SONO-TEK CORPORATION

Red flags

• One customer represented approximately 28% of fiscal 2026 revenue, versus 11% in fiscal 2025; three customers represented 61% of outstanding receivables at year-end.
• Revenue growth was only 2% despite the shift toward higher-ASP systems, while Alternative/Clean Energy sales declined $1.86 million, or 19%, and Industrial sales declined 18%.
• Customer orders are generally individual purchase orders without long-term volume commitments and may be delayed, cancelled or reduced with loss of deposit as the only penalty.
• Inventory declined to $3.92 million, but the slow-moving inventory allowance increased to $445,000 from $398,000, including approximately $97,000 of additional reserves in fiscal 2026.