Segment Information

3 Months Ended

Mar. 31, 2016

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 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 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. 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, 2015.

Management evaluates the performance of each segment based on the components of divisional income.  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 March 31, 2016:

	IKONICS
						IKONICS
	Domestic		Export		Imaging		DTX		AMS		Unalloc.		Total
Net sales	$	1,353,728	$	1,243,185	$	1,117,698	$	76,880	$	221,719	$	—	$	4,013,210
Cost of goods sold		846,399		962,489		539,782		35,424		332,442		—		2,716,536
Gross profit (loss)		507,329		280,696		577,916		41,456		(110,723)		—		1,296,674
Selling, general and administrative*		359,397		143,031		251,371		34,743		103,903		546,671		1,439,116
Research and development*		—		—		—		—		—		177,864		177,864
Income (loss) from operations	$	147,932	$	137,665	$	326,545	$	6,713	$	(214,626)	$	(724,535)	$	(320,306)

For the three months ended March 31, 2015:

	IKONICS
						IKONICS
	Domestic		Export		Imaging		DTX		AMS		Unalloc.		Total
Net sales	$	1,377,789	$	1,118,294	$	893,765	$	95,394	$	112,647	$	—	$	3,597,889
Cost of goods sold		840,956		884,328		460,371		73,091		238,468		—		2,497,214
Gross profit (loss)		536,833		233,966		433,394		22,303		(125,821)		—		1,100,675
Selling, general and administrative*		316,167		154,720		261,256		35,532		102,102		545,820		1,415,597
Research and development*		—		—		—		—		—		155,844		155,844
Income (loss) from operations	$	220,666	$	79,246	$	172,138	$	(13,229)	$	(227,923)	$	(701,664)	$	(470,766)

*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 March 31, 2016 and December 31, 2015 were as follows:

	Mar 31, 2016		Dec 31, 2015
Domestic	$	856,957	$	1,206,077
Export		772,104		528,372
IKONICS Imaging		423,531		341,980
DTX		38,444		26,314
AMS		160,122		164,639
Unallocated		(29,902)		(102,188)
Total	$	2,221,256	$	2,165,194