Sono-Tek Corporation

Good day, and welcome to the Sonotech Corporation Fiscal Year and 2026 Results 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, and to withdraw your question, please press star then two. Please note, today's event is being recorded. I'd now like to turn the conference over to Karen Smith with Investor Relations. Please go ahead.

Thank you, Rocco, and thank you, everyone, for joining us today. Sono Tech released their fourth quarter and full year fiscal 2026 results this morning. If you don't have a copy of the release, please visit the company's website at www.sono-tech.com and navigate to 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 Coggio, 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, this is our full year fiscal 2026 call for the period ended February 28th, 2026. Our next call will be our mid-year fiscal 2027 update for the second quarter and first half ended August 31, 2026, and will be held in October. I would now like to turn the call over to Chris Cotillo, Executive Chairman of Somatech. Chris, please go ahead.

Thank you, Kieran, and good morning, everyone. I will start with some opening remarks, and then Steve Harshberger, our CEO and President, will go through a deeper business and operational review. This will be followed by Steve Bagley, our Chief Financial Officer, and he will provide the financial review. Following their comments, we'll open the call for questions as Kieran mentioned. Fiscal 2026 was a year of strong execution and very meaningful progress for Sonotech. We delivered our second consecutive year of revenue above $20 million, and we reached $20.9 million while maintaining consistent quarterly performance with eight consecutive quarters above $5 million each. We're also proud to report that fiscal year 2026 marks our third consecutive year of annual revenue growth and 16th year in a row of profitability. Most importantly, we achieved significant profitability expansion. The gross margin increased to 51%. The operating income grew 81% and we delivered strong bottom line performance, which was supported by operating leverage and favorable product mix. Our results reflect the continued success of our strategic shift towards higher value, high ASP production systems. These are driving both revenue quality and margin expansion. From a market perspective, medical was a standout performer. It increased 54% year over year and was driven by strong demand for balloon catheter coating systems, stent applications, And other advanced medical technologies, we also saw continued growth in electronics, particularly in electrically active coatings which support diagnostic related applications. So clean energy remains a key long term opportunity. We are now experiencing a decline in electrolysis related demand during the year due to policy shifts at the government level. However, this was partially offset by solar related system shipments earlier in the fiscal year. Geographically, we saw strong performance in the US market, which grew 12% and represented approximately 67% of total revenue. That benefits both revenue growth and margins due to reduced international related costs. We ended the year with a solid backlog and a strong balance sheet, providing a stable foundation for our future growth. Now looking ahead, we anticipate continued revenue growth and profitability in the first half of fiscal 2027, and that would be driven by momentum in the medical sector and sustained demand for high ASP systems. For the full year of fiscal 2027, we're currently expecting relatively flat to modestly higher revenue compared to fiscal 2026. Visibility beyond the first test, however, remains limited due to continued uncertainty in certain clean energy sectors and the timing of these high ASP customer orders, which can create significant shifts in quarterly revenues. This is particularly true as we continue to see a higher frequency of larger, more complex system orders that typically involve longer lead times and have less predictable shipment timings. And with that, I'll turn it over to Steve Harshberger, our CEO and President. Steve?