Oct 14, 2026, 7:10 AM ETTechnology

Sono-Tek — Fiscal 2027 First Half Earnings Summary

SOTKSONO TEK CORP

Financial Performance

First half net sales increased 6% to $10.89 million from $10.30 million in the prior-year period; second quarter net sales increased 1% to $5.23 million from $5.16 million.
First half gross profit increased 14% to $5.98 million with gross margin expanding to 55% from 51%; second quarter gross profit increased 7% to $2.77 million with gross margin expanding to 53% from 50%, driven by favorable product and geographic mix.
First half operating income increased 41% to $1.28 million from $905,000; second quarter operating income decreased to $382,000 from $421,000 due to higher operating expenses offsetting gross profit gains.
First half net income increased 22% to $1.11 million from $909,000; second quarter net income decreased to $366,000 ($0.02 per diluted share) from $424,000 ($0.03 per diluted share).
Cash, cash equivalents, and marketable securities totaled $17.7 million at August 31, 2026, compared to $14.8 million at February 28, 2026; the company has no outstanding debt.
Accounts receivable decreased to $1.23 million at August 31, 2026, from $3.35 million at February 28, 2026.
Customer deposits decreased to $2.32 million at August 31, 2026, from $3.07 million at February 28, 2026.

Reiterated full fiscal year 2027 guidance for flat to modest revenue growth, reflecting the timing of several large orders, growing medical device demand, and higher value production systems.
Received three subsequent orders totaling approximately $7.19 million expected to ship during fiscal 2028, significantly increasing revenue visibility for that period.
Management anticipates increased quarter-to-quarter variability as higher-value production platform orders become a larger portion of the business.

Medical market sales increased 289% to $7.05 million in the first half and 209% to $3.11 million in the second quarter, driven by balloon coating and specialty stent-coating systems.
In-Line Coating Systems sales increased 16% in the second quarter but decreased 14% in the first half, attributed to the non-repetition of six high ASP systems shipped in the prior year.
Multi-Axis Coating Systems sales increased 50% to $4.05 million in the first half, driven by specialty stent-coating systems to the U.S. medical device market.
OEM Systems sales increased 67% to $873,000 in the first half and 63% to $642,000 in the second quarter, driven by fluxing-system sales to a European OEM partner and semiconductor sales to a Chinese OEM.
Fluxing Systems sales decreased 62% to $119,000 in the first half and 84% to $27,000 in the second quarter.
Spare Parts, Services, and Other sales decreased 12% to $1.91 million in the first half and 22% to $810,000 in the second quarter.

Alternative/Clean Energy sales decreased 85% to $855,000 in the first half and 78% to $535,000 in the second quarter, reflecting shifts in U.S. government policy and spending in green-hydrogen, electrolysis, and fuel-cell applications.
Electronics/Microelectronics sales decreased 14% to $2.07 million in the first half and 17% to $1.20 million in the second quarter.
Industrial sales increased 156% to $915,000 in the first half and 62% to $385,000 in the second quarter, influenced by a system sold to the defense sector for optics applications.
U.S. and Canada sales increased 15% in the first half and 35% in the second quarter, driven by the U.S. medical-device market.
Asia Pacific sales decreased 19% in the first half and 45% in the second quarter, reflecting lower sales in South Korea, Taiwan, and Japan, partially offset by increased sales in China.
EMEA sales decreased 19% in the first half and 33% in the second quarter, primarily due to softer clean-energy sales, partially offset by strong fluxing-system sales to a European partner.
Latin America sales increased 199% to $554,000 in the first half and 2% to $91,000 in the second quarter, including a $242,000 medical system shipment to Costa Rica.

Forward-looking statements involve risks including general economic conditions, political and regulatory developments, inflationary pressures, and supply chain constraints.
Risks include the potential for actual results to differ from expectations due to the timing of large orders, the ability to enforce patents, and the successful transition to a higher-value machine solutions business model.
Specific risks include the maintenance of order backlog, the imposition of tariffs, and the realization of revenues within the forecasted guidance range.

CEO Steve Harshbarger described fiscal 2027 as progressing well with solid revenue growth, margin expansion, and improved operating profitability, attributing success to disciplined execution and a focus on higher-value systems in advanced technology markets.
Management expressed encouragement regarding the increasing adoption of their technology as customers transition from development to commercial manufacturing.
Executive Chairman Dr. Christopher L. Coccio highlighted the long-term strength of the ultrasonic coating technology platform and the strategic direction enabling customers to address demanding coating requirements in sophisticated medical applications.
Management emphasized a strong financial foundation with a growing backlog and cash position, positioning the company to capitalize on future opportunities and build long-term shareholder value.

Combined equipment and service-related backlog was $9.51 million at August 31, 2026, an increase of 23% from $7.73 million at the end of the first quarter of fiscal 2027.
The company is transitioning from primarily selling ultrasonic nozzles and components to a more complex business providing complete machine solutions and higher value subsystems.
A conference call and webcast were held on October 14, 2026, to discuss the results.