Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 04, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | IKONICS CORP | |
Entity Central Index Key | 1,083,301 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,017,053 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,240,086 | $ 1,048,713 |
Short-term investments | 2,895,000 | 3,246,000 |
Trade receivables, less allowance of $52,000 in 2017 and $54,000 in 2016 | 2,066,736 | 2,336,501 |
Inventories | 2,276,601 | 1,986,172 |
Prepaid expenses and other assets | 146,772 | 361,905 |
Income taxes receivable | 273,973 | 66,181 |
Total current assets | 8,899,168 | 9,045,472 |
PROPERTY, PLANT, AND EQUIPMENT, at cost: | ||
Land and building | 9,201,846 | 9,189,743 |
Machinery and equipment | 4,950,091 | 4,884,814 |
Office equipment | 1,600,760 | 1,566,856 |
Vehicles | 269,941 | 272,144 |
Gross property, plant, and equipment, at cost | 16,022,638 | 15,913,557 |
Less accumulated depreciation | (7,397,569) | (7,001,162) |
Net property, plant, and equipment, at cost | 8,625,069 | 8,912,395 |
INTANGIBLE ASSETS, less accumulated amortization of $162,032 in 2017 and $149,072 in 2016 | 340,211 | 338,127 |
Total assets | 17,864,448 | 18,295,994 |
CURRENT LIABILITIES: | ||
Current portion of long-term debt, net | 129,086 | 127,303 |
Accounts payable | 874,795 | 730,386 |
Accrued compensation | 337,394 | 388,600 |
Other accrued liabilities | 91,398 | 67,088 |
Total current liabilities | 1,432,673 | 1,313,377 |
LONG-TERM LIABILITIES | ||
Long-term debt, less current portion, net | 3,012,299 | 3,077,457 |
Deferred income taxes | 446,000 | 446,000 |
Total long-term liabilities | 3,458,299 | 3,523,457 |
Total liabilities | 4,890,972 | 4,836,834 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, par value $.10 per share; authorized 250,000 shares: none issued | ||
Common stock, par value $.10 per share; authorized 4,750,000 shares; issued and outstanding 2,017,053 shares in 2017 and 2,018,753 shares in 2016 | 201,705 | 201,875 |
Additional paid-in capital | 2,742,659 | 2,732,006 |
Retained earnings | 10,029,112 | 10,525,279 |
Total stockholders' equity | 12,973,476 | 13,459,160 |
Total liabilities and stockholders' equity | $ 17,864,448 | $ 18,295,994 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
CONDENSED BALANCE SHEETS | ||
Trade receivables, allowance | $ 52,000 | $ 54,000 |
INTANGIBLE ASSETS, accumulated amortization | $ 162,032 | $ 149,072 |
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 | 2,017,053 | 2,018,753 |
Common stock, shares outstanding | 2,017,053 | 2,018,753 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
CONDENSED STATEMENTS OF OPERATIONS | ||||
NET SALES | $ 4,685,361 | $ 4,196,578 | $ 8,314,353 | $ 8,209,788 |
COST OF GOODS SOLD | 3,242,097 | 2,674,367 | 5,780,861 | 5,390,903 |
GROSS PROFIT | 1,443,264 | 1,522,211 | 2,533,492 | 2,818,885 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 1,393,636 | 1,325,170 | 2,904,250 | 2,764,286 |
RESEARCH AND DEVELOPMENT EXPENSES | 184,704 | 147,125 | 350,474 | 324,989 |
INCOME (LOSS) FROM OPERATIONS | (135,076) | 49,916 | (721,232) | (270,390) |
INTEREST EXPENSE | (20,826) | (14,999) | (41,643) | (14,999) |
OTHER | 5,902 | 2,048 | 11,055 | 2,162 |
INCOME (LOSS) BEFORE INCOME TAXES | (150,000) | 36,965 | (751,820) | (283,227) |
INCOME TAX BENEFIT | (44,934) | (2,260) | (267,857) | (129,640) |
NET INCOME (LOSS) | $ (105,066) | $ 39,225 | $ (483,963) | $ (153,587) |
INCOME (LOSS) PER COMMON SHARE: | ||||
Basic (in dollars per share) | $ (0.05) | $ 0.02 | $ (0.24) | $ (0.08) |
Diluted (in dollars per share) | $ (0.05) | $ 0.02 | $ (0.24) | $ (0.08) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic (in shares) | 2,018,466 | 2,018,753 | 2,018,609 | 2,018,544 |
Diluted (in shares) | 2,018,466 | 2,018,833 | 2,018,609 | 2,018,544 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (483,963) | $ (153,587) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation | 421,412 | 352,000 |
Amortization | 19,149 | 14,385 |
Stock based compensation | 11,494 | 11,763 |
Net gain on sale and disposal of property, plant and equipment | (21,707) | (5,750) |
Changes in working capital components: | ||
Trade receivables | 269,765 | 353,963 |
Inventories | (290,429) | (95,743) |
Prepaid expenses and other assets | 215,133 | (55,625) |
Income tax receivable | (207,854) | (28,882) |
Accounts payable | 144,409 | 90,470 |
Accrued expenses | (26,896) | 45,214 |
Net cash provided by operating activities | 50,513 | 528,208 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant, equipment and construction in progress | (134,086) | (1,843,879) |
Proceeds from sale of property, plant and equipment | 21,707 | 21,000 |
Purchases of intangibles | (15,044) | (22,395) |
Purchases of short-term investments | (1,915,000) | (3,399,000) |
Proceeds on sale of short-term investments | 2,266,000 | |
Net cash provided by (used in) investing activities | 223,577 | (5,244,274) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from long-term debt | 3,415,000 | |
Payment of debt issuance costs | (139,418) | |
Payments on long-term debt | (69,564) | (10,858) |
Repurchase of common stock | (15,038) | |
Proceeds from exercise of stock options | 1,885 | 3,765 |
Net cash provided by (used in) financing activities | (82,717) | 3,268,489 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 191,373 | (1,447,577) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1,048,713 | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 1,240,086 | 800,889 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Construction in progress included in accounts payable | 60,166 | |
Cash paid for interest | 35,776 | 6,699 |
Cash received for income taxes, net | $ (60,003) | $ (100,758) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Basis of Presentation | |
Basis of Presentation | 1. The condensed balance sheet of IKONICS Corporation (the “Company”) as of June 30, 2017, and the related condensed statements of operations for the three and six months ended June 30, 2017 and 2016, and cash flows for the six months ended June 30, 2017 and 2016, have been prepared without being audited. In the opinion of management, these statements reflect all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of IKONICS Corporation as of June 30, 2017, and the results of operations and cash flows for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted. Therefore, these statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The results of operations for interim periods are not necessarily indicative of results that will be realized for the full fiscal year. |
Short-Term Investments
Short-Term Investments | 6 Months Ended |
Jun. 30, 2017 | |
Short-Term Investments | |
Short-Term Investments | 2. The Company’s $2.9 million of short-term investments at June 30, 2017 is comprised of twelve fully insured certificates of deposit with original maturities ranging from six to twelve months and interest rates ranging from 0.65% to 1.25%. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2017 | |
Inventories | |
Inventories | 3. The major components of inventories are as follows: Jun 30, 2017 Dec 31, 2016 Raw materials $ 1,634,801 $ 1,438,471 Work-in-progress 381,212 355,208 Finished goods 1,396,987 1,319,856 Reduction to LIFO cost (1,136,399) (1,127,363) Total Inventories $ $ 1,986,172 |
Earnings Per Common Share (EPS)
Earnings Per Common Share (EPS) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Common Share (EPS) | |
Earnings Per Common Share (EPS) | 4. Basic EPS is calculated using net income (loss) 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 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: Three Months Ended Jun 30, 2017 Jun 30, 2016 Weighted average common shares outstanding 2,018,466 2,018,753 Dilutive effect of stock options — 80 Weighted average common and common equivalent shares outstanding 2,018,466 2,018,833 Six Months Ended Jun 30, 2017 Jun 30, 2016 Weighted average common shares outstanding 2,018,609 2,018,544 Dilutive effect of stock options — — Weighted average common and common equivalent shares outstanding 2,018,609 2,018,544 Options to purchase 11,418 shares of common stock with a weighted average price of $15.99 were outstanding during the three months ended June 30, 2016, but were excluded from the computation of common share equivalents because they were anti-dilutive. If the Company was in a net income position for the three months ended June 30, 2017, all 18,168 options outstanding with a weighted average exercise price of $13.81 would have remained excluded from the computation of common share equivalents as the options were anti-dilutive. If the Company was in a net income position for the first six months of 2017, 2,250 options outstanding with a weighted average exercise price of $8.91 would have been included as part of the weighted average common and common equivalent shares outstanding as the options would have been dilutive while 15,918 options outstanding with a weighted average exercise price of $14.51 would have remained excluded as the options were anti-dilutive . If the Company was in a net income position for the first six months of 2016, 4,750 options outstanding with a weighted average exercise price of $10.59 would have been included as part of the weighted average common and common equivalent shares outstanding as the options would have been dilutive while 11,418 options outstanding with a weighted average exercise price of $15.99 would have remained excluded as the options were anti-dilutive . |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2017 | |
Stock-Based Compensation | |
Stock-Based Compensation | 5. The Company maintains a stock incentive plan which authorizes the issuance of up to 442,750 shares of common stock. Of those shares, 18,168 were subject to outstanding options and 101,989 were reserved for future grants at June 30, 2017. 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 the date of grant. Options granted expire up to seven years after the date of grant. Such options generally become exercisable over a one- to three-year period. The Company charged compensation cost of approximately $6,000 against income for the three months ended June 30, 2017 and approximately $6,500 for the three months ended June 30, 2016. For the first six months of 2017, the Company charged compensation cost of approximately $11,500 and approximately $11,800 for the same period in 2016. As of June 30, 2017, there was approximately $29,100 of unrecognized compensation cost related to unvested share-based compensation awards. That cost is expected to be recognized over the next three years. The Company receives a tax deduction for certain stock option exercises during the period in which the options are exercised, generally for the excess of the market price at the time the stock options are exercised over the exercise price of the options. Proceeds from the exercise of 250 stock options were approximately $2,000 for the six months ended June 30, 2017 while proceeds from the exercise of 500 stock options were approximately $4,000 for the six months ended June 30, 2016. The fair value of options granted during the six months ended June 30, 2017 and 2016 was estimated using the Black-Scholes option pricing model with the following assumptions: 2017 2016 Dividend yield 0% 0% Expected volatility 41.3% 42.4% Expected life of option Five Years Five Years Risk-free interest rate 1.8% 1.3% Fair value of each option on grant date $ 3.43 $ 4.02 There were 2,250 and 4,500 options granted during each of the six months ended June 30, 2017 and 2016, respectively. Stock option activity during the six months ended June 30, 2017 was as follows: Weighted Average Exercise Shares Price Outstanding at January 1, 2017 16,168 $ 14.40 Granted 2,250 8.91 Exercised (250) 7.54 Outstanding at June 30, 2017 18,168 $ 13.81 Exercisable at June 30, 2017 10,499 $ 15.41 The aggregate intrinsic value of all options outstanding and for those exercisable at June 30, 2017 was approximately $1,000 and $0, respectively. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Information | |
Segment Information | 6. The Company’s reportable segments are strategic business units that offer different products and have varied customer bases. There are five reportable segments: Domestic, Export, IKONICS Imaging, Digital Texturing (DTX) and Advanced Material Solutions (AMS). Domestic sells screen printing film, emulsions, and inkjet receptive film to distributors located in the United States and Canada. IKONICS Imaging sells photo resistant film, art supplies, glass, metal medium and related abrasive etching equipment to end user customers located in the United States and Canada. AMS provides sound deadening and weight reduction technology to the aerospace industry along with products and services for etched composites, ceramics, glass and silicon wafers. DTX includes products and customers related to patented and proprietary inkjet technology used for mold texturing and prototyping. Export sells primarily the same products as Domestic and the IKONICS Imaging products not related to AMS or DTX. The accounting policies applied to determine the segment information are the same as those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Management evaluates the performance of each segment based on the components of divisional income. Assets and liabilities are not allocated to segments, except for trade receivables which are allocated based on the previous segmentation. Financial information with respect to the reportable segments follows: For the three months ended June 30, 2017: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 1,816,956 $ 1,372,092 $ 943,055 $ 471,244 $ 82,014 $ — $ 4,685,361 Cost of goods sold 1,034,059 1,096,279 453,213 358,937 299,609 — 3,242,097 Gross profit (loss) 782,897 275,813 489,842 112,307 (217,595) — 1,443,264 Selling, general and administrative* 334,071 189,741 253,746 50,861 104,325 460,892 1,393,636 Research and development* — — — — — 184,704 184,704 Income (loss) from operations $ 448,826 $ 86,072 $ 236,096 $ 61,446 $ (321,920) $ (645,596) $ (135,076) For the three months ended June 30, 2016: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 1,943,516 $ 953,585 $ 999,596 $ 33,476 $ 266,405 $ — $ 4,196,578 Cost of goods sold 1,105,206 735,169 425,120 35,062 373,810 — 2,674,367 Gross profit (loss) 838,310 218,416 574,476 (1,586) (107,405) — 1,522,211 Selling, general and administrative* 345,000 159,621 247,682 39,630 123,286 409,951 1,325,170 Research and development* — — — — — 147,125 147,125 Income (loss) from operations $ 493,310 $ 58,795 $ 326,794 $ (41,216) $ (230,691) $ (557,076) $ 49,916 For the six months ended June 30, 2017: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 3,120,525 $ 2,427,097 $ 1,933,041 $ 586,475 $ 247,215 $ — $ 8,314,353 Cost of goods sold 1,860,800 1,935,643 976,793 394,419 613,206 — 5,780,861 Gross profit (loss) 1,259,725 491,454 956,248 192,056 (365,991) — 2,533,492 Selling, general and administrative* 685,493 385,858 537,605 85,496 201,120 1,008,678 2,904,250 Research and development* — — — — — 350,474 350,474 Income (loss) from operations $ 574,232 $ 105,596 $ 418,643 $ 106,560 $ (567,111) $ (1,359,152) $ (721,232) For the six months ended June 30, 2016: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 3,297,244 $ 2,196,770 $ 2,117,294 $ 110,356 $ 488,124 $ — $ 8,209,788 Cost of goods sold 1,951,605 1,697,658 964,902 70,486 706,252 — 5,390,903 Gross profit (loss) 1,345,639 499,112 1,152,392 39,870 (218,128) — 2,818,885 Selling, general and administrative* 704,397 302,652 499,053 74,373 227,189 956,622 2,764,286 Research and development* — — — — — 324,989 324,989 Income (loss) from operations $ 641,242 $ 196,460 $ 653,339 $ (34,503) $ (445,317) $ (1,281,611) $ (270,390) * Trade receivables by segment as of June 30, 2017 and December 31, 2016 were as follows: Jun 30, 2017 Dec 31, 2016 Domestic $ $ 1,206,866 Export 551,803 IKONICS Imaging 363,602 DTX 52,935 AMS 177,374 Unallocated (16,079) Total $ $ 2,336,501 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Taxes | |
Income Taxes | 7. The Company reports a liability for unrecognized tax benefits taken or expected to be taken when they are uncertain. As of June 30, 2017 and June 30, 2016, there was no liability for unrecognized tax benefits. The Company is subject to taxation in the United States and various states. The material jurisdictions that are subject to examination by tax authorities primarily include Minnesota and the United States, in each case for tax years 2014, 2015, and 2016. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Event | |
Subsequent Event | 8. On August 3, 2017, the Company’s board of directors approved a new repurchase authorization for 100,000 shares of the Company’s common stock, which replaces all prior authorizations. The new share repurchase authorization does not have an expiration date. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventories | |
Schedule of major components of inventories | Jun 30, 2017 Dec 31, 2016 Raw materials $ 1,634,801 $ 1,438,471 Work-in-progress 381,212 355,208 Finished goods 1,396,987 1,319,856 Reduction to LIFO cost (1,136,399) (1,127,363) Total Inventories $ $ 1,986,172 |
Earnings Per Common Share (EP15
Earnings Per Common Share (EPS) (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Common Share (EPS) | |
Summary of shares used in the calculation of diluted EPS | Three Months Ended Jun 30, 2017 Jun 30, 2016 Weighted average common shares outstanding 2,018,466 2,018,753 Dilutive effect of stock options — 80 Weighted average common and common equivalent shares outstanding 2,018,466 2,018,833 Six Months Ended Jun 30, 2017 Jun 30, 2016 Weighted average common shares outstanding 2,018,609 2,018,544 Dilutive effect of stock options — — Weighted average common and common equivalent shares outstanding 2,018,609 2,018,544 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Stock-Based Compensation | |
Assumptions used in estimating fair value of stock options | 2017 2016 Dividend yield 0% 0% Expected volatility 41.3% 42.4% Expected life of option Five Years Five Years Risk-free interest rate 1.8% 1.3% Fair value of each option on grant date $ 3.43 $ 4.02 |
Stock option activity | Weighted Average Exercise Shares Price Outstanding at January 1, 2017 16,168 $ 14.40 Granted 2,250 8.91 Exercised (250) 7.54 Outstanding at June 30, 2017 18,168 $ 13.81 Exercisable at June 30, 2017 10,499 $ 15.41 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Information | |
Schedule of financial information with respect to the reportable segments | IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 1,816,956 $ 1,372,092 $ 943,055 $ 471,244 $ 82,014 $ — $ 4,685,361 Cost of goods sold 1,034,059 1,096,279 453,213 358,937 299,609 — 3,242,097 Gross profit (loss) 782,897 275,813 489,842 112,307 (217,595) — 1,443,264 Selling, general and administrative* 334,071 189,741 253,746 50,861 104,325 460,892 1,393,636 Research and development* — — — — — 184,704 184,704 Income (loss) from operations $ 448,826 $ 86,072 $ 236,096 $ 61,446 $ (321,920) $ (645,596) $ (135,076) For the three months ended June 30, 2016: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 1,943,516 $ 953,585 $ 999,596 $ 33,476 $ 266,405 $ — $ 4,196,578 Cost of goods sold 1,105,206 735,169 425,120 35,062 373,810 — 2,674,367 Gross profit (loss) 838,310 218,416 574,476 (1,586) (107,405) — 1,522,211 Selling, general and administrative* 345,000 159,621 247,682 39,630 123,286 409,951 1,325,170 Research and development* — — — — — 147,125 147,125 Income (loss) from operations $ 493,310 $ 58,795 $ 326,794 $ (41,216) $ (230,691) $ (557,076) $ 49,916 For the six months ended June 30, 2017: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 3,120,525 $ 2,427,097 $ 1,933,041 $ 586,475 $ 247,215 $ — $ 8,314,353 Cost of goods sold 1,860,800 1,935,643 976,793 394,419 613,206 — 5,780,861 Gross profit (loss) 1,259,725 491,454 956,248 192,056 (365,991) — 2,533,492 Selling, general and administrative* 685,493 385,858 537,605 85,496 201,120 1,008,678 2,904,250 Research and development* — — — — — 350,474 350,474 Income (loss) from operations $ 574,232 $ 105,596 $ 418,643 $ 106,560 $ (567,111) $ (1,359,152) $ (721,232) For the six months ended June 30, 2016: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ 3,297,244 $ 2,196,770 $ 2,117,294 $ 110,356 $ 488,124 $ — $ 8,209,788 Cost of goods sold 1,951,605 1,697,658 964,902 70,486 706,252 — 5,390,903 Gross profit (loss) 1,345,639 499,112 1,152,392 39,870 (218,128) — 2,818,885 Selling, general and administrative* 704,397 302,652 499,053 74,373 227,189 956,622 2,764,286 Research and development* — — — — — 324,989 324,989 Income (loss) from operations $ 641,242 $ 196,460 $ 653,339 $ (34,503) $ (445,317) $ (1,281,611) $ (270,390) * |
Schedule of trade receivables by segment | Jun 30, 2017 Dec 31, 2016 Domestic $ $ 1,206,866 Export 551,803 IKONICS Imaging 363,602 DTX 52,935 AMS 177,374 Unallocated (16,079) Total $ $ 2,336,501 |
Short-Term Investments (Details
Short-Term Investments (Details) | 6 Months Ended | |
Jun. 30, 2017USD ($)item | Dec. 31, 2016USD ($) | |
Short-term investments | ||
Short-term Investments. | $ 2,895,000 | $ 3,246,000 |
Certificates of Deposit | ||
Short-term investments | ||
Number of fully insured certificates of deposit | item | 12 | |
Fully insured certificates of deposit | $ 2,900,000 | |
Certificates of Deposit | Minimum | ||
Short-term investments | ||
Maturity period | 6 months | |
Interest rate (as a percent) | 0.65% | |
Certificates of Deposit | Maximum | ||
Short-term investments | ||
Maturity period | 12 months | |
Interest rate (as a percent) | 1.25% |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Inventories | ||
Raw materials | $ 1,634,801 | $ 1,438,471 |
Work-in-progress | 381,212 | 355,208 |
Finished goods | 1,396,987 | 1,319,856 |
Reduction to LIFO cost | (1,136,399) | (1,127,363) |
Total inventories | $ 2,276,601 | $ 1,986,172 |
Earnings Per Common Share (EP20
Earnings Per Common Share (EPS) (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Shares used in calculation of diluted EPS | ||||
Weighted average common shares outstanding | 2,018,466 | 2,018,753 | 2,018,609 | 2,018,544 |
Dilutive effect of stock options | 80 | |||
Weighted average common and common equivalent shares outstanding | 2,018,466 | 2,018,833 | 2,018,609 | 2,018,544 |
Dilutive effect | ||||
Based on the Company's net income position, dilutive effect of stock options (in shares) | 18,168 | 2,250 | 4,750 | |
Based on the Company's net income position, dilutive effect of stock options, weighted average exercise price (in dollars per share) | $ 13.81 | $ 8.91 | $ 10.59 | |
Stock Options. | ||||
Dilutive effect | ||||
Anti-dilutive securities (in shares) | 11,418 | |||
Weighted average exercise price of options, anti-dilutive (in dollars per share) | $ 15.99 | |||
Based on the Company's net income position, anti-dilutive securities (in shares) | 15,918 | 11,418 | ||
Based on the Company's net income position, anti-dilutive securities, weighted average exercise price (in dollars per share) | $ 14.51 | $ 15.99 |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plan and Expense Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Stock-Based Compensation | |||||
Common stock reserved for future grants (in shares) | 101,989 | 101,989 | |||
Compensation cost recognized | $ 6,000 | $ 6,500 | $ 11,500 | $ 11,800 | |
Unrecognized compensation cost | $ 29,100 | $ 29,100 | |||
Period during which compensation cost is expected to be recognized | 3 years | ||||
Proceeds from exercise of stock options | $ 1,885 | $ 3,765 | |||
Maximum | |||||
Stock-Based Compensation | |||||
Number of shares of common stock authorized for issuance | 442,750 | 442,750 | |||
Stock Options. | |||||
Stock-Based Compensation | |||||
Outstanding options (in shares) | 18,168 | 18,168 | 16,168 | ||
Exercise of stock options and related tax benefit (in shares) | 250 | 500 | |||
Proceeds from exercise of stock options | $ 2,000 | $ 4,000 | |||
Granted (in shares) | 2,250 | 4,500 | |||
Stock Options. | Minimum | |||||
Stock-Based Compensation | |||||
Price range of stock award (as a percent) | 85.00% | ||||
Period over which options become exercisable | 1 year | ||||
Stock Options. | Maximum | |||||
Stock-Based Compensation | |||||
Price range of stock award (as a percent) | 110.00% | ||||
Expiration period of options granted | 7 years | ||||
Period over which options become exercisable | 3 years |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions and Activity (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Weighted Average Exercise Price | ||
Aggregate intrinsic value of all options outstanding | $ 1,000 | |
Aggregate intrinsic value of all options exercisable | $ 0 | |
Stock Options. | ||
Assumptions used to determine fair value of stock options granted | ||
Dividend yield (as a percent) | 0.00% | 0.00% |
Expected volatility (as a percent) | 41.30% | 42.40% |
Expected life of option | 5 years | 5 years |
Risk-free interest rate (as a percent) | 1.80% | 1.30% |
Fair value of each option on grant date (in dollars per share) | $ 3.43 | $ 4.02 |
Shares | ||
Outstanding at beginning of period (in shares) | 16,168 | |
Granted (in shares) | 2,250 | 4,500 |
Exercised (in shares) | (250) | (500) |
Outstanding at end of period (in shares) | 18,168 | |
Exercisable at end of period (in shares) | 10,499 | |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in dollars per shares) | $ 14.40 | |
Granted (in dollars per share) | 8.91 | |
Exercised (in dollars per share) | 7.54 | |
Outstanding at end of period (in dollars per share) | 13.81 | |
Exercisable at end of period (in dollars per share) | $ 15.41 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($)segment | Dec. 31, 2016USD ($) | |
Segment Reporting Information | |||||
Number of reportable segments | segment | 5 | ||||
Financial information with respect to the reportable segments | |||||
Net sales | $ 4,685,361 | $ 4,196,578 | $ 8,314,353 | $ 8,209,788 | |
Cost of goods sold | 3,242,097 | 2,674,367 | 5,780,861 | 5,390,903 | |
GROSS PROFIT | 1,443,264 | 1,522,211 | 2,533,492 | 2,818,885 | |
Selling general and administrative | 1,393,636 | 1,325,170 | 2,904,250 | 2,764,286 | |
Research and development | 184,704 | 147,125 | 350,474 | 324,989 | |
Income (loss) from operations | (135,076) | 49,916 | (721,232) | (270,390) | |
Trade receivables by segment | |||||
Trade receivables | 2,066,736 | 2,066,736 | $ 2,336,501 | ||
Unalloc. | |||||
Financial information with respect to the reportable segments | |||||
Selling general and administrative | 460,892 | 409,951 | 1,008,678 | 956,622 | |
Research and development | 184,704 | 147,125 | 350,474 | 324,989 | |
Income (loss) from operations | (645,596) | (557,076) | (1,359,152) | (1,281,611) | |
Trade receivables by segment | |||||
Trade receivables | (16,771) | (16,771) | (16,079) | ||
Domestic | |||||
Financial information with respect to the reportable segments | |||||
Net sales | 1,816,956 | 1,943,516 | 3,120,525 | 3,297,244 | |
Cost of goods sold | 1,034,059 | 1,105,206 | 1,860,800 | 1,951,605 | |
GROSS PROFIT | 782,897 | 838,310 | 1,259,725 | 1,345,639 | |
Selling general and administrative | 334,071 | 345,000 | 685,493 | 704,397 | |
Income (loss) from operations | 448,826 | 493,310 | 574,232 | 641,242 | |
Trade receivables by segment | |||||
Trade receivables | 863,407 | 863,407 | 1,206,866 | ||
Export | |||||
Financial information with respect to the reportable segments | |||||
Net sales | 1,372,092 | 953,585 | 2,427,097 | 2,196,770 | |
Cost of goods sold | 1,096,279 | 735,169 | 1,935,643 | 1,697,658 | |
GROSS PROFIT | 275,813 | 218,416 | 491,454 | 499,112 | |
Selling general and administrative | 189,741 | 159,621 | 385,858 | 302,652 | |
Income (loss) from operations | 86,072 | 58,795 | 105,596 | 196,460 | |
Trade receivables by segment | |||||
Trade receivables | 773,376 | 773,376 | 551,803 | ||
IKONICS Imaging | |||||
Financial information with respect to the reportable segments | |||||
Net sales | 943,055 | 999,596 | 1,933,041 | 2,117,294 | |
Cost of goods sold | 453,213 | 425,120 | 976,793 | 964,902 | |
GROSS PROFIT | 489,842 | 574,476 | 956,248 | 1,152,392 | |
Selling general and administrative | 253,746 | 247,682 | 537,605 | 499,053 | |
Income (loss) from operations | 236,096 | 326,794 | 418,643 | 653,339 | |
Trade receivables by segment | |||||
Trade receivables | 268,345 | 268,345 | 363,602 | ||
DTX | |||||
Financial information with respect to the reportable segments | |||||
Net sales | 471,244 | 33,476 | 586,475 | 110,356 | |
Cost of goods sold | 358,937 | 35,062 | 394,419 | 70,486 | |
GROSS PROFIT | 112,307 | (1,586) | 192,056 | 39,870 | |
Selling general and administrative | 50,861 | 39,630 | 85,496 | 74,373 | |
Income (loss) from operations | 61,446 | (41,216) | 106,560 | (34,503) | |
Trade receivables by segment | |||||
Trade receivables | 142,013 | 142,013 | 52,935 | ||
Micro-Machining | |||||
Financial information with respect to the reportable segments | |||||
Net sales | 82,014 | 266,405 | 247,215 | 488,124 | |
Cost of goods sold | 299,609 | 373,810 | 613,206 | 706,252 | |
GROSS PROFIT | (217,595) | (107,405) | (365,991) | (218,128) | |
Selling general and administrative | 104,325 | 123,286 | 201,120 | 227,189 | |
Income (loss) from operations | (321,920) | $ (230,691) | (567,111) | $ (445,317) | |
Trade receivables by segment | |||||
Trade receivables | $ 36,366 | $ 36,366 | $ 177,374 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Deferred tax amounts included in balance sheet | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Subsequent Event (Details)
Subsequent Event (Details) | Aug. 03, 2017shares |
Subsequent Event. | |
Share authorized for repurchase | 100,000 |