SOTK Sono Tek Corporation

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): July 11, 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 July 11, 2024, Sono-Tek Corporation issued a press release regarding its financial results for the quarter ended May 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 July 11, 2024.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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

July 11, 2024

Exhibit 99

 

 

2012 Route 9W ● Milton, NY 12547 ● 845-795-2020

Sono-Tek Reports 40% Increase in Sales and 525% Increase in
Net Income for First Quarter Fiscal 2025

 

Provides Sales Guidance for Second Quarter of Fiscal 2025 and Anticipates
Continued Sales Growth for Fiscal 2025

 

MILTON, N.Y., July 11, 2024 – Sono-Tek Corporation (Nasdaq: SOTK), the leading developer and manufacturer of ultrasonic coating systems, today reported financial results for its first quarter of fiscal year 2025, ended May 31, 2024.

 

First Quarter FY2025 Financial Highlights:

(Compared with prior-year period unless otherwise noted)

 

• Net Sales for the quarter increased 40% to $5,031,000 compared to $3,603,000 in the prior year period, driven by strong shipments to the Medical and Alternative/Clean Energy markets.
• Gross Profit increased 38% to $2,454,000 compared to $1,777,000 in the prior year period.
• Operating Income increased $330,000 to $238,000, from an operating loss of $92,000 at May 31, 2023. The increase is due to the current period’s increase in gross profit partially offset by an increase in operating expenses.
• Gross Margin decreased slightly to 48.8% compared to 49.3% in the prior year period due to a realignment of organizational framework that started in Q4 FY2024, but remains strong and within its historical range.
• Income before taxes was $391,000 compared to $32,000 in the prior year period.
• Net income was $331,000, or $0.02 per share, compared with $53,000 or $0.00 per share, an increase of 525%
• Cash, cash equivalents and marketable securities at quarter-end were $12.2 million, an increase of $0.3 million from February 29, 2024 with no outstanding debt.
• Combined Equipment and service-related backlog at May 31, 2024 was $7.83 million, compared to equipment and service-related backlog of $9.28 million at February 29, 2024.
• Sales growth guidance for the second quarter of FY2025, ending August 31, 2024, is for growth of 2%-5% above the first quarter ended May 31, 2024 and for continued sales growth for the full fiscal year over the last fiscal year.

 

“Sono-Tek began its fiscal year with strong sales momentum and is looking forward to an excellent year with increasing orders in green energy systems combined with strength in the medical device coating market and the semiconductor/electronics markets. We are aggressively moving forward with 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 remain excited about our prospects for attracting additional high-volume, high-ASP production system orders in fiscal year 2025. Due to the increased frequency of high ASP large platform machine orders, our revenue can be highly variable from quarter to quarter resulting in large fluctuations in backlog. With our strong sales momentum bolstered by our solid balance sheet, we remain focused on continued execution and look forward to building on our record revenues.”

 

First Quarter Fiscal 2025 Results

		Three Months Ended May 31,								Change
		2024				2023				$				%
Net Sales		$	5,031,000			$	3,603,000				1,428,000				40%
Gross Profit			2,454,000				1,777,000				677,000				38%
Gross Margin			48.8%				49.3%
Operating Income		$	238,000			$	(92,000	)			330,000				359%
Operating Margin			4.7%				(2.6%	)
Net Income		$	331,000			$	53,000				278,000				525%
Net Margin			6.6%				1.5%
Basic Earnings Per Share		$	0.02			$	0.00
Diluted Earnings Per Share		$	0.02			$	0.00
Weighted Average Shares -Basic			15,751,000				15,742,000
Weighted Average Shares - Diluted			15,774,000				15,769,000

 

First Quarter FY2025 Financial Overview

 

Net Sales for the quarter increased 40% to $5,031,000 compared to $3,603,000 in the prior year period, driven by strong shipments to the Medical and Alternative/Clean Energy markets.

 

In the first quarter of fiscal 2025, approximately 39% of sales originated outside of the United States and Canada compared with 34% in the prior year period.

 

Equipment related backlog at May 31, 2024 was $7.69 million, compared to backlog of $9.08 million at February 29, 2024, a decrease of $1.39 million or 15.4%.  Combined equipment and service-related backlog at May 31, 2024 was $7.83 million, compared to equipment and service related backlog of $9.28 million at February 29, 2024, a decrease of $1.5 million or 16%.

 

 

 

Gross Profit increased 38% to $2,454,000 compared to $1,777,000 in the prior year period. Gross profit margin decreased 50 basis points to 48.8% in the first quarter of fiscal 2025 compared to 49.3% in the prior year period due to product mix changes and recharacterization of expenses associated with evolving workforce roles, as successful development initiatives transition toward mainstream manufacturing.

 

Operating income increased to $238,000 in the first quarter of fiscal 2025 compared to an operating loss of $92,000 for the prior year period, an increase of $330,000 or 359%. The increase in operating income is a result of the improvement in gross profit of $677,000, offset by an increase in operating expenses of $347,000.

 

Net income for the first quarter was $331,000, or $0.02 per share, compared with net income of $53,000 or $0.00 per share, for the prior year period, an increase of 525%. Diluted weighted average shares outstanding totaled 15,774,376 compared to 15,769,442 for the prior year period.

 

Balance Sheet and Cash Flow Overview

Cash, cash equivalents and marketable securities at quarter-end were $12.2 million, an increase of $0.3 million from February 29, 2024, the end of fiscal year 2024. The increase was the result of the current period’s net income and non-cash charges partially offset by an increase in inventories and a decrease in payables and customer deposits.

Capital expenditures in the first quarter totaled $33,000 which were directed to ongoing upgrades to the Company’s manufacturing facilities.  Sono-Tek anticipates total capital expenditures will be approximately $300,000 - $350,000 in fiscal 2025.

At May 31, 2024, Sono-Tek had no debt on its balance sheet.

 

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 bold venture into the clean energy sector is showing transformative results in next-gen solar cells, fuel cells, green hydrogen generation, and carbon capture applications as we shape a sustainable future. 

 

 

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 ensures unparalleled results for our clients and helps 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; the recovery of the Electronics/Microelectronics and Medical markets; rebound of sales to the industrial market in the second quarter of fiscal year 2025; 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; continued sales growth in the medical and alternative energy markets; 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

Ph: (646) 823-8656

ksmith@pcgadvisory.com

 

http://www.sono-tek.com

 

 

FINANCIAL TABLES FOLLOW

 

 

SONO-TEK CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		May 31, 2024				February 29,
		(Unaudited)				2024
ASSETS
Current Assets:
Cash and cash equivalents		$	2,402,007			$	2,134,786
Marketable securities			9,749,483				9,711,351
Accounts receivable (less allowance of $12,225)			1,401,582				1,470,711
Inventories			5,479,368				5,221,980
Prepaid expenses and other current assets			148,603				207,738
Total current assets			19,181,043				18,746,566
Land			250,000				250,000
Buildings, equipment, furnishings and leasehold improvements, net			2,709,183				2,832,156
Intangible assets, net			45,020				47,566
Deferred tax asset			1,369,210				1,255,977
TOTAL ASSETS		$	23,554,456			$	23,132,265
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable		$	1,020,777			$	1,049,742
Accrued expenses			1,711,800				1,739,478
Customer deposits			3,339,816				3,419,706
Income taxes payable			618,010				414,807
Total current liabilities			6,690,403				6,623,733
Deferred tax liability			199,987				229,534
Total liabilities			6,890,390				6,853,267
Commitments and Contingencies (Note 9)			-				-
Stockholders’ Equity
Common stock, $.01 par value; 25,000,000 shares authorized, 15,750,880  shares issued and outstanding as of May 31 and February 29, 2024			157,509				157,509
Additional paid-in capital			9,824,618				9,770,387
Accumulated earnings			6,681,939				6,351,102
Total stockholders’ equity			16,664,066				16,278,998
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	23,554,456			$	23,132,265

 

See notes to unaudited condensed consolidated financial statements.

 

 

SONO-TEK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

		Three Months Ended May 31,
		2024				2023
Net Sales		$	5,031,038			$	3,603,018
Cost of Goods Sold			2,576,551				1,825,786
Gross Profit			2,454,487				1,777,232
Operating Expenses
Research and product development costs			731,430				656,438
Marketing and selling expenses			897,190				800,784
General and administrative costs			587,571				411,626
Total Operating Expenses			2,216,191				1,868,848
Operating Income/(Loss)			238,296				(91,616)
Interest and Dividend Income			142,654				105,990
Net unrealized gain on marketable securities			10,361				17,658
Income Before Income Taxes			391,311				32,032
Income Tax Expense/ (Benefit)			60,474				(21,374	)
Net Income		$	330,837			$	53,406
Basic Earnings Per Share		$	0.02			$	0.00
Diluted Earnings Per Share		$	0.02			$	0.00
Weighted Average Shares - Basic			15,750,880				15,742,073
Weighted Average Shares - Diluted			15,774,376				15,769,442

 

See notes to unaudited condensed consolidated financial statements.

 

 

 

SONO-TEK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

		Three Months Ended May 31,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income		$	330,837			$	53,406
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			158,491				135,208
Stock based compensation expense			54,231				48,295
Inventory reserve			11,839				(10,582	)
Unrealized (gain) on marketable securities			(10,361	)			(17,658	)
Deferred tax expense			(142,780	)			(124,317	)
Decrease (Increase) in:
Accounts receivable			69,129				492,390
Inventories			(269,227	)			(501,566	)
Prepaid expenses and other current assets			59,135				64,746
(Decrease) Increase in:
Accounts payable			(28,965	)			122,767
Accrued expenses			(27,678	)			(88,157	)
Customer deposits			(79,890	)			772,410
Income taxes payable			203,203				(118,850	)
Net Cash Provided by Operating Activities			327,964				828,092
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment, furnishings and leasehold improvements			(32,972	)			(149,004	)
Sale of marketable securities			5,211,058				3,707,074
Purchase of marketable securities			(5,238,829	)			(3,446,424	)
Net Cash (Used)/Provided by Investing Activities			(60,743	)			111,646
NET INCREASE IN CASH AND CASH EQUIVALENTS			267,221				939,738
CASH AND CASH EQUIVALENTS
Beginning of period			2,134,786				3,354,601
End of period		$	2,402,007			$	4,294,339
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid		$	—			$	—
Taxes Paid		$	—			$	221,942

 

See notes to unaudited condensed consolidated financial statements.

 

 

 

Market Sales: 

		Three Months Ended May 31,												Change
		2024				% of total		2023				% of total		$				%
Electronics/Microelectronics		$	1,568,000			31%		$	1,375,000			38%			193,000			14%
Medical			857,000			17%			383,000			11%			474,000			124%
Alternative Energy/Clean			2,282,000			46%			833,000			23%			1,449,000			174%
Emerging R&D and Other			11,000			0%			126,000			3%			(115,000	)		(91%)
Industrial			313,000			6%			886,000			25%			(573,000	)		(65%)
TOTAL		$	5,031,000					$	3,603,000					$	1,428,000			40%

 

Product Sales:

		Three Months Ended May 31,												Change
		2024				% of total		2023				% of total		$				%
Fluxing Systems		$	134,000			2%		$	236,000			6%			(102,000	)		(43%)
Integrated Coating Systems			747,000			15%			309,000			9%			438,000			142%
Multi-Axis Coating Systems			2,664,000			53%			1,763,000			49%			901,000			51%
OEM Systems			332,000			7%			274,000			8%			58,000			21%
Spare Parts, Services and Other			1,154,000			23%			1,021,000			28%			133,000			13%
TOTAL		$	5,031,000					$	3,603,000					$	1,428,000			40%

 

v3.24.2

Cover	Jul. 11, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 11, 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

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