparing the carrying value of the intangibles to their future undiscounted cash flows. To the extent the undiscounted cash flows are less than the carrying value, analysis is performed based on several criteria, including, but not limited to, revenue trends, discounted operating cash flows and other operating factors to determine the impairment amount. | ||||||||
As of December 31, 2013, the remaining estimated weighted average useful lives of intangible assets are as follows: | ||||||||
Years | ||||||||
Patents | 14.3 | |||||||
Licenses | 3.4 | |||||||
Non-compete agreements | 1.5 | |||||||
Fair Value of Financial Instruments | ' | |||||||
Fair Value of Financial Instruments — The carrying amounts of financial instruments, including cash and cash equivalents, short-term investments, trade receivables, accounts payable, and accrued liabilities approximate fair value due to the short maturities of these instruments. | ||||||||
Revenue Recognition | ' | |||||||
Revenue Recognition - The Company recognizes revenue on sales of products when title passes which can occur at the time of shipment or when the goods arrive at the customer location depending on the agreement with the customer. The Company sells its products to both distributors and end-users. Sales to distributors and end-users are recorded based upon the criteria governed by the sales, delivery, and payment terms stated on the invoices from the Company to the purchaser. In addition to transfer of title / risk of loss, all revenue is recorded in accordance with the criteria outlined within SAB 104 and FASB ASC 605 Revenue Recognition: | ||||||||
(a) persuasive evidence of an arrangement (principally in the form of customer sales orders and the Company’s sales invoices, as generally there is no other formal agreement underlying the sale transactions) | ||||||||
(b) delivery and performance (evidenced by proof of delivery, e.g. the shipment of film and substrates with bill of lading used for proof of delivery for FOB shipping point terms, and the carrier booking confirmation report used for FOB destination terms. Once the finished product is shipped and physically delivered under the terms of the invoice and sales order, the Company has no additional performance or service obligations to complete) | ||||||||
(c) a fixed and determinable sales price (the Company’s pricing is established and is not based on variable terms, as evidenced in either the Company’s invoices or the limited number of distribution agreements; the Company rarely grants extended payment terms and has no history of concessions) | ||||||||
(d) a reasonable likelihood of payment (the Company’s terms are standard, and the Company does not have a substantial history of customer defaults or non-payment) | ||||||||
Sales are reported on a net basis by deducting credits, estimated normal returns and discounts. 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. Freight billed to customers is included in sales. Shipping costs are included in cost of goods sold. | ||||||||
Self-Funded Medical Insurance | ' | |||||||
Self-Funded Medical Insurance - Beginning in January 2012, the Company moved from a fully insured to a self-funded medical insurance plan. The Company contracted with an administrative service company or a “third party administrator” to supervise and administer the program and act as the Company’s fiduciary and representative. The Company has reduced its risk under this self-funded plan by purchasing both specific and aggregate stop-loss insurance coverage for individual claims and total annual claims in excess of prescribed limits. The Company records estimates for claim liabilities based on information provided by the third-party administrators, historical claims experience, the life cycle of claims, expected costs of claims incurred but not paid, and expected costs to settle unpaid claims. The Company regularly monitors its estimated insurance-related liabilities. Actual claims experience may differ from the Company’s estimates. Costs related to the administration of the plan and related claims are expensed as incurred. The total liability for self-funded medical insurance was $55,000 as of December 31, 2013 and $54,000 as of December 31, 2012. The liability related to self-funded medical insurance is included within other accrued liabilities in the balance sheet. | ||||||||
Deferred Taxes | ' | |||||||
Deferred Taxes - Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company follows the accounting standard on accounting for uncertainty in income taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses derecognition, classification, interest and penalties on income taxes, and accounting in interim periods. | ||||||||
Earnings Per Common Share (EPS) | ' | |||||||
Earnings Per Common Share (EPS) - Basic EPS is calculated using net income divided by the weighted average of common shares outstanding. Diluted EPS is similar to Basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares, when dilutive, that would have been outstanding if the potential dilutive common shares, such as those shares subject to options, had been issued. | ||||||||
Shares used in the calculation of diluted EPS are summarized below: | ||||||||
2013 | 2012 | |||||||
Weighted average common shares outstanding | 2,006,843 | 1,988,066 | ||||||
Dilutive effect of stock options | 3,816 | 2,781 | ||||||
Weighted average common and common equivalent shares outstanding | 2,010,659 | 1,990,847 | ||||||
There were no anti-dilutive options at December 31, 2013 and 2012. | ||||||||
Employee Stock Plan | ' | |||||||
Employee Stock Plan - The Company accounts for employee stock options under the provision of ASC 718 Compensation — Stock Compensation. | ||||||||
Use of Estimates | ' | |||||||
Use of Estimates - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the allowance for doubtful trade receivables, the reserve for inventory obsolescence, self-funded health insurance, and the valuation allowance for deferred tax assets. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||
Schedule of major components of inventories | ' | |||||||
2013 | 2012 | |||||||
Raw materials | $ | 1,952,398 | $ | 2,072,540 | ||||
Work-in-progress | 389,501 | 373,512 | ||||||
Finished goods | 1,461,264 | 1,478,444 | ||||||
Reduction to LIFO cost | (1,248,221 | ) | (1,245,632 | ) | ||||
Total inventories | $ | 2,554,942 | $ | 2,678,864 | ||||
Schedule of estimated useful lives of property, plant and equipment | ' | |||||||
Years | ||||||||
Buildings | 15-40 | |||||||
Machinery and equipment | 10-May | |||||||
Office equipment | 10-Mar | |||||||
Vehicles | 3 | |||||||
Schedule of remaining estimated weighted average useful lives of intangible assets | ' | |||||||
Years | ||||||||
Patents | 14.3 | |||||||
Licenses | 3.4 | |||||||
Non-compete agreements | 1.5 | |||||||
Summary of shares used in the calculation of diluted EPS | ' | |||||||
2013 | 2012 | |||||||
Weighted average common shares outstanding | 2,006,843 | 1,988,066 | ||||||
Dilutive effect of stock options | 3,816 | 2,781 | ||||||
Weighted average common and common equivalent shares outstanding | 2,010,659 | 1,990,847 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INCOME TAXES | ' | |||||||
Schedule of components of income tax expense | ' | |||||||
2013 | 2012 | |||||||
Current: | ||||||||
Federal | $ | 91,000 | $ | 319,000 | ||||
State | 1,000 | 2,000 | ||||||
92,000 | 321,000 | |||||||
Deferred | 153,000 | 30,000 | ||||||
$ | 245,000 | $ | 351,000 | |||||
Schedule of expected provision for income taxes, computed by applying the U.S. federal income tax rate to income before taxes, reconciled to income tax expense | ' | |||||||
2013 | 2012 | |||||||
Expected provision for federal income taxes | $ | 315,000 | $ | 365,700 | ||||
State income taxes, net of federal benefit | 16,000 | (400 | ) | |||||
Domestic manufacturers deduction | (20,000 | ) | (31,800 | ) | ||||
Non-deductible meals, entertainment, and life insurance | 13,000 | 20,800 | ||||||
Prior year adjustments | (32,000 | ) | — | |||||
Research and development credit | (45,000 | ) | — | |||||
Other | (2,000 | ) | (3,300 | ) | ||||
$ | 245,000 | $ | 351,000 | |||||
Schedule of components of net deferred tax liabilities | ' | |||||||
2013 | 2012 | |||||||
Deferred tax assets: | ||||||||
Accrued vacation | $ | 23,000 | $ | 25,000 | ||||
Inventories reserve | 105,000 | 101,000 | ||||||
Allowance for doubtful accounts | 9,000 | 5,000 | ||||||
Allowance for sales returns | 13,000 | 11,000 | ||||||
Capital loss carryforward | 309,000 | 323,000 | ||||||
Research and development credit carryforward | 17,000 | — | ||||||
Less valuation allowance | (326,000 | ) | (323,000 | ) | ||||
150,000 | 142,000 | |||||||
Deferred tax liabilities: | ||||||||
Property and equipment and other assets | (468,000 | ) | (324,000 | ) | ||||
Intangible assets | (59,000 | ) | (42,000 | ) | ||||
Net deferred tax liabilities | $ | (377,000 | ) | $ | (224,000 | ) | ||
Schedule of deferred tax amounts included in the accompanying balance sheet | ' | |||||||
2013 | 2012 | |||||||
Current assets | $ | 150,000 | $ | 142,000 | ||||
Noncurrent liabilities | (527,000 | ) | (366,000 | ) | ||||
$ | (377,000 | ) | $ | (224,000 | ) |
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
INTANGIBLE ASSETS | ' | |||||||||||||
Schedule of components of intangible assets | ' | |||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Gross Carrying | Accumulated | Gross Carrying | Accumulated | |||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||
Amortized intangible assets: | ||||||||||||||
Patents | $ | 455,068 | $ | (155,970 | ) | $ | 384,464 | $ | (141,447 | ) | ||||
Licenses | 100,000 | (86,459 | ) | 100,000 | (83,334 | ) | ||||||||
Non-compete agreements | 303,000 | (292,992 | ) | 303,000 | (257,326 | ) | ||||||||
$ | 858,068 | $ | (535,421 | ) | $ | 787,464 | $ | (482,107 | ) | |||||
2013 | 2012 | |||||||||||||
Aggregate amortization expense: | ||||||||||||||
For the years ended December 31 | $ | 53,314 | $ | 54,653 | ||||||||||
Schedule of estimated amortization expense | ' | |||||||||||||
2014 | $ | 25,000 | ||||||||||||
2015 | 23,000 | |||||||||||||
2016 | 20,000 | |||||||||||||
2017 | 20,000 | |||||||||||||
2018 | 18,000 |
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||||||||
Schedule of financial information with respect to the reportable segments | ' | ||||||||||||||||||||||
For the year ended December 31, 2013: | |||||||||||||||||||||||
IKONICS | Micro- | ||||||||||||||||||||||
Domestic | Export | Imaging | DTX | Machining | Unalloc. | Total | |||||||||||||||||
Net sales | $ | 7,260,934 | $ | 5,641,544 | $ | 3,836,762 | $ | 407,193 | $ | 344,975 | $ | — | $ | 17,491,408 | |||||||||
Cost of goods sold | 4,062,141 | 4,057,111 | 1,831,047 | 70,343 | 532,911 | — | 10,553,553 | ||||||||||||||||
Gross profit (loss) | 3,198,793 | 1,584,433 | 2,005,715 | 336,850 | (187,936 | ) | — | 6,937,855 | |||||||||||||||
Selling general and adminstrative* | 1,307,154 | 578,084 | 977,574 | 474,782 | 446,803 | 1,584,003 | 5,368,400 | ||||||||||||||||
Research and development* | — | — | — | — | — | 649,325 | 649,325 | ||||||||||||||||
Income (loss) from operations | $ | 1,891,639 | $ | 1,006,349 | $ | 1,028,141 | $ | (137,932 | ) | $ | (634,739 | ) | $ | (2,233,328 | ) | $ | 920,130 | ||||||
For the year ended December 31, 2012: | |||||||||||||||||||||||
IKONICS | Micro- | ||||||||||||||||||||||
Domestic | Export | Imaging | DTX | Machining | Unalloc. | Total | |||||||||||||||||
Net sales | $ | 7,118,912 | $ | 5,523,177 | $ | 3,708,987 | $ | 470,205 | $ | 491,126 | $ | — | $ | 17,312,407 | |||||||||
Cost of goods sold | 4,036,339 | 4,042,689 | 1,705,054 | 118,349 | 465,132 | — | 10,367,563 | ||||||||||||||||
Gross profit | 3,082,573 | 1,480,488 | 2,003,933 | 351,856 | 25,994 | — | 6,944,844 | ||||||||||||||||
Selling general and adminstrative* | 1,226,107 | 607,453 | 1,099,812 | 493,631 | 314,803 | 1,540,381 | 5,282,187 | ||||||||||||||||
Research and development* | — | — | — | — | — | 629,776 | 629,776 | ||||||||||||||||
Income (loss) from operations | $ | 1,856,466 | $ | 873,035 | $ | 904,121 | $ | (141,775 | ) | $ | (288,809 | ) | $ | (2,170,157 | ) | $ | 1,032,881 | ||||||
* The Company does not allocate all general and administrative expenses or any research and development expenses to its operating segments for internal reporting. | |||||||||||||||||||||||
Schedule of trade receivables by segment | ' | ||||||||||||||||||||||
Dec 31, 2013 | Dec 31, 2012 | ||||||||||||||||||||||
Domestic | $ | 1,012,057 | $ | 928,698 | |||||||||||||||||||
Export | 667,343 | 708,933 | |||||||||||||||||||||
IKONICS Imaging | 339,537 | 272,346 | |||||||||||||||||||||
DTX | 26,910 | 117,552 | |||||||||||||||||||||
Micro-Machining | 40,222 | 57,122 | |||||||||||||||||||||
Unallocated | (35,216 | ) | (24,339 | ) | |||||||||||||||||||
Total | $ | 2,050,853 | $ | 2,060,312 |
STOCK_OPTIONS_Tables
STOCK OPTIONS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
STOCK OPTIONS | ' | |||||||||||||
Assumptions used in estimating fair value of stock options | ' | |||||||||||||
2013 | 2012 | |||||||||||||
Dividend yield | 0% | 0% | ||||||||||||
Expected volatility | 43.90% | 41.80% | ||||||||||||
Expected life of option | Five Years | Five Years | ||||||||||||
Risk-free interest rate | 0.70% | 0.80% | ||||||||||||
Fair value of each option on grant date | $4.72 | $2.73 | ||||||||||||
Stock option activity | ' | |||||||||||||
Options | Shares | Weighted | Weighted | Aggregate | ||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise | Remaining | Value | ||||||||||||
Price | Contractual | |||||||||||||
Term (years) | ||||||||||||||
Outstanding at January 1, 2013 | 21,362 | $ | 6.72 | |||||||||||
Granted | 4,250 | 12.56 | ||||||||||||
Exercised | (13,695 | ) | 6.53 | |||||||||||
Expired and forfeited | (500 | ) | 12.56 | |||||||||||
Outstanding at December 31, 2013 | 11,417 | $ | 8.87 | 2.67 | $ | 66,876 | ||||||||
Vested or expected to vest at December 31, 2013 | 11,417 | $ | 8.87 | 2.67 | $ | 66,876 | ||||||||
Exercisable at December 31, 2013 | 4,166 | $ | 6.57 | 1.24 | $ | 33,977 | ||||||||
Summary of information about stock options outstanding | ' | |||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||
Weighted- | ||||||||||||||
Number | Average | Weighted- | Number | Weighted- | ||||||||||
Range of | Outstanding at | Remaining | Average | Exercisable at | Average | |||||||||
Exercise | December 31, | Contractual | Exercise | December 31, | Exercise | |||||||||
Price | 2013 | Life (years) | Price | 2013 | Price | |||||||||
$ 5.00 - $5.99 | 1,500 | 0.31 | $ | 5 | 1,500 | $ | 5 | |||||||
$ 7.00 - $7.99 | 6,167 | 2.24 | $ | 7.56 | 2,666 | $ | 7.45 | |||||||
$12.00 - $13.00 | 3,750 | 4.31 | $ | 12.56 | — | $ | — | |||||||
11,417 | 2.67 | $ | 8.87 | 4,166 | $ | 6.57 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (Export) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Minimum | ' | ' |
Description of Business and Foreign Export Sales | ' | ' |
Term under credit arrangement | '30 days | ' |
Maximum | ' | ' |
Description of Business and Foreign Export Sales | ' | ' |
Term under credit arrangement | '90 days | ' |
Net sales | Customer concentration | ' | ' |
Description of Business and Foreign Export Sales | ' | ' |
Percentage of net sales and trade receivable | 32.30% | 31.90% |
Trade receivables | Credit concentration | ' | ' |
Description of Business and Foreign Export Sales | ' | ' |
Percentage of net sales and trade receivable | 32.50% | 34.40% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
Certificates of deposit | Certificates of deposit | |||
Minimum | Maximum | |||
Short-term investments | ' | ' | ' | ' |
Maturity period | ' | ' | '6 months | '12 months |
Inventories | ' | ' | ' | ' |
Excess of FIFO value over LIFO value | $1,248,000 | $1,246,000 | ' | ' |
Major components of inventories, net of the allowance for obsolescence | ' | ' | ' | ' |
Raw materials | 1,952,398 | 2,072,540 | ' | ' |
Work-in-progress | 389,501 | 373,512 | ' | ' |
Finished goods | 1,461,264 | 1,478,444 | ' | ' |
Reduction to LIFO cost | -1,248,221 | -1,245,632 | ' | ' |
Total inventories | $2,554,942 | $2,678,864 | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) | 12 Months Ended |
Dec. 31, 2013 | |
Buildings | Minimum | ' |
Depreciation | ' |
Estimated useful lives | '15 years |
Buildings | Maximum | ' |
Depreciation | ' |
Estimated useful lives | '40 years |
Machinery and equipment | Minimum | ' |
Depreciation | ' |
Estimated useful lives | '5 years |
Machinery and equipment | Maximum | ' |
Depreciation | ' |
Estimated useful lives | '10 years |
Office equipment | Minimum | ' |
Depreciation | ' |
Estimated useful lives | '3 years |
Office equipment | Maximum | ' |
Depreciation | ' |
Estimated useful lives | '10 years |
Vehicles | ' |
Depreciation | ' |
Estimated useful lives | '3 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) | 12 Months Ended |
Dec. 31, 2013 | |
Patents | ' |
INTANGIBLE ASSETS | ' |
Remaining estimated weighted average useful lives | '14 years 3 months 18 days |
Licenses | ' |
INTANGIBLE ASSETS | ' |
Remaining estimated weighted average useful lives | '3 years 4 months 24 days |
Non-compete agreements | ' |
INTANGIBLE ASSETS | ' |
Remaining estimated weighted average useful lives | '1 year 6 months |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Self-Funded Medical Insurance | ' | ' |
Total liability for self-funded medical insurance | $55,000 | $54,000 |
Earnings Per Common Share (EPS) | ' | ' |
Weighted average common shares outstanding | 2,006,843 | 1,988,066 |
Dilutive effect of stock options | 3,816 | 2,781 |
Weighted average common and common equivalent shares outstanding | 2,010,659 | 1,990,847 |
Stock Options | ' | ' |
Anti-dilutive securities | ' | ' |
Anti-dilutive securities outstanding (in shares) | 0 | 0 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Current: | ' | ' |
Federal | $91,000 | $319,000 |
State | 1,000 | 2,000 |
Total current | 92,000 | 321,000 |
Deferred | 153,000 | 30,000 |
Income tax expense | $245,000 | $351,000 |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation of expected provision for income taxes, computed by applying the U.S. federal income tax rate to income before taxes, to income tax expense | ' | ' |
U.S. federal income tax rate (as a percent) | 34.00% | 35.00% |
Expected provision for federal income taxes | $315,000 | $365,700 |
State income taxes, net of federal benefit | 16,000 | -400 |
Domestic manufacturers deduction | -20,000 | -31,800 |
Non-deductible meals, entertainment, and life insurance | 13,000 | 20,800 |
Prior year adjustments | -32,000 | ' |
Research and development credit | -45,000 | ' |
Other | -2,000 | -3,300 |
Income tax expense | 245,000 | 351,000 |
Deferred tax assets: | ' | ' |
Accrued vacation | 23,000 | 25,000 |
Inventories reserve | 105,000 | 101,000 |
Allowance for doubtful accounts | 9,000 | 5,000 |
Allowance for sales returns | 13,000 | 11,000 |
Capital loss carryforward | 309,000 | 323,000 |
Research and development credit carryforward | 17,000 | ' |
Less valuation allowance | -326,000 | -323,000 |
Total deferred tax assets | 150,000 | 142,000 |
Deferred tax liabilities: | ' | ' |
Property and equipment and other assets | -468,000 | -324,000 |
Intangible assets | -59,000 | -42,000 |
Net deferred tax liabilities | ($377,000) | ($224,000) |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Deferred tax amounts included in balance sheet | ' | ' |
Current assets | $150,000 | $142,000 |
Noncurrent liabilities | -527,000 | -366,000 |
Net deferred tax liabilities | -377,000 | -224,000 |
Valuation allowance | 326,000 | 323,000 |
Carryforward period | '1 year | ' |
Unrecognized tax benefits | $0 | $0 |
INTANGIBLE_ASSETS_Details
INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
INTANGIBLE ASSETS | ' | ' |
Patent application cost write off | ' | ($23,122) |
Other impairment adjustments to intangible assets | 0 | 0 |
Amortized intangible assets: | ' | ' |
Gross Carrying Amount | 858,068 | 787,464 |
Accumulated Amortization | -535,421 | -482,107 |
Aggregate amortization expense: | 53,314 | 54,653 |
Estimated amortization expense | ' | ' |
2014 | 25,000 | ' |
2015 | 23,000 | ' |
2016 | 20,000 | ' |
2017 | 20,000 | ' |
2018 | 18,000 | ' |
Patents | ' | ' |
INTANGIBLE ASSETS | ' | ' |
Patent application cost write off | ' | 23,000 |
Amortized intangible assets: | ' | ' |
Gross Carrying Amount | 455,068 | 384,464 |
Accumulated Amortization | -155,970 | -141,447 |
Licenses | ' | ' |
Amortized intangible assets: | ' | ' |
Gross Carrying Amount | 100,000 | 100,000 |
Accumulated Amortization | -86,459 | -83,334 |
Estimated amortization expense | ' | ' |
Expense under license agreement | 19,000 | 87,000 |
Licenses | Minimum | ' | ' |
Estimated amortization expense | ' | ' |
Payment of royalties (as a percent) | 3.00% | ' |
Licenses | Maximum | ' | ' |
Estimated amortization expense | ' | ' |
Payment of royalties (as a percent) | 5.00% | ' |
Non-compete agreements | ' | ' |
Amortized intangible assets: | ' | ' |
Gross Carrying Amount | 303,000 | 303,000 |
Accumulated Amortization | ($292,992) | ($257,326) |
RETIREMENT_PLAN_Details
RETIREMENT PLAN (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
RETIREMENT PLAN | ' | ' |
Maximum contribution of the entity as a percentage of eligible employee's compensation | 5.00% | ' |
Retirement expense | $208,000 | $204,000 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
item | ||
Segment Reporting Information | ' | ' |
Number of reportable segments | 5 | ' |
Financial information with respect to the reportable segments | ' | ' |
Net sales | $17,491,408 | $17,312,407 |
Cost of goods sold | 10,553,553 | 10,367,563 |
GROSS PROFIT | 6,937,855 | 6,944,844 |
Selling general and administrative | 5,368,400 | 5,282,187 |
Research and development | 649,325 | 629,776 |
INCOME FROM OPERATIONS | 920,130 | 1,032,881 |
Trade receivables by segment | ' | ' |
Trade receivables | 2,050,853 | 2,060,312 |
Unalloc. | ' | ' |
Financial information with respect to the reportable segments | ' | ' |
Selling general and administrative | 1,584,003 | 1,540,381 |
Research and development | 649,325 | 629,776 |
INCOME FROM OPERATIONS | -2,233,328 | -2,170,157 |
Trade receivables by segment | ' | ' |
Trade receivables | -35,216 | -24,339 |
Domestic | ' | ' |
Financial information with respect to the reportable segments | ' | ' |
Net sales | 7,260,934 | 7,118,912 |
Cost of goods sold | 4,062,141 | 4,036,339 |
GROSS PROFIT | 3,198,793 | 3,082,573 |
Selling general and administrative | 1,307,154 | 1,226,107 |
INCOME FROM OPERATIONS | 1,891,639 | 1,856,466 |
Trade receivables by segment | ' | ' |
Trade receivables | 1,012,057 | 928,698 |
Export | ' | ' |
Financial information with respect to the reportable segments | ' | ' |
Net sales | 5,641,544 | 5,523,177 |
Cost of goods sold | 4,057,111 | 4,042,689 |
GROSS PROFIT | 1,584,433 | 1,480,488 |
Selling general and administrative | 578,084 | 607,453 |
INCOME FROM OPERATIONS | 1,006,349 | 873,035 |
Trade receivables by segment | ' | ' |
Trade receivables | 667,343 | 708,933 |
IKONICS Imaging | ' | ' |
Financial information with respect to the reportable segments | ' | ' |
Net sales | 3,836,762 | 3,708,987 |
Cost of goods sold | 1,831,047 | 1,705,054 |
GROSS PROFIT | 2,005,715 | 2,003,933 |
Selling general and administrative | 977,574 | 1,099,812 |
INCOME FROM OPERATIONS | 1,028,141 | 904,121 |
Trade receivables by segment | ' | ' |
Trade receivables | 339,537 | 272,346 |
DTX | ' | ' |
Financial information with respect to the reportable segments | ' | ' |
Net sales | 407,193 | 470,205 |
Cost of goods sold | 70,343 | 118,349 |
GROSS PROFIT | 336,850 | 351,856 |
Selling general and administrative | 474,782 | 493,631 |
INCOME FROM OPERATIONS | -137,932 | -141,775 |
Trade receivables by segment | ' | ' |
Trade receivables | 26,910 | 117,552 |
Micro-Machining | ' | ' |
Financial information with respect to the reportable segments | ' | ' |
Net sales | 344,975 | 491,126 |
Cost of goods sold | 532,911 | 465,132 |
GROSS PROFIT | -187,936 | 25,994 |
Selling general and administrative | 446,803 | 314,803 |
INCOME FROM OPERATIONS | -634,739 | -288,809 |
Trade receivables by segment | ' | ' |
Trade receivables | $40,222 | $57,122 |
STOCK_OPTIONS_Details
STOCK OPTIONS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Stock options | ' | ' |
Number of shares of common stock authorized for issuance | 442,750 | ' |
Proceeds from the exercise of stock | $89,398 | $89,028 |
Stock Options | ' | ' |
Stock options | ' | ' |
Expiration period of options granted | '7 years | ' |
Period over which options become exercisable | '3 years | ' |
Common stock reserved for additional grants (in shares) | 115,573 | ' |
Compensation cost recognized | 13,907 | 17,818 |
Unrecognized compensation cost | 20,000 | ' |
Period during which compensation cost is expected to be recognized | '3 years | ' |
Proceeds from the exercise of stock | $89,398 | $89,028 |
Assumptions used to determine fair value of stock options granted | ' | ' |
Dividend yield (as a percent) | 0.00% | 0.00% |
Expected volatility (as a percent) | 43.90% | 41.80% |
Expected life of option | '5 years | '5 years |
Risk-free interest rate (as a percent) | 0.70% | 0.80% |
Fair value of each option on grant date (in dollars per share) | $4.72 | $2.73 |
Granted (in shares) | 4,250 | 750 |
Estimated forfeiture rate (as a percent) | 3.00% | ' |
Stock Options | Minimum | ' | ' |
Stock options | ' | ' |
Option price range(as a percent) | 85.00% | ' |
Stock Options | Maximum | ' | ' |
Stock options | ' | ' |
Option price range(as a percent) | 110.00% | ' |
STOCK_OPTIONS_Details_2
STOCK OPTIONS (Details 2) (Stock Options, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Stock Options | ' | ' |
Shares | ' | ' |
Outstanding at beginning of period (in shares) | 21,362 | ' |
Granted (in shares) | 4,250 | 750 |
Exercised (in shares) | -13,695 | ' |
Expired and forfeited (in shares) | -500 | ' |
Outstanding at end of period (in shares) | 11,417 | 21,362 |
Vested or expected to vest at the end of the period (in shares) | 11,417 | ' |
Exercisable at end of period (in shares) | 4,166 | ' |
Weighted Average Exercise Price | ' | ' |
Outstanding at beginning of period (in dollars per share) | $6.72 | ' |
Granted (in dollars per share) | $12.56 | ' |
Exercised (in dollars per share) | $6.53 | ' |
Expired and forfeited (in dollars per share) | $12.56 | ' |
Outstanding at end of period (in dollars per share) | $8.87 | $6.72 |
Vested or expected to vest at the end of the period (in dollars per share) | $8.87 | ' |
Exercisable at end of period (in dollars per share) | $6.57 | ' |
Weighted Average Remaining Contractual Term | ' | ' |
Outstanding at end of year | '2 years 8 months 1 day | ' |
Vested or expected to vest at end of period | '2 years 8 months 1 day | ' |
Exercisable at end of period | '1 year 2 months 26 days | ' |
Aggregate Intrinsic Value | ' | ' |
Outstanding at the end of the year (in dollars) | $66,876 | ' |
Vested or expected to vest at end of period (in dollars) | 66,876 | ' |
Exercisable at the end of the period (in dollars) | 33,977 | ' |
Weighted-average grant date fair value of options granted (in dollars per share) | $4.72 | $2.73 |
Total intrinsic value of options exercised (in dollars) | $95,477 | $32,650 |
STOCK_OPTIONS_Details_3
STOCK OPTIONS (Details 3) (Stock Options, USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Options Outstanding | ' |
Number Outstanding (in shares) | 11,417 |
Weighted-Average Remaining Contractual Life | '2 years 8 months 1 day |
Weighted-Average Exercise Price (in dollars per share) | $8.87 |
Options Exercisable | ' |
Number Exercisable (in shares) | 4,166 |
Weighted-Average Exercise Price (in dollars per share) | $6.57 |
$5.00 - $5.99 | ' |
Stock options | ' |
Range of exercise prices, low end (in dollars per share) | $5 |
Range of exercise prices, high end (in dollars per share) | $5.99 |
Options Outstanding | ' |
Number Outstanding (in shares) | 1,500 |
Weighted-Average Remaining Contractual Life | '3 months 22 days |
Weighted-Average Exercise Price (in dollars per share) | $5 |
Options Exercisable | ' |
Number Exercisable (in shares) | 1,500 |
Weighted-Average Exercise Price (in dollars per share) | $5 |
$7.00 - $7.99 | ' |
Stock options | ' |
Range of exercise prices, low end (in dollars per share) | $7 |
Range of exercise prices, high end (in dollars per share) | $7.99 |
Options Outstanding | ' |
Number Outstanding (in shares) | 6,167 |
Weighted-Average Remaining Contractual Life | '2 years 2 months 26 days |
Weighted-Average Exercise Price (in dollars per share) | $7.56 |
Options Exercisable | ' |
Number Exercisable (in shares) | 2,666 |
Weighted-Average Exercise Price (in dollars per share) | $7.45 |
$12.00 - $13.00 | ' |
Stock options | ' |
Range of exercise prices, low end (in dollars per share) | $12 |
Range of exercise prices, high end (in dollars per share) | $13 |
Options Outstanding | ' |
Number Outstanding (in shares) | 3,750 |
Weighted-Average Remaining Contractual Life | '4 years 3 months 22 days |
Weighted-Average Exercise Price (in dollars per share) | $12.56 |
CONCENTRATION_OF_CREDIT_RISK_D
CONCENTRATION OF CREDIT RISK (Details) | 12 Months Ended |
Dec. 31, 2013 | |
item | |
CONCENTRATION OF CREDIT RISK | ' |
Number of financial institutions in which cash balance maintained by entity in partially insured checking account | 2 |
LINE_OF_CREDIT_Details
LINE OF CREDIT (Details) (Bank line of credit, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Bank line of credit | ' | ' |
Line of credit | ' | ' |
Borrowing capacity | $1,250,000 | ' |
Interest rate added to base rate (as a percent) | 2.50% | ' |
Variable rate basis | '30-day LIBOR | ' |
Outstanding borrowings | $0 | $0 |
NONMONETARY_TRANSACTION_Detail
NON-MONETARY TRANSACTION (Details) (USD $) | 12 Months Ended |
Dec. 31, 2012 | |
NON-MONETARY TRANSACTION | ' |
Cash received from exchange of digital texturing printers | $35,000 |
Loss recognized on the exchange of digital texturing printers | $16,000 |