SOTK - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Sono-Tek Corporation Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please now Stephanie Prince, would like to to over conference the PCG turn I Advisory. Please go ahead.

Stephanie Prince

Thank to you, everyone you joining us Carrie, today. and thank

pre-market Sono-Tek morning. fiscal second released results their quarter this

a call copy Steve With Web today geography release/news sales market the company's sono-tek.com tab of If you will the at part don't me of release Chairman on release, discussion. CEO; section. to site and the please the on click and Financial Investors tables Chris the the Harshbarger, last and in page and are on of the be Sono-Tek's Bagley, go press Coccio, President product, have today's Officer. Steve COO; Chief and The

make various remarks note Litigation call statements Before prospects statements. of purposes the of Please that the from remarks company about forward-looking Securities and for materially to the including turning the on over those I Act call. constitute the those under call like to company information following the future filings Chris in like in to turn by the SEC. statements as Actual these concerning vary call obligation this the over XXXX. Chris? to Private a important result discussed may Reform results be Chairman management, company's the this may of provisions forward-looking conference made with factors, assumes I plans Sono-Tek. forward-looking CEO no of The various indicated contained Safe conference Harbor the expectations, to for would and update would now Coccio,

Christopher Coccio

first-ever for joining earnings Thank Thank you, conference today us you Stephanie. for Good everyone. our call. morning,

and earnings hold to calls like at fiscal results. planning year-end midyear our for we're now, for year; two For today

financial August were is end ended morning earlier this results and a then of second Steve XXXX. that will with some growth the released Steve business Financial fiscal going sales quarter. COO, I then Sono-Tek's results the opening fiscal begin February Chief Bagley, review second XX. remarks Harshbarger, XXXX operational of quarter XX, will President and Officer, discuss provide the and for will through guidance. and we're our to the Today, year go

will that, for your the questions. we Following call open

new their of devices, those as thin on that ago. achieve Sono-Tek coatings. The of to such that nozzles [indiscernible] to incorporated focused as important coatings control coatings and the and revolutionary process tools technology Sono-Tek, high-frequency use industrial systems method are fuel such markets several medical are cells, applying film require of customers. developed ultrasonic micron who you proprietary precision involves thin tech semiconductor and motion disability for We solar the devices, into food So able electronic patented high line, manufacturing, glass decades

Latin Over the years, our we've U.S. Asia, footprint to Europe, from America. and expanded

average selling and in savings shift material, dramatic strategic versus offer solutions made usage significant and energy growth prices. in Our are water the we to that resulted addressable market ago environmentally other more broadened solutions has and complex we friendly offer among our our complete in has sales component years raw The advantages. several

around usage over Our continue devices for as We become larger sometimes prices sell grow demand miniaturized machines to anticipate to $XXX,XXX world. now more Sono-Tek’s the growing electronic will reach devices X often and system keep and implantable technology over for the medical continues million. of

year-over-year cash XX%. zero million on very up with strong in profit built recent our and increased was We as with quarter XX second The was XX% balance nearly ended and a the period gross trends debt. sheet sales strong and

and for there of is and energy. of We income focus semiconductor, upside expect our year our finish to and opportunity in lot medical double and with [indiscernible] in digit markets the clean sales growth growth a history,

trading uplist during to has accorded our the work in exchange listed hard accomplishments the national Capital NASDAQ turn team's August. a and for The call our approved Bagley, NASDAQ higher with commemorate recognized volume much being exposure to milestone. details excited at to results. to some were bell common visibility Steve on now the our increased I’ll important when stock over this to institutional We're from were shareholders Our our Steve? financial ring the and investment CFO, quarter Markets of we community.

Stephen Bagley

good Thank morning, you, Chris, and everyone.

quarter Now looking at results. our fiscal second

last up second quarter X.X net or million, second fiscal quarter the For from XX% were XXXX, of sales the year. $XXX,XXX of

Operating million. to period. our share prior margin $X.XX compared basis of XX% sales margin for points. earnings of equivalents the Net for key to Operating with due XX,XXX,XXX in $X.X in product basis, with During is XX, an end. offset compared compared quarter increase operating increased improvement year in quarter short-term U.S. XX,XXX,XXX on XXXX partially cash increased to were improvement originated investments to The sheet mix. slightly XXX There when outstanding the XXXX. and year increased quarter. February the to Growth expenses. and compared August combined by Cash million income, the compared $X.XX weighted were year-over-year favorable and with $XXX,XXX. were was a shares X.X year. year increased Canada prior to prior year and the income gross XX, gross to fiscal X.X operating On to the debt balance no X.X% prior average increased in improvement XX% end the of income $XXX,XXX. were Diluted the sales, at XX% XX% outside factors for of the a XX% year per increased million, at the profit was Gross increased with profit revenue quarter, approximately compared XXX% XX.X% in period, which profit of The prior approximately XX% period. with an

President quarter Harshbarger, and Steve ongoing now And of a approximately for COO, to year, Second $XXX,XXX CapEx manufacturing project for CapEx quarter we will Steve? turn for facilities. review. over full $XXX,XXX. was upgrades the the XXX,XXX second call fiscal company's total the I'll to operational

Steve Harshbarger

taking morning, our good to all everybody. you the Thanks, appreciate listen to today. time Steve, call I and

tables If is of up order XX% quarter The kits. rapid release the the product significant and by driven By on how to electronic comparison in you sales systems second that's primarily devices was quarter coat and products, increase that was QX that's to shipped we coating for diagnostic look to page down second or were sales with nearly the markets, ways; of geography, a systems. our being that I'm this morning, them sales morning. Fiscal are XXX,XXX, year. shipment in last multi-axis by talk which out now used three second last at test this line, this our going short you'll quarter earnings in COVID put net about break see X,XXX,XXX, the

due this and semiconductor Our were up OEM partners. partners our as as well fluxing OEM XXX,XXX to from or sales strong PCB sales our and XXX%, was OEM

QX. market market segments, well driven China alternative XX% Looking semiconductor to just The used strong market, kits. for in that was OEM in This the electronics energy also the was strong sales increased by quote as mentioned sales those us. to systems test COVID as devices for the by rapid diagnostic I market at the primarily for our systems electronic to

a sales clean cells, industry as are XX% COVID-XX China, We Canada specialty lockdowns follow-on machines, energy carbon continue for device which manufacturing led to outside private well originated was quarter system, from by demand medical that sector well APAC second capture driving of our sales as online. strong well included strong and several investments for XX% developed to applications. and with These compared U.S. strong last reflects quarter. the our that really were used China bringing year’s from and and coating as during approximately geography, of delivery as our newly the growing as our countries stent for in the transition the overseas emerging semiconductor fuel primarily quarter to both companies operations of from another coating and back in sales OEM coding the driven customers. for By Shipments government machines the see as membranes second

shipped times focus Singapore initiatives. of a EMI is area part at APAC electromagnetic about our included machine as which coating for coating, growth emission that an to spoken we've sales outside several and of Looking new China,

adapting period. a and QX, really that on the shipment machines and to sales pandemic ago. these end large year's of directly in of industrial our latest for and [ph] in XX% machine Backlog advanced Sales high the really are to six part efforts dips. the quarter, end catheter As Japan. large our the of coding the operational strategy expect period. operations, large QX of balloon of that shipped during laboratories. foreseeable glass pandemic, We to XX% last vary second in primarily this activity of line coating first the had didn't Throughout development of of the increase a and QX which This quarter. Canada from repeat has record here. to COVID-XX reached increase our sales float countries also This did year. COVID a really There an year's from a packet related last because U.S. to to repeat dip be future coating most of well been repeat this glass XXXX the our those and growth Sono-Tek's been product due helpful order This strategy is is market in company for we the application the peaks of to current energy year-over-year, believe to softening our these was the was end of as period in float Sono-Tek's at impact typically of we the this and the months isn’t increasing is line refocusing an from didn't the us compared X,XXX,XXX to order go-to-market our that expanding sales fiscal unusual we

staffed home us labs they of York, focus network to solutions for the distributor base has New separate generation with medical are an closing, lot and sites that And work of our here strong a Our Sono-Tek, markets labs excited with of really globe we're our outlook. their and semiconductor, momentum for energy. in advantage In of engineers important next around Sono-Tek growth a are in others. develop experienced our clean our for opportunities accorded customers from and together about and Sono-Tek course, application These located highly products. at

the the sales ahead, guidance year half both for comparable sales last double is digit as of third Looking year increases fiscal the periods for of the as for our growth well back over And the growth, our for Sono-Tek highest which history. be which be expecting double quarters. will corporate fourth the XXXX, annual ending XX, is will now February year, in digit fiscal year-over-year

the operator. open presentation. formal our we questions, back like So now for of it And to this and call concludes part send the the to over I'll up

Operator

begin We question-and-answer now [Operator Instructions]. will the session.

first Our Ryan question come will go Colliers. of ahead. Please Dick from

Richard Ryan

last Thank calls. you also taking makeup -- the recall on backlog, question base. orders you system, host one kind that Steve, in at backlog? earnings to the shareholder there. can quarter, of and sitting And level and of million the look I That's any a Great. there backlog? of important a in orders trying Did was quarter give large deliver? for million orders to the are and If questions the X.X in for us there X.X large starting just for

Steve Harshbarger

planned of this -- that, to system Sure. semiconductor that shipping Good larger because that we five these right typical unit machines backlog QX year backlog ship five which platform and now a is in out is which is million them. now. build in fiscal is to our be morning, do longer be fiscal time months chunk going The machine offer that's system that's from value we robot shipping to year million be our also next X-axis this or that year. anticipate backlog which are a will probably though now X.X they some another in be high the in into months anticipate have of a high it out, when being that's The Right that's than other sold that now. good out still four dollars, to and Dick. X We is so to heading of going them

question there, would that your be answer as be So expected us. to for Dick? Does that

Richard Ryan

the just cancellations or look And mean, QX? -- for didn't Yes. did slipped in orders know how also and were that there I I then any the anything backlog if

Steve Harshbarger

us This initiatives orders so is got company it backlog just our growth and we starting really this backlog The we had, and through and much. to ever history. increasing our reflected you've for have had It's I in to to come solid. highest exciting pretty show Obviously, us for know acceleration, we've see ever many of and so were promise. is the think

do machines, don't in is QX to large in these but Again, our QX, into or report of going taken of on course not actually be orders backlog. the received, QX. orders were the most QX. reflected QX, they going ship though They're even in So we it always

can that orders as You far the right see as number reflects obviously in that for there it high. came was quite us of

Richard Ryan

you Any to the half the share year? operating either us give the or QX you'd anticipating for back of How about QX, Okay. that care guidance sales side? on side on comment margins you're or gross margin for

Stephen Bagley

as was margins high past a result This our OEM systems. margins of obviously, XXs, typically a bit for higher a lot the to than range. We quarter, little that are mid higher XX% XX% were a typical quarter us. And to operate Sure. than bit this of that in

sell those. range high long what operating And Our are is dollar margins nozzles this very be excellent margins, margin the high that's margins into think -- excellent, which back getting lower our on the normal going in make to I be but systems. quarter. was we And reflected XXs. nozzles. down we'll term probably Heading those forward, systems, for We

still the impacting the and in to that we in shortage seeing out coming just us lot not support U.S. However, semiconductor happening it's chip There's in are that's here short particular the industry. these Asia of of OEM often everybody, customers term, a

customers, OEM lot continue we'll which lot buying at them. to And period in to I that. least have going the of And it's I profit So of kits, some particular, continue a time nice smaller we're if or seeing be beyond our on Asia of that's think quarter But for margins continuing a our going for OEMs, don't so. here. know another

Richard Ryan

your Can partnerships just of the the into kind and try alternative next say me? cells, last looking with you've fuel great. going for for tie role then about to in capture. together One you some capability that's one; year that kind you've of new role had talked tie so, onesie-twosie and the let's efforts out over to Okay, and energy, business or COX those

Steve Harshbarger

they're membranes product focused is applications, serve coating COX on area where membrane this that very for The are carbon markets fuel it and it's fuel manufacturing really the all Sure. either people our is that are Sono-Tek because devices the or membranes, where on capture in application marketplace, Almost that capture is the come very, companies and is very, call very of have PEM our they carbon similar. the and that cells an out similar. And the cell technology industry.

over knew we’re cells. from for many was membranes knew that membranes. came capture because us from well awesome so And at fuel for bases, And again customer transition an really cell our of already us area fuel as we well, simple go carbon very to them to they to coding us

technology roll customers roll volume these their is demand over we've they an have membranes been them. they from bring over manufacturing they what's volumes, that the doing individual [ph] mid these really start to is to with changing to for manufacturing. happened increased are following pieces there. to higher low us it now go market in of basically versus And coating of start So And volume seeing some to what as increase to we're to

well, do do roll to to were of no one's plan volumes. starting roll of really you Well, and a we'd If no volume question one's ask making to now years because roll higher the roll starting any couple to to they're ago, same to these. say, doing

and roll membranes. roll comes our to the these experience awesome win to for deal great of which a going to this roll is an us. the of of engaged be we believe creation industry with as from with we outside in has combination that's technology experience a partner experience coding So for And real this partner, really roll this

coding us roll roll helping this So machine a new develop partner is will involve that technology. now to

be other for of familiar in that expand also it both allow that we carbon as roll will outside will fuel to areas are with as membranes, applicable membranes capture. to once roll And these cell hoping get us technology. For we well

additional serve some on that to today. be have to follow-on able now we of there's as So hope this a we program going markets right result that

Richard Ryan

Okay, Thank great. congratulations. you and

Steve Harshbarger

I Dick. appreciate it. Thanks,

Operator

from Circle Bill Next of Nicklin question comes ahead. Please N. go

William Nicklin

Good morning.

Steve Harshbarger

Good morning, Bill.

William Nicklin

help you of piece a fairly capacity Could me complex you question? which own you of land. have out kind a of buildings on I with know extensive a

and you your out the are some vacant space or build of -- mix into if you have buildings in projected your how think the much you facilities mix Given get out still do those existing revenue of can current them? that facilities business,

Steve Harshbarger

that latest to our in existing the Well, But to buildings should was in which to expansion, would easily sales the is also up us of of to and last in that plan. XX go allow own area And area. Sure. ability expand presently are complex. likely somewhere million into XX the possibly. year, And our our our million $XX allow renting now million, have that $XX reach some us within that over completed we million we buildings

that tenants. and those we'll short-term year. of more we've actually presently more grow, taking last with we're what signing occupying have we've renting. we're been been as at next a at we we been We the As over doing. now building and time, one grow, every take couple right And we and next in space over just that's building taking a Even we're years, time. space our only the and leases one are three And not buildings

William Nicklin

Thanks.

to them? speed tend on really you you technology they capacity your get Another them engineers in use is new get question, products? get sophisticated very what do you that your you to a How be do employees up that how when

Steve Harshbarger

lot these good Yes, because are as that program, present mouth years. fairs, from fellow ads. recruit recruits it's really I to We job seen to still Sono-Tek’s the the the what here. we've The work you about years them brightest they're just for employees lots our join, get join the is, really we like None our get two, methods of of them way. you. methods we've is very tell recruitment, when for excited And work of contribute hope they try three a really on hard doing employee help to it a in you it's tell a their then a so early to following. We question, on unique over really such great in really best environment. really engineers are someone once years wanted word us get developed which takes as And technology got conventional to new I'll mentioned, of to college one, internship then tried they classes And effective and fully though strong to and before significant hold web, in that students.

retention employee to is So really us. important

our today that positions growth people five think is or around job our plan this headcount point. that right open now And six right in are XX area. I I have we at to think now support

William Nicklin

they're us. for appreciate and Looks Thank I the numbers, like hiring it people right because counts you've been That's what Nice turning for that's me. the you. Okay. job. out it.

Steve Harshbarger

I it. to Bill. Good Thanks, you. appreciate talking

Operator

back to like for concludes any to Chris turn I'd closing [Operator conference question-and-answer Instructions]. session. the Coccio questions, remarks. over now With the further this

Christopher Coccio

We've really a us today. exciting Okay. Thank all you future. thank for you got joining and

directly when for ending contact you a We'll XXXX. business Have any strong be great year-end if is report and questions. potential day year fiscal about and February XXXX that Bye has have Please hold our further great call results got we at [indiscernible] and been conference and Our us talking the looking now. well. the accelerating us. for we've

Operator

The now all Thank attending today's conference for presentation. has concluded. you

Have may great now day. You a disconnect your lines.

Sono-Tek (SOTK) 13 Oct 212022 Q2 Earnings call transcript