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Segment Information
9 Months Ended
Sep. 30, 2011
Segment Information [Abstract] 
Segment Information

6.      Segment Information

The Company’s reportable segments are strategic business units that offer different products and have varied customer bases. In previous years, there were three reportable segments: Domestic, Export and IKONICS Imaging. 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 IKONICS Imaging segment also included products and customers for etched composites, ceramics, glass and silicon wafers along with sound deadening technology to the aerospace industry, which beginning in 2011 the Company now defines as Micromachining. In addition, IKONICS Imaging included 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. Beginning in 2011, the Company no longer includes Micromachining and DTX financial information under the IKONICS Imaging segment. The financial information for Micromachining and DTX are combined into a new segment called “Other.” As the Company is unable to provide comparable 2010 financial information for the newly defined segments, the Company will disclose in 2011 both the new basis and previous basis of segment reporting. The accounting policies applied to determine the segment information are the same as those described in the summary of significant accounting policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

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 accounts receivables which is allocated based on the previous segmentation. Financial information with respect to the reportable segments follows:

For the three months ended September 30, 2011 (previous segment method):

 

                                         
    Domestic     Export     IKONICS
Imaging		     Unalloc.     Total  

Net sales

   $ 1,777,675     $ 1,463,776     $ 1,119,861     $ —       $ 4,361,312  

Cost of goods sold

     1,044,658       1,125,777       511,074       —         2,681,509  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

     733,017       337,999       608,787       —         1,679,803  

Selling, general and administrative*

     326,341       150,390       453,597       323,688       1,254,016  

Research and development*

     —         —         —         129,541       129,541  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

   $ 406,676     $ 187,609     $ 155,190     $ (453,229 )    $ 296,246  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

For the three months ended September 30, 2010 (previous segment method):

 

                                         
    Domestic     Export     IKONICS
Imaging		     Unalloc.     Total  

Net sales

   $ 1,671,062     $ 1,413,108     $ 1,056,922     $ —       $ 4,141,092  

Cost of goods sold

     888,023       1,021,437       564,728       —         2,474,188  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

     783,039       391,671       492,194       —         1,666,904  

Selling, general and administrative*

     231,668       119,113       280,277       455,519       1,086,577  

Research and development*

     —         —         —         163,420       163,420  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

   $ 551,371     $ 272,558     $ 211,917     $ (618,939 )    $ 416,907  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

For the three months ended September 30, 2011 (new segment method):

 

                                                 
    Domestic     Export     IKONICS
Imaging		     Other     Unalloc.     Total  

Net sales

   $ 1,777,675     $ 1,463,776     $ 878,428     $ 241,433     $ —       $ 4,361,312  

Cost of goods sold

     1,044,658       1,125,777       412,385       98,689       —         2,681,509  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

     733,017       337,999       466,043       142,744       —         1,679,803  

Selling general and adminstrative*

     326,341       150,390       276,429       177,168       323,688       1,254,016  

Research and development*

     —         —         —         —         129,541       129,541  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

   $ 406,676     $ 187,609     $ 189,614     $ (34,424 )    $ (453,229 )    $ 296,246  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

For the nine months ended September 30, 2011 (previous segment method):

 

                                         
    Domestic     Export     IKONICS
Imaging		     Unalloc.     Total  

Net sales

   $ 4,905,010     $ 4,273,342     $ 3,423,491     $ —       $ 12,601,843  

Cost of goods sold

     2,806,194       3,195,322       1,599,691       —         7,601,207  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

     2,098,816       1,078,020       1,823,800       —         5,000,636  

Selling, general and administrative*

     910,821       428,253       1,434,023       1,092,255       3,865,352  

Research and development*

     —         —         —         366,940       366,940  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

   $ 1,187,995     $ 649,767     $ 389,777     $ (1,459,195 )    $ 768,344  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

For the nine months ended September 30, 2010 (previous segment method):

 

                                         
    Domestic     Export     IKONICS
Imaging		     Unalloc.     Total  

Net sales

   $ 4,962,625     $ 4,042,887     $ 3,068,212     $ —       $ 12,073,724  

Cost of goods sold

     2,589,379       2,827,152       1,676,735       —         7,093,266  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

     2,373,246       1,215,735       1,391,477       —         4,980,458  

Selling, general and administrative*

     718,275       444,767       848,344       1,398,055       3,409,441  

Research and development*

     —         —         —         528,622       528,622  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

   $ 1,654,971     $ 770,968     $ 543,133     $ (1,926,677 )    $ 1,042,395  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

For the nine months ended September 30, 2011 (new segment method):

 

                                                 
    Domestic     Export     IKONICS
Imaging		     Other     Unalloc.     Total  

Net sales

   $ 4,905,010     $ 4,273,342     $ 2,654,097     $ 769,394     $ —       $ 12,601,843  

Cost of goods sold

     2,806,194       3,195,322       1,299,488       300,203       —         7,601,207  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

     2,098,816       1,078,020       1,354,609       469,191       —         5,000,636  

Selling general and adminstrative*

     910,821       428,253       876,367       557,656       1,092,255       3,865,352  

Research and development*

     —         —         —         —         366,940       366,940  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

   $ 1,187,995     $ 649,767     $ 478,242     $ (88,465 )    $ (1,459,195 )    $ 768,344  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

* 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 related to the “Other” segment are included in IKONICS Imaging. Accounts receivable by segment as of September 30, 2011 and December 31, 2010 were as follows:

 

                 
    Sep 30, 2011     Dec 31, 2010  

Domestic

   $ 1,030,905     $ 874,535  

Export

     782,844       725,007  

IKONICS Imaging

     466,767       325,334  

Unallocated, net of allowances

     (12,202 )      (41,448 ) 
   

 

 

    

 

 

  

Total

   $ 2,268,314     $ 1,883,428