- Strong backlog of $3,202,000
- Achieved net income of $168,000, up 572%
- Company expects second quarter revenues to increase over last year
MILTON, N.Y., July 15, 2020 – Sono-Tek Corporation (OTCQX: SOTK), the leading developer and manufacturer of ultrasonic
coating systems, today reported financial results for its first quarter of fiscal year 2021, ended May 31, 2020.
“In the first quarter of FY2021, we achieved our forecasted 20% plus revenue growth, along with a significant improvement
in the bottom line. More importantly, we continued to invest in upfront resources in Engineering and Application
Engineering. Application Engineering especially has become an essential element in our growth strategy of pursuing larger,
more complex ultrasonic coating systems. These orders increase our average revenue per order and provide for longer
delivery times compared to our more typical orders. We were pleased to be able to quickly shift our customers’ work with
our Application Engineers and development labs to a virtual experience.
We experienced a significant sales increase in our Integrated Coating Systems this quarter, and these were shipped to the
Electronics/Microelectronics and the Medical segments of our business. Globally, our sales to the Asia Pacific (APAC) region
were strong, resulting in 78% of our sales originating from outside the United States and Canada compared to 56% in last
year’s first quarter.
Due to both new orders and existing long delivery pre-Covid backlog this quarter, we are expecting second quarter revenues
to increase over last year. Looking ahead, we believe that the ongoing strength of our business, combined with continued
expense control and our strong balance sheet, position Sono-Tek well for the future”, commented Dr. Christopher L. Coccio,
Chairman and CEO.
Sales growth was driven by demand for Sono-Tek’s customized, highly engineered and high value integrated coating systems
primarily for the Electronics / Microelectronics market in the first quarter of fiscal 2021. A significant customer took
delivery of a system valued at over $700,000 in this market, and further orders from this customer are expected in the
From a product sales perspective, Integrated Coating Systems revenues increased 197%. However, quarterly demand and
revenue in any of the Market or Product baskets typically varies due to the size and timing of orders, so the multi-quarter
totals at year-end are often more significant in reflecting overall Market and Product trends.
See the accompanying tables at the end of this release for a breakout of sales by Market and Product.
In the first quarter of fiscal 2021, approximately 78% of sales originated outside of the United States and Canada compared
with 56% in the prior year period. Significantly, sales in the APAC region increased 297%, primarily led by several shipments
to China, as manufacturing operations came back online following temporary COVID-19 shutdowns.
The change in product mix resulted in a slightly lower gross margin of 45.5%, and combined with tight expense control,
resulted in a 572% increase in net income to $168,000 this quarter.
Balance Sheet and Cash Flow Overview
Sono-Tek has built a strong balance sheet with solid levels of cash and cash equivalents compared to a minimal level of debt.
Cash and cash equivalents and short-term investments at quarter-end were $8.3 million, up from $7.9 million at the end of
fiscal 2020. The increase was the result of the current period’s net income and noncash charges and the proceeds of long
term note payable partially offset by purchases of equipment and the repayment of long-term debt.
Cash used in operating activities was $396,000 in the first quarter of fiscal 2021 compared with generating $362,000 in the
prior fiscal year period. Capital expenditures in the first quarter of fiscal 2021 were $152,000 compared with $129,000 in
the prior fiscal year period.
Sono-Tek Corporation is the leading developer and manufacturer of ultrasonic coating systems for applying precise, thin film
coatings to protect, strengthen or smooth surfaces on parts and components for the microelectronics/electronics, alternative
energy, medical and industrial markets, including specialized glass applications in construction and automotive.
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 microscopic coating technologies that enable better outcomes for its
customers’ products and processes.
For further information, visit www.sono-tek.com.
Safe Harbor Statement
We discuss expectations regarding our future performance, such as our business outlook, in our annual and quarterly reports, press
releases, and other written and oral statements. 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. 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; the duration and scope of the COVID-19 pandemic; the extent and duration of the pandemic’s adverse effect on economic and social activity, consumer confidence, discretionary spending and preferences, labor and healthcare costs, and unemployment rates, any of which may reduce demand for some of our products and impair the ability of those with whom we do business to satisfy their obligations to us; our ability to sell and provide our services and products, including as a result of continued pandemic related travel restrictions, mandatory business closures, and stay-at home or similar orders; any temporary reduction in
our workforce, closures of our offices and facilities and our ability to adequately staff and maintain our operations resulting from the
pandemic; the ability of our customers and suppliers to continue their operations as result of the pandemic, which could result in
terminations of contracts, losses of revenue, and further adverse effects to our supply chain; maintenance of increased order backlog, including effects of any COVID-19 related cancellations; 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; 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.
We undertake no obligation to update any forward-looking statement.
For more information, contact:
Stephen J. Bagley
Chief Financial Officer