CVV - Earnings call transcript Q1 2022 | CVD Equipment Corporation

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Operator

Greetings and welcome to the CVD Equipment 2022 First 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. If anyone should require Operator assistance during the conference, [Operator Instructions].

As a reminder, this conference is being recorded.

some followed with session. a begin will prepared by remarks, question-and-answer We Directors, Executive on be Officer. of and of will call the Thomas Lakios, Board Presenting today CEO, Emmanuel the Chief President Vice and President and CVD and Financial McNeill, member

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

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

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

Now, to over to I'd like turn Manny. Manny? the call

Emmanuel Lakios

regarding our CEO today Welcome information related President, you and pertinent CVD you, call. to business. important first Equipment Lakios, presenting company our is performance to and to Manny and and Thank My I'm Doug. Corporation quarter to quarterly name developments conference be XXXX pleased our

your conference in and to your information, end the Q&A thoughts of we our you important call we As providing the will look to forward at be us, session. questions substantive are

our see the for and and to improved have the of form the been to resources months majority the company's realigning of we're Equipment. four of XXXX strategy spent and all Having growth, of period market path future towards first The profitability reorganizing, result transitioning, and of in products. stakeholders adoption CVD refocusing, the beginning exciting orders an XXXX a

on focus power market of of includes and technology, fueling well electrical for electrification charging strategy that The electronics battery electric growth. as our power vehicle transmission. markets as the segment support high is Our everything present

silicon orders million QX XX $X.X orders year-on-year the to have orders exceeding we for as prior-year. QX XXXX. million, compared of products CVD four-month $X.X X of XXX% orders million in the XXXX, orders were while XXX to continue our period for to market to battery of fourth Our for X.X nanomaterials, nano XXXX primarily In increase million R&D $X.X consisted addressing orders XXXX. systems, were and Of the our first systems capacitors, in XX Equipment CVD shipment XXXX the orders, of XX compared market carbide advanced system. for announced the to carbon-based and first XX our recently independent are the are the coming both of orders for advanced years. and in starting the growth quarters these are system's system and grow segments these all company, for the approximately in remainder The planned quarter. system in compared research, processing, April, to legacy nano million. R&D months same received According PBT expected system for first XX are for production,

We earnings as sign end take consumables of our at for held XXXX, aerospace call XXXX this market. in market installed our for also that we the As we received a base recover. which the March the to noted aerospace is that was orders in beginning serve

on four during to the believe prior order and the growth growth of other as at aerospace of materials battery until for strategic markets carbide we orders quarters and is not silicon first systems, continue the use the rate two advanced it focus composite least nanomaterials, and However, markets. recover months We received expected and such XXXX, to validate XXXX. our

four Revenue Tantaline with to QX chain. commodity COVID Eastern extent in impacted as in in Equipment delivery been company the well all lines XXXX, impacts SDC first and in and as for and costs and supply albeit was supply quarter have of issues issues. Our in global caused by the Ukraine pandemic a MesoScribe negative as whole product CVD months the geopolitical continue and of product demand chain uncertainties increases materials the The felt and show not our have unpredictability. group. product Russia negatively instability first the by and the companies to The Europe the and orders in

Some lingering key suppliers chain supply production and our our Both partnering issue goal of self-reliance with support to countermeasures and are in-house our our will our essential customers. are to of expanding to commitments address capabilities. the

this our manufacturing expand facility of to to And is Central capacity in in objective plan in-house end the underway well be plan is half Our and XXXX. our the second self-reliant. XXX, Islip

believe from our to ample XXX all liquidity XXX that our of the our facility. operations In we sheet XXXX, facility. first In we support our areas the space mortgage continue We with this in the balance of facility strengthened growth. quarter we proceeds sale our year, and to has XXX of of received satisfied the

to quarter our I manufacturing position order the introduce Equipment capacity, provide balance all McNeill, sheet will along now first market the and like growth CVD XXXX Our summary. financial CFO, would help and Thomas rate, with future who to operational focus, continue of path along performance, our profitability.

Thomas McNeill

the in share, the million million were $X compared as $X.X $X.XX Thank $X.X was An you million loss Net quarter Manny, revenue first everyone. share million compared increase the of first quarter first for of XXXX to million well certain which per to diluted or This XX.X%. higher the first as or as XXXX. sales of quarter levels, operating a end result of million component quarter good CVD's for quarter CVD of than mix, XXXX, 's compensation an as first diluted cost improvement loss of loss of per to offset XXXX. compared $X of $X.X costs first for $X.X fixed leveraging $XXX,XXX XXXX, was as and and a costs. increases of improved to operating XXXX. improved resulted from afternoon product was quarter $X.X loss orders the on the which in net XXXX by $X.XX towards of million of more

and deliveries. lead also in reduced facility. XXXX has CVD In impact QX manufacturing efficiencies. company's consolidation to This result to revenue by to the well extended cost been the certain times, with as in assessing into a and to well was decreased suppliers delays, material manufacturing in of costs as sale administrative chain addition, the quarters, mitigate and as CVD's the reduced XXX related July CVD has gross primarily as manufacturing costs which placed continuing profit and other recognize times costs future delays costs manufacturing general may on potential ability result XXXX, building date, lead of to legal increased margins reduced mitigate and operations supply as orders in attempt impacts. the of components, the to in material lower facility Beginning impacted company's XXX $XXX,XXX, increased

of Xst, addition, With such, our Drive remaining delays potential cost our debt no CVD we $X.X material further mitigate mortgage million is delivery Technology in-house XXX and manufacturing XXXX, outstanding. on both increases. satisfied to have balance In South flexible our and facility, utilizing March on respect to its sheet, as

or receipt $X.X of Turning we XXXX $XXX,XXX to million, at orders million XXXX, at of during is a to million. March compared XXst, decrease $X.X XXXX backlog, backlog new our to XXst, of as million of the March the due the decrease X.X%. ended XXst, of December compared $X.X quarter had $XX.X timing as of revenue to This

in $X orders million, achieved new in has April the this XXXX increased of our with backlog. of However, substantially excess

December the XXX million of on impact $X.X XXX our respect as While the items for cash is $XX.X crisis turbine was net timeframe. our believe well reduction to form facility late gas This negatively adjusted activities. continues our $XX.X million, industry, effect aerospace With occur of sales, travel loss equivalents XXXX to of of operating March to COVID-XX $X.X to amount liquidity, decrease the XXXX. in XXst, compared engine analysts cash as the and at XXXX-XXXX improvement will the and in primarily the in XXst, non-cash reduced -- of begin industry our the million satisfaction as other our mortgage our at on result of of million and of debt $XXX,XXX generally

at impacts decrease impacts million COVID-XX $XX.X at compared $XX.X was or a of longer-term on highly X%. the negative be XXXX, XXst, be chain may of from revenue impact length with the business. predicted, to previously the have supply in we capital initiated profitability, The we as especially December to mitigate working cannot ultimate discussed. Our supply and now uncertain, there chain no outbreak to our XXst, XXXX potential March actions are time while impacts as impact of and the And our assurance million periods that $XXX,XXX the the factors could our

capital capital the our of upon orders, chain ongoing longer cash actions continue or orders these ongoing supply effects needs. turn anticipated projected upon, to expenses April as orders, equivalent call of Based back take to XX cash completion other XX capital XXQ And substantial X well will equipment and I'd managing lessening like the today. operational discussed, maintain things, our include we meet to the in cash all profitability among assess Should of the to receipt flow the believe to return of to form is be and to delivery expenses. The the aerospace our expenditure the operating the Manny. COVID-XX our months of dependent support new now our which efficiencies, continue and Our environment and will and operations and operating requirements of for current in the We the market, planned working capital improvement existing managing million. in business cash on filing the sufficient next significant positions operations the factors, of XX issues to through and working as excess our from worsen?

Emmanuel Lakios

summary, our In on and and on of of presentation. transition, which first XXXX, in a the built of year reorganization months who do we for serve. from focus quarter everything efforts you was XXXX we thank have our four Tom, again

look optimistic. on forward to are Our XXXX We return of focus to and employees, our cautiously and shareholders, pursuit profitability. remains the and growth customers,

Your comments you. to of your important Thank up we'd with questions door the and our like to to presentation, the open questions. are close us

Operator

line time, question. session. and proceed Orin we your this with the you. Investment conducting Thank Ladies question-and-answer a at Our from first Please of Hirschman will Partners. Instructions] gentlemen comes question be AIGH with [Operator

Orin Hirschman

Hi, how are you?

Emmanuel Lakios

Orin. Hi,

Orin Hirschman

through battery, interest Applied the the or are the on? that of some of other it there some the the and of terms that of and of renewed in and of application Materials? ASP other that the some of or the go And terms what beat the can in In depends demand growth does to that magnitude on, That's or just seeing carbide competition s equipment, applications is nano you're face silicon the what you you what like the guys for competition position? [Indiscernible] depend ASPs specialty Is applications for? ASP

Emmanuel Lakios

don't you Typically, great -- on thank we all questions.

applied don't Let markets in see me really on. just start the that's space, we off our that and with -- focus we materially

you is potential do I now gives the XX we say company can support, competitively that to service leveraging competitors. expanding proposition, we suppliers advantage manufacturing with technology our we here that out technologies as spurred bringing against, and internal value do and a the from it and our developed. the that an that degree would comes would United that the our that advantage, much provide years information are bit imagine, we that in States. opportunity, see, of have we and ASPs of has equipment of of not do would back as speak this to too both focus Some in a United we capability and compete the globally overseas we here Much States. the typically from priced, believe I to higher can from

too the consolidation silicon think continue market. say benefited And at that that know, -- would have you we're I you of that many carbide or vertical our companies gone the In clearly serve the from quite a we extending marketing I broader may know, far well through has of that. to of is focused a So area of that's what the as integration. bit can and that marketplace it merchant on say I serving will the into actually without suppliers emerging plans. least,

Orin Hirschman

Okay. Thanks so much.

Operator

with your Janney. of question. question comes Reiss Brett the Please Our next proceed from with line

Brett Reiss

Tom. Hi, Hi, Manny.

Thomas McNeill

you. are How

Brett Reiss

Congratulations flow your good. than see good think businesses? for continuing business. comments progress that carbon-based past battery demand I'm capacitor growth order type the less the that on of be on you opening will The in nano Good, in you and orders, you legacy the said that your Do lumpy quarter.

Emmanuel Lakios

the I time units side the more in would of than would a that depending revenue be lumpy. we be of less longer the magnitude could The on take side, number months or satisfied which say of order over the the potentially period order, in. order the

may So business, operations. some order other this to create where be see we is but the you with in continue our backlog manufacturing an rates a months, efficient months all can higher than in to effort grow

Brett Reiss

that systems nano that think carbon-based if might recession we a be be Do there the a by a do think Okay. you capacitors, or into not? for people more you will which battery consider possibility, demand impacted go and the recession,

Emmanuel Lakios

Yeah.

in the production a the a in requirement are of had of requires I silicon proven of batteries, majority growth because the believe I for has both would devices, manufactured give not initiatives the to that growth, answer with carbide. systems, that vehicles a infrastructural call think storage having for I'd away wealthy. not everything. There say if I see very us area. electrification this have It you, I'm also -- don't I being would be in the transmission, to be lot macro would to independently say charging an electric of that I and strongly going I economist. recession. vehicles positive XXXX probably I beyond out accurate

question, think that, the but we're support in of your to the has really So to going an electrification I of world answer can't to I Thought foretell future, option. continue much this process don't everything.

Brett Reiss

pull have What was is the be look, seems so hockey inelastic guess to whether since Well, somewhat at type and demand. recession-resistant electrification eat will gravitational those tell. to be will time we of Right? driving people are forward, puck I products the moving

Emmanuel Lakios

Optimistic, our be to continue of infrastructure continue ensuring my in facility but forecasting. opportunities we We COVID, optimistic, have But backbone I'm over we that, in apologize. that the I timely advantage with to all any getting manner. are just we conservative. still be conservative in so a our to take

out, but we quickly. we'll them away these have have that a adoption products, push not of be broader we're we're turn to development So going a positioned business, for it, been not for launching to technology to going the that we've fortunate we so it level process and market, for received of order our

Brett Reiss

Okay.

Now, relieve with to what suppliers little a bit -- dislocations? relieve respect of been can to supply the with that chain the nature supply dislocations, chain into go partnering would is partnering the you

Emmanuel Lakios

in good question. a product that's -- our systems. we One is operate example We electronics that

-- for pan provide well partner pan sources that we less of than partner ship these a in will able than to that maximum receive we've time multiple them us product, typically with to and we on or potential longer-term otherwise. time them some have of off have would in products ship were in plan two, did and for our the order -- orders We the we but tools, less will -- visibility one, and

process. Europe. So from the managing Eastern level some inventory, And suppliers’ suppliers to in it's of a are had managing to that heightened gone our selection away We've shy we've expectation.

Brett Reiss

and on God be at capacitor -- too I momentum battery there the will next for over seems back, where $XX Am $XX got of the CVD that enjoying and That to above, the to Is aerospace, comes point years, two be that over flow with we're products the one. you're will last so order those rate, pipeline nano product one getting that if to just we've my One nano order for product willing capacitors. continue. million that much? run based carbon-based product flow and the incremental the skis annual robust and to carbon-based a it battery

Thomas McNeill

So that lot level question. of that first, and you, thank Brett. There clarification I was there's just make want sure a a questions in of to one

nanofiber imagine development they're growth of because processes. battery and serving all powder marketplace, still are immediate evolutionary, substrates, -- silicon existing The an would levels see you would an where is the are materials we on First adoption larger existing battery capacity product its and the but launch, other granted growth that not carbon technology carbon that market. battery suggest revolutionary, as nano existing the of and adoption, product applications. adoption systems can not carbide used phase different is but Those used at you technology, The they of evolutionary capacitor further so in than that of technology in materials along to add capability be of the all, product market, additional that and the our technology in market. are associated I in nano that

Emmanuel Lakios

continue Now we marketplace. support said, to our with that aerospace

some albeit can time, same for we're turn We continue our to to period the ever. aerospace that send not this level orders you as markets imagine other out but of away not going at quotations,

We commitment presently. customers that with in to have services we our and supply footprint spare very also strong parts and a and them

of supply if pleased we've would continue than enjoyed both our addition equipment, quarters. that So the to and you over we that are would non-aerospace be business to more in be to accurate last of couple

Brett Reiss

One -- last one.

you initiatives shortages in-house status have employee You support to and all about and the engineering growing labor talent the there. of could What's markets, read these shortages.

Emmanuel Lakios

labor in There live the we are Well, shortages. world. same

low. is We employees rate our fairly. value -- very extremely attrition it's Our treat and

be we development additional still plan want to we'll additional complete. that that develop. we'll the we products XXXX we our strengthen. as And product to to in quarters have continue to will and staff, continue hiring that XXXX over are our next We there do believe And

and risk continue. in our noted will is factor, it's a we It reports. So

We and a manager acquisition base. talent we've incentivize have HR a that of and year, the started and communicate job exceptional coordinating on to of she the employee to has - new our the at hired both programs an done motivate, turn and the

Brett Reiss

Great.

Emmanuel Lakios

this but to a easy, these at there's point. path not waters It's navigate

Brett Reiss

feeling you're better. Thank Tom glad I'm answering and Great. for you questions. my

Emmanuel Lakios

And for Thank the chicken thank soup, the way. you. by you

Operator

investor. question with of Our your line the Please private Howard, Martin next question. a from comes proceed

Martin Howard

it company's from be to there company in product involved with human some your there delighted gives Brook very future, about for to I'm price? agreement take Manny, we'll would XX, the you better growth bucks. on get. is I'm this. a the [Indiscernible]. saved an a my to to you of a the Thank Is line comment okay. that there while its graphene world cannot line higher where on hear, now stuff It dream anything of way Hi. but a stock potential about product glory the the product could [Indiscernible] XX was for the that been justify are future. from this to foresee for will you grow stock there that what significantly we [Indiscernible] Stony that disappointed That's dream you're and take material not you the survival, but glory a of the Is sounds question. or product This like oxygen, was market. dreamy a XX, I'm asking is has anything

Thomas McNeill

that We rocket are We'll those, wanted will of company -- not Legal science -- of I all bleeding infiltrated risk sell growth a there's people sorts -- of me silicon can I a we're XX on to edge a next that's and of for orders growth to technologies, orders. think can't to "cool of systems they received will call ourselves saying up something and universities not the for and as are we number my to while, carbide some, but do of out been next we that an XX, " that out I'm But going focused There's bunch markets risks is that of X, strangle we've and products. you has tools, let order and growth when silicon lot I hundreds nanotubes those whether speak those may Not thousands counsels of get different carbide getting tell and But on going where of that mitigating there. and we you technology. in to to the sell [Indiscernible] processing. on We've legacy in can me. thousands opportunities. properly to around for tools, positioning carbon the focus get saying those come devices tools XX and sort, there of do x know, we're market. we're say,

Emmanuel Lakios

already up received we've first the order. one XX of in -- we've but shipped these, to before -- we've received received we've units

in say after adoption evolutionary of and would is even to next -- of you but I More themselves, and we evolutionary, tools XXXX. production. that's And possibly carbon the announced some these to orders. the prove that's we beyond, capability high of in the XX are to is today, people development serve growth in of batteries for command truly high-tech to that likely battery, us in a -- here that the rates home the today of you're technology what energy time not that's on field, a going developing something going to segment. the XXXX biggest and going batteries demand gets years, working we've I'll get that we battery. the more large anode period The adopted. developed revolutionary. electric that on. capability, not over -- XXXX technology in to is element -- tell that the these cathode be technology. argue and So challenge XX it's we there, are Graph We that are them there. command vehicle, are even us to universities, something be green the that in We sell we've which none validated for about of improving able whether And with the both carbon an side is by But see series and powder in materials, is that not storage, order not time, system will sell

life there and a launch, you is we're be have So -- pleased orders areas to that. continue a to cycle, you a cycle there is so far have position proven have where evaluate but multiple you and with adoption, customers we'll product our to product these multiple development

Martin Howard

Thank very you much. Okay.

Emmanuel Lakios

sir. Thank you,

Operator

There are in questions remarks. no to further the I'd to queue. the hand closing for management like back call

Emmanuel Lakios

Well, we and your participation, appreciate the everybody's loyalty, of support your company.

We month on quarter. into We've our and given next we are a second quarter, hope the you again, communication. the first of safe. insight we thank insight some to some the quarter, second look into the forward month stay first we you you And and all just

Operator

this gentlemen, your Thank and you for conclude teleconference. does Ladies participation. today's

time lines your You wonderful a day. have disconnect may at this and

CVD Equipment (CVV) 17 May 222022 Q1 Earnings call transcript