Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Document Information [Line Items] | ||
Entity Registrant Name | IKONICS CORP | |
Entity Central Index Key | 0001083301 | |
Trading Symbol | iknx | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding (in shares) | 1,976,354 | |
Entity Shell Company | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Title of 12(b) Security | Common Stock, par value $.10 per share |
Condensed Balance Sheets (Curre
Condensed Balance Sheets (Current Period Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 758,739 | $ 1,623,137 |
Short-term investments | 2,450,000 | 2,695,000 |
Trade receivables, less allowance of $53,000 in 2019 and 2018 | 2,211,440 | 2,215,215 |
Inventories | 2,573,441 | 2,046,588 |
Prepaid expenses and other assets | 952,854 | 375,362 |
Income taxes receivable | 2,768 | |
Total current assets | 8,946,474 | 8,958,070 |
PROPERTY, PLANT, AND EQUIPMENT, at cost: | ||
Land and building | 9,503,733 | 9,500,429 |
Machinery and equipment | 5,192,854 | 4,964,816 |
Office equipment | 1,604,981 | 1,559,728 |
Vehicles | 245,674 | 245,679 |
Property, plant, and equipment, Gross | 16,547,242 | 16,270,652 |
Less accumulated depreciation | (8,612,986) | (8,185,910) |
Total property, plant and equipment at cost, net | 7,934,256 | 8,084,742 |
INTANGIBLE ASSETS, less accumulated amortization of $175,049 in 2019 and $149,740 in 2018 | 281,504 | 376,406 |
Total assets | 17,162,234 | 17,419,218 |
CURRENT LIABILITIES | ||
Current portion of long-term debt | 132,458 | 129,282 |
Accounts payable | 772,520 | 647,528 |
Accrued compensation | 256,426 | 366,900 |
Other accrued liabilities | 944,489 | 159,821 |
Total current liabilities | 2,105,893 | 1,303,531 |
LONG-TERM LIABILITIES | ||
Long-term debt, less current portion | 2,722,063 | 2,821,657 |
Deferred income taxes | 183,000 | |
Total long-term liabilities | 2,722,063 | 3,004,657 |
Total liabilities | 4,827,956 | 4,308,188 |
COMMITMENTS AND CONTINGENCIES | ||
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 1,976,354 shares in 2019 and 1,983,553 in 2018. | 197,635 | 198,355 |
Additional paid-in-capital | 2,719,471 | 2,723,024 |
Retained earnings | 9,417,172 | 10,189,651 |
Total stockholders' equity | 12,334,278 | 13,111,030 |
Total liabilities and stockholders' equity | $ 17,162,234 | $ 17,419,218 |
Condensed Balance Sheets (Cur_2
Condensed Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Trade receivables, allowances | $ 53,000 | $ 53,000 |
Intangible assets, accumulated amortization | $ 175,049 | $ 149,740 |
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, authorized (in shares) | 250,000 | 250,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 4,750,000 | 4,750,000 |
Common stock, share issued (in shares) | 1,976,354 | 1,983,553 |
Common stock, share outstanding (in shares) | 1,976,354 | 1,983,553 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Net sales | $ 4,530,361 | $ 4,651,358 | $ 12,655,463 | $ 13,357,013 | |
Cost of goods sold | 3,118,299 | 3,124,539 | 8,805,853 | 8,805,460 | |
GROSS PROFIT | 1,412,062 | 1,526,819 | 3,849,610 | 4,551,553 | |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | [1] | 1,347,404 | 1,368,845 | 4,068,230 | 4,026,791 |
RESEARCH AND DEVELOPMENT EXPENSES | [1] | 218,467 | 179,915 | 667,774 | 490,463 |
(LOSS) INCOME FROM OPERATIONS | (153,809) | (21,941) | (886,394) | 34,299 | |
INTEREST EXPENSE | (22,799) | (23,298) | (67,589) | (67,040) | |
OTHER INCOME | 16,225 | 13,760 | 49,722 | 34,986 | |
(LOSS) INCOME BEFORE INCOME TAXES | (160,383) | (31,479) | (904,261) | 2,245 | |
INCOME TAX EXPENSE (BENEFIT) | 2,361 | (6,727) | (170,775) | 12,399 | |
NET LOSS | $ (162,744) | $ (24,752) | $ (733,486) | $ (10,154) | |
LOSS PER COMMON SHARE | |||||
Basic (in dollars per share) | $ (0.08) | $ (0.01) | $ (0.37) | $ (0.01) | |
Diluted (in dollars per share) | $ (0.08) | $ (0.01) | $ (0.37) | $ (0.01) | |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||||
Weighted average common shares outstanding (in shares) | 1,978,926 | 1,983,553 | 1,981,568 | 1,983,553 | |
Diluted (in shares) | 1,978,926 | 1,983,553 | 1,981,568 | 1,983,553 | |
[1] | The Company does not allocate all selling, general and administrative expenses or any research and development expenses to its operating segments for internal reporting. |
Statements of Stockholders' Equ
Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
BALANCE (in shares) at Dec. 31, 2017 | 1,983,553 | |||
BALANCE at Dec. 31, 2017 | $ 198,355 | $ 2,709,390 | $ 10,050,186 | $ 12,957,931 |
Net loss | (10,154) | (10,154) | ||
Stock based compensation | 10,054 | 10,054 | ||
BALANCE (in shares) at Sep. 30, 2018 | 1,983,553 | |||
BALANCE at Sep. 30, 2018 | $ 198,355 | 2,719,444 | 10,040,032 | 12,957,831 |
BALANCE (in shares) at Jun. 30, 2018 | 1,983,553 | |||
BALANCE at Jun. 30, 2018 | $ 198,355 | 2,715,863 | 10,064,784 | 12,979,002 |
Net loss | (24,752) | (24,752) | ||
Stock based compensation | 3,581 | 3,581 | ||
BALANCE (in shares) at Sep. 30, 2018 | 1,983,553 | |||
BALANCE at Sep. 30, 2018 | $ 198,355 | 2,719,444 | 10,040,032 | $ 12,957,831 |
BALANCE (in shares) at Dec. 31, 2018 | 1,983,553 | 1,983,553 | ||
BALANCE at Dec. 31, 2018 | $ 198,355 | 2,723,024 | 10,189,651 | $ 13,111,030 |
Net loss | (733,486) | (733,486) | ||
Common stock repurchased (in shares) | (7,199) | |||
Common stock repurchased | $ (720) | (9,883) | (38,993) | (49,596) |
Stock based compensation | 6,330 | $ 6,330 | ||
BALANCE (in shares) at Sep. 30, 2019 | 1,976,354 | 1,976,354 | ||
BALANCE at Sep. 30, 2019 | $ 197,635 | 2,719,471 | 9,417,172 | $ 12,334,278 |
BALANCE (in shares) at Jun. 30, 2019 | 1,980,811 | |||
BALANCE at Jun. 30, 2019 | $ 198,081 | 2,723,099 | 9,601,979 | 12,523,159 |
Net loss | (162,744) | (162,744) | ||
Common stock repurchased (in shares) | (4,457) | |||
Common stock repurchased | $ (446) | (6,118) | (22,063) | (28,627) |
Stock based compensation | 2,490 | $ 2,490 | ||
BALANCE (in shares) at Sep. 30, 2019 | 1,976,354 | 1,976,354 | ||
BALANCE at Sep. 30, 2019 | $ 197,635 | $ 2,719,471 | $ 9,417,172 | $ 12,334,278 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (733,486) | $ (10,154) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation | 476,906 | 587,836 |
Amortization | 33,662 | 27,463 |
Stock based compensation | 6,330 | 10,054 |
Net gain on sale and disposal of property and equipment | (8,481) | |
Deferred income taxes | (183,000) | 12,839 |
Loss on intangible asset abandonment | 87,122 | |
Changes in working capital components: | ||
Trade receivables | 3,775 | 214,519 |
Inventories | (526,853) | (184,825) |
Prepaid expenses and other assets | (577,492) | (42,328) |
Income tax receivable | 2,768 | (8,092) |
Accounts payable | 124,992 | 389,156 |
Accrued expenses | 674,194 | 74,593 |
Net cash (used in) provided by operating activities | (619,563) | 1,071,061 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (333,535) | (501,295) |
Proceeds from sales of property and equipment | 15,596 | |
Purchases of intangibles assets | (17,528) | (36,289) |
Purchases of short-term investments | (4,165,000) | (4,145,000) |
Proceeds on sale of short-term investments | 4,410,000 | 4,345,000 |
Net cash used in investing activities | (90,467) | (337,584) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment on long-term debt | (104,772) | (103,452) |
Repurchase of common stock | (49,596) | |
Net cash used in financing activities | (154,368) | (103,452) |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (864,398) | 630,025 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1,623,137 | 929,700 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 758,739 | 1,559,725 |
Cash paid for interest | 59,889 | 58,084 |
Cash paid for income taxes, net | $ 9,457 | $ 7,652 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. Basis of Presentation The condensed balance sheet of IKONICS Corporation (the βCompanyβ) as of September 30, 2019, three nine September 30, 2019 2018, three nine September 30, 2019 2018, nine September 30, 2019 2018, 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 September 30, 2019, 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 Companyβs Annual Report on Form 10 December 31, 2018. The results of operations for interim periods are not The Company has evaluated subsequent events occurring after the date of the financial statements for events requiring recording or disclosure in the financial statements. |
Note 2 - Short-term Investments
Note 2 - Short-term Investments | 9 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements | |
Cash, Cash Equivalents, and Short-term Investments [Text Block] | 2. Short-Term Investments The Companyβs $2.5 September 30, 2019 10 four six 1.85% 2.40% |
Note 3 - Inventories
Note 3 - Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | 3. Inventories The major components of inventories as of September 30, 2019 December 31, 2018 Sep 30, 2019 Dec 31, 2018 Raw materials $ 1,747,952 $ 1,767,458 Work-in-progress 424,893 370,075 Finished goods 1,748,707 1,196,516 Reduction to LIFO cost (1,348,111 ) (1,287,461 ) Total Inventories $ 2,573,441 $ 2,046,588 |
Note 4 - Earnings Per Common Sh
Note 4 - Earnings Per Common Share (EPS) | 9 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | 4. Earnings Per Common Share (EPS) 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 5 Shares used in the calculation of diluted EPS are summarized below: Three Months Ended Sep 30, 2019 Sep 30, 2018 Weighted average common shares outstanding 1,978,926 1,983,553 Dilutive effect of stock options β β Weighted average common and common equivalent shares outstanding 1,978,926 1,983,553 Nine Months Ended Sep 30, 2019 Sep 30, 2018 Weighted average common shares outstanding 1,981,568 1,983,553 Dilutive effect of stock options β β Weighted average common and common equivalent shares outstanding 1,981,568 1,983,553 If the Company was in a net income position for the three September 30, 2019, 19,250 $11.32 nine September 30, 2019, 3,250 $7.15, 16,000 $12.17 If the Company was in a net income position for the three nine September 30, 2018, 5,000 $8.76 13,000 $14.94 |
Note 5 - Stock-based Compensati
Note 5 - Stock-based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements | |
Share-based Payment Arrangement [Text Block] | 5. Stock-Based Compensation The Company maintains the 2019 β2019 2019 1995 "1995 April 2019. 1995 442,750 16,000 September 30, 2019. 1995 2019 102,157 1995 no Under the terms of the 2019 may 2019 102,157. 2019 750 1995 2019 2019 2019 102,907. September 30, 2019, 3,250 2019 The Company charged compensation cost of approximately $2,500 three September 30, 2019 $3,600 three September 30, 2018. first nine 2019, $6,300 $10,100 2018. September 30, 2019, $14,600 three 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 nine September 30, 2019 September 30, 2018. There were 3,250 nine September 30, 2019. nine September 30, 2018, 2,750 nine September 30, 2019 2018 2019 2018 Dividend yield 0 0 Expected volatility 37.5 % 40.0 % Expected life of option (years) 5 5 Risk-free interest rate 1.7 % 2.8 % Fair value of each option on grant date $ 2.53 $ 3.38 Stock option activity during the nine September 30, 2019 Weighted Average Exercise Shares Price Outstanding at January 1, 2019 18,000 $ 13.22 Granted 3,250 7.15 Exercised β β Expired and forfeited (2,000 ) 21.69 Outstanding at September 30, 2019 19,250 $ 11.32 Exercisable at September 30, 2019 13,415 $ 12.83 The aggregate intrinsic value of all options outstanding and exercisable at September 30, 2019 $0. |
Note 6 - Segment Information
Note 6 - Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | 6. Segment Information The Companyβs reportable segments are strategic business units that offer different products and have varied customer bases. There are four 2019, one 2019 2019, 2019 2018 10 December 31, 2018. Management evaluates the performance of each segment based on the components of divisional income (loss). Assets and liabilities are not For the three September 30, 2019: IKONICS IKONICS Chromaline Imaging DTX AMS Unalloc. Total Net sales $ 2,869,664 $ 1,117,209 $ 84,661 $ 458,827 $ β $ 4,530,361 Cost of goods sold 2,115,702 628,325 31,217 343,055 β 3,118,299 Gross profit 753,962 488,884 53,444 115,772 β 1,412,062 Selling general and administrative* 452,592 248,780 41,866 89,597 514,569 1,347,404 Research and development* β β β β 218,467 218,467 Income (loss) from operations $ 301,370 $ 240,104 $ 11,578 $ 26,175 $ (733,036 ) $ (153,809 ) For the three September 30, 2018: IKONICS IKONICS Chromaline Imaging DTX AMS Unalloc. Total Net sales $ 3,048,495 $ 975,852 $ 158,862 $ 468,149 $ β $ 4,651,358 Cost of goods sold 2,113,448 560,337 30,279 420,475 β 3,124,539 Gross profit 935,047 415,515 128,583 47,674 β 1,526,819 Selling general and administrative* 469,854 260,025 42,922 91,876 504,168 1,368,845 Research and development* β β β β 179,915 179,915 Income (loss) from operations $ 465,193 $ 155,490 $ 85,661 $ (44,202 ) $ (684,083 ) $ (21,941 ) For the nine September 30, 2019: IKONICS IKONICS Chromaline Imaging DTX AMS Unalloc. Total Net sales $ 8,006,121 $ 3,164,143 $ 290,022 $ 1,195,177 $ β $ 12,655,463 Cost of goods sold 5,949,536 1,714,835 116,810 1,024,672 β 8,805,853 Gross profit 2,056,585 1,449,308 173,212 170,505 β 3,849,610 Selling general and administrative* 1,364,685 819,284 111,232 266,107 1,506,922 4,068,230 Research and development* β β β β 667,774 667,774 Income (loss) from operations $ 691,900 $ 630,024 $ 61,980 $ (95,602 ) $ (2,174,696 ) $ (886,394 ) For the nine September 30, 2018: IKONICS IKONICS Chromaline Imaging DTX AMS Unalloc. Total Net sales $ 8,489,197 $ 3,164,133 $ 341,850 $ 1,361,833 $ β $ 13,357,013 Cost of goods sold 5,816,275 1,693,561 89,283 1,206,341 β 8,805,460 Gross profit 2,672,922 1,470,572 252,567 155,492 β 4,551,553 Selling general and administrative* 1,336,575 789,683 110,370 274,136 1,516,027 4,026,791 Research and development* β β β β 490,463 490,463 Income (loss) from operations $ 1,336,347 $ 680,889 $ 142,197 $ (118,644 ) $ (2,006,490 ) $ 34,299 *The Company does not Trade receivables by segment as of September 30, 2019 December 31, 2018 Sep 30, 2019 Dec 31, 2018 Chromaline $ 1,450,035 $ 1,550,411 IKONICS Imaging 461,897 360,551 DTX 50,100 15,692 AMS 302,080 331,708 Unallocated (52,672 ) (43,147 ) Total $ 2,211,440 $ 2,215,215 |
Note 7 - Income Taxes
Note 7 - Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 7. Income Taxes The Company records its interim provision for income taxes by applying its estimated annual effective tax rate to the year-to-date pre-tax (loss) income and adjusting for discrete tax items recorded in the period. Deferred income taxes result from temporary differences between the reporting of amounts for financial statement purposes and income tax purposes. These differences relate primarily to different methods used for income tax reporting purposes, including for depreciation and amortization, warranty and vacation accruals, and deductions related to allowances for doubtful accounts receivable and inventory reserves. The provision for income taxes included current federal and state income tax expense, as well as deferred federal and state income tax expense. The effective tax rate for the three September 30, 2019 1.5%, 21.4% three September 30, 2018. $34,000. $2,000 $7,000 three September 30, 2019 2018, The effective tax rate for the nine September 30, 2019 18.9%, 552.3% nine September 30, 2018. 2018. $171,000 $12,000 nine September 30, 2019 2018, The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority is more-likely -than- not not 50% September 30, 2019 no Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three September 30, 2019. On the basis of this evaluation, as of September 30, 2019, $34,000 not no The Company is not |
Note 8 - Long-term Debt
Note 8 - Long-term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | 8. Long-Term Debt On April 1, 2016, $3,415,000 2016 The Company is subject to certain customary covenants set forth in the associated covenant agreement, including a requirement that the Company maintain a debt service coverage ratio as of the end of each calendar quarter of not 1.25 1.00 four September 30, 2019 not no $3.2 $2.0 September 30, 2019. In addition to the $3,415,000 $2,050,000, August 30, 2021 1.8 30 not first nine 2019 2018 no September 30, 2019 December 31, 2018. no Both the $3,415,000 |
Note 3 - Inventories (Tables)
Note 3 - Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | Sep 30, 2019 Dec 31, 2018 Raw materials $ 1,747,952 $ 1,767,458 Work-in-progress 424,893 370,075 Finished goods 1,748,707 1,196,516 Reduction to LIFO cost (1,348,111 ) (1,287,461 ) Total Inventories $ 2,573,441 $ 2,046,588 |
Note 4 - Earnings Per Common _2
Note 4 - Earnings Per Common Share (EPS) (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes Tables | |
Schedule of Weighted Average Number of Shares [Table Text Block] | Three Months Ended Sep 30, 2019 Sep 30, 2018 Weighted average common shares outstanding 1,978,926 1,983,553 Dilutive effect of stock options β β Weighted average common and common equivalent shares outstanding 1,978,926 1,983,553 Nine Months Ended Sep 30, 2019 Sep 30, 2018 Weighted average common shares outstanding 1,981,568 1,983,553 Dilutive effect of stock options β β Weighted average common and common equivalent shares outstanding 1,981,568 1,983,553 |
Note 5 - Stock-based Compensa_2
Note 5 - Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes Tables | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | 2019 2018 Dividend yield 0 0 Expected volatility 37.5 % 40.0 % Expected life of option (years) 5 5 Risk-free interest rate 1.7 % 2.8 % Fair value of each option on grant date $ 2.53 $ 3.38 |
Share-based Payment Arrangement, Option, Activity [Table Text Block] | Weighted Average Exercise Shares Price Outstanding at January 1, 2019 18,000 $ 13.22 Granted 3,250 7.15 Exercised β β Expired and forfeited (2,000 ) 21.69 Outstanding at September 30, 2019 19,250 $ 11.32 Exercisable at September 30, 2019 13,415 $ 12.83 |
Note 6 - Segment Information (T
Note 6 - Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes Tables | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | IKONICS IKONICS Chromaline Imaging DTX AMS Unalloc. Total Net sales $ 2,869,664 $ 1,117,209 $ 84,661 $ 458,827 $ β $ 4,530,361 Cost of goods sold 2,115,702 628,325 31,217 343,055 β 3,118,299 Gross profit 753,962 488,884 53,444 115,772 β 1,412,062 Selling general and administrative* 452,592 248,780 41,866 89,597 514,569 1,347,404 Research and development* β β β β 218,467 218,467 Income (loss) from operations $ 301,370 $ 240,104 $ 11,578 $ 26,175 $ (733,036 ) $ (153,809 ) IKONICS IKONICS Chromaline Imaging DTX AMS Unalloc. Total Net sales $ 3,048,495 $ 975,852 $ 158,862 $ 468,149 $ β $ 4,651,358 Cost of goods sold 2,113,448 560,337 30,279 420,475 β 3,124,539 Gross profit 935,047 415,515 128,583 47,674 β 1,526,819 Selling general and administrative* 469,854 260,025 42,922 91,876 504,168 1,368,845 Research and development* β β β β 179,915 179,915 Income (loss) from operations $ 465,193 $ 155,490 $ 85,661 $ (44,202 ) $ (684,083 ) $ (21,941 ) IKONICS IKONICS Chromaline Imaging DTX AMS Unalloc. Total Net sales $ 8,006,121 $ 3,164,143 $ 290,022 $ 1,195,177 $ β $ 12,655,463 Cost of goods sold 5,949,536 1,714,835 116,810 1,024,672 β 8,805,853 Gross profit 2,056,585 1,449,308 173,212 170,505 β 3,849,610 Selling general and administrative* 1,364,685 819,284 111,232 266,107 1,506,922 4,068,230 Research and development* β β β β 667,774 667,774 Income (loss) from operations $ 691,900 $ 630,024 $ 61,980 $ (95,602 ) $ (2,174,696 ) $ (886,394 ) IKONICS IKONICS Chromaline Imaging DTX AMS Unalloc. Total Net sales $ 8,489,197 $ 3,164,133 $ 341,850 $ 1,361,833 $ β $ 13,357,013 Cost of goods sold 5,816,275 1,693,561 89,283 1,206,341 β 8,805,460 Gross profit 2,672,922 1,470,572 252,567 155,492 β 4,551,553 Selling general and administrative* 1,336,575 789,683 110,370 274,136 1,516,027 4,026,791 Research and development* β β β β 490,463 490,463 Income (loss) from operations $ 1,336,347 $ 680,889 $ 142,197 $ (118,644 ) $ (2,006,490 ) $ 34,299 Sep 30, 2019 Dec 31, 2018 Chromaline $ 1,450,035 $ 1,550,411 IKONICS Imaging 461,897 360,551 DTX 50,100 15,692 AMS 302,080 331,708 Unallocated (52,672 ) (43,147 ) Total $ 2,211,440 $ 2,215,215 |
Note 2 - Short-term Investmen_2
Note 2 - Short-term Investments (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Short-term Investments, Total | $ 2,450,000 | $ 2,695,000 |
Certificates of Deposit [Member] | Minimum [Member] | ||
Certificate of Deposit Maturity Period | 120 days | |
Certificate of Deposit Interest Rate | 1.85% | |
Certificates of Deposit [Member] | Maximum [Member] | ||
Certificate of Deposit Maturity Period | 180 days | |
Certificate of Deposit Interest Rate | 2.40% |
Note 3 - Inventories - Major Co
Note 3 - Inventories - Major Components of Inventories (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Raw materials | $ 1,747,952 | $ 1,767,458 |
Work-in-progress | 424,893 | 370,075 |
Finished goods | 1,748,707 | 1,196,516 |
Reduction to LIFO cost | (1,348,111) | (1,287,461) |
Total Inventories | $ 2,573,441 | $ 2,046,588 |
Note 4 - Earnings Per Common _3
Note 4 - Earnings Per Common Share (EPS) (Details Textual) - Share-based Payment Arrangement, Option [Member] - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation Of Earnings Per Share Amount Based on Net Income Position | 19,250 | 5,000 | 16,000 | 13,000 |
Share Based Compensation Arrangement by Share Based Payment Award Options With AntiDilutive Effect Weighted Average Exercise Price Based on Net Income Position | $ 11.32 | $ 8.76 | $ 12.17 | $ 14.94 |
Dilutive Securities Excluded from Computation of Earnings Per Share Amount Based on Net Income Position | 3,250 | |||
Share Based Compensation Arrangement by Share Based Payment Award Options with Dilutive Effect Weighted Average Exercise Price Based on Net Income Position | $ 7.15 |
Note 4 - Earnings Per Common _4
Note 4 - Earnings Per Common Share (EPS) - Summary of Calculation of Diluted EPS (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Weighted average common shares outstanding (in shares) | 1,978,926 | 1,983,553 | 1,981,568 | 1,983,553 |
Dilutive effect of stock options (in shares) | ||||
Weighted average common and common equivalent shares outstanding (in shares) | 1,978,926 | 1,983,553 | 1,981,568 | 1,983,553 |
Note 5 - Stock-based Compensa_3
Note 5 - Stock-based Compensation (Details Textual) - USD ($) | 3 Months Ended | 5 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Apr. 30, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | 19,250 | 19,250 | 19,250 | 18,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 3,250 | 2,750 | |||||
Share-based Payment Arrangement, Expense | $ 2,500 | $ 3,600 | $ 6,300 | $ 10,100 | |||
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | 14,600 | $ 14,600 | $ 14,600 | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 0 | $ 0 | $ 0 | ||||
The 1995 Incentive Stock Option Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | 16,000 | 16,000 | 16,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 102,157 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 750 | ||||||
The 2019 Equity Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 102,907 | 102,907 | 102,907 | 102,157 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 3,250 | ||||||
Maximum [Member] | The 1995 Incentive Stock Option Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 442,750 | 442,750 | 442,750 |
Note 5 - Stock-based Compensa_4
Note 5 - Stock-based Compensation - Assumptions (Details) - Share-based Payment Arrangement, Option [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Dividend yield | 0.00% | 0.00% |
Expected volatility | 37.50% | 40.00% |
Expected life of option (years) (Year) | 5 years | 5 years |
Risk-free interest rate | 1.70% | 2.80% |
Fair value of each option on grant date (in dollars per share) | $ 2.53 | $ 3.38 |
Note 5 - Stock-based Compensa_5
Note 5 - Stock-based Compensation - Stock Option Activity (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Outstanding, Shares (in shares) | 18,000 | |
Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 13.22 | |
Granted, Shares (in shares) | 3,250 | 2,750 |
Granted, Weighted Average Exercise Price (in dollars per share) | $ 7.15 | |
Exercised, Shares (in shares) | 0 | 0 |
Exercised, Weighted Average Exercise Price (in dollars per share) | ||
Expired and forfeited, Shares (in shares) | (2,000) | |
Expired and forfeited, Weighted Average Exercise Price (in dollars per share) | $ 21.69 | |
Outstanding, Shares (in shares) | 19,250 | |
Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 11.32 | |
Exercisable, Shares (in shares) | 13,415 | |
Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 12.83 |
Note 6 - Segment Information (D
Note 6 - Segment Information (Details Textual) | 9 Months Ended |
Sep. 30, 2019 | |
Number of Reportable Segments | 4 |
Note 6 - Segment Information -
Note 6 - Segment Information - Reportable Segments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | ||
Net sales | $ 4,530,361 | $ 4,651,358 | $ 12,655,463 | $ 13,357,013 | ||
Cost of goods sold | 3,118,299 | 3,124,539 | 8,805,853 | 8,805,460 | ||
Gross profit | 1,412,062 | 1,526,819 | 3,849,610 | 4,551,553 | ||
Selling general and administrative* | [1] | 1,347,404 | 1,368,845 | 4,068,230 | 4,026,791 | |
Research and development* | [1] | 218,467 | 179,915 | 667,774 | 490,463 | |
Income (loss) from operations | (153,809) | (21,941) | (886,394) | 34,299 | ||
Trade receivables | 2,211,440 | 2,211,440 | $ 2,215,215 | |||
Segment Reconciling Items [Member] | ||||||
Net sales | ||||||
Cost of goods sold | ||||||
Gross profit | ||||||
Selling general and administrative* | [1] | 514,569 | 504,168 | 1,506,922 | 1,516,027 | |
Research and development* | [1] | 218,467 | 179,915 | 667,774 | 490,463 | |
Income (loss) from operations | (733,036) | (684,083) | (2,174,696) | (2,006,490) | ||
Trade receivables | (52,672) | (52,672) | (43,147) | |||
Chromaline [Member] | Operating Segments [Member] | ||||||
Net sales | 2,869,664 | 3,048,495 | 8,006,121 | 8,489,197 | ||
Cost of goods sold | 2,115,702 | 2,113,448 | 5,949,536 | 5,816,275 | ||
Gross profit | 753,962 | 935,047 | 2,056,585 | 2,672,922 | ||
Selling general and administrative* | [1] | 452,592 | 469,854 | 1,364,685 | 1,336,575 | |
Research and development* | [1] | |||||
Income (loss) from operations | 301,370 | 465,193 | 691,900 | 1,336,347 | ||
Trade receivables | 1,450,035 | 1,450,035 | 1,550,411 | |||
Ikonics Imaging [Member] | Operating Segments [Member] | ||||||
Net sales | 1,117,209 | 975,852 | 3,164,143 | 3,164,133 | ||
Cost of goods sold | 628,325 | 560,337 | 1,714,835 | 1,693,561 | ||
Gross profit | 488,884 | 415,515 | 1,449,308 | 1,470,572 | ||
Selling general and administrative* | [1] | 248,780 | 260,025 | 819,284 | 789,683 | |
Research and development* | [1] | |||||
Income (loss) from operations | 240,104 | 155,490 | 630,024 | 680,889 | ||
Trade receivables | 461,897 | 461,897 | 360,551 | |||
DTX [Member] | Operating Segments [Member] | ||||||
Net sales | 84,661 | 158,862 | 290,022 | 341,850 | ||
Cost of goods sold | 31,217 | 30,279 | 116,810 | 89,283 | ||
Gross profit | 53,444 | 128,583 | 173,212 | 252,567 | ||
Selling general and administrative* | [1] | 41,866 | 42,922 | 111,232 | 110,370 | |
Research and development* | [1] | |||||
Income (loss) from operations | 11,578 | 85,661 | 61,980 | 142,197 | ||
Trade receivables | 50,100 | 50,100 | 15,692 | |||
AMS [Member] | Operating Segments [Member] | ||||||
Net sales | 458,827 | 468,149 | 1,195,177 | 1,361,833 | ||
Cost of goods sold | 343,055 | 420,475 | 1,024,672 | 1,206,341 | ||
Gross profit | 115,772 | 47,674 | 170,505 | 155,492 | ||
Selling general and administrative* | [1] | 89,597 | 91,876 | 266,107 | 274,136 | |
Research and development* | [1] | |||||
Income (loss) from operations | 26,175 | $ (44,202) | (95,602) | $ (118,644) | ||
Trade receivables | $ 302,080 | $ 302,080 | $ 331,708 | |||
[1] | The Company does not allocate all selling, general and administrative expenses or any research and development expenses to its operating segments for internal reporting. |
Note 7 - Income Taxes (Details
Note 7 - Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Effective Income Tax Rate Reconciliation, Percent, Total | 1.50% | (21.40%) | 18.90% | 552.30% |
Tax Cuts and Jobs Act, Change in Tax Rate, Deferred Tax Asset, Income Tax Expense | $ 34,000 | |||
Income Tax Expense (Benefit), Total | $ 2,361 | $ (6,727) | (170,775) | $ 12,399 |
Unrecognized Tax Benefits, Ending Balance | 0 | 0 | ||
Deferred Tax Assets, Valuation Allowance, Total | $ 34,000 | $ 34,000 |
Note 8 - Long-term Debt (Detail
Note 8 - Long-term Debt (Details Textual) | Apr. 29, 2016 | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2019USD ($) | Apr. 01, 2016USD ($) |
Line of Credit [Member] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,050,000 | ||||
Long-term Line of Credit, Total | $ 0 | $ 0 | |||
Line of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||
Debt Instrument, Basis Spread on Variable Rate | 1.80% | ||||
Loan [Member] | |||||
Debt Service Coverage Ratio | 1.25 | ||||
Amortization of Debt Issuance Costs | $ 3.20 | $ 12,000 | |||
Duluth Economic Development Authority [Member] | |||||
Tax Exempt Industrial Revenue Bonds Amount Sold to Bank | $ 3,415,000 |