Sono-Tek (SOTK) investor relations material

Executive summary

• Net sales for Q3 FY2026 were $5.0M, down 3.6–4% year-over-year, marking the seventh consecutive quarter above $5M, driven by medical market strength and high-ASP production systems.

• Gross profit rose 7.2% to $2.51M, with gross margin up to 50% for the quarter and 51% year-to-date, reflecting improved product mix and cost discipline.

• Operating income increased 61–61.4% to $319K for Q3; net income rose 24% to $340K for the quarter and 32% to $1.25M for nine months.

• Record backlog reached $12.26–12.3M at quarter-end, up 16% year-over-year and 9% sequentially, indicating strong order momentum.

• Nine-month net sales were $15.3M, essentially flat year-over-year.

Financial highlights

• Gross profit for the nine months increased 6% to $7.77–7.8M, with gross margin at 51% versus 48% prior year.

• Operating income for nine months rose 69% to $1.22M, with operating margin at 8%.

• Cash, cash equivalents, and marketable securities totaled $11.7–12.26M at quarter-end; no outstanding debt.

• Working capital increased by $1.85M to $15.36M since February 2025.

• Basic and diluted EPS: $0.08 for nine months, $0.02 for Q3.

Outlook and guidance

• Management expects continued sales growth in medical and alternative energy markets, with a rebound in industrial sales anticipated in Q4 FY2026.

• Reiterated full-year FY2026 guidance, anticipating modest revenue growth.

• Order momentum and backlog in the medical device market remain strong.

• Anticipates wide variations in order flow and shipments quarter-to-quarter due to transition to higher-value, complex machine solutions.

• Management remains watchful of market adjustments due to clean energy policy shifts and tariffs, but expects medical market demand to offset these.