SONO TEK CORP Q2 FY2022 earnings call

• Chris Coccio noted Sono-Tek's strong second quarter with 17% sales growth and 28% gross profit increase, and mentioned the company's strategic shift to complex solutions and expansion into global markets. • Steve Bagley provided financial details: net sales, gross profit, operating income, and net income increases, along with strong balance sheet (nearly $10 million in cash, zero debt). • Steve Harshbarger discussed operational results: sales growth by market, geography, and product; backlog reached a record high of $6.3 million; focus on semiconductor, medical, and clean energy markets; and sales growth guidance for the back half of fiscal year with double-digit increases.

For the second quarter of fiscal 2022 ended August 31, 2021, net sales were $4.1 million, up 17% from the prior year. Gross profit increased 28% to approximately $2.1 million, with a gross profit margin of 51% (up from 46.6% prior year). Approximately 62% of sales originated outside of the U.S. and Canada in Q2 2022 compared to 38% in the prior year period. By product line, sales growth was primarily driven by multi-axis coating systems and OEM sales (up 264%). By market, electronics sales increased by 79% and alternative energy was strong. By geography, overseas sales, led by APAC (especially China), were up significantly.

• Expect double-digit sales growth for the back half of fiscal year (third and fourth quarters) compared to comparable periods last year. • Fiscal year 2022 is expected to have double-digit year-over-year growth, the highest annual sales in corporate history. • A 6-axis robot system for the semiconductor market in Q4 of 2022, with backlog including orders shipping in current and next fiscal year.

Q: Could you give details on orders, backlog, and if a large system delivered?

A: The 6-axis robot system for semiconductor is in backlog, planned to ship in Q4 2022. Most backlog ships in current fiscal year, with some larger machines shipping in next fiscal year.

Q: How about capacity and revenue from existing facilities?

A: Latest expansion allows over $20 million in sales in existing buildings, potentially up to $24 million, and can expand into vacant buildings for higher revenue.

Q: Capacity question about new employees and technology speed?

A: Recruits through word of mouth and internship program; new employees take 1-3 years to become fully effective due to unique technology.

Q: Question on alternative energy and roll-to-roll capability?

A: Transitioning to roll-to-roll coating technology for membranes in fuel cells and carbon capture, engaged a partner with roll-to-roll experience to develop a new machine for this.