UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

_____________

 

FORM 8K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)               April 29, 2021       

 

IKONICS CORPORATION


(Exact name of registrant as specified in its charter)

 

Minnesota

000-25727

41-0730027

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

4832 Grand Avenue

Duluth, Minnesota

 

55807

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code  (218) 628-2217                           

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.10 per share

IKNX

Nasdaq Capital Market

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

Item 2.02.            Results of Operations and Financial Condition.

 

On April 29, 2021, IKONICS Corporation (the “Company”) reported its financial results for the quarter ended March 31, 2021. See the Company’s press release dated April 29, 2021, which is furnished as Exhibit 99 hereto and incorporated by reference in this Item 2.02.

 

Item 9.01.            Financial Statements and Exhibits.

 

(d)        Exhibit.

 

Exhibit

Number

Description

99

Press Release dated April 29, 2021

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

IKONICS CORPORATION

 

 

 

 

 

 

 

 

 

Date: April 29, 2021

/s/ Jon Gerlach

 

 

 

Jon Gerlach

 

 

 

Chief Financial Officer

 

    and Vice President of Finance  

 

 

Exhibit 99

 

 

LOGO1.JPG

4832 Grand Avenue

Duluth, MN 55807 USA

Phone: (218) 628-2217

Fax: (218) 628-3245

Email: info@ikonics.com

Website: www.ikonics.com

 

 

News Contact:   Glenn Sandgren      For Immediate Release
  Chief Executive Officer  April 29, 2021  
  (218) 628-2217  

 

IKONICS ANNOUNCES IMPROVED FIRST QUARTER 2021 RESULTS

 

DULUTH, MN - IKONICS Corporation (Nasdaq:IKNX), a Duluth-based imaging technology company (“IKONICS” or the “Company”), announced its first quarter 2021 earnings. Net Sales were $3,073,000 compared to $3,497,000 in 2020, a decline of 12.1%. IKONICS realized a net loss of $322,000, or $0.16 per diluted share, a 45.1% improvement over the $587,000 net loss, or $0.30 per diluted share, for the same quarter of 2020.

 

Glenn Sandgren, IKONICS CEO, noted, “The overall performance of IKONICS continues to trend upwards, comparing very favorably to the prior year. Our served markets are rapidly reopening, and our major strategic initiatives are progressing well.”

 

Key Points:

 

 

IKONICS quarterly performance is cyclical, and the first quarter is traditionally the most challenging. It is encouraging that 2021 first quarter results have improved due to cost reduction efforts versus the prior year quarter, despite a 12.1% sales decrease for the period.

 

 

Imaging sales are strengthening as awards customers reopen and IKONART® sales continue to outperform, driven by a compelling social media presence.

 

 

Chromaline sales were driven by strong international demand, and early reopening in North America. Division sales were down compared to the prior year, but division income almost doubled.

 

 

Multiple large mold makers are evaluating our IIS DualPrint™ mold texturing mask making system, with very positive feedback.

 

 

 

Pressure has continued to be put on the AMS Division from the aerospace industry slowdown. However, frequency of new business inquiries has returned to pre-Covid levels and the legacy customer order rate during the first quarter was improved over the second half of last year.

 

 

On April 1, 2021, IKONICS paid off its $2.7 million real estate loan, leaving the Company with only working capital related liabilities. Company liquidity remains strong based on cash on hand in addition to the $2.1 million available line of credit.

 

 

 

Supply chains are under pressure from weather events and logistical challenges. Currently, no long-term impact is expected.

 

Sandgren said in closing, “Opportunities abound as the world reopens, and IKONICS is well positioned to make the most of them as they arise. We are excited about IKONICS improving prospects for the remainder of the year.”

 

 

This press release contains forward-looking statements regarding sales, gross profits, net earnings, balance sheet position, supply chain, new products, new business initiatives, customer behavior and market trends that involve risks and uncertainties. The Company's actual results could differ materially as a result of domestic and global economic conditions, downturns in the aerospace or automotive industries, unexpected production delays by customers using the Company’s products, supply chain disruptions, competitive market conditions, changes in consumer preferences, inability to commercialize technologies the Company is developing on the anticipated timeline or at all, acceptance of new products the Company offers, introduction of new products or technologies by competitors, unexpected capital expenditure requirements, delays in completing planned expansions, the ability to control operating costs without impacting growth as well as the factors described in the Company's Forms 10-K, and 10-Q, and other reports on file with the SEC.

 

 

 

LOGO1.JPG

4832 Grand Avenue

Duluth, MN 55807 USA

Phone: (218) 628-2217

Fax: (218) 628-3245

Email: info@ikonics.com

Website: www.ikonics.com

 

IKONICS Corporation

CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

For the Three Months Ended March 31, 2021 and 2020

 

   

Three Months Ended

 
   

3/31/21

   

3/31/20

 

Net sales

  $ 3,073,408     $ 3,497,192  
                 

Cost of goods sold

    2,077,076       2,343,960  
                 

Gross profit

    996,332       1,153,232  
                 

Operating expenses

    1,318,513       1,964,600  
                 

Loss from operations

    (322,181 )     (811,368 )
                 

Interest expense

    (19,842 )     (21,484 )
                 

Other Income

    37       6,917  
                 

Loss before income taxes

    (341,986 )     (825,935 )
                 

Income tax benefit

    (20,347 )     (238,929 )
                 

Net loss

  $ (321,639 )   $ (587,006 )
                 

Loss per common share-basic and diluted

  $ (0.16 )   $ (0.30 )
                 

Average diluted shares outstanding

    1,976,771       1,976,354  

 

CONDENSED BALANCE SHEETS

As of March 31, 2021 and December 31, 2020

 

   

3/31/2021

   

12/31/2020

 

Assets

 

(unaudited)

         

Current assets

  $ 8,164,356     $ 7,803,453  

Property, plant, and equipment, net

    7,227,802       7,388,363  

Intangible assets, net

    243,819       243,583  
    $ 15,635,977     $ 15,435,399  

Liabilities and Stockholders' Equity

               

Current liabilities

  $ 4,074,392     $ 3,596,053  

Long-term debt

           

Stockholders' equity

    11,561,585       11,839,346  
    $ 15,635,977     $ 15,435,399  

 

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

For the Three Months Ended March 31, 2021 and 2020

 

   

3/31/2021

   

3/31/2020

 

Net cash provided by (used in) operating activities

  $ 771,355     $ (427,276 )

Net cash (used in) provided by investing activities

    (6,787 )     1,104,749  

Net cash used in financing activities

    (30,144 )     (35,682 )
                 

Net increase in cash

    734,424       641,791  

Cash at beginning of period

    3,693,845       963,649  
                 

Cash at end of period

  $ 4,428,269     $ 1,605,440