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

So they are just returning back to us, these existing customers, but for new applications that they’ve never done before. And that takes a lot of work in the development lab or their application engineers to help define those processes. But they are beginning to look at us as their expert. That we are in basic, their coating arm for many of these large medical device companies, and they are coming to us and saying, ‘hey, help us Sono-Tek. We don’t want to figure this out, but you guys we know can. And that was the big impact for us primarily as the medical. The industrial ones were more new platforms that sold, were of – with people upgrading from their old platforms.

Ted Jackson : I’d say that’s about kind of the alt energy, but I mean is that more, in terms of delivery there, is that more carbon capture? Is that more thin film on panels? Is it, clean hydrogen?

Steve Harshbarger: Got you. Yeah, the existing shipments that went out this past quarter was more focused towards the coating of the critical membranes that are used in fuel cells, carbon capture and green hydrogen generation. But our backlog has been increasing fairly drastically, more in the thin film solar area, and that’s been a very exciting turn for us, because thin film solar kind of took a dive down years ago. But there are some companies that are still very, very profitable and doing well in this area, and we’ve made some good partnerships in that area for the future, for multiple systems heading forward we believe.

Ted Jackson : All very exciting Steve. And last question, and then I will get out of the line if there’s one left. And you touched on it already is, the backlog up in the quarter, in a really strong quarter, that’s like very exciting. It really makes me feel really good about not just the rest of the year, but next fiscal year. Can you give some color exactly kind of from an application perspective, what comprises that backlog? That would be my last question.

Steve Harshbarger: Sure. It’s fairly mixed. However, the most heavily weighted is certainly going to be the clean energy sector. And again, that’s just where we’re just seeing so much activity with the transition to high volume production machines. And I should even say, there’s still a lot of companies coming again, that are brand new companies coming in and asking for R&D machines as well, in combination to the companies transitioning to high volume production machines. So I don’t see that sector slowing down at least for the next several years, and maybe far beyond. But it seems like that’s just a really good place right now. And if these high volume companies are able to successfully transition into high volume production all the way through it, I mean the upside potential is very strong in that area for sure.

Ted Jackson : Okay. Well, that’s it for me. Congratulations on a fabulous quarter. I’ll talk to you later.

Steve Harshbarger: Hey, appreciate it Ted. Good talking to you.

Operator: Thank you. The next question comes from Dick Ryan with Oak Ridge Financial. Please go ahead.

Dick Ryan: Thank you. Congratulations on a strong quarter, guys.

Steve Harshbarger: Thanks, Dick.

Dick Ryan: Steve, just another circle back on the backlog. It sounds like there’s a $1.1 million in there, and then the $2.19 million is in there. So that’s kind of 30% of the backlog. Are there any other million-dollar plus systems in that backlog? And how should we look at the timing of that backlog being delivered?