CVD Equipment Corporation (NASDAQ: CVV), a leading provider of
chemical vapor deposition systems and materials, today announced
its first quarter 2021 financial results.
As a result of the COVID-19 pandemic, CVD’s new order bookings
substantially decreased commencing in the first quarter of 2020,
which reduced revenues in subsequent quarters, resulting in CVD
first quarter 2021 revenue of $3.4 million as compared to $6.0
million in the (Pre COVID-19 pandemic) first quarter of 2020, a
decrease of $2.6 million or 44.3%. This reduction in sales and
resultant lower gross profit negatively affected CVD’s net income
in the first quarter of 2021. Net loss for the first quarter 2021
was $1.5 million, or $0.23 per diluted share, as compared to a net
income of $1.7 million or $.25 per diluted share in the first
quarter of 2020. During the first quarter of 2020, CVD was
favorably impacted by the CARES Act which allowed for the carryback
of NOLS and resulted in CVD recognizing $1.5 million of an income
tax benefit.
As compared to the fourth quarter 2020, CVD’s revenue in the
first quarter of 2021 increased $.2 million, and the net loss
decreased by $.2 million, as compared to the net loss in the fourth
quarter of 2020 of $1.7 million (exclusive of the impairment charge
of $3.6 million related to CVD’s Tantaline product line).
Thomas McNeill, Chief Financial Officer, said “In order to
increase our liquidity and to provide necessary working capital to
support our on-going business and operations, we have decided to
sell our facility located at 555 North Research Place, Central
Islip, NY, and on March 29, 2021 we entered into an agreement to
sell this building for a purchase price of $24,360,000, subject to
the satisfaction or waiver of certain conditions to closing or
contingencies, which have now been satisfied. A portion of the sale
proceeds would be used to satisfy the existing mortgage debt of
approximately $9.2 million at March 31, 2021, and to pay various
transaction-related costs in an amount to be determined. The excess
proceeds will be used for general working capital purposes. On or
about May 23, 2021, the buyer may advise us of any requirement to
extend the closing date up to 60 days thereafter, which will also
require an additional escrow amount of $1.2 million.
“The Company’s backlog at March 31, 2021 improved by $.3 million
to $6.0 million, as compared to $5.7 million at December 31, 2020.
Since the first quarter of 2020 the Company continues to experience
significant negative effects due to the COVID-19 pandemic including
reductions of new orders. The Company’s order activity has improved
both in the quarter ended March 31, 2021 and into Q2 2021, and its
longer term improvements are expected to be benefited by the
anticipated slow recovery in the Aerospace markets which industry
reports indicate improvements into 2022-2023.”
As previously announced, the Company’s majority of the Board of
Directors proceeded to change the direction of the company. In late
January under the leadership of the Company’s newly appointed
President and Chief Executive Officer Emmanuel Lakios, the Company
embarked on an evaluation of our business by market and product
segments. This analysis is based on market growth, cash generation
and over all return on investment, which confirmed that the
equipment systems and production spares are the core elements of
the Company’s business.
Mr. Lakios said, “As we exit 2020 a year of unchartered waters
for the global economy due to the COVID-19 pandemic, we see signs
of improvement in our served markets. Our largest served market,
Aerospace, show signs of the start of a recovery with industry
announcements indicating that long haul travel will increase
starting in 2021 causing demand for increased airplane seat
capacity in 2022. We believe this will directly impact our CVD
equipment business. It is our intent to have a philosophy of
customer focus and partnership with each customer. In this way we
will have insight and the ability to add value in the cause of
increasing our market presence in Aerospace, biomedical, and
carbon-based products.
“We stated previously that our focus will be on utilizing our
dedicated staff and 38 years of developed technology for increasing
production end use applications, to provide more value and maturity
of our products, bringing more support and value to our customers
and the ability for improving our gross margins.
“With respect to our 555 Building, which we previously
determined is not needed for present and future business
operations, in April 2021 we have completed the move of our
Tantaline USA product line to our 355 Building, while all functions
of the Tantaline product line have been consolidated into the
Denmark office and the United States expenses related to Tantaline
have ceased. Our MesoScribe operations move has commenced and is
expected to be completed by the end of June 2021.
“Our Tantaline product line, which was acquired in 2016, has
been consolidated both operationally as well as sales management
into our Denmark operations. Our evaluation is that the Denmark
facility currently has ample production capacity and that our
analysis that the USA Tantaline facility and operations were not
required to serve the Tantaline market was correct. Our objective
continues to have the Tantaline product line be cash neutral and to
minimize any further investment requirement. We will continue to
evaluate the viability of the Tantaline product line over the
quarters to come.
“In the same process we continue to evaluate all the segments of
our business for growth, profitability and cash generation. We look
forward to our annual shareholder meeting in mid-July and we will
continue to communicate on important developments in the
meanwhile.”
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) 407-2991 or
International (201) 389-0925. A telephone replay will be available
for 7 days following the call. To access the replay, dial (877)
660-6853 or international (201) 612-7415. The replay passcode is
13719642. A live and archived webcast of the call is also available
on the company’s website at www.cvdequipment.com/events.
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, market and business conditions, the
COVID-19 pandemic, 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. Past performance in not a guaranty of
future results.
CVD EQUIPMENT CORPORATION AND
SUBSIDIARIES
Condensed Consolidated
Statements of Operations
For the Three Months Ended
March 31, 2021 and 2020
(In thousands)
Three
Months Ended
2021
2020
Revenue
$3,366
$6,036
Gross profit
318
1,935
Operating expenses
1,937
1,827
Operating (loss) income
(1,619)
108
Net (loss) income
(1,506)
1,658
Diluted (loss) income per share
$ (0.23)
$ 0.25
CVD EQUIPMENT CORPORATION AND
SUBSIDIARIES
Condensed Consolidated Balance
Sheets
As of March 31, 2021 and March
31, 2020
(In thousands)
2021
2020
Assets
Current Assets
Cash and cash equivalents
$5,929
$7,400
Accounts receivable, net
819
3,238
Contract assets
1,027
1,753
Inventories, net
1,340
1,691
Taxes Receivable
716
1,528
Other current assets
448
532
Assets held for sale
16,181
-
Total Current Assets
$26,460
$16,142
Property, plant and equipment, net
12,460
32,225
Other assets
285
427
Total Assets
$ 39,205
$ 48,794
Liabilities and Stockholders'
Equity
Current Liabilities
$14,119
$5,897
Total Long-Term Liabilities
2,416
11,208
Total Stockholders’ Equity
22,670
31,689
Total Liabilities and Stockholders’
Equity
$39,205
$48,794
CVD 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, 2020
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210513005577/en/
Thomas McNeill Phone: (631) 981-7081 Fax: (631) 981-7095 Email:
investorrelations@cvdequipment.com
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