CVD Equipment Corporation, a leading provider of chemical vapour deposition systems, has released 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 CEO.
“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 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,” Rosenbaum stated.
Revenue for the second quarter was $6.4m, compared to $9.2m in the prior quarter and $10.8m from the same period last year. Net loss for the second quarter was $1.3m compared to income of $0.6m in the prior quarter and income of $1.3m 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 materialised) and existing contract adjustments.
Backlog as of 30th June, 2018 was $6.4m compared to $9.8m on 31st March, 2018. In light of the results for this quarter, CVD 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.
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.