Financial Data and Key Metrics Changes - Net sales for fiscal year 2025 increased by 4% to $20.5 million compared to $19.7 million for fiscal year 2024 [29] - Gross profit increased by 1% year over year to $9.74 million, but gross profit percentage decreased to 47.5% from 50% in the prior year [29] - Net income for fiscal year 2025 was $1.2 million or $0.08 per share, down from $1.4 million or $0.09 per share in the prior year [33] Business Line Data and Key Metrics Changes - Integrated coating system sales increased by 28% or $814,000 to $3.7 million, driven by success in the clean energy market [15] - Multi-axis coating systems saw sales grow by 6% or $603,000 to $10.7 million for the full fiscal year [18] - Medical sales declined by 22% for fiscal year 2025, primarily due to lower demand for stent and balloon coating systems [21] Market Data and Key Metrics Changes - Sales to the alternative clean energy market grew by 64% over the prior fiscal year [20] - U.S. and Canadian sales increased by 15% or $1.63 million, driven by the delivery of high ASP systems [23] - Latin America sales decreased by 34% or $412,000, influenced by a prior year float glass coating system sale that did not repeat [24] Company Strategy and Development Direction - The company is focusing on expanding into the clean energy sector, with significant growth in advanced solar cells and carbon capture applications [8] - A strategic shift to larger, more complex systems has broadened the addressable market and increased average unit selling prices [7] - The company is optimistic about future demand in the medical and semiconductor markets, leveraging expertise developed in clean energy [61] Management's Comments on Operating Environment and Future Outlook - Management noted some apprehension in the U.S. clean energy sector regarding order placements, but emphasized strong demand in the EU and Asia [45][47] - The company expects continued revenue growth and profitability in the first half of fiscal year 2026, supported by a solid backlog of $8.6 million [12][26] - Visibility into full-year revenue remains limited due to evolving conditions in the clean energy sector and potential tariff impacts [16] Other Important Information - The company invested $2.7 million in R&D for the fiscal year, down from $2.9 million in the prior year [27] - The company maintains a strong cash position with $11.9 million in cash, cash equivalents, and marketable securities, and no debt on the balance sheet [34] Q&A Session Summary Question: Clarification on backlog related to Alt Energy - Management confirmed that there are eight systems in backlog from the clean energy sector, all expected to ship in the current fiscal year [40] Question: Visibility on demand and potential pullback - Management acknowledged some apprehension in the U.S. clean energy sector but noted that the majority of their customers are financially stable [45][46] Question: Opportunities driving backlog in upcoming months - Management highlighted strong momentum in the medical and semiconductor sectors, with ongoing demand for high ASP products [60] Question: Medical market growth and geographical expansion - Management indicated that growth in the medical market is primarily coming from the U.S. and EU, with a shift towards more complex systems [78] Question: Semiconductor market commentary - Management noted that they are offering unique solutions that competitors cannot provide, which is driving progress in the semiconductor sector [83]

Financial Performance - Net sales reached a record $20.5 million, up 4% from $19.7 million in fiscal 2024, driven by strong shipments to the Alternative/Clean Energy Market[129]. - Gross profit decreased by 1% to $9.74 million, with a gross margin of 47.5%, down from 50% in the previous year, primarily due to product mix and reclassification of labor costs[129][135]. - Operating income fell to $1.01 million, down from $1.20 million in fiscal 2024, attributed to lower gross profit and higher operating expenses[129]. - Net income was approximately $1.3 million, a decrease from $1.4 million in fiscal 2024, reflecting lower gross profit and increased operating expenses[129]. - The backlog of equipment and service-related orders was $8.67 million, down 6.6% from the prior year-end record high of $9.28 million[129]. - Sales in the Alternative/Clean Energy market surged 64% to $9.84 million, driven by production-scale system shipments to the solar market[141]. - U.S. and Canada sales increased by 15% to $12.51 million, supported by the delivery of five high Average Selling Price systems totaling $3.85 million[142]. - Research and product development expenses decreased by 6% to $2.72 million, due to reduced salaries and reallocation of labor expenses[143][144]. - Total operating expenses rose slightly by 1% to $8.73 million, with general and administrative expenses increasing by 12%[143]. - Operating income decreased by $172,000 or 15%, to $1,010,000 in fiscal 2025 compared to $1,182,000 in the prior fiscal year[152]. - Net income decreased by $168,000 or 12%, to $1,273,000 for fiscal 2025 compared to $1,441,000 for the prior fiscal year[155]. Market and Sales Dynamics - In fiscal 2025, 39% of total sales were generated from international markets, amounting to approximately $7,998,000, down from 45% or $8,822,000 in fiscal 2024[24][35]. - Approximately 39% of sales originated outside the U.S. and Canada, highlighting the company's geographic diversity[131]. - The company expects to derive a substantial portion of sales from outside the U.S., indicating reliance on global economic conditions[47]. - The company is exposed to risks related to international sales, including tariffs and trade wars, which could significantly impact revenue[75]. - Changes in United States trade policy, including tariffs, may adversely impact the company's business and results of operations[44]. - Customers or suppliers experiencing cash flow problems may modify, delay, or cancel purchase plans, adversely affecting sales and earnings[48]. Operational Challenges - The company has not faced significant issues with raw material availability, managing inventory through lean manufacturing processes[29][30]. - The company has faced challenges in the supply of various materials and components, particularly electronic components, due to global supply chain shortages[73]. - The company has encountered difficulties in obtaining adequate supplies of components and raw materials, which could negatively affect profit margins[72]. - A tightening labor market could lead to increased costs and negatively affect project completion and operational efficiency[51]. - The company may rely on subcontractors to meet current demand, and any loss of these services could materially affect operations[74]. - Inflationary pressures have risen sharply since late 2021, with expectations of elevated rates throughout 2025, potentially impacting the company's liquidity and overall cost structure[80]. Strategic Initiatives - The company has invested significantly in expanding its product portfolio and market reach, leveraging its core ultrasonic coating technology[12][15]. - Sono-Tek's ultrasonic coating technology is utilized across various industries, including microelectronics, medical devices, and alternative energy, enhancing product performance and process efficiency[12][20]. - Sono-Tek's application consulting services support customers in optimizing their coating processes, enhancing customer relationships and satisfaction[23]. - The company plans to focus on rapid growth, including organic growth and possible acquisitions, which may strain resources[53]. - The ability to protect intellectual property rights is crucial for competitive advantage, but challenges exist in enforcement[54]. - The company faces competition from larger firms with greater resources, which could impact market share and revenue growth[63]. - Rapid technological changes may render existing products obsolete, necessitating timely and cost-effective responses[64]. - Development of new products and systems requires significant investment, and lack of market acceptance could adversely affect business[68]. Governance and Management - The company has a strong balance sheet with no debt, providing financial flexibility for growth and development opportunities[26]. - The company has a staggered board structure, with terms for certain directors running until the annual meeting in 2026, ensuring continuity in governance[182]. - The company has a strong focus on corporate governance, with no family relationships among directors and officers, ensuring independence[188]. - The Audit Committee, chaired by Eric Haskell, CPA, is responsible for selecting an independent public accountant and reviewing material accounting items affecting the consolidated financial statements[185]. - The Compensation Committee, led by Carol O'Donnell, oversees executive compensation and ensures compliance with NASDAQ's independent director requirements[186]. - Dr. Adeniyi Lawal, appointed as a Director in April 2024, brings extensive experience in renewable energy and has directed multi-million dollar projects funded by the Department of Energy[202]. - Eric Haskell's experience in acquisitions and divestitures provides valuable insights for the company's growth strategies[199]. Financial Management - The company has adopted a Stock Repurchase Plan allowing for open market purchases of up to $2,000,000 of its common stock[101]. - The company has not paid any cash dividends on its common stock since inception, indicating a focus on retaining earnings for business use[123]. - The company has no current plan to pay dividends, which may lead to investors losing their entire investment[105]. - The company's internal control over financial reporting must be effective to maintain investor confidence; any material weaknesses could negatively impact stock price and liquidity[84]. - Cash and cash equivalents increased by $3,067,000 to $5,202,000 at February 28, 2025, compared to $2,135,000 at February 29, 2024[157]. - Working capital increased by $1,378,000 to $13,501,000 at February 28, 2025, from $12,123,000 at February 29, 2024[156]. - Stockholders' equity increased by $1,513,000 from $16,279,000 at February 29, 2024, to $17,792,000 at February 28, 2025[158]. - Accounts receivable increased by $877,000 in fiscal 2025, primarily due to a large number of sales occurring in the fourth quarter[160]. - Interest and dividend income decreased by $41,000 to $489,000 for fiscal 2025 compared to $530,000 for the prior fiscal year[153]. - Income tax expense decreased to $261,000 for fiscal 2025 from $303,000 in the prior fiscal year, due to a decrease in income before income taxes[154]. Employee Relations - The company has maintained a good relationship with its 79 full-time and 10 part-time employees as of February 28, 2025[37]. - The company anticipates the need to hire additional qualified personnel to support business expansion, which may not be feasible[50]. Cybersecurity - The company is implementing cybersecurity measures to protect its operations and financial results[115]. Stock Market and Investor Relations - The market price of the company's common stock has been volatile, influenced by factors beyond its control[98]. - The company faces risks from potential activist shareholders that could disrupt its business and affect stock price[111].

Presentation Details - Sono-Tek Corporation will present at the Planet MicroCap Showcase: VEGAS 2025 on April 23, 2025[4] - The presentation will include an Investor Presentation attached as exhibit 99.1[4] Legal and Compliance - The report is not deemed "filed" under the Securities Exchange Act of 1934, thus limiting liability under Section 18[5] - The Chief Financial Officer, Stephen J. Bagley, signed the report on April 23, 2025[8]

Conference Call on Wednesday, May 28, 2025 at 11:00 am ET MILTON, N.Y., May 21, 2025 (GLOBE NEWSWIRE) -- Sono-Tek Corporation (NASDAQ: SOTK), the leading developer and manufacturer of ultrasonic coating systems, today announced that the Company will hold a conference call to discuss its fiscal fourth quarter and full year 2025 financial results, ended February 28, 2025, on Wednesday, May 28, 2025 at 11:00 am ET. The fourth quarter and full year FY 2025 financial results press release will be issued before t ...

Company Overview - Sono-Tek Corporation is a leading developer and manufacturer of ultrasonic coating systems, serving various industries including microelectronics, alternative energy, medical devices, and advanced industrial manufacturing [3][4]. - The company is recognized for its innovative technologies and proprietary know-how, which are pivotal in shaping industries and driving global innovation [3][7]. Upcoming Presentation - Sono-Tek will present at the Planet MicroCap Showcase: VEGAS 2025 on April 23, 2025, at 1:30 PM ET, with a Q&A session following the presentation [1][2]. - The presentation will be hosted by Dr. Christopher L. Coccio and Steve Harshbarger, providing an opportunity for investors to engage directly [2]. Product and Market Strategy - The company is transitioning its product line from R&D to high-volume production machines, which are expected to have significantly higher average selling prices, demonstrating market leadership and adaptability [5]. - Sono-Tek's solutions are designed to be environmentally friendly and efficient, leading to reductions in overspray, raw material, water, and energy usage, while improving process repeatability and reducing emissions [6]. Growth and Innovation - Sono-Tek's growth strategy focuses on leveraging its innovative technologies and global reach to enhance thin film coating technologies, aiming for better outcomes for customers' products and processes [7]. - The company is making significant inroads into the clean energy sector, with applications in next-gen solar cells, fuel cells, green hydrogen generation, and carbon capture [4].

Core Viewpoint - Sono-Tek Corporation has promoted Chris Cichetti to Chief Operating Officer (COO), reflecting the company's strategic focus on operational efficiency and innovation [1][4]. Company Overview - Sono-Tek Corporation is a global leader in ultrasonic spray coating technology, serving various industries such as electronics, medical devices, and alternative energy [6]. Leadership Background - Chris Cichetti joined Sono-Tek in 2005 as an Electrical Engineer and has held multiple key roles, including Senior Application Engineer and Vice President of Sales & Applications Engineering [2][3]. - He has been instrumental in establishing the Applications Engineering Department and enhancing the company's laboratory testing and project management capabilities [3]. New Responsibilities - As COO, Cichetti will oversee engineering, manufacturing, and IT operations, in addition to his current management of sales, marketing, service, and applications engineering [4]. Executive Confidence - CEO Steve Harshbarger expressed confidence in Cichetti's leadership abilities, highlighting his technical expertise and strategic thinking as vital for the company's growth and innovation [5].

Group 1: Earnings Performance - Sono-Tek Corporation reported quarterly earnings of $0.02 per share, matching the Zacks Consensus Estimate, but down from $0.04 per share a year ago [1] - The company posted revenues of $5.19 million for the quarter ended November 2024, exceeding the Zacks Consensus Estimate by 3%, but down from $5.69 million year-over-year [2] - Over the last four quarters, Sono-Tek has surpassed consensus EPS estimates only once [1] Group 2: Stock Performance and Outlook - Sono-Tek shares have declined approximately 2.1% since the beginning of the year, compared to a decline of 0.9% for the S&P 500 [3] - The company's earnings outlook is mixed, with a current Zacks Rank of 3 (Hold), indicating expected performance in line with the market [6] - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $5.05 million, and for the current fiscal year, it is $0.07 on revenues of $20.29 million [7] Group 3: Industry Context - The Electronics - Semiconductors industry, to which Sono-Tek belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Sono-Tek's stock performance [5]

Financial Performance - Total net sales for the nine months ended November 30, 2024, increased to $15,383,416, representing a growth of 3% compared to $14,932,157 for the same period in 2023[12] - Gross profit for the nine months ended November 30, 2024, was $7,313,783, a decrease of 2.5% from $7,503,809 in the prior year[12] - Operating income for the nine months ended November 30, 2024, was $721,923, down 39.5% from $1,194,764 in the same period of 2023[12] - Net income for the nine months ended November 30, 2024, was $945,700, a decrease of 26.4% compared to $1,284,848 for the same period in 2023[12] - For the three months ended November 30, 2024, net income was $274,178, a decrease from $690,169 in the same period of 2023, representing a decline of approximately 60.3%[13] - Basic earnings per share for the nine months ended November 30, 2024, was $0.06, compared to $0.08 for the same period in 2023[55] Cash and Assets - Cash and cash equivalents increased significantly to $8,098,750 as of November 30, 2024, from $2,134,786 at the end of February 2024[10] - Total assets rose to $24,336,362 as of November 30, 2024, compared to $23,132,265 as of February 29, 2024[10] - Total stockholders' equity increased to $17,400,774 as of November 30, 2024, up from $16,278,998 at the end of February 2024[10] - The company experienced a net increase in cash and cash equivalents of $5,963,964 for the nine months ended November 30, 2024, compared to a decrease of $372,670 in the prior year[20] - The balance of marketable securities decreased from $9,711,351 as of February 29, 2024, to $4,582,428 as of November 30, 2024, indicating a reduction in liquid assets[31] Revenue Recognition and Sales - The Company applies ASC 606 for revenue recognition, primarily recognizing revenue from short-term contracts with customers[40][41] - The Multi-Axis Coating Systems product line accounted for 53% of total revenue for the nine months ended November 30, 2024, generating $8,158,000, compared to $7,648,000 or 51% in the same period of 2023[47] - The Integrated Coating Systems product line generated $2,850,000 in revenue for the nine months ended November 30, 2024, representing 19% of total revenue[47] - For the nine months ended November 30, 2024, total revenue was $15,383,000, an increase of 3% compared to $14,932,000 for the same period in 2023[47] - The company recognized approximately $3,320,000 of cash deposits as revenue during the nine months ended November 30, 2024[46] Inventory and Costs - Research and product development costs for the nine months ended November 30, 2024, were $2,054,846, a decrease of 7.5% from $2,221,712 in the prior year[12] - Net inventories as of November 30, 2024, totaled $4,737,510, down from $5,221,980 at February 29, 2024[48] - The allowance for slow-moving inventory was recorded at $349,300 as of November 30, 2024, compared to $380,400 at February 29, 2024[48] - Inventory reserve adjustments were $32,524 for the nine months ended November 30, 2024, down from $41,475 in the previous year, indicating improved inventory management[20] Stock Options and Compensation - As of November 30, 2024, the Company had 212,202 stock options outstanding under the 2013 Stock Incentive Plan, with 193,139 options vested[49] - The company recognized approximately $176,000 in stock-based compensation expense for the nine months ended November 30, 2024, compared to $147,000 in 2023, reflecting an increase of approximately 19.9%[53] - The aggregate intrinsic value of the company's vested and exercisable options at November 30, 2024, was approximately $126,000[54] - The company granted options to acquire 134,657 shares to employees during the nine months ended November 30, 2024, with a weighted average grant date fair value of $2.54 per share[52] Foreign Sales - Sales to foreign customers accounted for approximately $5,974,000, or 39% of total revenues for the nine months ended November 30, 2024, compared to 40% in 2023[59] - Export sales to foreign customers for the nine months ended November 30, 2024, totaled $5,974,000, accounting for approximately 39% of total revenues[59]

Financial Performance - Third quarter fiscal 2025 net sales were $5,190,595, a decrease of 9% compared to $5,690,022 in the same quarter of fiscal 2024[3] - Revenue for the first nine months of fiscal 2025 increased by 3% year over year to $15.4 million, compared to $14.9 million[3] - Net income for the third quarter of fiscal 2025 was $274,000, a decrease of 60% from $690,000 in the prior year[17] - Net income for the nine months ended November 30, 2024, was $945,700, down from $1,284,848 in the prior year, reflecting a decline of 26%[31] - Operating income decreased 73% to $197,637 compared to $720,522 in the same quarter last year[3] - Operating income for the nine months ended November 30, 2024, decreased to $721,923 from $1,194,764 in the same period of 2023[31] - Gross profit margin for the third quarter of fiscal 2025 declined to 45%, down from 51% in the prior year[3] - Gross profit for the nine months ended November 30, 2024, was $7,313,783, a decrease of 3% from $7,503,809 in the prior year[31] - The company reported a basic earnings per share of $0.06 for the nine months ended November 30, 2024, down from $0.08 in the same period of 2023[31] Market Performance - Sales to the Alternative/Clean Energy market grew 42% to $3.0 million, driven by customers transitioning to production scale systems[3] - Sales in the Alternative Energy market increased by 42% to $2,959,000 for the three months ended November 30, 2024, compared to $2,083,000 in 2023[34] - Sales in the Electronics/Microelectronics market decreased by 26% to $1,016,000 for the three months ended November 30, 2024, compared to $1,374,000 in 2023[34] - Multi-Axis Coating systems sales increased by 20% to $3.56 million in the third quarter of fiscal 2025[12] Financial Position - Backlog at the end of the third quarter of fiscal 2025 was strong at $10.6 million, slightly down from $10.7 million at the end of the third quarter of fiscal 2024[6] - Cash, cash equivalents, and marketable securities totaled $12.7 million with no outstanding debt as of November 30, 2024[21] - Total current assets as of November 30, 2024, were $19,821,290, an increase from $18,746,566 as of February 29, 2024[29] - Total stockholders' equity increased to $17,400,774 as of November 30, 2024, from $16,278,998 as of February 29, 2024[29] Guidance and Projections - Guidance for fiscal year 2025 projects revenue of over $20 million with continued profitability[2] Research and Development - Research and product development costs for the nine months ended November 30, 2024, were $2,054,846, a decrease of 7% from $2,221,712 in the same period of 2023[31]

Core Insights - Sono-Tek Corporation reported its third consecutive quarter of revenue exceeding $5 million, with a year-over-year revenue growth of 3% for the first nine months of fiscal year 2025 [1][2][4] - The company maintains a strong backlog of $10.6 million, indicating robust future revenue potential [1][12] - Guidance for fiscal year 2025 projects revenue to exceed $20 million with continued profitability [2][4] Financial Performance - For the third quarter of fiscal 2025, net sales were $5.19 million, a decrease of 9% compared to $5.69 million in the same quarter of fiscal 2024 [5][8] - Gross profit for the third quarter was $2.34 million, down 20% from $2.93 million in the prior year, resulting in a gross profit margin of 45% [5][13] - Operating income fell 73% to $198,000, with an operating margin of 4%, compared to 13% in the previous year [5][16] - Net income decreased by 60% to $274,000, reflecting the decline in revenue and gross profit [5][17] Market and Product Insights - Sales to the Alternative/Clean Energy market grew by 42% to $3 million, driven by customer transitions from R&D systems to production-scale systems with higher average selling prices (ASPs) [7][8] - Multi-Axis Coating systems sales increased by 20% to $3.56 million, contributing significantly to revenue [9][30] - Sales in the Electronics, Medical, and Industrial markets saw declines of 26%, 33%, and 59% respectively, indicating challenges in these sectors [10][31] Geographic Sales Performance - Approximately 54% of sales were to the U.S. and Canada, down from 60% in the prior year, with a 17% decrease in sales to this region [11][33] - Sales in the Asia Pacific region increased by 64%, while EMEA sales decreased by 35% [11][33] - Latin American sales surged by 165%, attributed to a significant order in the medical device sector [11][33] Balance Sheet and Cash Flow - As of November 30, 2024, the company had $12.7 million in cash and cash equivalents, with no outstanding debt [21] - Total stockholders' equity stood at $17.4 million, reflecting a solid financial position [21]