Sono-Tek Corporation (NASDAQ:SOTK) stock fell 2.22% (As on October 18, 11:37:55 AM UTC-4, Source: Google Finance) after the company in the second quarter of FY 23 has reported 1% increase in the total sales to $7,815,000 year-over-year for the first six months of FY2023, while decreasing 8% to $3,763,000 in the second quarter of fiscal 2023 due to delayed shipments resulting from supply chain demand challenges. Backlog on August 31, 2022 was $5,049,000, an increase of 19% compared with backlog of $4,230,000 on May 31, 2022 (the end of the fiscal Q1), and a decrease of 5% compared to backlog of $5,325,000 on February 28, 2022. Gross profit decreased 9% to $1,896,000, compared with $2,074,000 for the second quarter of fiscal 2022. The gross profit margin was 50.4% compared with 51.0% for the prior year period, primarily due to product mix. Operating income decreased 60% to $178,000 compared with $449,000 for the second quarter of fiscal 2022 primarily due to decreases in revenue and gross profit combined with increases in operating expenses. Operating margin for the quarter decreased to 4.7% compared with 11% in the prior year period. Net income decreased by 53% to $162,000, or $0.01 per share, compared with $344,000, or $0.02 per share, for the second quarter of fiscal 2022, primarily due to a decrease in operating income in the period.

Moreover, Fluxing System sales were strong and positively impacted by sales of the newly launched SelectFlux X2 product to several large PCB (printed circuit board) contract manufacturers, resulting in 241% year over year growth to $399,000 in the second quarter of fiscal 2023, and 49% growth to $707,000 for the first half of fiscal 2023.  OEM system sales dipped by 10% to $762,000 in the second quarter of fiscal 2023. By market, sales to the industrial market grew by 77% to $528,000 in the second quarter, and 118% to $806,000 for the first half of fiscal 2023, and were positively impacted by the first shipment of a Sono-Tek roll-to-roll system, that was shipped into the food packaging industry. Revenue in the medical sector decreased by 27% to $798,000 in the second quarter of fiscal 2023. In the second quarter of fiscal 2023, approximately 56% of sales originated outside of the United States and Canada compared with 62% in the second quarter of fiscal 2022. At August 31, 2022 cash, cash equivalents and marketable securities totaled $10.7 million, Sono-Tek had no debt on its balance sheet and stockholders’ equity was $14.3 million.