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: Chromaline, IKONICS Imaging, Digital Texturing (DTX) and Advanced Material Solutions (AMS). Chromaline sells screen printing film, emulsions, and inkjet receptive film primarily to distributors and some end users. IKONICS Imaging sells photo resistant film, art supplies, glass, metal medium and related abrasive etching equipment to both end users and distributors. AMS provides sound deadening and weight reduction 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. Prior to

2019,

the Company had

one

additional business segment called Export. Export was primarily responsible for both Chromaline and IKONICS Imaging sales outside of the United States and Canada. Chromaline products sold within the United States and Canada prior to

2019

were included in a segment called Domestic. To better reflect how the Company manages these businesses, beginning in

2019,

the Export segment was eliminated. Sales previously recorded in the Export segment are now included in either the Chromaline or IKONICS Imaging segments, respectively. Both the

2019

and

2018

financial information reflect the new reportable segments. The accounting policies applied to determine the segment information are the same as those described in the Company’s Annual Report on Form

-K for the year ended

December 31, 2018.

Management evaluates the performance of each segment based on the components of divisional income (loss). Assets and liabilities are

not

allocated 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, 2019:

	IKONICS
			IKONICS
	Chromaline		Imaging		DTX		AMS			Unalloc.			Total
Net sales	$	3,107,116	$	958,128	$	112,601	$	418,566		$	—		$	4,596,411
Cost of goods sold		2,280,224		501,006		51,547		335,205			—			3,167,982
Gross profit		826,892		457,122		61,054		83,361			—			1,428,429
Selling general and administrative*		467,091		248,050		34,761		88,362			500,597			1,338,861
Research and development*		—		—		—		—			270,465			270,465
Income (loss) from operations	$	359,801	$	209,072	$	26,293	$	(5,001	)	$	(771,062	)	$	(180,897	)

For the

three

months ended

June 30, 2018:

	IKONICS
			IKONICS
	Chromaline		Imaging		DTX		AMS			Unalloc.			Total
Net sales	$	3,099,892	$	968,933	$	94,322	$	471,030		$	—		$	4,634,177
Cost of goods sold		2,037,949		509,613		33,612		390,688			—			2,971,862
Gross profit		1,061,943		459,320		60,710		80,342			—			1,662,315
Selling general and administrative*		441,393		244,633		32,596		97,477			492,864			1,308,963
Research and development*		—		—		—		—			156,472			156,472
Income (loss) from operations	$	620,550	$	214,687	$	28,114	$	(17,135	)	$	(649,336	)	$	196,880

For the

six

months ended

June 30, 2019:

	IKONICS
			IKONICS
	Chromaline		Imaging		DTX		AMS			Unalloc.			Total
Net sales	$	5,136,457	$	2,046,934	$	205,361	$	736,350		$	—		$	8,125,102
Cost of goods sold		3,833,834		1,086,510		85,593		681,617			—			5,687,554
Gross profit		1,302,623		960,424		119,768		54,733			—			2,437,548
Selling general and administrative*		912,094		570,503		69,366		176,510			992,353			2,720,826
Research and development*		—		—		—		—			449,307			449,307
Income (loss) from operations	$	390,529	$	389,921	$	50,402	$	(121,777	)	$	(1,441,660	)	$	(732,585	)

For the

six

months ended

June 30, 2018:

	IKONICS
			IKONICS
	Chromaline		Imaging		DTX		AMS			Unalloc.			Total
Net sales	$	5,440,702	$	2,188,281	$	182,988	$	893,684		$	—		$	8,705,655
Cost of goods sold		3,702,827		1,133,224		59,004		785,866			—			5,680,921
Gross profit		1,737,875		1,055,057		123,984		107,818			—			3,024,734
Selling general and administrative*		866,722		529,658		67,448		182,260			1,011,858			2,657,946
Research and development*		—		—		—		—			310,548			310,548
Income (loss) from operations	$	871,153	$	525,399	$	56,536	$	(74,442	)	$	(1,322,406	)	$	56,240

*The Company does

not

allocate all selling, 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, 2019

and

December 31, 2018

were as follows:

	Jun 30, 2019		Dec 31, 2018

Chromaline	$	1,568,512	$	1,550,411
IKONICS Imaging		323,741		360,551
DTX		26,559		15,692
AMS		298,714		331,708
Unallocated		5,919		(43,147	)

Total	$	2,223,445	$	2,215,215