Ikonics Corp. (IKNX, Financial) filed Quarterly Report for the period ended 2009-03-31.
Ikonics Corp develops manufactures and sells light sensitive liquid coatings and light sensitive films for commercial and industrial applications in the United States and abroad. The Company also markets ancillary chemicals and equipment to provide a full line of products and services to its customers. The Company?s products serve the screen printing and decorative sand blasting markets. Ikonics Corp. has a market cap of $12.7 million; its shares were traded at around $6.34 with a P/E ratio of 17.2 and P/S ratio of 0.8. Ikonics Corp. had an annual average earning growth of 18.2% over the past 5 years.
Cash and cash equivalents were $1,234,000 and $4,050,000 at March 31, 2009 and 2008, respectively. The Company generated $431,000 in cash from operating activities during the three months ended March 31, 2009, compared to generating $43,000 of cash from operating activities during the same period in 2008. Cash provided by operating activities is primarily the result of net income adjusted for non-cash depreciation, amortization, gain on sale of nonmarketable equity securities, loss on intangible asset abandonment, deferred taxes, and certain changes in working capital components discussed in the following paragraph.
During the first three months of 2009, trade receivables decreased by $217,000. The decrease in receivables was driven by lower sales volumes. The Company believes that the quality of its receivables is high and that strong internal controls are in place to maintain proper collections. Inventory levels decreased $252,000 due to lower finished goods and raw material levels as the Company is managing its inventories to match lower sales levels. Deposits, prepaid expenses and other assets increased $36,000, reflecting insurance premiums prepaid in the first quarter of 2009. Income tax refund receivable increased $10,000 due to the accrual of 2009 taxes. Accounts payable decreased $47,000 due to of the timing of payments to and purchases from vendors and payments made to contractors associated with the new building. Accrued expenses decreased $148,000, reflecting the timing of compensation payments.
During the first quarter of 2009, investing activities used $30,000. Purchases of property and equipment were $48,000 mainly for new equipment to support the Companys new business initiatives and research activities. Also during the first quarter of 2009, the Company incurred $2,000 in patent application costs that the Company records as an asset and amortizes upon successful completion of the application process. The Company received proceeds of approximately $20,000 in the first quarter of 2009 on the 2007 sale of its investment in the common and preferred stock of Apprise Technologies, Inc.,
For the first three months of 2008, investing activities provided $2,697,000 to the Company. The Company sold $2,875,000 of short-term investments during 2008 at no gain or loss. These proceeds were partially offset by $160,000 of property and equipment purchases along with $26,000 in patent application costs.
The Company used $69,000 in financing activities in the first quarter of 2009 to purchase 16,327 shares of its own stock. During the first three months of 2008 the Company received $80,000 from financing activities. The Company received $50,000 from the issuance of 17,524 shares of common stock upon the exercise of stock options. The Company also realized $30,000 during the first quarter of 2008 related to the excess tax benefit.
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Ikonics Corp develops manufactures and sells light sensitive liquid coatings and light sensitive films for commercial and industrial applications in the United States and abroad. The Company also markets ancillary chemicals and equipment to provide a full line of products and services to its customers. The Company?s products serve the screen printing and decorative sand blasting markets. Ikonics Corp. has a market cap of $12.7 million; its shares were traded at around $6.34 with a P/E ratio of 17.2 and P/S ratio of 0.8. Ikonics Corp. had an annual average earning growth of 18.2% over the past 5 years.
Highlight of Business Operations:
Income Taxes. For the first quarter of 2009, the Company realized an income tax benefit of $16,000 compared to income tax benefit of $15,000 for the same quarter in 2008. The 2009 first quarter benefit primarily relates to derecognizing a liability of $21,000 for unrecognized tax benefits in accordance with FIN 48 relating to a tax year where the statute of limitations expired during the first quarter and the benefits of the domestic manufacturing deduction, research and development credits, and state income taxes. The 2008 first quarter benefit primarily relates to derecognizing a liability of $44,000 for unrecognized tax benefits relating to a tax year where the statute of limitations expired during the first quarter of that year. The Company expects that for the remainder of 2009, the Company will have recorded income taxes at an effective tax rate of 35% to 36%.Cash and cash equivalents were $1,234,000 and $4,050,000 at March 31, 2009 and 2008, respectively. The Company generated $431,000 in cash from operating activities during the three months ended March 31, 2009, compared to generating $43,000 of cash from operating activities during the same period in 2008. Cash provided by operating activities is primarily the result of net income adjusted for non-cash depreciation, amortization, gain on sale of nonmarketable equity securities, loss on intangible asset abandonment, deferred taxes, and certain changes in working capital components discussed in the following paragraph.
During the first three months of 2009, trade receivables decreased by $217,000. The decrease in receivables was driven by lower sales volumes. The Company believes that the quality of its receivables is high and that strong internal controls are in place to maintain proper collections. Inventory levels decreased $252,000 due to lower finished goods and raw material levels as the Company is managing its inventories to match lower sales levels. Deposits, prepaid expenses and other assets increased $36,000, reflecting insurance premiums prepaid in the first quarter of 2009. Income tax refund receivable increased $10,000 due to the accrual of 2009 taxes. Accounts payable decreased $47,000 due to of the timing of payments to and purchases from vendors and payments made to contractors associated with the new building. Accrued expenses decreased $148,000, reflecting the timing of compensation payments.
During the first quarter of 2009, investing activities used $30,000. Purchases of property and equipment were $48,000 mainly for new equipment to support the Companys new business initiatives and research activities. Also during the first quarter of 2009, the Company incurred $2,000 in patent application costs that the Company records as an asset and amortizes upon successful completion of the application process. The Company received proceeds of approximately $20,000 in the first quarter of 2009 on the 2007 sale of its investment in the common and preferred stock of Apprise Technologies, Inc.,
For the first three months of 2008, investing activities provided $2,697,000 to the Company. The Company sold $2,875,000 of short-term investments during 2008 at no gain or loss. These proceeds were partially offset by $160,000 of property and equipment purchases along with $26,000 in patent application costs.
The Company used $69,000 in financing activities in the first quarter of 2009 to purchase 16,327 shares of its own stock. During the first three months of 2008 the Company received $80,000 from financing activities. The Company received $50,000 from the issuance of 17,524 shares of common stock upon the exercise of stock options. The Company also realized $30,000 during the first quarter of 2008 related to the excess tax benefit.
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