Sono-Tek (SOTK) - 2025 Q3 - Quarterly Report

Financial Performance - Total net sales for the nine months ended November 30, 2024, increased to $15,383,416, representing a growth of 3$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$7,503,809 in the prior year[12] - Operating income for the nine months ended November 30, 2024, was $721,923, down 39.5$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$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$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$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$5,974,000, accounting for approximately 39% of total revenues[59]