Sono-Tek Reports Third Quarter and Nine Months Fiscal 2025 Financial Results
Rhea-AI Summary
Sono-Tek (SOTK) reported financial results for Q3 FY2025, with net sales of $5.19 million, down 9% from $5.69 million in Q3 FY2024. The company achieved record first nine months revenue of $15.4 million, up 3% year-over-year.
Key highlights include: Alternative/Clean Energy market sales grew 42% to $3.0 million; Multi-Axis Coating systems sales increased 20% to $3.56 million; gross profit margin declined to 45% from 51%; operating income decreased 73% to $198,000. The company maintains a strong backlog of $10.6 million and projects record revenue of over $20 million for FY2025.
Financial position remains solid with $12.7 million in cash and no debt. The company continues to focus on growth through high-ASP production systems and expects continued profitability.
Positive
- Record first nine months revenue of $15.4M, up 3% YOY
- Alternative/Clean Energy market sales grew 42% to $3.0M
- Multi-Axis Coating systems sales increased 20% to $3.56M
- Strong backlog of $10.6M
- Solid cash position of $12.7M with no debt
- Projected record revenue of over $20M for FY2025
Negative
- Q3 net sales decreased 9% YOY to $5.19M
- Gross profit margin declined to 45% from 51%
- Operating income decreased 73% to $198,000
- Net income declined 60% to $274,000
- Decreased sales in Industrial and Medical markets
News Market Reaction 1 Alert
On the day this news was published, SOTK declined 3.95%, reflecting a moderate negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
-Reports Third Consecutive Quarter of Revenue above
-First Nine Months Revenue Growth of
- Backlog Remains Strong at
- Provides Guidance for Revenue of over
MILTON, N.Y., Jan. 13, 2025 (GLOBE NEWSWIRE) -- Sono-Tek Corporation (Nasdaq: SOTK), the leading developer and manufacturer of ultrasonic coating systems, today reported financial results for the third quarter and nine months of fiscal year 2025, ended November 30, 2024.
Third Quarter and Nine Months Fiscal 2025 Highlights (compared with the third quarter of fiscal 2024 unless otherwise noted. The three-month periods ended November 30, 2024 and 2023 are referred to as the third quarter of fiscal 2025 and fiscal 2024, respectively.)
- Net sales for the third quarter of fiscal 2025 were
$5,190,595 , compared to last year’s record results of$5,690,022 and up sequentially from$5,162,000. Sales in the third quarter of fiscal 2024 benefitted from supply chain improvements that cleared a backlog of orders, particularly in the Alternative/Clean Energy and Medical markets. Third quarter of fiscal 2025 results were impacted by lower sales in the Industrial and Medical markets and reduced revenue from the U.S. and EMEA regions. - Sales to the Alternative/Clean Energy market grew
42% to$3.0 million , positively impacted by a growing number of Sono-Tek’s customers transitioning from our R&D systems to production scale systems that carry much higher average selling prices (ASPs). - Multi-Axis Coating systems sales increased
20% , or$600,000 , to$3.56 million in the third quarter of fiscal 2025, which included a$1.12M production system. - The other revenue category, which includes spare parts and service-related activities, increased
24% to$1.22 million , significantly impacted by a strong quarter for service-related activities, which is a growing revenue stream. - The Gross Profit percentage declined to
45% compared to an all-time high of51% in the third quarter of fiscal 2024. The decline was influenced by a higher proportion of international sales, which commonly include international distributor discounts, product mix and the reclass of specific labor expenses from the engineering department to cost of goods sold. - Operating income declined to
$197,637 versus$720,522 last year; and up from$103,481 t he year before. Decreased operating income was due to the decrease in gross profit. - Income before taxes was
$313,990 versus$890,364 last year due to the decrease in gross profit. - Record first nine months fiscal 2025 revenue increased by
3% year over year to$15.4 million compared to$14.9 million , supported by contributions from several new products. - As of November 30, 2024, the Company had no outstanding debt and held
$12.7M in cash, cash equivalents, and marketable securities.
Backlog and Expected Revenue Growth for Fiscal Year 2025
- Total equipment and service-related backlog remained strong at
$10,564,060 , compared to$10,671,260 million at the end of the third quarter of fiscal 2024. - Continued revenue growth is expected for the full fiscal year ending February 28, 2025, which is projected to be a record high of over
$20 million , fueled by shipments from Sono-Tek’s strong backlog and projected new and reoccurring orders.
Dr. Christopher L. Coccio, Executive Chairman, stated, “Overall, we remain pleased with our performance this fiscal year, especially given the backdrop of the dramatic increase in last year’s third quarter results as we came out of supply chain restrictions to have our best quarter ever last year. With our third quarter of fiscal 2025 results lower than last year’s third quarter, we still had a very good quarter with revenue up sequentially, and the nine months show a continuing revenue trend of
Steve Harshbarger, CEO & President of Sono-Tek, remarked, “We continue to be excited by our growth strategies taking hold with customers moving through R&D and pilot systems to complex large-scale production systems. Importantly, these more advanced systems come with significantly higher ASPs. We also remain excited about our prospects for attracting additional high-volume, high-ASP production system orders in fiscal year 2026 and beyond. With solid customer demand fueling our backlog and our strong balance sheet, we remain focused on continued execution and look forward to building on our record revenues.”
Third Quarter Fiscal 2025 Results
(Narrative compares with prior-year period unless otherwise noted) ($ in thousands)
| Three Months Ended November 30, | Change | ||||||||||||||
| 2024 | 2023 | $ | % | ||||||||||||
| Net Sales | $ | 5,191 | $ | 5,690 | (499 | ) | (9 | %) | |||||||
| Gross Profit | $ | 2,343 | $ | 2,926 | (583 | ) | (20 | %) | |||||||
| Gross Profit % | 45 | % | 51 | % | |||||||||||
| Operating Income | $ | 198 | $ | 721 | (523 | ) | (73 | %) | |||||||
| Operating Margin | 4 | % | 13 | % | |||||||||||
| Net Income | $ | 274 | $ | 690 | (416 | ) | (60 | %) | |||||||
| Net Margin | 5 | % | 12 | % | |||||||||||
Third Quarter Fiscal 2025 Product and Market Sales Overview
Net sales decreased
- Multi-Axis Coating systems sales grew by
20% , or$600,000 , to$3.56 million in the third quarter of fiscal 2025. - Integrated Coating System sales decreased by
94% due to very strong orders in the prior year quarter. - Fluxing system sales increased
15% and are expected to further rebound with recent significant distributor changes that should positively impact sales for the remaining quarter of the fiscal year and fiscal year 2026. - OEM sales dipped slightly due to many OEM partners having previously built-up excess inventory to combat supply chain concerns and partially due to a reduction in sales of our China based OEM partners’ products due to China’s struggling economy.
- Other revenue increased to
$1.22 million or24% due to an increase in spare parts and service-related revenue, which is a growing revenue stream.
Sales to the Alternative/Clean Energy market grew
Electronics market sales decreased
Approximately
At the end of the third quarter of fiscal 2025, total equipment-related and service-related backlog was
Third Quarter FY 2024 Financial Overview
Gross profit was
Operating expenses were
Research and product development costs decreased
Marketing and selling expenses decreased slightly in the third quarter of fiscal 2025 due to a decrease in salary expense which was partially offset by an increase in commissions. The decrease in salary expense is due to the reallocation of CEO Steve Harshbarger’s salary to the General and Administrative category.
General and administrative expenses increased
In the third quarter of fiscal 2025, operating income decreased
Interest and dividend income and unrealized loss on marketable securities decreased to
Net income decreased by
Diluted weighted average shares outstanding were 15,771,511 compared to 15,776,972 for the prior year period.
Nine Month Fiscal 2025 Results
(Narrative compares with prior-year period unless otherwise noted) ($ in thousands)
| Nine Months Ended November 30, | Change | ||||||||||||||
| 2024 | 2023 | $ | % | ||||||||||||
| Net Sales | $ | 15,383 | $ | 14,932 | 451 | 3 | % | ||||||||
| Gross Profit | $ | 7,314 | $ | 7,504 | (190 | ) | (3 | %) | |||||||
| Gross Profit % | 48 | % | 50 | % | |||||||||||
| Operating Income | $ | 722 | $ | 1,195 | (473 | ) | (40 | %) | |||||||
| Operating Margin | 5 | % | 8 | % | |||||||||||
| Net Income | $ | 946 | $ | 1,285 | (339 | ) | (26 | %) | |||||||
| Net Margin | 6 | % | 9 | % | |||||||||||
First Nine Months FY 2025 Overview
Net Sales for the first nine months of fiscal 2025 increased by
Operating income decreased
Balance Sheet and Cash Flow Overview
At November 30, 2024, cash, cash equivalents and marketable securities totaled
Capital expenditures in the first nine months of fiscal 2025 were
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 inroads into the clean energy sector are showing transformative results in next-gen solar cells, fuel cells, green hydrogen generation, and carbon capture applications.
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 are expected to generate unparalleled results for our clients and help 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; 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 fourth quarter of fiscal year 2025; maintenance of increased 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 and income within the forecasted range of sales guidance.
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, Inc.
ksmith@pcgadvisory.com
| SONO-TEK CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| November 30, 2024 (Unaudited) | February 29, 2024 | ||||||
| ASSETS | |||||||
| Current Assets: | |||||||
| Cash and cash equivalents | $ | 8,098,750 | $ | 2,134,786 | |||
| Marketable securities | 4,582,428 | 9,711,351 | |||||
| Accounts receivable (less allowance of | 2,279,304 | 1,470,711 | |||||
| Inventories | 4,737,510 | 5,221,980 | |||||
| Prepaid expenses and other current assets | 123,298 | 207,738 | |||||
| Total current assets | 19,821,290 | 18,746,566 | |||||
| Land | 250,000 | 250,000 | |||||
| Buildings, equipment, furnishings and leasehold improvements, net | 2,713,682 | 2,832,156 | |||||
| Intangible assets, net | 39,931 | 47,566 | |||||
| Deferred tax asset | 1,511,459 | 1,255,977 | |||||
| TOTAL ASSETS | $ | 24,336,362 | $ | 23,132,265 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current Liabilities: | |||||||
| Accounts payable | $ | 1,116,831 | $ | 1,049,742 | |||
| Accrued expenses | 1,925,036 | 1,739,478 | |||||
| Customer deposits | 3,363,301 | 3,419,706 | |||||
| Income taxes payable | 213,350 | 414,807 | |||||
| Total current liabilities | 6,618,518 | 6,623,733 | |||||
| Deferred tax liability | 317,070 | 229,534 | |||||
| Total liabilities | 6,935,588 | 6,853,267 | |||||
| Stockholders’ Equity | |||||||
| Common stock, $.01 par value; 25,000,000 shares authorized, 15,751,153 and 15,750,880 shares issued and outstanding, respectively | 157,512 | 157,509 | |||||
| Additional paid-in capital | 9,946,460 | 9,770,387 | |||||
| Accumulated earnings | 7,296,802 | 6,351,102 | |||||
| Total stockholders’ equity | 17,400,774 | 16,278,998 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 24,336,362 | $ | 23,132,265 | |||
See notes to unaudited condensed consolidated financial statements.
| SONO-TEK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | |||||||||||||||
| Nine Months Ended November 30, | Three Months Ended November 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net Sales | $ | 15,383,416 | $ | 14,932,157 | $ | 5,190,596 | $ | 5,690,022 | |||||||
| Cost of Goods Sold | 8,069,633 | 7,428,348 | 2,847,397 | 2,764,013 | |||||||||||
| Gross Profit | 7,313,783 | 7,503,809 | 2,343,199 | 2,926,009 | |||||||||||
| Operating Expenses | |||||||||||||||
| Research and product development costs | 2,054,846 | 2,221,712 | 627,543 | 776,013 | |||||||||||
| Marketing and selling expenses | 2,814,804 | 2,700,327 | 929,196 | 955,017 | |||||||||||
| General and administrative costs | 1,722,210 | 1,387,006 | 588,823 | 474,457 | |||||||||||
| Total Operating Expenses | 6,591,860 | 6,309,045 | 2,145,562 | 2,205,487 | |||||||||||
| Operating Income | 721,923 | 1,194,764 | 197,637 | 720,522 | |||||||||||
| Interest and Dividend Income | 359,248 | 379,949 | 131,518 | 149,666 | |||||||||||
| Net unrealized gain/(loss) on marketable securities | 38,776 | 31,031 | (15,165 | ) | 20,176 | ||||||||||
| Income Before Income Taxes | 1,119,947 | 1,605,744 | 313,990 | 890,364 | |||||||||||
| Income Tax Expense | 174,247 | 320,896 | 39,812 | 200,195 | |||||||||||
| Net Income | $ | 945,700 | $ | 1,284,848 | $ | 274,178 | $ | 690,169 | |||||||
| Basic Earnings Per Share | $ | 0.06 | $ | 0.08 | $ | 0.02 | $ | 0.04 | |||||||
| Diluted Earnings Per Share | $ | 0.06 | $ | 0.08 | $ | 0.02 | $ | 0.04 | |||||||
| Weighted Average Shares - Basic | 15,750,980 | 15,743,224 | 15,751,152 | 15,744,543 | |||||||||||
| Weighted Average Shares - Diluted | 15,771,039 | 15,775,675 | 15,771,511 | 15,776,972 | |||||||||||
See notes to unaudited condensed consolidated financial statements.
| SONO-TEK CORPORATION PRODUCT, MARKET, AND GEOGRAPHIC SALES (Unaudited) |
Product Sales
| Three Months Ended November 30, | Change | Nine Months Ended November 30, | Change | ||||||||||||||||||||||||||||
| 2024 | 2023 | $ | % | 2024 | 2023 | $ | % | ||||||||||||||||||||||||
| Fluxing Systems | $ | 71,000 | $ | 62,000 | 9,000 | 15 | % | $ | 324,000 | $ | 503,000 | (179,000 | ) | (36 | %) | ||||||||||||||||
| Integrated Coating Systems | 81,000 | 1,418,000 | (1,337,000 | ) | (94 | %) | 2,850,000 | 2,579,000 | 271,000 | 11 | % | ||||||||||||||||||||
| Multi-Axis Coating Systems | 3,563,000 | 2,962,000 | 601,000 | 20 | % | 8,158,000 | 7,648,000 | 510,000 | 7 | % | |||||||||||||||||||||
| OEM Systems | 259,000 | 268,000 | (9,000 | ) | (3 | %) | 796,000 | 1,078,000 | (282,000 | ) | (26 | %) | |||||||||||||||||||
| Other | 1,217,000 | 980,000 | 237,000 | 24 | % | 3,255,000 | 3,124,000 | 131,000 | 4 | % | |||||||||||||||||||||
| TOTAL | $ | 5,191,000 | $ | 5,690,000 | (499,000 | ) | (9 | %) | $ | 15,383,000 | $ | 14,932,000 | 451,000 | 3 | % | ||||||||||||||||
Market Sales
| Three Months Ended November 30, | Change | Nine Months Ended November 30, | Change | ||||||||||||||||||||||||||||
| 2024 | 2023 | $ | % | 2024 | 2023 | $ | % | ||||||||||||||||||||||||
| Electronics/Microelectronics | $ | 1,016,000 | $ | 1,374,000 | (358,000 | ) | (26 | %) | $ | 4,060,000 | $ | 3,724,000 | 336,000 | 9 | % | ||||||||||||||||
| Medical | 897,000 | 1,340,000 | (443,000 | ) | (33 | %) | 2,156,000 | 3,452,000 | (1,296,000 | ) | (38 | %) | |||||||||||||||||||
| Alternative Energy | 2,959,000 | 2,083,000 | 876,000 | 42 | % | 7,740,000 | 4,735,000 | 3,005,000 | 63 | % | |||||||||||||||||||||
| Emerging R&D and Other | 17,000 | 152,000 | (135,000 | ) | (89 | %) | 57,000 | 315,000 | (258,000 | ) | (82 | %) | |||||||||||||||||||
| Industrial | 302,000 | 741,000 | (439,000 | ) | (59 | %) | 1,370,000 | 2,706,000 | (1,336,000 | ) | (49 | %) | |||||||||||||||||||
| TOTAL | $ | 5,191,000 | $ | 5,690,000 | (499,000 | ) | (9 | %) | $ | 15,383,000 | $ | 14,932,000 | 451,000 | 3 | % | ||||||||||||||||
Geographic Sales
| Three Months Ended November 30, | Change | Nine Months Ended November 30, | Change | ||||||||||||||||||||||||||||
| 2024 | 2023 | $ | % | 2024 | 2023 | $ | % | ||||||||||||||||||||||||
| U.S. & Canada | $ | 2,823,000 | $ | 3,421,000 | (598,000 | ) | (17 | %) | $ | 9,409,000 | $ | 8,988,000 | 421,000 | 5 | % | ||||||||||||||||
| Asia Pacific (APAC) | 1,114,000 | 681,000 | 433,000 | 64 | % | 1,994,000 | 1,790,000 | 204,000 | 11 | % | |||||||||||||||||||||
| Europe, Middle East, Asia (EMEA) | 957,000 | 1,476,000 | (519,000 | ) | (35 | %) | 3,338,000 | 3,057,000 | 281,000 | 9 | % | ||||||||||||||||||||
| Latin America | 297,000 | 112,000 | 185,000 | 165 | % | 642,000 | 1,097,000 | (455,000 | ) | (41 | %) | ||||||||||||||||||||
| TOTAL | $ | 5,191,000 | $ | 5,690,000 | (499,000 | ) | (9 | %) | $ | 15,383,000 | $ | 14,932,000 | 451,000 | 3 | % | ||||||||||||||||
FAQ
What was SOTK's revenue performance in Q3 FY2025?
How much is SOTK's current backlog as of November 2024?
What is SOTK's revenue guidance for fiscal year 2025?
How did SOTK's Alternative/Clean Energy market perform in Q3 FY2025?
What is SOTK's current cash position and debt status?
