Sono-Tek Announces Fiscal Year 2024 Results with Record-Breaking Revenue and Record YOY Backlog
Sono-Tek (NASDAQ: SOTK) reported record-breaking financial results for fiscal year 2024, ending February 29, 2024. Key highlights include a 31% increase in net sales to $19.7 million and a 29% rise in gross profit to $9.8 million. Operating income surged by 73% to $1.2 million, while net income more than doubled to $1.4 million. The backlog at year-end rose 7% to $9.1 million. The company remains debt-free with cash and equivalents totaling $11.8 million. For fiscal year 2025, Sono-Tek projects revenue growth of 8% to 10%. Strong demand continues in key markets like microelectronics, clean energy, and medical devices.
- Net sales increased by 31% to $19.7 million.
- Gross profit rose 29% to $9.8 million.
- Operating income increased by 73% to $1.2 million.
- Net income more than doubled to $1.4 million.
- Record backlog of $9.1 million at fiscal year-end, a 7% increase.
- Cash, cash equivalents, and marketable securities increased to $11.8 million.
- The company remains debt-free.
- Revenue from Multi-Axis Coating systems grew by 48%.
- Integrated Coating System sales accelerated by 159%.
- Strong growth in the clean energy sector, with a 96% increase in sales.
- Medical sales grew by 13% and industrial sales by 48%.
- Sales in the U.S. and Canada grew by 60%.
- Gross profit margin decreased from 50.8% to 50%.
- Sales for PCB Fluxing systems dropped by 39%.
- OEM sales decreased by 28%.
- Asia sales remained flat, with a decline in China.
- Latin America sales decreased by 21%.
- Operating loss in Q4 FY2024 of $12k compared to a $21k profit in Q4 FY2023.
Insights
Sono-Tek Corporation has reported significant financial improvements for fiscal year 2024, marking record-breaking revenue and backlog. Key metrics highlight a 31% increase in net sales to
The gross profit margin saw a minor decline from
For retail investors, this performance illustrates that Sono-Tek is effectively capitalizing on its market opportunities, particularly in the clean energy and medical sectors. The solid balance sheet, with
In summary, Sono-Tek's strong financial performance and strategic positioning in high-growth markets, coupled with a sound balance sheet, present a compelling case for continued investor interest. Investors should note the slight margin pressure and monitor future cost management and revenue growth closely.
Sono-Tek's performance in fiscal year 2024 underscores its growth within key markets like clean energy, microelectronics and medical devices. The company reported a 96% increase in sales to the Alternative/Clean Energy market, driven by the transition of customers from R&D systems to high ASP production systems. This shift highlights a successful strategy of guiding clients towards larger, more lucrative orders.
The diversification of product offerings, such as the Multi-Axis Coating systems and the Integrated Coating System, has significantly bolstered revenue. Notably, the introduction of the float glass coating platform and the Altair PLC-Based system indicates Sono-Tek's continuous innovation and alignment with market demands, particularly in the solar energy sector.
Geographically, the company's 60% sales growth in the U.S. and Canada reflects the positive impact of governmental initiatives like the CHIPS Act and the Inflation Reduction Act. Conversely, flat sales in Asia and a decline in Latin America sales point to regional economic uncertainties and market-specific challenges.
Investors should appreciate Sono-Tek's strategic market focus and innovation, which are driving revenue growth. However, regional performance disparities warrant attention, as they could influence overall growth dynamics.
MILTON, N.Y., May 23, 2024 (GLOBE NEWSWIRE) -- Sono-Tek Corporation (NASDAQ: SOTK), the leading developer and manufacturer of ultrasonic coating systems, today reported financial results for its fourth quarter and fiscal year 2024, ended February 29, 2024 (“fiscal year 2024”).
Fiscal Year 2024 Highlights
- Backlog at fiscal year-end on February 29, 2024, was
$9.1 million , a7% increase year over year, continuing a trend of strong backlog growth. - Record net sales for fiscal year 2024 increased
31% to$19.7 million from$15.1 million in the prior year. - Gross profit increased
29% to$9.8 million for fiscal year 2024 compared with$7.7 million for fiscal year 2023. The gross profit margin decreased slightly from50.8% to50% compared to the previous fiscal year 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
73% to$1.2 million compared with$683 k in fiscal year 2023, due to increased gross profit offset by an increase in operating expenses. - Net income was
$1.4 million compared to$636 k in fiscal year 2023. The increase in net income in fiscal year 2024 is a result of an increase in operating income and interest and dividend income partially offset by an increase in operating expenses, an increase in income tax expense and the creation of a$138 k reserve related to certain sales tax expenses. - Cash, cash equivalents and marketable securities increased to
$11.8 million from$11.4 million on February 28, 2023, supplementing previous high level of liquidity, while Sono-Tek continues to be debt free.
First Quarter and Fiscal Year 2025 Guidance
- Expects strong first quarter fiscal year 2025 revenue growth above
30% , against a weaker first quarter last year. - Projects
8% to10% year-over-year revenue growth for fiscal year 2025, ending February 28, 2025, despite strong quarterly comparisons and record shipments in fiscal year 2024.
Dr. Christopher L. Coccio, Executive Chairman of Sono-Tek, commented, “Sono-Tek had its best year ever. In addition to our traditional markets, we continued our focus on three main areas of strong global growth: Microelectronics and semiconductors, Clean energy, including fuel cells, solar, and carbon capture, and Medical devices. All three of these areas are experiencing strong demand due to long-term societal needs, and they all benefit from Sono-Tek’s unique thin film coating technology and systems.”
Steve Harshbarger, CEO & President of Sono-Tek, remarked, “Our growth strategies are gaining significant momentum as we guide our customers from our R&D and pilot machines toward our complex large-scale production systems with elevated Average Selling Prices (ASP), ranging from
| Fiscal 2024 Review | (Results compared with of fiscal 2023) | ||||||||||
| ($ in thousands) | |||||||||||
| Change | |||||||||||
| FY 2024 | FY 2023 | $ | % | ||||||||
| Net Sales | $ | 19,700 | $ | 15,058 | $ | 4,642 | 31 | % | |||
| Gross Profit | $ | 9,845 | $ | 7,652 | $ | 2,193 | 29 | % | |||
| Gross Margin | 50.0% | 50.8% | |||||||||
| Operating Income | $ | 1,182 | $ | 683 | $ | 499 | 73 | % | |||
| Operating Margin | 6% | 4.54% | |||||||||
| Net Income | $ | 1,441 | $ | 636 | $ | 805 | 127 | % | |||
| Net Margin | 7.3% | 4.22% | |||||||||
| Fourth Quarter Fiscal 2024 Review | (Results compared with the fourth quarter of fiscal 2023) | ||||||||||
| ($ in thousands) | |||||||||||
| Change | |||||||||||
| FY 2024 | FY 2023 | $ | % | ||||||||
| Net Sales | $ | 4,768 | $ | 3,657 | $ | 1,111 | 30 | % | |||
| Gross Profit | $ | 2,341 | $ | 1,825 | $ | 516 | 28 | % | |||
| Gross Margin | 49% | 50% | |||||||||
| Operating (Loss)/Income | $ | (12 | ) | $ | 21 | $ | (33 | ) | (157 | %) | |
| Operating Margin | (0.3 | %) | 0.6% | ||||||||
| Net Income | $ | 157 | $ | 63 | $ | 94 | 149 | % | |||
| Net Margin | 3% | 1.7% | |||||||||
Fiscal Year 2024 Financial Overview
Net sales in fiscal year 2024 increased
By product, Multi-Axis Coating systems sales increased
Following uncharacteristically high revenue for Printed Circuit Board “PCB” Fluxing systems for our fiscal year ended February 28, 2023, PCB Fluxing sales dipped by
By market, sales to the Alternative/Clean Energy market recorded growth of
Electronics market revenue experienced a modest uptick in fiscal year 2024. This growth was strongly influenced by three significant orders totaling
Medical sales rebounded strongly in the second half of fiscal year 2024 and ended with
Industrial sales remained strong, showing growth of
Geographically, in fiscal year 2024, approximately
Asia sales remained flat for fiscal year 2024. While we experienced robust sales from the clean energy sector in India, South Korea and Singapore, sales in China continued a downward trajectory amidst the uncertain economic landscape prevailing in the region.
In Latin America, we encountered a discernible sales decline of
In fiscal 2024, EMEA sales experienced a notable surge, marking a
Equipment related backlog at February 29, 2024 reached a historical fiscal year end high of
Gross profit increased
In fiscal year 2024, the decrease in gross profit margin is due to increased indirect production salaries, an increase in transportation expenses, increased installation costs and increased warranty costs. In fiscal year 2023, our warranty costs were lower than expected. Warranty costs fluctuate year to year and are a function of product mix. In addition, our gross profit margin decreased due to the reallocation and recharacterization of specific labor expenses from the engineering department to cost of goods sold.
Operating income increased
Net income increased
Balance Sheet and Cash Flow Overview
Cash, cash equivalents and marketable securities at February 29, 2024 were
In fiscal year 2024, capital expenditures amounted to
Conference Call Information
Sono-Tek will hold a conference call to discuss its fourth quarter and fiscal 2024 yearend financial results today, Thursday, May 23rd, 2024 at 9:30am EST.
To participate, please call 1-844-481-2752 at least 10 minutes prior to the start of the call and ask to join the Sono-Tek call.
Webcast Information
A simultaneous webcast of the call may be accessed through the Company's website at Events & Presentations | Sono-Tek or at https://event.choruscall.com/mediaframe/webcast.html?webcastid=Msi7H3Uz
A replay of the call will be available at 1 (877) 344-7529, access code 1597648, through May 30, 2024. A replay of the call will also be available on the Company’s website for one year at www.sono-tek.com.
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 inflationary pressures; political, regulatory, tax, competitive and technological developments affecting our operations or the demand for our products; the recovery of the Microelectronics, Medical and Alternative Energy markets; the imposition of tariffs; the continued strong sales of the multi-axis coatings systems; 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; maintenance of increased order backlog; 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 at higher average selling prices; 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, contact:
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
| SONO-TEK CORPORATION CONSOLIDATED BALANCE SHEETS | ||||||||
| February 29, 2024 | February 28, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 2,134,786 | $ | 3,354,601 | ||||
| Marketable securities | 9,711,351 | 8,090,000 | ||||||
| Accounts receivable (less allowance of | 1,470,711 | 1,633,866 | ||||||
| Inventories | 5,221,980 | 3,242,909 | ||||||
| Prepaid expenses and other current assets | 207,738 | 254,046 | ||||||
| Total current assets | 18,746,566 | 16,575,422 | ||||||
| Land | 250,000 | 250,000 | ||||||
| Buildings, equipment, furnishings and leasehold improvements, net | 2,832,156 | 2,624,996 | ||||||
| Intangible assets, net | 47,566 | 57,202 | ||||||
| Deferred tax asset | 1,255,977 | 667,098 | ||||||
| TOTAL ASSETS | $ | 23,132,265 | $ | 20,174,718 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 1,049,742 | $ | 810,863 | ||||
| Accrued expenses | 1,739,478 | 1,427,446 | ||||||
| Customer deposits | 3,419,706 | 2,838,165 | ||||||
| Income taxes payable | 414,807 | 381,421 | ||||||
| Total current liabilities | 6,623,733 | 5,457,895 | ||||||
| Deferred tax liability | 229,534 | 82,865 | ||||||
| Total Liabilities | 6,853,267 | 5,540,760 | ||||||
| Commitments and Contingencies (Note 13) | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock, $.01 par value; 25,000,000 shares authorized, 15,750,880 and 15,742,073 issued and outstanding as of February 29, 2024, and February 28, 2023, respectively | 157,509 | 157,421 | ||||||
| Additional paid-in capital | 9,770,387 | 9,566,898 | ||||||
| Accumulated earnings | 6,351,102 | 4,909,639 | ||||||
| Total stockholders’ equity | 16,278,998 | 14,633,958 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 23,132,265 | $ | 20,174,178 | ||||
See accompanying notes to consolidated financial statements.
| SONO-TEK CORPORATION CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| Fiscal Year Ended | ||||||||
| February 29, 2024 | February 28, 2023 | |||||||
| Net Sales | $ | 19,699,886 | $ | 15,058,203 | ||||
| Cost of Goods Sold | 9,855,311 | 7,406,196 | ||||||
| Gross Profit | 9,844,575 | 7,652,007 | ||||||
| Operating Expenses | ||||||||
| Research and product development | 2,885,773 | 2,149,525 | ||||||
| Marketing and selling | 3,695,870 | 3,169,730 | ||||||
| General and administrative | 2,080,447 | 1,649,761 | ||||||
| Total Operating Expenses | 8,662,090 | 6,969,016 | ||||||
| Operating Income | 1,182,485 | 682,991 | ||||||
| Other Income (Expense): | ||||||||
| Interest and Dividend Income | 529,735 | 140,042 | ||||||
| Net unrealized gain/(loss) on marketable securities | 32,360 | (33,119 | ) | |||||
| Income before Income Taxes | 1,744,580 | 789,914 | ||||||
| Income Tax Expense | 303,117 | 154,009 | ||||||
| Net Income | $ | 1,441,463 | $ | 635,905 | ||||
| Basic Earnings Per Share | $ | 0.09 | $ | 0.04 | ||||
| Diluted Earnings Per Share | $ | 0.09 | $ | 0.04 | ||||
| Weighted Average Shares – Basic | 15,743,763 | 15,735,451 | ||||||
| Weighted Average Shares – Diluted | 15,774,007 | 15,769,499 | ||||||
See accompanying notes to consolidated financial statements.
| SONO-TEK CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Fiscal Year Ended | ||||||||
| February 29, 2024 | February 28, 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Income | $ | 1,441,463 | $ | 635,905 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 597,166 | 510,868 | ||||||
| Stock based compensation expense | 203,577 | 256,740 | ||||||
| Accounts receivable reserve | — | (43,898 | ) | |||||
| Inventory reserve | 47,875 | 4,864 | ||||||
| Unrealized (gain) loss on marketable securities | (32,360 | ) | 33,119 | |||||
| Deferred tax asset, net | (442,210 | ) | (512,337 | ) | ||||
| (Increase) Decrease in: | ||||||||
| Accounts receivable | 163,155 | (497,463 | ) | |||||
| Inventories | (2,026,946 | ) | (874,531 | ) | ||||
| Prepaid expenses and other assets | 46,308 | 69,258 | ||||||
| (Decrease) Increase in: | ||||||||
| Accounts payable | 238,879 | 126,352 | ||||||
| Accrued expenses | 312,032 | (376,582 | ) | |||||
| Customer deposits | 581,541 | 1,670,197 | ||||||
| Income taxes payable | 33,386 | 322,547 | ||||||
| Net Cash Provided by Operating Activities | 1,163,866 | 1,325,039 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of equipment, furnishings and leasehold improvements | (794,690 | ) | (555,867 | ) | ||||
| Sale of marketable securities | 20,237,051 | 14,329,159 | ||||||
| Purchase of marketable securities | (21,826,042 | ) | (16,584,288 | ) | ||||
| Net Cash Used In Investing Activities | (2,383,681 | ) | (2,810,996 | ) | ||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (1,219,815 | ) | (1,485,957 | ) | ||||
| CASH AND CASH EQUIVALENTS: | ||||||||
| Beginning of year | 3,354,601 | 4,840,558 | ||||||
| End of year | $ | 2,134,786 | $ | 3,354,601 | ||||
| Supplemental Cash Flow Disclosure: | ||||||||
| Interest Paid | $ | — | $ | — | ||||
| Income Taxes Paid | $ | 712,092 | $ | 363,590 | ||||
See accompanying notes to consolidated financial statements.
| SONO-TEK CORPORATION PRODUCT, MARKET, AND GEOGRAPHIC SALES | |||||||||||||||||||
| Product Sales: | |||||||||||||||||||
| Twelve Months Ended | |||||||||||||||||||
| February 29, | % of | February 28, | % of | Change | |||||||||||||||
| 2024 | Total | 2023 | total | $ | % | ||||||||||||||
| Fluxing Systems | $ | 724,000 | 4 | % | $ | 1,179,000 | 8 | % | $ | (455,000 | ) | (39 | %) | ||||||
| Integrated Coating Systems | 2,889,000 | 14 | % | 1,114,000 | 7 | % | 1,775,000 | 159 | % | ||||||||||
| Multi-Axis Coating Systems | 10,075,000 | 51 | % | 6,785,000 | 45 | % | 3,290,000 | 48 | % | ||||||||||
| OEM Systems | 1,533,000 | 8 | % | 2,144,000 | 14 | % | (611,000 | ) | (28 | %) | |||||||||
| Other | 4,479,000 | 23 | % | 3,836,000 | 26 | % | 643,000 | 17 | % | ||||||||||
| TOTAL | $ | 19,700,000 | $ | 15,058,000 | $ | 4,642,000 | 31 | % | |||||||||||
| Market Sales: | |||||||||||||||||||
| Twelve Months Ended | |||||||||||||||||||
| February 29, | % of | February 28, | % of | Change | |||||||||||||||
| 2024 | Total | 2023 | total | $ | % | ||||||||||||||
| Electronics/Microelectronics | $ | 5,602,000 | 29 | % | $ | 5,509,000 | 37 | % | $ | 93,000 | 2 | % | |||||||
| Medical | 4,180,000 | 21 | % | 3,702,000 | 25 | % | 478,000 | 13 | % | ||||||||||
| Alternative Energy | 5,997,000 | 30 | % | 3,060,000 | 20 | % | 2,937,000 | 96 | % | ||||||||||
| Emerging R&D and Other | 315,000 | 2 | % | 347,000 | 2 | % | (32,000 | ) | (9 | %) | |||||||||
| Industrial | 3,606,000 | 18 | % | 2,440,000 | 16 | % | 1,166,000 | 48 | % | ||||||||||
| TOTAL | $ | 19,700,000 | $ | 15,058,000 | $ | 4,642,000 | 31 | % | |||||||||||
| Geographic Sales: | ||||||||||||
| Twelve Months Ended | ||||||||||||
| February 29, | February 28, | Change | ||||||||||
| 2024 | 2023 | $ | % | |||||||||
| U.S. & Canada | $ | 10,878,000 | $ | 6,804,000 | $ | 4,074,000 | 60 | % | ||||
| Asia Pacific (APAC) | 3,268,000 | 3,260,000 | 8,000 | 0 | % | |||||||
| Europe, Middle East, Asia (EMEA) | 4,333,000 | 3,448,000 | 885,000 | 26 | % | |||||||
| Latin America | 1,221,000 | 1,546,000 | (325,000 | ) | (21 | %) | ||||||
| TOTAL | $ | 19,700,000 | $ | 15,058,000 | $ | 4,642,000 | 31 | % | ||||
FAQ
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