SONO TEK CORP Segments Disclosure
NOTE 12: SEGMENT DATA
The company operates in one segment. The chief operating decision maker, who is responsible for allocating resources and assessing performance, has been identified as the Chief Executive Officer (the “CODM”). The CODM assesses the financial performance of the company and decides how to allocate resources based on Operating income.
The following table presents our segment data (rounded to the nearest thousand):
| Fiscal Year Ended | ||||||
| 2025 | 2024 | |||||
| Net Sales | $ | 20,504,000 | $ | 19,700,000 | ||
| Direct Cost of Goods Sold | ||||||
| Materials & Freight | 8,126,000 | 7,669,000 | ||||
| Production Labor | 817,000 | 435,000 | ||||
| Other | 645,000 | 590,000 | ||||
| 9,588,000 | 8,694,000 | |||||
| Service Department | ||||||
| Salaries | 560,000 | 496,000 | ||||
| Travel | 218,000 | 216,000 | ||||
| Outside Installations | 42,000 | 139,000 | ||||
| Warranty Costs | 121,000 | 77,000 | ||||
| Other | 236,000 | 233,000 | ||||
| 1,177,000 | 1,161,000 | |||||
| Total Cost of Goods & Service | 10,765,000 | 9,855,000 | ||||
| Gross Profit | 9,739,000 | 9,845,000 | ||||
| Research & Product Development | ||||||
| Salaries | 1,879,000 | 2,011,000 | ||||
| Insurance | 167,000 | 163,000 | ||||
| Depreciation | 231,000 | 210,000 | ||||
| R & D Materials | 233,000 | 310,000 | ||||
| Other | 214,000 | 192,000 | ||||
| 2,724,000 | 2,886,000 | |||||
| Marketing and Selling | ||||||
| Salaries | 1,809,000 | 2,098,000 | ||||
| Commissions | 767,000 | 674,000 | ||||
| Insurance | 196,000 | 174,000 | ||||
| Travel & Entertainment | 157,000 | 134,000 | ||||
| Advertising / Trade Show | 438,000 | 371,000 | ||||
| Depreciation | 87,000 | 54,000 | ||||
| Other | 224,000 | 191,000 | ||||
| 3,678,000 | 3,696,000 | |||||
| General and Administrative | ||||||
| Salaries and Wages | 1,051,000 | 824,000 | ||||
| Insurance | 183,000 | 158,000 | ||||
| Depreciation and Amortization | 76,000 | 62,000 | ||||
| Professional Fees | 384,000 | 280,000 | ||||
| Corporate Expenses | 361,000 | 353,000 | ||||
| Stock Based Compensation | 248,000 | 204,000 | ||||
| Misc Other | 24,000 | 200,000 | ||||
| 2,327,000 | 2,081,000 | |||||
| Total Operating Expenses | 8,729,000 | 8,662,000 | ||||
| Operating Income | 1,010,000 | 1,182,000 | ||||
| Interest Income & Unrealized Gain | 524,000 | 562,000 | ||||
| Income Before Taxes | 1,534,000 | 1,744,000 | ||||
| Income Tax Expense | 261,000 | 303,000 | ||||
| Net Income | $ | 1,273,000 | $ | 1,441,000 |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.