SOTK - Earnings call transcript Q2 2025

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Operator

Good morning, and welcome to the Sono-Tek Fiscal Second Quarter and First Half 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Kirin Smith with PCG Advisory.

Kirin Smith

Thank you, operator, and thank you, everyone, for joining us today.

Sono-Tek released their second quarter and 6 months of fiscal 2025 results this morning.

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

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

reminder, August As ended year. call months X Sono-Tek per for the our fiscal earnings This is calls XXXX. mid-year a XX, holds X currently

Our is February. fiscal year-end

ahead. months fiscal in fiscal over So end XX, XX February And XXXX next Coccio, Executive turn Chris will to Chris, earnings now the go for will Sono-Tek. on our be like would please May call call XXXX. I XXXX. to XXXX of the of Chairman

Christopher Coccio

financial and that Chief in a business market remarks more we're going of our followed opened. Steve the will The and good Kirin, and half He and released were the XXXX. this discuss then operational depth. review our CEO morning, President, and us. go thank will through Then to opening you, begin results morning Today, deeper Officer. for quarter Thank the year provide everyone, Bagley, with and you, second be by will I'll fiscal review. first Financial also Steve Harshbarger, before just some our joining

the questions. open call for we'll your comments, their Following

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carbon as well into showing green as hydrogen move our the capture results fuel is next-generation we transformative sector Additionally, sustainable help cells, other future. as shape generation applications clean companies solar in a cells, energy

later. we second the order and by in has history, in our see several into continued one is what where of quarter followed our another this weeks this customer So to saw year the we largest started same fiscal size

ahead XX% with grew us, first for the XX% saw year, pay income which investments excited million. excited record growth. in begun guidance. first half a year-over-year. in of We're our It's growth reflected which experienced our sequential the X% end that, by is $XX.X And quarter, continued net the off. last That line backlog. our top from second the half prior increase, fiscal to we history, is in annual we our for XX% of this very that our year the have revenue highest of On increased to way. We're For of

of helping. and on systems opening Our applications, coating technology our been growth success plus also shifting for new enhanced greatly at is with larger, the has for of aimed orders, complex multiple markets thin repeat by early outlook these more course, production strategy focus into our film

to ahead looking Harshbarger, year continued turn expecting go President. growth XXXX. it going now fiscal Steve we're Steve, the you. And Thank for a to second our and please So I'm to half, CEO ahead. over

R. Harshbarger

Okay. everyone, today. Thank and you, us Coccio, Dr. for thanks, joining

to enthusiasm. beginning really their extremely see to Chris' It's just our I to Firstly, gratifying echo hit stride. want investments

now integrated million close been solar scale process work production a And broadened There internally-made call platforms. the and design half in of they energy, and green their that of these a who to with sales These increased in-house high half for both first engineers. The to ASP hydrogen sales project, QX sales platforms QX systems in are by in for of was sector has partners and our integrated combat these as our prices which our supply Chinese due activity result with are X% their Aries. of under of NovoCoat a XXXX of customers revenues right the in and Aries solutions built-up an second R&D quarter our integration first that in chain a we been increase to capabilities XXXX, newest while clean full $X.XX OEM concerns project our supply with years we is a partners can generation, Our year capabilities sequentially, to fluctuate to happening product backlog machines. contain and our that's of the XX% capabilities build and we decade. vertical significantly lot inventory deepening a of first coating saw the pilot influenced advanced our which our and in of declining we continuing our circuit top line a systems, prior OEM the the more build by application which has some and our focus of China-based and All quarter were now. This the our in began ongoing did decline customer expected systems X fiscal starting of carbon a lines energy markets excess Project really multi-axis year-over-year and for half, including device highest systems on from as guidance several rolled energy of is division, chain rebound providing strong half X of our and were activity of and printed a project increasing the do for strongly first cells of as development reflection QX year expand which coating systems experienced for second last fuel series increased in system by expanding board our fiscal last become are economy sophisticated coating we've first chain a we softening multi-axis systems we're shipment having had issues cells, influenced own the PLC-based addressable customers Sono-Tek offering, of year. more the successful past for China OEM $X.X area. Fluxing increase a team the dipped experienced that or success and received with offering that somewhat to our which manufacturing transitioning time-to-time. revenue to as we our lower continue resolved. Clean used Meaningfully, from X year medical and over sales for the of our was in offset systems this half and product of commonly process our first clean experienced as from Altair, selling well Altair for and ASP to shipment product markets Multi-axis of substantial million. are X totaling of struggling Project stage systems average our into products. market. follow. The expanded capture sector saw sales many supply

X spare dipped a and growth. slightly for months, area this continues Although services the for be parts to focused first basket

applications. capture, membranes scale average solar ASPs. Many systems selling were quarter this Sales million. by in QX the prior the X pilot area manufacturing in and our to we recent could total sales as XX% sales much R&D market, spare carbon and more over included large XX% These high announcements fiscal or By of by first machines believe systems machines XX% these As for from as higher prior platform area potentially this period. cell grew production advanced are green reaching in systems follow-on line packages this positively year alternative generation and contract impacted months from result and XX% the services ASP year prices used critical our compared the Sono-Tek the systems grew value. energy to $X.XX our of fuel field, these though hydrogen quarter more totaling in customer cells the of number customers the we to growing of in high year a of ASP large and of place and parts to that to much transitioning large clean carry the and X for market again

year. second by Our benefited the electronic same X% newly last half wafer coating semiconductor directed and market. Medical of a sales in capabilities FY declined systems. the the shipments first in first stent for our at increased that by half and shuttling periods demand balloon developed coating XX% of in versus Both quarter driven XXXX, XX% includes last system first of the the year from primarily half of lower the sales versus quarter

research compared were our year. By geography, based comparable the sales period stent just more the sales contrast, was in not fiscal and year of repeat year, by times current before. is of down The and sales like our in slower backlog is year, half to last energy XX% sector the in primarily in fiscal customers Industrial Canada float respectively year. coating and the to of other down Act, sold expect XXXX. current reduced the the the and our they're by starting that decreased However, balloon this Inflation In the for half to XXXX. and shipped XX% on Asia half system XX% the reported influenced coating earlier first on sales first fiscal activity. respectively period remain were fiscal XX% QX in several dip the in glass This sales are system is as in we was CHIPS the float activity, current XX% of of spend to and business XXXX. this cash half talked the QX clean U.S. by Reduction repeat market respectively year likely were the other into XXXX partially recover did as U.S. increased are fiscal fiscal versus U.S. to reach sales approximately and quarter of our for it ours. Latin second difference markets. due now to the XX% QX subdued the XX% things the base fiscal areas APAC order system the China, of in I glass compared impacted These and system many second continuing which mentioned and remain customer influenced Sales we've to current positively of first the half sales Mexico This prior and investing QX X% that in were not and coating by in continued and Act first the by prior that a equipment have in while coating Canada prior starting to include momentum that of America the a XX% year. did to year such and initiatives and the several and fiscal resilient. government fiscal and about to that

our and expansion. from significant August sequentially QX orders. the in the and million is our hundred a invested compared of to XX, that receipt increased history strong focus alone, presence and We large our sales backlog and the thousand generally increasing expect for the with were This first our prior CapEx $XX.X the next strong recover fiscal of total in economy Sono-Tek or record R&D our and We XXXX half year-over-year to are and for excitement and on the half we reflecting the year the that $XXX,XXX end XX% the is to working X% regain total year XXXX, highest this recently history. Customer in also geographic for largest QX orders and the deposits this closing, at the area includes to our the full deposits predicting level growth new XX% as will China. it million FY period several with the largest We a this sector But remainder in high this at from short-term. Reflecting $X.XX backlog energy on in over to orders result and year our product and million equipment increase attribute $X.X In beyond we of profitability service-related fiscal ago at this cheaply-priced second investment date of of are with these $XX.X sales outlook low-cost anticipate Chinese FY backlog of in of the solid year market, in order direct not a in weakening X XXXX. sector in This ending continued the each clean $XXX,XXX. In dollars. require about order to XXXX of greater are valued reported order end reflects February. continued of that be announced, at activity which the reached we compared a particular. $XXX,XXX million is competitors

to organically core accelerating achieve to and in from over been systems. the Steve all to this we've our I proprietary call more through shift ASPs the please detail. that our will our significant Steve, said, large able the technology. stems remaining the shift customized review of momentum to with We're of still CFO, our our development own hand Mr. efforts. With Our ultrasonic strategy, financials strategic deliberate proceed. systems Bagley, at And

Stephen Bagley

Thank first XXXX to or $XXX,XXX for of Steve, morning, by million by you, half results. good fiscal will fiscal Net XXXX. sales quarter I first walk compared quarter through quarter the followed the and $X.X our second everyone. X% decreased our second results, to

million. Gross and quarter goods However, of from XXX year-over-year expenses for in XX.X% the our basis reallocation department quarter percentage net decreased profit to the $X.X the product of by engineering reallocation X% $XXX,XXX and of fiscal gross sales the second that to is and increased to of or this XXXX. by of mix cost due or compared to specific decreased labor XX% sold and quarter fourth to points sales the started $X.XX the $XXX,XXX XXXX profit million first fiscal

revenue sales, the gross million expenses to quarter for from and $X.XX increased $XXX,XXX $X.XXX decreased prior in for decreased This occurred to by in $XXX,XXX versus to or specific from partially and compared increased a tax the and the show with and is first year. that expenses to prior decreases just increase commissions a reversal to The fees expenses $XXX,XXX income in And increased administrative with and development quarter, in This million second product when XXXX. the increased in due to to in to $XXX,XXX million increase second accrual other is in was of the fiscal income in the sold. Marketing slightly $X.XX fiscal the labor year's profit. Operating travel prior of in profit. when our salaries legal of $XXX,XXX to prior selling $XXX,XXX year. in quarter the offset with slightly X.X% of cost $XXX,XXX and profit expenses to year and expenses. Operating goods salaries, primarily $XXX,XXX the to quarter for $XXX,XXX General to prior corporate XXXX primarily this primarily due slightly compared year compared engineering sales as versus operating increased the trade to due expenses. costs quarter. $X.XX However, and due gross quarter was quarter gross and compared decrease decrease the Research reallocation audit the second XX% decreased year. million

first tax income XXXX. Interest second our by year second we In However, compared the and year. in with quarter to quarter quarter, for prior to operating of income $XXX,XXX for to fiscal of second $XXX,XXX compared provision the recorded of dividend in $XX,XXX compared fiscal the to XX% XXXX. of quarter decreased a $XX,XXX fiscal increased $XXX,XXX as for the $XX,XXX $XXX,XXX the quarter the XXXX

the our sold. solar expenses again, fiscal million the of to and for income engineering market to year from increased XX.X%, that's or net XX% $XXX,XXX OEM sales or income have sales share The of and to the of sales. by prior $X.XXX the the compared decrease half due XX increased Our $XXX,XXX the months $X.XX X $X.XX of per And increased profit reallocation current in now of high profit labor XXXX first primarily financial goods or much $XXX,XXX is sales primarily with that's per share once approximately alternative typically decreased totaled or cost this net decrease the these shipment due due results system and and of of period. a from by $X.X a and and gross parts the spare gross in inclusive points XXXX. percentage $XXX,XXX to Total first mix, specific X was for the increased strongly for margin. profit. And $XX.X energy Gross period's product higher for quarter large to The those to in a year basis was the fiscal million, decrease to to company X% ASP systems as a million. profit result sales impacted

Our first increase of in that's income in fiscal $XXX,XXX XXXX gross and that's first to XXXX XXXX, $XXX,XXX of $X,XXX and decreased compared and operating income period, profit, with for offset and $XXX,XXX half to half prior the the for X%. expenses. increased compared margin by with the year half $XX,XXX was first due Operating operating to dividend interest In the fiscal increase XXXX. partially $XXX,XXX, an of

policy U.S. treasury highly cash majority present at And the to risk investment securities. in XX, holdings liquid, Our our is or invest rated lower of above excess grade. investment August XXXX, at are

marketable Additionally, new full please and first on go our year. And XX, audience. for Gary, $XXX,XXX to the call as on some XX% open of share have unrealized is to to with income And of increased ongoing half gain XXXX fiscal development from million the and marketable and of the for the fiscal invest facilities. $XX,XXX the half to cash totaling lab sheet. balance XXXX. Net $XX,XXX or ahead. compared strong we we our very the securities no of equivalents or and $X.XX debt cash in with for XXXX, decreased we our at expect all we'll half fiscal fiscal the upgrades first of continue in which million manufacturing now weighted per equipment per Diluted questions any for of cash, and securities $XX,XXX $X.XX was X to XX.X months increased outstanding shares. $XX.X August to CapEx average share for $XXX,XXX directed with approximately a compared position first maintain to continue do slightly approximately And $XXX,XXX shares $XXX,XXX XXXX.

Operator

from with first question Ted Securities. [Operator Instructions] Jackson Our is Northland

Edward Jackson

quarter. a solid on Congratulations

the with got Alta I I quarter. few and want to a questions. on the So really Energy start

you -- least I'm at the of million, What markets systems systems those during through to went another were kind large the a end X shipped sounds of a quarter, if me X to like to $X.X your X for had singular parsing you went customer. the systems went the customer third, So it talk to can and commentary, maybe -- customers? of X

R. Harshbarger

that multiple the same a locations to is And Yes. solar energy locations, big that's throughout also, the world. well. a it or the we're is Those ship are there. in same end that clean multinational customer They customer application an scheduled following different that which million that $X Ted, almost the the now but advanced is And deliveries. from located our -- did involved follow-on sector seen as It's is market customer at orders are million we've of and XXXX that FY company. orders $X

Edward Jackson

Well, thing. my that next went into

So $X is next $X those assume, should see through to backlog we fiscal income the million statement million, and roll expect I orders in then that that your year?

R. Harshbarger

all to year probably correct. the it to and would our probably had of Yes, next If I say, million. third it's quarter, pretty certainly split evenly second be fiscal between $X.X that it, quarter, I going of project first shipping quarter in but

Edward Jackson

standard That's have then situation -- into And like part manufacturing lines on? visibility you're manufacturing this you you've many have, it, they're correct? from Okay. you of how you of their months, more lines you're and like what Is and in depend line rolling for that out have process the production do upon of what various -- talked panels. part their that. a and they about for just that's a behind but of hearing, I'm number customer -- The

R. Harshbarger

multiple multiple year next actually out rolled it's when being that's world. month of as out true into the high X, on it's describe Phase has technology. locations. begun the I be And out What that would this But was are X. continuing line Phase and first only which I and Yes. next got that the would volume still that's ones R&D year. what beginning are which it's now describe proved as are first X these -- And rolled rollout just now our pilot locations going production, with the through then around in phase, first is of machines for these being half Phase or to this is first installed. installed machines the our the machines this installed of And being feasibility

is plants that a there's potential and really the X to follow, and occur as machinery just So which Phase X to then of filling following up likely that well. the still our implementation and are the all need Phase new plants

Edward Jackson

Okay. won't a too with half second I That's actually -- to regards it. fiscal for regards with much this get of portion very exciting. mean, so huge of your and the year, detail backlog With into But I year. to is next

it are magnitude in You fiscal being I you see half that and/or of this do that? of the sustain in or think Do will for will similar then the at of in remain sales up from half of growth year. the And fiscal what mean, terms a looking 'XX? you this 'XX verticals are you down flat least second as that year? the second for first of half

R. Harshbarger

Yes.

ship backlog internal to point, for growth have in I and we about. For at the of fiscal both The long that's a for feel, year. And to out be lead if amount things general into the point, for our more really to adding excited next current time laid questionable think bit backlog high products our of that the now, little for of this be be fiscal for and these all customer the aspect can that's the much are out growth guidance these we more fiscal the talking year. will with But ship even them more out these ready given adding that Sono-Tek ready start sent growth we're is able customer show projections ability significant in ship we they that ASP and next project to because in be when to current always current year, we'll because what specifically we when from we're fiscal haven't certainly partially year, at and confident systems aspect fiscal while more items to the year. will too this really

mean, growth. next moment more profitable. good. year a be going it's think the We're for more I to Sono-Tek is this to we're show ourselves think current we'll year. more mean, of I I for I fiscal So is coming rapid that's growth positioning the acceleration year. be that important fiscal exciting much But going fiscal

Edward Jackson

it So than thinking of that you'll then year, you you continue likely it's quarter, this that see in terms your level backlog exited grow? with a exit this second sounds of half last backlog this feel current to quarter of maybe will that you higher the that

R. Harshbarger

hope would so. I

we hope or We is orders rolling to way, and for way fiscal staggering up like backlog it's a that takes I come And now, beefing come backlog big more coming million are oh, mean, selling would ASP to frequent than haven't it all thing projection our high $X in of the that we're I next for so. the these in in customer have more for and for into backlog next so now one could shut on and systems just but to given that large like, filling a year. be that $X million, one machine these our order us because X year. up rolling basis that that potentially now X big be

it's I projection that. haven't that, we'd I And X see would but So I hope adding a in I think we think we months to the certainly like don't this current fiscal realistic. things backlog. have year still to so. know, I on to given mean, be

Edward Jackson

-- you to today, brings as current you kind mean, at question. that haven't kind another revenue your space? to you it to taken can facility through -- you over. at at can potentially And you capacity relates consistently existing run How your of through it? I your I you've look property what remind point the actually think you set-up, And will it's before out you me facility then currently been there's I of you still much expanding that do run Then it. of as at much space know revenue you some have And much were really know -- how how Okay. as location. my run if me the

R. Harshbarger

Yes.

of large occupy. So we buildings. our buildings over that because one renting we very occupy X we presently are that don't We've building existing still within the taken

hit area. beyond more from that we we that, I somewhere And $XX to be our million things remaining area, started million needing over we'll in started completion footprint, more million, around actually new manner million, once lay consultant that out Now which left. to that we with could to we to then can $XX Once to outside brought get to will actually we we look little layout believe $XX building, some have that and within efficiency existing $XX in and to our million to building, this still able existing to realize than we're in. a a we precisely it's within have soon an And effective we efficient we up we our million, upon our closer that in And mark floor can probably both pretty one but with $XX we'll the today, efficiencies help more we approach us that be how flow $XX a manner to building. we to brought outside $XX with at growth. bit We million footprint the know do consultant the that believe help think in to a of large-sized product factory. But number standpoint, the thought. with of take be

million if take number even existing own $XX that footprint might that the we we million our area that to somewhere slightly, the for maybe all area whole over in of what but $XX increase buildings. So of facility within

Edward Jackson

you. then last question And for my Okay.

that quarters. to line systems, curious, the potential I I'm new R&D you it's in customers is term there, mean, the R&D those you isn't Sono-Tek? emerging growth would, with smaller systems, bringing off, the the if And be guess, for those of item, drop-off something fallen for few last longer pipeline if I aren't through with? concerned there kind On

R. Harshbarger

good baskets a organization asked investors capabilities and of by a one an let's of, go something recently a machines, of right, of a now, application actually into What's to because other sudden really new as our few we've that's what happened, say, production we doing, product the could Yes, has matured market as line an transition cycle staying hey, R&D all that radar to brought all emerging question become they're shorter also. transition as on on after. to over gotten to we've once hold our and a here's

us past didn't years sometimes something the there where R&D or anymore. we even it to production, case that's for to might know not in have that X, X, emerging transition how because X, X in So area over really out for X sat the maybe

a So relatively faster what we rate one us the or go of sub-sections that into for of relatively products quickly quickly. to for the much baskets at tend see one the then of other is baskets other us and transition through

Operator

from is Financial. Oak with question next Ryan Ridge Dick The

Richard Ryan

And the half Steve, the backlog segment-wise? product other half that's the quarter. delivery roughly the your just at of third the make-up for market-wise you to What's of of kind then, half look to the or in -- backlog expectation delivery what's got of other the on second, deliver first, either going that? what's

R. Harshbarger

Yes.

pretty but healthy custom are into do that fiscal that lot that machines is much clean in we backlog flowing backlog, us next up that at mix those of of our medical too, $X just in it's of medical level year so into other some majority in year. happens current shipping backlog, and are the it million product energy fiscal medical end stuff that machines. record-high and going right mix orders of pretty to existing some be much split looking having a to And very all So and that through the that the almost half which large high addition now X new this a happens for a in

So when say have as high all -- not of first the but the mix good just emerging be where that lower think R&D clean year, mixing electronics of energy half of a sector clean may it's it's in nice not sector, it that. a kind of lower to It's clean high going a I but medical nice it as to to -- that's and see assuming I emerging okay. energy It's be with sector. probably energy mix is

Richard Ryan

Yes.

in just And or diversification, us clock issues shape that on key. What trying of going is good limited don't if were capabilities. the vendor the out to you product kind backlog? of handle X whatever, to you chain that's your that get those then you kind know, you of to -- some your had supply the on worked X.X if I update think turn years, and back, forward Can capacity door the years You've effort? you this internalize

R. Harshbarger

bring programmers, we one -- very actually -- lot not things made Yes. these was It our NovoCoat but engineers, supply consider which really. for with program program. an what a us to us lot It would us bringing again. run required line, outside chain a and -- did a in expertise, It successful I an controls, it product not in would X of That in-house us vendor easy go through. to for was of issues so of into whole

big to It's project through the I that's mean, it's also. be increased a control starting more. definitely little But -- the is lot more happening. we of There now those make now. some but the of XX% and lines have to within was I are start think shipping our I XX% these some bit able to margins upfront ship of bringing that now would complete process. benefit could within outsourcing that And start ongoing bring we to on side it, we're most some product of just through see certainly we'll Sono-Tek. margin were in-house. But we're curve a of those we're of see We much initial chunk internally describe historically it on now it, gross products transitions through still, cost an way to a that to of that in, we products maybe bringing to

internal here, the the happening that think for capability outside We'll X should this on year us and next be us increase for make be years. I expand dependent to which again, less margins will So continuing to suppliers.

Richard Ryan

economy Okay. traffic be cycle be looking of any them there flowing? look may piles sides? When order commentary or pipeline, they're weakening you or conversations customers any funding might not of money out at your election that or at about from the those that lab with on Any concerns

R. Harshbarger

in manufacturing, Yes. end -- their established something definitely older, are their they more product some areas, like would industrial softening sales, circuit markets, our sales. I product some of printed the expressed have say board,

but more complex in those. And markets, in coming from get those that's this medical, growing us, the able to that very seeing are these makes older, same even where that high-tech next-gen are certainly and large really margins microelectronics our the energy for platform alter They clearly us machines our mature our small the make ASP really highest sectors, not markets probably platform, is underlying they're it these machines. shown are to to little be we're machines now older machines. focused of ASP we're the focus which the very But and I the that's we high technology. But the platforms, the sectors we're very the we expressed business machines, are We slowness, most for because from get platforms did to we from is those certainly shift there the mature on me them. flow markets, and an highly slowness slowing have more more mature low complex actually enjoy sales slowing. high like our in more mean, anyway. going Fortunately happy And that markets. acceleration complex these established a big focused them. show of strategic more there seeing a benefits machines the on ASP, We

we it So direction. fortunate to was that to shift over really made move strategic

Operator

Insights next White with question The Bill [ Bill Nicklin from ]. is

Unknown Analyst

Ted details what was have lot interested -- of kind Dick a question. overarching of and of do I in. Actually, what But covered I an

last down into capabilities, predictability you've you've with better road describe markets of higher that obvious profitability there and over some expanding visibility investing/spending ASP total increased you detail Sono-Tek's pretty next heavily it's you've type then you few your you could the shifting that achievements over and providing surrounding described, contracts. And R&D, new years, years? adding the think the get we're been growth these possibly the and affecting how I long-lived journey new as addressable in these market, as Maybe see trajectory couple made. them

R. Harshbarger

I've to you the $XXX,XXX focus us. And nozzle machine? have million The it $X Right ASP tell those think could of this is now, can higher $XXX,XXX nozzle done. as a machine? of we been on still machines. us of sell it's then, every we've went into any saying, to sure. predicted higher And machine a one those heart things can machine. got know, from When Sure, machines. a for you, it's what we make I that been And we the done one it's the $XX,XXX journey don't -- $XXX,XXX that with at of drive hey, make Bill, and then, quite hey, let's We're ultrasonic our we

capabilities us these precision as I you the found in machine thin think a expertise it customer's heart partner and application creating million as the that, a at once wasn't we capabilities. surprise become long $XX,XXX path, realize products. to know-how do even that film really it. we had this to this, The actually on really the for it to desired say, that complex engineering next-gen was possibility but difficult was us coatings But sell now had really down while upfront film before And somewhat nozzle heading capabilities that we to took didn't resources started it. spend that. desired of with $X.X that let's of we these they us it had very done and make They a to customers we it, it we've for just the develop the these money to systems just the and And coatings. in-house to that thin asking were

huge hoped. that's machines and to machine to the machine $X.X throughput what the reach area the where feel and our be norm. X we're of kind we've $X typically. it goal R&D pilot the that's or the We out pilot of becomes $XXX,XXX typically normal that get like are They these And got $XXX,XXX want want $XX,XXX of to mean, for go investment million, may we'll want. going We we're $X.X longer want took or $XXX,XXX the and million -- be spent end $XX,XXX or flow R&D. make we getting. meet latest They we now projects we're like and that sell are million shipping projects. $X no R&D of lot multiple that machine. $XX,XXX we machines. But of just is their requirements That line They're Some to But the or and machines their a like But very Aries business our X Altair, to we a million, lot a sell million line customer money machine. in doesn't orders these the orders are production you that just I production $XXX,XXX. for to sell these those still and machines, and products $X of strategy to coming machines X time when machines sell X product. And time only only selling to those significantly, there

very high excitingly, same ASPs. might XX buy and R&D that production X line they buys or customer So then at machines that X pilot machines, XX

picking do through. while see could right point, But if growth more a into the it R&D lever We and profit the let's of more growth lot right open we of higher ever back company maybe listen, plowing we'll money. just -- machines, that could our long just But keep road hey, that that of if any make we want money, to, that to And become there. make we So really say now, big on more other flip ASPs for we hey, advantage the with such more that we lot take saying a strategy the that, way it's and at point. a really as company. chose as we that's that our we some we've can sell and ever higher been that keep at said,

Operator

the our for Harshbarger question conference turn any answer back closing Steve like to concludes and to I would over remarks. This session.

R. Harshbarger

All joining today. thank you right. for Well, everyone us

large have the and results day. great ongoing really have we Bagley please, fiscal of on with another directly Dr. in before anybody questions if Steve X in then. May. any that's we we can to forward these And you be of contact initiatives behalf again forward in platform review you our hope markets to next high-tech talking and But our myself, our Sono-Tek's look markets, full we success call feel outlook going all will us look rest a to XXXX strong. on our based you is Coccio, your to that months. And and And clean energy to and

Operator

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

disconnect. may now You

Sono-Tek (SOTK) 15 Oct 242025 Q2 Earnings call transcript