Sono-Tek (US:SOTK)2025-10-14 12:14Financial Performance - Total net sales for the six months ended August 31, 2025, were $10,295,469, a 1.0% increase from $10,192,820 in the same period of 2024[12] - Gross profit for the six months ended August 31, 2025, was $5,254,251, compared to $4,970,584 for the same period in 2024, reflecting a gross margin increase[12] - Operating income increased to $904,522 for the six months ended August 31, 2025, up from $524,286 in the prior year, representing a 72.2% increase[12] - Net income for the six months ended August 31, 2025, was $908,678, a 35.3% increase from $671,522 in the same period of 2024[12] - Total revenues for the six months ended August 31, 2025, were $10,295,000, a slight increase from $10,193,000 in the same period of 2024[60] - Net income for the six months ended August 31, 2025, was $908,000, compared to $672,000 for the same period in 2024, representing a 35% increase[60] Cash and Assets - Cash and cash equivalents decreased to $3,832,133 as of August 31, 2025, down from $5,202,361 at the end of February 2025[10] - Total current assets increased to $19,121,678 as of August 31, 2025, compared to $18,988,465 at the end of February 2025[10] - Total stockholders' equity rose to $18,695,669 as of August 31, 2025, up from $17,792,195 at the end of February 2025[10] - As of August 31, 2025, the Company reported cash and cash equivalents of $1,653,000 exceeding the insured limit by the Federal Deposit Insurance Corporation[22] - The fair value of marketable securities was $6,736,469 as of August 31, 2025, compared to $6,727,678 as of February 28, 2025, indicating a slight increase[28] Expenses and Costs - Research and product development costs for the six months ended August 31, 2025, were $1,295,748, a decrease from $1,427,303 in the same period of 2024[12] - The total cost of goods and services for the six months ended August 31, 2025, was $5,041,000, compared to $5,222,000 in the same period of 2024, showing a decrease of approximately 3.5%[60] - Total operating expenses for the six months ended August 31, 2025, were $4,350,000, compared to $4,446,000 for the same period in 2024[60] Inventory and Revenue Recognition - Inventories totaled $4,152,027 as of August 31, 2025, down from $4,474,401 as of February 28, 2025[44] - The Company recorded approximately $67,000 in additional allowances for slow-moving inventory during the six months ended August 31, 2025[46] - The Company recognized $1,859,000 in revenue from cash deposits during the six months ended August 31, 2025[42] - The Company’s performance obligations are primarily satisfied upon the transfer of control of manufactured equipment to customers[40] - As of August 31, 2025, the Company had contract liabilities of approximately $1,907,000 in cash deposits[42] Customer and Market Information - Sales to foreign customers accounted for approximately $4,033,000, or 39% of total revenues for the first half of fiscal 2026, compared to 35% in fiscal 2025[55] - The Company had one customer that accounted for 43% of total sales during the first half of fiscal 2026, indicating a high customer concentration risk[57] Stock Options and Compensation - The Company granted options to acquire 140,277 shares to employees and 35,088 shares to non-employee directors during the six months ended August 31, 2025, with exercise prices ranging from $3.25 to $3.77[49] - For the six months ended August 31, 2025, the Company recognized $146,000 in stock-based compensation expense, compared to $97,000 for the same period in 2024, reflecting a 50% increase[50] - The aggregate intrinsic value of the Company's vested and exercisable options at August 31, 2025, was approximately $30,000[51] - The weighted average Black-Scholes assumptions for options granted included a risk-free interest rate of 3.81% to 4.32% and expected volatility of 54.49% to 56.95%[50] Credit and Financing - The Company has a $1,500,000 revolving line of credit, with $106,000 utilized for Letters of Credit as of August 31, 2025, leaving an unused portion of $1,394,000[53] Legislative Impact - The One Big Beautiful Bill Act, signed into law on July 4, 2025, reinstated 100% bonus depreciation for qualified property, impacting future tax calculations[30] Company Operations - The company continues to focus on the design and manufacture of ultrasonic coating systems for various markets, including microelectronics and medical applications[20] - The company is a leader in designing and manufacturing ultrasonic coating systems for various markets, including microelectronics and medical sectors, focusing on custom-engineered solutions[20]