SONO TEK CORP
For the period ended Aug 31, 2026. Filed Oct 14, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 31, 2026 · Filed Oct 14, 2026
SOTK$4.30-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-05-31; filed 2026-07-08.
0001171520-26-000167
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-08-31; filed 2026-10-14.
0001171520-26-000305
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 61 previous paragraphs and 80 current paragraphs.
35 unchanged; 21 reworded; 22 added; 5 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Sales of In-Line Coating Systems increased 16% in the second quarter of fiscal 2027 due to strong medical sales in the United States. Despite this quarterly increase, In-Line Coating Systems sales decreased 14% during the first half of fiscal 2027. The decrease is primarily attributed to the shipment of six high ASP systems valued at $4.42 million that occurred in the first half of fiscal 2026 that did not repeat in fiscal 2027. Sales of Multi-Axis Coating Systems decreased by 3% in the second quarter of fiscal 2027. In the first half of fiscal 2027, Multi-Axis Coating Systems increased 50% or approximately $1.3 million, driven by strong sales of specialty stent-coating systems to the U.S. medical device market. Sales of OEM Systems increased 63% to $642,000 in the second quarter and 67% to $873,000 in the first half of fiscal 2027. The increase in OEM sales in the second quarter and the first half of fiscal 2027 were driven by continued strong fluxing-system sales to a European OEM partner and strong semiconductor sales to an OEM in China.
Current report
Medical sales increased 209% to $3,105,000 in the second quarter of fiscal 2027 and 289% to $7,050,000 in the first half of fiscal 2027, led by shipments of balloon coating systems and specialty stent-coating systems. Industrial sales increased 62% to $385,000 in the second quarter of fiscal 2027 and 156% to $915,000 in the first half of fiscal 2027, reflecting a system sold to the defense sector for an optics-related application. Electronics/Microelectronics sales decreased 17% to $1,204,000 in the second quarter of fiscal 2027 and 14% to $2,068,000 in the first half of fiscal 2027.
Current report
Advanced Energy sales declined during the period, reflecting continued lower demand across the broader market. The Company expects this lower level of underlying demand to continue through the remainder of fiscal 2027 and into fiscal 2028. However, subsequent to the end of the second quarter, the Company announced approximately $7.19 million in orders from an existing Advanced Energy customer for ten production systems, with shipments expected primarily in fiscal 2028. This unusually large order is expected to result in a significant increase in reported Advanced Energy sales in fiscal 2028, despite the Company's expectation that underlying demand from the broader Advanced Energy market will remain at reduced levels.
Current report
In the second quarter of fiscal 2027, approximately 30% of sales originated outside of the United States and Canada compared with 47% in the second quarter of fiscal 2026.
Current report
In the first half of fiscal 2027, approximately 34% of sales originated outside of the United States and Canada compared with 39% in the first half of fiscal 2026.
Current report
U.S. and Canada sales increased 35% in the second quarter of fiscal 2027 and 15% in the first half of fiscal 2027, driven by strong sales to the U.S. medical-device market, including the stent and drug-coated balloon markets.
Current report
Asia Pacific sales decreased approximately 45% in the second quarter and 19% in the first half of fiscal 2027, reflecting lower sales in South Korea, Taiwan and Japan. These decreases were partially offset by increased sales in China, including strong first-half medical and semiconductor sales.
Current report
Latin America sales increased 2% in the second quarter of fiscal 2027 and were essentially flat with the prior-year quarter. Sales increased 199% in the first half of fiscal 2027, including a $242,000 medical system shipped to Costa Rica.
Current report
EMEA sales decreased 33% in the second quarter and 19% in the first half of fiscal 2027, primarily reflecting softer clean-energy sales in the region. The first-half decrease was partially offset by strong sales to a European fluxing OEM partner and solid medical-sector sales.
Current report
For the second quarter of fiscal 2027, gross profit increased by $177,000, or 7%, to $2,767,000 compared with $2,590,000 in the prior year period. The gross profit percentage improved by 300 basis points, rising to 53% from 50%. The increase in the gross profit percentage was influenced by product mix, a higher proportion of direct U.S. sales that do not carry distributor discounts and favorable installation expenses in the period.
Current report
For the first half of fiscal 2027, gross profit increased by $727,000, or 14%, to $5,981,000 compared with $5,254,000 in the first half of fiscal 2026. The gross profit percentage improved by 400 basis points, rising to 55% from 51%. The increase in the gross profit percentage was influenced by product mix, a higher proportion of direct U.S. sales that do not carry distributor discounts and favorable installation and warranty expenses in the period.
Current report
Gross margin performance during the first half of fiscal 2027 benefited from several factors, including the Company's continued focus on pricing and cost management, a favorable mix of higher-value systems, and a higher proportion of direct sales to U.S.-based customers, which generally do not carry distributor discounts and commissions. The Company has continued to expand its participation in larger, more complex production applications, which has also required increased investment in sales and marketing to support these opportunities.
Current report
While these strategic initiatives contributed to the improved gross margin performance, the product and geographic mix during the first half of fiscal 2027 was unusually favorable. Gross margins can vary significantly from period to period based on the specific systems shipped, customer and geographic mix, distributor involvement, installation requirements and other factors. Accordingly, the gross margin levels achieved during the first half of fiscal 2027 should not necessarily be viewed as indicative of margins expected in future periods.
Current report
Research and product development costs remained steady at $1,296,000 in the first half of fiscal years 2027 and 2026. In the first half of fiscal 2027 we experienced increases in employee health insurance expense and miscellaneous engineering expenses which were offset by decreases in salaries and supplies.
Current report
In the second quarter of fiscal 2027, operating income decreased $39,000, or 9%, to $382,000 compared with $421,000 for the second quarter of fiscal 2026. Operating margin for the quarter decreased to 7% compared with 8% in the prior year period. In the second quarter of fiscal 2027, an increase in operating expenses, partially offset by an increase in gross profit, were key factors in the decrease in operating income.
Current report
In the first half of fiscal 2027, operating income increased $374,000, to $1,279,000, compared with $905,000 for the first half of fiscal 2026. Operating margin for the first half of fiscal 2027 increased to 12% compared with 9% in the prior year period. In the first half of fiscal 2027, an increase in gross profit, partially offset by an increase in operating expenses, were key factors in the increase of operating income.
Current report
Net unrealized loss increased $60,000 to $37,000 in the second quarter of fiscal 2027 as compared to an unrealized gain of $23,000 in the second quarter of fiscal 2026. In the first half of fiscal 2027, unrealized loss increased $66,000 to $64,000 as compared with an unrealized gain of $2,000 in the first half of fiscal 2026.
Current report
We recorded income tax expense of $132,000 for the second quarter of fiscal 2027 compared with $103,000 for the second quarter of fiscal 2026. For the first half of fiscal 2027, we recorded income tax expense of $376,000 compared with $221,000 for the first half of fiscal 2026.
Current report
The net decrease in the deferred tax asset and liability was approximately $408,000 for the first half of fiscal 2027. The net decrease in the deferred tax asset is due to the expected utilization of capitalized research and development expenses against taxable income.
Current report
Net income decreased by $58,000 to $366,000 for the second quarter of fiscal 2027 compared with $424,000 for the second quarter of fiscal 2026. The decrease in net income during the second quarter is primarily a result of an increase in gross profit partially offset by an increase in operating expenses.
Current report
During the first half of fiscal 2027, our accounts receivable decreased $2,121,000 to $1,230,000 at August 31, 2026 from $3,351,000 at February 28, 2026. In the first half of fiscal year 2027, we collected all of the February 28, 2026 outstanding accounts receivable. The outstanding accounts receivable balance at February 28, 2026 included approximately $884,000 due from one customer that we had provided extended payment terms to in the first half of fiscal year 2026, the customer paid this balance in the first half of fiscal year 2027.
Current report
Our accounts receivable and customer deposits are interrelated in our business model. Our standard practice is to receive a cash deposit for our customer orders. Upon shipment of an order, the customer deposit is applied against the outstanding receivable. Our accounts receivable and customer deposit balances will vary depending upon customer activity. It is possible going forward that our accounts receivable balances will increase and there will be a corresponding reduction in our available cash balances.
Removed paragraphs (5)
Previous report
For the first quarter of fiscal year 2027, In-Line Coating Systems sales decreased $895,000, or 29%, to $2.16 million, impacted by a significant decrease in sales to the clean energy sector for a solar coating customer in the first quarter of fiscal year 2026 that did not repeat in the current quarter. Multi-Axis Coating Systems increased $1.39 million, or 206%, to $2.08 million. OEM Systems increased $101,000, or 78%, to $231,000, driven by strong sales to our fluxer OEM partners, and strong sales to a China-based OEM partners in the semiconductor market. Fluxing Systems decreased 39%, or $60,000, to $92,000. Spare Parts, Services, and Other remained relatively stable at $1.1 million.
Previous report
Sales to the Alternative Energy/Clean market decreased $2.93 million, or 90%, to $319,000, impacted by reduced electrolysis demand following government policy shifts, and no solar shipments. Medical market sales increased $3.14 million, or 388%, to $3.95 million led by strong specialty stent coating in the US, and DEB coating system sales in the US, China and Europe. Sales to the Electronics/Microelectronics market declined $80,000, or 8%, to $863,000. Industrial sales increased $411,000, or 345%, to $530,000 influenced by some significant rework orders on older machines that needed upgrades, and an R&D textile coating machine for nano-coatings.
Previous report
In the first quarter of fiscal year 2027, sales to customers in the U.S. and Canada were $3,530,000, essentially flat compared to sales of $3,543,000 in the prior year period. Asia Pacific (APAC) sales grew 24%, or $141,000, to $738,000, influenced by increased sales to China in the medical sector for DEB coating. EMEA sales increased $34,000, or 4%, to $930,000, and Latin America sales increased $367,000, or 382%, to $463,000, influenced by a $242,000 shipment to Costa Rica for a specialty medical device coating application used in advanced cardiac procedures, requiring precise deposition of a functional coating onto complex device geometries.
Previous report
Gross profit increased $549,000, or 21%, to $3.21 million for the first quarter of fiscal 2027, compared with $2.67 million in the prior-year period. Gross profit percentage improved by 500 basis points, rising to 57% from 52%. The strong gross margin performance during the quarter benefited from an especially favorable product mix, including increased shipments of high-value medical device coating systems, particularly stent coating and Drug-Eluting Balloon coating platforms. Our improved gross margin achieved during the current quarter may vary going forward from quarter to quarter because of changing product mix, which may influence future gross margin performance. In addition, a concentration of shipments to U.S.-based customers resulted in lower distributor discounts and commission expenses, supporting stronger margin performance.
Previous report
In the first quarter of fiscal year 2027, our operating income increased $414,000 to $897,000 compared to $483,000 in the first quarter of fiscal year 2026. The increase is primarily due to the current period’s increase in gross profit.
Reworded paragraphs (21)
Previous wording
We discuss expectations regarding our future performance, such as our business outlook, in our annual and quarterly reports, news releases, and other written and oral statements. These “forward-looking statements” are based on currently available competitive, financial and economic data and our operating plans. They are inherently uncertain, and investors must recognize that events could turn out to be significantly different from our expectations and could cause actual results to differ materially. These factors include, among other considerations, general economic and business conditions; political, regulatory, tax, competitive and technological developments affecting our operations or the demand for our products; inflationary and supply chain pressures; the recovery of the Electronics/Microelectronics and Medical markets; rebound of sales to the industrial market in the second quarter of fiscal year 2027; maintenance of increased order backlog; the imposition of tariffs; timely development and market acceptance of new products and continued customer validation of our coating technologies; adequacy of financing; capacity additions, the ability to enforce patents; maintenance of operating leverage; consummation of order proposals; completion of large orders on schedule and on budget; continued sales growth in the medical and alternative energy markets; successful transition from primarily selling ultrasonic nozzles and components to a more complex business providing complete machine solutions and higher value subsystems which are sold at higher average selling prices; and realization of quarterly and annual revenues within the forecasted range of sales guidance.
Current wording
We discuss expectations regarding our future performance, such as our business outlook, in our annual and quarterly reports, news releases, and other written and oral statements. These “forward-looking statements” are based on currently available competitive, financial and economic data and our operating plans. They are inherently uncertain, and investors must recognize that events could turn out to be significantly different from our expectations and could cause actual results to differ materially. These factors include, among other considerations, general economic and business conditions; political, regulatory, tax, competitive and technological developments affecting our operations or the demand for our products; inflationary and supply chain pressures; the recovery of the Electronics/Microelectronics and Medical markets; maintenance of increased order backlog; the imposition of tariffs; timely development and market acceptance of new products and continued customer validation of our coating technologies; adequacy of financing; capacity additions, the ability to enforce patents; maintenance of operating leverage; consummation of order proposals; completion of large orders on schedule and on budget; continued sales growth in the medical and alternative energy markets; successful transition from primarily selling ultrasonic nozzles and components to a more complex business providing complete machine solutions and higher value subsystems which are sold at higher average selling prices (“ASP”); and realization of quarterly and annual revenues within the forecasted range of sales guidance.
Previous wording
Our comprehensive suite of thin film coating solutions and application consulting services, provided by our expert applications engineers to guide our customers in developing the complete coating process, ensures unparalleled results for our clients. These solutions help some of the world’s most promising companies achieve technological breakthroughs and bring them to market. In anticipation of customer demands, our significant focus on R&D efforts allows us to keep pace with industry trends while continuously innovating. We strategically deliver our products through a network of direct sales personnel, carefully chosen independent distributors, and experienced sales representatives located in North America, Latin America, Europe, and Asia. This network ensures efficient market reach across diverse sectors around the globe. Approximately 38% of our sales were generated outside the United States and Canada in the first three months of fiscal year 2027.
Current wording
Our comprehensive suite of thin film coating solutions and application consulting services, provided by our expert applications engineers to guide our customers in developing the complete coating process, ensures unparalleled results for our clients and help some of the world’s most promising companies achieve technological breakthroughs and bring them to market. In anticipation of customer demands, our significant focus on R&D efforts allows us to keep pace with industry trends while continuously innovating. We strategically deliver our products through a network of direct sales personnel, carefully chosen independent distributors, and experienced sales representatives located in North America, Latin America, Europe, and Asia, ensuring efficient market reach across diverse sectors around the globe. Approximately 34% of our sales were generated outside the United States and Canada in the first six months of fiscal year 2027.
Previous wording
First Quarter Fiscal Year 2027 Highlights (compared with the first quarter of fiscal year 2026 unless otherwise noted) We refer to the three-month periods ended May 31, 2026 and 2025 as the first quarter of fiscal year 2027 and fiscal year 2026, respectively.
Current wording
Second Quarter Fiscal 2027 Highlights (compared with the second quarter of fiscal 2026 unless otherwise noted) We refer to the three-month periods ended August 31, 2026 and 2025 as the second quarter of fiscal 2027 and fiscal 2026, respectively.
Previous wording
Research and product development costs decreased in the first quarter of fiscal year 2027 due to a decrease in salary expense, a decrease in research and development materials and a decrease in supplies. These decreases were partially offset by an increase in miscellaneous expenses.
Current wording
Research and product development costs increased in the second quarter of fiscal 2027 due to increases in employee health insurance, an increase in research and development materials and an increase in miscellaneous engineering expenses.
Previous wording
Marketing and selling expenses increased in the first quarter of fiscal year 2027 due to an increase in salary expense related to our sales application lab, an increase in insurance expense, an increase in trade show expenses and an increase in other miscellaneous expenses. Our sales and marketing costs are variable, and a large portion of the costs are dependent upon trade shows and where geographically our sales are generated. We anticipate that our costs will increase in the future as we increase our trade show presence and the potential change in geographic origin of our sales from our in-house sales team to our external distributors.
Current wording
Marketing and selling expenses increased in both the second quarter and the first half of fiscal 2027 due to an increase in salary expense related to our sales application lab, an increase in salesperson and forward deployed engineering salaries, an increase in employee health insurance expense, an increase in trade show expenses and an increase in other miscellaneous expenses. Our sales and marketing costs are variable, and a large portion of the costs are dependent upon trade shows and where geographically our sales are generated. We anticipate that our costs will increase in the future as we increase our trade show presence and the potential change in geographic origin of our sales from those generated by our in-house sales team to more sales by our external distributors.
Previous wording
In the first quarter of fiscal 2027, we expended approximately $227,000 for commissions as compared with $152,000 in the prior year period, an increase of $75,000. The increase in commission expense during the current period is due to the increase in sales during the period and to increased commission rates for salesmen who had temporarily agreed to lower rates in the prior year period because of higher sales volumes associated with one customer.
Current wording
In the second quarter of fiscal 2027, we expended approximately $200,000 for commissions as compared with $175,000 in the prior year period, an increase of $25,000. In the first half of fiscal 2027, we expended approximately $426,000 for commissions as compared with $328,000 in the prior year period, an increase of $98,000. The increase in commission expense during the current periods is due to the increase in sales.
Previous wording
We expect our marketing and sales expenses to increase in fiscal 2027 as we invest in additional sales personnel, forward deployed engineering personnel, and programming talent to support new business opportunities, particularly those associated with production systems that have high average sales prices to drive future growth.
Current wording
We expect our marketing and sales expenses to increase in the second half of fiscal 2027 as we invest in additional sales personnel, forward deployed engineering personnel, and programming talent to support new business opportunities, particularly those associated with production systems that have high ASPs to drive future growth.
Previous wording
General and administrative expenses increased in the first quarter of fiscal 2027 due to increases in salary expense, insurance, professional fees and stock-based compensation. These increases were partially offset by a decrease in other corporate expenses.
Current wording
General and administrative expenses increased in both the second quarter and first half of fiscal 2027 due to increases in salaries, employee health insurance expense, corporate expenses, stock-based compensation and legal and accounting fees.
Previous wording
Interest and Dividend Income and Unrealized Loss:
Current wording
Interest, Dividend Income and Unrealized Gain and Loss:
Previous wording
Interest and dividend income decreased $27,000 to $115,000 in the first quarter of fiscal year 2027 as compared with $142,000 in the prior year period, due to a slight reduction in interest rates. Our present investment policy is to invest excess cash in highly liquid, lower risk US Treasury securities. At May 31, 2026, the majority of our holdings are rated at or above investment grade.
Current wording
Interest and dividend income increased $72,000 to $154,000 in the second quarter of fiscal 2027 compared with $82,000 for the second quarter of fiscal 2026. In the first half of fiscal 2027 interest and dividend income increased $45,000 to $269,000 as compared with $224,000 for the first half of fiscal 2026. The increase in interest and dividend income in the second quarter and first half of fiscal 2027 is due to an increase in our available cash balances. In the first half of fiscal 2027, our net income and a decrease in our accounts receivable balances were key factors in the increase of our available cash balances. Our present investment policy is to invest excess cash in highly liquid, lower risk US Treasury securities. At August 31, 2026, the majority of our holdings are rated at or above investment grade.
Previous wording
We recorded an income tax expense of $244,000 for the first quarter of fiscal year 2027 compared with $119,000 for the first quarter of fiscal year 2026. The increase in income tax expense in the current period is due to the increase in income before income taxes offset by the application of available research and development tax credits.
Current wording
The increase in income tax expense for the first half of fiscal 2027 is due to the increase in income before income taxes combined with an increase in state franchise taxes in the current period.
Previous wording
Net income increased by $256,000 to $741,000 in the first quarter of fiscal year 2027 compared with $485,000 in the prior year period. The increase in net income is primarily a result of an increase in gross profit partially offset by an increase in operating expenses and income tax expense.
Current wording
Net income increased by $198,000 to $1,107,000 for the first half of fiscal 2027 compared with $909,000 for the first half of fiscal 2026. The increase in net income during the first half of fiscal 2027 is primarily a result of an increase in gross profit partially offset by an increase in operating expenses and an increase in income tax expense.
Previous wording
Working Capital – Our working capital increased $1,226,000 to $17,461,000 at May 31, 2026 from $16,236,000 at February 28, 2026. The increase in working capital was primarily the result of the current period's net income and non-cash charges partially offset by purchases of equipment.
Current wording
Working Capital – Our working capital increased $1,838,000 to $18,074,000 at August 31, 2026 from $16,236,000 at February 28, 2026. The increase in working capital was primarily the result of the current period's net income and non-cash charges partially offset by purchases of equipment.
Previous wording
The following table summarizes the accounts and the major reasons for the $1,843,000 increase in “Cash”:
Current wording
The following table summarizes the accounts and the major reasons for the $2,946,000 increase in “Cash”:
Previous wording
Stockholders’ Equity – Stockholder’s Equity increased $837,000 from $19,774,000 at February 28, 2026 to $20,611,000 at May 31, 2026. The increase is a result of the current period’s net income of $741,000, proceeds from exercise of stock options of $10,000, and $86,000 in additional equity related to stock-based compensation awards. The details of stock-based compensation awards are explained in Note 5 in our financial statements.
Current wording
Stockholders’ Equity – Stockholders’ Equity increased $1,291,000 from $19,774,000 at February 28, 2026 to $21,065,000 at August 31, 2026. The increase is a result of the current period’s net income of $1,107,000, proceeds from exercise of stock options of $10,000 and $174,000 in additional equity related to stock-based compensation awards. The details of stock-based compensation awards are explained in Note 5 in our financial statements.
Previous wording
Operating Activities – We generated $1,941,000 of cash in our operating activities in the first quarter of fiscal year 2027 compared with using $922,000 in the prior year period, an increase of $2,863,000. The increase in cash generated by operating activities was the result of a decrease in accounts receivable in the current period, partially offset by a decrease in customer deposits.
Current wording
Operating Activities – We generated $3,102,000 of cash in our operating activities in the first half of fiscal 2027 compared with using $1,100,000 in the prior year period, an increase of $4,202,000. The increase in cash generated by operating activities was the result of a decrease in accounts receivable in the current period, partially offset by a decrease in customer deposits.
Previous wording
Investing Activities – For the first quarter of fiscal year 2027, our investing activities used $308,000 of cash compared with them providing $662,000 for the first quarter of fiscal 2026. For the first quarters of fiscal years 2027 and 2026, we used $82,000 and $52,000, respectively, for the purchase or manufacture of equipment, furnishings and leasehold improvements.
Current wording
Investing Activities – For the first half of fiscal year 2027, our investing activities used $202,000 of cash compared with using $120,000 for the first half of fiscal 2026. For the first half of fiscal years 2027 and 2026, we used $103,000 and $113,000, respectively, for the purchase or manufacture of equipment, furnishings and leasehold improvements.
Previous wording
In the first quarter of fiscal year 2027, net purchases of marketable securities used $226,000 of cash compared to net sales of marketable securities generating $715,000 of cash in the prior year period.
Current wording
In the first half of fiscal year 2027, net purchases of marketable securities used $99,000 of cash compared with $9,000 in the prior year period.
Previous wording
***Financing Activities –***In the first quarter of fiscal year 2027, we received $10,000 for the exercise of stock options. In the first quarter of fiscal year 2026, we used $79,000 of cash for the purchase of treasury stock.
Current wording
***Financing Activities –***In the first half of fiscal year 2027, we received $10,000 for the exercise of stock options. In the first half of fiscal year 2026, we used $151,000 for the purchase of treasury stock.
Previous wording
Net Increase in Cash and Cash Equivalents – In the first quarter of fiscal 2027, our cash balance increased $1,643,000 as compared to a decrease of $339,000 in the first quarter of fiscal 2026. In the first quarter of fiscal 2027, our operating activities generated $1,941,000 of cash and our marketable securities used $226,000 of cash. In addition, we used $82,000 for the purchase or manufacture of equipment, furnishings and leasehold improvements and we received $10,000 for the exercise of stock options.
Current wording
Net Increase in Cash and Cash Equivalents – In the first half of fiscal 2027, our cash balance increased by $2,910,000 as compared to a decrease of $1,370,000 in the first half of fiscal 2026. In the first half of fiscal 2027, our operating activities generated $3,102,000 of cash and purchases of our marketable securities used $99,000. In addition, we used $103,000 for the purchase or manufacture of equipment, furnishings and leasehold improvements.
Previous wording
In March 2025, the FASB issued ASU 2025-05 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which clarifies the measurement of expected credit losses for accounts receivable and contract assets arising from revenue transactions within the scope of Topic 606. The amendments require entities to measure expected credit losses for these financial assets using a methodology consistent with the current expected credit loss model while clarifying the interaction between the guidance in Topic 326 and Topic 606. The guidance in this ASU is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal years of adoption. The Company is currently evaluating the impact that the adoption of ASU 2025-05 will have on its consolidated financial statements and disclosures.
Current wording
In March 2025, the FASB issued ASU 2025-05 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which clarifies the measurement of expected credit losses for accounts receivable and contract assets arising from revenue transactions within the scope of Topic 606. The amendments require entities to measure expected credit losses for these financial assets using a methodology consistent with the current expected credit loss model while clarifying the interaction between the guidance in Topic 326 and Topic 606. The guidance in this ASU is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal years of adoption. The Company has adopted this ASU and it did not have a material impact on the Company’s consolidated financial statements and related disclosures.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
ITEM 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report — wording carried from elsewhere
First Half Fiscal 2027 Highlights (compared with the first half of fiscal 2026 unless otherwise noted) We refer to the six-month periods ended August 31, 2026 and 2025 as the first half of fiscal 2027 and fiscal 2026, respectively.