Sono-Tek Corporation

Good morning and welcome to the SONATEC fiscal second quarter and first half 2025 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Kieran Smith with PCG Advisory. Please go ahead.

Thank you, operator, and thank you, everyone, for joining us today. Sonatec released their second quarter and six 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-tech.com and click on the press release slash news tab in the investor section. The product, market, and geography sales tables on the last page of the release will be part of today's discussion. With me on the call today are Dr. Chris Coccio, Sono Tech's Executive Chairman, Steve Harshbarger, CEO and President, and Steve Bagley, Chief Financial Officer. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. Please note that various remarks that may be made on this conference call about future expectations, plans, and prospects for the company constitute forward-looking statements for the purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may vary materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's filings with the SEC. company assumes no obligation to update the information contained in this conference call. As a reminder, Sonitech currently holds two earnings calls per fiscal year. This is our mid-year call for the six months ended August 31, 2024. Our fiscal year end is February, so fiscal 2025 will end on February 29, 2025. And our next earnings call for the 12 months of fiscal 2025 will be in May 2025. I would now like to turn the call over to Chris Coccio, Executive Chairman of Sonitech. Chris, please go ahead.

Thank you, Kieran, and good morning, and thank you, everyone, for joining us. Today we're going to discuss our second quarter and also the first half of fiscal year 2025. The results were just released this morning before the market opened. I'll begin with some opening remarks, and then Steve Harshberger, our CEO and president, will go through a deeper overview business and operational review. Then that will be followed by Steve Bagley, our chief financial officer. He will provide the financial review in more depth. Following their comments, we'll open the call for your questions. Now, many of you may already know Sonotech developed a revolutionary approach for applying precision thin film coating several decades ago. This proprietary technology involves the use of an advanced high-frequency ultrasonic nozzle system, and that's all incorporated into specialty motion control systems. They are able to achieve uniform micron and nano thin coatings onto our customers' products. Now, our thin film coating machines provide dramatic savings of the expensive liquids that are being applied, and they're environmentally friendly by minimizing material usage and overspray. This often helps companies comply with increasingly stringent government regulations that are aimed at reducing hazardous waste entering the environment. But the real principal advantage of our ultrasonic systems is the ability to apply precision-thin films. They are becoming, and they are vitally important in today's world, with thousands of products and micro-components now requiring a functional or a protective coating to be added to them. They're all around us in our modern world. The strategic shift that we made several years ago to offer more complex as well as complete solutions, has meaningfully broadened our adjustable market. It resulted in significant growth in our average unit selling prices at the same time. Our larger machines now commonly sell for over $300,000, and the system's prices can reach a million dollars or more. That can significantly impact our quarterly revenue, as you can imagine. Additionally, our move into the clean energy sector is showing significant transformative results in next generation solar cells, fuel cells, green hydrogen generation, as well as carbon capture applications as we help other companies shape a sustainable future. So this is what we started to see in this fiscal year. It has continued into the second quarter where we saw our largest customer order in our history, followed by another one of the same size several weeks later. For the first half of this fiscal year, we experienced 10% annual revenue growth, and for the second quarter, we saw a 3% sequential increase, which is in line with our prior guidance. On top of that, our first half net income grew 13% year over year. We're very excited for continued growth ahead of us, which is reflected in our record backlog. That increased 26% from the end of last year to $11.7 million. It's the highest in our history, by the way. We're excited that our investments have begun to pay off. Our outlook for growth has been greatly enhanced by the early success of our strategy shifting into these larger, more complex systems aimed at production applications, of course, with multiple and repeat orders. Plus, our focus on opening new markets for unique thin film coating technology is also helping. So looking ahead to the second half, we're expecting a continued growth for fiscal year 2025. Thank you. And now I'm going to turn it over to Steve Harshberger, our CEO and President. Steve, please go ahead.