Sono-Tek Announces Third Quarter Earnings

Jan 12, 2007, 00:00 ET from Sono-Tek Corporation

    MILTON, N.Y., Jan. 12 /PRNewswire-FirstCall/ -- Sono-Tek Corporation
 (OTC Bulletin Board:   SOTK) today announced sales of $1,624,000 for the
 three months ended November 30, 2006 compared to sales of $1,671,000 for
 the same period of last year, a decrease of 2.8% or $47,000. For the nine
 months ended November 30, 2006, the Company reported sales of $5,240,000,
 an increase of 3% or $157,000 compared to sales of $5,083,000 for the same
 period of last year. The Company's nine months sales levels have increased
 slightly as the result of continued new product development efforts,
 related marketing thrusts, and expansion into international markets. The
 Company experienced a significant increase in sales in its international
 markets, which offset a 20% decline in its domestic electronics business
 this year. The Company anticipated this decline in view of an accelerating
 move to offshore electronics production, combined with a slowdown in the
 housing market, and a reduction in the competitiveness of domestic
 automotive manufacturers. The housing market and domestic automotive
 companies are large users of printed circuit boards in a variety of
 electronic devices.
     Net income for the three and nine month periods ended November 30, 2006
 was $114,000 and $473,000, respectively, compared to $280,000 and $666,000,
 respectively for prior year periods. Net income decreased by 59% for the
 three month period ended November 30, 2006 when compared to the same period
 last year. Net income decreased by 29% for the nine month period ended
 November 30, 2006 when compared to the same period last year. The decreases
 in net income are mainly a result of increased spending on marketing,
 sales, and product development, plus some minor impact from older inventory
 write-downs and the impact of new SEC regulations that treat stock option
 awards as current expenses. According to Dr. Christopher L. Coccio,
 Sono-Tek's CEO and President, "We believe that some reduction in current
 income generation resulting from increased spending on product and market
 development is well justified in that it is expected to create future
 growth opportunities for the Company. We have been successful in creating
 new business in the medical device market, and in growing a significantly
 larger international business in electronics, medical device coatings, and
 coatings for new areas such as fuel cells and solar panels using our
 innovative WideTrack coating systems. Without these initiatives, the
 Company would have experienced a decline in sales related to the decline in
 domestic electronics production."
     The balance sheet is improved from last year at this time, with working
 capital of $4,093,000 at November 30, 2006 versus $3,078,000 at November
 30, 2005, and stockholders' equity increased from $3,595,000 at November
 30, 2005 to $4,755,000 at November 30, 2006. The Company has total debt of
 $85,000, resulting in an excellent debt to equity ratio. The strong balance
 sheet and cash position has allowed the Company to make current
 expenditures in both new technology and geographical markets this year, so
 that it can continue its commitment to achieving double digit percentage
 growth in sales in the future.
     According to Dr. Christopher L. Coccio, "We are continuing to invest
 time and money in the creation of new products and markets. For example, in
 the past quarter, we have engaged a food technology expert, Dr. Joseph
 Riemer, to help us explore and pursue opportunities for ultrasonic spray
 applications in that industry, particularly as that industry turns to
 coating technology that includes nanotechnology to prevent spoilage,
 improve flavorings, and to reduce costs. Dr. Riemer will be joining
 Sono-Tek this month on a full time basis to head up our engineering
 organization, in addition to pursuing opportunities in the food industry.
 We feel that his strong technology and management background will be an
 asset to Sono-Tek in the future. We are also collaborating with an oil
 burner company to develop a new, higher efficiency way of heating based on
 our nozzle technology. In addition, we are continuing the development of
 our WideTrack coating system for application to glass lines, textile lines,
 solar and fuel cell applications, and a growing array of nanotechnology
 based applications."
     For further information, contact Dr. Christopher L. Coccio, at
 845-795-2020, or visit our website at
     Sono-Tek Corporation is a leading developer and manufacturer of liquid
 spray products based on its proprietary ultrasonic nozzle technology.
 Founded in 1975, the Company's products have long been recognized for their
 performance, quality, and reliability.
     This earnings release contains forward looking statements regarding
 future events and the future performance of Sono-Tek Corporation that
 involve risks and uncertainties that could cause actual results to differ
 materially. These factors include, among other considerations, general
 economic and business conditions; political, regulatory, competitive and
 technological developments affecting the Company's operations or the demand
 for its products; timely development and market acceptance of new products;
 adequacy of financing; capacity additions and the ability to enforce
 patents. We refer you to documents that the company files with the
 Securities and Exchange Commission, which includes Form 10-KSB and Form
 10-QSBs containing additional important information.
                              Sono-Tek Corporation
                            Selected Financial Data
                                Nine Months Ended        Three Months Ended
                                   November 30,              November 30,
                                2006         2005         2006         2005
     Net Sales               $5,239,698   $5,082,730   $1,624,015   $1,670,586
     Net Income                $472,810     $666,378     $114,143     $280,203
     Basic Earnings Per Share     $0.03        $0.05        $0.01        $0.02
     Diluted Earnings Per Share   $0.03        $0.05        $0.01        $0.02
     Weighted Average Shares
      - Basic                14,359,738   14,111,339   14,204,448   14,048,236
     Weighted Average Shares
      - Diluted              14,456,779   14,417,106   14,298,155   14,163,279

SOURCE Sono-Tek Corporation