Core Insights - Sono-Tek Corporation reported its fiscal third quarter and nine-month results for 2026, achieving its seventh consecutive quarter of revenue exceeding $5 million, driven by strong demand in the medical market and high-average selling price (ASP) production systems [1][2][3] - The company experienced a gross margin expansion to 50% for the quarter and 51% year-to-date, reflecting effective cost management and a focus on higher-ASP systems [2][3] - Net income for the third quarter increased by 24% to $340,000, while net income for the first nine months rose by 32% to $1.25 million [3][6] Financial Performance - Third quarter net sales were $5.0 million, a decrease of 4% from $5.2 million in the prior-year period [3][4] - Gross profit for the quarter increased by 7% year-over-year to $2.5 million, with gross margin improving from 45% to 50% [3][4] - Operating income surged by 61% to $319,000, indicating improved operational efficiency [3][4] - For the first nine months, net sales totaled $15.3 million, essentially flat compared to the previous year [3][6] Backlog and Guidance - The company's backlog reached a record $12.3 million, reflecting a 16% year-over-year increase, indicating strong customer confidence [1][3] - Sono-Tek reiterated its full-year guidance for FY 2026, anticipating modest revenue growth despite market adjustments related to clean energy initiatives [3][6] Product and Market Highlights - In-Line Coating Systems revenue increased by 126%, driven by shipments to a major solar energy customer [7] - Medical sales rose by 27%, supported by strong demand for balloon catheters, stents, and diagnostic devices [8] - Alternative Energy sales declined by 35% due to reduced U.S. electrolysis activity following policy changes [8][15] Geographic Performance - U.S. and Canada sales increased by 21% in the quarter, supported by high-ASP integrated coating systems [8][20] - Asia Pacific sales declined by 34% in the quarter, while Latin America sales dropped by 50% due to slower activity [8][20] - EMEA sales decreased by 26%, primarily due to softer demand in advanced energy markets [8][20]

Seventh Consecutive Quarter of Revenue Over $5 Million Driven by Continued Strength in Medical Market and High-ASP Production Systems Gross Margin Expands to 50% in the Quarter and 51% Year-to-Date Third Quarter and Nine-Month Net Income Increased 24% and 32% Respectively Backlog Reaches Record $12.3 Million Reflecting Continued Order Momentum Reiterates Full Year FY 2026 Guidance Anticipating Modest Revenue Growth MILTON, N.Y., Jan. 13, 2026 (GLOBE NEWSWIRE) -- Sono-Tek Corporation (Nasdaq: SOTK), the lead ...

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]