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CVD Equipment Corporation announced its financial results for the third quarter ended September 30, 2024.
Manny Lakios, President and CEO of CVD Equipment Corporation, commented, “We are pleased that CVD’s third quarter 2024 revenue was $8.2 million, representing a 31.4% increase from the prior year period, which supported an improvement in operating performance and system gross margins. It is also encouraging that our September 30th backlog was $19.8 million, meaningfully higher than our 2023 year-end backlog. We are staying the course on our strategic efforts to build critical customer relationships, while carefully managing our costs to achieve our goal of long-term profitability and positive cash flow, while simultaneously focusing on growth and return on investment.”
“We continue to see an ongoing recovery of our Aerospace and Defense market segment. In early November, we received a $3.5 million follow on order for our CVI/CVD3500 system from an existing aerospace customer.”
“The silicon carbide market has remained quite dynamic, with ongoing overcapacity and declining wafer pricing,” continued Mr. Lakios. “That said, SiC wafer producers are quickly transitioning to 200 mm production to stay competitive, and CVD is making progress with the shipment of our first PVT200™ system during the third quarter. As we stated previously, this was a strategic order for SiC 200 mm crystal boule growth that we received in the first quarter of 2024. The performance of the system is currently being evaluated for production by our now second PVT account. In addition, we are continuing to support both our PVT150™ and PVT200™ products in the field.”
Mr. Lakios added, “Our order and revenue levels continue to fluctuate given the nature of the emerging growth end markets we serve.”
Third Quarter 2024 Financial Performance
- Revenue of $8.2 million, an increase of 31.4% year over year primarily due to higher CVD Equipment system revenues and an increase in gas delivery system revenues by our SDC segment.
- In the third quarter of 2023, we recognized an increase in revenue of $0.8 million that was the result of a modification of a customer contract.
- Backlog as of September 30, 2024 of $19.8 million, a decrease from $24.0 million at June 30, 2024 and increase from $18.4 million at December 31, 2023.
- During the quarter, we recognized a $1.0 million non-cash charge to reduce our PVT150™ inventory to net realizable value. This charge was recognized as a result of changes in the overall market for equipment for 150 mm SiC wafers.
- Our gross profit margin percentage improved due to improvements in contract mix but was offset by the inventory charge.
- The Company recognized a $0.6 million gain on the sale of equipment by its MesoScribe subsidiary.
- MesoScribe fulfilled its final orders of $0.7 million during the quarter and ceased operations as of September 30, 2024.
- Operating income of $77,000 as compared to an operating loss of $1.0 million in the prior year third quarter.
- Net income of $0.2 million or $0.03 per basic and diluted share, compared to a net loss of $0.8 million or $0.30 per basic and diluted share during the prior year third quarter.
- Cash and cash equivalents as of September 30, 2024 of $10.0 million as compared to $14.0 million as of December 31, 2024.
Third Quarter 2024 Operational Performance
- Orders for the third quarter were $4.1 million principally from our CVD Equipment segment as compared to $4.1 million in the prior year third quarter. Orders for the first nine months of 2024 were $21.0 million as compared to $19.9 million for the first nine months of 2023.
- We continue to make investments in both research and development and sales and marketing, focused on our three key strategic markets – aerospace & defense, high power electronics and EV battery materials / energy storage.
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CVD Equipment Corporation announced its financial results for the second quarter ended June 30, 2024.
Manny Lakios, President and CEO of CVD Equipment Corporation, commented, “Second quarter 2024 revenue was $6.3 million, a 25.2% increase from the prior year period. We are pleased to have recently shipped a PVT 200 system which was part of the first quarter strategic order for SiC 200mm crystal boule growth. The performance of the system will be evaluated for production by our now second account. We are encouraged that our backlog at June 30, 2024 is meaningfully higher than our year-end backlog.”
“Overall, we are disappointed with CVD’s operating performance in the first half of the year, as order and revenue levels continue to fluctuate given the nature of the emerging growth end markets we serve. We’ll stay the course on strategic efforts to build critical customer relationships, achieve profitability, carefully manage our costs and cash flow while simultaneously focusing on growth and return on investment.”
Second Quarter 2024 Financial Performance
- Revenue of $6.3 million, an increase of 25.2% year over year primarily due to higher system revenues and an increase in SDC revenues
- Backlog as of June 30, 2024 of $24.0 million, a decrease from $27.1 million at March 31, 2024
- Our gross profit margin percentage declined to 25.4% as compared to the prior year quarter due to a less profitable mix of contracts
- Operating loss of $0.9 million
- Net loss of $0.8 million or $0.11 per basic and diluted share, compared to a net loss of $1.1 million or $0.16 per basic and diluted share during the prior year second quarter
- Operating loss and net loss for the prior year second quarter both included non-recurring charges of $0.3 million consisting of a loss on the sale of our Tantaline subsidiary of $0.2 million and an impairment charge of $0.1 million resulting from our decision to wind down our MesoScribe business
- Cash and cash equivalents as of June 30, 2024 of $10.0 million
Second Quarter 2024 Operational Performance
- Orders for the first quarter were $3.2 million primarily driven by demand in our SDC segment for gas delivery equipment. Orders for the first six months of 2024 were $16.9 million as compared to $15.8 million for the first six months of 2023.
- We continue to make investments in both research and development and sales and marketing focused on our three key strategic markets.
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CVD Equipment Corporation appointed Andrew Africk to its Board of Directors. The Board of Directors also approved an expansion of the number of directors from the current level of six to seven.
“We are delighted that Mr. Africk has agreed to join our Board,” said Lawrence J. Waldman, Chairman of CVD Equipment Corporation’s Board of Directors. “We appreciate his support of the company as our largest shareholder, and we welcome his extensive corporate and financial experience that will be invaluable to our Board of Directors and executive management team.”
Mr. Africk is the founder of Searay Capital LLC, a private investment company. Mr. Africk established Searay Capital in July 2013 after 21 years leading private equity and capital markets investments for Apollo Global Management. As a Senior Partner at Apollo, Mr. Africk was responsible for investments in technology and communications, and he has 30 years of experience financing, analyzing and investing in public and private companies. Mr. Africk graduated from UCLA with a B.A. in Economics, from the University of Pennsylvania Law School with a J.D., and from the University of Pennsylvania’s Wharton School of Business with an MBA.
Manny Lakios, President and CEO of CVD Equipment Corporation, also commented, “I am very pleased to have Mr. Africk join our Board of Directors. His in-depth knowledge of the technology sector will add an additional perspective and allow him to contribute as a member of the Board of Directors strategically as we focus on key markets of high power electronics, battery materials, aerospace and industrial applications.”
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CVD Equipment Corporation announced its financial results for the first quarter ended March 31, 2024.
Manny Lakios, President and CEO of CVD Equipment Corporation, commented, “First quarter 2024 revenue was $4.9 million, down significantly versus the prior year period, as our business continues to experience fluctuations in revenue given the nature of the emerging growth end markets we serve. While we are disappointedwith our first quarter performance, we’ll stay the course on strategic efforts to achieve profitability, carefully managing our costs and cash flow while simultaneously focusing on growth and return on investment.”
Mr. Lakios added, “As we mentioned in our year-end press release, we started off the year with several key order wins during the first quarter. These included a strategic order for our PVT200™ system from a new customer, marking an important milestone as we seek to gain traction for SiC crystal boule growth, as well as a multi-system order for our SiC CVD coating reactors. The PVT200™ customer plans to evaluate our equipment for potential additional orders. This improved order performance resulted in an increase in backlog from $18.4 million at year-end to $27.1 million at March 31, 2024. We are encouraged by these orders, as we continue to fund both research and development and sales and marketing activities, including direct engagementwith multiple potential customers, highly focused on penetrating key market opportunities.”
First Quarter 2024 Financial Performance
- Revenue of $4.9 million, down $3.8 million or 43.4% year over year primarily due to lower system revenues.
- Gross profit margin percentage was 17.5% due to lower gross profit margins on certain contracts in progress at our CVD Equipment segment partially offset by higher gross profit margins by our SDC segment.
- Operating loss of $1.6 million.
- Net loss of $1.5 million or $0.22 basic and diluted share, compared to a net loss of $40,000 or $0.01 per basic and diluted share for the prior year first quarter.
- Cash and cash equivalents of $11.9 million as of March 31, 2024 as compared to $14.0 million as of December 31, 2023.
First Quarter 2024 Operational Performance
- Orders for the first quarter were $13.5 million primarily driven by demand in the aerospace sector and in our SDC segment for gas delivery equipment.
- As mentioned above we received these important orders in the quarter:
- An order for our new PVT200™ system used to grow silicon carbide crystals for the manufacture of 200 mm wafers. This represents our second customer for our PVT equipment that the customer will evaluate for potential additional orders.
- A multisystem order from an industrial customer for approximately $10 million that will be used for depositing a silicon carbide protective coating on OEM components, with systems scheduled to ship in 2025.
- During the first quarter, we implemented a plan to reduce our operating costs to be consistent with current customer demand. This resulted in a reductionin our work force in early January 2024. We continue to evaluate the demand for our products and opportunities to reduce our operating costs.
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CVD Equipment Corporation announced its financial results for the fourth quarter and fiscal year ended December 31, 2023.
Manny Lakios, President and CEO of CVD Equipment Corporation, commented, “Fourth quarter 2023 revenue was $4.1 million, down significantly versus the prior year period, as our business continues to experience fluctuations in revenue given the nature of the emerging growth end markets we serve. While we are disappointed with both our fourth quarter and full year performance, we’ll stay the course on our strategy to return to consistent profitability, with a focus on growth and return on investment.”
Mr. Lakios added, “Our primary goal is to expand penetration of our equipment solutions into high power electronics, battery material, aerospace and industrial applications. To this end, I am very pleased to announce that we started off 2024 with several key new order wins. First, we successfully penetrated a second PVT equipment customer, with an evaluation order for our newly launched PVT200 system used to grow 200 mm silicon carbide crystals. This represents an important milestone for CVD, with potential follow-on production orders should our equipment effectively meet the customers’ needs. Second, we received a $10 million multisystem order for a SiC CVD coating reactor from an industrial customer, which will be used to deposit a silicon carbide protective coating on OEM components. We are encouraged by these orders, as we continue to make investments in both research and development and sales and marketing, including direct engagement with multiple potential customers, focused on our key markets.”
Fourth Quarter 2023 Financial Performance
- Revenue of $4.1 million, down $3.1 million or 43.2% year over year primarily due to lower system revenues.
- Gross profit margin percentage was a negative 8.5% due to a large contract that experienced significant cost overruns during the quarter.
- Operating loss of $2.5 million.
- Net loss of $2.3 million or $0.33 basic and diluted share, compared to a net income of $1.5 million or $0.23 per basic and diluted share during the prior year fourth quarter. Net income in 2022 included $1.5 million of other income related to the recognition of Employee Retention Credits related to fiscal 2021.
- Cash and cash equivalents of $14.0 million as of December 31, 2023.
Full Year 2023 Financial Performance
- Revenue of $24.1 million, down $1.7 million or 6.6% year over year primarily due to the disposition of Tantaline and the wind down of MesoScribe’s operations.
- Our gross profit margin percentage was 21.0% in 2023 as compared to 25.7% in the prior year due to a large contract in 2023 that experienced significant cost overruns and other higher margin system contracts in 2022.
- Operating loss of $4.9 million.
- Net loss of $4.2 million or $0.62 basic and diluted share, compared to a net loss of $0.2 million or $0.03 per basic and diluted share in the prior year. Net loss in 2022 included $1.5 million of other income related to the recognition of Employee Retention Credits.
Fourth Quarter 2023 Operational Performance
- Orders for the fourth quarter were $5.8 million driven by continued demand in the aerospace sector and in our SDC segment for gas delivery equipment.
- Received a $2.1 million system order in the aerospace sector that will be delivered over the next 12 months.
- Received a $1.0 million order in our SDC segment for gas delivery equipment.
- During the fourth quarter, we developed a plan to reduce our operating costs to be consistent with current customer demand. This resulted in a reduction in our work force in early January 2024. We continue to evaluate opportunities to reduce our operating costs.
Full Year 2023 Operational Performance
- Booking of new orders from customers was $25.8 million, representing a decrease of approximately 22.1% compared to 2022 bookings of $33.1 million. The decline in bookings was related to large orders of PVT150 systems that were received in 2022.
- Backlog as of December 31, 2023 of $18.4 million, an increase from $17.8 million from the prior year end.
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CVD Equipment Corporation appointed Dr. Ashraf Lotfi to its Board of Directors. The Board of Directors also approved an expansion of the number of directors from the current level of five to six.
“We are delighted that Dr. Lotfi has agreed to join our Board,” said Lawrence J. Waldman, Chairman of CVD Equipment Corporation’s Board of Directors. “His extensive semiconductor and power electronics device industry expertise, and proven track record of bringing innovative technologies to market, will be invaluable as we execute our core strategy focused on the electrification of everything.”
Dr. Lotfi is currently a venture partner with Deep Sciences Ventures and serves on the board of Lotus Microsystems, ApS. Dr. Lotfi previously served as Vice President and a Fellow at Intel Corporation. Prior to Intel, he was Power Chief Technology Officer for Altera Corporation serving its Enpirion Power Business as well as the broader Field Programmable Gate Array community. Altera was acquired by Intel in 2015. Prior to Altera, he served as President and Chief Executive Officer of Enpirion, Inc., which he founded in 2002.
From Enpirion’s inception, Dr. Lotfi led its strategic direction with a unique industry‐first vision to create the ultimate power converter‐on‐chip creating ubiquitous DC‐DC conversion at the silicon level. In 2013, he led Enpirion’s merger into Altera to realize his vision of highly integrated power management closely coupled to leading‐edge digital silicon loads. Prior to founding Enpirion, he was Director of Advanced Power Research at Bell Laboratories.
Manny Lakios, President and CEO of CVD Equipment Corporation, also commented, “We are very pleased to welcome Dr. Lotfi to our Board of Directors. His in-depth knowledge of the power electronics market and his track record of scaling the Enpirion Power Business will allow him to immediately contribute to our management team and Board of Directors as we pursue the pipeline of customer opportunities in our key strategic markets of high-power electronics, battery materials/energy storage and aerospace and defense.”
Dr. Lotfi stated, “I am very delighted to join CVD Equipment Corporation. Its long history and solid IP capabilities, particularly in silicon carbide, the essential enabling technology for electrification, form a strong basis for continued growth and participation in critical parts of vital applications and growth markets.”
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