Sono-Tek Stock Jumps On Solid FY22 Outlook

Ultrasonic coating systems developer and manufacturer Sono-Tek Corp SOTK reported second-quarter FY22 net sales growth of 17% year-on-year to $4.07 million, beating the consensus of $3.85 million.
The significant shipment of multi-axis coating systems used to coat electronic diagnostic devices for rapid COVID-19 test kits and strong sales of OEM systems used in the Semiconductor and Spray Fluxing markets drove the growth.
The gross margin expanded 440 basis points to 51.0%, primarily due to product mix. The operating margin rose to 11% compared with 5.8% in the prior year period.
Net income was $0.344 million, up 93% Y/Y. EPS of $0.02 beat the consensus of $0.01.
The backlog reached $6.33 million, up 45% from Q1-end and 64% from the end of FY21.
Sono-Tek held $9.7 million in cash and equivalents. The company generated an operating cash flow of $1.2 million in the six months ended August 31.
Outlook: Sono-Tek sees double-digit sales increases for both the Q3 and Q4 of FY22 based on backlog strength. Sono-Tek sees the growth to generate strong annual sales for FY22.
Price Action: SOTK shares traded higher by 11.4% at $5.015 on the last check Wednesday.

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