Sono-Tek Reports Sales of $3.48 million in Second Quarter Fiscal 2021 and 50% Increase in Net Income and Provides Second Half FY2021 Sales Guidance

Rhea-AI Summary

Sono-Tek Corporation (SOTK) reported a 4% increase in second quarter revenues to $3.48 million and a remarkable 50% rise in net income to $178,000. For the first half of FY2021, sales reached $6.9 million, a 12% year-over-year growth, with net income more than doubling to $346,000. The company's backlog surged 45% to $5.1 million compared to February 2020. Looking forward, Sono-Tek anticipates continued growth as global industrial markets recover.

Positive

• Second quarter revenues increased 4% to $3.48 million.
• Net income rose 50% to $178,000 in the second quarter.
• First half FY2021 sales up 12% to $6.9 million.
• Net income for the first half more than doubled to $346,000.
• Backlog increased 45% to $5.1 million.

Negative

• Decrease in medical business revenue due to COVID-related order delays.

• Second quarter revenues increased 4% to $3.48 million; second quarter gross margin was 46.6% versus 46.2%
  
• Second quarter net income increased 50% to $178,000
• First half FY2021 sales of $6.9 million increased 12% year-over-year; net income of $346,000, more than doubled from the $140,000 reported in the prior year period
• Backlog increased 45% to $5.1 million from February 29, 2020
• Second half of fiscal 2021, ending November 30, 2020, is expected to continue on the increasing sales trend experienced in the second quarter, as global industrial businesses continue to recover.

MILTON, N.Y., Oct. 14, 2020 (GLOBE NEWSWIRE) -- via NewMediaWire -- Sono-Tek Corporation (OTCQX: SOTK), the leading developer and manufacturer of ultrasonic coating systems, today reported financial results for its fiscal year 2021 second quarter and year-to-date period ended August 31, 2020.

Dr. Christopher L. Coccio, Chairman and CEO, commented, “In the second quarter of FY2021, Sono-Tek recorded 4% revenue growth and a 50% increase in our bottom line compared to last year’s second quarter. The increase in net income reflects growth in revenue and gross profit as well as tight expense control and reductions. The Coronavirus has impacted some of our customers, particularly in the timing of orders, but we have been able to win orders in other areas to maintain some of our pre-Covid positive momentum, as demonstrated by the first half of the year 45% increase in backlog. We believe that our performance has been excellent given the uncertainties that most businesses have faced this year.”

“The growth in sales was driven by a significant shipment of an integrated coating system for the industrial market valued at $400k, plus a strong quarter for Multi-Axis coating machines sold to the Alternative Energy market, which combined to offset the slight decrease in sales of fluxing systems and other smaller units. The Alternative Energy market growth was driven by US companies interested in electrolyzer and fuel cell coating equipment, which is associated with carbon reduction energy supply. Our Medical business experienced a dip in revenue as several orders were put on hold due to COVID, but we are optimistic these will come back as various countries come back online,” continued Dr. Coccio.

“Our strategy to provide customers with a high level of application engineering support, in combination with large complex ultrasonic coating systems that are often highly customized, continues to cushion our business in these difficult times. For example, in July we announced a $1.5 million order for a highly engineered proprietary 6-axis ultrasonic coating system for an important European customer in the electronics industry. This order is among the largest orders that we’ve received in our history and is a direct result of the close collaboration between our engineers and the customer.  These types of orders have increased in frequency over the past few years, and importantly, have increased our average revenue per order from tens of thousands of dollars to hundreds of thousands of dollars currently.”  

“As a result of the increase in our backlog this quarter, we are expecting third quarter revenues to increase over the second quarter and for this trend to continue through the balance of the fiscal year, ending February 28, 2021. Sono-Tek’s flexibility in quickly refocusing its efforts to those countries that are operational has been helpful in softening the impact of the pandemic and will continue to be a part of our strategy for the foreseeable future,” concluded Dr. Coccio.

Year-to-Date Fiscal 2021 Results (Narrative compares with prior-year period unless otherwise noted)

	Six Months Ended August 31,		Change
	2020	2019	$	%
Net Sales	$     6,909,000	$     6,168,000	741,000	12%
Gross Profit	3,182,000	2,852,000	330,000	12%
Gross Margin	46.1%	46.2%
Operating Income	$           386,000	$           97,000	289,000	298%
Operating Margin	5.6%	1.6%
Net Income	$         346,000	$         140,000	206,000	147%
Net Margin	5.0%	2.3%
Diluted Earnings Per Share	$                0.02	$                0.01
Weighted Average Shares - Diluted	15,531,000	15,377,000

Second Quarter Fiscal 2021 Results (Narrative compares with prior-year period unless otherwise noted)

FAQ

What were the second quarter earnings for Sono-Tek Corporation (SOTK)?

Sono-Tek Corporation reported second quarter revenues of $3.48 million and net income of $178,000, marking a 4% revenue increase and a 50% increase in net income.

How did Sono-Tek's first half FY2021 sales compare to last year?

For the first half of FY2021, Sono-Tek's sales reached $6.9 million, representing a 12% increase year-over-year.

What is Sono-Tek's current backlog as of October 2020?

As of October 2020, Sono-Tek's backlog increased 45% to reach $5.1 million.

What is the outlook for Sono-Tek Corporation (SOTK) for the remainder of fiscal 2021?

Sono-Tek expects to maintain the increasing sales trend experienced in the second quarter through the rest of fiscal 2021.