SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2013

SEGMENT INFORMATION

SEGMENT INFORMATION

5. SEGMENT INFORMATION

The Company’s reportable segments are strategic business units that offer different products and have varied customer bases.  There are five reportable segments:  Domestic, Export, IKONICS Imaging, Digital Texturing (DTX) and Micro-Machining.  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.  Micro-Machining provides sound deadening technology to the aerospace industry along with products and services for etched composites, ceramics, glass and silicon wafers.  DTX includes products and customers related to patented and proprietary inkjet technology used for mold texturing.  Export sells primarily the same products as Domestic and the IKONICS Imaging products not related to Micro-Machining or DTX.  In previous periods, the segment designated as Other included both Micro-Machining and DTX.  Beginning in 2013, the Company began to report DTX and Micro-Machining as separate segments.  The accounting policies of the segments are the same as those described in the summary of significant accounting policies included in Note 1.

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.  Financial information with respect to the reportable segments follows:

For the year ended December 31, 2013:

					IKONICS					Micro-
	Domestic		Export		Imaging		DTX			Machining			Unalloc.			Total
Net sales	$	7,260,934	$	5,641,544	$	3,836,762	$	407,193		$	344,975		$	—		$	17,491,408
Cost of goods sold	4,062,141		4,057,111		1,831,047		70,343			532,911			—			10,553,553
Gross profit (loss)	3,198,793		1,584,433		2,005,715		336,850			(187,936		)	—			6,937,855
Selling general and adminstrative*	1,307,154		578,084		977,574		474,782			446,803			1,584,003			5,368,400
Research and development*	—		—		—		—			—			649,325			649,325
Income (loss) from operations	$	1,891,639	$	1,006,349	$	1,028,141	$	(137,932	)	$	(634,739	)	$	(2,233,328	)	$	920,130

For the year ended December 31, 2012:

					IKONICS					Micro-
	Domestic		Export		Imaging		DTX			Machining			Unalloc.			Total
Net sales	$	7,118,912	$	5,523,177	$	3,708,987	$	470,205		$	491,126		$	—		$	17,312,407
Cost of goods sold	4,036,339		4,042,689		1,705,054		118,349			465,132			—			10,367,563
Gross profit	3,082,573		1,480,488		2,003,933		351,856			25,994			—			6,944,844
Selling general and adminstrative*	1,226,107		607,453		1,099,812		493,631			314,803			1,540,381			5,282,187
Research and development*	—		—		—		—			—			629,776			629,776
Income (loss) from operations	$	1,856,466	$	873,035	$	904,121	$	(141,775	)	$	(288,809	)	$	(2,170,157	)	$	1,032,881

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

Trade receivables by segment as of December 31, 2013 and December 31, 2012 were as follows:

	Dec 31, 2013			Dec 31, 2012
Domestic	$	1,012,057		$	928,698
Export	667,343			708,933
IKONICS Imaging	339,537			272,346
DTX	26,910			117,552
Micro-Machining	40,222			57,122
Unallocated	(35,216		)	(24,339		)
Total	$	2,050,853		$	2,060,312