IKONICS Corp. (Nasdaq:IKNX), a Duluth-based imaging technology company, reported third quarter revenue of $3,135,000 compared to $4,530,000 in 2019, a decline of 31 percent. IKONICS posted a third quarter 2020 loss of $274,000, or 14 cents per diluted share, compared to a loss of $163,000, or 8 cents per diluted share, for the same period in 2019.
For the nine months ending Sept. 30, the company realized a net loss of 96 cents per diluted share compared to a net loss of 37 cents per diluted share for the same period in 2019.
“We believe the company has turned a corner and is exiting this very challenging environment," Glenn Sandgren, IKONICS President and CEO, said in the Q3 report. "Sales continue to improve month over month, and we are seeing strong order patterns in our core legacy businesses so far in the fourth quarter. The sustainability actions taken earlier this year have had a favorable impact on our ability to achieve cash-flow break-even on lower than normal revenue levels as demonstrated in year over year third quarter performance.”
Efforts to maintain a safe, COVID-19 free workplace have been successful to date. Our team is doing a remarkable job, said the CEO.
IKONICS core legacy businesses are experiencing sales momentum increases in the fourth quarter.
As of Sept. 30, cash and cash equivalents were $3,500,000, well above second quarter levels.
The AMS business unit whose largest customers are aircraft subcontractors has experienced an amplified negative impact from the aerospace slowdown, after a solid start to the year. Improvement in aerospace market conditions is not expected until at least mid-2021.
The IKONART® crafting product line continues to exceed sales expectations, and our custom stencil kit is now available on Amazon.
IKONICS Inkjet Solutions received favorable feedback during beta testing of its new DTX Dual-Print™ technology at multiple texturing facilities. Based on the beta testing, the DTX Dual-Print system cuts the time in half for application of multiple-layer patterns resulting in significant labor savings for customers, as well as ensuring precise layer-to-layer registration. DTX Dual-Print is expected to be widely available in early 2021.
Sandgren continued, “Barring unforeseen COVID-19 related restrictions and market impact, we expect the business climate for all our non-aerospace served markets to continue to improve in 4th quarter 2020 and through 2021. The improvement in business conditions, in conjunction with new product initiatives, is expected to yield a marked improvement in 2021 financial performance.”