Market Overview

CVD Reports Second Quarter 2018 Results

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CVD Equipment Corporation (NASDAQ: CVV),
a leading provider of chemical vapor deposition systems, today announced
its second quarter 2018 financial results.

"The second quarter was a transitional one for CVD as we wind down the
large aviation component projects and invested in our new CVD Materials
facility - moving forward on our plan for added future growth in this
sector," said Len Rosenbaum, President and Chief Executive Officer. "The
new CVD Materials facility expands our local footprint and expertise to
seamlessly integrate customer needs and specifications into our products
and solutions. In tandem we increased our investment in R&D across our
portfolio to bring more value to our customers in high potential
markets. As a result of this increased R&D investment, we recently filed
three (3) provisional patent applications for our Tantaline® corrosion
resistant coatings and treatment to specialty metals for demanding
applications. Additionally, we are preparing to file a provisional
patent on carbon composites that has applications in areas such as
aerospace, medical, MEMs and filtration. These investments will help
position us to meet future demand and profitability over the longer-term
in new and growing markets."

Revenue for the second quarter was $6.4 million, compared to $9.2
million in the prior quarter and $10.8 million from the same period last
year. Net loss for the second quarter was $1.3 million compared to
income of $0.6 million in the prior quarter and income of $1.3 million a
year ago. This loss is primarily a result of the ongoing costs related
to the CVD Materials business, costs associated with maintaining a
production staff in anticipation of receiving additional equipment
orders (which to date have not materialized) and existing contract
adjustments. Net loss per share was $0.21 compared to income of $0.09 in
the first quarter of 2018 and income of $0.20 a year ago. Backlog as of
June 30, 2018 was $6.4 million compared to $9.8 million on March 31,
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.

CVD's significant investment in the Materials facility will transform
the Company over the long term: 1) CVD holds the proprietary knowledge
and has the capability to build the production systems required to meet
demand and 2) CVD possesses the intimate knowledge necessary to operate
the systems in a cost-effective manner, providing a significant
operational and financial competitive advantage to take the Company to
the next level. Execution of this growth strategy should provide an
additional, diverse and stable revenue stream that should significantly
improve growth and profitability over the long-term.

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 June 30   Six months Ended June 30
2018   2017 2018   2017
Revenue $ 6,435 10,830 $ 15,589 20,480
Gross profit 1,116 4,410 4,877 8,582
Operating expenses 2,496     2,580 5,346     5,034
Operating (loss)/income (1,380 ) 1,830 (469 ) 3,548
Net (loss)/income (1,331 )   1,257 (772 )   2,281
Net (loss)/income per Diluted earnings per share ($0.21 ) $ 0.20 ($0.12 ) $ 0.36
 
 
CVD Equipment Corporation and Subsidiaries
Condensed Consolidated Balance Sheets

(In thousands)

 
  June 30, 2018   December 31, 2017
Assets
Current assets:
Cash and cash equivalents

 

$ 15,396 $ 14,211
Accounts Receivable, net 2,722 2,059
Contract assets 5,314 8,397
Inventories 2,648 2,966
Other current assets   247   167
Total current assets 26,327 27,800
Property, plant and equipment, net 29,722 28,839
Deferred taxes 1,552 1,609
Other assets 243 68
Intangible assets 512 662
Total assets $ 58,356 $ 58,978
 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,227 $ 1,175
Accrued expenses and other current liabilities 2,106 2,738
Current portion of long-term debt 654 647
Current portion acquisition related contingent
payments 100 100
Contract liabilities 279 466
Deferred revenue   1,108   292
Total current liabilities 5,474 5,418
Long-term debt 12,576 12,906
Total liabilities 18,050 18,324
 
Total stockholders' equity   40,306   40,654
 
Total liabilities and stockholders' equity $ 58,356 $ 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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