CVV - Earnings call transcript Q3 2021 | CVD Equipment Corporation

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Operator

Greetings, and welcome to our CVD Equipment's 2021 Third Quarter Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] Presenting on the call today will be Emmanuel Lakios, President and CEO and member of the CVD Board of Directors; and Thomas McNeill, Executive Vice President and Chief Financial Officer.

earnings Relations and at section our to replay www.cvdequipment.com. posted Investor the of have press call release information We our website

subject expectations of on available those with are conditions forward-looking related of Before you limited and the during described including, general differ future and today's like and business ended section I'd market to certain number projections for to contain the release growth, statements XX, call. our year performance, risks this many the Factors not and December uncertainties may a total call including materially press of I XXXX. These on demand our comments are and statements, from and but to forward-looking for assumptions, results our outlook. to, Risk financial those based described the made market, begin, in the our that XX-K filings SEC, remind products Actual

and as In addition, on or expectations. all today, statements revised forward-looking update new forward-looking no made circumstances based statements of to any obligation we are undertake

to the would like turn I call Manny. over Now to

Emmanuel Lakios

financial end of to call third our Mr. to are like information, President. Welcome presenting important will McNeill, CFO, am information provide CVD to quarterly and conference Corporation's call. us. pleased name our We at look business our developments to Hello. related summary. be thoughts is regarding CEO substantive XXXX Lakios, Thomas you to will Equipment My be important the your the today your I providing our to to Emmanuel pertinent you conference company question-and-answer our forward in quarter I introduce would section. and with who we questions as

Thomas McNeill

the respectively, or million $X.X $X.X good or September afternoon, with ended in performance XXXX a sale million the months XXXX the income CVD compared $X to loss $X.XX of increase share in in by CVD's per September in compared of operating the per as of you, QX and income XX, compared quarter share $X.X the $X.X third a other $X to to revenue or was third XXXX, gain months diluted XXXX. Net loss our Manny, and in $X.X of million. million amount on for to XX, net building quarter improving ended the quarter million With of diluted for $X.X quarter million $X.X for Included X.X%. an million XXXX respect as months XXXX, results. third Thank million X was million, was third $X.XX of and the X XXXX. XXXX QX everyone. was the X

of sorry, XXXX X $X.X was amount the the September of $X.X or XXXX, in of of Included ended was months the September $X.X XX, Sequentially, ended the share sale months the per in the in first XX, quarter September net And to first $X.X million gain and in the a XXXX, an Net income net ended compared operating allows million a for for XXXX million was XX, as building of was loss for $X.X months As revenue decrease the million, quarter third third on revenue pandemic, and effects $X.X months subsequent was million substantially improvement for $X.X quarter CVD's X gain net a were and $XX.X subsequent result first XXXX of which by XXXX of XXXX. of the million quarters, in COVID-XX COVID-XX X to in CARES operating income X million the $X.XX respectively. debt. resulted to loss amount loss which loss the impacted of X that favorably as of second the decreased operating compared income $X of million $X.X of XXXX other in a per to order X tax revenues first $X forgiveness the in million our XXXX. Included Act, an XXXX, of losses, million. CVD's carryback the months due million. the was loan of XXXX the of million recognizing compared months bookings in to diluted PPP XXXX, second and CVD's operating quarter of the quarter and months reduced to as of million resulting CVD in to $X.X received extinguishment X debt or the 'XX or share CVD's on income $X.X million, impacted XXXX, in of increase new which the compared $X.X of related $XX.X $X.X pandemic of in million of XX.X%. diluted I'm $X.XX an the million as first in for XXXX the an of for -- benefit of during the

During placing well may impacts. QX delays ability and as delays increased impact on to in lead XXXX, also mitigate suppliers as assessing material times mitigate help as CVD certain components extend increased potential manufacturing CVD's to as as as well efficiencies. supply its to recognize revenue in with material other manufacturing times to commenced by lead orders reduced quarters profit CVD try reduce was the chain manufacturing costs gross the manufacturing future has cost and well impacted margins deliveries. This

recovery aerospace to XXXX, industry XXXX. occur including at the new negative indicate experience million the the Since to With flexible at activity first of the $X.X is sale. first company's CVD XXXX, which benefited And XX, slow of longer-term June XXXX, will mitigate in XXXX September order in COVID, and as be to while reductions company quarters million XXXX potential begin anticipated to delays frame. orders. the its its of the XX, effects addition, in of we increases. to improved quarter company's The will reports time X In the million compared utilizing to to respect has $X.X the our from -- $X.X manufacturing believe cost by improvements delivery scheduled further in-house building improved continued both backlog material significant by markets,

million, $X.X As strategies. our net million on sale the million XXXX. North of which sustainable improves sales paid current approximately a various balance previously September $XX.X then debt that we sheet facility provides The us at at growth cash on announced, the Islip transaction-related and closed With costs. with XX, pleased of is of our bolster of proceeds in XXX million, York $XX.X we're mortgage July XX, and to XXXX, approximately to $XX position, Central Research satisfied facility, our have New on price

million of $X.X September XX, million the our a December retained earnings was sale cash to is now of equivalents liquidity, With XXX%. at XX, to working to a million of at improved As million shareholder the result equity at our XX, building and XXX respect XX, December XXXX, $X.X And million of compared and September we $XX.X the to million capital the improved of $X.X by $X sale XXXX, $X.X approximately at or as CVD's $XX.X September our at earnings the XXXX. XXXX, increase building, cash of the positive an million as approximately compared $X XX, overall gain result our million, retained on primarily and XXXX. again,

are the with have Tantaline outbreaks have XXXX, initiated potential discussed. the I on in impacts USA months negative from length actions may and cannot XXXX of time while months to highly revenue further during $X.X ultimate In impact impact the to addition, of the and that be assurance uncertain product substantially ceasing and we The outbreak no impacts profitability, COVID-XX X recent supply of variant months X chain, especially the there our we revenues to Delta from reduced to mitigate chain on during spend our the as And the profitability. impacts first our the be COVID-XX can factors first now and previously supply a the predicted, longer-term the of of and X $XXX,XXX CapEx of related first million XXXX line. the

managing the to operating aerospace market, profitability efficiencies receipt our business is worsen, in to new over our our turn dependent return the cash capital operating the compliance orders, on other upon, effects And the COVID-XX Manny, our now as support capital things, XX-Q. lessening our improvement continue in back the the ongoing covenant. Our XX take of maintain of among equipment with well CEO. of this and believe and as flow and all working from will as operations Based needs to next months continue sufficient these operations current long capital cash will requirements to factors, environment our equivalent expenses. capital we well the of expenditure our we on assess operating be projected meet of for cash as anticipated or to planned Should and expenditures actions cash filing working I'd and to like the the Form loan call our to position

Emmanuel Lakios

Tom, offering, our product viability. initiated the or up XXXX. for and the all X we of We've with strategic and focus XXXX, our and for balance presentation. thank profitability present planning you shoring first our your of our months optimizing spent In market interest maximizing sheet future QX,

strategic to we We that focused in obtained want markets. orders announce our also growth

a the closed orders, Sciences, pilot of OneD case During system use customer. a vehicle X production was the and quarter, on electric and nanomaterial we which third customer, with battery X Battery production to research other

with recovery in the orders and in Our of X and order We both system now XX CVD rate the incremental million received range quarter orders second per quarter. third third shown quarter, has $X year-to-date. the in

to production as applications and order continues defense continue including division aerospace show growth. as strategy our SDC incremental anodes on to applications. for focus our It Our to nanomaterials, is well battery

And to materialize cautious material the increase XXXX. the our that gas in assessment us spare the timing of pleased in see recent aerospace turbine market. our will engine parts demand that business our have a will been also are in within resurgence for the global and that In gives a optimism We delivery. most of supply costs addressing This of further production -- we issue chain in companies. have the this uncertainty material seen delay increases be general challenge and and group,

as vigorous engagement our suppliers. supplier as well of a expanded implemented have network We

Our to cost to manufacturing improve vertical capacity the is delivery products. and being integrated tapped our supply of

We sale our have provides both expect approximately summary, a the year On manufacturing our far over, these well future to as face for sale strategy from positive in facility our outcome XXX completed $XX of building long-term on cash building we issues. and addressing even the many of the Islip capital challenges. working the in In as growth opportunities. of hand. is additional ample any million front, to indicators, accommodate Central July The short-term of with in another in shift providing was capacity with supply chain to assist XXX

to return profitability. However, our focus shareholders our our remains consistent on the customers, and employees, of our pursuit and growth

questions Your important and us. comments are to

close With open we'd the to of floor formal to the questions. your like this presentation,

Operator

Your comes with Instructions] [Operator Please Brett question Reiss your Montgomery first line of question. proceed with from Scott. Janney the

Brett Reiss

a series to XXXX? of deliver we questions delivering I the still OneD device you're Are first that in Battery with first respect to the quarter. of in quarter have schedule to the on the

Emmanuel Lakios

is are the to yes. for plan schedule in The deliver that. we on quarter, first And

Brett Reiss

a stuff it's by battery the be but this Is where about private website, company, employed the do where Now they go pilot to talk that you going which for on them, that them? in we're their making is Wisconsin. when reactor, plant it's to

Emmanuel Lakios

confident not think just It just But CVD Wisconsin. Washington may but well. would stated I not Vincent great is CEO Well, this sure it's and in -- was probably I that for state is Pacific they Equipment I'm Wisconsin. -- really answer And not -- I'm and a -- I correct. believe conference questions possibly. your call, a it as Northwest, be is Brett,

Brett Reiss

plant I I CVD, this every devices they that's going read When the -- I mean they one for first interested that they're possibly up? be may Yes. have it many. don't really could reads possibly are own open I'm what location to in. need -- to what your and you of like among going

Emmanuel Lakios

correct. That's CVD like each reactor reactor a locations and and every their CVD -- for one a need will they need will that of sites. They

As and to website. go attractive the I suggest they a very interesting listeners would probably have model they publicized, that their

sites. We we will are and confident supplier doing be of our choice the utmost, for of those feel that each

Brett Reiss

we What else they off and what one solely have they we have and Are experience to really lifts if in deliver that do know-how using intellectual they clicks, else? barriers because patents for should to proprietary entry bring do property. their that go equation? Now our they of could with on us somebody their something or have no

Emmanuel Lakios

our Brett, our typically, -- barrier The -- performance. the to competition the is

-- we'll and strategic committed the this per engagement as their to And But continue we we effort facilitate level time see a were an will to we're We them we come. for into to pleased us. them, customer on not this specification, that as selected. and as done deliver will we putting years a for and see is the are partner of We installation, them. with one development with that important

Brett Reiss

Once being any and our in used, device is is plant would revenue installed stream future their recurring us? accrue to that there

Emmanuel Lakios

course, to base. application pilot similar it's because or aerospace a production -- of There's installed production a our application

continue parts will be and for We installed and additional separate successful have, And support we orders, will spare without to we would adopted. them, consumable expect just base and again, them which even will the contracts. supply that hope under they

Brett Reiss

questioning. line Different of

I potential or have there. order. firm you And a you similar orders, is that have that the are you've And force? say that dollar companies so, some changed sales your up your compensate not You you changed They're you but if metric that there sometimes the monitor? orders a way the are Do amounts gone because are sales of submissions tenders these they'll outstanding. where something firm out compensated. has get backlog course, of follow of force report you when But x way

Emmanuel Lakios

employees, Well, and company been the There's or the of to specific which compensation executives with we which a our our in the is level of performance, package metrics function. to to have department entire competitive the to from objectives, the on individual also organization. based also that's all rack partially group for performance file and associated every the is communicated

For the it's your answer first imagine question. you That's . with team, can rate. sales order

average a hour update opportunities. of and his The the probabilities we call the we ratios few, what monitor management, and total we our commits forecast and what to that opportunities aspect of we And what we weekly in we day our then into on second opportunities forecast. do daily the best opportunities. basis, ratios of Jeff forecast. we real team, best to our our question opportunities. ourselves, team our all the people, are to forecast our on weighted is Clearly, there compare at that our -- a internal But monitor every on and that looking it opportunities are -- from best forecast all a And our the to compare we which be, The our would to anticipate strong few the we to then to have actually few. what's was what we financial commit actually myself roll on that the

I'm of So filters through iterations. goes the numbers. with it a of ratio those or couple pleased

in have targeted for well. those we We backups ample accounts as our and have forecast,

Brett Reiss

you ago? getting any Now picking those X of from -- said, any Electric we you to X similar successfully type General some as orders made got years additional again, more is Is of large aerospace back. years possibility up manufacturer since aerospace reactor or some the or orders Electric there for General either other

Emmanuel Lakios

and is have a not for were components. question the we orders -- their to Ceramic never nice We major in But have to production Brett, for the they business player an down for customer received consumable buying back gas XXXX, a specifically that uptick. parts started The Matrix we though. to we component see start first record, we will We've and General positioning to they stated the internal I'll are product as spare in started gas from have start both say appreciate business turbine Electric. I turbine a that engine the material the standpoint engine of we'll increase recovering trickle shipped in What think these It's from demand, the see, Well, of to that. industry. demand, Composites, therefore, clearly that. will and engine now us. that in where see where I

where fully likely that X.X So seeing level that, capacity consumables XXXX I to we their and anticipate tapped another to before equipment. is start years before and take have buy year that additional will would of they until

players next have we well. demand on engage components. don't saying equipment jeez, We're proposals have, the we're we And it engage of that, to will for And component buy the XXXX until optimistic mean or and than recovery with manufacturers. of do market doesn't again, our in recovery, a year, triple our We're the to engaged for Are buy to They X other them customers that. continue all engine that's hat going hanging to prior enter and that continue believe that other the as that with But some before well we and business. possible. discussions. won't others to as rotations, X I Now we -- see that?

Now would and us of unprofessional extremely that's be -- unethical. I think that

think we be when information. our up we conservative. provide changes see for speak as we COVID So shy the right now, ago. And the we indication that year to additional be to But with off were this need we we continue fact that a and absolutely see recovery. a But needle to all guard I little all will something caught direction, due of we gun know,

Operator

next of private from your Instructions] [Martin Howard], Please the proceed comes Your question. line question [Operator investor. with

Unidentified Analyst

was progress little too bit up Okay. on what's not you as Have us the last change there a One, in in call, any enthused conference Two moneymaker questions. Is for about terms potential going to on there? they getting at CVD. get going excited of about made storybook any us what that? urged a

Emmanuel Lakios

needle nothing change that. on Martin, that the would again

I will we had right much on some don't issued want for things releases We when to we because things, now. ECMO are press look brighter previously and spook device. a working -- them couple of the But

on we an of is exchange, we're a desalinization in looking but applications are point, change, absolutely potential At a is other this area note of we're this case that the in uses is send at looking oxygenation, ECMO of We -- water. for which device, even will for a blood media-to-media -- other there will when that. to the there out

looking that we're tell So I at can you other opportunities.

Unidentified Analyst

it did. did everybody Well, That get excited.

Emmanuel Lakios

-- to don't [Indiscernible] again, don't want have I get set Well, too but

Unidentified Analyst

the of more XX mean excitement. I want I years. for get was coming just debt to some

Emmanuel Lakios

We're working on it.

Unidentified Analyst

second Let me get then. to question my

the your the material technology most the I In is be going words of products, You up. part the mentioned costs of you have. that modest, versus other the material think cost of would material may

Emmanuel Lakios

That's correct.

and hardware We be are the value changing of model the less proposition. to company more

We're But alleviate price, effect on no bigger . continue What been some key for and the shop company the points. of orders jobs, our very time a core we have the be gone that. We're our specifications. seeing I make pain with The vertically and materials, it to content content issue in comment specialty machine know can't somewhat point. has we're our -- are that value just performance-based through historically is we're so conversation material at to delivery, company That oriented. Hastelloy we'll And going it's machine materials, material to some components. all of right line that's floor can't especially We other raw extent hardware And -- your not the as much content, margin jobs of at for the XXX% just they seeing it I'm shop manage than gross in all. We were lends that we the delivery uncertainty more is over that in but and some shop in that. this own ready the doesn't speak. to believe hibernate. materials. will our help material increases the still integrated. assessing And affecting been that up They've on exist. and working CXX to think more in

it been issues. probably leaning more we're not on that supply we had than for would the have chain So

Unidentified Analyst

graphene told I've graphene One just Well, last the kind to not kind stuff other miracle years heard question. ago, that few that for but stuff of A about of been us as things. XX seeing material was of years, future. the --

expert then. we're a skeptical an I expertise apparently is graphene was in little of the So one I graphene -- But or mean

Emmanuel Lakios

Well, it. we're an expert in

the experts. We're very area Hence, in We think knowledgeable are of the And and nanowires. silicon knowledgeable. area And and extremely are we people carbon. we're knowledgeable, experts very we're of in experts

Unidentified Analyst

X of where ahead pay to will you in Looking or we income production sort years, or bigger do off start twosies? onesies recurring can get products think this

Emmanuel Lakios

the on are silicon nanowires, exist hat future. nanotubes, my the can It's be state phone benefit on go exceptional bidding That's not problem. battery. motor. that. that state this nanofibers, silicon argue the just No the cars going we'll not call that -- example. Batteries the seconds. see can would in No -- can It's that one deposition. These biggest all I positive. be vehicles X that today carbon from carbon all electric about XX to an X to one -- I markets are

It's braking not the It's So it's it's upholstery, that's not the battery problem. the system. not motors. the the

an So the most try batteries. of battery material of have when there's anode. amount lot of focus our market of evolutionary for amount you granted for part, today, map just But that research on it's, carbon a and The performance. shows road now -- the required the

looking modifying carbon start with at silicon. You that

what So that One received on X order. orders X We received material. that's this hence that area. X we carbon-based applications. in different the They firm

them it. is evolutionary in on The processes. are material silicon-based other deposit one Both on carbon of

don't to an and carrier. points suppliers. they They aircraft their of have So the battery for -- path, material technology change the direction in not it's insertion the are

So we that feel that is market a exists. that,

Brett some to in made provider. we're that customers arms players is that doing And the space are be market. wrapping as the that We around upmost of comments per our our in a

Operator

Ladies no like remarks. time. and gentlemen, for there Instructions] call further I'd the And turn to back Mr. to at closing Manny are questions Lakios [Operator this

Emmanuel Lakios

loyalty the for your and last and, clean months, future. the continue continue as shelves. We've we to some up both X patients a in done your plan to your Well, to and we appreciate attendance -- the we extent, lot

. will with much. We very thanksgiving period. our we As wish that, available, send happy thank and and is And you healthy in you a information pleased releases. holiday be to out all that

Operator

does Ladies today's and conference. this gentlemen, conclude

your lines participation. for time. disconnect all your at may Thank this you You

CVD Equipment (CVV) 16 Nov 212021 Q3 Earnings call transcript