Segment Information

3 Months Ended

Mar. 31, 2013

Segment Information

Segment Information

6. Segment Information

The Company’s reportable segments are strategic business units that offer different products and have varied customer bases.  There are four reportable segments:  Domestic, Export, IKONICS Imaging and Other.  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.  The Other segment includes products and customers for etched composites, ceramics, glass and silicon wafers along with sound deadening technology to the aerospace industry, which the Company defines as Micromachining.  In addition, the Other segment includes products and customers related to proprietary inkjet technology used for mold texturing and referred to by the Company as Digital Texturing (DTX).  Export sells primarily the same products as Domestic and the IKONICS Imaging products not related to Micromachining 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, 2012.

Management evaluates the performance of each segment based on the components of divisional income, and does not allocate assets and liabilities 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 March 31, 2013:

IKONICS

	Domestic		Export		Imaging		Other			Unalloc.			Total
Net sales	$	1,516,271	$	1,441,459	$	843,471	$	221,071		$	—		$	4,022,272
Cost of goods sold	905,158		1,105,090		413,749		134,016			—			2,558,013
Gross profit	611,113		336,369		429,722		87,055			—			1,464,259
Selling general and adminstrative*	342,637		153,746		281,438		205,717			482,008			1,465,546
Research and development*	—		—		—		—			172,515			172,515
Income (loss) from operations	$	268,476	$	182,623	$	148,284	$	(118,662	)	$	(654,523	)	$	(173,802	)

For the three months ended March 31, 2012:

IKONICS

	Domestic		Export		Imaging		Other			Unalloc.			Total
Net sales	$	1,483,337	$	1,364,906	$	841,701	$	319,680		$	—		$	4,009,624
Cost of goods sold	866,508		1,026,517		417,018		194,021			—			2,504,064
Gross profit	616,829		338,389		424,683		125,659			—			1,505,560
Selling general and adminstrative*	306,921		150,919		305,712		212,488			450,157			1,426,197
Research and development*	—		—		—		—			175,714			175,714
Income (loss) from operations	$	309,908	$	187,470	$	118,971	$	(86,829	)	$	(625,871	)	$	(96,351	)

*  The Company does not allocate all general and administrative expenses or any research and development expenses to its operating segments for internal reporting.

Accounts receivable by segment as of March 31, 2013 and December 31, 2012 were as follows:

	Mar 31, 2013			Dec 31, 2012
Domestic	$	963,201		$	928,698
Export	809,007			708,933
IKONICS Imaging	228,067			272,346
Other	195,183			174,674
Unallocated	(10,805		)	(24,339		)
Total	$	2,184,653		$	2,060,312