Sono-Tek (SOTK) - 2026 Q3 - Quarterly Results

Financial Performance - Net sales for the third quarter were $5.0 million, a decrease of 4% from $5.2 million in the prior-year period, marking the seventh consecutive quarter with revenue exceeding $5 million [4]. - Gross profit increased by 7% year over year to $2.5 million, with gross margin expanding to 50%, up from 45% in the prior-year quarter [4]. - Net income for the third quarter increased by 24% to $340 thousand, or $0.02 per diluted share, compared to $274 thousand, or $0.02 per diluted share, in the prior-year quarter [4]. - For the first nine months, net sales totaled $15.3 million, essentially flat year over year, while gross profit increased by 6% to $7.8 million, with gross margin expanding to 51% from 48% in the prior-year period [4]. - Operating income for the first nine months increased by 69% to $1.22 million, with net income rising by 32% to $1.25 million, or $0.08 per diluted share [4]. - Net sales for the nine months ended November 30, 2025, were $15,299,839, a decrease of 1% compared to $15,383,416 for the same period in 2024 [23]. - Gross profit increased to $7,766,492 for the nine months ended November 30, 2025, compared to $7,313,783 in 2024, reflecting a gross margin improvement [23]. - Operating income rose significantly to $1,223,494 for the nine months ended November 30, 2025, compared to $721,923 in 2024, indicating a 69% increase [23]. - Net income for the nine months ended November 30, 2025, was $1,248,637, up from $945,700 in 2024, representing a 32% increase [23]. - Basic earnings per share increased to $0.08 for the nine months ended November 30, 2025, compared to $0.06 in 2024 [23]. - Total operating expenses were $6,542,998 for the nine months ended November 30, 2025, slightly down from $6,591,860 in 2024 [23]. Market Performance - Total backlog reached a record $12.26 million, increasing 16% year over year and 9% sequentially, reflecting continued strength in customer order activity [8]. - Demand for advanced ultrasonic coating platforms remains strong, particularly in the medical device market, with medical sales increasing by 27% [11]. - In-Line Coating Systems revenue surged by 2,177%, driven by shipments of high-ASP production systems to a major solar energy customer [11]. - The company anticipates modest revenue growth for the full fiscal year, balancing market adjustments with positive demand in the medical device market [8]. - The Electronics/Microelectronics market segment grew by 27% in the three months ended November 30, 2025, totaling $1,287,000 compared to $1,016,000 in 2024 [26]. - U.S. & Canada sales increased by 21% in the three months ended November 30, 2025, reaching $3,415,000 compared to $2,823,000 in 2024 [27]. - The company reported a decrease in sales from the Alternative Energy market segment, which fell by 35% in the three months ended November 30, 2025, totaling $1,912,000 compared to $2,959,000 in 2024 [26]. Financial Position - The company ended the quarter with $11.7 million in cash and no outstanding debt, indicating a strong balance sheet [8]. - In the product sales breakdown, In-Line Coating Systems saw a dramatic increase of 2,177% in the three months ended November 30, 2025, reaching $1,844,000 compared to $81,000 in 2024 [25].