CVD Equipment Corporation (NASDAQ: CVV), a leading provider of
chemical vapor deposition systems, today announced its third
quarter 2018 financial results.
“As highlighted in our pre-announcement, the third quarter saw a
confluence of events that drove lower-than-anticipated results.
These included delays in orders from a number of customers and an
exceptionally long permitting process for the build-out of our new
CVD Materials production facility,” said Leonard A. Rosenbaum,
President and Chief Executive Officer. “From our current vantage
point, these conditions may continue to weigh on revenue and
earnings over the next two quarters.
“Despite these setbacks, knowledge of our markets and
conversations with current and potential customers continue to make
us optimistic about our overall business and the materials
segment’s potential to contribute to our long-term success in
high-growth areas such as biomedical materials, aerospace, and
corrosion resistant applications. Our new Central Islip facility
will be the backbone of our materials future, where our R&D
investments are beginning to bear fruit. Recently we filed key
provisional patents for corrosion resistant coatings and a family
of novel Fluid Reactors that allows the efficient transfer of gases
into and out of liquids. One potential application is for use in
oxygenation cartridges used during cardio pulmonary bypass
surgery.”
Revenue for the third quarter was $4.0 million, compared to $6.4
million in the prior quarter and $10.8 million from the same period
last year. Net loss for the third quarter was $2.5 million compared
to a net loss of $1.3 million in the prior quarter and income of
$1.4 million a year ago. This loss is primarily a result of costs
associated with maintaining a production staff in anticipation of
receiving additional equipment orders (which to date have not
materialized), existing contract adjustments, and the ongoing costs
related to the CVD Materials business. Net loss per share was $0.39
compared to a net loss of $0.21 in the second quarter of 2018 and
income of $0.22 a year ago. Backlog as of September 30, 2018 was
$6.5 million compared to $6.4 million on June 30, 2018. In light of
our results for this quarter Management and the Board will continue
to evaluate the Company's business strategy, including cost
structure, needed capital, and capital infrastructure
investments.
The timing of the CVD’s return to profitability will depend
upon, among other things, the receipt of new orders, obtaining the
necessary building permits for the new CVD Materials facility, and
the ramp up of the materials business following the completion of
this facility, which is expected late in the second quarter of
2019. The Company has retained a new architect and has met local
government officials, with the aim of expediting the permitting
process, in order for construction of the facility to proceed and
be completed as soon as practicable.
The Company will hold a conference call to discuss its results
today at 4:30 pm (Eastern Time). To participate in the live
conference call, please dial toll free (877) 407-0784 or
International (201) 689-8560. A telephone replay will be available
for 7 days following the call. To access the replay, dial (844)
512-2921 or (412) 317-6671. The replay passcode is 13682176. A live
and archived webcast of the call is also available on the Company’s
website at:
https://www.cvdequipment.com/event/second-quarter-2018-earnings-conference-call/.
About CVD Equipment Corporation
CVD Equipment Corporation (NASDAQ: CVV) designs, develops, and
manufactures a broad range of chemical vapor deposition, gas
control, and other state-of-the-art equipment and process solutions
used to develop and manufacture materials and coatings for research
and industrial applications. This equipment is used by its
customers to research, design, and manufacture these materials or
coatings for aerospace engine components, medical implants,
semiconductors, solar cells, smart glass, carbon nanotubes,
nanowires, LEDs, MEMS, and other applications. Through its
application laboratory, the Company provides process development
support and process startup assistance with the focus on enabling
tomorrow’s technologies™. It’s wholly owned subsidiary CVD
Materials Corporation provides advanced materials and metal surface
treatments and coatings to serve demanding applications in the
electronic, biomedical, petroleum, pharmaceutical, and many other
industrial markets.
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, conditions, success of CVD Equipment
Corporation’s growth and sales strategies, the possibility of
customer changes in delivery schedules, cancellation of orders,
potential delays in product shipments, delays in obtaining
inventory parts from suppliers and failure to satisfy customer
acceptance requirements.
CVD Equipment Corporation and
Subsidiaries
Condensed Consolidated Statements of
Operations
(In thousands except per share
information)
Three Months Ended September 30 Nine
months Ended September 30 2018 2017
2018 2017 Revenue
$ 4,028 10,832 $ 19,617
31.312 Gross (loss)/profit
(56) 4,603 4,821
13.184 Operating expenses
2,797
2,712
8,144
7.746
Operating (loss)/income (2,853)
1,890 (3,323) 5,438
Net (loss)/income
(2,503) 1,396
(3,275) 3,677 Net
(loss)/income per Diluted earnings per share
($0.39) $0.22 ($0.51)
$0.58
CVD Equipment Corporation and
Subsidiaries
Condensed Consolidated Balance
Sheets
(In thousands)
September 30, 2018
December 31, 2017 Assets Current assets: Cash and
cash equivalents
$14,192 $14,211 Accounts Receivable, net 2,587 2,059 Contract
assets 2,551 8,397 Inventories 2,752 2,966 Other current assets
538 167 Total current assets 22,620
27,800 Property, plant and equipment, net 30,273 28,839 Deferred
taxes 1,925 1,609 Other assets 72 68 Intangible assets 520 662
Total assets $55,410 $58,978
Liabilities and stockholders' equity Current
liabilities: Accounts payable $1,261 $1,175 Accrued expenses and
other current liabilities 1,778 2,738 Current portion of long-term
debt 658 647 Current portion acquisition related contingent
payments 100 100 Contract liabilities 229 466 Deferred revenue
891 292 Total current liabilities 4,917
5,418 Long-term debt 12,411 12,906
Total liabilities 17,328
18,324
Total stockholders' equity 38,082
40,654 Total liabilities and stockholders'
equity $55,410 $58,978
Earnings release should be read in conjunction
with Company’s Annual Report on Form 10-K for fiscal year ended
December 31, 2017
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version on businesswire.com: https://www.businesswire.com/news/home/20181114005872/en/
For further information about CVD Equipment Corporation:Gina
Franco, 631-981-7081Fax :
631-981-7095investorrelations@cvdequipment.com
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