CVD Equipment Corporation has revealed its first set of results since moving to its new facility and headquarters, with revenue and earnings for the year ending December 31, 2012 understandably reflecting the transition.
With the company completing its move into the new facility in March (2013), however, CVD now expects to focus solely on business operations and a strong 2013 – and beyond.
This is affirmed by a ‘very high’ quotation level, explained president and CEO Leonard Rosenbaum.
On revenue of approximately $22.158 million for the year ended December 31, 2012 the company recorded net earnings of approximately $436,000 – or $0.07 per basic and diluted share.
This came against a backdrop of transition for the company. Early in 2011, having realized that the current facilities were inadequate to meet anticipated future production requirements, management set upon a plan of expansion. In March 2012, CVD closed on the purchase of a 120,000 square foot facility to which it subsequently added another 10,000 square feet to replace the 63,275 square feet that was then occupied in two buildings.
Over the course of the remaining nine months of 2012, significant time and effort was spent renovating the facility to meet future goals and objectives. This time was also utilized to increase and train additional sales, engineering and production staff in order to maximize productivity once the move is complete. During this period CVD also increased its research from $955,000 in 2011 to $1.330 million in 2012.
Additionally, order acceptance levels were purposely reduced to approximately $8.342 million in order to maintain a more manageable backlog level during the transition into the new facility.
“Thankfully we are now at the end of this transition and we will now be able to turn our full attention back to operating the business”
Leonard Rosenbaum, president and CEO
Order backlog usually is a reasonable management tool to indicate future revenues and profits, however it does not provide an assurance of future achievement of revenues or profits as order cancellations or delays are possible. Backlog from quarter to quarter can vary based on the timing of order placements and shipments.
The company continues to maintain a strong cash position and a healthy working capital ratio despite the cash outlays for the new facility and the inherent inefficiencies of moving into new quarters.
Rosenbaum stated, “In 2011 we had major growth in equipment order levels and revenues. This growth stretched our Ronkonkoma manufacturing facility to its limit and restricted our ability to hire additional personnel to further increase our manufacturing capability. We expected this constraint would be eliminated starting in Q3, 2012 but it took us until mid March of 2013 to finally move into the new facility.”
“This resulted in a very inefficient operation over the last six months due to the distractions and resource utilization associated with getting the new facility operational. Thankfully we are now at the end of this transition and we will now be able to turn our full attention back to operating the business.”
He continued, “Our quotation level is very high and we anticipate 2013 will demonstrate that we have a very bright future. Our ability to work with customers to solve their process issues and to define, design and manufacture customized equipment needed to meet their production needs will continue to provide significant order levels…the company will further expand our technology, products and customer base in 2013.”