CVD Equipment Corporation, a leading provider of chemical vapour deposition systems based in New York, has released its third quarter 2018 financial results.
Leonard A. Rosenbaum, President and CEO, commented, “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. From our current vantage point, these conditions may continue to weigh on revenue and earnings over the next two quarters.”
He continued, ”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.”
CVD’s revenue for the third quarter was $4.0m, compared to $6.4m in the prior quarter and $10.8m from the same period last year. Net loss for the third quarter was $2.5m compared to a net loss of $1.3m in the prior quarter and income of $1.4m 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 materialised), existing contract adjustments, and the ongoing costs related to the CVD Materials business.
Backlog as of September 30, 2018 was $6.5m compared to $6.4m on 30th June, 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.