Sono-Tek Corporation

Good day everyone and welcome to the Cenotec Corporation Fiscal Year 2027 Mid-Year Results Conference Call. All participants will be in a 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 and then one on your touch-tone phones. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Kieran Smith with PCG Advisory. Please go ahead.

Thank you, Jamie, and thank you, everyone, for joining us today. Sonotech released their second quarter and first half fiscal 2027 results this morning. If you do not have a copy of the release, please visit the company's website at www.sonotech.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 Coccio, 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 second quarter and first half call for the period ended August 31, 2026. Our next call will be our full year fiscal 2027 update, but the period ended February 28, 2027 and will be held in May 2027. I would now like to turn the call over to Chris Coccio, Executive Chairman of Sonotech. Chris, please go ahead.

Thank you, Kieran, and good morning, everyone. Thank you for joining us today to review Sonotech's fiscal second quarter in the first half 2027 results. Steve Harshbarger will review the operational performance and business trends and then Steve Bagley will provide more detail on the financial results. The first half of fiscal 2027 represented solid progress for Sonotech with revenue growth, meaningful gross margin expansion, and improved operating profitability. Our balance sheet also remains very strong with no debt. Our results also reflect an important shift and the composition of our business with particularly strong growth in the medical market and increasing demand for higher value production systems. Now for the first half, revenue increased 6% to approximately 10.9 million. Gross margin expanded to 55% compared to 51% in the prior year period. Operating income increased 41% to approximately 1.28 million. and net income increased 22% to approximately 1.1 million. The medical market sales increased 289,000% to approximately 7.1 million. The medical market continues to be an important growth driver for the company. We are seeing customers increasingly move from process development and qualification toward commercial manufacturing. where Sonotec's precision ultrasonic coating technology can play a critical role. At the same time, we continue to see opportunities to expand our installed base and our relationships with customers as their production requirements grow. I also want to highlight the significance of the recent orders we announced from an existing alternative energy customer. We recently announced three orders totaling approximately $7.2 million which cover 10 production scale systems and represent the largest aggregate customer order in Sonotec's history. What is particularly important about this order is that it represents an expansion of an established customer relationship. The customer has successfully deployed our technology in an alternative energy manufacturing process. It is now expanding its use of Sonotec production systems across three geographic locations. This is a good example of the long-term opportunity we see across our business. Supporting customers as they move from development into higher volume manufacturing and then expanding our relationships as their processes scale. Together with the more than $3.6 million medical diagnostic production line order announced in August, these programs alone now represent more than $10.79 million of backlog. with the majority currently expected to be delivered in fiscal year 2028. Importantly, these opportunities involve different customers in two distinct growth markets, medical devices and alternative energy. While the timing of individual production system orders can result in variability from quarter to quarter, we believe the increasing scale of these opportunities demonstrates the long-term potential of our technology and our customer relationships With that overview, I'll turn the call over to Steve Harshbarger, our CEO and President. Steve?