EXHIBIT 99
[IKONICS CORPORATION LOGO]
NEWS RELEASE
NEWS CONTACT: Bill Ulland FOR IMMEDIATE RELEASE
Chairman, President & CEO October 31, 2006
(218) 628-2217
IKONICS POSTS RECORD THIRD QUARTER SALES, WHILE
NEW PRODUCT EXPENSES FLATTEN EARNINGS
DULUTH, MN - IKONICS Corporation, a Duluth based imaging technology company,
announced today record third quarter 2006 sales of $3,674,000, a 6% increase
over the third quarter of 2005. Earnings were $285,000, or $0.14 cents per
share, down slightly from 2005 third quarter earnings of $287,000, or $0.14 per
share. Year to date sales are up 6% and earnings are up 25% over the first three
quarters of 2005.
Bill Ulland, IKONICS CEO, said that the flat earnings for the quarter reflected
heavy new product development and launch expenses in addition to expenses
related to IKONICS' bi-annual screen print trade show.
"Our new product initiatives, particularly our industrial ink jet and industrial
etching technologies, continue to show considerable promise while requiring
significant R&D and product launch expenses. I anticipate these expenses to
lessen in the fourth quarter," said Ulland. Ulland also added that earnings
could be negatively impacted in the fourth quarter as IKONICS incurs expenses
related to Sarbanes Oxley compliance.
This press release contains forward-looking statements regarding sales,
expenses, net earnings, and new products that involve risks and uncertainties.
The Company's actual results could differ materially as a result of domestic and
global economic conditions, competitive market conditions, acceptance of new
products, the ability to identify and make suitable acquisitions, as well as the
factors described in the Company's Form 10-KSB, Forms 10-QSB and other reports
on file with the SEC.
IKONICS CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED) For the Three Months and Nine Months
Ended September 30, 2006 and 2005
THREE MONTHS ENDED NINE MONTHS ENDED
9/30/06 9/30/05 9/30/06 9/30/05
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Net Sales $ 3,673,830 $ 3,462,253 $ 11,145,304 $ 10,532,775
Costs and expenses net of interest income 3,262,067 3,045,639 10,086,829 9,702,465
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Income before income taxes 411,763 416,614 1,058,475 830,310
Income tax expense 126,810 129,150 327,751 243,929
----------- ----------- ------------ ------------
Net income $ 284,953 $ 287,464 $ 730,724 $ 586,381
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Earnings per common share-diluted $ 0.14 $ 0.14 $ 0.36 $ 0.30
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Average shares outstanding-diluted 2,043,981 1,986,033 2,029,732 1,980,151
CONDENSED BALANCE SHEETS
As of September 30, 2006 and December 31, 2005
9/30/06 12/31/05
------------ -----------
(unaudited)
ASSETS
Current assets $ 8,464,823 $ 7,728,358
Property, plant and equipment, net 862,987 951,565
Investment in non-marketable
equity securities 865,160 450,790
Intangible assets 283,868 279,086
Deferred taxes 61,000 61,000
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$10,537,838 $ 9,470,799
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 1,073,382 $ 992,294
Long term debt - -
Stockholders' equity 9,464,456 8,478,505
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$10,537,838 $ 9,470,799
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CONDENSED STATEMENTS OF CASH FLOW
(UNAUDITED) For Nine Months Ended September
30, 2006 and 2005
9/30/06 9/30/05
----------- -----------
Net cash provided by operating activities $ 797,419 $ 606,004
Net cash used in investing activities ($446,247) (334,476)
Net cash provided by financing activities $ 223,047 55,094
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Net increase in cash and cash equivalents $ 574,219 326,622
Cash and cash equivalents at beginning of period 3,412,072 2,737,460
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Cash and cash equivalents at end of period $ 3,986,291 $ 3,064,082
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