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Mar 31, 2020
Terawulf Q1 2020 Earnings Report
IKONICS announced first quarter 2020 results with a net loss, but showed improvement on a non-GAAP basis despite COVID-19 impacts.
Key Takeaways
IKONICS reported a decrease in revenue by 1% compared to the previous year. The company experienced a net loss, but on a non-GAAP basis, the adjusted net loss improved by 51% year-over-year, excluding one-time CEO transition expenses. The impact of COVID-19 significantly affected March revenue.
IKONICS has been deemed an essential business and continues to operate with COVID-19 safety measures.
A Payroll Protection Program SBA loan of $1.2 million was received in April.
The company accounted for a first quarter income tax benefit of $240,000 as part of the CARES Act.
The IKONART® craft product line is benefitting from the new textile screen printing film introduction and social marketing efforts.
Terawulf
Terawulf
Forward Guidance
Due to the unknown severity and duration of the COVID-19 pandemic, it is impossible to predict the performance of the business. However, the crisis could yield strategic opportunities for IKONICS.
Positive Outlook
- IKONICS has been responding aggressively to this global crisis by implementing new workplace controls to protect our people.
- IKONICS has been taking actions to improve our liquidity and reduce our operating costs including a temporary reduction in officer compensation and board fees.
- Compared with many similar companies, IKONICS has a favorable cash position, with approximately $3.0 million in cash and short-term investments as well as a $2.1 million open line of credit.
- The crisis could yield a number of strategic opportunities for IKONICS and other well positioned companies.
Challenges Ahead
- The impact of COVID-19 on March revenue was substantial, and is expected to continue and will overshadow much of our short-term progress.
- Due to the unknown severity and duration of the COVID-19 pandemic and the related lack of visibility to the impact on the Company's served markets, it is impossible to predict the performance of the business at this juncture.