Sono-Tek Corporation Reports Increased Profitability and Sales Growth in Fiscal 2026

Sono-Tek Corporation reported its financial results for the second quarter and first half of fiscal 2026, revealing a slight increase in net sales and significant growth in profitability. For the six months ended August 31, 2025, the company achieved net sales of $10.3 million, a 1% increase from $10.2 million in the same period last year. The gross profit for the first half rose to $5.3 million, up 6% from $5.0 million, resulting in a gross profit margin of 51%, compared to 48.8% in the prior year. Operating income surged by 73% to $905,000, reflecting improved operational efficiency and a favorable product mix.

In the second quarter alone, net sales were $5.2 million, nearly unchanged from the previous year, while gross profit increased by 3% to $2.6 million. The operating income for this quarter rose significantly by 47% to $421,000, driven by a combination of higher gross profit and reduced operating expenses. The company noted a robust backlog of $11.2 million as of August 31, 2025, which is 2% lower than the previous year but shows a 50% increase from the first quarter of fiscal 2026, indicating strong order momentum, particularly in the medical market.

Sono-Tek's operational metrics showed a shift in customer dynamics, with a notable increase in sales to foreign customers, which accounted for approximately 39% of total revenues in the first half of fiscal 2026, up from 35% in the prior year. The company has expanded its sales capabilities by increasing its direct sales force and establishing testing labs in key international markets, including China and Germany. This strategic move aims to enhance customer engagement and product demonstration capabilities, thereby driving future sales growth.

The company’s financial position remains strong, with cash, cash equivalents, and marketable securities totaling $10.6 million as of August 31, 2025. However, cash used in operating activities increased significantly to $1.1 million in the first half of fiscal 2026, compared to $90,000 in the same period last year, primarily due to an increase in accounts receivable. Despite this, Sono-Tek's stockholders' equity rose to $18.7 million, reflecting the company's profitability and stock-based compensation activities.

Looking ahead, Sono-Tek remains optimistic about its growth trajectory, particularly in the medical and alternative energy sectors. The company anticipates continued fluctuations in order flow and shipments but expects to maintain its operational leverage and capitalize on its innovative technologies to drive future sales. The management's focus on expanding its product offerings and enhancing customer relationships is expected to support sustained growth in the coming quarters.