16 August 2022
CVD Equipment’s Q2 revenue up 44% year-on-year
For second-quarter 2022, CVD Equipment Corp of Central Islip, NY, USA (a designer and maker of chemical vapor deposition, gas control and other equipment and process solutions for developing and manufacturing materials and coatings) has reported revenue of $5.8m, up 44% on $4m a year ago.
Gross margin has risen, due mainly to leveraging fixed costs on higher sales levels plus a good product mix, offsetting increases in component cost and compensation costs.
Due to higher employee-related costs to support the greater demand as well as marketing and engineering efforts, operating expenses rose from $2.08m to $2.3m.
Net loss was $0.84m ($0.12 per diluted share). This contrasts with net income of $1.47m ($.22 per diluted share) a year ago. However, that included a $2.4m gain on debt extinguishment from the forgiveness of CVD’s PPP (paycheck protection progam) loan.
Order backlog at the end of June was $16.7m, up 60.5% from $10.4m at end-December 2021. “2022 continues to be a year of strong demand for our CVD equipment, and the ‘electrification of everything’ is at the forefront of fueling our order growth,” notes president & CEO Emmanuel Lakios. First-half 2022 orders received for the firm’s CVD segment were about $13m, consisting primarily of 21 CVD/FirstNano systems (compared with 23 for all of 2021). Of the 21 system orders (for shipment over the next several quarters and into 2023), 14 are for the recently announced PVT-150 system addressing silicon carbide (SiC) growth and processing, while the remainder are for battery materials R&D and production, advance carbon-based capacitors, superconducting tape, and for a legacy advanced R&D FirstNano product.
“While the negative effects of the COVID-19 pandemic continue to impact the aerospace industry, generally in the form of reduced long-distance travel and reduction of gas-turbine engine sales, industry reports indicate improvement may begin to occur in the late 2022-2023 timeframe,” says executive VP & chief financial officer Thomas McNeill.
Starting in Q3/2021 and continuing to date, CVD has been impacted by increased costs on certain manufacturing material components, as well as delays in supply chain deliveries. CVD says that these increases and delays may also impact its ability to recognize revenue and result in reduced gross margin in future quarters, extended manufacturing lead times and reduced manufacturing efficiencies. The firm is also seeing inflationary effects that have resulted in increased costs for labor and materials. To mitigate the manufacturing delays, CVD has placed orders with increased lead times, and it continues to assess other material suppliers in an effort to alleviate the potential cost impacts. In addition, CVD is utilizing its flexible in-house manufacturing to further mitigate potential delivery delays and material cost increases.
“We continue to be affected by supply chain issues and we are taking measures to address the uncertainties caused by both the COVID-19 pandemic and the geopolitical instability in Eastern Europe,” says Lakios. “Our two key initiatives are expanding our in-house production capabilities and partnering with key suppliers. Both are essential to our goal of self-reliance and will support our commitments to our customers,” he adds.