Annual Meeting of Shareholders€¦ · Broad Base of Markets Electronics & ... Led by fuel cell...

OTCQX: SOTK

Annual Meeting of ShareholdersAugust 22, 2019Dr. Chris L. CoccioChairman and CEO

2OTCQX: SOTK www.sono-tek.com

Welcome Shareholders

BOARD MEMBERS ROLE DIRECTOR SINCE

Dr. Chris Coccio Chairman 1998

Steve Harshbarger Director 2013

Eric Haskell Independent Director 2009

Dr. Donald Mowbray Independent Director* 2003

Dr. Joseph Riemer Independent Director 2007

Samuel Schwartz Chairman Emeritus and Independent Director 1987

Philip Strasburg Independent Director** 2004

Carol O’Donnell Independent Director 2018

*Chair of Compensation Committee **Chair of Audit Committee


Welcome Shareholders

Dr. Chris CoccioChairman and

Chief Executive Officer

Steve Harshbarger President

Stephen Bagley Chief Financial Officer

Bennett BruntilVice President,

Sales & Marketing

Robb Engle Vice President, Engineering

EXECUTIVE & SENIOR MANAGEMENT

Chris CichettiVice President,

Applications Engineering

OTCQX: SOTK

Annual Meeting of Shareholders

August 22, 2019

Dr. Chris Coccio, CEO


This presentation contains forward‐looking statements within the meaning of safe‐harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including delivery of profitable, dynamic growth, growth opportunities for ultrasonic spray technology, retaining and expanding industry leadership and customer base, continuing product diversity, maintaining technological advantage of the Company’s nozzles over those of competitors, including faster return on investment compared to conventional spray systems, enhancing global distribution network, establishing market niches for recently developed products, market reception of new spray innovations, maintaining strong net cash position, achieving EBITDA projections, and other factors. Accordingly, although the Company believes that the expectations reflected in such forward‐looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company has no obligation to update the forward‐looking information contained in this presentation.

Safe Harbor Statement


Strategy

Leverage our innovative technologies, proprietary know‐how, unique talent and experience,

and global reach to:

Increase our addressable markets through new and unique applications of our ultrasonic coating technology.

Further penetrate existing markets.

Create customer delight through product superiority.

Drive a business model that will fund our investments in growth and shareholder value.


FY 2019 Dashboard

Revenue Growth

$11.6M5.5%

Gross Margin

45%

RecordBacklog

$3M145%

Invested in the future:R&D, Capex,

Market Expansion

Net Income

EPS

Growth in Leading Markets

$0.01

$0.2M


Highly Diversified

ProductGeography

FY 2019 Sales $11.6 million

Markets


Total Debt and Equity

Up! Down!

OTCQX: SOTK


August 22, 2019

Steve Harshbarger, President


APPLICATIONS

Broad Base of Markets Revenue by Market: FY2019 Sales $11.6 million

Electronics & MicroelectronicsElectronics & Microelectronics

Medical

Alternative Energy

Emerging R&D And Other

Industrial

Printed circuit boards Semiconductors Sensors Glass electronic devices


Implanted medical devices Blood collection tubes Diagnostic devices Bandages Diabetes monitoring Balloon catheters

Fuel Cell Solar Cell Batteries

Mix of next gen applications Potential categories to rise and create new

market categories

Flat (“float”) glass Textiles Food Automotive Aerospace/aircraft


APPLICATIONS

Broad Base of Markets


Medical

Alternative Energy


Industrial






market categories






Medical

Alternative Energy


Industrial






market categories


APPLICATIONS


Medical Implanted medical devices Blood collection tubes Diagnostic devices Bandages Diabetes monitoring Balloon catheters



Medical

Alternative Energy


Industrial






market categories


APPLICATIONS


Alternative Energy Fuel Cell Solar Cell Batteries



Medical

Alternative Energy


Industrial






market categories


APPLICATIONS


Industrial Flat (“float”) glass Textiles Food Automotive Aerospace/aircraft



Medical

Alternative Energy


Industrial






market categories


APPLICATIONS




market categories


Sales Grew 5.5% in FY2019

Solid Growth Trend Throughout the Year

MedicalSpecialized application expertise for active drug coatings and functional films onto medical devices.

Alternative EnergyLed by fuel cell development programs in Asia.

Higher volume in multi‐axis systems and integrated coating systems.

($ in millions)


Gross Margin

Industry leading gross margins.

Slight dip in FY2019 margins to capture key China‐based Fuel Cell accounts.

Successful entry strategy!

($ in millions)

Gross Margin

45.3%

47.2%

46.8%

48.1%

45.0%

FY2015 FY2016 FY2017 FY2018 FY2019


Investing In Growth

Managed Operating Expenses G&A relatively flat.

Continued aggressive investment into R&D. Robotics platform expanded to product

portfolio and laboratory Complex customized solutions with

new nozzle technology

Increased Marketing & Selling to penetrate new markets with new products. Trade shows

Website optimization

Asia‐based personnel

FY2015 FY2016 FY2017 FY2018 FY2019

General & Administrative Marketing & Selling R&D

OPERATING EXPENSES($ in millions)

$4.3 $4.8 $4.5 $4.9 $5.2


Capex Investment for Growth in NY

~$650K planned for FY2020 Largest in SOTK history

Facilities modernization/renovation/expansion. Power for large platform robotic systems Increased parking for employees Building structure repairs

Machinery purchases. Precision laser welding CNC/Lathe

Several outsourced operations being brought in house. Planned workforce increase of ~6 employees. Participation by Central Hudson ($100K) and New York State

($150K over 10 years) for Sono‐Tek to receive grants.*Growing Sono‐Tek and increasing our workforce in NY

OTCQX: SOTK


August 22, 2019

Chris Cichetti, VP, Applications Engineering


New Robot Platforms Introduced

Advanced 6‐axis ultrasonic coating platform.

Application Engineering specified solutions.

Lab system now available for customer testing.

Process simulation videos can be made for customers.

2‐year development program.

9 employees qualified through robot training program (4 Application engineers, 2 Service engineers, 2 Software engineers, and 1 Electrical engineer).

Highly customized product offering, selling price ranging from $150k ‐ $1.6M.

OmniBot Robot Platform


Example process simulation.

New Robot Platforms Introduced

OTCQX: SOTK


August 22, 2019

Robb Engle, VP, Engineering Bennett Bruntil, VP, Sales & Marketing


Recently Introduced Products

Many R&D systems in the field. Trend of moving to production is continuing. We are developing systems that meet

the growth and demand.

Customized Industrial Fuel Cell Coating Lines

Mid to High Volume High Volume



Both applications proven to show benefits using ultrasonic coating technology.

Key industry partnerships established to explore markets.

Continued exploration for possible market acceptance.

Exploratory MarketsMOLD RELEASE

EMI SHIELDING



Extremely thin sprayed lines for Clearweld applications.

More robust design means higher success for customers.


Significant technical advancement in this long established Sono‐Tek market.


SelectaFlux X2



Modernized & Expanded Industrial Coating Lines Next generation, to meet customers’ needs and expectations.

Increased automation and connectivity.

OTCQX: SOTK

Steve Harshbarger, President


First Quarter 2020 Results

Q1 2019 Q1 2020

Revenue($ in millions)

$2.7 $2.8

+ 4.5%

Q1 2019 Q1 2020

Gross Profit ($ in millions)

$1.2 $1.3

+2.7%

Q1 2019 Q1 2020

Net Income($ in thousands)

$21 $25

+ 19%

Increased demand from Electronics/Microelectronics and Medical Industries.

Record high backlog of $4,024,000.


FY 2020 Outlook*

Anticipate Rapid Growth in Revenue and Net Income for FY2020

New products and applications. Higher complexity, higher cost machinery. Alternative Energy sector (Fuel Cell) continuing to gain acceptance. 15‐20% growth projected. Highest sales in company history.

BACKLOGSHIPMENTSPROPOSALS LAB ACTIVITY*Outlook provided as of July 16, 2019


Investment Highlights

Strong brand and reputation: known for high quality and consistency.

Continued strengthening of application expertise, process development laboratories, new products, and technological advancements.

Broadening of product line with higher value machinery.

Expanding addressable markets and applications to broaden customer base.

FY2020 set to be the best year in Company history!

Highest revenue Excellent profits


Questions

www.sono-tek.com

OTCQX: SOTK


August 22, 2019

OTCQX: SOTK

Annual Meeting of Shareholders€¦ · Broad Base of Markets Electronics & ... Led by fuel cell...

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