Sono-Tek Corporation

Good day and welcome to the Sonotech fourth quarter and full year earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists 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 touchtone phone. And 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 Mr. Karen Smith. with PCG Advisory. Please go ahead, sir.

Thank you, Chuck, and thank you, everyone, for joining us today. Sonotech released their fourth quarter and full year fiscal 2025 results this morning. If you don't have a copy of the release, please go to the company's website at sonotech.com and click on the press releases slash news tab in the investors 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, Sonotex 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. The company assumes no obligation to update the information contained in this conference call. As a reminder, Sonotech currently holds two earnings calls per fiscal year. This is our fiscal year 2025 call for the full year ended February 28th, 2025. Our next earnings call will be our mid-year call for the six months ended August 31, 2025, and will be held this October. I would now like to turn the call over to Chris Cuccio, Executive Chairman, Sonotech. Chris, please go ahead.

Good morning, and thank you, Kieran. Thank you, everyone, for joining us. Today we're going to discuss our fourth quarter and full year of fiscal 2025 results that were released this morning before the market opened. I will begin with opening remarks, and then Steve Harshberger, CEO and President, will go through a deeper business and operational review, followed by Steve Bagley, our Chief Financial Officer. He will provide the financial review. Following their comments, we'll open up the call for your questions. Now, for those of you newer investors in our company, Sonotech developed a revolutionary method of applying precision thin film coating several decades ago. This proprietary technology involves the use of our advanced high-frequency ultrasonic nozzles, and they are incorporated into specialty motion systems, and they are able to achieve uniform micron and nano thin coatings onto our customers' products. Our unique value proposition is that our thin film coating machines provide dramatic savings of the expensive liquids being applied. They are environmentally friendly by minimizing material usage and reducing overspray. Importantly, this often helps companies comply with increasingly stringent government regulations aimed at reducing hazardous waste entering the environment. But the key advantage of our ultrasonic coating systems is the ability to apply precision thin films. They are vitally important in today's world, with thousands of products and micro-components now requiring a functional or protective coating to be added to them. The strategic shift that we made several years ago to offer more complex and complete solutions has meaningfully broadened our addressable market. That has resulted in significant growth in our average unit selling prices. Our larger machines now commonly sell for over $300,000, and system prices can reach a million dollars or more. That can significantly impact quarterly revenue. Additionally, our move into the clean energy sector is showing transformative results in next-generation solar cells, fuel cells, and green hydrogen generation and carbon capture applications. as we help shape a sustainable future with our customers. This is what we started to see in the past fiscal year, where we saw our largest customer order in our history, and it was followed by an additional order of the same magnitude two weeks later. The new year presents some changes and challenges and uncertainties for most businesses, such as changes taking place in relationships with our trading partners and the redirection of climate policy and related government spending On the trade issues, sonic bills are our key ultrasonic hardware at our factory in Milton, New York, and most other materials are U.S.-based, so we see little concern there. On the export side, more than half of our current sales are to the U.S. market, and we have been exposed to tariffs in certain other countries for many years, so we could be affected for better or for worse, depending on the outcome of negotiations taking place. Clean energy continues to represent a significant portion of our sales. Fortunately, a large share of these sales comes from our commercial customers such as the U.S.-based solar panel manufacturer and carbon capture and conversion companies, many of which are financially supported by airlines and other corporations focused on reducing their carbon footprint. This includes efforts to develop sustainable aviation fuel and other carbon-based products. While we do anticipate a decline in clean energy orders later in the year, we still expect revenue growth in the near term. This has been by ongoing enhancements to our equipment across all sectors, including new expanded features and functionalities that are supporting sales in the medical and semiconductor markets. I'm pleased to report that we're seeing strong momentum in the medical device industry, particularly in growing interest for our high-volume production systems and increased demand for our balloon coating machines. they are being used for cardiac interventions. For the full year, we experienced a 4% annual revenue growth, and the fourth quarter marked the fourth consecutive quarter in a row of revenue over $5 million. Now, on top of that, our full year net income came in at $1.3 million, which was similar to the prior year. We remained encouraged by the path ahead, supported by a solid backlog of $8.6 million, and expecting to see continued revenue growth and profitability in the first half of fiscal 2026. 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 to shift to those larger, more complex systems and platforms that I mentioned for production applications and also with multiple and repeat orders. And we continue to focus on opening new markets for our unique thin film coating technology. Thank you. Now, I'll go ahead and turn the call over to Steve Harshberger, our CEO and President. Steve, please go ahead.