CVD Equipment Corporation (NASDAQ: CVV), today announced its
financial results for the third quarter ended September 30,
2023.
Emmanuel Lakios, President and CEO of CVD Equipment Corporation,
commented, “As previously communicated, our order and revenue
levels have historically fluctuated, which is often typical in the
highly cyclical process equipment industry. As such, while we saw a
year over year decline in third quarter revenue of $1.9 million,
our year-to-date 2023 revenue of $20.0 million was 7.6% higher than
the corresponding period in the prior fiscal year. While we are
disappointed with our third quarter revenue, we continue to see
opportunities in key strategic markets of high-power electronics,
battery materials/energy storage and aerospace and defense. We
remain committed to stay the course on our strategy to achieve
consistent long-term profitability, with a focus on growth and
return on investment. Our return to profitability is subject to our
ability to receive additional system orders and continue our
efforts to reduce our overall operating costs.”
Third Quarter 2023 Financial Performance
- Revenue of $6.2 million, down 23.2% as compared to the third
quarter of 2022, primarily due to lower system revenues.
- Orders for the third quarter were $4.1 million driven by
continued demand in the aerospace sector.
- Backlog as of September 30, 2023 of $16.6 million, a decrease
from $18.8 million at June 30, 2023.
- Our gross profit margin percentage was consistent with recent
quarters at 25.6% and less than the prior year quarter of 29.8%
principally due to lower revenues and changes in contract mix.
- Operating loss of $1.0 million.
- As a result of a modification to certain customer contracts,
revenue recognition for certain contracts changed from “point in
time” to “over time”. As a result of this contract modification, we
recorded an increase in revenue of $0.8 million during the third
quarter of 2023 that was deferred as of June 30, 2023 and
recognized on the date of the contract modification.
- Net loss of $0.8 million or $0.11 basic and diluted share,
compared to a net income of $63,000 or $0.01 per basic and diluted
share during the prior year third quarter.
- Cash and cash equivalents as of September 30, 2023 of $14.3
million.
Third Quarter 2023 Operational Performance
- Additions of Ms. Deb Wasser and Dr. Ashraf Lotfi to our Board
of Directors. Ms. Wasser brings extensive experience in the areas
of corporate governance and financial communications. Dr. Lotfi
brings an in-depth knowledge of the power electronics market.
- Received approximately $2.0 million of orders in the aerospace
sector expected to be delivered over the next 12 months. Also
contributing to the third quarter order bookings were orders from
research institutions of approximately $0.9 million.
- We continue to make investments in both research and
development and sales and marketing focused on our three key
strategic markets.
- In the high-power electronics market, there were no PVT150
system orders received in the first nine months of September 30,
2023. We have expanded our marketing efforts, including direct
outreach to multiple potential customers as well as attendance at
key silicon carbide related trade shows and conferences including
the ICSCFRM conference in September 2023. The engaged customers
include both silicon carbide wafer manufacturers as well as fully
integrated wafer and device manufacturers. The success of our
PVT150 and PVT200 systems marketing efforts is dependent on the
performance of our equipment in the field, overall market
conditions, our customers’ ability to qualify their end product
with their customers and our customers’ ability to obtain the
funding necessary to purchase our equipment.
- On August 8, 2023, the Company entered into a purchase and
license agreement with a third party to sell certain assets and
license certain proprietary information of MesoScribe in exchange
for $0.9 million. The purchase price is payable in several
installments and contingent upon certain performance metrics and
other milestones. The Company expects to transaction to be
completed during the next three months with the shipment of the
equipment to the purchaser.
Management Conference Call and Webcast
The Company will hold a conference call to discuss its results
today at 5:00 pm (Eastern Time). To participate in the live
conference call, please dial toll free (877) 407-3043 or
international (201) 389-0926. A telephone replay will be available
for 7 days. To access the replay, dial (877) 660-6853 or
international (201) 612-7415. The replay passcode is 13742244.
A live and archived webcast of the call will also be available
on the company’s website at www.cvdequipment.com/events. The
archived webcast will be available at the same location
approximately two hours following the end of the live event.
About CVD Equipment Corporation
CVD Equipment Corporation (NASDAQ: CVV) designs, develops, and
manufactures a broad range of chemical vapor deposition, thermal
processing, physical vapor transport, gas and chemical delivery
control systems, and other equipment and process solutions used to
develop and manufacture materials and coatings for industrial
applications and research. Our products are used in production
environments as well as research and development centers, both
academic and corporate. Major target markets include high power
electronics (silicon carbide), EV battery materials / energy
storage (carbon nanotubes, graphene and silicon nanowires) and
aerospace & defense (ceramic matrix composites). Through its
application laboratory, the Company allows customers the option to
bring their process tools to our laboratory and to work
collaboratively with our scientists and engineers to optimize
process performance.
The Private Securities Litigation Reform Act of 1995 provides a
“safe harbor” for forward-looking statements. Certain information
included in this press release (as well as information included in
oral statements or other written statements made or to be made by
CVD Equipment Corporation) contains statements that are
forward-looking. All statements other than statements of historical
fact are hereby identified as “forward-looking statements, “as such
term is defined in Section 27A of the Securities Exchange Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Such forward looking information involves a
number of known and unknown risks and uncertainties that could
cause actual results to differ materially from those discussed or
anticipated by management. Potential risks and uncertainties
include, among other factors, market and business conditions, the
success of CVD Equipment Corporation’s growth and sales strategies,
the possibility of customer changes in delivery schedules,
cancellation of, or failure to receive orders, potential delays in
product shipments, delays in obtaining inventory parts from
suppliers and failure to satisfy customer acceptance requirements,
competition in our existing and potential future product lines of
business, including our PVT150 system; our ability to obtain
financing on acceptable terms if and when needed; uncertainty as to
our ability to develop new products for the high power electronics
market; uncertainty as to our future profitability; uncertainty as
to any future expansion of the Company; uncertainty as to our
ability to adequately obtain raw materials and components from
foreign markets in light of geopolitical developments; and other
risks and uncertainties that are described in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2022 and the
Company’s other filings with the Securities and Exchange
Commission. For forward-looking statements in this release, the
Company claims the protection of the safe harbor of the Private
Securities Litigation Reform Act of 1995. The Company assumes no
obligations to update or supplement any forward-looking statements
whether as a result of new information, future events or otherwise.
Past performance is not a guarantee of future results.
CVD EQUIPMENT CORPORATION AND
SUBSIDIARIES
Condensed Consolidated
Statements of Operations
(In thousands, except per share
data- Unaudited)
Three Months Ended
September 30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenue
$
6,234
$
8,119
$
19,998
$
18,579
Cost of revenue
4,636
5,699
14,579
13,952
Gross profit
1,598
2,420
5,419
4,627
Operating expenses
Research and development
704
518
1,865
1,397
Selling
434
290
1,281
895
General and administrative and other *
1,450
1,490
4,683
3,937
Total operating expenses
2,588
2,298
7,829
6,229
Operating income (loss)
(990
)
122
(2,410
)
(1,602
)
Net income (loss)
$
(753
)
$
63
$
(1,906
)
$
(1,773
)
Basic and diluted income (loss) per
share
$
(0.11
)
$
0.01
$
(0.28
)
$
(0.26
)
* Nine months ended September 30, 2023 includes loss on sale of
Tantaline subsidiary of $0.2 million and an impairment charge
related to MesoScribe fixed assets of $0.1 million.
CVD EQUIPMENT CORPORATION AND
SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(In thousands -Unaudited)
September 30,
2023
December 31,
2022
Assets
Current assets
Cash and cash equivalents
$
14,285
$
14,365
Accounts receivable, net
2,585
3,788
Contract assets
2,895
2,170
Inventories, net
4,290
2,538
Other current assets
848
797
Total current assets
24,903
23,658
Employee retention credit receivable
-
1,529
Property, plant and equipment, net
12,207
12,596
Intangible assets, net
107
119
Other assets
10
10
Total assets
$
37,227
$
37,912
Liabilities and Stockholders’
Equity
Current liabilities
$
8,723
$
8,164
Long-term debt, net of current portion
288
349
Total stockholders’ equity
28,216
29,399
Total liabilities and stockholders’
equity
$
37,227
$
37,912
This earnings release should be read in conjunction with the
Company’s filings with the Securities and Exchange Commission,
including the Annual Report on Form 10-K for fiscal year ended
December 31, 2022.
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version on businesswire.com: https://www.businesswire.com/news/home/20231114163625/en/
For further information about this topic please contact:
Richard Catalano, Executive Vice President & CFO
Phone: (631) 981-7081 Email:
investorrelations@cvdequipment.com
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