Sono-Tek's Strong Second Quarter and Half-Year Financial Growth
Q2 and First Half Fiscal Year 2026 Financial Highlights
Son-Tek Corporation (NASDAQ: SOTK) has reported impressive financial results for the second quarter and the first half of fiscal year 2026. The company continues to achieve milestones in revenue, particularly in the medical market.
Significant Growth in Net Sales
During the second quarter, Sono-Tek saw its net sales rise slightly to $5.163 million, compared to $5.162 million in the corresponding quarter of the previous fiscal year. This achievement marks the sixth consecutive quarter where sales have exceeded $5 million. Sequentially, sales have also shown improvement from the first quarter of fiscal 2026, which reported $5.13 million.
Financial Performance Review
The company reported a gross profit of $2.6 million, an increase of 3% from the prior year’s $2.5 million. This improvement can be attributed to a favorable product mix, which is a testament to the company's innovative offerings in the ultrasonic coating sector. The gross margin also improved to 50%, up from 49% year-on-year.
For the second quarter, net income grew significantly by 24% to reach $424,000, translating to earnings of $0.03 per share compared to $341,000 or $0.02 per share from the previous year.
Half-Year Revenue and Profit Analysis
Reflecting on the first half of fiscal 2026, Sono-Tek achieved record revenues totaling $10.30 million, surpassing last year’s $10.19 million, indicating a stable trajectory of growth. The gross profit for this period increased by 6% to $5.3 million, and net income rose 35% to $909,000, yielding earnings of $0.06 per share, compared to $672,000 or $0.04 per share in the prior year’s first half.
Backlog and Future Guidance
The company’s backlog has shown promising growth, now standing at $11.21 million, reflecting a notable 50% increase sequentially. This growth is primarily driven by strengthened demand within the medical device market. Sono-Tek's management has updated its fiscal year 2026 guidance, reflecting a positive outlook amidst moderate expected revenue growth.
Executive Insights
Dr. Christopher L. Coccio, Executive Chairman of Sono-Tek stated, “We are pleased to report continued growth and profitability in line with our expectations. Our strong financial results, particularly with ongoing demand in the medical market, further validate our strategic approach.”
CEO Steve Harshbarger echoed this sentiment, emphasizing the company's success in navigating complex production requirements while maintaining strong average selling prices. He noted, “We continue to see our product's growing adoption among leading manufacturers in the medical device sector.”
Product Categories and Market Dynamics
In terms of product performance, the In-Line Coating Systems category has experienced a decrease in sales due to customer-requested delivery delays. In contrast, Fluxing Systems and OEM sales showed robust growth, indicating strong demand for Sono-Tek's technological solutions across diverse sectors.
Geographical Distribution of Sales
Geographically, sales in North America have shown some decline, driven by reduced momentum in the US clean energy industry; however, this has been offset by striking growth in Asian markets. Notably, sales in Asia surged by 153%, driven by escalating demands in the medical device and clean energy sectors. EMEA also picked up pace, showcasing overall market resilience.
Fiscal Health of Sono-Tek
As of the end of August 2025, the company boasts a robust balance sheet, with total assets amounting to $23.19 million and no outstanding debt. Cash reserves and marketable securities total $10.6 million, positioning Sono-Tek strongly for future opportunities.
Frequently Asked Questions
What were Sono-Tek's recent financial highlights?
Sono-Tek reported a net sales increase to $5.163 million in Q2 2026, a net income of $424,000, and expects modest revenue growth in FY 2026.
How has Sono-Tek's backlog changed?
The company's backlog reached $11.21 million, reflecting a significant 50% increase sequentially, driven by strong demand in the medical market.
What is Sono-Tek's outlook for the fiscal year?
The company has updated its guidance for FY 2026, projecting modest revenue growth amid ongoing demand in various sectors, especially medical devices.
What markets is Sono-Tek focusing on?
Sono-Tek is concentrating on the medical device market while also expanding its reach in alternative energy, electronics, and other emerging sectors.
How does Sono-Tek's financial health look?
At the end of Q2 2026, Sono-Tek reported total assets of $23.19 million and no debt, with cash and equivalents totaling $10.6 million.
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