IKONICS Posts Record Second Quarter Profits

DULUTH, Minn., July 31 /PRNewswire-FirstCall/ -- IKONICS Corporation
(Nasdaq: IKNX), a Duluth based imaging technology company, announced today
record second quarter profits of $358,000, or $0.17 per share, an 8% increase
over the second quarter of 2007. Second quarter sales were down 1% to
$4,330,000 compared to the second quarter of 2007. Income from operations was
up 23% for the quarter and 34% for the six month period compared to the same
periods in 2007. Compared to the first quarter of 2008, sales were up 15% and
earnings up 23%.
Bill Ulland, Ikonics CEO, said that, given the softening economy, these
results are encouraging. Both sales and earnings for the company were the
second best quarterly results on record.
Ulland added, "In July we took delivery of production equipment for our
new Digital Texturing enterprise. The fluid deposition machine is being tested
for production and is currently meeting our expectations. We also continue to
make progress with our Photo-Machining technology and expect that business to
continue to grow in the second half."
Ulland also said, "Our investment in new technologies is beginning to
translate into sales which should help offset the current weak domestic demand
for our traditional products, and we believe these new technologies will
position us for significant growth in the future."
During the quarter, the company broke ground on a 35,000 square foot
facility to house its new technologies. The project is on budget, and the
company plans to take occupancy before the end of the year.
This press release contains forward-looking statements regarding sales,
net earnings, and new products that involve risks and uncertainties. The
Company's actual results could differ materially as a result of domestic and
global economic conditions, competitive market conditions, acceptance of new
products, the ability to identify and make suitable acquisitions, as well as
the factors described in the Company's Form 10-KSB, Forms 10-QSB and 10-Q, and
other reports on file with the SEC.

IKONICS Corporation

Condensed STATEMENTS OF OPERATIONS (unaudited)
For the Three Months and Six Months Ended June 30, 2008 and 2007

Three Months Ended Six Months Ended
6/30/08 6/30/07 6/30/08 6/30/07
Net Sales $4,330,059 $4,374,677 $8,110,907 $7,882,444

Costs and expenses 3,791,173 3,934,716 7,524,901 7,446,150

Income from
operations 538,886 439,961 586,006 436,294

Gain on sale of
investment - - - 55,159

Interest income 23,697 36,724 67,372 69,631

Income before
income taxes 562,583 476,685 653,378 561,084

Federal and state
tax expense 204,146 145,283 189,303 90,585

Net income $358,437 $331,402 $464,075 $470,499

Earnings per common
share-diluted $0.17 $0.16 $0.22 $0.23

Average shares
outstanding-
diluted 2,080,617 2,064,698 2,068,292 2,056,762

Condensed Balance Sheets
As of June 30, 2008 and December 31, 2007

6/30/08 12/31/07
Assets (unaudited)
Current assets $9,300,221 $9,315,737
Property, plant
and equipment, net 2,391,985 1,320,591
Investment in
non-marketable
equity securities 855,201 855,201
Intangible assets 486,163 479,888
Deferred income
taxes 11,000 11,000
$13,044,570 $11,982,417

Liabilities and
Stockholders'
Equity
Current
liabilities $1,376,334 $936,703
Long term debt - -
Stockholders'
equity 11,668,236 11,045,714
$13,044,570 $11,982,417

SOURCE IKONICS Corporation

Bill Ulland, Chairman, President & CEO of IKONICS Corporation,
+1-218-628-2217