Segment Information

6 Months Ended

Jun. 30, 2015

Segment Information

Segment Information

7.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 Advanced Material Solutions (AMS).  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.  AMS 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 and prototyping.  Export sells primarily the same products as Domestic and the IKONICS Imaging products not related to AMS 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, 2014.

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 June 30, 2015:

	IKONICS
	Domestic		Export		Imaging		DTX			AMS			Unalloc.			Total
Net sales	$	2,111,510	$	1,337,121	$	991,108	$	101,662		$	112,147		$	—		$	4,653,548
Cost of goods sold	1,207,376		1,018,025		449,116		69,003			270,286			—			3,013,806
Gross profit (loss)	904,134		319,096		541,992		32,659			(158,139		)	—			1,639,742
Selling general and adminstrative*	323,730		137,271		237,167		54,711			75,557			424,085			1,252,521
Research and development*	—		—		—		—			—			192,539			192,539
Income (loss) from operations	$	580,404	$	181,825	$	304,825	$	(22,052	)	$	(233,696	)	$	(616,624	)	$	194,682

For the three months ended June 30, 2014:

	IKONICS
	Domestic		Export		Imaging		DTX			AMS			Unalloc.			Total
Net sales	$	2,089,767	$	1,626,682	$	1,046,592	$	94,612		$	67,094		$	—		$	4,924,747
Cost of goods sold	1,220,452		1,194,219		510,508		84,705			203,991			—			3,213,875
Gross profit (loss)	869,315		432,463		536,084		9,907			(136,897		)	—			1,710,872
Selling general and adminstrative*	332,442		142,716		227,816		50,657			95,334			391,448			1,240,413
Research and development*	—		—		—		—			—			177,479			177,479
Income (loss) from operations	$	536,873	$	289,747	$	308,268	$	(40,750	)	$	(232,231	)	$	(568,927	)	$	292,980

For the six months ended June 30, 2015:

	IKONICS
	Domestic		Export		Imaging		DTX			AMS			Unalloc.			Total
Net sales	$	3,489,299	$	2,455,415	$	1,884,873	$	197,056		$	224,794		$	—		$	8,251,437
Cost of goods sold	2,048,332		1,902,353		909,487		142,094			508,754			—			5,511,020
Gross profit (loss)	1,440,967		553,062		975,386		54,962			(283,960		)	—			2,740,417
Selling general and adminstrative*	639,897		291,991		498,423		90,243			177,659			969,905			2,668,118
Research and development*	—		—		—		—			—			348,383			348,383
Income (loss) from operations	$	801,070	$	261,071	$	476,963	$	(35,281	)	$	(461,619	)	$	(1,318,288	)	$	(276,084	)

For the six months ended June 30, 2014:

	IKONICS
	Domestic		Export		Imaging		DTX			AMS			Unalloc.			Total
Net sales	$	3,599,931	$	2,813,394	$	2,608,396	$	207,129		$	160,473		$	—		$	9,389,323
Cost of goods sold	2,103,556		2,069,119		1,166,507		164,468			415,648			—			5,919,298
Gross profit (loss)	1,496,375		744,275		1,441,889		42,661			(255,175		)	—			3,470,025
Selling general and adminstrative*	628,793		266,844		472,164		85,866			207,589			879,807			2,541,063
Research and development*	—		—		—		—			—			320,809			320,809
Income (loss) from operations	$	867,582	$	477,431	$	969,725	$	(43,205	)	$	(462,764	)	$	(1,200,616	)	$	608,153

*  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 June 30, 2015 and December 31, 2014 were as follows:

	June 30, 2015			Dec 31, 2014
Domestic	$	1,005,847		$	1,068,170
Export	750,167			640,464
IKONICS Imaging	272,551			254,483
DTX	62,285			86,507
AMS	86,743			85,170
Unallocated	(22,685		)	(38,466		)
Total	$	2,154,908		$	2,096,328