SONO TEK CORP Q4 FY2022 earnings call

• Sono-Tek has a revolutionary thin film coating technology used in various high-tech markets. - Strategic shift to complete solutions has broadened addressable market and increased average unit selling prices. - Focus on new markets: microelectronics/semiconductors, clean energy, medical devices. - Fiscal 2022 net sales $17.1M, up 16%; gross profit margin 50.3%, up from 47.2% in 2021; operating income up 41%; net income $2.5M, up from $1.1M in 2021. - CapEx for fiscal 2022 was $386,000, focused on manufacturing facility upgrades. - Fiscal 2023 expected to be highest annual sales, first quarter 2023 on track for double-digit growth.

Fiscal 2022 net sales were $17.1 million, up 16% from fiscal 2021. By market: Alternative energy market grew 72% to $3.7 million, medical market grew 29% to $4.3 million, electronics market grew 19% to $7.1 million, industrial market down 53%. By product: Multi-axis coating systems increased 77% to $9.9 million, OEM sales increased 51% to $2.4 million, integrated coating systems down 72%. By geography: Approximately 68% of sales originated outside the U.S. and Canada in FY '22, with U.S./Canada, APAC, and EMEA showing growth, and Latin America showing a 10% decline in sales.

• Fiscal 2023 is expected to be Sono-Tek's highest annual sales. - First quarter of FY 2023 ending May 31 is on track for double-digit year-over-year growth. - Next earnings call in October for first half fiscal year 2023 financial results ending in August.

Q: How is the ultrasonic coating equipment market changing in size and Sono-Tek's share?

A: There's a rapid shift to production levels with ultrasonic coating machines, moving from R&D-focused to larger production solutions. Sono-Tek's product line has shifted accordingly.

Q: How are customers' needs changing in the larger general coating equipment market?

A: Customers' needs are shifting to require thinner, more uniform coatings with less liquid chemistry, and Sono-Tek's roll-to-roll program addresses this.

Q: Details on clean energy segment growth and Sono-Tek's fit?

A: Clean energy is growing due to global focus on alternate energy, Sono-Tek has strengths in hydrogen, fuel cells, etc., and is well-positioned to benefit.

Q: Expectations for CapEx going forward?

A: Slight rise in CapEx expected, driven by increasing efficiencies through automation and technological advancements to accommodate growth.