Sono-Tek Corporation (NASDAQ:SOTK) Q2 2024 Earnings Call Transcript

Bill Nicklin: All right. So I think what I heard is that there’s some commonality here in these transitions, but there are really many different transitions taking place across several different industries or markets that you serve.

Steve Harshbarger: That’s exactly correct, Bill. There really is.

Dr. Chris Coccio: If I might add a comment, Bill, the way it shows up in our business, our factory, is both in the systems engineering aspect and the overall product engineering. I mean, a lot of it ends up being common, even if it ends up going to a different market segment. So we’re taking advantage of that. We’re hiring a lot of people, as we mentioned, who have the skills to do that systems integration, the software and hardware integration. And I think that will be a great asset for us as we go forward.

Bill Nicklin: And one final question. Thanks, Chris. And one final question on the fluxing line, which as you mentioned is kind of an early basic business where you’ve come out with a new product. And I had a specific question around displays and this whole mini LED TV transition that’s taking place in the display industry. It would seem to me that you folks would have some participation there. And if that’s true, I’d like to know a little bit about it and how far down the road it is before you might see something affecting your fluxing product there.

Steve Harshbarger: Sure. We always are exploring new high-tech areas you know, and there’s a particular technology that’s getting a lot of press these days, which is micro LED. This is kind of what people are anticipating will be the next-gen monitors and TVs out there to come. And there is some processes in that area that could use coating applications. And it is an area that Sono-Tek is most definitely participating in, and that we are – have actively sold some machines to in that area, received some orders from machines in that area. I’m not going to go into too much more detail for competitive reasons on that area, but it’s certainly an area that we’re anxious to participate in.

Bill Nicklin: All right. That does it for me. Thank you, and be well. We need you to keep pumping out there.

Steve Harshbarger: Thanks. I appreciate that, Bill.

Operator: The next question comes from Ted Jackson of Northland. Please go ahead.

A – Steve Harshbarger: Hey Ted, you there?

Ted Jackson: What is going on? Hello!

Steve Harshbarger: We got you now, Ted.

Ted Jackson: Okay. I’m about to throw my phone against the wall, so. Anyway, so I’m going to start with just a little weedy thing, but the OpEx was up quite a bit relative to, I’d say, my expectations. And obviously you’re investing in the business, and that’s what you need to do. But can you just provide a little color on how at least I should think about that for the back half of this fiscal year and next?

A – Steve Bagley: Yeah. I mean, the OpEx was certainly the area that grew the most, and it was certainly a result of – we are doing so many more of these high ASP, large platform, custom-engineered solutions right now and anticipating, based upon our quoting, that we’re going to be continuing that trend. And so what has occurred is we had to really beef up staffing in that area, mostly both on the sales engineer area, as well as the mechanical and EEs and the IT infrastructure guys, the programmers, that all of those areas needed to get beefed up in order to support the future growth of these custom engineered complex machines. So that’s what we’ve done. We made a big investment there to support that, and we would – only we are doing that because we see that the customer base is growing for us in that area and we don’t want those customers to turn them away.