CVV - Earnings call 3 2023 | CVD Equipment Corporation

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Operator

Greetings, and thank you for standing by, and welcome to CVD Equipment Corporation's Third Quarter Fiscal Year 2023 Earnings Call.

As a reminder, this conference is being recorded. [Operator Instructions] Presenting on the call today will be Manny Lakios, President and CEO and a member of the CVD Board of Directors; and Rich Catalano, Executive Vice President and Chief Financial Officer.

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

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

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

call I to would now like to Lakios. turn sir. the begin, over Please Emmanuel

Emmanuel Lakios

developments you, and to our pertinent thank third all discuss information Thank you business. our for company joining quarter XXXX Sherry, and and afternoon, today results to good related us financial everyone. important other

Q&A are forward and important in us, your questions session. to thoughts we to Your look our

order As will so. to do and previously levels cyclical communicated, equipment fluctuated typical highly our have historically continue the process is and This revenue for industry.

we while decline be higher are revenue approximately year-to-date experienced year-over-year such, million X to prior of X.X% the As $X.X year. quarter XXXX revenue we or that our months continues $X.X pleased the than in of first million, third for a

months no the were of PVTXXX On booked electronics system sector. XXXX. defense during received in of quarter, our and there $X.X third orders new the we front, order the million aerospace principally high-power X first orders, In market, in the

PVT we development in product installed to Our their systems PVTXXX existing meeting expectations, base of customer goals. continue performance are support our our and end

wafer and overall well shows and conferences The is of as cream this market dependent purchase equipment well in our for launched fully potential direct on The include silicon including field, device the funding our carbide of end outreach both the carbide-related our as manufacturers our September. obtain trade ability required efforts multiple qualify and have product We ability marketing customers' PVTXXX key and expanded to wafer performance their past to customers PVT the manufacturers. silicon to as their recently their customer systems attended conditions, our include equipment. success integrated customers our PVTXXX ice systems our with engaged conference as to to

We storage divesting noncore team opportunities customer our allow equipment to and progress strategic continue electronics, potential to entities of and product key make defense. to down on and business high-power aerospace winding materials, markets focus energy pipeline our battery of lines the in

and $XXX,XXX. of company Tantaline payable announced, to continue upon and we a business purchase other exchange in into license milestones. certain intellectual and is in May purchase with assets certain for a subsidiary in third to party several entered approximately installments The MesoScribe August XXXX, metrics property and our As license performance sold XX, price previously our agreement certain the and in sell

During the we X members quarter, Wasser Board Dr. third welcomed and Ms. Deborah

to investment. both bring remain extensive the strategy achieve the Lotfi, profitability, high-power return Dr. and consistent financial members communications and Mrs. the for committed electronics Wasser Board areas company of course of and Ashraf governance in Lotfi. We growth stay corporate to for long-term experience on our to

of who turn return to costs. I subject results. our orders system over the reduce to Catalano, our receive would Our to provide quarter continue our our will and an overall profitability our third to ability like is to Rich CFO, efforts additional operating to call overview

Richard Catalano

and afternoon. good Manny, you, Thank

that $X.X lower million was revenue. system our segment higher revenues PVT primarily related by was our in decrease $X.X This was the third XXXX the revenue offset quarter represents primarily Equipment decrease revenue to third for attributable million of CVD XXXX. a partially to as of revenue This aerospace $X of $X.X in XX.X%. or Our to compared for lower quarter million million of

be terms. the to X equipment These input the be million our $X.X based were to our by transferred subsidiary modified Our was due customer using was of September certain such on CVD time MesoScribe during May revenue these down were contractual contracts revenue sale customer contracts and were of contracts be of the our wind in to operations. There the Tantaline our at when months XXXX, over XX, to recognized point revenues the time where will method. under now the XXXX lower materials that ended recognized the

million revenue for date at Our the XX, recognized months XX, June XXXX, modification. deferred of revenues X was $X.X September XXXX, that on of the ended includes and contract the

million compared well third as of The $X.X loss was of quarter in lower increased million income operating increase third Our XXXX for to as the 'XX. costs. operating operating as was operating the to revenues for due $X loss quarter

business, well quarter as MesoScribe profit to costs from as in lower component our quarter was wind-down higher in contract Tantaline margin the to quarter decline is prior increases employee-related the operations. operating selling and our as well third higher prior to of margin expenses compared in again, mix, as the XX.X% support subsidiary was and increase higher costs sale, professional The due our as compensation due profit quarter. of in XX.X% from gross to certain additional prior gross costs the as Our the in profit of fees. growth the results the in expenditures our primarily third as due percentage current to changes The well gross year year

last share share quarter our At diluted. the $XXX,XXX interest and $X.XX for income, net $X.XX nonoperating and third to loss basic of per or which diluted. was or of This the compares both for income, basic net per principally for consisted $XX,XXX year income

orders to beginning approximately slightly of million was compared million. year, were the as backlog than as XX September as This at revenues our $XX.X of -- by less $XX.X the Our $XXX,XXX.

about was September planned to at down $X.X backlog wind reduced, by and million to reported Our related million of related Tantaline however, XX $X.X also the MesoScribe.

million, the similar beginning million the to the of And equivalents and we million XXXX. the of $XX.X XX at of beginning our capital as started was This September to million. working compares cash Our was $XX.X year. at very $XX.X $XX.X cash

related In July employee the XXXX, announced did the related million from period. -- IRS credits credits $X.X XXXX to we collect of fiscal retention

future operating results, predict have or future will the our our operations cash uncertainties what economic position impact results to on geopolitical of flows. and for our and we unable financial are As current

expenditure return all operating XX planned the believe of capital next consistent pressures for -- working profitability cash expenditures After as sufficient to months. other inflationary Our as and expenses. receipt ability projected operations of well new be to requirements capital is and chain dependent, mitigate our among impact orders, disruptions will our our factors, well and our these things, as managing from equivalents capital equipment cash the meet flows we to to considering and supply

maintain necessary as working We will our continue operations support and our our will take to needs. cash operating to assess capital actions to

I will now it turn Manny. back to

Emmanuel Lakios

of shareholders cautiously and and our to profitability. success efforts optimistic. Rich, products. of financial markets to on focus to continue consistent employees, reflects to pursuit our and our forward years continuing thank We you Overall, and our summary, growth return for build ahead to remain look our focus your results XXXX the our the customers, our in the presentation. In strategic on remains on

questions Your to comments us. or are important

formal floor your the presentation, off With questions. the of to I like open close to would the

Operator

is Janney Brett first Reiss Our from Instructions] question Scott. with Montgomery [Operator

Brett Reiss

is? in customer you do existing expand that to I has what have decided softness -- idea not The PVT the your why orders, any that guess, means,

Emmanuel Lakios

we for Well, what are themselves, expectations normal I say product. And their performing also specifications. but the adoption, end installation, can't speak of of and that to continue matter supportive as is a in our it's the to as if. the can customer very qualification And ramp-up of are of not our be I to process say, always I tools them. and when, They

their business. say I more any can't So particular about again, really

Brett Reiss

customer I sort capital And raises. in were raise, from capital needed But a a been second market the you that end, roadblock bit for is had -- with a second recall also Okay. to the some do challenging that's which, this with there of discussions of potential my that customer. PVTs potential

Emmanuel Lakios

ability acceptance of launched the ability community first a of products companies. brand is. our wafer perform the would success who say We've at quarter our in gotten we call, the silicon our It makes back many as potential And we and our merchant. our script, the hired their is as the we that as both we product created March the carbide of our our as of broader to start-up perform to time the And includes in the well in of and and and the customers, -- a stepped awareness we funding. Back to the it also ability manager for year, companies. all in company as sell their CVD commented had say our what raise game high-power performance, PVTXXX trade in own consumption qualification good, the up of in the as marketplace awareness. anyone frame, and growth market customers' to that I and electronics, may have both I shows. And And all we've we sales a presence or yes, --

to a positive. crystals electronics make the wafers, that that just and engaged wafers. just they crystals make make grow companies companies the very make we're with So integrated, power crystals, to grow that down fully are Today, that's all from which established grow that large companies means start-up wafers that and

funnel. in a have opportunities we So broad breadth sales of our

customers potential we've not the And bill and that some what to of was conditions. needed, though said. capital I additional raise one some at with discussion on our of able of that quotations the added level providing and terms even So and them accounts of the fit the of particularly we're

troubles and a market you very tools accounts are So statement. an that But market perform. venture is well it's also, both us. indicate, funded potential again, we exists. if as very as The that soft I accounts. very, have say, not The also when, The

So mix. it's a broad

And with with yes, and accounts answer well. -- in-depth having question, potential as engaged other we're to your conversations

Brett Reiss

for poking there see it I for being Right, that a what been very you bound business has military gap website, semiconductors, semiconductors. with good. -- be of involved perused see use website, state I the for I and this you seems gap guys? right. and your guys what prepping are looked the in kind your world it potential with revamped bound With to is wide which But of of call, lot around wide is, In

Emmanuel Lakios

climate is in X -- another that this is little as one. bit conflict large our we're a such. semiconductors, unfortunate gallium with Silicon just electronics, gap major with conflicts X zones. base band material about High-power carbide Well, nitride

So high-power the we already that are in in electronics area.

is obviously nitride, systems we which sell gallium other to. R&D The

in uptick have for we not military -- area, applications. that we a So seen large

we've products space. But had electronic large a release, seen are mix gas and the and defense, -- we year other of the share in our for that turbine We which our that this CDI have aerospace we've engines. products, interest are market press strong R&D some we aerospace seen with defense and noted for had in tools

quarter, R&D applications. that We of also, well composite potentially area for would names past say as notable utilized be the received hypersonic from systems in materials orders this almost high-speed, materials ceramic in as X matrix would

area had it an and where statement. legacies, defense It one when, of -- It's in as we're water the bills, gets crystal aerospace and our it and our not we of carbide our the that's the quite has adopted, while frankly, gives pleased and of of allows if -- tread So to silicon product helps, more legs. the CVD that glad system pay -- history us electronic is a and part performance the business. we our with than course, because, high-power growth again, it us is line runway

Brett Reiss

your from initiatives Also tantalum website, in our the still when Okay. the out with but business, of Tantaline business we're it implants. getting comes to we're

Emmanuel Lakios

not portion that -- are equipment sell or was yes, [ whether related. is applications of business, we the It's we to those ] bone whether -- it's implant large are that more devices, but our that Yes, tens related of have, course, actual there to some it's continue which a applications.

Brett Reiss

of where at these your employment be? now level Okay. headcount of count the And is mean I openings see days? any you Does head right the want didn't for that to CVD. thing. what is kind And business last one existing

Emmanuel Lakios

we XXX think We're Islip York, Central of north in properly in our in Upstate site. sized. And facility our employees in we're here New Sogeti

look our continue find along may to ways as need to to we and it talent. talent we the come continue We improve always as at efficiencies,

near-term both and we headcount rate, our long-term monitor we order our So adjust accordingly. and

Brett Reiss

and an working out for real and start If Right, existing added right. estate in topping interest are down, facility down rates therefore, rates capital? and come appetite you sell lease come do still to to your back cap have

Emmanuel Lakios

we but ample and We business have never our XXXX working have ample -- capital we enough, have fund objectives plan. to

but need raise So to you want it. money it's when good, you never

not they themselves. continue would though. But at actively we to So options we're looking avail look as

Operator

the [indiscernible] There over to questions back are closing I like this time. no turn would at for conference to more comments. management

Emmanuel Lakios

and Thank everyone to for dialing you, appreciate in today. your Sherry, on the attendance you thank We call.

also well, your loyalty suppliers. and loyalty the appreciate As of we employees our and

have And you. any further to Happy this call. concludes quarter feel myself or third to all. Thanksgiving out you If Thank to free reach questions, Rich. our

Operator

your you participation. Thank for

You may now disconnect.

CVD Equipment (CVV) 14 Nov 232023 Q3 Earnings call transcript