false 0000806172 SONO TEK CORP 0000806172 2024-10-15 2024-10-15 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 15, 2024

 

Sono-Tek Corporation

(Exact name of registrant as specified in its charter)

 

Commission File Number: 000-16035

 

New York   14-1568099
(State of Incorporation)   (I.R.S. Employer ID No.)
     
2012 Route 9W, Milton, New York   12547
(Address of Principal Executive Offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (845) 795-2020

 

Check appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading
Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value per share SOTK NASDAQ

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

Item 2.02: Results of Operations and Financial Condition.

Item 7.01: Regulation FD Disclosure

 

On October 15, 2024, Sono-Tek Corporation issued a press release regarding its financial results for the quarter ended August 31, 2024 in the form attached as exhibit 99.1.

 

The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities under such section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.

 

Item 9.01: Financial Statements and Exhibits.

 

(d) Exhibits

 

99.1       Press Release dated October 15, 2024.

 

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

SONO-TEK CORPORATION

 

By: /s/ Stephen J. Bagley

Stephen J. Bagley

Chief Financial Officer

October 15, 2024

Exhibit 99.1

 

Sono-Tek Reports Fiscal Second Quarter and First Half 2025 Financial Results, Record Backlog and Provides Revenue Guidance

 

- Q2 Sequential Revenue Growth Meets Quarterly Guidance of 2%-5%

 

-Record Equipment and Service Backlog of $11.7 Million-

 

- First Half Revenue Growth of 10% YOY, First Half Net Income Growth of 13% YOY-

 

- Expects Continued Revenue Growth for Full Fiscal Year 2025-

 

-Conference Call Today at 10:00 am ET-

 

MILTON, N.Y., October 15, 2024 – Sono-Tek Corporation (Nasdaq: SOTK), the leading developer and manufacturer of ultrasonic coating systems, today reported financial results for the second quarter and first half of fiscal year 2025, ended August 31, 2024.

 

Second Quarter and First Half Fiscal 2025 Highlights

 

·Net Sales for the quarter decreased by 8% or $477,000 to $5,162,000 compared to the second quarter of fiscal 2024, which saw elevated sales due to the resolution of supply chain challenges, which had previously impacted the Company’s operations. Second quarter revenue increased 3% sequentially to $5.2 million, meeting quarterly guidance of 2%-5% growth, driven by strong shipments to the clean energy and electronics markets.
·Record first half fiscal 2025 revenue increased by 10% year over year to $10.2 million compared to $9.2 million.
·First half fiscal 2025 gross profit increased 9% year over year to $5.0 million compared with $4.6 million.
·First half fiscal 2025 net income increased 13% year over year to $672 thousand, or $0.04 per share, compared with $595 thousand, or $0.04 per share.
·As of August 31, 2024, cash, cash equivalents and marketable securities totaled $11.6 million with no outstanding debt.

Backlog and Expected Revenue Growth for Fiscal Year 2025

 

·Total equipment and service-related backlog increased 7% year over year and 50% sequentially to a record $11.7 million, compared to $10.9 million at the end of Q2 FY2024, and $7.8 million at the end of Q1 FY2025.
·Continued revenue growth is expected for the full fiscal year 2025, ending February 28, 2025.

 

 

 

 

“Sono-Tek continued its fiscal year with solid sales momentum and profitability and is looking forward to a strong second half with increasing orders from the green energy sector combined with strength in the semiconductor/electronics markets. Additionally, we are aggressively moving forward on full production systems with the potential for multiple repeat orders this year,” according to Dr. Christopher L Coccio, Executive Chairman.

 

Steve Harshbarger, CEO & President of Sono-Tek, remarked, “Our growth strategies are continuing to gain momentum as our customers move from R&D and pilot machines to our complex large-scale production systems with significantly higher Average Selling Prices (ASP). We are excited by our broadened addressable market and believe we can continue to grow sales on a larger scale. Our move into the clean energy sector is showing transformative results in next-gen solar cells, fuel cells, green hydrogen generation, and carbon capture applications. Additionally, we remain excited about our prospects for attracting additional high-volume, high-ASP production system orders in fiscal year 2025. With strong sales momentum, continued profitability and record backlog bolstered by our solid balance sheet, we remain focused on continued execution and look forward to building on our record first half revenues.”

 

Second Quarter Fiscal 2025 Results

(Narrative compares with prior-year period unless otherwise noted) ($ in thousands)

 

   Three Months Ended August 31,   Change 
   2024   2023   $   % 
Net Sales  $5,162   $5,639    (477)   (8%)
Gross Profit  $2,516   $2,801    (285)   (10%)
     Gross Margin   49%    50%           
                     
Operating Income  $286   $566    (280)   (49%)
     Operating Margin   6%    10%           
                     
Net Income  $341   $541    (200)   (37%)
     Net Margin   7%    10%           

 

Second Quarter Fiscal 2025 Product and Market Sales Overview

 

Net Sales for the quarter decreased by 8% or $477,000 to $5,162,000 compared to the second quarter of fiscal 2024 which reflected a strong recovery from supply chain constraints.  Net sales increased 3% sequentially to $5.2 million in the second quarter of fiscal 2025. The increase was primarily driven by increased demand for Integrated Coating systems which are commonly used for high volume production platforms in the clean energy sector.

 

·Integrated Coating System sales accelerated significantly from growing market acceptance of the new PLC based platform systems developed under Sono-Tek’s Altair program. During the second quarter, two high ASP systems using the Altair developed capabilities shipped to a large solar company valued at $1,460,000.

 

 

 

·Fluxing system sales dipped this quarter with softening activity from the printed circuit board sector, although quoting activity remains strong for these products with recent significant distributor changes.

 

·OEM sales dipped as well due to many OEM partners having previously built-up excess inventory to combat supply chain concerns and partially due to a reduction in sales of our China based OEM partners products due to China’s struggling economy.

Sales to the Alternative/Clean Energy market grew 37% and were positively impacted by significant government investments and a growing number of Sono-Tek’s customers transitioning from R&D systems to production scale systems that carry much higher ASPs. Sono-Tek platforms are used in the manufacturing of advanced solar cells and for critical membranes used in carbon capture, green hydrogen generation and fuel cell applications.

 

Electronics market sales increased 51% influenced by the shipment of two systems of a newly developed coating system with wafer shuttling capabilities for the semiconductor market.

 

Medical sales were down 77%, primarily driven by lower demand for stent and balloon coating systems. However, based on current backlog and order activity, the Company expects balloon coating system sales to recover in the second half of the year. In contrast, stent coating system sales are likely to remain subdued as several customers in this market have reported slower business activity.

 

Industrial sales declined by 30% partially influenced by a float glass coating system that shipped in the prior fiscal year and did not repeat in the current fiscal year.

 

Second Quarter FY 2025 Financial Overview

 

The three-month periods ended August 31, 2024 and 2023 are referred to as the second quarter of fiscal 2025 and fiscal 2024, respectively.

 

Revenue for the second quarter of fiscal 2025 was $5.2 million, compared to $5.6 million for the second quarter of fiscal 2024, in line with quarterly guidance and reflecting elevated sales in the second quarter of fiscal 2024 as supply chain issues alleviated.

 

Gross profit was $2.5 million, compared with $2.8 million for the second quarter of fiscal 2024. The gross profit percentage was 49% compared with 50% for the prior year period, primarily due to product mix, inclusive of a decrease in OEM systems sales which typically have high profit margins, and the reallocation and recharacterization of specific labor expenses from the engineering department to cost of goods sold that started in the fourth quarter of fiscal year 2024 as an outcome of the completion of several successful R&D endeavors. During the quarter, the decrease in gross profit was partially offset by favorable warranty expense reserves.

 

Operating expenses were $2.2 million for the second quarter of each fiscal 2025 and 2024.

 

 

 

 

Research and product development costs decreased 12% year over year to $696 thousand due to a decrease in salary associated with the departure of a senior engineer, a decrease in research and development materials and the reallocation and recharacterization of specific labor expenses from the engineering department to cost of goods sold that started in the fourth quarter of fiscal year 2024 as an outcome of the completion of several successful R&D endeavors.

 

Marketing and selling expenses increased 5% year over year to $988 thousand primarily due to increases in commissions, travel and trade show expenses, partially offset by a decrease in salary expenses. General and Administrative expenses increased 9% year over year to $546 thousand primarily due to increased salaries, legal and audit fees and other corporate expenses.

 

Operating income was $286 thousand compared to $566 thousand in the prior year period, primarily due to the decrease in revenue and gross profit. Operating margin for the quarter was 6% compared to 10% in the prior year period.

 

Net income was $341 thousand, or $0.02 per share, compared with $541 thousand, or $0.03 per share, for the second quarter of fiscal 2024, primarily due to a decrease in gross profit.

 

Diluted weighted average shares outstanding were 15,768,251 million compared to 15,773,665 for the prior year period.

 

First Half Fiscal Year 2025 Overview

(Narrative compares with prior-year period unless otherwise noted) ($ in thousands)

 

   Six Months Ended August 31,   Change 
   2024   2023   $   % 
Net Sales  $10,193   $9,242    951    10% 
Gross Profit  $4,971   $4,578    393    9% 
     Gross Margin   49%    50%           
                     
Operating Income  $524   $474    50    11% 
     Operating Margin   5%    5%           
                     
Net Income  $672   $595    77    13% 
     Net Margin   7%    6%           

 

 

Total sales increased by 10% to $10.2 million in the first half of fiscal 2025 compared to $9.2 million for the first half of fiscal 2024, strongly impacted by increased sales from the Alternative Energy Market due to the shipment of three high ASP systems to a large solar company totaling $2,190,000.

 

Gross profit increased 9% to $5.0 million for the first half of fiscal 2025 compared with $4.6 million in the first half of fiscal 2024. The gross profit margin was 49% compared with 50% for the prior year period.

 

Operating income increased 11% to $524 thousand compared with $474 for the first half of fiscal 2024. Operating margin for the first half of fiscal 2024 was nearly even at 5% compared with 5% in the first half of fiscal 2024.

 

 

 

Net income increased 13% to $672 thousand, or $0.04 per share, for the first half of fiscal 2025 compared with $595 thousand, or $0.04 per share, for the first half of fiscal 2024.

 

Diluted weighted average shares outstanding were 15,771,472 compared to 15,775,032 for the prior year period.

 

Balance Sheet and Cash Flow Overview

At August 31, 2024, cash, cash equivalents and marketable securities totaled $11.6 million, with no debt, and stockholders’ equity was $17.0 million.

Capital expenditures in the first half of fiscal 2025 were $191,000, which were invested in ongoing upgrades to the Sono-Tek’s manufacturing facilities. Sono-Tek anticipates capital expenditures will total approximately $460,000 in fiscal year 2025.

Conference Call Information

Sono-Tek will hold a conference call to discuss its second quarter and first half of fiscal year 2025 financial results today, Tuesday, October 15, 2024 at 10:00 am ET. To participate, please call 1-844-481-2752 at least 10 minutes prior to the start of the call and ask to join the Sono-Tek call.

 

A simultaneous webcast of the call may be accessed through the Company's website, Events & Presentations | Sono-Tek or at https://event.choruscall.com/mediaframe/webcast.html?webcastid=Es5mXgrt

 

A replay of the call will be available at 1-877-344-7529, access code # 4946283, through October 22, 2024. A replay of the call will also be available on the Company’s website for one year at www.sono-tek.com.

 

About Sono-Tek

Sono-Tek Corporation is a global leader in the design and manufacture of ultrasonic coating systems that are shaping industries and driving innovation worldwide.  Our ultrasonic coating systems are used to apply thin films onto parts used in diverse industries including microelectronics, alternative energy, medical devices, advanced industrial manufacturing, and research and development sectors worldwide.  Sono-Tek's inroads into the clean energy sector are showing transformative results in next-gen solar cells, fuel cells, green hydrogen generation, and carbon capture applications. 

 

Our product line is rapidly evolving, transitioning from R&D to high-volume production machines with significantly higher average selling prices, showcasing our market leadership and adaptability. Our comprehensive suite of thin film coating solutions and application consulting services are expected to generate unparalleled results for our clients and help some of the world's most promising companies achieve technological breakthroughs and bring them to the market. The Company strategically delivers its products to customers through a network of direct sales personnel, carefully chosen independent distributors, and experienced sales representatives, ensuring efficient market reach across diverse sectors around the globe.

 

 

 

 

The Company’s solutions are environmentally friendly, efficient and highly reliable, and enable dramatic reductions in overspray, savings in raw material, water and energy usage and provide improved process repeatability, transfer efficiency, high uniformity and reduced emissions.

 

Sono-Tek’s growth strategy is focused on leveraging its innovative technologies, proprietary know-how, unique talent and experience, and global reach to further develop thin film coating technologies that enable better outcomes for its customers’ products and processes. For further information, visit www.sono-tek.com.

 

 

Safe Harbor Statement

This news release contains forward looking statements regarding future events and the future performance of Sono-Tek Corporation that involve risks and uncertainties that could cause actual results to differ materially. These “forward-looking statements’ are based on currently available competitive, financial and economic data and our operating plans. They are inherently uncertain, and investors must recognize that events could turn out to be significantly different from our expectations and could cause actual results to differ materially. These factors include, among other considerations, general economic and business conditions, including political, regulatory, tax, competitive and technological developments affecting our operations or the demand for our products; inflationary and supply chain pressures; continued private and public funding for the clean energy sector and continued strong demand for Sono-Tek’s suite of thin film coating solutions and application consulting services in the clean energy and other markets; maintenance of order backlog; the imposition of tariffs; timely development and market acceptance of new products and continued customer validation of our coating technologies; adequacy of financing; capacity additions, the ability to enforce patents; maintenance of operating leverage; consummation of order proposals; completion of large orders on schedule and on budget; successful transition from primarily selling ultrasonic nozzles and components to a more complex business providing complete machine solutions and higher value subsystems; and realization of quarterly and annual revenues within the forecasted range of sales guidance. We undertake no obligation to update any forward-looking statement.

 

For more information:

 

Sono-Tek Corp.

Stephen J. Bagley

Chief Financial Officer

Ph: (845) 795-2020

info@sono-tek.com

 

Investor Relations

Kirin Smith

PCG Advisory, Inc.

ksmith@pcgadvisory.com

 

 

 

-FINANCIAL TABLES FOLLOW -

 

 

 

SONO-TEK CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

   August 31,
2024
   February 29,
2024
 
   (Unaudited)     
ASSETS          
           
Current Assets:          
Cash and cash equivalents  $5,852,801   $2,134,786 
Marketable securities   5,766,176    9,711,351 
Accounts receivable (less allowance of $12,225)   1,879,464    1,470,711 
Inventories   4,829,901    5,221,980 
Prepaid expenses and other current assets   174,225    207,738 
Total current assets   18,502,567    18,746,566 
           
Land   250,000    250,000 
Buildings, equipment, furnishings and leasehold improvements, net   2,691,523    2,832,156 
Intangible assets, net   42,476    47,566 
Deferred tax asset   1,429,271    1,255,977 
           
TOTAL ASSETS  $22,915,837   $23,132,265 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current Liabilities:          
Accounts payable  $691,000   $1,049,742 
Accrued expenses   1,543,869    1,739,478 
Customer deposits   3,225,273    3,419,706 
Income taxes payable   96,395    414,807 
Total current liabilities   5,556,537    6,623,733 
           
Deferred tax liability   311,750    229,534 
Total liabilities   5,868,287    6,853,267 
           
Stockholders’ Equity          
Common stock, $.01 par value; 25,000,000 shares authorized, 15,751,153 and 15,750,880 shares issued and outstanding as of August 31, 2024 and February 29, 2024, respectively   157,512    157,509 
Additional paid-in capital   9,867,414    9,770,387 
Accumulated earnings   7,022,624    6,351,102 
Total stockholders’ equity   17,047,550    16,278,998 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $22,915,837   $23,132,265 

 

See notes to unaudited condensed consolidated financial statements.

 

 

 

SONO-TEK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

   Six Months Ended
August 31,
   Three Months Ended
August 31,
 
   2024   2023   2024   2023 
                 
Net Sales  $10,192,820   $9,242,135   $5,161,782   $5,639,117 
Cost of Goods Sold   5,222,236    4,664,335    2,645,685    2,838,549 
Gross Profit   4,970,584    4,577,800    2,516,097    2,800,568 
                     
Operating Expenses                    
Research and product development costs   1,427,303    1,445,699    695,873    789,261 
Marketing and selling expenses   1,885,608    1,745,310    988,418    944,526 
General and administrative costs   1,133,387    912,549    545,816    500,923 
Total Operating Expenses   4,446,298    4,103,558    2,230,107    2,234,710 
                     
Operating Income   524,286    474,242    285,990    565,858 
                     
Interest and Dividend Income   227,730    230,283    85,076    124,293 
Net unrealized gain/(loss) on marketable securities   53,941    10,855    43,580    (6,803)
                     
Income Before Income Taxes   805,957    715,380    414,646    683,348 
                     
Income Tax Expense   134,435    120,701    73,961    142,075 
                     
Net Income  $671,522   $594,679   $340,685   $541,273 
                     
Basic Earnings Per Share  $0.04   $0.04   $0.02   $0.03 
                     
Diluted Earnings Per Share  $0.04   $0.04   $0.02   $0.03 
                     
Weighted Average Shares - Basic   15,750,895    15,742,571    15,750,910    15,743,069 
Weighted Average Shares - Diluted   15,771,472    15,775,032    15,768,251    15,773,665 

 

See notes to unaudited condensed consolidated financial statements.

 

 

 

SONO-TEK CORPORATION

PRODUCT, MARKET, AND GEOGRAPHIC SALES

(Unaudited)

 

 

Product Sales

   Three Months Ended
August 31,
   Change   Six Months Ended
August 31,
   Change 
   2024   2023   $   %   2024   2023   $   % 
Fluxing Systems  $119,000   $204,000    (85,000)   (42%)  $253,000   $440,000    (187,000)   (43%)
Integrated Coating Systems   2,023,000    853,000    1,170,000    137%    2,770,000    1,162,000    1,608,000    138% 
Multi-Axis Coating Systems   1,931,000    2,923,000    (992,000)   (34%)   4,595,000    4,686,000    (91,000)   (2%)
OEM Systems   205,000    535,000    (330,000)   (62%)   537,000    810,000    (273,000)   (34%)
Spare Parts, Services and Other   884,000    1,124,000    (240,000)   (21%)   2,038,000    2,144,000    (106,000)   (5%)
TOTAL  $5,162,000   $5,639,000    (477,000)   (8%)  $10,193,000   $9,242,000    951,000    10% 

 

Market Sales

   Three Months Ended
August 31,
   Change   Six Months Ended
August 31,
   Change 
   2024   2023   $   %   2024   2023   $   % 
Electronics/Microelectronics  $1,477,000   $976,000    501,000    51%   $3,045,000   $2,351,000    694,000    30% 
Medical   402,000    1,728,000    (1,326,000)   (77%)   1,259,000    2,111,000    (852,000)   (40%)
Alternative/Clean Energy   2,498,000    1,819,000    679,000    37%    4,780,000    2,652,000    2,128,000    80% 
Emerging R&D and Other   30,000    37,000    (7,000)   (19%)   41,000    163,000    (122,000)   (75%)
Industrial   755,000    1,079,000    (324,000)   (30%)   1,068,000    1,965,000    (897,000)   (46%)
TOTAL  $5,162,000   $5,639,000    (477,000)   (8%)  $10,193,000   $9,242,000    951,000    10% 

 

Geographic Sales

 

   Three Months Ended
August 31,
   Change   Six Months Ended
August 31,
   Change 
   2024   2023   $   %   2024   2023   $   % 
U.S. & Canada  $3,495,000   $3,199,000    296,000    9%   $6,587,000   $5,567,000    1,020,000    18% 
Asia Pacific (APAC)   368,000    538,000    (170,000)   (32%)   880,000    1,109,000    (229,000)   (21%)
Europe, Middle East, Asia (EMEA)   1,136,000    1,155,000    (19,000)   (2%)   2,381,000    1,581,000    800,000    51% 
Latin America   163,000    747,000    (584,000)   (78%)   345,000    985,000    (640,000)   (65%)
TOTAL  $5,162,000   $5,639,000    (477,000)   (8%)  $10,193,000   $9,242,000    951,000    10% 

 

 

v3.24.3
Cover
Oct. 15, 2024
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Oct. 15, 2024
Entity File Number 000-16035
Entity Registrant Name SONO TEK CORP
Entity Central Index Key 0000806172
Entity Tax Identification Number 14-1568099
Entity Incorporation, State or Country Code NY
Entity Address, Address Line One 2012 Route 9W
Entity Address, City or Town Milton
Entity Address, State or Province NY
Entity Address, Postal Zip Code 12547
City Area Code (845)
Local Phone Number 795-2020
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 par value per share
Trading Symbol SOTK
Security Exchange Name NASDAQ
Entity Emerging Growth Company false

Sono Tek (NASDAQ:SOTK)
過去 株価チャート
から 11 2024 まで 12 2024 Sono Tekのチャートをもっと見るにはこちらをクリック
Sono Tek (NASDAQ:SOTK)
過去 株価チャート
から 12 2023 まで 12 2024 Sono Tekのチャートをもっと見るにはこちらをクリック