MILTON, N.Y. - Sono-Tek Corporation (NASDAQ:SOTK), known for its ultrasonic coating systems, has announced a substantial order from an existing clean energy client, marking the company's largest sale to date. The $2.95 million order, which includes four production-scale systems, is part of a larger multi-system program with the client. These systems are scheduled for shipment in the first half of fiscal 2026.
The latest purchase adds to the four production-scale machines previously delivered in fiscal years 2024 and 2025. With this addition, the client, who began with an R&D system from Sono-Tek to refine their manufacturing process, will operate a total of eight production-scale machines from the company.
Steve Harshbarger, Sono-Tek's President and CEO, highlighted the order as evidence of a successful partnership and the customer's confidence in Sono-Tek's technology for their specialty clean energy product line. He also indicated that the company anticipates further orders following the integration of these systems, which utilize Sono-Tek's proprietary thin film application technology.
Harshbarger attributed the increased demand for Sono-Tek's systems in part to government funding initiatives for the clean energy sector, which include applications in carbon capture, hydrogen generation, fuel cells, and advanced solar energy. He expects that the higher average selling prices of these systems will contribute positively to the company's growth.
This news is based on a press release statement.
In other recent news, Sono-Tek Corporation reported record-breaking revenue for the fourth quarter and full fiscal year of 2024, with a significant increase in net income and a strong backlog. The company's sales grew by 31%, reaching $19.7 million, largely due to contributions from the microelectronics, medical devices, and alternative energy sectors. The firm's strategic shift towards larger customized systems resulted in multiple and repeat orders, improving its competitive position.
In terms of financial health, Sono-Tek saw a net income increase of 127% to $1.4 million and holds over $12 million in cash with no debt. However, it's worth noting that the gross profit margin decreased slightly due to increased expenses, and operating expenses rose by 24% as a result of increased headcount and salaries.
Looking forward, Sono-Tek expects strong revenue growth in fiscal year 2025, projecting over 30% in Q1 and 8-10% year-over-year growth. The company is also enhancing services-related revenue streams, including application development and contract coating.
These are the recent developments that investors should be aware of.
InvestingPro Insights
Sono-Tek Corporation's recent announcement of a significant order from a clean energy client has underscored the company's growing influence in the clean energy sector. This development is mirrored in the company's financial metrics, which showcase a robust balance sheet and positive growth trends. According to InvestingPro data, Sono-Tek holds more cash than debt, suggesting a solid financial position that could support its ongoing expansion and investment in technology. Additionally, the company's revenue has seen a substantial increase, with a growth rate of 44.62% over the last twelve months as of Q1 2023, indicating a strong demand for its ultrasonic coating systems.
While Sono-Tek is trading at a high earnings multiple with a P/E ratio of 36.44, reflecting investor optimism about its future earnings potential, the company does not pay a dividend, focusing instead on reinvesting earnings into further growth and development. This strategy may appeal to growth-oriented investors who are less concerned with immediate income and more interested in long-term capital appreciation.
Moreover, Sono-Tek's stock price often moves in the opposite direction of the market, suggesting it may offer diversification benefits within an investor's portfolio. The company's liquid assets also exceed short-term obligations, providing additional financial flexibility. Despite a recent hit to the stock price, with a six-month price total return of -31.1%, analysts predict the company will be profitable this year, as it has been over the last twelve months. These factors combined present a nuanced picture for investors considering Sono-Tek as part of their investment strategy.
For those interested in a deeper dive into Sono-Tek's financial health and future prospects, InvestingPro offers additional tips and insights. Currently, there are 9 more InvestingPro Tips available on their platform, which could provide investors with a more comprehensive understanding of Sono-Tek's market position and potential investment opportunities.
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